Hiland Reports Third Quarter 2009 Results
More News related to HLND
- Hiland Reports Third Quarter 2009 Results
- Hiland Announces Release Date for Third Quarter 2009 Financial Results
- Hiland Partners, LP and Hiland Holdings GP, LP Announce Amendments to Merger Agreements With Affiliates of Harold Hamm
- Unusual 11 Mid-Day Movers 10/27: HPGP, CTDC, HLND, UCTT Higher; AMFI, CRI, SGMS, IBCP Lower
- Morning Movers 10/27: HPGP, HLND, TBAC, CTDC, PODD, HSII Higher; ICGN, AMFI, IBCP, CRI, SGMS, PVTB Lower
More News related to HPGP
- Trading Radar for 11/09: Dish Network (DISH), Rockwell (ROK), Priceline.com (PCLN), MBIA (MBI), Ticketmaster (TKTM) Report
- Hiland Reports Third Quarter 2009 Results
- Hiland Announces Release Date for Third Quarter 2009 Financial Results
- Hiland Partners, LP and Hiland Holdings GP, LP Announce Amendments to Merger Agreements With Affiliates of Harold Hamm
- Unusual 11 Mid-Day Movers 10/27: HPGP, CTDC, HLND, UCTT Higher; AMFI, CRI, SGMS, IBCP Lower
More News related to Press Releases
- Brownstone Ventures Inc. Releases Unaudited Results for the Three Months Ended September 30, 2009
- Brownstone Ventures Inc. Releases Unaudited Results for the Three Months Ended September 30, 2009
- MRS Leads the Mammography Industry in High Risk Alerts
- BackOffice Associates, LLC Announces Serving for a Cure To Benefit the Thomas Blake Sr. Memorial Research Fund at Memorial Sloan-Kettering Cancer Center
- Blytheco Chosen as Sage National Extended Solutions Partner
ENID, Okla., Nov. 5, /PRNewswire-FirstCall/ -- The Hiland companies, Hiland Partners, LP (Nasdaq: HLND) (the "Partnership") and Hiland Holdings GP, LP (Nasdaq: HPGP) today announced results for the third quarter of 2009.
Hiland Partners, LP Financial Results
Hiland Partners, LP reported net income (loss) for the three months ended September 30, 2009 of $(19.5) million compared to net income (loss) of $18.6 million for the three months ended September 30, 2008. Net income (loss) per limited partners' unit-basic for the third quarter of 2009 was $(2.05) per unit compared to net income (loss) of $1.71 per unit in the corresponding quarter in 2008. Weighted average limited partner units outstanding were 9.4 million units for the three months ended September 30, 2009 and 9.3 million units for the three months ended September 30, 2008. Net income (loss) for the three months ended September 30, 2009 includes a $20.5 million non-cash property impairment charge related to the Partnership's Kinta Area gathering system. Net income (loss) for the three months ended September 30, 2009, excluding the non-cash property impairment charge was $1.0 million or $0.11 per limited partners' unit-basic.
Adjusted EBITDA (adjusted EBITDA is defined as net income (loss) plus interest expense, provisions for income taxes, depreciation, amortization and accretion expense, non-cash property impairments, and adjusted for significant non-cash and non-recurring items) for the three months ended September 30, 2009 was $15.5 million compared to $18.6 million for the three months ended September 30, 2008, a decrease of 17%. A reconciliation of adjusted EBITDA, a non-GAAP financial measure, to net income (loss), the most directly comparable GAAP financial measure, is provided within the financial tables of this press release. Total segment margin for the three months ended September 30, 2009 was $24.6 million compared to $33.9 million for the three months ended September 30, 2008, a decrease of 27%. A reconciliation of total segment margin, a non-GAAP financial measure, to operating income (loss), the most directly comparable GAAP financial measure, is provided within the financial tables of this press release. The decreases in adjusted EBITDA and total segment margin are primarily due to unfavorable gross processing spreads, significantly lower average realized natural gas and NGL prices, an overall decrease in natural gas sales volumes, offset by an overall increase in NGL sales volumes. The decrease in total segment margin was partially offset by gains on closed/settled derivative transactions and unrealized non-cash gains on open derivative transactions for the three months ended September 30, 2009 totaling $2.2 million compared to net losses of $1.4 million on closed/settled derivative transactions and unrealized non-cash losses on open derivative transactions for the three months ended September 30, 2008, offset by an unrealized non-cash gain of $5.6 million related to a non-qualifying mark-to-market cash flow hedge for forecasted sales in 2010.
