SNL Glossary of Terms

Frequently-used words, terms and acronyms in SNL's covered industries.
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  • Bank & Thrift
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  • Energy
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Terms A-E

3G / 4G - Wireless standards and technology that allow for advanced broadband services (3G – CDMA EVDO/A; HSPA) and much higher capacity and spectral efficiency in a pure IP environment (4G – LTE)   
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Absorption - The amount of space leased or sold in a given location over a set period. Net absorption is the amount of square feet leased during the period, minus the space that is vacated.   
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Absorption rate - Absorption expressed as a percentage of the total square footage available; the rate (or speed) at which vacant space is leased or sold in the marketplace. This measure is typically expressed in square feet per year or number of units per year.   
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Ad-avails - Time allotted for advertising during a program. Depending on whether you are a broadcaster or a distributor of television, ad-avails have different meanings. For broadcasters ad-avails are the available slots on their channel not reserved for programming, but that carry either their own advertising or are sold to a third party. For distributors ad-avails are the slots that have been contractually granted to them by the broadcaster where they can put either advertising for their own services or that of a third party. This amounts to between one and three minutes in each hour of broadcasting. Television distributors may have their own promo (barker) and PPV/NVOD channels with additional ad-avail space.   
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Adjusted Funds from Operations (AFFO) - This term refers to a computation made by analysts and investors to measure a real estate company’s cash flow generated by operations. AFFO is usually calculated by subtracting from Funds from Operations (FFO) both (1) normalized recurring expenditures that are capitalized by the REIT and then amortized, but which are necessary to maintain a REIT’s properties and its revenue stream (e.g., new carpeting and drapes in apartment units, leasing expenses and tenant improvement allowances) and (2) “straight-lining” of rents. This calculation is also called Cash Available for Distribution (CAD) or Funds Available for Distribution (FAD).   
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Affiliate Fees - Funds paid monthly by actual viewers through their cable bills. Each basic cable network charges a certain license fee per month to cable and satellite operators, which in turn mark up the fees and then pass them on to subscribers. Also called license fees or subscriber fees.   
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Analog - Any signal that varies continuously, as opposed to a digital signal that contains discreet levels. Or a system or device that operates primarily on analog signals.   
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Anchor Tenant - The anchor tenant is the major store within a shopping center that attracts or generates traffic for a retail property.    
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Annualized Base Rent (ABR) - ABR is calculated as the cash basis value of monthly base rent per the lease, multiplied by 12. Should free rent be granted, the first full month base rent value is used.   
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APREA - The Asian Public Real Estate Association is an industry association established to represent the listed real estate sector for the Asia Pacific Region.   
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A-REITs - Australian Real Estate Investment Trusts are REITs listed on the Australian Securities Exchange (ASX). A-REITs are a form of a listed investment company (LIC) and they must conform to the reporting standards set by the ASX.   
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ARPU: Average Revenue Per Unit - Measures the average monthly revenue generated for each customer unit that a carrier has in its operation.   
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ARPU: Average Revenue Per Unit - Measures the average monthly revenue generated for each customer unit a carrier serves.   
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Aspect Ratio - The ratio between the width and height of the video image. Standard National Television System Committee (NTSC), phase-alternation line (PAL), Advanced Television Systems Committee (ATSC) (standard definition) and digital video broadcasting (DVB) (standard definition) use a 4:3 ratio; ATSC and DVB high-definition formats use a 16:9 format.   
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Asset Liability Management (ALM) - The active management of a bank’s balance sheet to maintain a mix of loans and deposits consistent with its goals for long-term profitability/growth and risk management. Banks, in the normal course of business, assume financial risk by making loans at interest rates that differ from rates paid on deposit.   
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Average Spectrum Depth - Amount of aggregated spectrum at various frequencies, in MHz, a company owns or a license provides for a given geographic area.    
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Avoided Costs - The costs that a utility avoids by purchasing power from an independent power producer rather than generating power themselves, purchasing power from another source, or constructing new power plants. These costs are the basis upon which independent power producers are paid for the electricity they produce. There are two parts to an avoided cost calculation: the avoided capacity cost of constructing a new power plant and the avoided energy cost of fuel and operating and maintaining utility power plants (this is sometimes called the running or incremental cost).   
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Basic Cable - Channels received by a cable subscriber on the basic lineup.   
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Basis Point (BPS) - The smallest measure in quoting yields on interest rates, bonds, mortgages and notes, equal to one one-hundredth of one percentage point (0.01%). For example, a move in rates from 4.50% to 4.75% would be stated as a 25 basis point move. Slang for this is “twenty five bips”.   
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Beta - Beta is a measure of the fluctuation of a stock price relative to an index of stocks. A beta of less than 1 indicates that the security will be less volatile than the market. A beta of exactly 1 means the price of the security will move with the market. A beta of greater than 1 shows that the security’s price will be more volatile than the market.   
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Biomass - Any organic matter that can be used as fuel to generate energy. Wood and waste wood are common examples of biomass fuel, but biomass also includes such matter as municipal solid waste, agricultural waste, lawn and yard waste, and animal waste—all of which can be converted to energy-producing fuels using available technologies.   
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Black start unit - A generator that can begin operations without energy from another unit. Thus, it must be manned at all times and generally must be capable of being up and running within 1 to 2 hours. In the event of a massive power failure in an area, black start units would be the ones that would start up first, restoring voltage to the grid and enabling other units to begin operations.    
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Book Value - Book value is the accounting value of a firm. It is the total value of the company's assets that shareholders would theoretically receive if a company were liquidated. Book value per share is calculated as common equity divided by shares outstanding as reported by the company.    
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Broadband - A response that is the same over a wide range of frequencies and capable of handling frequencies greater than those required for high-grade voice communications. A cable system carrying 10 or more channels.   
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Broadcast Cash Flow Multiple - Transaction value as a multiple of annualized broadcast cash flow.   
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Btu - An abbreviation for British Thermal Unit, a measurement of energy. Btu is commonly used to measure the energy content of various fuels and steam. One Btu is the amount of heat required to raise the temperature of one pound of water one degree Fahrenheit.   
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Bus - A Bus is basically a circuit. As electricity leaves a power plant, it goes to a transmission substation which ramps up the voltage to very high levels required for transmission. Once at transmission voltage, the electricity is sent off on various circuits to different distribution areas. The "bus" is that point at the transmission substation where the energy is directed to a given circuit.   
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Buyrate - A calculation, expressed as percentage, of PPV program purchases against a defined subscriber universe. If 100 subscribers collectively order 300 movies in a single month, the monthly buyrate is calculated at 300%.   
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Call Letters - The I.D. or official legal name of a radio station, i.e. WCBS-FM.   
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CAMELS - An international bank-rating system with which bank supervisory authorities rate institutions according to six factors. The six areas examined are represented by the acronym "CAMELS." The six factors examined are as follows: Capital adequacy, Asset quality, Management quality, Earnings, Liquidity, and Sensitivity to market risk. Bank supervisory authorities assign each bank a score on a scale of 1 (best) to 5 (worst) for each factor. If a bank has an average score less than 2 it is considered to be a high-quality institution while banks with scores greater than 3 are considered to be less-than-satisfactory establishments. The system helps the supervisory authority identify banks that are in need of attention.   
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Capitalization Rate - The capitalization rate (or "cap rate") is determined by dividing the net operating income produced by an asset (usually real estate) and its purchase price. Generally, high cap rates indicate greater perceived risk.   
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Cash Flow - An expense or revenue stream that contributes / withdraws from a cash account (reported on the balance sheet) over a set period of time. Cash contributions typically flow from one of these three activities – operating, investing or financing. On the other hand, outflow is typically due to investments or expenses. On a property level, the cash flow is rental revenue from the property minus the property’s operating expenses.   
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Churn - Level of subscriber disconnections.   
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Churn - Number of wireless subscribers who disconnect service as a percentage of average total wireless subscribers, or as a % of total subscribers at the beginning of a given reporting period, expressed on a monthly basis.   
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Clean Air Act Amendments of 1990 - A major overhaul of the earlier Clean Air Act of 1970. Changes include revised provisions for attainment and maintenance of National Ambient Air Quality Standards, mobile sources, hazardous air pollutants, and other assorted air quality issues. In addition, it establishes guidelines for reductions in air pollution. The Act also specifically limits sulfur dioxide and nitrogen oxide emissions of power plants.   
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Cogeneration - The simultaneous production of two or more forms of useable energy from a single fuel source. Because cogeneration uses the waste energy, which is vented in a traditional power plant, the process is 50 to 70 percent more efficient. Fuels may take the form of natural gas, biomass, oil or coal. Most cogeneration systems are designed to simultaneously produce electric power (to be used on site or sold back to an investor-owned utility or both) and thermal heat for industrial processes or the heating and cooling of buildings. Cogeneration projects can be any size, from 10 kilowatts to 1,000 megawatts or more.   
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Collateralized Mortgage Obligation (CMO) - A mortgage-backed bond secured by the cash flow of a pool of mortgages. In a CMO, the regular principal and interest payments made by borrowers are separated into different payment streams, creating several bonds that repay invested capital at different rates. However, CMOs usually offer low returns because they are lower risk and, when issued by government-sponsored enterprises (GSE’s, e.g. Fannie Mae, Freddie Mac) they may be offered and referred to as government pass-through securities.   
