HOUSTON, Aug. 7 /PRNewswire-FirstCall/ -- Copano Energy, L.L.C. today announced its financial results for the three and six months ended June 30, 2006.
"We are pleased to announce a 309% increase in Copano's operating income to $26.1 million for the second quarter of 2006 as compared to the same period in 2005, reflecting our acquisition of ScissorTail Energy effective August 1, 2005, as well as a favorable operating environment for each of our operating segments," said John Eckel, Chairman and Chief Executive Officer of Copano. "More importantly, Copano's second quarter operating income exceeded the pro forma prior year quarterly results by 103%."
Second Quarter Financial Results
Revenue for the second quarter of 2006 increased approximately 92% to $209.6 million from $109.1 million in the second quarter of last year. Total gross margin increased 237% to $48.2 million in the second quarter of 2006 from $14.3 million in the second quarter of 2005. Excluding the impact of the ScissorTail acquisition, total gross margin increased 68%. Net income was $18.9 million, or $1.03 per unit on a diluted basis, for the second quarter of 2006 compared to net income of $5.5 million, or $0.52 per unit on a diluted basis, for the second quarter of 2005. The weighted average diluted units outstanding during the three months ended June 30, 2006 and 2005 totaled approximately 18.4 million and 10.6 million, respectively.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the second quarter of 2006 were $34.3 million, an increase of $25.9 million from EBITDA of $8.4 million for the second quarter of 2005. Distributable cash flow for the second quarter of 2006 (prior to any retained cash reserves established by Copano's board) equaled $26.2 million, representing 211% coverage of the increased second quarter 2006 distribution of $0.675 per unit based on the number of units outstanding on August 1, 2006, the second quarter distribution record date. Copano recorded non-cash amortization expense related to purchased put derivatives of $2.5 million, which has not been added back in the determination of distributable cash flow.
EBITDA, total gross margin and distributable cash flow are non-GAAP financial measures that are defined and reconciled to the most directly comparable GAAP measures at the end of this press release.
Pro Forma Second Quarter 2005 Financial Results
For the three months ended June 30, 2005, pro forma consolidated revenue was $191.0 million, total gross margin was $30.9 million and operating income was $12.9 million. Pro forma consolidated EBITDA for the three months ended June 30, 2005 was $20.7 million and pro forma consolidated net income was $4.0 million, or $0.24 per unit on a diluted basis. Pro forma EBITDA and total gross margin are non-GAAP financial measures that are defined and reconciled to the most directly comparable GAAP measures at the end of this press release.
The preceding unaudited pro forma consolidated financial information of Copano for the three months ended June 30, 2005 gives effect to Copano's acquisition of ScissorTail Energy, LLC as well as the concurrent issuance of equity and debt securities and related transactions to finance the acquisition and assumes that these transactions occurred on April 1, 2005. This pro forma information excludes non-recurring charges related to the write-off of the remaining debt issuance costs related to existing senior indebtedness prior to the acquisition of ScissorTail. These adjustments are based on currently available information and certain estimates and assumptions and, therefore, the actual effects of these transactions may differ from the effects reflected in the unaudited pro forma financial information. However, management believes that the assumptions provide a reasonable basis for presenting the significant effects of these transactions and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma financial information. The unaudited pro forma consolidated financial information is not necessarily indicative of the consolidated financial condition or results of operations of Copano had these transactions actually been completed on April 1, 2005. Moreover, the unaudited pro forma consolidated financial information does not project the consolidated financial position or results of operations of Copano for any future period or at any future date.
