Attached files

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8-K/A - AMENDMENT TO FORM 8-K - Sunoco LPa14-22334_18ka.htm
EX-23.3 - EX-23.3 - Sunoco LPa14-22334_1ex23d3.htm
EX-99.7 - EX-99.7 - Sunoco LPa14-22334_1ex99d7.htm
EX-99.5 - EX-99.5 - Sunoco LPa14-22334_1ex99d5.htm
EX-99.2 - EX-99.2 - Sunoco LPa14-22334_1ex99d2.htm
EX-99.3 - EX-99.3 - Sunoco LPa14-22334_1ex99d3.htm
EX-23.1 - EX-23.1 - Sunoco LPa14-22334_1ex23d1.htm
EX-99.6 - EX-99.6 - Sunoco LPa14-22334_1ex99d6.htm
EX-99.4 - EX-99.4 - Sunoco LPa14-22334_1ex99d4.htm
EX-99.8 - EX-99.8 - Sunoco LPa14-22334_1ex99d8.htm
EX-23.2 - EX-23.2 - Sunoco LPa14-22334_1ex23d2.htm

Exhibit 99.1

 

SUSSER PETROLEUM PARTNERS LP

 

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

 

Introduction

 

The following unaudited pro forma combined financial information of Susser Petroleum Partners LP (“SUSP”) reflects the pro forma impacts of multiple transactions, each of which is described in the following sections. Our unaudited pro forma condensed combined balance sheet as of June 30, 2014 and our unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2014 and the year ended December 31, 2013, reflect the following transactions:

 

·                  the assumed offering of approximately 8.0 million common units for estimated aggregate net proceeds of approximately $389 million based on the last sale price of our common units on October 17, 2014 of $50.21 per common unit (excluding the up to 1.2 million additional common units that may be purchased at the option of the underwriters, and after deducting underwriting discounts and commissions and estimated offering expenses) (“Equity Offering”);

·                  the October 1, 2014 acquisition of Mid-Atlantic Convenience Stores, LLC (“MACS”) from Energy Transfer Partners, L.P. (“ETP”), the owner of our general partner and a 57.8% limited partner interest in us, for total consideration consisting of (i) $556 million in cash, subject to adjustment for working capital, and (ii) 3,983,540 of our common units (the “MACS Acquisition”); and

·                  the pending acquisition of Aloha Petroleum, Ltd (“Aloha”) for cash consideration of $240 million, subject to a post-closing earn-out and certain closing adjustments (the “Aloha Acquisition”).  This pending acquisition was announced on September 25, 2014, and is expected to close during the fourth quarter of 2014.

 

The unaudited pro forma condensed combined balance sheet gives effect to the MACS Acquisition, the Aloha Acquisition and the Equity Offering as if they had occurred on June 30, 2014; the unaudited pro forma condensed combined statements of operations assume that the MACS Acquisition, the Aloha Acquisition and the Equity Offering were consummated as of the beginning of the respective periods presented. The unaudited pro forma condensed combined balance sheet and condensed combined statements of operations should be read in conjunction with SUSP’s Annual Report on Form 10-K for the year ended December 31, 2013 and subsequent Quarterly Reports on Form 10-Q.

 

The historical financial information included in the columns entitled “SUSP” was derived from the audited consolidated financial statements included in SUSP’s Annual Report on Form 10-K for the year ended December 31, 2013, and the unaudited consolidated financial statements included in SUSP’s Quarterly Report on Form 10-Q for the six months ended June 30, 2014.  The historical financial information in the columns entitled “MACS” was derived from its audited financial statements for the year ended December 31, 2013 and from its unaudited financial statements for the six months ended June 30, 2014, included in this Current Report on Form 8-K/A as Exhibits 99.2 and 99.3, respectively. The historical financial information included in the columns entitled “Aloha” was derived from its audited financial statements for the year ended December 31, 2013 and from its unaudited financial statements for the six months ended June 30, 2014, included in this Current Report on Form 8-K/A at Exhibits 99.4 and 99.5, respectively.

