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): August 6,
2009
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
|
|
(State
or other jurisdiction of incorporation)
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(Commission
File No.)
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(IRS
Employer 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:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR
240.14d-2(b))
o 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 6, 2009, DCP Midstream
Partners, LP announced its financial results for the second quarter of 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
(Unaudited)
|
Three
Months Ended
June
30,
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Six
Months Ended
June
30,
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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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|||||||||||||||||||
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(Millions)
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(Millions)
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|||||||||||||||||||||||
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Net
cash provided by operating activities
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$ | 20.8 | $ | 11.5 | $ | (12.4 | ) | $ | 51.3 | $ | 70.8 | $ | 12.7 | |||||||||||
DCP
MIDSTREAM PARTNERS, LP
SEGMENT
GAAP FINANCIAL MEASURES
(Unaudited)
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Three
Months Ended
June
30,
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Six
Months Ended
June
30,
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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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|||||||||||||||||||
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(Millions)
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(Millions)
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|||||||||||||||||||||||
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Natural
Gas Services Segment:
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||||||||||||||||||||||||
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Segment
net loss attributable to partners
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$ | (32.1 | ) | $ | (141.6 | ) | $ | (150.4 | ) | $ | (19.0 | ) | $ | (134.5 | ) | $ | (152.2 | ) | ||||||
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Wholesale
Propane Logistics Segment:
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||||||||||||||||||||||||
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Segment
net income attributable to partners
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$ | 3.0 | $ | 0.9 | $ | 0.9 | $ | 25.8 | $ | 6.5 | $ | 6.5 | ||||||||||||
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NGL
Logistics Segment:
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||||||||||||||||||||||||
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Segment
net income attributable to partners
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$ | 1.1 | $ | 1.6 | $ | 1.6 | $ | 2.1 | $ | 3.3 | $ | 3.3 | ||||||||||||
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
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 August 6, 2009
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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: August 6,
2009
| DCP MIDSTREAM PARTNERS, LP | |||
| By: | DCP MIDSTREAM GP, LP,
its
General Partner
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||
| By: |
DCP MIDSTREAM GP,
LLC,
its
General Partner
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||
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By: | /s/ Michael S. Richards |
| Name: Michael S. Richards | |||
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Title:
Vice President, General Counsel and 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 August 6, 2009
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- 1 -
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August
6, 2009
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MEDIA
AND INVESTOR RELATIONS CONTACT:
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Karen
L. Taylor
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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 SECOND QUARTER 2009 RESULTS
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·
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Delivers 1.0x distribution
coverage in the second quarter and 1.2x year to
date
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DENVER –
DCP Midstream Partners, LP (NYSE: DPM), or the Partnership, today reported
financial results for the three and six months ended June 30, 2009. The table
below reflects 2009 and 2008 results on a consolidated basis and 2008 results as
originally reported.
SECOND
QUARTER AND YEAR TO DATE HIGHLIGHTS
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Three
Months Ended
June
30,
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Six
Months Ended
June
30,
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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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|||||||||||||||||||
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(Unaudited)
(Millions,
except per unit amounts)
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||||||||||||||||||||||||
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Net
loss attributable to partners
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$ | (42.1 | ) | $ | (153.1 | ) | $ | (159.3 | ) | $ | (21.0 | ) | $ | (153.0 | ) | $ | (165.8 | ) | ||||||
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Net
loss per unit
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$ | (1.41 | ) | $ | (5.67 | ) | $ | (5.67 | ) | $ | (0.86 | ) | $ | (6.36 | ) | $ | (6.36 | ) | ||||||
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Adjusted
EBITDA*
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$ | 32.4 | $ | 34.0 | $ | 25.9 | $ | 72.6 | $ | 79.4 | $ | 62.5 | ||||||||||||
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Adjusted
net income attributable to partners*
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$ | 12.1 | $ | 17.2 | $ | 11.0 | $ | 33.0 | $ | 45.9 | $ | 33.1 | ||||||||||||
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Adjusted
net income per unit*
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$ | 0.31 | $ | 0.28 | $ | 0.28 | $ | 0.86 | $ | 1.02 | $ | 1.02 | ||||||||||||
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Distributable
cash flow*
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$ | 23.2 | $ | 29.0 | $ | 23.2 | $ | 50.6 | $ | 68.0 | $ | 55.1 | ||||||||||||
* 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, 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.
