The Ultimate Free Skate:Writing the 10K Letter

Kevin M. BrettJ410

May 21, 2013

SEC Disclosure Rules• Annual Report to Shareholders (10K)• Quarterly Earnings Reports (10Q)• Major Unplanned Announcements (8K)

– Upside / Downside Guidance Variations– Mergers and Acquisitions– Restructurings

• Annual Meeting of Shareholders• Prospectus for Planned IPO (S1)

10Q: The Short Program

• Required Elements• Top Line: Y/Y; Sequential• GM %: Expanding/Contracting• Bottom Line Earnings/(Loss)• EPS• GAAP precedence over Pro Forma• Quotes from CEO/CFO

Stock Prices Are A…

• Leading or a…• Trailing Indicator?

Wisdom from “Mad Money”

“I don’t care about a stock’s past, only its future,” Jim Cramer, CNBC ‘Mad Money’

SEC Mandates the 10K• Must be filed within 90 days of the completion of

Q4/Fiscal Year• Most 10Ks Include CEO Letter to Investors,

Customers and Employees• What is the Strategy for Success?• How Did We Do Last Year?• How Are We Going to Succeed Going Forward?

10K: The Long Program• Required Advocacy Document• Why AMZN, NKE, JWN, SBUX• Strategy, Strategy, Strategy• Quick Review of the Past• CSR? Contribution of Employees?• What the Future Holds? (No guarantees)• Thunderous Applause

Concluded Fiscal Year Metrics

• Revenue expansion/percentage increase• Bottom line expansion/percentage increase• EPS Growth; Specific numbers and percentage• Cash: Did the company grow cash?• Stock buy backs and/or dividends?

Who Cares? 10K Key Audiences

• Buy Side, Sell Side, Retail Shareholders/Investors

• Employees• Customers• Suppliers• Partners/Distributors• Competitors• Regulators• Plaintiff’s Bar

Completing Your 10K Letter• Hard copy, due Tuesday, May 28• Include CEO photo/company logo• Minimum two pages• 1.15 to 1.5 spacing• 11-12-point font• Indented paragraphs• Bar/pie chart or two?• Subheads/Bullets• 15 percent of final grade