Financial Statement Requirements in US Securities Offerings What You Need to Know 2021 Edition FINANCIAL STATEMENT REQUIREMENTS IN US SECURITIES OFFERINGS: WHAT YOU NEED TO KNOW 2021 Edition Alexander F. Cohen Paul M. Dudek Joel H. Trotter Latham & Watkins LLP Jonathan R. Guthart Timothy D. Brown Erin L. McCloskey KPMG LLP February 2021 Alexander F. Cohen is a partner in the Washington, D.C. office of Latham & Watkins LLP; Paul M. Dudek is a partner in the Washington, D.C. office of Latham & Watkins LLP; and Joel H. Trotter is a partner in the Washington, D.C. office of Latham & Watkins LLP. Jonathan R. Guthart is a partner in the Department of Professional Practice of KPMG LLP and is located in the New York City office. Timothy D. Brown is a partner in the Department of Professional Practice of KPMG LLP and is located in the New York City office. Erin L. McCloskey is a partner in the Department of Professional Practice of KPMG LLP and is located in the New York City office. 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TABLE OF CONTENTS Introduction .................................................................................................................................................................................................................................................................................................. 1 The Basics...................................................................................................................................................................................................................................................................................................... 1 Background to Financial Statement Requirements ................................................................................................................................................... 1 What Financial Statements Must Be Included in Public Offerings? .................................................................................................. 1 What Financial Statements Must Be Included to Begin SEC Review? ....................................................................................... 4 When Does Financial Information Go “Stale”? ................................................................................................................................................................ 4 Staleness of Financial Statements ..................................................................................................................................................................................................... 5 When Do Financial Statements Go Stale in 2021? ................................................................................................................................................... 7 MD&A ........................................................................................................................................................................................................................................................................................ 7 Additional Financial Information for Certain Specific Situations ..................................................................................................................... 9 Recent and Probable Acquisitions ...................................................................................................................................................................................................... 9 Financial Statements Required in Connection With Acquisitions ..................................................................................................... 10 Pro Forma Financial Information ....................................................................................................................................................................................................... 12 Discontinued Operations and Other GAAP Retrospective Revisions ........................................................................................ 14 Guarantor Financial Statements ........................................................................................................................................................................................................ 15 Secured Offerings .................................................................................................................................................................................................................................................... 17 Investments Accounted for Under the Equity Method ....................................................................................................................................... 17 Segment Reporting ................................................................................................................................................................................................................................................ 18 Supplemental Schedules for Certain Transactions ................................................................................................................................................ 19 Industry Guides ........................................................................................................................................................................................................................................................... 19 Quantitative and Qualitative Disclosure About Market Risk ..................................................................................................................... 20 Some Related Issues................................................................................................................................................................................................................................................................ 21 Additional Financial Information That Is Typically Included ....................................................................................................................... 21 Non-GAAP Financial Measures .......................................................................................................................................................................................................... 21 Form 8-K Filing Requirements in Connection With Significant Acquisitions or Dispositions ................... 23 Internal Control Over Financial Reporting ........................................................................................................................................................................... 23 Interactive Data ........................................................................................................................................................................................................................................................... 24 Special Considerations in Rule 144A Transactions and for Foreign Private Issuers ................................................. 24 Rule 144A Transactions .................................................................................................................................................................................................................................. 24 Special Rules Applicable to Foreign Private Issuers and Acquired Foreign Businesses.............................. 25 Conclusion 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