Atlas Pipeline Partners 8-K Pro Forma Financial Statements

EXHIBIT 99.1

PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma condensed consolidated financial statements reflect Atlas Pipeline Partners, L.P.’s (“the Partnership”) historical results as adjusted on a pro forma basis to give effect to its February 2011 disposition of its indirect 49% ownership interest in Laurel Mountain, LLC (“Laurel Mountain”) and the associated repayment of debt from the net proceeds of the disposition. The estimated adjustments to give effect to the Partnership’s disposition of its indirect ownership interest in Laurel Mountain and the associated repayment of debt from the net proceeds of the disposition are described in the notes to the unaudited pro forma financial statements.

The unaudited pro forma condensed consolidated balance sheet information reflects the Partnership’s disposition of its indirect ownership interest in Laurel Mountain as if it occurred as of September 30, 2010, and the unaudited pro forma condensed consolidated statement of operations for the nine months ended September 30, 2010 and twelve months ended December 31, 2009 reflect the transaction as if it occurred as of the beginning of each respective period.

The unaudited pro forma condensed consolidated balance sheet and the pro forma condensed consolidated statements of operations were derived by adjusting the Partnership’s historical consolidated financial statements. Management believes that the adjustments provide a reasonable basis for presenting the significant effects of the transaction described above. The unaudited pro forma financial data presented are based upon available information and assumptions that management believes are reasonable under the circumstances. You should not construe the unaudited pro forma financial data as indicative of the financial position or results of operations that the Partnership would have achieved had the transaction been consummated on the dates assumed. Moreover, they do not purport to represent the Partnership’s consolidated financial position or results of operations for any future date or period.

ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)

September 30, 2010

(in thousands)

	Historical			Laurel Mountain Disposition			Laurel Mountain Disposition Adjustments			Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	166			—		$	397,775	(a)	$	385,941
								(12,000	)(b)
Accounts receivable		59,421			—			—			59,421
Current portion of derivative asset		3,611			—			—			3,611
Prepaid expenses and other		14,852			—			—			14,852
Total current assets		78,050			—			385,775			463,825
Property, plant and equipment, net		1,339,730			—			—			1,339,730
Intangible assets, net		132,154			—			—			132,154
Investment in joint venture		135,765			(127,265	)		(8,500	)(d)		—
Other assets, net		23,564			—			8,500	(d)		32,064
	$	1,709,263		$	(127,265	)	$	385,775		$	1,967,773
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Current portion of long-term debt	$	206		$	—		$	—		$	206
Accounts payable - affiliates		10,391			—			—			10,391
Accounts payable		9,919			—			—			9,919
Accrued liabilities		32,443			—			—			32,443
Accrued interest payable		12,340			—			—			12,340
Current portion of derivative liability		1,511			—			—			1,511
Accrued producer liabilities		58,143			—			—			58,143
Total current liabilities		124,953			—			—			124,953
Long-term derivative liability		5,770			—			—			5,770
Long-term debt, less current portion		507,676			—			(12,000	)(b)		495,676
Other long-term liability		266			—			—			266
Commitments and contingencies
Equity:
Class B preferred limited partner’s interest		14,955			—			—			14,955
Class C preferred limited partner’s interest		8,000			—			—			8,000
Common limited partners’ interests		1,087,649			—			265,370	(a)		1,353,019
Equity		—			(127,265	)		127,265	(a)		—
Investment in Class B cumulative preferred Member units of Atlas Pipeline Holdings II, LLC (reported as treasury units)		(15,000	)		—			—			(15,000	)
General partner’s interest		20,341			—			5,140	(a)		25,481
Accumulated other comprehensive loss		(13,635	)		—			—			(13,635	)
Total partners’ capital		1,102,310			(127,265	)		397,775			1,372,820
Non-controlling interest		(31,712	)		—			—			(31,712	)
Total equity		1,070,598			(127,265	)		397,775			1,341,108
	$	1,709,263		$	(127,265	)	$	385,775		$	1,967,773

See accompanying notes to unaudited condensed consolidated financial statements

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ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010

(in thousands, except per unit data)