Second Quarter Operating Results by Business Segment
Mid-Continent Operations
On August 1, 2005, Copano completed its acquisition of Tulsa-based ScissorTail Energy, LLC, a provider of natural gas midstream services in central and eastern Oklahoma. ScissorTail's assets, which we refer to as our Mid-Continent Operations segment, include 3,348 miles of gathering pipelines, three processing plants and a majority interest in Southern Dome, LLC, which is engaged in the natural gas gathering and processing business and related operations in Oklahoma County, Oklahoma. During the second quarter of 2006, gross margin for this segment totaled $23.7 million and the Mid-Continent Operations segment gathered or transported an average of 175,349 MMBtu/d of natural gas on its pipelines, processed an average of 123,874 MMBtu/d of natural gas and produced an average of 11,753 barrels per day of NGLs at its plants and third-party plants. For the second quarter of 2005, the Mid- Continent Operations segment gathered or transported an average of 151,023 MMBtu/d of natural gas on its pipelines and processed an average of 103,152 MMBtu/d of natural gas and produced an average of 9,236 barrels per day of NGLs at its plants and third-party plants.
Texas Gulf Coast Pipelines
Texas Gulf Coast Pipelines is comprised of a series of gathering and intrastate transmission systems totaling 1,594 miles of natural gas pipelines, including 144 miles of pipelines owned by Webb/Duval Gatherers, an unconsolidated general partnership in which Copano owns a 62.5% interest.
During the second quarter of 2006, the Texas Gulf Coast Pipelines segment gathered or transported an average of 354,258 MMBtu/d of natural gas on its pipelines, which included 243,086 MMBtu/d of natural gas on its wholly-owned pipelines and 111,172 MMBtu/d on the Webb/Duval Gathering System, net of intercompany volumes. During the second quarter of 2005, this segment gathered and transported an average of 348,246 MMBtu/d of natural gas on its pipelines, which included 222,888 MMBtu/d of natural gas on its wholly owned pipelines and 125,358 MMBtu/d of natural gas on the Webb/Duval Gathering System, net of intercompany volumes.
Gross margin for this segment in the second quarter of 2006 increased approximately 23% to $9.2 million compared to $7.5 million in the second quarter of 2005. The increase primarily resulted from a 9% increase in volumes during the second quarter of 2006 as well as a 14% increase in unit margins.
Texas Gulf Coast Processing
Texas Gulf Coast Processing includes the Houston Central Processing Plant, the 104-mile Sheridan NGL pipeline that extends from the tailgate of the processing plant to the Houston area and a leased 46-mile NGL pipeline that also extends from the tailgate of the processing plant to the Enterprise Product Partners' Seminole Pipeline near Brenham, Texas.
During the second quarter of 2006, the Texas Gulf Coast Processing segment processed an average of 496,350 MMBtu/d of natural gas, an 11% decrease, compared to 560,150 MMBtu/d during the second quarter of 2005. Although volumes originated from the Texas Gulf Coast Pipelines and delivered to the plant were up approximately 3% from the second quarter of last year, gas delivered to the plant and originated from sources other than Texas Gulf Coast Pipelines decreased approximately 21% from the second quarter of last year. The Houston Central Processing Plant produced an average of 15,039 barrels per day of natural gas liquids, or NGLs, during the second quarter of 2006, a 3% decrease, compared to an average of 15,436 barrels per day during the second quarter of 2005.
Gross margin for the Texas Gulf Coast Processing segment in the second quarter of 2006 increased to $14.8 million compared to $6.9 million in the second quarter of 2005. The increase in gross margin primarily resulted from higher NGL prices.
Year-to-Date Financial Results
Revenue for the six months ended June 30, 2006 increased approximately 79% to $423.6 million from $236.0 million in the same six-month period of last year. Total gross margin increased 193% to $84.7 million in the six months ended June 30, 2006 from $28.9 million in the same six-month period of 2005. Net income was $26.3 million, or $1.43 per unit on a diluted basis, for the six months ended June 30, 2006 compared to net income of $10.9 million, or $1.03 per unit on a diluted basis, for the six months ended June 30, 2005. The weighted average diluted units outstanding during the six months ended June 30, 2006 and 2005 totaled approximately 18.4 million and 10.6 million, respectively.
