Annual Report & Stockholders Meeting

1. Annual Report & Stockholders Meeting

2. Anatomy of an annual report • While most annual reports contain optional elements, all reports contain information the SEC requires. • SEC-required elements include: • Auditor's report • Management discussion • Financial statements and notes • Selected financial data • Optional elements include: • Financial highlights • Letter to stockholders • Corporate message • Report of management • Board of directors and management • Stockholder information

3. Mandatory elements • Auditors' report. This summary of the findings of an independent firm of certified public accountants shows whether the financial statements are complete, reasonable, and prepared consistent with generally accepted accounting principles (GAAP) at a set time. • Management discussion. This series of short, detailed reports discusses and analyzes the company's performance. It covers results of operations, and the adequacy of liquid and capital resources to fund operations. • Financial statements and notes. These statements provide the raw numbers for the company's financial performance and recent financial history. The SEC requires three statements — statement of earnings, statement of financial position, and statement of cash flows — all covered in this guide (the statement of stockholders' equity is not addressed here). These statements include a comprehensive set of related notes that provide explanations, additional detail, and supplementary financial information.

4. Mandatory elements • Selected financial data. This information summarizes a company's financial condition and performance over five years or longer. Data for making comparisons over time may include; • revenue (sales) • gross profit • net earnings (net income) • earnings per share • dividends per share • financial ratios such as return on equity • number of shares outstanding • market price per share.

5. Optional elements • Financial highlights. Probably the most often-read section of any annual report, these highlights give a quick summary of a company's performance. The numbers appear in a short table, usually accompanied by supporting graphs. • Letter to stockholders. This letter may be from the chairperson of the board of directors, the chief executive officer, or both. It can provide an analysis and a play-by-play review of the year's events, including any problems, issues, and successes the company had. It usually reflects the business philosophy and management style of the company's executives, and often it lays out the company's direction for the next year. • Corporate message. Some analysts, business executives, and stockholders consider this message an advertisement for the company; others find it useful. However, it almost always reflects how a company sees itself, or how it would like others to see it. Here, the company can explain itself to stockholders, using photographs, illustrations, and text. This message may cover the company's lines of business, markets, mission, management philosophy, corporate culture, and strategic direction.

6. Optional elements • Report of management. This letter, usually from the board chairperson and the chief financial officer, takes responsibility for the validity of the financial information in the annual report, and states that the report complies with SEC and other legal requirements. The discussion attests to the presence of internal accounting control systems that cover effectiveness of operations, reliability of financial reporting, and compliance with federal laws. • Board of directors and management. This list gives the names and position titles of the company's board of directors and top management team. Sometimes companies include photographs. • Stockholder information. This information covers the basics, the company's corporate office headquarters, the exchanges on which the company trades its stock, the location and time of the next annual stockholder's meeting, and other general stockholder service information. Stockholder information is usually in the back of the annual report.

7. Foundations Annual Report Your Annual Report must include, at a minimum: • Cover Page • Table of Contents • Letter to stockholders (Write this section last.) • Corporate Message. • It almost always reflects how a company sees itself, or how it would like others to see it. Here, the company can explain itself to stockholders, using photographs, illustrations and text. • Your company's Vision and Mission statements • Business Philosophy • Describe your industry and markets. • Company’s strategic direction • What factors made the company succeed?

8. Foundations Annual Report • Financial Highlights. These highlights give a quick summary of a company’s performance. The numbers appear in a short table, usually accompanied by supporting graphs. • Data for making comparisons may include revenue (sales), gross profit, net earnings (net income), earnings per share, dividends per share, and market price per share.

9. 2008 Financial Highlights A commitment to sustainable and dependable GROWTH (dollars in millions, except per share data) Example from Kellogg Company 2008 Annual Report

10. Foundations Annual Report • Management discussion. • A series of short, detailed reports that discusses and analyzes the company’s performance. • It covers results of R&D, Production, Marketing, and the adequacy of capital resources (Finance) to fund operations. Include in these reports your analysis and comparison to your selected competitors. • Financial Statement and notes – use your Final Year Foundations Annual Reports • The SEC requires three statements – statement of earnings, statement of financial position, and statement of cash flows

11. Foundations Annual Report • Selected Financial Data. This information summarizes a company financial condition and performance over five years or longer • Data for making comparisons may include revenue (sales), gross profit, net earnings (net income), earnings per share, dividends per share, market price per share and key ratios. • What were your company’s “key financial objectives / ratios” • How well did you perform against these objectives • What actions did you take to maximize your objectives attainment

12. 2008 Selected Financial Data Example from Kellogg Company 2008 Annual Report

13. Foundations Annual Report • Discuss what your Executive team has done to position your company for the future • Required attachments: (These pages are not included in the 8 – 12 page guideline) • Brief Bio for each member of the executive team stating their primary responsibilities • Charts, graphs, etc. to support your written report (do not include the last FastTrack Report)

14. Annual Stockholders Meeting

15. Stockholders meeting • What are you trying to accomplish? • Truthfully “sell” to the Board your management team’s effectiveness. • Obtain a “vote of confidence” as a management team and to continue your contracts. • The Board has asked you to come before them to discuss four things: • Your management team’s overall performance over the past eight years • Andrews’ financial performance in your final year • Andrews’ performance compared against two of your key competitors (select two of your major rivals - Baldwin, Chester, Digby, Erie, or Ferris and prepare a competitor analysis). • What specific steps your management team has taken to position Andrews for future success

16. Points to Think About: • Who is the Audience? • Board of Directors • the group of people responsible for supervising the affairs of a corporation • the board of directors generally sets broad corporate policy rather than participating in day-to-day managerial decisions • members are elected by the firm's stockholders and may or may not be stockholders themselves. Microsoft Campbell Gap Nike

17. Presentation: • Introduction • Team Introduction – name and functional responsibility • Content • Ensure Clarity of Information • Conclusion (The Last Chance with Customer – Be Enthusiastic) • Shouldn’t end abruptly… “I guess that’s it!” • Summary of what the Team Presented (This takes Time and Enthusiasm) • Must ask for “Vote of Confidence” • Q & A • Interaction • Speaker to Screen Synchronization – Practice • Transitions • Introduction of next speaker • Formal and consistent

18. Presentation: • Time: 20 minutes (minimum 17 minutes – maximum 22 minutes) • Business Professional • Time must be Proportional between Teammates • Speak Loudly and Slowly => Distinctly • Don’t MEMORIZE! • Smile – show you are comfortable with the subject matter • Be Enthusiastic !! • No Distractions • Swaying • Clapping Hands • Mumbling • No Starting Over

19. Presentation: • Minimize Verbal Fillers • UM, AH, You Know……, Like • No Hands in Pockets • No Notes or Scripts • Maintain Eye Contact with Audience – Not the Wall or Into Space • Don’t Read Screen • Audience can do this faster; Explain the purpose of the slide • No Standing Behind the Podium • One Person at Computer if necessary • Speaker out front • Don’t cross in front of screen in formal presentation • Non-speakers pay attention • Act Interested, support your team ! • Don’t Act Bored