4.8 Non-GAAP Measures on the Face of Financial Statements and Notes
Item 10(e)(1)(ii)(C) expressly prohibits a registrant from
presenting non-GAAP measures in financial statements prepared in accordance with
GAAP. Accordingly, a registrant may not present non-GAAP measures in either of the
following places:
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The face of the financial statements.
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The footnotes accompanying the financial statements.
In some circumstances, a registrant may be required by GAAP to
present a measure that might otherwise be considered a non-GAAP measure (e.g.,
adjusted EBITDA) in the notes to the financial statements, such as segment
disclosures presented in accordance with ASC 280. A measure presented in this
context is not considered a non-GAAP measure under the Rules and therefore would not
be prohibited. For additional information, including a discussion of segment
disclosures that may be prohibited, see Section 2.5.
Item 10(e)(1)(ii)(D) also prohibits a registrant from presenting
non-GAAP measures on the face of any pro forma financial statements required to be
disclosed by Regulation S-X, Article 11.