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Actionable news in AMID: AMERICAN MIDSTREAM PARTNERS LP,

American Midstream: Delta House Fps, Llc INDEX TO FINANCIAL STATEMENTS

The following excerpt is from the company's SEC filing.

Independent Auditor's Report - BDO USA, LLP

Independent Auditor's Report - UHY LLP

Balance Sheets as of June 30, 2015 (unaudited) and December 31, 2014 (restated) and 2013 (audited)

Statements of Operations for the six months ended June 30, 2015 and 2014 (unaudited) and the years ended December 31, 2014 and 2013 (audited)

Statements of Members’ Equity for the six months ended June 30, 2015 (unaudited) and the years ended December 31, 2014 and 2013 (audited)

Statements of Cash Flows for the six months ended June 30, 2015 and 2014 (unaudited) and the years ended December 31, 2014 ( restated) and 2013 (audited)

Notes to the financial statements

1

Exhibit 99.2

Independent Auditor’s Report

To the Members of

Delta House FPS, LLC

Houston, Texas

We have audited the accompanying financial statements of Delta House FPS, LLC, which comprise the balance sheet as of December 31, 2014, and the related statements of operations, members’ equity, and cash flows for the year then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Delta House FPS, LLC as of December 31, 2014 and the results of its operations and its cash flows for the year then ended, in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Note 2 to the financial statements, the 2014 financial statements have been restated to correct misstatements. Our opinion is not modified with respect to this matter.

/s/ BDO USA, LLP

March 31, 2015 (except for the Restatement in Note 2 which is as of October 23, 2015)

2

have audited the accompanying financial statements of Delta House FPS, LLC (the “Company”), which comprise the balance sheet as of December 31, 2013, and the related statements of operations, members’ equity, and cash flows for the year then ended, and the related notes to the financial statements.

Auditors’ Responsibility

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Delta House FPS, LLC as of December 31, 2013, and the results of its operations and its cash flows for the year then ended, in accordance with accounting principles generally accepted in the United States of America.

/s/ UHY LLP

3

DELTA HOUSE FPS, LLC

BALANCE SHEETS

(in thousands)

ASSETS:

Current assets

Cash and cash equivalents

21,045

Restricted cash

Accounts receivable

35,814

Prepaid expenses

Total current assets

42,477

Property and equipment, net

668,426

611,075

386,292

Derivative asset, long-term

Debt acquisition costs, net

12,830

13,789

Total assets

723,822

633,391

407,337

LIABILITIES AND MEMBERS' EQUITY:

Current liabilities

Accounts payable and accrued liabilities

25,727

Accounts payable and accrued liabilities - affiliates

Derivative liability

Short-term debt

Current portion of long-term debt

85,915

27,760

Total current liabilities

89,216

38,679

26,937

Long-term debt

247,085

305,240

Deferred revenue

26,789

Asset retirement obligations

21,107

Total liabilities

384,197

343,919

Commitments and contingencies, Note 7

Members' equity

339,625

289,472

380,400

Total liabilities and members' equity

The accompanying notes are an integral part of these financial statements.

4

STATEMENTS OF OPERATIONS

Six Months ended June 30,

Years ended December 31,

Operating revenue

13,771

Operating costs and expenses:

General and administrative expenses

Accretion of asset retirement obligation

Depreciation and amortization

Total operating expenses

Income (loss) from operations

11,716

Other expense:

Interest expense

Realized loss on commodity derivatives

Total other expense

Net income (loss)

(1,402

The accompanying notes are an integral part of these financial statements.

