EX-99.1 2 a07-28057_5ex99d1.htm EX-99.1

Exhibit 99.1

 

 

MarkWest Energy Partners, L.P.

Contact:

Frank Semple, President and CEO

1515 Arapahoe Street

 

Nancy Buese, Senior VP and CFO

Tower 2, Suite 700

 

Andy Schroeder, VP of Finance/Treasurer

Denver, CO 80202

Phone:

(866) 858-0482       Fax: (303) 925-9308

 

E-mail

investorrelations@markwest.com

 

Website:

www.markwest.com

 

MarkWest Energy Partners Reports Third Quarter 2007 Financial Results

Distributable Cash Flow Increases 27 Percent Compared to Prior Year Quarter

 

DENVER—November 6, 2007—MarkWest Energy Partners, L.P. (NYSE: MWE) (“the Partnership”) today reported distributable cash flow (“DCF”) of $46.9 million for the three months ended September 30, 2007, compared to $36.8 million for the three months ended September 30, 2006, an increase of 27 percent.  For the nine months ended September 30, 2007, the Partnership reported DCF of $114.9 million compared to $90.2 million for the comparable period in 2006.  As a Master Limited Partnership, cash distributions to limited partners are largely determined based on DCF.  A reconciliation of DCF to net income before tax, the most directly comparable GAAP financial measure, is provided within the financial tables of this press release.

 

The Partnership reported net income of $24.2 million for the three months ended September 30, 2007, compared to net income of $30.0 million for the three months ended September 30, 2006.  Excluding the non-cash items discussed below, net income for the three months ended September 30, 2007, and September 30, 2006, would have been $30.0 million and $21.5 million, respectively, an increase of 40 percent.  For the nine months ended September 30, 2007, the Partnership reported net income of $37.2 million compared to $57.9 million for the nine months ended September 30, 2006. Excluding the non-cash items discussed below, net income for the nine months ended September 30, 2007, and September 30, 2006, would have been $70.4 million and $59.2 million, respectively, an increase of 19 percent.

 

The financial results for the three months ended September 30, 2007 and 2006, include $5.8 million of non-cash costs and $8.5 million of non-cash income, respectively, associated with the mark-to-market of derivative instruments and non-cash compensation expense.  Similarly, the financial results for the nine months ended September 30, 2007 and 2006, include $33.2 million and $1.3 million, respectively, of non-cash costs associated with the mark-to-market of derivative instruments and non-cash compensation expense. 

 

On October 25, 2007, the board of directors of the general partner of MarkWest Energy Partners increased the Partnership’s quarterly cash distribution to $0.55 for the third quarter of 2007, an increase of $0.065 per unit, or 13 percent, over the split-adjusted distribution in the third quarter of 2006, and an increase of $0.02 per unit, or 4 percent, over the distribution in the second quarter of 2007.  The third quarter 2007 distribution is payable on November 14, 2007, to unitholders of record as of November 8, 2007.

 



 

“The third quarter was another outstanding quarter for the Partnership, and we are very excited about our continued strong financial performance and future growth opportunities,” said Frank Semple, President and Chief Executive Officer.  “The 27 percent increase in distributable cash flow is primarily due to customer-related growth projects in our core operating areas.  These high-quality investments, coupled with the additional capital expansions planned for 2008 and beyond, puts us in a solid position to continue to deliver double-digit annualized distribution growth for our unitholders.”

 

“The third quarter was particularly noteworthy because of the announcement of the merger agreement between the Partnership and MarkWest Hydrocarbon.  The transaction, if consummated, will streamline our corporate structure, significantly improve our competitive position, and align the interests of MarkWest with one set of equity holders.  Our people, assets, and focus on customer service have been the key to our success, and the positive attributes of the planned merger will further enhance the long-term value for our unitholders.”

