DCP Midstream Partners Reports Third Quarter 2009 Results
DENVER, Nov. 5 /PRNewswire-FirstCall/ -- DCP Midstream Partners, LP (NYSE: DPM), or the Partnership, today reported financial results for the three and nine months ended September 30, 2009. The table below reflects 2009 and 2008 results on a consolidated basis and 2008 results as originally reported.
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THIRD QUARTER AND YEAR TO DATE HIGHLIGHTS
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- -----------------------
As As
Reported Reported
2009 2008 in 2008 2009 2008 in 2008
------ ------ -------- ------ ------ --------
(Unaudited)
(Millions, except per unit amounts)
Net income (loss)
attributable
to partners $9.9 $154.8 $152.7 $(11.1) $1.8 $(13.1)
Net income (loss)
per limited
partner unit $0.21 $5.24 $5.24 $(0.63) $(0.79) $(0.79)
Adjusted EBITDA* $30.2 $17.8 $13.6 $102.8 $97.2 $76.2
Adjusted net
income (loss)
attributable to
partners* $9.6 $0.5 $(1.6) $42.6 $46.4 $31.5
Adjusted net
income (loss) per
limited partner unit* $0.20 $(0.16) $(0.16) $1.10 $0.83 $0.83
Distributable cash flow* $21.2 $14.0 $12.2 $71.8 $82.0 $67.4
* Denotes a financial measure not presented in accordance with U.S.
generally accepted accounting principles, or GAAP. Each such non-GAAP
financial measure is defined below under "Non-GAAP Financial
Information", and each is reconciled to its most directly comparable
GAAP financial measures under "Reconciliation of Non-GAAP Financial
Measures" below.
In April 2009, the Partnership completed the acquisition of an additional 25.1 percent interest in DCP East Texas Holdings, LLC, or East Texas, from DCP Midstream, LLC, which results in the Partnership owning a 50.1 percent interest in East Texas. Prior to this transaction the Partnership accounted for its interest in East Texas under the equity method. As a result of our owning in excess of 50 percent of East Texas, and because the transaction was between entities under common control, we are required to present results of operations, including all historical periods, on a consolidated basis. In addition, results are presented as originally reported in 2008 for comparative purposes.
Additionally, note that while the Partnership hedges the majority of its commodity risk, the portion of East Texas owned by DCP Midstream, LLC is unhedged. As such, the Partnership's consolidated results depict 75 percent of East Texas unhedged in all periods prior to the second quarter of 2009 and 49.9 percent of East Texas unhedged for all periods subsequent to the first quarter of 2009.
Adjusted EBITDA increased from $17.8 million for the three months ended September 30, 2008, to $30.2 million for the three months ended September 30, 2009, reflecting the addition of our Michigan system, increased NGL volumes, and reduced operating costs, partially offset by the impacts of lower commodity prices and processing margins as well as lower gas throughput volumes at certain of our natural gas assets. Adjusted EBITDA in the third quarter of 2008 was significantly impacted by hurricanes and a non-cash write down of inventory for our wholesale propane business. Adjusted EBITDA increased from $97.2 million for the nine months ended September 30, 2008, to $102.8 million for the nine months ended September 30, 2009. 2009 results reflect strong performance from our wholesale propane logistics segment and include the impact from operational downtime at our Discovery, Wyoming and East Texas assets in the first quarter of 2009.
DISTRIBUTION AND DISTRIBUTABLE CASH FLOW
On October 27, 2009, the Partnership announced a quarterly distribution of $0.60 per limited partner unit, consistent with the prior quarter. Our distributable cash flow of $21.2 million for the three months ended September 30, 2009 provided a 0.94 times distribution coverage ratio for the quarter. Year to date distributable cash flow of $71.8 million provided a 1.10 times distribution coverage ratio.
