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American Midstream Reports Third Quarter 2017 Results

HOUSTON, Nov 08, 2017 (BUSINESS WIRE) --

American Midstream Partners, LP (NYSE: AMID) ("American Midstream", "AMID" or the "Partnership") today reported financial results for the three months and nine months ended September 30, 2017.

-- Declared twenty-fifth consecutive quarterly distribution since IPO

-- Reallocated $450 million in capital with several highly accretive transactions

-- Expects pro proforma 2018 annualized Adjusted EBITDA in excess of $300 million

Net income attributable to the Partnership was $55.9 million for the three months ended September 30, 2017 as compared to net loss of $9.0 million for the same period in 2016. The increase in net income was primarily due to gains from sale of the Propane Marketing and Services segment and from our acquisition of Main Pass Oil Gathering LLC ("MPOG"), offset by an increase in total operating and corporate expenses primarily related to non-recurring transaction and merger related costs, as well as higher interest expense.

Adjusted EBITDA was $42.3 million for the three months ended September 30, 2017, up 24% for the same period in 2016. Distributable Cash Flow ("DCF") was $22.0 million for the three months ended September 30, 2017, up 3% compared to the same period in 2016. The increase is primarily due to higher cash distributions from our Gulf of Mexico pipeline equity investments and sponsor support, partially offset by lower cash distributions from Delta House due to a scheduled rate adjustment from materially increasing volumes and higher interest expense.

The Partnership maintained a quarterly distribution of $0.4125 per common unit, or $1.65 per common unit on an annualized basis, representing distribution coverage of approximately 1.0 times. The third quarter 2017 distribution represents the Partnership's twenty-fifth consecutive quarterly distribution since its initial public offering and will be paid November 14, 2017 to unitholders of record on November 7, 2017.

Reconciliations of non-GAAP financial measures for gross margin, Adjusted EBITDA and DCF to Net income (loss) attributable to the Partnership are provided within this press release.

EXECUTIVE COMMENTARY

"This has been an active quarter for the Partnership with significant strides in our capital optimization program driven by a number of transactions, including a greater stake in several offshore assets and the sale of our Propane segment," stated Lynn Bourdon III, President and Chief Executive Officer. "In approximately twelve months, we turned over 50% of the Partnership's assets while redeploying capital at more attractive multiples to cash flow all while improving our balance sheet. Through these steps, we are working to create greater long-term value with a more predictable cash flow profile."

"In addition, we announced another transformational event with the proposed acquisition of Southcross, a midstream company with a strong customer base in high-growth markets and infrastructure assets in our core areas. This acquisition demonstrates our disciplined and methodical approach to creating a fully integrated, larger-scale platform on which we can expand our business throughout the midstream value chain. In line with our strategic vision, this acquisition will accelerate the transformation of AMID into a fully integrated natural gas gathering, processing and transmission partnership with asset density and full value chain participation, within the Eagle Ford, the Southeast and the U.S. Gulf Coast."

"Going forward, we plan to generate strong returns by continuing to develop our assets in key basins. The rapid pace at which we are executing against our capital redeployment plan is expected to impact our results through the 1st quarter of 2018."

SEGMENT PERFORMANCE

Gas Gathering and Processing

Segment gross margin was $12.8 million for the three months ended September 30, 2017, up 1% as compared to the same period in 2016. The increase reflected additional NGL volumes from new contracts at our East Texas assets attributable to higher producer activity resulting in a material increase in our truck volumes and NGL production which increased 105% and 199%, respectively.

Liquid Pipelines and Services

Segment gross margin was $7.8 million for the three months ended September 30, 2017, up 3% as compared to the same period in 2016. The segment primarily benefited from an increase in volumes on our Silver Dollar Pipeline system as the Partnership continue to see increased activity from several new wells operated by our anchor producers. Additionally, the Tri-States NGL system benefited from increased volumes on Delta House and volume from other deepwater Gulf of Mexico developments that brought additional NGL volumes onshore.

