EX-99.1 4 ex99.htm PRO-FORMA ex99.htm
Exhibit 99.1

Aquila, Inc.
Unaudited Pro Forma Financial Information

The accompanying unaudited pro forma consolidated financial statements present the pro forma results of the Company, taking into account the aggregate effect of the sale of its Colorado electric and Colorado, Iowa, Kansas and Nebraska natural gas distribution businesses assuming: (1) for the unaudited pro forma consolidated balance sheet, the sale closed on March 31, 2008, and (2) for the unaudited pro forma consolidated statement of income of the three months ended March 31, 2008 and the year ended December 31, 2007, the sale closed on the first day of the periods being presented.

The unaudited pro forma consolidated balance sheet as of March 31, 2008, and statement of income for the three months ended March 31, 2008 are based on the historical information provided in the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) for the period ended March 31, 2008.  The unaudited pro forma consolidated statement of income for the year ended December 31, 2007 is based on the historical information provided in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2007. The unaudited pro forma consolidated financial statements are for illustrative purposes only.  They are not necessarily indicative of the financial position or operating results that would have occurred had these transactions been completed on the first day of the period being presented, as assumed above, nor is the information necessarily indicative of future financial position or operating results of the Company.

The pro forma consolidated financial statements do not give effect to any transactions occurring after the consummation of the Asset Sale Transactions, including without limitation the Merger of the Company with a wholly-owned subsidiary of Great Plains Energy and any transactions undertaken in connection therewith.
 
 
 
Aquila, Inc.
Unaudited Pro Forma Consolidated Statement of Income
For the Three Months Ended March 31, 2008

In millions
Aquila, Inc.
as filed
Pro Forma Adjustments (a)
Aquila, Inc.
Pro Forma
Sales:
            
Electricity—regulated
$
 199.1  
$
 (50.7 )
$
 148.4  
Natural gas—regulated
   277.6     (277.6 )   –  
Other—non-regulated
   6.4     (7.5 )   (1.1 )
Total sales
   483.1     (335.8 )   147.3  
Cost of sales:
                  
Electricity—regulated
   110.7     (34.0 )   76.7  
Natural gas—regulated
   209.5     (209.5 )   –  
Other—non-regulated
   5.3     (5.0 )   .3  
Total cost of sales
   325.5     (248.5 )   77.0  
Gross profit
   157.6     (87.3 )   70.3  
Operating expenses:
                  
Operation and maintenance expense
   87.3     (30.5 )   56.8  
Taxes other than income taxes
   7.3     (3.0 )   4.3  
Depreciation and amortization expense
   29.1     (10.7 )   18.4  
Total operating expenses
   123.7     (44.2 )   79.5  
Operating income (loss)
   33.9     (43.1 )   (9.2 )
Other income (expense), net
   3.0     .4     3.4  
Interest expense
   32.0     –     32.0  
Income (loss) from continuing operations before income taxes
   4.9     (42.7 )   (37.8 )
Income tax benefit
   (3.6 )   –     (3.6 )
Income (loss) from continuing operations
   8.5     (42.7 )   (34.2 )
Earnings from discontinued operations, net of tax
   –     –     –  
Net income (loss)
$
 8.5  
$
 (42.7 )
$
 (34.2 )
 
 
 
Aquila, Inc.
Unaudited Pro Forma Consolidated Statement of Income
For the Year Ended December 31, 2007

In millions
Aquila, Inc.
as filed
Pro Forma Adjustments (a)
Aquila, Inc.
Pro Forma
Sales:
            
Electricity—regulated
$
 837.8  
$
 (178.0 )
$
 659.8  
Natural gas—regulated
   606.1     (606.1 )   –  
Other—non-regulated
   22.7     (30.9 )   (8.2 )
Total sales
   1,466.6     (815.0 )   651.6  
Cost of sales:
                  
Electricity—regulated
   449.5     (114.8 )   334.7  
Natural gas—regulated
   432.1     (432.1 )   –  
Other—non-regulated
   19.3     (16.4 )   2.9  
Total cost of sales
   900.9     (563.3 )   337.6  
Gross profit
   565.7     (251.7 )   314.0  
Operating expenses:
                  
