2013-01-31 15:21:35 -
HOUSTON, TEXAS - January 31, 2013 - Niska Gas Storage Partners LLC (NYSE:NKA)
("Niska" or "the Company") reported today financial results for the
quarter and
nine months ended December 31, 2012. The Company also provided an update on its
current business environment and outlook.
Financial Results
Adjusted EBITDA (as defined below) for Niska's third quarter ended December 31,
2012, was $15.0 million compared to $12.5 million for the fiscal quarter ended
December 31, 2011. For the nine months ended December 31, 2012, Adjusted EBITDA
was $104.0 million compared to $81.3 million in the nine months ended
December 31, 2011. Cash available for distribution (as defined below) was
negative $1.6 million and positive $55.3 million for the three month and nine
month periods ended December 31, 2012, compared to negative $7.8 million and
positive $24.2 million for the comparable periods last year. In the three and
nine month periods ended December 31, 2012, Adjusted EBITDA included the
benefits of approximately $11.4 million and $17.8 million, respectively,
resulting from inventory write-downs recorded in the quarters ended March 31,
2012 and June 30, 2012. Niska's net earnings were $10.4 million ($0.15 per
unit) for the three months ended December 31, 2012. Niska's net loss was $42.3
million ($0.61 per unit) for the nine months ended December 31, 2012. These
amounts compare to net losses of $213.6 million ($3.07 per unit) and $181.4
million ($2.62 per unit) for the three and nine month periods ended December 31,
2011. The three and nine month periods from last year include a provision for
goodwill impairment of $250.0 million.
Operations and Outlook
"Niska continues to operate well in a challenging market environment," said
Simon Dupéré, President and Chief Executive Officer, "We continue to experience
relatively lower natural gas storage spreads with modest market volatility.
However, the proactive approach we have taken throughout Fiscal 2013 in
marketing our capacity has allowed us to lock-in a substantial portion of our
projected Fiscal Year 2013 revenues. As a result, we are reaffirming our
guidance for Adjusted EBITDA as $130 million to $140 million and our Cash
Available for Distribution guidance as $65 million to $75 million. These
estimates exclude any beneficial impact of the inventory write-downs recorded in
the quarters ended March 31, 2012 and June 30, 2012."
"Since the end of Fiscal 2011, we have seen continued weakness in seasonal
storage spreads and low volatility. However, we are now seeing demand increase
due to the low cost and ample supply of North American natural gas. In addition,
Western Canada, where one of our major storage assets is located, continues to
be a key source of natural gas for major North American markets. We believe
that demand for natural gas will continue to grow, and that storage will be
required to balance a larger market, which could lead to future improvement in
market conditions."
Continued Mr. Dupéré, "During the quarter, we furthered our efforts to position
Niska for long-term growth. We completed the pipeline tie-in at our Wild Goose
facility in California and continued to pursue regulatory approval for an
expansion of up to 25 billion cubic feet ("Bcf") at that location, which would
increase working gas capacity from 50 Bcf to 75 Bcf. In addition, we are
evaluating the opportunity for liquids storage at our Starks location, a salt
cavern project located in a major industrial zone in Southwest Louisiana. Our
efforts to grow and diversify our business represent our commitment to building
value for our unitholders."
Distributions
Niska today announced a cash distribution of $0.35 per common unit. The
distribution will be payable on Friday, February 15, 2013 to common unitholders
of record at the close of business on Monday, February 11, 2013. This
distribution represents the minimum quarterly distribution of $0.35 per unit, or
$1.40 per common unit on an annualized basis, as set forth in Niska`s operating
agreement and is unchanged from the preceding quarter. The Company continued the
suspension of distributions on its subordinated units.
Earnings Call
Niska will host a conference call detailing its quarterly results on Thursday,
January 31, 2013, at 10:00 a.m. Eastern Standard Time (9:00 a.m. CST). This call
will be webcast by Thomson Reuters and can be accessed at Niska's website at
www.niskapartners.com.
