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): March 3,
2010
DCP
MIDSTREAM PARTNERS, LP
(Exact
name of registrant as specified in its charter)
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Delaware
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001-32678
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03-0567133
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
No.)
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Identification
No.)
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370
17th Street, Suite 2775
Denver,
Colorado 80202
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code (303) 633-2900
(Former
name or former address, if changed since last report) Not Applicable
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the Registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.02 Results of Operations and Financial Condition.
On March
3, 2010, DCP Midstream Partners, LP announced its financial results for the
fourth quarter and year ended 2009 pursuant to a press release. A
copy of the press release is furnished as Exhibit 99.1 to this current report on
Form 8-K, and is incorporated herein by reference. The press release
contains financial measures that are not presented in accordance with accounting
principles generally accepted in the United States of America, or GAAP, for the
applicable periods presented, including Adjusted EBITDA and Adjusted segment
EBITDA for each of our three business segments. The most directly
comparable GAAP financial measures to Adjusted EBITDA are net income or loss
attributable to partners, which is presented prominently in the attached press
release for the applicable periods presented, and net cash provided by operating
activities, which is presented in the attached press release and prominently
below for the applicable periods presented. The most directly comparable segment
GAAP financial measure for each business segment is the applicable segment net
income or loss attributable to partners, which GAAP financial measures are set
forth in the release and below for the applicable periods
presented:
DCP
MIDSTREAM PARTNERS, LP
GAAP
FINANCIAL MEASURES
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(Unaudited)
Three Months Ended
December 31,
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Year Ended
December 31,
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|||||||||||||||||||||||
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2009
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2008
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As
Reported in
2008
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2009
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2008
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As
Reported in
2008
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(millions)
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(millions)
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Net
cash provided by operating activities
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$ | 12.8 | $ | 56.6 | $ | 46.8 | $ | 107.9 | $ | 177.6 | $ | 101.5 | ||||||||||||
DCP
MIDSTREAM PARTNERS, LP
SEGMENT
GAAP FINANCIAL MEASURES
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(Unaudited)
Three Months Ended
September 30,
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Year Ended
December 31,
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2009
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2008
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As
Reported in
2008
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2009
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2008
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As
Reported in
2008
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(millions)
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(millions)
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Natural
Gas Services Segment:
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Segment
net (loss) income attributable to partners
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$ | (3.9 | ) | $ | 160.1 | $ | 156.9 | $ | (2.1 | ) | $ | 195.7 | $ | 170.2 | ||||||||||
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Wholesale
Propane Logistics Segment:
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Segment
net income (loss) attributable to partners
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$ | 9.0 | $ | (3.9 | ) | $ | (3.9 | ) | $ | 37.2 | $ | 1.3 | $ | 1.3 | ||||||||||
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NGL
Logistics Segment:
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Segment
net income attributable to partners
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$ | 3.1 | $ | 1.1 | $ | 1.1 | $ | 6.9 | $ | 5.5 | $ | 5.5 | ||||||||||||
In
accordance with General Instruction B.2 of Form 8-K, the press release shall not
be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liabilities of that section,
nor shall such information or exhibit be deemed incorporated by reference into
any filing under the Securities Act of 1933 or Securities Exchange Act of 1934,
each as amended, except as shall be expressly set forth by specific reference in
any such filing.
Item
8.0 Other Events.
On February 27, 2009, a jury in the
District Court, Harris County, Texas rendered a verdict in favor of El Paso
E&P Company, L.P., or El Paso, and against one of our subsidiaries and DCP
Midstream, LLC. As previously disclosed, the lawsuit, filed in December 2006,
stems from an ongoing commercial dispute involving our Minden processing plant
that dates back to August 2000. During the second quarter of 2009 we filed an
appeal in the 14th Court
of Appeals, Texas. El Paso filed an additional lawsuit in the District Court of
Webster Parish, Louisiana, claiming damages for the same claims as the Texas
matter, but for periods prior to our ownership of the Minden processing plant.
