Last month, we published a blog post explaining the basis for our view that Regulation G does not require a GAAP reconciliation when M&A disclosure documents present the management projections used by financial advisors to opine on the financial fairness of merger consideration.
We argued that these projections are not the type of information that Regulation G was adopted to police and that, in view of the bases in Delaware case law and Regulation M-A for including disclosure of these projections, they should be considered exempt from the reconciliation requirements of Regulation G and Item 10(e) of Regulation S-K. Accordingly, we urged the SEC staff to provide guidance confirming our view.
We are pleased to report that yesterday the SEC staff provided that guidance in a new Compliance & Disclosure Interpretation (C&DI) on Non-GAAP Financial Measures (NGFMs).
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