Attached files
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| 8-K - 8-K - American Midstream Partners, LP | amidq313form8-k.htm |
Exhibit 99.1
American Midstream Reports
Third Quarter 2013 Financial Results
DENVER, CO – November 13, 2013 - American Midstream Partners, LP (NYSE: AMID; American Midstream or the Partnership) today reported financial results for the three and nine months ended September 30, 2013. The Partnership reported gross margin (a non-GAAP measure) for the third quarter of 2013 of $18.6 million, an increase of $5.6 million or 43.1 percent, compared to $13.0 million in the same period in 2012. For the first nine months of 2013, the Partnership reported gross margin of $47.8 million, an increase of $11.0 million or 29.9 percent, compared to $36.8 million in the same period last year. The increase in gross margin for the three and nine months ended September 30, 2013 was primarily due to higher gross margin in the Transmission segment as a result of incremental gross margin associated with the April 2013 acquisition of the High Point system. The increase in gross margin for the nine months ended September 30, 2013 was also partially attributable to higher gross margin in the Gathering and Processing segment from the July 2012 acquisition of the Chatom system. The gross margin increase was partially offset by lower margins associated with the Partnership's percent-of-proceeds and elective processing agreements in the Gathering and Processing segment.
Adjusted EBITDA (a non-GAAP measure) for the three and nine months ended September 30, 2013 was $7.1 million and $18.2 million, respectively, compared to $4.1 million and $14.7 million for the same periods in 2012. The increase in adjusted EBITDA was primarily attributable to the reasons for the increase in gross margin described above, partially offset by increases in direct operating expenses and selling, general and administrative expenses associated with the acquired Chatom and High Point systems.
Distributable cash flow (DCF; a non-GAAP measure) for the three months ended September 30, 2013 was $3.1 million after cash distributions for the Series A convertible preferred units that were issued in April 2013 to High Point Infrastructure Partners, LLC (HPIP), which controls the general partner of American Midstream and is a portfolio company of ArcLight Capital Partners, LLC (ArcLight). DCF for the three months ended September 30, 2013 represents distribution coverage of 1.31. The third quarter 2013 distribution of $2.4 million, or $0.4525 per common unit, will be paid on November 14, 2013 to unitholders of record as of November 7, 2013. The distribution includes a payment to the holders of American Midstream’s Incentive Distribution Rights.
Net loss attributable to the Partnership for the three and nine months ended September 30, 2013 was $2.6 million and $27.7 million, respectively, compared to net loss of $4.3 million and $0.3 million for the same periods in 2012. The decrease in the net loss attributable to the Partnership in the third quarter of 2013 was primarily a result of the reasons for the increases in gross margin above. The increase in the net loss for the nine months ended September 30, 2013 was primarily a result of non-cash asset impairment charges on certain non-strategic gathering and processing assets of $17.0 million in the second quarter.
EQUITY RESTRUCTURING
Effective August 9, 2013, American Midstream consummated an equity restructuring with American Midstream GP, LLC (its General Partner), which was the holder of all previous Incentive Distribution Rights, and HPIP, owner of all
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previously outstanding subordinated units. As part of the equity restructuring agreement, American Midstream's 4.5 million subordinated units and previous Incentive Distribution Rights were combined into, and restructured as a new class of Incentive Distribution Rights (“new IDRs”).
The equity restructuring permanently eliminated American Midstream's subordinated units and previous Incentive Distribution Rights in return for the new IDRs. The new IDRs entitle the holders to receive 48 percent of any quarterly cash distributions after American Midstream's common unit holders have received the full minimum quarterly distribution ($0.4125 per unit) for each quarter plus any arrearages from prior quarters (of which there are currently none).
