Global Capital Markets

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• Global Capital Markets
• RR Donnelley SEC Hot Topics
• Interactive Data (XBRL)

Prepared and Presented by John
Truzzolino Director, E-Solutions RR
Donnelley September 24, 2008
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Agenda

• Interactive Data Electronic Applications (IDEA)
• XBRL Technology Overview
• Summary of SEC Proposed Rule
• Data tagging alternatives

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Interactive Data Electronic Applications (IDEA)
Overview

• On 8/19/08, SEC announced IDEA, the successor to
  EDGAR
• Stated goal To give investors faster and easier
  access to key financial information about public
  companies and mutual funds
• Will first supplement, then replace EDGAR
• EDGAR will become archive for pre-XBRL filings
• Marks shift from submission of documents to
  submission of data
• Consistent with Interactive Data Initiative and
  previously announced 50M investment in EDGAR
  replacement
• Gradual phase-in of five years
• By tapping the power of interactive data to tear
  down barriers to quick and meaningful investment
  information, markets can become fairer and more
  efficient while investors can possess far better
  quality data than was ever possible before.
  (David Blaszkowsky, Director of the SECs Office
  of Interactive Disclosure)

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What Is XBRL?

• What is XBRL?
• eXtensible Business Reporting Language
  (Interactive Data)
• Each line item is given data tag standardized by
  US GAAP and different industries

• What does it do?
• Creates machine-processed data for re-use and
  easy comparison

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Key XBRL Terms to Know

• Tag
• Machine-readable barcode that gives a standard
  definition for each line item in an income
  statement, SCF, or balance sheet
• Taxonomy
• A dictionary of tags for
• Specific accounting standards (US GAAP, IFRS)
• Industry segments (e.g., energy, REITs,
  Broker-Dealers, Commercial)
• Company-specific tags
• Instance document
• Collection of tags that is the building block to
  viewing and analyzing data

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How Does XBRL Work?
Internal
External
Financial Statements
XBRL-Tagged Financial Statements
Scenario 1 RRD EZ Start
Consumed by
SEC

• Analysts / Research
• Investors (corporate individual)
• Newswires / data aggregators

XBRL Taxonomy
Tagging Software
Financial Statements
XBRL-Enabled Financial Reporting Software
Scenario 2 XBRL in GL system
XBRL-Tagged Financial Statements
XBRL Taxonomy
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XBRL in Action
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XBRL in Action
Mutual Fund viewer on the SEC website to view
XBRL for Risk/Return Summaries.
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XBRL in Action
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XBRL Adoption Around the WorldExpected to be
mandated in 75 of the Worlds Market Cap by end
of 2008
EUROPE Belgium -France Bank de France,
AMF Netherlands -4 Major Ministries Norway -
Exchange Spain - Bank of Spain Sweden
Companies House UK HMRC (Companies House)
NORTH AMERICA Canada CSA, Toronto
Exchange Cayman Islands - CIMA US FDIC, SEC,
IRS World Bank Micro Lending
ASIA/PACIFIC Australia Government Wide China
Shanghai Shenzhen Exchanges, CSRC, SFC India
Bombay India National Exchange, Bank of
India Japan Tokyo Exchange Bank of
Japan Korea KOSDAQ Singapore - ACRA Thailand
Thailand Exchange
MIDDLE EAST/AFRICA Abu Dhabi Exchange Israel -
Securities Authority South Africa - Exchange
SOUTH AMERICA Argentina Bank of
Argentina Bolivia - Government-wide Brazil
Bank of Brazil Chile Bank of Chile Columbia
Bank of Columbia Peru Bank of Peru
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XBRL Progression in US
SEC gets involved in XBRL 1999
FDIC adopts XBRL 2005
SEC mandates XBRL 2008
2007 XBRL Voluntary Program for 40 Act filers
2006 XBRL Voluntary Program for 34 Act filers
2000 SEC adopts HTML standard
RRD among first to file in new HTML Standard
RRD/EOL among the first to file XBRL in SECs
Voluntary Filing Program
RRD/EOL the first to file XBRL mapped to new US
GAAP Taxonomy
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SEC Proposed Rules Released May 30th, 2008XBRL
Mandate Phase-in Schedule

• Proposed three year phase-in schedule
• In year 1, the proposed rules would apply only to
  domestic and foreign large accelerated filers
  that use U.S. GAAP and have a worldwide public
  float above 5 billion (measured as of 2nd Q of
  the fiscal year), estimated to cover
  approximately 500 companies.
• In year 2, all other domestic and foreign large
  accelerated filers using U.S. GAAP would be
  subject to interactive data reporting.
• In year 3, all remaining filers using U.S. GAAP,
  including smaller reporting companies, and all
  foreign private issuers that prepare their
  financial statements in accordance with IFRS as
  issued by the IASB would be subject to the same
  interactive data reporting requirements.
• If proposed rules are adopted, the first phase
  would begin with fiscal periods ending on or
  after December 15, 2008

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SEC Proposed Rules Released May 30th, 2008What
Needs to be Tagged in XBRL?

