Adjusted EBITDA

We'll presume you know what EBITDA is. If not, watch the James Cameron directed video on our site.

As you now know after having watched (thank you for the view, please click on the ads), EBITDA itself is not a GAAP term. That is, it does not conform to any formal structured set of accounting rules, and that means that EBITDA can be presented in a number of ways. Or, said another way, the EBITDA number itself gives accountants a license to lie, cheat, and deceive when presenting the actual number.

Most of this magic happens in their having flexibility to define the rate at which elements on the EBITDA calculation for amortization and depreciation are ratably taken into consideration. That is, the computer system might be depreciated over three years or thirty. Should we capitalize our customer marketing expenses, or just expense them?

So EBITDA itself is already a squishy accounting metric. But then if we adjust EBITDA, the squishiness becomes warm Jello. All kinds of excuses derive from companies apologizing for bad operating performance with "adjusted EBITDA numbers." That lawsuit from the Singing Lawn Mower buyer was a one-time thing. So we're backing the costs of defending 2020 The Defeeting as a one-time charge. Never happen again. Really. So we're adjusting the EBITDA number to ignore those costs.