HOUSTON, Nov. 8, 2018 /PRNewswire/ -- American
Midstream Partners, LP (NYSE: AMID) ("American Midstream" or the
"Partnership") today reported financial and operational results for
the three and nine months ended September
30, 2018.
Highlights
Financial
- Net income attributable to the Partnership was $38.2 million for the three months ended
September 30, 2018 as compared to
$55.9 million for the same period in
2017.
- Adjusted EBITDA was $35.2 million
for the three months ended September 30,
2018, compared to $42.4
million for the third quarter of 2017. (1)
- Total segment gross margin was $74.5
million for the three months ended September 30, 2018, compared to $63.7 million for the same period in 2017, an
increase of 17%. (1)
- Distributable cash flow was $4.5
million for the three months ended September 30, 2018, compared to $22.1 million for the same period in 2017. The
decrease was primarily a result of increased preferred unit
distributions and interest expense.
Operational
- Continued producer development across the Partnership's Eagle
Ford gathering and processing assets contributed to a 30% increase
in throughput volumes over the third quarter of 2017.
- Increased activity in the deep-water Gulf of Mexico drove a 23% increase in natural
gas throughput volumes on the Partnership's consolidated offshore
assets over third quarter 2017.
- Continued strength across the Partnership's natural gas
transportation assets, with volumes increasing 72% from the same
period in the prior year, driven by the acquisition of Trans-Union
pipeline.
- Strong producer activity across the Partnership's East Texas and Permian assets contributed to
an 18% increase in NGL production volumes over the third quarter of
2017.
- Active drilling programs in and around the Partnership's Bakken
assets drove a 97% increase in throughput volumes over the second
quarter of 2018.
- Current production flows on Delta House are approximately 90
MBoe/d.
SEGMENT
PERFORMANCE
|
|
|
Segment Gross
Margin
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Offshore Pipelines
and Services
|
$38,823
|
|
$29,312
|
|
$88,470
|
|
$80,738
|
Gas Gathering and
Processing Services
|
15,421
|
|
12,761
|
|
42,613
|
|
36,663
|
Liquid Pipelines and
Services
|
9,351
|
|
7,808
|
|
24,365
|
|
21,209
|
Natural Gas
Transportation Services
|
7,044
|
|
5,356
|
|
27,384
|
|
17,106
|
Terminalling
Services
|
3,848
|
|
8,509
|
|
20,753
|
|
30,429
|
Total Segment Gross
Margin (1)
|
$74,487
|
|
$63,746
|
|
$203,585
|
|
$186,145
|
|
(1)
Non-GAAP supplemental financial measure. Please read "Note
About Non-GAAP Financial Measures" in Appendix A.
|
Offshore Pipelines and Services
Segment gross margin was $38.8
million for the three months ended September 30, 2018,
an increase of 32% compared to the same period in 2017. The
increase was primarily a result of the acquisition and
consolidation of Panther Operating and Main Pass Oil Gathering in
the third quarter of 2017 and higher throughput volumes on the
Partnership's High Point Gas Gathering system due to maintenance on
third party systems. Quarterly cash distributions from
unconsolidated affiliates were $16.7
million for the three months ended September 30, 2018, an 8% decrease compared to
the same period in 2017. The decrease was primarily related
to lower throughput volumes on Partnership's unconsolidated
offshore assets due to weather and operational downtime needed to
prepare for the planned additional well tie-backs into Delta House,
which are scheduled to be connected in the fourth quarter of this
year. The decrease was offset by additional equity
ownership interest in Delta House to 35.7% and Destin to 66.7%.
Gas Gathering and Processing Services
Segment gross margin was $15.4
million for the three months ended September 30, 2018,
an increase of 21% compared to the same period in 2017. The
increase reflected continued strength in NGL prices on the
Partnership's core East Texas and
Permian assets and continued increases in producer development
activity across the Partnership's Gas Gathering and Processing
Services segment. Further, in the third quarter of 2018, the
Partnership's anchor producer in the Eagle Ford brought on line 10
new wells, which drove a 30% increase in throughput volumes on this
system from the same period in the prior year.
Liquid Pipelines and Services
Segment gross margin was $9.4 million for the three
months ended September 30, 2018, an increase of 20% as
compared to the same period in 2017. Quarterly cash
distributions from unconsolidated affiliates were $3.0 million, a 48% increase compared to the same
period in 2017. The Partnership benefited from increased
producer activity across the segment, which drove a 12% increase in
throughput volumes, on the Partnership's consolidated assets,
compared to the same period in 2017. The increase in
distributions was driven by the Partnership's interest in the
Cayenne pipeline, which commenced operation in January of 2018 and
continues operating near nameplate capacity of 40,000 Bbls/d.
