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CST: 22/08/2019 17:30:18   

SemGroup Reports Financial Results for Fourth Quarter and Full-Year 2018

176 Days ago

  • Strong 4Q and Full-Year Results Reflect Higher Transportation Volumes and Terminalling Revenues
  • Expect 2019 Consolidated Adjusted EBITDA of Between $420 Million and $465 Million
  • Raised $1.6 Billion Through Strategic Transactions Since 2017 to Support Balance Sheet Goals

TULSA, Okla., Feb. 27, 2019 (GLOBE NEWSWIRE) -- SemGroup® Corporation (NYSE:SEMG) today reported fourth quarter 2018 net income of $3.0 million, compared to net income of $8.4 million in third quarter 2018 and net income of $2.6 million in fourth quarter 2017.

Fourth quarter 2018 Adjusted EBITDA (adjusted earnings before interest, taxes, depreciation and amortization) was $105.4 million, compared to $96.4 million in third quarter 2018 and $111.5 million in fourth quarter 2017, which included $8.1 million in earnings from assets that SemGroup later sold. Fourth quarter 2018 Adjusted EBITDA includes a $5.2 million non-cash lower of cost or net realizable value inventory charge that is expected to be recovered in the first quarter of 2019. The fourth quarter increase over the prior quarter was driven by higher crude transportation and terminalling revenues. Adjusted EBITDA is a non-GAAP measure and is reconciled to net income below.

For full-year 2018, SemGroup reported net loss of $24.3 million, compared to net loss of $17.2 million in 2017. Year-over-year Adjusted EBITDA increased 19 percent to $394.2 million in 2018 from $328.3 million in 2017.

"Our strong fourth quarter results reflect ongoing growth at our Houston terminal and improved crude marketing margins," said SemGroup President and Chief Executive Officer Carlin Conner. "We continue to execute our strategy to strengthen our financial position and expand our physical footprint around our Gulf Coast and Canadian platforms. Last month we completed construction on the Wapiti gas plant in Alberta on budget and ahead of schedule and this week we closed on the SemCAMS joint venture and acquisition of Meritage. Since embarking on our capital raise plan we have raised approximately $1.6 billion through asset sales and strategic transactions like SemCAMS Midstream."

Recent Developments
On February 25, SemCAMS Midstream closed on its acquisition of Meritage Midstream's Canadian infrastructure assets in the prolific Montney resource play. SemCAMS Midstream is a newly-created joint venture owned by SemGroup and KKR. SemCAMS Midstream owns approximately 1.1 bcf/d of natural gas processing capacity, including capacity from Meritage’s Patterson Creek Plant and the new Wapiti Plant. Capacity will increase to approximately 1.3 bcf/d later this year with the expected completion of the Smoke Lake Plant and Patterson Creek Plant expansion.

On February 20, SemGroup announced that its Board of Directors had declared a quarterly cash dividend to common shareholders. A dividend in the amount of $0.4725 per share, or $1.89 per share annualized, will be paid on March 14, 2019 to all common shareholders of record on March 4, 2019. The Board of Directors also declared a dividend to holders of its 7% Series A Cumulative Perpetual Convertible Preferred Stock. The company elected, pursuant to the terms of the convertible preferred shares, to have the aggregate amount of $6.4 million that would have been payable in cash as a dividend added to the liquidation preference of such shares as a payment in kind. The payment date for the payment in kind on the shares of convertible preferred stock is March 1, 2019 and the record date was February 22, 2019.

New Financial Reporting Segments
Given the significant change in SemGroup's asset portfolio over the past 18 months, the company elected to reorganize its business structure and reporting relationships to enhance execution and capture operating efficiencies. SemGroup will now report results for three operating segments: U.S. Liquids, U.S. Gas and Canada. U.S. Liquids includes the results previously reported as Crude Transportation, Crude Facilities, Supply & Logistics and Houston Fuel Oil Terminal Company. U.S. Gas contains the results of the company's historical SemGas segment. Canada includes the operations of the company's historical SemCAMS segment and will also include the recently acquired Meritage operations in future quarters. SemGroup's prior Mexico and U.K. operating segments are included within Corporate and Other, as these businesses were disposed of in 2018.

Segment Profit Results
SemGroup management believes segment profit is a valuable measure of the operating and financial performance of the company's operating segments. Segment profit is defined as revenue, less cost of products sold (exclusive of depreciation and amortization) and operating expenses, plus equity earnings and is adjusted to remove unrealized gains and losses on commodity derivatives and to reflect equity earnings on an EBITDA basis. Reconciliations can be found in the tables of this release.

