Partners' Capital and Distributions | 9 Months Ended |
Sep. 30, 2013 |
Partners' Capital and Distributions | 7 | Partners’ Capital and Distributions | | | | | | | | | | | | | | | |
As of September 30, 2013, partners’ capital consisted of 101.2 million common units, 10.3 million Special Units and 23.8 million Class B Units. We will pay distributions on November 13, 2013 with respect to the quarter ended September 30, 2013. |
Equity Offering |
In September 2013, we issued 5.5 million common units representing limited partner interest in PVR in a registered public offering. Total net proceeds of approximately $124.5 million, after deducting estimated fees and expenses and underwriting discounts and commissions totaling approximately $2.0 million, were used to repay a portion of the Revolver. |
At The Market (“ATM”) Equity Program |
An ATM program is an alternative way of raising capital by issuing equity through existing markets over a period of time. The flexibility of timing the issuance of units helps us to match demand for capital with the supply by controlling the number of units issued. Additionally, it reduces the volatility of unit price by avoiding issuance of a large number of common units. In August 2013 we issued our prospectus supplement relating to the issuance and sale from time to time of common units representing limited partner interests in PVR, or common units, having an aggregate offering price of up to $150.0 million through one or more sales agents. These sales, if any, will be made pursuant to the terms of the ATM equity offering sales agreement between us and the sales agents. The compensation of sales agents for the sales of common units shall not exceed 2.0% of the gross sales price per common unit. The net proceeds from any sales under this ATM program will be used for general partnership purposes, which may include, among other things, repayment of indebtedness, acquisitions, capital expenditures and additions to working capital. As of September 30, 3013, no sales have been made under the ATM program. |
Special Units |
The Special Units convert to common units on the first business day after the record date for distributions with respect to the quarter ended September 30, 2013. Therefore, conversion of the Special Units to common units will occur on November 7, 2013. Absent an early conversion event, the Special Units will not be entitled to accrue distributions until the quarter commencing on October 1, 2013. If the Special Units would have been entitled to accrue and receive the same per unit quarterly cash distributions to which the holders of our common units are entitled with respect to the quarter ended September 30, 2013, we would pay an aggregate of $5.7 million in distributions to the holders of the Special Units on November 13, 2013. |
Class B Units |
We will pay distributions to the holders of the Class B Units with respect to the quarter ended September 30, 2013 by issuing an aggregate of 525,624 additional Class B Units. If we were to pay distributions to the holders of the Class B Units in cash, rather than in additional Class B Units, at the same per unit quarterly cash distribution rate to which the holders of our common units are entitled with respect to the quarter ended September 30, 2013, the amount of cash distributions that would have been attributable to the Class B Units was $13.1 million. |
Net Income (Loss) per Common Unit |
The following table reconciles net income (loss) and weighted average common units used in computing basic and diluted net income (loss) per common unit (in thousands, except per unit data): |
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| | | | | | | | | | | | | | | | |
| | Three Months Ended | | | Nine Months Ended | |
| | September 30, | | | September 30, | |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| | | | |
Net income (loss) | | $ | 17,888 | | | $ | 38,783 | | | $ | 30,633 | | | $ | (63,752 | ) |
Less: | | | | | | | | | | | | | | | | |
Distributions to participating securities | | | (13,124 | ) | | | (11,814 | ) | | | (38,577 | ) | | | (17,534 | ) |
Recognition of beneficial conversion feature (1) | | | (20,106 | ) | | | (17,120 | ) | | | (58,881 | ) | | | (28,174 | ) |
Participating securities’ allocable share of undistributed net loss | | | 6,621 | | | | 3,969 | | | | 21,898 | | | | 14,109 | |
| | | | | | | | | | | | | | | | |
Net income (loss) allocable to common units, basic and diluted | | $ | (8,721 | ) | | $ | 13,818 | | | $ | (44,927 | ) | | $ | (95,351 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Weighted average number of common units outstanding, basic and diluted | | | 96,983 | | | | 88,366 | | | | 96,283 | | | | 83,834 | |
| | | | |
Net income (loss) per common unit, basic and diluted | | $ | (0.09 | ) | | $ | 0.16 | | | $ | (0.47 | ) | | $ | (1.14 | ) |
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-1 | Special Units and Class B Units were issued at prices below the market price of the common units into which they are convertible. The aggregate discount of $139.2 million represents a beneficial conversion feature which is considered a non-cash distribution that will be distributed ratably using the effective yield method over the period the Special Units and Class B Units are outstanding. The impact of the beneficial conversion feature is included as distributed income to Class B Units and Special Units with a corresponding reduction in net income allocable to common units in the calculation of net income loss per common unit for the three and nine months ended September 30, 2013 and 2012. | | | | | | | | | | | | | | | |
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Basic net income (loss) per common unit is computed by dividing net income (loss) allocable to common units by the weighted average number of common units outstanding and vested deferred common units outstanding during the period. Diluted net income (loss) per common unit is computed by dividing net income (loss) allocable to common units by the weighted average number of common units outstanding and vested deferred common units outstanding during the period and, when dilutive, Class B Units, Special Units, and phantom units. The following table presents the weighted average number of each class of participating securities that were excluded from the diluted net income (loss) per common unit calculation because the inclusion of these units would have had an antidilutive effect: |
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| | | | | | | | | | | | | | | | |
| | Three Months Ended | | | Nine Months Ended | |
| | September 30, | | | September 30, | |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| | | | |
Special units | | | 10,346 | | | | 10,346 | | | | 10,346 | | | | 5,173 | |
Class B units | | | 23,621 | | | | 21,620 | | | | 23,129 | | | | 10,770 | |
Phantom units | | | 78 | | | | 73 | | | | 70 | | | | 51 | |
| | | | | | | | | | | | | | | | |
| | | 34,045 | | | | 32,039 | | | | 33,545 | | | | 15,994 | |
| | | | | | | | | | | | | | | | |
Cash Distributions |
We distribute 100% of Available Cash (as defined in our partnership agreement) within 45 days after the end of each quarter to common unitholders of record. Available Cash is generally defined as all of our cash and cash equivalents on hand at the end of each quarter less reserves established by our general partner for future requirements. Our general partner has the discretion to establish cash reserves that are necessary or appropriate to (i) provide for the proper conduct of our business, (ii) comply with applicable law, any of our debt instruments or any other agreements and (iii) provide funds for distributions to unit holders for any one or more of the next four quarters. |
During the three and nine months ended September 30, 2013, we paid cash distributions of $52.8 million and $158.3 million. |
During the three and nine months ended September 30, 2012, we paid cash distributions of $46.8 million and $128.5 million. |
On November 13, 2013, we will pay a $0.55 per unit quarterly distribution to common unit holders of record on November 6, 2013. |