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PVR Partners Announces Fourth Quarter and Full Year 2012 Results

       PVR Partners Announces Fourth Quarter and Full Year 2012 Results  PR Newswire  RADNOR, Pa., Feb. 20, 2013  RADNOR, Pa., Feb. 20, 2013 /PRNewswire/ --PVR Partners, L.P. (NYSE: PVR) ("PVR") today reported financial and operational results for the three months and the full year ended December 31, 2012.  (Logo: http://photos.prnewswire.com/prnh/20110224/PH54022LOGO )  Full Year 2012 Results  Full year 2012 highlights and results, with comparisons to full year 2011 results, included the following:    oAdjusted EBITDA of $239.0 million as compared to $242.9 million.    oDistributable cash flow ("DCF") of $119.1 million as compared to $143.8     million.    oAverage daily natural gas throughput volumes of 1,018 million cubic feet     per day ("MMcfd") as compared with 535 MMcfd.    oCoal royalty tons of 30.2 million as compared with 38.4 million.  Adjusted EBITDA and distributable cash flow 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.  Fourth Quarter Results  Fourth quarter 2012 highlights and results, with comparisons to fourth quarter 2011 results, included the following:    oAdjusted EBITDA of $67.8 million as compared to $58.9 million.    oDCF of $34.0 million as compared to $36.7 million.    oAverage daily natural gas throughput volumes of 1,388 MMcfd as compared     with 683 MMcfd.    oCoal royalty tons of 6.6 million as compared with 8.9 million.  Quarterly Distribution  As previously announced, the Board of Directors of PVR GP, LLC, the general partner of PVR, declared a quarterly distribution of $0.55 per unit payable in cash on February 14, 2013 to common unitholders of record at the close of business on February 8, 2013. This distribution equates to an annualized rate of $2.20 per unit, and represents a 1.9% increase over the prior quarter and a 7.8% increase over the distribution paid with respect to the fourth quarter of 2011.  Management Comment  "Our Eastern Midstream Segment continued to demonstrate solid growth during the fourth quarter," said Bill Shea, President and CEO of PVR's general partner. "The volume gains and operating results of our Eastern Midstream Segment benefited from the start of service of the Wyoming County trunkline at the beginning of the quarter, and the continuing build-out of our other projects in the Marcellus.  "Our overall operating results continue to be affected by weak coal demand in our Coal and Natural Resource Management Segment, and low commodity prices in the Midcontinent Midstream Segment," continued Mr. Shea. "We believe these factors will continue to impact our business during 2013, and have adjusted our financial guidance accordingly for the year."  Eastern Midstream Segment  The Eastern Midstream Segment reported fourth quarter 2012 results, with comparisons to fourth quarter 2011 results, as follows:    oAdjusted EBITDA of $33.1 million as compared to $8.9 million, primarily     due to the continued development of internal growth projects and the     acquisition of Chief Gathering LLC.    oQuarterly average throughput volumes of 967 million cubic feet per day     ("MMcfd"), as compared to 243 MMcfd. The volume growth reflects the     expansion of business on PVR's existing systems, as well as the     acquisition and expansion of the Chief Gathering systems.  Midcontinent Midstream Segment  The Midcontinent Midstream Segment reported fourth quarter 2012 results, with comparisons to fourth quarter 2011 results, as follows:    oAdjusted EBITDA of $14.2 million as compared to $15.3 million, primarily     due to low commodity prices, the migration to lower-margin fee-based     contracts, and the sale of our Crossroads system, partially offset by     increased volumes. EBITDA adjustments include the netting of an $8.7     million equity investment impairment recognized in segment revenues.    oQuarterly average throughput volumes of 421 MMcfd, as compared to 440     MMcfd. Fourth quarter 2011 volumes include approximately 47 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 fourth quarter 2012 results, with comparisons to fourth quarter 2011 results, as follows:    oAdjusted EBITDA of $20.5 million as compared to $34.6 million, primarily     due to decreased coal production and pricing.    oCoal royalty tons of 6.6 million tons, as compared to 8.9 million tons.    oCoal royalties revenue of $23.0 million, or $3.47 per ton, as compared to     $38.4 million, or $4.33 per ton.  Capital Investment and Resources  We invested $209.4 million on internal growth projects in our midstream businesses during the fourth quarter of 2012, of which $175.8 million was invested in the Eastern Midstream Segment. Full year 2012 internal growth project investment totaled $528.8 million, including $410.6 million in the Eastern Midstream Segment.  As of December 31, 2012, we had borrowings of $590.0 million under our $1.0 billion revolving credit facility, with remaining borrowing capacity of $402.1 million after adjusting for outstanding letters of credit.  Expansion Projects Update  The Phase III extension and the Canton Lateral on our Lycoming County, Pennsylvania gas trunkline and water line began full commercial operation at the end of the fourth quarter. These projects gather gas and deliver water for affiliates of Southwestern Energy Company and Royal Dutch Shell. We are also currently flowing volumes on the initial phase of the new gathering system in Lycoming County to service the acreage dedications of Inflection Energy. The build-out of that project continues to proceed on schedule.  