Atlas pipelinehos1[1]

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Atlas pipelinehos1[1]

  1. 1. FORM S−1Atlas Pipeline Holdings, L.P. − AHDFiled: January 12, 2006 (period: )General form of registration statement: Initial statement
  2. 2. Table of ContentsPART IINFORMATION REQUIRED IN PROSPECTUSSUMMARYRISK FACTORSUSE OF PROCEEDSCAPITALIZATIONMANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONSBUSINESSPropertiesMANAGEMENTSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ANDMANAGEMENTCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSUNDERWRITINGEXPERTSINDEX TO FINANCIAL STATEMENTSRelated Party TransactionsRelated Party TransactionsPART IIItem 13. Other Expenses of Issuance and Distribution.Item 14. Indemnification of Officers and Members of Our Board of Directors.Item 15. Exhibits.Item 16. Undertakings.SIGNATURESEX−23.1 (EXHIBIT 23.1)EX−23.2 (EXHIBIT 23.2)
  3. 3. Click Here for Contents As filed with the Securities and Exchange Commission on January 12, 2006 Registration No. 333− UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S−1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Atlas Pipeline Holdings, L.P. (Exact Name of Registrant as Specified in Its Charter) Delaware 1311 Applied For (State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Incorporation or Organization) Classification Code Number) Identification Number) Edward E. Cohen 311 Rouser Road Moon Township, PA 15108 (412) 262−2830 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrants Principal Executive Offices) Edward E. Cohen 311 Rouser Road Moon Township, PA 15108 (412) 262−2830 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Copies to: Alan P. Baden Joshua Davidson Vinson & Elkins L.L.P. Baker Botts L.L.P. 666 Fifth Avenue 910 Louisiana Street New York, New York 10103 Houston, Texas 77002 (212) 237−0000 (713) 229−1234 Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933,check the following box. If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list theSecurities Act registration statement number of the earlier effective registration statement for the same offering. If this form is a post−effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Actregistration statement number of the earlier effective registration statement for the same offering. If this form is a post−effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Actregistration statement number of the earlier effective registration statement for the same offering. If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. CALCULATION OF REGISTRATION FEE Title Of Each Class Of Proposed Maximum Aggregate Amount of Securities To Be Registered Offering Price (1)(2) Registration FeeCommon units representing limited partner interests $ 103,500,000 $ 11,074.50(1) Includes common units issuable upon exercise of the underwritersoptionto acquire additional common units.(2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o). The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrantshall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a)of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, actingSource: Atlas Pipeline Holdi, S−1, January 12, 2006
  4. 4. pursuant to said Section 8(a), may determine.Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  5. 5. Back to ContentsThe information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and ExchangeCommission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is notpermitted. Subject to Completion, dated January 12, 2006PROSPECTUS ATLAS PIPELINE HOLDINGS, L.P. 3,600,000 Common Units Representing Limited Partner InterestsThis is the initial public offering of our common units. We own a 2.0% general partner interest, all the incentive distribution rights and an approximate 12.8%limited partner interest in Atlas Pipeline Partners, L.P., a midstream energy services provider engaged in the transmission, gathering and processing of naturalgas.Before this offering, there has been no public market for our common units. We intend to apply to list the common units on the New York Stock Exchange underthe symbol “ .” We expect the initial public offering price to be between $ and $ per unit.We will use substantially all of the net proceeds from this offering to make a cash distribution to our existing unitholders. Please read “Use of Proceeds.”Investing in our common units involves risks. Please read “Risk factors” beginning on page 22.These risks include the following: • Our only cash generating assets are our interests in Atlas Pipeline Partners, L.P., and our cash flow is therefore completely dependent upon the ability of Atlas Pipeline Partners, L.P. to make distributions to its partners. • You will experience immediate and substantial dilution of $24.63 per common unit in the pro forma net tangible book value of your common units. • If we or Atlas Pipeline Partners, L.P. were treated as a corporation for federal income tax purposes, or if we or Atlas were to become subject to entity−level taxation for federal or state income tax purposes, then our cash available for distribution to you would be substantially reduced. • Our unitholders do not elect our general partner or vote on our general partner’s officers or directors, and the rights of unitholders owning 20% or more of our units are further restricted under our partnership agreement. Following the completion of this offering, Atlas America, Inc. will own approximately 82.9% of our common units, a sufficient number to prevent removal of our general partner without its consent. • The fiduciary duties of our general partner’s officers and directors may conflict with those of Atlas Pipeline Partners GP, LLC, which is the general partner of Atlas Pipeline Partners, L.P. • You may be required to pay taxes on income from us even if you do not receive any cash distributions from us. Per Common Unit Total Initial public offering price (1) $ $ Underwriting discount $ $ Proceeds to us, before expenses $ $(1) Excludes structuring fee payable to Lehman Brothers Inc. of .We have granted the underwriters a 30−day option to purchase up to an additional 540,000 common units from us on the same terms and conditions as set forthabove if the underwriters sell more than 3,600,000 common units in this offering.Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon theadequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.Lehman Brothers, on behalf of the underwriters, expects to deliver the common units on or about , 2006.Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  6. 6. LEHMAN BROTHERS , 2006Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  7. 7. We own and control Atlas Pipeline Partners GP, LLC, the general partner of Atlas Pipeline Partners, L.P. (NYSE: APL), through which we own certain generalpartner interests, all the incentive distribution rights and 1,641,026 common units of Atlas Pipeline Partners, L.P., representing an approximate 12.8% limitedpartner interest. We do not have any other assets. The map below identifies Atlas Pipeline Partners, L.P.’s operations and their location.Atlas Pipeline Partners, L.P. OperationsSource: Atlas Pipeline Holdi, S−1, January 12, 2006
