Attached files
file | filename |
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8-K/A - FORM 8-K/A - Rose Rock Midstream, L.P. | d476144d8ka.htm |
EX-99.4 - EX-99.4 - Rose Rock Midstream, L.P. | d476144dex994.htm |
EX-23.1 - EX-23.1 - Rose Rock Midstream, L.P. | d476144dex231.htm |
EX-99.2 - EX-99.2 - Rose Rock Midstream, L.P. | d476144dex992.htm |
EX-99.3 - EX-99.3 - Rose Rock Midstream, L.P. | d476144dex993.htm |
EX-23.2 - EX-23.2 - Rose Rock Midstream, L.P. | d476144dex232.htm |
EXHIBIT 99.5
ROSE ROCK MIDSTREAM, L.P.
Unaudited Pro Forma Condensed Consolidated Financial Statements
On January 11, 2013, Rose Rock Midstream, L.P. (RRMS) purchased from SemGroup Corporation (SemGroup) a one-third interest in SemCrude Pipeline, L.L.C., formerly a wholly owned subsidiary of SemGroup, in exchange for cash, limited partner common units and an increase in the capital account of the general partner, pursuant to a Contribution Agreement entered into on January 8, 2013. The accompanying unaudited pro forma condensed consolidated financial statements of RRMS 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 SemGroup as if it had occurred on September 30, 2012. The accompanying unaudited pro forma condensed consolidated statements of operations reflect the transaction with SemGroup as if it had occurred on January 1, 2011. The terms we, our, us, and similar language used in these unaudited pro forma condensed consolidated financial statements refer to RRMS 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 September 30, 2012 and our annual report on Form 10-K for the year ended December 31, 2011. 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 pro forma condensed consolidated financial statements reflect estimates and assumptions that we believe to be reasonable.
ROSE ROCK MIDSTREAM, L.P.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
as of September 30, 2012
(in thousands, except unit amounts)
as of September 30, 2012 | ||||||||||||
Historical | Pro Forma adjustments |
Pro Forma | ||||||||||
ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | 13,498 | $ | | $ | 13,498 | ||||||
Accounts receivable |
205,315 | | 205,315 | |||||||||
Receivable from affiliates |
117 | | 117 | |||||||||
Inventories |
29,181 | | 29,181 | |||||||||
Other current assets |
1,531 | | 1,531 | |||||||||
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Total current assets |
249,642 | | 249,642 | |||||||||
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Property, plant and equipment (net of accumulated depreciation of $31,545 at September 30, 2012) |
285,244 | | 285,244 | |||||||||
Investment in affiliates |
| 46,655 | (a) | 46,655 | ||||||||
Other assets, net |
2,665 | | 2,665 | |||||||||
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Total assets |
$ | 537,551 | $ | 46,655 | $ | 584,206 | ||||||
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LIABILITIES AND PARTNERS CAPITAL |
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Current liabilities: |
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Accounts payable |
$ | 204,144 | | $ | 204,144 | |||||||
Payable to affiliates |
10,657 | | 10,657 | |||||||||
Accrued liabilities |
9,642 | | 9,642 | |||||||||
Other current liabilities |
2,688 | | 2,688 | |||||||||
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Total current liabilities |
227,131 | | 227,131 | |||||||||
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Long-term debt |
69 | 130,285 | (b) | 130,354 | ||||||||
Partners capital: |
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Common unitspublic (9,000,000 units issued and outstanding at September 30, 2012) |
129,910 | (31,121 | ) (c) | 98,789 | ||||||||
Common unitsSemGroup (2,889,709 units issued and outstanding at September 30, 2012) |
38,165 | 15,426 | (c) | 53,591 | ||||||||
Subordinated unitsSemGroup (8,389,709 units issued and outstanding at September 30, 2012) |
136,074 | (84,252 | ) (c) | 51,822 | ||||||||
Class A unitsSemGroup (1,250,000 units issued and outstanding at September 30, 2012) |
| 17,990 | (c) | 17,990 | ||||||||
General partner |
6,202 | (1,673 | ) (c) | 4,529 | ||||||||
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Total partners capital |
310,351 | (83,630 | ) | 226,721 | ||||||||
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Total liabilities and partners capital |
$ | 537,551 | $ | 46,655 | $ | 584,206 | ||||||
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2
ROSE ROCK MIDSTREAM, L.P.
