- Reported a first-quarter loss of $18 million and adjusted
EBITDA of $289 million
- Announced quarterly distribution of $0.875 per common unit
- Reached agreement to exit the Liberty Pipeline joint
venture
- South Texas Gateway Terminal commissioned additional storage,
completing the project
- Progressed C2G Pipeline construction
Phillips 66 Partners LP (NYSE: PSXP) announces a first-quarter
2021 loss of $18 million, or $0.13 per diluted common unit. Cash
from operations was $227 million, and distributable cash flow was
$233 million. Adjusted EBITDA was $289 million in the first
quarter, compared with $318 million in the prior quarter.
“Our first-quarter results reflect winter storm impacts and our
decision to exit the Liberty Pipeline project,” said Greg Garland,
Phillips 66 Partners Chairman and CEO. “We operated our assets
safely despite the weather-related challenges. The South Texas
Gateway Terminal commissioned additional storage, and we are
nearing completion of the C2G Pipeline construction. We remain
focused on operating excellence, a strong balance sheet and
disciplined capital allocation.”
On April 20, 2021, the general partner’s board of directors
declared a first-quarter 2021 cash distribution of $0.875 per
common unit, or $3.50 per unit on an annualized basis.
Financial Results
Phillips 66 Partners’ first-quarter 2021 loss was $18 million,
compared with earnings of $104 million in the fourth quarter. The
decrease was mainly due to a $198 million impairment in the first
quarter of 2021 resulting from the Partnership’s decision to exit
the Liberty Pipeline project, compared with impairments of $96
million in the fourth quarter of 2020. The Partnership reported
adjusted EBITDA of $289 million in the first quarter, compared with
$318 million in the prior quarter. The decrease in adjusted EBITDA
was primarily due to reduced volumes and higher utility costs at
the Partnership’s wholly owned and joint venture assets, largely
due to the severe winter storms impacting the Central and Gulf
Coast regions in the first quarter of 2021.
Liquidity, Capital Expenditures and Investments
As of March 31, 2021, total debt outstanding was $3.9 billion.
The Partnership had $3 million in cash and cash equivalents and
$299 million available under its revolving credit facility.
The Partnership’s capital expenditures and investments for the
quarter were $58 million. Growth capital included spend on the C2G
Pipeline project and investment in the South Texas Gateway
Terminal.
On April 1, 2021, Phillips 66 Partners repaid the two remaining
$25 million tranches of tax-exempt bonds, totaling $50 million.
Also in April, the Partnership borrowed $450 million under a new
term loan agreement. Proceeds were primarily used to repay amounts
borrowed under the Partnership’s $750 million revolving credit
facility.
Strategic Update
The South Texas Gateway Terminal commissioned additional storage
capacity, bringing total capacity to 8.6 million barrels and
marking completion of the final construction phase. The marine
export terminal has two deepwater docks with up to 800,000 barrels
per day of export capacity. Phillips 66 Partners owns a 25%
interest in the terminal.
Phillips 66 Partners continued construction of the C2G Pipeline,
a 16 inch ethane pipeline that will connect its Clemens Caverns
storage facility to petrochemical facilities in Gregory, Texas,
near Corpus Christi, Texas. The project is backed by long-term
commitments and is expected to be completed in mid-2021.
Investor Webcast
Members of Phillips 66 Partners executive management 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 master limited partnership formed by Phillips 66 to
own, operate, develop and acquire primarily fee-based crude oil,
refined petroleum products and natural gas liquids pipelines,
terminals and other midstream assets. For more information, visit
www.phillips66partners.com.
