PVR Partners Announces Third Quarter Results and Increases Quarterly Distribution

     PVR Partners Announces Third Quarter Results and Increases Quarterly
                                 Distribution

PR Newswire

RADNOR, Pa., Oct. 24, 2012

RADNOR, Pa., Oct. 24, 2012 /PRNewswire/ --PVR Partners, L.P. (NYSE: PVR)
("PVR") today reported financial and operational results for the three months
ended September 30, 2012. In addition, PVR announced an increase in its
quarterly distribution to $0.54 per unit.

(Logo: http://photos.prnewswire.com/prnh/20110224/PH54022LOGO )

Third Quarter Results

Third quarter 2012 highlights and results, with comparisons to third quarter
2011 results, included the following:

  oAdjusted EBITDA of $61.2 million as compared to $60.0 million.
  oDistributable cash flow ("DCF") of $29.9 million as compared to $36.1
    million.
  oAdjusted net income of $7.7 million as compared to $20.5 million.

Adjusted EBITDA, distributable cash flow, and adjusted net income are not
Generally Accepted Accounting Principles ("GAAP") measures. Definitions and
reconciliations of these non-GAAP measures to GAAP reporting measures appear
in the financial tables which follow.

Quarterly Distribution

The Board of Directors of PVR GP, LLC, the general partner of PVR, declared a
quarterly distribution of $0.54 per unit payable in cash on November 14, 2012
to common unitholders of record at the close of business on November 7, 2012.
This distribution equates to an annualized rate of $2.16 per unit, and
represents a 1.9% increase over the prior quarter distribution and an 8.0%
increase over the third quarter of 2011.

Management Comment

"While our operating results continue to be impacted by very challenging coal
markets and low NGL prices in the Midcontinent Midstream Segment, the solid
growth of our Eastern Midstream business continued during the third quarter,"
said Bill Shea, President and CEO of PVR's general partner. "The strong
volume gains and operating results of our Eastern Midstream Segment reflect
the growing positive impacts of the acquisition of Chief Gathering and the
continuing build out of our Lycoming system and other internal growth projects
in the Marcellus. With the recent start of operation of our new Wyoming
County Pipeline, we expect continued strong growth in the Eastern Midstream
Segment during the fourth quarter."

Eastern Midstream Segment

The Eastern Midstream Segment reported third quarter 2012 results, with
comparisons to third quarter 2011 results, as follows:

  oAdjusted EBITDA of $21.4 million as compared to $6.6 million, primarily
    due to the continued development of internal growth projects and the
    acquisition of Chief Gathering LLC.
  oQuarterly average throughput volumes of 456 million cubic feet per day
    ("MMcfd"), as compared to 63 MMcfd. The volume growth reflects the
    expansion of business on PVR's existing Lycoming and Wyoming systems, as
    well as the acquisition of Chief Gathering.

Midcontinent Midstream Segment

The Midcontinent Midstream Segment reported third quarter 2012 results, with
comparisons to third quarter 2011 results, as follows:

  oAdjusted EBITDA of $13.0 million as compared to $14.1 million, primarily
    due to low NGL prices, the migration to lower-margin fee-based contracts,
    and the sale of our Crossroads system.
  oQuarterly average throughput volumes of 410 MMcfd, as compared to 441
    MMcfd. Third quarter 2011 volumes include approximately 48 MMcfd
    attributable to the Crossroads system that was sold on July 3, 2012.

Coal and Natural Resource Management Segment

The Coal and Natural Resource Management Segment reported third quarter 2012
results, with comparisons to third quarter 2011 results, as follows:

  oAdjusted EBITDA of $26.8 million as compared to $39.4 million, primarily
    due to decreased coal production and pricing.
  oCoal royalty tons of 7.7 million tons, as compared to 9.5 million tons.
  oCoal royalties revenue of $28.8 million, or $3.73 per ton, as compared to
    $41.0 million, or $4.32 per ton.

Capital Investment and Resources

We invested approximately $150.0 million on internal growth projects during
the third quarter of 2012, including $130.6 million in the Eastern Midstream
Segment. We now expect 2012 internal growth capital to total approximately
$485 million.

