Supplemental Condensed Consolidating Financial Information | 6 Months Ended |
Jun. 30, 2014 |
Supplemental Condensed Consolidating Financial Information | ' |
Supplemental Condensed Consolidating Financial Information | ' |
15. Supplemental Condensed Consolidating Financial Information |
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MarkWest Energy Partners L.P. has no significant operations independent of its subsidiaries. As of June 30, 2014, the Partnership’s obligations under the outstanding Senior Notes (see Note 9) were fully, jointly and severally guaranteed, by all of the subsidiaries that are owned 100% by the Partnership, other than MarkWest Liberty Midstream and its subsidiaries. The guarantees are unconditional except for certain customary circumstances in which a subsidiary would be released from the guarantee under the indentures (see Note 16 to the Consolidated Financial Statements included in Item 8 of the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2013 for discussion of these circumstances). Subsidiaries that are not 100% owned by the Partnership do not guarantee the Senior Notes. For the purpose of the following financial information, the Partnership’s investments in its subsidiaries and the guarantor subsidiaries’ investments in their subsidiaries are presented in accordance with the equity method of accounting. The co-issuer, MarkWest Energy Finance Corporation, has no independent assets or operations. Condensed consolidating financial information for MarkWest Energy Partners L.P. and its combined guarantor and combined non-guarantor subsidiaries as of June 30, 2014 and December 31, 2013 and for the three and six months ended June 30, 2014 and 2013 is as follows (in thousands): |
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Condensed Consolidating Balance Sheets |
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| | As of June 30, 2014 | |
| | Parent | | Guarantor | | Non- | | Consolidating | | Consolidated | |
Subsidiaries | Guarantor | Adjustments |
| Subsidiaries | |
ASSETS | | | | | | | | | | | |
Current assets: | | | | | | | | | | | |
Cash and cash equivalents | | $ | 15 | | $ | 51,580 | | $ | 247,817 | | $ | — | | $ | 299,412 | |
Restricted cash | | — | | — | | 10,000 | | — | | 10,000 | |
Receivables and other current assets | | 5,094 | | 273,520 | | 138,497 | | — | | 417,111 | |
Intercompany receivables | | 2,012,956 | | 76,174 | | 67,906 | | (2,157,036 | ) | — | |
Fair value of derivative instruments | | — | | 4,828 | | 1,107 | | — | | 5,935 | |
Receivables from unconsolidated affiliates | | — | | 1,546 | | 12,431 | | — | | 13,977 | |
Total current assets | | 2,018,065 | | 407,648 | | 477,758 | | (2,157,036 | ) | 746,435 | |
Total property, plant and equipment, net | | 8,340 | | 2,139,094 | | 5,650,985 | | (61,531 | ) | 7,736,888 | |
Other long-term assets: | | | | | | | | | | | |
Restricted cash | | — | | — | | 10,000 | | — | | 10,000 | |
Investment in unconsolidated affiliates | | — | | 81,843 | | 558,603 | | (10,519 | ) | 629,927 | |
Investment in consolidated affiliates | | 5,813,027 | | 5,523,135 | | — | | (11,336,162 | ) | — | |
Intangibles, net of accumulated amortization | | — | | 571,361 | | 270,866 | | — | | 842,227 | |
Intercompany notes receivable | | 137,000 | | — | | — | | (137,000 | ) | — | |
Other long-term assets | | 49,898 | | 92,065 | | 75,950 | | — | | 217,913 | |
Total assets | | $ | 8,026,330 | | $ | 8,815,146 | | $ | 7,044,162 | | $ | (13,702,248 | ) | $ | 10,183,390 | |
