(RTTNews) - Natural gas storage and transportation company DCP Midstream Partners, LP (DPM: News ) on Thursday reported a net loss for the second quarter that narrowed from the year-ago period as a 56% decline in operating revenues was offset by lower costs and expenses. In addition, losses from commodity derivative activity in the latest quarter was narrower than the previous-year quarter. The company's adjusted net income per unit for the quarter increased from last year.

For the second quarter, the Denver, Colorado-based company said that net loss allocable to limited partners narrowed to $44.8 million, or $1.41 per unit, from $160.0 million, or $5.67 per unit, in the same period last year. Net loss attributable to partners narrowed to $42.1 million from $153.1 million a year ago.

Adjusted net income allocable to limited partners for the quarter increased to $8.7 million, or $0.31 per unit, from $8.0 million, or $0.28 per unit, in the previous-year period. Adjusted net income attributable to partners declined to $12.1 million from $17.2 million in the prior year period.

On average, eight analysts polled by Thomson Reuters expected the company to earn $0.19 per unit for the quarter. Analysts' estimates typically exclude special items.

On a consolidated basis, total operating revenues for the quarter dropped 56% to $152.0 million from $344.3 million in the corresponding period last year. Reported revenues for the year-ago period were $145.9 million. Analysts had a consensus revenue estimate for the quarter of $268.89 million.

Of the total operating revenues, sales of natural gas, propane, NGLs and condensate for the latest quarter dropped 66% to $173.7 million from $510.8 million in the same period last year.

For the latest quarter, derivative activity and total revenues included a non-cash loss of approximately $54 million and current period hedge settlements received of $8 million, respectively. This compares to non-cash loss of $170 million and hedge settlement payments of $17 million for the year-ago quarter.
Total operating costs and expenses for the quarter were $188.8 million, down from $485.0 million a year ago. Purchases of natural gas, propane and NGLs for the quarter declined to $148.3 million from $446.4 million in the year-ago period.

Operating loss for the quarter narrowed to $36.8 million from $140.7 million in the previous-year quarter.

On a segmental basis, natural gas services' adjusted EBITDA for the quarter declined to $34.5 million, from $38.5 million in the same period last year, as lower commodity prices as well as lower processing margins and gas throughput volumes more than offset the addition of the company's Michigan system, reduced operating costs and favorable cash settlements from commodity derivatives.

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