Also, the company may begin to incur additional stock-based compensation expenses in 2013 or 2014 mainly related to restricted stock granted in early 2012 that vests upon achievement of performance criteria. The company expects to begin recording the expense for the grants when management determines it is probable the goal will be achieved. The company expects to record a cumulative catch-up of stock-based compensation expense of approximately $10 million to $15 million in the initial quarter that it is deemed probable that the profitability goals will be achieved, and approximately $2 million to $3 million per quarter thereafter for a total incremental expense of approximately $24 million. The adjusted EBITDA and non-GAAP earnings per diluted share in the Company's outlook do not include stock compensation expense and other items.
The preceding forward-looking statements reflect CoStar's expectations as of February 27, 2013, including forward-looking non-GAAP financial measures on a consolidated basis – including LoopNet and related costs. We are not able to forecast with certainty whether or when certain events, such as acquisition-related costs, restructuring, settlements or impairments will occur in any given quarter. Given the risk factors, uncertainties and assumptions discussed above, actual results may differ materially. Other than in publicly available statements, the Company does not intend to update its forward-looking statements until its next quarterly results announcement.
Reconciliation of non-GAAP net income, EBITDA, adjusted EBITDA and all of the disclosed non-GAAP financial measures to their GAAP basis results are shown in detail below, along with definitions for those terms.
Non-GAAP Financial MeasuresFor information regarding the purpose for which management uses the non-GAAP financial measures disclosed in this release and why management believes they provide useful information to investors regarding the Company's financial condition and results of operations, please refer to the Company's latest periodic report. EBITDA is a non-GAAP financial measure that represents GAAP net income attributable to CoStar Group, Inc. before (i) interest income (expense), (ii) provision for income taxes, and (iii) depreciation and amortization.
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