MOBILE ENERGY SERVICES HOLDINGS, INC./MOBILE ENERGY SERVICES COMPANY, LLC
PROFORMA FINANCIAL STATEMENTS
The financial statements and proforma adjustments contained in the attached
financial statements are unaudited. The proforma entries were developed with
information provided in the Disclosure Statement Accompanying the First Amended
Plan of Reorganization Dated September 15, 2000 Proposed by Mobile Energy
Services Company, L.L.C., Mobile Energy Services Holdings, Inc., and the
Bondholder Steering Committee, including the exhibits attached thereto.
Certain of the proforma entries are based upon projections attached to the above
mentioned Disclosure Statement. These projections are forward-looking statements
that based upon various estimates and assumptions. Such information and
statements are not guarantees of future performance and involve certain risks,
uncertainties and assumptions which are difficult to predict, including risks
described in the Disclosure Statement. Therefore, actual outcomes and results
may differ materially from what is expressed or forecasted herein. The proforma
statements and entries will not be updated to reflect events or changes, whether
the result of new information, future events or otherwise.
MOBILE ENERGY SERVICES HOLDINGS, INC./MOBILE ENERGY SERVICES COMPANY, LLC
ASSUMPTIONS TO PROFORMA FINANCIAL STATEMENTS
1. The results shown in the actual column reflect amounts shown on the
respective Debtors' financial statement received from the Company, with minor
modification made to format to comply with GAAP
2. Fresh-start accounting is assumed to apply for MESH but not MESC
3. MESC will elect to proceed with the purchase of the CT
4. MESC's liability for severance costs is assumed to be the maximum
allowable amount as per Amendement Number 1 to the Cogeneration Development
Agreement
5. The estimated value of MESC's existing property, plant & equipment
post-Effective Date is assumed to be approximately $50 million, although no
formal valuation has been done to support this assumption
6. No accrual for income tax liability was recorded as of September 30, 2000.
The deferred tax obligation of MESH arises out of an excess of book value of
property, plant and equipment and equipment over its tax value
7. All holders of the Tax-Exempt Bonds are assumed to opt for the receipt of
common stock
8. Prepetition liabilities are assumed to be equal in amounts to those in
the disclosure statement and discharged according to the first amended joint
plan of reorganization
9. The proforma statements attached hereto present the proforma effects of the
plan as if the Effective Date of the plan will be January 31, 2001
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<TABLE>
<CAPTION>
MOBILE ENERGY SERVICES COMPANY, LLC
BALANCE SHEET
ACTUAL AND PROFORMA
AS OF SEPTEMBER 30, 2000
UNAUDITED
(in thousands)
MESC Proforma MESC
Actual (a) Entries Proforma
ASSETS
CURRENT ASSETS
<S> <C> <C> <C>
Cash and cash equivalents $ 11,974 $ (8,093) $ 3,881
Restricted deposits 65 30,120 30,185
Accounts receivable:
Trade 11,917 (3,218) 8,699
Other 6 - 6
Materials and supplies 3,837 - 3,837
Prepaid expenses and other 361 - 361
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Total current assets 28,160 18,809 46,969
PROPERTY, PLANT AND EQUIPMENT 395,493 1,875 397,368
Less: accumulated depreciation (70,399) (275,000) (345,399)
Construction work in progress 10,900 35,037 45,937
----------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, net 335,994 (238,088) 97,906
DEFERRED LOAN COST, net 16,168 (16,168) -
----------------------------------------------------------------------------------------------------------------------------
Total assets $ 380,322 $ (235,447) $144,875
--------------------------------------------------------------=============------------==============----------=============
LIABILITIES AND MEMBERS' EQUITY
Liabilities not subject to compromise
CURRENT LIABILITIES
Trade accounts payable $ 8,178 - 8,178
Other accounts payable - 30,900 30,900
Accrued expenses and other liabilities 773 2,000 2,773
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Total current liabilities 8,951 32,900 41,851
----------------------------------------------------------------------------------------------------------------------------
