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So you're in charge of the annual report...

If so, or if you are involved in this yearly corporate undertaking in any way, S. D. Warren has published this "book for you. An annual report should do much more for a company than merely fulfill legal requirements. It should play a key role in every company's communications program, "by getting across points that help others understand what the company is and where it is going. So if you are the executive in charge of producing the annual report, this "book will "be of practical use to you. The text describes the "making" of an annual report - determining the tone of the report, deciding on what to feature, the involvement of the chief executive, how to maintain some control of costs. The second major section is a series of pictorial spreads, showing how companies make particular points with their annual reports. We "believe this section is an original contribution and that it will "be of value to all those concerned with the annual report - not only executives and writers "but also designers, printers, photographers and other members of the annual report team.
Contents The Making of a n Annual Report Points You Can Make with Your Annual Report We have alert management We are different t h a n you t h i n k We have a good financial story We are a high-technology company We speak to the problems We make terrific products We provide excellent services We explain how things w o r k We have a promising future We are in key locations We meet the need for n a t u r a l resources We care about our customers We are socially conscious We have top-notch employees Warren's Idea Exchange Page 2 11 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40

The Making of an Annual Report

The modern annual report h a s a split personality. On the one hand, it is a collection of increasingly complex facts and figures, which will leave anyone not an account a n t or a financial analyst scratching his head in bewilderment. On the other hand, it is the single most important document a corporation produces. Usually it is handsome and expensively produced, a book t h a t relies heavily on its "look" to make a favorable impression. Companies often print three or four times as many annual reports as they have shareholders. They use annual reports for everything from customer relations to corporate advocacy. Executives traveling abroad use them as calling cards. Salesmen use t h e m as credentials. Personnel departments use t h e m as recruiting tools. Today's Annual Report Has Two Distinct Parts

In the back half of the report are the financial statements, footnotes and other required material.This section is almost always in the hands of the accountants, lawyers and financial executives. The tone is cautious. Three Key Objectives A n annual report M\ in addition t o J L J L meeting all disclosure requirements should do these things: Clearly identify the comp a n y - in t e r m s of people, products, programs and prospects. Present the company's strengths, those t h a t will enable it to grow and prosper. Meet the specific communications needs of the corporation. Often this means it should help the chief executive get across what's on his mind. This information is of interest not only to stockholders but also to employees, customers and suppliers. It is of interest to college recruits who are asking, "Is this a good company to go to work for?" And to bankers who want to know, "Is this a good company to lend money to?" I n fact, the material is of interest to just about anyone who wants to know more about the company for any reason. The challenge, of course, is to really communicate, to elicit a genuine response from your reader. So t h a t the college student, for example, concludes: "Yes, this is a good company to go to work for."

he best way to understand today's annual report is to t h i n k of it as two totally separate publications wrapped in the same cover. In the front of the report, you have the corporate message. It includes the president's letter, special features, photographs and the review of operations.This section is usually prepared by communications executives with much direct participation by the chief executive himself. The tone is upbeat.

Opinion Research Corporation found that 93% of the financial analysts A s annual reports surveyed consider the \ become increasing- annual report "the most J b J L ly filled with comuseful written communiplex data, the job of comcation" a company promunicating falls to the duces. In fact, analysts graphics. This is how you favor the shareholder make points with your annual report over the annual report today, not more detailed 10-K annuwith endless words but al report. The 10-K, which with pictures - exciting consists of financial photos, large charts, facts and figures, must compelling illustrations. be filed with the SEC 90 And you support the days after the close of the graphics with small fiscal year. amounts of easily One reason the stockscanned text in picture holder annual report is captions, headlines, decks favored is because it still and subheads. permits "free" expresThe pictorial section of sion. While the lawyers this book, beginning on and accountants almost page 11, presents examalways write the 10-Ks ples of how companies and proxy statements, make points with their corporate executives annual reports. write their own messages for annual reports. The Annual Report They interpret informaHas Credibility tion, put things in perspective, voice opinions he annual report is about the future and, sent to many audigenerally, speak their ences because it has credibility. It is minds. signed by the president In recent years, chief of the company, scrutiexecutives have begun to nized by the lawyers, speak out about concerns audited by the accounbeyond their own corpotants and filed with the rate boundaries. The stock exchange and the 1975 General Electric reSecurities and Exchange port had short essays on Commission. various aspects of the Surveys attest to the business environment: importance of the annual capital incentives, govreport. A shareholder ernment growth, energy readership survey by the dependence and AmerGeorgeson Co., a n inica's new role as a "trader vestor relations firm, renation!' Koppers disvealed t h a t 85% of sharecussed the role of "Profits holders spend some time With Honor," and Union on the annual reports Carbide - in a special secthey receive - although tion on "Where Union many of t h e m have comCarbide S t a n d s " - covplaints about the "conered subjects ranging fusing" way annual refrom equal employment ports are written. practices to the environAnnual reports are ment. even more important to financial analysts. The Use Graphics Well to Make Your Points

Philip Morris Incorporated Annual Report 1975

Obviously, then, corporate executives take the annual report seriously. Surveys indicate chief executives spend anywhere from 2 to 80 working hours on the annual report project. They usually get involved with the major graphic decisions as well as the letter - that is, the cover design, choice of illustrations or photos and selection of paper. Investors Are the Most Important Audience hile the annual report goes to many people for many reasons, its single most important mission is to inform stockholders and potential investors about the company. And, since investors are far more interested in the future t h a n in the past, many companies include information that will help investors predict the company's future direction. Sometimes this information is a straightforward statement of the expectation of increased earnings. Transcontinental Oil said on its 1975 annual report cover: "Our financial performance during 1976 should be even better." More often, companies are taking more searching looks into the future. United Technologies Corporation, for example, carried its business view into the year 2000, outlining in a two-page pictograph the various research and development projects the company's scientists and engineers are working on.

How to Determine Your Corporate Strengths ost commonly, companies discuss the future in terms of strengths. To identify your company's strengths, ask yourself: "What are the four or five things my company h a s going for itself that will enable it to compete and grow in the future?" One year when St. Joe Minerals asked this question in preparing for its annual report, it came up with: We have mineral reserves in t h e ground for 30 to 40 years. We have recently diversified into oil and gas. We have efficient mines and smelters. We have excellent operating management. The company t h e n went on to graphically present these points with: a cover photo of an oil rig at sea; charts showing sales and profits broken out by product line; talking headlines emphasizing ore, oil and gas reserves; and a series of large photos of mines and processing plants, with operating managers in the foregrounds. Sometimes it's import a n t to address a negative point or a misconception. For years Scovill wrestled with the problem that many investors thought of the company as a brass mill, even though it had diversified widely into housewares and consumer products. Finally, the company's designer hit upon an innovative solution. The center spread was de-

signed as a pop-up of the type found in children's books. When the reader opened the report, up popped a cardboard house filled with housewares, to demonstrate once and for all t h a t Scovill is a lot more t h a n a brass mill. Highlight Your Company's Individuality

Ten Year Growth

An annual report cover should be a poster, getting its point across quickly. For most companies, the most important point to make is growth. 1. OnPepsico's 1975 cover the company's logo serves as the upward curve on a 10-year scale. 3. Philip Morris 1975 uses three soaring swaths of bright color tied to legends inside. 3. For Tracor's 1975 report, one of its electronic products is the background for a five-year bar chart.

proper goal for any annual report is to convey a look of individuality for the company it represents. Students and foreign visitors who have studied American corporations first h a n d r e m a r k how different one company is from another. The general public, on the other hand, tends to lump businesses together. Unfortunately, many annual reports, because of their look-alike quality, help perpetuate the stereotype t h a t all business is the same. Most chief executives, w h e n asked, express strong views on what they want from their annual report. A 1975 Corporate Communications Report survey answered by 217 company heads revealed that 75% of t h e m wanted to put across one or more of the following five points. They want to give the impression t h a t their company is: Growing Sound and stable
Progressive

Well-managed Profitable. Or, as one chief executive put it: "I w a n t us to come across as a good company, a good place to work, a good stock to buy."

Annual Reports Are Changing n recent years, annual reports have changed drastically. The decade of the 1960s was a magical period for stockholders, growth companies and annual reports - which often talked "futures" and forgot about facts. No matter that current "business wasn't so good: If you had a great concept, and if you could present it convincingly in your annual report, why, your stock just might soar. Accounting rules were relatively lax in those days and footnotes didn't amount to much. Moreover, designers had the habit, with the tacit approval of the companies, of reducing the type size of the footnotes so they could save space or r u n more photographs. Then in 1969 this unreal - if often pleasant world collapsed. The stock market plunged. And the companies with the most flamboyant annual reports seemed to be hit the hardest. Out of the wreckage emerged a "whole new attitude: Companies were gun shy; investors were disillusioned; accountants were concerned; and the SEC was aroused. Since 1969 a continual stream of disclosure requirements has cascaded down on companies, introduced either by the SEC or by the accounting profession. The typical size of an annual report h a s swollen from 24 pages to 38 pages, and many re-

ports are much larger. Occidental Petroleum's 1974 annual report was 96 pages plus cover and weighed nearly a pound. When the SEC J u m p e d In ost reports added pages as a direct result of new SEC disclosure rules t h a t became effective with 1974's crop. Previously the agency had let the stock exchanges set standards for stockholder annual reports. The SEC rules touched 9,000 companies and required, among other things, a management analysis. This section of text, which continues t o cause confusion, is supposed to discuss all "material financial changes, favorable or unfavorable" t h a t have affected the income statement for t h e last five years. Financial executives and account a n t s have tended to fulfill the requirement with a highly technical presentation, which makes for dull reading and often confuses readers. Meanwhile, SEC spokesmen have said t h a t what they really want is a simple, easy-tounderstand commentary. To quote the commission's chief accountant: "We want you to tell the shareholder, the average shareholder, in words he understands what is most important in understanding the progression of the business from one year to the next."

Realities of Today's Annual Reports ne of the realities of today's a n n u a l reports is t h a t most of the new material, despite the SEC's good intentions, is presented in a way t h a t is beyond the comprehension of the unsophisticated shareholder This material is difficult to grasp, first, because it is mostly written by accountants and lawyers, and, second, because it is in fact highly complicated. Such material tends to scare readers off, making pictures, charts and other graphic presentations more important t h a n ever. A second reality is t h a t it's getting harder and harder for the account a n t s to put the numbers and notes together because of the increasingly complex regulations. And they are delivering later and later. This, in turn, is placing extraordinary pressure on designers, typesetters and printers. This leads to the t h i r d r e a l i t y - annual reports cost more t h a n they used to. I n part, this is because there are more pages, but mostly it is because there is more haste and much more waste, in terms of last-minute changes, additional typesetting and crash printing schedules. A final reality is t h a t some corporations are focusing more and more on simplifying the whole publication process, sometimes at the expense of innovative graphic design. It isn't t h a t companies don't

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What 1975 Brought: .... The fifth consecutive year of improved earnings ....the first -l-biilion sales year ....a rise in return on shareholders'equity. What 1975 Demonstrated: .... The ability to produce consistent earnings growth in a slowed economy .... the worth of product diversification through coherent expansion as a buffer against economic vagaries.

