How is Operating EBITDA defined for Corcoran?
Corcoran 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 23 — RECEIPTS (FDD pages 75–276)
What This Means (2025 FDD)
According to Corcoran's 2025 Franchise Disclosure Document, Operating EBITDA is defined as net income (or loss) with several adjustments. These adjustments include adding back depreciation and amortization, interest expense (excluding specific relocation services interest), and income taxes.
Additionally, Corcoran adjusts for certain non-core items. These non-core items encompass non-cash stock-based compensation, restructuring charges, impairments, legacy items from the former parent company, and legal contingencies not related to normal operations, such as industry-wide antitrust and class action lawsuits. The definition also accounts for gains or losses from the early extinguishment of debt and 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. Corcoran made these updates to align with similar adjustments and measures disclosed by industry competitors. The FDD states that these changes primarily impact total company Operating EBITDA, with an immaterial impact on segment profitability and no material alteration to trends or comparability across reporting periods. Prior periods have been recast to align with the updated definition for consistency.