What’s All This About ‘Novel’

Accounting Practices?

How Some Great Authors Might Have Written

Recent Corporate Earnings Reports

orporate accounting practices have proven corporate earnings to be more fiction than fact in far too many cases this year.  The bizarre and convoluted paper trails we’ve been following in The Wall Street Journal and other business publications read like the plots of page-turners on The New York Times Best-Seller List. So, what better way “to commemorate the largest bankruptcy in U.S. history (WorldCom), this year's crisis in market confidence, and all the pervasive prevarication that made it possible" than to sponsor a “Best Fictional Earnings Release Contest”? That’s just what Gregory FCA, a leading investor and public relations firm, based in Ardmore, Pennsylvania, did this August.

            Participants were invited to pick their favorite failing public company and rewrite its last annual earnings report in the style of their favorite author. The top three entries are published below, with Gregory FCA’s permission.  Other entries, including a steamy depiction of how a Danielle Steele heroine might have “taken” WorldCom chief Bernie Ebbers, can be found on the Gregory FCA Web site (www.gregoryfca.com). Says Greg Matusky, president of Gregory FCA,  "We would suggest that the recovery has not begun in earnest when so many market followers were willing to spend so much time on the outside chance that they'd win 500 bucks."

            The top prize went to Judy Parr, a course developer for www.MindLeaders.com, an e-Learning company in Columbus, Ohio, who spoofed WorldCom in the world-weary voice of J. D. Salinger’s Holden Caulfield, the cynical teen who could spot a phony a mile away. We assume she won’t be investing that money in the stock market any time soon.

            Parr beat out 34 other entries. Second prize (and $250) went to Jackie Kjono of Minneapolis, Minnesota. Jackie, who wrote about WorldCom in the style of Douglas Adams (“The Hitchhiker’s Guide to the Galaxy”), is a billing clerk in the city’s after-school program. Third Prize (and $100) went to Joanne Eglash, a developer of Web-based educational software from Scotts Valley, California. Martha Stewart Living Omnimedia was the target of Joanne’s spoof, written in the style of Lewis Carroll. Indeed, Martha bears more than a passing resemblance to Alice in Wonderland.  A lot of stockholders have been left wondering, 'Who stole the tarts?' And more than a few fallen corporate execs are finding, to their dismay, that they feel like Humpty Dumpty right now.

            If these corporate execs turn to fiction-writing in their second careers, we may be in for the next Golden Age of Literature.

FIRST PRIZE

WorldCom

Style: In the voice of J.D. Salinger’s Holden Caulfield,

from “The Catcher in the Rye”

Author: Judy Parr

            If you really want to hear about it, the first thing you'll probably want to know is where all these profits came from and why all these acquisitions went sour, what our net income is, and why WorldCom stock prices are in the toilet, but I don't feel like going into it, if you want to know the truth. In the first place, that stuff bores me, and in the second place, my family and friends would have about a dozen hemorrhoids apiece if I passed along too many details. Especially my church connections. Some of them get totally florid about depravity and anything like that.

            It wasn't all my fault, if you want to know the truth. Standard auditing practices are something I really don't understand too hot. You never know exactly how well you're doing. I keep making up these rules for myself, and I break them right away. Auditing is something I just don't understand.

           As far as financial reporting, all you have to do is say something nobody understands, and auditors'll do anything you want them to. And the SEC; they're all a bunch of phonies. What those guys are doing to free enterprise totally depresses me.

            Looking back on all I've tried—coaching, running motels, telecommunications—maybe I just didn't apply myself as I should have. Maybe I'm just a lapsed Calvinist with a perverted work ethic. But I had this dream, see. There are these thousands of little kids in an amusement park. Some are riding a carousel, riding those horses up and down, and trying to reach up to grab a golden ring. And some of them almost fall off, because they're reaching so high. And I'm running around like crazy on the edge of the carousel, dizzy as I try to catch each one of them before they fall.

            And lots of other kids are riding some kind of high-flying tilt-a-whirl with octopus arms, and loopty-planes. I look up and there is all of this stuff just falling out of the sky—coins and paper money, diamonds and rubies, billfolds and purses, stock options and golden parachutes. And I'm like a pelican, flying around with my mouth wide open, grabbing all of this stuff as fast as I can, a fetcher in the sky.

            Then I'm struck with this awful falling feeling, like I'm going down, down, down, and nobody's ever going to see me again. And the tilt-a-whirls and loopty-planes are shaking and crashing down around me. The dust is swirling and smoke is getting into my eyes. Then all of a sudden, I start crying. I can't help it, and I can't stop. Once you get started crying, you can't just stop it on a dime, you know.