In addition, the Partnership is benefiting from higher average
crude oil and NGL prices, both of which were approximately 40%
higher compared to the third quarter of 2017.
Natural Gas Transportation Services
Segment gross margin was $7.0
million for the three months ended September 30, 2018,
a 32% increase compared to the same period in 2017. The
increase was primarily attributable to the acquisition of
Trans-Union pipeline in November 2017
that further strengthened the Partnership's growing Southeast gas
transmission business. Throughput volumes grew 72% compared
to the same period in 2017, supported by the acquisition of
Trans-Union and continued strong industrial demand.
Terminalling Services
Segment gross margin was $3.8
million for the three months ended September 30, 2018,
a decrease of 55% compared to the same period in 2017. The
decrease in gross margin was primarily a result of the successful
completion of the sale of the Partnership's Marine Products
Terminals, on August 1, 2018, for
approximately $210 million and
reduced market rates for storage and utilization at the
Partnership's Cushing
terminals. This decline was partially offset by an increase
in refined products throughput revenue, from facility enhancements,
at the Partnership's North Texas Caddo Mills terminals.
Capital Allocation Strategy
On July 27, 2018, the Partnership
announced a revised capital allocation strategy designed to reduce
leverage, provide capital for strategic growth opportunities and
strengthen the Partnership, through a self-funding growth
model.
In concert with this strategy, the Partnership has identified
approximately $350 – $400 million of additional high-value, non-core
assets and has begun actively marketing the majority of these
identified assets. Further, the Partnership is actively
remarketing its refined products terminals due to the original
process being delayed by federal regulatory approval. The
proceeds from these combined asset sales will go towards
deleveraging the Partnership's balance sheet towards its target
leverage ratio near 4-times.
Recent Development
On September 28, 2018, the Board
of Directors of American Midstream GP, LLC ("GP Board") received an
unsolicited non-binding proposal from affiliates of ArcLight Energy
Partners Fund V, L.P. ("ArcLight"), pursuant to which ArcLight
would acquire all common units of the Partnership that ArcLight and
its affiliates do not already own in exchange for $6.10 per common unit. If approved, it is
currently expected that the transaction would be consummated
through a merger of the Partnership with a subsidiary of
ArcLight.
The proposed transaction is subject to a number of
contingencies, including the approval of the Conflicts Committee of
the GP Board, and the satisfaction of any conditions to the
consummation of a transaction set forth in any definitive agreement
concerning the transaction. There can be no assurance that
definitive documentation will be executed or that any transaction
will materialize on the terms described above or at all.
CAPITAL MANAGEMENT
As of September 30, 2018, the Partnership had approximately
$1.1 billion of total debt
outstanding, comprising of $600
million outstanding under its revolving credit facility,
$425 million outstanding under its
8.50% senior unsecured notes and $89
million outstanding in non-recourse senior secured notes.
The Partnership had a consolidated total leverage ratio of
approximately 5.6 times at September
30, 2018.
To mitigate the potential negative impact of rising interest
rates and promote more predictable and stable cash flows, the
Partnership has a series of interest rate swap agreements for
approximately $550 million at an
average rate of LIBOR plus 130 basis points extending through
2022. As of September 30, 2018,
the Partnership had a mark-to-market benefit of $18.5 million from these swaps.
For the three months ended September 30, 2018, capital
expenditures totaled approximately $17
million, including approximately $3
million of maintenance capital expenditures.
CONFERENCE CALL INFORMATION
The Partnership will host a conference call at 10:00 AM Eastern Time on Thursday, November 8,
2018 to discuss these results. The call will be webcast and
archived on the Partnership's website for a limited time.
Date:
|
Thursday, November 8,
2018
|
Time:
|
10:00 AM ET / 9:00 AM
CT
|
Dial-In
Numbers:
|
(888) 317 - 6003
(Domestic toll-free)
|
|
(412) 317 - 6061
(International)
|
|
|
Conference
ID:
|
5192905
|
|
|
Webcast
URL:
|
www.AmericanMidstream.com/investor-relations
|
Non-GAAP Financial Measures
This press release and the accompanying tables include
supplemental non-GAAP financial measures, including "Adjusted
EBITDA," "Total Segment Gross Margin," "Operating
Margin," and "Distributable Cash Flow." For definitions
and required reconciliations of supplemental non-GAAP financial
measures to the nearest comparable GAAP financial measures, please
read a "Note About Non-GAAP Financial Measures" set forth in a
later section of 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
offshore and onshore basins in the Permian, Eagle Ford,
East Texas, Bakken and Gulf Coast.
