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Niska Gas Storage Partners LLC Announces Results for the Third Quarter ended December 31, 2010


February 8, 2011 - HOUSTON, TX

Niska Gas Storage Partners LLC ("Niska") (NYSE: NKA) reported today Adjusted EBITDA (as defined below) for its thirdquarter ended December 31, 2010 of $59.9 million, compared to $86.6 millionfor the third quarter of fiscal 2010. Adjusted EBITDA for the nine monthsended December 31, 2010 was $134.4 million, compared to $145.0 million inthe same period last year. Cash Available for Distribution (as definedbelow) was $41.3 million for the three months and $73.1 million for thenine months ended December 31, 2010, respectively. Net earnings forNiska's third quarter reflected a loss of $2.4 million in fiscal 2011compared to net earnings of $48.1 million in fiscal 2010. Nine month netearnings for fiscal 2011 were $29.6 million, compared to $3.2 million infiscal 2010.

"Our results for the third quarter reflect a weaker storage market comparedto an exceptionally strong third quarter in fiscal 2010." said David Pope,President and CEO of Niska. "However, our baseload contracting,complemented by optimization strategies and low-cost organic growth, haveallowed us to achieve solid results in line with our expectations. Wereaffirm our previous Adjusted EBITDA guidance range of $190 - $205 millionand our Cash Available for Distribution guidance range of $110 - $125million for fiscal 2011. This reflects our continued confidence in ourability to deliver consistent financial results in a variety of economicenvironments."

During the quarter, Niska received approval from the California PublicUtilities Commission to expand the working gas capacity of its Wild Goosefacility in California from 29 billion cubic feet ("Bcf") to 50 Bcf.Following the approval, further performance testing was conducted on theWild Goose reservoir as part of the facility expansion and, as expected,Niska was able to add an incremental 6 Bcf of working gas capacity. Withthis expansion, the Wild Goose facility now has total working gas capacityof 35 Bcf. The remaining 15 Bcf of capacity at Wild Goose is expected to beavailable within the next year. Niska has now added a total of 19 Bcf ofgas storage capacity in fiscal 2011, exceeding its previous target of 15Bcf.

As announced on January 26, 2011, Niska will pay a cash distribution of$0.35 per unit on February 11, 2011 to unitholders of record at the closeof business on February 7, 2011.

Earnings Call

Niska will host a conference call with members of executive management onWednesday, February 9, 2011, at 10:00 a.m. Eastern Time. Interested partiesmay access the call via our website at www.niskapartners.com. A webcast isalso available on the Thomson Reuters Street Events network atwww.earnings.com.

If you are unable to participate in the webcast, you may access the liveconference call by dialing the following numbers:

North America: 1-866-203-2528

International: 1-617-213-8847

Access Code: 62391847

A telephonic replay can be accessed until midnight, February 16, 2011 atthe following numbers:

North America: 1-888-286-8010

International: 1-617-801-6888

Access Code: 34932447

In addition, an electronic replay and PDF transcript will be available onthe Niska website in the Investor Center section under the Presentationsand Webcasts tab.

About Niska

Niska is the largest independent owner and operator of natural gas storagein North America, with strategically located assets in key natural gasproducing and consuming regions. Niska owns and operates three facilities,including the AECO Hub™ in Alberta, Canada; Wild Goose in California;and Salt Plains in Oklahoma. Niska also contracts gas storage capacity onthe Natural Gas Pipeline Company of America system. In total, Niska owns orcontracts approximately 204.5 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 statementsare based on current expectations and include any statement that does notdirectly relate to a current or historical fact. In this context,forward-looking statements often address our expected future business andfinancial performance, and often contain words such as "anticipate,""believe," "intend," "expect," "plan," "will" or other similar words. Theseforward-looking statements involve certain risks and uncertainties thatultimately may not prove to be accurate. Actual results and future eventscould differ materially from those anticipated in such statements. Forfurther discussion of risks and uncertainties, you should refer to Niska'sSEC filings. Niska undertakes no obligation and does not intend to updatethese forward-looking statements to reflect events or circumstancesoccurring after this press release. You are cautioned not to place unduereliance on these forward-looking statements, which speak only as of thedate of this press release. All forward-looking statements are qualified intheir entirety by this cautionary statement.

*****

Non-GAAP Financial Measures

Niska uses and discloses the financial measures "Adjusted EBITDA" and "CashAvailable for Distribution" in this press release. Niska defines AdjustedEBITDA as net earnings before interest, income taxes, depreciation andamortization, unrealized risk management gains and losses, foreign exchangegains and losses, unrealized inventory impairment write-downs, gains andlosses on asset dispositions, asset impairments and other income. Niskadefines Cash Available for Distribution as Adjusted EBITDA reduced byinterest expense (excluding amortization of deferred financing costs andthe effects of unrealized gains or losses on interest rate swaps), incometaxes paid and maintenance capital expenditures. Niska's Adjusted EBITDAand Cash Available for Distribution are not presentations made inaccordance with Generally Accepted Accounting Principles in the UnitedStates ("GAAP"). Niska's management utilizes Adjusted EBITDA and CashAvailable for Distribution as key performance measures in order to assess:


-- The financial performance of our assets, operations and return on
capital without regard to financing methods, capital structure or
historical cost basis;
-- The ability of our assets to generate cash sufficient to pay interest
on our indebtedness and make distributions to our 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 CashAvailable for Distribution is net earnings. For a reconciliation ofAdjusted EBITDA to net earnings, please see the schedule provided in theattached pages.

