UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event
reported): February 16, 2016
MIDCOAST ENERGY PARTNERS, L.P.
(Exact Name of Registrant as Specified
in Charter)
| DELAWARE |
1-36175 |
61-1714064 |
|
(State or Other Jurisdiction
of Incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
1100 LOUISIANA, SUITE 3300, HOUSTON,
TEXAS 77002
(Address of Principal Executive Offices)
(Zip Code)
(713) 821-2000
(Registrant’s telephone number,
including area code)
Not Applicable
(Former Name or Former Address, if Changed
Since Last Report)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial
Condition.
We issued a press release on February 16,
2016 announcing our financial results for the three and twelve months ended December 31, 2015, which is attached hereto as Exhibit
99.1. As noted in the press release, a copy of our unaudited condensed consolidated financial statements for the year ended December
31, 2015 is available on our website at www.midcoastpartners.com and is attached hereto as Exhibit 99.2. This information is not
deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not
incorporated by reference into any registration statements filed under the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Reference is made to the “Index of
Exhibits” following the signature page, which is hereby incorporated into this Item.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned there unto duly
authorized.
| |
MIDCOAST ENERGY PARTNERS, L.P.
(Registrant) |
| |
|
| |
|
|
| |
By: |
Midcoast Holdings, L.L.C. |
| |
|
its General Partner |
| |
|
|
| Date: February 16, 2016 |
By: |
/s/ Noor Kaissi
|
| |
|
Noor Kaissi
Controller
(Duly Authorized Officer) |
Index of Exhibits
Exhibit
Number |
|
Description |
| |
|
|
| 99.1 |
|
Press release of Midcoast Energy Partners, L.P., dated February 16, 2016 reporting financial results for the three and twelve months ended December 31, 2015 |
| |
|
|
| 99.2 |
|
Unaudited condensed consolidated financial statements of Midcoast Energy Partners, L.P. for the year ended December 31, 2015 |
Exhibit 99.1
NEWS RELEASE
Midcoast Energy Partners,
L.P. Reports 2015 Earnings and Announces 2016 Financial Guidance
HOUSTON — (February 16, 2016)
-
2015 HIGHLIGHTS
| · | Exceeded the top-end of previously communicated
full year 2015 adjusted EBITDA and distributable cash flow guidance. |
| · | Full-year 2015 adjusted EBITDA and distributable
cash flow of $104.1 and $73.4 million, respectively; distribution coverage of 1.12x. |
| · | Achieved over $70 million of annual operating
& administrative cost reductions in 2015. |
| · | Extended reach and enhanced capabilities
of East Texas system with Eaglebine investments and Beckville plant start-up. |
| · | Enhanced business focus and efficiencies
with divestiture of certain non-core assets. |
| · | Commodity-based cash flows are greater
than 90 percent hedged for 2016. |
| · | Distribution agreement in place with
sponsor to support 1.0x coverage through 2017. (1) |
Midcoast Energy Partners, L.P. (NYSE:MEP)
("Midcoast Partners" or "the Partnership") reports adjusted EBITDA and distributable cash flow for the three
months ended December 31, 2015 of $26.6 million and $16.5 million, respectively. Full-year 2015 adjusted EBITDA and distributable
cash flow were $104.1 million and $73.4 million, respectively.
“We are pleased with MEP’s
solid financial and operational performance in 2015. We have executed a number of actions to strengthen our underlying business
and have made significant progress advancing our strategic initiatives. Midcoast took early action in late 2014 and 2015 to establish
a more sustainable cost structure aligned with current operational levels, and we exceeded our target by reducing annual operating
and administrative expenses by over $70 million. Additionally, the divestiture of certain non-core assets has enhanced the Partnership’s
focus on our core gathering and processing business,” said C. Gregory Harper, president for the Partnership.
“Our industry remains in a weak commodity
price cycle, which is expected to persist well into 2016. We anticipate low commodity market fundamentals to continue to weigh
on our producer customers’ drilling programs, which we expect will result in lower volumes on our natural gas and NGL systems.
As such, our adjusted EBITDA and distributable cash flow outlook for 2016 is expected to decrease compared to 2015. Our hedging
program has been effective in securing greater than 90 percent of forecasted commodity-based cash flows for 2016 at weighted average
hedge prices well above current market levels. Our team remains focused on executing on our strategic priorities and attracting
and securing new low-risk business to our systems. These near to medium-term challenges highlight the importance of having a strong
sponsor to provide support, if needed,” Harper continued.
“Our sponsor, Enbridge Energy Partners,
L.P. (“EEP”), took action in July 2015 to support 1.0 times coverage through 2017, if needed. For the fourth quarter,
we maintained the cash distribution consistent with the prior quarter to preserve cash flow and enhance the Partnership’s
financial flexibility. We anticipate minimal growth capital expenditures for 2016 and expect to build upon our successful cost
management initiatives executed in 2015. We intend to pursue additional opportunities to further reduce operating costs, commensurate
with activity levels, and to rationalize other non-core assets. Collectively, the actions taken by MEP and those announced by our
sponsor, are expected to enhance our competitiveness and position MEP to respond as commodity market fundamentals improve,”
added Harper.
2016 Business Outlook - We
expect full year MEP Adjusted EBITDA and distributable cash flow to be between $55 and $75 million and between $25 and $40 million,
respectively, and coverage of 1.0 times with sponsor support.
| (1) | As previously disclosed, distribution agreement in place with sponsor to support 1.0x coverage
of the then declared distribution with a term through 2017, and no requirement for MEP to reimburse EEP for adjusted distributions. |
COMPARATIVE EARNINGS STATEMENT
The financial
results for the three and twelve months ended December 31, 2015 for Midcoast Partners are presented on a consolidated basis. On
July 1, 2014, we acquired an additional 12.6 percent interest in Midcoast Operating. Beginning July 1, 2014, we own a 51.6 percent
controlling interest in Midcoast Operating, and for three and twelve months ended December 31, 2015, we
consolidated the results of operations of Midcoast Operating and recorded a 48.4 percent non-controlling interest deduction for
EEP’s interest in Midcoast Operating.