Hiland Partners, LP reported net income (loss) for the nine months ended September 30, 2009 of $(23.4) million compared to net income (loss) of $17.5 million for the nine months ended September 30, 2008. Net income (loss) per limited partners' unit-basic for the nine months ended September 30, 2009 was $(2.45) per unit compared to net income (loss) of $1.17 per unit for the nine months ended September 30, 2008. Weighted average limited partner units outstanding were 9.4 million units for the nine months ended September 30, 2009 and 9.3 million units for the nine months ended September 30, 2008. Net income (loss) for the nine months ended September 30, 2009, excluding non-cash property impairment charges of $21.5 million was $(2.0) million or $(0.21) per limited partners' unit-basic.
Adjusted EBITDA for the nine months ended September 30, 2009 was $43.5 million compared to $53.2 million for the nine months ended September 30, 2008, a decrease of 18%. Total segment margin for the nine months ended September 30, 2009 was $68.8 million compared to $84.1 million for the nine months ended September 30, 2008, a decrease of 18%. The decreases in adjusted EBITDA and total segment margin are primarily due to unfavorable gross processing spreads, significantly lower average realized natural gas and NGL prices, an overall decrease in natural gas sales volumes, offset by an overall increase in NGL sales volumes, and additionally offset by approximately $2.3 million of foregone margin as a result of the nitrogen rejection plant at the Badlands gathering system being taken out of service due to equipment failure during the three months ended March 31, 2008. The decrease in adjusted EBITDA was also partially offset by $3.2 million of net proceeds from the early settlement of derivative assets. The decrease in total segment margin was also partially offset by gains on closed/settled derivative transactions and unrealized non-cash gains on open derivative transactions for the nine months ended September 30, 2009 totaling $7.1 million compared to net losses of $6.4 million on closed/settled derivative transactions and unrealized non-cash losses on open derivative transactions for the nine months ended September 30, 2008, offset by an unrealized non-cash gain of $3.6 million related to a non-qualifying mark-to-market cash flow hedge for forecasted sales in 2010.
The Partnership reported distributable cash flow ("DCF") of $10.5 million for the three months ended September 30, 2009, compared to $21.2 million for the three months ended September 30, 2008, a decrease of 50%. The decrease is primarily attributable to unfavorable gross processing spreads, significantly lower average realized natural gas and NGL prices, an overall decrease in volumes and $7.8 million of bad debt expense reversed during the three months ended September 30, 2008 partially offset by lower cash interest expense and maintenance capital expenditures. A reconciliation of DCF, a non-GAAP financial measure, to net income, the most directly comparable GAAP financial measure, is provided within the financial tables of this press release.
Hiland Partners, LP has suspended quarterly cash distributions on common and subordinated units beginning with the first quarter distribution of 2009 due to the impact of lower commodity prices and reduced drilling activity on its current and projected throughput volumes, midstream segment margins and cash flows combined with future required levels of capital expenditures and the outstanding indebtedness under Hiland Partners, LP's senior secured revolving credit facility (the "credit facility"). Under the terms of Hiland Partners, LP's partnership agreement, the common units carry an arrearage of $1.35 per unit, representing the minimum quarterly distribution to common units for the first three quarters of 2009 that must be paid before the Partnership can make distributions to the subordinated units.
Hiland Partners' credit facility requires the Partnership to meet certain financial tests, including a maximum consolidated funded debt to EBITDA covenant ratio. If commodity prices and inlet natural gas volumes do not improve above the current forward prices and expected inlet natural gas volumes for the fourth quarter of 2009, the Partnership could be in violation of the maximum consolidated funded debt to EBITDA covenant ratio as early as December 31, 2009, unless this ratio is amended, the Partnership receives an infusion of equity capital, the Partnership's debt is restructured or the Partnership is able to monetize "in-the-money" hedge positions. Management is continuing discussions with certain lenders under the credit facility as to ways to address a potential covenant violation. While no potential solution has been agreed to, the Partnership expects that any solution will require the assessment of fees and increased rates, the infusion of additional equity capital or the incurrence of subordinated indebtedness by the Partnership and the suspension of distributions for a certain period of time. There can be no assurance that any such agreement will be reached with the lenders, that any required equity or debt financing will be available to the Partnership, or that the Partnership will have sufficient "in-the-money" hedges to monetize to address the maximum consolidated funded debt to EBITDA covenant ratio.