            That's all I'm going to tell you about. I could tell you more, especially about last year's net income and projections for next year, but projections just make me want to puke. Frankly, it all depresses me. If you want to know the truth, I don't know what the hell to say. I probably said too much already.

—Bernard "H. C." Ebbers

SECOND PRIZE

WorldCom

Style: Douglas Adams (“The Hitchhiker’s Guide to the Galaxy”)

Author: Jackie Kjono

WORLDCOM REPORTS THIRD QUARTER EARNINGS

PER SHARE OF REALLY QUITE A LOT

          Clinton, MS (June 1, 2002) — WORLDCOM, Inc. (NASD:WCOMME) today reported net income from operations of a huge, flipping mountain of cash for the June quarter. Diluted earnings per share declined six percent compared with prior year earnings per share, but who would want to dilute a neat thing like earnings anyway. Net income from operations declined five percent compared with prior year earnings, primarily due to the continued inability of people to use our cell phone service while in the hospital having operations.

           Commenting on the quarter, WorldCom Chairman and Chief Executive Officer Bernie Ebbers said, “I know some of you were expecting to hear actual numbers in the Earnings Report.  The trouble is that the numbers are so amazingly huge that we thought the news would give all our investors heart attacks. We want to wait and release them after we have established a controlling interest in certain medical device manufacturers and pharmaceutical companies.  We are always looking out for our shareholders’ best interests here at WorldCom.

          “Some of you may wonder how we were able to make so f$#%ing much money. Well, at the beginning of the quarter, I was informed by a mysterious gentleman who appeared in my office that one of our subsidiaries would develop time travel in another 20 years.  He than gave me an almanac of horse-racing winners, and a CD-Rom with the next 20 years of The Wall Street Journal in digest form .

          “Based on what I have found from reading those future issues of the Journal, WorldCom is going to make a mind-bendingly, gravitational field-warpingly, even-Alan-Greenspan-might-find-something-nice-to-say huge amount of money in the future.  In fact, our internal accounting office will have to develop a new form of calculus called Barnumometry just to compute the numbers.

          “So you can all sleep soundly knowing your money is safe with us.”

Auditor’s Report

I would party with these guys any day of the week!

— Jeb Ebbers, Bernie’s kid brother

THIRD PRIZE

Martha Stewart Living Omnimedia

Style: Lewis Carroll (“Alice’s Adventures in Wonderland”)

Author: Joanne Eglash

            “Curiouser, and even more curious,” said Martha, as she stepped cleanly and in a most organized manner through the beautifully polished and clear Looking Glass (Martha’s secret formula: a dash of her homegrown rosemary mingled with just a dab of her home-made window-polishing liquid).

            “I’m late; I’m late, but you’ve always got a date,” said the white rabbit, whom Martha recognized as one of the herd that she had bred, fed, and, of course, put to bed.

            A pair of twins (not terribly well-dressed, but Martha knew that she could think of a solution) came dashing up to Martha. “I’m Publishing,” said the first twin.  “I’m Television,” said the second twin. 

            Suddenly, a third twin (which Martha, as she thought about it, recognized must be a triplet, which made them a pair of triplets, or should that be a trio of triplets? She knew that there had been a TV show that she had done about that at some time…or was it a magazine article?  Martha turned to her ever-present wireless organizer) rushed up to her.

            “I’m merchandising, and the Internet,” said the third plump person.

            “Would you like to know my secrets for keeping fit?” Martha kindly offered (Martha Stewart is renowned for her generosity).  

            But this last twin (or was it a triplet?) began to weep.  “I’ve heard that those who are your friends and whom you help must repay you in the end,” and the tears dripped and formed a brook that reminded Martha of one of the brooks on her estate.

            “Look to the future,” said Martha, nibbling on a delicately sliced cucumber sandwich that she (how very peculiar!) had suddenly discovered in her hand.  And (even more curious) she found herself growing and growing.

            “Just remember,” she called down to the threesome as she soared up to the sky, “I receive more than 300,000 letters annually from my people, and I must grow to meet their needs. It’s a good thing!”

            For investors who prefer a summary, please note that it was always brillig this year.  Martha and her staff successfully groomed the slithy toves, despite their insistence on gimbling in the wabes. A successful theme throughout the year in the magazines, on TV, and in merchandise has been ways to outsmart the Jabberwock, both for sons and for daughters. Martha also received extensive positive publicity for her cultivation of the Tumtum tree throughout the world.

            As a result, investors should feel beamish and have a frabjous day and year!