Financial Guidance for 2013  Based on current expectations, management has updated its Adjusted EBITDA guidance for 2013. 2013 Adjusted EBITDA for the Eastern Midstream Segment is expected to be in the range of $190 - $230 million, the Midcontinent Midstream Segment is expected to be in the range of $70 to $80 million and the Coal and Natural Resource Management Segment is expected to be in the range of $75 to $85 million. Based on current expectations, management believes that 2013 maintenance capital expenditures will be in the range of $14 to $18 million and internal growth capital will be in the range of $350 to $400 million. Management will discontinue providing financial guidance for distributable cash flow.  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 is a non-GAAP measure; reconciliations of non-GAAP measures to GAAP reporting measures appear in the financial tables which follow.  Fourth Quarter / Full Year 2012 Financial and Operational Results Conference Call  A conference call and webcast, during which management will discuss full year and fourth quarter 2012 financial and operational results, is scheduled for Wednesday, February 20, 2013 at 11:00 a.m. Eastern Time. Prepared remarks by 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=92137 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 February 27 by dialing 877-344-7529 (international: 412-317-0088) and using conference playback number 10024845.  ******  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 Gathering LLC, 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.  Contact: Stephen R. Milbourne          Director - Investor Relations          Phone: 610-975-8204          E-Mail: invest@pvrpartners.com    PVR PARTNERS, L.P. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - unaudited (in thousands, except per unit data)                             Three Months Ended         Year Ended                             December 31,               December 31,                             2012          2011         2012         2011 Revenues  Natural gas           $           $           $           $                              99,462       102,243     315,242     426,690  Natural gas liquids    108,377       126,379      424,538      500,658  Gathering fees         19,736        7,734        53,831       20,409  Trunkline fees        18,609        5,957        47,002       17,454  Coal royalties         22,983        38,369       114,133      162,915  Other (1)             411           7,092        53,008       31,849 Total revenues              269,578       287,774      1,007,754    1,159,975 Expenses  Cost of gas            176,802       204,642      630,345      817,937 purchased  Operating              20,786        14,499       68,316       57,611  General and            12,878        9,780        47,452       41,480 administrative  Acquisition related    -             -            14,049       - costs  Impairments            -             -            124,845      -  Depreciation, depletion and               43,043        24,019       127,344      89,376 amortization Total expenses              253,509       252,940      1,012,351    1,006,404 Operating income (loss)     16,069        34,834       (4,597)      153,571 Other income (expense)  Interest expense       (23,157)      (10,481)     (68,773)     (44,287)  Derivatives            90            (7,153)      2,291        (13,442)  Interest income and    128           117          457          501 other Net income (loss)          (6,870)       17,317       (70,622)     96,343 Net loss (income) attributable to             -             -            -            664 noncontrolling interests (pre-merger) Net income (loss)           $           $          $           $   attributable to PVR         (6,870)      17,317      (70,622)    97,007 Partners', L.P. Earnings (loss) per         $          $        $         $     common unit, basic and      (0.30)       0.23        (1.43)      1.45 diluted Weighted average number of common units             93,333        76,207       86,222       66,342 outstanding, basic and diluted Weighted average number of Class B units            22,149                     13,630 outstanding Weighted average number of Special units            10,346                     6,473 outstanding Other data by segment: Eastern Midstream: Gathered volumes (MMcfd)    562           154          389          74 Trunkline volumes           405           89           197          40 (MMcfd) (2) Midcontinent Midstream: Daily throughput volumes    421           440          432          421 (MMcfd) Coal and Natural Resource Management: Coal royalty tons (in       6,630         8,856        30,214       38,357 thousands) (1) Includes a $31.3 second quarter gain on sale of plant and a $8.7 million impairment charge related to an equity investment in the fourth quarter of 2012. (2) Trunkline volumes include a significant portion of gathered volumes.    