Market Newsdesk

May 3, 2021 4:19 pm

Williams Reports Strong First-Quarter Results and Record Volumes; Raises 2021 Guidance

Williams Reports Strong First-Quarter Results and Record Volumes; Raises 2021 Guidance

TULSA, Okla.–(BUSINESS WIRE)–
Williams (NYSE: WMB) today announced its unaudited financial results for the three months ended March 31, 2021.

Results exceed expectations across all key metrics

Net income of $425 million, or $0.35 per diluted share (EPS)
Adjusted EPS of $0.35 per diluted share – up 35% from 1Q 2020
Cash flow from operations (CFFO) of $915 million – up $128 million or 16% from 1Q 2020
Available funds from operations (AFFO) of $1.029 billion – up $109 million or 12% from 1Q 2020
Adjusted EBITDA of $1.415 billion – up $153 million or 12% from 1Q 2020; up 6% excluding favorable winter storm effects
Record gathering volumes of 13.6 Bcf/d; record contracted transmission capacity of 22.8 Bcf/d
Debt-to-Adjusted EBITDA at quarter end: 4.2x
Guidance midpoints for Adjusted EBITDA and AFFO increase by $100 million
Dividend coverage ratio is 2.07x (AFFO basis)

CEO Perspective

Alan Armstrong, president and chief executive officer, made the following comments:

“Our natural gas business strategy continues to deliver consistently strong cash flow with first-quarter Adjusted EBITDA up 12 percent from last year, driven in part by record gathering volumes particularly in the Northeast. Severe winter weather in February boosted marketing margins and upstream sales from unusually high prices, but even excluding these weather effects, our Adjusted EBITDA was up 6 percent, underscoring the stability of our earnings regardless of external factors.”

“We continued our pace of execution in the first quarter, placing Southeastern Trail into full service in early January and progressing on Transco’s Leidy South project to bring additional gas from Appalachia to growing demand centers along the Atlantic Seaboard by next winter. We also filed our FERC application for the Regional Energy Access pipeline expansion, a low-impact project being designed in a manner that is adaptable to future renewable energy sources like clean hydrogen and RNG blending.”

Armstrong added, “As one of the nation’s largest clean energy infrastructure providers, we have a huge opportunity to leverage our natural gas-focused business as the world moves to a low-carbon future, while helping customers and the United States meet climate goals. We believe clean, affordable and reliable natural gas is an important component of today’s fuel mix and should be prioritized as one of the most important tools to aggressively displace more carbon-intensive fuels around the world.”

Williams Summary Financial Information	1Q
Amounts in millions, except ratios and per-share amounts. Per share amounts are reported on a diluted basis. Net income amounts are from continuing operations attributable to The Williams Companies, Inc. available to common stockholders.	2021		2020

GAAP Measures
Net Income (Loss)	$425		($518)
Net Income (Loss) Per Share	$0.35		($0.43)
Cash Flow From Operations	$915		$787

Non-GAAP Measures (1)
Adjusted EBITDA	$1,415		$1,262
Adjusted Income	$429		$313
Adjusted Income Per Share	$0.35		$0.26
Available Funds from Operations	$1,029		$920
Dividend Coverage Ratio	2.07	x	1.90	x

Other
Debt-to-Adjusted EBITDA at Quarter End (2)	4.2	x	4.36	x
Capital Investments (3)	$277		$284

(1) Schedules reconciling Adjusted Income, Adjusted EBITDA, Available Funds from Operations and Dividend Coverage Ratio (non-GAAP measures) to the most comparable GAAP measure are available at www.williams.com and as an attachment to this news release.
(2) Does not represent leverage ratios measured for WMB credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies. Debt is net of cash on hand, and Adjusted EBITDA reflects the sum of the last four quarters.
(3) Capital Investments includes increases to property, plant, and equipment, purchases of businesses, net of cash acquired, and purchases of and contributions to equity-method investments.

GAAP Measures

First-quarter 2021 net income improved by $943 million over the prior year, reflecting $128 million of higher commodity margins in 2021 and $21 million from recently acquired upstream operations, while lower Haynesville gathering revenues were substantially offset by increased earnings from Northeast G&P equity-method investments. The improvement over last year also reflects the absence of $1.2 billion in pre-tax charges in 2020 related to impairments of equity-method investments, goodwill and goodwill at an equity investee, of which $65 million was attributable to noncontrolling interests. The provision for income taxes changed unfavorably by $345 million primarily due to higher pre-tax income.
The severe winter weather impact in February 2021 and the associated effect on commodity prices is estimated to have had a net favorable impact on our pre-tax results of approximately $77 million, primarily within our commodity margins and results from upstream operations.
Cash flow from operations for the first quarter of 2021 increased as compared to 2020 primarily due to the previously described commodity margin improvement in 2021.

Non-GAAP Measures

Adjusted EBITDA increased by $153 million over the prior year, driven by the previously described benefits from commodity margins and recently acquired upstream operations, while lower Haynesville gathering revenues were substantially offset by increased contributions from Northeast G&P equity-method investments. Even excluding the net favorable impact of the severe winter weather impact in February 2021, Adjusted EBITDA was higher than the prior year.
Adjusted Income improved by $116 million over the prior year driven by similar changes.
Available Funds From Operations increased by $109 million, largely reflecting the previously described improved commodity margins in 2021.

Business Segment Results & Form 10-Q

Williams’ operations are comprised of the following reportable segments: Transmission & Gulf of Mexico, Northeast G&P, West and Other. For more information, see the company’s first-quarter 2021 Form 10-Q.

	First Quarter
Amounts in millions	Modified EBITDA			Adjusted EBITDA
Amounts in millions	1Q 2021	1Q 2020	Change	1Q 2021	1Q 2020	Change
Transmission & Gulf of Mexico	$660	$662	($2)	$660	$669	($9)
Northeast G&P	402	369	33	402	370	32
West	315	215	100	315	216	99
Other	33	7	26	38	7	31
Totals	$1,410	$1,253	$157	$1,415	$1,262	$153

Note: Williams uses Modified EBITDA for its segment reporting. Definitions of Modified EBITDA and Adjusted EBITDA and schedules reconciling to net income are included in this news release.

Transmission & Gulf of Mexico

First-quarter 2021 Modified and Adjusted EBITDA decreased slightly compared to the prior year, as small increases in service revenues, commodity margins, and investee EBITDA were offset by higher operating and administrative costs. An increase in natural gas transmission service revenues related to recent expansion projects was partially offset by lower gathering volumes in the Gulf of Mexico.

Northeast G&P

First-quarter 2021 Modified and Adjusted EBITDA increased over the prior year driven by higher gathering volumes on our Bradford and Marcellus South systems, along with the benefit of an increased ownership in Blue Racer Midstream, acquired in November 2020.
Gross gathering volumes for first-quarter 2021, including 100% of operated equity-method investments, increased by 11% over the same period in 2020.

West

First-quarter 2021 Modified and Adjusted EBITDA increased over the prior year primarily due to an estimated $55 million net favorable impact from the February 2021 severe winter weather, $50 million of higher commodity marketing margins driven by higher prices and the absence of prior year inventory impacts, and lower operating and administrative costs. These favorable changes were partially offset by lower Haynesville gathering revenues from lower rates and volumes, as well as lower investee EBITDA driven by reduced transportation volumes on Overland Pass Pipeline.

Other

First-quarter 2021 Modified and Adjusted EBITDA includes $30 million from our recently acquired oil and gas producing properties. Of this amount, we estimate that approximately $22 million is attributable to the February 2021 severe winter weather.

2021 Financial Guidance

The company now expects 2021 Adjusted EBITDA between $5.2 billion and $5.4 billion and Available Funds from Operations between $3.7 billion and $3.9 billion, both a $100 million midpoint increase from guidance originally issued in February 2021. As well, the leverage ratio midpoint has been updated to ~4.2x versus ~4.25x prior for year-end 2021. The company is keeping intact 2021 growth capex guidance between $1 billion to $1.2 billion. Importantly, Williams expects to generate positive free cash flow (after capital expenditures and dividends), allowing it to retain financial flexibility.

Williams’ First-Quarter 2021 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow

Williams’ first-quarter 2021 earnings presentation will be posted at www.williams.com. The company’s first-quarter 2021 earnings conference call and webcast with analysts and investors is scheduled for Tuesday, May 4, at 9:30 a.m. Eastern Time (8:30 a.m. Central Time). Participants who wish to join the call by phone must register using the following link: http://www.directeventreg.com/registration/event/5942459

A webcast link to the conference call is available at www.williams.com. A replay of the webcast will be available on the website for at least 90 days following the event.

About Williams

Williams (NYSE: WMB) is committed to being the leader in providing infrastructure that safely delivers natural gas products to reliably fuel the clean energy economy. Headquartered in Tulsa, Oklahoma, Williams is an industry-leading, investment grade C-Corp with operations across the natural gas value chain including gathering, processing, interstate transportation and storage of natural gas and natural gas liquids. With major positions in top U.S. supply basins, Williams connects the best supplies with the growing demand for clean energy. Williams owns and operates more than 30,000 miles of pipelines system wide – including Transco, the nation’s largest volume and fastest growing pipeline – and handles approximately 30 percent of the natural gas in the United States that is used every day for clean-power generation, heating and industrial use. www.williams.com



The Williams Companies, Inc. Consolidated Statement of Operations (Unaudited)

	Three Months Ended March 31,
	2021			2020
	(Millions, except per-share amounts)
Revenues:
Service revenues	$	1,452		$	1,474
Service revenues – commodity consideration	49			28
Product sales	1,111			411
Total revenues	2,612			1,913
Costs and expenses:
Product costs	932			396
Processing commodity expenses	21			13
Operating and maintenance expenses	360			337
Depreciation and amortization expenses	438			429
Selling, general, and administrative expenses	123			113
Impairment of goodwill	—			187
Other (income) expense – net	(1		)	7
Total costs and expenses	1,873			1,482
Operating income (loss)	739			431
Equity earnings (losses)	131			22
Impairment of equity-method investments	—			(938		)
Other investing income (loss) – net	2			3
Interest incurred	(296		)	(301		)
Interest capitalized	2			5
Other income (expense) – net	(2		)	4
Income (loss) before income taxes	576			(774		)
Less: Provision (benefit) for income taxes	141			(204		)
Net income (loss)	435			(570		)
Less: Net income (loss) attributable to noncontrolling interests	9			(53		)
Net income (loss) attributable to The Williams Companies, Inc.	426			(517		)
Less: Preferred stock dividends	1			1
Net income (loss) available to common stockholders	$	425		$	(518	)
Basic earnings (loss) per common share:
Net income (loss)	$	.35		$	(.43	)
Weighted-average shares (thousands)	1,214,646			1,213,019
Diluted earnings (loss) per common share:
Net income (loss)	$	.35		$	(.43	)
Weighted-average shares (thousands)	1,217,211			1,213,019



The Williams Companies, Inc. Consolidated Balance Sheet (Unaudited)

	March 31, 2021			December 31, 2020
	(Millions, except per-share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	1,126		$	142
Trade accounts and other receivables	1,059			1,000
Allowance for doubtful accounts	(1		)	(1		)
Trade accounts and other receivables – net	1,058			999
Inventories	144			136
Other current assets and deferred charges	169			152
Total current assets	2,497			1,429
Investments	5,129			5,159
Property, plant, and equipment	42,970			42,489
Accumulated depreciation and amortization	(13,894		)	(13,560		)
Property, plant, and equipment – net	29,076			28,929
Intangible assets – net of accumulated amortization	7,362			7,444
Regulatory assets, deferred charges, and other	1,198			1,204
Total assets	$	45,262		$	44,165
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	538		$	482
Accrued liabilities	855			944
Long-term debt due within one year	2,142			893
Total current liabilities	3,535			2,319
Long-term debt	21,092			21,451
Deferred income tax liabilities	2,065			1,923
Regulatory liabilities, deferred income, and other	4,097			3,889
Contingent liabilities
Equity:
Stockholders’ equity:
Preferred stock	35			35
Common stock ($1 par value; 1,470 million shares authorized at March 31, 2021 and December 31, 2020; 1,249 million shares issued at March 31, 2021 and 1,248 million shares issued at December 31, 2020)	1,249			1,248
Capital in excess of par value	24,384			24,371
Retained deficit	(12,825		)	(12,748		)
Accumulated other comprehensive income (loss)	(100		)	(96		)
Treasury stock, at cost (35 million shares of common stock)	(1,041		)	(1,041		)
Total stockholders’ equity	11,702			11,769
Noncontrolling interests in consolidated subsidiaries	2,771			2,814
Total equity	14,473			14,583
Total liabilities and equity	$	45,262		$	44,165



The Williams Companies, Inc. Consolidated Statement of Cash Flows (Unaudited)

	Three Months Ended March 31,
	2021			2020
	(Millions)
OPERATING ACTIVITIES:
Net income (loss)	$	435		$	(570	)
Adjustments to reconcile to net cash provided (used) by operating activities:
Depreciation and amortization	438			429
Provision (benefit) for deferred income taxes	144			(177		)
Equity (earnings) losses	(131		)	(22		)
Distributions from unconsolidated affiliates	176			169
Impairment of goodwill	—			187
Impairment of equity-method investments	—			938
Amortization of stock-based awards	20			9
Cash provided (used) by changes in current assets and liabilities:
Accounts receivable	(59		)	67
Inventories	(8		)	19
Other current assets and deferred charges	(6		)	20
Accounts payable	38			(155		)
Accrued liabilities	(116		)	(150		)
Other, including changes in noncurrent assets and liabilities	(16		)	23
Net cash provided (used) by operating activities	915			787
FINANCING ACTIVITIES:
Proceeds from long-term debt	897			1,702
Payments of long-term debt	(5		)	(1,518		)
Proceeds from issuance of common stock	3			6
Common dividends paid	(498		)	(485		)
Dividends and distributions paid to noncontrolling interests	(54		)	(44		)
Contributions from noncontrolling interests	2			2
Payments for debt issuance costs	(6		)	—
Other – net	(13		)	(10		)
Net cash provided (used) by financing activities	326			(347		)
INVESTING ACTIVITIES:
Property, plant, and equipment:
Capital expenditures (1)	(260		)	(306		)
Dispositions – net	(1		)	(3		)
Contributions in aid of construction	19			14
Purchases of and contributions to equity-method investments	(14		)	(30		)
Other – net	(1		)	(4		)
Net cash provided (used) by investing activities	(257		)	(329		)
Increase (decrease) in cash and cash equivalents	984			111
Cash and cash equivalents at beginning of year	142			289
Cash and cash equivalents at end of period	$	1,126		$	400
_____________
(1) Increases to property, plant, and equipment	$	(263	)	$	(254	)
Changes in related accounts payable and accrued liabilities	3			(52		)
Capital expenditures	$	(260	)	$	(306	)



