Form 10-K
Encyclopedia
A Form 10-K is an annual report required by the U.S. Securities and Exchange Commission (SEC), that gives a comprehensive summary of a public company
's performance. Although similarly named, the annual report on Form 10-K is distinct from the often glossy "annual report to shareholders,"
which a company must send to its shareholders when it holds an annual meeting to elect directors (though some companies combine the annual report and the 10-K into one document). The 10-K includes information such as company history, organizational structure, executive compensation
, equity
, subsidiaries, and audited financial statements
, among other information.
Companies with more than $10 million in assets and a class of equity securities that is held by more than 500 owners must file annual and other periodic reports, regardless of whether the securities are publicly or privately traded. Up until March 16, 2009, smaller companies could use Form 10-KSB. If a shareholder requests a company’s Form 10-K, the company must provide a copy. In addition, most large companies must disclose on Form 10-K whether the company makes its periodic and current reports available, free of charge, on its website. Form 10-K, as well as other SEC filing
s may be searched at the EDGAR
database on the SEC's website.
In addition to the 10-K, which is filed annually, a company is also required to file quarterly reports on Form 10-Q
. Information for the final quarter of a firm's fiscal year is included in the annual 10-K, so only three 10-Q filings are made each year. In the period between these filings, and in case of a significant event, such as a CEO departing or bankruptcy
, a Form 8-K
must be filed in order to provide up to date information.
The name of the Form 10-K comes from the CFR
(Code of Federal Regulations) designation of the form pursuant to sections 13 and 15(d) of the Securities Exchange Act of 1934
as amended.
, much briefer, is filed after each of the three quarters that do not have a 10-K filing. Form 8-K
covers special material events that occur between 10-K and 10-Q filings.
A substantial number of firms filed their 10-K as a 10-K405
during the late 1990s and early 2000s. A 10-K405 is a 10-K where the Regulation S-K
Item 405 box on the cover page is checked. Due to confusion in its application, the 10-K405 was eliminated in 2002.
reporting requirements for at least 12 calendar months, that previously have filed at least one annual report, and that are not eligible to file their quarterly and annual reports on Forms 10-QSB and 10-KSB. These shortened deadlines were to be phased in over a three-year period, however in 2004 the SEC postponed the three-year phase in by one year. In December 2005, the SEC created a third category of "large accelerated filers," accelerated filers with a public float of over $700 million. As of December 27, 2005, the deadline for filing for large accelerated filers was still 75 days, however beginning with the fiscal year ending on or after December 15, 2006, the deadline will be 60 days. For other accelerated filers the deadline will remain at 75 days and for non-accelerated filers the deadline will remain at 90 days. For further reading, see the Final Rules http://www.sec.gov/rules/final.shtml section of the SEC's website, referencing Rule 33-8644.
PART I
ITEM 1. Description of Business
ITEM 1A. Risk Factor
ITEM 1B. Unresolved Staff Comments
ITEM 2. Description of Properties
ITEM 3. Legal Proceedings
ITEM 4. Submission of Matters to a Vote of Security Holders
PART II
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
ITEM 6. Selected Financial Data
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 8. Financial Statements and Supplementary Data
ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
ITEM 9A(T). Controls and Procedures
ITEM 9B. Other Information
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance
ITEM 11. Executive Compensation
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
ITEM 14. Principal Accounting Fees and Services
PART IV
ITEM 15. Exhibits, Financial Statement Schedules
Signatures
Market for Registrant's Common Equity, related stockholder matters and issuer purchases of equity securities.
This is the disclaimer that projections as to future performance are not guaranteed, and things could go otherwise.
2. Consolidated Statements of Operation
3. Consolidated Balance Sheets
4. other accounting reports and notes.
Here, also, is the going concern opinion. This is the opinion of the auditor as to the viability of the company. Look for "unqualified opinion" expressed by auditor. This means the auditor had no hesitations or reservations about the state of the company, and the opinion is without any qualifications (unconditional).
of a public company
. They usually are founders of the company or large mutual fund
companies, and because of how much stock they own, they usually have access to the board of directors
of the company and hold significant sway over the company.
Five percent owners must also file Schedule 13d
with the SEC.
Public company
This is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...
's performance. Although similarly named, the annual report on Form 10-K is distinct from the often glossy "annual report to shareholders,"
Annual report
An annual report is a comprehensive report on a company's activities throughout the preceding year. Annual reports are intended to give shareholders and other interested people information about the company's activities and financial performance...
which a company must send to its shareholders when it holds an annual meeting to elect directors (though some companies combine the annual report and the 10-K into one document). The 10-K includes information such as company history, organizational structure, executive compensation
Executive compensation
Executive pay is financial compensation received by an officer of a firm, often as a mixture of salary, bonuses, shares of and/or call options on the company stock, etc. Over the past three decades, executive pay has risen dramatically beyond the rising levels of an average worker's wage...
