Attached files
| file | filename |
|---|---|
| 8-K - 8-K - PHILLIPS 66 PARTNERS LP | mlp-2014331_earningsreleas.htm |
| EX-99.2 - EXHIBIT 99.2 - PHILLIPS 66 PARTNERS LP | mlp-2014331_erxsupplementa.htm |
Exhibit 99.1 | ||||
Phillips 66 Partners Reports
First-Quarter Earnings
Highlights
• | Acquired Gold Line System and Medford Spheres for $700 million |
• | Generated $23.3 million of distributable cash flow and $21.5 million of adjusted EBITDA |
• | Increased quarterly distribution by 22 percent to $0.2743 per unit |
• | Reported net income of $28.0 million and adjusted earnings of $18.3 million |
HOUSTON, April 30, 2014 – Phillips 66 Partners LP (NYSE: PSXP) announces first-quarter adjusted earnings of $18.3 million, which includes one month's financial results of the Gold Line products system and Medford Spheres (collectively referred to as the "acquired assets"). Including the results of the acquired assets prior to their acquisition on March 1, 2014 ("predecessor results"), the partnership's net income was $28.0 million.
Distributable cash flow, including one month's results of the acquired assets, was $23.3 million, a 31 percent increase compared with the fourth quarter of 2013. Excluding predecessor results, adjusted EBITDA for first-quarter 2014 was $21.5 million.
“Our commitment to growing the partnership was demonstrated by our successful completion of a significant post-IPO acquisition,” said Greg Garland, Phillips 66 Partners chairman and CEO. “We increased our distribution by 22 percent this quarter and are pursuing additional investment opportunities to deliver top-quartile distribution growth.”
Financial Results
Excluding predecessor results, total adjusted revenues for the first quarter were $36.0 million, up $6.0 million from the fourth quarter of 2013. The increase primarily resulted from one month of post-acquisition revenues from the acquired assets, partially offset by lower pipeline throughput and terminal volumes on the Sweeny to Pasadena products system due to maintenance activities at Phillips 66's Sweeny Refinery. Including predecessor results, total reported revenues were $51.9 million in the first quarter of 2014.
Excluding predecessor results, total adjusted costs were $17.4 million, up $4.5 million from the fourth quarter of last year. The increase was primarily driven by post-acquisition costs from the acquired assets, as well as transaction costs associated with the acquisition. The increase also reflects interest expense associated with a 5-year, $160 million note payable to Phillips 66 the partnership assumed as part of the acquisition. Including predecessor results, total reported costs were $23.6 million in the first quarter of 2014.
Page 1
Phillips 66 Partners Reports First Quarter Earnings
On April 23, 2014, the board of directors of our general partner declared a quarterly cash distribution of $0.2743 per limited partner unit. This distribution represents a 22 percent increase over the previous quarterly distribution of $0.2248 per unit, and is 29 percent above the partnership's minimum quarterly distribution of $0.2125 per unit. Together with the general partner distributions, the total distribution will be $21.1 million.
As of March 31, 2014, Phillips 66 Partners had $21.1 million in cash and cash equivalents. The partnership also has a $250 million unused revolving credit facility, which may be expanded by up to an additional $250 million. At the end of the first quarter, the public owned a 25 percent limited partner interest in Phillips 66 Partners, and Phillips 66 owned the remaining 73 percent limited partner interest and the 2 percent general partner interest.
Investor Webcast
Phillips 66 Partners President Tim Taylor; Vice President and Chief Financial Officer Greg Maxwell; and Chief Operating Officer Tom Liberti, will host a webcast today at 2 p.m. EDT to discuss the partnership’s first-quarter performance. To listen to the conference call and view related presentation materials, go to www.phillips66partners.com/events. For detailed supplemental information, go to www.phillips66partners.com/reports.
About Phillips 66 Partners
Headquartered in Houston, Phillips 66 Partners is a growth-oriented traditional master limited partnership formed by Phillips 66 to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum product and natural gas liquids pipelines and terminals and other transportation and midstream assets. For more information, visit www.phillips66partners.com.
