EBITA

Category

Income Statement

Units

Currency

Formula

EBIT + Amortization of Intangible Assets

US-GAAP elements

OperatingIncomeLossAmortizationOfIntangibleAssets

Reference

Non-GAAP measure: Regulation G and Regulation S-K Item 10(e)

Source

Reported in SEC EDGAR filings (US-GAAP XBRL taxonomy)

EBITA, or earnings before interest, taxes, and amortization, is EBIT with amortization of intangible assets added back. It is calculated from figures reported in SEC filings and sits between EBIT and EBITDA: it removes the amortization charge but still deducts depreciation of physical assets.

The measure exists mainly to neutralize acquisitions. When a company buys another business, it records intangible assets such as customer relationships and technology and amortizes them for years afterward. EBITA strips out that charge, so a company that grew by acquisition can be compared with one that grew internally.

EBITA is not a US GAAP line item and has no XBRL element of its own. The usual build starts with EBIT, either operating income tagged OperatingIncomeLoss or net income plus interest and taxes, and adds amortization of intangibles, tagged AmortizationOfIntangibleAssets. Companies that present EBITA in their earnings materials are reporting a non-GAAP measure and must reconcile it to the most comparable GAAP figure under Regulation G and Regulation S-K Item 10(e).

The logic rests on how the accounting treats different intangibles. Internally built brands, customer lists, and software are mostly expensed as incurred and never appear as assets. The same assets acquired in a deal are capitalized and amortized. Goodwill itself is not amortized by public companies, so the add-back usually covers only finite-lived acquired intangibles. Depreciation stays in because it reflects real, recurring spending to replace physical assets.

Watch what the amortization figure contains. Some companies disclose amortization of acquired intangibles separately from amortization of capitalized software or other items, and some combine depreciation and amortization into a single figure, which makes EBITA hard to isolate. EBITA is common in valuing serial acquirers, services firms, and European companies, where it is a frequently cited profit measure. Comparing EBITA with EBIT shows how much of a company's expense base comes from past acquisitions.