Unaudited Pro Forma Condensed Consolidated Statement of Income
Nine Months Ended September 30, 2012
(in thousands, except per unit amounts)
Nine Months Ended September 30, 2012 | ||||||||||||
Historical | Pro Forma adjustments |
Pro Forma | ||||||||||
Revenues, including revenues from affiliates: |
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Product |
$ | 435,814 | $ | | $ | 435,814 | ||||||
Service |
32,932 | | 32,932 | |||||||||
Other |
(59 | ) | | (59 | ) | |||||||
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Total revenues |
468,687 | | 468,687 | |||||||||
Expenses, including expenses from affiliates: |
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Costs of products sold, exclusive of depreciation and amortization shown below |
412,847 | | 412,847 | |||||||||
Operating |
17,146 | | 17,146 | |||||||||
General and administrative |
8,830 | | 8,830 | |||||||||
Depreciation and amortization |
9,032 | | 9,032 | |||||||||
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Total expenses |
447,855 | | 447,855 | |||||||||
Earnings from equity method investments |
| 9,517 | (d) | 9,517 | ||||||||
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Operating income |
20,832 | 9,517 | 30,349 | |||||||||
Other expenses: |
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Interest expense |
1,407 | 4,886 | (e) | 6,293 | ||||||||
Other expense |
72 | | 72 | |||||||||
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Total other expenses |
1,479 | 4,886 | 6,365 | |||||||||
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Net income |
$ | 19,353 | $ | 4,631 | $ | 23,984 | ||||||
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Allocation of net income used for earnings per unit calculation: |
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Net income allocated to general partner |
$ | 387 | $ | 93 | (f) | $ | 480 | |||||
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Net income allocated to common unitholders |
$ | 9,483 | $ | 2,491 | (f) | $ | 11,974 | |||||
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Net income allocated to subordinated unitholders |
$ | 9,483 | $ | 1,800 | (f) | $ | 11,283 | |||||
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Net income allocated to Class A unitholders |
$ | | $ | 247 | (f) | $ | 247 | |||||
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Earnings per limited partner unit: |
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Common unit (basic and diluted) |
$ | 1.13 | $ | | $ | 1.01 | ||||||
Subordinated unit (basic and diluted) |
$ | 1.13 | $ | | $ | 1.34 | ||||||
Class A unit (basic and diluted) |
$ | | $ | | $ | 0.20 | ||||||
Basic weighted average number of limited partner units outstanding: |
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Common units |
8,390 | 3,500 | (g) | 11,890 | ||||||||
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Subordinated units |
8,390 | | 8,390 | |||||||||
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Class A units |
| 1,250 | (g) | 1,250 | ||||||||
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Diluted weighted average number of limited partner units outstanding: |
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Common units |
8,404 | 3,500 | (g) | 11,904 | ||||||||
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Subordinated units |
8,390 | | 8,390 | |||||||||
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Class A units |
| 1,250 | (g) | 1,250 | ||||||||
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3
ROSE ROCK MIDSTREAM, L.P.
Unaudited Pro Forma Condensed Consolidated Statement of Income
Year Ended December 31, 2011
(in thousands, except per unit amounts)
Year Ended December 31, 2011 | ||||||||||||
Historical | Pro Forma adjustments |
Pro Forma | ||||||||||
Revenues, including revenues from affiliates: |
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Product |
$ | 395,301 | $ | | $ | 395,301 | ||||||
Service |
35,801 | | 35,801 | |||||||||
Other |
219 | | 219 | |||||||||
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Total revenues |
431,321 | | 431,321 | |||||||||
Expenses, including expenses from affiliates: |
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Costs of products sold, exclusive of depreciation and amortization shown below |
366,265 | | 366,265 | |||||||||
Operating |
18,973 | | 18,973 | |||||||||
General and administrative |
9,843 | | 9,843 | |||||||||
Depreciation and amortization |
11,379 | | 11,379 | |||||||||
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Total expenses |
406,460 | | 406,460 | |||||||||
Earnings from equity method investments |
| 5,001 | (h) | 5,001 | ||||||||
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Operating income |
24,861 | 5,001 | 29,862 | |||||||||
Other expenses (income): |
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Interest expense |
1,823 | 6,515 | (e) | 8,338 | ||||||||
Other income, net |
(197 | ) | | (197 | ) | |||||||
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Total other expenses, net |
1,626 | 6,515 | 8,141 | |||||||||
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Net income (loss) |
$ | 23,235 | $ | (1,514 | ) | $ | 21,721 | |||||
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Allocation of net income used for earnings per unit calculation: |
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Net income (loss) |
$ | 23,235 | $ | (1,514 | ) | $ | 21,721 | |||||
Less: Net income (loss) prior to initial public offering on December 14, 2011 |
22,265 | (1,443 | ) | 20,822 | ||||||||
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Net income (loss) subsequent to initial public offering on December 14, 2011 |
$ | 970 | $ | (71 | )(i) | $ | 899 | |||||
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Net income (loss) allocated to general partner |
$ | 19 | $ | (1 | )(f) | $ | 18 | |||||
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Net income (loss) allocated to common unitholders |
$ | 475.5 | $ | (46 | )(f) | $ | 429.5 | |||||
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Net income (loss) allocated to subordinated unitholders |
$ | 475.5 | $ | (10 | )(f) | $ | 465.5 | |||||
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Net income (loss) allocated to Class A unitholders |
| $ | (14 | )(f) | $ | (14 | ) | |||||
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Earnings per limited partner unit: |
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Common unit (basic and diluted) |
$ | 0.06 | $ | | $ | 0.04 | ||||||
Subordinated unit (basic and diluted) |
$ | 0.06 | $ | | $ | 0.06 | ||||||
Class A unit (basic and diluted) |
$ | | $ | | $ | (0.01 | ) | |||||
Basic and diluted weighted average number of limited partner units outstanding: |
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Common units |
8,390 | 3,500 | (g) | 11,890 | ||||||||
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Subordinated units |
8,390 | | 8,390 | |||||||||
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Class A units |
| 1,250 | (g) | 1,250 | ||||||||
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4
These pro forma financial statements do not include the impact of $3.2 million of transaction related costs.
