Resources Connection 8-K Changes in Control of Registrant

Exhibit 99.1 – Selected Financial Data

The historical financial information presented below for the Partnership and our predecessors, Regency LLC Predecessor and Regency Gas Services LP (formerly Regency Gas Services LLC), was derived from our audited consolidated financial statements as of December 31, 2005 and 2004 and for the year ended December 31, 2005, the one month period ended December 31, 2004, the eleven months period ended November 30, 2004, the year ended December 31, 2003, the six months ended June 30, 2006 and the six months ended June 30, 2005. The consolidated financial statements and notes have been adjusted to reflect the results of operations, financial position and cash flows of the Partnership combined with TexStar Field Services, L.P., and TexStar GP, LLC (together “TexStar”) for all periods subsequent to December 1, 2004.

The Partnership’s and our predecessors’, Regency LLC Predecessor and Regency Gas Services LP, historical results of operations for the periods presented below may not be comparable, either from period to period or going forward, for the following reasons:

§	Regency Gas Services LLC was formed on April 2, 2003 and commenced operations on June 2, 2003 with the acquisition of certain natural gas gathering, processing and transportation assets from subsidiaries of El Paso Corporation. As a result, we do not have any financial results for periods prior to April 2, 2003 and our results of operations for the period ended December 31, 2003 includes only seven months of financial results.
§	On March 1, 2004, Regency Gas Services LLC acquired certain natural gas gathering and processing assets from Duke Energy Field Services, LP. As a result, our historical financial results for the periods prior to March 1, 2004 do not include the financial results from the operation of these assets.
§	In connection with the acquisition of Regency Gas Services LLC by the HM Capital Investors on December 1, 2004, the purchase price was “pushed-down” to the financial statements of Regency Gas Services LLC. As a result of this “push-down” accounting, the book basis of our assets was increased to reflect the purchase price, which had the effect of increasing our depreciation expense. Also, the increased amount of debt we incurred in connection with the acquisition increased our interest expense subsequent to December 1, 2004.
§	After our acquisition by the HM Capital Investors, we initiated a risk management program comprised of commodity swaps and crude oil puts that we accounted for using mark-to-market accounting from December 1, 2004 through June 30, 2005. Under mark-to market accounting, changes in the fair value of these instruments are recorded in earnings. On July 1, 2005 we elected hedge accounting for our commodity and interest rate swaps, in accordance with Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities.” Changes in the fair value of these qualifying instruments are recorded in Other Comprehensive Income.
§	In response to transmission capacity constraints in north Louisiana, we significantly expanded and extended our pipeline assets in this region, increasing our capacity to 800 MMcf/d from 200 MMcf/d and increasing the length of the pipeline to 280 miles from 200 miles. The total cost of the project, which was completed in December 2005, was approximately $157 million.
§	The TexStar Acquisition is a transaction between commonly controlled entities; therefore, we accounted for this acquisition in a manner similar to a pooling of interests. As a result, the historical financial statements of the Partnership and TexStar have been combined to reflect the historical operations, financial position and cash flows during the periods in which common control existed, December 1, 2004 forward. Most of the TexStar operating activity occurred in December 2005. As a result, the TexStar historical operations, financial position and cash flows are not comparable to prior periods.
§	TexStar Field Services, L.P. acquired two sulfur recovery plants, one NGL plant and 758 miles of pipelines from Enbridge Pipelines (NE Texas), LP, Enbridge Pipeline (Texas IntraState), LP and Enbridge Pipelines (Texas Gathering), LP (collectively “Enbridge”) on December 7, 2005. As a result, our historical results for the periods prior to December 1, 2005 do not include the financial results from the operation of these assets.

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We refer to Regency Gas Services LLC as “Regency LLC Predecessor” for periods prior to the acquisition by the HM Capital Investors.

The following table includes the non-GAAP financial measures of EBITDA and total segment margin. We define EBITDA as net income plus interest expense, provision for income taxes and depreciation and amortization expense. We define total segment margin as total revenue, including service fees, less cost of gas and liquids. For a reconciliation of EBITDA and total segment margin to their most directly comparable financial measures calculated and presented in accordance with GAAP (accounting principles generally accepted in the United States), please read “— Non-GAAP Financial Measures.”

