HOLT®
Innovation & Continuous Improvement
Thomas G. Hillman
HOLT Director of Research
@
DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY
March 9, 2020
mailto:@
DISCLOSURE AND THE
STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be
aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
HOLT’s focus on innovation and continuous
improvement
HOLT’s framework is adaptive for changing accounting rules and market conditions.
Innovative culture
− 30+ years of continuous improvement to the framework.
− Listening to client feedback to extend research and improve the product.
− HOLT is continuously improving or adding tools, expanding data coverage, building
out factors, and improving data quality.
Rigorous oversight and approval process – CFROI® Framework Committee consists of
a global team of senior HOLT members that approve semi-annual model enhancements.
This presentation provides an overview of HOLT’s coverage, an overview of innovation
and continuous improvement to the HOLT framework over the last eight years, and a
summary of the areas of new research.
EMEAAmericas
Accounting Quality:
~2,300 firms
Corporate
Performance:
~3,600 firms
Carbon Analytics:
~3,200 firms
Corporate
Performance:
~5,800 firms
Accounting Quality:
~3,100 firms
Mgmt. Incentives:
~2,100 US firms
Pay Analytics:
~2,100 US Firms
Carbon Analytics:
~4,000 firms
Corporate
Performance:
~3,000 firms
Accounting Quality:
~2,300 firms
Mgmt. Incentives:
~400 firms
Pay Analytics:
~2,000 Firms
Carbon Analytics:
~3,000 firms
Corporate
Performance:
~5,000 firms
Accounting Quality:
~3,600 firms
Mgmt. Incentives:
~50 firms (Australia)
Pay Analytics:
~600 Firms (Australia)
Carbon Analytics:
~5,000 firms
Non-Japan Asia Japan
HOLT coverage
Global database covering nearly 20,000 companies in 65+ countries. The HOLT database
contains ~98% of global market capitalization.
Source: HOLT Lens™ as of January 2020.
Innovation highlights (2012 - 2020)
Valuation & Corporate Performance- Scorecard & Factors
Lease accounting change – required capitalization (2020) page 5 Accounting quality score (2019) page 24
Equity-method investments estimated fair market value (2018) page 7 Summary enhancement & additions to HOLT Scorecard (2014-20) page 26
Incorporating special dividends in growth rate (2018) Factor library - scoring methodology enhancements page 29
Stock option treatment - deduction from cash flow (2017) page 8 Additional scoring options page 33
Economic profit (2015) page 9 Quality factor enhanced page 35
M&A acquisition accounting distortions adjustment enhanced (2014) Risk factor added page 39
Growth improved for acquisitive firms (2014) Market implied discount rate & history relative valuations factors page 40
HEAT – monthly expectation analysis (2012) page 11 Growth factor added
Capitalized leases - nominal rate and smooth average (2013) Scorecard, styles and HOLTfolio integrated into Lens page 41
Capital Deployment Environmental, Social and Governance (ESG)
Segment CFROI model (2020 and 2017) page 13 Management incentive score (2020 and 2015) page 47
Excess cash scenario analysis (2016) page 14 Carbon financial modelling tool (2019) page 50
Cash deployed company report (2015) page 15 Carbon adjusted CFROI (2018) page 52
Added M&A database - assess acquisition skill (2012) page 16 ESG screening variables (2016)
Relative pay for performance analytics (2016) page 49
Forecasting Quality Control & Process
eCap company report (2018) Quality control and production process page 54
eCap - Super, Almost and At Risk screening variables (2017) page 19 Quality control rules page 58
Conditional probability (2016) page 20 New company additions page 59
One-click load of detail IBES consensus for Flex Valuation (2015) page 21 Timeliness of data page 60
Flex Valuation tools enhanced - explicit financials forecasted (2015) Quality control enhancements (2012-2020) page 61
Credit Suisse equity analyst forecasts integrated into Lens (2015) page 22
Areas of new research page 64
Valuation & Corporate Performance
New Lease rule – impact on investor metrics
HOLT's adjusted operating and valuation metrics are generally unaffected by this accounting rule change. However,
investors utilizing traditional data sources could encounter distortions that need to be adjusted.
What's The impact? Where's The Impact
Reported…It Depends
Metrics
Impacted
Total Assets Gross Plant, Net Plant, Other
Asset, Right of Use Asset
Return on Capital,
Asset Utilization
Total Liabilities Debt, Other liabilities, lease
liability
Leverage, Enterprise
Value
Net Income Only for companies reporting EPS
HOLT's Adjusted
Cash Flow & Balance
Sheet Metrics
IFRS1 US
GAAP2
under IFRS
Operating Earnings
US
GAAP2
Only for companies reporting
under IFRS
EBITD
AIFRS
1
Source: CS HOLT Accounting & Tax Analysis. *HOLT is still reviewing the potential impacts and disclosure related to this accounting rule change and may need to adjust its methodology, however it is important to note
that overall HOLT’s adjusted metrics will remain more comparable than traditional financial statements given its longstanding adjustment to capitalize leases. 1: Assumes beginning of lease term. 2. General impact will be no
change, however there can be some impacts from other aspects of the new standard such as changes in leases classification type that can have an impact on net income for some companies.
No Impact*
HOLT assumes a company will use the leased assets over its full economic life − a better
representation of the required investment and obligations to generate cash flows.
New lease rule – different methods
HOLT measures the return on all capital used in the business and has long capitalized operating leases. The new
lease accounting rules require leases to be capitalized over the remaining contract life, not the economic life of the
asset.
Capitalization of Operating Lease Methodology
HOLT vs. US GAAP and IFRS
Source: HOLT Accounting & Tax. Note HOLT may elect to exclude certain rent payments (. variable rent) depending on disclosure post adoption
Remaining contract life
Short term, low value (IFRS), and variable rent
expense are excluded
Capitalize (PV) Minimum Lease Payments
Economic life of the asset
Total rent expense
Capitalize (PV) the Total Rent Expense
Method for Estimating the Fair
Market Value of Equity-Method
Investments
The estimate of fair market value can be
derived using the DCF equation below
given a firm’s equity method ROE, cost
of equity, fade and growth assumptions
based upon HOLT’s long-term fade
assumptions.
