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): November 6,
2008
DCP
MIDSTREAM PARTNERS, LP
(Exact
name of registrant as specified in its charter)
|
DELAWARE
|
001-32678
|
03-0567133
|
|
(State
or other jurisdiction of
|
(Commission
File Number)
|
(IRS
Employer
|
|
incorporation)
|
Identification
No.)
|
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.)
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:
£ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
£ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
£ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
£ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02 Results of Operations and Financial Condition.
On
November 6, 2008, DCP Midstream Partners, LP announced its financial results
for
the third quarter of 2008 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.
In
accordance with General Instruction B.2 of Form 8-K, the press release and
the
information in this Item 2.02 shall not be deemed “filed” for the purpose of
Section 18 of the Exchange Act of 1934, as amended, or otherwise subject to
the
liabilities of that section, nor shall such information and Exhibit be deemed
incorporated by reference into any filing under the Securities Act of 1933
or
Exchange Act of 1934, each as amended, except as shall be expressly set forth
by
specific reference in such filing.
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit
Number
|
Description
|
|
Exhibit
99.1
|
Press
Release dated November 6, 2008
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
DCP
MIDSTREAM PARTNERS, LP
By: DCP
MIDSTREAM GP, LP
its
General Partner
By: DCP
MIDSTREAM GP, LLC
its
General Partner
By: /s/
Michael S. Richards
Name:
Michael
S. Richards
Title:
Vice
President, General Counsel and Secretary
November
6, 2008
EXHIBIT
INDEX
|
Exhibit
Number
|
Description
|
|
Exhibit
99.1
|
Press
Release dated November 6, 2008
|
|
November
6, 2008
|
MEDIA
AND
INVESTOR
RELATIONS
CONTACT:
|
Karen
L. Taylor
|
|
Phone:
|
303/633-2913
|
|
|
24-Hour:
|
303/809-9160
|
DCP
MIDSTREAM PARTNERS REPORTS
THIRD
QUARTER 2008 RESULTS
DENVER
-
DCP Midstream Partners, LP (NYSE: DPM), or the Partnership, today reported
financial results for the three and nine months ended September 30, 2008.
THIRD
QUARTER AND YEAR-TO-DATE HIGHLIGHTS
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
|
2008
|
2007
|
2008
|
2007
|
||||||||||
|
(unaudited)
(Millions,
except per unit amounts)
|
|||||||||||||
|
Net
income (loss)
|
$
|
152.7
|
$
|
7.5
|
$
|
(13.1
|
)
|
$
|
24.1
|
||||
|
Net
income (loss) per unit
|
$
|
2.97
|
$
|
0.29
|
$
|
(0.75
|
)
|
$
|
0.89
|
||||
|
Adjusted
EBITDA
|
$
|
13.8
|
$
|
27.2
|
$
|
77.0
|
$
|
72.6
|
|||||
|
Adjusted
net (loss) income
|
$
|
(1.6
|
)
|
$
|
12.4
|
$
|
31.5
|
$
|
44.0
|
||||
|
Adjusted
net (loss) income per unit
|
$
|
(0.16
|
)
|
$
|
0.51
|
$
|
0.87
|
$
|
1.75
|
||||
Adjusted
EBITDA decreased $13.4 million for the three months ended September 30, 2008,
and increased $4.4 million for the nine months ended September 30, 2008, as
compared to the same periods in 2007. The third quarter decrease is primarily
due to the impacts from hurricanes Gustav and Ike, a non-cash write down of
inventory for our wholesale propane business, and lower natural gas liquid
(NGL)
recoveries at our East Texas complex. The increase for the nine months ended
September 30, 2008 is primarily due to increased earnings from our investments
in the East Texas joint venture and Discovery system and earnings from our
Lindsay and Momentum acquisitions closed in 2007, partially offset by the impact
from the hurricanes.
Adjusted
EBITDA, adjusted net income or loss and adjusted net income or loss per unit,
which are non-generally accepted accounting principles (“non-GAAP”) financial
measures, eliminate the impact of non-cash mark-to-market gains and losses
which
arise from valuing certain of the Partnership’s derivative transactions. Each
are explained in greater detail under “Non-GAAP Financial Information” below and
are reconciled to their most comparable GAAP financial measures, in
“Reconciliation of Non-GAAP Measures” below.
