-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L8MYrJvYnndt0UKw0oHTHc1A0zy35jkkJdJLzfK6CV3Zf5VrssnJOjpOYy+rCBH1 Qa9CHZgI9SaB9xZpEWaixg== 0000054502-08-000006.txt : 20080222 0000054502-08-000006.hdr.sgml : 20080222 20080222165730 ACCESSION NUMBER: 0000054502-08-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20080215 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080222 DATE AS OF CHANGE: 20080222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KNIGHT INC. CENTRAL INDEX KEY: 0000054502 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [4923] IRS NUMBER: 480290000 STATE OF INCORPORATION: KS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06446 FILM NUMBER: 08637123 BUSINESS ADDRESS: STREET 1: 500 DALLAS STREET 2: SUITE 1000 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 713-369-9000 MAIL ADDRESS: STREET 1: 500 DALLAS STREET 2: SUITE 1000 CITY: HOUSTON STATE: TX ZIP: 77002 FORMER COMPANY: FORMER CONFORMED NAME: KINDER MORGAN INC DATE OF NAME CHANGE: 19991105 FORMER COMPANY: FORMER CONFORMED NAME: K N ENERGY INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: KN ENERGY INC DATE OF NAME CHANGE: 19920430 8-K 1 knight021508_8k.htm KNIGHT INC. FORM 8-K knight021508_8k.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K/A
(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  February 15, 2008

KNIGHT INC.
(Exact name of registrant as specified in its charter)


Kansas
(State or other jurisdiction
of incorporation)
1-6446
(Commission
File Number)
48-0290000
(I.R.S. Employer
Identification No.)

500 Dallas Street, Suite 1000
Houston, Texas 77002
(Address of principal executive offices, including zip code)
 
713-369-9000
 
(Registrant’s telephone number, including area code)
 
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:
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  
o
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.
 
As previously disclosed in its Current Report on Form 8-K filed on February 15, 2008, on February 15, 2008, Knight Inc. completed the sale of 80% of the ownership interests of MidCon, a wholly owned subsidiary of Knight, pursuant to the purchase agreement with Myria Acquisition Inc., a Delaware corporation, previously disclosed in Knight Inc.’s Current Report on Form 8-K filed on December 11, 2007. Total cash received for the disposition was approximately $5.9 billion. We expect net proceeds after tax will be approximately $5.3 billion, virtually all of which has been or will be used to pay down debt.
 
This Form 8-K/A amends the Current Report on Form 8-K referred to above to include the pro forma financial information required by Item 9.01(b) of Form 8-K. The Unaudited Pro Forma Condensed Consolidated Balance Sheet of Knight Inc. as of September 30, 2007, Unaudited Pro Forma Condensed Consolidated Statements of Operations for the year ended December 31, 2006 (Predecessor Company), the four months ended September 30, 2007 (Successor Company) and the five months ended May 31, 2007 (Predecessor Company) and Notes thereto are attached hereto as Exhibit 99.1 and incorporated herein by reference.
 
Item 9.01.  Financial Statements and Exhibits.
 
(b)
Pro Forma Financial Information
  
  
 
The Unaudited Pro Forma Condensed Consolidated Balance Sheet of Knight Inc. as of September 30, 2007, Unaudited Pro Forma Condensed Consolidated Statements of Operations for the year ended December 31, 2006 (Predecessor Company), the four months ended September 30, 2007 (Successor Company) and the five months ended May 31, 2007 (Predecessor Company) and Notes thereto are attached hereto as Exhibit 99.1 and incorporated herein by reference.
  
(d)
Exhibits.
  
  
 
99.1
Unaudited Pro Forma Condensed Consolidated Balance Sheet of Knight Inc. as of September 30, 2007, Unaudited Pro Forma Condensed Consolidated Statements of Operations for the year ended December 31, 2006 (Predecessor Company), the four months ended September 30, 2007 (Successor Company) and the five months ended May 31, 2007 (Predecessor Company) and Notes thereto.

 

 
2
 


 
S I G N A T U R E

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
KNIGHT INC.
  