Natural Gas Transportation Services

Segment gross margin was $5.4 million for the three months ended September 30, 2017, up 44% as compared to the same period in 2016. The increase was mostly driven by a 242% increase in volumes and higher rates on contracts on our MLGT and Midla systems in addition to positive operating efficiencies from the completion of the Natchez line.

Offshore Pipelines and Services

Segment gross margin was $29.3 million for the three months ended September 30, 2017, up 21% as compared to the same period in 2016. The increase was mostly due to a 27% increase in Delta House volumes and a 32% increase in Okeanos volumes. These increases are primarily due to new production from third-party platform expansions and volume increase from Viosca Knoll Gathering System.

Terminalling Services

Segment gross margin was $8.5 million for the three months ended September 30, 2017, down 21% as compared to the same period in 2016. The decrease was primarily due to a reduction in storage and utilization at our Cushing terminal and higher operating expenses. This was partially offset by an increase in throughput revenue at our refined product terminal as a result of facility enhancements from growth projects.

CORPORATE

Corporate expenses were $27.1 million for the three months ended September 30, 2017, up 23% as compared to the same period in 2016. The increase is primarily related to transaction and merger related costs associated with corporate development efforts from our capital optimization plan that is designed to increase our distributable cash flow and improve our balance sheet. Pro forma for the transaction and acquisition related costs, third quarter recurring corporate expenses were approximately $16.7 million, down 2.9% compared to the same period last year.

Interest expense was $17.8 million for the three months ended September 30, 2017 as compared to $5.8 million for the same period in 2016. The increase in interest expense is associated with higher average debt balances from our growth initiatives as well as higher average interest costs as the Partnership created a more flexible capital structure from the issuance of $300 million of Senior unsecured notes.

In conjunction with the merger agreement between AMID and JP Energy Partners, LP, affiliates of ArcLight Capital Partners, LLC ("ArcLight"), the majority owner of our general partner, have committed to providing support of $9.9 million in the third quarter of 2017 in connection with the $25.0 million support agreement. The Partnership does not foresee the need for additional support as we have substantially completed the initial phase of our capital optimization strategy.

BUSINESS HIGHLIGHTS

During the third quarter, AMID made considerable progress in executing a strategy of simplifying its businesses and growing distributable cash flow. Since June 2017, AMID has effectively reallocated over $450 million in capital in seven highly accretive transactions while also improving the Partnership's balance sheet. In conjunction with AMID's numerous organic growth projects, the Partnership is poised for materially higher 2018 Adjusted EBITDA and distributable cash flow.

Cayenne Joint Venture

On August 8, 2017, the Partnership announced a joint venture agreement between AMID and Targa Midstream Services LLC ("Targa") creating Cayenne Pipeline, LLC ("Cayenne"). Cayenne will transport Y-grade NGLs from the Targa-operated Venice Energy Services Company, LLC gas processing plant ("Venice") to Enterprise Products' pipeline at Toca, Louisiana, for delivery to Enterprise Products' Norco Fractionator. As part of the Cayenne joint venture, AMID is contributing an underutilized natural gas pipeline that will convert into high value, natural gas liquids service. The project is supported by a 15-year dedication for all NGL production from Targa's 750 MMcf/d Venice plant with inlet from six offshore pipelines in the Gulf of Mexico, including the prolific deep-water Mississippi Canyon area. The pipeline will have initial capacity of over 40,000 barrels per day with the ability to throughput more than 50,000 barrels per day. AMID and Targa will each have 50% economic interests and 50% voting rights, respectively, with Targa serving as the operator of the venture. The costs of conversion and associated construction will be shared equally by AMID and Targa.

Acquisition of Panther

On August 8, 2017, the Partnership announced the acquisition of 100% of the assets in Panther Asset Management, LLC ("Panther") for a total consideration of approximately $57 million. The consideration consisted of approximately $39 million cash from borrowings under the Partnership's revolving credit facility and common units representing limited partner interests. The underlying assets acquired are highly complementary with AMID's core Gulf of Mexico assets as a substantial portion of Panther's cash flows are generated by AMID joint ventures. Consolidating Main Pass Oil and Gas and American Panther into the Partnership's Gulf of Mexico portfolio continues the strategy of enhancing its gulf coast asset base, providing its customers with strong interconnectivity that allow for multiple product delivery points product delivery; as well as solidly position AMID as a Gulf of Mexico crude oil pipeline operator.

