EX-99.1 2 v343572_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

 

 

Royal Gold Reports Results for Third Quarter Fiscal Year 2013

 

·Royalty revenue of $74.2 million, a 7% increase year-over-year
·Operating cash flow totaled $68.1 million, a 43% increase year-over-year

 

DENVER, COLORADO. MAY 2, 2013: ROYAL GOLD, INC. (NASDAQ:RGLD; TSX: RGL) today announced net income attributable to Royal Gold stockholders of $6.5 million, or $0.10 per basic share, on royalty revenue of $74.2 million for the third quarter of fiscal 2013. This compares to net income attributable to Royal Gold stockholders of $26.0 million, or $0.44 per basic share, on royalty revenue of $69.6 million for the third quarter of fiscal 2012.

 

Results for the quarter were impacted by two items. First, a non-cash loss was recognized on available-for-sale securities of $12.1 million associated with the common shares of Seabridge Gold, Inc. that were acquired as part of the June 2011 transaction regarding the Kerr-Sulphurets-Mitchell Project. Second, a higher income tax expense of $6.9 million was recognized during the quarter related to adjustments resulting from the filing of our June 30, 2012 income tax return. The after tax effect of the securities loss and tax adjustments on basic earnings per share was $0.17 and $0.10, respectively. Excluding these items, net income attributable to Royal Gold stockholders would have been $24.3 million, or $0.37 per basic share for the fiscal third quarter.

 

For the nine-month period ended March 31, 2013, royalty revenue was a record $231.9 million and net income attributable to Royal Gold stockholders was $58.5 million, or $0.93 per basic share. This compares to nine-month royalty revenue of $202.9 million and net income attributable to Royal Gold stockholders of $71.9 million, or $1.27 per basic share, for the nine-month period ended March 31, 2012. The after tax effect of the securities loss and tax adjustments (described above) on net income attributable to Royal Gold stockholders for the nine-month period ended March 31, 2013, was $12.1 million, or $0.17 per basic share, and $6.9 million, or $0.11 per basic share, respectively. Excluding these items, net income attributable to Royal Gold stockholders for the nine-month period ended March 31, 2013, would have been $76.3 million, or $1.22 per basic share.

 

1
 

 

Adjusted EBITDA1 for the third quarter of fiscal 2013 was $66.1 million representing 89% of revenue, compared to Adjusted EBITDA of $63.6 million or 91% of revenue for the prior year period. Cash flow from operations for the quarter was $68.1 million, or $1.05 per basic share, compared with $47.5 million, or $0.81 basic per share, for the third quarter of fiscal 2012.

 

The 7% increase in revenue for the quarter was largely driven by increased production at Andacollo and Holt, and the continued ramp up at Wolverine. These increases were partially offset during the period by production declines at Peñasquito and Voisey’s Bay, as well as lower gold and other metal prices. The average price of gold for the quarter was $1,632 per ounce compared with $1,691 per ounce for the comparable period, a decrease of 3%.

 

As of March 31, 2013, the Company had a working capital surplus of $727.4 million. Current assets were $749.0 million (including $673.1 million in cash and equivalents), compared to current liabilities of $21.6 million, resulting in a current ratio of approximately 35 to 1. In addition to available working capital, the Company has $350 million available under its revolving line of credit.

 

Tony Jensen, President and CEO, commented, “Achieving another quarter of strong royalty revenue despite lower year-over-year average gold prices, highlights the strength of our royalty portfolio. We expect to add Mt. Milligan to our producing portfolio of assets in the near future as production is scheduled to commence in the third calendar quarter of this year. In addition, our strong financial position allows us to seek new business opportunities as we look to expand our high quality portfolio.”

 

PROPERTY HIGHLIGHTS

 

Highlights at certain of the Company’s principal producing and development properties during the quarter ended March 31, 2013 are listed below. We advise readers to refer to the public statements of the operators of each of these properties for more complete information.

