DENVER, Aug. 6, 2014 /PRNewswire/ -- QEP Midstream Partners, LP (NYSE: QEPM) ("QEPM" or the "Partnership") today reported second quarter 2014 financial and operating results. The Partnership reported net income of $9.9 million, or $0.18 per limited partner unit (on a diluted basis). The Partnership generated Adjusted EBITDA (a non-GAAP measure) of $18.0 million and distributable cash flow of $15.9 million for the second quarter 2014, which represents 104% coverage of the second quarter 2014 distribution of $15.3 million. Please see the definitions of non-GAAP measures and the reconciliation to the most comparable measures calculated in accordance with GAAP in the "Non-GAAP Financial Measures" section of this press release.

http://photos.prnewswire.com/prnvar/20130904/LA74347LOGO

The Partnership will pay a quarterly distribution of $0.28 per unit for the second quarter 2014 on August 14, 2014, to unitholders of record as of the close of business on August 4, 2014. The distribution represents an increase of $0.01 per common unit, or 4%, over the first quarter 2014 distribution and is 12% over the Partnership's minimum quarterly distribution of $0.25 per unit.

Second Quarter Highlights


    --  Increased the quarterly cash distribution to $0.28 per unit.
    --  Entered into a definitive agreement with QEP Resources, Inc. ("QEP") to
        acquire a 40% interest in Green River Processing, LLC for $230 million
        (the "Green River Acquisition") and subsequently closed the transaction
        on July 1, 2014.
    --  Generated $18.0 million of Adjusted EBITDA and $15.9 million of
        distributable cash flow in the second quarter 2014.

"QEPM delivered steady results in the second quarter with increases over the first quarter in natural gas, crude oil and water gathering volumes," commented Chuck Stanley, President, Chairman and Chief Executive Officer. "Second quarter volumes are typically stronger due to the seasonality in our Pinedale operations, which allowed the Partnership to increase its distribution by four percent compared to the prior quarter marking the third consecutive quarter of four percent distribution increases. We expect our recent acquisition of a 40% interest in Green River Processing, LLC ("Green River Acquisition") will enable continued distribution growth in coming quarters," concluded Stanley.

Operating Results

Compared to the results for the second quarter 2013 for the Partnership's Predecessor (see discussion below regarding Predecessor Financial Information), gathering and transportation revenue and gathering expense decreased. The Predecessor results, which include results for assets that were not assigned to the Partnership but were retained by the Predecessor, decreased due to the lack of comparability of the results.

Compared to the second quarter 2013 on a pro forma basis, gathering and transportation revenue was down slightly and condensate sales decreased by $0.8 million from the second quarter 2014. Natural gas gathering volumes in the second quarter 2014 declined by 2% from the prior year due to declines in throughput on the Green River and Vermillion systems, and increased 8% from the prior quarter, due to variances associated with seasonality. Condensate sales revenue in the second quarter 2014 decreased 31% from the prior year and 14% from the prior quarter due in part to seasonal variability. Condensate sales volumes typically increase in the first half of the year as colder temperatures cause liquids to condense out of the gas stream. There was no deficiency revenue in the second quarter 2014 compared to $2.9 million in the first quarter 2014 related to deficiency payments on the Williston gathering system.

Operating expenses in the second quarter 2014 increased by 10% from the prior year due primarily to higher general and administrative expenses from professional service fees incurred for the Green River Acquisition and higher depreciation and amortization expense partially offset by lower gathering expense.

Balance Sheet

As of June 30, 2014, the Partnership had $16.5 million of cash and cash equivalents and no borrowings on its $500 million revolving credit facility. On July 1, 2014, in conjunction with the closing of the Green River Acquisition, the Partnership borrowed $220.0 million under its revolving credit facility.

Capital Expenditures

Capital expenditures totaled $8.3 million for the Partnership for the six months ended June 30, 2014, which includes maintenance capital of $7.3 million and expansion capital expenditures of $1.0 million. Maintenance capital expenditures of $7.3 million include $5.4 million related to the Green River gathering system, of which $3.1 million related to a compressor maintenance overhaul project, $1.3 million related to system maintenance, and $1.0 million related to a condensate pipeline repair and replacement project. The Partnership was reimbursed by QEP for the $1.0 million of pipeline repair costs pursuant to an indemnification provision in the Omnibus Agreement. The remaining maintenance capital expenditures of $1.9 million primarily related to compressor maintenance on the Vermillion gathering system. Expansion capital expenditures of $1.0 million related primarily to a compressor replacement project on the Vermillion gathering system and reimbursable well connects on the Williston gathering system.