Closing Sale of Propane Marketing and Services

On September 5, 2017, the Partnership announced the closing of its previously announced sale of the Partnership's Propane Marketing and Services business to SHV Energy N.V. for $170 million in cash. Through this transaction, the Partnership has divested 100% of the segment, including Pinnacle Propane's 40 service locations; Pinnacle Propane Express' cylinder exchange business and related logistic assets; and the Alliant Gas utility system.

Commences Crude Deliveries Into Dakota Access Pipeline

On September 25, 2017, the Partnership announced the commencement of deliveries from the Partnership's 40,000 barrel per day Bakken crude oil gathering system near Watford City, ND into the Dakota Access Pipeline ("DAPL").

The Partnership's DAPL interconnect provides optionality to high-value market alternatives and take-away capabilities for gathered barrels and volume brought through AMID's trucking terminal. The connection is strategically located to give producers access to DAPL upstream of the delivery and storage hub at Johnsons Corner.

Drop Down of Incremental Interest in Delta House

On October 2, 2017, the Partnership announced the acquisition and closing of an additional 15.5% equity interest in Delta House, a fee-based, semi-submersible floating production and processing system from affiliates of ArcLight Capital Partners, LLC, for total consideration of approximately $125.4 million. Post-closing, the Partnership and ArcLight will directly and indirectly own a 35.7% and 23.3% interest in Delta House, respectively. The purchase of additional Delta House interests is immediately accretive to Adjusted EBITDA and distributable cash flow.

Drop Down of Incremental Interest in Destin

On October 30, 2017, the Partnership announced the acquisition and closing of an additional 17.0 % equity interest in the Destin Pipeline ("Destin") from affiliates of ArcLight, which controls the general partner of the Partnership, for a total consideration of approximately $30 million. Post-closing, the Partnership owns a 66.67% interest in Destin. The purchase of the additional interest in Destin is accretive to Adjusted EBITDA and distributable cash flow. Additional interest in Destin is an extension of the Partnership's commitment to reallocating capital in a portfolio of interconnected, complementary assets with predictable cash flows.

Announcement of Southcross Acquisition

On November 1, 2017, the Partnership announced it has signed an agreement to acquire certain assets of Southcross Holdings, LP, and has proposed to merge Southcross Energy Partners, L.P. (NYSE: SXE) (collectively, with Southcross Holdings referred to as "Southcross") into a wholly owned subsidiary of AMID in two separate transactions valued at approximately $815 million, including the repayment of net debt. As a result of the transactions, the pro forma partnership with an enterprise value of $3 billion is expected to generate annualized 2018 Adjusted EBITDA in excess of $300 million. The acquisition of Southcross reinforces AMID's primary strategic objective of creating operational focus within a defined core asset footprint in high-growth U.S. basins.

Drop Down of Trans-Union

On November 6, 2017, the Partnership announced the purchase of Trans-Union which is immediately accretive to Adjusted EBITDA and distributable cash flow. This drop down represents an attractive commercial and strategic investment that will deliver long-term returns. Trans-Union is anchored with long term take-or-pay agreements, consisting of approximately 91% of Trans-Union's FERC-regulated capacity through investment grade utilities. In addition, these assets are complementary to AMID's existing transmission portfolio and development within the Southeast, with proximity to the Midla system, as well as offering potential bolt-on acquisition opportunities. This drop down demonstrates ArcLight's continued support of the Partnership.

CAPITAL MANAGEMENT

As of September 30, 2017, the Partnership had approximately $1.1 billion of total debt outstanding, comprised of $709.7 million outstanding under its revolving credit facility with approximately $190.0 million of borrowings available, $293.0 million outstanding under its 8.50% senior unsecured notes and $55.2 million outstanding under its 3.77% non-recourse Senior secured notes. The Partnership had leverage of approximately 4.9 times. For the three months ended September 30, 2017, capital expenditures totaled $21.0 million, including $2.4 million of maintenance capital expenditures.

