The communications tool that is the centerpiece of corporate performance, accomplishments, objectives and mission. The one vehicle where you can articulate all that, and do so strategically and effectively.

1. ANNUAL
REPORT

2. ANNUAL REPORT
© MWW GROUP, ALL RIGHTS RESERVED 2
The Annual Report
The communications tool that is the
centerpiece of corporate performance,
accomplishments, objectives and
mission. The one vehicle where you
can articulate all that, and do so
strategically and effectively.

3. ANNUAL REPORT
© MWW GROUP, ALL RIGHTS RESERVED 3
The annual report is evolving.
Increasing investor expectations and
dwindling attention, coupled with the
growing influence of the Internet for
research and information-gathering,
and compliance and budget pressures,
are significantly shaping this document
and influencing its delivery.
From our experience in producing
annual reports over the last 40 years,
we view this singular communications
tool at a threshold: transformation
from an obligatory conventional
financial document into a lively, reader-
engaging, multi-use communications
piece and reference tool – one that can
be positioned to very specific reader
targets and to a larger community.
This is an opportunity to make your
annual report a “corporate original”
document. We are delighted to provide
the following snapshot of current
annual report trends and our best
practices in structuring this document.
We look forward to working with you on
creating your next corporate original
communications piece.

4. ANNUAL REPORT
© MWW GROUP, ALL RIGHTS RESERVED 4
THE PACKAGE: TRADITIONAL OR BUNDLED
The 10-K wrap is growing in use, and the principal influencers of this are
budget and production considerations. A little over half (56%) of companies
participating in the National Investor Relations Institute’s (NIRI’s) 2006 annual
report survey utilized the 10-K wrap this year.
Interestingly, the goals of both presentation formats are shared: to
communicate corporate strategy. And the average length is the same for both
traditional annual reports and 10-K wrap reports.
The editorial narrative for 10-K wraps is increasing, according to NIRI.
THE TOP 6 FINANCIAL
MEASUREMENTS ARE
IDENTICAL IN TRADITIONAL
REPORTS AND 10-K WRAPS:
• Earnings Growth
• 5-Yr Financial Summary
• Margins
• Return on Equity
• Return on Assets
• Pro Forma Data
TODAY’S ANNUAL REPORT
The annual report remains the optimum vehicle for articulating your company’s track
record(financialperformance,challengesandaccomplishments)andoriginalcorporate
vision (mission and objectives). The annual report also can be a powerful mechanism
for repositioning a firm, tackling misperceptions, diffusing any controversial issues
and strengthening an image.

5. ANNUAL REPORT
© MWW GROUP, ALL RIGHTS RESERVED 5
THE TRADITIONAL ANNUAL report
emphasizes editorial narrative, in
effect expanding upon the 10-K.
Attention within that “corporate
narrative voice” attention is given
to nonfinancial drivers, such as
growth opportunities and expansion
plans. This report format seems to
be favored by the retail investment
community, which seeks information
in a more expansive, text-driven
format.
THE TRADITIONAL ANNUAL
10-K WRAP
WHAT’S THE DIFFERENCE?
A 10-K WRAP is a bundled document
containing the 10-K filing with
accompanying editorial commentary.
The 10-K wrap communicates direct
disclosure based information and is
considered to be geared more toward
institutional investors and financial
analysts. Although the narrative has
been leaner than that of a traditional
annual report, according to NIRI it
is lengthening. A 10-K wrap is more
likely to include a corporate mission
or vision statement.
Both traditional annual reports and 10-K wraps contain the 10-K, a comprehensive
summary report of a company’s performance submitted annually to the SEC. The
only real difference between the two is how a company chooses to present the
surrounding information.

