PHILADELPHIA, May 16, 2016 (GLOBE NEWSWIRE) -- Atlas Energy Group, LLC (OTCQX:ATLS)
(“Atlas Energy”, the “Company” or “ATLS”) today reported operating and financial results for the first
quarter 2016.
- ATLS received approximately $0.6 million in management fees and cash distributions during the first quarter 2016 from its
E&P development subsidiary, Atlas Growth Partners, L.P. (“AGP”). AGP recently had its Form S-1 for its continuous $1 billion
public offering declared effective by the Securities and Exchange Commission on April 5, 2016.
- ATLS received $0.5 million in cash distributions in the first quarter 2016 from Arc Logistics Partners, LP (NYSE:ARCX), a
master limited partnership of which approximately 16% of its general partner interest and approximately 12% of its limited
partner interest is owned by ATLS through the Company’s interest in Lightfoot Capital Partners. In April 2016, ARCX announced a
quarterly cash distribution of $0.44 per common unit for the first quarter 2016, unchanged from the fourth quarter 2015.
- Atlas Resource Partners, L.P. (NYSE:ARP), Atlas Energy’s E&P subsidiary, paid common unit cash distributions totaling
approximately $0.025 per limited partner unit for the first quarter 2016. On May 5, 2016, ARP announced that the Board of
Directors elected to suspend monthly common unit distributions, beginning with the month of March 2016, as well as Preferred
Class C distributions, due to the continued lower commodity price environment.
- Atlas Energy’s Distributable Cash Flow, a non-GAAP measure, was approximately $0.5 million(1), or $0.02 per common
unit, in the first quarter 2016, compared to $(0.1) million, or $(0.00) per common unit, in the fourth quarter 2015.
- On a GAAP basis, net loss was approximately $1.3 million for the first quarter 2016, compared with a loss of $297.4 million
for the fourth quarter 2015 and net income of $53.5 million in the prior year comparable quarter. The year over year
decline in net income was due primarily to lower mark-to-market derivative gains recognized from ARP’s financial hedge
positions.
|
ATLS owns 100% of ARP’s general partner Class A units and
incentive distribution rights, and an approximate 23% limited partner interest in ARP. ATLS’ financial results are presented on
a consolidated basis with those of ARP. Non-controlling interests in ARP are reflected as an adjustment to net income in ATLS’
consolidated statements of operations and as a component of unitholders’ equity on its consolidated balance sheets. A
consolidating statement of operations and balance sheet have also been provided in the financial tables to this release for the
comparable periods presented. Please refer to the ARP first quarter 2016 earnings release for additional details on its
financial results. |
|
(1) A reconciliation of GAAP net income (loss) to
Distributable Cash Flow is provided in the financial tables of this release. Please see footnote 1 to the Financial Information
table of this release.
|
ARP’s First Quarter 2016 Highlights
- Average net daily production for the first quarter 2016 was 237.0 million cubic feet equivalents per day (“Mmcfed") compared
to 270.8 Mmcfed in the first quarter 2015. The decrease in net production from the prior year quarter was due primarily to
temporarily shutting in older, mature production across ARP’s footprint, in response to the continued weaker commodity price
environment.
- ARP's net realized price for natural gas including the effect of hedge positions was $3.41 per thousand cubic feet (“mcf")
for the first quarter 2016, compared to $3.42 per mcf for the fourth quarter 2015. Net realized oil prices including the effect
of hedge positions averaged $77.16 per barrel for the first quarter 2016, compared to $85.26 for the fourth quarter 2015.
- Investment partnership margin contributed $3.0 million to Adjusted EBITDA for the first quarter 2016 compared with $5.0
million for the previous quarter. The $2.0 million decrease in investment partnership margin was due to lower amounts of capital
deployed during the first quarter 2016 due to scheduled changes in well drilling activity.
- During the first quarter 2016, ARP was approximately 76% hedged on its net natural gas production and approximately 99%
hedged on its net oil production. During the quarter ended March 31, 2016, ARP received approximately $48.7 million of cash
from realized natural gas and oil hedge positions.
AGP’s First Quarter 2016 Highlights
AGP had net daily production of over 7,800 thousand cubic feet equivalent per day (“Mcfed”) in the first quarter
2016, compared to average daily net production of approximately 6,600 Mcfed in the fourth quarter 2015. AGP connected two
additional wells in the Eagle Ford shale during the first quarter 2016. AGP recently had its Form S-1 for its continuous $1 billion
public offering declared effective by the Securities and Exchange Commission on April 5, 2016.
Corporate Expenses
- Cash general and administrative expense, excluding amounts attributable to AGP and ARP, was $0.6 million for the first
quarter 2016, compared to $1.4 million for the fourth quarter 2015. The decrease in expense from the prior quarter was due
primarily to the timing of certain seasonal costs.
- Cash interest expense was $1.5 million for the first quarter 2016, compared to $1.7 million for the fourth quarter 2015. ATLS
had approximately $70.6 million of debt on its balance sheet at March 31, 2016, and a cash position of approximately $4.4
million.
ATLS will be discussing its first quarter 2016 results on an investor call with management on Tuesday, May 17,
2016 at 9:00 am Eastern Time. Interested parties are invited to access the live webcast of the investor call by going to the
Investor Relations section of Atlas Energy's website at www.atlasenergy.com. For those unavailable to listen to the live broadcast, the replay of the
webcast will be available following the live call on the Atlas Energy website and telephonically beginning at approximately 12:30
p.m. ET on May 17, 2016 by dialing 855-859-2056, passcode: 10307133.
