Resources Connection 8-K/A Unaudited Pro Forma Combined Financial Statements

Exhibit 99.1

Unaudited Pro Forma Combined Financial Statements

These unaudited pro forma combined financial statements have been prepared to reflect the acquisition of FrontStreet Hugoton LLC and Subsidiary (“FrontStreet”) by Regency Energy Partners LP (the “Partnership”).  The Partnership applied the guidance of Statement of Financial Accounting Standard No. 141, “Business Combinations.”  The pro forma adjustments, which were prepared applying the rules established by the Securities and Exchange Commission in Article 11 of Regulation S-X, have been applied to the combined financial statements presented in accordance with Rule 3-05 of Regulation S-X.

On January 7, 2008, the Partnership acquired FrontStreet for a total consideration consisting of (1) the issuance of 4,701,034 Class E common units of the Partnership and (2) the payment of an aggregate of $11,752,000 in cash.  Because the FrontStreet acquisition is a transaction between commonly controlled entities (i.e., the buyer and the sellers were each affiliates of General Electric Capital Corporation), the Partnership will be required to account for the acquisition in a manner similar to the pooling of interest method of accounting.  Under this method of accounting, the Partnership will reflect historical balance sheet data for both the Partnership and FrontStreet instead of reflecting the fair market value of FrontStreet’s assets and liabilities.  Further, as a result of this method of accounting, certain transaction costs that would normally be capitalized will be expensed.

The balance sheet reflects the FrontStreet acquisition and the pro forma adjustments as though they occurred on September 30, 2007, while the statements of operations reflect the FrontStreet acquisition and the pro forma adjustments as though they occurred as of the beginning of the period for the statements of operations for the year ended December 31, 2006 and the nine month interim period ended September 30, 2007.

The historical financial information included in the columns entitled “Partnership” was derived from the unaudited financial statements included in our Quarterly Report on Form 10-Q for the nine months ended September 30, 2007 and audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2006.  The historical financial information included in the columns entitled “Pueblo” were derived from our Amended Current Reports on Form 8-K/A filed on May 10, 2007 and June 12, 2007.  The historical financial information in the columns entitled CDM were derived from our Amended Current Reports on Form 8-K/As filed on February 12, 2008.  The historical financial information included in the columns entitled “FrontStreet Hugoton,” were derived from FrontStreet’s audited consolidated financial statements included in this Current Report at Exhibit 99.2 or from FrontStreet’s unaudited consolidated financial statements included in this Current Report at Exhibit 99.3.

The unaudited pro forma combined financial statements are based on assumptions that the Partnership believes are reasonable under the circumstances and are intended for informational purposes only.  Actual results may differ from the estimates and assumptions used.  They are not necessarily indicative of the financial results that would have occurred if the FrontStreet acquisition had taken place on the dates indicated, nor are they indicative of the future consolidated results.

Regency Energy Partners LP

Unaudited Pro Forma Combined Balance Sheet

September 30, 2007

(in thousands except unit data)

