1.	The first 2002 annual report to achieve what you call "world-class" status didn't do all that much for you. True or false? Answer: To be sure. Andrew Corp.'s 2002 report is well designed, forgetting that its CEO prefers to refer to himself as "doctor," a term I submit is pompous as all-get-out (reserved for physicians). But its writing! There's reference to "attached charts," when what's meant is "accompanying." Attached they're not. Also, employees aren't identified by name, meaning they're viewed by management (which always is fully identified) as little more than cannon fodder. And its letter—listen to this: "Fiscal 2002, our 65th year of operations, proved to be one of the most challenging years..." I'd have written, "proved to be one of the most challenging..." A sentence or two later: "The next several pages...address several..." Sloppy, at best. So many faults, tending to offset the positives: graphs galore, none of them fully captioned (that is, their meaning spelled out, not left for the reader to fathom); no management's signoff for its responsibility for the financials. Positives, like 11-year financial data, as advocated, helped edge it up to the 100-point mark, though writing cost it three of a potential 10 points, average words per sentence 20.0, along with an excessive fog index of 12.40. At least it's honest.
	2.	Well, how's about some good news: Having learned their lessons, corporations here and abroad are hewing to the line in their 2002 reports. That is, telling "the truth, the whole truth so help me God." True or false? Answer: True, essentially. Among the first annuals in for 2002, 86% were seen as sufficiently forthright. That's flat with two years earlier—among 2000 reports—if an improvement over last year's four in five. But my contention is that every CEO should tell the truth; that figure should approach 100%.
	3.	Various bodies have insisted CEOs should accept responsibility for integrity of the financials, in the annual report among other places. And it's happening. True or false? Answer: False. More CEOs than you might imagine are continuing to eschew signing off on integrity of the financials. Some are including no signatures whatsoever. A precious few among early 2002s went the other way: The CEO of Williams Cos., for instance, signed off on the financials, as did its chief financial officer—as did three members of its audit committee.
	4.	Well, at least the form 10-K has all but disappeared from the scene among early 2002s. True or false? Answer: False. One in six early-arriving 2002s includes the legalistic, SEC-required filing document, the Form 10-K—but as part of their annual report to shareholders, if not essentially the main portion. Worse, many don't bother identifying on the report cover their document as truncated, abbreviated.
	5.	Your vocal opposition to EBITDA has taken its toll. True or false? Answer: False. This is the first year to officially monitor use of that "fast shuffle"—which we announced months ago henceforth would automatically take five points off a company's score. To date, nearly one in four firms is falling back on EBITDA. Take Robbins & Myers, for instance: Its net income is indicated as having fallen nearly 13% over the past five years, though less than 1% when EBITDA is relied on. EBITDA, of course, is the accounting ploy that stands for "earnings before interest, taxes, depreciation and amortization." You'll never convince me that use of that accounting ploy isn't a sign of bad actors at work. I'm convinced no upstanding company will go the EBITDA route—let alone Robbins & Myers' EBIT (sans definition).
	6.	Well, is there any company whose annual report indicates it's forthright, that it has taken to heart all the criticism of corporate management over the last year? Answer: Sure (meaning: true). Sort of sad that the pioneer in full and open disclosure is an Australian financially oriented firm, Perpetual Trustees Australia Limited. (www.perpetual.com.au) Its transparency is legion; clearly, it's the year's pace-setter, without competition—certainly, not among U.S. companies. It "reeks of rectitude," I wrote in my January newsletter. I could go on and on about its many features, not least a breakdown of directors and the number of board and committee meetings and how many they actually made it to. Plus its five principles of good conduct, seven pages devoted to "corporate responsibility." As if that's not enough, directors are pictured and their credentials cited, including age. And the board is seen to include two women directors. (Of last year's 63% to picture directors, one in six boards was seen to exclude women and/or minorities. Not this firm, though.)
		Addendum: The Great Cato ever make mistakes? Yep. Just discovered a formula was incorrect in an element—NSI—introduced among 2001 reports. A legalistic Form 10-K, in whole or in part, added to an annual report , but Not So Identified...the report, that is, not so identified (on the cover) as truncated. Regardless of what I may have told you previously, the correct numbers are 83.7% among 2001s, running an even 80% so far this year. Meaning, most companies (four out of five currently) that go the down-and-dirty 10K route don't so apprise the recipient up front, without delay. Humble apologies for my goof.