Financial Executives International (FEI) and the National Investor Relations Institute (NIRI) believe that broad guidelines for earnings press releases will improve consistency among companies for the presentation and analysis of results. These are not standards, but best practices for clear and consistent public statements on corporate earnings.

Included below are matters for consideration about earnings press releases:

Scope

Earnings press releases as defined in this document do not include pre-announcements of changes in earnings estimates or announcements of significant unusual items that may affect earnings. Pre-announcements of this type will likely be less detailed than the quarterly earnings release.

Timing

Earnings press releases should generally be issued as soon as practicable after quarter-end. NYSE and Nasdaq rules exceed SEC Regulation FD requirements in that they require press releases. Public companies may also elect to file earnings releases on Form 8-K with the SEC.

Content

Historical data

Earnings press releases should include "reported" results for the period presented under generally accepted accounting principles (GAAP). Pro forma "cash basis" or "adjusted," "underlying," "ongoing" or "core" results are often used to supplement the period's GAAP results, and are provided to clarify both that period's performance as well as future prospects. GAAP results provide a critical framework for pro forma results, although the pro forma results may be more analytically useful. It is important to provide the pro forma results in context of their GAAP framework. The order in which reported or pro forma results are presented in the release is not as important as their context. Pro forma results should always be accompanied by clearly described reconciliation to GAAP results; this reconciliation is often provided in tabular form.

Although management does not hold an independent or arms'-length view of the enterprise, it is management's responsibility to prepare earnings press releases with a reasonably balanced perspective of operating performance. Such releases should ordinarily include analyses of operating results and a discussion of both positive and negative factors significantly affecting revenue, profitability and other key financial indicators that measure the health of the enterprise (e.g. debt to equity ratios, etc.).

Examples of matters that may be particularly useful include discussions of significant:

Enterprise phenomena (e.g., noncore gains and losses; accounting changes; productivity, price, volume and cost trends; geographic performance; competitors' actions)

Natural phenomena (e.g., weather disruptions, earthquakes)

Economic phenomena (e.g., interest rate changes, price changes, exchange rate changes, and regional economic factors)

The most significant factors affecting the enterprise's results for the period will appear in both the earnings press release as well as management's discussion and analysis (MD&A) filed with the Securities and Exchange Commission. Some enterprises use earnings press releases as a framework for the more detailed analysis in MD&A - a best practice.

Forward Looking Statements

Predictability of key revenue and earnings factors differs by enterprise. Thus, management is encouraged to discuss, within appropriate Safe Harbor provisions, the outlook for the coming quarters. Such discussion may have the benefit of reducing volatility in the share prices.

Other

It is usually desirable to display prominently in headlines of the earnings press release the most meaningful information. Most often, this is GAAP and/or pro forma earnings per share.

Enterprises are encouraged to include the telephone and Web site information for access to the quarterly earnings conference call, if applicable.

Management should regularly review both the Safe Harbor language in the earnings press release and the enterprise description to assure that it is accurate, complete and specific to all appropriate risk factors.

Consistency

Reconciliation between GAAP and pro forma results should be treated in similar fashion for comparable periods. In other words, elements of the reconciliation should not be presented in one period without including similar elements in pro forma results of comparable periods.

Reference Materials

For more information on appropriate disclosure and using the Safe Harbor for forward-looking statements, see the "Standards of Practice for Investor Relations," second edition, published January 2001. For additional information on related subjects, look to the following websites: www.fei.org and www.niri.org.