The Louisiana court determined in August 2009 that El Paso’s Louisiana claims
were barred by the doctrine of res judicata and dismissed the case with
prejudice in Louisiana. In January 2010, we and DCP Midstream, LLC
entered into a settlement agreement with El Paso to resolve all claims brought
by El Paso regarding this matter in Texas and Louisiana. Under the terms of the
settlement agreement, we paid El Paso approximately $2.2 million for our portion
of the settlement, which is within the amount of our previously disclosed
contingent liability. The cases have been dismissed in both Texas and
Louisiana.
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit Number
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Description
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99.1
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Press
Release dated March 3,
2010.
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SIGNATURE
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.
Dated: March
3, 2010
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DCP
MIDSTREAM PARTNERS, LP
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By:
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DCP
MIDSTREAM GP, LP,
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its
General Partner
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By:
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DCP
MIDSTREAM GP, LLC,
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its
General Partner
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By:
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/s/ Michael S.
Richards
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Name:
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Michael S. Richards
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Title:
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Vice
President, General Counsel and
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Secretary
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EXHIBIT
INDEX
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Exhibit Number
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Description
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99.1
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Press
Release dated March 3,
2010
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March
3, 2010
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MEDIA
AND
INVESTOR
RELATIONS
CONTACT:
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Karen
L. Quast
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Phone:
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303/633-2913
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24-Hour:
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303/809-9160
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DCP
MIDSTREAM PARTNERS REPORTS SOLID FOURTH QUARTER AND YEAR END 2009
RESULTS
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·
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Delivered 1.45x distribution
coverage in the fourth quarter and 1.20x for the
year
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Achieved investment grade
credit rating
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Strategic acquisitions increase
fee-based margins
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DENVER –
DCP Midstream Partners, LP (NYSE: DPM), or the Partnership, today reported
financial results for the three and twelve months ended December 31, 2009. The
table below reflects 2009 and 2008 results on a consolidated basis and 2008
results as originally reported.
FOURTH
QUARTER AND YEAR END SUMMARY RESULTS(2)
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Three Months Ended
December 31,
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Year Ended
December 31,
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2009
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2008
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As
Reported
in 2008
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2009
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2008
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As
Reported in
2008
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(Unaudited)
(Millions, except per unit amounts)
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Net
(loss) income attributable to partners
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$ | (8.0 | ) | $ | 140.1 | $ | 138.8 | $ | (19.1 | ) | $ | 141.9 | $ | 125.7 | ||||||||||
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Net
(loss) income per limited partner unit
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$ | (0.35 | ) | $ | 4.75 | $ | 4.75 | $ | (0.99 | ) | $ | 4.11 | $ | 4.11 | ||||||||||
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Adjusted
EBITDA(1)
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$ | 43.4 | $ | 14.1 | $ | 10.8 | $ | 146.2 | $ | 111.3 | $ | 87.0 | ||||||||||||
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Adjusted
net income (loss) attributable to partners(1)
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$ | 22.1 | $ | (5.5 | ) | $ | (6.8 | ) | $ | 64.7 | $ | 40.9 | $ | 24.7 | ||||||||||
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Adjusted
net income (loss) per limited partner unit(1)
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$ | 0.56 | $ | (0.34 | ) | $ | (0.34 | ) | $ | 1.67 | $ | 0.47 | $ | 0.47 | ||||||||||
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Distributable
cash flow(1)
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$ | 35.7 | $ | 12.7 | $ | 10.4 | $ | 107.5 | $ | 94.7 | $ | 77.8 | ||||||||||||
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(1)
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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.
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(2)
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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 (“DCP Midstream”), 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.
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Additionally,
note that while the Partnership hedges the majority of its commodity risk, the
portion of East Texas owned by DCP Midstream 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.
2009
HIGHLIGHTS
Our 2009
business plan had been predicated on navigating through a difficult operating
environment. It has been a challenging year, but one that
demonstrates our resiliency and our focus. We successfully delivered
on the elements of our business plan.
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·
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We
restored operations following: (1) the hurricanes at Discovery,
(2) pipeline integrity and system enhancement work to our Wyoming system,
and (3) the fire caused by the third party pipeline rupture at East
Texas.
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We
acquired an additional 25.1% interest in East Texas from DCP Midstream,
LLC, demonstrating the support of our
sponsor.
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We
completed our organic expansion projects in East Texas, Discovery, and the
Piceance basin.