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Combined Cycle - Combined Cycle generation is a high-efficiency power production process. In a typical combined cycle power plant, combustion turbines burn natural gas or other fuels to generate electricity in the first cycle. In the second cycle, the exhaust heat is captured, rather than vented into the atmosphere, and is used to generate steam, which drives steam turbines to supply additional electric power. By using heat that otherwise would have been wasted to generate additional power, the combined cycle unit can produce cost savings as well as increased operating efficiency. Furthermore, this great efficiency means more power is produced per unit of fuel, resulting in lower overall plant emissions.   
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Commercial Paper - Short-term money market securities issued by companies and sold to investors, mainly other companies. Commercial paper provides corporations with a way to borrow among themselves, bypassing the regulated securities network.    
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Competitive Bidding - A procedure that utilities in many states use to select suppliers of new electric capacity and energy. Under competitive bidding, an electric utility solicits bids from prospective power generators to meet current or further power demands. When offers from independent power producers began exceeding utility needs in the mid-1980s, utilities and state regulators began using competitive bidding systems to select more fairly among numerous supply alternatives.   
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Content Delivery Network (CDN) - Network systems that improve the performance and scalability of content delivery.   
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Core Deposits - The total of a bank’s demand deposits (checking accounts), consumer time deposits (savings certificates and regular passbook savings accounts), and NOW accounts. Jumbo CD’s and other deposits seen as less ‘sticky’ are excluded when determining a bank’s Core Deposits. Note: Not all analysts/investors/regulators define core deposits the same way.    
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Cost of Capital - The cost to a company of raising capital in the form of equity (common or preferred stock) or debt. The cost of equity capital generally is considered to include both the dividend rate as well as the expected equity growth either by higher dividends or growth in stock prices. The cost of debt capital is merely the interest expense on the debt incurred.   
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Covered POPs: Wireless Population Covered - Number of people covered by the contours of a carrier’s network and therefore able to get reception and service. This value is typically greater than a carrier’s subscribers and less than a carrier’s licensed population base.   
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CPM - Cost Per Thousand. The cost of a spot/average audience, in (000).   
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Cross-border Outstandings - Loans, acceptances, and deposits made to a foreign country in a currency other than that country’s local currency.   
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Cross-subsidization - The transfer of assets or services from the regulated portion of an electric utility to its unregulated affiliates to produce an unfair competitive advantage. Also, cross-subsidization can refer to one rate class (such as industrial customers) subsidizing the rates of another class (such as residential customers).   
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Cume: Cumulative Audience - The unduplicated households listening during a specified period of time.   
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Datacasting - A method for extracting digital information stored in a specific pattern on a radio frequency (RF) signal.   
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DBS: Direct Broadcast Satellite - A system for delivering television signals to subscribers directly from a communications satellite to a receiving dish, without the presence of an intermediary network such as a cable TV system. Also called DTH (Direct-To-Home).   
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DCR: Digital Cable Ready - A designation attached to televisions and other consumer electronics devices that have integrated digital set-top-box functionality and do not require a separate standalone box to receive digital cable signals, but do require separable conditional access such as the CableCard.   
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Debt Maturity Schedule - A Debt Maturity Schedule lists the principal amount of debt maturing (becomes due for repayment) for a particular time period. The Debt maturing is the Principal balance, net of unamortized discounts, of debt due in the current fiscal year. It also includes margin borrowings, notes payable on demand, and lines of credit/facilities due within one year.   
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Debt-to-Total Market Cap - Together, these measures have been used to provide an assessment of leverage. Debt-to-Total Market Cap was the most often cited measure of leverage early on in the current REIT underwriting cycle (circa 1993). There are a number of problems associated with using it for that purpose, however. Chief among those is that it doesn't provide meaningful information regarding a company's ability to service its debt.   
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Demand Side Management (DSM) - Refers to utility programs intended to affect the timing or amount of customer electricity use. These include energy efficiency programs aimed at reducing the energy required to serve customer needs and programs that shift electricity demand to reduce peak loads or to make more economic use of utility resources.   
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DEP - An abbreviation for Pennsylvania’s Department of Environmental Protection. The DEP administers Pennsylvania’s environmental policies, enforces environmental laws and regulations, performs research, and provides information on environmental subjects. The state agency also serves as the chief advisory to the Governor on state environmental policy and issues.   
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Deposit Insurance Fund (DIF) - A fund maintained by the United States Federal Deposit Insurance Corporation (FDIC) to insure accounts at member banks and other depository institutions. The FDIC merged the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF) to form the DIF on March 31, 2006 in accordance with the Federal Deposit Insurance Reform Act of 2005. The FDIC maintains the DIF by assessing depository institutions an insurance premium. The amount each institution is assessed is based both on the balance of insured deposits as well as on the degree of risk the institution poses to the insurance fund.   
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Digital Subscriber Line (DSL) - A technology for enabling high-speed information transfer to end users over ordinary copper telephone lines. xDSL refers to different variations of DSL, such as ADSL, HDSL, iDSL, RADSL and VDSL. DSL offers data rates dependant upon the variant supplied and distance from the nearest DSL service provider’s exchange. Distances are generally limited to the roughly four-mile mark and apply to the actual cable length from the exchange to the end-user premises.   
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Digital video broadcast (DVB) - MPEG-2-based digital television standard that defines formats for cable, satellite, and terrestrial broadcast.    
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Disaggregated License - Indicates that the spectrum block assigned to a given wireless license has been divided into two or more smaller spectrum ranges.   
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Dispatchability - The ability of a generating unit to increase or decrease generation, or to be brought on line or shut down at the request of a utility’s system operator.   
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Dividend Payout Ratio - The percentage of earnings paid out in dividends. Common cash dividends per share declared as a percentage of diluted EPS after extraordinary items. Dividends are generally total cash payments per share over a 12-month period.   
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DOE - An abbreviation for the U.S. Department of Energy. DOE manages programs of research, development and commercialization for various energy technologies, and associated environmental, regulatory and defense programs. DOE announces energy policies and acts as a principal advisor to the President on energy matters.   
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DownREIT - A DownREIT is structured much like an UPREIT, but the REIT owns and operates properties other than its interest in a controlled partnership that owns and operates separate properties.   
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DTH: Direct-to-Home - A system for delivering television signals to subscribers directly from a communications satellite to a receiving dish, without the presence of an intermediary network such as a cable TV system. Analogous to DBS (Direct Broadcast Satellite) in the United States.   
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DTT: Digital Terrestrial Television - Free-to-air or pay multichannel programming service in which digital signals are transmitted over the air and received by households via a digital terrestrial television (DTT) set top box or integrated tuner.   
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Duration - The measure of the price sensitivity of a fixed-income security. Calculation is based on the weighted average of the present values for all cash flows. Duration is measured in years; however, do not confuse it with a bond's maturity. For nearly all bonds, duration is shorter than maturity due to the larger present value of cash flows from the coupons paid early in the bond’s life. For zero coupon bonds duration is equal to maturity.    
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Duration gap - The difference between the estimated durations (market value sensitivity) of assets and liabilities (including the impact of interest rate exchange agreements) and reflects the extent to which estimated maturity and repricing cash flows for assets and liabilities are matched.   
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DVD: Digital Video Disk - A high-capacity, five-inch disk that stores video, sound and data in a digital format agreed upon by consumer electronics industry manufacturers.   
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DVR: Digital Video Recorder - A hard-drive-equipped unit capable of recording and storing video to allow time-shifting functions including pause, rewind and fast-forward. Increasingly the hardware is integrated with a digital set-top box or satellite receiver. Interchangeably referred to as a PVR or Personal Video Recorder.   
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Earnings Per Share (EPS) - The portion of a company's profit (earnings) allocated to each outstanding share of common stock. EPS serves as an indicator of a company's profitability. EPS and EPS growth is considered by many analysts and investors to be the single most important variable influencing a company’s share price. It is also a major component of the price-to-earnings ratio. EPS is reported on either a ‘diluted’ basis’ or a ‘basic basis,’ which takes into account potentially diluvative securities that a company has issued.   
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EBITDA - Earnings before interest, taxes, depreciation and amortization. EBITDA can be used to analyze and compare profitability between companies and industries because it eliminates the effects of financing and accounting decisions. However, this is a non-GAAP measure that allows a greater amount of discretion as to what is (and is not) included in the calculation.    
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Efficiency Ratio - A ratio used to calculate a bank's cost structure. It is calculated as non-interest expense minus (foreclosed property expense + amortization of intangibles & goodwill impairment ) divided by (net interest income (fully taxable equivalent if available) + noninterest income). The efficiency ratio measures how effectively and profitably a bank operates (or how much a bank spends for each dollar of revenue). A lower percentage is favorable, meaning the company is gaining a larger percentage of its income to expense.    
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Electric Capacity - The ability of a power plant to produce a given output of electric energy at an instant in time, measured in kilowatts or megawatts (1,000 kilowatts). (See Energy.)   
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Electric Utility - A company that controls the distribution of electricity in a specific state, area or region. Utilities often own and operate electricity generation and transmission facilities. (See Franchise Monopoly.)   
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Electric Utility Affiliate - A subsidiary or affiliate of an electric utility. Many utilities form affiliates to develop, own and operate independent power facilities.   
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Energy - Energy broadly defined, is the capability of doing work. In the electric power industry, energy is more narrowly defined as electricity supplied over time, expressed in kilowatts.   
