ENID, Okla., Aug. 7 /PRNewswire-FirstCall/ -- The Hiland companies,
Hiland Partners, LP (NASDAQ:HLND) and Hiland Holdings GP, LP
(NASDAQ:HPGP) today announced a new system expansion project, a new
organic growth construction project, an executive officer hiring
and results for the second quarter of 2008. New System Expansion
Project Hiland Partners, LP today announced a new system expansion
project with the signing of an agreement with a third-party
producer to construct and operate natural gas gathering pipelines,
compression and related facilities around its existing Kinta
gathering system in eastern Oklahoma. With the signing of this
agreement, the third-party producer has dedicated approximately
7,040 gross acres to the Partnership. The Partnership plans to make
an initial capital investment of approximately $5.6 million by the
end of 2008 and totaling up to $8.6 million over the next three
years. The expected startup of the initial phase of the project is
by the end of the third quarter of 2008. New Organic Growth
Construction Project Hiland Partners, LP today announced a new
organic growth construction project with the signing of an
agreement with a third-party producer to construct and operate
natural gas gathering pipelines, compression and related facilities
in the Anadarko Basin of western Oklahoma. With the signing of this
agreement, the third-party producer has dedicated approximately
18,560 gross acres to the Partnership. The Partnership plans to
make an initial capital investment of approximately $7.4 million by
the end of 2008 and totaling up to $14.4 million over the next
three years. The expected startup of the initial phase of the
project is the end of the first quarter of 2009. Executive Officer
Hiring Hiland Partners, LP today announced that Kent Christopherson
has joined Hiland as Vice President - Chief Operations Officer.
Christopherson will oversee Hiland's midstream operations,
including the profitability and efficiency of the Partnership's
existing assets, construction projects and system expansions.
Christopherson will report to Hiland President and Chief Executive
Officer Joseph L. Griffin. "Kent is going to be a tremendous asset
to Hiland's senior management team," said Griffin. "Kent's
experience in the midstream industry, including the Rockies and
Mid-Continent regions where Hiland operates, will be instrumental
in developing and executing Hiland's growth strategy."
Christopherson has over 28 years of experience in natural gas and
natural gas liquids gathering and processing. Christopherson joined
Hiland from DCP Midstream Partners, LP where he most recently was
Senior Director of Operating Excellence and Reliability Services.
Prior to joining a successor to DCP Midstream in 1991,
Christopherson was employed by Western Gas Resources and
Flopetrol-Johnston Schlumberger. Christopherson holds a B.S. degree
in Mining Engineering & Geology from the South Dakota School of
Mines and Technology and a MBA degree from Nova Southeastern
University. Hiland Partners, LP today also announced that Robert
Shain has become Vice President - Chief Commercial Officer. Shain
joined Hiland in 2006, most recently serving as Vice President -
Operations and Engineering. Shain will focus on Hiland's commercial
operations, including long-term supply, sales activities and future
growth initiatives. Shain will continue to report to Griffin.
"Robert has been an integral part of Hiland's success and growth
over the last two years," said Griffin. "Robert's new role will
allow the Partnership to significantly increase its focus on
additional organic growth projects and system expansions." Hiland
Partners, LP Financial Results Hiland Partners, LP reported a net
loss for the three months ended June 30, 2008 of $2.5 million
compared to net income of $2.5 million for the three months ended
June 30, 2007. Net loss per limited partner unit-basic for the
second quarter of 2008 was $(0.49) per unit compared to net income
of $0.16 per unit in the corresponding quarter in 2007. Weighted
average limited partner units outstanding were 9.3 million units
for the three months ended June 30, 2008 and June 30, 2007.
