Shell Midstream Partners LP: Shell Midstream Partners, L.P. 2nd Quarter 2019 Unaudited Results

Tickers: SHLX
Exhibit 99.1

  • • The Partnership reported $115 million of net income attributable to the partnership, $133 million of net cash provided by operating activities, $187 million of adjusted EBITDA attributable to the partnership and $162 million of cash available for distribution.

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    • Second quarter distribution of $0.430 per common unit, up 3.6% from previous quarter, which supports the partnership's intent to deliver mid-teens annual distribution growth through 2019.

  • • Access to high quality midstream assets from our sponsor enables us to deliver on commitments as evidenced by the Colonial and Explorer acquisition completed in the quarter.

HOUSTON, August 1, 2019 - Shell Midstream Partners, L.P. (NYSE: SHLX), a growth-oriented master limited partnership formed by Royal Dutch Shell plc ("RDS"), reported net income attributable to the partnership of $115 million for the second quarter of 2019, which equated to $0.38 per common limited partner unit. Shell Midstream Partners also generated adjusted earnings before interest, income taxes, depreciation and amortization attributable to the partnership of $187 million.

Total cash available for distribution was $162 million, approximately $22 million higher than the prior quarter. The financial results of the quarter were largely driven by the increased distribution related to the Colonial and Explorer acquisition, which offset lower revenues related to the expiration of a contract on the Zydeco system and planned producer turnarounds in the Gulf of Mexico.

"I'm pleased with our second quarter performance, which was underpinned by our increased ownership in Colonial and Explorer - two of the premier refined products pipelines in the United States," said Kevin Nichols, CEO, Shell Midstream Partners, GP LLC. "Our diversified portfolio both onshore and offshore continues to deliver value to our customers and unitholders. In the offshore, I'm excited about the growth in the Gulf of Mexico - two new fields came online and two new projects were announced in the quarter. Given our strategic footprint and our extensive operating experience, we are well positioned to capture this future growth."

Offshore highlights for the quarter include an eight percent increase in volumes quarter over quarter, mainly driven by Appomattox coming online and flowing through Proteus and Endymion. In the onshore, the Zydeco open season concluded with a fully subscribed system - demonstrating the strategic nature of the asset in the Gulf Coast region.

The Board of Directors of the general partner previously declared a cash distribution of $0.430 per limited partner unit for the second quarter of 2019. This distribution represented an increase of 3.6% over the first quarter 2019 distribution and a 17.8% increase over the second quarter 2018 distribution. This represents the eighteenth consecutive quarter of distribution growth, and meets the Partnership's previously disclosed guidance of mid-teens annual distribution growth in 2019.

FINANCIAL HIGHLIGHTS

  • • Net income attributable to the partnership was $115 million, compared to $132 million for the prior quarter.

  • • Net cash provided by operating activities was $133 million, compared to $150 million for the prior quarter.

  • • Cash available for distribution was $162 million, compared to $140 million for the prior quarter, largely driven by increased distributions related to the Colonial and Explorer acquisition, which were partially offset by lower Zydeco revenues.

  • • Total cash distribution declared was $131 million, resulting in a coverage ratio of 1.2x.

  • • Adjusted EBITDA attributable to the partnership was $187 million, compared to $170 million for the prior quarter.

  • • As of June 30, 2019, the Partnership had $257 million of consolidated cash and cash equivalents on hand.

  • • As of June 30, 2019, the Partnership had total debt of $2.7 billion, equating to 3.6x Debt to annualized Q2 2019 Adjusted EBITDA. Current debt levels are well within our targeted range and provide full flexibility to continue to grow in line with guidance.

Cash available for distribution and Adjusted EBITDA are non-GAAP supplemental financial measures. See reconciliation to their most comparable GAAP measures later in this press release.

ASSET HIGHLIGHTS

Significant Onshore Pipeline Transportation:

◦ Zydeco - Mainline volumes were 635 kbpd in the current quarter, compared to 628 kbpd in the prior quarter. The increase in volumes was related to increased offshore volumes, partially offset by volumes related to a contract which expired in the second quarter of 2019.

Significant Offshore Pipeline Transportation:

  • ◦ Amberjack - Volumes were 359 kbpd in the current quarter, compared to 362 kbpd in the prior quarter. Lower volume related to an eight day planned producer turnaround. Continued growth is expected on the pipeline as new production ramps up.

  • ◦ Mars - Volumes were 569 kbpd compared to 556 kbpd in the prior quarter. The higher volumes were related to growth on Ursa, partially offset by planned producer turnarounds.

  • ◦ Auger - Volumes were 78 kbpd, lower than the prior quarter of 86 kbpd. We received $3 million in the second quarter of 2019 for business interruption recoveries associated with outages in 2018.

  • ◦ Eastern Corridor - Volumes were 433 kbpd compared to 470 kbpd in the prior quarter, largely due to planned producer turnarounds.

