Disclosure Regarding Non-GAAP Financial Measures
EBITDA is defined as net income plus interest expense and other financing costs, loss on debt extinguishment, loss on interest rate swaps, income tax expense and depreciation and amortization, net of interest income. The Partnership calculates cash available for distribution as EBITDA plus non-cash compensation expense, return of cash reserves for working capital and less maintenance capital expenditures, net cash interest expense and other financing costs paid and cash reserves for working capital. The Partnership presents EBITDA because it is a material component in its calculation of cash available for distribution. EBITDA and cash available for distribution are used as supplemental financial measures by management and by external users of its financial statements, such as investors and commercial banks, to assess:
- the financial performance of the Partnership’s assets without regard to financing methods, capital structure or historical cost basis; and
- Rentech Nitrogen’s operating performance and return on invested capital compared to those of other publicly traded limited partnerships and other public companies, without regard to financing methods and capital structure.
EBITDA and cash available for distribution should not be considered alternatives to net income, operating income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and cash available for distribution may have material limitations as performance measures because they exclude items that are necessary elements of Rentech Nitrogen’s costs and operations. In addition, EBITDA and cash available for distribution presented by other companies may not be comparable to Rentech Nitrogen’s presentation, since each company may define these terms differently.
The table below reconciles EBITDA to net income for the three and nine months ended September 30, 2012 and 2011 (stated in thousands).
|Three Months Ended,||Nine Months Ended,|
|September 30,||September 30,|
|Loss on debt extinguishment||-||-||-||9,223|
|Loss on interest rate swaps||327||-||907||-|
|Income tax expense||-||2,553||-||14,643|
|Depreciation and amortization||3,679||2,514||9,456||7,419|
|July 1, 2012 -|
|September 30, 2012|
|Plus: Non-cash compensation expense||1,124|
|Plus: Return of cash reserves for working capital||733|
|Less: Maintenance capital expenditures||(1,726||)|
|Less: Net interest expense and other financing costs||(30||)|
|Cash available for distribution||$||32,980|
|Cash available for distribution, per unit||$||0.85|
|Common units outstanding||38,800|
|For the Twelve|
|December 31, 2012|
|Net income, in excess of||$||
|Net interest expense||
|Depreciation and amortization||12,700|
|EBITDA, in excess of||$||130,500|
|Plus: Non-cash compensation expense||$||2,000|
|Less: Maintenance capital expenditures||(9,000||)|
|Less: Net cash interest expense and other financing costs||(1,000||)|
|Plus: Distribution of cash reserves for working capital 1||5,400|
|Cash available for distribution, in excess of||$||127,900|
|Cash available for distribution, per unit, in excess of||$||3.30|
|Common units outstanding 2||38,800|
1 Approximately $3.8 million is expected to be distributed in the fourth quarter.
2 Includes 538,793 units issued in connection with the acquisition of the Pasadena facility.
|2013 Estimated Plant EBITDA||$||25|