Under Regulation G, Rule 100(b), a registrant is prohibited from presenting a non-GAAP measure that is misleading. Regulation G states that a registrant should not publicly disclose a non-GAAP financial measure “that . . . contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the presentation of the non-GAAP measure . . . not misleading.” Regulation G applies to all public statements that include or refer to non-GAAP measures. The guidance also applies to any SEC filing or furnished press releases under Form 8-K, Item 2.02 (see discussion in Chapter 6).
Regulation G applies whenever a registrant, or person acting on its behalf, publicly discloses or releases material information that includes a non-GAAP financial measure. Such information may be furnished to or filed with the SEC or publicly disclosed or released in another manner.
In certain situations, Regulation G and Item 10(e) do not apply. For example, they do not apply to non-GAAP measures related to projections or forecasts provided to a financial adviser as part of a proposed business combination or measures required to be disclosed by a governmental authority. See Section 2.3 for a discussion of measures that do not meet the definition of a non-GAAP measure under the Rules.
Item 10(e) applies to all SEC filings that include non-GAAP financial measures.
See footnote 3.
Form 8-K, Item 2.02, requires registrants to furnish to the SEC all releases or announcements disclosing material nonpublic financial information about completed annual or quarterly fiscal periods, regardless of whether the release or announcement includes disclosure of a non-GAAP financial measure. Item 2.02 also specifies that the requirements in Item 10(e)(1)(i) apply to such disclosures. If a registrant elects to file the release or announcement with the SEC, all the requirements in Item 10(e) apply.
Although Regulation G and Form 8-K, Item 2.02, do not refer to the prohibitions in Item 10(e)(1)(ii), registrants should consider the concepts in these and other prohibitions when using non-GAAP measures.
Footnote 11 of the Release notes that certain non-GAAP per-share measures are prohibited under GAAP and SEC rules.