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Energy Policy Act of 1992 (EPAct) - The first comprehensive federal energy law promulgated in more than a decade. The act will help create a more competitive U.S. electric power marketplace by removing barriers to competition resulting from the Public Utility Holding Company Act of 1935 (see PUHCA). By doing so, EPAct allows a broad spectrum of independent energy producers to compete in wholesale electric power markets. The act also made significant changes in the way power transmission grids are regulated. Specifically, the law gives the Federal Energy Regulatory Commission (FERC) the authority to order electric utilities to provide access to their transmission facilities to other power suppliers.   
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Enhanced-Definition Television (EDTV) - A new DTV product category introduced by the CEA in 2000. Enhanced Definition is a category between SDTV and HDTV covering displays with higher display performance than SDTV, but not falling into the HDTV definition. An EDTV Receiver has active vertical scanning lines of 480p or higher.    
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EPA - The abbreviation for the U.S. Environmental Protection Agency. EPA administers federal environmental policies, enforces environmental laws and regulations, performs research, and provides information on environmental subjects. The agency also acts as chief advisor to the President on U.S. environmental policy and issues.   
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EPRA - The trade association for European Real Estate Companies.   
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Equitization - The process by which the economic benefits of ownership of a tangible asset are divided among numerous investors and represented in the form of publicly-traded securities.   
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Equity Market Cap - The market value of all outstanding common stock of a company.   
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Equity REIT - A REIT which owns, or has an “equity interest”, in rental real estate (as opposed to making loans secured by real estate collateral).   
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Equity/Assets - Average common equity divided by average total assets. It is a measure of capital adequacy.   
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Exempt Wholesale Generator (EWG) - A category of power producer defined by the Energy Policy Act of 1992. EWGs are independent power facilities that generate electricity for sale in wholesale power markets at market-based rates. The Federal Energy Regulatory Commission (FERC) is responsible for determining EWG status.   
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Asset Liability Management (ALM) - The active management of a bank’s balance sheet to maintain a mix of loans and deposits consistent with its goals for long-term profitability/growth and risk management. Banks, in the normal course of business, assume financial risk by making loans at interest rates that differ from rates paid on deposit.   
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Basis Point (BPS) - The smallest measure in quoting yields on interest rates, bonds, mortgages and notes, equal to one one-hundredth of one percentage point (0.01%). For example, a move in rates from 4.50% to 4.75% would be stated as a 25 basis point move. Slang for this is “twenty five bips”.   
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CAMELS - An international bank-rating system with which bank supervisory authorities rate institutions according to six factors. The six areas examined are represented by the acronym "CAMELS." The six factors examined are as follows: Capital adequacy, Asset quality, Management quality, Earnings, Liquidity, and Sensitivity to market risk. Bank supervisory authorities assign each bank a score on a scale of 1 (best) to 5 (worst) for each factor. If a bank has an average score less than 2 it is considered to be a high-quality institution while banks with scores greater than 3 are considered to be less-than-satisfactory establishments. The system helps the supervisory authority identify banks that are in need of attention.   
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Collateralized Mortgage Obligation (CMO) - A mortgage-backed bond secured by the cash flow of a pool of mortgages. In a CMO, the regular principal and interest payments made by borrowers are separated into different payment streams, creating several bonds that repay invested capital at different rates. However, CMOs usually offer low returns because they are lower risk and, when issued by government-sponsored enterprises (GSE’s, e.g. Fannie Mae, Freddie Mac) they may be offered and referred to as government pass-through securities.   
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Commercial Paper - Short-term money market securities issued by companies and sold to investors, mainly other companies. Commercial paper provides corporations with a way to borrow among themselves, bypassing the regulated securities network.    
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Core Deposits - The total of a bank’s demand deposits (checking accounts), consumer time deposits (savings certificates and regular passbook savings accounts), and NOW accounts. Jumbo CD’s and other deposits seen as less ‘sticky’ are excluded when determining a bank’s Core Deposits. Note: Not all analysts/investors/regulators define core deposits the same way.    
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Cross-border Outstandings - Loans, acceptances, and deposits made to a foreign country in a currency other than that country’s local currency.   
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Deposit Insurance Fund (DIF) - A fund maintained by the United States Federal Deposit Insurance Corporation (FDIC) to insure accounts at member banks and other depository institutions. The FDIC merged the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF) to form the DIF on March 31, 2006 in accordance with the Federal Deposit Insurance Reform Act of 2005. The FDIC maintains the DIF by assessing depository institutions an insurance premium. The amount each institution is assessed is based both on the balance of insured deposits as well as on the degree of risk the institution poses to the insurance fund.   
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Duration - The measure of the price sensitivity of a fixed-income security. Calculation is based on the weighted average of the present values for all cash flows. Duration is measured in years; however, do not confuse it with a bond's maturity. For nearly all bonds, duration is shorter than maturity due to the larger present value of cash flows from the coupons paid early in the bond’s life. For zero coupon bonds duration is equal to maturity.    
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Duration gap - The difference between the estimated durations (market value sensitivity) of assets and liabilities (including the impact of interest rate exchange agreements) and reflects the extent to which estimated maturity and repricing cash flows for assets and liabilities are matched.   
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Efficiency Ratio - A ratio used to calculate a bank's cost structure. It is calculated as non-interest expense minus (foreclosed property expense + amortization of intangibles & goodwill impairment ) divided by (net interest income (fully taxable equivalent if available) + noninterest income). The efficiency ratio measures how effectively and profitably a bank operates (or how much a bank spends for each dollar of revenue). A lower percentage is favorable, meaning the company is gaining a larger percentage of its income to expense.    
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Financial Futures Contract - An obligation to buy or sell a financial instrument at a predetermined price in the future. Often used for hedging purposes, but also used for speculation. In hedging situations, parties to the contract usually expect a change in its value will offset a change in the value of the specific asset or liability being hedged.   
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Gap - The difference between a financial institution’s liabilities and its assets as both items mature over one year. If more liabilities than assets mature or are re-priced, the bank is liability-sensitive (has a negative gap). If more assets mature than liabilities, the bank is asset-sensitive (has a positive gap). In a period of falling interest rates, a bank with a negative gap will see net interest margins widen; conversely, a bank with a positive gap will benefit during a period of rising rates.   
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Home Equity Loan - A consumer loan secured by a second mortgage, allowing home owners to borrow against their equity in the home as collateral to the lender. The loan is based on the difference between the homeowner's equity and the home's current market value. The mortgage provides tax deductible interest payments for the home owner, making it more attractive than alternative borrowing methods.   
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Hybrid Securities - A security that combines two or more different financial instruments, generally combining both debt and equity characteristics. Hybrid securities pay a predictable (fixed or floating) rate of return or dividend until a certain date, at which point the holder has a number of options including converting the securities into the underlying share. A common example is a convertible bond that has features of an ordinary bond, but is heavily influenced by the price movements of the stock into which it is convertible. New types of hybrid securities are being introduced all the time to meet the needs of sophisticated investors. Some of these securities get so complicated that it becomes difficult to define them as either debt or equity. This can raise particular issues as it relates to accounting for the securities.   
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Interest Rate Risk - The risk that an asset's value will change due to a change in the absolute level of interest rates, in the spread between two rates, in the shape of the yield curve or in any other interest rate relationship. Such changes usually affect securities inversely and can be reduced by diversifying (investing in fixed-income securities with different durations) or hedging (e.g. through an interest rate swap).    
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Interest Rate Swap - A contract for a specified time period between two parties that agree to exchange streams of interest payments. One party makes payments based on a fixed interest rate, the other makes payments based on a floating interest rate (most often LIBOR). A company will use interest rate swaps to limit, or manage, its exposure to fluctuations in interest rates, or to obtain a marginally lower interest rate than it would have been able to get without the swap.   
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Loan Loss Reserve - An expense set aside as an allowance for bad loans (customer defaults, or terms of a loan have to be renegotiated, etc). This would be a bank's equivalent of a manufacturing company's allowance for returns on goods sold. Also know as a loan loss provision, valuation allowance or valuation reserve.   
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Mortgage Servicing Rights (MSR’s) - Servicing rights are the contractual rights to service loans for other institutions. When an enterprise purchases or originates loans, the right to service those loans often accompanies the loans themselves. MSR’s represent the present value of expected future cash inflows and outflows associated with servicing the underlying mortgage loans.   
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Negotiable Certificates of Deposit (NCD) - Marketable receipts for funds deposited in a financial institution at interest for a specified period, usually between 30 and 90 days. Negotiable CDs are sold in denominations of $100,000 or more and are a type of certificate account. These are guaranteed by the bank and can be sold in a highly liquid secondary market, but they cannot be cashed-in before maturity.   
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Net Charge-Off (NCO) - A gross amount of loans charged off as bad debt. It can also be a one time expense incurred by a company that negatively affects earnings. A Charge-off may be an extraordinary event, which, although affecting present earnings, will not occur again in the future. As a result companies will often provide earnings results and guidance figures with and without this charge.   
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Net Interest Margin (NIM) - The percentage difference between the interest income produced by a bank’s earning assets (loans and investments) and its major expense – interest paid to depositors. The net difference between interest earned and interest paid is a key measure of bank profitability.   
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Non-Performing Assets (NPA) - Any asset that is not effectively producing income. For example, an overdue loan would be considered non-performing. For banks this is calculated as the sum of nonperforming loans (nonaccrual + renegotiated) plus assets acquired through foreclosure. Loans delinquent more than 90 days and still accruing are excluded. Nonaccrual loans that are government backed are not included.   
