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| NRGY > SEC Filings for NRGY > Form 8-K on 6-Jul-2012 | All Recent SEC Filings |
6-Jul-2012
Entry into a Material Definitive Agreement, Regulation FD Disclosure, Financial Statem
On July 6, 2012, Inergy, L.P., a Delaware limited partnership ("Inergy"), Inergy GP, LLC, a Delaware limited liability company, Inergy Sales & Service, Inc., a Delaware corporation, and Suburban Propane Partners, L.P., a Delaware limited partnership ("Suburban"), entered into an amendment ("Amendment No. 2") to the parties' Contribution Agreement dated April 25, 2012 (the "Contribution Agreement"), as amended by the Amendment to Contribution Agreement dated June 15, 2012 ("Amendment No. 1"), pursuant to which Inergy agreed to contribute its retail propane business to Suburban. Pursuant to the Contribution Agreement, Suburban is conducting exchange offers and related consent solicitations (the "Exchange Offers") for up to $1.2 billion of certain of Inergy's outstanding senior unsecured notes. Amendment No. 2 provides that Suburban will offer a $65.0 million cash consent payment in connection with the Exchange Offers and that Inergy will pay $36.5 million to Suburban in cash at the closing of the transactions contemplated by the Contribution Agreement.
The foregoing description of Amendment No. 2 does not purport to be complete and is subject to, and qualified in its entirety by, the full text of Amendment No. 2 that is attached hereto as Exhibit 2.1 and incorporated by reference into this Item 1.01.
On May 3, 2012, Inergy filed a Current Report on Form 8-K that included in Exhibit 99.1 thereto unaudited pro forma consolidated financial information as of and for the six months ended March 31, 2012 and for the fiscal year ended September 30, 2011. Such unaudited pro forma consolidated financial information was prepared to give effect to the transactions contemplated by the Contribution Agreement. On June 15, 2012, Inergy filed a Current Report on Form 8-K that included updated unaudited pro forma consolidated financial information as of and for the six months ended March 31, 2012 and for the fiscal year ended September 30, 2011. Such unaudited pro forma consolidated financial information was prepared to give effect to Amendment No. 1.
Inergy is updating its unaudited pro forma consolidated financial information to reflect the impact of the parties' entry into Amendment No. 2. Such updated unaudited pro forma consolidated financial information giving effect to the parties' entry into Amendment No. 2 is furnished in Item 9.01(b) of this Current Report on Form 8-K.
In accordance with General Instruction B.2 of Form 8-K, the information
furnished pursuant to this Item 7.01 and the related information furnished
pursuant to Item 9.01 shall not be deemed to be "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that section, nor shall such
information be deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing. The information
furnished pursuant to Item 7.01 and Item 9.01 shall not be deemed an admission
as to the materiality of any information in this Current Report on Form 8-K that
is required to be disclosed solely to satisfy the requirements of Regulation FD.
Forward Looking Statements
Information contained in this Current Report on Form 8-K may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal securities law. Such forward-looking statements may include statements preceded by, followed by or that contain
(b) Pro forma financial information.
The following unaudited pro forma consolidated financial information of Inergy, L.P. ("Inergy") reflects the pro forma impact of the Retail Propane Transaction (as defined below), which includes the following:
• disposition of Inergy's retail propane operations;
• exchange of $1.2 billion of Inergy senior notes for Suburban Propane Partners, L.P. ("Suburban") senior notes (based on an assumption that all such Inergy senior notes are exchanged in the Exchange Offers (as defined below));
• receipt of $594.3 million in Suburban common units; and
• payment of $36.5 million to Suburban.
The unaudited pro forma consolidated balance sheet gives effect to the Retail Propane Transaction as if it had occurred on March 31, 2012; the unaudited pro forma consolidated statements of operations assume that the transaction was consummated on October 1, 2010. The unaudited pro forma consolidated financial statements should be read in conjunction with (i) Inergy's Annual Report on Form 10-K for the year ended September 30, 2011, as filed with the Securities and Exchange Commission (the "SEC") on November 16, 2011, and (ii) Inergy's quarterly report on Form 10-Q for the six months ended March 31, 2012, as filed with the SEC on May 3, 2012.
The unaudited pro forma consolidated financial statements are for illustrative purposes only and are not necessarily indicative of the financial position that would have been obtained or the financial results that would have occurred if the Retail Propane Transaction had been consummated on the date indicated, nor are they necessarily indicative of the financial position or results of operations in the future. The pro forma adjustments, as described in the accompanying notes, are based upon available information and certain assumptions that are believed to be reasonable as of the date of this document.