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Other companies tell the growth story in the simplest, most straightforward way- with words. 1. S covill did it in handwriting, covering 1973's financial highlights. 2. Koppers summarized the results that 1975 brought and told what the year demonstrated about the company's strengths. 3. Harsco in three sentences established an identity and told its 1975 results story.

want excellent design. It's just that they are overcome "by the urgent problems of getting t h e job out on time. The Important First Step - Planning

o develop a n annual report plan you need input. Review last year's annual report project with your designer and printer to determine what went right and what went wrong. Talk to people outside your company who are in a position to provide a useful perspective on what should be in the report, such as security analysts and bankers. Talk to your own top management, including financial executives who can tell you how many pages you'll need for notes and financial statements.

Most important, talk to the chief executive. If possible, include your designer in this key discussion. Be sure to ask: "Are there any misconceptions about the company t h a t the annual report can help set straight?" Most chief executives can cite at least one misconception that really irks them. It will help you focus the report if you also ask: "What are the two or three most important points you'd like to make in this year's annual report?" Wow you can prepare the plan. The purpose of the plan is to spell out objectives and to indicate the t h r u s t of the report in both words and pictures. The plan should also provide a page-by-

page breakdown of the entire report. If the objective, for example, is to demonstrate your company's marketing savvy, the response might be to include a series of photographs t h a t show your key sales people posed in front of major plants and systems your company has recently sold. This is what Combustion Engineering did in a recent report. If the objective is to present your company's important but generally unrecognized expansion into the wine business, t h e n the response might be a special feature article on wine, illustrated with lavish photos and written by a noted authority. This is what The Seagram Company Ltd. did. If the objective is to signal a business turnaround, the response might be to put the words "Profile of a Changing Company" on the cover and include a special dialogue in which the new president discusses how the company has changed. U.S. Industries took this approach. Even if you expect to have a simple annual report with no special features, you should still construct a plan and put it into writing. With annual reports becoming increasingly complex, it is important that you itemize what goes on each page. Every year some company gets down to the wire before its executives realize to

Plan Annual and Quarterly Reports Together J u s t as planning is the important first step in your annual report, so it is necessary to your entire corporate communications program. Quarterly reports are gaining rapidly in importance to that program. Make your quarterlies - which offer great potential for effective communication to a variety of audiences reinforce and amplify key points made in your annual report. The quarterly report was once described as "the last great frontier" of corporate disclosure. In 1975, the SEC moved across that frontier, issuing rules t h a t substantially expanded material corporations must disclose each quarter. The new regulations called for expanding the 10-Q form filed with the government. The 10-Q need not be sent to stockholders. But SEC officials made it clear they expected corporations to send more information about their quarterly results to their stockholders. And, in fact, many companies had already begun expanding the stockholder quarterly well before the SEC entered the picture. General Electric launched a pioneering effort in 1969 w h e n it, in effect, divided its annual report into four quarterly magazines. Other companies followed GE into quarterly magazines. But the domin a n t trend is to a newsletter format. A newsletter is inexpensive, does not require a large staff and can be produced quickly. Several factors are behind this expansion. The companies want: To make it easier for Wall Street analysts. Since the shakeout on Wall Street in the early 1970s, there have been fewer analysts covering fewer companies. So some companies decided to take the initiative in providing timely and relevant information. To appeal to individual stockholders. Special "shareholder information" sections give such information as the recent stock price, dividend yield and payment dates, price/ earnings ratio, etc. Companies also use shareholder quarterly reports to promote dividend reinvestment plans. Detailed quarterlies tend to ease anxiety during periods of business uncertainty. This is one reason more companies send their quarterlies to employees as well as stockholders. To do a proper job, of course, the quarterly report must have fresh information and be published quickly. A 1975 Georgeson survey found that individual investors were concerned about timeliness above all; many felt they weren't getting information as fast as institutional investors. The increased emphasis on quarterly reports is not likely to diminish the importance of the annual report. The two serve differing functions, though they go to the same audiences.

their chagrin t h a t they are a page short. When the plan is written, show it to the chief executive first. After he h a s approved it, show it to other members of top management. Knowledge that the top m a n h a s given his approval usually deters other executives from adding their own, often conflicting, ideas. If you don't obtain early approval from the chief executive, you r u n t h e risk of surprising him late in the game. This can lead to expensive, lastminute revisions. Give Your Designer Clear Goals ith the plan approved, you are now in a position to give your designer clear goals. Many companies rely on their graphic designer not only for creative help but also for handling the day-to-day details of project management. These include dealing with the other suppliers, including the printer, typographer and photographers. Designers usually prepare the mechanicals, or camera-ready art, which also go under the name of keylines. The mechanicals are furnished to the printer, who photographs them. From the film, the printer first makes a blueprint (also called a blueline, brownline, silverprint, saltprint or Van Dyke ). When the blueprint is approved, he prepares the printing plates. The designer usually specifies the paper and provides samples so

the company can make a final decision. In creating an annual report, a designer has several elements to work with: format, type, paper, color and art, which includes photos, illustrations, charts and maps. One of the first things a designer usually does is establish the format, which might be as simple as a large picture on each right-hand page and two columns of type on each left-hand page. Or it might be as complicated as a 12-unit grid that divides each page into twelve 2-1/2-squareinch modules. Annual reports with consistent formats tend to look orderly and modern. In some cases, an imaginative format can set up a certain visual tension between the words and pictures t h a t sparks excitement. On the other hand, a designer may deliberately break the format to achieve a magazinelike change of pace. The Importance of Type ype is an extremely important element in a n annual report, although many readers are not even aware of its subtle influence. But if type is badly used, the effect may be to leave the report looking somehow crude or old-fashioned. If type is used well, it will bring a harmony and finish to the report. Size of type in annual reports is also important, because it is a matter that concerns the SEC.

Three items must be considered in setting type size: 1) Footnotes must be set in modern type as large and legible as 10 point. In practice, 9 point Helvetica and other large faces have met the SEC requirements. 2) Tables must be set in type no smaller t h a n 8 point. 3) A question t h a t has created some confusion is the size of tables in footnotes. In practice these tables have also been set in 8 point type. Another factor to determine is the size of the annual report. Most reports are 8-1/2 x 11 inches. And there are several good reasons for designing your book within a half inch of these dimensions. If it is much larger it cannot be easily filed by people such as analysts. A second advantage is t h a t if a crisis arises and a new supply of paper is needed immediately, paper is almost always available in this size. Make Your Format Flexible hese days it is essential t h a t you design an annual report with flexibility. First, new accounting footnotes, of uncertain lengths, are being added, frequently late in the annual report process. Secondly, there is much more last-minute negotiating between company accountants and the SEC over "what must be included. One major company's report was stopped on press three times in 1975.

Thirdly, because of the generally nervous state of economic conditions, a company might decide to make a major change at the last minute. As did a top New York international bank when it took out a central feature section that no longer seemed appropriate. Two techniques can be of great help in building in flexibility. First, arrange to r u n text copy in the front of the book so that it carries over from spread to spread or page to page within a section. In this way you are not locked into writing to fit specific pages and adding paragraphs at the last minute will be easier. Second, allow for "swing" pages - pages for which no type or illustration is planned. For example, in your original design include a title page for the financial section. Then if you get squeezed later you can eliminate the title page and use the space for expanded footnotes or other material. For the same reason, many designers leave the inside covers b l a n k - j u s t in case they need more space at the last minute. How to Select the Right Paper

apers are selected for two basic reasons: to function as a n integral part of the design or to allow for the highest quality of printing. Papers selected as an integral part of the design are chosen for the intrin-

sic values they offer color, texture, bulk, a look or feel. These papers usually are uncoated text papers, and they come in many colors, including tans, blues, greens and whites. These papers have a soft, nonreflective surface and provide more bulk (thickness) t h a n coated papers of comparable weight. Text papers also come in a wide variety of rough and smooth textures. But relatively few annual reports contain only text paper, because of its inability to reproduce photographs with fullest clarity. Papers used to insure the highest quality of printing are those that supply maximum fidelity and accuracy in the reproduction of photographs, illustrations and art. These papers are coated papers. They are white or cream and have gloss or dull finishes. Coated papers provide excellent "ink holdout," which means the colored printing inks don't soak into the paper; they remain on the surface at maximum intensity. To obtain the brightest pictures, use a "gloss" coated paper, which reflects the most light. A highly reflective surface makes reading somewhat difficult, however. And consequently many executives in charge of annual reports select a dull coated paper. They sacrifice a small amount of picture brightness in r e t u r n for greater readability. A third type of paper is a n embossed coated paper. This type can be used

if you want readability, texture and bulk to go along with good picture reproduction. Some annual reports contain both a coated stock in the front for photographic reproduction and a text stock for readability in the financial section. The weight of a paper has an important effect on the finished annual report. A heavier paper gives a report a kind of heft, or solid feeling, that subtly projects a feeling of "class!' A heavy or midweight paper also prevents "show through" the annoying experience of seeing through a page to the charts, photos and even words on the other side. But with higher postage rates, there are valid economic reasons to use somewhat lighter papers. And as annual reports add pages, many companies are shifting to midweight papers in order to retain a solid feeling for the report. Indeed, companies instinctively avoid using papers so light they would give a flimsy feeling to a report. "Whenyou give someone a n annual report" explains one executive, "it's sort of like shaking hands. And you want to project a firm handshake!' Before making a final paper choice, always ask your designer for paper dummies. Hold the various choices in your hands to determine which one feels right for you.

Most Companies Choose Color Photos

hould the photographs in your annual report be in color or in black-andwhite? Based on current practice, the answer is simple. Almost all major companies use color pictures in their annual reports, and they use color consistently, from year to year, in good times and bad. Corporate Annual Reports, Inc. surveyed 424 annual reports issued by Fortune 500 members in 1975.The results: 318, color only; 68, black-andwhite only; 7, color and black-and-white; 38, no photographs. Thus, color in annual reports today is neither a luxury nor an excess; it is the norm. But for a company with serious earnings problems and a bleak future, a black-and-white report might be a necessary choice. For small companies t h a t produce relatively few annual reports, it is also appropriate to print a black-and-white annual report. Even so, many small companies choose color, because they use their reports for a variety of purposes and want the extra impact of color. The annual report maybe the only corporate communications document a small company produces. Surveys confirm the value of color. General Electric found t h a t stockholders are much more likely to read all the way through an annual report with color photos. Illustrations, maps and charts all benefit from the use of color.

Manufacturers Hanover Corporation Annual Report 1975

More examples of the growth story, as told in charts. 1. AMAX's 1975 cover featured a three-dimensional chart of capital expenditures superimposed on a U.S. map to illustrate its "Capital Commitment:USA:' 2. Manufacturers Hanover implies growth in a graphic pattern carried through the entire 1975 report. 3. Telecor 1975's five-bar chart on the cover was repeated inside the book in color over black-and-white photographs.

