EXPEDIA, Inc. (NASDAQ: EXPE) is one US company that has for several quarters used an advisory release process for its quarterly earnings releases. The process has run smoothly and resulted in an increase in the number of investors accessing the results from the company’s website, which recently was upgraded to a new platform hosted by Nasdaq OMX subsidiary Shareholder. com.
Expedia’s Senior Corporate Counsel Mike Marron will be participating in an upcoming webinar on web disclosure being hosted by TheCorporateCounsel.net on July 20, which also features Bill Haney, Global Head of Investor Relations Corporate Services at Thomson Reuters and Demo Skalkotos, Senior Vice President Global Corporate Solutions at Nasdaq OMX.
In our guidelines for the new online disclosure process, we include Expedia as an example of a company that uses advisory releases as part of a simple but well coordinated online disclosure dissemination process. In this post, we’ll review Expedia’s Q1 2010 results announcement.
The process starts 11 days prior to the actual results announcement when Expedia issues the usual notice via a PR wire about its upcoming earnings release and conference call. The release informs investors that the earnings release will not be distributed via a PR wire service and advises them to visit the company’s IR website for the news. The same information is added to the company’s website event calendar and distributed to subscribers of its email alerts and RSS feeds.
In our guidelines, we recommend several improvements for this advisory release, but as it stands it serves its primary purpose of giving investors adequate advance notice of where and when the results will be posted.
A 4:00pm ET on the day of the announcement, Expedia issues a second advisory informing the market that the results have in fact been posted. Investors are directed to the company’s IR homepage on which the results information is prominently linked. The company’s email alert and RSS feeds are updated simultaneously to the information being posted to the IR website.
Around the same time as Expedia issues the second advisory and posts the earnings announcement information on its website, it submits its information and the earnings release and investor presentation to the SEC on a Form 8-K under items 2.02, 7.01, 8.01 and attaches the materials as exhibits under item 9.01 (d) This is an important step in the process as it provides a reliable record of the information disclosed primarily via the company’s website.
In this case, the 8-K was accepted by EDGAR at 4:01:39pm ET and at that point the information is unambiguously public for the purposes of Reg FD. The company then holds its analyst call at 5:00pm ET.
It’s also worth noting that the advisory release process doesn’t seem to create problems for the media. After last quarter’s announcement, the Associated Press and Bizjournals.com covered the company’s results.
While PR wire services may dislike advisory releases because they’re not as profitable as the longer full-text earnings releases, the fact is the process works well and doesn’t disadvantage any of the market participants Reg FD was designed to help.
Furthermore, advisory releases support companies achieving recognized channel status for their IR websites, which is one of the prerequisites for companies to be able to rely on their websites to make information public for the purposes of Reg FD.
If your IR website is not yet a recognized channel, which it probably isn’t if you’re using full-text releases, then your company is at a significant compliance disadvantage in this era where business communications are increasingly being conducted online.
To learn more about how advisory releases can play a role in your company’s online investor communications, see our guidelines for The New Online Disclosure model .