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|Strong Performance Leads Regency Energy Partners to Raise 2008 Guidance|
DALLAS--(BUSINESS WIRE)--July 14, 2008--Regency Energy Partners LP (Nasdaq: RGNC) announced today an increase in its fiscal year 2008 adjusted EBITDA guidance to a range of $255 million to $270 million from the previously disclosed range of $220 million to $240 million.
"Year-to-date, Regency has performed significantly above budget, and we continue to see strong operating performance," said Byron Kelley, chairman, president and chief executive officer of Regency. "The increase in Regency's expected adjusted EBITDA for the full-year is attributable to favorable commodity prices, additional volume growth in North Louisiana, improved fuel efficiencies and higher condensate and sulfur recoveries."
Regency's new 2008 adjusted EBITDA guidance range assumes for the balance of 2008 an average crude oil price of $110 per barrel, gas price of $10 per MMBtu, and sulfur price of $220 net per long ton, consistent with observed prices in the first half of 2008.
NON-GAAP FINANCIAL INFORMATION
This press release and the accompanying financial schedules include the non-generally accepted accounting principles ("non-GAAP") financial measures of EBITDA and adjusted EBITDA, which is a key measure of the Partnership's financial performance. The accompanying schedule provides a reconciliation of non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Our non-GAAP financial measures should not be considered an alternative to, or more meaningful than, net income, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as a measure of operating performance, liquidity or ability to service debt obligations.
We define Adjusted EBITDA as net income (loss) plus interest expense, net, depreciation and amortization expense, income tax expense and non-cash loss (gain) from risk management activities. In deriving adjusted EBITDA for the first quarter of 2008, we made positive adjustments for a management services contract termination fee paid in the first quarter of 2008 in connection with our FrontStreet acquisition, the loss on the sale of assets, non-capitalizable acquisition expenses and a charge for a change in our vacation accrual, because those are all non-recurring items.
Adjusted EBITDA is used as a supplemental performance measure by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others, to assess:
Our adjusted EBITDA may not be comparable to a similarly titled measure of another company because other entities may not calculate adjusted EBITDA in the same manner.
This press release may contain forward-looking statements regarding Regency Energy Partners, including projections, estimates, forecasts, plans and objectives. These statements are based on management's current projections, estimates, forecasts, plans and objectives and are not guarantees of future performance. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond our control. These risks and uncertainties include changes in laws and regulations impacting the natural gas gathering and processing, transportation and contract compression businesses, the level of creditworthiness of the Partnership's counterparties, the Partnership's ability to access the debt and equity markets, the Partnership's 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 the Partnership's transactions, changes in commodity prices, interest rates, demand for the Partnership's services, weather and other natural phenomena, industry changes including the impact of consolidations and changes in competition, the Partnership's ability to obtain required approvals for construction or modernization of the Partnership's facilities and the timing of production from such facilities, and the effect of accounting pronouncements issued periodically by accounting standard setting boards. Therefore, actual results and outcomes may differ materially from those expressed in such forward-looking information.
In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than the Partnership has described. The Partnership undertakes no obligation to update publicly or to revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Regency Energy Partners LP (Nasdaq: RGNC) is a growth-oriented, midstream energy partnership engaged in the gathering, contract compression, processing, marketing and transporting of natural gas and natural gas liquids. Regency's general partner is majority-owned by an affiliate of GE Energy Financial Services, a unit of GE (NYSE: GE). For more information, visit the Regency Energy Partners LP Web site at www.regencyenergy.com.
Reconciliation of forecasted twelve months ended December 31, 2008 net income to adjusted EBITDA ($ in thousands) Low Estimate High Estimate ---------------------------------------------------------------------- Forecasted net income $ 79,547 $ 94,547 Add: Interest expense 71,800 71,800 Depreciation and amortization 94,000 94,000 Income taxes 1,400 1,400 ------------ ------------- EBITDA $246,747 $261,747 ============ ============= Add: Non-cash loss from risk management activities 3,090 3,090 Loss on sale of assets 23 23 Vacation accrual accounting change 904 904 Management services contract termination fee 3,888 3,888 Acquisition expenses 348 348 ------------ ------------- Adjusted EBITDA $255,000 $270,000 ============ =============
CONTACT: Regency Energy Partners LP Investor Relations: Shannon Ming, 214-239-0093 Vice President, Investor Relations & Communications email@example.com or HCK2 Partners Media Relations: Elizabeth Browne Cornelius, 972-716-0500 x26 firstname.lastname@example.org SOURCE: Regency Energy Partners LP