American Midstream owns or has an ownership interest in
approximately 5,100 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 90 MBbl/d of crude oil and
220 MMcf/d of natural gas; and terminal sites with approximately
4.3 MMBbls of storage capacity.
For more information about American Midstream Partners, LP,
visit: www.americanmidstream.com. The content of our website is not
part of this release.
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended, including statements
related to the Partnership's expectations regarding the timing of
the proposed offering and use of proceeds. We have used the words
"could," "expect," "intend," "may," "will," "poised," "potential,"
"promote," "would," "designed," "plan" 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. Many of
the factors that will determine these results are beyond our
ability to control or predict. These factors include the risk
factors described in Part I, Item 1A. in our Annual Report on Form
10-K for the year ended December 31,
2017, filed with the SEC on April 9,
2018, and 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 such statements for any reason, except as
required by law.
The preliminary financial results for the Partnership's third
quarter ended September 30, 2018
included in this press release represent the most current
information available to management. The Partnership's actual
results when disclosed in our Quarterly Report on
Form 10-Q for the quarter ended September 30, 2018 may differ from these
preliminary results as a result of the completion of
the Partnership's financial statements closing
procedures, final adjustments, completion of the independent
registered public accounting firm's review, and other developments
that may arise between now and the disclosure of the final results
and audited financials.
Investor Contact
American Midstream Partners, LP
Mark Schuck
Director of Investor Relations
(346) 241-3497
ir@americanmidstream.com
American Midstream
Partners, LP and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(Unaudited, in
thousands)
|
|
|
|
September 30,
2018
|
|
December 31,
2017
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
22,758
|
|
|
$
|
8,782
|
|
Restricted
cash
|
|
25,744
|
|
|
20,352
|
|
Accounts receivable,
net of allowance for doubtful accounts of $706 and $225 as of
September 30, 2018 and December 31, 2017, respectively
|
|
84,819
|
|
|
98,132
|
|
Inventory and other
current assets
|
|
29,051
|
|
|
26,386
|
|
Assets held for
sale
|
|
126,690
|
|
|
—
|
|
Total current assets
|
|
289,062
|
|
|
153,652
|
|
Property, plant and
equipment, net
|
|
993,920
|
|
|
1,095,585
|
|
Goodwill
|
|
51,723
|
|
|
128,866
|
|
Restricted cash -
long term
|
|
5,068
|
|
|
5,045
|
|
Intangible and other
assets, net
|
|
136,537
|
|
|
174,010
|
|
Investment in
unconsolidated affiliates
|
|
336,789
|
|
|
348,434
|
|
Other assets,
net
|
|
21,506
|
|
|
17,874
|
|
Total
assets
|
|
$
|
1,834,605
|
|
|
$
|
1,923,466
|
|
Liabilities,
Equity and Partners' Capital
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Total current
liabilities
|
|
$
|
784,277
|
|
|
$
|
137,493
|
|
Asset retirement
obligations
|
|
68,090
|
|
|
66,194
|
|
Other long-term
liabilities
|
|
15,770
|
|
|
2,080
|
|
Long-term
debt
|
|
501,219
|
|
|
1,201,456
|
|
Deferred tax
liability
|
|
1,351
|
|
|
8,123
|
|
Total
liabilities
|
|
1,370,707
|
|
|
1,415,346
|
|
Convertible preferred
units
|
|
317,180
|
|
|
317,180
