Exhibit 99.1
NEWS RELEASE
| CONTACT: | Brian J. Begley | |
| Vice President - Investor Relations | ||
| Atlas Energy, Inc. | ||
| (877) 280-2857 | ||
| (215) 553-8455 (fax) |
ATLAS ENERGY, INC. REPORTS OPERATING AND FINANCIAL RESULTS
FOR THE SECOND QUARTER 2010
Pittsburgh, PA – August 3, 2010, Atlas Energy, Inc. (NASDAQ: ATLS) (“Atlas” or “the Company”) today reported operating and financial results for the second quarter 2010.
Second Quarter 2010 Highlights & Results
| • | Highlights of the second quarter 2010 included the following: |
| • | Average daily Appalachia production in the second quarter 2010 increased to a record of approximately 55 million cubic feet of natural gas equivalents (“Mmcfe”) per day, an increase of approximately 21% from the first quarter 2010, due primarily to the Company’s development of its Marcellus Shale position. Gross Marcellus Shale production grew to approximately 82 Mmcfe per day (over 33 Mmcfe/d net) by the end of the second quarter 2010; |
| • | Total company average daily production also reached a record level of approximately 110 Mmcfe per day in the second quarter 2010; |
| • | Average realized natural gas prices for the second quarter 2010, net of the effects of financial hedging, were $7.09 per thousand cubic feet (“mcf”), exceeding the average market price of $4.32 per mcf by $2.77; |
| • | Atlas continued to generate strong drilling results from the Marcellus Shale, with recently completed wells producing at initial rates in excess of 5 million cubic feet (“Mmcf”) per day, and expected average first year daily production rates of approximately 2 Mmcf per day; and, |
| • | On July 10, 2010, the Company’s Board of Directors authorized the repurchase of up to $100 million of the Company’s outstanding shares. |
| • | On a GAAP basis, the Company recognized net income of $175.9 million for the second quarter 2010 compared with net income of $9.4 million for the prior year second quarter. The large increase in second quarter 2010 net income compared to the prior year quarter was due primarily to a gain recognized on Marcellus Shale assets contributed to the Company’s joint venture with Reliance Industries, Ltd. (“Reliance”). The joint venture transaction closed April 20, 2010. |
| • | Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”), a non-GAAP measure, for the Company’s exploration and production operations (“E&P Operations”) was $52.5 million for the second quarter 2010, as compared with $85.8 million for the prior year comparable quarter. The prior year comparable quarter’s results were enhanced by a $28.5 million hedge monetization gain and average realized prices that exceeded price realizations in the second quarter 2010. Increased production volumes in the second quarter 2010 partially offset the decline in realized prices. A reconciliation of net income to adjusted EBITDA is provided in the financial tables of this release. |
| • | On July 27, 2010, Atlas Pipeline Partners, L.P. (NYSE: APL), a subsidiary of the Company, entered into a definitive agreement to sell its Elk City gathering and processing system in western Oklahoma to Enbridge Energy Partners, L.P. (NYSE: EEP) for $682 million. Upon closing of the transaction, APL will significantly reduce its outstanding debt, increase its liquidity position and improve the ability to fund its future capital commitments, particularly in Laurel Mountain Midstream, LLC (“Laurel Mountain”), its Appalachia midstream joint venture with The Williams Companies (NYSE: WMB). The Company currently owns 1.1 million common units of APL and 17.8 million common units of Atlas Pipeline Holdings, L.P. (NYSE: AHD), which holds the general partner of APL. |
Partnership Management Segment
| • | Partnership management margin (1 ) was $11.5 million for the second quarter 2010, compared to $15.0 million for the prior year comparable quarter. The lower partnership management margin in the second quarter 2010 compared to the prior year was due primarily to the comparable year over year timing of funds raised for the direct investment programs. |
| • | The Company is currently marketing the $150 million Atlas Resources Series 28-2010 drilling program (2). Atlas is targeting to raise $250 million to $300 million in partnership funds in 2010. |
| (1) | Partnership management margin is comprised of Well Construction & Completion margin, Well Services margin and Administration & Oversight Fee revenues. |
| (2) | Atlas Energy’s subsidiary serves as managing general partner of the partnership. A written prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, may be obtained from Anthem Securities, Inc. (a subsidiary of Atlas Energy), 1550 Coraopolis Heights Rd. – 3rd Floor, Moon Township, PA 15108. |
Appalachia Operations
| • | Atlas had average net daily natural gas production in its Appalachia segment of 54.9 million cubic feet equivalents (“Mmcfe”) per day during the second quarter 2010. |
| • | Currently, Atlas and Reliance jointly control approximately 342,000 net Marcellus Shale acres in the area of mutual interest (“AMI”) for purposes of their joint venture development. Atlas also controls an additional 280,000 acres prospective for the Marcellus Shale outside of the AMI. |
| • | The Company’s drilling plan in its joint venture with Reliance calls for 45 Marcellus Shale horizontal wells to be drilled in 2010, 108 wells in 2011, 171 wells in 2012, and 300 wells per year thereafter. Please refer to the Company’s operational update and outlook provided on July 7, 2010. |
Michigan/Indiana Operations
| • | Natural gas production from the Michigan/Indiana segment averaged 55.0 Mmcfe per day during the second quarter 2010. |
| • | Atlas currently controls approximately 105,000 net acres (136,000 gross acres) in the emerging Utica/Collingwood Shale play of northwestern Michigan. At June 30, 2010, the Company also had approximately 274,000 net acres in the Antrim Shale of Michigan, of which approximately 27,000 were undeveloped. Atlas maintains over 500 proved infill drilling locations in the Antrim Shale. Atlas Energy had access to approximately 130,000 net acres in the biogenic New Albany Shale as of June 30, 2010, with over 450 potential locations. |
Corporate and Other
| • | Cash general and administrative expense, excluding amounts attributable to APL and Atlas Pipeline Holdings, L.P. (“AHD”), was $14.6 million for the second quarter 2010 compared with $11.9 million for the prior year comparable quarter. The $2.7 million increase was principally related to the continued expansion of the Company’s Marcellus Shale operations. Please refer to the consolidating statements of operations provided in the financial tables of this release. |
| • | Depreciation, depletion and amortization expense, excluding amounts attributable to APL and AHD, was $30.5 million for the second quarter 2010 compared with $27.3 million for the prior year comparable quarter. The increase was due primarily to an overall increase in the Company’s natural gas production between periods. See the consolidating statements of operations provided in the financial tables of this release. |
| • | Cash interest expense, excluding amounts attributable to APL and AHD, was $15.6 million for the second quarter 2010 compared with $14.1 million for the prior year second quarter. The increase in interest expense was primarily due to Atlas Energy Resources, LLC’s (“ATN”), the Company’s wholly-owned subsidiary, $200 million 12.125% senior note offering in July 2009, partially offset by lower average borrowings under its credit facility. See the consolidating statements of operations provided in the financial tables of this release. |
| • | As of June 30, 2010, Atlas’ long term debt balance included the following: |
| • | $400.0 million principal amount of ATN’s 10.75% senior notes due in 2017; |
| • | $200.0 million principal amount of ATN’s 12.125% senior notes due in 2018; and |
| • | $88.0 million outstanding on ATN’s $550 million revolving credit facility. |
Hedging Summary
| • | The Company entered into additional derivative contracts during the second quarter 2010 for its natural gas production and currently estimates a mark-to-market hedge gain of more than $100 million from its remaining future hedge positions. Atlas currently has approximately 95 Bcfe of its future production hedged through 2014. A summary of the Company’s current derivative positions as of August 3, 2010 is as follows: |
Natural Gas
Fixed Price Swaps
| Production Period Ended December 31, |
Average Fixed Price (per mcf)(a)(b) |
Volumes (per mcf)(a) | |||
|
2010(c) |
$ | 7.67 | 13,668,596 | ||
| 2011 |
$ | 6.56 | 17,991,859 | ||
| 2012 |
$ | 6.66 | 14,562,667 | ||
| 2013 |
$ | 6.88 | 9,833,935 | ||
| 2014 |
$ | 6.18 | 5,408,903 | ||
Costless Collars
| Production Period Ended December 31, |
Average Floor Price (per mcf)(a)(b) |
Average Ceiling Price (per mcf)(a)(b) |
Volumes (per mcf)(a) | |||||
|
2010(c) |
$ | 7.32 | $ | 8.51 | 1,482,706 | |||
| 2011 |
$ | 6.05 | $ | 7.13 | 8,852,421 | |||
| 2012 |
$ | 6.20 | $ | 7.28 | 8,722,278 | |||
| 2013 |
$ | 6.25 | $ | 7.41 | 10,341,723 | |||
| 2014 |
$ | 6.21 | $ | 7.35 | 3,471,574 | |||
Crude Oil
Fixed Price Swaps
| Production Period Ended December 31, |
Average Fixed Price (per bbl)(a) |
Volumes (bbls)(a) | |||
|
2010(c) |
$ | 97.06 | 19,145 | ||
| 2011 |
$ | 69.77 | 32,194 | ||
| 2012 |
$ | 71.55 | 26,139 | ||
| 2013 |
$ | 72.26 | 5,900 | ||
Costless Collars
| Production Period Ended December 31, |
Average Floor Price (per bbl)(a) |
Average Ceiling Price (per bbl)(a) |
Volumes (bbls)(a) | |||||
|
2010(c) |
$ | 85.00 | $ | 112.21 | 12,155 | |||
| 2011 |
$ | 60.00 | $ | 80.92 | 20,361 | |||
| 2012 |
$ | 60.00 | $ | 86.50 | 16,777 | |||
| 2013 |
$ | 60.00 | $ | 88.90 | 3,540 | |||
| (a ) | “Mcf” represents thousand cubic feet; “bbl” represents barrel. |
| (b ) | Includes an estimated positive basis differential and Btu (British thermal units) adjustment. |
| ( c ) | Reflects hedges covering the last six months of 2010. |
Interest in Atlas Pipeline and Atlas Pipeline Holdings
Through the Company’s controlling interest in AHD, which owns and operates the general partner of APL and owns 5.8 million limited partner units in APL, the Company recognizes approximately 10% of APL’s net income (loss) after eliminating non-controlling interests. A consolidating statement of operations and balance sheet has been provided in the financial tables of the release, which segregates the Company’s E&P Operations financial results from the APL midstream financial results.
