Exhibit 99.1
Contact: Pamela Schreiber
Investor Relations
Atlas Pipeline Partners
1845 Walnut St. - 10th Floor
Philadelphia, PA 19103
(215) 546-5005
(215) 546-5388 (facsimile)
ATLAS PIPELINE PARTNERS, L.P.
REPORTS RECORD OPERATING RESULTS
FOR THE YEAR ENDED DECEMBER 31, 2004
PHILADELPHIA, PA MARCH 11, 2005-ATLAS PIPELINE PARTNERS, L.P. (NYSE: APL) (THE
"PARTNERSHIP OR APL") reported revenues of $91.3 million for the year ended
December 31, 2004 compared to $15.7 million for the year ended December 30,
2003. Net income was $18.3 million or $2.60 per limited partner unit for the
year ended December 31, 2004 as compared to $9.6 million or $2.17 per limited
partner unit for the year ended December 31, 2003. Distributions to limited
partners declared during 2004 were $2.67 per common unit, compared to $2.39 per
common unit during 2003, a 12% increase.
The significant increases in revenues, distributions and net income from period
to period reflect improvements in transported volumes and transportation fees,
and the July 2004 acquisition of Tulsa, Oklahoma based Spectrum Field Services,
Inc.
Earnings before interest, taxes, depreciation and amortization ("EBITDA"), a
non-GAAP measure that is widely used by commercial banks, investment bankers,
rating agencies and investors in evaluating performance relative to peers and
pre-set performance standards, was $24.3 million for the year ended December 31,
2004 compared to $11.7 million for the year ended December 31, 2003. The
following table reconciles EBITDA, net of a one-time adjustment reflecting the
"Gain on arbitration settlement" in connection with the terminated acquisition
of Alaska Pipeline Company, to our net income for the years ended December 31,
2004 and 2003. (See Notes 1 and 2)
Year Ended Three Months Ended
December 31, December 31,
---------------------- ----------------------
2004 2003 2004 2003
--------- --------- --------- ---------
(in thousands)
Net income .............................. $ 18,334 $ 9,639 $ 11,110 $ 2,372
Gain on arbitration settlement .......... (1,457) - (4,444) -
Non-cash compensation expense ........... 700 - 358 -
Interest expense ........................ 2,301 258 1,099 46
Depreciation and amortization ........... 4,471 1,770 2,339 504
--------- --------- --------- ---------
Pro - forma EBITDA (see Notes 1 and 2) $ 24,349 $ 11,667 $ 10,462 $ 2,922
========= ========= ========= =========
Due to the one-time nature of the "Gain on arbitration settlement", APL believes
Pro-forma net income, a non-GAAP measure, more clearly presents APL's true
operating performance during 2004. The following table reconciles net income to
pro-forma net income for the three and nine month periods ended September 30,
2004 and 2003. (See Note 2)
Year Ended Three Months Ended
December 31, December 31,
---------------------- ----------------------
2004 2003 2004 2003
--------- --------- --------- ---------
(in thousands, except per unit data)
Net income ....................................... $ 18,334 $ 9,639 11,110 2,372
Gain on arbitration settlement ................... (1,457) - (4,444) -
--------- --------- --------- ---------
Pro-forma net income (see Note 2) ................ $ 16,877 $ 9,639 $ 6,666 $ 2,372
========= ========= ========= =========
Pro-forma net income - limited partners .......... $ 13,868 $ 8,651 $ 5,404 $ 2,040
========= ========= ========= =========
Pro-forma net income - general partner ........... $ 3,009 $ 988 $ 1,262 $ 332
========= ========= ========= =========
Weighted average limited partner units - diluted.. 5,866 3,981 7,205 4,355
========= ========= ========= =========
Pro-forma net income per limited
partner unit - diluted ....................... $ 2.36 $ 2.17 $ 0.80 $ 0.47
========= ========= ========= =========
- ----------
Note 1. EBITDA represents net income before interest expense, income tax (not
applicable to the Partnership), depreciation and amortization.
Management of APL believes that EBITDA provides additional information
with respect to APL's ability to meet its debt service, capital expense
and working capital requirements. EBITDA is a commonly used measure of a
business' ability to generate cash flow without consideration of its
financing structure. This measure is widely used by commercial banks,
investment bankers, rating agencies and investors in evaluating
performance relative to peers and pre-set performance standards. It is
also a financial measurement that, with certain negotiated adjustments,
is reported to APL's banks to establish conformance with its financial
covenants under its current credit facility. EBITDA is not a measure of
financial performance under GAAP and, accordingly, should not be
considered as a substitute for net income, or cash flows from operating
activities, prepared in accordance with GAAP
Note 2. Pro-forma net income excludes "Gain on arbitration settlement" in
connection with the terminated acquisition of Alaska Pipeline Company
("APC"). Due to its one-time nature, APL believes that net income
excluding this gain more clearly presents APL's true operating
performance during 2004. Pro-forma net income which excludes "Gain on
arbitration settlement" is not a measure of financial performance under
GAAP and, accordingly, should not be considered as a substitute for net
income prepared in accordance with GAAP.
