Attached files
Exhibit 99
SEMGROUP CORPORATION
Unaudited Pro Forma Condensed Consolidated Financial Statements
On November 1, 2011, SemGroup Corporation contributed certain assets and liabilities of its subsidiary, SemStream, L.P. (“SemStream”), to NGL Energy Partners LP (“NGL Energy”) in exchange for equity interests in NGL Energy and cash, pursuant to a Contribution Agreement entered into on August 31, 2011. The accompanying unaudited pro forma condensed consolidated financial statements of SemGroup Corporation have been prepared in accordance with Article 11 of Regulation S-X. The accompanying unaudited pro forma condensed consolidated balance sheet reflects the transaction with NGL Energy as if it had occurred on June 30, 2011. The accompanying unaudited pro forma condensed consolidated statements of operations reflect the transaction with NGL Energy as if it had occurred on January 1, 2010. The terms “we”, “our”, “us”, and similar language used in these unaudited pro forma condensed consolidated financial statements refer to SemGroup Corporation and its subsidiaries.
These unaudited pro forma condensed consolidated financial statements have been derived from our historical financial statements, which are included in our quarterly report on Form 10-Q for the quarter ended June 30, 2011 and our annual report on Form 10-K for the year ended December 31, 2010. These unaudited pro forma condensed consolidated financial statements should be read in conjunction with our historical financial statements and related notes thereto.
These unaudited pro forma condensed consolidated financial statements are provided for illustrative purposes only and do not purport to represent what our actual results of operations or financial position would have been if the transaction had occurred on the dates assumed, nor are they necessarily indicative of our future operating results or financial position. However, the pro forma adjustments shown in these unaudited condensed consolidated pro forma financial statements reflect estimates and assumptions that we believe to be reasonable.
SEMGROUP CORPORATION
Unaudited Pro Forma Condensed Consolidated Balance Sheet
June 30, 2011
(Dollars in thousands)
| Pro Forma | ||||||||||||
| Historical | Adjustments | Pro Forma | ||||||||||
| ASSETS |
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| Current assets: |
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| Cash and cash equivalents |
$ | 88,737 | $ | 30,716 | (a) | $ | 88,737 | |||||
| (30,716 | )(b) | |||||||||||
| Restricted cash |
46,546 | — | 46,546 | |||||||||
| Accounts receivable, net of allowance |
236,118 | — | 236,118 | |||||||||
| Inventories |
89,393 | (60,715 | )(c) | 28,678 | ||||||||
| Current assets of discontinued operations |
171 | — | 171 | |||||||||
| Other current assets |
31,913 | (9,993 | )(c) | 21,920 | ||||||||
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| Total current assets |
492,878 | (70,708 | ) | 422,170 | ||||||||
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| Property, plant and equipment, net |
801,022 | (47,306 | )(c) | 753,716 | ||||||||
| Equity method investments |
147,734 | 183,961 | (d) | 331,695 | ||||||||
| Goodwill |
110,016 | (50,071 | )(c) | 59,945 | ||||||||
| Other intangible assets, net |
30,022 | (12,787 | )(c) | 17,235 | ||||||||
| Other assets, net |
18,780 | (719 | )(b) | 15,024 | ||||||||
| (3,037 | )(c) | |||||||||||
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| Total assets |
$ | 1,600,452 | $ | (667 | ) | $ | 1,599,785 | |||||
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| LIABILITIES AND OWNERS' EQUITY |
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| Current liabilities: |
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| Accounts payable |
$ | 157,514 | $ | — | $ | 157,514 | ||||||
| Accrued liabilities |
50,810 | — | 50,810 | |||||||||
| Payables to pre-petition creditors |
43,989 | — | 43,989 | |||||||||
| Other current liabilities |
30,297 | (12,528 | )(c) | 17,769 | ||||||||
| Current liabilities of discontinued operations |
1,163 | — | 1,163 | |||||||||
| Current portion of long-term debt |
9,150 | (12 | )(c) | 9,138 | ||||||||
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| Total current liabilities |
292,923 | (12,540 | ) | 280,383 | ||||||||
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| Long-term debt |
307,456 | (30,716 | )(b) | 276,663 | ||||||||
| (77 | )(c) | |||||||||||
| Deferred income taxes |
92,262 | — | 92,262 | |||||||||
| Other noncurrent liabilities |
55,811 | (90 | )(c) | 55,721 | ||||||||
| Owners’ equity: |
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| Common stock |
416 | — | 416 | |||||||||
| Additional paid-in capital |
1,026,287 | — | 1,026,287 | |||||||||
| Accumulated deficit |
(182,456 | ) | (719 | )(b) | (139,700 | ) | ||||||
| 43,475 | (e) | |||||||||||
| Accumulated other comprehensive income |
7,753 | — | 7,753 | |||||||||
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| Total owners’ equity |
852,000 | 42,756 | 894,756 | |||||||||
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| Total liabilities and owners’ equity |
$ | 1,600,452 | $ | (667 | ) | $ | 1,599,785 | |||||
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SEMGROUP CORPORATION
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Six Months Ended June 30, 2011
(Dollars in thousands, except per share amounts)
| Historical | Pro Forma Adjustments |
Pro Forma | ||||||||||
| Revenues: |
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| Product |
$ | 634,757 | $ | (359,808 | )(f) | $ | 274,949 | |||||
| Service |
68,610 | (542 | )(f) | 68,068 | ||||||||
| Other |
47,806 | (132 | )(f) | 47,674 | ||||||||
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| Total revenues |
751,173 | (360,482 | ) | 390,691 | ||||||||
| Expenses: |
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| Costs of products sold, exclusive of depreciation and amortization shown below |
588,370 | (355,524 | )(f) | 232,846 | ||||||||
| Operating |
75,628 | (4,370 | )(f) | 71,258 | ||||||||
