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NIRI's Frequently Asked Questions

Earnings Conference Calls and Webcasts

Regulation G


Earnings Conference Calls and Webcasts

Do I need to announce the date that my company will report its earnings?

How should I announce the date?

Does my company need to do a conference call when we report earnings?

Do I need to webcast the conference call?

Is there a procedure for announcing the earnings conference call?

Am I required to announce in advance other kinds of webcasts, such as presentations before investor conferences?

If we are conducting a press conference to announce a major event or other breaking news, how far in advance should we announce that it will be webcast?

Conference calls are priced based on the number of phone lines being used - which can get pretty expensive. Must I allow everyone to dial in to the conference call or can I simply give them the Web site access information?

Who from the company should participate in the conference call?

Does the conference call need to allow listeners to ask questions?

Can I disclose new material information on the conference call?

What if we unintentionally disclose new material information during the conference call?

If I issue an earnings news release followed by a conference call an hour later, must I furnish the release with a Form 8-K before the call starts if I know that no new material information will be disclosed on the call?

Regulation G

Will the SEC be commenting on my press release?

Do I have to furnish the transcript of my earnings call on an 8-K?

Does my earnings release have to comply with Reg G?

Do I have to reconcile EBITDA to both net income and cash flow?

We don't prepare our statement of cash flows until after the earnings release. Do I still have to reconcile EBITDA to cash flow?

How do I develop a good reason for the non-GAAP measure?

Analysts always ask for our EBITDA. Isn't that a good reason? We have also given it for many years.

What if I am giving a non-GAAP measure for forward-looking information?

What if you do not present non-GAAP information in the earnings release but do on the conference call?

What is the 48-hour exemption rule?

Where on my Web site should I put the Reg G information and how long do I need to keep it?

Can these rules be triggered by any event other than an earnings release and conference call?

When a company discusses non-GAAP numbers orally in a one-on-one presentation, must it reconcile?

If company doesn't put its guidance in the earnings press release but discusses guidance on a webcast conference call, must it furnish a transcript of the conference call on an 8-K?

Earnings Conference Calls and Webcasts

Do I need to announce the date that my company will report its earnings?
No, but it certainly is a good communication practice to do so.

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How should I announce the date?
You can issue a press release or post it on your Web site.

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Does my company need to do a conference call when we report earnings?
There is no requirement to do so, but such calls are an efficient way to disseminate information to a wide audience (instead of repeating details on numerous individual calls) and can satisfy Reg FD requirements for full disclosure.

Do I need to webcast the conference call?
A webcast conference call provides access to all investors who are interested in listening to your call. The SEC in Reg FD considers the fully accessible conference call as a means for full disclosure. Therefore, if new material information is discussed on the call, it is considered fully disclosed. Also, it gives the company spokesperson protection under Reg FD if he/she answers a question, knowing that the response is likely to be considered new material information. NIRI surveys show that 92% of companies represented by NIRI members conduct conference calls and virtually all are webcast.

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Is there a procedure for announcing the earnings conference call?
The best practice is to issue a news release, preferably at least several days in advance of the call and post the information on your Web site. The news release and Web posting should tell investors the date and time of the call and how to access it. Note that if non-GAAP information is to be disclosed on the conference call, the press release should also include reference to the website location where the required reconciliation information will be available. In addition, the financial and statistical information contained in the presentation should be provided on the company's website. You also may use "push e-mail" to inform investors; who have requested to be informed about upcoming earnings conference calls, but this should not be viewed as a substitute for a news release.

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Am I required to announce in advance other kinds of webcasts, such as presentations before investor conferences?
If it is a scheduled event, such as an investor conference presentation, you should announce it in advance using one of the methods stated in the previous Q&A so that it can satisfy Reg FD requirements for full disclosure.

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If we are conducting a press conference to announce a major event or other breaking news, how far in advance should we announce that it will be webcast?
That information can be provided in the news release announcing the event. An announcement that a call will be held on a certain date and time without providing a reason is likely to cause unnecessary and perhaps incorrect market speculation.

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Conference calls are priced based on the number of phone lines being used — which can get pretty expensive. Must I allow everyone to dial in to the conference call or can I simply give them the Web site access information
Web site access is sufficient

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Who from the company should participate in the conference call?
The investor relations officer should definitely participate along with the chief financial officer. The chief executive officer and other members of senior management should participate regularly or at least periodically.

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Does the conference call need to allow listeners to ask questions?
No, it can be in a "listen-only" format.

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Can I disclose new material information on the conference call?
Yes, if you've publicly announced that a call will take place, but it is strongly advisable (and required by the NYSE) that any new material information be included in your earnings press release or in a subsequent news release issued shortly after the call.

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What if we unintentionally disclose new material information during the conference call?
Reg. FD requires you to issue a news release containing that information or furnish (Item 9) or file (Item 5) an 8-K within 24 hours of the disclosure unless you publicly announced the fully accessible conference call. If the information relates to the company's results or operations or financial condition for a completed fiscal period, Item 12 of Form 8-K requires you to furnish the release on an 8-K within five business days. A single 8-K is sufficient for both purposes, but it must be filed by the earlier due date.