LONG-TERM DEBT - 71,570 71,570
Liabilities subject to compromise 239,198 (b) (239,198) -
MEMBERS' EQUITY 132,173 (100,719) 31,454
----------------------------------------------------------------------------------------------------------------------------
Total liabilities and members' equity $ 380,322 $ (235,447) $144,875
--------------------------------------------------------------=============------------==============----------=============
(a) The actual balance shown in the balance sheet above reflect actual results
as of September 30, 2000 while the figures shown in the sources and uses
statement in the Disclosure Statement show actual results through June 30, 2000
and projected results thereafter
(b)Liabilities subject to compromise
First Mortgage Bonds , net of discount of$17,165 $ 172,883
Pollution Control Bonds, net of discount of $7,921 64,254
Accounts payable 2,061
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Total liabilities subject to compromise $ 239,198
----------------------------------------------------=============-------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
MOBILE ENERGY SERVICES COMPANY, LLC
STATEMENT OF OPERATIONS
ACTUAL AND PROFORMA
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2000
UNAUDITED
(in thousands)
MESC Proforma MESC
Actual (a) Entries Proforma
OPERATING REVENUES:
<S> <C> <C> <C>
Demand charges $ 33,125 $ 4,126 $ 37,251
Processing charges 32,819 12,587 45,406
Compressed air 450 269 719
Ash hauling 694 221 915
Power sales 377 - 377
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Total operating revenues 67,465 17,203 84,668
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OPERATING EXPENSES:
Operations and maintenance 21,110 7,654 28,764
Fuel 28,749 12,930 41,679
Depreciation and amortization 13,531 6,000 19,531
----------------------------------------------------------------------------------------------------------------------------
Total operating expenses 63,390 26,584 89,974
----------------------------------------------------------------------------------------------------------------------------
OPERATING LOSS 4,075 (9,381) (5,306)
INTEREST, net 80 (82) (2)
OTHER 25 - 25
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Net loss before reorganization items 3,970 (9,299) (5,329)
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REORGANIZATION ITEMS:
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Professional fees 4,314 2,000 6,314
Litigation settlement proceeds (30,120) (30,120)
Employee termination expense 2,000 2,000
Debt forgiveness income (167,628) (167,628)
Loss on asset writedown 285,168 285,168
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Total reorganization items 4,314 91,420 95,734
----------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ (344) $ (100,719) $(101,063)
--------------------------------------------------------------=============------------==============----------=============
(a) The actual balance shown in the statement of operations above reflect actual
results through September 30, 2000 while the figures shown in the sources and
uses statement in the Disclosure Statement show actual results through June 30,
2000 and projected results thereafter
</TABLE>
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<TABLE>
<CAPTION>
MOBILE ENERGY SERVICES COMPANY, LLC
STATEMENTS OF MEMBERS' EQUITY AND RETAINED EARNINGS
ACTUAL AND PROFORMA
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2000
UNAUDITED
(in thousands)
MESC Proforma MESC
Actual (a) Entries Proforma
MEMBERS' EQUITY
<S> <C> <C> <C>
Members' equity at October 1, 1999 $ 81,548 $ - $ 81,548
Members' equity issued - - -
-------------------------------------------------------------------------------------------------------
Members' equity at September 30, 2000 $ 81,548 $ - $ 81,548
-------------------------------------------------=============----==============----------=============
RETAINED EARNINGS
Retained earnings at October 1, 1999 $ 50,969 $ - $ 50,969
Net income (344) (100,719) (101,063)
-------------------------------------------------------------------------------------------------------
Retained earnings at September 30, 2000 $ 50,625 $ (100,719) $(50,094)
-------------------------------------------------=============----==============----------=============
