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Updating the Risk Factors in a Form 10-K Filing
Practical Law Legal Update 7-523-6259 (Approx. 3 pages)
Updating the Risk Factors in a Form 10-K Filing
by PLC Corporate & Securities
| Published on 24 Jan 2013 • USA (National/Federal) |
An introduction to PLCorporate & Securities resources to assist in-house and outside counsel in updating the risk factor disclosure in a public company's annual report on Form 10-K.
Updating the risk factors in a Form 10-K filing can be a stress-inducing and time-consuming exercise, as counsel must ensure that they spot and adequately describe every material risk faced by the company.
PLC Corporate & Securities has a suite of resources that can help you review and update risk factor disclosure thoroughly and efficiently:
- Industry-specific resources that allow you to quickly survey recent risk factors from companies in your industry, sorted by topic.
- Issue-specific resources with guidance on, and examples of, risk factors on hot-button issues, including the new conflict minerals rule, cyber-security threats and climate change risk.
Overview of Risk Factor Disclosure
Before beginning, and as you encounter questions, it may be helpful to review our primer on risk factor disclosure: Practice Note, Risk Factors: What Keeps You Up at Night?
This resource:
- Describes the SEC rules and guidance governing risk factor disclosure.
- Provides scope and drafting tips for risk factor disclosure.
- Discusses the different categories of risk factors.
Industry-specific Risk Factor Resources
Reviewing recent disclosure by peer companies in the same industry is an important preliminary step in updating a company's risk factors.
Each of our 12 industry-specific risk factor Practice Notes:
- Identifies the most common categories of risk factors in that industry. For example, our oil and gas Practice Note identifies 11 industry-specific risk factor categories, including:
- volatility of crude oil, natural gas and other commodity prices;
- ability to maintain reserve levels;
- hedging activities; and
- exploration and drilling.
- Provides multiple examples for each identified category of risk factors. For example, our medical devices and healthcare Practice Note provides examples of, and links to, recent risk factor disclosures by 20 different Fortune 500 healthcare companies across ten different categories of risk factors.
Issue-specific Risk Factor Resources
Cyber Security
Our Standard Clause, Sample Risk Factor: Cyber Security is a model cyber security risk factor that includes integrated notes with important explanations and drafting tips, including:
- A discussion of recent SEC guidance on cyber security-related disclosure.
- Suggested optional disclosure for companies that have:
- experienced a security breach; or
- spent or will spend significant resources to strengthen their cyber security.
- Links to examples of cyber security risk factors in recent SEC filings, broken down by type.