CANONSBURG, Pa., Nov. 2, 2017 /PRNewswire/ -- Rice
Midstream Partners LP (NYSE: RMP) ("RMP" or the "Partnership")
today reported third quarter 2017 financial and operating results.
Highlights include:
- Gathering throughput averaged 1,483 MDth/d, a 9% increase from
second quarter 2017
- Compression throughput averaged 1,027 MDth/d, a 15% increase
from second quarter 2017
- Freshwater delivery volumes were 577 MMGal, a 36% increase over
second quarter 2017
- Net income attributable to limited partners of $49.5 million, or $0.48 per unit
- Adjusted EBITDA(1) of $65.2
million, a 17% increase relative to second quarter 2017
- Distributable cash flow ("DCF")(1) of $58.7 million, resulting in DCF coverage
ratio(1) of 1.91x
- Raised third quarter distribution to $0.2814 per common unit, an increase of 19% over
the third quarter 2016
- Exited the quarter with low leverage(1) of 1.0x
Commenting on the results, Daniel J. Rice IV, Chief
Executive Officer, said, "Our team delivered another exceptional
quarter of strong results driven by solid gathering and compression
volumes and significant growth from our freshwater delivery
business. This seamless execution underpins our rapid distribution
growth of 19% over the prior year quarter and achievement of 1.91
times distributable cash flow coverage."
1.
|
Please see
Supplemental "Non-GAAP Financial Measures" for a description of
Adjusted EBITDA, distributable cash flow, DCF coverage ratio and
related reconciliations to the comparable GAAP financial measures.
Leverage is defined as the ratio of net debt to last twelve months
Adjusted EBITDA.
|
Proposed Merger of Rice Energy with EQT
Corporation
In light of Rice Energy's previously announced merger
with EQT Corporation ("EQT"), Rice Energy and RMP
discontinued providing guidance and long-term outlook
information regarding results of operations and distribution growth
through 2023. In addition, investors are cautioned not to rely on
historical forward-looking statements regarding guidance
and long-term outlook information, which forward-looking
statements spoke only as of the date provided and were subject to
the specific risks and uncertainties that accompanied such
forward-looking statements.
In order to provide more clarity to our investors, we are
reiterating the following analysis to demonstrate the impact of the
elimination of the drop down opportunities for RMP on its
previously published (and discontinued) long-term outlook. Based
upon Rice Energy's previously published development plan, the
elimination of future drop down transactions would have resulted in
an outlook that would have targeted 20% distribution growth, DCF
coverage of approximately 1.4x and leverage of less than 2.5x
through 2019.
As mentioned above, a significant number of factors that are
outside of our control will ultimately determine the long-term
distributions of RMP including, among other things, the development
program to be adopted by EQT. As
such, investors are cautioned that the above analysis should not be
construed as guidance or relied upon as an expectation that such
levels will be achieved.
Third Quarter 2017 Results
|
(in thousands,
except volumes)
|
|
Three Months
Ended
September 30, 2017
|
|
Nine Months
Ended
September 30, 2017
|
|
Operating volumes
(MDth/d)
|
|
|
|
|
Gathering
volumes
|
|
|
|
|
Affiliate
|
|
1,168
|
|
|
1,106
|
|
Third-party
|
|
315
|
|
|
254
|
|
Total
|
|
1,483
|
|
|
1,360
|
|
|
|
|
|
|
Compression
volumes
|
|
|
|
|
Affiliate
|
|
712
|
|
|
661
|
|
Third-party
|
|
315
|
|
|
255
|
|
Total
|
|
1,027
|
|
|
916
|
|
|
|
|
|
|
Water services assets
(MMGal)
|
|
|
|
|
Pennsylvania
Water
|
|
279
|
|
|
652
|
|
Ohio Water
|
|
298
|
|
|
714
|
|
Total
|
|
577
|
|
|
1,366
|
|
|
|
|
|
|
Operating
revenues
|
|
|
|
|
Gathering
|
|
$
|
47,068
|
|
|
$
|
123,601
|
|
Compression
|
|
$
|
7,266
|
|
|
$
|
19,318
|
|
Water
|
|
$
|
27,367
|
|
|
$
|
73,909
|
|
Total
|
|
$
|
81,701
|
|
|
$
|
216,828
|
|
|
|
|
|
|
Total operating
expenses
|
|
$
|
27,054
|
|
|
$
|
74,571
|
|
Operating
income
|
|
$
|
54,647
|
|
|
$
|
142,257
|
|
|
|
|
|
|
Net income
attributable to limited partners
|
|
$
|
49,505
|
