Do you ever focus on the paper stock used in an annual report? If not, why not?

S.C.: You're right, all these years, I've neglected discussing paper stock—an oversight. I understand, though, why it's so: a terribly technical topic, to my way of thinking. Let me say this: An outstanding job can be ruined by poor choice of paper. I used to test clients: Close your eyes and tell me which company is better, more prestigious—based solely on the paper stock proffered. In every instance, the client would opt for the company whose paper was better quality!

Do you have any data concerning what annual report producers are paid?

S.C.: Salaries of producers range from a lowly (by today's standards) $48,750 among 1985 annuals, to today's $88,846 average. That is, in our current survey of AR producers.

What is the difference between a traditional and nontraditional annual report—characteristics of each? NIRI (Ed.: The National Investor Relations Institute) noted the nontraditional report is a 10-K, but from other research, it sounds like a nontraditional format is a summary report. I am a student reseaching design differences in annual reports. Thank you.

S.C.: What a marvelous question; and how perceptive you appear, concerning a terribly esoteric subject. I'd say (from my prejudiced vantage point) that a traditional report is the type I so often evaluate in my newsletter, or online. I agree the 10-K is what I'd call "nontraditional"—more specifically, what some refer to as "the annual report required by the Securities and Exchange Commission." Also, a summary report to my way of thinking would qualify as nontraditional, though it appears to be gaining ground with those who fight like hell to keep from letting shareholders in on what's really going on. You may quote me.

What is the difference between a 10K and a 10K wrap?

S.C.: No difference whatsoever; they're one and the same.

What percentage of annual reports for Fortune 100 companies do you think are written by internal writers who also manage the overall production process?

S.C.: My exclusive survey of annual report preparers indicates only one in four reports is written in-house—that is, by staffers. Frankly, that surprises me greatly; I'd have guessed most writing was done by staffers, with design and photography, for example, handled by outside vendors.

Two-part question: effectiveness of the annual report to shareholders for creditors, employees, customers and financial analysis (editor's note: believe the questioner means "financial analysts"), and advantage and disadvantage of stating well-defined corporate strategies.

S.C.: Sounds like a summer business makeup course. The answers are obvious—if, as I believe, the annual report is the No. 1 corporate communiqué. Its effectiveness for various audiences of course depends on the skill with which it's prepared—by professional communicators, that is. Not only should all corporations have "well defined corporate strategies," of course, but the professional communicators should communicate them to their various audiences, including recipients of the annual. Obviously.

Where on the Internet can I find a list of States that require Annual Reports?

S.C.: I don't believe states require annual reports from publicly held companies—not the kind we monitor...to shareholders. Those are required by a company's stock exchange listing as well as the Securities and Exchange Commission. Not a state.

What is the average cost of annual report production for the insurance or financial services industry?

S.C.: We don't break it down by industry, but the per-copy investment (see online details) stands at $2.82, $3.10 among 2001 books—those responding to our annual Producer Poll, that is. (Have you?????)

What is the difference between an annual report and a 10-K report.

S.C.: The 10-K is the legalistic filing required by the SEC of publicly held companies. The annual report is the popular corporate communication to stockholders.

Can you truly say you're not prejudiced, whatsoever, concerning annual reports you receive? Take Dow Jones, for example, publisher (among other things) of the Wall Street Journal: Would you honesty dare criticize such a powerful voice in the business world?

S.C.: I have a job to do. (It's not my fault if a company decides to do its own thing, to heck with the standards I've set and promulgated more than two decades.) Since you mention Dow Jones: Its 2003 annual report, belatedly received, has many, many admirable qualities. As its daily business journal, and its online presence, it's a good read. How'd it do in my competition? It scored a measly 76 of a potential 135 points, far removed from world-class status. Worst of all, it lost three points for writing, its words per sentence in the shareholder letter averaging a humongous 21.7; 16 is what professional writers strive not to exceed. Does that prove my point?

What is the difference between an annual report prepared for shareholders and one prepared for the SEC?

S.C.: One is proscribed by the government, the other exhibiting—well, a freer approach. Also, one is a legalistic document, the other, intended for popular consumption. For example, the legalistic Form 10-K almost never features color, and is printed on inexpensive, unattractive paper stock.

What does EV/EBITDA stand for, and more important, what does it mean?

Can you point me to recent articles, or information, on market trends of companies continuing to do annuals, or opting for a 10-K only. My company has gone the route of a 10-K wrap over the past few years, but wanted to understand better if a 10-K-only approach in now growing in popularity. I have spent significant time looking on-line, however almost all sources require a subscription! Thanks

S.C.: You need to spend, say, 30 minutes, on my website. Articles and references galore to the "10-K wrap," including, unless I'm mistaken, a dissertation (or two or three or more) on the topic. If you've spent any time whatsoever on my website, you know I strongly oppose the 10-K. It's a government-mandated document—nothing more. Never intended for public consumption. You also would have seen my online poll, with visitors voting for or against the 10-K. Were you a subscriber to my monthly (since September 1983) Newsletter on Annual Reports, you'd know—well, among other things revealed on Pg. 2 of the February newsletter, that fewer than one in four producers favors the summary report. And that roughly one in three companies, last year and so far this, have gone the 10-K route, at least in part.

I am a third-year student doing a project on impact of the online annual report. Currently I am doing a survey on my topic. My question is why large companies provide free annual reports to the public online.

S.C.: Why? Because corporations obviously want to (1) broaden their shareholder base and (2) familiarize new potential investors with the services or products they offer.

How much did Electronic Arts (EA) spend on R&D in 2004?

S.C.: I have absolutely no idea—I'm not even sure Electronic Arts is publicly held. May I suggest you go online and contact the company itself?

How long do companies have, after close of their year, to issue their annual report to shareholders? Is it still three months—like, say, the end of March?

S.C.:A knowledgeable friend from a Pennsylvania public utility said that "In 2000, the New York Stock Exchange extended the window to 120 days, from 90." He suggested one go to the NYSE website, "Listed Company Manual," 203.01 Annual Report Requirement. There, you'll learn of the overriding influence the annual meeting has on when a report must be out: "not less than 15 days prior."

In general, what questions would you ask to decide how to weigh (not weight!) financial ratios when evaluating the financial health of an entity?

S.C.: I haven't a clue. Sorry.

One of our clients (a large aerospace company) is looking into the possibility of replacing its traditional annual report with some variation on a 10-K wrap. While I know you're not a fan of the summary AR, I thought you might have statistics on how many Fortune 100 or 500 corporations have made the switch to a 10-K wrap. I was under the impression that the pendulum was swinging the other way these days, and more companies were returning to a full, traditional report. Can you shed any light on the issue?

S.C.: Of the first 100 2004 reports worldwide I've analyzed in depth, essentially one in three went the 10-K route, in whole or in part (usually, the latter). None, my analysis shows, informed the recipient his or hers wasn't a full-bodied book; i.e., that the legalistic 10-K made up most of the report. None of those to achieve 10-best status relied (in whole or in part) on the 10-K.