6.30.14 - Earnings Release 8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 5, 2014

_______________________________

Hi-Crush Partners LP

(Exact name of registrant as specified in its charter)

_______________________________

(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)

(Registrant’s telephone number, including area code)

(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 August 5, 2014, Hi-Crush Partners LP (the “Partnership”) issued a press release announcing its second quarter 2014 financial results. The Partnership also announced the posting on its website of the presentation slides to be referenced in its August 5, 2014 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



Exhibit Number		Exhibit Description

99.1		Press Release dated August 5, 2014 announcing second quarter 2014 financial results.

99.2		Presentation slides.

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.



	Hi-Crush Partners LP

	By:	Hi-Crush GP LLC, its general partner

Date: August 5, 2014	By:	/s/ Laura C. Fulton
		Laura C. Fulton
		Chief Financial Officer



Exhibit Number		Exhibit Description

99.1		Press Release dated August 5, 2014 announcing second quarter 2014 financial results
99.2		Presentation slides

Hi-Crush Partners LP Reports Second Quarter 2014 Results

2Q14 Revenues of $83 million vs. $38 million in 2Q13

2Q14 EBITDA of $36 million vs. $17 million in 2Q13

$0.94 earnings per unit before allocations of income to IDRs and Class B units; $0.77 basic earnings per unit

Completed acquisition of substantially all of the remaining equity interests in Hi-Crush Augusta LLC

Houston, Texas, August 5, 2014 - Hi-Crush Partners LP (NYSE: HCLP), “Hi-Crush” or the “Partnership”, today reported second quarter results. Net income for the quarter was $29.5 million. The limited partners' interest in net income of $30.5 million for the second quarter of 2014 represents earnings of $0.94 per basic weighted average common and subordinated unit outstanding during the period. For purposes of calculating earnings per unit, $5.6 million of limited partners' interest in net income was allocated to the holder of incentive distribution rights and the Class B units, resulting in reported basic earnings per unit of $0.77 per common and subordinated unit.

The Partnership reported earnings before interest, taxes and depreciation and amortization (“EBITDA”) of $35.6 million for the second quarter of 2014. Distributable cash flow attributable to the Partnership for the second quarter of 2014 of $29.5 million corresponds to distribution coverage of 1.54 times the $19.1 million in distributions to be paid to common and subordinated unitholders on August 15, 2014.

“Demand for Hi-Crush sand continues to accelerate,” said James M. Whipkey, Co-Chief Executive Officer of Hi-Crush. “Since the beginning of the year, we have announced eight new contracts or amendments, five in the second quarter alone, with our existing customers increasing volumes and extending maturities. All of these are take-or-pay contracts. Our focus on long-term partnerships across both our customer base and the communities where we operate continues to deliver results for our unit holders.”

Revenues for the quarter ended June 30, 2014 totaled $83 million on sales of more than 1 million tons of frac sand, which includes volumes sold from the Wyeville, Augusta and distribution facilities, as well as transload services. As previously disclosed on April 28, 2014, the Partnership completed the acquisition of substantially all of the remaining equity interests in Hi-Crush Augusta LLC, the entity that owns the Augusta facility, and now owns 98% of Hi-Crush Augusta LLC's common equity interests.

“We are ready to meet the increasing demand for Hi-Crush sand and related services,” said Robert E. Rasmus, Co-Chief Executive Officer of Hi-Crush. “With the Augusta facility now in the Partnership and the expansion we will complete in the third quarter, our capacity will be 4.2 million tons. Together with our sponsor's Whitehall facility, we are poised to raise our annual capacity to produce 20/70 grades of Northern White sand to 6.8 million tons by the end of the current year. We continue to see rising demands from our customers and are focused on meeting their future needs.”

Production cost for sand produced and delivered from Hi-Crush facilities was $14.20 per ton during the quarter. Production costs per ton were lower than the previous quarter mainly due to higher production volumes, further operating efficiencies and lower gas prices.

On July 16, 2014, Hi-Crush declared its second quarter cash distribution of $0.575 per unit for all common and subordinated units, or $2.30 on an annualized basis. This amount corresponds to a 21% increase from the minimum quarterly cash distribution of $0.475 per unit and a 9.5% increase over the previous quarter’s distribution. The distribution will be paid on August 15, 2014 to all common and subordinated unitholders of record on August 1, 2014.