EXECUTIVE COMMENTARY
"We are pleased with our third quarter results and improved distribution coverage resulting from the solid performance of our transmission assets and the equity restructuring we completed during the third quarter,” stated Steve Bergstrom, Executive Chairman, President and Chief Executive Officer. "As previously announced, we increased the quarterly distribution by 4.6%, which was at the high end of the range we communicated last quarter. In addition, the integration of High Point is complete, and we spent the majority of the third quarter focusing on growth opportunities. As a result of these efforts, we are nearing completion on several meaningful near-term growth opportunities that, if consummated, could deliver significant growth for the Partnership beginning in 2014. Finally, HPIP, which controls our general partner, continues to make progress on the Eagle Ford project, with operations expected to commence in mid-2014. As we look forward into 2014 and beyond, we believe that American Midstream is very well positioned to deliver meaningful distribution growth to its investors.”
SEGMENT PERFORMANCE
Gathering and Processing - The Gathering and Processing segment includes natural gas transportation, gathering, treating, processing, fractionation, and selling or delivering natural gas and NGLs to various markets and pipeline systems.
Segment gross margin for the Gathering and Processing segment was $10.7 million and $28.5 million for the three and nine months ended September 30, 2013, respectively, compared to $10.3 million and $27.3 million for the same periods in 2012. The increase in segment gross margin in the third quarter was primarily due to higher throughput on the Quivira and Burns Point systems partially offset by lower NGL production at our processing plants, and lower realized NGL prices.
Natural gas throughput volumes averaged 303.9 million cubic feet per day (MMcf/d) and 270.1 MMcf/d for the three and nine months ended September 30, 2013, respectively, compared to 245.4 MMcf/d and 318.6 MMcf/d for the same periods in 2012. Processed NGLs averaged 49.5 thousand gallons per day (Mgal/d) and 56.0 Mgal/d for the three and nine months ended September 30, 2013, respectively, compared to 56.0 Mgal/d and 54.8 Mgal/d for the same periods in 2012. The increase in throughput in the third quarter was primarily due to higher volumes on the Quivira system and into the Burns Point plant from a producer customer. Processed NGLs decreased primarily as a result of reduced production on the Bazor Ridge system, partially offset by increased production at the Burns Point plant.
Transmission - The Transmission segment transports and delivers natural gas from producing wells, receipt points, or pipeline interconnects to pipeline or end-use markets. Segment gross margin for the Transmission segment was $7.9 million and $19.3 million for the three and nine months ended September 30, 2013, respectively, compared to $2.7 million and $9.5 million for the same periods in 2012. The increase in segment gross margin was primarily due to the contributions of the High Point system.
Total natural gas throughput volumes averaged 698.5 MMcf/d and 611.3 MMcf/d for the three and nine months ended September 30, 2013, respectively, compared to 427.8 MMcf/d and 409.7 MMcf/d for the same periods in 2012. The increase in throughput volume during the three months and nine months ended September 30, 2013, was primarily due to the additional volumes contributed by the High Point system.
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DERIVATIVES
The Partnership enters into derivative agreements to hedge exposure to commodity prices associated with natural gas, NGLs, and crude. As of September 30, 2013, approximately 55 percent of the Partnership's exposure to NGL prices, other than ethane, is hedged through the end of 2013. Due to low ethane prices, ethane is hedged at approximately 20 percent for the same time period. Approximately 93 percent of the Partnership's exposure to oil prices is hedged through the end of 2013. Details regarding the Partnership's hedge program are found in its quarterly filings.
During the third quarter the Partnership executed a weather derivative to mitigate hurricane risk in the Gulf Coast in the event a hurricane damages the Partnership's assets or disrupts the production of the Partnership's producer customers. The swap pays up to $10 million if a hurricane classified as category three or higher passes through a contractually pre-determined area of the Gulf of Mexico as confirmed by the National Hurricane Center.
BALANCE SHEET
As of September 30, 2013, the Partnership had $1.1 million of cash on hand, and $123.7 million borrowed on its senior secured revolving credit facility with $39.3 million of available borrowing capacity.
CAPITAL EXPENDITURES
For the three and nine months ended September 30, 2013, capital expenditures totaled $4.3 million and $16.8 million, respectively, including growth capital of $1.6 million and $10.5 million, maintenance capital expenditures of $2.2 million and $5.3 million, and reimbursable project expenditures of $0.5 million and $1.0 million, respectively.
