8-K 1 d8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ______________________ Date of Report (Date of earliest event reported) June 8, 2001 PLAINS RESOURCES INC. --------------------- (Exact name of registrant as specified in its charter) Delaware 13-2898764 (State of other jurisdiction of (I.R.S. Employer incorporation) Identification No.) 0-9808 (Commission File Number) 500 Dallas Street, Suite 700 Houston, Texas 77002 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (713) 654-1414. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On June 8, 2001, Plains Resources Inc. (the "Company") consummated the strategic restructuring it had previously announced on May 9, 2001. The Company issued a press release on June 11, 2001 to report this consummation. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Not applicable. (b) Pro Forma Financial Information. Plains Resources Inc. Unaudited Proforma Consolidated Financial Statements In a series of transactions, as described in the accompanying footnotes, on June 8, 2001 Plains Resources Inc. ("Plains" or the "Company") sold a portion of its interest in Plains All American Pipeline, L.P. ("PAA") to a group of investors and certain holders of shares of the Company's Series F Cumulative Convertible Preferred Stock and Series H Cumulative Convertible Preferred Stock converted such shares into shares of the Company's common stock (the "Transactions"). As a result of the Transactions and the sale of 3,750,000 common units by PAA in May 2001, the Company's aggregate ownership interest in PAA was reduced from approximately 54% at March 31, 2001 to approximately 34% subsequent to the Transactions. The following unaudited proforma consolidated financial statements give effect to the Transactions and the reclassification of Plains' investment in PAA to the equity method of accounting since the Transactions reduced Plains' ownership in PAA to less than the ownership percentage required to account for the Company's investment on a consolidated basis and the Company no longer has the ability to exercise control over PAA. The unaudited proforma consolidated financial statements are based on the historical consolidated financial statements of Plains, under the assumptions and adjustments set forth in the accompanying footnotes. The unaudited proforma consolidated statements of income for the three months ended March 31, 2001 and the year ended December 31, 2000 assume the Transactions were consummated on January 1, 2000 and the unaudited proforma consolidated balance sheet at March 31, 2001 assumes the Transactions were consummated on March 31, 2001. The adjustments contained in the unaudited proforma consolidated statements of income do not give effect to any nonrecurring items directly associated with the Transactions. The unaudited proforma consolidated financial statements are prepared for informational purposes only and are not necessarily indicative of the actual or future results of operations or financial condition that would have been achieved had the Transactions occurred at the dates assumed. The unaudited proforma consolidated financial statements should be read in conjunction with the Company's reports filed with the Securities and Exchange Commission on Form 10-K and Form 10-Q for the periods ended December 31, 2000 and March 31, 2001, respectively. Plains Resources Inc. Proforma Consolidated Balance Sheet (Unaudited) March 31, 2001 (in thousands of dollars)
Proforma Historical Adjustments Proforma ------------- ------------ ----------- ASSETS Current Assets $ (1,202) (a) 107,502 (b) (2,468) (c) Cash and cash equivalents $ 12,354 (1,246) (d) $ 114,940 Other current assets 431,486 (381,217) (a) 50,269 ------------- ------------ ----------- 443,840 (278,631) 165,209 ------------- ------------ ----------- Properties and Equipment Oil and natural gas properties - full cost method 833,564 1,575 (d) 835,139 Crude oil pipeline, gathering and terminal assets 471,611 (471,611) (a) - Other property and equipment 6,933 (3,219) (a) 3,714 ------------- ------------ ----------- 1,312,108 (473,255) 838,853 Less-accumulated depletion, depreciation and amortization (447,743) 31,273 (a) (416,470) ------------- ------------ ----------- 864,365 (441,982) 422,383 ------------- ------------ ----------- 53,858 (a) (23,194) (b) Investment in Plains All American Pipeline LP - 2,886 (d) 33,550 ------------- ------------ ----------- Other Assets (41,294) (b) 810 (d) Deferred income taxes 36,594 3,890 (e) - Other 68,306 (47,739) (a) 