Many businesses will offer some thoughts about the war in their earnings releases, calls with analysts, and quarterly reports; but those aren’t the only sources of information that exist. Today let’s do a quick review of other disclosures companies might make, and how you can find them on Calcbench.

For example, one often-overlooked disclosure is a company’s list of subsidiaries. If a company you follow has extensive operations in the Middle East, that could mean those facilities are vulnerable to attack, which in turn might have substantial implications for a company’s operations, earnings, and assets on the balance sheet.

You can find subsidiary information via our Disclosures & Footnotes Query page. Just define the company or companies you want to research and then choose “subsidiaries” from the drop-down list of disclosures that Calcbench tracks. (It’s on the left side of your screen.) Then enter “UAE,” “Saudi Arabia,” “Israel,” “Middle East” or some other relevant term in the text search field (also on the left side of your screen) and you can see which companies have subsidiaries operating in the region.

We did a quick search of S&P 500 companies that listed “UAE” subsidiaries in their 2025 annual reports. We found 15, including Emerson Electric ($EMR), Quest Diagnostics ($DGX), and ServiceNow ($NOW). See Figure 1, below, as an example of the results.

OK, cool cool, but those disclosures only tell you that the company has a subsidiary in the war zone. It doesn’t (usually) tell you how large and significant that subsidiary is. 

To answer that question, you can try using our Segments, Rollforwards, and Breakouts page to see whether a company lists specific assets or operations in the Middle East. We searched the S&P 500 by geographic operating segment, filtering to look for Saudi Arabia. Within a few moments we found one result: Air Products & Chemicals ($ADP), which reported $6.9 billion in Property, Plant & Equipment (“PPE”) in Saudi Arabia. 

If you follow Air Products, and you’re wondering whether the company has assets in theater that might get blown up by Iranian missiles or drones — OK, now you have an answer to that question.

The drawback is that disclosures by geographic operating segment are imprecise. Dozens of S&P 500 companies do make PPE disclosures that include the Middle East — but those numbers are rolled into larger EMEA geographic segments that also include PPE from Europe and Africa. 

For example, Stryker Corp. ($SYK) reported $1.56 billion in PPE for the EMEA region last year, while Merck & Co. ($MRK) reported $8.85 billion; but what portion of those amounts are in the Middle East versus Europe or Africa? We can’t tell.

(You can, however, search for specific country names to see whether a company discloses assets there. For example, Nvidia ($NVDA) reports $1.47 billion in PPE in Israel; Albemarle ($ABL) reports $327.4 million worth of assets in Jordan.)

Insight From Tax Disclosures

You could also look for clues by searching income tax disclosures. As we noted in a blog post last month, companies must now report taxes paid to individual countries — and some companies are reporting taxes paid to countries in the Middle East. Presumably that means they have operations in those countries, which is a clue you can use to ask about geopolitical risk.

For example, Exxon Mobil ($XOM) reported paying $5 billion in taxes to the United Arab Emirates in 2025. Chevron ($CVX) reported paying $611 million to Saudi Arabia, and Halliburton ($HAL) reported $76 million. Dozens of companies reported taxes paid to Israel.

Again, like disclosures related to geographic segments, this is an imprecise method. Companies only need to report taxes paid to specific countries when those tax bills are at least 5 percent of the company’s total taxes paid. Plenty of businesses won’t meet that threshold, so their tax numbers get rolled into a single, vague “Unmapped” jurisdiction. Could some of that unmapped money be going to Middle East countries? Sure, but the company doesn’t need to report specifics.

And of course, the best way to understand war-related disclosures is simply to read the footnotes: Management Discussion & Analysis, Risk Factors, and even the earnings release or earnings call transcripts might all have interesting morsels of insight. Calcbench collects all that information and offers multiple ways for you to search it and find the signal through the noise.

If you just do a quick text search for “tariff” you’re wasting time, because a tremendous number of companies include the word “tariff” as part of a meaningless, boilerplate disclosure. For example, “Our performance might be affected by numerous risks, such as tariffs or an asteroid hitting Earth,” or that sort of thing. 

Fortunately, Calcbench offers an easy way to find informative disclosures about tariffs, such as when companies report some specific tariff cost. Let’s walk through that cheat code now.

Begin on our Earnings Release Raw Data page, where you can search through all the GAAP and non-GAAP disclosures companies include in their earnings releases. You’ll see something like Figure 1, below. 

You’ll want to configure your search parameters to match what you see above. Most of them will already be pre-configured correctly; just pay special attention to the filing date on the right side, and the label field on the left. Both are flagged with arrows above.

You want the filing date to be, well, whatever date you choose; we selected today’s date. You want the label field set to “Contains text” and then add “tariff” as the actual text. Then hit the search button at the bottom, and that’s all there is to it. 

We ran this search early on Thursday morning. Calcbench immediately screened more than 42,000 separate disclosures from 39 filers and found exactly three that said something informative about tariffs:

• Spices maker McCormick & Co. ($MCK) reporting a 2 percent increase in prices “reflecting tariff and inflation related pricing actions;” and

• Consumer products giant Procter & Gamble ($PG) reporting a hit to gross margins of 60 basis points due to tariffs, as well as $400 million in estimated higher costs due to tariffs for the coming 2026 year.

That search took us roughly two minutes from start to finish, and you can do the same any time you like. It filters out all those boilerplate disclosures that convey no informational value, so you can focus your attention on what matters most. 

Daily Journal ($DJCO) is a small publishing company based in Los Angeles that follows the legal profession in California and Arizona. It filed its 2025 annual report on Dec. 29, with $87.7 million in revenue and operating income of $9.53 million. 

We were skimming through Daily Journal’s footnote disclosures (because you should always look through the footnotes, people!) and stumbled upon the company’s Controls and Procedures footnote. This is a footnote all companies must include, where management discloses any material weaknesses in financial reporting and what management is doing to fix them. 

Material weaknesses are not welcome news. They imply that the company’s financial reports are less reliable and more prone to restatement, and the point of disclosing them is to light a fire under management’s rear end to improve financial reporting systems and fix them.

