Form 8-K Hi-Crush Partners LP For: Feb 03

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February 3, 2015 6:03 AM EST


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
���_______________________________
Form�8-K
��_______________________________�
CURRENT REPORT
Pursuant to Section�13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):�February 3, 2015
��_______________________________�
Hi-Crush Partners LP
(Exact name of registrant as specified in its charter)
���_______________________________
Delaware
(State or other jurisdiction of incorporation)
�
�
�
�
001-35630
�
90-0840530
(Commission
File Number)
�
(IRS Employer
Identification No.)
�
�
Three Riverway
Suite 1550
Houston, Texas
�
77056
(Address of principal executive offices)
�
(Zip Code)
(713) 960-4777
(Registrants telephone number, including area code)
(Not Applicable)
(Former name or former address, if changed since last report)
��_______________________________
�
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following (See General Instruction A.2 below):
�
Written communications pursuant to Rule�425 under the Securities Act (17 CFR 230.425)
�
Soliciting material pursuant to Rule�14a-12 under the Exchange Act (17 CFR 240.14a-12)
�
Pre-commencement communications pursuant to Rule�14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
�
Pre-commencement communications pursuant to Rule�13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
�
�
�
�
�
�
�






Item�2.02. Results of Operations and Financial Condition
On February 3, 2015, Hi-Crush Partners LP (the Partnership) issued a press release announcing its fourth quarter 2014 February 3, 2015 conference call. The press release and presentation slides are being furnished with this Current Report on Form 8-K as Exhibits�99.1 and 99.2, respectively.
In accordance with General Instruction B.2 to Form 8-K, the information provided under this Item�2.02 and the information attached to this Form 8-K as Exhibit 99.1 and Exhibit 99.2 shall be deemed to be furnished and shall not be deemed to be filed for purposes of Section�18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing.
Item�9.01 - Financial Statements and Exhibits
(d) Exhibits
�
Exhibit Number
��
Exhibit Description
�
�
99.1
��
Press Release dated February 3, 2015 announcing fourth quarter 2014 financial results.
�
�
�
99.2
�
Presentation slides.










































SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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�
Hi-Crush Partners LP
�
�
�
�
�
�
�
�
�
�
�
By:
�
Hi-Crush GP LLC, its general partner
�
�
�
�
�
�
�
Date: February 3, 2015
�
�
�
By:
�
/s/ Laura C. Fulton
�
�
�
�
�
�
Laura C. Fulton
�
�
�
�
�
�
Chief Financial Officer



















































INDEX TO EXHIBITS
�
Exhibit Number
��
Exhibit Description
�
�
�
99.1
��
Press Release dated February 3, 2015 announcing fourth quarter 2014 financial results
99.2
�
Presentation slides





Exhibit 99.1
News Release

Hi-Crush Partners LP Reports Record Fourth Quarter and Full-Year 2014 Results

"
4Q14 Revenues of $131 million vs. $64 million in 4Q13
"
4Q14 EBITDA of $45 million vs. $24 million in 4Q13
"
$1.03 earnings per unit before allocations of income to IDRs
"
$0.85 basic and diluted earnings per unit

Houston, Texas, February 3, 2015 - Hi-Crush Partners LP (NYSE: HCLP), Hi-Crush or the Partnership, today reported record fourth quarter and full year 2014 results. Net income for the quarter was $38.4 million. The limited partners' interest in net income of $38.1 million for the fourth quarter of 2014 represents earnings of $1.03 per weighted average common and subordinated units outstanding during the period. For purposes of calculating earnings per unit, $6.8 million of limited partners' interest in net income was allocated to the holder of incentive distribution rights, resulting in reported basic and diluted earnings per unit of $0.85 per common and subordinated unit.

The Partnership reported earnings before interest, taxes and depreciation and amortization (EBITDA) of $44.6 million for the fourth quarter of 2014. Distributable cash flow of $32.7 million attributable to the common and subordinated unitholders for the fourth quarter of 2014 corresponds to distribution coverage of 1.31 times the $24.9 million in distributions to be paid to common and subordinated unitholders on February 13, 2015.

2014 was an exceptional year for Hi-Crush, said James M. Whipkey, Co-Chief Executive Officer of Hi-Crush.� We nearly doubled our produced volumes. We further reduced our already low production cost per ton, and we increased our distributable cash flow by over 60%. All of these factors allowed Hi-Crush to increase its distribution by more than 32% during the year, placing us near the top of the entire MLP universe in this parameter. In addition, over the course of 2014 we solidified our top-tier position in the industry by providing our customers with premier white sand, delivering a full suite of services and best-in-class logistics.

Revenues for the quarter ended December 31, 2014 totaled $130.9 million on sales of 1.5 million tons of frac sand sold, and transload services. Approximately 90% of the volumes sold were under long-term fixed price contracts.

Revenues for the year ended December 31, 2014 totaled $386.5 million on 4.6 million tons of frac sand sold, and transload services, compared to revenues of $179.0 million on 2.5 million tons of frac sand sold for the year ended December 31, 2013.

