ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | 16-1731691 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
2001 BRYAN STREET, SUITE 3700 DALLAS, TX | 75201 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
ITEM 1. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 1. | ||
ITEM 1A. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 5. | ||
ITEM 6. | ||
Name | Definition or Description | |
/d | Per day | |
AOCI | Accumulated Other Comprehensive Income | |
Bbls | Barrels | |
BTU | A unit of energy needed to raise the temperature of one pound of water by one degree Fahrenheit | |
Citi | Citigroup Global Markets Inc. | |
Edwards Lime | Edwards Lime Gathering, LLC, which is 60% owned by the Partnership | |
ETC | Energy Transfer Company, the name assumed by La Grange Acquisition, L.P. for conducting business and shared services, a wholly owned subsidiary of ETP | |
ETE | Energy Transfer Equity, L.P. | |
ETP | Energy Transfer Partners, L.P. | |
Finance Corp. | Regency Energy Finance Corp., a wholly-owned subsidiary of the Partnership | |
GAAP | Accounting principles generally accepted in the United States of America | |
General Partner | Regency GP LP, the general partner of the Partnership, or Regency GP LLC, the general partner of Regency GP LP, which effectively manages the business and affairs of the partnerships | |
GPM | Gallons per minute | |
HPC | RIGS Haynesville Partnership Co., a general partnership in which the Partnership owns a 49.99% interest, and its 100% owned subsidiary, Regency Intrastate Gas LP | |
IDRs | Incentive Distribution Rights | |
Lone Star | Lone Star NGL LLC, which is 30% owned by the Partnership and 70% owned by ETP | |
LTIP | Long-Term Incentive Plan | |
MEP | Midcontinent Express Pipeline LLC, which is 50% owned by the Partnership | |
MBbls | One thousand barrels | |
MMBtu | One million BTUs | |
MMcf | One million cubic feet | |
NGLs | Natural gas liquids, including ethane, propane, normal butane, iso butane and natural gasoline | |
NYMEX | New York Mercantile Exchange | |
Partnership | Regency Energy Partners LP and its subsidiaries | |
Ranch JV | Ranch Westex JV LLC, which is 33.33% owned by the Partnership | |
RGS | Regency Gas Services LP, a wholly-owned subsidiary of the Partnership | |
RIGS | Regency Intrastate Gas System | |
SEC | Securities and Exchange Commission | |
Series A Preferred Units | Series A convertible redeemable preferred units | |
Services Co. | ETE Services Company, LLC, a wholly owned subsidiary of ETE | |
WTI | West Texas Intermediate Crude |
• | declines in the credit markets and the availability of credit for us as well as for producers connected to our pipelines and our gathering and processing facilities, and for our customers of contract compression and contract treating businesses; |
• | the level of creditworthiness of, and performance by, our counterparties and customers; |
• | our access to capital to fund organic growth projects and acquisitions, and our ability to obtain debt or equity financing on satisfactory terms; |
• | our use of derivative financial instruments to hedge commodity and interest rate risks; |
• | the amount of collateral required to be posted from time-to-time in our transactions; |
• | changes in commodity prices, interest rates and demand for our services; |
• | changes in laws and regulations impacting the midstream sector of the natural gas industry, including those that relate to climate change and environmental protection and safety; |
• | weather and other natural phenomena; |
• | industry changes including the impact of consolidations and changes in competition; |
• | regulation of transportation rates on our natural gas and NGL pipelines; |
• | our ability to obtain indemnification related to cleanup liabilities and to clean up any hazardous materials release on satisfactory terms; |
• | our ability to obtain required approvals for construction or modernization of our facilities and the timing of production from such facilities; and |
• | the effect of accounting pronouncements issued periodically by accounting standard setting boards. |
June 30, 2012 | December 31, 2011 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 15,883 | $ | 990 | |||
Trade accounts receivable, net of allowance of $973 and $1,190 | 32,407 | 43,917 | |||||
Accrued revenues | 76,850 | 68,011 | |||||
Related party receivables | 20,712 | 45,204 | |||||
Derivative assets | 14,361 | 4,374 | |||||
Other current assets | 24,721 | 24,628 | |||||
Total current assets | 184,934 | 187,124 | |||||
Property, plant and equipment: | |||||||
Property, plant and equipment | 2,264,661 | 2,080,932 | |||||
Less accumulated depreciation | (272,213 | ) | (195,404 | ) | |||
Property, plant and equipment, net | 1,992,448 | 1,885,528 | |||||
Other Assets: | |||||||
Investment in unconsolidated affiliates | 2,102,503 | 1,924,705 | |||||
Long-term derivative assets | 1,872 | 474 | |||||
Other, net of accumulated amortization of debt issuance costs of $13,257 and $10,186 | 34,770 | 39,353 | |||||
Total other assets | 2,139,145 | 1,964,532 | |||||
Intangible assets, net of accumulated amortization of $59,492 and $44,856 | 726,246 | 740,883 | |||||
Goodwill | 789,789 | 789,789 | |||||
TOTAL ASSETS | $ | 5,832,562 | $ | 5,567,856 | |||
LIABILITIES AND PARTNERS’ CAPITAL AND NONCONTROLLING INTEREST | |||||||
Current Liabilities: | |||||||
Drafts payable | $ | 349 | $ | 2,507 | |||
Trade accounts payable | 65,399 | 73,462 | |||||
Accrued cost of gas and liquids | 56,043 | 84,943 | |||||
Related party payables | 35,362 | 12,625 | |||||
Deferred revenues, including related party amounts of $52 and $41 | 13,376 | 16,225 | |||||
Derivative liabilities | 113 | 10,535 | |||||
Other current liabilities | 32,034 | 33,009 | |||||
Total current liabilities | 202,676 | 233,306 | |||||
Long-term derivative liabilities | 30,644 | 39,112 | |||||
Other long-term liabilities | 5,721 | 6,071 | |||||
Long-term debt, net | 1,780,558 | 1,687,147 | |||||
Commitments and contingencies | |||||||
Series A Preferred Units, redemption amount of $85,008 and $84,773 | 72,370 | 71,144 | |||||
Partners’ capital and noncontrolling interest: | |||||||
Common units | 3,367,505 | 3,173,090 | |||||
General partner interest | 328,272 | 329,876 | |||||
Accumulated other comprehensive income (loss) | 1,065 | (4,759 | ) | ||||
Total partners’ capital | 3,696,842 | 3,498,207 | |||||
Noncontrolling interest | 43,751 | 32,869 | |||||
Total partners’ capital and noncontrolling interest | 3,740,593 | 3,531,076 | |||||
TOTAL LIABILITIES AND PARTNERS’ CAPITAL AND NONCONTROLLING INTEREST | $ | 5,832,562 | $ | 5,567,856 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
REVENUES | |||||||||||||||
Gas sales, including related party amounts of $3,801, $6,161, $9,281 and $11,639 | $ | 64,042 | $ | 132,800 | $ | 144,937 | $ | 242,887 | |||||||
NGL sales, including related party amounts of $679, $77,048, $22,968 and $150,041 | 120,984 | 138,088 | 280,263 | 256,339 | |||||||||||
Gathering, transportation and other fees, including related party amounts of $7,349, $5,254, $14,000 and $11,470 | 95,265 | 81,817 | 195,579 | 163,653 | |||||||||||
Net realized and unrealized gain (loss) from derivatives | 14,987 | (7,542 | ) | 13,803 | (9,256 | ) | |||||||||
Other, including related party amounts of $0, $2,924, $1,478 and $4,790 | 16,698 | 11,335 | 35,293 | 20,127 | |||||||||||
Total revenues | 311,976 | 356,498 | 669,875 | 673,750 | |||||||||||
OPERATING COSTS AND EXPENSES | |||||||||||||||
Cost of sales, including related party amounts of $2,697, $7,807, $8,574 and $11,021 | 186,815 | 259,475 | 426,468 | 475,736 | |||||||||||
Operation and maintenance | 38,992 | 33,996 | 79,973 | 67,556 | |||||||||||
General and administrative, including related party amounts of $4,300, $4,224, $8,600 and $8,129 | 16,476 | 17,551 | 32,171 | 36,660 | |||||||||||
Loss on asset sales, net | 1,548 | 153 | 1,584 | 181 | |||||||||||
Depreciation and amortization | 45,132 | 40,503 | 96,638 | 80,739 | |||||||||||
Total operating costs and expenses | 288,963 | 351,678 | 636,834 | 660,872 | |||||||||||
OPERATING INCOME | 23,013 | 4,820 | 33,041 | 12,878 | |||||||||||
Income from unconsolidated affiliates | 34,185 | 32,167 | 66,143 | 55,975 | |||||||||||
Interest expense, net | (27,934 | ) | (24,689 | ) | (57,491 | ) | (44,696 | ) | |||||||
Loss on debt refinancing, net | (7,820 | ) | — | (7,820 | ) | — | |||||||||
Other income and deductions, net | 7,921 | 2,641 | 24,443 | 5,055 | |||||||||||
INCOME BEFORE INCOME TAXES | 29,365 | 14,939 | 58,316 | 29,212 | |||||||||||
Income tax expense | 38 | 102 | 89 | 70 | |||||||||||
NET INCOME | 29,327 | 14,837 | 58,227 | 29,142 | |||||||||||
Net income attributable to noncontrolling interest | (649 | ) | (293 | ) | (1,048 | ) | (524 | ) | |||||||
NET INCOME ATTRIBUTABLE TO REGENCY ENERGY PARTNERS LP | $ | 28,678 | $ | 14,544 | $ | 57,179 | $ | 28,618 | |||||||
Amounts attributable to Series A Preferred Units | 2,120 | 1,995 | 5,117 | 3,988 | |||||||||||
General partner’s interest, including IDRs | 2,505 | 1,550 | 4,993 | 2,842 | |||||||||||