20,567 ------------- ------------ ----------- 104,900 (84,333) 20,567 ------------- ------------ ----------- $ 1,413,105 $ (771,396) $ 641,709 ============= ============ =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Notes payable and other current obligations $ 11,011 $ (10,500) (a) $ 511 (331,960) (a) 8,352 (b) Accounts payable and other current liabilities 399,392 5,856 (d) 81,640 ------------- ------------ ----------- 410,403 (328,252) 82,151 ------------- ------------ ----------- Long-Term Debt Bank debt 43,908 43,908 Bank debt of subsidiary 316,550 (316,550) (a) - Subordinated debt 277,449 277,449 Other 1,533 1,533 ------------- ------------ ----------- 639,440 (316,550) 322,890 ------------- ------------ ----------- (1,009) (a) Other Long-Term Liabilities 5,374 (263) (d) 4,102 ------------- ------------ ----------- Deferred Income Taxes - 3,890 (e) 3,890 ------------- ------------ ----------- Minority Interest in Plains All American Pipeline LP 159,838 (159,838) (a) - ------------- ------------ ----------- (23,108) (b) Cumulative Convertible Preferred Stock 50,000 (26,892) (c) - ------------- ------------ ----------- Stockholders' Equity Series D convertible preferred stock 23,300 23,300 Series H convertible preferred stock 84,785 (66,011) (c) 18,774 Common stock 1,908 664 (c) 2,572 Additional paid-in capital 140,548 92,239 (c) 232,787 57,770 (b) (2,468) (c) Accumulated deficit (71,039) (1,568) (d) (17,305) Other comprehensive income (883) (883) Treasury stock, at cost (30,569) (30,569) ------------- ------------ ----------- 148,050 80,626 228,676 ------------- ------------ ----------- $ 1,413,105 $ (771,396) $ 641,709 ============= ============ ===========
Plains Resources Inc. Proforma Consolidated Statements of Income (Unaudited) For the Three Months Ended March 31, 2001 (Amounts in thousands, except per share data)
Proforma Historical Adjustments Proforma ----------- ------------- ----------- Revenues Oil and natural gas sales $ 58,653 $ (421) (a) $ 58,232 Marketing, transportation, storage and terminalling 1,468,180 (1,468,180) (a) - ----------- ------------- ----------- 1,526,833 (1,468,601) 58,232 ----------- ------------- ----------- Costs and Expenses Production costs 16,180 - 16,180 Marketing, transportation, storage and terminalling 1,435,871 (1,435,871) (a) - General and administrative 13,071 (8,990) (a) 4,081 Depletion, depreciation and amortization 11,469 (4,670) (a) 6,799 ----------- ------------- ----------- 1,476,591 (1,449,531) 27,060 ----------- ------------- ----------- Income from Operations 50,242 (19,070) 31,172 Other Income (Expense) 6,836 (a) Equity in earnings of Plains All American Pipeline, L.P. - (2,487) (b) 4,349 Interest expense (13,572) 6,576 (a) (6,996) Other 2,639 (14) (a) 2,625 ----------- ------------- ----------- Income Before Minority Interest and Income Taxes 39,309 (8,159) 31,150 Minority interest in Plains All American Pipeline, L.P. (5,672) 5,672 (a) - ----------- ------------- ----------- Income Before Income Taxes 33,637 (2,487) 31,150 Current (expense) benefit (478) 35 (b) (443) Deferred (expense) benefit (12,207) 903 (b) (11,304) ----------- ------------- ----------- Income from Continuing Operations 20,952 (1,549) 19,403 Preferred dividend requirement (1,599) 1,250 (c) (349) ----------- ------------- ----------- Income from Continuing Operations Attributable to Common Shares $ 19,353 $ (299) $ 19,054 =========== ============= =========== Basic Earnings Per Common Share $ 1.11 $ 0.79 =========== =========== Diluted Earnings Per Common Share $ 0.72 $ 0.72 =========== =========== Weighted Average Shares Outstanding Basic 17,452 6,637 (c) 24,089 Diluted 28,928 (1,845) (c) 27,083
Plains Resources Inc. Proforma Consolidated Statements of Income (Unaudited) For the Year Ended December 31, 2000 (Amounts in thousands, except per share data)
