The 10 best and 10 worst annual reports.

It was a year of extremes in annual reports. There are more gimmicks, for one thing. Less forthrightness, for another.

When the first annual report was published by Baltimore Gas & Electric in 1823, honesty was a given. A corporate secretary often took pride in writing the entire billet-doux by hand. In this, my 11th year of rating annual reports in conjunction with Chief Executive magazine, honesty has slipped to an all-time low. Only 84.9 percent of CEO letters to shareholders are trustworthy. But perhaps it's best not to blame the boss for this predicament: Just 47.1 percent of these letters are written by the CEOs, according to their staffers. That figure represents another, perhaps more subtle, form of dishonesty--and a three-year low.

This year, we analyzed 732 reports from the U.S. and abroad--including those from Africa to Australia, Poland to Pakistan. This is more than the minimum 110 required to ensure a scientific sampling. The year's best reports have much in common. Each encourages readership by declaring a theme on the cover and supporting it throughout the book. Each features financial highlights, all but one (Sonoco Products) with year-on-year percentage changes. And each includes a special section spotlighting some aspect of the company's operations.

In design and approach, there are always those who strive to be different. But while last year's crop of annuals yielded several reports that were truly innovative, 1993 produced some that rank as mere contrivance. GE Capital Services published the first-ever triangular-shaped annual, complete with instructions on how to handle it. Whirlpool's effort features a compass made in Japan that doesn't work. Among other contrarians, Wolverine World Wide--makers of Hush Puppy shoes--turned out a report with a genuine leather cover: "A book you can judge by its cover," the company quips.

Taking a plaintive tone, the Westinghouse Electric report asks, "How will we achieve success?" Not by running an overindulgent nine photographs of new Chairman and Chief Executive Michael H. Jordan. But Jordan isn't alone in his vainglory: After several years of self-effacement--perhaps brought on by tough times--some CEOs preen in the 1993 reports. Runners-up in the "mirror, mirror-on-the-wall" competition include Lafarge's Michel Rose, with seven photos between the covers; Kentucky Medical Insurance's Steven L. Salman, six; and Flagstar's Jerome J. Richardson, five.

On the bright side, a handful of annuals appear in electronic form, that is, on CD-ROM. Some are charlatans: Mead Corp. promised an electronic annual but provided a report on a 3.5-inch disk. (The latter format's graphic capabilities are much inferior to those of compact disk.) Of companies to generate the real McCoy, Oracle's and R.R. Donnelley & Sons' are quite good, while that of Adobe Systems is a flop. Instructions on how to view the Adobe report--merely a computerized reproduction of the paper-and-ink version--are practically incomprehensible.

By contrast, the Oracle and Donnelley reports feature moving images of the CEO talking about the company and its performance. Both are breakthrough reports that point the way toward the future of the genre.

THE BEST:

FIRST (129 POINTS)

Chevron's report, among the 10 best seven years in a row, finally rises to the top.

The diversified oil and natural gas company turned out a progressive product that includes an 11-page section on its strategies for growth. Also valuable is a letter by Chairman Kenneth T. Derr underscoring the San Francisco-based company's success in meeting the five-year financial goals he delineated in 1989's annual report.

Bolstering the effort are financial highlights that include 3D-like graphics plotting trends in revenues, net income, capital and exploratory expenditures, cash dividends, and stock price. "Chevron at a Glance" outlines the company's activities in its core businesses, as well as in chemicals, coal, and property development.

SECOND (126 POINTS)

The theme of COMSAT's annual report exemplifies its broad scope: "Worldwide Communications Now: Delivering On the Promise."

The report's design is far more modern than others among the 10 best. Another plus is 12-year financial data, along with five- and 10-year compound growth rates. Readability, helped by a combination of striking photography and artwork, is high.

Deduct points, because the Bethesda, MD-based company--which provides mobile and fixed telecommunications systems--names customers generically, rather than specifically. (However, it pretty much pinpoints the competition.)

Also absent is a clearly defined mission statement. The "outlook" material comprises but two pages, buried in the financials, compared with Chevron's 11 pages. And the letter to shareholders by President and CEO Bruce L. Crockett and Chairman Melvin R. Laird isn't nearly as revelatory as others among the top 10.

THIRD (125 POINTS)

Southwestern Bell soars into the third spot from a tie for 46th place last year. Its 22-point year-on-year rise represents the largest jump ever under our rating system.