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Throughout
the challenging environment, we have continued to maintain strong
liquidity and credit metrics, and maintained our quarterly distribution of
$0.60 per unit.
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In
addition to executing our 2009 business plan commitments, we accomplished the
following:
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·
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We
closed a $45 million acquisition of fee-based natural gas gathering and
treating assets in Michigan. This bolt-on acquisition in our
footprint has assets that are in some cases already interconnected with
our existing assets, providing us with operating synergies and
consolidation opportunities.
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·
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We
completed a public equity offering of 2,875,000 common units, providing
$69.5 million in net proceeds, which provides us with the financial
flexibility to continue to actively pursue growth
opportunities.
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·
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We
received an investment grade rating of BBB-/Stable from Standard &
Poor’s. The investment grade rating can provide us an advantage
in terms of cost of capital and access to capital
markets.
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In
January 2010 we closed a $22 million fee-based acquisition of our 350 mile
Wattenberg interstate NGL pipeline and announced a related $18 million
expansion capital project which is expected to be completed in early
2011. The pipeline originates in Colorado’s Denver-Julesburg
Basin and delivers volumes from plants owned by DCP Midstream, the largest
gatherer and processor in the basin, to Bushton,
Kansas.
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Our
distributable cash flow for the year was the highest since inception of the
Partnership, reflecting strong performance from our wholesale propane and NGL
logistics segments, the addition of our Michigan acquisitions, increased NGL
production, and reduced operating costs, partially offset by lower gas
throughput volumes at certain of our natural gas assets. Our steady
performance in delivering on our commitments this year has enabled us to deliver
a total return to our unitholders of 260%.
CEO
PERSPECTIVE
“We
finished the year strong, with record adjusted EBITDA and distributable cash
flow, and with a series of accomplishments that position us well as we enter
2010,” said Mark Borer, president and CEO of the Partnership. “Our diversified
asset portfolio delivered distribution coverage of 1.45 times for the quarter
and 1.20 times for the year. In the fourth quarter, we expanded our asset base
in Michigan with a complementary acquisition, completed a successful equity
offering, and achieved an investment grade credit rating from S&P, the
latter marking a key milestone for the Partnership. Looking forward, we believe
we are favorably positioned to capture additional growth
opportunities.”
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CONSOLIDATED
FINANCIAL RESULTS
Adjusted
EBITDA increased from $14.1 million for the three months ended December 31,
2008, to $43.4 million for the three months ended December 31, 2009, reflecting
strong performance from our wholesale propane and NGL logistics segments,
increased NGL production and reduced operating costs, partially offset by lower
gas throughput volumes at certain of our natural gas assets. Adjusted EBITDA in
the fourth 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 $111.3 million for the year
ended December 31, 2008, to $146.2 million for the year ended December 31, 2009,
reflecting the addition of our Michigan acquisition, strong performance from our
wholesale propane and NGL logistics segments, and reduced operating costs,
partially offset by the impacts of lower commodity prices and lower gas
throughput volumes at certain of our natural gas assets. 2009 results
include the impact from operational downtime at our Discovery and East Texas
assets in the first quarter.
On
January 26, 2010, the Partnership announced a quarterly distribution of $0.60
per limited partner unit, consistent with the prior quarter. Our distributable
cash flow of $35.7 million for the three months ended December 31, 2009 provided
a 1.45 times distribution coverage ratio for the quarter. Distributable cash
flow of $107.5 million for the year ended December 31, 2009 provided a 1.20
times distribution coverage ratio.
OPERATING
RESULTS BY BUSINESS SEGMENT
Natural Gas Services —
Adjusted segment EBITDA increased from $25.3 million for the three months ended
December 31, 2008, to $39.4 million for the three months ended December 31,
2009, reflecting increased NGL production and reduced operating costs, partially
offset by lower gas throughput volumes at certain of our natural gas
assets. Adjusted segment EBITDA in the fourth quarter of 2008 was
significantly impacted by hurricanes.
