RADNOR, PENNSYLVANIA - November 5, 2015 - Niska
Gas Storage Partners LLC (NYSE:NKA) ("Niska" or "the Company")
reported today its financial results for the quarter and six months
ended September 30, 2015.
Financial Results
Niska's Adjusted EBITDA (as defined below) for the
quarter ended September 30, 2015 was $2.5 million, compared to $2.8
million for the quarter ended September 30, 2014. Adjusted
EBITDA was $3.5 million for the six months ended September 30,
2015, compared to $38.6 million for the six months ended September
30, 2014. Niska's Cash Available for Distribution (as defined
below) was negative $10.2 million for the quarter ended September
30, 2015 compared to negative $10.4 million in the quarter ended
September 30, 2014. Cash Available for Distribution was
negative $21.4 million for the six months ended September 30, 2015,
compared to positive $13.6 million for the six months ended
September 30, 2014.
Adjusted EBITDA and Cash Available for
Distribution for the quarter and six months ended September 30,
2015 include benefits from previous inventory write-downs of $12.5
million and $35.2 million, respectively, compared to $nil and $4.4
million for the quarter and six months ended September 30, 2014,
respectively. Results for the six months ended September 30,
2014 include the previously disclosed one-time recognition of $26.0
million in revenues related to the termination and renegotiation of
a long-term contract with TransCanada Gas Storage Partnership,
Niska's largest volumetric customer.
Niska's net loss for the quarter ended September
30, 2015 was $19.6 million ($0.51 per common unit), compared to a
net loss of $28.8 million ($0.78 per common unit) for the quarter
ended September 30, 2014. For the six months ended September
30, 2015 net loss was $57.0 million ($1.47 per common unit)
compared to $47.8 million ($1.30 per common unit) for the six
months ended September 30, 2014.
Merger Transaction
In June 2015, the Company announced that it and
its managing member, Niska Gas Storage Management LLC, had entered
into a definitive agreement to be acquired by Brookfield
Infrastructure and its institutional partners ("Brookfield").
Brookfield will acquire all of Niska's outstanding common units for
$4.225 per common unit in cash and will acquire the managing member
and the incentive distribution rights in Niska. The Company is
currently undergoing regulatory approval processes in relation to
this transaction. The closing of the transaction is expected to
occur in calendar year 2016.
On July 28, 2015, the Company entered into a
definitive agreement whereby Brookfield committed to lend up to
$50.0 million to Niska under a credit facility to be used for
working capital purposes (the "Brookfield credit facility").
The Brookfield credit facility is guaranteed by a subsidiary of the
Carlyle/Riverstone Funds and is subordinated to the Company's
existing Senior Notes and its exisiting $400.0 million credit
agreement. As of September 30, 2015, Niska had borrowed $20.0
million under this facility.
Liquidity
The Company's Fixed Charge Coverage Ratio, or
FCCR, which is included in its debt agreements and measures
Adjusted EBITDA compared to fixed charges (substantially all of
which is interest expense), was 0.6 to 1.0 as at September 30,
2015. When the FCCR is below 1.1 to 1.0, the Company is unable to
borrow the last 15% of availability under the revolving credit
facility. The absence of the last 15% of availability under
the borrowing base associated with the $400.0 million credit
agreement reduced amounts available by $39.3 million as at
September 30, 2015. As of November 2, 2015, the Company had
available liquidity of $69.4 million, consisting of $39.4 million
of availability under its $400.0 million credit agreement and $30.0
million of availability under the Brookfield credit
facility.
Distribution
The Company has agreed not to make earnings
distributions until the earlier of the date of closing or
termination of the merger transaction. Accordingly, no distribution
will be paid with respect to the fiscal quarter ended September 30,
2015.
Form 10-Q
A copy of the Company's current Form 10-Q can be
found on Niska's website, www.niskapartners.com under "Investor
Center-SEC Filings." Niska unitholders may receive hard
copies of these documents free of charge upon request by emailing
ir@niskapartners.com or by calling 403-513-8650.
About Niska
Niska is a midstream natural gas services provider
with operations focused on owning, operating, developing and
acquiring midstream energy assets in the United States and
Canada. The Company is currently the largest independent
owner and operator of natural gas storage in North America, with
strategically located assets in key natural gas producing and
consuming regions. Niska owns and operates three natural gas
storage facilities, including the AECO HubTM in Alberta,
Canada; Wild Goose in California; and Salt Plains in Oklahoma. The
Company also contracts for natural gas storage capacity in the U.S.
Mid-continent.