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking statements as
defined under the federal securities laws. Words and phrases such
as “is anticipated,” “is estimated,” “is expected,” “is planned,”
“is scheduled,” “is targeted,” “believes,” “continues,” “intends,”
“will,” “would,” “objectives,” “goals,” “projects,” “efforts,”
“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 included in this news release are based
on management’s expectations, estimates and projections as of the
date they are made. These statements are not guarantees of future
performance and you should not unduly rely on them as they 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, refined petroleum
products and NGL we or our equity affiliates transport,
fractionate, terminal and store; the tariff rates with respect to
volumes transported through our regulated assets, which are subject
to review and possible adjustment by federal and state regulators;
fluctuations in the prices for crude oil, refined petroleum
products and NGL; the continuing effects of the COVID-19 pandemic
and its negative impact on the demand for refined products; changes
in governmental policies relating to crude oil, refined petroleum
products or NGL pricing, regulation, taxation, or exports;
liabilities associated with the risks and operational hazards
inherent in transporting, fractionating, terminaling and storing
crude oil, refined petroleum products and NGL; curtailment of
operations due to accidents, severe weather (including as a result
of climate change) or natural disasters, riots, strikes or
lockouts; the inability to obtain or maintain permits, in a timely
manner or at all, and the possible revocation or modification of
permits; our ability to successfully execute growth strategies; the
operation, financing and distribution decisions of our equity
affiliates; costs to comply with environmental laws and safety
regulations; failure of information technology due to various
causes, including unauthorized access or attacks; changes to the
costs to deliver and transport crude oil, refined petroleum
products and NGL; potential liability from litigation or for
remedial actions, including removal and reclamation obligations
under environmental regulations; the failure to complete
construction of capital projects on time and within budget; general
domestic and international economic and political developments
including armed hostilities, expropriation of assets, and other
political, economic or diplomatic developments, including those
caused by public health issues; our ability to comply with our debt
covenants and to incur additional indebtedness on favorable terms;
changes in tax, environmental and other laws and 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,” “adjusted EBITDA,” “distributable cash
flow” and “coverage ratio.” These are non-GAAP financial measures.
EBITDA and adjusted EBITDA are included to help facilitate
comparisons of operating performance of the Partnership with other
companies in our industry. EBITDA and distributable cash flow help
facilitate an assessment of our 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. Our coverage ratio is
calculated as distributable cash flow divided by total cash
distributions and is included to help indicate the Partnership’s
ability to pay cash distributions from current earnings. The GAAP
performance measure most directly comparable to EBITDA and adjusted
EBITDA is net income (loss). The GAAP liquidity measure most
comparable to EBITDA and distributable cash flow is net cash
provided by operating activities. The GAAP financial measure most
comparable to our coverage ratio is calculated as net cash provided
by operating activities divided by total cash distributions. These
non-GAAP financial measures should not be considered as
alternatives to their comparable GAAP measures. They have important
limitations as analytical tools because they exclude some but not
all items that affect their corresponding GAAP measures. They
should not be considered in isolation or as substitutes for
analysis of our results as reported under GAAP. Additionally,
because EBITDA, adjusted EBITDA, distributable cash flow and
coverage ratio may be defined differently by other companies in our
industry, our definition of those measures may not be comparable to
similarly titled measures of other companies, thereby diminishing
their utility.
Reconciliations of these non-GAAP measures to their comparable
GAAP measures are included in this release.
References in the release to earnings or losses refer to net
income or losses attributable to the Partnership. References to
EBITDA refer to earnings before interest, income taxes,
depreciation and amortization.
Results of Operations
(Unaudited)
Summarized Financial Statement
Information
Millions of Dollars Except as
Indicated
Q1 2021
Q4 2020
Selected Income Statement Data
Total revenues and other income
$
376
390
Net income (loss)
(11)
111
Net income (loss) attributable to the
Partnership
(18)
104
Adjusted EBITDA
289
318
Distributable cash flow
233
240
Net Income (Loss) Attributable to the
Partnership Per Limited Partner Unit—Diluted (Dollars)
Common units
$
(0.13)
0.40
Selected Balance Sheet Data
Cash and cash equivalents
$
3
7
Equity investments
3,029
3,244
Total assets
7,053
7,258
Total debt
3,944
3,909
Equity held by public
Preferred units
749
749
Common units
2,647
2,706
Equity held by Phillips 66
Common units
(828)
(656)
Statement of Income
(Loss)
Millions of Dollars
Q1 2021
Q4 2020
Revenues and Other
Income
Operating revenues—related
parties
$
245
258
Operating revenues—third
parties
7
7
Equity in earnings of
affiliates
124
124
Other income
—
1
Total revenues and other
income
376
390
Costs and Expenses
Operating and maintenance
expenses
95
85
Depreciation
34
39
Impairments
198
96
General and administrative
expenses
17
16
Taxes other than income taxes
10
10
Interest and debt expense
33
32
Total costs and
expenses
387
278
Income (loss) before income
taxes
(11)
112
Income tax expense
—
1
Net Income (Loss)
(11)
111
Less: Net income attributable to
noncontrolling interest
7
7
Net Income (Loss) Attributable
to the Partnership
(18)
104
Less: Preferred unitholders’
interest in net income (loss) attributable to the Partnership
12
12
Limited Partners’ Interest in
Net Income (Loss) Attributable to the Partnership
$
(30)
92
Selected Operating
Data
Q1 2021
Q4 2020
Wholly Owned Operating
Data
Pipelines
Pipeline revenues (millions of
dollars)
$
104
111
Pipeline volumes(1) (thousands of
barrels daily)
Crude oil
796
843
Refined petroleum products and
natural gas liquids
809
877
Total
1,605
1,720
Average pipeline revenue per
barrel (dollars)
$
0.71
0.70
Terminals
Terminal revenues (millions of
dollars)
$
39
41
Terminal throughput (thousands of
barrels daily)
Crude oil(2)
374
283
Refined petroleum products
657
711
Total
1,031
994
Average terminaling revenue per
barrel (dollars)
$
0.41
0.44
Storage, processing and other
revenues (millions of dollars)
$
109
113
Total Operating Revenues
(millions of dollars)
$
252
265
Joint Venture Operating
Data(3)
Crude oil, refined petroleum
products and natural gas liquids (thousands of barrels daily)
1,052
1,102
(1) Represents the sum of volumes
transported through each separately tariffed pipeline segment.