As of September 30, 2012, we had borrowings of $535.0 million under our $1.0
billion revolving credit facility with remaining borrowing capacity thereunder
of $457.1 million.

Expansion Projects Update

As previously reported, the Wyoming County Pipeline began full commercial
operation at the end of the third quarter. Current volumes on the Wyoming
County Pipeline are approximately 325 MMcfd. Construction continues to
progress on Phase III and the Canton Lateral on our Lycoming County,
Pennsylvania gas trunkline and water line, and these projects are expected to
be in service by the end of the fourth quarter to gather gas for an affiliate
of Southwestern Energy Company and a subsidiary of Royal Dutch Shell.
Construction of the first phase of the new gathering system in Lycoming County
to service the acreage dedications of Inflection Energy has also begun and is
proceeding on schedule.

Financial Guidance for 2012

PVR's financial guidance for full year 2012 Adjusted EBITDA in the range of
$245 - $260 million and full year 2012 distributable cash flow, net of
maintenance and replacement capital, in the range of $120 - $130 million is
unchanged from guidance provided with the second quarter results in July.
PVR's financial guidance is based on numerous assumptions about future events
and conditions and, therefore, could vary materially from actual results.
These estimates, including capital expenditure plans, are meant to provide
guidance only and are subject to revision for acquisitions or operating
environment changes. Adjusted EBITDA and distributable cash flow are non-GAAP
measures; reconciliations of these non-GAAP measures to GAAP reporting
measures appear in the financial tables which follow.

Third Quarter 2012 Financial and Operational Results Conference Call

A conference call and webcast, during which management will discuss third
quarter 2012 financial and operational results, is scheduled for Wednesday,
October 24, 2012 at 11:00 a.m. EDT. Prepared remarks by William H. Shea, Jr.,
President and Chief Executive Officer, and other members of company management
will be followed by a question and answer period. Interested parties may
listen via webcast at http://www.videonewswire.com/event.asp?id=89879 or by
logging on using the link posted on our website, www.pvrpartners.com.
Participants who would like to ask questions may join the conference via phone
by dialing 800-860-2442 (international 412-858-4600) five to ten minutes
before the scheduled start of the conference call (reference the PVR Partners
call). An on-demand replay of the webcast will be available on our website
shortly after the conclusion of the call. A telephonic replay of the call
will be available through October 30 by dialing 877-344-7529 (international:
412-317-0088) and using conference playback number 10019447.

******

PVR Partners, L.P. (NYSE: PVR) is a publicly traded limited partnership which
owns and operates a network of natural gas midstream pipelines and processing
plants, and owns and manages coal and natural resource properties. Our
midstream assets, located principally in Texas, Oklahoma and Pennsylvania,
provide gathering, transportation, compression, processing, dehydration and
related services to natural gas producers. Our coal and natural resource
properties, located in the Appalachian, Illinois and San Juan basins, are
leased to experienced operators in exchange for royalty payments. More
information about PVR is available on our website at www.pvrpartners.com.

******

This release is intended to be a qualified notice under Treasury Regulation
Section 1.1446-4(b). Brokers and nominees should treat one hundred percent
(100.0%) of the Partnership's distributions to non-U.S. investors as being
attributable to income that is effectively connected with a United States
trade or business. Accordingly, the Partnership's distributions to non-U.S.
investors are subject to federal income tax withholding at the highest
applicable effective tax rate.

******

This press release includes "forward-looking statements" within the meaning of
federal securities laws. All statements, other than statements of historical
facts, included in this release that address activities, events or
developments that the Partnership expects, believes or anticipates will or may
occur in the future are forward-looking statements. These forward-looking
statements rely on a number of assumptions concerning future events and are
subject to a number of uncertainties, factors and risks, many of which are
outside the Partnership's ability to control or predict, which could cause
results to differ materially from those expected by management. Such risks and
uncertainties include, but are not limited to, regulatory, economic and market
conditions, our ability realize the anticipated benefits from the acquisition
of Chief, the timing and success of business development efforts and other
uncertainties. Additional information concerning these and other factors can
be found in our press releases and public periodic filings with the Securities
and Exchange Commission, including our Annual Report on Form 10-K for the year
ended December 31, 2011 and most recently filed Quarterly Reports on Form
10-Q. Readers should not place undue reliance on forward-looking statements,
which reflect management's views only as of the date hereof. We undertake no
obligation to revise or update any forward-looking statements, or to make any
other forward-looking statements, whether as a result of new information,
future events or otherwise.



