American Midstream Reports Fourth Quarter and Full Year 2013 Financial Results

American Midstream Partners, LP (NYSE: AMID) ("the Partnership") today reported financial results for the three months and year ended December 31, 2013. The Partnership reported gross margin (a non-GAAP measure) for the fourth quarter of 2013 of $23.6 million, an increase of $11.7 million or 98.3 percent, compared to $11.9 million in the same period in 2012. For the year ended December 31, 2013, the Partnership reported gross margin of $76.6 million, an increase of $27.9 million or 57.3 percent, compared to $48.7 million in the same period in the prior year. The increase in gross margin for the three months and year ended December 31, 2013 was primarily due to higher gross margin in the Partnership's Transmission segment as a result of the April 2013 acquisition of the High Point system in addition to the December 2013 acquisition of Blackwater Midstream Holdings, LLC, a developer and operator of terminal storage facilities ("Blackwater"). High Point and Blackwater were acquired from affiliates of ArcLight Capital Partners, LLC ("ArcLight"), which controls the Partnership's general partner. Accordingly, the acquisitions are accounted for as transactions under common control pursuant to applicable accounting standards, which requires that the Partnership's financial statements be recast to include both acquisitions as of April 15, 2013. The increase in gross margin was also partially attributable to higher gross margin in the Gathering and Processing segment due to improved condensate production. The higher gross margin was partially offset by lower margins associated with the Partnership's percent-of-proceeds and elective processing agreements in the Gathering and Processing segment.

Adjusted EBITDA (a non-GAAP measure) for the three months and year ended December 31, 2013 was $10.5 million and $31.9 million, respectively, compared to $2.9 million and $18.8 million for the same periods in 2012, increases of 262.1 percent and 69.7 percent, respectively. The year-over-year increase in adjusted EBITDA was primarily attributable to the High Point and Blackwater acquisitions described above, partially offset by increases in direct operating expenses and selling, general and administrative expenses associated with the Chatom, High Point and Blackwater acquisitions in 2012 and 2013.

Distributable cash flow ("DCF") (a non-GAAP measure) for the three months and year ended December 31, 2013 was $6.3 million and $16.2 million, respectively, after cash distributions related to the Series A convertible preferred units that were issued in April 2013 to High Point Infrastructure Partners, LLC, an affiliate of ArcLight. DCF for the three months ended December 31, 2013 represents a distribution coverage ratio of 1.17. The fourth quarter 2013 distribution of $5.4 million, or $0.4525 per common unit, was paid on February 14, 2014 to unitholders of record as of February 7, 2014.

Reconciliations of the non-GAAP measures gross margin, Adjusted EBITDA, and DCF to Net income (loss) attributable to the Partnership, the most directly comparable GAAP measure, are provided in the tables in this press release.

Net loss attributable to the Partnership for the three months and year ended December 31, 2013 was $5.6 million and $34.0 million, respectively, compared to net loss of $6.3 million and $6.5 million for the same periods in 2012. Net loss attributable to the Partnership for the three months ended December 31, 2013, includes a $0.6 million non-cash loss on impairment of assets held for sale in the Terminals segment and a $3.0 million non-cash loss on impairment of certain gathering and processing assets. During the first quarter of 2014, the board of directors of our general partner gave approval to the management team to pursue the sale of the gathering and processing assets. As a result, the assets were written down by $3.0 million in the fourth quarter of 2013. The increase in the net loss for the year ended December 31, 2013 was primarily a result of non-cash asset impairment charges of $17.0 million on certain non-strategic gathering and processing assets in the second quarter and the fourth quarter impairment charges discussed above.

BUSINESS HIGHLIGHTS

Blackwater Acquisition

On December 17, 2013, the Partnership completed the acquisition of Blackwater for approximately $60 million. Blackwater operates 1.3 million barrels of storage capacity across four terminal sites located in Westwego, Louisiana; Brunswick, Georgia; Harvey, Louisiana; and Salisbury, Maryland. These terminal sites provide storage services to support various commercial customers, including commodity brokers, refiners, and chemical manufacturers, to store a range of products, including crude oil, bunker fuel, distillates, chemicals and agricultural products.

