armember-membership domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home1/wanrru6iyyto/public_html/wp-includes/functions.php on line 6114ARMember domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home1/wanrru6iyyto/public_html/wp-includes/functions.php on line 6114The last of the leverage ratios isn’t really a pure leverage indicator but augments the <\/span>debt ratio<\/span><\/strong><\/a>. Debt requires the payment of interest and so an indicator of the ability <\/span>to pay this interest is needed. This is the interest coverage ratio. It basically <\/span>identifies how many times earnings can pay the interest required by existing debt. <\/span>The formula consists of a denominator which is the interest paid in the current year\u00a0<\/span>and a numerator of earnings before interest, taxes, depreciation and amortization (EBITDA). The formula is:<\/span><\/span><\/p>\n Interest Coverage Ratio = Earnings Before Interest, Taxes, Deprec. & Amort.<\/u>\u00a0<\/span> For a user of this ratio, the most difficult element is understanding the EBITDA value. This article starts out by examining the earnings aspect and its effect on the ratio. Once EBITDA is understood, it then becomes elementary to understand the fundamentals of <\/span>the interest coverage ratio and how it is applied in small business. Finally, some <\/span>insights to this ratio and the debt ratio are described to tie leverage ratios together.<\/span><\/span><\/p>\n To understand earnings before interest, taxes, depreciation and amortization the reader must first be aware of an income statement’s (profit and loss statement’s) structure. Here is the basic format:<\/span><\/p>\n \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0 NAME OF COMPANY Revenue\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $Z,ZZZ,ZZZ EBITDA represents profit before certain costs of capital. Costs of capital include <\/span>the following:<\/span><\/span><\/p>\n A) Depreciation<\/strong> – Allocation of fixed asset (tangible) acquisition costs based on\u00a0<\/span>predetermined schedules<\/span> In effect, EBITDA is very similar to operational profit as taxes are also excluded\u00a0<\/span>from operational profit<\/span><\/strong><\/a>. Based on this, average readers would then think that EBITDA <\/span>and operational profit are one and the same. However, this is not true. Many smaller businesses do not separate capital costs from expenses and include them in expenses like below:<\/span><\/span><\/p>\n Gross Profit\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $ZZZ,ZZZ Others will include depreciation and amortization in expenses and then interest after\u00a0<\/span>operational profit. The secret to determine EBITDA is identifying the four distinct <\/span>costs of interest, depreciation, amortization and income taxes. Simply add these costs back to net profit to calculate EBITDA.<\/span><\/span><\/p>\n Two important insights to EBITDA are necessary to help you understand this term well.<\/span><\/p>\n First, taxes in the acronym refers to traditional income taxes. A business pays a <\/span>multitude of taxes including:<\/span><\/span><\/p>\n * Revenue Taxes<\/strong> – a local government fee on sales and not net profit Sales taxes are a pass-through trust relationship with the state or local government and therefore not included in the income statement. Only income taxes are included as a part of the EBITDA formula. Therefore, the expense group of taxes and licenses refers to the items above which are a function of EBITDA, i.e. they must be deducted to determine EBITDA. The ‘T’ in the acronym refers to income taxes only.<\/span><\/span><\/p>\n S<\/span><\/span>econdly, some analysts believe EBITDA is also the cash profit before interest and taxes. <\/span>This is because depreciation and amortization are non-cash expenses. Thus, the false assumption that EBITDA equals cash profit to service debt and payables. Cash profit also includes changes in current assets and liabilities. Therefore EBITDA does not equal cash flow from operations. \u00a0 \u00a0 \u00a0 \u00a0 \u00a0<\/span><\/span><\/p>\n For more detailed information and explanations related to EBITDA, please refer to the following:<\/span><\/p>\n EBITDA<\/a> \u00a0<\/span> The primary goal of leverage is using debt to ramp up sales that in turn generate operational profit that can satisfy the debt service requirement and still generate additional net profit. The problem with debt is the responsibility to pay interest. How many times interest is covered determines the viability of debt. In small business it is the banking industry that utilizes this ratio. They often insert terms in their legal documents (loan terms\/note clauses) mandating a minimum coverage ratio for debt.<\/span><\/p>\n As an example, interest coverage ratios for real estate intensive operations are 1.3 to 1\u00a0<\/span>or greater. Here is an example.<\/span><\/span><\/p>\n Stem River Apartments must refinance its mortgage note coming due in one year. <\/span>Negotiations with various banks indicate a minimum interest coverage ratio of 1.38:1 <\/span>to as high as 1.72:1. The institution requiring a 1.72:1 ratio has the lowest interest\u00a0<\/span>rate for its note. The following is Stem River’s interest coverage ratio based on <\/span>the last three years financial performance.