PetroLogistics LP Announces Financial Results and Cash Distribution for First Quarter 2013

HOUSTON, April 24, 2013 /PRNewswire/ -- PetroLogistics LP (NYSE: PDH) (the "Partnership"), today announces financial results and a cash distribution for the first quarter of 2013. The distribution for the quarter ended March 31, 2013, is 67 cents per common unit.

Total sales in the first quarter were $208.7 million and net income for the quarter was $57.1 million. The Partnership's reported results include certain items that impact comparability of financial results between reporting periods. Excluding the impact of these items, the Partnership's Adjusted net income was $83.0 million, and Adjusted EBITDA was $100.0 million.

Cash available for distribution totaled $93.1 million for the first quarter of 2013. Adjusted net income, Adjusted EBITDA and cash available for distribution are non-GAAP financial measures. Please see "Non-GAAP Financial Measures" included later in this release for reconciliations of these Non-GAAP Financial Measures to the most directly comparable GAAP measures.

"Results for the first quarter represented a significant improvement from the challenging conditions experienced during most of the second half of last year," said Nathan Ticatch, President and Chief Executive Officer. "Propylene prices were strong, and we continued to enjoy attractive propane feedstock costs leading to record profitability."

Operations

The Partnership produced 299 million pounds of propylene and sold 289 million pounds of propylene during the first quarter of 2013. The Partnership recognized total sales of $208.7 million during the quarter, which included propylene sales of $204.3 million.

Cost of sales was $114.1 million for the first quarter of 2013. The primary component of cost of sales is propane feedstock, which represented approximately 70% of total production costs for the first quarter of 2013. The average propane price for the quarter was 86 cents per gallon.

For the first quarter of 2013, the Partnership had a gross profit of $94.6 million, and the average propane-to-propylene spread[1] was 50.4 cents per pound.

Financing

During the first quarter the Partnership completed the issuance of $365 million senior notes at 6.25% due in March 2020. The proceeds from the transaction were used to repay the borrowings outstanding under the existing term loan facility of $347.4 million and to pay related transaction costs. In addition, we increased the capacity of our revolving credit facility from $120 to $170 million and extended the term to March 2018.

Distribution

The first quarter 2013 distribution of 67 cents per common unit will be paid on May 14, 2013, to unitholders of record on May 6, 2013.

Conference Call Details

The 2013 first quarter results conference call will be held on Thursday, April 25, 2013 at 11 a.m. EST. Callers may listen to the live presentation, which will be followed by a question and answer segment, by dialing  (866) 578-5771 or (617) 213-8055 and entering pass code 12541280. An audio webcast of the call will be available at www.petrologistics.com within the Investor Relations portion of the site under the Presentations section. A replay will be available by audio webcast and teleconference from 12:00 p.m. EST on April 25, 2013, through 12:00 a.m. EST on May 3, 2013. The replay teleconference will be available by dialing (888) 286-8010 or (617) 801-6888 and the reservation number 78534378.

About PetroLogistics LP

PetroLogistics LP is a master limited partnership which owns and operates the only U.S. propane dehydrogenation facility producing propylene from propane. The Partnership's headquarters and operations are located in Houston, Texas.

Investor Relations

Phone: 855-840-7140
E-mail: [email protected]
Address: Investor Relations
600 Travis STE 3250
Houston, TX 77002

Forward-Looking Statements

Certain statements and information in this release may constitute "forward-looking statements."  The words "believe," "expect," "anticipate," "plan," "intend," "foresee," "should," "would," "could" 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 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, there can be no assurance that future developments affecting us will be those that we anticipate.  All comments concerning our expectations for future revenues and operating results are based on 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 volatile nature of our business and the variable nature of our distributions; the ability of our general partner to modify or revoke our distribution policy at any time; our ability to forecast our future financial condition or results; the cyclical nature of our business; competition from other propylene producers; our reliance on propane that we purchase from Enterprise Products Operating LLC; our reliance on other third-party suppliers; the supply and price levels of propane and propylene; the risk of a material decline in production at our propane dehydrogenation facility;  potential operating hazards from accidents, fire, severe weather, floods or other natural disasters; the risk associated with governmental policies affecting the petrochemical industry; capital expenditures and potential liabilities arising from environmental laws and regulations; our potential inability to obtain or renew permits;  existing and proposed environmental laws and regulations, including those relating to climate change, alternative energy or fuel sources, and on the end-use and application of propylene; new regulations concerning the transportation of hazardous chemicals, risks of terrorism and the security of propane processing facilities; our lack of asset diversification; our dependence on a limited number of significant customers;  our ability to comply with employee safety laws and regulations; potential disruptions in the global or U.S. capital and credit markets; our potential inability to successfully implement our business strategies, including the completion of our required turnarounds and other significant capital expenditure projects;  additional risks, compliance costs and liabilities from expansions or acquisitions; our reliance on certain members of our senior management team and other key personnel of our general partner; the potential development of integrated propylene facilities by competitors or our current customers, displacing us as suppliers;  the potential shortage of skilled labor or loss of key personnel; our ability to secure appropriate and adequate debt facilities at a reasonable cost of capital; restrictions in our debt agreements; the dependence on our subsidiary for cash to meet our debt obligations; our limited operating history; risks relating to our relationship with our sponsors; and changes in our treatment as a partnership for U.S. income or state tax purposes.

For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with Securities and Exchange Commission, including our annual report on Form 10-K as filed with the SEC on March 8, 2013, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. 

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof.  We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

This release serves as a qualified notice to nominees and brokers as provided for under Treasury Regulation Section 1.1446-4(b). Please note that 100 percent of the Partnership's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, the Partnership's distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate.

[1] Propane-to-propylene spread is calculated as (PGP Contract Benchmark Price (cents per pound) – 1.2*(Propane Price (cents per gallon)/4.2)). This calculation assumes that it takes approximately 1.2 pounds of propane to make 1.0 pound of propylene and one gallon of propane weighs approximately 4.2 pounds.

PetroLogistics LP

Financial and Operational Data (all information in this release is unaudited except as otherwise noted):

The following tables summarize the financial data and key operating statistics for the Partnership for the three months ended March 31, 2013 and 2012. Select balance sheet data is as of March 31, 2013 and December 31, 2012.

Non-GAAP Financial Measures
To supplement the financial information presented in accordance with GAAP, additional measures are used that are known as "non-GAAP financial measures" in the evaluation of past performance and prospects for the future. These measures include Adjusted EBITDA and Adjusted net income. The presentation of such additional financial measures provides useful information to investors regarding our performance and results of operations because these measures, when used in conjunction with related GAAP financial measures, (i) provide additional information about operating performance and ability to generate cash available for distribution, (ii) provide investors with the financial analytical framework upon which management bases financial, operational, compensation and planning decisions and (iii) present measurements that investors, rating agencies and debt holders have indicated are useful in assessing results of operations. These measures may exclude, for example, (i) the mark-to-market of derivative instruments that are related to underlying activities in another period or settled positions that are subject to the Omnibus Agreement, (ii) items that are not indicative of operating results and/or (iii) other items that we believe should be excluded in understanding operating performance. We have defined all such items as "Certain Items that Impact Comparability." These additional financial measures are reconciled to the most directly comparable measures as reported in accordance with GAAP, and should be viewed in addition to, and not in lieu of, our consolidated financial statements and footnotes.

SOURCE PetroLogistics LP