- 2 - -
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.
Adjusted
EBITDA of $32.4 million for the three months ended June 30, 2009, as compared to
$34.0 million for the three months ended June 30, 2008, reflects the addition of
our Michigan system, reduced operating costs, continued strong results from our
wholesale propane logistics segment, and favorable cash settlements from
commodity derivatives, more than offset by the impacts of lower commodity prices
as well as lower processing margins and gas throughput volumes at certain of our
natural gas assets. Adjusted EBITDA of $72.6 million for the six months ended
June 30, 2009, as compared to $79.4 million for the six months ended June 30,
2008, also includes 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 July
28, 2009, the Partnership announced a quarterly distribution of $0.60 per
limited partner unit, consistent with the prior quarter. Our distributable cash
flow of $23.2 million for the three months ended June 30, 2009 provided a 1.0
times distribution coverage ratio for the quarter. Year to date distributable
cash flow of $50.6 million provided a 1.2 times distribution coverage ratio for
the year to date.
The
Partnership received a cash distribution from Discovery for the second quarter
of 2009 in June, which reflects a change in Discovery’s LLC Agreement to make
cash distributions for a given quarter in that same quarter.
- 3 - -
CEO
PERSPECTIVE
“We are
pleased that we delivered 1.2 times year to date distribution coverage in a
challenging business environment,” said Mark Borer, president and CEO of the
Partnership. “We remain focused on optimizing our asset portfolio, including
continued cost reduction and cash flow improvements to mitigate the impact of
the reduced commodity price and drilling environment. In the second quarter, we
completed our drop down of an additional 25.1 percent interest in East Texas,
completed a gathering pipeline expansion at East Texas, and commenced flow on
the Tahiti offshore platform at Discovery. We are delivering on all the business
plan commitments we made last December and are positioning the Partnership for
the future.”
OPERATING
RESULTS BY BUSINESS SEGMENT
Natural Gas Services —
Adjusted segment EBITDA of $34.5 million for the three months ended June 30,
2009, as compared to $38.5 million for the three months ended June 30, 2008,
reflects the addition of our Michigan system, reduced operating costs, and
favorable cash settlements from commodity derivatives, more than offset by the
impacts of lower commodity prices as well as lower processing margins and gas
throughput volumes, primarily at our East Texas and North Louisiana
assets.
Adjusted
segment EBITDA of $59.0 million for the six months ended June 30, 2009, as
compared to $86.2 million for the six months ended June 30, 2008 also includes
the impact from operational downtime at our Discovery, Wyoming and East Texas
assets in the first quarter of 2009. Results for the first six 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 $1.9 million for the three months
ended June 30, 2009 and $3.8 million for the six months ended June 30, 2009. The
12% decrease in expenses for each period was driven by our cost reduction
efforts, partially offset by the addition of our Michigan system.
- 4 - -
Wholesale Propane Logistics —
Adjusted segment EBITDA increased from $1.4 million for the three months ended
June 30, 2008 to $3.5 million for the three months ended June 30, 2009. For the
six months ended June 30, adjusted segment EBITDA increased from $4.6 million in
2008 to $26.4 million in 2009. Increased unit margins in the second quarter of
2009 more than offset an approximate four percent decrease in volumes compared
to the same period in 2008. 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
five percent increase in volumes.
NGL Logistics — Adjusted
segment EBITDA was $1.5 million and $2.9 million for the three and six months
ended June 30, 2009, respectively, as compared to adjusted segment adjusted
EBITDA of $1.9 million and $4.0 million for the three and six months ended June
30, 2008, respectively. Results for the 2009 quarter and year to date reflect
lower throughput volumes at connected processing plants compared to the same
periods in 2008. Year to date 2009 volumes also include the impact from ethane
rejection at certain connected processing plants early in the first quarter.
Those plants have since resumed ethane extraction.
CORPORATE
AND OTHER
General
and administrative expenses for the three and six months ended June 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 six months ended June 30,
2009, reflect additional debt for the addition of the Michigan system and
organic project spending.
- 5 - -
COMMODITY
DERIVATIVE ACTIVITY
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 six months ended June 30, 2009, derivative activity and total revenues
included a non-cash loss of approximately $54 million in each period and current
period hedge settlements received of $8 million and $14 million, respectively.
