OCI Partners LP (NYSE:OCIP) Files An 8-K Results of Operations and Financial ConditionItem 2.02
Results of Operations and Financial Condition
OCI Partners LP (NYSE:OCIP) Files An 8-K Results of Operations and Financial Condition
In anticipation of its meetings with debt investors, the Partnership today released selected preliminary unaudited results for the year ended December 31, 2017. Total revenues increased 33% to $343 million compared to $258 million for the year ended December 31, 2016. Net income improved to $24 million compared to a net loss of $51 million for the year ended December 31, 2016. EBITDA increased 116% to $127 million compared to $59 million for the year ended December 31, 2016. The overall improvement in revenue and EBITDA is primarily attributed to the increase in the average sales price per metric ton of methanol.
The following table includes certain selected summary financial data for the years ended December 31, 2017 and 2016. The data below is in thousands, except for product pricing.
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Years Ended December31, |
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2017 |
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(unaudited) |
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STATEMENT OF OPERATIONS DATA |
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Revenues: |
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Ammonia |
$ |
76,546 |
$ |
83,978 |
|
Methanol |
266,764 |
174,236 |
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Other |
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Total revenues |
$ |
343,325 |
$ |
258,229 |
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BALANCE SHEET DATA |
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Cash and cash equivalents |
$ |
16,275 |
$ |
8,080 |
|
Revolving credit facility, net |
$ |
15,977 |
$ |
|
|
Revolving credit facility—related party |
$ |
$ |
35,000 |
|
|
Term loan facility, net |
$ |
223,428 |
$ |
225,748 |
|
Term loan facility—related party |
$ |
200,000 |
$ |
200,000 |
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OTHER FINANCIAL DATA |
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EBITDA |
$ |
126,595 |
$ |
58,567 |
|
Purchase of property, plant and equipment |
$ |
2,148 |
$ |
6,785 |
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KEY OPERATING DATA |
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Products sold (thousand tons): |
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Ammonia |
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Methanol |
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Products pricing (average dollars per ton): |
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Ammonia |
$ |
$ |
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|
Methanol |
$ |
$ |
The preliminary unaudited results of presented above are based on information available to management as of the date of this filing. The information for the year ended December 31, 2017 is based on management’s internal reporting and is subject to adjustment for year-end closing procedures. The Partnership has prepared the preliminary financial information included above and its independent registered public accounting firm has not performed any audit, review or set of procedures with respect to such financial information. A review of such financial information could result in changes to these preliminary results. Actual results of operations may be materially different from the results provided herein, and you should not place undue reliance on these preliminary results. In addition, the preliminary results are not necessarily indicative of results of operations for any future period.
Reconciliation of Non-GAAP Financial Measures
EBITDA is defined as net income (loss) plus (i) interest expense and other financing costs, (ii) income tax expense and (iii) depreciation expense. EBITDA is used as a supplemental financial measure by management and by external users of the Partnership's unaudited financial statements, such as investors and commercial banks, to assess:
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the financial performance of the Partnership's assets without regard to financing methods, capital structure or historical cost basis; and |
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the Partnership's operating performance and return on invested capital compared to those of other publicly traded partnerships, without regard to financing methods and capital structure. |
EBITDA should not be considered as an alternative to net income, operating income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA may have material limitations as a performance measure because it excludes items that are necessary elements of the Partnership's costs and operations. In addition, EBITDA presented by other companies may not be comparable to the Partnership's presentation because each company may define EBITDA differently.
The table below reconciles EBITDA to net income, its most directly comparable financial measure calculated and presented in accordance with GAAP, for the years endedDecember 31, 2017 and 2016(dollars in thousands).
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Years Ended December31, |
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(unaudited) |
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Net income (loss) |
$ |
24,479 |
$ |
(50,553 |
) |
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Add: |
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Interest expense |
22,857 |
45,096 |
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Interest expense—related party |
17,339 |
1,777 |
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Depreciation expense |
61,045 |
61,441 |
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Income tax expense |
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EBITDA |
$ |
126,595 |
$ |
58,567 |
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Item 2.02 |
Regulation FD Disclosure |
Note above and the information in Item 2.02 of this Current Report on Form 8-K are incorporated by reference into this Item 2.02.
The information being furnished under Items 2.02 and 7.01 of this report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and is not and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.
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About OCI Partners LP (NYSE:OCIP)
OCI Partners LP owns and operates an integrated methanol and ammonia production facility that is located on the Texas Gulf Coast near Beaumont. The Company has an annual methanol production capacity of approximately 912,500 metric tons and an annual ammonia production capacity of approximately 331,000 metric tons. It purchases natural gas from third parties and processes the natural gas into synthesis gas, which it then further processes in the production of methanol and ammonia. It stores and sells the processed methanol and ammonia to industrial and commercial customers for further processing or distribution. Its methanol production unit comprises Foster-Wheeler-designed twin steam methane reformers for synthesis gas production, over two Lurgi-designed parallel low-pressure, water-cooled reactors and approximately four distillation columns. The Haldor-Topsoe-designed ammonia synthesis loop at its facility processes hydrogen produced by methanol production process.