Investor Bulletin: 

How to Read an 8-K 

A company has just released its quarterly earnings. 

Another company has auditor news that could raise a 

red flag, and a third company is filing for bankruptcy. 

Where can you find more facts? Information about 

these events and many more are found in a document 

called a current report on Form 8-K.

Form 8-K provides investors with current information 

to enable them to make informed decisions. The 

types of information required to be disclosed on 

Form 8-K are generally considered to be “material.” 

That means that, in general, there is a substantial 

likelihood that a reasonable investor would consider 

the information important in making an investment 

decision. 

Companies typically provide a number of 8-Ks 

throughout the year, whenever significant corporate 

events take place that trigger a disclosure. Companies 

must file 8-Ks promptly, rather than waiting until 

their next periodic report, such as the quarterly 

report (on Form 10-Q) or annual report (on Form 

10-K). Companies are required to make most 8-K 

disclosures within four business days of the triggering 

event and in some cases even earlier. The public can 

find 8-Ks on the SEC’s EDGAR website, available 

at www.sec.gov/edgar/searchedgar/companysearch.

html. Please see Additional Information at the end of 

this Investor Bulletin for more information on how to 

use EDGAR. 

The rest of this Investor Bulletin highlights a number 

of 8-K disclosures that investors may find particularly 

relevant, including some red flags for investors. This 

Investor Bulletin does not discuss all required 8-K 

disclosures.

Highlights of Disclosure Items in 

Form 8-K

Item 1.01 – Entry into a Material Definitive 

Agreement

This item requires disclosure of certain material 

agreements not made in the ordinary course of 

business, or material amendments to those agreements. 

For example, if a company takes out a five-year loan 

with a bank or signs a long-term lease, and the loan or 

lease is material to the company, the agreement must 

be reported here. But if a retailer already has a chain 

of stores and signs a lease for one more, the new lease 

generally would be in the ordinary course of business 

and would not be reported here. 

Item 1.02 – Termination of a Material Definitive 

Agreement

Under this item, a company generally must disclose 

the termination of a material agreement. If the 

agreement simply expires according to its terms, 

that termination would not need to be reported on 

Form 8-K. For example, if a widget company made 

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most of its sales under a long-term supply agreement 

with one significant customer, and that customer 

terminates the agreement prior to the date on which 

it would otherwise expire, that event would need to be 

reported under this item.

Item 1.03 – Bankruptcy or Receivership

If a company becomes the subject of a bankruptcy 

or receivership court filing, that must be disclosed. 

Future 8-Ks may outline the company’s plan for 

reorganization (under Chapter 11) or liquidation 

(under Chapter 7) and the court’s confirmation of 

the plan. Investors should look at the reorganization 

plan for information about whether the company’s 

common stock is likely to be canceled and when the 

company expects to emerge from bankruptcy.

Item 2.01 – Completion of Acquisition or 

Disposition of Assets

If a company acquires or disposes of a significant 

amount of assets, the company must file an 8-K to 

describe the terms of the transaction. Examples 

include buying or merging with another company, or 

selling a business unit. A company that is no longer 

a “shell company” as a result of a merger would also 

use this item to provide investors with comprehensive 

information about the other merging company. A 

shell company is a company that either has little or no 

operations or has little or no assets other than cash and 

cash equivalents.

Item 2.02 – Results of Operations and Financial 

Condition

Many companies announce their quarterly and annual 

results simultaneously in a press release and an 8-K 

(which includes the press release as an exhibit). The 

documents often include an announcement that the 

company will hold a conference call (sometimes called 

an analyst or earnings call) shortly after the release 

to discuss the results. The financial disclosures in the 

8-K typically summarize the full financial statements, 

which will appear later in the company’s quarterly 

report (on Form 10-Q) or annual report (on Form 

10-K). 

Item 2.03 – Creation of a Direct Financial 

Obligation or an Obligation under an Off-Balance 

Sheet Arrangement of a Registrant

The basic terms of material financial obligations 

that the company takes on must be reported. These 

financial obligations include any long-term debt, 

capital or operating lease, and short-term debt outside 

the ordinary course of business. This item also requires 

disclosure of material financial obligations, whether 

direct or contingent, that arise out of off-balance sheet 

arrangements.

Item 2.04 – Triggering Events That Accelerate 

or Increase a Direct Financial Obligation or 

an Obligation under an Off-Balance Sheet 

Arrangement

Defaults on loans or other events that trigger the 

acceleration or increase of a financial obligation must 

be disclosed in an 8-K if the consequences of the 

event are material to the company. For example, if a 

company defaults on a loan, its creditors typically have 

the right to demand immediate payment of the entire 

amount owed. In such a case, if immediate repayment 

would be material, the company must disclose the 

amount to be repaid, the repayment terms and other 

financial obligations that might have to be repaid on an 

accelerated basis as a result of the initial default. Crossdefault provisions may allow other creditors to demand 

immediate repayment of amounts owed to them.

