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Exhibit 99.2
CORNERSTONE PROPANE
NYSE SYMBOL - CNO
IMMEDIATE RELEASE CONTACT:
RICHARD D. NYE
JANUARY 18, 2002 (831) 724-1921
CORNERSTONE PROPANE TO PURSUE STRATEGIC OPTIONS
QUARTERLY DISTRIBUTIONS ELIMINATED AS RESULT OF CREDIT AGREEMENT AMENDMENT
WATSONVILLE, CALIF. - CornerStone Propane Partners, L.P. (NYSE: CNO),
("CornerStone" or the "Partnership"), today announced that it has retained
Credit Suisse First Boston Corporation to pursue strategic options, including
the possible sale or merger of the Partnership.
In addition, CornerStone reported that unprecedented mild winter weather during
its fiscal second quarter, ended Dec. 31, 2001, will negatively impact the
Partnership's results to be announced on Feb. 7, 2002. According to the National
Climatic Data Center, the period between October and December of 2001 was the
second warmest in the last 107 years on record in the United States.
As a result of its financial performance in the December quarter, CornerStone
determined that it would not likely be in compliance with certain covenants of
its $50 million working capital facility credit agreement. Subsequent
discussions with the lenders of this facility have led to an amendment to the
credit agreement that continues access to funding under the facility which
matures on Nov. 28, 2002. However, the credit agreement amendment eliminates the
ability of CornerStone to make further quarterly distributions during the term
of the facility. Pursuant to the Partnership Agreement, the suspension of
distributions under the defined Minimum Quarterly Distribution will be subject
to arrearage privileges, so that no distribution will be made to the
subordinated unitholders until the arrearages have been paid to the common
unitholders. CornerStone Propane Partners, L.P. has approximately 17.3 million
common units outstanding.
"Following a detailed review of CornerStone's operating plan and capital
structure, and in light of the Partnership's credit position, the General
Partner's Board of Directors has determined that it is in the best interest of
the Partnership's unitholders to consider strategic opportunities, including a
possible sale or merger of the Partnership," said Keith G. Baxter, CornerStone's
President and CEO.
NorthWestern's (NYSE:NOR) Chairman and CEO Merle Lewis added that "NorthWestern
is fully supportive of today's action taken by CNO's Board of Directors of
seeking strategic options, including the possible sale or merger of the
Partnership. In light of this action and the resulting potential disposition of
our investment in the Partnership, we will re-evaluate the characterization and
valuation of our investment and will be in a position to discuss potential
changes during our Feb. 7 year-end earnings
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call." NorthWestern represents the largest unitholder of CNO and owns all the
stock of the managing general partner.
The Board of Directors of the General Partner has formed a special committee of
the Board composed of directors that are not officers of CornerStone's affiliate
and subordinated unitholder, NorthWestern Corporation. It will be the function
of the special committee to advise the Board of Directors with respect to any
conflicts of interests with NorthWestern that may arise in any consideration of
strategic opportunities for CornerStone presented to the Board of Directors.
CornerStone continues to narrow the focus of its Coast Energy Group (CEG) unit
to concentrate exclusively on Natural Gas Liquids in support of the core retail
propane operations, wholesale distribution and logistics operations. As a
result, the Partnership will likely take significant non-recurring charges,
mostly non-cash, related to the disposal of assets and exit of certain
businesses within CEG. These businesses were not expected to have a material
contribution to the future earnings of the partnership. In addition, CornerStone
will continue to analyze the impact of Financial Accounting Standard 142
(Goodwill and other Intangible Assets) for goodwill impairment across the
businesses to be reported in the financial results for the quarter ending Dec.
31, 2001.
Cornerstone Propane Partners, L.P. is a master limited partnership. The
Partnership is one of the nation's largest retail propane marketers, serving
approximately 470,000 customers in more than 30 states. Through its North
American energy solutions service team, Coast Energy Group, the Partnership also
supplies, purchases, processes and markets natural gas liquids. For more
information, please visit our website at WWW.CORNERSTONEPROPANE.COM.
THE INFORMATION PRESENTED HEREIN CONTAINS "FORWARD-LOOKING STATEMENTS" BASED ON
CURRENT EXPECTATIONS, FORECASTS AND ASSUMPTIONS THAT INVOLVE RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL OUTCOMES AND RESULTS TO DIFFER MATERIALLY.
CASH DISTRIBUTIONS ON THE PARTNERSHIP'S COMMON UNITS ARE NOT GUARANTEED AND
DISTRIBUTABLE CASH WILL DEPEND ON THE PARTNERSHIP'S DEBT COVENANTS, DEBT SERVICE
REQUIREMENTS, FUTURE OPERATING PERFORMANCE, CAPITAL EXPENDITURE NEEDS, ACCESS TO
FINANCING AND PREVAILING ECONOMIC, FINANCIAL, BUSINESS, WEATHER AND OTHER
FACTORS, CERTAIN OF WHICH ARE BEYOND ITS CONTROL. THERE CAN BE NO ASSURANCES
THAT ANY STRATEGIC TRANSACTION WILL BE REACHED FROM THESE OR FUTURE DISCUSSIONS
OR THAT ANY SUCH TRANSACTION WILL BE CONSUMMATED. ANY SUCH TRANSACTION WOULD BE
SUBJECT TO A NUMBER OF CONDITIONS, INCLUDING, AMONG OTHER THINGS, THE APPROVAL
OF THE GENERAL PARTNER, ENTERING INTO DEFINITIVE DOCUMENTATION, CONSENT OF THE
PARTNERSHIP'S LENDERS, HART-SCOTT-RODINO ANTITRUST CLEARANCE, AND DEPENDING ON
THE FORM OF THE TRANSACTION, APPROVAL OF THE PARTNERSHIP'S COMMON UNITHOLDERS.
FOR A DISCUSSION OF THE RISK FACTORS, FUTURE PERFORMANCE AND LIQUIDITY, SEE
"FORWARD-LOOKING STATEMENTS" IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED JUNE 30, 2001, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE
PARTNERSHIP UNDERTAKES NO OBLIGATION TO PUBLICLY RELEASE ANY REVISION TO THESE
FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE OF
SUCH STATEMENTS OR TO REFLECT THE OCCURRENCE OF ANTICIPATED OR UNANTICIPATED
EVENTS.
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