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Adjusted
segment EBITDA was $132.4 million for the year ended December 31, 2009, as
compared to $137.5 million for the year ended December 31,
2008. Results for 2009 include the impact from operational downtime
at our Discovery and East Texas assets in the first quarter. Results
for the first nine months of 2008 reflect a much stronger commodity price,
drilling and processing environment than the same period in 2009, while the
fourth quarter of 2008 was significantly impacted by hurricanes.
Segment
operating and maintenance expense decreased $3.1 million for the three months
ended December 31, 2009 and $8.3 million for the year ended December 31, 2009.
The decrease in these expenses was driven by our cost reduction efforts,
partially offset by the addition of our Michigan systems.
Wholesale Propane Logistics —
Adjusted segment EBITDA increased from a $3.2 million loss for the three months
ended December 31, 2008 to $9.3 million for the three months ended December 31,
2009. Results for the fourth quarter of 2008 include a non-cash accounting
adjustment to reflect inventory carrying costs at the lower of cost or market
price. For the year ended December 31, adjusted segment EBITDA
increased from $0.2 million in 2008 to $37.8 million in 2009, reflecting an
increase in unit margins, approximately $6.0 million of which is attributable to
the sale of inventory that was previously written down, and a six percent
increase in volumes.
NGL Logistics — Adjusted
segment EBITDA increased from $1.4 million for the three months ended December
31, 2008, to $3.4 million for the three months ended December 31, 2009. Results
for the quarter include volumes associated with a pipeline interconnect added in
the third quarter of 2009. Adjusted segment EBITDA increased from
$6.9 million for the year ended December 31, 2008, to $8.3 million for the year
ended December 31, 2009, reflecting higher unit margins, partially offset by
lower volumes. Volumes in 2009 were impacted by ethane rejection at
certain connected processing plants in the first quarter.
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CORPORATE
AND OTHER
General
and administrative expense decreases for the three and twelve months ended
December 31, 2009 reflect our cost reduction efforts, partially offset by the
addition of the Michigan systems. Increased depreciation and amortization
expense for the three and twelve months ended December 31, 2009, reflect the
acquisition of the Michigan systems 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 twelve months ended December 31, 2009 derivative activity and total
revenues included a non-cash loss of approximately $29.9 million and $83.4
million, respectively, and cash hedge settlements paid of $0.7 million and cash
hedge settlements received of $16.6 million, respectively. This compares to a
non-cash gain of $146.0 million and $101.6 million for the three and twelve
months ended December 31, 2008, respectively, and cash hedge settlement receipts
of $7.8 million and cash hedge settlement payments of $30.7 million for the
three and twelve months ended December 31, 2008, respectively. While our
earnings will continue to fluctuate as a result of the volatility in the
commodity markets, our commodity derivative contracts mitigate a portion of the
risk of weakening commodity prices thereby stabilizing distributable cash
flows.
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CAPITALIZATION
Our
credit facility of $825 million is comprised of a revolver and term loan that
mature in June 2012. At December 31, 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 December 31, 2009, was approximately
3.7 times.
Our
committed 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 committed liquidity at December 31,
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 December 31, 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 December 31, 2009, was 4.4 percent.
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EARNINGS
CALL
DCP
Midstream Partners will hold a conference call to discuss fourth quarter and
year end results on Thursday, March 4, 2010, 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 March 12, 2010, by
dialing 877-344-7529, in the United States or 412-317-0088 outside the United
States. The conference number is 437679. 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, net income attributable to noncontrolling
interest net of depreciation and income tax, 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 and performance 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.
- 8
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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:
- 9
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·
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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;
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·
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financial
performance of our assets without regard to financing methods, capital
structure or historical cost basis;
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·
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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
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·
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viability
of acquisitions and capital expenditure projects and the overall rates of
return on alternative investment
opportunities.
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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.
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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.
The
key risk factors that may have a direct bearing on the Partnership’s results of
operations and financial condition are described in detail in the Partnership’s
periodic reports most recently filed with the Securities and Exchange
Commission, including its most recent Form 10-K. 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.
