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 November 4, 2015 - 4:15 PM EST
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Tallgrass Energy Partners and Tallgrass Energy GP Report Strong Third Quarter 2015 Results

Tallgrass Energy Partners, LP (NYSE: TEP) ("TEP") and Tallgrass Energy GP, LP (NYSE: TEGP) ("TEGP") today reported financial and operating results for the third quarter of 2015. TEP and TEGP are collectively referred to as Tallgrass Energy.

“Tallgrass Energy delivered another solid performance for the third quarter of 2015,” said Tallgrass Energy President and CEO David G. Dehaemers Jr. “We increased distributions at both TEP and TEGP while maintaining a very strong balance sheet and healthy distribution coverage. Our low leverage and the relative strength of our equity provide us continued flexibility to fund future growth projects and dropdown transactions. We are especially proud of our performance and strength in the industry given that capital markets are painting all energy companies - particularly MLPs - with a broad negative brush.”

Third 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 $0.60 per common unit for the third quarter of 2015. This quarterly distribution represents $2.40 on an annualized basis and an increase of 46.3 percent from the third quarter of 2014. The quarterly distribution will be paid on Friday, November 13, 2015, to unitholders of record as of the close of business on Friday, October 30, 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 $0.144 per Class A share for the third quarter of 2015. This quarterly distribution represents $0.576 per Class A share on an annualized basis. The quarterly distribution will be paid on Friday, November 13, 2015, to Class A shareholders of record as of the close of business on Friday, October 30, 2015.

Tallgrass Energy Partners, LP

The financial results for all periods presented in the table below include the applicable results of operations of Trailblazer Pipeline Company LLC, which was acquired by TEP effective April 1, 2014, and our 33.3 percent membership interest in Tallgrass Pony Express Pipeline, LLC (“Pony Express”), which was acquired by TEP effective September 1, 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.

Summary Financial Information

    Three Months Ended September 30,     Nine Months Ended September 30,
(in thousands, except coverage and per unit data) 2015   2014 2015   2014
 
Net income attributable to partners $ 42,679 $ 11,444 $ 119,897 $ 43,853
Add:
Interest expense, net of noncontrolling interest 3,872 1,414 11,205 4,848
Depreciation and amortization expense, net of noncontrolling interest 18,826 9,568 57,661 26,246
Non-cash gain related to derivative instruments (259 ) (395 ) (218 ) (140 )
Non-cash compensation expense 734 1,475 3,988 3,724
Non-cash loss from asset sales 4,483
Distributions from unconsolidated investment 184 1,464
Less:
Equity in earnings of unconsolidated investment (717 )
Non-cash loss allocated to noncontrolling interest (9,377 )
Gain on remeasurement of unconsolidated investment       (9,388 )
Adjusted EBITDA $ 65,852   $ 23,690   $ 187,639   $ 69,890  
Add:
Pony Express preferred distributions in excess of distributable cash flow attributable to Pony Express 5,429 5,429
Pony Express deficiency payments received, net 8,342 12,050
Less:
Cash interest expense (3,518 ) (1,008 ) (10,031 ) (3,875 )
Maintenance capital expenditures (4,659 ) (4,182 ) (9,237 ) (7,654 )
Distributions to noncontrolling interest in excess of earnings (11,520 ) (22,517 )
Cash flow attributable to predecessor operations   966     (3,086 )
Distributable cash flow (DCF) 54,497 24,895 157,904 60,704
Less:
Distributions (48,574 ) (21,663 ) (133,540 ) (55,035 )
Amounts in excess of distributions $ 5,923   $ 3,232   $ 24,364   $ 5,669  
Distribution coverage(1) 1.12 x 1.15 x 1.18 x 1.10 x
 
Common and subordinated units outstanding(2) 60,578 49,005 60,578 49,005
Distribution per common unit $ 0.6000 $ 0.4100 $ 1.7000 $ 1.1150
 

(1) Distribution coverage for the nine months ended September 30, 2014, includes the impact of the distributions paid on te 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 1.17x for the nine months ended September 30, 2014.

(2) Common and subordinated units outstanding represent the number of units as of the date of record for the third quarter distributions in both 2014 and 2015. All subordinated units converted into common units on February 17, 2015.

