Attached files
| file | filename |
|---|---|
| 8-K - PROFORMA 8-K - MARTIN MIDSTREAM PARTNERS L.P. | form8-k.htm |
EXHIBIT 99.1
MARTIN MIDSTREAM PARTNERS L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial information is based upon the historical financial statements of the Partnership, adjusted to reflect the disposition of its East Texas and Northwest Louisiana natural gas gathering and processing assets, and certain other natural gas gathering and processing assets also owned by the Partnership, reported in the natural gas services segment (the “Prism Assets”).
The following unaudited pro forma condensed consolidated financial information of the Partnership should be read in conjunction with the related notes and with the historical consolidated financial statements of the Partnership and the related notes included in previous filings with the Securities and Exchange Commission. The unaudited pro forma condensed consolidated balance sheet reflects the disposition of its East Texas and Northwest Louisiana natural gas gathering and processing assets, and certain other natural gas gathering and processing assets also owned by the Partnership, as if it occurred on March 31, 2012, while the unaudited pro forma condensed consolidated statements of operations give effect to the disposition as if it occurred on January 1, 2009. The pro forma adjustments, described in the related notes, are based on the best available information and certain assumptions that the Partnership’s management believes are reasonable.
The unaudited pro forma condensed consolidated financial information is presented for illustrative purposes only and does not purport to be indicative of the operating results or financial position that would have occurred if the transaction described above had occurred as presented in such statements. In addition, future results may vary significantly from the results reflected in such statements. For example, this financial information does not reflect any potential earnings from the use of the proceeds from the disposition or reductions of previously allocated corporate costs.
MARTIN MIDSTREAM PARTNERS L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of March 31, 2012
(Dollars in thousands)
|
MMLP
Historical
|
Natural Gas
Gathering and
Processing Assets
|
Pro Forma
Consolidated
|
||||||||||||
|
Assets
|
||||||||||||||
| Cash | $ | 8,782 | $ | 273,300 |
(a)
|
$ | 46,095 | |||||||
| (235,987 | ) | (c) | ||||||||||||
|
Accounts and other receivables, less allowance for doubtful accounts of $2,979
|
112,137 | — | 112,137 | |||||||||||
|
Product exchange receivables
|
9,213 | — | 9,213 | |||||||||||
|
Inventories
|
81,487 | (2,213 | ) |
(b)
|
79,274 | |||||||||
|
Due from affiliates
|
9,923 | — | 9,923 | |||||||||||
|
Fair value of derivatives
|
675 | — |
|
675 | ||||||||||
|
Other current assets
|
2,001 | — | 2,001 | |||||||||||
|
Total current assets
|
224,218 | (35,100 | ) | 259,318 | ||||||||||
|
Property, plant and equipment, at cost
|
740,978 | (78,880 | ) |
(b)
|
662,098 | |||||||||
|
Accumulated depreciation
|
(244,023 | ) | 19,532 |
(b)
|
(224,491 | ) | ||||||||
|
Property, plant and equipment, net
|
496,955 | (59,348 | ) | 437,607 | ||||||||||
|
Goodwill
|
37,268 | (28,931 | ) |
(b)
|
8,337 | |||||||||
|
Investment in unconsolidated entities
|
177,428 | (102,881 | ) |
(b)
|
74,547 | |||||||||
|
Debt issuance costs, net
|
12,640 | — |
|
12,640 | ||||||||||
|
Fair value of derivatives
|
41 | — |
|
41 | ||||||||||
|
Other assets, ne
|
19,115 | (15,664 | ) |
(b)
|
3,451 | |||||||||
| $ | 967,665 | (171,724 | ) | $ | 795,941 | |||||||||
|
Liabilities and Partners’ Capital
|
||||||||||||||
|
Current installments of long-term debt and capital lease obligations
|
$ | 198 | $ | (198 | ) | (c) | $ | — | ||||||
|
Trade and other accounts payable
|
96,107 | 841 |
(d)
|
96,948 | ||||||||||
|
Product exchange payables
|
30,583 | — | 30,583 | |||||||||||
|
Due to affiliates
|
14,167 | — | 14,167 | |||||||||||
|
Income taxes payable
|
1,156 | 5,846 |
(d)
|
7,002 | ||||||||||
|
Fair value of derivatives
|
530 | — | 530 | |||||||||||
|
Other accrued liabilities
|
12,131 | — | 12,131 | |||||||||||
|
Total current liabilities
|
154,872 | 6,489 | 161,361 | |||||||||||
|
Long-term debt and capital leases, less current maturities
|
433,684 | (235,789 | ) |
(c)
|
197,895 | |||||||||
|
Deferred income taxes
|
7,487 | (7,524 | ) |
(d)
|
(37 | ) | ||||||||
|
Other long-term obligations
|
1,601 | (505 | ) |
(b)
|
1,096 | |||||||||
|
Total liabilities
|
597,644 | (237,329 | ) | 360,315 | ||||||||||
|
Partners’ capital
|
369,459 | 65,605 |
(d)
|
435,626 | ||||||||||
| 562 |
(e)
|
|||||||||||||
|
Accumulated other comprehensive income
|
562 | (562 | ) |
(e)
|
— | |||||||||
|
Total partners’ capital
|
370,021 | 65,605 | 435,626 | |||||||||||
|
|
||||||||||||||
| $ | 967,665 | $ | (171,724 | ) | $ | 795,941 | ||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial information.
