Over the years, I have contributed to many annual reports. I know that they can be confusing to read given the language that is often chosen. As a public service to all shareholders and employees out there, here are translations of key phrases you will often see in an annual report.
- We performed well in a difficult economy.
Translation: As usual, we didn't make our numbers, but at least this year we have an excuse.
- I am pleased to report that we continue to make excellent progress on achieving our long-term goals.
Translation: We didn't make our numbers, but we got a little closer this year.
- We were able to deliver shareholder value by managing our costs.
Translation: We laid off employees to make sure that our investors received their dividends.
- We have focused our business.
Translation: We sold off the dogs that were losing money because we didn't know how to manage them. By the way, when our current lines start to lose money, we will sell those, too.
- In these difficult times, we experienced a lot of pain over the past year.
Translation: We had a second round of layoffs in order to increase our profits.
- The pain was shared across the company.
Translation: While we in executive management still received our bonuses, it was difficult to watch from our office windows as employees left the company for the last time.
- Our portfolio contains legacy products with a long record of success behind them.
Translation: A lot of our lines are outmoded, so nobody buys buy them anymore.
- We have a healthy backlog.
Translation: Our manufacturing is so lousy that we can't get product out the door, so the orders just keep piling up.
- We have grown through acquisition throughout our long and proud history.
Translation: We don't know how to innovate, and we put no money into research and development. We know only how to buy other businesses.
- Our brand still appears fresh and new in the market.
Translation: After all these years, they still don't know who we are.