PVR PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - unaudited
(in thousands, except per unit data)
                            Three Months Ended        Nine Months Ended
                            September 30,             September 30,
                            2012         2011         2012         2011
Revenues
 Natural gas           $        $        $        $  
                            78,026      120,240     215,780      324,447
 Natural gas liquids    96,237       129,389      316,161      374,279
 Gathering and          27,229       10,081       62,488       24,172
transportation
 Coal royalties         28,760       40,977       91,150       124,546
Gain on sale of plant  31,292       -            31,292       -
 Other                  7,303        7,665        21,305       24,757
Total revenues              268,847      308,352      738,176      872,201
Expenses
 Cost of gas purchased  147,246      223,762      453,543      613,295
 Operating              17,587       15,797       47,530       43,112
 General and            11,531       8,755        34,574       31,700
administrative
 Acquisition related    -            -            14,049       -
costs
 Impairments            -            -            124,845      -
 Depreciation,          31,992       22,463       84,301       65,357
depletion and amortization
Total expenses              208,356      270,777      758,842      753,464
Operating income (loss)     60,491       37,575       (20,666)     118,737
Other income (expense)
 Interest expense       (20,288)     (10,528)     (45,616)     (33,806)
 Derivatives            (1,524)      8,690        2,201        (6,289)
 Interest income and    104          120          329          384
other
Net income (loss)          38,783       35,857       (63,752)     79,026
Net loss (income)
attributable to             -            -            -            664
noncontrolling interests
(pre-merger)
Net income (loss)           $        $       $        $   
attributable to PVR         38,783      35,857      (63,752)    79,690
Partners', L.P.
Earnings per common unit,   $       $       $       $     
basic and diluted            0.16        0.50     (1.14)    1.26
Weighted average number of
common units outstanding,   88,366       71,197       83,834       63,019
basic and diluted
Weighted average number of  21,620                    10,770
Class B units outstanding
Weighted average number of  10,346                    5,173
Special units outstanding
Other data:
Daily throughput volumes
(MMcfd) - Eastern           456          63           337          47
Midstream
Daily throughput volumes
(MMcfd) - Midcontinent      410          441          435          415
Midstream
Coal royalty tons (in       7,703        9,479        23,584       29,501
thousands)