OK, back to Daily Journal. In its Dec. 29 filing, the company disclosed two material weaknesses. One was segregation of duties (that is, keeping accounting roles separate enough that no single person can use his or her permissions to commit fraud) and the other was review controls (so that management could easily examine and assess financial performance):

The company continues to have material weaknesses related to segregation of duties, review controls related to the design, implementation, and operation of controls over revenue recognition and associated deferred revenue processes that originated and were disclosed in prior periods. While management has implemented additional controls and made meaningful progress during fiscal year 2025, the company was not able to fully remediate the material weaknesses by September 30, 2025. Management’s remediation efforts continue, as described below, and management is confident in its ability to achieve a full remediation in fiscal year 2026. 

As material weaknesses go, it’s not unusual to have segregation of duties and review control weaknesses at the same time; the two are closely related. But we were intrigued by the casual mention of weaknesses “disclosed in prior periods.”

Hmmm. What did Daily Journal say about its material weaknesses in prior periods? How much progress has management made on improving the situation? 

In Calcbench, answering that question is a snap. We simply clicked on the “Previous Period” tab above Daily Journal’s 2025 disclosure to compare this year against the company’s 2024 disclosure filed one year ago. See Figure 1, below.

As you can see (if you squint; but trust us, it’s there), one year ago  Daily Journal had an additional material weakness of “insufficient accounting resources.” Specifically, the company didn’t have a dedicated internal audit team that could test and improve financial controls, so the accounting team was basically cross-checking each other’s work to intercept mistakes or other accounting shenanigans.

If you then go back to the 2025 disclosure filed this week, you can see how Daily Journal has rectified its accounting situation so far. The company disclosed three specific steps: (a) hiring more staff for the accounting team; (b) hiring a new CFO as of Dec. 12; and (c) implementing a new ERP software system for a major subsidiary with complicated accounting needs.

That’s a big step in the right direction. The question for Daily Journal investors now is whether the company will rectify its remaining material weaknesses (the segregation of duties and review controls) in the year to come.

Management says that should happen in the next 12 months. Will it? The only way to find out is to keep following Daily Journal’s disclosures closely and then compare new disclosures to the old to see how things have changed. Calcbench lets you do both.

Debt instruments can have a huge effect on stockholder equity and EPS, depending on the precise nature of the debt that a company issues. Today let’s look at two examples of convertible debt, and how companies try to manage its attendant EPS implications, from the technology firms Snap ($SNAP) and Zillow ($Z). 

First, a refresher on how convertible debt works. Convertible debt is a financing instrument that combines elements of both debt and equity. While the interest rate on convertible bonds is generally lower than the rate on traditional bond instruments, investors gain the option to turn their debt holdings into company shares at some predetermined "conversion price" set in the terms of the debt agreement. 

For the shareholders, the downside of the conversion is dilution — because the conversion of debt into equity increases the number of shares outstanding, which therefore decreases the corresponding EPS.

One way to avoid that outcome is through a type of call option. A call option gives its holder the right (but not the obligation) to buy a specific stock or other asset at a predetermined price — commonly known as the “strike price” — within a set period of time. 

“Capped call” transactions are a hedging tool that convertible bond issuers often use to protect against shareholder dilution. When a company issues a convertible bond, it can buy call options on its own stock with a strike price equal to the bond's conversion price and a cap that limits the counterparty's exposure. 

A capped call transaction effectively raises the price point at which dilution begins, and that shields shareholders from having their ownership diluted until the shares trade well above the conversion price. The trade-off is cost: capped calls typically consume 7 to 9 percent of the debt proceeds upfront, as Calcbench explained in its previous piece using Uber’s ($UBER) $141 million hedge to illustrate. 

Importantly, capped calls involve separate transactions between the issuer of the convertible and third-party underwriters, subject to a separate agreement that lays out terms and conditions. But since capped calls are used to protect against conversion-related dilution, we typically expect the companies to unwind capped calls promptly once the convertible security is redeemed or expires upon maturity of the convertible. 

The logic here is simple: capped calls are costly, and unwinding them is a liquidity-positive event that generates cash inflow. So why pay for a hedge when the dilutive convertible instrument no longer exists? 

Example 1: Snap

In February and May 2024, Snap repurchased its 2025 convertible notes. Upon completion of the repurchase of convertibles in May 2024, Snap terminated its capped call transactions, recording a $62.7 million inflow from cash from financing. Snap disclosed the transaction as follows (emphasis added):

“Our financing activities for the six months ended June 30, 2024 primarily consisted of the Note Repurchases for $859.0 million, repurchases of our Class A common stock for $311.1 million, and the purchase of the 2030 Capped Call Transactions for $68.9 million, partially offset by the issuance of the 2030 Notes for net proceeds of $740.4 million and the termination of the 2025 Capped Call Transactions for proceeds of $62.7 million.”

But not every company reports a capped call transaction this way. Sometimes you find an outlier. Zillow seems to be such an exception.

Example 2: Zillow

In September 2019, Zillow issued a $500 million convertible note with maturity in 2026, a conversion price of $43.51, and the initial cap price of $80.575. The terms of the convertible and the capped call imply that Zillow purchased an anti-dilution hedge, which protects shareholders from dilution when the stock trades between $43.51 and $80.575. 

Put differently: the hedge effectively raises the dilution threshold to $80.575. On Sept. 27, 2019, Zillow’s stock closed at roughly $29.53, more than 30 percent below the initial conversion price. 

Five years later, in December 2024, Zillow redeemed its 2026 convertible note. In contrast to Snap, Zillow decided to keep the associated capped calls outstanding (again, emphasis added):

“In connection with settling our 2026 Notes in December 2024, we elected to keep the associated capped call transactions outstanding.”