CEO PERSPECTIVE
"With the late September start-up of commercial operations at our Piceance Basin expansion project, we have now delivered on all the business plan commitments we outlined last December," said Mark Borer, president and CEO of the Partnership. "Our diversified asset portfolio continues to mitigate the impact of the reduced commodity price and drilling environment, with strong year to date results enabling us to exceed the forecast we had originally provided. We are well positioned to continue delivering on our commitments and capture future growth opportunities."
OPERATING RESULTS BY BUSINESS SEGMENT
Natural Gas Services -- Adjusted segment EBITDA increased from $26.0 million for the three months ended September 30, 2008, to $34.0 million for the three months ended September 30, 2009, reflecting the addition of our Michigan system, increased NGL volumes, and reduced operating costs, partially offset by the impacts of lower commodity prices and processing margins as well as lower gas throughput volumes at certain of our natural gas assets. Adjusted segment EBITDA in the third quarter of 2008 was significantly impacted by hurricanes.
Adjusted segment EBITDA of $93.0 million for the nine months ended September 30, 2009, as compared to $112.2 million for the nine months ended September 30, 2008 includes the impact from operational downtime at our Discovery, Wyoming and East Texas assets in the first quarter of 2009. Results for the first nine months of 2008 reflect a much stronger commodity price, drilling and processing environment than the same period in 2009.
Segment operating and maintenance expense decreased $1.4 million for the three months ended September 30, 2009 and $5.2 million for the nine months ended September 30, 2009. The 8% and 11% decrease in these expenses for the three and nine months ended September 30, 2009, respectively, was driven by our cost reduction efforts, partially offset by the addition of our Michigan system.
Wholesale Propane Logistics -- Adjusted segment EBITDA increased from a $1.2 million loss for the three months ended September 30, 2008 to $2.1 million for the three months ended September 30, 2009. In the third quarter of 2008 we recorded a non-cash accounting adjustment reducing EBITDA by approximately $3.0 million to reflect inventory carrying costs at the lower of cost or market price. For the nine months ended September 30, adjusted segment EBITDA increased from $3.4 million in 2008 to $28.5 million in 2009. Year to date 2009 results reflect an increase in unit margins, approximately $6.0 million of which is attributable to the sale of inventory that was previously written down. Year to date results also reflect a six percent increase in volumes.
NGL Logistics -- Adjusted segment EBITDA increased from $1.5 million for the three months ended September 30, 2008, to $2.0 million for the three months ended September 30, 2009. Results for the quarter include volumes associated with a new pipeline interconnect. Adjusted segment EBITDA was $4.9 million for the nine months ended September 30, 2009, as compared to $5.5 million for the nine months ended September 30, 2008. Results for 2009 year to date reflect lower throughput volumes and the impact from ethane rejection at certain connected processing plants in the first quarter.
CORPORATE AND OTHER
General and administrative expenses for the three and nine months ended September 30, 2009 reflect our cost reduction efforts and the addition of the Michigan system, as compared to the same periods in 2008. Increased depreciation and amortization expense and net interest expense for the three and nine months ended September 30, 2009, reflect additional debt to finance the acquisition of the Michigan system and organic project spending.
COMMODITY DERIVATIVE ACTIVITY
The objective of our commodity risk management program is to protect downside risk in our distributable cash flow. We utilize mark-to-market accounting treatment for our commodity derivative instruments. Mark-to-market accounting rules require companies to record currently in earnings the difference between their contracted future derivative settlement prices and the forward prices of the underlying commodities at the end of the accounting period. Revaluing our commodity derivative instruments based on futures pricing at the end of the period creates an asset or liability and associated non-cash gain or loss. Realized gains or losses from cash settlement of the derivative contracts occur monthly as our physical commodity sales are realized or when we rebalance our portfolio. Non-cash gains or losses associated with the mark-to-market accounting treatment of our commodity derivative instruments do not affect our distributable cash flow.
