Form
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2020
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
_________
KAYNE ANDERSON ACQUISITION CORP.
Delaware | 81-4675947 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| ||
(713)493-2000
N/A
(Former name, former address and former fiscal year, if changed since last report)
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Class A common stock, $0.0001 par value | ALTM | Nasdaq Global Market |
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☒ | |||||
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date: As of November 10, 2017, there were 37,732,112 Class A common stock, par value $0.0001 (“Class A Common Stock”) and 9,433,028 shares of the Company’s Class B common stock, par value $0.0001 (“Class B Common Stock”), issued and outstanding.
KAYNE ANDERSON ACQUISITION CORP.
| 3,746,460 | ||||
Number of shares of registrant’s Class C common stock, par value $0.0001 per share issued and outstanding as of July 29, 2020 | 12,500,000 |
Item | Page | |
PART I — FINANCIAL INFORMATION | ||
1. | ||
2. | ||
3. | ||
4. | ||
PART II — OTHER INFORMATION | ||
1. | ||
1A. | ||
5. | ||
6. |
• | other factors disclosed under Part II, Item | 1A—Risk Factors of this Quarterly Report on Form 10-Q; and |
Bbl. One stock tank barrel of | 42 United States (U.S.) gallons liquid volume used herein in reference to crude oil, condensate or NGLs. |
• | Bbl/d. One Bbl per day. |
Bcf. One billion cubic feet of | natural gas. |
| Bcf/d. One Bcf per day. |
Btu. One British thermal unit, which is the quantity of heat required to | raise the temperature of a one-pound mass of water by one degree Fahrenheit. |
Field. An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and | the underground productive formations. |
| Formation. A layer of rock which has distinct characteristics that differs from nearby rock. |
• | MBbl. One thousand barrels of crude oil, condensate or NGLs. |
• | MBbl/d. One MBbl per day. |
• | Mcf. One thousand cubic feet of natural gas. |
• | Mcf/d. One Mcf per day. |
MMBbl. One million barrels of | crude oil, condensate or NGLs. |
• | MMBtu. One million British thermal units. |
• | MMcf. One million cubic feet of natural gas. |
• | MMcf/d. One MMcf per day. |
• | NGLs. Natural gas liquids. Hydrocarbons found in natural gas, which may be extracted as liquefied petroleum gas and natural gasoline. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
REVENUES: | ||||||||||||||||
Midstream services revenue — affiliate (Note 2) | $ | 31,616 | $ | 24,139 | $ | 72,383 | $ | 57,985 | ||||||||
Total revenues | 31,616 | 24,139 | 72,383 | 57,985 | ||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||
Operations and maintenance(1) | 9,508 | 14,005 | 20,099 | 30,403 | ||||||||||||
General and administrative(2) | 2,988 | 2,081 | 7,166 | 5,072 | ||||||||||||
Depreciation and accretion | 4,062 | 9,107 | 7,976 | 16,758 | ||||||||||||
Taxes other than income | 3,347 | 3,888 | 6,790 | 6,463 | ||||||||||||
Total costs and expenses | 19,905 | 29,081 | 42,031 | 58,696 | ||||||||||||
OPERATING INCOME (LOSS) | 11,711 | (4,942 | ) | 30,352 | (711 | ) | ||||||||||
OTHER INCOME (LOSS): | ||||||||||||||||
Unrealized derivative instrument loss | (10,585 | ) | — | (72,569 | ) | — | ||||||||||
Interest income | 2 | 806 | 9 | 2,967 | ||||||||||||
Income (loss) from equity method interests, net | 16,923 | (1,297 | ) | 33,221 | (1,028 | ) | ||||||||||
Other | (97 | ) | (17 | ) | (274 | ) | (17 | ) | ||||||||
Total other income (loss) | 6,243 | (508 | ) | (39,613 | ) | 1,922 | ||||||||||
Financing costs, net of capitalized interest | 292 | 478 | 565 | 986 | ||||||||||||
NET INCOME (LOSS) BEFORE INCOME TAXES | 17,662 | (5,928 | ) | (9,826 | ) | 225 | ||||||||||
Current income tax benefit | — | — | (696 | ) | — | |||||||||||
Deferred income tax benefit | — | (430 | ) | — | (5 | ) | ||||||||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | 17,662 | (5,498 | ) | (9,130 | ) | 230 | ||||||||||
Net income attributable to Preferred Unit limited partners | 18,764 | 4,143 | 37,026 | 4,143 | ||||||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | (1,102 | ) | (9,641 | ) | (46,156 | ) | (3,913 | ) | ||||||||
Net loss attributable to Apache limited partner | (847 | ) | (7,348 | ) | (36,048 | ) | (2,720 | ) | ||||||||
NET LOSS ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS | $ | (255 | ) | $ | (2,293 | ) | $ | (10,108 | ) | $ | (1,193 | ) | ||||
NET LOSS ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS, PER SHARE(3) | ||||||||||||||||
Basic | $ | (0.07 | ) | $ | (0.61 | ) | $ | (2.70 | ) | $ | (0.32 | ) | ||||
Diluted | $ | (0.07 | ) | $ | (0.61 | ) | $ | (2.84 | ) | $ | (0.32 | ) | ||||
WEIGHTED AVERAGE SHARES(3) | ||||||||||||||||
Basic | 3,746 | 3,746 | 3,746 | 3,746 | ||||||||||||
Diluted | 3,746 | 3,746 | 16,246 | 3,746 |
(1) | Includes amounts of $1.3 million and $2.0 million associated with related parties for the three months ended June 30, 2020 and 2019, respectively, and $2.8 million and $4.9 million for the six months ended June 30, 2020 and 2019, respectively. Refer to Note 2—Transactions with Affiliates. |
KAYNE ANDERSON ACQUISITION CORP.
September 30, 2017 | December 31, 2016 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 555,254 | $ | 7,500 | ||||
Prepaid expenses and other current assets | 130,792 | — | ||||||
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Total Current Assets | 686,046 | 7,500 | ||||||
Investment held in trust account | 378,284,003 | — | ||||||
Deferred offering costs | — | 38,234 | ||||||
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Total Assets | $ | 378,970,049 | $ | 45,734 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accrued formation and offering costs | $ | — | $ | 3,110 | ||||
Accrued expenses | 685,175 | — | ||||||
Accrued franchise taxes | 98,900 | |||||||
Accrued income taxes | 35,694 | — | ||||||
Sponsor note | — | 20,000 | ||||||
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Total Current Liabilities | 819,769 | 23,110 | ||||||
Deferred underwriting compensation | 13,206,239 | — | ||||||
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Total Liabilities | 14,026,008 | 23,110 | ||||||
Class A common stock subject to possible redemption; 35,994,404 and 0 shares, respectively, at September 30, 2017 and December 31, 2016 (at redemption value of approximately $10.00 per share) | 359,944,040 | — | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | — | — | ||||||
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 1,737,708 and 0 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively (excluding 35,994,404 shares subject to possible redemption as of September 30, 2017) | 174 | — | ||||||
Class B convertible common stock, $0.0001 par value; 20,000,000 shares authorized; 9,433,028 and 10,062,500 shares issued and outstanding of September 30, 2017 and December 31, 2016, respectively | 943 | 1,006 | ||||||
Additionalpaid-in capital | 5,513,873 | 23,994 | ||||||
Accumulated deficit | (514,989 | ) | (2,376 | ) | ||||
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Total Stockholders’ Equity | 5,000,001 | 22,624 | ||||||
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Total Liabilities and Stockholders’ Equity | $ | 378,970,049 | $ | 45,734 | ||||
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See
(2) | Includes amounts of $1.6 million and $1.0 million associated with related parties for the three months ended June 30, 2020 and 2019, respectively, and $3.6 million and $2.6 million for the six months ended June 30, 2020 and 2019, respectively. Refer to Note 2—Transactions with Affiliates. |
(3) | Share and per share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information. |
KAYNE ANDERSON ACQUISITION CORP.
are an integral part of this statement.
(unaudited)
Three Months Ended September 30, 2017 | Nine months Ended September 30, 2017 | |||||||
Revenues | $ | — | $ | — | ||||
Expenses | ||||||||
General and administrative expenses | 276,956 | 1,340,902 | ||||||
Franchise tax expense | 55,900 | 98,900 | ||||||
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Total expenses | 332,856 | 1,439,802 | ||||||
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Loss from operations | (332,856 | ) | (1,439,802 | ) | ||||
Other income — investment income on Trust Account | 809,858 | 1,353,883 | ||||||
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Income (loss) before income taxes | 477,002 | (85,919 | ) | |||||
Current income tax expense | (256,345 | ) | (426,694 | ) | ||||
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Net income (loss) attributable to common shares | $ | 220,657 | $ | (512,613 | ) | |||
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Weighted average number of shares outstanding: | ||||||||
Basic (excluding shares subject to redemption) | 11,191,898 | 10,582,053 | ||||||
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Diluted | 47,165,140 | 10,582,053 | ||||||
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Net income (loss) per common share: | ||||||||
Basic | $ | 0.02 | $ | (0.05 | ) | |||
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Diluted | $ | 0.00 | $ | (0.05 | ) | |||
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SeeCONSOLIDATED COMPREHENSIVE INCOME (LOSS)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | $ | 17,662 | $ | (5,498 | ) | $ | (9,130 | ) | $ | 230 | ||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | ||||||||||||||||
Share of equity method interests other comprehensive income (loss) | 390 | (1,043 | ) | (794 | ) | (1,043 | ) | |||||||||
COMPREHENSIVE INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | 18,052 | (6,541 | ) | (9,924 | ) | (813 | ) | |||||||||
Comprehensive income attributable to Preferred Unit limited partners | 18,764 | 4,143 | 37,026 | 4,143 | ||||||||||||
Comprehensive loss attributable to Apache limited partner | (547 | ) | (8,191 | ) | (36,659 | ) | (3,563 | ) | ||||||||
COMPREHENSIVE LOSS ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS | $ | (165 | ) | $ | (2,493 | ) | $ | (10,291 | ) | $ | (1,393 | ) |
KAYNE ANDERSON ACQUISITION CORP.
are an integral part of this statement.
For the nine months ended September 30, 2017
(unaudited)
Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Stockholders’ Equity | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balances, December 31, 2016 | — | $ | — | 10,062,500 | $ | 1,006 | $ | 23,994 | $ | (2,376 | ) | $ | 22,624 | |||||||||||||||
Sale of Class A Common Stock to Public | 37,732,112 | 3,773 | — | — | 377,317,347 | — | 377,321,120 | |||||||||||||||||||||
Forfeiture of Class B Common Stock by Sponsor | — | — | (629,472 | ) | (63 | ) | 63 | — | — | |||||||||||||||||||
Underwriters’ discount and offering expenses | — | — | — | — | (21,433,512 | ) | — | (21,433,512 | ) | |||||||||||||||||||
Sale of 6,364,281 Private Placement Warrants at $1.50 per warrant | — | — | — | — | 9,546,422 | — | 9,546,422 | |||||||||||||||||||||
Shares subject to possible redemption | (35,994,404 | ) | (3,599 | ) | — | — | (359,940,441 | ) | — | (359,944,040 | ) | |||||||||||||||||
Net loss | — | — | — | — | — | (512,613 | ) | (512,613 | ) | |||||||||||||||||||
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Balances, September 30, 2017 | 1,737,708 | $ | 174 | 9,433,028 | $ | 943 | $ | 5,513,873 | $ | (514,989 | ) | $ | 5,000,001 | |||||||||||||||
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See
June 30, | December 31, | |||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 1,880 | $ | 5,983 | ||||
Accounts receivable from Apache Corporation (Note 1) | — | 5,195 | ||||||
Revenue receivables (Note 3) | 13,572 | 15,461 | ||||||
Inventories | 3,771 | 4,027 | ||||||
Prepaid assets and other | 1,713 | 1,071 | ||||||
20,936 | 31,737 | |||||||
PROPERTY, PLANT AND EQUIPMENT: | ||||||||
Property, plant and equipment | 214,389 | 207,270 | ||||||
Less: Accumulated depreciation and amortization | (7,085 | ) | (1,468 | ) | ||||
207,304 | 205,802 | |||||||
OTHER ASSETS: | ||||||||
Equity method interests | 1,408,479 | 1,258,048 | ||||||
Deferred charges and other | 5,524 | 5,267 | ||||||
1,414,003 | 1,263,315 | |||||||
Total assets | $ | 1,642,243 | $ | 1,500,854 | ||||
LIABILITIES, NONCONTROLLING INTERESTS, AND EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable to Apache Corporation (Note 1) | $ | 165 | $ | — | ||||
Current debt (Note 5) | — | 9,767 | ||||||
Other current liabilities (Note 6) | 11,941 | 23,925 | ||||||
12,106 | 33,692 | |||||||
LONG-TERM DEBT | 493,000 | 396,000 | ||||||
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES: | ||||||||
Asset retirement obligation | 62,041 | 60,095 | ||||||
Embedded derivative | 175,498 | 102,929 | ||||||
Other non-current liabilities | 5,998 | 4,614 | ||||||
243,537 | 167,638 | |||||||
Total liabilities | 748,643 | 597,330 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 7) | ||||||||
Redeemable noncontrolling interest — Apache limited partner | 230,631 | 701,000 | ||||||
Redeemable noncontrolling interest — Preferred Unit limited partners | 592,625 | 555,599 | ||||||
EQUITY: | ||||||||
Class A Common Stock: $0.0001 par, 1,500,000,000 shares authorized, 3,746,460 shares issued and outstanding at June 30, 2020 and December 31, 2019(1) | 1 | 1 | ||||||
Class C Common Stock: $0.0001 par, 1,500,000,000 shares authorized, 12,500,000 shares issued and outstanding at June 30, 2020 and December 31, 2019(1) | 1 | 1 | ||||||
Additional paid-in capital | 473,532 | 39,822 | ||||||
Accumulated deficit | (402,741 | ) | (392,633 | ) | ||||
Accumulated other comprehensive loss | (449 | ) | (266 | ) | ||||
70,344 | (353,075 | ) | ||||||
Total liabilities, noncontrolling interests, and equity | $ | 1,642,243 | $ | 1,500,854 |
(1) | Share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information. |
KAYNE ANDERSON ACQUISITION CORP.
are an integral part of this statement.
For the nine months ended September 30, 2017
(unaudited)
Cash flows from operating activities: | ||||
Net loss | $ | (512,613 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Trust income retained in Trust Account (net of $391,000 for income taxes paid) | (962,883 | ) | ||
Changes in operating assets and liabilities: | ||||
Increase in prepaid expenses and other assets | (130,792 | ) | ||
Increase in accrued expenses and taxes, net | 816,659 | |||
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Net cash used in operating activities | (789,629 | ) | ||
Net cash used in investing activities, | ||||
Cash deposited into Trust Account | (377,321,120 | ) | ||
Cash flows from financing activities: | ||||
Proceeds from Public Offering | 377,321,120 | |||
Proceeds from sale of Private Placement Warrants | 9,546,422 | |||
Payment of underwriting costs | (7,546,422 | ) | ||
Payment of offering costs | (642,617 | ) | ||
Proceeds from Sponsor note | 245,000 | |||
Payment of Sponsor note | (265,000 | ) | ||
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Net cash provided by financing activities | 378,658,503 | |||
Net increase in cash | 547,754 | |||
Cash at beginning of period | 7,500 | |||
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Cash at end of period | $ | 555,254 | ||
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Supplemental disclosure of cash flow information: | ||||
Deferred underwriting compensation | $ | 13,206,239 | ||
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Income taxes paid | $ | 391,000 | ||
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See
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income (loss) including noncontrolling interests | $ | (9,130 | ) | $ | 230 | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Unrealized derivative instrument loss | 72,569 | — | ||||||
Depreciation and accretion | 7,976 | 16,758 | ||||||
Deferred income tax benefit | — | (5 | ) | |||||
Income (loss) from equity method interests, net | (33,221 | ) | 1,028 | |||||
Distributions from equity method interests | 37,536 | — | ||||||
Other | 489 | (564 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
(Increase) decrease in inventories | 256 | (484 | ) | |||||
Increase in prepaid assets and other | (642 | ) | (311 | ) | ||||
Decrease in revenue receivables (Note 2) | 1,889 | 1,930 | ||||||
(Increase) decrease in account receivables from/payable to affiliate | 1,301 | (3,347 | ) | |||||
Increase in accrued expenses | 6,392 | 6,453 | ||||||
Increase deferred credits and noncurrent liabilities | 1,382 | — | ||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 86,797 | 21,688 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Capital expenditures(1) | (26,520 | ) | (259,295 | ) | ||||
Proceeds from sale of assets | 6,773 | — | ||||||
Contributions to equity method interests | (154,386 | ) | (210,238 | ) | ||||
Distributions from equity method interests | 4,211 | — | ||||||
Acquisition of equity method interests | — | (228,165 | ) | |||||
Capitalized interest paid | (5,373 | ) | — | |||||
NET CASH USED IN INVESTING ACTIVITIES | (175,295 | ) | (697,698 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Redeemable noncontrolling interest — Preferred Unit limited partners, net | — | 611,249 | ||||||
Proceeds from revolving credit facility | 97,000 | — | ||||||
Finance lease | (11,789 | ) | (7,462 | ) | ||||
Deferred facility fees | (816 | ) | (792 | ) | ||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 84,395 | 602,995 | ||||||
DECREASE IN CASH AND CASH EQUIVALENTS | (4,103 | ) | (73,015 | ) | ||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 5,983 | 449,935 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 1,880 | $ | 376,920 | ||||
SUPPLEMENTAL CASH FLOW DATA: | ||||||||
Accrued capital expenditures(2) | $ | 1,409 | $ | 30,330 | ||||
Finance lease liability(3) | — | 29,000 | ||||||
Interest paid, net of capitalized interest | — | 1,493 | ||||||
Cash received for income tax refunds | 696 | — |
(1) | Following the Business Combination (as defined herein), capital expenditure amounts represent the portion of the total settlements with Apache in the period that are capital in nature, pursuant to the terms of the Construction, Operations and Maintenance Agreement (COMA). Refer to Note 1—Summary of Significant Accounting Policies and Note 2—Transactions with Affiliates for more information. |
(2) | Includes $0.7 million due to Apache and $3.6 million due from Apache for the six months ended June 30, 2020 and 2019, respectively, pursuant to the terms of the COMA. Refer to Note 2—Transactions with Affiliates for more information. |
(3) | The Company entered into a finance lease in the first quarter of 2019 for power generators, which ended during the first quarter of 2020. The Company then exercised its option to purchase the generators. |
KAYNE ANDERSON ACQUISITION CORP.
are an integral part of this statement.
Redeemable Noncontrolling Interest — Preferred Unit Limited Partners(1) | Redeemable Noncontrolling Interest — Apache Limited Partner | Class A Common Stock | Class C Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Total Equity | |||||||||||||||||||||||||||||||
Shares(2) | Amount | Shares(2) | Amount | |||||||||||||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||||||||||||
For the Quarter Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2019 | $ | — | $ | 1,504,500 | 3,746 | $ | 1 | 12,500 | $ | 1 | $ | 440,658 | $ | (212,646 | ) | $ | — | $ | 228,014 | |||||||||||||||||||
Issuance of Series A Cumulative Redeemable Preferred Units | 516,790 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Net income (loss) | 3,364 | (7,348 | ) | — | — | — | — | �� | — | (1,514 | ) | — | (1,514 | ) | ||||||||||||||||||||||||
Accretion of redeemable noncontrolling interest | 779 | — | — | — | — | — | — | (779 | ) | — | (779 | ) | ||||||||||||||||||||||||||
Change in redemption value of noncontrolling interests | — | (223,657 | ) | — | — | — | — | 32,874 | 190,783 | — | 223,657 | |||||||||||||||||||||||||||
Accumulated other comprehensive loss | — | (843 | ) | — | — | — | — | — | — | (200 | ) | (200 | ) | |||||||||||||||||||||||||
Balance at June 30, 2019 | $ | 520,933 | $ | 1,272,652 | 3,746 | $ | 1 | 12,500 | $ | 1 | $ | 473,532 | $ | (24,156 | ) | $ | (200 | ) | $ | 449,178 | ||||||||||||||||||
For the Quarter Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | $ | 573,861 | $ | 231,178 | 3,746 | $ | 1 | 12,500 | $ | 1 | $ | 473,532 | $ | (402,486 | ) | $ | (539 | ) | $ | 70,509 | ||||||||||||||||||
Net income (loss) | 18,764 | (847 | ) | — | — | — | — | — | (255 | ) | — | (255 | ) | |||||||||||||||||||||||||
Accumulated other comprehensive income | — | 300 | — | — | — | — | — | — | 90 | 90 | ||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | 592,625 | $ | 230,631 | 3,746 | $ | 1 | 12,500 | $ | 1 | $ | 473,532 | $ | (402,741 | ) | $ | (449 | ) | $ | 70,344 |
(1) | Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 10—Series A Cumulative Redeemable Preferred Units. |
(2) | Share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information. |
Redeemable Noncontrolling Interest — Preferred Unit Limited Partners(1) | Redeemable Noncontrolling Interest — Apache Limited Partner | Class A Common Stock | Class C Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Total Equity | |||||||||||||||||||||||||||||||
Shares(2) | Amount | Shares(2) | Amount | |||||||||||||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||||||||||||
For the Six Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | — | $ | 1,940,500 | 3,746 | $ | 1 | 12,500 | $ | 1 | $ | 30 | $ | (213,746 | ) | $ | — | $ | (213,714 | ) | ||||||||||||||||||
Issuance of Series A Cumulative Redeemable Preferred Units | 516,790 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Net income (loss) | 3,364 | (2,720 | ) | — | — | — | — | — | (414 | ) | — | (414 | ) | |||||||||||||||||||||||||
Accretion of redeemable noncontrolling interest | 779 | — | — | — | — | — | — | (779 | ) | — | (779 | ) | ||||||||||||||||||||||||||
Change in redemption value of noncontrolling interests | — | (664,285 | ) | — | — | — | — | 473,502 | 190,783 | — | 664,285 | |||||||||||||||||||||||||||
Accumulated other comprehensive loss | — | (843 | ) | — | — | — | — | — | — | (200 | ) | (200 | ) | |||||||||||||||||||||||||
Balance at June 30, 2019 | $ | 520,933 | $ | 1,272,652 | 3,746 | $ | 1 | 12,500 | $ | 1 | $ | 473,532 | $ | (24,156 | ) | $ | (200 | ) | $ | 449,178 | ||||||||||||||||||
For the Six Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | 555,599 | $ | 701,000 | 3,746 | $ | 1 | 12,500 | $ | 1 | $ | 39,822 | $ | (392,633 | ) | $ | (266 | ) | $ | (353,075 | ) | |||||||||||||||||
Net income (loss) | 37,026 | (36,048 | ) | — | — | — | — | — | (10,108 | ) | — | (10,108 | ) | |||||||||||||||||||||||||
Change in redemption value of noncontrolling interests | — | (433,710 | ) | — | — | — | — | 433,710 | — | — | 433,710 | |||||||||||||||||||||||||||
Accumulated other comprehensive loss | — | (611 | ) | — | — | — | — | — | — | (183 | ) | (183 | ) | |||||||||||||||||||||||||
Balance at June 30, 2020 | $ | 592,625 | $ | 230,631 | 3,746 | $ | 1 | 12,500 | $ | 1 | $ | 473,532 | $ | (402,741 | ) | $ | (449 | ) | $ | 70,344 |
(1) | Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 10—Series A Cumulative Redeemable Preferred Units. |
(2) | Share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information. |
(unaudited)
Note 1—Description
Organization
transmission assets in the Permian Basin of West Texas. Construction on the assets began in the fourth quarter of 2016, and operations commenced in the second quarter of 2017. Additionally, the Company owns equity interests in 4 separate Permian Basin pipeline entities that have or will have access to various points along the Texas Gulf Coast. The Company’s operations consist of 1 reportable segment.
On April 4, 2017, the Company closedbusinesses. KAAC completed its initial public offering (“Public Offering”) (See Notein the second quarter of 2017.
Sponsor
The Company’s sponsor is Kayne Anderson Sponsor,wholly-owned subsidiary, Altus Midstream GP LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for(Altus Midstream GP), is the Company’s Public Offering (as described in Note 3) was declared effective by the United States Securities and Exchange Commission (the “SEC”) on March 29, 2017.
The Trust Account
The proceeds held in the trust account with American Stock Transfer & Trust Company, LLC acting as trustee (the “Trust Account”) are invested in money market funds that meet certain conditions under Rule2a-7 under the Investment Company Actsole general partner of 1940, as amended (the “Investment Company Act”) and that invest only in direct U.S. government obligations. Funds will remain in the Trust Account until the earlier of (i) the consummation of the Initial Business Combination or (ii) the distribution of the Trust Account proceeds as described below. The remaining proceeds outside the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses.
The Company’s amended and restated certificate of incorporation provides that, other than the withdrawal of interest to pay taxes, if any, none of the funds held in the Trust Account will be released until the earlier of: (i) the completion of the Initial Business Combination; (ii) the redemption of any shares of Class A Common Stock included in the units (the “Public Shares”) sold in the Public Offering that have been properly tendered in connection with a stockholder vote to amend the Company’s certificate of incorporation to modify the substance or timing of its obligation to redeem 100% of such shares of Class A Common Stock if it does not complete the Initial Business Combination within 24 months from the closing of the Public Offering; and (iii) the redemption of 100% of the shares of Class A Common Stock included in the Units sold in the Public Offering if the Company is unable to complete an Initial Business Combination within 24 months from the closing of the Public Offering (subject to the requirements of law). The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public stockholders.
Initial Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating an Initial Business Combination. The Initial Business Combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into the Initial Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect an Initial Business Combination.
Altus Midstream LP. The Company after signing a definitive agreement for an Initial Business Combination, will either (i) seek stockholder approval of the Initial Business Combination at a meeting called for such purpose in connection withoperates its business through Altus Midstream LP and its subsidiaries, which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Initial Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable, or (ii) provide stockholders with the opportunity to sell their Public Shares to theinclude Altus Midstream Operating. The Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable. The decision as to whether the Company will seek stockholder approval of the Initial Business Combination or will allow stockholders to sell their Public Shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval, unless a vote is required by law or under rules of The Nasdaq Stock Market. If the Company seeks stockholder approval, it will complete its Initial Business Combination only if a majorityholds approximately 23.1 percent of the outstanding shares of common stock voted are votedCommon Units, and a controlling interest in favor ofAltus Midstream, while Apache holds the Initial Business Combination. However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001 upon consummation of the Initial Business Combination. In such case, the Company would not proceed with the redemption of its Public Shares and the related Initial Business Combination, and instead may search for an alternate Initial Business Combination.
If the Company holds a stockholder vote or there is a tender offer for shares in connection with an Initial Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable. As a result, such shares of Class A Common Stock will be recorded at redemption amount and classified as temporary equity upon the completion of the Public Offering, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity.”
Pursuant to the Company’s amended and restated certificate of incorporation, if the Company is unable to complete the Initial Business Combination within 24 months from the closing of the Public Offering, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, subject to lawfully available funds therefor, redeem the Public Shares, at aper-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay the Company’s franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. The Sponsor and the Company’s officers and directors have entered into letter agreements with the Company, pursuant to which they have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares (as defined below) held by them if the Company fails to complete the Initial Business Combination within 24 months of the closing of the Public Offering. However, if the Sponsor or any of the Company’s directors, officers or affiliates acquire shares of Class A Common Stock in or after the Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete the Initial Business Combination within the prescribed time period.
In the event of a liquidation, dissolution or winding up of the Company after an Initial Business Combination, the Company’s stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. The Company’s stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that the Company will provide its stockholders with the opportunity to redeem their Public Shares for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, upon the completion of the Initial Business Combination, subject to the limitations described herein.
Note 2—Summary of Significant Accounting Policies
76.9 percent.
In connection with the Company’s assessment of going concern considerations in accordance with ASU2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern”, as of September 30, 2017, the Company does not have sufficient liquidity to meet its current obligations. However, management has determined that the Company has access to funds from the Sponsor that are sufficient to fund the working capital needs of the Company for a minimum one year from the date ofBusiness Combination, and subsequent issuance of these financial statements.
The accompanying unaudited interim condensed financial statements should be read in conjunction withPreferred Units, the audited financial statements and notes thereto included inAmended LPA), the final prospectus filedlimited partner interests held by the Company with the SEC on March 30, 2017 and with the audited balance sheet included in the Form8-K filed by the Company with the SEC on April 10, 2017 and the unaudited pro forma balance sheet included in the Form8-K filed by the Company with the SEC on April 26, 2017.
Emerging Growth Company
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being requiredApache are equal to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities and Exchange Act of 1934, as amended, or the “Exchange Act”) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply tonon-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of the Company’s financial statement with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Net Income (Loss) Per Common Share
Net income (loss) per common share is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period, plus, to the extent dilutive, the incremental number of shares of the Company’s Class C common stock, $0.0001 par value (Class C Common Stock), held by Apache.
Concentrationspecified events, unless otherwise redeemed by Altus Midstream.
Financial instruments that potentially subject the Company to concentrationsPreferred Units. Certain redemption features embedded within the terms of credit risk consist of cash accountsthe Preferred Units require bifurcation and measurement at fair value and are accounted for on the Company’s consolidated balance sheet as a long-term liability embedded derivative.
Financial Instruments
The fair value
equity method interests.
The preparation
Deferred Offering Costs
these estimates and assumptions used in preparation of its financial statements, and changes in these estimates are recorded when known.
Income Taxes
Company, which improves
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
MIDSTREAM SERVICES REVENUE — AFFILIATE: | |||||||||||||||
Gas gathering and compression | $ | 4,394 | $ | 2,697 | $ | 10,114 | $ | 6,310 | |||||||
Gas processing | 23,184 | 18,395 | 53,080 | 43,679 | |||||||||||
Transmission | 3,226 | 2,977 | 7,401 | 7,831 | |||||||||||
NGL transmission | 587 | 70 | 1,413 | 165 | |||||||||||
Other | 225 | — | 375 | — | |||||||||||
$ | 31,616 | $ | 24,139 | $ | 72,383 | $ | 57,985 |
June 30, | December 31, | |||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
Gathering, processing and transmission systems and facilities | $ | 210,738 | $ | 198,133 | ||||
Construction in progress(1) | 328 | 5,443 | ||||||
Other property and equipment | 3,323 | 3,694 | ||||||
Total property, plant and equipment | 214,389 | 207,270 | ||||||
Less: accumulated depreciation and amortization | (7,085 | ) | (1,468 | ) | ||||
Total property, plant and equipment, net | $ | 207,304 | $ | 205,802 |
(1) | Included in construction in progress was capitalized interest of $0.6 million at December 31, 2019. There was 0 capitalized interest included in construction in progress as of June 30, 2020. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Interest income | $ | 2 | $ | 806 | $ | 9 | $ | 2,967 | |||||||
Interest income | $ | 2 | $ | 806 | $ | 9 | $ | 2,967 | |||||||
Interest expense | $ | 2,007 | $ | 1,030 | $ | 5,365 | $ | 1,739 | |||||||
Amortization of deferred facility fees | 292 | 221 | 565 | 415 | |||||||||||
Capitalized interest | (2,007 | ) | (773 | ) | (5,365 | ) | (1,168 | ) | |||||||
Financing costs, net of capitalized interest | $ | 292 | $ | 478 | $ | 565 | $ | 986 |
June 30, | December 31, | |||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
Accrued taxes other than income | $ | 6,974 | $ | 689 | ||||
Accrued operations and maintenance expense | 1,339 | 1,520 | ||||||
Accrued incentive compensation | 733 | 1,425 | ||||||
Accrued professional and consulting fees | 692 | 158 | ||||||
Accrued capital costs | 686 | 17,035 | ||||||
Accrued finance lease liability | — | 1,989 | ||||||
Other | 1,517 | 1,109 | ||||||
Total other current liabilities | $ | 11,941 | $ | 23,925 |
FASB ASC 740 prescribes a recognition thresholdreasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. As of June 30, 2020 and a measurement attributeDecember 31, 2019, there were 0 accruals for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2017. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2017. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. loss contingencies.
During the threeArmy Corps of Engineers allowing Permian Highway Pipeline LLC to conduct dredging and nine months ended September 30, 2017,filling activities and to enjoin certain further dredging and other ground disturbing activities in jurisdictional waters. Permian Highway Pipeline LLC has intervened in the suit in defense of the verifications and in opposition to any injunctive relief. The Company has a minority equity interest in Permian Highway Pipeline LLC.
Current Tax Liability Deferred Tax Asset: Deferred general and administrative expenses Valuation allowance Deferred Tax Asset, net $ (35,694 ) $ 455,906 (455,906 ) $ —
At Septemberasset retirement obligations and required credit facility fees discussed in
equity method interests. The table below presents the ownership percentage held by the Company for each entity:
June 30, 2020 | December 31, 2019 | |||||||||
Ownership | Amount | Amount | ||||||||
(In thousands) | ||||||||||
Gulf Coast Express Pipeline LLC | 16.0% | $ | 286,833 | $ | 291,628 | |||||
EPIC Crude Holdings, LP | 15.0% | 175,051 | 163,199 | |||||||
Permian Highway Pipeline LLC | 26.7% | 454,381 | 310,421 | |||||||
Breviloba, LLC | 33.0% | 492,214 | 492,800 | |||||||
$ | 1,408,479 | $ | 1,258,048 |
Gulf Coast Express Pipeline LLC | EPIC Crude Holdings, LP | Permian Highway Pipeline LLC | Breviloba, LLC | |||||||||||||||||
Total | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Balance at December 31, 2019 | $ | 291,628 | $ | 163,199 | $ | 310,421 | $ | 492,800 | $ | 1,258,048 | ||||||||||
Contributions | 919 | 15,000 | 138,467 | — | 154,386 | |||||||||||||||
Distributions | (26,171 | ) | — | — | (15,576 | ) | (41,747 | ) | ||||||||||||
Capitalized interest(1) | — | — | 5,365 | — | 5,365 | |||||||||||||||
Equity income (loss), net(2) | 20,457 | (2,354 | ) | 128 | 14,990 | 33,221 | ||||||||||||||
Accumulated other comprehensive loss | — | (794 | ) | — | — | (794 | ) | |||||||||||||
Balance at June 30, 2020 | $ | 286,833 | $ | 175,051 | $ | 454,381 | $ | 492,214 | $ | 1,408,479 |
(1) | Altus’ proportionate share of the Permian Highway Pipeline (PHP) construction costs is funded with the revolving credit facility. Accordingly, Altus capitalized $5.4 million of related interest expense during the six months ended June 30, 2020, which is included in the basis of the PHP equity interest. |
(2) | As of June 30, 2020, the amount of consolidated retained earnings, net of amortized basis differences, which represents undistributed earnings, was $3.0 million from Breviloba, LLC. |
Three Months Ended September 30, 2017 | Nine Months Ended September 30, 2017 | |||||||
Computed federal income tax benefit (expense) at 34% | $ | (162,181 | ) | $ | 29,212 | |||
Deferred general and administrative (expenses) | (94,164 | ) | (455,906 | ) | ||||
|
|
|
| |||||
Total income tax (expense) | $ | (256,345 | ) | $ | (426,694 | ) | ||
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Recent Accounting Pronouncements
The Company’s management does not believe any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect onstatement data for the Company’s financial statements.
Note 3—Public Offering
In April 2017,equity method interests (on a 100 percent basis):
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||
2020 | 2019(1) | |||||||||||||||||||||||||||||||
Gulf Coast Express Pipeline LLC | EPIC Crude Holdings, LP | Permian Highway Pipeline LLC | Breviloba, LLC | Gulf Coast Express Pipeline LLC | EPIC Crude Holdings, LP | Permian Highway Pipeline LLC | Breviloba, LLC | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Revenues | $ | 182,231 | $ | 85,971 | $ | — | $ | 83,120 | $ | 4,974 | $ | — | $ | — | $ | 46,928 | ||||||||||||||||
Operating expenses | 53,359 | 83,508 | 46 | 31,831 | 512 | 7,728 | 35 | 14,744 | ||||||||||||||||||||||||
Operating income (loss) | 128,872 | 2,463 | (46 | ) | 51,289 | 4,462 | (7,728 | ) | (35 | ) | 32,184 | |||||||||||||||||||||
Net income (loss) | 128,470 | (16,263 | ) | 480 | 46,345 | 5,382 | (16,653 | ) | 422 | 32,184 | ||||||||||||||||||||||
Other comprehensive loss | — | (5,037 | ) | — | — | — | (9,337 | ) | — |
(1) | Although the Company’s interests in EPIC Crude Holdings, LP, Permian Highway Pipeline LLC, and Breviloba, LLC were acquired in March, May, and July of 2019, respectively, the financial results are presented for the six months ended June 30, 2019 for comparability. |
Each Unit consists of one sharereverse stock split of the Company’s Class A Common Stock andone-third of one warrant (each, a “Warrant” and, collectively, the “Warrants”). Each whole Warrant entitles the holder to purchase one share of Class AC Common Stock atby a priceratio of $11.50 per share. Each Warrant will become exercisable onone-for-20. The par value and number of authorized shares of common stock and preferred stock were not affected by the laterreverse stock split. A corresponding number of 30 days after the completionAltus Midstream Common Units were also restated as part of the Company’s Initial Business Combination or 12 months fromreverse stock split. All per-share and share amounts have been retroactively restated in this Quarterly Report on Form 10-Q for all periods presented to reflect the closingreverse stock split.
Commencing on April 27, 2017, the holders of Units issued in its Public Offering may elect to separately tradereceive additional shares of Class A Common Stock, and Warrants included in the Units. The Units not separated will continue to trade on The Nasdaq Capital Market under the symbol “KAACU.” Shares of Class A Common Stockother outstanding equity instruments that may impact ownership interests and the Warrants are trading onlimited partner interests of Altus Midstream in future periods, see
The Company paid an underwriting discount of 2.0% of the per Unit offering price (or $7,546,422) to the underwriters at the closing of the Public Offering, with an additional fee (the “Deferred Discount”) of 3.5% of the gross offering proceeds (or $13,206,239) payable upon the Company’s completion of an Initial Business Combination. The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes its Initial Business Combination.
The Company granted the underwriters a45-day option to purchase up to 5,250,000 additional Units to cover over-allotments, if any (“Over-Allotment Units”) at the initial public offering price less the underwriting discounts and commissions. The 2,732,112 Units issued in connection with the over-allotment option are identical to the Units issued in the Public Offering.
Note 4—Related Party Transactions
Founder Shares
During December 2016, the Sponsor purchased 10,062,500 shares of Class B Common Stock (the “Founder Shares”) for an aggregate price of $25,000, or approximately $0.002 per share. During the nine months ended September 30, 2017, the Sponsor transferred 40,000 Founder Shares to each of the Company’s three independent directors (or an aggregate of 120,000 Founder Shares) at their original purchase price. As used herein, unless the context otherwise requires, Founder Shares shall be deemed to include the shares of Class A Common Stock issuable upon conversion thereof. The Founder Shares are identical to the Class A common stock included in the Units sold in the Public Offering except that the Founder Shares automatically convert into shares of Class A Common Stock at the timeoption of the Preferred Unit holders after the seventh anniversary of Closing (as defined below) or upon the occurrence of specified events, unless otherwise redeemed by Altus Midstream. Refer to
June 12, 2019 | ||||
(In thousands) | ||||
Transaction price, gross | $ | 625,000 | ||
Issue discount | (3,675 | ) | ||
Transaction costs to other third parties | (10,076 | ) | ||
Transaction price, net | $ | 611,249 |
June 12, 2019 | ||||
(In thousands) | ||||
Redeemable noncontrolling interest - Preferred Units | $ | 516,790 | ||
Long-term liability: Embedded derivative(1) | 94,459 | |||
$ | 611,249 |
(1) | See Note 13—Fair Value Measurements for further discussion on the nature and recognition of the embedded derivative. |
Six Months Ended June 30, 2020 | |||||||
Units Outstanding | Financial Position(2) | ||||||
(In thousands, except for unit data) | |||||||
Redeemable noncontrolling interest — Preferred Units: at December 31, 2019 | 638,163 | $ | 555,599 | ||||
Distribution of in-kind additional Preferred Units | 22,531 | — | |||||
Allocation of Altus Midstream net income | N/A | 37,026 | |||||
Redeemable noncontrolling interest — Preferred Units: at June 30, 2020 | 660,694 | $ | 592,625 | ||||
Embedded derivative liability(1) | 175,498 | ||||||
$ | 768,123 |
(1) | See Note 13—Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period. |
(2) | As of June 30, 2020, the aggregate Redemption Price was $700.8 million, based on an internal rate of return of 11.5 percent. |
The Company’s initial stockholders agreed subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the Initial Business Combination or (B) subsequent to the Initial Business Combination, (x) if the last sale price of the Company’speriod. Class AC Common Stock equals or exceeds $12.00is excluded from the weighted average shares outstanding immediately following the Closing Date for the calculation of basic net loss per share, (as adjusted for stock splits, stockas holders of Class C Common Stock are not entitled to any dividends reorganizations, recapitalizations andor liquidating distributions.
Private Placement Warrants
Upon the closing of the Public Offering on April 4, 2017 and April 21, 2017, the Sponsor purchased an aggregate of 6,364,281 warrants at a price of $1.50 per warrant in a private placement (the “Private Placement Warrants”) (includes 364,281 warrants related to the Over-Allotment Units exercised) at a price of $1.50 per whole warrant ($9,546,422 in the aggregate) in a private placement. Each whole Private Placement Warrant is exercisable for one whole share of the Company’s Class A Common Stock at a price of $11.50 per share. A portion of the purchase price of the Private Placement Warrants was added to the proceeds from the Public Offering to be held in the Trust Account. If the Initial Business Combination is not completed within 24 months from the closing of the Public Offering, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. The Private Placement Warrants will benon-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.
The Sponsor and the Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the Initial Business Combination.
Registration Rights
The holders of Founder Shares, Private Placement Warrants and Warrants that may be issued upon conversion of working capital loans, if any, are entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to shares of Class A Common Stock) pursuant to a registration rights agreement. These holders will be entitled to certain demand and “piggyback” registration rights.
The holders of Founder Shares, Private Placement Warrants and Warrants that may be issued upon conversion of working capital loans will not be able to sell these securities until the termination of the applicablelock-up period for the securities to be registered. The Company will bear the expenses incurredStock, (ii) earn-out consideration payable in connection with the filing of any such registration statements.
Related Party Loans
On December 23, 2016, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Public Offering pursuant to a promissory note (the “Note”). On April 4, 2017, upon completion of the Public Offering, the Company paid in full the aggregate $265,000 of borrowings under the Note.
Administrative Support Agreement
The Company has agreed to pay an affiliate of the Sponsor a total of $5,000 per month for office space, utilities and secretarial and administrative support. Upon completion of the Initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. The Company paid the affiliate of the Sponsor $15,000 and $30,000 for such services for the three and nine months ended September 30, 2017, respectively.
Note 5—Stockholders’ Equity
Common Stock
The authorized common stock of the Company includes up to 200,000,000 shares of Class A Common Stock, and 20,000,000(iii) an assumed exchange of the outstanding Preferred Units of Altus Midstream for shares of Class BA Common Stock. IfThe treasury stock method is used to determine the potential dilutive effect of its outstanding warrants.
Three Months Ended June 30, | |||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||
Loss | Shares(1) | Per Share(1) | Loss | Shares(1) | Per Share(1) | ||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||
Basic and diluted: | |||||||||||||||||||||
Net loss attributable to Class A common shareholders | $ | (255 | ) | 3,746 | $ | (0.07 | ) | $ | (2,293 | ) | 3,746 | $ | (0.61 | ) | |||||||
Effect of dilutive securities: | |||||||||||||||||||||
Redeemable noncontrolling interest — Apache limited partner | $ | — | — | $ | — | — | |||||||||||||||
Diluted(2): | |||||||||||||||||||||
Net loss attributable to Class A common shareholders | $ | (255 | ) | 3,746 | $ | (0.07 | ) | $ | (2,293 | ) | 3,746 | $ | (0.61 | ) |
Six Months Ended June 30, | |||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||
Loss | Shares(1) | Per Share(1) | Loss | Shares(1) | Per Share(1) | ||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net loss attributable to Class A common shareholders | $ | (10,108 | ) | 3,746 | $ | (2.70 | ) | $ | (1,193 | ) | 3,746 | $ | (0.32 | ) | |||||||
Effect of dilutive securities: | |||||||||||||||||||||
Redeemable noncontrolling interest — Apache limited partner | $ | (36,048 | ) | 12,500 | $ | — | — | ||||||||||||||
Diluted(2): | |||||||||||||||||||||
Net loss attributable to Class A common shareholders | $ | (46,156 | ) | 16,246 | $ | (2.84 | ) | $ | (1,193 | ) | 3,746 | $ | (0.32 | ) |
(1) | Share and per share amounts have been retroactively restated to reflect the Company’s reverse stock split which was effected June 30, 2020. Refer to Note 9—Equity for further information. |
(2) | The effect of the exchange of outstanding Common Units of Altus Midstream (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) would have been anti-dilutive for the three month periods ended June 30, 2020 and 2019, and also for the six month period ended June 30, 2019. |
Preferred Stock
The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At September 30, 2017 and December 31, 2016, there were no shares of preferred stock issued or outstanding.
Note 6—Fair Value Measurements
The following table presents information about the Company’s assets that are measuredfair value on a recurring basis asconsist of: cash and cash equivalents; revenue receivables; accounts receivable from/payable to Apache; and an embedded derivative liability related to the issuance of September 30, 2017Preferred Units (as further described above). This embedded derivative liability is recorded on the Company’s consolidated balance sheet at fair value. The carrying amount of Altus Midstream’s revolving credit facility approximates fair value because the interest rate is variable and indicatesreflective of market rates. The carrying amounts reported on the consolidated balance sheet for the Company’s remaining financial assets and liabilities approximate fair value due to their short-term nature. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the six months ended June 30, 2020 or year ended December 31, 2019.
Quantitative Information About Level 3 Fair Value Measurements | ||||||||||
Fair Value at June 30, 2020 | Valuation Technique | Significant Unobservable Inputs | Range/Value | |||||||
(In thousands) | ||||||||||
Preferred Units Embedded Derivative | $ | 175,498 | Option Model | Altus Midstream Company’s Imputed Interest Rate | 14.16-15.57% | |||||
Interest Rate Volatility | 35.56% |
Description | September 30, 2017 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | ||||||||||||
Investments held in Trust Account | $ | 378,284,003 | $ | 378,284,003 | $ | — | $ | — | ||||||||
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applicable period presented.