Item 2.05 – Costs Associated with Exit or 

Disposal Activities

This item requires disclosure of restructuring plans 

under which the company will incur material 

charges. For example, the 8-K may report the 

company’s decision to close some of its plants or 

stores or to lay off workers. The company also must 

disclose its estimates of the costs involved, once it is 

able to determine them. These costs could include, 

for example, total severance benefits for all laid-off 

employees.

Item 2.06 – Material Impairments

A company must disclose certain material writedowns (also called impairments) in an 8-K. (If the 

company determines the impairment when routinely 

preparing its financial statements for its periodic 

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report, the company may make the disclosure in the 

periodic report rather than in an 8-K.) A writedown may occur when a company significantly lowers 

its estimate of the value of certain assets, such as the 

value of its brand or of a business it has acquired. 

The write-down hits the financial statements in two 

places—as a decrease in assets on the balance sheet and 

as an expense on the income statement.

Item 3.01 – Notice of Delisting or Failure to 

Satisfy a Continued Listing Rule or Standard; 

Transfer of Listing

If a stock exchange notifies a company that it no 

longer satisfies the requirements for continued 

listing, this must be disclosed. For example, the 

stock may have been trading below the minimum 

price requirement for a certain period of time. The 

company may have a grace period to return to 

compliance, and will have to disclose any steps it 

intends to take to avoid delisting. 

Item 3.02 – Unregistered Sales of Equity 

Securities

Private sales of securities exceeding 1 percent of 

a company’s outstanding shares of that class (or 5 

percent for smaller reporting companies) would be 

reported under this item. Public offerings registered 

with the SEC need not be disclosed under this item. 

Investors can use the information provided under this 

item to determine the amount of capital raised by 

the company as well as the potential dilutive effect of 

reported private sales.

Item 3.03 – Material Modification to Rights of 

Security Holders

Under this item, companies must disclose material 

changes to instruments that define the rights 

of shareholders (such as a company’s governing 

documents) or material limitations on the rights 

of security holders that result from the issuance or 

modification of another class of securities. Examples 

of such changes could include loan terms restricting 

dividend payments, the adoption of an antitakeover 

device or the issuance of preferred stock. 

Item 4.01 – Changes in Registrant’s Certifying 

Accountant

Companies must disclose if they dismiss their 

independent auditor, if the auditor resigns or declines 

to stand for re-appointment, and if the company hires 

a new auditor. 

A change of auditors is sometimes, but not always, a 

cause for concern. It depends on the reasons for the 

change. The following circumstances are widely seen 

as red flags, and companies must disclose them if they 

occurred over the previous two fiscal years. 

First, companies must disclose whether the departing 

auditor gave an adverse or qualified opinion on the 

company’s financial statements. These indicate that the 

financial statements are not prepared in conformity 

with generally accepted accounting principles. 

Second, the company must report certain 

disagreements it had with its departing auditor over 

accounting principles or practices, financial statements, 

or the scope or procedure of the audit. 

Third, whether or not it led to a disagreement 

between the company and its auditor, companies must 

disclose whether its former auditor advised it that:

•	 the necessary internal controls to prepare 

reliable financial statements do not exist,

•	 the auditor can no longer rely on 

management’s representations or is unwilling 

to be associated with the financial statements 

prepared by management,

•	 the auditor believed it should further 

investigate a matter or significantly expand the 

scope of its audit, and the auditor did not do 

so, or

•	 the auditor has found new information that 

materially impacts the fairness or reliability of 

current or prior financial statements, and the 

issue has not been resolved to the auditor’s 

satisfaction.

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Item 4.02 – Non-Reliance on Previously Issued 

Financial Statements or a Related Audit Report 

or Completed Interim Review

This item requires disclosure if the company believes 

that previously issued financial statements should not 

be relied upon because of an error in the statements. 

Disclosure is also required if the auditor believes that 

its previously issued audit reports or interim reviews 

on financial statements should not be relied upon. In 

both cases, the company also must disclose whether its 

audit committee, full board or authorized executive 

officers have discussed these matters with its auditor. 

Investors should pay attention to these disclosures, 

which could affect the company’s previously reported 

earnings. Companies generally restate their financial 

statements after the 8-K disclosure. The restatement 

could come at a much later date.

Item 5.01 – Changes in Control of Registrant

If there is a change of control of the company, the 

company must identify the persons who have acquired 

control and the percentage of voting securities that 

they beneficially own, as well as any arrangements 

between the old and new control groups regarding the 

election of directors or other matters.

