Data Dictionary: Detailed Net Income to NOPAT Reconciliation

This point-in-time backtest dataset provides a more detailed and discrete classification of income statement adjustments than the Net Income to NOPAT Reconciliation data set. These adjustments reconcile reported net income with our NOPAT (Net Operating Profit After Tax). This dataset includes all of the adjustments featured in the HBS & MIT Sloan paper "Core Earnings: New Data and Evidence" and others. The authors plan to publish their findings on the incremental alpha generation of these other adjustments in a subsequent paper.


We deliver the real-time version of this dataset through our API in the Detailed Net Income to NOPAT Reconciliation endpoint.


Backtest Dataset Sample & General Information

Download a sample of the backtest data for this dictionary.


This documentation details the common fields in a backtest dataset file.

HBS & MIT Sloan Data

We added "HBS & MIT Sloan Data" to the beginning of the descriptions for the data points we believe are used to derive "Total Adjustments" in the HBS & MIT Sloan paper, "Core Earnings: New Data and Evidence". To limit your view to those datapoints, type "HBS" into the Datapoint Search field.

Datapoints

Name
Description
Datapoint
GAAP Net Income
GAAP net income.
INCOME_NET
+ Total Net Non-Operating Expense Hidden in Operating Earnings
Total Net Non-Operating Expenses Hidden in Operating Earnings are the net of losses and gains that do not appear directly on the income statement. These items are bundled inside other line items that appear on the income statement. Hidden items are found only in the Management Discussion & Analysis (MD&A) or in the footnotes to the financial statements.
EXPENSES_PRE_TAX_HIDDEN_TOTAL
+ Total Hidden Restructuring
HBS & MIT Sloan Data. Hidden Total Restructuring Expenses, net are the net of non-operating expenses related to the reorganization of a business that does not appear directly on the income statement and is hidden in operating earnings.
HIDDEN_NOPAT_ADJUSTMENT_ALL_RESTRUCTURING
+ Hidden Foreign Currency Expense
HBS & MIT Sloan Data. Hidden Foreign Currency Expenses, net are the net of non-operating expenses related to the changes in the value of foreign currency that does not appear directly on the income statement and is hidden in operating earnings.
HIDDEN_NOPAT_ADJUSTMENT_FOREIGN_CURRENCY_PRE_TAX_TOTAL
+ Hidden Other Real Estate Owned Expense
HBS & MIT Sloan Data. Hidden Other Real Estate Owned Expenses, net are the net of non-operating expenses associated with foreclosed assets owned or controlled by a bank. This expense does not appear directly on the income statement and is hidden in operating earnings.
HIDDEN_NOPAT_ADJUSTMENT_OREO_PRE_TAX_TOTAL
+ Hidden Acquisition and Merger Expense
HBS & MIT Sloan Data. Hidden Acquisition and Merger Expenses, net are the net of non-operating expenses related to an acquisition or merger that does not appear directly on the income statement and is hidden in operating earnings.
HIDDEN_NOPAT_ADJUSTMENT_ACQUISITION_MERGER_PRE_TAX_TOTAL
+ Hidden Legal Regulatory and Insurance Expense
HBS & MIT Sloan Data. Hidden Legal, Regulatory and Insurance Expenses, net are the net of non-operating expenses related to legal, regulatory, and insurance costs that do not appear directly on the income statement and is hidden in operating earnings.
HIDDEN_NOPAT_ADJUSTMENT_LEGAL_REGULATORY_INSURANCE_PRE_TAX_TOTAL
+ Hidden Derivative Related Expense
HBS & MIT Sloan Data. Hidden Derivative Related Expenses, net are the net of non-operating expenses related to derivatives that does not appear directly on the income statement. This item is hidden inside other line items that appear on the income statement and is hidden in operating earnings.
HIDDEN_NOPAT_ADJUSTMENT_DERIVATIVE_PRE_TAX_TOTAL
+ Hidden Other Financing Expense
HBS & MIT Sloan Data. Hidden Other Financing Expenses, net are the net of non-operating expenses related to the cost of financing that does not appear directly on the income statement and is hidden in operating earnings.
HIDDEN_NOPAT_ADJUSTMENT_OTHER_FINANCING_PRE_TAX_TOTAL
+ Other Hidden Non-Recurring Expense
HBS & MIT Sloan Data. Hidden Other Non-Recurring Expenses, net are the net of non-operating expenses related to costs that do not recur, and do not appear directly on the income statement and is hidden in operating earnings.
HIDDEN_NOPAT_ADJUSTMENT_OTHER_NON_RECURRING_PRE_TAX_TOTAL