	Pro Forma Partnership			FrontStreet Hugoton			Pro Forma Adjustments				Pro Forma Combined
ASSETS
Current Assets:
Cash and cash equivalents	$	58,998		$	3,409		$	11,752		a	$	62,407
								(11,752	)	b
Restricted cash		5,975			-			-				5,975
Accrued revenues and accounts receivable, net of allowance of $248		126,829			4,590			-				131,419
Related party receivables		143			-			-				143
Other current assets		11,584			182			-				11,766
Total current assets		203,529			8,181			-				211,710
												-
Property, plant and equipment:												-
Gas plants and buildings		123,356			-			-				123,356
Gathering and transmission systems		1,029,879			100,271			-				1,130,150
Other property, plant and equipment		107,502			-			-				107,502
Construction - in - progress		91,295			29,406			-				120,701
Total property, plant and equipment		1,352,032			129,677			-				1,481,709
Less accumulated depreciation		(91,199	)		(34,988	)		-				(126,187	)
Property, plant and equipment, net		1,260,833			94,689			-				1,355,522
Other assets:
Intangible assets, net of amortization of $7,879		78,854			-			-				78,854
Other, net of amortization on debt issuance costs of $2,348		21,981			-			-				21,981
Goodwill		306,142			-			-				306,142
Total other assets		406,977			-			-				406,977
TOTAL ASSETS	$	1,871,339		$	102,870		$	-			$	1,974,209
LIABILITIES & PARTNERS' CAPITAL OR MEMBERS' EQUITY
Current Liabilities:
Accounts payable, accrued cost of gas and accrued liabilities	$	141,795		$	5,486		$	-			$	147,281
Related party payables		17			-			-				17
Escrow payable		5,976			-			-				5,976
Accrued taxes payable		6,416			-			-				6,416
Liabilities from risk management activities		19,872			-			-				19,872
Interest payable		8,647			-			-				8,647
Other current liabilities		7,633			-			-				7,633
Total current liabilities		190,356			5,486			-				195,842
Long-term liabilities from risk management activities		7,369			-			-				7,369
Other long-term liabilities		15,687			-			-				15,687
Long-term debt		931,500			-			11,752		a		943,252
Commitments and contingencies
Partners' Capital or Members' Equity
Common units (42,096,786 units authorized and 40,494,334 units issued and
outstanding at September 30, 2007)		504,512			-			-				504,512
Subordinated units (19,103,896 units authorized, issued and outstanding
at September 30, 2007)		13,264			-			-				13,264
Class D common units (7,276,506 units authorized, issued and outstanding
at September 30, 2007)		216,869			-			-				216,869
Class E common units (4,701,034 units authorized, issued and outstanding
at September 30, 2007)		-			-			85,632		b		85,632
General partner interest		16,378			-							16,378
Members' equity		-			97,384			(97,384	)	b		-
Accumulated other comprehensive loss		(24,596	)		-			-	��			(24,596	)
Total partners' capital or members' equity		726,427			97,384			(11,752	)			812,059
TOTAL LIABILITIES & PARTNERS' CAPITAL OR MEMBERS' EQUITY	$	1,871,339		$	102,870		$	-			$	1,974,209
See accompanying notes to unaudited pro forma combined financial statements

Regency Energy Partners LP

Unaudited Pro Forma Combined Balance Sheet

September 30, 2007

(in thousands except unit data)

							Pro Forma				Pro Forma
	Partnership			CDM			Adjustments				Partnership
ASSETS
Current Assets:
Cash and cash equivalents	$	21,304		$	1,444		$	473,732		c	$	58,998
								(280,194	)	d
								(161,945	)	e
								4,657		f
Restricted cash		5,975			-			-				5,975
Accrued revenues and accounts receivable, net of allowance of $248		115,764			11,065			-				126,829
Related party receivables		143			-			-				143
Other current assets		4,895			6,689			-				11,584
Total current assets		148,081			19,198			36,250				203,529
Property, plant and equipment:
Gas plants and buildings		123,356			-			-				123,356
Gathering and transmission systems		635,627			315,350			66,401		e		1,029,879
								12,501		d
Other property, plant and equipment		93,893			13,609			-				107,502
Construction - in - progress		47,530			43,765			-				91,295
Total property, plant and equipment		900,406			372,724			78,902				1,352,032
Less accumulated depreciation		(91,199	)		(29,306	)		29,306		e		(91,199	)
Property, plant and equipment, net		809,207			343,418			108,208				1,260,833
Other assets:
Intangible assets, net of amortization of $7,879		78,854			-			-				78,854
Other, net of amortization on debt issuance costs of $2,348		12,821			7,314			1,846		c		21,981
Goodwill		94,149			2,138			(2,138	)	e		306,142
								208,993		e
								3,000		e
Total other assets		185,824			9,452			211,701				406,977
TOTAL ASSETS	$	1,143,112		$	372,068		$	356,159			$	1,871,339
LIABILITIES & PARTNERS' CAPITAL
Current Liabilities:
Accounts payable, accrued cost of gas and accrued liabilities	$	117,450		$	21,345		$	3,000		e	$	141,795
Related party payables		17			-			-				17
Escrow payable		5,976			-			-				5,976
Accrued taxes payable		6,146			270			-				6,416
Liabilities from risk management activities		19,872			-			-				19,872
Interest payable		9,069			1,706			(422	)	c		8,647
								(1,706	)	d
Other current liabilities		1,125			8,248			(1,740	)	d		7,633
Total current liabilities		159,655			31,569			(868	)			190,356
Long-term liabilities from risk management activities		7,369			-			-				7,369
Other long-term liabilities		15,687			11,259			(11,259	)	d		15,687
Long-term debt		455,500			252,988			476,000		c		931,500
								(252,988	)	d
Commitments and contingencies
Partners' Capital:
Partners' capital, net of related party receivable of $3,000					76,252			(76,252	)	e		-
Common units (42,096,786 units authorized and 40,494,334 units issued and
outstanding at September 30, 2007)		504,512						-				504,512
Subordinated units (19,103,896 units authorized, issued and outstanding
at September 30, 2007)		13,264			-			-				13,264
Class D common units (7,276,506 units authorized, issued and outstanding
at September 30, 2007)		-			-			216,869		e		216,869
General partner interest		11,721			-			4,657		f		16,378
Accumulated other comprehensive loss		(24,596	)		-			-				(24,596	)
Total partners' capital		504,901			76,252			145,274				726,427
TOTAL LIABILITIES & PARTNERS' CAPITAL	$	1,143,112		$	372,068		$	356,159			$	1,871,339
See accompanying notes to unaudited pro forma combined financial statements

