UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): June 1, 2016 (June 1, 2016)
MEMORIAL RESOURCE DEVELOPMENT CORP.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 001-36490 | 46-4710769 | ||
| (State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 500 Dallas Street, Suite 1800 Houston, Texas |
77002 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (713) 588-8300
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| x | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.01. Completion of Acquisition or Disposition of Assets.
On June 1, 2016, Memorial Resource Development Corp. (the “Company”) sold Memorial Production Partners GP LLC (“MEMP GP”), the general partner of Memorial Production Partners LP (“MEMP”), Beta Operating Company, LLC and MEMP Services LLC (collectively, the “Disposition Entities”) to MEMP for total proceeds of $0.75 million. This disposition qualifies as a discontinued operation since MEMP was a separate reportable business segment.
Prior to this sale, the Company controlled MEMP through its ownership of MEMP GP. The sale price was determined by negotiation between the Company, on one hand, and the conflicts committee of the board of directors of MEMP GP, on the other hand.
Item 8.01. Other Events.
The information provided in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
The unaudited pro forma consolidated balance sheet of the Company as of March 31, 2016 and the unaudited pro forma consolidated and combined statement of operations for the: (i) three months ended March 31, 2016; (ii) three months ended March 31, 2015; and (iii) years ended December 31, 2015, 2014, and 2013 are included in Exhibit 99.1 to this report and incorporated herein by reference.
(d) Exhibits.
| Exhibit Number |
Description | |
| 99.1 |
Unaudited Pro Forma Condensed Consolidated and Combined Financial Statements of Memorial Resource Development Corp. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MEMORIAL RESOURCE DEVELOPMENT CORP. | ||||||
| Date: June 1, 2016 |
By: | /s/ Kyle N. Roane | ||||
| Kyle N. Roane | ||||||
| Senior Vice President, General Counsel & Corporate Secretary | ||||||
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 |
Unaudited Pro Forma Condensed Consolidated and Combined Financial Statements of Memorial Resource Development Corp. | |
Exhibit 99.1
MEMORIAL RESOURCE DEVELOPMENT CORP.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
Introduction
On June 1, 2016, Memorial Resource Development Corp. (the “Company”) sold Memorial Production Partners GP LLC (“MEMP GP”), the general partner of Memorial Production Partners LP (“MEMP”), Beta Operating Company, LLC and MEMP Services LLC (collectively, the “Disposition Entities”) to MEMP for total proceeds of $0.75 million. This disposition qualifies as a discontinued operation since MEMP was a reportable segment.
The unaudited pro forma consolidated and combined financial data of the Company was derived from our historical consolidated and combined financial statements. The unaudited pro forma consolidated balance sheet assumes the disposition of the Disposition Entities occurred on March 31, 2016. The unaudited pro forma consolidated and combined statements of operations give effect to the disposition of the Disposition Entities as if the disposition occurred on January 1, 2013. The following unaudited pro forma consolidated and combined financial information should be read in conjunction with our historical financial statements and accompanying notes.
The pro forma adjustments are based on the best information available and assumptions that management believes are factually supportable and reasonable; however, such adjustments are subject to change. In addition, such adjustments are estimates. The unaudited pro forma consolidated and combined information is for illustrative and informational purposes only and is not intended to reflect what our consolidated position and results of operations would have been had the disposition occurred on the dates indicated and is not necessarily indicative of our future consolidated financial position and results of operations.
The pro forma adjustments remove all of the Disposition Entities’ consolidated assets, liabilities and results of operations (including MEMP and its subsidiaries) and also gives effect to adjustments to reflect the cash proceeds from the sale of the Disposition Entities and intercompany balances which were previously eliminated in consolidation.
