8-K/A 1 d8ka.txt CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): August 16, 2001 CABOT OIL & GAS CORPORATION (Exact name of registrant as specified in its charter) Delaware 1-10447 04-3072771 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.)
1200 Enclave Parkway Houston, Texas 77077 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (281) 589-4600 This Form 8-K/A amends and supplements the Form 8-K filed on August 30, 2001 by amending Item 7 as set forth herein. Item 7. Financial Statements and Exhibits (a) Financial Statements of Businesses Acquired. The following consolidated financial statements of Cody Company are filed herewith as Exhibit 99.2: Independent Auditor's Report Consolidated Balance Sheets - June 30, 2001 (unaudited) and December 31, 2000 Consolidated Statements of Operations - For the Six Months Ended June 30, 2001 (unaudited) and for the Year Ended December 31, 2000 Consolidated Statements of Comprehensive Income - For Six Months Ended June 30, 2001 (unaudited) and for the Year Ended December 31, 2000 Consolidated Statement of Changes in Stockholders' Equity - For the Period from January 1, 2001 through June 30, 2001 (unaudited) and for the Period from January 1, 2000 through December 31, 2000 Consolidated Statements of Cash Flows - For the Six Months Ended June 30, 2001 (unaudited) and for the Year Ended December 31, 2000 Notes to Consolidated Financial Statements 2 (b) Pro Forma Financial Information. The accompanying unaudited pro forma combined financial statements and related notes thereto are presented to reflect the merger of Cody Company with a subsidiary of Cabot Oil & Gas Corporation ("Cabot"). Effective August 16, 2001, Cabot, COG Colorado Corporation, a wholly owned subsidiary of Cabot ("Merger Sub"), and Cody Company consummated their Agreement and Plan of Merger (the "Merger Agreement"), whereby (i) Cody Company distributed to its shareholders certain assets and liabilities (the "Assignment and Assumption"), and thereafter (ii) Merger Sub merged with and into Cody Company (the "Merger"), with Cody Company surviving as a wholly owned subsidiary of Cabot. The Merger has been accounted for in the unaudited pro forma combined financial statements using the purchase method of accounting. Consequently, the unaudited pro forma combined balance sheet as of June 30, 2001 reflects the recording of assets acquired and liabilities assumed of Cody Company at estimated fair value as if the Merger had occurred on that date. The unaudited pro forma combined statements of operations are prepared for the six months ended June 30, 2001 and for the year ended December 31, 2000 and illustrate the effects of the Merger as if it had occurred on January 1, 2000. The management of Cabot believes that the assumptions utilized provide a reasonable basis for presenting the significant effects of the Merger and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma combined financial statements. The unaudited pro forma combined financial statements do not purport to be indicative of the financial position or results of operations of Cabot had the Merger occurred on the dates mentioned above, nor are the unaudited pro forma combined financial statements necessarily indicative of the future financial position or results of operations of Cabot. The unaudited pro forma combined financial statements should be read in conjunction with the notes thereto and the historical financial statements of Cody Company, referred to in Item 7(a) of this Form 8-K/A. In addition, reference should be made to the historical financial statements of Cabot included in its Form 10-K for the year ended December 31, 2000 and its Form 10-Q for the six months ended June 30, 2001 filed with the Securities and Exchange Commission. 3 Cabot Oil & Gas Corporation Unaudited Pro Forma Combined Statement of Operations For the Year Ended December 31, 2000 (in thousands, except per share amounts)
Pro Forma Combining Adjustments ------------------------------- Historical Assignment and Purchase Pro Forma ---------- Revenues Cabot Cody Assumption and Other Combined -------- ----- ---- ---------- --------- -------- Oil and Gas Sales $ 219,729 $ 64,813 $ 284,542 Brokered Natural Gas 141,085 141,085 Ranching 4,874 $ (4,874) a -- Investment Income 4,388 (4,388) a -- Sales of Land Held for Development 1,407 (1,407) a -- Other Income 7,837 660 (492) a 8,005 ----------------------------------------------------------------------------------------- Total Revenues 368,651 76,142 (11,161) 433,632 Costs and Expenses ------------------ Oil and Gas Operations: Brokered Natural Gas Cost 135,700 135,700 Direct Operations-Field & Pipeline 35,727 9,992 45,719 Taxes Other Than Income 23,041 5,319 28,360 Exploration 19,858 2,552 22,410 Impairment of Properties 13,511 13,511 Ranching 1,600 (1,600) a -- Land Operations 1,073 (1,073) a -- General and Administrative 22,517 7,207 (3,531) a 26,193 Accrued Severence Expense 3,600 $ (3,600) i -- Depletion, Depreciation and amortization 53,441 19,628 9,779 j 82,848 ----------------------------------------------------------------------------------------- Total Cost and Expenses 303,795 50,971 (6,204) 6,179 354,741 Gain/(Loss) on Sale of Assets and Other (39) (793) 999 a 167 ----------------------------------------------------------------------------------------- Income