+ Total Hidden Recurring Pension
HBS & MIT Sloan Data. Hidden Recurring, Non-Operating Pension Expenses, net are the net of non-operating expenses related to recurring pension costs that do not appear directly on the income statement and is hidden in operating earnings.
HIDDEN_NOPAT_ADJUSTMENT_PENSION_RECURRING
+ Total Hidden Non-Recurring Pension
HBS & MIT Sloan Data. Hidden Non-Recurring Pension Expenses, net are the net of non-operating expenses related to one-time pension costs that do not recur. This item is hidden inside other line items that appear on the income statement and is hidden in operating earnings.
HIDDEN_NOPAT_ADJUSTMENT_PENSION_NON_RECURRING
+ Hidden Company Defined Other Expense
HBS & MIT Sloan Data. Hidden Company Defined Other Expenses, net are the net of non-operating expenses for costs specifically defined as other that do not appear directly on the income statement and is hidden in operating earnings.
HIDDEN_NOPAT_ADJUSTMENT_COMPANY_DEFINED_OTHER_PRE_TAX_TOTAL
+ Reported Net Non-Operating Expense
Reported Net Non-Operating Expenses are the net of non-operating charges and gains that appear directly on the income statement.
EXPENSES_NON_OPERATING
+ Derivate Related Expense
HBS & MIT Sloan Data. Reported Derivative Related Expenses, net are the net of non-operating expenses related to derivatives that appear directly on the income statement.
EXPENSES_DERIVATIVE
+ Other Financing Expense
HBS & MIT Sloan Data. Reported Other Financing Expenses, net are the net of non-operating expenses related to the cost of financing that appear directly on the income statement.
EXPENSES_OTHER_FINANCING
+ Company Defined Other Non-Operating Expense
HBS & MIT Sloan Data. Reported Company Defined Other Non-Operating Expenses, net are the net of non-operating expenses for costs specifically defined as other that appear directly on the income statement.
EXPENSES_NON_OPERATING_COMPANY_DEFINED_OTHER
+ Acquisition and Merger Expense
HBS & MIT Sloan Data. Reported Acquisition and Merger Expenses, net are the net of non-operating expenses related to an acquisition or merger that appear directly on the income statement.
EXPENSES_ACQUISITION_MERGER
+ Legal, Regulatory, and Insurance Related Expense
HBS & MIT Sloan Data. Reported Legal, Regulatory, and Insurance Related Expenses, net are the net of non-operating expenses related to legal, regulatory, and insurance costs that appear directly on the income statement.
EXPENSES_LEGAL_REGULATORY_INSURANCE
+ Interest Expense/(Income)
Reported Interest Expense/(Income), net is a non-operating expense related to the cost of financing that appears directly on the income statement.
EXPENSES_INTEREST
+ Expenses/(Income) from Discontinued Operations
HBS & MIT Sloan Data. Reported Expenses/(Income) from Discontinued Operations, net are non-operating expenses associated with businesses or subsidiaries that are held for sale. These expenses appear directly on the income statement.
EXPENSES_DISCONTINUED_OPERATIONS
+ Losses from Unconsolidated Subsidiaries
Reported Losses/(Income) from Unconsolidated Subsidiaries, net are non-operating expenses associated with subsidiaries that are not consolidated within the parent company's financial statements. These expenses appear directly on the income statement.
EXPENSES_NON_OPERATING_SUBSIDIARY_UNCONSOLIDATED
+ Foreign Currency Loss/(Gain)
HBS & MIT Sloan Data. Reported Foreign Currency Loss/(Gain), net is a non-operating expense related to the changes in the value of foreign currency that appears directly on the income statement.
EXPENSES_FOREIGN_CURRENCY
+ Non-Operating Other Real Estate Owned Expense/(Income)
HBS & MIT Sloan Data. Reported Non-Operating Other Real Estate Owned Expenses/(Income), net are non-operating expenses associated with foreclosed assets owned or controlled by a bank. These expenses appear directly on the income statement.
EXPENSES_OREO
+ Other Non-Operating Expense/(Income)
HBS & MIT Sloan Data. Reported Other Non-Operating Expenses/(Income), net are non-operating expenses for other costs that appear directly on the income statement.
EXPENSES_NON_OPERATING_OTHER
+ Write-Downs (non-operating)
HBS & MIT Sloan Data. Reported Write-Downs, net are non-operating expenses related to the impairment in value of a company's assets. These expenses appear directly on the income statement.
EXPENSES_NON_RECURRING_WRITE_DOWN
+ Restructuring Expense