Atlas Energy Group, LLC (OTCQX:ATLS) is a limited liability company which owns the following
interests: all of the general partner interest, incentive distribution rights and an approximate 23% limited partner interest in
its upstream oil & gas subsidiary, Atlas Resource Partners, L.P.; a general partner interest, incentive distribution rights and
limited partner interests in Atlas Growth Partners, L.P.; and a general partner interest in Lightfoot Capital Partners, an entity
that invests directly in energy-related businesses and assets. For more information, please visit its website at www.atlasenergy.com, or contact Investor Relations at InvestorRelations@atlasenergy.com.
Atlas Resource Partners, L.P. (NYSE:ARP) is an exploration & production master limited
partnership which owns an interest in over 14,500 natural gas and oil wells, located primarily in Appalachia, the Eagle Ford Shale
(TX), the Barnett Shale (TX), the Mississippi Lime (OK), the Raton Basin (NM), the Black Warrior Basin (AL), the Arkoma Basin (OK)
and the Rangely Field in Colorado. ARP is also the largest sponsor of natural gas and oil investment partnerships in the U.S.
For more information, please visit its website at www.atlasresourcepartners.com, or contact Investor Relations at InvestorRelations@atlasenergy.com.
Cautionary Note Regarding
Forward-Looking Statements
This press release contains forward-looking statements that involve a number of assumptions, risks
and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. ATLS
cautions readers that any forward-looking information is not a guarantee of future performance. Such forward-looking statements
include, but are not limited to, statements about future financial and operating results, resource and production potential,
planned expansions of capacity and other capital expenditures, distribution amounts, ATLS’ and its subsidiaries’ plans, objectives,
expectations and intentions and other statements that are not historical facts. Risks, assumptions and uncertainties that could
cause actual results to materially differ from the forward-looking statements include, but are not limited to, those associated
with general economic and business conditions; ability to realize the benefits of its acquisitions; changes in commodity prices and
hedge positions; changes in the costs and results of drilling operations; uncertainties about estimates of reserves and resource
potential; inability to obtain capital needed for operations; ATLS’ and its subsidiaries’ level of indebtedness, potential changes
to ATLS or its subsidiaries capital structure, including refinancing, restructuring, or reorganizing its indebtedness; leverage and
liquidity, including reductions in its borrowing base that may require repayment, and covenant compliance; changes in government
environmental policies and other environmental risks; the availability of drilling equipment and the timing of production; tax
consequences of business transactions; and other risks, assumptions and uncertainties detailed from time to time in ATLS’, ARP's,
and AGP’s reports filed with the U.S. Securities and Exchange Commission, including quarterly reports on Form 10-Q, current reports
on Form 8-K, and annual reports on Form 10-K. Forward-looking statements speak only as of the date hereof, and ATLS assumes no
obligation to update such statements, except as may be required by applicable law.
ATLAS ENERGY GROUP, LLC
COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per unit data) |
|
|
Three Months Ended |
|
March 31, |
Revenues: |
|
2016 |
|
|
|
2015 |
|
Gas and oil production |
$ |
51,593 |
|
|
$ |
106,560 |
|
Well construction and completion |
|
2,100 |
|
|
|
23,655 |
|
Gathering and processing |
|
1,495 |
|
|
|
2,184 |
|
Administration and oversight |
|
455 |
|
|
|
1,259 |
|
Well services |
|
4,432 |
|
|
|
6,624 |
|
Gain on mark-to-market derivatives |
|
46,453 |
|
|
|
105,585 |
|
Other, net |
|
325 |
|
|
|
(68 |
) |
Total revenues |
|
106,853 |
|
|
|
245,799 |
|
|
|
|
|
Costs and expenses: |
|
|
|
Gas and oil production |
|
36,656 |
|
|
|
45,989 |
|
Well construction and completion |
|
1,826 |
|
|
|
20,570 |
|
Gathering and processing |
|
2,279 |
|
|
|
2,417 |
|
Well services |
|
2,178 |
|
|
|
2,198 |
|
General and administrative |
|
21,920 |
|
|
|
41,928 |
|
Depreciation, depletion and amortization |
|
34,272 |
|
|
|
44,456 |
|
Total costs and expenses |
|
99,131 |
|
|
|
157,558 |
|
|
|
|
|
Operating income |
|
7,722 |
|
|
|
88,241 |
|
|
|
|
|