  8. 8. Back to Contents TABLE OF CONTENTS SUMMARY 1 Atlas Pipeline Holdings, L.P. 1 The Offering 6 Atlas Pipeline Partners, L.P. 8 Atlas’ Principal Executive Offices and Internet Address 10 Comparison of Rights of Holders of Our Common Units and Atlas’ Common Units 11 Summary of Risk Factors 13 Summary of Conflicts of Interest and Fiduciary Responsibilities 15 Summary Historical Consolidated and Pro Forma Financial Data 16 RISK FACTORS 22 Risks Inherent in an Investment in Us 22 Risks Related to Conflicts of Interest 31 Risks Relating to Atlas’ Business 34 Tax Risks to Common Unitholders 42 USE OF PROCEEDS 45 CAPITALIZATION 46 DILUTION 47 CASH DISTRIBUTION POLICY AND RESTRICTIONS ON DISTRIBUTIONS 48 General 48 Our Initial Distribution Rate 50 Estimated Cash Available for Distributions 56 Assumptions and Considerations 59 Our Sources of Distributable Cash 61 SELECTED HISTORICAL AND OPERATING DATA 64 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 68 Overview 68 Atlas Pipeline Partners, L.P. 69 Overview of Atlas’ Operations 69 Significant Acquisitions 70 Contractual Revenue Agreements 70 Results of Our Operations 71 Liquidity and Capital Resources 74 Atlas Partnership Distributions 76 Contractual Obligations and Commercial Commitments 77 Atlas’ Equity Offerings 77 Atlas’ Shelf Registration Statement 78 Atlas’ Credit Facility 78 NOARK Notes 79 Significant Announced Internal Growth Project 79 Environmental Regulation 79 Inflation and Changes in Prices 80 Critical Accounting Policies and Estimates 80 Quantitative and Qualitative Disclosures About Market Risk 84 BUSINESS 87 Atlas Pipeline Holdings, L.P. 87 Atlas Pipeline Partners, L.P. 90 Overview 90 Recent Acquisitions 91 Business Strategy 92 Competitive Strengths 93 The Midstream Natural Gas Gathering, Processing and Transmission Industry 94 Mid−Continent Operations 95 Appalachian Basin Operations 99 Relationship with Atlas America 100 Competition 103 Contracts and Customer Relationships 104 Regulation 104 Environmental Matters 106 Employees 109 Properties 109 Legal Proceedings 110 MANAGEMENT 111 Atlas Pipeline Holdings, L.P. 111 Board Committees 112 Election of Our Directors 113 Governance Matters 113 Compensation of Directors 114 Atlas Pipeline Holdings Long−Term Incentive Plan 114 Compensation Committee Interlocks and Insider Participation 115 Atlas Pipeline Partners, L.P. 116 Executive Officer Compensation 117 Long−Term Incentive Plan 118 Compensation of Managing Board Members 118 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 119 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 120Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  9. 9. Our Relationship with Atlas Pipeline Partners, L.P. 120 The Contribution Agreement 120 Registration Rights 120 iSource: Atlas Pipeline Holdi, S−1, January 12, 2006
  10. 10. Back to Contents Indemnification of Directors and Officers 120 Related Party Transactions Involving Atlas 121 CONFLICTS OF INTEREST AND FIDUCIARY DUTIES 122 Conflicts of Interest 122 Fiduciary Duties 124 DESCRIPTION OF THE COMMON UNITS 127 The Units 127 Transfer Agent and Registrar 127 Transfer of Common Units 127 THE PARTNERSHIP AGREEMENT OF ATLAS PIPELINE HOLDINGS, L.P. 129 Organization and Duration 129 Purpose 129 Power of Attorney 129 Capital Contributions 129 Limited Liability 129 Voting Rights 130 Issuance of Additional Securities 131 Amendments to Our Partnership Agreement 131 Prohibited Amendments 132 No Unitholder Approval 132 Opinion of Counsel and Unitholder Approval 133 Merger, Sale or Other Disposition of Assets 133 Termination or Dissolution 133 Liquidation and Distribution of Proceeds 134 Withdrawal or Removal of Our General Partner 134 Transfer of General Partner Interest 135 Transfer of Ownership Interests in Our General Partner 135 Change of Management Provisions 135 Limited Call Right 135 Meetings; Voting 136 Status as Limited Partner 136 Non−Citizen Assignees; Redemption 136 Indemnification 137 Reimbursement of Expenses 137 Books and Reports 137 Right to Inspect Our Books and Records 138 Registration Rights 138 THE PARTNERSHIP AGREEMENT OF ATLAS PIPELINE PARTNERS, L.P. 139 Organization and Duration 139 Purpose 139 The Units 139 Limited Voting Rights 139 Cash Distribution Policy 139 Power of Attorney 143 Capital Contributions 144 Limited Liability 144 Transfer Agent and Registrar 144 Transfer of Common Units 145 Issuance of Additional Securities 146 Amendment of Atlas’ Partnership Agreement 146 Merger, Sale or Other Disposition of Assets of Atlas 148 Termination and Dissolution 148 Liquidation and Distribution of Proceeds 148 Withdrawal or Removal of Atlas’ General Partner 148 Transfer of General Partner Interest And Incentive Distribution Rights 150 Change of Management Provisions 150 Limited Call Right 150 Meetings; Voting 150 Status as Limited Partner or Assignee 151 Non−Citizen Assignees; Redemption 151 Indemnification 151 Books and Reports 152 Right to Inspect Our Books and Records 152 Registration Rights 153 UNITS ELIGIBLE FOR FUTURE SALE 154 MATERIAL TAX CONSEQUENCES 155 Partnership Status 155 Limited Partner Status 156 Tax Consequences of Unit Ownership 157 Tax Treatment of Operations 162 Disposition of Common Units 163 Uniformity of Units 165 Tax−Exempt Organizations and Other Investors 166 Administrative Matters 166 State, Local, Foreign and Other Tax Considerations 168 INVESTMENT IN ATLAS PIPELINE HOLDINGS, L.P. BY EMPLOYEE BENEFIT PLANS 170 UNDERWRITING 171 Commissions and Expenses 171Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  11. 11. Option to Purchase Additional Common Units 171 Lock−Up Agreements 172 Offering Price Determination 172 Indemnification 172 Directed Unit Program 172Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  12. 12. Back to Contents Stabilization, Short Positions and Penalty Bids 173 Electronic Distribution 173 NYSE 174 Discretionary Sales 174 Stamp Taxes 174 Relationships 174 VALIDITY OF THE COMMON UNITS 175 EXPERTS 175 WHERE YOU CAN FIND MORE INFORMATION 175 FORWARD−LOOKING STATEMENTS 175 INDEX TO FINANCIAL STATEMENTS F−1 APPENDIX A — AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF ATLAS PIPELINE HOLDINGS, L.P. A−1Until , 2006 (the 25th day after the date of this prospectus), all dealers that effect transactions in the securities, whether or not participating in thisoffering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and withrespect to their unsold allotments or subscriptions.You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide youwith different information from that contained in this prospectus. If anyone provides you with different or inconsistent information, you should not relyon it. We are not, and the underwriters are not, offering to sell our common units or seeking offers to buy our common units in any jurisdiction whereoffers or sales are not permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time ofdelivery of this prospectus or any sale of the common units offered hereby. iiiSource: Atlas Pipeline Holdi, S−1, January 12, 2006
  13. 13. Back to Contents SUMMARYThis summary may not contain all of the information that is important to you. You should read this entire prospectus carefully, including the historicalconsolidated financial statements and pro forma financial statements and the notes to those financial statements. Furthermore, you should carefully read“Summary of Risk Factors” and “Risk Factors” for more information about important risks that you should consider before making a decision to purchase ourcommon units.Except as otherwise indicated, the information presented in this prospectus assumes (1) an initial public offering price of $24.00 per common unit and (2) thatthe underwriters do not exercise their option to purchase additional common units. All references in this prospectus to “we,” “our,” “us” or like terms refer toAtlas Pipeline Holdings, L.P., and unless the context requires otherwise, to Atlas Pipeline Partners GP, LLC, the general partner of Atlas Pipeline Partners, L.P.All references in this prospectus to “Atlas Pipeline GP” refer to Atlas Pipeline Partners GP, LLC. All references in this prospectus to “Atlas” refer to AtlasPipeline Partners, L.P. and its wholly−owned subsidiaries. All references in this prospectus to “Atlas America” refer to Atlas America, Inc. and itswholly−owned subsidiaries, excluding Atlas Pipeline Holdings, L.P. and any of its wholly−owned subsidiaries. All references to our “partnership agreement”refer to the Amended and Restated Agreement of Limited Partnership of Atlas Pipeline Holdings, L.P. to be adopted contemporaneously with the closing of thisoffering. Atlas Pipeline Holdings, L.P.Our cash generating assets consist of our interests in Atlas Pipeline Partners, L.P. (NYSE: APL), a publicly traded Delaware limited partnership. Atlas is amidstream energy service provider engaged in the transmission, gathering and processing of natural gas in the Mid−Continent and Appalachian regions. Ourinterests in Atlas will initially consist of a 100% ownership interest in the general partner of Atlas, Atlas Pipeline Partners GP, LLC, which owns: • a 2.0% general partner interest in Atlas, which entitles it to receive 2.0% of the cash distributed by Atlas; • all of the incentive distribution rights in Atlas, which entitle it to receive increasing percentages, up to a maximum of 48.0%, of any cash distributed by Atlas as it reaches certain target distribution levels in excess of $0.42 per Atlas unit in any quarter; and • 1,641,026 common units of Atlas, representing