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Non-Performing Loans (NPL) - Loans that are in default or close to being in default. Many loans become non-performing after being in default for three months, but this can depend on the contract terms. For banks this is calculated as nonperforming loans (nonaccrual + renegotiated). Nonaccrual loans that are government backed are not included.   
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Other Real Estate Owned (OREO) - Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most foreclosure auctions  equal the outstanding loan amount, the accrued interest and any fees associated with the foreclosure sale.   
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Prime Rate - The base interest rate that commercial banks use in pricing loans to their best and most creditworthy customers. This key rate is determined by the Federal Reserve’s prevailing interest rates for short term borrowing.   
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Reserve For Loan Losses - A reserve fund composed of accumulated earnings that a bank sets aside to protect its loan portfolio from potential losses on loans. It is distinct from the deposits with the Federal Reserve Bank that are mandated to satisfy reserve requirements.   
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Reverse Repurchase Agreement (Reverse REPO) - An agreement to purchase mortgage-backed securities from a party with a simultaneous agreement to resell them at a specified future date and price. The lender of money who will receive the securities in the future gets collateral from the reverse repo party to protect against default.   
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Risk Weighted Assets - Risk weighted assets is the total of all assets held by the bank which are weighted for credit risk according to a formula determined by the regulator (usually Federal Reserve). Assets like cash and coins usually have zero risk weight, while unsecured loans might have a risk weight of 100%. The idea of risk-weighted assets is to move away from having a static requirement for capital. Instead, it is based on the riskiness of a bank's assets.   
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Risk-based Capital - A measurement of a bank’s financial strength, taking into account capital reserves for loans, investments and certain other items off the balance sheet. In general, assets with higher credit risk require more capital in reserve than low-risk assets.   
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Special Purpose Entity/Vehicle (SPE/SPV) - A SPE is created to fulfill narrow, specific or temporary objectives, primarily to isolate financial risk. It is also referred to as a "bankruptcy-remote entity" whose operations are limited to the acquisition and financing of specific assets. The SPV is usually a subsidiary company with an asset/liability structure and legal status that makes its obligations secure even if the parent company goes bankrupt.    
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Thrift Institution - A savings and loan association or savings bank whose primary function is to encourage personal savings (thrift) and home buying through mortgage lending. Thrifts are mutually held, meaning that the depositors and borrowers are members with voting rights and have the ability to direct the financial and managerial goals of the organization. Saving banks are state-regulated thrifts, while saving institutions (S&L Associations) are federal-regulated thrifts.   
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Tier 1 Capital - The core measure of a bank’s financial strength and capital adequacy from a regulator’s point of view, consisting of the types of financial capital considered the most reliable and liquid. It is also known as core equity capital. Tier 1 capital includes common stock, preferred stock that is irredeemable and non-cumulative, and retained bank earnings.   
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Total Deposits - Total interest and non-interest-bearing deposits at period end. Including passbook, checking, NOW, time and any other deposit in a federally insured bank or thrift.   
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Total Loans - All domestic and foreign loans (excluding leases), minus unearned discount and reserve for possible losses. Generally considered a bank’s principal asset.   
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Trading Account Securities - Bank bond inventories. These debt and equity securities, held primarily with the expectation that they will generate capital gains, are valued on bank balance sheets at cost or at market value, whichever is lower.   
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Tranche - A piece, portion or slice of a deal or structured financing. This portion is one of several related securities that are offered at the same time but have different risks, rewards and/or maturities. Tranche is a term often used to describe a specific class of bonds within an offering wherein each tranche offers varying degrees of risk to the investor.   
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Trust Preferred Securities (TPS) - TPS’s are securities that are treated as debt for tax purposes, but which count as Tier I capital, within limits, for regulatory purposes. The payment of interest on trust preferred securities is generally deductible for tax purposes, yet such TPS, raise capital without reducing an existing shareholder’s ownership interest.   
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Absorption - The amount of space leased or sold in a given location over a set period. Net absorption is the amount of square feet leased during the period, minus the space that is vacated.   
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Absorption rate - Absorption expressed as a percentage of the total square footage available; the rate (or speed) at which vacant space is leased or sold in the marketplace. This measure is typically expressed in square feet per year or number of units per year.   
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Adjusted Funds from Operations (AFFO) - This term refers to a computation made by analysts and investors to measure a real estate company’s cash flow generated by operations. AFFO is usually calculated by subtracting from Funds from Operations (FFO) both (1) normalized recurring expenditures that are capitalized by the REIT and then amortized, but which are necessary to maintain a REIT’s properties and its revenue stream (e.g., new carpeting and drapes in apartment units, leasing expenses and tenant improvement allowances) and (2) “straight-lining” of rents. This calculation is also called Cash Available for Distribution (CAD) or Funds Available for Distribution (FAD).   
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Anchor Tenant - The anchor tenant is the major store within a shopping center that attracts or generates traffic for a retail property.    
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Annualized Base Rent (ABR) - ABR is calculated as the cash basis value of monthly base rent per the lease, multiplied by 12. Should free rent be granted, the first full month base rent value is used.   
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APREA - The Asian Public Real Estate Association is an industry association established to represent the listed real estate sector for the Asia Pacific Region.   
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A-REITs - Australian Real Estate Investment Trusts are REITs listed on the Australian Securities Exchange (ASX). A-REITs are a form of a listed investment company (LIC) and they must conform to the reporting standards set by the ASX.   
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Beta - Beta is a measure of the fluctuation of a stock price relative to an index of stocks. A beta of less than 1 indicates that the security will be less volatile than the market. A beta of exactly 1 means the price of the security will move with the market. A beta of greater than 1 shows that the security’s price will be more volatile than the market.   
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Debt-to-Total Market Cap - Together, these measures have been used to provide an assessment of leverage. Debt-to-Total Market Cap was the most often cited measure of leverage early on in the current REIT underwriting cycle (circa 1993). There are a number of problems associated with using it for that purpose, however. Chief among those is that it doesn't provide meaningful information regarding a company's ability to service its debt.   
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DownREIT - A DownREIT is structured much like an UPREIT, but the REIT owns and operates properties other than its interest in a controlled partnership that owns and operates separate properties.   
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EPRA - The trade association for European Real Estate Companies.   
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Equity REIT - A REIT which owns, or has an “equity interest”, in rental real estate (as opposed to making loans secured by real estate collateral).   
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Funds Available for Distribution (FAD) - This is calculated by accounting for capital expenditures for maintenance and upkeep on the physical real estate to the calculated FFO. It is this expense that will allow the real estate to either hold its value or appreciate over time.   
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Funds from Operations (FFO) - FFO is equal to a REIT’s net income, excluding gains or losses from sales of property or debt restructuring, and adding back real estate depreciation. FFO is considered the most commonly accepted and reported measure of REIT operating performance.   
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General Partnership - An organizational form of real estate ownership in which income, gains, losses, deductions and credits are passed through to individual partners who pay tax on their own income.   
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G-REITs - German REITs were enacted in 2007, and must meet several qualifications before they can actually be considered a G-REIT. They must be established as a corporation (REIT-AG), at least 90% of the G-REITs taxable income must be paid through dividends to its shareholders, at least 75% of the company’s assets must be invested in real estate, at least 75% of the REITs gross revenues must be related to real-estate, and the company must be income-tax-exempt (the shareholders will still have to pay individual income taxes on the paid dividends).   
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Housing Starts - Housing units that are actually under construction; it may be different from the actual number of building permits originally issued. Starts are often used as an economic measure.   
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Hybrid REIT - REIT that combines the investment strategies of both equity REITs and mortgage REITS by owning real estate and holding mortgages that are secured by real estate.   
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Implied Equity Market Cap - The market value of all outstanding common stock of a company plus the value of all UPREIT partnership units as if they were converted into the REIT’s stock. It excludes convertible preferred stocks, convertible debentures and warrants even though these securities have similar conversion features.   
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J-REIT - J-REIT (Japanese REIT) securities are traded on the Tokyo Stock Exchange and may be structured as a contractual relationship with a trust bank or as an independent corporation.    
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Lease Expiration Schedule - The lease expiration schedule shows the total value of base rents to be received from operating leases expiring each year.    
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Mixed-Use - Space within a property utilized for more than one use (ex. An office building with apartments).   
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Mortgage REIT - A REIT that makes or owns loans and other obligations that are secured by real estate collateral.   
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Multiple to Growth Ratio - This measure is calculated by dividing a company's price to FFO multiple by its FFO growth rate. Investors use this measure to determine how much the market is willing to pay per unit of growth. Companies with P/FFO multiples less than their growth rates are often considered undervalued.   
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NAREIT - The National Association of Real Estate Investment Trusts is the trade association for the US REIT industry.   
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Net Lease - A lease in which the tenant pays, in addition to rent, certain costs associated with the property’s operation. These costs could include property taxes, insurance, repairs, utilities and maintenance.   
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Occupancy Cost - The money spent to maintain occupancy in a property. This outlay does not include expense directly related to the operation of a business.   
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Pass Through - The tax advantage of a partnership or REIT that allows cash flows and deductions, namely depreciation, to pass through the legal structure of the partnership directly to individual investors.   
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Positive Spread Investing (PSI) - The ability to raise funds (both equity and debt) at a cost significantly less than the initial returns that can be obtained on real estate transactions.   