Gain (loss) on asset sales and disposal |
|
9 |
|
|
|
(11 |
) |
Gain on early extinguishment of debt, net |
|
20,445 |
|
|
|
− |
|
Interest expense |
|
(29,448 |
) |
|
|
(34,751 |
) |
|
|
|
|
Net income (loss) |
|
(1,272 |
) |
|
|
53,479 |
|
Preferred unitholders’ dividends |
|
(339 |
) |
|
|
(333 |
) |
Income attributable to non-controlling interests |
|
(5,340 |
) |
|
|
(58,298 |
) |
Net loss attributable to unitholders’/owner’s interests |
$ |
(6,951 |
) |
|
$ |
(5,152 |
) |
|
|
|
|
Allocation of net loss attributable to unitholders/owner’s
interests: |
Portion applicable to owner’s interest (period prior to the transfer of
assets on February 27, 2015) |
$ |
− |
|
|
$ |
(10,475 |
) |
Portion applicable to unitholders’ interest (period subsequent to the
transfer of assets on February 27, 2015) |
|
(6,951 |
) |
|
|
5,323 |
|
Net loss attributable to unitholders’/owner’s interests |
$ |
(6,951 |
) |
|
$ |
(5,152 |
) |
|
|
|
|
Net income (loss) attributable to unitholders per common
unit: |
Basic |
$ |
(0.27 |
) |
|
$ |
0.20 |
|
Diluted |
$ |
(0.27 |
) |
|
$ |
0.18 |
|
|
|
|
|
Weighted average common units
outstanding: |
Basic |
|
26,028 |
|
|
|
26,011 |
|
Diluted |
|
26,028 |
|
|
|
30,976 |
|
ATLAS ENERGY GROUP, LLC
COMBINED CONSOLIDATED BALANCE SHEETS
(unaudited; in thousands) |
|
|
|
March 31, |
|
December 31, |
ASSETS |
|
|
2016 |
|
|
|
2015 |
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
47,994 |
|
|
$ |
31,214 |
|
Accounts receivable |
|
|
59,381 |
|
|
|
65,920 |
|
Current portion of derivative asset |
|
|
160,059 |
|
|
|
159,763 |
|
Subscriptions receivable |
|
|
− |
|
|
|
19,877 |
|
Prepaid expenses and other |
|
|
16,666 |
|
|
|
22,997 |
|
Total current assets |
|
|
284,100 |
|
|
|
299,771 |
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
1,295,637 |
|
|
|
1,316,897 |
|
Intangible assets, net |
|
|
423 |
|
|
|
456 |
|
Goodwill, net |
|
|
13,639 |
|
|
|
13,639 |
|
Long-term derivative asset |
|
|
195,267 |
|
|
|
198,371 |
|
Other assets, net |
|
|
54,713 |
|
|
|
54,112 |
|
Total assets |
|
$ |
1,843,779 |
|
|
$ |
1,883,246 |
|
|
|
|
|
|
LIABILITIES AND UNITHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
48,985 |
|
|
$ |
52,550 |
|
Liabilities associated with drilling contracts |
|
|
− |
|
|
|
21,483 |
|
Accrued interest |
|
|
10,177 |
|
|
|
25,452 |
|
Accrued well drilling and completion costs |
|
|
4,731 |
|
|
|
33,555 |
|
Accrued liabilities |
|
|
34,138 |
|
|
|
45,014 |
|
Current portion of long-term debt |
|
|
976,795 |
|
|
|
4,250 |
|
Total current liabilities |
|
|
1,074,826 |
|
|
|
182,304 |
|
|
|
|
|
|
Long-term debt, less current portion, net |
|
|
647,604 |
|
|
|
1,568,064 |
|
Asset retirement obligations and other |
|
|
127,708 |
|
|
|
124,919 |
|
|
|
|
|
|
Unitholders’ equity (deficit): |
|
|
|
|
Common unitholders’ deficit |
|
|
(108,159 |
) |
|
|
(103,148 |
) |
Series A preferred equity |
|
|
40,740 |
|
|
|
40,875 |
|
Accumulated other comprehensive income |
|
|
3,498 |
|
|
|
4,284 |
|
|
|
|
(63,921 |
) |
|
|
(57,989 |
) |
Non-controlling interests |
|
|
57,562 |
|
|
|
65,948 |
|
Total unitholders’ equity (deficit) |
|
|
(6,359 |
) |
|
|
7,959 |
|
Total liabilities and unitholders’ equity
(deficit) |
|
$ |
1,843,779 |
|
|
$ |
1,883,246 |
|
ATLAS ENERGY GROUP, LLC
Financial and Operating Highlights
(unaudited) |
|
|
Three Months Ended |
|
March 31, |
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
Net income (loss) attributable to unitholders per common unit -
basic |
$ |
(0.27 |
) |
|
$ |
0.20 |
|
|
|
|
|
Production volume: (1)(2) |
|
|
|
ATLAS GROWTH: |
|
|
|
Natural gas (Mcfd) |
|
500 |
|
|
|
728 |
|
Oil (Bpd) |
|
1,138 |
|
|
|
490 |
|
Natural gas liquids (Bpd) |
|
85 |
|
|
|
100 |
|
Total (Mcfed) |
|
7,839 |
|
|
|
4,268 |
|
ATLAS RESOURCE: |
|
|
|
Natural gas (Mcfd) |
|
194,550 |
|
|
|
227,340 |
|
Oil (Bpd) |
|
4,563 |
|
|
|
5,533 |
|
Natural gas liquids (Bpd) |
|
2,509 |
|
|
|
3,488 |
|
Total (Mcfed) |
|
236,983 |
|
|
|
281,463 |
|
TOTAL: |
|
|
|
Natural gas (Mcfd) |
|
195,051 |
|
|
|
228,068 |
|
Oil (Bpd) |
|
5,701 |
|
|
|
6,023 |
|
Natural gas liquids (Bpd) |
|
2,594 |
|
|
|
3,588 |
|
Total (Mcfed) |
|
244,821 |
|
|
|
285,731 |
|
|
|
|
|
Average realized sales prices:(2) |
|
|
|
ATLAS GROWTH: |
|
|
|
Natural gas (per Mcf) |
$ |
1.91 |
|
|
$ |
2.70 |
|
Oil (per Bbl) (4) |
$ |
30.62 |
|
|
$ |
45.68 |
|
Natural gas liquids (per Bbl) |
$ |
10.34 |
|
|
$ |
13.25 |
|
ATLAS RESOURCE: |
|
|
|
Natural gas (per Mcf) (3) |
$ |
3.41 |
|
|
$ |
3.58 |
|
Oil (per Bbl)(4) |
$ |
77.16 |
|
|
$ |
80.81 |
|