an approximate 12.8% limited partner interest in Atlas.At Atlas’ current quarterly distribution rate of $0.83 per common unit, aggregate quarterly cash distributions to us on all our interests in Atlas would beapproximately $5.0 million. Based on this distribution, we expect that our initial quarterly distribution will be $0.225 per unit, or $0.90 per unit on an annualizedbasis.Our primary objective is to increase our cash distributions to our unitholders through growth at Atlas. Atlas has grown both through strategic acquisitions andinternal growth projects. Since Atlas’ initial public offering in January 2000, it has completed five acquisitions at an aggregate cost of approximately $516.7million. Atlas’ business strategy is to create capital−efficient growth in distributable cash flow to maximize its distribution to its unitholders by, among otherthings, (1) maximizing cash flows from its existing businesses through marketing of its services and facilities and controlling its operating costs; (2) continuing toincrease the amount of its operating cash flow generated by long−term, fee−based contracts; (3) expanding its existing businesses through internal growthopportunities; (4) expanding its operations through strategic acquisitions; and (5) maintaining a flexible capital structure based on a strong balance sheet byfinancing its growth through a balanced combination of debt and equity. 1Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  14. 14. Back to ContentsWe intend to support Atlas in implementing its business strategy by assisting it in identifying, evaluating, and pursuing growth opportunities. In the future, wemay also support the growth of Atlas through the use of our capital resources, which could involve loans or capital contributions to Atlas to provide funding forthe acquisition of a business or asset or for an internal growth project. We may also provide Atlas with other forms of credit support, such as guarantees related tofinancing a project or other types of support related to a merger or acquisition transaction.Atlas is required by its partnership agreement to distribute all of its cash on hand at the end of each quarter, less reserves established by its general partner in itssole discretion to provide for the proper conduct of Atlas’ business or to provide for future distributions. Since January 1, 2003, Atlas has increased the per unitquarterly cash distribution on its common units by approximately 48%, from the quarterly distribution of $0.56 per unit to $0.83 per unit declared for the fourthquarter of 2005. The following graph shows, for the period from the first quarter of 2003 through the fourth quarter of 2005: (i) Atlas’ quarterly distributions perunit and (ii) total distributions by Atlas to us.While we, like Atlas, are structured as a limited partnership, our capital structure and cash distribution policy differ materially from those of Atlas. Most notably,our general partner does not have an economic interest in us and is not entitled to receive any distributions from us, and our capital structure does not includeincentive distribution rights. Therefore, all of our distributions are made on our common units, which is our only class of security outstanding.Our ownership of Atlas’ incentive distribution rights entitles us to receive an increasing percentage of cash distributed by Atlas as it reaches certain targetdistribution levels. The rights entitle us to receive the following: • 13.0% of all cash distributed in a quarter after each Atlas unit has received $0.42 for that quarter; • 23.0% of all cash distributed after each Atlas unit has received $0.52 for that quarter; and • 48.0% of all cash distributed after each Atlas unit has received $0.60 for that quarter.For the quarter ended December 31, 2005, Atlas declared a distribution of $0.83 per unit, which means we will receive 48.0% of the $0.23 incremental cashdistribution per unit in excess of the 2Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  15. 15. Back to Contentsmaximum target distribution level of $0.60 per unit. Because the incentive distribution rights currently participate at the maximum 48.0% target cash distributionlevel, future growth in distributions we receive from Atlas will not result from an increase in the target cash distribution level associated with the incentivedistribution rights.The graph set forth below demonstrates hypothetical cash distributions payable in respect of our interests in Atlas by showing the total cash allocated to us acrossan illustrative range of annualized cash distributions per unit made by Atlas. The graph illustrates the impact to us of Atlas’ raising or lowering its distributionfrom the most recently declared distribution of $0.83 per common unit ($3.32 on an annualized basis), which will be paid on February 14, 2006. This informationassumes: • Atlas has 12,549,266 total units outstanding, representing the number of units outstanding at December 31, 2005; and • through Atlas Pipeline GP, we own (i) 1,641,026 Atlas common units, representing an approximate 12.8% limited partner interest in Atlas, (ii) a 2.0% general partner interest in Atlas and (iii) all the incentive distribution rights in Atlas.This information is presented for illustrative purposes only and is not intended to be a prediction of future performance and does not attempt to illustrate theimpact of changes in our or Atlas’ business, including changes that may result from changes in natural gas, NGL and condensate prices, changes in economicconditions, the impact of any future acquisitions or expansion projects or the issuance of additional units by Atlas. In addition, the level of cash distributions wereceive may be affected by the various risks associated with an investment in us and the underlying business of Atlas. Please read “Risk Factors.”We intend to pay to our unitholders, on a quarterly basis, distributions equal to the cash we receive from Atlas, less certain reserves for expenses and other usesof cash, including: • our general and administrative expenses, including expenses we will incur as the result of being a public company; • capital contributions to maintain or increase our ownership interest in Atlas; and • reserves our general partner believes prudent to maintain for the proper conduct of our business or to provide for future distributions. 3Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  16. 16. Back to ContentsBased on Atlas’ current quarterly distribution, the number of our units outstanding and our expected level of expenses and reserves that our general partnerbelieves prudent to maintain, we expect that our initial quarterly distribution will be $0.225 per common unit, or $0.90 per unit on an annualized basis. Due toour ownership of Atlas’ incentive distribution rights, our cash flows are impacted by changes in Atlas’ distributions to a greater extent than those of Atlas’common unitholders.If Atlas is successful in implementing its business strategy and increasing distributions to its unitholders, we would generally expect to increase distributions toour unitholders, although the timing and amount of any such increased distributions will not necessarily be comparable to the increased Atlas distributions.However, we cannot assure you that any distributions will be declared or paid. Please read “Cash Distribution Policy and Restrictions on Distributions.” Executive OfficesOur principal executive offices are located at 311 Rouser Road, Moon Township, Pennsylvania 15108, and our phone number is (412) 262−2830. Our website islocated at www.atlaspipelineholdings.com. Information on our website is not incorporated by reference into this prospectus and does not constitute a part of thisprospectus. Our Limited Partnership Structure and ManagementWe were formed in December 2005, as a Delaware limited partnership. The chart on the following page depicts our organization and ownership upon completionof this offering, at which time: • our general partner will own a non−economic general partner interest in us; • our public unitholders will own 3,600,000 of our common units, representing an approximate 17.1% limited partner interest in us; • our current owner, Atlas America, will own 17,500,000 of our common units, representing an approximate 82.9% limited partner interest in us; and • we will continue to own indirectly, through our ownership of Atlas Pipeline Partners GP, LLC, 1,641,026 Atlas common units representing an approximate 12.8% limited partner interest in Atlas, the 2.0% general partner interest in Atlas and all the incentive distribution rights in Atlas.Our general partner, Atlas Pipeline Holdings GP, LLC, will manage our operations and activities, including, among other things, establishing the quarterly cashdistribution levels for our common units and reserves it believes prudent to maintain for the proper conduct of our business or to provide for future distributions.Our general partner is entitled to reimbursement for out−of−pocket expenses it incurs on our behalf, but it is not entitled to any other compensation, fees, profitsor other benefits for acting in its capacity as our general partner. All of our executive officers and a majority of the directors of our general partner also serve asexecutive officers and directors of the general partner of Atlas. Atlas America will own all the membership interests in our general partner. 4Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  17. 17. Back to Contents Atlas Pipeline Holdings, L.P.’s Ownership and Organizational Chart After This Offering Aggregate ownership of Atlas Pipeline Holdings, L.P. after this offering: Common Units: Public Unitholders 17.1% Atlas America, Inc. 82.9% Total 100.0% 5Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  18. 18. Back to Contents The OfferingCommon units offered to the public 3,600,000 common units. 4,140,000 common units, if the underwriters exercise their option to purchase additional common units in full.Common units outstanding after this offering 21,100,000 common units.Use of proceeds We expect to receive net proceeds of approximately $79.2 million from the sale of the common units, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Substantially all of the net proceeds from this offering will be distributed to Atlas America. The net proceeds from any exercise of the underwriters’ option to purchase additional common units will be used to fund the redemption of an equal number of common units from Atlas America. Please read “Use of Proceeds.”Cash distributions We expect to make an initial quarterly distribution of $0.225 per common unit to the extent we have sufficient cash from operations after establishment of cash reserves and payment of fees and expenses. Please read “Cash Distribution Policy and Restrictions on Distributions.” We do not have any subordinated units and our general partner is not entitled to any distributions. Please read “Description of the Common Units” and “The Partnership Agreement of Atlas Pipeline Holdings, L.P.” We expect to pay you a prorated distribution for the first quarter during which we are a publicly traded partnership. Assuming that we become a publicly traded partnership before March 31, 2006, we will pay you a prorated distribution for the period from the first day our common units are publicly traded to and including March 31, 2006. We expect to pay this cash distribution in May 2006. The amount of pro forma available cash generated during the twelve months ended December 31, 2004 and the twelve months ended September 30, 2005 would have been insufficient by approximately $21.4 million and $10.0 million, respectively, to pay the full initial distribution amount on all our common units during those periods. Please read “Cash Distribution Policy and Restrictions on Distributions.” We believe that we will have sufficient cash available for distribution to pay the distributions at the initial distribution rate of $0.225 per unit on all the outstanding common units for each quarter for the year ending December 31, 2006. See “Cash Distribution Policy and Restrictions on Distributions—Assumptions and Considerations” for the specific assumptions underlying this belief. 6Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  19. 19. Back to ContentsLimited voting rights Our general partner will manage and operate us. Unlike the holders of common stock in a corporation, you will have only limited voting rights on matters affecting our business. You will have no right to elect our general partner or its directors. Our general partner may not be removed except by a vote of the holders of at least 66 2/3% of the outstanding units, including any units owned by our affiliates, voting together as a single class. Atlas America will own an aggregate of approximately 82.9% of our common units. This will give Atlas America the ability to prevent our general partner’s involuntary removal. Please read “The Partnership Agreement of Atlas Pipeline Holdings, L.P.—Withdrawal or Removal of Our General Partner.”Limited call right If at any time our affiliates own more than 87.5% of our outstanding common units, our general partner has the right, but not the obligation, to purchase all of the remaining common units at a price not less than the then current market price of the common units. At the completion of this offering, Atlas America will own approximately 82.9% of our common units.Estimated ratio of taxable income We estimate that if you own the common units you purchase in this offering through the record to distributions date for distributions for the period ending , you will be allocated, on a cumulative basis, an amount of federal taxable income for that period that will be less than % of the cash distributed to you with respect to that cumulative period. For example, if you receive an annual distribution of $0.90 per unit, we estimate that your average allocable federal taxable income per year will be no more than $ per unit. This estimate is based on assumptions with respect to our operations, gross income, capital expenditures, cash flow and anticipated distributions. Our ratio of taxable income to cash distributions will be much greater than the ratio applicable to the holders of common units in Atlas because remedial allocations of deductions to us from Atlas will be very limited and our ownership of incentive distribution rights will cause more taxable income to be allocated to us from Atlas. Further, if Atlas is successful in increasing its distributions over time, our ratio of taxable income to cash distributions will increase. For the basis of this estimate, please read “Material Tax Consequences—Tax Consequences of Unit Ownership—Ratio of Taxable Income to Distributions.”Exchange listing We will apply to list the common units on the New York Stock Exchange under the symbol “ .” 7Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  20. 20. Back to Contents Atlas Pipeline Partners, L.P.Atlas is a publicly−traded midstream energy services provider engaged in the transmission, gathering and processing of natural gas. Atlas conducts its businessthrough two operating segments: its Mid−Continent operations and its Appalachian operations.Through its Mid−Continent operations, Atlas owns and operates: • a 75% interest in a FERC−regulated, 565−mile interstate pipeline system, which we refer to as Ozark Gas Transmission, that extends from southeastern Oklahoma through Arkansas and into southeastern Missouri and which has throughput capacity of approximately 322 MMcf/d; • two natural gas processing plants with aggregate capacity of approximately 230 MMcf/d and one treating facility with a capacity of approximately 200 MMcf/d, all located in Oklahoma; and • 1,765 miles of active natural gas gathering systems located in Oklahoma, Arkansas, northern Texas and the Texas panhandle, which transport gas from wells and central delivery points in the Mid−Continent region to Atlas’ natural gas processing plants or Ozark Gas Transmission.Through its Appalachian operations, Atlas owns and operates 1,500 miles of active natural gas gathering systems located in eastern Ohio, western New York andwestern Pennsylvania. Through an omnibus agreement and other agreements between Atlas and Atlas America, the parent of Atlas’ general partner and ourgeneral partner and a leading sponsor of natural gas drilling investment partnerships in the Appalachian Basin, Atlas gathers substantially all of the natural gasfor its Appalachian Basin operations from wells operated by Atlas America. Among other things, the omnibus agreement requires Atlas America to connect wellsit operates to Atlas’ gathering