COMPARATIVE
EARNINGS STATEMENT
| | |
Three months ended | | |
Twelve months ended | |
| | |
December 31, | | |
December 31, | |
| (unaudited, dollars in millions except per unit amounts) | |
2015 | |
2014 | |
2015 | |
2014 |
| Operating revenue | |
$ | 528.1 | | |
$ | 1,451.2 | | |
$ | 2,842.7 | | |
$ | 5,894.3 | |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | |
| Cost of natural gas and natural gas liquids | |
| 400.5 | | |
| 1,159.2 | | |
| 2,372.9 | | |
| 5,145.9 | |
| Operating and maintenance | |
| 66.2 | | |
| 93.0 | | |
| 273.1 | | |
| 339.5 | |
| General and administrative | |
| 21.5 | | |
| 30.1 | | |
| 82.6 | | |
| 104.8 | |
| Goodwill impairment | |
| - | | |
| - | | |
| 226.5 | | |
| - | |
| Asset impairment | |
| - | | |
| - | | |
| 12.3 | | |
| - | |
| Depreciation and amortization | |
| 39.5 | | |
| 38.1 | | |
| 157.8 | | |
| 151.4 | |
| Operating income (loss) | |
| 0.4 | | |
| 130.8 | | |
| (282.5 | ) | |
| 152.7 | |
| Interest expense | |
| (8.0 | ) | |
| (7.0 | ) | |
| (29.5 | ) | |
| (16.7 | ) |
| Other income | |
| 8.6 | | |
| 6.5 | | |
| 28.9 | | |
| 12.9 | |
| Income (loss) before income tax expense | |
| 1.0 | | |
| 130.3 | | |
| (283.1 | ) | |
| 148.9 | |
| Income tax expense | |
| - | | |
| (1.9 | ) | |
| (1.4 | ) | |
| (4.6 | ) |
| Net income (loss) | |
| 1.0 | | |
| 128.4 | | |
| (284.5 | ) | |
| 144.3 | |
| | |
| | | |
| | | |
| | | |
| | |
| Less: Net income (loss) attributable to noncontrolling | |
| | | |
| | | |
| | | |
| | |
| interest | |
| 4.8 | | |
| 66.4 | | |
| (120.6 | ) | |
| 80.2 | |
| Net income (loss) attributable to general and limited partner | |
| | | |
| | | |
| | | |
| | |
| ownership interest in Midcoast Energy Partners, L.P. | |
$ | (3.8 | ) | |
$ | 62.0 | | |
$ | (163.9 | ) | |
$ | 64.1 | |
| | |
| | | |
| | | |
| | | |
| | |
| Net income (loss) attributable to limited partners | |
$ | (3.7 | ) | |
$ | 60.8 | | |
$ | (160.5 | ) | |
$ | 62.8 | |
| Weighted average limited partner units (millions) | |
| 45.2 | | |
| 45.2 | | |
| 45.2 | | |
| 45.2 | |
| Net income (loss) per limited partner unit (dollars) | |
$ | (0.08 | ) | |
$ | 1.34 | | |
$ | (3.55 | ) | |
$ | 1.39 | |
COMPARISON OF QUARTERLY RESULTS
Following
are explanations for significant changes in Midcoast Operating’s financial results, comparing the three and twelve months ended December 31, 2015 with the same periods of 2014. The comparison refers to adjusted operating income, which excludes
the effect of non-cash and other items that are not indicative of our core operating results
(see Non-GAAP Reconciliations section below).
| Midcoast Operating | |
Three months ended | | |
Twelve months ended | |
| Adjusted Operating Income | |
December 31, | | |
December 31, | |
| (unaudited, dollars in millions) | |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| Gathering, Processing and Transportation | |
$ | (6.4 | ) | |
$ | (10.3 | ) | |
$ | 10.3 | | |
$ | 0.3 | |
| Logistics and Marketing | |
| 11.4 | | |
| 15.4 | | |
| 14.3 | | |
| 14.9 | |
| Adjusted operating income | |
| 5.0 | | |
| 5.1 | | |
| 24.6 | | |
| 15.2 | |
| | |
| | | |
| | | |
| | | |
| | |
| MEP Corporate | |
| (0.8 | ) | |
| (2.0 | ) | |
| (4.7 | ) | |
| (5.7 | ) |
| Adjusted operating income | |
$ | 4.2 | | |
$ | 3.1 | | |
$ | 19.9 | | |
$ | 9.5 | |
Gathering, Processing and Transportation
– Fourth quarter adjusted operating results for the Gathering, Processing and Transportation segment were $3.9 million higher
than the same period of 2014. The increase in adjusted operating income was primarily attributable to lower operating and administrative
expenses attributable to enacted cost reduction measures. The increase was partially offset by a decrease in natural gas and NGL
system volumes.
| Midcoast Operating | |
Three months ended | | |
Twelve months ended | |
| Gathering, Processing and Transportation Throughput | |
December 31, | | |
December 31, | |
| (MMBtu per day) | |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| East Texas | |
| 915,000 | | |
| 1,056,000 | | |
| 964,000 | | |
| 1,030,000 | |
| Anadarko | |
| 707,000 | | |
| 858,000 | | |
| 773,000 | | |
| 827,000 | |
| North Texas | |
| 239,000 | | |
| 297,000 | | |
| 265,000 | | |
| 293,000 | |
| Total | |
| 1,861,000 | | |
| 2,211,000 | | |
| 2,002,000 | | |
| 2,150,000 | |
| | |
| | | |
| | | |
| | | |
| | |
| NGL Production | |
| | | |
| | | |
| | | |
| | |
| (Barrels per day) | |
| 2015 | | |
| 2014 | | |
| 2015 | | |
| 2014 | |
| Total System Production | |
| 79,064 | | |
| 86,136 | | |
| 81,632 | | |
| 83,675 | |
Logistics and Marketing –
Fourth quarter adjusted operating results for the Logistics and Marketing segment were $4.0 million lower than the same period
of 2014. The decrease in adjusted operating income was predominately attributable to a decrease in commodity prices and reduced
system volumes from lower drilling activity in our asset regions. Lower adjusted operating income was partially offset by lower
operating and administrative expenses attributable to enacted cost reduction measures.
MANAGEMENT REVIEW OF QUARTERLY RESULTS
AND 2016 FINANCIAL OUTLOOK
Midcoast Partners will host a conference
call at 8:30 a.m. Eastern Time on Wednesday, February 17, 2016 to review its fourth quarter 2015 financial results and present
its 2016 Financial Outlook. The call will be webcast live over the internet and may be accessed on the Midcoast Partners website
under “Events and Presentations” or directly at http://edge.media-server.com/m/p/47ib7pry.
Presentation slides and condensed financial
statements will also be available on the Partnership’s website at the link below.
MEP Events and Presentations:
http://www.midcoastpartners.com/Investor-Relations/Events-and-Presentations/
Replay Information
A webcast replay and audio replay will
be available approximately two hours after the conclusion of the event through March 2, 2016. A transcript will be posted to the
website within approximately 24 hours.