PVR PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS - unaudited
(in thousands)
                          September 30,  December 31,
                          2012           2011
Assets
 Cash and cash        $          $     
equivalents               10,127         8,640
 Accounts receivable  97,443         101,340
 Other current        5,314          5,640
assets
 Total current    112,884        115,620
assets
 Property, plant and  1,822,010      1,282,297
equipment, net
 Other long-term      854,140        196,075
assets
 Total assets    $            $   
                          2,789,034      1,593,992
Liabilities and
Partners' Capital
 Accounts payable     $           $    
and accrued liabilities   152,754       124,082
 Deferred income      3,963          3,416
 Derivative           1,787          12,042
liabilities
 Total current    158,504        139,540
liabilities
 Other long-term      33,933         31,748
liabilities
 Senior notes        900,000        300,000
 Revolving credit     535,000        541,000
facility
 Partners' capital    1,161,597      581,704
 Total           $            $   
liabilities and           2,789,034      1,593,992
partners' capital
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - unaudited
(in thousands)
                          Three Months Ended           Nine Months Ended
                          September 30,                September 30,
                          2012           2011          2012         2011
Cash flows from
operating activities
 Net income (loss)    $          $        $        $   
                          38,783        35,857       (63,752)    79,026
 Adjustments to
reconcile net income to
 net cash
provided by operating
activities:
 Gain on sale of      (31,292)       -             (31,292)     -
plant
 Depreciation,
depletion and             31,992         22,463        84,301       65,357
amortization
 Impairments          -              -             124,845      -
 Commodity
derivative contracts:
 Total derivative
losses included in net    1,524          (8,690)       (2,201)      6,289
income
 Cash payments to
settle derivatives for    (1,332)        (6,699)       (8,578)      (19,477)
the period
 Non-cash interest    1,589          1,040         4,217        4,735
expense
 Non-cash unit-based  1,086          966           4,643        2,805
compensation
 Equity earnings,
net of distributions      697            2,818         142          4,635
received
 Other                (231)          (127)         (929)        (909)
 Changes in
operating assets and      23,334         2,329         23,396       (153)
liabilities
Net cash provided by      66,150         49,957        134,792      142,308
operating activities
Cash flows from
investing activities
Acquisitions, net of      787            (95)          (850,156)    (122,135)
cash acquired
Additions to property,    (173,455)      (67,000)      (348,449)    (141,796)
plant and equipment
Proceeds for sale of      62,271         -             62,271       -
plant
Other                     (9,932)        347           (20,992)     2,558
Net cash used in          (120,329)      (66,748)      (1,157,326)  (261,373)
investing activities
Cash flows from
financing activities
Net proceeds from equity  (219)          -             577,743      -
offerings
Proceeds from issuance    -              -             600,000      -
of senior notes
Distributions to          (46,833)       (34,887)      (128,516)    (99,696)
partners
Proceeds from
(repayments of)           103,000        55,000        (6,000)      227,000
borrowings, net
Cash paid for debt        (617)          -             (19,206)     (3,675)
issuance costs
Cash paid for merger      -              (16)          -            (6,620)
Net cash provided by      55,331         20,097        1,024,021    117,009
financing activities
Net increase (decrease)
in cash and cash          1,152          3,306         1,487        (2,056)
equivalents
Cash and cash
equivalents - beginning   8,975          10,602        8,640        15,964
of period
Cash and cash             $          $        $       $   
equivalents - end of      10,127        13,908       10,127       13,908
period









