Penn Virginia GP Holdings, L.P. Announces Third Quarter 2010 Results and Declares Quarterly Distribution
RADNOR, Pa., Oct. 27 /PRNewswire-FirstCall/ -- Penn Virginia GP Holdings, L.P. (NYSE: PVG) today reported financial results for the three months ended September 30, 2010.
Distributable cash, a non-GAAP (generally accepted accounting principles) measure, was $15.2 million for the three months ended September 30, 2010, an increase of $0.4 million, or three percent, from the prior year quarter. Adjusted net income attributable to PVG, a non-GAAP measure that excludes the effects of the non-cash change in derivatives fair value that affects comparability to prior periods, was $12.5 million, or $0.32 per limited partner unit, as compared to $11.4 million, or $0.29 per limited partner unit, in the prior year quarter. Net income attributable to PVG was $7.3 million, or $0.19 per limited partner unit, as compared to $10.2 million, or $0.26 per limited partner unit, in the prior year quarter.
Reconciliations of distributable cash and adjusted net income to GAAP-based measures appear in the financial tables later in this release.
The Board of Directors of PVG GP, LLC, the general partner of PVG, declared a third quarter cash distribution of $0.39 per limited partner unit, payable on November 19, 2010 to unitholders of record as of November 15, 2010. The distribution equates to an annualized rate of $1.56 per unit, and represents a $0.01 per unit, or three percent, increase over the $0.38 per unit distribution paid in the same quarter of 2009.
We own the general partner, including the incentive distribution rights, and are the largest limited partner unitholder of Penn Virginia Resource Partners, L.P. (NYSE: PVR), and we report our financial results on a consolidated basis with the financial results of PVR. We currently have no separate operating activities other than those conducted by PVR and derive our cash flow solely from cash distributions received from PVR.
Financial and operational updates, as well as full-year 2010 guidance for PVR and its coal and natural resource management and natural gas midstream segments, are discussed in more detail in PVR's news release dated October 27, 2010 (please visit PVR's website, www.pvresource.com, under "For Investors" for a copy of the release).
Guidance for Full-Year 2010
See the Guidance Table included in PVR's October 27, 2010 release for guidance estimates for full-year 2010.
Third Quarter 2010 Financial and Operational Results Conference Call
A joint conference call and webcast for PVR and PVG, during which management will discuss third quarter 2010 financial and operational results, is scheduled for Thursday, October 28, 2010 at 11:00 a.m. ET. Prepared remarks by William H. Shea, Jr., Chief Executive Officer, will be followed by a question and answer period. Interested parties may participate 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 Penn Virginia Resource Partners call), or listen via webcast by logging on to our website, www.pvgpholdings.com, or PVR's website, www.pvresource.com, at least 15 minutes prior to the scheduled start of the call to download and install any necessary audio software. An on-demand replay of the conference call will be available on both websites shortly after the conclusion of the call. A telephonic replay of the call will be available through November 4 by dialing 877-344-7529 (international: 412-317-0088) and using conference playback number 445416.
Penn Virginia GP Holdings, L.P. (NYSE: PVG) is a publicly traded limited partnership which owns the general partner interest, all of the incentive distribution rights and an approximate 37 percent limited partner interest in PVR, a manager of coal and natural resource properties and related assets and the operator of a midstream natural gas gathering and processing business.
For more information about us, please visit our website at www.pvgpholdings.com. For more information about PVR, please visit its website at www.pvresource.com.
Certain statements contained herein and incorporated herein by reference to the PVR news release dated October 27, 2010 that are not descriptions of historical facts are "forward-looking" statements by PVR within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies are discussed in more detail in PVR's news release dated October 27, 2010 and 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, 2009 and our most recent Quarterly Reports on Form 10-Q. Many of the factors that will determine PVR's and, therefore, our future results are beyond the ability of management to control or predict. 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 the result of new information, future events or otherwise.