On October 2, 2017, the Partnership repurchased all of its Series D Preferred units. For the third quarter 2017, distributions for the Partnership's Series A and C Preferred Units will be paid $2.9 million cash and $5.1 million in-kind. All Preferred Units will be paid consistent with the common limited partner units of $0.4125 per unit.

RISK MANAGEMENT

The Partnership periodically enters into risk management contracts to minimize the impact of commodity price changes associated with natural gas, natural gas liquids, crude oil and interest rates. In order to mitigate the impact of rising interest rates on floating rate debt, the Partnership has entered into $650 million in interest rate swaps at an average rate of LIBOR plus 130 basis points extending from 2017 through 2022.

CONFERENCE CALL INFORMATION

The Partnership will host a conference call at 10:00 AM Eastern Time on Wednesday, November 8, 2017 to discuss these results. The call will be webcast and archived on the Partnership's website for a limited time.

Date: Wednesday, November 8, 2017

Time: 10:00 AM ET / 9:00 AM CT

Dial-In Numbers: (844) 579-6824 (Domestic toll-free)

(763) 488-9145 (International)

Conference ID: 9489529

Webcast URL: www.AmericanMidstream.com under Investor Relations

Non-GAAP Financial Measures

This press release and the accompanying tables include supplemental non-GAAP financial measures, including "Adjusted EBITDA," "Gross Margin," "Operating Margin," "Segment Operating Margin," and "Distributable Cash Flow." The tables included in this press release include reconciliations of these supplemental non-GAAP financial measures to the nearest comparable GAAP financial measures. In addition, a "Note About Non-GAAP Financial Measures" is set forth in a later section in this press release.

About American Midstream Partners, LP

American Midstream Partners, LP is a growth-oriented limited partnership formed to provide critical midstream infrastructure that links producers of natural gas, crude oil, NGLs, condensate and specialty chemicals to end-use markets. American Midstream's assets are strategically located in some of the most prolific onshore and offshore basins in the Permian, Eagle Ford, East Texas, Bakken and Gulf Coast. American Midstream owns or has an ownership interest in approximately 4,000 miles of interstate and intrastate pipelines, as well as ownership in gas processing plants, fractionation facilities, an offshore semisubmersible floating production system with nameplate processing capacity of 100,000 Bbl/d of crude oil and 240 MMcf/d of natural gas; and terminal sites with approximately 6.7 million Bbls of storage capacity. For more information about American Midstream Partners, LP, visit www.americanmidstream.com.

Forward-Looking Statements

This press release includes forward-looking statements. These statements relate to, among other things, projections of 2017 financial performance, consummation of transactions, operational volumetrics and improvements, growth projects, distributions, cash flows and capital expenditures. We have used the words "anticipate," "believe," "could," "estimate," "expect," "guidance," "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. These forward-looking statements reflect our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside our control. Additional risks include the following: the ability to obtain requisite regulatory and unitholder approval and the satisfaction of the other conditions to the consummation of the proposed transaction, the ability of American Midstream to successfully integrate SXE's operations and employees and realize anticipated synergies and cost savings, actions by third parties, the potential impact of the announcement or consummation of the proposed transaction on relationships, including with employees, suppliers, customers, competitors and credit rating agencies, and the ability to achieve revenue and other financial growth, and volatility in the price of oil, natural gas, and natural gas liquids and the credit market. 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 Securities and Exchange Commission ("SEC"). See our "Risk Factors" and other disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the SEC on March 28, 2017 and in our other filings with the SEC. 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. The forward-looking statements herein speak as of the date of this press release. 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.

Additional Information and Where to Find it

This communication relates to a proposed business combination between AMID and SXE. In connection with the proposed transaction, AMID and/or SXE expect to file a proxy statement/prospectus and other documents with the Securities and Exchange Commission ("SEC").

WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

Any definitive proxy statement(s) (if and when available) will be mailed to unitholders of SXE. Investors and security holders will be able to obtain these materials (if and when they are available) free of charge at the SEC's website, www.sec.gov. In addition, copies of any documents filed with the SEC may be obtained free of charge from SXE's internet website for investors at http://investors.southcrossenergy.com, and from AMID's investor relations website at http://www.americanmidstream.com/investorrelations. Investors and security holders may also read and copy any reports, statements and other information filed by AMID and SXE with the SEC at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC's website for further information on its public reference room.

No Offer or Solicitation

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, 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 Section 10 of the Securities Act of 1933, as amended.

Participation in the Solicitation of Votes

American Midstream and Southcross Energy and their respective directors and executive officers may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information regarding Southcross Energy's directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 9, 2017. Information regarding American Midstream's directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 28, 2017. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

 
                                                                            American Midstream Partners, LP and Subsidiaries
                                                                                  Condensed Consolidated Balance Sheets
                                                                              (Unaudited, in thousands except unit amounts)
                                                                                                                             
                                                                                                                     September 30,                                              December 31,
                                                                                                                         2017                                                       2016
                                                                                                        ------------------------------------                        ----------------------------------
Assets
   Cash and cash equivalents                                                                                  $     6,739                                               $     5,666
   Property, plant and equipment, net                                                                           1,140,826                                                 1,066,608
   Intangible assets, net                                                                                         194,456                                                   205,071
   Investments in unconsolidated affiliates                                                                       334,026                                                   291,987
   Other assets, net                                                                                              347,160                                                   643,230
   Assets of discontinued operations                                                                       --                                136,759  
                                                                                                        --------------------------------------                      ------------------------------------
        Total assets                                                                                          $ 2,023,207                            $ 2,349,321  
                                                                                                        ======= ========= ====================                      ===== ========= ====================
Liabilities, Equity and Partners' Capital
   Current portion of long-term debt                                                                          $     1,234                                               $     5,438
   3.77% Senior secured notes (Non-recourse)                                                                       55,186                                                    55,979
   8.50% Senior unsecured notes                                                                                   293,007                                                   291,309
   Revolving credit facility                                                                                      709,652                                                   888,250
   Other liabilities, net                                                                                         175,675                                                   174,607
   Liabilities of discontinued operations                                                                  --                                                    14,491
   Convertible preferred units                                                                                    343,579                                                   334,090
      Partners' capital
   General Partner interests (953 thousand and 680 thousand units                                                 (86,224 )                                                 (47,645 )
   issued and outstanding as of September 30, 2017 and December 31,
   2016, respectively)
   Limited Partner interests (52,850 thousand and 51,351 thousand units                                           517,081                                                   616,087
   issued and outstanding as of September 30, 2017 and December 31,
   2016, respectively)
   Accumulated other comprehensive income (loss)                                                                        2                                                       (40 )
   Noncontrolling interests                                                                                        14,015                                 16,755  
                                                                                                        --------------------------------------                      ------------------------------------
        Total liabilities, equity and partners' capital                            $ 2,023,207                            $ 2,349,321  
                                                                                                        ======= ========= ====================                      ===== ========= ====================
                                                                                                                                                                                     
 
                                                                                                                             American Midstream Partners, LP and Subsidiaries
                                                                                                                                   Consolidated Statements of Operations
                                                                                                                          (Unaudited, in thousands, except for per unit amounts)
                                                                                                                                                                       
