How is Operating EBITDA defined for Better Homes And Gardens Real Estate?
Better_Homes_And_Gardens_Real_Estate Franchise · 2025 FDDAnswer from 2025 FDD Document
Operating EBITDA is defined as net income (loss) adjusted for depreciation and amortization, interest expense, net (excluding relocation services interest for securitization assets and securitization obligations), income taxes, and certain noncore items. Non-core items include non-cash stock-based compensation, restructuring charges, impairments, former parent legacy items, legal contingencies unrelated to normal operations which currently includes industry-wide antitrust lawsuits and class action lawsuits, gains or losses on the early extinguishment of debt, and gains or losses on discontinued operations or the sale of businesses, investments, or other assets. Effective December 31, 2024, the definition of Operating EBITDA was updated to include adjustments for non-cash stock-based compensation and legal contingencies unrelated to normal operations which currently includes industry-wide antitrust lawsuits and class action lawsuits to conform with similar adjustments and measures disclosed by industry competitors. These updates primarily impact total company Operating
EBITDA. For consistency and to align with how the CODM evaluates performance, prior periods have been recast to align with the updated definition. The changes have an immaterial impact on segment profitability and do not materially alter trends or comparability across reporting periods.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 75–76)
What This Means (2025 FDD)
According to Better Homes And Gardens Real Estate's 2025 Franchise Disclosure Document, Operating EBITDA is defined as net income (or loss) after adjustments for several financial items. These adjustments include depreciation and amortization, which account for the reduction in value of assets over time, and net interest expense, excluding specific relocation services interest related to securitization assets and obligations. Income taxes are also factored out of the equation.
In addition to these standard adjustments, the definition of Operating EBITDA for Better Homes And Gardens Real Estate also excludes certain non-core items. These non-core items encompass non-cash stock-based compensation, restructuring charges, and impairment costs, which reflect write-downs of asset values. It also excludes former parent legacy items, legal contingencies unrelated to normal operations (including industry-wide antitrust and class action lawsuits), gains or losses from the early extinguishment of debt, and gains or losses from discontinued operations or the sale of businesses, investments, or other assets.
The definition of Operating EBITDA was updated effective December 31, 2024, to include adjustments for non-cash stock-based compensation and legal contingencies unrelated to normal operations, aligning with industry competitors' practices. These updates primarily affect the total company Operating EBITDA. For consistency, prior periods have been adjusted to align with the updated definition, though these changes have an immaterial impact on segment profitability and do not materially alter trends or comparability across reporting periods. This metric is used by the Chief Operating Decision Maker (CODM) to evaluate performance.