PENN VIRGINIA GP HOLDINGS, L.P. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - unaudited (dollars in thousands, except per unit data) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
September 30, |
September 30, |
|||||||
2010 |
2009 |
2010 |
2009 |
|||||
Revenues |
||||||||
Natural gas midstream |
$ 180,207 |
$ 118,443 |
$ 497,362 |
$ 348,882 |
||||
Coal royalties |
34,983 |
29,821 |
98,088 |
90,448 |
||||
Coal services |
1,975 |
1,869 |
5,976 |
5,502 |
||||
Other |
5,664 |
5,492 |
17,313 |
16,971 |
||||
Total revenues |
222,829 |
155,625 |
618,739 |
461,803 |
||||
Expenses |
||||||||
Cost of gas purchased |
151,657 |
92,355 |
415,111 |
285,129 |
||||
Operating |
11,748 |
9,836 |
32,317 |
29,296 |
||||
General and administrative |
9,029 |
8,646 |
34,367 |
26,249 |
||||
Depreciation, depletion and amortization |
18,702 |
17,851 |
54,783 |
51,971 |
||||
Total expenses |
191,136 |
128,688 |
536,578 |
392,645 |
||||
Operating income |
31,693 |
26,937 |
82,161 |
69,158 |
||||
Other income (expense) |
||||||||
Interest expense |
(10,639) |
(6,505) |
(25,368) |
(18,486) |
||||
Interest income and other |
111 |
344 |
654 |
1,020 |
||||
Derivatives |
(11,020) |
(2,810) |
(11,514) |
(12,005) |
||||
Net income |
10,145 |
17,966 |
45,933 |
39,687 |
||||
Net income attributable to noncontrolling interests |
(2,864) |
(7,794) |
(18,671) |
(14,327) |
||||
Net income attributable to Penn Virginia GP Holdings, L.P. |
$ 7,281 |
$ 10,172 |
$ 27,262 |
$ 25,360 |
||||
Net income per limited partner unit, basic and diluted |
$ 0.19 |
$ 0.26 |
$ 0.70 |
$ 0.65 |
||||
Weighted average number of units outstanding, basic and diluted (in thousands) |
39,075 |
39,075 |
39,075 |
39,075 |
||||
Other data: |
||||||||
Coal and natural resource management segment: |
||||||||
Coal royalty tons (in thousands) |
8,530 |
8,387 |
25,645 |
25,874 |
||||
Average coal royalties ($ per ton) |
$ 4.10 |
$ 3.56 |
$ 3.82 |
$ 3.50 |
||||
Natural gas midstream segment: |
||||||||
System throughput volumes (MMcf) |
36,233 |
29,811 |
93,120 |
93,433 |
||||
Gross margin (in thousands) |
$ 28,550 |
$ 26,088 |
$ 82,251 |
$ 63,753 |
||||
PENN VIRGINIA GP HOLDINGS, L.P. |
||||
CONDENSED CONSOLIDATED BALANCE SHEETS - unaudited |
||||
(in thousands) |
||||
September 30, |
December 31, |
|||
2010 |
2009 |
|||
Assets |
||||
Cash and cash equivalents |
$ 18,515 |
$ 19,314 |
||
Accounts receivable |
80,331 |
82,321 |
||
Derivative assets |
148 |
1,331 |
||
Other current assets |
8,353 |
4,816 |
||
Total current assets |
107,347 |
107,782 |
||
Property, plant and equipment, net |
932,400 |
900,844 |
||
Other long-term assets |
216,157 |
210,437 |
||
Total assets |
$ 1,255,904 |
$ 1,219,063 |
||
Liabilities and partners' capital |
||||
Accounts payable and accrued liabilities |
$ 92,722 |
$ 71,233 |
||
Deferred income |
3,531 |
3,839 |
||
Derivative liabilities |
13,430 |
11,251 |
||
Total current liabilities |
109,683 |
86,323 |
||
Derivative liabilities |
4,250 |
4,285 |
||
Other long-term liabilities |
30,402 |
22,752 |
||
PVR senior notes |
300,000 |
- |
||
PVR revolving credit facility |
365,000 |
620,100 |
||
PVG partners' capital |
219,044 |
249,696 |
||
Noncontrolling interests in PVR |
227,525 |
235,907 |
||
Total liabilities and partners' capital |
$ 1,255,904 |
$ 1,219,063 |
||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - unaudited |
||||||||
(in thousands) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
September 30, |
September 30, |
|||||||
2010 |
2009 |
2010 |
2009 |
|||||
Cash flows from operating activities |
