What's in a 10-K, and where do you find them?

A 10-K is the annual report a public company files with the SEC. Not the glossy one with photographs of employees. The other one — the long document with numbered items and no pictures, filed once a year, covering the same ground in the same order every time.

That last part is what makes it useful. A 10-K is not written freely. The SEC specifies what has to be in it and roughly where, which means the document has a map, and the map is the same for every company that files one. Once you know where things live, you can go straight to the part you want instead of reading two hundred pages to find four paragraphs.

Here is the map.

Part I — what the business is

Item 1, Business. What the company does, how it makes money, who it sells to, what it competes against. For a company you have never looked at before, this is where to start. It is also where a company describes its own advantages in its own words, which is a different thing from the advantages actually being there.

Item 1A, Risk Factors. What could go wrong, as the company itself lists it. This item has a reputation for being boilerplate, and much of it is. The useful part is not the list itself but changes to it. A risk that appears for the first time this year was added by someone, on purpose, after a decision to add it.

Item 1B, Unresolved Staff Comments. Open questions from the SEC that the company has not resolved. Usually empty. Worth noticing when it is not.

Item 1C, Cybersecurity. How the company manages cyber risk and who oversees it. This item is recent — companies have only been required to include it since the end of 2023 — so there is not yet much history to compare against.

Item 2, Properties. What the company owns and leases, and where.

Item 3, Legal Proceedings. Material litigation.

Item 4, Mine Safety Disclosures. Applies to mining companies. For everyone else it says so and moves on.

Part II — what happened, in numbers and in words

Item 5, Market for the company's stock. Where the shares trade, dividends, and share repurchases during the period.

Item 6. Reserved. It used to hold a five-year table of selected financial data. The SEC removed the requirement in 2021 and left the number in place rather than renumbering everything after it. If you are comparing an old filing to a new one and Item 6 disappears, that is why.

Item 7, Management's Discussion and Analysis. Usually called the MD&A. Management explaining, in prose, what the numbers in Part II mean and why they moved. This is the longest continuous piece of writing in the document and the most heavily worked over before filing. It is where a company has the most room to characterize its own results, and therefore where the gap between what happened and how it is described is widest.

Item 7A, Quantitative and Qualitative Disclosures About Market Risk. Exposure to interest rates, currencies, commodities.

Item 8, Financial Statements and Supplementary Data. The audited statements, plus the notes. The notes are longer than the statements and carry most of the specifics — how revenue is recognized, what the debt looks like, what the leases commit to, what the company is assuming when it makes an estimate. If a number in the statements looks strange, the explanation is in the notes.

Item 9, Changes in and Disagreements with Accountants. Ordinarily empty. Rarely uninteresting when it is not.

Item 9A, Controls and Procedures. Whether the company's internal controls over financial reporting are effective, and whether the auditor agrees.

Item 9B, Other Information. A catch-all.

Item 9C, Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Relevant to companies audited in jurisdictions the PCAOB cannot inspect.

Part III — governance

Items 10 through 14 cover directors and officers, executive compensation, share ownership, related-party transactions, and auditor fees. Most large companies do not print these in the 10-K itself. They incorporate them by reference from the proxy statement, which is a separate filing. If Part III looks suspiciously short, that is what happened, and the proxy is where the content actually is.

Part IV — the exhibits

Item 15, Exhibits and Financial Statement Schedules. A list, and the exhibits themselves.

The exhibit list is the most underread page in the document. It is where the actual contracts are: credit agreements, indentures, material customer and supplier agreements, employment terms. A company describes its debt in Item 8 and attaches the agreement governing that debt as an exhibit. One is a summary. The other is the thing being summarized.

Item 16, Form 10-K Summary. Optional. Almost nobody uses it.

The 10-Q is the same document, shorter

Quarterly reports follow a similar structure with less in them. Unaudited financials, a shorter MD&A, controls, and then a second part for legal proceedings, risk factor updates, and other disclosures. Risk factors in a 10-Q generally appear only as changes from the annual filing, which makes them faster to read and, quarter to quarter, more informative than the full list.

Where to actually start

For a business you do not know: Item 1, then Item 7, then the notes to the financial statements.

For a business you already know: whatever changed. That is a different task, and it is what most of the rest of this series is about.