reconciliation net income to EBITDA - elimination of NCI
Hello. I came across a "net income-to-ebitda" bridge that showed an item called "elimination of NCI". This step raises two questions to me:
- As this elimination reduces EBITDA, it seems to be a conservative approach which is a positive. However, I would like to understand the (potential) reasoning behind that as I have never come across such an approach before. According to the notes, adj. EBITDA "excludes certain items included in the calculation of net income (loss) that may not be appropriate determinants of long-term operating performance". Does anyone has some more color on that?
- Maybe even more important: How would you calculate the NCI amount to exclude in the reconciliation? The amount used in the reconciliation is different from the NCI amount used in the income statement. In the notes there is no information on that.
I am talking about the annual report for FY20 of a Canadian company called "Northland Power" (WSO doesn't let link it - sorry). The reconciliation is shown on page 29.
Thank you. Cheers.
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