-
more
-
- 2
-
CEO
PERSPECTIVE
“As
we
navigate these unprecedented times in the financial markets, we continue to
concentrate on the fundamentals and delivering value to our unitholders,” said
Mark Borer, president and CEO of the Partnership. “We are focused on optimizing
our business and will remain disciplined with investment decisions in this
capital and liquidity constrained environment. We were pleased to close the
previously announced $145 million purchase of gas gathering, treating, and
transportation assets in Michigan on October 1. These assets are an attractive
addition to our portfolio, providing steady, long-term fee-based earnings.
We
are continuing to execute our two previously announced organic growth projects
to expand our gathering systems in the Piceance Basin of Colorado and East
Texas. Both are moving ahead on target and are supported by active drilling
programs. Importantly, we have availability under our credit facility to fund
these organic growth projects.”
“We
previously announced some challenges this quarter with the hurricanes causing
supply disruptions at a number of our assets and damage to our Discovery
system’s offshore pipeline, as well as continued work to improve the integrity
and reliability of our Douglas system,” continued Borer. “We anticipate volumes
and earnings from these assets to return to near normal levels during the first
quarter of 2009.”
HURRICANE
IMPACT
Hurricanes
Gustav and Ike made landfall on the Texas Gulf Coast in late August and
mid-September of 2008. As a result, many of our facilities were fully or
partially curtailed due to operational disruptions at downstream NGL facilities
or loss of electric power service. All of our hurricane-impacted assets were
returned to service in September with the exception of our Discovery offshore
gathering system. We estimate the total impact to our adjusted EBITDA in the
third quarter from the hurricanes to be between $5 million and $6 million.
As
previously announced, we estimate the decrease to our adjusted EBITDA in the
fourth quarter relating to downtime during Discovery repairs to be between
$7
million and $12 million.
- 3
-
DISTRIBUTION
On
October 23, 2008, the Partnership announced a quarterly distribution of $0.60
per limited partner unit. Distributable cash flow was $12.2 million for the
three months ended September 30, 2008, providing 0.61 times the amount required
to cover our current distribution to both the general and limited partners.
For
the nine months ended September 30, 2008, our distributable cash flow of $67.4
million provided 1.13 times the amount required to cover our total distribution.
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.
Distributable
cash flow, which is a non-GAAP financial measure, is explained in greater detail
under “Non-GAAP Financial Information” below and is reconciled from net income
or loss and from net cash provided by or used in operating activities, its
most
comparable GAAP financial measures, in “Reconciliation of Non-GAAP Measures”
below.
OPERATING
RESULTS BY BUSINESS SEGMENT
Natural
Gas Services —
Adjusted segment gross margin decreased $5.1 million to $20.8 million for the
three months ended September 30, 2008, from $25.9 million for the same period
in
2007. Increases to margin from growth, primarily at our Collbran asset, and
increased commodity prices were offset by decreased volumes due to the
hurricanes. The increased commodity prices drove higher sales margins but also
resulted in larger hedge settlements compared to the third quarter of 2007.
The
hedge settlements for East Texas and Discovery decreased segment gross margin
although the earnings attributable to these assets are recorded to equity
earnings. Adjusted segment gross margin increased $7.6 million to $73.3 million
for the nine months ended September 30, 2008, from $65.7 million for the same
period in 2007. The increase in margin for the nine months ended September
30,
2008 is primarily due to increased volumes from acquisitions and increased
commodity prices, partially offset by decreased volumes due to the
hurricanes.
-
more -
- 4
-
Equity
earnings representing our 25 percent interest in East Texas and 40 percent
interest in Discovery decreased by $2.5 million to $7.8 million for the three
months ended September 30, 2008, as compared to the same period in 2007.
Discovery’s volumes decreased and operating expenses increased as a result of
the hurricanes. East Texas volumes decreased as a result of the hurricanes
as
well as from downtime for planned maintenance and repairs. The planned
maintenance and repairs increased operating expenses for the quarter but
resulted in increased NGL recovery capabilities.