Charts Increase in Importance

harts, graphs and maps have all assumed greater importance as annual reports have "become more complex.The SEC, in fact, encourages companies to include in their annual reports "tables, schedules, charts and graphic illustrations to present financial information in an understandable manner." The key to effective charts and graphs is to keep them simple. A chart should be used to tell only one story, to make only one point. And it is usually better to have one large chart that makes a strong point t h a n to include many small charts and scatter the impact. Normally a graphic designer will instinctively avoid complexity. But sometimes he is pushed into it, by an engineer who demands more information in a diagram t h a n is necessary or by a financial executive who insists on combining two or three simple charts into one complex chart. Draw Up a Budget

Photography and other illustrations Black-and-white or color printing Mailing and distribution. Paper is one place where it pays to go first class. Relative to the entire job, the cost differential is small between using a top-quality paper and one of lesser quality. How to Control Costs he budget is only an outline, however, giving basic or estimated costs. The keys to keeping close to the budget are careful advance planning and scheduling, and early decisions on any corrections or changes. There are three major stages where costs mount unnecessarily: When changes are made in the text after it has been initially typeset. When changes are made on the mechanicals after they have been pasted down. When changes are made after the job has been sent to the printer. Changes cost more at each succeeding stage. Retouching a photo to eliminate a blemish on the chairman's face might cost $50 when the photo is a glossy print; the same change could cost $650 after the color separations have been made and as much as $2,000 just before printing. Changes in the text, called author's alterations or AAs, can double or even triple the basic typesetting charge. In some cases changes are unavoidable, particularly in financials. In most

cases they are the result of inadequate clearance of copy in manuscript form or the failure of executives to concentrate on first galleys of type. Even more costly are changes at the printer. If a book misses its press deadline, costs soar. The many steps required to correct printing plates are paid for at premium rates; moreover, the only time left to print your report may be on the weekend at overtime rates. Many of these problems can be prevented if the executive in charge of the annual report gets signed approvals from the other executives involved in the project at key stages - preferably on the first or second proofs. The Production Process roducing an annual report is as complex as publishing a magazine. But few corporate executives have published a magazine, so this departure from the daily routine presents additional difficulties for the person placed in charge of the project. That the annual report is a sensitive corporate document that must be produced under a restricted time schedule further complicates this task. The production process has four stages: Planning - discussing themes and objectives. Assembling- gathering illustrations and written material. Review and approval management passes on the pictures and layout.

nce the format and overall design plan are established, along with a page-by-page breakdown of the layout, a preliminary budget should be drawn up. For this preliminary budget, you must determine: Quantity Number of pages Type of paper Basic typesetting costs

Production countdown - from release of financial data to delivery of the printed report. Many well-organized companies spend seven or eight months going through these stages. More typically, six months is allotted. But whether the pace is leisurely or crash, the critical problem is the same - keeping all involved parties on schedule. This includes the designer, who should be in on discussions of the project from the beginning. It's one thing to have a schedule, and quite another to get all the parties involved in the annual report to agree to meet their deadlines. A problem in larger companies is that different executives may be in charge of the front and back parts of the book. They may not even be working against the same schedule. It is essential that each annual report have a single coordinator within the company, and that he bring all parties involved in the report project together at an early stage. In addition to the designer and printer, the team includes the financial, legal and communications executives and the outside accountant. Each party must acknowledge his responsibilities and accept his deadlines. We have already discussed at length building the annual report plan. Now we are essentially at the assembling stage, bringing together the illustrations and written material. One of the most important aspects of this stage is obtaining the photography.

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And growth, can also "be implied graphically without charts. 1. Northrop in 1975 used the upward thrust of its new Navy Combat Fighter, the F-18, in stroboscopic photos. 2. Upjohn 1975 illustrates its "commitment to growth" through a photograph of a research facility under construction. 3 . Pittston 1975 points up the comeback of the onetime energy king, coal, in shades ranging from deep charcoal through greys to white.

How to Work with a Photographer or most annual reports, photography is the most important graphic element. According to surveys, it is also the second greatest frustration facing those who coordinate annual reports. (The first: obtaining executive clearances.) As a rule, you can obtain the best results when you work with one photographer for all or most of the annual report assignment. And it is important to establish a financial understanding with the photographer at the outset. Many companies have their designers negotiate with the photographer. Photographers usually charge on a daily rate basis. Fees generally range from $200 to $1,000, depending on the individual photographer's experience and reputation. Clients also pay all out-ofpocket expenses, including film, film processing and travel expenses. Additional payment for the use of assistants and models, for half-day assignments, for last-minute cancellations, for travel time and for the use of the photos in advertisements should also be settled in advance. Some companies prefer to negotiate a package deal. The photographer, in return for a somewhat higher fee, absorbs all out-of-pocket costs. The company has a firm, budgetable figure. In either case, it is important for the company to prepare the ground in advance, so that when

the photographer arrives at a manufacturing plant or other site his time will not be wasted looking for people to help him or give him approval to shoot. Suggestions on How to Write the Report

torial content of the letter and the operations review. Getting Clearances Is a Big Problem he second stage in the writing process is obtaining clearance from executives. The clearance process differs in each company, but there are a few general rules: Circulate text for clearances only to those operating executives directly responsible for that particular area. Obtain signed approvals before setting text into type if possible. Ask executives to confine their remarks to areas of their expertise. An easy way to avoid arguments over style and grammar is to develop a company "style guide" at the project's outset. It should cover capitalization, punctuation, use of numerals, dollar and cent signs, percentage signs, abbreviations. Such a guide can serve as a style arbiter, saving numerous last-minute and usually unnecess a r y - changes, many of which relate to style inconsistencies.

ompany traditions for writing the text of the annual report vary widely. Often divisions jealously guard their prerogatives in writing the various sections. But whether the work is parceled out among departments or centralized in one or two people, writing is usually in two stages: interviewing and writing the first draft; and obtaining clearance and rewriting. Early in the project's schedule the person in charge of the annual report project should contact not only the chief operating officer but also chiefs of operating divisions to obtain answers to basic questions, such as: How did your division do this year in terms of sales and profits? What were the major reasons behind this performance? What new products were brought out this year? Next year? What new capital investment projects were completed or are underway? What economic or social trends are affecting your business? What is your outlook for the year ahead? What problems do you face? Answers to these and other questions will provide the meat of the edi-

Presenting the Dummy for Approval About two months JUL before publicaJ L J L tion, the project reaches the critical point of review of the layout spreads or the dummy by top management. The dummy contains photographs and other illustrations and shows how the book lays out on a page-by-page basis. In preparing for this review,

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We have alert management

When security analysts and other professional investors are asked to name the single most important criterion on which they base investment decisions, invariably they reply: "Management!' The presentation of management, preferably in a working environment, is one of the most popular photo themes for annual reports. It's also a way for a chief executive to "toss a bouquet" to his key managers. But if you go this route, don't forget anyone. 1. The photos in the American Express 1975 report do double duty. The company's distinguished-looking executives are pictured in cities around the world, thus imparting a global flavor as well as the image of competence. 2. United California Bank attains a "non-bahkish" look by showing its management team in working situations in its 1973 book. 3. Getty Oil's 1975 report puts its point across with a full-page black-and-white photo of the manager and models relating to his work with small color inset photos of the actual job sites. 4. InDeanWitter's 1975 report, full-page photographs of executives at ease brought a bit of warmth to the traditionally formal image of investment banking. 5. B org-Warner with a dramatic cover photograph featured its strong emphasis on internal financial management, especially during "a lean year," 1975. 6. Western Bancorporation in 1971 used an unusual cut-out photo treatment, separating the individual from the background. 7. Signal illustrated its engineering capabilities by superimposing engineering designs over photographs of the top people in each division in the 1973 report. 12

American Express lawyers provide on-the-scene assistance to management as the Company and its subsidiaries expand their presence around the world.

It is apparent that electronic funds transfer systems will play a substantial role in financial transactions of the future. The Company's new subsidiary, Payment Systems, Inc., enhances the ability of American Express Company to explore and participate in this new technology.

q u i c k l y a n d effectively to c h a n g i n g c u s t o m e r n e e d s . O f all UCB'S c o r p o r a t e b a n k i n g a c t i v i t i e s , in f a c t , n o n e is w i d e r r a n g i n g , m o r e specialized, or m o r e customerresponsive.

U C B ' S w o r l d w i d e n e t w o r k of b a n k s i n c l u d e s b r a n c h e s in L o n d o n , Tokyo and Nassau, along with a s u b s i d i a r y in B r u s s e l s a n d a f f i l i a t e s a n d c o r r e s p o n d e n t b a n k s in k e y c i t i e s a n d c e n t e r s of c o m m e r c e .

E d g e A c t s u b s i d i a r y in N e w Y o r k City, United California Bank Intern a t i o n a l , w h i c h is s t a f f e d t o h a n d l e a full r a n g e of i n t e r n a t i o n a l b a n k i n g s e r v i c e s , UCB is i n c r e a s i n g l y a c t i v e in a s s i s t i n g m u l t i n a t i o n a l

c o r p o r a t i o n s in a r r a n g i n g E u r o c u r r e n c y credit facilities a n d t r a n s a c t s a l a r g e v o l u m e of b u s i n e s s under the Foreign Credit Insurance Association and Export-Import B a n k p r o g r a m s , UCBI is a l s o n o t e d

e x c h a n g e t r a d i n g o p e r a t i o n s . In o r d e r to c o m p l e m e n t t h e s e a c t i v i t i e s a n d a u g m e n t t h o s e of UCB London's Eurotrading, a new Eurodollar t r a d i n g unit w a s f o r m e d to w o r k w i t h UCB N a s s a u .