 

MACS Acquisition

 

On September 25, 2014, SUSP entered into a contribution agreement with MACS, ETC M-A Acquisition LLC (“ETC”) and ETP, whereby SUSP agreed to acquire all of the issued and outstanding membership interests of MACS from ETC for $556 million in cash, subject to adjustment for working capital, and 3,983,540 SUSP common units.  SUSP financed the cash portion of the purchase price by utilizing availability under its revolving credit facility.  The MACS Acquisition was completed on October 1, 2014.

 

ETP acquired MACS in October 2013.  MACS was previously a wholly-owned subsidiary of MACS Holdings, LLC, which is presented as the predecessor company of MACS in the historical financial statements included elsewhere in this Current Report on Form 8-K/A, as MACS and the Variable Interest Entities comprised substantially all of the consolidated assets and operations of MACS Holdings, LLC.  Pro forma adjustments to eliminate the activity of MACS Holdings, LLC are reflected in the following unaudited pro forma condensed combined statements of operations for the year ended December 31, 2013.  The historical financial results of operations for the year ended December 31, 2013 are being presented in this pro forma schedule as a combined amount of the predecessor and successor results for the respective periods.  The separate financial results for the predecessor and successor companies are provided in Exhibit 99.2 to this Current Report on Form 8-K/A.  Adjustments for the predecessor are not required for the six months ended June 30, 2014 or in the unaudited pro forma combined condensed balance sheet as of June 30, 2014, as those statements already reflect only the operations and financial position of MACS.

 



 

On May 6, 2014, MACS acquired 40 company operated sites from Tiger Management Group, LLC.  This acquisition is reflected in the unaudited historical condensed balance sheet as of June 30, 2014, and is reflected in the unaudited historical statements of operations for the six months ended June 2014 since the date of acquisition.

 

SUSP will account for the acquisition of MACS as a transfer of net assets between entities under common control. As such, the MACS assets acquired from ETP will be initially recorded by SUSP at ETP’s historic carrying value, and SUSP will include the activities of MACS in its future financial statements on a retrospective basis, as of the date of common control.  However, since SUSP and MACS only became under common control as of August 29, 2014, subsequent to the date of the historical financial statements presented,  the pro forma condensed combined statements of operations are presented to include the results of operations of MACS from the beginning of the periods presented.

 

Aloha Acquisition

 

On September 25, 2014, SUSP and Susser Petroleum Property Company LLC (“Propco”), a wholly owned subsidiary of SUSP, entered into a purchase and sale agreement in which SUSP and Propco agreed to acquire all of the issued and outstanding shares of capital stock of Aloha for total consideration of $240 million in cash, subject to a post-closing earn-out and certain closing adjustments.  Consummation of the Aloha Acquisition is expected to occur during the fourth quarter of 2014 and is subject to customary closing conditions.  SUSP plans to finance the purchase of Aloha by utilizing availability under its revolving credit facility.  SUSP management currently plans to contribute certain assets from Propco to SUSP; however, the impacts of this discretionary management action is not included in the accompanying pro forma combined financial information.

 

The pro forma adjustments reflect a preliminary purchase price allocation.  The book value for Aloha’s fixed assets is assumed to approximate fair value.  The final allocation of the purchase price is dependent upon certain valuations of the assets and liabilities and other studies that will be initiated once this transaction closes.  Differences between this preliminary purchase price allocation and the final purchase accounting will occur, and these differences could have a material impact on the unaudited pro forma combined financial information.

 

Equity Offering

 

Concurrent with the filing of this Current Report on Form 8-K/A, SUSP has filed a preliminary prospectus supplement offering to sell 8.0 million common units representing limited partner interests of SUSP.  SUSP expects to receive net proceeds of approximately $389 million from the Equity Offering, excluding the underwriters’ option to purchase additional common units, and after deducting underwriting discounts and commissions and estimated offering expenses.  SUSP intends to use the net proceeds of this offering to repay indebtedness under our revolving credit facility and for general partnership purposes.