|
|
$
|
128,350
|
|
Net income per
limited partner unit:
|
|
|
|
|
Common units (basic
and diluted)
|
|
$
|
0.48
|
|
|
$
|
1.25
|
|
Subordinated units
(basic and diluted)
|
|
$
|
0.48
|
|
|
$
|
1.25
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
|
65,190
|
|
|
$
|
169,567
|
|
DCF(1)
|
|
$
|
58,661
|
|
|
$
|
150,411
|
|
DCF coverage
ratio(1)
|
|
1.91
|
|
|
1.71
|
|
|
|
|
|
|
Capital
expenditures incurred (in millions)
|
|
|
|
|
Gas gathering and
compression
|
|
$
|
59
|
|
|
$
|
128
|
|
Water services
assets
|
|
$
|
4
|
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
|
Financial position
(in millions)
|
|
As of September
30, 2017
|
Liquidity
|
|
$
|
630
|
|
Cash and cash
equivalents
|
|
$
|
2
|
|
Revolving credit
facility
|
|
$
|
222
|
|
Leverage(1)
|
|
1.0
|
|
Third quarter gathering throughput averaged 1,483 MDth/d,
consisting of 1,168 MDth/d affiliate volumes and 315 MDth/d third
party volumes. Freshwater delivery volumes were 577 MMgal,
consisting of 431 MMgal affiliate volumes and 146 MMgal third party
volumes, driving significant growth as a result of accelerated
completion activity. Higher than anticipated freshwater delivery
volumes and lower operating expenses contributed to increases in
Adjusted EBITDA(1) to $65.2 million and
DCF(1) to $58.7
million.
As of September 30, 2017, RMP's
concentrated gathering and compression acreage dedication in
the Marcellus Shale core covered approximately 243,000
acres in Washington and Greene Counties with
approximately 34,000 acres dedicated from high quality, third party
customers.
1.
|
Please see
Supplemental "Non-GAAP Financial Measures" for a description of
Adjusted EBITDA, distributable cash flow, DCF coverage ratio and
related reconciliations to the comparable GAAP financial measures.
Leverage is defined as the ratio of net debt to last twelve months
Adjusted EBITDA.
|
Quarterly Cash Distribution
On October 20, 2017, we declared a quarterly distribution
of $0.2814 per unit for the third
quarter 2017, an increase of $0.0103
per unit, or 4%, relative to second quarter 2017. The distribution
will be payable on November 16, 2017 to unitholders of record
as of November 7, 2017.
About Rice Midstream Partners
Rice Midstream Partners LP is a fee-based, growth-oriented
limited partnership formed by Rice Energy Inc. (NYSE: RICE) to own,
operate, develop and acquire midstream assets in the Appalachian
basin. RMP provides midstream services to Rice Energy and
third-party companies through its natural gas gathering,
compression and water assets in the rapidly developing dry gas
cores of the Marcellus and Utica Shales. For more information,
please visit www.ricemidstream.com.
Forward Looking Statements
This release includes forward-looking statements that are
subject to a number of risks and uncertainties, many of which are
beyond our control. All statements, other than historical facts
included in this release, that address activities, events or
developments that we expect or anticipate will or may occur in the
future, including such things as, forecasted gathering volumes,
revenues, Adjusted EBITDA, distribution growth, and distributable
cash flow, Rice Energy's targeted production growth and other
operational results, the terms, timing and completion of any
acquisitions or divestitures, the timing of completion of midstream
projects, future capital expenditures (including the amount and
nature thereof), business strategy and measures to implement
strategy, competitive strengths, goals, expansion and growth of our
business and operations, plans, market conditions, references to
future success, references to intentions as to future matters and
other such matters are forward-looking statements. All
forward-looking statements speak only as of the date of this
release. Although we believe that the plans, intentions and
expectations reflected in or suggested by the forward-looking
statements are reasonable, there is no assurance that these plans,
intentions or expectations will be achieved. Therefore, actual
outcomes and results could materially differ from what is
expressed, implied or forecast in such statements.
