Radio Shack 2011 Annual Report Download - page 26

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18
(1) Total capitalization is defined as total debt plus total stockholders' equity.
(2) This ratio is calculated by dividing our cost of products sold by our average inventory balance. For comparative purposes, we have included the cost of
products sold by and the inventory balances of our discontinued operations in this ratio for all periods presented.
(3)
Adjusted EBITDA from continuing operations (“Adjusted EBITDA”),
a non-GAAP financial measure, is defined as earnings from continuing operations
before interest, taxes, depreciation, and amortization. Our calculation of Adjusted EBITDA is also adjusted for other income or loss. The comparable
financial measure to Adjusted EBITDA under GAAP is income from continuing operations. Adjusted EBITDA is used by management to evaluate the
operating performance of our business for comparable periods. Adjusted EBITDA should not be used by investors or others as the sole basis for
formulating investment decisions, as it excludes a number of important items. We compensate for this limitation by using GAAP financial measures as well
in managing our business. In the view of management, Adjusted EBITDA is an important indicator of operating performance because Adjusted EBITDA
excludes the effects of financing and investing activities by eliminating the effects of interest and depreciation costs.
(4) Comparable store sales include the sales of U.S. and Mexico RadioShack company-operated stores and kiosks with more than 12 full months of recorded
sales. Following their closure as Sprint-branded kiosks in August 2009, certain former Sprint-branded kiosk locations became multiple wireless carrier
RadioShack-branded locations. At December 31, 2009, we managed and reported 111 of these locations as extensions of existing RadioShack company-
operated stores located in the same shopping malls. For purposes of calculating our comparable store sales, we include sales from these locations for
periods after they became extensions of existing RadioShack company-operated stores, but we do not include sales from these locations for periods while
they were operated as Sprint-branded kiosks.
The following table is a reconciliation of adjusted EBITDA from continuing operations to income from continuing operations.
Year Ended December 31,
(In millions) 2011 2010 2009 2008 2007
Reconciliation of adjusted EBITDA from continuing
operations to income from continuing operations
Adjusted EBIT
DA from continuing operations $ 237.8
$ 433.6
$ 445.8
$ 405.3
$ 474.2
Interest expense, net of interest income (43.7)
(39.3)
(39.3)
(20.3)
(16.2)
Income tax expense (40.2)
(120.2)
(118.1)
(105.2)
(123.8)
Depreciation and amortization (82.7)
(83.4)
(90.3)
(94.2)
(107.8)
Other (loss) income (4.1)
--
(1.6)
(2.4)
0.9
Income from continuing operations $ 67.1
$ 190.7
$ 196.5
$ 183.2
$ 227.3