- $340 million of strategic acquisitions
and organic growth projects announced during the quarter
- Healthy distribution coverage of 1.30x
at TEP
- Conservative financial leverage of
approximately 3.1x at TEP
Tallgrass Energy Partners, LP (NYSE: TEP) ("TEP") and Tallgrass
Energy GP, LP (NYSE: TEGP) ("TEGP") today reported financial and
operating results for the first quarter of 2018.
“Tallgrass Energy once again delivered the strong quarterly
financial results that our unitholders and shareholders have come
to expect,” said President and CEO David Dehaemers Jr. “These
results were driven by consistent performance in our Natural Gas
and Crude Oil transportation segments and continued growth in our
Gathering, Processing and Terminalling segment, all of which led to
our 19th and 11th consecutive distribution increases at TEP and
TEGP, respectively.
"Our team remains focused on growing Tallgrass through strategic
acquisitions and organically developed growth projects that will
continue to expand our assets and footprint," added Dehaemers. "In
addition, our team is also focused on completing TEGP’s pending
acquisition of the publicly held TEP units that will result in a
single unified public company, Tallgrass Energy, LP or TGE. We
believe this streamlined entity, with shareholders receiving
dividends and 1099s, will attract wider and more cost-effective
capital investment to enhance shareholder returns on our commercial
growth plans."
First Quarter
Distributions
Tallgrass Energy Partners, LP
As previously announced, the board of directors of TEP's general
partner declared a quarterly cash distribution of $0.975 per common
unit for the first quarter of 2018. This quarterly distribution
represents $3.90 on an annualized basis, a sequential increase of
1.0 percent from the fourth quarter 2017 distribution and an
increase of 16.8 percent from the first quarter 2017 distribution.
The quarterly distribution will be paid on May 15, 2018, to
unitholders of record as of the close of business on April 30,
2018.
Tallgrass Energy GP, LP
Also, as previously announced, the board of directors of TEGP's
general partner declared a quarterly cash dividend of $0.4875 per
Class A share for the first quarter of 2018. This quarterly
dividend represents $1.95 per Class A share on an annualized basis,
a sequential increase of 32.7 percent from the fourth quarter 2017
dividend and an increase of 69.6 percent from the first quarter
2017 dividend. The quarterly dividend will be paid on May 15, 2018,
to Class A shareholders of record as of the close of business on
April 30, 2018.
Tallgrass Energy Partners, LP Summary
Financial Information
Three Months Ended March 31, (in thousands, except
coverage and per unit data) 2018 2017 Net
income attributable to partners $ 107,884 $ 70,905 Add: Interest
expense, net 28,184 14,689 Depreciation and amortization expense(1)
25,854 21,867 Distributions from unconsolidated investments 65,857
30,819 Non-cash compensation expense(2) 2,755 1,458 Less: Equity in
earnings of unconsolidated investments (53,406 ) (20,738 ) Gain on
disposal of assets (9,417 ) (1,448 ) Non-cash gain related to
derivative instruments(1) (2,674 ) (2,441 ) Adjusted EBITDA(3) $
165,037 $ 115,111 Add: Deficiency payments received,
net(1) 11,195 16,071 Less: Cash interest cost (27,001 ) (13,567 )
Maintenance capital expenditures, net (3,030 ) (63 ) Distributable
Cash Flow(3) 146,201 117,552 Less: Distributions (112,453 ) (91,366
) Amounts in excess of distributions(4) $ 33,748 $ 26,186
Distribution coverage 1.30 x 1.29 x Common units
outstanding(5) 73,200 72,438 Distribution per common unit $ 0.9750
$ 0.8350 (1)
Net of noncontrolling interest.
(2)
Represents TEP's portion of non-cash
compensation expense related to Equity Participation Units,
excluding amounts allocated to Tallgrass Development, LP.
(3)
Adjusted EBITDA and Distributable Cash
Flow are non-GAAP measures. For additional detail see "Non-GAAP
Measures" below.