The capped calls were terminated on Aug. 25, 2025, about eight months after the redemption of the convertible note:

“On August 25, 2025, Zillow Group, Inc. (the “Company”) will enter into agreements … to unwind and terminate certain capped call transactions by and between the Company and each Counterparty (such transactions, the “Capped Calls,” and the unwind and termination of the Capped Calls, the “Unwind Transactions”)... Upon settlement of the Unwind Transactions, the Company will have no remaining capped call transactions outstanding.

The Company expects to receive from the Counterparties an aggregate of 3.1 million shares of the Company’s Class C capital stock, which will reduce the Company's Class C capital stock outstanding, and $38.2 million in cash (the “Unwind Amount”), upon the Unwind Transactions. In connection with the Unwind Transactions, the Counterparties may buy or sell shares of the Company’s Class C capital stock in secondary market transactions and/or unwind various derivative transactions with respect to such Class C capital stock.”

Why did Zillow elect to delay the termination of capped calls? We don’t know. Recall, however, that the economics of the capped call transactions is a company buying a call option on its own stock. Buyers of the call options usually believe that the price of the underlying instrument is likely to increase, sending a bullish signal to the market.

One possible explanation is that Zillow's management believed that Zillow's stock price was likely to increase, and incorporated this belief into their decision not to terminate the calls. Zillow’s stock price closed at $76.6 on Dec. 24, 2024 — about 5 percent below the initial cap of $80.575. The stock closed around $88.80 on Aug. 25, 2025, an increase of 16 percent over the eight-month period. For comparison, the S&P 500 increased about 6.6 percent over the same period.

Let’s also remember that Zillow received both cash and shares as part of consideration received for unwinding the capped call transaction. Another possible explanation is that Zillow preferred to receive the shares — effectively reducing dilution — in 2025 rather than in 2024. 

Why would a company do that? Perhaps to match the timing of accretive capped calls unwinding with dilution related to the issuance of shares upon exercise of stock options. 

According to Zillow’s Q2 2025 filing, the company issued 1.32 million Class C shares upon exercise of stock options, 2.97 million shares upon vesting of RSUs, and repurchased 4.2 million Class A and 1.4 million Class C shares in the first half of 2025:

“During the six months ended June 30, 2025, we repurchased 4.2 million shares of Class A common stock and 1.4 million shares of Class C capital stock at an average price of $70.09 and $73.19 per share, respectively, for an aggregate purchase price of $297 million and $103 million, respectively.”

The company also reported the transaction in the following table:

For comparative purposes, during the first six months of 2024 Zillow repurchased 1.1 million of Class A stock and 5.996 million of Class C stock. So the 3.1 million of Class C capital stock received by Zillow in August 2025 as part of the consideration could have potentially reduced the buybacks needed to mitigate the dilutive effect of options issuances and RSUs vesting in 2025. 

Of course, there could also be other reasons besides stock price expectations and buyback considerations that we did not discuss here. But Zillow’s delay in unwinding the hedge looked unusual, certainly interesting enough to ponder a few ideas. 

For the readers interested in conducting similar research in their own companies that they follow, convertible debt, capped calls, and note hedges are all easy to find using Calcbench’s Interactive Disclosure and Multi-Company pages.

For example, we searched “capped call” in the 2024 disclosures of S&P 500 companies and found more than 75 results, including NRG Energy, Super Micro Computer, Las Vegas Sands, and more. From there you can conduct your own analysis much as we did here with Snap and Zillow.

Editor’s note: Olga Usvyatsky is an author of Deep Quarry newsletter and occasional contributor to the Calcbench blog. Usvyatsky enjoys raising interesting questions about financial disclosures, and can be reached at olga@deepquarry.com.

OK, cool cool, we have the data. So how can Calcbench users actually find it? Today we’ll give you three easy-to-follow examples. 

For a Single Company

Let’s say you are researching a single company’s disclosures. Typically, the place to start is the Disclosure & Footnotes Query page. You can find that by scanning your choices along the top of the screen and finding the one that says “Disclosures.” See Figure 1, below (and look for the red arrow).

Once at the Disclosure & Footnotes page, you’ll next need to select the executive compensation disclosures as the specific data you want to see. Those disclosures are filed annually in the proxy statement, not in the quarterly financial statements or the annual 10-K. 

To find them, simply look to the left-hand side of your screen. You’ll see the list of disclosures that Calcbench offers. See Figure 2, below.

Skim all the way to the bottom of that list of disclosures, and you’ll see the compensation disclosures at the bottom under “Related Documents.” See Figure 3, below. 

Click on the choice you’d like, and that data will appear on your screen.

For Groups of Companies

Calcbench subscribers can also search larger groups of companies for compensation disclosures too. First, select the peer group you want to research. (We have a separate post explaining how to select a peer group, or you can use one of our pre-designed groups such as the S&P 500 or the Dow Jones Industrials.) 

For our purposes today, we’ll use the Dow Jones Industrials. Then you go to our XBRL Data page, which lets you search for disclosures by their individual XBRL tag (since all compensation disclosures are tagged). 

Step 2 is to select the fiscal year and period you want to research. You can select any fiscal year you’d like (although the pay versus performance disclosures are new, so if you search prior years you’ll get no results because none exist). For the fiscal period, however, you must select “Y” for the whole year because compensation disclosures only exist in the annual proxy statement.

Step 3 is to select the “statement type” you want from the drop-down menu provided. Scroll down until you reach “proxy statement pay versus performance” and select that choice. 

Then just press search, and you’ll get the results. In our example above, searching the Dow Jones Industrials for their 2024 proxies, we had 866 facts or data points. From here, you can export the data into Excel for your own modeling. That’s all there is to it. 

Start with our Recent Filings page, which tracks and indexes corporate filings typically within a few minutes of those filings arriving at the Securities and Exchange Commission. For many companies (and almost all large ones), you’ll see an option on the far right side of your screen that says Export Data Tables. See Figure 1, below.

If you click on that Export Data Tables option, Calcbench will then open a new tab displaying all the table data from the company you’ve chosen in spreadsheet format. We randomly selected Calumet ($CLMT), a solvents manufacturer that filed preliminary earnings results on Jan. 14, to see what would come up. The result is Figure 2, below.