Webcast
link: http://edge.media-server.com/m/p/47ib7pry
| Audio replay by telephone: |
Toll-free (855) 859-2056 |
| |
International (404) 537-3406 |
| |
Passcode 29200140 |
NON-GAAP RECONCILIATIONS
Adjusted net income and adjusted operating
income for the principal business segments are provided to illustrate trends in income excluding non-cash unrealized derivative
fair value losses and gains and other items that are not indicative of our core operating results. The derivative non-cash losses
and gains result from marking to market certain financial derivatives used by the Partnership for hedging purposes that do not
qualify for hedge accounting treatment in accordance with the authoritative accounting guidance as prescribed under generally accepted
accounting principles in the United States.
| Midcoast Energy Partners | |
Three months ended | | |
Twelve months ended | |
| Adjusted Earnings | |
December 31, | | |
December 31, | |
| (unaudited; dollars in millions except per unit amounts) | |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| Net income (loss) attributable to general and limited partner | |
| | | |
| | | |
| | | |
| | |
| ownership interests in Midcoast Energy Partners, L.P. | |
$ | (3.8 | ) | |
$ | 62.0 | | |
$ | (163.9 | ) | |
$ | 64.1 | |
| Noncash derivative fair value losses (gains) | |
| | | |
| | | |
| | | |
| | |
| -Gathering, Processing and Transportation | |
| (0.1 | ) | |
| (66.9 | ) | |
| 18.2 | | |
| (68.0 | ) |
| -Logistics and Marketing | |
| 2.5 | | |
| (8.8 | ) | |
| 11.0 | | |
| (14.5 | ) |
| Make-up rights adjustment | |
| 0.1 | | |
| 0.2 | | |
| (0.4 | ) | |
| 1.7 | |
| Option premium amortization | |
| (0.5 | ) | |
| (0.7 | ) | |
| (3.3 | ) | |
| (2.4 | ) |
| Loss on sale of non-core assets | |
| - | | |
| - | | |
| 1.6 | | |
| - | |
| Loss on natural gas contracts assignment | |
| - | | |
| - | | |
| 5.3 | | |
| - | |
| Asset impairment | |
| - | | |
| 8.1 | | |
| 6.3 | | |
| 8.1 | |
| Goodwill impairment | |
| - | | |
| - | | |
| 116.9 | | |
| - | |
| Severance costs | |
| - | | |
| 2.5 | | |
| - | | |
| 2.5 | |
| Adjusted net loss | |
$ | (1.8 | ) | |
$ | (3.6 | ) | |
$ | (8.3 | ) | |
$ | (8.5 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Adjusted net loss attributable to limited partners | |
$ | (1.7 | ) | |
$ | (3.5 | ) | |
$ | (8.0 | ) | |
$ | (8.3 | ) |
| Weighted average units (millions) | |
| 45.2 | | |
| 45.2 | | |
| 45.2 | | |
| 45.2 | |
| Adjusted net loss per limited partner unit (dollars) | |
$ | (0.04 | ) | |
$ | (0.08 | ) | |
$ | (0.18 | ) | |
$ | (0.18 | ) |
| Midcoast Operating | |
Three months ended | | |
Twelve months ended
| |
| Gathering, Processing and Transportation | |
December 31, | | |
December 31, | |
| (unaudited; dollars in millions) | |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| Operating income (loss) | |
$ | (5.2 | ) | |
$ | 100.7 | | |
$ | (224.2 | ) | |
$ | 114.9 | |
| Noncash derivative fair value losses (gains) | |
| (0.2 | ) | |
| (129.6 | ) | |
| 35.3 | | |
| (129.2 | ) |
| Option premium amortization | |
| (1.0 | ) | |
| (1.2 | ) | |
| (6.6 | ) | |
| (5.2 | ) |
| Gain on natural gas contracts assignment | |
| - | | |
| - | | |
| (0.3 | ) | |
| - | |
| Asset impairment | |
| - | | |
| 15.6 | | |
| - | | |
| 15.6 | |
| Goodwill impairment | |
| - | | |
| - | | |
| 206.1 | | |
| - | |
| Severance costs | |
| - | | |
| 4.2 | | |
| - | | |
| 4.2 | |
| Adjusted operating income (loss) | |
$ | (6.4 | ) | |
$ | (10.3 | ) | |
$ | 10.3 | | |
$ | 0.3 | |
| Midcoast Operating | |
Three months ended | | |
Twelve months ended | |
| Logistics and Marketing | |
December 31, | | |
December 31, | |
| (unaudited; dollars in millions) | |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| Operating income (loss) | |
$ | 6.4 | | |
$ | 32.1 | | |
$ | (53.6 | ) | |
$ | 43.5 | |
| Noncash derivative fair value losses (gains) | |
| 5.0 | | |
| (17.3 | ) | |
| 21.4 | | |
| (29.2 | ) |
| Loss on sale of non-core assets | |
| - | | |
| - | | |
| 3.2 | | |
| - | |
| Loss on natural gas contracts assignment | |
| - | | |
| - | | |
| 10.6 | | |
| - | |
| Asset impairment | |
| - | | |
| - | | |
| 12.3 | | |
| - | |
| Goodwill impairment | |
| - | | |
| - | | |
| 20.4 | | |
| - | |
| Severence costs | |
| - | | |
| 0.6 | | |
| - | | |
| 0.6 | |
| Adjusted operating income | |
$ | 11.4 | | |
$ | 15.4 | | |
$ | 14.3 | | |
$ | 14.9 | |
Adjusted EBITDA
Adjusted EBITDA (earnings before interest,
taxes, depreciation and amortization) is used as a supplemental financial measurement to assess liquidity and the ability to generate
cash sufficient to pay interest costs and make cash distributions to unitholders. The following reconciliation of net cash provided
by operating activities to adjusted EBITDA is provided because EBITDA is not a financial measure recognized under generally accepted
accounting principles. The table also references “MOLP Adjusted EBITDA, inclusive of other cash items”, representing
total cash flow generated by Midcoast Operating.