UCB c o n t i n u e s t o b r o a d e n i t s access to k e y i n t e r n a t i o n a l m a r k e t s . T h e b a n k is a m a j o r p a r t i c i p a n t i n a n e w f i n a n c e c o m p a n y in H o n g K o n g k n o w n as W e s t e r n I n t e r national Capital Limited (wic),

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s in t h e A s i a - P a c i f i c . M o r e o v e r , Urn's FntprnaHr ltly opened a Banking Grc p r e s e n t a t i v e office in T a i p e i , a i w a n , w h i c h is e x p e c t e d t o b e inverted to a b r a n c h d u r i n g 1 9 7 4 ; j u b l e d its c a p i t a l r e s o u r c e i n v e s t e n t s in A u s t r a l i a ; is f u r t h e r c p a n d i n g its f o r e i g n e x c h a n g e Kid al E d g e A c t s u b s i d w representat offic

nal

I n t e r n a t i o n a l B a n k i n g G r o u p is anything but an organizational e n t i t y u n t o itself. T o t h e c o n t r a : the b a n k ' s international service! are d e s i g n e d to c o m p l e m e n t oth c o r p o r a t e b a n k i n g activitie UCB'S i n t e r n a t i o n a l e x p e r t s c l o s e l y w i t h s p e c i a l i s t s in t H e a d q u a r t e r e d in t h e

d a i l y c o n t a c t w i t h all l e v e l s of UCB management, thus enhancing communications and decision-making capabilities. T h e W e s t C o a s t locating where

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providing major new trade opport u n i t i e s for U . S . c o m p a n i e s . C a l ifornia has long b e e n k n o w n as

Financial Institutions

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on the needs of varied and soph.,

sizes and descriptions. Stock brokers saving and loan associations, insurance companies and other banks, as important examples, are effectively served by UCB corporate bankers financial instittdions. In each case, th customer need deal with but a single UCB decision-maker-a skilled and experienced banking officer. He has , , , vidual customer , ' 1 , ' , 1 meet nd needs. Among thos

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all financial institutions. Among the leading financial institu tions served by UCB is E. F. Mutton Inc. a full service investment banking, and brokerage firm. Shown in large photo are E. Joe Kelley, vice president and Loan'and Service Department, and E. F. Mutton president Robert M. Foman lonc.-hnpha-oisvr.F.riu.tu-nsnew

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We are different than you think

Companies are continually changing. This often frustrates company executives, who find that the public's perception of their company lags behind the reality 1. If you have a name like The Coca-Cola Bottling Company of New York and you happen to be a large producer of table wine, the problem is a stickler. So you announce "We are more t h a n our name implies" and picture a corkscrew along with a pair of Coke bottle caps on your 1973 cover. Z. A veteran maker of spirits, The Seagram Company Ltd., also faced an identity problem when it moved into oil and gas operations. So its 1975 cover featured not only the ingredients and tools of distilling but also of oil drilling.

The Coca-Cola Bottling Company of New York, Inc. 1973 Annual Report \*e are more than our name implies.

14

"When I joined the Company, American Can simply meant the best in cans. But today it has developed into an international business with consumer products, chemicals and wasterecovery products as well as far more diversified containers and packaging."

3 . Scovill, once known primarily for its brass mill products, dramatized its shift into housewares in 1971 with a pop-up centerfold of a house and all the things Scovill makes that go into it. 4 and 5. In a slightly whimsical approach, the General Cigar Co. (now the Culbro Corporation) telegraphed a name change on its 1975 cover, and then presented its diversity in a series of bright color spreads displaying its snack foods and other nontobacco products. 6. And American Can Company, on its 75th anniversary in 1975, enlisted a 75year-old retired employee to contrast the company's present diversification with its past concentration on cans.

We have a good financial story

As financial disclosure hecomes more complicated, charts as a means of simplifying financial information hecome more important. Remember: Usually a large chart makes a stronger point t h a n several small charts. 1. The Olin Corporation had a good story to tell in 1975 and told it on the cover increased earnings each quarter over the comparahle quarter of the previous year for five straight years. 2. United California Bank featured a series of dramatic four-color charts against a hlack "background in 1975.

The Major Factors Which:

Increased 1974 Earnings From 1973

Decreased 1974 Ea nings From 1973

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Five Y e o r i ifl R e v i e w (fiscal years ending June 30)

Contributions to Net Worth 1972-1975

How AZCON'S Pre.

1971 1973

c decision to get out of unprofitable zinc business. Write-downs and :s total $25.2 million, bringing cumulative total of losses to (35 :on, which can potentially be applied against future taxable profits. loss: (25.2 million; Net worth: $1.5 million. Name changed to AZCON Corporation. First acquisitionsa producer of mobile drilling rigs and a steel distributor specializing in carbon steel products. Income from continuing operations: $142,000; Net loss: $390,000; Net worth: $1.3 million, starting point for chart on facing page. AZCON makes further advance into metals distribution business, buying another company specializing in carbon steel. Rights issue raises additional $10million inequity. ; operations: $1.8 million; Net income: $4.4million

1974 1975
5

AZCON makes its large:,! acquisition in distribution field, increasing warehouses to 14 and expanding into higher-value alloy and stainless steel and nonferrous metals. s $v.2miliion;Netincome:

At start of fiscal 1975, AZCON buys integrated steel manufacturer and initiates major expansion program. Develops plans fordirect reduction plant to provide feed for steel production. Begins further investigation of additional mill capacity. Dividend payments start aga first time since 1967.

3. Aristar conveyed complex financial information in 1973 with simple hut interestingly shaped threedimensional charts.

4. Scott Paper Company in 1974 explained the factors that contributed to income and those that took away from income in a full-page three-dimensional chart. 5. AZCOH" told its extraordi-

n a r y growth story in its 1975 report with a dramatic chart and hold type presentation. 6. Financial Federation featured a 17 x 22-inch center spread foldout with giant charts in 1975.

We are a high-technology company

In the past two decades most high-growth companies have also been hightechnology companies. Technological strength can be communicated visually in many ways. One of the favored techniques is closeup photography. 1. VSI Corporation, which makes mold bases for the plastics industry, in 1974 underscored its technology by using an engineering drawing to overlay a closeup photograph that shows the milling tool markings on a pre-machined pocket of a special mold base. 2. The Sybron Corporation emphasized its process control leadership in a sevenpage special section of its 1975 report. The message was carried boldly in large type on the section's opening page, which also carried a series of photos to convey the story. 3 . Bristol-Myers uses a striking photomicrograph of an antibiotic at work to call attention to a 15-page special report on antibiotics within its 1975 annual report. The effect was to highlight the company's commitment to basic medical research. 4 . 5 and 6. Three consecutive years of Martin Processing annual report covers (1973,1974, 1 9 7 5 ) s h o w how the use of close-up photography can sustain a feeling of high technology even though the subjects of these photographs are fairly mundane - the needles of a carpet tufting machine, a strand of yarn, a drop of wine on a carpet. 7. I n its 1972 report, Wallace Murray illustrates how one technological development leads to another with the photo story of a new, exceptionally hard grinding wheel to machine the harder, tougher alloy steels that have replaced older metals. A striking close-up photo of the wheel at work and brief, punchy text tell the story 18 quickly.

Tooling for Plastics

the desired shape It is then cooled and ejeciedtromihemoidasafinished plastic part. The meld itself ccnsisls of two majpr systems: (1|the molO base and (2) the r el of the plastic f prpduces or inserts into the base. The injeclion molding prpcess captures about 30% of Ihe plastics processing business now. and growing at a faster rate than that pf the plastics industry as a whole D-M-E Company, e VSI divisien, precision tooling, including accessoihings. Together

Mold bases weigh anywhere from a few ppunds tp several thousand pounds. To prodi inilial machining ot heavy plate steel cutting, gtinding installed at a ccst of of time. The pretinished plates shippedtemanufacturing plants the Uniled Slates for sp then assembly and VSI is optimistic; lulure. The Company

vsi's concept of standardized mold bases, precision tooling and accessories for the plastics industry gained wider-than-everacceptance during fiscal 1974. World-wide sales rose t e % to S45.6 million. VSI enjoys a leading position in this growing industry. In turn, fhe tooling business provides the largest sales volume of the tour product groups. Plastics are sought for an everwidening'range of prpducts because lightweight, durable and extremely versatile. Plestics material consumplipn is rising at an 11.2% compounded rate per year, according to Ihe Stanford Research institute. plasticproducts. Resins can be molded by injection, transfer or compression. The principal processisinjection molding. Mdlten plastic material is "injecteO"byan injection molding machine into a steel mold where it takes

States la: 20.000 of them. Sales of moid b; closely related to 1 anO redesigned pit ic products: s are partially fled td lie material used. Standardized, preengineered, proprietary producls b represents si customer specified m

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1971 26,286 33% 2.004 36%

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ftooess C-bnttoL.a new, changing cecru^cgy-Whatever the ir^LSpickxis be^iiining of pixxBvs control, it is now one of the rrxst sophisticated teciiixJogics yet developed and offers growth oppordjnities nwchecl by few kisinesses Its obvious that die rew-ards will go to those ronpanies ihathaveasoDrig.woiidw : in jgica] base.

19

We speak to the problems

Everybody in business faces problems, although corporate executives are sometimes reluctant to admit them. In fact, one of the best ways to develop credibility is to discuss candidly the problems and issues you face. 1 and 3 . Marcor did so in a n unusual annual report presentation in 1975. The chief executive officers of Marcor's two divisions - Montgomery Ward and Container Corporation- visited college campuses where they discussed their business problems and prospects as well as broader economic and social issues face-toface with students. The annual report published transcripts of these sessions.

Container Corporation operations discussed with Northwestern University graduate students by Chief Executive Officer Henry G. Van der Eb
wn.->tc- ill. addinc; irfjscrcoy ood furnish. The Fernandrna i n g a nd d i siribut ion proble ms of materials by approxir iOivsouimanycusWiners, w e have 92 ^ i i v e s throughout ihe United States, ir eluding papertx ck collection and processing

nSan Felipe. Veneia.andBarranqu,r;,.G;l;;<-;: produce packaging material

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3 . Leeds & Northrup effectively used a black-framed photograph of stormy seas on three covers to put across its theme that economic cross-currents were causing stormy weather for many companies.

4. Ansul looked at the problems and opportunities of the future in. a series of executive interviews dubbed "The Ansul Tapes"

Answers from Arctic Management,

In recent i > time company"

market conditions have caused us to hold back some expansion plans fw Silverline, but the present situation is one we can

Obviously, our withdrawal from the lawn' tittd garden market has plated even mote importance on our primary business snowmobiles. We're basically a snowmobile company, but Silverline b-oats continue to complement our snowmobiles as a summer product, What categorises Arctic today more than its products, however, is the attitude of its people. We're realistic about conditions in .our industry and the challenge we face in the year ahead and above all, we're trying very hard to be responsive to our customers, out distributors and dealers, to our employees, and to our shareholders. We're not just coping, with the excess capacity problems created by the shake-out in the snowmobile industry and bv rhe Kiel scare oflast season. We're tishtins to support our dealers, to reduce our inventories, and above all, 1 ' to return to a profit position,

What is Arctic today?

borrowings are presently too high. We must get our inventories into line. This will sharply reduce our bank borrowings and allow us to diversify into other products to be sold through our own distribution system or by others. For the present, our primary emphasis will he on snowmobiles and related products. They olfer the greatest opportunity for us to return to a profitable position and prevent the erosion of stockholder equity But, given reasonable snow and rhe absence of fuel scares, we expect the shake-out to affect Arctic significantly for only one more year. Thereafter, We expect Arctic to be a strong cash producer, enabling us to invest in other ....! i 'orised

At the tiine General Products vvasacquir , : stated that lawn and n products were a J addition to your pro-

The very things we lacked with GLPbreadth of product line; a quality product, brand awareness and customer loyalty, engineering expertise ,vv\ a strong sales and eiiimice:...*, v. M.v>>., mnrkefiiw organizationare out resourci marketing orga,;a: -igths, withit

diesnowmo bile business?