6. ANNUAL REPORT
© MWW GROUP, ALL RIGHTS RESERVED 6
Creative annual report hybrids are
also starting to take shape, such as
10-K wraps bundled with corporate
marketing brochures and/or fact
sheets.
Annual report length continues
to grow in a post-Sarbanes-Oxley
environment. Both traditional annual
reports and 10-K wraps are now 51 to
100 pages in median length, according
to NIRI. In the last 2 years the number
of companies producing reports over
100 pages has increased from 19%
to 37%. Financial information is also
increasing, now comprising 67% of
a typical report. 10-K wraps overall
are trending longer, with a median
increase of 9 to 17 pages. And 36% of
NIRI survey respondents report 10-K
wrap editorial narrative of 5-8 pages;
32% report 9 to 20 pages.
The median print run for traditional
annual reports is 40,000 to 49,999
copies and 20,000 to 29,000 copies for
10-K wraps.
FINANCIAL INFORMATION
IN REPORT
COMPANIES PRODUCING REPORTS
OVER 100 PAGES
MEDIA PRINT RUNS
TRADITIONAL
10-K WRAPS
67%
40,000-49,999
20,000-29,000
Both traditional annual reports (78%) and 10-K wraps (77%) liberally feature charts
and graphs. Traditional annual reports are more likely to include photographs than
10-K wraps (89% over 71% respectively).
19%
37%
2010
2012

7. ANNUAL REPORT
© MWW GROUP, ALL RIGHTS RESERVED 7
WHO’S DOING WHAT? TRADITIONAL
VS. 10-K WRAP
According to NIRI, 10-K wraps were
most utilized in 2006 by companies of
$1 to $1.49 billion in median market
cap. Traditional annual reports were
favored by companies having a $1.5
to $4.9 billion in median market cap.
Correspondingly, budget and cost
savings seem to be the principal
determining factors in report format.
Secondary selection factors for
10-K wraps cited by NIRI were ease
of production and preference for
bundling of information.
WHO’S READING IT?
Institutional investors – both existing
stakeholders of the company and
potential new ones – are the most
important annual report target (85% of
traditional report producers and 82%
of 10-K wrap producers considered
this group #1 according to NIRI).
And financial analysts and current
individual investors hold slightly
more sway than potential individual
investors (70% over 63%). The
importance of customers has steadily
decreased since 2002.
Although institutional investors
have wide access to analytical tools
and dialogue with management,
they continue to rely on the annual
report document, according to Rivel
Research Group. In its 2005 study,
Perspectives on the Buy Side, almost
two-thirds (64%) of buy-side analysts
and portfolio managers identified
the annual report as one of the most
valuable sources of information for
determining which stocks to own.
The individual investor, with fewer
advanced resources at hand, continues
to rely heavily on the annual report.
According to Better Investing, retail
investors look for the following1
:
• Two-Year Financial Highlights
• Financial Summary: To include 5 or,
even better, 10-year record, current
assets and liabilities, key balance
sheet items
• Written Content: High marks for
explanation of both challenges and
successes, industry commentary,
competitive position
• Design: Covers with impact, charts
and graphs complementing financial
and written content, logical flow of
contents

8. ANNUAL REPORT
© MWW GROUP, ALL RIGHTS RESERVED 8
THE MESSAGE
No matter the means of delivery the
overarching goal of the annual report
is to communicate corporate strategy.
According to NIRI, 86% of traditional
reports and 83% of 10-K wraps place
the greatest emphasis on this objective.
Focus on financial performance is
steadily increasing, while narrative on
products and markets is decreasing.
For both traditional annual reports
and 10-K wraps the 6 top financial
measurements presented are
identical, with earnings growth
securing the top spot (included in
80% of reports regardless of format).
According to NIRI, a 10-year financial
summary has lost favor (9% of reports
now include this, down from 31%
reported in the last survey). However,
it is worthwhile to note that a 10-
year financial record receives the
highest financial summary score
within Better Investing’s annual report
judging criterion.
Putting a face on the company, or
corporate-personalizing the report,
is a growing theme, with heightened
focus on employees, and quotations
capturing distinct voices.
The paramount goal of
the annual report: to
communicate corporate
strategy