• Face Financial Statements
• Financial statements refer to the statements of
  financial position (balance sheet), income
  statement, statement of comprehensive income,
  statement of cash flows and statement of owners
  equity
• Interactive data would be required for all
  periods included in the filers financial
  statements.
• The disclosure in interactive data format would
  supplement, but not replace or change, disclosure
  using the traditional electronic filing formats
  in ASCII or HTML.
• Footnotes Schedules
• The financial statement footnotes and financial
  statement schedules also would be tagged in each
  filer's first year, but in block text only.
• After the first year of such tagging, a filer
  also would be required to tag the detailed
  disclosures within the footnotes and schedules.

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SEC Proposed Rules Released May 30th, 2008XBRL
Submission Timing

• Interactive data would be required to be provided
  to the Commission, and posted on company
  websites, at the same time as the related report
  or registration statement, with two exceptions
• A 30 day grace period would be permitted for the
  first interactive data exhibit of each filer
• A 30 day grace period would be permitted for the
  first interactive data exhibit that is required
  to include the footnotes and schedules tagged in
  detail.

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SEC Proposed Rules Released May 30th,
2008EDGAR Submissions Affected

• Periodic Transition Reports
• Interactive data would be required to be provided
  as an exhibit to Annual and Quarterly reports and
  transition reports
• XBRL files would supplement, but not replace or
  change, disclosure using the traditional
  electronic filing formats in ASCII or HTML.
• Registration Statements
• All registration statements filed under the
  Securities Act, including IPOs, will be required
  to include interactive data when financial
  statements are included directly in the
  registration statement
• Interactive data would not be required as an
  exhibit to a Securities Act registration
  statement that does not contain financial
  statements (such as a Form S-3 filed by an issuer
  that is eligible to and does incorporate by
  reference all required financial statements from
  its periodic reports).
• Business Combinations
• Under the proposed rules, interactive data would
  be required for the acquiring company, the filer,
  but not for the company being acquired, in the
  context of a business combination.

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SEC Proposed Rules Released May 30th,
2008Liability Framework
The Proposed Liability Framework
Theres no additional requirement for an auditor
attestation or senior officer certification of
XBRL data.
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SEC Proposed Rules Released Summary of Comments

• Implementation timeline
• Delay implementation 6-12 months to give
  technology and tools more time to mature
• Extend grace period for all filings for the first
  year (60 days for initial, 30 for subsequent)
• Detailed footnotes
• Requirement to separately tag each number and
  narrative disclosure within each footnote
  excessive
• Lower level of specificity to avoid custom tags
• Create permanent grace period once detailed
  footnotes required
• Delay concurrent filings
• Continue to file as 8-K
• Provide a five day grace period between HTML and
  XBRL
• Form Types
• Start with 10-Qs, not 10-Ks
• Do not include Registration Statements too
  burdensome

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XBRL Adoption Schedule for the US Timeline For
Mandatory XBRL Filing
SEC Proposed Rules
End of May, 2008
Sept Nov 2008
SEC Final Rules
Expected Dates
SEC mandate to file XBRL for Largest Accelerated
Filers (Public float gt 5B)
2008 Results
(for fiscal periods that end on or after
12/15/2008)
SEC mandate to file XBRL for remaining companies
that report in US GAAP
2009 / 2010 Results
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Alternatives for Tagging Your Data in XBRL
Enterprise Solution Integrate the XBRL mapping
into your financial reporting system

• Identify XBRL software compatible with your
  enterprise GL system
• Hire firm for enterprise implementation
• Train staff on XBRL mapping
• Map data at the GL level
• Export data for creation of XBRL submission
  documents

Self Tagging Software Solution Export your
financial statements, then use software to assign
tags to each line item

• Purchase XBRL tagging software
• Output your financial statements
• Train staff on XBRL mapping
• Select taxonomy, then map each line item to the
  correct XBRL element
• Prepare documents for SEC submission

Full Service Solution Provide your financials to
service provider for tagging, then review and
validate

• Select full service provider
• Provide financial statements
• Review and verify XBRL tags
• Sign off for submission of documents to SEC

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Estimated Costs from SEC Proposed Rule
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Additional Resources
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Corporate Use of Websites
Making the Most of the SECs Latest Website
Guidance
David M. Lynn September 24, 2008
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Background

• Use of Electronic Media Releases
• Adoption of Regulation FD
• SEC Embraces Web Posting for Some Corporate
  Disclosure
• Sun Microsystems and Jonathans Blog
• Advisory Committee on Improvements to Financial
  Reporting

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Good News or Bad News?