MARTIN MIDSTREAM PARTNERS L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended March 31, 2012
|
MMLP
Historical
|
Natural Gas
Gathering and
Processing Assets
|
Pro Forma
Consolidated
|
||||||||||||
|
(Dollars in thousands, except per unit amounts)
|
||||||||||||||
|
Revenues:
|
||||||||||||||
|
Terminalling and storage
|
$ | 20,186 | $ | — | $ | 20,186 | ||||||||
|
Marine transportation
|
20,862 | — | 20,862 | |||||||||||
|
Sulfur services
|
2,926 | — | 2,926 | |||||||||||
|
Product sales:
|
||||||||||||||
|
Natural gas services
|
201,013 | (28,902 | ) |
(f)
|
172,111 | |||||||||
|
Sulfur services
|
71,626 | — | 71,626 | |||||||||||
|
Terminalling and storage
|
21,673 | — | 21,673 | |||||||||||
| 294,312 | (28,902 | ) | 265,410 | |||||||||||
|
Total revenues
|
338,286 | (28,902 | ) | 309,384 | ||||||||||
|
Costs and expenses:
|
||||||||||||||
|
Cost of products sold: (excluding depreciation and amortization)
|
||||||||||||||
|
Natural gas services
|
193,180 | (25,980 | ) |
(f)
|
167,200 | |||||||||
|
Sulfur services
|
54,960 | — | 54,960 | |||||||||||
|
Terminalling and storage
|
20,020 | — | 20,020 | |||||||||||
| 268,160 | (25,980 | ) | 242,180 | |||||||||||
|
Expenses:
|
||||||||||||||
|
Operating expenses
|
38,170 | (1,158 | ) |
(f)
|
37,012 | |||||||||
|
Selling, general and administrative
|
5,689 | (1,285 | ) |
(f)
|
4,404 | |||||||||
|
Depreciation and amortization
|
11,095 | (1,394 | ) |
(f)
|
9,701 | |||||||||
|
Total costs and expenses
|
323,114 | (29,817 | ) | 293,297 | ||||||||||
|
Other operating income
|
4 | (10 | ) |
(f)
|
(6 | ) | ||||||||
|
Operating income
|
15,176 | 905 | 16,081 | |||||||||||
|
Other income (expense):
|
||||||||||||||
|
Equity in earnings of unconsolidated entities
|
2,847 | (2,325 | ) |
(f)
|
522 | |||||||||
|
Interest expense
|
(7,207 | ) | 1,781 |
(g)
|
(5,426 | ) | ||||||||
|
Debt prepayment premium
|
(251 | ) | — | (251 | ) | |||||||||
|
Other, net
|
61 | — | 61 | |||||||||||
|
Total other income (expense)
|
(4,550 | ) | (544 | ) | (5,094 | ) | ||||||||
|
Net income before taxes
|
10,626 | 361 | 10,987 | |||||||||||
|
Income tax expense
|
(97 | ) | (168 | ) |
(f)
|
(265 | ) | |||||||
|
Net income
|
$ | 10,529 | $ | 193 | $ | 10,722 | ||||||||
|
|
||||||||||||||
|
General partner’s interest in net income
|
$ | 1,450 | $ | 1,615 | ||||||||||
|
Limited partners’ interest in net income
|
$ | 9,079 | $ | 9,107 | ||||||||||
|
Net income per limited partner unit - basic and diluted
|
$ | 0.40 | $ | 0.40 | ||||||||||
|
Weighted average limited partner units - basic
|
22,576,404 | 22,576,404 | ||||||||||||
|
Weighted average limited partner units - diluted
|
22,579,908 | 22,579,908 | ||||||||||||
|
|
See accompanying notes to unaudited pro forma condensed consolidated financial information.