Forward Looking
Statements
This press release includes "forward-looking
statements" - that is, statements related to future, not past,
events. Forward-looking statements are based on current
expectations and include any statement that does not directly
relate to a current or historical fact. In this context,
forward-looking statements often address our expected future
business and financial performance, and often contain words such as
"anticipate," "believe," "intend," "expect," "plan," "will" or
other similar words. These forward-looking statements involve
certain risks and uncertainties that ultimately may not prove to be
accurate. Among these risks and uncertainties are (1) changes
in general economic conditions; (2) our level of exposure to the
market value of natural gas storage services which could adversely
affect our revenues and cash available to make distributions; (3)
competitive conditions in our industry; (4) actions taken by
third-party operators, processors and transporters; (5) changes in
the availability and cost of capital; (6) operating hazards,
natural disasters, weather-related delays, casualty losses and
other matters beyond our control; (7) the effects of existing and
future laws and governmental regulations; (8) the effects of future
litigation; and (9) other factors and uncertainties that are
unknown or unpredictable could also have a materially adverse
effect on future results. For further discussion of risks and
uncertainties, you should refer to Niska's filings with the United
States Securities and Exchange Commission. Actual results and
future events could differ materially from those anticipated in
such statements. Niska undertakes no obligation, and does not
intend to update these forward-looking statements to reflect events
or circumstances occurring after this press release. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press
release. All forward-looking statements are qualified in
their entirety by this cautionary statement.
*****
Non-GAAP Financial
Measures
Niska uses and discloses the financial measures
"Adjusted EBITDA" and "Cash Available for Distribution" in this
press release. Niska defines Adjusted EBITDA as net earnings
before interest, income taxes, depreciation and amortization,
unrealized risk management gains and losses, loss on extinguishment
of debt, foreign exchange gains and losses, inventory impairment
write-downs, gains and losses on asset dispositions, non-cash
compensation, asset impairments and other income. Niska
defines Cash Available for Distribution as Adjusted EBITDA reduced
by interest expense (excluding amortization of deferred financing
costs), income taxes paid (or recovered), maintenance capital
expenditures and other income. Niska's Adjusted EBITDA and
Cash Available for Distribution are not presentations made in
accordance with Generally Accepted Accounting Principles in the
United States ("GAAP"). Niska's management utilizes Adjusted
EBITDA and Cash Available for Distribution as key performance
measures in order to assess:
-
the financial performance of Niska's assets,
operations and return on capital without regard to financing
methods, capital structure or historical cost
basis;
-
the ability of Niska's assets to generate cash
sufficient to pay interest on its indebtedness and make
distributions to its equity holders;
-
repeatable operating performance that is not
distorted by non-recurring items or market volatility;
and
-
the viability of acquisitions and capital
expenditure projects.
The GAAP measure most directly comparable to
Adjusted EBITDA and Cash Available for Distribution is net
earnings. For a reconciliation of Adjusted EBITDA to net
earnings, please see the schedule provided in the attached
pages.
Niska believes that investors benefit from having
access to the same financial measures used by Niska's management.
Further, Niska believes that these measures are useful to
investors because they are one of the bases for comparing Niska's
operating performance with that of other companies with similar
operations, although Niska's measures may not be directly
comparable to similar measures used by other companies.
Niska Gas Storage Investor
Contact:
Sarah Steel -Director, Investor Relations -
403-513-8650
ir@niskapartners.com
NISKA GAS STORAGE
PARTNERS LLC
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
(in thousands of U.S. dollars, except for per unit
amounts)
(unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
|
|
|
|
|
|
|
Fee-based
revenue |
|
$ |
12,652 |
|
$ |
15,633 |
|
$ |
26,914 |
|
$ |
58,387 |
|
Optimization, net |
|