In conjunction with the acquisition, the Partnership issued 2,568,712 common units representing limited partner interests in the Partnership in a public offering at a price to the public of $22.47 per common unit for net proceeds of $54.9 million.

PVA Acquisition

On January 31, 2014, the Partnership acquired, from Penn Virginia Corporation ("PVA"), a natural gas gathering system and associated facilities located in the Eagle Ford shale in Gonzales and Lavaca Counties, Texas (the "Lavaca System")for approximately $100 million. In conjunction with the PVA acquisition, the Partnership issued 3,400,000 common units representing limited partner interests in a public offering at a price to the public of $26.75 per common unit for net proceeds of $87.3 million. In addition, the Partnership issued the Partnership's general partner 1,168,225 Series B PIK Units representing series B limited partnership interests in the Partnership. Net proceeds from the public offering and Series B PIK Units were $117.3 million.

EXECUTIVE COMMENTARY

"2013 was a transformational year for American Midstream and we finished the year with strong fourth quarter and full-year financial results,” stated Steve Bergstrom, Executive Chairman, President and Chief Executive Officer. "Our EBITDA and DCF for the fourth quarter and full year are record results for American Midstream and are directly related to steps we took to strengthen the Partnership for long-term growth. During 2013, ArcLight completed a strategic investment in our general partner, we added scale and incremental cash flow to the Partnership with the High Point and Blackwater acquisitions, increased distributable cash flow available to common unitholders through the equity restructuring, and increased distributions per unit by nearly 5 percent while also significantly improving distribution coverage. We also strengthened our management team, implemented meaningful improvements to our existing operations, and improved our leverage ratio.

“We recently completed two equity offerings to finance the December acquisition of Blackwater and the January acquisition of Eagle Ford midstream assets from Penn Virginia. These acquisitions diversify our cash flow, provide significant growth opportunities, and increase our fee-based gross margin. Importantly, in conjunction with the acquisitions we announced our intent to recommend to our Board that we increase our quarterly distributions for both the first quarter and the third quarter 2014.

“As we look ahead, we are focused on making 2014 a productive year for the Partnership with the goal of significantly increasing the size and scale of American Midstream, diversifying geographically into some of the rapidly growing basins in the US, and delivering long-term sustainable distribution growth to our unitholders.”

SEGMENT PERFORMANCE

Gathering and Processing - The Gathering and Processing segment includes natural gas transportation, gathering, treating, processing, fractionation, and selling or delivering natural gas and natural gas liquids ("NGLs") to various markets and pipeline systems.

Segment gross margin for the Gathering and Processing segment was $8.0 million and $36.5 million for the three months and year ended December 31, 2013, respectively, compared to $8.1 million and $35.4 million for the same periods in 2012. The increase in segment gross margin for the year ended December 31, 2013 was primarily due to higher average condensate production as a result of the Chatom system partially offset by lower volumes on one of the offshore pipeline systems, and lower realized gains on commodity derivatives as a result of lower-priced hedges in 2013 compared to 2012.

Natural gas throughput volumes averaged 298.2 million cubic feet per day ("MMcf/d") and 277.2 MMcf/d for the three months and year ended December 31, 2013, respectively, compared to 209.7 MMcf/d and 291.2 MMcf/d for the same periods in 2012. Processed NGLs averaged 49.6 thousand gallons per day ("Mgal/d") and 52.0 Mgal/d for the three months and year ended December 31, 2013, respectively, compared to 38.5 Mgal/d and 49.9 Mgal/d for the same periods in 2012. The full-year decrease in throughput was primarily due to lower volumes on an offshore pipeline system. Processed NGLs increased primarily as a result of higher production on the Chatom system.

