Five More Public Companies Who Need to Learn How to Properly Calculate EBITDA under SEC Rules
by ilene - September 12th, 2010 4:57 pm
Sam Antar makes a request to CFOs, Audit Committees, and auditors of public companies’ financial reports: study the SEC’s rules governing the calculation of non-GAAP measures such as EBITDA (earnings before interest, taxes, depreciation and amortization), and follow them. Correct the mistakes before the reports get filed so Sam doesn’t have to write an article and I don’t have to post it.
For example, Penn National Gaming (PENN) erroneously reported EBITDA as earnings before interest, taxes, depreciation, amortization AND charges for stock compensation, impairment losses, disposal of assets, losses from unconsolidated affiliates and the Empress Casino Hotel fire--that would be an "Adjusted EBITDA" or in PENN’s case, EBITDASCILDALUAECHFIRE.
To learn how to read a financial report and discover if the company you’ve invested in is calculating EBITDA properly or inflating this number, read Sam’s article. – Ilene
Five More Public Companies Who Need to Learn How to Properly Calculate EBITDA under SEC Rules
Courtesy of Sam Antar
It’s pathetic that so many public companies miscalculate EBITDA (earnings before interest, taxes, depreciation, and amortization) and violate Regulation G governing the calculation of non-GAAP measures such as EBITDA. It seems that too many CFOs, Audit Committees, and auditors don’t take the time to thoroughly review compliance with all appropriate SEC financial reporting rules.
Starting in 2007, I reported improper EBITDA calculations by Overstock.com (NASDAQ: OSTK). After a brutal yearlong public battle, Overstock.com’s embittered CEO Patrick Byrne finally changed his company’s EBITDA calculation to comply with Regulation G. For additional details, please read Lee Webb’s Stockwatch article and Richard Sauer’s book.
Last July, I reported apparently erroneous EBITDA calculations by Penson Worldwide (NASDAQ: PNSN) and Comtech Telecommunications (NASDAQ: CMTL).
In this blog post, I will report erroneous EBITDA calculations by five more public companies: A. H. Belo Corporation (NYSE: AHC), FirstService Corporation (NASDAQ: FSRV), Animal Health International, Inc. (NASDAQ: AHII), Schawk Inc. (NYSE: SGK), and Penn National Gaming Inc. (NASDAQ: PENN).
First, let’s review how EBITDA supposed to be calculated
According to the SEC Compliance & Disclosure Interpretations, EBITDA is defined as under Regulation G as net income (not operating income) before interest,…
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Why The Dollar May Not Be Doomed
by ilene - September 25th, 2009 1:13 am
Why The Dollar May Not Be Doomed
Courtesy of Charles Hugh Smith, Of Two Minds
dollars
It seems a given now that the U.S. dollar is doomed to either slow depreciation or devaluation. Perhaps--but the consensus seems too easy. Yes, money supply and liquidity have exploded as the Fed and Treasury fight deflation, and yes, history suggests expanding the money supply debases the currency.
That the dollar has been debased is clear enough if we measure the dollar’s value in gold. Priced in gold, the dollar has lost over 2/3 of its value in a mere decade. Courtesy of contributor Harun I., here is a chart of gold:
Where it took less than $300 to buy an ounce of gold in 2001, it now costs about $1,000. Thus the dollar has lost 70% of its purchasing power when priced in gold.
Correspondent Jim S. observed that this depreciation has been a trend for the entire 20th century:
At the barbershop, the barber asked me if the dollar was at risk of failing. The dollar is not at risk of being wiped out, IT ALREADY HAS BEEN WIPED OUT, and the world is moving on. From 1789 to 1912, the dollar appreciated a full 11%. From 1912 to 2001, it has lost 95% of its value under the fractional reserve banking system of the Fed Reserve, massively overleveraged further since the inventive application of credit derivatives since the ‘90s.
In 2001, a dollar index of $1.2 (as charted by the Dollar Index) existed and now it is at about .76. This recent drop results in a dollar loss greater than 95% from the 1912 value. The dollar HAS been destroyed in the proper historical perspective!
A world-wide move underway, recognizing that the dollar is now unsustainable as a reserve currency, to a new form of reserve currency/currencies, will take some time, and, our dollar will remain as the reserve currency for a while as something new emerges. Regional currencies may evolve in the meantime: Yuan? AMERO? EURO? A worldwide, single, unified currency is too utopian for applicability.
Regional currencies have yet to be proved sustainable either. We are in limbo with a sinking dollar. Geopolitical instability of increasing scope, including at least cultural and resource wars, are in the offing before anything gets settled. Remember the ‘100 years war’?
Indeed, debased currencies and the evaporation of…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site