 

THIRD QUARTER 2007 HIGHLIGHTS

On September 5, 2007, the board of directors of the general partner of the Partnership and the board of directors of MarkWest Hydrocarbon announced that the Partnership and MarkWest Hydrocarbon entered into a definitive redemption and merger agreement.  A principal benefit of the transaction is the elimination of the existing IDRs.  Elimination of the IDRs reduces the Partnership’s cost of equity capital and strengthens its competitive position.  In addition, the transaction will simplify the corporate structure of the Partnership and MarkWest Hydrocarbon, simplify corporate governance, and allow management to focus on driving value for one set of public equity owners.  The transaction is expected to be accretive in 2008 to the Partnership unitholders as measured by distributable cash flow per common unit, and is anticipated to close in early 2008.

 

Since the beginning of the third quarter of 2007, the Partnership has announced the following initiatives:

 

·                  Gulf Coast — a $100 million expansion to the Partnership’s Javelina plant, located in Corpus Christi, Texas. The Partnership will begin construction of a steam methane reformer (“SMR”) facility at its Javelina plant in the fourth quarter of 2007, and expects to commence delivering high-purity hydrogen in early 2010.  Once operational, the SMR facility, combined with the existing facilities at the Javelina plant, will produce in excess of 50 million cubic feet per day of high-purity hydrogen.  The expansion is anchored by long-term, fee-based supply agreements.

 

·                  Southeast Oklahoma — the acquisition from Canaan Resources, LLC of a portion of Canaan’s gathering assets located in Pittsburg County in Southeast Oklahoma.  In conjunction with the acquisition agreement, the Partnership will invest up to $30 million to support the development of Canaan’s Woodford Shale and Hartshorne coal bed methane initiatives with an efficient and highly reliable gathering system.  The gathering assets are located adjacent to, and will become fully integrated with, the Partnership’s existing Woodford Shale gathering system, providing Canaan access to the significant delivery options provided by the Woodford system.

 

·                  Western Oklahoma — to accommodate the significant increase in the volume of gas gathered and processed in the Foss Lake system and to support the continued exploration and development of the prolific Anadarko basin in Western Oklahoma, the Partnership will invest $20 million to expand its operations and construct a new processing plant adjacent to the existing Foss Lake processing facilities. The new plant is expected to be operational by mid 2008 and will expand the system

 



 

processing capacity from 95 million cubic feet per day to 155 million cubic feet per day.

 

The increase in DCF in the third quarter of 2007, compared to the same period of 2006, was primarily attributable to the following:

 

·                  A $6.4 million increase in operating income associated with the Javelina segment.  This increase was largely a result of the sale of 0.4 million barrels of pentanes, which increased revenue by approximately $3.0 million.  The pentanes were being held in storage and the associated revenue generated in the third quarter of 2007 will not be recurring.  The remaining increase is due to improved pricing and volumes.

 

·                  A $3.5 million increase in operating income associated with the Oklahoma segment.  This increase was largely a result of our new operations in the Woodford area.

 

·                  A $1.1 million improvement in DCF from our investment in Starfish, including the effects of insurance-related items.  This increase was a result of a $4.4 million increase in distributions received, offset by a $3.3 million reduction in insurance recoveries, which are included in miscellaneous expense, related to Hurricane Rita repairs. 

 

·                  The above items were offset, in part, by a $2.6 million increase in cash-related selling, general and administrative expenses during the third quarter of 2007 compared to the third quarter of 2006.  The increase is primarily attributable to increased professional fees and consulting services.

 

For the full year 2007, the Partnership increased its DCF forecast to approximately $152 million, and increased its expansion capital forecast to approximately $300 million.

 

2008 PRELIMINARY FORECAST

 

For 2008, the Partnership is forecasting DCF in a range of $160 to $180 million, and currently estimates capital expenditures in a range of $280 million to $320 million.  This preliminary estimate includes capital expenditures to fund identified expansion opportunities.  Maintenance capital for 2008 is currently forecasted at approximately $6 million.

