Adjusted EBITDA is a non-GAAP financial measure. EBITDA is defined as net income before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA reflects EBITDA further adjusted for certain items, which may vary from period to period, including (i) changes in the fair value of derivatives embedded within convertible debt, (ii) losses on extinguishment of debt, (iii) gains on liquidation of long-term investments, (iv) losses on investments, (v) equity income or losses on long-term investments, (vi) gains on the sale of investment securities available for sale, (vii) equity income from our non-consolidated real estate business, (viii) gains on sales of townhomes, (ix) the acceleration of interest expenses related to debt conversion, (x) stock-based compensation expenses, (xi) litigation judgment expenses, (xii) litigation settlement charges, (xiii) the Philip Morris brand transaction, (xiv) gains or losses on the sale of assets, and (xv) other net income, as well as other charges not indicative of our core operations. We believe that Adjusted EBITDA is an important measure that supplements discussions and analysis of our results of operations and enhances an understanding of our operating performance. We believe Adjusted EBITDA provides investors and analysts with a useful measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. Management uses Adjusted EBITDA as a measure to review and assess operating performance of its business and management and investors should review both the overall performance (GAAP net income) and the operating performance (Adjusted EBITDA) of our business. While we consider Adjusted EBITDA to be important, it should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP, such as operating income, net income and cash flows from operations. In addition, Adjusted EBITDA is susceptible to varying calculations and our measurement of Adjusted EBITDA may not be comparable to those of other companies. 

Adjusted EBITDA, as presented herein, is not calculated in the same manner as Consolidated EBITDA, as defined under the indenture that governs our senior secured notes. Consolidated EBITDA, not Adjusted EBITDA, will be used to determine compliance with certain covenants contained in the indenture governing the notes and our ability to make certain restricted payments or enter into certain affiliate transactions will be restricted if we cannot meet specified levels of Consolidated EBITDA.  

The following table reconciles net income, calculated and presented in accordance with GAAP, to Adjusted EBITDA for the periods presented: