Here?s Buffett from his 2001 annual letter; ?Bad terminology is the enemy of good thinking. When companies or investment professionals use terms such as ?EBITDA? and ?pro forma,? they want you to unthinkingly accept concepts that are dangerously flawed. (In golf, my score is frequently below par on a pro forma basis: I have firm plans to ?restructure? my putting stroke and therefore only count the swings I take before reaching the green.)?
and this; ?After September 11th, training for commercial airlines fell, and today it remains depressed. However, training for business and general aviation, our main activity, is at near-normal levels and should continue to grow. In 2002, we expect to spend $162 million for 27 simulators, a sum far in excess of our annual depreciation charge of $95 million. Those who believe that EBITDA is in any way equivalent to true earnings are welcome to pick up the tab.?
and this from his 2000 letter to shareholders; ?References to EBITDA make us shudder ? does management think the tooth fairy pays for capital expenditures? We?re very suspicious of accounting methodology that is vague or unclear, since too often that means management wishes to hide something.?