  
Dated:  February 22, 2008
By:
/s/ Kimberly A. Dang
   
Kimberly A. Dang
Vice President and Chief Financial Officer

 
3
 

EXHIBIT INDEX
 

Exhibit
Number
 
Description
  
  
99.1
Unaudited Pro Forma Condensed Consolidated Balance Sheet of Knight Inc. as of September 30, 2007, Unaudited Pro Forma Condensed Consolidated Statements of Operations for the year ended December 31, 2006 (Predecessor Company), the four months ended September 30, 2007 (Successor Company) and the five months ended May 31, 2007 (Predecessor Company) and Notes thereto.

 

 
 
 

EX-99.1 2 knightex991.htm KNIGHT INC. EXHIBIT 99.1 knightex991.htm

Exhibit 99.1

Knight Inc.
Unaudited Pro Forma Condensed Consolidated Financial Statements

The following unaudited pro forma condensed consolidated financial statements of Knight Inc. (the “Company”) are presented to give effect to the sale of an 80% ownership interest (the “sale”) in our Natural Gas Pipeline Company of America business segment, consisting of MidCon Corp. and its subsidiaries and Kinder Morgan Illinois Pipeline LLC, which together are referred to as “MidCon” in this report and which are each our wholly owned subsidiaries, to Myria Acquisition Inc. (“Myria”), which was completed on February 15, 2008. Myria is comprised of a syndicate of investors led by Babcock and Brown, an international investment and specialized fund and asset management group.
 
On May 30, 2007, all of our outstanding common stock was acquired by a group of investors including Richard D. Kinder, our Chairman and Chief Executive Officer. This acquisition of our common stock and related transactions are referred to in this report as the Going Private transaction. This acquisition was a “business combination” for accounting purposes, requiring that these investors, pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations, record the assets acquired and liabilities assumed at their fair values as of the acquisition date, resulting in a new basis of accounting.
 
As a result of the application of the Securities and Exchange Commission rules and guidance regarding “push down” accounting, the investors’ new accounting basis in our assets and liabilities is reflected in our financial statements effective with the closing of the Going Private transaction. Therefore, in the accompanying unaudited pro forma condensed consolidated financial statements, transactions and balances prior to the closing of the Going Private transaction (the amounts labeled “Predecessor Company”) reflect the historical accounting basis in our assets and liabilities, while the amounts subsequent to the closing (labeled “Successor Company”) reflect the push down of the investors’ new basis to our financial statements. The Going Private transaction closed on May 30, 2007. While the Going Private transaction closed on May 30, 2007, for convenience, the Predecessor Company is assumed to end on May 31, 2007 and the Successor Company is assumed to begin on June 1, 2007. The results for the two day period, from May 30 to May 31, 2007, are not material to any of the periods presented.
 
The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2006 (Predecessor Company) has been derived from our consolidated statement of operations for the year ended December 31, 2006. The unaudited pro forma condensed consolidated statement of operations should be read together with our consolidated statement of operations and the notes thereto included in our Form 8-K filed May 14, 2007.
 
The unaudited pro forma condensed consolidated balance sheet as of September 30, 2007 and the unaudited pro forma condensed consolidated statements of operations for the four months ended September 30, 2007 (Successor Company) and the five months ended May 31, 2007 (Predecessor Company) have been derived from our interim consolidated financial statements included in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007 and should be read in conjunction with those financial statements, including the notes thereto.
 
The unaudited pro forma balance sheet is presented as if the sale occurred on September 30, 2007, and the unaudited pro forma statements of operations present our operations as if the sale had occurred on January 1, 2006.
 

 
1
 

The pro forma adjustments described in the accompanying notes are based on estimates and various assumptions that the Company believes are reasonable under the circumstances. The pro forma financial information included herein is provided for informational purposes only and is not necessarily indicative of what the actual financial position and results of operations of the Company would have been had the transaction actually occurred on the dates indicated.
 

