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I. Introduction and Scope of Portfolio
II. History, Purpose, and Components of MD& A
A. Historical Development
B. Purpose and Components of MD& A
2. Capital Resources
3. Results of Operations
C. The SEC's Interpretive Release
1. Prospective Information
2. Material Changes in Financial Statement Line Items
3. Interim Period Reporting
4. Segment Analysis
5. Participation in High Yield Financings, Highly Leveraged Transactions or Non-Investment Grade Loans and Investments
6. Effects of Federal Financial Institutions Upon Operations
7. Preliminary Merger Negotiations
III. Forward-Looking Information
A. Required Disclosure Versus Voluntary Forward-Looking Information
B. Safe Harbors For Forward-Looking Information
2. Rule 175 and Rule 3b-6
3. The "Bespeaks Caution" Doctrine
4. The "Puffing" Doctrine
5. The Private Securities Litigation Reform Act of 1995
b. The Statutory Safe Harbors
c. "Forward-Looking" Statements
d. Meaningful Cautionary Language
e. Actual Knowledge
C. The Duty to Update Forward-Looking Statements
IV. Significant Judicial and Administrative Action Involving MD& A
B. Disclosure About Past Performance
1. Segment Disclosure: Individual Components of Overall Performance
2. Risks Associated With a Company's Activities
C. Known Trends and Uncertainties
1. Known to Management and Reasonably Likely to Have a Material Adverse Effect on Financial Condition
2. Quantifying a Material Adverse Effect
V. Recent Years' Guidance on MD& A Disclosure in 2001 and Beyond
A. December 2001: Cautionary Advice on Disclosure About Critical Accounting Policies
B. January 2002: Interpretive Guidance on Enhanced MD& A Disclosure
C. May 2002: Proposed Rules on Disclosure About Critical Accounting Policies
1. Purpose and Scope of Proposed Rules
2. Disclosure Presentation
3. Critical Accounting Estimates
a. Definition of "Critical Accounting Estimate"
