Ebitda

Confusion regarding ebitda

I was looking at the income statement of Inmarsat as I'm thinking of buying a few shares in this company. One thing that confuses me about the income statement is the 2011 ebitda figure of 158.16 with the the operating profit being 300.17.

Compare this to the ebitda 2010 figure of 445.23 with an operating profit 294.18.

How come the 2011 ebitda figure has dropped so much but the operating figures of 2010 - 2011 are pretty much the same?

I've seen this on a few reports but can't fathom it out.

I don't see where your getting the numbers for 2011 from...EBITDA $854, Operating profit $466. Regardless, the only case in which operating profit would be above EBITDA would be non-recurring gains, perhaps from sale of property or something. However, the case here is a large impairment charge in 2011 which means that operating profit is lower than EBITDA. However, most people choose not to include non-recurring items in operating profit, as the company has done on page 1 of their Annual Report by taking operating profit before impairment.

Hi

Thanks for your reply.

I'm getting the figures from the website morningstar

http://tools.morningstar.co.uk/uk/stockreport/default.aspx?tab=10&vw=fs&SecurityToken=0P00007OGS]3]0]E0WWE$$ALL&Id=0P00007OGS&ClientFund=0&CurrencyId=G BP


The figures you quoted seem more understandable.

http://annualreport.inmarsat.com/dow...Statements.pdf

Taxable profit differs from net profi t as reported in the Income Statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

F*ck knows what they've been buying - I don't do US tax

@CR6196 - I though assets at first but check the cash flows...

follow the cashflow statement ......cash is king............everything else can be rigged

and come to think of it cash can be as well....DAMN !


N

Right, well they are wrong. Always double-check at least one year of figures with the annual report and another source (ADVFN are alright). Just to be clear though, I belive operating profit is a non-standard, non-GAAP measure so it means whatever someone says it means (I define it as after-tax and ex-interest expense, for example). EBITDA is clearly defined. When these problems occur it is almost always due to non-reccuring charges which are typically taken after D&A but before tax. They are sometimes taken before or after interest expense and, more rarely, after net profit. Most of the time though it is a difference in how non-recurring stuff is interpreted.