Ed and bob01721,
Other than now being WAY OT, I think you're both right and both wrong.
Ed is correct that the "slick" annual report contains a lot of fluff and "puffery" and one would be wise to read the PR parts with a skeptical eye. Particularly the MD&A* part.
bob01721 is correct that the 10k (and 10q's etc.) are formal filings to the SEC that provide as much as possible a true and accurate presentation of a Company's financial condition, including a much detailed discussion of it's contigent liabilities etc. And, yes it is very boring reading.
Ed is wrong in that he neglects to point out that the Annual Report also includes independently-audited financial statements that, absent fraud and misrepresentation (e.g. Enron), accurately reflect the financial condition of the company.
bob01721 is wrong in that he places full faith and credit in the 10k and does not recognize that there are indeed Enrons out there that will defraud in their formal filings just as they do in their PR ARs. That was the basis of the Federal criminal action - fraud on the SEC.
Now, how about we send this thread into the dungeon with Wiggy?
*MD&A: Management Discussion and Analysis (also there is the "forward looking statement").