In monitoring SEC comment letters, we came across this SEC comment letter recently made public.  While we acknowledge the term “pro forma” is often used by registrants when adjusting their GAAP results to provide additional meaningful information to investors, this comment by the Staff serves as a reminder to registrants that the Staff generally dislikes non-GAAP measures titled as “pro forma” when the information is not presented in compliance with the pro forma rules in Article 11 of Regulation S-X.  In this situation, the registrant agreed to delete the words “pro forma” and instead use the words “as adjusted.”

The comment, which was issued in connection with the Staff’s review of an initial public offering Form S-1, is repeated below:

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures, page 17

  1. We note that you have titled several of your non-GAAP measures as “pro forma.” Based on the information in the filing, it does not appear that this information is pro forma financial information based on the guidance in Article 11 of Regulation S-X. If true, please revise your presentation to more clearly present your non-GAAP measures eliminating the use of the words pro forma.

RESPONSE: In response to the Staff’s comment, the company has revised pages 14 through 21 of the Registration Statement to delete the words “pro forma,” and instead use the words “as adjusted.”

If you have any questions about this SEC guidance, please feel free to email the author directly or, if applicable, contact your primary Bass, Berry & Sims relationship attorney.