Natural gas liquids (per Bbl) (5) |
$ |
8.31 |
|
|
$ |
22.49 |
|
|
|
|
|
Production costs per Mcfe:(2)(6) |
|
|
|
ATLAS GROWTH: |
|
|
|
Lease operating expenses per Mcfe |
$ |
0.85 |
|
|
$ |
0.94 |
|
Production taxes per Mcfe |
|
0.21 |
|
|
|
0.31 |
|
Transportation and compression expenses per Mcfe |
|
0.08 |
|
|
|
0.03 |
|
Total production costs per Mcfe |
$ |
1.14 |
|
|
$ |
1.28 |
|
ATLAS RESOURCE: |
|
|
|
Lease operating expenses per Mcfe |
$ |
1.25 |
|
|
$ |
1.35 |
|
Production taxes per Mcfe |
|
0.18 |
|
|
|
0.24 |
|
Transportation and compression expenses per Mcfe |
|
0.26 |
|
|
|
0.23 |
|
Total production costs per Mcfe |
$ |
1.69 |
|
|
$ |
1.82 |
|
TOTAL: |
|
|
|
Lease operating expenses per Mcfe |
$ |
1.24 |
|
|
$ |
1.35 |
|
Production taxes per Mcfe |
|
0.18 |
|
|
|
0.24 |
|
Transportation and compression expenses per Mcfe |
|
0.25 |
|
|
|
0.22 |
|
Total production costs per Mcfe |
$ |
1.67 |
|
|
$ |
1.81 |
|
(1) Production quantities consist of the sum of (i) the
proportionate share of production from wells in which AGP and ARP have a direct interest, based on the proportionate net
revenue interest in such wells, and (ii) ARP’s proportionate share of production from wells owned by the investment
partnerships in which ARP has an interest, based on its equity interest in each such partnership and based on each
partnership’s proportionate net revenue interest in these wells. |
|
(2) “Mcf” and “Mcfd” represent thousand cubic feet
and thousand cubic feet per day; “Mcfe” and “Mcfed” represent thousand cubic feet equivalents and thousand cubic feet
equivalents per day, and “Bbl” and “Bpd” represent barrels and barrels per day. Barrels are converted to Mcfe using the
ratio of six Mcf’s to one barrel. |
|
(3) ARP’s average sales prices for natural gas
before the effects of financial hedging were $1.78 per Mcf and $2.54 per Mcf for the three months ended March 31, 2016 and
2015, respectively. ARP’s amounts exclude the impact of subordination of ARP’s production revenues to investor partners within
its investor partnerships. Including the effects of this subordination, ARP’s average natural gas sales prices were $3.37
per Mcf ($1.74 per Mcf before the effects of financial hedging) and $3.53 per Mcf ($2.48 per Mcf before the effects of
financial hedging) for the three months ended March 31, 2016 and 2015, respectively. |
|
(4) AGP’s average sales price for oil
before the effects of financial hedging was $28.33 per barrel for the three months ended March 31, 2016. There was no hedging
activity during the three months ended March 31, 2015. ARP’s average sales prices for oil before the effects of financial
hedging were $29.51 per barrel and $43.46 per barrel for the three months ended March 31, 2016 and 2015, respectively. |
|
(5) There was no effect of financial
hedging on ARP’s average sales price for natural gas liquids for the three months ended March 31, 2016. ARP’s average sales
price for natural gas liquids before the effects of financial hedging was $14.10 per barrel for the three months ended March
31, 2015.
|
|
(6) Production costs include labor to operate the
wells and related equipment, repairs and maintenance, materials and supplies, property taxes, severance taxes, insurance,
production overhead and transportation and compression expenses. These amounts exclude the effects of ARP’s proportionate
share of lease operating expenses associated with subordination of production revenue to investor partners within ARP’s
investor partnerships. Including the effects of these costs, ARP’s lease operating expenses per Mcfe were $1.23 per Mcfe
($1.66 per Mcfe for total production costs) and $1.33 per Mcfe ($1.80 per Mcfe for total production costs) for the three months
ended March 31, 2016 and 2015, respectively. Including the effects of these costs, total lease operating expenses per Mcfe were
$1.21 per Mcfe ($1.65 per Mcfe for total production costs) and $1.32 per Mcfe ($1.79 per Mcfe for total production costs) for
the three months ended March 31, 2016 and 2015, respectively.
|
|
ATLAS ENERGY GROUP, LLC
Financial Information
(unaudited; in thousands except per unit amounts) |
|
|
Three Months Ended |
|
March
31, |
Reconciliation of net income (loss) to non-GAAP
measures(1): |
|
2016 |
|
|
|
2015 |
|
Net income (loss) |
$ |
(1,272 |
) |
|
$ |
53,479 |
|
Distributable cash flow not attributable to unitholders prior to February 27, 2015
(the asset transfer date)(2) |
|
— |
|
|
|
(4,291 |
) |
Atlas Resource net income attributable to unitholders |