We're hooked right from the start. A bold cover proclaims in large type: "Southwestern Bell builds value. Your $100 investment has grown to $733 in 10 years. And we are ready for another decade of growth." The company illustrates its stellar return on investment with two piles of dollar bills.

Another nice touch: Edward E. Whitacre Jr., chairman and CEO, is pictured in shirt sleeves in a three-page letter to shareholders, which he undoubtedly wrote. The letter outlines a four-point strategy to maintain a leadership position in the telecommunications industry.

There's also an interesting introduction to the San Antonio, TX-based company's operations inside the front cover--"Southwestern Bell Corporation at a Glance"--that includes the page numbers of more complete descriptions of business segments.

At 48 pages, the report is 11.6 percent longer than this year's average 43 pages. But overall, it is a dramatic contrast to those of other Ma Bell spin-offs (Bell Atlantic, BellSouth, and Pacific Telesis), which in recent years have produced lifeless, colorless, penny-pinching reports that fail to impress anyone other than bean counters.

FOURTH (TIE) (124 POINTS)

Two companies headquartered off the beaten path tie for fourth place this year: Mosinee Paper, based in Mosinee, WI, and Portland, OR's Northwest Natural Gas.

Both have been frequent visitors to the list of the world's best. A year ago, Mosinee finished in second place, missing the top spot by a single point. Public utility Northwest advances three notches from seventh best.

As per its tradition, the Northwest report showcases gorgeous, full-page, color photographs of scenes from the company's home region. The cover, which features a lighthouse, portrays Northwest as a beacon of dependability. Director and officer biographies provide substantive counterpoint to the pretty pictures.

Mosinee provides data on key officers, too, but doesn't relegate the information to the back of the book, as many companies do. Instead, thumbnail sketches of officers are paired with color photos and presented with the descriptions of business segments that begin on Page 6. Brief profiles of financial and administrative managers appear on Page 5.

SIXTH (TIE) (123 POINTS)

Among the 10 best for several years, specialty steelmaker Armco forged its best report so far.

The theme, "Committed to the customer from start to finish," is illustrated on the cover with a red Buick LeSabre superimposed over two employees working in the company's melt shop. The company produces finishing chrome and galvanized steel for automobile manufacturers.

Supporting the theme inside the report is a roundtable in which Pittsburgh-based Armco's senior officers discuss the "challenges and key goals for 1994." President and CEO James F. Will alerts readers to the forthcoming section in his shareholder letter, which discusses the firm's redefined mission to reinforce Armco's position as a market leader and to increase the profitability of its businesses.

Black-and-white photographs of executives are effectively juxtaposed with color shots of Armco facilities and people using Armco products such as stainless steel pots. Detailed explanations accompany all graphs, while a fold-out grid identifies markets and major competitors. The back of the book is enlivened by quotes beneath photos of various executives, from the director of internal auditing to the managing director of research & technology. The report also contains bios on officers and directors that list ages and previous positions, along with a warm tribute to retiring Chairman Robert L. "Bob" Purdum.

Lastly, Armco is one of the few (three out of 100) to carry over the front of the book's design of black-and-white photos and blue accent type to the financials.

Meanwhile, the cover of co-sixth-place finisher Phillips Petroleum Co.'s report gets down and dirty with a shot of workers straining to position machinery at a site on the Gulf of Mexico. Graphs on natural gas production and average worldwide crude oil sales prices, among others, are explained in detail. A glossary of terms, bios on directors and key officers, and two pages of outlook material as part of the Management's Discussion & Analysis of Operations give the report a solid feel. Photos of products in use are especially appealing: One shows five tots at a birthday party eating frozen yogurt sundaes from recyclable cups made of Phillips' K-Resin plastic.

Unique to this report are brief italicized overviews of each of Phillips' businesses that guide the reader into more specific information. For the first time, Phillips provides 11-year financial data. The Bartlesville, OK-based oil and gas company also published its traditional, two-page "Conversation With the Chairman," now-retired Chairman and CEO C.J. (Pete) Silas.

As with rest of book, the letter to shareholders is aimed at those who scan rather than study. It is second only to that of Mobil in terms of readability, with an average of 9.5 words per sentence. And as usual, the report contains a reader-response card for feedback.

Drawbacks include the absence of a grid listing competitors and markets. In addition, the mission statement is inadequate, particularly given that our standards in this area have become more stringent over the years.