While there are headwinds entering 2015, the industry remains focused on efficiency, quality and execution, said Robert E. Rasmus, Co-Chief Executive Officer of Hi-Crush. Over 88% of our and our sponsor's 2015 production, or 6.6 million tons, is committed under long term take-or-pay contracts. While the volatility in the market continues, we are confident in the strength of our balance sheet, the quality of our assets and the solid foundation of our relationships. We continue to be the low-cost leader in the sector and we are prepared for the challenges and looking forward to the opportunities in 2015.

Production cost for sand produced and delivered from the Wyeville and Augusta facilities was $15.72 per ton during the quarter. Of the 1.5 million tons sold, approximately 1.0 million tons were produced and delivered from the Partnership's facilities, with the remainder being purchased from the sponsor's Whitehall facility or from third parties.

On January 15, 2015, Hi-Crush declared its fourth quarter cash distribution of $0.675 per unit for all common and subordinated units, or $2.70 on an annualized basis. This amount corresponds to a 42% increase from the minimum quarterly cash distribution of $0.475 per unit and a 8% increase over the previous quarters distribution. The distribution will be paid on February 13, 2015 to all common and subordinated unitholders of record on January 30, 2015.









Conference Call
A conference call for investors will be held on Tuesday February 3, 2015 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss Hi-Crushs fourth quarter and year-end results. Hosting the call will be Robert E. Rasmus, Co-Chief Executive Officer, James M. Whipkey, Co-Chief Executive Officer and Laura C. Fulton, Chief Financial Officer. The call can be accessed live over the telephone by dialing (877) 407-3982, or for international callers, (201) 493-6780. A replay will be available shortly after the call and can be accessed by dialing (877) 870-5176, or for international callers (858) 384-5517. The passcode for the replay is 13599881. The replay will be available until February 17, 2015.
Interested parties may also listen to a simultaneous webcast of the conference call by logging onto Hi-Crushs website at www.hicrushpartners.com in the Investors-Event Calendar and Presentations section. A replay of the webcast will also be available for approximately 30 days following the call.
The slide presentation to be referenced on the call will also be on Hi-Crushs website at www.hicrushpartners.com in the Investors-Event Calendar and Presentations section.
Non-GAAP Financial Measures
This news release and the accompanying schedules include the non-GAAP financial measure of EBITDA, Distributable Cash Flow and Production Costs, which may be used periodically by management when discussing our financial results with investors and analysts. The accompanying schedules of this news release provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States of America (GAAP). EBITDA, Distributable Cash Flow and Production Costs are presented as management believes the data provides a measure of operating performance that is unaffected by historical cost basis and provides additional information and metrics relative to the performance of our business.

About Hi-Crush
Hi-Crush is an integrated producer, transporter, marketer and distributor of high-quality monocrystalline sand, a specialized mineral that is used as a proppant to enhance the recovery rates of hydrocarbons from oil and natural gas wells. Our reserves, which are located in Wisconsin, consist of "Northern White" sand, a resource that exists predominately in Wisconsin and limited portions of the upper Midwest region of the United States. Hi-Crush owns and operates the largest distribution network in the Marcellus and Utica shales, and has distribution capabilities throughout North America. For more information, visit www.hicrushpartners.com.

Forward-Looking Statements
Some of the information in this news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements give our current expectations, and contain projections of results of operations or of financial condition, or forecasts of future events. Words such as may, assume, forecast, position, predict, strategy, expect, intend, plan, estimate, anticipate, could, believe, project, budget, potential, or continue, and similar expressions are used to identify forward-looking statements. They can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in Hi-Crushs reports filed with the Securities and Exchange Commission (SEC), including those described under 1A of Hi-Crushs Form 10-K for the year ended December 31, 2013 and any subsequently filed 10-Q. Actual results may vary materially. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the risk factors in our reports filed with the SEC or the following list to be a complete statement of all potential risks and uncertainties. Factors that could cause our actual results to differ materially from the results contemplated by such forward looking statements include: the volume of frac sand we are able to sell; the price at which we are able to sell frac sand; the outcome of any pending litigation; changes in the price and availability of natural gas or electricity; changes in prevailing economic conditions; and difficulty collecting receivables. All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements. Hi-Crushs forward-looking statements speak only as of the date made and Hi-Crush undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

Investor contact:
Investor Relations
(713) 960-4811





Unaudited Condensed Consolidated Statement of Operations
(Amounts in thousands, except tons, units and per unit amounts)
�
Three Months
�
Ended December 31,
�
2014
�
2013(a)
Revenues
$
130,929

�
$
63,975

Cost of goods sold (including depreciation, depletion and amortization)
82,319

�
37,271

Gross profit
48,610

�
26,704

Operating costs and expenses:
�
�
�
General and administrative expenses
7,059

�
5,774

Exploration expense


�
(9
)
Accretion of asset retirement obligation
62

�
56

Income from operations
41,489

�
20,883

Other income (expense):
�
�
�
Interest expense
(3,110
)
�
(1,370
)
Net income
38,379

�
19,513

Income attributable to non-controlling interest
(251
)
�
(124
)
Net income attributable to Hi-Crush Partners LP
$
38,128

�
$
19,389

Earnings per unit:
�
�
�
Common and subordinated units - basic
$
0.85

�
$
0.63

Common and subordinated units - diluted
$
0.85

�
$
0.63

�
�
�
�
(a)�Financial information has been recast to include the financial position and results attributable to Hi-Crush Augusta LLC.