CONFERENCE CALL

 

The Partnership will host a conference call and webcast on Wednesday, November 7, 2007, at 4:00 p.m. ET to review its third quarter 2007 financial results.  Interested parties can participate in the call by dialing (888) 928-9510, passcode “MarkWest”, approximately ten minutes prior to the scheduled start time.  A replay of the call will be available through Wednesday, November 21, 2007, by dialing (800) 739-2817, no passcode required.  To access the webcast, please visit the Investor Relations section of our website at www.markwest.com.

 

###

 

MarkWest Energy Partners, L.P. (NYSE:MWE) is a publicly traded master limited partnership with a solid core of midstream assets and a growing core of gas transmission assets. It is one of the largest processors of natural gas in the Northeast and is the largest gas gatherer of natural gas in the prolific Carthage field in east Texas. It also has a growing number of other gas gathering and intrastate gas transmission assets in the Southwest, primarily in Texas and Oklahoma.

 

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  All statements other than statements of historical facts included or incorporated herein may constitute forward-

 



 

looking statements.  Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties.  Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct.  The forward-looking statements involve risks and uncertainties that affect our operations, financial performance and other factors as discussed in our filings with the Securities and Exchange Commission.  Among the factors that could cause results to differ materially are those risks discussed in our Form 10-K/A for the year ended December 31, 2006, as filed with the SEC.  You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.”  We do not undertake any duty to update any forward-looking statement.

 

Although we believe that the expectations reflected in the forward-looking statements, specifically those including those referring to future performance, growth, cash flow, operating income, distributable cash flow (DCF), distributions, or other factors, are reasonable, these forward-looking statements are not guarantees of future performance and we can give no assurance that such expectations will prove to be correct and that projected performance or distributions may not be achieved.  Among the factors that could cause results to differ materially are those risks discussed in our Form S-1, as amended, our Annual Report on Form 10-K/A for the year ended December 31, 2006, and our Quarterly Reports on Form 10-Q, as amended, each as filed with the SEC.  You are also urged to carefully review and consider the cautionary statements and other disclosures, including those under the heading “Risk Factors,” made in those filings, which identify and discuss significant risks, uncertainties and various other factors that could cause actual results to vary significantly from those expressed or implied in the forward-looking statements.  We do not undertake any duty to update any forward-looking statement.

 

MarkWest Energy Partners and MarkWest Hydrocarbon will file a joint proxy statement/prospectus and other documents with the Securities and Exchange Commission (the "SEC") in relation to the merger transaction announced on September 5, 2007.  Investors and security holders are urged to read these documents carefully when they become available because they will contain important information regarding MarkWest Energy Partners, MarkWest Hydrocarbon, and the transaction. A definitive joint proxy statement/prospectus will be sent to security holders of MarkWest Energy Partners and MarkWest Hydrocarbon seeking their approval of the transactions contemplated by the redemption and merger agreement. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus (when it is available) and other documents containing information about MarkWest Energy Partners and MarkWest Hydrocarbon, without charge, at the SEC’s website at www.sec.gov. Copies of the joint proxy statement/prospectus and the SEC filings that will be incorporated by reference in the joint proxy statement/prospectus may also be obtained free of charge by directing a request to the entities' investor relations department at 866-858-0482, or by accessing their website at www.markwest.com.

 

MarkWest Energy Partners, MarkWest Hydrocarbon, the officers and directors of the general partner of MarkWest Energy Partners, and the officers and directors of MarkWest Hydrocarbon may be deemed to be participants in the solicitation of proxies from their security holders. Information about these persons can be found in the Annual Report on Form 10-K/A for the year ended December 31, 2006, for each of MarkWest Energy Partners and MarkWest Hydrocarbon, as filed with the SEC, and additional information about such persons may be obtained from the joint proxy statement/prospectus when it becomes available.

 

This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended.

 



 

MarkWest Energy Partners, L.P.