LIABILITIES AND EQUITY | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | |
Intercompany payables | | $ | 3,109 | | $ | 2,074,930 | | $ | 78,997 | | $ | (2,157,036 | ) | $ | — | |
Fair value of derivative instruments | | — | | 20,288 | | 1,642 | | — | | 21,930 | |
Other current liabilities | | 58,602 | | 284,191 | | 380,010 | | (2,262 | ) | 720,541 | |
Total current liabilities | | 61,711 | | 2,379,409 | | 460,649 | | (2,159,298 | ) | 742,471 | |
Deferred income taxes | | 3,815 | | 301,710 | | — | | — | | 305,525 | |
Long-term intercompany financing payable | | — | | 137,000 | | 96,296 | | (233,296 | ) | — | |
Fair value of derivative instruments | | — | | 35,668 | | — | | — | | 35,668 | |
Long-term debt, net of discounts | | 3,464,637 | | — | | — | | — | | 3,464,637 | |
Other long-term liabilities | | 6,657 | | 148,332 | | 7,839 | | — | | 162,828 | |
Redeemable non-controlling interest | | — | | — | | — | | 70,711 | | 70,711 | |
Equity: | | | | | | | | | | | |
Common Units | | 3,887,485 | | 5,813,027 | | 6,479,378 | | (12,265,897 | ) | 3,913,993 | |
Class B Units | | 602,025 | | — | | — | | — | | 602,025 | |
Non-controlling interest in consolidated subsidiaries | | — | | — | | — | | 885,532 | | 885,532 | |
Total equity | | 4,489,510 | | 5,813,027 | | 6,479,378 | | (11,380,365 | ) | 5,401,550 | |
Total liabilities and equity | | $ | 8,026,330 | | $ | 8,815,146 | | $ | 7,044,162 | | $ | (13,702,248 | ) | $ | 10,183,390 | |
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| | As of December 31, 2013 | |
| | Parent | | Guarantor | | Non- | | Consolidating | | Consolidated | |
Subsidiaries | Guarantor | Adjustments |
| Subsidiaries | |
ASSETS | | | | | | | | | | | |
Current assets: | | | | | | | | | | | |
Cash and cash equivalents | | $ | 224 | | $ | 79,363 | | $ | 5,718 | | $ | — | | $ | 85,305 | |
Restricted cash | | — | | — | | 10,000 | | — | | 10,000 | |
Receivables and other current assets | | 6,248 | | 266,610 | | 134,880 | | — | | 407,738 | |
Intercompany receivables | | 1,194,955 | | 78,010 | | 125,115 | | (1,398,080 | ) | — | |
Fair value of derivative instruments | | — | | 10,444 | | 1,013 | | — | | 11,457 | |
Total current assets | | 1,201,427 | | 434,427 | | 276,726 | | (1,398,080 | ) | 514,500 | |
Total property, plant and equipment, net | | 5,379 | | 2,149,845 | | 5,622,602 | | (84,657 | ) | 7,693,169 | |
Other long-term assets: | | | | | | | | | | | |
Restricted cash | | — | | — | | 10,000 | | — | | 10,000 | |
Investment in unconsolidated affiliates | | — | | 75,627 | | — | | — | | 75,627 | |
Investment in consolidated affiliates | | 5,741,374 | | 4,541,617 | | — | | (10,282,991 | ) | — | |
Intangibles, net of accumulated amortization | | — | | 595,995 | | 278,797 | | — | | 874,792 | |
Fair value of derivative instruments | | — | | 505 | | — | | — | | 505 | |
Intercompany notes receivable | | 151,200 | | — | | — | | (151,200 | ) | — | |
Other long-term assets | | 52,338 | | 92,276 | | 83,216 | | — | | 227,830 | |
Total assets | | $ | 7,151,718 | | $ | 7,890,292 | | $ | 6,271,341 | | $ | (11,916,928 | ) | $ | 9,396,423 | |
LIABILITIES AND EQUITY | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | |
Intercompany payables | | $ | — | | $ | 1,315,707 | | $ | 82,373 | | $ | (1,398,080 | ) | $ | — | |
Fair value of derivative instruments | | — | | 26,382 | | 2,456 | | — | | 28,838 | |
Other current liabilities | | 58,110 | | 199,146 | | 583,810 | | (2,131 | ) | 838,935 | |
Total current liabilities | | 58,110 | | 1,541,235 | | 668,639 | | (1,400,211 | ) | 867,773 | |