Transmission & Gulf of Mexico
(UNAUDITED)
	2020															2021
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr
Regulated interstate natural gas transportation, storage, and other revenues ⁽¹⁾	$	692		$	676		$	686		$	702		$	2,756		$	708
Gathering, processing, and transportation revenues	99			78			85			86			348			86
Other fee revenues ⁽¹⁾	4			5			3			6			18			4
Commodity margins	3			1			4			4			12			8
Operating and administrative costs ⁽¹⁾	(184		)	(189		)	(192		)	(192		)	(757		)	(198		)
Other segment income (expenses) – net	4			2			(8		)	8			6			5
Impairment of certain assets	—			—			—			(170		)	(170		)	—
Proportional Modified EBITDA of equity-method investments	44			42			38			42			166			47
Modified EBITDA	662			615			616			486			2,379			660
Adjustments	7			2			6			158			173			—
Adjusted EBITDA	$	669		$	617		$	622		$	644		$	2,552		$	660

Statistics for Operated Assets
Natural Gas Transmission
Transcontinental Gas Pipe Line
Avg. daily transportation volumes (Tbtu)	13.8			12.0			12.8			13.2			12.9			14.1
Avg. daily firm reserved capacity (Tbtu)	17.7			17.5			18.0			18.2			17.9			18.6
Northwest Pipeline LLC
Avg. daily transportation volumes (Tbtu)	2.6			1.9			1.8			2.5			2.2			2.8
Avg. daily firm reserved capacity (Tbtu)	3.0			3.0			3.0			2.9			3.0			2.9
Gulfstream – Non-consolidated
Avg. daily transportation volumes (Tbtu)	1.2			1.2			1.3			1.1			1.2			1.0
Avg. daily firm reserved capacity (Tbtu)	1.3			1.3			1.3			1.3			1.3			1.3
Gathering, Processing, and Crude Oil Transportation
Consolidated ⁽²⁾
Gathering volumes (Bcf/d)	0.30			0.23			0.23			0.26			0.25			0.28
Plant inlet natural gas volumes (Bcf/d)	0.58			0.50			0.40			0.46			0.48			0.46
NGL production (Mbbls/d)	32			25			27			30			29			29
NGL equity sales (Mbbls/d)	5			4			5			5			5			7
Crude oil transportation volumes (Mbbls/d)	138			92			121			132			121			130
Non-consolidated ⁽³⁾
Gathering volumes (Bcf/d)	0.35			0.31			0.26			0.30			0.30			0.36
Plant inlet natural gas volumes (Bcf/d)	0.35			0.31			0.25			0.30			0.30			0.37
NGL production (Mbbls/d)	24			23			17			21			21			28
NGL equity sales (Mbbls/d)	5			8			4			6			6			9

(1) Excludes certain amounts associated with revenues and operating costs for tracked or reimbursable charges.
(2) Excludes volumes associated with equity-method investments that are not consolidated in our results.
(3) Includes 100% of the volumes associated with operated equity-method investments.



Northeast G&P
(UNAUDITED)
	2020															2021
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr
Gathering, processing, transportation, and fractionation revenues	$	312		$	308		$	332		$	327		$	1,279		$	311
Other fee revenues ⁽¹⁾	25			25			22			24			96			25
Commodity margins	1			1			1			1			4			3
Operating and administrative costs ⁽¹⁾	(87		)	(86		)	(85		)	(84		)	(342		)	(89		)
Other segment income (expenses) – net	(2		)	(4		)	(4		)	1			(9		)	(1		)
Impairment of certain assets	—			—			—			(12		)	(12		)	—
Proportional Modified EBITDA of equity-method investments	120			126			121			106			473			153
Modified EBITDA	369			370			387			363			1,489			402
Adjustments	1			(7		)	9			43			46			—
Adjusted EBITDA	$	370		$	363		$	396		$	406		$	1,535		$	402

Statistics for Operated Assets
Gathering and Processing
Consolidated ⁽²⁾
Gathering volumes (Bcf/d)	4.27			4.14			4.47			4.36			4.31			4.19
Plant inlet natural gas volumes (Bcf/d)	1.23			1.22			1.36			1.45			1.32			1.41
NGL production (Mbbls/d) ⁽⁴⁾	107			93			114			111			106			102
NGL equity sales (Mbbls/d)	2			2			2			2			2			1
Non-consolidated ⁽³⁾
Gathering volumes (Bcf/d)	4.40			4.68			4.94			5.11			4.78			5.40

(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges.
(2) Includes volumes associated with Susquehanna Supply Hub, the Northeast JV, and Utica Supply Hub, all of which are consolidated.
(3) Includes 100% of the volumes associated with operated equity-method investments, including the Laurel Mountain Midstream partnership; and the Bradford Supply Hub and a portion of the Marcellus South Supply Hub within the Appalachia Midstream Services partnership.
(4) 1st Qtr, 2nd Qtr, and Year columns for 2020 volumes have been updated to reflect current meter parameters used to measure NGL production.



West
(UNAUDITED)
	2020															2021
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr
Gathering, processing, transportation, storage, and fractionation revenues	$	299		$	297		$	288		$	320		$	1,204		$	262
Other fee revenues⁽¹⁾	6			13			16			15			50			6
Commodity margins	2			30			28			25			85			128
Operating and administrative costs ⁽¹⁾	(115		)	(111		)	(108		)	(105		)	(439		)	(106		)
Other segment income (expenses) – net	(5		)	—			(7		)	—			(12		)	—
Proportional Modified EBITDA of equity-method investments	28			24			30			28			110			25
Modified EBITDA	215			253			247			283			998			315
Adjustments	1			(1		)	(2		)	(6		)	(8		)	—
Adjusted EBITDA	$	216		$	252		$	245		$	277		$	990		$	315

Statistics for Operated Assets
Gathering and Processing
Consolidated ⁽²⁾
Gathering volumes (Bcf/d)	3.43			3.40			3.28			3.19			3.33			3.11
Plant inlet natural gas volumes (Bcf/d)	1.26			1.33			1.31			1.13			1.25			1.20
NGL production (Mbbls/d)	35			51			71			39			49			36
NGL equity sales (Mbbls/d)	12			25			34			18			22			13
Non-consolidated ⁽³⁾
Gathering volumes (Bcf/d)	0.20			0.24			0.28			0.30			0.25			0.27
Plant inlet natural gas volumes (Bcf/d)	0.20			0.23			0.28			0.29			0.25			0.27
NGL production (Mbbls/d)	17			23			26			26			23			24
NGL and Crude Oil Transportation volumes (Mbbls/d) ⁽⁴⁾	227			142			156			147			168			85

(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges.
(2) Excludes volumes associated with equity-method investments that are not consolidated in our results.
(3) Includes 100% of the volumes associated with operated equity-method investments, including Rocky Mountain Midstream.
(4) Includes 100% of the volumes associated with operated equity-method investments, including the Overland Pass Pipeline Company and Rocky Mountain Midstream.



Capital Expenditures and Investments
(UNAUDITED)
	2020												2021
(Dollars in millions)	1st Qtr		2nd Qtr			3rd Qtr			4th Qtr		Year		1st Qtr

Capital expenditures:
Transmission & Gulf of Mexico	$	185	$	181		$	192		$	190	$	748	$	109
Northeast G&P	46		41			32			38		157		40
West	72		80			93			65		310		33
Other	3		5			8			8		24		78
Total ⁽¹⁾	$	306	$	307		$	325		$	301	$	1,239	$	260

Purchases of and contributions to equity-method investments:
Transmission & Gulf of Mexico	$	1	$	1		$	34		$	1	$	37	$	3
Northeast G&P	27		30			47			174		278		11
West	2		5			3			—		10		—
Total	$	30	$	36		$	84		$	175	$	325	$	14

Summary:
Transmission & Gulf of Mexico	$	186	$	182		$	226		$	191	$	785	$	112
Northeast G&P	73		71			79			212		435		51
West	74		85			96			65		320		33
Other	3		5			8			8		24		78
Total	$	336	$	343		$	409		$	476	$	1,564	$	274

Capital investments:
Increases to property, plant, and equipment	$	254	$	327		$	331		$	248	$	1,160	$	263
Purchases of investments	30		36			84			175		325		14
Total	$	284	$	363		$	415		$	423	$	1,485	$	277

⁽¹⁾ Increases to property, plant, and equipment	$	254	$	327		$	331		$	248	$	1,160	$	263
Changes in related accounts payable and accrued liabilities	52		(20		)	(6		)	53		79		(3		)
Capital expenditures	$	306	$	307		$	325		$	301	$	1,239	$	260

Contributions from noncontrolling interests	$	2	$	2		$	1		$	2	$	7	$	2
Contributions in aid of construction	$	14	$	5		$	8		$	10	$	37	$	19

Non-GAAP Measures

This news release and accompanying materials may include certain financial measures – Adjusted EBITDA, adjusted income (“earnings”), adjusted earnings per share, available funds from operations and dividend coverage ratio – that are non-GAAP financial measures as defined under the rules of the SEC.

Our segment performance measure, Modified EBITDA, is defined as net income (loss) before income (loss) from discontinued operations, income tax expense, net interest expense, equity earnings from equity-method investments, other net investing income, impairments of equity investments and goodwill, depreciation and amortization expense, and accretion expense associated with asset retirement obligations for nonregulated operations. We also add our proportional ownership share (based on ownership interest) of Modified EBITDA of equity-method investments.

Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Such items are excluded from net income to determine adjusted income. Management believes these measure provide investors meaningful insight into results from ongoing operations.

Available funds from operations is defined as cash flow from operations excluding the effect of changes in working capital and certain other changes in noncurrent assets and liabilities, reduced by preferred dividends and net distributions to noncontrolling interests.

This news release is accompanied by a reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures. Management uses these financial measures because they are accepted financial indicators used by investors to compare company performance. In addition, management believes that these measures provide investors an enhanced perspective of the operating performance of assets and the cash that the business is generating.

Neither Adjusted EBITDA, adjusted income, nor available funds from operations are intended to represent cash flows for the period, nor are they presented as an alternative to net income or cash flow from operations. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.



Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income
(UNAUDITED)
	2020															2021
(Dollars in millions, except per-share amounts)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr

Income (loss) attributable to The Williams Companies, Inc. available to common stockholders	$	(518	)	$	303		$	308		$	115		$	208		$	425

Income (loss) – diluted earnings (loss) per common share ⁽¹⁾	$	(.43	)	$	.25		$	.25		$	.09		$	.17		$	.35
Adjustments:
Transmission & Gulf of Mexico
Northeast Supply Enhancement project development costs	$	—		$	3		$	3		$	—		$	6		$	—
Impairment of certain assets	—			—			—			170			170			—
Pension plan settlement charge	4			1			—			—			5			—
Adjustment of Transco’s regulatory asset for post-WPZ Merger state deferred income tax change consistent with filed rate case	2			—			—			—			2			—
Benefit of change in employee benefit policy	—			(3		)	(6		)	(13		)	(22		)	—
Reversal of costs capitalized in prior periods	—			—			10			1			11			—
Severance and related costs	1			1			(1		)	—			1			—
Total Transmission & Gulf of Mexico adjustments	7			2			6			158			173			—
Northeast G&P
Share of early debt retirement gain at equity-method investment	—			(5		)	—			—			(5		)	—
Share of impairment of certain assets at equity-method investments	—			—			11			36			47			—
Pension plan settlement charge	1			—			—			—			1			—
Impairment of certain assets	—			—			—			12			12			—
Benefit of change in employee benefit policy	—			(2		)	(2		)	(5		)	(9		)	—
Total Northeast G&P adjustments	1			(7		)	9			43			46			—
West
Pension plan settlement charge	1			—			—			—			1			—
Benefit of change in employee benefit policy	—			(1		)	(2		)	(6		)	(9		)	—
Total West adjustments	1			(1		)	(2		)	(6		)	(8		)	—
Other
Regulatory asset reversals from impaired projects	—			—			8			7			15			—
Reversal of costs capitalized in prior periods	—			—			3			—			3			—
Pension settlement charge	—			—			—			1			1			—
Accrual for loss contingencies	—			—			—			24			24			5
Total Other adjustments	—			—			11			32			43			5
Adjustments included in Modified EBITDA	9			(6		)	24			227			254			5
Adjustments below Modified EBITDA
Impairment of equity-method investments	938			—			—			108			1,046			—
Impairment of goodwill ⁽²⁾	187			—			—			—			187			—
Share of impairment of goodwill at equity-method investment	78			—			—			—			78			—
Allocation of adjustments to noncontrolling interests	(65		)	—			—			—			(65		)	—
	1,138			—			—			108			1,246			—
Total adjustments	1,147			(6		)	24			335			1,500			5
Less tax effect for above items	(316		)	8			1			(68		)	(375		)	(1		)
Adjusted income available to common stockholders	$	313		$	305		$	333		$	382		$	1,333		$	429
Adjusted income – diluted earnings per common share ⁽¹⁾	$	.26		$	.25		$	.27		$	.31		$	1.10		$	.35
Weighted-average shares – diluted (thousands)	1,214,348			1,214,581			1,215,335			1,216,381			1,215,165			1,217,211
(1) The sum of earnings per share for the quarters may not equal the total earnings per share for the year due to changes in the weighted-average number of common shares outstanding.
(2) Our partner’s $65 million share of the first-quarter 2020 impairment of goodwill is reflected below in Allocation of adjustments to noncontrolling interests.



