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| 8-K - CURRENT REPORT - Targa Pipeline Partners LP | d8k.htm |
EXHIBIT 99.1
PRO FORMA FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial statements reflect Atlas Pipeline Partners, L.P.’s (“the Partnership”) historical results as adjusted on a pro forma basis to give effect to its February 2011 disposition of its indirect 49% ownership interest in Laurel Mountain, LLC (“Laurel Mountain”) and the associated repayment of debt from the net proceeds of the disposition. The estimated adjustments to give effect to the Partnership’s disposition of its indirect ownership interest in Laurel Mountain and the associated repayment of debt from the net proceeds of the disposition are described in the notes to the unaudited pro forma financial statements.
The unaudited pro forma condensed consolidated balance sheet information reflects the Partnership’s disposition of its indirect ownership interest in Laurel Mountain as if it occurred as of September 30, 2010, and the unaudited pro forma condensed consolidated statement of operations for the nine months ended September 30, 2010 and twelve months ended December 31, 2009 reflect the transaction as if it occurred as of the beginning of each respective period.
The unaudited pro forma condensed consolidated balance sheet and the pro forma condensed consolidated statements of operations were derived by adjusting the Partnership’s historical consolidated financial statements. Management believes that the adjustments provide a reasonable basis for presenting the significant effects of the transaction described above. The unaudited pro forma financial data presented are based upon available information and assumptions that management believes are reasonable under the circumstances. You should not construe the unaudited pro forma financial data as indicative of the financial position or results of operations that the Partnership would have achieved had the transaction been consummated on the dates assumed. Moreover, they do not purport to represent the Partnership’s consolidated financial position or results of operations for any future date or period.
ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
September 30, 2010
(in thousands)
| Historical | Laurel Mountain Disposition |
Laurel Mountain Disposition Adjustments |
Pro Forma | |||||||||||||
| ASSETS |
||||||||||||||||
| Current assets: |
||||||||||||||||
| Cash and cash equivalents |
$ | 166 | — | $ | 397,775 | (a) | $ | 385,941 | ||||||||
| (12,000 | )(b) | |||||||||||||||
| Accounts receivable |
59,421 | — | — | 59,421 | ||||||||||||
| Current portion of derivative asset |
3,611 | — | — | 3,611 | ||||||||||||
| Prepaid expenses and other |
14,852 | — | — | 14,852 | ||||||||||||
| Total current assets |
78,050 | — | 385,775 | 463,825 | ||||||||||||
| Property, plant and equipment, net |
1,339,730 | — | — | 1,339,730 | ||||||||||||
| Intangible assets, net |
132,154 | — | — | 132,154 | ||||||||||||
| Investment in joint venture |
135,765 | (127,265 | ) | (8,500 | )(d) | — | ||||||||||
| Other assets, net |
23,564 | — | 8,500 | (d) | 32,064 | |||||||||||
| $ | 1,709,263 | $ | (127,265 | ) | $ | 385,775 | $ | 1,967,773 | ||||||||
| LIABILITIES AND PARTNERS’ CAPITAL |
||||||||||||||||
| Current liabilities: |
||||||||||||||||
| Current portion of long-term debt |
$ | 206 | $ | — | $ | — | $ | 206 | ||||||||
| Accounts payable - affiliates |
10,391 | — | — | 10,391 | ||||||||||||
| Accounts payable |
9,919 | — | — | 9,919 | ||||||||||||
| Accrued liabilities |
32,443 | — | — | 32,443 | ||||||||||||
| Accrued interest payable |
12,340 | — | — | 12,340 | ||||||||||||
| Current portion of derivative liability |
1,511 | — | — | 1,511 | ||||||||||||
| Accrued producer liabilities |
58,143 | — | — | 58,143 | ||||||||||||
| Total current liabilities |
124,953 | — | — | 124,953 | ||||||||||||
| Long-term derivative liability |
5,770 | — | — | 5,770 | ||||||||||||
| Long-term debt, less current portion |
507,676 | — | (12,000 | )(b) | 495,676 | |||||||||||
| Other long-term liability |
266 | — | — | 266 | ||||||||||||
