• Successful initial public offering (IPO)
• EBITDA of $13.2 million for the post-IPO period
• $12.6 million of distributable cash flow for post-IPO period
• Prorated quarterly cash distribution of $0.1548 per unit announced
HOUSTON, Oct. 30, 2013 – Phillips 66 Partners LP (NYSE: PSXP), a growth-oriented master limited partnership formed by Phillips 66, announces third-quarter earnings of $17.3 million. From the IPO closing on July 26, 2013, through Sept. 30, 2013, earnings were $11.9 million, or $0.17 per common limited partner unit. During the post-IPO period, the partnership generated earnings before interest, income taxes, depreciation and amortization (EBITDA) of $13.2 million and distributable cash flow of $12.6 million.
"We are pleased with the successful launch of Phillips 66 Partners,” said Chairman and CEO Greg Garland. “We are actively evaluating opportunities to grow the partnership through strategic acquisitions from Phillips 66 and third parties, as well as through organic development. With considerable financial flexibility and strong sponsorship from Phillips 66, the partnership is well positioned for significant growth.”
On July 23, 2013, Phillips 66 Partners' common units began trading on the New York Stock Exchange under the ticker symbol "PSXP." The partnership completed its IPO of 18,888,750 common units on July 26, 2013, at a price of $23.00 per unit. The public owns a 26.3 percent limited partner interest in Phillips 66 Partners, with Phillips 66 owning the remaining limited partner interest and the 2 percent general partner interest.
For the post-IPO period, transportation and terminaling services revenues were $21.1 million, consistent with the forecast provided in Phillips 66 Partners' final prospectus, dated July 22, 2013, as filed with the U.S. Securities and Exchange Commission. Total costs of $9.2 million and maintenance capital expenditures of $0.9 million for the post-IPO period were also in line with the forecast.
At the end of the quarter, Phillips 66 Partners had $421.6 million in cash and cash equivalents, including net IPO proceeds of $404.4 million, which the partnership retained primarily to fund future expansion capital expenditures and acquisitions. In addition, the partnership has a $250 million unused revolving credit facility, with the flexibility to expand it by up to an additional $250 million.
On Oct. 23, 2013, the board of directors declared a quarterly cash distribution of $0.1548 per unit, or $11.1 million. This distribution corresponds to the minimum quarterly distribution of $0.2125 per unit, or $0.85 per unit on an annualized basis, and is prorated for the partial quarter following the closing of the IPO.
Basis of Third-Quarter Results
Results of operations for the third quarter of 2013 include the results of Phillips 66 Partners' predecessor through July 25, 2013. Because results presented for periods prior to the IPO do not factor into distributable cash flow, this earnings release focuses on results of operations for the post-IPO period. A reconciliation of the post-IPO period to the full third-quarter 2013 results is provided in the tables attached to this release.
Later today, Phillips 66 Partners Chairman and Chief Executive Officer Greg Garland, President Tim Taylor, and Vice President and Chief Financial Officer Greg Maxwell will host a webcast at 3 p.m. EDT to discuss the partnership’s third-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
Phillips 66 Partners is a growth-oriented 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. Headquartered in Houston, the partnership’s assets include the Clifton Ridge crude oil pipeline, terminal and storage system in Louisiana; the Sweeny to Pasadena refined petroleum product pipeline, terminal and storage system in Texas; and the Hartford Connector refined petroleum product pipeline, terminal and storage system in Illinois. For more information, visit www.phillips66partners.com.
- # # # -
Alissa Hicks (media)
Andrea Baca (investors)
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 EBITDA and distributable cash flow. These are non-GAAP financial measures. 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 and distributable cash flow provide useful information to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and distributable cash flow are net income and net cash provided by operating activities. EBITDA and distributable cash flow should not be considered as alternatives to GAAP net income or net cash provided by operating activities. EBITDA and distributable cash flow have important limitations as analytical tools because they exclude some but not all items that affect net income and net cash provided by operating activities. EBITDA and distributable cash flow should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. Additionally, because EBITDA and distributable cash flow may be defined differently by other companies in our industry, our definition of 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.
Results of Operations