Recommendations Following a Review of the Relationship Between the News and Commercial Operations of Bloomberg LP Clark Hoyt August

21, 2013

Table of Contents
I. II. Introduction and Summary Recommendations ................................ 3 Methodology .......................................................................................... 5

III. Relevant Aspects of the History of Bloomberg News ...................... 7 IV. Use of Terminal-Based Information for Newsgathering .................. 9 V. Internal Communications ................................................................... 10 VI. News Access to Information from the Global Data Team .............. 12 VII. Editorial Integrity ................................................................................. 13

INTRODUCTION AND SUMMARY RECOMMENDATIONS

I. Introduction and Summary Recommendations

On May 16, 2013, following reports that Bloomberg journalists had access to certain client-related information, Chief Executive Officer Daniel L. Doctoroff asked Clark Hoyt, an editor-at-large at Bloomberg News ("News" or "BN") and the former Public Editor of The New York Times, to review the relationship between the news and commercial operations of Bloomberg LP ("Bloomberg" or the "Company"). Bloomberg also asked the law firm of Hogan Lovells and Promontory Financial Group ("Promontory") to undertake an examination of the Company's current practices and policies for client-related data and end-user information, as well as past data access issues raised by Bloomberg's clients (the "Hogan Lovells/Promontory Review"). In addition, the Board of Directors asked Samuel Palmisano, the former Chairman and CEO of IBM, to advise the Board on these matters. The efforts of Mr. Hoyt and the others were coordinated to help ensure that the work did not overlap. Over the past three months, Mr. Hoyt reviewed the interaction between Bloomberg News and Bloomberg's commercial operations, including issues of journalistic integrity. He also considered certain aspects of Bloomberg's history and culture that have influenced both its news mission and the interactions between News and other parts of the Company. Throughout, observations, conclusions and recommendations were shared with Mr. Doctoroff and other members of the Company's senior management. Summarized herein are Mr. Hoyt's recommendations and, for context, certain of his observations regarding the Company. They were offered with the intention of helping News and the Company as a whole adhere fully and consistently to their already-high standards, and to highlight areas where policies and practices should be revisited. The Company has not waited to act on the recommendations. Following each recommendation, this summary includes the Company's response in bracketed text. SUMMARY RECOMMENDATIONS Create a cross-platform Standards and Practices Task Force, including representatives of Bloomberg News and all other units that engage in newsgathering and reporting ("Media"). The Task Force should formulate updated ethical guidelines, standards and practices reflecting best journalism practices. The results of the Task Force process should be incorporated into a strengthened section on ethics at the front of The Bloomberg Way (the training manual used in News). Training on its tenets should be universal and mandatory for all News and Media employees. [Management Response: Accepted.] Historically, a limited number of reporters have visited terminal users and prospects accompanied by sales personnel. This practice was started to help acquaint investors with News offerings and to get feedback for product improvement when the Company was smaller and

INTRODUCTION AND SUMMARY RECOMMENDATIONS

less well known. The Company should now allow reporters and their immediate supervisors to meet with terminal clients only for the purpose of newsgathering. The Company's desire to train terminal users and prospects on news-specific functions, to develop new products, and to ensure that News is attuned to subscribers' coverage and product interests can be accomplished by having senior news managers perform this function and by increasing the number of News Application Specialists. [Management Response: Accepted.] Recognizing that Bloomberg is privately held, with no obligation to reveal proprietary financial information, and also recognizing that the Company and its role in markets and the public policy arena has grown, senior BN and Company management should review BN's practice of not covering the Company. Given the inconsistent application of this practice, the preferred course is that such coverage be instituted under clear guidelines developed by management. In the alternative, if the practice of no self-coverage is continued, it should be applied without exception. When publishing news stories in which the Company would otherwise figure significantly, a complete explanation should be given of its relevance and its absence. [Management Response: The recommendation to re-evaluate existing practices and make a decision regarding self-coverage is accepted.] Create a newsroom Standards Editor position to be filled by a senior journalist with the responsibility for making sure that News consistently adheres to The Bloomberg Way's high standards for accuracy, rigor in reporting, balance and tone. The editor should put emphasis on making certain that headlines are accurate, clear and without bias. The editor would monitor daily coverage, review major investigative and enterprise stories and consult regularly with newsroom counsel and senior editors. [Management Response: Accepted.] Separately, outside the newsroom management structure, appoint a senior independent editor to serve as an avenue of appeal for complaints about news coverage and to assist in ongoing development and training on best practices. The appointee would also advise Bloomberg's leadership on issues arising from the relationship between News and the Company's commercial operations, and would not report to the News organization. [Management Response: Accepted. The Company expects to fill the role within the next several weeks.]