2013 ADJUSTED EBITDA, DCF AND GROWTH CAPITAL EXPENDITURE FORECAST
The Partnership's forecast for 2013 adjusted EBITDA and DCF remains in a range of $24 million to $27 million and $9 million to $12 million, respectively, based on its current forecast of operational volumes and prices for crude oil, natural gas, natural gas liquids, and derivative instruments currently outstanding. The Partnership's growth capital expenditures for 2013 are unchanged at approximately $14 million. These expenditures do not include the Gonzales County Eagle Ford development project currently being constructed by HPIP.
CONFERENCE CALL
American Midstream will host a conference call and webcast to discuss its third quarter 2013 financial results on Thursday, November 14, 2013, at 10:00 a.m. Eastern Time. The call may be accessed live at the investor relations section of the American Midstream website at www.AmericanMidstream.com. The call may also be accessed by dialing 866-515-2912 for domestic users or 617-399-5126 for international users. The passcode for both phone numbers is 90824004.
A replay of the audio webcast will be available shortly after the call on American Midstream's website. A telephonic replay will be available through December 13, 2013, by dialing 888-286-8010 for domestic users or 617-801-6888 for international users. The passcode for both phone numbers is 28701363.
Non-GAAP Financial Measures
This press release, and the accompanying tables, includes financial measures in accordance with U.S. generally accepted accounting principles, or GAAP, as well as non-GAAP financial measures, including “Adjusted EBITDA,” “gross margin,” and “distributable cash flow.” The tables attached to this press release include reconciliations of these non-GAAP financial measures to the nearest GAAP financial measures. In addition, an “Explanation of Non-GAAP Financial Measures” is set forth in Appendix A attached to this press release.
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About American Midstream Partners, LP.
Denver-based American Midstream Partners is a growth-oriented limited partnership formed to own, operate, develop and acquire a diversified portfolio of midstream energy assets. The Partnership provides midstream services in the Gulf Coast and Southeast regions of the United States. For more information about American Midstream Partners, visit www.AmericanMidstream.com.
Forward Looking Statements
This press release includes forward-looking statements. These statements relate to, among other things, projections of operational volumetrics and improvements, growth projects, cash flows and capital expenditures. We have used the words "anticipate,” "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "potential," and similar terms and phrases to identify forward-looking statements in this press release. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors which are described in greater detail in our filings with the SEC. Please see our Risk Factor disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2012 filed on April 16, 2013 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 filed on November 13, 2013. All future written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. We undertake no obligation to update any information contained herein or to publicly release the results of any revisions to any forward-looking statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of this press release.
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American Midstream Partners, LP and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
September 30, 2013 | December 31, 2012 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 1,076 | $ | 576 | |||
Accounts receivable | 4,992 | 1,958 | |||||
Unbilled revenue | 24,927 | 21,512 | |||||
Risk management assets | 1,050 | 969 | |||||
Other current assets | 4,573 | 3,226 | |||||
Total current assets | 36,618 | 28,241 | |||||