2014 Guidance

The Partnership's guidance has been revised from the first quarter 2014 results update. For 2014 the Partnership forecasts distributable cash flow in a range of $72 million to $78 million, unchanged from prior guidance and Adjusted EBITDA of $85 million to $87 million, compared to $89 million to $93 million previously. Capital expenditures net of reimbursements from QEP and excluding Green River Processing are expected to be in the range of $11 million to $14 million compared to $19 million to $23 million previously and include expansion capital expenditures of $1 million to $2 million compared to $8 million to $10 million previously as the expansion of the Vermillion gathering system, which had been scheduled for late 2014, has been deferred into 2015. In addition to capital expenditures related to our consolidated assets, the Partnership expects to make contributions to Green River Processing related to maintenance capital expenditures for approximately $1.0 million to $2.0 million.

Second Quarter 2014 Results Conference Call

QEPM's management will discuss second quarter 2014 results in a conference call on Thursday, August 7, 2014, beginning at 11:00 a.m. EDT. The conference call can be accessed at www.qepm.com. You may also participate in the conference call by dialing (877) 407-4019 domestically or (201) 689-8337 internationally. Attendees should log in to the webcast or dial in approximately 15 minutes prior to the call's start time. A replay of the conference call will be available on the website and a telephone audio replay will be available from August 7, 2014 to September 7, 2014, by calling (877) 660-6853 domestically or (201) 612-7415 internationally and then entering conference ID # 13586969.

About QEP Midstream Partners, LP

QEP Midstream Partners, LP is a master limited partnership formed by QEP Resources, Inc. (NYSE: QEP) to own, operate, acquire and develop midstream energy assets. The Partnership provides midstream gathering and processing services to QEP and third-party companies in the Green River, Uinta and Williston basins.

Forward-Looking Statements

Disclosures in this press release contain certain forward-looking statements within the meaning of the federal securities laws. Statements that do not relate strictly to historical or current facts are forward-looking. These statements contain words such as "possible," "if," "will" and "expect" and involve risks and uncertainties including, among others that our business plans may change as circumstances warrant. Such forward-looking statements include statements regarding payments related to: continued growth in distributions; impact of the Green River Acquisition; increase in condensate volumes during the first half of the year; forecasted Adjusted EBITDA and capital expenditures for 2014; usefulness of non-GAAP measures; supplemental pro forma disclosures and their usefulness to investors; and adjustments made to calculate pro forma amounts. Factors that could cause QEPM's actual results to differ materially from the results contemplated by such forward-looking statements include: changes in general economic conditions; competitive conditions in QEPM's industry; actions taken by third-party operators, processors and transporters; the demand for oil and natural gas storage and transportation services; QEPM's ability to successfully implement its business plan; QEPM's ability to integrate acquired assets; its ability to complete internal growth projects on time and on budget; the price and availability of debt and equity financing; operating risks and hazards incidental to transporting, storing and processing oil and natural gas, as applicable; natural disasters, weather-related delays and casualty losses; the outcome of litigation; and other factors discussed in the Risk Factors section of the Partnership's Annual Report on Form 10-K for the year ended December 31, 2013. Investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Partnership undertakes no obligation to publicly correct or update the forward-looking statements in this news release, in other documents, or on the website to reflect future events or circumstances. All such statements are expressly qualified by this cautionary statement.