If you are unable to participate in the webcast of the earnings call, you may
access the live conference call by dialing the following numbers:
North America: 1-800-299-7635
International: 1-617-786-2901
Access Code: 86309071
A telephonic replay can be accessed until midnight, February 7, 2013 at the
following numbers:
North America: 1-888-286-8010
International: 1-617-801-6888
Access Code: 52365438
In addition, an electronic replay and PDF transcript will be available on
Niska's website in the Investor Center section under the Presentations and
Webcasts tab.
About Niska
Niska is 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 facilities, including the
AECO Hub(TM) in Alberta, Canada; Wild Goose in California; and Salt Plains in
Oklahoma. Niska also contracts gas storage capacity on the Natural Gas Pipeline
Company of America system. In total, Niska owns or contracts approximately
225.5 Bcf of gas storage capacity.
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. Our estimates of future Adjusted EBITDA and Cash
Available for Distribution, as well as our expectation regarding expansion
capital expenditures for our fiscal year, are forward-looking statements. 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 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 inherent in the development and operation of natural
gas storage facilities. Other factors that are not described that are unknown or
unpredictable could also have a material 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, asset impairments
(including goodwill) 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, 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. This press
release contains forward-looking estimates of Adjusted EBITDA and Cash Available
for Distribution for the fiscal year ending March 31, 2013. Reconciliations to
GAAP net earnings are not provided for these forward-looking estimates because
GAAP net earnings for the fiscal year ending March 31, 2013 are not accessible.
Niska is able to estimate interest expense, income tax benefits, depreciation
and amortization, inventory write-downs, impairments of assets (including
goodwill), losses on extinguishment of debt, foreign exchange gains and losses
and other income. However, the Company is unable to predict future unrealized
risk management gains and losses and these amounts could be material, such that
the amount of net earnings would vary substantially from the amount of projected
Adjusted EBITDA and Cash Available for Distribution.
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.
This information is intended to be a qualified notice under Treasury Regulation
Section 1.1446-4(b). Under rules applicable to publicly-traded partnerships, our
distributions to non-U.S. unitholders are subject to withholding tax at the
highest effective applicable rate to the extent attributable to income that is
effectively connected with the conduct of a U.S. trade or business. Given the
uncertainty at the time of making distributions regarding the amount of any
distribution that is attributable to income that is so effectively connected, we
intend to treat all of our distributions as attributable to our U.S. operations,
and as a result, the entire distribution will be subject to withholding.
Contact
Niska Gas Storage Partners LLC
Investor Relations:
Brandon Tran, Investor Relations Associate
(403) 513-8600
NISKA GAS STORAGE PARTNERS LLC
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(in thousands of U.S. dollars, except for per unit amounts)
(unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
---------------------------- -----------------------------
2012 2011 2012 2011
------------ --------------- ------------- --------------
REVENUES
Long-term $ $ $ $
contract 26,492 28,994 82,283 88,069
Short-term
contract 14,763 8,228 37,031 19,532
Optimization,
net 32,576 52,682 (23,725) 103,726
------------ --------------- ------------- --------------
Total revenue 73,831 89,904 95,589 211,327
------------ --------------- ------------- --------------
EXPENSES
(INCOME)
Operating 8,330 9,702 25,250 34,881
General and
administrative 8,417 6,015 26,332 20,482
Depreciation and
amortization 14,831 13,115 39,896 33,922
Loss on disposal
of assets 15,072 - 15,072 -
Interest 17,279 19,598 50,459 57,620
Impairment of
