Exhibit 99.1
MarkWest Energy Partners, L.P., Reports 2003 Third Quarter Results
DENVER—November 5, 2003—MarkWest Energy Partners, L.P. (AMEX: MWE), today reported net income for the three months ended September 30, 2003, of $2.8 million, or $0.47 per limited partner unit, compared to net income of $2.5 million, or $0.46 per limited partner unit, for the third quarter of 2002. For the first nine months of 2003, the Partnership reported net income of $5.9 million, or $1.05 per limited partner unit. There is no comparable year-to-date period for 2002, as our initial public offering was completed May 24, 2002.
On October 22, 2003, the board of directors of the general partner of MarkWest Energy Partners, L.P., declared the Partnership's quarterly cash distribution of $0.64 per unit for the third quarter of 2003. This distribution represents an increase of $0.06 per unit over the previous quarter distribution. The indicated annual rate is $2.56 per unit. The third quarter distribution is payable November 14, 2003, to unitholders of record on November 4, 2003.
As a Master Limited Partnership, cash distributions to limited partners are largely determined based on Distributable Cash Flow (DCF). For the three and nine months ended September 30, 2003, DCF was $5.0 million and $11.7 million, respectively.
Third quarter 2003 net income and DCF were positively impacted by our first quarter acquisition of the Pinnacle entities, our third quarter Lubbock pipeline acquisition, and a return to normal volumes in our Appalachian operations after longer-than-expected downtime for annual repairs and maintenance during the second quarter. Third quarter results reflect just one month of results from the Lubbock pipeline, as it was acquired on September 2, 2003.
John Fox, CEO, said, "We were very pleased to be able to raise our distribution to $0.64/quarter this quarter. The flow of new acquisition opportunities continues to be quite robust in the size range of $25 million to $75 million, which we like. Gas drilling activity is nearing historical highs, and we think our assets in Appalachia and Texas are well positioned to grow internally from new well activity around our systems. Finally, we are most pleased with Frank Semple's agreement to be our new president and CEO, as previously announced. Frank's experience will bring a valuable new dimension to the growth of Partnership unitholder value."
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MarkWest Energy Partners L.P., is a publicly traded master limited partnership with a solid core of midstream assets and growing core of gas transmission assets. We are the largest processor of natural gas in the Northeast, processing gas from the Appalachian basin and from Michigan. Our Northeast assets include natural gas processing facilities, liquids fractionation, transportation and storage facilities. We also have a growing asset base of gas gathering and intrastate gas transmission assets in Texas.
This press release includes "forward-looking statements" 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. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect our operations, financial performance and other factors as discussed in our filings with the Securities and Exchange Commission. Among the factors that could cause results to differ materially are those risks discussed in our Form S-1, as amended, and our Forms 10-Q for the current year, as filed with the SEC.
MarkWest Energy Partners, L.P.
Financial and Operating Statistics
(in thousands of dollars except per unit amounts and operating statistics)
| | Three Months Ended September 30, 2003 | Three Months Ended September 30, 2002 | Nine Months Ended September 30, 2003 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Statement of Operations Data | ||||||||||||
| Revenues | $ | 31,412 | $ | 13,868 | $ | 78,741 | ||||||
| Operating expenses: | ||||||||||||
| Purchased product costs | 18,510 | 4,903 | 45,325 | |||||||||
| Plant operating expenses and other expenses | 5,396 | 3,893 | 14,900 | |||||||||
| Selling, general and administrative expenses | 1,883 | 894 | 4,814 | |||||||||
| Depreciation | 2,026 | 1,272 | 5,231 | |||||||||
| Total operating expenses | 27,815 | 10,962 | 70,270 | |||||||||
| Income from operations | 3,597 | 2,906 | 8,471 | |||||||||
| Other income (expenses): | ||||||||||||
| Interest expense, net | (847 | ) | (392 | ) | (2,592 | ) | ||||||
| Miscellaneous income | 17 | 12 | 51 | |||||||||
| Net income | $ | 2,767 | $ | 2,526 | $ | 5,930 | ||||||
| General partner's interest in net income | $ | 55 | $ | 51 | $ | 119 | ||||||
| Limited partners' interest in net income | $ | 2,712 | $ | 2,475 | $ | 5,811 | ||||||
| Basic net income per limited partner unit | $ | 0.47 | $ | 0.46 | $ | 1.05 | ||||||
| Diluted net income per limited partner unit | $ | 0.46 | $ | 0.45 | $ | 1.04 | ||||||
| Weighted average units outstanding: | ||||||||||||
| Basic | 5,783 | 5,415 | 5,543 | |||||||||
| Diluted | 5,833 | 5,449 | 5,593 | |||||||||
| Cash Flow Data | ||||||||||||
| Net cash flow provided by (used in): | ||||||||||||
| Operating activities | $ | 6,562 | $ | 3,479 | $ | 16,440 | ||||||
| Investing activities | $ | (13,012 | ) | $ | (1,332 | ) | $ | (52,391 | ) | |||
| Financing activities | $ | 4,903 | $ | (1,206 | ) | $ | 39,548 | |||||
| Other Financial Data | ||||||||||||
| Distributable cash flow | $ | 4,995 | $ | 3,690 | $ | 11,746 | ||||||
| Operating Data | ||||||||||||
| Appalachia: | ||||||||||||
| Natural gas processed for a fee (Mcf/d) | 204,000 | 213,000 | 198,000 | |||||||||
| NGLs fractionated for a fee (gallons/day) | 511,000 | 484,000 | 449,000 | |||||||||
| Southwest: | ||||||||||||
| Gathering system throughput (Mcf/d) | 59,000 | — | 51,000 | |||||||||
| Michigan: | ||||||||||||
| Gas volumes processed for a fee (Mcf/d) | 17,300 | 16,900 | 15,700 | |||||||||
| | September 30, 2003 | December 31, 2002 | September 30, 2002 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance Sheet Data | |||||||||||
| Working capital | $ | 1,880 | $ | 1,762 | $ | 2,193 | |||||
| Total assets | $ | 142,290 | $ | 87,709 | $ | 88,341 | |||||
| Total debt | $ | 61,300 | $ | 21,400 | $ | 21,400 | |||||
| Partners' capital | $ | 67,912 | $ | 61,574 | $ | 63,303 | |||||
| Total debt (net of cash) to total book capitalization | 45 | % | 23 | % | 24 | % | |||||
MarkWest Energy Partners, L.P.
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(in thousands)
| | Three Months Ended September 30, 2003 | Three Months Ended September 30, 2002 | Nine Months Ended September 30, 2003 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income | $ | 2,767 | $ | 2,526 | $ | 5,930 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation | 2,026 | 1,272 | 5,231 | ||||||||
| Amortization of deferred financing costs included in interest expense | 264 | — | 702 | ||||||||
| Non-cash compensation expense | 154 | — | 554 | ||||||||
| Other | 11 | 31 | 20 | ||||||||
| Cash flow from operations prior to changes in working capital | 5,222 | 3,829 | 12,437 | ||||||||
| Less: | |||||||||||
| Sustaining capital expenditures | (227 | ) | (139 | ) | (691 | ) | |||||
| Distributable cash flow(a) | $ | 4,995 | $ | 3,690 | $ | 11,746 | |||||
| Sustaining capital expenditures | $ | 227 | $ | 139 | $ | 691 | |||||
| Expansion capital expenditures | 563 | 1,211 | 1,243 | ||||||||
| Total capital expenditures | $ | 790 | $ | 1,350 | $ | 1,934 | |||||
