A coalition of major corporations and industry associations has expressed support for a proposal allowing companies to optionally file semiannual financial reports. Companies such as Eli Lilly, Bristol Myers Squibb, Gilead, Johnson & Johnson, Merck, Pfizer, Roivant, Viatris, and Zoetis have indicated they may choose to file semiannual reports on Form 10-S while maintaining voluntary quarterly earnings releases. Eli Lilly expects to adopt this approach if the proposal is implemented as planned.
ExxonMobil is among the supporters, asserting that investors are increasingly reliant on earnings releases and Form 8-K filings rather than traditional Form 10-Q documents. The company has also suggested introducing a new Form 8-K item that would allow companies to file financial statements and associated information for the first and third quarters without full 10-Q preparation.
Prominent industry associations like the U.S. Chamber of Commerce, the National Association of Manufacturers, and the American Petroleum Institute have voiced their backing for this initiative. Financial Executives International’s Committee on Corporate Reporting (FEI CCR) highlighted that a significant portion of its members—representing over $19 trillion in market capitalization—support semiannual reporting. A recent survey found that 58% of CCR members indicated they would likely opt for semiannual reporting, while 42% preferred to continue with quarterly filings. Notably, those leaning towards semiannual reporting would still commit to voluntary quarterly earnings releases.
This trend raises questions about the future landscape of corporate financial reporting, as a substantial shift away from quarterly disclosures could significantly alter the information available to investors.
Key Points:
- Why this story matters: The potential shift to semiannual reporting could change how investors receive information from large corporations.
- Key takeaway: Nearly 60% of surveyed Fortune 100 companies are inclined to choose semiannual reporting while still issuing quarterly earnings releases.
- Opposing viewpoint: Concerns exist regarding the lower legal liability and assurance associated with earnings releases compared to traditional quarterly reports.