Equity
earnings increased by $15.2 million to $37.8 million for the nine months ended
September 30, 2008, as compared to the same period in 2007. Increased earnings
were the result of increased volumes and margins at both East Texas and
Discovery for the first six months of the year.
Wholesale
Propane Logistics—
Adjusted segment gross margin decreased by $2.2 million to $0.7 million for
the
three months ended September 30, 2008. Adjusted segment gross margin decreased
by $8.8 million to $9.2 million for the nine months ended September 30, 2008.
In
the third quarter of 2008 we recorded a non-cash accounting adjustment reducing
margin by approximately $3.0 million to reflect inventory carrying costs at
the
lower of cost or market price. Absent this adjustment, our unit margins
increased for the quarter and decreased for the nine months ended September
30,
2008, as compared to the prior year. Higher propane sales prices have dampened
demand throughout 2008.
-
more -
- 5
-
NGL
Logistics—
Segment
gross margin increased $0.2 million and $1.7 million for the three and nine
months ended September 30, 2008, respectively, as compared to the same periods
in 2007, primarily due to increased throughput volumes.
Segment
gross margin and adjusted segment gross margin, which are non-GAAP financial
measures, are explained in greater detail under “Non-GAAP Financial Information”
below and are reconciled from segment net (loss) income, their most comparable
GAAP financial measure, in “Reconciliation of Non-GAAP Measures”
below.
CORPORATE
AND OTHER
General
and administrative expense increased by $0.6 million to $6.0 million for the
three months ended September 30, 2008, as compared to the same period in 2007.
This increase was primarily due to higher fees paid to DCP Midstream under
an
omnibus agreement as a result of the 2007 acquisition of certain Momentum Energy
Group subsidiaries. General and administrative expense decreased by $0.3 million
to $16.8 million for the nine months ended September 30, 2008 as compared to
the
same period in 2007, primarily due to decreased acquisition related costs and
benefits expense.
Depreciation
and amortization expense and net interest expense increased for the nine months
ended September 30, 2008, as compared to the same period in 2007, primarily
as a
result of acquisitions closed in 2007.
-
more -
- 6
-
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.
Due
primarily to a large decrease in crude oil prices in the third quarter of 2008,
we recorded a non-cash gain associated with our commodity derivative instruments
of $154.3 million, as compared to a non-cash loss of $4.9 million for the third
quarter of 2007. While our earnings will continue to fluctuate as a result
of
the volatility in the commodity markets, our derivative contracts help to
stabilize distributable cash flows.
CAPITALIZATION
At
September 30, 2008, we had $435 million outstanding under our revolving credit
facility and $220 million of fully-secured term loans under our credit
agreement. Our liquidity is comprised of cash on-hand, available capacity
under our revolver and the collateral securing our term loan that may be used
to
fund organic capital expenditures or acquisitions. The Partnership funded
the $145 million purchase of gas gathering, treating, and transportation assets
in Michigan on October 1, 2008, with restricted investments by repaying a
portion of the term loan facility with borrowings under the revolving credit
facility. Following the funding of the Michigan transaction, the Partnership’s
available liquidity was approximately $240 million, excluding cash on hand.
We
mitigate a 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, 2008, we had $425 million
of
our debt converted to fixed rates and our weighted average cost of debt under
our revolving credit facility was 5.19 percent.
- 7
-
EARNINGS
CALL
DCP
Midstream Partners will hold a conference call to discuss second quarter results
on Friday, November 7, 2008, at 11 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 November 17, 2008, by dialing
877-344-7529, in the United States or 412-317-0088 outside the United States.
