Risk & Compliance

Out of Print? Not Annual Reports

Despite the costs, most companies continue to offer paper versions of their corporate yearbooks.
Joan UrdangNovember 1, 2001

Cost cutting may be rampant throughout Corporate America, but when it comes to producing the annual report, it’s business as usual.

According to an August client survey by Thomson Financial/Carson, 94 percent of respondents say they will release their 2001 annual report in both print and online formats. While most indicate they would like to eliminate, or at least reduce, the cost of mailing and printing the reports, 66 percent of those using both formats say they will print at least as many copies as they did for 2000.

Among the reasons cited for printing annual reports is the belief that Regulation FD requires a hard copy of them. However, Boris Feldman, a securities lawyer in the Palo Alto, Calif., office of Wilson Sonsini Goodrich & Rosati, dispels that notion. “Reg FD recognizes the efficiency of markets,” he says. “The 10-K is filed with the SEC, and that’s all that matters,” not the format of the annual report.

Kara Newman, vice president of strategic research at Thomson, says corporate belt-tightening in the wake of September 11 makes the survey results “more relevant.” Printed annual reports offer companies “one way to talk to investors,” she explains. Hard copies are especially important for international firms, adds Theodore Economou, director of investor relations at ITT Industries Inc., because many of their constituencies may not have easy access to the Internet.

For his part, Scott Greenberg, chief operating officer and president of Curran & Connors Inc., a design firm that specializes in corporate communication and annual reports, has not seen an “appreciable drop-off” in the number of reports companies are printing. That doesn’t surprise him, he says, since an annual report “articulates a company’s value drivers, vision, and strength, in spite of cost cutting.”

Survey: Hard Evidence

Reasons for maintaining current production level of annual reports:

  • Belief that Reg FD requires it
  • Requested by new investors
  • Cross-functional (for example, as a marketing tool)
  • Online versions are difficult to use

Source: Thomson Financial/Carson