* * *
Interested parties are invited to access the live webcast of an investor call with management regarding Atlas Energy, Inc.’s second quarter 2010 results on Wednesday, August 4, 2010 at 9:00 am ET by going to the Investor Relations section of Atlas Energy’s website at www.atlasenergy.com. For those unavailable to listen to the live broadcast, the replay of the webcast will be available following the live call on the Atlas Energy website and telephonically beginning at 12:00 p.m. ET on August 4, 2010 by dialing 888-286-8010, passcode: 44467180.
At June 30, 2010, the Company had a 100.0% ownership interest in ATN, an approximate 2.1% direct ownership interest in APL, a publicly-traded limited partnership, and an approximate 64.3% limited partner interest and 100% of the general partner interest in AHD. The Company’s financial results are presented on a consolidated basis with those of ATN, AHD, and APL. Non-controlling interests in ATN, AHD, and APL are reflected as income (expense) in the Company’s consolidated statements of operations and as a component of shareholders’ equity on its consolidated balance sheets. A consolidating statement of operations and balance sheet has also been provided in the financial tables to the release for the comparable periods presented.
Please refer to the respective AHD and APL earnings releases for more information with regard to their second quarter 2010 financial results.
Atlas Energy, Inc. is one of the largest independent natural gas producers in the Appalachian and Michigan Basins and a leading producer in the Marcellus Shale in Pennsylvania. Atlas Energy, Inc. is also the country’s largest sponsor and manager of tax-advantaged energy investment partnerships. Atlas Energy also owns 1.1 million common units and 8,000 preferred units in Atlas Pipeline Partners, L.P. and a 64% controlling interest in Atlas Pipeline Holdings. For more information, please visit our website at www.atlasenergy.com, or contact Investor Relations at InvestorRelations@atlasenergy.com.
Atlas Pipeline Partners, L.P. is active in the gathering and processing segments of the midstream natural gas industry. In the Mid-Continent region of Oklahoma, southern Kansas, northern and western Texas and the Texas panhandle, APL owns and operates eight active gas processing plants and a treating facility, as well as approximately 10,300 miles of active intrastate gas gathering pipeline. In Appalachia, APL is a 49% joint venture partner with Williams in Laurel Mountain Midstream, LLC, which manages the natural gas gathering system in that region, namely from the Marcellus Shale in southwestern Pennsylvania. For more information, visit APL’s website at www.atlaspipelinepartners.com or contact investorrelations@atlaspipelinepartners.com.
Atlas Pipeline Holdings, L.P. is a limited partnership which owns and operates the general partner of APL, through which it owns a 1.9% general partner interest, all the incentive distribution rights and approximately 5.8 million common units of APL.
Cautionary Note Regarding Forward-Looking Statements
This document contains forward-looking statements that involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. Atlas Energy, Inc. cautions readers that any forward-looking information is not a guarantee of future performance. Such forward-looking statements include, but are not limited to, statements about future financial and operating results, resource potential, the Company’s plans, objectives, expectations and intentions and other statements that are not historical facts. Risks, assumptions and uncertainties that could cause actual results to materially differ from the forward-looking statements include, but are not limited to, those associated with general economic and business conditions; changes in commodity price; changes in the costs and results of drilling operations; uncertainties about estimates of reserves and resource potential; inability to obtain capital needed for operations; the Company’s level of indebtedness; changes in government environmental policies and other environmental risks; the availability of drilling equipment and the timing of production; tax consequences of business transactions; and other risks, assumptions and uncertainties detailed from time to time in the Company’s reports filed with the U.S. Securities and Exchange Commission (the “SEC”). Forward-looking statements speak only as of the date hereof, and the Company assumes no obligation to update such statements, except as may be required by applicable law.
ATLAS ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per share data)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Revenues: |
||||||||||||||||
| Gas and oil production |
$ | 69,188 | $ | 69,979 | $ | 133,097 | $ | 141,922 | ||||||||
| Well construction and completion |
43,295 | 63,367 | 115,937 | 175,735 | ||||||||||||
| Transmission, gathering and processing |
251,417 | 186,103 | 531,083 | 349,770 | ||||||||||||
| Administration and oversight |
1,865 | 2,642 | 3,912 | 6,495 | ||||||||||||
| Well services |
5,743 | 4,806 | 11,055 | 9,899 | ||||||||||||
| Gain (loss) on mark-to-market derivatives(1) |
8,072 | (18,593 | ) | 12,205 | (18,277 | ) | ||||||||||
| Other, net |
3,860 | 1,964 | 8,117 | 6,845 | ||||||||||||
| Total revenues |
383,440 | 310,268 | 815,406 | 672,389 | ||||||||||||
| Costs and expenses: |
||||||||||||||||
| Gas and oil production |
13,096 | 9,803 | 25,380 | 21,089 | ||||||||||||
| Well construction and completion |
36,682 | 53,701 | 98,243 | 149,098 | ||||||||||||
| Transmission, gathering and processing |
209,927 | 150,363 | 439,984 | 302,890 | ||||||||||||
| Well services |
2,697 | 2,120 | 5,275 | 4,544 | ||||||||||||
| General and administrative |
25,336 | 21,657 | 56,147 | 49,553 | ||||||||||||
| Depreciation, depletion and amortization |
53,366 | 50,272 | 102,620 | 100,967 | ||||||||||||
| Total costs and expenses |
341,104 | 287,916 | 727,649 | 628,141 | ||||||||||||
| Operating income |
42,336 | 22,352 | 87,757 | 44,248 | ||||||||||||
| Gain on asset sales |
288,643 | 105,691 | 285,634 | 105,691 | ||||||||||||
| Interest expense |
(41,596 | ) | (41,948 | ) | (86,195 | ) | (76,568 | ) | ||||||||
| Income from continuing operations before income tax provision |
289,383 | 86,095 | 287,196 | 73,371 | ||||||||||||
| Income tax provision |
113,229 | 3,677 | 111,821 | 6,271 | ||||||||||||
| Net income from continuing operations |
176,154 | 82,418 | 175,375 | 67,100 | ||||||||||||
| Discontinued operations: |
||||||||||||||||
| Gain on sale of discontinued operations (net of income tax provision of $2,228 for the three and six months ended June 30, 2009) |
— | 48,851 | — | 48,851 | ||||||||||||
| Income from discontinued operations (net of income tax provision of $99 and $498 for the three and six months ended June 30, 2009, respectively) |
— | 2,441 | — | 10,918 | ||||||||||||
| Net income |
176,154 | 133,710 | 175,375 | 126,869 | ||||||||||||
| Income attributable to non-controlling interests |
(302 | ) | (124,342 | ) | (1,624 | ) | (112,858 | ) | ||||||||
| Net income attributable to common shareholders |
$ | 175,852 | $ | 9,368 | $ | 173,751 | $ | 14,011 | ||||||||
| Net income attributable to common shareholders per share – basic: |