systems that are located within 2,500 feet of Atlas’ gathering systems. Atlas is also party to natural gas gathering agreements withAtlas America under which Atlas receives gathering fees generally equal to a percentage, typically 16%, of the selling price of the natural gas it transports. Theseagreements are continuing obligations and have no specified term except that they will terminate if Atlas’ general partner is removed without cause.Since Atlas’ initial public offering in January 2000, Atlas has completed five acquisitions at an aggregate cost of approximately $516.7 million, including, mostrecently, the October 2005 acquisition of Atlas Arkansas Pipeline LLC, which we refer to as Atlas Arkansas and which owns a 75% interest in NOARK PipelineSystem, Limited Partnership, which we refer to as NOARK, and the April 2005 acquisition of ETC Oklahoma Pipeline, Ltd, which we refer to as Elk City.Both Atlas’ Mid−Continent and Appalachian operations are located in areas of abundant and long−lived natural gas production and significant new drillingactivity. The Ozark Gas Transmission system and Atlas’ gathering systems are connected to approximately 6,250 central delivery points or wells, giving Atlassignificant scale in its service areas. Atlas provides gathering and processing services to the wells connected to its systems, primarily under long−term contracts.Atlas provides fee−based, FERC−regulated transmission services through Ozark Gas Transmission under both long−term and short−term contractualarrangements. Atlas intends to increase the portion of the transmission services provided under long−term contracts. As a result of the location and capacity ofthe Ozark Gas Transmission system and Atlas’ gathering and processing assets, Atlas believes it is strategically positioned to capitalize on the significantincrease in drilling activity in its service areas and the positive price differential across Ozark Gas Transmission, also known as basis spread. Atlas intends tocontinue to expand its business through strategic acquisitions and internal growth projects, including its plan to construct the Sweetwater gas plant, that increasedistributable cash flow per unit.On October 31, 2005, Atlas acquired from Enogex, Inc., a wholly−owned subsidiary of OGE Energy Corp. (NYSE: OGE), which we refer to as Enogex, all ofthe outstanding equity of Atlas Arkansas for $165.3 million, including estimated related transaction costs, plus $10.2 million for working capital adjustments.Atlas Arkansas owns a 75% interest in NOARK, with the remaining 25% 8Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  21. 21. Back to Contentsinterest being owned by Southwestern Energy Pipeline Company, which we refer to as Southwestern, a wholly−owned subsidiary of Southwestern EnergyCompany (NYSE: SWN). The NOARK acquisition further expands Atlas’ activities in the Mid−Continent region and provides an additional source of fee−basedcash flows from a FERC−regulated interstate pipeline system and an intrastate gas gathering system. NOARK’s geographic position relative to Atlas’ otherbusinesses and interconnections with major interstate pipelines also provides it with internal growth opportunities. NOARK’s principal assets include: • The Ozark Gas Transmission system, a 565−mile FERC−regulated interstate pipeline system which extends from southeast Oklahoma through Arkansas and into southeast Missouri and has a throughput capacity of approximately 322 MMcf/d. The system includes approximately 30 supply and delivery interconnections and two compressor stations. • A 365−mile intrastate natural gas gathering system, which we refer to as Ozark Gas Gathering, located in eastern Oklahoma and western Arkansas, and 11 associated compressor stations.Ozark Gas Transmission transports natural gas from receipt points in eastern Oklahoma and western Arkansas to interstate pipelines in northeastern and centralArkansas and to local distribution companies in Arkansas and Missouri. Ozark Gas Gathering gathers natural gas supplies in eastern Oklahoma and westernArkansas which are then transported through Ozark Gas Transmission. Ozark Gas Transmission’s revenue is comprised of FERC−regulated transmission feesthat are based on firm transportation rates and, to the extent capacity is available following the reservation of firm system capacity, interruptible transportationrates. The Ozark transmission and gathering systems gathered and transported an average of 163.9 MMcf/d during the nine months ended September 30, 2005,and 207.2 MMcf/d during October 2005.The NOARK acquisition increases Atlas’ size and presence in the Mid−Continent region, including extending its operations east into the Arkoma Basin wherethe Fayetteville Shale Play is located. The Mid−Continent region, one of the most prolific natural gas−producing regions in North America, has recentlyexperienced a significant increase in oil and gas drilling activity driven by long−term projections of continued growth in U.S. natural gas demand and theapplication of new drilling and production technologies. Atlas believes that the increased drilling activity in the Mid−Continent area, combined with the positivebasis spread across Ozark Gas Transmission, will result in increasing volumes gathered and transported on the Ozark Gas Gathering and Ozark Gas Transmissionsystems.Atlas recently completed three new gathering and compression projects in Elk City which have increased, and we believe will continue to increase, gatheredvolumes and total gross margin. Atlas also plans to complete construction of a new natural gas processing facility in Oklahoma near its Prentiss treating facilityin the third quarter of 2006, which we refer to as the Sweetwater gas plant. The new plant will be scaled to 120 MMcf/d of processing capacity. Along with theSweetwater gas plant, Atlas will construct a gathering system to be located primarily in western Oklahoma and in the Texas panhandle, more specifically,Beckham and Roger Mills counties in Oklahoma and Hemphill County, Texas. Atlas is currently gathering approximately 30 MMcf/d of natural gas in the ElkCity area for which it earns gathering fees but does not earn processing fees due to the fact that the Elk City plant is currently processing at maximum capacityand is unable to process those volumes. As Atlas completes construction of the Sweetwater gas plant and gathering system, it expects to increase the volumes itgathers in the Elk City area and to process those volumes at the Sweetwater gas plant, thereby enabling it to earn incremental gathering and processing fees. Atlasanticipates that construction of the Sweetwater gas plant and associated gathering system will cost approximately $40.0 million and will generate cash flow of$8.0 million to $10.0 million annually. 9Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  22. 22. Back to ContentsAtlas’ Principal Executive Offices and Internet AddressAtlas’ principal executive offices are located at 311 Rouser Road, Moon Township, Pennsylvania 15108, and its phone number is (412) 262−2830. Atlasmaintains a website at www.atlaspipelinepartners.com that provides information about its business and operations. Information contained on this website,however, is not incorporated into or otherwise a part of this prospectus. Atlas also files annual, quarterly and current reports and other information with theSecurities and Exchange Commission, or Commission. Atlas’ Commission filings are available to the public at the Commission’s website at www.sec.gov. Youmay also read and copy any document Atlas files at the Commission’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You may obtaininformation on the operation of the Commission’s public reference room by calling the Commission at 1−800−SEC−0330. 10Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  23. 