 

Adjustments for the above-listed transactions on an individual basis are presented in separate columns in the following schedules, and further described in the notes to the unaudited pro forma combined financial statements. Certain information normally included in the financial statements prepared in accordance with GAAP has been condensed or omitted in accordance with the rules and regulations of the SEC. The unaudited pro forma combined financial statements and accompanying notes should be read in conjunction with the historical financial statements and related notes thereto appearing elsewhere herein.

 

The unaudited pro forma condensed combined financial statements do not purport to be indicative of the results of operations or financial position that we actually would have achieved if the transactions had been consummated on the dates indicated, nor do they project our results of operations or financial position for any future period or date.

 



 

SUSSER PETROLUEM PARTNERS LP

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF JUNE 30, 2014

(dollars in thousands except per unit)

 

 

 

Historical

 

Pro Forma Adjustments

 

 

 

 

 

 

 

SUSP

 

MACS

 

Aloha

 

MACS

 

 

 

Aloha

 

 

 

Equity
Offering

 

 

 

Pro Forma
Combined

 

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

6,769

 

$

45,661

 

$

26,191

 

$

 

 

 

$

(33,800

)

(d)

 

$

 

 

 

$

52,475

 

 

 

 

 

 

 

 

 

 

 

 

 

240,000

 

(e)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(232,346

)

(f)

 

 

 

 

 

 

 

Accounts receivable, net of allowance

 

74,212

 

17,410

 

18,263

 

 

 

 

 

 

 

 

 

 

109,885

 

Accounts receivable affiliates

 

51,727

 

356

 

 

 

 

 

 

 

 

 

 

 

52,083

 

Inventories, net

 

38,971

 

15,530

 

23,039

 

 

 

 

 

 

 

 

 

 

77,540

 

Other current assets

 

710

 

1,533

 

5,205

 

 

 

 

 

 

 

 

 

 

7,448

 

Total current assets

 

172,389

 

80,490

 

72,698

 

 

 

 

(26,146

)

 

 

 

 

 

299,431

 

Property and equipment, net

 

239,590

 

478,307

 

92,154

 

 

 

 

 

 

 

 

 

 

810,051

 

Goodwill

 

22,823

 

107,781

 

23,235

 

 

 

 

127,836

 

(f)

 

 

 

 

281,675

 

Intangible assets, net

 

24,292

 

95,658

 

8,058

 

 

 

 

3,058

 

(f)

 

 

 

 

131,066

 

Other noncurrent assets

 

259

 

11,475

 

1,625

 

49,677

 

(a)

 

(664

)

(d)

 

 

 

 

62,372

 

Total Assets

 

$

459,353

 

$

773,711

 

$

197,770

 

$

49,677

 

 

 

$

104,084

 

 

 

$

 

 

 

$

1,584,595

 

LIABILITIES AND PARTNERS’ EQUITY:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

141,424

 

$

28,774

 

$

21,733

 

$

 

 

 

$

 

 

 

$

 

 

 

$

191,931

 

Affiliated payable affiliates

 

 

3,043

 

 

 

 

 

 

 

 

 

 

 

3,043

 

Current maturities of long-term debt

 

525

 

12,860

 

7,100

 

 

 

 

(7,100

)

(d)

 

 

 

 

13,385

 

Current maturities of capital leases

 

 

271

 

 

 

 

 

 

 

 

 

 

 

271

 

Other current liabilities

 

 

694

 

 

 

 

 

 

 

 

 

 

 

694

 

Total current liabilities

 

141,949

 

45,642

 

28,833

 

 

 

 

(7,100

)

 

 

 

 

 

209,324

 