|
|
Total Equity and
partners' capital
|
|
146,718
|
|
|
190,940
|
|
Total liabilities,
equity and partners' capital
|
|
$
|
1,834,605
|
|
|
$
|
1,923,466
|
|
American Midstream
Partners, LP and Subsidiaries
|
Condensed
Consolidated Statements of Operations
|
(Unaudited, in
thousands, except for per unit amounts)
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues
|
|
$
|
202,346
|
|
|
$
|
162,290
|
|
|
$
|
628,390
|
|
|
$
|
488,398
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
150,274
|
|
|
112,398
|
|
|
461,948
|
|
|
342,886
|
|
Direct operating
expenses
|
|
20,407
|
|
|
20,705
|
|
|
65,595
|
|
|
56,819
|
|
Corporate
expenses
|
|
23,857
|
|
|
27,083
|
|
|
69,922
|
|
|
84,570
|
|
Termination
fee
|
|
17,000
|
|
|
—
|
|
|
17,000
|
|
|
—
|
|
Depreciation,
amortization and accretion
|
|
23,040
|
|
|
26,781
|
|
|
66,274
|
|
|
78,834
|
|
Gain on sale of
assets, net
|
|
(99,396)
|
|
|
(4,061)
|
|
|
(99,491)
|
|
|
(4,064)
|
|
Total operating
expenses
|
|
135,182
|
|
|
182,906
|
|
|
581,248
|
|
|
559,045
|
|
Operating income
(loss)
|
|
67,164
|
|
|
(20,616)
|
|
|
47,142
|
|
|
(70,647)
|
|
Other income
(expense), net:
|
|
|
|
|
|
|
|
|
Interest expense, net
of capitalized interest
|
|
(22,267)
|
|
|
(17,759)
|
|
|
(55,834)
|
|
|
(51,037)
|
|
Other income
(expense), net
|
|
(128)
|
|
|
34,085
|
|
|
62
|
|
|
32,248
|
|
Earnings in
unconsolidated affiliates
|
|
24,622
|
|
|
16,827
|
|
|
47,742
|
|
|
49,781
|
|
Income (loss) from
continuing operations before income taxes
|
|
69,391
|
|
|
12,537
|
|
|
39,112
|
|
|
(39,655)
|
|
Income tax
expense
|
|
(31,208)
|
|
|
(731)
|
|
|
(32,045)
|
|
|
(2,611)
|
|
Income (loss) from
continuing operations
|
|
38,183
|
|
|
11,806
|
|
|
7,067
|
|
|
(42,266)
|
|
Income from
discontinued operations, including gain on sale
|
|
—
|
|
|
44,696
|
|
|
—
|
|
|
42,185
|
|
Net income
(loss)
|
|
38,183
|
|
|
56,502
|
|
|
7,067
|
|
|
(81)
|
|
Net income
attributable to noncontrolling interests
|
|
(25)
|
|
|
(621)
|
|
|
(83)
|
|
|
(3,386)
|
|
Net income (loss)
attributable to the Partnership
|
|
$
|
38,158
|
|
|
$
|
55,881
|
|
|
$
|
6,984
|
|
|
$
|
(3,467)
|
|
|
|
|
|
|
|
|
|
|
Limited Partners' net
income (loss) per common unit:
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
$
|
0.56
|
|
|
$
|
0.05
|
|
|
$
|
(0.34)
|
|
|
$
|
(1.35)
|
|
Income from
discontinued operations
|
|
—
|
|
|
0.86
|
|
|
—
|
|
|
0.81
|
|
Net income (loss) per
common unit
|
|
$
|
0.56
|
|
|
$
|
0.91
|
|
|
$
|
(0.34)
|
|
|
$
|
(0.54)
|
|
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
$
|
0.39
|
|
|
$
|
0.05
|
|
|
$
|
(0.34)
|
|
|
$
|
(1.35)
|
|
Income from
discontinued operations
|
|
—
|
|
|
0.86
|
|
|
—
|
|
|
0.81
|
|
Net income (loss) per
common unit
|
|
$
|
0.39
|
|
|
$
|
0.91
|
|
|
$
|
(0.34)
|
|
|
$
|
(0.54)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common units outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
52,984
|
|
|
52,021
|
|
|
52,917
|
|
|
52,021
|
|
Diluted
|
|
75,525
|
|
|
52,021
|
|
|
52,917
|
|
|
52,021
|
|
American Midstream
Partners, LP and Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited, in
thousands)
|
|
|
|
Nine months
ended
September 30,
|
|
|
2018
|
|
2017
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
12,944
|
|
|
$
|
15,005
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
151,848
|
|
|
1,986
|
|
|
|
|
|
|
Net cash used in
financing activities
|
|
(145,401)
|
|
|
(315,106)
|
|
|
|
|
|
|
Net decrease in Cash,