    Contact
    -------


    Investors: Greg Bensen                  Media: Brent Rockwood

               Director, Investor Relations        Director, Communications

               303-405-6665                        303-672-6999


    QEP MIDSTREAM PARTNERS, LP

    CONSOLIDATED STATEMENTS OF INCOME

    (Unaudited)


                                                 Three Months Ended June 30,                       Six Months Ended June 30,

                                                     2014                      2013                     2014                     2013
                                                     ----                      ----                     ----                     ----

                                               Successor               Predecessor               Successor             Predecessor
                                               ---------               -----------               ---------             -----------

                                                          (in millions, except per unit amounts)

    Revenues

    Gathering and
     transportation                                            $28.4                                  $37.1                           $57.3 $73.7

    Condensate sales                                  1.8                       3.0                      3.9                      6.5
                                                      ---                       ---                      ---                      ---

    Total revenues                                   30.2                      40.1                     61.2                     80.2
                                                     ----                      ----                     ----                     ----

    Operating expenses

    Gathering expense                                 5.4                       8.3                     11.8                     16.0

    General and
     administrative                                   5.2                       4.7                      9.9                     10.4

    Taxes other than
     income taxes                                     0.5                       0.6                      1.0                      0.9

    Depreciation and
     amortization                                     8.2                       9.8                     16.0                     20.1

    Total operating
     expenses                                        19.3                      23.4                     38.7                     47.4

    Net loss from property
     sales                                              -                    (0.1)                       -                   (0.4)
                                                      ---                     ----                      ---                    ----

    Operating income                                 10.9                      16.6                     22.5                     32.4

    Income from
     unconsolidated
     affiliates                                       0.4                       2.1                      1.9                      3.4

    Interest expense                                (0.5)                    (1.0)                   (1.1)                   (2.1)
                                                     ----                      ----                     ----                     ----

    Net income                                       10.8                      17.7                     23.3                     33.7

    Net income
     attributable to
     noncontrolling
     interest                                       (0.9)                    (1.3)                   (1.7)                   (1.9)
                                                     ----                      ----                     ----                     ----

    Net income
     attributable to QEP
     Midstream or
     Predecessor                                                $9.9                                  $16.4                           $21.6 $31.8
                                                                ====                                  =====                           ===== =====


    Net income attributable to QEP Midstream per limited partner unit (basic and diluted):

    Common units                                               $0.18                                                          $0.39

    Subordinated units                                         $0.18                                                          $0.39


    Weighted-average limited partner units outstanding (basic and diluted):

    Common units                                     26.7                                              26.7

    Subordinated units                               26.7                                              26.7




    QEP MIDSTREAM PARTNERS, LP

    CONSOLIDATED STATEMENTS OF CASH FLOWS

    (Unaudited)




                                            Six Months Ended June 30,

                                                2014                     2013


                                          Successor              Predecessor
                                          ---------              -----------

                                                  (in millions)

    OPERATING ACTIVITIES

    Net income                                           $23.3                  $33.7

    Adjustments to reconcile net
     income to net cash provided by
     operating activities:

    Depreciation and
     amortization                               16.0                     20.1

    Equity-based
     compensation expense                        0.6                        -

    Income from
     unconsolidated
     affiliates                                (1.9)                   (3.4)

    Distributions from
     unconsolidated
     affiliates                                  4.2                      4.1

    Amortization of debt
     issuance costs                              0.3                        -

    Net loss from asset
     sales                                         -                     0.4

    Changes in operating
     assets and
     liabilities                               (2.6)                     8.5

    Net cash provided by
     operating activities                       39.9                     63.4
                                                ----                     ----

    INVESTING ACTIVITIES

    Property, plant and
     equipment                                (11.4)                   (7.5)

    Proceeds from sale of
     assets                                        -                     0.9
                                                 ---                     ---

    Net cash used in
     investing activities                     (11.4)                   (6.6)
                                               -----                     ----

    FINANCING ACTIVITIES

    Repayments of long-
     term debt (to
     related party)                                -                  (43.7)

    Contributions from
     (distributions to)
     parent, net                                 1.0                    (8.3)

    Distributions to
     unitholders                              (28.9)                       -

    Distribution to
     noncontrolling
     interest                                  (3.1)                   (3.1)
                                                ----                     ----

    Net cash used in
     financing activities                     (31.0)                  (55.1)
                                               -----                    -----

    Change in cash and
     cash equivalents                          (2.5)                     1.7

    Beginning cash and
     cash equivalents                           19.0                      1.4
                                                ----                      ---

    Ending cash and cash
     equivalents                                         $16.5                   $3.1
                                                         =====                   ====