Deferred income taxes | | 3,407 | | 284,159 | | — | | — | | 287,566 | |
Long-term intercompany financing payable | | — | | 151,200 | | 97,461 | | (248,661 | ) | — | |
Fair value of derivative instruments | | — | | 27,763 | | — | | — | | 27,763 | |
Long-term debt, net of discounts | | 3,023,071 | | — | | — | | — | | 3,023,071 | |
Other long-term liabilities | | 3,745 | | 144,561 | | 8,194 | | — | | 156,500 | |
Redeemable non-controlling interest | | — | | — | | — | | 235,617 | | 235,617 | |
Equity: | | | | | | | | | | | |
Common Units | | 3,461,360 | | 5,741,374 | | 5,497,047 | | (11,223,486 | ) | 3,476,295 | |
Class B Units | | 602,025 | | — | | — | | — | | 602,025 | |
Non-controlling interest in consolidated subsidiaries | | — | | — | | — | | 719,813 | | 719,813 | |
Total equity | | 4,063,385 | | 5,741,374 | | 5,497,047 | | (10,503,673 | ) | 4,798,133 | |
Total liabilities and equity | | $ | 7,151,718 | | $ | 7,890,292 | | $ | 6,271,341 | | $ | (11,916,928 | ) | $ | 9,396,423 | |
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Condensed Consolidating Statements of Operations |
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| | Three months ended June 30, 2014 | |
| | Parent | | Guarantor | | Non- | | Consolidating | | Consolidated | |
Subsidiaries | Guarantor | Adjustments |
| Subsidiaries | |
Total revenue | | $ | — | | $ | 318,408 | | $ | 209,800 | | $ | (9,842 | ) | $ | 518,366 | |
Operating expenses: | | | | | | | | | | | |
Purchased product costs | | — | | 180,638 | | 47,150 | | — | | 227,788 | |
Facility expenses | | — | | 42,567 | | 44,311 | | (1,288 | ) | 85,590 | |
Selling, general and administrative expenses | | 10,760 | | 7,795 | | 12,416 | | (3,270 | ) | 27,701 | |
Depreciation and amortization | | 288 | | 49,719 | | 71,409 | | (1,373 | ) | 120,043 | |
Other operating expenses (income) | | — | | 352 | | 6,536 | | (5,270 | ) | 1,618 | |
Total operating expenses | | 11,048 | | 281,071 | | 181,822 | | (11,201 | ) | 462,740 | |
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(Loss) income from operations | | (11,048 | ) | 37,337 | | 27,978 | | 1,359 | | 55,626 | |
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Earnings from consolidated affiliates | | 54,074 | | 18,928 | | — | | (73,002 | ) | — | |
Other expense, net | | (44,526 | ) | (5,382 | ) | (4,978 | ) | 9,368 | | (45,518 | ) |
Income before provision for income tax | | (1,500 | ) | 50,883 | | 23,000 | | (62,275 | ) | 10,108 | |
Provision for income tax (benefit) expense | | 251 | | (3,191 | ) | — | | — | | (2,940 | ) |
Net income | | (1,751 | ) | 54,074 | | 23,000 | | (62,275 | ) | 13,048 | |
Net income attributable to non-controlling interest | | — | | — | | — | | (4,071 | ) | (4,071 | ) |
Net income attributable to the Partnership’s unitholders | | $ | (1,751 | ) | $ | 54,074 | | $ | 23,000 | | $ | (66,346 | ) | $ | 8,977 | |
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| | Three months ended June 30, 2013 | |
| | Parent | | Guarantor | | Non- | | Consolidating | | Consolidated | |
Subsidiaries | Guarantor | Adjustments |
| Subsidiaries | |
Total revenue | | $ | — | | $ | 298,097 | | $ | 126,515 | | $ | (9,492 | ) | $ | 415,120 | |
Operating expenses: | | | | | | | | | | | |
Purchased product costs | | — | | 117,813 | | 17,114 | | — | | 134,927 | |
Facility expenses | | — | | 34,497 | | 29,485 | | (385 | ) | 63,597 | |
Selling, general and administrative expenses | | 12,074 | | 6,646 | | 8,451 | | (1,672 | ) | 25,499 | |