Cash equivalents, and Restricted cash
|
|
19,391
|
|
|
(298,115)
|
|
|
|
|
|
|
Cash, Cash
equivalents and Restricted cash
|
|
|
|
|
Beginning of
period
|
|
34,179
|
|
|
329,230
|
|
End of
period
|
|
$
|
53,570
|
|
|
$
|
31,115
|
|
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
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Reconciliation of
Net loss attributable to the Partnership to Adjusted EBITDA and
DCF:
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to the Partnership
|
|
$
|
38,158
|
|
|
$
|
55,881
|
|
|
$
|
6,984
|
|
|
$
|
(3,467)
|
|
Depreciation,
amortization and accretion expense
|
|
23,040
|
|
|
26,781
|
|
|
66,274
|
|
|
78,834
|
|
Noncontrolling
interest share of depreciation, amortization and accretion
expense
|
|
—
|
|
|
(96)
|
|
|
—
|
|
|
(661)
|
|
Interest expense, net
of capitalized interest
|
|
22,267
|
|
|
17,759
|
|
|
55,834
|
|
|
51,037
|
|
Amortization of
deferred financing costs
|
|
(2,493)
|
|
|
(1,154)
|
|
|
(5,142)
|
|
|
(3,610)
|
|
Unrealized loss
(gain) on interest rate swaps
|
|
33
|
|
|
(1,646)
|
|
|
6,123
|
|
|
(3,658)
|
|
Debt issuance costs
paid
|
|
1,959
|
|
|
119
|
|
|
4,701
|
|
|
2,235
|
|
Unrealized losses
(gains) on derivatives, net
|
|
79
|
|
|
325
|
|
|
(5,771)
|
|
|
2,288
|
|
Non-cash equity
compensation expense
|
|
1,335
|
|
|
835
|
|
|
3,529
|
|
|
6,067
|
|
Transaction
expenses
|
|
7,105
|
|
|
10,470
|
|
|
22,922
|
|
|
31,155
|
|
Termination
fee
|
|
17,000
|
|
|
—
|
|
|
17,000
|
|
|
—
|
|
Income tax
expense
|
|
31,209
|
|
|
731
|
|
|
32,045
|
|
|
2,611
|
|
Discontinued
operations
|
|
—
|
|
|
(44,745)
|
|
|
—
|
|
|
(36,247)
|
|
Distributions from
unconsolidated affiliates
|
|
19,705
|
|
|
20,582
|
|
|
64,260
|
|
|
58,976
|
|
General Partner
contribution
|
|
—
|
|
|
9,870
|
|
|
17,732
|
|
|
34,614
|
|
Earnings in
unconsolidated affiliates
|
|
(24,622)
|
|
|
(16,827)
|
|
|
(47,742)
|
|
|
(49,781)
|
|
Other
income
|
|
(162)
|
|
|
(91)
|
|
|
(385)
|
|
|
(257)
|
|
Gain on revaluation
of equity interest
|
|
—
|
|
|
(32,383)
|
|
|
—
|
|
|
(32,383)
|
|
Gain on sale of
assets, net
|
|
(99,396)
|
|
|
(4,061)
|
|
|
(99,491)
|
|
|
(4,064)
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
35,217
|
|
|
$
|
42,350
|
|
|
$
|
138,873
|
|
|
$
|
133,689
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
of capitalized interest
|
|
(22,267)
|
|
|
(17,759)
|
|
|
(55,834)
|
|
|
(51,037)
|
|
Amortization of
deferred financing costs
|
|
2,493
|
|
|
1,154
|
|
|
5,142
|
|
|
3,610
|
|
Unrealized (loss) gain
on interest rate swaps
|
|
(33)
|
|
|
1,646
|
|
|
(6,123)
|
|
|
3,658
|
|
Letter of credit
fees
|
|
—
|
|
|
(11)
|
|
|
21
|
|
|
210
|
|
Maintenance
capital
|
|
(2,553)
|
|
|
(2,449)
|
|
|
(9,631)
|
|
|
(6,570)
|
|
Preferred unit
distributions
|
|
(8,354)
|
|
|
(2,870)
|
|
|
(25,061)
|
|
|
(16,311)
|
|
Distributable Cash
Flow
|
|
$
|
4,503
|
|
|
$
|
22,061
|
|
|
$
|
47,387
|
|
|
$
|
67,249
|
|
|
|
|
|
|
|
|
|
|
Limited Partner
Distributions
|
|
$
|
5,463
|
|
|
$
|
21,345
|
|
|
$
|
49,061
|
|
|
$
|
67,648
|
|
|
|
|
|
|
|
|
|
|
Distribution
Coverage
|
|
0.8
|
x
|
|
1.0
|
x
|
|
1.0
|
x
|
|
1.0
|
x
|
American Midstream
Partners, LP and Subsidiaries
|
Reconciliation of
Total Gross Margin to Net loss attributable to the
Partnership
|
(Unaudited, in
thousands)
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Total Segment
Gross Margin
|
|
$
|
74,487
|
|
|
$
|
63,746
|
|
|
$
|
203,585
|
|
|
$
|
186,145
|
|
Direct operating
