Tallgrass Energy Partners, LP (NYSE: TEP) ("TEP") and Tallgrass
Energy GP, LP (NYSE: TEGP) ("TEGP") today reported financial and
operating results for the second quarter of 2015. TEP and TEGP are
collectively referred to as Tallgrass Energy.
"We are reporting another record quarter at TEP and announcing
TEGP's results for its first quarter as a public company," said
David G. Dehaemers, Jr., President and CEO of Tallgrass Energy.
"Our second quarter distribution increased 11.5 percent compared to
the first quarter of 2015, thanks to solid performance at each of
our business segments and our ownership of a 66.7 percent
membership interest in Pony Express. As a result, TEP has already
met our 20 percent distribution growth guidance for the full year
2015 with half of the year still remaining. Since our beginning in
2012, the Tallgrass Energy team has successfully executed our plan
and delivered exceptional results, even in the challenging
environment recently facing the energy commodity markets."
Second Quarter
Distributions
Tallgrass Energy Partners, LP
As previously announced, the board of directors of TEP's general
partner declared a quarterly cash distribution to partners of $0.58
per common unit for the second quarter of 2015. This quarterly
distribution represents $2.32 on an annualized basis. The quarterly
distribution will be paid on Friday, August 14, 2015, to
unitholders of record as of the close of business on Friday, July
31, 2015.
Tallgrass Energy GP, LP
As previously announced, the board of directors of TEGP's
general partner declared a quarterly cash distribution to Class A
shareholders of $0.073 per Class A share, which is prorated for the
number of days between the closing of TEGP’s initial public
offering on May 12, 2015 and the end of the second quarter. The
distribution corresponds to a pro forma full-quarter, non-prorated
distribution of $0.133 per Class A share or $0.532 on an annualized
basis. The quarterly distribution will be paid on Monday, August
17, 2015, to Class A shareholders of record as of the close of
business on Friday, July 31, 2015.
Tallgrass Energy Partners,
LP
The financial results for all periods presented in the table
below include the applicable results of operations of our 33.3
percent membership interest in Tallgrass Pony Express Pipeline, LLC
(“Pony Express”), which was acquired by TEP effective September 1,
2014, except for the period under the column "As Reported in 2014."
The acquisition of an additional 33.3 percent membership interest
in Pony Express effective March 1, 2015, is presented prospectively
from the date of acquisition, and as a result, financial
information for periods prior to March 1, 2015, have not been
recast to reflect the additional 33.3 percent membership interest.
The financial results for all periods presented in the table below,
including the period "As Reported in 2014," include the results of
Trailblazer Pipeline Company LLC, which was acquired by TEP
effective April 1, 2014.
Summary Financial Information
Three Months Ended June 30, Six Months
Ended June 30, (in thousands, except coverage and per unit data)
2015 2014
AsReportedin 2014
2015 2014
AsReportedin 2014
Net income attributable to partners $ 44,899 $ 15,286 $
16,867 $ 77,218 $ 32,410 $ 35,499 Add: Interest expense, net of
noncontrolling interest 3,893 2,139 2,140 7,333 3,433 3,433
Depreciation and amortization expense, net of noncontrolling
interest 18,302 8,874 8,622 38,835 16,678 16,174 Non-cash loss from
asset sales — — — 4,483 — — Non-cash loss (gain) related to
derivative instruments 131 (96 ) (96 ) 41 255 255 Non-cash
compensation expense 1,727 1,308 1,308 3,254 2,249 2,249
Distributions from unconsolidated investment — 772 772 — 1,280
1,280 Less: Gain on remeasurement of unconsolidated investment —
(9,388 ) (9,388 ) — (9,388 ) (9,388 ) Non-cash loss allocated to
noncontrolling interest — — — (9,377 ) — — Equity in earnings of
unconsolidated investment — (273 ) (273 ) — (717 )
(717 )
Adjusted EBITDA $ 68,952 $ 18,622 $
19,952 $ 121,787 $ 46,200 $ 48,785
Less: Maintenance capital expenditures (3,067 ) (2,531 ) (4,578 )
(3,472 ) Cash interest expense (3,482 ) (1,909 ) (6,513 ) (3,082 )
Pony Express deficiency payments received, net 3,416 — 3,708 —
Distributions to noncontrolling interest in excess of earnings
(8,894 ) — (10,997 ) — Cash flow attributable to predecessor
operations — — — (6,637 )
Distributable cash flow (DCF)
56,925 15,512 103,407 35,594 Less: Distributions (46,180 ) (19,684
) (84,966 ) (33,372 ) Amounts in excess of distributions $ 10,745
$ (4,172 ) $ 18,441 $ 2,222 Distribution
coverage 1.23 x 0.79 x 1.22 x 1.07 x Common and subordinated
units outstanding 60,576 48,935 60,576 48,935 Distribution per
common unit $ 0.5800 $ 0.3800 $ 1.1000 $ 0.7050
The "As Reported in 2014" columns for the three and six months
ended June 30, 2014, include the impact of the distributions paid
on the 8.05 million units issued on July 25, 2014. Excluding the
impact of the distributions paid on the 8.05 million units,
coverage would have been 0.94x and 1.18x for the three and six
months ended June 30, 2014.