For the three and nine months ended September 30, 2009 derivative activity and total revenues included a non-cash gain of approximately $0.5 million and a non-cash loss of $52.8 million, respectively, and hedge settlements received of $2.9 million and $17.3 million, respectively. This compares to a non-cash gain of $154.5 million and non-cash losses of $43.8 million for the three and nine months ended September 30, 2008, respectively, and hedge settlement payments of $12.4 million and $38.5 million for the three and nine months ended September 30, 2008, respectively. While our earnings will continue to fluctuate as a result of the volatility in the commodity markets, our commodity derivative contracts mitigate the risk of weakening commodity prices thereby stabilizing distributable cash flows.
CAPITALIZATION
Our credit facility of $825 million is comprised of a revolver and term loan that mature in June 2012. At September 30, 2009, we had $603 million outstanding under our revolver. We also had $10 million outstanding under our term loan, fully secured by restricted investments serving as collateral. Due to the fully secured status of the term loan, balances outstanding are netted from total long-term debt to calculate our leverage ratio. Our leverage ratio pursuant to our credit facility for the quarter ended September 30, 2009, was approximately 3.7 times.
Our liquidity is comprised of available capacity under our revolver and the collateral securing our term loan that may be used to fund organic capital expenditures or acquisitions. Our available liquidity at September 30, 2009, was approximately $222 million.
We mitigate a substantial portion of our interest rate risk with interest rate swaps which reduce our exposure to market rate fluctuations by converting variable interest rates to fixed interest rates. As of September 30, 2009, we had $575 million of our revolver debt converted to fixed rates through June 2012. Our weighted average cost of debt under our revolving credit facility, including interest rate swaps, as of September 30, 2009, was 4.4 percent.
EARNINGS CALL
DCP Midstream Partners will hold a conference call to discuss third quarter results on Friday, November 6, 2009, at 10 a.m. ET. The dial-in number for the call is 800-860-2442 in the United States or 412-858-4600 outside the United States. A live Webcast of the call can be accessed on the investor information page of DCP Midstream Partners' Web site at http://www.dcppartners.com. The call will be available for replay until 9 a.m. ET on November 16, 2009, by dialing 877-344-7529, in the United States or 412-317-0088 outside the United States. The conference number is 434932. A replay and transcript of the broadcast will also be available on the Partnership's Web site.
NON-GAAP FINANCIAL INFORMATION
This press release and the accompanying financial schedules include the following non-GAAP financial measures: distributable cash flow, adjusted EBITDA, adjusted segment EBITDA, adjusted net income attributable to partners, and adjusted net income per unit. The accompanying schedules provide reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures. Our non-GAAP financial measures should not be considered in isolation or as an alternative to our financial measures presented in accordance with GAAP, including net income or loss, net cash provided by or used in operating activities or any other measure of liquidity or financial performance presented in accordance with GAAP as a measure of operating performance, liquidity or ability to service debt obligations and make cash distributions to unitholders. The non-GAAP financial measures presented by us may not be comparable to similarly titled measures of other companies because they may not calculate their measures in the same manner.
We define distributable cash flow as net cash provided by or used in operating activities, less maintenance capital expenditures, net of reimbursable projects, plus or minus adjustments for non-cash mark-to-market of derivative instruments, proceeds from divestiture of assets, noncontrolling interest on depreciation, net changes in operating assets and liabilities, and other adjustments to reconcile net cash provided by or used in operating activities. Maintenance capital expenditures are capital expenditures made where we add on to or improve capital assets owned, or acquire or construct new capital assets, if such expenditures are made to maintain, including over the long term, our operating capacity. Non-cash mark-to-market of derivative instruments is considered to be non-cash for the purpose of computing distributable cash flow because settlement will not occur until future periods, and will be impacted by future changes in commodity prices. Distributable cash flow is used as a supplemental liquidity measure by our management and we believe by external users of our financial statements, such as investors, commercial banks, research analysts and others, to assess our ability to make cash distributions to our unitholders and our general partner.