Property, plant and equipment, net | 280,516 | 223,819 | |||||
Noncurrent assets held for sale, net | 874 | — | |||||
Other assets, net | 6,202 | 4,636 | |||||
Total assets | $ | 324,210 | $ | 256,696 | |||
Liabilities, Equity and Partners’ Capital | |||||||
Current liabilities | |||||||
Accounts payable | $ | 1,595 | $ | 5,527 | |||
Accrued gas purchases | 17,307 | 17,034 | |||||
Accrued expenses and other current liabilities | 14,709 | 9,619 | |||||
Current portion of long-term debt | 157 | — | |||||
Risk management liabilities | 349 | — | |||||
Total current liabilities | 34,117 | 32,180 | |||||
Risk management liabilities | 122 | — | |||||
Asset retirement obligations | 34,440 | 8,319 | |||||
Other liabilities | 215 | 309 | |||||
Long-term debt | 121,035 | 128,285 | |||||
Total liabilities | 189,929 | 169,093 | |||||
Commitments and contingencies | |||||||
Convertible preferred units | |||||||
Series A convertible preferred units (5,204 thousand units issued and outstanding as of September 30, 2013) | 92,912 | — | |||||
Equity and partners’ capital | |||||||
General partner interest (185 thousand units issued and outstanding as of September 30, 2013 and December 31, 2012) | 12,106 | 548 | |||||
Limited partner interest (4,705 and 9,165 thousand units issued and outstanding as of September 30, 2013 and December 31, 2012, respectively) | 21,602 | 79,266 | |||||
Accumulated other comprehensive income | 261 | 351 | |||||
Total partners’ capital | 33,969 | 80,165 | |||||
Noncontrolling interests | 7,400 | 7,438 | |||||
Total equity and partners' capital | 41,369 | 87,603 | |||||
Total liabilities, equity and partners' capital | $ | 324,210 | $ | 256,696 | |||
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American Midstream Partners, LP and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except for per unit amounts)
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenue | $ | 76,577 | $ | 54,347 | $ | 210,190 | $ | 138,423 | |||||||
(Loss) gain on commodity derivatives, net | (499 | ) | (946 | ) | 110 | 3,157 | |||||||||
Total revenue | 76,078 | 53,401 | 210,300 | 141,580 | |||||||||||
Operating expenses: | |||||||||||||||
Purchases of natural gas, NGLs and condensate | 57,973 | 41,365 | 162,671 | 100,075 | |||||||||||
Direct operating expenses | 7,714 | 5,329 | 19,637 | 11,550 | |||||||||||
Selling, general and administrative expenses | 3,969 | 3,246 | 11,982 | 10,101 | |||||||||||
Equity compensation expense | 392 | 474 | 1,877 | 1,272 | |||||||||||
Depreciation and accretion expense | 6,458 | 5,504 | 18,802 | 15,722 | |||||||||||
Total operating expenses | 76,506 | 55,918 | 214,969 | 138,720 | |||||||||||
Gain on involuntary conversion of property, plant and equipment | — | — | 343 | — | |||||||||||
Gain on sale of assets, net | — | 4 | — | 121 | |||||||||||
Loss on impairment of property, plant and equipment | — | — | (15,232 | ) | — | ||||||||||
Operating (loss) income | (428 | ) | (2,513 | ) | (19,558 | ) | 2,981 | ||||||||
Other expense: | |||||||||||||||
Interest expense | (2,082 | ) | (1,501 | ) | (6,003 | ) | (3,083 | ) | |||||||
Net loss from continuing operations | (2,510 | ) | (4,014 | ) | (25,561 | ) | (102 | ) | |||||||
Discontinued operations | |||||||||||||||
Income (loss) from operations of disposal groups | 144 | (12 | ) | (1,652 | ) | 94 | |||||||||
Net loss | (2,366 | ) | (4,026 | ) | (27,213 | ) | (8 | ) | |||||||
Net income attributable to noncontrolling interests | 190 | 249 | 533 | 249 | |||||||||||
Net loss attributable to the Partnership | $ | (2,556 | ) | $ | (4,275 | ) | $ | (27,746 | ) | $ | (257 | ) | |||
General partner's interest in net loss | $ | (46 | ) | $ | (85 | ) | $ | (544 | ) | $ | (5 | ) | |||
Limited partners' interest in net loss | $ | (2,510 | ) | $ | (4,190 | ) | $ | (27,202 | ) | $ | (252 | ) | |||
Limited partners' net (loss) income per common unit: | |||||||||||||||
Basic and diluted: | |||||||||||||||
Loss from continuing operations | $ | (0.82 | ) | $ | (0.46 | ) | $ | (5.54 | ) | $ | (0.04 | ) | |||