|
MARTIN MIDSTREAM PARTNERS L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended March 31, 2011
|
MMLP
Historical
|
Natural Gas
Gathering and
Processing Assets
|
Pro Forma
Consolidated
|
||||||||||||
|
(Dollars in thousands, except per unit amounts)
|
||||||||||||||
|
Revenues:
|
||||||||||||||
|
Terminalling and storage
|
$ | 18,123 | $ | — | $ | 18,123 | ||||||||
|
Marine transportation
|
19,399 | — | 19,399 | |||||||||||
|
Sulfur services
|
2,850 | — | 2,850 | |||||||||||
|
Product sales:
|
||||||||||||||
|
Natural gas services
|
167,211 | (30,055 | ) |
(f)
|
137,156 | |||||||||
|
Sulfur services
|
56,908 | — | 56,908 | |||||||||||
|
Terminalling and storage
|
18,545 | — | 18,545 | |||||||||||
| 242,664 | (30,055 | ) | 212,609 | |||||||||||
|
Total revenues
|
283,036 | (30,055 | ) | 252,981 | ||||||||||
|
Costs and expenses:
|
||||||||||||||
|
Cost of products sold: (excluding depreciation and amortization)
|
||||||||||||||
|
Natural gas services
|
158,204 | (25,926 | ) |
(f)
|
132,278 | |||||||||
|
Sulfur services
|
44,442 | — | 44,442 | |||||||||||
|
Terminalling and storage
|
16,560 | — | 16,560 | |||||||||||
| 219,206 | (25,926 | ) | 193,280 | |||||||||||
|
Expenses:
|
||||||||||||||
|
Operating expenses
|
34,349 | (1,399 | ) |
(f)
|
32,950 | |||||||||
|
Selling, general and administrative
|
5,028 | (1,302 | ) |
(f)
|
3,726 | |||||||||
|
Depreciation and amortization
|
10,942 | (1,371 | ) |
(f)
|
9,571 | |||||||||
|
Total costs and expenses
|
269,525 | (29,998 | ) | 239,527 | ||||||||||
|
Other operating income
|
— | — | — | |||||||||||
|
Operating income
|
13,511 | (57 | ) | 13,454 | ||||||||||
|
Other income (expense):
|
||||||||||||||
|
Equity in earnings of unconsolidated entities
|
2,376 | (2,350 | ) |
(f)
|
26 | |||||||||
|
Interest expense
|
(8,402 | ) | 1,952 |
(g)
|
(6,450 | ) | ||||||||
|
Debt prepayment premium
|
— | — | — | |||||||||||
|
Other, net
|
60 | (1 | ) |
(f)
|
59 | |||||||||
|
Total other income (expense)
|
(5,966 | ) | (399 | ) | (6,365 | ) | ||||||||
|
Net income before taxes
|
7,545 | (456 | ) | 7,089 | ||||||||||
|
Income tax benefit (expense)
|
(223 | ) | 2 |
(f)
|
(221 | ) | ||||||||
|
Net income
|
$ | 7,322 | $ | (454 | ) | $ | 6,868 | |||||||
|
|
||||||||||||||
|
General partner’s interest in net income
|
$ | 1,224 | $ | 1,220 | ||||||||||
|
Limited partners’ interest in net income
|
$ | 5,580 | $ | 5,371 | ||||||||||
|
Net income per limited partner unit - basic and diluted
|
$ | 0.30 | $ | 0.29 | ||||||||||
|
Weighted average limited partner units - basic
|
18,760,861 | 18,760,861 | ||||||||||||
|
Weighted average limited partner units - diluted
|
18,761,611 | 18,761,611 | ||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial information.