Limited partners’ interest in net income | $ | 24,053 | $ | 10,999 | $ | 47,069 | $ | 21,788 | |||||||
Basic and diluted net income per common unit: | |||||||||||||||
Weighted average number of common units outstanding | 170,107,060 | 142,937,163 | 164,398,548 | 140,135,219 | |||||||||||
Basic income per common unit | $ | 0.14 | $ | 0.08 | $ | 0.29 | $ | 0.16 | |||||||
Diluted income per common unit | $ | 0.10 | $ | 0.07 | $ | 0.26 | $ | 0.14 | |||||||
Distributions per common unit | $ | 0.46 | $ | 0.45 | $ | 0.92 | $ | 0.895 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net income | $ | 29,327 | $ | 14,837 | $ | 58,227 | $ | 29,142 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Net cash flow hedge amounts reclassified to earnings | 2,159 | 5,565 | 5,824 | 8,994 | |||||||||||
Change in fair value of cash flow hedges | — | 1,530 | — | (15,466 | ) | ||||||||||
Total other comprehensive income (loss) | 2,159 | 7,095 | 5,824 | (6,472 | ) | ||||||||||
Comprehensive income | 31,486 | 21,932 | 64,051 | 22,670 | |||||||||||
Comprehensive income attributable to noncontrolling interest | 649 | 293 | 1,048 | 524 | |||||||||||
Comprehensive income attributable to Regency Energy Partners LP | $ | 30,837 | $ | 21,639 | $ | 63,003 | $ | 22,146 |
Six Months Ended June 30, | |||||||
2012 | 2011 | ||||||
OPERATING ACTIVITIES: | |||||||
Net income | $ | 58,227 | $ | 29,142 | |||
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||
Depreciation and amortization, including debt issuance cost and bond premium amortization | 99,359 | 83,587 | |||||
Income from unconsolidated affiliates | (66,143 | ) | (55,975 | ) | |||
Derivative valuation changes | (24,450 | ) | (5,826 | ) | |||
Loss on asset sales, net | 1,584 | 181 | |||||
Unit-based compensation expenses | 2,294 | 1,747 | |||||
Cash flow changes in current assets and liabilities: | |||||||
Trade accounts receivable, accrued revenues and related party receivables | 21,052 | (8,847 | ) | ||||
Other current assets | 179 | 964 | |||||
Trade accounts payable, accrued cost of gas and liquids, related party payables and deferred revenues | (51,903 | ) | 28,577 | ||||
Other current liabilities | (976 | ) | (2,764 | ) | |||
Distributions received from unconsolidated affiliates | 63,096 | 50,510 | |||||
Other assets and liabilities | (123 | ) | (182 | ) | |||
Net cash flows provided by operating activities | 102,196 | 121,114 | |||||
INVESTING ACTIVITIES: | |||||||
Capital expenditures | (197,941 | ) | (172,236 | ) | |||
Capital contributions to unconsolidated affiliates | (169,751 | ) | (591,681 | ) | |||
Distribution in excess of earnings of unconsolidated affiliates | 22,859 | 27,990 | |||||
Proceeds from asset sales | 20,411 | 4,003 | |||||
Net cash flows used in investing activities | (324,422 | ) | (731,924 | ) | |||
FINANCING ACTIVITIES: | |||||||
Net borrowings under revolving credit facility | 183,000 | 45,000 | |||||
Proceeds from issuance of senior notes | — | 500,000 | |||||
Redemption of senior notes | (87,500 | ) | — | ||||
Debt issuance costs | (686 | ) | (9,936 | ) | |||
Drafts payable | (2,158 | ) | — | ||||
Partner distributions | (158,226 | ) | (131,106 | ) | |||
Disposition of assets between entities under common control in excess of historical cost | 136 | 25 | |||||
Contributions from noncontrolling interest | 9,834 | — | |||||
Issuance of common units under LTIP, net of forfeitures and tax withholding | (207 | ) | 506 | ||||
Common unit offering, net of costs | 296,817 | 203,917 | |||||
Distributions to Series A Preferred Units | (3,891 | ) | (3,891 | ) | |||
Net cash flows provided by financing activities | 237,119 | 604,515 | |||||
Net change in cash and cash equivalents | 14,893 | (6,295 | ) | ||||
Cash and cash equivalents at beginning of period | 990 | 9,400 | |||||
Cash and cash equivalents at end of period | $ | 15,883 | $ | 3,105 | |||
Non-cash Investing Activities: | |||||||
Accrued capital expenditures and contributions to unconsolidated affiliates | $ | 58,940 | $ | 14,598 |
Regency Energy Partners LP | ||||||||||||||||||||||
Units | ||||||||||||||||||||||
Common | Common Unitholders | General Partner Interest | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total | |||||||||||||||||
Balance - December 31, 2011 | 157,437,608 | $ | 3,173,090 | $ | 329,876 | $ | (4,759 | ) | $ | 32,869 | $ | 3,531,076 | ||||||||||
Common unit offering, net of costs | 12,650,000 | 296,817 | — | — | — | 296,817 | ||||||||||||||||
Issuance of common units under LTIP, net of forfeitures and tax withholding | 25,958 | (207 | ) | — | — | — | (207 | ) | ||||||||||||||
Unit-based compensation expenses | — | 2,294 | — | — | — | 2,294 | ||||||||||||||||
Transfer of assets between entities under common control in excess of historical cost | — | — | 136 | — | — | 136 | ||||||||||||||||
Partner distributions | — | (151,579 | ) | (6,647 | ) | — | — | (158,226 | ) | |||||||||||||
Accrued distributions to phantom units | — | (65 | ) | — | — | — | (65 | ) | ||||||||||||||
Net income | — | 52,186 | 4,993 | — | 1,048 | 58,227 | ||||||||||||||||
Contributions from noncontrolling interest | — | — | — | — | 9,834 | 9,834 | ||||||||||||||||
Distributions to Series A Preferred Units | — | (3,826 | ) | (65 | ) | — | — | (3,891 | ) | |||||||||||||
Accretion of Series A Preferred Units | — | (1,205 | ) | (21 | ) | — | — | (1,226 | ) | |||||||||||||
Net cash flow hedge amounts reclassified to earnings | — | — | — | 5,824 | — | 5,824 | ||||||||||||||||
Balance - June 30, 2012 | 170,113,566 | $ | 3,367,505 | $ | 328,272 | $ | 1,065 | $ | 43,751 | $ | 3,740,593 |
Quarter Ended | Record Date | Payment Date | Cash Distributions (per common unit) | |||
December 31, 2011 | February 6, 2012 | February 13, 2012 | $0.46 | |||
March 31, 2012 | May 7, 2012 | May 14, 2012 | $0.46 | |||
June 30, 2012 | August 6, 2012 | August 14, 2012 | $0.46 |
Three Months Ended June 30, | |||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||
Income (Numerator) | Units (Denominator) | Per-Unit Amount | Income (Numerator) | Units (Denominator) | Per-Unit Amount | ||||||||||||||||
Basic income per unit | |||||||||||||||||||||
Limited Partners’ interest in net income | $ | 24,053 | 170,107,060 | $ | 0.14 | $ | 10,999 | 142,937,163 | $ | 0.08 | |||||||||||
Effect of Dilutive Securities: | |||||||||||||||||||||
Common unit options | — | 8,474 | — | 25,826 | |||||||||||||||||
Phantom units * | — | 288,644 | — | 237,747 | |||||||||||||||||
Series A Preferred Units | (5,789 | ) | 4,645,229 | (955 | ) | 4,614,250 | |||||||||||||||
Diluted income per unit | $ | 18,264 | 175,049,407 | $ | 0.10 | $ | 10,044 | 147,814,986 | $ | 0.07 |
Six Months Ended June 30, | |||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||
Income (Numerator) | Units (Denominator) | Per-Unit Amount | Income (Numerator) | Units (Denominator) | Per-Unit Amount | ||||||||||||||||
Basic income per unit | |||||||||||||||||||||
Limited Partners’ interest in net income | $ | 47,069 | 164,398,548 | $ | 0.29 | $ | 21,788 | 140,135,219 | $ | 0.16 | |||||||||||
Effect of Dilutive Securities: | |||||||||||||||||||||
Common unit options | — | 15,033 | — | 28,403 | |||||||||||||||||
Phantom units * | — | 325,129 | — | 231,251 | |||||||||||||||||
Series A Preferred Units | (3,288 | ) | 4,645,229 | (1,537 | ) | 4,584,192 | |||||||||||||||
Diluted income per unit | $ | 43,781 | 169,383,939 | $ | 0.26 | $ | 20,251 | 144,979,065 | $ | 0.14 |
* | Amount assumes maximum conversion rate for market condition awards. |
June 30, 2012 | December 31, 2011 | ||||||
HPC | $ | 673,510 | $ | 682,046 | |||
MEP | 596,696 | 613,942 | |||||
Lone Star | 809,958 | 628,717 | |||||
Ranch JV | 22,339 | — | |||||
$ | 2,102,503 | $ | 1,924,705 |
Three Months Ended June 30, 2012 | |||||||||||||||
HPC | MEP | Lone Star | Ranch JV | ||||||||||||
Contributions to unconsolidated affiliates | $ | — | $ | — | $ | 95,414 | $ | 8,944 | |||||||
Distributions from unconsolidated affiliates | 13,871 | 18,796 | 10,787 | — | |||||||||||
Share of unconsolidated affiliates' net income (loss) | 13,108 | 10,189 | 12,366 | (17 | ) | ||||||||||
Amortization of excess fair value of investment | (1,461 | ) | — | — | — |
Three Months Ended June 30, 2011 | |||||||||||||
HPC | MEP | Lone Star(1) | Ranch JV | ||||||||||
Contributions to unconsolidated affiliates | $ | — | $ | — | $ | 591,681 | N/A | ||||||
Distributions from unconsolidated affiliates | 18,113 | 18,222 | — | N/A | |||||||||
Share of unconsolidated affiliates' net income | 15,130 | 10,110 | 8,388 | N/A | |||||||||
Amortization of excess fair value of investment | (1,461 | ) | — | — | N/A |
Six Months Ended June 30, 2012 | |||||||||||||||
HPC | MEP | Lone Star | Ranch JV | ||||||||||||
Contributions to unconsolidated affiliates | $ | — | $ | — | $ | 175,254 | $ | 22,356 | |||||||
Distributions from unconsolidated affiliates | 30,030 | 38,182 | 17,743 | — | |||||||||||
Share of unconsolidated affiliates' net income (loss) | 24,417 | 20,936 | 23,730 | (17 | ) | ||||||||||
Amortization of excess fair value of investment | (2,923 | ) | — | — | — |
Six Months Ended June 30, 2011 | |||||||||||||
HPC | MEP | Lone Star(1) | Ranch JV | ||||||||||