(4)
Cumulative distribution coverage from
TEP's IPO in May 2013 through March 31, 2018, is $361.7 million and
the cumulative distribution coverage ratio is 1.31x.
(5)
Common units represent the number of units
as of the date of record for the first quarter distributions in
both 2018 and 2017.
Conference Call
Please join Tallgrass Energy for a conference call and webcast
to discuss first quarter 2018 results at 3:30 p.m. Central Time on
Thursday, May 3, 2018. Interested parties may listen via a link
posted on the Investor Relations section of our website and the
replay will be available on our website for at least seven days
following the live call.
Tallgrass Energy Partners, LP
Alternative Reconciliation
Adjusted EBITDA and Distributable Cash Flow, as defined in
"TEP's Non-GAAP Measures" below, may be impacted by the timing of
cash payments received as a result of shipper deficiency payments
received or utilized during the period. As such, we have also
provided an alternative reconciliation of Adjusted EBITDA that
illustrates the impact of this item. This alternative
reconciliation is also a non-GAAP Measure. Management believes this
information provides investors useful information regarding the
impact of this item on our current results as well as the potential
impact on future results.
Alternative Reconciliation of Adjusted EBITDA
Three Months EndedMarch 31,
(in thousands) 2018 Adjusted EBITDA $ 165,037 Add:
Volumetric deficiency payments received, net(1) 11,195 Alternative
Adjusted EBITDA(2) $ 176,232 (1)
Cumulative net volumetric deficiency
balance at March 31, 2018, is $99.6 million.
(2)
Alternative Adjusted EBITDA shows what
TEP's Adjusted EBITDA would have been for the period presented if
TEP included net volumetric deficiency payments from shippers'
firm, take-or-pay contracts in calculating Adjusted EBITDA. TEP's
reported distributable cash flow and distribution coverage would
remain unchanged.
Tallgrass Energy Partners, LP Segment
Overview(1)
The first quarter 2018 comparative results by segment are
summarized below:
Three Months Ended March 31, 2018 2017
(in thousands)
Natural Gas Transportation Operating income $
19,384 $ 18,168 Add: Depreciation and amortization expense 4,827
4,783 Distributions from unconsolidated investment 65,857 30,125
Other income, net 451 70 Less: Non-cash gain related to derivative
instruments — (116 ) Segment Adjusted EBITDA $ 90,519
$ 53,030 Three Months Ended March 31, 2018 2017 (in
thousands)
Crude Oil Transportation Operating income $
46,527 $ 43,725 Add: Depreciation and amortization expense(2)
13,279 13,287 Less: Adjusted EBITDA attributable to noncontrolling
interests (350 ) (871 ) Non-cash gain related to derivative
instruments(2) — (650 ) Segment Adjusted EBITDA $ 59,456
$ 55,491 Three Months Ended March 31, 2018
2017 (in thousands)
Gathering, Processing & Terminalling
Operating income $ 23,305 $ 5,106 Add: Depreciation and
amortization expense(2) 7,112 3,797 Non-cash (gain) loss related to
derivative instruments (2,674 ) 210 Distributions from
unconsolidated investment — 694 Less: Gain on disposal of assets
(9,417 ) (1,448 ) Adjusted EBITDA attributable to noncontrolling
interests (1,411 ) (8 ) Segment Adjusted EBITDA $ 16,915 $
8,351 (1)
Segment reporting does not include
corporate general and administrative costs or intersegment
eliminations.
(2)
Net of noncontrolling interest.