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Real Estate Investment Trust (REIT) - A REIT is a Real Estate Investment Trust. REIT is a company that owns, and in most cases, operates income-producing real estate such as apartments, shopping centers, offices, theaters, hotels and warehouses. Some REITs also engage in financing real estate. To qualify as a REIT, a company must distribute at least 90 percent of its taxable income to its shareholders annually.   
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Real Estate Operating Company (REOC) - A REOC is a Real Estate Operating company that invests in real estate and whose shares trade on a public exchange. A REOC is similar to a REIT, except that a REOC will reinvest its earnings into the business, rather than distributing them to unit holders. Also, REOCs are more flexible than REITs in terms of what types of real estate investments they can make. Because real estate operating companies reinvest earnings rather than distribute dividends to unit holders, they do not get the same benefits of lower corporate taxation that are a common characteristic of REITs.   
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Rent-up Period - The time period in which an income property is expected to lease up to a level of stabilized occupancy. Stabilized occupancy assumes rental achievement at market levels as well as physical occupancy at stabilized levels.   
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Return on Capital - The portion of a REIT's dividend in excess of taxable income. Because REIT dividends are often higher than taxable income, principally due to depreciation, the amount by which the dividend exceeds taxable income is a return of capital to a shareholder, meaning that - for a taxpaying shareholder - it does not create currently taxable ordinary income, but instead reduces the shareholder's tax basis. At the final sale of the shares, the difference between tax basis and final net sales price is recognizable as a capital gain. To the extent the final capital gains rate is lower than interim ordinary income tax rates, REITs provide a tax shelter function for certain taxpaying investors, by allowing the deferral of tax on current cash received as dividends and taxing it at a lower rate upon disposition of the shares.   
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Same Store - All properties owned during both the current and prior year reporting periods. This category excludes development properties prior to their stabilizations for both current and reporting periods.   
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SIIC - The French version of REIT legislation (les Sociétés d'Investissements Immobiliers Cotées) was introduced in 2003 to provide (under certain conditions) a corporate tax exemption on income derived directly or indirectly from the sale or rental income of properties.   
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Straight-lining - Real estate companies such as REITs “straight line” rents because generally accepted accounting principles require it. Straight lining averages the tenant’s rent payments over the life of the lease.   
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Triple Net Lease - A lease where the lessee assumes payment of all expenses associated with the operation of the property, in addition to the rent. This arrangement includes both fixed expenses, including taxes and insurance, and operating expenses, such as maintenance and repair.   
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UK-REITs - UK-REITs (British REITs) were enacted in January 2007. A UK-REIT must be a close-ended investment trust, be publicly listed on a stock exchange that is recognized be the Financial Services Authority, and must distribute 90% of their income to shareholders.   
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UPREIT - In the typical UPREIT, the partners of the existing partnerships and a newly-formed REIT become partners in a new partnership termed the operating partnership. For their respective interests in the operating partnership (“units”), the partners contribute the properties from the existing partnership and the REIT contributes the cash proceeds from its public offering. The REIT typically is the general partner and the majority owner of the operating partnership units.   
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Avoided Costs - The costs that a utility avoids by purchasing power from an independent power producer rather than generating power themselves, purchasing power from another source, or constructing new power plants. These costs are the basis upon which independent power producers are paid for the electricity they produce. There are two parts to an avoided cost calculation: the avoided capacity cost of constructing a new power plant and the avoided energy cost of fuel and operating and maintaining utility power plants (this is sometimes called the running or incremental cost).   
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Biomass - Any organic matter that can be used as fuel to generate energy. Wood and waste wood are common examples of biomass fuel, but biomass also includes such matter as municipal solid waste, agricultural waste, lawn and yard waste, and animal waste—all of which can be converted to energy-producing fuels using available technologies.   
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Black start unit - A generator that can begin operations without energy from another unit. Thus, it must be manned at all times and generally must be capable of being up and running within 1 to 2 hours. In the event of a massive power failure in an area, black start units would be the ones that would start up first, restoring voltage to the grid and enabling other units to begin operations.    
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Btu - An abbreviation for British Thermal Unit, a measurement of energy. Btu is commonly used to measure the energy content of various fuels and steam. One Btu is the amount of heat required to raise the temperature of one pound of water one degree Fahrenheit.   
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Bus - A Bus is basically a circuit. As electricity leaves a power plant, it goes to a transmission substation which ramps up the voltage to very high levels required for transmission. Once at transmission voltage, the electricity is sent off on various circuits to different distribution areas. The "bus" is that point at the transmission substation where the energy is directed to a given circuit.   
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Clean Air Act Amendments of 1990 - A major overhaul of the earlier Clean Air Act of 1970. Changes include revised provisions for attainment and maintenance of National Ambient Air Quality Standards, mobile sources, hazardous air pollutants, and other assorted air quality issues. In addition, it establishes guidelines for reductions in air pollution. The Act also specifically limits sulfur dioxide and nitrogen oxide emissions of power plants.   
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Cogeneration - The simultaneous production of two or more forms of useable energy from a single fuel source. Because cogeneration uses the waste energy, which is vented in a traditional power plant, the process is 50 to 70 percent more efficient. Fuels may take the form of natural gas, biomass, oil or coal. Most cogeneration systems are designed to simultaneously produce electric power (to be used on site or sold back to an investor-owned utility or both) and thermal heat for industrial processes or the heating and cooling of buildings. Cogeneration projects can be any size, from 10 kilowatts to 1,000 megawatts or more.   
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Combined Cycle - Combined Cycle generation is a high-efficiency power production process. In a typical combined cycle power plant, combustion turbines burn natural gas or other fuels to generate electricity in the first cycle. In the second cycle, the exhaust heat is captured, rather than vented into the atmosphere, and is used to generate steam, which drives steam turbines to supply additional electric power. By using heat that otherwise would have been wasted to generate additional power, the combined cycle unit can produce cost savings as well as increased operating efficiency. Furthermore, this great efficiency means more power is produced per unit of fuel, resulting in lower overall plant emissions.   
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Competitive Bidding - A procedure that utilities in many states use to select suppliers of new electric capacity and energy. Under competitive bidding, an electric utility solicits bids from prospective power generators to meet current or further power demands. When offers from independent power producers began exceeding utility needs in the mid-1980s, utilities and state regulators began using competitive bidding systems to select more fairly among numerous supply alternatives.   
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Cross-subsidization - The transfer of assets or services from the regulated portion of an electric utility to its unregulated affiliates to produce an unfair competitive advantage. Also, cross-subsidization can refer to one rate class (such as industrial customers) subsidizing the rates of another class (such as residential customers).   
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Demand Side Management (DSM) - Refers to utility programs intended to affect the timing or amount of customer electricity use. These include energy efficiency programs aimed at reducing the energy required to serve customer needs and programs that shift electricity demand to reduce peak loads or to make more economic use of utility resources.   
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DEP - An abbreviation for Pennsylvania’s Department of Environmental Protection. The DEP administers Pennsylvania’s environmental policies, enforces environmental laws and regulations, performs research, and provides information on environmental subjects. The state agency also serves as the chief advisory to the Governor on state environmental policy and issues.   
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Dispatchability - The ability of a generating unit to increase or decrease generation, or to be brought on line or shut down at the request of a utility’s system operator.   
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DOE - An abbreviation for the U.S. Department of Energy. DOE manages programs of research, development and commercialization for various energy technologies, and associated environmental, regulatory and defense programs. DOE announces energy policies and acts as a principal advisor to the President on energy matters.   
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Electric Capacity - The ability of a power plant to produce a given output of electric energy at an instant in time, measured in kilowatts or megawatts (1,000 kilowatts). (See Energy.)   
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Electric Utility - A company that controls the distribution of electricity in a specific state, area or region. Utilities often own and operate electricity generation and transmission facilities. (See Franchise Monopoly.)   
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Electric Utility Affiliate - A subsidiary or affiliate of an electric utility. Many utilities form affiliates to develop, own and operate independent power facilities.   
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Energy - Energy broadly defined, is the capability of doing work. In the electric power industry, energy is more narrowly defined as electricity supplied over time, expressed in kilowatts.   
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Energy Policy Act of 1992 (EPAct) - The first comprehensive federal energy law promulgated in more than a decade. The act will help create a more competitive U.S. electric power marketplace by removing barriers to competition resulting from the Public Utility Holding Company Act of 1935 (see PUHCA). By doing so, EPAct allows a broad spectrum of independent energy producers to compete in wholesale electric power markets. The act also made significant changes in the way power transmission grids are regulated. Specifically, the law gives the Federal Energy Regulatory Commission (FERC) the authority to order electric utilities to provide access to their transmission facilities to other power suppliers.   
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EPA - The abbreviation for the U.S. Environmental Protection Agency. EPA administers federal environmental policies, enforces environmental laws and regulations, performs research, and provides information on environmental subjects. The agency also acts as chief advisor to the President on U.S. environmental policy and issues.   
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Exempt Wholesale Generator (EWG) - A category of power producer defined by the Energy Policy Act of 1992. EWGs are independent power facilities that generate electricity for sale in wholesale power markets at market-based rates. The Federal Energy Regulatory Commission (FERC) is responsible for determining EWG status.   