Income (loss) from discontinued operations | 0.02 | — | (0.19 | ) | 0.01 | ||||||||||
Net loss | $ | (0.80 | ) | $ | (0.46 | ) | $ | (5.73 | ) | $ | (0.03 | ) | |||
Weighted average number of common units outstanding: | |||||||||||||||
Basic and diluted | $ | 6,663 | $ | 9,108 | $ | 8,334 | $ | 9,103 | |||||||
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American Midstream Partners, LP and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Nine Months Ended September 30, | |||||||
2013 | 2012 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (27,213 | ) | $ | (8 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and accretion expense | 18,802 | 15,819 | |||||
Amortization of deferred financing costs | 975 | 493 | |||||
Amortization of weather derivative premium | 378 | — | |||||
Unrealized loss (gain) on commodity derivatives | 1,159 | (1,733 | ) | ||||
Unit based compensation | 1,824 | 1,272 | |||||
OPEB plan net periodic benefit | (55 | ) | (61 | ) | |||
Gain on involuntary conversion of property, plant and equipment | (343 | ) | — | ||||
Gain on sale of assets, net | — | (126 | ) | ||||
Loss on impairment of property, plant and equipment | 15,232 | — | |||||
Loss on impairment of noncurrent assets held for sale | 1,807 | — | |||||
Changes in operating assets and liabilities, net: | |||||||
Accounts receivable | 595 | (558 | ) | ||||
Unbilled revenue | (1,970 | ) | 6,677 | ||||
Risk management assets | (1,147 | ) | — | ||||
Other current assets | 702 | 1,285 | |||||
Other assets, net | (67 | ) | (65 | ) | |||
Accounts payable | (808 | ) | 1,396 | ||||
Accrued gas purchases | 273 | (5,833 | ) | ||||
Accrued expenses and other current liabilities | 2,766 | (1,879 | ) | ||||
Other liabilities | (94 | ) | (203 | ) | |||
Net cash provided by operating activities | 12,816 | 16,476 | |||||
Cash flows from investing activities | |||||||
Cost of acquisition, net of cash acquired | — | (51,377 | ) | ||||
Additions to property, plant and equipment | (16,767 | ) | (4,465 | ) | |||
Proceeds from disposals of property, plant and equipment | — | 126 | |||||
Insurance proceeds from involuntary conversion of property, plant and equipment | 482 | — | |||||
Net cash used in investing activities | (16,285 | ) | (55,716 | ) | |||
Cash flows from financing activities | |||||||
Unit holder contributions | 12,500 | 13 | |||||
Unit holder distributions | (12,458 | ) | (12,050 | ) | |||
Issuance of Series A convertible preferred units, net | 14,393 | — | |||||
Net distributions to noncontrolling interest owners | (571 | ) | (249 | ) | |||
LTIP tax netting unit repurchase | (400 | ) | (88 | ) | |||
Payments for deferred debt issuance costs | (1,509 | ) | (1,140 | ) | |||
Payments on other debt | (2,231 | ) | — | ||||
Borrowings on other debt | 1,495 | — | |||||
Payments on long-term debt | (99,821 | ) | (42,310 | ) | |||
Borrowings on long-term debt | 92,571 | 94,690 | |||||
Net cash provided by financing activities | 3,969 | 38,866 | |||||
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Net increase in cash and cash equivalents | 500 | (374 | ) | ||||
Cash and cash equivalents | |||||||
Beginning of period | 576 | 871 | |||||
End of period | $ | 1,076 | $ | 497 | |||
Supplemental cash flow information | |||||||
Interest payments | $ | 4,933 | $ | 1,894 | |||
Supplemental non-cash information | |||||||
(Decrease) increase in accrued property, plant and equipment | $ | (6,169 | ) | $ | 808 | ||
Net assets contributed in exchange for the issuance of Series A convertible preferred units | $ | 59,995 | $ | — | |||
Fair value of Series A Units in excess of net assets received | $ | 15,612 | $ | — | |||
Accrued and in-kind unitholder distribution for Series A Units | $ | 2,912 | $ | — | |||
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American Midstream Partners, LP and Subsidiaries
Reconciliation of Net (loss) income attributable to the Partnership