( − + )
=
( − + )
ROE = Return on
equity Re = Cost of
equity
g = Equity growth rate
f = Fade rate
For additional details, please refer to
“Don't Suffer From a Terminal Flaw
- Add Fade to Your DCF”
Equity method investments – fair market value
The accounting for equity method investments provides investors with little information. The investments company
report provides three scenarios based upon a DCF approach that incorporates fade to help investors understand
large differences between investments at book versus their potential fair market value.
Stock option treatment – deduction from cash flow
Stock compensation expense is excluded from HOLT’s gross cash flow to measure the true economic impact on
operating returns and valuation. The impact of stock options can be assessed by viewing the relative wealth chart
with CFROI adjusted to exclude stock based compensation or viewing the stock option company report.
Economic Profit
HOLT’s Economic Profit helps investors quantify the value creation or destruction of a firm’s business, and also
better gauge the trade-off between asset growth and return on capital levels.
1. AMZN’s CFROI levels are
declining but remain above their
cost of capital.
2. AMZN’s growth has been
persistent at double-digit levels.
3. AMZN’s trade-off of growth for
CFROI has been a wealth-
creating strategy.
4. EP change components provide
insight into wealth creation.
AMZN wealth creation has been
via growth.
Market expectations today
The green dot represents the market implied CFROI necessary to equate today's market price. Investors can use
the data to help determine if the market is optimistic or pessimistic about a company’s prospects, based on future
CFROI levels implied by the stock price. But how does this compare to history…
Historical market expectation analysis
Monthly data provide the relationship between forecast CFROI and market implied CFROI (green dot) for the last
15 years. This relationship can help investors determine whether the valuation for a particular stock is high or low
relative to the company’s own history.
Capital Deployment
Estimated segment CFROI
HOLT’s estimated segment CFROI decomposes a company’s consolidated CFROI into its reported segments.
This analysis allows investors to identify critique management effectiveness, identify underperforming segments,
improve forecast fade rates and prepare for management meetings.
Excess cash scenario analysis and company report
Either excess cash scenario or the excess cash company report can be used by investors to understand the
firm's CFROI level with excess cash removed. Large excess cash can alter trends in CFROI levels, and as a result
it is useful to look at the CFROI after removing excess cash from the Gross Investment base.
Cash deployed company report
The cash deployed company report provides investors insights into management's allocation of capital by providing
trends in total cash, debt and the deployment on R&D, capex, net share repurchase, dividends, special dividends,
M&A, and interest.
Mergers & acquisitions database
The HOLT mergers and acquisitions database provides investors a quick summary of historical
transactions done by a company in any year. Using the HOLT M&A database through the HOLT
Framework allows users to judge the acquisition skill of a company, which can be a valuable reference in
future transactions.
Johnson & Johnson
M&A database
Acquirer vs. Target
Clicking on a public target’s
name displays a comparison of the
economic return and drivers
between acquirer and the target.
For example, JNJ in
2012 completed its $
billion acquisition of
Synthes.
Upon merger, JNJ’s CFROI
levels increased by over 100 bps
after the merger.
Forecasting
Additional eCap metrics in screening
Super-eCAPs: the crème-de-la-crème of
Quality: Firms with ten or more years of
persistent and above-average profitability.
More than 90% of Super eCAPs continue to
earn CFROI above 8% over the next 4 or 5
years.
Screening criteria in Lens
Almost eCAP: companies that narrowly miss
passing one or more eCAP rules. This is an
interesting set of firms to consider as possible
additions to a Quality portfolio or to enhance
the stability of an existing strategy.
eCAP at risk: eCAP companies that show
early-warning signs of losing their eCAP
status due to deteriorating CFROI.
Conditional probability
HOLT’s Conditional Probability helps users gauge the likelihood of a company achieving operating profit
and growth rate forecast scenarios.
Conditional Probability Scenarios
Users can evaluate Conditional
Probability calculations for both
market implied and individual
CFROI forecast scenarios.
Click the Flex Valuation option for
the selected company, and display the
CFROI and Asset Growth Inputs.
The probability of achieving the
market implied CFROI forecast
is displayed.
Drag the black fade line or input your
own forecast values and the
conditional probability will evaluate
your scenario.
Flex valuation – Load IBES consensus
Flex valuation enables investors to use their own assumptions to drive their own discreet financial statements
for analysis in the HOLT framework. Or investors can start by one-click loading detailed IBES
Consensus Estimates or CS Analyst Forecasts to provide a more refined starting point in the modeling
process and a better understanding of implied expectations.
IBES Estimates
IBES Consensus Estimates
are available for approximately
6,000 firms across the
following drivers:
― Sales Growth %
― EBITDA Margin %
― CAPEX,
― R&D Sales %
― Effective Tax Rate
― Dividends Per Share
CS Analyst forecasts
HOLT Lens™ has approximately 1,400 companies globally loaded with the CS Research Analyst
Forecasts. This feature leverages the key analyst assumptions of the analysts to derive a forecast and
valuation using the HOLT framework.
Scorecard & Factors
HOLT’s accounting quality score (HAQS) 2019 refresh
A Brief Review
− HOLT's Accounting Quality Score (HAQS)
leverages a proprietary database and a patented
scoring methodology to identify "accounting
anomalies“ across 15 categories in corporate
financial statements.
HAQS in Lens
− HAQS is 100% quantitative, does not detect
fraud, and not a short signal on its own…it is
one part of the investor process to help
systematically identify accounting risks that
warrant further qualitative investigation.
− HAQS has a good track record of identifying
companies at-risk to accounting driven issues
(recent examples: GE, Valeant, Chicago
Bridge and Iron, Carillion) as well as
underperforming share prices, particularly during
risk-off environments.
HOLT’s accounting quality score (HAQS)
2019 HAQS Refresh
Highlights of Refresh
Complete Audit: Over the past year, we reviewed hundreds of formulas and made numerous
systematic fixes such as adding caps/floors, utilizing pro-forma sales and multiple behind-
the-scenes touchups.
Documentation: Every formula as well as in-depth testing results (distribution of scores
etc.) is now documented. We will also publish a comprehensive white paper in H1 2018.
Future enhancements: Future improvements to HAQS will be easier and more frequent.
New variables: We added Intangibles and Non-GAAP EPS, two growing areas of interest.