4,684 |
|
(5,043 |
) |
(333 |
) |
7,580 |
|
|
|
17,336 |
|
10,590 |
|
26,581 |
|
65,967 |
|
|
|
|
|
|
|
|
|
|
|
EXPENSES (INCOME) |
|
|
|
|
|
|
|
|
|
Operating |
|
8,626 |
|
12,062 |
|
16,583 |
|
23,015 |
|
General
and administrative |
|
6,730 |
|
6,205 |
|
17,960 |
|
16,279 |
|
Depreciation and amortization |
|
14,805 |
|
16,012 |
|
25,539 |
|
65,978 |
|
Interest |
|
12,965 |
|
12,735 |
|
25,706 |
|
25,047 |
|
Loss on disposal of assets |
|
240 |
|
20 |
|
240 |
|
6 |
|
Foreign
exchange losses (gains) |
|
79 |
|
(262 |
) |
135 |
|
(312 |
) |
Other income |
|
(6 |
) |
(2 |
) |
(11 |
) |
(3 |
) |
|
|
43,439 |
|
46,770 |
|
86,152 |
|
130,010 |
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS) BEFORE INCOME TAXES |
|
(26,103 |
) |
(36,180 |
) |
(59,571 |
) |
(64,043 |
) |
|
|
|
|
|
|
|
|
|
|
Income
tax benefit |
|
(6,494 |
) |
(7,348 |
) |
(2,555 |
) |
(16,240 |
) |
|
|
|
|
|
|
|
|
|
|
NET EARNINGS (LOSS) AND COMPREHENSIVE INCOME
(LOSS) |
|
$ |
(19,609 |
) |
$ |
(28,832 |
) |
$ |
(57,016 |
) |
$ |
(47,803 |
) |
|
|
|
|
|
|
|
|
|
|
Net
earnings (loss) allocated to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Managing
member |
|
$ |
(353 |
) |
$ |
(538 |
) |
$ |
(1,027 |
) |
$ |
(896 |
) |
Common unitholders |
|
$ |
(19,256 |
) |
$ |
(28,294 |
) |
$ |
(55,989 |
) |
$ |
(46,907 |
) |
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per unit allocated to common
unitholders - basic and diluted |
|
$ |
(0.51 |
) |
$ |
(0.78 |
) |
$ |
(1.47 |
) |
$ |
(1.30 |
) |
NISKA GAS STORAGE
PARTNERS LLC
SELECTED FINANCIAL DATA AND NON-GAAP
RECONCILIATIONS
(in thousands of U.S. dollars, except capacity
amounts)
(unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Earnings (Loss)
to Adjusted EBITDA and Cash Available for Distribution: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
|
$ |
(19,609 |
) |
$ |
(28,832 |
) |
$ |
(57,016 |
) |
$ |
(47,803 |
) |
Add /
(deduct): |
|
|
|
|
|
|
|
|
|
Interest expense |
|
12,965 |
|
12,735 |
|
25,706 |
|
25,047 |
|
Income
tax benefit |
|
(6,494 |
) |
(7,348 |
) |
(2,555 |
) |
(16,240 |
) |
Depreciation and amortization |
|
14,805 |
|
16,012 |
|
25,539 |
|
65,978 |
|
Non-cash
compensation |
|
130 |
|
993 |
|
713 |
|
1,243 |
|
Unrealized risk management losses (gains) |
|
381 |
|
(999 |
) |
10,712 |
|
151 |
|
Loss on
disposal of assets |
|
240 |
|
20 |
|
240 |
|
6 |
|
Foreign exchange losses (gains) |
|
79 |
|
(262 |
) |
135 |
|
(312 |
) |
Other
income |
|
(6 |
) |
(2 |
) |
(11 |
) |
(3 |
) |
Write-down of inventory |
|
- |
|
10,500 |
|
- |
|
10,500 |
|
Adjusted EBITDA |
|
2,491 |
|
2,817 |
|
3,463 |
|
38,567 |
|
Less: |
|
|
|
|
|
|
|
|
|
Cash
interest expense, net |
|
12,007 |
|
11,822 |
|
23,834 |
|
23,222 |
|
Income taxes paid |
|
- |
|
288 |
|
251 |
|
288 |
|
Maintenance capital expenditures |
|
655 |
|
1,061 |
|
810 |
|
1,460 |
|
Other income |
|
(6 |
) |
(2 |
) |
(11 |
) |
(3 |
) |
Cash available for distribution |
|
$ |
(10,165 |
) |
$ |
(10,352 |
) |
$ |
(21,421 |
) |
$ |
13,600 |
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
Fee-based revenue: |
|
|
|
|
|
|
|
|
|
Long-term
contract revenue |
|
$ |
8,928 |
|
$ |
14,101 |
|
$ |
18,573 |
|
$ |
54,584 |
|
Short-term contract revenue |
|
3,724 |
|
1,532 |
|
8,341 |
|
3,803 |
|
Total |
|
$ |
12,652 |
|
$ |
15,633 |
|
$ |
26,914 |
|
$ |
58,387 |
|
|
|
|
|
|
|
|
|
|
|
Proprietary optimization: |
|
|
|
|
|
|
|
|
|
Realized optimization |
|
$ |
5,065 |
|
$ |
4,458 |
|
$ |
10,379 |
|
$ |
18,231 |
|
Unrealized risk management (losses) gains |
|
(381 |
) |
999 |
|
(10,712 |
) |
(151 |
) |
Write-down of inventory |
|
- |
|
(10,500 |
) |
- |
|
(10,500 |
) |
Total |
|
$ |
4,684 |
|
$ |
(5,043 |
) |
$ |
(333 |
) |
$ |
7,580 |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures: |
|
|
|
|
|
|
|
|
|
Maintenance |
|
$ |
655 |
|
$ |
1,061 |
|
$ |
810 |
|
$ |
1,460 |
|
Expansion |
|
18 |
|
55 |
|
75 |
|
633 |
|
Total |
|
$ |
673 |
|
$ |
1,116 |
|
$ |
885 |
|
$ |
2,093 |
|
|
|
|
|
|
|
|
|
|
|
Operating data: |
|
|
|
|
|
|
|
|
|
Effective
working gas capacity (Bcf) |
|
244.9 |
|
250.5 |
|
244.9 |
|
250.5 |
|
Selected Balance Sheet
data
|
|
September 30, |
|
March 31, |
|
|
|
2015 |
|
2015 |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
18,829 |
|
$ |
11,699 |
|
Obligations under credit facilities |
|
$ |
173,500 |
|
$ |
193,500 |
|
Total debt excluding short-term credit facilities |
|
$ |
585,262 |
|
$ |
585,926 |
|
Members'
equity |
|
$ |
126,014 |
|
$ |
185,671 |
|
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Niska Gas Storage Partners LLC via
Globenewswire
HUG#1964280
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