JP Energy Partners LP (NYSE: JPEP) (“JP Energy”, “we,” “our,” or “us”)
today announced its 2016 financial guidance.
Financial guidance for 2016 includes full year Adjusted EBITDA of
$50-$56 million and Distributable Cash Flow of $39-$45 million. For the
full year 2016, our goal is to achieve total unit distribution coverage
of 1.0x, which could include some level of corporate overhead support
from our General Partner. Approximately 80% of the 2016 Adjusted EBITDA
guidance is not sensitive to crude oil volumes or margins.
“Our 2016 financial guidance reflects continued execution in each of our
business segments, resulting in double-digit Adjusted EBITDA growth at
the mid-point,” said J. Patrick Barley, Executive Chairman, President
and Chief Executive Officer of JP Energy. “While we forecast some
portion of our annual Adjusted EBITDA growth to result from expected
improvements in volumes and margins, the majority of the expected
increase is due to identified and controllable sources of growth
including expense reductions and efficiency improvements across our
operations, many of which are already underway. While not factored into
our forecast, our business and its concentration in the Permian Basin
offers significant upside potential during an eventual crude oil
recovery.”
Balance Sheet and Liquidity
Full year 2016 growth capital expenditures are estimated to range
$25-$35 million. Of this amount, $15 million is expected to be driven by
the continued development of our Silver Dollar Pipeline system. We
expect to maintain adequate liquidity on our revolving credit facility
to fund our planned organic spending needs and remain at or below JP
Energy’s long-term target of 3.5-4.0x debt to EBITDA through 2016.
Conference Call Information
We will hold a conference call on Friday, January 8, 2016, at 8:00 a.m.
Central Time (9:00 a.m. Eastern Time) to discuss our 2016 financial
guidance. The call can be accessed live over the telephone by dialing
(877) 407-0784, or for international callers, (201) 689-8560. A replay
will be available shortly after the call and can be accessed by dialing
(877) 870-5176, or for international callers (858) 384-5517. The
passcode for the replay is 13627727. The replay will be available until
January 22, 2016.
Interested parties may also listen to a simultaneous webcast of the
conference call by logging onto JP Energy’s website at www.jpenergypartners.com
in the Investors section. A replay of the webcast will also be available
for approximately 30 days following the conference call.
About JP Energy Partners LP
JP Energy Partners LP (JPEP) is a publicly traded, growth-oriented
limited partnership that owns, operates, develops and acquires a
diversified portfolio of midstream energy assets. Our operations
currently consist of: (i) crude oil pipelines and storage; (ii) refined
products terminals and storage; and (iii) NGL distribution and sales,
which together provide midstream infrastructure solutions for the
growing supply of crude oil, refined products and NGLs in the United
States. To learn more, please visit our website at www.jpenergypartners.com.
Use of Non-GAAP Financial Measures
Adjusted EBITDA and distributable cash flow are supplemental, non-GAAP
financial measures used by management and by external users of our
financial statements, such as investors and commercial banks, to assess:
-
our operating performance as compared to those of other companies in
the midstream sector, without regard to financing methods, historical
cost basis or capital structure;
-
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
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the viability of acquisitions and other capital expenditure projects
and the returns on investment of various investment opportunities.
We believe that the presentation of Adjusted EBITDA and distributable
cash flow provides information useful to investors in assessing our
financial condition and results of operations. The GAAP measures most
directly comparable to Adjusted EBITDA and distributable cash flow are
net income (loss) and cash flow from operating activities, respectively.
These non-GAAP measures should not be considered as alternatives to the
most directly comparable GAAP financial measure. Each of these non-GAAP
financial measures exclude some, but not all, items that affect the most
directly comparable GAAP financial measure. Because Adjusted EBITDA and
distributable cash flow may be defined differently by other companies in
the our industry, our definitions of these non-GAAP financial measures
may not be comparable to similarly titled measures of other companies,
thereby diminishing their utility.