MEMORIAL RESOURCE DEVELOPMENT CORP.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2016
(In thousands, except per share amounts)
| Historical | Disposition Entities |
Pro Forma | ||||||||||
| Revenues: |
||||||||||||
| Oil & natural gas sales |
$ | 141,701 | $ | (60,623 | ) | $ | 81,078 | |||||
| Other revenues |
243 | (243 | ) | — | ||||||||
|
|
|
|
|
|
|
|||||||
| Total revenues |
141,944 | (60,866 | ) | 81,078 | ||||||||
|
|
|
|
|
|
|
|||||||
| Costs and expenses: |
||||||||||||
| Lease operating |
42,410 | (35,696 | ) | 6,714 | ||||||||
| Gathering, processing, and transportation |
31,150 | (9,209 | ) | 21,941 | ||||||||
| Gathering, processing, and transportation – affiliate |
14,187 | — | 14,187 | |||||||||
| Exploration |
2,568 | (122 | ) | 2,446 | ||||||||
| Taxes other than income |
6,872 | (4,008 | ) | 2,864 | ||||||||
| Depreciation, depletion, and amortization |
104,228 | (44,429 | ) | 59,799 | ||||||||
| Impairment of proved oil and natural gas properties |
8,342 | (8,342 | ) | — | ||||||||
| Incentive unit compensation expense |
(21,761 | ) | — | (21,761 | ) | |||||||
| General and administrative |
24,657 | (13,524 | ) | 11,133 | ||||||||
| Accretion of asset retirement obligations |
2,847 | (2,707 | ) | 140 | ||||||||
| (Gain) loss on commodity derivative instruments |
(88,187 | ) | 51,745 | (36,442 | ) | |||||||
| (Gain) loss on sale of properties |
(46 | ) | 96 | 50 | ||||||||
| Other, net |
119 | (119 | ) | — | ||||||||
|
|
|
|
|
|
|
|||||||
| Total costs and expenses |
127,386 | (66,315 | ) | 61,071 | ||||||||
|
|
|
|
|
|
|
|||||||
| Operating income (loss) |
14,558 | 5,449 | 20,007 | |||||||||
| Other income (expense): |
||||||||||||
| Interest expense, net |
(43,909 | ) | 32,552 | (11,357 | ) | |||||||
| Other, net |
4 | — | 4 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total other income (expense) |
(43,905 | ) | 32,552 | (11,353 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from continuing operations before income taxes |
(29,347 | ) | 38,001 | 8,654 | ||||||||
| Income tax benefit (expense) |
(3,033 | ) | 96 | (2,937 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Net income (loss) from continuing operations |
$ | (32,380 | ) | $ | 38,097 | $ | 5,717 | |||||
|
|
|
|
|
|
|
|||||||
| Earnings per common share from continuing operations: |
||||||||||||
| Basic |
$ | 0.03 | $ | 0.03 | ||||||||
|
|
|
|
|
|||||||||
| Diluted |
$ | 0.03 | $ | 0.03 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common and common equivalent shares outstanding: |
||||||||||||
| Basic |
203,665 | 203,665 | ||||||||||
|
|
|
|
|
|||||||||
| Diluted |
203,665 | 203,665 | ||||||||||
|
|
|
|
|
|||||||||
MEMORIAL RESOURCE DEVELOPMENT CORP.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2015
(In thousands, except per share amounts)
| Historical | Disposition Entities |
Pro Forma | ||||||||||
| Revenues: |
||||||||||||
| Oil & natural gas sales |
$ | 178,972 | $ | (91,949 | ) | $ | 87,023 | |||||
| Other revenues |
869 | (869 | ) | — | ||||||||
|
|
|
|
|
|
|
|||||||
| Total revenues |
179,841 | (92,818 | ) | 87,023 | ||||||||
|
|
|
|
|
|
|
|||||||
| Costs and expenses: |
||||||||||||
| Lease operating |
45,700 | (40,478 | ) | 5,222 | ||||||||
| Gathering, processing, and transportation |
23,429 | (8,666 | ) | 14,763 | ||||||||
| Exploration |
816 | (90 | ) | 726 | ||||||||
| Taxes other than income |
9,430 | (6,655 | ) | 2,775 | ||||||||
| Depreciation, depletion, and amortization |
91,798 | (51,266 | ) | 40,532 | ||||||||
| Impairment of proved oil and natural gas properties |
251,347 | (251,347 | ) | — | ||||||||
| Incentive unit compensation expense |
10,224 | — | 10,224 | |||||||||
| General and administrative |
27,487 | (14,511 | ) | 12,976 | ||||||||
| Accretion of asset retirement obligations |
1,757 | (1,634 | ) | 123 | ||||||||
| (Gain) loss on commodity derivative instruments |
(253,649 | ) | 145,459 | (108,190 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Total costs and expenses |
208,339 | (229,188 | ) | (20,849 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Operating income (loss) |
(28,498 | ) | 136,370 | 107,872 | ||||||||
