We examine the association between target firms' public non‐GAAP earnings disclosures and merger and acquisition (M&A) efficiency. This research question is important, given the widespread use of non‐GAAP metrics in M&A valuation and lack of evidence regarding the real effects of non‐GAAP disclosure. Public non‐GAAP disclosure can enhance bidders' ability to assess a target's core earnings and potential synergy, especially in the earlier stages of due diligence, and enable bidders to make better M&A decisions. We find that target firms' non‐GAAP disclosures are associated with greater M&A efficiency, greater synergies, and lower likelihood of post‐acquisition goodwill impairment. We also find some evidence that target firms' non‐GAAP disclosures are positively related to post‐acquisition operating performance. Further, we find modest evidence that the positive relation between non‐GAAP disclosures and M&A efficiency is stronger (1) for targets that are more difficult to value, (2) for targets with weaker information environments, and (3) when targets' non‐GAAP numbers are of higher quality. Overall, our evidence suggests that non‐GAAP disclosures help facilitate efficient resource allocation in M&As and are associated with real effects on corporate investment. Our evidence is potentially relevant to regulators' concerns about the usefulness of non‐GAAP metrics.

We examine how managers’ incentives to minimize litigation risk interact with the unique features of environmental information to shape disclosure decisions. We rely on peer firms’ lawsuits to generate variation in environmental disclosure litigation risk, consistent with prior research and anecdotal evidence suggesting that firms perceive an increase in environmental disclosure litigation risk after a peer firm is sued for related disclosures. Although we provide mixed evidence around changes in total environmental disclosure in response to peer lawsuits, we offer robust evidence that firms provide more forward-looking (and less historical) environmental disclosures in their conference calls in response to peers’ environmental disclosure lawsuits. Our evidence is consistent with firms providing less verifiable disclosures to minimize the risk of being sued for misrepresenting their environmental information. Data Availability: Data are available from the public sources cited in the text.