Revolving line of credit

 

232,240

 

 

 

556,000

 

(a)

 

240,000

 

(e)

 

(388,880

)

(g)

 

639,360

 

Long term debt

 

3,536

 

172,509

 

26,700

 

 

 

 

(26,700

)

(d)

 

 

 

 

176,045

 

Capital leases

 

 

3,283

 

 

 

 

 

 

 

 

 

 

 

3,283

 

Other noncurrent liabilities

 

2,399

 

14,204

 

32,056

 

 

 

 

8,065

 

(f)

 

 

 

 

56,724

 

Total liabilities

 

380,124

 

235,638

 

87,589

 

556,000

 

 

 

214,265

 

 

 

(388,880

)

 

 

1,084,736

 

Noncontrolling interest

 

 

(7,154

)

 

 

 

 

 

 

 

 

 

 

(7,154

)

Stockholders equity

 

 

 

110,181

 

 

 

 

(664

)

(d)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(109,517

)

(f)

 

 

 

 

 

 

 

Partners’ equity

 

79,229

 

545,227

 

 

(506,323

)

(a)

 

 

 

 

388,880

 

(g)

 

507,013

 

Total Liabilities and Partners’ Equity

 

$

459,353

 

$

773,711

 

$

197,770

 

$

49,677

 

 

 

$

104,084

 

 

 

$

 

 

 

$

1,584,595

 

 



 

SUSSER PETROLUEM PARNTERS LP

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR SIX MONTHS ENDED JUNE 30, 2014

(dollars in thousands except per unit)

 

 

 

Historical

 

Pro Forma Adjustments

 

 

 

 

 

 

 

SUSP

 

MACS

 

Aloha

 

MACS

 

 

 

Aloha

 

 

 

Equity
Offering

 

 

 

Pro Forma
Combined

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

 

$

 

$

59,474

 

$

22,832

 

$

 

 

 

$

 

 

 

$

 

 

 

$

82,306

 

Motor fuel sales

 

2,580,780

 

728,285

 

332,821

 

(32,249

)

(h)

 

(41,241

)

(h)

 

 

 

 

3,568,396

 

Other Income

 

11,832

 

13,513

 

9,865

 

 

 

 

 

 

 

 

 

 

35,210

 

Total revenues

 

2,592,612

 

801,272

 

365,518

 

(32,249

)

 

 

(41,241

)

 

 

 

 

 

3,685,912

 

Cost of Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchandise

 

 

43,426

 

16,550

 

 

 

 

 

 

 

 

 

 

59,976

 

Motor fuel

 

2,546,503

 

693,257

 

302,728

 

(32,249

)

(h)

 

(41,241

)

(h)

 

 

 

 

3,468,998

 

Other

 

1,786

 

 

1,117

 

 

 

 

 

 

 

 

 

 

2,903

 

Total Cost of Sales

 

2,548,289

 

736,683

 

320,395

 

(32,249

)

 

 

(41,241

)

 

 

 

 

 

3,531,877

 

Gross Profit

 

44,323

 

64,589

 

45,123

 

 

 

 

 

 

 

 

 

 

154,035

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

14,570

 

26,263

 

30,526

 

 

 

 

 

 

 

 

 

 

71,359

 

Loss (gain) on disposal of assets and impairment charge

 

(36

)

259

 

 

 

 

 

 

 

 

 

 

 

223

 

Depreciation, amortization and accretion

 

6,659

 

16,537

 

5,867

 

 

 

 

102

 

(f)

 

 

 

 

29,165

 

Acquisition transaction costs

 

 

614

 

211

 

(614

)

(b)

 

(211

)

(f)

 

 

 

 

 

Total operating expenses

 

21,193

 

43,673

 

36,604

 

(614

)

 

 

(109

)

 

 

 

 

 

100,747

 

Income from operations

 

23,130

 

20,916

 

8,519

 

614

 

 

 