Contributions to unconsolidated affiliates | $ | — | $ | — | $ | 591,681 | N/A | ||||||
Distributions from unconsolidated affiliates | 34,841 | 43,659 | — | N/A | |||||||||
Share of unconsolidated affiliates' net income | 30,205 | 20,305 | 8,388 | N/A | |||||||||
Amortization of excess fair value of investment | (2,923 | ) | — | — | N/A |
(1) | For the period from initial contribution, May 2, 2011, to June 30, 2011. |
N/A | The Partnership acquired a 33.33% membership interest in Ranch JV in December 2011. |
Three Months Ended June 30, 2012 | |||||||||||||||
HPC | MEP | Lone Star | Ranch JV | ||||||||||||
Total revenues | $ | 46,324 | $ | 64,969 | $ | 157,591 | $ | 130 | |||||||
Operating income (loss) | 26,680 | 33,274 | 40,066 | (27 | ) | ||||||||||
Net income (loss) | 26,222 | 20,377 | 41,220 | (27 | ) | ||||||||||
Three Months Ended June 30, 2011 | |||||||||||||||
HPC | MEP | Lone Star(1) | Ranch JV | ||||||||||||
Total revenues | $ | 48,585 | $ | 64,943 | $ | 98,820 | N/A | ||||||||
Operating income | 30,515 | 33,190 | 28,143 | N/A | |||||||||||
Net income | 30,265 | 20,276 | 27,958 | N/A |
Six Months Ended June 30, 2012 | |||||||||||||||
HPC | MEP | Lone Star | Ranch JV | ||||||||||||
Total revenues | $ | 88,140 | $ | 131,129 | $ | 324,586 | $ | 130 | |||||||
Operating income (loss) | 49,649 | 67,663 | 78,620 | (51 | ) | ||||||||||
Net income (loss) | 48,844 | 41,871 | 79,101 | (51 | ) | ||||||||||
Six Months Ended June 30, 2011 | |||||||||||||||
HPC | MEP | Lone Star(1) | Ranch JV | ||||||||||||
Total revenues | $ | 97,234 | $ | 129,767 | $ | 98,820 | N/A | ||||||||
Operating income | 60,842 | 66,455 | 28,143 | N/A | |||||||||||
Net income | 60,421 | 40,686 | 27,958 | N/A |
(1) | For the period from initial contribution, May 2, 2011, to June 30, 2011. |
N/A | The Partnership acquired a 33.33% membership interest in Ranch JV in December 2011. |
Assets | Liabilities | ||||||||||||||
June 30, 2012 | December 31, 2011 | June 30, 2012 | December 31, 2011 | ||||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||
Current amounts | |||||||||||||||
Commodity contracts | $ | — | $ | 4,065 | $ | — | $ | 10,065 | |||||||
Long-term amounts | |||||||||||||||
Commodity contracts | — | 474 | — | 63 | |||||||||||
Total cash flow hedging instruments | — | 4,539 | — | 10,128 | |||||||||||
Derivatives not designated as cash flow hedges: | |||||||||||||||
Current amounts | |||||||||||||||
Commodity contracts | 12,838 | — | 113 | — | |||||||||||
Ethane put options | 1,523 | 309 | — | — | |||||||||||
Interest rate swap contracts | — | — | — | 470 | |||||||||||
Long-term amounts | |||||||||||||||
Commodity contracts | 1,872 | — | — | — | |||||||||||
Embedded derivatives in Series A Preferred Units | — | — | 30,644 | 39,049 | |||||||||||
Total derivatives not designated as cash flow hedges | 16,233 | 309 | 30,757 | 39,519 | |||||||||||
Total derivatives | $ | 16,233 | $ | 4,848 | $ | 30,757 | $ | 49,647 |
Three Months Ended June 30, | ||||||||||
2012 | 2011 | |||||||||
Derivatives in cash flow hedging relationships: | Change in Value Recognized in AOCI on Derivatives (Effective Portion) | |||||||||
Commodity derivatives | $ | — | $ | 1,530 | ||||||
Derivatives in cash flow hedging relationships: | Location of Gain/(Loss) Recognized in Income | Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) | ||||||||
Commodity derivatives | Revenues | $ | — | $ | (7,133 | ) | ||||
Derivatives in cash flow hedging relationships: | Location of Gain/(Loss) Recognized in Income | Amount of Gain/(Loss) Recognized in Income on Ineffective Portion | ||||||||
Commodity derivatives | Revenues | $ | — | $ | (362 | ) | ||||
Derivatives not designated in a hedging relationship: | Location of Gain/(Loss) Recognized in Income | Amount of Gain/(Loss) from Dedesignation Amortized from AOCI into Income | ||||||||
Commodity derivatives | Revenues | $ | (2,159 | ) | $ | — | ||||
Derivatives not designated in a hedging relationship: | Location of Gain/(Loss) Recognized in Income | Amount of Gain/(Loss) Recognized in Income on Derivatives | ||||||||
Commodity derivatives | Revenues | $ | 17,146 | $ | (47 | ) | ||||
Interest rate swap contracts | Interest expense, net | — | (228 | ) | ||||||
Embedded derivatives in Series A Preferred Units | Other income & deductions, net | 7,909 | 2,950 | |||||||
$ | 25,055 | $ | 2,675 |
Six Months Ended June 30, | ||||||||||
2012 | 2011 | |||||||||
Derivatives in cash flow hedging relationships: | Change in Value Recognized in AOCI on Derivatives (Effective Portion) | |||||||||
Commodity derivatives | $ | — | $ | (15,466 | ) | |||||
Derivatives in cash flow hedging relationships: | Location of Gain/(Loss) Recognized in Income | Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) | ||||||||
Commodity derivatives | Revenues | $ | — | $ | (8,994 | ) | ||||
Derivatives in cash flow hedging relationships: | Location of Gain/(Loss) Recognized in Income | Amount of Gain/(Loss) Recognized in Income on Ineffective Portion | ||||||||
Commodity derivatives | Revenues | $ | — | $ | (274 | ) | ||||
Derivatives not designated in a hedging relationship: | Location of Gain/(Loss) Recognized in Income | Amount of Gain/(Loss) from Dedesignation Amortized from AOCI into Income | ||||||||
Commodity derivatives | Revenues | $ | (5,824 | ) | $ | — | ||||
Derivatives not designated in a hedging relationship: | Location of Gain/(Loss) Recognized in Income | Amount of Gain/(Loss) Recognized in Income on Derivatives | ||||||||
Commodity derivatives | Revenues | $ | 19,627 | $ | 12 | |||||
Interest rate swap contracts | Interest expense, net | (12 | ) | (487 | ) | |||||
Embedded derivatives in Series A Preferred Units | Other income & deductions, net | 8,405 | 5,525 | |||||||
$ | 28,020 | $ | 5,050 |
June 30, 2012 | December 31, 2011 | ||||||
Senior notes | $ | 1,265,558 | $ | 1,355,147 | |||
Revolving loans | 515,000 | 332,000 | |||||
Total | 1,780,558 | 1,687,147 | |||||
Less: current portion | — | — | |||||
Long-term debt | $ | 1,780,558 | $ | 1,687,147 | |||
Availability under revolving credit facility: | |||||||
Total credit facility limit | $ | 900,000 | $ | 900,000 | |||
Revolving loans | (515,000 | ) | (332,000 | ) | |||
Letters of credit | (9,000 | ) | (19,000 | ) | |||
Total available | $ | 376,000 | $ | 549,000 |
Years Ending December 31, | Amount | ||||
2012 (remainder) | $ | — | |||
2013 | — | ||||
2014 | 515,000 | ||||
2015 | — | ||||
2016 | 162,500 | ||||
Thereafter | 1,100,000 | ||||
Total | $ | 1,777,500 | * |
* | Excludes unamortized premiums of $3.1 million as of June 30, 2012. |
Units | Amount | ||||||
Outstanding at beginning of period | 4,371,586 | $ | 71,144 | ||||
Accretion to redemption value | — | 1,226 | |||||
Outstanding at end of period | 4,371,586 | $ | 72,370 | * |
* | This amount will be accreted to $80 million plus any accrued but unpaid distributions and interest by deducting amounts from partners’ capital over the remaining periods until the mandatory redemption date of September 2, 2029. |
◦ | a 49.99% general partner interest in HPC, which owns RIGS, a 450 mile intrastate pipeline that delivers natural gas from northwest Louisiana to downstream pipelines and markets; |
◦ | a 50% membership interest in MEP, which owns an interstate natural gas pipeline with approximately 500 miles stretching from southeast Oklahoma through northeast Texas, northern Louisiana and central Mississippi to an interconnect with the Transcontinental Gas Pipe Line system in Butler, Alabama; and |
◦ | a 30% membership interest in Lone Star, an entity owning a diverse set of midstream energy assets including NGL pipelines, storage, fractionation and processing facilities located in the states of Texas, Mississippi and Louisiana. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
External Revenues | |||||||||||||||
Gathering and Processing | $ | 263,100 | $ | 303,203 | $ | 570,267 | $ | 569,175 | |||||||
Joint Ventures | — | — | — | — | |||||||||||
Contract Compression | 36,237 | 38,072 | 73,438 | 76,508 | |||||||||||
Contract Treating | 7,388 | 10,842 | 16,523 | 19,275 | |||||||||||
Corporate and Others | 5,251 | 4,381 | 9,647 | 8,792 | |||||||||||
Eliminations | — | — | — | — | |||||||||||
Total | $ | 311,976 | $ | 356,498 | $ | 669,875 | $ | 673,750 | |||||||
Intersegment Revenues | |||||||||||||||
Gathering and Processing | $ | — | $ | — | $ | — | $ | — | |||||||
Joint Ventures | — | — | — | — | |||||||||||
Contract Compression | 4,432 | 2,917 | 8,561 | 9,470 | |||||||||||
Contract Treating | 685 | — | 1,179 | — | |||||||||||
Corporate and Others | 53 | 110 | 109 | 177 | |||||||||||
Eliminations | (5,170 | ) | (3,027 | ) | (9,849 | ) | (9,647 | ) | |||||||
Total | $ | — | $ | — | $ | — | $ | — | |||||||
Segment Margin | |||||||||||||||
Gathering and Processing | $ | 79,416 | $ | 50,495 | $ | 150,751 | $ | 104,295 | |||||||
Joint Ventures | — | — | — | — | |||||||||||
Contract Compression | 38,015 | 36,973 | 77,001 | 78,413 | |||||||||||
Contract Treating | 7,241 | 7,701 | 15,124 | 14,952 | |||||||||||
Corporate and Others | 5,497 | 4,762 | 10,145 | 9,815 | |||||||||||
Eliminations | (5,008 | ) | (2,908 | ) | (9,614 | ) | (9,461 | ) | |||||||