Tallgrass Energy GP, LP Summary
Financial Information
Information on distributions to Tallgrass Equity, LLC
("Tallgrass Equity"), TEGP and TEGP's Class A shareholders is shown
below (in thousands, except coverage and per share data):
Three Months Ended March 31, 2018 2017
Distributions to Tallgrass Equity TEP General partner
interest(1) $ 1,267 $ 1,040 TEP Incentive Distribution Rights(1)
39,816 29,840 TEP common units owned by Tallgrass Equity (25.6
million and 20 million at March 31, 2018 and March 31, 2017,
respectively)(1) 24,979 16,700 Distributions from REX 21,976
— Total distributions to Tallgrass Equity 88,038 47,580
Less: Cash interest expense attributable to Tallgrass Equity (1,459
) (1,209 ) Cash general and administrative expenses attributable to
Tallgrass Equity(2) (2,000 ) (500 ) Cash available for distribution
by Tallgrass Equity 84,579 45,871 Distributions to Class A (TEGP)
28,316 16,697 Distributions to Class B (Exchange Right Holders)
61,771 28,507 Total cash distributions by Tallgrass
Equity $ 90,087 $ 45,204 TEGP Distributions from
Tallgrass Equity $ 28,316 $ 16,697 Less: Distributions to Class A
shareholders (28,316 ) (16,697 ) Amounts in excess of distributions
$ — $ — Distribution coverage 1.00 x 1.00 x
Class A shares outstanding 58,085 58,075 Distribution per Class A
share $ 0.4875 $ 0.2875 (1)
The three-month periods ended March 31,
2018, and March 31, 2017, include distributions expected to be
received or received by Tallgrass Equity from TEP's distribution
for the quarters ended March 31, 2018, and March 31, 2017,
respectively.
(2)
General and administrative expenses for
the quarter ended March 31, 2018, include $1.5 million in expenses
attributable to the TEGP Merger Agreement and Tallgrass Equity's
acquisition of an additional 25.01% membership interest in Rockies
Express and additional TEP common units.
Rockies Express Pipeline LLC Summary
Financial Information
TEP acquired a 25 percent interest in Rockies Express Pipeline
LLC ("REX") effective May 6, 2016, and an additional 24.99 percent
interest in REX effective March 31, 2017. Tallgrass Equity, LLC
("Tallgrass Equity") acquired a 25.01 percent interest in REX
effective February 7, 2018. The financial results of TEP and
Tallgrass Equity include their respective membership interests in
REX. The table below is a reconciliation of REX's Adjusted EBITDA
and Distributable Cash Flow for the three months ended March 31,
2018 and 2017, presented to provide additional information on REX's
financial results. REX’s Adjusted EBITDA and Distributable Cash
Flow are non-GAAP measures. For additional detail see "Non-GAAP
Measures" below.
Three Months Ended March 31, 2018 2017
(in thousands)
Rockies Express Pipeline LLC Net income $
90,968 $ 66,250 Add: Interest expense, net 41,970 41,826
Depreciation and amortization expense 54,862 54,191
Adjusted EBITDA 187,800 162,267 Less: Cash interest
cost (41,136 ) (40,992 ) Change in contract asset (15,575 ) —
Maintenance capital expenditures (3,796 ) (3,581 ) Distributable
Cash Flow $ 127,293 $ 117,694 Distributions to
Members $ (131,740 ) $ (120,501 ) Contributions from Members $
4,728 $ 26,771
Merger Transaction
In connection with the merger agreement announced on March 26,
2018, pursuant to which TEGP will acquire the TEP common units held
by the public in a share-for-unit merger transaction that is
taxable for U.S. federal income purposes at a ratio of 2.0 TEGP
Class A shares for each outstanding TEP common unit, TEGP filed a
registration statement on Form S-4 with the Securities and Exchange
Commission (“SEC”) that includes a preliminary proxy statement for
TEP unitholders. The registration statement has not yet been
declared effective, although we anticipate that such registration
statement will be declared effective and TEP will mail the
definitive proxy statement to its unitholders in the coming
weeks.
TEP has scheduled a special meeting of its unitholders to vote
on the merger agreement and the transactions related thereto on
June 26, 2018, at 10 a.m., Central Time, at the Hilton Garden Inn,
5800 College Boulevard, Overland Park, Kan. 66211. All holders of
TEP common units as of the close of business on May 18, 2018, will
be entitled to vote at such special meeting.