The passcode is 423801. 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 non-GAAP
financial measures of distributable cash flow, EBITDA, adjusted EBITDA, adjusted
net income or loss, adjusted net income or loss per unit, gross margin, segment
gross margin and adjusted segment gross margin. The accompanying schedules
provide reconciliations of these non-GAAP financial measures to their most
directly comparable financial measures calculated and presented in accordance
with accounting principles generally accepted in the United States of America
(“GAAP”). Our non-GAAP financial measures should not be considered an
alternative to, or more meaningful than, net income or loss, operating income,
cash flows from operating activities or any other measure of liquidity or
financial performance presented in accordance with GAAP as measures of operating
performance, liquidity or ability to service debt obligations and make cash
distributions to unitholders. Our distributable cash flow, EBITDA, adjusted
EBITDA, adjusted net income or loss, adjusted net income or loss per unit,
gross
margin, segment gross margin and adjusted segment gross margin may not be
comparable to a similarly titled measure of another company because other
entities may not calculate these measures in the same manner.
-
more -
- 8
-
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, non-controlling 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 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
EBITDA (earnings before interest, taxes, depreciation and amortization) as
net
income or loss less interest income, plus interest expense, income tax expense
and depreciation and amortization expense. We define adjusted EBITDA as EBITDA
plus non-cash derivative losses, less non-cash derivative gains. These 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.
EBITDA
and adjusted EBITDA are used as supplemental liquidity measures by our
management and 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 capital expenditures.
-
more -
- 9
-
EBITDA
and adjusted EBITDA are also used as supplemental performance measures by our
management and by external users of our financial statements, such as investors,
commercial banks, research analysts and others, to assess:
|
·
|
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 or loss as net income or loss, plus non-cash derivative
losses, less non-cash derivative gains. 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 or loss is 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.
We
define
gross margin as total operating revenues less purchases of natural gas, propane
and NGLs, and we define segment gross margin for each segment as total operating
revenues for that segment less commodity purchases for that segment. Our gross
margin equals the sum of our segment gross margins. We define adjusted segment
gross margin as segment gross margin plus non-cash derivative losses, less
non-cash derivative gains for that segment. Gross margin, segment gross margin
and adjusted segment gross margin are primary performance measures used by
