|HRG GROUP, INC. filed this Form 8-K on 12/03/2015|
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HRG GROUP, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Pro Forma Adjustments
(a) Represents the decrease in cash and cash equivalents resulting from consideration received, less estimated expenses and repayment of debt (in millions):
(1) Excludes $3.8 million of funds held in escrow that is to be released within 150 days from the transaction close date subject to the successful satisfaction of certain terms and conditions included in the asset purchase agreement.
(b) Represents the decrease in proved oil and natural gas properties related to the disposition of the Holly, Waskom, and Danville assets.
(c) Represents the decrease in debt as a result of the repayment of $147.0 million under Compass’ existing credit facility.
(d) Represents the decrease in royalties payable of $5.4 million attributable to the sale of the Holly, Waskom, and Danville assets.
(e) Represents the decrease in asset retirement obligations attributable to the sale of the Holly, Waskom, and Danville assets.
(f) Represents the elimination of oil and natural gas revenues; oil and natural gas direct operating costs; and other operating and general expenses, including the pro forma effect on depletion expense attributable to the Holly, Waskom, and Danville assets.
(g) Represents the change in impairment of oil and natural gas properties related to the pro forma effects of the removal of the Holly, Waskom, and Danville assets’ operations.
(h) Represents the reduction of interest expense for the effect of the $147.0 million repayment of amounts outstanding under the Compass credit facility.
(i) Represents the change in derivative gains and losses related to the pro forma effects of the removal of the Holly, Waskom, and Danville assets’ operations.
(j) Represents the estimated net impact on HRG’s stockholders’ equity related to the sale transaction, consisting of a gain on the sale of the the Holly, Waskom, and Danville assets of $98.9 million.
(k) Compass is not directly subject to federal income taxes. Instead, its taxable income or loss is allocated to its individual partners. However due to a full valuation allowance over deferred tax assets at HRG, these losses will not impact the net deferred tax balances.
(l) Adjustment reflects non-controlling interest in Compass’ pro forma net income adjustments using a non-controlling interest factor of 0.5% at September 30, 2015 and 0.3% for the year ended September 30, 2015.
(m) Basic and diluted earnings per share were recalculated based on 198,142,363 weighted-average common shares outstanding - basic and diluted for the year ended September 30, 2015.