	Historical			Laurel Mountain Disposition			Laurel Mountain Disposition Adjustments			Pro Forma
Revenue:
Natural gas and liquids – third parties	$	641,978		$	—		$	—		$	641,978
Transportation, processing and other fees – affiliates		472			—			—			472
Transportation, processing and other fees – third parties		29,472			—			—			29,472
Other income, net – third parties		10,576			—			—			10,576
Total revenue and other income, net		682,498			—			—			682,498
Costs and expenses:
Natural gas and liquids – third parties		521,495			—			—			521,495
Plant operating		36,492			—			—			36,492
Transportation and compression		721			—			—			721
General and administrative		22,396			—			—			22,396
Compensation reimbursement – affiliates		1,125			—			—			1,125
Depreciation and amortization		55,647			—			—			55,647
Interest		78,444			—			(621	)(c)		77,823
Total costs and expenses		716,320			—			(621	)		715,699
Equity income in joint venture		4,137			(4,137	)		—			—
Income (loss) from continuing operations		(29,685	)		(4,137	)		621			(33,201	)
Income attributable to non-controlling interests		(3,338	)		—			—			(3,338	)
Preferred unit dividend effect		(240	)		—			—			(240	)
Net income (loss) from continuing operations attributable to common limited partners and the General Partner	$	(33,263	)	$	(4,137	)	$	621		$	(36,779	)
Allocation of net loss from continuing operations:
Common limited partner interest	$	(32,627	)							$	(36,077	)
General Partner interest		(636	)								(702	)
Net loss from continuing operations	$	(33,263	)							$	(36,779	)
Net loss attributable to common limited partners per unit:
Basic	$	(0.61	)							$	(0.68	)
Diluted	$	(0.61	)							$	(0.68	)
Weighted average common limited partner units outstanding:
Basic		53,115									53,115
Diluted		53,115									53,115

See accompanying notes to unaudited condensed consolidated financial statements

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ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2009

(in thousands, except per unit data)

	Historical			Laurel Mountain Disposition			Laurel Mountain Disposition Adjustments			Pro Forma
Revenue:
Natural gas and liquids – third parties	$	671,078		$	(587	)	$	—		$	670,491
Transportation, processing and other fees – affiliates		17,536			(16,882	)		—			654
Transportation, processing and other fees – third parties		5,593			(114	)		—			5,479
Other income, net – third parties		(21,602	)		—			—			(21,602	)
Total revenue and other income, net		672,605			(17,583	)		—			655,022
Costs and expenses:
Natural gas and liquids – third parties		527,730			(260	)		—			527,470
Plant operating		45,566			—			—			45,566
Transportation and compression		6,657			(5,765	)		—			892
General and administrative		34,549			(8	)		—			34,541
Compensation reimbursement – affiliates		2,731			—			—			2,731
Depreciation and amortization		75,684			(3,006	)		—			72,678
Goodwill and other asset impairment		10,325			—			—			10,325
Interest		103,787			—			(600	)(c)		103,187
Total costs and expenses		807,029			(9,039	)		(600	)		797,390
Equity income in joint venture		4,043			(4,043	)		—			—
Gain (loss) on asset sale		108,947			(108,947	)		—			—
Income (loss) from continuing operations		(21,434	)		(121,534	)		600			(142,368	)
Income attributable to non-controlling interests		(3,176	)		—			—			(3,176	)
Preferred unit dividend effect		(900	)		—			—			(900	)
Net income (loss) from continuing operations attributable to common limited partners and the General Partner	$	(25,510	)	$	(121,534	)	$	600		$	(146,444	)
Allocation of net loss from continuing operations:
Common limited partner interest	$	(24,997	)							$	(143,500	)
General Partner interest		(513	)								(2,944	)
Net loss from continuing operations	$	(25,510	)							$	(146,444	)
Net loss attributable to common limited partners per unit:
Basic	$	(0.52	)							$	(2.97	)
Diluted	$	(0.52	)							$	(2.97	)
Weighted average common limited partner units outstanding:
Basic		48,299									48,299
Diluted		48,299									48,299

See accompanying notes to unaudited condensed consolidated financial statements

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ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(a) To reflect the Partnership’s proceeds from the February 2011 disposition of its indirect 49% ownership interest in Laurel Mountain of $403.0 million, exclusive of working capital adjustments and including estimated transactional costs of approximately $5.2 million; and to record an estimated gain of $270.5 million on the disposition of its indirect 49% ownership interest in Laurel Mountain, which was allocated to partners’ capital on the Partnership’s condensed consolidated balance sheet upon its equity interests and non-controlling interests.

(b) To reflect the $12.0 million repayment of outstanding borrowings at September 30, 2010 under the Partnership’s senior secured credit facility with a portion of the net proceeds received from the Partnership’s disposition of its indirect 49% ownership interest in Laurel Mountain.

(c) To reflect the adjustment to interest expense for the Partnership’s repayment of $12.0 million of its senior secured credit facility borrowings from the net proceeds of the disposition of its indirect 49% ownership interest in Laurel Mountain. The weighted average historical interest rates utilized for the interest expense adjustment were 6.9% for the nine months ended September 30, 2010 and 5.0% for the year ended December 31, 2009.

(d) As of September 30, 2010, the Partnership had $8.5 million of the $25.5 million note receivable remaining to fund capital contributions to Laurel Mountain, which is included in the investment in joint venture on the consolidated balance sheet. The Partnership retained the $8.5 million note receivable upon disposition of its indirect 49% ownership interest in Laurel Mountain.

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