Reconciliation of Cash Flow from Operating Activities to Available Funds from Operations (AFFO)
(UNAUDITED)
	2020															2021
(Dollars in millions, except coverage ratios)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr

The Williams Companies, Inc.
Reconciliation of GAAP “Net cash provided (used) by operating activities” to Non-GAAP “Available funds from operations”

Net cash provided (used) by operating activities	$	787		$	1,143		$	452		$	1,114		$	3,496		$	915
Exclude: Cash (provided) used by changes in:
Accounts receivable	(67		)	(18		)	103			(16		)	2			59
Inventories	(19		)	28			24			(22		)	11			8
Other current assets and deferred charges	(20		)	33			2			(26		)	(11		)	6
Accounts payable	155			(391		)	313			(70		)	7			(38		)
Accrued liabilities	150			86			50			23			309			116
Other, including changes in noncurrent assets and liabilities	(23		)	43			(32		)	17			5			16
Preferred dividends paid	(1		)	—			(1		)	(1		)	(3		)	(1		)
Dividends and distributions paid to noncontrolling interests	(44		)	(54		)	(49		)	(38		)	(185		)	(54		)
Contributions from noncontrolling interests	2			2			1			2			7			2
Available funds from operations	$	920		$	872		$	863		$	983		$	3,638		$	1,029

Common dividends paid	$	485		$	486		$	485		$	485		$	1,941		$	498

Coverage ratio:
Available funds from operations divided by Common dividends paid	1.90			1.79			1.78			2.03			1.87			2.07



Reconciliation of “Net Income (Loss)” to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA”
(UNAUDITED)
	2020															2021
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr

Net income (loss)	$	(570	)	$	315		$	323		$	130		$	198		$	435
Provision (benefit) for income taxes	(204		)	117			111			55			79			141
Interest expense	296			294			292			290			1,172			294
Equity (earnings) losses	(22		)	(108		)	(106		)	(92		)	(328		)	(131		)
Impairment of goodwill	187			—			—			—			187			—
Impairment of equity-method investments	938			—			—			108			1,046			—
Other investing (income) loss – net	(3		)	(1		)	(2		)	(2		)	(8		)	(2		)
Proportional Modified EBITDA of equity-method investments	192			192			189			176			749			225
Depreciation and amortization expenses	429			430			426			436			1,721			438
Accretion expense associated with asset retirement obligations for nonregulated operations	10			7			10			8			35			10
Modified EBITDA	$	1,253		$	1,246		$	1,243		$	1,109		$	4,851		$	1,410

Transmission & Gulf of Mexico	$	662		$	615		$	616		$	486		$	2,379		$	660
Northeast G&P	369			370			387			363			1,489			402
West	215			253			247			283			998			315
Other	7			8			(7		)	(23		)	(15		)	33
Total Modified EBITDA	$	1,253		$	1,246		$	1,243		$	1,109		$	4,851		$	1,410

Adjustments included in Modified EBITDA ⁽¹⁾:

Transmission & Gulf of Mexico	$	7		$	2		$	6		$	158		$	173		$	—
Northeast G&P	1			(7		)	9			43			46			—
West	1			(1		)	(2		)	(6		)	(8		)	—
Other	—			—			11			32			43			5
Total Adjustments included in Modified EBITDA	$	9		$	(6	)	$	24		$	227		$	254		$	5

Adjusted EBITDA:

Transmission & Gulf of Mexico	$	669		$	617		$	622		$	644		$	2,552		$	660
Northeast G&P	370			363			396			406			1,535			402
West	216			252			245			277			990			315
Other	7			8			4			9			28			38
Total Adjusted EBITDA	$	1,262		$	1,240		$	1,267		$	1,336		$	5,105		$	1,415

(1) Adjustments by segment are detailed in the “Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income,” which is also included in these materials.



Reconciliation of Net Income (Loss) to Modified EBITDA, Non-GAAP Adjusted EBITDA and Cash Flow from Operating Activities to Non-GAAP Available Funds from Operations (AFFO)

	2021 Guidance
(Dollars in millions, except per share amounts and coverage ratio)	Low		Mid			High

Net income (loss)	$	1,385	$	1,485		$	1,585
Provision (benefit) for income taxes			490
Interest expense			1,175
Equity (earnings) losses			(475		)
Proportional Modified EBITDA of equity-method investments			835
Depreciation and amortization expenses and accretion for asset retirement obligations associated with nonregulated operations			1,795
Other			(10		)
Modified EBITDA	$	5,195	$	5,295		$	5,395
EBITDA Adjustments			5
Adjusted EBITDA	$	5,200	$	5,300		$	5,400

Net income (loss)	$	1,385	$	1,485		$	1,585
Less: Net income (loss) attributable to noncontrolling interests & preferred dividends			64
Net income (loss) attributable to The Williams Companies, Inc. available to common stockholders	$	1,321	$	1,421		$	1,521

Adjustments:
Adjustments included in Modified EBITDA ⁽¹⁾			5
Adjustments below Modified EBITDA ⁽¹⁾			—
Allocation of adjustments to noncontrolling interests ⁽¹⁾			—
Total adjustments			5
Less tax effect for above items ⁽¹⁾			(1		)
Adjusted income available to common stockholders	$	1,325	$	1,425		$	1,525
Adjusted diluted earnings per common share	$	1.09	$	1.17		$	1.25
Weighted-average shares – diluted (millions)			1,217

Available Funds from Operations (AFFO):
Net cash provided by operating activities (net of changes in working capital and changes in other, including changes in noncurrent assets and liabilities)	$	3,890	$	3,990		$	4,090
Preferred dividends paid			(3		)
Dividends and distributions paid to noncontrolling interests			(200		)
Contributions from noncontrolling interests			13
Available funds from operations (AFFO)	$	3,700	$	3,800		$	3,900
AFFO per common share	$	3.04	$	3.12		$	3.20
Common dividends paid			$	2,000
Coverage Ratio (AFFO/Common dividends paid)	1.85x		1.90x			1.95x

(1) See 1Q Reconciliation of income (loss) attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income
for additional details.

Forward-Looking Statements

The reports, filings, and other public announcements of The Williams Companies, Inc. (Williams) may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions, and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.

All statements, other than statements of historical facts, included in this report that address activities, events, or developments that we expect, believe, or anticipate will exist or may occur in the future, are forward-looking statements. Forward-looking statements can be identified by various forms of words such as “anticipates,” “believes,” “seeks,” “could,” “may,” “should,” “continues,” “estimates,” “expects,” “forecasts,” “intends,” “might,” “goals,” “objectives,” “targets,” “planned,” “potential,” “projects,” “scheduled,” “will,” “assumes,” “guidance,” “outlook,” “in-service date,” or other similar expressions. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management and include, among others, statements regarding:

Levels of dividends to Williams stockholders;

Future credit ratings of Williams and its affiliates;

Amounts and nature of future capital expenditures;

Expansion and growth of our business and operations;

Expected in-service dates for capital projects;

Financial condition and liquidity;

Business strategy;

Cash flow from operations or results of operations;

Seasonality of certain business components;

Natural gas, natural gas liquids and crude oil prices, supply, and demand;

Demand for our services;

The impact of the novel coronavirus (COVID-19) pandemic.

Forward-looking statements are based on numerous assumptions, uncertainties, and risks that could cause future events or results to be materially different from those stated or implied in this report. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following:

Availability of supplies, market demand, and volatility of prices;

Development and rate of adoption of alternative energy sources;

The impact of existing and future laws and regulations, the regulatory environment, environmental matters, and litigation, as well as our ability to obtain necessary permits and approvals, and achieve favorable rate proceeding outcomes;

Our exposure to the credit risk of our customers and counterparties;

Our ability to acquire new businesses and assets and successfully integrate those operations and assets into existing businesses as well as successfully expand our facilities, and to consummate asset sales on acceptable terms;

Whether we are able to successfully identify, evaluate, and timely execute our capital projects and investment opportunities;

The strength and financial resources of our competitors and the effects of competition;

The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate;

Whether we will be able to effectively execute our financing plan;

Increasing scrutiny and changing expectations from stakeholders with respect to our environmental, social, and governance practices;

The physical and financial risks associated with climate change;

The impacts of operational and developmental hazards and unforeseen interruptions;

The risks resulting from outbreaks or other public health crises, including COVID-19;

Risks associated with weather and natural phenomena, including climate conditions and physical damage to our facilities;

Acts of terrorism, cybersecurity incidents, and related disruptions;

Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans;

Changes in maintenance and construction costs, as well as our ability to obtain sufficient construction-related inputs, including skilled labor;

Inflation, interest rates, and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers);

Risks related to financing, including restrictions stemming from debt agreements, future changes in credit ratings as determined by nationally recognized credit rating agencies, and the availability and cost of capital;

The ability of the members of the Organization of Petroleum Exporting Countries and other oil exporting nations to agree to and maintain oil price and production controls and the impact on domestic production;

Changes in the current geopolitical situation;

Whether we are able to pay current and expected levels of dividends;

Changes in U.S. governmental administration and policies;

Additional risks described in our filings with the Securities and Exchange Commission (SEC).

Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. We disclaim any obligations to and do not intend to update the above list or announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments.

In addition to causing our actual results to differ, the factors listed above and referred to below may cause our intentions to change from those statements of intention set forth in this report. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise.

Because forward-looking statements involve risks and uncertainties, we caution that there are important factors, in addition to those listed above, that may cause actual results to differ materially from those contained in the forward-looking statements. For a detailed discussion of those factors, see Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 24, 2021.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210503005716/en/

MEDIA CONTACT:

[email protected]

(800) 945-8723

INVESTOR CONTACT:

Danilo Juvane

(918) 573-5075

KEYWORDS: Oklahoma United States North America

INDUSTRY KEYWORDS: Energy Utilities Oil/Gas

MEDIA:

Logo

May 3, 2021 4:18 pm

MFS Announces Closed-End Fund Distributions

MFS Announces Closed-End Fund Distributions

BOSTON–(BUSINESS WIRE)–
MFS Investment Management^® (MFS^®) announced today monthly distributions of the following closed-end funds, all with declaration dates of May 3, 2021, ex-dividend dates of May 18, 2021, record dates of May 19, 2021, and payable dates of May 28, 2021:

Fund (ticker)	Income/ Share	Other Sources/ Share*	Total Amount/ Share
MFS® Charter Income Trust (NYSE: MCR)^	$0.0000	$0.057860	$0.057860
MFS® Government Markets Income Trust (NYSE: MGF)^	$0.0000	$0.027280	$0.027280
MFS® High Income Municipal Trust (NYSE: CXE)	$0.0210	$0.0000	$0.0210
MFS® High Yield Municipal Trust (NYSE: CMU)	$0.0180	$0.0000	$0.0180
MFS® Intermediate High Income Fund (NYSE: CIF)^	$0.0000	$0.01940	$0.01940
MFS® Intermediate Income Trust (NYSE: MIN)^	$0.0000	$0.026930	$0.026930
MFS® Investment Grade Municipal Trust (NYSE: CXH)	$0.0370	$0.0000	$0.0370
MFS® Multimarket Income Trust (NYSE: MMT)^	$0.0000	$0.041860	$0.041860
MFS® Municipal Income Trust (NYSE: MFM)	$0.0260	$0.0000	$0.0260
MFS® Special Value Trust (NYSE: MFV)^	$0.0000	$0.046190	$0.046190

^The fund has adopted a managed distribution plan. Under a managed distribution plan, to the extent that sufficient investment income is not available on a monthly basis, the fund will distribute long-term capital gains and/or return of capital in order to maintain its managed distribution level. You should not draw any conclusions about the fund’s investment performance from the amount of the fund’s distributions or from the terms of the fund’s managed distribution plan. The Board of the fund may amend the terms of the plan or terminate the plan at any time without prior notice to the fund’s shareholders. The amendment or termination of a plan could have an adverse effect on the market price of the fund’s common shares. The plan will be subject to periodic review by the Board. With each distribution that does not consist solely of net investment income, the fund will issue a notice to shareholders and an accompanying press release which will provide detailed information regarding the amount and composition of the distribution and other related information. The amounts and sources of distributions reported in the notice to shareholders are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the fund’s investment experience during its full fiscal year and may be subject to changes based on tax regulations. The fund will send shareholders a Form 1099-DIV for the calendar year that will tell them how to report these distributions for federal income tax purposes. The fund may at times distribute more than its net investment income and net realized capital gains; therefore, a portion of the distribution may result in a return of capital. A return of capital may occur, for example, when some or all of the money that shareholders invested in the fund is paid back to them. A return of capital does not necessarily reflect a fund’s investment performance and should not be confused with ‘yield’ or ‘income’. Any such returns of capital will decrease the fund’s total assets and, therefore, could have the effect of increasing the fund’s expense ratio. In addition, in order to make the level of distributions called for under its plan, the fund may have to sell portfolio securities at a less than opportune time. For estimated source information for distributions paid in prior periods, please see MFS.com and click on the following links: Products & Strategies, Closed-End Funds, Dividend Source Information.

*Distribution from “Other Sources” may contain sources of income other than ordinary income, such as short term capital gains, long term capital gains, or return of capital, which can not be determined until the close of the fund’s fiscal year end. Distributions that are treated for federal income tax purposes as a return of capital will reduce a shareholder’s tax basis in his or her shares and, to the extent the distribution exceeds a shareholder’s adjusted tax basis, will be treated as a gain to the shareholder from a sale of shares. Please see the fund’s most recent dividend source information available from payable date at MFS.com for the breakdown of the distribution.

Investors who want to make changes to their accounts should contact their financial advisor, brokerage firm, or other nominee with whom the shares are registered. If shares are registered with the funds’ transfer agent, Computershare, the transfer agent may be contacted directly at 800-637-2304, or www.computershare.com.

About MFS Investment Management

In 1924, MFS launched the first US open-end mutual fund, opening the door to the markets for millions of everyday investors. Today, as a full-service global investment manager serving financial advisors, intermediaries and institutional clients, MFS still serves a single purpose: to create long-term value for clients by allocating capital responsibly. That takes our powerful investment approach combining collective expertise, thoughtful risk management and long-term discipline. Supported by our culture of shared values and collaboration, our teams of diverse thinkers actively debate ideas and assess material risks to uncover what we believe are the best investment opportunities in the market. As of March 31, 2021, MFS manages US$626.3 billion in assets on behalf of individual and institutional investors worldwide. Please visit mfs.com for more information.

The funds are closed-end investment products. Common shares of the funds are only available for purchase/sale on the NYSE at the current market price. Shares may trade at a discount to NAV.