This compares to non-cash losses of $170 million and $199 million and hedge
settlement payments of $17 million and $26 million for the three and six months
ended June 30, 2008, respectively. While our earnings will continue to fluctuate
as a result of the volatility in the commodity markets, our commodity derivative
contracts help to stabilize distributable cash flows.
CAPITALIZATION
Our
credit facility of $825 million is comprised of a revolver and term loan that
mature in June 2012. At June 30, 2009, we had $603 million outstanding under our
revolver. We also had $35 million of term loan outstanding, 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 June 30, 2009, was approximately
3.7x.
- 6 - -
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 June 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 June 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 June 30, 2009, was 4.5 percent.
EARNINGS
CALL
DCP
Midstream Partners will hold a conference call to discuss second quarter results
on Friday, Aug. 7, 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 Aug. 17, 2009, by
dialing 877-344-7529, in the United States or 412-317-0088 outside the United
States. The conference number is 432333. 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.
- 7 - -
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.
- 8 - -
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:
|
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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.
- 9 - -
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:
|
|
·
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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 on natural gas drilling,
demand for our services, and the volume of NGLs and condensate
extracted;
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·
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general economic, market and
business conditions;
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·
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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;
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- 10 - -
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·
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our ability to grow through
acquisitions, contributions from affiliates, or organic growth projects,
and the successful integration and future performance of such
assets;
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·
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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;
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·
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our ability to purchase
propane from our principal suppliers for our wholesale propane logistics
business;
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·
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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;
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·
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the creditworthiness of
counterparties to our
transactions;
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·
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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;
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·
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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;
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·
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our ability to obtain
insurance on commercially reasonable terms, if at all, as well as the
adequacy of the insurance to cover our
losses;