Unaudited Condensed Consolidated Statement of Operations
(Amounts in thousands, except tons, units and per unit amounts)
�
Year
�
Ended December 31,
�
2014(a)
�
2013(a)
Revenues
$
386,547

�
$
178,970

Cost of goods sold (including depreciation, depletion and amortization)
225,984

�
95,884

Gross profit
160,563

�
83,086

Operating costs and expenses:
�
�
�
General and administrative expenses
26,346

�
19,096

Exploration expense


�
47

Accretion of asset retirement obligation
246

�
228

Income from operations
133,971

�
63,715

Other income (expense):
�
�
�
Interest expense
(9,946
)
�
(3,671
)
Net income
124,025

�
60,044

Income attributable to non-controlling interest
(955
)
�
(274
)
Net income attributable to Hi-Crush Partners LP
$
123,070

�
$
59,770

Earnings per unit:
�
�
�
Common and subordinated units - basic
$
3.09

�
$
2.08

Common and subordinated units - diluted
$
3.00

�
$
2.08

�
�
�
�
(a)�Financial information has been recast to include the financial position and results attributable to Hi-Crush Augusta LLC.





Unaudited EBITDA and Distributable Cash Flow
�
Three Months
�
Ended December 31,
(in thousands)
2014
�
2013
Reconciliation of distributable cash flow to net income:
�
�
�
Net income
$
38,379

�
$
19,513

Depreciation and depletion expense
2,277

�
1,873

Amortization expense
801

�
1,662

Interest expense
3,110

�
1,370

EBITDA
$
44,567

�
$
24,418

Less: Cash interest paid
(2,698
)
�
(1,269
)
Less: Income attributable to non-controlling interest
(251
)
�
(124
)
Less: Maintenance and replacement capital expenditures, including accrual for reserve replacement (1)
(1,357
)
�
(909
)
Add: Accretion of asset retirement obligation
62

�
56

Add: Unit based compensation
548

�


Distributable cash flow
$
40,871

�
$
22,172

Adjusted for: Distributable cash flow attributable to Hi-Crush Augusta LLC, net of intercompany eliminations, prior to the Augusta Contribution (2)


�
(1,815
)
Distributable cash flow attributable to Hi-Crush Partners LP
40,871

�
20,357

Less: Distributable cash flow attributable to holders of incentive distribution rights
(8,157
)
�


Distributable cash flow attributable to common and subordinated unitholders
$
32,714

�
$
20,357

(1)
Maintenance and replacement capital expenditures, including accrual for reserve replacement, were determined based on an estimated reserve replacement cost of $1.35 per ton produced and delivered during the period. Such expenditures include those associated with the replacement of equipment and sand reserves, to the extent that such expenditures are made to maintain our long-term operating capacity. The amount presented does not represent an actual reserve account or requirement to spend the capital.
(2)
The Partnership's historical financial information has been recast to consolidate Augusta for all periods presented. For purposes of calculating distributable cash flow attributable to Hi-Crush Partners LP, the Partnership excludes the incremental amount of recasted distributable cash flow earned during the periods prior to the acquisition by the Partnership on April 28, 2014 of substantially all of the remaining equity interests in Hi-Crush Augusta LLC (the "Augusta Contribution").





Unaudited EBITDA and Distributable Cash Flow
�
Year
�
Ended December 31,
(in thousands)
2014
�
2013
Reconciliation of distributable cash flow to net income:
�
�
�
Net income
$
124,025

�
$
60,044

Depreciation and depletion expense
8,858

�
6,132

Amortization expense
5,186

�
3,687

Interest expense
9,946

�
3,671

EBITDA
$
148,015

�
$
73,534

Less: Cash interest paid
(8,682
)
�
(3,123
)
Less: Income attributable to non-controlling interest
(955
)
�
(274
)
Less: Maintenance and replacement capital expenditures, including accrual for reserve replacement (1)
(5,001
)
�
(3,026
)
Add: Accretion of asset retirement obligation
246

�
228

Add: Unit based compensation
1,470

�


Distributable cash flow
$
135,093

�
$
67,339

Adjusted for: Distributable cash flow attributable to Hi-Crush Augusta LLC, net of intercompany eliminations, prior to the Augusta Contribution (2)
(7,199
)
�
696

Distributable cash flow attributable to Hi-Crush Partners LP
127,894

�
68,035

Less: Distributable cash flow attributable to holders of incentive distribution rights
(18,401
)
�


Distributable cash flow attributable to common and subordinated unitholders
$
109,493

�
$
68,035

(1)
Maintenance and replacement capital expenditures, including accrual for reserve replacement, were determined based on an estimated reserve replacement cost of $1.35 per ton produced and delivered during the period. Such expenditures include those associated with the replacement of equipment and sand reserves, to the extent that such expenditures are made to maintain our long-term operating capacity. The amount presented does not represent an actual reserve account or requirement to spend the capital.
(2)
The Partnership's historical financial information has been recast to consolidate Augusta for all periods presented. For purposes of calculating distributable cash flow attributable to Hi-Crush Partners LP, the Partnership excludes the incremental amount of recasted distributable cash flow earned during the periods prior to the Augusta Contribution.





