| Our investor and analyst presentations include the non-generally accepted accounting principle ("non-GAAP") financial measures of margin of the
Upstream segment, EBITDA, EBITDA excluding gains from asset sales and ownership interests and income from continuing operations excluding gains from
asset sales and ownership interests. These presentations provide reconciliations of these non-GAAP financial measures to their most directly comparable
financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP").
Our non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income or income from continuing operations,
operating income, cash flow from operating activities or any other measure of financial performance calculated and presented in accordance with GAAP.
Our non-GAAP financial measures may not be comparable to similarly-titled measures of other entities because other entities may not calculate such
measures in the same manner as we do. |
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| Margin of the Upstream Segment |
| Margin of the Upstream Segment |
We evaluate Upstream segment performance based on the non-GAAP financial measure of margin. Margin is calculated as revenues generated from the
sale of crude oil and lubrication oil, and transportation of crude oil, less the costs of purchases of crude oil and lubrication oil, in each case prior
to the elimination of intercompany sales, revenues and purchases between wholly owned subsidiaries. We believe margin is a more meaningful measure of
financial performance than sales and purchases of crude oil and lubrication oil due to the significant fluctuations in sales and purchases caused by
variations in the level of marketing activity and prices for products marketed. Additionally, we use margin internally to evaluate the financial
performance of the Upstream segment because it excludes expenses that are not directly related to the marketing and sales activities being evaluated. |
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| EBITDA Measures |
| EBITDA Measures |
We define EBITDA as net income plus interest expense - net, income tax expense, depreciation and amortization, and a pro-rata portion, based on our equity ownership, of the interest expense and depreciation and amortization of each of our joint ventures. We have included EBITDA and EBITDA excluding gains from assets sales and ownership interests as supplemental disclosures because we believe they are used by our investors as supplemental financial measures in the evaluation of our business.
We believe EBITDA and EBITDA excluding gains from asset sales and ownership interests provide useful information regarding the performance of our assets without regard to financing methods, capital structures or historical costs basis. As a result, these measures provide investors with a helpful tool for comparing the operating performance of our assets with the performance of other companies that have different financing and capital structures. EBITDA multiples are also used by our investors in assisting in the valuation of our limited partners' equity.
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| Income from continuing operations excluding certain gains. |
| Income from continuing operations excluding certain gains. |
We present the measure of income from continuing operations excluding gains on asset sales and ownership interests in analyst and investor presentations because we believe this supplemental measure is useful to our investors in assessing the results of operations from our continuing assets.
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