| Other income (expense): |
||||||||||||
| Interest expense, net |
(38,574 | ) | 28,818 | (9,756 | ) | |||||||
| Other, net |
111 | (160 | ) | (49 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Total other income (expense) |
(38,463 | ) | 28,658 | (9,805 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from continuing operations before income taxes |
(66,961 | ) | 165,028 | 98,067 | ||||||||
| Income tax benefit (expense) |
(45,188 | ) | (2,370 | ) | (47,558 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net income (loss) from continuing operations |
$ | (112,149 | ) | $ | 162,658 | $ | 50,509 | |||||
|
|
|
|
|
|
|
|||||||
| Earnings per common share from continuing operations: |
||||||||||||
| Basic |
$ | 0.24 | $ | 0.24 | ||||||||
|
|
|
|
|
|||||||||
| Diluted |
$ | 0.24 | $ | 0.24 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common and common equivalent shares outstanding: |
||||||||||||
| Basic |
190,705 | 190,705 | ||||||||||
|
|
|
|
|
|||||||||
| Diluted |
190,705 | 190,705 | ||||||||||
|
|
|
|
|
|||||||||
MEMORIAL RESOURCE DEVELOPMENT CORP.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2015
(In thousands, except per share amounts)
| Historical | Disposition Entities |
Pro Forma | ||||||||||
| Revenues: |
||||||||||||
| Oil & natural gas sales |
$ | 729,464 | $ | (355,422 | ) | $ | 374,042 | |||||
| Other revenues |
2,725 | (2,725 | ) | — | ||||||||
|
|
|
|
|
|
|
|||||||
| Total revenues |
732,189 | (358,147 | ) | 374,042 | ||||||||
|
|
|
|
|
|
|
|||||||
| Costs and expenses: |
||||||||||||
| Lease operating |
193,102 | (168,199 | ) | 24,903 | ||||||||
| Gathering, processing, and transportation |
107,493 | (34,939 | ) | 72,554 | ||||||||
| Gathering, processing, and transportation – affiliate |
25,403 | — | 25,403 | |||||||||
| Exploration |
11,286 | (2,317 | ) | 8,969 | ||||||||
| Taxes other than income |
40,724 | (25,828 | ) | 14,896 | ||||||||
| Depreciation, depletion, and amortization |
384,556 | (195,814 | ) | 188,742 | ||||||||
| Impairment of proved oil and natural gas properties |
616,784 | (616,784 | ) | — | ||||||||
| Incentive unit compensation expense |
35,142 | — | 35,142 | |||||||||
| General and administrative |
102,959 | (56,671 | ) | 46,288 | ||||||||
| Accretion of asset retirement obligations |
7,542 | (7,125 | ) | 417 | ||||||||
| (Gain) loss on commodity derivative instruments |
(744,139 | ) | 462,890 | (281,249 | ) | |||||||
| (Gain) loss on sale of properties |
(3,045 | ) | 2,998 | (47 | ) | |||||||
| Other, net |
(665 | ) | 665 | — | ||||||||
|
|
|
|
|
|
|
|||||||
| Total costs and expenses |
777,142 | (641,124 | ) | 136,018 | ||||||||
|
|
|
|
|
|
|
|||||||
| Operating income (loss) |
(44,953 | ) | 282,977 | 238,024 | ||||||||
| Other income (expense): |
||||||||||||
| Interest expense, net |
(154,128 | ) | 114,732 | (39,396 | ) | |||||||
| Other, net |
(979 | ) | (43 | ) | (1,022 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Total other income (expense) |
(155,107 | ) | 114,689 | (40,418 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from continuing operations before income taxes |
(200,060 | ) | 397,666 | 197,606 | ||||||||
| Income tax benefit (expense) |
(97,830 | ) | (2,175 | ) | (100,005 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net income (loss) from continuing operations |
$ | (297,890 | ) | $ | 395,491 | $ | 97,601 | |||||
|
|
|
|
|
|
|
|||||||
| Earnings per common share from continuing operations: |
||||||||||||
| Basic |
$ | 0.49 | $ | 0.49 | ||||||||
|
|
|
|
|
|||||||||
| Diluted |
$ | 0.49 | $ | 0.49 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common and common equivalent shares outstanding: |
||||||||||||
| Basic |
193,698 | 193,698 | ||||||||||
|
|
|
|
|
|||||||||
| Diluted |
193,698 | 193,698 | ||||||||||
|
|
|
|
|
|||||||||
MEMORIAL RESOURCE DEVELOPMENT CORP.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2014
(In thousands, except per share amounts)
| Historical | Disposition Entities |
Pro Forma | ||||||||||
| Revenues: |
||||||||||||
| Oil & natural gas sales |
$ | 970,747 | $ | (561,677 | ) | $ | 409,070 | |||||
| Other revenues |