METHODOLOGY

II. Methodology
Mr. Doctoroff directed Mr. Hoyt to exercise his professional and institutional knowledge and experience to examine the relationship between Bloomberg's editorial and commercial operations. The first step was to determine which of the Company's units were potentially within scope. The following were included at the outset: Editorial: News, including Bloomberg Businessweek magazine and Bloomberg Markets magazine, plus a handful of content creation units outside Bloomberg News. Commercial: Terminal Sales, Application Specialists, Conference units, Ad Sales. Issues of potential concern were identified in two ways: An analysis of specific potential problems identified in recent published reports on the Company and data privacy issues. Responses to open-ended questions during interviews. The issues were sorted into three categories: Items that, after preliminary consideration, raised no concerns or fell outside the scope of Mr. Hoyt's assignment. Items that fell within the Lovells/Promontory Review. charge of the parallel Hogan

Items within the scope of Mr. Hoyt's assignment. After further inquiry and analysis of each issue in the last category, a judgment was made that some did not pose problems requiring action. The remaining issues were the subjects of these recommendations. The recommendations reflected herein are based in large part on interviews with 203 individuals, some of whom were interviewed more than once. The breakdown of the interviews is as follows: 189 internal interviews, including of Bloomberg News staff in the United States, Europe, Asia, Africa and South America; Core Product; Global Data; Bloomberg Government; Bloomberg New Energy Finance; Bloomberg Industries and Bloomberg BNA. 14 external interviews, including terminal clients and independent experts on journalism ethics. To encourage candor under sensitive circumstances, interviews were conducted with the understanding that individuals' names would be kept confidential. Mr. Hoyt and a team assigned to him also gathered and analyzed various written materials including: More than 100 business plans for various Bloomberg units over the past four years. Training manuals that might have contained relevant information: News TRAIN, Help Desk Eight-Week Program, Sales Sector Rotation, materials

METHODOLOGY

from multiple Analyst units and such firm-wide programs as Employee Policies "Day One" and "Day Two" and Ethics for Managers. Internal policy manuals including Confidentiality Agreement. the Global Core Guide and

The Bloomberg Way: 2012 (latest) and 1995 editions. More than 1,000 "Matt's Notes," the Editor-in-Chief's communication to BN staff, beginning in 1998. Policy manuals of competing news organizations. BN database of more than 3,000 notes on client visits, dating back to 2004. Parallel, three-month samples of headlines and news articles from BN and competitors. Internal customer survey data. Three books on the market data industry: Tales from the South Pier (John Jessop), Breaking News: How the Wheels Came off at Reuters (Brian Mooney), and Castro and Stockmaster: A Life in Reuters (Michael Nelson). Bloomberg by Bloomberg (Michael Bloomberg/Matthew Winkler). Bloomberg LP, a 1999 Harvard Business Review Case Study (Clayton Christensen, Richard Hamermesh, Jeremy Dann). weekly