The conditions precedent to conversion of the Class B units will be satisfied upon payment of the distribution on August 15, 2014 and, upon such payment, the sponsor, who is the sole owner of the Class B units, has elected to convert all of the 3,750,000 Class B units into common units on a one-for-one basis. The sponsor will be entitled to receive a per unit distribution on the newly converted common units for the second quarter of 2014 in an amount equal to the per unit distribution to be paid to all the common and subordinated units for the same period, totaling $2.2 million to be paid on August 15, 2014.

A conference call for investors will be held on Tuesday, August 5, 2014 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss Hi-Crush’s second quarter results and forward outlook. 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) 705-6003, or for international callers, (201) 493-6725. 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 13586677. The replay will be available until August 19, 2014.

Interested parties may also listen to a simultaneous webcast of the conference call by logging onto Hi-Crush’s 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-Crush’s 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.

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-Crush’s reports filed with the Securities and Exchange Commission (“SEC”), including those described under 1A of Hi-Crush’s 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-Crush’s 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.

ir@hicrushpartners.com

Unaudited Condensed Consolidated Statement of Operations

(Amounts in thousands, except tons, units and per unit amounts)



	Three Months
	Ended June 30,
	2014			2013^(a)
Revenues	$	82,724		$	37,560
Cost of goods sold (including depreciation, depletion and amortization)	43,859			17,824
Gross profit	38,865			19,736
Operating costs and expenses:
General and administrative expenses	6,679			4,472
Exploration expense	—			55
Accretion of asset retirement obligation	66			58
Income from operations	32,120			15,151
Other income (expense):
Interest expense	(2,315		)	(714		)
Net income	29,805			14,437
Income attributable to non-controlling interest	(264		)	(70		)
Net income attributable to Hi-Crush Partners LP	$	29,541		$	14,367
Earnings per unit:
Common and subordinated units - basic	$	0.77		$	0.53
Common and subordinated units - diluted	$	0.75		$	0.53

^(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)



	Six Months
	Ended June 30,
	2014^(a)			2013^(a)
Revenues	$	153,302		$	61,837
Cost of goods sold (including depreciation, depletion and amortization)	88,025			26,744
Gross profit	65,277			35,093
Operating costs and expenses:
General and administrative expenses	13,104			7,780
Exploration expense	—			56
Accretion of asset retirement obligation	123			115
Income from operations	52,050			27,142
Other income (expense):
Interest expense	(3,725		)	(1,028		)
Net income	48,325			26,114
Income attributable to non-controlling interest	(412		)	(88		)
Net income attributable to Hi-Crush Partners LP	$	47,913		$	26,026
Earnings per unit:
Common and subordinated units - basic	$	1.32		$	0.93
Common and subordinated units - diluted	$	1.25		$	0.93

^(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 June 30,
(in thousands)	2014			2013
Reconciliation of distributable cash flow to net income:
Net income	$	29,805		$	14,437
Depreciation and depletion expense	2,428			1,505
Amortization expense	1,067			363
Interest expense	2,315			714
EBITDA	$	35,615		$	17,019
Less: Cash interest paid	(2,010		)	(421		)
Less: Income attributable to non-controlling interest	(264		)	(70		)
Less: Maintenance and replacement capital expenditures, including accrual for reserve replacement (1)	(1,288		)	(778		)
Add: Accretion of asset retirement obligation	66			58
Add: Unit based compensation	353			—
Distributable cash flow	$	32,472		$	15,808
Adjusted for: Distributable cash flow attributable to Hi-Crush Augusta LLC, net of intercompany eliminations, prior to the Augusta Contribution (2)	(3,010		)	(203		)
Distributable cash flow attributable to Hi-Crush Partners LP	$	29,462		$	15,605

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.

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



	Six Months
	Ended June 30,
(in thousands)	2014			2013
Reconciliation of distributable cash flow to net income:
Net income	$	48,325		$	26,114
Depreciation and depletion expense	3,904			2,070
Amortization expense	3,604			363
Interest expense	3,725			1,028
EBITDA	$	59,558		$	29,575
Less: Cash interest paid	(3,282		)	(676		)
Less: Income attributable to non-controlling interest	(412		)	(88		)
Less: Maintenance and replacement capital expenditures, including accrual for reserve replacement (1)	(2,257		)	(1,310		)
Add: Accretion of asset retirement obligation	123			115
Add: Unit based compensation	353			—
Distributable cash flow	$	54,083		$	27,616
Adjusted for: Distributable cash flow attributable to Hi-Crush Augusta LLC, net of intercompany eliminations, prior to the Augusta Contribution (2)	(7,199		)	(2,461		)
Distributable cash flow attributable to Hi-Crush Partners LP	$	46,884		$	25,155