As of September 30, 2009, Hiland Partners had $253.1 million outstanding under the credit facility and was in compliance with its financial covenants. Also at September 30, 2009, Hiland Partners' EBITDA to interest expense ratio was 4.93 to 1.0 and the Partnership's consolidated funded debt to EBITDA covenant ratio was 4.50 to 1.0. The maximum consolidated funded debt to EBITDA covenant ratio under the credit facility is 4.0 to 1.0 as of the last day of any fiscal quarter; provided that in the event that the Partnership makes certain permitted acquisitions or capital expenditures, this ratio may be increased to 4.75 to 1.0 for the three fiscal quarters following the quarter in which such permitted acquisition or capital expenditure occurs. The Partnership met the permitted capital expenditure requirements for the four quarter period ended March 31, 2009 and elected to increase the ratio to 4.75 to 1.0 on March 31, 2009 for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009. The maximum consolidated funded debt to EBITDA covenant ratio will revert back to 4.0 to 1.0 for the quarter ended December 31, 2009.
Hiland Holdings GP, LP Financial Results
Hiland Holdings GP, LP reported limited partners' interest in net income (loss) for the three months ended September 30, 2009 of $(12.4) million or $(0.57) per limited partners' unit-basic compared to limited partners' interest in net income (loss) of $11.2 million or $0.52 per limited partners' unit-basic for the three months ended September 30, 2008. Weighted average limited partner units outstanding were 21.6 million for the three months ended September 30, 2009 and September 30, 2008. Net income (loss) was $(20.5) million in the three months ended September 30, 2009 compared to net income (loss) of $18.0 million in the three months ended September 30, 2008.
For the nine months ended September 30, 2009, Hiland Holdings GP, LP reported limited partners' interest in net income (loss) of $(17.8) million or $(0.82) per limited partners' unit-basic compared to limited partners' interest in net income (loss) of $10.9 million or $0.51 per limited partners' unit-basic for the nine months ended September 30, 2008. Weighted average limited partner units outstanding were 21.6 million for the nine months ended September 30, 2009 and September 30, 2008. Net income (loss) was $(27.6) million in the nine months ended September 30, 2009 compared to net income (loss) of $15.3 million in the nine months ended September 30, 2008.
Hiland Holdings GP, LP has suspended quarterly cash distributions on its common units beginning with the first quarter of 2009 resulting from the quarterly distribution suspension announced by Hiland Partners, LP. Hiland Holdings' sole cash generating assets are its two percent general partner interest, 2,321,471 common units and 3,060,000 subordinated units in Hiland Partners, LP, and the incentive distribution rights in Hiland Partners, LP.
As mentioned above, under the terms of the Hiland Partners, LP partnership agreement, the Hiland Partners, LP common units carry an arrearage of $1.35 per unit, representing the minimum quarterly distribution to the Hiland Partners, LP common units for the first three quarters of 2009 that must be paid before Hiland Partners, LP can make distributions to the Hiland Partners, LP subordinated units. Hiland Holdings GP, LP owns 3,060,000 of the Hiland Partners, LP subordinated units which will not receive a cash distribution until the distribution arrearage to the Hiland Partners, LP common units is paid.
A number of the areas in which Hiland Partners, LP operates have experienced significant declines in drilling activity as a result of this year's decline in natural gas and crude oil prices as compared to last year. Excluding its North Dakota Bakken gathering system, which commenced operations in April 2009, the Partnership connected 26 wells during the first nine months of 2009 as compared to 83 wells connected during the same period in 2008, a 69% decrease. At the North Dakota Bakken gathering system, Hiland Partners connected 41 wells during the nine months ended September 30, 2009. As of today, there are two rigs drilling along Hiland Partners, LP's dedicated acreage company wide, both of which are located at our North Dakota Bakken gathering system. The Partnership anticipates that the dedicated rig count will increase during the remainder of 2009 and into 2010. While the Partnership anticipates continued exploration and production activities in the areas in which it operates, albeit at depressed levels, fluctuations in energy prices can greatly affect production rates and investments by third parties in the development of natural gas and crude oil reserves. Drilling activity generally decreases as natural gas and crude oil prices decrease. The Partnership has no control over the level of drilling activity in the areas of its operations.
