Phillips 66 Partners Reports Second-Quarter Earnings
Distributable cash flow of $34.3 million
EBITDA of $37.6 million
Increased quarterly distribution by 10 percent to $0.3017 per unit
Reported net income of $32.1 million
HOUSTON, July 30, 2014 - Phillips 66 Partners LP (NYSE: PSXP) announces second-quarter 2014 earnings of $32.1 million, or $0.41 per common limited partner unit. Earnings before interest, income taxes, depreciation and amortization (EBITDA) were $37.6 million in the second quarter, and distributable cash flow was $34.3 million, both up significantly from previous quarters' results.
"We operated well and achieved strong financial results in the second quarter, enabling us to increase the partnership's distribution," said Greg Garland, Phillips 66 Partners chairman and CEO. "We continue to pursue additional investments, including organic development opportunities, to deliver top-quartile distribution growth."
Total revenues for the second quarter were $56.9 million, approximately 96 percent of which were derived from fee-based contracts with Phillips 66 and its affiliates. Revenues include a full quarter's results from the Gold Line products system, as well as the newly constructed Medford spheres. These acquisitions contributed to the partnership's fee-based revenue growth.
Total costs were $24.6 million in the second quarter, and include $1.3 million of interest expense primarily associated with the note payable to Phillips 66 assumed on March 1, 2014, as part of the consideration paid for the acquisition of the Gold Line products system and Medford spheres.
On July 23, 2014, the board of directors of the general partner declared a quarterly cash distribution of $0.3017 per limited partner unit. This distribution represents a 10 percent increase over the first-quarter 2014 distribution of $0.2743 per unit and is 42 percent above the partnership's minimum quarterly distribution.
Phillips 66 Partners has access to an unused $250 million revolving credit facility, which can be expanded by up to an additional $250 million, available primarily to fund future expansion capital expenditures and acquisitions. As of June 30, 2014, the partnership had $34.5 million in cash and cash equivalents.
Phillips 66 Partners President Tim Taylor; Vice President and Chief Financial Officer Greg Maxwell; Senior Vice President, Operations Bob Herman; and Vice President and Chief Operating Officer Tom Liberti will host a webcast today at 2 p.m. EDT to discuss the partnership's second-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 http://www.phillips66partners.com
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Rich Johnson (media)
William Steen (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 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.
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"). The results of the acquired assets prior to the acquisition are referred to as "predecessor" results in the tables below. Differences in revenues and expenses for the periods prior to and after the acquisition are detailed in the "Factors Affecting the Comparability of Our Financial Results" in Exhibit 99.2-Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 23, 2014.