Non-GAAP Measures
Adjusted EBITDA and Distributable Cash Flow are non-GAAP
supplemental financial measures that TEP management and external
users of our consolidated financial statements and financial
statements of our subsidiaries and unconsolidated investments, such
as industry analysts, investors, lenders and rating agencies, may
use to assess:
- our operating performance as compared
to other publicly traded partnerships in the midstream energy
industry, without regard to historical cost basis or, in the case
of Adjusted EBITDA, financing methods;
- the ability of our assets to generate
sufficient cash flow to make distributions to our unitholders;
- our ability to incur and service debt
and fund capital expenditures; and
- the viability of acquisitions and other
capital expenditure projects and the returns on investment of
various expansion and growth opportunities.
We believe that the presentation of Adjusted EBITDA and
Distributable Cash Flow provides useful information to investors in
assessing our financial condition and results of operations.
Adjusted EBITDA and Distributable Cash Flow should not be
considered alternatives to net income, operating income, net cash
provided by operating activities or any other measure of financial
performance or liquidity presented in accordance with GAAP, nor
should Adjusted EBITDA and Distributable Cash Flow be considered
alternatives to available cash, operating surplus, distributions of
available cash from operating surplus or other definitions in our
partnership agreement. Adjusted EBITDA and Distributable Cash Flow
have important limitations as analytical tools because they exclude
some but not all items that affect net income and net cash provided
by operating activities. Additionally, because Adjusted EBITDA and
Distributable Cash Flow may be defined differently by other
companies in our industry, our definition of Adjusted EBITDA and
Distributable Cash Flow may not be comparable to similarly titled
measures of other companies, thereby diminishing their utility.
We generally define Adjusted EBITDA as net income excluding the
impact of interest, income taxes, depreciation and amortization,
non-cash income or loss related to derivative instruments, non-cash
long-term compensation expense, impairment losses, gains or losses
on asset or business disposals or acquisitions, gains or losses on
the repurchase, redemption or early retirement of debt, and
earnings from unconsolidated investments, but including the impact
of distributions from unconsolidated investments. We also use
Distributable Cash Flow, which we generally define as Adjusted
EBITDA, plus deficiency payments received from or utilized by our
customers, less cash interest costs, maintenance capital
expenditures, distributions to noncontrolling interests in excess
of earnings allocated to noncontrolling interests, and certain cash
reserves permitted by our partnership agreement. For a
reconciliation of these non-GAAP measures to their most directly
comparable GAAP financial measures, please see "Summary Financial
Information" above.
Additional Information and Where to
Find it
In connection with the transactions referred to in this
material, TEGP filed a registration statement on Form S-4 with the
SEC that includes a preliminary proxy statement for TEP
unitholders. The registration statement has not yet been declared
effective. After the registration statement is declared effective,
TEP will mail the definitive proxy statement to its unitholders.
This material is not a substitute for the joint proxy
statement/prospectus or registration statement or for any other
document that TEGP or TEP may file with the SEC and send to TEGP’s
and/or TEP’s shareholders or unitholders in connection with the
proposed transactions.
INVESTORS AND SECURITY HOLDERS OF TEGP AND TEP ARE URGED TO READ
THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE
SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
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.
Investors and security holders will be able to obtain free
copies of the proxy statement/prospectus and other documents filed
with the SEC by TEGP or TEP through the website maintained by the
SEC at http://www.sec.gov. Copies of
the documents filed with the SEC by TEGP and TEP will be available
free of charge on TEGP’s and TEP’s website at www.tallgrassenergylp.com, in the “Investor
Relations” tab near the top of the page, or by contacting TEGP’s
and TEP’s Investor Relations Department at 913-928-6012.
Participants in the
Solicitation
TEGP and TEP and their respective general partner’s directors
and executive officers may be considered participants in the
solicitation of proxies with respect to the proposed transactions
under the rules of the SEC. Information about the directors and
executive officers of TEGP’s general partner may be found in its
2017 Form 10-K filed with the SEC on Feb. 13, 2018, and any
subsequent statements of changes in beneficial ownership filed with
the SEC. Information about the directors and executive officers of
TEP may be found in its 2017 Form 10-K filed with the SEC on Feb.