Regency Energy Partners LP

Unaudited Pro Forma Combined Statements of Operations

December 31, 2006

(in thousands except unit data and per unit data)

	Pro Forma Partnership			FrontStreet Hugoton		Pro Forma Adjustments				Pro Forma Combined
REVENUE
Gas sales	$	565,268		$	-	$	-			$	565,268
NGL sales		265,609			-		-				265,609
Gathering, transportation and other fees, including related party
amount of $2,160		132,443			40,463		-				172,906
Net unrealized and realized loss from risk management activities		(8,883	)		-		-				(8,883	)
Other		24,398			-		-				24,398
Total revenue		978,835			40,463		-				1,019,298
OPERATING COSTS AND EXPENSES
Cost of gas and liquids including related party expense $1,630		748,371			-		-				748,371
Operation and maintenance		74,579			25,691		-				100,270
General and administrative		31,041			359		-				31,400
Management services termination fee		12,542			-		-				12,542
Transaction expenses		2,041			-		-				2,041
Depreciation and amortization		53,317			6,671		-				59,988
Total operating costs and expenses		921,891			32,721		-				954,612
OPERATING INCOME		56,944			7,742		-				64,686
OTHER INCOME AND DEDUCTIONS
Interest expense, net		(66,939	)		-		(905	)	g		(67,844	)
Equity income		532			-		-				532
Loss on debt refinancing		(10,761	)		-		-				(10,761	)
Other income and deductions, net		1,111			229		-				1,340
NET INCOME (LOSS)		(19,113	)		7,971		(905	)			(12,047	)
Less:
Net income from January 1-31, 2006		1,564			-		-				1,564
Net income (loss) for partners		(20,677	)		7,971		(905	)		$	(13,611	)
General partner's interest		(414	)		159		(18	)	o		(272	)
Beneficial conversion feature for Class C common units		3,587			-		-				3,587
Limited partners' interest	$	(23,850	)	$	7,812	$	(887	)		$	(16,926	)
Basic and diluted earnings per unit:
Amount allocated to common and subordinated units	$	(22,123	)						h	$	(15,701	)
Weighted average common and subordinated units outstanding		38,959,389									38,959,389
Loss per common and subordinated unit	$	(0.57	)							$	(0.40	)
Distributions declared per unit	$	0.9417								$	0.9417
Amount allocated to Class B common units	$	(1,727	)						h	$	(1,225	)
Weighted average Class B common units outstanding		5,173,189									5,173,189
Loss per Class B common unit	$	(0.33	)							$	(0.24	)
Distributions declared per unit	$	-								$	-
Amount allocated to Class C common units	$	3,587							h	$	3,587
Total Class C common units outstanding		2,857,143									2,857,143
Income per Class C common unit due to beneficial conversion feature	$	1.26								$	1.26
Distributions declared per unit	$	-								$	-
Amount allocated to Class D common units	$	-								$	-
Weighted average Class D common units outstanding		7,276,506									7,276,506
Loss per Class D common unit	$	-								$	-
Distributions declared per unit	$	-								$	-
Amount allocated to Class E common units	$	-								$	-
Weighted average Class E common units outstanding		-									4,701,034
Loss per Class E common unit	$	-								$	-
Distributions declared per unit	$	-								$	-
See accompanying notes to unaudited pro forma combined financial statements

Regency Energy Partners LP

Unaudited Pro Forma Combined Statements of Operations

December 31, 2006

(in thousands except unit data and per unit data)