  Three Months Ended   Year Ended
  December 31,   September 30,   December 31,
Segment Profit: 2018   2017   2018   2018   2017
U.S. Liquids $ 85,474     $ 87,283     $ 75,500     $ 309,423     $ 229,208  
U.S. Gas 17,602     14,540     19,754     67,070     67,805  
Canada 17,226     23,667     20,543     81,330     76,274  
Corporate/Other (152 )   8,152     (913 )   9,726     33,236  
Total Segment Profit $ 120,150     $ 133,642     $ 114,884     $ 467,549     $ 406,523  
 

Performance by Segment - Fourth Quarter vs. Third Quarter 2018

U.S. Liquids

  • Stronger marketing margins, partially offset by a non-cash $5.2 million lower of cost or net realizable value inventory charge
  • White Cliffs volumes increased as shippers moved more barrels to build shipper history prior to one of the pipes coming out of service for NGL conversion
  • Our Houston terminal benefited from a full quarter of certain new crude storage tanks

U.S. Gas

  • Decreased due to lower volumes and NGL prices

Canada

  • Decreased results due to timing of operating expense recover
Select Operating Statistics 4Q 2018   3Q 2018   2Q 2018   1Q 2018   4Q 2017
U.S. Liquids          
White Cliffs Pipeline Volumes (mbbl/d) 144   112   135   107   92
Cushing Terminal Utilization % 98%   94%   97%   98%   100%
Houston Terminal Utilization % 96%   96%   97%   97%   98%
U.S. Gas (1)          
Total Average Processing Volumes (mmcf/d) 369   395   367   305   252
Canada (2)          
Total Average Processing Volumes (mmcf/d) 430   434   382   441   452

(1) U.S. Gas volumes include total processed volumes - Oklahoma and Texas plants
(2) Canada volumes include total processed volumes - K3, KA and West Fox Creek facilities

Segment Profit and Adjusted EBITDA:
(in thousands, unaudited)

  2018   2017
Segment Profit: Q1 Q2 Q3 Q4 FY2018   Q1 Q2 Q3 Q4 FY2017
U.S. Liquids $ 68,056   $ 80,393   $ 75,500   $ 85,474   $ 309,423     $ 35,387   $ 36,336   $ 70,202   $ 87,283   $ 229,208  
U.S. Gas 14,277   15,437   19,754   17,602   67,070     18,227   19,483   15,555   14,540   67,805  
Canada 22,113   21,448   20,543   17,226   81,330     16,865   19,038   16,704   23,667   76,274  
Corporate and other 10,963   (172 ) (913 ) (152 ) 9,726     8,367   8,296   8,421   8,152   33,236  
Total Segment Profit 115,409   117,106   114,884   120,150   467,549     78,846   83,153   110,882   133,642   406,523  
Less:                      
General and administrative expense 26,477   22,886   21,904   20,301   91,568     21,712   26,819   38,389   26,859   113,779  
Other income (950 ) (533 ) (400 ) (497 ) (2,380 )   (218 ) (508 ) (3,390 ) (516 ) (4,632 )
Pension curtailment loss                 3,097   (89 ) 3,008  
Plus:                      
M&A related costs 1,156   648   290   1,058   3,152       5,453   14,886   1,649   21,988  
Employee severance and relocation 137   211   43   758   1,149     558   312   104   720   1,694  
Non-cash equity compensation 2,196   3,398   2,738   3,190   11,522     2,757   2,803   2,957   1,736   10,253  
Consolidated Adjusted EBITDA $ 93,371   $ 99,010   $ 96,451   $ 105,352   $ 394,184     $ 60,667   $ 65,410   $ 90,733   $ 111,493   $ 328,303  
 

2019 Adjusted EBITDA and Dividend Guidance
SemGroup expects full-year 2019 Adjusted EBITDA to range between $420 million and $465 million.

The company is forecasting 2019 net capital expenditures of $307 million, including $45 million related to maintenance projects.

SemGroup is focused on its balance sheet strategy and reinvesting in high-return growth projects and therefore expects to keep the dividend flat at $0.4725 per share, or $1.89 per share annualized, during 2019.

SemGroup does not provide guidance for net income, the GAAP financial measure most directly comparable to the non-GAAP financial measure Adjusted EBITDA, because Net Income includes items such as unrealized gains or losses on derivative activities or similar items which, because of their nature, cannot be accurately forecasted. SemGroup does not expect that such amounts would be significant to Adjusted EBITDA as they are largely non-cash items; however, such items maybe significant to net income.

