Over the Cliff – Increasing Disclosure of the Fiscal Cliff


Much has been recently written regarding the impending “fiscal cliff” facing the U.S. economy if the President and Congress do not act before the end of the year to strike a deal.  Pundits predict that scheduled tax increases and spending cuts, if allowed to occur, will materially and adversely affect the U.S. economy.  And now, public companies are taking notice.

Beginning even prior to the results of the 2012 U.S. presidential election, reporting companies have increasingly included disclosure in their public filings about the projected impact of the fiscal cliff on their operations.  The disclosures also reflect the general uncertainty about future economic conditions, despite generally modest improvement in operating results during 2012.  For example, The Blackstone Group L.P.’s most recently filed Form 10-Q states:

“In the U.S., the macroeconomic outlook remains uncertain, and investors remain cautious. While there has been some increased confidence regarding the European sovereign debt situation, investors remain concerned about the upcoming fiscal cliff in the U.S. as well as slowing growth in emerging markets.”

Most companies are choosing to disclose the proposed effects of the fiscal cliff in sections related to economic overviews of their business or as general risk factors.  Some are choosing to reference general economic uncertainty caused by the fiscal cliff in the “forward-looking statements” disclaimer contained in their public filings.

OUR TAKE:  Absent any clear indication from Washington that a compromise will be reached regarding scheduled tax increases and spending cuts, issuers must increasingly be mindful of the effects of this situation on their business and industry.  That is especially so for public companies in certain sectors, like defense, healthcare and insurance, who have the greatest potential to be negatively affected if we go over the cliff.   

The publications contained in this site do not constitute legal advice. Legal advice can only be given with knowledge of the client's specific facts. By putting these publications on our website we do not intend to create a lawyer-client relationship with the user. Materials may not reflect the most current legal developments, verdicts or settlements. This information should in no way be taken as an indication of future results.

Search Tips:

You may use the wildcard symbol (*) as a root expander.  A search for "anti*" will find not only "anti", but also "anti-trust", "antique", etc.

Entering two terms together in a search field will behave as though an "OR" is being used.  For example, entering "Antique Motorcars" as a Client Name search will find results with either word in the Client Name.


AND and OR may be used in a search.  Note: they must be capitalized, e.g., "Project AND Finance." 

The + and - sign operators may be used.  The + sign indicates that the term immediately following is required, while the - sign indicates to omit results that contain that term. E.g., "+real -estate" says results must have "real" but not "estate".

To perform an exact phrase search, surround your search phrase with quotation marks.  For example, "Project Finance".

Searches are not case sensitive.

back to top