<\/span><\/span><\/p>\n \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0 2014<\/u><\/strong>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0 2015<\/strong><\/span>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a02016<\/span><\/strong><\/span> Stem River Apartments will easily qualify for the lower interest rate note offered <\/span>by one of the financial institutions.<\/span>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0<\/span><\/span><\/p>\n In the above example, operational profit just so happens to equal EBITDA. Notice taxes are not included in the financial performance report. This is because most real estate based operations are set up as pass-through tax entities (partnerships, limited liability corporations and in some cases S-Corporations). Thus, taxes are the responsibility of the individual owners and not the entity. As stated in the prior section, users of this formula often have to rearrange financial data to determine EBITDA.<\/span><\/p>\n Now for some side notes related to real estate based entities. Typically, replacement reserves are set asides for regular upgrades to the units or for exterior improvements\/modernization with office\/retail and condominiums. These monies are paid with the mortgage payment and held in trust and paid out when actual improvements are made. In reality, replacement reserve values should be deducted from operational profit to calculate EBITDA. Therefore the interest coverage ratio is modified to equal adjusted EBITDA as follows:<\/span><\/p>\n \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0\u00a02014<\/u><\/strong>\u00a0 \u00a0 \u00a0 \u00a0 \u00a02015<\/u><\/strong>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0<\/strong>2016<\/strong> Another interesting item is amortization in real estate. Often amortization is a function of the financing of the mortgage note from years earlier, i.e. the closing costs. These closing costs were either paid from the note proceeds or actual cash out in the year the note was created. In that respective year, that cash payment was not an actual expense to calculate operating profit; yet the interest coverage ratio is designed to assess the ability to generate cash flow to service the interest component of debt service. \u00a0Therefore, a prudent financial investor would deduct this amortization value as if it were indeed a function of operational profit as equal to EBITDA, i.e. a traditional expense of interest. In the above example, the interest coverage ratio would still exceed 1.72:1 if financing amortization were deducted to determine traditional EBITDA.<\/span><\/p>\n The key to this formula is of course the spread between EBITDA and the interest. The <\/span>greater the spread the higher the ratio. Using the above illustration, imagine EBITDA at $900,000 with no change in interest for 2016, the interest coverage ratio increases to 3.5:1. Also notice that the total interest decreases from year to year.<\/span><\/span><\/p>\n Why? Well, with each mortgage payment principal is paid thus the amount of interest <\/span>decreases the following year due to a smaller principal balance. Even something as <\/span>simple as the interest rate on the note makes a significant impact on the rate. Here <\/span>is an illustration.<\/span><\/span><\/p>\n Using Stem River’s information from above, suppose the interest rate on the current\u00a0<\/span>note is 5.21%. \u00a0The new note will have an interest rate of 4.85% and the note’s\u00a0<\/span>principal is $4,915,000. This means that in 2017, the total interest paid will <\/span>approximate $235,000. Assuming an EBITDA of $654,000 (matching 2016’s amount) the <\/span>forward looking interest coverage ratio will be 2.78:1, well above the current 2.54:1. This is a 9.5% improvement over 2016. A small change in the interest rate generates a significant increase in the ratio and saves Stem River Apartments about $21,000 per year in interest.<\/span><\/span><\/p>\n This is why it is critical to understand this ratio’s meaning. The higher the ratio, <\/span>the more comfort in the ability to service the debt. Basically, as the ratio increases, <\/span>the debt leverage is decreasing. The following is a table indicating interest coverage ratio zones and their respective meanings.<\/span><\/span><\/p>\n
\n\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Interest Paid<\/span><\/p>\nEarnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) \u00a0<\/span><\/strong> \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0<\/span><\/h2>\n
\n<\/strong><\/span><\/span>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Income Statement (Summary Format)
\n<\/span>\u00a0 \u00a0 \u00a0 \u00a0Period Ending ZZ\/ZZ\/ZZZ (Usually One Year)<\/span><\/span><\/span><\/p>\n
\n<\/span>Cost of Sales\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Z,ZZZ,ZZZ
\n<\/u><\/span>Gross Profit\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 ZZZ,ZZZ
\n<\/span>Expenses (Non-Capital Related)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 ZZZ,ZZZ
\n<\/u><\/span>Operational Profit\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0ZZZ,ZZZ
\n<\/span>Capital Costs\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 ZZZ,ZZZ<\/span>
\n<\/span>Profit\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 ZZZ,ZZZ
