Dear ATCO, please keep your annual reports short...because..
"The smaller reports might even be better, if recent company performance is any indication. In an analysis of an index of 100 technology companies, Merrill Lynch & Co. recently found companies whose annual reports filled up less than 300 kilobytes of disk space, about 150 pages of text, outperformed the more verbose companies more than 80 percent of the time."
PS..if you could throw in some of those V.S. pix, that would be nice. It might help keep the share price...up.
Thank you for your consideration,
Best, Savant
=======Annual Reports Bare, Cut to Chase
May 12 12:09pm ET
By Steve James
NEW YORK (Reuters) - Trust Victoria's Secret to cut it down to bare essentials.
Two years after sending an annual report to shareholders that looked more like the lingerie maker's catalog -- lots of sexy photos, samples of lipsticks and perfumes, and a swath of black silk stocking -- the economic downturn forced the company, like many others, into a more modest mailing.
Inside this year's report, Chairman and Chief Executive Leslie Wexner of Intimate Brands Inc. , the parent of Victoria's Secret, said the company expects the economy to be "challenging." So it was tightening up on expenses and asked its designers to come up with a less expensive annual report.
"No sense spending the money on what is, in essence, last year's news," said Wexner, who urged shareholders to go online for the financial information they need.
Though it still includes pictures of its models in bras, panties and the angel wings they wear in the current advertising campaign, this year's Victoria's Secret report is definitely pared-down. And, the company is not alone in cutting down on glossy, feel-good magazines for shareholders, while urging shareholders to go online.
AOL Time Warner , the world's largest media and Internet company -- whose stable includes Time and People magazines, Warner Bros. pictures and CNN -- has a limp 60-page document on thin paper, with no photos. The drab publication is more reminiscent of a stock prospectus than an annual report.
On the back, it tells shareholders to sign up to receive future reports via e-mail and also to submit proxies. "This approach ensures that information gets to you more quickly and conveniently than regular mail," the copy says.
"In addition, sending the documents electronically helps AOL Time Warner reduce printing costs and postage expenses."
ERSTWHILE UMBILICAL CORD
To many shareholders, an annual report dropping into the mail box is the only real contact they have with the company they invest in. But as the world becomes increasingly wired, more companies are cutting down on fancy productions.
And in the federal Securities and Exchange Commission's new push to promote greater openness by companies toward shareholders, firms are encouraged to tell it more like it is, as far as business performance is concerned.
Business consultant Sid Cato, whose Web site (http://www.sidcato.com) rates annual reports, said there are more "down and dirty" annual reports that, in essence, are variants of the 10K documents that companies are required to file with the SEC.
But there is also a trend toward full disclosure, with CEOs being less obscure when it comes to "dire news."
"There's more of that happening," Cato said. "Honesty has improved, because you've got to address the numbers."
But he didn't necessarily agree that because economic times are hard, companies were cutting costs on annual reports.
"There has been a great deal of belt-tightening, but they don't have to be done on the cheap," Cato said.
The average cost per copy of an annual report is only about $2.76, which includes everything from glorified 10K filings to glossy magazines, he told Reuters. "It's not the kind of thing where you're going to go bankrupt producing a report."
He said for many years companies printed an average of 1.9 copies per shareholder, a rate that has dropped to 1.2 per shareholder. "My guess is it's a direct result of the influence of the Internet," said Cato. "Companies don't feel they any longer require such a huge overrun."
COMPANIES URGE ONLINE REPORTS
Kim Freeman, a spokeswoman for Bowne & Co., a New York printer that specializes in financial documents, said the big trend is for more companies to give shareholders the option of reading the company report on-line.
"It's a continuing effect of the SEC's attention to shareholders," she said. "We are finding companies cutting back on (printed) copies." Not just annual reports, but proxies, too.
"This year, lots of companies are actively soliciting shareholder approval to put it online if the SEC allows," she told Reuters.
Leslie Segal, a principal of the design agency Addison, said his company handles annual reports for 40 to 50 top U.S. firms and so far, he has seen little scrimping. "But don't forget they have been in the works for eight to nine months -- before the downturn."
He said a lot of companies were splitting budgets between financial departments that are responsible for filing required financial documents, and the communications departments, which handle public relations and shareholder meetings.
"I see books getting tighter and smaller because of the Web phenomenon. They are getting very succinct, with more candor."
The key to a good annual report, said Cato, is "tell me what happened.
"By all means stress the positives, but I'm gonna find out about it anyway if earnings fall out of bed," he said.
The smaller reports might even be better, if recent company performance is any indication. In an analysis of an index of 100 technology companies, Merrill Lynch & Co. recently found companies whose annual reports filled up less than 300 kilobytes of disk space, about 150 pages of text, outperformed the more verbose companies more than 80 percent of the time.
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