RELEVANT ASPECTS OF THE HISTORY OF BLOOMBERG NEWS

III. Relevant Aspects of the History of Bloomberg News

Michael Bloomberg launched Innovative Market Systems -- eventually to become Bloomberg LP -- as a data and bond analytics business in 1981. Bloomberg's initial success was built on bringing transparency to bond valuation and trading, previously an opaque, telephone-based market. Early on, it became evident that news, alongside market information and analytics, was vital for Bloomberg's subscribers. The Company initially obtained news from third-party contributors, but in 1990 it decided to build its own news service. Matthew Winkler was recruited from The Wall Street Journal to be the founding Editor-in-Chief, and Bloomberg Business News was born in June 1990. ("Business" was dropped from the name in 1997.) Today, Bloomberg News has more than 150 bureaus in more than 70 countries and collectively produces thousands of stories per day. The Bloomberg terminal seamlessly integrates news with data and analytics and combines them with a strong devotion to customer service. Bloomberg's proprietary news content is a major contributor to the value of the terminal, and to the Company's overall success. At the outset, BN's mission was to provide market-related news that was most relevant to the Company's terminal subscribers. Since then, BN has grown into a multi-platform enterprise with the goal of becoming the world's most influential business and financial news organization. The terminal community alone has expanded from fewer than 10,000 subscribers in 1990 to more than 315,000 today. Other media platforms have audiences beyond the terminal community, including Bloomberg Radio, Bloomberg Television, Bloomberg.com, the monthly Bloomberg Markets magazine and the weekly Bloomberg Businessweek magazine, purchased in 2009. Bloomberg media products are also available on mobile platforms. The Company has launched or acquired subscriptionbased websites containing news and analysis for professional specialties, including Bloomberg Government, Bloomberg New Energy Finance and Bloomberg BNA. Over the years, BN has done more than write news stories. It has been a strong contributor to the wide array of data and analytics available on the terminal. For example, BN is responsible for collecting and posting approximately 50,000 economic statistics on an ongoing basis, which amounts to nearly eight percent of all economic data on the terminal. In reporting on market-moving news, speed is essential. Consistent with that, The Bloomberg Way commands that BN's reporting be defined by the "The Five Fs": Factual word. First word. Fastest word. Final word. Future word. Two of the five are about speed. A news service's ability consistently to beat the competition benefits its subscribers and its own bottom line. The Company recognizes that its ability to deliver timely market-moving news to its subscribers is a key reason why the terminal is such a valuable tool for them. For example, when BN reported on August 8, 2013, that the

RELEVANT ASPECTS OF THE HISTORY OF BLOOMBERG NEWS

Federal Communications Commission was considering a rule change that could have an impact on several proposed television deals, the stock of one affected company quickly fell by six percent. Data that is available to all terminal subscribers gives BN reporters a competitive advantage, which benefits Bloomberg's terminal subscribers. Reporters routinely use such data to break stories no one else can produce as quickly and completely. Reporters also create analytical screens to find stories, such as a bankruptcy-related function that identifies companies with higher near-term cash burn than cash on the balance sheet. In addition, News is able to produce more informative reports for subscribers by linking them to relevant terminal functions. RECOMMENDATIONS Relationship between News and the terminal: Journalists should not be separated from the terminal. News, data, and analytics are thoroughly intertwined, to the benefit of clients and Bloomberg. With proper information safeguards, the terminal is a powerful reporting tool that gives BN a competitive advantage that is entirely appropriate and delivers to Bloomberg subscribers information they need to make timely business decisions. [Management Response: Accepted.]

