PennTex Midstream Partners, LP (NASDAQ:PTXP) (the
“Partnership”) today reported fourth quarter and full year 2016
financial and operational results.
Fourth Quarter 2016 Results
For the three months ended December 31, 2016 the
Partnership had operating revenues of $18.4 million and total
operating expenses of $30.5 million, resulting in an operating loss
of $12.1 million. Operating expenses included significant
non-recurring, non-cash expenses recorded in connection with the
acquisition of the Partnership’s general partner by Energy Transfer
Partners, L.P. (NYSE:ETP) (“ETP”) in November 2016, including $11.6
million for the accelerated vesting of all outstanding awards under
the Partnership’s 2015 Long-Term Incentive Plan. In addition, the
Partnership recorded $9.5 million of deferred revenue primarily
related to undelivered minimum volume commitments. The Partnership
reported a net loss of $13.7 million, or $(0.18) per unit, and net
operating cash flow of $15.0 million.
For the three months ended December 31, 2016, the
Partnership generated Adjusted EBITDA of $19.4 million and
distributable cash flow of $18.1 million, corresponding to a
distribution coverage ratio of 1.50x for the fourth quarter 2016
and a leverage ratio of 2.45x as of December 31, 2016. Please
see “Supplemental Non-GAAP Financial Measures” for a description
and reconciliation of Adjusted EBITDA and distributable cash
flow.
Processing volumes averaged 240,000 MMBtu/d during
the fourth quarter 2016, and minimum volume commitments under the
Partnership’s gathering and processing agreements with its primary
customer were 460,000 MMBtu/d for the quarter. The Partnership also
completed and placed into service additional gathering facilities
in the Vernon Field for its primary customer in December 2016.
Full Year 2016 Results
The Partnership’s operating revenues for the twelve
months ended December 31, 2016 were $77.4 million and total
operating expenses were $70.9 million, resulting in operating
income of $6.4 million, and the Partnership also recorded $23.3
million of deferred revenue. For the twelve months ended December
31, 2016, the Partnership reported a net loss of $0.2 million, or
$0.23 per unit, and net operating cash flow of $56.6 million.
For the twelve months ended December 31, 2016, the
Partnership generated Adjusted EBITDA of $68.8 million and
distributable cash flow of $62.5 million. Processing volumes
averaged 273,000 MMBtu/d for the year.
Fourth Quarter 2016
Distribution
On January 25, 2017, the Partnership announced a
quarterly distribution of $0.2950 per unit, or $1.18 per unit on an
annualized basis, for the fourth quarter 2016. The distribution is
the same amount as the distribution declared for the third quarter.
The distribution will be paid on February 14, 2017 to
unitholders of record as of February 7, 2017.
Financial Position and
Liquidity
As of December 31, 2016, the Partnership had $8.4
million in cash on hand. As of December 31, 2016, the Partnership’s
total indebtedness was $169.0 million, including letters of credit
outstanding, and the Partnership had an additional $106.0 million
available borrowing capacity under its revolving credit
facility.
Additional Information
The Partnership will not host a conference call.
The Partnership’s financial statements and related footnotes will
be available in its Annual Report on Form 10-K for the year ended
December 31, 2016, which will be filed with the U.S. Securities and
Exchange Commission (“SEC”) on February 3, 2017 or shortly
thereafter.
About PennTex Midstream Partners,
LP
PennTex Midstream Partners, LP provides natural gas
gathering and processing and residue gas and natural gas liquids
transportation services to producers in northern Louisiana. ETP
owns the general partner of the Partnership. For more information,
visit www.penntex.com.
