Gas Natural Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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file	filename
8-K - FORM 8-K - Gas Natural Inc.	v415124_8k.htm
EX-99.2 - EXHIBIT 99.2 - Gas Natural Inc.	v415124_ex99-2.htm

Exhibit 99.1

Gas Natural Inc. and Subsidiaries

Condensed Consolidated Statement of Comprehensive Income - Pro Forma

Three Months Ended March 31, 2015 (Unaudited)

	Consolidated			Pro						Pro Forma
	Income			Forma			Footnote			Consolidated
	YTD 3/31/15			Adjustments			Reference			Income
REVENUES
Natural gas operations	$	54,462,759		$	(3,183,029	)		(1	)	$	51,279,730
Marketing and production		2,453,231			-						2,453,231
Total revenues		56,915,990			(3,183,029	)					53,732,961

COST OF SALES
Natural gas purchased		35,795,314			(1,933,961	)		(1	)		33,861,353
Marketing and production		2,306,889			-						2,306,889
Total cost of sales		38,102,203			(1,933,961	)					36,168,242

GROSS MARGIN		18,813,787			(1,249,068	)					17,564,719

OPERATING EXPENSES
Distribution, general, and administrative		7,012,371			(394,768	)		(1	)		6,617,603
Maintenance		375,903			(48,423	)		(1	)		327,480
Depreciation and amortization		1,878,721			-						1,878,721
Accretion		11,180			-						11,180
Goodwill impairment		-			-						-
Loss (gain) on contingent consideration liability		-			-						-
Provision for doubtful accounts		51,742			-						51,742
Taxes other than income		1,096,917			(93,754	)		(1	)		1,003,163
Total operating expenses		10,426,834			(536,945	)					9,889,889

OPERATING INCOME (LOSS)		8,386,953			(712,123	)					7,674,830

LOSS FROM UNCONSOLIDATED AFFILIATE		-			-						-
OTHER INCOME, NET		281,572			(3,950	)		(1	)		277,622
GAIN ON SALE OF MARKETABLE SECURITIES		-			-						-
ACQUISITION EXPENSE		-			-						-
INTEREST EXPENSE		(869,784	)		762			(2	)		(869,022	)

INCOME (LOSS) BEFORE INCOME TAXES		7,798,741			(715,311	)					7,083,430

INCOME TAX BENEFIT (EXPENSE)		(2,927,975	)		261,302			(3	)		(2,666,673	)

INCOME FROM CONTINUING OPERATIONS		4,870,766			(454,009	)					4,416,757

Discontinued operations, net of income taxes		(17,093	)		-						(17,093	)

NET INCOME		4,853,673			(454,009	)					4,399,664

Basic weighted shares outstanding		10,487,511			10,487,511						10,487,511
Dilutive effect of stock options		854			854						854
Diluted weighted shares outstanding		10,488,365			10,488,365						10,488,365

Basic and Diluted Earnings Per Share:
Continuing operations		0.46			(0.04	)					0.42
Discontinued operations		(0.00	)		-						(0.00	)
Net income per share		0.46			(0.04	)					0.42

Comprehensive Income:
Net income		4,853,673			(454,009	)					4,399,664
Other Comprehensive income(loss), net of Tax
Unrealized gain on available for sale securities, net of tax of $7,689		-			-						-
Accumulated unrealized gain on available for sale securities
transferred to earnings, net of tax of $63,651		-			-						-
Comprehensive Income		4,853,673			(454,009	)					4,399,664

(1) To record the revenue and expenses associated with the sale of EWW and EWD assets and liabilities.
(2) Reconciliation of change in interest:

		3/31/2015
	Long-term debt payoff	(4,500,000)
	Annual interest rate	6.16%
	Annual interest	(277,200)
	First quarter interest	(69,300)

	Line of credit payoff	(3,149,274)
	Weighted average interest	2.46%
	Annual interest	(77,501)
	First quarter interest	(19,375)

	Total change in interest	(88,675)

(3) To record income tax expense at 39.27% effective rate.