|
(3,286 |
) |
|
|
(25,184 |
) |
Atlas Resource cash distributions earned by ATLS(3) |
|
1,877 |
|
|
|
9,334 |
|
Atlas Growth net loss attributable to unitholders |
|
45 |
|
|
|
64 |
|
Atlas Growth cash distributions earned by ATLS(3) |
|
154 |
|
|
|
72 |
|
Non-recurring spinoff and acquisition costs |
|
— |
|
|
|
17,174 |
|
Amortization of deferred finance costs and predecessor |
|
|
|
|
|
|
|
Term Loan interest expense |
|
247 |
|
|
|
8,551 |
|
Non-cash stock compensation expense |
|
2,111 |
|
|
|
20 |
|
Preferred unit distributions |
|
(339 |
) |
|
|
(333 |
) |
Loss on early extinguishment of debt, net |
|
6,053 |
|
|
|
— |
|
Other non-cash adjustments |
|
260 |
|
|
|
557 |
|
Income attributable to non-controlling interests |
|
(5,340 |
) |
|
|
(58,298 |
) |
Distributable Cash Flow attributable to
unitholders(1) |
$ |
510 |
|
|
$ |
1,145 |
|
|
|
|
|
Supplemental Adjusted EBITDA and Distributable Cash Flow
Summary: |
Atlas Resource Cash Distributions Earned(3): |
|
|
|
Limited Partner Units |
$ |
1,799 |
|
|
$ |
8,726 |
|
Series A Preferred Units (2%) |
|
78 |
|
|
|
608 |
|
Incentive Distribution Rights |
|
— |
|
|
|
— |
|
Total Atlas Resource Cash Distributions
Earned(3) |
|
1,877 |
|
|
|
9,334 |
|
per limited partner unit |
$ |
0.025 |
|
|
$ |
0.325 |
|
|
|
|
|
Atlas Growth Cash Distributions Earned(3) |
|
154 |
|
|
|
72 |
|
|
|
|
|
Total Cash Distributions Earned |
|
2,031 |
|
|
|
9,406 |
|
|
|
|
|
Cash general and administrative expenses(4) |
|
(613 |
) |
|
|
(3,365 |
) |
Other, net |
|
927 |
|
|
|
731 |
|
Adjusted EBITDA(1) |
|
2,345 |
|
|
|
6,772 |
|
Cash interest expense(5) |
|
(1,496 |
) |
|
|
(1,003 |
) |
Preferred unit distributions |
|
(339 |
) |
|
|
(333 |
) |
Distributable Cash Flow(1) |
$ |
510 |
|
|
$ |
5,436 |
|
Distributable cash flow not attributable to unitholders prior to February 27, 2015
(the asset transfer date)(2) |
|
— |
|
|
|
(4,291 |
) |
Distributable Cash Flow attributable to
unitholders(1) |
$ |
510 |
|
|
$ |
1,145 |
|
|
|
|
|
|
|
|
|
(1) EBITDA and Distributable Cash Flow are relevant and useful because
they help ATLS’ investors understand its operating performance, allow for easier comparison of its results with other master
limited partnerships (“MLP”), and are critical components in the determination of quarterly cash distributions. As a MLP, ATLS
is required to distribute 100% of available cash, as defined in its limited partnership agreement (“Available Cash”) and
subject to cash reserves established by its general partner, to investors on a quarterly basis. ATLS refers to Available
Cash prior to the establishment of cash reserves as DCF. EBITDA, Adjusted EBITDA and DCF should not be considered in isolation
of, or as a substitute for, net income as an indicator of operating performance or cash flows from operating activities as a
measure of liquidity. While ATLS’ management believes that its methodology of calculating EBITDA, Adjusted EBITDA and DCF is
generally consistent with the common practice of other MLPs, such metrics may not be consistent and, as such, may not be
comparable to measures reported by other MLPs, who may use other adjustments related to their specific businesses. EBITDA,
Adjusted EBITDA and DCF are supplemental financial measures used by ATLS’ management and by external users of ATLS’ financial
statements such as investors, lenders under its credit facilities, research analysts, rating agencies and others to assess
its: |
• Operating performance as compared to other publicly traded
partnerships and other companies in the upstream and midstream energy sectors, without regard to financing methods, historical
cost basis or capital structure; |
• Ability to generate sufficient cash flows to support its distributions
to unitholders; |
• Ability to incur and service debt and fund capital expansion; |
• Viability of potential acquisitions and other capital expenditure
projects; and |
• Ability to comply with financial covenants in its debt facility, which
is calculated based upon Adjusted EBITDA. |
DCF is determined by calculating EBITDA, adjusting it for non-cash, non-recurring and
other items to achieve Adjusted EBITDA, and then deducting cash interest expense and maintenance capital expenditures.
ATLS defines EBITDA as net income (loss) plus the following adjustments: |
• Interest expense; |
• Income tax expense; |
• Depreciation, depletion and amortization. |
ATLS defines Adjusted EBITDA as EBITDA plus the following adjustments: |