Proforma Historical Adjustments Proforma ----------- ------------ --------- Revenues Oil and natural gas sales $ 149,342 $ (1,654) (a) $ 147,688 Marketing, transportation, storage and terminalling 6,425,644 (6,425,644) (a) - ----------- ------------ --------- 6,574,986 (6,427,298) 147,688 ----------- ------------ --------- Costs and Expenses Production costs 62,140 - 62,140 Marketing, transportation, storage and terminalling 6,292,615 (6,292,615) (a) - Unauthorized trading losses and related expenses 7,963 (6,963) (a) 1,000 General and administrative 50,776 (40,821) (a) 9,955 Depletion, depreciation and amortization 47,221 (24,522) (a) 22,699 Loss (gain) on disposition of assets (48,188) 48,188 (a) - ----------- ------------ --------- 6,412,527 (6,316,733) 95,794 ----------- ------------ --------- Income from Operations 162,459 (110,565) 51,894 Other Income (Expense) 50,115 (a) Equity in earnings of Plains All American Pipeline, L.P. - (18,428) (b) 31,687 Interest expense (55,828) 25,421 (a) (30,407) Other 7,411 (7,506) (a) (95) ----------- ------------ --------- Income Before Minority Interest and Income Taxes 114,042 (60,963) 53,079 Minority interest in Plains All American Pipeline, L.P. (42,535) 42,535 (a) - ----------- ------------ --------- Income Before Income Taxes 71,507 (18,428) 53,079 Current (expense) benefit (1,020) 257 (b) (763) Deferred (expense) benefit (24,563) 6,339 (b) (18,224) ----------- ------------ --------- Income from Continuing Operations 45,924 (11,832) 34,092 Preferred dividend requirement (14,725) 11,292 (c) (3,433) ----------- ------------ --------- Income from Continuing Operations Attributable to Common Shares $ 31,199 $ (540) $ 30,659 =========== ============ ========= Basic Earnings Per Common Share $ 1.75 $ 1.25 =========== ========= Diluted Earnings Per Common Share $ 1.56 $ 1.21 =========== ========== Weighted Average Shares Outstanding Basic 17,845 6,637 (c) 24,482 Diluted 29,373 (4,036) (c) 25,337
Plains Resources Inc. Notes to Unaudited Proforma Consolidated Financial Statements The unaudited proforma consolidated financial statements are based on the historical consolidated financial statements of Plains Resources Inc. ("Plains" or the "Company") under the assumptions and adjustments set forth herein. The unaudited proforma consolidated statements of income for the three months ended March 31, 2001 and the year ended December 31, 2000 assume the transactions reflected herein were consummated on January 1, 2000 and the unaudited proforma consolidated balance sheet at March 31, 2001 assumes such transactions were consummated on March 31, 2001. The adjustments contained in the unaudited proforma consolidated statements of income do not give effect to any nonrecurring items directly associated with such transactions. The unaudited proforma consolidated financial statements are prepared for informational purposes only and are not necessarily indicative of the actual or future results of operations or financial condition that would have been achieved had such transactions occurred at the dates assumed. The unaudited proforma consolidated financial statements should be read in conjunction with Plains' reports filed with the Securities and Exchange Commission on Form 10-K and Form 10-Q for the periods ended December 31, 2000 and March 31, 2001, respectively. The Transactions In a series of transactions on June 8, 2001, Plains sold a portion of its interest in Plains All American Pipeline, L.P. ("PAA") to a group of investors for approximately $155.0 million and certain holders of shares of the Company's Series F Cumulative Convertible Preferred Stock (the "Series F Preferred Stock") and Series H Cumulative Convertible Preferred Stock (the "Series H Preferred Stock") converted such shares into shares of the Company's common stock (the "Transactions"). The Company sold (i) 5.2 million Subordinated Units of PAA for $69.5 million in cash and 23,108 shares of its Series F Preferred Stock, valued at $45 million; and (ii) an aggregate 54% ownership interest in the general partner of PAA for $40.5 million in cash. In addition, the investor group and certain other stockholders converted 26,892 shares of the Series F Preferred Stock and 132,022 shares of the Series H Preferred Stock into a total of 6.6 million shares of the Company's common stock. As a result of the Transactions, all of the Series F Preferred Stock and all but 36,377 shares of the Series H Preferred Stock were retired or converted. Also as a result of the Transactions, certain of the Company's employees received transaction-related bonuses and other payments and vested in benefits in accordance with the terms of certain of the Company's employee benefit plans. At March 31, 2001, the Company's aggregate ownership interest in PAA was approximately 54%. Following the Transactions and after giving effect to the sale of 3,750,000 common units by PAA in May 2001, the Company's aggregate ownership interest in PAA was approximately 34%. Unaudited Proforma Consolidated Balance Sheet (a) To reclassify the accounts of PAA to the equity method of accounting because the sale of a portion of Plains' investment in PAA reduced the