Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - QEP RESOURCES, INC. | Financial_Report.xls |
| 8-K - 8-K - QEP RESOURCES, INC. | a8-kqepfieldservicessale.htm |
| EX-10.2 - EXHIBIT - QEP RESOURCES, INC. | exhibit102-guaranty.htm |
| EX-10.3 - EXHIBIT - QEP RESOURCES, INC. | exhibit103-fourthamendment.htm |
| EX-99.1 - EXHIBIT - QEP RESOURCES, INC. | exhibit991-pressrelease.htm |
| EX-10.1 - EXHIBIT - QEP RESOURCES, INC. | exhibit101-amendmenttomipa.htm |
QEP RESOURCES, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
On October 19, 2014, QEP Resources, Inc. ("QEP" or "the Company"), through its wholly owned subsidiary, QEP Field Services Company ("QEP Field Services"), entered into a membership interest purchase agreement with Tesoro Logistics LP, to sell QEP's midstream business, including the Company's ownership interest in QEP Midstream Partners, LP ("QEP Midstream"), for an aggregate consideration of $2.5 billion in cash, including $230.0 million refinance debt at QEP Midstream (the "Transaction"). On December 2, 2014, QEP completed the Transaction, which is subject to customary post-closing adjustments. QEP will retain ownership of QEP Field Services’ Haynesville Gathering System.
The unaudited pro forma balance sheet data as of September 30, 2014, is presented as if the Transaction had occurred on September 30, 2014. The unaudited pro forma statements of income data for the nine month period ended September 30, 2014, and the years ended December 31, 2013, 2012, and 2011, are presented as if the Transaction occurred at the beginning of each period. The unaudited pro forma financial information is subject to adjustments and is presented for informational purposes only and does not purport to represent what the Company's results of operations or financial position would actually have been if the Transaction had in fact occurred on the dates discussed above. It also does not project or forecast the Company's consolidated results of operations or financial position for any future date or period.
QEP RESOURCES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, 2014 | Historical | Pro Forma Adjustments | Pro Forma | |||||||||
(in millions) | ||||||||||||
ASSETS | ||||||||||||
Current Assets | ||||||||||||
Cash and cash equivalents | $ | — | $ | 2,500.0 | (a) | $ | 1,337.5 | |||||
(230.0 | ) | (a) | ||||||||||
(897.5 | ) | (a) | ||||||||||
(35.0 | ) | (a) | ||||||||||
Accounts receivable, net | 599.4 | — | 599.4 | |||||||||
Fair value of derivative contracts | 32.6 | — | 32.6 | |||||||||
Gas, oil and NGL inventories, at lower of average cost or market | 16.4 | — | 16.4 | |||||||||
Prepaid expenses and other | 50.8 | — | 50.8 | |||||||||
Current assets of discontinued operations held for sale | 138.3 | (138.3 | ) | (b) | — | |||||||
Total Current Assets | 837.5 | 1,199.2 | 2,036.7 | |||||||||
Property, Plant and Equipment (successful efforts method for oil and gas properties) | ||||||||||||
Proved properties | 11,723.0 | — | 11,723.0 | |||||||||
Unproved properties | 1,120.5 | — | 1,120.5 | |||||||||
Midstream | 197.5 | — | 197.5 | |||||||||
Marketing and resources | 95.2 | — | 95.2 | |||||||||
Material and supplies | 55.3 | — | 55.3 | |||||||||
Total Property, Plant and Equipment | 13,191.5 | — | 13,191.5 | |||||||||
Less Accumulated Depreciation, Depletion and Amortization | ||||||||||||
Exploration and production | 4,915.0 | — | 4,915.0 | |||||||||