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·
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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
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·
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the amount of collateral we
may be required to post from time to time in our
transactions.
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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
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||||||||||
|
2009
|
2008
|
As
Reported
in
2008
|
2009
|
2008
|
As
Reported
in
2008
|
|||||||||||||||||||
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(Millions,
except per unit amounts)
|
||||||||||||||||||||||||
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Sales
of natural gas, propane, NGLs and condensate
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$ | 173.7 | $ | 510.8 | $ | 318.5 | $ | 430.8 | $ | 1,008.0 | $ | 681.2 | ||||||||||||
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Transportation,
processing and other
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24.2 | 20.8 | 14.0 | 44.5 | 40.0 | 26.1 | ||||||||||||||||||
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Losses
from commodity derivative activity, net
|
(45.9 | ) | (187.3 | ) | (186.6 | ) | (38.9 | ) | (224.4 | ) | (223.7 | ) | ||||||||||||
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Total
operating revenues
|
152.0 | 344.3 | 145.9 | 436.4 | 823.6 | 483.6 | ||||||||||||||||||
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Purchases
of natural gas, propane and NGLs
|
(148.3 | ) | (446.4 | ) | (287.8 | ) | (365.2 | ) | (877.6 | ) | (617.5 | ) | ||||||||||||
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Operating
and maintenance expense
|
(17.1 | ) | (19.3 | ) | (11.0 | ) | (33.3 | ) | (37.3 | ) | (21.6 | ) | ||||||||||||
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Depreciation
and amortization expense
|
(16.3 | ) | (13.0 | ) | (9.0 | ) | (30.9 | ) | (25.7 | ) | (17.5 | ) | ||||||||||||
|
General
and administrative expense
|
(7.1 | ) | (7.8 | ) | (5.3 | ) | (15.7 | ) | (15.4 | ) | (10.8 | ) | ||||||||||||
|
Other
|
— | 1.5 | 1.5 | — | 1.5 | 1.5 | ||||||||||||||||||
|
Total operating costs and
expenses
|
(188.8 | ) | (485.0 | ) | (311.6 | ) | (445.1 | ) | (954.5 | ) | (665.9 | ) | ||||||||||||
|
Operating
loss
|
(36.8 | ) | (140.7 | ) | (165.7 | ) | (8.7 | ) | (130.9 | ) | (182.3 | ) | ||||||||||||
|
Interest
expense, net
|
(6.9 | ) | (5.9 | ) | (6.1 | ) | (14.0 | ) | (12.3 | ) | (12.6 | ) | ||||||||||||
|
Earnings
from equity method investments
|
3.7 | 7.1 | 13.4 | 2.6 | 17.8 | 30.6 | ||||||||||||||||||
|
Income
tax expense
|
— | (0.3 | ) | — | (0.1 | ) | (0.6 | ) | — | |||||||||||||||
|
Net
income attributable to noncontrolling interests
|
(2.1 | ) | (13.3 | ) | (0.9 | ) | (0.8 | ) | (27.0 | ) | (1.5 | ) | ||||||||||||
|
Net
loss attributable to partners
|
$ | (42.1 | ) | $ | (153.1 | ) | $ | (159.3 | ) | $ | (21.0 | ) | $ | (153.0 | ) | $ | (165.8 | ) | ||||||
|
Net
(income) loss attributable to predecessor operations
|
— | (6.2 | ) | — | 1.0 | (12.8 | ) | — | ||||||||||||||||
|
General
partner interest in net income or net loss
|
(2.7 | ) | (0.7 | ) | (0.7 | ) | (5.9 | ) | (3.4 | ) | (3.4 | ) | ||||||||||||
|
Net
loss allocable to limited partners
|
$ | (44.8 | ) | $ | (160.0 | ) | $ | (160.0 | ) | $ | (25.9 | ) | $ | (169.2 | ) | $ | (169.2 | ) | ||||||
|
Net
loss per limited partner unit—basic and diluted
|
$ | (1.41 | ) | $ | (5.67 | ) | $ | (5.67 | ) | $ | (0.86 | ) | $ | (6.36 | ) | $ | (6.36 | ) | ||||||
|
Weighted-average
limited partner units outstanding—basic and diluted
|
31.7 | 28.2 | 28.2 | 30.0 | 26.6 | 26.6 | ||||||||||||||||||
|
June
30,
2009
|