Unaudited Condensed Consolidated Cash Flow Information
(Amounts in thousands)
�
Year
�
Year
�
Ended
�
Ended
�
December 31,
�
December 31,
�
2014(a)
�
2013(a)
Operating activities
$
104,370

�
$
64,323

Investing activities
(264,715
)
�
(105,585
)
Financing activities
144,383

�
51,372

Net (decrease) increase in cash
$
(15,962
)
�
$
10,110

�
�
�
�
(a)�Financial information has been recast to include the financial position and results attributable to Hi-Crush Augusta LLC.





Unaudited Condensed Consolidated Balance Sheet
(Amounts in thousands)
�
December 31,
�
December 31,
�
2014
�
2013(a)
Assets
�
�
�
Current assets:
�
�
�
Cash
$
4,646

�
$
20,608

Restricted cash
691

�
690

Accounts receivable
82,117

�
37,442

Inventories
23,684

�
22,418

Prepaid expenses and other current assets
4,081

�
1,625

Total current assets
115,219

�
82,783

Property, plant and equipment, net
241,325

�
195,834

Goodwill and intangible assets, net
66,750

�
71,936

Other assets
12,826

�
3,808

Total assets
$
436,120

�
$
354,361

Liabilities, Equity and Partners Capital
�
�
�
Current liabilities:
�
�
�
Accounts payable
$
24,878

�
$
10,108

Accrued and other current liabilities
12,248

�
7,669

Due to sponsor
13,459

�
10,352

Current portion of long-term debt
2,000

�


Total current liabilities
52,585

�
28,129

Long-term debt
198,364

�
138,250

Asset retirement obligation
6,730

�
4,628

Total liabilities
257,679

�
171,007

Commitments and contingencies


�


Equity and Partners capital:
�
�
�
General partner interest


�


Limited partner interests, 36,952,426 and 28,865,171 units outstanding, respectively
175,962

�
138,580

Class B units, zero and 3,750,000 units outstanding, respectively


�
9,543

Total partners capital
175,962

�
148,123

Non-controlling interest
2,479

�
35,231

Total equity and partners' capital
178,441

�
183,354

Total liabilities, equity and partners capital
$
436,120

�
$
354,361

�
�
�
�
(a)�Financial information has been recast to include the financial position and results attributable to Hi-Crush Augusta LLC.





Unaudited Per Ton Operating Activity
�
Three Months
�
Year
�
Ended December 31,
�
Ended December 31,
�
2014
�
2013
�
2014
�
2013
Sand sold (in tons)
1,481,914

�
814,094

�
4,584,811

�
2,520,119

Sand produced and delivered (in tons)
1,005,492

�
703,479

�
3,704,630

�
2,241,199

Production costs ($ in thousands)
$
15,808

�
$
12,018

�
$
58,452

�
$
41,999

Production costs per ton
$
15.72

�
$
17.08

�
$
15.78

�
$
18.74






Unaudited Net Income per Limited Partner Unit
(Amounts in thousands, except units and per unit amounts)
�
Three Months
�
Year Ended
�
Ended December 31,
�
Ended December 31,
Weighted average limited partner units outstanding:
2014
�
2013
�
2014
�
2013
Common units - basic
23,312,075

�
15,224,820

�
19,729,669

�
14,527,914

Subordinated units - basic
13,640,351

�
13,640,351

�
13,640,351

�
13,640,351

Common units - diluted
23,393,092

�
15,224,820

�
22,143,189

�
14,527,914

Subordinated units - diluted
13,640,351

�
13,640,351

�
13,640,351

�
13,640,351

Reconciliation of net income and the assumed allocation of net income under the two-class method for purposes of computing earnings per unit:
�
For the Three Months Ended December 31, 2014
�
General Partner and IDRs
�
Common Units
�
Subordinated Units
�
Class B Units
�
Total
Declared distribution
$
1,311

�
$
15,736

�
$
9,207

�
$


�
$
26,254

Assumed allocation of undistributed net income attributable to the Partnership
5,475

�
4,037

�
2,362

�


�
11,874

Limited partners interest in net income
$
6,786

�
$
19,773

�
$
11,569

�
$


�
$
38,128

�
�
�
�
�
�
�
�
�
�
Earnings per unit - basic
�
�
$
0.85

�
$
0.85

�
�
�
�
Earnings per unit - diluted (1)
�
�
$
0.85

�
$
0.85

�
�
�
�
�
For the Year Ended December 31, 2014
�
General Partner and IDRs
�
Common Units
�
Subordinated Units
�
Class B Units
�
Total
Declared distribution
$
2,174