MFS Investment Management

111 Huntington Ave, Boston, MA 02199

15812.151

View source version on businesswire.com: https://www.businesswire.com/news/home/20210503005700/en/

MFSShareholders or Advisors (investment product information):

Jeffrey Schwarz, 800-343-2829, ext. 55872

Media Only:

Dan Flaherty, 617-954-4256

KEYWORDS: United States North America Massachusetts

INDUSTRY KEYWORDS: Professional Services Finance

MEDIA:

May 3, 2021 4:18 pm

Trinity Industries, Inc. Declares Quarterly Dividend

Trinity Industries, Inc. Declares Quarterly Dividend

DALLAS–(BUSINESS WIRE)–
Trinity Industries, Inc. (NYSE:TRN) has declared a quarterly dividend of 21 cents per share on its $0.01 par value common stock. The quarterly cash dividend, representing Trinity’s 229th consecutively paid dividend, is payable July 30, 2021 to stockholders of record on July 15, 2021.

About Trinity Industries

Trinity Industries, Inc., headquartered in Dallas, Texas, owns businesses that are leading providers of rail transportation products and services in North America. Our rail-related businesses market their railcar products and services under the trade name TrinityRail^®. The TrinityRail platform provides railcar leasing and management services, as well as railcar manufacturing, maintenance and modifications. Trinity also owns businesses engaged in the manufacture of products used on the nation’s roadways and in traffic control. Trinity reports its financial results in three principal business segments: the Railcar Leasing and Management Services Group, the Rail Products Group, and All Other. For more information, visit: www.trin.net.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210503005664/en/

Investor Contact:

Jessica L. Greiner

Vice President, Investor Relations and Communications

Trinity Industries, Inc.

(Investors) 214/631-4420

Media Contact:

Jack L. Todd

Vice President, Public Affairs

Trinity Industries, Inc.

(Media Line) 214/589-8909

KEYWORDS: United States North America Texas

INDUSTRY KEYWORDS: Rail Transport Other Transport

MEDIA:

May 3, 2021 4:18 pm

Urban Edge Properties Reports First Quarter 2021 Results

Urban Edge Properties Reports First Quarter 2021 Results

NEW YORK–(BUSINESS WIRE)–
Urban Edge Properties (NYSE: UE) (the “Company”) today announced its results for the quarter ended March 31, 2021.

“We are encouraged by the momentum of the retail recovery as we continue to execute on our leasing, development and redevelopment strategies. Our leasing pipeline reflects strong demand from grocers, discounters and a variety of restaurants,” said Jeff Olson, Chairman and CEO. “Our rent collection rate has now reached 95%, and we expect further improvement as state and local operating restrictions are lifted in the New York metropolitan area.”

Financial Results⁽¹⁾⁽²⁾

Generated net income attributable to common shareholders of $20.7 million, or $0.17 per diluted share, for the first quarter of 2021 compared to $51.3 million, or $0.40 per diluted share, for the first quarter of 2020.
Generated Funds from Operations applicable to diluted common shareholders (“FFO”) of $31.8 million, or $0.26 per share, for the quarter compared to $34.8 million, or $0.27 per share, for the first quarter of 2020.
Generated FFO as Adjusted of $32.3 million, or $0.26 per share, for the quarter compared to $34.9 million, or $0.28 per share, for the first quarter of 2020.

Operating Results⁽¹⁾⁽³⁾

Reported a decline of 5.8% in same-property Net Operating Income (“NOI”), including properties in redevelopment, compared to the first quarter of 2020.
Reported a decline of 5.2% in same-property NOI, excluding properties in redevelopment, compared to the first quarter of 2020.
Reported a decline in same-property occupancy to 91.3%, down 50 basis points compared to December 31, 2020 and down 190 basis points compared to March 31, 2020.
Reported a decline in consolidated occupancy to 88.9%, down 50 basis points compared to December 31, 2020 and down 390 basis points compared to March 31, 2020.
Executed 44 new leases, renewals and options totaling 357,000 square feet (“sf”) during the quarter. Generated average rent spreads of 7.1% on a GAAP basis and 2.9% on a cash basis on same-space leases totaling 355,000 sf.

Balance Sheet and Liquidity⁽¹⁾⁽⁴⁾

The Company continues to maintain one of the strongest and most liquid balance sheets in the sector.

Balance sheet highlights as of March 31, 2021 include:

Total liquidity of approximately $1 billion, comprised of $377 million of cash on hand and $600 million available under our revolving credit agreement.
Weighted average term to maturity of 5.2 years.
Total market capitalization of approximately $3.6 billion, comprised of 122.4 million fully-diluted common shares valued at $2.0 billion and $1.6 billion of debt.
Net debt to total market capitalization of 34%.
Net debt to Adjusted Earnings before interest, tax, depreciation and amortization for real estate (“EBITDAre”) of 6.4x.

Leasing, Development and Redevelopment

During the quarter, the Company completed two anchor redevelopment projects with total costs of $14.3 million and an estimated blended unleveraged yield of 10%:

Bed Bath & Beyond and buybuy Baby opened at the Plaza at Woodbridge in Woodbridge, NJ
Emmis Communications opened an 11,000 sf office at Huntington Commons in Huntington, NY

The Company also commenced a $3 million redevelopment project in connection with executing leases with Five Below and Skechers at Tonnelle Commons in North Bergen, NJ. We expect the tenants will open by the second quarter of 2022.

Active redevelopment projects consist of $121.1 million of estimated gross costs, of which $81.7 million remains to be funded. These projects are expected to generate an approximate 8% unleveraged yield. As of May 5, 2021, these projects were 80% leased⁽⁵⁾.

The Company has signed leases that have not yet rent commenced aggregating $10 million of gross revenue, representing approximately 5% of NOI.

Disposition Activity

During the quarter, the Company sold two small properties aggregating 70,000 sf for approximately $24 million and recognized a gain on sale of real estate of $11.7 million.

Subsequent to the quarter, the Company entered into a contract to sell a ground lease in Wheaton, MD for $9.4 million.

The weighted average cap rate on properties sold during the quarter and under contract is approximately 7%.

COVID-19 Business Update

As of April 29, 2021, the Company collected 95% of gross rent for the first quarter of 2021. The Company continues to make progress on 2020 receivables. The table below summarizes the status of the Company’s gross rent collections for the past three quarters:

	% Collected
	4Q 2020	3Q 2020	2Q 2020
As of April 29, 2021	95%	90%	82%
As of February 12, 2021	93%	89%	81%
As of November 3, 2020	N/A	83%	77%
As of August 4, 2020	N/A	N/A	72%

As of April 29, 2021, the Company has executed or approved $9.8 million of deferral agreements (3.4% of gross rents) from the second, third and fourth quarters of 2020 with a weighted average payback period of 17 months. The Company has deferred less than 1% of gross rents from the first quarter of 2021.

Additional information related to the COVID-19 pandemic is included in the quarterly supplemental disclosure package which can be found on the Company’s website (www.uedge.com).

⁽¹⁾		Refer to “Non-GAAP Financial Measures” and “Operating Metrics” for definitions and additional detail.
⁽²⁾		Refer to page 5 for a reconciliation of net income to FFO and FFO as Adjusted for the quarter ended March 31, 2021.
⁽³⁾		Refer to page 6 for a reconciliation of net income to NOI and Same-Property NOI for the quarter ended March 31, 2021.
⁽⁴⁾		Net debt as of March 31, 2021 is calculated as total consolidated debt of $1.6 billion less total cash and cash equivalents, including restricted cash, of $377 million.
⁽⁵⁾		Excluding self storage occupancy.

Non-GAAP Financial Measures

The Company uses certain non-GAAP performance measures, in addition to the primary GAAP presentations, as we believe these measures improve the understanding of the Company’s operational results. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the investing public, and thus such reported measures are subject to change. The Company’s non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results. Additionally, the Company’s computation of non-GAAP metrics may not be comparable to similarly titled non-GAAP metrics reported by other REITs or real estate companies that define these metrics differently and, as a result, it is important to understand the manner in which the Company defines and calculates each of its non-GAAP metrics. The following non-GAAP measures are commonly used by the Company and investing public to understand and evaluate our operating results and performance:

FFO: The Company believes FFO is a useful, supplemental measure of its operating performance that is a recognized metric used extensively by the real estate industry and, in particular real estate investment trusts (“REITs”). FFO, as defined by the National Association of Real Estate Investment Trusts (“Nareit”) and the Company, is net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable real estate and land when connected to the main business of a REIT, impairments on depreciable real estate or land related to a REIT’s main business and rental property depreciation and amortization expense. The Company believes that financial analysts, investors and shareholders are better served by the presentation of comparable period operating results generated from FFO primarily because it excludes the assumption that the value of real estate assets diminishes predictably. FFO does not represent cash flows from operating activities in accordance with GAAP, should not be considered an alternative to net income as an indication of our performance, and is not indicative of cash flow as a measure of liquidity or our ability to make cash distributions.

FFO as Adjusted: The Company provides disclosure of FFO as Adjusted because it believes it is a useful supplemental measure of its core operating performance that facilitates comparability of historical financial periods. FFO as Adjusted is calculated by making certain adjustments to FFO to account for items the Company does not believe are representative of ongoing core operating results, including non-comparable revenues and expenses. The Company’s method of calculating FFO as Adjusted may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

NOI: The Company uses NOI internally to make investment and capital allocation decisions and to compare the unlevered performance of our properties to our peers. The Company believes NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis, providing perspective not immediately apparent from net income. The Company calculates NOI using net income as defined by GAAP reflecting only those income and expense items that are incurred at the property level, adjusted for non-cash rental income and expense, and income or expenses that we do not believe are representative of ongoing operating results, if any. In addition, the Company uses NOI margin, calculated as NOI divided by total revenue, which the Company believes is useful to investors for similar reasons. The Company has historically defined this metric as “Cash NOI.” There have been no changes to the calculation of this metric. However, the Company has decided to refer to this metric as “NOI” instead of “Cash NOI” to further clarify that, consistent with the definition of this metric, the revenue and expenses reflected in this metric include some accrued amounts and are not limited to amounts for which the Company actually received or made cash payment during the applicable period.

Same-property NOI: The Company provides disclosure of NOI on a same-property basis, which includes the results of properties that were owned and operated for the entirety of the reporting periods being compared, which total 71 properties for the three months ended March 31, 2021 and 2020. Information provided on a same-property basis excludes properties under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area (“GLA”) is taken out of service and also excludes properties acquired or sold during the periods being compared. As such, same-property NOI assists in eliminating disparities in net income due to the development, redevelopment, acquisition or disposition of properties during the periods presented, and thus provides a more consistent performance measure for the comparison of the operating performance of the Company’s properties. While there is judgment surrounding changes in designations, a property is removed from the same-property pool when it is designated as a redevelopment property because it is undergoing significant renovation or retenanting pursuant to a formal plan that is expected to have a significant impact on its operating income. A development or redevelopment property is moved back to the same-property pool once a substantial portion of the NOI growth expected from the development or redevelopment is reflected in both the current and comparable prior year period, generally one year after at least 80% of the expected NOI from the project is realized on a cash basis. Acquisitions are moved into the same-property pool once we have owned the property for the entirety of the comparable periods and the property is not under significant development or redevelopment. The Company has also provided disclosure of NOI on a same-property basis adjusted to include redevelopment properties. Same-property NOI may include other adjustments as detailed in the Reconciliation of Net Income to NOI and same-property NOI included in the tables accompanying this press release. The Company has historically defined this metric as “same-property Cash NOI.” There have been no changes to the calculation of this metric. The Company has decided to refer to this metric as “same-property NOI” for the same reasons discussed above under “NOI,” which we had historically defined as “Cash NOI.”

EBITDAre and Adjusted EBITDAre: EBITDAre and Adjusted EBITDAre are supplemental, non-GAAP measures utilized by us in various financial ratios. The White Paper on EBITDAre, approved by Nareit’s Board of Governors in September 2017, defines EBITDAre as net income (computed in accordance with GAAP), adjusted for interest expense, income tax expense, depreciation and amortization, losses and gains on the disposition of depreciated property, impairment write-downs of depreciated property and investments in unconsolidated joint ventures, and adjustments to reflect the entity’s share of EBITDAre of unconsolidated joint ventures. EBITDAre and Adjusted EBITDAre are presented to assist investors in the evaluation of REITs, as a measure of the Company’s operational performance as they exclude various items that do not relate to or are not indicative of our operating performance and because they approximate key performance measures in our debt covenants. Accordingly, the Company believes that the use of EBITDAre and Adjusted EBITDAre, as opposed to income before income taxes, in various ratios provides meaningful performance measures related to the Company’s ability to meet various coverage tests for the stated periods. Adjusted EBITDAre may include other adjustments not indicative of operating results as detailed in the Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre included in the tables accompanying this press release. The Company also presents the ratio of net debt (net of cash) to annualized Adjusted EBITDAre as of March 31, 2021, and net debt (net of cash) to total market capitalization, which it believes is useful to investors as a supplemental measure in evaluating the Company’s balance sheet leverage. The presentation of EBITDAre and Adjusted EBITDAre is consistent with EBITDA and Adjusted EBITDA as presented in prior periods.

The Company believes net income is the most directly comparable GAAP financial measure to the non-GAAP performance measures outlined above. Reconciliations of these measures to net income have been provided in the tables accompanying this press release.

Operating Metrics

The Company presents certain operating metrics related to our properties, including occupancy, leasing activity and rental rates. Operating metrics are used by the Company and are useful to investors in facilitating an understanding of the operational performance for our properties.

Occupancy metrics represent the percentage of occupied gross leasable area based on executed leases (including properties in development and redevelopment) and include leases signed, but for which rent has not yet commenced. Same-property portfolio occupancy includes properties that have been owned and operated for the entirety of the reporting periods being compared, which total 71 properties for the three months ended March 31, 2021 and 2020. Occupancy metrics presented for the Company’s same-property portfolio excludes properties under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service and also excludes properties acquired within the past 12 months or properties sold during the periods being compared.

Executed new leases, renewals and exercised options are presented on a same-space basis. Same-space leases represent those leases signed on spaces for which there was a previous lease.

ADDITIONAL INFORMATION

For a copy of the Company’s supplemental disclosure package, please access the “Investors” section of our website at www.uedge.com. Our website also includes other financial information, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports.

