Pro-forma earnings are earnings that exclude particularly unusual events or transactions, such as restructuring costs or litigation. ... Pro-forma earnings are also sometimes called core or operating earnings because they are based on the earnings of the company's main businesses without nonrecurring losses or gains.

Are pro forma earnings reliable?

For some companies, pro-forma earnings provide a much more accurate view of their financial performance and outlook because of the nature of their businesses. ... They are useful tools to help identify a company's core value drivers and analyze changing trends within company operations.

What is excluded from pro forma income?

Expenses commonly excluded from pro forma earnings include restructuring charges, amortization of certain intangible assets, and noncash expenses paid with equity. Commonly excluded gains include unrealized investment gains and gains from one-time sales of assets.