RADNOR, PENNSYLVANIA - February 4, 2016 - Niska
Gas Storage Partners LLC (NYSE:NKA) ("Niska" or "the Company")
reported today its financial results for the quarter and nine
months ended December 31, 2015.
Financial Results
Niska's Adjusted EBITDA (as defined below) for the
quarter ended December 31, 2015 was $7.0 million, compared to
$9.4 million for the quarter ended December 31, 2014. Adjusted
EBITDA was $10.5 million for the nine months ended December 31,
2015, compared to $48.0 million for the nine months ended December
31, 2014.
Adjusted EBITDA for the quarter and nine months
ended December 31, 2015 include benefits from previous inventory
write-downs of $7.7 million and $42.9 million, respectively,
compared to $4.4 million and $8.8 million for the quarter and nine
months ended December 31, 2014, respectively.
Niska's net loss for the quarter ended December
31, 2015 was $21.0 million ($0.54 per common unit), compared to a
net loss of $259.6 million ($6.85 per common unit) for the quarter
ended December 31, 2014. For the nine months ended December 31,
2015 net loss was $78.0 million ($2.02 per common unit) compared to
a net loss of $307.4 million ($8.27 per common unit) for the nine
months ended December 31, 2014. Results for the quarter and nine
months ended December 31, 2014 include a non-cash write-down of the
Company's recorded goodwill of $245.6 million.
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 closing of the
transaction is dependent on certain conditions related to
regulatory requirements, including the approval of the California
Public Utilities Commission ("CPUC"), being satisfied. The
Company expects the transaction to be consummated in calendar year
2016; however, the timing of the process is still ultimately within
the purview of the CPUC and the transaction remains subject to
other non-regulatory closing conditions.
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 existing $400.0 million credit
agreement. As of December 31, 2015, Niska had borrowed $20.6
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, was 0.6 to 1.0 as of
December 31, 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. As a result, availability under
the revolver was reduced by $36.1million as of December 31, 2015.
As of February 1, 2016, the Company had available liquidity of
$60.8 million, consisting of $31.4 million of availability under
its $400.0 million credit agreement and $29.4 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
December 31, 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 measure
"Adjusted EBITDA" 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's Adjusted EBITDA is not presented in accordance with
Generally Accepted Accounting Principles in the United States
("GAAP"). Niska's management utilizes Adjusted EBITDA as a key
performance measure 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 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 |
|
Nine Months Ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
|
|
|
|
|
|
|
Fee-based
revenue |
|
$ |
13,227 |
|
$ |
15,628 |
|
$ |
40,141 |
|
$ |
74,015 |
|
Optimization, net |
|
5,393 |
|
23,591 |
|
5,060 |
|
31,171 |
|
|
|
18,620 |
|
39,219 |
|
45,201 |
|
105,186 |
|
|
|
|
|
|
|
|
|
|
|
EXPENSES (INCOME) |
|
|
|
|
|
|
|
|
|
Operating |
|
7,709 |
|
9,434 |
|
24,292 |
|
32,451 |
|
General
and administrative |
|
5,718 |
|
4,233 |
|
23,678 |
|
20,513 |
|
Depreciation and amortization |
|
17,392 |
|
41,752 |
|
42,931 |
|
107,730 |
|
Interest |
|
13,265 |
|
13,182 |
|
38,971 |
|
38,229 |
|
Impairment of goodwill |
|
- |
|
245,604 |
|
- |
|
245,604 |
|
Losses
(gains) on disposals of assets |
|
28 |
|
(70 |
) |
268 |
|
(64 |
) |
Foreign exchange losses |
|
197 |
|
344 |
|
332 |
|
32 |
|
Other