Operation and maintenance expense
   320.1     (105.1 )   215.0  
Taxes other than income taxes
   28.2     (12.8 )   15.4  
Restructuring charges
   1.5     –     1.5  
Net loss on sale of assets and other charges
   1.3     –     1.3  
Depreciation and amortization expense
   108.3     (42.1 )   66.2  
Total operating expenses
   459.4     (160.0 )   299.4  
Operating income (loss)
   106.3     (91.7 )   14.6  
Other income, net
   24.4     1.9     26.3  
Interest expense
   142.8     –     142.8  
Loss from continuing operations before income taxes
   (12.1 )   (89.8 )   (101.9 )
Income tax expense (benefit)
   6.0     –     6.0  
Loss from continuing operations
   (18.1 )   (89.8 )   (107.9 )
Earnings from discontinued operations, net of tax
   12.7     –     12.7  
Net loss
$
 (5.4 )
$
 (89.8 )
$
 (95.2 )
 
 
 
Aquila, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of March 31, 2008

In millions
Aquila, Inc
as filed
Pro Forma Adjustments
  
Aquila, Inc.
Pro Forma
               
Assets
              
Current assets:
              
Cash and cash equivalents
$
 28.2  
$
 908.8  
(c)
$
 937.0  
Funds on deposit
   33.9     –       33.9  
Accounts receivable, net
   243.8     (117.9 )
(b)
   125.9  
Inventories and supplies
   78.7     (11.4 )
(b)
   67.3  
Price risk management assets
   46.0     (1.6 )
(b)
   44.4  
Regulatory assets, current
   43.7     (18.8 )
(b)
   24.9  
Other current assets
   21.1     (12.9 )
(b)
   8.2  
Total current assets
   495.4     746.2       1,241.6  
                     
Utility plant, net
   2,088.3     (537.2 )
(b)
   1,551.1  
Non-utility plant, net
   129.0     (2.0 )
(b)
   127.0  
Price risk management assets
   16.4     –       16.4  
Goodwill, net
   111.0     –       111.0  
Regulatory assets
   118.2     (36.5 )
(b)
   81.7  
Deferred charges and other assets
   41.1     24.3  
(b)
   65.4  
Total Assets
$
 2,999.4  
$
 194.8    
$
 3,194.2  
                     
Liabilities and Shareholders' Equity
                    
Current liabilities:
                    
Current maturities of long-term debt
$
 2.4  
$
 –    
$
 2.4  
Short-term debt
   100.0     –       100.0  
Accounts payable
   128.4     (64.8 )
(b)
   63.6  
Accrued interest
   31.4     (.5 )
(b)
   30.9  
Regulatory liabilities, current
   12.4     (8.0 )
(b)
   4.4  
Accrued compensation and benefits
   11.5     (1.6 )
(b)
   9.9  
Pension and post-retirement benefits, current
   3.3     (1.7 )
(b)
   1.6  
Other accrued liabilities
   63.1     16.2  
(b)(d)
 79.3  
Price risk management liabilities
   30.6     –       30.6  
Customer funds on deposit
   23.0     (12.3 )
(b)
   10.7  
Total current liabilities
   406.1     (72.7 )     333.4  
Long-term liabilities:
                    
Long-term debt, net
   1,034.1     –       1,034.1  
Deferred income taxes and credits
   –     –       –  
Price risk management liabilities
   .6     –       .6  
Pension and post-retirement benefits
   46.8     (21.2 )
(b)
   25.6  
Regulatory liabilities
   92.5     (5.0 )
(b)
   87.5  
Deferred credits
   53.4     (11.9 )
(b)
   41.5  
Total long-term liabilities
   1,227.4     (38.1 )     1,189.3  
                     
Common shareholders' equity
   1,365.9     305.6  
(e)
   1,671.5  
Total Liabilities and Shareholders' Equity
$
 2,999.4  
$
 194.8    
$
 3,194.2  
 
 
 
Aquila, Inc.
Notes to the Unaudited Pro Forma Consolidated Financial Statements


(a)  
These Unaudited Pro Forma Consolidated Statements of Income adjustments represent the elimination of income from continuing operations directly associated with the Asset Sale Transactions.
(b)  
These pro forma adjustments represent the elimination of assets and liabilities directly associated with the Asset Sale Transactions.
(c)  
This pro forma adjustment represents the estimated cash proceeds received in connection with the Asset Sale Transactions.
(d)  
This pro forma adjustment includes an accrual of$6.2 million of estimated transaction costs and a provision for pension funding of $11.8 million.
(e)   This pro forma adjustment represents an estimated gain of $305.6 million on the Asset Sale Transactions after transaction costs.