Depreciation and amortization | | 242 | | 45,457 | | 44,292 | | (1,337 | ) | 88,654 | |
Other operating expenses (income) | | — | | 573 | | (40,233 | ) | 2,081 | | (37,579 | ) |
Total operating expenses | | 12,316 | | 204,986 | | 59,109 | | (1,313 | ) | 275,098 | |
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(Loss) income from operations | | (12,316 | ) | 93,111 | | 67,406 | | (8,179 | ) | 140,022 | |
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Earnings from consolidated affiliates | | 132,913 | | 62,611 | | — | | (195,524 | ) | — | |
Other expense, net | | (40,102 | ) | (6,820 | ) | (2,997 | ) | 11,678 | | (38,241 | ) |
Income before provision for income tax | | 80,495 | | 148,902 | | 64,409 | | (192,025 | ) | 101,781 | |
Provision for income tax (benefit) expense | | 294 | | 15,989 | | — | | — | | 16,283 | |
Net income | | 80,201 | | 132,913 | | 64,409 | | (192,025 | ) | 85,498 | |
Net income attributable to non-controlling interest | | — | | — | | — | | (1,799 | ) | (1,799 | ) |
Net income attributable to the Partnership’s unitholders | | $ | 80,201 | | $ | 132,913 | | $ | 64,409 | | $ | (193,824 | ) | $ | 83,699 | |
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| | Six months ended June 30, 2014 | |
| | Parent | | Guarantor | | Non- | | Consolidating | | Consolidated | |
Subsidiaries | Guarantor | Adjustments |
| Subsidiaries | |
Total revenue | | $ | — | | $ | 643,909 | | $ | 408,918 | | $ | (21,985 | ) | $ | 1,030,842 | |
Operating expenses: | | | | | | | | | | | |
Purchased product costs | | — | | 345,821 | | 85,733 | | — | | 431,554 | |
Facility expenses | | — | | 79,600 | | 92,682 | | (3,255 | ) | 169,027 | |
Selling, general and administrative expenses | | 24,415 | | 18,311 | | 25,765 | | (5,500 | ) | 62,991 | |
Depreciation and amortization | | 568 | | 98,839 | | 141,222 | | (2,679 | ) | 237,950 | |
Other operating expenses (income) | | — | | 193 | | 6,770 | | (5,270 | ) | 1,693 | |
Total operating expenses | | 24,983 | | 542,764 | | 352,172 | | (16,704 | ) | 903,215 | |
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(Loss) income from operations | | (24,983 | ) | 101,145 | | 56,746 | | (5,281 | ) | 127,627 | |
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Earnings from consolidated affiliates | | 121,784 | | 41,317 | | — | | (163,101 | ) | — | |
Other expense, net | | (87,688 | ) | (11,480 | ) | (7,934 | ) | 18,045 | | (89,057 | ) |
Income before provision for income tax | | 9,113 | | 130,982 | | 48,812 | | (150,337 | ) | 38,570 | |
Provision for income tax (benefit) expense | | 408 | | 9,198 | | — | | — | | 9,606 | |
Net income | | 8,705 | | 121,784 | | 48,812 | | (150,337 | ) | 28,964 | |
Net income attributable to non-controlling interest | | — | | — | | — | | (7,495 | ) | (7,495 | ) |
Net (loss) income attributable to the Partnership’s unitholders | | $ | 8,705 | | $ | 121,784 | | $ | 48,812 | | $ | (157,832 | ) | $ | 21,469 | |
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| | Six months ended June 30, 2013 | |
| | Parent | | Guarantor | | Non- | | Consolidating | | Consolidated | |
Subsidiaries | Guarantor | Adjustments |
| Subsidiaries | |
Total revenue | | $ | — | | $ | 569,065 | | $ | 235,857 | | $ | (16,529 | ) | $ | 788,393 | |
Operating expenses: | | | | | | | | | | | |
Purchased product costs | | — | | 240,763 | | 36,017 | | — | | 276,780 | |
Facility expenses | | — | | 66,775 | | 56,387 | | (387 | ) | 122,775 | |