Adjusted net income, which adjusts for significant non-recurring
and non-cash items as disclosed below, was $7.5 million for the
three months ended June 30, 2008 compared to $2.6 million for the
three months ended June 30, 2007. For the three and six months
ended June 30, 2008, adjusted net income includes a significant
adjustment related to bad debt expense recorded as a result of the
bankruptcy of SemGroup, L.P., a purchaser of natural gas liquids
and condensate, primarily at our Bakken and Badlands plants and
gathering systems (see the header "SemGroup Exposure" below for
more discussion on this topic), and an unrealized loss related to a
non-qualifying mark-to-market cash flow hedge for forecasted
natural gas sales in 2010. A reconciliation of adjusted net income,
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. The increase in adjusted
net income for the three months ended June 30, 2008 compared to the
three months ended June 30, 2007 is primarily due to increased
total segment margin associated with favorable gross processing
spreads, significantly higher average realized natural gas and
natural gas liquids prices, volume growth at the Woodford Shale
gathering system which commenced operation in April 2007 and volume
growth at the expanded Badlands gathering system, including the
nitrogen rejection plant, which commenced operations in August
2007, offset by increased operations and maintenance, depreciation
and interest expenses. A reconciliation of total segment margin, a
non-GAAP financial measure, to operating income, the most directly
comparable GAAP financial measure, is provided within the financial
tables of this press release. Adjusted EBITDA (adjusted EBITDA is
defined as net income (loss) plus interest expense, provisions for
income taxes, and depreciation, amortization and accretion expense,
and adjusted for significant non-cash and non-recurring items) for
the three months ended June 30, 2008 was $20.0 million compared to
$12.0 million for the three months ended June 30, 2007, an increase
of 67%. 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 June
30, 2008 was $27.4 million compared to $18.7 million for the three
months ended June 30, 2007, an increase of 46%. The increases in
adjusted EBITDA and total segment margin are primarily attributable
to favorable gross processing spreads, significantly higher average
realized natural gas and natural gas liquids prices, volume growth
at the Woodford Shale gathering system which commenced operation in
April 2007 and volume growth at the expanded Badlands gathering
system, including the nitrogen rejection plant, which commenced
operations in August 2007. The increase in total segment margin was
offset by an unrealized loss of approximately $1.5 million related
to a non-qualifying mark-to-market cash flow hedge for forecasted
natural gas sales in 2010. For the six months ended June 30, 2008,
Hiland Partners, LP reported a net loss of $1.2 million compared to
net income of $4.7 million for the six months ended June 30, 2007.
Net loss per limited partner unit-basic for the six months ended
June 30, 2008 was $(0.54) per unit compared net income of $0.31 per
unit for the six months ended June 30, 2007. Weighted average
limited partner units outstanding were 9.3 million units for the
six months ended June 30, 2008 and June 30, 2007. Adjusted net
income for the six months ended June 30, 2008 was $9.6 million
compared to $4.8 million for the six months ended June 30, 2007.
The increase in adjusted net income for the six months ended June
30, 2008 compared to the six months ended June 30, 2007 is
primarily due to increased total segment margin associated with
favorable gross processing spreads, significantly higher average
realized natural gas and natural gas liquids prices, volume growth
at the Woodford Shale gathering system which commenced operation in
April 2007 and volume growth at the expanded Badlands gathering
system, including the nitrogen rejection plant, which commenced
operations in August 2007, offset by approximately $2.3 million as
a result of the Badlands nitrogen rejection plant being temporarily
taken out of service due to equipment failure in the first quarter
of 2008 and increased operations and maintenance, depreciation,
general and administrative and interest expenses. Adjusted EBITDA
for the six months ended June 30, 2008 was $34.6 million compared
to $23.2 million for the six months ended June 30, 2007, an
increase of 49%. Total segment margin for the six months ended June
30, 2008 was $50.2 million compared to $36.1 million for the six
months ended June 30, 2007, an increase of 39%. The increases in
adjusted EBITDA and total segment margin are primarily attributable
to favorable gross processing spreads, significantly higher average
realized natural gas and natural gas liquids prices, volume growth
at the Woodford Shale gathering system which commenced operation in
April 2007 and volume growth at the expanded Badlands gathering
system, including the nitrogen rejection plant, which commenced
operations in August 2007. The increases in adjusted EBITDA and
total segment margin were offset by approximately $2.3 million as a
result of the Badlands nitrogen rejection plant being temporarily
taken out of service due to equipment failure in the first quarter
of 2008. The increase in total segment margin was offset by an