13, 2018, and any subsequent statements of changes in beneficial
ownership filed with the SEC. These documents can be obtained free
of charge from the sources indicated above. Additional information
regarding the participants in the proxy solicitations and a
description of their direct and indirect interests, by security
holdings or otherwise, will also be included in any proxy statement
and other relevant materials to be filed with the SEC when they
become available.
Cautionary Note Concerning
Forward-Looking Statements
Disclosures in this press release contain “forward-looking
statements.” All statements, other than statements of historical
facts, included in this press release that address activities,
events or developments that management expects, believes or
anticipates will or may occur in the future are forward-looking
statements. Without limiting the generality of the foregoing,
forward-looking statements contained in this press release
specifically include whether the registration statement on Form S-4
TEGP filed with the SEC will be declared effective and the pending
acquisition of TEP by TEGP will close and, if the transaction
closes, whether it will attract wider and more cost-effective
capital investments or enhance shareholder returns on our
commercial growth plans. Forward looking statements may also
include the expectations of plans, strategies, objectives and
growth and anticipated financial and operational performance of
TEP, TEGP and their subsidiaries, including: the ability to pursue
expansions and other opportunities for incremental volumes; natural
gas and crude oil production growth in TEP's operating areas;
expected future benefits of acquisitions or expansion projects;
timing of anticipated spending on planned expenses and maintenance
capital projects; and distribution rate and growth, including
variability of quarterly distribution coverage. These statements
are based on certain assumptions made by TEP and TEGP based on
management’s experience and perception of historical trends,
current conditions, anticipated future developments and other
factors believed to be appropriate. Such statements are subject to
a number of assumptions, risks and uncertainties, many of which are
beyond the control of TEP and TEGP, which may cause actual results
to differ materially from those implied or expressed by the
forward-looking statements. These include risks relating to TEP and
TEGP’s financial performance and results, availability of
sufficient cash flow to pay distributions and execute their
business plans, the demand for natural gas storage, processing and
transportation services and for crude oil transportation services,
operating hazards, the effects of government regulation, tax
position and other risks incidental to transporting, storing and
processing natural gas or transporting crude oil and other
important factors that could cause actual results to differ
materially from those projected, including those set forth in
reports filed by TEP and TEGP with the Securities and Exchange
Commission. Any forward-looking statement applies only as of the
date on which such statement is made and TEP and TEGP do not intend
to correct or update any forward-looking statement, whether as a
result of new information, future events or otherwise, except as
required by law.
Tax Considerations
This release is intended to be a qualified notice to nominees
and brokers under Treasury Regulation Sections 1.1446-4(b)(4) and
(d). All of TEP’s distributions to foreign investors are
attributable to income that is effectively connected with a United
States trade or business. Accordingly, TEP’s distributions to
foreign investors are subject to federal income tax withholding at
the highest effective tax rate.
About Tallgrass Energy
Tallgrass Energy is a family of companies that includes publicly
traded partnerships Tallgrass Energy Partners, LP (NYSE: TEP) and
Tallgrass Energy GP, LP (NYSE: TEGP). Operating across 11 states,
Tallgrass is a growth-oriented midstream energy operator with
transportation, storage, terminal, water, gathering and processing
assets that serve some of the nation’s most prolific crude oil and
natural gas basins.
To learn more, please visit our website at www.tallgrassenergy.com.