Transmission - The Transmission segment transports and delivers natural gas from producing wells, receipt points, or pipeline interconnects to pipeline or end-use markets. Segment gross margin for the Transmission segment was $13.0 million and $32.4 million for the three months and year ended December 31, 2013, respectively, compared to $3.8 million and $13.3 million for the same periods in 2012. The increase in segment gross margin was primarily due to the acquisition of the High Point system.

Total natural gas throughput volumes averaged 743.8 MMcf/d and 644.7 MMcf/d for the three months and year ended December 31, 2013, respectively, compared to 365.2 MMcf/d and 398.5 MMcf/d for the same periods in 2012. The full year increase in throughput volume was primarily due to the additional volumes contributed by the High Point system.

Terminals - The Terminals segment provides above-ground storage services at the Partnership's marine terminals that support various commercial customers, including commodity brokers, refiners and chemical manufacturers to store a range of products, including crude oil, bunker fuel, distillates, chemicals and agricultural products. Segment gross margin for the Terminals segment was $2.7 million and $7.8 million for the three months ended December 31, 2013 and the period from April 15, 2013 through December 31, 2013, respectively.

DERIVATIVES

The Partnership enters into derivative agreements to hedge exposure to commodity prices associated with natural gas, NGLs, and crude oil. As of December 31, 2013, approximately 12 percent of the Partnership's exposure to NGL prices and approximately 14 percent of the Partnership's exposure to oil prices are hedged through the end of 2014. Details regarding the Partnership's hedge program are found in its annual report.

BALANCE SHEET

As of December 31, 2013, the Partnership had $0.4 million of cash on hand, and $135.5 million outstanding under its senior secured revolving credit facility with $64.5 million of available borrowing capacity.

CAPITAL EXPENDITURES

For the three months and year ended December 31, 2013, capital expenditures totaled $4.8 million and $27.6 million, respectively, primarily related to growth capital of $4.1 million and $20.5 million, and maintenance capital expenditures of $0.6 million and $6.1 million, respectively.

2014 ADJUSTED EBITDA, DCF AND GROWTH CAPITAL EXPENDITURE FORECAST

The Partnership's forecast for 2014 adjusted EBITDA and DCF remains in a range of $41 million to $44 million and $21 million to $24 million, respectively, based on its current forecast of operational volumes and prices for crude oil, natural gas, natural gas liquids, and derivative instruments currently outstanding. Growth capital expenditures in 2014, which exclude maintenance capital, are forecasted to be in a range of $55 million to $60 million, of which approximately $30 million is associated with the Lavaca System.

CONFERENCE CALL

The Partnership will host a conference call and webcast to discuss its fourth quarter and year end 2013 financial results on Tuesday, March 11, 2014, at 10:00 a.m. Eastern Time. The call may be accessed live at the investor relations section of the Partnership's website at www.AmericanMidstream.com. The call may also be accessed by dialing 877-703-6103 for domestic users or 857-244-7302 for international users. The passcode for both phone numbers is 29920208.

A replay of the audio webcast will be available shortly after the call on the Partnership's website. A telephonic replay will be available through April 10, 2014, by dialing 888-286-8010 for domestic users or 617-801-6888 for international users. The passcode for both phone numbers is 19348728.

Non-GAAP Financial Measures

This press release and the accompanying tables, include financial measures in accordance with U.S. generally accepted accounting principles, or GAAP, as well as non-GAAP financial measures, including “Adjusted EBITDA,” “Gross Margin,” and “Distributable Cash Flow.” The tables included in this press release include reconciliations of these non-GAAP financial measures to the nearest GAAP financial measures. In addition, an “Explanation of Non-GAAP Financial Measures” is set forth in Appendix A attached to this press release.

About American Midstream Partners, LP.

Denver-based American Midstream Partners is a growth-oriented limited partnership formed to own, operate, develop and acquire a diversified portfolio of midstream energy assets. The Partnership provides midstream services in the Texas, Gulf Coast and Southeast regions of the United States. For more information about American Midstream Partners, visit www.AmericanMidstream.com.

