News Release

Toronto – Canada’s securities regulators are publishing guidance to address concerns about companies’ widespread use of unconventional earnings measures.

Staff of the Canadian Securities Administrators (CSA) issued today a notice to address concerns about investors being confused or misled by issuers that publish earnings measures other than those prescribed by Generally Accepted Accounting Principles (“GAAP”). This notice sets out staff’s expectations of issuers that publish non-GAAP earnings measures.

“Investors should be cautious when looking at non-GAAP earnings measures,” said John Carchrae, Chair of the CSA Chief Accountants Committee. “It is important to understand that these measures present only part of the picture and may selectively omit certain expenses, resulting in a more positive portrayal of a company’s performance.”

It has become common practice for many issuers to publish non-GAAP earnings measures, such as “pro forma earnings,” “operating earnings,” “cash earnings,” “EBITDA,” and “adjusted earnings.” These terms lack standard, agreed upon meanings and are unlikely to be comparable to measures presented by other issuers.

Among the expectations for issuers specifically described in the staff notice are the following:
· Present prominently with the non-GAAP earnings measures the earnings measures for the period determined in accordance with GAAP, and provide a clear reconciliation between the two.
· Describe the objectives of the non-GAAP earnings measures and discuss the reasons for excluding individual items required by GAAP to be included in determining net income or loss.
· Avoid including non-GAAP earnings measures within the financial statements.

“We are not suggesting that companies should stop reporting non-GAAP earnings measures if they will help investors understand the financial results,” said Mr. Carchrae. “But it is essential to explain clearly how the measures are calculated, and to include GAAP measures as well, so that investors see the full picture.”

Investors can access and download a company’s financial disclosure from the CSA’s “SEDAR” database at www.sedar.com . There you can download without charge a company’s quarterly and annual financial statements and many other corporate filings.

The document published today, titled “Staff Notice 52-303: Non-GAAP Earnings Measures,” can be found on the British Columbia Securities Commission website at www.bcsc.bc.ca , the Alberta Securities Commission website at www.albertasecurities.com, the Ontario Securities Commission website at www.osc.gov.on.ca, and the Commission des valeurs mobilières du Québec website at www.cvmq.com .

For more information:


British Columbia Securities Commission:
Andrew Poon Carla Marie Hait
Media Relations Officer Chief Accountant
604-899-6880 604-899-6726
1-800-373-6393 (B.C. & Alberta only)

Alberta Securities Commission:
Joni Delaurier Fred Snell
Communications Coordinator Chief Accountant
403-297-4481 403-297-6553

Ontario Securities Commission:
Jeff Codispodi Cameron McInnis
Communications Officer Senior Accountant
416-593-8135 416-593-8221

Commission des valeurs mobilières du Québec
Patrice Bourgoin Annie Smargiassi
Information Officer Spécialiste de la doctrine comptable
514-940-2199 ext. 4434 514-940-2199 ext. 4577
1-800-361-5072 (Quebec only)