                                                                                                                                 Three months ended                                                                                                 Nine months ended
                                                                                                                                    September 30,                                                                                                     September 30,
                                                                                            --------------------------------------------------------------------------------------                            --------------------------------------------------------------------------------------
                                                                                                            2017                                  2016                                                     2017                                  2016
                                                                                            ------------------------------------                     ------------------------------------                     ------------------------------------                     ------------------------------------
Revenue                                                                                          $ 162,887                                                $ 159,579                                                $ 488,431                                                $ 415,082
Gain (loss) on commodity derivatives, net                                                             (597 )                                                    324                                   (33 )                              (1,929 )
                                                                                            -----------------------------------                      -----------------------------------                      ----------------------------------- -------------------- -----------------------------------
       Total revenue                                                                               162,290                               159,903                               488,398            413,153  
                                                                                            -----------------------------------                      -----------------------------------                      ----------------------------------- -------------------- -----------------------------------
Operating expenses:
   Purchases of natural gas, NGLs and condensate                                                   112,398                                                  107,249                                                  342,886                                                  270,712
   Direct operating expenses                                                                        20,705                                                   17,571                                                   56,819                                                   53,872
   Corporate expenses                                                                               27,083                                                   22,103                                                   84,570                                                   60,945
   Depreciation, amortization and accretion expense                                                 26,781                                                   22,668                                                   78,834                                                   65,937
   (Gain) loss on sale of assets, net                                                               (4,061 )                                                     36                                (4,064 )                                 297  
                                                                                            -----------------------------------                      -----------------------------------                      ----------------------------------- -------------------- -----------------------------------
       Total operating expenses                                                                    182,906                               169,627                               559,045            451,763  
                                                                                            -----------------------------------                      -----------------------------------                      ----------------------------------- -------------------- -----------------------------------
Operating loss                                                                                     (20,616 )                                                 (9,724 )                                                (70,647 )                                                (38,610 )
Other income (expense), net:
   Interest expense                                                                                (17,759 )                                                 (5,830 )                                                (51,037 )                                                (24,723 )
   Other (expense) income, net                                                                      34,085                                                       (1 )                                                 32,248                                                      245
   Earnings in unconsolidated affiliates                                                            16,827                                10,468                                49,781             29,513  
                                                                                            -----------------------------------                      -----------------------------------                      ----------------------------------- -------------------- -----------------------------------
Income (loss) from continuing operations before income taxes                                        12,537                                                   (5,087 )                                                (39,655 )                                                (33,575 )
Income tax expense                                                                                    (731 )                                                   (401 )                                                 (2,611 )                              (1,839 )
                                                                                            -----------------------------------                      -----------------------------------                      ----------------------------------- -------------------- -----------------------------------
   Income (loss) from continuing operations                                                         11,806                                                   (5,488 )                                                (42,266 )                                                (35,414 )
   Income (loss) from discontinued operations, including gain on                                    44,696                                (2,310 )                                                 42,185              7,532  
   disposition
                                                                                            -------------  --------------------                      -------------  --------------------                      -------------  -------------------- -------------------- -------------  --------------------
Net income (loss)                                                                                   56,502                                                   (7,798 )                                                    (81 )                                                (27,882 )
     Less: Net income attributable to noncontrolling interests                                         621                                 1,241                                 3,386              2,192  
                                                                                            -----------------------------------                      -----------------------------------                      ----------------------------------- -------------------- -----------------------------------
Net income (loss) attributable to the Partnership                                                $  55,881                             $  (9,039 )                                              $  (3,467 )                           $ (30,074 )
                                                                                            ====== ======= ====================                      ====== ======= ====================                      ====== ======= ==================== ==================== ====== ======= ====================
                                                                                                                                                                                            
                                                                                            ------------------------------------                     ------------------------------------                     -------------------------------------------------------- ------------------------------------
     General Partner's interest in net income (loss)                                             $     697                             $     (31 )                                              $     (98 )                           $    (235 )
                                                                                            ====== ======= ====================                      ====== ======= ====================                      ====== ======= ==================== ==================== ====== ======= ====================
     Limited Partners' interest in net income (loss)                                             $  55,184                             $  (9,008 )                                              $  (3,369 )                           $ (29,839 )
                                                                                            ====== ======= ====================                      ====== ======= ====================                      ====== ======= ==================== ==================== ====== ======= ====================
                                                                                                                                                                                                                                                                        
