Hey chaps,
So, when looking an companies which have D&A of assets which include D&A in COGS and D&A of non-operational assets in opex how are you looking at EBITDA?
I've seen both or just one added back, interested to see how others are looking at it....
For reference, pure leasing companies (e.g., TEU leasing) don't have COGS, they just have opex.
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Not sure what exactly is being asked, but most leasing companies capitalize their assets on the balance sheet and depreciate over the life of the asset - that's probably why there are minimal COGS.
When I've looked at rental car companies like Hertz and Avis, I only add back D&A of non-operating assets. I don't add back fleet depreciation because that is a proxy of replacement cost for the fleet taking into account its useful life / residual level, and a cost of running the operating assets that the company has very little flex on.
This is how I look at it as well.
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