OK, a quick table to reconcile Calumet’s estimated net loss for Q4 to the company’s Adjusted EBITDA. Calumet reported a potential range for Q4 net loss, and we won’t know the precise number until it files a full earnings release and quarterly report in a few weeks — but you can already see some internal adjustment items and what they’re likely to be.

There’s more, too. Look at that row of buttons above the spreadsheet: the second one from the left says “Filings.” If you click on that button, you’ll get a new display that lets you see all the recent filings right there next to your spreadsheet. See Figure 3, below.

Now you can choose from any of the filers on that new pane on the right; when you hit “Export Data Tables” again, that information will automatically populate into the spreadsheet display on the left.

Even better, notice the text field above that list of recent filers. You can type in the name of any company, and get a display of all filings for that company. We typed in JPMorgan Chase ($JPM), and got the results shown in Figure 4, below.

Astute observers will notice the spreadsheet display is now different. That’s because once the list of JPMorgan filings appeared, we clicked on Export Data Tables for the Form 8-K earnings filing listed near the top. As soon as we did, Calcbench displayed all important financial metrics at the top and then listed 10 tables’ worth of data further down the spreadsheet. It’s all there, waiting to be exported to your own desktop in a tidy Excel spreadsheet. 

(Especially astute observers will even notice that the Calumet data is still there on the spreadsheet too, in a secondary tab pushed to the back.)

You can use these capabilities to hop from one filing to another, extracting footnote-level disclosures and piling them into nifty spreadsheet tables with just a few clicks; Calcbench does all the heavy extraction and processing for you. Everything is neatly labeled, lined up, and ready to go.

All you need is a Calcbench subscription, a keen sense of which companies you want to study, and strong fingers to start typing as soon as the earnings data starts to arrive. We’ll do the rest!

One good example comes from Dollar General ($DG), the discount retail giant that made $38.7 billion in its fiscal 2023. Dollar General filed its second-quarter earnings release at the end of August, and included numerous nifty items:

• Same-store sales

• Merchandise inventories

• Category sales

• Store count

• Square footage

You can track all these disclosures in the Footnote Query & Disclosure tool in Calcbench, seeing how they have evolved over time. For example, we used the Export History feature to dig up the total square footage of Dollar General stores for the last 14 quarters and put them into a chart. Figure 1, below, took us less than three minutes. 

But wait, there’s more! We then dug up Dollar General’s quarterly revenue, too; and calculated revenue per square foot over the same period. See Figure 2.

So even though revenue increased by 21.5 percent over those 14 quarters (from $8.4 billion at the start of 2021 to $10.2 billion in second-quarter 2024), revenue per square foot only went from $65.15 to $66.10 in that same timeframe. Except for a single spike at the end of 2022 (hello inflation, we see you there), revenue per square foot fluctuated within a narrow band.

Other Retail Metrics

Another critical metric for retail sector performance is same-store sales, also known as comparable store sales. It measures the change in sales at individual stores open for some set period (usually a year), so analysts can get a better sense of trends in the company’s sales growth without the influence of new stores opening or failed stores closing.

Same-store sales growth is typically reported in the earnings release, and you can often find it in the Management Discussion & Analysis of the 10-Q, too. We pulled comparable-store sales growth for Target ($TGT), shown in Figure 3, below.

Yet again, we see that sales growth was doing OK until mid-2022 when inflation flared up, and then faltered through most of 2023. Only earlier this year did comparable-store sales rebound, when inflation had largely receded. 

What will Target’s comparable-store sales growth be for Q3? Ask us again in a few weeks, when the company files. 

You can explore other nooks and crannies of disclosure, too. For example, Macy’s ($M) reports same-store sales broken out by stores the company actually owns and those where Macy’s simply licenses the brand name to other owner-operators. Williams Sonoma ($WSM) breaks out revenue by specific store brands it owns. See Figure 4, below.

Other retailers report breakouts of products sold, although that’s more usually seen in the full 10-Q rather than the earnings release. 

All of it, however, is promptly collected and indexed by Calcbench! Just use our Disclosures and Footnotes Query page to dive into the data as deeply as you want, for as many retailers and you want. We have the data!

Not the ‘Walking Dead’ type, of course, although that was a great show. We’re talking about zombie companies — firms that have such anemic growth and high debt costs that all they can afford to do every year is pay the interest on their debt. They have no other cash to invest in the business and get themselves growing briskly again, so they lurch from one fiscal year to the next, devoting all their operating income to debt service.

How many such companies exist these days? How long have they been zombies? And most importantly, how much longer could they exist as zombies? 

That question has been on Calcbench’s mind since the Federal Reserve cut interest rates in September. If the Fed keeps cutting rates, it will get easier for firms to refinance that debt, especially if they racked up the debt in 2022 or 2023 when interest rates were high. Maybe zombies will come back into fashion.

To find the answers, we first searched all firms with more than $100 million in revenue in 2023 and then asked: how many of them had interest expense in 2023 that exceeded operating income? 

We found nearly 800 firms that fit the profile, including some very large names: Bausch Health Cos. ($BHC), Carnival Corp. ($CCL), PG&E Corp. ($PCG), and National Steel ($SID), to name a few. 

Walking Dead?

One company fitting the zombie profile is Bausch Health, a pharmaceutical company making various treatments for dermatology, gastrointestinal, and neurology disorders. Despite making at least $8 billion in annual revenue since 2015, Bausch’s annual interest expense has exceeded operating income the entire time. See Table 1, below.

What does zombie status mean for share price? Well, consider that Bausch shares hit an all-time high of $236 in July 2015. They have marched steadily downward ever since, and today trade at around $6.50 — and have been $6 to $8 for most of the last two years. 

On the other hand, we also have companies like cruise giant Carnival Corp., where interest expense has exceeded operating income for three years running. But is the zombie label really fair for Carnival? 

After all, the pandemic devastated cruise lines in 2020. They had to take on debt to survive, and reviving operations to pre-pandemic norms was always going to take years. 

For example, compare these key disclosures from 2019 and 2023 in Table 2, below.

