Follow the money: How to decipher financial reports and better cover your industry

Two sessions at this year’s ASBPE national conference in Chicago dealt with foreign languages – that of corporate financial statements.

Ceci Rodgers, a business and economics lecturer at Medill School of Journalism, Northwestern University, walked editors through the nuts and bolts of financial reporting and sorting through the often confusing (sometimes on purpose) world of 10-Qs, 10-Ks and 8-Ks.

“If you can read a nutrition label or a stock quote, you can read this,” Rodgers said.

She recommends editors skip past the “PR garbage” and go straight to the tables on the forms, highlight the lines of information they need, and only then go to the PR/analyst section for explanations from the company.

BREAKDOWN. Rodgers broke down the three most common financial reports journalists and editors deal with:

10-K – annual report

  •  Offers some MD&A (management discussion and analysis)
  • Focus on the footnotes, especially anything listed as “other liabilities” or “special entities”
  • This is the only audited report; the 10-Q isn’t

10-Q – quarterly statement

  •  Income statement – measures profitability
  • Balance sheet – financial health
  • Statement of cash flows – focus on the cash from operations line

8-K – disclosure of information material to the company

14-A – deals with executive compensation

STORY IDEAS. Think there’s nothing in that mass of numbers, percentages and analyst double-speak? Here are some story ideas you can easily pull from a company’s 10-K or 10-Q:

  • How much income tax does the company pay?
  • How much cash does it have on hand?
  • Does it face any pending litigation?
  • What’s the status of its pension funds?
  • What are its “other” liabilities or assets?
  • Is the company “channel stuffing” – moving a lot of product to retailers or distributors and listing it as sold on their books?

WHERE TO LOOK. The 2002 Sarbanes-Oxley law mandates companies follow GAAP (generally accepted accounting principles) that allow journalists and analysts to make apples-to-apples comparisons of companies in the same industries/segments. That doesn’t always make it easy, but Rodgers recommended b2b editors focus on three areas when quarterly and annual reports are released to the media:

  • Income statement – how profitable is the company?
  • Balance sheet – What is the financial health of the company?
  • Statement of cash flow – How much liquidity does the company have?

I – income statement

  • A company’s top line is its total sales plus revenues.
  • Operating income focuses on profit without interest or taxes and tells you how the company is doing in its everyday business.
  • EBITDA (earnings before interest, taxes, debt and amortization) “takes the noise out,” Rodgers said, so analysts like it as a metric to judge the company’s performance.
  • The cost of goods sold (or COGS) shows the impact of commodity costs on business.
  • Sales and G&A expenses – compare this to the same three-month period from last year. If this rises too fast, cost cutting and layoffs might be imminent.
  • Gross margin = revenue minus COGS divided by revenue

II – balance sheet

  • Assets are cash and short-term (three-month) securities. Look for a trend here; are they building cash or not?
  • Goodwill should be less than 20% of total assets?
  • Liabilities are long-term debt (one year or more).
  • Market capitalization = stock price x shares

III – Cash flow

  •     Good ratios of operating cash to net income are 1:1 or 3:1

Author Chuck Bowen is a 2011 ASBPE Young Leader Scholarship award winner, and editor and associate publisher of Lawn & Landscape magazine. You can email him at

Covering China: Possible, But Far From Easy

In this post, EXHIBITOR magazine editor Travis Stanton tells us how convincing his publication to send him to cover the World’s Fair in Shanghai, China, set the stage for a once-in-a-lifetime experience and a healthy profit.

A new friend recently told me, “In Shanghai, nothing is impossible. But in Shanghai, nothing is easy.” She couldn’t have more accurately described my visit to the 2010 World’s Fair (aka Expo 2010).

Six months ago, I began making the case for my senior writer Charles Pappas and I to attend the event for roughly two weeks. The goal was to scour the theme, country, and corporate pavilions on display and bring home a treasure trove of trends and tips that exhibit and event professionals could adapt to their marketing programs.

But it wasn’t as easy as booking a pair of plane tickets and packing my bags. Sending two writers half way across the globe comes with a pretty hefty price tag. And my company had never before sent anyone to cover a World’s Fair. So before I could start worrying about hotel accommodations, I needed to convince my chief operating officer that the trip was worth the investment.

