Current Report Filing (8-k)
November 05 2015 - 5:10AM
Edgar (US Regulatory)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 5, 2015
Niska Gas Storage Partners LLC
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization) |
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001-34733 (Commission File Number) |
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27-1855740 (IRS Employer Identification No.) |
170 Radnor Chester Road, Suite 150
Radnor, PA 19087
(Address of principal executive office) (Zip Code)
(484) 367-7432
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On November 5, 2015, Niska Gas Storage Partners LLC (the Company) issued a news release announcing its financial results for its fiscal second quarter ended September 30, 2015. A copy of the press release is furnished and attached as Exhibit 99.1 hereto and is incorporated herein by reference. The information in Exhibit 99.1 is being furnished pursuant to this Item 2.02.
In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 2.02 and in Exhibit 99.1 shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, unless Niska Gas Storage Partners LLC specifically states that the information is to be considered filed under the Exchange Act or incorporates it by reference into a filing under the Exchange Act or the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 |
Press Release of Niska Gas Storage Partners LLC dated November 5, 2015 |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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NISKA GAS STORAGE PARTNERS LLC |
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Dated: November 5, 2015 |
By: |
/s/ Jason A. Dubchak |
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Name: |
Jason A. Dubchak |
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Title: |
Vice President, General Counsel and |
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Corporate Secretary |
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EXHIBIT INDEX
Exhibit No. |
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Exhibit |
99.1 |
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Press Release of Niska Gas Storage Partners LLC dated November 5, 2015 |
4
Exhibit 99.1
Niska Gas Storage Partners LLC Announces Second Quarter Results for Fiscal 2016
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
Niskas 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. Niskas 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, Niskas largest volumetric customer.
Niskas 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 Niskas 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 Companys 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 Companys 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 Companys current Form 10-Q can be found on Niskas 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 Niskas 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. Niskas Adjusted EBITDA and Cash Available for Distribution are not presentations made in accordance with Generally Accepted Accounting Principles in the United States (GAAP). Niskas management utilizes Adjusted EBITDA and Cash Available for Distribution as key performance measures in order to assess:
· the financial performance of Niskas assets, operations and return on capital without regard to financing methods, capital structure or historical cost basis;
· the ability of Niskas 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 Niskas management. Further, Niska believes that these measures are useful to investors because they are one of the bases for comparing Niskas operating performance with that of other companies with similar operations, although Niskas 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)
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Three Months Ended |
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Six Months Ended |
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September 30, |
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September 30, |
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2015 |
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2014 |
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2015 |
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2014 |
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REVENUES |
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Fee-based revenue |
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$ |
12,652 |
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$ |
15,633 |
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$ |
26,914 |
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$ |
58,387 |
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Optimization, net |
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4,684 |
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(5,043 |
) |
(333 |
) |
7,580 |
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17,336 |
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10,590 |
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26,581 |
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65,967 |
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EXPENSES (INCOME) |
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Operating |
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8,626 |
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12,062 |
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16,583 |
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23,015 |
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General and administrative |
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6,730 |
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6,205 |
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17,960 |
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16,279 |
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Depreciation and amortization |
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14,805 |
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16,012 |
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25,539 |
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65,978 |
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Interest |
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12,965 |
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12,735 |
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25,706 |
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25,047 |
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Loss on disposal of assets |
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240 |
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20 |
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240 |
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6 |
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Foreign exchange losses (gains) |
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79 |
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(262 |
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135 |
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(312 |
) |
Other income |
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(6 |
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(2 |
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(11 |
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(3 |
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43,439 |
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46,770 |
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86,152 |
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130,010 |
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EARNINGS (LOSS) BEFORE INCOME TAXES |
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(26,103 |
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(36,180 |
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(59,571 |
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(64,043 |
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Income tax benefit |