�
$
51,774

�
$
32,737

�
$
2,156

�
$
88,841

Assumed allocation of undistributed net income attributable to the Partnership
12,367

�
9,268

�
9,465

�


�
31,100

Limited partners interest in net income
$
14,541

�
$
61,042

�
$
42,202

�
$
2,156

�
$
119,941

Recast adjustments to include the results of operations of Hi-Crush Augusta LLC and income attributable to non-controlling interest
�
�
�
�
�
�
�
�
3,129

Net income attributable to Hi-Crush Partners LP
�
�
�
�
�
�
�
�
$
123,070

Earnings per unit - basic
�
�
$
3.09

�
$
3.09

�
�
�
�
Earnings per unit - diluted (1)
�
�
$
3.00

�
$
3.00

�
�
�
�
(1) Diluted earnings per unit includes the impact of income allocations attributable to a conversion of the Class B units into common units.


4TH QUARTER & FULL-YEAR 2014 RESULTS FEBRUARY 3, 2015

�
Forward Looking Statements Some of the information included herein may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements give our current expectations and may contain projections of results of operations or of financial condition, or forecasts of future events. Words such as may, assume, forecast, position, predict, strategy, expect, intend, plan, estimate, anticipate, could, believe, project, budget, potential, or continue, and similar expressions are used to identify forward-looking statements. They can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no expected results of operations or financial condition or other forward-looking statements can be guaranteed. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in Hi-Crush Partners LPs (Hi-Crush) reports filed with the Securities and Exchange Commission (SEC), including those described under Item 1A, Risk Factors of Hi-Crushs Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and any subsequently filed Quarterly Report on Form 10-Q. Actual results may vary materially. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the risk factors in our reports filed with the SEC or the following list to be a complete statement of all potential risks and uncertainties. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include: the volume of frac sand we are able to sell; the price at which we are able to sell frac sand; the outcome of any pending litigation; changes in the price and availability of natural gas or electricity; changes in prevailing economic conditions; and difficulty collecting receivables. All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements. Hi-Crushs forward-looking statements speak only as of the date made and Hi-Crush undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise. 2

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2014: A Record Year 3 (1) Full year  paid in 2015/2014 for distributions declared for 2014, paid in 2014/2013 for distributions declared for 2013; Quarter  paid in Q1 for distribution declared in Q4. 2014 2013 Q4 2014 Q4 2013 ($ in 000s) Revenues $386,547 $178,970 $130,929 $63,975 EBITDA $148,015 $73,534 $44,567 $24,418 Sales volumes 4,584,811 2,520,119 1,481,914 814,094 Production costs per ton $15.78 $18.74 $15.72 $17.08 Earnings per unit Basic $3.09 $2.08 $0.85 $0.63 Diluted $3.00 $2.08 $0.85 $0.63 Distributions per unit 1 $2.400 $1.950 $0.675 $0.510

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Balance Sheet is Strong 4 (1) Revolving credit facility: $143.8mm available at L+2.75% ($150mm capacity less $6.2mm of LCs); includes accordion feature to increase to $200mm (2) Senior secured term loan: $200mm face value at L+3.75%; rated B2 and B+ by Moody's and Standard & Poor's, respectively Leverage (as of December 31, 2014) ($ in 000s) Cash 4,646$ Revolver -$ 1 Term loan 196,688 2 Other notes payable 3,676 Total debt 200,364$ Net debt 195,718$ Net debt / EBITDA 1.32x

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Committed to Growing Distribution Long-Term 5 " Pattern of raising distribution with quarterly increases  32% increase from distribution paid Q1 2014 vs paid Q1 2015 " Delivered on guidance of $2.30-$2.50 per unit distribution range in 2014 " Focused on generating increases in our distribution each quarter for unit holders Declared Distributions Per Unit (Annualized) * * $1.90 represents the Minimum Quarterly Distribution per unit at IPO $1.90 $1.96 $2.04 $2.10 $2.30 $2.50 $2.70 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15

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Strong Coverage Provides Flexibility for Growth 6 " Strong coverage ratio averaging above target coverage of 1.20x  Average since Q1 2013 of 1.26x " Coverage provides flexibility in volatile market conditions and supports organic growth (1) Actual coverage ratio was 1.0x including $0.525 per unit distribution paid on 4.25 million units issued in April 2014 (2) Excludes impact of the August 15, 2014 conversion of Class B units to common units and related distribution paid upon conversion (3) Excludes the portion of DCF allocable to the Incentive Distribution Rights held by our Sponsor (1) (2) (3) (3) (3) 1.12x 1.14x 1.24x 1.38x 1.15x 1.35x 1.40x 1.31x  0.20x 0.40x 0.60x 0.80x 1.00x 1.20x 1.40x $0 $5 $10 $15 $20 $25 $30 $35 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '15 $ in M ill io n s Distributions (Total $/Q) - LHS Coverage Ratio - RHS

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Industry Backdrop

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Oil Prices Adding Uncertainty to Market Conditions 8 $0 $20 $40 $60 $80 $100 $120 $140 $160