OK, the 2023 numbers are kinda gross, but there’s value there. Revenue is up, and operating income isn’t peanuts. This is a company that suffered a single, unforeseeable disruption and is living with the consequences — an economic heart attack, if you will, rather than the economic emphysema that has hobbled Bausch for years. Then again, both patients are still not in good health no matter what the cause.

Speaking of Debt… 

You cannot analyze zombie companies without also considering the source of all their debt. After all, those debt levels drive the interest payments that push a company into zombie status — so where did that debt come from? How long will the payments last? 

We can research those details in the debt disclosure footnote that companies file, which of course is readily available from the Calcbench Disclosures and Footnotes Query page. (Don’t forget our series on debt disclosures, published last year.) 

On June 30, 2023, Bausch disclosed that one of its subsidiaries was acquiring a business called Xiidra (plus a few other small businesses) from Novartis, for a total price of $2.5 billion. Then came this telling detail: Bausch “intends to finance the $1.75 billion upfront cash purchase price with new debt prior to closing.” 

Ah ha! That’s why Bausch needed this $1.4 billion note! 

We kept searching, and found another filing from Sept. 11, 2023, that disclosed the terms of that $1.4 billion note. The complete story is this, excerpted straight from the 8-K:

On June 30, 2023, Bausch + Lomb obtained commitments in respect of a $1,750 million 364-day bridge facility (the “Bridge Facility”), the proceeds of which, if such Bridge Facility were utilized, would have been used to finance all or a portion of the Acquisition (including related costs). In lieu of incurring indebtedness under the Bridge Facility amount on September 29, 2023, Bausch + Lomb incurred $1,900 million, in aggregate principal amount of indebtedness, consisting of: (i) $1,400 million aggregate principal amount of 8.375% Senior Secured Notes due October 2028 (the “October 2028 Secured Notes”) and (ii) $500 million in principal amount of new term B loans with a five-year term to maturity (the “September 2028 Term Facility”). Borrowings under the September 2028 Term Facility, together with a portion of the October 2028 Secured Notes, were used in connection with the Acquisition and effective September 29, 2023, the Bridge Facility was canceled.

One important question here is whether the $1.4 billion loan is callable — that is, whether Bausch could call the loan early and pay off the entire amount, to rid itself of that interest expense early. We found nothing that said Bausch can. 

That’s an important point to ponder as the Federal Reserve starts cutting rates again. It’s possible that Bausch might be able to refinance this debt at a lower rate; but if the loan isn’t callable, that path is foreclosed. Bausch the zombie will need to lumber onward.

First let’s look at the income statement itself, in Figure 1, below. We pulled up a few prior first fiscal quarter results for comparison.

OK, the financial performance itself seems solid — but wow, Cintas classifies more than 20 percent of its revenue as “Other.” And that Other segment, whatever it is, went from $468.7 million two years ago to $567.7 million today; that’s an increase of 21 percent. That compares to growth of only 14 percent for Cintas’ uniform and facilities rental segment, which supposedly is the star of the show. 

So exactly what’s in that Other segment? Why is it growing so fast, and what else can we learn about its performance? 

Those answers are easy to find if you know where to look.

To start we went to the Disclosures and Footnotes tool, to find Cintas’ earnings release for its fiscal first quarter. (This was not hard; Cintas filed it at 8:32 a.m. on Wednesday and Calcbench had it indexed within minutes.) Read through the release and you’ll find that the Other segment Cintas lists on the income statement is actually two segments — First Aid and Safety Services, and another other segment labeled “All Other.” See Figure 2, below.

Not only do we have a more precise breakdown of operating segments; we have more granular data for each of those segments. For example, we can now calculate that All Other has an operating margin of 15.7 percent; First Aid and Safety has a margin of 24.3 percent; and Uniform and Facilities Rental has one of 23.1 percent. 

From there you could continue digging. For example, you could use our Export History feature to pull up disclosures from prior periods and assess historical performance. We did that, to compile this chart of All Other’s performance for the last 12 quarters. (Actual performance in blue; trend line in red.)

All well and good, but we still have the question: What is “All Other”? 

For that, we used the Disclosures and Footnotes tool again to open Cintas’ Management Discussion & Analysis section from its most recent annual report. Pretty near the top we found our answer: 

The Uniform Rental and Facility Services reportable operating segment consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ business, which consists of the Fire Protection Services operating segment and the Uniform Direct Sale operating segment, is included in All Other.

So, direct sales of uniforms and fire protection services; that’s the answer, and you’d only find it by digging into the footnotes. 

Inspiration for this post came from payments processor Bill.com ($BILL), which filed its latest annual report last week. We were snooping around the company’s business acquisition footnote, and found a discussion of Bill.com’s acquisition of Invoice2Go back in 2021. The deal was valued at $674.3 million, and that purchase price was allocated as follows in Figure 1, below.

As you can see, intangible assets were valued at $91.22 million, or 13.5 percent of the total $674.3 million price. (Goodwill was a whopping 86.8 percent of the total price, but we’ve written about goodwill in acquisitions plenty of times before.) 

So exactly what went into that $91.22 million of intangible assets? We skimmed further down the footnote, and found a nifty table describing the three main elements. See Figure 2, below.

All of those elements are quite typical of a software acquisition. The acquiring company gains new customer relationships, technology developed by the target company, and residual value of the target company’s name until the acquirer washes that name away after some period of time.

At this juncture we should pause to appreciate the accounting rules here. For reasons that only a CPA could love, internally developed software assets are not included on the balance sheet as intangible assets; internally developed software isn’t listed anywhere, actually, other than as an operating expense. So it’s often more advantageous for a high-growth software venture to acquire other software companies, since those other companies’ technology is listed on the balance sheet as an intangible asset.

Like most intangible assets, however, those customer relationships, developed technology, and trade name do depreciate over time. Which means the weighted average useful life disclosure (as seen in Figure 2) can become quite important. 