| Midcoast Operating | |
Three months ended | | |
Twelve months ended | |
| Adjusted EBITDA | |
December 31, | | |
December 31, | |
| (unaudited; dollars in millions) | |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| Net cash provided by operating activities | |
$ | 8.4 | | |
$ | 47.1 | | |
$ | 207.0 | | |
$ | 159.1 | |
| Changes in operating assets and liabilities, | |
| | | |
| | | |
| | | |
| | |
| net of cash acquired | |
| 35.2 | | |
| (6.5 | ) | |
| (32.3 | ) | |
| 0.2 | |
| Income tax expense | |
| - | | |
| 1.9 | | |
| 1.4 | | |
| 4.6 | |
| Interest expense | |
| 8.0 | | |
| 7.0 | | |
| 29.5 | | |
| 16.7 | |
| Option premium amortization | |
| (1.0 | ) | |
| (1.2 | ) | |
| (6.6 | ) | |
| (5.2 | ) |
| Other | |
| 1.6 | | |
| (0.2 | ) | |
| 6.6 | | |
| 2.3 | |
| Adjusted EBITDA attributable to EEP retained interest | |
| (25.6 | ) | |
| (24.0 | ) | |
| (101.5 | ) | |
| (99.6 | ) |
| Adjusted EBITDA attributable to MEP (1) | |
| 26.6 | | |
| 24.1 | | |
| 104.1 | | |
| 78.1 | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjusted EBITDA attributable to EEP retained interest | |
| 25.6 | | |
| 24.0 | | |
| 101.5 | | |
| 99.6 | |
| Other | |
| 0.8 | | |
| 1.5 | | |
| 4.3 | | |
| 4.8 | |
| Adjusted EBITDA attributable to MOLP (1) | |
$ | 53.0 | | |
$ | 49.6 | | |
$ | 209.9 | | |
$ | 182.5 | |
| | |
| | | |
| | | |
| | | |
| | |
| G&A abatement | |
| 6.2 | | |
| 6.2 | | |
| 25.0 | | |
| 25.0 | |
| Texas Express distributions in excess of equity earnings | |
| 1.8 | | |
| (0.2 | ) | |
| 12.0 | | |
| 4.6 | |
| MOLP adjusted EBITDA, inclusive of other cash items (1) | |
$ | 61.0 | | |
$ | 55.6 | | |
$ | 246.9 | | |
$ | 212.1 | |
| (1) | Adjusted EBITDA attributable to MEP is inclusive of public
partnership expenses. However, Adjusted EBITDA attributable to MOLP is not inclusive of public partnership expenses attributable
to MEP. |
MEP Adjusted EBITDA and Distributable Cash
Flow
| Midcoast Partners | |
Three months ended | | |
Twelve months ended | |
| Adjusted EBITDA | |
December 31, | | |
December 31, | |
| (unaudited; dollars in millions) | |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| Net cash provided by operating activities | |
$ | 8.4 | | |
$ | 47.1 | | |
$ | 207.0 | | |
$ | 159.1 | |
| Changes in operating assets and liabilities, | |
| | | |
| | | |
| | | |
| | |
| net of cash acquired | |
| 35.2 | | |
| (6.5 | ) | |
| (32.3 | ) | |
| 0.2 | |
| Income tax expense | |
| - | | |
| 1.9 | | |
| 1.4 | | |
| 4.6 | |
| Interest expense | |
| 8.0 | | |
| 7.0 | | |
| 29.5 | | |
| 16.7 | |
| Option premium amortization | |
| (1.0 | ) | |
| (1.2 | ) | |
| (6.6 | ) | |
| (5.2 | ) |
| Other | |
| 1.6 | | |
| (0.2 | ) | |
| 6.6 | | |
| 2.3 | |
| Adjusted EBITDA attributable to EEP retained interest | |
| (25.6 | ) | |
| (24.0 | ) | |
| (101.5 | ) | |
| (99.6 | ) |
| Adjusted EBITDA attributable to MEP | |
| 26.6 | | |
| 24.1 | | |
| 104.1 | | |
| 78.1 | |
| | |
| | | |
| | | |
| | | |
| | |
| Maintenance capital expenditures | |
| (6.2 | ) | |
| (6.9 | ) | |
| (19.0 | ) | |
| (25.0 | ) |
| Income tax expense (1) | |
| - | | |
| (1.9 | ) | |
| (0.7 | ) | |
| (4.6 | ) |
| Interest expense (1) | |
| (8.0 | ) | |
| (7.0 | ) | |
| (30.2 | ) | |
| (16.7 | ) |
| G&A abatement | |
| 3.2 | | |
| 3.3 | | |
| 13.0 | | |
| 11.5 | |
| Texas Express distribution in excess of equity earnings | |
| 0.9 | | |
| (0.1 | ) | |
| 6.2 | | |
| 1.9 | |
| Distributable cash flow | |
$ | 16.5 | | |
$ | 11.5 | | |
$ | 73.4 | | |
$ | 45.2 | |
| (1) | Effective 2015, distributable cash flow reflects accrued
amounts for interest and taxes. Prior periods previously reflected such amounts on a cash basis and have been adjusted to reflect
accrued amounts. |
About Midcoast Energy Partners, L.P.
Midcoast Energy Partners, L.P. (NYSE: MEP),
is a limited partnership formed by EEP to serve as EEP's primary vehicle for owning and growing its natural gas and natural gas
liquids (NGLs) midstream business in the United States. Our assets consist of a 51.6 percent controlling interest in Midcoast Operating,
L.P., a Texas limited partnership that owns a network of natural gas and NGL gathering and transportation systems, natural gas
processing and treating facilities and NGL fractionation facilities primarily located in Texas and Oklahoma. Midcoast Operating
also owns and operates natural gas, condensate and NGL logistics and marketing assets that primarily support its gathering, processing
and transportation business. Through our ownership of Midcoast Operating's general partner, we control, manage and operate these
systems.
EEP owns 100 percent of Midcoast Holdings,
LLC, the general partner of Midcoast Partners and holds an approximate 54 percent interest in Midcoast Partners. EEP owns and operates
a diversified portfolio of crude oil and, through Midcoast Partners, natural gas transportation systems in the United States. Its
principal crude oil system is the largest pipeline transporter of growing oil production from western Canada and the North Dakota
Bakken formation. EEP is recognized by Forbes as one of the 100 Most Trustworthy Companies in America.
Forward Looking Statements
This news release includes forward-looking
statements, which are statements that frequently use words such as "anticipate," "believe," "continue,"
"could," "estimate," "expect," "forecast," "intend," "may," "plan,"
"position," "projection," "should," "strategy," “opportunity,” "target,"
"will" and similar words. Although we believe that such forward-looking statements are reasonable based on currently
available information, such statements involve risks, uncertainties and assumptions and are not guarantees of performance. Future
actions, conditions or events and future results of operations may differ materially from those expressed in these forward-looking
statements. Many of the factors that will determine these results are beyond the ability of Midcoast Energy Partners, L.P. (the
“Partnership”) to control or predict. The Partnership’s forward looking statements are subject to risks and uncertainties
pertaining to operating performance, regulatory parameters, project approval and support, weather, economic conditions, interest
rates and commodity prices, including but not limited to the following specific factors that could cause actual results to differ
from those in the forward-looking statements: (1) changes in the demand for or the supply of, forecast data for, and price trends
related to natural gas, natural gas liquids and crude oil and the response by natural gas and crude oil producers to changes in
any of these factors; (2) the Partnership’s ability to successfully complete and finance expansion projects; (3) the effects
of competition, in particular, by other pipeline and gathering systems, as well as other processing and treating plants; (4) shut-downs
or cutbacks at the Partnership’s facilities or refineries, petrochemical plants, utilities or other businesses for which
the Partnership transports products or to whom the Partnership sells products; (5) hazards and operating risks that may not be
covered fully by insurance; (6) changes in or challenges to the Partnership’s rates; (7) changes in laws or regulations to
which the Partnership is subject, including compliance with environmental and operational safety regulations that may increase
costs of system integrity testing and maintenance; and (8) cost overruns and delays on construction projects resulting from numerous
factors.
Forward-looking statements regarding
“drop-down” opportunities are further qualified by the fact that Enbridge Energy Partners, L.P. is under no obligation
to offer to sell us additional interests in Midcoast Operating, L.P., and we are under no obligation to buy any such additional
interests. As a result, we do not know when or if any such additional interests will be purchased.
Except to the extent required by law,
we assume no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future
events or otherwise. Reference should also be made to the Partnership’s filings with the U.S. Securities and Exchange Commission
(the “SEC”), including its Annual Report on Form 10-K for the year ended December 31, 2014 and any subsequently filed
Quarterly Reports on Form 10-Q and current Reports on Form 8-K for additional factors that may affect results. These filings are
available to the public over the Internet at the SEC’s web site (www.sec.gov) and at the Partnership’s web site.