9. ANNUAL REPORT
© MWW GROUP, ALL RIGHTS RESERVED 9
TECHNOLOGY TREND
Virtually all companies post their
annual reports in some format on their
corporate web sites today. And that’s
a good thing. Annual and quarterly
reports rank second only to investor
presentations as key information
sources on a company’s web site2
.
For greater reader inclusiveness it is
important to utilize Internet visibility,
however not at the exclusion of the
printed report. Over three-quarters
of NIRI’s 2006 annual report survey
respondents (79%) do not plan to
utilize a web report exclusively at any
future point.
Not surprisingly, younger readers
favor the web for convenience in
accessing certain information,
according to ADP Brokerage Services
and Forrester Research. However, all
generations – Gen Y, Gen X, Younger
and Older Boomers, and those 60+
– value materials received by mail
as more private and more secure
than those posted on the web. And
investors over 60 – one-quarter of the
U.S. investing public – prefer by more
than 2 to 1 to receive information on
“laws and regulations” by mail rather
than the web.
In a January 2006 telephone survey
of 1,500 investors conducted by
Forrester, two-thirds preferred
receiving a printed annual report.
Why? Reasons included wanting to
view the information on paper, and not
wanting to print information at their
own expense. Some other statistics
worth noting3
:
• Among U.S. investor households, 8 million
do not have Internet access
• 43% of investors with Internet access use a
(slower) dial-up connection
• On-line readers typically avoid lengthy
documents, seeking specific content over
the overall “story”
Under current SEC rules, public
companies must deliver their annual
reports (and proxy statements) in
paper form or, if the shareholder
consents, the information can be
delivered electronically. An alternative
model proposed by the SEC4
would
have a company post its annual report
and proxy materials on a web site
(other than Edgar) and send a notice
of electronic proxy materials to all
shareholders at least 30 days before
its annual meeting. However, the
proposed SEC rules do not suggest
public companies can eliminate paper
annual reports. If a shareholder
requests a paper copy of the materials
identified in the notice, the company
must send the materials within 2
business days.
Bottom line? Think through the total
universe of your annual report reading
audience. Electronic delivery of your
report extends its reach and adds
convenience for some. However, in
utilizing the Internet there are notable
demographic preferences and usage
including age, ethnicity, geography and
economic level.
Over ¾ in NIRI’s annual
report survey do not plan
to exclusively utilize a web
annual report at any future
point.

10. ANNUAL REPORT
© MWW GROUP, ALL RIGHTS RESERVED 10
MODULAR WE GO
Over one-third (35%) of companies
now produce modular or flexible on-
line reports (not PDF), according to
NIRI. And they do so economically,
with budgets of less than $20,000.
Modular reports have downloadable
financial data and can be searched,
indexed and forwarded to a friend.
WHO’S RESPONSIBLE: INCREASING
ROLE OF IR
Not surprisingly, the role of investor
relations in the annual report is
significant. The investor relations
department or consultant is the
annual report’s primary project
manager. And IR involvement has
risen dramatically in writing the MD&A
content (up to 71%), so much so that
the role of IR is nearly equal to that of
the CFO or Finance/Treasury. One area
where internal IR’s role has decreased
is in writing the editorial portion of the
10-K wrap, which could be outsourced
or assigned to another department.
Over half of companies participating in
NIRI’s annual report survey indicated
that the IR department houses all or
most of the annual report budget.
WHAT’S IT TAKE?
One-half of the companies polled by
NIRI begin focus on the annual report
at least a full quarter before the end
of the fiscal year. Those producing
traditional reports dedicate just
under 4 months of work, while those
completing 10-K wraps average a little
under 3 months.
THE TRIPLE BOTTOM LINE:
SUSTAINABILITY REPORTS
Sustainability reports, which focus on
economic, environmental and social
performance, have been published
by privately held companies and
nonprofits for years. Some investors
are now defining business success
more broadly than financial results.
Among these investors there is
an expectation for companies to
earn a profit, and to set standards
of environmental and social
performance: the triple bottom line of
sustainability. Within the S&P100, 40%
of companies now issue corporate
social responsibility reports, up
from 25% in 2002.5
The Dow Jones
Sustainability Index for North America
currently covers 93 U.S. companies,
18 Canadian firms and a number
of leading sustainability-driven
companies worldwide6
.