, equity
Ownership equity
In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists...
, subsidiaries, and audited financial statements
Financial statements
A financial statement is a formal record of the financial activities of a business, person, or other entity. In British English—including United Kingdom company law—a financial statement is often referred to as an account, although the term financial statement is also used, particularly by...
, among other information.
Companies with more than $10 million in assets and a class of equity securities that is held by more than 500 owners must file annual and other periodic reports, regardless of whether the securities are publicly or privately traded. Up until March 16, 2009, smaller companies could use Form 10-KSB. If a shareholder requests a company’s Form 10-K, the company must provide a copy. In addition, most large companies must disclose on Form 10-K whether the company makes its periodic and current reports available, free of charge, on its website. Form 10-K, as well as other SEC filing
SEC filing
An SEC filing is a financial statement or other formal document submitted to the U.S. Securities and Exchange Commission . Public companies, certain insiders, and broker-dealers are required to make regular SEC filings. Investors and financial professionals rely on these filings for information...
s may be searched at the EDGAR
EDGAR
EDGAR, the Electronic Data-Gathering, Analysis, and Retrieval system, performs automated collection, validation, indexing, acceptance, and forwarding of submissions by companies and others who are required by law to file forms with the U.S. Securities and Exchange Commission...
database on the SEC's website.
In addition to the 10-K, which is filed annually, a company is also required to file quarterly reports on Form 10-Q
Form 10-Q
Form 10-Q, also known as a 10-Q or 10Q is a quarterly report designed to give a status of how a business is doing after three months of operation. These reports generally compare last quarter to the current quarter and last years quarter to this years quarter. The SEC put this form in place to...
. Information for the final quarter of a firm's fiscal year is included in the annual 10-K, so only three 10-Q filings are made each year. In the period between these filings, and in case of a significant event, such as a CEO departing or bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
, a Form 8-K
Form 8-K
Form 8-K is a very broad form used to notify investors of any material event that is important to shareholders or the United States Securities and Exchange Commission. This is one of the most common types of forms filed with the SEC...
must be filed in order to provide up to date information.
The name of the Form 10-K comes from the CFR
CFR
CFR can refer to:* Code of Federal Regulations of the United States* Council on Foreign Relations, U.S. foreign policy think tank* Campaign finance reform in the United States* Cost and Freight, word used in international commerce...
(Code of Federal Regulations) designation of the form pursuant to sections 13 and 15(d) of the Securities Exchange Act of 1934
Securities Exchange Act of 1934
The Securities Exchange Act of 1934 , , codified at et seq., is a law governing the secondary trading of securities in the United States of America. It was a sweeping piece of legislation...
as amended.
Related Forms
Unlike the 10-K filed annually, other forms serve related purposes, but have different schedules. Form 10-QForm 10-Q
Form 10-Q, also known as a 10-Q or 10Q is a quarterly report designed to give a status of how a business is doing after three months of operation. These reports generally compare last quarter to the current quarter and last years quarter to this years quarter. The SEC put this form in place to...
, much briefer, is filed after each of the three quarters that do not have a 10-K filing. Form 8-K
Form 8-K
Form 8-K is a very broad form used to notify investors of any material event that is important to shareholders or the United States Securities and Exchange Commission. This is one of the most common types of forms filed with the SEC...
covers special material events that occur between 10-K and 10-Q filings.
A substantial number of firms filed their 10-K as a 10-K405
Form 10-K405
Form 10-K405 is an SEC filing to the US Securities and Exchange Commission that indicates that an officer or director of a public company failed to file a Form 4 on time, in violation of Section 16 - meaning that they did not disclose their insider trading activities within the required time...
during the late 1990s and early 2000s. A 10-K405 is a 10-K where the Regulation S-K
Regulation S-K
Regulation S-K is a prescribed regulation under the US Securities Act of 1933 that lays out reporting requirements for various SEC filings used by public companies...
Item 405 box on the cover page is checked. Due to confusion in its application, the 10-K405 was eliminated in 2002.