Segment Overview

The third quarter 2015 results by segment are summarized below:

    Three Months Ended September 30,     Nine Months Ended September 30,
2015   2014   2015   2014
(in thousands)
Natural Gas Transportation & Logistics
Operating income $ 10,499 $ 10,791 $ 32,989 $ 32,075
Add:
Depreciation and amortization expense 5,241 6,025 17,066 17,745
Non-cash gain related to derivative instruments (259 ) (395 ) (218 ) (140 )
Other income, net 502   731   1,983   2,400  
Segment Adjusted EBITDA $ 15,983   $ 17,152   $ 51,820   $ 52,080  
 
Three Months Ended September 30,   Nine Months Ended September 30,
2015 2014 2015 2014
Crude Oil Transportation & Logistics (in thousands)
Operating income (loss) $ 44,069 $ (822 ) $ 103,857 $ (2,336 )
Add:
Depreciation and amortization expense, net of noncontrolling interest 10,323 253 30,752 757
Adjusted EBITDA attributable to noncontrolling interests (6,866 ) 547 (5,880 ) 1,557
Less:
Non-cash loss allocated to noncontrolling interest     (9,377 )  
Segment Adjusted EBITDA $ 47,526   $ (22 ) $ 119,352   $ (22 )
 
Three Months Ended September 30, Nine Months Ended September 30,
2015 2014 2015 2014
Processing & Logistics (in thousands)
Operating (loss) income $ (212 ) $ 5,141 $ 4,508 $ 14,459
Add:
Depreciation and amortization expense, net of noncontrolling interest 3,262 3,290 9,843 7,744
Non-cash loss from asset sales 4,483
Distributions from unconsolidated investment 184 1,464
Adjusted EBITDA attributable to noncontrolling interests (4 )   7   55  
Segment Adjusted EBITDA $ 3,046   $ 8,615   $ 18,841   $ 23,722  
 

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 did not generate revenue during the three or nine month periods ending September 30, 2014.

Adjusted EBITDA in the Natural Gas Transportation & Logistics segment for the third quarter of 2015 was $16.0 million, representing a decrease of $1.2 million as compared to the third quarter of 2014 primarily due to higher operating costs. Firm contracted transportation capacity of 1,506 MMcf/d for the third quarter of 2015 was comparable to the 1,497 MMcf/d for the third quarter of 2014. When comparing the Natural Gas Transportation & Logistics segment's Adjusted EBITDA for the third quarter of 2015 to its $16.6 million of Adjusted EBITDA for the second quarter of 2015, the decrease of $0.6 million is primarily attributable to higher operating costs.

The Crude Oil Transportation & Logistics segment Adjusted EBITDA was $47.5 million for the third 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 third quarter of 2014 as Pony Express had not yet commenced commercial operations, but distributable cash flow for the third quarter of 2014 includes approximately $5.4 million of preferred distributions received by TEP from Pony Express. When comparing the Crude Oil Transportation & Logistics segment's Adjusted EBITDA for the third quarter of 2015 of $47.5 million to the $46.3 million of Adjusted EBITDA for the second quarter of 2015, the increase of $1.2 million is primarily attributable to increased transportation services revenue due to the lateral in Northeast Colorado being in-service during the entire third quarter of 2015 and the commencement of service for an incremental 10,000 barrels of firm expansion capacity. TEP received distributable cash flow from Pony Express of $43.7 million for its 66.7 percent membership interest for the third quarter of 2015 which is greater than the minimum quarterly preference payment of $36.7 million.

The Processing & Logistics segment generated Adjusted EBITDA of $3.0 million for the third quarter of 2015, representing a decrease of $5.6 million as compared to the third quarter of 2014 and a decrease of $4.1 million as compared to the Adjusted EBITDA of $7.1 million for the second quarter of 2015. The decrease was primarily due to higher costs associated with planned plant downtime for annual maintenance during the third quarter of 2015, lower commodity prices and lower average inlet volumes. Approximate average inlet volumes at the processing facilities were 110 MMcf/day for the third quarter of 2015 as compared to 153 MMcf/day for the third quarter of 2014. A portion of the decrease is attributable to the plant downtime in the third quarter of 2015 which in the previous year occurred in the second quarter.