Unaudited Condensed Consolidated Cash Flow Information

(Amounts in thousands)



	Six Months			Six Months
	Ended			Ended
	June 30, 2014^(a)			June 30, 2013^(a)
Operating activities	$	53,679		$	33,938
Investing activities	(234,311		)	(101,749		)
Financing activities	191,152			79,265
Net increase in cash	$	10,520		$	11,454

^(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)



	June 30, 2014		December 31, 2013^(a)
Assets
Current assets:
Cash	$	31,128	$	20,608
Restricted cash	690		690
Accounts receivable	46,931		37,442
Inventories	18,860		22,418
Prepaid expenses and other current assets	1,662		1,625
Total current assets	99,271		82,783
Property, plant and equipment, net	201,995		195,834
Goodwill and intangible assets, net	68,332		71,936
Other assets	10,298		3,808
Total assets	$	379,896	$	354,361
Liabilities, Equity and Partners’ Capital
Current liabilities:
Accounts payable	$	13,075	$	10,108
Accrued and other current liabilities	10,860		7,669
Due to Sponsor	6,419		10,352
Current portion of long-term debt	2,000		—
Total current liabilities	32,354		28,129
Long-term debt	195,547		138,250
Asset retirement obligation	4,751		4,628
Total liabilities	232,652		171,007
Commitments and contingencies	—		—
Equity and Partners’ capital:
General partner interest	—		—
Limited partner interests, 33,202,725 and 28,865,171 units outstanding, respectively	135,765		138,580
Class B units, 3,750,000 units outstanding	9,543		9,543
Total partners’ capital	145,308		148,123
Non-controlling interest	1,936		35,231
Total equity and partners' capital	147,244		183,354
Total liabilities, equity and partners’ capital	$	379,896	$	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				Six Months
	Ended June 30,				Ended June 30,
	2014		2013		2014		2013
Sand sold (in tons)	1,024,052		613,930		1,922,295		996,537
Sand produced and delivered (in tons)	953,361		557,457		1,671,527		940,064
Production costs ($ in thousands)	$	13,534	$	10,214	$	28,370	$	18,569
Production costs per ton	$	14.20	$	18.32	$	16.97	$	19.75

Unaudited Net Income per Limited Partner Unit

(Amounts in thousands, except units and per unit amounts)



	Three Months		Six Months
	Ended June 30,		Ended June 30,
Weighted average limited partner units outstanding:	2014	2013	2014	2013
Common units - basic	18,828,359	13,992,894	17,040,874	13,819,458
Subordinated units - basic	13,640,351	13,640,351	13,640,351	13,640,351
Common units - diluted	22,721,490	13,992,894	20,934,005	13,819,458
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 June 30, 2014
	General Partner and IDRs		Common Units		Subordinated Units		Class B Units		Total
Declared distribution	$	168	$	11,249	$	7,843	$	2,156	$	21,416
Assumed allocation of undistributed net income attributable to the Partnership	3,310		3,183		2,612		—		9,105
Limited partners’ interest in net income	$	3,478	$	14,432	$	10,455	$	2,156	$	30,521
Recast adjustments to include the results of operations of Hi-Crush Augusta LLC and income attributable to non-controlling interest									(980		)
Net income attributable to Hi-Crush Partners LP									$	29,541
Earnings per unit - basic			$	0.77	$	0.77
Earnings per unit - diluted (1)			$	0.75	$	0.75



	For the Six Months Ended June 30, 2014
	General Partner and IDRs		Common Units		Subordinated Units		Class B Units		Total
Declared distribution	$	168	$	21,479	$	15,004	$	2,156	$	38,807
Assumed allocation of undistributed net income attributable to the Partnership	1,892		1,053		3,032		—		5,977
Limited partners’ interest in net income	$	2,060	$	22,532	$	18,036	$	2,156	$	44,784
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									$	47,913
Earnings per unit - basic			$	1.32	$	1.32
Earnings per unit - diluted (1)			$	1.25	$	1.25

