3290.1 A forecast about post-acquisition results of operations may be meaningful when provided with a pro forma statement of comprehensive income prepared in accordance with S-X Article 11 when historical financial statements of the acquiree are not indicative of future financial condition or results of operations because of changes in the business and the omission of various operating expenses in the financial statements of businesses carved out of larger entities. If a forecast is presented, management should clearly identify it as forward-looking. If the forward-looking information provided is not in the form of a comprehensive forecast of revenue and net earnings, disclosure of how revenue and operating efficiencies may vary given the assumptions underlying the forward-looking information that is provided should be included.

3290.2 If a pro forma statement of comprehensive income is presented, management should limit it to information that is reliably determinable and not include forward-looking information within the pro forma statement of comprehensive income. Management also should disclose how the pro forma statement of comprehensive income is not indicative of operations going forward because it necessarily excludes various operating expenses. Material assumptions also should be fully explained in a note. If factually supportable, certain adjustments may demonstrate the effects of the changes in operations that may have affected historical revenues or operating expenses had they been implemented at the beginning of the historical period. [Instruction 4 to S-X Article 11] See Section 2065 for guidance about form and content of carve out financial statements. The limitations of the pro forma information should be explained clearly.