#10-k

[skydether-znation]

Z Nation, S05-E01, 10k is back! 

[brandondonnelly]

Steven Ballmer launches USAFacts

Steven Ballmer -- the former CEO of Microsoft and current owner of the LA Clippers -- has just launched a website called USAFacts. 

He describes it as a 10-K for the US government. Put differently, it is a non-partisan website offering a “data-driven portrait of the American population, our government’s finances, and government’s impact on society.” It provides a complete look at revenue and spending across federal, state, and local governments.

There is no commercial motive behind the website and Ballmer has been quoted in the New York Times saying that he’s “happy to fund the damn thing” whether it ends up being 3, 4, or even 5 million a year.

I love good data and in this current era of “fake news”, I think these sorts of initiatives are exactly what we need.

[rwatimes]

VIDA SEC Filings - VIDA Global Inc. 10-K, 10-Q, 8-K Forms

➤ VIDA Global Inc. has announced the listing of its VIDAx tokenized equity on Payward's xStocks platform, enabling non-U.S. investors to gain economic exposure to Vida shares via digital assets. ➤ Recent SEC filings reveal significant insider activity, including purchases of Class A Common Stock by entities associated with TVP Bitcoin Venture Fund II, L.P., and directors Romaine Henry S Jr., Christopher Shane Calicott, Alan M. Braverman, and CEO Pratt Lyle. ➤ The company is also proceeding with its Initial Public Offering (IPO) on NYSE American and NYSE Texas, offering Class A common stock at $4.00 per share, with dual-class stock structure ensuring founder control and disclosing various business and regulatory risks.

[gudguy1a]

(free speech moments) VERIZON is a PIECE OF SHIT at times

Yes, time for another bite out of a corporate entity’s ass. This is in regard to a posting of mine that verizon removed from their verizon community website. Which I in turn wrote this up with EXTRA saltiness in the content. In the removed article, I was downplaying, kicking verizon in their fat ass basically for what they did to customers. Now, using profanity is off limits on most commercial…

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[pavel-nosok]

Binance USD market cap falls below $10B amid rising regulatory concerns

As it stands today, BUSD’s market cap has fallen by nearly $14 billion since its all-time high of $23.49 billion on Nov. 15, 2022.

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[calcbench]

TJX Shows Complexity of Leasing Costs Reporting

Retailer TJX Cos. ($TJX) filed its latest Form 10-K report this week, for its 2018 fiscal year that actually ended on Feb. 2, 2019. Heed that date, because it’s an important reminder about the nuances of lease accounting and corporate balance sheets.

As we’ve written many times now, a new accounting standard for leasing costs went into effect on Dec. 15, 2018. Under the new rule (formally known as ASC 842), companies must start reporting the costs of operating leases as liabilities on the balance sheet, rather than bury those costs away in the footnotes.

For retailers like TJX, those operating leases can be expensive. TJX currently had $9.8 billion in leasing commitments on the books as of Feb. 2, according to the Commitments section of disclosures in the 10-K footnotes.

But wait, you say! Didn’t we just note two paragraphs earlier that the new accounting rule requires firms to report those costs on the balance sheet? What’s this footnotes business we’re mentioning now?

That’s why the Feb. 2, 2019 date is so important. Firms must adopt ASC 842 for the fiscal year beginning on or after Dec. 15, 2018 — and for TJX, its next fiscal year began on Feb. 3, 2019.

Little surprise, then, that TJX had this to say in its accounting policies disclosures about adopting ASC 842:

We will adopt this standard on February 3, 2019 using the optional transition method… On adoption of this standard we will recognize an operating lease liability of approximately $9 billion on our statement of financial condition as of February 3, 2019 with corresponding right-of-use assets based on the present value of the remaining minimum rental payments associated with our more than 4,300 leased locations.

Translation: TJX implemented a significant change to its balance sheet exactly one day after filing its 2018 annual report, where disclosure of that change was tucked away in the footnotes.

To be clear, this is entirely legal — and to a certain extent, even logical. After all, you have to pick some day to adopt a new standard; the start of a new fiscal year is a reasonable choice.

We only call out TJX today because noticing such details is important for astute financial analysis. The $9.8 billion in lease liabilities that piled onto TJX’s balance sheet on Feb. 3 is larger than all the company’s other liabilities, $9.2 billion, that existed there 24 hours earlier.

Shifts like that could have consequences for a firm’s debt covenants, if current liabilities suddenly cross some critical threshold as a portion of total liabilities. These shifts will also affect how a firm’s return on assets is calculated, since ASC 842 requires companies to add a “right of use” asset on the asset side of the balance sheet, to offset the liabilities.

TJX isn’t the only company with large leasing liabilities piling onto the balance sheet one day after filing the 10-K. In our recent master class video with Jason Voss, we called out Chipotle as another example. You can visit our Research page or search our blog archives for all the other material we’ve written about leasing costs. We even have a dedicated report on leasing expenses from last July, with a 2019 version coming this summer.

Suffice to say, there are plenty of examples to choose from.

[calcbench]

You Revised WHAT, Netflix?

Another day, another example of why attention to detail matters in financial analysis: Netflix ($NFLX) and its most recent annual report, which revised a lot of operating expense numbers from prior years. What was that about?

We noticed this adjustment while studying Netflix on our Company-in-Detail page. Netflix filed its 2018 annual report on Jan. 29, and several of the 2017 and 2016 line-items were highlighted as revised. See Figure 1, below. Those cells outlined in the famed ‘Calcbench mustard’ color are adjusted.

So we peeked at those revised facts by clicking on the Highlight Revised Facts tab above the line-items. When you do this, a small plus sign appears next to the revised number. Click on that plus sign and you can see the actual revisions made: what the number originally was, and when the firm revised to the current number seen on your screen.

Intrigued, we dug into that $8 billion number for Cost of Revenue in its 2017 fiscal year — and saw that several weeks ago Netflix adjusted that number upward by $374 million. See Figure 2, below.

For a moment we felt chest pains; $374 million is a significant amount of money. Then we noticed — revenue and operating income hadn’t changed. So Netflix was only rearranging costs among its line items for Cost of Revenue, Marketing, Tech & Development, and General Administrative.

Still, why?

To learn more, we clicked on that $8 billion number and traced it back to the source in Netflix’s 10-K filing. That took us to the Interactive Disclosure tool, where we could read the full details of why Netflix was changing these numbers.

Turns out that in fourth-quarter 2018, Netflix decided to reclassify those line items, so the spending for each one more closely reflected how the company tracks personnel costs. Or, as Netflix formally phrased it:

The Company is making this change in classification in order to reflect how the nature of the work performed by certain personnel has changed to be more directly related to the development, marketing and delivery of our service as a result of the continued evolution of the Company’s strategy to self-produce and create more of its own content rather than license or procure it from third parties. This change in classification will also align external presentation of personnel related expenses with the way that the Company's chief operating decision maker expects to assess profitability and make resource allocation decisions going forward.

Netflix also provided a table to show all reclassifications by line-item and year, which was mighty nice of them. See Figure 3, below.

Our heart rate returned to normal after reading that explanation and we put away the nitro. Still, it’s another reminder that firms can revise financial filings all the time — and diligent financial analysts should want to know why.

With a few keystrokes to jump around the Calcbench data archives, we did find out why. So can you.