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Yesterday, I blogged about the SEC Staff’s new guidance on deferred tax assets and Form 8-Ks under Item 2.06. Note that a company may reach the conclusion that there is no impairment – or could rely on Item 2.06’s Instruction to defer the reporting of the impairment until the next quarterly report if the conclusion about the impairment is reached during a quarterly review.  The bottom line is that after the Staff’s guidance, it’s unlikely that we’ll see many companies decide that an Item 2.06 8-K filing is required.

However, as this Gibson Dunn memo points out, companies need to keep in mind the possibility of an Item 2.02 filing if they discuss the impact of tax reform on their fourth quarter results after the new year:

Item 2.02 of Form 8-K applies to more than just a company’s earnings release, and instead is triggered by any public disclosure of material non-public information regarding a company’s results of operations or financial condition for a completed quarterly or annual fiscal period. Thus, any disclosures regarding material tax accounting effects of the Tax Act that relate to, but are made after the end of, the fiscal period that includes December 22, 2017 could trigger a required Item 2.02 Form 8-K. For example, if an executive of a calendar year company publicly comments on material tax accounting effects of the Tax Act during the first week of January 2018, the company may need to furnish such disclosures on a Form 8-K.

Item 2.02 8-Ks are “furnished,” not “filed” – and while they’re not optional, a stumble here won’t impact a company’s S-3 eligibility.

Speaking of that, the concerns that companies had before the Staff’s guidance about the possible need for an Item 2.06 filing suggest that it’s probably a good time for a reminder about the safe harbor that applies for certain 8-K items, including Item 2.06. For these 8-K items, there is no Rule 10b-5 liability for failure to file (under Rule 13a-11(c)), and the company does not lose Form S-3 eligibility if the disclosure is made by the due date of the next quarterly filing (under General Instruction I.A.3). The safe harbor covers 8-K line items that – like Item 2.06 – require materiality assessments, and while it doesn’t excuse willful failures to file, it does provide a bit of a cushion for companies that get their initial materiality analysis wrong.

We are posting memos about the new SEC Staff guidance in our “Regulatory Reform” Practice Area.

Shareholder Proposals: Corp Fin Rejects Apple Despite SLB 14I

Here’s the intro from this blog by Davis Polk’s Ning Chiu:

The SEC Staff decided that a no-action letter by Apple citing the recently issued SLB 14I was not excludable based on the information presented. The Staff noted that “We are unable to conclude, based on the information presented in your correspondence, including the discussion of the board’s analysis on this matter, that this particular proposal is not sufficiently significant to the Company’s business operations such that exclusion would be appropriate. As your letter states, ‘the Board and management firmly believe that human rights are an integral component of the Company’s business operations.’ Further, the board’s analysis does not explain why this particular proposal would not raise a significant issue for the Company.”

Also see this blog by Steve Quinlivan. A total of four no-action responses were issued to Apple last week…

– Broc Romanek