Chuck Midgette - AR TRENDS 2010 Survey

Review of best practices

• More than 750 annual reports reviewed from around the world:– 222 from the S&P/TSX

– 497 from the S&P 500

– 32 from the Europe 350

– 7 from the Global 100

– 11 from the S&P/ASX

Best practice elements

Focus Credibility Storytelling Performance Accessibility

• Covers• Theme• Investment argument

• Message to shareholders• Governance• Sustainability

• At-a-glance• Market environment• Strategy• Visuals and design

• MD&A• Performance measurement • Risk management• Objectives and targets

• Online annual

reports

Scope of our survey:AR TRENDS

S&P/TSX 222 110

S&P 500 248 50

Big picture trends Survey data

Big picture trends

AR TRENDS survey:What we found

• Production values

AR TRENDS survey:What we found

• Production values

AR TRENDS survey:What we found

• Objectives and targets

AR TRENDS survey:What we found

• Governance

AR TRENDS survey:What we found

• Online annual reports

Covers: What did the best practice companies do?

• 76% of annual report covers contained a theme or positioning statement

• 24% of annual report covers provided only the name of the company and the year

• 26% of back covers contained meaningful content

Duke Energy Corporation front and back cover

Themes: What did the best practice companies do?

American Express Company

Investment argument: What did the best practice companies do?

Enbridge Inc.

Governance: What did the best practice companies do?

TELUS Corporation

• 37% of North American reports included a dedicated section on corporate governance

• 22% of U.S. reports contained a governance section compared to 44% in our previous survey

• 28% of Canadian reports highlighted current governance initiatives compared to 10% in our previous survey

Market environment: What did the best practice companies do?

Volvo Group AB

MD&As: What did the best practice companies do?

Agrium Inc.

• 46% of Canadian and 22% of U.S. MD&As contained graphs, but only 4% of these were captioned

• 14% of Canadian and 2% of U.S. MD&As contained either colour or black and white photography

Performance measurement: What did the best practice companies do?

BMO Financial Group

• 85% of reports featured a financial highlights page

• 49% of reports included an historical performance table, with an average of seven years of data

Online annual reports: What did the best practice companies do?

The Coca-Cola Company

• 32% of U.S. companies that produced a traditional print report also provided an HTML version of the annual, up from 24% in our previous survey

• 8% of Canadian companies produced an HTML version of their annual report, down from 13% in our previous survey

• 12% of U.S. companies and 6% of Canadian companies provided the entire report in HTML