"We are extremely pleased that natural gas liquids prices improved in the third quarter from levels in the first half of 2009," said Joseph L. Griffin, Hiland's President and Chief Executive Officer. "The improved natural gas liquids price and fractionation spread environment helped mitigate the inlet natural gas volume declines we experienced in the third quarter of 2009, particularly in the Mid-Continent. Currently, I expect overall declines in inlet natural gas volumes to continue as current drilling activity in our Mid-Continent service territories remains weak," added Griffin.
Conference Call Information
Hiland has scheduled a conference call for 10:00 am Central Time, Friday, November 6, 2009, to discuss the 2009 third quarter results. To participate in the call, dial 1.888.396.2298 and participant passcode 92002423, or access it live over the Internet at www.hilandpartners.com, on the "Investor Relations" section of the Partnership's website.
During this conference call, Hiland management will only address the third quarter 2009 results and will not address the Hiland Partners and Hiland Holdings mergers.
Use of Non-GAAP Financial Measures
This press release and the accompanying schedules include the non-generally accepted accounting principles ("non-GAAP") financial measures of EBITDA, adjusted EBITDA, total segment margin and distributable cash flow. The accompanying schedules provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measure 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 as alternatives to GAAP measures such as net income, operating income or any other GAAP measure of liquidity or financial performance.
About the Hiland Companies
Hiland Partners, LP is a publicly traded midstream energy partnership engaged in purchasing, gathering, compressing, dehydrating, treating, processing and marketing of natural gas, and fractionating, or separating, and marketing of natural gas liquids, or NGLs. Hiland Partners, LP also provides air compression and water injection services for use in oil and gas secondary recovery operations. Hiland Partners, LP's operations are primarily located in the Mid-Continent and Rocky Mountain regions of the United States. Hiland Partners, LP's midstream assets consist of fifteen natural gas gathering systems with approximately 2,160 miles of gathering pipelines, six natural gas processing plants, seven natural gas treating facilities and three NGL fractionation facilities. Hiland Partners, LP's compression assets consist of two air compression facilities and a water injection plant.
Hiland Holdings GP, LP owns the two percent general partner interest, 2,321,471 common units and 3,060,000 subordinated units in Hiland Partners, LP, and the incentive distribution rights of Hiland Partners, LP.
Forward-Looking Statements
This press release includes certain statements concerning expectations for the future that are forward-looking statements. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management's control. An extensive list of factors that can affect future results are discussed in the Partnership's Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. Any such forward looking statements are made as of the date of this press release and the Partnership undertakes no obligation to update or revise any such forward-looking statements to reflect new information or events.
- tables to follow -
Other Financial and Operating Data
Hiland Partners, LP - Results of Operations
Set forth in the table below is financial and operating data for Hiland
Partners, LP.
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ---------------------
2009 2008 2009 2008
------- -------- -------- --------
(unaudited, in (unaudited, in
thousands) thousands)
Total Segment Margin
Data:
Midstream revenues $53,641 $114,548 $153,658 $319,058
Midstream purchases 30,266 81,895 88,481 238,586
------- -------- -------- --------
Midstream segment
margin 23,375 32,653 65,177 80,472
Compression revenues
(A) 1,205 1,205 3,615 3,615
------- -------- -------- --------
Total segment
margin (B) $24,580 $33,858 $68,792 $84,087
======== ======== ======== ========
Summary of Operations
Data:
Midstream revenues $53,641 $114,548 $153,658 $319,058
Compression revenues 1,205 1,205 3,615 3,615
------- -------- -------- --------
Total revenues 54,846 115,753 157,273 322,673
Midstream purchases
(exclusive of
items shown
separately below) 30,266 81,895 88,481 238,856
Operations and
maintenance 7,736 7,881 23,216 22,201
Depreciation,
amortization and
accretion 10,472 9,554 30,981 27,652
Property impairments 20,500 - 21,450 -
Bad debt - (7,799) - 304
General and
administrative 2,579 2,259 8,458 6,423
------- -------- -------- --------
Total operating
costs and expenses 71,553 93,790 172,586 295,166
------- -------- -------- --------
Operating income
(loss) (16,707) 21,963 (15,313) 27,507
Other income
(expense) (2,841) (3,322) (8,096) (10,047)
------- -------- -------- --------
Net income (loss) $(19,548) $18,641 $(23,409) $17,460
======== ======== ======== ========
Maintenance capital
expenditures $1,270 $1,737 $4,127 $4,681
Expansion capital
expenditures 2,954 17,841 19,286 33,265
------- -------- -------- --------
Total capital
expenditures $4,224 $19,578 $23,413 $37,946
======== ======== ======== ========
Operating Data:
Inlet natural gas
(Mcf/d) 257,950 261,345 268,937 245,098
Natural gas sales
(MMBtu/d) 86,979 95,889 88,703 89,615
NGL sales (Bbls/d) 7,115 6,036 7,141 5,763
Average realized
natural gas
sales price
($/MMBtu) $3.25 $7.57 $3.32 $8.00
Average realized
NGL sales
price ($/gallon) $0.76 $1.55 $0.67 $1.53
September 30, December 31,
2009 2008
------------- ------------
(in thousands)
(unaudited)
Balance Sheet Data (at period end):
Property and equipment, at cost, net $322,681 $345,855
Total assets $381,861 $426,139
Long-term debt, net of current maturities $256,934 $256,466
Total partners' equity $100,247 $133,156
(A) Compression revenues and compression segment margin are the same.
