Volume 25, No. 10

The Non-GAAP Habits of Serial Acquirers in the S&P 500:  The non-GAAP earnings presentations of actively-acquisitive firms often include adjustments related to their current acquisitions, as well as the lingering “integration effects” of prior acquisitions. All manner of acquisition activity-related adjustments is fair game. They’re plentiful - and large.

 In our March report on non-GAAP earnings, we found eighteen kinds of frequent adjustments used by non-GAAP reporters in arriving at their non-GAAP earnings presentations. While that sounds like a lot, it’s a surprisingly compact number: this time around, we looked at just the acquisitions activity-related adjustments for 201 firms that reported them - and came up with ten additional acquisitions activity-related categories. Surprisingly, those adjustments accounted for over 60% of all the dollar value of the adjustments the firms made. The information technology and health care sectors were the biggest fans of such reporting - and maybe not surprisingly, deployed it nearly every year over the last seven years.

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