 
2
 

KNIGHT INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2007
(In millions)
 
 
As Reported
  
Pro Forma
Adjustments(a)
  
Pro Forma
ASSETS:
                      
Current Assets:
                      
Cash and Cash Equivalents
$
139.3
    
$
5,861.7
    
$
6,001.0
  
Assets Held for Sale
  
11.7
      
-
      
11.7
  
Other
  
1,222.4
      
(228.9
)
    
993.5
  
  
  
1,373.4
      
5,632.8
      
7,006.2
  
   
                      
Notes Receivable – Related Parties
  
90.1
      
-
      
90.1
  
Other Investments
  
950.1
      
(15.1
)
    
935.0
  
Investment in MidCon
  
-
      
718.9
 (b)
  
718.9
  
Goodwill
  
13,702.2
      
(4,308.4
)
    
9,393.8
  
Other Intangibles, Net
  
257.6
      
-
      
257.6
  
Property, Plant and Equipment, Net
  
15,509.0
      
(1,634.3
)
    
13,874.7
  
Assets Held for Sale, Non-current
  
223.2
      
-
      
223.2
  
Deferred Charges and Other Assets
  
378.7
      
(23.1
)
    
355.6
  
Total Assets                                                                                            
$
32,484.3
    
$
370.8
    
$
32,855.1
  
  
                      
LIABILITIES AND STOCKHOLDERS’ EQUITY:
                      
Current Liabilities:
                      
Current Maturities of Long-term Debt
$
68.6
    
$
-
    
$
68.6
  
Notes Payable
  
1,003.4
      
-
      
1,003.4
  
Accounts Payable – Trade
  
844.9
      
(32.1
)
    
812.8
  
Liabilities Held for Sale
  
4.6
      
-
      
4.6
  
Other
  
1,025.0
      
473.6
      
1,498.6
  
  
  
2,946.5
      
441.5
      
3,388.0
  
  
                      
Deferred Income Taxes
  
2,189.9
      
(36.4
)
    
2,153.5
  
Liabilities Held for Sale, Non-current
  
2.3
      
-
      
2.3
  
Other Liabilities and Deferred Credits
  
973.4
      
(23.4
)
    
950.0
  
   
3,165.6
      
(59.8
)
    
3,105.8
  
  
                      
Long-term Debt                                                                                            
  
15,185.4
      
-
      
15,185.4
  
  
                      
Minority Interests in Equity of Subsidiaries
  
3,289.3
      
(1.9
)
    
3,287.4
  
  
                      
Stockholders’ Equity:
                      
Common Stock-
                      
Authorized – 100 Shares, Par Value $0.01 Per Share; Outstanding – 100 Shares
  
-
      
-
      
-
  
Additional Paid-in Capital
  
7,831.7
      
-
      
7,831.7
  
Retained Earnings
  
115.9
      
-
      
115.9
  
Accumulated Other Comprehensive Loss
  
(50.1
)
    
(9.0
)
    
(59.1
)
Total Stockholders’ Equity
  
7,897.5
      
(9.0
)
    
7,888.5
  
  
                      
Total Liabilities and Stockholders’ Equity
$
32,484.3
    
$
370.8
    
$
32,855.1
  

 
3
 


KNIGHT INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE FOUR MONTHS ENDED SEPTEMBER 30, 2007
(In millions)


 
Successor Company
 
As Reported
  
Pro Forma
Adjustments (c)
  
Pro Forma
Operating Revenues
$
3,545.9
    
$
(413.2
)
  
$
3,132.7
  
  
                      
Operating Costs and Expenses:
                      
Gas Purchases and Other Costs of Sales
  
2,040.0
      
(137.5
)
    
1,902.5
  
Operations and Maintenance
  
420.6
      
(48.5
)
    
372.1
  
General and Administrative
  
151.1
      
(15.7
)
    
135.4
  
Depreciation, Depletion and Amortization
  
276.3
      
(23.7
)
    
252.6
  
Other Operating Expenses, Net
  
55.7
      
(10.4
)
    
45.3
  
  
                      
Total Operating Costs and Expenses
  
2,943.7
      
(235.8
)
    
