The title of this session was "Public Companies: What you should know before investing". Represented on this panel were the companies AFLAC (the one with the duck), ALLETE, BBVA, CEMIG, GE, and Procter and Gamble. Though I cannot suggest any investment guidance was gleaned from the session, the representatives did provide an overview of their companies.
AFLAC (American Family Life Assurance Company of Columbus) indicated that 78% of their revenues come from life insurance policies sold in the Land of the Rising Sun (Japan).
BBVA (Banco Bilbao Vizcaya Argentaria) is a multinational Spanish banking group that is best known in the U.S. as BBVA Compass. BBVA also has the distinction of being the official bank of the National Basketball Association and one of the sponsors of The MoneyShow San Francisco. BBVA is a large banking concern with $810B in assets resident in 32 countries. They are the #1 or #2 bank in most Latin American countries and the #1 bank in Mexico. Their core business is retail and commercial banking with minor activity in investment banking. They consider technology a key in their continued success. One example they gave was that 34% of transactions in the U.S. still occur by check versus only 1% in Spain.
Procter & Gamble is a well-known consumer product company. Their spokesperson indicated that 25 of their brands enjoy $1B per year in revenue. Forty percent (40%) of their shares are owned by retail investors and they have showered them with dividends for 123 straight years.
ALLETE is a utility company in the upper Midwest with interests in iron ore and copper.
GE made an interesting declaration during the session. Their spokesperson said that they were shedding assets in an effort to become simpler and move closer to their core business (Industrial). At one point in time GE was making a disproportionate share of their revenue from their financial services arm. This side of their business suffered during the financial crisis and was perhaps a wake up call since their industrial business did not contract during the same period.
CEMIG is a Brazilian power company with the ability to produce 7,000 MW of generation capacity.
After the companies gave their overview I wanted to know about the state of their defined benefit retiree plans (for those that offered it).
AFLAC indicated that they were not fully funded though they had no concerns about this condition.
BBVA simply indicated that they were "ok".
ALLETE froze their defined benefit plan in 2007 and consider it fully funded.
GE said their plan was still $8B under funded and that cash infusions from the business recently occurred.
Procter and Gamble chose not to answer.
CEMIG did not have a defined benefit plan but did have a defined contribution plan.
The funding, or lack thereof, in defined benefit plans will be yet another showdown in the battle of politics and economics.