For example, analysts could ask: Has the company made a reasonable estimate of the useful life? Could external factors (say, a rapid advance in competitors’ technology) shorten or otherwise change that estimated lifespan in the future? Could a poor estimate of the useful life risk an impairment of the intangible asset sometime in the future? 

Bill.com’s discussion of the Invoice2Go acquisition is simply an example of the disclosures one can find with Calcbench. So we wondered — what do other software companies say about the intangible assets involved in their acquisitions?

Searching for Detail

That information is not difficult to find in Calcbench. For example, we went to the Footnote and Disclosures database, then searched for any reference to “developed technology” by the S&P 500 in their 2023 annual reports (and then narrowed the search to companies using that term in their business combinations footnote). We found dozens of results. 

For example, Trane Technologies ($TT, maker of HVAC systems) disclosed multiple acquisitions in 2023 worth a total of $843.4 million. Intangible assets were valued at $330 million, or 39 percent of total acquisition costs. Those intangibles were valued as follows:

Analog Devices ($ADI, maker of various micro-electronic components) discussed its $27.95 billion acquisition of Maxim Integrated Products from 2022. Intangible assets were $12.43 billion (or 44.8 percent) of that deal, and were accounted for as follows:

And for good measure, we should also examine the disclosures of cybersecurity firm CrowdStrike ($CRWD) because it discusses two quite different acquisitions.

First is the company’s acquisition of Bionic Stork, a privately held company that provides an application security posture management platform, whatever that is. CrowdStrike paid $239 million for Bionic last year, including $34.9 million worth of intangible assets. In that $34.9 million, $29.9 million of that sum was assigned to “developed technology” with a lifespan of 72 months.

OK, cool beans; but CrowdStrike also acquired a smaller firm last year called Reposify Ltd. for $18.5 million. That amound included $3.8 million of developed technology, which seems to be the only intangible asset reported from the deal — and CrowdStrike estimated the lifespan of Reposify’s developed technology also at 72 months. (The deal was so small that CrowdStrike didn’t report it in table format so we have nothing to show you.) 

We’re not cybersecurity software developers, so we don’t know whether 72 months is an appropriate lifespan estimate or not — but we did notice that CrowdStrike is using the same estimated lifespan for both acquisitions. Well, why? Does the company use 72 months as a standard benchmark for all acquisitions? Is that appropriate for the cybersecurity industry? 

Those are questions for investors and analysts to ponder. Calcbench simply has the data so that those questions can be brought to the surface, and you can find the answers.

Well, OK… but exactly what are those companies disclosing about AI risks?

After all, it’s easy to see why more companies are talking about AI as a risk: because ChatGPT exploded onto the scene in late 2022. It’s cool and disturbing and everywhere and has potentially huge disruptive effects, so companies can’t really not say at least something about AI’s significance to their operations.

Still, that’s not the same as saying how AI might be a risk to your company. Some firms might see their business models eviscerated; others might see their businesses soar if they’re nimble enough to take advantage of AI in a timely manner. 

To explore this question, we fired up Calcbench’s Disclosures and Footnotes database and searched for S&P 500 companies that mentioned “artificial intelligence” in their risk factors for Q2 filings. 

Most companies kept that discussion of AI simple — say, adding AI as yet another technology that might complicate the firm’s cybersecurity risks, or mentioning AI as a technology the company needs to harness. 

For example, Nike ($NKE) had one sentence that mentioned AI, as part of a larger discussion about the company’s reliance on technology:

To  the extent we integrate artificial intelligence ("AI") into our operations, this may increase the cybersecurity and privacy risks, including the risk of unauthorized or misuse of AI tools we are exposed to, and threat actors may leverage AI to engage in automated, targeted and coordinated attacks of our systems.

Darden Restaurants ($DRI) did much the same, although it managed to stretch its discussion to two sentences:

However, because technology is increasingly complex and cyber-attacks are increasingly sophisticated and more frequent, there can be no assurance that such incidents will not have a material adverse effect on us in the future. For example, the rapid evolution and increased adoption of artificial intelligence technologies may intensify our and our service providers’ and key suppliers’ cybersecurity risks.

A more expansive discussion came from Clorox ($CLX). It mentioned AI multiple times in its risk factor discussions, including the important point that the company’s long-term prospects might suffer if it can’t reap the benefits of new technology quickly:

If the Company is unable to increase market share in existing product lines, develop product innovations, undertake sales, marketing and advertising initiatives that grow its product categories, effectively adopt and leverage existing and emerging technologies, such as artificial intelligence or machine learning, and/or develop, acquire or successfully launch new products or brands, it may not achieve its sales growth objectives.

More specifically, Clorox warned that it might struggle to wield AI in a manner that respects compliance obligations, ethical concerns, and legal risks:

In addition, the legal, regulatory and ethical landscape around the use of artificial intelligence and machine learning is rapidly evolving. The Company’s ability to adopt this emerging technology in an effective and ethical manner may impact its reputation and ability to compete, and this technology could be, among other things, false, biased, or inconsistent with the Company’s values and strategies. Further, the use of generative artificial intelligence tools may compromise confidential or sensitive information, put the Company’s intellectual property at risk, or subject the Company to claims of intellectual property infringement, all of which could damage the Company's reputation.

That’s a good point to raise. Right now the regulatory climate for AI is still a mess (read Radical Compliance if you’re a compliance nerd who wants the deets on AI compliance issues), and nobody quite knows what businesses will need to do to stay on the right side of AI law in, say, 2030.

Fedex Corp. ($FDX) made similar risk disclosures about seizing AI’s potential heightened cybersecurity threats. It also raised an interesting point about AI and social media generating so much digital noise that the company might struggle to keep up with reputation risks:

With the increase in the use of artificial intelligence and social media outlets such as Facebook, YouTube, Instagram, X (formerly Twitter), TikTok, and other platforms, adverse publicity, whether warranted or not, can be disseminated quickly and broadly without context, making it increasingly difficult for us to effectively respond. Certain forms of technology such as artificial intelligence also allow users to alter images, videos, and other information relating to FedEx and present the information in a false or misleading manner.