23. Back to Contents Comparison of Rights of Holders of Our Common Units and Atlas’ Common UnitsOur common units and Atlas’ common units are unlikely to trade in simple relation or proportion to one another. Instead, while the trading prices of our commonunits and Atlas’ common units are likely to follow generally similar broad trends, the trading prices may diverge because, among other things: • with respect to its distributions, Atlas’ common unitholders have a priority over our incentive distribution rights in Atlas; • we participate in Atlas’ general partner’s distributions and the incentive distribution rights, and Atlas’ common unitholders do not; and • we may in the future enter into other businesses separate from Atlas.The following table compares certain features of Atlas’ common units and our common units. Atlas’ Common Units Our Common Units Distributions and Incentive Distribution Rights Atlas has historically made We intend to pay our quarterly distributions to its unitholders quarterly partners of its cash, less certain distributions equal to the cash reserves for expenses and other we receive from our Atlas uses of cash, including distributions, less certain reimbursement of expenses reserves for expenses and other owed to its general partner. For uses of cash. Our general a more detailed discussion, partner is not entitled to any please read “The Partnership distributions. Therefore, our Agreement of Atlas Pipeline distributions are allocated Partners, L.P.—Cash exclusively to our common Distribution Policy.” Atlas’ unitholders. general partner owns the incentive distribution rights in Atlas. Taxation of Entity and Entity Owners Atlas is a flow−through entity Similarly, we are a that is not subject to an flow−through entity that is not entity−level federal income tax. subject to an entity−level federal income tax. Atlas expects that holders of its We also expect that holders of common units will benefit for a our common units will benefit period of time from tax basis for a period of time from tax adjustments and remedial basis adjustments and remedial allocations of deductions. allocations of deductions as a result of our ownership of common units of Atlas. However, incentive distribution rights do not benefit from such adjustments and allocations. Therefore, we expect the ratio of our taxable income to the distributions you will receive to be higher than the ratio of taxable income to the distributions received by the common unitholders of Atlas. Moreover, if Atlas is successful in increasing its distributable cash flow over time, we expect the ratio of our taxable income to distributions will increase. 11Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  24. 24. Back to Contents Atlas’ Common Units Our Common Units Atlas’ common unitholders will Our common unitholders also receive Schedule K−1s from will receive Schedule K−1s Atlas reflecting the unitholders’ from us reflecting the share of Atlas’ items of income, unitholders’ share of our items gain, loss and deduction at the of income, gain, loss and end of each fiscal year. deduction at the end of each fiscal year. Sources of Cash Flow Atlas currently generates its Our only cash−generating cash flow from its natural gas assets consist of our interests in transmission, gathering and Atlas, and we currently have no processing operations. independent operations. Accordingly, our financial performance and our ability to pay cash distributions to our unitholders is currently completely dependent upon the performance of Atlas. Limitation on Issuance of Additional Units Atlas may issue an unlimited We also may issue an unlimited number of additional number of additional partnership interests and other partnership interests and other equity securities without equity securities without obtaining unitholder approval. obtaining unitholder approval. 12Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  25. 25. Back to Contents Summary of Risk FactorsAn investment in our common units involves risks associated with us and Atlas as well as tax characteristics associated with interests in publicly tradedpartnerships. You should consider carefully all the risk factors together with all of the other information included in this prospectus before you invest in our units.The risks related to an investment in us, conflicts of interest, Atlas’ business and tax consequences to our unitholders are described under the caption “RiskFactors.” These risks include, but are not limited to, those described below:Risks Inherent in An Investment in Us • Our only cash generating assets are our interests in Atlas and our cash flow is therefore completely dependent upon the ability of Atlas to make distributions to its partners. • Restrictions in Atlas’ credit facility and our proposed credit facility could limit our ability to make distributions to our unitholders. • In the future, we may not have sufficient cash to pay distributions at our estimated initial quarterly distribution level or to increase distributions. • We are largely dependent on Atlas for our growth. As a result of the fiduciary obligations of Atlas’ general partner, which is our wholly owned subsidiary, to the unitholders of Atlas, our ability to pursue business opportunities independently will be limited. • Our ability to sell our partnership interests in Atlas may be limited by securities laws restrictions and liquidity constraints. • The market price of our common units could be adversely affected by sales of substantial amounts of our common units in the public markets, including sales by our existing unitholders. • Our unitholders do not elect our general partner or vote on our general partner’s officers or directors, and the rights of our unitholders owning 20% or more of our units are further restricted under our partnership agreement. Following the completion of this offering, Atlas America will own approximately 82.9% of our units, a sufficient number to block any attempt to remove our general partner. • Atlas may issue additional common units, which may increase the risk of it not having sufficient available cash to maintain or increase its per unit distribution level. • You will experience immediate and substantial dilution of $24.63 per common unit in the pro forma net tangible book value of your common units.Risks Related to Conflicts of Interest • Although we control Atlas through our ownership of its general partner, Atlas’ general partner owes fiduciary duties to Atlas and Atlas’ unitholders, which may conflict with our interests. • The fiduciary duties of our general partner’s officers and directors may conflict with those of Atlas’ general partner’s officers and directors. • Potential conflicts of interest may arise among our general partner, its affiliates and us. Our general partner and its affiliates have limited fiduciary duties to us and our unitholders, which may permit them to favor their own interests to the detriment of us and our unitholders. 13Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  26. 26. Back to ContentsRisks Related to Atlas’ Business • Atlas may be unsuccessful in integrating the operations from its recent acquisitions or any future acquisitions with its operations or in realizing all of the anticipated benefits of these acquisitions. • The amount of natural gas Atlas transports, treats or processes will decline over time unless Atlas is able to attract new wells to connect to its gathering systems. • The success of Atlas’ Appalachian operations depends upon Atlas America’s ability to drill and complete commercial producing wells. • The failure of Atlas America to perform its obligations under Atlas’ natural gas gathering agreements may adversely affect Atlas’ business. • The success of Atlas’ Mid−Continent operations depends upon its ability to continually find and contract for new sources of natural gas supply from unrelated third parties. • Atlas’ Mid−Continent operations currently depend on certain key producers for their supply of natural gas, and the loss of any of these key producers could reduce Atlas’ revenue. • The curtailment of operations at, or closure of, either of Atlas’ primary plants could harm its business.Tax Risks to Our Common Unitholders • If we or Atlas were treated as a corporation for federal income tax purposes, or if we or Atlas were to become subject to entity−level taxation for state tax purposes, then our cash available for distribution to you would be substantially reduced. • A successful IRS contest of the federal income tax positions we or Atlas take may adversely affect the market for our common units or Atlas’ units, and the costs of any contest will reduce cash available for distribution to our unitholders. 14Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  27. 