2,707.9
  
  
                      
Operating Income
  
602.2
      
(177.4
)
    
424.8
  
  
                      
Other Income and (Expenses):
                      
Equity in Earnings of Equity Investments
  
35.9
      
(0.7
)
    
35.2
  
Equity in Earnings of MidCon
  
-
      
18.5
 (d)
    
18.5
  
Interest Expense, Net
  
(340.1
)
    
(2.6
)
    
(342.7
)
Interest Expense – Deferrable Interest Debentures
  
(7.3
)
    
-
      
(7.3
)
Minority Interests
  
(86.9
)
    
-
      
(86.9
)
Other, Net
  
10.1
      
28.6
      
38.7
  
  
                      
Total Other Income and (Expenses)
  
(388.3
)
    
43.8
      
(344.5
)
  
                      
Income from Continuing Operations before Income Taxes
  
213.9
      
(133.6
)
    
80.3
  
Income Taxes
  
95.9
      
(46.1
)
    
49.8
  
Income from Continuing Operations
$
118.0
    
$
(87.5
)
  
$
30.5
  


 
4
 


KNIGHT INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE FIVE MONTHS ENDED MAY 31, 2007
(In millions)


 
Predecessor Company
 
As Reported
  
Pro Forma
Adjustments (c)
  
Pro Forma
Operating Revenues
$
4,165.1
    
$
(426.5
)
  
$
3,738.6
  
  
                      
Operating Costs and Expenses:
                      
Gas Purchases and Other Costs of Sales
  
2,490.4
      
(99.3
)
    
2,391.1
  
Operations and Maintenance
  
476.1
      
(46.6
)
    
429.5
  
General and Administrative
  
283.6
      
(29.7
)
    
253.9
  
Depreciation, Depletion and Amortization
  
261.0
      
(45.3
)
    
215.7
  
Other Operating Expenses, Net
  
449.2
      
(13.8
)
    
435.4
  
  
                      
Total Operating Costs and Expenses
  
3,960.3
      
(234.7
)
    
3,725.6
  
  
                      
Operating Income
  
204.8
      
(191.8
)
    
13.0
  
  
                      
Other Income and (Expenses):
                      
Equity in Earnings of Equity Investments
  
38.3
      
(0.6
)
    
37.7
  
Equity in Earnings of MidCon
  
-
      
19.4
 (d)
    
19.4
  
Interest Expense, Net
  
(251.9
)
    
(2.1
)
    
(254.0
)
Interest Expense – Deferrable Interest Debentures
  
(9.1
)
    
-
      
(9.1
)
Minority Interests
  
(90.7
)
    
-
      
(90.7
)
Other, Net
  
11.4
      
35.7
      
47.1
  
  
                      
Total Other Income and (Expenses)
  
(302.0
)
    
52.4
      
(249.6
)
  
                      
Loss from Continuing Operations before Income Taxes
  
(97.2
)
    
(139.4
)
    
(236.6
)
Income Taxes
  
135.5
      
(52.8
)
    
82.7
  
Loss from Continuing Operations
$
(232.7
)
  
$
(86.6
)
  
$
(319.3
)

 
5
 


KNIGHT INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2006
(In millions)


 
Predecessor Company
 
As Reported
  
Pro Forma
Adjustments (c)
  
Pro Forma
Operating Revenues
$
10,252.4
    
$
(1,118.0
)
  
$
9,134.4
  
  
                      
Operating Costs and Expenses:
                      
Gas Purchases and Other Costs of Sales
  
6,339.5
      
(362.9
)
    
5,976.6
  
Operations and Maintenance
  
1,175.7
      
(123.9
)
    
1,051.8
  
General and Administrative
  
305.1
      
(45.9
)
    
259.2
  
Depreciation, Depletion and Amortization
  
541.6
      
(104.5
)
    
437.1
  
Other Operating Expenses, Net
  
134.7
      
(30.3
)
    
104.4
  
  
                      
Total Operating Costs and Expenses
  
8,496.6
      
(667.5
)
    