b. Specific Disclosures About Critical Accounting Estimates
4. Disclosure Regarding Initial Adoption of Accounting Policies
5. Status of Rule Proposals
D. Results of SEC Fortune 500 Review
1. Critical Accounting Policies
2. Non-GAAP Financial Information, Off-Balance Sheet Arrangements, and Securitized Financial Assets
3. Restructuring Charges
4. Impairment of Long-Lived Assets, Investment Securities, and Intangible Assets
5. Pension Plans
6. Segment Reporting
E. Off-Balance Sheet Arrangements and Tabular Disclosure of Contractual Obligations
1. Definition of "Off-Balance Sheet Arrangement"
2. Disclosure About Off-Balance Sheet Arrangements
3. Tabular Disclosure of Contractual Obligations
4. Safe Harbor for Forward-Looking Statements
F. Non-GAAP Financial Information
G. Interpretive Guidance on Drafting MD& A
1. Overall Presentation
2. Focus and Content
3. Liquidity and Capital Resources
4. Critical Accounting Estimates
H. "Dear CFO" Letters Regarding Fair Value (March and September 2008)
VI. Organization and Relationship to Part 1
B. Role of SEC Guidelines
VII. Introduction or Overview Section of MD& A
C. Cisco Systems, Inc.
D. Procter and Gamble Company
E. Leggett & Platt Incorporated
VIII. Liquidity and Capital Resources
B. Pall Corporation
C. Herman Miller, Inc.
D. Teleflex Incorporated
IX. Results of Operations
B. Southwest Airlines Co.
C. Paychex, Inc.
D. Home Depot, Inc.
X. Key Indicators of Financial Condition and Operating Performance
C. Phelps Dodge Corporation
D. Google, Inc.
E. Home Depot, Inc.
XI. Known Trends and Uncertainties
C. Expedia, Inc.
D. Boeing Company
E. Princeton Review, Inc.
XII. Forward Looking Information
B. Gap, Inc.
C. Home Depot, Inc.
D. Intel Corporation
XIII. Safe Harbors - Meaningful Cautionary Language
B. The Procter & Gamble Co.
C. EMC Corporation
D. CVS Corp.
XIV. Material Changes in Financial Statement Line Items
B. Leucadia National Corporation
C. Norfolk Southern Corporation
D. Teleflex Incorporated
XV. Interim Period Reporting
XVI. Segment Analysis
B. Intel Corporation
C. Staples, Inc.
D. Nike, Inc.
XVII. Critical Accounting Estimates
B. Target Corporation
C. Meade Instruments Corp.
D. Dell Inc.
XVIII. Off-Balance Sheet Arrangements and Tabular Disclosure of Contractual Obligations
B. Leucadia National Corporation
C. Laureate Education, Inc.
D. Sun Microsystems, Inc.
TABLE OF WORKSHEETS
Worksheet 1 Item 303 of Regulation S-K (Management's Discussion and Analysis of Financial Condition and Results of Operations)
Worksheet 2 Concept Release on Management's Discussion and Analysis of Financial Condition and Results of Operations, Securities Act Release No. 6711, Exchange Act Release No. 24356 (April 17, 1987)
Worksheet 3 Interpretive Release: Management's Discussion and Analysis of Financial Condition and Results of Operations; Certain Investment Company Disclosures, Securities Act Release No. 6835, Exchange Act Release No. 26831 (May 24, 1989)
Worksheet 4 Cautionary Advice Regarding Disclosure About Critical Accounting Policies, Securities Act Release No. 8040, Exchange Act Release No. 45149 (Dec. 12, 2001)
Worksheet 5 Commission Statement About Managment's Discussion and Analysis of Financial Condition and Results of Operations, Securities Act Release No. 8056, Exchange Act Release No. 45321 (Jan. 22, 2002)
Worksheet 6 Proposed Rule: Disclosure in Management's Discussion and Analysis about the Application of Critical Accounting Policies, Securities Act Release No. 8098, Exchange Act Release No. 45907 (May 10, 2002)
Worksheet 7 Final Rule: Conditions for Use of Non-GAAP Financial Measures, Securities Act Release No. 8176, Exchange Act Release No. 47226 (Jan. 22, 2003)
Worksheet 8 Final Rule: Disclosure in Management's Discussion and Analysis About Off-Balance Sheet Arrangements and Aggregate Contractual Obligations, Securities Act Release No. 8182, Exchange Act Release No. 47264 (Jan. 28, 2003)
Worksheet 9 Summary by the Division of Corporation Finance of Significant Issues Addressed in the Review of the Periodic Reports of the Fortune 500 Companies (February 2003)
Worksheet 10 Frequently Asked Questions Regarding the Use of Non-GAAP Financial Measures (June 2003)
Worksheet 11 Interpretation: Commission Guidance Regarding Management's Discussion and Analysis of Financial Condition and Results of Operations, Securities Act Release No. 8350, Exchange Act Release No. 48960 (Dec. 19, 2003)
Worksheet 12 Current Accounting and Disclosure Issues in the Division of Corporation Finance (Excerpt Concerning MD& A) (March 4, 2005)
Worksheet 13 Report and Recommendations Pursuant to Section 401(c) of the Sarbanes-Oxley Act of 2002 on Arrangements with Off-Balance Sheet Implications, Special Purpose Entities, and Transparency of Filings by Issuers (Excerpt Concerning MD& A) (June 21, 2005)
Worksheet 14 List of Significant Accounting Pronouncements Principally Discussed
Worksheet 15 March 2008 SEC "Dear CFO" Letter Regarding Fair Value
Worksheet 16 September 2008 SEC "Dear CFO" Letter Regarding Fair Value
Securities and Exchange Commission:
Advice, Findings, and Statements:
Other SEC Materials:
American Institute of Certified Public Accountants:
Financial Accounting Standards Board:
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