There are no compression purchases associated with the compression
segment.
(B) Reconciliation of total segment margin to operating income (loss):
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
------------------ -------------------
2009 2008 2009 2008
------- ------- ------- -------
(unaudited, in (unaudited, in
thousands) thousands)
Reconciliation of
Total Segment Margin
to Operating Income
(Loss)
Operating income (loss) $(16,707) $21,963 $(15,313) $27,507
Add:
Operations and
maintenance expenses 7,736 7,881 23,216 22,201
Depreciation,
amortization and
accretion 10,472 9,554 30,981 27,652
Property impairments 20,500 - 21,450 -
Bad debt expense - (7,799) - 304
General and
administrative expenses 2,579 2,259 8,458 6,423
------- ------- ------- -------
Total segment margin $24,580 $33,858 $68,792 $84,087
======= ======= ======= =======
We view total segment margin, a non-GAAP financial measure, as an
important performance measure of the core profitability of our operations
because it is directly related to our volumes and commodity price changes.
We review total segment margin monthly for consistency and trend analysis.
We define midstream segment margin as midstream revenue less midstream
purchases. Midstream purchases include the following costs and expenses:
cost of natural gas and NGLs purchased by us from third parties, cost of
natural gas and NGLs purchased by us from affiliates, and the cost of
crude oil purchased by us from third parties. We define compression
segment margin as the revenue derived from our compression segment. Our
total segment margin may not be comparable to similarly titled measures of
other entities, as other entities may not calculate total segment margin
in the same manner we do.
Reconciliation of adjusted EBITDA to net income (loss):
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
------------------ -------------------
2009 2008 2009 2008
------- ------- ------- -------
(unaudited, in (unaudited, in
thousands) thousands)
Reconciliation of adjusted
EBITDA to Net Income
(Loss)
Net income (loss) $(19,548) $18,641 $(23,409) $17,460
Add:
Depreciation,
amortization and
accretion 10,472 9,554 30,981 27,652
Property impairments 20,500 - 21,450 -
Amortization of deferred
loan costs 149 147 448 426
Interest expense 2,702 3,271 7,739 9,888
------- ------- ------- -------
EBITDA $14,275 $31,613 $37,209 55,426
Add:
Non-cash unrealized loss
(gain) on derivatives 252 (5,620) 131 (3,685)
Non-cash unit-based
compensation expense 236 396 837 1,159
Bad debt expense - (7,799) - 304
Proceeds from settlement
of derivative assets - - 3,155 -
Going private transaction
costs 748 - 2,126 -
------- ------- ------- -------
Adjusted EBITDA $15,511 $18,590 $43,458 $53,204
======= ======= ======= =======
We define EBITDA, a non-GAAP financial measure, as net income (loss) plus
interest expense, provisions for income taxes and depreciation,
amortization and accretion expense. EBITDA is used as a supplemental
financial measure by our management and by external users of our financial
statements such as investors, commercial banks, research analysts and
others to assess: (1) the financial performance of our assets without
regard to financial methods, capital structure or historical cost basis;
(2) the ability of our assets to generate cash sufficient to pay interest
costs and support our indebtedness; (3) our operating performance and
return on capital as compared to those of other companies in the midstream
energy sector, without regard to financing or structure; and (4) the
viability of acquisitions and capital expenditure projects and the overall
rates of return on alternative investment opportunities. EBITDA is also a
financial measure that, with certain negotiated adjustments, is reported
to our banks and is used as a gauge for compliance with our financial
covenants under our credit facility. EBITDA should not be considered as
an alternative to net income (loss), operating income, cash flows from
operating activities or any other measures of financial performance
presented in accordance with GAAP. Our EBITDA may not be comparable to
EBITDA of similarly titled measures of other entities, as other entities
may not calculate EBITDA in the same manner as we do.