||||||||||||||||
| Income from continuing operations attributable to common shareholders |
$ | 2.24 | $ | 0.15 | $ | 2.22 | $ | 0.25 | ||||||||
| Income from discontinued operations attributable to common shareholders |
— | 0.09 | — | 0.11 | ||||||||||||
| Net income attributable to common shareholders |
$ | 2.24 | $ | 0.24 | $ | 2.22 | $ | 0.36 | ||||||||
| Net income attributable to common shareholders per share – diluted: |
||||||||||||||||
| Income from continuing operations attributable to common shareholders |
$ | 2.16 | $ | 0.15 | $ | 2.14 | $ | 0.24 | ||||||||
| Income from discontinued operations attributable to common shareholders |
— | 0.09 | — | 0.11 | ||||||||||||
| Net income attributable to common shareholders |
$ | 2.16 | $ | 0.24 | $ | 2.14 | $ | 0.35 | ||||||||
| Weighted average common shares outstanding: |
||||||||||||||||
| Basic |
78,350 | 39,432 | 78,275 | 39,297 | ||||||||||||
| Diluted |
81,373 | 39,803 | 81,217 | 39,717 | ||||||||||||
| Income attributable to common shareholders: |
||||||||||||||||
| Income from continuing operations (net of income tax provision of $113,229 and $3,677 for the three months ended June 30, 2010 and 2009, respectively, and $111,821 and $6,271 for the six months ended June 30, 2010 and 2009, respectively) |
$ | 175,852 | $ | 5,738 | $ | 173,751 | $ | 9,758 | ||||||||
| Income from discontinued operations (net of income tax provision of $2,327 and $2,726 for the three and six months ended June 30, 2009, respectively) |
— | 3,630 | — | 4,253 | ||||||||||||
| Net income attributable to common shareholders |
$ | 175,852 | $ | 9,368 | $ | 173,751 | $ | 14,011 | ||||||||
| (1) | Consists principally of hydrocarbon derivative gains / (losses) that relate to the operating activities of the Company’s consolidated subsidiary, APL. The underlying hydrocarbon derivatives do not represent present or potential future obligations of the Company. |
ATLAS ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited; in thousands)
| June 30, 2010 |
December 31, 2009 | |||||
| ASSETS | ||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ | 91,904 | $ | 20,627 | ||
| Accounts receivable |
160,437 | 172,848 | ||||
| Current portion of derivative asset |
94,626 | 74,064 | ||||
| Subscriptions receivable from Partnerships |
— | 47,275 | ||||
| Prepaid expenses and other |
31,590 | 31,010 | ||||
| Prepaid and deferred taxes |
— | 1,559 | ||||
| Total current assets |
378,557 | 347,383 | ||||
| Property, plant and equipment, net |
3,650,801 | 3,555,802 | ||||
| Goodwill and intangible assets, net |
192,997 | 206,130 | ||||
| Long-term derivative asset |
111,441 | 59,291 | ||||
| Investment in Laurel Mountain joint venture |
134,504 | 132,990 | ||||
| Long-term portion of deferred tax asset |
— | 29,734 | ||||
| Other assets, net |
84,958 | 74,833 | ||||
| $ | 4,553,258 | $ | 4,406,163 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities: |
||||||
| Current portion of long-term debt |
$ | 600 | $ | 8,000 | ||
| Accounts payable |
114,492 | 99,748 | ||||
| Liabilities associated with drilling contracts |
36,012 | 122,532 | ||||
| Accrued producer liabilities |
60,201 | 66,211 | ||||
| Current portion of derivative liability |
5,125 | 38,485 | ||||
| Current portion of derivative payable to Partnerships |
28,610 | 22,382 | ||||
| Accrued interest |
30,616 | 38,898 | ||||
| Accrued well drilling and completion costs |
81,539 | 89,261 | ||||
| Current portion of deferred tax liability |
23,554 | 26,415 | ||||
| Leasehold acquisition liability |
41,949 | — | ||||
| Accrued and other current liabilities |
39,028 | 46,142 | ||||
| Total current liabilities |
461,726 | 558,074 | ||||
| Long-term debt, less current portion |
1,898,019 | 2,040,572 | ||||
| Long-term derivative liability |
44,546 | 25,441 | ||||
| Long-term derivative payable to Partnerships |
40,362 | 22,380 | ||||
| Long-term portion of deferred tax liability |
99,261 | — | ||||
| Other long-term liabilities |
60,009 | 56,180 | ||||
| Shareholders’ equity: |
||||||
| Shareholders’ equity |
1,247,788 | 1,065,290 | ||||
| Accumulated other comprehensive income |
85,929 | 58,022 | ||||
| 1,333,717 | 1,123,312 | |||||
| Non-controlling interests |
615,618 | 580,204 | ||||
| Total shareholders’ equity |
1,949,335 | 1,703,516 | ||||
| $ | 4,553,258 | $ | 4,406,163 | |||
ATLAS ENERGY, INC.
Financial and Operating Highlights
| Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||
| Net income attributable to common shareholders per share – basic |
$ | 2.24 | $ | 0.24 | $ | 2.22 | $ | 0.36 | ||||||
| Adjusted net income attributable to common shareholders per share – basic(1) |
$ | 0.04 | $ | 0.33 | $ | 0.23 | $ | 0.54 | ||||||
| Pro forma adjusted net income attributable to common shareholders per share – basic(1) |
$ | 0.04 | $ | 0.36 | $ | 0.23 | $ | 0.55 | ||||||
| E&P Operations Discretionary Cash Flow per share(2) |
$ | 0.47 | $ | 0.92 | $ | 1.14 | $ | 1.58 | ||||||
| Production revenues (in thousands): |
||||||||||||||
| Natural gas |
$ | 64,462 | $ | 66,897 | $ | 124,004 | $ | 136,771 | ||||||
| Oil |
4,726 | (3) | 3,082 | 9,093 | (3) | 5,151 | ||||||||
| Total production revenues |
$ | 69,188 | (3) | $ | 69,979 | $ | 133,097 | (3) | $ | 141,922 | ||||
| Production volume:( 4)( 5 ) |
||||||||||||||
| Appalachia: |
||||||||||||||
| Natural gas (Mcfd) |
49,689 | 40,770 | 44,886 | 40,341 | ||||||||||
| Oil (Bpd) |
864 | ( 6 ) | 472 | 866 | (6 ) | 433 | ||||||||
| Total (Mcfed) |
54,876 | ( 6 ) | 43,603 | 50,084 | ( 6 ) | 42,939 | ||||||||
| Michigan/Indiana: |
||||||||||||||
| Natural gas (Mcfd) |
54,806 | 58,058 | 54,662 | 58,154 | ||||||||||
| Oil (Bpd) |
29 | ( 6 ) | 11 | 32 | (6 ) | 9 | ||||||||
| Total (Mcfed) |
54,982 | ( 6 ) | 58,127 | 54,851 | ( 6 ) | 58,207 | ||||||||
| Total: |
||||||||||||||
| Natural gas (Mcfd) |
104,495 | 98,828 | 99,547 | 98,495 | ||||||||||
| Oil (Bpd) |
894 | ( 6 ) | 484 | 898 | (6 ) | 442 | ||||||||
| Total (Mcfed) |
109,858 | ( 6 ) | 101,730 | 104,935 | ( 6 ) | 101,146 | ||||||||
| Average sales prices:( 5) |
||||||||||||||
| Natural gas (per Mcf)( 7) (8) |
$ | 7.09 | $ | 7.64 | $ | 7.34 | $ | 7.86 | ||||||
| Oil (per Bbl)( 9) |
78.20 | 70.01 | 75.12 | 64.41 | ||||||||||
| Production costs:(5 )( 10 ) |
||||||||||||||
| Lease operating expenses per Mcfe |
$ | 0.87 | $ | 0.82 | $ | 0.87 | $ | 0.86 | ||||||
| Production taxes per Mcfe |
0.14 | 0.14 | 0.17 | 0.17 | ||||||||||
| Total production costs per Mcfe |
$ | 1.01 | $ | 0.96 | $ | 1.04 | $ | 1.03 | ||||||
| Depletion per Mcfe(5) |
$ | 2.92 | $ | 2.82 | $ | 2.87 | $ | 2.90 | ||||||
| (1) | A reconciliation from net income to adjusted net income attributable to common shareholders per share and pro forma adjusted net income attributable to common shareholders per share is provided in the financial tables of this release. |
| (2) | Calculation consists of discretionary cash flow divided by pro forma weighted average common shares outstanding for the respective period. A reconciliation from net income to discretionary cash flow is provided in the financial tables of this release. Pro forma weighted average common shares outstanding for the respective period consists of the historical basic weighted average shares of the Company for the respective period, adjusted for the 38.8 million shares of the Company’s common stock issued in connection with the Merger. |