Retail Propane Transaction
On April 25, 2012, Inergy, Inergy GP, LLC and Inergy Sales & Service, Inc. (" Inergy Sales ") entered into a contribution agreement (the " Contribution Agreement ") with Suburban pursuant to which (i) Inergy will contribute all of its membership interests in Inergy Propane, LLC to Suburban, (ii) Inergy will contribute certain assets of Inergy Sales to Suburban, (iii) Inergy and Inergy Sales will receive equity consideration consisting of $594.3 million new Suburban common units subject to certain adjustments (the "Equity Consideration"), and (iv) Suburban will complete the Exchange Offers. These transactions and the other related transactions specified in the Contribution Agreement are referred to herein as the "Retail Propane Transaction."
Pursuant to the Contribution Agreement, Suburban will incur up to $1.0 billion of additional indebtedness in the form of newly issued Suburban senior notes, and pay up to $200.0 million of cash to noteholders, in connection with exchange offers for up to $1.2 billion of certain of Inergy's outstanding senior unsecured notes (the "Exchange Offers").
The Equity Consideration will be distributed by Inergy to Inergy unitholders, pro rata, except for $5.9 million of Suburban common units to be retained by Inergy, as promptly as practicable after the effective date of the registration statement relating to the distribution of such restricted Suburban common units (the "Equity Consideration Distribution").
Consummation of the Retail Propane Transaction is subject to customary conditions, including, without limitation, (i) the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (ii) the absence of any law, order or injunction prohibiting the Retail Propane Transaction, the Exchange Offers and the related transactions. Moreover, each party's obligation to consummate the Retail Propane Transaction is subject to certain other conditions, including, without limitation, (A) the accuracy of the other party's representations and warranties (subject to customary materiality qualifiers), and (B) the other party's compliance with its covenants and agreements contained in the Contribution Agreement (subject to customary materiality qualifiers). The consummation of the Exchange Offers is a condition to the closing of the Retail Propane Transaction. The Contribution Agreement also contains termination rights for Suburban and Inergy.
Inergy, L.P. and Subsidiaries
Unaudited Pro Forma Consolidated Balance Sheet
As of March 31, 2012
(in millions)
Retail
Propane
Transaction
Inergy, L.P. Pro Forma Other Inergy, L.P.
Historical Adjustments Adjustments Pro Forma
(a)
Assets
Current assets:
Cash and cash equivalents $ 14.6 $ (10.6 ) $ (4.0 )(e) $ -
Investments - - 594.3 (b) 594.3
Accounts receivable, less
allowance for doubtful accounts 184.7 (81.1 ) - 103.6
Inventories 93.8 (41.4 ) - 52.4
Assets from price risk management
activities 14.1 - - 14.1
Prepaid expenses and other
current assets 27.5 (1.9 ) - 25.6
Total current assets 334.7 (135.0 ) 590.3 790.0
Property, plant and equipment 2,731.3 (751.1 ) - 1,980.2
Less: accumulated depreciation 664.3 (278.7 ) - 385.6
Property, plant and equipment,
net 2,067.0 (472.4 ) - 1,594.6
Intangible assets, net 365.5 (302.0 ) (21.0 )(c) 42.5
Goodwill 498.5 (336.1 ) - 162.4
Other assets 2.4 (0.5 ) - 1.9
Total assets $ 3,268.1 $ (1,246.0 ) $ 569.3 $ 2,591.4
Liabilities and partners' capital
Current liabilities:
Accounts payable $ 123.1 $ (0.6 ) $ - $ 122.5
Accrued expenses 84.2 (10.3 ) - 73.9
Customer deposits 26.8 (26.8 ) - -
Liabilities from price risk
management activities 5.1 - - 5.1
Current portion of long-term debt 9.9 (4.1 ) - 5.8
Total current liabilities 249.1 (41.8 ) - 207.3
Long-term debt, less current
portion 1,671.1 (10.6 ) (1,200.0 )(c) 482.2
(10.8 )(c)
32.5 (e)
Other long-term liabilities 20.4 - - 20.4
Deferred income taxes 20.1 - - 20.1
Partners' capital:
Limited partner unitholders 1,142.5 (1,193.6 ) 594.3 (b) 1,696.5
1,200.0 (c)
(10.2 )(c)
(36.5 )(e)
Total Inergy, L.P. partners'
capital 1,142.5 (1,193.6 ) 1,747.6 1,696.5
Interest of non-controlling
partners in subsidiaries 164.9 - - 164.9
Total partners' capital 1,307.4 (1,193.6 ) 1,747.6 1,861.4
Total liabilities and partners'
capital $ 3,268.1 $ (1,246.0 ) $ 569.3 $ 2,591.4
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The accompanying notes are an integral part of these consolidated financial statements.