expenses
|
|
(18,254)
|
|
|
(17,274)
|
|
|
(54,991)
|
|
|
(47,316)
|
|
Operating
margin
|
|
56,233
|
|
|
46,472
|
|
|
148,594
|
|
|
138,829
|
|
|
|
|
|
|
|
|
|
|
Loss on commodity
derivatives, net
|
|
(234)
|
|
|
(597)
|
|
|
(530)
|
|
|
(33)
|
|
Corporate
expenses
|
|
(23,857)
|
|
|
(27,083)
|
|
|
(69,922)
|
|
|
(84,570)
|
|
Termination
fee
|
|
(17,000)
|
|
|
—
|
|
|
(17,000)
|
|
|
—
|
|
Depreciation,
amortization and accretion expense
|
|
(23,040)
|
|
|
(26,781)
|
|
|
(66,274)
|
|
|
(78,834)
|
|
Gain on sale of
assets, net
|
|
99,396
|
|
|
4,061
|
|
|
99,491
|
|
|
4,064
|
|
Interest expense, net
of capitalized interest
|
|
(22,267)
|
|
|
(17,759)
|
|
|
(55,834)
|
|
|
(51,037)
|
|
Other
income
|
|
160
|
|
|
34,224
|
|
|
587
|
|
|
31,926
|
|
Income tax
expense
|
|
(31,208)
|
|
|
(731)
|
|
|
(32,045)
|
|
|
(2,611)
|
|
Net income from
discontinued operations, net of tax
|
|
—
|
|
|
44,696
|
|
|
—
|
|
|
42,185
|
|
Net income
attributable to noncontrolling interests
|
|
(25)
|
|
|
(621)
|
|
|
(83)
|
|
|
(3,386)
|
|
Net income (loss)
attributable to the Partnership
|
|
$
|
38,158
|
|
|
$
|
55,881
|
|
|
$
|
6,984
|
|
|
$
|
(3,467)
|
|
American Midstream
Partners, LP and Subsidiaries
|
Segment Financial
and Operating Data
|
(Unaudited, in
thousands, except for operating and pricing data)
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Segment Financial
and Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offshore
Pipelines and Services Segment
|
|
|
|
|
|
|
|
|
Financial
data:
|
|
|
|
|
|
|
|
|
Segment gross
margin
|
|
$
|
38,823
|
|
|
$
|
29,312
|
|
|
$
|
88,470
|
|
|
$
|
80,738
|
|
Direct operating
expenses
|
|
7,698
|
|
|
3,940
|
|
|
23,205
|
|
|
10,010
|
|
Segment operating
margin
|
|
$
|
31,125
|
|
|
$
|
25,372
|
|
|
$
|
65,265
|
|
|
$
|
70,728
|
|
|
|
|
|
|
|
|
|
|
Distributions:
|
|
|
|
|
|
|
|
|
Destin/Okeanos
|
|
$
|
7,598
|
|
|
$
|
7,882
|
|
|
$
|
33,479
|
|
|
$
|
26,667
|
|
Delta House
|
|
9,114
|
|
|
10,283
|
|
|
23,332
|
|
|
26,174
|
|
Total
|
|
$
|
16,712
|
|
|
$
|
18,165
|
|
|
$
|
56,811
|
|
|
$
|
52,841
|
|
|
|
|
|
|
|
|
|
|
Operating data:
|
|
|
|
|
|
|
|
|
Average throughput
(MMcfe/d)
|
|
512.1
|
|
|
415.6
|
|
|
498.1
|
|
|
521.8
|
|
Average Destin/Okeanos
throughput (MMcf/d)
|
|
1,109.8
|
|
|
1,104.9
|
|
|
1,027.1
|
|
|
1,113.7
|
|
Average Delta House
throughput (MBoe/d)
|
|
86.6
|
|
|
122.8
|
|
|
61.8
|
|
|
113.8
|
|
|
|
|
|
|
|
|
|
|
Gas Gathering
and Processing Services Segment
|
|
|
|
|
|
|
|
|
Financial
data:
|
|
|
|
|
|
|
|
|
Segment gross
margin
|
|
$
|
15,421
|
|
|
$
|
12,761
|
|
|
$
|
42,613
|
|
|
$
|
36,663
|
|
Direct operating
expenses
|
|
6,099
|
|
|
8,655
|
|
|
18,705
|
|
|
24,766
|
|
Segment operating
margin
|
|
$
|
9,322
|
|
|
$
|
4,106
|
|
|
$
|
23,908
|
|
|
$
|
11,897
|
|
Operating
data:
|
|
|
|
|
|
|
|
|
Average throughput
(MMcf/d)
|
|
183.3
|
|
|
201.0
|
|
|
172.9
|
|
|
205.0
|
|
|
|
|
|
|
|
|
|
|
Liquid
Pipelines & Services
|
|
|
|
|
|
|
|
|
Financial
data:
|
|
|
|
|
|
|
|
|
Segment gross
margin
|
|
$
|
9,351
|
|
|
$
|
7,808
|
|
|
$
|
24,365
|
|
|
$
|
21,209
|
|
Direct operating
expenses
|
|
2,465
|
|
|
2,438
|
|
|
7,603
|
|
|
7,137
|
|
Segment operating
margin
|
|
$
|
6,886
|
|
|
$
|
5,370
|
|
|
$
|
16,762
|
|
|
$
|
14,072
|
|
|
|
|
|
|
|
|
|
|
Distributions:
|
|
|
|
|
|
|
|
|
Distributions from
unconsolidated affiliates
|
|
$
|
2,994
|
|
|
$
|
2,018
|
|
|
$
|
7,448
|
|
|
$
|
5,036
|
|
|
|
|
|
|
|
|
|
|
Operating data:
|
|
|
|
|
|
|
|
|