Enhancements and additions to the HOLT scorecard
1. Scoring methodology enhancements
2. Additional scoring options
3. Factor enhancements and additions
- Operational Quality (enhancement)
- Risk factor
- Growth Factor
- Market-implied discount rate (MIDR)
- Relative to history factors (MIDR and Valuation)
Reference material:
Factor Library
Primer
Factor Percentile and Peer Rank Construction and Usage
Quality Factor Primer
Growth Factor Primer
Market Implied Discount Rate Factor
Primer Relative to History Factors
HOLT scorecard
Enhanced
What makes a good
company? It has a
competitive advantage
Scorecard Factors Descriptive Factors
What makes a good
story? It has positive
sentiment
What makes a good
stock? It has attractive
valuation
OPERATIONAL QUALITY
Identifies companies with appealing
corporate performance
characteristics
New
RISK
Identifies
stocks with
desirable Beta
and volatility
characteristics
VALUATION
Identifies stocks that are
attractively valued according to the
HOLT DCF model
MOMENTUM
Identifies stocks gaining from
positive market sentiment
GROWTH
Identifies
stocks based
on their ability
to generate
high cash flow
growth
OVERALL SCORE
HOLT STYLE
Factor library and HOLT scorecard design
1. Scoring methodology enhancements
HOLT Scorecard methodology will be enhanced through a more rigorous
construction methodology based on standardized factor exposures,
replacing the rank-based implementation currently in place.
Benefits: Using factor exposures in the place of ranks allows the
Scorecard factors to embed cardinal information from the distribution of
each metric that is incremental to the ordinal data used in the existing
Scorecard.
CFROI revision example
The current Scorecard is susceptible to two related types
of distributional distortions: artificially expanding
marginal differences and muting large differences. When
assessed for any given company, the difference between
the two implementations tends to be small; however, over a
large distribution of stocks, the cumulative impact of a
rank-based construction can lead to composite scores that
are not optimally sorted. The use of standardized scores
creates a more robust model that mitigates this issue.
Example:
Mobileiron (MOBL, CFROI Revisions: ) and
Remark Media (MARK, CFROI Revisions: ).
The difference between the CFROI revisions of these
firms is essentially zero.
However, a rank-based scoring methodology results in
an amplification of the difference between the two
values (MARK ranks % vs. % for
MOBL).
Old Rank-Based Score
New Exposure-Based Scores
Factor percentile and peer ranks
The Factor Library, standardizes data using both a
cardinal and an ordinal process allowing users to
choose between Factor Percentile and Peer Rank
Factor Percentile is a standardized value of a
factor that preserves both the order and the
distribution of the data and therefore captures the
magnitude of the difference between firms. It is
primarily used when aggregating data or as an input
to further calculations, such as composite factors
like Quality or for using in portfolio construction.
Peer Rank is the position of the company in a peer
group ordered by a Factor Percentile. A Peer Rank
is convenient for screening and categorizing stocks,
. HOLT Investment Styles, because a known
portion of a universe falls above or below a desired
level.
Factor Percentiles should be used if the question is
how much better is this stock?
Peer Ranks should be used in cases where the
underlying question is which stock is better?
Factor percentile and peer ranks (example)
The values of Factor Percentile and Peer
Ranks are always directionally
similar; however, the magnitudes be quite
different, which highlights how the values
may be used.
In a large universe, a company that is close
to the median company has similar factor
percentile and peer rank values.
. McDonald's.
A company that is further away from the
median company has materially different
Factor Percentiles and Peer Ranks.
Target and Biogen Peer Ranks are
close, but the difference in their Factor
Percentiles highlight the magnitude of the
difference in the underlying company data.
2. Additional scoring options – 8 variations
Benefits: Allowing expanded choice of the universe removes unnecessary
sorting of companies for some users while allowing investors with different
base universes to remove irrelevant companies from their analysis. Similarly,
the enhancement allows users to assess factors relative to different peer
groups.
New
New
3. Factor enhancements and additions
Quality factor enhancements
Current Quality Definition:
CFROI® Last Fiscal Year (LFY)
(50%) Managing for Value (30%)
Change in Value Creation (20%)
New Quality Definition:
CFROI LFY (50%)
CFROI 5-Year Median
(25%) CFROI 5-Year
Range (25%)
Benefits: The change provides for a Quality factor that is:
A more explicit assessment of operating quality
Provides greater persistence relative to the prior definition
Yields better factor returns
Explanation: CFROI 5-year median helps contextualize the firm’s average profitability and
avoids overemphasizing
cyclical peak and trough
CFROI levels. CFROI 5-
year range is a transparent
way of quantifying the
variability of a firm’s
CFROI.
Source: HOLT
Conceptual framework for quality in a stock selection
model
The economic rationale for including quality in a stock selection
model is anchored in the quantifiable exposure of a firm to the risk
of “fade”—the possibility that competitive forces will cause current
relative quality to differ in the future from current expectations.
HOLT research indicates that firms that earn high CFROI levels
tend to enjoy competitive advantages. But over time, competitive
forces result in mean-reversion.
Investors in profitable (high CFROI) companies risk disruption and
underperformance as rival firms seek to gain market share. Similarly,
investors who avoid low-quality firms risk not participating in
successful restructuring stories.
Source: Credit Suisse HOLT
Global Industrial / Service Firms, 1950-2015
Investors are aware of the risk of fade and consequently price
stocks to reflect some level of compensation for bearing that risk.
A high-quality firm can generate outperformance for its
shareholders if the firm successfully fends off competition
and maintains or improves its competitive position (., it
‘beats the fade’).
Buyers of a low-quality firm can avoid underperformance if
the firm bests its low operational performance expectations.
The HOLT Quality factor is designed to quantitatively aid investors in
selecting stocks most likely to remain profitable (and unprofitable) by
extracting key information embedded in a firm’s level of profitability and
its variability.
HOLT quality factor for , illustrated
The metrics used to create the enhanced
Operating Quality composite can be easily
observed on a firm’s Relative Wealth Chart.
Source: HOLT
12
%
6
%5
%
5
%
HOLT Quality factor for Caterpillar, illustrated
Caterpillar CFROI Profile, 1996-
2016
Caterpillar historical Quality component scores
18%
15%
12%
9%
6%
3%
0%
16%
15%
100%
75%
50%
25%
0%
CFROI CFROI 5Y Median
CFROI 5Y Range Quality composite score
• CAT’s average CFROI-only score of 65% is not
much different from its average Quality score of 60%.
• However, in each individual year, the median and range
components provide a smoothing effect on the
composite score.
