Delaware | 1-6407 | 75-0571592 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation) | File Number) | Identification Number) |
¨ | 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)) |
• | Unaudited pro forma condensed consolidated balance sheet as of June 30, 2013; |
• | Unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2013; |
• | Unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2012; and |
• | Notes to unaudited pro forma condensed consolidated financial statements. |
Exhibit No. | Description | |
99.1 | Unaudited Pro Forma Condensed Consolidated Financial Statements |
Exhibit No. | Description | |
99.1 | Unaudited Pro Forma Condensed Consolidated Financial Statements |
• | The ETE Merger and Citrus Transaction was completed in March 2012. |
• | The SUGS Contribution to Regency Energy Partners LP (“Regency”) was completed in April 2013. |
• | The Local Distribution Company (“LDC”) Dispositions were announced in December 2012, and the sale of Missouri Gas Energy (“MGE”) was completed effective September 1, 2013. |
Pro Forma Adjustments | ||||||||||||
Southern Union Historical | LDC Dispositions | Southern Union Pro Forma | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS: | ||||||||||||
Cash and cash equivalents | $ | 152 | $ | 1,015 | a | $ | 1,167 | |||||
Accounts receivable, net | 69 | — | 69 | |||||||||
Accounts receivable from related companies | 102 | — | 102 | |||||||||
Inventories | 138 | — | 138 | |||||||||
Exchanges receivable | 9 | — | 9 | |||||||||
Current assets held for sale | 102 | (102 | ) | a | — | |||||||
Prepayments and other current assets | 138 | — | 138 | |||||||||
Total current assets | 710 | 913 | 1,623 | |||||||||
PROPERTY, PLANT AND EQUIPMENT, net | 4,073 | — | 4,073 | |||||||||
NON-CURRENT ASSETS HELD FOR SALE | 1,000 | (1,000 | ) | a | — | |||||||
DEFERRED CHARGES | 63 | — | 63 | |||||||||
UNCONSOLIDATED INVESTMENTS | 1,557 | — | 1,557 | |||||||||
GOODWILL | 2,025 | — | 2,025 | |||||||||
OTHER NON-CURRENT ASSETS, net | 60 | — | 60 | |||||||||
Total assets | $ | 9,488 | $ | (87 | ) | $ | 9,401 |
Pro Forma Adjustments | ||||||||||||
Southern Union Historical | LDC Dispositions | Southern Union Pro Forma | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||
CURRENT LIABILITIES: | ||||||||||||
Current maturities of long-term debt | $ | 253 | $ | — | $ | 253 | ||||||
Accounts payable and accrued liabilities | 34 | — | 34 | |||||||||
Accounts payable to related companies | 147 | — | 147 | |||||||||
Federal, state and local taxes payable | 20 | 240 | a | 260 | ||||||||
Accrued interest | 17 | — | 17 | |||||||||
Exchanges payable | 123 | — | 123 | |||||||||
Derivative instruments | 18 | — | 18 | |||||||||
Current liabilities held for sale | 75 | (75 | ) | a | — | |||||||
Other | 35 | — | 35 | |||||||||
Total current liabilities | 722 | 165 | 887 | |||||||||
LONG-TERM DEBT, less current maturities | 1,713 | — | 1,713 | |||||||||
NOTE PAYABLE TO RELATED PARTY | 1,090 | — | 1,090 | |||||||||
DEFERRED CREDITS | 289 | — | 289 | |||||||||
DEFERRED INCOME TAXES | 1,839 | (206 | ) | a | 1,633 | |||||||
NON-CURRENT LIABILITIES HELD FOR SALE | 140 | (140 | ) | a | — | |||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||
STOCKHOLDER’S EQUITY: | ||||||||||||
Premium on capital stock | 3,947 | — | 3,947 | |||||||||
Accumulated other comprehensive loss | (20 | ) | — | (20 | ) | |||||||
Retained earnings (accumulated deficit) | (232 | ) | 94 | a | (138 | ) | ||||||
Total stockholder’s equity | 3,695 | 94 | 3,789 | |||||||||
Total liabilities and stockholder’s equity | $ | 9,488 | $ | (87 | ) | $ | 9,401 |
Southern Union Historical | |||||||||||||||
Six Months Ended June 30, 2013 | Deconsolidation of SUGS Historical Four Months Ended April 30, 2013 | Pro forma adjustments | Southern Union Pro Forma Six Months Ended June 30, 2013 | ||||||||||||
OPERATING REVENUES | $ | 709 | $ | (271 | ) | $ | — | $ | 438 | ||||||
OPERATING EXPENSES: | |||||||||||||||
Cost of products sold and operating expenses | 206 | (223 | ) | — | (17 | ) | |||||||||
Operating, maintenance and general | 208 | (55 | ) | — | 153 | ||||||||||
Depreciation and amortization | 106 | (21 | ) | — | 85 | ||||||||||
Taxes, other than on income and revenues | 19 | (2 | ) | — | 17 | ||||||||||
Total operating expenses | 539 | (301 | ) | — | 238 | ||||||||||
OPERATING INCOME | 170 | 30 | — | 200 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense | (45 | ) | — | 5 | b | (40 | ) | ||||||||