FOR FURTHER INFORMATION PLEASE CONTACT:
| Sanjay
Lad, CFA |
Terri
Larson, APR |
| |
|
| Investment
Community |
Media |
| |
|
| Toll-free:
(855) MEP-7222 or (855) 637-7222 |
Toll-free:
(877) 496-8142 |
| |
|
| E-mail:
mep@enbridge.com |
E-mail:
usmedia@enbridge.com |
# # #
Exhibit 99.2
MIDCOAST
ENERGY PARTNERS, L.P.
CONSOLIDATED
STATEMENTS OF INCOME
| | |
For the year ended December 31, | |
| | |
2015 | | |
2014 | | |
2013 | |
| | |
(unaudited; in millions, except per unit amounts) | |
| Operating revenues: | |
| | | |
| | | |
| | |
| Operating revenue | |
$ | 2,769.7 | | |
$ | 5,688.2 | | |
$ | 5,380.5 | |
| Operating revenue - affiliate | |
| 73.0 | | |
| 206.1 | | |
| 213.1 | |
| | |
| 2,842.7 | | |
| 5,894.3 | | |
| 5,593.6 | |
| Operating expenses: | |
| | | |
| | | |
| | |
| Cost of natural gas and natural gas liquids | |
| 2,295.1 | | |
| 5,026.7 | | |
| 4,817.5 | |
| Cost of natural gas and natural gas liquids - affiliate | |
| 77.8 | | |
| 119.2 | | |
| 119.6 | |
| Operating and maintenance | |
| 172.9 | | |
| 219.2 | | |
| 242.2 | |
| Operating and maintenance - affiliate | |
| 100.2 | | |
| 104.7 | | |
| 108.1 | |
| General and administrative | |
| 7.2 | | |
| 8.7 | | |
| - | |
| General and administrative - affiliate | |
| 75.4 | | |
| 96.1 | | |
| 98.2 | |
| Goodwill impairment | |
| 226.5 | | |
| - | | |
| - | |
| Asset impairment | |
| 12.3 | | |
| 15.6 | | |
| - | |
| Depreciation and amortization | |
| 157.8 | | |
| 151.4 | | |
| 142.9 | |
| | |
| 3,125.2 | | |
| 5,741.6 | | |
| 5,528.5 | |
| Operating income (loss) | |
| (282.5 | ) | |
| 152.7 | | |
| 65.1 | |
| Interest expense, net | |
| (29.5 | ) | |
| (16.7 | ) | |
| (1.7 | ) |
| Equity in earnings (losses) of joint ventures | |
| 29.2 | | |
| 13.2 | | |
| (1.0 | ) |
| Other loss | |
| (0.3 | ) | |
| (0.3 | ) | |
| (0.2 | ) |
| Income (loss) before income tax expense | |
| (283.1 | ) | |
| 148.9 | | |
| 62.2 | |
| Income tax expense | |
| (1.4 | ) | |
| (4.6 | ) | |
| (8.3 | ) |
| Net income (loss) | |
$ | (284.5 | ) | |
$ | 144.3 | | |
$ | 53.9 | |
| | |
| | | |
| | | |
| | |
| Less: Predecessor income prior to initial public offering | |
| | | |
| | | |
| | |
| (from January 1, 2013 through November 12, 2013) | |
| | | |
| | | |
| 56.3 | |
| Net loss subsequent to initial public offering to | |
| | | |
| | | |
| | |
| Midcoast Energy Partners, L.P. (from November 13, 2013 through | |
| | | |
| | | |
| | |
| December 31, 2013) | |
| | | |
| | | |
| (2.4 | ) |
| | |
| | | |
| | | |
| | |
| Less: Net income (loss) attributable to noncontrolling interest | |
| (120.6 | ) | |
| 80.2 | | |
| (0.6 | ) |
| Net income (loss) attributable to general and limited partner ownership | |
| | | |
| | | |
| | |
| interest in Midcoast Energy Partners, L.P. | |
$ | (163.9 | ) | |
$ | 64.1 | | |
| (1.8 | ) |
| Net income (loss) attributable to limited partner ownership interest | |
$ | (160.5 | ) | |
$ | 62.8 | | |
$ | 19.7 | |
| Net income (loss) per limited partner unit (basic and diluted) | |
$ | (3.55 | ) | |
$ | 1.39 | | |
$ | 0.68 | |
| Weighted average limited partner units outstanding | |
| 45.2 | | |
| 45.2 | | |
| 29.2 | |
| Cash distributions paid per limited partner unit outstanding | |
$ | 1.40 | | |
$ | 1.14 | | |
$ | - | |
MIDCOAST ENERGY PARTNERS, L.P.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
| | |
For the year ended December 31, | |
| | |
2015 | | |
2014 | | |
2013 | |
| | |
(unaudited; in millions) | |
| Cash provided by operating activities: | |
| | | |
| | | |
| | |
| Net income (loss) | |
$ | (284.5 | ) | |
$ | 144.3 | | |
$ | 53.9 | |
| Adjustments to reconcile net income (loss) to net cash provided | |
| | | |
| | | |
| | |
| by operating activities: | |
| | | |
| | | |
| | |
| Depreciation and amortization | |
| 157.8 | | |
| 151.4 | | |
| 142.9 | |
| Derivative fair value net losses (gains) | |
| 58.3 | | |
| (158.4 | ) | |
| 3.0 | |
| Inventory market price adjustments | |
| 5.8 | | |
| 11.4 | | |
| 3.4 | |
| Asset impairment | |
| 12.3 | | |
| 15.6 | | |
| - | |
| Distributions from investment in joint ventures | |
| 29.2 | | |
| 12.2 | | |
| - | |
| Equity loss (earnings) from investment in joint ventures | |
| (29.2 | ) | |
| (13.2 | ) | |
| 1.0 | |
| Deferred income taxes | |
| 0.1 | | |
| 3.1 | | |
| 7.3 | |
| Loss on sale of net assets | |
| 3.2 | | |
| - | | |
| - | |
| Goodwill impairment | |
| 226.5 | | |
| - | | |
| - | |
| Other | |
| 0.9 | | |
| 1.2 | | |
| 0.3 | |
| Changes in operating assets and liabilities, net of acquisitions: | |
| | | |
| | | |
| | |
| Receivables, trade and other | |
| 2.9 | | |
| 33.2 | | |
| 7.9 | |
| Due from General Partner and affiliates | |
| 12.1 | | |
| 608.6 | | |
| (633.9 | ) |
| Accrued receivables | |
| 173.5 | | |
| (47.4 | ) | |
| 295.6 | |
| Inventory | |
| 43.8 | | |
| (4.9 | ) | |
| (12.2 | ) |
| Current and long-term other assets | |
| 10.1 | | |
| (23.9 | ) | |
| (14.3 | ) |
| Due to General Partner and affiliates | |
| 29.6 | | |
| (468.2 | ) | |
| 522.8 | |
| Accounts payable and other | |
| (11.7 | ) | |
| (21.2 | ) | |
| 34.6 | |
| Accrued purchases | |
| (231.4 | ) | |
| (90.5 | ) | |
| 4.9 | |
| Interest payable | |
| 0.2 | | |
| 4.7 | | |
| 0.3 | |
| Property and other taxes payable | |
| (2.5 | ) | |
| 1.1 | | |
| 3.4 | |
| Net cash provided by operating activities | |
| 207.0 | | |
| 159.1 | | |
| 420.9 | |
| | |
| | | |
| | | |
| | |