• Cash distributions paid by ARP and AGP within 45 days after the end of
the respective quarter, based upon their distributable cash flow generated during that quarter; |
• Asset impairments; |
• Acquisition and related costs; |
• Non-cash stock compensation; |
• (Gains) losses on asset sales and disposal; |
• Cash proceeds received from monetization of derivative
transactions; |
• Amortization of premiums paid on swaption derivative contracts;
and |
• Other items. |
ATLS adjusts DCF for non-cash, non-recurring and other items for the sole purpose of
evaluating its cash distribution for the quarterly period, with EBITDA and Adjusted EBITDA adjusted in the same manner for
consistency. ATLS defines DCF as Adjusted EBITDA less the following adjustments: |
• Cash interest expense; and |
• Preferred unit distributions. |
(2) In accordance with prevailing accounting literature, ATLS has
adjusted its historical financial statements to present them combined with the historical financial results of the spin-off
assets for all periods prior to its spin-off date of February 27, 2015. |
(3) Represents the cash distribution paid by ARP and AGP within 45
days after the end of each quarter, based upon the distributable cash flow generated during the respective quarter. |
(4) Excludes non-cash stock compensation expense and certain
non-recurring spinoff costs and acquisition and related costs. |
(5) Excludes non-cash amortization of deferred financing costs. |
ATLAS ENERGY GROUP, LLC
CAPITALIZATION INFORMATION
(unaudited; in thousands) |
|
|
March 31,
2016 |
|
Atlas |
|
Atlas |
|
|
|
|
Energy |
|
Resource |
|
Consolidated |
|
Total debt |
$ |
70,639 |
|
|
$ |
1,553,760 |
|
|
$ |
1,624,399 |
|
|
Less: Cash |
|
(28,709 |
) |
|
|
(19,285 |
) |
|
|
(47,994 |
) |
|
Total net debt |
|
41,930 |
|
|
|
1,534,475 |
|
|
|
1,576,405 |
|
|
|
|
|
|
|
|
|
Unitholders’ equity (deficit) |
|
68,322 |
|
|
|
(83,481 |
) |
|
(6,359)(1) |
|
|
|
|
|
|
|
|
Total capitalization |
$ |
110,252 |
|
|
$ |
1,450,994 |
|
|
$ |
1,570,046 |
|
|
|
|
|
|
|
|
|
Ratio of net debt to capitalization |
0.38x |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net of eliminated amounts. |
|
|
|
|
|
|
December 31,
2015 |
|
Atlas |
|
Atlas |
|
|
|
|
Energy |
|
Resource |
|
Consolidated |
|
Total debt |
$ |
68,887 |
|
|
$ |
1,503,427 |
|
|
$ |
1,572,314 |
|
|
Less: Cash |
|
(29,861 |
) |
|
|
(1,353 |
) |
|
|
(31,214 |
) |
|
Total net debt |
|
39,026 |
|
|
|
1,502,074 |
|
|
|
1,541,100 |
|
|
|
|
|
|
|
|
|
Unitholders’ equity (deficit) |
|
83,922 |
|
|
|
(84,628 |
) |
|
7,959(2) |
|
|
|
|
|
|
|
|
Total capitalization |
$ |
122,948 |
|
|
$ |
1,417,446 |
|
|
$ |
1,549,059 |
|
|
|
|
|
|
|
|
|
Ratio of net debt to capitalization |
0.32x |
|
|
|
|
|
|
|
|
|
|
|
|
(2) Net of eliminated amounts. |
|
|
|
|
|
ATLAS ENERGY GROUP,
LLC
CONSOLIDATING STATEMENTS OF OPERATIONS
(unaudited; in thousands) |
|
Three Months Ended March 31, 2016 |
|
|
Atlas |
|
Atlas |
|
|
|
|
|
Energy |
|
Resource |
|
Eliminations |
|
Consolidated |
Revenues: |
|
|
|
|
|
|
|
Gas and oil production |
$ |
3,101 |
|
|
$ |
48,492 |
|
|
$ |
− |
|
$ |
51,593 |
|
Well construction and completion |
− |
|
|
2,100 |
|
|
− |
|
|
2,100 |
|
Gathering and processing |
− |
|
|
1,495 |
|
|
− |
|
|
1,495 |
|
Administration and oversight |
− |
|
|
455 |
|
|
− |
|
|
455 |
|
Well services |
− |
|
|
4,432 |
|
|
− |
|
|
4,432 |
|
Gain on mark-to-market derivatives |
|
333 |
|
|
|
46,120 |
|
|
− |
|
|
46,453 |
|
Other, net |
|
211 |
|
|
|
114 |
|
|
− |
|
|
325 |
|
Total revenues |
|
3,645 |
|
|
|
103,208 |
|
|
− |
|
|
106,853 |
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
Gas and oil production |
|
814 |
|
|
|
35,842 |
|
|
− |
|
|
36,656 |
|
Well construction and completion |
− |
|
|
1,826 |
|
|
− |
|
|
1,826 |
|
Gathering and processing |
− |
|
|
2,279 |
|
|
− |
|
|
2,279 |
|
Well services |
− |
|
|
2,178 |
|
|
− |
|
|
2,178 |
|
General and administrative |
|
4,843 |
|
|
|
17,077 |
|
|
− |
|
|
21,920 |
|
Depreciation, depletion and amortization |
|
4,227 |
|
|
|
30,045 |
|
|
− |
|
|
34,272 |
|
Total costs and expenses |
|
9,884 |
|
|
|
89,247 |
|
|
− |
|
|
99,131 |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
(6,239 |
) |
|
|
13,961 |
|
|
− |
|
|
7,722 |
|
|
|
|
|
|
|
|
|
Gain on asset sales and disposal |
− |
|
|
9 |
|
|
− |
|
|
9 |
|
Gain (loss) on early extinguishment of debt,
net |
|
(6,053 |
) |
|
|
26,498 |
|
|
− |
|
|
20,445 |
|
Interest expense |
|
(1,743 |
) |
|
|
(27,705 |
) |
|
− |
|
|
(29,448 |
) |
|
|
|
|
|
|
|
|
Net income (loss) |
|
(14,035 |
) |
|
|