We define adjusted EBITDA as net income or loss attributable to partners less interest income and non-cash commodity derivative gains, plus interest expense, income tax expense, depreciation and amortization expense and non-cash commodity derivative losses, adjusted for any noncontrolling interest on depreciation and amortization expense, and income tax expense. The commodity derivative non-cash losses and gains result from the marking to market of certain financial derivatives used by the Partnership for risk management purposes that we do not account for under the hedge method of accounting. These non-cash losses or gains may or may not be realized in future periods when the derivative contracts are settled, due to fluctuating commodity prices. We define adjusted segment EBITDA for each segment as segment net income or loss attributable to partners less interest income and non-cash commodity derivative gains for that segment, plus interest expense, income tax expense, depreciation and amortization expense and non-cash commodity derivative losses for that segment, adjusted for any noncontrolling interest on depreciation and amortization expense, and income tax expense for that segment. Our adjusted EBITDA equals the sum of our adjusted segment EBITDAs, plus general and administrative expense.
Adjusted EBITDA and adjusted segment EBITDA are used as supplemental liquidity and performance measures by our management and we believe by external users of our financial statements, such as investors, commercial banks, research analysts and others, to assess:
-- the ability of our assets to generate cash sufficient to pay interest
costs, support our indebtedness, make cash distributions to our
unitholders and general partner, and finance maintenance expenditures;
-- financial performance of our assets without regard to financing methods,
capital structure or historical cost basis;
-- our operating performance and return on capital as compared to those of
other companies in the midstream energy industry, without regard to
financing methods or capital structure; and
-- viability of acquisitions and capital expenditure projects and the
overall rates of return on alternative investment opportunities.
We define adjusted net income attributable to partners as net income attributable to partners, plus non-cash derivative losses, less non-cash derivative gains. Adjusted net income per unit is then calculated from adjusted net income attributable to partners. These non-cash derivative losses and gains result from the marking to market of certain financial derivatives used by the Partnership for risk management purposes that we do not account for under the hedge method of accounting. Adjusted net income attributable to partners and adjusted net income per unit are provided to illustrate trends in income excluding these non-cash derivative losses or gains, which may or may not be realized in future periods when derivative contracts are settled, due to fluctuating commodity prices.
ABOUT DCP MIDSTREAM PARTNERS
DCP Midstream Partners, LP (NYSE: DPM) is a midstream master limited partnership that gathers, processes, transports and markets natural gas and natural gas liquids and is a leading wholesale distributor of propane. DCP Midstream Partners, LP is managed by its general partner, DCP Midstream GP, LLC, which is wholly owned by DCP Midstream, LLC, a joint venture between Spectra Energy and ConocoPhillips. For more information, visit the DCP Midstream Partners, LP Web site at http://www.dcppartners.com.
CAUTIONARY STATEMENTS
This press release may contain or incorporate by reference forward-looking statements as defined under the federal securities laws regarding DCP Midstream Partners, LP, including projections, estimates, forecasts, plans and objectives. Although management believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond our control. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, the Partnership's actual results may vary materially from what management anticipated, estimated, projected or expected. Among the key risk factors that may have a direct bearing on the Partnership's results of operations and financial condition are:
-- the extent of changes in commodity prices, our ability to effectively
limit a portion of the adverse impact of potential changes in prices
through derivative financial instruments, and the potential impact of
price and producers' access to capital on natural gas drilling, demand
for our services, and the volume of NGLs and condensate extracted;
-- general economic, market and business conditions;
-- the level and success of natural gas drilling around our assets, the
level of gas production volumes around our assets and our ability to
connect supplies to our gathering and processing systems in light of
competition;
-- our ability to grow through acquisitions, contributions from affiliates,
or organic growth projects, and the successful integration and future
performance of such assets;
-- our ability to access the debt and equity markets, which will depend on
general market conditions, inflation rates, interest rates and our
ability to effectively limit a portion of the adverse effects of
potential changes in interest rates by entering into derivative
financial instruments, and our ability to comply with the covenants to
our credit agreement;
-- our ability to purchase propane from our principal suppliers for our
wholesale propane logistics business;
-- our ability to construct facilities in a timely fashion, which is
partially dependent on obtaining required building, environmental and
other permits issued by federal, state and municipal governments, or
agencies thereof, the availability of specialized contractors and
laborers, and the price of and demand for supplies;
-- the creditworthiness of counterparties to our transactions;
-- weather and other natural phenomena, including their potential impact on
demand for the commodities we sell and the operation of company owned
and third-party-owned infrastructure;
-- changes in laws and regulations, particularly with regard to taxes,
safety and protection of the environment, including climate change
legislation, or the increased regulation of our industry;
-- our ability to obtain insurance on commercially reasonable terms, if at
all, as well as the adequacy of the insurance to cover our losses;
-- industry changes, including the impact of consolidations, increased
delivery of liquefied natural gas to the United States, alternative
energy sources, technological advances and changes in competition; and
-- the amount of collateral we may be required to post from time to time in
our transactions.