MARTIN MIDSTREAM PARTNERS L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2011
|
MMLP
Historical
|
Natural Gas
Gathering and
Processing Assets
|
Pro Forma
Consolidated
|
||||||||||||
|
(Dollars in thousands, except per unit amounts)
|
||||||||||||||
|
Revenues:
|
||||||||||||||
|
Terminalling and storage
|
$ | 77,283 | $ | — | $ | 77,283 | ||||||||
|
Marine transportation
|
76,936 | — | 76,936 | |||||||||||
|
Sulfur services
|
11,400 | — | 11,400 | |||||||||||
|
Product sales:
|
||||||||||||||
|
Natural gas services
|
733,087 | (121,338 | ) |
(f)
|
611,749 | |||||||||
|
Sulfur services
|
263,644 | — | 263,644 | |||||||||||
|
Terminalling and storage
|
74,723 | — | 74,723 | |||||||||||
| 1,071,454 | (121,338 | ) | 950,116 | |||||||||||
|
Total revenues
|
1,237,073 | (121,338 | ) | 1,115,735 | ||||||||||
|
Costs and expenses:
|
||||||||||||||
|
Cost of products sold: (excluding depreciation and amortization)
|
||||||||||||||
|
Natural gas services
|
704,073 | (105,259 | ) |
(f)
|
598,814 | |||||||||
|
Sulfur services
|
219,697 | — | 219,697 | |||||||||||
|
Terminalling and storage
|
67,134 | — | 67,134 | |||||||||||
| 990,904 | (105,259 | ) | 885,645 | |||||||||||
|
Expenses:
|
||||||||||||||
|
Operating expenses
|
140,197 | (5,463 | ) |
(f)
|
134,734 | |||||||||
|
Selling, general and administrative
|
22,665 | (5,236 | ) |
(f)
|
17,429 | |||||||||
|
Depreciation and amortization
|
44,957 | (5,512 | ) |
(f)
|
39,445 | |||||||||
|
Total costs and expenses
|
1,198,723 | (121,470 | ) | 1,077,253 | ||||||||||
|
Other operating income
|
1,326 | — | 1,326 | |||||||||||
|
Operating income
|
39,676 | 132 | 39,808 | |||||||||||
|
Other income (expense):
|
||||||||||||||
|
Equity in earnings of unconsolidated entities
|
9,536 | (9,142 | ) |
(f)
|
394 | |||||||||
|
Interest expense
|
(24,518 | ) | 7,641 |
(g)
|
(16,877 | ) | ||||||||
|
Other, net
|
233 | — | 233 | |||||||||||
|
Total other income (expense)
|
(14,749 | ) | (1,501 | ) | (16,250 | ) | ||||||||
|
Net income before taxes
|
24,927 | (1,369 | ) | 23,558 | ||||||||||
|
Income tax expense
|
(585 | ) | (111 | ) |
(f)
|
(696 | ) | |||||||
|
Net income
|
$ | 24,342 | $ | (1,480 | ) | $ | 22,862 | |||||||
|
|
||||||||||||||
|
General partner’s interest in net income
|
$ | 5,289 | $ | 5,260 | ||||||||||
|
Limited partners’ interest in net income
|
$ | 17,945 | $ | 16,495 | ||||||||||
|
Net income per limited partner unit - basic and diluted
|
$ | 0.92 | $ | 0.84 | ||||||||||
|
Weighted average limited partner units - basic
|
19,545,427 | 19,545,427 | ||||||||||||
|
Weighted average limited partner units - diluted
|
19,546,705 | 19,546,705 | ||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial information.
