Free 7-day Trial
All Articles and Columns »

MarkWest Energy Partners L.P. Reports Operating Results (10-K)

February 28, 2011 | About:
10qk

10qk

18 followers
MarkWest Energy Partners L.P. (MWE) filed Annual Report for the period ended 2010-12-31.

Markwest Energy Partners Lp has a market cap of $3.19 billion; its shares were traded at around $44.7 with a P/E ratio of 55.88 and P/S ratio of 4.33. The dividend yield of Markwest Energy Partners Lp stocks is 5.82%. Markwest Energy Partners Lp had an annual average earning growth of 2.8% over the past 10 years.Hedge Fund Gurus that owns MWE: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns MWE: Mario Gabelli of GAMCO Investors, John Keeley of Keeley Fund Management.

Highlight of Business Operations:

In July 2010, we entered into an amended and restated credit agreement that provides for a revolving loan facility ("Credit Facility") of up to $705 million, with an uncommitted accordion feature of up to $195 million. For further discussion, please see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 17 of the accompanying Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

On February 24, 2011, we closed a public offering of $300 million aggregate principal amount of 6.5% senior notes due 2021 ("2021 Senior Notes"). We received net proceeds of approximately $296 million after deducting the underwriting fees and other third-party expenses associated with the offering. We used the net proceeds to fund our concurrent repurchase of approximately $272.2 million in aggregate principal amount of our 8.5% senior notes due 2016 (the "2016 Senior Notes"), representing approximately 99% of the outstanding 2016 Senior Notes, pursuant to our tender offer for any and all of the outstanding 2016 Senior Notes. The tender offer for the 2016 Senior Notes will expire on March 9, 2011. Assuming no additional 2016 Senior Notes are tendered for repurchase prior to the expiration of the tender offer, we will record a pre-tax loss on redemption of debt of approximately $21 million in the first quarter of 2011, which will consist of approximately $1 million for the non-cash write off of the unamortized discount and deferred finance costs and approximately $20 million for the payment of the related tender premiums and third-party expenses.

On February 9, 2011, we commenced a tender offer for up to $125 million aggregate principal amount ("Tender Cap") of our outstanding 8.75% senior notes due 2018 (the "2018 Senior Notes"). On February 23, 2011, the Tender Cap was increased to $170 million and as of such date, holders of the 2018 Senior Notes had tendered approximately $165.5 million in aggregate principal amount of the outstanding 2018 Senior Notes for repurchase at various bid prices within the acceptable range of

$1,090.00 to $1,115.00 per $1,000 principal amount. The tender offer for the 2018 Senior Notes will expire on March 9, 2011. Assuming we complete the repurchase of the $165.5 million in aggregate principal amount of 2018 Senior Notes tendered for repurchase as of February 23, 2011 and no additional 2018 Senior Notes are tendered for repurchase prior to the expiration of the tender offer for the 2018 Senior Notes, we will record a pre-tax loss on redemption of debt of approximately $22 million in the first quarter of 2011, which will consist of approximately $3 million for the non-cash write off of the unamortized discount and deferred finance costs and approximately $19 million for the payment of the related tender premiums and third-party expenses.

Developing long-term integrated relationships with our producer customers. As a top-rated midstream service provider, we develop long-term, integrated relationships with key producer customers as evidenced by our relationships with the primary producers in the Woodford Shale, the Granite Wash, the Marcellus Shale and the Huron/Berea Shale. We will continue to develop relationships that are characterized by joint planning for the development of the emerging resource plays and our commitment to grow to meet the specific needs of our customers. Expanding operations through organic growth projects. By expanding our existing infrastructure and customer relationships, we intend to continue growing in our primary areas of operation to meet the anticipated demand for additional midstream services. During 2010, we spent approximately $458.7 million of total capital to develop midstream infrastructure in the Marcellus Shale through MarkWest Liberty Midstream and to expand several of our gathering and processing operations in our Southwest segment, including the Woodford gathering system in the Arkoma Basin, and the Stiles Ranch gathering system included in our western Oklahoma operations. Expanding operations through strategic acquisitions. We intend to continue pursuing strategic acquisitions of assets and businesses in our existing areas of operation that leverage our current asset base, personnel and customer relationships. We may also seek to acquire assets in certain regions outside of our current areas of operation. We believe that our capital structure, which no longer includes incentive distribution rights, positions us to compete more effectively for future transactions. Maintaining our financial flexibility. Our goal is to maintain a capital structure with approximately equal amounts of debt and equity on a long-term basis. During 2010 and the first quarter of 2011, we strategically accessed the debt and equity markets to fund our planned expansion projects and to effectively refinance a significant portion of our senior notes to realize lower interest rates and to extend the maturity dates. See Note 17 and Note 30 of the accompanying Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for further discussion of the recent transactions related to our senior notes. We also entered into an amendment to our credit agreement to expand the borrowing capacity under our Credit Facility from $435.6 million to $705.0 million and to extend the term of our Credit Facility to July 2015. 8

As of December 31, 2010, we and our wholly-owned subsidiaries had approximately $63.9 million of cash and cash equivalents and approximately $677.6 million available for borrowing under our Credit Facility. We believe that our Credit Facility, our ability to issue additional partnership units and long-term debt, and our strong relationships with our existing joint venture partners will provide us with the financial flexibility to facilitate the execution of our business strategy.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 2.8/5 (6 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide