EX-99.6 9 h84357ex99-6.txt UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS 1 EXHIBIT 99.6 KINDER MORGAN ENERGY PARTNERS, L.P. AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS The unaudited pro forma combined financial statements of Kinder Morgan Energy Partners, L.P. and Subsidiaries (KMP) have been derived from the historical balance sheets and income statements of KMP and GATX Terminals Companies as of December 31, 2000 and for the year then ended. The unaudited pro forma combined financial statements have been prepared to give effect to the pending acquisition of the United States terminals and pipeline operations of GATX Terminals Companies for $983.8 million in cash plus assumed liabilities using the purchase method of accounting. This amount is subject to a working capital and debt adjustment based on a closing balance sheet to be provided on consummation of the acquisition. The acquisition is expected to be consummated in the first quarter of 2001. The unaudited pro forma combined financial statements have been prepared assuming the acquisition had been consummated on January 1, 2000. The purchase price allocated in the unaudited pro forma combined financial statements is based on management's preliminary estimate of the fair market values of assets to be acquired and liabilities to be assumed and is subject to adjustment. The unaudited pro forma combined financial statements include assumptions and adjustments as described in the accompanying notes and should be read in conjunction with the historical financial statements and related notes of KMP and GATX Terminals Companies incorporated herein. The unaudited pro forma combined financial statements may not be indicative of the results that would have occurred if the acquisition had been consummated on the date indicated or which will be obtained in the future. -1- 2 Kinder Morgan Energy Partners, L.P. and Subsidiaries Unaudited Pro Forma Combined Statement of Income
Year Ended December 31, 2000 -------------------------------- GATX Terminals KMP Companies Pro Forma Pro Forma Historical Historical Adjustments Combined ------------- ------------- ------------- ------------- Revenues $ 816,442 $ 262,614 $ (2,574)(f) $ 1,075,632 (850)(g) Costs and Expenses Cost of products sold 124,641 -- -- 124,641 Operations and maintenance 164,379 99,867 (1,121)(h) 263,125 Fuel and power 43,216 -- -- 43,216 Depreciation and amortization 82,630 39,631 (12,678)(i) 109,583 General and administrative 60,065 32,929 (1,266)(j) 91,728 Taxes, other than income taxes 25,950 -- -- 25,950 ------------- ------------- ------------- ------------- 500,881 172,427 (15,065) 658,243 Operating Income 315,561 90,187 11,641 417,389 Other Income (Expense) Earnings from equity investments 71,603 (2,361) 2,361(k) 71,603 Amortization of excess cost of investments (8,195) -- -- (8,195) Interest, net (93,284) (49,928) 41,769(l) (175,506) (72,070)(m) (1,993)(n) Other, net 14,584 -- -- 14,584 Gain on sale of assets -- 2,255 (2,255)(o) -- Minority Interest (7,987) -- (198)(p) (8,185) ------------- ------------- ------------- ------------- Income Before Income Taxes 292,282 40,153 (20,745) 311,690 Income Tax Benefit (Expense) (13,934) (14,027) 14,027(q) (13,934) ------------- ------------- ------------- ------------- Net Income $ 278,348 $ 26,126 $ (6,718) $ 297,756 ============= ============= ============= ============= General partner's interest in net income $ 109,470 12,612(r) $ 122,082 Limited partners' interest in net income 168,878 6,796(r) 175,674 ------------- ------------- ------------- Net income $ 278,348 19,408 $ 297,756 ============= ============= ============= Basic limited partners' net income per unit $ 2.68 $ 2.78 ============= ============= Number of Units used in Computation 63,106 63,106 ============= ============= Diluted limited partners' net income per unit $ 2.67 $ 2.78 ============= ============= Number of units used in computation 63,150 63,150 ============= =============
The accompanying notes are an integral part of these unaudited pro forma condensed financial statements. -2- 3 Kinder Morgan Energy Partners, L.P. and Subsidiaries Unaudited Pro Forma Combined Balance Sheet
As of December 31, 2000 --------------------------------- GATX Terminals KMP Companies Pro Forma Pro Forma Historical Historical Adjustments Combined --------------- --------------- --------------- --------------- ASSETS Current Assets Cash and cash equivalents $ 59,319 $ 379 $ (379)(a) $ 59,319 Accounts and notes receivable Trade 345,065 31,323 (130)(a) 376,258 Related parties 3,384 -- -- 3,384 Inventories Products 24,137 -- -- 24,137 Materials and supplies 4,972 -- -- 4,972 Gas imbalances 26,878 -- -- 26,878 Gas in underground storage 27,481 -- -- 27,481 Other current assets 20,025 1,256 (1)(a) 21,280 --------------- --------------- --------------- --------------- 511,261 32,958 (510) 543,709 --------------- --------------- --------------- --------------- Property, Plant and Equipment, net 3,306,305 659,304 468,209 (b) 4,433,818 Investments 417,045 -- -- 417,045 Notes receivable 9,101 -- -- 9,101 Receivables from excluded companies -- 125,261 (125,261)(a) -- Intangibles, net 345,305 9,800 (9,800)(c) 358,922 13,617 (c) Deferred charges and other assets 36,193 27,019 (1,498)(a) 61,714 --------------- --------------- --------------- --------------- TOTAL ASSETS $ 4,625,210 $ 854,342 $ 344,757 $ 5,824,309 =============== =============== =============== =============== LIABILITIES AND PARTNERS' CAPITAL Current Liabilities Accounts payable Trade $ 293,268 $ 5,792 $ (3,559)(a) 295,501 Related parties 8,255 -- -- 8,255 Current portion of long-term debt 648,949 7,273 983,754 (d) 1,639,976 Accrued rate refunds 1,100 -- -- 1,100 Gas imbalances 48,834 -- -- 48,834 Deferred revenue 43,978 -- -- 43,978 Accrued other liabilities 54,572 30,699 680 (a) 85,951 --------------- --------------- --------------- --------------- 1,098,956 43,764 980,875 2,123,595 --------------- --------------- --------------- --------------- Long-term Liabilities and Deferred Credits Long-term debt 1,255,453 129,746 -- 1,385,199 Deferred revenue 1,503 -- -- 1,503 Deferred income taxes -- 98,353 (98,353)(a) -- Other 94,062 66,690 (21,976)(a) 138,776 --------------- --------------- --------------- --------------- 1,351,018 294,789 (120,329) 1,525,478 --------------- --------------- --------------- --------------- Minority interest 58,169 -- -- 58,169 --------------- --------------- --------------- --------------- Parent investment and advances -- 515,789 (515,789)(e) -- Partners' Capital Common Units 1,957,357 -- -- 1,957,357 Class B Units 125,961 -- -- 125,961 General Partner 33,749 -- -- 33,749 --------------- --------------- --------------- --------------- 2,117,067 515,789 (515,789) 2,117,067 --------------- --------------- --------------- --------------- TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 4,625,210 $ 854,342 $ 344,757 $ 5,824,309 =============== =============== =============== ===============
The accompanying notes are an integral part of these unaudited pro forma condensed financial statements. -3- 4 NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS BASIS OF PRESENTATION The following described pro forma adjustments give recognition to the pending acquisition of the U.S. terminals and pipeline operations of GATX Terminals Companies for $983.8 million in cash plus assumed liabilities. a) Reflects the elimination of excluded assets and liabilities of GATX Terminals Companies which are not acquired or assumed in this pending acquisition pursuant to the Stock Purchase Agreement. Excluded assets generally consist of cash balances, capitalized financing costs, receivables from foreign subsidiaries and income tax refunds. Excluded liabilities generally consist of cash deficits, income taxes payable and retired employee benefit accruals. b) Reflects the preliminary allocation of the purchase price in excess of the net assets to be acquired to estimated fair value of property, plant and equipment and goodwill utilizing the purchase method of accounting for the acquisition as of December 31, 2000. The purchase price allocation is subject to revision. The purchase price in excess of net assets to be acquired and the preliminary allocation is: Purchase price $ 983,754 GATX Terminals Companies net assets of $515,789, less excluded net assets of $4,064 511,725 ---------- Excess of purchase price over net assets to be acquired $ 472,029 ========== Preliminary allocation: Property, plant and equipment $ 468,212 Goodwill 3,817 ---------- $ 472,029 ==========
c) To eliminate GATX historical goodwill and include fair value of goodwill reflected by preliminary allocation of the purchase price. d) Reflects borrowing of the purchase amount at an assumed rate of approximately 7.3% on a loan facility to be arranged by KMP's investment advisors. KMP has obtained a commitment letter for a floating rate credit facility with a consortium of banks. A .125% change in the assumed rate would increase or decrease interest expense by approximately $1.2 million. e) Reflects elimination of GATX Terminals Companies parent investment and advances. f) To eliminate operating revenue of GATX terminal sold in September 2000. g) To eliminate management fees earned from excluded foreign and domestic joint ventures. h) To eliminate operating expenses of GATX terminal sold in September 2000. i) To adjust depreciation expense for the preliminary allocation of purchase price using an estimated remaining useful life of 40 years. The actual range of useful lives may vary from this estimate. j) To eliminate costs attributable solely to excluded foreign operations. k) To eliminate loss from GATX equity investee sold in September 2000. -4- 5 l) To eliminate interest expense incurred on debt with affiliated companies. Such debt is an excluded liability and is classified within parent investment and advances on the historical balance sheet of GATX Terminals Companies as of December 31, 2000. m) To record interest expense on the purchase amount borrowed by KMP at an assumed rate of approximately 7.3%. n) To eliminate GATX interest income earned on receivables from excluded companies. o) To eliminate gain on GATX assets sold during 2000. p) To adjust minority interest expense for an allocation of increased net income attributable to this acquisition. q) To eliminate GATX corporate income tax. r) Gives effect to the allocation of pro forma net income to the general partner and the limited partners pursuant to sharing ratios provided in the KMP partnership agreement. Amounts are calculated giving consideration to cash available for distribution based on the pro forma combined financial statements. The general partner's interest in net income includes incentive distributions the general partner would have received based on total distributions. -5-