										Pro Forma				Pro Forma
	Partnership			Pueblo			CDM			Adjustments				Partnership
REVENUE
Gas sales	$	560,620		$	4,648		$	-		$	-			$	565,268
NGL sales		256,672			8,937			-			-				265,609
Gathering, transportation and other fees, including related party
amount of $2,160		63,071			1,682			67,690			-				132,443
Net unrealized and realized loss from risk management activities		(7,709	)		(1,174	)		-			-				(8,883	)
Other		24,211			187			-			-				24,398
Total revenue		896,865			14,280			67,690			-				978,835
OPERATING COSTS AND EXPENSES
Cost of gas and liquids including related party expense $1,630		740,446			7,925			-			-				748,371
Operation and maintenance		39,496			2,321			32,762			-				74,579
General and administrative		22,826			848			8,153			(786	)	l		31,041
Management services termination fee		12,542			-			-			-				12,542
Transaction expenses		2,041			-			-			-				2,041
Depreciation and amortization		39,654			1,334			7,311			3,945		j		53,317
											1,073		m
Total operating costs and expenses		857,005			12,428			48,226			4,232				921,891
OPERATING INCOME		39,860			1,852			19,464			(4,232	)			56,944
OTHER INCOME AND DEDUCTIONS
Interest expense, net		(37,182	)		(264	)		(10,928	)		(16,171	)	i		(66,939	)
											(2,394	)	k
Equity income		532			-			-			-				532
Loss on debt refinancing		(10,761	)		-						-				(10,761	)
Other income and deductions, net		307			(242	)		108			938		n		1,111
NET INCOME (LOSS)		(7,244	)		1,346			8,644			(21,859	)			(19,113	)
Less:
Net income from January 1-31, 2006		1,564			-			-			-				1,564
Net income (loss) for partners		(8,808	)		1,346			8,644			(21,859	)			(20,677	)
General partner's interest		(176	)		27			173			(438	)	o		(414	)
Beneficial conversion feature for Class C common units		3,587			-			-			-				3,587
Limited partners' interest	$	(12,219	)	$	1,319		$	8,471		$	(21,421	)		$	(23,850	)
Basic and diluted earnings per unit:
Amount allocated to common and subordinated units	$	(11,333	)										p	$	(22,123	)
Weighted average common and subordinated units outstanding		38,207,792													38,959,389
Loss per common and subordinated unit	$	(0.30	)											$	(0.57	)
Distributions declared per unit	$	0.9417												$	0.9417
Amount allocated to Class B common units	$	(886	)										p	$	(1,727	)
Weighted average Class B common units outstanding		5,173,189													5,173,189
Loss per Class B common unit	$	(0.17	)											$	(0.33	)
Distributions declared per unit	$	-												$	-
Amount allocated to Class C common units	$	3,587												$	3,587
Total Class C common units outstanding		2,857,143													2,857,143
Income per Class C common unit due to beneficial conversion feature	$	1.26												$	1.26
Distributions declared per unit	$	-												$	-
Amount allocated to Class D common units	$	-												$	-
Weighted average Class D common units outstanding		-													7,276,506
Loss per Class D common unit	$	-												$	-
Distributions declared per unit	$	-												$	-
See accompanying notes to unaudited pro forma combined financial statements

Regency Energy Partners LP

Unaudited Pro Forma Combined Statements of Operations

September 30, 2007

(in thousands except unit data and per unit data)

