Non-GAAP Financial Measures



On June 27, 2016, Securities and Exchange Commission (“SEC”) Chair Mary Jo White, speaking at the International Corporate Governance Network’s Annual Conference in San Francisco, reiterated the SEC’s growing concern regarding the use by public companies of non-GAAP financial measures. In her keynote address, Chair White lamented that “[i]n too many cases, the non-GAAP information, which is meant to supplement the GAAP information, has become the key message to investors, crowding out and effectively supplanting the GAAP presentation.” While companies are allowed to present non-GAAP financial measures in their public disclosures to enable them to convey a clearer picture of their results of operations and “tell their own stories” to investors, Chair White voiced her concern that recently, companies have been “taking this flexibility too far and beyond what is intended and allowed by our rules.”



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