On May 17, 2016, the SEC issued new Compliance & Disclosure Interpretations related to Regulation G. The Podium discussed the new guidance on the reporting of non-GAAP financial measures with Sullivan & Worcester Partner Howard Berkenblit.
The Podium: What do you see as the most significant changes that came out of the new SEC guidance on Reg G?
HB: There are two main themes to the changes. First there are some additional interpretations regarding what can and can’t be presented – these have the practical effect of creating new rules without technically changing the rules. For example, one of the changes makes explicit that EBITDA “must not be presented on a per share basis,” while others give new examples of adjustments that may not be made to non-GAAP measures. While some of these were implicit from the rules or prior SEC Staff speeches and comments, having them in Compliance and Disclosure Interpretations, even if theoretically not binding, gives them greater weight.