    Supplemental Disclosures:

    Non-cash investing activities

    Change in capital
     expenditure accrual
     balance                                            $(3.1)                $(2.3)

Non-GAAP Financial Measures

This press release, and the accompanying tables, includes financial measures in accordance with U.S. generally accepted accounting principles ("GAAP"), as well as non-GAAP financial measures, including Adjusted EBITDA and Distributable Cash Flow. Management believes that the presentation of Adjusted EBITDA and Distributable Cash Flow provides information useful to investors in assessing QEPM's financial condition and results of operations. Management defines Adjusted EBITDA as net income attributable to the Partnership or Predecessor before depreciation and amortization, interest and other income and expense, gains and losses from asset sales, deferred revenue associated with minimum volume commitment payments and certain other non-cash and/or non-recurring items. Management defines Distributable Cash Flow as Adjusted EBITDA less net cash interest paid, maintenance capital expenditures and cash adjustments related to equity method investments and non-controlling interests, and other non-cash expenses. Distributable Cash Flow does not reflect changes in working capital balances.

The GAAP measures most directly comparable to Adjusted EBITDA and Distributable Cash Flow are net income and cash flow provided by operating activities attributable to the Partnership or Predecessor. The tables below include reconciliations of these non-GAAP financial measures to the nearest GAAP financial measures.



                                                   Three Months Ended June 30,                     Six Months Ended June 30,

                                                       2014                     2013                        2014                       2013
                                                       ----                     ----                        ----                       ----

                                                 Successor              Predecessor                  Successor               Predecessor
                                                 ---------              -----------                  ---------               -----------

                                                (in millions)

     Unaudited Reconciliation of Net Income Attributable to QEP Midstream or Predecessor to Adjusted EBITDA and Distributable Cash Flows

    Net income attributable
     to QEP Midstream or
     Predecessor                                                 $9.9                                     $16.4                             $21.6 $31.8

    Interest expense                                    0.5                      1.0                         1.1                        2.1

    Depreciation and
     amortization                                       8.2                      9.8                        16.0                       20.1

    Noncontrolling interest
     share of depreciation
     and amortization(1)                              (0.6)                   (0.3)                      (1.3)                     (1.0)

    Net loss from property
     sales                                                -                     0.1                           -                       0.4


    Adjusted EBITDA                                             $18.0                                     $27.0                             $37.4 $53.4
                                                                =====                                     =====                             ===== =====

    Net cash interest paid                            (0.4)                                              (0.8)

    Maintenance capital
     expenditures                                     (3.1)                                              (7.3)

    Reimbursements for
     maintenance capital
     expenditures                                         -                                                1.0

    Cash adjustments related
     to equity method
     investments and non-
     controlling interest                               1.3                                                 2.7

    Non-cash equity-based
     compensation expense                               0.1                                                 0.3

    Distributable Cash Flow                                     $15.9                                                               $33.3
                                                                =====                                                               =====


                                                Six Months Ended June 30,

                                                       2014                     2013
                                                       ----                     ----

                                                 Successor              Predecessor
                                                 ---------              -----------

                                                          (in millions)

    Reconciliation of Net Cash Flows Provided by
     Operating Activities to Adjusted EBITDA and
     Distributable Cash Flows

    Net cash provided by
     operating activities                                       $39.9                $63.4

    Noncontrolling interest
     share of depreciation
     and amortization(1)                              (1.3)                   (1.0)

    Income from
     unconsolidated
     affiliates, net of
     distributions from
     unconsolidated
     affiliates                                       (2.3)                   (0.7)

    Net income attributable
     to noncontrolling
     interest                                         (1.7)                   (1.9)

    Interest expense                                    1.1                      2.1

    Working capital changes                             2.6                    (8.5)

    Amortization of
     deferred financing
     charges                                          (0.3)                       -

    Equity-based
     compensation expense                             (0.6)                       -
                                                       ----                      ---

    Adjusted EBITDA                                             $37.4                $53.4
                                                                =====                =====

    Net cash interest paid                            (0.8)

    Maintenance capital
     expenditures                                     (7.3)

    Reimbursements for
     maintenance capital
     expenditures                                       1.0

    Cash adjustments
     related to equity
     method investments and
     non-controlling
     interest                                           2.7

    Non-cash equity-based
     compensation expense                               0.3

    Distributable Cash Flow                                     $33.3
                                                                =====



    (1)               Represents the noncontrolling
                      interest's 22% share of
                      depreciation and amortization
                      attributable to Rendezvous Gas
                      Services.