C
F
R
O
I
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
pe
rc
en
til
e,
u
nc
on
st
ra
in
ed
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20Y
Max
20Y
Min
Max -
Min
Avg. YoY
change
20Y
Average
CFROI 90% 38% 52% 12% 65%
CFROI 5Y
Median
85% 52% 32% 4% 66%
CFROI 5Y
Range
79% 21% 59% 13% 43%
Quality composite 72% 42% 30% 7% 60%
• This interaction results in a quality score that is less
volatile (lower highs and higher lows) and better
captures the relative quality of the firm over a cycle.
Source: Credit Suisse HOLT
Data Date: December 1996-December 2016 38
Risk factor addition
Risk: HOLT is adding a Risk descriptive factor to highlight the price stability of a company using a combination of
long and short-term stock volatility and the long-term beta of the stock to its home market.
Benefits: Combining the Risk factor with HOLT’s fundamental view of a company can provide an investor with a
more holistic view of how the market prices a stock. Both the Growth factor and the Risk factor are intended to be
used in concert with the HOLT Scorecard, but do not contribute to the Overall score.
We expect users will incorporate the Risk factor into a broader risk analysis alongside other dimensions of risk
quantified in the HOLT framework, such as Accounting Risk, Governance, and Probability of Default.
New Risk Definition:
Long Term Beta to Local Market, 5-year monthly (33%)
Long-term volatility, 5-Year monthly (33%)
Short-term volatility, 90 day (34%)
Market implied discount rate factor percentile and peer
rank factor addition
Market Implied Discount Rate (MIDR)
Factor Percentile and Peer Rank
The Market Implied Discount Rate
(MIDR) is the real yield equating the
CFROI framework's systematically
forecasted net cash receipt stream to
the current enterprise value of a firm.
MIDR benefits from the HOLT DCF
modeling approach which explicitly
incorporates long-term mean reversion in
profitability (CFROI) and asset growth
using empirically derived fade rates.
Link to: HOLT Factor Library: Market Implied Discount Rate
Factors
For most firms, MIDR can be interpreted as the forward-
looking implied cash flow yield on a firm's enterprise value,
with higher values representing investors' expectations of
higher risk and required return. For spread-earning financial
firms such as Banks the interpretation for risk and returns
remains the same, however, the value is better understood as
a yield on tangible equity.
Relative to history factor addition
Link to: HOLT Factor Library: Relative to History Factors
Valuation Relative to History and MIDR
Factor Relative to History.
Relative to History Factors measure the
current Factor Percentile relative to the
preceding five years of monthly
observations.
Each Factor Relative to History is
presented on a 0-100 scale, roughly
representing the percentage of time a
company has had a Factor Percentile
less than its current value.
MIDR and Valuation Factor Relative
to History allow investors to gauge if a
stock’s relative valuation has diverged
from recent history.
When combined with the base factor, the
MIDR or Valuation Factor Relative to
History provides a way to refine screens
to identify firms with attractive or
unattractive valuations relative to peers
and provide historical context to that
assessment.
Improved scorecard transparency & auditability: Compare
exposures & ranks across different scoring dimensions
Quality score for
KMB ranks
74% relative to
the overall North
America Large
Cap Universe,
but only 44%
when compared
to other Staples
stocks within that
universe
Peer compare across scorecard dimensions
Portfolio section now includes exposure analysis of
descriptive factors (Growth & Risk)
Portfolio section HOLT Style & Factor migration offers
improved ways to monitor positions
Environmental, Social and
Governance (ESG)
Management incentives
HOLT’s Management Incentives provides insights into the short-term and long-term incentives of the CEO to help
investors understand the CEO’s focus, changes in a firm’s strategy or mis-alignment between incentives and
economic returns.
Click For Incentive Details
Management incentive scorecard
HOLT’s Management Incentives module provides insights into the CEO incentive metrics by systematically
scoring how well the pay plan aligns with long-term shareholder wealth creation.
Management Incentive Scorecard measures 18 parameters organized
into four areas:
Transparency & Focus
Total Shareholder Return
Short-Termism
Incentive Plan Design
The Management Incentive Score ranges between 0-10 (best).
….view a company’s incentives
Click
expand
to….
through the Management Incentive
Scorecard parameters.
Pay for performance
HOLT’s pay for performance module is an interactive tool that allows investors to quantitatively review pay
alignment relative to peers across several metrics (., economic profit) and determine which firms need
qualitative review.
Pfizer
PFE
PFE
Assessing carbon risk using the HOLT excel model
HOLT’s Carbon Tool allows HOLT Linker users to define carbon parameters in an excel based modelling tool.
The impact of carbon modelling is integrated in the HOLT’s valuation framework to understand the impact of carbon
schemes on the financial statements and the impact on corporate performance and valuation.
Custom inputs for Carbon Data (fixed or flex for each year forecast)
Emissions (Scope 1+2 in million t
CO2e) Free Allowances in (million t
CO2e)
% Decrease in allowances every year
Carbon price per million tonnes in Reported currency
Carbon price % increase every year
Cost pass through to Sales in %
Abatement efforts through R&D % of Sales
Abatement efforts through Capex % of Sales
Abatement cost curve linear increase component
Abatement cost curve non linear increase component
Input constants
Volumes
Emissions 81
Free Allowances LFY 10
Decrease in Allowances 10%
Price
Carbon price (In Reported currency ) 50
Price increase 10%
Costs
Cost Pass-Through 50%
Increase to R&D % Sales 1%
Increase to CAPEX % Sales 5%
Abatement costs
Linear 15
Non Linear 15
Pass through Added to Sales
Sales growth high because of the
pass through effect
Model impact on financial statements
Carbon Analytics – Carbon Adjusted CFROI
Carbon report and five screening variables help investors understand carbon emissions intensity and potential
company specific carbon costs. Our novel approach is unique as it leverages the HOLT comprehensive reflection of
a company’s full invested capital to assess a firm’s carbon intensity. ESG focused investors will find this data useful
when managing potential portfolio risks or for implementing low carbon mandates.
BP PLC
The data are available for
over 15,000 global firms.
Carbon screening variables
Emissions Source: Reported emissions are sourced from
company disclosures. Estimated emissions are derived from
ISS-Ethix's models. Screening criteria in Lens
Emissions Trust Metric: This metric provides a numeric
value that measures the assessed reliability of a company's
reported emissions data (0 to 100).
Emissions to Sales: An intensity metric showing the volume
of emissions generated per mln USD of sales. The
intensity metric can be tracked historically and compared
across industry peers.