4,378 | (4,366 | ) | 12 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total revenues |
975,125 | (566,043 | ) | 409,082 | ||||||||
|
|
|
|
|
|
|
|||||||
| Costs and expenses: |
||||||||||||
| Lease operating |
161,303 | (143,733 | ) | 17,570 | ||||||||
| Gathering, processing, and transportation |
77,848 | (31,892 | ) | 45,956 | ||||||||
| Exploration |
16,603 | (2,750 | ) | 13,853 | ||||||||
| Taxes other than income |
45,751 | (33,141 | ) | 12,610 | ||||||||
| Depreciation, depletion, and amortization |
314,193 | (185,955 | ) | 128,238 | ||||||||
| Impairment of proved oil and natural gas properties |
432,116 | (407,540 | ) | 24,576 | ||||||||
| Incentive unit compensation expense |
943,949 | — | 943,949 | |||||||||
| General and administrative |
87,673 | (49,124 | ) | 38,549 | ||||||||
| Accretion of asset retirement obligations |
6,306 | (5,773 | ) | 533 | ||||||||
| (Gain) loss on commodity derivative instruments |
(749,988 | ) | 492,254 | (257,734 | ) | |||||||
| (Gain) loss on sale of properties |
3,057 | — | 3,057 | |||||||||
| Other, net |
(12 | ) | 11 | (1 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Total costs and expenses |
1,338,799 | (367,643 | ) | 971,156 | ||||||||
|
|
|
|
|
|
|
|||||||
| Operating income (loss) |
(363,674 | ) | (198,400 | ) | (562,074 | ) | ||||||
| Other income (expense): |
||||||||||||
| Interest expense, net |
(133,833 | ) | 83,550 | (50,283 | ) | |||||||
| Loss on extinguishment of debt |
(37,248 | ) | — | (37,248 | ) | |||||||
| Other, net |
(337 | ) | 657 | 320 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total other income (expense) |
(171,418 | ) | 84,207 | (87,211 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from continuing operations before income taxes |
(535,092 | ) | (114,193 | ) | (649,285 | ) | ||||||
| Income tax benefit (expense) |
(100,971 | ) | (1,421 | ) | (102,392 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net income (loss) from continuing operations |
$ | (636,063 | ) | $ | (115,614 | ) | $ | (751,677 | ) | |||
|
|
|
|
|
|
|
|||||||
| Earnings per common share from continuing operations: |
||||||||||||
| Basic |
$ | (4.08 | ) | $ | (4.08 | ) | ||||||
|
|
|
|
|
|||||||||
| Diluted |
$ | (4.08 | ) | $ | (4.08 | ) | ||||||
|
|
|
|
|
|||||||||
| Weighted average common and common equivalent shares outstanding: |
||||||||||||
| Basic |
192,498 | 192,498 | ||||||||||
|
|
|
|
|
|||||||||
| Diluted |
192,498 | 192,498 | ||||||||||
|
|
|
|
|
|||||||||
MEMORIAL RESOURCE DEVELOPMENT CORP.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2013
(In thousands, except per share amounts)
| Historical | Disposition Entities |
Pro Forma | ||||||||||
| Revenues: |
||||||||||||
| Oil & natural gas sales |
$ | 610,992 | $ | (391,440 | ) | $ | 219,552 | |||||
| Other revenues |
3,075 | (3,075 | ) | — | ||||||||
|
|
|
|
|
|
|
|||||||
| Total revenues |
614,067 | (394,515 | ) | 219,552 | ||||||||
|
|
|
|
|
|
|
|||||||
| Costs and expenses: |
||||||||||||
| Lease operating |
111,798 | (94,591 | ) | 17,207 | ||||||||
| Gathering, processing, and transportation |
42,721 | (25,055 | ) | 17,666 | ||||||||
| Exploration |
2,356 | (1,322 | ) | 1,034 | ||||||||
| Taxes other than income |
27,146 | (18,447 | ) | 8,699 | ||||||||
| Depreciation, depletion, and amortization |
184,717 | (113,814 | ) | 70,903 | ||||||||
| Impairment of proved oil and natural gas properties |
6,600 | (4,072 | ) | 2,528 | ||||||||
| Incentive unit compensation expense |
43,279 | (8,282 | ) | 34,997 | ||||||||
| General and administrative |
82,079 | (46,665 | ) | 35,414 | ||||||||
| Accretion of asset retirement obligations |
5,581 | (4,988 | ) | 593 | ||||||||
| (Gain) loss on commodity derivative instruments |
(29,294 | ) | 26,133 | (3,161 | ) | |||||||
| (Gain) loss on sale of properties |
(85,621 | ) | 2,848 | (82,773 | ) | |||||||
| Other, net |
649 | (647 | ) | 2 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total costs and expenses |
392,011 | (288,902 | ) | 103,109 | ||||||||
|
|
|
|
|
|
|
|||||||
| Operating income (loss) |
222,056 | (105,613 | ) | 116,443 | ||||||||
| Other income (expense): |
||||||||||||