Segment Overview
The second quarter 2015 results by segment are summarized
below:
Three Months Ended June 30, Six Months
Ended June 30, 2015 2014 2015
2014 (in thousands)
Natural Gas Transportation &
Logistics Operating income $ 9,937 $ 8,318 $ 22,490 $ 21,284
Add: Depreciation and amortization expense 5,754 6,115 11,825
11,720 Non-cash loss (gain) related to derivative instruments 131
(96 ) 41 255 Other income, net 769 729 1,481
1,669
Segment Adjusted EBITDA $ 16,591
$ 15,066 $ 35,837
$ 34,928 Three Months Ended June 30,
Six Months Ended June 30, 2015 2014 2015 2014
Crude Oil
Transportation & Logistics (in thousands) Operating income
(loss) $ 45,515 $ (757 ) $ 59,788 $ (1,514 ) Add:
Depreciation and amortization expense, net
ofnoncontrolling interest
9,196 252 20,429 504 Adjusted EBITDA attributable to noncontrolling
interests (8,391 ) 505 (8,391 ) 1,010
Segment
Adjusted EBITDA $ 46,320 $ —
$ 71,826 $ —
Three Months Ended June 30, Six Months Ended June 30, 2015
2014 2015 2014
Processing & Logistics (in thousands)
Operating income $ 3,666 $ 2,177 $ 4,720 $ 9,318 Add:
Depreciation and amortization expense, net
ofnoncontrolling interest
3,352 2,507 6,581 4,454 Non-cash loss from asset sales — — 4,483
Distributions from unconsolidated investment — 772 — 1,280 Adjusted
EBITDA attributable to noncontrolling interests 59 55
11 55
Segment Adjusted EBITDA $
7,077 $ 5,511 $
15,795 $ 15,107
The segment reporting in the table above does not include
corporate general and administrative costs or intersegment
eliminations. The Crude Oil Transportation & Logistics segment
includes figures for 2014 although Pony Express Pipeline was not
owned by TEP and did not generate revenue during the three or six
month periods ending June 30, 2014.
Adjusted EBITDA in the Natural Gas Transportation &
Logistics segment for the second quarter of 2015 was $16.6
million, representing an increase of $1.5 million as compared to
the second quarter of 2014 primarily due to lower operating costs
and expenses. Average firm contracted transportation capacity of
1,520 MMcf/d for the second quarter of 2015 was slightly higher
than the 1,494 MMcf/d for the second quarter of 2014. When
comparing the Natural Gas Transportation & Logistics segment's
Adjusted EBITDA for the second quarter of 2015 to its $19.2 million
of Adjusted EBITDA for the first quarter of 2015, the decrease of
$2.6 million is primarily attributable to lower transportation
revenues and higher operating costs.
The Crude Oil Transportation & Logistics segment
Adjusted EBITDA was $46.3 million for the second quarter of 2015,
representing the operating results of the Pony Express mainline and
the lateral in Northeast Colorado, which were placed into
commercial service in October 2014 and April 2015, respectively.
There were no operating results for the second quarter of 2014 as
Pony Express had not yet commenced commercial operations. The
Adjusted EBITDA for the second quarter of 2015 represents an
increase of $20.8 million over the first quarter of 2015 which was
primarily the result of the acquisition of an additional 33.3
percent membership interest in Pony Express on March 1, 2015, the
full operation of one of the upstream pipelines that delivers
volumes to Pony Express and a decrease in property tax expense
estimates during the second quarter of 2015. TEP received
distributable cash flow from Pony Express of $40.3 million for its
66.7 percent membership interest for the second quarter of 2015
which is greater than the minimum quarterly preference payment of
$36.7 million.