Forward Looking Statements

This press release includes forward-looking statements. These statements relate to, among other things, projections of operational volumetrics and improvements, growth projects, cash flows and capital expenditures. We have used the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "potential," and similar terms and phrases to identify forward-looking statements in this press release. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our operations and future growth involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors which are described in greater detail in our filings with the SEC. Please see our Risk Factor disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2012, filed on April 16, 2013, and in subsequent filings with the Securities and Exchange Commission. All future written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. The forward-looking statements herein speak as of the date of this press release. We undertake no obligation to update any information contained herein or to publicly release the results of any revisions to any forward-looking statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of this press release.

Appendix A

Note About Non-GAAP Financial Measures

Gross margin, adjusted EBITDA and distributable cash flows are all non-GAAP financial measures. Each has important limitations as an analytical tool because it excludes some, but not all, items that affect the most directly comparable GAAP financial measures. Management compensates for the limitations of these non-GAAP measures as analytical tools by reviewing the comparable GAAP measures, understanding the differences between the measures and incorporating these data points into management’s decision-making process.

You should not consider any of gross margin, adjusted EBITDA or distributable cash flow in isolation or as a substitute for analysis of our results as reported under GAAP. Gross margin, adjusted EBITDA and distributable cash flow may be defined differently by other companies in our industry. Our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

We define adjusted EBITDA as net income, plus interest expense, income tax expense, depreciation expense, certain non-cash charges such as non-cash equity compensation, unrealized losses on commodity derivative contracts and selected charges that are unusual or nonrecurring, less interest income, income tax benefit, unrealized gains on commodity derivative contracts, amortization of commodity put purchase costs, and selected gains that are unusual or nonrecurring. The GAAP measure most directly comparable to adjusted EBITDA is net income.

Distributable cash flow is a significant performance metric used by us and by external users of our financial statements, such as investors, commercial banks and research analysts, to compare basic cash flows generated by us to the cash distributions we expect to pay our unitholders. Using this metric, management and external users of our financial statements can quickly compute the coverage ratio of estimated cash flows to planned cash distributions. Distributable cash flow is also an important financial measure for our unitholders since it serves as an indicator of our success in providing a cash return on investment. Specifically, this financial measure may indicate to investors whether we are generating cash flow at a level that can sustain or support an increase in our quarterly distribution rates. Distributable cash flow is also a quantitative standard used throughout the investment community with respect to publicly traded partnerships and limited liability companies because the value of a unit of such an entity is generally determined by the unit's yield (which in turn is based on the amount of cash distributions the entity pays to a unitholder). Distributable cash flow will not reflect changes in working capital balances.

We define distributable cash flow as adjusted EBITDA plus interest income, less cash paid for interest expense, normalized maintenance capital expenditures, and dividends related to the Series A convertible preferred units. The GAAP measure most comparable to distributable cash flow is net income.

Gross margin and segment gross margin are metrics that we use to evaluate our performance. We define segment gross margin in our Gathering and Processing segment as revenue generated from gathering and processing operations, realized gain (loss) on commodity derivatives less COMA less the cost of natural gas, NGLs and condensate purchased. Revenue includes revenue generated from fixed fees associated with the gathering and treating of natural gas and from the sale of natural gas, NGLs and condensate resulting from gathering and processing activities under fixed-margin and percent-of-proceeds arrangements. The cost of natural gas, NGLs and condensate includes volumes of natural gas, NGLs and condensate remitted back to producers pursuant to percent-of-proceeds arrangements and the cost of natural gas purchased for our own account, including pursuant to fixed-margin arrangements.

We define segment gross margin in our Transmission segment as revenue generated from firm and interruptible transportation agreements and fixed-margin arrangements, plus other related fees, less COMA, less the cost of natural gas purchased in connection with fixed-margin arrangements.

We define segment gross margin in our Terminals segment as revenue, less direct operating expenses.

We define gross margin as the sum of our segment gross margin for our Gathering and Processing, Transmission and Terminals segments. The GAAP measure most comparable to gross margin is net income.