^ Whydid GLPfail?
That rationale is still true. Our dealers continue to nmd contra-seasonal products. However, General Leisure was burdened with so many problems, which resulted in significant cash needs, that we had to get out - seriously weaken our financial strength, ... M . mong these problems w "he . fact Chief that our engineering capabilities at GIT we overtaxed dw to: I. compliance with new Outdoor Tower lua.inmcut Institute safety standards; 2. the need to improve the quality of the product line and; ) . the need to broaden the product line to include the more profitable self-propelled rotaries and tractors. With product deficiencies, our marketing efforts could not broaden the base- of G I F s private label customers. As a result, the G I T plant was operating at approximately WA of practical capacity. 1 heir lower priced product line did not generate sufficient gross margins to cover our ongoing overhead costs. Ar the same time, conditions in the snowmobile industry required us to focus mr capital and human resources on our main line of business. efforts: We have' capable internal ,. p advertising agency, which has ! us for over five years, has consi set the standard in our industry its marketing and advertising pi on our behalf. None of this means that w on our past laurels. We have pr management experience gained participation in a mature marki need to -sustain our customer c< to keep our facilities at a highel

Do things Sgherimeiii the coming year?

Siivertine's cash needs are not that great. The overhead at their plant was reduced by of January I, n V ^ ' l W v!lc%Vked up in April of this year. Our newly introduced apidly andmg sailboat market with three s; ilhoai dels that will highlight Siivcrline's j<>75 duet line. We've temporarily postponed del, however, the development costs wei used off in fiscal 1974. In summary,

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Two years ago, you s gwenateiiiporarys

Is that the shape of Arctic's foreseeable future?

Whatwffl prevent similar problems nom occurring in

Has your market

5. The 1973-74 energy crisis turned snowmobile sales into a disaster area. So snowmobile manufacturer Arctic Enterprises took the bull by the horns and posed the question "Why will Arctic Survive?" on the stark cover of its 1974 report. 6. Then on inside spreads Arctic's management tackles some really tough questions, answering them with equally frank replies. This use of large type and black on white made for a striking report.

Whywill Arctic Survive:

lb Stockholders
We followed the best year in the Company's history with one of the worst. Torin's sales in 1975 dropped 19% to $39,450,000 when compared with 1974 at $48,552,000. Earnings dropped 81 % from $2,335,000 to $445,000 in 1975. Before you become too depressed, let me point out the following: fourth quarter shipments were 136% of the first quarter's with earnings reflecting the turnaround.
QuarterlySalss and Earnings (Millions of Dollars)

associated with this condition, persuaded customers to sell off inventory, pushing Torin's incoming order volume to 50% of 1974 levels. These same conditions, only exaggerated, were present abroad. You couldn't design a configuration with more variables to depress.

our first quarter shipments this year will approximate $12,000,000 compared with shipments of $8,739,000 the first quarter of last year. Earnings will reflect this sales improvement, but they will be less than one might expect because of problems attendant with the rapid increase in production. 1975 Economic Conditions Though people are very sensitive to the economics that caused last year's drop in sales and earnings, perhaps it would be informative to review the particular factors that were most important to Torin. At the end of 1974 we were looking at shrinking markets and high customer inventories. In North America, housing starts dropped 12% when compared with 1974, the lowest in 30 years. Other year-to-year slumps were automobile sales, 14%, and appliances, 33%. These, in varying degrees of importance, affected the demand for Torin's products. Prior to this fall off, industry, stimulated by fear of material shortages, had overstocked. The high carrying costs

A Review of 1975 Goals All in all it was a year we quit without regret. Because we foresaw some of the economic problems that have since come to pass, we wrote in last year's Annual Report a series of goals to soften the impact of what turned out to be the worst recession in 45 years. A review of those goals and the action taken may give you some measure of our effectiveness. <; kVe will intensify field coverage with four levels of management to get the business. In the U.S. we increased market penetration 10%; in Europe we expanded our customer list 25% by identifying new markets and new products. As a result, the growth in bookings now is faster than the growth of the market and approximately double that of last year. <: We will strengthen our marketing group to seek new market product opportunities. The severity of sales shrinkage was such that we directed much of our efforts to solving short range problems. Some progress was accomplished but we will address ourselves anew to this goal in 1976. < J kVe will broaden our geography to supplement drooping demand. We opened two new divisions, one in Oklahoma and one in Brazil. 1 We will assign high priority to increase both our factory and our office productivity.

7. Torin Corporation won a place in annual report history with its 1975 report, in the style of a newspaper tabloid, that starts off: "We followed the best year in the Company's history with one of the worst!'

21

We make terrific products

3 . The Coca-Cola Bottling Company of New York highlighted new product lines in 1975 with stage-set studio photography. 4. The A. B. Dick Company, a pioneer in copying, effectively updated its product image in 1975 with photographs of its latest, ultramodern copying machines. 5. The Norlin report of 1971 contains examples of beautiful double-exposure photography that illustrate Gibson guitars and other quality musical instruments crafted by the company 6. Chesebrough-Pond's boosts its food products division with a superb closeup photograph of a young woman eating a Sloppy Joe made with one of the company's sauces in its 1974 report. 7. Campbell Taggart, a major national baker of bread, put an embossed "looks good-enough-to-eat" sandwich on its 1975 cover. 8. SCM solved the problem of picturing nonconsumer products with an elegant, well-lit color photograph of The products a company makes are obviously prime candidates for illustrations in the annual report. Product pictures provide identity for a company. When they are beautifully done they create pride among employees and provide a sense of accomplishment. They can also create customers for products. 1. Revlon's 1974 annual report shows a close-up of a woman's face, her eyes covered by multi-hued fingernails - a vivid photo that needed little explanation. 2. The things Combustion Engineering makes are on a different scale altogether. CE builds plants, constructs systems, and in its 1975 report displays in a series of two-page spreads such "products" as fossil fuel generating systems.

powdered metals and the lighter, stronger, more durable machine parts that can be made from them. 9. A new use for an old product - and a great photograph in Johnson & Johnson's 1974 report.

22

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We provide excellent services

But what if your company provides services instead of products? Service companies need inspired photography even more, because a service is so much more difficult to portray Some imaginative solutions appear on these pages. 1. Purolator, which counts a courier service among its businesses, added excitement to a commonplace situation - its trucks loading at an airport - by taking an excellently composed shot at night for the 1975 report.

Z. Harrah's - owner-operator of Nevada casinos and hotels - introduced a threedimensional element into photographs of its gaming rooms by scattering life-size gambling chips about the pages of the 1974 report. 3 . Western Bancorp oration used short sheets in its 1975 report to carry text and photographs through a year-long chronology of building an 11-state corporation. 4. Transamerica Corporation in 1975 told its services

story through realistic photographs of down-to-earth situations, focusing on the individual being served. 5. The Travelers covering umbrella has become the symbol of service for this large insurance company. The logo comes to life in a fine cover photo for the 1975 report. 6. How to illustrate data processing services? ADP is the largest payroll processor in the nation, issuing millions of paychecks to wage earners each month. It symbolized its service by delivering a paycheck to a bulldozer driver in the 1974 report.

24

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Sometimes it's possible to add an educational dimension to an annual report. Many companies have enhanced their reports with diagrams that explain how things work. Diagrams can take many forms and use many techniques. 1. Alza Corporation, a pharmaceuticals maker, illustrated its 1975 report with diagrams showing the action of therapeutic systems that control the delivery of medication. The color used is low key, the line drawing technique delicate.

lypc development is followed by extensive testing, both in Schlumbcrgcr test wells and in the oilfields. Oi'ltii. .i[j:ii'k^!H d'.aiiiio must be nijdc : < > i;suul lai-mus envivi'nmaii;:! conditions. Too, there is extensive fci;(L"n;:L-k (rem (iv'd engineers with valuable suggestions for improvement. The computer is used more and

arch to improve log In simple terms, we have defined the terminology used and have explained the technology involved in providing wireline services to the oil industry. There are many other essential features to wireline operationsquality of service, integrity in handling confidential information, the field engineer, the operators, their a highly technical service businessbut this is another story for another

Four typical weU-hiwinn instruments (from left to right). Sonic InstrumentMeasures sound velocity in the formation along the borehole, indicating porosity. Compensated Neutron InstrumentNeutrons radiated from the tool measure hydrogen content of formations and give another poro-

Data from the four lagging instruments on the opposite page were merge/l by computer to produce a Computer Processed Interpretation 220 feet of computed log as Compcnsated Density Instrument r. The Cumina-ruy^ niiiittict! jrotna nuclear theel i the left shows the depth source in the tool measure the ilcmiiyaj the formation. Dual-I.sterol Og/Micro Spherically Focused Combination Instrument Section 1 shows the percentage by Electrical current sent into the kW.hydrt.-earhun-; er(C). form MJ.e nitivhydroctions2, S. and 4 show physical aracteristics of the rocks, the tount of water in the formation mpared to hydrocarbons, and the the same borehole.

26

3 . Cluett, Peabody & Co. in 1975 utilized a number of silhouette drawings to explain new techniques also shown in full-page photos. This detail from a two-page spread illustrates the action of a pre-punched tape t h a t operates like a n oldtime player piano roll and directs the sewing machine to stitch according to the tape's program. 3 . Schlumberger provides services and tools to the oil industry. I n its 1973 report the company detailed some of the devices used to meas-

ure chemical and physical properties of test areas in cutaway drawings. 4 . Polaroid, in Part II of its 1972 report, explained the working of its new instant camera in a diagrammatic approach that showed "How the SX-70 Makes the Impossible Possible." 5. Teledyne in 1974 used a completely different art technique, with bold, flat color illustration, to show how two different types of nuclear reactors produce power from the same source, the fuel pellet. This illustration is unusual because it brought man into the diagram. 6. Peabody Galion Corporation, which calls itself "The Environment Company," used flow diagrams in three colors to illustrate the operation of new products and techniques in the 1975 report. This is a scrubber that cleans flue gases. 7. Utah Power & Light uses a chart technique in its 1975 report to explain the facts of utility life - the peak load and peaking capabilities - that limit capacity or mean extra capital outlays for additional plant.

/4/Xetv&uu(scr>v<) m/

27

We have a promising future

Through the Year 2000

Achieving and maintaining technological leadership demand an unremitting commitment to research and development. R&D lies at the heart of United Technologies' achievements over a widening sweep of activities. From R&D come new concepts, new products, improvements to existing products, and greater business opportunities. Research and development, in carefully selected technical areas, go forward at the Corporation's divisions and subsidiaries. This work is performed against a backdrop of multi-discipline investigation and experimentation, basic and applied, at the corporate Research Center. Company-funded R&D is currently running at the record rate of nearly $324 million a year. Invested today, these expenditures are targeted at yielding returns tomorrow in product acceptance, market expansion, company growth. On these pages is a sampling of the Corporation's forward projects, with potential time frames in which they could come to fruition.