	Regency Energy Partners LP												Regency LLC Predecessor
										Period from						Period from
	Six Months			Six Months						Acquisition			Period from			Inception
	Ended			Ended			Year Ended			(December 1, 2004) to			January 1, 2004 to			(April 2, 2003) to
	June 30, 2006			June 30, 2005			December 31, 2005			December 31, 2004			November 30, 2004			December 31, 2003
							(in thousands except per unit data)
Statement of Operations Data:
Total revenue(1)	$	445,924		$	244,894		$	709,401		$	47,857		$	432,321		$	186,533
Total expense
Cost of gas and liquids		373,497			218,540			632,342			40,987			362,762			163,461
Operating expenses		17,827			10,789			24,291			1,819			17,786			7,012
General and administrative		12,339			6,150			15,039			645			6,571			2,651
Related party expenses		1,266			132			523			—			—			—
Management services termination fee		9,000			—			—			—			—			—
Transaction expenses		—			—			—			—			7,003			724
Depreciation and amortization		18,547			10,555			23,171			1,661			10,129			4,324
Total operating expenses		432,476			246,166			695,366			45,112			404,251			178,172
Operating income		13,448			(1,272	)		14,035			2,745			28,070			8,361
Other income and deductions
Interest expense, net		(16,390	)		(8,227	)		(17,880	)		(1,335	)		(5,097	)		(2,392	)
Loss on debt refinancing		—			—			(8,480	)		—			(3,022	)		—
Equity income		220			156			312			56			—			—
Other income and deductions, net		163			62			421			8			186			205
Total other income and deductions		(16,007	)		(8,009	)		(25,627	)		(1,271	)		(7,933	)		(2,187	)
Net income (loss) from continuing operations		(2,559	)		(9,281	)		(11,592	)		1,474			20,137			6,174
Discontinued operations		—			747			732			—			(121	)		—
Net income (loss)	$	(2,559	)	$	(8,534	)	$	(10,860	)	$	1,474		$	20,016		$	6,174
Less:
Net income through January 31, 2006		1,564
Net loss for partners	$	(4,123	)
General partner interest	$	(82	)
Limited partner interest	$	(4,041	)
Basic net income per limited partner unit	$	(0.09	)
Diluted net income per limited partner unit	$	(0.09	)
Balance Sheet Data (at period end):
Property, plant and equipment, net	$	641,569					$	609,157		$	328,784					$	118,986
Total assets		823,743						806,740			492,170						164,330
Long-term debt (long-term portion only)		468,000						428,250			248,000						55,387
Net equity		226,403						230,962			181,936						59,856
Cash Flow Data:
Net cash flows provided by (used in):
Operating activities	$	24,728		$	13,746		$	37,340		$	(4,311	)	$	32,401		$	6,494
Investing activities		(61,018	)		(27,434	)		(279,963	)		(130,478	)		(84,721	)		(123,165	)
Financing activities		39,127			22,682			242,949			132,515			56,380			118,245
Other Financial Data:
Total segment margin(1)	$	72,427		$	26,354		$	77,059		$	6,870		$	69,559		$	23,072
EBITDA(1)		32,378			10,248			30,191			4,470			35,242			12,890
Maintenance capital expenditures		12,410			6,200			9,158			358			5,548			1,633
Segment Financial and Operating Data:
Gathering and Processing Segment:
Financial data:
Segment margin(1)	$	51,822		$	20,391		$	61,387		$	6,262		$	61,347		$	18,805
Operating expenses		15,578			10,042			22,362			1,655			16,230			6,131
Operating data:
Natural gas throughput (MMbtu/d)		413,668			336,022			345,398			314,812			303,345			211,474
NGL gross production (Bbls/d)		15,703			15,895			14,883			16,321			14,487			9,434
Transportation Segment:
Financial data:
Segment margin	$	20,605		$	5,963		$	15,672		$	608		$	8,212		$	4,267
Operating expenses		2,249			747			1,929			164			1,556			881
Operating data:
Throughput (MMbtu/d)		518,220			209,774			258,194			161,584			192,236			211,569

(1) Includes $322,000 of unrealized gains on hedging transactions for the one month ended December 31, 2004 and $9,530,000 of unrealized losses on hedging transactions for the year ended December 31, 2005.

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Non-GAAP Financial Measures

We include the following non-GAAP financial measures: EBITDA and total segment margin. We provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measures as calculated and presented in accordance with GAAP.

We define EBITDA as net income plus interest expense, provision for income taxes and depreciation and amortization expense. EBITDA is used as a supplemental measure by our management and by external users of our financial statements such as investors, commercial banks, research analysts and others, to assess:

§	financial performance of our assets without regard to financing methods, capital structure or historical cost basis;
§	the ability of our assets to generate cash sufficient to pay interest costs, support our indebtedness and make cash distributions to our unitholders and general partner;
§	our operating performance and return on capital as compared to those of other companies in the midstream energy sector, without regard to financing methods or capital structure; and
§	the viability of acquisitions and capital expenditure projects and the overall rates of return on alternative investment opportunities.

EBITDA should not be considered an alternative to net income, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP.

EBITDA does not include interest expense, income taxes or depreciation and amortization expense. Because we have borrowed money to finance our operations, interest expense is a necessary element of our costs and our ability to generate cash available for distribution. Because we use capital assets, depreciation and amortization are also necessary elements of our costs. Therefore, any measures that exclude these elements have material limitations. To compensate for these limitations, we believe that it is important to consider both net earnings determined under GAAP, as well as EBITDA, to evaluate our performance.