Earnings Conference Call
SemGroup will host a conference call for investors at 11 a.m. Eastern, Thursday, February 28, 2019. The call can be accessed live over the telephone by dialing 855-239-1101, or for international callers, 412-542-4117. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto SemGroup's Investor Relations website at www.semgroup.com. A replay of the webcast will be available following the call. The fourth quarter and full year 2018 slide deck will be posted under presentations.

About SemGroup
SemGroup® Corporation (NYSE:SEMG) moves energy across North America through a network of pipelines, processing plants, refinery-connected storage facilities and deep-water marine terminals with import and export capabilities. SemGroup serves as a versatile connection between upstream oil and gas producers and downstream refiners and end users. Key areas of operation and growth include western Canada, the Mid-Continent and the Gulf Coast. SemGroup is committed to safe, environmentally sound operations. Headquartered in Tulsa, Okla., the company has additional offices in Calgary, Alberta; Denver, Colo.; and Houston, Texas.

SemGroup uses its Investor Relations website and social media outlets as channels of distribution of material company information. Such information is routinely posted and accessible on our Investor Relations website at www.semgroup.com, our Twitter account and LinkedIn account.

Non-GAAP Financial Measures
SemGroup’s non-GAAP measures, Adjusted EBITDA, Cash Available for Dividends ("CAFD") and Total Segment Profit, are not GAAP measures and are not intended to be used in lieu of GAAP presentation of their most closely associated GAAP measures, net income (loss) for Adjusted EBITDA and CAFD and operating income for Total Segment Profit.

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, adjusted for selected items that SemGroup believes impact the comparability of financial results between reporting periods.  In addition to non-cash items, we have selected items for adjustment to EBITDA which management feels decrease the comparability of our results among periods. These items are identified as those which are generally outside of the results of day to day operations of the business. These items are not considered non- recurring, infrequent or unusual, but do erode comparability among periods in which they occur with periods in which they do not occur or occur to a greater or lesser degree. Historically, we have selected items such as gains on the sale of NGL Energy Partners LP common units, costs related to our predecessor’s bankruptcy, significant business development related costs, significant legal settlements, severance and other similar costs. Management believes these types of items can make comparability of the results of day to day operations among periods difficult and have chosen to remove these items from our Adjusted EBITDA. We expect to adjust for similar types of items in the future. Although we present selected items that we consider in evaluating our performance, you should be aware that the items presented do not represent all items that affect comparability between the periods presented. Variations in our operating results are also caused by changes in volumes, prices, mechanical interruptions and numerous other factors. We do not adjust for these types of variances.

CAFD is based on Adjusted EBITDA, as defined above, and reduced for cash income taxes, cash interest expense, preferred stock cash dividends and maintenance capital expenditures, as adjusted for selected items which management feels decrease the comparability of results among periods.  CAFD is a performance measure utilized by management to analyze our performance after the payment of cash taxes, servicing debt obligations and making sustaining capital expenditures.

Total Segment Profit represents revenue, less cost of products sold (exclusive of depreciation and amortization) and operating expenses, plus equity earnings and is adjusted to remove unrealized gains and losses on commodity derivatives and to reflect equity earnings on an EBITDA basis. Reflecting equity earnings on an EBITDA basis is achieved by adjusting equity earnings to exclude our percentage of interest, taxes, depreciation and amortization from equity earnings for operated equity method investees. For our investment in NGL Energy, we exclude equity earnings and include cash distributions received. Segment profit is the measure by which management assess the performance of our reportable segments.

These measures may be used periodically by management when discussing our financial results with investors and analysts and are presented as management believes they provide additional information and metrics relative to the performance of our businesses. These non-GAAP financial measures have important limitations as analytical tools because they excludes some, but not all, items that affect the most directly comparable GAAP financial measures. You should not consider non-GAAP measures in isolation or as substitutes for analysis of our results as reported under GAAP. Management compensates for the limitations of our non-GAAP measures as analytical tools by reviewing the comparable GAAP measures, understanding the differences between the non-GAAP measure and the most comparable GAAP measure and incorporating this knowledge into its decision-making processes. We believe that investors benefit from having access to the same financial measures that our management uses in evaluating our operating results. Because all companies do not use identical calculations, our presentations of non-GAAP measures may be different from similarly titled measures of other companies, thereby diminishing their utility.

