Few Last Minute Q's

1.) Can anyone give me a difinitive answer on what NOI is (torn between EBIT and EBITDA, leaning towards EBITDA). 2.) Since apparently we can’t use the Durbin-Watson statistic on AR models, how do we test for serial correlation? Simply regress the variance of the error term against prior period error terms? 3.) Net Pension Liability under the new rule is PBO-FV(Plan Assets)? Does this number need discounted back to present, it just seems like this would give you a future value on your balance sheet as opposed to present value. That’d be all, good luck everyone.

  1. Sh!t I’m just assumed we’d get the NOI. Good question 1. That is correct 3. No discounting whatsoever. Just FMV-PBO and boom you get both your BS number and your true economic value.

1 No idea 2. Use 1/n^.5 as the S.E and calc a normal t-test, if significant, you have serial correlation 3. The PBO is discounted already, so no adjustment needed, I think.

Nibs for #2 don’t we just regress the variance of the error term against prior period error terms as Black Swan said?

Regressing the squared residuals on the lagged square residuals is the test for ARCH. Correct by using GLS.

#1 is Gross Income - Operating Expenses

One thing with the NOI that came to mind. If they ask you what the gross multiplier is, you have to take NOI/some rate to make it gross. I forget the name of it. I feel retarded writing this.

Pink, I think they will give us NOI, just curious, its been bugging be, but I did some research and they do appear to be the same EBITDA=NOI. I think NIBS is right for #2, and I think you’re right for #3. So, combined we’re a pretty big deal, you guys are all ready for that telepathy we worked on last week right, you and me especially pink given the apparel. Anyhow, this’ll probably be my last post until the forum opens again. Once again, good luck, and no matter how much you feel yourself beginning to panic, you can all take solace in knowing that somehow, somewhere, Black Swan is curled up in the fetal position crying like a little b*tch. Hahaha, AF REPRESENT!

We can all take solace in that fact that theres probably a 90% chance the guy/girl next to you will be sh*%$ing him/herself worse than any of us are. Good luck BS.

yes, NOI can be thought of as Ebitda.

Good luck everyone is this thread. Blackie, Ozzy, Nib, Sponge Bob.

OI I believe is EBIT. Also called OP, as for NOI, I think it is the OP after debt services and tax, used in income property val.

I am wrong. NOI minus debt service and tax should be ATCF.

That’s right.

thepinkman Wrote: ------------------------------------------------------- > Good luck everyone is this thread. Blackie, Ozzy, > Nib, Sponge Bob. You too, and to everyone else in here.


For no.1. Please look at pg. 577 on CFAI -asset valuation book. if you look at the formuale… NOI is akin to EBITDA… because they deduct tax depreciation afterwards… Traditionally to arrive at operating income… depreciation need but… because this real estate… we use NOI…

NOI = Gross Operating Income - Vacancy - Operating expense for the apartment… calculate taxes on ATCF -> (GOI - Vanacy - Operating exp - depreciation - interest exp)*tax = tax on property ATCF = NOI - tax on property - annual debt payment Remember NPV Real Estate = sum (ATCF/(1+r)^t) + ATER/(1+r) - I PBO is already included the pv value of service cost… why are u taking pv again?

^ Holy crap. This is not what I want to be seeing right now.

yep, this thread was a bad idea, i was happier when i just thought it was EBITDA, those were the good 'ol days…