In the political world, it’s primary season, which means a lot of tallying and number-crunching, starting with Tuesday’s squeaker in Iowa. Here at footnoted, with 2011 safely behind us, we’re doing the same, stepping back and looking at the filing landscape from last year with the help of our friends and coworkers at Morningstar Document Research — nee 10-K Wizard, the service we use to search and read slice, dice and crunch public-company filings with the Securities and Exchange Commissions.
And what a year it was. The total number of (public) documents filed with the SEC crept inexorably upward, by a modest 4.4% to 659,210 from 631,200 last year. That’s a lot — an increase of more than 28,000 filings — but still well below the peak of 750,200 in 2007.
As was the case in 2010, about a third of last year’s filings were insider-transaction filings: Forms 3, 4, 5 and the like. Of the rest, nearly one in six was a Form 8-K, those catch-all filings that can mean anything from press-release puffery to the disclosure of impending criminal charges.
And if you’ve ever heard us wax on about the Friday night dump — the tendency of companies to try to bury bad news during the 90 minutes after market close that the SEC continues to take filings — last year’s stats show it’s a very real phenomenon. Fully 6,259 of the 8-Ks filed in 2011, or some 8% of the total, came after 4 p.m. on Fridays. And that doesn’t count the day before Thanksgiving or any Thursdays before Friday holidays, or the stragglers that miss the deadline and show up first thing Monday morning.
In addition to an overview, we also had the good folks at MDR dig up the outliers for us: the biggest, ugliest, filings, and the companies that just can’t stop themselves from filing again and again.
The 2011 Heftiest 10-K Award goes to Realogy Corp., a closely held real-estate brokerage (subsidiaries include Century 21, Coldwell Banker and other familiar names) that was taken private by Apollo Management in 2007 but still has plenty of public debt. It won with a beauty of a 10-K filed on March 4, 2011, that weighed in at 2,229 pages and included no less than 31 exhibits. (Plus, it’s worth noting, the company filed a 10-K/A amendment later in the month, with another 66 pages.)
But Realogy’s opus is dwarfed by the 10-Q filed on February 8, 2011, by aluminum-can maker Novelis Inc., another closely held company (taken private in 2007 by the Mumbai-based Aditya Birla Group). Its masterpiece clocked in at 4,543 pages — and managed to do so with just 11 exhibits.
By contrast, the biggest 8-K was a pipsqueak, if a home-grown pipsqueak, filed November 18, 2011, by venerable pineapple-marketer Dole Food (DOLE), shortly after it acquired SunnyRidge Farm. At a mere 2,683 pages, the document and its exhibits disclosed details of the company’s credit agreements, as well as a couple stock and long-term incentive plans for executives.
Clearly, “biggest” doesn’t always mean “most exciting.”
As last year, the most prolific filers of 2011 were generally financial companies — after all, they have to file all kinds of documents about their products and investments as well as their own issuances.
This year, the repeat offenders were based outside the U.S.: Barclays Bank (BCS) took the brass ring with 2,885 individual filings — that’s nearly eight for every day of they year, including weekends and holidays — followed closely by UBS (UBS), at 2,812 filings, and then BlackRock (BLK) at 2,669. JPMorgan Chase (JPM) (with 2,096) and Morgan Stanley (MS) (with 1,764) rounded out the top five.
And then there’s the stat we pay closest attention to here at footnoted: the busiest days of the year, when public companies keep Edgar’s virtual gears spinning most furiously. Last year, unsurprisingly, February and March once again took most of the top spots — right where 10-K season and proxy season start to merge. The busiest day of all was Valentine’s Day (awwww…), with 9,982 individual love-notes to investors, followed by November 14 (with 7,398), March 1 (with 6,612), February 28 (with 6,300) and February 11 (with 6,130).
Our slogan notwithstanding (“We read the filings so you don’t have to”), we didn’t actually read every word of all 659,210 filings last year. Instead, we zeroed in on the most interesting ones using the search capabilities of MDR, matching language in the filing with dozens of proprietary search terms.
We at least skimmed those filings, and in many cases read them closely. And in the process, we racked up some pretty impressive stats of our own — stats that we think underscore the signal-to-noise ratio in public disclosures, and (not coincidentally) the value of the services we offer over at footnotedPro.
During the year, we reviewed 31,591 alerts triggered by filings that matched one or more of our search strings (each filing can trigger more than one alert), an average of more than 600 a week. From that fire-hose, we identified nearly 4,900 filings worth recording in our database, many of which we deemed significant enough to send to paying subscribers. (A relatively small number were useful only for blog posts, or were recorded as part of our ongoing R&D efforts.)
The very best of the lot — the most significant, most actionable material we found — was distilled down into the 56 footnotedPro reports we published last year. Those reports covered more than 160 unique tickers — and included early alerts for subscribers on four acquisitions and a warning about AMR’s bankruptcy, among other tidbits.
Oh, and the blog that started it all? Here on footnoted.com, we published 268 posts in 2011, up to and including the winner of the year’s worst footnote contest, Hewlett-Packard (HPQ), for the remarkably generous severance package it gave to LâŸo Apotheker after his short and less than distinguished stint as CEO.
So much for 2011. We’re already deep into 2012, and we’ll let you (and our footnotedPro subscribers) know what we find.
Corporate disclosures aren’t all about numbers. At footnotedPro, we highlight unusual opportunities and potential problems well in advance of the market, based on what’s buried in the footnotes and text of SEC filings. To find out what you’re missing in SEC filings, and to inquire about a trial subscription, please contact us.