Business Plan. After several discussions with him and other internal stakeholders, I presented a rough business plan consisting of:

  • an Expo 2010 microsite that would house ongoing coverage;
  • an awards program that would recognize some of the most impressive pavilions, exhibits, and presentations at Expo 2010;
  • print magazine coverage in our December issue; and
  • a workshop based on our experience that Charles and I would be able to present at my magazine’s annual conference in March of 2011.

My hope was to recoup at least some of the hard costs associated with the trip.

Based at least partly on my own confidence in the plan, my COO approved the trip and we began exploring our travel options.

Booking airfare was easy enough, but finding a hotel proved a bit trickier. We found several hotels that claimed to be mere blocks from the Expo 2010 grounds. But when we used online maps to chart directions from the hotels to the fair grounds, we found that something must have been lost in the translation from meters to feet, as these hotels were more like 10 miles from Expo.

Walking Distance. Later in our search, we found a hotel that appeared to be within walking distance, but just before booking the rooms we read the fine print: The rooms had no windows! After weeks of hotel hunting, we finally settled on New Harbour Service Apartments Shanghai. We weren’t sure what to expect (and were later disappointed that the “free breakfast” we were promised actually cost 48 RMB — roughly $7 — per person), but it was affordable, within a reasonable distance, and offered free internet access.

With airfare and accommodations out of the way, we set our sights on passports and business visas. The passports were easy enough, as we simply needed to renew them for the trip. But obtaining our visas was an absolute nightmare. We decided to use a visa processing company to help us complete all the paperwork correctly and serve as our liaison with the Chinese consulate in Chicago.

Even with their help, we still needed to complete numerous forms and obtain an invitation letter from someone in Shanghai. Luckily for us, EWI Worldwide, an exhibit house in Livonia, MI, has an office in Shanghai, and agreed to help us out. But the processing firm initially directed us to apply for a basic business visa.

After a couple of weeks waiting for our visas to arrive, the processer contacted me and indicated we needed to sign an additional form. She faxed me the form we needed to sign, which basically said that our trip was in no way related to our jobs as journalists, and that our actions would in no way deviate from the actions of a tourist.

Red Tape. Obviously, we couldn’t sign those forms. Our invitation letter from EWI Worldwide’s Shanghai office, and all of the documentation we submitted to the consulate stated very clearly that we were going to Expo 2010 to report on the trends exhibited there. And we had a pending application for a press pass at Expo 2010, which required our visa number. And lying to a foreign government is not a good start to an international trip to a developing, Communist country!

So we began the process of obtaining a journalist visa (aka J2 visa), which requires additional paperwork. We naively assumed that our visa processors would be able to confidently guide us through this final step in our application, but they seemed as confounded by the consulate’s requests as we were. The Chinese consulate asked us to contact the foreign ministry and get a hard copy of an “official visa notice.” No instructions on how to apply for an official visa notice. No contact information for the foreign ministry. Nothing.

We tried contacting the U.S. embassy in Shanghai, but they simply sent us a URL with information on applying for passports and business visas. We tried contacting the Chinese embassy in Washington, DC, but our voicemails went unanswered (and when we actually spoke to a receptionist, we were quickly transferred to dead-end extensions that nobody ever answered). We reached out to our state senators, hoping they could help. One of them took more than a week to respond (which was too late), and the other offered to call the embassy in Chicago and ask them to help us — but said that given our circumstances there was nothing more they could do.

We asked our Chinese contacts to contact the foreign ministry in Shanghai on our behalf, and when they did so they were told it would take more than 10 days to get an official visa notice. But we did not have 10 days. We were scheduled to leave in roughly a week. It was starting to look like the best-case scenario would be delaying our trip, and the worst-case scenario would be never seeing Expo 2010.

Green Light. Thankfully, after several emotional e-mails, our contacts at EWI Worldwide’s Shanghai office worked with representatives from Expo 2010 who submitted documentation to the Chinese consulate in Chicago. We waited about three days to find out if what they submitted was adequate or if we were back at square one. Thankfully, with only a few days to spare, we received word that our J2 visas were on their way to Rochester — and that meant we were on our way to Shanghai.