The Processing & Logistics segment generated Adjusted
EBITDA of $7.1 million for the second quarter of 2015, representing
an increase of $1.6 million as compared to the second quarter of
2014. The increase was primarily due to increased revenues at the
water services business during the second quarter of 2015.
Approximate average inlet volumes at the processing facilities were
130 MMcf/day for the second quarter of 2015 as compared to 136
MMcf/day for the second quarter of 2014. When comparing the
Processing & Logistics segment's $7.1 million of Adjusted
EBITDA for the second quarter of 2015 to its Adjusted EBITDA of
$8.7 million for the first quarter of 2015, the decrease is
primarily attributable to lower average inlet volumes at the
processing facilities.
Tallgrass Energy GP, LP
TEGP's sole cash-generating asset is an approximate 30.35
percent controlling interest in Tallgrass Equity, LLC
("Tallgrass Equity"). Tallgrass Equity's sole cash-generating
assets consist of direct and indirect partnership interests in
Tallgrass Energy Partners, LP ("TEP"), described below:
- 100 percent of the outstanding
membership interests in Tallgrass MLP GP, LLC ("TEP GP"), which
owns the general partner interest in TEP as well as all of the TEP
incentive distribution rights ("IDRs"). The general partner
interest in TEP is represented by 834,391 general partner units,
representing a 1.36 percent general partner interest in TEP at
June 30, 2015.
- 20,000,000 common units of TEP,
representing an approximately 32.57 percent limited partner
interest in TEP at June 30, 2015.
Information on distributions to Tallgrass Equity, TEGP and
TEGP's Class A shareholders is shown below (in thousands, except
coverage and per share data):
Three Months Ended June 30, 2015 TEP
distributions to Tallgrass Equity General partner interest $ 627
IDRs 10,418 TEP common units owned by Tallgrass Equity 11,600
Total TEP distributions to Tallgrass Equity $ 22,645 Less:
Cash interest expense attributable to Tallgrass Equity (545 )
General and administrative expenses attributable to Tallgrass
Equity (250 ) Cash available for distribution by Tallgrass Equity $
21,850 Distributions to predecessor owners of pre-IPO
available cash (1) 10,202 Distributions to TEGP of post-IPO
available cash 3,484 Distributions to noncontrolling interests of
post-IPO available cash 7,994 Total cash distributions by
Tallgrass Equity 21,680 TEGP Distributions received from
Tallgrass Equity 3,484 Cash available for distribution to
Class A shareholders $ 3,484 Less: Distributions to Class A
shareholders (3,484 ) Amounts in excess of distributions $ —
Distribution coverage 1.00 Class A shares outstanding 47,725
Distribution per Class A share $ 0.0730 (1) Distributions
received by Tallgrass Equity from TEP and TEP GP related to periods
prior to the closing of TEGP’s initial public offering on May 12,
2015 will be paid to Tallgrass Development and the predecessor
owners of Tallgrass Equity.
Conference Call
Please join Tallgrass Energy for a conference call and webcast
to discuss second quarter 2015 results at 4 p.m. Central Time on
Thursday, July 30, 2015. 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.
About Tallgrass Energy Partners,
LP
Tallgrass Energy Partners, LP (NYSE: TEP) is a publicly traded,
growth-oriented Delaware limited partnership formed to own,
operate, acquire and develop midstream energy assets in North
America. We currently provide natural gas transportation and
storage services for customers in the Rocky Mountain and Midwest
regions of the United States through the Tallgrass Interstate Gas
Transmission system, a FERC-regulated natural gas transportation
and storage system located in Colorado, Kansas, Missouri, Nebraska
and Wyoming, and a FERC-regulated natural gas pipeline system
extending from the Colorado and Wyoming border to Beatrice,
Nebraska. We provide crude oil transportation to customers in
Wyoming, Colorado and the surrounding regions through our
membership interest in Pony Express, which owns a crude oil
pipeline commencing in Guernsey, Wyoming and terminating in
Cushing, Oklahoma. We also provide services for customers in
Wyoming at the Casper and Douglas natural gas processing facilities
and the West Frenchie Draw natural gas treating facility, or,
collectively, the Midstream Facilities, and we provide water
business services to customers in Colorado and Texas through BNN
Water Solutions, LLC. Our operations are strategically located in
and provide services to certain key United States hydrocarbon
basins, including the Denver-Julesburg, Powder River, Wind River,
Permian and Hugoton-Anadarko Basins and the Niobrara, Mississippi
Lime, Eagle Ford and Bakken shale formations.