| Cash used in investing activities: | |
| | | |
| | | |
| | |
| Additions to property, plant and equipment | |
| (191.1 | ) | |
| (237.7 | ) | |
| (273.4 | ) |
| Changes in restricted cash | |
| 28.2 | | |
| 18.7 | | |
| (61.5 | ) |
| Acquisitions | |
| (43.8 | ) | |
| (0.2 | ) | |
| (0.9 | ) |
| Proceeds from the sale of net assets | |
| 2.5 | | |
| - | | |
| 5.0 | |
| Investment in joint ventures | |
| (4.2 | ) | |
| (36.7 | ) | |
| (188.6 | ) |
| Distributions from investment in joint ventures in excess of cumulative earnings | |
| 12.0 | | |
| 27.8 | | |
| - | |
| Other | |
| (1.0 | ) | |
| (3.2 | ) | |
| (2.9 | ) |
| Net cash used in investing activities | |
| (197.4 | ) | |
| (231.3 | ) | |
| (522.3 | ) |
| | |
| | | |
| | | |
| | |
| Cash provided by financing activities: | |
| | | |
| | | |
| | |
| Proceeds from long-term debt, net of discounts | |
| - | | |
| 398.1 | | |
| - | |
| Net borrowings under credit facility | |
| 130.0 | | |
| 25.0 | | |
| 335.0 | |
| Debt origination fees | |
| - | | |
| - | | |
| (3.0 | ) |
| Net proceeds from unit issuances | |
| - | | |
| - | | |
| 354.9 | |
| Acquisition of noncontrolling interest in subsidiary | |
| - | | |
| (350.0 | ) | |
| - | |
| Contributions from Predecessor partner interests | |
| - | | |
| - | | |
| 341.9 | |
| Contribution from noncontrolling interest | |
| 40.7 | | |
| 142.8 | | |
| - | |
| Distributions to Predecessor partner interests | |
| - | | |
| - | | |
| (247.7 | ) |
| Distributions to partners | |
| (64.6 | ) | |
| (52.7 | ) | |
| - | |
| Distributions to noncontrolling interest | |
| (97.7 | ) | |
| (95.9 | ) | |
| - | |
| Distribution to EEP for net assets contributed | |
| - | | |
| - | | |
| (674.8 | ) |
| Net cash provided by financing activities | |
| 8.4 | | |
| 67.3 | | |
| 106.3 | |
| | |
| | | |
| | | |
| | |
| Net increase (decrease) in cash and cash equivalents | |
| 18.0 | | |
| (4.9 | ) | |
| 4.9 | |
| Cash and cash equivalents at beginning of year | |
| - | | |
| 4.9 | | |
| - | |
| Cash and cash equivalents at end of period | |
$ | 18.0 | | |
$ | - | | |
$ | 4.9 | |
MIDCOAST ENERGY PARTNERS, L.P.
CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
| | |
December 31, | |
| | |
2015 | | |
2014 | |
| | |
(unaudited; in millions) | |
| ASSETS | |
| | | |
| | |
| Current assets: | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 18.0 | | |
$ | - | |
| Restricted cash | |
| 20.6 | | |
| 42.8 | |
| Receivables, trade and other, net of allowance for doubtful accounts | |
| | | |
| | |
| of $2.5 million in 2015 and $1.8 million in 2014 | |
| 13.3 | | |
| 15.6 | |
| Due from General Partner and affiliates | |
| 47.0 | | |
| 49.7 | |
| Accrued receivables | |
| 56.1 | | |
| 229.6 | |
| Inventory | |
| 31.9 | | |
| 81.5 | |
| Other current assets | |
| 118.5 | | |
| 178.1 | |
| | |
| 305.4 | | |
| 597.3 | |
| Property, plant and equipment, net | |
| 4,226.3 | | |
| 4,159.7 | |
| Goodwill | |
| - | | |
| 226.5 | |
| Intangible assets, net | |
| 272.9 | | |
| 247.7 | |
| Equity investment in joint ventures | |
| 372.3 | | |
| 380.6 | |
| Other assets, net | |
| 97.0 | | |
| 142.3 | |
| Total assets | |
$ | 5,273.9 | | |
$ | 5,754.1 | |
| LIABILITIES AND PARTNERS’ CAPITAL | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Due to General Partner and affiliates | |
$ | 45.7 | | |
$ | 41.1 | |
| Accounts payable and other | |
| 92.6 | | |
| 113.8 | |
| Accrued purchases | |
| 143.8 | | |
| 375.2 | |
| Property and other taxes payable | |
| 18.4 | | |
| 20.9 | |
| Interest payable | |
| 5.2 | | |
| 5.0 | |
| | |
| 305.7 | | |
| 556.0 | |
| Long-term debt | |
| 890.0 | | |
| 760.0 | |
| Other long-term liabilities | |
| 45.9 | | |
| 41.5 | |
| Total liabilities | |
| 1,241.6 | | |
| 1,357.5 | |
| | |
| | | |
| | |
| Commitments and contingencies | |
| | | |
| | |
| Partners’ capital: | |
| | | |
| | |
| Class A common units (22,610,056 authorized and issued at December 31, 2015 and 2014) | |
| 522.2 | | |
| 634.2 | |
| Subordinated units (22,610,056 authorized and issued at December 31, 2015 and 2014) | |
| 1,062.0 | | |
| 1,174.0 | |
| General Partner units (922,859 authorized and issued at December 31, 2015 and 2014) | |
| 43.3 | | |
| 47.8 | |
| Accumulated other comprehensive income (loss) | |
| (0.9 | ) | |
| 11.6 | |
| Total Midcoast Energy Partners, L.P. partners’ capital | |
| 1,626.6 | | |
| 1,867.6 | |
| Noncontrolling interest | |
| 2,405.7 | | |
| 2,529.0 | |
| Total partners’ capital | |
| 4,032.3 | | |
| 4,396.6 | |
| | |
$ | 5,273.9 | | |
$ | 5,754.1 | |
NET INCOME PER LIMITED PARTNER AND GENERAL
PARTNER INTEREST
We
allocate our net income among our General Partner and limited partners using the two-class method. Under the two-class method,
we allocate our net income to our limited partners, our General Partner and the holders of our incentive distribution rights, or
IDRs, in accordance with the terms of our partnership agreement. We also allocate any earnings in excess of distributions to our
limited partners, our General Partner and the holders of the IDRs in accordance with the terms of our partnership agreement. We
allocate any distributions in excess of earnings for the period to our General Partner and our limited partners based on their
respective proportionate ownership interests in us, after taking into account distributions to be paid with respect to the IDRs,
as set forth in our partnership agreement.