EIGHTH (122 POINTS)

Sonoco Products breaks the mold with its innovative presentation of ordinary data. In the financials, attractive turquoise headings and colorful graphs brighten the gray pages. The biographical information on officers and directors is more than sufficient; photographs of the latter group are positioned in an eye-catching design.

Each year, the Sonoco report focuses on the Hartsville, SC-based packaging company's employees: The report conveys the impression they're no less important than the top brass.

Color and black-and-white photos are mingled throughout the report. The back cover highlights Sonoco's mission and strategy statements, along with a declaration of nine "primary goals." There's also delineation of "five key initiatives" for 1994.

NINTH (121 POINTS)

Apogee Enterprises' report shows promise of being the most employee-oriented of the top 10, especially in its theme: "Every day, all year long, Apogee's people deliver the quality and service that builds customer loyalty and market strength." The report takes the approach that "extraordinary effort is a daily event" with the glass and aluminum company's 5,358 employees. Unfortunately, the workers pictured aren't identified--unlike top management, of course.

Chairman and CEO Donald W. Goldfus and President Gerald K. Anderson rate well on honesty in their letter to shareholders. They frankly admit that fiscal 1993 results were disappointing. (The Minneapolis-based company suffered a 47 percent earnings decline on a 4 percent falloff in sales.)

The highlight of the book is an 11-page management roundtable discussion of the year in review and the outlook for the future.

TENTH (120 POINTS)

Innovative! Vibrant! Exciting!

These words seldom describe annual reports produced by public utilities, but Atlantic Energy's is an exception.

This barn-burner of a book is a dramatic departure from the norm: It boasts big, bold headlines and a minimum of prose--just enough to get the job done. The cover theme, "Common interests. Common ground. Common sense," is supported on the inside with large, captioned photographs.

An alternate energy source--solar panels manufactured by the company--is outlined. Instead of focusing on the corporate hierarchy, the Pleasantville, NJ-based company discusses its projects, including one to install heating and cooling systems in a new Atlantic City convention center.

The utility company didn't even use four or more colors in its report. Likely the book was a bargain, but shareholders are well-served nonetheless.

THE WORST:

There's good news and bad news in most messages, of course. Here's the downside of the 1993 annual reports we reviewed:

* They're the least honest in the six years we've monitored this aspect of annual reports. The percentage of honest reports dipped to 84.9 percent, compared with 90 percent in 1989 and 1990.

* Fewer reports contain special sections: 43.7 percent this year versus 49.6 percent last year.

* There are fewer readability enhancements, such as callouts and subheads.

* The legalistic Form 10-K appears with record frequency, 7.3 percent, compared with 2.2 percent a decade earlier.

* Management's assumption of responsibility for the financials declined to 48.3 percent from the 1990 high, 54.6 percent.

* Reports--both best and worst--score just 3.3 percent out of a possible 100 percent on a separate rating mechanism comprising 33 indicators. This compares with an average 4.2 percent rating for the 1992 crop of reports.

* The use of overly austere approaches, such as the summary annual report and reports with fewer colors, continues to proliferate.

In light of these negatives, a theme we've consistently emphasized bears repeating: The annual report is perhaps a corporation's most important communications tool. Those that fail to measure up are at best ineffective, and at worst outright impediments to shareholder understanding of a company's purpose and performance. Is anybody listening?

FIRST

Form 10-K is an informative--albeit legalistic--document all companies are required to file with the SEC. But in some instances, it is used without discretion to bulk up emaciated annual reports.

On that count, Wakefield, MA-based M/A-COM, a communications company that specializes in wireless technology, is one of this year's offenders. Its 10-K comprises more than three-quarters of a 44-page effort.

But that's one of many problems:

* Its report 'scores but 28 of a possible 135 points.

* The three-page letter to shareholders runs as a single paragraph unbroken into columns, with text spanning the page.

* The company lost $22.5 million from continuing operations, or 92 cents a share, but doesn't say that until midway through the letter.

* The letter glosses over tough times confronting the corporation. Consider this bit of obfuscation: "During the year, 1400 M/A-COM employees adjusted to different jobs, work environments, and new work procedures." Translated, that means they're getting used to being underemployed or perhaps unemployed.

* In the operations review, text continues to sprawl from border to border. And to confuse things further, photo captions in microscopic, hard-to-read, gray print run between the lines of the review.