management, as these measures represent the results of product sales and
purchases, a key component of our operations.
-
more -
- 10
-
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.
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
level and success of natural gas drilling 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 or organic growth projects,
and the
successful integration and future performance of such
assets;
|
|
·
|
our
ability to access the debt and equity
markets;
|
|
·
|
fluctuations
in oil, natural gas, propane and other NGL prices;
|
-
more -
- 11
-
|
·
|
our
ability to purchase propane from our principal suppliers for our
wholesale
propane logistics business;
and
|
|
·
|
the
credit worthiness of counterparties to 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.
-
more -
- 12
-
FINANCIAL
RESULTS AND
SUMMARY
BALANCE SHEET DATA
(Unaudited)
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
|
2008
|
2007
|
2008
|
2007
|
||||||||||
|
(Millions,
except per unit amounts)
|
|||||||||||||
|
Sales
of natural gas, propane, NGLs and condensate
|
$
|
271.2
|
$
|
185.8
|
$
|
952.4
|
$
|
604.3
|
|||||
|
Transportation,
processing and other
|
13.6
|
8.9
|
39.7
|
23.7
|
|||||||||
|
Gains
(losses) from commodity derivative activity, net
|
142.0
|
(6.1
|
)
|
(81.7
|
)
|
(21.1
|
)
|
||||||
|
Total
operating revenues
|
426.8
|
188.6
|
910.4
|
606.9
|
|||||||||
|
Purchases
of natural gas, propane and NGLs
|
249.4
|
163.3
|
866.9
|
539.4
|
|||||||||
|
Gross
margin
|
177.4
|
25.3
|
43.5
|
67.5
|
|||||||||
|
Operating
and maintenance expense
|
(10.2
|
)
|
(8.1
|
)
|
(31.8
|
)
|
(21.0
|
)
|
|||||
|
General
and administrative expense
|
(6.0
|
)
|
(5.4
|
)
|
(16.8
|
)
|
(17.1
|
)
|
|||||
|
Other
|
-—
|
—
|
1.5
|
—
|
|||||||||
|
Earnings
from equity method investments
|
8.1
|
10.8
|
38.7
|
23.6
|
|||||||||
|
Non-controlling
interest in income
|
(1.2
|
)
|
(0.3
|
)
|
(2.7
|
)
|
(0.3
|
)
|
|||||
|
EBITDA
|
168.1
|
22.3
|
32.4
|
52.7
|
|||||||||
|
Depreciation
and amortization expense
|
(8.8
|
)
|
(7.9
|
)
|
(26.3
|
)
|
(15.8
|
)
|
|||||
|
Interest
income
|
1.7
|
1.2
|
5.1
|
3.7
|
|||||||||
|
Interest
expense
|
(8.3
|
)
|
(8.1
|
)
|
(24.3
|
)
|
(16.5
|
)
|
|||||
|
Net
income (loss)
|
$
|
152.7
|
$
|
7.5
|
$
|
(13.1
|
)
|
$
|
24.1
|
||||
|
Less:
|
|||||||||||||
|
Net
income attributable to predecessor operations
|
—
|
—
|
—
|
(3.6
|
)
|
||||||||
|
General
partner interest in net income or net loss
|
(4.9
|
)
|
(0.9
|
)
|
(7.1
|
)
|
(1.5
|
)
|
|||||
|
Net
income (loss) allocable to limited partners
|
$
|
147.8
|
$
|
6.6
|
$
|
(20.2
|
)
|
$
|
19.0
|
||||
|
Net
income (loss) per limited partner unit—basic and diluted
|
$
|
2.97
|
$
|
0.29
|
$
|
(0.75
|
)
|
$
|
0.89
|
||||
|
Weighted-average
limited partner units outstanding—basic and diluted
|
28.2
|
22.3
|
27.1
|
19.3
|
|||||||||
|
September
30,
2008
|
December
31,
2007
|
||||||
|
(Millions)
|
|||||||
|
Cash
and cash equivalents
|
$
|
23.5
|
$
|
24.5
|
|||
|
Other
current assets
|
126.0
|
194.0
|
|||||
|
Restricted
investments
|
221.1
|
100.5
|
|||||
|
Property,
plant and equipment, net