EBITDA for the six months ended June 30, 2006 was $57.6 million, an increase of $41.0 million from EBITDA of $16.6 million for the six months ended June 30, 2005. EBITDA and total gross margin are non-GAAP financial measures that are defined and reconciled to the most directly comparable GAAP measures at the end of this press release.
Unit Distributions
On July 19, 2006, Copano announced a second quarter 2006 cash distribution of $0.675 per unit, or $2.70 per unit on an annualized basis, for all of its outstanding common and subordinated units. This distribution represents a 69% increase above the minimum quarterly distribution and will be paid on August 14, 2006 to holders of record of common and subordinated units at the close of business on August 1, 2006.
Conference Call Information
On August 8, 2006, Copano will hold a conference call to discuss its second quarter 2006 financial results and recent developments at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). To participate in the call, dial (303) 262-2139 and ask for the Copano Call at least 10 minutes prior to the start time, or access it live over the Internet by logging onto the web at http://www.copanoenergy.com/ , on the "Investor Overview" page of the "Investor Relations" section of Copano's website. To listen to the live call on the web, please visit the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software.
If you cannot listen to the live webcast, an archive will be available shortly after the call for a period of 90 days on the "Investor Overview" page of the "Investor Relations" section of Copano's website. Additionally, a telephonic replay will be available through August 15, 2006 and may be accessed by calling (303) 590-3000 and using the pass code 11066856.
Use of Non-GAAP Financial Measures
This press release and the accompanying schedules include the non- generally accepted accounting principles, or non-GAAP, financial measures of EBITDA, total gross margin and distributable cash flow. The accompanying schedules provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States, or GAAP. Non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income, operating income, cash flows from operating activities or any other GAAP measure of liquidity or financial performance. Copano uses non-GAAP financial measures as measures of its core profitability or to assess the financial performance of its assets. The Company believes that investors benefit from having access to the same financial measures that its management uses in evaluating performance.
Copano defines EBITDA as net income plus interest expense, provision for income taxes and depreciation and amortization expense. EBITDA is used as a supplemental financial measure by management and by external users of Copano's financial statements such as investors, commercial banks, research analysts and others, to assess:
* the financial performance of Copano's assets without regard to
financing methods, capital structure or historical cost basis;
* the ability of Copano's assets to generate cash sufficient to pay
interest costs and support indebtedness;
* Copano's 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 and the
overall rates of return on alternative investment opportunities.
EBITDA is also a financial measure that, with certain negotiated adjustments, is reported to the Company's lenders and is used to compute financial covenants under its credit facility. EBITDA should not be considered an alternative to net income, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. Copano's EBITDA may not be comparable to EBITDA or similarly titled measures of other entities, as other entities may not calculate EBITDA in the same manner as the Company does. Copano has reconciled EBITDA to net income and cash flows from operating activities.
Total gross margin is defined as revenue less cost of sales. Cost of sales includes the following costs and expenses: cost of natural gas and NGLs purchased from third parties, cost of natural gas and NGLs purchased from affiliates, costs paid to third parties to transport volumes and costs paid to affiliates to transport volumes. Total gross margin consists of the sum of the individual segment gross margins. The Company views segment gross margin as an important performance measure of the core profitability of its operations. This measure is a key component of internal financial reporting and is used by senior management in deciding how to allocate capital resources among business segments. The GAAP measure most directly comparable to segment gross margin is operating income.