A rendering of Leonardo da Vinci appears on the cover, and references to the great Renaissance artist and scientist continue throughout the text inside. In the end, the imagery serves only to underscore the gap between the brilliant and the painfully prosaic.

SECOND

The 1993 report of Public Service Company of Colorado features a photo of D.D. Hock, chairman, president, and CEO of the Denver-based utility company, sitting sidesaddle on a chair and leaning curiously forward and to one side. The sense of imbalance persists throughout the report. For one thing, the financials take up three times the space of the remainder of the book.

The rest of our laundry list:

The cover visual--a gas flame superimposed on a light bulb--is cluttered and cliched. On the inside pages, the representation of a steel turbine in motion--captured through time-lapse photography--looks more like a ferris wheel.

Smaller photos, including one of a private-home schematic, are unexplained and have no apparent connection with the text. The color scheme of the book--orange and black--seems more appropriate for Halloween than for an annual report.

Throughout the book, multiple "headlines" in dreary gray and black fight for attention on the same page. Many of these are banal catchphrases, such as "market driven" or "customer partnering."

In addition, the print job is poor, muddy, and off-register.

Our overall impression: disheartening, shallow, antagonistic, not particularly informative.

THIRD

EVERYTHING SHOUTS! in the EG&G annual report. On the cover, the company's name appears in enormous red type, along with commands in boxes, such as "Find it," "Manage it," "Screen it," "Transfer it," and "Sense it."

But the approach seems a bit too bullish for this manufacturer of electronic instruments, located in Wellesley, MA. Sales at the company dipped 3.3 percent year on year, and operating income fell some 2 percent.

Inside the report are garish headlines that are part of what passes for contemporary design.

In short, we can't really "Comprehend it." So we decided to "Discard it"--to the list of the world's worst, that is.

FOURTH

Coda Energy's annual report has the look of a broadsheet newspaper, similar to USA Today. The publication is divided into four sections, one of which engages in a lively financial review. There's even a "Heard on the Street" piece, bylined by Coda's "in-house general counsel," Joe Callaway.

But Callaway ought to know better: That column title is the copyrighted property of Dow Jones, publisher of The Wall Street Journal.

Even more tacky are the tombstone advertisements throughout the book, taken out by some of the company's vendors, lenders, and suppliers, including NationsBank, Banc One, and Southwest Securities.

In an angry phone call, Douglas H. Miller, CEO of the Dallas-based oil and gas company, defended solicitation of the ads. But such a practice is a form of corporate heavy-handedness that purists hope doesn't catch on. With the emergence of summary reports, annuals have been watered down enough. Attempting to turn them into a profit center would make things even worse.

FIFTH

Years back, annuals produced by oil companies ranked as the worst. In recent years, biotechnology companies have stolen that crown of thorns.

The annual report of Genetics Institute, based in Cambridge, MA, is a case in point. Working from a progressive theme on the cover "Shaping the Future"--the company proceeds to describe itself as a global operation "with considerable strength in developing and manufacturing therapeutic products."

What President and CEO Gabriel Schmergel neglects to address in his message to shareholders is red ink equivalent to 81 cents a share, Genetics Institute's fifth consecutive year of losses. That particular statistic appears only in the back-of-the-book financials.

It's certainly not unusual for fledgling biotech concerns to lose money, while they spend heavily on R&D and await the commercialization of products. But it's precisely for that reason industry executives should be forthcoming in their public communications--particularly in their highly visible annual reports--and bite the bullet in plain sight.

SIXTH

In TransTechnology's annual report, Chairman, President, and Chief Executive, Michael J. Berthelot modestly assesses the Union. NJ-based company that makes aerospace and industrial products: "In my opinion. what has been performed at TransTechnology over the past year could be held out as an example of what American business is really all about. You name it, we did it."

Unfortunately, that doesn't apply to producing a top-notch annual report. The first tip-off that amateurs had a hand in this book: the staged look of the color photograph of the CEO, with hands folded neatly in front of him, surrounded by his equally stiff corporate officers. His picture in the letter to shareholders and the one with the board of directors are no better.

Oddly enough, the supposedly "technically sophisticated" company's operations break down into a pair of simple one-page sections: aerospace and industrial products, each with only a few paragraphs of text.

Obviously, TransTechnology could have done it better.

SEVENTH

How's this for a catchy introduction in the Glycomed annual report? "An ongoing priority since Glycomed's inception has been the generation of a sustainable flow of novel lead molecules to treat important diseases."