We caution you that these forward-looking statements are subject
to risks and uncertainties, most of which are difficult to predict
and many of which are beyond our control, incident to our gathering
and compression and water services businesses. These risks include,
but are not limited to: commodity price volatility; inflation;
environmental risks; regulatory changes; the uncertainty inherent
in projecting future throughput volumes, cash flow and access to
capital; and the timing of development expenditures of Rice
Energy or our other customers. Information concerning these
and other factors can be found in our filings with
the Securities and Exchange Commission (the "SEC"), including
our Forms 10-K, 10-Q and 8-K. Consequently, all of the
forward-looking statements made in this news release are qualified
by these cautionary statements and there can be no assurances that
the actual results or developments anticipated by us will be
realized, or even if realized, that they will have the expected
consequences to or effects on us, our business or operations. We
have no intention, and disclaim any obligation, to update or revise
any forward-looking statements, whether as a result of new
information, future results or otherwise.
This release does not constitute an offer to buy or sell or the
solicitation of an offer to buy or sell any securities or a
solicitation of any vote or approval. This communication relates to
a proposed business combination between EQT Corporation ("EQT") and
Rice.
In connection with the proposed transaction, EQT has filed with
the SEC a registration statement on Form S-4 on July 27, 2017, that includes a joint proxy
statement of EQT and Rice and also constitutes a prospectus of EQT,
and has filed a definitive proxy statement on October 12, 2017. Each of EQT and Rice also plan
to file other relevant documents with the SEC regarding the
proposed transactions. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section
10 of the U.S. Securities Act of 1933, as amended. The definitive
joint proxy statement/prospectus(es) for EQT and/or Rice will be
mailed to shareholders of EQT and/or Rice, as applicable.
INVESTORS AND SECURITY HOLDERS OF EQT AND RICE ARE URGED TO READ
THE PROXY STATEMENT(S), REGISTRATION STATEMENT(S), PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE
SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free
copies of these documents (if and when available) and other
documents containing important information about EQT and Rice, once
such documents are filed with the SEC through the website
maintained by the SEC at www.sec.gov. Copies of the documents filed
with the SEC by EQT will be available free of charge on EQT's
website at www.eqt.com or by directing a request to Investor
Relations, EQT Corporation, EQT Plaza, 625 Liberty Avenue,
Pittsburgh, Pennsylvania
15222-3111, Tel. No. (412) 553-5700. Copies of the documents filed
with the SEC by Rice will be available free of charge on Rice's
website at www.riceenergy.com or by directing a request to Investor
Relations, Rice Energy Inc., 2200 Rice Drive, Canonsburg, Pennsylvania 15317, Tel. No. (724)
271-7200.
EQT, Rice and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information about the directors and executive officers of Rice is
set forth in Rice's proxy statement for its 2017 annual meeting of
shareholders, which was filed with the SEC on April 17, 2017. Information about the directors
and executive officers of EQT is set forth in its proxy statement
for its 2017 annual meeting, which was filed with the SEC on
March 6, 2017. These documents may be
obtained free of charge from the sources indicated above.
Other information regarding the participants in the proxy
solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the joint proxy statement/prospectus and other relevant materials
to be filed with the SEC when such materials become available.
Investors should read the joint proxy statement/prospectus
carefully when it becomes available before making any voting or
investment decisions. You may obtain free copies of these documents
from EQT or Rice using the sources indicated above.
