EBITDA Minus CapEx

Category

Income Statement

Units

Currency

Formula

EBITDA − Capital Expenditures

US-GAAP elements

DepreciationDepletionAndAmortizationPaymentsToAcquirePropertyPlantAndEquipment

Reference

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

Source

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

EBITDA minus CapEx is EBITDA less the capital expenditures a company made during the same period. It is calculated from figures reported in SEC filings and approximates the operating earnings left over after the business pays to maintain and expand its physical assets.

It corrects EBITDA's best-known blind spot. EBITDA adds back depreciation as if long-lived assets were free, while this measure charges the business for the cash it actually spent on property and equipment in the period.

This is a non-GAAP measure with no XBRL element of its own. EBITDA is built from reported figures, as EBIT plus depreciation and amortization, the latter usually tagged DepreciationDepletionAndAmortization on the cash flow statement. Capital expenditures come from the investing section of the cash flow statement, most often tagged PaymentsToAcquirePropertyPlantAndEquipment. Because capital expenditures are reported as a cash outflow, the calculation subtracts their absolute value. A company presenting this figure publicly would need to reconcile it to GAAP under Regulation G and Regulation S-K Item 10(e).

The result mixes an accrual measure with a cash measure. EBITDA reflects revenue and expenses as earned and incurred, while capital expenditures reflect cash paid. The measure still leaves out working capital changes, cash taxes, and interest, so it is not the same as free cash flow. Capital expenditures are also lumpy. A single year of heavy building can push the figure sharply lower even when the long-term economics are sound, so multi-year totals are often more informative than one period.

Credit analysts use it most, especially in the ratio of EBITDA minus CapEx to interest expense, which tests whether a borrower can cover interest after funding its asset base. Comparing it with plain EBITDA shows how capital-intensive a business is. For software or services companies the two are close, while for telecom, utilities, and heavy industry the gap can be very large.