Attached files
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EX-2.1 - EXHIBIT 2.1 - Sprague Resources LP | srlpapalebelcher1232017.htm |
EX-99.1 - EXHIBIT 99.1 - Sprague Resources LP | srlpbelcherpr01242017.htm |
8-K - FORM 8-K 1-24-2017 - Sprague Resources LP | form8-kxapa.htm |
1
Sprague Resources LP
L.E. Belcher, Inc. Transaction
January 24, 2017
2
Safe Harbor
Forward-Looking Statements: Some of the statements in this presentation may contain forward-looking statements within
the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,”
“plan,” “estimate,” “anticipate,” “believe,” “will,” “project,” “budget,” “potential,” or “continue,” and similar references to future
periods. However, the absence of these words does not mean that a statement is not forward looking. Descriptions of our
objectives, goals, plans, projections, estimates, anticipated capital expenditures, cost savings, strategy for customer retention
and strategy for risk management and other statements of future events or conditions are also forward looking statements.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies,
projections, anticipated events and trends, the economy and other future conditions. Our actual future results and financial
condition may differ materially from those indicated in the forward-looking statements. These forward-looking statements
involve risks and uncertainties and other factors that are difficult to predict and many of which are beyond management’s
control. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our
actual results and financial condition to differ materially from those indicated in the forward-looking statements include, but are
not limited to, increased competition for our products or services; changes in supply or demand for our products; changes in
operating conditions and costs; changes in the level of environmental remediation spending; potential equipment malfunction;
potential labor issues; the legislative or regulatory environment; terminal construction repair/delays; nonperformance by major
customers or suppliers; litigation, and political, economic and capital market conditions, including the impact of potential
terrorist acts and international hostilities. For a more detailed description of these and other risks and uncertainties, please
see the “Risk Factors” section in our most recent Annual Report on Form 10-K and/or most recent Form 10-Q, Form 8-K and
other items filed with the U.S. Securities and Exchange Commission and also available in the “Investor Relations” section of
our website www.spragueenergy.com.
Any forward-looking statement made by us in this presentation is based only on information currently available to us and
speaks only as of the date of this presentation. We undertake no obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time, whether as a result of new information, future developments or
otherwise.
3
Non-GAAP Financial Measures
Non-GAAP Financial Measures: To supplement the financial information presented in accordance with United States generally
accepted accounting principles (“GAAP”), Sprague’s management uses certain non-GAAP financial measurements to evaluate its results
of operations which include EBITDA, adjusted EBITDA, adjusted gross margin and distributable cash flow. Sprague believes that
investors benefit from having access to the same financial measures that are used by its management and that these measures are
useful to investors because they aid in comparing its operating performance with that of other companies with similar operations.
As EBITDA, adjusted EBITDA, adjusted gross margin and distributable cash flow are measures not prepared in accordance with GAAP
they should not be considered as alternatives to net income (loss), or operating income or any other measure of financial performance
presented in accordance with GAAP. Additionally, Sprague's calculations of non-GAAP measures may not be comparable to similarly
titled measures of other businesses because they may be defined differently by other companies.
You can find disclosures on our use of these non-GAAP measures, as well as reconciliations between GAAP and these non-GAAP
measures, in Sprague's "Non-GAAP Measures Quarterly Supplement" located in the Investor Relations section of Sprague’s website,
www.spragueenergy.com.
EBITDA
Sprague defines EBITDA as net income (loss) before interest, income taxes, depreciation and amortization. EBITDA is used as a
supplemental financial measure by external users of Sprague’s financial statements, such as investors, trade suppliers, research analysts
and commercial banks to assess:
• The financial performance of Sprague’s assets, operations and return on capital without regard to financing methods, capital structure
or historical cost basis;
• The ability of our assets to generate sufficient revenue, that when rendered to cash, will be available to pay interest on our
indebtedness and make distributions to our equity holders;
• Repeatable operating performance that is not distorted by non-recurring items or market volatility; and
• The viability of acquisitions and capital expenditure projects.
4
L.E. Belcher Transaction Details Terms
• On 1/24/2017, Sprague Resources LP (NYSE: SRLP) announced that its operating subsidiary, Sprague Operating
Resources LLC, entered an agreement to purchase the Springfield, MA refined product terminal assets and associated
wholesale/commercial fuels businesses of Leonard E. Belcher, Incorporated.
• Purchase price of $20 million in cash, to be funded with cash on hand and credit facility borrowings
• Closing expected in the first quarter of 2017
Asset overview
• Two distillate terminals and one distillate storage facility in Springfield, MA with 295,000 barrels of combined capacity
• Largest distillate storage capacity in key I-91 corridor market
• Pipeline supplied terminals from New Haven harbor, offering opportunity to leverage Sprague’s logistics expertise
• Wholesale and commercial businesses will extend and strengthen Sprague brand in core Northeast market through
proprietary distillate marketing opportunities
• Assets and associated businesses expected to generate approximately $3 to $4 million in adjusted EBITDA annually
L.E. Belcher Terminal - Refined Products
5
L.E. Belcher Extends Sprague Inland
L.E. Belcher Assets
• 295,000 barrels of distillate storage in Springfield, MA
• Strongest distillate terminal position in western MA
market
• Supplied via pipeline from deep water New Haven, CT
• Wholesale/Commercial fuels business deepens
Sprague presence in core New England market