For further information, please direct all
inquiries to:
Investor Relations:Energy
TransferHelen RyooLyndsay HannahBrent Ratliff214-981-0795
(office)
Media Relations:Vicki
GranadoGranado Communications Group214-599-8785
(office)214-498-9272 (cell)
Cautionary Note
Disclosures in this press release contain certain
forward-looking statements within the meaning of the federal
securities laws. All statements, other than statements of
historical facts, included in this press release that address
activities, events or developments that the Partnership expects,
believes or anticipates will or may occur in the future are
forward-looking statements and speak only as of the date on which
such statement is made. These statements contain words such
as “expect," “will” and “anticipate” and are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
control of the Partnership. These include, but are not
limited to, risks related to volatility of commodity prices; the
success of producers in the area in which we operate, market demand
for natural gas and natural gas liquids; competition in the
midstream industry; general economic conditions; and the effects of
government regulations and policies. Although we believe that
the assumptions reflected in or suggested by the forward-looking
statements are reasonable, should any of the underlying assumptions
prove incorrect, or should one or more of these risks or
uncertainties occur, the Partnership’s actual results and plans
could differ materially from those implied or expressed by any
forward-looking statements. Accordingly, readers should not
place undue reliance on forward-looking statements as a prediction
of actual results. For more information concerning factors
that could cause actual results to differ materially from those
conveyed in the forward-looking statements, please refer to the
“Risk Factors” section of the Partnership’s Annual Report on Form
10-K for the year ended December 31, 2016 filed with the U.S.
Securities and Exchange Commission on February 3, 2017.
Except as otherwise required by applicable law, the Partnership
undertakes no obligation to publicly update or revise any such
forward-looking statements to reflect events or circumstances that
occur, or of which the Partnership becomes aware, after the date
hereof.
PENNTEX MIDSTREAM PARTNERS, LP |
UNAUDITED CONSOLIDATED STATEMENT OF
OPERATIONS |
(in thousands, except per unit
amounts) |
|
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015(1) |
Revenues |
|
$ |
18,367 |
|
|
$ |
19,067 |
|
|
$ |
77,353 |
|
|
$ |
33,219 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Cost of
revenues |
|
3,470 |
|
|
2,672 |
|
|
12,728 |
|
|
4,282 |
|
General
and administrative expense |
|
16,560 |
|
|
3,873 |
|
|
29,187 |
|
|
12,177 |
|
Operating
and maintenance expense |
|
6,568 |
|
|
2,108 |
|
|
14,428 |
|
|
5,727 |
|
Depreciation and amortization expense |
|
3,414 |
|
|
3,313 |
|
|
13,531 |
|
|
5,978 |
|
Impairment of surplus assets |
|
— |
|
|
— |
|
|
— |
|
|
2,483 |
|
Taxes
other than income taxes |
|
464 |
|
|
(29 |
) |
|
1,063 |
|
|
106 |
|
Total
operating expenses |
|
30,476 |
|
|
11,937 |
|
|
70,937 |
|
|
30,753 |
|
Operating income
(loss) |
|
(12,109 |
) |
|
7,130 |
|
|
6,416 |
|
|
2,466 |
|
Interest
expense, net |
|
(1,612 |
) |
|
(1,855 |
) |
|
(6,622 |
) |
|
(2,405 |
) |
Net
income (loss) |
|
$ |
(13,721 |
) |
|
$ |
5,275 |
|
|
$ |
(206 |
) |
|
$ |
61 |
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per common unit: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.18 |
) |
|
$ |
0.17 |
|
|
$ |
0.23 |
|
|
$ |
0.25 |
|
Diluted |
|
$ |
(0.18 |
) |
|
$ |
0.17 |
|
|
$ |
0.23 |
|
|
$ |
0.25 |
|
Weighted
average common and common equivalent units
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
20,534 |
|
|
20,000 |
|
|
20,190 |
|
|
20,000 |
|
Diluted |
|
20,534 |
|
|
20,000 |
|
|
20,190 |
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The
historical financial data for the year ended December 31, 2015 is
derived from the unaudited financial statements of the
Partnership’s accounting predecessor, PennTex North Louisiana, LLC.
In connection with the closing of the Partnership’s initial public
offering on June 9, 2015, PennTex North Louisiana, LLC became a
wholly-owned subsidiary of the Partnership. |
PENNTEX MIDSTREAM PARTNERS,
LPSUPPLEMENTAL NON-GAAP FINANCIAL
MEASURES(Unaudited)
Adjusted EBITDA and distributable cash flow are
non-GAAP financial measures. The GAAP liquidity measure most
directly comparable to Adjusted EBITDA and distributable cash flow
is net cash provided by operating activities. Adjusted EBITDA and
distributable cash flow should not be considered alternatives to
net income, operating income, cash flows from operations or any
other measure of financial performance or liquidity presented in
accordance with GAAP.