- 11
- -
FINANCIAL
RESULTS AND
SUMMARY
BALANCE SHEET DATA
(Unaudited)
|
Three Months Ended
December 31,
|
Year Ended
December 31,
|
|||||||||||||||||||||||
|
2009
|
2008
|
As
Reported
in 2008
|
2009
|
2008
|
As
Reported
in 2008
|
|||||||||||||||||||
|
(Millions,
except per unit amounts)
|
||||||||||||||||||||||||
|
Sales
of natural gas, propane, NGLs and condensate
|
$ | 304.1 | $ | 275.0 | $ | 203.9 | $ | 913.0 | $ | 1,672.7 | $ | 1,156.3 | ||||||||||||
|
Transportation,
processing and other
|
26.5 | 25.8 | 17.5 | 95.2 | 86.1 | 57.2 | ||||||||||||||||||
|
(Losses)
gains from commodity derivative activity, net
|
(30.3 | ) | 154.0 | 154.0 | (65.8 | ) | 71.7 | 72.3 | ||||||||||||||||
|
Total
operating revenues
|
300.3 | 454.8 | 375.4 | 942.4 | 1,830.5 | 1,285.8 | ||||||||||||||||||
|
Purchases
of natural gas, propane and NGLs
|
(259.7 | ) | (252.6 | ) | (194.3 | ) | (776.2 | ) | (1,481.0 | ) | (1,061.2 | ) | ||||||||||||
|
Operating
and maintenance expense
|
(17.4 | ) | (20.3 | ) | (11.2 | ) | (69.7 | ) | (77.4 | ) | (43.0 | ) | ||||||||||||
|
Depreciation
and amortization expense
|
(17.6 | ) | (14.5 | ) | (10.2 | ) | (64.9 | ) | (53.2 | ) | (36.5 | ) | ||||||||||||
|
General
and administrative expense
|
(8.7 | ) | (9.4 | ) | (7.2 | ) | (32.3 | ) | (33.3 | ) | (24.0 | ) | ||||||||||||
|
Other
|
— | — | — | — | 1.5 | 1.5 | ||||||||||||||||||
|
Total
operating costs and expenses
|
(303.4 | ) | (296.8 | ) | (222.9 | ) | (943.1 | ) | (1,643.4 | ) | (1,163.2 | ) | ||||||||||||
|
Operating
(loss) income
|
(3.1 | ) | 158.0 | 152.5 | (0.7 | ) | 187.1 | 122.6 | ||||||||||||||||
|
Interest
expense, net
|
(6.9 | ) | (7.9 | ) | (8.0 | ) | (28.0 | ) | (26.7 | ) | (27.2 | ) | ||||||||||||
|
Earnings
(losses) from unconsolidated affiliates
|
7.5 | (6.0 | ) | (4.4 | ) | 18.5 | 18.2 | 34.3 | ||||||||||||||||
|
Income
tax expense
|
(0.5 | ) | 0.1 | (0.1 | ) | (0.6 | ) | (0.6 | ) | (0.1 | ) | |||||||||||||
|
Net
income attributable to noncontrolling interests
|
(5.0 | ) | (4.1 | ) | (1.2 | ) | (8.3 | ) | (36.1 | ) | (3.9 | ) | ||||||||||||
|
Net
(loss) income attributable to partners
|
$ | (8.0 | ) | $ | 140.1 | $ | 138.8 | $ | (19.1 | ) | $ | 141.9 | $ | 125.7 | ||||||||||
|
Net
loss (income) attributable to predecessor operations
|
— | (1.3 | ) | — | 1.0 | (16.2 | ) | — | ||||||||||||||||
|
General
partner interest in net income or net loss
|
(3.4 | ) | (4.7 | ) | (4.7 | ) | (12.7 | ) | (13.0 | ) | (13.0 | ) | ||||||||||||
|
Net
(loss) income allocable to limited partners
|
$ | (11.4 | ) | $ | 134.1 | $ | 134.1 | $ | (30.8 | ) | $ | 112.7 | $ | 112.7 | ||||||||||
|
Net
(loss) income per limited partner unit—basic and diluted
|
$ | (0.35 | ) | $ | 4.75 | $ | 4.75 | $ | (0.99 | ) | $ | 4.11 | $ | 4.11 | ||||||||||
|
Weighted-average
limited partner units outstanding—basic and diluted
|
32.9 | 28.2 | 28.2 | 31.2 | 27.4 | 27.4 | ||||||||||||||||||
|
December 31,
2009
|
December 31,
2008
|
|||||||
|
(Millions)
|
||||||||
|
Cash
and cash equivalents
|
$ | 2.1 | $ | 61.9 | ||||
|
Other
current assets
|
195.6 | 153.5 | ||||||
|
Restricted
investments (a)
|
10.0 | 60.2 | ||||||
|
Property,
plant and equipment, net
|
1,000.1 | 882.7 | ||||||
|
Other
long-term assets
|
273.7 | 261.4 | ||||||
|
Total
assets
|
$ | 1,481.5 | $ | 1,419.7 | ||||
|
Current
liabilities
|
$ | 191.1 | $ | 163.2 | ||||
|
Long-term
debt (a)
|
613.0 | 656.5 | ||||||
|
Other
long-term liabilities
|
72.0 | 37.2 | ||||||
|
Partners’
equity
|
377.7 | 395.1 | ||||||
|
Noncontrolling
interests
|
227.7 | 167.7 | ||||||
|
Total
liabilities and equity
|
$ | 1,481.5 | $ | 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 December 31, 2009 and December 31,
2008, respectively. These amounts are fully secured by restricted
investments.