5

STATEMENTS OF CHANGES IN MEMBERS' EQUITY

Class A

Class B

Class C

Class D

Retained Earnings (Deficit)

Members' Equity

Amount

Balance at December 31, 2012

92,164

(2,900

89,264

Units issued

291,199

291,202

Net loss

Balance at December 31, 2013

383,363

(2,966

186,386

192,852

Distributions

(282,378

Balance at December 31, 2014

569,749

287,371

(4,368

35,642

42,497

Balance at June 30, 2015 (unaudited)

576,604

294,226

42,108

6

STATEMENTS OF CASH FLOWS

Six months ended June 30,

Cash flows from operating activities

Adjustments to reconcile net cash provided by operating activities:

Amortization of deferred loan costs

Changes in fair value of derivatives

Changes in assets and liabilities:

Accounts receivable

(35,767

Accounts payable and other current liabilities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Change in restricted cash

(6,432

(5,325

Additions to property and equipment

(45,061

(152,027

(241,840

(290,772

Net cash flows used in investing activities

(45,559

(158,459

(247,165

Cash flows from financing activities:

Issuance of equity units

145,608

Debt borrowing

295,550

333,000

(13,248

(14,946

Net cash flows provided by financing activities

42,940

145,532

228,528

Net change in cash and cash equivalents

(1,953

(13,019

(18,731

Cash and cash equivalents at beginning of period

20,681

Cash and cash equivalents at end of period

Supplemental cash flow disclosures

Interest paid

Non-Cash Investing Activities

20,932

Capitalized expenditures financed by accounts payable and accrued liabilities

18,213

Interest capitalized (including capitalized amortization of debt acquisitions costs of $582, $0, $1,156 and $0, respectively)

7

NOTES TO FINANCIAL STATEMENTS

1. Organization and Nature of Operations

Delta House FPS, LLC (the “Company”) was formed in the state of Delaware as a limited liability company on October 18, 2012. The Company is to continue in existence until it is dissolved and terminated by the members of the Company in accordance with the provisions of the Limited Liability Agreement (the “LLC Agreement” or “Operating Agreement”). The Company was formed to finance, design, construct, and own and operate a floating production system (“Base FPS”) for use in the Gulf of Mexico. The planned capacity of the Base FPS is 80,000 bbl per day of oil, 40,000 bbl per day of water and 300 MMCF per day of natural gas.

The Base FPS became operational during April 2015.

On December 6, 2012, the Company entered into a processing agreement with the producers (the “Producers”) of the Marmalard, Neidermeyer and SOB 2 prospects (the “Anchor Prospects”), Blue Wing Olive, Malachite and SOB III prospects (“Secondary Prospects”) and Otis and Odd Job prospects (“Additional Priority Prospects”) in the Gulf of Mexico for the use of the Company’s Base FPS. The Producers have agreed to pay the Company a production handling fee based on the oil, gas and condensate produced from the Anchor Prospects. It is expected that production from other prospects near the Anchor Prospects also may be processed through the facility in the future. In the event of a suspension of production, the Producers are contractually obligated to pay a suspension fee as defined in the processing agreement. The Producers will also pay

a decommissioning fee on the production processed through the facility, which will be used to fund the decommissioning and abandonment costs of the Base FPS.

Profits and losses are allocated to the members in proportion to their equity percentage interests with certain restrictions dictated by specific terms under the LLC Agreement.

2. Summary of Significant Accounting Policies

Basis of Presentation for interim financial information

These unaudited financial statements as of June 30, 2015 and for the six months ended June 30 2015 and 2014 have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished herein reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair statement of financial position and results of operations for the respective interim periods. The financial results for the six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the full year ended December 31, 2015.

Amounts in these footnotes are presented in thousands, unless otherwise identified.

Recent Accounting Pronouncements

In April 2015, the FASB issued ASU No. 2015-03,

Simplifying the Presentation of Debt Issuance Costs.

This amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015, including interim periods therein, and is applied retrospectively. Early adoption is permitted for financial statements that have not been previously issued. At June 30, 2015, the Company had approximately $12,829 of deferred financing costs, which would be reclassified as a reduction of long-term debt under the updated guidance.

The FASB issued ASU 2014-09,

Revenue from Contracts with Customers (Topic 606)

, which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that “an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from...


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