PVR PARTNERS, L.P.
CERTAIN NON-GAAP FINANCIAL MEASURES - unaudited
(in thousands)
                 Three Months Ended  Nine Months Ended
                 September 30,       September 30,        Guidance Range
                 2012      2011      2012       2011      Full Year 2012
Reconciliation
of Non-GAAP
"Segment
Adjusted EBITDA"
to GAAP "Net
income (loss)":
Segment
Adjusted EBITDA
(a):
Eastern          $       $      $        $       $         $ 
Midstream        21,440   6,583    49,060    14,547   87,000    93,000
Midcontinent     12,994    14,052    38,001     51,084    58,000     62,000
Midstream
Coal and
Natural          26,757    39,403    84,176     118,463   100,000    105,000
Resource
Management
Total segment    $       $       $         $        $          $
adjusted EBITDA  61,191   60,038   171,237   184,094  245,000   260,000
Adjustments to
reconcile total
Segment
Adjusted EBITDA
to Net income
(loss)
Depreciation,
depletion and    (31,992)  (22,463)  (84,301)   (65,357)
amortization
Impairments      -         -         (124,845)  -
Acquisition      -         -         (14,049)   -
related costs
Gain on sale of  31,292    -         31,292     -
plant
Interest         (20,288)  (10,528)  (45,616)   (33,806)
expense
Derivatives      (1,524)   8,690     2,201      (6,289)
Other            104       120       329        384
Net income       $       $       $         $  
(loss)           38,783   35,857   (63,752)  79,026
Reconciliation
of GAAP "Net
income (loss)"
to Non-GAAP
"Distributable
cash flow":
Net income       $       $       $         $       $          $
(loss)           38,783   35,857   (63,752)  79,026   (45,000)  (42,000)
Depreciation,
depletion and    31,992    22,463    84,301     65,357    115,000    118,000
amortization
Impairment       -         -         124,845    -         125,000    125,000
Acquisition      -         -         14,049     -         14,000     14,000
related costs
Gain on sale of  (31,292)  -         (31,292)   -         (31,300)   (31,300)
plant
Derivative
contracts:
 Derivative
losses included  1,524     (8,690)   (2,201)    6,289     (2,000)    (1,000)
in net income
 Cash payments
to settle        (1,332)   (6,699)   (8,578)    (19,477)  (11,000)   (10,000)
derivatives for
the period
Equity earnings
from joint
ventures, net    697       2,818     142        4,635     (500)      500
of
distributions
Maintenance
capital          (3,749)   (2,884)   (12,197)   (8,532)   (17,200)   (16,200)
expenditures
Replacement
capital          (6,725)   (6,725)   (20,175)   (20,175)  (27,000)   (27,000)
expenditures
Distributable    $       $       $        $        $          $
cash flow (b)    29,898   36,140   85,142    107,123  120,000   130,000
Distribution to
Partners:
Total cash
distribution     $       $       $         $  
paid during the  46,833   34,887   128,516   99,696
period
Reconciliation
of GAAP "Net
income (loss)"
to Non-GAAP
"Net income as
adjusted":
Net income       $       $       $         $  
(loss)           38,783   35,857   (63,752)  79,026
Impairments      -         -         124,845    -
Acquisition      -         -         14,049     -
related costs
Gain on sale of  (31,292)  -         (31,292)   -
plant
Adjustments for
derivatives:
Derivative
losses included  1,524     (8,690)   (2,201)    6,289
in net income
Cash payments
to settle        (1,332)   (6,699)   (8,578)    (19,477)
derivatives for
the period
Net income, as   $      $       $        $  
adjusted (c)     7,683    20,468   33,071    65,838
(a) Adjusted EBITDA, or earnings before interest, tax and depreciation,
depletion and amortization ("DD&A"), represents operating income plus DD&A,
plus impairments, plus acquisition related costs, minus gains on sale of
plant. We believe EBITDA or a version of Adjusted EBITDA is commonly used by
investors and professional research analysts in the valuation, comparison,
rating and investment recommendations of companies in the natural gas
midstream and coal industries. We use this information for comparative
purposes within the industry. EBITDA is not a measure of financial performance
under GAAP and should not be considered as a measure of liquidity or as an
alternative to net income.
(b) Distributable cash flow represents net income plus DD&A, plus impairments,
plus acquisition related costs, minus gain on sale of plant, plus (minus)
derivative losses (gains) included in net income, plus (minus) cash received
(paid) for derivative settlements, minus equity earnings in joint ventures,
plus cash distributions from joint ventures, minus maintenance capital
expenditures, minus replacement capital expenditures. Distributable cash flow
is also the quantitative standard used by investors and professional research
analysts in the valuation, comparison, rating and investment recommendations
of publicly traded partnerships. Distributable cash flow is presented because
we believe it is a useful adjunct to net cash provided by operating activities
under GAAP. Distributable cash flow is not a measure of financial performance
under GAAP and should not be considered as an alternative to cash flows from
operating, investing or financing activities, as an indicator of cash flows,
as a measure of liquidity or as an alternative to net income.
(c) Net income, as adjusted, represents net income adjusted to exclude the
effects impairments, one-time charges related to acquisitions, gains on sale
of plant, and non-cash changes in the fair value of derivatives. We believe
this presentation is commonly used by investors and professional research
analysts in the valuation, comparison, rating and investment recommendations
of companies in the natural gas midstream industry. We use this information
for comparative purposes within the industry. Net income, as adjusted, is not
a measure of financial performance under GAAP and should not be considered as
a measure of liquidity or as an alternative to net income.