Distributable cash flow is defined as net income plus: (1) depreciation and amortization expense; (2) cash distributions received from investments in unconsolidated affiliates and equity losses from such unconsolidated affiliates; (3) reimbursements by pre-IPO unitholders of certain general and administrative expenses in excess of the "G&A Cap" provided under the Company's limited liability company agreement; (4) the subtraction of maintenance capital expenditures; (5) the subtraction of equity in the earnings of unconsolidated affiliates; and (6) the addition of losses or subtraction of gains relating to other miscellaneous non-cash amounts affecting net income for the period. Maintenance capital expenditures represent capital expenditures employed to replace partially or fully depreciated assets to maintain the existing operating capacity of the Company's assets and to extend their useful lives, or other capital expenditures that are incurred in maintaining existing system volumes and related cash flows. Distributable cash flow is a significant performance metric used by senior management to compare basic cash flows generated by the Company (prior to the establishment of any retained cash reserves by its Board of Directors) to the cash distributions expected to be paid to unitholders. Using this metric, management can quickly compute the coverage ratio of estimated cash flows to planned cash distributions. Distributable cash flow is also an important non-GAAP financial measure for unitholders since it serves as an indicator of the Company's success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not the Company is generating cash flow at a level that can sustain or support an increase in quarterly distribution rates. Distributable cash flow is also a quantitative standard used throughout the investment community with respect to publicly-traded partnerships and limited liability companies because the value of a unit of such an entity is generally determined by the unit's yield (which in turn is based on the amount of cash distributions the entity can pay to a unitholder). The GAAP measure most directly comparable to distributable cash flow is net income.
Houston-based Copano Energy, L.L.C. is a midstream natural gas company with natural gas gathering, intrastate pipeline and natural gas processing assets in the Texas Gulf Coast region and in central and eastern Oklahoma.
This press release may include "forward-looking statements" as defined by the Securities and Exchange Commission. These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. These statements include, but are not limited to, statements with respect to future distributions. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause the Company's actual results to differ materially from those implied or expressed by the forward-looking statements. These risks include an inability to obtain new sources of natural gas supplies, the loss of key producers that supply natural gas to the Company, key customers reducing the volume of natural gas and natural gas liquids they purchase from the Company, a decline in the price and market demand for natural gas and natural gas liquids, the incurrence of significant costs and liabilities in the future resulting from the Company's failure to comply with new or existing environmental regulations or an accidental release of hazardous substances into the environment and other factors detailed in the Company's Securities and Exchange Commission filings.
- tables to follow -
COPANO ENERGY, L.L.C. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
(in thousands, except per unit information)
Revenue:
Natural gas sales $103,826 $58,909 $231,806 $137,051
Natural gas liquids sales 95,676 46,774 171,002 91,850
Transportation,
compression and
processing fees 3,435 2,829 7,255 5,525
Other 6,690 610 13,524 1,546
Total revenue 209,627 109,122 423,587 235,972
Costs and expenses:
Cost of natural gas and
natural gas liquids 160,766 94,190 337,478 205,891
Transportation 658 625 1,427 1,223
Operations and maintenance 7,824 3,006 15,008 5,977
Depreciation and
amortization 7,850 1,873 15,475 3,665
General and administrative 5,736 3,095 11,811 6,530
Taxes other than income 544 195 988 392
Equity in loss (earnings)
from unconsolidated
affiliates 101 (261) (95) (486)
Total costs and expenses 183,479 102,723 382,092 223,192
Operating income 26,148 6,399 41,495 12,780
Other income (expense):
Interest and other income 343 84 592 151
Interest and other
financing costs (7,604) (967) (15,787) (1,990)
Net income $18,887 $5,516 $26,300 $10,941
Basic net income per unit:(A)
Net income $1.04 $0.52 $1.45 $1.04
Weighted average number
of units(A) 14,681 7,038 14,669 7,038
Diluted net income per unit:(A)
Net income $1.03 $0.52 $1.43 $1.03
Weighted average number
of units(A) 18,384 10,630 18,354 10,620
(A) Based on the weighted average units outstanding during the periods
presented. The computation of diluted units outstanding for the
three and six months ended June 30, 2006 includes dilutive employee
unit options and dilutive restricted units issued to directors and
employees.