Forward-Looking Statements
Certain matters contained in this Press Release include “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. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.

All statements, other than statements of historical fact, included in this Press Release including the prospects of our industry, our anticipated financial performance, our anticipated annual dividend growth rate, management's plans and objectives for future operations, planned capital expenditures, business prospects, outcome of regulatory proceedings, market conditions and other matters, may constitute forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause actual results to differ include, but are not limited to, our ability to generate sufficient cash flow from operations to enable us to pay our debt obligations and our current and expected dividends or to fund our other liquidity needs; any sustained reduction in demand for, or supply of, the petroleum products we gather, transport, process, market and store; the effect of our debt level on our future financial and operating flexibility, including our ability to obtain additional capital on terms that are favorable to us; our ability to access the debt and equity markets, which will depend on general market conditions and the credit ratings for our debt obligations and equity; the loss of, or a material nonpayment or nonperformance by, any of our key customers; the amount of cash distributions, capital requirements and performance of our investments and joint ventures; the consequences of any divestitures of non-strategic operating assets or divestitures of interests in some of our operating assets through partnerships and/or joint ventures; the failure to realize the anticipated benefits of our acquisition of Meritage Midstream ULC and its midstream infrastructure assets through our joint venture SemCAMS Midstream ULC; the amount of collateral required to be posted from time to time in our commodity purchase, sale or derivative transactions; the impact of operational and developmental hazards and unforeseen interruptions; our ability to obtain new sources of supply of petroleum products; competition from other midstream energy companies; our ability to comply with the covenants contained in our credit agreements, continuing covenant agreement, and the indentures governing our notes, including requirements under our credit agreements and continuing covenant agreement to maintain certain financial ratios; our ability to renew or replace expiring storage, transportation and related contracts; the overall forward markets for crude oil, natural gas and natural gas liquids; the possibility that the construction or acquisition of new assets may not result in the corresponding anticipated revenue increases; any future impairment of goodwill resulting from the loss of customers or business; changes in currency exchange rates; weather and other natural phenomena, including climate conditions; a cyber attack involving our information systems and related infrastructure, or that of our business associates; the risks and uncertainties of doing business outside of the U.S., including political and economic instability and changes in local governmental laws, regulations and policies; costs of, or changes in, laws and regulations and our failure to comply with new or existing laws or regulations, particularly with regard to taxes, safety and protection of the environment; the possibility that our hedging activities may result in losses or may have a negative impact on our financial results; general economic, market and business conditions; as well as other risk factors discussed from time to time in each of our documents and reports filed with the SEC.

Readers are cautioned not to place undue reliance on any forward-looking statements contained in this press release, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements.

Contacts:
Investor Relations:
Kevin Greenwell
918-524-8081
investor.relations@semgroupcorp.com

Media:
Tom Droege
918-524-8560
tdroege@semgroup.com




Condensed Consolidated Balance Sheets
(in thousands, unaudited)

  December 31, 2018   December 31, 2017
ASSETS    
Current assets $ 715,825   $ 902,899
Property, plant and equipment, net 3,457,326   3,315,131
Goodwill and other intangible assets 622,340   655,945
Equity method investments 274,009   285,281
Other noncurrent assets, net 140,807   132,600
Noncurrent assets held for sale   84,961
Total assets $ 5,210,307   $ 5,376,817
LIABILITIES, PREFERRED STOCK AND OWNERS' EQUITY    
Current liabilities:    
Current portion of long-term debt $ 6,000   $ 5,525
Other current liabilities 631,157   761,036
Total current liabilities 637,157   766,561
Long-term debt, excluding current portion 2,278,834   2,853,095
Other noncurrent liabilities 94,337   85,080
Noncurrent liabilities held for sale   13,716
Total liabilities 3,010,328   3,718,452
Preferred stock 359,658  
Total owners' equity 1,840,321   1,658,365
Total liabilities, preferred stock and owners' equity $ 5,210,307   $ 5,376,817
 
 
 

Condensed Consolidated Statements of Operations
(in thousands, except per share amounts, unaudited)