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(6,494 |
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(7,348 |
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(2,555 |
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(16,240 |
) |
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NET EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) |
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$ |
(19,609 |
) |
$ |
(28,832 |
) |
$ |
(57,016 |
) |
$ |
(47,803 |
) |
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Net earnings (loss) allocated to: |
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Managing member |
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$ |
(353 |
) |
$ |
(538 |
) |
$ |
(1,027 |
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$ |
(896 |
) |
Common unitholders |
|
$ |
(19,256 |
) |
$ |
(28,294 |
) |
$ |
(55,989 |
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$ |
(46,907 |
) |
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Earnings (loss) per unit allocated to common unitholders - basic and diluted |
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$ |
(0.51 |
) |
$ |
(0.78 |
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$ |
(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)
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Three Months Ended |
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Six Months Ended |
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September 30, |
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September 30, |
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2015 |
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2014 |
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2015 |
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2014 |
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Reconciliation of Net Earnings (Loss) to Adjusted EBITDA and Cash Available for Distribution: |
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Net earnings (loss) |
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$ |
(19,609 |
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$ |
(28,832 |
) |
$ |
(57,016 |
) |
$ |
(47,803 |
) |
Add / (deduct): |
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Interest expense |
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12,965 |
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12,735 |
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25,706 |
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25,047 |
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Income tax benefit |
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(6,494 |
) |
(7,348 |
) |
(2,555 |
) |
(16,240 |
) |
Depreciation and amortization |
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14,805 |
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16,012 |
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25,539 |
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65,978 |
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Non-cash compensation |
|
130 |
|
993 |
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713 |
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1,243 |
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Unrealized risk management losses (gains) |
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381 |
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(999 |
) |
10,712 |
|
151 |
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Loss on disposal of assets |
|
240 |
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20 |
|
240 |
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6 |
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Foreign exchange losses (gains) |
|
79 |
|
(262 |
) |
135 |
|
(312 |
) |
Other income |
|
(6 |
) |
(2 |
) |
(11 |
) |
(3 |
) |
Write-down of inventory |
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10,500 |
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|
10,500 |
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Adjusted EBITDA |
|
2,491 |
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2,817 |
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3,463 |
|
38,567 |
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Less: |
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Cash interest expense, net |
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12,007 |
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11,822 |
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23,834 |
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23,222 |
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Income taxes paid |
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|
|
288 |
|
251 |
|
288 |
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Maintenance capital expenditures |
|
655 |
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1,061 |
|
810 |
|
1,460 |
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Other income |
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(6 |
) |
(2 |
) |
(11 |
) |
(3 |
) |
Cash available for distribution |
|
$ |
(10,165 |
) |
$ |
(10,352 |
) |
$ |
(21,421 |
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$ |
13,600 |
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Revenue: |
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Fee-based revenue: |
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Long-term contract revenue |
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$ |
8,928 |
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$ |
14,101 |
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$ |
18,573 |
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$ |
54,584 |
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Short-term contract revenue |
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3,724 |
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1,532 |
|
8,341 |
|
3,803 |
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Total |
|
$ |
12,652 |
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$ |
15,633 |
|
$ |
26,914 |
|
$ |
58,387 |
|
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|
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Proprietary optimization: |
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|
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Realized optimization |
|
$ |
5,065 |
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$ |
4,458 |
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$ |
10,379 |
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$ |
18,231 |
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Unrealized risk management (losses) gains |
|
(381 |
) |
999 |
|
(10,712 |
) |
(151 |
) |
Write-down of inventory |
|
|
|
(10,500 |
) |
|
|
(10,500 |
) |
Total |
|
$ |
4,684 |
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$ |
(5,043 |
) |
$ |
(333 |
) |
$ |
7,580 |
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Capital expenditures: |
|
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|
|
|
|
|
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Maintenance |
|
$ |
655 |
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$ |
1,061 |
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$ |
810 |
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$ |
1,460 |
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Expansion |
|
18 |
|
55 |
|
75 |
|
633 |
|
Total |
|
$ |
673 |
|
$ |
1,116 |
|
$ |
885 |
|
$ |
2,093 |
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Operating data: |
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Effective working gas capacity (Bcf) |
|
244.9 |
|
250.5 |
|
244.9 |
|
250.5 |
|
Selected Balance Sheet data
|
|
September 30, |
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March 31, |
|
|
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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 |
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Members equity |
|
$ |
126,014 |
|
$ |
185,671 |
|
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