Why did Budget revise its definition of Adjusted EBITDA?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
; non-operational charges related to shareholder activits activity, which includes third-party advisory, legal and other professional fees; COVID-19 charges, net; cloud computing costs; other (income) expense, net; severe weather-related damages in excess of $5 million, net of insurance proceeds; and income taxes.
We have revised our definition of Adjusted EBITDA to exclude severe weather-related damages in excess of $5 million, net of insurance proceeds. We did not revise prior years' Adjusted EBITDA amounts because there were no other charges similar in nature to these. We believe Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our operating businesses and in comparing our results from period to period. We also believe that Adjusted EBITDA is useful to investors because it allows them to a
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the company revised its definition of Adjusted EBITDA to exclude severe weather-related damages exceeding $5 million, net of insurance proceeds. This change reflects Budget's decision to adjust its financial metric to provide a more accurate representation of its operating performance by excluding the impact of significant, but potentially irregular, weather-related events.
Budget did not revise prior years' Adjusted EBITDA amounts because there were no other charges similar in nature to these severe weather-related damages. This suggests that the impact of such damages was not significant enough in previous years to warrant a restatement of the financial figures. By excluding these damages, Budget aims to provide a clearer picture of its core operational profitability.
Budget believes that Adjusted EBITDA is a useful measure for evaluating the performance of its operating businesses and for comparing results from period to period. It also believes that Adjusted EBITDA is useful to investors because it allows them to assess Budget's results of operations and financial condition on the same basis that management uses internally. However, Budget clarifies that Adjusted EBITDA is a non-GAAP measure and should not be considered a substitute for net income or other income statement data prepared in accordance with U.S. GAAP.