• The SEC recognizes the importance of technology
  for disseminating information in a
  disclosure-based system of regulation.
• For the first time, the SEC indicates that
  companies can post information and have that
  information be considered disseminated without
  having to place the same information on a
  newswire or file (or furnish) it on a Form 8-K.
• Principles-based guidance that companies can
  apply to their own circumstances.

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The Framework

• In the interpretive release, the SEC sets forth
  three considerations to help determine whether
  information posted on a corporate website is
  considered public
• Recognized channel of distributionWhether a
  companys website is a recognized channel of
  distribution.
• Broad disseminationWhether information is posted
  in a manner calculated to reach investors.
• Waiting periodWhether information is posted for
  a reasonable period of time so that it has been
  absorbed by investors.
• The SEC also describes how website postings can
  satisfy the public disclosure requirement of FD
  when selective disclosure occurs.

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An Opportunity

• Companies now have an opportunity to revisit the
  Investor Relations portion of their website
• How well does it work for investors?
• Can investors find the information they are
  looking for?
• Will investors think of the companys website as
  a one stop shop for all of the important
  information they need about the company?
• What is the company doing to market its website
  to investors as a place where they can find
  information?
• How usable is the website for investors?
• How can Web 2.0 technologies be used to get the
  word out to the companys investors?

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Usability

• How Do Investors Use the Web?
• Scanning vs. Reading
• Use of Search Engines
• Placement of Links and Information
• Use of Effective Keywords
• Use of Visual Cues
• Appropriate Formats for Documents
• Pushing the Information Out
• Avoid Overload!

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An Example GM
Note It is easy to find investor information
from the home page, either under the Corporate
Information or Investors links.
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An Example GM
Note Scrolling across Corporate Information
provides easy to follow links with effective key
words.
30
An Example GM
Note The Corporate Information page provides
links to Investor Information as well as
information for other stakeholders along the left
side.
31
An Example GM
Note The Investor Information page includes 12
key links listed on the left side in alphabetical
order.
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Additional Guidance

• Antifraud Considerations
• Previously Posted Materials
• Liability for Hyperlinks
• Using Summaries
• Disclosure Controls and Procedures
• Formatting and Readability

33

Corporate Use of Websites
Making the Most of the SECs Latest Website
Guidance
David M. Lynn September 24, 2008
34
Background

• Use of Electronic Media Releases
• Adoption of Regulation FD
• SEC Embraces Web Posting for Some Corporate
  Disclosure
• Sun Microsystems and Jonathans Blog
• Advisory Committee on Improvements to Financial
  Reporting

35
Good News or Bad News?

• The SEC recognizes the importance of technology
  for disseminating information in a
  disclosure-based system of regulation.
• For the first time, the SEC indicates that
  companies can post information and have that
  information be considered disseminated without
  having to place the same information on a
  newswire or file (or furnish) it on a Form 8-K.
• Principles-based guidance that companies can
  apply to their own circumstances.

36
The Framework

• In the interpretive release, the SEC sets forth
  three considerations to help determine whether
  information posted on a corporate website is
  considered public
• Recognized channel of distributionWhether a
  companys website is a recognized channel of
  distribution.
• Broad disseminationWhether information is posted
  in a manner calculated to reach investors.
• Waiting periodWhether information is posted for
  a reasonable period of time so that it has been
  absorbed by investors.
• The SEC also describes how website postings can
  satisfy the public disclosure requirement of FD
  when selective disclosure occurs.

37
An Opportunity

• Companies now have an opportunity to revisit the
  Investor Relations portion of their website
• How well does it work for investors?
• Can investors find the information they are
  looking for?
• Will investors think of the companys website as
  a one stop shop for all of the important
  information they need about the company?
• What is the company doing to market its website
  to investors as a place where they can find
  information?
• How usable is the website for investors?
• How can Web 2.0 technologies be used to get the
  word out to the companys investors?

38
Usability

• How Do Investors Use the Web?
• Scanning vs. Reading
• Use of Search Engines
• Placement of Links and Information
• Use of Effective Keywords
• Use of Visual Cues
• Appropriate Formats for Documents
• Pushing the Information Out
• Avoid Overload!

39
An Example GM
Note It is easy to find investor information
from the home page, either under the Corporate
Information or Investors links.
40
An Example GM
Note Scrolling across Corporate Information
provides easy to follow links with effective key
words.
41
An Example GM
Note The Corporate Information page provides
links to Investor Information as well as
information for other stakeholders along the left
side.
42
An Example GM
Note The Investor Information page includes 12
key links listed on the left side in alphabetical
order.
43
Additional Guidance

• Antifraud Considerations
• Previously Posted Materials
• Liability for Hyperlinks
• Using Summaries
• Disclosure Controls and Procedures
• Formatting and Readability