ABOUT URBAN EDGE

Urban Edge Properties is a NYSE listed real estate investment trust focused on managing, acquiring, developing, and redeveloping retail real estate in urban communities, primarily in the New York metropolitan region. Urban Edge owns 77 properties totaling 16.2 million square feet of gross leasable area.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Press Release constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our actual future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Press Release. Many of the factors that will determine the outcome of forward-looking statements are beyond our ability to control or predict and include, among others: (i) the economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic, including (a) the effectiveness or lack of effectiveness of governmental relief in providing assistance individuals adversely impacted by the COVID-19 pandemic, and to large and small businesses, particularly our retail tenants, that have suffered significant declines in revenues as a result of mandatory business shut-downs, “shelter-in-place” or “stay-at-home” orders and social distancing practices, (b) the duration of any such orders or other formal recommendations for social distancing, and the speed and extent to which revenues of our retail tenants recover following the lifting of any such orders or recommendations, (c) the potential impact of any such events on the obligations of the Company’s tenants to make rent and other payments or honor other commitments under existing leases, (d) the potential adverse impact on returns from redevelopment projects, and (e) the broader impact of the severe economic contraction and increase in unemployment that has occurred in the short term, and negative consequences that will occur if these trends are not quickly reversed; (ii) the loss or bankruptcy of major tenants, particularly in light of the adverse impact to the financial health of many retailers that has occurred and continues to occur as a result of the COVID-19 pandemic; (iii) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration, the Company’s ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant, particularly, in light of the adverse impact to the financial health of many retailers that has occurred and continues to occur as a result of the COVID-19 pandemic and the significant uncertainty as to when and under which conditions potential tenants will be able to operate physical retail locations in the future; (iv) the impact of e-commerce on our tenants’ business; (v) macroeconomic conditions, such as a disruption of, or lack of access to the capital markets, as well as the recent significant decline in the Company’s share price from prices prior to the spread of the COVID-19 pandemic; (vi) the Company’s success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (vii) changes in general economic conditions or economic conditions in the markets in which the Company competes, and their effect on the Company’s revenues, earnings and funding sources, and on those of its tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of LIBOR after 2021; (ix) the Company’s ability to pay down, refinance, restructure or extend its indebtedness as it becomes due and potential limitations on the Company’s ability to borrow funds under its existing credit facility as a result of covenants relating to the Company’s financial results; (x) potentially higher costs associated with the Company’s development, redevelopment and anchor repositioning projects, and the Company’s ability to lease the properties at projected rates; (xi) the Company’s liability for environmental matters; (xii) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xiii) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches; and (xv) the loss of key executives. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Risk Factors” in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the other documents filed by the Company with the Securities and Exchange Commission.

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Press Release. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Press Release.

URBAN EDGE PROPERTIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	March 31,			December 31,
	2021			2020
ASSETS
Real estate, at cost:
Land	$	563,346		$	568,662
Buildings and improvements	2,331,880			2,326,450
Construction in progress	40,629			44,689
Furniture, fixtures and equipment	7,118			7,016
Total	2,942,973			2,946,817
Accumulated depreciation and amortization	(741,874		)	(730,366		)
Real estate, net	2,201,099			2,216,451
Right-of-use assets	79,185			80,997
Cash and cash equivalents	324,508			384,572
Restricted cash	52,412			34,681
Tenant and other receivables	16,549			15,673
Receivable arising from the straight-lining of rents	60,980			62,106
Identified intangible assets, net of accumulated amortization of $33,980 and $37,009, respectively	53,714			56,184
Deferred leasing costs, net of accumulated amortization of $16,494 and $16,419, respectively	18,237			18,585
Prepaid expenses and other assets	70,198			70,311
Total assets	$	2,876,882		$	2,939,560

LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net	$	1,584,978		$	1,587,532
Lease liabilities	73,327			74,972
Accounts payable, accrued expenses and other liabilities	71,745			132,980
Identified intangible liabilities, net of accumulated amortization of $73,898 and $71,375, respectively	145,462			148,183
Total liabilities	1,875,512			1,943,667
Commitments and contingencies
Shareholders’ equity:
Common shares: $0.01 par value; 500,000,000 shares authorized and 117,026,289 and 117,014,317 shares issued and outstanding, respectively	1,170			1,169
Additional paid-in capital	987,518			989,863
Accumulated deficit	(37,145		)	(39,467		)
Noncontrolling interests:
Operating partnership	43,523			38,456
Consolidated subsidiaries	6,304			5,872
Total equity	1,001,370			995,893
Total liabilities and equity	$	2,876,882		$	2,939,560

URBAN EDGE PROPERTIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share amounts)

	Quarter Ended March 31,
	2021			2020
REVENUE
Rental revenue	$	94,619		$	93,000
Management and development fees	365			314
Other income	677			46
Total revenue	95,661			93,360
EXPENSES
Depreciation and amortization	22,875			23,471
Real estate taxes	16,601			14,966
Property operating	20,291			14,537
General and administrative	8,668			9,847
Lease expense	3,306			3,434
Total expenses	71,741			66,255
Gain on sale of real estate	11,722			39,775
Interest income	136			1,683
Interest and debt expense	(14,827		)	(17,175		)
Income before income taxes	20,951			51,388
Income tax expense	(235		)	(100		)
Net income	20,716			51,288
Less net (income) loss attributable to noncontrolling interests in:
Operating partnership	(875		)	(2,308		)
Consolidated subsidiaries	79			—
Net income attributable to common shareholders	$	19,920		$	48,980

Earnings per common share – Basic:	$	0.17		$	0.40
Earnings per common share – Diluted:	$	0.17		$	0.40
Weighted average shares outstanding – Basic	116,956			120,966
Weighted average shares outstanding – Diluted	117,024			121,051

Reconciliation of Net Income to FFO and FFO as Adjusted

The following table reflects the reconciliation of net income to FFO and FFO as Adjusted for the quarters ended March 31, 2021 and 2020, respectively. Net income is considered the most directly comparable GAAP measure. Refer to “Non-GAAP Financial Measures” on page 3 for a description of FFO and FFO as Adjusted.

	Quarter Ended March 31,
	2021			2020
Net income	$	20,716		$	51,288
Less net (income) loss attributable to noncontrolling interests in:
Operating partnership		(875	)		(2,308	)
Consolidated subsidiaries		79			—
Net income attributable to common shareholders		19,920			48,980
Adjustments:
Rental property depreciation and amortization		22,686			23,281
Gain on sale of real estate		(11,722	)		(39,775	)
Limited partnership interests in operating partnership		875			2,308
FFO Applicable to diluted common shareholders		31,759			34,794
FFO per diluted common share⁽¹⁾		0.26			0.27
Adjustments to FFO:
Write-off of receivables arising from the straight-lining of rents		873			—
Transaction, severance and other expenses (income)		(377	)		126
FFO as Adjusted applicable to diluted common shareholders	$	32,255		$	34,920
FFO as Adjusted per diluted common share⁽¹⁾	$	0.26		$	0.28

Weighted Average diluted common shares⁽¹⁾		122,166			126,756

⁽¹⁾

Weighted average diluted shares used to calculate FFO per share and FFO as Adjusted per share for the quarter ended March 31, 2021 and March 31, 2020, respectively are higher than the GAAP weighted average diluted shares as a result of the dilutive impact of LTIP and OP units which may be redeemed for our common shares.

Reconciliation of Net Income to NOI and Same-Property NOI

The following table reflects the reconciliation of net income to NOI, same-property NOI and same-property NOI including properties in redevelopment for the quarters ended March 31, 2021 and 2020, respectively. Net income is considered the most directly comparable GAAP measure. Refer to “Non-GAAP Financial Measures” on page 3 for a description of NOI and same-property NOI.

	Quarter Ended March 31,
(Amounts in thousands)	2021			2020
Net income	$	20,716		$	51,288
Management and development fee income from non-owned properties		(365	)		(314	)
Other (income) expense		(246	)		255
Depreciation and amortization		22,875			23,471
General and administrative expense		8,668			9,847
Gain on sale of real estate		(11,722	)		(39,775	)
Interest income		(136	)		(1,683	)
Interest and debt expense		14,827			17,175
Income tax expense		235			100
Non-cash revenue and expenses		(1,273	)		(2,695	)
NOI⁽¹⁾		53,579			57,669
Adjustments:
Non-same property NOI⁽²⁾		(1,801	)		(3,540	)
Tenant bankruptcy settlement income and lease termination income		(475	)		(3	)
Same-property NOI	$	51,303		$	54,126
NOI related to properties being redeveloped		869			1,278
Same-property NOI including properties in redevelopment	$	52,172		$	55,404

⁽¹⁾		The Company has historically defined this metric as “Cash NOI.” There have been no changes to the calculation.
⁽²⁾		Non-same property NOI includes NOI related to properties being redeveloped and properties acquired or disposed in the period.

Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre

The following table reflects the reconciliation of net income to EBITDAre and Adjusted EBITDAre for the quarters ended March 31, 2021 and 2020, respectively. Net income is considered the most directly comparable GAAP measure. Refer to “Non-GAAP Financial Measures” on page 3 for a description of EBITDAre and Adjusted EBITDAre.

	Quarter Ended March 31,
(Amounts in thousands)	2021			2020
Net income	$	20,716		$	51,288
Depreciation and amortization		22,875			23,471
Interest and debt expense		14,827			17,175
Income tax expense		235			100
Gain on sale of real estate		(11,722	)		(39,775	)
EBITDAre		46,931			52,259
Adjustments for Adjusted EBITDAre:
Write-off of receivable arising from the straight-lining of rents		873			—
Transaction, severance and other expenses (income)		(377	)		126
Adjusted EBITDAre	$	47,427		$	52,385

View source version on businesswire.com: https://www.businesswire.com/news/home/20210503005657/en/

Mark Langer, EVP and Chief Financial Officer

(212) 956-0082

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: REIT Retail Department Stores Commercial Building & Real Estate Construction & Property

MEDIA:

Logo

May 3, 2021 4:18 pm

NCS Multistage Holdings, Inc. Announces First Quarter 2021 Results

First Quarter Results

Total revenues of $28.5 million, a 48% year-over-year decrease and a 4% increase from the fourth quarter of 2020
Net loss of $(3.4) million and loss per diluted share of $(1.43); adjusted net loss of $(2.8) million and adjusted loss per diluted share of $(1.18)
Adjusted EBITDA of $0.1 million
$12.0 million in cash on hand and $5.7 million of total debt as of March 31, 2021

HOUSTON, May 03, 2021 (GLOBE NEWSWIRE) — NCS Multistage Holdings, Inc. (NASDAQ: NCSM) (the “Company,” “NCS,” “we” or “us”), a leading provider of highly engineered products and support services that facilitate the optimization of oil and natural gas well completions and field development strategies, today announced its results for the quarter ended March 31, 2021.

Financial Review

Total revenues were $28.5 million for the quarter ended March 31, 2021, which was a decrease of 48% compared to the first quarter of 2020. This decrease reflected reductions in product sales and services volumes in all geographic areas as well as lower pricing for certain products and services, including composite plugs and tracer diagnostics. We believe the decrease in both activity and pricing resulted from the decline in market conditions primarily related to the Coronavirus disease 2019 (“COVID-19”) pandemic, which had a negative impact on our revenues during the three months ended March 31, 2021 as drilling rig and completion activity was substantially lower in the first quarter of 2021 as compared to 2020, particularly in North America. Total revenues increased by 4% as compared to the fourth quarter of 2020 with an increase of 45% in Canada partially offset by decreases of 31% in the United States and 79% in international markets.

Gross profit, which we define as total revenues less total cost of sales exclusive of depreciation and amortization, was $10.2 million, or 36% of total revenues, in the first quarter of 2021, compared to $23.9 million, or 44% of total revenues, in the first quarter of 2020. Cost of sales as a percentage of total revenues increased due to the significant reduction in revenue, leading to under-utilization of manufacturing capacity and field service personnel, even after the reduction of our capacity and staff, as well as a reduction in pricing for certain products and services. Cost of sales in the first quarter of 2021 was also impacted by higher scrap expense and inventory reserves at Repeat Precision related to product design changes implemented during the quarter. We believe that our cost of sales as a percentage of revenue was negatively impacted by a decline in oil and gas market activity levels primarily related to the COVID-19 pandemic.

Selling, general and administrative (“SG&A”) expenses totaled $12.8 million in the first quarter of 2021, a decrease of $8.1 million as compared to the first quarter of the prior year. This overall decrease in expense reflects reductions in compensation and benefits, severance charges, professional fees, share-based compensation, bad debt expense and travel and entertainment expenses.

Net loss was $(3.4) million, or $(1.43) per diluted share, for the quarter ended March 31, 2021, which included a net impact of $0.2 million (after tax effect of $(0.6) million, or $(0.25) per diluted share) related to foreign currency exchange gain and income tax valuation allowances recorded to reduce the carrying value of deferred tax assets. Adjusted net loss, which excludes these items, was $(2.8) million, or $(1.18) per diluted share, for the quarter ended March 31, 2021. This compares to a net loss of $(51.5) million, or $(21.92) per diluted share, in the first quarter of 2020, which included a net impact of $(50.2) million (after tax effect of $(51.0) million, or $(21.70) per diluted share) related to impairment charges and foreign currency exchange loss as well as the tax impact of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and income tax valuation allowances recorded to reduce the carrying value of our U.S. and Canadian deferred tax assets. Adjusted net loss, which excludes these items, was $(0.5) million, or $(0.22) per diluted share, for the quarter ended March 31, 2020.

Adjusted EBITDA was $0.1 million for the quarter ended March 31, 2021, a decrease of $9.2 million as compared to the first quarter of 2020.

Capital Expenditures and Liquidity

The Company incurred capital expenditures of $0.1 million, net, during the first quarter of 2021 as compared to $0.4 million, net, for the first quarter of 2020.

As of March 31, 2021, the Company had $12.0 million in cash and $5.7 million in total debt, with our senior secured credit facility remaining undrawn. The borrowing base under the senior secured credit facility as of March 31, 2021 was $14.4 million. The Company’s net working capital, which we define as our current assets, excluding cash and cash equivalents, minus our current liabilities, excluding current maturities of long-term debt, was $55.5 million at March 31, 2021.

Review and Outlook

NCS’s Chief Executive Officer, Robert Nipper commented, “The strong performance of our Canadian operations allowed NCS to grow total revenue for the quarter by 4% as compared to the fourth quarter of 2020, despite lower seasonal activity in international markets and challenges faced in the U.S. related to winter storm Uri and at our Repeat Precision joint venture early in the quarter.

We are maintaining our cost and capital discipline, having reduced our SG&A expenses by 39% in the first quarter of 2021 as compared to the first quarter of 2020 and limiting net capital expenditures to $0.1 million during the quarter, highlighting the capital-light nature of our business.