Company's interest in PAA to less than the ownership percentage required to account for the Company's investment on a consolidated basis and the Company no longer has the ability to exercise control over PAA. (b) To reflect the sale of: (i) 5.2 million Subordinated Units of PAA for $69.5 million in cash and 23,108 shares of Series F Preferred Stock; and (ii) an aggregate 54% ownership interest in the general partner of PAA for $40.5 million in cash, net of related transaction costs. The $57.8 million increase in Retained Earnings reflects the following items, net of income taxes (in millions): Gain on sale of Units $ 82.3 Transaction related costs (2.4) Deemed dividend upon redemption of Series F Preferred Stock (22.1) ---------- $ 57.8 ========== Such items are not reflected in the unaudited proforma consolidated statements of income since they are nonrecurring. (c) To reflect the conversion of 26,892 shares of Series F Preferred Stock into 2,236,639 shares of common stock and the conversion of 132,022 shares of Series H Preferred Stock into 4,400,725 shares of common stock. (d) To reflect certain transaction-related bonuses and other payments and the vesting by certain employees in benefits in accordance with the terms of certain of the Company's employee benefit plans. (e) To reclassify deferred income taxes. Unaudited Proforma Consolidated Statements of Income (a) To reclassify the accounts of PAA to the equity method of accounting because the sale of a portion of Plains' investment in PAA reduced the Company's interest to less than the ownership percentage required to account for the Company's investment on a consolidated basis and the Company no longer has the ability to exercise control over PAA. (b) To reflect the reduction in the Company's equity in the earnings of PAA, net of income taxes at the Company's effective rate (37.7% in 2001 and 35.8% in 2000). (c) To reflect the effect of (i) the tender of 23,108 shares of Series F Preferred Stock in connection with the Transactions; (ii) the conversion of 26,892 shares of Series F Preferred Stock into 2,236,639 shares of common stock; and (iii) the conversion of 132,022 shares of Series H Preferred Stock into 4,400,725 shares of common stock. (c) Exhibits. 99.1 Press Release issued by the Company on June 11, 2001. 99.2 Unit Transfer and Contribution Agreement among Kafu Holdings, LLC, PAAI LLC, Plains Resources Inc. and Plains All American Inc., dated as of May 8, 2001 (previously filed as Exhibit 99.2 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission, on May 10, 2001 and incorporated herein by reference). 99.3 Unit Transfer and Contribution Agreement among Sable Investments, L.P., Sable Holdings, L.P., PAAI LLC, Plains Resources Inc., Plains All American Inc. and James C. Flores, dated as of May 8, 2001 (previously filed as Exhibit 99.3 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission, on May 10, 2001 and incorporated herein by reference). 99.4 Unit Transfer and Contribution Agreement among E-Holdings III, L.P., PAAI LLC, Plains Resources Inc. and Plains All American Inc., dated as of May 8, 2001 (previously filed as Exhibit 99.4 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission, on May 10, 2001 and incorporated herein by reference). 99.5 Unit Transfer and Contribution Agreement among Strome Hedgecap Fund, L.P., PAAI LLC, Plains Resources Inc. and Plains All American Inc., dated as of June 8, 2001. 99.6 Unit Transfer and Contribution Agreement among Mark E. Strome, PAAI LLC, Plains Resources Inc. and Plains All American Inc., dated as of June 8, 2001. 99.7 Unit Transfer and Contribution Agreement among John T. Raymond, PAAI LLC, Plains Resources Inc. and Plains All American Inc., dated as of June 8, 2001. 99.8 Contribution Agreement among PAA Management, L.P., Plains Resources Inc. and Plains All American Inc., dated as of June 8, 2001. 99.9 First Amendment, dated as of June 8, 2001, to the Unit Transfer and Contribution Agreement among Kafu Holdings, LLC, PAAI LLC, Plains Resources Inc. and Plains All American Inc., dated as of May 8, 2001. 99.10 First Amendment, dated as of June 8, 2001, to the Unit Transfer and Contribution Agreement among E-Holdings III, L.P., PAAI LLC, Plains Resources Inc. and Plains All American Inc., dated as of May 8, 2001. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PLAINS RESOURCES INC. Date: June 13, 2001 /s/ Jere C. Overdyke, Jr. ______________________________ Jere C. Overdyke, Jr. Executive Vice President and Chief Financial Officer