 

Producing Properties

 

Andacollo – Teck reported that average daily throughput for the quarter was about 47,000 tonnes. Production increased primarily due to higher mill throughput and higher ore grades. Over the past few quarters, Andacollo has established steady state operations.

 

Holt – St Andrew Goldfields reported that progress continues on mine development that should allow for an incremental increase in production by the end of calendar 2013.

 

 

1The Company defines Adjusted EBITDA, a non-GAAP financial measure, as net income plus depreciation, depletion and amortization, non-cash charges, income tax expense, interest and other expense, and any impairment of mining assets, less non-controlling interests in operating income from consolidated subsidiaries, interest and other income, and any royalty portfolio restructuring gains or losses (see Schedule A).

 

2
 

 

Mulatos – Alamos reported that increased gold production was primarily attributable to higher crusher throughput and a full quarter of production from the Escondida high-grade zone that was in commissioning in the prior year.

 

Peñasquito – Goldcorp’s annual guidance for Peñasquito anticipated lower production in the first half of calendar 2013 as the mine moves from a lower grade portion of the pit to higher grade ore. Goldcorp also reported that ongoing studies to develop a long-term water strategy continues to progress and that they have identified a new water source within their current permitted basin that has the potential to supply sufficient water to continue the plant ramp-up to full design capacity. Goldcorp noted that current water availability is expected to be sufficient to achieve calendar 2013 production guidance of 360,000 to 400,000 ounces of gold.

 

Robinson – KGHM reported that copper production increased due to improved mill recovery and higher productivity in the mine.

 

Voisey’s Bay – Vale reported that copper production was impacted during the quarter due primarily to feed availability as a result of a crusher failure and a severe snow storm that delayed haulage from the mine.

 

In late March 2013, the Government of Newfoundland and Labrador announced amendments to their Voisey’s Bay Development Agreement including a commitment from Vale to pursue underground mining to extend the mine life. The agreement also allows Vale to continue processing concentrate outside of the province while construction is being finalized at the Long Harbour processing plant.

 

Wolverine – Yukon Zinc continues to make production improvements at the Wolverine mine. They have reported that process circuit modifications and the integration of new equipment have enabled these improvements.

 

Development Properties

 

Mt. Milligan – As of the end of December 2012, Thompson Creek estimated that project completion was at 81%. They also reported that the Mt. Milligan project remains on schedule with initial production to commence in the third calendar quarter of 2013, followed by commercial production expected in the fourth calendar quarter of 2013.

 

Pascua-Lama – As of March 31, 2013, Barrick reported it had spent approximately $4.8 billion on the construction of the Pascua-Lama project. About 70% of the structural steel was erected for the process plant facility, 65% of the concrete has been poured, 55% of earthworks was completed, and the ore conveyance tunnel was approximately 80% complete.

 

3
 

 

During the fourth quarter of calendar 2012, Barrick reported that pre-stripping activities in Chile were halted to address increased dust in the open pit area and that the project has since strengthened dust mitigation and control measures. In addition, regulatory restrictions have also been placed on the project due to the need to repair and improve certain aspects of the water management system in Chile. Completion of measures to address these aspects is targeted for the first quarter of calendar 2014.

 

Subsequently, Barrick suspended construction work on the Chilean side of the project in April in response to a preliminary injunction issued by a Chilean court. The action alleges non-compliance with the environmental requirements of the project’s Chilean environmental approval. Construction activities in Argentina, where the majority of the project’s critical infrastructure is located, including the process plant and tailings storage facility, were not affected.

 

Given these pending regulatory and legal issues, Barrick stated on April 24, 2013, that they were unable to fully assess the impact on the capital budget, operating costs and schedule of the project.

 

Additional Property Information

 

Third quarter fiscal 2013 production and revenue for the Company’s principal interests are shown in Table 1 and historical production data is shown in Table 2. For more detailed information about each of our principal interests, please refer to the Company’s most recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC and available on the SEC’s website located at www.sec.gov, or our website located at www.royalgold.com.