Gas Natural Inc. and Subsidiaries

Condensed Consolidated Statement of Comprehensive Income - Pro Forma

Year Ended December 31, 2014

	Consolidated			Pro						Pro Forma
	Income			Forma			Footnote			Consolidated
	YTD 12/31/14			Adjustments			Reference			Income
REVENUES
Natural gas operations	$	133,979,704		$	(10,927,150	)		(1	)	$	123,052,554
Marketing and production		9,517,287			-						9,517,287
Total revenues		143,496,991			(10,927,150	)					132,569,841

COST OF SALES
Natural gas purchased		85,793,155			(6,696,602	)		(1	)		79,096,553
Marketing and production		8,620,826			-						8,620,826
Total cost of sales		94,413,981			(6,696,602	)					87,717,379

GROSS MARGIN		49,083,010			(4,230,548	)					44,852,462

OPERATING EXPENSES
Distribution, general, and administrative		26,273,043			(1,503,420	)		(1	)		24,769,623
Maintenance		1,400,911			(175,420	)		(1	)		1,225,491
Depreciation and amortization		7,146,345			(541,776	)					6,604,569
Accretion		51,466			-						51,466
Goodwill impairment		-			-						-
Loss (gain) on contingent consideration liability		62,000			-						62,000
Provision for doubtful accounts		1,112,115			-						1,112,115
Taxes other than income		4,248,898			(320,880	)		(1	)		3,928,018
Total operating expenses		40,294,778			(2,541,496	)					37,753,282

OPERATING INCOME (LOSS)		8,788,232			(1,689,052	)					7,099,180

LOSS FROM UNCONSOLIDATED AFFILIATE		(351,724	)		-						(351,724	)
OTHER INCOME, NET		607,114			(27,900	)		(1	)		579,214
GAIN ON SALE OF MARKETABLE SECURITIES		183,371			-						183,371
ACQUISITION EXPENSE		(7,197	)		-						(7,197	)
INTEREST EXPENSE		(3,227,536	)		355,743			(2	)		(2,871,793	)

INCOME (LOSS) BEFORE INCOME TAXES		5,992,260			(1,361,209	)					4,631,051

INCOME TAX BENEFIT (EXPENSE)		(2,190,157	)		513,148			(3	)		(1,677,009	)

INCOME FROM CONTINUING OPERATIONS		3,802,103			-						2,954,042

Discontinued operations, net of income taxes		(40,326	)		-						(40,326	)

NET INCOME		3,761,777			-						2,913,716

Basic weighted shares outstanding		10,487,511			10,478,312						10,478,312
Dilutive effect of stock options		854			505						505
Diluted weighted shares outstanding		10,488,365			10,478,817						10,478,817

Basic and Diluted Earnings Per Share:
Continuing operations		0.36			-						0.28
Discontinued operations		(0.00	)		-						(0.00	)
Net income per share		0.36			-						0.28

Comprehensive Income:
Net income		3,761,777			-						2,913,716
Other Comprehensive income(loss), net of Tax
Unrealized gain on available for sale securities, net of tax of $7,689		-			14,811.00						14,811.00
Accumulated unrealized gain on available for sale securities
transferred to earnings, net of tax of $63,651		-			(119,720.00	)					(119,720.00	)
Comprehensive Income		3,761,777			(104,909	)					2,808,807

(1) To record the revenue and expenses associated with the sale of EWW and EWD assets and liabilities.
(2) Reconciliation of change in interest:

		12/31/2014
	Long-term debt payoff	(4,500,000)
	Annual interest rate	6.16%
	Annual interest	(277,200)
	First quarter interest

	Line of credit payoff	(3,149,274)
	Weighted average interest	2.45%
	Annual interest	(77,103)
	First quarter interest

	Total change in interest	(354,303)

(3)

To record income tax expense at 39.27% effective rate.

Gas Natural Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
March 31, 2015 (Unaudited)
	Consolidated			Pro						Pro Forma
	Before			Forma			Footnote			Consolidated
	Adjustments			Adjustments			Reference			Balance Sheet

ASSETS
CURRENT ASSETS
Cash and cash equivalents		2,971,003			7,644,532			(1	)		10,615,535
Accounts receivable		-			-						-
Trade, net		16,113,503			(667,042	)		(2	)		15,446,461
$469,374 and $370,909, respectively
Related parties		253,057			-						253,057
Unbilled gas		5,837,268			(153,019	)		(2	)		5,684,249
Note receivable, current portion		2,086			-						2,086
Inventory		-			-						-
Natural gas and propane		499,957			-						499,957
Materials and supplies		2,559,038			(175,493	)		(2	)		2,383,545
Prepaid income taxes		431,681			-						431,681
Regulatory assets, current		6,235,884			-						6,235,884
Recoverable cost of gas purchases		3,964,691			-						3,964,691
Derivative assets		1,737,873			-						1,737,873
Rate case costs		43,324			-						43,324
Unrecoverable costs		489,996			-						489,996
Deferred tax asset		608,235			-						608,235
Prepayments and other		1,135,716			(55,958	)		(2	)		1,079,758
Assets held for sale		801,711			-						801,711
Discontinued operations		-			-						-
Total current assets		37,449,139			6,593,020						44,042,159

PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment		211,716,485			(21,520,167	)					190,196,318
Less accumulated depreciation, depletion and amortization		(59,548,415	)		12,378,888						(47,169,527	)
PROPERTY, PLANT AND EQUIPMENT, net		152,168,070			(9,141,279	)					143,026,791

OTHER ASSETS
Notes receivable, non current		89,752			-						89,752
Regulatory assets, non current		2,077,900			(155,826	)		(2	)		1,922,074
Income taxes					-						-
Rate case costs					-						-
Unrecoverable costs					-						-
Debt issuance costs, net of amortization		976,244			-						976,244
Goodwill		16,155,672			-						16,155,672
Customer relationships		2,851,792			-						2,851,792
Restricted cash		1,897,683			-						1,897,683
Other assets		48,926			(33,274	)		(2	)		15,652
Total other assets		24,097,969			(189,100	)					23,908,869

TOTAL ASSETS	$	213,715,178		$	(2,737,359	)				$	210,977,819


LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Checks in excess of amounts on deposit		264,334			-						264,334
Line of credit		24,740,799			(3,149,274	)		(4	)		21,591,525
Accounts payable		-			-						-
Trade		13,141,887			(78,167	)		(2	)		13,063,720
Related parties		86,798			-						86,798
Notes payable, current portion		539,246			-						539,246
Contingent consideration, current portion		671,638			-						671,638
Derivative liabilities		1,766,472			-						1,766,472
Accrued liabilities		4,922,508			(468,160	)		(2	)		4,454,348
Taxes other than income					-						-
Vacation					-						-
Employee benefit plans					-						-
Interest					-						-
Deferred payments received from levelized billing					-						-
Accrued liabilities - related parties		210,736			-						210,736
Customer deposits		730,460			(91,113	)		(2	)		639,347
Obligation under capital lease - current		188,224			-						188,224
Regulatory liability, current		317,211			-						317,211
Build-to-suit liability		5,946,089			-						5,946,089
Other current liabilities		1,018,329			(33,379	)		(2	)		984,950
Liabilities held for sale		85,515			-						85,515
Discontinued operations		12,099			-						12,099
Total current liabilities		54,642,345			(3,820,093	)					50,822,252

LONG-TERM LIABILITIES
Deferred investment tax credits		107,927			-						107,927
Deferred tax liability		13,434,344			2,217,914			(6	)		15,652,258
Asset retirement obligation		1,207,698			-						1,207,698
Customer advances for construction		1,032,745			(34,742	)		(2	)		998,003
Regulatory liabilities, current		1,129,758			-						1,129,758
Income taxes					-						-
Asset retirement costs					-						-
Customer deposits long term		949,540			-						949,540
Long-term obligation under capital lease, less current portion		1,674,714			-						1,674,714
Contingent consideration, less current portion		75,362			-						75,362
Total long-term liabilities		19,612,088			2,183,172						21,795,260

NOTES PAYABLE, less current portion		39,588,284			(4,500,000	)		(3	)		35,088,284

COMMITMENTS AND CONTINGENCIES (see Note 12)

STOCKHOLDERS' EQUITY
Preferred stock; $0.15 par value, 1,500,000 shares authorized,
no shares issued or outstanding
Common stock; $0.15 par value,
Authorized: 30,000,000 and 30,000,000 shares, respectively
Issued: 10,487,511 and 10,487,511 shares, respectively
Outstanding: 10,487,511 and 10,487,511 shares, respectively		1,573,127			-						1,573,127
Capital in excess of par value		63,951,000			-						63,951,000
Accumulated other comprehensive income		-			-						-
Retained earnings		34,348,334			3,399,562			(5	)		37,747,896
Total stockholders' equity		99,872,461									103,272,023

TOTAL CAPITALIZATION		139,460,745									138,360,307

TOTAL LIABILITIES AND CAPITALIZATION	$	213,715,178								$	210,977,819

	$	-								$	-

(1) To record cash proceeds from sale of assets less payoff of $4,500,000 long-term debt and $3,149,274 line of credit
(2) To record sale of EWW and EWD assets and liabilities.
(3) To record payoff of long term debt with proceeds of sale.
(4) To record payoff of line of credit with proceeds of sale.
(5) To record net increase in retained earnings from gain on sale.
(6) To record income taxes accrued for gain on sale.

Gas Natural Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - July 8, 2015

Attached files

Gas Natural Inc. Reports