References to the “Company,” “us” or “we” refer to Kayne Anderson Acquisition Corp.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Form10-Q including, without limitation, statements under “Management’sand Management’s Discussion and Analysis of Financial Condition and Results of Operations” regardingOperations included in the Company’s financial position, business strategyAnnual Report on Form 10-K for the fiscal year ended December 31, 2019 (Form 10-K). Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Form 10-K.
Overview
We are a blank check company incorporated on December 12, 2016 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Initial Business Combination”). We intendCOVID-19 pandemic. In addition, unplanned downtime to focus our search for a target businessaddress moisture in the energy industry. For our purposes, we defineresidue pipeline reduced throughput by approximately 40 MMcf/d. These volumes are now back on-line.
The issuance of additional shares of our stock in a business combination:
We expect to incur significant costs in the pursuit of our business combination plans. We cannot assure you that our plans to raise capital or to complete our Initial Business Combination will be successful.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any operating revenue to date. Our only activities since inception relate to our formation, the Public Offering which was consummated on April 4, 2017 and efforts directed toward locating a suitable Initial Business Combination. We will not generate any operating revenue until after completion of an Initial Business Combination, at the earliest. Prior to such time, we will generatenon-operating income in form of interest income on cash and cash equivalents. We incur increased expenses as a result of being a public company (for legal, financial reporting and auditing compliance),tax structure, as well as expensesthe historic costs of depreciable assets, none of which are components of Adjusted EBITDA. The presentation of Adjusted EBITDA should not be construed as we conduct due diligence on prospective business combination candidates.
For the three months ended September 30, 2017, we had a net income of $220,657, which consisted primarily of interest income from the Trust Account of $809,858. This income was partially offset by general and administrative expenses of $276,956 (including $15,000 administrative fees paid to related party and $153,000 of due diligence costs), franchise tax expense of $55,900 and income tax expense of $256,345.
For the nine months ended September 30, 2017, we had a net loss of $512,613, which consisted primarily of general and administrative expenses of $1,340,902 (including $30,000 administrative fees paid to related party and $1,045,000 of due diligence costs), franchise tax expense of $98,900 and income tax expense of $426,694. These expenses were partially offset by interest received from the Trust Account of $1,353,883. During the period, we incurred significant costs conducting due diligence around potential acquisitionsan inference that we are no longer pursuing.
Liquidity and Capital Resources
In April 2017, upon the completing the Public Offering (including the sale of Over-Allotment Units) and the Private Placement Warrants, $377,321,120 was deposited in a trust account with American Stock Transfer & Trust Company acting as trustee (the “Trust Account”). Other than the withdrawal of interest to pay taxes, the proceeds held in the Trust Account will remain in the Trust Account until the earlier (i) the completion of the Initial Business Combination; (ii) the redemption of any shares of Class A Common Stock included in the Units sold in the Public Offering that have been properly tendered in connection with a stockholder vote to amend the Company’s certificateresults will be unaffected by unusual or non-recurring items. Additionally, the Company’s computation of incorporation to modify the substance or timing of our obligation to redeem 100% of such shares of Class A Common Stock if we do not complete the Initial Business Combination within 24 months from the closing of the Public Offering; and (iii) the redemption of 100% of the shares of Class A Common Stock included in the Units sold in the Public Offering if the Company is unable to complete an Initial Business Combination within 24 months from the closing of the Public Offering (subject to the requirements of law).
Until the consummation of the Public Offering, our liquidity needs were satisfied through loans from our Sponsor of $265,000 under an unsecured promissory note. The loans werenon-interest bearing and were paid in full on April 4, 2017 upon completion of the Public Offering. As of September 30, 2017, we had $555,254 in cash held outside the Trust Account which may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. In addition, interest income on the funds held in the Trust Account may be released to pay our franchise and income taxes. During September, we paid $391,000 of estimated federal income tax with funds held in the Trust Account. At September 30, 2017, $962,883 is available to pay any additional taxes.
To the extent that we require additional funds to operate our business prior to the consummation of an Initial Business Combination, we expect our Sponsor or an affiliate of our Sponsor or certain of our officers and directors to loan us funds as may be required. If we complete our Initial Business Combination, we would repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that our Initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.50 per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to the exercise price, exercisability and exercise period.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations
As of September 30, 2017, we did not have anyoff-balance sheet arrangements as defined in Item 303(a)(4)(ii) of RegulationS-K and did not have any commitments or contractual obligations. In connection with our Public Offering, we entered into an Administrative Services Agreement, by and between us and KA Fund Advisors, LLC an affiliate of our Sponsor. We have agreed to pay KA Fund Advisors, LLC a total of $5,000 per month for office space, utilities and secretarial and administrative support. Upon completion of our Initial Business Combination or our liquidation, we will cease paying these monthly fees.
The underwriters are entitled to underwriting discounts and commissions of 5.5%, of which 2.0% ($7,546,422) were paid at the closing of the Public Offering and 3.5% ($13,206,239) was deferred and placed in the Trust Account. The deferred discount will become payable to the underwriters only on completion of the Initial Business Combination, subject to the terms of the underwriting agreement.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required fornon-emerging growth companies. As a result, our financial statementsAdjusted EBITDA may not be comparable to companiesother similarly titled measures of other companies.
Critical Accounting Policies and Estimates
This management’s discussion anda substitute for analysis of ourthe Company’s results as reported under GAAP. The Company’s definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies in the industry, thereby diminishing its utility.
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Reconciliation of net income (loss) including noncontrolling interests | |||||||||||||||
Net income (loss) including noncontrolling interests | $ | 17,662 | $ | (5,498 | ) | $ | (9,130 | ) | $ | 230 | |||||
Add: | |||||||||||||||
Financing costs, net of capitalized interest | 292 | 478 | 565 | 986 | |||||||||||
Depreciation and accretion | 4,062 | 9,107 | 7,976 | 16,758 | |||||||||||
Unrealized derivative instrument loss | 10,585 | — | 72,569 | — | |||||||||||
Equity method interests Adjusted EBITDA | 28,231 | (60 | ) | 51,917 | 166 | ||||||||||
Other | — | — | 290 | — | |||||||||||
Less: | |||||||||||||||
Gain on sale of assets, net | 264 | — | 76 | — | |||||||||||
Interest income | 2 | 806 | 9 | 2,967 | |||||||||||
Income (loss) from equity method interests, net | 16,923 | (1,297 | ) | 33,221 | (1,028 | ) | |||||||||
Income tax benefit | — | 430 | 696 | 5 | |||||||||||
Other | 2 | — | 2 | — | |||||||||||
Adjusted EBITDA | $ | 43,641 | $ | 4,088 | $ | 90,183 | $ | 16,196 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
REVENUES: | |||||||||||||||
Midstream services revenue — affiliate | $ | 31,616 | $ | 24,139 | $ | 72,383 | $ | 57,985 | |||||||
Total revenues | 31,616 | 24,139 | 72,383 | 57,985 | |||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Operations and maintenance | 9,508 | 14,005 | 20,099 | 30,403 | |||||||||||