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FERC - The acronym for the Federal Regulatory Commission, the chief energy regulatory body of the U.S. government. FERC was given new powers when Congress passed the Energy Policy Act of 1992. Under the Act, FERC is responsible for determining Exempt Wholesale Generator (EWG) status, and has the authority to order utilities to provide access to their power transmission systems to other electric generators. In addition, FERC certifies Qualifying Facilities (QFs: another term for IPP) as defined by the Public Utility Regulatory Policies Act; establishes and enforces rates for power sales and transmission services; issues licenses for hydroelectric projects; and regulates aspects of mergers and acquisitions of gas and electric utility companies. The commission also establishes and enforces rates related to the sale and transportation of oil and natural gas.   
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Force Majeure - A term commonly used in contracts to describe an event or effect that cannot be reasonably controlled. Independent power producers include force majeure clauses in their power purchase agreements with electric utilities to assist in defining the circumstances under which they can be reasonably expected to supply power. Force majeure events commonly include: acts of God, droughts, earthquakes, storms, fire or other natural catastrophes, war, riot and civil disobedience. Force majeure may also include labor disputes, government delays or inaction, and other events beyond control of the affected parties.   
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Franchise Monopoly - Franchise Monopoly describes the system in which Pennsylvania’s electric utilities operated prior to 1999. In this system, a utility has the right to be the sole or principal supplier of electric power at a retail level in a specific region or area known as the franchise service territory. In return for its sole supplier privilege, the utility has an obligation to serve anyone who requests service, and agrees to be accountable to state and/or federal regulatory bodies that regulate the utility’s performance, accounting procedures, pricing structures, and plant planning and siting.   
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Gigawatt - A unit of electric power equal to one billion watts, or one thousand megawatts.   
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Greenfield Plant - A new electric power generating facility built from the ground up.   
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Grid - A network of high voltage transmission lines along which power moves. In the United States, there are three distinct electric power grids: the Eastern Interconnection, of which Pennsylvania is a part; the Texas Interconnection; and the Western Systems Coordinating Council. In addition, certain regions of the U.S. import electric power from the Canadian grid.   
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Independent Power Producers (IPPs) - Private entrepreneurs who develop, own or operate electric power plants fueled by alternative energy sources such as biomass, cogeneration, small hydro, waste-to-energy and wind facilities. (See definitions for more information on specific technology types.) (See QF.)   
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IOU - An abbreviation for Investor-Owned Utility, a form of electric utility owned by a group of investors. Shares of IOUs are traded on public stock markets. Pennsylvania’s IOU’s are: (1) Citizens’ Electric Company; (2) Duquesne Light Company; (3) Electric Division of UGI Utilities, Inc.; (4) Metropolitan Edison Company (General Public Utilities); (5) Pennsylvania Electric Company (General Public Utilities); (6) Pennsylvania Power Company (Ohio Edison); (7) Pennsylvania Power & Light Company; (8) PECO Energy Company; (9) Pike County Light & Power Company (Orange & Rockland); (10) Wellsboro Electric Company; (11) West Penn Power Company (Allegheny Power System).   
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IRP - An acronym for integrated resource planning, a process by which an electric utility plans for its future resource needs. Key characteristics of IRP include a long-term forecast of power needs; a comprehensive evaluation of all resource options, both supply-and demand-side; and public review of the process.   
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Kilowatt (Kw) - A measurement of electric power equal to one thousand watts. Electric power capacity of one kW is sufficient to power 10 100-watt light bulbs.   
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Kilowatt Hour (Kwh) - A measurement of energy and is equal to the energy produced by a 1,000 watt plant in one hour. (Note: A typical electric consumer in Pennsylvania uses 500 kWh per month of electricity.)   
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Load-following - Load-following involves a fixed price based on historic usage patterns.  These contracts provide a fixed price over the term of the contract based on the unique historical load profile, and provide flexibility to allow for minor changes in your usage pattern. The fixed price over the term allows accurate budgeting for electricity costs over the term of the agreement. In signing this contract, the customer is obligated to purchase a certain amount of energy, based on their historical usage pattern over the term of the contract. (according to Epcor's website)   
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Megawatt (MW) - A unit of electric power equal to one million watts, or 1,000 kilowatts.   
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NERC - The abbreviation for the North American Electricity Reliability Council, formed by electric utilities to coordinate, promote and communicate about the reliability of their generation and transmission systems. NERC is comprised of nine regional councils and one affiliate that together encompass most of the electric utility systems in the U.S., Canada and the northern portion of Baja California, Mexico. NERC reviews the overall reliability of existing and planned generation systems, sets reliability standards, and gathers data on demand, availability and performance.   
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Nitrogen Oxides (NOx) - Emissions that contribute to the formation of smog. According to the Pennsylvania Department of Environmental Protection, the state has “hot spots” of ozone contamination that must be reduced in order to comply with federal standards.   
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Non-firm Power - Power supplied or available under a commitment having limited or no assured availability. Non-firm power is basically "spot market" power; it is sold only when available.   
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NUG - The utility acronym for non-utility generator, a facility that produces electric power and sells it to an electric utility under long-term contract. (See IPP, QF.)   
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Offtake Contracts - Contracts to sell the power that a cogeneration plant does not use. Typically, a cogeneration facility might exist to create steam for a given process, and this steam can also be used to power a turbine and create electricity. Often, some of the electricity will also be used on site; however a certain amount will be available for sale. Offtake contracts are contracts with a third party to purchase this available electricity.   
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Performance Criteria - Performance Criteria are built into a power purchase agreement to assure the purchasing utility that an independent energy producer can meet the utility’s requirements at the moment needed. Generally, performance criteria set standards for the reliability of a facility in terms of actual kilowatt-hours of output or hours of availability.   
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PJM - The abbreviation for the Pennsylvania-New Jersey-Maryland integrated power pool which operates as a single system within the Mid-Atlantic area.   
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Power Pools - Groups of utilities which coordinate the planning and operation of their systems in accordance with contractual agreements that establish each utilities responsibilities to the pool.   
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Power Purchase Agreement - The contract entered into by an independent power producer and an electric utility. The power purchase agreement specifies the terms and conditions under which electric power will be generated and purchased. Power purchase agreements require the independent power producer to supply power at a specified price for the life of the agreement.While power purchase agreements vary, their common elements include: specification of the size and operating parameters of the generating facility; milestones, in-service dates and contract terms; price mechanisms; service and performance obligations; dispatchability options; and conditions of termination or default.   
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Project Financing - The most commonly used method to finance the construction of independent power facilities. Typically, the developer pledges the value of the plant and part or all of its expected revenues as collateral to secure financing from private lenders.   
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PUC - An abbreviation for the Public Utility Commission, Pennsylvania’s regulatory body charged with regulating utilities. Members of the PUC regulate all electric, gas, water, cable, and telephone retail rates. The Commission also ensures that utilities are responsive to customers’ needs and service requests, and that service is adequate and reliable.   
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PUHCA - The acronym for the Public Utility Holding Company Act of 1935. PUHCA was enacted by the U.S. Congress to regulate the large interstate holding companies that monopolized the electric utility industry during the early 20th century.   
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PURPA - The acronym for the Public Utility Regulatory Policies Act of 1978. Among other things, PURPA promotes energy efficiency and increased use of alternative energy sources by encouraging companies to build cogeneration facilities and renewable energy projects using windpower, solar energy, geothermal energy, hydropower, biomass, and waste fuels.   
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Qualifying Facility - A category of power generating facility defined by the Public Utility Regulatory Policies Act (PURPA). PURPA created two types of QFs, Qualifying Small Power Producers and Qualifying Cogeneration Facilities.   
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Renewable Energy - Any source of energy that is constantly replenished, as through natural processes. Sunlight, moving water, geothermal springs, biomass and wind are examples of renewable energy resources used to generate electricity. Energy produced from waste , including waste coal, also is classifiable as renewable.   
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Repowered Plant - An existing power facility that has been substantially rebuilt to extend its useful life.   
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Service Territory - The state, area or region served exclusively by a single electric utility.   
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Small Hydro - A type of generating system that converts the mechanical energy of running water into electric energy much the same as any larger traditional hydroelectric system. Small is defined in state and federal law to be less than 80 megawatts.   
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Sulfur Dioxide (SO2) - A by-product of oil and coal burning that contributes to acid rain. According to the Pennsylvania Department of Environmental Resources, Pennsylvania’s emissions of sulfur are currently within federal standards, because of previous PA requirements, but the standards will rise in 1996 and again in 1998.   
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Transmission - The process by which electric power is moved along high voltage power lines.   
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Waste-to-Energy - A technology that uses refuse to generate electricity. In mass burn plants, untreated waste is burned to produce steam, which is used to drive a steam turbine generator. In refuse-derived fuel (RDF) plants, refuse is pretreated to enhance its energy content prior to burning.   
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Wheeling - An industry term for the transmission or movement of power over transmission lines. Electric power can be wheeled from a generating plant directly to a wholesale or retail consumer, or it can be wheeled to the consumer through the interconnect transmission facilities of one or more intermediate utilities.   
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Wind Power - A renewable energy source used to generate electricity by converting wind energy into useful mechanical energy. This mechanical energy is then converted into electricity by the use of an electric generator located within each individual wind machine.    
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3G / 4G - Wireless standards and technology that allow for advanced broadband services (3G – CDMA EVDO/A; HSPA) and much higher capacity and spectral efficiency in a pure IP environment (4G – LTE)   
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Ad-avails - Time allotted for advertising during a program. Depending on whether you are a broadcaster or a distributor of television, ad-avails have different meanings. For broadcasters ad-avails are the available slots on their channel not reserved for programming, but that carry either their own advertising or are sold to a third party. For distributors ad-avails are the slots that have been contractually granted to them by the broadcaster where they can put either advertising for their own services or that of a third party. This amounts to between one and three minutes in each hour of broadcasting. Television distributors may have their own promo (barker) and PPV/NVOD channels with additional ad-avail space.   