Emissions to Gross Investment: A HOLT intensity metric
showing the volume of carbon emissions generated per mln
USD of inflation adjusted gross investment (invested capital).
The intensity metric can be tracked historically and compared
across industry peers.
Carbon-Adjusted CFROI: A hypothetical CFROI that
factors in an incremental carbon cost (tax or purchased
permits) applied at a rate of $50 per tonne of CO2e
emissions. This can be used to quantify the magnitude and
risk if carbon emissions were priced.
Quality Control & Process
Confidence in your investment tools requires trust in the
underlying data
We have been focusing on data quality for over 30 years, so you can focus on
strategic company analysis and valuation issues instead of worrying about the
underlying data.
We are constantly improving our data quality and process – staying on top of all
the accounting changes
We provide comprehensive coverage with over 18,000 equities
In order to ensure we have the highest data quality, we begin by sourcing from
the best vendors.....
These best of breed of data vendors are experts in the
data they collect…
…but no vendor is perfect, so we have an additional layer of quality
control driven by our people and processes…
Our people...
We have a team of 40+ sector specialists and data specialists around the
globe.
The team consists of highly skilled individuals holding CFA charters,
CPA certifications or advanced degrees, ., MBA’s.
They are responsible for both the data and the insights – the dual mandate
puts their integrity on the line when servicing clients – the data have to be
right!
They can read the appropriate language to handle non-English reports.
We have 20 IT professionals that build process and run production.
…Our people leverage our process of business
intelligence and technology, allowing them to focus their
efforts on data quality and model adjustments
Our production team and specialists operate 24/7 to
provide daily updates
Vendor Data Ingest
Standardization to
HOLT variables
Assessment of data
Economic adjustments
Valuation modeling
Prices & estimates update
Discount rate calibration
Managerial reviews
HOLT
Quality
Control (QC)
Database
HOLT Lens™
350+
Rule-Based
QC
Checks
Exception Checks
on Model Output
Operations Team
Reviews
Source: HOLT
These economic adjustments are often for tough accounting and
valuation issues, for hard to capture data points...
HOLT Stage
Database
Data from
world’s leading
providers
HOLT has over 350 quality control rules
Missing Data Compared to Prior Year (31 rules)
Company had Rental Expense last year but it is missing from the new annual data
Company had Capital Expenditures last year but it is missing from the new annual data
Variables Checked For Changing Historical Data (27 rules)
Turnover (Net Sales) has changed and is over the tolerance
Depreciation and Amortization has changed and is over the tolerance
Data Inconsistency / Potential Issues Based on Logic (23 rules)
Company has significant drop in goodwill but missing goodwill impairment
Company has Equity Investments but is missing Equity Earnings
Significant Change Exceeding Set Tolerance Limits (19 rules)
Significant increase in Dividend Yield (+5%) and Payout Rate (+). May have Special Dividends.
Shares Outstanding - FY1 differs from Shares Outstanding - Current by more than 10%.
Company Parameters and Inputs (38 rules)
The Company reported currency changed
EPS Dropped as of last production. Company will switch to model driven EPS in 4 weeks.
Quarterly Data Rules (46 rules)
Company has M&A adjustments in quarterly data
Total Liabilities changed by 50%
Financials Annual and Quarterly (124 rules)
Company has Core Tier 1 Capital last year but it is missing from the new annual data.
Net Loan Losses changed by more than 10%.
Model Output (23 rules)
CFROI Used in Valuation Changed By More Than 100% with new annual data or new quarterly data.
Project Life (Gross Plant/Depreciation)) changed by more than 5 years with new annual data.
Other (24 rules)
Source: HOLT
Company addition processes keep coverage up-to-date
HOLT has added over 1,630 companies over past two years, including 760 new public offerings.
China A coverage has increased from 470 to 1,970 since the announcement of the SH/HK and
SZ/HK stock connect program in 2014.
140
120
100
80
60
40
20
0
Jan'18 Apr'18 Jul'18 Oct'18 Jan'19 Apr'19 Jul'19 Oct'19
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Other Adds New Listings Total Additions since Jan'18 (RHS)
A
dditions Since Jan'18
M
on
th
ly
C
om
pa
ny
A
dd
iti
on
s
Source: HOLT
4,787 4,823 5,244 5,113
4,209 4,480
3,716 3,513
3,842
102 98 102
102 99
93 93 95 95
78
10
4
97 1
03
96
81
95
10
2
HOLT fundamental data update (timeliness) 2011-2018
Timeliness for Large Cap (> US$2B mkt cap)
200
175
150
125
120
100
80
100 60
75
40
50
20
25
0 0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Fiscal Year
N. America Europe AsiaPac ex-Japan Japan Emerging Markets Global Average (RHS)
Days Lag defined as date of HOLT update minus fiscal year-end date.
Coverage of Large Cap Firms (> US$2B mkt cap)
2,500
2,000
1,500
1,000
500
This chart above measures the number of days between a firm’s
fiscal year-end date and the date the fundamental data are updated in
HOLT. For example, a December year-end company updated on
March 16 would be measured as 75 days.
6,000
5,000
4,000
3,000
2,000
1,000
N
o.
o
f
C
om
pa
ni
es
N
o.