 

 

CORPORATE PROFILE

 

Royal Gold is a precious metals royalty company engaged in the acquisition and management of precious metals royalties and similar interests. The Company owns interests on 205 properties on six continents, including interests on 36 producing mines and 23 development stage projects. Royal Gold is publicly traded on the NASDAQ Global Select Market under the symbol “RGLD,” and on the Toronto Stock Exchange under the symbol “RGL.” The Company’s website is located at www.royalgold.com.

 

For further information, please contact:

 

Karen Gross

Vice President and Corporate Secretary

(303) 575-6504

 

Note: Management’s conference call reviewing the third quarter results will be held today at 10:00 a.m. Mountain Time (noon Eastern Time) and will be available by calling (800) 603-2779 (North America) or (973) 200-3960 (international), access #85827550. The call will be simultaneously broadcast on the Company’s website at www.royalgold.com under “Events and Presentations” in the Investor section of the website. A replay of this webcast will be available on the Company’s website approximately two hours after the call ends.

 

4
 

________________________

 

Cautionary “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995:  With the exception of historical matters, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projections or estimates contained herein. Such forward-looking statements include statements about the Company’s expectation of adding revenue from Mt. Milligan in the near future; that production at Mt. Milligan will commence in the third calendar quarter with commercial production in the fourth calendar quarter; that our strong financial position will allow us to seek new business opportunities and expand our high quality portfolio; the impact on the Pascua-Lama project of pending regulatory issues and the preliminary injunction suspending construction work on the Chilean side of the project; and the operators’ expectation of production, construction, mine development, reaching design capacity, throughput, water availability and other developments. Factors that could cause actual results to differ materially from the projections include, among others, precious metals, copper and nickel prices; performance of and production at the Company's royalty properties; decisions and activities of the operators of the Company's various properties; unanticipated grade, geological, metallurgical, processing or other problems the operators of the mining properties may encounter; delays in the operators securing or their inability to secure necessary governmental permits; changes in operator’s project parameters as plans continue to be refined; economic and market conditions; the ability of the various operators to bring projects into production as expected; regulatory and legal issues; the suspension of certain activities on the Pascua-Lama project; and other subsequent events; as well as other factors described in the Company's Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and other filings with the Securities and Exchange Commission. Most of these factors are beyond the Company’s ability to predict or control. The Company disclaims any obligation to update any forward-looking statement made herein. Readers are cautioned not to put undue reliance on forward-looking statements.

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TABLE 1

Third Quarter Fiscal 2013

Royalty Production and Revenue for Principal Royalty Interests

 

            THREE MONTHS ENDED  THREE MONTHS ENDED
            MARCH 31, 2013  MARCH 31, 2012
PROPERTY  ROYALTY  OPERATOR  METAL(S)  Royalty Revenue
($ millions)		   Reported Production 1  Royalty Revenue
($ millions)		   Reported Production 1
Andacollo 2,3  75% NSR  Teck  Gold   23.11   18,966 oz.   16.78   13,174 oz.
                          
Voisey's Bay 3   2.7% NSR  Vale  Nickel
Copper		   9.20   44.7M lbs.
15.6M lbs.		   10.73   50.9M lbs.
9.7M lbs.
                          
Peñasquito 3  2.0% NSR  Goldcorp  Gold
Silver
Lead
Zinc		   5.37   68,214 oz.
3.9M oz.
24.2M lbs.
50.4M lbs.		   9.16   87,517 oz.
6.6M oz.
52.4M lbs.
75.9M lbs.
                          
Holt  0.00013 x quarterly average gold price  St Andrew Goldfields  Gold   5.17   14,950 oz.   3.28   8,839 oz.
                          
Mulatos 4  1.0% to 5.0% NSR  Alamos  Gold   4.79   59,489 oz.   4.23   50,493 oz.
                          
Robinson 3  3.0% NSR  KGHM  Gold
Copper		   2.74   10,036 oz.
24.8M lbs.		   2.61   5,673 oz.
23.8M lbs.
                          