About Tallgrass Energy GP,
LP
Tallgrass Energy GP, LP (NYSE: TEGP) is a Delaware limited
partnership that has elected to be treated as a corporation for
U.S. federal income tax purposes. TEGP owns a controlling
membership interest in Tallgrass Equity, LLC through its role as
the sole managing member. Tallgrass Equity, LLC owns, both directly
and through its ownership of the general partner of TEP, all of
TEP's incentive distribution rights, 100 percent of the general
partner interest in TEP and 20,000,000 TEP Common Units.
To learn more, please visit our website at
www.tallgrassenergy.com.
TEP's 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, 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, cash from
operations 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 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 define
distributable cash flow as Adjusted EBITDA, plus preferred
distributions received from Pony Express in excess of its
distributable cash flow attributable to our net interest and
adjusted for deficiency payments received from or utilized by Pony
Express shippers, less cash interest expense, maintenance capital
expenditures, and distributions to noncontrolling interests in
excess of earnings allocated to noncontrolling interests. For a
reconciliation of these non-GAAP measures to their most directly
comparable GAAP financial measures, please see "Summary Financial
Information" above.
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 distribution growth guidance for the full year
2015 and the ability of the Tallgrass team to continue to
successfully execute its plan in a challenging environment for the
energy commodity markets. 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.
Tallgrass Energy
Partners, LP Financial Statements
TALLGRASS ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED BALANCE
SHEETS
June 30, 2015 December 31, 2014 (in thousands) ASSETS
Current Assets: Cash and cash equivalents $ 1,778 $ 867 Accounts
receivable, net 51,521 39,768 Receivable from related party —
73,393 Gas imbalances 1,017 2,442 Inventories 15,162 13,045
Prepayments and other current assets 3,768 2,766
Total Current Assets 73,246 132,281 Property, plant and equipment,
net 1,943,016 1,853,081 Goodwill 343,288 343,288 Intangible asset,
net 100,506 104,538 Deferred financing costs, net 4,735 5,528
Deferred charges and other assets 16,651 18,481 Total
Assets $ 2,481,442 $ 2,457,197 LIABILITIES AND
PARTNERS’ EQUITY Current Liabilities: Accounts payable $ 28,583 $
62,329 Accounts payable to related parties 3,772 3,915 Gas
imbalances 2,812 3,611 Derivative liabilities at fair value 41 —
Accrued taxes 12,206 3,989 Accrued liabilities 6,710 9,384 Deferred
revenue 9,882 5,468 Other current liabilities 4,247 7,872
Total Current Liabilities 68,253 96,568 Long-term debt
706,000 559,000 Other long-term liabilities and deferred credits
6,342 6,478 Total Long-term Liabilities 712,342
565,478 Commitments and Contingencies Equity:
Common unitholders (60,576,357 and
32,834,105 units issued and outstanding at June 30, 2015and
December 31, 2014, respectively)
1,629,223 800,333
Subordinated unitholder (0 and 16,200,000
units issued and outstanding at June 30, 2015 andDecember 31, 2014,
respectively)
— 274,133 General partner (834,391 units issued and outstanding at
June 30, 2015 and December 31, 2014) (353,579 ) (35,743 ) Total
Partners’ Equity 1,275,644 1,038,723 Noncontrolling interests $
425,203 $ 756,428 Total Equity $ 1,700,847 $
1,795,151 Total Liabilities and Equity $ 2,481,442 $
2,457,197
TALLGRASS ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
Three Months Ended June 30, Six Months Ended June 30, 2015
2014 2015 2014 (in thousands, except
per unit amounts) Revenues: Sales of natural gas, NGLs, and crude
oil $ 20,011 $ 39,042 $ 41,880 $ 92,757 Natural gas transportation
services 29,041 30,569 61,189 64,673 Crude oil transportation
services 74,022 — 124,403 — Processing and other revenues 9,896
7,709 20,173 14,669 Total Revenues
132,970 77,320 247,645 172,099