| Interest expense, net |
(69,250 | ) | 44,302 | (24,948 | ) | |||||||
| Other, net |
145 | (2 | ) | 143 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total other income (expense) |
(69,105 | ) | 44,300 | (24,805 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from continuing operations before income taxes |
152,951 | (61,313 | ) | 91,638 | ||||||||
| Income tax benefit (expense) |
(1,619 | ) | 308 | (1,311 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Net income (loss) from continuing operations |
$ | 151,332 | $ | (61,005 | ) | $ | 90,327 | |||||
|
|
|
|
|
|
|
|||||||
| Earnings per common share from continuing operations: |
||||||||||||
| Basic |
$ | — | $ | — | ||||||||
|
|
|
|
|
|||||||||
| Diluted |
$ | — | $ | — | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common and common equivalent shares outstanding: |
||||||||||||
| Basic |
— | — | ||||||||||
|
|
|
|
|
|||||||||
| Diluted |
— | — | ||||||||||
|
|
|
|
|
|||||||||
MEMORIAL RESOURCE DEVELOPMENT CORP.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2016
(In thousands, except per share amounts)
| Historical | Disposition Entities |
Pro Forma Adjustments |
Pro Forma | |||||||||||||
| ASSETS |
||||||||||||||||
| Current assets: |
||||||||||||||||
| Cash and cash equivalents |
$ | 2,075 | $ | (2,075 | ) | $ | 750 | (a) | $ | 750 | ||||||
| Accounts receivable |
112,724 | (46,457 | ) | 9,746 | (b) | 76,013 | ||||||||||
| Short-term derivative instruments |
472,956 | (259,854 | ) | — | 213,102 | |||||||||||
| Other financial instruments |
35,358 | — | — | 35,358 | ||||||||||||
| Prepaid expenses and other current assets |
11,443 | (8,276 | ) | — | 3,167 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total current assets |
634,556 | (316,662 | ) | 10,496 | 328,390 | |||||||||||
| Property and equipment, at cost: |
||||||||||||||||
| Oil and natural gas properties, successful efforts method |
6,181,292 | (3,845,982 | ) | — | 2,335,310 | |||||||||||
| Other |
26,837 | (3,843 | ) | — | 22,994 | |||||||||||
| Accumulated depreciation, depletion and impairment |
(2,430,065 | ) | 1,931,882 | — | (498,183 | ) | ||||||||||
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|
|
|
|
|
|
|
|
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| Property and equipment, net |
3,778,064 | (1,917,943 | ) | — | 1,860,121 | |||||||||||
| Long-term derivative instruments |
517,045 | (442,616 | ) | — | 74,429 | |||||||||||
| Restricted investments |
154,766 | (154,766 | ) | — | — | |||||||||||
| Other long-term assets |
12,482 | (4,519 | ) | — | 7,963 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total assets |
$ | 5,096,913 | $ | (2,836,506 | ) | $ | 10,496 | $ | 2,270,903 | |||||||
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|
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|
|
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|
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| LIABILITIES AND EQUITY |
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| Current liabilities: |
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| Accounts payable |
$ | 27,711 | $ | (7,586 | ) | $ | — | $ | 20,125 | |||||||
| Accounts payable – affiliates |
9,443 | (9,655 | ) | 9,746 | (b) | 9,534 | ||||||||||
| Revenues payable |
58,572 | (26,590 | ) | — | 31,982 | |||||||||||
| Accrued liabilities |
133,998 | (61,744 | ) | — | 72,254 | |||||||||||
| Short-term derivative instruments |
2,098 | (2,098 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total current liabilities |
231,822 | (107,673 | ) | 9,746 | 133,895 | |||||||||||
| Long-term debt – MRD Segment |
1,113,483 | — | — | 1,113,483 | ||||||||||||
| Long-term debt – MEMP Segment |
1,957,984 | (1,957,984 | ) | — | — | |||||||||||
| Asset retirement obligations |
175,495 | (164,964 | ) | — | 10,531 | |||||||||||
| Long-term derivative instruments |
2,161 | (2,161 | ) | — | — | |||||||||||
| Deferred tax liabilities |
198,320 | (2,158 | ) | — | 196,162 | |||||||||||
| Other long-term liabilities |
6,689 | — | — | 6,689 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total liabilities |