	Pro Forma Partnership			FrontStreet Hugoton		Pro Forma Adjustments				Pro Forma Combined
REVENUE
Gas sales	$	539,542		$	-	$	-			$	539,542
NGL sales		239,479			-		-				239,479
Gathering, transportation and other fees, including related party		-
amount of $1,325		128,307			31,831		-				160,138
Net unrealized and realized loss from risk management activities		(10,800	)		-		-				(10,800	)
Other		20,476			-		-				20,476
Total revenue		917,004			31,831		-				948,835
OPERATING COSTS AND EXPENSES
Cost of gas and liquids, including related party amount of $13,829		698,595			-		-				698,595
Operation and maintenance		69,554			19,226		-				88,780
General and administrative		41,934			289		-				42,223
Loss (gain) on sale of assets		1,513			-		-				1,513
Depreciation and amortization		49,453			4,480		-				53,933
Total operating costs and expenses		861,049			23,995		-				885,044
OPERATING INCOME		55,955			7,836		-				63,791
OTHER INCOME AND DEDUCTIONS
Interest expense, net		(68,910	)		-		(770	)	s		(69,680	)
Loss on debt refinancing		(21,200	)		-		-				(21,200	)
Other income and deductions, net		988			56		-				1,044
NET INCOME (LOSS) BEFORE INCOME TAXES		(33,167	)		7,892		(770	)			(26,045	)
Income tax expense (benefit)		47			-		-				47
NET INCOME (LOSS) FOR PARTNERS		(33,214	)		7,892		(770	)			(26,092	)
General partner's interest		(664	)		158		(15	)	o		(522	)
Beneficial conversion feature for Class C common units		1,385			-		-				1,385
Limited partners' interest	$	(33,935	)	$	7,734	$	(755	)		$	(26,955	)
Basic and diluted earnings per unit:
Amount allocated to common and subordinated units	$	(33,935	)						t	$	(26,955	)
Weighted average common and subordinated units outstanding		48,557,198									48,557,198
Loss per common and subordinated unit	$	(0.70	)							$	(0.56	)
Distributions declared per unit	$	1.13								$	1.13
Amount allocated to Class B common units	$	-								$	-
Weighted average Class B common units outstanding		871,673									871,673
Loss per Class B common unit	$	-								$	-
Distributions declared per unit	$	-								$	-
Amount allocated to Class C common units	$	1,385								$	1,385
Total Class C common units outstanding		2,857,143									2,857,143
Income per Class C common unit due to beneficial conversion feature	$	0.48								$	0.48
Distributions declared per unit	$	-								$	-
Amount allocated to Class D common units	$	-								$	-
Weighted average Class D common units outstanding		7,276,506									7,276,506
Loss per Class D common unit	$	-								$	-
Distributions declared per unit	$	-								$	-
Amount allocated to Class E common units	$	-								$	-
Weighted average Class E common units outstanding		-									4,701,034
Loss per Class E common unit	$	-								$	-
Distributions declared per unit	$	-								$	-
See accompanying notes to unaudited pro forma combined financial statements

Regency Energy Partners LP

Unaudited Pro Forma Combined Statements of Operations

September 30, 2007

(in thousands except unit data and per unit data)

										Pro Forma				Pro Forma
	Partnership			Pueblo			CDM			Adjustments				Partnership
REVENUE
Gas sales	$	538,360		$	1,182		$	-		$	-			$	539,542
NGL sales		237,382			2,097			-			-				239,479
Gathering, transportation and other fees, including related party
amount of $1,325		58,017			411			69,879			-				128,307
Net unrealized and realized loss from risk management activities		(10,798	)		(2	)		-			-				(10,800	)
Other		20,443			33			-			-				20,476
Total revenue		843,404			3,721			69,879			-				917,004
OPERATING COSTS AND EXPENSES
Cost of gas and liquids, including related party amount of $13,829		696,644			1,951			-			-				698,595
Operation and maintenance		34,409			632			34,513			-				69,554
General and administrative		32,962			321			8,848			(197	)	x		41,934
Loss (gain) on sale of assets		1,562			-			(49	)		-				1,513
Depreciation and amortization		37,475			333			8,417			2,959		v		49,453
											269		r
Total operating costs and expenses		803,052			3,237			51,729			3,031				861,049
OPERATING INCOME		40,352			484			18,150			(3,031	)			55,955
OTHER INCOME AND DEDUCTIONS
Interest expense, net		(41,740	)		(15	)		(13,458	)		(12,947	)	u		(68,910	)
											(750	)	w
Loss on debt refinancing		(21,200	)		-			-			-				(21,200	)
Other income and deductions, net		985			(160	)		163			-				988
NET INCOME (LOSS) BEFORE INCOME TAXES		(21,603	)		309			4,855			(16,728	)			(33,167	)
Income tax expense (benefit)		65			-			270			(288	)	q		47
NET INCOME (LOSS) FOR PARTNERS		(21,668	)		309			4,585			(16,440	)			(33,214	)
General partner's interest		(433	)		6			92			(329	)	o		(664	)
Beneficial conversion feature for Class C common units		1,385			-			-			-				1,385
Limited partners' interest	$	(22,620	)	$	303		$	4,493		$	(16,111	)		$	(33,935	)
Basic and diluted earnings per unit:
Amount allocated to common and subordinated units	$	(22,620	)										t	$	(33,935	)
Weighted average common and subordinated units outstanding		48,306,666													48,557,198
Loss per common and subordinated unit	$	(0.47	)											$	(0.70	)
Distributions declared per unit	$	1.13												$	1.13
Amount allocated to Class B common units	$	-												$	-
Weighted average Class B common units outstanding		871,673													871,673
Loss per Class B common unit	$	-												$	-
Distributions declared per unit	$	-												$	-
Amount allocated to Class C common units	$	1,385												$	1,385
Total Class C common units outstanding		2,857,143													2,857,143
Income per Class C common unit due to beneficial conversion feature	$	0.48												$	0.48
Distributions declared per unit	$	-												$	-
Amount allocated to Class D common units	$	-												$	-
Weighted average Class D common units outstanding		-													7,276,506
Loss per Class D common unit	$	-												$	-
Distributions declared per unit	$	-												$	-
See accompanying notes to unaudited pro forma combined financial statements