12,763 |
|
|
− |
|
|
(1,272 |
) |
Preferred unitholders’ dividends |
|
(339 |
) |
|
− |
|
− |
|
|
(339 |
) |
Income attributable to non-controlling interests |
− |
|
− |
|
|
(5,340 |
) |
|
|
(5,340 |
) |
Net income (loss) attributable to unitholders’ interests |
$ |
(14,374 |
) |
|
$ |
12,763 |
|
|
$ |
(5,340 |
) |
|
$ |
(6,951 |
) |
|
|
|
|
|
|
|
|
ATLAS ENERGY GROUP,
LLC
COMBINED CONSOLIDATING STATEMENTS OF OPERATIONS
(unaudited; in thousands)
|
|
Three Months Ended March 31, 2015 |
|
|
Atlas |
|
Atlas |
|
|
|
|
|
Energy |
|
Resource |
|
Eliminations |
|
Consolidated |
Revenues: |
|
|
|
|
|
|
|
Gas and oil production |
$ |
2,311 |
|
|
$ |
104,249 |
|
|
$ |
− |
|
$ |
106,560 |
|
Well construction and completion |
− |
|
|
23,655 |
|
|
− |
|
|
23,655 |
|
Gathering and processing |
− |
|
|
2,184 |
|
|
− |
|
|
2,184 |
|
Administration and oversight |
− |
|
|
1,259 |
|
|
− |
|
|
1,259 |
|
Well services |
− |
|
|
6,624 |
|
|
− |
|
|
6,624 |
|
Gain on mark-to-market derivatives |
− |
|
|
105,585 |
|
|
− |
|
|
105,585 |
|
Other, net |
|
(101 |
) |
|
|
33 |
|
|
− |
|
|
(68 |
) |
Total revenues |
|
2,210 |
|
|
|
243,589 |
|
|
− |
|
|
245,799 |
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
Gas and oil production |
|
491 |
|
|
|
45,498 |
|
|
− |
|
|
45,989 |
|
Well construction and completion |
− |
|
|
20,570 |
|
|
− |
|
|
20,570 |
|
Gathering and processing |
− |
|
|
2,417 |
|
|
− |
|
|
2,417 |
|
Well services |
− |
|
|
2,198 |
|
|
− |
|
|
2,198 |
|
General and administrative |
|
24,793 |
|
|
|
17,135 |
|
|
− |
|
|
41,928 |
|
Depreciation, depletion and amortization |
|
1,465 |
|
|
|
42,991 |
|
|
− |
|
|
44,456 |
|
Total costs and expenses |
|
26,749 |
|
|
|
130,809 |
|
|
−
|
|
|
157,558 |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
(24,539 |
) |
|
|
112,780 |
|
|
− |
|
|
88,241 |
|
|
|
|
|
|
|
|
|
Loss on asset sales and disposal |
− |
|
|
(11 |
) |
|
− |
|
|
(11 |
) |
Interest expense |
|
(9,554 |
) |
|
|
(25,197 |
) |
|
− |
|
|
(34,751 |
) |
|
|
|
|
|
|
|
|
Net income (loss) |
|
(34,093 |
) |
|
|
87,572 |
|
|
− |
|
|
53,479 |
|
Preferred unitholders’ dividends |
|
(333 |
) |
|
− |
|
− |
|
|
(333 |
) |
Income attributable to non-controlling interests |
− |
|
− |
|
|
(58,298 |
) |
|
|
(58,298 |
) |
Net income (loss) attributable to unitholders’ / owners’
interests |
$ |
(34,426 |
) |
|
$ |
87,572 |
|
|
$ |
(58,298 |
) |
|
$ |
(5,152 |
) |
|
|
|
|
|
|
|
|
ATLAS ENERGY GROUP, LLC
CONDENSED CONSOLIDATING BALANCE SHEETS
(unaudited; in thousands) |
March 31, 2016 |
|
|
Atlas |
|
Atlas |
|
|
|
|
ASSETS |
Energy |
|
Resource |
|
Eliminations |
|
Consolidated |
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
28,709 |
|
|
$ |
19,285 |
|
|
$ |
− |
|
|
$ |
47,994 |
|
Accounts receivable |
|
3,168 |
|
|
|
57,152 |
|
|
|
(939 |
) |
|
|
59,381 |
|
Receivable from (advances from) affiliates |
|
(10,997 |
) |
|
|
10,997 |
|
|
− |
|
− |
Current portion of derivative asset |
|
314 |
|
|
|
159,745 |
|
|
− |
|
|
160,059 |
|
Prepaid expenses and other |
|
31 |
|
|
|
16,635 |
|
|
− |
|
|
16,666 |
|
Total current assets |
|
21,225 |
|
|
|
263,814 |
|
|
|
(939 |
) |
|
|
284,100 |
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
120,592 |
|
|
|
1,175,045 |
|
|
− |
|
|
1,295,637 |
|
Intangible assets, net |
− |
|
|
423 |
|
|
− |
|
|
423 |
|
Goodwill, net |
− |
|
|
13,639 |
|
|
− |
|
|
13,639 |
|
Long-term derivative asset |
|
193 |
|
|
|
195,074 |
|
|
− |
|
|
195,267 |
|
Investment in subsidiaries |
|
(7,861 |
) |
|
− |
|
|
7,861 |
|
|
− |
Other assets, net |
|
22,272 |
|
|
|
31,502 |
|
|
|
939 |
|
|
|
54,713 |
|
|
$ |
156,421 |
|
|
$ |
1,679,497 |
|
|
$ |
7,861 |
|
|
$ |
1,843,779 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND UNITHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
2,865 |
|
|
$ |
46,120 |
|
|
$ |
− |
|
|
$ |
48,985 |
|
Accrued interest |
|
43 |
|
|
|
10,134 |
|
|
− |
|
|
10,177 |
|
Accrued well drilling and completion costs |
|
678 |
|
|
|
4,053 |
|
|
− |
|
|
4,731 |
|
Accrued liabilities |
|
9,792 |
|
|
|
25,285 |
|
|
|
(939 |
) |
|
|
34,138 |
|
Current portion of long-term debt |
|
70,639 |
|
|
|
906,156 |
|
|
− |
|
|
976,795 |
|
Total current liabilities |
|
84,017 |
|
|
|
991,748 |
|
|
|
(939 |
) |
|
|
1,074,826 |
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion, net |
− |
|
|
647,604 |
|
|
− |
|
|
647,604 |
|
Asset retirement obligations and other |
|
4,082 |
|
|
|
123,626 |
|
|
− |
|
|
127,708 |
|
|
|
|
|
|
|
|
|
Unitholders’ equity (deficit): |
|
|
|
|
|
|
|
Common unitholders’ deficit |
|