| Distribution Targets | |
Portion of Quarterly Distribution Per Unit | |
Percentage Distributed to Limited Partners | |
Percentage Distributed to General Partner |
| Minimum Quarterly Distribution | |
Up to $0.3125 | |
98% | |
2% |
| First Target Distribution | |
> $0.3125 to $0.359375 | |
98% | |
2% |
| Second Target Distribution | |
> $0.359375 to $0.390625 | |
85% | |
15% |
| Third Target Distribution | |
> $0.390625 to $0.468750 | |
75% | |
25% |
| Over Third Target Distribution | |
In excess of $0.468750 | |
50% | |
50% |
We
determined basic and diluted net income (loss) per limited partner unit as follows:
| | |
For the year ended December 31, | |
| | |
2015 | | |
2014 | | |
2013(1) | |
| | |
(unaudited; in millions, except per unit amounts) | |
| Net income (loss) | |
$ | (284.5 | ) | |
$ | 144.3 | | |
$ | 53.9 | |
| Less: Net income (loss) attributable to noncontrolling interest | |
| (120.6 | ) | |
| 80.2 | | |
| 33.7 | |
| Net income (loss) attributable to general and limited partner interests | |
| | | |
| | | |
| | |
| in Midcoast Energy Partners, L.P. | |
| (163.9 | ) | |
| 64.1 | | |
| 20.2 | |
| Less distributions: | |
| | | |
| | | |
| | |
| Total distributed earnings to our General Partner | |
| 1.2 | | |
| 1.2 | | |
| 0.8 | |
| Total distributed earnings to our limited partners | |
| 64.1 | | |
| 59.6 | | |
| 36.5 | |
| Total distributed earnings | |
| 65.3 | | |
| 60.8 | | |
| 37.3 | |
| Underdistributed (Overdistributed) earnings | |
$ | (229.2 | ) | |
$ | 3.3 | | |
$ | (17.1 | ) |
| Weighted average limited partner units outstanding | |
| 45.2 | | |
| 45.2 | | |
| 29.2 | |
| | |
| | | |
| | | |
| | |
| Basic and diluted earnings per unit: | |
| | | |
| | | |
| | |
| Distributed earnings per limited partner unit (2) | |
$ | 1.42 | | |
$ | 1.32 | | |
$ | 1.25 | |
| Underdistributed (Overdistributed) earnings per limited partner unit (3) | |
| (4.97 | ) | |
| 0.07 | | |
| (0.57 | ) |
| Net income (loss) per limited partner unit (basic and diluted) | |
$ | (3.55 | ) | |
$ | 1.39 | | |
$ | 0.68 | |
| (1) | Represents calculation
retrospectively reflecting the affiliate capitalization of MEP consisting of 4.1 million MEP Class A common units, 22.6 million
MEP subordinated units and MEP general partner interest upon the transfer of a controlling ownership, including limited partner
and general partner interest, in Midcoast Operating. The noncontrolling interest reflects the 61% that was retained by EEP. |
| (2) | Represents the total distributed
earnings to limited partners divided by the weighted average number of limited partner interests outstanding for the period. |
| (3) | Represents the limited
partners' share (98%) of distributions in excess of earnings divided by the weighted average number of limited partner interests
outstanding for the period and under distributed earnings allocated to the limited partners based on the distribution waterfall
that is outlined in our partnership agreement. |
SEGMENT INFORMATION
Our business is divided
into operating segments, defined as components of the enterprise, about which financial information is available and evaluated
regularly by our Chief Operating Decision Maker, collectively comprised of our senior management, in deciding how resources are
allocated and performance is assessed.
Each of our reportable segments is a business
unit that offers different services and products that are managed separately, since each business segment requires different operating
strategies. We conduct our business through two distinct reporting segments:
| • | Gathering, Processing, and Transportation; and |
| • | Logistics and Marketing. |
The following tables
present certain financial information relating to our business segments and corporate activities:
| | |
As of and for the year ended December 31, 2015 | |
| | |
Gathering, Processing and Transportation | | |
Logistics and Marketing | | |
Corporate (1) | | |
Total | |
| | |
(unaudited; in millions) | |
| Total revenue | |
$ | 1,445.1 | | |
$ | 2,290.5 | | |
$ | - | | |
$ | 3,735.6 | |
| Less: Intersegment revenue | |
| 856.6 | | |
| 36.3 | | |
| - | | |
| 892.9 | |
| Operating revenue | |
| 588.5 | | |
| 2,254.2 | | |
| - | | |
| 2,842.7 | |
| Cost of natural gas and natural gas liquids | |
| 173.8 | | |
| 2,199.1 | | |
| - | | |
| 2,372.9 | |
| Segment gross margin | |
| 414.7 | | |
| 55.1 | | |
| - | | |
| 469.8 | |
| Operating and maintenance | |
| 216.0 | | |
| 56.0 | | |
| 1.1 | | |
| 273.1 | |
| General and administrative | |
| 67.3 | | |
| 11.7 | | |
| 3.6 | | |
| 82.6 | |
| Goodwill impairment | |
| 206.1 | | |
| 20.4 | | |
| - | | |
| 226.5 | |
| Asset impairment | |
| - | | |
| 12.3 | | |
| - | | |
| 12.3 | |
| Depreciation and amortization | |
| 149.5 | | |
| 8.3 | | |
| - | | |
| 157.8 | |
| | |
| 638.9 | | |
| 108.7 | | |
| 4.7 | | |
| 752.3 | |
| Operating loss | |
| (224.2 | ) | |
| (53.6 | ) | |
| (4.7 | ) | |
| (282.5 | ) |
| Other income (expense) | |
| 29.3 | (2) | |
| - | | |
| (0.4 | ) | |
| 28.9 | |
| Interest expense, net | |
| - | | |
| - | | |
| (29.5 | ) | |
| (29.5 | ) |
| Loss before income tax expense | |
| (194.9 | ) | |
| (53.6 | ) | |
| (34.6 | ) | |
| (283.1 | ) |
| Income tax expense | |
| - | | |
| - | | |
| (1.4 | ) | |
| (1.4 | ) |
| Net loss | |
| (194.9 | ) | |
| (53.6 | ) | |
| (36.0 | ) | |
| (284.5 | ) |
| Less: Net loss attributable to noncontrolling interest | |
| - | | |
| - | | |
| (120.6 | ) | |
| (120.6 | ) |
| Net income (loss) attributable to general and limited
partner ownership interests in Midcoast Energy Partners, L.P. | |
$ | (194.9 | ) | |
$ | (53.6 | ) | |
$ | 84.6 | | |
$ | (163.9 | ) |
| Total assets | |