Selling, general and administrative expenses | | 24,108 | | 13,619 | | 15,528 | | (2,514 | ) | 50,741 | |
Depreciation and amortization | | 519 | | 89,510 | | 84,295 | | (2,823 | ) | 171,501 | |
Other operating expenses (income) | | — | | 1,338 | | (40,507 | ) | 2,080 | | (37,089 | ) |
Total operating expenses | | 24,627 | | 412,005 | | 151,720 | | (3,644 | ) | 584,708 | |
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(Loss) income from operations | | (24,627 | ) | 157,060 | | 84,137 | | (12,885 | ) | 203,685 | |
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Earnings from consolidated affiliates | | 202,874 | | 81,729 | | — | | (284,603 | ) | — | |
Loss on redemption of debt | | (38,455 | ) | — | | — | | — | | (38,455 | ) |
Other expense, net | | (83,102 | ) | (13,236 | ) | (6,282 | ) | 24,597 | | (78,023 | ) |
Income before provision for income tax | | 56,690 | | 225,553 | | 77,855 | | (272,891 | ) | 87,207 | |
Provision for income tax (benefit) expense | | 161 | | 22,679 | | — | | — | | 22,840 | |
Net income | | 56,529 | | 202,874 | | 77,855 | | (272,891 | ) | 64,367 | |
Net income attributable to non-controlling interest | | — | | — | | — | | 3,874 | | 3,874 | |
Net (loss) income attributable to the Partnership’s unitholders | | $ | 56,529 | | $ | 202,874 | | $ | 77,855 | | $ | (269,017 | ) | $ | 68,241 | |
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Condensed Consolidating Statements of Cash Flows |
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| | Six months ended June 30, 2014 | |
| | Parent | | Guarantor | | Non- | | Consolidating | | Consolidated | |
Subsidiaries | Guarantor | Adjustments |
| Subsidiaries | |
Net cash (used in) provided by operating activities | | $ | (97,223 | ) | $ | 263,284 | | $ | 187,138 | | $ | 3,624 | | $ | 356,823 | |
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Cash flows from investing activities: | | | | | | | | | | | |
Capital expenditures | | (5,116 | ) | (108,203 | ) | (1,157,346 | ) | (4,658 | ) | (1,275,323 | ) |
Equity investments in consolidated affiliates | | (30,038 | ) | (1,090,000 | ) | — | | 1,120,038 | | — | |
Investment in unconsolidated affiliates | | — | | (8,540 | ) | (67,514 | ) | — | | (76,054 | ) |
Distributions from consolidated affiliates | | 63,158 | | 151,110 | | — | | (214,268 | ) | — | |
Investment in intercompany notes, net | | 14,200 | | — | | — | | (14,200 | ) | — | |
Proceeds from disposal of property, plant and equipment | | — | | 4,164 | | 17,398 | | — | | 21,562 | |
Proceeds from sale of equity interest in unconsolidated affiliate | | — | | — | | 324,657 | | — | | 324,657 | |
Net cash flows provided by (used in) investing activities | | 42,204 | | (1,051,469 | ) | (882,805 | ) | 886,912 | | (1,005,158 | ) |
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Cash flows from financing activities: | | | | | | | | | | | |
Proceeds from public equity offerings, net | | 711,837 | | — | | — | | — | | 711,837 | |
Proceeds from Credit Facility | | 1,923,500 | | — | | — | | — | | 1,923,500 | |
Payments Credit Facility | | (1,482,300 | ) | — | | — | | — | | (1,482,300 | ) |
Payments related to intercompany financing, net | | — | | (14,200 | ) | (1,034 | ) | 15,234 | | — | |
Payments for debt issue costs and deferred financing costs | | (2,045 | ) | — | | — | | — | | (2,045 | ) |
Contributions from parent and affiliates | | — | | 30,038 | | 1,090,000 | | (1,120,038 | ) | — | |
Share-based payment activity | | (8,943 | ) | — | | — | | — | | (8,943 | ) |
