Michelle Leder presents "Diving into the 10-Q," the third part of a free, multi-part webinar series, "SEC Filings Master Class," hosted by the Donald W. Reynolds National Center for Business Journalism. Check out additional materials from the webinar at the following link: http://businessjournalism.org/2012/11/12/sec-filings-master-class-self-guided-training/. For more information about free training for business journalists, please visit businessjournalism.org.

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

2. 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).

3. 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 Photo by flickr user Featheredtar
standardized than the 10-
K, making them trickier to
navigate.

4. 10-Q table of contents

5. 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
• Exhibits, especially those starting with the
number 10

6. 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

7. 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
• Anything filed after 4 p.m. on a Friday

8. 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 non-business event (the presidential
election)
• 8% of all 8Ks are filed after 4 p.m. on Friday!
Photo by flickr user wyofile Photo by flickr user WarmSleepy

9. Other key filings: ownership
• Forms 3,4,5 (ownership
by directors,officers)
• 13D, 13G (5% holders)
• 13F (institutional
investors)
Photo by flickr user marc falardeau

10. 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
• Facebook filed 8 amended filings before
going public last May.

11. Other key filings: M&A
• PREM14A: preliminary merger filing, filed by
company being acquired
• DEFM14A: final merger proxy
• S-4 (securities in biz combination)

12. From the merger proxy

13. 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

14. Homework: Facebook earnings
• Facebook released
its earnings a few
weeks ago.
• Take a closer look
at the release and
give me three bullet
points on what
jumps out at you.