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 September 30, 2015.
  • 20,000,000 common units of TEP, representing an approximately 32.57 percent limited partner interest in TEP at September 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
September 30, 2015
 

TEP distributions to Tallgrass Equity(1)

General partner interest $ 660
IDRs 11,567
TEP common units owned by Tallgrass Equity 12,000  
Total TEP distributions to Tallgrass Equity $ 24,227
Less:
Cash interest expense attributable to Tallgrass Equity (1,020 )
Cash General and administrative expenses attributable to Tallgrass Equity (500 )
Cash available for distribution by Tallgrass Equity $ 22,707
Distributions to TEGP (Class A) 6,872
Distributions to noncontrolling interests (Class B) 15,769  
Total cash distributions by Tallgrass Equity 22,641  
TEGP
Distributions from Tallgrass Equity 6,872
Less:
Distributions to Class A shareholders (6,872 )
Amounts in excess of distributions $  
Distribution coverage 1.00
 
Class A shares outstanding 47,725
Distribution per Class A share $ 0.1440

(1) Represents distributions expected to be received by Tallgrass Equity from TEP on or about November 13, 2015 in connection with TEP's distribution for the quarter ended September 30, 2015.

Conference Call

Please join Tallgrass Energy for a conference call and webcast to discuss third quarter 2015 results at 4 p.m. Central Time on Wednesday, November 4, 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 limited partnership formed to own, operate, acquire and develop midstream energy assets in North America. TEP currently provides natural gas transportation and storage services for customers in the Rocky Mountain and Midwest regions of the United States through its Tallgrass Interstate Gas Transmission and Trailblazer Pipeline systems. It provides crude oil transportation to customers in Wyoming, Colorado and the surrounding regions through its membership interest in Tallgrass Pony Express Pipeline. TEP also provides services for customers in Wyoming through Tallgrass Midstream at its Casper and Douglas natural gas processing and its West Frenchie Draw natural gas treating facilities and provides water business services to customers in Colorado and Texas through BNN Water Solutions. TEP’s 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 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 the funding of future growth projects and dropdown transactions. 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
 
September 30, 2015     December 31, 2014
(in thousands)
ASSETS
Current Assets:
Cash and cash equivalents $ 18,705 $ 867
Accounts receivable, net 52,926 39,768
Receivable from related party 73,393
Gas imbalances 862 2,442
Inventories 14,132 13,045
Derivative assets at fair value 218
Prepayments and other current assets 3,678   2,766  
Total Current Assets 90,521 132,281
Property, plant and equipment, net 1,948,821 1,853,081
Goodwill 343,288 343,288
Intangible asset, net 98,502 104,538
Deferred financing costs, net 4,496 5,528
Deferred charges and other assets 15,649   18,481  
Total Assets $ 2,501,277   $ 2,457,197  
LIABILITIES AND PARTNERS’ EQUITY
Current Liabilities:
Accounts payable $ 19,627 $ 62,329
Accounts payable to related parties 3,672 3,915
Gas imbalances 2,629 3,611
Accrued taxes 16,624 3,989
Accrued liabilities 8,736 9,384
Deferred revenue 19,786 5,468
Other current liabilities 3,664   7,872  
Total Current Liabilities 74,738 96,568
Long-term debt 696,000 559,000
Other long-term liabilities and deferred credits 5,461   6,478  
Total Long-term Liabilities 701,461 565,478
Commitments and Contingencies
Equity:
Common unitholders (60,576,357 and 32,834,105 units issued and outstanding at September 30, 2015 and December 31, 2014, respectively) 1,625,516 800,333
Subordinated unitholder (0 and 16,200,000 units issued and outstanding at September 30, 2015 and December 31, 2014, respectively) 274,133
General partner (834,391 units issued and outstanding at September 30, 2015 and December 31, 2014) (352,478 ) (35,743 )
Total Partners’ Equity 1,273,038 1,038,723
Noncontrolling interests $ 452,040   $ 756,428  
Total Equity $ 1,725,078   $ 1,795,151  
Total Liabilities and Equity $ 2,501,277   $ 2,457,197  
 
