Often, there is confusion in the marketplace regarding the use
of non-GAAP financial measures. Reporting issuers frequently use
non-GAAP financial measures, non-GAAP ratios or other specified
financial measures, such as “adjusted EBITDA”,
“pro forma earnings”, and “free cash flow per
ounce”, in the documents they prepare and file to fulfill
their continuous disclosure obligations. Such use tends to be
problematic, however, as it often lacks context, standardized
meanings and transparent calculations when disclosed outside of
financial statements. As a result, the threat that such financial
measures could mislead investors is real. Canadian securities
regulators have helpfully provided new regulatory requirements and
guidance around the use of non-GAAP financial measures which seek
to alleviate confusion in the use of such financial measures.