Supplemental Pro Forma Disclosures

The discussion of our historic performance and financial condition is presented for the Partnership (Successor), for the three and six months ended June 30, 2014, and for the Predecessor for the three and six months ended June 30, 2013.

The historic financial information of the Predecessor contained in this report relates to periods that ended prior to the completion of the IPO, and includes results for both the properties conveyed to the Partnership in connection with the IPO and properties retained by our Predecessor. We believe that historical data limited to only the properties conveyed to the Partnership in connection with the IPO, adjusted for transactions that occurred as a result of the IPO, is relevant and meaningful, enhances the discussion of the periods presented and is useful to the reader to better understand trends in our operations. Therefore, we have also included the results of operations for the three and six months ended June 30, 2013 on a pro forma basis.

The following pro forma financial data is for informational purposes only and was derived from the Predecessor financial information adjusted to give effect to events and circumstances that are directly attributed to the IPO transaction as if it had occurred on January 1, 2013, that are factually supportable and, with respect to the Consolidated Statement of Income, are expected to have a continuing impact on the consolidated results. These adjustments include: removing the results of the assets retained by the Predecessor, consisting of the Uinta Basin Gathering System and general support equipment; an adjustment to general and administrative expense for the estimated incremental expenses that would have occurred as a result of operating as a public company and the entry into the Omnibus Agreement concurrent with the IPO; and an adjustment to interest expense to eliminate the related party debt that was settled in conjunction with the IPO and to estimate interest expense related to the Credit Facility entered into following the IPO. The unaudited pro forma information should not be relied upon as necessarily being indicative of the results that may be obtained in the future.



                                                    Pro Forma Financial Data


                            Three Months
                             Ended June
                              30, 2014                       Three Months Ended June 30, 2013
                           ------------                      --------------------------------

                             Successor                 Predecessor                   Pro Forma
                                                       As Reported                  Adjustments
                                                                                         (1)           Pro Forma
                               ---------              ------------                 ------------         ---------

    Revenues                        (in millions, except operating and per unit amounts)

    Gathering and
     transportation                           $28.4                                        $37.1                     $(8.4)        $28.7

    Condensate sales                 1.8                        3.0                         (0.4)               2.6

    Total revenues                  30.2                       40.1                         (8.8)              31.3
                                    ----                       ----                          ----               ----

    Operating expenses

    Gathering expense                5.4                        8.3                         (2.5)               5.8

    General and
     administrative                  5.2                        4.7                         (0.6)  (2)          4.1

    Taxes other than
     income taxes                    0.5                        0.6                         (0.3)               0.3

    Depreciation and
     amortization                    8.2                        9.8                         (2.5)               7.3
                                     ---                        ---                          ----                ---

    Total operating
     expenses                       19.3                       23.4                         (5.9)              17.5

    Net loss from property
     sales                             -                     (0.1)                          0.1                  -
                                     ---                      ----                           ---                ---

    Operating income                10.9                       16.6                         (2.8)              13.8

    Income from
     unconsolidated
     affiliates                      0.4                        2.1                         (1.2)               0.9

    Interest expense               (0.5)                     (1.0)                          0.5   (3)        (0.5)
                                    ----                       ----                           ---               ----

    Net income                      10.8                       17.7                         (3.5)              14.2

    Net income
     attributable to
     noncontrolling
     interest                      (0.9)                     (1.3)                            -             (1.3)

    Net income
     attributable to QEP
     Midstream or
     Predecessor                               $9.9                                        $16.4                     $(3.5)        $12.9
                                               ====                                        =====                      =====         =====

    Operating Statistics

    Natural gas throughput
     in millions of MMBtu

    Gathering and
     transportation                 75.8                       94.4                        (18.8)              75.6

    Equity interest(4)               5.4                        7.3                         (0.5)               6.8
                                     ---                        ---                          ----                ---

