Michelle Leder, founder of Footnoted.com, 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 http://bit.ly/secfilings2013. For more information about free training for business journalists, please visit http://businessjournalism.org.

1. Diving into the
10-Q and other
key filings
Michelle Leder
editor/founder footnoted
mleder@footnoted.com
@footnoted
Photo by flickr user Derek Keats

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. Quartz had a good round-up
http://qz.com/109325/the-nook-isnt-the-only-thing-dragging-down-barnes-noble-so-are-its-ties-to-founder-
leonard-riggio/

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. 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. 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. 10-Q table of contents

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. POLL QUESTION #2
Companies file 8-Ks to disclose a “material” event.
• True
• False

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. 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. 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. 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. …

15. Quick exercise: The Headline

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. 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. 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. From the merger proxy

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. 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:
cassandra.nicholson@businessjournalism.org
your answer by noon ET Oct. 11 to be entered in
a drawing for Michelle's book.