27. Back to Contents Summary of Conflicts of Interest and Fiduciary ResponsibilitiesConflicts of interest exist and may arise in the future as a result of the relationships among us, Atlas and our and their respective general partners and affiliates.Our general partner is controlled by Atlas America. Accordingly, Atlas America has the ability to elect, remove and replace the directors and officers of ourgeneral partner. Similarly, through its indirect control of the general partner of Atlas, Atlas America has the ability to elect, remove and replace the directors andofficers of the general partner of Atlas.Our general partner and its directors and officers have fiduciary duties to manage our business in a manner beneficial to us and our partners. At the same time,Atlas’ general partner and its directors and officers have fiduciary duties to manage Atlas’ business in a manner beneficial to Atlas and its partners, including us.Certain of the executive officers and non−independent directors of our general partner also serve as executive officers and directors of the general partner ofAtlas. Consequently, these directors and officers may encounter situations in which their fiduciary obligations to Atlas, on the one hand, and us, on the otherhand, are in conflict.The board of directors of Atlas’ general partner or its conflicts committee will resolve any conflict between us and Atlas. The board of directors of our generalpartner or its conflicts committee will resolve any conflict between us and the owners of our general partner and their affiliates. The resolution of these conflictsmay not always be in our best interest or that of our unitholders. For a more detailed description of the conflicts of interest involving us and the resolution ofthese conflicts, please read “Conflicts of Interest and Fiduciary Duties.”Our partnership agreement limits the liability and reduces the fiduciary duties owed by our general partner to our unitholders. Our partnership agreement alsorestricts the remedies available to unitholders for actions that might otherwise constitute breaches of our general partner’s fiduciary duties owed to unitholders.By purchasing our units, you are treated as having consented to various actions contemplated in the partnership agreement and conflicts of interest that mightotherwise be considered a breach of fiduciary or other duties under applicable state law. Please read “Conflicts of Interest and Fiduciary Duties—FiduciaryDuties” for a description of the fiduciary duties imposed on our general partner by Delaware law, the material modifications of these duties contained in ourpartnership agreement and certain legal rights and remedies available to unitholders.If a business opportunity in respect of any business activity in which Atlas is currently engaged is presented to us, our general partner or Atlas or its generalpartner, then Atlas will have the first right to pursue such opportunity. Pursuant to an omnibus agreement to be entered into in connection with the closing of thisoffering, we will agree to certain business opportunity arrangements to address potential conflicts that may arise between us and Atlas. For more information,please read “Conflicts of Interest and Fiduciary Duties.”For a description of our other relationships with our affiliates, please read “Certain Relationships and Related Party Transactions.” 15Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  28. 28. Back to Contents Summary Historical Consolidated and Pro Forma Financial DataWe were formed in December 2005 and therefore do not have any historical financial statements. Since we will own and control Atlas Pipeline GP, the generalpartner of Atlas, the historical financial statements presented below are of Atlas Pipeline GP, on a consolidated basis, including Atlas.The historical financial data of Atlas Pipeline GP were derived from audited consolidated financial statements for each of the years ended December 31, 2002,2003 and 2004 and at December 31, 2003 and 2004, which have been audited by Grant Thornton LLP, an independent registered public accounting firm. Thefinancial data for the nine months ended and at September 30, 2004 and 2005 were derived from unaudited consolidated financial statements of Atlas PipelineGP.We have also included unaudited pro forma financial data that reflects historical results of Atlas Pipeline GP as adjusted on a pro forma basis to give effect toAtlas’ April 2004, July 2004, June 2005 and November 2005 offerings of common units, the issuance of Atlas’ $250 million of 8.125% senior unsecured notes,the completion of the NOARK acquisition and the acquisitions of Spectrum Field Services, Inc., which we refer to as Spectrum, and Elk City, and this offering.The summary unaudited pro forma balance sheet information reflects the following transactions as if they occurred as of September 30, 2005: • the NOARK acquisition, which occurred on October 31, 2005, for consideration of $165.3 million, including estimated transaction costs plus $10.2 million for working capital adjustments, and the redemption of the portion of the NOARK 7.15% notes severally guaranteed by Atlas Arkansas; • the amendment of Atlas’ credit facility, which occurred on October 31, 2005, and borrowings under it to finance the NOARK acquisition; • Atlas’ public offering of 2,700,000 common units, which was completed in November 2005, and 330,000 additional underwriter option units, which was completed in December 2005, each at a public offering price of $42.00 per common unit, the net proceeds of which were principally used to repay indebtedness under its credit facility incurred in connection with the NOARK acquisition; • Atlas’ issuance of $250.0 million of 8.125% senior unsecured notes in a private placement on December 20, 2005, the net proceeds of which were principally used to repay indebtedness under its credit facility; and • this offering and the application of the net proceeds as described under “Use of Proceeds.”The unaudited pro forma statement of income information for the year ended December 31, 2004 reflects the following transactions as if they occurred as ofJanuary 1, 2004: • Atlas’ public offering of 750,000 common units, which was completed in April 2004 at a public offering price of $36.00 per common unit, the net proceeds of which were used principally to repay indebtedness under Atlas’ then existing credit facility; • the Spectrum acquisition, which occurred in July 2004, for total consideration of $141.6 million, including the payment of income taxes due as a result of the transaction and other related transaction costs; • Atlas’ public offering of 2,100,000 common units, which was completed in July 2004 at a public offering price of $34.76 per common unit, the net proceeds of which were used principally to repay indebtedness incurred in connection with the Spectrum acquisition; • the Elk City acquisition, which occurred in April 2005, for total consideration of $196.0 million, including related transaction costs; 16Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  29. 29. Back to Contents • the closing of Atlas’ $270.0 million credit facility, which occurred in April 2005, and borrowings under it to finance the Elk City acquisition and repay amounts outstanding under Atlas’ previous credit facility; • Atlas’ public offering of 2,300,000 common units, which was completed in June 2005 at a public offering price of $41.95 per common unit, the net proceeds of which were used principally to repay indebtedness incurred in connection with the Elk City acquisition; • the NOARK acquisition, which occurred on October 31, 2005, for consideration of $165.3 million, including estimated transaction costs, plus $10.2 million for working capital adjustments, and the redemption of the portion of the NOARK 7.15% notes severally guaranteed by Atlas Arkansas; • the amendment of Atlas’ credit facility, which occurred on October 31, 2005, and borrowings under it to finance the NOARK acquisition; • Atlas’ public offering of 2,700,000 common units, which was completed in November 2005, and 330,000 additional underwriter option units, which was completed in December 2005, each at a public offering price of $42.00 per common unit, the net proceeds of which were principally used to repay indebtedness under its credit facility incurred in connection with the NOARK acquisition; • Atlas’ issuance