goodwill - 250,000 -
250,000
Loss on
extinguishment of
debt - 5,147 599 6,030
Foreign exchange
losses (gains) 22 557 (314) 939
Other expense
(income) 3 (7) (182) (49)
------------ --------------- ------------- --------------
63,954 304,127 157,112 403,825
------------ --------------- ------------- --------------
INCOME (LOSS)
BEFORE INCOME
TAXES 9,877 (214,223) (61,523) (192,498)
Income tax
expense (benefit) (542) (593) (19,200) (11,084)
------------ --------------- ------------- --------------
NET EARNINGS
(LOSS) AND
COMPREHENSIVE $ $ $
INCOME (LOSS) 10,419 $ (213,630) (42,323) (181,414)
------------ --------------- ------------- --------------
Net earnings
(loss) allocated
to:
$ $ $ $
Managing member 206 (4,230) (838) (3,595)
------------ --------------- ------------- --------------
Common $ $ $
unitholders 5,158 $ (105,754) (20,951) (89,804)
------------ --------------- ------------- --------------
Subordinated $ $ $
unitholder 5,055 $ (103,646) (20,534) (88,015)
------------ --------------- ------------- --------------
Earnings (loss)
per unit
allocated to
common
unitholders - $ $ $ $
basic and diluted 0.15 (3.07) (0.61) (2.62)
------------ --------------- ------------- --------------
Earnings (loss)
per unit
allocated to
subordinated
unitholders - $ $ $ $
basic and diluted 0.15 (3.07) (0.61) (2.62)
------------ --------------- ------------- --------------
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 Nine Months Ended
December 31, December 31,
------------------------------ ----------------------------
2012 2011 2012 2011
--------------- -------------- -------------- -------------
Reconciliation of
Net Earnings
(Loss) to
Adjusted EBITDA
and Cash Available
for Distribution:
$ $ $ $
Net loss 10,419 (213,630) (42,323) (181,414)
Add (deduct):
Interest expense 17,279 19,598 50,459 57,620
Income tax
benefit (542) (593) (19,200) (11,084)
Depreciation and
amortization 14,831 13,115 39,896 33,922
Unrealized risk
management (gains)
losses (42,118) (61,736) 37,739 (74,708)
Loss on disposal
of assets 15,072 - 15,072
-
Impairment of
goodwill - 250,000 -
250,000
Loss on
extinguishment of
debt - 5,147 599 6,030
Foreign exchange
losses (gains) 22 557 (314)
939
Other expense
(income) 3 (7) (182)
(49)
Write-down of
inventory - - 22,281
-
--------------- -------------- -------------- -------------
Adjusted EBITDA 14,966 12,451 104,027 81,256
Less:
Cash interest
expense, net 16,421 18,626 47,882 54,602
Income taxes
(recovered) paid (31) 352 (38) 1,107
Maintenance
capital
expenditures 193 1,274 1,107 1,436
Other expense
(income) 3 (7) (182)
(49)
--------------- -------------- -------------- -------------
Cash available $ $ $ $
for distribution (1,620) (7,794) 55,258 24,160
--------------- -------------- -------------- -------------
Revenue:
Long-term $ $ $ $
contract 26,492 28,994 82,283 88,069
Short-term
contract 14,763 8,228 37,031 19,532
Proprietary
optimization:
Realized
optimization (9,542) (9,054) 36,316 29,018
Unrealized risk
management gains
(losses) 42,118 61,736 (37,760) 74,708
Write-down of
inventory - - (22,281)
-
--------------- -------------- -------------- -------------
$ $ $ $
Total 73,831 89,904 95,589 211,327
--------------- -------------- -------------- -------------
Total realized $ $ $ $
revenues 31,713 28,168 155,630 136,619
--------------- -------------- -------------- -------------
Capital
expenditures:
$ $ $ $
Maintenance 193 1,274 1,107 1,436
Expansion and
cost reduction 1,805 24,107 22,577 47,941
--------------- -------------- -------------- -------------
$ $ $ $
Total 1,998 25,381 23,684 49,377
--------------- -------------- -------------- -------------
Operating data:
Effective working
gas capacity (Bcf) 225.5 206.5 225.5 206.5
Capacity added
during the period - 2.0 4.0
2.0
December 31, March 31,
Selected Balance
Sheet data 2012 2012
--------------- --------------
(unaudited)
Cash and cash $ $
equivalents 11,660 13,342
---------------- --------------
Borrowings under
revolving credit $ $
facility 124,000 150,000
---------------- --------------
Total debt
excluding
revolving credit $ $
facility 643,790 643,790
---------------- --------------
$ $
Members' equity 611,886 690,390
---------------- --------------
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Niska Gas Storage Partners LLC via Thomson Reuters ONE
[HUG#1674310]