from Operations 64,817 24,378 (3,958) (6,179) 79,058 Interest Expense 22,878 2,931 (486) a 12,943 k 38,266 ----------------------------------------------------------------------------------------- Income from Continuing Operations Before Income Taxes 41,939 21,447 (3,472) (19,122) 40,792 Income Tax Expense 16,467 3,912 (633) a (3,839) l 15,907 ----------------------------------------------------------------------------------------- Income from Continuing Operations 25,472 17,535 (2,839) (15,283) 24,885 Preferred Stock Dividend (3,749) -- -- -- (3,749) ----------------------------------------------------------------------------------------- Net Income Available to Common Stockholders $ 29,221 $ 17,535 $ (2,839) $ (15,283) $ 28,634 ========================================================================================= Earning per common share: Basic $ 1.07 $ 0.97 Diluted $ 1.06 $ 0.97
See the notes to the unaudited pro forma combined financial statements. 4 Cabot Oil & Gas Corporation Unaudited Pro Forma Combined Statement of Operations For the Six Months Ended June 30, 2001 (in thousands, except per share amounts)
Pro Forma Combining Adjustments ------------------------------- Historical Assignment and Purchase Pro Forma ---------- Revenues Cabot Cody Assumption and Other Combined -------- ----- ---- ---------- --------- -------- Oil and Gas Sales $ 196,656 $ 53,368 $ 250,024 Brokered Natural Gas 62,695 62,695 Change in Derivative Fair Value 1,211 1,211 Ranching 661 $ (661) a -- Investment Income 1,250 (1,250) a -- Other Income 1,936 3,387 (826) a 4,497 ----------------------------------------------------------------------------------------- Total Revenues 262,498 58,666 (2,737) 318,427 Costs and Expenses ------------------ Oil and Gas Operations: Brokered Natural Gas Cost 60,479 60,479 Direct Operations-Field & Pipeline 17,870 5,464 23,334 Taxes Other Than Income 16,617 905 17,522 Exploration 25,313 477 25,790 Impairment of Properties 2,964 2,964 Ranching 657 (657) a -- Land Operations -- General and Administrative 11,638 5,394 (2,226) a 14,806 Accrued Severence Expense 12,552 $ (12,552) i -- Depletion, depreciation and amortization 32,089 9,338 7,857 j 49,284 ----------------------------------------------------------------------------------------- Total Cost and Expenses 166,970 34,787 (2,883) (4,695) 194,179 Gain/(Loss) on Sale of Assets and Other (27) 66 63 a 102 ----------------------------------------------------------------------------------------- Income from Operations 95,501 23,945 209 4,695 124,350 Interest Expense 9,409 475 (176) a 6,471 k 16,179 ----------------------------------------------------------------------------------------- Income from Continuing Operations Before Income Taxes 86,092 23,470 385 (1,776) 108,171 Income Tax Expense 33,438 12,153 177 a (3,706) l 42,062 ----------------------------------------------------------------------------------------- Income from Continuing Operations $ 52,654 $ 11,317 $ 208 $ 1,930 $ 66,109 ========================================================================================= Earning per common share: Basic $ 1.79 $ 2.10 Diluted $ 1.76 $ 2.08
See the notes to the unaudited pro forma combined financial statements. 5 Cabot Oil & Gas Corporation Unaudited Pro Forma Balance Sheet As of June 30, 2001 (in thousands)
Pro Forma Combining Adjustments ------------------------------- Historical Assignment and Purchase Pro Forma ---------- -------------- -------- --------- Cabot Cody Assumption and Other Combined ----- ---- ---------- --------- -------- Current Assets Cash and Cash Equivalents $ 9,361 $ 1,028 $ 12,428 a $ (18,261) b $ 38,977 14,924 c 5,000 e 10,047 c 4,450 g Marketable Securities, at fair value 33,440 (33,440) a 0 Receivables, sale of securities 55,604 32,177 (32,177) a 55,604 Accounts Receivable, net 14,194 11,538 (608) a 842 d 25,966 Other Current Assets 30,065 13,708 (1,185) a 33,127 (10,047) c 586 d ---------------------------------------------------------------------------------------- Total Current Assets 109,224 91,891 (40,058) (7,383) 153,674 Property and Equipment, net 661,732 128,009 (16,181) a (111,828) d 967,316 301,133 d 4,451 m Other Assets 1,974 28,243 (28,243) a 1,974 ---------------------------------------------------------------------------------------- Total Assets $ 772,930 $ 248,143 $ (84,482) $ 186,373 $ 1,122,964 ======================================================================================== Current Liabilities Accounts Payable $ 95,050 $ 5,419 $ (115) a $ 5,000 e $ 106,480 1,126 d Accrued Liabilities 27,334 23,386 (50) a 100 f 38,699 4,450 g (4,820) d (16,152) b 4,451 m Other Current Liabilities 21,118 (19,218) a 16,824 14,924 c ---------------------------------------------------------------------------------------- Total Current Liabilities 122,384 49,923 (4,459) (5,845) 162,003 Long-Term Debt 187,000 50 181,353 h 368,403 Deferred Income Taxes 135,626 8,939 (8,939) a 79,152 d 214,778 Other Liabilities 13,837 13,837 Stockholders' Equity 314,083 189,231 (71,084) a (118,147) h 363,943 49,860 h ---------------------------------------------------------------------------------------- $ 772,930 $ 248,143 $ (84,482) $ 186,373 $ 1,122,964 ========================================================================================