Canadian Malartic 5  1.0% to 1.5% NSR  Osisko  Gold   2.0   88,053 oz.   2.35   90,845 oz.
                          
Leeville  1.8% NSR  Newmont  Gold   1.72   56,697 oz.   1.96   64,291 oz.
                          

Cortez 6

 

  GSR1 and GSR2
GSR3
NVR1		  Barrick  Gold   2.11   16,041 oz.   2.60   23,362 oz.
                          
Las Cruces 3  1.5% NSR  Inmet  Copper   2.07   38.3M lbs.   1.71   29.9M lbs.
                          
Wolverine 3,7  0.0% to
9.445% NSR		  Yukon Zinc  Gold
Silver		   2.28   4,063 oz.
903,486 oz.		   0.85   393 oz.
326,017 oz.
                          
Dolores
  3.25% NSR
2.0% NSR		  Pan American Silver  Gold
Silver		   1.05   12,304 oz.
670,965 oz.		   1.35   14,510 oz.
858,600 oz.
                          
Other Royalty Properties 8        Various   12.56   N/A   12.03   N/A
Total Royalty Revenue         74.17       69.64    

 

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FOOTNOTES

 

1Reported production relates to the amount of metal sales that are subject to our royalty interests for the periods ended March 31, 2013 and March 31, 2012, as reported to us by the operators of the mines.

 

2The royalty rate is 75% until 910,000 payable ounces of gold have been produced – 50% thereafter. There have been approximately 155,000 cumulative payable ounces produced as of March 31, 2013. Gold is produced as a by-product of copper.

 

3Revenues consist of provisional payments for concentrates produced during the current period and final settlements for prior production periods.

 

4The Company’s royalty is subject to a 2.0 million ounce cap on gold production. There have been approximately 1.1 million ounces of cumulative production, as of March 31, 2013. NSR sliding-scale schedule (price of gold per ounce – royalty rate): $0.00 to $299.99 – 1.0%; $300 to $324.99 – 1.50%; $325 to $349.99 – 2.0%; $350 to $374.99 – 3.0%; $375 to $399.99 – 4.0%; $400 or higher – 5.0%.

 

5NSR sliding-scale schedule (price of gold per ounce – royalty rate): $0.00 to $350 – 1.0%; above $350 – 1.5%.

 

6Royalty percentages: GSR1 and GSR2 – 0.40 to 5.0% (sliding-scale); GSR3 – 0.71%; NVR1 – 0.39%.

 

7Gold royalty rate is based on the price of silver per ounce. NSR sliding-scale schedule (price of silver per ounce – royalty rate): Below $5.00 – 0.0%; $5.00 to $7.50 – 3.778%; >$7.50 – 9.445%.

 

8“Other” includes all of the Company’s non-principal producing royalties for the periods ended March 31, 2013 and 2012.  Individually, no royalty included within “Other” contributed greater than 5% of our total royalty revenue for any of the periods.

 

 

7
 

 

TABLE 2

Historical Production

 

           

REPORTED PRODUCTION 1

FOR THE QUARTER ENDED

PROPERTY 2  ROYALTY  OPERATOR  METAL(S)  March 31, 2013  December 31, 2012  September 30,
2012		  June 30, 2012  March 31, 2012
Andacollo  75% NSR  Teck  Gold  18,966 oz.  18,015 oz.  15,937 oz.  11,908 oz.  13,174 oz.
                         
Canadian Malartic  1.0% to 1.5% NSR  Osisko  Gold  88,053 oz.  96,276 oz.  91,737 oz.  91,734 oz.  90,845 oz.
                         
Cortez
  GSR1 and
GSR2
GSR3
NVR1		  Barrick  Gold  16,041 oz.  18,232 oz.  25,751 oz.  26,845 oz.  23,362 oz.
                         