| General and administrative |
40,380 | (2,203 | )(f) | 38,177 | ||||||||
| Depreciation and amortization |
26,260 | (2,623 | )(f) | 23,637 | ||||||||
| Gain on disposal of long-lived assets, net |
(136 | ) | (65 | )(f) | (201 | ) | ||||||
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| Total expenses |
730,502 | (364,785 | ) | 365,717 | ||||||||
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| Equity in earnings of White Cliffs |
6,150 | — | (g) | 6,150 | ||||||||
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| Operating income |
26,821 | 4,303 | 31,124 | |||||||||
| Other expenses (income): |
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| Interest expense |
43,370 | (1,382 | )(h) | 41,988 | ||||||||
| Foreign currency transaction gain |
(556 | ) | (28 | )(f) | (584 | ) | ||||||
| Other income, net |
(5,591 | ) | 1 | (f) | (5,590 | ) | ||||||
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| Total other expenses, net |
37,223 | (1,409 | ) | 35,814 | ||||||||
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| Loss from continuing operations before income taxes |
(10,402 | ) | 5,712 | (4,690 | ) | |||||||
| Income tax expense |
1,894 | — | 1,894 | |||||||||
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| Loss from continuing operations |
$ | (12,296 | ) | $ | 5,712 | $ | (6,584 | ) | ||||
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| Basic and diluted loss from continuing operations per common share |
$ | (0.30 | ) | $ | (0.16 | ) | ||||||
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SEMGROUP CORPORATION
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Year Ended December 31, 2010
(Dollars in thousands, except per share amounts)
| Historical | Pro Forma Adjustments |
Pro Forma | ||||||||||
| Revenues: |
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| Product |
$ | 1,354,765 | $ | (712,270 | )(f) | $ | 642,495 | |||||
| Service |
181,913 | (1,332 | )(f) | 180,581 | ||||||||
| Other |
93,656 | (862 | )(f) | 92,794 | ||||||||
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| Total revenues |
1,630,334 | (714,464 | ) | 915,870 | ||||||||
| Expenses: |
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| Costs of products sold, exclusive of depreciation and amortization shown below |
1,265,932 | (691,823 | )(f) | 574,109 | ||||||||
| Operating |
153,440 | (7,019 | )(f) | 146,421 | ||||||||
| General and administrative |
87,237 | (3,133 | )(f) | 84,104 | ||||||||
| Depreciation and amortization |
70,882 | (5,040 | )(f) | 65,842 | ||||||||
| Loss on disposal or impairment of long-lived assets, net |
105,050 | 34 | (f) | 105,084 | ||||||||
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| Total expenses |
1,682,541 | (706,981 | ) | 975,560 | ||||||||
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| Equity in earnings of White Cliffs |
1,949 | — | (g) | 1,949 | ||||||||
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| Operating loss |
(50,258 | ) | (7,483 | ) | (57,741 | ) | ||||||
| Other expenses (income): |
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| Interest expense |
86,133 | (2,764 | )(h) | 83,369 | ||||||||
| Foreign currency transaction loss |
2,899 | 2 | (f) | 2,901 | ||||||||
| Other expense, net |
1,439 | 2,981 | (f) | 4,420 | ||||||||
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| Total other expenses, net |
90,471 | 219 | 90,690 | |||||||||
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| Loss from continuing operations before income taxes |
(140,729 | ) | (7,702 | ) | (148,431 | ) | ||||||
| Income tax benefit |
(6,223 | ) | — | (6,223 | ) | |||||||
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| Loss from continuing operations |
$ | (134,506 | ) | $ | (7,702 | ) | $ | (142,208 | ) | |||
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| Basic and diluted loss from continuing operations attributable to SemGroup per common share |
$ | (3.25 | ) | $ | (3.44 | ) | ||||||
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| (a) | Reflects the receipt of cash proceeds in return for assets contributed to NGL Energy. The amount shown herein was calculated based on the working capital as of June 30, 2011. Actual cash proceeds were based on working capital as of the date of the contribution. |
| (b) | Reflects the use of cash proceeds to reduce the principal balance on our term loans that were in place at June 30, 2011 and the related acceleration of amortization of debt issuance costs. |
| (c) | Reflects the contribution of assets and liabilities to NGL Energy. |
| (d) | Reflects the estimated fair value of our investment in NGL Energy received upon completion of the transaction. |
| (e) | Represents the pro forma gain resulting from the transaction, calculated as the excess of the estimated fair value of the consideration we received over the net book value of the assets and liabilities we contributed to NGL Energy, determined using the June 30, 2011 net book value of the assets. The actual gain recorded upon completion of the transaction will differ from the pro forma gain reflected in these unaudited condensed consolidated pro forma financial statements. |
| (f) | Reflects adjustments to remove the revenue and expenses directly attributable to the contributed assets, including revenue related to changes in the fair value of derivative instruments. No pro forma effect was given to potential reductions of indirect allocated general and administrative expense. No pro forma effect was given to the gain recorded upon completion of the transaction. |
| (g) | No pro forma effect was given to equity in earnings or losses of our acquired investment in NGL Energy, as our acquisition of the investment in NGL Energy did not meet the significance tests to require pro forma presentation. |
| (h) | Reflects pro forma interest savings resulting from the use of cash proceeds to reduce the outstanding principal balance on our term loan, using the 9% interest rate on the term loan that was in place until it was refinanced in June 2011. |
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