For any business journalist—even if you don’t focus on finance—a public company’s 10-Ks (financial reports for the year) and 10-Qs (quarterly earnings reports) filed with the Securities and Exchange Commission are foundational documents. Both have mounds of information and are accessible through the SEC’s Edgar database. Here are some tips on using them more effectively.
Don’t confuse press releases with the full picture
Public companies provide all sorts of financial documents that are of public record. For example, with every earnings announcement comes a press release, often with accompanying materials. A company typically releases them before they file the official 10-Q with the SEC. Similarly, there’s often a slick “annual report” that can be different from the 10-K.
A company can’t use the extra material to safely say something that wouldn’t pass SEC muster, but it can and will omit large amounts of information that are required in the 10-Q or 10-K. It shouldn’t come as a surprise that companies tend to emphasize the good news and downplay the bad. Have you ever noticed that companies tend to release these other documents a few days before the SEC filings, even though there isn’t a requirement to do so? A public company could file either a 10-Q or 10-K the day they release their results, but likely chooses not to in order for them to lead the narrative with what they want reporters and the public to know.
Edgar is the business journalist’s best friend
The SEC’s Edgar database has an extremely powerful search tool, allowing you not only to search for specific text but also set date ranges and filter results. One of the best features for company beat reporters, though, is its RSS feed capability. Each company’s “home page” on Edgar has an orange “RSS Feed” button that creates a constantly updated feed of that company’s filings; as soon as a new document is published, it appears in the RSS feed which can be viewed in a standard web browser or specialized RSS-feed reader.
10-Ks and 10-Qs are useful year-round
You have no control over when companies release their SEC filings. If they do so after an earnings announcement, neither you, your editors nor your publication can turn back time to have the information a few days before. But there is nothing stopping you from using 10-Ks and 10-Qs differently. For example, you can plan follow-up stories that take deeper dives into what a company has been doing rather than only rushing to get the information out immediately.
When reporting on the company later on in the year, you can return to these documents. How does a developing situation, business condition or market action fit into the company’s filing from the previous quarter, year, or even the previous five years? Do these filings have a pattern to them? Do they align with what the company is publicly saying about its financial health months later? There are a lot of avenues you can explore, so don’t be afraid to refer back to these documents to add extra context to your story.
Don’t rush the story
Like all corporate filings, 10-Qs and 10-Ks tend to present company information in the best light possible. It is written by accountants and lawyers, which means it is full of confusing sentences and legalese. The language can help play down bad news to the average person. Take the time to truly read and understand what the report is saying and try to spell it out in plain language for your readers. This extra step can help ensure you are interpreting the report correctly rather than how the company wants you to interpret it.