||||||||
Net income |
$ 10,145 |
$ 17,966 |
$ 45,933 |
$ 39,687 |
||||
Adjustments to reconcile net income to |
||||||||
net cash provided by operating activities: |
||||||||
Depreciation, depletion and amortization |
18,702 |
17,851 |
54,783 |
51,971 |
||||
Commodity derivative contracts: |
||||||||
Total derivative (gains) losses included in net income |
11,020 |
3,667 |
12,604 |
14,235 |
||||
Cash receipts (payments) to settle derivatives for period |
(2,435) |
(314) |
(6,493) |
4,135 |
||||
Non-cash interest expense |
1,633 |
1,416 |
4,243 |
3,149 |
||||
Non-cash unit-based compensation |
137 |
1,500 |
6,024 |
1,500 |
||||
Equity earnings, net of distributions |
110 |
(1,386) |
2,500 |
(2,456) |
||||
Other |
(108) |
(297) |
(722) |
(931) |
||||
Changes in operating assets and liabilities |
11,235 |
1,892 |
21,959 |
3,540 |
||||
Net cash provided by operating activities |
50,439 |
42,295 |
140,831 |
114,830 |
||||
Cash flows from investing activities |
||||||||
Acquisitions, net of cash acquired |
(6) |
(27,648) |
(17,870) |
(29,510) |
||||
Additions to property, plant and equipment |
(33,240) |
(11,523) |
(57,973) |
(43,781) |
||||
Other |
315 |
300 |
985 |
872 |
||||
Net cash used in investing activities |
(32,931) |
(38,871) |
(74,858) |
(72,419) |
||||
Cash flows from financing activities |
||||||||
Distributions to partners |
(30,619) |
(30,323) |
(91,403) |
(90,297) |
||||
Proceeds from PVR issuance of senior notes |
- |
- |
300,000 |
- |
||||
Proceeds from (repayments of) revolving credit facility, net |
18,510 |
31,000 |
(255,100) |
60,000 |
||||
Purchase of PVR limited partner units |
- |
- |
(1,092) |
- |
||||
Debt issuance costs |
(10,430) |
- |
(19,177) |
(9,258) |
||||
Net cash required by (used in) financing activities |
(22,539) |
677 |
(66,772) |
(39,555) |
||||
Net increase (decrease) in cash and cash equivalents |
(5,031) |
4,101 |
(799) |
2,856 |
||||
Cash and cash equivalents - beginning of period |
23,546 |
17,093 |
19,314 |
18,338 |
||||
Cash and cash equivalents - end of period |
$ 18,515 |
$ 21,194 |
$ 18,515 |
$ 21,194 |
||||
PENN VIRGINIA GP HOLDINGS, L.P. CERTAIN NON-GAAP FINANCIAL MEASURES - unaudited (in thousands, except per unit data) |
||||||||
The following tables present the calculation of distributable cash to PVG and reconciliation of net income attributable to PVG with respect to the three and nine months ended September 30, 2010 and 2009: |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
Calculation of Non-GAAP "Distributable cash" |
September 30, |
September 30, |
||||||
Distributable cash: |
2010 (a) |
2009 |
2010 (a) |
2009 |
||||
Cash distributions received from PVR associated with: |
||||||||
2% general partner interest |
$ 502 |
$ 497 |
$ 1,501 |
$ 1,491 |
||||
General partner incentive distribution rights |
6,093 |
6,035 |
18,231 |
18,105 |
||||
PVR common units |
9,230 |
9,206 |
27,667 |
27,618 |
||||
Total cash received from PVR |
15,825 |
15,738 |
47,399 |
47,214 |
||||
Deduct: Net expenses of PVG on a stand-alone basis (b) |
(629) |
(858) |
(2,752) |
(1,927) |
||||
Cash reserve for working capital |
43 |
(32) |
1,070 |
(743) |
||||
Distributable cash (c) |
$ 15,239 |
$ 14,848 |
$ 45,717 |
$ 44,544 |
||||
Cash distributions to be paid to partners of PVG |
||||||||
To Penn Virginia Corporation |
$ - |
$ 7,629 |
$ 3,443 |
$ 30,487 |
||||
To public unitholders |
15,239 |
7,219 |
42,274 |
14,057 |
||||
Total cash distributions to be paid |
$ 15,239 |
$ 14,848 |
$ 45,717 |
$ 44,544 |
||||
Distribution per limited partner unit (paid in subsequent period) |
