The SEC previously noted in a Compliance and Disclosure Interpretation that financial measures included in forecasts provided to a financial advisor and used in connection with a business combination transaction are not non-GAAP financial measures if:

• the financial measures are included in forecasts provided to the financial advisor for the purpose of rendering an opinion that is materially related to the business combination transaction; and
• the forecasts are being disclosed in order to comply with Item 1015 of Regulation M-A or requirements under state or foreign law, including case law, regarding disclosure of the financial advisor’s analyses or substantive work.

The SEC has now issued two new C&DIs on this topic. In one, the SEC confirms a registrant can rely on the foregoing interpretation if the same forecasts provided to its financial advisor are also provided to its board of directors or board committee.

In the other new C&DI, the SEC notes that disclosure of forecasts provided to bidders in a business combination transaction are not non-GAAP financial measures if the registrant determines the forecasts are material and that disclosure of such forecasts is required to comply with the anti-fraud and other liability provisions of the federal securities laws.