- # # # -
CONTACTS
Rich Johnson (media)
832-765-1016
832-765-1016
rich.johnson@p66.com
William Steen (investors)
832-765-3174
832-765-3174
william.steen@p66.com
Page 2
Phillips 66 Partners Reports First Quarter Earnings
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This news release includes forward-looking statements. Words and phrases such as “is anticipated,” “is estimated,” “is expected,” “is planned,” “is scheduled,” “is targeted,” “believes,” “intends,” “objectives,” “projects,” “strategies” and similar expressions are used to identify such forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements relating to Phillips 66 Partners’ operations are based on management’s expectations, estimates and projections about the partnership, its interests and the energy industry in general on the date this news release was prepared. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include the continued ability of Phillips 66 to satisfy its obligations under our commercial and other agreements; the volume of crude oil and refined petroleum products we transport; the tariff rates with respect to volumes that we transport through our regulated assets, which rates are subject to review and possible adjustment by federal and state regulators; fluctuations in the prices for crude oil and refined petroleum products; liabilities associated with the risks and operational hazards inherent in transporting, terminaling and storing crude oil and refined petroleum products; potential liability from litigation or for remedial actions, including removal and reclamation obligations under environmental regulations; and other economic, business, competitive and/or regulatory factors affecting Phillips 66 Partners’ businesses generally as set forth in our filings with the Securities and Exchange Commission. Phillips 66 Partners is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
Use of Non-GAAP Financial Information—This news release includes the terms adjusted earnings, EBITDA, adjusted EBITDA, distributable cash flow, adjusted revenues and adjusted costs. These are non-GAAP financial measures. EBITDA, adjusted EBITDA and distributable cash flow are included to help facilitate comparisons of operating performance of the partnership with other companies in our industry, as well as help facilitate an assessment of our assets’ ability to generate sufficient cash flow to make distributions to our partners. We believe that the presentation of EBITDA, adjusted EBITDA and distributable cash flow provides useful information to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA, adjusted EBITDA and distributable cash flow are net income and net cash provided by operating activities. We also include the revenues, costs and results of our operations excluding predecessor results. We believe that excluding predecessor results provides useful information to investors in assessing the results of operations most directly attributable to our common unitholders. These non-GAAP measures should not be considered as alternatives to GAAP revenues, costs and expenses, net income or net cash provided by operating activities. They have important limitations as analytical tools because they exclude some but not all items that affect revenues, costs and expenses, net income and net cash provided by operating activities. They should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. Additionally, because EBITDA, adjusted EBITDA and distributable cash flow may be defined differently by other companies in our industry, our definition of EBITDA, adjusted EBITDA and distributable cash flow may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
References in the release to earnings refer to net income. References to EBITDA refer to earnings before interest, income taxes, depreciation and amortization.
Page 3
Phillips 66 Partners Reports First Quarter Earnings
Results of Operations (Unaudited)
Factors Affecting Comparability
Effective March 1, 2014, we acquired the Gold Line products system and the Medford Spheres (collectively referred to as the "acquired assets") from Phillips 66 (the "acquisition"). Because this was a transfer among entities under common control, all historical financial results of the acquired assets prior to its acquisition have been included in our financial results. Prior year information has been recast to reflect this required accounting treatment. To assist the reader, we have provided additional information that is comparable on a period-to-period basis, which focuses on the results of operations of our assets following the acquisition. In addition, reconciliations of our full first-quarter 2014 and fourth-quarter 2013 results are provided in the information below.
We refer to the historical results of the acquired assets collectively as the "Acquired Assets Predecessor." Differences in revenues and expenses for the periods prior to and after the acquisition are similar to the differences in the periods prior to and after the initial public offering detailed in the "Factors Affecting the Comparability of Our Financial Results" in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the 2013 Annual Report on Form 10-K filed with the SEC on Feb. 21, 2014.