unrealized loss of approximately $1.5 million related to a
non-qualifying mark-to-market cash flow hedge for forecasted
natural gas sales in 2010. The Partnership reported distributable
cash flow ("DCF") of $6.1 million for the three months ended June
30, 2008, compared to $8.8 million for the three months ended June
30, 2007, a decrease of 31%. As a Master Limited Partnership, cash
distributions to limited partners are largely determined based on
DCF. A reconciliation of DCF, 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. On
July 25, 2008, Hiland Partners, LP announced an increase in its
cash distribution for the second quarter of 2008. The declared
quarterly distributions on Hiland Partners, LP's common and
subordinated units increased to $0.8625 per unit (an annualized
rate of $3.45 per unit) from $0.8275 per unit (an annualized rate
of $3.31 per unit) for the first quarter of 2008. This represents a
4.2% increase over the prior quarter and a 17.7% increase over the
distribution for the same quarter of the prior year. This
distribution will be paid on August 14, 2008 to unitholders of
record on August 4, 2008. "The second quarter financial and
operating results, along with our expanding 2008 growth capital
expenditure program, are solid indications that the Partnership
continues to grow its asset base and we look forward to reporting
our future progress," said Griffin. Hiland Holdings GP, LP
Financial Results Hiland Holdings GP, LP reported a net loss for
the three months ended June 30, 2008 of $1.1 million [$(0.05) per
limited partner unit-basic] compared to net income of $1.1 million
[$0.05 per limited partner unit-basic] for the three months ended
June 30, 2007. Weighted average limited partner units outstanding
were 21.6 million for the three months ended June 30, 2008 and June
30, 2007. Net loss before minority interest was $3.3 million in the
three months ended June 30, 2008 compared to net income of $1.8
million in the three months ended June 30, 2007. For the six months
ended June 30, 2008, Hiland Holdings GP, LP reported a net loss of
$0.3 million [$(0.01) per limited partner unit-basic] compared to
net income of $1.9 million [$0.09 per limited partner unit-basic]
for the six months ended June 30, 2007. Weighted average limited
partner units outstanding were 21.6 million for the six months
ended June 30, 2008 and June 30, 2007. Net loss before minority
interest was $2.7 million in the six months ended June 30, 2008
compared to net income of $3.1 million in the six months ended June
30, 2007. Hiland Holdings GP, LP's share of distributions from
Hiland Partners, LP, including distributions on its 5,381,471
limited partner units, its two percent general partner interest,
and the incentive distributions rights, will be approximately $7.0
million for the second quarter of 2008. On July 25, 2008, Hiland
Holdings GP, LP announced an increase in its cash distribution for
the second quarter of 2008. The declared quarterly distributions on
the Partnership's units were increased to $0.3050 per unit (an
annualized rate of $1.22 per unit) from $0.28 per unit (an
annualized rate of $1.12 per unit) for the fourth quarter of 2008.
This represents a 8.9% increase over the prior quarter and a 38.6%
increase over the distribution for the same quarter of the prior
year. The distribution will be paid on August 19, 2008 to
unitholders of record on August 4, 2008. SemGroup Exposure On July
22, 2008, SemGroup, L.P. and certain subsidiaries filed voluntary
petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. Affiliates of SemGroup, L.P. purchase our natural
gas liquids and condensate, primarily at our Bakken and Badlands
plants and gathering systems. As a result, the Partnership
established an allowance for doubtful accounts and bad debt expense
by approximately $8.1 million in the three and six month period
ended June 30, 2008. The Partnership estimates additional potential
exposure of approximately $5.0 million with this purchaser for
uninvoiced product sales from July 1 through July 18, 2008. The
Partnership has made temporary arrangements with other third
parties for its product sales while assessing its options in light
of SemGroup's bankruptcy. The Partnership is monitoring the
bankruptcy cases closely to pursue the best course of action to
obtain payment of the amounts owed to us and to continue natural
gas liquids and condensate sales at its Bakken and Badlands plants
and gathering systems. This matter is not expected to cause the
Partnership to be out of compliance with its covenants under its
credit facility or impact its liquidity position in any material
respect. Based upon information contained in available court
filings made by SemGroup, L.P., the Partnership believes that the
bankruptcy of SemGroup, L.P. may be attributable to circumstances
unique to SemGroup, L.P., including significant margin requirements
for large futures and options trading positions by SemGroup, L.P.,
which are not representative of the liquidity and financial
position of other companies in the midstream sector. Accordingly,
the Partnership believes that the circumstances that led to the
SemGroup, L.P. bad debt expense are highly unusual and are unlikely
to occur in the future with respect to receivables from other
purchasers of the Partnership's natural gas liquids and condensate.