| Commitments and contingencies |
||||||||||||||||
| Equity: |
||||||||||||||||
| Class B preferred limited partner’s interest |
14,955 | — | — | 14,955 | ||||||||||||
| Class C preferred limited partner’s interest |
8,000 | — | — | 8,000 | ||||||||||||
| Common limited partners’ interests |
1,087,649 | — | 265,370 | (a) | 1,353,019 | |||||||||||
| Equity |
— | (127,265 | ) | 127,265 | (a) | — | ||||||||||
| Investment in Class B cumulative preferred Member units of Atlas Pipeline Holdings II, LLC (reported as treasury units) |
(15,000 | ) | — | — | (15,000 | ) | ||||||||||
| General partner’s interest |
20,341 | — | 5,140 | (a) | 25,481 | |||||||||||
| Accumulated other comprehensive loss |
(13,635 | ) | — | — | (13,635 | ) | ||||||||||
| Total partners’ capital |
1,102,310 | (127,265 | ) | 397,775 | 1,372,820 | |||||||||||
| Non-controlling interest |
(31,712 | ) | — | — | (31,712 | ) | ||||||||||
| Total equity |
1,070,598 | (127,265 | ) | 397,775 | 1,341,108 | |||||||||||
| $ | 1,709,263 | $ | (127,265 | ) | $ | 385,775 | $ | 1,967,773 | ||||||||
See accompanying notes to unaudited condensed consolidated financial statements
2
ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010
(in thousands, except per unit data)
| Historical | Laurel Mountain Disposition |
Laurel Mountain Disposition Adjustments |
Pro Forma | |||||||||||||
| Revenue: |
||||||||||||||||
| Natural gas and liquids – third parties |
$ | 641,978 | $ | — | $ | — | $ | 641,978 | ||||||||
| Transportation, processing and other fees – affiliates |
472 | — | — | 472 | ||||||||||||
| Transportation, processing and other fees – third parties |
29,472 | — | — | 29,472 | ||||||||||||
| Other income, net – third parties |
10,576 | — | — | 10,576 | ||||||||||||
| Total revenue and other income, net |
682,498 | — | — | 682,498 | ||||||||||||
| Costs and expenses: |
||||||||||||||||
| Natural gas and liquids – third parties |
521,495 | — | — | 521,495 | ||||||||||||
| Plant operating |
36,492 | — | — | 36,492 | ||||||||||||
| Transportation and compression |
721 | — | — | 721 | ||||||||||||
| General and administrative |
22,396 | — | — | 22,396 | ||||||||||||
| Compensation reimbursement – affiliates |
1,125 | — | — | 1,125 | ||||||||||||
| Depreciation and amortization |
55,647 | — | — | 55,647 | ||||||||||||
| Interest |
78,444 | — | (621 | )(c) | 77,823 | |||||||||||
| Total costs and expenses |
716,320 | — | (621 | ) | 715,699 | |||||||||||
| Equity income in joint venture |
4,137 | (4,137 | ) | — | — | |||||||||||
| Income (loss) from continuing operations |
(29,685 | ) | (4,137 | ) | 621 | (33,201 | ) | |||||||||
| Income attributable to non-controlling interests |
(3,338 | ) | — | — | (3,338 | ) | ||||||||||
| Preferred unit dividend effect |
(240 | ) | — | — | (240 | ) | ||||||||||
| Net income (loss) from continuing operations attributable to common limited partners and the General Partner |
$ | (33,263 | ) | $ | (4,137 | ) | $ | 621 | $ | (36,779 | ) | |||||
| Allocation of net loss from continuing operations: |
||||||||||||||||
| Common limited partner interest |
$ | (32,627 | ) | $ | (36,077 | ) | ||||||||||
| General Partner interest |
(636 | ) | (702 | ) | ||||||||||||
| Net loss from continuing operations |
$ | (33,263 | ) | $ | (36,779 | ) | ||||||||||
| Net loss attributable to common limited partners per unit: |
||||||||||||||||
| Basic |
$ | (0.61 | ) | $ | (0.68 | ) | ||||||||||
| Diluted |
$ | (0.61 | ) | $ | (0.68 | ) | ||||||||||
| Weighted average common limited partner units outstanding: |
||||||||||||||||
| Basic |
53,115 | 53,115 | ||||||||||||||
| Diluted |
53,115 | 53,115 | ||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements
3
ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2009
(in thousands, except per unit data)
| Historical | Laurel Mountain Disposition |
Laurel Mountain Disposition Adjustments |
Pro Forma | |||||||||||||
| Revenue: |
||||||||||||||||
| Natural gas and liquids – third parties |
$ | 671,078 | $ | (587 | ) | $ | — | $ | 670,491 | |||||||
| Transportation, processing and other fees – affiliates |
17,536 | (16,882 | ) | — | 654 | |||||||||||