o
f
D
ay
s
P
os
t F
Y
E
nd
(M
ed
ia
n)
1,
26
7
72
74
7
11
0
11
2
50
6
31
5
44
88
1
12
6
1,
24
8
70
61
6
48
1
31
8
11
1
10
6
50
85
0
11
8
1,
32
7
74
72
2
53
1
12
5
11
8
31
1
48
95
1
12
3
1,
51
6
73
12
9
11
5
81
7
56
4
36
6
47
94
6
12
9
1,
59
0
72
11
4
10
8
80
8
61
8
46
37
3
12
8
1,
39
8
1,
44
6
11
2
10
1
80
1
57
3
40
7
52
11
3
1,
25
3
74
1,
56
5
85
4
63
3
50
41
0
11
1
1,
36
1
75
1,
63
8
94
5
71
5
49
45
5
11
0
1,
49
1
1,
62
0
86
1
70
0
48
48
8
11
6
1,
44
4
0 0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Fiscal Year
N. America Europe AsiaPac ex-Japan Japan Emerging Markets Global Total (RHS)
2010 - 2012 2013 - 2015
Long history of continuous improvement in quality
control
Exception report
migrated online
Functional
improvements to
VS and Alt+Q
Added ability to post
exception notes from
VS
Easier notes
assignment
Daily exception
sign-off released to
support daily
production
Embedded
education elements
Override restriction
System reminders
NAD/NQD
report migrated
online
Simplify/automate
HOLT fixes
Ingest >80 new vendor
data fields & clean up
quarterly mapping
Data timeliness report
automated
Automate FinSub,
exceptional tax items
VS QC Enhancements
Company report on
HOLT fixes
Shift fixes off
financial statements to
present “as-reported”
data
Add screening capability
for HOLT Fixes
Utilization of IBES
detailed footnotes
Exception report
utilizes JRules
ValueSearch post-
calc rules
synchronized to
exception report rules
Industrial QC
Rules
Enhancements
Automate move-to-
production
Financial QC
Rule
Enhancements
QC messages added to
RHS in VS
Specialis
t
Workflo
w
Business
Intelligence
Data & Model
Clarity
Management
Reporting
Pricing vendor
changed from
HSBC to
IDC
HOLT Lens
released with daily
prices and earnings
Daily fundamental
data production
Discount rate production
shifted to weekdaysProduction
Process
Long history of continuous improvement in quality
control
Individual QC stats
for performance
review
Specialist QC
exceptions log
Company additions
and auto-push stats
Stale Pro-Formas
Tracking
company filings
and vendor
timeliness
HOLT Historical
Mapping infrastructure
enables merging of
new /old fundamental
data & earnings
Daily adhoc update
of backtest
data/charts on Lens
Improved Override
Audit in VS
Enhanced move-to-
production control
Automation of
HOLT economic
adjustments in
quarterly data
Generate HEAT in VS
Ingest segment data for
segment model use
MSCI GICS update
(Real Estate Sector)
Frontier markets
additions
Data points flagged by
QC rules highlighted
900+ Segment
models updated
Develop XBRL
quarterly mapping
Fundamental data
vendors review
Feedback &
refinement of QC
Rules
China-A Ingest CapIQ
Leases data
Migration from Jrules
to Drools for
Exception Reporting
Estimated Segment
CFROI in HOLT
Lens (Segment Data
Quality Score)
Use XBRL for
quarterly data
Enhanced Exception
Reporting with drill
down to valuation
drivers
Daily fundamental data
ingest
EDM release
for Pacific Data
EDM release
for WiseFN
EDM release
for WorldScope
2016 - 2017 2018- 2019 2020
Production
Process
Business
Intelligence
Data & Model
Clarity
Specialis
t
Workflo
w
Management
Reporting
& Compustat
New areas of research
Expected major areas of new research
Market-derived discount rate Intangibles
and intellectual property (IP)
Market derived discount rate research project
Investors are compensated for bearing non-diversifiable risk only
Riskier assets should generate higher average returns than less risky assets
Goal is to improve the HOLT estimate of company risk (enterprise cost of capital) by:
− Improving the cohort (discount rate sample set)
− Expanding the explanatory descriptors uses
− Improving the risk measurement/application techniques
Key risk attributes include the following:
− Size (Smaller is riskier) currently captured
− Leverage (Leverage increases equity risk) currently captured
− Value/Growth (Growth is less risky than value)
− Quality (Quality is less risky than value)
Intangible assets and intellectual property
The global economy is rapidly becoming more IP and technology based
Financial statements are becoming less useful and non-financial metrics are
growing in importance.
HOLT already captures intellectual property through the capitalization of R&D.
Research intangible assets (on and off-balance sheet) and develop methodologies
to create investment insights. Areas of focus would include the following:
Treatment of reported intangible assets
R&D life – ongoing
Patent analytics – active project to build out IP analytics
Organizational capital – ties to R&D Life
Disclosure Appendix
Analyst Certification
I, HOLT Specialist: Thomas Hillman, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies and securities and (2) no part of my compensation was, is or will be directly or indirectly related to the
specific recommendations or views expressed in this report.
Important Global Disclosures
Credit Suisse's research reports are made available to clients through our proprietary research portal on CS PLUS. Credit Sui sse research products may also be made available through third-party vendors or alternate electronic means as a convenience. Certain research
products are only made available through CS PLUS. The services provided by Credit Suisse’s anal ysts to clients may depend on a specific client’s preferences regarding the frequency and manner of receiving communications, the client's risk profile and investment, the
size and scope of the overall client relationship with the Firm, as well as legal and regulatory constraints. To access all of Credit Suisse’s research that you are entitled to receive in the most timely manner, please contact your sales representative or go to
..
Credit Suisse's policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated Suisse's policy is only to
publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research:-
Any information relating to the tax status of financial instruments discussed herein is not intended to provide tax advice or to be used by anyone to provide tax advice. Investors are urged to seek tax advice based on their particular circumstances from an independent
tax Suisse has decided not to enter into business relationships with co mpanies that Credit Suisse has determined to be involved in the development, manufacture, or acquisition of anti - personnel mines and cluster munitions. For Credit Suisse's
position on the issue, please see .
The European Market Abuse Regulation requires that Investment Recommendations are identified and Credit Suisse policy is to ensure any recommended or suggested investment strategy is classified accordingly. For the Purposes of MAR,
HOLT Investment Recommendations will have the following meanings:
Relative Buy : Applying the HOLT framework and valuation model, the stock shows upside potential on a relative basis.
Hold : Applying the HOLT framework and valuation model, the stock looks fairly valued on a relative basis.
Relative Sell : Applying the HOLT framework and valuation model, the stock shows downside potential on a relative basis. For date and
time of production, dissemination and history of recommendation for the subject company(ies) featured in this
Disclosure Appendix
report, disseminated within the past 12 months, please refer to the link:
Important Regional Disclosures
Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from this research report.
The analyst(s) involved in the preparation of this report may participate in events hosted by the subject company, including site visits. Credit Suisse does not accept or permit analysts to accept payment or reimbursement for travel expenses associated with these
Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit Investors should note that income from such
securities and other financial instruments, if any, may fluctuate and that price or value of such securities and instruments may rise or fall and, in some cases, investors may lose their entire principal investment.