Total | $ | 125,161 | $ | 97,023 | $ | 243,407 | $ | 198,014 | |||||||
Operation and Maintenance | |||||||||||||||
Gathering and Processing | $ | 28,791 | $ | 19,528 | $ | 57,014 | $ | 42,470 | |||||||
Joint Ventures | — | — | — | — | |||||||||||
Contract Compression | 14,142 | 16,310 | 30,549 | 32,702 | |||||||||||
Contract Treating | 822 | 675 | 1,666 | 1,409 | |||||||||||
Corporate and Others | 245 | 397 | 358 | 442 | |||||||||||
Eliminations | (5,008 | ) | (2,914 | ) | (9,614 | ) | (9,467 | ) | |||||||
Total | $ | 38,992 | $ | 33,996 | $ | 79,973 | $ | 67,556 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Total segment margin | $ | 125,161 | $ | 97,023 | $ | 243,407 | $ | 198,014 | |||||||
Operation and maintenance | (38,992 | ) | (33,996 | ) | (79,973 | ) | (67,556 | ) | |||||||
General and administrative | (16,476 | ) | (17,551 | ) | (32,171 | ) | (36,660 | ) | |||||||
Loss on asset sales, net | (1,548 | ) | (153 | ) | (1,584 | ) | (181 | ) | |||||||
Depreciation and amortization | (45,132 | ) | (40,503 | ) | (96,638 | ) | (80,739 | ) | |||||||
Income from unconsolidated affiliates | 34,185 | 32,167 | 66,143 | 55,975 | |||||||||||
Interest expense, net | (27,934 | ) | (24,689 | ) | (57,491 | ) | (44,696 | ) | |||||||
Loss on debt refinancing, net | (7,820 | ) | — | (7,820 | ) | — | |||||||||
Other income and deductions, net | 7,921 | 2,641 | 24,443 | * | 5,055 | ||||||||||
Income before income taxes | $ | 29,365 | $ | 14,939 | $ | 58,316 | $ | 29,212 |
* | Other income and deductions, net for the six months ended June 30, 2012 included a one-time producer payment of $15.6 million related to an assignment of certain contracts. |
June 30, 2012 | December 31, 2011 | ||||||
Gathering and Processing | $ | 2,062,306 | $ | 1,959,697 | |||
Joint Ventures | 2,080,163 | 1,924,705 | |||||
Contract Compression | 1,405,989 | 1,405,600 | |||||
Contract Treating | 219,377 | 215,172 | |||||
Corporate and Others | 64,727 | 62,682 | |||||
Total | $ | 5,832,562 | $ | 5,567,856 |
Phantom Units | Units | Weighted Average Grant Date Fair Value | ||||
Outstanding at beginning of period | 1,086,393 | $ | 24.51 | |||
Service condition grants | 7,250 | 24.40 | ||||
Vested service condition | (23,553 | ) | 22.96 | |||
Vested market condition | (10,200 | ) | 19.52 | |||
Forfeited service condition | (64,934 | ) | 24.90 | |||
Forfeited market condition | (3,750 | ) | 19.52 | |||
Outstanding at end of period | 991,206 | 24.59 |
Fair Value Measurements at June 30, 2012 | Fair Value Measurements at December 31, 2011 | ||||||||||||||||||||||
Fair Value Total | Significant Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | Fair Value Total | Significant Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||||
Assets: | |||||||||||||||||||||||
Commodity Derivatives: | |||||||||||||||||||||||
Natural Gas | $ | 3,055 | $ | 3,055 | $ | — | $ | 3,907 | $ | 3,907 | $ | — | |||||||||||
NGLs | 7,681 | 7,681 | — | 94 | 94 | — | |||||||||||||||||
Condensate | 3,974 | 3,974 | — | 538 | 538 | — | |||||||||||||||||
Ethane - Put Options | 1,523 | 1,523 | — | 309 | 309 | — | |||||||||||||||||
Total Assets | $ | 16,233 | $ | 16,233 | $ | — | $ | 4,848 | $ | 4,848 | $ | — | |||||||||||
Liabilities: | |||||||||||||||||||||||
Interest Rate Derivatives | $ | — | $ | — | $ | — | $ | 470 | $ | 470 | $ | — | |||||||||||
Commodity Derivatives: | |||||||||||||||||||||||
Natural Gas | 113 | 113 | — | — | — | — | |||||||||||||||||
NGLs | — | — | — | 8,561 | 8,561 | — | |||||||||||||||||
Condensate | — | — | — | 1,567 | 1,567 | — | |||||||||||||||||
Embedded Derivatives in Series A Preferred Units | 30,644 | — | 30,644 | 39,049 | — | 39,049 | |||||||||||||||||
Total Liabilities | $ | 30,757 | $ | 113 | $ | 30,644 | $ | 49,647 | $ | 10,598 | $ | 39,049 |
Unobservable Input | June 30, 2012 | |||
Credit Spread | 6.83 | % | ||
Volatility | 18.02 | % |
Embedded Derivatives in Series A Preferred Units | |||
Balance at December 31, 2011 | $ | 39,049 | |
Change in fair value | (8,405 | ) | |
Balance at June 30, 2012 | $ | 30,644 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | Gathering and Processing. We provide “wellhead-to-market” services to producers of natural gas, which include transporting raw natural gas from the wellhead through gathering systems, processing raw natural gas to separate NGLs and selling or delivering the pipeline-quality natural gas and NGLs to various markets and pipeline systems. This segment also includes our investment in Ranch JV, which processes natural gas delivered from the NGLs-rich Bone Spring and Avalon shale formations in west Texas. |
• | Joint Ventures. Our Joint Ventures segment includes the following: |
◦ | a 49.99% general partner interest in HPC, which owns RIGS, a 450 mile intrastate pipeline that delivers natural gas from northwest Louisiana to downstream pipelines and markets; |
◦ | a 50% membership interest in MEP, which owns an interstate natural gas pipeline with approximately 500 miles stretching from southeast Oklahoma through northeast Texas, northern Louisiana and central Mississippi to an interconnect with the Transcontinental Gas Pipe Line system in Butler, Alabama; and |
◦ | a 30% membership interest in Lone Star, an entity owning a diverse set of midstream energy assets including NGL pipelines, storage, fractionation and processing facilities located in the states of Texas, Mississippi and Louisiana. |
• | Contract Compression. We own and operate a fleet of compressors used to provide turn-key natural gas compression services for customer specific systems. |
• | Contract Treating. We own and operate a fleet of equipment used to provide treating services, such as carbon dioxide and hydrogen sulfide removal, natural gas cooling, dehydration and BTU management, to natural gas producers and midstream pipeline companies. |
• | Corporate and Others. Our Corporate and Others segment comprises a small regulated pipeline and our corporate offices. |
• | non-cash loss (gain) from commodity and embedded derivatives; |
• | non-cash unit-based compensation expenses; |
• | loss (gain) on asset sales, net; |
• | loss on debt refinancing, net; |
• | other non-cash (income) expense, net; |
• | net income attributable to noncontrolling interest; and |
• | our interest in adjusted EBITDA from unconsolidated affiliates less income from unconsolidated affiliates. |
• | 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 or capital structure; and |
• | the viability of acquisitions and capital expenditure projects. |
Six Months Ended June 30, | |||||||
Reconciliation of “Adjusted EBITDA” to net cash flows provided by operating activities and net income | 2012 | 2011 | |||||
Net cash flows provided by operating activities | $ | 102,196 | $ | 121,114 | |||
Add (deduct): | |||||||
Depreciation and amortization, including debt issuance cost and bond premium amortization | (99,359 | ) | (83,587 | ) | |||
Income from unconsolidated affiliates | 66,143 | 55,975 | |||||
Derivative valuation changes | 24,450 | 5,826 | |||||
Loss on asset sales, net | (1,584 | ) | (181 | ) | |||
Unit-based compensation expenses | (2,294 | ) | (1,747 | ) | |||
Trade accounts receivable, accrued revenues and related party receivables | (21,052 | ) | 8,847 | ||||
Other current assets | (179 | ) | (964 | ) | |||
Trade accounts payable, accrued cost of gas and liquids, related party payables and deferred revenues | 51,903 | (28,577 | ) | ||||
Other current liabilities | 976 | 2,764 | |||||
Distributions received from unconsolidated affiliates | (63,096 | ) | (50,510 | ) | |||
Other assets and liabilities | 123 | 182 | |||||
Net income | 58,227 | 29,142 | |||||
Add: | |||||||
Interest expense, net | 57,491 | 44,696 | |||||
Depreciation and amortization expense | 96,638 | 80,739 | |||||
Income tax expense | 89 | 70 | |||||
EBITDA | 212,445 | 154,647 | |||||
Add (deduct): | |||||||
Non-cash gain from commodity and embedded derivatives | (23,977 | ) | (5,093 | ) | |||
Unit-based compensation expenses | 2,294 | 1,796 | |||||
Loss on asset sales, net | 1,584 | 181 | |||||
Loss on debt refinancing, net | 7,820 | — | |||||
Income from unconsolidated affiliates | (66,143 | ) | (55,975 | ) | |||
Partnership’s interest in unconsolidated affiliates' adjusted EBITDA | 116,381 | 99,872 | |||||
Other expense (income), net | (1,083 | ) | (235 | ) | |||
Adjusted EBITDA | $ | 249,321 | $ | 195,193 |
Six Months Ended June 30, 2012 | |||||||||||||||||||
HPC | MEP | Lone Star | Ranch JV | Total | |||||||||||||||
Net income (loss) | $ | 48,844 | $ | 41,871 | $ | 79,101 | $ | (51 | ) | ||||||||||
Add: | |||||||||||||||||||
Depreciation and amortization | 18,202 | 34,721 | 24,905 | 55 | |||||||||||||||
Interest expense, net | 940 | 25,793 | — | — | |||||||||||||||
Adjusted EBITDA | 67,986 | 102,385 | 104,006 | 4 | |||||||||||||||
Ownership interest | 49.99 | % | 50 | % | 30 | % | 33.33 | % | |||||||||||
Partnership's interest in adjusted EBITDA | $ | 33,986 | $ | 51,193 | $ | 31,201 | $ | 1 | $ | 116,381 |
Six Months Ended June 30, 2011 | |||||||||||||||||
HPC | MEP | Lone Star(1) | Ranch JV | Total | |||||||||||||
Net income | $ | 60,421 | $ | 40,686 | 27,958 | N/A | |||||||||||