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If I issue an earnings news release followed by a conference call an hour later, must I furnish the release with a Form 8-K before the call starts if I know that no new material information will be disclosed on the call?
No. You have 48 hours from the time the news release is issued to conduct your conference call without having to furnish an 8-K. If, however, you disclose new material information during the call, and you haven't furnished the release with an 8-K prior to the call, you would have to furnish an 8-K to the SEC containing the new material information within 24 hours. (This also assumes you have properly announced the call in advance and how to access it.) Moreover, if you disclose any non-GAAP information on the call, you have to furnish additional information on the 8-K.

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Regulation G

Will the SEC be commenting on my press release?
Maybe, but the SEC does review all SEC documents filed by companies at least every three years. As part of that review they may look at and comment on past press releases. The SEC also may look at press releases in response to news stories or enforcement-related inquiries. At the present time, the SEC is particularly concerned about the use of non-GAAP financial information in earnings releases and compliance with Regulation G.

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Do I have to furnish the transcript of my earnings call on an 8-K
You do not if you have furnished the earnings release with a Form 8-K prior to the fully accessible conference call and the call is held within 48 hours of issuing the earnings release (a process that most companies appear to be establishing). This also assumes that you have properly announced the date and time of your conference call and how the public can access it.

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Does my earnings release have to comply with Reg G?
Yes, Reg G applies to any disclosures of material information that includes non-GAAP measures.

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Do I have to reconcile EBITDA to both net income and cash flow?
The requirement is to reconcile to the most directly comparable measure. These measures can be used as either a performance measure or a liquidity measure or both. Therefore, your reconciliation will depend on the way(s) in which you are using the measure.

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We don't prepare our statement of cash flows until after the earnings release. Do I still have to reconcile EBITDA to cash flow?
Yes, unless you are not using it as a liquidity measure. If you are using EBITDA as a performance measure, it should be reconciled to net income as presented in the statement of operations under GAAP.

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How do I develop a good reason for the non-GAAP measure?
You should have discussions internally with the CFO, controller, accounting staff and others within your company as to how and why they use this information. Talk with analysts and find out why a non-GAAP measure may be useful to them and read their research reports. Read other companies' disclosure to see how they explain their use of non-GAAP measures.

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Analysts always ask for our EBITDA. Isn't that a good reason? We have also given it for many years.
The SEC specifically said that just because analysts ask for the information is not a good reason. They want detailed disclosure as to the value of the information to investors and management and non-boilerplate.

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What if I am giving a non-GAAP measure for forward-looking information?
The reconciliation requirement still applies unless the reconciling information is not available without unreasonable effort. If you cannot provide the reconciliation, you should disclose that fact, identify the information that is unavailable and disclose its probable significance.

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What if you do not present non-GAAP information in the earnings release but do on the conference call?
You would need to provide a reconciliation of that information with the appropriate GAAP measure(s) and post it on your Web site pursuant to the procedures set forth in the answer below (click here)

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What is the 48-hour exemption rule?
If you conduct your earnings conference call or webcast within 48 hours after issuing the earnings release and furnish or file it with an 8-K prior to the call, you can avoid filing another 8-K with the transcript of the call. This, again, assumes you are conducting a fully accessible conference call and that the public has received proper notification of the call and how to access it, including how to access the financial and statistical information contained in the conference call presentation, together with the reconciliation information required by Regulation G.

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Where on my Web site should I put the Reg G information and how long do I need to keep it?
There is no stated requirement but the SEC suggests companies place it in their investor relations section and keep it there for one year. When the information has been superseded by more current information, you may want to consider removing it from the company's Web site or moving it to an archive section of the company's Web site

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Can these rules be triggered by any event other than an earnings release and conference call?
Yes, they can be triggered at investor conferences, industry panels, interviews and so on if there is disclosure of material non-public information (Regulation FD) or if the information relates to the company's results of operations or financial condition for a completed quarterly or annual period (Item 12 of Form 8-K)

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When a company discusses non-GAAP numbers orally in a one-on-one presentation, must it reconcile?
No, oral comments don't need to be reconciled since a one-on-one is not considered a public event such as a presentation at an investor conference.

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If company doesn't put its guidance in the earnings press release but discusses guidance on a webcast conference call, must it furnish a transcript of the conference call on an 8-K?
It depends. From the standpoint of Reg G, if earnings guidance is stated using non-GAAP measures, then a reconciliation of that information with the appropriate GAAP measures need not be furnished with an 8-K following the conference call so long as:

  • the conference call is complimentary to, and occurs within 48 hours of, the earnings release;
  • the earnings release is furnished to the SEC on an 8-K prior to the conference call;
  • the conference call is properly noticed, including instructions on when and how to access the call and the location of the company's Web site where the information is available, and the call is fully accessible; and
  • and the financial and statistical information contained in the presentation is provided on the company's Web site together with the reconciliation information required by Regulation G.

From the standpoint of Regulation FD, if the earnings guidance is stated on a GAAP basis only, an 8-K need not be furnished so long as the conference call has been properly noticed and fully accessible. Note, however, that the NYSE requires that any new material information be included in a news release issued shortly after the call.

Notice
We are providing these "Frequently Asked Questions" solely as a general discussion of the issues. They should not be regarded as legal advice which may be provided only by properly licensed attorneys and which depends on the facts of each situation.


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