1975

1980

1985

1990

1995

2000

Radar Systems
Four-color display provides easily understood air-traffic situations.

Advanced alloys are under test for high-temperature industrial gas turbines.

Energy

Solar Energy Lasers

Poweriul lasers offer significant potential for precision cutting of metal. United is experimenting with a turbo-compressor to heat and cool homes with solar energy.

Flight Systems
UTTAS medium-lift helicopter can carry 11 combatequipped soldiers plus crew of three.

Optical Inspection
Optical inspection of parts is accomplished rapidly and accurately on assembly line.

Power Transmission
Advanced power cable is tested at Essex high-voltage laboratory.

Space Transportation

Superconductivity
Pollution Controls
Extreme cooling of selected materials enhances their ability to conduct electric power.

United will provide propulsion and on-board systems for space missions.

Diagnostic Equipment
Computerized systems detect engine problems, print repair instructions.

Fuel Controls
Minicomputers will help regulate fuel consumption in engines.

UltrahighTemperature Turbines
Gas turbine technology is being advanced for use in efficient power generation.

Advanced Materials Fiber Optics

Eutectic materials will provide superior strength at high temperatures. Fiber-optic technology offers important new ways to transmit information.

Nuclear
FUSlOn Research is directed at harnessing nuclear fusion for power generation.

Foam Cable

Moisture-proof Essex foam cable, buried underground, reduces maintenance.

Propulsion
JTl 00 jet engine is designed to power next generation of commercial aircraft.

Fuel Cells
Fuel cells will provide communities with clean, efficient electricity.

You can learn the financial history of a company by reading the financial statements. But if you want to know where the company is going - and what investor doesn't? - t h e n you must search the other pages of the annual report for clues. 1. Sometimes companies are quite direct in spelling out their forward, thrust. United Technologies was in 1975 w h e n it charted its research and development programs, indicating the potential time frames in which these projects could come to fruition, right on to the year 2000.

SyntexTS: And Looking To The Future

A Roundtabie Review
Dr. Raiph Dorfnien [third from righlj, who hed$Sy:i:!M .:>'Sowidfs rs.searoh H.L.-Bud'Han n liar rights, president !}! Sl'flUix Ao/:i; Siriess, Inc.

Syfiifs.- Cw3:v3!;o:-. sas down for islis*

ar<!i?s- .5-ji;ss::<,:i'y w.-.tf: markets " i w Dr. aiehatd Wawgh ; second N J H I right). who directs S/Jiiex chemical manii-

U S. and SfltemaSensI pharmaceutical martsiiivn. s .: ' . !, , Sywexln i97SHndonin!0{ne(u!ure Pen ;c< pitting were:

Or. Ale >ander Cross ['second Uon; \eV,l

an ' '

Hy-iisx Sn:rnefrcj!iiii Pharmaceuticals :x:^M<'->~. Systems '.vn-.cti manages

< . ;:

"Looking to the future, aluminum's greatest opportunities lie in the four great areas of basic human needtransportation, shelter, energy transmission, and food packaging and distribution!'
DAVID P. REYNOLDS Vice Chairman, Reynolds Metals Company Before Sixth International Conference on Light Metals, Vienna, June 1975

Solar energy has the potential of cutting U. S. heating and cooling fuel consumption by about 25 per cent, A new and conceivably large market for aluminum, solar panels and systems are expected to find their greatest application in new buildings.

There also are substantial market possibilities in the conversion of existing structures. Aluminum's combination of light weight, excellent heat conductivity, strength and corrosion resistance make it an ideal material for this type of application.

The standardized four-byeight-foot solar panels in the photograph above are being produced and marketed on a limited basis by Reynolds. The company also is supplying metal and engineering assistance for custom-designed solar collectors.

1975 Annual Report- Transcontinental Oil Corporation

'Transcontinental Oil Corporation reported net income of $1,917,166, or $. per share, during 1975. Our financial performance during 1976 should be evi better. CHI and gas exploration activities will be j accelerated with | the Company significantly increasing its participation in ventures; demand for services of our drilling companies should remain strong, and coal and sales are expected

_ f

2. The story of "Syntex '75: And Looking To The Future" was put across "by publishing a transcript of a roundtable discussion among six of the company's top executives and research directors. 3 . Reynolds Metals in 1975 devoted the second half of its annual report to the future roles of aluminum in four central areas of h u m a n n e e d - transportation, shelter, energy transmission and food packaging and distribution. The potential of these areas was symbolized on the section's opening page by a modernistic-looking photograph of panels in a solar energy installation - one of the most promising future sources of energy. 4. Shell Oil titled a special products section in its 1975 report "A Style for the Future'.' The idea is to look at oil and petrochemicals as one area, coming up with new products to take advantage of changing markets. The text captions in the section punch out the message strongly in white type dropped out of the black picture frame. 5. And Transcontinental Oil, in a 1975 cover presentation eloquent in its simplicity, used large type to carry a message from the president about the company's promising future.
29

We are in key locations

Telling where a company does business is an important part of most corporate stories. This information is often presented in maps. And the "best maps combine exciting graphic design with clearly organized information. Maps can also convey the general impression of a company's overseas involvement. 1. Louisiana Pacific, a wood products company, in an imaginative change of pace shows the flow of products to markets rather t h a n plant and office locations. 2. Missouri Pacific Corporation (then the Mississippi River Corporation) in 1975 employed two maps covering the same area of the southeast. At right symbols denote different ele30

Tiger Leasing Group

as .he initial leases tcrmina.e. The highn revenue should offset inflationary cost increases and provide increased earnings. In recenr | B S , scrap sale proceeds of older r [ . the originil COS! of the euuipmenr. We recognised this increase in railcar salvage value in 1975 by adjuring residual values upsvard to rhc average scrap values realized OVLT Me p.isr live le.irj 1 ins tc-.:!,:;>:: ]'.,d T f . _ effect of increasing I9'5 net income by gppnmrniuly 11.4 million, and will inctease annual earnings over the ner 20 Railcar Leasing Services rail equipment lessor since 1907. added -1.210 new railcars during 1975. This b.ougtn ihc total Norrii American Car fleet to 44,317 . . , * K , J U K I ll,. Pittum tiffrrailidhPDl inrttnt hupptn mitia p 1- 15 pit t/air praim 1- W Jr> dxuiail,. owcM. .wJflwm u Mall)

tied range of car rypes in .he indus.ry including 19.345 covered hoppers. 16.265 tank cars, and 8.707 insulated DOHars, bulkhead flatcars. piggyback, aurnmuhile racks, and torripany-owned and contract repair shops throughout the Uniicd States. Canada, and The rail.at fleet is leased fo, the fleer. Nearly 20 percent of the Rett is operated
;-.-'{'.-, r..- (.i.^red Ji..|-|x-r-. ,.I;-V;;IL; .:.-;:. .;lr.ir.i! j-r.xl.;.;i -.:err..i'ji>.-..il ..::..' .1111:1:^:.

stable revenue stream form rhe future. At the end or" 19 lease com mi r men rs provide. (600 million of future reven very soft in .he latter half 01 number of railcars off lease percent of the fleer during .

l o l l y In addition to its major Canadian subsidiary. Norrh American Car operates in continental Europe through NACCO. S.A.. f ^ V W , . ,,.*, , W . m , . / /

is improving. A M A-uritau fal,l,r, C*ramUtd

w 7;..nj w ,. A,h,*

ments of a pipeline network and at left a railroad line is traced. 3 . Tiger International conveys the company's international flavor not with maps but with graphically exciting presentations that combine type, flags, bright colors and beautiful location photographs in its 1975 report. 4 . United California Bank in its 1971 report located its offices on four continents with appropriate foreign coins. 5. The global map used by Continental Can in its 1974 annual report conveys additional information about the company's activities through color codes and keyed symbols. 6. Marsh 6? McLennan Companies in 1975 used Canada's maple leaf on a stylized map to identify its Canadian offices. 7. To symbolize its worldwide scope, EXXON" in 1975 created elaborate montages of ancient maps, photographs, drawings and foreign languages in a graphic presentation of global capability. 8 . Utah International effectively used unusual global projections to illustrate the distribution and movement of mineral products in its 1973 report. 31

We meet the need for natural resources

Prom time to time a topic of particular interest and relevance arises to capture a n unusual degree of attention. Such a topic is man's search for additional natural resources, a search that h a s become the theme of many recent annual reports. 1. I n 1975 Fluor Corporation used five panoramic photographs of widely varying geographic areas to establish the global scope of its construction work for resources companies.

2 . Tyler's 1975 cover features a dramatic photo of the blasting methods being used to find more coal. 3 . Scott Paper Company m a r k s its commitment to the forests of the future with a photograph of one of 16 million tree seedlings the company planted in 1975 and an end-product made from trees - paper towels. 4 . North American Coal also used source-and-endproduct as a photo theme in its 1975 report. Here, a chunk of coal and a light bulb t h a t works on electricity produced by coal. 5. Cabot Corporation illustrated its lengthy 1975 operations review with fastpaced, on-location shots of its men at work. 6. St. Joe Minerals switched from photographs to paintings for its 1975 report. But the theme is the same: the wide search for minerals. 7. Mobil Oil in 1973 documented in dramatic blackand-white photos its "sustained worldwide effort to find and deliver increasing

volumes of energy." This platform for North Sea drilling is being built in Norway. 8. The Seagram Company Ltd. illustrated "The Quest for Energy" by its Texas Pacific subsidiary in 1975 with a striking close-up of oil-smeared h a n d s cupping the precious crude.

8IIW ':' :

'

111 III: lllill

We care about our customers

THE YEAR OF THE CONSUMER

title on the door to provide the problems raised by

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attempts

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For most companies, being physically close to the consumer is an important sales advantage. With the rise in consumerism in recent years, businesses are discovering it is important to he close to the consumer in spirit as well, and companies have emphasized their efforts in this regard in their annual reports. 1. U.S. Industries, not generally known as a maker of brand-name products, presented "The USI Family of Products" in a special 17page gallery of photographs introducing the 1973 annual report. The cover photo focused on two women chatting in the midst of a crowd of out-of-focus shoppers. Z. Sav-On Drugs' 1975 annual report featured the chain's merchandising, advertising and customer service programs. Good color photographs showed consumers in Sav-On stores and other on-the-spot situations.

10

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remCVachesTo^g'SIlon ~" "'"' ZZZTe%cc,no,eoMo,,a.

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34

3 . Del Monte Corporation heralded "The Year of the Consumer" in its 1973 report in an eye-grahhing use of large, modern type. The section discussed Del Monte's strong producttesting team and its voluntary adoption of nutritional content labeling of products. 4 . Cummins Engine in 1975 boosted its own customers by featuring the major truck manufacturers that put the powerful Cummins engines in their heavy-duty vehicles. 5. IBM in 1975 described and pictured in a five-page section how it is "Helping Customers Increase Productivity" by assisting them in using new machines. Users range from banks to elementary schools, from sawmills to police departments. 6 and 7. Lomas & Nettleton, financial counselors, employed stunning portrait photographs of generations of American families in 1974 to dramatize its willingness to undertake long-term commitments. 8. Security Pacific National brings its banking services down to earth in its 1975 annual report by showing how its officers get out into the field to help individual farmers in its service region.