COPANO ENERGY, L.L.C. AND SUBSIDIARIES
OPERATING STATISTICS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
($ in thousands)
Total gross margin(A) $48,203 $14,307 $84,682 $28,858
Operations and maintenance
expenses 7,824 3,006 15,008 5,977
Depreciation and
amortization 7,850 1,873 15,475 3,665
General and administrative
expenses 5,736 3,095 11,811 6,530
Taxes other than income 544 195 988 392
Equity in loss (earnings)
from unconsolidated
affiliates 101 (261) (95) (486)
Operating income 26,148 6,399 41,495 12,780
Interest and other
financing costs, net (7,261) (883) (15,195) (1,839)
Net income $18,887 $5,516 $26,300 $10,941
Segment gross margin:
Mid-Continent Operations $23,732 $--- $44,167 $---
Texas Gulf Coast
Pipelines(C) 9,234 7,450 17,884 15,389
Texas Gulf Coast
Processing 14,825 6,857 21,972 13,469
Corporate 412 --- 659 ---
Total gross margin(A) $48,203 $14,307 $84,682 $28,858
Segment gross margin per unit:
Mid-Continent Operations:
Pipeline throughput
($/MMBtu)(B) $1.49 $--- $1.44 $---
Plant inlet throughput
($/MMBtu)(B) $2.11 $--- $2.07 $---
NGLs produced ($/Bbl)(B) $22.19 $--- $22.50 $---
Texas Gulf Coast Pipelines
($/MMBtu)(C) $0.42 $0.37 $0.42 $0.38
Texas Gulf Coast Processing:
Inlet throughput
($/MMBtu)(D) $0.33 $0.13 $0.24 $0.13
NGLs produced ($/Bbl)(D) $10.82 $4.88 $8.47 $4.69
Volumes:
Mid-Continent Operations:
Pipeline throughput
(MMBtu/d)(B) 175,349 --- 169,956 ---
Plant inlet throughput
(MMBtu/d)(B) 123,874 --- 118,118 ---
NGLs produced
(Bbls/d)(B) 11,753 --- 10,845 ---
Texas Gulf Coast
Pipelines - throughput
(MMBtu/d)(C) 243,086 222,888 237,075 226,702
Texas Gulf Coast Processing:
Inlet throughput
(MMBtu/d) 496,350 560,150 504,670 564,658
NGLs produced (Bbls/d) 15,039 15,436 14,331 15,854
Capital Expenditures:
Maintenance capital
expenditures $2,076 $822 $3,926 $1,395
Expansion capital
expenditures 9,335 1,622 16,398 2,122
Total capital
expenditures $11,411 $2,444 $20,324 $3,517
Operations and maintenance
expenses:
Mid-Continent Operations $4,048 $--- $7,916 $---
Texas Gulf Coast Pipelines 1,900 1,322 3,529 2,634
Texas Gulf Coast Processing 1,876 1,684 3,563 3,343
Total operations and
maintenance expenses $7,824 $3,006 $15,008 $5,977
(A) Total gross margin is a non-GAAP financial measure. For a
reconciliation of total gross margin to its most directly comparable
GAAP measure, please read "Non-GAAP Financial Measures."
(B) Segment gross margin per unit amounts for the Mid-Continent
Operations represent the segment gross margin divided by the
pipeline throughput, inlet throughput or NGLs produced, as
appropriate. Plant inlet throughput and NGLs produced represent
total volumes processed and produced by the Mid-Continent Operations
at all plants, including plants owned by the Mid-Continent
Operations segment and plants owned by third parties. Plant inlet
throughput averaged 81,257 MMBtu/d and NGLs produced averaged
7,976 barrels per day for the three months ended June 30, 2006 for
plants owned by the Mid-Continent Operations segment. Plant inlet
throughput averaged 76,730 MMBtu/d and NGLs produced averaged
7,275 barrels per day for the six months ended June 30, 2006 for
plants owned by the Mid-Continent Operations segment.