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Historical Sand Demand Growth 9 Source: 2013 Proppant Market Report, PropTester, Inc./KELRIK LLC; internal estimates 0 20 40 60 80 100 120 140 Ra w F ra c S a n d De m a n d (B ill io n s o f P o u n d s )

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Drilling Activity Supported by Low Breakeven Prices 10 (1) Source: Credit Suisse Research (October 2014) WTI Oil Breakeven Prices ($/bbl) (1) $36.01 $39.30 $42.77 $50.41 $51.64 $53.71 $53.84 $63.04 $0 $20 $40 $60 $80 $100

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Frac Sand Demand Commentary Wells aren't getting shorter, and stage density is not getting less, and our customers are not going to pump less sand per stage. We were up 22% or so sequentially in pounds per stage. Q3 2014 Earnings Call We are achieving excellent initial results on our wells with sand concentrations ranging from 1,750 to 2,250 pounds per foot. Q4 2014 Earnings Call " E&P operators are using fracture stimulation techniques, such as longer laterals, increased frac stages per well, and increased proppant per stage to drive well performance " These activities are driving premium Northern White frac sand demand growth 11 We actually saw in Q4 a year-on-year increase of about 46% sand on a per well basis, so that was up sequentially another 5% or 6% again on a per well basis. Q4 2014 Earnings Call

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Hi-Crush Operations

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Hi-Crushs Competitive Advantages " Long-Term Contracted Cash Flow " Low-Cost Producer " Long-Lived, High Quality Reserves " Prime Portfolio of Assets " Focused Strategy " Visible Avenues to Growth 13 6.6 mm Take-or-Pay Tons in 2015, 4.2 yrs Remaining 88% of Production Capacity Contracted Strong Northern White Frac Sand Demand Key Strategic Network in Marcellus/Utica Strong Balance Sheet Future Whitehall Drop-down, Plant #4, Expansion of Terminal Facilities

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Hi-Crush Ranks Among Largest in Industry 14 " With 7.5 million tons current capacity, Hi-Crush is estimated to have:  The largest production capacity of frac sand in Wisconsin.  The fourth largest production capacity of frac sand worldwide. Source: Internal estimates

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Frac Sand Capacity 15 Frac Sand Market Structure (1) Top 10 Producers Hold > 75% of Tier-One Capacity (1) (2) Notes: (1) Based on internal estimated frac sand capacity estimates per 2014 Proppant Market Report, KELRIK LLC and Proptester, Inc. (Hi-Crush capacity includes Sponsor); Excludes sand used for other industrial applications (e.g., glass and foundry sand) (2) Tier one refers to Northern White Sand, specifically St. Peter, Jordan, Wonewoc, Mt. Simon and equivalent sandstones; excluding Canadian sources. 27% 14% 8% 8% 7% 7% 29% 73% Non tier one Company A Hi-Crush Company B Company C Company D All other tier one 19% 11% 11% 10% 10% 5% 5% 3% 3% 3% 20% Company A Hi-Crush Company B Company C Company D Company E Company F Company G Company H Company I All other tier one

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Contracts Indicative of Partnership with Customers YE 2012 YE 2013 16 1.2 MM Tons Under Contract 2.4 MM Tons Under Contract 6.6 MM Tons Under Contract 2.8 Year Average Life 2.5 Year Average Life 4.2 Year Average Life YE 2014 " 8 Contract Customers  Nearest maturity is 12/31/16  Remainder mature at the end of 2018 through 2019

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Low Cost Structure Essential 17 Hi-Crush Partners Production Costs per Ton Produced and Delivered Note: Recasted to include Augusta facility tons produced and delivered  200,000 400,000 600,000 800,000 1,000,000 1,200,000 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 Quarterly Productions Costs / Ton Quarterly Tons Produced & Delivered

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Logistics Flexibility Critical Sandstone Formations " Access to all major U.S. oil and gas basins " Direct loading and unloading of unit trains " Multiple in-basin terminals across Marcellus and Utica shales and one located in Permian Basin " 7,200 railcars under management " Strong relationships with multiple Class-1 and short-line railroads Sponsors Whitehall Facility 18 Sponsor Sand Facilities Existing Distribution Terminals Basin Play HCLP Sand Facilities

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Positioned to Meet Challenges & Opportunities 19 " Northern White in highest demand relative to other proppant types " 6.6 million contracted take-or-pay tons in 2015: " 88% of production capacity " All contracts held by HCLP " Lowest cost frac sand producer " Logistics capabilities are key distinguishing factors " Financial strength and flexibility " Positioned for growth " Future dropdown of Sponsors Whitehall facility " Sponsor currently permitting fourth facility in Wisconsin " Organic growth of terminal network

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Levers for Further Performance 20

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Financial Results

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4th Quarter 2014 Summary 22 Three Months Ended December 31, (in thousands, except per unit) 2014 2013(a) Revenues $ 130,929 $ 63,975 Cost of goods sold (including depreciation, depletion and amortization) 82,319 37,271 Gross profit 48,610 26,704 Operating costs and expenses: General and administrative expenses 7,059 5,774 Exploration expense  (9 ) Accretion of asset retirement obligation 62 56 Income from operations 41,489 20,883 Other income (expense): Interest expense (3,110 ) (1,370 ) Net income 38,379 19,513 Income attributable to non-controlling interest (251 ) (124 ) Net income attributable to Hi-Crush Partners LP $ 38,128 $ 19,389 Earnings per unit: Common and subordinated units - basic $ 0.85 $ 0.63 Common and subordinated units - diluted $ 0.85 $ 0.63 (a) Financial information has been recast to include the financial position and results attributable to Hi -Crush Augusta LLC.