Our strong balance sheet is demonstrated by our net cash position of $6.3 million at the end of the first quarter. In addition, our credit facility remains undrawn with a borrowing base of over $14 million at March 31, 2021.

We are encouraged by the recent performance of our U.S. business, including Repeat Precision, which exited the first quarter with increasing activity in March as compared to the prior month, which we expect to continue into the second quarter, allowing our U.S. operations to return to sequential revenue growth. We expect to experience a meaningful sequential decline in our Canadian revenue in the second quarter, associated with typical seasonal patterns related to spring break-up, however, we expect activity in Canada in the second quarter of 2021 to exceed activity from the second quarter of 2020, which was at multi-decade low levels. The international rig count appears to have bottomed during the first quarter of 2021, and we expect our activity in international markets to increase sequentially in the second quarter.

I am proud to say that we have continued our excellent operational performance from 2020 into 2021. We had zero total recordable incidents in 2020 and have had zero thus far in 2021. This accomplishment speaks to the quality of our people and processes.

I want to thank the entire team at NCS and Repeat Precision. It is through their hard work and determination that we can deliver on our commitments to provide value to customers, to drive innovation in the industry, and to create value for our shareholders.”

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net (Loss) Income, Adjusted Net (Loss) Earnings per Diluted Share, Free Cash Flow, Free Cash Flow Less Distributions to Non-Controlling Interest and net working capital are non-GAAP financial measures. For an explanation of these measures and a reconciliation, refer to “Non-GAAP Financial Measures” below.

Conference Call

The Company will host a conference call to discuss its first quarter 2021 results and future financial expectations on Tuesday, May 4, 2021 at 7:30 a.m. Central Time (8:30 a.m. Eastern Time). To join the conference call from within the United States, participants may dial (844) 400-1696. To join the conference call from outside of the United States, participants may dial (703) 736-7385. The conference access code is 4598373. Participants are encouraged to log in to the webcast or dial in to the conference call approximately ten minutes prior to the start time. To listen via live webcast, please visit the Investors section of the Company’s website, www.ncsmultistage.com.

An audio replay of the conference call will be available shortly after the conclusion of the call and will remain available for approximately seven days. It can be accessed by dialing (855) 859-2056 within the United States or (404) 537-3406 outside of the United States. The conference call replay access code is 4598373. The replay will also be available in the Investors section of the Company’s website shortly after the conclusion of the call and will remain available for approximately seven days.

About NCS Multistage Holdings, Inc.

NCS Multistage Holdings, Inc. is a leading provider of highly engineered products and support services that facilitate the optimization of oil and natural gas well completions and field development strategies. NCS provides products and services to exploration and production companies for use in horizontal wells in unconventional oil and natural gas formations throughout North America and in selected international markets, including Argentina, China, the Middle East and the North Sea. NCS’s common stock is traded on the NASDAQ Capital Market under the symbol “NCSM.” Additional information is available on the website, www.ncsmultistage.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods, or by the inclusion of forecasts or projections.
Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause our actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following: the risks and uncertainties relating to public health crises, including the COVID-19 pandemic and its continuing impact on market conditions and our business, financial condition, results of operations, cash flows and stock price; declines in the level of oil and natural gas exploration and production activity within Canada and the United States; oil and natural gas price fluctuations; the financial health of our customers including their ability to pay for products or services provided; inability to successfully implement our strategy of increasing sales of products and services into the United States; significant competition for our products and services that results in pricing pressures, reduced sales, or reduced market share; loss of significant customers; our inability to successfully develop and implement new technologies, products and services; our inability to protect and maintain critical intellectual property assets; losses and liabilities from uninsured or underinsured business activities; our failure to identify and consummate potential acquisitions; our inability to integrate or realize the expected benefits from acquisitions; currency exchange rate fluctuations; impact of severe weather conditions; risks resulting from the operations of a joint venture arrangement; restrictions on the availability of our customers to obtain water essential to the drilling and hydraulic fracturing processes; changes in legislation or regulation governing the oil and natural gas industry, including restrictions on emissions of greenhouse gases; our inability to meet regulatory requirements for use of certain chemicals by our tracer diagnostics business; change in trade policy, including the impact of additional tariffs; our inability to accurately predict customer demand, which may result in us holding excess or obsolete inventory; failure to comply with or changes to federal, state and local and non-U.S. laws and other regulations, including anti-corruption and environmental regulations, the CARES Act and the U.S. Tax Cuts and Jobs Act of 2017; loss of our information and computer systems; system interruptions or failures, including complications with our enterprise resource planning system, cyber-security breaches, identity theft or other disruptions that could compromise our information; impairment in the carrying value of long-lived assets and goodwill; our failure to establish and maintain effective internal control over financial reporting; our success in attracting and retaining qualified employees and key personnel; risks and uncertainties relating to cost reduction efforts or savings we may realize from such cost reduction efforts; the reduction in our senior secured credit facility borrowing base or our inability to comply with the covenants in our debt agreements; and our
inability to obtain sufficient liquidity on reasonable terms, or at all and other factors discussed or referenced in our filings made from time to time with the Securities and Exchange Commission. Any forward-looking statement made by us in this press release speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Contact

Ryan Hummer
Chief Financial Officer
(281) 453-2222
[email protected]

NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended
	March 31,
	2021			2020
Revenues
Product sales	$	20,174		$	39,430
Services		8,340			15,120
Total revenues		28,514			54,550
Cost of sales
Cost of product sales, exclusive of depreciation and amortization expense shown below		13,921			23,448
Cost of services, exclusive of depreciation and amortization expense shown below		4,357			7,166
Total cost of sales, exclusive of depreciation and amortization expense shown below		18,278			30,614
Selling, general and administrative expenses		12,784			20,835
Depreciation		937			1,452
Amortization		167			1,133
Impairment		—			50,194
Loss from operations		(3,652	)		(49,678	)
Other income (expense)
Interest expense, net		(168	)		(322	)
Other income, net		341			158
Foreign currency exchange gain, net		150			10
Total other income (expense)		323			(154	)
Loss before income tax		(3,329	)		(49,832	)
Income tax expense (benefit)		128			(925	)
Net loss		(3,457	)		(48,907	)
Net (loss) income attributable to non-controlling interest		(60	)		2,642
Net loss attributable to NCS Multistage Holdings, Inc.	$	(3,397	)	$	(51,549	)
Loss per common share
Basic loss per common share attributable to NCS Multistage Holdings, Inc.	$	(1.43	)	$	(21.92	)
Diluted loss per common share attributable to NCS Multistage Holdings, Inc.	$	(1.43	)	$	(21.92	)
Weighted average common shares outstanding
Basic		2,380			2,352
Diluted		2,380			2,352

NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS*

(In thousands, except share data)

(Unaudited)

	March 31,			December 31,
	2021			2020
Assets
Current assets
Cash and cash equivalents	$	11,962		$	15,545
Accounts receivable—trade, net		22,106			21,925
Inventories, net		34,578			34,871
Prepaid expenses and other current assets		2,878			2,975
Other current receivables		9,045			8,358
Total current assets		80,569			83,674
Noncurrent assets
Property and equipment, net		23,903			24,435
Goodwill		15,222			15,222
Identifiable intangibles, net		6,246			6,413
Operating lease assets		4,806			5,170
Deposits and other assets		3,501			3,559
Deferred income taxes, net		207			205
Total noncurrent assets		53,885			55,004
Total assets	$	134,454		$	138,678
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable—trade	$	5,720		$	4,943
Accrued expenses		3,343			3,347
Income taxes payable		851			653
Operating lease liabilities		1,779			1,826
Current maturities of long-term debt		1,379			1,347
Other current liabilities		1,391			2,768
Total current liabilities		14,463			14,884
Noncurrent liabilities
Long-term debt, less current maturities		4,302			4,442
Operating lease liabilities, long-term		3,651			3,989
Other long-term liabilities		1,920			1,864
Deferred income taxes, net		67			13
Total noncurrent liabilities		9,940			10,308
Total liabilities		24,403			25,192
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding at
March 31, 2021 and December 31, 2020		—			—
Common stock, $0.01 par value, 11,250,000 shares authorized, 2,396,042 shares issued
and 2,378,879 shares outstanding at March 31, 2021 and 2,371,992 shares issued
and 2,359,918 shares outstanding at December 31, 2020		24			24
Additional paid-in capital		433,971			432,801
Accumulated other comprehensive loss		(81,487	)		(81,780	)
Retained deficit		(260,025	)		(256,628	)
Treasury stock, at cost; 17,163 shares at March 31, 2021 and 12,074 shares
at December 31, 2020		(1,000	)		(809	)
Total stockholders’ equity		91,483			93,608
Non-controlling interest		18,568			19,878
Total equity		110,051			113,486
Total liabilities and stockholders’ equity	$	134,454		$	138,678

_____________________

* Preliminary

NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended
	March 31,
	2021			2020
Cash flows from operating activities
Net loss	$	(3,457	)	$	(48,907	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		1,104			2,585
Impairment		—			50,194
Amortization of deferred loan costs		70			75
Share-based compensation		2,239			2,883
Provision for inventory obsolescence		404			237
Deferred income tax expense (benefit)		54			(1,238	)
(Gain) loss on sale of property and equipment		(79	)		46
Provision for doubtful accounts		(66	)		383
Proceeds from note receivable		48			276
Changes in operating assets and liabilities:
Accounts receivable—trade		(42	)		(2,716	)
Inventories, net		(18	)		(442	)
Prepaid expenses and other assets		114			(2,645	)
Accounts payable—trade		746			343
Accrued expenses		(11	)		494
Other liabilities		(2,781	)		1,758
Income taxes receivable/payable		(140	)		282
Net cash (used in) provided by operating activities		(1,815	)		3,608
Cash flows from investing activities
Purchases of property and equipment		(46	)		(458	)
Purchase and development of software and technology		(80	)		—
Proceeds from sales of property and equipment		62			20
Net cash used in investing activities		(64	)		(438	)
Cash flows from financing activities
Payments on equipment note and finance leases		(324	)		(432	)
Line of credit borrowings		32			5,000
Treasury shares withheld		(191	)		(151	)
Distribution to noncontrolling interest		(1,250	)		(3,050	)
Net cash (used in) provided by financing activities		(1,733	)		1,367
Effect of exchange rate changes on cash and cash equivalents		29			(295	)
Net change in cash and cash equivalents		(3,583	)		4,242
Cash and cash equivalents beginning of period		15,545			11,243
Cash and cash equivalents end of period	$	11,962		$	15,485
Noncash investing and financing activities
Leased assets obtained in exchange for new finance lease liabilities	$	246		$	301
Leased assets obtained in exchange for new operating lease liabilities	$	26		$	2,572

NCS MULTISTAGE HOLDINGS, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(In thousands, except per share data)

(Unaudited)

Non-GAAP Financial Measures

EBITDA is defined as net (loss) income before interest expense, net, income tax expense and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude certain items which we believe are not reflective of ongoing operating performance or which, in the case of an impairment and share-based compensation, are non-cash in nature. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of total revenues. Adjusted EBITDA Less Share-Based Compensation is defined as Adjusted EBITDA minus share-based compensation expense. Adjusted Net (Loss) Income is defined as net (loss) income attributable to NCS Multistage Holdings, Inc. adjusted to exclude certain items which we believe are not reflective of ongoing performance. Adjusted Net (Loss) Earnings per Diluted Share is defined as Adjusted Net (Loss) Income divided by our diluted weighted average common shares outstanding during the relevant period. Free cash flow is defined as net cash provided by (used in) operating activities less purchases of property and equipment (inclusive of the purchase and development of software and technology) plus proceeds from sales of property and equipment, as presented in our consolidated statement of cash flows. We define free cash flow less distributions to non-controlling interest as free cash flow less distributions to non-controlling interest, as presented in the net cash used in financing activities section of our consolidated statements of cash flows. Net working capital is defined as total current assets, excluding cash and cash equivalents, minus total current liabilities, excluding current maturities of long-term debt. Net working capital excludes cash and cash equivalents and current maturities of long-term debt to evaluate the investment in working capital required to support our business. We believe that Adjusted EBITDA, Adjusted Net (Loss) Income and Adjusted Net (Loss) Earnings per Diluted Share are important measures that exclude costs that management believes do not reflect our ongoing operating performance and, in the case of Adjusted EBITDA, certain costs associated with our capital structure. We believe that Adjusted EBITDA Less Share-Based Compensation presents our financial performance in a manner that is comparable to the presentation provided by many of our peers. We believe free cash flow is useful because it provides information to investors regarding the cash that was available in the period that was in excess of our needs to fund our capital expenditures and other investment needs. We believe that free cash flow less distributions to non-controlling interest is useful because it provides information to investors regarding the cash that was available in the period that was in excess of our needs to fund our capital expenditures, other investment needs, and cash distributions to our joint venture partner. We believe that net working capital is useful in analyzing the cash flow and working capital needs of the Company, including determining the efficiencies of our operations and our ability to readily convert assets into cash. Accordingly, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net (Loss) Income, Adjusted Net (Loss) Earnings per Diluted Share, Free Cash Flow, Free Cash Flow Less Distributions to Non-Controlling Interest and net working capital are key metrics that management uses to assess the period-to-period performance of our core business operations. We believe that presenting Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net (Loss) Income, Adjusted Net (Loss) Earnings per Diluted Share, Free Cash Flow and Free Cash Flow Less Distributions to Non-Controlling Interest enables investors to assess our performance from period to period using the same metrics utilized by management and that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net (Loss) Income and Adjusted Net (Loss) Earnings per Diluted Share enable investors to evaluate our performance relative to other companies that are not subject to such factors.

EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net (Loss) Income, Adjusted Net (Loss) Earnings per Diluted Share, Free Cash Flow, Free Cash Flow Less Distributions to Non-Controlling Interest and net working capital (our “non-GAAP financial measures”) are not defined under generally accepted accounting principles (“GAAP”), are not measures of net income, income from operations, cash provided by operating activities, working capital or any other performance measure derived in accordance with GAAP, and are subject to important limitations. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies in our industry and are not measures of performance calculated in accordance with GAAP. Our non-GAAP financial measures have important limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our financial performance as reported under GAAP and they should not be considered as alternatives to net income (loss), cash provided by operating activities, working capital or any other performance measures derived in accordance with GAAP as measures of operating performance or as alternatives to cash flow from operating activities as measures of our liquidity.

