Atlas Pipeline Partners, L.P. Reports Record Third Quarter 2005 Results and Declares Record Distribution of $0.81 Per Common Unit.PHILADELPHIA Philadelphia, ancient cities Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. -- Atlas Atlas, in Greek mythology Atlas (ăt`ləs), in Greek mythology, a Titan; son of Iapetus and Clymene and the brother of Prometheus. Pipeline Partners, L.P. (NYSE NYSE See: New York Stock Exchange :APL (A Programming Language) A high-level mathematical programming language noted for its brevity and matrix generation capabilities. Developed by Kenneth Iverson in the mid-1960s, it runs on micros to mainframes and is often used to develop mathematical models. ) (the "Partnership") today reported earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
a. 1. Of or pertaining to a chain of mountains in the United States, commonly called the Allegheny ltname> mountains. Noun 1. operations. The increase in quarterly net income was also attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to $3.0 million of costs incurred in the third quarter 2004 in connection with the Partnership's terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: attempt to acquire Alaska Alaska (əlă`skə), largest in area of the United States but third smallest (exceeding only Vermont and Wyoming) in population, occupying the northwest extremity of the North American continent, separated from the coterminous United States Pipeline Company and subsequent legal action. The Partnership settled the matter in the fourth quarter 2004 and received $5.5 million. Total revenues for the third quarter 2005 were a record $102.6 million compared with $34.9 million for the third quarter 2004. On October October: see month. 27, 2005, the Partnership declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a record quarterly cash distribution for the third quarter 2005 of $0.81 per limited partner unit, payable November November: see month. 14, 2005 to holders of record as of November 7, 2005. Distributions declared for the first nine months of 2005 of $2.33 per limited partner unit represent a 19% increase compared with distributions declared per limited partner unit for the first nine months of 2004. On October 19, 2005, the Partnership announced plans to construct a new 120 million cubic feet per day ("mmcfd") cryogenic cryogenic /cry·o·gen·ic/ (-jen´ik) producing low temperatures. cry·o·gen·ic adj. 1. Relating to or producing low temperatures. 2. gas processing plant in Beckham County, Oklahoma Beckham County is a county located in the U.S. state of Oklahoma. As of 2000, the population was 19,799. Its county seat is Sayre6. Beckham County was named for J. C. W. . The new facility, to be known as the Sweetwater Sweet´wa`ter n. 1. (Bot.) A variety of white grape, having a sweet watery juice; - also called white sweetwater ltname>, and white muscadine ltname>. gas plant (the "Sweetwater" plant), will be located west of the Partnership's Elk City gas plant, and is being built to further access natural gas production actively being developed in western Oklahoma Western Oklahoma can usually be defined as all territory west of Interstate 35, and west of Oklahoma City. It is usually broken up into two primary regions: Northwestern Oklahoma and Southwestern Oklahoma. and the Texas panhandle panhandle, in geography, a strip of land projecting from the main body of an area and shaped like the handle of a pan, such as the panhandles of West Virginia, Texas, and Alaska. . The Partnership expects the Sweetwater plant to be completed in the third quarter of 2006. On September September: see month. 21, 2005, the Partnership announced that it had entered into an agreement with a subsidiary of OGE OGE Office of Government Ethics OGE Oklahoma Gas and Electric OGE Out of Ground Effect OGE Operational Ground Equipment OGE Outdoor Gear Exchange OGE Österreichische Gesellschaft für Erdbebeningenieurwesen Und Baudynamik Energy Corp. to acquire a subsidiary which owns a 75% operating interest in NOARK Pipeline System, Limited Partnership ("NOARK"). NOARK's assets include a FERC-regulated interstate in·ter·state adj. Involving, existing between, or connecting two or more states. n. One of a system of highways extending between the major cities of the 48 contiguous United States. Noun 1. pipeline and an unregulated Adj. 1. unregulated - not regulated; not subject to rule or discipline; "unregulated off-shore fishing" regulated - controlled or governed according to rule or principle or law; "well regulated industries"; "houses with regulated temperature" 2. natural gas gathering system. Total consideration will be $163 million, subject to working capital adjustments. Consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the acquisition, expected to occur in the fourth quarter of 2005, is subject to customary closing conditions. "Third quarter 2005 represents significant success towards our strategic objectives," said Edward Edward killed his father at his mother’s instigation. [Br. Balladry: Edward in Benét, 302] See : Patricide E. Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. , Chairman and Chief Executive Officer of the Partnership's general partner. "First, we are very excited about our opportunity to acquire control of NOARK. This acquisition establishes our presence in the long-haul long haul n. 1. A long distance: It is a long haul from New York to Los Angeles. 2. A long period of time: Over the long haul the candidates performed well. pipeline business and expands our gathering operations while providing us with additional fixed-fee revenue streams. We anticipate our interest in NOARK will provide us with organic growth opportunities upon which we expect to capitalize To regard the cost of an improvement or other purchase as a capital asset for purposes of determining Income Tax liability. To calculate the net worth upon which an investment is based. To issue company stocks or bonds to finance an investment. . In addition to the NOARK transaction, our record quarterly EBITDA exhibited the strength of our Mid-Continent and Appalachia Appalachia, region: see Appalachian Mountains. Appalachia West Virginia coal mining region known for its abysmal poverty. [Am. Hist.: NCE, 160] See : Poverty operations. A full quarter's contribution from our Elk City system, which was acquired in April 2005, solid growth in our Appalachia business resulting from escalated drilling activity, and strong demand for the products we transport and produce allowed us to exceed our earnings expectations. These factors support the increase in our quarterly distribution to $0.81 per limited partner unit, representing a 17% rise over the third quarter 2004 and our sixth consecutive distribution increase. We believe this increase demonstrates the current and future expectations of our operations and embodies our objective to maximize return to our unitholders." Segment Analysis Mid-Continent The Mid-Continent segment, which was initiated upon the acquisition of the Velma system assets in July July: see month. 2004 and further expanded with the acquisition of the Elk City system assets in April 2005, recognized natural gas and liquids revenues of $96.2 million for the third quarter 2005, an increase of $66.2 million from the third quarter 2004. This increase reflects the contribution from the Elk City system acquisition, higher volumes from the Velma system, and an increase in commodity prices. Velma's gross natural gas gathered volume averaged 68.5 mmcfd for the third quarter 2005, an increase of 23% from the prior year's comparable quarter. For the third quarter 2005, the Velma system connected 15 new wells to its gas gathering system. Overall, 112 new wells were connected to the Velma system for the twelve months ended September 30, 2005. For the Elk City system, gross natural gas gathered volume averaged 240.8 mmcfd, and 17 new wells were connected to the system for the third quarter 2005, or 26 new wells since its date of acquisition. Appalachia Transmission and compression revenues for the Appalachia system increased to $6.3 million for the third quarter 2005, a 34% increase from $4.7 million for the third quarter 2004. For the third quarter 2005, Appalachia segment profit was $4.0 million, or 36% of total segment operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the period, compared with $3.3 million, or 50% of total segment operating profit, for the prior year third quarter. Average transportation rate per thousand cubic feet ("mcf") rose to $1.19 for the third quarter 2005 from $0.93 for the prior year third quarter due mainly to the rise in natural gas prices. Throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. volumes increased to 57.3 mmcfd for the third quarter 2005, an increase of 5.4% from the third quarter 2004. These increases were principally due to an increase in wells connected to the pipeline system and the completion of a capacity expansion project on certain sections of our pipeline system during the period. For the third quarter 2005, 151 new wells were connected to the gathering system. Overall, 442 new wells were connected to the system for the twelve months ended September 30, 2005 compared with 340 wells connected for the twelve months ended September 30, 2004. Corporate and Other General and administrative expenses, including amounts reimbursed to affiliates, increased $1.1 million to $2.8 million for the third quarter 2005 from $1.7 million for the third quarter 2004. This increase was primarily related to general and administrative expenses associated with the operations of the acquired assets in the Mid-Continent region and a $0.5 million