Financial Statistics

(Unaudited, in thousands, except per unit data)

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

 

2007

 

2006

 

2007

 

2006

 

 

 

 

 

(as restated)

 

 

 

(as restated)

 

Statement of Operations Data

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

Segment revenue

 

$

174,918

 

$

163,888

 

$

478,608

 

$

486,301

 

Derivative (loss) gain

 

(7,855

)

12,670

 

(22,147

)

6,009

 

Total revenue

 

167,063

 

176,558

 

456,461

 

492,310

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Purchased product costs

 

89,474

 

95,533

 

265,810

 

296,368

 

Facility expenses

 

19,346

 

15,689

 

52,605

 

44,918

 

Selling, general and administrative expenses

 

9,565

 

13,078

 

35,882

 

30,404

 

Depreciation

 

10,893

 

7,905

 

27,806

 

22,462

 

Amortization of intangible assets

 

4,168

 

4,029

 

12,504

 

12,072

 

Accretion of asset retirement obligations

 

30

 

24

 

85

 

75

 

Impairments

 

356

 

 

356

 

 

Total operating expenses

 

133,832

 

136,258

 

395,048

 

406,299

 

Income from operations

 

33,231

 

40,300

 

61,413

 

86,011

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Earnings from unconsolidated affiliates

 

1,264

 

1,067

 

4,687

 

3,240

 

Interest income

 

150

 

230

 

2,549

 

709

 

Interest expense

 

(10,072

)

(9,523

)

(28,418

)

(31,213

)

Amortization of deferred financing costs (a component of interest expense)

 

(702

)

(6,066

)

(2,024

)

(7,700

)

Miscellaneous income (expense)

 

594

 

3,970

 

(586

)

7,577

 

Income before provision for income tax

 

24,465

 

29,978

 

37,621

 

58,624

 

Provision for income tax

 

(304

)

 

(429

)

(679

)

Net income

 

$

24,161

 

$

29,978

 

$

37,192

 

$

57,945

 

 

 

 

 

 

 

 

 

 

 

Interest in net income

 

 

 

 

 

 

 

 

 

General partner

 

$

6,979

 

$

(1,250

)

$

9,021

 

$

293

 

Limited partners

 

$

17,182

 

$

31,228

 

$

28,171

 

$

57,652

 

 

 

 

 

 

 

 

 

 

 

Net income per limited partner unit:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.47

 

$

0.82

 

$

0.80

 

$

1.97

 

Diluted

 

$

0.47

 

$

0.82

 

$

0.80

 

$

1.97

 

 

 

 

 

 

 

 

 

 

 

Weighted average units outstanding (1):

 

 

 

 

 

 

 

 

 

Basic

 

36,500

 

31,890

 

35,011

 

27,820

 

Diluted

 

36,621

 

32,006

 

35,170

 

27,950

 

 

 

 

 

 

 

 

 

 

 

Cash Flow Data

 

 

 

 

 

 

 

 

 

Net cash flow provided by (used in):

 

 

 

 

 

 

 

 

 

Operating activities

 

$

74,672

 

$

41,628

 

$

118,232

 

$

120,508

 

Investing activities

 

$

(87,626

)

$

(19,695

)

$

(226,568

)

$

(66,554

)

Financing activities

 

$

34,231

 

$

(12,427

)

$

127,617

 

$

(43,460

)

 

 

 

 

 

 

 

 

 

 

Other Financial Data

 

 

 

 

 

 

 

 

 

Distributable cash flow

 

$

46,922

 

$

36,836

 

$

114,902

 

$

90,159

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2007

 

December 31, 2006

 

 

 

 

 

Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

Working capital

 

$

3,877

 

$

4,258

 

 

 

 

 

Total assets

 

$

1,342,866

 

$

1,114,780

 

 

 

 

 

Total debt

 

$

589,612

 

$

526,865

 

 

 

 

 

Partners’ capital

 

$

564,420

 

$

452,649

 

 

 

 

 

Total debt to book capitalization

 

51

%

54

%

 

 

 

 

 


(1) Three and nine months ended September 30, 2006, have been adjusted for the 2-for-1 stock split effective on February 28, 2007.