       
TALLGRASS ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 

Three Months Ended
September 30,

Nine Months Ended
September 30,

2015   2014     2015   2014
(in thousands, except per unit amounts)
Revenues:    
Sales of natural gas, NGLs, and crude oil $ 20,252 $ 49,130 $ 62,132 $ 141,887
Natural gas transportation services 29,431 30,745 90,620 95,418
Crude oil transportation services 81,928 206,331
Processing and other revenues 6,557   10,078   26,730   24,747  
Total Revenues 138,168   89,953   385,813   262,052  
Operating Costs and Expenses:
Cost of sales (exclusive of depreciation and amortization shown below) 18,186 45,767 54,959 131,187
Cost of transportation services (exclusive of depreciation and amortization shown below) 14,862 3,329 39,069 13,734
Operations and maintenance 14,071 9,961 36,054 28,029
Depreciation and amortization 20,802 10,071 61,762 27,905
General and administrative 11,807 7,448 37,947 21,221
Taxes, other than income taxes 5,521 1,797 16,547 5,392
Loss on sale of assets     4,483    
Total Operating Costs and Expenses 85,249   78,373   250,821   227,468  
Operating Income 52,919   11,580   134,992   34,584  
Other (Expense) Income:
Interest expense, net (3,871 ) (1,058 ) (11,204 ) (4,492 )
Gain on remeasurement of unconsolidated investment 9,388
Equity in earnings of unconsolidated investment 717
Other income, net 502   731   1,983   2,400  
Total Other (Expense) Income (3,369 ) (327 ) (9,221 ) 8,013  
Net income 49,550 11,253 125,771 42,597
Net (income) loss attributable to noncontrolling interests (6,871 ) 191   (5,874 ) 1,256  
Net income attributable to partners $ 42,679   $ 11,444   $ 119,897   $ 43,853  
Allocation of income to the limited partners:
Net income attributable to partners $ 42,679 $ 11,444 $ 119,897 $ 43,853
Predecessor operations interest in net loss (income) 1,134 (1,508 )
General partner interest in net income (12,146 ) (1,435 ) (30,614 ) (2,912 )
Common and subordinated unitholders' interest in net income 30,533   11,143   89,283   39,433  
Basic net income per common and subordinated unit $ 0.50   $ 0.24   $ 1.54   $ 0.92  
Diluted net income per common and subordinated unit $ 0.50   $ 0.23   $ 1.52   $ 0.90  
Basic average number of common and subordinated units outstanding 60,576 46,855 57,917 42,770
Diluted average number of common and subordinated units outstanding 61,536 47,948 58,884 43,771
 
   
TALLGRASS ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Nine Months Ended September 30,
2015   2014
(in thousands)
Cash Flows from Operating Activities:
Net income $ 125,771 $ 42,597
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization 64,624 28,946
Gain on remeasurement of unconsolidated investment (9,388 )
Noncash compensation expense 3,988 3,724
Loss on sale of assets 4,483
Changes in components of working capital:
Accounts receivable and other (11,538 ) 2,592
Gas imbalances 388 1,392
Inventories (5,265 ) (4,661 )
Accounts payable and accrued liabilities 6,786 (14,990 )
Deferred revenue 13,995 1,459
Other operating, net (5,748 ) (4,427 )
Net Cash Provided by Operating Activities 197,484   47,244  
Cash Flows from Investing Activities:
Capital expenditures (65,146 ) (642,216 )
Acquisition of Pony Express membership interest (700,000 ) (27,000 )
Acquisition of Trailblazer (150,000 )
Acquisition of additional equity interests in Water Solutions (7,600 )
Issuance of related party loan (270,000 )
Other investing, net (4,625 ) (2,268 )
Net Cash Used in Investing Activities (769,771 ) (1,099,084 )
Cash Flows from Financing Activities:
Proceeds from public offering, net of offering costs 551,243 319,588
Borrowings under revolving credit facility, net 137,000 433,000
Contributions from Predecessor Entities, net 312,125
Distributions to unitholders (113,260 ) (46,454 )
Contribution from Tallgrass Development, LP 27,488
Contributions from noncontrolling interests 19,303 5,429
Other financing, net (4,161 ) 1,549  
Net Cash Provided by Financing Activities 590,125   1,052,725  
Net Change in Cash and Cash Equivalents 17,838 885
Cash and Cash Equivalents, beginning of period 867    
Cash and Cash Equivalents, end of period $ 18,705   $ 885  
 