7,829.1
  
  
                      
Operating Income
  
1,755.8
      
(450.5
)
    
1,305.3
  
  
                      
Other Income and (Expenses):
                      
Equity in Earnings of Equity Investments
  
100.6
      
(1.8
)
    
98.8
  
Equity in Earnings of MidCon
  
-
      
53.2
 (d)
    
53.2
  
Interest Expense, Net
  
(559.0
)
    
(4.7
)
    
(563.7
)
Interest Expense – Deferrable Interest Debentures
  
(21.9
)
    
-
      
(21.9
)
Minority Interests
  
(374.2
)
    
-
      
(374.2
)
Other, Net
  
(2.2
)
    
44.7
      
42.5
  
  
                      
Total Other Income and (Expenses)
  
(856.7
)
    
91.4
      
(765.3
)
  
                      
Income from Continuing Operations before Income Taxes
  
899.1
      
(359.1
)
    
540.0
  
Income Taxes
  
285.3
      
(102.2
)
    
183.1
  
Income from Continuing Operations
$
613.8
    
$
(256.9
)
  
$
356.9
  


 
6
 

Knight Inc.
Notes to Unaudited Pro Forma Condensed
Consolidated Financial Statements

The unaudited pro forma condensed consolidated balance sheet presents financial information for the Company giving effect to the sale of an 80% ownership interest in MidCon and the related distribution from MidCon to the Company, completed on February 15, 2008. On December 21, 2008, NGPL PipeCo LLC, a wholly owned subsidiary of MidCon Corp., completed a $3.0 billion notes offering, the net proceeds of which were distributed to Knight Inc. on the closing of the sale to Myria. No gain or loss was recorded on this sale as the net book value of the businesses sold was adjusted to fair value (which included $4.3 billion of goodwill), as represented by this transaction, in connection with the Going Private transaction. The following pro forma adjustment gives effect to this transaction as if it had occurred on September 30, 2007:
 
(a)
To record the pro forma sale of MidCon at September 30, 2007, including the elimination of the assets and liabilities held for sale and to reflect the receipt of the sale proceeds (in millions):
 
Total Proceeds Received, Net of Selling Expenses
$
5,861.7
  
Less Distribution Received
  
(2,986.3
)
Sales Proceeds, Net of Selling Expenses
  
2,875.4
  
Net Book Value of Assets and Liabilities Sold
  
(2,875.4
)
Loss on Sale Before Income Taxes
  
-
  
Income Tax Benefit
  
-
  
Loss on Sale, Net of Income Taxes
$
-
  
 
(b)
The retained investment in MidCon is calculated as follows (in millions):

Total MidCon Stockholder’s Equity
$
6,580.6
  
Less Distribution Received
  
(2,986.3
)
Adjusted MidCon Stockholder’s Equity
  
3,594.3
  
Knight Inc. 20% Retained
  
20
%
Knight Inc. Investment in MidCon Retained
$
718.9
  

The unaudited pro forma condensed consolidated statements of operations present financial information for the Company giving effect to the sale of an 80% ownership interest in MidCon, which was completed on February 15, 2008. The following pro forma adjustments give effect to this transaction as if it had occurred on January 1, 2006:
 
(c)
To eliminate the revenues and expenses of MidCon.
  
(d)
After the sale of MidCon, Knight Inc. will retain a 20% ownership in MidCon. Accordingly, Knight Inc. will account for this investment under the equity method of accounting. The adjustment to record the Company’s equity in earnings of MidCon is as follows (in millions):
  
 
Successor
Company
  
Predecessor Company
  
Predecessor Company
 
Four Months
Ended
September 30, 2007
  
Five Months
Ended
May 31, 2007
  
Twelve Months
Ended
December 31, 2006
MidCon Income from Continuing Operations, after Income Tax
  
$
92.7
      
$
96.9
      
$
266.0
  
  
                            
Knight Inc.’s 20% Equity Ownership in MidCon Earnings
  
$
18.5
      
$
19.4
      
$
53.2
  


 
7
 

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