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Sunday, February 22, 2009

Neat trick

A sad story about Philadelphia's newspapers going into bankruptcy at least produces one chuckle:

One said that last year, they had earnings before income, taxes, depreciation and amortization of $36 million.
"Earnings before income"? They must have had Bernie Madoff running them.

Comments (11)

Modern math.

The raw power of the comma.


These would be the net earnings after acounting for tax benefits like depreciation or interest earned. They could easily have had an operating loss surpassed by tax benefits or a large reserve fund earning interest.

Sorry I meant:

"earnings before accounting for tax benefits like depreciation or interest earned."

Allan is right, the power of the comma.

Clearly the journalist reporting on the problems with print journalism needs to do a bit of fact checking:

EBITDA = Earnings before interest, taxes, depreciation and amortization

Earnings before income is out of the Portland playbook where they had a

$30 million surplus before billions in growing debt and $600 million in deferred maintenance.

For pete's sake. He just meant "income tax" and a comma fell into the phrase somehow. It reminds me of a visit a few years ago to the elegant retreat of the German Kaisers in Potsdam, which is called "Sans Souci", loosely translated as "without worry". Turns out there's a stray bit of punctuation between the two words of the chateau's big sign, which -- in effect -- makes the name more like "Without, worry". I think I know how they felt.

"For pete's sake. He just meant "income tax""

No, he didn't. He tried to expand the acronym EBITDA and failed on the I.

and Amortization

It's the Generally Accepted Accounting Principles (another acronym - GAAP) way of showing earnings without fluffing the books.

people do realize that it's just a misplaced comma, right?

No, he probably meant EBITDA, in which the "I" is "interest," not "income."

Again, this is out of Portland's PDC playbook: "the cost of the project is _______, but we don't include the debt service cost, nor the administration cost, the pre-design, architectural engineering costs.

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