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

2ND QUARTER 2014 EARNINGS RELEASE AUGUST 5, 2014

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 LP’s (“Hi-Crush”) reports filed with the Securities and Exchange Commission (“SEC”), including those described under Item 1A, “Risk Factors” of Hi-Crush’s 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-Crush’s 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

A Portfolio of Opportunity 3 Wisconsin • 4.2 million tons of annual 20/70 capacity* • Over 30 years of reserves Marcellus & Utica • Exclusive rail access • Largest distribution network • Niche position in strongest drilling area Permian • New facility in Big Spring, TX • Production from Permian expected to increase 20% from 2013-2015 Growth • 2.6 million tons of annual 20/70 capacity from Whitehall production facility online in Q3 2014 • Expansion of distribution network through additional distribution terminals Current Shale Plays Shale Basins Prospective Shale Plays Existing Terminals Planned Terminals * Includes 1.0 million ton annual 20/70 capacity expansion at Augusta facility expected to be completed in third quarter 2014

Hi-Crush’s Competitive Advantages 4 • Long-term Contracted Cash Flow • Visible Avenues to Growth • Low-Cost Producer • Long-Lived, High Quality Reserves • Prime Portfolio of Assets • Focused Strategy Focused Priorities Growth Meeting Our Customers’ Increasing Needs Returns and Value Acceleration

Delivering Outstanding Results 5 Predictable Cash Flow Visible Organic Growth Best in Class Assets • Completed 2.6 million ton per year Whitehall facility, held by our sponsor • Expansion of distribution network • Lowest industry production cost per ton • 30+ years of premium Northern White frac sand reserves • 3.7 million tons of frac sand contracted in 2014; increasing to 5.6 million tons in 2015 • Long-term double-digit annual distribution growth

Our Business Model – Q2 2014 Operating Results 6 Sold FOB plant direct to customer (67%) Hi-Crush terminal Freight costs Hi-Crush plants Tons produced and delivered – 953,361 Production cost/ton – $14.20 Sold at the terminal to customer (33%) Sand delivered to Hi-Crush terminal via rail Tons sold(1) – 1,024,052 Class-1 and short-line rail Customer truck delivers to well site (1) Total tons sold includes tons sold FOB plant direct to customers and at the terminal

Logistics Flexibility Critical Augusta Facility Wyeville Facility Sandstone Formations • Access to all major U.S. oil and gas basins • Direct loading and unloading of unit trains • In-basin terminals across Marcellus and Utica shales, new location in Permian Basin • 5,000 railcars under management • Taking delivery of 1,500 additional cars in 2014/2015 • Relationships with multiple Class 1 and short-line railroads Current Shale Plays Shale Basins Prospective Shale Plays Existing Terminals Sponsor’s Whitehall Facility 7 Planned Terminals

Rail Access Provides Direct Link from Mine to Basin 8 44% 40% 5% 4% 5% 2% Permian / Eagle Ford Marcellus / Utica Oklahoma Colorado Louisiana Other • Class-1 rail lines provide efficient and cost effective access to drilling activity • Majority of sand sold into leading areas of activity Q2 2014 – Total Sales 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

67% 33% Tons Sold FOB Mine During the Quarter 9 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 through Hi-Crush terminal locations (2) 66% 11% 7% 6% 7% 3% Permian / Eagle Ford Marcellus / Utica Oklahoma Colorado Louisiana Other (3) Q2 2014 – FOB Mine Sales Volume Sold at Terminals (1)

67% 33% Hi-Crush Terminals Addressing Customer Needs 10 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 Sponsor’s 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 Q2 2014 FOB Mine Volume

Committed to Growing Distribution Long-Term 11 • Pattern of raising distribution with quarterly increases • Long-term double-digit annual distribution growth Declared Distributions (Annualized) $1.90 $1.96 $2.04 $2.10 $2.30 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 2014 Guidance $2.30 – $2.50 * * $1.90 represents the Minimum Quarterly Distribution per unit at IPO

1.12x 1.14x 1.24x 1.38x 1.15x 1.54x – 0.20x 0.40x 0.60x 0.80x 1.00x 1.20x 1.40x 1.60x 1.80x $0 $5 $10 $15 $20 $25 $30 $35 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 $ in M ill io n s Distributions (Total $/Q) Coverage Coverage > 1.2x Target Coverage Ratio Strong Coverage Provides Flexibility for Growth 12 • Strong coverage ratio averaging above target coverage of 1.20x • Coverage supports step-change in distribution growth and organic expansion $0.475 Per Unit $0.475 Per Unit $0.490 Per Unit $0.510 Per Unit $0.525 Per Unit $0.575 Per Unit (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 distribution to be paid August 15, 2014 to the holders of the Class B units upon conversion to common units. (1) (2)