increase in non-cash compensation expense related to vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: of incentive awards. Depreciation and amortization increased $2.4 million to $3.4 million for the third quarter 2005 due principally to the depreciation and amortization on the assets acquired. Interest expense increased to $3.2 million for the third quarter 2005, an increase of $2.1 million from the prior year third quarter. This increase was primarily related to interest associated with borrowings under the credit facility to finance the acquired assets. At September 30, 2005, there was $183.5 million outstanding under this facility. Interested parties are invited to access the live webcast of an investor call with management regarding our third quarter and nine month results on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant morning, October 28, 2005 at 8:30 am EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT by going to the home page of the Partnership's website at www.atlaspipelinepartners.com. An audio replay of the conference call will also be available beginning at 10:30 am EDT on Friday, October 28, 2005 until 11:59 pm on Monday Monday: see week. , November 28, 2005. To access the replay, dial 1-888-286-8010 and enter conference code 30212048. Atlas Pipeline Partners, L.P. is active in the gas gathering and processing segment of the mid-stream natural gas industry. In the Mid-Continent region of Oklahoma and northern Texas, APL owns and operates approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 2,200 miles of gas gathering pipeline. APL transports approximately 310 mmcfd from more than 880 receipt points or wells to its gas processing and treating facilities in Velma, Elk City and Prentiss, Oklahoma where natural gas liquids (NGL NGL - A dialect of IGL. ) and impurities are removed. APL then sells the resulting residue residue n. in a will, the assets of the estate of a person who has died with a will (died testate) which are left after all specific gifts have been made. Typical language: "I leave the rest, residue and remainder [or just residue] of my estate to my grandchildren. gas and NGL and remits a portion of those proceeds to the producer. In Appalachia, it owns and operates more than 1,500 miles of natural gas gathering pipelines in western Pennsylvania Western Pennsylvania consists of the western third of the state of Pennsylvania in the United States. Pittsburgh is the largest city in the region, with a metropolitan area of about 2.4 million people, and is the cultural center for Western Pennsylvania. , western New York
Western New York refers to the westernmost region of New York State. and eastern Ohio to which more than 5,120 wells are currently connected. APL gathers approximately 57.3 mmcfd from these wells. In Mid-Continent and Appalachia, the fees paid to APL are based on a percentage of the gross selling price of the gas or NGL, fixed fee per mcf transported, or on percent of index. For more information, visit our website at www.atlaspipelinepartners.com or contact pschreiber@atlaspipelinepartners.com. Atlas America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. , Inc. (Nasdaq:ATLS ATLS Advanced Trauma Life Support ATLS Aerial Target Launch Ship ), the parent company of Atlas Pipeline Partners, L.P.'s general partner and owner of 1,641,026 units of limited partner interest of APL, is an energy company engaged primarily in the development and production of natural gas in the Appalachian Basin for its own account and for its investors through the offering of tax advantaged investment programs. For more information, please visit our website at www.atlasamerica.com, or contact investor relations Investor relations The process by which the corporation communicates with its investors. at pschreiber@atlasamerica.com. Statements made in this release may include forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which involve substantial risks and uncertainties. The Partnership's actual results, performance or achievements could differ materially from those expressed or implied in this release as a result of many factors, including competition within the energy industry, climactic cli·mac·tic also cli·mac·ti·cal adj. Relating to or constituting a climax. cli·mac  ti·cal·ly adv.Adj. 1. conditions, volatility in the price of gas in the Appalachian and Mid-continent area, actual versus projected drilling activity, volumetric volumetric /vol·u·met·ric/ (vol?u-met´rik) pertaining to or accompanied by measurement in volumes. vol·u·met·ric adj. Of or relating to measurement by volume. production from wells connected to the Partnership's gas-gathering pipeline system, and the cost of supplies and services in the energy industry and the other factors disclosed under "risk factors" in the Partnership's most recent 10-K.
ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
Financial Summary
(in thousands, except per unit amounts)
(unaudited)
Three Months Ended Nine Months Ended
INCOME STATEMENT September 30, September 30,
---------------------- ------------------
2005 2004 2005 2004
---------- ----------- --------- --------
Revenues:
Natural gas and liquids $96,234 $30,048 $218,268 $30,048
Transportation and
compression - affiliates 6,248 4,645 16,447 13,292
Transportation and
compression - third
parties 16 20 54 52
Interest income and other 147 166 352 282
---------- ----------- --------- --------
Total revenues and other
income 102,645 34,879 235,121 43,674
---------- ----------- --------- --------
Costs and expenses:
Natural gas and liquids 82,537 24,588 184,578 24,588
Plant operating 2,745 931 7,242 931
Transportation and
compression 871 564 2,169 1,709
General and administrative 2,431 1,344 7,763 2,180
Compensation reimbursement
- affiliates 412 393 1,365 721
Terminated acquisition
costs (9) 2,987 138 2,987
Depreciation and
amortization 3,438 1,021 8,495 2,132
Interest 3,166 1,076 8,478 1,202
---------- ----------- --------- --------
Total costs and expenses 95,591 32,904 220,228 36,450
---------- ----------- --------- --------
Net income 7,054 1,975 14,893 7,224
Premium on preferred unit
redemption - 400 - 400
---------- ----------- --------- --------
Net income attributable to
partners $7,054 $1,575 $14,893 $6,824
========== =========== ========= ========
Allocation of net income
attributable to partners:
Limited partners' interest $4,600 $624 $9,003 $5,105
General partner's interest 2,454 951 5,890 1,719
---------- ----------- --------- --------
Net income attributable
to partners $7,054 $1,575 $14,893 $6,824
========== =========== ========= ========
Net income attributable to
partners per limited
partner unit:
Basic $0.48 $0.09 $1.09 $0.94
========== =========== ========= ========
Diluted $0.48 $0.09 $1.09 $0.94
========== =========== ========= ========
Weighted average limited
partner units outstanding:
Basic 9,511 6,839 8,226 5,416
========== =========== ========= ========
Diluted 9,591 6,844 8,277 5,418
========== =========== ========= ========
Capital expenditure data:
-------------------------
Maintenance capital
expenditures $245 $247 $1,110 $844
Expansion capital
expenditures 11,391 1,651 33,409 3,575
---------- ----------- --------- --------
Total $11,636 $1,898 $34,519 $4,419
========== =========== ========= ========
Balance Sheet Data (at Sept. 30, Dec. 31,
period end): 2005 2004
---------------------- ---------- -----------
Cash and cash
equivalents $12,035 $18,214
Total debt 183,645 54,452
Total partners' capital 187,028 136,704
ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
Segment Information
(in thousands - unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ------------------
2005 2004 2005 2004
---------- -------- --------- --------
Mid-Continent:
--------------
Revenues
Natural gas and liquids $96,234 $30,048 $218,268 $30,048
Interest income and other 60 24 77 24
---------- -------- --------- --------
Total revenues and other
income 96,294 30,072 218,345 30,072
---------- -------- --------- --------
Costs and expenses
Natural gas and liquids 82,537 24,588 184,578 24,588
Plant operating 2,745 931 7,242 931
General and administrative 1,258 634 4,307 634
Depreciation and amortization 2,739 613 6,597 613
---------- -------- --------- --------
Total costs and expenses 89,279 26,766 202,724 26,766
---------- -------- --------- --------
Segment profit $7,015 $3,306 $15,621 $3,306
========== ======== ========= ========
Appalachia:
-----------
Revenues
Transportation and
compression $6,264 $4,665 $16,501 $13,344
Interest income and other 87 142 275 258
---------- -------- --------- --------
Total revenues and other
income 6,351 4,807 16,776 13,602
---------- -------- --------- --------
Costs and expenses
Transportation and
compression 871 564 2,169 1,709
General and administrative 801 551 2,410 1,133
Depreciation and amortization 699 408 1,898 1,519