 



 

MarkWest Energy Partners, L.P.

Operating Statistics

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

 

2007

 

2006

 

2007

 

2006

 

Southwest:

 

 

 

 

 

 

 

 

 

East Texas:

 

 

 

 

 

 

 

 

 

Gathering systems throughput (Mcf/d)

 

421,000

 

393,000

 

410,000

 

371,000

 

NGL product sales (gallons)

 

46,262,000

 

42,015,000

 

132,536,000

 

117,912,000

 

 

 

 

 

 

 

 

 

 

 

Oklahoma:

 

 

 

 

 

 

 

 

 

Foss Lake gathering system throughput (Mcf/d)

 

108,000

 

86,000

 

102,000

 

86,000

 

Woodford gathering system throughput (Mcf/d) (1)

 

130,000

 

N/A

 

95,000

 

N/A

 

Grimes gathering system throughput (Mcf/d) (2)

 

11,000

 

N/A

 

12,000

 

N/A

 

Arapaho NGL product sales (gallons)

 

22,409,000

 

19,553,000

 

65,166,000

 

57,586,000

 

 

 

 

 

 

 

 

 

 

 

Other Southwest:

 

 

 

 

 

 

 

 

 

Appleby gathering system throughput (Mcf/d)

 

58,000

 

34,000

 

55,000

 

34,000

 

Other gathering systems throughput (Mcf/d)

 

6,000

 

18,000

 

11,000

 

20,000

 

Lateral throughput volumes (Mcf/d)

 

101,000

 

111,000

 

73,000

 

84,000

 

 

 

 

 

 

 

 

 

 

 

Northeast:

 

 

 

 

 

 

 

 

 

Appalachia:

 

 

 

 

 

 

 

 

 

Natural gas processed (Mcf/d)

 

194,000

 

198,000

 

197,000

 

200,000

 

NGLs fractionated (Gal/d)

 

423,000

 

453,000

 

444,000

 

451,000

 

NGL product sales (gallons)

 

11,172,000

 

11,275,000

 

33,219,000

 

32,226,000

 

 

 

 

 

 

 

 

 

 

 

Michigan:

 

 

 

 

 

 

 

 

 

Natural gas throughput (Mcf/d)

 

4,900

 

7,300

 

5,700

 

6,500

 

NGL product sales (gallons)

 

963,000

 

1,501,000

 

3,153,000

 

4,344,000

 

Crude oil transported (Bbl/d)

 

13,800

 

14,600

 

14,100

 

14,600

 

 

 

 

 

 

 

 

 

 

 

Gulf Coast:

 

 

 

 

 

 

 

 

 

Refinery off-gas processed (Mcf/d)

 

124,500

 

125,000

 

119,000

 

125,000

 

Liquids fractionated (Bbl/d)

 

30,700

 

26,100

 

26,600

 

26,000

 

 


(1) The Partnership began construction and operation of the Woodford gathering system in late 2006.

(2) The Partnership acquired the Grimes gathering system in December 2006.

 



 

MarkWest Energy Partners, L.P.

Segment Operating Income and Reconciliation to Net Income

(Unaudited, in thousands)

 

 

 

East Texas

 

Oklahoma

 

Other Southwest

 

Appalachia

 

Michigan

 

Javelina

 

Total

 

Three months ended September 30, 2007:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

53,489

 

$

55,603

 

$

16,150

 

$

21,209

 

$

3,188

 

$

25,279

 

$

174,918

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased product costs

 

29,753

 

34,680

 

10,241

 

13,889

 

911

 

 

89,474

 

Facility expenses

 

3,583

 

5,304

 

1,910

 

3,926

 

1,614

 

3,254

 

19,591

 

Depreciation, amortization, accretion and impairments

 

4,469

 

3,633

 

1,518

 

867

 

1,169

 

3,602

 

15,258

 

