Full-Year 2016 Highlights:
- Coal sales of $866.6 million on sales
volumes of 19.3 million tons;
- Net loss attributable to limited
partner units of approximately $178.8 million or $(1.37) per
unit;
- Adjusted EBITDA of approximately $308.8
million;
- $103.7 million of unrestricted cash and
cash equivalents on hand as of December 31, 2016;
- Commencing a process to refinance or
extend all or a portion of its existing indebtedness with the net
proceeds from a combination of debt, equity financing and/or cash
on hand; and
- Working with Goldman, Sachs & Co.
in connection with the refinancing process.
Foresight Energy LP (NYSE:FELP) today reported
preliminary unaudited financial and operating results for fourth
quarter and full-year 2016. Sales volumes of 5.2 million tons
during fourth quarter 2016 generated coal sales revenue of $251.0
million contributing to a net loss attributable to limited partner
units of approximately $85.0 million or $(0.65) per unit (compared
to a net loss of $64.4 million in the fourth quarter of 2015) and
Adjusted EBITDA of approximately $98.0 million (compared to $42.3
million in the fourth quarter of 2015). As of December 31, 2016,
Foresight Energy LP and its subsidiaries had $103.7 million of
unrestricted cash and cash equivalents on hand and $1.4 billion of
total debt, including $352.5 million drawn on its revolving credit
facility (which has total commitments of $450.0 million and
outstanding letters of credit of $7.0 million).
Full-year sales volumes of 19.3 million tons generated coal
sales revenue of $866.6 million contributing to a net loss
attributable to limited partner units of approximately $178.8
million or $(1.37) per unit (compared to a net loss of $39.5
million for the full-year 2015). The net loss for the full-year
2016 was largely driven by an impairment charge of $74.6 million,
debt restructuring and early extinguishment costs of $35.0 million
and charges of $40.9 million for the change in fair value of
commodity derivative contracts and outstanding warrants. Adjusted
EBITDA for the full-year 2016 was approximately $308.8 million
(compared to $338.4 million for the full-year 2015), which included
$30.5 million of insurance recoveries related to the combustion
event at our Hillsboro operation ($10.5 million for the
reimbursement of mitigation costs that were recorded as a reduction
in Adjusted EBITDA in prior periods and $20.0 million related to
business interruption proceeds).
These fourth quarter and fiscal year 2016 results are derived
from preliminary internal financial reports and are subject to
revision based on the completion of Foresight’s year-end accounting
and financial reporting processes. Accordingly, actual results may
differ from these results and such difference may be material.
The preliminary unaudited financial data for fourth quarter and
fiscal year 2016 included herein have been prepared by, and are the
responsibility of, our management and have not been reviewed or
audited or subject to any other procedures by our independent
registered public accounting firm. Our independent registered
public accounting firm does not express an opinion or any other
form of assurance with respect to the preliminary unaudited
financial data. Therefore, you should not place undue reliance on
these results.
In light of the positive business momentum reflected in the
preliminary financial results for the fourth quarter and full-year
2016, the Partnership also announced that it has commenced a
process to refinance and extend the maturities of all or a portion
of its existing indebtedness with the net proceeds from a
combination of debt, equity financing and/or cash on hand. The
Partnership is working with Goldman, Sachs & Co. in connection
therewith.
There can be no assurance regarding the results of the
Partnership’s refinancing and maturity extension efforts. The
Partnership undertakes no obligation to make any further
announcements regarding a refinancing or maturity extension unless
and until final decisions are made.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities that may be offered
or issued in connection with the foregoing refinancing and maturity
extension efforts, nor shall there be any sale of any securities in
any jurisdiction in which such an offer, solicitation or sale would
be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
Numbers in this press release include some rounding and should
be read as approximations even though the word “approximately” is
not always used.
Forward-Looking Statements
This press release contains, and oral statements made from time
to time by representatives of the Partnership may contain,
“forward-looking” statements within the meaning of the federal
securities laws. Statements regarding our expected financial
results, our expectations regarding possible financing transactions
and other statements that contain words such as “possible,”
“intend,” “will,” “if” and “expect” are forward looking and can be
impacted by numerous factors, including risks relating to capital
markets conditions, the impact of adverse market conditions
affecting business of the Partnership, adverse changes in laws
including with respect to tax and regulatory matters and other
risks. There can be no assurance that actual results will not
differ from those expected by management of the Partnership.
Additional known material factors that could cause actual results
to differ from those in the forward-looking statements are
described in Part I, “Item 1A. Risk Factors” of the Partnership’s
Annual Report on Form 10-K filed on March 15, 2016 and Part II,
“Item 1A. Risk Factors” of the Partnership’s Quarterly Reports on
Form 10-Q. The Partnership undertakes no obligation to update or
revise such forward-looking statements to reflect events or
circumstances that occur, or which the Partnership becomes aware
of, after the date hereof.
Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP supplemental financial measure
that management and external users of the Partnership’s
consolidated financial statements, such as industry analysts,
investors, lenders and rating agencies, may use to assess:
- the Partnership’s operating performance
as compared to other publicly traded partnerships, without regard
to historical cost basis or, in the case of Adjusted EBITDA,
financing methods;
- the Partnership’s ability to incur and
service debt and fund capital expenditures; and
- the viability of acquisitions and other
capital expenditure projects and the returns on investment of
various expansion and growth opportunities.
The Partnership defines Adjusted EBITDA as net income (loss)
attributable to controlling interests before interest, income
taxes, depreciation, depletion, amortization and accretion.
Included in Adjusted EBITDA are insurance recoveries for the
reimbursement of mitigation costs and business interruption
proceeds related to the combustion event at our Hillsboro
operation. Adjusted EBITDA is also adjusted for equity-based
compensation, losses/gains on commodity derivative contracts,
settlements of derivative contracts, a change in the fair value of
the warrant liability and material nonrecurring or other items
which may not reflect the trend of future results. As it relates to
commodity derivative contracts, the Adjusted EBITDA calculation
removes the total impact of derivative gains/losses on net income
(loss) during the period and then add/deducts to Adjusted EBITDA
the amount of aggregate settlements during the period.
The Partnership believes the presentation of Adjusted EBITDA
provides useful information to investors in assessing the
Partnership’s financial condition and results of operations.
Adjusted EBITDA should not be considered an alternative to net
(loss) income, operating income, or any other measure of financial
performance presented in accordance with U.S. GAAP, nor should
Adjusted EBITDA be considered an alternative to operating surplus,
adjusted operating surplus or other definitions in the
Partnership’s partnership agreement. Adjusted EBITDA has important
limitations as an analytical tool because it excludes some, but not
all, of the items that affect net (loss) income. Additionally,
because Adjusted EBITDA may be defined differently by other
companies in the industry, and the Partnership’s definition of
Adjusted EBITDA may not be comparable to similarly titled measures
of other companies, the utility of such a measure is diminished.
For a reconciliation of Adjusted EBITDA to net loss attributable to
controlling interests, please see the table below.
Three Months
Ended
Year
Ended
Three
Months
Ended
December
December
December
December
September
31,
31,
31,
31,
30,
2016
2015
2016
2015
2016
Net loss attributable to controlling interests (1) $
(85,012)
$
(64,427) $ (178,789) $ (39,454) $ (24,286) Interest expense, net
43,932 30,720 149,201 117,311 37,939 Depreciation, depletion and
amortization 38,691 49,714 164,212 195,415 43,637 Accretion on
asset retirement obligations 844 566 3,376 2,267 844 Transition and
reorganization costs (excluding amounts included in equity-based
compensation) (2) - 1,076 2,574 17,111 - Equity-based compensation
395 3,456 5,106 13,704 284 Long-lived asset impairments 74,575
12,592 74,575 12,592 - Loss (gain) on commodity derivative
contracts 6,482 (4,680) 23,752 (45,691) 5,987 Settlements of
commodity derivative contracts (468) 9,358 12,644 61,223 3,191
Debt restructuring costs
119
3,930
21,821
3,930
6,072
Change in fair value of warrants
18,576
-
17,124
-
(1,452)
Loss on early extinguishment of debt
(90)
-
13,203
-
13,186
Adjusted EBITDA
$
98,044
$
42,305
$
308,799
$
338,408
$
85,402
(1)
Included in net loss attributable to
controlling interests are insurance recoveries for the
reimbursement of mitigation costs and business interruption
proceeds related to the combustion event at our Hillsboro
operation.
(2)
Equity-based compensation of $4.3 million
was recorded in transition and reorganization costs in the
consolidated statements of operations for the years ended December
31, 2016 and 2015.
About Foresight Energy LP
Foresight Energy LP is a leading producer and marketer of
thermal coal in the Illinois Basin. Foresight currently owns four
mining complexes (Williamson, Sugar Camp, Hillsboro and Macoupin),
with four longwall systems, and the Sitran river terminal on the
Ohio River. Foresight’s operations are strategically located near
multiple rail and river transportation access points, providing
transportation cost certainty and flexibility to direct shipments
to the domestic and international markets.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170213006163/en/
Foresight Energy LPGary M. Broadbent, 314-932-6152Senior
Corporate Counsel andDirector of Investor and Media
RelationsInvestor.relations@foresight.comMedia@coalsource.com
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