Tallgrass Energy Partners, LP Financial
Statements
TALLGRASS ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
March 31, 2018 December 31, 2017 (in
thousands) ASSETS Current Assets: Cash and cash equivalents $ 4,065
$ 1,809 Accounts receivable, net 131,401 118,615 Receivable from
related parties 4,472 1,340 Gas imbalances 822 1,990 Inventories
32,147 21,609 Derivative assets 306 — Prepayments and other current
assets 10,946 11,175 Total Current Assets 184,159
156,538 Property, plant and equipment, net 2,498,715 2,394,337
Goodwill 404,838 404,838 Intangible assets, net 136,554 97,731
Unconsolidated investments 950,587 909,531 Deferred financing
costs, net 11,008 11,684 Deferred charges and other assets 5,018
2,694 Total Assets $ 4,190,879 $ 3,977,353
LIABILITIES AND EQUITY Current Liabilities: Accounts payable
$ 119,932 $ 98,882 Accounts payable to related parties 64 5,461 Gas
imbalances 1,616 1,663 Derivative liabilities — 2,368 Accrued taxes
24,181 19,272 Accrued liabilities 36,894 35,659 Deferred revenue
99,922 88,471 Other current liabilities 7,816 7,171
Total Current Liabilities 290,425 258,947 Long-term debt, net
2,302,014 2,146,993 Other long-term liabilities and deferred
credits 19,628 18,965 Total Long-term Liabilities
2,321,642 2,165,958 Commitments and Contingencies Equity: Limited
partners (73,199,753 common units outstanding at March 31, 2018 and
December 31, 2017) 2,152,036 2,109,316 General partner (834,391
units outstanding at March 31, 2018 and December 31, 2017) (640,536
) (625,537 ) Total Partners' Equity 1,511,500 1,483,779
Noncontrolling interests 67,312 68,669 Total Equity
1,578,812 1,552,448 Total Liabilities and Equity $
4,190,879 $ 3,977,353
TALLGRASS ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
(UNAUDITED)
Three Months Ended March 31, 2018 2017 (in
thousands, except per unit amounts) Revenues: Crude oil
transportation services $ 84,738 $ 84,331 Natural gas
transportation services 32,196 31,685 Sales of natural gas, NGLs,
and crude oil 38,145 15,381 Processing and other revenues 24,015
13,003 Total Revenues 179,094 144,400
Operating Costs and Expenses: Cost of sales 26,351 12,370 Cost of
transportation services 10,420 13,503 Operations and maintenance
16,399 12,903 Depreciation and amortization 26,123 21,403 General
and administrative 16,367 13,663 Taxes, other than income taxes
8,879 8,226 Gain on disposal of assets (9,417 ) (1,448 ) Total
Operating Costs and Expenses 95,122 80,620 Operating
Income 83,972 63,780 Other Income (Expense): Equity
in earnings of unconsolidated investments 53,406 20,738 Interest
expense, net (28,184 ) (14,689 ) Other income, net 451 1,955
Total Other Income (Expense) 25,673 8,004 Net
income 109,645 71,784 Net income attributable to noncontrolling
interests (1,761 ) (879 ) Net income attributable to partners $
107,884 $ 70,905 Allocation of income to the limited
partners: Net income attributable to partners $ 107,884 $ 70,905
General partner interest in net income (41,032 ) (30,583 ) Net
income available to common unitholders 66,852 40,322
Basic net income per common unit $ 0.91 $ 0.56
Diluted net income per common unit $ 0.91 $ 0.55
Basic average number of common units outstanding 73,200 72,544
Diluted average number of common units outstanding 73,675 73,580
TALLGRASS ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(UNAUDITED)
Three Months Ended March 31, 2018 2017 (in
thousands) Cash Flows from Operating Activities: Net income $
109,645 $ 71,784 Adjustments to reconcile net income to net cash
flows provided by operating activities: Depreciation and
amortization 27,502 23,575 Equity in earnings of unconsolidated
investments (53,406 ) (20,738 ) Distributions from unconsolidated
investments 52,064 20,740 Gain on disposal of assets (9,417 )
(1,448 ) Other noncash items, net 148 (1,674 ) Changes in
components of working capital: Accounts receivable and other
(12,015 ) 2,450 Accounts payable and accrued liabilities 14,775
(5,691 ) Deferred revenue 10,750 16,202 Other current assets and
liabilities (1,596 ) (819 ) Other operating, net 108 (140 )