| (3) | Includes NGL production revenue for the three and six months ended June 30, 2010. |
| ( 4 ) | Production quantities consist of the sum of (i) the Company’s proportionate share of production from wells in which it has a direct interest, based on the Company’s proportionate net revenue interest in such wells, and (ii) the Company’s proportionate share of production from wells owned by the investment partnerships in which the Company has an interest, based on its equity interest in each such partnership and based on each partnership’s proportionate net revenue interest in these wells. |
| ( 5 ) | “Mcf” and “Mcfd” represent thousand cubic feet and thousand cubic feet per day; “Mcfe” and “Mcfed” represent thousand cubic feet equivalents and thousand cubic feet equivalents per day, and “Bbl” and “Bpd” represent barrels and barrels per day. Barrels are converted to Mcfe using the ratio of six Mcf’s to one barrel. |
| ( 6 ) | Includes NGL production volume for the three and six months ended June 30, 2010. |
| (7) | The Company’s average sales price for natural gas before the effects of financial hedging was $4.32 per Mcf and $3.65 per Mcf for the three months ended June 30, 2010 and 2009, respectively, and $4.96 per Mcf and $4.42 per Mcf for the six months ended June 30, 2010 and 2009, respectively. These amounts exclude the impact of certain allocations of production revenues to investor partners within the investor partnerships. Including the effects of these allocations, average gas sales prices were $6.76 per Mcf ($3.99 per Mcf before the effects of financial hedging) and $7.49 per Mcf ($3.50 per Mcf before the effects of financial hedging) for the three months ended June 30, 2010 and 2009, respectively, and $6.89 per Mcf ($4.51 per Mcf before the effects of financial hedging) and $7.79 per Mcf ($4.35 per Mcf before the effects of financial hedging) for the six months ended June 30, 2010 and 2009, respectively. |
| (8) | Includes adjustments of $(0.1) million and $0.5 million for the three months ended June 30, 2010 and 2009, respectively, and $0.2 million and $2.1 million for the six months ended June 30, 2010 and 2009, respectively, related to cash proceeds received and payments made in June 2007 from the settlement of ineffective derivatives associated with the acquisition of the Company’s Michigan operations. |
| ( 9 ) | The Company’s average sales price for oil before the effects of financial hedging was $71.72 per barrel and $54.06 per barrel for the three months ended June 30, 2010 and 2009, respectively, and $69.67 per barrel and $46.63 per barrel for the six months ended June 30, 2010 and 2009, respectively. |
| ( 10 ) | Production costs include labor to operate the wells and related equipment, repairs and maintenance, materials and supplies, property taxes, severance taxes, insurance and production overhead. These amounts exclude the effects of our proportionate share of lease operating expenses associated with certain allocations of production revenue to investor partners within our investor partnerships. Including the effects of these costs, lease operating expenses per Mcfe were $0.75 per Mcfe ($0.89 per Mcfe for total production costs) and $0.78 per Mcfe ($0.92 per Mcfe for total production costs) for the three months ended June 30, 2010 and 2009, respectively, and $0.72 per Mcfe ($0.89 per Mcfe for total production costs) and $0.84 per Mcfe ($1.01 per Mcfe for total production costs) for the six months ended June 30, 2010 and 2009, respectively. |
ATLAS ENERGY, INC.
CAPITALIZATION INFORMATION
(unaudited; in thousands)
| June 30, 2010 | December 31, 2009 | |||||||||||||||||||||||
| Atlas Energy |
Atlas Pipeline and Atlas Pipeline Holdings |
Consolidated | Atlas Energy |
Atlas Pipeline and Atlas Pipeline Holdings |
Consolidated | |||||||||||||||||||
| Total debt |
$ | 690,259 | $ | 1,208,360 | $ | 1,898,619 | $ | 786,390 | $ | 1,262,182 | $ | 2,048,572 | ||||||||||||
| Less: Cash |
(91,694 | ) | (210 | ) | (91,904 | ) | (19,525 | ) | (1,102 | ) | (20,627 | ) | ||||||||||||
| Total net debt |
598,565 | 1,208,150 | 1,806,715 | 766,865 | 1,261,080 | 2,027,945 | ||||||||||||||||||
| Shareholders’ equity |
1,333,871 | 735,007 | 1,949,335 | (1) | 1,123,481 | 690,726 | 1,703,516 | (1) | ||||||||||||||||
| Total capitalization |
$ | 1,932,436 | $ | 1,943,157 | $ | 3,756,050 | $ | 1,890,346 | $ | 1,951,806 | $ | 3,731,461 | ||||||||||||
| Ratio of net debt to capitalization |
0.31x | 0.41x | ||||||||||||||||||||||
| (1) | Net of eliminated amounts. |
ATLAS ENERGY, INC.
CAPITAL EXPENDITURE DATA
(unaudited; in thousands)
| Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||
| 2010 | 2009(1) | 2010 | 2009(1) | |||||||||||
| Atlas Energy |
$ | 90,262 | (2) | $ | 39,206 | $ | 160,261 | (2) | $ | 96,413 | ||||
| Atlas Pipeline Partners |
15,786 | 58,298 | 26,700 | 130,494 | ||||||||||
| Consolidated capital expenditures |
$ | 106,048 | $ | 97,504 | $ | 186,961 | $ | 226,907 | ||||||
| (1) | Restated to reflect amounts reclassified to discontinued operations due to APL’s sale of its NOARK gas gathering and interstate pipeline system. |
| (2) | Capital expenditures for the three and six months ended June 30, 2010 include approximately $27 million for acreage acquired upon completion of the Company’s joint venture with Reliance, and which was funded with cash proceeds from the closing of the transaction. |
ATLAS ENERGY, INC.
Financial Information
(unaudited; in thousands)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| E&P Operations: |
||||||||||||||||
| Gas and oil production margin(1) |
$ | 55,940 | $ | 86,287 | $ | 127,975 | $ | 145,252 | ||||||||
| Well construction and completion margin |
6,613 | 9,666 | 17,694 | 26,637 | ||||||||||||
| Administration and oversight margin |
1,865 | 2,642 | 3,912 | 6,495 | ||||||||||||
| Well services margin |
3,046 | 2,686 | 5,780 | 5,355 | ||||||||||||
| Gathering |
(1,427 | ) | (2,089 | ) | (4,637 | ) | (4,846 | ) | ||||||||
| E&P Operations Gross Margin |
66,037 | 99,192 | 150,724 | 178,893 | ||||||||||||
| Cash general and administrative expenses(2) |
(14,555 | ) | (11,923 | ) | (30,919 | ) | (26,434 | ) | ||||||||
| Other, net |
976 | (1,466 | ) | 1,775 | (1,419 | ) | ||||||||||
| E&P Operations Adjusted EBITDA(3 ) |
52,458 | 85,803 | 121,580 | 151,040 | ||||||||||||
| Cash interest expense( 4) |
(15,579 | ) | (14,094 | ) | (32,545 | ) | (26,384 | ) | ||||||||
| E&P Operations Discretionary Cash Flow(3 ) |
36,879 | 71,709 | 89,035 | 124,656 | ||||||||||||
| Capital expenditures |
(90,262 | ) | (39,206 | ) | (160,261 | ) | (96,413 | ) | ||||||||
| E&P Operations Free Cash Flow(3 ) (5) |
$ | (53,383 | ) | $ | 32,503 | $ | (71,226 | ) | $ | 28,243 | ||||||
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Reconciliation of non-GAAP measures to net income attributable to common shareholders( 3) : |
||||||||||||||||
| E&P Operations Discretionary Cash Flow |
$ | 36,879 | $ | 71,709 | $ | 89,035 | $ | 124,656 | ||||||||
| Atlas Pipeline and Atlas Pipeline Holdings net income (loss) attributable to common shareholders |
(742 | ) | 11,640 | (1,603 | ) | 8,847 | ||||||||||
| Income tax provision |