    Total natural gas
     throughput                     81.2                      101.7                        (19.3)              82.4

    Throughput
     attributable to
     noncontrolling
     interests(5)                  (2.7)                     (2.7)                            -             (2.7)
                                    ----                       ----                           ---              ----

    Total throughput
     attributable to QEP
     Midstream or
     Predecessor                    78.5                       99.0                        (19.3)              79.7
                                    ====                       ====                         =====               ====

    Crude oil and
     condensate gathering
     system throughput
     volumes (in MBbls)          1,112.0                    1,380.8                             -           1,380.8

    Water gathering
     volumes (in MBbls)          1,174.3                    1,027.6                             -           1,027.6

    Condensate sales
     volumes (in MBbls)             20.9                       36.2                         (3.3)              32.9

    Price

    Average gas gathering
     and transportation
     fee (per MMBtu)                          $0.31                                        $0.34                             $0.32

    Average oil and
     condensate gathering
     fee (per barrel)                         $2.39                                        $2.14                             $2.14

    Average water
     gathering fee (per
     barrel)                                  $1.87                                        $1.83                             $1.83

    Average condensate
     sale price (per
     barrel)                                 $85.25                                       $80.96                            $80.94

    Non-GAAP Measures

    Adjusted EBITDA (6)                       $18.0                                        $27.0                     $(6.6)        $20.4

    Distributable Cash
     Flow (6)                                 $15.9



    (1)              Pro forma adjustments reflect
                     operating results related to
                     assets retained by our Predecessor
                     following the IPO, except as
                     otherwise noted.

    (2)              The pro forma adjustment for
                     general and administrative expense
                     eliminates general and
                     administrative expense allocated
                     to the Predecessor by QEP and
                     includes the estimated incremental
                     expenses that would have occurred
                     as a result of operating as a
                     public company and the entry into
                     the Omnibus Agreement concurrent
                     with the IPO.

    (3)              The pro forma adjustment for
                     interest expense eliminates
                     historical interest expense due to
                     QEP as the related party debt was
                     settled concurrent with the IPO
                     and includes the estimated
                     interest expense related to the
                     Credit Facility, which was entered
                     into in conjunction with the IPO,
                     which includes amortization of
                     deferred finance cost and
                     commitment fees on the unused
                     portion of the Credit Facility.

    (4)              Includes our 50% share of gross
                     volumes from Three Rivers
                     Gathering and the Predecessor's
                     38% share of gross volumes from
                     Uintah Basin Field Services.

    (5)              Includes the 22% noncontrolling
                     interest in Rendezvous Gas.

    (6)              Adjusted EBITDA and Distributable
                     Cash Flow are non-GAAP financial
                     measures. See "Supplemental Pro
                     Forma Analysis -Adjusted EBITDA
                     and Distributable Cash Flow (Non-
                     GAAP)" below for definitions of
                     these non-GAAP financial measures
                     and reconciliations to the most
                     directly comparable GAAP financial
                     measures.


                            Six Months
                            Ended June
                            30, 2014                        Six Months Ended June 30, 2013
                           -----------                      ------------------------------

                           Successor                 Predecessor                   Pro Forma
                                                     As Reported                  Adjustments
                                                                                       (1)             Pro Forma
                             ---------              ------------                 ------------           ---------

                                   (in millions, except operating and per unit amounts)

    Revenues

    Gathering and
     transportation                         $57.3                                        $73.7                       $(16.0)                    $57.7

    Condensate sales               3.9                        6.5                               $(1.9)                             $4.6
                                   ---                        ---                                -----                              ----

    Total revenues                61.2                       80.2                        (17.9)                62.3
                                  ----                       ----                         -----                 ----

    Operating expenses

    Gathering expense             11.8                       16.0                               $(4.4)                  11.6

    General and
     administrative                9.9                       10.4                               $(1.8)          (2)      8.6

    Taxes other than
     income taxes                  1.0                        0.9                               $(0.4)                   0.5

    Depreciation and
     amortization                 16.0                       20.1                               $(5.1)                  15.0
                                  ----                       ----                                -----                   ----

    Total operating
     expenses                     38.7                       47.4                        (11.7)                35.7