109

 

 

 

 

 

 

53,288

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(3,276

)

(4,635

)

(1,682

)

(5,983

)

(a)

 

1,682

 

(d)

 

4,184

 

(g)

 

(12,292

)

 

 

 

 

 

 

 

 

 

 

 

 

(2,582

)

(e)

 

 

 

 

 

 

 

Other miscellaneous

 

 

(498

)

 

 

 

 

 

 

 

 

 

 

(498

)

Total other income (expense)

 

(3,276

)

(5,133

)

(1,682

)

(5,983

)

 

 

(900

)

 

 

4,184

 

 

 

(12,790

)

Income (loss) before income tax

 

19,854

 

15,783

 

6,837

 

(5,369

)

 

 

(791

)

 

 

4,184

 

 

 

40,498

 

Income tax (expense) benefit

 

(127

)

 

(2,629

)

72

 

(c)

 

 

 

 

 

 

 

(2,684

)

Net Income

 

19,727

 

15,783

 

4,208

 

(5,297

)

 

 

(791

)

 

 

4,184

 

 

 

37,814

 

Less: Net income attributable to noncontrolling interest

 

 

(1,619

)

 

 

 

 

 

 

 

 

 

 

(1,619

)

Net income attributable to Susser Petroleum Partners

 

$

19,727

 

$

14,164

 

$

4,208

 

$

(5,297

)

 

 

$

(791

)

 

 

$

4,184

 

 

 

$

36,195

 

Net income per limited partner unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common - basic

 

$

0.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

1.07

 

Common - diluted

 

$

0.89

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

1.07

 

Subordinated - (basic and diluted)

 

$

0.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

1.07

 

Weighted average limited partner units outstanding (diluted):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common units - public

 

10,965,066

 

 

 

 

 

 

 

 

 

 

 

 

 

8,000,000

 

(g)

 

18,965,066

 

Common units - affiliated

 

79,308

 

 

 

 

 

3,983,540

 

(a)

 

 

 

 

 

 

 

 

 

4,062,848

 

Subordinated units - affiliated

 

10,939,436

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,939,436

 

 



 

SUSSER PETROLUEM PARNTERS LP

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR TWELVE MONTHS ENDED DECEMBER 31, 2013

(dollars in thousands except per unit)

 

 

 

Historical

 

Pro Forma Adjustments

 

 

 

 

 

 

 

SUSP

 

MACS

 

Aloha

 

MACS

 

 

 

Aloha

 

 

 

Equity
Offering

 

 

 

Pro Forma
Combined

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchandise sales

 

$

 

$

97,219

 

$

45,074

 

$

 

 

 

$

 

 

 

$

 

 

 

$

142,293

 

Motor fuel sales

 

4,476,908

 

1,384,457

 

702,345

 

(46,696

)(h)

 

 

(99,077

)(h)

 

 

 

 

 

6.417.937

 

Other Income

 

15,671

 

26,700

 

19,654

 

 

 

 

 

 

 

 

 

 

62,025

 

Total revenues

 

4,492,579

 

1,508,376

 

767,073

 

(46,696

)

 

 

(99,077

)

 

 

 

 

 

6,622,255

 

Cost of Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchandise

 

 

72,126

 

32,291

 

 

 

 

 

 

 

 

 

 

104,417

 

Motor fuel

 

4,419,004

 

1,329,890

 

635,205

 

(46,696

)(h)

 

 

(99,077

)(h)

 

 

 

 

 

6,238,326

 

Other

 

2,611

 

 

2,431

 

 

 

 

 

 

 

 

 

 

5,042

 

Total Cost of Sales

 

4,421,615

 

1,402,016

 

669,927

 

(46,696

)

 

 

(99,077

)

 

 

 

 

 

6,347,785

 

Gross Profit

 

70,964

 

106,360

 

97,146

 

 

 

 

 

 

 

 

 

 