Summarized Financial Statement Information | |||||||||
Millions of Dollars Except as Indicated | |||||||||
Q1 2014 | Q4 2013 | ||||||||
Selected Income Statement Data | |||||||||
Revenues | $ | 51.9 | $ | 49.1 | |||||
Net income | 28.0 | 25.2 | |||||||
Adjusted earnings* | 18.3 | 17.0 | |||||||
Adjusted EBITDA* | 21.5 | 18.8 | |||||||
Distributable cash flow | 23.3 | 17.8 | |||||||
*Excludes predecessor results of the acquired assets. | |||||||||
Net Income Attributable to the Partnership Per Limited Partner Unit—Basic and Diluted (dollars) | |||||||||
Common units | $ | 0.25 | $ | 0.24 | |||||
Subordinated units—Phillips 66 | 0.24 | 0.24 | |||||||
Selected Balance Sheet Data | |||||||||
Cash and cash equivalents | $ | 21.1 | $ | 425.1 | |||||
Total assets | 332.4 | 721.4 | |||||||
Total debt | 160.0 | — | |||||||
Total Equity/Net Investment | |||||||||
Net Investment | $ | — | $ | 125.4 | |||||
Equity held by public | |||||||||
Common units | 409.2 | 409.1 | |||||||
Equity held by Phillips 66 | |||||||||
Common units | 49.7 | 48.6 | |||||||
Subordinated units | 105.3 | 104.9 | |||||||
General partner | (409.4 | ) | 11.5 | ||||||
Total Equity | $ | 154.8 | $ | 699.5 | |||||
Page 4
Phillips 66 Partners Reports First Quarter Earnings
Statement of Income—Reconciliation of Predecessor and Partnership | |||||||||||
Millions of Dollars | |||||||||||
Q1 2014 | |||||||||||
Phillips 66 Partners LP | Acquired Assets Predecessor | Consolidated | |||||||||
Revenues | |||||||||||
Transportation and terminaling services—related parties | $ | 35.3 | $ | 15.2 | $ | 50.5 | |||||
Transportation and terminaling services—third parties | 0.6 | 0.7 | 1.3 | ||||||||
Other income | 0.1 | — | 0.1 | ||||||||
Total revenues | $ | 36.0 | $ | 15.9 | $ | 51.9 | |||||
Costs and Expenses | |||||||||||
Operating and maintenance expenses | $ | 8.3 | $ | 3.3 | $ | 11.6 | |||||
Depreciation | 2.4 | 1.2 | 3.6 | ||||||||
General and administrative expenses | 5.6 | 1.1 | 6.7 | ||||||||
Taxes other than income taxes | 0.6 | 0.6 | 1.2 | ||||||||
Interest and debt expense | 0.5 | — | 0.5 | ||||||||
Total costs and expenses | $ | 17.4 | $ | 6.2 | $ | 23.6 | |||||
Income before income taxes | 18.6 | 9.7 | 28.3 | ||||||||
Provision for income taxes | 0.3 | — | 0.3 | ||||||||
Net Income | $ | 18.3 | $ | 9.7 | $ | 28.0 | |||||
Millions of Dollars | |||||||||||
Q4 2013 | |||||||||||
Phillips 66 Partners LP | Acquired Assets Predecessor | Consolidated | |||||||||
Revenues | |||||||||||
Transportation and terminaling services—related parties | $ | 29.8 | $ | 18.0 | $ | 47.8 | |||||
Transportation and terminaling services—third parties | 0.1 | 1.1 | 1.2 | ||||||||
Other income | 0.1 | — | 0.1 | ||||||||
