Business Context and Reporting Period
This Form 8-K was filed by CenterPoint Energy, Inc. and its subsidiary CenterPoint Energy Resources Corp. on May 13, 2014. The report details a transaction under a Master Formation Agreement (MFA) entered into on March 14, 2013, with OGE Energy Corp. and affiliates of ArcLight Capital Partners, LLC to form Enable Midstream Partners, LP ("Enable").
Key Financial Metrics and Transaction Details
The filing does not provide standard financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity for the reporting period. Instead, it focuses on a specific asset contribution:
- Asset Contributed: A 24.95% interest in Southeast Supply Header, LLC ("SESH").
- Consideration Received: 6,322,457 common units representing limited partner interests in Enable.
- Adjustment: The unit count reflects a 1 for 1.279082616 reverse unit split effected by Enable.
- Cash Settlement: A cash payment may be required by either Enable or the subsidiary (CERC) if the fair market value of the SESH interest differs from the value of the common units issued.
Material Changes
The material change reported is the exercise of a put right by CenterPoint regarding its interest in SESH. This action initiates the transfer of the midstream asset to Enable in exchange for equity units. The filing does not provide comparative financial data against prior periods.
Outlook, Risks, and Unusual Items
Transaction Timing: The transaction is expected to close during the second quarter of 2014.
Forward-Looking Statements: The filing includes a caution that assumptions and projections regarding future events may vary materially from actual results.
Contingencies: The final consideration includes a potential cash adjustment based on fair market value assessments at the time of closing.
Investor Verification Checklist
- Verify the closing date of the transaction within the second quarter of 2014.
- Confirm the final fair market value of the SESH interest to determine if a cash settlement is required.
- Review the impact of the 6,322,457 Enable common units on CenterPoint's consolidated financial statements upon closing.
- Check for any subsequent filings regarding the final terms of the cash adjustment.