Dolores
  3.25% NSR
2.0% NSR		  Pan American Silver  Gold
Silver		  12,304 oz.
670,965 oz.		  14,976 oz.
854,739 oz.		  13,244 oz.
773,369 oz.		  10,085 oz.
643,972 oz.		  14,510 oz.
858,600 oz.
                         
Holt  0.00013 x quarterly average gold price  St Andrew Goldfields  Gold  14,950 oz.  15,076 oz.   12,870 oz.  11,469 oz.  8,839 oz.
                         
Las Cruces  1.5% NSR  Inmet  Copper  38.3M lbs.  38.3M lbs.  46.2M lbs.  37.3M lbs.  29.9M lbs.
                         
Leeville  1.8% NSR  Newmont  Gold  56,697 oz.  69,754 oz.  68,026 oz.  36,582 oz.  64,291 oz.
                         
Mulatos  1.0% to 5.0% NSR  Alamos  Gold  59,489 oz.  61,311 oz.  42,310 oz.  46,077 oz.  50,493 oz.
                         
Peñasquito  2.0% NSR  Goldcorp  Gold
Silver
Lead
Zinc		  68,214 oz.
3.9M oz.
24.2M lbs.
50.4M lbs.		  91,017 oz.
4.6M oz.
23.7M lbs. 73.6M lbs.		  131,239 oz.
7.4M oz.
41.7M lbs. 96.6M lbs.		  90,554 oz.
6.0M oz.
42.2M lbs.
90.8M lbs.		  87,517 oz.
6.6M oz.
52.4M lbs.
75.9M lbs.
                         
Robinson   3.0% NSR  KGHM  Gold
Copper		  10,036 oz.
24.8M lbs.		  11,603 oz.
41.1M lbs.		  9,072 oz.
36.9M lbs.		  9,191 oz.
32.5M lbs.		  5,673 oz.
23.8M lbs.
                         
Voisey's Bay  2.7% NSR  Vale  Nickel
Copper		  44.7M lbs.
15.6M lbs.		  28.8M lbs.
31.2 M lbs.		  33.9M lbs.
43.6 M lbs.		  30.6M lbs.
2.9M lbs.		  50.9M lbs.
9.7M lbs.
                         
Wolverine  0.0% to
9.445% NSR		  Yukon Zinc  Gold
Silver		  4,063 oz.
903,486 oz.		  3,203 oz.
742,874 oz.		  1,200 oz.
494,496 oz.		  842 oz.
338,736 oz.		  393 oz.
326,017 oz.

   

1Reported production relates to the amount of metal sales that are subject to our royalty interests for the stated period, as reported to us by the operators of the mines.

 

2See individual property footnotes on page 7.

 

8
 

 

ROYAL GOLD, INC.

Consolidated Balance Sheets

(Unaudited, in thousands except share data)

 

   March 31,   June 30, 
   2013   2012 
ASSETS        
Cash and equivalents  $673,103   $375,456 
Royalty receivables   59,019    53,946 
Income tax receivable   10,379    11,046 
Prepaid expenses and other current assets   6,484    4,760 
   Total current assets   748,985    445,208 
           
Royalty interests in mineral properties, net   2,104,043    1,890,988 
Available-for-sale securities   14,154    15,015 
Other assets   26,678    21,834 
   Total assets  $2,893,860   $2,373,045 
           
LIABILITIES          
Accounts payable  $2,446   $2,615 
Dividends payable   13,009    8,947 
Other current liabilities   6,188    3,647 
   Total current liabilities   21,643    15,209 
           
Debt   299,961    293,248 
Net deferred tax liabilities   172,209    178,716 
Uncertain tax positions   20,172    19,469 
Other long-term liabilities   2,016    2,974 
   Total liabilities   516,001    509,616 
           