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Affiliate Fees - Funds paid monthly by actual viewers through their cable bills. Each basic cable network charges a certain license fee per month to cable and satellite operators, which in turn mark up the fees and then pass them on to subscribers. Also called license fees or subscriber fees.   
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Analog - Any signal that varies continuously, as opposed to a digital signal that contains discreet levels. Or a system or device that operates primarily on analog signals.   
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ARPU: Average Revenue Per Unit - Measures the average monthly revenue generated for each customer unit that a carrier has in its operation.   
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ARPU: Average Revenue Per Unit - Measures the average monthly revenue generated for each customer unit a carrier serves.   
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Aspect Ratio - The ratio between the width and height of the video image. Standard National Television System Committee (NTSC), phase-alternation line (PAL), Advanced Television Systems Committee (ATSC) (standard definition) and digital video broadcasting (DVB) (standard definition) use a 4:3 ratio; ATSC and DVB high-definition formats use a 16:9 format.   
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Average Spectrum Depth - Amount of aggregated spectrum at various frequencies, in MHz, a company owns or a license provides for a given geographic area.    
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Basic Cable - Channels received by a cable subscriber on the basic lineup.   
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Broadband - A response that is the same over a wide range of frequencies and capable of handling frequencies greater than those required for high-grade voice communications. A cable system carrying 10 or more channels.   
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Broadcast Cash Flow Multiple - Transaction value as a multiple of annualized broadcast cash flow.   
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Buyrate - A calculation, expressed as percentage, of PPV program purchases against a defined subscriber universe. If 100 subscribers collectively order 300 movies in a single month, the monthly buyrate is calculated at 300%.   
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Call Letters - The I.D. or official legal name of a radio station, i.e. WCBS-FM.   
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Churn - Level of subscriber disconnections.   
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Churn - Number of wireless subscribers who disconnect service as a percentage of average total wireless subscribers, or as a % of total subscribers at the beginning of a given reporting period, expressed on a monthly basis.   
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Content Delivery Network (CDN) - Network systems that improve the performance and scalability of content delivery.   
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Covered POPs: Wireless Population Covered - Number of people covered by the contours of a carrier’s network and therefore able to get reception and service. This value is typically greater than a carrier’s subscribers and less than a carrier’s licensed population base.   
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CPM - Cost Per Thousand. The cost of a spot/average audience, in (000).   
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Cume: Cumulative Audience - The unduplicated households listening during a specified period of time.   
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Datacasting - A method for extracting digital information stored in a specific pattern on a radio frequency (RF) signal.   
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DBS: Direct Broadcast Satellite - A system for delivering television signals to subscribers directly from a communications satellite to a receiving dish, without the presence of an intermediary network such as a cable TV system. Also called DTH (Direct-To-Home).   
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DCR: Digital Cable Ready - A designation attached to televisions and other consumer electronics devices that have integrated digital set-top-box functionality and do not require a separate standalone box to receive digital cable signals, but do require separable conditional access such as the CableCard.   
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Digital Subscriber Line (DSL) - A technology for enabling high-speed information transfer to end users over ordinary copper telephone lines. xDSL refers to different variations of DSL, such as ADSL, HDSL, iDSL, RADSL and VDSL. DSL offers data rates dependant upon the variant supplied and distance from the nearest DSL service provider’s exchange. Distances are generally limited to the roughly four-mile mark and apply to the actual cable length from the exchange to the end-user premises.   
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Digital video broadcast (DVB) - MPEG-2-based digital television standard that defines formats for cable, satellite, and terrestrial broadcast.    
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Disaggregated License - Indicates that the spectrum block assigned to a given wireless license has been divided into two or more smaller spectrum ranges.   
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DTH: Direct-to-Home - A system for delivering television signals to subscribers directly from a communications satellite to a receiving dish, without the presence of an intermediary network such as a cable TV system. Analogous to DBS (Direct Broadcast Satellite) in the United States.   
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DTT: Digital Terrestrial Television - Free-to-air or pay multichannel programming service in which digital signals are transmitted over the air and received by households via a digital terrestrial television (DTT) set top box or integrated tuner.   
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DVD: Digital Video Disk - A high-capacity, five-inch disk that stores video, sound and data in a digital format agreed upon by consumer electronics industry manufacturers.   
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DVR: Digital Video Recorder - A hard-drive-equipped unit capable of recording and storing video to allow time-shifting functions including pause, rewind and fast-forward. Increasingly the hardware is integrated with a digital set-top box or satellite receiver. Interchangeably referred to as a PVR or Personal Video Recorder.   
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Enhanced-Definition Television (EDTV) - A new DTV product category introduced by the CEA in 2000. Enhanced Definition is a category between SDTV and HDTV covering displays with higher display performance than SDTV, but not falling into the HDTV definition. An EDTV Receiver has active vertical scanning lines of 480p or higher.    
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Fiber to the Home (FTTH) - FTTH refers the installation of optical fiber from a telephone switch directly into the subscriber's home. Extension of the optical network to the home ensures the fastest rate of speed available by the network. FTTH, when it includes optical fiber that is installed directly into a home or enterprise, is also referred to as fiber-to-the-building (FTTB). Another designation is fiber-to-the-premises (FTTP). (See also FTTC and FTTN.)   
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Fixed Wireless - Multichannel pay programming transmitted wirelessly from the service provider to fixed wireless receivers in subscribers’ homes.   
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Format - The program element; i.e. Rock, Jazz, Country, Hip Hop, etc.   
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HD Radio - Technology that concerns the transmitting of digital audio and data signals alongside existing AM and FM analog signals, which allows listeners to enjoy CD-quality sound, eliminating the static and hiss associated with analog broadcasts. It also provides a platform for new wireless data services that, combined with display screens on HD Radio-enabled receivers, will deliver a variety of additional information such as song titles, artist names, traffic updates, weather forecasts, sports scores, etc.   
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HDTV: High-definition television - High-definition video formats that have 16:9 aspect ratio. Generally refers to 1080i or 720p images.    
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High Definition: HD - Television signals with higher resolution than standard definition (SD) signals. The sharper, wider picture typically requires about four times the transmission capacity of standard definition, or as much as 19Mbps. The two most popular formats are 1080i and 720p.   
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High-Definition Television: HDTV - High-definition television has a resolution of approximately twice that of conventional television in both the horizontal (H) and vertical (V) dimensions and a picture aspect ratio (HxV) of 16:9. ITU-R Recommendation 1125 further defines “HDTV quality” as the delivery of a television picture that is subjectively identical with the interlaced HDTV studio standard.   
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Homes Passed - Homes capable of getting cable television.   
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IPTV: Internet Protocol Television - Multichannel pay programming transmitted via packets using internet protocol, which is received and decoded using IPTV set-top boxes.   
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LBS: Location Based Services - Mobile applications that utilize a mobile phone user’s geographic location.   
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Licensed POPs: Wireless Population Licensed - Number of people residing in an area within which a carrier is licensed to provide service using its wireless network. This value is always greater than a carrier’s number of subscribers and generally greater than the number of covered pops.   
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MHz Pops: Population x MHz - A designation referring to both the geographic reach and spectrum density/depth achieved by a carrier in support of delivering mobile services to its customer base.   
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Mobile Video - Video sent to handsets using either Unicast (streaming video over 2.5G/3G voice networks) or Broadcast (one-to-many broadcast technology similar to terrestrial broadcast television) technology or Satellite.   
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MSO: Multi-system operator - In the cable industry, a company that operates two or more cable systems.   
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Multicasting - Generally, multicasting refers to propagation from one source to only a subset of potential destinations. It also means a technique for simultaneously sending multiple DTV programs on a single channel. The frequency used to carry a single analog television program can be used to carry up to six digital programs.    
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Multichannel Affordability - Value derived by dividing individual platform annual video service ARPU by the nation’s GNI PPP (Gross National Income Purchasing Power Parity). Serves as a proxy for how relatively expensive a multichannel service is in a given market.   
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Net Ad Revenue - Advertising revenue paid to a basic cable network after ad agency commissions (generally in the 15% range) are deducted.   
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NVOD: Near Video-on-Demand - A tactic of delivering multiple versions of the same movies or television programs within a dedicated array of channels, allowing viewers to choose from many start times. Sometimes disparagingly dubbed "not video-on-demand" by non-believers.   
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Off-Network Syndication - Syndicated programming that first aired on a broadcast or cable network.   
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On Deck / Off Deck - Mobile phone content accessed through a wireless carrier’s Internet walled garden (on deck) or without using a wireless carrier’s Internet walled garden (off deck).   
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Over the top video - A service referring to streaming or downloading video delivered over a broadband connection. It is called over the top video because it bypasses traditional video service providers and goes directly to the consumer. We consider part of the over-the-top video population anyone who relies solely on a broadband connection to consume video, be it routed to a TV set or watched directly from a PC.    
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Partitioned Market - Indicates that the market area assigned to a given wireless license has been divided into two or more geographic areas.   
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Peer-to-Peer (P2P) - A file-sharing technology that connects users with each other to create a network in which each user's PC functions as a server delivering all or part of a file.    
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Penetration - Number of subscribers expressed as a percentage of homes passed.   
