All financial figures are in Canadian dollars unless noted otherwise
CALGARY, Nov. 7, 2011 /CNW/ - Gibson Energy Inc. ("Gibson" or the
"Company"), TSX: GEI, announced today its financial and operating
results for the third quarter of 2011.
Segment profit1 increased by 53% to $67.3 million in the three months ended September
30, 2011 from $44.1 million in the three months ended September 30,
2010, and by 68% to $182.0 million in the nine months ended September
30, 2011 from $108.5 million in the nine months ended September 30,
2010, with increases across most of the Company's operating segments.
The key segment highlights for the three months ended September 30,
2011 versus the same period in 2010 were:
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A significant increase in Terminals and Pipelines segment profit largely
as a result of increased activity through the Hardisty Terminal and
higher profit being generated from the Company's custom terminal
operations due to wider price differentials between crude oil types;
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An increase in Truck Transportation segment profit as a result of an
increase in volumes and revenues, offset by slightly higher operating
expenses;
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A decrease in Propane and NGL Marketing and Distribution segment profit
as a result of lower NGL marketing margins and an increase in operating
costs, offset by higher propane margins;
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A sizeable increase in Processing and Wellsite Fluids segment profit as
a result of higher volumes and margins for all products; and
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Higher marketing segment margins which were positively impacted by wider
pricing differentials between crude oil types, which are generally
beneficial for segment profitability.
Adjusted EBITDA2 increased by 52% to $64.9 million in the third quarter of 2011 compared
to $42.8 million in the third quarter of 2010. Adjusted EBITDA in the
nine months ended September 30, 2011 increased by 71% to $163.9 million
compared to $95.9 million in the nine months ended September 30, 2010.
Pro Forma Adjusted EBITDA3 for the twelve months ended September 30, 2011 was $220.6 million.
Cash provided by operations in the three and nine months ended
September 30, 2011 was $84.3 million and $171.4 million, respectively,
compared to $44.8 million and $88.5 million in the three and nine
months ended September 30, 2010, respectively.
"I am very pleased with our financial and operating results as we
continue to execute our growth strategy" said Stew Hanlon, President
and Chief Executive Officer. "Our integrated oil levered assets are
structured to provide diversified cash flow and stability through
various commodity cycles. This was particularly evident in the third
quarter as we generated significant profit in a period where WTI crude
prices experienced considerable volatility and showed a downward
trend."
(1)
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Segment profit is defined as revenue minus (i) cost of sales; and (ii)
operating costs. It excludes depreciation, amortization, impairment
charges, stock based compensation and corporate expenses.
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(2)
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Adjusted EBITDA is defined as consolidated net income (loss) before
interest expense, income taxes, depreciation, amortization, accretion,
other non-cash expenses and charges deducted in determining
consolidated net income (loss), including movement in the unrealized
gains and losses on the Company's financial instruments, stock based
compensation expense, impairment of goodwill and intangible assets, and
non-cash inventory write-downs. It also takes into account the impact
of foreign exchange movements in the Company's U.S. dollar denominated
long-term debt, management fees, debt extinguishment costs and other
adjustments that are considered non-recurring in nature.
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(3)
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Pro Forma Adjusted EBITDA differs from Adjusted EBITDA in that it also
includes the pro forma effect of acquisitions that took place in each
fiscal year as if the acquisitions took place at the beginning of the
fiscal year in which such acquisitions occurred.
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Corporate Highlights for the Three and Nine Months Ended September 30,
2011:
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During the three months ended September 30, 2011, the Company completed
and commissioned the Enbridge Line 4 and Cold Lake pipeline connections
at the Company's Hardisty Terminal;
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During the three months ended September 30, 2011, the Company entered
into a long-term service agreement with a major customer providing the
customer with the use of a storage tank at its Hardisty Terminal. As a
result, all four tanks acquired as part of the Company's acquisition of
the remaining 75% interest in Battle River Terminal ULC on August 25,
2010 have been leased out to customers on a long term basis with each
agreement providing for fixed monthly fees plus additional usage fees
based on monthly volume throughput;
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In the three months ended September 30, 2011, the Company declared a
dividend of $0.28 per common share for a total dividend of $26.2
million, of which $9.0 million was paid in cash on October 21, 2011
with the remainder of the dividend being settled with the issuance of
common shares to shareholders participating in the dividend
reinvestment plan ; and
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In the nine months ended September 30, 2011, capital expenditures were
$106.3 million of which $77.3 million related to internal growth
projects. Internal growth project expenditures include the construction
of tankage and pipeline connections at the Company's terminals and the
expansion of the Truck Transportation and Canwest fleets.
On October 17, 2011, subsequent to quarter end, the Company announced an
expansion of its water strategy in western Canada. "The acquisition of
the remaining shares of Palko Environmental Ltd, combined with our
recent investment in the Plato pipeline and planned developments at our
Rimbey custom terminal, has provided a strong platform for Gibson to be
a significant player in the emulsion treating, water disposal and
oilfield waste management space. Over time, we expect to expand these
same services across emerging oil plays in North America." said Mr.