Item 5.02 – Departure of Directors or Certain 

Officers; Election of Directors; Appointment of 

Certain Officers; Compensatory Arrangements 

of Certain Officers

If a board member resigns or refuses to stand for reelection because of a disagreement with the company 

relating to the company’s operations, policies or 

practices, or a director is removed for cause from 

the board, the company must briefly describe the 

circumstances of the disagreement. If the director 

provides a letter regarding her resignation, refusal or 

removal, the company must file the letter as an exhibit 

to the 8-K. 

If a high-level executive officer—such as the chief 

executive officer, president, chief financial officer, chief 

accounting officer or chief operating officer—retires, 

resigns or is terminated, the company must disclose 

that fact. 

The company also must disclose the appointment of 

any new director or high-level officers and briefly 

describe any related compensation arrangements. In 

addition, the company must disclose any changes to 

the compensation of current high-level officers.

Item 5.03 – Amendments to Articles of 

Incorporation or Bylaws; Change in Fiscal Year

This item generally requires disclosure if a company 

amends its articles of incorporation or bylaws, or 

changes its fiscal year, unless the company already 

disclosed the proposed amendment or fiscal year 

change in a proxy statement or information statement. 

Companies that issue only debt securities are typically 

not required to comply with this item.

Item 5.05 – Amendments to the Registrant’s 

Code of Ethics, or Waiver of a Provision of the 

Code of Ethics

Companies must generally report changes to their 

code of ethics that apply to the chief executive officer, 

chief financial officer, chief accounting officer or 

controller, or others performing similar functions. 

The company also must disclose any waivers granted 

to any of these persons. Many investors consider 

ethics waivers to be a red flag. Please note that a 

company may elect to provide these disclosures on the 

company’s website instead of filing an 8-K.

Item 5.07 – Submission of Matters to a Vote of 

Security Holders 

Within four business days of the end of an annual or 

special meeting, companies must file the results of 

shareholder votes in director elections and on all other 

matters put to a vote. If the company is only able to 

report preliminary results at that time, it must file an 

amended 8-K to report the final vote results within 

four business days after those results are known.

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Item 7.01 – Regulation FD

The purpose of Regulation FD—for “fair 

disclosure”—is to prevent companies from selectively 

disclosing material, non-public information. 

Regulation FD is intended to level the playing field: 

companies generally must give material information to 

the public at the same time they provide it to others, 

such as securities market professionals.

Companies may submit an 8-K under this item or 

Item 8.01 as one method of complying with the 

public disclosure requirement of Regulation FD. 

Actual examples of 8-Ks filed under this item address 

a wide range of topics, such as announcements of 

dividends, quarterly sales figures, or other business 

developments.

Item 8.01 – Other Events

This is the place where companies may report 

anything that they believe is important but is not 

specifically required elsewhere in the 8-K.

Item 9.01 – Financial Statements and Exhibits

Under this item, a company must file certain financial 

statements and list the exhibits that it has filed as part 

of the 8-K. For example, if a company discloses in 

Item 2.01 that it has acquired a business, Item 9.01 

would require the company to provide the financial 

statements of the business acquired in the same or a 

later-filed amended 8-K. In addition, the company 

must also present “pro forma” financial statements that 

show what the company’s financial results might have 

been if the transaction had been completed earlier. 

Likewise, if the company discloses in Item 1.01 that it 

has entered into a material agreement, that agreement 

may be filed as an exhibit in the 8-K.

Additional Information

For our Using Edgar - Researching Public 

Companies, providing information on how 

to search for company documents, such as 

Forms 8-K, in the SEC’s EDGAR database, 

visit investor.gov/researching-managinginvestments/researching-investments/usingedgar-researching-public-companies.

For our Researching Public Companies 

Through EDGAR: A Guide for Investors, 

another resource for using EDGAR, visit 

www.sec.gov/investor/pubs/edgarguide.htm.

For Form 8-K, which lists all items and has 

instructions on how to complete it, visit 

www.sec.gov/about/forms/form8-k.pdf.

For the 2004 Final Rule: Additional 

Form 8-K Disclosure Requirements and 

Acceleration of Filing Date, see 

www.sec.gov/rules/final/33-8400.htm.

For How to Read a 10-K, visit www.

investor.gov/news-alerts/investor-bulletins/

how-read-10-k. 

For additional educational information for 

investors, see the SEC’s Office of Investor 

Education and Advocacy’s website at www.

investor.gov.

The Office of Investor Education and Advocacy 

has provided this information as a service to 

investors. It is neither a legal interpretation nor 

a statement of SEC policy. If you have questions 

concerning the meaning or application of a 

particular law or rule, please consult with an 

attorney who specializes in securities law.

Investor Assistance (800) 732-0330 May 2012

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