This research report is authored by:
Credit Suisse Securities (USA) LLC .........................................................................................................HOLT Specialist: Thomas Hillman
Valuation Methodology and Risks
The HOLT methodology does not assign ratings or a target price to a security. It is an analytical tool that involves use of a set of proprietary quantitative algorithms and warranted value calculations, collectively called the HOLT valuation model, that are consistently
applied to all the companies included in its database. The HOLT valuation model is a discounted cash fl ow model. Third-party data (including consensus earnings estimates) are systematically translated into a number of default variables and incorporated into the
algorithms available in the HOLT valuation model. The source financial statement, pricing, and earnings data provided by outside data vendors are subject to quality control and may also be adjusted to more closely measure the underlying economics of firm performance.
These adjustments provide consistency when analyzing a single company across time, or analyzing multiple companies across industries or national borders.
The default scenario that is produced by the HOLT valuation model establishes a warranted price that represents the expected mean value for a security based upon empirically derived fade algorithms that forecast a firms future return on capital and growth rates
over an extended period of time. As the third-party data are updated, the warranted price updates automatically. A company’s future achieved return on capital or growth rate may differ from HOLT default forecast. Additional information about the HOLT
methodology is available upon request.
Important disclosures regarding companies that are the subject of this report are available by calling +1 (877) 291-2683. The same important disclosures, with the exception of valuation methodology and risk discussions, are also available on Credit Suisse’s disclosure
website at
Disclosure Appendix
This report is produced by subsidiaries and affiliates of Credit Suisse operating under its Global Markets Division. For more information on our structure, please use the following link: https://This report may contain material that is not directed to, or intended for distribution to or use by, any person or entity who is a citizen
or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject Credit Suisse or its affiliates ("CS") to any registration or licensing requirement within such jurisdiction. All material presented in
this report, unless specifically indicated otherwise, is under to CS. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of CS. All trademarks, service marks and logos used in this report are
trademarks or service marks or registered trademarks or service marks of CS or its information, tools and material presented in this report are provided to you for information purposes only and are not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities
or other financial instruments. CS may not have taken any steps to ensure that the securities referred to in this report are suitable for any particular investor. CS will not treat recipients of this report as its customers by virtue of their receiving this report. The investments and services contained or referred to in this report
may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about such investments or investment services. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or
appropriate to your individual circumstances, or otherwise constitutes a personal recommendation to you. Please note in particular that the bases and levels of taxation may and opinions presented in this report have been obtained or derived from sources believed by CS to be reliable, but CS makes no
representation as to their accuracy or completeness. CS accepts no liability for loss arising from the use of the material presented in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to CS. This report is not to be relied upon
in substitution for the exercise of independent judgment. CS may have issued, and may in the future issue, other communications that are inconsistent with, and reach different conclusions from, the information presented in this report. Those communications reflect the different assumptions, views and analytical methods of
the analysts who prepared them and CS is under no obligation to ensure that such other communications are brought to the attention of any recipient of this report. Some investments referred to in this report will be offered solely by a single entity and in the case of some investments solely by CS, or an associate of CS or
CS may be the only market maker in such investments. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Information, opinions and estimates contained in this report reflect a judgment at its
original date of publication by CS and are subject to change without notice. The price, value of and income from any of the securities or financial instruments mentioned in this report can fall as well as rise. The value of securities and financial instruments is subject to exchange rate fluctuation that may have a positive or
adverse effect on the price or income of such securities or financial instruments. Investors in securities such as ADR's, the values of which are influenced by currency volatility, effectively assume this risk. Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to
sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions
and volatility, and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct their own investigation and analysis of the product and consult with their own professional advisers as to the risks involved in making such a purchase. Some
investments discussed in this report may have a high level of volatility. High volatility investments may experience sudden and large falls in their value causing losses when that investment is realised. Those losses may equal your original investment. Indeed, in the case of some investments the potential losses may exceed
the amount of initial investment and, in such circumstances, you may be required to pay more money to support those losses. Income yields from investments may fluctuate and, in consequence, initial capital paid to make the investment may be used as part of that income yield. Some investments may not be readily
realisable and it may be difficult to sell or realise those investments, similarly it may prove difficult for you to obtain reliable information about the value, or risks, to which such an investment is exposed. This report may provide the addresses of, or contain hyperlinks to, websites. Except to the extent to which the report
refers to website material of CS, CS has not reviewed any such site and takes no responsibility for the content contained therein. Such address or hyperlink (including addresses or hyperlinks to CS's own website material) is provided solely for your convenience and information and the content of any such website does not
in any way form part of this document. Accessing such website or following such link through this report or CS's website shall be at your own risk.
This report is issued and distributed in European Union (except Germany and Spain): by Credit Suisse Securities (Europe) Limited, One Cabot Square, London E14 4QJ, England, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation
Authority; Germany: Credit Suisse (Deutschland) Aktiengesellschaft regulated by the Bundesanstalt fuer Finanzdienstleistungsaufsicht ("BaFin"). United States and Canada: Credit Suisse Securities (USA) LLC; Switzerland: Credit Suisse AG; Brazil: Banco de Investimentos Credit Suisse (Brasil) or its affiliates;
Mexico: Banco Credit Suisse (México), ., Institución de Banca Múltiple, Grupo Financiero Credit Suisse (México) and Casa de Bolsa Credit Suisse (México), . de ., Grupo Financiero Credit Suisse (México) ("Credit Suisse Mexico"). This document has been prepared for information purposes only and is
exclusively distributed in Mexico to Institutional Investors. Credit Suisse Mexico is not responsible for any onward distribution of this report to non-institutional investors by any third party. The authors of this report have not received payment or compensation from any entity or company other than from the relevant Credit
Suisse Group company employing them; Japan: by Credit Suisse Securities (Japan) Limited, Financial Instruments Firm, Director-General of Kanto Local Finance Bureau ( Kinsho ) No. 66, a member of Japan Securities Dealers Association, The Financial Futures Association of Japan, Japan Investment Advisers Association,
Type II Financial Instruments Firms Association; Hong Kong: Credit Suisse (Hong Kong) Limited; Australia: Credit Suisse Equities (Australia) Limited; Thailand: Credit Suisse Securities (Thailand) Limited, regulated by the Office of the Securities and Exchange Commission, Thailand, having registered address at 990
Abdulrahim Place, 27th Floor, Unit 2701, Rama IV Road, Silom, Bangrak, Bangkok10500, Thailand, Tel. +66 2614 6000; Malaysia: Credit Suisse Securities (Malaysia) Sdn Bhd; Singapore: Credit Suisse AG, Singapore Branch; India: Credit Suisse Securities (India) Private Limited (CIN )
regulated by the Securities and Exchange Board of India as Research Analyst (registration no. INH 000001030) and as Stock Broker (registration no. INZ000248233), having registered address at 9th Floor, Ceejay House, . Road, Worli, Mumbai - 18, India, T- +91-22 6777 3777; South Korea: Credit Suisse Securities
(Europe) Limited, Seoul Branch; Taiwan: Credit Suisse AG Taipei Securities Branch; Indonesia: PT Credit Suisse Sekuritas Indonesia;Philippines:Credit Suisse Securities (Philippines ) Inc., and elsewhere in the world by the relevant authorised affiliate of the above.