Positioned to Meet Demand Growth 13 • 3.7 million contracted take-or-pay tons in 2014 • Signed eight new contracts or amendments to contracts in 2014 • 5.6 million contracted take-or-pay tons in 2015 • Sponsor’s new Whitehall production facility • 2.6 million ton 20/70 annual capacity • Wet plant is operating; dry plant beginning production in third quarter 2014 • New Permian Basin distribution terminal

Industry Backdrop

Operator Activity Driving Frac Sand Demand Growth “… the appetite for more sand is really growing, particularly in the Permian as our customers stay in that experimentation mode… So the trend is there's going to be more sand.” Q2 2014 Earnings Call “If we look at our 2013 program we had pumped a lot of 40-70 mesh sand in the let's say, 300,000, 400,000 pound range. We've increased our proppant to 30-50 mesh and we've actually done some 20-40 mesh jobs now and we're pumping about 400,000 to 500,000 pounds per stage on those treatments.” Q2 2014 Earnings Call “You have operators out in the Permian Basin that, on average, spend $1 million more per well, but they're yielding an additional 400,000 barrels in ultimate estimated recovery. For me, that's a no-brainer.” Q2 2014 Earnings Call “We've seen sand costs generally go up about 10%. We've had 100 mesh go up as much 50% from some suppliers. But 20/40 white that we pump a lot of is really – we've seen 5% to 10% increases there, and we've been able to pass those on with really no pushback from our customers.” Q2 2014 Earnings Call “…whether it's plug-n-perf or some of the other things we're trying – to just get a higher concentration of proppant around the wellbore and get you better recovery, which is even more critical on these tighter spacing wells.” Q2 2014 Earnings Call “… on sand where we took some higher costs because there were some significant changes in sand size and volume for several of our customers… we had a very high growth rate and transportation availability became quite tight.” Q2 2014 Earnings Call • E&P operators are using fracture stimulation techniques, such as increased proppant per stage and increased frac stages per well, to drive well performance • These activities are driving premium Northern White frac sand demand growth 15

Proven Production Execution * Includes Augusta 1.0 million ton annual 20/70 capacity expansion expected to be completed in third quarter 2014 ** Whitehall 2.6 million ton annual 20/70 capacity facility held at Sponsor level January 2014 April 2014 3rd Quarter 2014 End of Year 2014 16 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

Capacity Increases Driven by Customer Demand YE 2012 YE 2013 August 2014 17 1.2 MM Tons Under Contract 2.4 MM Tons Under Contract 3.7 MM Tons Under Contract 5.6 MM Tons Under Contract 2.8 Year Average Life 4.5 Year Average Life 2.5 Year Average Life 4.2 Year Average Life YE 2014

Frac Sand Capacity 18 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. (3) Excludes 100 mesh capacity. 15% 13% 11% 10% 10% 5% 3% 3% 3% 3% 24% Company A Hi-Crush Company B Company C Company D Company E Company F Company G Company H Company I All other tier one 6.8 Million Tons 20/70 Capacity (3) 28% 11% 9% 8% 8% 7% 29% 72% Non tier one Company A Hi-Crush Company B Company C Company D All other tier one

Low Cost Structure Essential 19 Hi-Crush Partners Production Costs per Ton Produced and Delivered Note: Recasted to included 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 Quarterly Production Costs / Ton Quarterly Tons Produced and Delivered

Levers for Further Performance 20

Appendix

Second Quarter 2014 Summary 22 Three Months Three Months Ended Ended June 30, 2014 June 30, 2013 Recasted Revenues $ 82,724 $ 37,560 Cost of goods sold (including depreciation, depletion, and amort.) 43,859 17,824 Gross profit 38,865 19,736 Operating costs and expenses: General and administrative 6,679 4,472 Exploration expense - 55 Accretion of asset retirement obligation 66 58 Income from operations 32,120 15,151 Other (income) expense: Interest expense 2,315 714 Net income 29,805 14,437 Income attributable to non-controlling interest (264) (70) Income attributable to Hi-Crush Partners LP $ 29,541 $ 14,367 Earnings per unit: Common and subordinated units - basic $ 0.77 $ 0.53 Common and subordinated units - diluted $ 0.75 $ 0.53 Weighted average limited partner units outstanding: Common and subordinated units - basic 32,468,710 27,633,245 Common and subordinated units - diluted 36,361,841 27,633,245