(113,229 | ) | (3,677 | ) | (111,821 | ) | (6,271 | ) | ||||||||
| Non-recurring Merger costs |
— | (644 | ) | — | (644 | ) | ||||||||||
| Depreciation, depletion and amortization |
(30,467 | ) | (27,273 | ) | (56,975 | ) | (55,300 | ) | ||||||||
| Amortization of deferred finance costs |
(1,408 | ) | (1,002 | ) | (2,474 | ) | (1,667 | ) | ||||||||
| Non-cash stock compensation expense |
(3,960 | ) | (1,778 | ) | (7,823 | ) | (5,021 | ) | ||||||||
| Non-cash net gain (loss) on asset sales |
288,641 | (4,250 | ) | 285,699 | (4,250 | ) | ||||||||||
| Income attributable to ATN non-controlling interests( 6) |
(14 | ) | (6,338 | ) | (29 | ) | (15,716 | ) | ||||||||
| Adjustments to reflect the cash impact of derivatives( 1) |
152 | (29,019 | ) | (20,258 | ) | (30,623 | ) | |||||||||
| Net income attributable to common shareholders |
$ | 175,852 | $ | 9,368 | $ | 173,751 | $ | 14,011 | ||||||||
| (1) | Includes adjustments to reflect the cash impact of derivatives, including (i) $20.1 million of cash proceeds received in January 2010 from the early settlement of natural gas and oil derivative positions, (ii) $28.5 million of cash proceeds received in May 2009 from the early settlement of natural gas and oil derivative positions and (iii) adjustments related to cash proceeds received and payments made in June 2007 from the settlement of ineffective derivatives associated with the acquisition of the Company’s Michigan operations. |
| (2) | Excludes non-cash stock-compensation expense. |
| ( 3 ) | Adjusted EBITDA, discretionary cash flow and free cash flow are non-GAAP (generally accepted accounting principles) financial measures under the rules of the Securities and Exchange Commission. Management of the Company believes that adjusted EBITDA, discretionary cash flow and free cash flow provide additional information for evaluating the Company’s performance, among other things. These measures are widely used by commercial banks, investment bankers, rating agencies and investors in evaluating performance relative to peers and pre-set performance standards. Adjusted EBITDA is also a financial measurement that, with certain negotiated adjustments, is utilized within Atlas Energy Resources’ financial covenants under its credit facility. Adjusted EBITDA, discretionary cash flow and free cash flow are not measures of financial performance under GAAP and, accordingly, should not be considered as a substitute for net income, operating income, or cash flows from operating activities in accordance with GAAP. |
| ( 4 ) | Excludes non-cash amortization of deferred financing costs. |
| ( 5 ) | Excludes the impact of cash distributions paid by Atlas Energy Resources, LLC to its non-controlling interests for periods prior to the Merger on September 29, 2009. |
| ( 6 ) | Represents the non-controlling interests in the net income of Atlas Energy Resources, LLC prior to the Merger on September 29, 2009. |
ATLAS ENERGY, INC.
Financial Information
(unaudited; in thousands, except per share data)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Reconciliation of net income attributable to common shareholders to non-GAAP measure(1): |
||||||||||||||||
| Net income attributable to common shareholders |
$ | 175,852 | $ | 9,368 | $ | 173,751 | $ | 14,011 | ||||||||
| Atlas Pipeline and Atlas Pipeline Holdings (income) loss attributable to common shareholders |
742 | (11,640 | ) | 1,603 | (8,847 | ) | ||||||||||
| Non-recurring Merger costs |
— | 644 | — | 644 | ||||||||||||
| Adjustments to reflect the cash impact of derivatives |
(152 | ) | 29,019 | 20,258 | 30,623 | |||||||||||
| Non-cash net (gain) loss on asset sales |
(288,641 | ) | 4,250 | (285,699 | ) | 4,250 | ||||||||||
| Non-cash stock compensation expense |
3,960 | 1,778 | 7,823 | 5,021 | ||||||||||||
| Adjustment to non-controlling interests for the above items |
— | (18,279 | ) | — | (19,897 | ) | ||||||||||
| Tax effect of the above items |
111,274 | (2,262 | ) | 100,008 | (4,622 | ) | ||||||||||
| Adjusted net income attributable to common shareholders |
$ | 3,035 | $ | 12,878 | $ | 17,744 | $ | 21,183 | ||||||||
| Basic |
$ | 0.04 | $ | 0.33 | $ | 0.23 | $ | 0.54 | ||||||||
| Diluted |
$ | 0.04 | $ | 0.32 | $ | 0.22 | $ | 0.53 | ||||||||
| Weighted average common shares outstanding: |
||||||||||||||||
| Basic |
78,350 | 39,432 | 78,275 | 39,297 | ||||||||||||
| Diluted |
81,373 | 39,803 | 81,217 | 39,717 | ||||||||||||
| Adjusted net income attributable to common shareholders |
$ | 3,035 | $ | 12,878 | $ | 17,744 | $ | 21,183 | ||||||||
| Adjustment to remove non-controlling interests for Atlas Energy Resources, LLC (2) |
— | 24,617 | — | 35,613 | ||||||||||||
| Tax effect of the above item |
— | (9,647 | ) | — | (13,956 | ) | ||||||||||
| Pro forma adjusted net income attributable to common shareholders |
$ | 3,035 | $ | 27,848 | $ | 17,744 | $ | 42,840 | ||||||||
| Pro forma adjusted net income attributable to common shareholders per share: |
||||||||||||||||
| Basic |
$ | 0.04 | $ | 0.36 | $ | 0.23 | $ | 0.55 | ||||||||
| Diluted |
$ | 0.04 | $ | 0.35 | $ | 0.22 | $ | 0.54 | ||||||||
| Pro forma weighted average common shares outstanding(3): |
||||||||||||||||
| Basic |
78,350 | 78,208 | 78,275 | 78,073 | ||||||||||||
| Diluted |
81,373 | 78,579 | 81,217 | 79,047 | ||||||||||||
| (1) | Adjusted net income attributable to common shareholders is a non-GAAP financial measure under the rules of the Securities and Exchange Commission. Management of the Company believes that the above financial measure provides additional information with respect to the Company’s ability to meet its capital expense and working capital requirements. Adjusted net income is not a measure of financial performance under GAAP and, accordingly, should not be considered as a substitute for revenues, net income or cash flows from operating activities prepared in accordance with GAAP. |
| (2) | Adjusted to reflect the Merger on September 29, 2009, through which the Company issued 38.8 million shares of its common stock in exchange for the 33.4 million Class B common units of ATN not previously held by the Company. The Merger effectively removes the non-controlling interests in the net income of ATN upon the completion of the transaction. |
| (3) | Consists of the historical basic and diluted weighted average shares of the Company for the respective period, adjusted for the 38.8 million shares of the Company’s common stock issued in connection with the Merger. |
ATLAS ENERGY, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
(unaudited; in thousands)
Three Months Ended June 30, 2010
| Atlas Energy |
Atlas Pipeline and Atlas Pipeline Holdings |
Eliminations | Consolidated | |||||||||||||
| Revenues: |
||||||||||||||||
| Gas and oil production |
$ | 69,188 | $ | — | $ | — | $ | 69,188 | ||||||||
| Well construction and completion |
43,295 | — | — | 43,295 | ||||||||||||
| Transmission, gathering and processing |
5,778 | 245,639 | — | 251,417 | ||||||||||||
| Administration and oversight |
1,865 | — | — | 1,865 | ||||||||||||
| Well services |
5,743 | — | — | 5,743 | ||||||||||||
| Gain on mark-to-market derivatives |
75 | 7,997 | — | 8,072 | ||||||||||||
| Other, net |
901 | 3,456 | (497 | ) | 3,860 | |||||||||||
| Total revenues |