No doubt important, perhaps vital, but hardly the stuff of which best-sellers are made, and probably over the average stockholder's head.

It doesn't get any better. The design and strange color choices, particularly an un-appetizing yellowish-brown tint to two employees' photographs, are unattractive.

Even worse, this is among the 12 percent of reports missing a financial highlights page, too often an indication of trouble. So it is with Alameda, CA-based Glycomed, as the pharmaceuticals company posted its fifth consecutive loss. Meanwhile, Chairman, President, and Chief Executive Alan R. Timms receives no points for honesty, as he fails to address the loss--this one seven times greater than five years earlier. He concludes with the dutiful, "I look forward to keeping you updated on our progress." Such as it is.

Avoiding finances, Timms instead writes about employees. "In all of our efforts, we recognize our employees' invaluable contributions...[which] are essential to the achievement of our corporate goal." Ironically, less than a year later, the company actually slashed its work force by nearly a third "to conserve cash"--a possibility the annual report didn't even hint at.

Isn't confession supposed to be good for the soul?

EIGHTH

An annual report that trades substance for design can only be a disaster.

Take Dayton, OH-based Standard Register's monstrosity of a book. It supposedly integrates "the best of paper and technology," whatever that means. The confusing letter to shareholders runs over 13 pages, marred by a multitude of unfortunate graphic tricks: full-page color photographs with red headlines, reverse type on a spectrum of colors, and concurrently running text. For instance, the explanation accompanying the headline, "Targeting for Results," is written in purple type in a mustard-colored square. This text runs into the lines of the letter itself. Thus, readability is virtually nil.

The letter is signed by both President and CEO John K. Darragh and Chairman Paul H. Granzow, so we assume they jointly accept the blame for it.

The company, which manufactures business forms and data systems equipment, had a fine year financially, but overenthusiasm is no excuse for allowing design pretensions to ruin a report.

NINTH

Northwestern Steel and Wire's book has few, if any, redeeming qualities. It racks up a record 11 zeroes in the 15 categories comprising our 135-point criteria for best annual reports.

The report's cover is uninviting, a white page with a right-hand corner picture--slightly larger than a postage stamp. Inside, there are no photographs, only lots of text, three graphs, and headings in orange type.

In the letter to shareholders, President and CEO R.N. Gurnitz mentions pro forma income of 42 cents a share and notes that charges related to income tax accounting and potential pension liabilities impacted the bottom line, but he never specifically cites the company's net loss of $47.7 million.

This report is certainly nothing to write home about.

TENTH

USX Corp. doesn't publish an annual report, and we can only be relieved after seeing the ones it turned out for each of its publicly held subsidiaries: Marathon Group, U.S. Steel Group, and the Delhi Group.

Minimalist is the only way to describe them.

These individual reports are printed on the thinnest paper imaginable, comparable to that used for proxy statements. Under the headline, "A cost-effective annual report," which appears in each of the three separate documents, Pittsburgh-based USX explains that "publishing three traditional reports with color photos and heavy paper would greatly increase the cost of our shareholder communications. Instead, we are achieving substantial savings by publishing three reports on light, recycled paper without photos."

That, however, is at the expense of fluid, consistent communications to shareholders and other readers. This economy kick demonstrates a decided lack of judgment for a major oil, gas, and steel conglomerate.

WHAT CONSTITUTES A GOOD ANNUAL REPORT

After 11 years of spotlighting annual reports on these pages, it's clear the good ones contain certain essentials. For instance, text should be forthright--that is, there should be no long, slow windup before the news, even if disappointing. At the same time, a report should be informative and contain full financial disclosure.

Contributing Editor Sid Cato's copyrighted criteria for judging the best and worst annuals are based on a 135-point-maximum scorecard that rewards those possessing the following characteristics:

1. Action. The cover should lure the recipient into opening the report and turning the pages. The report should use various readership-enhancing devices--an intriguing cover statement, textual callouts, boldfaced lead-ins, subheads, bulleted paragraphs. Its layout should be open and inviting, and the descriptive table of contents should be comparable to that in every newspaper and magazine. (10 points)

2. Readability. Write clear, sprightly copy, eschewing gobbledygook. (10 points)

3. Information. Inform the reader fully through a special section, mission statement, or glossary of terms. (10 points)

4. Prospects. In a grid or matrix, identify the competition and provide market position and market share, a breakdown of operations, results, and prospects. (5 points)