to Adjusted EBITDA to Distributable Cash Flow
(Unaudited, in thousands)
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net (loss) income attributable to the Partnership | $ | (2,556 | ) | $ | (4,275 | ) | $ | (27,746 | ) | $ | (257 | ) | |||
Add: | |||||||||||||||
Depreciation and accretion expense | 6,458 | 5,504 | 18,802 | 15,722 | |||||||||||
Interest expense | 1,615 | 1,501 | 4,695 | 3,083 | |||||||||||
Debt issuance costs | 194 | — | 1,509 | — | |||||||||||
Unrealized (gain) loss on derivatives, net | 913 | 1,762 | 1,158 | (1,732 | ) | ||||||||||
Non-cash equity compensation expense | 392 | 474 | 1,877 | 1,272 | |||||||||||
Transaction expenses | 426 | — | 1,848 | — | |||||||||||
Loss on impairment of property, plant and equipment | — | — | 15,232 | — | |||||||||||
Loss on impairment of noncurrent assets held for sale | — | — | 1,807 | — | |||||||||||
Deduct: | |||||||||||||||
COMA income | 292 | 820 | 544 | 2,980 | |||||||||||
Straight-line amortization of put costs (1) | 32 | 46 | 89 | 269 | |||||||||||
OPEB plan net periodic benefit | 18 | 23 | 54 | 64 | |||||||||||
Gain on involuntary conversion of property, plant and equipment | — | — | 343 | — | |||||||||||
Gain on sale of assets, net | — | 4 | — | 121 | |||||||||||
Adjusted EBITDA | $ | 7,100 | $ | 4,073 | $ | 18,152 | $ | 14,654 | |||||||
Deduct: | |||||||||||||||
Cash interest expense (2) | $ | 1,588 | $ | 1,292 | $ | 4,627 | $ | 2,590 | |||||||
Normalized maintenance capital (3) | 1,116 | 1,041 | 3,261 | 2,791 | |||||||||||
Normalized integrity management (4) | — | (58 | ) | — | 692 | ||||||||||
Series A Convertible Preferred payment | 1,301 | — | 2,375 | — | |||||||||||
Distributable Cash Flow | $ | 3,095 | $ | 1,798 | $ | 7,889 | $ | 8,581 | |||||||
(1) | Amounts noted represent the straight-line amortization of the cost of commodity put contracts over the life of the contract. |
(2) | Excludes amortization of debt issuance costs and mark-to-market adjustments related to interest rate derivatives. |
(3) | Amounts noted represent estimated annual maintenance capital expenditures of $4.5 million which is what we expect to be required to maintain our assets over the long term. |
(4) | Amounts noted represent average estimated integrity management costs over the seven-year mandatory testing cycle, net of integrity management costs that are expensed in direct operating expenses. Following a recent re-evaluation of the integrity management program, management determined that integrity management expenses will continue to be expensed as incurred in direct operating expenses consistent with past practice. However, beginning with the third quarter of 2013, integrity management expenses will no longer be normalized in the calculation of distributable cash flow. |
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American Midstream Partners, LP and Subsidiaries
Reconciliation of Gross Margin to Net (loss) income attributable to the Partnership
(Unaudited, in thousands)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Gathering and processing segment gross margin | $ | 10,688 | $ | 10,310 | $ | 28,454 | $ | 27,321 | ||||||||
Transmission segment gross margin | 7,864 | 2,668 | 19,296 | 9,472 | ||||||||||||
Total gross margin | 18,552 | 12,978 | 47,750 | 36,793 | ||||||||||||
Plus: | ||||||||||||||||
Gain (loss) on commodity derivatives | (499 | ) | (946 | ) | 110 | 3,157 | ||||||||||
Less: | ||||||||||||||||
Direct operating expenses | 7,714 | 5,329 | 19,637 | 11,550 | ||||||||||||
Selling, general and administrative expenses | 3,969 | 3,246 | 11,982 | 10,101 | ||||||||||||
Equity compensation expense | 392 | 474 | 1,877 | 1,272 | ||||||||||||
Depreciation and accretion expense | 6,458 | 5,504 | 18,802 | 15,722 | ||||||||||||
Loss on impairment of property, plant and equipment | — | — | 15,232 | — | ||||||||||||
Interest expense | 2,082 | 1,501 | 6,003 | 3,083 | ||||||||||||
Other, net (1) | (52 | ) | (8 | ) | (112 | ) | (1,676 | ) | ||||||||