The tables below set forth reconciliations of our non-GAAP financial measures to the most directly comparable measure of financial performance calculated under GAAP:

NET WORKING CAPITAL*

	March 31,			December 31,
	2021			2020
Working capital	$	66,106		$	68,790
Cash and cash equivalents		(11,962	)		(15,545	)
Current maturities of long term debt		1,379			1,347
Net working capital	$	55,523		$	54,592

_____________________

* Preliminary

NCS MULTISTAGE HOLDINGS, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(In thousands, except per share data)

(Unaudited)

ADJUSTED NET LOSS AND ADJUSTED NET LOSS PER DILUTED SHARE

	Three Months Ended
	March 31, 2021						March 31, 2020
	Effect on Net Loss			Impact on Diluted Loss Per Share			Effect on Net Loss			Impact on Diluted Loss Per Share
Net loss attributable to NCS Multistage Holdings, Inc.	$	(3,397	)	$	(1.43	)	$	(51,549	)	$	(21.92	)
Adjustments
Impairment (a)		—			—			50,194			21.34
Foreign currency exchange (gain) loss (b)		(160	)		(0.07	)		38			0.02
Income tax impact from adjustments (c)		750			0.32			795			0.34
Adjusted net loss attributable to NCS Multistage Holdings, Inc.	$	(2,807	)	$	(1.18	)	$	(522	)	$	(0.22	)

_____________________
(a)   Represents non-cash impairment charges for property and equipment and intangible assets during 2020 as the fair values were lower than the carrying values.
(b)   Represents realized and unrealized foreign currency translation gains and losses primarily due to movement in the foreign currency exchange rates during the applicable periods.
(c)   Represents the income tax adjustments including the valuation allowance recorded to reduce the carrying value of both our U.S. and Canadian deferred tax assets.

NCS MULTISTAGE HOLDINGS, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(In thousands)

(Unaudited)

ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN, AND ADJUSTED EBITDA LESS SHARE-BASED COMPENSATION

	Three Months Ended
	March 31,
	2021			2020
Net loss	$	(3,457	)	$	(48,907	)
Income tax expense (benefit)		128			(925	)
Interest expense, net		168			322
Depreciation		937			1,452
Amortization		167			1,133
EBITDA		(2,057	)		(46,925	)
Impairment (a)		—			50,194
Share-based compensation (b)		1,170			2,950
Professional fees (c)		943			1,388
Foreign currency exchange gain (d)		(150	)		(10	)
Severance and other termination benefits (e)		—			1,346
Other (f)		168			295
Adjusted EBITDA	$	74		$	9,238
Adjusted EBITDA Margin		0	%		17	%
Adjusted EBITDA Less Share-Based Compensation	$	(1,096	)	$	6,288

_____________________
(a)   Represents non-cash impairment charges for property and equipment and intangible assets during 2020 as the fair values were lower than the carrying values.
(b)   Represents non-cash compensation charges related to share-based compensation granted to our officers, employees and directors.
(c)   Represents non-capitalizable costs of professional services incurred in connection with legal proceedings and the evaluation of potential acquisitions.
(d)   Represents realized and unrealized foreign currency translation gains and losses primarily due to movement in the foreign currency exchange rates during the applicable periods.
(e)   Reflects charges incurred in connection with the reductions in workforce implemented in 2020.
(f)   Represents the impact of a research and development subsidy that is included in income tax expense (benefit) in accordance with GAAP along with other charges and credits.

FREE CASH FLOW

	Three Months Ended
	March 31,
	2021			2020
Net cash (used in) provided by operating activities	$	(1,815	)	$	3,608
Purchases of property and equipment		(46	)		(458	)
Purchase and development of software and technology		(80	)		—
Proceeds from sales of property and equipment		62			20
Free cash flow	$	(1,879	)	$	3,170

FREE CASH FLOW LESS DISTRIBUTIONS TO NON-CONTROLLING INTEREST

	Three Months Ended
	March 31,
	2021			2020
Net cash (used in) provided by operating activities	$	(1,815	)	$	3,608
Purchases of property and equipment		(46	)		(458	)
Purchase and development of software and technology		(80	)		—
Proceeds from sales of property and equipment		62			20
Distribution to non-controlling interest		(1,250	)		(3,050	)
Free cash flow less distributions to non-controlling interest	$	(3,129	)	$	120

NCS MULTISTAGE HOLDINGS, INC.

REVENUES BY GEOGRAPHIC AREA

(In thousands)

(Unaudited)

	Three Months Ended
	March 31,
	2021		2020
United States
Product sales	$	6,296	$	17,440
Services		1,527		3,528
Total United States		7,823		20,968
Canada
Product sales		13,878		20,807
Services		6,357		8,559
Total Canada		20,235		29,366
Other Countries
Product sales		—		1,183
Services		456		3,033
Total Other Countries		456		4,216
Total
Product sales		20,174		39,430
Services		8,340		15,120
Total revenues	$	28,514	$	54,550

May 3, 2021 4:18 pm

Westlake Chemical Partners LP Announces First Quarter 2021 Distribution

Westlake Chemical Partners LP Announces First Quarter 2021 Distribution

$0.4714 cents per unit distribution declared payable on May 27, 2021

HOUSTON–(BUSINESS WIRE)–
The Board of Directors of Westlake Chemical Partners GP LLC, the general partner of Westlake Chemical Partners LP (the “Partnership”) (NYSE:WLKP), has declared a distribution by the Partnership of $0.4714 per unit. This is the 27th consecutive quarterly distribution announced by the Partnership since its initial public offering. The distribution will be payable on May 27, 2021, to unit holders of record on May 13, 2021.

This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of the Partnership’s distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, the Partnership’s distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate.

About Westlake Chemical Partners LP

Westlake Chemical Partners is a limited partnership formed by Westlake Chemical Corporation to operate, acquire and develop ethylene production facilities and other qualified assets. Headquartered in Houston, the Partnership owns a 22.8% interest in Westlake Chemical OpCo LP. Westlake Chemical OpCo LP’s assets include three facilities in Calvert City, Kentucky, and Lake Charles, Louisiana which process ethane and propane into ethylene, and an ethylene pipeline. For more information about Westlake Chemical Partners LP, please visit http://www.wlkpartners.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210503005553/en/

Media Inquiries:

Westlake Chemical Corp.

Ben Ederington, 1-713-960-9111

Investor Inquiries:

Westlake Chemical Corp.

Steve Bender, 1-713-960-9111

KEYWORDS: United States North America Texas

INDUSTRY KEYWORDS: Manufacturing Other Manufacturing Energy Other Energy Chemicals/Plastics

MEDIA:

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May 3, 2021 4:18 pm

Fabrinet Announces Third Quarter Fiscal Year 2021 Financial Results

Fabrinet Announces Third Quarter Fiscal Year 2021 Financial Results

Record Third Quarter Revenue of $479.3 Million Exceeds Guidance

BANGKOK–(BUSINESS WIRE)–
Fabrinet (NYSE: FN), a leading provider of advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, today announced its financial results for its third fiscal quarter ended March 26, 2021.

Seamus Grady, Chief Executive Officer of Fabrinet, said, “For the third quarter in a row, we delivered record revenue that exceeded our guidance. Notably, we saw sequential revenue growth from all the end markets that we track combined with improving operating margins, both of which helped generate record net income.”

Grady continued, “Based on our current outlook and continued demand, we expect another record performance in the fourth quarter and we remain well-positioned to continue to deliver strong results over the longer-term.”

Third Quarter Fiscal Year 2021 Financial Highlights

GAAP Results

Revenue for the third quarter of fiscal year 2021 was $479.3 million, compared to $411.2 million in the third quarter of fiscal year 2020.
GAAP net income for the third quarter of fiscal year 2021 was $37.5 million, compared to GAAP net income of $28.3 million for the third quarter of fiscal year 2020.
GAAP net income per diluted share for the third quarter of fiscal year 2021 was $1.00, compared to GAAP net income per diluted share of $0.75 for the third quarter of fiscal year 2020.

Non-GAAP Results

Non-GAAP net income for the third quarter of fiscal year 2021 was $45.4 million, compared to non-GAAP net income of $34.8 million for the third quarter of fiscal year 2020.
Non-GAAP net income per diluted share for the third quarter of fiscal year 2021 was $1.21, compared to non-GAAP net income per diluted share of $0.92 for the third quarter of fiscal year 2020.

Business Outlook

Based on information available as of May 3, 2021, Fabrinet is issuing guidance for its fourth fiscal quarter ending June 25, 2021, as follows:

Fabrinet expects fourth quarter revenue to be in the range of $475 million to $495 million.
GAAP net income per diluted share is expected to be in the range of $1.02 to $1.09, based on approximately 37.6 million fully diluted shares outstanding.
Non-GAAP net income per diluted share is expected to be in the range of $1.18 to $1.25, based on approximately 37.6 million fully diluted shares outstanding.

Conference Call Information

What:		Fabrinet Third Quarter Fiscal Year 2021 Financial Results Call
When:		Monday, May 3, 2021
Time:		5:00 p.m. ET
Live Call:		(888) 357-3694, domestic
		(253) 237-1137, international
		Passcode: 2790505
Replay:		(855) 859-2056, domestic
		(404) 537-3406, international
		Passcode: 2790505
Webcast:		http://investor.fabrinet.com/ (live and replay)

This press release and any other information related to the call will also be posted on Fabrinet’s website at http://investor.fabrinet.com. A recorded version of this webcast will be available approximately two hours after the call and will be archived on Fabrinet’s website for a period of one year.

About Fabrinet

Fabrinet is a leading provider of advanced optical packaging and precision optical, electro-mechanical, and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and subsystems, automotive components, medical devices, industrial lasers and sensors. Fabrinet offers a broad range of advanced optical and electro-mechanical capabilities across the entire manufacturing process, including process design and engineering, supply chain management, manufacturing, advanced packaging, integration, final assembly and testing. Fabrinet focuses on production of high complexity products in any mix and any volume. Fabrinet maintains engineering and manufacturing resources and facilities in Thailand, the United States of America, the People’s Republic of China, Israel and the United Kingdom. For more information visit: www.fabrinet.com.

Forward-Looking Statements

“Safe Harbor” Statement Under U.S. Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include: (1) our optimism that the fourth quarter will represent another record performance for the company and that we remain well-positioned to continue to deliver strong results over the longer-term; and (2) all of the statements under the “Business Outlook” section regarding our expected revenue, GAAP and non-GAAP net income per share, and fully diluted shares outstanding for the fourth quarter of fiscal year 2021. These forward-looking statements involve risks and uncertainties, and actual results could vary materially from these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: the effects of the COVID-19 pandemic on our business, particularly the possibility of (1) the growing global economic downturn, (2) extended shutdowns at any of our manufacturing facilities, especially if the pandemic intensifies or returns in various geographic areas, (3) continued disruption to our supply chain, which could increase our costs and affect our ability to procure parts and materials, especially if the pandemic intensifies or returns in various geographic areas, and (4) regional downward demand adjustments from our customers, particularly those in areas affected by the pandemic; less customer demand for our products and services than forecasted; less growth in the optical communications, industrial lasers and sensors markets than we forecast; difficulties expanding into additional markets, such as the semiconductor processing, biotechnology, metrology and materials processing markets; increased competition in the optical manufacturing services markets; difficulties in delivering products and services that compete effectively from a price and performance perspective; our reliance on a small number of customers and suppliers; difficulties in managing our operating costs; difficulties in managing and operating our business across multiple countries (including Thailand, the People’s Republic of China, Israel, the U.S. and the U.K.); and other important factors as described in reports and documents we file from time to time with the Securities and Exchange Commission (SEC), including the factors described under the section captioned “Risk Factors” in our Quarterly Report on Form 10-Q, filed with the SEC on February 2, 2021. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.

Use of Non-GAAP Financials

We refer to the non-GAAP financial measures cited above in making operating decisions because they provide meaningful supplemental information regarding our ongoing operational performance. Non-GAAP net income excludes: share-based compensation expenses; depreciation of fair value uplift; amortization of intangibles; and amortization of deferred debt issuance costs. We have excluded these items in order to enhance investors’ understanding of our underlying operations. The use of these non-GAAP financial measures has material limitations because they should not be used to evaluate our company without reference to their corresponding GAAP financial measures. As such, we compensate for these material limitations by using these non-GAAP financial measures in conjunction with GAAP financial measures.

These non-GAAP financial measures are used to: (1) measure company performance against historical results, (2) facilitate comparisons to our competitors’ operating results, and (3) allow greater transparency with respect to information used by management in making financial and operational decisions. In addition, these non-GAAP financial measures are used to measure company performance for the purposes of determining employee incentive plan compensation.