Conference Call Information Hiland has scheduled a conference call
for 10:00 am Central Time, Friday, August 8, 2008, to discuss the
2008 second quarter results. To participate in the call, dial
1.888.396.2298 and participant passcode 92002423, or access it live
over the Internet at http://www.hilandpartners.com/, on the
"Investor Relations" section of the Partnership's website. 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 adjusted net income, 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. The
Partnership also provides air compression and water injection
services for use in oil and gas secondary recovery operations. The
Partnership'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 fourteen natural gas gathering
systems with approximately 2,079 miles of gathering pipelines, five
natural gas processing plants, seven natural gas treating
facilities and three NGL fractionation facilities. The
Partnership'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. This press
release may include 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. The Partnership undertakes no obligation to update or
revise any 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 Six Months Ended June 30, June 30,
---------------------- ---------------------- 2008 2007 2008 2007
---------- ---------- ---------- ---------- (unaudited, in
(unaudited, in thousands) thousands) Total Segment Margin Data:
Midstream revenues $114,236 $65,411 $204,510 $125,259 Midstream
purchases 88,073 47,916 156,691 91,53 ---------- ----------
---------- ---------- Midstream segment margin 26,163 17,495 47,819
33,728 Compression revenues (A) 1,205 1,205 2,410 2,410 ----------
---------- ---------- ---------- Total segment margin $27,368
$18,700 $50,229 $36,138 ========== ========== ========== ==========
Summary of Operations Data: Midstream revenues $114,236 $65,411
$204,510 $125,259 Compression revenues 1,205 1,205 2,410 2,410
---------- ---------- ---------- ---------- Total revenues 115,441
66,616 206,920 127,669 Midstream purchases (exclusive of items
shown separately below) 88,073 47,916 156,691 91,531 Operations and
maintenance 7,551 4,980 14,320 9,950 Depreciation, amortization and
accretion 9,169 7,039 18,098 13,779 Bad debt 8,103 - 8,103 -
General and administrative 1,863 1,879 4,164 3,394 ----------
---------- ---------- ---------- Total operating costs and expenses
114,759 61,814 201,376 118,654 ---------- ---------- ----------
---------- Operating income 682 4,802 5,544 9,015 Other income
(expense) (3,190) (2,306) (6,725) (4,357) ---------- ----------
---------- ---------- Net income (loss) $(2,508) $2,496 $(1,181)
$4,658 ========== ========== ========== ========== Maintenance
capital expenditures $2,416 $917 $2,944 $1,536 Expansion capital
expenditures 7,822 25,840 15,424 41,758 ---------- ----------
---------- ---------- Total capital expenditures $10,238 $26,757
$18,368 $43,294 ========== ========== ========== ==========
Operating Data: Inlet natural gas (Mcf/d) 246,339 212,595 236,885
206,376 Natural gas sales (MMBtu/d) 86,203 78,085 86,174 76,313 NGL
sales (Bbls/d) 5,979 4,304 5,626 4,146 Average realized natural gas
sales price ($/MMBtu) $9.29 $6.03 $8.29 $6.11 Average realized NGL
sales price ($/gallon) $1.64 $1.09 $1.53 $1.02 June 30, December
31, 2008 2007 ------------- ------------- (unaudited) Balance Sheet
Data (at period end): Property and equipment, at cost, net $322,477
$319,320 Total assets $428,923 $410,473 Long-term debt, net of
current maturities $244,795 $226,104 Net equity $115,789 $139,167
(A) Compression revenues and compression segment margin are the
same. There are no compression purchases associated with the
compression segment. Reconciliation of adjusted net income to net
income (loss): Three Months Ended Six Months Ended June 30, June
30, ---------------------- ---------------------- 2008 2007 2008
2007 ---------- ---------- ---------- ---------- (unaudited, in
(unaudited, in thousands) thousands) Reconciliation of Adjusted Net
Income to Net Income (Loss) Net income (loss) $(2,508) $2,496
$(1,181) $4,658 Non-cash loss (gain) on derivative transactions
1,534 (102) 1,935 (171) Non-cash compensation expense 392 167 763
345 Bad debt expense (SemGroup, L.P.) 8,103 - 8,103 - ----------
---------- ---------- ---------- Adjusted net income $7,521 $2,561
$9,620 $4,832 ========== ========== ========== ========== Adjusted
net income, a non-GAAP financial measure, is calculated as net
income (loss) adjusted for significant non-cash and non-recurring
items. Adjusted net income 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. Adjusted net income should not be considered as an
alternative to net income (loss) or any other measures of financial
performance presented in accordance with GAAP. Our adjusted net
income may not be comparable to adjusted net income or similarly
titled measures of other entities, as other entities may not
calculate adjusted net income in the same manner as we do.