Midstream | 34.3 | — | 34.3 | |||||||||
Marketing and resources | 29.8 | — | 29.8 | |||||||||
Total Accumulated Depreciation, Depletion and Amortization | 4,979.1 | — | 4,979.1 | |||||||||
Net Property, Plant and Equipment | 8,212.4 | — | 8,212.4 | |||||||||
Fair value of derivative contracts | 12.7 | (3.5 | ) | (e) | 9.2 | |||||||
Other noncurrent assets | 39.4 | — | 39.4 | |||||||||
Noncurrent assets of discontinued operations held for sale | 1,174.2 | (1,174.2 | ) | (b) | — | |||||||
TOTAL ASSETS | $ | 10,276.2 | $ | 21.5 | $ | 10,297.7 | ||||||
LIABILITIES AND EQUITY | ||||||||||||
Current Liabilities | ||||||||||||
Checks outstanding in excess of cash balances | $ | 36.8 | $ | — | $ | 36.8 | ||||||
Accounts payable and accrued expenses | 691.4 | — | 691.4 | |||||||||
Production and property taxes | 73.5 | — | 73.5 | |||||||||
Interest payable | 34.1 | — | 34.1 | |||||||||
Fair value of derivative contracts | 4.5 | (4.3 | ) | (e) | 0.2 | |||||||
Deferred income taxes | 2.9 | — | 2.9 | |||||||||
Current liabilities of discontinued operations held for sale | 161.6 | (161.6 | ) | (b) | — | |||||||
Total Current Liabilities | 1,004.8 | (165.9 | ) | 838.9 | ||||||||
Long-term debt | 3,115.5 | (897.5 | ) | (a) | 2,218.0 | |||||||
Deferred income taxes | 1,500.8 | — | 1,500.8 | |||||||||
Asset retirement obligations | 162.3 | — | 162.3 | |||||||||
Fair value of derivative contracts | 0.2 | — | 0.2 | |||||||||
Other long-term liabilities | 90.3 | — | 90.3 | |||||||||
Noncurrent liabilities of discontinued operations held for sale | 402.0 | (172.0 | ) | (b) | — | |||||||
(230.0 | ) | (a) | ||||||||||
Commitments and contingencies | ||||||||||||
EQUITY | ||||||||||||
Common Shareholders' Equity | 3,505.6 | 1,981.6 | (c) | 5,487.2 | ||||||||
Noncontrolling interest | 494.7 | (494.7 | ) | (d) | — | |||||||
Total Equity | 4,000.3 | 1,486.9 | 5,487.2 | |||||||||
TOTAL LIABILITIES AND EQUITY | $ | 10,276.2 | $ | 21.5 | $ | 10,297.7 | ||||||
QEP RESOURCES, INC. | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
(Unaudited) | |||||||||||
Nine Months Ended September 30, 2014 | Historical | Pro Forma Adjustments (g) | Pro Forma | ||||||||
(in millions, except per share amounts) | |||||||||||
REVENUES | |||||||||||
Gas sales | $ | 609.2 | $ | — | $ | 609.2 | |||||
Oil sales | 1,041.0 | — | 1,041.0 | ||||||||
NGL sales | 179.3 | — | 179.3 | ||||||||
Other revenue | 5.1 | — | 5.1 | ||||||||
Purchased gas, oil and NGL sales | 780.1 | — | 780.1 | ||||||||
Total Revenues | 2,614.7 | — | 2,614.7 | ||||||||
OPERATING EXPENSES | |||||||||||
Purchased gas, oil and NGL expense | 775.5 | — | 775.5 | ||||||||
Lease operating expense | 177.0 | — | 177.0 | ||||||||
Gas, oil and NGL transportation and other handling costs | 198.5 | — | 198.5 | ||||||||
Gathering and other expense | 4.8 | — | 4.8 | ||||||||
General and administrative | 147.0 | — | 147.0 | ||||||||
Production and property taxes | 160.8 | — | 160.8 | ||||||||
Depreciation, depletion and amortization | 712.5 | — | 712.5 | ||||||||
Exploration expenses | 4.7 | — | 4.7 | ||||||||
Impairment | 3.6 | — | 3.6 | ||||||||
Total Operating Expenses | 2,184.4 | — | 2,184.4 | ||||||||
Net gain (loss) from asset sales | (210.3 | ) | — | (210.3 | ) | ||||||
OPERATING INCOME | 220.0 | — | 220.0 | ||||||||
Realized and unrealized gains (losses) on derivative contracts | (13.2 | ) | 2.1 | (e) | (11.1 | ) | |||||
Interest and other income | 7.8 | — | 7.8 | ||||||||