274,470

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

21,015

 

45,699

 

60,994

 

(142

)

(b)

 

 

 

 

 

 

 

127,566

 

Loss (gain) on disposal of assets and impairment charge

 

324

 

1,511

 

 

 

 

 

 

 

 

 

 

 

1,835

 

Depreciation, amortization and accretion

 

8,687

 

18,138

 

8,224

 

 

 

 

204

 

(f)

 

 

 

 

35,253

 

Acquisition transaction costs

 

 

6,555

 

 

(6,555

)

(b)

 

 

 

 

 

 

 

 

Total operating expenses

 

30,026

 

71,903

 

69,218

 

(6,697

)

 

 

204

 

 

 

 

 

 

164,654

 

Income from operations

 

40,938

 

34,457

 

27,928

 

6,697

 

 

 

(204

)

 

 

 

 

 

109,816

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(3,471

)

(24,826

)

(3,288

)

(11,965

)

(a)

 

3,288

 

(d)

 

8,369

 

(g)

 

(37,058

)

 

 

 

 

 

 

 

 

 

 

 

 

(5,165

)

(e)

 

 

 

 

 

 

 

Other miscellaneous

 

 

(1,426

)

 

 

 

 

 

 

 

 

 

 

(1,426

)

Total other income (expense)

 

(3,471

)

(26,252

)

(3,288

)

(11,965

)

 

 

(1,877

)

 

 

8,369

 

 

 

(38,484

)

Income (loss) before income tax

 

37,467

 

8,205

 

24,640

 

(5,268

)

 

 

(2,081

)

 

 

8,369

 

 

 

71,332

 

Income tax (expense)benefit

 

(440

)

 

(9,192

)

4,079

 

(c)

 

 

 

 

 

 

 

(5,553

)

Net Income

 

37,027

 

8,205

 

15,448

 

(1,189

)

 

 

(2,081

)

 

 

8,369

 

 

 

65,779

 

Less: Net income attributable to noncontrolling interest

 

 

(2,816

)

 

 

 

 

 

 

 

 

 

 

(2,816

)

Net income attributable to Susser Petroleum Partners

 

$

37,027

 

$

5,389

 

$

15,448

 

$

(1,189

)

 

 

$

(2,081

)

 

 

$

8,369

 

 

 

$

62,963

 

Net income per limited partner unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common - basic

 

$

1.69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

1.86

 

Common - diluted

 

$

1.69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

1.86

 

Subordinated - (basis and diluted)

 

$

1.69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

1.86

 

Weighted average limited partner units outstanding (diluted):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common units - public

 

10,928,198

 

 

 

 

 

 

 

 

 

 

 

 

 

8,000,000

 

(g)

 

18,928,198

 

Common units - affiliated

 

36,060

 

 

 

 

 

3,983,540

 

(a)

 

 

 

 

 

 

 

 

 

4,019,600

 

Subordinated units - affiliated

 

10,939,436

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,939,436

 

 



 

SUSSER PETROLEUM PARTNERS LP

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

 

The unaudited pro forma condensed combined financial information presented above gives effect to multiple transactions. The unaudited pro forma condensed combined balance sheet gives effect to the MACS Acquisition, the  Aloha Acquisition and the Equity Offering as if these transactions had been consummated on June 30, 2014. The unaudited pro forma condensed combined statements of operations give effect to the MACS Acquisition, the Aloha Acquisition and the Equity Offering as if all of these transactions had been consummated as of the beginning of the respective periods presented.

 


(a)  To reflect the acquisition of MACS from ETP as follows:

 

·                  To reflect the issuance of 3,983,540 SUSP common units in exchange for the net assets acquired of $545.2 million.

·                  To reflect the elimination of historic partners’ equity of $545.2 million.

·                  To reflect the cash payment of $556 million for the net assets acquired as a deemed distribution.