3,685,954 | (2,234,940 | ) | 9,746 | 1,460,760 | |||||||||||
| Commitments and contingencies |
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| Equity: |
||||||||||||||||
| Stockholders’ equity (deficit): |
||||||||||||||||
| Preferred stock, $.01 par value: 50,000,000 shares authorized; no shares issued and outstanding |
— | — | — | — | ||||||||||||
| Common stock, $.01 par value: 600,000,000 shares authorized; 205,293,743 shares issued and outstanding at December 31, 2015; 193,435,414 shares issued and outstanding at December 31, 2014 |
2,053 | — | — | 2,053 | ||||||||||||
| Additional paid-in capital |
1,542,340 | — | 568 | (c) | 1,542,908 | |||||||||||
| Accumulated earnings (deficit) |
(734,769 | ) | (799 | ) | 750 | (a) | (734,818 | ) | ||||||||
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|
|
|
|
|
|
|
|
|||||||||
| Total stockholders’ equity |
809,624 | (799 | ) | 1,318 | 810,143 | |||||||||||
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|
|
|
|
|
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| Noncontrolling interests |
601,335 | (600,767 | ) | (568 | ) (c) | — | ||||||||||
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|
|
|
|
|
|
|
|||||||||
| Total equity |
1,410,959 | (601,566 | ) | 750 | 810,143 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total liabilities and equity |
$ | 5,096,913 | $ | (2,836,506 | ) | $ | 10,496 | $ | 2,270,903 | |||||||
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MEMORIAL RESOURCE DEVELOPMENT CORP.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
On June 1, 2016, Memorial Resource Development Corp. (the “Company”) sold Memorial Production Partners GP LLC (“MEMP GP”), the general partner of Memorial Production Partners LP (“MEMP”), Beta Operating Company, LLC and MEMP Services LLC (collectively, the “Disposition Entities”) to MEMP for total proceeds of $0.75 million. This disposition qualifies as a discontinued operation since MEMP was a reportable segment.
The unaudited pro forma consolidated and combined financial data of the Company was derived from our historical consolidated and combined financial statements. The unaudited pro forma consolidated balance sheet assumes the disposition of the Disposition Entities occurred on March 31, 2016. The unaudited pro forma consolidated and combined statements of operations give effect to the disposition of the Disposition Entities as if the disposition occurred on January 1, 2013. The following unaudited pro forma consolidated and combined financial information should be read in conjunction with our historical financial statements and accompanying notes.
The pro forma adjustments are based on the best information available and assumptions that management believes are factually supportable and reasonable; however, such adjustments are subject to change. In addition, such adjustments are estimates. The unaudited pro forma consolidated and combined information is for illustrative and informational purposes only and is not intended to reflect what our consolidated position and results of operations would have been had the disposition occurred on the dates indicated and is not necessarily indicative of our future consolidated financial position and results of operations.
The pro forma adjustments remove all of the Disposition Entities’ consolidated assets, liabilities and results of operations (including MEMP and its subsidiaries) and also gives effect to adjustments to reflect the cash proceeds from the sale of the Disposition Entities and intercompany balances which were previously eliminated in consolidation.
Note 2. Pro Forma Adjustments and Assumptions
Unaudited Pro Forma Consolidated Balance Sheet
The following adjustments were made in the preparation of the unaudited pro forma consolidated balance sheet as of March 31, 2016:
| (a) | Pro forma adjustment to reflect the cash proceeds from the sale of the Disposition Entities. |
| (b) | Pro forma adjustment to reflect intercompany balances which previously eliminated in consolidation as of March 31, 2016. |
| (c) | Pro forma adjustment to reflect reclassification of amounts between equity categories. |