ABOUT SHELL MIDSTREAM PARTNERS, L.P.

Shell Midstream Partners, L.P., headquartered in Houston, Texas, is a growth-oriented master limited partnership formed by Royal Dutch Shell plc to own, operate, develop and acquire pipelines and other midstream assets. Shell Midstream Partners, L.P.'s assets include interests in entities that own crude oil and refined products pipelines and terminals that serve as key infrastructure to (i) transport onshore and offshore crude oil production to Gulf Coast and Midwest refining markets and (ii) deliver refined products from those markets to major demand centers. Our assets also include interests in entities that own natural gas and refinery gas pipelines that transport offshore natural gas to market hubs and deliver refinery gas from refineries and plants to chemical sites along the Gulf Coast.

For more information on Shell Midstream Partners and the assets owned by the partnership, please visitwww.shellmidstreampartners.com.

FORTHCOMING EVENTS

Shell Midstream Partners, L.P. will hold a webcast at 9:00am CT tomorrow to discuss the reported results and provide an update on partnership operations. Interested parties may listen to the conference call on Shell Midstream Partners, L.P.'s website at www.shellmidstreampartners.com by clicking on the "2019 Second-Quarter Financial Results Call" link, found under the "Events and Conferences" section. A replay of the conference call will be available following the live webcast.

Summarized Financial Statement Information

(in millions of dollars, except per unit data)

Revenue (1)

Costs and expenses Operations and maintenance Cost of product sold

June 30, 2019

March 31, 2019

$

121 $ 131

32 27

7 9

Loss from revision of asset retirement obligation - 2

General and administrative 17 12

Depreciation, amortization and accretion 12 12

Property and other taxes 5 4

Total costs and expenses 73 66

Operating income 48 65

Income from equity method investments 80 70

Dividend income from other investments - 14

Other income 12 8

Investment, dividend and other income 92 92

Interest expense, net 21 20

Income before income taxes 119 137

Income tax expense

Net income

Less: Net income attributable to noncontrolling interests Net income attributable to the Partnership

Less: General partner's interest in net income attributable to the Partnership

Limited Partners' interest in net income attributable to the Partnership

-

-

119 137

4 5

$

115 $ 132

30 27

$

85 $ 105

Net income per Limited Partner Unit - Basic and Diluted: Common

$

0.38 $ 0.47

Weighted average Limited Partner Units outstanding - Basic and Diluted:

Common units - public Common units - SPLC

123.8 123.8

102.6 100.0

(1) Deferred revenue for the three months ended June 30, 2019 and March 31, 2019, including the impact of overshipments and expiring credits, was $1 million and $10 million, respectively.

Reconciliation of Adjusted EBITDA and Cash Available for Distribution to Net Income

June 30, 2019

March 31, 2019

Net income Add:

$

119 $ 137

Loss from revision of asset retirement obligation - 2

Depreciation, amortization and accretion 12 12

Interest expense, net 21 20

Income tax expense

Cash distribution received from equity method investments Less:

Equity method distributions included in other income Income from equity method investments

Adjusted EBITDA

Less:

Adjusted EBITDA attributable to noncontrolling interests Adjusted EBITDA attributable to the Partnership

Less:

Net interest paid attributable to the Partnership (1) Income taxes paid attributable to the Partnership Maintenance capex attributable to the Partnership Add:

Net adjustments from volume deficiency payments attributable to the Partnership

Reimbursements from Parent included in partners' capital Cash available for distribution attributable to the Partnership

(1) Amount represents both paid and accrued interest attributable to the period.

See "Non-GAAP Financial Measures" later in this press release.

- 128

- 83

9 80 191

8 70 176

4 6

187 170

21 20

- 6

- 8

(1) (9)

3 7

$

162 $ 140

Reconciliation of Adjusted EBITDA and Cash Available for Distribution to Net Cash Provided by Operating Activities

For the Three Months EndedJune 30, 2019

March 31, 2019

Net cash provided by operating activities Add:

Interest expense, net Income tax expense Return of investment Less:

$

133 $ 150

21 20

- 39

- 8

Change in deferred revenue and other unearned income (3) (8)Change in other assets and liabilities Adjusted EBITDA

Less:

Adjusted EBITDA attributable to noncontrolling interests Adjusted EBITDA attributable to the Partnership

Less:

Net interest paid attributable to the Partnership (1)

Income taxes paid attributable to the Partnership Maintenance capex attributable to the Partnership Add:

Net adjustments from volume deficiency payments attributable to the Partnership

Reimbursements from Parent included in partners' capital Cash available for distribution attributable to the Partnership

(1) Amount represents both paid and accrued interest attributable to the period.

See "Non-GAAP Financial Measures" later in this press release.

5 10

191 176

4 6

187 170

21 20

- 6

- 8

(1) (9)

3 7

Disclaimer

Shell Midstream Partners LP published this content on 01 August 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 August 2019 21:00:11 UTC