We define adjusted EBITDA, a non-GAAP financial measure, as net income
(loss) plus interest expense, provisions for income taxes and
depreciation, amortization and accretion expense, non-cash property
impairments and adjusted for significant non-cash and non-recurring items.
Adjusted EBITDA is used as a supplemental financial measure by our
management and by external users of our financial statements such as
investors, commercial banks, research analysts and others to assess:
(1) the financial performance of our assets without regard to financial
methods, capital structure or historical cost basis; (2) the ability of
our assets to generate cash sufficient to pay interest costs and support
our indebtedness; (3) our operating performance and return on capital as
compared to those of other companies in the midstream energy sector,
without regard to financing or structure; and (4) the viability of
acquisitions and capital expenditure projects and the overall rates of
return on alternative investment opportunities. Adjusted EBITDA is also a
financial measurement that, with certain negotiated adjustments, is
reported to our banks and is used as a gauge for compliance with our
financial covenants under our credit facility. Adjusted EBITDA should not
be considered as an alternative to net income (loss), operating income,
cash flows from operating activities or any other measures of financial
performance presented in accordance with GAAP. Our adjusted EBITDA may
not be comparable to adjusted EBITDA of similarly titled measures of other
entities, as other entities may not calculate adjusted EBITDA in the same
manner as we do.
Reconciliation of distributable cash flow to net income (loss):
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
-------------------- -------------------
2009 2008 2009 2008
------- ------- ------- -------
(unaudited, in (unaudited, in
thousands) thousands)
Reconciliation of
Distributable Cash Flow
to Net Income (Loss)
Net income (loss) $(19,548) $18,641 $(23,409) $17,460
Add:
Depreciation,
amortization and
accretion 10,472 9,554 30,981 27,652
Property impairments 20,500 - 21,450 -
Amortization of deferred
loan costs 149 147 448 426
Interest expense 2,702 3,271 7,739 9,888
------- ------- ------- -------
EBITDA $14,275 $31,613 $37,209 55,426
Add:
Non-cash unrealized
loss (gain) on
derivatives 252 (5,620) 131 (3,685)
Non-cash unit-based
compensation expense 236 396 837 1,159
Bad debt expense - (7,799) - 304
Proceeds from settlement
of derivative assets - - 3,155 -
Going private transaction
costs 748 - 2,126 -
------- ------- ------- -------
Adjusted EBITDA $15,511 $18,590 $43,458 $53,204
Less:
Cash interest expense 2,744 3,291 7,923 9,707
Maintenance capital
expenditures 1,270 1,737 4,127 4,681
Payments on capital lease
obligations 210 134 560 369
Bad debt expense - (7,799) - 304
Going private transaction
costs 748 - 2,126 -
------- ------- ------- -------
Distributable cash flow $10,539 $21,227 $28,722 $38,143
======= ======= ======= =======
We view distributable cash flow, a non-GAAP financial measure, as an
important performance measure used by senior management to compare basic
cash flows generated by the Partnership (prior to the establishment of any
retained cash reserves by the Board of Directors) to the cash
distributions expected to be paid to unitholders. Using this metric,
management can compute the coverage ratio of estimated cash flows to
planned cash distributions. Distributable cash flow is also an important
non-GAAP financial measure for unitholders since it serves as an indicator
of the Partnership's success in providing a cash return on investment.
The financial measure indicates to investors whether or not the
Partnership is generating cash flow at a level that can sustain or support
an increase in quarterly distribution rates. Distributable cash flow is
also a quantitative standard used throughout the investment community with
respect to publicly-traded master limited partnerships because the value
of such an entity generally is related to the amount of cash distributions
the entity can pay to its unitholders. The GAAP financial measure most
directly comparable to distributable cash flow is net income (loss). Our
distributable cash flow may not be comparable to similarly titled measures
of other entities, as other entities may not calculate distributable cash
flow in the same manner we do.
