XML 99 R34.htm IDEA: XBRL DOCUMENT v2.4.0.6
Subsequent Events
12 Months Ended
Dec. 31, 2012
Subsequent Events  
Subsequent Events

28. Subsequent Events

        In January 2013, the Issuers completed a public offering for $1 billion in aggregate principal amount of 4.5% senior unsecured notes due in July 2023. The Partnership received net proceeds of approximately $986.9 million. A portion of the proceeds, together with cash on hand, was used to repurchase $81.1 million aggregate principal amount of the Partnership's 8.75% senior notes due April 2018, approximately $175 million of the outstanding principal amount of the Partnership's 6.5% senior notes due August 2021 and approximately $245 million of the outstanding principal amount of the Partnership's 6.25% senior notes due June 2022, with the remainder used to fund the Partnership's capital expenditure program and for general partnership purposes. The Partnership recorded a total pre-tax loss of approximately $38 million related to repurchases. The pre-tax loss consisted of approximately $7 million related to the non-cash write-off of the unamortized discount and deferred finance costs and approximately $31 million related to the payment of redemption premiums.

        In February 2013, the Partnership and EMG Utica entered into the Amended Utica LLC Agreement for MarkWest Utica EMG which replaces the original agreements discussed in Note 4. Pursuant to the Amended Utica LLC Agreement, the aggregate funding commitment of EMG Utica has increased from $500 million to $950 million (the "Minimum EMG Investment"). As part of this commitment, EMG Utica is required to fund, as needed, all capital required for MarkWest Utica EMG until such time as EMG Utica has contributed aggregate capital equal to $750 million (the "Tier 1 EMG Contributions"). Following the funding of the Tier 1 EMG Contributions, the Partnership will have the one time right to elect to fund up to 60% of all capital required for MarkWest Utica EMG until such time as EMG Utica has contributed aggregate capital equal to the Minimum EMG Investment, and EMG Utica will be required to fund all capital not elected to be funded by the Partnership. Once EMG Utica has funded the Minimum EMG Investment, the Partnership will be required to fund, as needed, 100% of all capital for MarkWest Utica EMG until such time as the aggregate capital that has been contributed by the Partnership and EMG Utica equals $2 billion. After such time, and until such time as the investment balances of the Partnership and EMG Utica are in the ratio of 70% and 30%, respectively (such time being referred to as the "Second Equalization Date"), EMG Utica will have the right, but not the obligation, to fund up to 10% of each capital call for MarkWest Utica EMG, and the Partnership will be required to fund all remaining capital not elected to be funded by EMG Utica. After the Second Equalization Date, the Partnership and EMG Utica will have the right, but not the obligation, to fund its pro rata portion (based on the respective investment balances) of any additional required capital and may also fund additional capital which the other party elects not to fund.

        Under the Amended Utica LLC Agreement, after EMG Utica has contributed more than $500 million to MarkWest Utica EMG, and prior to December 31, 2016, EMG Utica's investment balance will also be increased by a quarterly special allocation of income ("Preference Amount") that is based upon the amount of capital contributed by EMG Utica in excess of $500 million. No Preference Amount will accrue to EMG Utica's investment balance after December 31, 2016.

        If the Partnership's investment balance does not equal at least 51% of the aggregate investment balances of both Members as of December 31, 2016, then EMG Utica may require that Partnership purchase membership interests from EMG Utica so that, following the purchase, the Partnership's investment balance equals 51% of the aggregate investment balances of the Members. The purchase price payable would equal the investment balance associated with the membership interests so acquired from EMG Utica. If EMG Utica makes this election, the Partnership would be required to purchase the membership interests on or prior to March 1, 2017, but effective as of January 1, 2017.

        Under the Amended Utica LLC Agreement, the Partnership will continue to receive 60% of cash generated by MarkWest Utica EMG that is available for distribution until the earlier of December 31, 2016 and the date on which the Partnership's investment balance equals 60% of the aggregate investment balances of the Partnership and EMG Utica. After the earlier to occur of those dates, cash generated by MarkWest Utica EMG that is available for distribution will be allocated to the Partnership and EMG Utica in proportion to their respective investment balances.

        In contemplation of executing the Amended Utica LLC Agreement, the Partnership and EMG Utica had executed an amendment to Original Agreement in January 2013 that obligated the Partnership to temporarily fund MarkWest Utica EMG while EMG Utica completed efforts to raise additional capital to fund its remaining $150 million capital commitment under the Original Agreement. In February 2013, the Partnership contributed approximately $76.2 million to MarkWest Utica EMG and subsequently received a distribution of $61.2 million as reimbursement for the temporary funding. The remaining $15 million will be retained by MarkWest Utica EMG and treated as a capital contribution from the Partnership under the terms of the Amended Utica LLC Agreement.