HIGHLIGHTS OF THE YEAR:
CORPORATE ACTIVITY
o In April 2004 we closed a follow-on equity offering of 750 thousand
limited partner units at $36.00 per unit, resulting in net proceeds of
approximately $25.4 million. In July 2004 we closed a follow-on equity
offering of 2.1 million limited partner units at $34.76 per unit,
resulting in net proceeds of approximately $69.5 million which was used
for funding of the Spectrum acquisition.
o In May 2004, APL units were listed for trading on the New York Stock
Exchange.
o In July 2004 we completed the acquisition of Spectrum Field Services,
Inc. for approximately $142.0 million. In connection with this
transaction, we established a $135.0 million term loan and credit
facility, led by Wachovia Bank and Key Bank.
o In December 2004 we declared our 20th consecutive quarterly distribution
in the amount of $.72 per unit - the largest distribution in our
history. During 2004, total distributions of
$2.67 per common unit were declared compared to $2.39 per unit during
2003. (Subsequently, in March 2005 we declared a quarterly distribution
of $.75 per unit.)
o At year-end 2004 SEMCO Energy, Inc. paid us $5.5 million to settle our
claims relating to SEMCO's termination of the sale of Alaska Pipeline
Company to us. Total costs incurred by us related to this transaction
were approximately $4.0 million resulting in a "Gain on arbitration
settlement" of $1.5 million.
o In March 2005, APL entered into an agreement to acquire the "Elk City
system", another gathering and processing system in Oklahoma for total
consideration of $190 million.
OPERATING ACTIVITY
o Total average daily throughput volumes for 2004 increased to an average
of 109.8 million cubic feet per day, compared to an average of 52.5
million per day during 2003.
o Currently (March 2005)
o Mid-continent inlet volumes are approximately 66 million cubic feet
of gas per day
o Appalachian gathered volumes are approximately 53 million cubic feet
of gas per day
o Total through-put volumes are approximately 119 million cubic feet
of gas per day
o We connected 335 new wells to our Appalachian system during 2004
compared to 270 during 2003.
o We connected 81 wells to our mid-continent system during the period from
July 14, 2004 (the Spectrum acquisition date) to December 31, 2004,
representing approximately 17 million cubic feet per day of new gathered
gas.
ATLAS PIPELINE PARTNERS, L.P. is active in the gas gathering and processing
segment of the mid-stream natural gas industry. In Appalachia, it owns and
operates more than 1,400 miles of natural gas gathering pipelines in western
Pennsylvania, western New York and eastern Ohio to which more than 4,500 wells
are currently connected. APL currently gathers approximately 53 million cubic
feet ("mcf") of gas per day from these wells. In the Mid-Continent region of
southern Oklahoma and northern Texas, APL owns and operates approximately 1,900
miles of gas gathering pipeline serving approximately 600 wells. Currently, APL
transports approximately 66 million cubic feet of gas per day to its gas
processing facility in Velma, Oklahoma where natural gas liquids (NGL) are
removed. APL then sells the resulting gas and NGL and remits a portion of those
proceeds to the producer. In both Appalachia and the Mid-Continent, the fees
paid to APL are either a percentage of the gross selling price of the gas or NGL
or a fixed fee per mcf transported. For more information, visit our website at
www.atlaspipelinepartners.com or contact pschreiber@atlaspipelinepartners.com .
ATLAS AMERICA, INC. (NASDAQ: ATLS) is an energy company engaged primarily in the
development and production of natural gas in the Appalachian Basin for its own
account and for its investors through the offering of tax advantaged investment
programs. Atlas America operates primarily in western Pennsylvania and eastern
Ohio. Atlas America owns 100% of the general partner of APL and owns 1,641,026
limited partnership units of APL. For more information, please visit our website
at www.atlasamerica.com, or contact investor relations at
pschreiber@atlasamerica.com.
RESOURCE AMERICA, INC. (NASDAQ: REXI), the parent company of APL's general
partner, is a specialized asset management company that uses industry specific
expertise to generate and administer investment opportunities for its own
account and for outside investors in the energy, real estate and financial
services industries. Currently, Resource America manages assets of approximately
$4.7 billion in these sectors.
STATEMENTS MADE IN THIS RELEASE INCLUDE FORWARD-LOOKING STATEMENTS, WHICH
INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES. THE PARTNERSHIP'S ACTUAL RESULTS,
PERFORMANCE OR ACHIEVEMENTS COULD DIFFER MATERIALLY FROM THOSE EXPRESSED OR
IMPLIED IN THIS RELEASE AS A RESULT OF CERTAIN FACTORS, INCLUDING COMPETITION
WITHIN THE ENERGY INDUSTRY, CLIMACTIC CONDITIONS AND
THE PRICE OF GAS AND NGL IN THE APPALACHIAN AND MID-CONTINENT AREAS, ACTUAL
VERSUS PROJECTED VOLUMETRIC PRODUCTION FROM WELLS CONNECTED TO THE PARTNERSHIP'S
GAS-GATHERING PIPELINE SYSTEMS, AND THE COST OF SUPPLIES AND SERVICES IN THE
ENERGY INDUSTRY.