USE OF TERMINAL-BASED INFORMATION FOR NEWSGATHERING

IV. Use of Terminal-Based Information for Newsgathering

Hogan Lovells and Promontory were charged with examining the extent and details of journalists' access to client-related information on the terminal. Mr. Hoyt provided information he obtained on that subject to Hogan Lovells and Promontory. Those firms included an extensive discussion of that subject in their report to Bloomberg's Board of Directors, and those matters are therefore not covered herein except insofar as they inform certain of the recommendations. RECOMMENDATIONS Newsroom Standards and Practices Task Force: The Company should appoint a Task Force including representatives from BN and all Media units. The Task Force should report to the Chief Content Officer. The Task Force should: Review, consolidate, update, and expand The Bloomberg Way's provisions regarding newsroom ethics, incorporating relevant content from "Matt's Notes," the news training dashboard, and other existing sources. Draft new policies including those appropriate to address the news gathering issues raised in the Hogan Lovells/Promontory Review and discovered through Mr. Hoyt's interviews, such as the practice of listening in on third-party conference calls. Draw special attention to The Bloomberg Way's provisions on newsroom ethics by separately distributing them periodically throughout News. Establish procedures to ensure appropriate training for BN and Media staff on The Bloomberg Way's expanded ethics section.

[Management Response: Accepted.]

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INTERNAL COMMUNICATIONS

V. Internal Communications
Companies share client-related information with their employees for a variety of reasons. Given that Bloomberg employees include reporters, it is particularly important that the Company assess carefully how and to what extent it shares such information internally. The Company should do even more to help ensure that reporters do not have access to client information. For example, in the past, internal messages recognizing individual salespeople for their successes have occasionally included client information such as Bloomberg's revenue from that client. Similarly, in order to educate the sales teams about News initiatives or new products, BN personnel participate from time to time in weekly regional sales meetings at which client information is discussed. Finally, while the Company's open floor plan plays an important role in helping employees work across divisions to come up with innovative products, this approach carries with it the risk that information could be shared inappropriately. Bloomberg News is located in 135 cities around the world. In most bureaus, sales staff members are also present, raising the risk that reporters might inadvertently overhear customer-related information or might learn potentially newsworthy developments through the sharing of information from Sales staff. Interviews turned up no evidence that overheard information from sales team members made its way into news stories; they did find a few examples where sales inappropriately told News about sales or removals of terminals. RECOMMENDATIONS Increased limits on internal information sharing with News: To help prevent disclosure to reporters of potentially sensitive client-related information within the Company, Bloomberg should: End the inclusion of specific firm and client names in companywide sales recognition communications. Client-related information should be "blinded" on all such communications to prevent its potential for use in news reporting. [Management Response: Accepted.] When News staffers attend internal Sales meetings to discuss product initiatives and deliver "market wraps," schedule them first on the agenda. Have them leave immediately after their presentations, allowing Sales to discuss client-related information outside the presence of News. [Management Response: Accepted.] Change Bloomberg's internal calendar function which allows News personnel to determine whether someone on the commercial side of the Company is available for a meeting, so

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that News personnel cannot see the details of the co-worker's appointments. [Management Response: Accepted.] When the News training team fields a query about coverage from the Help Desk, they should not reveal the clients' identity in the process of resolving the inquiry with reporters. [Management Response: Accepted and completed.] To drive awareness of the need to protect client-related information from inappropriate disclosure (whether inadvertent or otherwise), update the Global Core Guide to emphasize the need for discretion, including taking care not to be overheard, even at one's desk, by those that do not have a need-to-know. [Management Response: Accepted and completed.] Establish a working group from Sales, News, and Facilities to write and promulgate clear guidelines on shared-use facilities. To reduce the risk of unintended sharing of client information in shared-use offices, the group should draft an office-by-office plan for changes where needed. At the same time, the group should take care not to limit appropriate information-sharing between the two groups. This working group should report to the Chief Operating Officer. [Management Response: Accepted.] Bloomberg requires all employees to sign a broad confidentiality agreement on commencing employment, and its training for new hires includes a discussion of confidentiality. The Company also provides optional follow-up confidentiality training, but many Bloomberg employees have not yet taken it. This training should be enhanced and made mandatory. [Management Response: Accepted and in progress.]