|
496.9
|
500.7
|
|||||
|
Other
assets
|
294.8
|
301.0
|
|||||
|
Total
assets
|
$
|
1,162.3
|
$
|
1,120.7
|
|||
|
Current
liabilities
|
$
|
126.8
|
$
|
219.6
|
|||
|
Long-term
debt
|
655.0
|
630.0
|
|||||
|
Other
liabilities
|
118.0
|
75.8
|
|||||
|
Non-controlling
interests
|
29.1
|
26.9
|
|||||
|
Total
partners’ equity
|
233.4
|
168.4
|
|||||
|
Total
liabilities and partners’ equity
|
$
|
1,162.3
|
$
|
1,120.7
|
|||
-
more -
- 13
-
DCP
MIDSTREAM PARTNERS, LP
RECONCILIATION
OF NON-GAAP MEASURES
(Unaudited)
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
|
2008
|
2007
|
2008
|
2007
|
||||||||||
|
(Millions,
except per unit amounts)
|
|||||||||||||
|
Reconciliation
of Non-GAAP Measures:
|
|||||||||||||
|
Net
income (loss)
|
$
|
152.7
|
$
|
7.5
|
$
|
(13.1
|
)
|
$
|
24.1
|
||||
|
Interest
income
|
(1.7
|
)
|
(1.2
|
)
|
(5.1
|
)
|
(3.7
|
)
|
|||||
|
Interest
expense
|
8.3
|
8.1
|
24.3
|
16.5
|
|||||||||
|
Depreciation
and amortization expense
|
8.8
|
7.9
|
26.3
|
15.8
|
|||||||||
|
EBITDA
|
168.1
|
22.3
|
32.4
|
52.7
|
|||||||||
|
Non-cash
derivative mark-to-market
|
(154.3
|
)
|
4.9
|
44.6
|
19.9
|
||||||||
|
Adjusted
EBITDA
|
13.8
|
27.2
|
77.0
|
72.6
|
|||||||||
|
Interest
income
|
1.7
|
1.2
|
5.1
|
3.7
|
|||||||||
|
Interest
expense
|
(8.3
|
)
|
(8.1
|
)
|
(24.3
|
)
|
(16.5
|
)
|
|||||
|
Depreciation
and amortization expense
|
(8.8
|
)
|
(7.9
|
)
|
(26.3
|
)
|
(15.8
|
)
|
|||||
|
Adjusted
net (loss) income
|
(1.6
|
)
|
12.4
|
31.5
|
44.0
|
||||||||
|
Maintenance
capital expenditures, net of reimbursable projects
|
(1.6
|
)
|
(0.8
|
)
|
(3.5
|
)
|
(1.7
|
)
|
|||||
|
Earnings
from equity method investments, net of distributions
|
4.3
|
(2.2
|
)
|
11.2
|
3.5
|
||||||||
|
Depreciation
and amortization expense
|
8.8
|
7.9
|
26.3
|
15.8
|
|||||||||
|
Proceeds
from divestiture of assets
|
2.5
|
—
|
2.5
|
—
|
|||||||||
|
Non-controlling
interest on depreciation
|
(0.2
|
)
|
—
|
(0.6
|
)
|
—
|
|||||||
|
Distributable
cash flow
|
$
|
12.2
|
$
|
17.3
|
$
|
67.4
|
$
|
61.6
|
|||||
|
Adjusted
net (loss) income
|
$
|
(1.6
|
)
|
$
|
12.4
|
$
|
31.5
|
$
|
44.0
|
||||
|
Less:
|
|||||||||||||
|
Net
income attributable to predecessor operations
|
—
|
—
|
—
|
(3.6
|
)
|
||||||||
|
General
partner interest in net income or net loss
|
(2.9
|
)
|
(0.9
|
)
|
(7.8
|
)
|
(1.8
|
)
|
|||||
|
Adjusted
net (loss) income allocable to limited partners
|
$
|
(4.5
|
)
|
$
|
11.5
|
$
|
23.7
|
$
|
38.6
|
||||
|
Adjusted
net (loss) income per unit
|
$
|
(0.16
|
)
|
$
|
0.51
|
$
|
0.87
|
$
|
1.75
|
||||
|
Net
cash provided by operating activities
|
$
|
42.0
|
$
|
26.3
|
$
|
54.7
|
$
|
66.1
|
|||||
|
Interest
income
|
(1.7
|
)
|
(1.2
|
)
|
(5.1
|
)
|
(3.7
|
)
|
|||||
|
Interest
expense
|
8.3
|
8.1
|
24.3
|
16.5
|
|||||||||
|
Earnings
from equity method investments, net of distributions
|
(4.3
|
)
|
2.2
|
(11.2
|
)
|
(3.5
|
)
|
||||||
|
Net
changes in operating assets and liabilities
|
125.2
|
(13.1
|
)
|
(28.2
|
)
|
(23.1
|
)
|
||||||
|
Other,
net
|
(1.4
|
)
|
—
|
(2.1
|
)
|
0.4
|
|||||||
|
EBITDA
|
168.1
|
22.3
|
32.4
|
52.7
|
|||||||||
|
Non-cash
derivative mark-to-market