126,845 | 257,092 | (497 | ) | 383,440 | |||||||||||
| Costs and expenses: |
||||||||||||||||
| Gas and oil production |
13,096 | — | — | 13,096 | ||||||||||||
| Well construction and completion |
36,682 | — | — | 36,682 | ||||||||||||
| Transmission, gathering and processing |
7,205 | 202,722 | — | 209,927 | ||||||||||||
| Well services |
2,697 | — | — | 2,697 | ||||||||||||
| General and administrative |
18,515 | 6,821 | — | 25,336 | ||||||||||||
| Depreciation, depletion and amortization |
30,467 | 22,899 | — | 53,366 | ||||||||||||
| Total costs and expenses |
108,662 | 232,442 | — | 341,104 | ||||||||||||
| Operating income |
18,183 | 24,650 | (497 | ) | 42,336 | |||||||||||
| Gain on asset sales |
288,641 | 2 | — | 288,643 | ||||||||||||
| Interest expense |
(16,987 | ) | (25,106 | ) | 497 | (41,596 | ) | |||||||||
| Income (loss) from continuing operations before income tax provision |
289,837 | (454 | ) | — | 289,383 | |||||||||||
| Income tax provision |
113,229 | — | — | 113,229 | ||||||||||||
| Net income (loss) from continuing operations |
176,608 | (454 | ) | — | 176,154 | |||||||||||
| Discontinued operations |
— | — | — | — | ||||||||||||
| Net income (loss) |
176,608 | (454 | ) | — | 176,154 | |||||||||||
| Income attributable to non-controlling interests – E&P Operations |
(14 | ) | — | — | (14 | ) | ||||||||||
| Income attributable to non-controlling interests – Atlas Pipeline and Atlas Pipeline Holdings |
— | (946 | ) | 658 | (288 | ) | ||||||||||
| Net income (loss) attributable to common shareholders |
$ | 176,594 | $ | (1,400 | ) | $ | 658 | $ | 175,852 | |||||||
ATLAS ENERGY, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
(unaudited; in thousands)
Three Months Ended June 30, 2009
| Atlas Energy |
Atlas Pipeline and Atlas Pipeline Holdings |
Eliminations | Consolidated | |||||||||||||
| Revenues: |
||||||||||||||||
| Gas and oil production |
$ | 69,979 | $ | — | $ | — | $ | 69,979 | ||||||||
| Well construction and completion |
63,367 | — | — | 63,367 | ||||||||||||
| Transmission, gathering and processing |
5,389 | 187,331 | (6,617 | ) | 186,103 | |||||||||||
| Administration and oversight |
2,642 | — | — | 2,642 | ||||||||||||
| Well services |
4,806 | — | — | 4,806 | ||||||||||||
| Loss on mark-to-market derivatives |
— | (18,593 | ) | — | (18,593 | ) | ||||||||||
| Other, net |
(1,466 | ) | 3,430 | — | 1,964 | |||||||||||
| Total revenues |
144,717 | 172,168 | (6,617 | ) | 310,268 | |||||||||||
| Costs and expenses: |
||||||||||||||||
| Gas and oil production |
12,711 | — | (2,908 | ) | 9,803 | |||||||||||
| Well construction and completion |
53,701 | — | — | 53,701 | ||||||||||||
| Transmission, gathering and processing |
7,478 | 146,594 | (3,709 | ) | 150,363 | |||||||||||
| Well services |
2,120 | — | — | 2,120 | ||||||||||||
| General and administrative |
14,345 | 7,312 | — | 21,657 | ||||||||||||
| Depreciation, depletion and amortization |
27,273 | 22,999 | — | 50,272 | ||||||||||||
| Total costs and expenses |
117,628 | 176,905 | (6,617 | ) | 287,916 | |||||||||||
| Operating income (loss) |
27,089 | (4,737 | ) | — | 22,352 | |||||||||||
| (Loss) gain on asset sales |
(4,250 | ) | 109,941 | — | 105,691 | |||||||||||
| Interest expense |
(15,096 | ) | (26,852 | ) | — | (41,948 | ) | |||||||||
| Income from continuing operations before income tax provision |
7,743 | 78,352 | — | 86,095 | ||||||||||||
| Income tax provision |
3,677 | — | — | 3,677 | ||||||||||||
| Net income from continuing operations |
4,066 | 78,352 | — | 82,418 | ||||||||||||
| Discontinued operations |
— | 51,292 | — | 51,292 | ||||||||||||
| Net income |
4,066 | 129,644 | — | 133,710 | ||||||||||||
| Income attributable to non-controlling interests – E&P Operations |
(6,338 | ) | — | — | (6,338 | ) | ||||||||||
| Income attributable to non-controlling interests – Atlas Pipeline and Atlas Pipeline Holdings |
— | (653 | ) | (117,351 | ) | (118,004 | ) | |||||||||
| Net income (loss) attributable to common shareholders |
$ | (2,272 | ) | $ | 128,991 | $ | (117,351 | ) | $ | 9,368 | ||||||
ATLAS ENERGY, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
(unaudited; in thousands)
Six Months Ended June 30, 2010
| Atlas Energy |
Atlas Pipeline and Atlas Pipeline Holdings |
Eliminations | Consolidated | |||||||||||||
| Revenues: |
||||||||||||||||
| Gas and oil production |
$ | 133,097 | $ | — | $ | — | $ | 133,097 | ||||||||
| Well construction and completion |
115,937 | — | — | 115,937 | ||||||||||||
| Transmission, gathering and processing |
10,239 | 520,844 | — | 531,083 | ||||||||||||
| Administration and oversight |
3,912 | — | — | 3,912 | ||||||||||||
| Well services |
11,055 | — | — | 11,055 | ||||||||||||
| Gain on mark-to-market derivatives |
75 | 12,130 | — | 12,205 | ||||||||||||
| Other, net |
1,700 | 7,396 | (979 | ) | 8,117 | |||||||||||
| Total revenues |
276,015 | 540,370 | (979 | ) | 815,406 | |||||||||||
| Costs and expenses: |
||||||||||||||||
| Gas and oil production |
25,380 | — | — | 25,380 | ||||||||||||
| Well construction and completion |
98,243 | — | — | 98,243 | ||||||||||||
| Transmission, gathering and processing |
14,876 | 425,108 | — | 439,984 | ||||||||||||
| Well services |
5,275 | — | — | 5,275 | ||||||||||||
| General and administrative |
38,742 | 17,405 | — | 56,147 | ||||||||||||
| Depreciation, depletion and amortization |
56,975 | 45,645 | — | 102,620 | ||||||||||||
| Total costs and expenses |
239,491 | 488,158 | — | 727,649 | ||||||||||||
| Operating income |
36,524 | 52,212 | (979 | ) | 87,757 | |||||||||||
| Gain (loss) on asset sales |
285,699 | (65 | ) | — | 285,634 | |||||||||||
| Interest expense |
(35,019 | ) | (52,155 | ) | 979 | (86,195 | ) | |||||||||
| Income (loss) from continuing operations before income tax provision |
287,204 | (8 | ) | — | 287,196 | |||||||||||
| Income tax provision |
111,821 | — | — | 111,821 | ||||||||||||
| Net income (loss) from continuing operations |
175,383 | (8 | ) | — | 175,375 | |||||||||||
| Discontinued operations |
— | — | — | — | ||||||||||||
| Net income (loss) |
175,383 | (8 | ) | — | 175,375 | |||||||||||
| Income attributable to non-controlling interests – E&P Operations |
(29 | ) | — | — | (29 | ) | ||||||||||
| (Income) loss attributable to non-controlling interests – Atlas Pipeline and Atlas Pipeline Holdings |
— | (2,263 | ) | 668 | (1,595 | ) | ||||||||||
| Net income (loss) attributable to common shareholders |
$ | 175,354 | $ | (2,271 | ) | $ | 668 | $ | 173,751 | |||||||
ATLAS ENERGY, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
(unaudited; in thousands)
Six Months Ended June 30, 2009
| Atlas Energy |
Atlas Pipeline and Atlas Pipeline Holdings |
Eliminations | Consolidated | |||||||||||||
| Revenues: |
||||||||||||||||
| Gas and oil production |
$ | 141,922 | $ | — | $ | — | $ | 141,922 | ||||||||
| Well construction and completion |
175,735 | — | — | 175,735 | ||||||||||||
| Transmission, gathering and processing |
10,112 | 356,424 | (16,766 | ) | 349,770 | |||||||||||
| Administration and oversight |
6,495 | — | — | 6,495 | ||||||||||||
| Well services |
9,899 | — | — | 9,899 | ||||||||||||
| Loss on mark-to-market derivatives |
— | (18,277 | ) | — | (18,277 | ) | ||||||||||
| Other, net |
(1,419 | ) | 8,264 | — | 6,845 | |||||||||||
