PRIMARY SEC REGULATORY SOURCE — RELEASE NO. 33-8176
SEC Regulation G & Non-GAAP Disclosure Guide
Master regulatory guide on SEC Regulation G compliance and Regulation S-K Item 10(e) rules for public company non-GAAP financial measures. Sourced from SEC.gov Release No. 33-8176 ↗
SEC Non-GAAP Reconciliation Requirements
Whenever a public reporting company presents a non-GAAP financial measure (such as Adjusted EBITDA, Free Cash Flow, or Contribution Margin), Regulation G mandates:
- Equal Prominence: The most directly comparable US GAAP financial measure (e.g. Net Income) must be presented with equal or greater prominence.
- Quantitative Reconciliation: A clear schedule reconciling the non-GAAP measure directly to the most directly comparable GAAP measure.
- Prohibited Adjustments: Adjustments for recurring normal cash operating expenses are strictly prohibited under SEC compliance guidelines.
Worked SEC Reg G EBITDA Reconciliation Schedule
US GAAP Net Income: $8,500,000
+ Provision for Income Taxes: $2,800,000
+ Interest Expense, net: $1,400,000
+ Depreciation & Amortization: $4,200,000
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EBITDA (Non-GAAP): $16,900,000
+ Non-recurring M&A Integration Costs: $1,200,000
+ Stock-Based Compensation Expense: $2,500,000
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Adjusted EBITDA (Non-GAAP): $20,600,000
+ Provision for Income Taxes: $2,800,000
+ Interest Expense, net: $1,400,000
+ Depreciation & Amortization: $4,200,000
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EBITDA (Non-GAAP): $16,900,000
+ Non-recurring M&A Integration Costs: $1,200,000
+ Stock-Based Compensation Expense: $2,500,000
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Adjusted EBITDA (Non-GAAP): $20,600,000