PVR PARTNERS, L.P. CONDENSED CONSOLIDATED BALANCE SHEETS - unaudited (in thousands)                         December 31,    December 31,                         2012            2011 Assets  Cash and cash      $           $      equivalents             14,713          8,640  Accounts           133,546         101,340 receivable  Assets held for    11,450          - sale  Other current      5,446           5,640 assets  Total current  165,155         115,620 assets  Property, plant    1,989,346       1,282,297 and equipment, net  Other long-term    844,208         196,075 assets  Total assets  $  2,998,709  $                                          1,593,992 Liabilities and Partners' Capital  Accounts payable   $            $    and accrued             197,034         124,082 liabilities  Deferred income    3,788           3,416  Derivative         -               12,042 liabilities  Total current  200,822         139,540 liabilities  Other long-term    35,468          31,748 liabilities  Senior notes      900,000         300,000  Revolving credit   590,000         541,000 facility  Partners' capital  1,272,419       581,704  Total                         $  liabilities and         $  2,998,709  1,593,992 partners' capital CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - unaudited (in thousands)                         Three Months Ended            Year Ended                         December 31,                  December 31,                         2012            2011          2012         2011 Cash flows from operating activities  Net income (loss)  $           $         $         $                             (6,870)        17,317        (70,622)    96,343  Adjustments to reconcile net income (loss) to  net cash provided by operating activities:  Gain on sale of    -               -             (31,292)     - plant  Depreciation, depletion and           43,043          24,019        127,344      89,376 amortization  Impairments        -               -             124,845      -  Commodity derivative contracts:  Total derivative (gains) losses          (90)            7,153         (2,291)      13,442 included in net income  Cash payments to settle derivatives for  (1,701)         (6,211)       (10,279)     (25,688) the period  Non-cash interest  1,607           1,044         5,824        5,779 expense  Non-cash unit-based              (215)           1,040         4,428        3,845 compensation  Equity earnings, net of distributions    11,166          3,825         11,308       8,460 received  Other              (103)           (76)          (1,032)      (985)  Changes in operating assets and    (36,368)        (89)          (12,972)     (242) liabilities Net cash provided by    10,469          48,022        145,261      190,330 operating activities Cash flows from investing activities Acquisitions, net of    -               (23,868)      (850,156)    (146,003) cash acquired Additions to property,  (163,926)       (88,803)      (512,375)    (230,599) plant and equipment Joint venture capital   (15,300)        (500)         (37,200)     (500) contributions Proceeds from sale of   -               -             62,271       - plant Other                   378             317           1,286        2,875 Net cash used in        (178,848)       (112,854)     (1,336,174)  (374,227) investing activities Cash flows from financing activities Net proceeds from       165,705         189,164       743,448      189,164 equity offerings Proceeds from issuance  -               -             600,000      - of senior notes Distributions to        (47,740)        (35,600)      (176,256)    (135,296) partners Proceeds from (repayments of)         55,000          (94,000)      49,000       133,000 borrowings, net Cash paid for debt      -               -             (19,206)     (3,675) issuance costs Cash paid for merger    -               -             -            (6,620) Net cash provided by    172,965         59,564        1,196,986    176,573 financing activities Net increase (decrease) in cash and  4,586           (5,268)       6,073        (7,324) cash equivalents Cash and cash equivalents -           10,127          13,908        8,640        15,964 beginning of period Cash and cash           $           $        $        $      equivalents - end of    14,713          8,640         14,713       8,640 period    PVR PARTNERS, L.P. CERTAIN NON-GAAP FINANCIAL MEASURES - unaudited (in thousands)                  Three Months Ended  Year Ended                  December 31,        December 31,         Guidance Range                  2012      2011      2012       2011      Full Year 2013 Reconciliation of Non-GAAP "Segment Adjusted EBITDA" to GAAP "Net income (loss)": Segment Adjusted EBITDA (a): Eastern          $       $      $        $       $          $ Midstream        33,104   8,886    82,164    23,433   190,000   230,000 Midcontinent     14,167    15,326    52,168     66,410    70,000     80,000 Midstream Coal and Natural          20,541    34,641    104,717    153,104   75,000     85,000 Resource Management Total segment    $       $       $         $        $          $ adjusted EBITDA  67,812   58,853   239,049   242,947  335,000   395,000 Adjustments to reconcile total Segment Adjusted EBITDA to Net income (loss) Depreciation, depletion and    (43,043)  (24,019)  (127,344)  (89,376)  (170,000)  (180,000) amortization Impairments on PP&E and equity  (8,700)   -         (133,545)  -         -          - investments Acquisition      -         -         (14,049)   -         -          - related costs Gain on sale of  -         -         31,292     -         -          - plant Interest         (23,157)  (10,481)  (68,773)   (44,287)  (95,000)   (100,000) expense Derivatives      90        (7,153)   2,291      (13,442)  -          - Other            128       117       457        501       -          - Net income       $       $       $         $       $         $ (loss)           (6,870)  17,317   (70,622)  96,343   70,000    115,000 Reconciliation of GAAP "Net income (loss)" to Non-GAAP "Distributable cash flow": Net income       $       $       $         $   (loss)           (6,870)  17,317   (70,622)  96,343 Depreciation, depletion and    43,043    24,019    127,344    89,376 amortization Impairments on PP&E and equity  8,700     -         133,545    - investments Acquisition      -         -         14,049     - related costs Gain on