Add: | |||||||||||||||||
Depreciation and amortization | 16,746 | 34,775 | 7,139 | N/A | |||||||||||||
Interest expense, net | 387 | 25,768 | — | N/A | |||||||||||||
Other expense, net | 11 | — | 185 | N/A | |||||||||||||
Adjusted EBITDA | 77,565 | 101,229 | 35,282 | N/A | |||||||||||||
Ownership interest | 49.99 | % | 49.9 | % | 30 | % | N/A | ||||||||||
Partnership's interest in adjusted EBITDA | $ | 38,775 | $ | 50,513 | $ | 10,584 | N/A | $ | 99,872 |
(1) | For the period from initial contribution, May 2, 2011, to June 30, 2011. |
N/A | We acquired a 33.33% membership interest in Ranch JV in December 2011. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net income | $ | 29,327 | $ | 14,837 | $ | 58,227 | $ | 29,142 | |||||||
Add (deduct): | |||||||||||||||
Operation and maintenance | 38,992 | 33,996 | 79,973 | 67,556 | |||||||||||
General and administrative | 16,476 | 17,551 | 32,171 | 36,660 | |||||||||||
Loss on asset sales, net | 1,548 | 153 | 1,584 | 181 | |||||||||||
Depreciation and amortization | 45,132 | 40,503 | 96,638 | 80,739 | |||||||||||
Income from unconsolidated affiliates | (34,185 | ) | (32,167 | ) | (66,143 | ) | (55,975 | ) | |||||||
Interest expense, net | 27,934 | 24,689 | 57,491 | 44,696 | |||||||||||
Loss on debt refinancing, net | 7,820 | — | 7,820 | — | |||||||||||
Other income and deductions, net | (7,921 | ) | (2,641 | ) | (24,443 | ) | (5,055 | ) | |||||||
Income tax expense | 38 | 102 | 89 | 70 | |||||||||||
Total segment margin | 125,161 | 97,023 | 243,407 | 198,014 | |||||||||||
Add (deduct): | |||||||||||||||
Non-cash (gain) loss from commodity derivatives | (13,953 | ) | 2,147 | (15,572 | ) | 432 | |||||||||
Adjusted total segment margin | $ | 111,208 | $ | 99,170 | $ | 227,835 | $ | 198,446 |
Three Months Ended June 30, | ||||||||||||||
2012 | 2011 | Change | Percent | |||||||||||
Total revenues | $ | 311,976 | $ | 356,498 | $ | (44,522 | ) | 12 | % | |||||
Cost of sales | 186,815 | 259,475 | 72,660 | 28 | ||||||||||
Total segment margin (1) | 125,161 | 97,023 | 28,138 | 29 | ||||||||||
Operation and maintenance | 38,992 | 33,996 | (4,996 | ) | 15 | |||||||||
General and administrative | 16,476 | 17,551 | 1,075 | 6 | ||||||||||
Loss on asset sales, net | 1,548 | 153 | (1,395 | ) | 912 | |||||||||
Depreciation and amortization | 45,132 | 40,503 | (4,629 | ) | 11 | |||||||||
Operating income | 23,013 | 4,820 | 18,193 | 377 | ||||||||||
Income from unconsolidated affiliates | 34,185 | 32,167 | 2,018 | 6 | ||||||||||
Interest expense, net | (27,934 | ) | (24,689 | ) | (3,245 | ) | 13 | |||||||
Loss on debt refinancing, net | (7,820 | ) | — | (7,820 | ) | 100 | ||||||||
Other income and deductions, net | 7,921 | 2,641 | 5,280 | 200 | ||||||||||
Income before income taxes | 29,365 | 14,939 | 14,426 | 97 | ||||||||||
Income tax expense | 38 | 102 | 64 | 63 | ||||||||||
Net income | 29,327 | 14,837 | 14,490 | 98 | ||||||||||
Net income attributable to noncontrolling interest | (649 | ) | (293 | ) | (356 | ) | 122 | |||||||
Net income attributable to Regency Energy Partners LP | $ | 28,678 | $ | 14,544 | $ | 14,134 | 97 | |||||||
Gathering and processing segment margin | $ | 79,416 | $ | 50,495 | $ | 28,921 | 57 | |||||||
Non-cash (gain) loss from commodity derivatives | (13,953 | ) | 2,147 | (16,100 | ) | 750 | ||||||||
Adjusted gathering and processing segment margin | 65,463 | 52,642 | 12,821 | 24 | ||||||||||
Contract compression segment margin (2) | 38,015 | 36,973 | 1,042 | 3 | ||||||||||
Contract treating segment margin (2) | 7,241 | 7,701 | (460 | ) | 6 | |||||||||
Corporate and others segment margin | 5,497 | 4,762 | 735 | 15 | ||||||||||
Intersegment eliminations (2) | (5,008 | ) | (2,908 | ) | (2,100 | ) | 72 | |||||||
Adjusted total segment margin | $ | 111,208 | $ | 99,170 | $ | 12,038 | 12 | % |
(1) | For a reconciliation of segment margin to the most directly comparable financial measure calculated and presented in accordance with GAAP, see the reconciliation provided above. |
(2) | Contract Compression and Contract Treating segment margin includes intersegment revenues of $4.4 million and $0.6 million, respectively, for the three months ended June 30, 2012 and $2.9 million and $0 million, respectively, for the three months ended June 30, 2011. These intersegment revenues were eliminated upon consolidation. |
• | $28.1 million increase in total segment margin primarily due to increased volumes in south and west Texas and north Louisiana in our Gathering and Processing segment; |
• | $5.3 million increase in other income and deductions, net primarily due to the non-cash mark-to-market gain in the embedded derivative related to the Series A Units; |
• | $2 million increase in income from unconsolidated affiliates primarily due to our acquisition of a 30% interest in Lone Star in May 2011; offset by |
• | $7.8 million net loss on debt refinancing related to the redemption of 35% of our outstanding senior notes due 2016 at a price of 109.375% of the principal amount plus accrued interest in May 2012; |
• | $5 million increase in operation and maintenance expenses primarily related to an increase in pipeline and plant operating expenses associated with increased activity in south and west Texas; |
• | $4.6 million increase in depreciation and amortization expense primarily related to the completion of various organic growth projects since June 2011; and |
• | $3.2 million increase in interest expense primarily related to the interest associated with the $500 million senior notes we issued in May 2011. |
• | Adjusted Gathering and Processing segment margin increased to $65.5 million during the three months ended June 30, 2012 from $52.6 million for the three months ended June 30, 2011 primarily due to volume growth in south and west Texas and north Louisiana. Total Gathering and Processing throughput increased to 1,380,000 MMBtu/d during the three months ended June 30, 2012 from 1,063,000 MMBtu/d during the three months ended June 30, 2011. Total NGL gross production increased to 37,200 Bbls/d during the three months ended June 30, 2012 from 28,000 Bbls/d during the three months ended June 30, 2011; |
• | Contract Compression segment margin increased to $38 million in the three months ended June 30, 2012 from $37 million in the three months ended June 30, 2011. Contract Compression segment margin includes both revenues from external customers as well as intersegment revenues. The increase in segment margin is primarily due to the increase in revenue generating horsepower, inclusive of intersegment revenue generating horsepower. Revenue generating horsepower, inclusive of intersegment revenue generating horsepower, increased to 825,000 as of June 30, 2012 from 811,000 as of June 30, 2011. The increase in revenue generating horsepower is primarily attributable to additional horsepower placed into service in south Texas for the Gathering and Processing segment to provide compression services to external customers; |
• | Contract Treating segment margin decreased to $7.2 million for the three months ended June 30, 2012 from $7.7 million for the three months ended June 30, 2011. Revenue generating GPM as of June 30, 2012 and June 30, 2011 was 3,773 and 3,368, respectively. The increase in revenue generating GPM was primarily due to a 400 GPM amine plant went on line in June 2012; and |
• | Intersegment eliminations increased to $5 million in the three months ended June 30, 2012 from $2.9 million in the three months ended June 30, 2011. The increase was primarily due to an increase in transactions between the Gathering and Processing and the Contract Compression segments as a result of additional horsepower placed into service in south Texas for the Gathering and Processing segment to provide compression services to external customers. |
• | $4.1 million increase in pipeline and plant operating expenses primarily related to increased activity in south and west Texas; and |
• | $1.3 million increase in compressor maintenance expense primarily due to increases in lubricants, maintenance, rental, and materials costs. |
• | $0.8 million decrease in employee related costs due to the shared services integration and reduction in employee headcount; and |
• | $0.4 million decrease in office expenses and legal fees. |
Three Months Ended June 30, 2012 | ||||||||||||||||||||
HPC | MEP | Lone Star | Ranch JV | Total | ||||||||||||||||
Net income (loss) | $ | 26,222 | $ | 20,377 | $ | 41,220 | $ | (27 | ) | |||||||||||
Ownership interest | 49.99 | % | 50 | % | 30 | % | 33.33 | % | ||||||||||||
Share of unconsolidated affiliates’ net income (loss) | 13,108 | 10,189 | 12,366 | (17 | ) | |||||||||||||||
Less: Amortization of excess fair value of unconsolidated affiliates | (1,461 | ) | — | — | — | |||||||||||||||
Income (loss) from unconsolidated affiliates | $ | 11,647 | $ | 10,189 | $ | 12,366 | $ | (17 | ) | $ | 34,185 | |||||||||
Three Months Ended June 30, 2011 | ||||||||||||||||||||
HPC | MEP | Lone Star(1) | Ranch JV | Total | ||||||||||||||||
Net income | $ | 30,265 | $ | 20,276 | $ | 27,958 | N/A | |||||||||||||
