MP Materials Investor Presentation Deck
3
Use of Non-GAAP Financial Measures
This presentation references certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA Margin, which have not been prepared
in accordance with generally accepted accounting principles in the United States ("GAAP").
MP Materials defines Adjusted EBITDA as GAAP net income or loss before interest expense, net; income tax expense or benefit; and depreciation, depletion
and amortization; further adjusted to eliminate the impact of stock-based compensation expense; start-up costs; transaction-related and other non-recurring
costs; accretion of asset retirement and environmental obligations; gain or loss on disposals of long-lived assets; and other income or loss. We define
Adjusted EBITDA Margin as our Adjusted EBITDA divided by our total revenue. You can find the reconciliation of these measures to the most directly
comparable GAAP measures in the Appendix.
MP Materials' management uses Adjusted EBITDA and Adjusted EBITDA Margin to compare MP Materials' performance to that of prior periods for trend
analyses and for budgeting and planning purposes. MP Materials believes Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to
management and investors regarding certain financial and business trends relating to MP Materials' financial condition and results of operations. MP
Materials' management believes that the use of Adjusted EBITDA and Adjusted EBITDA Margin provide an additional tool for investors to use in evaluating
projected operating results and trends.
MP Materials' method of determining these non-GAAP measures may be different from other companies' methods and, therefore, may not be comparable to
those used by other companies and MP Materials does not recommend the sole use of these non-GAAP measures to assess its financial performance.
Management does not consider non-GAAP measures in isolation or as an alternative or to be superior to financial measures determined in accordance with
GAAP. The principal limitation of non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be
recorded in MP Materials' financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management
about which expense and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations,
management presents reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures.
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