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Annual Report

Understand the Annual Report vs. 10-K Filing

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Annual Report

Annual Report vs. 10-K: What is the Difference?

Under SEC guidance, the annual report and 10-K are each filed at the end of a company’s fiscal year.

Within each document, the financial performance and information regarding performance in the trailing twelve months can be found (i.e. the latest fiscal year).

The annual report and 10-K are similar documents, but their differences stem from their intended audiences.

The 10-K is a formal regulatory filing with the SEC, whereas the annual report is intended to be viewed by existing shareholders and other stakeholders (e.g. lenders, potential investors, customers).

Annual Report Characteristics

Unlike the 10-K, the distinction with the annual report is that the filing is typically filled with:

  • Logos
  • Charts
  • Photos
  • Graphs
  • Illustrations

In short, the annual report – or at least the earlier sections of the filing – can be viewed as “marketing material” meant to make going through the filing “easier on the eyes” with improved readability.

Since the annual report is directed toward existing (and potential) shareholders – i.e. to encourage further purchases (or fend off desires to sell shares) – has better readability than the 10-K.

By contrast, the 10-K is prepared with the strict formatting expectations of the SEC in mind, which causes the report to be more “dry” and less appealing – especially for the retail investing crowd.

Following an initial section in the annual report with the added “marketing fluff,” the majority of annual reports contain identical data and information as the 10-K.

Company-Specific Approaches

  • Certain companies opt to simply edit the cover page between their annual reports and 10-K filings if management decides a separate annual report is an unnecessary expenditure of time.
  • Conversely, other companies will edit the entire annual report with new font and graphics, so the report will be more user-friendly.
Finding the Annual Report vs. 10-K Differences

In terms of where to find the annual report and 10-K, the reports can be sourced from:

  • Annual Report → Investor Relations Website
  • 10-K Filing → SEC EDGAR and Investor Relations Website

Annual Report vs. 10-K: Comparison Example

The difference in the intended audience is evident in the comparison photo posted below of Twitter’s annual report and its 10-K filing.

Twitter Annual Report vs 10K

Twitter Example (Source: TWTR Investor Relations)

Clearly from above, the 10-K is meant for regulators and institutional investors, whereas the annual report is more for marketing purposes.

While not always the case, certain annual reports will be prefaced with a personalized letter from the CEO, especially if the company is coming off of a disappointing reporting period.

For instance, the number of detailed letters increased substantially post-COVID, as management had to not only explain the damage to their financials but also reassure investors of their upcoming recovery.

In addition, management had to address how the company was:

  • Contributing Towards COVID Relief
  • Maintaining Safe Working Conditions for Employees
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