General and administrative | 2,988 | 2,081 | 7,166 | 5,072 | |||||||||||
Depreciation and accretion | 4,062 | 9,107 | 7,976 | 16,758 | |||||||||||
Taxes other than income | 3,347 | 3,888 | 6,790 | 6,463 | |||||||||||
Total costs and expenses | 19,905 | 29,081 | 42,031 | 58,696 | |||||||||||
OPERATING INCOME (LOSS) | 11,711 | (4,942 | ) | 30,352 | (711 | ) | |||||||||
OTHER INCOME (LOSS): | |||||||||||||||
Unrealized derivative instrument loss | (10,585 | ) | — | (72,569 | ) | — | |||||||||
Interest income | 2 | 806 | 9 | 2,967 | |||||||||||
Income (loss) from equity method interests, net | 16,923 | (1,297 | ) | 33,221 | (1,028 | ) | |||||||||
Other | (97 | ) | (17 | ) | (274 | ) | (17 | ) | |||||||
Total other income (loss) | 6,243 | (508 | ) | (39,613 | ) | 1,922 | |||||||||
Financing costs, net of capitalized interest | 292 | 478 | 565 | 986 | |||||||||||
NET INCOME (LOSS) BEFORE INCOME TAXES | 17,662 | (5,928 | ) | (9,826 | ) | 225 | |||||||||
Current income tax benefit | — | — | (696 | ) | — | ||||||||||
Deferred income tax benefit | — | (430 | ) | — | (5 | ) | |||||||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | 17,662 | (5,498 | ) | (9,130 | ) | 230 | |||||||||
Net income attributable to Preferred Unit limited partners | 18,764 | 4,143 | 37,026 | 4,143 | |||||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | (1,102 | ) | (9,641 | ) | (46,156 | ) | (3,913 | ) | |||||||
Net loss attributable to Apache limited partner | (847 | ) | (7,348 | ) | (36,048 | ) | (2,720 | ) | |||||||
NET LOSS ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS | $ | (255 | ) | $ | (2,293 | ) | $ | (10,108 | ) | $ | (1,193 | ) | |||
KEY PERFORMANCE METRICS: | |||||||||||||||
Adjusted EBITDA(1) | $ | 43,641 | $ | 4,088 | $ | 90,183 | $ | 16,196 | |||||||
OPERATING DATA: | |||||||||||||||
Average throughput volumes of natural gas (MMcf/d) | 434 | 363 | 505 | 463 | |||||||||||
Average volumes of natural gas processed (MMcf/d) | 429 | 363 | 500 | 463 |
(1) | Adjusted EBITDA is not defined by GAAP and should not be considered an alternative to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities or any other measures prepared under GAAP. For the definition and reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, see the section entitled Adjusted EBITDA above. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
REVENUES: | ||||||||||||||||
Midstream services revenue — affiliate | $ | 31,616 | $ | 24,139 | $ | 72,383 | $ | 57,985 | ||||||||
Total revenues | $ | 31,616 | $ | 24,139 | $ | 72,383 | $ | 57,985 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Operations and maintenance | $ | 9,508 | $ | 14,005 | $ | 20,099 | $ | 30,403 | |||||||
General and administrative | 2,988 | 2,081 | 7,166 | 5,072 | |||||||||||
Depreciation and accretion | 4,062 | 9,107 | 7,976 | 16,758 | |||||||||||
Taxes other than income | 3,347 | 3,888 | 6,790 | 6,463 | |||||||||||
Total costs and expenses | $ | 19,905 | $ | 29,081 | $ | 42,031 | $ | 58,696 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Unrealized derivative instrument loss | $ | (10,585 | ) | $ | — | $ | (72,569 | ) | $ | — | |||||
Interest income | 2 | 806 | 9 | 2,967 | |||||||||||
Income (loss) from equity method interests, net | 16,923 | (1,297 | ) | 33,221 | (1,028 | ) | |||||||||
Other | (97 | ) | (17 | ) | (274 | ) | (17 | ) | |||||||
Total other income (loss) | $ | 6,243 | $ | (508 | ) | $ | (39,613 | ) | $ | 1,922 | |||||
Interest expense | $ | 2,007 | $ | 1,030 | $ | 5,365 | $ | 1,739 | |||||||
Amortization of deferred facility fees | 292 | 221 | 565 | 415 | |||||||||||
Capitalized interest | (2,007 | ) | (773 | ) | (5,365 | ) | (1,168 | ) | |||||||
Financing costs, net of capitalized interest | $ | 292 | $ | 478 | $ | 565 | $ | 986 |
For the Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
Sources of cash and cash equivalents: | ||||||||
Redeemable noncontrolling interest — Preferred Unit limited partners, net | $ | — | $ | 611,249 | ||||
Proceeds from revolving credit facility | 97,000 | — | ||||||
Proceeds from sale of assets | 6,773 | — | ||||||
Capital distributions from equity method interests | 4,211 | — | ||||||
Net cash provided by operating activities | 86,797 | 21,688 | ||||||
$ | 194,781 | $ | 632,937 | |||||
Uses of cash and cash equivalents: | ||||||||
Capital expenditures(1) | $ | (26,520 | ) | $ | (259,295 | ) | ||
Contributions to and acquisition of equity method interests | (154,386 | ) | (438,403 | ) | ||||
Finance lease payments | (11,789 | ) | (7,462 | ) | ||||
Deferred facility fees | (816 | ) | (792 | ) | ||||
Capitalized interest paid | (5,373 | ) | — | |||||
(198,884 | ) | (705,952 | ) | |||||
Decrease in cash and cash equivalents | $ | (4,103 | ) | $ | (73,015 | ) |
(1) | The table presents capital expenditures on a cash basis; therefore, the amounts may differ from those discussed elsewhere in this document, which include accruals. |
June 30, 2020 | December 31, 2019 | |||||||
(In thousands) | ||||||||
Cash and cash equivalents | $ | 1,880 | $ | 5,983 | ||||
Total debt | 493,000 | 405,767 | ||||||
Available committed borrowing capacity | 307,000 | 404,000 |
capital resource positions.
During April 2017, $377,321,120
its controls. reporting, including any changes related to the COVID-19 pandemic and the transition to a remote working environment.Evaluation of Disclosureareas of June 30, 2020, the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation and as of the date of that evaluation, these officers concluded that the Company’s disclosure controls and other procedures that are designedwere effective, providing effective means to ensure that the information the Company is required to be disclosed in our reports filed or submitteddisclose under the Securitiesapplicable laws and Exchange Act of 1934, as amended (the “Exchange Act”)regulations is recorded, processed, summarized, and reported within the time periods specified in the SEC’sCommission’s rules and forms. Disclosure controlsforms and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to the Company’s management, including our Chief Executive Officerits principal executive officer and Chief Financial Officer,principal financial officer, to allow timely decisions regarding required disclosure.As required by Rules13a-15 and15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness ofoperationeffectiveness of ourits disclosure controls, including compliance with various laws and regulations that apply to operations. The Company makes modifications to improve the design and effectiveness of its disclosure controls, and procedures as of September 30, 2017. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as definedmay take other corrective action, if the Company’s reviews identify deficiencies or weaknesses in Rules13a-15 (e) and15d-15 (e) under the Exchange Act) were effective.overOver Financial ReportingDuringthree months ended September 30, 2017, there has been no change in ourCompany’s internal controlcontrols over financial reporting during the quarter ended June 30, 2020, that hashave materially affected, or isare reasonably likely to materially affect, ourthe Company’s internal controlcontrols over financial reporting.Item 1.Legal Proceedings.
None.
As
None
None
Not Applicable.
this rapidly evolving event.
EXHIBIT NO. | DESCRIPTION | |
2.1*** | – | |
3.1 | – | |
3.2 | – | |
3.3 | – | |
10.1* | – | |
10.2* | – | |
31.1* | – | |
31.2* | – | |
32.1** | – | |
101* | – | The following financial statements from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline XBRL: (i) Statement of Consolidated Operations, (ii) Statement of Consolidated Comprehensive Income (Loss), (iii) Consolidated Balance Sheet, (iv) Statement of Consolidated Cash Flows, (v) Statement of Consolidated Changes in Equity and Noncontrolling Interests and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags. |
101.SCH* | – | Inline XBRL Taxonomy Schema Document. |
101.CAL* | – | Inline XBRL Calculation Linkbase Document. |
101.DEF* | – | Inline XBRL Definition Linkbase Document. |
101.LAB* | – | Inline XBRL Label Linkbase Document. |
101.PRE* | – | Inline XBRL Presentation Linkbase Document. |
104* | – | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
None
In accordance
ALTUS MIDSTREAM COMPANY | ||||||
Dated: | ||||||
July 30, 2020 | /s/ | |||||
Ben C. Rodgers | ||||||
Chief Financial Officer and Treasurer | ||||||
(Principal Financial Officer) | ||||||
| ||||||
Dated: | ||||||
July 30, 2020 | /s/ | |||||
Rebecca A. Hoyt | ||||||
Senior Vice President, Chief Accounting Officer, and Controller | ||||||
(Principal |
17