Average unconsolidated
affiliate throughput (MBbls/d)
|
|
119.3
|
|
|
85.6
|
|
|
113.4
|
|
|
86.9
|
|
Average other liquid
pipelines throughput (MBbls/d)
|
|
74.9
|
|
|
66.8
|
|
|
75.9
|
|
|
66.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas
Transportation Services Segment
|
|
|
|
|
|
|
|
|
Financial
data:
|
|
|
|
|
|
|
|
|
Segment gross
margin
|
|
$
|
7,044
|
|
|
$
|
5,356
|
|
|
$
|
27,384
|
|
|
$
|
17,106
|
|
Direct operating
expenses
|
|
1,993
|
|
|
2,240
|
|
|
5,477
|
|
|
5,403
|
|
Segment operating
margin
|
|
$
|
5,051
|
|
|
$
|
3,116
|
|
|
$
|
21,907
|
|
|
$
|
11,703
|
|
Operating
data:
|
|
|
|
|
|
|
|
|
Average throughput
(MMcf/d)
|
|
679.7
|
|
|
396.2
|
|
|
700.9
|
|
|
383.1
|
|
|
|
|
|
|
|
|
|
|
Terminalling
Services Segment
|
|
|
|
|
|
|
|
|
Financial
data:
|
|
|
|
|
|
|
|
|
Segment
revenue
|
|
$
|
7,551
|
|
|
$
|
13,087
|
|
|
$
|
41,310
|
|
|
$
|
47,544
|
|
Cost of
sales
|
|
1,551
|
|
|
1,146
|
|
|
9,952
|
|
|
7,612
|
|
Direct operating
expenses
|
|
2,152
|
|
|
3,432
|
|
|
10,605
|
|
|
9,503
|
|
Segment operating
margin
|
|
$
|
3,848
|
|
|
$
|
8,509
|
|
|
$
|
20,753
|
|
|
$
|
30,429
|
|
Operating
data:
|
|
|
|
|
|
|
|
|
Contracted Capacity
(Bbls)
|
|
2,983,100
|
|
|
5,159,978
|
|
|
4,042,624
|
|
|
5,199,670
|
|
Design Capacity
(Bbls)
|
|
5,425,800
|
|
|
5,400,800
|
|
|
5,411,514
|
|
|
5,400,800
|
|
Storage
Utilization
|
|
55.0
|
%
|
|
95.5
|
%
|
|
74.7
|
%
|
|
96.3
|
%
|
Terminalling and
storage throughput (Bbls/d)
|
|
59,013
|
|
|
60,002
|
|
|
58,828
|
|
|
58,776
|
|
Appendix A
Note About Non-GAAP Financial Measures
Total segment gross margin, operating margin, Distributable Cash
Flow ("DCF") and Adjusted EBITDA are performance measures that are
non-GAAP financial measures. Each has important limitations as an
analytical tool because they exclude some, but not all, items that
affect the most directly comparable GAAP financial measures.
Management compensates for the limitations of these non-GAAP
measures as analytical tools by reviewing the comparable GAAP
measures, understanding the differences between the measures and
incorporating these data points into management's decision-making
process.
You should not consider total segment gross margin, operating
margin, distributable cash flow or Adjusted EBITDA in isolation or
as a substitute for, or more meaningful than analysis of, our
results as reported under GAAP. Total segment gross margin,
operating margin, distributable cash flow and Adjusted EBITDA may
be defined differently by other companies in our industry. Our
definitions of these non-GAAP financial measures may not be
comparable to similarly titled measures of other companies, thereby
diminishing their utility.
Adjusted EBITDA is a supplemental non-GAAP financial measure
used by our management and external users of our financial
statements, such as investors, commercial banks, research analysts
and others, to assess: the financial performance of our assets
without regard to financing methods, capital structure or
historical cost basis; the ability of our assets to generate cash
flow to make cash distributions to our unitholders and our General
Partner; our operating performance and return on capital as
compared to those of other companies in the midstream energy
sector, without regard to financing or capital structure; and the
attractiveness of capital projects and acquisitions and the overall
rates of return on alternative investment opportunities.