  Three Months Ended Year Ended
  December 31, September 30,   December 31,
  2018   2017   2018   2018   2017
Revenues $ 611,863     $ 606,806     $ 633,996     $ 2,503,262     $ 2,081,917  
Expenses:          
Costs of products sold, exclusive of depreciation and amortization shown below 446,003     427,534     468,871     1,823,095     1,514,891  
Operating 59,898     66,669     64,835     284,769     254,764  
General and administrative 20,301     26,859     21,904     91,568     113,779  
Depreciation and amortization 53,365     58,085     53,598     209,254     158,421  
Loss (gain) on disposal or impairment, net (1,438 )   (30,468 )   (383 )   (3,563 )   13,333  
Total expenses 578,129     548,679     608,825     2,405,123     2,055,188  
Earnings from equity method investments 16,179     15,120     14,528     57,672     67,331  
Operating income 49,913     73,247     39,699     155,811     94,060  
Other expenses, net 40,410     39,487     33,935     156,835     113,598  
Income (loss) before income taxes 9,503     33,760     5,764     (1,024 )   (19,538 )
Income tax expense (benefit) 6,531     31,141     (2,697 )   23,304     (2,388 )
Net income (loss) 2,972     2,619     8,461     (24,328 )   (17,150 )
Less: net income attributable to noncontrolling interest 2,421             2,421      
Net income (loss) attributable to SemGroup 551     2,619     8,461     (26,749 )   (17,150 )
Less: cumulative preferred stock dividends 6,430         6,317     23,790      
Net income (loss) attributable to common shareholders $ (5,879 )   $ 2,619     $ 2,144     $ (50,539 )   $ (17,150 )
Net income (loss) $ 2,972     $ 2,619     $ 8,461     $ (24,328 )   $ (17,150 )
Other comprehensive income (loss), net of income tax (25,149 )   (4,102 )   3,352     2,554     20,113  
Comprehensive income (loss) (22,177 )   (1,483 )   11,813     (21,774 )   2,963  
Less: comprehensive income attributable to noncontrolling interest 2,421             2,421      
Comprehensive income (loss) attributable to SemGroup $ (24,598 )   $ (1,483 )   $ 11,813     $ (24,195 )   $ 2,963  
           
Net income (loss) per common share:          
Basic $ (0.08 )   $ 0.03     $ 0.03     $ (0.65 )   $ (0.24 )
Diluted $ (0.08 )   $ 0.03     $ 0.03     $ (0.65 )   $ (0.24 )
Weighted average shares (thousands):          
Basic 78,378     78,189     78,353     78,313     71,418  
Diluted 78,378     78,749     78,977     78,313     71,418  
                             
                             
                             

Reconciliation of Net Income to Adjusted EBITDA:
(in thousands, unaudited)

  Three Months Ended   Year Ended
  December 31,   September 30,   December 31,
  2018   2017   2018   2018   2017
Net income (loss) $ 2,972   $ 2,619     $ 8,461     $ (24,328 )   $ (17,150 )
Add: Interest expense 36,031   42,954     35,318     149,714     103,009  
Add: Income tax expense (benefit) 6,531   31,141     (2,697 )   23,304     (2,388 )
Add: Depreciation and amortization expense 53,365   58,085     53,598     209,254     158,421  
EBITDA 98,899   134,799     94,680     357,944     241,892  
Selected Non-Cash Items and Other Items Impacting Comparability 6,453   (23,306 )   1,771     36,240     86,411  
Adjusted EBITDA $ 105,352   $ 111,493     $ 96,451     $ 394,184     $ 328,303  
 
 
 

Selected Non-Cash Items and
Other Items Impacting Comparability
(in thousands, unaudited)

  Three Months Ended   Year Ended
  December 31,   September 30,   December 31,
  2018   2017   2018   2018   2017
Loss (gain) on disposal or impairment, net $ (1,438 )   $ (30,468 )   $ (383 )   $ (3,563 )   $ 13,333  
Foreign currency transaction loss (gain) 4,876     (2,951 )   (983 )   9,501     (4,709 )
Adjustments to reflect equity earnings on an EBITDA basis 4,837     6,811     4,926     19,532     26,890  
M&A transaction related costs 1,058     1,649     290     3,152     21,988  
Pension plan curtailment loss     89             (3,008 )
Employee severance and relocation expense 758     720     43     1,149     1,694  
Unrealized loss (gain) on derivative activities (6,828 )   (892 )   (4,860 )   (5,053 )   40  
Non-cash equity compensation 3,190     1,736     2,738     11,522     10,253  
Loss on early extinguishment of debt                 19,930  
Selected Non-Cash Items and Other Items Impacting Comparability $ 6,453     $ (23,306 )   $ 1,771     $ 36,240     $ 86,411  
 
 
 

Prior Segmentation and Adjusted EBITDA:
(in thousands, unaudited)