MARTIN MIDSTREAM PARTNERS L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2010
|
MMLP
Historical
|
Natural Gas
Gathering and
Processing Assets
|
Pro Forma
Consolidated
|
||||||||||||
|
(Dollars in thousands, except per unit amounts)
|
||||||||||||||
|
Revenues:
|
||||||||||||||
|
Terminalling and storage
|
$ | 67,117 | $ | — | $ | 67,117 | ||||||||
|
Marine transportation
|
77,642 | — | 77,642 | |||||||||||
|
Sulfur services
|
— | — | — | |||||||||||
|
Product sales:
|
||||||||||||||
|
Natural gas services
|
554,482 | (112,477 | ) |
(f)
|
442,005 | |||||||||
|
Sulfur services
|
165,078 | — | 165,078 | |||||||||||
|
Terminalling and storage
|
47,799 | — | 47,799 | |||||||||||
| 767,359 | (112,477 | ) | 654,882 | |||||||||||
|
Total revenues
|
912,118 | (112,477 | ) | 799,641 | ||||||||||
|
Costs and expenses:
|
||||||||||||||
|
Cost of products sold: (excluding depreciation and amortization)
|
||||||||||||||
|
Natural gas services
|
527,232 | (99,575 | ) |
(f)
|
427,657 | |||||||||
|
Sulfur services
|
122,121 | — | 122,121 | |||||||||||
|
Terminalling and storage
|
44,549 | — | 44,549 | |||||||||||
| 693,902 | (99,575 | ) | 594,327 | |||||||||||
|
Expenses:
|
||||||||||||||
|
Operating expenses
|
116,402 | (4,479 | ) |
(f)
|
111,923 | |||||||||
|
Selling, general and administrative
|
21,118 | (6,007 | ) |
(f)
|
15,111 | |||||||||
|
Depreciation and amortization
|
40,656 | (4,452 | ) |
(f)
|
36,204 | |||||||||
|
Total costs and expenses
|
872,078 | (114,513 | ) | 757,565 | ||||||||||
|
Other operating income
|
136 | 92 |
(f)
|
228 | ||||||||||
|
Operating income
|
40,176 | 2,128 | 42,304 | |||||||||||
|
Other income (expense):
|
||||||||||||||
|
Equity in earnings of unconsolidated entities
|
9,792 | (9,831 | ) |
(f)
|
(39 | ) | ||||||||
|
Interest expense
|
(33,716 | ) | — | (33,716 | ) | |||||||||
|
Other, net
|
287 | — | 287 | |||||||||||
|
Total other income (expense)
|
(23,637 | ) | (9,831 | ) | (33,468 | ) | ||||||||
|
Net income before taxes
|
16,539 | (7,703 | ) | 8,836 | ||||||||||
|
Income tax expense
|
(517 | ) | (397 | ) |
(f)
|
(914 | ) | |||||||
|
Net income
|
$ | 16,022 | $ | (8,100 | ) | $ | 7,922 | |||||||
|
|
||||||||||||||
|
General partner’s interest in net income
|
$ | 3,869 | $ | 3,709 | ||||||||||
|
Limited partners’ interest in net income
|
$ | 11,045 | $ | 3,105 | ||||||||||
|
Net income per limited partner unit - basic and diluted
|
$ | 0.63 | $ | 0.18 | ||||||||||
|
Weighted average limited partner units - basic
|
17,525,089 | 17,525,089 | ||||||||||||
|
Weighted average limited partner units - diluted
|
17,525,089 | 17,525,089 | ||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial information.
MARTIN MIDSTREAM PARTNERS L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2009
|
MMLP
Historical
|
Natural Gas
Gathering and
Processing Assets
|
Pro Forma
Consolidated
|
||||||||||
|
(Dollars in thousands, except per unit amounts)
|
||||||||||||
|
Revenues:
|
||||||||||||
|
Terminalling and storage
|
$ | 69,710 | $ | — | $ | 69,710 | ||||||
|
Marine transportation
|
68,480 | — | 68,480 | |||||||||
|
Sulfur services
|
— | — | — | |||||||||
|
Product sales
|
||||||||||||
|
Natural gas services
|
408,982 | (71,141 | ) |
(f)
|
337,841 | |||||||
|
Sulfur services
|
79,629 | — | 79,629 | |||||||||
|
Terminalling and storage
|
35,584 | — | 35,584 | |||||||||
| 524,195 | (71,141 | ) | 453,054 | |||||||||
|
Total revenues
|
662,385 | (71,141 | ) | 591,244 | ||||||||
|
Costs and expenses:
|
||||||||||||
|
Cost of products sold: (excluding depreciation and amortization)
|
||||||||||||
|
Natural gas services
|
382,542 | (59,152 | ) |
(f)
|
323,390 | |||||||
|
Sulfur services
|
43,386 | — | 43,386 | |||||||||
|
Terminalling and storage
|
31,331 | — | 31,331 | |||||||||
| 457,259 | (59,152 | ) | 398,107 | |||||||||