Reconciliation of total segment margin to operating income: Three
Months Ended Six Months Ended June 30, June 30,
---------------------- ---------------------- 2008 2007 2008 2007
---------- ---------- ---------- ---------- (unaudited, in
(unaudited, in thousands) thousands) Reconciliation of Total
Segment Margin to Operating Income Operating income $682 $4,802
$5,544 $9,015 Add: Operations and maintenance expenses 7,551 4,980
14,320 9,950 Depreciation, amortization and accretion 9,169 7,039
18,098 13,779 Bad debt 8,103 - 8,103 - General and administrative
expenses 1,863 1,879 4,164 3,394 ---------- ---------- ----------
---------- Total segment margin $27,368 $18,700 $50,229 $36,138
========== ========== ========== ========== We view total segment
margin, a non-GAAP financial measure, as an important performance
measure of the core profitability of our operations. 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. Reconciliation of adjusted
EBITDA to net income (loss): Three Months Ended Six Months Ended
June 30, June 30, ---------------------- ----------------------
2008 2007 2008 2007 ---------- ---------- ---------- ----------
(unaudited, in (unaudited, in thousands) thousands) Reconciliation
of adjusted EBITDA to Net Income (Loss) Net income (loss) $(2,508)
$2,496 $(1,181) $4,658 Add: Depreciation, amortization and
accretion 9,169 7,039 18,098 13,779 Amortization of deferred loan
costs 145 88 279 176 Interest expense 3,116 2,307 6,617 4,393
---------- ---------- ---------- ---------- EBITDA 9,922 11,930
23,813 23,006 Add: Non-cash loss (gain) on derivative transactions
1,534 (102) 1,935 (171) Non-cash compensation expense 392 167 763
345 Bad debt expense (SemGroup, L.P.) 8,103 - 8,103 - ----------
---------- ---------- ---------- Adjusted EBITDA $19,951 $11,995
$34,614 $23,180 ========== ========== ========== ========== 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 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. 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, 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 Six Months Ended June 30, June 30,
---------------------- ---------------------- 2008 2007 2008 2007
---------- ---------- ---------- ---------- (unaudited, in
(unaudited, in thousands) thousands) Reconciliation of
Distributable Cash Flow to Net Income (Loss) Net income (loss)
$(2,508) $2,496 $(1,181) $4,658 Add: Depreciation, amortization and
accretion 9,169 7,039 18,098 13,779 Amortization of deferred loan
costs 145 88 279 176 Interest expense 3,116 2,307 6,617 4,393
---------- ---------- ---------- ---------- EBITDA 9,922 11,930
23,813 23,006 Add: Non-cash loss (gain) on derivative transactions
1,534 (102) 1,935 (171) Non-cash compensation expense 392 167 763
345 Bad debt expense (SemGroup, L.P.) 8,103 - 8,103 - ----------
---------- ---------- ---------- Adjusted EBITDA 19,951 11,995
34,614 23,180 Less: Cash interest expense 3,196 2,319 6,416 4,388
Maintenance capital expenditures 2,416 917 2,944 1,536 Payments on
capital lease 128 235 obligations - - Bad debt expense (SemGroup,
8,103 8,103 L.P.) - - ---------- ---------- ---------- ----------
Distributable cash flow $6,108 $8,759 $16,916 $17,256 ==========
========== ========== ========== 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
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). 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 Six Months