35

We are socially conscious

Public Responsibility

Reflecting its deep commitment to areas of public concern, Celanese c o n tinued its broad efforts in 1975 to provide equal employment opportunities, maintain and improve the environment, produce products of high quality and performance, conserve energy and safeguard employee health and working conditions. The Celanese Public Responsibility Committee, composed of four outside directors, reviews corporate policies and practices in these and other areas. Dr. Jerome B. Wiesner, president of the Massachusetts Institute of Tech-

nology, is chairman of the committee. The other members are Eleanor Thomas Elliott, chairman of the board of trustees of Barnard College, Vernon E. Jordan, Jr., executive director of the National Urban League, Inc., and Grayson M-P. Murphy, partner in the law firm of Shearman & Sterling. Equal Employment Opportunity Affirmative action is a significant part of Celanese management strategy. The responsibility for setting equal employment opportunity goals and implementing action programs to attain them has been carried down the management ladder further each year. Despite the recession, Celanese continued to make progress in 1975 toward its equal employment opportunity goals. Of particular note is the improvement achieved for both minorities and women in the managerial and supervisory category and the professional category. The decrease in the percentage of women in the total Celanese work force is explained largely by the decrease in semiskilled and unskilled hourly female employees

following plant work force reductions when certain operations were phased out. Celanese EEO organization consists of an EEO headquarters staff, EEO company and plant coordinators and a Corporate Equality Committee and counterpart committees in the operating companies. The committees are responsible for reviewing affirmative action plans, monitoring performance and recommending changes in policies. Their first priority is to c o n sider ways to increase the numbers and the percentages of minorities and women throughout all levels of the Corporation. A major problem in recruitment efforts has been the acute shortage of women and minority candidates with degrees in chemical and mechanical engineeringthe chemical industry's most needed scientific-technical

M Mary Abbey (top) and Nancy Lingel participate in an experiment carried out in an engineering research laboratory at Georgia Institute ot Technology. Both women are tirst-year mechanical engineering students enrolled in the Celanese Engineering Scholarship Program, conducted at major universities across the country. In 1975, Celanese worked with five particular schools in a special effort to enroll more women in its scholarship program. As a result, 37 women entered the program during the year.

Percentage of Minority and Women Employees in Each Job Category Minorities *Totat Celanese Domestic Work Force (thousands) Percent of Total Employees tManagerial & Supervisory fProfessional Sales Technicians Clerical Hourly: Skilled Semiskilled Unskilled 13
J

Women -"--/ r..-'.'

1-,.: 9 6.1

M '
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* Includes workers on furlough as of year end. t Managerial & Supervisory: executive, managerial and supervisory employees, including salaried foremen. Professional: employees with college degrees or equivalent experience, including chemists, engineers, lawyers, personnel workers and others.

It is no secret that large American corporations are under increased pressure to be socially responsible - to their customers, their workers, society in general. The irony is that many companies do a far better job in this respect t h a n they are given credit for. In any case the annual report is an excellent vehicle for communicating the social involvement of your company.

1. Celanese in its 1975 report published an essay on "Public Responsibility" in which it described its efforts to insure equal employment opportunity. The unusually detailed chart gives figures for minority and women employees in each work category for the 10 years from 1966 to 1975. Z. Richardson-Merrell reprinted on its 1973 annual report a statement on ethics in the pharmaceutical industry that had been printed in the company's annual report 31 years earlier. A simple repetition of a good formula. 3 . Pacific Lighting dedicated its 1975 annual report to "the men and women who built America',' the stockholders. Good candid photographs of a number of

RICHARDSON-MERRELL

n,VC

ANNUAL REPORT FOR THE YEAR ENDED JUNE 30, 1

Ira IH

Medicines s h o u l d be I good formulas, fairly

priced and truthfully advertised a*, for that matter, should be all M her commodities advertised to I lie public* This company favors any legislation which honestly attempts to accomplish r irpo^e*

36

"group that is not and probably never will be homogenized, a group that has few champions but many exploiters, a group that seems naive

le days are past, and it is not te stockholder who is better off ' it. Modern managements edgeable stockholder is, in all ways, a better stockholder. For one thing, -lolders have, whe fundamental value in stockholdings than was the mindless optimist of the 1920s or the embittered pessimist of the 1930s. What about the Pacific Corporation stockholder? Is essentially different from tr.

But the Company's stockholders are spread throughout the 50 states and several foreign countries. There is no heavy concentration of stock in the hands of any one stockholder or any one institution. Of Pacific Lighting's total of 82,042 stockholders, 55,187 own 200 or fewer shares. About the only group approaching logenei the gro ment Savings Plan, in ef 1964. These employees o year's end, 2,344,241 shai

About the only other thing that might be said concerning Pacific Lighting stockholders is that, in all likelihood, the majority of them in the rely high dividend yield, callybeen nearly all stockholder: utility companies or utility holding Whether high yield will, or can, remain the principal attraction of I :i be r;

about stockholders. One fact about them stands out clearly: their ranks have grown enormously in the years since World War n. In 1952, there were 6.5 million U.S. stockholders; by 1962, the number had reached 17 million. By 1972, the number had peaked at 32 the 1973-1974 bear market, the number has dropped to a still respectable 25 million.

cantly of all, they h when they sensed a

Lighting "family" of stockholders. Women own more shares than men, Dut on the average, fewer shares per more knowledgeableeven sophisticatedthan the boom-intoxic< speculator of the 1920s who boi stocks on tips from his cabdriver who thought the stock market only one direction to goup. As economist Ken Hand pu a stockholder lolders' jally a o funerals of people

Such investment plans the past 20 years as a way ing the participation of m cans in the ownership of t industry. These plans he 3 served belonging" among they provide payers, a congruen

a cheap-energy base to fuel our shortage of $650 billion, more tha < stronger safeguards for our physi- debt. In a nutshell, the capital r quirements foreseen for the ne: significantly exceed thos i for taggering il demands of the period 1974-1985 lay reach a cumulative total of $4.7 illion, while the savings pc s something ,yiC-y<

" , : .

Most Pacific Lighting shareholders live in California, probably because Pacific Lighting had its origins in California and because its operations continue to be concentrated in the state. Some 19,000 are both stockholders and customers of our major subsidiary, Southern California Gas Company.

changes: i

ING CURRENT TECHNOLOGY** T CONSERVATION TECHNIQUES

From the Pacific Ocean shoreline to the Sierra Nevada and in the hills and valleys between, PG&E is working to develop varied sources of energy that will lessen our dependence on fossil fuels. Using current technology, the Company will be adding generating units that will have minimal adverse impact on the environment. From now through 1981, PG&E contemplates the need to add generating capacity at an average rate of about one million kilowatts a year, and 76 percent of this would be non-fossil-fueled. Our two big nuclear units at Diablo Canyon, with a combined capacity of more than two million kilowatts, will be able to generate power equal to what could be obtained from the burning of about 24 million barrels of fuel oil annually. As rapidly as permits can be secured, PG&E will continue adding

geothermal generating units. By the time the fifteenth unit at The Geysers comes on the line in 1979, there will be more than 900,000 kilowatts of geothermal capacity on PG&E's system. Field developers estimate that the underground steam reservoirs in this area might support two million kilowatts of generation by 1990. But this would account for only about 10 percent of system capacity. Using two high mountain reservoirs that are already a part of PG&E's Kings River hydroelectric system, the Company is planning to build one of the nation's largest pumped storage hydro projects. The Helms Project, for which permits are now being asked, would provide 1,125,000 kilowatts of peaking capacity from an underground powerhouse. Power from base load plants

located elsewhere on the Company's system will pump water from Wishon Reservoir up to Courtright Reservoir during off-peak periods. Then the water will be released to run back down through turbine-generators to generate electricity at times of peak demand. A virtual resource in itself is energy conservation. We hope that by husbanding our supplies of natural gas, PG&E can continue to meet the essential needs of most of its consumers until such time as new or alternate sources are developed. Reducing electric use also helps hold down PG&E's fuel bills. And to the extent that peak demands for electricity can be trimmed, energy conservation helps con-

serve investment capital, because it helps lessen the amount of new plant needed. Thus, the Company has embarked upon a wide-ranging program to promote energy conservation among its various classes of customers. Ceiling insulation campaigns have been set up in several communities. PG&E home economists have monitored the efficiency of home appliances and are advising youth groups and consumers generally how to save energy in the home. Large industrial, commercial and agricultural customers are being called upon personally and energy-saving guidebooks are distributed at clinics staged by Company engineers.

Stockholder Survey (Please take a few minutes to circle the numbers of your answers to the questions below. Thank you. You can put this card in the mailbox.) a. Number of shares you own:

f. Are you using the optional cash feature of the Automatic Dividend Reinvestment Plan? g. In what other ways can USI be of service to you?

1. Yes 2. No 1. More data on USI products and services and where you can obtain them. 2. Tour of USI plant or other activity 3. Regional meetings with stockholders. 4. Stockholder hot line (telephone number) your questions. 5. Data on how to join dividend

1.0 2. 1-100 3. 101-500 4. Over 500 1. Less than 1 year 2. 1-3 years 3. 3-5 years 4. Over 5 years 1. Chicago 2. New York 3. Los Angeles 4. Houston 5. Miami 6. San Francisco 7. Detroit 8. Philadelphia 1. Under $1,000 2. $l,000-$5,000 3. $5,000-$ 10,000 4. $10,000-$50,000 5. Over $50,000 1. Yes 2. No

b. How long have you been a USI stockholder?

c. Do you live within 100 miles of:

h. How did you hear about USI?

I. Stockbroker 3. Newspaper, magazine or article 4. Financial advisory services 5. Other, please specify

the company's owners from a Chicago systems analyst to a Utah sheep rancher - are sprinkled throughout the report. 4 . Pacific Gas and Electric decided to promote its energy conservation efforts in its 1975 report, describing the ways in which it is trying to find a variety of energy sources for its electrical output - nuclear, geothermal, hydroelectric. It did so in a handsome montage of silhouetted photos and diagrams. 5. U.S. Industries stapled into its 1975 annual report a survey asking shareholders to supply certain information and tell management how the company could serve them better. The response was good, and more t h a n a third of those responding said they were interested in the corporation's dividend reinvestment program. 6. Union Carbide Corporation on the cover of its 1975 report shows a child drinking from a water fountain. The message: In providing water purification systems, we are helping to insure the well-being of future generations.