$ 0.39 |
$ 0.38 |
$ 1.17 |
$ 1.14 |
||||
Weighted-average units outstanding, basic and diluted |
39,075 |
39,075 |
39,075 |
39,075 |
||||
Reconciliation of GAAP "Net income" to Non-GAAP "Net income |
||||||||
as adjusted" |
||||||||
Net income attributable to PVG |
$ 7,281 |
$ 10,172 |
$ 27,262 |
$ 25,360 |
||||
Adjustments for derivatives: |
||||||||
Derivative (gains) losses included in net income |
11,020 |
3,667 |
12,604 |
14,235 |
||||
Cash receipts (payments) to settle derivatives for period |
(2,435) |
(314) |
(6,493) |
4,135 |
||||
Impact of adjustments on noncontrolling interests (d) |
(3,376) |
(2,115) |
(2,344) |
(6,631) |
||||
Net income attributable to PVG, as adjusted (e) |
$ 12,490 |
$ 11,410 |
$ 31,029 |
$ 37,099 |
||||
Net income attributable to PVG, as adjusted, per limited partner unit, |
||||||||
basic and diluted |
$ 0.32 |
$ 0.29 |
$ 0.79 |
$ 0.95 |
||||
(a) The three and nine months ended September 30, 2010 columns represent cash distributions expected to be received from PVR and cash distributions expected to be paid to unitholders of PVG in November 2010. (b) Estimated net expenses of PVG, which represent general and administrative expenses, partially offset by interest income. (c) Distributable cash represents cash distributions received from PVR, minus our net expenses, minus cash reserve for working capital. Distributable cash is presented because we believe it is a useful adjunct to net income under GAAP. Distributable cash is a significant liquidity metric which is an indicator of our ability to pay quarterly cash distributions to our limited partners. Distributable cash is also the quantitative standard used throughout the investment community with respect to publicly traded partnerships. Distributable cash 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. (d) Noncontrolling interests in net income adjusts for the effects of incentive distribution rights and reflects the noncontrolling interests percentage of net income. The ratio of net income and net income attributable to noncontrolling interests calculated on a GAAP basis was used to estimate the impact of adjustments on noncontrolling interests. A pro forma calculation of net income attributable to noncontrolling interests was not performed. (e) Net income as adjusted represents net income adjusted to exclude the effects of non-cash changes in the fair value of derivatives, and adjustments for an estimate of the related noncontrolling interests. We believe this presentation is widely 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. |
||||||||
PENN VIRGINIA GP HOLDINGS, L.P. |
||||||||
QUARTERLY SEGMENT INFORMATION - unaudited |
||||||||
(in thousands) |
||||||||
Coal and Natural Resource Management |
Natural Gas Midstream |
Other |
Consolidated |
|||||
Three months ended September 30, 2010 |
||||||||
Revenues |
||||||||
Natural gas midstream |
$ - |
$ 180,207 |
$ - |
$ 180,207 |
||||
Coal royalties |
34,983 |
- |
- |
34,983 |
||||
Coal services |
1,975 |
- |
- |
1,975 |
||||
Timber |
1,437 |
- |
- |
1,437 |
||||
Oil and gas royalties |
631 |
- |
- |
631 |
||||
Other |
1,382 |
2,214 |
- |
3,596 |
||||
Total revenues |
40,408 |
182,421 |
- |
222,829 |
||||
Expenses |
||||||||
Cost of gas purchased |
- |
151,657 |
- |
151,657 |
||||
Operating |
2,908 |
8,840 |
- |
11,748 |
||||
General and administrative |
3,686 |
4,706 |
637 |
9,029 |
||||
Depreciation, depletion and amortization |
7,440 |
11,262 |
- |
18,702 |
||||
Total expenses |
14,034 |
176,465 |
637 |
191,136 |
||||