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NEWS ACCESS TO INFORMATION FROM THE GLOBAL DATA TEAM

VI. News Access to Information from the Global Data Team

The Hogan Lovells/Promontory Review assessed concerns that News inappropriately obtained access to analyst reports maintained by Bloomberg's Global Data Group, and concluded that those concerns were unfounded. Mr. Hoyt's extensive interviews buttressed that conclusion. RECOMMENDATIONS Appropriate interactions between Global Data and News are in the interests of clients and should continue. BN's quality checks and clarification adds meaningful value to the data available to clients via the terminal. Global Data should continue to respond to BN questions as they would to a client's questions. To drive home the importance of data security and to avoid even the appearance of pressure on Global Data from BN for information, the Company should incorporate into the Global Core Guide a prohibition on the solicitation by News of information that is not available to all terminal subscribers from Global Data. [Management Response: Accepted and completed.]

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EDITORIAL INTEGRITY

VII. Editorial Integrity

Bloomberg customers rely on its news products to make business decisions, and therefore must trust that the news is delivered without bias and unaffected by outside pressure.

A. Editorial Independence

The News division operates with strong independence, even to the occasional detriment of its commercial operations. The Bloomberg Way explains the central issue at stake: "We are in the often-difficult position of reporting on our customers. Altering a story because it embarrasses a company or individual would create the perception that we shade our news judgment under pressure, and that would cost us our integrity Unless our news was impartial, free of any outside influence, and not tied to some hidden agenda, then no amount of money or talent would assure us success as journalists. Our customers at that point were loyal because they considered our data to be untainted. Customers for our news would expect no less." A top communications executive at a major financial institution agreed: "Simply because we're a client and we're a bank -- a larger client than say a car company -- you're going to treat me a little nicer than you treat Daimler? I don't think so. You've gotta treat us like you treat anybody else. I want a smart reporter who really understands our business. I don't want us to be treated better. It won't work for you as a business model. It will blow up on you." RECOMMENDATIONS Mission Statement: To affirm the dual mission and editorial independence of Bloomberg News, top leadership of Bloomberg should make a strong statement of purpose with respect to both terminal clients and BN's wider global audience -- emphasizing that BN will treat all subjects of its coverage alike and in accordance with the requirements of The Bloomberg Way, which demands rigorous reporting, accuracy, fairness and balance. [Management Response: Accepted.]

B. News Without Bias

With independence comes the obligation to live up to the highest standards, especially when it comes to the tone and fairness of coverage. The Review sought out and interviewed customers who were critical of BN in this regard. Mr. Hoyt's examination of a sample set of hundreds of headlines and stories produced over three months by Bloomberg (and in many cases comparing them to similar stories produced by competitors) did not find a pattern that Bloomberg's coverage was focused more on what could be

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construed as the negative or any meaningful difference in tone. There were, however, limited examples of BN's failing to live up to its standards.

Tonality of Headlines For all the thousands of terminal headlines that flow past on a daily basis, capsulizing the news in mostly straightforward fashion sometimes brightly, sometimes puzzlingly those that misfire can cause lasting damage. A BN headline, for example, in the sample period did stand out as inconsistent with The Bloomberg Way: "Blankfein Leads Bank CEO Pay With $26 Million Deemed Overpaid." "Overpaid" is an editorial judgment not appropriate for a headline on a news article. BN editors acknowledged that the headline was inappropriately worded and changed it to: "Blankfein Leads Pay List Amid 7.7% Increase for Bank CEOs." Recognizing that using the name of prominent executives and companies in a headline often attracts more readership, the review also examined a sample of headlines from March 1, 2013, through the first week of June 2013 for the words "Ex-Goldman" or "Former Goldman" in headlines. The terms were chosen because they indicated the subject of the story was no longer with the firm and its name in a headline could be gratuitous. There were 12 such headlines. In four of them, Mr. Hoyt concluded that the use of the Goldman name represented a stretch or was altogether unjustified. The most egregious, "Ex-Goldmanite Trades on Girl Power of Stiletto Networks: Review," was over the review of a book by an author last connected with Goldman 11 years ago as a low-ranking associate. Though not brought up in interviews by clients, several editors acknowledged that headline clarity can sometimes be an issue. From the three-month review period, many examples were found. Here is a small selection to illustrate the point: "DSM's Flirt With Red Hot Mamas Cuts Investor Love for Plastics" "Brokers Go Gray as Youth Proves Unsustainable With No Cold Calls" "Cold War With Soup Tempts East Europeans to Menus of HBO, Sony" "DoCoMo Cash, Girl Band Help Beat Softbank on Costs: Japan Credit"