Somewhat to our surprise, Microsoft ($MSFT) mentioned artificial intelligence only once, despite being a huge player in AI development:

We are investing in artificial intelligence (“AI”) across the entire company and infusing generative AI capabilities into our consumer and commercial offerings. We expect AI technology and services to be a highly competitive and rapidly evolving market, and new competitors continue to enter the market. We will bear significant development and operational costs to build and support the AI models, services, platforms, and infrastructure necessary to meet the needs of our customers. To compete effectively we must also be responsive to technological change, new and potential regulatory developments, and public scrutiny.

In other words, Microsoft is betting the company on the success of AI. That’s not an unwarranted bet, but it’s going to be a big, enterprise-wide, long-term endeavor. 

We could keep going with more examples; we found 39 in Q2 filings alone, and several hundred in annual 10-K filings for 2023 — and that’s all for the S&P 500 alone, never mind all the other businesses out there. 

Filers looking for inspiration on how to describe AI in your risk factors can always start here, comparing yourselves to peers. At the least, those other disclosures would help you have more informed discussions with the legal team, the CTO, or anyone else in your enterprise involved in artificial intelligence, so you’ll know what questions to ask them as you form your narrative disclosures. Whatever data you need, Calcbench has it!

We can start with the impairment itself, announced as part of Warner Bros.’ second-quarter earnings release filed on Aug. 7. The company declared an impairment of $9.1 billion for its Networks division, which includes operations such as cable TV and other broadcast television operations, both in the United States and abroad.

OK, it’s not news that traditional television has been taking it in the teeth lately, as consumers cut the cable in favor of streaming services. But what exactly caused Warner Bros. to declare a goodwill impairment now, barely two years after the company came into being with the merger of Discovery Inc. and the Warner Media business of AT&T ($T) back in April 2022? 

This is a question worth considering because that merger involved a lot of goodwill — $22.1 billion in a deal with a total value of $42.4 billion, according to the purchase price allocation disclosed by Warner Bros. See Figure 1, below.

So if Warner Bros. is already impairing such a significant part of the deal, could further impairments lurk somewhere down the road? Exactly how bad has business in its Networks segment been, anyway? Could astute analysts have anticipated this impairment landmine and sidestepped it? 

That’s what we wanted to know.

Start With Fair Value Disclosures

Companies are supposed to review their goodwill assets annually and, when necessary, test those assets for possible impairment. An impairment could be triggered by a sudden, specific event (say, a subsidiary that loses exclusive rights to a key product); or by a long, steady, irreversible decline in value of a certain asset or the company’s share price.

According to its footnote disclosure about goodwill, Warner Bros. experienced both triggers. First, and as you may have seen in the news, the network lost its rights to broadcast NBA games; that is one of those sudden, specific events that dramatically weaken the value of the business. (Warner Bros. is now suing the NBA and its decision to broadcast the games on Amazon.) 

More interesting to financial analysts, however, are the criteria Warner Bros. used to monitor the long-term value of its Networks division — exactly the sort of details that could signal potential future trouble, if analysts know where to look and what those signals mean.

There in the goodwill footnote, Warner Bros. disclosed two critical assumptions:

• A long-term growth rate for the Networks division of negative 3 percent.

• A discount rate of 10.5 percent, “reflective of the risks inherent in the future cash flows of the reporting unit and market conditions.” 

Yikes. Taken together, those two assumptions telegraph to investors that Warner Bros. knows that the future of Networks division is only going down. Then came the dust-up over NBA broadcast rights, making matters all the worse.

In other words, astute readers of Warner Bros. financial statements could have anticipated that a goodwill impairment was possible, if you were reading the footnotes and paying attention to external events (the NBA fight) streaking across the headline. Sometimes, when you have 2 and 2, you can calculate that the answer is 4.

More Tricky: Segment Disclosures

Warner Bros. also reports revenue according to three major operating segments: Studios (making content), DTC (direct-to-consumer streaming services), and that troubled Networks division. See Figure 2, below.

Using our show-tag-history feature, we then traced the Network segment’s revenues for the last two years (back to when Warner Bros. Discovery was born in April 2022). As you can see in Figure 3, below, segment revenue has zig-zagged down pretty much from birth, and the trend line in red is alarmingly steep.

You can find even more detail about the Networks segment (and Warner Bros.’ other two segments) if you read the earnings release directly. There, the company breaks down specific lines of business within each segment, complete with comparables to prior periods.

Unfortunately these details are only displayed in a PDF image, so they can’t be indexed for easy and immediate display. But if you know where they are, you can read them and see that the Networks segment is staggering along with a pretty bad limp. See below.

That’s enough for today, but we’ll have more about this impairment in another post — including a look at what other entertainment companies are reporting these days, and how to compare disclosures to suss out what’s what.

When looking at a company’s financial summary, look for the series of Excel export choices that Calcbench also provides. Usually you’ll see that as a list of Excel icons above the financial data, although sometimes those icons are stacked in a corner instead. 

For example, see Figure 1, below, which shows the latest quarterly data filed by beer and spirits giant Constellation Brands ($STZ) on Wednesday. 

Click on any of those icons, and in moments you’ll get reams of useful data ready to be exported to your desktop in Excel. You can then fiddle with that spreadsheet to your heart’s content, dump the data into other models and templates you already have, or do whatever else you want to do with the data.

Moreover, when you view the data as a spreadsheet, you get much more than what you see there on the financial statements from Figure 1. 

For example, if you view the Earnings Model spreadsheet for Delta Airlines ($DAL), you get year-over-year comparisons for Delta’s most recent quarter, in both absolute numbers and percentage terms. Figure 2, below, shows what we mean. (We picked Delta as an example because it’s one of the early filers every quarter, so this will all be updated with Q2 data soon enough.) 

The Earnings Model also displays lots of non-GAAP financial metrics too, with all the same year-over-year comparisons. Figure 3, below, shows those disclosures for Delta.