We define Adjusted EBITDA as net income (loss) plus (minus) interest
expense (income), income tax expense (benefit), depreciation and
amortization expense, asset impairments, (gains) losses on asset sales,
certain non-cash charges such as non-cash equity compensation, non-cash
vacation expense, non-cash (gains) losses on commodity derivative
contracts (total (gain) loss on commodity derivatives less net cash flow
associated with commodity derivatives settled during the period) and
selected (gains) charges and transaction costs that are unusual or
non-recurring. We define distributable cash flow as Adjusted EBITDA plus
proceeds from the sale of assets, less net cash interest paid, income
taxes paid and maintenance capital expenditures.
Forward-Looking Statements
Disclosures in this press release contain “forward-looking statements.”
The words “believe,” “expect,” “anticipate,” “plan,” “intend,”
“foresee,” “should,” “would,” “will,” “could,” “may,” “guidance,”
“assume,” “outlook,” “estimate,” “target” or other similar expressions
are intended to identify forward-looking statements, which are generally
not historical in nature. These forward-looking statements are based on
various assumptions, many of which are based, in turn, upon further
assumptions, including examination of historical operating trends made
by our management of JP Energy, our current expectations and beliefs
concerning future developments and their potential effect on us. While
management believes that these forward-looking statements are reasonable
as and when made, because assumptions are inherently subject to
significant uncertainties and contingencies, which are difficult or
impossible to predict and are beyond our control, we cannot give
assurance that we will achieve or accomplish these expectations, beliefs
or intentions or that future developments affecting us will be those
that we anticipate. Comments concerning our expectations for future
revenues and operating results are based on, among other things, our
forecasts for our existing operations and do not include the potential
impact of any future acquisitions. Our forward-looking statements
involve significant risks and uncertainties (some of which are beyond
our control) and assumptions that could cause actual results to differ
materially from our historical experience and our present expectations
or projections. Important factors that could cause actual results to
differ materially from those in the forward-looking statements include,
but are not limited to the price of, demand for and production of, crude
oil, refined products and NGLs in the markets we serve; the volumes of
crude oil that we gather, transport and store; the throughput volumes at
our refined products terminals and our NGL sales volumes; the fees we
receive for the crude oil, refined products and NGL volumes we handle;
pressures from our competitors, some of which may have significantly
greater resources than us; the cost of propane that we buy for resale,
including due to disruptions in its supply, and whether we are able to
pass along cost increases to our customers; competitive pressures from
other energy sources such as natural gas, which could reduce existing
demand for propane; the risk of contract cancellation, non-renewal or
failure to perform by our customers, and our inability to replace such
contracts and/or customers; leaks or releases of hydrocarbons into the
environment that result in significant costs and liabilities; the level
of our operating, maintenance and general and administrative expenses;
regulatory action affecting our existing contracts, our operating costs
or our operating flexibility; failure to secure or maintain contracts
with our largest customers, or non-performance of any of those customers
under the applicable contract; competitive conditions in our industry;
changes in the long-term supply of and demand for oil and natural gas;
volatility of fuel prices; actions taken by our customers, competitors
and third-party operators; our ability to complete growth projects on
time and on budget; inclement or hazardous weather conditions, including
flooding, and the physical impacts of climate change; environmental
hazards; industrial accidents; changes in laws and regulations (or the
interpretation thereof) related to the transportation, storage or
terminaling of crude oil and refined products or the distribution and
sales of NGLs; fires, explosions or other accidents; the effects of
future litigation; and other factors discussed from time to time in each
of our documents and reports filed with the Securities and Exchange
Commission. Any forward-looking statement applies only as of the date on
which such statement is made and we 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. When considering
these forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in our 10-K and other documents
on file with the Securities and Exchange Commission. The risk factors
and other factors noted in our public filings could cause our actual
results to differ materially from those contained in any forward-looking
statement. Given the uncertainties and risk factors that could cause our
actual results to differ materially from those contained in any
forward-looking statement, we caution investors not to unduly rely on
our forward-looking statements. We disclaim any obligations to and do
not intend to update or announce publicly the result of any revisions to
any of the forward-looking statements in this press release or the
accompanying presentation to reflect future events or developments.
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