Gain (loss) from operations of disposal groups | (144 | ) | 12 | 1,652 | (94 | ) | ||||||||||
Net income attributable to noncontrolling interest | 190 | 249 | 533 | 249 | ||||||||||||
Net (loss) attributable to the Partnership | $ | (2,556 | ) | $ | (4,275 | ) | $ | (27,746 | ) | $ | (257 | ) | ||||
(1) | Other, net includes realized gains on commodity derivatives of $0.3 million and $0.8 million and COMA income of $0.3 million and $0.8 million for the three months ended September 30, 2013 and 2012, respectively. Other, net includes realized gains on commodity derivatives of $0.8 million and $1.4 million and COMA income of $0.5 million and $3.0 million for the three months ended September 30, 2013 and 2012, respectively. |
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American Midstream Partners, LP and Subsidiaries
Segment Operating Data
(Unaudited, in thousands, except for operating and pricing data)
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Segment Financial and Operating Data: | |||||||||||||||
Gathering and Processing Segment | |||||||||||||||
Financial data: | |||||||||||||||
Revenue | $ | 48,873 | $ | 41,637 | $ | 144,658 | $ | 101,307 | |||||||
(Loss) gain on commodity derivatives, net | (499 | ) | (946 | ) | 110 | 3,157 | |||||||||
Total revenue | 48,374 | 40,691 | 144,768 | 104,464 | |||||||||||
Purchases of natural gas, NGLs and condensate | 38,162 | 32,105 | 116,568 | 74,776 | |||||||||||
Direct operating expenses | 3,720 | 3,567 | 10,694 | 7,531 | |||||||||||
Other financial data: | |||||||||||||||
Segment gross margin | $ | 10,688 | $ | 10,310 | $ | 28,454 | $ | 27,321 | |||||||
Operating data: | |||||||||||||||
Average throughput (MMcf/d) | 303.9 | 245.4 | 270.1 | 318.6 | |||||||||||
Average plant inlet volume (MMcf/d) (a) (b) | 134.4 | 99.8 | 114.5 | 130.4 | |||||||||||
Average gross NGL production (Mgal/d) (a) (c) | 49.5 | 56.0 | 56.0 | 54.8 | |||||||||||
Average gross condensate production (Mgal/d) (a) (c) | 48.1 | 45.1 | 45.9 | 19.2 | |||||||||||
Average realized prices: | |||||||||||||||
Natural gas ($/MMcf) | $ | 3.80 | $ | 3.08 | $ | 3.97 | $ | 2.74 | |||||||
NGLs ($/gal) | 0.91 | 0.94 | 0.86 | 1.12 | |||||||||||
Condensate ($/gal) | 2.40 | 2.27 | 2.35 | 2.33 | |||||||||||
Transmission Segment | |||||||||||||||
Financial data: | |||||||||||||||
Total revenue | $ | 27,704 | $ | 12,710 | $ | 65,532 | $ | 37,116 | |||||||
Purchases of natural gas, NGLs and condensate | 19,811 | 9,260 | 46,103 | 25,300 | |||||||||||
Direct operating expenses | 3,994 | 1,762 | 8,943 | 4,019 | |||||||||||
Other financial data: | |||||||||||||||
Segment gross margin | $ | 7,864 | $ | 2,668 | $ | 19,296 | $ | 9,472 | |||||||
Operating data: | |||||||||||||||
Average throughput (MMcf/d) | 698.5 | 427.8 | 611.3 | 409.7 | |||||||||||
Average firm transportation - capacity reservation (MMcf/d) | 262.9 | 327.8 | 987.5 | 1,039.0 | |||||||||||
Average interruptible transportation - throughput (MMcf/d) | 102.2 | 98.5 | 113.8 | 77.6 | |||||||||||
(a) | Excludes volumes and gross production under our elective processing arrangements. |
(b) | Includes gross plant inlet volume associated with our interest in the Burns Point processing plant. |
(c) | Includes net NGL and condensate production associated with our interest in the Burns Point processing plant. |
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Appendix A
Note About Non-GAAP Financial Measures
Gross margin, adjusted EBITDA and distributable cash flows are all non-GAAP financial measures. Each has important limitations as an analytical tool because it excludes some, but not all, items that affect the most directly comparable GAAP financial measures. Management compensates for the limitations of these non-GAAP measures as analytical tools by reviewing the comparable GAAP measures, understanding the differences between the measures and incorporating these data points into management’s decision-making process.