Payment of distributions | | (278,316 | ) | (63,158 | ) | (151,200 | ) | 214,268 | | (278,406 | ) |
Payments of SMR liability | | — | | (1,201 | ) | — | | — | | (1,201 | ) |
Intercompany advances, net | | (808,923 | ) | 808,923 | | — | | | | — | |
— |
Net cash flows (used in) provided by financing activities | | 54,810 | | 760,402 | | 937,766 | | (890,536 | ) | 862,442 | |
| | | | | | | | | | | |
Net (decrease) increase in cash | | (209 | ) | (27,783 | ) | 242,099 | | — | | 214,107 | |
Cash and cash equivalents at beginning of year | | 224 | | 79,363 | | 5,718 | | — | | 85,305 | |
Cash and cash equivalents at end of period | | $ | 15 | | $ | 51,580 | | $ | 247,817 | | $ | — | | $ | 299,412 | |
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| | Six months ended June 30, 2013 | |
| | Parent | | Guarantor | | Non- | | Consolidating | | Consolidated | |
Subsidiaries | Guarantor | Adjustments |
| Subsidiaries | |
Net cash (used in) provided by operating activities | | $ | (79,362 | ) | $ | 129,228 | | $ | 116,760 | | $ | 10,970 | | $ | 177,596 | |
| | | | | | | | | | | |
Cash flows from investing activities: | | | | | | | | | | | |
Restricted cash | | — | | — | | 25,500 | | — | | 25,500 | |
Capital expenditures | | (480 | ) | (53,319 | ) | (1,369,397 | ) | (11,888 | ) | (1,435,084 | ) |
Equity investments in consolidated affiliates | | (28,823 | ) | (783,600 | ) | — | | 812,423 | | — | |
Investment in unconsolidated affiliates | | — | | (8,336 | ) | — | | — | | (8,336 | ) |
Distributions from consolidated affiliates | | 47,860 | | 389,300 | | — | | (437,160 | ) | — | |
Acquisition of business, net of cash acquired | | — | | (225,210 | ) | — | | — | | (225,210 | ) |
Proceeds from disposal of property, plant and equipment | | — | | 43 | | 208,066 | | — | | 208,109 | |
Net cash flows provided by (used in) investing activities | | 18,557 | | (681,122 | ) | (1,135,831 | ) | 363,375 | | (1,435,021 | ) |
| | | | | | | | | | | |
Cash flows from financing activities: | | | | | | | | | | | |
Proceeds from public equity offerings, net | | 348,352 | | — | | — | | — | | 348,352 | |
Proceeds from long-term debt | | 1,000,000 | | — | | — | | — | | 1,000,000 | |
Payments of long-term debt | | (501,112 | ) | — | | — | | — | | (501,112 | ) |
Payments of premiums on redemption of long-term debt | | (31,516 | ) | — | | — | | — | | (31,516 | ) |
Payments for debt issue costs and deferred financing costs | | (14,046 | ) | — | | — | | — | | (14,046 | ) |
Payments related to intercompany financing, net | | — | | — | | (918 | ) | 918 | | — | |
Contributions from parent and affiliates | | — | | 28,823 | | 783,600 | | (812,423 | ) | — | |
Contribution from non-controlling interest | | — | | — | | 685,219 | | — | | 685,219 | |
Share-based payment activity | | (5,206 | ) | 650 | | — | | — | | (4,556 | ) |
Payment of distributions | | (214,903 | ) | (47,860 | ) | (389,412 | ) | 437,160 | | (215,015 | ) |
Payments of SMR liability | | — | | (1,103 | ) | — | | — | | (1,103 | ) |
Intercompany advances, net | | (595,591 | ) | 595,591 | | — | | — | | — | |
Net cash flows (used in) provided by financing activities | | (14,022 | ) | 576,101 | | 1,078,489 | | (374,345 | ) | 1,266,223 | |
| | | | | | | | | | | |
Net (decrease) increase in cash | | (74,827 | ) | 24,207 | | 59,418 | | — | | 8,798 | |
Cash and cash equivalents at beginning of year | | 210,015 | | 102,979 | | 32,762 | | — | | 345,756 | |
Cash and cash equivalents at end of period | | $ | 135,188 | | $ | 127,186 | | $ | 92,180 | | $ | — | | $ | 354,554 | |
|