Sunbeam 2005 Annual Report Download - page 15

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Selected Financial Data (cont’d)
(h) EBITDA, a non-GAAP financial measure, is presented in this Form 10-K because the Company’s credit
facility and senior subordinated notes contain financial and other covenants which are based on or refer to
the Company’s EBITDA. In this regard, GAAP refers to generally accepted accounting principles in the
United States. Additionally, EBITDA is a basis upon which our management assesses financial
performance and we believe it is frequently used by securities analysts, investors and other interested
parties in measuring the operating performance and creditworthiness of companies with comparable market
capitalization to the Company, many of which present EBITDA when reporting their results. Furthermore,
EBITDA is one of the factors used to determine the total amount of bonuses available to be awarded to
executive officers and other employees. EBITDA is widely used by the Company to evaluate potential
acquisition candidates. While EBITDA is frequently used as a measure of operations and the ability to
meet debt service requirements, it is not necessarily comparable to other similarly titled captions of other
companies due to potential inconsistencies in the method of calculation. Because of these limitations,
EBITDA should not be considered a primary measure of the Company’s performance and should be
reviewed in conjunction with, and not as substitute for, financial measurements prepared in accordance
with GAAP that are presented in this Form 10-K. A reconciliation of the calculation of EBITDA, is
presented below:
Reconciliation of non-GAAP Measure:
For the Years Ended December 31,
2005 2004 2003 2002 2001
(in millions)
Net income (loss) ............................ $ 60.7 $ 42.4 $31.8 $36.3 $(85.4)
Income tax provision (benefit) ................. 35.0 26.0 20.5 16.2 (40.5)
Interest expense, net ......................... 84.3 27.6 19.2 12.6 11.8
Depreciation and amortization ................. 57.6 19.2 15.0 10.0 18.8
EBITDA (loss) ............................. $237.6 $115.2 $86.5 $75.1 $(95.3)
(i) For the year ended December 31, 2002, cash flows from operations included $38.6 million of income tax
refunds resulting primarily from the 2001 loss on divestiture of assets.
(j) Working capital is defined as current assets (including cash and cash equivalents) less current liabilities.
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