Hanlon.
2011 Third Quarter Conference Call
A conference call to discuss Gibson's third quarter results will be held
at 7:00 a.m. MT (9:00 a.m. ET) on Tuesday, November 8, 2011 for
interested investors, analysts and media representatives.
The conference call dial-in numbers are:
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1-866-696-5910 from Canada and the US;
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416-340-2217 from Toronto and International;
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Participant Pass Code: 6600386.
Shortly after the call, an audio archive will be posted on the Investor
Relations and Media section at http://www.gibsons.com.
The call will also be recorded for playback 60 minutes after the meeting
end time, until May 8, 2012, using the following dial in process:
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905-694-9451 / 800-408-3053;
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Pass code: 6174170.
MD&A, Financial Statements & Notes
The Management's Discussion and Analysis and the condensed Consolidated
Financial Statements provide a detailed explanation of Gibson's
operating results for the three and nine months ended September 30,
2011 as compared to the three and nine months ended September 30,
2010. These documents are available at www.gibsons.com and at www.sedar.com.
Forward-Looking Statements
Certain statements contained in this news release constitute
forward-looking statements. These statements relate to future events or
the Company's future performance. All statements other than statements
of historical fact are forward-looking statements. The use of any of
the words ''anticipate'', ''plan'', ''contemplate'', ''continue'',
''estimate'', ''expect'', ''intend'', ''propose'', ''might'', ''may'',
''will'', ''shall'', ''project'', ''should'', ''could'', ''would'',
''believe'', ''predict'', ''forecast'', ''pursue'', ''potential'' and
''capable'' and similar expressions are intended to identify
forward-looking statements. These statements involve known and unknown
risks, uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements. No assurance can be given that these
expectations will prove to be correct and such forward-looking
statements included in this news release should not be unduly relied
upon. These statements speak only as of the date of this news release.
In addition, this news release may contain forward-looking statements
and forward-looking information attributed to third party industry
sources. The Company does not undertake any obligations to publicly
update or revise any forward looking statements except as required by
securities law. Actual results could differ materially from those
anticipated in these forward-looking statements as a result of numerous
risks and uncertainties including, but not limited to, the risks and
uncertainties described in "Forward-Looking Statements" and "Risk
Factors" included in the Company's Supplemented Prep Prospectus dated
June 7, 2011 as filed on SEDAR and available on the Gibson website at www.gibsons.com.
This news release refers to certain financial measures that are not
determined in accordance with Canadian generally accepted accounting
principles ("Canadian GAAP"). Adjusted EBITDA and Pro Forma Adjusted
EBITDA are not measures recognized under International Financial
Reporting Standards ("IFRS") or Canadian GAAP and do not have
standardized meanings prescribed by IFRS or Canadian GAAP. Management
considers these to be important supplemental measures of the Company's
performance and believes these measures are frequently used by
securities analysts, investors and other interested parties in the
evaluation of companies in its industries with similar capital
structures. See ''Summary of Quarterly Results" in the Company's MD&A
for a reconciliation of EBITDA to net income (loss), the IFRS and
Canadian GAAP measure most directly comparable to EBITDA, and for a
reconciliation of Adjusted EBITDA and Pro Forma Adjusted EBITDA to
EBITDA. Investors are encouraged to evaluate each adjustment and the
reasons the Company considers it appropriate for supplemental analysis.
Investors are cautioned, however, that these measures should not be
construed as an alternative to net income (loss) determined in
accordance with IFRS or Canadian GAAP as an indication of the Company's
performance.
Third Quarter - Selected Financial Highlights
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Three months ended
September 30,
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Nine months ended
September 30,
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2011
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2010
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2011
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2010
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(in thousands)
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Segment Profit:
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Terminals and Pipelines
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$15,961
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$10,590
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$49,772
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$26,433
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Truck Transportation
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19,545
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17,900
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48,958
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38,904
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Propane and NGL Marketing and Distribution
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3,645
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4,919
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25,853
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22,186
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Processing and Wellsite Fluids
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22,393
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14,242
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37,298
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23,958
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Marketing
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5,795
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(3,599)
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20,122
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(3,011)
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Total Segment Profit
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67,339
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44,052
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182,003
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108,470
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Statement of Cash Flows Data:
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Cash flows provided by (used in):
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Operating Activities
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$84,302
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$44,844
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$171,405
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$88,496
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Investing Activities
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(42,790)
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(74,617)
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(41,015)
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(269,964)
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Financing Activities
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(12,149)
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18,403
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(30,918)
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179,826
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Other Financial Data:
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Capital Expenditures:
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Internal Growth Projects
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$39,916
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$6,172
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$77,334
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$20,278
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Upgrade and Replacement Capital
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7,367
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14,642
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28,984
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23,040
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Acquisitions
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54,849
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233,395
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Adjusted EBITDA
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$64,852
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$42,769
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$163,938
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$95,882
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Twelve
months ended
September
30, 2011
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Pro Forma Adjusted EBITDA
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$220,626
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