Ownership interest | 49.99 | % | 49.9 | % | 30 | % | N/A | |||||||||||||
Share of unconsolidated affiliates’ net income | 15,130 | 10,110 | 8,388 | N/A | ||||||||||||||||
Less: Amortization of excess fair value of unconsolidated affiliates | (1,461 | ) | — | — | N/A | |||||||||||||||
Income from unconsolidated affiliates | $ | 13,669 | $ | 10,110 | $ | 8,388 | N/A | $ | 32,167 |
(1) | For the period from initial contribution, May 2, 2011, to June 30, 2011. |
N/A | We acquired a 33.33% membership interest in Ranch JV in December 2011. |
Three Months Ended June 30, | ||||||||
Operational data | 2012 | 2011 | ||||||
HPC | Throughput (MMBtu/d) | 903,344 | 1,528,333 | |||||
MEP | Throughput (MMBtu/d) | 1,418,206 | 1,197,520 | |||||
Lone Star | West Texas Pipeline – Throughput (Bbls/d) (1) | 133,429 | 128,127 | |||||
NGL Fractionation Throughput (Bbls/d) (1) | 20,575 | 14,806 | ||||||
Ranch JV | Throughput (MMBtu/d) (2) | 4,744 | N/A |
(1) | Lone Star's operational volumes represent the period from initial contribution, May 2, 2011, to June 30, 2011. |
(2) | Ranch JV began operations in June 2012. |
N/A | We acquired a 33.33% membership interest in Ranch JV in December 2011. |
Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | Change | Percent | |||||||||||
Total revenues | $ | 669,875 | $ | 673,750 | $ | (3,875 | ) | 1 | % | |||||
Cost of sales | 426,468 | 475,736 | 49,268 | 10 | ||||||||||
Total segment margin (1) | 243,407 | 198,014 | 45,393 | 23 | ||||||||||
Operation and maintenance | 79,973 | 67,556 | (12,417 | ) | 18 | |||||||||
General and administrative | 32,171 | 36,660 | 4,489 | 12 | ||||||||||
Loss on asset sales, net | 1,584 | 181 | (1,403 | ) | 775 | |||||||||
Depreciation and amortization | 96,638 | 80,739 | (15,899 | ) | 20 | |||||||||
Operating income | 33,041 | 12,878 | 20,163 | 157 | ||||||||||
Income from unconsolidated affiliates | 66,143 | 55,975 | 10,168 | 18 | ||||||||||
Interest expense, net | (57,491 | ) | (44,696 | ) | (12,795 | ) | 29 | |||||||
Loss on debt refinancing, net | (7,820 | ) | — | (7,820 | ) | 100 | ||||||||
Other income and deductions, net | 24,443 | 5,055 | 19,388 | 384 | ||||||||||
Income before income taxes | 58,316 | 29,212 | 29,104 | 100 | ||||||||||
Income tax expense | 89 | 70 | (19 | ) | 27 | |||||||||
Net income | 58,227 | 29,142 | 29,085 | 100 | ||||||||||
Net income attributable to noncontrolling interest | (1,048 | ) | (524 | ) | (524 | ) | 100 | |||||||
Net income attributable to Regency Energy Partners LP | $ | 57,179 | $ | 28,618 | $ | 28,561 | 100 | |||||||
Gathering and processing segment margin | $ | 150,751 | $ | 104,295 | $ | 46,456 | 45 | |||||||
Non-cash (gain) loss from commodity derivatives | (15,572 | ) | 432 | (16,004 | ) | 3,705 | ||||||||
Adjusted gathering and processing segment margin | 135,179 | 104,727 | 30,452 | 29 | ||||||||||
Contract compression segment margin (2) | 77,001 | 78,413 | (1,412 | ) | 2 | |||||||||
Contract treating segment margin (2) | 15,124 | 14,952 | 172 | 1 | ||||||||||
Corporate and others segment margin | 10,145 | 9,815 | 330 | 3 | ||||||||||
Intersegment eliminations (2) | (9,614 | ) | (9,461 | ) | (153 | ) | 2 | |||||||
Adjusted total segment margin | $ | 227,835 | $ | 198,446 | $ | 29,389 | 15 | % |
(1) | For a reconciliation of segment margin to the most directly comparable financial measure calculated and presented in accordance with GAAP, see the reconciliation provided above. |
(2) | Contract Compression and Contract Treating segment margin includes intersegment revenues of $8.5 million and $1.1 million, respectively, for the six months ended June 30, 2012 and $9.5 million and $0 million, respectively, for the six months ended June 30, 2011. These intersegment revenues were eliminated upon consolidation. |
• | $45.4 million increase in total segment margin primarily due to increased volumes in south and west Texas and north Louisiana in our Gathering and Processing segment; |
• | $19.4 million increase in other income and deductions, net primarily due to a $15.6 million one-time producer payment received in March 2012 related to an assignment of certain contracts as well as an increase in the non-cash mark-to-market gain in the embedded derivative related to the Series A Units; |
• | $10.2 million increase in income from unconsolidated affiliates primarily due to our acquisition of a 30% interest in Lone Star in May 2011; |
• | $4.5 million decrease in general and administrative expenses primarily due to decreases in employee related costs, professional fees and office expenses; offset by |
• | $15.9 million increase in depreciation and amortization expense primarily related to the completion of various organic growth projects since July 2011, as well as an out of period adjustment of $6.9 million recorded in March 2012 (further discussed below); |
• | $12.8 million increase in interest expense primarily related to the interest associated with the $500 million senior notes we issued in May 2011; |
• | $12.4 million increase in operation and maintenance expense primarily related to increased pipeline and plant operating expenses associated with increased activity in south and west Texas; and |
• | $7.8 million net loss on debt refinancing related to the redemption of 35% of our outstanding senior notes due 2016 at a price of 109.375% of the principal amount plus accrued interest in May 2012. |
• | Adjusted Gathering and Processing segment margin increased to $135.2 million during the six months ended June 30, 2012 from $104.7 million for the six months ended June 30, 2011 primarily due to volume growth in south and west Texas and north Louisiana. Total Gathering and Processing throughput increased to 1,384,000 MMBtu/d during the six months ended June 30, 2012 from 1,034,000 MMBtu/d during the six months ended June 30, 2011. Total NGL gross production increased to 37,400 Bbls/d during the six months ended June 30, 2012 from 28,000 Bbls/d during the six months ended June 30, 2011; |
• | Contract Compression segment margin decreased to $77 million in the six months ended June 30, 2012 from $78.4 million in the six months ended June 30, 2011. Contract Compression segment margin includes both revenues from external customers as well as intersegment revenues. The decrease in segment margin is primarily due to the transfer of certain compression units from the Contract Compression segment to the Gathering and Processing segment in the three months ended June 30, 2011, offset by the increase in revenue generating horsepower, inclusive of intersegment revenue generating horsepower. Revenue generating horsepower, inclusive of intersegment revenue generating horsepower, increased to 825,000 as of June 30, 2012 from 811,000 as of June 30, 2011. The increase in revenue generating horsepower is primarily attributable to additional horsepower placed into service in south Texas for the Gathering and Processing segment to provide compression services to external customers; |
• | Contract Treating segment margin increased to $15.1 million for the six months ended June 30, 2012 from $15 million for the six months ended June 30, 2011. Revenue generating GPM as of June 30, 2012 and June 30, 2011 was 3,773 and 3,368, respectively. The increase in revenue generating GPM was primarily due to a 400 GPM amine plant went on line in June 2012; and |
• | Intersegment eliminations increased to $9.6 million in the six months ended June 30, 2012 from $9.5 million in the six months ended June 30, 2011. The increase was primarily due to a increase in transactions between the Gathering and Processing and the Contract Treating segments as a result of additional services provided in south Texas for the Gathering and Processing segment to provide treating services to external customers. |
• | $6.8 million increase in pipeline and plant operating expenses primarily related to increased activity in south and west Texas; |
• | $3.2 million increase in compressor maintenance expense primarily due to an increase in lubricants, maintenance, rental, and materials costs; and |
• | $2.3 million increase in employee related costs primarily due to organic growth projects in south and west Texas. |
• | $2.1 million decrease in employee related costs due to the shared services integration and subsequent reduction in employee headcount; |
• | $1.3 million decrease in professional fees related to lower legal and investor fees; and |
• | $1 million decrease in office expenses primarily due to lower rent and utilities expenses. |
Six Months Ended June 30, 2012 | ||||||||||||||||||||
HPC | MEP | Lone Star | Ranch JV | Total | ||||||||||||||||
Net income (loss) | $ | 48,844 | $ | 41,871 | $ | 79,101 | $ | (51 | ) | |||||||||||
Ownership interest | 49.99 | % | 50 | % | 30 | % | 33.33 | % | ||||||||||||
Share of unconsolidated affiliates’ net income (loss) | 24,417 | 20,936 | 23,730 | (17 | ) | |||||||||||||||
Less: Amortization of excess fair value of unconsolidated affiliates | (2,923 | ) | — | — | — | |||||||||||||||
Income (loss) from unconsolidated affiliates | $ | 21,494 | $ | 20,936 | $ | 23,730 | $ | (17 | ) | $ | 66,143 | |||||||||
Six Months Ended June 30, 2011 | ||||||||||||||||||||