TOTAL MEMBERS' EQUITY $ 132,173 $ (100,719) $ 31,454
-------------------------------------------------=============----==============----------=============
(a) The actual balance shown in the statement of members' equity and retained
earnings above reflect actual results as of September 30, 2000 while the figures
shown in the sources and uses statement in the Disclosure Statement show actual
results through June 30, 2000 and projected results thereafter
</TABLE>
<PAGE>
MOBILE ENERGY SERVICES COMPANY, LLC
PROFORMA ENTRIES
(in thousands)
UNAUDITED
1. Liabilities subject to compromise $ 239,198
Debt forgiveness income $ 167,628
Long-term debt $ 71,570
To record the issuance of new long-term debt and remove liabilities subject
to compromise as contemplated in the plan of reorganization
2. Restricted deposits $ 30,120
Litigation settlement proceeds $ 30,120
To record payment from KCTC as contemplated under plan of reorganization
3. Employee termination expense $ 2,000
Accrued expenses and other liabilities $ 2,000
To accrue for projected severance pay obligations pursuant to Amendment Number 1
to the MESC Cogeneration Development Agreement
4. Construction in progress $ 30,900
Other accounts payable $ 30,900
To record the liability for the Turbine Option Fee and turbine payment pursuant
to Amendment Number 1 to the MESC Cogeneration Development Agreement
5. Loss on asset writedown 285,168
Accumulated depreciation 269,000
Deferred loan costs 16,168
To writedown property, plant and equipment to estimated fair market value and
to writeoff deferred loan costs
6. Operations and maintenance $ 7,654
Fuel $ 12,930
Depreciation and amortization $ 6,000
Professional Fees $ 2,000
Demand charges $ 4,126
Processing charges $ 12,587
Compressed air $ 269
Ash hauling $ 221
Interest, net $ 82
Accumulated depreciation $ 6,000
Accounts receivable-trade $ 3,218
Cash $ 2,081
To reflect projected operating results from October 1, 2000 through January 31,
2001 per the sources and uses statement attached to the Disclosure Statement
7. Property, plant & equipment $ 1,875
Cash $ 1,875
To record projected capital expenditures from October 1, 2000 through
January 31, 2001
8. Construction in progress $ 4,137
Cash $ 4,137
To record projected capital expenditures related to the Cogeneration
Project
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<TABLE>
<CAPTION>
MOBILE ENERGY SERVICES HOLDINGS, INC.
BALANCE SHEET
ACTUAL AND PROFORMA
AS OF SEPTEMBER 30, 2000
UNAUDITED
(in thousands)
MESH Proforma MESH
Actual (a) Entries Proforma
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 2,106 - $ 2,106
Accounts receivable:
Trade - - -
Other 2,591 - 2,591
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Total current assets 4,697 - 4,697
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Investment in subsidiary 14,959 16,495 31,454
Investment in Pulpco LLC preferred units 47,500 47,500
Deferred Charges 501 (501) -
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Total assets $ 20,157 $ 63,494 $ 83,651
-------------------------------------------------------------=============-------------=============----------=============
LIABILITIES AND SHARHOLDERS' EQUITY
Liabilities not subject to compromise
CURRENT LIABILITIES
Trade accounts payable $ - - -
Other accounts payable 1 - 1
Accrued expenses and other liabilities - - -
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Total current liabilities 1 - 1
---------------------------------------------------------------------------------------------------------------------------
DEFERRED INCOME TAXES 30,259 (10,259) 20,000
SHAREHOLDERS' EQUITY (DEFICIT) (10,103) 73,753 63,650
---------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 20,157 $ 63,494 $ 83,651
-------------------------------------------------------------=============-------------=============----------=============
(a) The actual balance shown in the balance sheet above reflect actual results
as of September 30, 2000 while the figures shown in the sources and uses
statement in the Disclosure Statement show actual results through June 30, 2000
and projected results thereafter
</TABLE>
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<TABLE>
<CAPTION>
MOBILE ENERGY SERVICES HOLDINGS, INC.