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Podcast - An audio file in a concise form, like an .mp3, created in the form of a radio show with a way to subscribe to it so it is automatically downloaded and delivered to a personal audio device, such as an iPod.   
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PPM: Portable People Meter - A device developed by Arbitron to measure how many people are listening (or at least exposed) to individual radio stations. The PPM is worn like a pager, and detects hidden audio tones within a station or network's audio stream, logging each time it finds such a signal.    
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PPV: Pay-per-View - A secured-signal television program for which the subscriber bears a singular, one-time charge; usually for major sports events or blockbuster films.   
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Rate Conversion - The process of converting from one digital sample rate to another. The digital sample rate for the component digital video format is 13.5MHz. It is often used incorrectly to indicate both resampling of digital rates and encoding/ decoding.   
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Rating - The estimated number of all television households tuned to a specific station (Households/Total TVHH).   
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Regional Bell Operating Company (RBOC) - The regional phone companies formed as a result of the 1984 breakup of AT&T. The original seven “Baby Bells,” as they were called, consisted of US WEST, Ameritech, Bell Atlantic, Bell South, NYNEX, Southwestern Bell and Pac Tel.   
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Set-top - An in-home device for receiving, processing and/or decoding signals. Although they are not always placed literally on top of a TV set, the name lives on.   
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SNL Kagan Global Multichannel Markets - SNL Kagan’s Global Multichannel Markets research is part of the SNL Kagan Information service. Subscribers have access to in-depth analysis of multichannel video economics, including operator profiles, in 75 markets globally. Geographic coverage: Asia Pacific: Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand, , Europe: Austria, Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovak Republic, Spain, Sweden, Switzerland, United Kingdom, Middle East: Bahrain, Egypt, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Palestinian Territories, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, Yemen, Latin America: Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Puerto Rico, Uruguay, Venezuela, North America: Canada, U.S.   
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Social Networks - Online communities tied by specific interests, brands or products.    
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Spot - Another word for a radio/TV commercial usually broken out in 30 to 60 second intervals per ad buyer.   
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Standard-Definition Television (SDTV) - Used to signify a digital television system in which the quality is approximately equivalent to that of NTSC. This equivalent quality may be achieved from pictures sourced at the 4:2:2 level of ITU-R Recommendation 601 and subjected to processing as part of the bit rate compression. The results should be such that when judged across a representative sample of program material, subjective equivalence with NTSC is achieved. Also called standard digital television. A standard definition (SD) television signal is broadcast with interlaced frames and is commonly referred to as “480i” or “576i”. An uncompressed SD signal is 270Mbps.   
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Station Price - Total consideration accrued to the sellers. Includes only the price paid for equity, not assumption of any obligations of the entity sold.   
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Streaming - The act of turning audio into digital data and transmitting it over the Internet.   
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Subscribers (M) - Number of subscribers attributable to the network. For Pay networks, this figure represents Total Combined Units.   
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Tiered Programming - Cable networks offered to a subscriber at an additional charge over and above the basic cable service fee.   
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User-generated content (UGC) - Publicly available media content produced by end users (wikipedia).   
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VOD: Video-on-Demand - Television programming delivered via a discrete signal over which a subscriber has singular control, including full VCR-like storage options. An analogy would be if you could command your local TV station to show whatever program or movie you wanted whenever you wanted to watch it.   
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Wireless Net Adds: Net Additions - Net number (post churn) of new subscribers to wireless communications service within a given reporting period.   
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Book Value - Book value is the accounting value of a firm. It is the total value of the company's assets that shareholders would theoretically receive if a company were liquidated. Book value per share is calculated as common equity divided by shares outstanding as reported by the company.    
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Capitalization Rate - The capitalization rate (or "cap rate") is determined by dividing the net operating income produced by an asset (usually real estate) and its purchase price. Generally, high cap rates indicate greater perceived risk.   
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Cash Flow - An expense or revenue stream that contributes / withdraws from a cash account (reported on the balance sheet) over a set period of time. Cash contributions typically flow from one of these three activities – operating, investing or financing. On the other hand, outflow is typically due to investments or expenses. On a property level, the cash flow is rental revenue from the property minus the property’s operating expenses.   
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Cost of Capital - The cost to a company of raising capital in the form of equity (common or preferred stock) or debt. The cost of equity capital generally is considered to include both the dividend rate as well as the expected equity growth either by higher dividends or growth in stock prices. The cost of debt capital is merely the interest expense on the debt incurred.   
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Debt Maturity Schedule - A Debt Maturity Schedule lists the principal amount of debt maturing (becomes due for repayment) for a particular time period. The Debt maturing is the Principal balance, net of unamortized discounts, of debt due in the current fiscal year. It also includes margin borrowings, notes payable on demand, and lines of credit/facilities due within one year.   
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Dividend Payout Ratio - The percentage of earnings paid out in dividends. Common cash dividends per share declared as a percentage of diluted EPS after extraordinary items. Dividends are generally total cash payments per share over a 12-month period.   
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Earnings Per Share (EPS) - The portion of a company's profit (earnings) allocated to each outstanding share of common stock. EPS serves as an indicator of a company's profitability. EPS and EPS growth is considered by many analysts and investors to be the single most important variable influencing a company’s share price. It is also a major component of the price-to-earnings ratio. EPS is reported on either a ‘diluted’ basis’ or a ‘basic basis,’ which takes into account potentially diluvative securities that a company has issued.   
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EBITDA - Earnings before interest, taxes, depreciation and amortization. EBITDA can be used to analyze and compare profitability between companies and industries because it eliminates the effects of financing and accounting decisions. However, this is a non-GAAP measure that allows a greater amount of discretion as to what is (and is not) included in the calculation.    
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Equitization - The process by which the economic benefits of ownership of a tangible asset are divided among numerous investors and represented in the form of publicly-traded securities.   
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Equity Market Cap - The market value of all outstanding common stock of a company.   
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Equity/Assets - Average common equity divided by average total assets. It is a measure of capital adequacy.   
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Fair Value - The fair value of an asset is an estimate of the price at which the asset could be traded between two willing parties at the current time, and so reflects current expectations of the cash flows and priced risks of the asset.    
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Fair Value Accounting - Fair value accounting involves the recognition of assets and liabilities at fair value, rather than book value (or historical cost). US GAAP currently does not require all assets and liabilities to be carried on the balance sheet at fair value. On the income statement fair value accounting involves the recognition of unrealized gains and losses in net income.   
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Generally Accepted Accounting Principles (GAAP) - The common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by policy boards) and simply the commonly accepted ways of recording and reporting accounting information. GAAP are imposed on companies so that investors have a minimum level of consistency in the financial statements they use when analyzing companies for investment purposes.    
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Interest Coverage Ratio - The Interest Coverage Ratio measures a company’s ability to pay interest on outstanding debt and is determined by dividing a company’s EBIT or EBITDA by its interest expense.   
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Joint Venture (JV) - An agreement between two firms to work together on a project that will allow both firms to benefit from their combined strengths and market power. Joint ventures are used as a means of raising capital and spreading risk.   
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Leverage - The amount of debt in relation to either equity capital or total capital.   
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MSA - Metropolitan Statistical Areas have at least one urbanized area with a population of 50,000 or more, and adjacent territory that has a high degree of economic and social integration with the core as measured by commuting ties.   
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Net Asset Value (NAV) - The net “market value” of all a company’s assets after subtracting all its liabilities and obligations.   
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Net Income - Total revenue, net of total expense, income taxes, minority interest, extraordinary items, and other after-tax adjustments.   
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Net Operating Income (NOI) - A company’s operating income minus operating expenses.   
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Operating Revenue - The sum of net interest income, taxable equivalent adjustment, and non-interest income. Net interest income is interest and dividend income, minus interest expense. Taxable equivalent adjustment is the increase to render income from tax-exempt loans and securities comparable to fully taxed income. Non-interest income includes service fees and trading and other income; it excludes gains/losses on securities transactions.   
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Principle Payment Schedule - This schedule presents the principal balance, net of unamortized discounts, of debt due in the next 5 fiscal years, and thereafter. This should equal the current portion of long-term debt plus short term debt at year ends.   
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Return on Assets (ROA) - Net income divided by average assets. Return on assets is a key ratio of profitability, indicating how efficiently a company's assets are employed.   
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Return on Equity (ROE) - Net income divided by average equity. ROE is a profitability ratio measuring how much profit a company generates with the money shareholders have invested.   
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Securitization - Securitization is the process of financing a pool of similar but unrelated financial assets (usually loans or other debt instruments) by issuing to investors security interests representing claims against the cash flow and other economic benefits generated by the pool of assets.   
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Total Assets - The sum of all assets owned by the company at period-end, includes interest-earning financial instruments — principally commercial, real estate, and consumer loans and leases; investment securities/trading accounts; cash/money market investments; and other owned assets.   
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Total Market Cap - The total market value of a company’s outstanding shares. Market cap is calculated by multiplying a company’s outstanding shares by the current market price of one share.   
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Total return - A stock’s dividend income plus capital appreciation, before taxes and commissions.   
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Value at Risk (VaR) - A technique used to estimate the probability of portfolio losses based on the statistical analysis of historical price trends and volatilities. VaR is commonly used by banks, security firms and companies that trade commodities to measure the market risk of their asset portfolios. VaR is an important consideration when firms make trading or hedging decisions   
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Volatility - Most frequently, volatility refers to the fluctuation of a stock’s market price over time and is often used in order to quantify the risk.   
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