December
31,
2008
|
|||||||
|
(Millions)
|
||||||||
|
Cash
and cash equivalents
|
$ | 4.6 | $ | 61.9 | ||||
|
Other
current assets
|
117.3 | 153.5 | ||||||
|
Restricted
investments (a)
|
35.1 | 60.2 | ||||||
|
Property,
plant and equipment, net
|
973.9 | 882.7 | ||||||
|
Other
long-term assets
|
260.5 | 261.4 | ||||||
|
Total assets
|
$ | 1,391.4 | $ | 1,419.7 | ||||
|
Current
liabilities
|
$ | 130.5 | $ | 163.2 | ||||
|
Long-term
debt (a)
|
638.0 | 656.5 | ||||||
|
Other
long-term liabilities
|
57.4 | 37.2 | ||||||
|
Partners’
equity
|
351.6 | 395.1 | ||||||
|
Noncontrolling
interests
|
213.9 | 167.7 | ||||||
|
Total liabilities and
equity
|
$ | 1,391.4 | $ | 1,419.7 | ||||
| (a) Long-term debt includes $35 million and $60 million outstanding on the term loan portion of our credit facility as of June 30, 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
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||||||||||
|
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 attributable to partners
|
$ | (42.1 | ) | $ | (153.1 | ) | $ | (159.3 | ) | $ | (21.0 | ) | $ | (153.0 | ) | $ | (165.8 | ) | ||||||
|
Interest
expense, net
|
6.9 | 5.9 | 6.1 | 14.0 | 12.3 | 12.6 | ||||||||||||||||||
|
Depreciation,
amortization and income tax expense, net of noncontrolling
interest
|
13.5 | 10.8 | 8.7 | 25.8 | 21.4 | 17.0 | ||||||||||||||||||
|
Non-cash
commodity derivative mark-to-market
|
54.1 | 170.4 | 170.4 | 53.8 | 198.7 | 198.7 | ||||||||||||||||||
|
Adjusted
EBITDA
|
32.4 | 34.0 | 25.9 | 72.6 | 79.4 | 62.5 | ||||||||||||||||||
|
Interest
expense, net
|
(6.9 | ) | (5.9 | ) | (6.1 | ) | (14.0 | ) | (12.3 | ) | (12.6 | ) | ||||||||||||
|
Depreciation,
amortization and income tax expense, net of noncontrolling
interest
|
(13.5 | ) | (10.8 | ) | (8.7 | ) | (25.8 | ) | (21.4 | ) | (17.0 | ) | ||||||||||||
|
Other
|
0.1 | (0.1 | ) | (0.1 | ) | 0.2 | 0.2 | 0.2 | ||||||||||||||||
|
Adjusted
net income attributable to partners
|
12.1 | 17.2 | 11.0 | 33.0 | 45.9 | 33.1 | ||||||||||||||||||
|
Maintenance
capital expenditures, net of reimbursable projects
|
(1.5 | ) | (2.2 | ) | (1.4 | ) | (8.9 | ) | (3.0 | ) | (1.9 | ) | ||||||||||||
|
Distributions
from equity method investments, net of losses and earnings,
respectively
|
(1.2 | ) | 3.3 | 4.9 | 0.4 | 4.0 | 6.9 | |||||||||||||||||
|
Depreciation
and amortization, net of noncontrolling interest
|
13.5 | 10.7 | 8.7 | 25.8 | 21.1 | 17.0 | ||||||||||||||||||
|
Proceeds
from divestiture of assets
|
0.3 | — | — | 0.3 | — | — | ||||||||||||||||||
|
Distributable
cash flow
|
$ | 23.2 | $ | 29.0 | $ | 23.2 | $ | 50.6 | $ | 68.0 | $ | 55.1 | ||||||||||||
|
Adjusted
net income attributable to partners
|
$ | 12.1 | $ | 17.2 | $ | 11.0 | $ | 33.0 | $ | 45.9 | $ | 33.1 | ||||||||||||
|
Net
(income) loss attributable to predecessor operations
|
— | (6.2 | ) | — | 1.0 | (12.8 | ) | — | ||||||||||||||||
|
General
partner interest in net income
|
(3.4 | ) | (3.0 | ) | (3.0 | ) | (6.6 | ) | (6.0 | ) | (6.0 | ) | ||||||||||||
|
Adjusted
net income allocable to limited partners
|
$ | 8.7 | $ | 8.0 | $ | 8.0 | $ | 27.4 | $ | 27.1 | $ | 27.1 | ||||||||||||
|
Adjusted
net income per unit
|
$ | 0.31 | $ | 0.28 | $ | 0.28 | $ | 0.86 | $ | 1.02 | $ | 1.02 | ||||||||||||
|
Net
cash provided by operating activities
|
$ | 20.8 | $ | 11.5 | $ | (12.4 | ) | $ | 51.3 | $ | 70.8 | $ | 12.7 | |||||||||||
|
Interest
expense, net
|
6.9 | 5.9 | 6.1 | 14.0 | 12.3 | 12.6 | ||||||||||||||||||
|
Distributions
from equity method investments, net of losses and earnings,
respectively
|
1.2 | (3.3 | ) | (4.9 | ) | (0.4 | ) | (4.0 | ) | (6.9 | ) | |||||||||||||
|
Net
changes in operating assets and liabilities
|
(46.4 | ) | (135.4 | ) | (132.4 | ) | (40.4 | ) | (168.1 | ) | (153.4 | ) | ||||||||||||