STATEMENT OF OPERATIONS
ACTUAL AND PROFORMA
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2000
UNAUDITED
(in thousands)
MESH Proforma MESH
Actual (a) Entries Proforma
<S> <C> <C> <C>
Loss on investment in subsidiary $ (340) $ (11,199) $(11,539)
---------------------------------------------------------------------------------------------------------------------------
Loss before reorganization items (340) (11,199) (11,539)
Reorganization items:
---------------------------------------------------------------------------------------------------------------------------
Writeoff of deferred charges - 501 501
---------------------------------------------------------------------------------------------------------------------------
Net loss before income tax benefit (340) (11,700) (12,040)
Income tax benefit (222) (222)
---------------------------------------------------------------------------------------------------------------------------
Net loss $ (118) $ (11,700) $(11,818)
-------------------------------------------------------------=============-------------=============----------=============
(a) The numbers in the actual column in the statement of operations above
reflect actual results through September 30, 2000 while the figures shown in the
sources and uses statement in the Disclosure Statement show actual results
through June 30, 2000 and projected results thereafter
</TABLE>
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<TABLE>
<CAPTION>
MOBILE ENERGY SERVICES HOLDINGS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY AND RETAINED EARNINGS
ACTUAL AND PROFORMA
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2000
UNAUDITED
(in thousands)
MESH Proforma MESH
Actual (a) Entries Proforma
COMMON STOCK
<S> <C> <C> <C> <C>
Common stock at October 1, 1999 $ 1 $ (1) $ -
Additions - 10,000 10,000
Reductions - -
---------------------------------------------------------------------------------------------------------------------------
Common stock at September 30, 2000 $ 1 $ 9,999 $ 10,000
-------------------------------------------------------------=============-------------=============----------=============
ADDITIONAL PAID-IN CAPITAL
Additional paid-in capital at October 1, 1999 $ 52,776 $ - $ 52,776
Additions 53,650 53,650
Reductions - (52,776) (52,776)
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Additional paid-in capital at September 30, 2000 $ 52,776 $ 874 $ 53,650
-------------------------------------------------------------=============-------------=============----------=============
RETAINED EARNINGS
Retained earnings at October 1, 1999 $ (62,762) $ - $(62,762)
Net income (118) (11,700) (11,818)
Elimination of deficit - 74,580 74,580
---------------------------------------------------------------------------------------------------------------------------
Retained earnings at September 30, 2000 $ (62,880) $ 62,880 $ -
-------------------------------------------------------------=============-------------=============----------=============
TOTAL SHAREHOLDERS' EQUITY $ (10,103) $ 73,753 $ 63,650
-------------------------------------------------------------=============-------------=============----------=============
(a) The amounts shown in the statement of shareholders' equity and retained
earnings above reflect actual results as of September 30, 2000 while the figures
shown in the sources and uses statement in the disclosure Statement show actual
results through June 30, 2000 and projected results thereafter </TABLE>
<PAGE>
MOBILE ENERGY SERVICES HOLDINGS, INC.
PROFORMA ENTRIES
UNAUDITED
(in thousands)
1. Loss on investment in subsidiary $ 11,199
Investment in subsidiary $ 11,199
-To reflect projected loss on investment in subsidiary from October 1, 2000
through January 31, 2001 based upon projected loss to be realized by subsidiary
1. Common stock (old) $ 1
Additional paid-in capital (old) $ 9,999
Common stock (new) $ 10,000
-To record the exchange of the new common stock for the old common stock
2. Writeoff of deferred charges $ 501
Deferred charges $ 501
-To writeoff deferred charges
3. Deferred tax liability $ 10,259
Retained earnings (old) 10,259
-To record estimated deferred tax liability
4. Investment in Pulpco LLC preferred units $ 47,500
Additional paid-in capital (new) $ 47,500
5. Investment in subsidiary $ 27,694
Additional paid-in capital (old) $ 42,777
Additional paid-in capital (new) $ 6,150
Retained earnings (old) $ 64,321
-To adjust carrying value of subsidiary to reflect current book value of
subsidiary's equity and remove remainder of retained deficit