Other Financial and Operating Data
Hiland Holdings GP, LP - Results of Operations
Set forth in the table below is financial and operating data for Hiland
Holdings GP, LP.
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
-------------------- ------------------
2009 2008 2009 2008
-------- ------- -------- -------
(unaudited, in (unaudited, in
thousands) thousands)
Total Segment Margin Data:
Midstream revenues $53,641 $114,548 $153,658 $319,058
Midstream purchases 30,266 81,895 88,481 238,586
-------- ------- -------- -------
Midstream segment margin 23,375 32,653 65,177 80,472
Compression revenues (A) 1,205 1,205 3,615 3,615
-------- ------- -------- -------
Total segment margin (B) $24,580 $33,858 $68,792 $84,087
======== ======= ======== =======
Summary of Operations Data:
Midstream revenues $53,641 $114,548 $153,658 $319,058
Compression revenues 1,205 1,205 3,615 3,615
-------- ------- -------- -------
Total revenues 54,846 115,753 157,273 322,673
Midstream purchases
(exclusive of items
shown separately
below) 30,266 81,895 88,481 238,586
Operations and maintenance 7,736 7,881 23,216 22,201
Depreciation, amortization
and accretion 10,758 9,842 31,841 28,513
Property impairments 20,500 - 21,450 -
Bad debt - (7,799) - 304
General and administrative 3,217 2,597 11,649 7,615
-------- ------- -------- -------
Total operating costs and
expenses 72,477 94,416 176,637 297,219
-------- ------- -------- -------
Operating income (loss) (17,631) 21,337 (19,364) 25,454
Other income (expense) (2,900) (3,349) (8,211) (10,132)
-------- ------- -------- -------
Net income (loss) (20,351) 17,988 (27,575) 15,322
Less: Noncontrolling
partners' interest
in income (loss)
of Hiland Partners (8,152) 6,800 (9,762) 4,402
-------- ------- -------- -------
Limited partners' interest
in net income (loss) $(12,379) $11,188 $(17,813) $10,920
======== ======= ======== =======
Sept. 30, December 31,
2009 2008
--------- ------------
(in thousands)
(unaudited)
Balance Sheet Data (at period end):
Property and equipment, at cost, net $325,649 $349,159
Total assets $389,593 $435,560
Long-term debt, net of current maturities $256,934 $256,466
Noncontrolling partners' interest in
Hiland Partners $112,692 $125,851
Total partners' equity $104,730 $141,348
(A) Compression revenues and compression segment margin are the same.
There are no compression purchases associated with the compression
segment.
(B) Reconciliation of total segment margin to operating income (loss):
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
------------------ ------------------
2009 2008 2009 2008
------- ------- ------- -------
(unaudited, in (unaudited, in
thousands) thousands)
Reconciliation of Total Segment
Margin to Operating Income
(Loss)
Operating income (loss) $(17,631) $21,337 $(19,364) $25,454
Add:
Operations and maintenance
expenses 7,736 7,881 23,216 22,201
Depreciation, amortization
and accretion 10,758 9,842 31,841 28,513
Property impairments 20,500 - 21,450 -
Bad debt expense - (7,799) - 304
General and administrative
expenses 3,217 2,597 11,649 7,615
------- ------- ------- -------
Total segment margin $24,580 $33,858 $68,792 $84,087
======= ======= ======= =======
We view total segment margin, a non-GAAP financial measure, as an
important performance measure of the core profitability of our operations
because it is directly related to our volumes and commodity price changes.
We review total segment margin monthly for consistency and trend analysis.
We define midstream segment margin as midstream revenue less midstream
purchases. Midstream purchases include the following costs and expenses:
cost of natural gas and NGLs purchased by us from third parties, cost of
natural gas and NGLs purchased by us from affiliates, and cost of crude
oil purchased by us from third parties. We define compression segment
margin as the revenue derived from our compression segment. Our total
segment margin may not be comparable to similarly titled measures of other
entities, as other entities may not calculate total segment margin in the
same manner we do.
SOURCE Hiland Partners, LP; Hiland Holdings GP, LP
Related Categories
Press ReleasesStocks Mentioned
+0.01Related Entities
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
