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. Adjusted EBITDA, as defined, is most directly comparable to net income in the Company’s Statements of Operations. Below is the reconciliation of net income to adjusted EBITDA:

ADJUSTED EBITDA RECONCILIATION

		For The Years Ended June 30,
(Unaudited, in thousands)		2014		2013		2012		2011		2010
Net income	$	63,472	$	73,409	$	98,309	$	77,299	$	29,422
Depreciation, depletion and amortization		91,342		85,020		75,001		67,399		53,793
Non-cash employee stock compensation		2,580		5,701		6,507		6,494		7,279
Restructuring on royalty interests in mineral properties		—		—		1,328		—		—
Loss on available-for-sale-securities		4,499		12,121		—		—		—
Royalty portfolio restructuring gain		—		—		—		—		—
Interest and other income		(2,132)		(2,902)		(3,836)		(5,088)		(6,360)
Interest and other expense		23,426		24,780		7,705		7,740		3,809
Income tax expense		19,455		63,759		54,710		38,974		14,164
Non-controlling interests in operating income of consolidated subsidiaries		(572)		(1,420)		(2,108)		(2,646)		(2,039)
Adjusted EBITDA	$	202,070	$	260,469	$	237,616	$	190,172	$	100,068