HPC | MEP | Lone Star(1) | Ranch JV | Total | ||||||||||||||||
Net income | $ | 60,421 | $ | 40,686 | $ | 27,958 | N/A | |||||||||||||
Ownership interest | 49.99 | % | 49.9 | % | 30 | % | N/A | |||||||||||||
Share of unconsolidated affiliates’ net income | 30,205 | 20,305 | 8,388 | N/A | ||||||||||||||||
Less: Amortization of excess fair value of unconsolidated affiliates | (2,923 | ) | — | — | N/A | |||||||||||||||
Income from unconsolidated affiliates | $ | 27,282 | $ | 20,305 | $ | 8,388 | N/A | $ | 55,975 |
(1) | For the period from initial contribution, May 2, 2011, to June 30, 2011. |
N/A | We acquired a 33.33% membership interest in Ranch JV in December 2011. |
Six Months Ended June 30, | ||||||||
Operational data | 2012 | 2011 | ||||||
HPC | Throughput (MMBtu/d) | 922,241 | 1,522,515 | |||||
MEP | Throughput (MMBtu/d) | 1,423,764 | 1,208,614 | |||||
Lone Star | West Texas Pipeline – Throughput (Bbls/d) (1) | 134,022 | 128,127 | |||||
NGL Fractionation Throughput (Bbls/d) (1) | 19,910 | 14,806 | ||||||
Ranch JV | Throughput (MMBtu/d) (2) | 4,744 | N/A |
(1) | Lone Star's operational volumes represent the period from initial contribution, May 2, 2011, to June 30, 2011. |
(2) | Ranch JV began operations in June 2012. |
N/A | We acquired a 33.33% membership interest in Ranch JV in December 2011. |
• | cash generated from operations and occasional asset sales; |
• | borrowings under our revolving credit facility; |
• | distributions received from unconsolidated affiliates; |
• | debt offerings; and |
• | issuance of additional partnership units. |
2012 | |||
Growth Capital Expenditures | |||
Gathering and Processing segment (1)(2) | $ | 310 | |
Contract Compression segment | 70 | ||
Contract Treating segment | 40 | ||
Joint Ventures segment: | |||
Lone Star (2) | 350 - 400 | ||
Corporate and Others segment | 5 | ||
Total | $ 775 - 825 | ||
Maintenance Capital Expenditures; including our proportionate share related to our joint ventures | $ | 28 |
Six Months Ended June 30, | ||||||||
2012 | 2011 | |||||||
HPC | $ | 30,030 | $ | 34,841 | ||||
MEP (1) | 38,182 | 43,659 | ||||||
Lone Star | 17,743 | — | (2) | |||||
$ | 85,955 | $ | 78,500 |
(1) | The decrease in MEP distributions is primarily due to an additional payment in 2011 as a result of change in its monthly distribution practice made in January 2011 whereby distributions are now paid concurrently as opposed to a month lag. |
Item 3. | Quantitative and Qualitative Disclosure about Market Risk |
Period | Underlying | Notional Volume/ Amount | We Pay | We Receive Weighted Average Price | Fair Value Asset/ (Liability) | Effect of Hypothetical Change in Index* | ||||||||||||||
(in thousands) | ||||||||||||||||||||
July 2012-September 2012 | Ethane | 47 | (MBbls) | Index | 0.47 | ($/gallon) | $ | 311 | $ | 62 | ||||||||||
July 2012-December 2012 | Ethane- Put Option | 110 | (MBbls) | Index | 0.66 | ($/gallon) | 1,523 | 153 | ||||||||||||
July 2012- March 2013 | Propane | 185 | (MBbls) | Index | 1.26 | ($/gallon) | 3,134 | 665 | ||||||||||||
July 2012- September 2013 | Normal Butane | 179 | (MBbls) | Index | 1.75 | ($/gallon) | 3,364 | 981 | ||||||||||||
July 2012- March 2013 | Natural Gasoline | 51 | (MBbls) | Index | 2.19 | ($/gallon) | 872 | 387 | ||||||||||||
July 2012- December 2014 | West Texas Intermediate Crude | 344 | (MBbls) | Index | 99.11 | ($/Bbl) | 3,974 | 2,998 | ||||||||||||
July 2012- June 2014 | Natural Gas | 5,297,000 | (MMBtu) | Index | 4.05 | ($/MMBtu) | 2,942 | 1,842 | ||||||||||||
Total Fair Value | $ | 16,120 |
* | Price risk sensitivities were calculated by assuming a theoretical 10% change, increase or decrease, in prices regardless of the term or the historical relationships between the contractual price of the instrument and the underlying commodity price. These price sensitivity results are presented in absolute terms. |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
Exhibit 31.1 – | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer | |
Exhibit 31.2 – | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer | |
Exhibit 32.1 – | Section 1350 Certifications of Chief Executive Officer | |
Exhibit 32.2 – | Section 1350 Certifications of Chief Financial Officer | |
Exhibit 101.INS – | XBRL Instance Document | |
Exhibit 101.SCH – | XBRL Taxonomy Extension Schema | |
Exhibit 101.CAL – | XBRL Taxonomy Extension Calculation Linkbase | |
Exhibit 101.DEF – | XBRL Taxonomy Extension Definition Linkbase | |
Exhibit 101.LAB – | XBRL Taxonomy Extension Label Linkbase | |
Exhibit 101.PRE – | XBRL Taxonomy Extension Presentation Linkbase |
REGENCY ENERGY PARTNERS LP By: Regency GP LP, its general partner By: Regency GP LLC, its general partner | ||
Date: | August 8, 2012 | /S/ A. TROY STURROCK |
A. Troy Sturrock Vice President, Controller and Principal Accounting Officer (Duly Authorized Officer) |
Date: | August 8, 2012 | /s/ Michael J. Bradley |
Michael J. Bradley President and Chief Executive Officer of Regency GP LLC, general partner of Regency GP LP, general partner of Regency Energy Partners LP |
Date: | August 8, 2012 | /s/ Thomas E. Long |
Thomas E. Long Executive Vice President and Chief Financial Officer of Regency GP LLC, general partner of Regency GP LP, general partner of Regency Energy Partners LP |
Date: | August 8, 2012 | /s/ Michael J. Bradley |
Michael J. Bradley President and Chief Executive Officer of Regency GP LLC, general partner of Regency GP LP, general partner of Regency Energy Partners LP |
Date: | August 8, 2012 | /s/ Thomas E. Long |
Thomas E. Long Executive Vice President and Chief Financial Officer of Regency GP LLC, general partner of Regency GP LP, general partner of Regency Energy Partners LP |
Derivative Instruments (Narrative) (Details) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2012
|
---|---|
Hedging gains or losses amortized in accumulated other comprehensive income loss | $ 1.1 |
Amortization period of deferred gain loss on discontinuation of cash flow hedge | 1.75 |
Expired interest rate swaps | 250 |
One year from balance sheet date [Member]
|
|
Hedging gains or losses amortized in accumulated other comprehensive income loss | 0.8 |
Maximum [Member]
|
|
Credit risk of derivatives | $ 16.2 |
Fair Value Measures (Narrative) (Details) (Details) (USD $)
In Billions, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Fair Value Measures [Abstract] | ||
Senior notes, fair value | $ 1.35 | $ 1.44 |
Senior notes, carrying value | $ 1.26 | $ 1.35 |
Segment Information (Narrative) (Details)
|
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
HPC [Member]
|
|
Ownership interest in affiliate | 49.99% |
Natural gas pipeline length, miles | 450 |
MEP [Member]
|
|
Ownership interest in affiliate | 50.00% |
Natural gas pipeline length, miles | 500 |
Lone Star [Member]
|
|
Ownership interest in affiliate | 30.00% |
Fair Value Measures (Partnership's Derivative Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Fair Value Measurement, Assets | $ 16,233 | $ 4,848 |
Fair Value, Measurements, Recurring [Member]
|
||
Fair Value Measurement, Assets | 16,233 | 4,848 |
Interest Rate Derivatives | 0 | 470 |
Fair Value Measurement, Liabilities | 30,757 | 49,647 |
Fair Value, Measurements, Recurring [Member] | Significant Observable Inputs (Level 2) [Member]
|
||
Fair Value Measurement, Assets | 16,233 | 4,848 |
Interest Rate Derivatives | 0 | 470 |
Fair Value Measurement, Liabilities | 113 | 10,598 |
Fair Value, Measurements, Recurring [Member] | Unobservable Inputs (Level 3) [Member]
|
||
Fair Value Measurement, Assets | 0 | 0 |
Interest Rate Derivatives | 0 | 0 |
Fair Value Measurement, Liabilities | 30,644 | 39,049 |
Fair Value, Measurements, Recurring [Member] | Natural Gas [Member]
|
||
Fair Value Measurement, Assets | 3,055 | 3,907 |
Fair Value Measurement, Liabilities | 113 | 0 |
Fair Value, Measurements, Recurring [Member] | Natural Gas [Member] | Significant Observable Inputs (Level 2) [Member]
|
||
Fair Value Measurement, Assets | 3,055 | 3,907 |
Fair Value Measurement, Liabilities | 113 | 0 |
Fair Value, Measurements, Recurring [Member] | Natural Gas [Member] | Unobservable Inputs (Level 3) [Member]
|
||
Fair Value Measurement, Assets | 0 | 0 |
Fair Value Measurement, Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | NGLs [Member]
|
||
Fair Value Measurement, Assets | 7,681 | 94 |
Fair Value Measurement, Liabilities | 0 | 8,561 |
Fair Value, Measurements, Recurring [Member] | NGLs [Member] | Significant Observable Inputs (Level 2) [Member]
|
||
Fair Value Measurement, Assets | 7,681 | 94 |
Fair Value Measurement, Liabilities | 0 | 8,561 |
Fair Value, Measurements, Recurring [Member] | NGLs [Member] | Unobservable Inputs (Level 3) [Member]
|
||
Fair Value Measurement, Assets | 0 | 0 |
Fair Value Measurement, Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Condensate [Member]
|
||
Fair Value Measurement, Assets | 3,974 | 538 |
Fair Value Measurement, Liabilities | 0 | 1,567 |
Fair Value, Measurements, Recurring [Member] | Condensate [Member] | Significant Observable Inputs (Level 2) [Member]
|
||
Fair Value Measurement, Assets | 3,974 | 538 |