\n<\/span>Taxes\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0 \u00a0ZZ ZZZ<\/span>
\n<\/span>Net Profit\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$ZZ ZZZ<\/span><\/strong><\/span><\/p>\n
\n B) Amortization<\/strong> – Allocation of intangible<\/u><\/span><\/strong><\/a>\u00a0costs (copyrights<\/span><\/strong><\/a>, trademarks, patents and\u00a0<\/span>legal agreements – goodwill, financial arrangements etc.) over the expected utilization of the asset<\/span><\/span>
\n C) Interest on Debt<\/strong> – long-term debt interest (does not include principal portion of debt service)<\/span>
\n D) Replacement Reserves<\/span><\/strong><\/a> – used in the real estate rental industry\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/em><\/strong><\/span><\/p>\n
\n<\/span>Expenses:
\n<\/span>– Management \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $ZZZ,ZZZ
\n<\/span>– Facilities \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 ZZ,ZZZ
\n<\/span>– Insurance \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0ZZ,ZZZ
\n<\/span>– Office Operations \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 ZZ,ZZZ
\n<\/span>– Taxes & Licenses \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 ZZ,ZZZ
\n<\/span>– Marketing\/Advertising \u00a0 ZZ,ZZZ
\n<\/span>– Other \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Z,ZZZ
\n<\/span>– Capital Costs \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0\u00a0ZZ,ZZZ<\/span>
\n<\/span>Sub-Total Expenses\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0 ZZZ,ZZZ<\/span>
\n<\/span>Operational (sometimes just) Profit\u00a0 \u00a0 ZZZ,ZZZ
\n<\/span>Taxes\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0 \u00a0ZZ,ZZZ<\/span>
\n<\/span>Net Profit\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$ZZ ZZZ<\/span><\/strong><\/span><\/p>\n
\n<\/span>* Business Licenses<\/strong> – a legal compliance fee<\/span>\u00a0<\/span>
\n<\/span>* State Corporation Renewal<\/strong> – corporate name annual renewal fee
\n<\/span>* Professional Licenses Renewal
\n<\/span>* Excise, Tariffs, and Transportation Tags
\n<\/span>* Consumption, Consumer, Recycling, and other state fees
\n<\/span>* Real Estate Taxes
\n<\/span>* Property Taxes
\n<\/span>* Franchise Fee<\/strong> – an annual Secretary of State or Department of Revenue<\/span><\/span><\/p>\n
\n<\/span><\/strong><\/span>EBITDA – Buyer Beware<\/a><\/span><\/span><\/strong>\u00a0<\/span>
\nEBITDA – Drawbacks<\/span><\/strong><\/a><\/span><\/span><\/p>\nFundamentals of the Interest Coverage Ratio<\/span><\/strong><\/h2>\n
\n Net Rents\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$2,281,476 \u00a0 \u00a0 $2,307,592 \u00a0 \u00a0 $2,316,409<\/span>
\n Expenses B\/F Capital Costs \u00a0 \u00a0 \u00a01,619,814<\/u>\u00a0 \u00a0 \u00a0 \u00a01,616,853<\/u>\u00a0 \u00a0 \u00a0 \u00a0 1,582,311
\n<\/u>Operational Profit \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $661,662\u00a0 \u00a0 \u00a0 \u00a0$690,739\u00a0 \u00a0 \u00a0 \u00a0 \u00a0$734,098<\/span>
\n Capital Costs:<\/span>
\n – Interest \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 279,841 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0271,306\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 256,811<\/span>
\n – Depreciation \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0316,202 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0313,863\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 309,757<\/span>
\n – Replacement Reserves \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a082,616 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a091,802\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 79,693<\/span>
\n – Amortization \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0 \u00a023,716<\/span>\u00a0\u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0 23,716\u00a0<\/span> \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 23,716<\/span><\/span>
\n Profit \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 ($40,713) \u00a0 \u00a0 \u00a0 \u00a0 ($9,948)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0$64,121<\/span>
\n Interest Coverage Ratio:<\/strong><\/span>
\n EBITDA \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $661,662 \u00a0 \u00a0 \u00a0 \u00a0$690,739\u00a0 \u00a0 \u00a0 \u00a0 $734,098<\/span>
\n Interest Expense \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $279,841 \u00a0 \u00a0 \u00a0 \u00a0$271,306\u00a0 \u00a0 \u00a0 \u00a0 $256,811<\/span>
\n Ratio \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a02.36 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a02.54\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a02.86<\/span><\/p>\n
\n<\/u>Operational Profit \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $661,662 \u00a0 $690,739 \u00a0 $734,098<\/span>
\nLess: Replacement Reserves \u00a0 \u00a082,616\u00a0 \u00a0 \u00a0 \u00a091,802<\/u>\u00a0 \u00a0 \u00a0 \u00a079,693
\n<\/u>EBITDA (Adjusted) \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $579,046 \u00a0 $598,837 \u00a0 $654,405<\/span>
\nInterest \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0279,841 \u00a0 \u00a0 271,306 \u00a0 \u00a0 256,811<\/span>
\nInterest Coverage Ratio \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 2.07:1\u00a0 \u00a0 \u00a0 \u00a0 2.21:1 \u00a0 \u00a0 \u00a0 \u00a02.54:1<\/span><\/p>\n