ITEM 8.01. Other
Events.
On November 14, 2007 and November 15-16, 2007,
Frank Semple, President and Chief Executive Officer, and Nancy Buese, Senior
Vice President and Chief Financial Officer, of MarkWest Hydrocarbon, Inc. (the Company),
will give presentations to investors in Houston and Dallas, Texas,
respectively, which will include
information regarding the proposed transaction that resulted from the signing
of an Agreement and Plan of Redemption and Merger on September 5, 2007, by and
among MarkWest Energy Partners L.P., MarkWest Hydrocarbon, Inc. and MWEP,
L.L.C.
The information included with this Current
Report as Exhibit 99.1 includes graphic images or slides used in the
presentation.
This presentation utilizes the Non-GAAP financial
measures of Adjusted EBITDA and Distributable Cash Flow. We define Adjusted EBITDA as net income or
loss before interest, provision for income taxes, depreciation and amortization
expense, non-cash compensation expense, and non-cash unrealized derivative gain
/ loss. Adjusted EBITDA is not a measure
of performance calculated in accordance with GAAP, and should not be considered
in isolation or as a substitute for net income, income from operations, or cash
flow as reflected in our financial statements. Adjusted EBITDA is presented
because such information is relevant and is used by management, industry
analysts, investors, lenders, and rating agencies to assess the financial
performance and operating results of our fundamental business activities.
Management believes that the presentation of Adjusted EBITDA is useful to
lenders and investors because of its use in the midstream natural gas industry
and for master limited partnerships as an indicator of the strength and
performance of our ongoing business operations. Additionally, management
believes that Adjusted EBITDA provides additional and useful information to our
investors for trending, analyzing, and benchmarking our operating results from
period to period as compared to other companies that may have different
financing and capital structures. The presentation of Adjusted EBITDA allows
investors to view our performance in a manner similar to the methods used by
management and provides additional insight to our operating results. In general, we define Distributable Cash Flow
as net income or loss plus (i) depreciation, amortization, and accretion
expense; (ii) non-cash earnings from unconsolidated affiliates; (iii)
contributions to unconsolidated affiliates net of expansion capital
expenditures; (iv) non-cash compensation expense; (v) non-cash derivative
activity; (vi) gains and losses on the sale of assets; and (vii) the
subtraction of sustaining capital expenditures. Distributable Cash Flow is a significant
liquidity metric used by our senior management to compare basic cash flows
generated by us to the cash distributions we expect to pay partners.
Distributable cash flow is also an important Non-GAAP financial measure for our
limited partners since it serves as an indicator of our success in providing a
cash return on investment. Distributable cash flow is also a quantitative
standard used by the investment community with respect to publicly traded
partnerships such as ours because the value of a partnership unit is in part
measured by its yield (which in turn is based on the amount of cash
distributions a partnership pays to a unit holder). The GAAP measure most
directly comparable to Distributable Cash Flow and Adjusted EBITDA is net
income. Please see the Appendix for our
calculations of Adjusted EBITDA and Distributable Cash Flow along with the
appropriate reconciliations.
Cautionary Statements
This
presentation includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements other than statements of
historical facts included or incorporated herein may constitute forward-looking
statements. Actual results could vary
significantly from those expressed or implied in such statements and are
subject to a number of risks and uncertainties.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we can give no assurance that such
expectations will prove to be correct.
The forward-looking statements involve risks and uncertainties that
affect our operations, financial performance and other factors as discussed in
our filings with the Securities and Exchange Commission. Among the factors that could cause results to
differ materially are those risks discussed in our Form 10-K/A for the year
ended December 31, 2006, as filed with the SEC.
You are urged to carefully
review and consider the cautionary statements and other disclosures made in
those filings, specifically those under the heading Risk Factors. We do not undertake any duty to update any
forward-looking statement.
Although we
believe that the expectations reflected in the forward-looking statements,
specifically those including those referring to future performance, growth,
cash flow, operating income, distributable cash flow (DCF), distributions, or
other factors, are reasonable, these forward-looking statements are not
guarantees of future performance and we can give no assurance that such
expectations will prove to be correct and that projected performance or
distributions may not be achieved. Among
the factors that could cause results to differ materially are those risks discussed
in our Annual Report on Form 10-K/A for the year ended December 31, 2006, and
our Quarterly Reports on Form 10-Q, as amended, each as filed with the
SEC. You are also urged to carefully
review and consider the cautionary statements and other disclosures, including
those under the
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heading Risk Factors, made in those filings, which identify and
discuss significant risks, uncertainties and various other factors that could
cause actual results to vary significantly from those expressed or implied in
the forward-looking statements. We do
not undertake any duty to update any forward-looking statement.
On November 14,
2007, MarkWest Energy Partners and MarkWest Hydrocarbon filed a joint proxy
statement/prospectus and other documents with the Securities and Exchange
Commission (the SEC) in relation to the merger transaction announced on
September 5, 2007. Investors and
security holders are urged to read these documents carefully because they
contain important information regarding MarkWest Energy Partners, MarkWest
Hydrocarbon, and the transaction. A definitive joint proxy statement/prospectus
will be sent to security holders of MarkWest Energy Partners and MarkWest
Hydrocarbon seeking their approval of the transactions contemplated by the
redemption and merger agreement. Investors and security holders may obtain a
free copy of the joint proxy statement/prospectus (when it is available) and
other documents containing information about MarkWest Energy Partners and
MarkWest Hydrocarbon, without charge, at the SECs website at www.sec.gov.
Copies of the joint proxy statement/prospectus and the SEC filings that will be
incorporated by reference in the joint proxy statement/prospectus may also be
obtained free of charge by directing a request to the entities investor
relations department at 866-858-0482, or by accessing their website at
www.markwest.com.
MarkWest Energy
Partners, MarkWest Hydrocarbon, the officers and directors of the general
partner of MarkWest Energy Partners, and the officers and directors of MarkWest
Hydrocarbon may be deemed to be participants in the solicitation of proxies
from their security holders. Information about these persons can be found in
the Annual Report on Form 10-K/A for the year ended December 31, 2006, for each
of MarkWest Energy Partners and MarkWest Hydrocarbon, as filed with the SEC,
and additional information about such persons may be obtained from the joint
proxy statement/prospectus when it becomes available.
This document
shall not constitute an offer to sell or the solicitation of an offer to buy
any securities, nor shall there be any sale of securities in any jurisdiction
in which such offer, solicitation, or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of the Securities Act of 1933, as amended.
ITEM 9.01. Financial Statements and
Exhibits
(d) Exhibits.
Exhibit No.
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Description of Exhibit
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99.1
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Investor presentation
presented November 14, 2007 in Houston, Texas, and November 15-16, 2007 at
the RBC Capital Markets MLP Conference in Dallas, Texas.
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