The twenty-four hours of travel, including a 15-hour flight from Detroit to Shanghai’s Pudong International Airport, was nothing compared to the stress and helplessness I felt during our visa-application process. There were, of course, plenty of unique cultural challenges while in China.

Most taxi drivers don’t speak or read English, so when heading to Expo each morning, we routinely asked our hotel’s front-desk staff to write directions in Chinese. But more often than not, the drivers weren’t able to understand those directions either. We even carried Expo 2010 maps with us and would point to where we needed to go. But that was no help — not even in the official designated Expo 2010 cabs. The language barrier was generally too great.

Thankfully, there is a phone number you can call in China, where an English speaker will answer and serve as a bi-lingual liaison between you and your cab driver. But that’s only if your cell phone works.

Before leaving, I contacted my cell provider (T Mobile) and requested the unlock code for my phone so that I could purchase a Chinese SIM card when I arrived in Shanghai. Fortunately, I didn’t wait until the last minute to request this unlock code, because I had no idea it took several days to process the request. Luckily, I received an e-mail with my unlock code the day before I left the United States. On site at Expo 2010, I purchased a SIM card for roughly $32. I popped it in my phone, and it functioned much like a pre-paid card: I don’t recall the exact rates, but I believe calls back to the United States cost about $0.50/minute.

Culture Shock. We also encountered obstacles ranging from the personally aggravating (in Shanghai, there is no concept of personal space and with twice the population of New York, there’s twice the shoving and pushing as well) to the downright frustrating (there’s a lot of bureaucracy for the sake of bureaucracy, such as filling out a form to request the form you need to apply for whatever it is you really want) to the absolutely enraging (like how the Media Center computers auto-translated every word I typed on the English keyboard into Mandarin).

There’s a general lack of directional signage, so you never know which line to stand in, which door to go through, or anything like that. And the smallest of inquiries can cause mass confusion. For example, I asked the English-speaking representatives at the Expo 2010 Media Center what the password was for the computers. She had to call at least three people and get help from no fewer than four other Media Center reps before she was able to get me the password — and Expo 2010 had already been operating for nearly five months before our visit in September.

And then there’s the fact that China is not a country where “freedom of the press” really exists. In many ways, we were treated like celebrities while visiting Shanghai. But in just as many ways, we were treated a little like spies. The general vibe from Expo organizers was, “We’re glad you’re here, but we would feel more comfortable if you weren’t.”

I was surprised to get CNN on the television in my hotel room, but other things we take for granted were not accessible in China. For instance, many websites are blocked by the government. Twitter, Facebook, and YouTube are all inaccessible. And if you go to, you are quickly redirected to the Hong Kong version of Google (which I think should be called Choogle — China Google).

Largest World’s Fair in History. Then again, I am still a little awestruck when I pinch myself and realize that I was in China, covering the largest (roughly 1,300 acres) and most well attended (more than 70 million visitors) World’s Fair in history. The fact that China even hosted the event is mind blowing when you consider that much of the Pudong area along the Huangpu River (where Expo 2010 now sits, surrounded by a forest of skyscrapers and high rises) was an expanse of undeveloped farmland just 20 years ago.

And while the media in China is still heavily regulated by the government, the Chinese press enjoys far more liberties than would have been imaginable only a generation or two ago. Unfortunately, it seems that the Chinese might be taking a step backward under Hu Jintao, as regulations regarding the internet and the media have increased since the late 90s. Still, to say Shanghai has come a long way would be an understatement of epic proportions. But to say Shanghai still has a long way to go would be an understatement as well.

We returned to the United States extremely thankful for the opportunity to visit China and to cover what I have no doubt will forever be one of the great World’s Fairs of all time. We took more than 7,000 photos and dozens of hours of video footage.

Mission Accomplished. And that goal of recouping a portion of our travel costs? Between the sponsorships our sales team sold for our Expo 2010 microsite and the revenue generated by entry fees to our awards program, we not only recouped the entire cost of the trip, but we achieved a return on that investment of nearly 4:1. It just goes to show: In Shanghai, nothing is impossible. But in Shanghai, nothing is easy.