| Transportation, processing and other fees – third parties |
5,593 | (114 | ) | — | 5,479 | |||||||||||
| Other income, net – third parties |
(21,602 | ) | — | — | (21,602 | ) | ||||||||||
| Total revenue and other income, net |
672,605 | (17,583 | ) | — | 655,022 | |||||||||||
| Costs and expenses: |
||||||||||||||||
| Natural gas and liquids – third parties |
527,730 | (260 | ) | — | 527,470 | |||||||||||
| Plant operating |
45,566 | — | — | 45,566 | ||||||||||||
| Transportation and compression |
6,657 | (5,765 | ) | — | 892 | |||||||||||
| General and administrative |
34,549 | (8 | ) | — | 34,541 | |||||||||||
| Compensation reimbursement – affiliates |
2,731 | — | — | 2,731 | ||||||||||||
| Depreciation and amortization |
75,684 | (3,006 | ) | — | 72,678 | |||||||||||
| Goodwill and other asset impairment |
10,325 | — | — | 10,325 | ||||||||||||
| Interest |
103,787 | — | (600 | )(c) | 103,187 | |||||||||||
| Total costs and expenses |
807,029 | (9,039 | ) | (600 | ) | 797,390 | ||||||||||
| Equity income in joint venture |
4,043 | (4,043 | ) | — | — | |||||||||||
| Gain (loss) on asset sale |
108,947 | (108,947 | ) | — | — | |||||||||||
| Income (loss) from continuing operations |
(21,434 | ) | (121,534 | ) | 600 | (142,368 | ) | |||||||||
| Income attributable to non-controlling interests |
(3,176 | ) | — | — | (3,176 | ) | ||||||||||
| Preferred unit dividend effect |
(900 | ) | — | — | (900 | ) | ||||||||||
| Net income (loss) from continuing operations attributable to common limited partners and the General Partner |
$ | (25,510 | ) | $ | (121,534 | ) | $ | 600 | $ | (146,444 | ) | |||||
| Allocation of net loss from continuing operations: |
||||||||||||||||
| Common limited partner interest |
$ | (24,997 | ) | $ | (143,500 | ) | ||||||||||
| General Partner interest |
(513 | ) | (2,944 | ) | ||||||||||||
| Net loss from continuing operations |
$ | (25,510 | ) | $ | (146,444 | ) | ||||||||||
| Net loss attributable to common limited partners per unit: |
||||||||||||||||
| Basic |
$ | (0.52 | ) | $ | (2.97 | ) | ||||||||||
| Diluted |
$ | (0.52 | ) | $ | (2.97 | ) | ||||||||||
| Weighted average common limited partner units outstanding: |
||||||||||||||||
| Basic |
48,299 | 48,299 | ||||||||||||||
| Diluted |
48,299 | 48,299 | ||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements
4
ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| (a) | To reflect the Partnership’s proceeds from the February 2011 disposition of its indirect 49% ownership interest in Laurel Mountain of $403.0 million, exclusive of working capital adjustments and including estimated transactional costs of approximately $5.2 million; and to record an estimated gain of $270.5 million on the disposition of its indirect 49% ownership interest in Laurel Mountain, which was allocated to partners’ capital on the Partnership’s condensed consolidated balance sheet upon its equity interests and non-controlling interests. |
| (b) | To reflect the $12.0 million repayment of outstanding borrowings at September 30, 2010 under the Partnership’s senior secured credit facility with a portion of the net proceeds received from the Partnership’s disposition of its indirect 49% ownership interest in Laurel Mountain. |
| (c) | To reflect the adjustment to interest expense for the Partnership’s repayment of $12.0 million of its senior secured credit facility borrowings from the net proceeds of the disposition of its indirect 49% ownership interest in Laurel Mountain. The weighted average historical interest rates utilized for the interest expense adjustment were 6.9% for the nine months ended September 30, 2010 and 5.0% for the year ended December 31, 2009. |
| (d) | As of September 30, 2010, the Partnership had $8.5 million of the $25.5 million note receivable remaining to fund capital contributions to Laurel Mountain, which is included in the investment in joint venture on the consolidated balance sheet. The Partnership retained the $8.5 million note receivable upon disposition of its indirect 49% ownership interest in Laurel Mountain. |
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