Operating Costs and Expenses: Cost of sales (exclusive of
depreciation and amortization shown below) 17,180 37,214 36,773
85,420
Cost of transportation services (exclusive
of depreciation andamortization shown below)
13,492 5,288 24,207 10,405 Operations and maintenance 12,408 10,055
21,983 18,068 Depreciation and amortization 20,355 9,525 40,960
17,834 General and administrative 13,451 7,124 26,140 13,773 Taxes,
other than income taxes (271 ) 1,639 11,026 3,595 Loss on sale of
assets — — 4,483 — Total Operating
Costs and Expenses 76,615 70,845 165,572
149,095 Operating Income 56,355 6,475 82,073
23,004 Other (Expense) Income: Interest expense, net
(3,893 ) (2,137 ) (7,333 ) (3,433 ) Gain on remeasurement of
unconsolidated investment — 9,388 — 9,388 Equity in earnings of
unconsolidated investment — 273 — 717 Other income, net 769
729 1,481 1,669 Total Other (Expense) Income
(3,124 ) 8,253 (5,852 ) 8,341 Net income 53,231
14,728 76,221 31,345 Net (income) loss attributable to
noncontrolling interests (8,332 ) 558 997 1,065
Net income attributable to partners $ 44,899 $ 15,286
$ 77,218 $ 32,410 Allocation of income to the
limited partners: Net income attributable to partners $ 44,899 $
15,286 $ 77,218 $ 32,410 Predecessor operations interest in net
loss (income) — 1,581 — (2,643 ) General partner interest in net
income (11,030 ) (1,096 ) (18,468 ) (1,477 ) Common and
subordinated unitholders' interest in net income 33,869
15,771 58,750 28,290 Basic net income per
common and subordinated unit $ 0.56 $ 0.39 $ 1.04
$ 0.70 Diluted net income per common and subordinated
unit $ 0.55 $ 0.38 $ 1.02 $ 0.68 Basic
average number of common and subordinated units outstanding 60,362
40,885 56,566 40,694 Diluted average number of common and
subordinated units outstanding 61,225 41,905 57,404 41,624
TALLGRASS ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
Six Months Ended June 30, 2015 2014 (in thousands)
Cash Flows from Operating Activities: Net income $ 76,221 $ 31,345
Adjustments to reconcile net income to net cash flows from
operating activities: Depreciation and amortization 42,867 18,470
Gain on remeasurement of unconsolidated investment — (9,388 )
Noncash compensation expense 3,254 2,249 Loss on sale of assets
4,483 — Changes in components of working capital: Accounts
receivable and other (10,215 ) 4,142 Gas imbalances 189 831
Inventories (6,068 ) (867 ) Accounts payable and accrued
liabilities 2,183 (17,077 ) Deferred revenue 4,198 1,673 Other
operating, net (4,894 ) (253 ) Net Cash Provided by Operating
Activities 112,218 31,125 Cash Flows from Investing
Activities: Capital expenditures (49,544 ) (479,309 ) Acquisition
of additional 33.3% membership interest in Pony Express (700,000 )
— Acquisition of Trailblazer — (150,000 ) Acquisition of additional
equity interests in Water Solutions — (7,600 ) Other investing, net
(4,648 ) (1,638 ) Net Cash Used in Investing Activities (754,192 )
(638,547 ) Cash Flows from Financing Activities: Proceeds from
public offering, net of offering costs 551,673 — Borrowings under
revolving credit facility, net 147,000 146,000 Contributions from
Predecessor Member, net — 460,400 Distributions to unitholders
(67,080 ) (26,770 ) Contribution from TD — 27,488 Contributions
from noncontrolling interests 16,294 — Other financing, net (5,002
) 330 Net Cash Provided by Financing Activities 642,885
607,448 Net Change in Cash and Cash Equivalents 911
26 Cash and Cash Equivalents, beginning of period 867 —
Cash and Cash Equivalents, end of period $ 1,778 $ 26
Tallgrass Energy GP, LP Financial
Statements
TALLGRASS ENERGY GP, LP
CONDENSED CONSOLIDATING BALANCE
SHEETS
June 30, 2015 December 31, 2014 TEP
ConsolidatingAdjustments (1)
TEGP TEP
ConsolidatingAdjustments (1)
TEGP (in thousands) (in thousands) ASSETS Current
Assets: Cash and cash equivalents $ 1,778 $ 500 $ 2,278 $ 867 $ — $
867 Accounts receivable, net 51,521 — 51,521 39,768 — 39,768
Receivable from related party — — — 73,393 — 73,393 Gas imbalances
1,017 — 1,017 2,442 — 2,442 Inventories 15,162 — 15,162 13,045 —
13,045 Prepayments and other current assets 3,768 —