HBS & MIT Sloan Data. Reported Restructuring Expenses, net are the net of non-operating expenses related to the reorganization of a business that appear directly on the income statement.
EXPENSES_NON_RECURRING_RESTRUCTURING
+ Other Non-Recurring Expense/(Income)
HBS & MIT Sloan Data. Reported Other Non-Recurring Expenses/(Income), net are non-operating expenses for other costs that appear directly on the income statement. These costs should not recur in the future.
EXPENSES_NON_RECURRING_OTHER
+ Total Derived Data for the Net Income to NOPAT Reconciliation
Derived Datapoints for Net Income to NOPAT Detailed Reconciliation
DERIVED_DATAPOINTS
+ Change in Total Reserves
Change in Total Reserves captures changes in LIFO reserves, other inventory reserves, and loan loss reserves.
RESERVES_YOY_DELTA
+ Goodwill Amortization
HBS & MIT Sloan Data. Goodwill Amortization Expenses, net is a gradual, formulaic reduction in goodwill asset value using any of the several GAAP amortization methods. In 2002, FASB did away with Goodwill amortization and replaced it with the practice of goodwill impairment. This adjustment only appears in historical filings prior to adoption of the new accounting standards.
GOODWILL_AMORTIZATION_ADJUSTED
- ESO Expense (Employee Stock Options)
HBS & MIT Sloan Data. ESO Expense (Employee Stock Options), net is the cost of issuing (at-the-money) employee stock options (ESOs) to employees before companies were required to expense ESOs. Prior to 2006, businesses were not required to record any cost for issuing ESOs. Using data provided only in footnotes, we charge companies for the cost of all ESO issuances long before FASB required companies to report the expense. This charge only appears in historical filings prior to adoption of the new accounting standards.
ESO_EXPENSE
+ Interest for PV of Operating Leases
Interest for PV of Operating Leases is the implied interest expense added back to NOPAT for the capitalization of operating leases, a form of off-balance sheet debt. As of 2019, FASB requires operating leases to be on balance sheet. In the meantime, we capitalize all operating leases to make them like capital leases to ensure apples-to-apples comparability between companies employing different accounting techniques (i.e. capital leases vs operating leases) for the same economic activity.
LEASES_OPERATING_OBLIGATION_INTEREST_IMPLIED
+ Classification Disclosure Adjustment
Quarterly/Annual Classification Disclosure Adjustments, net are adjustments for irreconcilable differences in classification disclosure between quarterly and annual filings.
CLASSIFICATION_DISCLOSURE_ADJUSTMENT
+ Non-Operating Tax Adjustment
Non-Operating Tax Adjustment normalizes the reported income tax provision and accounts for the effects of non-operating items and deferred taxes.
NON_OPERATING_TAXES
+ Net After-Tax Non-Operating Expense/(Income)
Net After-Tax Non-Operating Expense/(Income) are the net of non-operating expenses and income that appear directly on the income statement after tax. We classify Non-Operating After-Tax Expenses into the following types:
CHARGE_AFTER_TAX
+ Minority Interest Expense
Reported Minority Interest Expenses, net are the net of non-operating expenses associated with significant but non-controlling ownership of a company's voting shares. The portion of the parent company's income attributed to minority interest is subtracted from reported profits.
EXPENSES_INTEREST_MINORITY
+ Loss/(Gain) from Discontinued Operations
HBS & MIT Sloan Data. Reported Loss/(Gain) from Discontinued Operations, net is the after-tax expense from assets or subsidiaries that are held for sale.
CHARGE_AFTER_TAX_DISCONTINUED_OPERATIONS
+ Preferred Dividends
Reported Preferred Stock Dividends, net are the dividends that must be paid out to preferred equity owners before common stock owners can receive any money.
DIVIDENDS_PREFERRED
+ Dividends on Redeemable Preferred Stock
Reported Redeemable Preferred Stock Dividends, net are the dividends that must be paid out to redeemable preferred equity owners before common stock owners can receive any money.
DIVIDENDS_PREFERRED_REDEEMABLE_MANDATORILY
+ Other After-tax Charge
HBS & MIT Sloan Data. Reported Other After-tax Charges, net are other non-operating expenses and income that appear directly on the income statement after tax.
CHARGES_AFTER_TAX_OTHER
NOPAT (Net Operating Profit After Tax)
NOPAT (Net Operating Profit After Tax)
NOPAT

*Indicates the datapoint is affected by stock price.