Total segment operating expenses

 

37,805

 

43,617

 

13,669

 

18,682

 

3,694

 

6,856

 

124,323

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss)

 

$

15,684

 

$

11,986

 

$

2,481

 

$

2,527

 

$

(506

)

$

18,423

 

$

50,595

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East Texas (1)

 

Oklahoma

 

Other Southwest

 

Appalachia

 

Michigan

 

Javelina

 

Total (1)

 

Three months ended September 30, 2006:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

45,937

 

$

53,083

 

$

22,057

 

$

20,148

 

$

3,523

 

$

19,140

 

$

163,888

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased product costs

 

23,180

 

41,898

 

17,842

 

11,924

 

689

 

 

95,533

 

Facility expenses

 

3,797

 

1,890

 

1,235

 

3,563

 

1,626

 

3,578

 

15,689

 

Depreciation, amortization, accretion and impairments

 

4,078

 

766

 

1,109

 

917

 

1,496

 

3,588

 

11,954

 

Total segment operating expenses

 

31,055

 

44,554

 

20,186

 

16,404

 

3,811

 

7,166

 

123,176

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss)

 

$

14,882

 

$

8,529

 

$

1,871

 

$

3,744

 

$

(288

)

$

11,974

 

$

40,712

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East Texas

 

Oklahoma

 

Other Southwest

 

Appalachia

 

Michigan

 

Javelina

 

Total

 

Nine months ended September 30, 2007:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

138,795

 

$

163,632

 

$

49,172

 

$

60,491

 

$

8,892

 

$

57,626

 

$

478,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased product costs

 

76,220

 

116,460

 

32,456

 

38,593

 

2,081

 

 

265,810

 

Facility expenses

 

12,296

 

13,876

 

5,115

 

10,970

 

4,661

 

5,336

 

52,254

 

Depreciation, amortization, accretion and impairments

 

12,884

 

7,079

 

3,620

 

2,659

 

3,502

 

10,792

 

40,536

 

Total segment operating expenses

 

101,400

 

137,415

 

41,191

 

52,222

 

10,244

 

16,128

 

358,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss)

 

$

37,395

 

$

26,217

 

$

7,981

 

$

8,269

 

$

(1,352

)

$

41,498

 

$

120,008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East Texas (1)

 

Oklahoma

 

Other Southwest

 

Appalachia

 

Michigan

 

Javelina

 

Total (1)

 

Nine months ended September 30, 2006:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

133,646

 

$

163,277

 

$

69,787

 

$

56,591

 

$

10,008

 

$

52,992

 

$

486,301

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased product costs

 

70,134

 

134,245

 

57,080

 

32,381

 

2,528

 

 

296,368

 

Facility expenses

 

11,749

 

5,435

 

4,187

 

10,378

 

4,479

 

8,690

 

44,918

 

Depreciation, amortization, accretion and impairments

 

11,965

 

2,230

 

3,178

 

2,661

 

3,850

 

10,721

 

34,605

 

Total segment operating expenses

 

93,848

 

141,910

 

64,445

 

45,420

 

10,857

 

19,411

 

375,891

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss)

 

$

39,798

 

$

21,367

 

$

5,342

 

$

11,171

 

$

(849

)

$

33,581

 

$

110,410

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

 

 

 

 

 

 

 

2007

 

2006

 

2007

 

2006

 

 

 

 

 

 

 

Operating income before items not allocated to segments

 

$

50,595

 

$

40,712

 

$

120,008

 

$

110,410

 

 

 

 

 

 

 

Derivative (loss) gain not allocated to segments

 

(7,610

)

12,670

 

(22,498

)

6,009

 

 

 

 

 

 

 

Depreciation expense not allocated to segments

 

(189

)

(4

)

(215

)

(4

)

 

 

 

 

 

 

Selling, general and administrative expenses not allocated to segments

 

(9,565

)

(13,078

)

(35,882

)

(30,404

)