Total revenues | $ | 30.0 | $ | 19.1 | $ | 49.1 | |||||
Costs and Expenses | |||||||||||
Operating and maintenance expenses | $ | 7.7 | $ | 5.1 | $ | 12.8 | |||||
Depreciation | 1.5 | 2.8 | 4.3 | ||||||||
General and administrative expenses | 3.1 | 2.2 | 5.3 | ||||||||
Taxes other than income taxes | 0.4 | 0.8 | 1.2 | ||||||||
Interest and debt expense | 0.2 | — | 0.2 | ||||||||
Total costs and expenses | $ | 12.9 | $ | 10.9 | $ | 23.8 | |||||
Income before income taxes | 17.1 | 8.2 | 25.3 | ||||||||
Provision for income taxes | 0.1 | — | 0.1 | ||||||||
Net Income | $ | 17.0 | $ | 8.2 | $ | 25.2 | |||||
Page 5
Phillips 66 Partners Reports First Quarter Earnings
Selected Operating Data | ||||||||
Thousands of Barrels Daily | ||||||||
Q1 2014 | ||||||||
Phillips 66 Partners LP | Acquired Assets Predecessor | Consolidated | ||||||
Pipeline, Terminal and Storage Volumes | ||||||||
Pipelines* | ||||||||
Crude oil throughput | 259 | — | 259 | |||||
Refined product throughput | 373 | 158 | 418 | |||||
Total | 632 | 158 | 677 | |||||
Terminals | ||||||||
Crude Oil | ||||||||
Storage volumes | 212 | — | 212 | |||||
Terminaling throughput | 198 | — | 198 | |||||
Refined Products | ||||||||
Terminaling throughput | 434 | 155 | 429 | |||||
Total | 844 | 155 | 839 | |||||
* Represents the sum of volumes transported through each separately tariffed pipeline segment. | ||||||||
Revenue per Barrel ($/BBL) | ||||||||
Average pipeline revenue | 0.39 | 1.17 | 0.51 | |||||
Average terminaling and storage revenue | 0.24 | 0.55 | 0.27 | |||||
Thousands of Barrels Daily | ||||||||
Q4 2013 | ||||||||
Phillips 66 Partners LP | Acquired Assets Predecessor | Consolidated | ||||||
Pipeline, Terminal and Storage Volumes | ||||||||
Pipelines* | ||||||||
Crude oil throughput | 244 | — | 244 | |||||
Refined product throughput | 315 | 133 | 448 | |||||
Total | 559 | 133 | 692 | |||||
Terminals | ||||||||
Crude Oil | ||||||||
Storage volumes | 207 | — | 207 | |||||
Terminaling throughput | 199 | — | 199 | |||||
Refined Products | ||||||||
Terminaling throughput | 272 | 161 | 433 | |||||
Total | 678 | 161 | 839 | |||||
* Represents the sum of volumes transported through each separately tariffed pipeline segment. | ||||||||
Revenue per Barrel ($/BBL) | ||||||||
Average pipeline revenue | 0.33 | 1.22 | 0.51 | |||||
Average terminaling and storage revenue | 0.21 | 0.30 | 0.22 | |||||
Page 6
Phillips 66 Partners Reports First Quarter Earnings
Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Income | ||||||||||||||
Millions of Dollars | ||||||||||||||
Q1 2014 | ||||||||||||||
Phillips 66 Partners LP | Acquired Assets Predecessor | Consolidated | ||||||||||||