sale of  -         -         (31,292)   - plant Derivative contracts:  Derivative losses included  (90)      7,153     (2,291)    13,442 in net income  Cash payments to settle        (1,701)   (6,211)   (10,279)   (25,688) derivatives for the period Equity earnings from joint ventures, net    2,466     3,825     2,608      8,460 of distributions Maintenance capital          (4,821)   (2,679)   (17,018)   (11,211) expenditures Replacement capital          (6,725)   (6,725)   (26,900)   (26,900) expenditures Distributable    $       $       $         $  cash flow (b)    34,002   36,699   119,144   143,822 Distribution to Partners: Total cash distribution     $       $       $         $  paid during the  47,740   35,600   176,256   135,296 period Reconciliation of GAAP "Net income (loss)" to Non-GAAP "Net income as adjusted": Net income       $       $       $         $   (loss)           (6,870)  17,317   (70,622)  96,343 Impairments on PP&E and equity  8,700     -         133,545    - investments Acquisition      -         -         14,049     - related costs Gain on sale of  -         -         (31,292)   - plant Adjustments for derivatives: Derivative losses included  (90)      7,153     (2,291)    13,442 in net income Cash payments to settle        (1,701)   (6,211)   (10,279)   (25,688) derivatives for the period Net income       $      $       $        $   (loss), as          39  18,259   33,110    84,097 adjusted (c) (a) Adjusted EBITDA, or earnings before interest, tax and depreciation, depletion and amortization ("DD&A"), represents operating income plus DD&A, plus impairments on both PP&E and equity investments, 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 on both PP&E and equity investments, 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 on both PP&E and equity investments, 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          Year Ended                           December 31,                December 31,                           2012         2011           2012          2011 Revenues  Gathering fees       $        $         $         $                               18,658      3,631         46,975         8,716  Trunkline fees       18,609       5,957          47,002        17,454  Other                2,686        -              5,373         -  Total revenues    39,953       9,588          99,350        26,170 Expenses  Operating           3,121        601            7,332         1,499  General and          3,728        101            9,854         1,238 administrative  Acquisition          -            -              14,049        - related costs  Depreciation, depletion and             20,391       2,092          42,713        4,243 amortization  Total expenses     27,240       2,794          73,948        6,980 Operating income         $        $         $         $                               12,713      6,794         25,402        19,190                           Midcontinent Midstream                           Three Months Ended          Year Ended                           December 31,                December 31,                           2012         2011           2012          2011 Revenues  Natural gas          $        $           $          $                              99,462      102,243       315,242       426,690  Natural gas          108,377      126,379        424,538       500,658 liquids  Gathering fees       1,078        4,103          6,856         11,693  Other (1)            (8,247)      937            25,087        5,811  Total revenues    200,670      233,662        771,723       944,852 Expenses  Cost of gas          176,802      204,642        630,345       817,937 purchased  Operating           12,567       8,546          44,209        38,945  General and          5,834        5,148          22,409        21,560 administrative  Impairments          -            -              124,845       -  Depreciation, depletion and             14,609       12,728         51,829        47,956 amortization  Total expenses     209,812      231,064        873,637       926,398 Operating income          $        $         $           $     (loss)                   (9,142)     2,598         (101,914)    18,454                           Coal and Natural Resource Management                           Three Months Ended          Year Ended                           December 31,                December 31,                           2012         2011           2012          2011 Revenues  Coal royalties       $        $          $          $                              22,983      38,369        114,133       162,915  Coal services        1,038        2,100          5,621         8,839  Timber               1,620        1,197          5,904         5,031  Oil and gas          691          928            2,856         3,944 royalties  Other                2,623        1,930          8,167         8,224  Total revenues    28,955       44,524         136,681       188,953 Expenses  Operating           5,098        5,352          16,775        17,167  General and          3,316        4,531          15,189        18,682 administrative  Depreciation, depletion and             8,043        9,199          32,802        37,177 amortization  Total expenses     16,457       19,082         64,766        73,026 Operating income          $        $          $         $                              12,498      25,442        71,915        115,927 (1) Includes a $31.3 second quarter gain on sale of plant and a $8.7 million impairment charge related to an equity investment in the fourth quarter of 2012.      SOURCE PVR Partners, L.P.  Website: http://www.pvrpartners.com