First Half 2014 Summary 23 Six Months Six Months Ended Ended June 30, 2014 June 30, 2013 Recasted Recasted Revenues $ 153,302 $ 61,837 Cost of goods sold (including depreciation, depletion, and amort.) 88,025 26,744 Gross profit 65,277 35,093 Operating costs and expenses: General and administrative 13,104 7,780 Exploration expense - 56 Accretion of asset retirement obligation 123 115 Income from operations 52,050 27,142 Other (income) expense: Interest expense 3,725 1,028 Net income 48,325 26,114 Income attributable to non-controlling interest (412) (88) Income attributable to Hi-Crush Partners LP $ 47,913 $ 26,026 Earnings per unit: Common and subordinated units - basic $ 1.32 $ 0.93 Common and subordinated units - diluted $ 1.25 $ 0.93 Weighted average limited partner units outstanding: Common and subordinated units - basic 30,681,225 27,459,809 Common and subordinated units - diluted 34,574,356 27,459,809

Second 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 Augusta Contribution. 24 Three Months Three Months Ended Ended June 30, 2014 June 30, 2013 Recasted Reconciliation of distributable cash flow to net income: Net income $ 29,805 $ 14,437 Depreciation and depletion 2,428 1,505 Amortization expense 1,067 363 Interest expense 2,315 714 EBITDA $ 35,615 $ 17,019 Less: Cash interest paid (2,010) (421) Less: Maintenance and replacement capital expenditures, incl. accrual for reserve replacement (1) (1,288) (778) Less: Income attributable to noncontrolling interest (264) (70) Add: Accretion of asset retirement obligation 66 58 Add: Unit based compensation 353 - Distributable cash flow $ 32,472 $ 15,808 Adjusted for: Distributable cash flow attributable to Hi-Crush Augusta LLC, net of intercompany eliminations, prior to the Augusta Contribution (2) (3,010) (203) Distributable cash flow attributable to Hi-Crush Partners LP $ 29,462 $ 15,605

First Half 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 Six Months Six Months Ended Ended June 30, 2014 June 30, 2013 Recasted Recasted Reconciliation of distributable cash flow to net income: Net income $ 48,325 $ 26,114 Depreciation and depletion 3,904 2,070 Amortization expense 3,604 363 Interest expense 3,725 1,028 EBITDA $ 59,558 $ 29,575 Less: Cash interest paid (3,282) (676) Less: Maintenance and replacement capital expenditures, incl. accrual for reserve replacement (1) (2,257) (1,310) Less: Income attributable to noncontrolling interest (412) (88) Add: Accretion of asset retirement obligation 123 115 Add: Unit based compensation 353 - Distributable cash flow $ 54,083 $ 27,616 Adjusted for: Distributable cash flow attributable to Hi-Crush Augusta LLC, net of intercompany eliminations, prior to the Augusta Contribution (2) (7,199) (2,461) Distributable cash flow attributable to Hi-Crush Partners LP $ 46,884 $ 25,155

Production Costs per Ton Produced and Sold 26 (1) Recasted to included 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 Tons produced and delivered 382,607 557,457 597,659 703,481 718,166 953,361 Production costs ($ in thousands) 8,355 10,214 11,411 12,017 14,836 13,534 Production costs per ton $21.84 $18.32 $19.09 $17.08 $20.66 $14.20 12 months ended 12 months ended 12 months ended Trailing Twelve Months 12/31/2013 3/31/2014 6/30/2014 Tons produced and delivered 2,241,204 2,576,763 2,972,667 Production costs ($ in thousands) 41,998 48,479 51,799 Production costs per ton $18.74 $18.81 $17.43

Balance Sheet is Strong 27 (1) Revolving credit facility: $143.8mm available at L+3.25% ($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 (3) Denominator calculated as annualized recasted EBITDA for the six months ended June 30, 2014 of $59.6mm As of June 30, 2014: ($ in 000s) Cash 31,128$ Revolver -$ 1 Term loan 197,547 2 Total debt 197,547$ Net debt 166,419$ Net debt / EBITDA 1.40x 3