    Net loss from property
     sales                           -                     (0.4)                                $0.4                      -
                                   ---                      ----                                 ----                    ---

    Operating income              22.5                       32.4                         (5.8)                26.6

    Income from
     unconsolidated
     affiliates                    1.9                        3.4                               $(1.9)                   1.5

    Interest expense             (1.1)                     (2.1)                                $1.0           (3)    (1.1)
                                  ----                       ----                                 ----                   ----

    Net income                    23.3                       33.7                         (6.7)                27.0

    Net income
     attributable to
     noncontrolling
     interest                    (1.7)                     (1.9)                            $                 -               (1.9)
                                  ----                       ----                           ---               ---                ----

    Net income
     attributable to QEP
     Midstream or
     Predecessor                            $21.6                                        $31.8                        $(6.7)                    $25.1
                                            =====                                        =====                         =====                     =====

    Operating Statistics

    Natural gas throughput
     in millions of MMBtu

    Gathering and
     transportation              145.6                      185.0                        (36.9)               148.1

    Equity interest (4)           10.6                       10.6                         (0.9)                 9.7
                                  ----                       ----                          ----                  ---

    Total natural gas
     throughput                  156.2                      195.6                        (37.8)               157.8

    Throughput
     attributable to
     noncontrolling
     interests (5)               (5.3)                     (5.3)                            -               (5.3)
                                  ----                       ----                           ---                ----

    Total throughput
     attributable to QEP
     Midstream or
     Predecessor                 150.9                      190.3                        (37.8)               152.5
                                 =====                      =====                         =====                =====

    Crude oil and
     condensate gathering
     system throughput
     volumes (in MBbls)        2,182.1                    2,659.6                             -             2,659.6

    Water gathering
     volumes (in MBbls)        2,250.1                    1,897.7                             -             1,897.7

    Condensate sales
     volumes (in MBbls)           45.9                       78.9                        (22.7)                56.2

    Price

    Average gas gathering
     and transportation
     fee (per MMBtu)                        $0.31                                        $0.34                                            $0.34

    Average oil and
     condensate gathering
     fee (per barrel)                       $2.37                                        $2.08                                            $2.08

    Average water
     gathering fee (per
     barrel)                                $1.86                                        $1.82                                            $1.82

    Average condensate
     sale price (per
     barrel)                               $85.25                                       $82.05                                           $82.68

    Non-GAAP Measures

    Adjusted EBITDA (6)                     $37.4                                        $53.4                       $(13.2)                    $40.2

    Distributable Cash
     Flow (6)                               $33.3



    (1)              Pro forma adjustments reflect
                     operating results related to
                     assets retained by our Predecessor
                     following the IPO, except as
                     otherwise noted.

    (2)              The pro forma adjustment for
                     general and administrative expense
                     eliminates general and
                     administrative expense allocated
                     to the Predecessor by QEP and
                     includes the estimated incremental
                     expenses that would have occurred
                     as a result of operating as a
                     public company and the entry into
                     the Omnibus Agreement concurrent
                     with the IPO.

    (3)              The pro forma adjustment for
                     interest expense eliminates
                     historical interest expense due to
                     QEP as the related party debt was
                     settled concurrent with the IPO
                     and includes the estimated
                     interest expense related to the
                     Credit Facility, which was entered
                     into in conjunction with the IPO,
                     which includes amortization of
                     deferred finance cost and
                     commitment fees on the unused
                     portion of the Credit Facility.

    (4)              Includes our 50% share of gross
                     volumes from Three Rivers
                     Gathering and the Predecessor's
                     38% share of gross volumes from
                     Uintah Basin Field Services.

    (5)              Includes the 22% noncontrolling
                     interest in Rendezvous Gas.

    (6)              Adjusted EBITDA and Distributable
                     Cash Flow are non-GAAP financial
                     measures. See "Supplemental Pro
                     Forma Analysis -Adjusted EBITDA
                     and Distributable Cash Flow (Non-
                     GAAP)" below for definitions of
                     these non-GAAP financial measures
                     and reconciliations to the most
                     directly comparable GAAP financial
                     measures.

Logo - http://photos.prnewswire.com/prnh/20130904/LA74347LOGO

SOURCE QEP Midstream Partners, LP