Those are just more of the many ways Calcbench tries to collect, organize, and display financial and operating data as efficiently as possible for your analysis. Enjoy the long weekend and then brace for Q2 data starting the following week!

This may take a while because, of course, we have so many ways to capture and analyze non-GAAP data.

Standardized Non-GAAP Metrics

The easiest place to begin your research is on the Multi-Company Disclosures page. The field for standardized disclosure metrics that we track (on the left side of the screen) now tracks more than a dozen common non-GAAP disclosures. Figure 1, below, shows some of the potential choices when you type “non-GAAP” into the search field.

Simply select the non-GAAP disclosure you want to find, and our database will pull it up for all companies in your peer group that report that metric. For example, Figure 2, below, shows all the net income and non-GAAP net income reported in the Dow Jones Industrial Average for 2023 annual reports. 

Notice that not all companies report non-GAAP metrics. Apple ($AAPL), Caterpillar ($CAT), and several others in the Dow Jones Industrials don’t, and hence the non-GAAP entry for them is blank. 

This display is most useful if you want to study non-GAAP disclosures for a large group of companies, or to calculate the difference between a GAAP and non-GAAP disclosure quickly. (Just export the whole thing to Excel and then you can do the math in an adjacent column.)

A Single Company’s Non-GAAP Disclosures

Calcbench also has several ways to track non-GAAP disclosures at individual companies, primarily by using our Interactive Disclosures database to research footnote disclosures. 

Let’s use Boeing ($BA) as a randomly selected example.

Start by going to the Interactive Disclosures page and pulling up the earnings release from the “Choose footnote disclosure type” field on the left side of the page. The earnings release is where companies report non-GAAP metrics. Simply scroll through the release and you’ll come to those disclosures quickly enough. 

Figure 3, below, shows some of the non-GAAP metrics that Boeing discloses right away. 

For every non-GAAP metric that is hyperlinked (and all three non-GAAP disclosures in the above figure are), you can do a few things. 

You can export the entire table (non-GAAP disclosures and all) by holding your cursor over the hyperlinked item until an Excel icon appears with an “Export” command next to it.

You can export the history of that specific line item, also by holding your cursor over the disclosure; except this time select the “Export History” choice next to the Excel icon. Indeed, if you simply hold the cursor long enough, the previous values for that non-GAAP disclosure will appear on your screen! See Figure 4, below. 

In fact, did you see what we did there in Figure 4? The non-GAAP disclosure isn’t about financial performance at all! It’s about deliveries of Boeing planes. Calcbench tracks all those disclosures too, which really are more key performance metrics than they are non-GAAP financial disclosures. 

We’ve written before about revenue metrics in the airline industry, revenues in the railroad industry organized by type of item shipped, passenger numbers for ride-sharing services, and much more. 

The bottom line is that companies report a wide range of disclosures, from non-GAAP financial metrics to key performance indicators — and Calcbench can help you track them all, easily and quickly.

To that end, today’s post is about how to create a peer group within our databases, so you can benchmark your data more quickly and easily.

First, Calcbench already comes with one easy trick to find the peers of a company you’re analyzing at the moment. 

For example, we visited the Company-in-Detail page, and pulled up the most recent annual statements for chipmaker Nvidia ($NVDA). Those results are below — and notice, in the upper-right corner, we have a “Related” line (see the red arrow) with a few Nvidia peers: Micron Technology, Advanced Micro Devices, Broadcom, Analog Devices, and Texas Instruments. Click on any of those ticker symbols, and we automatically pull up the same financial data for that peer company in a separate page.

OK, that’s great; but most of the time you’ll want to find a larger group of peer companies at a single stroke. We have a few ways to do that, too. Let’s review.

Choose Your Companies

The most versatile way to build your own peer group is our Choose Companies button. You’ll see that button somewhere in the upper left corner of the Company-in-Detail Page, the Multi-Company page, the Interactive Disclosures page, and just about every other database page we offer. Press that button, and you’ll see this image, Figure 2, below. 

Here, you can select industry groups by SIC or NAICS sector. The coding systems are similar but not always identical; so you will get mostly the same companies within a sector regardless of which system you choose — but we can’t guarantee that SIC and NAICS groupings will always be identical. Plan accordingly.

Another option is to go with several standard peer groups Calcbench already built into the system: the S&P 500, the Dow Jones Industrial Average, all SEC registrants who file by International Financial Reporting Standards, and ESEF, the European Single Electronic Format Filers. They are all in the middle column of Figure 2. 

You can also set up a filtering screen, if you want to compile a list of peers by geography, revenue, or some other financial metric. First, select the Screen/Filter feature. Then you can sort by geographic region (country or U.S. state); or by one of many financial metrics.

To search by metric, look for the Choose button next to “Normalized Metric.” (See Figure 3, below; circled in blue.) You can then sift through any number of metrics on the financial statements, including footnotes or even financial ratio (which Calcbench can calculate for you). Once you choose your metric, you can also set filters using the last pull-down menu on this screen: greater than, less than, or not equal to whatever number you want.

How can you apply multiple metrics? That’s easy to do, but you must do it one at a time. For example, you might search all companies in the food sector by SIC code; then filter by a state; then filter by revenue over $50 million; then filter by accounts receivable amount. It would look something like Figure 4, below.

Every time, be sure that the “Filter existing list” button is marked, to keep refining the list of peer companies to the precise group you want.

Adding Companies

And if you have your own list of companies ready to go? That’s easy, too. Just open the Choose Companies screen, and on the far left, hit “Enter Ticker List.” (See Figure 5, below; circled in blue.) A new tab opens where you can add your companies in a simple cut-and-paste job.

Or if you use our features to refine your peer group somewhat, but you still want to add a few more companies of your own, just add those ticker symbols in the Add Company text box.

When you’re done, you can save your peer group for future reference by using the box in the middle. Just give the group a name and press the Save button (circled in red, Figure 5 above). The group will remain there and be available every time you open the Choose Companies box until you delete it.

Of course, we’re always happy to help Calcbench subscribers with more complicated research needs. You can email us at info@calcbench.com any time.