Ended June 30, June 30, ----------------------
---------------------- 2008 2007 2008 2007 ---------- ----------
---------- ---------- (unaudited, in (unaudited, in thousands)
thousands) Total Segment Margin Data: Midstream revenues $114,236
$65,411 $204,510 $125,259 Midstream purchases 88,073 47,916 156,691
91,531 ---------- ---------- ---------- ---------- Midstream
segment margin 26,163 17,495 47,819 33,728 Compression revenues (A)
1,205 1,205 2,410 2,410 ---------- ---------- ---------- ----------
Total segment margin (B) $27,368 $18,700 $50,229 $36,138 ==========
========== ========== ========== Summary of Operations Data:
Midstream revenues $114,236 $65,411 $204,510 $125,259 Compression
revenues 1,205 1,205 2,410 2,410 ---------- ---------- ----------
---------- Total revenues 115,441 66,616 206,920 127,669 Midstream
purchases (exclusive of items shown separately below) 88,073 47,916
156,691 91,531 Operations and maintenance 7,551 4,980 14,321 9,950
Depreciation, amortization and accretion 9,456 7,326 18,671 14,352
Bad debt 8,103 - 8,103 - General and administrative 2,333 2,285
5,017 4,330 Total operating costs and ---------- ----------
---------- ---------- expenses 115,516 62,507 202,803 120,163
---------- ---------- ---------- ---------- Operating income (75)
4,109 4,117 7,506 Other income (expense) (3,225) (2,331) (6,783)
(4,406) Income (loss) before minority interest in loss (income) of
Hiland Partners, LP (3,330) 1,778 (2,666) 3,100 Minority interest
in loss (income) of Hiland Partners, LP 2,192 (639) 2,398 (1,213)
---------- ---------- ---------- ---------- Net income (loss)
$(1,108) $1,139 $(268) $1,887 ========== ========== ==========
========== June 30, December 31, 2008 2007 ------------
------------- (unaudited) Balance Sheet Data (at period end):
Property and equipment, at cost, net $326,005 $323,073 Total assets
$438,456 $420,286 Long-term debt, net of current maturities
$245,150 $226,459 Minority interests $117,241 $126,409 Net equity
$7,316 $22,135 (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: Three Months Ended Six Months Ended
June 30, June 30, ---------------------- ----------------------
2008 2007 2008 2007 ---------- ---------- ---------- ----------
(unaudited, in (unaudited, in thousands) thousands) Reconciliation
of Total Segment Margin to Operating Income (Loss) Operating income
(loss) $(75) $4,109 $4,117 $7,506 Add: Operations and maintenance
expenses 7,551 4,980 14,321 9,950 Depreciation, amortization and
accretion 9,456 7,326 18,671 14,352 Bad debt expense 8,103 - 8,103
- General and administrative expenses 2,333 2,285 5,017 4,330
---------- ---------- ---------- ---------- Total segment margin
$27,368 $18,700 $50,229 $36,138 ========== ========== ==========
========== We view total segment margin, a non-GAAP financial
measure, as an important performance measure of the core
profitability of our operations. 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.
DATASOURCE: Hiland Partners, LP; Hiland Holdings GP, LP CONTACT:
Derek Gipson, Director - Business Development and Investor
Relations of Hiland Partners, LP, +1-580-242-6040 Web site:
http://www.hilandpartners.com/
Copyright
Hiland Holdings GP, LP (MM) (NASDAQ:HPGP)
Historical Stock Chart
From Jun 2024 to Jul 2024
Hiland Holdings GP, LP (MM) (NASDAQ:HPGP)
Historical Stock Chart
From Jul 2023 to Jul 2024