|
||||||||
- 12
- -
DCP
MIDSTREAM PARTNERS, LP
RECONCILIATION
OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
|
Three Months Ended
December 31,
|
Year Ended
December 31,
|
|||||||||||||||||||||||
|
2009
|
2008
|
As
Reported
in 2008
|
2009
|
2008
|
As
Reported
in 2008
|
|||||||||||||||||||
|
(Millions,
except per unit amounts)
|
||||||||||||||||||||||||
|
Reconciliation
of Non-GAAP Financial Measures:
|
||||||||||||||||||||||||
|
Net
(loss) income attributable to partners
|
$ | (8.0 | ) | $ | 140.1 | $ | 138.8 | $ | (19.1 | ) | $ | 141.9 | $ | 125.7 | ||||||||||
|
Interest
expense, net
|
6.9 | 7.9 | 8.0 | 28.0 | 26.7 | 27.2 | ||||||||||||||||||
|
Depreciation,
amortization and income tax expense, net of noncontrolling
interest
|
14.6 | 12.1 | 10.0 | 53.9 | 44.3 | 35.7 | ||||||||||||||||||
|
Non-cash
commodity derivative mark-to-market
|
29.9 | (146.0 | ) | (146.0 | ) | 83.4 | (101.6 | ) | (101.6 | ) | ||||||||||||||
|
Adjusted
EBITDA
|
43.4 | 14.1 | 10.8 | 146.2 | 111.3 | 87.0 | ||||||||||||||||||
|
Interest
expense, net
|
(6.9 | ) | (7.9 | ) | (8.0 | ) | (28.0 | ) | (26.7 | ) | (27.2 | ) | ||||||||||||
|
Depreciation,
amortization and income tax expense, net of noncontrolling
interest
|
(14.6 | ) | (12.1 | ) | (10.0 | ) | (53.9 | ) | (44.3 | ) | (35.7 | ) | ||||||||||||
|
Other
|
0.2 | 0.4 | 0.4 | 0.4 | 0.6 | 0.6 | ||||||||||||||||||
|
Adjusted
net income (loss) attributable to partners
|
22.1 | (5.5 | ) | (6.8 | ) | 64.7 | 40.9 | 24.7 | ||||||||||||||||
|
Maintenance
capital expenditures, net of reimbursable projects
|
(2.7 | ) | (8.0 | ) | (7.5 | ) | (12.6 | ) | (13.3 | ) | (11.0 | ) | ||||||||||||
|
Distributions
from unconsolidated affiliates, net of earnings
|
2.2 | 13.6 | 14.4 | 1.7 | 20.2 | 25.6 | ||||||||||||||||||
|
Depreciation
and amortization, net of noncontrolling interest
|
14.1 | 12.2 | 9.9 | 53.4 | 44.0 | 35.6 | ||||||||||||||||||
|
Proceeds
from divestiture of assets
|
— | 0.4 | 0.4 | 0.3 | 2.9 | 2.9 | ||||||||||||||||||
|
Distributable
cash flow
|
$ | 35.7 | $ | 12.7 | $ | 10.4 | $ | 107.5 | $ | 94.7 | $ | 77.8 | ||||||||||||
|
Adjusted
net income (loss) attributable to partners
|
$ | 22.1 | $ | (5.5 | ) | $ | (6.8 | ) | $ | 64.7 | $ | 40.9 | $ | 24.7 | ||||||||||
|
Net
(income) loss attributable to predecessor operations
|
— | (1.3 | ) | — | 1.0 | (16.2 | ) | — | ||||||||||||||||
|
General
partner interest in net income or net loss
|