|
(154.3
|
)
|
4.9
|
44.6
|
19.9
|
||||||||
|
Adjusted
EBITDA
|
13.8
|
27.2
|
77.0
|
72.6
|
|||||||||
|
Interest
income
|
1.7
|
1.2
|
5.1
|
3.7
|
|||||||||
|
Interest
expense
|
(8.3
|
)
|
(8.1
|
)
|
(24.3
|
)
|
(16.5
|
)
|
|||||
|
Maintenance
capital expenditures, net of reimbursable projects
|
(1.6
|
)
|
(0.8
|
)
|
(3.5
|
)
|
(1.7
|
)
|
|||||
|
Earnings
from equity method investments, net of distributions
|
4.3
|
(2.2
|
)
|
11.2
|
3.5
|
||||||||
|
Proceeds
from divestiture of assets
|
2.5
|
—
|
2.5
|
—
|
|||||||||
|
Non-controlling
interest on depreciation
|
(0.2
|
)
|
—
|
(0.6
|
)
|
—
|
|||||||
|
Distributable
cash flow
|
$
|
12.2
|
$
|
17.3
|
$
|
67.4
|
$
|
61.6
|
|||||
-
more -
- 14
-
DCP
MIDSTREAM PARTNERS, LP
SEGMENT
FINANCIAL RESULTS AND OPERATING DATA
AND
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
|
2008
|
2007
|
2008
|
2007
|
||||||||||
|
(Millions,
except as indicated)
|
|||||||||||||
|
Natural
Gas Services Segment:
|
|||||||||||||
|
Financial
results:
|
|||||||||||||
|
Segment
net income
|
$
|
165.5
|
$
|
19.2
|
$
|
13.3
|
$
|
42.9
|
|||||
|
Operating
and maintenance expense
|
7.9
|
5.4
|
23.7
|
12.6
|
|||||||||
|
Depreciation
and amortization expense
|
8.1
|
7.4
|
24.3
|
14.1
|
|||||||||
|
Earnings
from equity method investments
|
(7.8
|
)
|
(10.3
|
)
|
(37.8
|
)
|
(22.6
|
)
|
|||||
|
Non-controlling
interest in income
|
1.2
|
0.3
|
2.7
|
0.3
|
|||||||||
|
Segment
gross margin
|
174.9
|
22.0
|
26.2
|
47.3
|
|||||||||
|
Non-cash
derivative mark-to-market
|
(154.1
|
)
|
3.9
|
47.1
|
18.4
|
||||||||
|
Adjusted
segment gross margin
|
$
|
20.8
|
$
|
25.9
|
$
|
73.3
|
$
|
65.7
|
|||||
|
Operating
data:
|
|||||||||||||
|
Natural
gas throughput (MMcf/d)
|
704
|
770
|
797
|
735
|
|||||||||
|
NGL
gross production (Bbls/d)
|
18,783
|
22,570
|
22,241
|
21,083
|
|||||||||
|
Wholesale
Propane Logistics Segment:
|
|||||||||||||
|
Financial
results:
|
|||||||||||||
|
Segment
net (loss) income
|
$
|
(1.3
|
)
|
$
|
(0.9
|
)
|
$
|
5.2
|
$
|
8.0
|
|||
|
Operating
and maintenance expense
|
1.9
|
2.5
|
7.3
|
7.8
|
|||||||||
|
Depreciation
and amortization expense
|
0.3
|
0.3
|
0.9
|
0.7
|
|||||||||
|
Other
|
—
|
—
|
(1.5
|
)
|
—
|
||||||||
|
Segment
gross margin
|
0.9
|
1.9
|
11.9
|
16.5
|
|||||||||
|
Non-cash
derivative mark-to-market
|
(0.2
|
)
|
1.0
|
(2.7
|
)
|
1.5
|
|||||||
|
Adjusted
segment gross margin
|
$
|
0.7
|
$
|
2.9
|
$
|
9.2
|
$
|
18.0
|
|||||
|
Operating
data:
|
|||||||||||||
|
Propane
sales volume (Bbls/d)
|
11,445
|
13,014
|
19,934
|
21,539
|
|||||||||
|
NGL
Logistics Segment:
|
|||||||||||||
|
Financial
results:
|
|||||||||||||
|
Segment
net income
|
$
|
1.1
|
$
|
1.5
|
$
|
4.4
|
$
|
3.1
|
|||||
|
Operating
and maintenance expense
|
0.4
|
0.2
|
0.8
|
0.6
|
|||||||||
|
Depreciation
and amortization expense
|
0.4
|
0.2
|
1.1
|
1.0
|
|||||||||
|
Earnings
from equity method investments
|
(0.3
|
)
|
(0.5
|
)
|
(0.9
|
)
|
(1.0
|
)
|
|||||
|
Segment
gross margin
|
$
|
1.6
|
$
|
1.4
|
$
|
5.4
|
$
|
3.7
|
|||||
|
Operating
data:
|
|||||||||||||
|
NGL
pipelines throughput (Bbls/d)
|
31,881
|
30,837
|
32,681
|
28,890
|
|||||||||
###