- .

d. What is the size of your stock portfolio?

i. Other Comments You Would Like to Add:

e. Are you a participant in USI's Automatic Dividend Reinvestment Plan for stockholders?

j. If you want us to respond to any inquiry, please write your name and address in the space provided:

Street Address City Zip Number

State Telephone

37

We have top-notch employees

I n many companies it is a tradition for the president to conclude his annual report letter by paying tribute to the employees. Some companies go further and picture employees throughout the report or on the cover. This approach not only boosts morale; it also serves to personalize the company - to present the organization on a level people can relate to. 1. Revlon used a single twopage spread in its 1975 report to highlight the continuing contributions of the people of Revlon to the company. Z. Fluor Corporation in 1973 published a n unusual series of double-exposure photographs featuring important members of its team at work. The individual - in this case a surveyor on a construction site - was photographed in a working pose in black-and-white. Then he was posed facing the camera and photographed in color. The effect is to bring movement to still photography. 3 . SEDCO in 1975 carried the employees' role beyond

''Never before has Elixirs marketplace offered greater rewards. Conversely, at no rime has it been more demanding/*

posing for photographs. The pictures were also taken by employees and framed attractively with a matte black border.
38

'People alone are the lifeblood; should their viability ever diminish, the company would falter...and fail."

H. ]. Heinz

Company

Annual Report 1975

4. Carter Hawley Hale Stores in 1974 contrasted full-page color photos of retail store employees with small black-and-white pictures of executives on the facing page. The color portraits were of high quality, with the individual relaxed, surrounded by the articles he or she usually sells, and looking directly at the camera. Large type set on a wide measure lent an even greater feeling of quality. 5. W. R. Grace's 1974 annual report cover features a number of silhouetted photos of employees, each of whom has something to say about the work that Grace does around the world. 6. Elixir Industries featured its employees in a half-page "people book" stapled into the center of its 1973 report under a statement about the company's marketplace. 7. and 8. H.J. Heinz in 1975 made strong use of onthe-job portraits to show its employees working around the world. The cover featured a Moroccan field worker. Among others shown inside was a chef in a processing plant in England. 9. Chilton featured 50 faces, representing a cross section of its work force, on a wraparound cover in 1973. The windowpane grid outlining the faces was black and the entire layout was an exceptionally effective way of picturing many employees. 39

Looking for ideas? Consult Warren's Idea Exchange

Warren papers are one of the "best friends an idea ever had... .So it is natural t h a t the S. D. Warren Company would provide a useful source of printing, design, copy and promotional ideas. This free service is called the Idea Exchange. The "backbone of the Idea Exchange is its large Library of Printed Samples, which contains over 75,000 different and helpful printed ideas. These commercially printed samples, which pour in daily from around the world, are keyed and cross-filed under more t h a n 200 industry and graphic categories. Each year several thousand editors, printers, designers, advertising managers, sales promotion managers, writers, advertising agencies and others in the graphic arts industry request printed sample ideas from the Idea Exchange's Library of Printed Samples. They use these printed samples to confirm the feasibility of graphic decisions already made, or to spark new ideas and techniques for graphic efforts still in the formative stages. For example, a new editor of a corporate publication writes for copies of other company internal newspapers. A designer calls for institutional brochures from the banking industry. Or a public relations department writes for "annual reports from the insurance industry." When you need ideas, feel free to use the Idea Exchange and its Library of Printed Samples anytime! Write: IDEA EXCHANGE S. D.Warren Company A Division of Scott Paper Company 225 Franklin Street Boston, Mass. 02101

The role of the Warren paper merchant

The Warren paper distributor performs the vital function of bridging the gap between paper producers and the users of paper. He inventories in his warehouse many kinds and grades of paper from many mill sources. Therefore, he is able to provide you with a selection that is broader t h a n any single producer could supply. And he is eminently equipped to supply you with helpful printed samples and dummies made to your specifications. The Warren merchant can be a vital partner in the creation of your annual report. He's the expert when it comes to helping ideas look good on Warren papers... since 1854, one of the best friends an idea ever had!

40

The text was lithographed on a 6-color 38 x 50 sheet-fed press on Cameo Dull 100 pound. The cover was lithographed on a 4-color 25 x 38 sheet-fed press on Lusterkote Cover 1 Side - 8 Pt.

arren Paper Merchants

Alabama
Birmingham Sloan P a p e r C o m p a n y Mobile Knight Paper Strickland Paper Company Montgomery Weaver P a p e r C o m p a n y

Indiana
Fort Wayne T a y l o r - M a r t i n P a p e r Co., I n c . Indianapolis C. P. L e s h P a p e r C o m p a n y Unijax, I n c . South Bend C.P. L e s h P a p e r C o m p a n y

Nebraska
Lincoln Carpenter Paper Company Omaha Carpenter Paper Company Field P a p e r C o m p a n y

A i l i n g a n d Cory Scranton A i l i n g a n d Cory

Rhode Island
Pawtucket C a r t e r Rice S t o r r s & B e m e n t , I Rumford T h e R o u r k e - E n o P a p e r Co., I n c TVTa.-p-ra.g'fl.nspf.t Division

Nevada
Las V e g a s Zellerbach Paper Company

Arizona
Phoenix Zellerbach P a p e r C o m p a n y

Iowa
Cedar R a p i d s Midwestern Paper Company Des Moines Midwestern Paper Company

New"
Concord C M . Rice P a p e r C o m p a n y

South Carolina
Columbia V i r g i n i a P a p e r Company, I n c . Greenville Caskie P a p e r Company, I n c .

Arkansas
Little Rock Western Paper Company

Kansas
Wichita Western Paper Company

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New Jersey
Carlstadt Lindenmeyr Paper Corporation East Rutherford Bulkley D u n t o n Linde L a t h r o p , I n c . Newark Central Paper Company

California
Fresno Zellerbach Paper Los Angeles Zellerbach Paper Sacramento Zellerbach Paper San Diego Zellerbach Paper San Francisco Zellerbach P a p e r Company Company Company Company Company

Tennessee
Chattanooga Sloan P a p e r C o m p a n y Southern Paper Company Knoxville Southern Paper Company Memphis Western Paper Company Nashville Clements Paper Company

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Kentucky
Lexington Southern Paper Company Louisville Louisville P a p e r C o m p a n y

New York
Albany H u d s o n Valley P a p e r C o m p a n y Binghamton H u d s o n Valley P a p e r C o m p a n y Buffalo A i l i n g a n d Cory Franklin-Cowan Paper Company N e w Y o r k CityA i l i n g a n d Cory Bulkley D u n t o n Linde L a t h r o p , I n c . T h e Canfield P a p e r C o m p a n y Lindenmeyr Pap^"' M a r q u a r d t & Coiix^^xj, x ^ . Rochester A i l i n g a n d Cory Syracuse Ailing a n d Cory Utica Ailing a n d Cory

Louisiana
N e w Orleans Alco-Columbia P a p e r C o m p a n y Palmer Paper Company Shreveport L o u i s i a n a P a p e r Company, Ltd. Western Paper Company

Colorado
Denver J e n s e n Paper Company ellerbach Paper Company

Connecticut
Hartford C a r t e r Rice S t o r r s & B e m e n t , I n c . Lindenmeyr Paper Corporation New Haven C a r t e r Rice S t o r r s & B e m e n t , I n c .

Maryland
Baltimore B a l t i m o r e - W a r n e r P a p e r Co., I n c . T h e B a r t o n , D u e r & K o c h P a p e r Cc

Dallas Olmsted-Kirk Paper Company Port Worth Olmsted-Kirk P a p e r C o m p a n y Houston B o s w o r t h Paper, I n c . . Waco Olmsted-Kirk P a p e r C o m p a n y

Maine
Portland C M . Rice P a p e r C o m p a n y C. H. R o b i n s o n C o m p a n y

District of C olumbia
Washington Stanford Paper Company Virginia Paper Company, Inc.

Utah
Salt Lake City Zellerbach Paper Company

Massachusetts
Boston C a r t e r Rice S t o r r s & B e m e n t , T h e C e n t u r y P a p e r Company, L i n d e n m e y r P a p e r Company, Springfield C a r t e r Rice S t o r r s & B e m e n t , Worcester C a r t e r Rice S t o r r s & B e m e n t , Inc. Inc. Inc. Inc. Inc.

Florida
Jacksonville Knight Paper Virginia Paper Company, Inc. Miami Knight Paper Palmer Paper Company Virginia Paper Company, Inc. Orlando Knight Paper Virginia Paper Company, Inc. Tallahassee Knight Paper Tampa Knight Paper Palmer Paper Company

North Carolina
Charlotte Caskie P a p e r Company, I n c . Virginia Paper Company, Inc.

Virginia
Lynchburg Caskie P a p e r C o m p a n y , I n c . Richmond

Ohio
Akron Ailing a n d CoryCincinnati T h e Diem & Wing P a p e r C o m p a n y Cleveland A i l i n g a n d Cory Columbus Cordage of C o l u m b u s Dayton T h e Diem & Wing P a p e r C o m p a n y Toledo Commerce Paper Company

Washington
Seattle Z e l l e r b a c h P a p e r Company

Michigan
Detroit Chope-Stevens P a p e r C o m p a n y Seaman-Patrick Paper Company Grand R a p i d s Quimby-Walstrom P a p e r Company

West Virginia
Charleston A i l i n g a n d CoryFairmont Ailing a n d Cory

Minnesota
Minneapolis Leslie P a p e r

Wisconsin
Milwaukee Fackie Paper Company

Georgia
Atlanta Sloan Paper Company V i r g i n i a P a p e r Company, I n c . Columbus Sloan Paper Company

Mississippi
Jackson Unijax, I n c .

Oklahoma
Oklahoma City Western Paper C ompany Tulsa Tulsa Paper Company

Export and Foreign

N e w Y o r k City, N e w Y o r k ( E x p o r t ) Moiler & R o t h e , I n c . M o n t r e a l , Canada L a u z i e r Little, I n c . T o r o n t o , Canada B u n t i n Reid P a p e r C o m p a n y , L V a n c o u v e r , Canada Coast P a p e r Ltd. S m i t h , D a v i d s o n & Lecky Australia B.J. Ball Ltd. N e w Zealand B.J. Ball (N.Z.) Ltd.

Missouri
Kansas City Tobey F i n e P a p e r s , I n c . St. Louis Tobey F i n e P a p e r s , I n c .

Hawaii
Honolulu HOPACO Zellerbach Paper Company

Oregon
Portland Zellerbach Paper Company

Illinois
Champaign Unijax, I n c . Chicago Bradner Smith & Company Chicago P a p e r C o m p a n y Hobart-Mclntosh Paper Company ' 3Singer P a p e r Co. .w - ' a p e r C o r p o r a t i o n Midland Paper Company

Montana
Great F a l l s Leslie P a p e r

Pennsylvania
Allentown A i l i n g a n d Cory L e h i g h Valley P a p e r C o r p o r a t i o n Erie A i l i n g a n d Cory Harrishurg A i l i n g a n d CoryPhiladelphia A i l i n g a n d Cory Lindenmeyr Paper Company