We define Adjusted EBITDA as net income (loss) attributable to
the Partnership, plus depreciation, amortization and accretion
expense ("DAA") excluding non-controlling interest share of
DAA, interest expense, net of capitalized interest excluding
realized gain (loss) on interest rate swaps, debt issuance costs
paid during the period, unrealized gains (losses) on
derivatives, non-cash charges such as non-cash equity compensation
expense, charges that are unusual such as transaction expenses
primarily associated with our acquisitions, income tax expense,
distributions from unconsolidated affiliates and General Partner's
contribution, less earnings in unconsolidated affiliates,
discontinued operations, gains (losses) that are unusual, such as
gain on revaluation of equity interest and gain (loss) on sale of
assets, net, and other non-recurring items that impact our
business, such as construction and operating management agreement
income ("COMA") and other post-employment benefits plan net
periodic benefit. The GAAP measure most directly comparable
to our performance measure Adjusted EBITDA is net loss attributable
to the Partnership.
DCF is a significant performance metric used by us and by
external users of the Partnership's financial statements, such as
investors, commercial banks and research analysts, to compare basic
cash flows generated by us to the cash distributions we expect to
pay the Partnership's unitholders. Using this metric, management
and external users of the Partnership's financial statements can
quickly compute the coverage ratio of estimated cash flows to
planned cash distributions. DCF is also an important financial
measure for the Partnership's unitholders since it serves as an
indicator of the Partnership's success in providing a cash return
on investment. Specifically, this financial measure may indicate to
investors whether we are generating cash flow at a level that can
sustain the Partnership's quarterly distribution rates. DCF is also
a quantitative standard used throughout the investment community
with respect to publicly traded partnerships and limited liability
companies because the value of a unit of such an entity is
generally determined by the unit's yield (which in turn is based on
the amount of cash distributions the entity pays to a unitholder).
DCF will not reflect changes in working capital balances.
We define DCF as Adjusted EBITDA, less interest expense, net of
capitalized interest excluding realized gain/(loss) on interest
rate swaps and letter of credit fees, maintenance capital
expenditures, and distributions related to the Series A and Series
C convertible preferred units. The GAAP financial measure most
comparable to DCF is Net income (loss) attributable to the
Partnership.
Segment gross margin and total segment gross margin are metrics
that we use to evaluate our performance. These metrics are
useful for understanding our operating performance because it
measures the operating results of our segments before DD&A and
certain expenses that are generally not controllable by our
business segment development managers, such as certain operating
costs, general and administrative expenses, interest expense and
income taxes. Operating margin is useful for similar reasons
except that it also includes all direct operating expenses in order
to assess the performance of our operating managers.
We define segment gross margin in our Gas Gathering and
Processing Services segment as total revenue plus unconsolidated
affiliate earnings less unrealized gains or plus unrealized losses
on commodity derivatives, construction and operating management
agreement income and the cost of natural gas, and NGLs and
condensate purchased.
We define segment gross margin in our Liquid Pipelines and
Services segment as total revenue plus unconsolidated affiliate
earnings less unrealized gains or plus unrealized losses on
commodity derivatives and the cost of crude oil purchased in
connection with fixed-margin arrangements. Substantially all of our
gross margin in this segment is fee-based or fixed-margin, with
little to no direct commodity price risk.
We define segment gross margin in our Natural Gas Transportation
Services segment as total revenue plus unconsolidated affiliate
earnings less the cost of natural gas purchased in connection with
fixed-margin arrangements. Substantially all of our gross margin in
this segment is fee-based or fixed-margin, with little to no direct
commodity price risk.
We define segment gross margin in our Offshore Pipelines and
Services segment as total revenue plus unconsolidated affiliate
earnings less the cost of natural gas purchased in connection with
fixed-margin arrangements. Substantially all of our gross
margin in this segment is fee-based or fixed-margin, with little to
no direct commodity price risk.
We define segment gross margin in our Terminalling Services
segment as total revenue less direct operating expense which
includes direct labor, general materials and supplies and direct
overhead.
Total segment gross margin is a supplemental non-GAAP financial
measure that we use to evaluate our performance. We define total
segment gross margin as the sum of the segment gross margins for
our Gas Gathering and Processing Services, Liquid Pipelines and
Services, Natural Gas Transportation Services, Offshore Pipelines
and Services and Terminalling Services segments. The GAAP measure
most directly comparable to total segment gross margin is Net
Income (Loss) attributable to the Partnership.
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SOURCE American Midstream Partners, LP