Earnings from unconsolidated investments | 6 | 1 | 3 | b | 10 | ||||||||||
Other, net | (1 | ) | — | — | (1 | ) | |||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE | 130 | 31 | 8 | 169 | |||||||||||
Income tax expense | 85 | 10 | 3 | g | 98 | ||||||||||
INCOME FROM CONTINUING OPERATIONS | $ | 45 | $ | 21 | $ | 5 | $ | 71 |
Southern Union Historical | ||||||||||||||||||||
Successor Period from Acquisition (March 26, 2012) to December 31, 2012 | Predecessor Period from January 1, 2012 to March 25, 2012 | Deconsolidation of SUGS Historical Year Ended December 31, 2012 | Pro forma adjustments | Southern Union Pro Forma Year Ended December 31, 2012 | ||||||||||||||||
OPERATING REVENUES | $ | 1,263 | $ | 443 | $ | (909 | ) | $ | — | $ | 797 | |||||||||
OPERATING EXPENSES: | ||||||||||||||||||||
Cost of products sold and operating expenses | 521 | 197 | (714 | ) | — | 4 | ||||||||||||||
Operating, maintenance and general | 340 | 105 | (119 | ) | (80 | ) | c | 246 | ||||||||||||
Depreciation and amortization | 179 | 49 | (68 | ) | 8 | d | 168 | |||||||||||||
Taxes, other than on income and revenues | 37 | 11 | (9 | ) | — | 39 | ||||||||||||||
Total operating expenses | 1,077 | 362 | (910 | ) | (72 | ) | 457 | |||||||||||||
OPERATING INCOME | 186 | 81 | 1 | 72 | 340 | |||||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||||
Interest expense | (131 | ) | (50 | ) | — | 9 | e | (147 | ) | |||||||||||
25 | b | |||||||||||||||||||
Earnings (losses) from unconsolidated investments | (7 | ) | 16 | 9 | 2 | b | 11 | |||||||||||||
(9 | ) | f | ||||||||||||||||||
Other, net | 2 | (2 | ) | — | — | — | ||||||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE | 50 | 45 | 10 | 99 | 204 | |||||||||||||||
Income tax expense (benefit) | 39 | 12 | (3 | ) | 11 | g | 59 | |||||||||||||
INCOME FROM CONTINUING OPERATIONS | $ | 11 | $ | 33 | $ | 13 | $ | 88 | $ | 145 |
• | Southern Union Successor. Southern Union’s results for the period from March 26, 2012 through December 31, 2012. |
• | Southern Union Predecessor. Southern Union’s results for the period from January 1, 2012 through March 25, 2012 included the earnings from the investment in Citrus. |
• | SUGS Historical. The results of SUGS for the full twelve months ended December 31, 2012 and the period from January 1, 2013 to April 30, 2013 have been reflected as “deconsolidated” above. SUGS’ stand-alone historical financial statements include two distinct periods for January 1, 2012 through March 25, 2012 (predecessor) and March 26, 2012 through December 31, 2012 (successor); however, those two periods have been combined in the SUGS historical column reflected for ease of understanding. |
a. | To record the pro forma deconsolidation of Southern Union’s LDCs in connection with the expected closing of the sale transaction announced in December 2012, the receipt of the cash proceeds from the sale and related pro forma tax impacts. |
b. | To record the pro forma impacts of the contribution of SUGS to Regency and the consideration received including (i) Southern Union’s receipt of Regency common units and Regency Class F units, (ii) use of cash proceeds from the transaction of $570 million to pay down long-term debt and reduce related interest expense and (iii) to record Southern Union’s equity in earnings of affiliates. |
c. | To eliminate merger-related costs incurred by Southern Union in the ETE Merger and Citrus Transaction because such costs would not have a continuing impact on results of operations. |
d. | To record incremental depreciation and amortization expense related to estimated fair values recorded in Southern Union purchase accounting. Depreciation expense is estimated based on a weighted average useful life of 24 years. |
e. | To adjust amortization included in interest expense to (i) reverse historical amortization of financing costs and fair value adjustments related to debt and (ii) record amortization related to the pro forma adjustment of Southern Union’s debt to fair value. |
f. | To reverse the equity in earnings of Citrus Corp. recorded in Southern Union’s historical statement of operations and record the pro forma equity in earnings of ETP as a result of the ETE Merger and Citrus Transaction. |
g. | To record the pro forma income tax impact related to Southern Union pro forma adjustments to pre-tax income. |