Business Context and Reporting Period
This Form 8-K, filed on November 20, 2012, by NGL Energy Partners LP ("NGL"), serves as a Current Report to provide financial statements for three businesses acquired in separate transactions during 2011 and 2012. The filing satisfies disclosure requirements under Item 9.01 regarding financial statements of acquired businesses.
Key Financial Metrics and Transaction Details
The filing details the consideration paid for three acquisitions. Specific revenue, profit, or cash flow metrics for the acquired entities are contained in the attached exhibits (99.1, 99.2, 99.3) and are not summarized in the text of this report.
- Osterman Associated Companies: Acquired in October 2011. NGL issued 4,000,000 common units and paid $94.9 million net of cash acquired. A post-closing working capital payment of $4.8 million was made in November 2012.
- SemStream Non-Residential Division: Acquired in November 2011. NGL issued 8,932,031 common units and paid $91 million in cash for wholesale natural gas liquids supply, marketing operations, and 12 terminals.
- North American Propane, Inc.: Acquired in February 2012. NGL paid $69.8 million in cash for retail propane and distillate operations.
Material Changes and Unusual Items
The primary material event reported is the completion of the post-closing working capital payment of $4.8 million to the Osterman Associated Companies in November 2012. The filing also notes the inclusion of audited and unaudited financial statements for the acquired entities covering periods ending September 30, 2011, and December 31, 2011, which were not previously filed in their entirety.
Guidance, Outlook, and Risks
The filing text does not provide management commentary, forward-looking guidance, or specific risk factors related to future operations. The document is strictly a disclosure of historical financial data for acquired businesses.
Investor Verification Checklist
- Review Exhibit 99.1 for unaudited condensed financial statements of the SemStream Non-Residential Division (nine months ended Sept 30, 2011).
- Review Exhibit 99.2 for audited combined financial statements of the Osterman Associated Companies (years ended Sept 30, 2011, 2010, and 2009).
- Review Exhibit 99.3 for unaudited condensed consolidated financial statements of North American Propane, Inc. (three months ended Dec 31, 2011).
- Verify the impact of the $4.8 million working capital payment on NGL's cash flow for the period ending November 2012.
- Confirm the total equity dilution from the issuance of 12,932,031 common units across the Osterman and SemStream transactions.