DALLAS–(BUSINESS WIRE)–Southcross Energy Partners, L.P. (NYSE:SXE) (“Southcross” or the “Partnership”) today announced that the board of directors of its general partner has declared a cash distribution for the third quarter of 2015 of $0.40 per common unit. The distribution will be paid on November 13, 2015 to unitholders of record on November 9, 2015.
Southcross also announced that anticipated financial results for the third quarter of 2015 include the benefit of improved processed gas volumes and the early results of management initiatives to reduce operating and general & administrative expenses. As a result, Southcross expects to report third quarter 2015 Adjusted EBITDA above the previously reported guidance range and distributable cash flow that corresponds to a cash distribution coverage of greater than 1.0 times the announced quarterly cash distribution on common units. Southcross will release its third quarter 2015 results before the New York Stock Exchange opens for trading on Friday, November 6, 2015 and will host a conference call for investors at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) on that date to discuss third quarter 2015 financial and operating results.
Under the terms of its partnership agreement, Southcross will pay a $0.3257 per unit distribution for the third quarter of 2015 on its Class B Convertible Units. Southcross will issue Class B Convertible units to the holders of such units in lieu of cash distributions.
Southcross Holdings LP, the owner of the Partnership’s general partner and all of the Partnership’s subordinated units, previously elected to forgo distributions on any subordinated units that would cause the Partnership’s distributions to exceed its distributable cash flow for any quarterly period. This election will continue until the Partnership has distributable cash flow in excess of total distributions on the Partnership’s common and subordinated units. Additionally, Southcross has further restrictions on its ability to pay distributions on the subordinated units in accordance with a leverage based grid under its amended revolving credit facility. As a result of the revolving credit facility restrictions, it is not anticipated that distributions on the subordinated units will be made in the third quarter.
Tax Notice
This release serves as qualified notice to nominees under Treasury Regulation Sections 1.1446-4(b) (4) and (d). Please note that 100.0% of the Partnership’s distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of the Partnership’s distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable. Nominees, and not the Partnership, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
Forward-Looking Statements
This press release includes certain statements concerning expectations for the future that are forward-looking within the meaning of the federal securities laws. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements, and may contain the words “expect,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “will be,” “will continue,” “will likely result,” and similar expressions, or future conditional verbs such as “may,” “will,” “should,” “would” and “could.” Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include expectations regarding Adjusted EBITDA, distributable cash flow and the Partnership’s coverage ratio. Although Southcross believes the expectations and forecasts reflected in these and other forward-looking statements are reasonable, Southcross can give no assurance they will prove to be correct. Forward-looking statements contain known and unknown risks and uncertainties (many of which are difficult to predict and beyond management’s control) that may cause Southcross’ actual results in future periods to differ materially from anticipated or projected results. An extensive list of specific material risks and uncertainties affecting Southcross is contained in its Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 6, 2015, as updated in its Current Report on Form 8-K filed with the SEC on August 20, 2015, and in other documents and reports filed from time to time with the SEC. Any forward-looking statements in this press release are made as of the date hereof and Southcross undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.
About Southcross Energy Partners, L.P.
Southcross Energy Partners, L.P. is a master limited partnership that provides natural gas gathering, processing, treating, compression and transportation services and natural gas liquids (“NGL”) fractionation and transportation services. It also sources, purchases, transports and sells natural gas and NGLs. Its assets are located in South Texas, Mississippi and Alabama and include four gas processing plants, two fractionation plants and approximately 3,200 miles of pipeline. The South Texas assets are located in or near the Eagle Ford shale region. Southcross is headquartered in Dallas, Texas. Visit www.southcrossenergy.com for more information.