·                  To reflect the estimated $49.7 million deferred income tax impact resulting from the transfer of certain acquired MACS assets to SUSP’s wholly-owned subsidiary Propco.

·                  To reflect a $556 million draw on our revolving credit facility to finance the cash payment made to ETP.  Interest of the revolving credit facility is calculated based on a variable rate.  The initial borrowing rate of 2.152% is assumed for the entire period presented.

 

The net adjustment to partners’ equity is comprised of the following adjustments (in millions):

 

Eliminate historic partners’ equity

 

$

(545.2

)

Issuance of units in exchange for net assets acquired

 

545.2

 

Deemed distribution

 

(556.0

)

Record deferred income tax

 

49.7

 

Net adjustment to partners’ equity

 

$

(506.3

)

 

(b)         To eliminate operations attributed to MACS Holdings, LLC (predecessor company of MACS) and acquisition costs related to ETP’s purchase of MACS in October 2013, as they do not have a continuing impact on SUSP’s results of operations.

 

(c)          To reflect the income tax provision for the estimated portion of MACS operations that will be included in Propco’s results of operations, at an estimated combined federal and state statutory tax rate of 39.6%.

 

(d)         To reflect Aloha’s debt repayment required prior to closing of the Aloha Acquisition, as required by the purchase and sale agreement, including related interest expense and $0.7 million of unamortized loan costs which is charged to equity.  The amount of outstanding debt as of June 30, 2014 was $33.8 million.   The cash balance at June 30, 2014 is insufficient to pay off the debt and maintain and agreed $45 thousand cash at closing, resulting in a $7.7 million cash deficit which is deducted from the purchase price.   Interest expense related to Aloha’s historic debt was $3.3 million and $1.7 million for the year ended December 31, 2013 and six months ended June 30, 2014, respectively.

 

(e)          To reflect proposed funding of Aloha Acquisition with a $240 million draw on our revolving credit facility.  Assumed interest rate of 2.152%, reflecting our 30-day LIBOR borrowing cost as of October 10, 2014, resulting in interest expense of $5.2 million and $2.6 million for the year ended December 31, 2013 and six months ended June 30, 2014, respectively.   A 1/8% change in the interest rate would impact annual interest expense by $0.3 million.

 

(f)           To reflect the acquisition of Aloha by Propco as follows:

 

·                  To reflect cash consideration paid of $240 million, less the $7.7 million required to complete the debt pay off.

·                  To reflect preliminary purchase price allocation, including estimated value of earn-out liability, which will be calculated as 50% of the amount by which certain gross profits of Aloha exceed a threshold amount each year through December 31, 2022.  An estimated value for trade name is included in intangible assets, and assumed to be amortized over 15 years.  A deferred income tax liability related to intangible assets is included in other noncurrent liabilities.

 



 

Following is the preliminary purchase price allocation for Aloha (in millions):

 

Total current assets

 

$

38.8

 

Property, plant and equipment

 

92.2

 

Goodwill

 

151.1

 

Intangible assets

 

10.5

 

Other assets

 

1.6

 

Total assets

 

294.2

 

Total current liabilities

 

21.7

 

Deferred income taxes

 

13.2

 

Other non-current liabilities

 

27.0

 

Total liabilities

 

61.9

 

Total consideration to be paid

 

$

232.3

 

 

(g)          To reflect the proposed equity offering of 8.0 million common units at an assumed price of $50.21 per unit, before discounts, commissions and other expenses.  Estimated net proceeds of $388.9 million are assumed to reduce borrowings on SUSP’s revolving credit facility, a portion of which was used to finance the MACS Acquisition.  Interest savings were calculated at our current revolver borrowing rate of 2.152%.

 

(h)         To conform the MACS and Aloha accounting policies for the presentation of motor fuel taxes as gross in motor fuel sales and motor fuel cost of sales, to SUSP’s accounting policy to present motor fuel taxes net in motor fuel sales and motor fuel cost of sales.