11. ANNUAL REPORT
© MWW GROUP, ALL RIGHTS RESERVED 11
EXTRA EXTRA:
• All Boats Rise in a Transparent Tide: With growing expectations for fuller
disclosure and access to information, private companies are increasingly
producing some form of annual communication to stakeholders and other key
constituencies.
• Compliance Grows: Trends for following SEC interpretative guidelines in
traditional reports and 10-K wraps are predictably increasing. Three-quarters
(73%) of companies reported improvement in the quality of their MD&A,
meaning willingness to increase transparency and eliminate nonessential
information from commentary.
• Established Electronic Proxy Trend: Almost half (49%) of NIRI’s survey
respondents now use electronic proxy voting, vs. 18% in 1999. Over half
disseminate an electronic proxy with their on-line annual report.
• Dividend Policy? Company dividend policy is explained in less than a third of
reports, whether traditional or 10-K wrap. Of note for those targeting individual
investors: Better Investing gives high marks to companies explaining their
dividend policies in annual reports.
With growing expectations
for access to information
and fuller disclosure, private
companies are increasingly
producing some form of
annual communication to
stakeholders.

12. ANNUAL REPORT
© MWW GROUP, ALL RIGHTS RESERVED 12
THE PACKAGE
The annual report is your ball game.
In terms of presentation there is no
right or wrong, old or new, or one best
practice. The overarching objective is
to connect with your audiences. To do
that, put your “corporate fingerprints”
on the report in terms of image,
objectives, information and budget.
And whether you decide to package
this singular communication as a so-
called traditional report, or a bundled
10-K wrap, why not combine the best
of both?
KNOW YOUR AUDIENCE
Know what motivates your target
readers and build the book around it.
Messaging should be targeted to the
constituencies that you value, whether
institutional investor, individual
stockholder, financial analyst,
employee or other. Because retail
stockbrokers and individual investors
are key targets for traditional reports,
companies interested in reaching
these groups should consider that
format with its greater attention to
explanatory narrative.
Retail Of Note: The November 2006
issue of Better Investing includes the
feature, “Using Annual Reports and
Proxy Statements.” Chairman Ken
Janke urges investors to carefully read
annual reports: “…it’s a document that
contains a great deal of information,
especially for investors looking for
prospective long-term investments.”
THE MESSAGE
Editorial narrative should capitalize
upon limited reader time and
attention. It’s critical to connect,
and to connect with authority. The
lengthening of narrative text within
10-K wraps also speaks to a need to
communicate more completely and
effectively. And in addition to covering
performance and developments, your
report should showcase the original
vision and objectives of your company.
Present narrative that is fresh, direct,
simple and readable. Make use of
strong, unequivocal points. Try to
avoid buzz or popular and therefore
overused jargon. Overall, make your
report “scannable” with creative
devices to break up editorial, such as:
• Varied fonts, styles and sizes
• Heads and subheads
• Graphics
• Management Q&A: Open Dialogue!
• Case studies
• Bullets
• Boxed highlighted text
• Timeline
• Glossary
• Memorable quotations and captions
Instill the shareholder message
with your CEO’s distinctive “voice.”
Ensure that this section clearly covers
the bases in measuring objectives
and performance, and addressing
challenges and forward-looking goals.
And does so in the CEO’s unique style.
Organize the report with a table of
contents and be sure to paginate.
THE BIG PICTURE
The annual report is an integral part
of corporate branding and should
never stand alone. Ensure that any
established corporate theme and
graphic elements are extended to your
annual report.
OUR RECOMMENDATIONS:
Better Investing gives
high marks to companies
providing the following:
• Theme
• Table of Contents
• Corporate Profile
• # of Shareowners
• # of Employees
• Named Investor Contact
• Glossary