Net Cash Provided by Operating Activities 138,558 104,241
Cash Flows from Investing Activities: Acquisition of BNN
North Dakota, net of cash acquired (95,000 ) — Capital expenditures
(58,760 ) (26,769 ) Sale of Tallgrass Crude Gathering 50,046 —
Acquisition of 38% membership interest in Deeprock North (19,500 )
— Distributions from unconsolidated investments in excess of
cumulative earnings 13,793 10,079 Acquisition of Rockies Express
membership interest — (400,000 ) Acquisition of Terminals and
NatGas — (140,000 ) Other investing, net (19,616 ) (5,352 ) Net
Cash Used in Investing Activities (129,037 ) (562,042 ) Cash Flows
from Financing Activities: Borrowings under revolving credit
facility, net 155,000 552,000 Distributions to unitholders (111,014
) (88,159 ) Acquisition of Pony Express membership interest (50,000
) — Proceeds from public offering, net of offering costs — 99,373
Partial exercise of call option — (72,381 ) Repurchase of common
units from TD — (35,335 ) Other financing, net (1,251 ) 1,628
Net Cash (Used in) Provided by Financing Activities (7,265 )
457,126 Net Change in Cash and Cash Equivalents 2,256 (675 )
Cash and Cash Equivalents, beginning of period 1,809
1,873 Cash and Cash Equivalents, end of period $ 4,065
$ 1,198 Schedule of Noncash Investing and
Financing Activities: Contribution of 38% membership interest in
Deeprock North to Deeprock Development $ (19,500 ) $ — Issuance of
noncontrolling interests in Deeprock Development in exchange for
62% membership interest in Deeprock North $ (31,843 ) $ — Increase
in accrual for payment of property, plant and equipment $ 1,336 $ —
TALLGRASS ENERGY GP, LP
CONDENSED CONSOLIDATING BALANCE
SHEETS
(UNAUDITED)
March 31, 2018 December 31, 2017 TEP
ConsolidatingAdjustments (1)
TEGP TEP
ConsolidatingAdjustments (1)
TEGP (in thousands) (in thousands) ASSETS Current
Assets: Cash and cash equivalents $ 4,065 $ 190 $ 4,255 $ 1,809 $
784 $ 2,593 Accounts receivable, net 131,401 — 131,401 118,615 —
118,615 Receivable from related parties 4,472 — 4,472 1,340 — 1,340
Gas imbalances 822 — 822 1,990 — 1,990 Inventories 32,147 — 32,147
21,609 — 21,609 Derivative assets 306 — 306 — — — Prepayments and
other current assets 10,946 74 11,020 11,175
— 11,175 Total Current Assets 184,159 264 184,423
156,538 784 157,322 Property, plant and equipment, net 2,498,715 —
2,498,715 2,394,337 — 2,394,337 Goodwill 404,838 — 404,838 404,838
— 404,838 Intangible assets, net 136,554 — 136,554 97,731 — 97,731
Unconsolidated investments 950,587 495,452 1,446,039 909,531 —
909,531 Deferred tax asset — 306,304 306,304 — 312,997 312,997
Deferred financing costs, net 11,008 761 11,769 11,684 879 12,563
Deferred charges and other assets 5,018 — 5,018
2,694 — 2,694 Total Assets $ 4,190,879
$ 802,781 $ 4,993,660 $ 3,977,353 $ 314,660
$ 4,292,013 LIABILITIES AND EQUITY Current Liabilities:
Accounts payable $ 119,932 $ 1,440 $ 121,372 $ 98,882 $ — $ 98,882
Accounts payable to related parties 64 (64 ) — 5,461 (119 ) 5,342
Gas imbalances 1,616 — 1,616 1,663 — 1,663 Derivative liabilities —
— — 2,368 — 2,368 Accrued taxes 24,181 — 24,181 19,272 — 19,272
Accrued liabilities 36,894 134 37,028 35,659 48 35,707 Deferred
revenue 99,922 — 99,922 88,471 — 88,471 Other current liabilities
7,816 — 7,816 7,171 — 7,171
Total Current Liabilities 290,425 1,510 291,935 258,947 (71 )
258,876 Long-term debt, net 2,302,014 124,000 2,426,014 2,146,993
146,000 2,292,993 Other long-term liabilities and deferred credits
19,628 — 19,628 18,965 — 18,965
Total Long-term Liabilities 2,321,642 124,000 2,445,642 2,165,958
146,000 2,311,958 Equity: Total Partners' Equity 1,511,500
(1,495,885 ) 15,615 1,483,779 (1,435,166 ) 48,613 Noncontrolling
interests 67,312 2,173,156 2,240,468 68,669
1,603,897 1,672,566 Total Equity 1,578,812
677,271 2,256,083 1,552,448 168,731
1,721,179 Total Liabilities and Equity $ 4,190,879 $ 802,781
$ 4,993,660 $ 3,977,353 $ 314,660 $
4,292,013 (1) Represents the aggregate consolidating
adjustments necessary to produce consolidated financial statements
for TEGP.