FABRINET
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands of U.S. dollars, except share data and par value)	March 26, 2021			June 26, 2020
Assets
Current assets
Cash and cash equivalents	$	247,011		$	225,430
Short-term restricted cash		—			7,402
Short-term investments		261,736			262,693
Trade accounts receivable, net of allowance for doubtful accounts of $126 and $336 respectively		309,079			272,665
Contract assets		17,130			13,256
Inventories		353,283			309,786
Other receivable		24,310			24,310
Prepaid expenses		10,653			5,399
Other current assets		31,967			14,508
Total current assets		1,255,169			1,135,449
Non-current assets
Long-term restricted cash		153			—
Property, plant and equipment, net		228,767			228,274
Intangibles, net		4,576			4,312
Operating right-of-use assets		6,744			8,068
Deferred tax assets		6,195			5,675
Other non-current assets		226			202
Total non-current assets		246,661			246,531
Total Assets		1,501,830			1,381,980
Liabilities and Shareholders’ Equity
Current liabilities
Long-term borrowings, current portion, net		12,156			12,156
Trade accounts payable		275,705			251,603
Fixed assets payable		11,060			15,127
Contract liabilities		1,409			1,556
Operating lease liabilities, current portion		2,390			1,979
Income tax payable		2,882			2,242
Accrued payroll, bonus and related expenses		21,639			19,265
Accrued expenses		12,651			8,979
Other payables		26,348			21,514
Total current liabilities		366,240			334,421
Non-current liabilities
Long-term borrowings, non-current portion, net		30,397			39,514
Deferred tax liability		4,855			4,729
Operating lease liability, non-current portion		4,098			5,873
Severance liabilities		19,006			17,379
Other non-current liabilities		3,728			5,655
Total non-current liabilities		62,084			73,150
Total Liabilities		428,324			407,571

Shareholders’ equity
Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of March 26, 2021 and June 26, 2020)		—			—
Ordinary shares (500,000,000 shares authorized, $0.01 par value; 38,741,166 shares and 38,471,967 shares issued at March 26, 2021 and June 26, 2020, respectively; and 36,880,160 shares and 36,727,864 shares outstanding at March 26, 2021 and June 26, 2020, respectively)		388			385
Additional paid-in capital		182,987			175,610
Less: Treasury shares (1,861,006 shares and 1,744,103 shares as of March 26, 2021 and June 26, 2020, respectively)		(76,813	)		(68,501	)
Accumulated other comprehensive income (loss)		(6,939	)		(1,147	)
Retained earnings		973,883			868,062
Total Shareholders’ Equity		1,073,506			974,409
Total Liabilities and Shareholders’ Equity	$	1,501,830		$	1,381,980

FABRINET
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited)

	Three Months Ended						Nine Months Ended
(in thousands of U.S. dollars, except per share data)	March 26, 2021			March 27, 2020			March 26, 2021			March 27, 2020
Revenues	$	479,317		$	411,210		$	1,369,783		$	1,236,723
Cost of revenues		(422,539	)		(366,874	)		(1,209,504	)		(1,097,242	)
Gross profit		56,778			44,336			160,279			139,481
Selling, general and administrative expenses		(19,059	)		(17,111	)		(53,078	)		(50,189	)
Expenses related to reduction in workforce		(43	)		—			(43	)		(16	)
Operating income		37,676			27,225			107,158			89,276
Interest income		941			2,042			3,156			6,080
Interest expense		(282	)		(238	)		(798	)		(2,812	)
Foreign exchange gain (loss), net		629			(8	)		224			(2,949	)
Other income (expense), net		124			203			403			977
Income before income taxes		39,088			29,224			110,143			90,572
Income tax expense		(1,595	)		(957	)		(4,215	)		(5,117	)
Net income		37,493			28,267			105,928			85,455
Other comprehensive income (loss), net of tax:
Change in net unrealized gain (loss) on available-for-sale securities		(570	)		(1,356	)		(937	)		(1,403	)
Change in net unrealized gain (loss) on derivative instruments		(5,000	)		(6,569	)		(5,823	)		(6,719	)
Change in net retirement benefits plan – prior service cost		198			294			421			478
Change in foreign currency translation adjustment		90			(600	)		547			(353	)
Total other comprehensive income (loss), net of tax		(5,282	)		(8,231	)		(5,792	)		(7,997	)
Net comprehensive income (loss)	$	32,211		$	20,036		$	100,136		$	77,458
Earnings per share
Basic	$	1.02		$	0.76		$	2.87		$	2.31
Diluted	$	1.00		$	0.75		$	2.82		$	2.27
Weighted-average number of ordinary shares outstanding (thousands of shares)
Basic		36,875			36,987			36,876			36,970
Diluted		37,609			37,797			37,514			37,696

FABRINET
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	Nine Months Ended
(in thousands of U.S. dollars)	March 26, 2021			March 27, 2020
Cash flows from operating activities
Net income for the period	$	105,928		$	85,455
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		26,781			23,115
(Gain) loss on disposal of property, plant and equipment		(24	)		444
(Gain) loss from sales and maturities of available-for-sale securities		(187	)		(93	)
Amortization of investment discount		1,479			(624	)
Amortization of deferred debt issuance costs		24			18
(Reversal of) allowance for doubtful accounts		(317	)		(17	)
Unrealized (gain) loss on exchange rate and fair value of foreign currency forward contracts		(825	)		942
Unrealized loss (gain) on fair value of interest rate swaps		—			1,672
Amortization of fair value at hedge inception of interest rate swaps		(1,009	)		(838	)
Share-based compensation		18,742			18,301
Deferred income tax		(382	)		1,335
Other non-cash expenses		(614	)		(559	)
Changes in operating assets and liabilities
Trade accounts receivable		(36,437	)		(23,136	)
Contract assets		(3,874	)		(3,966	)
Inventories		(43,497	)		3,404
Other current assets and non-current assets		(22,919	)		5,830
Trade accounts payable		25,589			(15,571	)
Contract liabilities		(147	)		(298	)
Income tax payable		911			1,056
Severance liabilities		2,204			2,266
Other current liabilities and non-current liabilities		3,731			5,712
Net cash provided by operating activities		75,157			104,448
Cash flows from investing activities
Purchase of short-term investments		(183,041	)		(123,980	)
Proceeds from sales of short-term investments		84,049			48,808
Proceeds from maturities of short-term investments		97,721			97,358
Funds provided to customer to support transfer of manufacturing operations		—			(24,310	)
Purchase of property, plant and equipment		(29,061	)		(27,482	)
Purchase of intangibles		(1,961	)		(797	)
Proceeds from disposal of property, plant and equipment		38			1,482
Net cash used in investing activities		(32,255	)		(28,921	)
Cash flows from financing activities
Payment of debt issuance costs		—			(153	)
Proceeds from long-term borrowings		—			60,938
Repayment of long-term borrowings		(9,141	)		(67,032	)
Repayment of finance lease liability		(100	)		(304	)
Repurchase of ordinary shares		(8,312	)		(20,722	)
Withholding tax related to net share settlement of restricted share units		(11,362	)		(4,727	)
Net cash used in financing activities		(28,915	)		(32,000	)
Net increase (decrease) in cash, cash equivalents and restricted cash		13,987			43,527
Movement in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at the beginning of period		232,832			188,241
Increase (decrease) in cash, cash equivalents and restricted cash		13,987			43,527
Effect of exchange rate on cash, cash equivalents and restricted cash		345			(228	)
Cash, cash equivalents and restricted cash at the end of period		247,164			231,540
Non-cash investing and financing activities
Construction, software and equipment-related payables	$	11,060		$	11,906

FABRINET

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Continued)

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows:

	As of
(amount in thousands)	March 26, 2021		March 27, 2020
Cash and cash equivalents	$	247,011	$	224,138
Restricted cash	153		7,402
Cash, cash equivalents and restricted cash	$	247,164	$	231,540

FABRINET
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

	Three Months Ended								Nine Months Ended
	March 26, 2021				March 27, 2020				March 26, 2021				March 27, 2020
(in thousands of U.S. dollars, except per share data)	Net income		Diluted EPS		Net income		Diluted EPS		Net income		Diluted EPS		Net income		Diluted EPS
GAAP measures	$	37,493	$	1.00	$	28,267	$	0.75	$	105,928	$	2.82	$	85,455	$	2.27
Items reconciling GAAP net income & EPS to non-GAAP net income & EPS:
Related to cost of revenues:
Share-based compensation expenses	1,388		0.04		1,489		0.04		4,805		0.13		4,800		0.13
Depreciation of fair value uplift	89		0.00		86		0.00		256		0.00		247		0.00
Total related to gross profit	1,477		0.04		1,575		0.04		5,061		0.13		5,047		0.13
Related to selling, general and administrative expenses:
Share-based compensation expenses	5,476		0.15		4,629		0.12		13,937		0.37		13,501		0.36
Amortization of intangibles	127		0.00		145		0.00		382		0.01		431		0.01
Severance payment	755		0.02		150		0.00		755		0.02		150		0.00
Total related to selling, general and administrative expenses	6,358		0.17		4,924		0.13		15,074		0.40		14,082		0.37
Related to other incomes and other expenses:
Other expenses in relation to reduction in workforce	43		0.00		—		—		43		0.00		16		0.00
Amortization of deferred debt issuance costs	8		0.00		8		0.00		24		0.00		18		0.00
Total related to other incomes and other expenses	51		—		8		—		67		—		34		—
Total related to net income & EPS	7,886		0.21		6,507		0.17		20,202		0.54		19,163		0.51
Non-GAAP measures	$	45,379	$	1.21	$	34,774	$	0.92	$	126,130	$	3.36	$	104,618	$	2.78
Shares used in computing diluted net income per share
GAAP diluted shares			37,609				37,797				37,514				37,696
Non-GAAP diluted shares			37,609				37,797				37,514				37,696

FABRINET
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

(amount in thousands)	Three Months Ended						Nine Months Ended
	March 26, 2021			March 27, 2020			March 26, 2021			March 27, 2020
Net cash provided by operating activities	$	33,843		$	51,838		$	75,157		$	104,448
Less: Purchase of property, plant and equipment		(6,368	)		(12,071	)		(29,061	)		(27,482	)
Non-GAAP free cash flow	$	27,475		$	39,767		$	46,096		$	76,966

FABRINET
GUIDANCE FOR QUARTER ENDING JUNE 25, 2021
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

	Diluted EPS
GAAP net income per diluted share:	$1.02 to $1.09
Related to cost of revenues:
Share-based compensation expenses	0.04
Total related to gross profit	0.04
Related to selling, general and administrative expenses:
Share-based compensation expenses	0.12
Total related to selling, general and administrative expenses	0.12
Total related to net income & EPS	0.16
Non-GAAP net income per diluted share	$1.18 to $1.25

View source version on businesswire.com: https://www.businesswire.com/news/home/20210503005709/en/

Investor Contact:

Garo Toomajanian

[email protected]

KEYWORDS: Asia Pacific Thailand

INDUSTRY KEYWORDS: Supply Chain Management Packaging Engineering Retail Automotive Manufacturing Manufacturing

MEDIA:

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May 3, 2021 4:18 pm

ION announces first quarter 2021 earnings and conference call schedule

HOUSTON, May 03, 2021 (GLOBE NEWSWIRE) — ION Geophysical Corporation (NYSE: IO) today announced that it will release its first quarter 2021 financial results on Wednesday, May 5, 2021 after the market closes. In conjunction with the release, ION has scheduled a conference call, which will be broadcast live over the Internet, on Thursday, May 6, 2021 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time).

	What:	ION First Quarter 2021 Earnings Conference Call
	When:	Thursday, May 6, 2021 – 10:00 a.m. Eastern Time
	How:	Live via phone – By dialing (833) 362-0195 and asking for the ION call a few minutes prior to the start time.
		Live over the Internet – by logging on to the webcast at the address below.
	Where:	https://ir.iongeo.com. The webcast, which will be accompanied by a slide presentation, can be accessed from the ION home page or by clicking on the link above.

For those who cannot listen to the live call, a telephonic replay will be available through May 13, 2021 and may be accessed by calling (855) 859-2056 using pass code 8154095. Also, an archive of the webcast will be available shortly after the call on the company’s website at https://ir.iongeo.com for approximately 12 months.

About ION

Leveraging innovative technologies, ION delivers powerful data-driven decision-making to offshore energy and maritime operations markets, enabling clients to optimize investments and results through access to our data, software and distinctive analytics. Learn more at iongeo.com.

Contacts

ION (Investor relations)

Executive Vice President and Chief Financial Officer
Mike Morrison, +1 281.879.3615
[email protected]

May 3, 2021 4:18 pm

Phillips 66 to host Annual Meeting of Shareholders

Phillips 66 to host Annual Meeting of Shareholders

HOUSTON–(BUSINESS WIRE)–
Phillips 66 (NYSE: PSX) will host its 2021 Annual Meeting of Shareholders on Wednesday, May 12, at 9 a.m. CDT in a virtual-only format via live webcast.

The meeting can be accessed at http://www.virtualshareholdermeeting.com/PSX2021 or the Phillips 66 Investors site at www.phillips66.com/investors under “Events and Presentations.”

Shareholders of record as of the close of business on March 17, 2021, can attend the virtual annual meeting by using the 16-digit control number included on the proxy card, voting instruction form or notice.

Shareholders who do not intend to vote or submit a question during the virtual meeting and other interested parties may access the meeting as guests.

Participants should allow 15 to 30 minutes before meeting time for check-in procedures. A replay of the webcast will be archived on the Investors site approximately 24 hours after the close of the meeting, and a transcript also will be available at a later date.

About Phillips 66

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Phillips 66 Partners, the company’s master limited partnership, is integral to the portfolio. Headquartered in Houston, the company has 14,200 employees committed to safety and operating excellence. Phillips 66 had $55 billion of assets as of March 31, 2021. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210503005682/en/

Jeff Dietert (investors)

832-765-2297

[email protected]

Shannon Holy (investors)

832-765-2297

[email protected]

Thaddeus Herrick (media)

855-841-2368

[email protected]

KEYWORDS: United States North America Texas

INDUSTRY KEYWORDS: Manufacturing Professional Services Other Transport Other Energy Transport Other Manufacturing Oil/Gas Logistics/Supply Chain Management Energy Finance Chemicals/Plastics

MEDIA:

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May 3, 2021 4:18 pm

Enstar Completes Transaction With AXA XL

HAMILTON, Bermuda, May 03, 2021 (GLOBE NEWSWIRE) — Enstar Group Limited (NASDAQ: ESGR) announced today that one of its wholly owned subsidiaries has completed a transaction with AXA XL, a division of AXA, to provide adverse development cover.

In the transaction, Enstar’s subsidiary assumed reinsurance losses incurred on or prior to December 31, 2019 on a diversified mix of global casualty and professional lines for a premium equal to the transfer of loss reserves of 90% of $1.550 billion (or $1.395 billion).

Enstar’s subsidiary is providing 90% protection (with AXA XL retaining 10%) on two layers, the first providing $1.550 billion of cover in excess of a $9.438 billion retention and the second providing an additional $1.0 billion of cover in excess above $11.363 billion.

Completion of the transaction followed receipt of regulatory approvals and satisfaction of various other closing conditions.

About Enstar

Enstar is a NASDAQ-listed leading global insurance group that offers innovative capital release solutions through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other international locations. A market leader in completing legacy acquisitions, Enstar has acquired over 100 companies and portfolios since its formation in 2001. For further information about Enstar, see www.enstargroup.com.

Cautionary Statement

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements regarding the intent, belief or current expectations of Enstar and its management team. Investors are cautioned that any such forward-looking statements speak only as of the date they are made, are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Important risk factors regarding Enstar can be found under the heading “Risk Factors” in our Form 10-K for the year ended December 31, 2020 and are incorporated herein by reference. Furthermore, Enstar undertakes no obligation to update any written or oral forward-looking statements or publicly announce any updates or revisions to any of the forward-looking statements contained herein, to reflect any change in its expectations with regard thereto or any change in events, conditions, circumstances or assumptions underlying such statements, except as required by law.

Contact: Group Communications
Telephone: +1 (441) 292-3645