|
Net
income attributable to noncontrolling interests, net of depreciation and
income tax
|
(4.9 | ) | (15.8 | ) | (1.2 | ) | (6.0 | ) | (31.9 | ) | (2.0 | ) | ||||||||||||
|
Non-cash
commodity derivative mark-to-market
|
54.1 | 170.4 | 170.4 | 53.8 | 198.7 | 198.7 | ||||||||||||||||||
|
Other,
net
|
0.7 | 0.7 | 0.3 | 0.3 | 1.6 | 0.8 | ||||||||||||||||||
|
Adjusted
EBITDA
|
32.4 | 34.0 | 25.9 | 72.6 | 79.4 | 62.5 | ||||||||||||||||||
|
Interest
expense, net
|
(6.9 | ) | (5.9 | ) | (6.1 | ) | (14.0 | ) | (12.3 | ) | (12.6 | ) | ||||||||||||
|
Maintenance
capital expenditures, net of reimbursable projects
|
(1.5 | ) | (2.2 | ) | (1.4 | ) | (8.9 | ) | (3.0 | ) | (1.9 | ) | ||||||||||||
|
Distributions
from equity method investments, net of losses and earnings,
respectively
|
(1.2 | ) | 3.3 | 4.9 | 0.4 | 4.0 | 6.9 | |||||||||||||||||
|
Other
|
0.4 | (0.2 | ) | (0.1 | ) | 0.5 | (0.1 | ) | 0.2 | |||||||||||||||
|
Distributable
cash flow
|
$ | 23.2 | $ | 29.0 | $ | 23.2 | $ | 50.6 | $ | 68.0 | $ | 55.1 | ||||||||||||
- 13 - -
DCP
MIDSTREAM PARTNERS, LP
SEGMENT
FINANCIAL RESULTS AND OPERATING DATA
AND
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||||||||||
|
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 attributable to partners
|
$ | (32.1 | ) | $ | (141.6 | ) | $ | (150.4 | ) | $ | (19.0 | ) | $ | (134.5 | ) | $ | (152.2 | ) | ||||||
|
Non-cash
commodity derivative mark-to-market
|
54.0 | 170.2 | 170.2 | 53.9 | 201.2 | 201.2 | ||||||||||||||||||
|
Depreciation
and amortization expense
|
15.4 | 12.4 | 8.4 | 29.3 | 24.4 | 16.2 | ||||||||||||||||||
|
Noncontrolling
interest on depreciation and income tax
|
(2.8 | ) | (2.5 | ) | (0.3 | ) | (5.2 | ) | (4.9 | ) | (0.5 | ) | ||||||||||||
|
Adjusted
segment EBITDA
|
$ | 34.5 | $ | 38.5 | $ | 27.9 | $ | 59.0 | $ | 86.2 | $ | 64.7 | ||||||||||||
|
Operating
and financial data:
|
||||||||||||||||||||||||
|
Natural
gas throughput (MMcf/d)
|
1,108 | 980 | 835 | 1,051 | 980 | 831 | ||||||||||||||||||
|
NGL
gross production (Bbls/d)
|
28,584 | 30,659 | 23,769 | 25,208 | 31,702 | 24,480 | ||||||||||||||||||
|
Operating
and maintenance expense
|
$ | 14.5 | $ | 16.4 | $ | 8.1 | $ | 27.7 | $ | 31.5 | $ | 15.8 | ||||||||||||
|
Wholesale
Propane Logistics Segment:
|
||||||||||||||||||||||||
|
Financial
results:
|
||||||||||||||||||||||||
|
Segment
net income attributable to partners
|
$ | 3.0 | $ | 0.9 | $ | 0.9 | $ | 25.8 | $ | 6.5 | $ | 6.5 | ||||||||||||
|
Non-cash
commodity derivative mark-to-market
|
0.1 | 0.2 | 0.2 | (0.1 | ) | (2.5 | ) | (2.5 | ) | |||||||||||||||
|
Depreciation
and amortization expense
|
0.4 | 0.3 | 0.3 | 0.7 | 0.6 | 0.6 | ||||||||||||||||||
|
Adjusted
segment EBITDA
|
$ | 3.5 | $ | 1.4 | $ | 1.4 | $ | 26.4 | $ | 4.6 | $ | 4.6 | ||||||||||||
|
Operating
and financial data:
|
||||||||||||||||||||||||
|
Propane
sales volume (Bbls/d)
|
13,912 | 14,442 | 14,442 | 25,502 | 24,178 | 24,178 | ||||||||||||||||||
|
Operating
and maintenance expense
|
$ | 2.4 | $ | 2.7 | $ | 2.7 | $ | 5.1 | $ | 5.4 | $ | 5.4 | ||||||||||||
|
NGL
Logistics Segment:
|
||||||||||||||||||||||||
|
Financial
results:
|
||||||||||||||||||||||||
|
Segment
net income attributable to partners
|
$ | 1.1 | $ | 1.6 | $ | 1.6 | $ | 2.1 | $ | 3.3 | $ | 3.3 | ||||||||||||
|
Depreciation
and amortization expense
|
0.4 | 0.3 | 0.3 | 0.8 | 0.7 | 0.7 | ||||||||||||||||||
|
Adjusted
segment EBITDA
|
$ | 1.5 | $ | 1.9 | $ | 1.9 | $ | 2.9 | $ | 4.0 | $ | 4.0 | ||||||||||||
|
Operating
and financial data:
|
||||||||||||||||||||||||
|
NGL
pipelines throughput (Bbls/d)
|
26,850 | 34,286 | 34,286 | 25,409 | 33,081 | 33,081 | ||||||||||||||||||
|
Operating
and maintenance expense
|
$ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.5 | $ | 0.4 | $ | 0.4 | ||||||||||||
###