Investors are encouraged to closely consider the disclosures and risk factors contained in the Partnership's annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Information contained in this press release is unaudited, and is subject to change.
DCP MIDSTREAM PARTNERS, LP
FINANCIAL RESULTS AND
SUMMARY BALANCE SHEET DATA
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- ---------------------------
As As
Reported Reported
2009 2008 in 2008 2009 2008 in 2008
------- ------- -------- ------- --------- --------
(Millions, except per unit amounts)
Sales of
natural gas,
propane,
NGLs and
Condensate $178.1 $389.7 $271.2 $608.9 $1,397.7 $952.4
Transportation,
processing
and other 24.2 20.3 13.6 68.7 60.3 39.7
Gains
(losses)
from
commodity
derivative
activity,
net 3.4 142.1 142.0 (35.5) (82.3) (81.7)
------- ------- ------- ------- --------- -------
Total
operating
revenues 205.7 552.1 426.8 642.1 1,375.7 910.4
Purchases of
natural gas,
propane and
NGLs (151.3) (350.8) (249.4) (516.5) (1,228.4) (866.9)
Operating and
maintenance
expense (19.0) (19.8) (10.2) (52.3) (57.1) (31.8)
Depreciation
and
amortization
expense (16.4) (13.0) (8.8) (47.3) (38.7) (26.3)
General and
administrative
expense (7.9) (8.5) (6.0) (23.6) (23.9) (16.8)
Other - - - - 1.5 1.5
------- ------- ------- ------- --------- -------
Total
operating
costs and
expenses (194.6) (392.1) (274.4) (639.7) (1,346.6) (940.3)
------- ------- ------- ------- --------- -------
Operating
income
(loss) 11.1 160.0 152.4 2.4 29.1 (29.9)
Interest
expense, net (7.1) (6.5) (6.6) (21.1) (18.8) (19.2)
Earnings from
equity
method
investments 8.4 6.4 8.1 11.0 24.2 38.7
Income tax
expense - (0.1) - (0.1) (0.7) -
Net income
attributable
to
noncontrolling
interests (2.5) (5.0) (1.2) (3.3) (32.0) (2.7)
------- ------- ------- ------- --------- -------
Net income
(loss)
attributable
to partners $9.9 $154.8 $152.7 $(11.1) $1.8 $(13.1)
Net (income)
loss
attributable
to
predecessor
operations - (2.1) - 1.0 (14.9) -
General
partner
interest in
net income
or net loss (3.4) (4.9) (4.9) (9.3) (8.3) (8.3)
------- ------- ------- ------- --------- -------
Net income
(loss)
allocable to
limited
partners $6.5 $147.8 $147.8 $(19.4) $(21.4) $(21.4)
======= ======= ======= ======= ========= =======
Net income
(loss) per
limited
partner
unit-basic
and diluted $0.21 $5.24 $5.24 $(0.63) $(0.79) $(0.79)
======= ======= ======= ======= ========= =======
Weighted-average
limited
partner
units
outstanding-basic
and diluted 31.7 28.2 28.2 30.6 27.1 27.1
======= ======= ======= ======= ========= =======
September 30, December 31,
------------- ------------
2009 2008
-------- --------
(Millions)
Cash and cash equivalents $12.9 $61.9
Other current assets 125.8 153.5
Restricted investments (a) 10.0 60.2
Property, plant and equipment, net 976.0 882.7
Other long-term assets 258.9 261.4
-------- --------
Total assets $1,383.6 $1,419.7
======== ========
Current liabilities $151.7 $163.2
Long-term debt (a) 613.0 656.5
Other long-term liabilities 54.7 37.2
Partners' equity 336.8 395.1
Noncontrolling interests 227.4 167.7
-------- --------
Total liabilities and equity $1,383.6 $1,419.7
======== ========
(a) Long-term debt includes $10 million and $60 million outstanding on
the term loan portion of our credit facility as of September 30, 2009
and December 31, 2008, respectively. These amounts are fully secured
by restricted investments.