You should not consider any of gross margin, adjusted EBITDA or distributable cash flow in isolation or as a substitute for analysis of our results as reported under GAAP. Gross margin, adjusted EBITDA and distributable cash flow may be defined differently by other companies in our industry. Our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
We define adjusted EBITDA as net income, plus interest expense, depreciation expense, certain non-cash charges such as non-cash equity compensation, unrealized losses on commodity derivative contracts and selected charges that are unusual or non-recurring including debt issuance costs, transaction costs, and losses on the impairment of property, plant and equipment, less interest income, unrealized gains on commodity derivative contracts, construction, operating and maintenance agreement (COMA) income, amortization of commodity put purchase costs and selected gains that are unusual or nonrecurring such as the benefit of our other post-employment benefit plan (OPEB), gains on the sale of assets, and gains on the involuntary conversion of property, plant and equipment. The GAAP measure most directly comparable to adjusted EBITDA is net income.
Distributable cash flow is a significant performance metric used by us and by external users of our financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by us to the cash distributions we expect to pay our unitholders. Using this metric, management and external users of our financial statements can quickly compute the coverage ratio of estimated cash flows to planned cash distributions. Distributable cash flow is also an important financial measure for our unitholders since it serves as an indicator of our success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether we are generating cash flow at a level that can sustain or support an increase in our quarterly distribution rates. Distributable cash flow is also a quantitative standard used throughout the investment community with respect to publicly traded partnerships and limited liability companies because the value of a unit of such an entity is generally determined by the unit's yield (which in turn is based on the amount of cash distributions the entity pays to a unitholder). Distributable cash flow will not reflect changes in working capital balances.
We define distributable cash flow as adjusted EBITDA plus interest income, less cash paid for interest expense, normalized maintenance capital expenditures, and dividends related to the Series A convertible preferred units. The GAAP measure most comparable to distributable cash flow is net income.
Gross margin and segment gross margin are metrics that we use to evaluate our performance. We define segment gross margin in our Gathering and Processing segment as revenue generated from gathering and processing operations, realized gain (loss) on commodity derivatives less COMA less the cost of natural gas, NGLs and condensate purchased. Revenue includes revenue generated from fixed fees associated with the gathering and treating of natural gas and from the sale of natural gas, NGLs and condensate resulting from gathering and processing activities under fixed-margin and percent-of-proceeds arrangements. The cost of natural gas, NGLs and condensate includes volumes of natural gas, NGLs and condensate remitted back to producers pursuant to percent-of-proceeds arrangements and the cost of natural gas purchased for our own account, including pursuant to fixed-margin arrangements.
We define segment gross margin in our Transmission segment as revenue generated from firm and interruptible transportation agreements and fixed-margin arrangements, plus other related fees, less COMA, less the cost of natural gas purchased in connection with fixed-margin arrangements.
We define gross margin as the sum of our segment gross margin for our Gathering and Processing and Transmission segments. The GAAP measure most comparable to gross margin is net income.
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