expense (income) |
|
7 |
|
(2 |
) |
(4 |
) |
(8 |
) |
|
|
44,316 |
|
314,477 |
|
130,468 |
|
444,487 |
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS) BEFORE INCOME
TAXES |
|
(25,696 |
) |
(275,258 |
) |
(85,267 |
) |
(339,301 |
) |
|
|
|
|
|
|
|
|
|
|
Income tax benefit |
|
(4,704 |
) |
(15,635 |
) |
(7,259 |
) |
(31,875 |
) |
|
|
|
|
|
|
|
|
|
|
NET EARNINGS (LOSS) AND COMPREHENSIVE
INCOME (LOSS) |
|
$ |
(20,992 |
) |
$ |
(259,623 |
) |
$ |
(78,008 |
) |
$ |
(307,426 |
) |
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) allocated to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Managing member |
|
$ |
(378 |
) |
$ |
(4,677 |
) |
$ |
(1,405 |
) |
$ |
(5,573 |
) |
Common
unitholders |
|
$ |
(20,614 |
) |
$ |
(254,946 |
) |
$ |
(76,603 |
) |
$ |
(301,853 |
) |
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per unit allocated to common unitholders - basic and
diluted |
|
$ |
(0.54 |
) |
$ |
(6.85 |
) |
$ |
(2.02 |
) |
$ |
(8.27 |
) |
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, |
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Earnings (Loss)
to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
|
$ |
(20,992 |
) |
$ |
(259,623 |
) |
$ |
(78,008 |
) |
$ |
(307,426 |
) |
Add /
(deduct): |
|
|
|
|
|
|
|
|
|
Interest expense |
|
13,265 |
|
13,182 |
|
38,971 |
|
38,229 |
|
Income
tax benefit |
|
(4,704 |
) |
(15,635 |
) |
(7,259 |
) |
(31,875 |
) |
Depreciation and amortization |
|
17,392 |
|
41,752 |
|
42,931 |
|
107,730 |
|
Non-cash
compensation |
|
560 |
|
444 |
|
1,273 |
|
1,687 |
|
Unrealized risk management losses (gains) |
|
693 |
|
(48,278 |
) |
11,405 |
|
(48,127 |
) |
Losses
(gains) on disposals of assets |
|
28 |
|
(70 |
) |
268 |
|
(64 |
) |
Impairment of goodwill |
|
- |
|
245,604 |
|
- |
|
245,604 |
|
Foreign
exchange losses |
|
197 |
|
344 |
|
332 |
|
32 |
|
Other expenses (income) |
|
7 |
|
(2 |
) |
(4 |
) |
(8 |
) |
Write-downs of inventory |
|
600 |
|
31,700 |
|
600 |
|
42,200 |
|
Adjusted EBITDA |
|
$ |
7,046 |
|
$ |
9,418 |
|
$ |
10,509 |
|
$ |
47,982 |
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
Fee-based
revenue: |
|
|
|
|
|
|
|
|
|
Long-term contract revenue |
|
$ |
8,754 |
|
$ |
13,373 |
|
$ |
27,327 |
|
$ |
67,956 |
|
Short-term contract revenue |
|
4,473 |
|
2,255 |
|
12,814 |
|
6,059 |
|
Total |
|
$ |
13,227 |
|
$ |
15,628 |
|
$ |
40,141 |
|
$ |
74,015 |
|
|
|
|
|
|
|
|
|
|
|
Proprietary optimization: |
|
|
|
|
|
|
|
|
|
Realized
optimization |
|
$ |
6,686 |
|
$ |
7,013 |
|
$ |
17,065 |
|
$ |
25,244 |
|
Unrealized risk management (losses) gains |
|
(693 |
) |
48,278 |
|
(11,405 |
) |
48,127 |
|
Write-downs of inventory |
|
(600 |
) |
(31,700 |
) |
(600 |
) |
(42,200 |
) |
Total |
|
$ |
5,393 |
|
$ |
23,591 |
|
$ |
5,060 |
|
$ |
31,171 |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures: |
|
|
|
|
|
|
|
|
|
Maintenance |
|
$ |
1,134 |
|
$ |
1,780 |
|
$ |
1,944 |
|
$ |
3,240 |
|
Expansion |
|
7 |
|
(123 |
) |
82 |
|
510 |
|
Total |
|
$ |
1,141 |
|
$ |
1,657 |
|
$ |
2,026 |
|
$ |
3,750 |
|
|
|
|
|
|
|
|
|
|
|
Operating data: |
|
|
|
|
|
|
|
|
|
Effective working gas capacity (Bcf) |
|
244.9 |
|
250.5 |
|
244.9 |
|
250.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
March 31, |
|
|
|
|
|
|
|
2015 |
|
2015 |
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
Selected Balance Sheet data |
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
6,049 |
|
$ |
11,699 |
|
|
|
|
|
Obligations under credit facilities |
|
$ |
161,251 |
|
$ |
193,500 |
|
|
|
|
|
Total
debt excluding short-term credit facilities |
|
$ |
584,926 |
|
$ |
585,926 |
|
|
|
|
|
Members' equity |
|
$ |
105,582 |
|
$ |
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#1983589
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