| Total revenues |
342,744 | 346,411 | (16,766 | ) | 672,389 | |||||||||||
| Costs and expenses: |
||||||||||||||||
| Gas and oil production |
27,293 | — | (6,204 | ) | 21,089 | |||||||||||
| Well construction and completion |
149,098 | — | — | 149,098 | ||||||||||||
| Transmission, gathering and processing |
14,958 | 298,494 | (10,562 | ) | 302,890 | |||||||||||
| Well services |
4,544 | — | — | 4,544 | ||||||||||||
| General and administrative |
32,099 | 17,454 | — | 49,553 | ||||||||||||
| Depreciation, depletion and amortization |
55,300 | 45,667 | — | 100,967 | ||||||||||||
| Total costs and expenses |
283,292 | 361,615 | (16,766 | ) | 628,141 | |||||||||||
| Operating income (loss) |
59,452 | (15,204 | ) | — | 44,248 | |||||||||||
| (Loss) gain on asset sales |
(4,250 | ) | 109,941 | — | 105,691 | |||||||||||
| Interest expense |
(28,051 | ) | (48,517 | ) | — | (76,568 | ) | |||||||||
| Income from continuing operations before income tax provision |
27,151 | 46,220 | — | 73,371 | ||||||||||||
| Income tax provision |
6,271 | — | — | 6,271 | ||||||||||||
| Net income from continuing operations |
20,880 | 46,220 | — | 67,100 | ||||||||||||
| Discontinued operations |
— | 59,769 | — | 59,769 | ||||||||||||
| Net income |
20,880 | 105,989 | — | 126,869 | ||||||||||||
| Income attributable to non-controlling interests – E&P Operations |
(15,716 | ) | — | — | (15,716 | ) | ||||||||||
| Income attributable to non-controlling interests – Atlas Pipeline and Atlas Pipeline Holdings |
— | (1,122 | ) | (96,020 | ) | (97,142 | ) | |||||||||
| Net income attributable to common shareholders |
$ | 5,164 | $ | 104,867 | $ | (96,020 | ) | $ | 14,011 | |||||||
ATLAS ENERGY, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS
(unaudited; in thousands)
June 30, 2010
| Atlas Energy |
Atlas Pipeline and Atlas Pipeline Holdings |
Eliminations | Consolidated | |||||||||||
| ASSETS | ||||||||||||||
| Current assets: |
||||||||||||||
| Cash and cash equivalents |
$ | 91,694 | $ | 210 | $ | — | $ | 91,904 | ||||||
| Accounts receivable |
139,994 | 53,824 | (33,381 | ) | 160,437 | |||||||||
| Current portion of derivative asset |
85,754 | 8,872 | — | 94,626 | ||||||||||
| Prepaid expenses and other |
15,868 | 15,722 | — | 31,590 | ||||||||||
| Prepaid and deferred taxes |
— | — | — | — | ||||||||||
| Total current assets |
333,310 | 78,628 | (33,381 | ) | 378,557 | |||||||||
| Property, plant and equipment, net |
1,971,220 | 1,679,581 | — | 3,650,801 | ||||||||||
| Goodwill and intangible assets, net |
37,684 | 155,313 | — | 192,997 | ||||||||||
| Long-term derivative asset |
110,928 | 513 | — | 111,441 | ||||||||||
| Investment in Laurel Mountain joint venture |
— | 134,504 | — | 134,504 | ||||||||||
| Long-term portion of deferred tax asset |
— | — | — | — | ||||||||||
| Investment in subsidiaries |
119,543 | — | (119,543 | ) | — | |||||||||
| Other assets, net |
54,198 | 30,760 | — | 84,958 | ||||||||||
| $ | 2,626,883 | $ | 2,079,299 | $ | (152,924 | ) | $ | 4,553,258 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||
| Current liabilities: |
||||||||||||||
| Current portion of long-term debt |
$ | — | $ | 33,981 | $ | (33,381 | ) | $ | 600 | |||||
| Accounts payable |
94,890 | 19,602 | — | 114,492 | ||||||||||
| Liabilities associated with drilling contracts |
36,012 | — | — | 36,012 | ||||||||||
| Accrued producer liabilities |
— | 60,201 | — | 60,201 | ||||||||||
| Current portion of derivative liability |
4,106 | 1,019 | — | 5,125 | ||||||||||
| Current portion of derivative payable to Partnerships |
28,610 | — | — | 28,610 | ||||||||||
| Accrued interest |
28,037 | 2,579 | — | 30,616 | ||||||||||
| Accrued well drilling and completion costs |
81,539 | — | — | 81,539 | ||||||||||
| Current portion of deferred tax liability |
23,554 | — | — | 23,554 | ||||||||||
| Leasehold acquisition liability |
41,949 | — | — | 41,949 | ||||||||||
| Accrued and other current liabilities |
24,972 | 14,056 | — | 39,028 | ||||||||||
| Total current liabilities |
363,669 | 131,438 | (33,381 | ) | 461,726 | |||||||||
| Long-term debt, less current portion |
690,259 | 1,207,760 | — | 1,898,019 | ||||||||||
| Long-term derivative liability |
39,768 | 4,778 | — | 44,546 | ||||||||||
| Long-term derivative payable to Partnerships |
40,362 | — | — | 40,362 | ||||||||||
| Long-term portion of deferred tax liability |
99,261 | — | — | 99,261 | ||||||||||
| Other long-term liabilities |
59,693 | 316 | — | 60,009 | ||||||||||
| Shareholders’ equity: |
||||||||||||||
| Shareholders’ equity (deficit) |
1,247,788 | (3,978 | ) | 3,978 | 1,247,788 | |||||||||
| Accumulated other comprehensive income (loss) |
85,929 | (27,757 | ) | 27,757 | 85,929 | |||||||||
| 1,333,717 | (31,735 | ) | 31,735 | 1,333,717 | ||||||||||
| Non-controlling interests |
154 | 766,742 | (151,278 | ) | 615,618 | |||||||||
| Total shareholders’ equity |
1,333,871 | 735,007 | (119,543 | ) | 1,949,335 | |||||||||
| $ | 2,626,883 | $ | 2,079,299 | $ | (152,924 | ) | $ | 4,553,258 | ||||||
ATLAS ENERGY, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS
(unaudited; in thousands)
December 31, 2009
| Atlas Energy |
Atlas Pipeline and Atlas Pipeline Holdings |
Eliminations | Consolidated | |||||||||||
| ASSETS | ||||||||||||||
| Current assets: |
||||||||||||||
| Cash and cash equivalents |
$ | 19,525 | $ | 1,102 | $ | — | $ | 20,627 | ||||||
| Accounts receivable |
98,687 | 98,416 | (24,255 | ) | 172,848 | |||||||||
| Current portion of derivative asset |
73,066 | 998 | — | 74,064 | ||||||||||
| Subscriptions receivable from Partnerships |
47,275 | — | — | 47,275 | ||||||||||
| Prepaid expenses and other |
15,606 | 15,404 | — | 31,010 | ||||||||||
| Prepaid and deferred taxes |
1,559 | — | — | 1,559 | ||||||||||
| Total current assets |
255,718 | 115,920 | (24,255 | ) | 347,383 | |||||||||
| Property, plant and equipment, net |
1,871,418 | 1,684,384 | — | 3,555,802 | ||||||||||
| Goodwill and intangible assets, net |
38,039 | 168,091 | — | 206,130 | ||||||||||
| Long-term derivative asset |
58,930 | 361 | — | 59,291 | ||||||||||
| Investment in Laurel Mountain joint venture |
— | 132,990 | — | 132,990 | ||||||||||
| Long-term portion of deferred tax asset |
29,734 | — | — | 29,734 | ||||||||||
| Investment in subsidiaries |
110,691 | — | (110,691 | ) | — | |||||||||
| Other assets, net |
40,719 | 34,114 | — | 74,833 | ||||||||||
| $ | 2,405,249 | $ | 2,135,860 | $ | (134,946 | ) | $ | 4,406,163 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||
| Current liabilities: |
||||||||||||||
| Current portion of long-term debt |
$ | — | $ | 32,255 | $ | (24,255 | ) | $ | 8,000 | |||||
| Accounts payable |
76,820 | 22,928 | — | 99,748 | ||||||||||
| Liabilities associated with drilling contracts |
122,532 | — | — | 122,532 | ||||||||||
| Accrued producer liabilities |
— | 66,211 | — | 66,211 | ||||||||||
| Current portion of derivative liability |
4,652 | 33,833 | — | 38,485 | ||||||||||
| Current portion of derivative payable to Partnerships |
22,382 | — | — | 22,382 | ||||||||||
| Accrued interest |
29,245 | 9,653 | — | 38,898 | ||||||||||
| Accrued well drilling and completion costs |
89,261 | — | — | 89,261 | ||||||||||
| Current portion of deferred tax liability |
26,415 | — | — | 26,415 | ||||||||||