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Full-Year 2014 Summary 23 Year Ended December 31, (in thousands, except per unit) 2014(a) 2013(a) Revenues $ 386,547 $ 178,970 Cost of goods sold (including depreciation, depletion and amortization) 225,984 95,884 Gross profit 160,563 83,086 Operating costs and expenses: General and administrative expenses 26,346 19,096 Exploration expense  47 Accretion of asset retirement obligation 246 228 Income from operations 133,971 63,715 Other income (expense): Interest expense (9,946 ) (3,671 ) Net income 124,025 60,044 Income attributable to non-controlling interest (955 ) (274 ) Net income attributable to Hi-Crush Partners LP $ 123,070 $ 59,770 Earnings per unit: Common and subordinated units - basic $ 3.09 $ 2.08 Common and subordinated units - diluted $ 3.00 $ 2.08 (a) Financial information has been recast to include the financial position and results attributable to Hi -Crush Augusta LLC.

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4th Quarter 2014 Summary (1) Maintenance and replacement capital expenditures, including accrual for reserve replacement, were determined based on an estimated reserve replacement cost of $1.35 per ton produced and delivered during the period. Such expenditures include those associated with the replacement of equipment and sand reserves, to the extent that such expenditures are made to maintain our long-term operating capacity. The amount presented does not represent an actual reserve account or requirement to spend the capital. (2) The Partnership's historical financial information has been recast to consolidate Augusta for all periods presented. For purposes of calculating distributable cash flow attributable to Hi-Crush Partners LP, the Partnership excludes the incremental amount of recasted distributable cash flow earned during the periods prior to the acquisition by the Partnership on April 28, 2014 of substantially all of the remaining equity interests in Hi-Crush Augusta LLC (the "Augusta Contribution"). 24 Three Months Ended December 31, (in thousands) 2014 2013 Reconciliation of distributable cash flow to net income: Net income $ 38,379 $ 19,513 Depreciation and depletion expense 2,277 1,873 Amortization expense 801 1,662 Interest expense 3,110 1,370 EBITDA $ 44,567 $ 24,418 Less: Cash interest paid (2,698 ) (1,269 ) Less: Income attributable to non-controlling interest (251 ) (124 ) Less: Maintenance and replacement capital expenditures, including accrual for reserve replacement (1) (1,357 ) (909 ) Add: Accretion of asset retirement obligation 62 56 Add: Unit based compensation 548  Distributable cash flow $ 40,871 $ 22,172 Adjusted for: Distributable cash flow attributable to Hi-Crush Augusta LLC, net of intercompany eliminations, prior to the Augusta Contribution (2)  (1,815 ) Distributable cash flow attributable to Hi-Crush Partners LP 40,871 20,357 Less: Distributable cash flow attributable to holders of incentive distribution rights (8,157 )  Distributable cash flow attributable to common and subordinated unitholders $ 32,714 $ 20,357

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Full-Year 2014 Summary (1) Maintenance and replacement capital expenditures, including accrual for reserve replacement, were determined based on an estimated reserve replacement cost of $1.35 per ton produced and delivered during the period. Such expenditures include those associated with the replacement of equipment and sand reserves, to the extent that such expenditures are made to maintain our long-term operating capacity. The amount presented does not represent an actual reserve account or requirement to spend the capital. (2) The Partnership's historical financial information has been recast to consolidate Augusta for all periods presented. For purposes of calculating distributable cash flow attributable to Hi-Crush Partners LP, the Partnership excludes the incremental amount of recasted distributable cash flow earned during the periods prior to the Augusta Contribution. 25 Year Ended December 31, (in thousands) 2014 2013 Reconciliation of distributable cash flow to net income: Net income $ 124,025 $ 60,044 Depreciation and depletion expense 8,858 6,132 Amortization expense 5,186 3,687 Interest expense 9,946 3,671 EBITDA $ 148,015 $ 73,534 Less: Cash interest paid (8,682 ) (3,123 ) Less: Income attributable to non-controlling interest (955 ) (274 ) Less: Maintenance and replacement capital expenditures, including accrual for reserve replacement (1) (5,001 ) (3,026 ) Add: Accretion of asset retirement obligation 246 228 Add: Unit based compensation 1,470  Distributable cash flow $ 135,093 $ 67,339 Adjusted for: Distributable cash flow attributable to Hi-Crush Augusta LLC, net of intercompany eliminations, prior to the Augusta Contribution (2) (7,199 ) 696 Distributable cash flow attributable to Hi-Crush Partners LP 127,894 68,035 Less: Distributable cash flow attributable to holders of incentive distribution rights (18,401 )  Distributable cash flow attributable to common and subordinated unitholders $ 109,493 $ 68,035

