Regulation G.SS.02-09-2012.ext

SUPPORTING STATEMENT FOR REGULATION G
This supporting statement is part of a submission under the Paperwork Reduction
Act of 1995, 44 U.S.C. §3501, et seq.

A.

Justification

1.

Circumstances Making the Collection of Information Necessary

Regulation G, under the Securities Exchange Act of 1934 (the “Exchange Act”)
requires registrants when publicly disclosing material information that includes nonGAAP financial measures to provide a reconciliation to comparable GAAP figures.
Regulation G implemented the requirements of Section 401 of the Sarbanes-Oxley Act.
Specifically, Regulation G is intended to provide investors with balanced financial
disclosure when non-GAAP financial measures are presented.
2.

Purposes and Use of the Information Collection

Every issuer that is subject to Section 13(a) or 15(d) under the Exchange Act must
file periodic and current reports with the Commission containing information about its
business and financial condition. Regulation G is intended to implement the
requirements of the Sarbanes-Oxley Act of 2002. Specifically, Section 401 of the
Sarbanes Oxley Act of 2002 required the Commission to issue rules providing that pro
forma financial information included in any periodic or other report filed with the
Commission pursuant to the securities laws, or in any public disclosure or press or other
release, shall be presented in a manner that: (1) does not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the pro forma
financial information, in light of the circumstances under which it is presented not
misleading; and (2) reconciles it with the financial condition and results of operations of
the issuer under generally accepted accounting principles.
3.

Consideration Given to Information Technology

Regulation G information is not required to be filed with the Commission but may
be disclosed in electronic format, such as on an Internet website.
4.

Duplication of Information

Regulation G information does not duplicate, overlap, or conflict with other
federal rules.

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5.

Reducing the Burden on Small Entities
Most small businesses do not present non-GAAP financial information.

6.

Consequences of Not Conducting Collection

Rules providing for less frequent disclosure than Regulation G requires would not
be consistent with the intent of the Sarbanes-Oxley Act.
7.

Special Circumstances
Not applicable.

8.

Consultations with Persons Outside the Agency

Regulation G was proposed for public comment. No comments were received on
this request during the 60-day comment period prior to OMB’s review of this submission.
9.

Payment or Gift to Respondents
Not applicable.

10.

Confidentiality
Not applicable.

11.

Sensitive Questions
Not applicable.

12.

Estimate of Respondent Reporting Burden

We estimate that approximately 14,000 public companies are required to comply
with Regulation G approximately six times a year for a total of 84,00 filings annually.
We estimate that it takes approximately 0.5 burden hours per response for a total of
42,000 burden hours annually. The estimated hours are made solely for the purpose of
the Paperwork Reduction Act. They are not derived from a comprehensive survey or
study of the cost of Commission rules and forms.

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13.

Estimate of Total Annualized Cost Burden

We estimate that an outside firm would charge approximately $26 an hour for the
services of a junior accountant ($26 x 42,000 hours) for a total cost burden of $1,092,000.
The estimated cost burden is made solely for the purposes of the Paperwork Reduction
Act. It is not derived from a comprehensive survey or study of the cost of Commission
rules and forms.
14.

Costs to Federal Government
The estimated cost to the federal government is approximately $25,000.00.

15.

Reason for Change in Burden
No applicable.

16.

Information Collections Planned for Statistical Purposes
Not applicable.

17.

Display of OMB Approval Date
Not applicable.

18.

Exceptions to Certification for Paperwork Reduction Act Submissions
Not applicable.

B.

Statistical Methods
Not applicable.