Lender-adjusted EBITDA

The earnings before interest, taxes, depreciation and amortization (EBITDA) measure a lender uses after applying its own definitions and accepted adjustments. Adjustments may add or subtract amounts; underwriting, covenant testing and pricing can use different measures.

Lender-adjusted EBITDA in round numbers

Hypothetical annual amounts in US$ millions: unadjusted EBITDA is 100; seller-adjusted EBITDA of 120 already includes 20 of add-backs. If the lender accepts 10 of those add-backs, its measure is 120 − 20 + 10 = 110. These amounts use the same earnings period and currency.

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Hypothetical annual EBITDA reconciliation; US$m
MeasureAmount
Unadjusted EBITDA100
Seller add-backs included20
Seller-adjusted EBITDA120
Lender-accepted add-backs10
Lender-adjusted EBITDA120 − 20 + 10 = 110

EBITDA add-backs · Leverage · DSCR · Covenant headroom · EBITDA · Adjusted EBITDA · Normalized EBITDA · Diligence-adjusted EBITDA · All of the glossary