Corporate and Other Activities
The period from January 1, 2012 to March 25, 2012 included $19 million in merger-related expenses. Subsequent to April 30, 2013, Corporate and other activities consists of the Company’s investment in Regency. Subsequent to September 1, 2013, Corporate and other activities includes the operations of NEG. MGE and NEG were previously reported in the Distribution segment. These operations are reported as discontinued operations for all periods presented and the reportable segment information has been recast to reflect the removal of the Distribution segment.
Supplemental Pro Forma Financial Information
The following unaudited pro forma condensed consolidated financial information of the Company has been prepared in accordance with Article 11 of Regulation S-X and reflects the pro forma impacts of the ETE Merger for the nine months ended September 30, 2012, giving effect to the ETE Merger as if it had occurred on January 1, 2012. This unaudited pro forma financial information is provided to supplement the discussion and analysis of the historical financial information and should be read in conjunction with such historical financial information. This unaudited pro forma information is for illustrative purposes only and is not necessarily indicative of the financial results that would have occurred if these transactions had been consummated on January 1, 2012.
Period from Acquisition
(March 26, 2012) to September 30,
Period from January 1, 2012 to March 25, 2012
Pro Forma Adjustments
Pro Forma Nine Months Ended September 30, 2012
Cost of natural gas and other energy
Operating, maintenance and general
Depreciation and amortization
Total operating expenses
OTHER INCOME (EXPENSE):
Earnings from unconsolidated investments
Total other expenses, net
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE
Income tax expense (benefit)
INCOME (LOSS) FROM CONTINUING OPERATIONS
Income from discontinued operations
NET INCOME (LOSS)
To eliminate merger-related costs incurred by the Company in connection with the ETE Merger, including change in control and severance costs. These costs are eliminated from the Company’s pro forma income statement because such costs would not have a continuing impact on the Company’s results of operations.
To record incremental depreciation on the excess purchase price allocated to property, plant and equipment based on a weighted average useful life of 24 years.
To adjust amortization included in interest expense to (i) reverse historical amortization of financing costs and fair value adjustments related to debt and (ii) record pro forma amortization related to the pro forma adjustment of the Company’s debt to fair value.
To adjust earnings from unconsolidated investments to (i) eliminate historical earnings related to Citrus to give effect to the transfer of the Company’s interest in Citrus in connection with the ETE Merger and (ii) record incremental earnings from the Company’s investment in ETP common units received in connection with the transfer of Citrus.