Tonality of Content In an effort to make stories relevant and compelling, reporters have a particular obligation to consider carefully any comparisons or metaphors. One example was published on December 27, 2011. The headline, "JPMorgan's Swaps Occupying Cassino Prove Curse Like World War II," was followed by two paragraphs that said:

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EDITORIAL INTEGRITY

"World War II's Battle for Cassino leveled the Italian town and its hilltop abbey. Now, the 33,000 residents are digging out from the rubble left by Wall Street." "Six decades after U.S.-led forces ousted the Nazis from Cassino, a new generation is grappling with the fallout from the debts of postwar rebuilding borrowings that grew because of a derivative that backfired. Soaring costs forced Cassino, 80 miles southeast of Rome, to settle an interestrate swap with JPMorgan Chase & Co. in 2009, leaving the town unable to pay for daycare for 60 infants and services for the poor." JPMorgan objected to the headline and those paragraphs, saying they unfairly compared the bank to the Nazis. News considered this objection, said its facts were correct (an assertion the bank did not dispute), and stood by its story. Mr. Hoyt concluded that the literary device used in the Monte Cassino story went too far. In one of the great campaigns of World War II, Monte Cassino was completely destroyed in a wave of battles that claimed 75,000 casualties and the lives of hundreds of townspeople. To suggest that a bond deal gone sour, curtailing daycare for 60 children and services for the poor is comparable to the terror and cataclysm of war is inconsistent with BN's high standards.

Complaint Handling Any news organization, especially one like Bloomberg that aggressively covers its clients, must combine its editorial independence and integrity with a culture that listens and responds quickly and respectfully to complaints. It should correct errors of fact, tone or fairness without reluctance or defensiveness, and stand by its reporting and journalists when appropriate. BN has policies that require journalists to take complaints seriously. They start with publishing contact information for reporters and Editors at the bottom of every news story. There are at least four separate ways to complain about news: Direct messages to reporters and editors using blue links at the bottom of stories. Letters to the editor LETT <GO>. These are mainly comments on the news. The "Submit comment" button on the side of every story. Complaints to the Help Desk.

Despite formal policies and multiple channels for complaints, Mr. Hoyt found that some outside the newsroom felt that it was insufficiently responsive and that, when corrections are made, they are sometimes not acknowledged forthrightly but are presented as updates. News management disputes this assertion, noting that hiding mistakes is grounds for termination under The Bloomberg Way.

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EDITORIAL INTEGRITY

RECOMMENDATIONS Newsroom Standards Editor: To provide a strong emphasis on daily adherence to The Bloomberg Way in headlines and news stories, appoint a senior editor in the BN newsroom to enforce standards. The editor will: Read before publication major news stories and projects for accuracy, fairness, balance and tone. Review headlines for accuracy, clarity and tone. Recommend fixes/corrective actions in real time to newsroom leadership. Be part of senior newsroom leadership, reporting directly to the Editor-in-Chief.

[Management Response: Accepted.] Senior Independent Editor: To provide an alternative and independent channel to receive and look into complaints regarding news coverage, appoint a senior journalist outside the News management structure. The duties would include the following: Work with the newsroom Standards and Practices Task Force to help update News' policies, practices and ethical guidelines as discussed throughout this Report. Work with BN training staff to develop a training program on ethics. Review and assess complaints regarding news coverage, recommend corrective action to newsroom leadership when warranted and respond to the complaining party. Look for patterns of problems and, if found, report them to BN and Company leadership. Advise the Company on issues that arise over the relationship between News and the Company's commercial operations. To provide independence, the senior journalist should be outside the newsroom management structure and should not participate in news coverage decision-making, including prepublication review of stories. The position should be housed within the Office of the Chief Executive and report to the Chief Content Officer of the Company.