Fair Value Measurement, Liabilities | 0 | 1,567 |
Fair Value, Measurements, Recurring [Member] | Condensate [Member] | Unobservable Inputs (Level 3) [Member]
|
||
Fair Value Measurement, Assets | 0 | 0 |
Fair Value Measurement, Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Ethane - put option [Member]
|
||
Fair Value Measurement, Assets | 1,523 | 309 |
Embedded Derivatives in Series A Preferred Units | 30,644 | 39,049 |
Fair Value, Measurements, Recurring [Member] | Ethane - put option [Member] | Significant Observable Inputs (Level 2) [Member]
|
||
Fair Value Measurement, Assets | 1,523 | 309 |
Embedded Derivatives in Series A Preferred Units | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Ethane - put option [Member] | Unobservable Inputs (Level 3) [Member]
|
||
Fair Value Measurement, Assets | 0 | 0 |
Embedded Derivatives in Series A Preferred Units | $ 30,644 | $ 39,049 |
Series A Convertible Redeemable Preferred Units (Beginning And Ending Balances Of The Series A Preferred Units) (Details) (USD $)
|
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2012
|
Sep. 02, 2009
|
||||
Temporary Equity Disclosure [Abstract] | |||||
Beginning balance Series A Preferred Units, shares | 4,371,586 | 4,371,586 | |||
Accretion of Series A Preferred Units, shares | 0 | ||||
Ending balance Series A Preferred Units, shares | 4,371,586 | 4,371,586 | |||
Beginning balance Series A Preferred Units | $ 71,144,000 | ||||
Accretion of Series A Preferred Units | 1,226,000 | ||||
Ending balance Series A Preferred Units | 72,370,000 | [1] | |||
Mandatorily redeemable all accrued but unpaid distributions | $ 80,000,000 | ||||
Preferred Stock, Redemption Date | Sep. 02, 2029 | ||||
|
Partners' Capital and Distributions (Details) (USD $)
|
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Distribution Made to Member or Limited Partner [Line Items] | ||||||
Dividends payable, date of record, day, month and year | Aug. 06, 2012 | May 07, 2012 | Feb. 06, 2012 | |||
Dividends payable, date to be paid, day, month and year | Aug. 14, 2012 | May 14, 2012 | Feb. 13, 2012 | |||
Distributions per common unit | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.45 | $ 0.92 | $ 0.895 |
Fair Value Measures (Changes In Level 3 Derivatives Measured On A Recurring Basis) (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Fair Value Measures [Abstract] | |
Beginning balance | $ 39,049 |
Change in fair value | (8,405) |
Ending balance | $ 30,644 |
Derivative Instruments (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Derivative Assets And Liabilities Statement | The Partnership’s derivative assets and liabilities, including credit risk adjustments, as of June 30, 2012 and December 31, 2011 are detailed below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Detail Effect Of Derivative Assets And Liabilities In Statement Of Operations | The Partnership’s statements of operations and comprehensive income for the three and six months ended June 30, 2012 and 2011 were impacted by derivative instruments activities as follows:
|
Segment Information (Reconciliation Of Total Segment Margin To Net Income (Loss) From Continuing Operations Before Income Taxes) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
||||
Segment Reporting Information [Line Items] | |||||||
Total segment margin | $ 125,161 | $ 97,023 | $ 243,407 | $ 198,014 | |||
Operation and maintenance | (38,992) | (33,996) | (79,973) | (67,556) | |||
General and administrative, including related party | (16,476) | (17,551) | (32,171) | (36,660) | |||
Loss on asset sales, net | (1,548) | (153) | (1,584) | (181) | |||
Depreciation and amortization | (45,132) | (40,503) | (96,638) | (80,739) | |||
Income from unconsolidated affiliates | 34,185 | 32,167 | 66,143 | 55,975 | |||
Interest expense, net | (27,934) | (24,689) | (57,491) | (44,696) | |||
Gains (losses) on extinguishment of debt, net | (7,820) | 0 | (7,820) | 0 | |||
Other income and deductions, net | 7,921 | 2,641 | 24,443 | [1] | 5,055 | ||
Income (loss) before income taxes | 29,365 | 14,939 | 58,316 | 29,212 | |||
Customer Contracts [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Other income and deductions, net | $ 15,600 | ||||||
|
Long-Term Debt (Narrative) (Details) (USD $)
|
1 Months Ended | 6 Months Ended | |
---|---|---|---|
May 31, 2012
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Debt Instrument, Unamortized Premium | $ 3,100,000 | ||
Revolving credit facility weighted-average interest rate | 2.88% | 2.77% | |
Repayments of long-term debt | $ 87,500,000 | $ 87,500,000 | $ 0 |
Senior Note Redemption Percentage | 109.375% | ||
Common Unit Public Offering [Member]
|
|||
Senior note redeemable portion | 35.00% |
Equity-Based Compensation (Narrative) (Details) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
years
|
Jun. 30, 2011
|
Jun. 30, 2012
years
|
Jun. 30, 2011
|
|
Equity-Based Compensation [Abstract] | ||||
Partnership's LTIP units authorized grants, maximum | 5,865,584 | 5,865,584 | ||
LTIP compensation expense | $ 1,000,000 | $ 800,000 | $ 2,294,000 | $ 1,747,000 |
Common units options, aggregate intrinsic value | 300,000 | 300,000 | ||
Common units options, weighted average contractual terms in years | 3.9 | 3.9 | ||
Proceeds from the exercise of unit options | 700,000 | |||
Non-vested phantom units, compensation expense | $ 17,800,000 | $ 17,800,000 | ||
Non-vested phantom units period, in years | 3.8 |
Related Party Transactions (Narrative) (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
ETE [Member]
|
Jun. 30, 2011
ETE [Member]
|
Jun. 30, 2012
ETE [Member]
|
Jun. 30, 2011
ETE [Member]
|
Dec. 31, 2012
ETE [Member]
May Twenty Six Service Agreement [Member]
|
Jun. 30, 2012
ETP [Member]
|
Jun. 30, 2011
ETP [Member]
|
Jun. 30, 2012
ETP [Member]
|
Jun. 30, 2011
ETP [Member]
|
Jun. 30, 2012
General Partner Interest [Member]
|
Jun. 30, 2011
General Partner Interest [Member]
|
Jun. 30, 2012
General Partner Interest [Member]
|
Jun. 30, 2011
General Partner Interest [Member]
|
Jun. 30, 2012
HPC [Member]
|
Jun. 30, 2011
HPC [Member]
|
Jun. 30, 2012
HPC [Member]
|
Jun. 30, 2011
HPC [Member]
|
|
Reimbursement of all direct and indirect expenses | $ 10,000,000 | ||||||||||||||||||||
Reimbursement of all direct and indirect expenses | 4,300,000 | 4,200,000 | 8,600,000 | 8,100,000 | 6,200,000 | 3,100,000 | 14,500,000 | 8,600,000 | 11,000,000 | 4,200,000 | 24,800,000 | 24,600,000 | |||||||||
Cash distributions received | 15,500,000 | 14,100,000 | 31,000,000 | 28,100,000 | |||||||||||||||||
Sale of compression equipment | 800,000 | 5,500,000 | 800,000 | 6,300,000 | |||||||||||||||||
General and administrative, including related party | $ 16,476,000 | $ 17,551,000 | $ 32,171,000 | $ 36,660,000 | $ 5,100,000 | $ 4,200,000 | $ 9,300,000 | $ 8,400,000 |
Organization And Summary Of Significant Accounting Policies
|
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Organization And Summary Of Significant Accounting Policies | |
Organization And Summary Of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Organization. The unaudited condensed consolidated financial statements presented herein contain the results of Regency Energy Partners LP and its subsidiaries ("Partnership"), a Delaware limited partnership. The Partnership and its subsidiaries are engaged in the business of gathering and processing, contract compression, treating and transportation of natural gas and the transportation, fractionation and storage of NGLs. Regency GP LP is the Partnership’s general partner and Regency GP LLC (collectively the “General Partner”) is the general partner of Regency GP LP. Basis of Presentation. The unaudited financial information included in this Form 10-Q has been prepared on the same basis as the audited consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2011. In the opinion of the Partnership’s management, such financial information reflects all adjustments necessary for a fair presentation of the financial position and the results of operations for such interim periods in accordance with GAAP. All intercompany items and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC. Use of Estimates. The unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which includes the use of estimates and assumptions made by management that affect the reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities that exist at the date of the condensed consolidated financial statements. Although these estimates are based on management’s available knowledge of current and expected future events, actual results could be different from those estimates. Property, Plant and Equipment. In March 2012, the Partnership recorded a $6.9 million “out-of-period” adjustment to depreciation expense to correct the estimated useful lives of certain assets to comply with its policy. The adjustment to depreciation expense related to the year ended December 31, 2011 and the period from May 26, 2010 to December 31, 2010 was $4.4 million and $2.5 million, respectively. The adjustment to depreciation expense related to the three and six months ended June 30, 2011 was $1.1 million and $2.2 million, respectively. |