Rice Midstream
Partners LP
|
Statements of
Operations
|
(Unaudited)
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(in thousands,
except unit data)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Operating
revenues:
|
|
|
|
|
|
|
|
|
Affiliate
|
|
$
|
63,599
|
|
|
$
|
28,260
|
|
|
$
|
178,870
|
|
|
$
|
105,267
|
|
Third-party
|
|
18,102
|
|
|
12,807
|
|
|
37,958
|
|
|
36,890
|
|
Total operating
revenues
|
|
81,701
|
|
|
41,067
|
|
|
216,828
|
|
|
142,157
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Operation and
maintenance expense
|
|
10,259
|
|
|
4,559
|
|
|
28,139
|
|
|
17,292
|
|
Equity compensation
expense
|
|
169
|
|
|
609
|
|
|
429
|
|
|
2,728
|
|
General and
administrative expense
|
|
6,265
|
|
|
4,373
|
|
|
19,043
|
|
|
12,736
|
|
Depreciation
expense
|
|
7,667
|
|
|
5,489
|
|
|
22,831
|
|
|
17,714
|
|
Acquisition
costs
|
|
35
|
|
|
—
|
|
|
529
|
|
|
73
|
|
Amortization of
intangible assets
|
|
412
|
|
|
411
|
|
|
1,220
|
|
|
1,222
|
|
Other
expense
|
|
2,247
|
|
|
90
|
|
|
2,380
|
|
|
239
|
|
Total operating
expenses
|
|
27,054
|
|
|
15,531
|
|
|
74,571
|
|
|
52,004
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
54,647
|
|
|
25,536
|
|
|
142,257
|
|
|
90,153
|
|
Other
income
|
|
13
|
|
|
—
|
|
|
54
|
|
|
—
|
|
Interest
expense
|
|
(2,154)
|
|
|
(402)
|
|
|
(6,031)
|
|
|
(2,369)
|
|
Amortization of
deferred finance costs
|
|
(1,052)
|
|
|
(145)
|
|
|
(3,151)
|
|
|
(433)
|
|
Net income
|
|
$
|
51,454
|
|
|
$
|
24,989
|
|
|
$
|
133,129
|
|
|
$
|
87,351
|
|
|
|
|
|
|
|
|
|
|
Calculation of
limited partner interest in net income:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
51,454
|
|
|
$
|
24,989
|
|
|
$
|
133,129
|
|
|
$
|
87,351
|
|
Less: General partner
interest in net income attributable to incentive distribution
rights
|
|
1,949
|
|
|
427
|
|
|
4,779
|
|
|
540
|
|
Net income
attributable to limited partners
|
|
$
|
49,505
|
|
|
$
|
24,562
|
|
|
$
|
128,350
|
|
|
$
|
86,811
|
|
|
|
|
|
|
|
|
|
|
Weighted average
limited partner units (in millions)
|
|
|
|
|
|
|
|
|
Common units (basic
and diluted)
|
|
73.5
|
|
|
52.4
|
|
|
73.5
|
|
|
46.4
|
|
Subordinated units
(basic and diluted)
|
|
28.8
|
|
|
28.8
|
|
|
28.8
|
|
|
28.8
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to RMP per limited partner unit
|
|
|
|
|
|
|
|
|
Common units
(basic)
|
|
$
|
0.48
|
|
|
$
|
0.30
|
|
|
$
|
1.25
|
|
|
$
|
1.15
|
|
Common units
(diluted)
|
|
$
|
0.48
|
|
|
$
|
0.30
|
|
|
$
|
1.25
|
|
|
$
|
1.14
|
|
Subordinated units
(basic and diluted)
|
|
$
|
0.48
|
|
|
$
|
0.30
|
|
|
$
|
1.25
|
|
|
$
|
1.17
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
|
$
|
65,190
|
|
|
$
|
32,135
|
|
|
$
|
169,567
|
|
|
$
|
112,129
|
|
Distributable cash
flow (2)
|
|
$
|
58,661
|
|
|
$
|
28,933
|
|
|
$
|
150,411
|
|
|
$
|
101,360
|
|
|
|
|
|
|
|
|
|
|
Quarterly
distribution per unit
|
|
$
|
0.2814
|
|
|
$
|
0.2370
|
|
|
$
|
0.8133
|
|
|
$
|
0.6705
|
|
|
|
|
|
|
|
|
|
|
Distributions
declared:
|
|
|
|
|
|
|
|
|
Limited partner units
- Public
|
|
$
|
20,696
|
|
|
$
|
17,387
|
|
|
$
|
59,807
|
|
|
$
|
37,955
|
|
Limited partner units
- GP Holdings
|
|
8,092
|
|
|
6,816
|
|
|
23,388
|
|
|
19,282
|
|
Incentive distribution
rights - General Partner
|
|
1,949
|
|
|
427
|
|
|
4,779
|
|
|
540
|
|
Total distributions
declared
|
|
$
|
30,737
|
|
|
$
|
24,630
|
|
|
$
|
87,974
|
|
|
$
|
57,777
|
|
|
|
|
|
|
|
|
|
|
DCF coverage ratio
(3)
|
|
1.91
|
|
|
1.17
|
|
|
1.71
|
|
|
1.75
|
|
|
|
1.
|
We define Adjusted
EBITDA as net income (loss) before interest expense, depreciation
expense, amortization expense, non-cash equity compensation
expense, amortization of deferred financing costs and other
non-recurring items. Please read Supplemental "Non-GAAP Financial
Measures."
|
2.
|
We define
distributable cash flow as Adjusted EBITDA less interest expense
and estimated maintenance capital expenditures. Please read
Supplemental "Non-GAAP Financial Measures."
|
3.