(108,159 |
) |
|
− |
|
− |
|
|
(108,159 |
) |
Series A preferred equity |
|
40,740 |
|
|
− |
|
− |
|
|
40,740 |
|
Partners’ deficit |
− |
|
|
(99,341 |
) |
|
|
99,341 |
|
|
− |
Accumulated other comprehensive income |
|
3,498 |
|
|
|
15,860 |
|
|
|
(15,860 |
) |
|
|
3,498 |
|
|
|
(63,921 |
) |
|
|
(83,481 |
) |
|
|
83,481 |
|
|
|
(63,921 |
) |
Non-controlling interests |
|
132,243 |
|
|
− |
|
|
(74,681 |
) |
|
|
57,562 |
|
Total unitholders’ equity (deficit) |
|
68,322 |
|
|
|
(83,481 |
) |
|
|
8,800 |
|
|
|
(6,359 |
) |
|
$ |
156,421 |
|
|
$ |
1,679,497 |
|
|
$ |
7,861 |
|
|
$ |
1,843,779 |
|
ATLAS ENERGY GROUP, LLC
COMBINED CONDENSED CONSOLIDATING BALANCE SHEETS
(unaudited; in thousands)
|
December 31, 2015 |
|
|
Atlas |
|
Atlas |
|
|
|
|
ASSETS |
Energy |
|
Resource |
|
Eliminations |
|
Consolidated |
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
29,861 |
|
|
$ |
1,353 |
|
|
$ |
− |
|
|
$ |
31,214 |
|
Accounts receivable |
|
3,492 |
|
|
|
63,367 |
|
|
|
(939 |
) |
|
|
65,920 |
|
Receivable from (advances
to) affiliates |
|
9,924 |
|
|
|
(9,924 |
) |
|
− |
|
− |
Current portion of derivative asset |
|
303 |
|
|
|
159,460 |
|
|
− |
|
|
159,763 |
|
Subscriptions receivable |
− |
|
|
19,877 |
|
|
− |
|
|
19,877 |
|
Prepaid expenses and other |
|
62 |
|
|
|
22,935 |
|
|
− |
|
|
22,997 |
|
Total current assets |
|
43,642 |
|
|
|
257,068 |
|
|
|
(939 |
) |
|
|
299,771 |
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
125,286 |
|
|
|
1,191,611 |
|
|
− |
|
|
1,316,897 |
|
Intangible assets, net |
− |
|
|
456 |
|
|
− |
|
|
456 |
|
Goodwill, net |
− |
|
|
13,639 |
|
|
− |
|
|
13,639 |
|
Long-term derivative asset |
|
109 |
|
|
|
198,262 |
|
|
− |
|
|
198,371 |
|
Investment in subsidiaries |
|
(7,726 |
) |
|
− |
|
|
7,726 |
|
|
− |
Other assets, net |
|
24,184 |
|
|
|
28,989 |
|
|
|
939 |
|
|
|
54,112 |
|
|
$ |
185,495 |
|
|
$ |
1,690,025 |
|
|
$ |
7,726 |
|
|
$ |
1,883,246 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND UNITHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
3,301 |
|
|
$ |
49,249 |
|
|
$ |
− |
|
|
$ |
52,550 |
|
Liabilities associated with
drilling contracts |
− |
|
|
21,483 |
|
|
− |
|
|
21,483 |
|
Accrued interest |
|
16 |
|
|
|
25,436 |
|
|
− |
|
|
25,452 |
|
Accrued well drilling and
completion costs |
|
6,641 |
|
|
|
26,914 |
|
|
− |
|
|
33,555 |
|
Accrued liabilities |
|
16,959 |
|
|
|
28,994 |
|
|
|
(939 |
) |
|
|
45,014 |
|
Current portion of long-term debt |
|
4,250 |
|
|
− |
|
− |
|
|
4,250 |
|
Total current liabilities |
|
31,167 |
|
|
|
152,076 |
|
|
|
(939 |
) |
|
|
182,304 |
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion,
net |
|
64,637 |
|
|
|
1,503,427 |
|
|
− |
|
|
1,568,064 |
|
Asset retirement obligations and other |
|
5,769 |
|
|
|
119,150 |
|
|
− |
|
|
124,919 |
|
|
|
|
|
|
|
|
|
Unitholders’ equity (deficit): |
|
|
|
|
|
|
|
Common unitholders’ deficit |
|
(103,148 |
) |
|
− |
|
− |
|
|
(103,148 |
) |
Series A preferred equity |
|
40,875 |
|
|
− |
|
− |
|
|
40,875 |
|
Partners’ deficit |
− |
|
|
(104,003 |
) |
|
|
104,003 |
|
|
− |
Accumulated other comprehensive income |
|
4,284 |
|
|
|
19,375 |
|
|
|
(19,375 |
) |
|
|
4,284 |
|
|
|
(57,989 |
) |
|
|
(84,628 |
) |
|
|
84,628 |
|
|
|
(57,989 |
) |
Non-controlling interests |
|
141,911 |
|
|
− |
|
|
(75,963 |
) |
|
|
65,948 |
|
Total unitholders’ equity (deficit) |
|
83,922 |
|
|
|
(84,628 |
) |
|
|
8,665 |
|
|
|
7,959 |
|
|
$ |
185,495 |
|
|
$ |
1,690,025 |
|
|
$ |
7,726 |
|
|
$ |
1,883,246 |
|
ATLAS ENERGY GROUP, LLC
Ownership Interests Summary
|
|
Atlas Energy Ownership Interests as of May 16, 2016: |
Amount |
|
Overall
Ownership
Interest
Percentage |
|
|
|
|
ATLAS RESOURCE: |
|
|
|
General partner interest |
|
100 |
% |
|
|
2.0 |
% |
Common units |
|
20,962,485 |
|
|
|
19.7 |
% |
Preferred units |
|
3,749,986 |
|
|
|
3.5 |
% |
Incentive distribution rights |
|
100 |
% |
|
|
N/A |
|
Total Atlas Energy ownership interests in Atlas Resource |
|
|
|
25.2 |
% |
|
|
|
|
ATLAS GROWTH: |
|
|
|
General partner interest |
|
80.0 |
% |
|
|
2.0 |
% |
Common units |
|
500,010 |
|
|
|
2.1 |
% |
Incentive distribution rights |
|
80.0 |
% |
|
|
N/A |
|
Total Atlas Energy ownership interests in Atlas Growth |
|
|
|
4.1 |
% |
|
|
|
|
LIGHTFOOT CAPITAL PARTNERS, GP LLC: |
|
|
|
Approximate general partner ownership interest |
|
|
|
15.4 |
% |
Approximate limited partner ownership interest |
|
|
|
12.0 |
% |
CONTACT: Matthew Skelly Vice President – Head of Investor Relations Atlas Energy Group, LLC (877) 280-2857 (215) 405-2718 (fax)