Distribution declared per common unit                                                            $  0.4125                                                $  0.4125                                                $  1.2375                                                $  1.2975
Limited Partners' net loss per common unit:
   Basic and diluted:
     Income (loss) from continuing operations                                                    $    0.05                                                $   (0.29 )                                              $   (1.36 )                                              $   (1.14 )
     Income (loss) from discontinued operations                                                       0.86                                 (0.05 )                                                   0.81               0.15  
                                                                                            -----------------------------------                      -----------------------------------                      ----------------------------------- -------------------- -----------------------------------
   Net income (loss)                                                                             $    0.91                             $   (0.34 )                                              $   (0.55 )                           $   (0.99 )
                                                                                            ====== ======= ====================                      ====== ======= ====================                      ====== ======= ==================== ==================== ====== ======= ====================
   Weighted average number of common units outstanding:
     Basic and diluted                                                                                                   52,013                                                   51,310                                                   52,013                                                   51,310
                                                                                                                                                                                                                                                                        
 
                                                                    American Midstream Partners, LP and Subsidiaries
                                                                     Condensed Consolidated Statements of Cash Flows
                                                                                (Unaudited, in thousands)
                                                                     
                                                                                                                         Nine months ended September 30,
                                                                                         ----------------------------------------------------------------------------------------
                                                                                                         2017                                   2016
                                                                                         -------------------------------------                     -------------------------------------
Cash flows from operating activities
Net loss                                                                                       $     (81 )                                               $ (27,882 )
Adjustments to reconcile net loss to net cash provided by operating
activities:
   Depreciation, amortization and accretion expense                                               88,700                                                    78,168
   Gain on acquisition                                                                           (32,383 )                                          --
   (Gain) loss on sale of assets and discontinued operations                                     (50,580 )                                                   2,247
   Unrealized loss on derivatives contracts, net                                                   2,818                                                     1,803
Changes in operating assets and liabilities, net of effects of                                    14,894                                 29,723  
assets acquired and liabilities assumed
                                                                                         --------------  --------------------                      --------------  --------------------
      Net cash provided by operating activities                                                   23,368                                 84,059  
                                                                                         ------------------------------------                      ------------------------------------
                                                                                                                                                    
Cash flows from investing activities
Acquisitions, net of cash acquired and settlements                                               (71,383 )                                                  (2,676 )
Investments in unconsolidated affiliates                                                         (49,828 )                                                (114,007 )
Additions to property, plant and equipment                                                       (65,026 )                                                 (85,652 )
Proceeds from sale of business and assets, net of cash on hand                                   167,979                                                    11,761
Restricted cash                                                                                  302,736                                                   (43,691 )
Other cash flows from investing activities, net                                                    8,333                                 33,284  
                                                                                         ------------------------------------                      ------------------------------------
      Net cash provided by (used in) investing activities                                        292,811                               (200,981 )
                                                                                         ------------------------------------                      ------------------------------------
                                                                                                                                                    
Cash flows from financing activities
Proceeds from issuance of common units, net of offering costs                             --                                                     2,910
Proceeds from 3.77% Senior secured Notes                                                  --                                                    60,000
Payments on 3.77% Senior secured Notes                                                            (1,351 )                                          --
Unitholder distributions for common control transactions                                         (75,572 )                                          --
Borrowings on credit agreement                                                                   367,809                                                   317,243
Payments on credit agreement                                                                    (546,408 )                                                (172,650 )
Other cash flow from financing activities, net                                                   (59,584 )                                                 (85,921 )
                                                                                         ------------------------------------                      ------------------------------------
      Net cash provided by (used in) financing activities                                       (315,106 )                                                 121,582  
                                                                                         ------------------------------------                      ------------------------------------
                                                                                                                                                    
Net increase in cash and cash equivalents                                                          1,073                                                     4,660
                                                                                                                                                    
Cash and cash equivalents
Beginning of period                                                                                5,666                                  1,987  
                                                                                         ------------------------------------                      ------------------------------------
End of period                                                                                  $   6,739                              $   6,647  
                                                                                         ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                    
 
                                                                                                                    American Midstream Partners, LP and Subsidiaries
                                                                                                                 Reconciliation of Net income (loss) attributable to the
                                                                                                                                     Partnership to
                                                                                                                       Adjusted EBITDA and Distributable Cash Flow
                                                                                                                                (Unaudited, in thousands)
                                                                                                                                                       
