HollyFrontier 2014 Annual Report Download - page 56

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Table of Content
48
measure of liquidity. EBITDA is not necessarily comparable to similarly titled measures of other companies. EBITDA is presented
here because it is a widely used financial indicator used by investors and analysts to measure performance. EBITDA is also used
by our management for internal analysis and as a basis for financial covenants.
Set forth below is our calculation of EBITDA.
Years Ended December 31,
2014 2013 2012
(In thousands)
Net income attributable to HollyFrontier stockholders $ 281,292 $ 735,842 $ 1,727,172
Add income tax provision 141,172 391,576 1,027,962
Add interest expense (1) 51,323 90,159 104,186
Subtract interest income (4,430) (5,556) (4,786)
Add depreciation and amortization 363,381 303,446 242,868
EBITDA $ 832,738 $ 1,515,467 $ 3,097,402
(1) Includes loss on early extinguishment of debt of $7.7 million and $22.1 million for the years ended December 31, 2014 and 2013, respectively.
Reconciliations of refinery operating information (non-GAAP performance measures) to amounts reported under generally
accepted accounting principles in financial statements.
Refinery gross margin and net operating margin are non-GAAP performance measures that are used by our management and others
to compare our refining performance to that of other companies in our industry. We believe these margin measures are helpful to
investors in evaluating our refining performance on a relative and absolute basis.
Refinery gross margin per barrel is the difference between average net sales price and average cost of products per barrel of
produced refined products. Net operating margin per barrel is the difference between refinery gross margin and refinery operating
expenses per barrel of produced refined products. These two margins do not include the non-cash effects of lower of cost or market
inventory valuation adjustments or depreciation and amortization. Each of these component performance measures can be
reconciled directly to our consolidated statements of income.
Other companies in our industry may not calculate these performance measures in the same manner.
Refinery Gross and Net Operating Margins
Below are reconciliations to our consolidated statements of income for (i) net sales, cost of products (exclusive of lower of cost
or market inventory valuation adjustment) and operating expenses, in each case averaged per produced barrel sold, and (ii) net
operating margin and refinery gross margin. Due to rounding of reported numbers, some amounts may not calculate exactly.