We define total segment margin as total revenues, including service fees, less cost of gas and liquids. Total segment margin is included as a supplemental disclosure because it is a primary performance measure used by our management as it represents the results of product sales, service fee revenues and product purchases, a key component of our operations. We believe total segment margin is an important measure because it is directly related to our volumes and commodity price changes. Operating expenses are a separate measure used by management to evaluate operating performance of field operations. Direct labor, insurance, property taxes, repair and maintenance, utilities and contract services comprise the most significant portion of our operating expenses. These expenses are largely independent of the volumes we transport or process and fluctuate depending on the activities performed during a specific period. We do not deduct operating expenses from total revenues in calculating total segment margin because we separately evaluate commodity volume and price changes in total segment margin. As an indicator of our operating performance, total segment margin should not be considered an alternative to, or more meaningful than, net income as determined in accordance with GAAP. Our total segment margin may not be comparable to a similarly titled measure of another company because other entities may not calculate total segment margin in the same manner.

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	Regency Energy Parnters LP												Regency LLC Predecessor
										Period from						Period from
	Six Month			Six Month						Acquisition Date			Period from			Inception
	Ended			Ended			Year Ended			(December 1, 2004)			January 1, 2004 to			(April 2, 2003) to
	June 30, 2006			June 30, 2005			December 31, 2005			to December 31, 2004			November 30, 2004			December 31, 2003
										(in thousands)
Reconciliation of “EBITDA” to net cash flows provided by (used in) operating activities and to net (loss) income
Net cash flows provided by (used in) operating activities		24,728			13,746		$	37,340		$	(4,311	)	$	32,401		$	6,494
Add (deduct):
Depreciation and amortization		(18,975	)		(11,232	)		(24,286	)		(1,793	)		(10,461	)		(4,658	)
Equity income		220			156			312			56			—			—
Loss on debt refinancing		—			—			(8,480	)		—			(3,022	)		—
Risk management portfolio value changes		811			(13,337	)		(11,191	)		322			—			—
Unit based compensation expenses		(1,089	)		—			—			—			—			—
Gain on the sale of Regency Gas Treating LP assets		—			626			626			—			—			—
Gain on the sale of NGL line pack		—			—			628			—			—			—
Accounts receivable		(13,973	)		(4,119	)		42,738			(2,568	)		20,408			31,390
Related party receivable		203			460			274			—			(576	)		576
Other current assets		(109	)		506			2,644			2,456			1,169			1,070
Accounts payable and accrued liabilities		11,363			3,429			(49,780	)		(39	)		(18,122	)		(26,880	)
Related party payable		380			397			(2,871	)		(509	)		—			—
Accrued taxes payable		(921	)		(287	)		(806	)		921			(1,475	)		(906	)
Other current liabilities		735			574			(1,269	)		242			(502	)		(917	)
Proceeds from early termination of interest rate swap		(3,550	)		—			—			—			—			—
Other assets		(2,382	)		547			3,261			6,697			196			5
Net (loss) income	$	(2,559	)	$	(8,534	)	$	(10,860	)	$	1,474		$	20,016		$	6,174
Add:
Interest expense, net		16,390			8,227			17,880			1,335			5,097			2,392
Depreciation and amortization		18,547			10,555			23,171			1,661			10,129			4,324
EBITDA (1)	$	32,378		$	10,248		$	30,191		$	4,470		$	35,242		$	12,890
Reconciliation of “total segment margin” to net (loss) income
Net (loss) income	$	(2,559	)	$	(8,534	)	$	(10,860	)	$	1,474		$	20,016		$	6,174
Add (deduct):
Operating expenses		17,827			10,789			24,291			1,819			17,786			7,012
General and administrative		12,339			6,150			15,039			645			6,571			2,651
Related party expenses		1,266			132			523			—			—			—
Management services termination fee		9,000			—			—			—			—			—
Transaction expenses		—			—			—			—			7,003			724
Depreciation and amortization		18,547			10,555			23,171			1,661			10,129			4,324
Interest expense, net		16,390			8,227			17,880			1,335			5,097			2,392
Equity income		(220	)		(156	)		(312	)		(56	)		—			—
Loss on debt refinancing		—			—			8,480			—			3,022			—
Other income and deductions, net		(163	)		(62	)		(421	)		(8	)		(186	)		(205	)
Discontinued operations		—			(747	)		(732	)		—			121			—
Total segment margin (1)	$	72,427		$	26,354		$	77,059		$	6,870		$	69,559		$	23,072

(1) Includes $322,000 of unrealized gains on hedging transactions for the one month ended December 31, 2004, $9,530,000 of unrealized losses on hedging transactions for the year ended December 31, 2005.

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