Income from unconsolidated affiliates | 0.2 | — | 0.2 | ||||||||
Interest expense | (128.4 | ) | 19.1 | (e) | (109.3 | ) | |||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 86.4 | 21.2 | 107.6 | ||||||||
Income tax provision | (26.1 | ) | (8.1 | ) | (34.2 | ) | |||||
NET INCOME FROM CONTINUING OPERATIONS | 60.3 | 13.1 | 73.4 | ||||||||
Net income attributable to noncontrolling interest | — | — | — | ||||||||
NET INCOME ATTRIBUTABLE TO QEP FROM CONTINUING OPERATIONS | $ | 60.3 | $ | 13.1 | $ | 73.4 | |||||
Earnings Per Common Share Attributable to QEP | |||||||||||
Basic from continuing operations | $ | 0.34 | $ | 0.41 | |||||||
Diluted from continuing operations | $ | 0.34 | $ | 0.41 | |||||||
Weighted-average common shares outstanding | |||||||||||
Used in basic calculation | 180.0 | 180.0 | |||||||||
Used in diluted calculation | 180.4 | 180.4 | |||||||||
Dividends per common share | $ | 0.06 | $ | 0.06 | |||||||
3
QEP RESOURCES, INC. | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
(Unaudited) | |||||||||||
Year Ended December 31, 2013 | Historical | Pro Forma Adjustments (f) | Pro Forma | ||||||||
(in millions, except per share amounts) | |||||||||||
REVENUES | |||||||||||
Gas sales | $ | 779.0 | $ | — | $ | 779.0 | |||||
Oil sales | 916.6 | — | 916.6 | ||||||||
NGL sales | 294.1 | (101.9 | ) | 192.2 | |||||||
Other revenue | 189.0 | (166.6 | ) | 22.4 | |||||||
Purchased gas, oil and NGL sales | 757.1 | 17.8 | 774.9 | ||||||||
Total Revenues | 2,935.8 | (250.7 | ) | 2,685.1 | |||||||
OPERATING EXPENSES | |||||||||||
Purchased gas, oil and NGL expense | 765.9 | 17.6 | 783.5 | ||||||||
Lease operating expense | 177.8 | 3.5 | 181.3 | ||||||||
Gas, oil and NGL transportation and other handling costs | 141.4 | 80.6 | 222.0 | ||||||||
Gathering and other expense | 90.6 | (82.2 | ) | 8.4 | |||||||
General and administrative | 191.1 | (30.7 | ) | 160.4 | |||||||
Production and property taxes | 166.5 | (5.2 | ) | 161.3 | |||||||
Depreciation, depletion and amortization | 1,016.0 | (52.2 | ) | 963.8 | |||||||
Exploration expenses | 11.9 | — | 11.9 | ||||||||
Impairment | 93.0 | — | 93.0 | ||||||||
Total Operating Expenses | 2,654.2 | (68.6 | ) | 2,585.6 | |||||||
Net gain (loss) from asset sales | 103.0 | 0.5 | 103.5 | ||||||||
OPERATING INCOME | 384.6 | (181.6 | ) | 203.0 | |||||||
Realized and unrealized gains (losses) on derivative contracts | 58.9 | (1.4 | ) | (e) | 57.5 | ||||||
Interest and other income | 5.2 | 10.1 | 15.3 | ||||||||
Income from unconsolidated affiliates | 5.8 | (5.8 | ) | — | |||||||
Interest expense | (163.3 | ) | (1.7 | ) | (145.3 | ) | |||||
19.7 | (e) | ||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 291.2 | (160.7 | ) | 130.5 | |||||||
Income tax provision | (119.8 | ) | 52.7 | (67.1 | ) | ||||||
NET INCOME | 171.4 | (108.0 | ) | 63.4 | |||||||
Net income attributable to noncontrolling interest | (12.0 | ) | 12.0 | — | |||||||
NET INCOME ATTRIBUTABLE TO QEP FROM CONTINUING OPERATIONS | $ | 159.4 | $ | (96.0 | ) | $ | 63.4 | ||||
Earnings Per Common Share Attributable to QEP | |||||||||||
Basic from continuing operations | $ | 0.89 | $ | 0.35 | |||||||
Diluted from continuing operations | $ | 0.89 | $ | 0.35 | |||||||
Weighted-average common shares outstanding | |||||||||||
Used in basic calculation | 179.2 | 179.2 | |||||||||
Used in diluted calculation | 179.5 | 179.5 | |||||||||
Dividends per common share | $ | 0.08 | $ | 0.08 | |||||||
QEP RESOURCES, INC. | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
(Unaudited) | |||||||||||
Year Ended December 31, 2012 | Historical | Pro Forma Adjustments (f) | Pro Forma | ||||||||
(in millions, except per share amounts) | |||||||||||
REVENUES | |||||||||||
Gas sales | $ | 667.4 | $ | — | $ | 667.4 | |||||
Oil sales | 532.6 | — | 532.6 | ||||||||
NGL sales | 322.1 | (137.9 | ) | 184.2 | |||||||
Other revenue | 181.6 | (154.1 | ) | 27.5 | |||||||
Purchased gas, oil and NGL sales | 646.1 | 13.9 | 660.0 | ||||||||
Total Revenues | 2,349.8 | (278.1 | ) | 2,071.7 | |||||||
OPERATING EXPENSES | |||||||||||
Purchased gas, oil and NGL expense | 655.6 | 15.1 | 670.7 | ||||||||
Lease operating expense | 172.3 | 3.4 | 175.7 | ||||||||
Gas, oil and NGL transportation and other handling costs | 148.9 | 49.2 | 198.1 | ||||||||
Gathering and other expense | 88.0 | (79.8 | ) | 8.2 | |||||||
General and administrative | 266.6 | (18.2 | ) | 248.4 | |||||||
Production and property taxes | 103.4 | (4.9 | ) | 98.5 | |||||||
Depreciation, depletion and amortization | 905.3 | (55.1 | ) | 850.2 | |||||||
Exploration expenses | 11.2 | — | 11.2 | ||||||||
Impairment | 133.0 | — | 133.0 | ||||||||
Total Operating Expenses | 2,484.3 | (90.3 | ) | 2,394.0 | |||||||
Net gain (loss) from asset sales | 1.2 | — | 1.2 | ||||||||
OPERATING INCOME | (133.3 | ) | (187.8 | ) | (321.1 | ) | |||||
Realized and unrealized gains (losses) on derivative contracts | 441.9 | (8.4 | ) | 440.9 | |||||||
7.4 | (e) | ||||||||||
Interest and other income | 6.6 | 8.4 | 15.0 | ||||||||
Income from unconsolidated affiliates | 6.8 | (6.8 | ) | — | |||||||
Loss from early extinguishment of debt | (0.6 | ) | — | (0.6 | ) | ||||||
Interest expense | (122.9 | ) | (3.4 | ) | (117.1 | ) | |||||
9.2 | (e) | ||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 198.5 | (181.4 | ) | 17.1 | |||||||
Income tax provision | (66.5 | ) | 62.4 | (4.1 | ) | ||||||
NET INCOME FROM CONTINUING OPERATIONS | 132.0 | (119.0 | ) | 13.0 | |||||||
Net income attributable to noncontrolling interest | (3.7 | ) | 3.7 | — | |||||||
NET INCOME ATTRIBUTABLE TO QEP FROM CONTINUING OPERATIONS | $ | 128.3 | $ | (115.3 | ) | $ | 13.0 | ||||
Earnings Per Common Share Attributable to QEP | |||||||||||
Basic from continuing operations | $ | 0.72 | $ | 0.07 | |||||||
Diluted from continuing operations | $ | 0.72 | $ | 0.07 | |||||||
Weighted-average common shares outstanding | |||||||||||
Used in basic calculation | 177.8 | 177.8 | |||||||||
Used in diluted calculation | 178.7 | 178.7 | |||||||||
Dividends per common share | $ | 0.08 | $ | 0.08 | |||||||
QEP RESOURCES, INC. | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
(Unaudited) | |||||||||||
Year Ended December 31, 2011 | Historical | Pro Forma Adjustments (f) | Pro Forma | ||||||||
(in millions, except per share amounts) | |||||||||||
REVENUES | |||||||||||
Gas sales | $ | 1,239.1 | $ | — | $ | 1,239.1 | |||||
Oil sales | 324.2 | — | 324.2 | ||||||||
NGL sales | 309.8 | (180.1 | ) | 129.7 | |||||||
Other revenue | 200.8 | (177.9 | ) | 22.9 | |||||||
Purchased gas, oil and NGL sales | 1,085.3 | 33.8 | 1,119.1 | ||||||||
Total Revenues | 3,159.2 | (324.2 | ) | 2,835.0 | |||||||
OPERATING EXPENSES | |||||||||||
Purchased gas, oil and NGL expense | 1,077.1 | 33.8 | 1,110.9 | ||||||||
Lease operating expense | 145.2 | 3.0 | 148.2 | ||||||||