TALLGRASS ENERGY GP, LP
CONDENSED CONSOLIDATING STATEMENTS OF
INCOME
(UNAUDITED)
Three Months Ended March 31, 2018 Three Months Ended March
31, 2017 TEP
ConsolidatingAdjustments (1)
TEGP TEP
ConsolidatingAdjustments (1)
TEGP (in thousands) (in thousands) Revenues: Crude
oil transportation services $ 84,738 $ — $ 84,738 $ 84,331 $ — $
84,331 Natural gas transportation services 32,196 — 32,196 31,685 —
31,685 Sales of natural gas, NGLs, and crude oil 38,145 — 38,145
15,381 — 15,381 Processing and other revenues 24,015 —
24,015 13,003 — 13,003 Total
Revenues 179,094 — 179,094 144,400 —
144,400 Operating Costs and Expenses: Cost of sales
26,351 — 26,351 12,370 — 12,370 Cost of transportation services
10,420 — 10,420 13,503 — 13,503 Operations and maintenance 16,399 —
16,399 12,903 — 12,903 Depreciation and amortization 26,123 —
26,123 21,403 — 21,403 General and administrative 16,367 2,059
18,426 13,663 554 14,217 Taxes, other than income taxes 8,879 —
8,879 8,226 — 8,226 Gain on disposal of assets (9,417 ) —
(9,417 ) (1,448 ) — (1,448 ) Total Operating Costs and
Expenses 95,122 2,059 97,181 80,620 554
81,174 Operating Income 83,972 (2,059 ) 81,913
63,780 (554 ) 63,226 Other Income (Expense):
Equity in earnings of unconsolidated investments 53,406 14,996
68,402 20,738 — 20,738 Interest expense, net (28,184 ) (1,577 )
(29,761 ) (14,689 ) (1,328 ) (16,017 ) Other income, net 451
— 451 1,955 — 1,955 Total Other
Income (Expense) 25,673 13,419 39,092 8,004
(1,328 ) 6,676 Net income before tax 109,645 11,360
121,005 71,784 (1,882 ) 69,902 Deferred income tax expense —
(6,692 ) (6,692 ) — (2,664 ) (2,664 ) Net income 109,645
4,668 114,313 71,784 (4,546 ) 67,238 Net income attributable to
noncontrolling interests (1,761 ) (95,817 ) (97,578 ) (879 )
(54,330 ) (55,209 ) Net income attributable to TEGP $ 107,884
$ (91,149 ) $ 16,735 $ 70,905 $ (58,876 ) $
12,029 Allocation of income: Net income attributable to TEGP
$ 16,735 $ 12,029 Basic net income per Class A share
$ 0.29 $ 0.21 Diluted net income per Class A share $
0.29 $ 0.21 Basic average number of Class A shares
outstanding 58,085 58,075 Diluted average number of Class A shares
outstanding 58,210 58,165 (1) Represents the aggregate
consolidating adjustments necessary to produce consolidated
financial statements for TEGP.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180503005197/en/
Tallgrass EnergyInvestor and Financial
InquiriesNate Lien,
913-928-6012investor.relations@tallgrassenergylp.comorMedia and
Trade InquiriesPhyllis Hammond,
303-763-3568phyllis.hammond@tallgrassenergylp.com
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