Tallgrass Energy GP, LP Financial Statements

       
TALLGRASS ENERGY GP, LP
CONDENSED CONSOLIDATING BALANCE SHEETS
 
September 30, 2015 December 31, 2014
TEP  

Consolidating
Adjustments (1)

  TEGP TEP  

Consolidating
Adjustments (1)

  TEGP
(in thousands) (in thousands)
ASSETS
Current Assets:
Cash and cash equivalents $ 18,705 $ 304 $ 19,009 $ 867 $ $ 867
Accounts receivable, net 52,926 52,926 39,768 39,768
Receivable from related party 73,393 73,393
Gas imbalances 862 862 2,442 2,442
Inventories 14,132 14,132 13,045 13,045
Derivative assets at fair value 218 218
Prepayments and other current assets 3,678     3,678   2,766     2,766
Total Current Assets 90,521 304 90,825 132,281 132,281
Property, plant and equipment, net 1,948,821 1,948,821 1,853,081 1,853,081
Goodwill 343,288 343,288 343,288 343,288
Intangible asset, net 98,502 98,502 104,538 104,538
Deferred tax asset 441,528 441,528
Deferred financing costs, net 4,496 1,618 6,114 5,528 5,528
Deferred charges and other assets 15,649     15,649   18,481     18,481
Total Assets $ 2,501,277   $ 443,450   $ 2,944,727   $ 2,457,197   $   $ 2,457,197
LIABILITIES AND PARTNERS’ EQUITY
Current Liabilities:
Accounts payable $ 19,627 $ $ 19,627 $ 62,329 $ $ 62,329
Accounts payable to related parties 3,672 (91 ) 3,581 3,915 3,915
Gas imbalances 2,629 2,629 3,611 3,611
Accrued taxes 16,624 16,624 3,989 3,989
Accrued liabilities 8,736 188 8,924 9,384 9,384
Deferred revenue 19,786 19,786 5,468 5,468
Other current liabilities 3,664     3,664   7,872     7,872
Total Current Liabilities 74,738 97 74,835 96,568 96,568
Long-term debt 696,000 148,000 844,000 559,000 559,000
Other long-term liabilities and deferred credits 5,461     5,461   6,478     6,478
Total Long-term Liabilities 701,461 148,000 849,461 565,478 565,478
Equity:
Total Partners' Capital 1,273,038 (862,132 ) 410,906 1,038,723 (891,857 ) 146,866
Noncontrolling interests 452,040   1,157,485   1,609,525   756,428   891,857   1,648,285
Total Equity $ 1,725,078   $ 295,353   $ 2,020,431   $ 1,795,151   $   $ 1,795,151
Total Liabilities and Equity $ 2,501,277   $ 443,450   $ 2,944,727   $ 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 September 30, 2015 Three Months Ended September 30, 2014
TEP  

Consolidating
Adjustments (1)

  TEGP TEP  

Consolidating
Adjustments (1)

