Three-fourths of companies in the S&P 100 reported non-GAAP earnings in 2013, exceeding their reported GAAP earnings by an average of 12 percent points, according to a recent study.

The Georgia Tech Financial Analysis Lab studied the reconciliations of GAAP and non-GAAP net income for the S&P 100 in their 2013 filings to determine the nature and effect of the adjustments they made to derive non-GAAP figures. The study found 75 of the 100 companies reported non-GAAP earnings, with 48 companies making adjustments as a result of gains or losses due to non-recurring events. Income taxes gave rise to 30 adjustments, and 27 adjustments arose from restructuring and productivity-related charges.

The biggest improvements to net income came from non-cash compensation, the study found, where 10 companies reported an average improvement to earnings of nearly 18 percent as a result of such adjustments. Adjustments for impairment charges improved earnings an average of nearly 10 percent for 19 companies, the study shows.

The report also calls attention to recurring items that are sometimes used to adjust reported GAAP earnings. For example, 13 companies backed depreciation and amortization out of reported GAAP earnings to show an average non-GAAP earnings improvement of 20 percent. One company backed out a provision for income taxes to show an improvement to earnings of more than 55 percent.

The Securities and Exchange Commission frowns on the use of non-GAAP measures over a concern that companies might use them to mislead investors. Non-GAAP reporting is not prohibited, however.

“I’m not opposed to the whole concept of non-GAAP income,” says Chuck Mulford, executive director of the Georgia Tech lab. “Nobody is closer to a company’s results than the company is.” However, adjusting GAAP income for recurring items, which means they are not one-time anomalies, is a stretch, he says. “I was disappointed to see non-cash compensation being used to adjust GAAP income. I think that’s misleading.”