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SEC Filings Master Class - Form 10Qs by Michelle Leder


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Michelle Leder, founder of, presents "Diving into the 10-Q and other key filings" as part of the free, three-part, investigative business journalism webinar, "SEC Filings Master Class."

For more information about how to use SEC Filings in your reporting, please visit

For more information about free training for business journalists, please visit

Published in: Business, Economy & Finance
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SEC Filings Master Class - Form 10Qs by Michelle Leder

  1. 1. Diving into the 10-Q and other key filings Michelle Leder editor/founder footnoted @footnoted Photo by flickr user Derek Keats
  2. 2. Homework review: Barnes & Noble • A textbook wholesaler whose majority owner is B&N founder Leonard Riggio did $93.5m in business with the company in 2013. • Company leases office space from another Riggio company. • A trucking company with ties to Riggio family was paid over $50m in 2013.
  3. 3. Quartz had a good round-up leonard-riggio/
  4. 4. POLL QUESTION #1 How often do you at least skim the 10-Q? • I’ve never looked at one. • Once or twice • Periodically for companies I follow • It’s my favorite hobby.
  5. 5. What's a 10-Q all about? • At its essence, it's the quarterly earnings. • But companies often bury things in the Q that are not in the earnings release. • These could be subtle changes or not-so- subtle changes. • Deadline is 40 days after the end of the quarter (for most companies).
  6. 6. How does 10-Q differ from 10-K? • They are filed 3 times a year. • The numbers are unaudited. • 10-Qs tend to be shorter. • 10-Qs are less standardized than the 10- K, making them trickier to navigate. Photo by flickr user Featheredtar
  7. 7. 10-Q table of contents
  8. 8. Focus on these key things • Are the numbers in the earnings release significantly different than the 10-Q? • Notes to consolidated financial statements (aka the footnotes) • Legal proceedings • Goodwill, especially if a company has done any big deals • Employment/severance agreements with top executives
  9. 9. POLL QUESTION #2 Companies file 8-Ks to disclose a “material” event. • True • False
  10. 10. Catch-all filing: the 8-K • Filed for all sorts of reasons -- for everything from an earnings release, or investor presentation, to a CEO leaving suddenly after getting arrested • Commonly thought of as a "material event,” which leaves lots of wiggle room • Actual definition from SEC is "major event," which leaves even more wiggle room. • Must be filed within 4 business days after the event
  11. 11. What to look out for: • Companies burying non-earnings disclosures in an earnings 8-K • Companies filing more than one 8-K on the same day, particularly in earnings season • Companies using the same 8-K to make multiple disclosures about unrelated things • Companies massaging the truth in the filing • Using vague language or making you check another filing for an answer • Anything filed after 4 p.m. on a Friday.
  12. 12. The Friday Night dump • Very common for companies to take out the trash on Friday night after markets closed • Also happens before a holiday, or during a major disaster (Hurricane Sandy) or on odd days when SEC open, but markets are closed (Columbus Day, Good Friday, few others) • 9% of all 8Ks filed in 2012 were filed after 4 p.m. on Friday! • On some Fridays, number is closer to 50%!!! Photo by flickr user wyofile Photo by flickr user WarmSleepy
  13. 13. Quick exercise: The Friday Night Dump • At 5:12 p.m. on the Friday before the long Labor Day holiday weekend, Microsoft filed an 8-K, which is excerpted on the next slide. You’re on your way to the beach for the weekend. Kids in tow. What do you tweet? Photo by flickr user downing.amanda
  14. 14.
  15. 15. Quick exercise: The Headline
  16. 16. Other key filings: ownership • Forms 3,4,5 (ownership by directors,officers) • 13D, 13G (5% holders) • 13F (institutional investors) • Be on lookout for any amended filings here too (4/A, 13D/A, etc) Photo by flickr user Victor1558
  17. 17. Other key filings: Going public • Companies file an S-1 before going public. • This is often the first view of a private company's financials. • Very common for a company to file 5 or more amended S-1s before they go public • Tesla Motors filed 9 amended filings before going public in July 2010. • Twitter filed to go public on Sept. 13, but chose to file documents confidentially so they're not available publicly
  18. 18. Other key filings: M&A • PREM14A: preliminary merger filing, filed by company being acquired • DEFM14A: final merger proxy • S-4 (securities in biz combination) Photo by flickr user jairoagua
  19. 19. From the merger proxy
  20. 20. Merger docs: cheat sheet • Often 200 pages (or longer), so need to pick and choose • Background of the deal is almost always worth reading. • Details on executive pay/perks also worthwhile • Rearranging the deck chairs
  21. 21. Homework: Goodwill games • Read footnote #6 on Page 19 in the 10-Q that Google filed on July 25, 2013. • Now read footnote #4 on Page 12 in the 10-Q that Yahoo filed on Aug. 8, 2013. • Write a paragraph on what is going on. Email: your answer by noon ET Oct. 11 to be entered in a drawing for Michelle's book.