Additional Regional Disclaimers
Australia: Credit Suisse Securities (Europe) Limited ("CSSEL") and Credit Suisse International ("CSI") are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority ("FCA") and the Prudential Regulation Authority under UK laws, which differ from Australian Laws. CSSEL
and CSI do not hold an Australian Financial Services Licence ("AFSL") and are exempt from the requirement to hold an AFSL under the Corporations Act (Cth) 2001 ("Corporations Act") in respect of the financial services provided to Australian wholesale clients (within the meaning of section 761G of the Corporations Act)
(hereinafter referred to as “Financial Services”). This material is not for distribution to retail clients and is directed exclusively at Credit Suisse's professional clients and eligible counterparties as defined by the FCA, and wholesale clients as defined under section 761G of the Corporations Act. Credit Suisse (Hong Kong)
Limited ("CSHK") is licensed and regulated by the Securities and Futures Commission of Hong Kong under the laws of Hong Kong, which differ from Australian laws. CSHKL does not hold an AFSL and is exempt from the requirement to hold an AFSL under the Corporations Act in respect of providing Financial
Services. Investment banking services in the United States are provided by Credit Suisse Securities (USA) LLC, an affiliate of Credit Suisse Group. CSSU is regulated by the United States Securities and Exchange Commission under United States laws, which differ from Australian laws. CSSU does not hold an AFSL
and is exempt from the requirement to hold an AFSL under the Corporations Act in respect of providing Financial Services. Credit Suisse Asset Management LLC (CSAM) is authorised by the Securities and Exchange Commission under US laws, which differ from Australian laws. CSAM does not hold an AFSL and is
exempt from the requirement to hold an AFSL under the Corporations Act in respect of providing Financial Services. This material is provided solely to Institutional Accounts (as defined in the FINRA rules) who are Eligible Contract Participants (as defined in the US Commodity Exchange Act). Credit Suisse Equities
(Australia) Limited (ABN 35 068 232 708) ("CSEAL") is an AFSL holder in Australia (AFSL 237237).
Malaysia: Research provided to residents of Malaysia is authorised by the Head of Research for Credit Suisse Securities (Malaysia) Sdn Bhd, to whom they should direct any queries on +603 2723 2020.
Singapore: This report has been prepared and issued for distribution in Singapore to institutional investors, accredited investors and expert investors (each as defined under the Financial Advisers Regulations) only, and is also distributed by Credit Suisse AG, Singapore Branch to overseas investors (as defined under the
Financial Advisers Regulations). Credit Suisse AG, Singapore Branch may distribute reports produced by its foreign entities or affiliates pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Singapore recipients should contact Credit Suisse AG, Singapore Branch at +65-6212-2000 for
matters arising from, or in connection with, this report. By virtue of your status as an institutional investor, accredited investor, expert investor or overseas investor, Credit Suisse AG, Singapore Branch is exempted from complying with certain compliance requirements under the Financial Advisers Act, Chapter 110 of
Singapore (the “FAA”), the Financial Advisers Regulations and the relevant Notices and Guidelines issued thereunder, in respect of any financial advisory service which Credit Suisse AG, Singapore Branch may provide to you.
EU: This report has been produced by subsidiaries and affiliates of Credit Suisse operating under its Global Markets Division
This material is issued and distributed in the . by CSSU, a member of NYSE, FINRA, SIPC and the NFA, and CSSU accepts responsibility for its contents. Clients should contact analysts and execute transactions through a Credit Suisse subsidiary or affiliate in their home jurisdiction unless governing law permits otherwise.
Please note that this research was originally prepared and issued by CS for distribution to their market professional and institutional investor customers. Recipients who are not market professional or institutional investor customers of CS should seek the advice of their independent financial
advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents.
CS may provide various services to US municipal entities or obligated persons ("municipalities"), including suggesting individual transactions or trades and entering into such transactions. Any services CS provides to municipalities are not viewed as "advice" within the meaning of Section 975 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act. CS is providing any such services and related information solely on an arm's length basis and not as an advisor or fiduciary to the municipality. In connection with the provision of the any such services, there is no agreement, direct or indirect, between any municipality (including the
officials,management, employees or agents thereof) and CS for CS to provide advice to the municipality. Municipalities should consult with their financial, accounting and legal advisors regarding any such services provided by CS. In addition, CS is not acting for direct or indirect compensation to solicit the municipality on
behalf of an unaffiliated broker, dealer, municipal securities dealer, municipal advisor, or investment adviser for the purpose of obtaining or retaining an engagement by the municipality for or in connection with Municipal Financial Products, the issuance of municipal securities, or of an investment adviser to provide
investment advisory services to or on behalf of the municipality. If this report is being distributed by a financial institution other than Credit Suisse AG, or its affiliates, that financial institution is solely responsible for distribution. Clients of that institution should contact that institution to effect a transaction in the securities
mentioned in this report or require further information. This report does not constitute investment advice by Credit Suisse to the clients of the distributing financial institution, and neither Credit Suisse AG, its affiliates, and their respective officers, directors and employees accept any liability whatsoever for any direct or
consequential loss arising from their use of this report or its content. No information or communication provided herein or otherwise is intended to be, or should be construed as, a recommendation within the meaning of the US Department of Labor’s final regulation defining "investment advice" for purposes of the Employee
Retirement Income Security Act of 1974, as amended and Section 4975 of the Internal Revenue Code of 1986, as amended, and the information provided herein is intended to be general information, and should not be construed as, providing investment advice (impartial or otherwise).
Copyright © 2020 CREDIT SUISSE AG and/or its affiliates. All rights reserved.
When you purchase non-listed Japanese fixed income securities (Japanese government bonds, Japanese municipal bonds, Japanese government guaranteed bonds, Japanese corporate bonds) from CS as a seller, you will be requested to pay the purchase price only.