To learn more about Expo 2010, and to see our online coverage of the event, visit

Success: Social Media Networking

By Tonie Auer

Everyone keeps talking about social media and how we’ve all just got to be a part of it. I’m not sure who the “everyone” is really, but I’ll fill you in: they’re right. For one of the first times in my life, listening to my peers paid off in all the right ways.

I started small joining LinkedIn and reconnected with many contacts. Through the Six Degrees of Kevin Bacon-style efforts, I found many others with whom I should be connected.

Later, I moved over to Facebook. I thought it would be simply a better way to stay connected with friends. Blogging had grown old to me and was getting tiresome. Trolls were irritating me and after doing it since July 2004, I was ready to slow down just a tad. My personal blog is still there, but is neglected, I hate to admit. It was writing I did for pleasure and when it ceased to be fun, I slowed down.

But, this Facebook thing, it’s a lot of fun and I learned — lo and behold — it could land me a bucketload of work. It really has. I have had my foot in the door to a couple of big contracts that haven’t come through just yet, but it was a way in that I hadn’t before had. I have gotten numerous freelancing and subcontracting gigs there for people I’ve never met in person. Through contacts of other contacts and name recognition, I’ve successfully “friended” many professionals, from the public relations and marketing world to magazines and other professionals. And I’ve reaped the benefits of multiple projects from it.

It has also worked well looking for sources for articles. I needed to find a local car dealer for an article and no one was returning my cold calls. I posted on FB what I needed and about a half-dozen journalist or PR friends posted the name of a PR gal who repped a car dealer. A few hours after posting that request, I was done with my interview. The same has happened for multiple stories. It has worked 100 times better than going to Help a Reporter Out. (I’ve never had luck there.)
So, if you’re still dragging your feet about the whole social media thing or consider it a time-waster – you’re only partially right. It can definitely be a drain on your valuable time, but it can also be a boon for finding work or finding sources for your projects.
Look me up on LinkedIn or Facebook.
Tonie Auer is the real estate reporter covering Dallas and Fort Worth for Bisnow Media.

A Writer, an Editor and a Publisher Walk into a Bar …

No, I promise it isn’t that kind of a joke. However, this is some journalism-related humor to make you smile today. Crash Blossoms features headlines gone wrong. Some recent favorites the site has posted:

Irish priest makes history by marrying own son
Texas border agent kills Mexican with marijuana
Robot helps stroke patients in Portland

Got any good ones to add?

Operating Your Online News Feed

By Maureen Alley

How do you operate your online news feed? Do you repurpose what you find in your Lexis-Nexis file? Please say no.

If you don’t write your own news for your site, tell me, why would someone click on that news piece? It falls under the same thought of newspapers only publishing wire pieces. Unique content makes your brand stronger – makes readers turn to you when they want the news. If the news found on your site can be found in a million other places, readers won’t have a reason to come to you for it.

By writing your own news, you become the expert – not the wire. Use the wire, online sources (Google Reader, Twitter, etc.) to find the news. Write about the news stories using online resources, talk to a few people if you need to enhance the story. And get them published – today! Remember this is news. Writing about a news story that is even a day old online will make it irrelevant.

I know some of you are going to read this and say, “Rewrite the news? I don’t have time for that. I have to do this, that, this and that.” And I say, so what? The publishing process is now daily – if not hourly. And the publishers that can adjust to this and manage these faster deadlines will provide the content readers want when they want it.

I went from being a managing editor for nine issue/year publication to managing editor for a monthly publication with daily online deadlines. I had to adjust from deadlines every four to six weeks, to deadlines every day. It’s not easy, but once you adjust, you’ll look back at your previous deadlines and think about all the stuff you could have accomplished in all that time you had before.

I’m sure there will be many B2B editors who disagree with me in this post, but this is the Web today. This is the future of online publishing success. People expect to read something new every day. Provide your readers with quality news from you – and do it every day.