Commitments and contingencies          
           
EQUITY          
Preferred stock, $.01 par value, 10,000,000 shares authorized; and 1 share issued   -    - 
Common stock, $.01 par value, 100,000,000 shares authorized; and 64,170,310 and 58,614,221 shares outstanding, respectively   642    586 
Exchangeable shares, no par value, 1,806,649 shares issued, less 1,139,361 and 1,007,823 redeemed shares, respectively   29,367    35,156 
Additional paid-in capital   2,140,410    1,656,357 
Accumulated other comprehensive (loss) income   (113)   (13,763)
Accumulated earnings   183,586    160,123 
Total Royal Gold stockholders’ equity   2,353,892    1,838,459 
Non-controlling interests   23,967    24,970 
   Total equity   2,377,859    1,863,429 
   Total liabilities and equity  $2,893,860   $2,373,045 

  

9
 

 

ROYAL GOLD, INC.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited, in thousands except share data)

 

   Three Months Ended   Nine Months Ended 
   March 31,   March 31,   March 31,   March 31, 
   2013   2012   2013   2012 
Royalty revenues  $74,166   $69,638   $231,898   $202,944 
                     
Costs and expenses                    
General and administrative   7,163    4,431    18,953    15,786 
Production taxes   2,422    2,593    7,098    7,690 
Depreciation, depletion and amortization   21,649    19,721    64,269    58,360 
Restructuring on royalty interests in mineral properties   -    -    -    1,328 
Total costs and expenses   31,234    26,745    90,320    83,164 
                     
Operating income   42,932    42,893    141,578    119,780 
                     
Loss on available-for-sale securities   (12,121)   -    (12,121)   - 
Interest and other income   129    476    268    3,798 
Interest and other expense   (5,757)   (1,552)   (18,914)   (4,939)
Income before income taxes   25,183    41,817    110,811    118,639 
                     
Income tax expense   (18,286)   (14,864)   (51,062)   (41,297)
Net income   6,897    26,953    59,749    77,342 
Net income attributable to non-controlling interests   (433)   (954)   (1,299)   (5,438)
Net income attributable to Royal Gold stockholders  $6,464   $25,999   $58,450   $71,904 
                     
Net income  $6,897   $26,953   $59,749   $77,342 
Adjustments to comprehensive income, net of tax                    
Unrealized change in market value of available for sale securities   (71)   3,904    (67)   (8,357)
Realized loss on available-for-sale securities   10,246    -    13,716    - 
Comprehensive income   17,072    30,857    73,398    68,985 
Comprehensive income attributable to non-controlling interests   (433)   (954)   (1,299)   (5,438)
Comprehensive income attributable to Royal Gold stockholders  $16,639   $29,903   $72,099   $63,547 
                     
Net income per share available to Royal Gold common stockholders:                    
                     
Basic earnings per share  $0.10   $0.44   $0.93   $1.27 
Basic weighted average shares outstanding   64,837,598    58,953,216    62,723,061    56,486,455 
Diluted earnings per share  $0.10   $0.44   $0.93   $1.26 
Diluted weighted average shares outstanding   64,994,517    59,169,314    62,917,454    56,738,805 
Cash dividends declared per common share  $0.20   $0.15   $0.55   $0.41 

 

10
 

 

ROYAL GOLD, INC.

Consolidated Statements of Cash Flows

(Unaudited, in thousands)

 

   Three Months Ended   Nine Months Ended 
   March 31,   March 31,   March 31,   March 31, 
   2013   2012   2013   2012 
Cash flows from operating activities:                
Net income  $6,897   $26,953   $59,749   $77,342 
Adjustments to reconcile net income to net cash provided by operating activities:                    
                     
