The acquisition will increase the Partnership’s limited partner interest
in OpCo from approximately 18.3% to approximately 22.8% and will
represent the third purchase of additional interests in OpCo by the
Partnership since the Partnership’s initial public offering. OpCo’s
assets are comprised of three ethylene production facilities, which
primarily convert ethane into ethylene and have an aggregate annual
capacity of approximately 3.7 billion pounds, and a 200-mile ethylene
pipeline. OpCo sells approximately 95% of its ethylene production to
“This transaction demonstrates the sustainability of our strategy to
achieve annualized low-double-digit growth in distributions,” said the
Partnership’s President and Chief Executive Officer,
The terms of the acquisition and the affiliate entity’s participation in
the private placement were approved by a Conflicts Committee, which is
composed entirely of independent directors of the Board. This committee
was advised by
The securities offered in the private placement have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), or
any state securities laws and may not be offered or sold in
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such states.
The statements in this release that are not historical facts, but
forward-looking statements, including projections of future performance
and 2019 EBITDA, the expectations regarding the closing of the private
placement and the acquisition, the impact of the described acquisition
on the Partnership’s cash available for distribution, availability of
funds and the expectation of long-term distribution growth, could be
adversely affected by, among other things, operating difficulties; the
volume of ethylene that we are able to sell; the price at which we are
able to sell ethylene; changes in the price and availability of
feedstocks; changes in prevailing economic conditions; actions of
Use of Non-GAAP Financial Measures
This release makes reference to a forward-looking “non-GAAP” financial measure, 2019 EBITDA. The Partnership reports its financial results in accordance with U.S. generally accepted accounting principles ("GAAP") but believes that certain non-GAAP financial measures, such as EBITDA, provide useful supplemental information to investors regarding the underlying business trends and performance of its ongoing operations and are useful for period-over-period comparisons of such operations. EBITDA is defined as net income before interest expense, income taxes, depreciation and amortization. This non-GAAP financial measure should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP. Because EBITDA may be defined differently by other companies in the Partnership’s industry, this definition may not be comparable to similarly titled measures of other companies. See below a reconciliation of EBITDA to net income. A forward-looking estimate of net cash provided by operating activities is not provided because the items necessary to estimate net cash provided by operating activities, in particular the change in operating assets and liabilities, are not accessible or estimable at this time. The Partnership does not anticipate the changes in operating assets and liabilities to be material, but changes in accounts receivable, accounts payable, accrued liabilities and deferred revenue could be significant, such that the amount of net cash provided by operating activities would vary substantially from the amount of projected EBITDA.
2019 Estimates | |||
Net income | $322 million to $337 million | ||
Add: | |||
Depreciation and amortization | $109 million | ||
Interest expense | $13 million | ||
Provision for income taxes | $1 million | ||
EBIDTA | $445 million to $460 million | ||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190327005201/en/
Source:
Media Relations – Ben Ederington: 1-713-585-2900
Investor
Relations – Steve Bender: 1-713-585-2900