Gas, oil and NGL transportation and other handling costs | 102.2 | 55.6 | 157.8 | ||||||||
Gathering and other expense | 107.3 | (98.7 | ) | 8.6 | |||||||
General and administrative | 123.2 | (25.6 | ) | 97.6 | |||||||
Production and property taxes | 105.4 | (4.9 | ) | 100.5 | |||||||
Depreciation, depletion and amortization | 765.6 | (48.7 | ) | 716.9 | |||||||
Exploration expenses | 10.5 | — | 10.5 | ||||||||
Impairment | 218.2 | — | 218.2 | ||||||||
Total Operating Expenses | 2,654.7 | (85.5 | ) | 2,569.2 | |||||||
Net gain (loss) from asset sales | 1.4 | — | 1.4 | ||||||||
OPERATING INCOME | 505.9 | (238.7 | ) | 267.2 | |||||||
Interest and other income | 4.1 | 5.1 | 9.2 | ||||||||
Income from unconsolidated affiliates | 5.5 | (5.5 | ) | — | |||||||
Loss from early extinguishment of debt | (0.7 | ) | — | (0.7 | ) | ||||||
Interest expense | (90.0 | ) | (2.1 | ) | (81.1 | ) | |||||
11.0 | (e) | ||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 424.8 | (230.2 | ) | 194.6 | |||||||
Income tax provision | (154.4 | ) | 84.7 | (69.7 | ) | ||||||
NET INCOME FROM CONTINUING OPERATIONS | 270.4 | (145.5 | ) | 124.9 | |||||||
Net income attributable to noncontrolling interest | (3.2 | ) | 3.2 | — | |||||||
NET INCOME ATTRIBUTABLE TO QEP FROM CONTINUING OPERATIONS | $ | 267.2 | $ | (142.3 | ) | $ | 124.9 | ||||
Earnings Per Common Share Attributable to QEP | |||||||||||
Basic from continuing operations | $ | 1.51 | $ | 0.71 | |||||||
Diluted from continuing operations | $ | 1.50 | $ | 0.70 | |||||||
Weighted-average common shares outstanding | |||||||||||
Used in basic calculation | 176.5 | 176.5 | |||||||||
Used in diluted calculation | 178.4 | 178.4 | |||||||||
Dividends per common share | $ | 0.08 | $ | 0.08 | |||||||
QEP RESOURCES, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Note 1 - Pro Forma Adjustments
(a) To record proceeds of $2.5 billion from the disposition, net of $230.0 million to refinance indebtedness at QEP Midstream, QEP debt extinguishment of $897.5 million, which includes $297.5 million related to QEP's revolving credit facility and $600.0 million related to QEP's term loan, and estimated related fees and expenses of $35.0 million.
(b) To eliminate assets and liabilities of discontinued operations related to the sale of QEP Field Services.
(c) To adjust shareholders' equity which is primarily related to the gain on sale of QEP Field Services that would have been recorded as of September 30, 2014.
(d) To eliminate noncontrolling interest of discontinued operations related to the sale of QEP Field Services.
(e) To eliminate interest expense, assets and liabilities and realized and unrealized gain or loss associated with interest rate derivatives, including the tax impact, related to certain QEP indebtedness that was extinguished in conjunction with the disposition.
(f) To eliminate revenues and expenses and the associated intercompany elimination adjustments, including the tax impact, related to the operations of QEP Field Services, excluding QEP's Haynesville Gathering System.
(g) With the exception of the disposition related adjustments specifically discussed in note (e) above, no additional pro forma adjustments were required for the nine months ended September 30, 2014, since the results of operations for QEP Field Services, excluding QEP's Haynesville Gathering System, were presented as discontinued operations in the Company's third quarter 2014 Form 10-Q.
7