Inergy, L.P. and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Operations
For the Six Months Ended March 31, 2012
(in millions, except unit and per unit data)
Retail
Propane
Inergy, Transaction
L.P. Pro Forma Other Inergy, L.P.
Historical Adjustments Adjustments Pro Forma
(a)
Revenue:
Propane $ 928.6 $ (505.6 ) $ - $ 423.0
Other 402.4 (112.1 ) - 290.3
1,331.0 (617.7 ) - 713.3
Cost of product sold (excluding
depreciation and amortization as shown
below):
Propane 703.0 (293.9 ) - 409.1
Other 247.4 (74.0 ) - 173.4
950.4 (367.9 ) - 582.5
Expenses:
Operating and administrative 164.0 (126.4 ) - 37.6
Depreciation and amortization 98.4 (35.5 ) - 62.9
Loss on disposal of assets 3.6 (3.6 ) - -
Operating income 114.6 (84.3 ) - 30.3
Other income (expense):
Interest expense, net (50.4 ) 0.6 38.1 (d) (11.7 )
Early extinguishment of debt (24.9 ) - - (24.9 )
Other income 1.4 (0.1 ) - 1.3
Income (loss) before income taxes 40.7 (83.8 ) 38.1 (5.0 )
Provision for income taxes 0.3 - - 0.3
Net income (loss) 40.4 (83.8 ) 38.1 (5.3 )
Net income attributable to non-controlling
partners (3.7 ) - - (3.7 )
Net income (loss) attributable to partners $ 36.7 $ (83.8 ) $ 38.1 $ (9.0 )
Total limited partners' interest in net
income (loss) $ 36.7 $ (83.8 ) $ 38.1 $ (9.0 )
Net income (loss) per limited partner
unit:
Basic $ 0.30 $ (0.07 )
Diluted $ 0.28 $ (0.07 )
Weighted-average limited partners' units
outstanding (in thousands):
Basic 124,141 124,141
Dilutive units 7,343 -
Diluted 131,484 124,141
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The accompanying notes are an integral part of these consolidated financial statements.
Inergy, L.P. and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended September 30, 2011
(in millions, except unit and per unit data)
Retail
Propane
Inergy, Transaction
L.P. Pro Forma Other Inergy, L.P.
Historical Adjustments Adjustments Pro Forma
(a)
Revenue:
Propane $ 1,461.9 $ (859.6 ) $ - $ 602.3
Other 691.9 (192.7 ) - 499.2
2,153.8 (1,052.3 ) - 1,101.5
Cost of product sold (excluding
depreciation and amortization as
shown below):
Propane 1,044.0 (479.1 ) - 564.9
Other 432.0 (122.7 ) - 309.3
1,476.0 (601.8 ) - 874.2
Expenses:
Operating and administrative 323.3 (257.0 ) - 66.3
Depreciation and amortization 191.8 (74.5 ) - 117.3
(Gain) loss on disposal of assets 8.2 (10.9 ) - (2.7 )
Operating income 154.5 (108.1 ) - 46.4
Other income (expense):
Interest expense, net (113.5 ) 1.4 82.6 (d) (29.5 )
Early extinguishment of debt (52.1 ) - - (52.1 )
Other income 1.2 (0.1 ) - 1.1
Income (loss) before income taxes (9.9 ) (106.8 ) 82.6 (34.1 )
Provision for income taxes 0.7 (0.4 ) - 0.3
Net income (loss) (10.6 ) (106.4 ) 82.6 (34.4 )
Net loss attributable to
non-controlling partners 28.2 - - 28.2
Net income (loss) attributable to
partners $ 17.6 $ (106.4 ) $ 82.6 $ (6.2 )
Total limited partners' interest in
net income (loss) $ 17.6 $ (106.4 ) $ 82.6 $ (6.2 )
Net income (loss) per limited
partner unit:
Basic $ 0.17 $ (0.06 )
Diluted $ 0.15 $ (0.06 )
Weighted-average limited partners'
units outstanding (in thousands):
Basic 105,732 105,732
Dilutive units 11,952 -
Diluted 117,684 105,732
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