(2) Bayway and Ferndale rail rack
volumes included in crude oil terminals.
(3) Proportional share of total
pipeline and terminal volumes of joint ventures consistent with
recognized equity in earnings of affiliates.
Cash Distributions
Millions of Dollars Except as
Indicated
Q1 2021
Q4 2020
Cash Distributions†
Common units—public
$
52
51
Common units—Phillips 66
148
149
Total
$
200
200
Cash Distribution Per Common Unit
(Dollars)
$
0.875
0.875
Coverage Ratio*
1.17
1.20
†Cash distributions declared attributable
to the indicated periods.
*Calculated as distributable cash flow
divided by total cash distributions. Used to indicate the
Partnership’s ability to pay cash distributions from current
earnings. Net cash provided by operating activities divided by
total cash distributions was 1.14x and 0.85x at Q1 2021 and Q4
2020, respectively.
Reconciliation of Adjusted EBITDA and
Distributable Cash Flow to Net Income (Loss) Attributable to the
Partnership
Millions of Dollars
Q1 2021
Q4 2020
Net Income (Loss) Attributable to the
Partnership
$
(18)
104
Plus:
Net income attributable to noncontrolling
interest
7
7
Net Income (Loss)
(11)
111
Plus:
Depreciation
34
39
Net interest expense
33
32
Income tax expense
—
1
EBITDA
56
183
Plus:
Proportional share of equity affiliates’
net interest, taxes, depreciation and amortization, and
impairments
49
54
Expenses indemnified or prefunded by
Phillips 66
—
1
Impairments
198
96
Less:
Adjusted EBITDA attributable to
noncontrolling interest
14
16
Adjusted EBITDA
289
318
Plus:
Deferred revenue impacts*†
9
4
Less:
Equity affiliate distributions less than
proportional adjusted EBITDA
14
5
Maintenance capital expenditures†
6
33
Net interest expense
33
32
Preferred unit distributions
12
12
Distributable Cash Flow
$
233
240
*Difference between cash receipts
and revenue recognition.
†Excludes Merey Sweeny capital
reimbursements and turnaround impacts.
Reconciliation of Adjusted EBITDA and
Distributable Cash Flow to Net Cash Provided by Operating
Activities
Millions of Dollars
Q1 2021
Q4 2020
Net Cash Provided by Operating
Activities
$
227
170
Plus:
Net interest expense
33
32
Income tax expense
—
1
Changes in working capital
(11)
75
Undistributed equity earnings
5
2
Impairments
(198)
(96)
Deferred revenues and other
liabilities
—
1
Other
—
(2)
EBITDA
56
183
Plus:
Proportional share of equity affiliates’
net interest, taxes, depreciation and amortization, and
impairments
49
54
Expenses indemnified or prefunded by
Phillips 66
—
1
Impairments
198
96
Less:
Adjusted EBITDA attributable to
noncontrolling interest
14
16
Adjusted EBITDA
289
318
Plus:
Deferred revenue impacts*†
9
4
Less:
Equity affiliate distributions less than
proportional adjusted EBITDA
14
5
Maintenance capital expenditures†
6
33
Net interest expense
33
32
Preferred unit distributions
12
12
Distributable Cash Flow
$
233
240
*Difference between cash receipts
and revenue recognition.
†Excludes Merey Sweeny capital
reimbursements and turnaround impacts.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210430005077/en/
Jeff Dietert (investors) 832-765-2297 jeff.dietert@p66.com
Shannon Holy (investors) 832-765-2297 shannon.m.holy@p66.com
Thaddeus Herrick (media) 855-841-2368
thaddeus.f.herrick@p66.com
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