DCP MIDSTREAM PARTNERS, LP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -----------------------
As As
Reported Reported
2009 2008 in 2008 2009 2008 in 2008
------ ------ -------- ------ ------ --------
(Millions, except per unit amounts)
Reconciliation of
Non-GAAP Financial
Measures:
Net income (loss)
attributable to
partners $9.9 $154.8 $152.7 $(11.1) $1.8 $(13.1)
Interest expense,
net 7.1 6.5 6.6 21.1 18.8 19.2
Depreciation,
amortization and
income tax
expense, net of
noncontrolling
interest 13.5 10.8 8.6 39.3 32.2 25.7
Non-cash commodity
derivative
mark-to-market (0.3) (154.3) (154.3) 53.5 44.4 44.4
----- ------ ------ ------ ----- -----
Adjusted EBITDA 30.2 17.8 13.6 102.8 97.2 76.2
Interest expense,
net (7.1) (6.5) (6.6) (21.1) (18.8) (19.2)
Depreciation,
amortization and
income tax
expense, net of
noncontrolling
interest (13.5) (10.8) (8.6) (39.3) (32.2) (25.7)
Other - - - 0.2 0.2 0.2
----- ------ ------ ------ ----- -----
Adjusted net income
(loss)
attributable to
partners 9.6 0.5 (1.6) 42.6 46.4 31.5
Maintenance capital
expenditures, net
of reimbursable
projects (1.0) (2.3) (1.6) (9.9) (5.3) (3.5)
Distributions from
equity method
investments, net
of earnings (0.9) 2.6 4.3 (0.5) 6.6 11.2
Depreciation and
amortization, net
of noncontrolling
interest 13.5 10.7 8.6 39.3 31.8 25.7
Proceeds from
divestiture of
assets - 2.5 2.5 0.3 2.5 2.5
----- ------ ------ ------ ----- -----
Distributable cash
flow $21.2 $14.0 $12.2 $71.8 $82.0 $67.4
===== ====== ====== ====== ===== =====
Adjusted net income
(loss)
attributable to
partners $9.6 $0.5 $(1.6) $42.6 $46.4 $31.5
Net (income) loss
attributable to
predecessor
operations - (2.1) - 1.0 (14.9) -
General partner
interest in net
income or net loss (3.4) (2.9) (2.9) (10.0) (8.9) (8.9)
----- ------ ------ ------ ----- -----
Adjusted net income
(loss) allocable
to limited
partners $6.2 $(4.5) $(4.5) $33.6 $22.6 $22.6
===== ====== ====== ====== ===== =====
Adjusted net income
(loss) per unit $0.20 $(0.16) $(0.16) $1.10 $0.83 $0.83
===== ====== ====== ====== ===== =====
Net cash provided
by operating
activities $43.8 $50.2 $42.0 $95.1 $121.0 $54.7
Interest expense,
net 7.1 6.5 6.6 21.1 18.8 19.2
Distributions from
equity method
investments, net
of earnings 0.9 (2.6) (4.3) 0.5 (6.6) (11.2)
Net changes in
operating assets
and liabilities (16.1) 125.4 125.2 (56.5) (42.7) (28.2)
Net income
attributable to
noncontrolling
interests, net of
depreciation and
income tax (5.4) (7.3) (1.4) (11.4) (39.2) (3.3)
Non-cash commodity
derivative
mark-to-market (0.3) (154.3) (154.3) 53.5 44.4 44.4
Other, net 0.2 (0.1) (0.2) 0.5 1.5 0.6