$ | 5,004.6 | (3) | |
$ | 182.6 | | |
$ | 86.7 | | |
$ | 5,273.9 | |
| Capital expenditures (excluding acquisitions) | |
$ | 162.3 | | |
$ | 11.3 | | |
$ | 4.9 | | |
$ | 178.5 | |
| (1) | Corporate consists of interest
expense, interest income, noncontrolling interest and other costs such as income taxes, which are not allocated to the business
segments. |
| (2) | Other income for our Gathering,
Processing and Transportation segment includes our equity investment in the Texas Express NGL system. |
| (3) | Total assets for our Gathering,
Processing and Transportation segment includes $372.3 million for our equity investment in the Texas Express NGL system. |
| | |
As of and for the year ended December 31, 2014 | |
| | |
Gathering, Processing and Transportation | | |
Logistics and Marketing | | |
Corporate (1) | | |
Total | |
| | |
(unaudited; in millions) | |
| Total revenue | |
$ | 2,611.2 | | |
$ | 5,329.8 | | |
$ | - | | |
$ | 7,941.0 | |
| Less: Intersegment revenue | |
| 1,963.9 | | |
| 82.8 | | |
| - | | |
| 2,046.7 | |
| Operating revenue | |
| 647.3 | | |
| 5,247.0 | | |
| - | | |
| 5,894.3 | |
| Cost of natural gas and natural gas liquids | |
| 27.1 | | |
| 5,118.8 | | |
| - | | |
| 5,145.9 | |
| Segment gross margin | |
| 620.2 | | |
| 128.2 | | |
| - | | |
| 748.4 | |
| Operating and maintenance | |
| 260.6 | | |
| 62.9 | | |
| 0.4 | | |
| 323.9 | |
| General and administrative | |
| 87.1 | | |
| 12.4 | | |
| 5.3 | | |
| 104.8 | |
| Asset impairment | |
| 15.6 | | |
| - | | |
| - | | |
| 15.6 | |
| Depreciation and amortization | |
| 142.0 | | |
| 9.4 | | |
| - | | |
| 151.4 | |
| | |
| 505.3 | | |
| 84.7 | | |
| 5.7 | | |
| 595.7 | |
| Operating income (loss) | |
| 114.9 | | |
| 43.5 | | |
| (5.7 | ) | |
| 152.7 | |
| Other income | |
| 12.9 | (2) | |
| - | | |
| - | | |
| 12.9 | |
| Interest expense, net | |
| - | | |
| - | | |
| (16.7 | ) | |
| (16.7 | ) |
| Income (loss) before income tax expense | |
| 127.8 | | |
| 43.5 | | |
| (22.4 | ) | |
| 148.9 | |
| Income tax expense | |
| - | | |
| - | | |
| (4.6 | ) | |
| (4.6 | ) |
| Net income (loss) | |
| 127.8 | | |
| 43.5 | | |
| (27.0 | ) | |
| 144.3 | |
| Less: Net income attributable to noncontrolling interest | |
| - | | |
| - | | |
| 80.2 | | |
| 80.2 | |
| Net income (loss) attributable to general and limited
partner ownership interests in Midcoast Energy Partners, L.P. | |
$ | 127.8 | | |
$ | 43.5 | | |
$ | (107.2 | ) | |
$ | 64.1 | |
| Total assets | |
$ | 5,205.4 | (3) | |
$ | 460.3 | | |
$ | 88.4 | | |
$ | 5,754.1 | |
| Capital expenditures (excluding acquisitions) | |
$ | 213.4 | | |
$ | 16.6 | | |
$ | 6.0 | | |
$ | 236.0 | |
| (1) | Corporate consists of interest
expense, interest income, noncontrolling interest and other costs such as income taxes, which are not allocated to the business
segments. |
| (2) | Other income for our Gathering,
Processing and Transportation segment includes our equity investment in the Texas Express NGL system. |
| (3) | Total assets for our Gathering,
Processing and Transportation segment includes $380.6 million for our equity investment in the Texas Express NGL system. |
| | |
As of and for the year ended December 31, 2013 | |
| | |
Gathering, Processing and Transportation | | |
Logistics and Marketing | | |
Corporate (1) | | |
Total | |
| | |
(unaudited; in millions) | |
| Total revenue | |
$ | 2,689.8 | | |
$ | 4,963.7 | | |
$ | - | | |
$ | 7,653.5 | |
| Less: Intersegment revenue | |
| 1,960.8 | | |
| 99.1 | | |
| - | | |
| 2,059.9 | |
| Operating revenue | |
| 729.0 | | |
| 4,864.6 | | |
| - | | |
| 5,593.6 | |
| Cost of natural gas and natural gas liquids | |
| 157.6 | | |
| 4,779.5 | | |
| - | | |
| 4,937.1 | |
| Segment gross margin | |
| 571.4 | | |
| 85.1 | | |
| - | | |
| 656.5 | |
| Operating and maintenance | |
| 278.9 | | |
| 71.4 | | |
| - | | |
| 350.3 | |
| General and administrative | |
| 86.6 | | |
| 11.6 | | |
| - | | |
| 98.2 | |
| Depreciation and amortization | |
| 135.7 | | |
| 7.2 | | |
| - | | |
| 142.9 | |
| | |
| 501.2 | | |
| 90.2 | | |
| - | | |
| 591.4 | |
| Operating income (loss) | |
| 70.2 | | |
| (5.1 | ) | |
| - | | |
| 65.1 | |
| Other income (expense) | |
| (1.5 | )(2) | |
| - | | |
| 0.3 | | |
| (1.2 | ) |
| Interest expense, net | |
| - | | |
| - | | |
| (1.7 | ) | |
| (1.7 | ) |
| Income (loss) before income tax expense | |
| 68.7 | | |
| (5.1 | ) | |
| (1.4 | ) | |
| 62.2 | |
| Income tax expense | |
| - | | |
| - | | |
| (8.3 | ) | |
| (8.3 | ) |
| Net income (loss) | |
| 68.7 | | |
| (5.1 | ) | |
| (9.7 | ) | |
| 53.9 | |
| Less: Net loss attributable to controlling interest | |
| - | | |
| - | | |
| (0.6 | ) | |
| (0.6 | ) |
| Net income (loss) attributable to general and limited partner ownership interests in Midcoast Energy Partners, L.P. | |
$ | 68.7 | | |
$ | (5.1 | ) | |
$ | (9.1 | ) | |
$ | 54.5 | |
| Total assets | |
$ | 4,962.1 | (3) | |
$ | 591.4 | | |
$ | 482.9 | | |
$ | 6,036.4 | |
| Capital expenditures (excluding acquisitions) | |
$ | 233.8 | | |
$ | 17.5 | | |
$ | 18.8 | | |
$ | 270.1 | |
| (1) | Corporate consists of interest
expense, interest income, noncontrolling interest and other costs such as income taxes, which are not allocated to the business
segments. |
| (2) | Other income (expense)
for our Gathering, Processing, and Transportation segment includes our equity investment in the Texas Express NGL system which
began recognizing operating costs during the fourth quarter of 2013. |
| (3) | Total assets for our Gathering,
Processing and Transportation segment includes $371.3 million for our equity investment in the Texas Express NGL system. |
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