Reconciliation to Net Income | ||||||||||||||
Net Income | $ | 18.3 | $ | 9.7 | $ | 28.0 | ||||||||
Plus: | ||||||||||||||
Depreciation | 2.4 | 1.2 | 3.6 | |||||||||||
Net interest expense | 0.4 | — | 0.4 | |||||||||||
Amortization of deferred rentals | 0.1 | — | 0.1 | |||||||||||
Provision for income taxes | 0.3 | — | 0.3 | |||||||||||
EBITDA | $ | 21.5 | $ | 10.9 | $ | 32.4 | ||||||||
Less: | ||||||||||||||
EBITDA attributable to predecessor | — | 10.9 | 10.9 | |||||||||||
Adjusted EBITDA | $ | 21.5 | $ | — | $ | 21.5 | ||||||||
Plus: | ||||||||||||||
Adjustments related to minimum volume commitments | 2.3 | ** | 2.3 | |||||||||||
Phillips 66 prefunded projects and indemnities | 1.5 | ** | 1.5 | |||||||||||
Transaction costs associated with the acquisition | 1.5 | ** | 1.5 | |||||||||||
Less: | ||||||||||||||
Net interest paid | — | ** | — | |||||||||||
Income taxes paid | — | ** | — | |||||||||||
Maintenance capital expenditures | 3.5 | ** | 3.5 | |||||||||||
Distributable Cash Flow | $ | 23.3 | ** | $ | 23.3 | |||||||||
** Information is not applicable for the predecessor results of the acquired assets.
Page 7
Phillips 66 Partners Reports First Quarter Earnings
Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Income | ||||||||||||||
Millions of Dollars | ||||||||||||||
Q4 2013 | ||||||||||||||
Phillips 66 Partners LP | Acquired Assets Predecessor | Consolidated | ||||||||||||
Reconciliation to Net Income | ||||||||||||||
Net Income | $ | 17.0 | $ | 8.2 | $ | 25.2 | ||||||||
Plus: | ||||||||||||||
Depreciation | 1.5 | 2.8 | 4.3 | |||||||||||
Net interest expense | 0.1 | — | 0.1 | |||||||||||
Amortization of deferred rentals | 0.1 | — | 0.1 | |||||||||||
Provision for income taxes | 0.1 | — | 0.1 | |||||||||||
EBITDA | $ | 18.8 | $ | 11.0 | $ | 29.8 | ||||||||
Less: | ||||||||||||||
EBITDA attributable to predecessor | — | 11.0 | 11.0 | |||||||||||
Adjusted EBITDA | $ | 18.8 | $ | — | $ | 18.8 | ||||||||
Plus: | ||||||||||||||
Adjustments related to minimum volume commitments | (0.1 | ) | ** | (0.1 | ) | |||||||||
Phillips 66 prefunded projects | 0.5 | ** | 0.5 | |||||||||||
Transaction costs associated with the acquisition | 0.4 | ** | 0.4 | |||||||||||
Less: | ||||||||||||||
Net interest paid | — | ** | — | |||||||||||
Income taxes paid | — | ** | — | |||||||||||
Maintenance capital expenditures | 1.8 | ** | 1.8 | |||||||||||
Distributable Cash Flow | $ | 17.8 | ** | $ | 17.8 | |||||||||
** Information is not applicable for the predecessor results of the acquired assets.
Page 8
Phillips 66 Partners Reports First Quarter Earnings
Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Cash Provided by Operating Activities | |||||||||
Millions of Dollars | |||||||||
Q1 2014 | Q4 2013 | ||||||||
Reconciliation to Net Cash from Operating Activities | |||||||||
Net cash from operating activities | $ | 25.4 | $ | 27.5 | |||||
Plus: | |||||||||
Net interest expense | 0.4 | 0.1 | |||||||
Provision for income taxes | 0.3 | 0.1 | |||||||
Changes in working capital | 6.4 | 1.4 | |||||||
Accrued environmental costs | — | 0.7 | |||||||
Other | (0.1 | ) | — | ||||||
EBITDA | $ | 32.4 | $ | 29.8 | |||||
Less: | |||||||||
EBITDA attributable to predecessor | 10.9 | 11.0 | |||||||
Adjusted EBITDA | $ | 21.5 | $ | 18.8 | |||||
Plus: | |||||||||
Adjustments related to minimum volume commitments | 2.3 | (0.1 | ) | ||||||
Phillips 66 prefunded projects and indemnities | 1.5 | 0.5 | |||||||
Transaction costs associated with the acquisition | 1.5 | 0.4 | |||||||
Less: | |||||||||
Net interest paid | — | — | |||||||
Income taxes paid | — | — | |||||||
Maintenance capital expenditures | 3.5 | 1.8 | |||||||
Distributable Cash Flow | $ | 23.3 | $ | 17.8 | |||||
Page 9