  TEGP
(in thousands) (in thousands)
Revenues:
Sales of natural gas, NGLs, and crude oil $ 20,252 $ $ 20,252 $ 49,130 $ $ 49,130
Natural gas transportation services 29,431 29,431 30,745 30,745
Crude oil transportation services 81,928 81,928
Processing and other revenues 6,557     6,557   10,078     10,078  
Total Revenues 138,168     138,168   89,953     89,953  
Operating Costs and Expenses:
Cost of sales (exclusive of depreciation and amortization shown below) 18,186 18,186 45,767 45,767
Cost of transportation services (exclusive of depreciation and amortization shown below) 14,862 14,862 3,329 3,329
Operations and maintenance 14,071 14,071 9,961 9,961
Depreciation and amortization 20,802 20,802 10,071 10,071
General and administrative 11,807 514 12,321 7,448 7,448
Taxes, other than income taxes 5,521 5,521 1,797 1,797
Loss on sale of assets            
Total Operating Costs and Expenses 85,249   514   85,763   78,373     78,373  
Operating Income 52,919   (514 ) 52,405   11,580     11,580  
Other (Expense) Income:
Interest expense, net (3,871 ) (1,111 ) (4,982 ) (1,058 ) (1,058 )
Other income, net 502     502   731     731  
Total Other (Expense) Income (3,369 ) (1,111 ) (4,480 ) (327 )   (327 )
Net income before tax 49,550 (1,625 ) 47,925 11,253 11,253
Deferred income tax expense   (1,828 ) (1,828 )      
Net income 49,550 (3,453 ) 46,097 11,253 11,253
less: Net income attributable to noncontrolling interests (6,871 ) (34,803 ) (41,674 ) 191   (9,814 ) (9,623 )
Net income attributable to TEGP $ 42,679   $ (38,256 ) $ 4,423   $ 11,444   $ (9,814 ) $ 1,630  
Basic net income per Class A share $ 0.09  
Diluted net income per Class A share $ 0.09  
Basic average number of Class A shares outstanding 47,725
Diluted average number of Class A shares outstanding 47,808
 

(1) Represents the aggregate consolidating adjustments necessary to produce consolidated financial statements for TEGP.

 
       
Nine Months Ended September 30, 2015 Nine Months Ended September 30, 2014
TEP  

Consolidating
Adjustments (1)

  TEGP TEP  

Consolidating
Adjustments (1)

  TEGP
(in thousands) (in thousands)
Revenues:
Sales of natural gas, NGLs, and crude oil $ 62,132 $ $ 62,132 $ 141,887 $ $ 141,887
Natural gas transportation services 90,620 90,620 95,418 95,418
Crude oil transportation services 206,331 206,331
Processing and other revenues 26,730     26,730   24,747     24,747  
Total Revenues 385,813     385,813   262,052     262,052  
Operating Costs and Expenses:
Cost of sales (exclusive of depreciation and amortization shown below) 54,959 54,959 131,187 131,187
Cost of transportation services (exclusive of depreciation and amortization shown below) 39,069 39,069 13,734 13,734
Operations and maintenance 36,054 36,054 28,029 28,029
Depreciation and amortization 61,762 61,762 27,905 27,905
General and administrative 37,947 764 38,711 21,221 21,221
Taxes, other than income taxes 16,547 16,547 5,392 5,392
Loss on sale of assets 4,483     4,483        
Total Operating Costs and Expenses 250,821   764   251,585   227,468     227,468  
Operating Income 134,992   (764 ) 134,228   34,584     34,584  
Other (Expense) Income:
Interest expense, net (11,204 ) (1,697 ) (12,901 ) (4,492 ) (4,492 )
Gain on remeasurement of unconsolidated investment 9,388 9,388
Equity in earnings of unconsolidated investment 717 717
Other income, net 1,983     1,983   2,400     2,400  
Total Other (Expense) Income (9,221 ) (1,697 ) (10,918 ) 8,013     8,013  
Net income before tax 125,771 (2,461 ) 123,310 42,597 42,597
Deferred income tax expense   (3,600 ) (3,600 )      
Net income 125,771 (6,061 ) 119,710 42,597 42,597
less: Net income attributable to noncontrolling interests (5,874 ) (99,557 ) (105,431 ) 1,256   (37,153 ) (35,897 )
Net income attributable to TEGP $ 119,897   $ (105,618 ) $ 14,279   $ 43,853   $ (37,153 ) $ 6,700  
Allocation of income for the six months ended September 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 September 30, 2015 6,886  
Basic net income per Class A share $ 0.14  
Diluted net income per Class A share $ 0.14  
Basic average number of Class A shares outstanding 47,725
Diluted average number of Class A shares outstanding 47,812
 

(1) Represents the aggregate consolidating adjustments necessary to produce consolidated financial statements for TEGP.

 

Tallgrass Energy
Investor and Financial Inquiries:
Nate Lien
913-928-6012
investor.relations@tallgrassenergylp.com
or
Media and Trade Inquiries:
Phyllis Hammond
913-928-6014
media.relations@tallgrassenergylp.com


Source: Business Wire (November 4, 2015 - 4:15 PM EST)

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