13. ANNUAL REPORT
© MWW GROUP, ALL RIGHTS RESERVED 13
SUSTAINABILITY & GOING GREEN
Consider adding a page or sidebar
about corporate responsibility to
your annual report. Investigate
recycled paper (costs and kinds).
Demonstrating that the paper
fiber used in your annual report
is produced in an environmentally
responsible manner conveys good
corporate citizenship.
YOUR REPORT ON-LINE
Post your on-line report to extend the
printed document, not replace it. On
the web people read top down, rather
than left to right. Imagine the user’s
viewing experience in posting and
keep information less than 3 clicks
away. For the on-line report consider
posting a dynamic, easy-to-navigate
(non-PDF) version. And take elements
of your shareholder letter and post
in a separate section of the web site.
You can update this “blog” routinely
with commentary on company news
and developments.
EXTENDING ITS FOOTPRINT
Consider translating your annual
report (print and/or on-line) if you
have a substantial international base.
You can also take key elements of the
report and position that separately
with target audiences via controlled
editorial services. In addition to
providing a window into performance,
activities and objectives, your annual
report can be utilized as a marketing
and sales tool, and for employee
recruitment. Within the report you
can publicize additional opportunities,
such as your company’s DRIP.
BUDGET TIPS
Practical sizing can circumvent
oversized envelopes and excess
postage. Experienced graphic design
firms and printers can guide you in
cost effective annual report sizing.
Also consider bulk or third class
mailing. Have shareholder lists
reviewed to eliminate duplicate
mailings (i.e., dual investor
households). Starting early in the
process (obtaining bids, brainstorming
theme(s), identifying your annual
report “team”) can alleviate rush and
late charges. NIRI reports that the
average annual process takes about 3
to 4 months. Try tackling some of the
advance work in late summer.
We hope this is of value to you in your
annual report planning. Financial
Relations Board is proud to have
worked with companies within
dozens of industries to produce their
annual reports in 2006. These reports
have impact and clearly articulate
management’s vision and record. A
number have garnered awards. We
have the capability to:
• Coordinate entire annual report process,
including production time line, vetting
graphic design firms, working with chosen
graphic designer and writing the report
• Write the complete report including
management letter, starting with a meeting
to identify key message points and themes,
proceeding to a comprehensive outline and
then to polished finished product
• Conduct a strategic review and edit of the
draft annual report.
• Incorporate corporate sustainability feature,
add marketing or other communications
pieces and position on-linePrinting 100,000 annual
reports on FSC-certified
paper equals these
environmental benefits:
Not driving 2,356.66 miles
Allowing 169.68 trees to
remain standing.7

14. SOURCES
1. Better Investing Nicholson Awards Judging Criterion.
2. Thomson Financial Study Jan. 2006.
3. Park Associates 2005 and Forrester Research.
4. ‘Notice and access’ model under proposed rule S7-10-05.
5. Park Associates 2005 and Forrester Research.
6. ‘Notice and access’ model under proposed rule S7-10-05.
7. Mohawk Fine Papers.
FOR MORE INFORMATION, PLEASE CONTACT:
Carreen Winters
Executive Vice President, Corporate Communications Reputation Management
201.964.2410 | cwinters@mww.com
MWW
304 Park Avenue South, 8th Floor
New York, NY 10010
212.704.9727
MWW.COM
EAST RUTHERFORD / CHICAGO / DALLAS / LONDON / LOS ANGELES /
NEW YORK / SAN FRANCISCO / TRENTON / WASHINGTON D.C.