---------- -------- --------- --------
Total costs and expenses 2,371 1,523 6,477 4,361
---------- -------- --------- --------
Segment profit $3,980 $3,284 $10,299 $9,241
========== ======== ========= ========
Reconciliation of segment
profit to net income:
-------------------------
Segment profit
Mid-Continent $7,015 $3,306 $15,621 $3,306
Appalachia 3,980 3,284 10,299 9,241
---------- -------- --------- --------
Total segment profit 10,995 6,590 25,920 12,547
Corporate general and
administrative (784) (552) (2,411) (1,134)
Interest (3,166) (1,076) (8,478) (1,202)
Terminated acquisition costs 9 (2,987) (138) (2,987)
---------- -------- --------- --------
Net income $7,054 $1,975 $14,893 $7,224
========== ======== ========= ========
ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
(in thousands - unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
2005 2004 2005 2004
-------- -------- -------- --------
Reconciliation of net income to
non-GAAP measure(1):
Net income $7,054 $1,975 $14,893 $7,224
Depreciation and amortization 3,438 1,021 8,495 2,132
Interest expense 3,166 1,076 8,478 1,202
-------- -------- -------- --------
EBITDA 13,658 4,072 31,866 10,558
Interest expense (3,166) (1,076) (8,478) (1,202)
Non-cash compensation expense 640 154 2,798 191
Amortization of deferred
financing costs (included within
interest expense) 266 87 1,741 163
Premium on preferred unit
redemption - (400) - (400)
Maintenance capital expenditures (245) (247) (1,110) (844)
-------- -------- -------- --------
Distributable cash flow $11,153 $2,590 $26,817 $8,466
======== ======== ======== ========
(1) EBITDA and distributable cash flow are non-GAAP (generally
accepted accounting principles) financial measures under the rules
of the Securities and Exchange Commission (SEC). Management of the
Partnership believes that EBITDA and distributable cash flow
provide additional information for evaluating the Partnership's
ability to make distributions to its unitholders and the general
partner, among other things. These measures are widely used by
commercial banks, investment bankers, rating agencies and
investors in evaluating performance relative to peers and pre-set
performance standards. EBITDA is also a financial measurement
that, with certain negotiated adjustments, is utilized within the
Partnership's financial covenants under its credit facility.
EBITDA and distributable cash flow are not measures of financial
performance under GAAP and, accordingly, should not be considered
as a substitute for net income, operating income, or cash flows
from operating activities in accordance with GAAP.
ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
Operating Highlights
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
2005 2004 2005 2004
-------- -------- -------- --------
Mid-Continent - Velma System(1)
-------------------------------
Gas
Gross natural gas gathered -
mcf/day 68,469 55,580 69,091 55,580
Gross natural gas processed -
mcf/day 62,439 54,755 64,581 54,755
Gross residue natural gas -
mcf/day 53,235 41,555 52,471 41,555
Natural Gas Liquid
Gross NGL sales - barrels/day 6,877 5,916 6,812 5,916
Condensate
Gross condensate sales -
barrels/day 293 204 269 204
Mid-Continent - Elk City System(2)
----------------------------------
Gas
Gross natural gas gathered -
mcf/day 240,774 - 242,294 -
Gross natural gas processed -
mcf/day 115,913 - 116,688 -
Gross residue natural gas -
mcf/day 106,783 - 107,182 -
Natural Gas Liquid
Gross NGL sales - barrels/day 5,130 - 5,317 -
Condensate
Gross condensate sales -
barrels/day 123 - 121 -
Appalachia
----------
Gas
Throughput - mcf/day 57,294 54,337 54,804 52,745
Average transportation rate
per mcf $1.19 $0.93 $1.10 $0.92
Total transportation and
compression revenue
(in thousands) $6,264 $4,665 $16,501 $13,344
(1) Included from its date of acquisition on July 16, 2004.
(2) Included from is date of acquisition on April 14, 2005.
Mcf - thousand cubic feet
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