3,768 2,766 — 2,766 Total Current Assets
73,246 500 73,746 132,281 — 132,281 Property, plant and equipment,
net 1,943,016 — 1,943,016 1,853,081 — 1,853,081 Goodwill 343,288 —
343,288 343,288 — 343,288 Intangible asset, net 100,506 — 100,506
104,538 — 104,538 Deferred tax asset — 441,584 441,584 — — —
Deferred financing costs, net 4,735 1,636 6,371 5,528 — 5,528
Deferred charges and other assets 16,651 — 16,651
18,481 — 18,481 Total Assets $ 2,481,442
$ 443,720 $ 2,925,162 $ 2,457,197 $ —
$ 2,457,197 LIABILITIES AND PARTNERS’ EQUITY Current
Liabilities: Accounts payable $ 28,583 $ — $ 28,583 $ 62,329 $ — $
62,329 Accounts payable to related parties 3,772 — 3,772 3,915 —
3,915 Gas imbalances 2,812 — 2,812 3,611 — 3,611 Derivative
liabilities at fair value 41 — 41 — — — Accrued taxes 12,206 —
12,206 3,989 — 3,989 Accrued liabilities 6,710 205 6,915 9,384 —
9,384 Deferred revenue 9,882 — 9,882 5,468 — 5,468 Other current
liabilities 4,247 — 4,247 7,872 —
7,872 Total Current Liabilities 68,253 205 68,458 96,568 —
96,568 Long-term debt 706,000 147,000 853,000 559,000 — 559,000
Other long-term liabilities and deferred credits 6,342 —
6,342 6,478 — 6,478 Total Long-term
Liabilities 712,342 147,000 859,342 565,478 — 565,478 Equity: Total
Partners' Capital 1,275,644 (866,959 ) 408,685 1,038,723 (891,857 )
146,866 Noncontrolling interests 425,203 1,163,474
1,588,677 756,428 891,857 1,648,285 Total
Equity $ 1,700,847 $ 296,515 $ 1,997,362 $
1,795,151 $ — $ 1,795,151 Total Liabilities and
Equity $ 2,481,442 $ 443,720 $ 2,925,162 $
2,457,197 $ — $ 2,457,197
(1) Represents the aggregate consolidating adjustments necessary
to produce consolidated financial statements for TEGP.
TALLGRASS ENERGY GP, LP
CONDENSED CONSOLIDATING STATEMENTS OF
INCOME
Three Months Ended June 30, 2015 Three Months Ended June 30,
2014 TEP
ConsolidatingAdjustments (1)
TEGP TEP
ConsolidatingAdjustments (1)
TEGP (in thousands) (in thousands) Revenues: Sales of
natural gas, NGLs, and crude oil $ 20,011 $ — $ 20,011 $ 39,042 $ —
$ 39,042 Natural gas transportation services 29,041 — 29,041 30,569
— 30,569 Crude oil transportation services 74,022 — 74,022 — — —
Processing and other revenues 9,896 — 9,896
7,709 — 7,709 Total Revenues 132,970 —
132,970 77,320 — 77,320
Operating Costs and Expenses: Cost of sales (exclusive of
depreciation and amortization shown below) 17,180 — 17,180 37,214 —
37,214 Cost of transportation services (exclusive of depreciation
and amortization shown below) 13,492 — 13,492 5,288 — 5,288
Operations and maintenance 12,408 — 12,408 10,055 — 10,055
Depreciation and amortization 20,355 — 20,355 9,525 — 9,525 General
and administrative 13,451 250 13,701 7,124 — 7,124 Taxes, other
than income taxes (271 ) — (271 ) 1,639 — 1,639 Loss on sale of
assets — — — — — — Total
Operating Costs and Expenses 76,615 250 76,865
70,845 — 70,845 Operating Income 56,355
(250 ) 56,105 6,475 — 6,475 Other
(Expense) Income: Interest expense, net (3,893 ) (586 ) (4,479 )
(2,137 ) — (2,137 ) Gain on remeasurement of unconsolidated
investment — — — 9,388 — 9,388 Equity in earnings of unconsolidated
investment — — — 273 — 273 Other income, net 769 —
769 729 — 729 Total Other (Expense)
Income (3,124 ) (586 ) (3,710 ) 8,253 — 8,253
Net income before tax 53,231 (836 ) 52,395 14,728 — 14,728 Deferred
income tax expense — (1,772 ) (1,772 ) — — —
Net income 53,231 (2,608 ) 50,623 14,728 — 14,728 less: Net
income attributable to noncontrolling interests (8,332 ) (37,557 )
(45,889 ) 558 (12,853 ) (12,295 ) Net income attributable to
TEGP $ 44,899 $ (40,165 ) $ 4,734 $ 15,286 $
(12,853 ) $ 2,433 Allocation of income for the three months
ended June 30, 2015: Net income attributable to TEGP from the
beginning of the period to May 11, 2015 $ 2,271 Net income
attributable to TEGP from May 12, 2015 to June 30, 2015 2,463
Basic and diluted net income per Class A share $ 0.05
Basic and diluted average number of Class A shares outstanding
47,725
(1) Represents the aggregate consolidating adjustments necessary
to produce consolidated financial statements for TEGP.