(3.7 | ) | (2.8 | ) | (2.8 | ) | (13.7 | ) | (11.7 | ) | (11.7 | ) | ||||||||||||
|
Adjusted
net income (loss) allocable to limited partners
|
$ | 18.4 | $ | (9.6 | ) | $ | (9.6 | ) | $ | 52.0 | $ | 13.0 | $ | 13.0 | ||||||||||
|
Adjusted
net income (loss) per unit
|
$ | 0.56 | $ | (0.34 | ) | $ | (0.34 | ) | $ | 1.67 | $ | 0.47 | $ | 0.47 | ||||||||||
|
Net
cash provided by operating activities
|
$ | 12.8 | $ | 56.6 | $ | 46.8 | $ | 107.9 | $ | 177.6 | $ | 101.5 | ||||||||||||
|
Interest
expense, net
|
6.9 | 7.9 | 8.0 | 28.0 | 26.7 | 27.2 | ||||||||||||||||||
|
Distributions
from unconsolidated affiliates, net of earnings
|
(2.2 | ) | (13.6 | ) | (14.4 | ) | (1.7 | ) | (20.2 | ) | (25.6 | ) | ||||||||||||
|
Net
changes in operating assets and liabilities
|
4.0 | 115.8 | 118.0 | (52.5 | ) | 73.1 | 89.8 | |||||||||||||||||
|
Net
income attributable to noncontrolling interests, net of depreciation and
income tax
|
(8.5 | ) | (6.4 | ) | (1.5 | ) | (19.9 | ) | (45.6 | ) | (4.8 | ) | ||||||||||||
|
Non-cash
commodity derivative mark-to-market
|
29.9 | (146.0 | ) | (146.0 | ) | 83.4 | (101.6 | ) | (101.6 | ) | ||||||||||||||
|
Other,
net
|
0.5 | (0.2 | ) | (0.1 | ) | 1.0 | 1.3 | 0.5 | ||||||||||||||||
|
Adjusted
EBITDA
|
43.4 | 14.1 | 10.8 | 146.2 | 111.3 | 87.0 | ||||||||||||||||||
|
Interest
expense, net
|
(6.9 | ) | (7.9 | ) | (8.0 | ) | (28.0 | ) | (26.7 | ) | (27.2 | ) | ||||||||||||
|
Maintenance
capital expenditures, net of reimbursable projects
|
(2.7 | ) | (8.0 | ) | (7.5 | ) | (12.6 | ) | (13.3 | ) | (11.0 | ) | ||||||||||||
|
Distributions
from unconsolidated affiliates, net of earnings
|
2.2 | 13.6 | 14.4 | 1.7 | 20.2 | 25.6 | ||||||||||||||||||
|
Other
|
(0.3 | ) | 0.9 | 0.7 | 0.2 | 3.2 | 3.4 | |||||||||||||||||
|
Distributable
cash flow
|
$ | 35.7 | $ | 12.7 | $ | 10.4 | $ | 107.5 | $ | 94.7 | $ | 77.8 | ||||||||||||
- 13
- -
DCP
MIDSTREAM PARTNERS, LP
SEGMENT
FINANCIAL RESULTS AND OPERATING DATA
AND
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
|
Three Months Ended
December 31,
|
Year Ended
December 31,
|
|||||||||||||||||||||||
|
2009
|
2008
|
As
Reported
in 2008
|
2009
|
2008
|
As
Reported
in 2008
|
|||||||||||||||||||
|
(Millions,
except as indicated)
|
||||||||||||||||||||||||
|
Natural
Gas Services Segment:
|
||||||||||||||||||||||||
|
Financial
results:
|
||||||||||||||||||||||||
|
Segment
net (loss) income attributable to partners
|
$ | (3.9 | ) | $ | 160.1 | $ | 156.9 | $ | (2.1 | ) | $ | 195.7 | $ | 170.2 | ||||||||||