[Management Response: Accepted.]

C. News and Sales

Consistent with Bloomberg's emphasis on customer service, journalists have been encouraged to meet with subscribers. This was for several reasons: Story sourcing. Product development: BN was created to serve demanding customers, and that required a first-hand understanding of what they wanted. For example, Bloomberg First Word was launched in 2010 as a response to terminal users seeking highly condensed, real-time information on which they could act.

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EDITORIAL INTEGRITY

Training: Additionally, journalists can help subscribers gain understanding of terminal functionality. Journalists' ability to do so has diminished as the terminal has become more complex. The work is better performed by News Application Specialists. Sales: From time to time, Bloomberg journalists meet with terminal users and prospects to help sell terminals.

RECOMMENDATIONS Prohibit reporters and their immediate editors from attending sales meetings. [Management Response: Accepted.] Only allow top newsroom managers to visit clients to obtain feedback for news product development and to help acquaint clients and prospects with the value of BN. [Management Response: Accepted.] Make certain when BN staff visit clients that ground rules are clearly established at the outset, including the purpose of the visit and whether it is on the record. [Management Response: Accepted.] Increase the number of News Applications Specialists globally to provide an added channel of feedback, to train clients on news functions, and to set up alerts and filters. [Management Response: Accepted.]

D. Self-Coverage and Self-Interest

Bloomberg's practice is that it does not report on itself. While other major news organizations take a different approach, Bloomberg is a private company, with no public shareholders and with no obligation to report its financials. The practice was put in place from the beginning, when Bloomberg was small and less newsworthy, and was consistent with a culture of internal transparency and collaboration, in which News was a partner in building the business and was privy to financial information about the Company not to be shared outside. When Michael Bloomberg entered the political realm as a candidate and then became Mayor of New York, BN began covering him as a public figure. The Bloomberg Way says: "Avoid any appearance of favoritism in our coverage of Michael Bloomberg. We will report on what he says and does as a government official, philanthropist or candidate." BN does not cover Michael Bloomberg's personal life or his wealth. The Company has generally observed the practice of not covering itself and has not covered newsworthy events in which it was involved. For example, it did not cover the blocking of the Bloomberg websites, which happened after an investigative piece on the wealth of prominent Chinese politicians and their families. In addition, the Company has not included itself in certain aspects of its research. For example, the Bloomberg

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Industries "dashboard" on the financial information services industry does not include Bloomberg, which has a large share of that market. However, BN has sometimes covered the Company, including areas where the Company has commercial interests. For example, BN has covered lawsuits involving the Company, including News' use of the Freedom of Information Act. There was no evidence of a systematic pattern in which News has biased its reporting to enhance Bloomberg's commercial objectives. Recent coverage of a battle over rules for the clearing of swaps and swaps futures, however, was an important, albeit singular, instance in which BN gave extensive coverage (far more than competitive news services) to an issue in which the Company had an important financial interest as an applicant to operate a Swaps Execution Facility. The coverage provided insufficient indication of the Company's stake in the outcome. Most of BN's coverage, which came after discussions between News and the Company's commercial team, highlighted issues of market transparency, risk and regulatory concern without providing significant coverage of counterarguments, or of the full scope of the Company's economic interest in the dispute. There is no Bloomberg policy addressing the proper relationship between news coverage and the Company's commercial interests. Competing news organizations, by contrast, have specific safeguards to insulate coverage from business self-interest. RECOMMENDATIONS It is essential to reaffirm clear policies to prevent even the appearance that the Company's commercial interests are inappropriately shaping news coverage. The Company should write into the company policies a statement setting forth the principle that News best serves clients and the Company's success with impartial news coverage and declaring that news stories will not be shaped to promote the Company's interests. [Management Response: Accepted.] Senior BN and Bloomberg management should review the practice of not covering the Company. Because BN has not followed the practice consistently, Mr. Hoyt's preferred course would be for BN to initiate coverage of the Company, stipulating what will and won't be covered and balancing the desire to cover newsworthy subjects with respect for Bloomberg tradition and culture. Appropriate subjects for coverage could include activities with the potential to move markets or influence public policy. Proprietary financial information about the Company and internal personnel matters would remain off limits. In the alternative, if the practice of no self-coverage is continued, it should be applied without exception. When news stories in which the Company would otherwise naturally figure significantly are written, a complete explanation should be given of its relevance and its absence. [Management Response: A review of the practice will be undertaken.]