(in thousands, unaudited)   2018     2017
Segment Profit: Q1 Q2 Q3 Q4 FY2018   Q1 Q2 Q3 Q4 FY2017
Crude Transportation $ 34,310   $ 37,865   $ 38,135   $ 39,794   $ 150,104     $ 28,251   $ 29,028   $ 34,585   $ 41,641   $ 133,505  
Crude Facilities   9,341     9,683     8,209     8,244     35,477       9,564     9,481     8,806     14,116     41,967  
Crude Supply and Logistics   (6,583 )   (1,959 )   (7,005 )   (2,252 )   (17,799 )     (2,428 )   (2,173 )   (1,693 )   (1,506 )   (7,800 )
HFOTCO   30,988     34,804     36,161     39,688     141,641               28,504     33,032     61,536  
SemGas   14,277     15,437     19,754     17,602     67,070       18,227     19,483     15,555     14,540     67,805  
SemCAMS   22,113     21,448     20,543     17,226     81,330       16,865     19,038     16,704     23,667     76,274  
Corporate and other   10,963     (172 )   (913 )   (152 )   9,726       8,367     8,296     8,421     8,152     33,236  
Total Segment Profit   115,409     117,106     114,884     120,150     467,549       78,846     83,153     110,882     133,642     406,523  
Less:                      
General and administrative expense   26,477     22,886     21,904     20,301     91,568       21,712     26,819     38,389     26,859     113,779  
Other income   (950 )   (533 )   (400 )   (497 )   (2,380 )     (218 )   (508 )   (3,390 )   (516 )   (4,632 )
Pension curtailment gain (loss)                                 3,097     (89 )   3,008  
Plus:                      
M&A related costs   1,156     648     290     1,058     3,152           5,453     14,886     1,649     21,988  
Employee severance and relocation   137     211     43     758     1,149       558     312     104     720     1,694  
Non-cash equity compensation   2,196     3,398     2,738     3,190     11,522       2,757     2,803     2,957     1,736     10,253  
Consolidated Adjusted EBITDA $ 93,371   $ 99,010   $ 96,451   $ 105,352   $ 394,184     $ 60,667   $ 65,410   $ 90,733   $ 111,493   $ 328,303  
 
 
 

Reconciliation of Operating Income to Total Segment Profit:
(in thousands, unaudited)

  Three Months Ended Year Ended
  December 31,   September 30,   December 31,
  2018   2017   2018   2018   2017
Operating income $ 49,913     $ 73,247     $ 39,699     $ 155,811     $ 94,060  
Plus:          
Adjustments to reflect equity earnings on an EBITDA basis 4,837     6,811     4,926     19,532     26,890  
Unrealized loss (gain) on derivatives (6,828 )   (892 )   (4,860 )   (5,053 )   40  
General and administrative expense 20,301     26,859     21,904     91,568     113,779  
Depreciation and amortization 53,365     58,085     53,598     209,254     158,421  
Loss (gain) on disposal or impairment, net (1,438 )   (30,468 )   (383 )   (3,563 )   13,333  
Total Segment Profit $ 120,150     $ 133,642     $ 114,884     $ 467,549     $ 406,523  
 
 
 

Cash Available for Dividends:
(in thousands, unaudited)

  Three Months Ended   Year Ended
  December 31,   September 30,   December 31,
  2018   2017   2018   2018   2017
Adjusted EBITDA $ 105,352     $ 111,493     $ 96,451     $ 394,184     $ 328,303  
Less: Cash interest expense 35,372     35,203     36,377     139,149     101,196  
Less: Maintenance capital 8,664     9,597     8,635     36,578     42,412  
Less: Cash paid for income taxes 1,500     4,088     600     16,800     7,160  
Less: Distributions to noncontrolling interests (1) 2,932             2,932      
Less: Preferred stock dividends (2)                  
Selected items impacting comparability:          
Add back: Mexico disposal cash taxes             10,955      
Cash available for dividends $ 56,884     $ 62,605     $ 50,839     $ 209,680     $ 177,535  
           
Dividends declared $ 37,034     $ 36,961     $ 37,022     $ 148,082     $ 136,900  
           
Dividend coverage ratio 1.5 x   1.7 x   1.4 x   1.4 x   1.3 x

(1)  Distributions to noncontrolling interest represents Alinda’s 49% interest in Maurepas Pipeline and will also include KKR's 49% interest in  SemCAMS Midstream joint venture
(2)  To date preferred stock dividends have been paid-in-kind

 

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