Operating income (loss) |
$ 26,374 |
$ 5,956 |
$ (637) |
$ 31,693 |
||||
Additions to property, plant and equipment and acquisitions |
$ 169 |
$ 33,077 |
$ - |
$ 33,246 |
||||
Coal and Natural Resource Management |
Natural Gas Midstream |
Other |
Consolidated |
|||||
Three months ended September 30, 2009 |
||||||||
Revenues |
||||||||
Natural gas midstream |
$ - |
$ 118,443 |
$ - |
$ 118,443 |
||||
Coal royalties |
29,821 |
- |
- |
29,821 |
||||
Coal services |
1,869 |
- |
- |
1,869 |
||||
Timber |
1,582 |
- |
- |
1,582 |
||||
Oil and gas royalties |
535 |
- |
- |
535 |
||||
Other |
1,372 |
2,003 |
- |
3,375 |
||||
Total revenues |
35,179 |
120,446 |
- |
155,625 |
||||
Expenses |
||||||||
Cost of gas purchased |
- |
92,355 |
- |
92,355 |
||||
Operating |
2,435 |
7,401 |
- |
9,836 |
||||
General and administrative |
3,520 |
4,247 |
879 |
8,646 |
||||
Depreciation, depletion and amortization |
7,999 |
9,852 |
- |
17,851 |
||||
Total expenses |
13,954 |
113,855 |
879 |
128,688 |
||||
Operating income (loss) |
$ 21,225 |
$ 6,591 |
$ (879) |
$ 26,937 |
||||
Additions to property, plant and equipment and acquisitions |
$ 140 |
$ 39,031 |
$ - |
$ 39,171 |
||||
PENN VIRGINIA GP HOLDINGS, L.P. |
||||||||
YEAR-TO-DATE SEGMENT INFORMATION - unaudited |
||||||||
(in thousands) |
||||||||
Coal and Natural Resource Management |
Natural Gas Midstream |
Other |
Consolidated |
|||||
Nine months ended September 30, 2010 |
||||||||
Revenues |
||||||||
Natural gas midstream |
$ - |
$ 497,362 |
$ - |
$ 497,362 |
||||
Coal royalties |
98,088 |
- |
- |
98,088 |
||||
Coal services |
5,976 |
- |
- |
5,976 |
||||
Timber |
4,488 |
- |
- |
4,488 |
||||
Oil and gas royalties |
2,000 |
- |
- |
2,000 |
||||
Other |
3,998 |
6,827 |
- |
10,825 |
||||
Total revenues |
114,550 |
504,189 |
- |
618,739 |
||||
Expenses |
||||||||
Cost of gas purchased |
- |
415,111 |
- |
415,111 |
||||
Operating |
7,670 |
24,647 |
- |
32,317 |
||||
General and administrative |
13,219 |
18,357 |
2,791 |
34,367 |
||||
Depreciation, depletion and amortization |
22,145 |
32,638 |
- |
54,783 |
||||
Total expenses |
43,034 |
490,753 |
2,791 |
536,578 |
||||
Operating income (loss) |
$ 71,516 |
$ 13,436 |
$ (2,791) |
$ 82,161 |
||||
Additions to property, plant and equipment and acquisitions |
$ 18,283 |
$ 57,560 |
$ - |
$ 75,843 |
||||
Coal and Natural Resource Management |
Natural Gas Midstream |
Other |
Consolidated |
|||||
Nine months ended September 30, 2009 |
||||||||
Revenues |
||||||||
Natural gas midstream |
$ - |
$ 348,882 |
$ - |
$ 348,882 |
||||
Coal royalties |
90,448 |
- |
- |
90,448 |
||||
Coal services |
5,502 |
- |
- |
5,502 |
||||
Timber |
4,355 |
- |
- |
4,355 |
||||
Oil and gas royalties |
1,783 |
- |
- |
1,783 |
||||
Other |
6,487 |
4,346 |
- |
10,833 |
||||
Total revenues |
108,575 |
353,228 |
- |
461,803 |
||||
Expenses |
||||||||
Cost of gas purchased |
- |
285,129 |
- |
285,129 |
||||
Operating |
7,211 |
22,085 |
- |
29,296 |
||||
General and administrative |
11,275 |
12,996 |
1,978 |
26,249 |
||||
Depreciation, depletion and amortization |
23,557 |
28,414 |
- |
51,971 |
||||
Total expenses |
42,043 |
348,624 |
1,978 |
392,645 |
||||
Operating income (loss) |
$ 66,532 |
$ 4,604 |
$ (1,978) |
$ 69,158 |
||||
Additions to property, plant and equipment and acquisitions |
$ 2,046 |
$ 71,245 |
$ - |
$ 73,291 |
||||
Contact: |
Stephen R. Milbourne |
|
Director, Investor Relations |
||
Ph: 610-975-8204 Fax: 610-975-8201 |
||
E-Mail: [email protected] |
||
SOURCE Penn Virginia GP Holdings, L.P.
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