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EDITORIAL INTEGRITY

E. Newsgathering Ethics
Conference Calls The Review considered a number of occasions on which BN reporters gained access through independent sources to conference calls held by companies for their employees. The practice of listening to the conference calls of others was justified at the creation of the news organization as a way of promoting market transparency. Before 2000, some companies would disclose financial data to selected groups of investors in private, giving them an advantage over others in the market. BN leadership believes its relentless focus on the issue helped inspire the SEC's Regulation FD in 2000, which required disclosure of material information to all investors, as opposed to an invited few. Reporters gained access to calls considered by the Review through a variety of methods: by reading a transcript of the call provided by a company public relations employee; by using a dial-in number and access information provided by a source outside of Bloomberg; by listening to the call while sitting in a source's office; or by listening while the source played a recording of the call over the phone. The BN reporters said they were not asked to identify themselves on the calls, and that they had been instructed that, if asked, they were obligated to identify themselves as Bloomberg reporters and to hang up if told to do so. In each instance, Newsroom legal counsel was consulted regarding the handling of the calls. None of the resulting stories disclosed fully how the information was obtained. Bloomberg has a number of guidelines that cover these matters, but they are not sufficiently detailed. RECOMMENDATIONS The newsroom Standards and Practices Task Force should develop guidelines for what is acceptable and what is off-limits when it comes to third-party conference calls. The Task Force should seek legal counsel and specifically address: Use of third-party employee access information. Listening to a call at the invitation of somebody authorized to be on it. Listening when access is offered by someone not authorized to be on the call.

[Management Response: Accepted.]

Chat Rooms The Hogan Lovells/Promontory Review addressed the issue of reporters joining a Bloomberg-sponsored anonymous commodity chat room on the terminal, noting that while participants in such a discussion reasonably

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should assume that their comments are observable to a broad audience, some participants may not appreciate that reporters might be viewing the chats. Hogan Lovells/Promontory recommended that Bloomberg should either provide explicit notice of reporter participation or exclude reporters from participation. RECOMMENDATIONS The Hogan Lovells/Promontory recommendation on journalist participation in anonymous chat rooms on the terminal should be embraced by the Standards and Practices Task Force. [Management Response: Accepted. Bloomberg has decided to exclude News personnel from participation in anonymous chats and has already implemented measures to enforce this change.]

Conferences Bloomberg hosts thousands of seminars and conferences each year around the world, produced by multiple units under a variety of ground rules. Some conferences involve the participation of journalists -- in the preparation, as hosts/moderators/panelists, and as reporters covering the event. Having reporters and editors moderate panels at on-the-record conferences is appropriate and can benefit both the journalist, who gains visibility with a select audience of potential sources, and the conference, which benefits from the journalist's expertise. At the same time, performing the same duties at an off-the-record conference for customers or potential customers requires careful thought to avoid situations analogous to a sales call. RECOMMENDATIONS A cross-platform group representing the units that produce conferences has been formed and it has begun work on policies and practices. That group should address: The need for participants in such conferences to know of the presence of reporters and understand the ground rules. The role of journalists in inviting participants (particularly newsmakers whom they cover) to the conferences. The importance of avoiding situations where Bloomberg News inadvertently appears to "pay for news" through speakership fees. The need to ensure that co-sponsors do not interfere with a balanced conference agenda.

[Management Response: Accepted.]