Adjusted EBITDA and distributable cash flow have
important limitations as analytical tools because they exclude some
but not all items that affect net income and net cash provided by
operating activities. Additionally, because Adjusted EBITDA and
distributable cash flow may be defined differently by other
companies in our industry, our definition of Adjusted EBITDA and
distributable cash flow may not be comparable to similarly titled
measures of other companies, thereby diminishing their utility. You
should not consider Adjusted EBITDA or distributable cash flow in
isolation or as substitutes for analysis of results as reported
under GAAP.
Adjusted EBITDA is defined as net income (loss),
plus interest expense, income taxes, depreciation and amortization,
changes in deferred revenues, equity-based compensation expense,
non-cash general and administrative expense, non-cash loss (income)
related to derivative instruments and impairments on long-term
assets. Distributable cash flow is defined as Adjusted EBITDA, less
cash interest expense related to operating activities, net of
interest income, income taxes paid and maintenance capital
expenditures, and distribution equivalents paid in cash.
The following table reconciles Adjusted EBITDA to
the most directly comparable GAAP financial and liquidity measures
for the periods presented, and further reconciles Adjusted EBITDA
for the three months and year ended December 31, 2016 and 2015 to
distributable cash flow attributable to the Partnership:
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
(in thousands) |
Reconciliation
to Net Cash Provided by Operating Activities: |
|
|
|
|
|
|
|
|
Net cash
provided by operating activities |
|
$ |
14,972 |
|
|
$ |
14,028 |
|
|
$ |
56,565 |
|
|
$ |
5,248 |
|
Plus: |
|
|
|
|
|
|
|
|
Cash
interest expense related to operating activities |
|
1,274 |
|
|
1,540 |
|
|
5,283 |
|
|
1,877 |
|
Changes
in working capital |
|
3,193 |
|
|
(2,749 |
) |
|
6,996 |
|
|
9,808 |
|
Other |
|
— |
|
|
— |
|
|
— |
|
|
(327 |
) |
Adjusted
EBITDA |
|
19,439 |
|
|
12,819 |
|
|
68,844 |
|
|
16,606 |
|
Less: |
|
|
|
|
|
|
|
|
Predecessor Adjusted EBITDA |
|
— |
|
|
— |
|
|
— |
|
|
(3,494 |
) |
Cash
interest expense related to operating activities |
|
1,274 |
|
|
1,540 |
|
|
5,283 |
|
|
1,878 |
|
Maintenance capital expenditures |
|
97 |
|
|
65 |
|
|
380 |
|
|
69 |
|
Distribution equivalents paid in cash(1) |
|
— |
|
|
174 |
|
|
633 |
|
|
390 |
|
Distributable
cash flow |
|
$ |
18,068 |
|
|
$ |
11,040 |
|
|
$ |
62,548 |
|
|
$ |
17,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Represents distribution equivalents paid in cash in respect of the
applicable period to the extent reflected as changes in
equity. |
The following table provides the calculation of
Adjusted EBITDA as defined above:
|
Three months ended December 31, |
|
Year ended December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
(in thousands) |
Net income
(loss) |
$ |
(13,721 |
) |
|
$ |
5,275 |
|
|
$ |
(206 |
) |
|
$ |
61 |
|
Add: |
|
|
|
|
|
|
|
Interest
expense, net |
1,612 |
|
|
1,855 |
|
|
6,622 |
|
|
2,405 |
|
Depreciation and amortization expense |
3,414 |
|
|
3,313 |
|
|
13,531 |
|
|
5,978 |
|
Changes
to deferred revenue, net |
9,495 |
|
|
(106 |
) |
|
23,313 |
|
|
— |
|
Equity-based compensation expense |
12,172 |
|
|
1,085 |
|
|
16,106 |
|
|
2,374 |
|
Non-cash
contribution for general and administrative expense |
6,467 |
|
|
1,397 |
|
|
9,478 |
|
|
3,305 |
|
Non-cash
impairment on long-term assets |
— |
|
|
— |
|
|
— |
|
|
2,483 |
|
Adjusted
EBITDA |
$ |
19,439 |
|
|
$ |
12,819 |
|
|
$ |
68,844 |
|
|
$ |
16,606 |
|
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