Conditions for the Use of Non-GAAP Financial Measures and New Form 8-K Requirements for Earnings Releases

Overview: Pursuant to Section 401(b) of the Sarbanes-Oxley Act of 2002 (the “Act”), the Securities and Exchange Commission (the “SEC”) on January 22, 2003 adopted disclosure rules for public companies that release pro forma financial information in any report filed with the SEC or in any other public disclosure or release. The SEC created new Regulation G, which is effective March 28, 2003, to address the use of pro forma, or “non-GAAP” financial information by publicly traded companies. A “non-GAAP financial measure” is a numerical measure of a company’s historical or future financial performance, financial position or cash flow that excludes amounts included in the most directly comparable GAAP financial measure in the statement of income, balance sheet or statement of cash flows; or includes amounts that are excluded from the most directly comparable GAAP financial measure. The disclosure must include a presentation of the “most directly comparable financial measure” calculated and presented in accordance with GAAP; and a reconciliation (by schedule or other clearly understandable method) of the differences between the non-GAAP financial measures and the most directly comparable financial measure(s) calculated and presented in accordance with GAAP. The Form 8-K requirements apply regardless of whether there are any non-GAAP financial measures included in the release.

(Is this item miscategorized? Does it need more tags? Let us know.)

Format: PDF | Size: 32KB | Date: Jan 2003 | Pages: 4