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Production Costs per Ton Produced and Sold 26 (1) Recasted to include Augusta facility tons produced and sold Hi-Crush Partners LP (Wyeville & Augusta) (1) Production Cost per Ton Fiscal Quarter 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 Tons produced and delivered 382,607 557,457 597,659 703,481 718,166 953,361 1,027,611 1,005,492 Production costs ($ in thousands) 8,355 10,214 11,411 12,017 14,836 13,534 14,274 15,808 Production costs per ton $21.84 $18.32 $19.09 $17.08 $20.66 $14.20 $13.89 $15.72 12 months ended 12 months ended 12 months ended 12 months ended 12 months ended Trailing Twelve Months 12/31/2013 3/31/2014 6/30/2014 9/30/2014 12/31/2014 Tons produced and delivered 2,241,204 2,576,763 2,972,667 3,402,619 3,704,630 Production costs ($ in thousands) 41,998 48,479 51,799 54,661 58,452 Production costs per ton $18.74 $18.81 $17.43 $16.06 $15.78

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Appendix

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A Portfolio of Opportunity Sandstone Formations Sponsors Whitehall Facility 28 Sponsor Sand Facilities Existing Distribution Terminals Basin Play HCLP Sand Facilities Wisconsin " 7.5 million tons of annual production capacity, including 100 mesh " Over 30 years of reserves Marcellus & Utica " Exclusive rail access " Largest distribution network " Further expanding storage capabilities Permian " Facility in Big Spring, TX fully operational Growth " Permitting underway by our Sponsor for fourth Wisconsin production facility " Expanding distribution network through additional destination terminals and increased silo storage capacity

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Our Business Model  Q4 2014 Operating Results 29 Sold FOB plant direct to customer (67%) Hi-Crush terminal Freight costs Hi-Crush plants Tons produced and delivered  1,005,492 Production cost/ton  $15.72 Sold at the terminal to customer (33%) Sand delivered to Hi-Crush terminal via rail Tons sold  1,481,914 Class-1 and short-line rail Customer truck delivers to well site

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67% 33% Tons Sold FOB Mine During the Quarter 30 FOB Mine Volume (1) Primarily sold in Marcellus and Utica shales (2) Tons sold FOB mine primarily comprised of volumes sold under contract to long-term, take or pay customers (3) FOB mine sales shipped to Marcellus and Utica exclude volumes sold FOB destination at Hi-Crush terminal locations (2) Q4 2014  FOB Mine Sales Volume Sold at Terminals (1) (3) 51% 22% 13% 11% 3% Permian / Eagle Ford Marcellus / Utica Colorado Oklahoma Other

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67% 33% Hi-Crush Terminals Addressing Customer Needs 31 Hi-Crush terminal Freight costs Sand delivered to Hi-Crush terminal via rail Class-1 and short-line rail Customer truck delivers to well site Volume Sold at Terminals Sand sourced from mine 1 1 2 3 4 Sand transported by rail to destination terminal 2 In-basin terminal locations provide convenient customer services 3 Customer trucks deliver sand to well site for completion 4 " Ability to source from Hi-Crush mines, the Sponsors Whitehall facility, and 3rd party suppliers " On-site rail access is significant logistical advantage; rail fleet creates flexibility " Hi-Crush earns margin for alleviating customers logistical challenges " Additional revenue generated via storage and transload services " Unit train capabilities key for asset utilization and inventory management " Mix of contract and spot sales " Terminals transfer product to customer or 3rd party trucking service via silo or portable conveyor Q4 2014 FOB Mine Volume

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Rail Access Provides Direct Link from Mine to Basin 32 " Class-1 rail lines provide efficient and cost effective access to drilling activity " Majority of sand sold into leading areas of activity Q4 2014  Shipping Destinations by Play/Region $26.9 $15.3 $11.5 $8.5 $6.6 $5.5 $5.4 $3.1 2014 Projected Capex by Play (1) ($ in billions) (1) Source: Wood Mackenzie 40% 42% 9% 7% 2% Permian / Eagle Ford Marcellus / Utica Colorado Oklahoma Other

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Proven Production Execution * Includes Augusta 1.0 million ton annual 20/70 capacity expansion completed in 2014 ** Whitehall 2.6 million ton annual 20/70 capacity facility held at Sponsor level completed in third quarter 2014 January 2014 April 2014 3rd Quarter 2014 End of Year 2014 33 Wyeville Wyeville + Augusta Wyeville + Augusta + Augusta Expansion* Wyeville + Augusta + Augusta Expansion* + Whitehall** 3.2 MM tons/yr 4.2 MM tons/yr 6.8 MM tons/yr 1.6 MM tons/yr 3.6 MM tons/yr 4.6 MM tons/yr 7.5 MM tons/yr Nameplate capacity of 20/70 sand 100 mesh

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