(a) Represents one-third of the book value of equity of SemCrude Pipeline, L.L.C. at September 30, 2012. The sale of the one-third interest in SemCrude Pipeline, L.L.C. is a transaction between SemGroup and its consolidated subsidiary, RRMS, and is accounted for as a transaction between entities under common control. Therefore, the assets received by RRMS are recorded at the parent company book value and any excess purchase price is treated as an equity transaction.
(b) RRMS borrowed $130.3 million on its revolving credit facility to fund the purchase.
(c) Partners capital accounts reflect the issuance of 2 million limited partner common units for $59.3 million to third-parties, 1.5 million limited partner common units for $44.4 million to SemGroup, 1.25 million Class A units for $30.5 million ($29.60 per unit discounted for the expected forbearance period) to SemGroup and a general partner contribution of $2.7 million to maintain its 2% ownership interest and a reduction of equity of $220.6 million shared pro-rata by the owners, which represents the excess of the purchase price of the one-third interest in SemCrude Pipeline, L.L.C. in excess of the book value at September 30, 2012.
(d) Represents one-third of the net income of SemCrude Pipeline, L.L.C. for the nine months ended September 30, 2012, which included a $3.5 million gain on disposal. The impact of the gain on equity earnings is an increase of $1.2 million. The gain represents the receipt of additional proceeds in 2012 related to the September 2010 disposal of a portion of the SemCrude Pipeline, L.L.C. equity interest in White Cliffs Pipeline, L.L.C.
(e) Interest expense adjustment assumes that debt incurred in the purchase of the one-third interest in SemCrude Pipeline, L.L.C. was outstanding since January 1, 2011 at a rate of 5%, based on the initial borrowing rate at close of the transaction.
(f) Under the two-class method, net income related to declared distributions on current period earnings are first allocated to their respective classes of equity and the remaining earnings are then allocated based on ownership. Adjustments to allocation of net income do not assume any change in the historical amount of distributions declared in either the amount or the units receiving distributions. The remaining amount of pro forma net income has been allocated, after reduction for the allocation of historical distributions declared, based on the pro forma class and number of units outstanding.
The following table shows distributions declared and paid (in thousands, except for per unit amounts):
Quarter Ended | SemGroup | Common Units - Public |
Total Distributions |
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Record Date | Payment Date | Distribution per Unit |
General Partner |
Incentive Distri-butions |
Common Units |
Subord- Units |
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December 31, 2011 |
February 3, 2012 | February 13, 2012 | $ | 0.0670 | $ | 23 | | $ | 93 | $ | 561 | $ | 470 | $ | 1,147 | |||||||||||||||||||||
March 31, 2012 |
May 7, 2012 | May 15, 2012 | $ | 0.3725 | $ | 128 | | $ | 517 | $ | 3,125 | $ | 2,607 | $ | 6,377 | |||||||||||||||||||||
June 30, 2012 |
August 6, 2012 | August 14, 2012 | $ | 0.3825 | $ | 131 | | $ | 532 | $ | 3,209 | $ | 2,678 | $ | 6,549 | |||||||||||||||||||||
September 30, 2012 |
November 5, 2012 | November 14, 2012 | $ | 0.3925 | $ | 134 | | $ | 545 | $ | 3,293 | $ | 2,748 | $ | 6,720 |
(g) Adjustment reflects the impact to the weighted average number of shares outstanding for basic and diluted earnings per unit based on the number of common limited partner and Class A units issued in connection with the transaction.
(h) Represents one-third of the net income of SemCrude Pipeline, L.L.C for the twelve months ended December 31, 2011.
(i) On December 14, 2011, Rose Rock Midstream, L.P. completed an initial public offering (IPO) in which it sold common units representing limited partner interests. Historical earnings per limited partner unit are based on net income for the period from December 15, 2011 (the day following the closing of our IPO) through December 31, 2011. For the calculation of pro forma earnings per unit, the net income attributable to the transaction was pro-rated for 17 days.
5