Depreciation, depletion and amortization   21,649    19,721    64,269    58,360 
Loss on available-for-sale securities   12,121    -    12,121    - 
Amortization of debt discount   2,265    -    6,713    - 
Non-cash stock-based compensation expense   1,909    1,494    5,808    5,560 
Restructuring on royalty interests in mineral properties   -    -    -    1,328 
Gain on distribution to non-controlling interest   (74)   (441)   (162)   (3,725)
Tax benefit of stock-based compensation exercises   -    (231)   (1,214)   (3,317)
Deferred tax benefit   (3,666)   133    (5,832)   (714)
Changes in assets and liabilities:                    
Royalty receivables   11,735    2,435    (5,073)   (13,258)
Prepaid expenses and other assets   15,435    (1,257)   (4,223)   128 
Accounts payable   79    (122)   (581)   (316)
Income tax payable (receivable)   (3,175)   1,214    (1,349)   3,161 
Other liabilities   2,913    (2,433)   2,287    (1,647)
Net cash provided by operating activities  $68,088   $47,466   $132,513   $122,902 
                     
Cash flows from investing activities:                    
Acquisition of royalty interests in mineral properties   (62,049)   (45,480)   (277,081)   (193,662)
Proceeds on sale of Inventory  - restricted   119    672    237    5,514 
Other   (17)   (29)   (55)   (157)
Net cash (used in) investing activities  $(61,947)  $(44,837)  $(276,899)  $(188,305)
                     
Cash flows from financing activities:                    
Proceeds from the issuance of common stock   (5)   268,523    473,771    271,440 
Borrowing from credit facility   -    -    -    100,000 
Repayment of debt   -    (173,900)   -    (211,700)
Common stock dividends   (13,010)   (8,345)   (30,925)   (20,554)
Distribution to non-controlling interests   (754)   (1,602)   (2,027)   (7,917)
Tax benefit of stock-based compensation exercises   -    231    1,214    3,317 
Net cash (used in) provided by financing activities  $(13,769)  $84,907   $442,033   $134,586 
Net (decrease) increase in cash and equivalents   (7,628)   87,536    297,647    69,183 
Cash and equivalents at beginning of period   680,731    95,802    375,456    114,155 
Cash and equivalents at end of period  $673,103   $183,338   $673,103   $183,338 

  

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SCHEDULE A

 

Non-GAAP Financial Measures

 

The Company computes and discloses Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is defined by the Company as net income plus depreciation, depletion and amortization, non-cash charges, income tax expense, interest and other expense, and any impairment of mining assets, less non-controlling interests in operating income of consolidated subsidiaries, interest and other income, and any royalty portfolio restructuring gains or losses. Other companies may define and calculate this measure differently. Management believes that Adjusted EBITDA is a useful measure of the performance of our royalty portfolio. Adjusted EBITDA identifies the cash generated in a given period that will be available to fund the Company's future operations, growth opportunities, shareholder dividends and to service the Company's debt obligations. This information differs from measures of performance determined in accordance with U.S. generally accepted accounting principles (“GAAP”) and should not be considered in isolation or as a substitute for measures of performance determined in accordance with U.S. GAAP. Below is a reconciliation of net income to Adjusted EBITDA:

 

Royal Gold, Inc.

Adjusted EBITDA Reconciliation

 

   For The Three Months Ended 
   March 31, 
   (Unaudited, in thousands) 
   2013   2012 
         
Net income  $6,897   $26,953 
Depreciation, depletion and amortization   21,649    19,721 
Non-cash employee stock compensation   1,909    1,494 
Realized loss on available-for-sale securities   12,121    - 
Interest and other expense, net   5,628    1,076 
Income tax expense   18,286    14,864 
Non-controlling interests in operating income of consolidated subsidiaries   (359)   (513)
Adjusted EBITDA  $66,131   $63,595 
           
    For The Nine Months Ended 
    March 31, 
    (Unaudited, in thousands) 
    2013    2012 
           
Net income  $59,749   $77,342 
Depreciation, depletion and amortization   64,269    58,360 
Non-cash employee stock compensation   5,808    5,560 
Restructuring on royalty interests in mineral properties   -    1,328 
Realized loss on available-for-sale securities   12,121    - 
Interest and other expense, net   18,646    1,141 
Income tax expense   51,062    41,297 
Non-controlling interests in operating income of consolidated subsidiaries   (1,137)   (1,713)
Adjusted EBITDA  $210,518   $183,315 

 

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