Investor Presentaiton
Specified Financial Measures
Specified Financial Measures
GIBSON
ENERGY
This Presentation contains references to certain non-IFRS and non-U.S. GAAP financial measures and ratios and industry measures that are used by the Corporation and STLLC, respectively, as indicators of their financial performance. These measures include adjusted EBITDA, net debt, and distributable cash flow, and various ratios derived from such measures. Such measures and ratios are not
recognized under IFRS, with respect to the Corporation, or U.S. GAAP, with respect to STLLC, and do not have a standardized meaning under IFRS or U.S. GAAP, as applicable, and therefore may not be comparable to similar measures used by other companies. The Corporation believes presenting non-IFRS and non-U.S. GAAP financial measures helps readers to better understand how management
analyzes results, shows the impacts of specified items on the results of the reported periods, and allows readers to assess results without the specified items if they consider such items not to be reflective of the underlying performance of the company's operations.
Management considers these to be important supplemental measures of the Corporation's and STLLC's performance and believes these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in industries with similar capital structures. Readers are encouraged to evaluate each adjustment and the reasons the Corporation considers it
appropriate for supplemental analysis. Readers are cautioned, however, that these measures should not be construed as an alternative to net income, cash flow from operating activities, segment profit, gross profit or other measures of financial results determined in accordance with IFRS or U.S. GAAP, as applicable, as an indication of the performance of the Corporation or STLLC. For further details
on these measures, see the "Specified Financial Measures" section of the Corporation's MD&A, which is incorporated by reference herein and is available on our SEDAR profile at www.sedar.com and on our website at www.gibsonenergy.com.
The Corporation's historical financial information is prepared in accordance with IFRS and STLLC historical financial information is prepared in accordance with US GAAP. Historical financial results for STLLC have been converted from U.S dollars into Canadian dollars, using rates in effect for the respective periods.
Adjusted EBITDA, Distributable Cash Flow, Net Debt, Net Debt to Adjusted EBITDA, and Distributable Cash Flow Per Share and various supplementary financial measures are defined in the Q1 2023 MD&A and are reconciled to their most directly comparable financial measures under GAAP for the three months ended March 31, 2023. For all prior periods, these measures are reconciled to their most
directly comparable financial measures under GAAP for the respective year. All such reconciliations in respect of the Corporation are in the non-GAAP advisory section of the applicable MD&A, each of which are available on Gibson's SEDAR profile at www.sedar.com and each such reconciliation is incorporated by reference herein.
Transaction value to adjusted EBITDA, which is a non-IFRS ratio that the Corporation considers useful to investors as it demonstrates how much unlevered value the Transaction implies compared to adjusted EBITDA of STLLC. Transaction value to adjusted EBITDA is calculated as the Purchase Price divided by adjusted EBITDA of STLLC.
Adjusted EBITDA to Distributable Cash Flow ratio is a non-GAAP ratio, which is useful to investors as it demonstrates the earning power of the business relative to free cash flow available for distribution. Adjusted EBITDA to Distributable Cash Flow ratio is defined as Adjusted EBITDA divided by Distributable Cash Flow.
Infrastructure-only leverage, which is a non-IFRS ratio calculated as net debt divided by Infrastructure adjusted EBITDA. The Corporation, lenders, investors and analysts use this ratio to monitor the Infrastructure segment's impact on the Corporation's capital structure and financing requirements, while measuring its ability to cover debt obligations over time.
Forward adjusted EBITDA is a forward-looking non-GAAP measure, which is computed in a manner consistent with adjusted EBITDA, but requires the use of forward looking information. As such, forward adjusted EBITDA is subject to uncertainty. The Corporation believes it has used reasonable forecasts to determine forward adjusted EBITDA, but actual results may materially differ.
Reconciliation of non-GAAP financial measures
Adjusted EBITDA reconciliation to the nearest GAAP measure, Operating income for STLLC::
EXPANDING CORE TERMINALS FOOTPRINT
(US dollars in thousands)
Three months
ended March 31,
2023
Year ended
December 31,
2022
23,645
3,157
41
26,843
94,476
12,822
52
107,350
Last Twelve
Months ("LTM")
ended
March 31, 2023
95,463
12,809
93
108,365
Adjusted EBITDA to DCF is a non-U.S. GAAP ratio which the Corporation considers useful to investors as it demonstrates the earning power of STLLC's business relative to free cash flow available for distribution. Adjusted EBITDA to DCF ratio is defined as adjusted EBITDA divided by DCF.
Distributable cash flow reconciliation to the nearest GAAP measure, net cash provided by operating activities for STLLC:
Operating income
Depreciation and amortization
Other income
Adjusted EBITDA
17
11
Three months
ended March 31,
2023
Year ended
December 31,
2022
LTM ended
March 31, 2023
Net cash provided by operating activities
Changes in working capital
Current income tax
Distributable cash flow
24,519
2,147
110,201
(3,503)
(652)
106,046
106,832
879
(177)
26,489
(654)
107,057
DCF is used to assess the level of cash flow generated by STLLC and to evaluate the adequacy of generated cash flow to fund dividends and is frequently used by securities analysts, investors, and other interested parties. Changes in non-cash working capital are excluded from the determination of DCF because they are primarily the result of fluctuations in product inventories or other temporary
changes. Replacement capital expenditures and lease payments are deducted from DCF as there is an ongoing requirement to incur these types of expenditures.
(US dollars in thousands)View entire presentation