One of the many changes to CAESAR II 2016 was the ability to force a black and white printing mode when printing output reports.  However this has had the side effect of confusing many users as to why their picture outputs now are no longer in color.  To access the new feature to force black and white printing, Go to Environment > CAESAR II Configuration:

Go to Graphics settings on the left, and change Force Black and White Printing to False.

That's it!