Regency Energy Partners LP

Notes to Unaudited Pro Forma Combined Financial Statements

The following notes discuss the columns presented and the entries made to the unaudited pro forma combined financial statements.

Partnership

This column represents the historical consolidated balance sheet as of September 30, 2007 and related statements of operations of the Partnership for the year ended of December 31, 2006 and nine months ended September 30, 2007.  The September 30, 2007 financial statements were derived from our unaudited financial statements as reported in our Quarterly Report on Form 10-Q for the nine months ended September 30, 2007.  The December 31, 2006 statement of operations was derived from our audited financial statements as reported in our Annual Report on Form 10-K for the year ended December 31, 2006.

FrontStreet

This column represents the historical consolidated financial statements of FrontStreet that have been derived from its financial statements included in this Current Report at Exhibit 99.2 and Exhibit 99.3.

Pueblo

This column represents the historical consolidated statements of operations of Pueblo Midstream Gas Corporation that have been derived from our Amended Current Reports on Form 8-K/As filed on May 11, 2007 and June 12, 2007.  The historical statements of operations for the Partnership included in this Amended Current Report on Form 8-K/A do not include the effects of our Pueblo acquisition for the year ended December 31, 2006 and the three months ended March 31, 2007.  As such, the historical statements of operations and related pro forma footnotes of Pueblo for those periods are included in this Amended Current Report on Form 8-K/A.

CDM

This column represents the historical consolidated financial statements of CDM Resource Management Predecessor that have been derived from our Amended Current Reports on Form 8-K/As filed on February 12, 2008.  The historical statements of operations for the Partnership included in this Amended Current Report on Form 8-K/A do not include the effects of our CDM acquisition for the year ended December 31, 2006 and the nine months ended September 30, 2007.  As such, the historical statements of operations and related pro forma footnotes of CDM for those periods are included in this Amended Current Report on Form 8-K/A.

Pro Forma Adjustment Explanations

a. Represents cash borrowed against our revolving credit facility of $11,752,000 as partial consideration for our FrontStreet acquisition.

b. Represents payment of cash to sellers of $11,752,000 as partial consideration for our FrontStreet acquisition and the elimination of FrontStreet’s members’ equity.  The offsetting entry is a reduction to the Class E common units issued as partial consideration for the FrontStreet acquisition.  This valuation of the Class E common units is necessary as this acquisition involves entities under common control, and we are required to account for the transaction in a manner similar to a pooling of interests.

c. Represents the $476,000,000 borrowed under the Partnership’s credit facility as partial consideration for our CDM acquisition, exclusive of debt issuance costs of $1,846,000 and payment of accrued interest of $422,000.

d. Represents the payoff of CDM’s long-term debt ($252,988,000), short-term capital lease obligations ($1,740,000), long-term capital lease obligations ($11,259,000), related interest payable ($1,706,000) and the purchase of certain assets leased under operating leases ($12,501,000).

e. Represents the preliminary allocation of the excess of the consideration given over the book value of assets.  Management will initiate a detailed valuation study, which could result in a different allocation.  For example, we may identify intangible assets, or determine that the amount allocable to property, plant and equipment should increase or decrease.  This preliminary allocation includes estimated direct transaction costs of $3,000,000 associated with our purchase of CDM.