| Accrued and other current liabilities |
31,594 | 14,548 | — | 46,142 | ||||||||||
| Total current liabilities |
402,901 | 179,428 | (24,255 | ) | 558,074 | |||||||||
| Long-term debt, less current portion |
786,390 | 1,254,182 | — | 2,040,572 | ||||||||||
| Long-term derivative liability |
14,315 | 11,126 | — | 25,441 | ||||||||||
| Long-term derivative payable to Partnerships |
22,380 | — | — | 22,380 | ||||||||||
| Other long-term liabilities |
55,782 | 398 | — | 56,180 | ||||||||||
| Shareholders’ equity: |
||||||||||||||
| Shareholders’ equity (deficit) |
1,065,290 | (7,755 | ) | 7,755 | 1,065,290 | |||||||||
| Accumulated other comprehensive income (loss) |
58,022 | (6,550 | ) | 6,550 | 58,022 | |||||||||
| 1,123,312 | (14,305 | ) | 14,305 | 1,123,312 | ||||||||||
| Non-controlling interests |
169 | 705,031 | (124,996 | ) | 580,204 | |||||||||
| Total shareholders’ equity |
1,123,481 | 690,726 | (110,691 | ) | 1,703,516 | |||||||||
| $ | 2,405,249 | $ | 2,135,860 | $ | (134,946 | ) | $ | 4,406,163 | ||||||
ATLAS ENERGY RESOURCES, LLC
STAND-ALONE CONSOLIDATED STATEMENTS OF OPERATIONS DATA
(unaudited; in thousands, except per unit data)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Revenues: |
||||||||||||||||
| Gas and oil production |
$ | 69,188 | $ | 69,979 | $ | 133,097 | $ | 141,922 | ||||||||
| Well construction and completion |
43,295 | 63,367 | 115,937 | 175,735 | ||||||||||||
| Gathering |
5,778 | 5,389 | 10,239 | 10,112 | ||||||||||||
| Administration and oversight |
1,865 | 2,642 | 3,912 | 6,495 | ||||||||||||
| Well services |
5,743 | 4,806 | 11,055 | 9,899 | ||||||||||||
| Other, net |
862 | — | 1,071 | 79 | ||||||||||||
| Total revenues |
126,731 | 146,183 | 275,311 | 344,242 | ||||||||||||
| Costs and expenses: |
||||||||||||||||
| Gas and oil production |
13,096 | 12,711 | 25,380 | 27,292 | ||||||||||||
| Well construction and completion |
36,682 | 53,701 | 98,243 | 149,098 | ||||||||||||
| Gathering |
7,205 | 6,485 | 14,876 | 10,978 | ||||||||||||
| Well services |
2,697 | 2,120 | 5,275 | 4,544 | ||||||||||||
| General and administrative |
12,748 | 12,268 | 27,062 | 26,817 | ||||||||||||
| Depreciation, depletion and amortization |
30,467 | 27,275 | 56,975 | 55,303 | ||||||||||||
| Total costs and expenses |
102,895 | 114,560 | 227,811 | 274,032 | ||||||||||||
| Operating income |
23,836 | 31,623 | 47,500 | 70,210 | ||||||||||||
| Gain (loss) on asset sales |
288,641 | (4,250 | ) | 285,699 | (4,250 | ) | ||||||||||
| Interest expense |
(16,987 | ) | (15,124 | ) | (35,019 | ) | (28,108 | ) | ||||||||
| Net income |
295,490 | 12,249 | 298,180 | 37,852 | ||||||||||||
| Income attributable to non-controlling interests |
(14 | ) | (15 | ) | (29 | ) | (30 | ) | ||||||||
| Net income attributable to owner’s/members’ interests |
$ | 295,476 | $ | 12,234 | $ | 298,151 | $ | 37,822 | ||||||||
| Allocation of net income attributable to owner’s/members’ interests: |
||||||||||||||||
| Portion allocable to members’ interests (period prior to Merger on September 29, 2009) |
$ | — | $ | 12,234 | $ | — | $ | 37,822 | ||||||||
| Portion allocable to owner’s interest (period subsequent to Merger on September 29, 2009) |
295,476 | — | 298,151 | — | ||||||||||||
| Net income attributable to owner’s/members’ interests |
$ | 295,476 | $ | 12,234 | $ | 298,151 | $ | 37,822 | ||||||||
| Allocation of net income attributable to members’ interests: |
||||||||||||||||
| Class A member’s units |
$ | — | $ | 245 | $ | — | $ | 825 | ||||||||
| Class B members’ units |
— | 11,989 | — | 36,997 | ||||||||||||
| Net income attributable to members’ interests |
$ | — | $ | 12,234 | $ | — | $ | 37,822 | ||||||||
| Net income attributable to Class B members per unit: |
||||||||||||||||
| Basic |
$ | — | $ | 0.19 | $ | — | $ | 0.70 | ||||||||
| Diluted |
$ | — | $ | 0.19 | $ | — | $ | 0.70 | ||||||||
| Weighted average Class B members’ units outstanding: |
||||||||||||||||
| Basic |
— | 63,381 | — | 63,381 | ||||||||||||
| Diluted |
— | 63,381 | — | 63,381 | ||||||||||||
ATLAS ENERGY RESOURCES, LLC
STAND-ALONE CONDENSED CONSOLIDATED BALANCE SHEET DATA
(unaudited; in thousands)
| June 30, 2010 |
December 31, 2009 | |||||
| ASSETS |
||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ | 89,007 | $ | 3,640 | ||
| Accounts receivable |
81,128 | 71,058 | ||||
| Receivable from Reliance |
16,781 | — | ||||
| Current portion of derivative receivable from Partnerships |
450 | 270 | ||||
| Current portion of derivative asset |
85,754 | 73,066 | ||||
| Subscriptions receivable from Partnerships |
— | 47,275 | ||||
| Prepaid expenses and other |
15,609 | 15,621 | ||||
| Total current assets |
288,729 | 210,930 | ||||
| Property, plant and equipment, net |
1,971,220 | 1,871,418 | ||||
| Other assets, net |
20,108 | 20,906 | ||||
| Advances to affiliates |
27,508 | 5,689 | ||||
| Long-term derivative asset |
110,928 | 58,930 | ||||
| Long-term portion of derivative receivable from Partnerships |
11,273 | 2,841 | ||||
| Intangible assets, net |
2,518 | 2,873 | ||||
| Goodwill, net |
35,166 | 35,166 | ||||
| $ | 2,467,450 | $ | 2,208,753 | |||
| LIABILITIES AND OWNER’S EQUITY |
||||||
| Current liabilities: |
||||||
| Accounts payable |
$ | 94,953 | $ | 76,993 | ||
| Accrued interest |
28,037 | 29,245 | ||||
| Accrued liabilities |
11,385 | 14,308 | ||||
| Liabilities associated with drilling contracts |
36,012 | 122,532 | ||||
| Accrued well drilling and completion costs |
81,539 | 89,261 | ||||
| Leasehold acquisition liability |
41,949 | — | ||||
| Current portion of derivative payable to Partnerships |
28,610 | 22,382 | ||||
| Current portion of derivative liability |
4,106 | 4,652 | ||||
| Total current liabilities |
326,591 | 359,373 | ||||
| Long-term debt, less current portion |
690,259 | 786,390 | ||||
| Long-term derivative payable to Partnerships |
40,362 | 22,380 | ||||
| Long-term derivative liability |
39,768 | 14,315 | ||||
| Asset retirement obligations |
53,455 | 51,813 | ||||
| Commitments and contingencies |
||||||
| Owner’s equity: |
||||||
| Owner’s equity |
1,171,321 | 873,170 | ||||
| Accumulated other comprehensive income |
145,540 | 101,143 | ||||
| 1,316,861 | 974,313 | |||||
| Non-controlling interests |
154 | 169 | ||||
| Total owner’s equity |
1,317,015 | 974,482 | ||||
| $ | 2,467,450 | $ | 2,208,753 | |||
ATLAS ENERGY, INC.
Ownership Interests Summary
| Atlas Energy Ownership Interests as of June 30, 2010: |
Amount | Overall Ownership Interest Percentage |
||||
| ATLAS PIPELINE HOLDINGS(1): |
||||||
| General partner interest |
100 | % | N/A | |||
| Common units |
17,808,109 | 64.3 | % | |||
| Total |
64.3 | % | ||||
| ATLAS PIPELINE: |
||||||
| Atlas Energy directly-owned common units |
1,112,000 | 2.1 | % | |||
| Atlas Pipeline 12% Cumulative Preferred Units ($1,000 par value) |
8,000 | N/A | ||||
| LIGHTFOOT CAPITAL PARTNERS, GP LLC: |
||||||
| Approximate ownership interest |
18.0 | % | ||||
|
(1) Atlas Pipeline Holdings directly owns the following ownership interests in Atlas Pipeline Partners:
|
| |||||
| General partner interest |
100 | % | 1.9 | % | ||
| Common units |
5,754,253 | 10.8 | % | |||
| Incentive distribution rights |
100 | % | N/A | |||
| Total Atlas Pipeline Holdings direct ownership interests in Atlas Pipeline |
12.7 | % | ||||