Economic Profit definition

Economic Profit for a business means operating income after tax (assuming an effective tax rate of 35%), less a capital charge of 10% on the amount of capital invested in the business. For purposes of the PSUs, “operating income” excludes certain items as determined by the Compensation Committee, such as restructuring charges, asset write-downs, impairments and financial impacts of accounting, tax and regulatory changes, etc.

Economic Profit means Economic Profit as defined in Section 1(b) of Article II.

Economic Profit or "EP" means the NOPAT that remains after subtracting the Capital Charge, expressed as follows:

Examples of Economic Profit in a sentence

• The Bonus range shall be $24,000 to $36,000 per fiscal year, and shall be based upon Parent Company’s Economic Profit Per Share as defined and described below.

• The Bonus range shall be $20,000 to $30,000 per fiscal year, and shall be based upon Parent Company’s Economic Profit Per Share as defined and described below.

• The Bonus range shall be $40,000 to $60,000 per fiscal year, and shall be based upon Parent Company’s Economic Profit Per Share as defined and described below.

• Subject to the satisfaction of each of the three Conditions and any requirements of applicable law, at the end of each Fiscal Quarter (each, a “ Quarterly Determination Date”) EPA Holdings will be entitled to an amount (the “EPA”), which shall be determined for each EPA Portfolio equal to 20% of the Net Economic Profit for such EPA Portfolio for the Measuring Period ending on the Quarterly Determination Date (the “EPA Amount”).

• The payment of any EPA to EPA Holdings in accordance with this Annex A will be subject to each of the following three conditions: (1) Condition One: Cumulative Net Economic Profit for such EPA Portfolio as of the Quarterly Determination Date is positive.

More Definitions of Economic Profit

Economic Profit means net income of the Company less the Company’s cost of capital. Economic Profit shall be calculated under this Plan in the same manner in which it is calculated for purposes of the Company’s Profit Sharing Incentive Bonus Plan.

Economic Profit means Adjusted EBITDA minus Cost of Debt and Cost of Equity.

Economic Profit means Net Operating Profit After Tax (NOPAT) for a given Performance Period less Capital Charges. Total Company or divisional NOPAT shall mean Earnings plus interest on Lease Investment less income taxes. Capital Charges means the Company’s or a division’s Capital Balances multiplied by the Capital Charge Rate. Divisional Capital Balances include certain division specific assets and liabilities, the present value of operating leases, and also may include an allocation for shared assets and shared liabilities. Total Company Capital Balances may include an aggregation of divisional capital balances in addition to certain shared assets and liabilities and the present value of operating leases.

Economic Profit means, for a Performance Period, the Net Operating Profit After Tax that remains after subtracting the Capital Charge for such Performance Period. Economic Profit may be expressed as follows: Economic Profit = Net Operating Profit After Tax - Capital Charge. Economic Profit may be either positive or negative.

Economic Profit means, with respect to the Powertrain Segment of the Company, EBIT of the Powertrain Segment less the Capital Charge. Economic Profit shall be calculated quarterly during the Performance Period.

Economic Profit means a measure of the after-tax operating profit of the Company less a charge for the cost of all debt and equity capital of the Company.

Economic Profit means, on the basis of the Borrower’s consolidated accounts :