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Key takeaways
- This definition uses R for rent; read the actual presentation’s definition.
- An adjusted or segment measure may exclude additional costs.
- Restore the relevant property cost before evaluating operating cash needs.
Read the full earnings label
Begin with EBITDA and specify the rent amount added back. A further-adjusted figure needs a list of its other changes. SEC guidance emphasizes clear labels; it does not supply one universal formula for every issuer’s EBITDAR presentation. (Source: SEC non-GAAP interpretations)
Pennant’s August 2026 release specifically describes Consolidated Adjusted EBITDAR as a valuation measure that excludes recurring rent and does not show lease cash needs. Its segment measure also has a separate definition. Keep those labels distinct when reading that report. (Source: Pennant reconciliation footnotes and definitions)
Why it matters in a senior care sale
An operating buyer needs earnings after the property costs it will bear. Review the OpCo/PropCo guide and earnings comparison before applying a valuation factor. A change from leasing to owning also needs a consistent view of property funding and costs.
A fictional rent example
Assume $220,000 EBITDA after $180,000 rent. Adding that rent produces $400,000 EBITDAR. If the operating plan instead assumes $210,000 rent, its after-rent earnings become $190,000. All figures are invented; the proposed rent is not a market quote.
| Fictional calculation | Result |
|---|---|
| $220,000 EBITDA + $180,000 rent | $400,000 EBITDAR |
| $400,000 EBITDAR - $210,000 assumed rent | $190,000 after rent |
| $190,000 - $50,000 separate capital need | $140,000 before remaining cash uses |
The last subtotal still excludes debt service, taxes, working-capital changes and other cash uses. It is not cash available to distribute. The coverage-ratio definition explains why excluded costs matter when using a ratio.
Apply it to a complete operating plan
Trace rent and adjustments to the financial records, then use the platform guide to include local and central costs. Keep the definition, source period and actual obligations beside each earnings figure.
Before combining a business figure with property value, read what each conclusion includes. The whole-assets reconciliation checks property and equipment already inside an invented total. It then separates a surplus parcel and debt from that shared asset scope.
Frequently asked questions
What does the R in EBITDAR mean?
This page uses R for rent. Read the definition in the actual report because an issuer’s adjusted or segment measure can remove other items as well. A familiar acronym does not establish that two presentations use identical calculations.
Is EBITDAR cash the owner can take out?
No. Rent and other cash needs remain relevant. A before-rent measure cannot establish cash available after lease payments, debt service, taxes, capital spending or collection delays. Use a separate cash forecast based on the actual obligations.
Does adding back rent remove the lease?
No. It changes the analytical measure, not the contract. In the example, $400,000 before rent becomes $190,000 after an assumed $210,000 replacement rent. The lease terms, entity responsible and costs need separate review.
Can EBITDAR determine the purchase price by itself?
No. A price analysis needs compatible transaction evidence, asset scope and expense definitions. Keep the property and operating business consistent, including the rent assumption. A before-rent amount is not a property appraisal, quoted market multiple or financing approval.
Sources
Sources are dated to distinguish current guidance from earlier publications. They support the identified facts; the transaction questions and examples are educational analysis.
- SEC: non-GAAP financial measures interpretations (2022). Retrieved September 6, 2026.
- Pennant: second quarter 2026 results and reconciliations (August 5, 2026; quarter ended June 30, 2026). Retrieved September 7, 2026.
- Brookdale: agreement to acquire 17 leased communities (August 5, 2026). Retrieved September 7, 2026.