 

 

 

 

 

 

Income from operations

 

33,231

 

40,300

 

61,413

 

86,011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from unconsolidated affiliates

 

1,264

 

1,067

 

4,687

 

3,240

 

 

 

 

 

 

 

Interest income

 

150

 

230

 

2,549

 

709

 

 

 

 

 

 

 

Interest expense

 

(10,072

)

(9,523

)

(28,418

)

(31,213

)

 

 

 

 

 

 

Amortization of deferred financing costs

 

(702

)

(6,066

)

(2,024

)

(7,700

)

 

 

 

 

 

 

Miscellaneous income (expense)

 

594

 

3,970

 

(586

)

7,577

 

 

 

 

 

 

 

Income before provision for income tax

 

24,465

 

29,978

 

37,621

 

58,624

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income tax

 

(304

)

 

(429

)

(679

)

 

 

 

 

 

 

Net income

 

$

24,161

 

$

29,978

 

$

37,192

 

$

57,945

 

 

 

 

 

 

 

 


(1) As restated

 



 

MarkWest Energy Partners, L.P.

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(Unaudited, in thousands)

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

 

2007

 

2006

 

2007

 

2006

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income tax

 

$

24,465

 

$

29,978

 

$

37,621

 

$

58,624

 

 

 

 

 

 

 

 

 

 

 

Depreciation, amortization, accretion and impairments

 

15,447

 

11,958

 

40,751

 

34,609

 

Amortization of deferred financing costs

 

702

 

6,066

 

2,024

 

7,700

 

Non-cash earnings from unconsolidated affiliates

 

(1,264

)

(1,067

)

(4,687

)

(3,240

)

Distributions from (contributions to) unconsolidated affiliates, net of expansion capital

 

3,156

 

(1,214

)

9,345

 

(6,552

)

Non-cash compensation expense

 

(253

)

5,839

 

9,391

 

8,985

 

Non-cash derivative activity

 

6,055

 

(14,388

)

23,777

 

(7,665

)

Provision for income tax

 

(159

)

 

(284

)

(679

)

Other

 

17

 

26

 

60

 

26

 

Loss (gain) on sale of property, plant and equipment

 

193

 

98

 

203

 

(198

)

Maintenance capital expenditures

 

(1,437

)

(460

)

(3,299

)

(1,451

)

Distributable cash flow

 

$

46,922

 

$

36,836

 

$

114,902

 

$

90,159

 

 

 

 

 

 

 

 

 

 

 

Maintenance capital expenditures

 

$

1,437

 

$

460

 

$

3,299

 

$

1,451

 

Expansion capital expenditures

 

86,126

 

17,725

 

223,256

 

41,514

 

Total capital expenditures

 

$

87,563

 

$

18,185

 

$

226,555

 

$

42,965

 

 

 

 

 

 

 

 

 

 

 

Distributable cash flow

 

$

46,922

 

$

36,836

 

$

114,902

 

$

90,159

 

Contributions to unconsolidated affiliates

 

 

1,214

 

 

6,552

 

Maintenance capital expenditures

 

1,437

 

460

 

3,299

 

1,451

 

Decrease (increase) in receivables

 

7,080

 

(10,875

)

(21,333

)

22,684

 

(Increase) decrease in receivables from affiliates

 

(1,013

)

153

 

(340

)

4,019

 

(Increase) decrease in inventories

 

(162

)

8,094

 

96

 

(439

)

(Increase) decrease in other current assets

 

(1,624

)

4,924

 

(5,151

)

1,685

 

Increase (decrease) in accounts payable, accrued liabilities and other liabilities

 

20,312

 

4,981

 

24,335

 

(4,802

)

Increase (decrease) in payables to affiliates

 

1,727

 

(4,159

)

2,676

 

(1,480

)

Other

 

(7

)

 

(252

)

679

 

Net cash provided by operating activities

 

$

74,672

 

$

41,628

 

$

118,232

 

$

120,508