American Home Shield 2015 Annual Report Download - page 48

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30
expense; restructuring charges; gain on sale of Merry Maids branches; management and consulting fees; consulting
agreement termination fees; and other non-operating expenses.
We believe Adjusted EBITDA facilitates company-to-company operating performance comparisons by excluding potential
differences caused by variations in capital structures (affecting net interest income and expense), taxation, the age and book
depreciation of facilities and equipment (affecting relative depreciation expense), restructuring initiatives, consulting
agreements and equity-based, long-term incentive plans, which may vary for different companies for reasons unrelated to
operating performance.
Adjusted EBITDA is not necessarily comparable to other similarly titled financial measures of other companies due to the
potential inconsistencies in the methods of calculation.
Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for
analyzing our results as reported under GAAP. Some of these limitations are:
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
Adjusted EBITDA does not reflect our interest expense, or the cash requirements necessary to service interest or
principal payments on our debt;
Adjusted EBITDA does not reflect our tax expense or the cash requirements to pay our taxes;
Adjusted EBITDA does not reflect historical capital expenditures or future requirements for capital expenditures or
contractual commitments;
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have
to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and
Other companies in our industries may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative
measure.
46 2015 Annual Report