5. CEO Photo. Picture the company's chief executive in a candid, congenial pose, preferably leading off the letter to shareholders. (5 points)

6. Responsibility. Assume responsibility, alongside the auditors, for the financials. (10 points)

7. Biographies. Present biographical data on officers and directors--more than simply their age and the year they joined the board or company. (10 points)

8. Innovation. Break new ground. Ensure the report is not run-of-the-mill. (5 points)

9. Focus. Display a discernible point of view and a clearly stated, tautly executed theme. (5 points)

10. Impression. Convey a favorable image of the organization. (10 points)

11. Disclosure. Include more financial data than what's customary or required by the Securities and Exchange Commission (five years). Supplement all graphs with succinct, understandable captions. (15 points)

12. Honesty. Rhetorical commitment is where it's at. (10 points)

13. Involvement. Exhibit CEO involvement, at a minimum, in the letter to shareholders. (10 points)

14. Articulation. Present the CEO's view of the company's present and future mission and goals. (15 points)

15. Yecch. Is the report likable? Does it have redeeming qualities? (5 points)

LETTERS YOU CAN BE THE BOSS WROTE

While this year's crop of letters to shareholders fall short on honesty, many of the missives have an engagingly personal touch.

Take the little gem in Boise, ID-based TJ International's book. Written with a folksy tone, the letter includes the work and home phone numbers of the building-products company's co-founder and chairman, Harold E. Thomas, and president and CEO, Walter C. Minnick. This is certainly a first in the annual report industry.

New York-based Ann Taylor Stores Corp.'s Sally Frame Kasaks, chairman and CEO, likewise emerges in the letter as a flesh-and-blood human being rather than an electronic device endowed with editorial skills. Deftly using the first-person, she zeros in on the apparel company's growth prospects and provides a concise recap of the past year.

Some executives take a more artistic approach. Champion Enterprises' Walter R. Young Jr., chairman and president of the Auburn Hills, MI, builder of manufactured homes and mid-sized buses, begins by reciting a bit of poetry seen on a church wall.

"There is no such thing as status quo We're bound to either wilt or grow, This life is one of constant movement Self-decay or self-improvement."

Back to more prosaic prose, Iowa-based EMC Insurance Group President Bruce G. Kelley strikes a common chord with that universal topic of conversation: the weather.

"As I write these comments, it's 48 degrees below zero in South Dakota. Outside my office window in Des Moines, it's 21 below zero, with a wind chill. A few months from now, it could be well over 100 degrees with unbearable humidity levels. Yet, regardless of what each season brings...Midwesterners are constantly preparing and planning to make the most of whatever comes their way. Such is the case for EMC Insurance Group Inc. and the changing seasons that affect the insurance industry."

Another insurance company, AFLAC in Columbus, GA, takes the seafaring route in its letter to shareholders. President and CEO Daniel P. Amos explains, "Like the boatman in our ads, who successfully battles the wind and waves, our company is agile, experienced and responsive to an ever-changing and often turbulent environment....Our agility, experience and flexibility will help AFLAC weather change in the future."

Despite the dearth of honest letters this year, we did find one that doesn't sugarcoat bad news. Omaha, NE-based American Business Information CEO Vinod Gupta says, "Our 1993 financial results...while showing acceptable growth to the average person, were frankly a disappointment to us."

Coca-Cola's annual came within a point of making the 10 best list, and one of the reasons is Chairman Roberto C. Goizueta's no-nonsense communique. He writes: "We also endured the coldest, rainiest summers in the recent histories of both Japan and Europe, which further negatively impacted soft drink sales in markets accounting for more than a third of our international unit case volume. Times were tough, but we did not flinch.

"In other words, we stuck to our commitment to do what is best for our business for today and tomorrow."

Microsoft's book ranks as one of the 50 most readable. In keeping with the book's theme--"Architects of the Future," CE's Chief Executive of the Year William H. Gates III observes, "The electronic revolution has arrived, full force. And with it has come vast changes in how we work, how we play, how we interact, and even how we think.

"But with every advance and every success, we have also become more aware of how far we still need to go...The company revolution is still in its infancy--with great possibilities still in front of us."

Sid Cato, a former corporate officer and author, has been at this stand for the last 11 years, monitoring the world's annual reports, now from his vantage point in Kalamazoo, MI. He is president of Cato Communications, as well as editor/publisher of Sid Cato's Newsletter on Annual Reports.