(C) Excludes results and volumes associated with our interest in
Webb/Duval Gatherers. Gross volumes transported by Webb/Duval
Gatherers were 111,172 MMBtu/d and 125,358 MMBtu/d, net of
intercompany volumes, for the three months ended June 30, 2006 and
2005, respectively. Gross volumes transported by Webb/Duval
Gatherers were 115,241 MMBtu/d and 127,100 MMBtu/d, net of
intercompany volumes, for the six months ended June 30, 2006 and
2005, respectively.
(D) Represents the Texas Gulf Coast Processing segment gross margin
divided by the total inlet throughput or NGLs produced, as
appropriate.
COPANO ENERGY, L.L.C. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
2006 2005
(in thousands)
Cash Flows From Operating Activities:
Net income $26,300 $10,941
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 15,475 3,665
Amortization of debt issue costs 1,388 329
Equity in earnings from unconsolidated
affiliates (95) (486)
Equity-based compensation 736 225
Other noncash items 83 (42)
Changes in assets and liabilities:
Accounts receivable 22,921 8,555
Accounts receivable from affiliates (790) 551
Prepayments and other current assets 748 549
Risk management assets 2,860 ---
Accounts payable (16,824) (9,333)
Accounts payable to affiliates 24 11
Other current liabilities 7,111 1,029
Net cash provided by operating activities 59,937 15,994
Cash Flows From Investing Activities:
Additions to property, plant and equipment
and intangible assets (18,498) (2,514)
Investment in unconsolidated affiliate (10,553) ---
Escrow cash --- (8)
Other (437) (304)
Net cash used in investing activities (29,488) (2,826)
Cash Flows From Financing Activities:
Repayments of long-term debt (268,000) (4,000)
Proceeds from long-term debt 245,000 ---
Repayments of short-term notes payable (756) ---
Deferred financing costs (6,296) (287)
Distributions to unitholders (20,940) (7,098)
Capital contributions from pre-IPO investors 3,542 1,424
Proceeds from private placement of common units 25,000 ---
Equity offering costs (640) (12)
Proceeds from option exercises 109 ---
Net cash used in financing activities (22,981) (9,973)
Net increase in cash and cash equivalents 7,468 3,195
Cash and cash equivalents, beginning of year 25,297 7,015
Cash and cash equivalents, end of period $32,765 $10,210
COPANO ENERGY, L.L.C. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
2006 2005
(in thousands, except
unit information)
ASSETS
Current assets:
Cash and cash equivalents $32,765 $25,297
Accounts receivable, net 60,375 83,297
Accounts receivable from affiliates 850 ---
Risk management assets 10,975 10,067
Prepayments and other current assets 1,210 2,474
Total current assets 106,175 121,135
Property, plant and equipment, net 539,614 532,320
Intangible assets, net 95,038 97,551
Investment in unconsolidated affiliates 18,489 7,901
Risk management assets 13,379 24,778
Other assets, net 14,374 9,065
Total assets $787,069 $792,750
LIABILITIES AND MEMBERS' CAPITAL
Current liabilities:
Accounts payable $80,708 $96,001
Accounts payable to affiliates 214 189
Notes payable --- 1,272
Other current liabilities 17,845 10,970
Total current liabilities 98,767 108,432
Long-term debt 375,000 398,000
Risk management and other noncurrent liabilities 7,759 4,515
Members' capital:
Common units, no par value, 14,683,949 and
14,100,508 units issued and outstanding as
of June 30, 2006 and December 31, 2005,
respectively 318,686 297,592
Subordinated units, no par value,
3,519,126 units outstanding as of
June 30, 2006 and December 31, 2005 10,379 10,379
Paid-in capital 8,346 4,068
Accumulated deficit (9,721) (14,941)
Deferred compensation --- (3,949)
Other comprehensive loss (22,147) (11,346)
305,543 281,803
Total liabilities and members' capital $787,069 $792,750
Non-GAAP Financial Measures
The following table presents a reconciliation of the non-GAAP financial measures of (1) total gross margin (which consists of the sum of individual segment gross margins) to the GAAP financial measure of operating income, (2) EBITDA to the GAAP financial measures of net income and cash flows from operating activities and (3) distributable cash flow to the GAAP financial measure of net income for each of the periods indicated (in thousands, except unit information).