Filing Deadlines
Historically, Form 10-K had to be filed with the SEC within 90 days after the end of the company's fiscal year. However, in September 2002, the SEC approved a Final Rule that changed the deadlines to 75 days for Form 10-K for "accelerated filers"; meaning issuers that have a public float of at least $75 million, that have been subject to the Exchange Act'sSecurities Exchange Act of 1934
The Securities Exchange Act of 1934 , , codified at et seq., is a law governing the secondary trading of securities in the United States of America. It was a sweeping piece of legislation...
reporting requirements for at least 12 calendar months, that previously have filed at least one annual report, and that are not eligible to file their quarterly and annual reports on Forms 10-QSB and 10-KSB. These shortened deadlines were to be phased in over a three-year period, however in 2004 the SEC postponed the three-year phase in by one year. In December 2005, the SEC created a third category of "large accelerated filers," accelerated filers with a public float of over $700 million. As of December 27, 2005, the deadline for filing for large accelerated filers was still 75 days, however beginning with the fiscal year ending on or after December 15, 2006, the deadline will be 60 days. For other accelerated filers the deadline will remain at 75 days and for non-accelerated filers the deadline will remain at 90 days. For further reading, see the Final Rules http://www.sec.gov/rules/final.shtml section of the SEC's website, referencing Rule 33-8644.
Parts
Every annual report contains 4 parts and 15 schedules. They arePART I
ITEM 1. Description of Business
ITEM 1A. Risk Factor
ITEM 1B. Unresolved Staff Comments
ITEM 2. Description of Properties
ITEM 3. Legal Proceedings
ITEM 4. Submission of Matters to a Vote of Security Holders
PART II
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
ITEM 6. Selected Financial Data
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 8. Financial Statements and Supplementary Data
ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
ITEM 9A(T). Controls and Procedures
ITEM 9B. Other Information
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance
ITEM 11. Executive Compensation
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
ITEM 14. Principal Accounting Fees and Services
PART IV
ITEM 15. Exhibits, Financial Statement Schedules
Signatures
Item 1 - Business
This describes the business of the company: who and what the company does, what subsidiaries it owns, and what markets it operates in. It may also include recent events, competition, regulations, and labor issues. (Some industries are heavily regulated, have complex labor requirements, which have significant effects on the business.) Other topics in this section may include special operating costs, seasonal factors, or insurance matters.Item 1A - Risk Factors
Here, the company lays out anything that could go wrong, likely external effects, possible future failures to meet obligations, and other risks disclosed to adequately warn investors and potential investors.Item 2 - Properties
This section lays out the significant properties, physical assets, of the company. This only includes physical types of property, not intellectual or intangible property.Item 3 - Legal Proceedings
Here, the company discloses any significant pending law suit or other legal proceeding. References to these proceedings could also be disclosed in the Risks section or other parts of the report.Item 4 - Submission of Matters to a Vote of Security Holders
Disclosures that must be stated regarding officers.Item 5 - Market
Gives high's and low's of stock, in a simple statement.Market for Registrant's Common Equity, related stockholder matters and issuer purchases of equity securities.
Item 6 - Consolidated Financial Data
In this section Financial Data showing consolidated records for the legal entity as well as subsidiary companies.Item 7 - Management's Discussion and Analysis
Here, management discusses the operations of the company in detail by usually comparing the current period versus prior period. These comparisons provide a reader an overview of the operational issues of what causes such increases or decreases in the business.Forward Looking Statements
This is the disclaimer that projections as to future performance are not guaranteed, and things could go otherwise.
Item 8 - Financial Statements
1. Independent Auditor's Report2. Consolidated Statements of Operation
3. Consolidated Balance Sheets
4. other accounting reports and notes.
Here, also, is the going concern opinion. This is the opinion of the auditor as to the viability of the company. Look for "unqualified opinion" expressed by auditor. This means the auditor had no hesitations or reservations about the state of the company, and the opinion is without any qualifications (unconditional).
Five percent ownership
Five percent ownership refers to companies or individuals who hold at least 5% of the total value of the stockCommon stock
Common stock is a form of corporate equity ownership, a type of security. It is called "common" to distinguish it from preferred stock. In the event of bankruptcy, common stock investors receive their funds after preferred stock holders, bondholders, creditors, etc...
of a public company
Public company
This is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...
. They usually are founders of the company or large mutual fund
Mutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
companies, and because of how much stock they own, they usually have access to the board of directors
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
of the company and hold significant sway over the company.
Five percent owners must also file Schedule 13d
Schedule 13d
Schedule 13D is an SEC filing that must be submitted to the US Securities and Exchange Commission within 10 days, by anyone who acquires beneficial ownership of more than 5% of any class of publicly-traded securities in a public company...
with the SEC.