|
We define DCF
coverage ratio as distributable cash flow divided by total
distributions declared. Please read Supplemental "Non-GAAP
Financial Measures."
|
Rice Midstream
Partners LP
|
Segment Results of
Operations
|
(Unaudited)
|
|
Gathering and
Compression Segment
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(in
thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Gathering volumes
(MDth/d):
|
|
|
|
|
|
|
|
Affiliate
|
1,168
|
|
|
647
|
|
|
1,106
|
|
|
648
|
|
Third-party
|
315
|
|
|
310
|
|
|
254
|
|
|
261
|
|
Total gathering
volumes
|
1,483
|
|
|
957
|
|
|
1,360
|
|
|
909
|
|
|
|
|
|
|
|
|
|
Compression
volumes (MDth/d):
|
|
|
|
|
|
|
|
Affiliate
|
712
|
|
|
435
|
|
|
661
|
|
|
258
|
|
Third-party
|
315
|
|
|
310
|
|
|
255
|
|
|
230
|
|
Total compression
volumes
|
1,027
|
|
|
745
|
|
|
916
|
|
|
488
|
|
|
|
|
|
|
|
|
|
Operating
results:
|
|
|
|
|
|
|
|
Operating
revenues:
|
|
|
|
|
|
|
|
Affiliate
|
$
|
39,774
|
|
|
$
|
20,696
|
|
|
$
|
108,890
|
|
|
$
|
57,060
|
|
Third-party
|
14,560
|
|
|
12,807
|
|
|
34,029
|
|
|
33,279
|
|
Total operating
revenues
|
54,334
|
|
|
33,503
|
|
|
142,919
|
|
|
90,339
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Operation and
maintenance expense
|
4,029
|
|
|
1,938
|
|
|
10,262
|
|
|
5,090
|
|
Equity compensation
expense
|
142
|
|
|
486
|
|
|
363
|
|
|
2,142
|
|
General and
administrative expense
|
5,361
|
|
|
3,592
|
|
|
16,165
|
|
|
10,313
|
|
Depreciation
expense
|
3,348
|
|
|
2,406
|
|
|
9,855
|
|
|
7,026
|
|
Acquisition
costs
|
35
|
|
|
—
|
|
|
529
|
|
|
73
|
|
Amortization of
intangible assets
|
412
|
|
|
411
|
|
|
1,220
|
|
|
1,222
|
|
Other
expense
|
2,247
|
|
|
—
|
|
|
2,360
|
|
|
149
|
|
Total operating
expenses
|
15,574
|
|
|
8,833
|
|
|
40,754
|
|
|
26,015
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$
|
38,760
|
|
|
$
|
24,670
|
|
|
$
|
102,165
|
|
|
$
|
64,324
|
|
|
|
Water Services
Segment
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(in
thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Water services
volumes (MMGal):
|
|
|
|
|
|
|
|
Affiliate
|
431
|
|
|
135
|
|
|
1,204
|
|
|
800
|
|
Third-party
|
146
|
|
|
—
|
|
|
162
|
|
|
132
|
|
Total water services
volumes
|
577
|
|
|
135
|
|
|
1,366
|
|
|
932
|
|
|
|
|
|
|
|
|
|
Operating
results:
|
|
|
|
|
|
|
|
Operating
revenues:
|
|
|
|
|
|
|
|
Affiliate
|
$
|
23,825
|
|
|
$
|
7,564
|
|
|
$
|
69,980
|
|
|
$
|
48,207
|
|
Third-party
|
3,542
|
|
|
—
|
|
|
3,929
|
|
|
3,611
|
|
Total operating
revenues
|
27,367
|
|
|
7,564
|
|
|
73,909
|
|
|
51,818
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Operation and
maintenance expense
|
6,230
|
|
|
2,621
|
|
|
17,877
|
|
|
12,202
|
|
Equity compensation
expense
|
27
|
|
|
123
|
|
|
66
|
|
|
586
|
|
General and
administrative expense
|
904
|
|
|
781
|
|
|
2,878
|
|
|
2,423
|
|
Depreciation
expense
|
4,319
|
|
|
3,083
|
|
|
12,976
|
|
|
10,688
|
|
Other
expense
|
—
|
|
|
90
|
|
|
20
|
|
|
90
|
|
Total operating
expenses
|
11,480
|
|
|
6,698
|
|
|
33,817
|
|
|
25,989
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$
|
15,887
|
|
|
$
|
866
|
|
|
$
|
40,092
|
|
|
$
|
25,829
|
|
Rice Midstream Partners
LP
Supplemental Non-GAAP Financial
Measures
(Unaudited)
Adjusted EBITDA, distributable cash flow and DCF coverage ratio
are non-GAAP supplemental financial measures that management and
external users of our consolidated financial statements, such as
industry analysts, investors, lenders and rating agencies, may use
to assess the financial performance of our assets, without regard
to financing methods, capital structure or historical cost basis;
our operating performance and return on capital as compared to
other companies in the midstream energy sector, without regard to
historical cost basis or, in the case of Adjusted EBITDA, financing
or capital structure; our ability to incur and service debt and
fund capital expenditures; the ability of our assets to generate
sufficient cash flow to make distributions to our unitholders; and
the viability of acquisitions and other capital expenditure
projects and the returns on investment of various investment
opportunities.