Six Months Ended June 30, 2015 Six
Months Ended June 30, 2014 TEP
ConsolidatingAdjustments (1)
TEGP TEP
ConsolidatingAdjustments (1)
TEGP (in thousands) (in thousands) Revenues: Sales of
natural gas, NGLs, and crude oil $ 41,880 $ — $ 41,880 $ 92,757 $ —
$ 92,757 Natural gas transportation services 61,189 — 61,189 64,673
— 64,673 Crude oil transportation services 124,403 — 124,403 — — —
Processing and other revenues 20,173 — 20,173
14,669 — 14,669 Total Revenues 247,645
— 247,645 172,099 — 172,099
Operating Costs and Expenses: Cost of sales (exclusive of
depreciation and amortization shown below) 36,773 — 36,773 85,420 —
85,420 Cost of transportation services (exclusive of depreciation
and amortization shown below) 24,207 — 24,207 10,405 — 10,405
Operations and maintenance 21,983 — 21,983 18,068 — 18,068
Depreciation and amortization 40,960 — 40,960 17,834 — 17,834
General and administrative 26,140 250 26,390 13,773 — 13,773 Taxes,
other than income taxes 11,026 — 11,026 3,595 — 3,595 Loss on sale
of assets 4,483 — 4,483 — — —
Total Operating Costs and Expenses 165,572 250
165,822 149,095 — 149,095 Operating
Income 82,073 (250 ) 81,823 23,004 —
23,004 Other (Expense) Income: Interest expense, net (7,333
) (586 ) (7,919 ) (3,433 ) — (3,433 ) Gain on remeasurement of
unconsolidated investment — — — 9,388 — 9,388 Equity in earnings of
unconsolidated investment — — — 717 — 717 Other income, net 1,481
— 1,481 1,669 — 1,669
Total Other (Expense) Income (5,852 ) (586 ) (6,438 ) 8,341
— 8,341 Net income before tax 76,221 (836 ) 75,385
31,345 — 31,345 Deferred income tax expense — (1,772 )
(1,772 ) — — — Net income 76,221 (2,608 )
73,613 31,345 — 31,345 less: Net income attributable to
noncontrolling interests 997 (64,754 ) (63,757 ) 1,065
(27,339 ) (26,274 ) Net income attributable to TEGP $ 77,218
$ (67,362 ) $ 9,856 $ 32,410 $ (27,339 ) $
5,071 Allocation of income for the six months ended June 30,
2015: Net income attributable to TEGP from the beginning of the
period to May 11, 2015 $ 7,393 Net income attributable to TEGP from
May 12, 2015 to June 30, 2015 2,463 Basic and diluted net
income per Class A share $ 0.05 Basic and diluted average
number of Class A shares outstanding 47,725
(1) Represents the aggregate consolidating adjustments necessary
to produce consolidated financial statements for TEGP.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150730006180/en/
Tallgrass EnergyInvestor and Financial InquiriesNate
Lien, 913-928-6012investor.relations@tallgrassenergylp.comorMedia
and Trade InquiriesPhyllis Hammond,
913-928-6014media.relations@tallgrassenergylp.com
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