 NISKA GAS STORAGE PARTNERS LLC CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) (in thousands of U.S. dollars) (unaudited) Three Months Ended Nine Months Ended December 31, December 31, ------------------------ ------------------------ 2010 2009 2010 2009 ----------- ----------- ----------- ----------- (Niska (Niska Predecessor) Predecessor)REVENUES Long-term contract $ 30,298 $ 28,283 $ 88,316 $ 81,799 Short-term contract 11,101 15,029 28,877 39,939 Optimization, net 4,188 67,895 47,874 27,939 ----------- ----------- ----------- ----------- Total revenue 45,587 111,207 165,067 149,677 ----------- ----------- ----------- ----------- EXPENSES (INCOME) Operating 11,133 10,199 32,404 28,388 General and administrative 8,692 11,208 23,964 21,532 Depreciation and amortization 13,011 12,101 36,348 32,891 Interest 19,434 6,704 57,601 20,140 Foreign exchange (gains) losses (796) 3,578 (765) (8,222) Other income (12) (9) (35) (88) ----------- ----------- ----------- ----------- 51,462 43,781 149,517 94,641 ----------- ----------- ----------- ----------- EARNINGS (LOSS) BEFORE INCOME TAXES (5,875) 67,426 15,550 55,036 Income tax (benefit) expense (3,461) 19,279 (14,008) 51,848 NET EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) $ (2,414) $ 48,147 $ 29,558 $ 3,188 =========== ===========Less:Net earnings prior to initial public offering on May 17, 2010 N/A 36,234 N/ANet earnings (loss) subsequent to initial public offering on ----------- ----------- May 17, 2010 $ (2,414) $ (6,676) N/A =========== =========== Net earnings (loss) subsequent to initial public offering allocated to:Managing member $ (48) N/A $ 344 N/A =========== ===========Common unitholders $ (1,183) N/A $ (3,510) N/A =========== ===========Subordinated unitholder $ (1,183) N/A $ (3,510) N/A =========== =========== Earnings (loss) per unit allocated to common unitholders - basic and diluted $ (0.03) N/A $ (0.10) N/A =========== =========== Earnings (loss) per unit allocated to subordinated unitholders - basic and diluted $ (0.03) N/A $ (0.10) N/A =========== =========== 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, ------------------------ ------------------------ 2010 2009 2010 2009 ----------- ----------- ----------- ----------- (Niska (Niska Predecessor) Predecessor)Reconciliation of Net Earnings (Loss) to Adjusted EBITDA and Cash Available for Distribution: Net earnings (loss) $ (2,414) $ 48,147 $ 29,558 $ 3,188Add (deduct): Interest expense 19,434 6,704 57,601 20,140 Income tax (benefit) expense (3,461) 19,279 (14,008) 51,848 Depreciation and amortization 13,011 12,101 36,348 32,891 Unrealized risk management losses (gains) 34,108 (3,198) 25,659 45,250 Foreign exchange (gains) losses (796) 3,578 (765) (8,222) Other income (12) (9) (35) (88) ----------- ----------- ----------- -----------Adjusted EBITDA $ 59,870 $ 86,602 $ 134,358 $ 145,007Less: Cash interest expense, net 18,408 13,110 54,503 18,916 Income taxes paid - (328) 287 212 Maintenance capital expenditures 144 680 868 838 Other income (12) (9) (35) (88) ----------- ----------- ----------- -----------Cash available for distribution $ 41,330 $ 73,149 $ 78,735 $ 125,129 =========== =========== =========== =========== Revenue:Long-term contract 30,298 28,283 88,316 81,799Short-term contract 11,101 15,029 28,877 39,939Proprietary optimization: Realized optimization 38,296 64,697 73,532 73,189 Unrealized risk management gains (losses) (34,108) 3,198 (25,659) (45,250) ----------- ----------- ----------- ----------- Total $ 45,587 $ 111,207 $ 165,067 $ 149,677 =========== =========== =========== =========== Total realized revenues $ 79,695 $ 108,009 $ 190,725 $ 194,927 =========== =========== =========== =========== Capital expenditures:Maintenance $ 144 $ 680 $ 868 $ 838Expansion and cost reduction 8,866 21,787 23,302 53,094 ----------- ----------- ----------- ----------- Total $ 9,011 $ 22,467 $ 24,170 $ 53,932 =========== =========== =========== =========== Operating data:Effective working gas capacity (Bcf) 204.5 185.5 204.5 185.5 Selected Balance Sheet December 31, March 31, data 2010 2010 ----------- ----------- (unaudited) (Niska Predecessor)Cash and cash equivalents $ 33,386 $ 131,559 =========== ===========Borrowings under revolving credit facility $ - $ - =========== ===========Total debt excluding revolving credit facility $ 800,000 $ 800,000 =========== ===========Partners' equity $ 914,979 $ 929,786 =========== ===========

Contact
Niska Gas Storage Partners LLC
Investor Relations:
Brandon Tran or Vance Powers
(403) 513-8600

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