|
Expenses:
|
||||||||||||
|
Operating expenses
|
117,438 | (5,537 | ) |
(f)
|
111,901 | |||||||
|
Selling, general and administrative
|
19,775 | (5,225 | ) |
(f)
|
14,550 | |||||||
|
Depreciation and amortization
|
39,506 | (3,963 | ) |
(f)
|
35,543 | |||||||
|
Total costs and expenses
|
633,978 | (73,877 | ) | 560,101 | ||||||||
|
Other operating income
|
6,013 | 12 |
(f)
|
6,025 | ||||||||
|
Operating income
|
34,420 | 2,748 | 37,168 | |||||||||
|
Other income (expense):
|
||||||||||||
|
Equity in earnings of unconsolidated entities
|
7,044 | (6,303 | ) |
(f)
|
741 | |||||||
|
Interest expense
|
(18,995 | ) |
|
(18,995 | ) | |||||||
|
Other, net
|
326 | — | 326 | |||||||||
|
Total other income (expense)
|
(11,625 | ) | (6,303 | ) | (17,928 | ) | ||||||
|
Net income before taxes
|
22,795 | (3,555 | ) | 19,240 | ||||||||
|
Income tax expense
|
(592 | ) | (972 | ) |
(f)
|
(1,564 | ) | |||||
|
Net income
|
$ | 22,203 | $ | (4,527 | ) | $ | 17,676 | |||||
|
|
||||||||||||
|
General partner’s interest in net income
|
$ | 3,249 | $ | 3,192 | ||||||||
|
Limited partners’ interest in net income
|
$ | 17,179 | $ | 12,709 | ||||||||
|
Net income per limited partner unit - basic and diluted
|
$ | 1.17 | $ | 0.87 | ||||||||
|
Weighted average limited partner units - basic
|
14,680,807 | 14,680,807 | ||||||||||
|
Weighted average limited partner units - diluted
|
14,684,775 | 14,684,775 | ||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial information.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
|
(a)
|
To reflect the Partnership's net cash proceeds of $273.3 million, subject to potential post-closing adjustments and transaction costs, from the disposition of the Prism Assets.
|
|
(b)
|
To reflect the disposition of the Prism Assets' specified balance sheet accounts (primarily fixed assets and working capital accounts) as set forth in the asset purchase agreement dated June 18, 2012, the final amount of which will be determined subsequent to closing.
|
|
(c)
|
To reflect the application of the Partnership's net proceeds from the disposition of the Prism Assets to reduce long-term debt.
|
|
(d)
|
To reflect estimated gain, net of tax, at the time of sale of approximately $65.6 million from the disposition of the Prism Assets. The adjustments also reflect an estimated tax benefit of $1.7 million and estimated transaction costs of $0.8 million.
|
|
Proceeds
|
$ | 273,300 | ||
| Less: | ||||
| Carrying value of assets sold | 208,532 | |||
|
Transaction costs
|
841 | |||
| 63,927 | ||||
|
Tax benefit
|
1,678 | |||
|
Estimated gain
|
$ | 65,605 |
|
(e)
|
To recognize the gains in accumulated other comprehensive income in the results of operations for all of the Partnership's derivative contracts, as the purpose of these instruments was to hedge commodity risk exposure associated with the operation of the Prism Assets.
|
|
(f)
|
To reflect the removal of the operating results of the Prism Assets as if the transaction occurred on January 1, 2009. The operations of a partnership are generally not subject to income tax, however one subsidiary whose assets are included in the transaction is subject to income taxes due to its corporate structure. Therefore, the tax adjustments above reflect this subsidiary’s federal income tax in addition to the effects of the Texas margin tax on all Prism Assets.
|
|
(g)
|
To reflect the reduction in interest expense due to repayment of borrowings under the revolving loan facility, notes payable, and capital lease obligations using a portion of the net cash proceeds from the sale of Prism Assets. The remaining net proceeds from the sale of the Prism Assets are assumed to be retained in cash. No adjustments were made to interest expense for the years ended December 31, 2010 and 2009.
|