See the notes to the unaudited pro forma combined financial statements. 6 Cabot Oil & Gas Corporation Notes to Unaudited Pro Forma Combined Financial Statements a) To reflect the distribution of certain assets and liabilities to the former shareholders of Cody Company pursuant to the Assignment and Assumption, including cash, marketable securities and land, property and equipment not related to energy activities, as well as the distribution of the cash surrender value of the insurance policies, and the related revenue and expenses associated with these assets and liabilities. b) To reflect the payment of the investment banking transaction fee and the payment of executive and employee severance and bonus plans prior to closing. These costs were the responsibility of the former shareholders of Cody Company. c) To record the tax liability related to the Assignment and Assumption of certain assets and liabilities to Cody Company shareholders and the tax liability related to the closing the short sale of certain marketable securities as set forth below (in thousands): Estimated Total Tax Liability $ 26,871 Estimated Tax Payments (10,047) Previously Recorded Tax Liability (1,900) --------- Adjustment to Fair Value of Tax Liability $ 14,924 ========= d) To reflect the elimination of the Cody Company historical property and equipment of $111.8 million and record such amounts at fair value based on the purchase price allocation, inclusive of acquisition related fees and costs associated with the closing of the transaction, as noted in M below, and deferred income taxes to reflect the difference between the purchase price allocated to the properties acquired and their associated remaining tax basis acquired. The table below sets forth the allocation of the purchase price (in thousands): Unproved oil & gas properties $ 29,931 Proved oil & gas properties 275,653 Net working capital items 9,232 --------- Total net assets 314,816 Acquisition related fees and costs (4,451) Deferred tax component (79,152) --------- Total cash and equity consideration $ 231,213 ========= 7 The purchase price allocation has been based on preliminary estimates of fair value and is subject to adjustment as additional information becomes available and is evaluated. e) To reflect the reclassification of certain balances to conform to the classification of such items in Cabot's historical financial statements. f) To reflect the accrual of legal and accounting fees associated with the closing of the acquisition of Cody Company. g) To reflect escrowed purchase price consideration and the associated liability payable to the former shareholders of Cody Company. h) To reflect the financing of the acquisition with long-term debt and class A common stock and the elimination of the remaining equity of Cody Company totaling $118.1 million. Cash consideration paid to former Cody Company shareholders was financed by the issuance of $170 million of 7.3% weighted average fixed rate debt instruments and $11.4 million from Cabot's existing revolving line of credit. The class A common stock consisted of 1,999,993 shares valued at $24.93 per share which represents the average closing price for the three-day period surrounding the date of announcement. i) To reflect the reduction of expenses related to Cody Company severance and bonus plans which were paid by the former shareholders of Cody Company pursuant to the Merger Agreement. These costs were the responsibility of the former shareholders of Cody Company. j) To reflect the incremental depletion, depreciation and amortization resulting from the increase in property and equipment. k) To reflect the interest expense associated with the debt component of the acquisition at a weighted average fixed interest rate of 7.14%. l) To reflect the reduction in income tax expense at the statutory tax rate of 39%. m) To reflect the accrual of acquisition related fees and costs (See D above). 8 (c) Exhibits. 2.1 -- Agreement and Plan of Merger, dated as of June 20, 2001, among Cabot Oil & Gas Corporation, COG Colorado Corporation, Cody Company and the shareholders of Cody Company. (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K for the event dated June 20, 2001.) 2.2* -- Amendment to Agreement and Plan of Merger dated as of July 10, 2001 to the Agreement and Plan of Merger, dated June 20, 2001, among Cabot Oil & Gas Corporation, COG Colorado Corporation, Cody Company and the shareholders of Cody Company. 2.3* -- Closing Agreement dated August 16, 2001. 4.1* -- Note Purchase Agreement dated as of July 26, 2001 among Cabot Oil & Gas Corporation and the Purchasers listed therein. 23.1 -- Consent of Netherland Sewell & Associates, Inc. 23.2 -- Consent of Hein + Associates LLP. 99.1* -- Press Release dated August 16, 2001. 99.2 -- Consolidated Financial Statements of Cody Company as of June 30, 2001 (unaudited) and December 31, 2000, and for the six month period ended June 30, 2001 (unaudited) and for the twelve months ended December 31, 2000. __________________ * Filed with the Form 8-K as originally filed on August 30, 2001. 9 SIGNATURE 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. CABOT OIL & GAS CORPORATION By: /s/ Scott C. Schroeder ---------------------------------- Scott C. Schroeder Vice President, Chief Financial Officer and Treasurer Date: October 30, 2001 10