|
Non-cash
commodity derivative mark-to-market
|
30.0 | (146.3 | ) | (146.3 | ) | 84.2 | (99.2 | ) | (99.2 | ) | ||||||||||||||
|
Depreciation
and amortization expense
|
16.8 | 13.8 | 9.5 | 61.9 | 50.5 | 33.8 | ||||||||||||||||||
|
Noncontrolling
interest on depreciation and income tax
|
(3.5 | ) | (2.3 | ) | (0.3 | ) | (11.6 | ) | (9.5 | ) | (0.9 | ) | ||||||||||||
|
Adjusted
segment EBITDA
|
$ | 39.4 | $ | 25.3 | $ | 19.8 | $ | 132.4 | $ | 137.5 | $ | 103.9 | ||||||||||||
|
Operating
and financial data:
|
||||||||||||||||||||||||
|
Natural
gas throughput (MMcf/d)
|
1,083 | 1,068 | 954 | 1,072 | 961 | 838 | ||||||||||||||||||
|
NGL
gross production (Bbls/d)
|
33,578 | 23,773 | 15,911 | 28,831 | 28,000 | 20,659 | ||||||||||||||||||
|
Operating
and maintenance expense
|
$ | 14.4 | $ | 17.5 | $ | 8.4 | $ | 58.2 | $ | 66.5 | $ | 32.1 | ||||||||||||
|
Wholesale
Propane Logistics Segment:
|
||||||||||||||||||||||||
|
Financial
results:
|
||||||||||||||||||||||||
|
Segment
net income (loss) attributable to partners
|
$ | 9.0 | $ | (3.9 | ) | $ | (3.9 | ) | $ | 37.2 | $ | 1.3 | $ | 1.3 | ||||||||||
|
Non-cash
commodity derivative mark-to-market
|
(0.1 | ) | 0.3 | 0.3 | (0.8 | ) | (2.4 | ) | (2.4 | ) | ||||||||||||||
|
Depreciation
and amortization expense
|
0.4 | 0.4 | 0.4 | 1.4 | 1.3 | 1.3 | ||||||||||||||||||
|
Adjusted
segment EBITDA
|
$ | 9.3 | $ | (3.2 | ) | $ | (3.2 | ) | $ | 37.8 | $ | 0.2 | $ | 0.2 | ||||||||||
|
Operating
and financial data:
|
||||||||||||||||||||||||
|
Propane
sales volume (Bbls/d)
|
25,673 | 24,411 | 24,411 | 22,278 | 21,053 | 21,053 | ||||||||||||||||||
|
Operating
and maintenance expense
|
$ | 2.7 | $ | 2.6 | $ | 2.6 | $ | 10.3 | $ | 9.9 | $ | 9.9 | ||||||||||||
|
NGL
Logistics Segment:
|
||||||||||||||||||||||||
|
Financial
results:
|
||||||||||||||||||||||||
|
Segment
net income attributable to partners
|
$ | 3.1 | $ | 1.1 | $ | 1.1 | $ | 6.9 | $ | 5.5 | $ | 5.5 | ||||||||||||
|
Depreciation
and amortization expense
|
0.3 | 0.3 | 0.3 | 1.4 | 1.4 | 1.4 | ||||||||||||||||||
|
Adjusted
segment EBITDA
|
$ | 3.4 | $ | 1.4 | $ | 1.4 | $ | 8.3 | $ | 6.9 | $ | 6.9 | ||||||||||||
|
Operating
and financial data:
|
||||||||||||||||||||||||
|
NGL
pipelines throughput (Bbls/d)
|
37,403 | 27,583 | 27,583 | 30,160 | 31,407 | 31,407 | ||||||||||||||||||
|
Operating
and maintenance expense
|
$ | 0.3 | $ | 0.2 | $ | 0.2 | $ | 1.2 | $ | 1.0 | $ | 1.0 | ||||||||||||
###
- 14
- -