----- ------ ------ ------ ----- -----
Adjusted EBITDA 30.2 17.8 13.6 102.8 97.2 76.2
Interest expense,
net (7.1) (6.5) (6.6) (21.1) (18.8) (19.2)
Maintenance capital
expenditures, net
of reimbursable
projects (1.0) (2.3) (1.6) (9.9) (5.3) (3.5)
Distributions from
equity method
investments, net
of earnings (0.9) 2.6 4.3 (0.5) 6.6 11.2
Other - 2.4 2.5 0.5 2.3 2.7
----- ------ ------ ------ ----- -----
Distributable cash
flow $21.2 $14.0 $12.2 $71.8 $82.0 $67.4
===== ====== ====== ====== ===== =====
DCP MIDSTREAM PARTNERS, LP
SEGMENT FINANCIAL RESULTS AND OPERATING DATA
AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
As As
Reported Reported
2009 2008 in 2008 2009 2008 in 2008
------ ------ -------- ------ ------ --------
(Millions, except as indicated)
Natural Gas Services
Segment:
Financial results:
Segment net income
attributable to
partners $20.8 $170.1 $165.5 $1.8 $35.6 $13.3
Non-cash commodity
derivative
mark-to-market 0.3 (154.1) (154.1) 54.2 47.1 47.1
Depreciation and
amortization
expense 15.8 12.3 8.1 45.1 36.7 24.3
Noncontrolling
interest on
depreciation and
income tax (2.9) (2.3) (0.2) (8.1) (7.2) (0.6)
------ ------ ------ ------ ------ ------
Adjusted segment
EBITDA $34.0 $26.0 $19.3 $93.0 $112.2 $84.1
====== ====== ====== ====== ====== ======
Operating and
financial data:
Natural gas
throughput (MMcf/d) 1,111 816 704 1,071 926 797
NGL gross production
(Bbls/d) 30,843 24,824 18,783 27,086 29,409 22,241
Operating and
maintenance expense $16.1 $17.5 $7.9 $43.8 $49.0 $23.7
Wholesale Propane
Logistics Segment:
Financial results:
Segment net income
(loss) attributable
to partners $2.4 $(1.3) $(1.3) $28.2 $5.2 $5.2
Non-cash commodity
derivative
mark-to-market (0.6) (0.2) (0.2) (0.7) (2.7) (2.7)
Depreciation and
amortization
expense 0.3 0.3 0.3 1.0 0.9 0.9
------ ------ ------ ------ ------ ------
Adjusted segment
EBITDA $2.1 $(1.2) $(1.2) $28.5 $3.4 $3.4
====== ====== ====== ====== ====== ======
Operating and
financial data:
Propane sales volume
(Bbls/d) 12,435 11,445 11,445 21,146 19,934 19,934
Operating and
maintenance expense $2.5 $1.9 $1.9 $7.6 $7.3 $7.3
NGL Logistics
Segment:
Financial results:
Segment net income
attributable to
partners $1.7 $1.1 $1.1 $3.8 $4.4 $4.4
Depreciation and
amortization
expense 0.3 0.4 0.4 1.1 1.1 1.1
------ ------ ------ ------ ------ ------
Adjusted segment
EBITDA $2.0 $1.5 $1.5 $4.9 $5.5 $5.5
====== ====== ====== ====== ====== ======
Operating and
financial data:
NGL pipelines
throughput (Bbls/d) 32,417 31,881 31,881 27,745 32,681 32,681
Operating and
maintenance expense $0.4 $0.4 $0.4 $0.9 $0.8 $0.8
SOURCE DCP Midstream Partners, LP