We define Adjusted EBITDA as net income (loss) before interest
expense, depreciation expense, amortization of intangible assets,
non-cash equity compensation expense, amortization of deferred
financing costs and other non-recurring items. Adjusted EBITDA is
not a measure of net income as determined by GAAP. We define
distributable cash flow as Adjusted EBITDA less cash interest
expense and estimated maintenance capital expenditures. We define
DCF coverage ratio as distributable cash flow divided by total
distributions declared. Distributable cash flow does not reflect
changes in working capital balances and is not a presentation made
in accordance with GAAP.
We believe that the presentation of Adjusted EBITDA,
distributable cash flow and DCF coverage ratio will provide useful
information to investors in assessing our financial condition and
results of operations. The GAAP measure most directly comparable to
Adjusted EBITDA and distributable cash flow is net income. Our
non-GAAP financial measures of Adjusted EBITDA and distributable
cash flow should not be considered as alternatives to GAAP net
income. Each of Adjusted EBITDA and distributable cash flow has
important limitations as an analytical tool because they exclude
some but not all items that affect net income. You should not
consider Adjusted EBITDA, distributable cash flow or DCF coverage
ratio in isolation or as a substitute for analysis of our results
as reported under GAAP. Because Adjusted EBITDA, distributable cash
flow and DCF coverage ratio may be defined differently by other
companies in our industry, our definitions of Adjusted EBITDA,
distributable cash flow and DCF coverage ratio may not be
comparable to similarly titled measures of other companies, thereby
diminishing its utility.
(in
thousands)
|
Three Months
Ended
September 30, 2017
|
|
Nine Months
Ended
September 30,
2017
|
|
Twelve Months
Ended
September 30,
2017
|
|
Reconciliation of
Net Income to Adjusted EBITDA and DCF:
|
|
|
|
|
|
|
Net income
|
$
|
51,454
|
|
|
$
|
133,129
|
|
|
$
|
167,388
|
|
|
Interest
expense
|
2,154
|
|
|
6,031
|
|
|
7,593
|
|
|
Acquisition
costs
|
35
|
|
|
529
|
|
|
581
|
|
|
Depreciation
expense
|
7,667
|
|
|
22,831
|
|
|
30,287
|
|
|
Amortization of
intangible assets
|
412
|
|
|
1,220
|
|
|
1,632
|
|
|
Non-cash equity
compensation expense
|
169
|
|
|
429
|
|
|
574
|
|
|
Amortization of
deferred finance costs
|
1,052
|
|
|
3,151
|
|
|
4,197
|
|
|
Other
expense
|
2,247
|
|
|
2,247
|
|
|
3,539
|
|
|
Adjusted
EBITDA
|
$
|
65,190
|
|
|
$
|
169,567
|
|
|
$
|
215,791
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
65,190
|
|
|
$
|
169,567
|
|
|
$
|
215,791
|
|
|
Cash interest
expense
|
(2,154)
|
|
|
(6,031)
|
|
|
(7,593)
|
|
|
Estimated maintenance
capital expenditures
|
(4,375)
|
|
|
(13,125)
|
|
|
(15,925)
|
|
|
Distributable cash
flow
|
$
|
58,661
|
|
|
$
|
150,411
|
|
|
$
|
192,273
|
|
|
|
|
|
|
|
|
|
Total distributions
declared
|
$
|
30,737
|
|
|
$
|
87,974
|
|
|
$
|
114,483
|
|
|
DCF coverage
ratio
|
1.91
|
|
|
1.71
|
|
|
1.68
|
|
|
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SOURCE Rice Midstream Partners LP