                                                                                                                   Three months ended                                                                                              Nine months ended
                                                                                                                      September 30,                                                                                                  September 30,
                                                                               -----------------------------------------------------------------------------------                            ------------------------------------------------------------------------------------
                                                                                             2017                                2016                                                    2017                                 2016
                                                                               --------------------------------                     -------------------------------------                     ----------------------------------------------------- -------------------------------------
Reconciliation of Net income (loss) attributable to the                                                                                                                                                                         
Partnership to Adjusted EBITDA:
  Net income (loss) attributable to the Partnership                              $ 55,881                                                 $  (9,039 )                                           $  (3,467 )                                               $ (30,074 )
      Add:
         Depreciation, amortization and accretion expense                          26,685                                                    22,668                                                78,173                                                    65,937
         Interest expense                                                          14,959                                                     5,014                                                43,769                                                    22,395
         Debt issuance costs                                                          119                                                     2,512                                                 2,235                                                     3,987
         Unrealized (gain) loss on derivatives, net                                   324                                                    (3,175 )                                               2,384                                                     2,431
         Non-cash equity compensation expense                                         845                                                     1,234                                                 6,077                                                     4,285
         Transaction expenses                                                      10,470                                                     4,983                                                31,155                                                     9,145
         Income tax expense                                                           731                                                       401                                                 2,611                                                     1,839
         Distributions from unconsolidated affiliates                              20,582                                                    22,720                                                58,976                                                    62,797
         General Partner contribution                                               9,870                                            --                                                34,614                                                     5,000
      Deduct:
         Earnings in unconsolidated affiliates                                     16,827                                                    10,468                                                49,781                                                    29,513
         Discontinued operations                                                   44,789                                                     2,323                                                36,464                                                    (7,561 )
         Gain on revaluation of equity interest                                    32,383                                            --                                                32,383                                            --
         Other, net                                                                    91                                                       409                                                   257                                                       355
         Gain (loss) on sale of assets, net                                         4,061                                    (36 )                                               4,064                (297 )
                                                                               -------------------------------                      ------------------------------------                      -------------------------------- -------------------- ------------------------------------
  Adjusted EBITDA                                                                $ 42,315                              $  34,154                          $ 133,578           $ 125,732  
                                                                               === ====== ====================                      ======= ======= ====================                      === ======= ==================== ==================== ======= ======= ====================
  Deduct:
    Interest expense                                                               14,970                                                     7,109                                                43,559                                                    13,117
    Maintenance capital                                                             2,449                                                     1,974                                                 6,570                                                     3,843
    Series A, C and D Cash Payment                                                  2,870                                  3,751                             16,311               3,751  
                                                                               -------------------------------                      ------------------------------------                      -------------------------------- -------------------- ------------------------------------
  Distributable Cash Flow                                                        $ 22,026                              $  21,320                          $  67,138           $ 105,021  
                                                                               --- ------ --------------------                      ------- ------- --------------------                      --- ------- -------------------- -------------------- ------- ------- --------------------
                                                                                                                                                                                                                                                     
  Limited Partner Distributions                                                    22,058                                                    24,874                                                68,361                                                    76,656
                                                                                                                                                                                                                                                     
  Distribution Coverage                                                               1.0 x                                                     0.9 x                                                 1.0 x                                                     1.4 x
                                                                               -------------------------------                      ------------------------------------                      --------------------------------                      ------------------------------------
                                                                                                                                                                                                                                                                     
 
                                                                                                                     American Midstream Partners, LP and Subsidiaries
                                                                                                                 Reconciliation of Total Gross Margin to Net income (loss)
                                                                                                                              attributable to the Partnership
                                                                                                                                 (Unaudited, in thousands)
                                                                                                                                                             
                                                                                                                           Three months ended                                                                                          Nine months ended
                                                                                                                              September 30,                                                                                              September 30,
                                                                                          ------------------------------------------------------------------------------                            -------------------------------------------------------------------------------
                                                                                                        2017                              2016                                                 2017                              2016
                                                                                          --------------------------------                     --------------------------------                     --------------------------------                     ---------------------------------
Reconciliation of Segment Gross Margin to Net income (loss)
attributable to the Partnership
Gas Gathering and Processing Services    

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