Three Months Ended Six Months Ended
June 30, June 30,
Pro Forma
2006 2005 2005 2006 2005
Reconciliation of
total gross margin
to operating income:
Operating income $26,148 $12,900 $6,399 $41,495 $12,780
Add: Operations
and
maintenance
expenses 7,824 5,966 3,006 15,008 5,977
Depreciation
and
amortization 7,850 7,647 1,873 15,475 3,665
General and
administrative
expenses 5,736 4,250 3,095 11,811 6,530
Taxes other
than income 544 374 195 988 392
Equity in loss
(earnings) from
unconsolidated
affiliates 101 (261) (261) (95) (486)
Total gross margin $48,203 $30,876 $14,307 $84,682 $28,858
Reconciliation of
EBITDA to net income:
Net income $18,887 $4,010 $5,516 $26,300 $10,941
Add: Depreciation
and
amortization 7,850 7,647 1,873 15,475 3,665
Interest
expense 7,604 9,077 967 15,787 1,990
EBITDA $34,341 $20,734 $8,356 $57,562 $16,596
Reconciliation of EBITDA
to cash flows from
operating activities:
Cash flow provided by
operating
activities $37,082 $5,103 $59,937 $15,994
Add: Cash paid for
interest 7,173 801 14,399 1,661
Equity in
(loss)
earnings of
unconsolidated
affiliates (101) 261 95 486
Risk management
assets (522) --- (2,860) ---
(Increase)
decrease in
working
capital and
other (9,291) 2,191 (14,009) (1,545)
EBITDA $34,341 $8,356 $57,562 $16,596
Reconciliation of net
income to
distributable
cash flow:
Net income $18,887 $4,010 $5,516 $26,300 $10,941
Add: Depreciation
and
amortization 7,850 7,647 1,873 15,475 3,665
Amortization
of debt
issue costs 431 1,231 166 1,388 329
Equity-based
compensation 415 432 142 736 225
G&A
reimbursement
from pre-IPO
unitholders 464 776 1,150 2,626 2,574
Unrealized
losses on
derivatives 58 --- --- 201 ---
Less: Equity in loss
(earnings) of
unconsolidated
affiliates 101 (261) (261) (95) (486)
Maintenance
capital
expenditures (2,076) (1,764) (822) (3,926) (1,395)
Other 85 (21) (21) 83 (42)
Distributable cash
flow(A) $26,215 $12,050 $7,743 $42,788 $15,811
Minimum quarterly
distribution ("MQD")
at $0.40 per unit(B) $7,351 $6,950 $6,950 (D) (D)
Distributable cash
flow coverage of
MQD(2) 357% 173% 111% (D) (D)
Actual quarterly
distribution
("AQD")(B)(C) $12,406 $7,819 $7,819 (D) (D)
Distributable cash
flow coverage of
AQD(B) 211% 154% 99% (D) (D)
(A) Prior to any retained cash reserves established by Copano's Board of
Directors.
(B) Includes distribution amounts for units outstanding on the record
date. The actual distribution for the three months ended June 30,
2005 included 6,203,216 units issued on August 1, 2005 in connection
with the acquisition of ScissorTail Energy. The distribution cash
flow coverage excluding these units was 162% for the three months
ended June 30, 2005.
(C) Reflects actual quarterly distribution of $0.675 per unit and
$0.45 per unit for the three months ended June 30, 2006 and 2005,
respectively.
(D) Not applicable for year-to-date periods.
Contacts: Matt Assiff, SVP & CFO
Copano Energy, L.L.C.
713-621-9547
Ken Dennard /
