PBF Energy 2012 Annual Report Download - page 72

Paulsboro Refining Business—PBF LLC’s Predecessor
Period from
January 1, 2010
through
December 16, 2010
(in thousands)
Operating revenues ............................................................ $4,708,989
Cost of sales, excluding depreciation .............................................. 4,487,825
Non-GAAP gross margin (1) .................................................... 221,164
Operating expenses, excluding depreciation ......................................... 259,768
General and administrative expenses .............................................. 14,606
Asset impairment loss .......................................................... 895,642
Depreciation and amortization expense ............................................ 66,361
Operating income (loss) ........................................................ (1,015,213)
Interest and other income, net .................................................... 500
Income (loss) before income tax expense (benefit) ................................... (1,014,713)
Income tax expense (benefit) .................................................... (322,962)
Net income (loss) .............................................................. $ (691,751)
Gross margin ................................................................. $ (90,704)
(1) Non-GAAP gross margin is defined as gross margin excluding direct operating expenses and
depreciation expense related to the refineries. We believe non-GAAP gross margin is an important
measure of operating performance and provides useful information to investors because it is a better
metric comparison for the industry refining margin benchmarks, as the refining margin benchmark do
not contemplate a charge for operating expenses and depreciation expense. In order to assess our
operating performance, we compare our non-GAAP gross margin (revenue less cost of sales) to
industry refining margin benchmarks and crude oil prices as shown in the table below.
Non-GAAP gross margin should not be considered an alternative to gross margin, operating income,
net cash flows from operating activities or any other measure of financial performance or liquidity
presented in accordance with GAAP. Non-GAAP gross margin presented by other companies may not
be comparable to our presentation, since each company may define this term differently. The following
table presents a reconciliation of non-GAAP gross margin to the most directly comparable GAAP
financial measure, gross margin, on a historical basis, as applicable, for each of the periods indicated:
Period from
January 1, 2010
through
December 16, 2010
(in thousands)
Reconciliation of gross margin to Non-GAAP gross margin:
Gross margin ........................................ $(90,704)
Add:
Refinery operating expenses ........................ 259,768
Refinery depreciation expense ...................... 52,100
Non-GAAP gross margin .............................. $221,164
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