Annual Reports the Two Companies Whose Annual

Annual Reports

The two companies whose annual reports are being studied are FedEx and UPS. When looking at these two annual reports, we can see a few key differences. The FedEx report has positive tone. It discusses both the business and the state of the global economy, something that is highly correlated with the company's business. The section on global trade, for example, is almost entirely focused on the state of the economy, rather than on the FedEx business. Another key section is title FedEx Solutions, and this outlines the FedEx business and how the company helps its customers to improve their operations. FedEx also devotes an entire section of its report to energy efficiency, highlighting the company's initiatives and its successes. The Chairman's Letter that leads off the report is focused primarily on providing a summary of the company's business, how the firm fared in the past year and how the company expects to perform going forward. This section is particularly positive, and helps to sell the company (e.g. "we are indispensable to global trade."

The UPS report is drier. The tone of the writing is less personal, as the company highlights its business operations and some of the operating statistics that indicate the successes that the company had in the previous year. UPS provides charts and graphs to help visualize the information. In contrast to FedEx, UPS does not expend much energy outlining the state of the global economy and tying that external environment to its business. UPS has no section on energy efficiency -- just a little blurb on community. There is more text in the UPS report and it is a thicker, more boring read overall. There is little sense of optimism conveyed about the company as a result, and one does not get the impression that the CEO has a true personal stake in the company, standing in direct contrast to Fred Smith.

Both companies discuss their results and their future plans, but there is a clear difference in the effectiveness of these aspects of the presentation. The FedEx Annual Report offers much cleaner, compelling writing, and more importantly allows the reader to see the linkages between the company's actions and the external environment. One is presented with a confident view of the firm that comes across easily. It is not that UPS management is not confident, but they spend less time conveying this confidence. The UPS people are less persuasive in making their case, perhaps in part because they spend less time analyzing their business in the context of the external environment. If the relevant information is locked in the details somewhere, then the UPS report loses those details in its wall of text.