PVR PARTNERS, L.P.
QUARTERLY SEGMENT INFORMATION - unaudited
(in thousands)
                                Eastern Midstream
                                Three Months Ended        Nine Months Ended
                                September 30,             September 30,
                                2012         2011         2012       2011
Revenues
 Gathering and              $        $       $      $    
transportation                  25,759      7,720       56,710     16,582
 Other                      1,041        -            2,687      -
 Total revenues          26,800       7,720        59,397     16,582
Expenses
 Operating                 2,124        635          4,211      898
 General and                3,236        502          6,126      1,137
administrative
 Acquisition related costs  -            -            14,049     -
 Depreciation, depletion    11,867       987          22,322     2,151
and amortization
 Total expenses           17,227       2,124        46,708     4,186
Operating income                $       $       $      $    
                                9,573       5,596       12,689     12,396
                                Midcontinent Midstream
                                Three Months Ended        Nine Months Ended
                                September 30,             September 30,
                                2012         2011         2012       2011
Revenues
 Natural gas                $        $         $       $   
                                78,026      120,240     215,780    324,447
 Natural gas liquids        96,237       129,389      316,161    374,279
 Gathering and              1,470        2,361        5,778      7,590
transportation
 Gain on sale of plant      31,292       -            31,292     -
 Other                      497          1,186        2,042      4,874
 Total revenues          207,522      253,176      571,053    711,190
Expenses
 Cost of gas purchased      147,246      223,762      453,543    613,295
 Operating                 11,164       10,880       31,642     30,399
 General and                4,826        4,482        16,575     16,412
administrative
 Impairments                -            -            124,845    -
 Depreciation, depletion    11,913       11,904       37,220     35,228
and amortization
 Total expenses           175,149      251,028      663,825    695,334
Operating income (loss)        $        $       $       $    
                                32,373      2,148       (92,772)  15,856
                                Coal and Natural Resource Management
                                Three Months Ended        Nine Months Ended
                                September 30,             September 30,
                                2012         2011         2012       2011
Revenues
 Coal royalties             $        $        $      $   
                                28,760      40,977      91,150     124,546
 Coal services              1,953        2,151        4,583      6,739
 Timber                     1,411        1,457        4,284      3,834
 Oil and gas royalties      977          1,234        2,165      3,016
 Other                      1,424        1,637        5,544      6,294
 Total revenues          34,525       47,456       107,726    144,429
Expenses
 Operating                 4,299        4,282        11,677     11,815
 General and                3,469        3,771        11,873     14,151
administrative
 Depreciation, depletion    8,212        9,572        24,759     27,978
and amortization
 Total expenses           15,980       17,625       48,309     53,944
Operating income                $        $        $      $    
                                18,545      29,831      59,417     90,485







PVR PARTNERS, L.P.
DERIVATIVE CONTRACT SUMMARY - unaudited
As of September 30, 2012
                     Average

                     Volume Per         Swap           Weighted Average Price

                     Day                Price          Put (a)      Call (b)
NGL - natural        (gallons)                       (per gallon)
gasoline collar
Fourth quarter       54,000                            $1.75        $2.02
2012
Crude swap           (barrels)        (per
                                        barrel)
Fourth quarter       600                $88.62
2012
Natural gas          (MMBtu)          (MMBtu)
purchase swap
Fourth quarter       4,000              $5.195
2012
We estimate that, excluding the effects of derivative positions described
above, for every $1.00 per MMBtu increase or decrease in the natural gas
price, our natural gas midstream gross margin and operating income (loss) for
the remainder of 2012 would increase or decrease by $0.1 million. In addition,
we estimate that for every $5.00 per barrel increase or decrease in the crude
oil price, our natural gas midstream gross margin and operating income (loss)
for the remainder of 2012 would increase or decrease by $2.0 million. This
assumes that natural gas prices, crude oil prices and inlet volumes remain
constant at anticipated levels. These estimated changes in our gross margin
and operating income (loss) exclude potential cash receipts or payments in
settling these derivative positions.
(a) - Purchased put/floor.
(b) - Sold call/ceiling.





Contact: Stephen R. Milbourne
         Director - Investor Relations
         Phone: 610-975-8204
         E-Mail: invest@pvrpartners.com



SOURCE PVR Partners, L.P.

Website: http://www.pvrpartners.com
 
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