The purchase price of CDM as reflected in the accompanying pro forma balance sheet was calculated as follows (in thousands):

Cash to CDM Partners	$	161,945
Cash to fund capital lease buyouts		12,999
Cash to fund operating lease buyouts		12,501
Class D common units		216,869
CDM liabilities paid		254,694
Total purchase price	$	659,008

This total purchase price was preliminarily allocated to the following assets (in thousands):

Current assets	$	19,198
Property, plant and equipment		451,626
Other receivables		4,492
Other assets, net		2,822
Goodwill		208,993
Current liabilities		(28,123	)
Total	$	659,008

f. Represents general partner contribution to maintain 2 percent general partner interest.

g. Represents annual interest expense of $905,000 based on the $11,752,000 we borrowed as partial consideration for our FrontStreet acquisition, applying the Partnership’s 7.7 percent cost of debt in 2006.

h. Represents the allocation of the limited partners' share of the incremental net loss associated with the pro forma adjustments on the basis of distributions received with common and subordinated unitholders receiving 92.76 percent and Class B common unitholders receiving 7.24 percent.

i. Represents the incremental interest expense related to CDM, applying the Partnership’s 7.7 percent cost of debt in 2006 to incremental borrowings of $210,013,000.

j. Represents the incremental depreciation expense on the increased book value of property plant and equipment, applying straight-line depreciation over a twenty year property life based on the preliminary allocation of the purchase price as noted in item “e” above.  If, after the completion of the detailed valuation study, the amount allocated to goodwill increases by $1,000,000 and the estimated useful lives of the depreciable assets were to remain at twenty years, annual depreciation and amortization expense would decrease by $50,000.

k. Represents the incremental interest expense related to Pueblo, applying the Partnership’s 7.7 percent cost of debt in 2006 to borrowings of $34,513,000 to fund the cash payment associated with our Pueblo acquisition.

l. Represents the cessation of management oversight fees paid to the previous owner in 2006 by Pueblo.

m. Represents the incremental depreciation expense for Pueblo on the $24,124,000 increase in book value of property plant and equipment, applying straight-line depreciation over fifteen and twenty year property lives based on the preliminary allocation of the purchase price.  If the amount allocated to goodwill increases by $1,000,000 and the estimated useful lives of the depreciable assets were to remain at twenty years, annual depreciation and amortization expense would decrease by $50,000.

n. Represents the total of the incremental Pueblo income statement items, multiplied by the statutory tax rate of 35 percent, as Pueblo is a taxable corporation.

o. Represents the general partner's share of the incremental net loss associated with pro forma adjustments.

p. Represents the allocation of the limited partners' share of the incremental net loss associated with the pro forma adjustments on the basis of distributions received with common and subordinated unitholders receiving 92.76 percent and Class B common unitholders receiving 7.24 percent.

q. Represents the total of the incremental Pueblo income statement items, multiplied by the statutory tax rate of 35 percent, as Pueblo is a taxable corporation.

r. Represents the incremental depreciation expense for Pueblo on the $24,124,000 increase in book value of property, plant and equipment, applying straight-line depreciation over fifteen and twenty year property lives based on the preliminary allocation of the purchase price. If the amount allocated to goodwill increases by $1,000,000 and the estimated useful lives of the depreciable assets were to remain at twenty years, annual depreciation and amortization expense would decrease by $50,000.

s. Represents incremental interest expense based on the $11,752,000 we borrowed as partial consideration for our FrontStreet acquisition, applying the Partnership’s 8.74 percent cost of debt in the nine months ended September 30, 2007.

t. As the Class B, C, D, and E common units did not participate in earnings or distributions in 2007, the common and subordinated units were allocated all pro forma losses.

u. Represents the incremental interest expense related to CDM, applying the Partnership’s 8.22 percent cost of debt in the nine months ending September 30, 2007 to incremental borrowings of $210,013,000.

v. Represents the incremental depreciation expense on the increased book value of property, plant and equipment, applying straight-line depreciation over a twenty year property life based on the preliminary allocation of the purchase price as noted in item “e” above. If, after the completion of the detailed valuation study, the amount allocated to goodwill increases by $1,000,000 and the estimated useful lives of the depreciable assets were to remain at twenty years, annual depreciation and amortization expense would decrease by $50,000.

w. Represents the incremental interest expense related to Pueblo, applying the Partnership’s 8.78 percent cost of debt in the three months ending March 31, 2007 to borrowings of $34,844,000 to fund the cash payment associated with our Pueblo acquisition.

x. Represents the cessation of management oversight fees paid to the previous owner by Pueblo in 2007.