THE REMAINDER OF THIS RELEASE CONTAINS THE PARTNERSHIP'S CONSOLIDATED BALANCE
SHEETS, STATEMENTS OF INCOME AND INFORMATION RELATED TO ITS THROUGHPUT VOLUMES
AND RELATED RATES DURING THE PERIODS INDICATED.
ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2004 2003
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................. $ 18,214 $ 15,078
Accounts receivable - affiliates ...................... 1,496 -
Accounts receivable ................................... 13,769 12
Prepaid expenses ...................................... 1,056 67
------------ ------------
Total current assets ................................ 34,535 15,157
PROPERTY, PLANT AND EQUIPMENT, NET ...................... 175,259 29,628
GOODWILL (net of accumulated amortization of $285) ...... 2,305 2,305
OTHER LONG-TERM ASSETS .................................. 4,686 2,422
------------ ------------
$ 216,785 $ 49,512
============ ============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Current portion of long-term debt ..................... $ 2,303 $ -
Accrued liabilities ............ ...................... 3,144 279
Accrued hedge liability .......... .................... 1,956 -
Accrued producer liabilities ...... ................... 10,996 -
Accounts payable ...................................... 2,341 242
Accounts payable - affiliates ......................... - 1,673
Distribution payable .................................. 6,467 3,073
------------ ------------
Total current liabilities ........................... 27,210 5,267
OTHER LONG-TERM LIABILITIES ............................. 722 -
LONG-TERM DEBT, LESS CURRENT PORTION .................... 52,149 -
PARTNERS' CAPITAL (DEFICIT):
Common unitholders, 5,563,659 and 2,713,659 units
Outstanding .......................................... 135,759 43,551
Subordinated unitholders; 1,641,026 units outstanding.. 2 354
General partner ....................................... 2,261 340
Accumulated other comprehensive loss .................. (1,318) -
------------ ------------
Total partners' capital ............................. 136,704 44,245
------------ ------------
$ 216,785 $ 49,512
============ ============
ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per unit data)
Year Ended Three Months Ended
December 31, December 31,
-------------------------- --------------------------
2004 2004 2004 2003
----------- ----------- ----------- -----------
REVENUES:
Natural gas and liquids ............... $ 72,109 $ - $ 42,061 $ -
Transportation and compression ........ 18,800 15,561 5,456 3,745
Interest income and other ............. 382 98 100 37
----------- ----------- ----------- -----------
Total revenues ...................... 91,291 15,749 47,617 3,872
COSTS AND EXPENSES:
Natural gas and liquids ............... 58,707 - 34,119 -
Plant operating ....................... 2,032 - 1,101 -
Transportation and compression ........ 2,260 2,421 552 590
General and administrative ............ 4,463 1,661 1,562 360
Depreciation and amortization ......... 4,471 1,770 2,339 504
Gain on arbitration settlement, net (1,457) - (4,444) -
Interest expense ...................... 2,301 258 1,099 46
----------- ----------- ----------- -----------
Total costs and expenses ............ 72,957 6,110 36,507 1,500
----------- ----------- ----------- -----------
Net income ................................ $ 18,334 $ 9,639 $ 11,110 $ 2,372
=========== =========== =========== ===========
Net income - limited partners ............. $ 15,256 $ 8,651 $ 9,759 $ 2,040
=========== =========== =========== ===========
Net income - general partner .............. $ 3,078 $ 988 1,351 $ 332
=========== =========== =========== ===========
Basic net income per limited partner unit.. $ 2.60 $ 2.17 $1`.59 $ 0.47
=========== =========== =========== ===========
Weighted average limited partner
units outstanding - basic ............. 5,866 3,981 7,205 4,355
=========== =========== =========== ===========
RESULTS OF OPERATIONS:
The following table sets forth certain information relating to the average
volumes transported or delivered, average gross margin rate per mcf and average
transportation rates per mcf for the periods indicated.
Year Ended Three Months Ended
December 31, December 31,
------------------------- -------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Average daily throughput volumes in mcf (Mid-Continent)... 56,441 - 57,600 -
Average daily throughput volumes in mcf (Appalachia) ..... 53,343 52,472 55,125 50,092
----------- ----------- ----------- -----------
Total average daily throughput volumes in mcf ............ 109,784 52,474 112,725 50,092
=========== =========== =========== ===========
Average gross margin rate per mcf (Mid-Continent) ........ $ 1.41 $ - $ 1.50 $ -
=========== =========== =========== ===========
Average transportation rate per mcf (Appalachia) ...... $ .96 $ .82 $ 1.08 $ 0.83
=========== =========== =========== ===========