of $250.0 million of 8.125% senior unsecured notes in a private placement on December 20, 2005, the net proceeds of which were principally used to repay indebtedness under its credit facility; and • this offering and the application of the net proceeds as described under “Use of Proceeds.”The unaudited pro forma statement of income information for the nine months ended September 30, 2005 reflects the following transactions as if they occurredas of January 1, 2005: • the Elk City acquisition, which occurred in April 2005, for total consideration of $196.0 million, including related transaction costs; • the closing of Atlas’ $270.0 million credit facility, which occurred in April 2005, and borrowings under it to finance the Elk City acquisition and repay amounts outstanding under Atlas’ previous credit facility; • Atlas’ public offering of 2,300,000 common units, which was completed in June 2005, at a public offering price of $41.95 per common unit, the net proceeds of which were principally used to repay indebtedness incurred in connection with the Elk City acquisition; • the NOARK acquisition, which occurred on October 31, 2005, for consideration of $165.3 million, including estimated transaction costs plus $10.2 million for working capital adjustments, and the redemption of the portion of the NOARK 7.15% notes severally guaranteed by Atlas Arkansas; • the amendment of Atlas’ credit facility, which occurred on October 31, 2005, and borrowings under it to finance the NOARK acquisition; • Atlas’ public offering of 2,700,000 common units, which was completed in November 2005, and 330,000 additional underwriter option units, which was completed in December 2005, each at a public offering price of $42.00 per common unit, the net proceeds of which were principally used to repay indebtedness under its credit facility incurred in connection with the NOARK acquisition; • Atlas’ issuance of $250.0 million of 8.125% senior unsecured notes in a private placement on December 20, 2005, the net proceeds of which were principally used to repay indebtedness under its credit facility; and 17Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  30. 30. Back to Contents • this offering and the application of the net proceeds as described under “Use of Proceeds.”Elk City’s historical fiscal year ended August 31, 2004 is not within 93 days of our fiscal year end. Accordingly, for pro forma purposes, statement of incomeinformation for the year ended December 31, 2004 is based on Elk City’s historical financial results for the twelve months ended November 30, 2004 and wascreated by subtracting the quarter ended November 30, 2003 from Elk City’s income statement for the year ended August 31, 2004 and adding the quarter endedNovember 30, 2004. For our pro forma statement of income information for the nine months ended September 30, 2005, we included Elk City’s incomestatement for the three months ended February 28, 2005. Elk City was included within our historical results for the nine months ended September 30, 2005 fromits date of acquisition on April 14, 2005.The unaudited pro forma balance sheet and the pro forma statements of income were derived by adjusting the historical financial statements of Atlas Pipeline GP.However, we believe that the adjustments provide a reasonable basis for presenting the significant effects of the transactions described above. The unaudited proforma financial data presented are for informational purposes only and are based upon available information and assumptions that we believe are reasonableunder the circumstances. You should not construe the unaudited pro forma financial data as indicative of the combined financial position or results of operationsthat we, Atlas Pipeline GP, Atlas, Spectrum, Elk City and NOARK would have achieved had the transactions been consummated on the dates assumed.Moreover, they do not purport to represent our, Atlas Pipeline GP’s, Atlas’, Spectrum’s, Elk City’s or NOARK’s combined financial position or results ofoperations for any future date or period.The financial data below should be read together with, and are qualified in their entirety by reference to, Atlas Pipeline GP’s historical consolidated and proforma combined financial statements and the accompanying notes, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”and the historical consolidated financial statements and the accompanying notes of Spectrum, Elk City and its predecessor and Enogex Arkansas Pipeline, eachof which is set forth elsewhere in this prospectus. The pro forma data are not necessarily reflective of what our results would actually have been had thetransactions actually occurred on the indicated date, nor do they reflect what may actually occur in the future. 18Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  31. 31. Back to Contents Pro Forma, as adjusted Nine Nine Months Year Months Ended Ended Ended Years Ended December 31, September 30, December 31, September 30, 2002 2003 2004(1) 2004(1) 2005(2) 2004 2005 (unaudited) (unaudited) (dollars in thousands) Statement of income data: Revenue: Natural gas and liquids $ — $ — $ 72,109 $ 30,048 $ 218,268 $ 331,119 $ 301,362 Transportation and compression 10,660 15,651 18,800 13,344 16,501 40,283 31,630 Interest income and other 7 98 382 282 352 711 496 Total revenue and other income 10,667 15,749 91,291 43,674 235,121 372,113 333,488 Costs and Expenses: Natural gas and liquids — — 58,707 24,588 184,578 286,828 261,794 Plant operating — — 2,032 931 7,242 9,105 8,605 Transportation and compression 2,062 2,421 2,260 1,709 2,169 6,694 5,716 General and administrative 1,482 1,662 4,642 2,901 9,127 10,378 11,544 Depreciation and amortization 1,475 1,770 4,471 2,132 8,495 16,803 12,809 Loss (gain) on arbitration settlement, net — — (1,457) 2,987 138 (1,457) 138 Interest 250 258 2,301 1,202 8,478 26,385 20,059 Minority interest in Atlas (3) 2,496 5,066 10,941 3,300 7,240 11,370 5,921 Minority interest in NOARK (4) — — — — — 492 440 Other — — — — — 555 — Total costs and expenses 7,765 11,177 83,897 39,750 227,467 367,153 327,026 Net income 2,902 4,572 7,394 3,924 7,654 4,960 6,462 Premium on preferred unit redemption — — (400) (400) — (400) — Net income attributable to owners $ 2,902 $ 4,572 $ 6,994 $ 3,524 $ 7,654 $ 4,560 $ 6,462 Balance sheet data (at period end): Property, plant and equipment, net $ 23,764 $ 29,628 $ 175,259 $ 172,312 $ 304,704 $ 462,626 Total assets 38,151 63,170 234,898 236,178 484,458 722,313 Total debt, including current portion 6,500 — 54,452 60,220 183,645 289,745 Total owners’ equity (deficit) 11,157 15,729 21,405 15,325 (40,880) (40,885) Other financial data: Gross margin (5) $ 10,660 $ 15,651 $ 32,202 $ 18,804 $ 50,191 $ 84,574 $ 71,198 EBITDA (6) 7,123 11,666 25,107 10,558 31,867 59,518 45,251 Adjusted EBITDA (6) 7,123 11,666 24,350 13,887 34,814 58,761 48,198 Maintenance capital expenditures $ 170 $ 3,109 $ 1,516 $ 844 $ 1,110 Expansion capital expenditures 5,060 4,526 8,527 3,575 33,409 Total capital expenditures $ 5,230 $ 7,635 $ 10,043 $ 4,419 $ 34,519 Operating data: Appalachia: Average throughput volumes (Mcf/d) 50,363 52,472 53,343 52,745 54,804 53,343 54,804 Average transportation rate per Mcf $ 0.58 $ 0.82 $ 0.96 $ 0.92 $ 1.10 $ 0.96 $ 1.10 Mid−Continent: Velma system: Gathered gas volume (Mcf/d) — — 56,441 55,580 69,091 54,315 69,091 Processed gas volume (Mcf/d) — — 55,202 54,755 64,581 52,391 64,581 Residue gas volume (Mcf/d) — — 42,659 41,555 52,471 40,702 52,471 NGL production (Bbl/d) — — 5,799 5,916 6,812 5,711 6,812 Condensate volume (Bbl/d) — — 185 204 269 191 269 Elk City system: Gathered gas volume (Mcf/d) — — — — 242,294 239,804 246,539 Processed gas volume (Mcf/d) — — — — 116,688 120,505 116,304 Residue gas volume (Mcf/d) — — — — 107,182 110,164 106,391 NGL production (Bbl/d) — — — — 5,317 5,331 5,347 Condensate volume (Bbl/d) — — — — 121 108 136 NOARK system: Average throughput volume (Mcf/d) — — — — — 155,937 163,906(1) Includes Atlas’ acquisition of Spectrum on July 16, 2004, representing five and one−half months’ operations for the year ended December 31, 2004 and two and one−half months’ operations for the nine months ended September 30, 2004.Source: Atlas Pipeline Holdi, S−1, January 12, 2006
  32. 32. 19Source: Atlas Pipeline Holdi, S−1, January 12, 2006

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