Maureen Alley is editor for Woodland Management magazine, and freelance writer/editor for other business-to-business publications. She was previously managing editor for Website Magazine and Residential Design & Build magazine. Alley has been an ASBPE member since 2006, and Azbee judge for the last two years. She can be reached at, or visit

When One Door Closes …

By Tonie Auer
DFW Chapter President

Like most aspiring writers (of something beyond the B2B publications), I strive to read quality work. I try to change things up a bit, moving from suspense writers like Deborah Crombie to the snarky memorist Jen Lancaster.

I’ve read many books about writing techniques and I’m even a member of the Writers’ Guild of Texas, which brings in great speakers to talk about the craft of writing. All of this greatly improves my writing skills overall, so it is beneficial all the way around.

I subscribed for a year or two to Writer’s Digest, but found that I never took the time to read it. Fortunately, I saved the magazines and ran across them recently and started reading them. Writing tips are timeless (for the most part), so why not? What I found in the pages went beyond the traditional tips on creating good characters and addressed topics facing the B2B publishing industry, too.

I pulled out one issue from 2007 that included query tips from editors of three consumer publications. Of the three magazines, two are now defunct. (Sort of timely considering all the closing publications across the magazine world.) Flipping through another 2007 issue, I ran across an article titled “The Incredible Disappearing Magazine.” The advice seems very timely, as it talks about what freelancers should do if one of their pubs shutters.

After from getting stiffed a check (most likely), now you have to find another revenue stream. The article’s author, Lou Harry, recommended going straightaway to the publication’s competition. Pretty good advice if you’ve already been writing about a topic or industry. But, with the shrinking world of publications and the increasing pool of writers, you need to make sure that you play up your strong points. Also, stay in touch with the editors who know and love your writing already. I’ve gotten several jobs in the past from editors who have jumped ship. Often, they’ve been gracious enough to leave my name with the editors who replace them as they change jobs, too.

After the Reed announcements recently, you could practically hear the sales departments at competing publishers (like McGraw-Hill) salivating at the opportunities to lure those advertisers to their pubs, too. So, it can be doubly beneficial for some competitors.

So, I suppose the blog title comes into play here. When you find that one door closes (literally, as magazines fold), find your way to another door. You may be able to get your foot in there with a little effort. Then, hopefully, it will open. But, you’ll never know if you don’t go knock.

Reporting Live From the Echo Chamber

Photo: Steven RollBy Steve Roll

We’ve all heard how no content should be wasted in the Multi-Platform Age.

  • Those pictures that didn’t make the cut for that magazine story? Use them for an online slideshow.
  • The sidebar you didn’t use in the feature article? Expand on it for a blog post.
  • The interview you recorded last week for that profile piece. Turn it into a podcast.

But the New York Times has recently taken this a step further by creating content about content that hasn’t even been created yet. They do this in the TimesCast videos each morning, in which the editors discuss the topics that will be covered.

This is an intriguing use of video technology to provide public access to what had previously been private discussions among editors.

The idea of releasing incomplete content is not new. Journalists have been using Twitter to float trial balloons for story ideas or find sources for a couple of years now.

But Clark Hoyt, the public editor for the New York Times, pointed out that his publication has fallen prey to some of the risks of always being on.

On the second day of TimesCast, Bill Keller — NYT’s executive editor — misspoke about a story involving Israel. Although the TimesCast videos are edited before they are released for public view, Keller’s slip up had somehow made it through.

Hoyt said:

It once did not matter if editors had all of their facts straight at the morning news meeting; there was plenty of time for reporting and editing. But with the world looking over their shoulders, things are different. Editors are dressing better, speaking in complete, sound-bite sentences, and mistakes are embarrassing.

In the same article, Hoyt noted that one of the paper’s reporters said something embarrassing on Twitter and a couple of its writers for one of its blogs fell victim to an April Fool’s Day hoax.

What’s most interesting is that the New York Times seems bent on pressing ahead with using these new technologies, despite some of the risks they present.

Which would you say is worse: missing one or more important stories, or being wrong and embarrassed sometimes?

Steve Roll is the Immediate Past President of ASBPE and chairman of the Webinar Committee. Follow him on Twitter at @b2beditor. His e-mail is b2beditor AT