OILTANKING PARTNERS LP HOUSTON, Aug. 6, 2014 /PRNewswire/ -- Oiltanking Partners, L.P. (NYSE: OILT) (the "Partnership") today reported record second quarter 2014 net income of $42.3 million, or $0.37 per unit, an increase of 43.3% over second quarter 2013 net income of $29.5 million, or $0.31 per unit. The Partnership completed a two-for-one common and subordinated unit split on July 14, 2014, and all references to unit and per unit amounts in this document have been adjusted to reflect the effect of the unit split.
Adjusted EBITDA increased 34.3% to $48.8 million for the second quarter of 2014, compared to $36.4 million for the second quarter of 2013. Adjusted EBITDA, which is a financial measure not presented in accordance with U.S. generally accepted accounting principles ("GAAP"), is defined and reconciled to net income in the financial tables below.
The Partnership's revenues increased by approximately $17.0 million, or 32.6%, to $69.1 million during the second quarter of 2014 compared to the same period in 2013, due to higher storage service fee revenues, throughput fee revenues and ancillary service fee revenues. Storage service fee revenue grew by $6.8 million due to new storage capacity of approximately 3.2 million barrels placed into service in the second half of 2013 and 2.0 million barrels placed into service since January 2014. Throughput fee revenues grew by $8.9 million during the second quarter of 2014 due to fees related to pipeline throughput, fees from in-terminal sales between customers, liquefied petroleum gas ("LPG") exports at the Partnership's Houston terminal and customer deficiency charges recognized in the current period.
"We continue to benefit from strong growth in customer export initiatives and logistics needs. General activity at our terminals has increased, and we achieved a new throughput record of more than 1.25 million barrels per day this quarter," said Ken Owen, President and Chief Executive Officer of the Partnership's general partner. "Our Houston expansion projects are enhancing our storage, distribution and export capabilities, allowing us to capitalize on increased customer demand for energy logistics services."
"We have made excellent progress at Appelt II, successfully placing into service six storage tanks with a total storage capacity of approximately 2.0 million barrels. We are on track to deliver the remainder of the tanks along with the two previously-announced Crossroads pipelines on schedule," said Owen. "We are also very pleased to have received the necessary permits and broken ground on our Beaumont expansion. Our goal is to build a world-class crude terminal in Beaumont that positions us to execute the same business model we have applied in Houston of delivering maximum connectivity and logistics flexibility to our customers."
Operating expenses during the second quarter of 2014 were $14.0 million, increasing by $3.0 million compared to the same period in 2013, due to higher costs associated with operations personnel, rental expense, insurance and other expenses largely attributable to increased capacity. Selling, general and administrative expenses during the second quarter of 2014 were $6.3 million, increasing by $1.5 million compared to the same period in 2013, primarily due to the July 2013 increase in the fixed services agreement fee.
As announced at its Analyst Day on June 24, 2014, the Partnership has increased its estimate of 2014 capital expenditures by $50 million primarily to reflect its investment in the Beaumont crude expansion we announced in June, and it now expects to spend between $300 million and $320 million this year.
On July 21, 2014, the Partnership declared an increase in its quarterly cash distribution to $0.26 per unit, or $1.04 per unit on an annualized basis, for the second quarter of 2014. The second quarter distribution is our eleventh consecutive quarterly increase since going public in the third quarter of 2011 and represents a 5.1% increase over the distribution of $0.2475 ($0.495 on a pre-split basis) per unit for the first quarter of 2014 and a 22.4% increase over the distribution of $0.2125 ($0.425 on a pre-split basis) per unit for the second quarter of 2013. The second quarter 2014 cash distribution is expected to be paid on August 14, 2014.
Distributable cash flow for the second quarter of 2014 provided distribution coverage of 1.94 times the amount needed for the Partnership to fund the quarterly distribution to both the limited and general partners and incentive distribution rights. The Partnership will continue to retain cash flow in excess of distributions paid to fund, in part, announced expansion projects.
Distributable cash flow and distribution coverage ratio, which are non-GAAP financial measures, are defined and reconciled to net income in the financial tables below.
Conference Call
The Partnership will hold a conference call to discuss its second quarter 2014 financial results on August 7, 2014, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). To participate in the call, dial (719) 325-2215 and ask for the Oiltanking call prior to the start time, or access it live over the internet at www.oiltankingpartners.com on the "Investor Relations" page of the Partnership's website.
A replay of the audio webcast will be available shortly after the call on the Partnership's website. A telephonic replay will be available through August 14, 2014 by calling (719) 457-0820 and using the pass code 2967735.
Oiltanking Partners, L.P. is a growth-oriented master limited partnership engaged in independent storage and transportation of crude oil, refined petroleum products and liquefied petroleum gas. We are the logistics provider of choice to major integrated oil companies, distributors, marketers and chemical and petrochemical companies. Our core assets are strategically located along the Gulf Coast of the United States on the Houston Ship Channel and in Beaumont, Texas. For more information, visit www.oiltankingpartners.com.
Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements reflect the Partnership's current expectations, opinions, views or beliefs with respect to future events, based on what it believes are reasonable assumptions. No assurance can be given, however, that these events will occur. Important factors that could cause actual results to differ from forward-looking statements include, but are not limited to: adverse economic or market conditions, changes in demand for the products that we handle or for our services, increased competition, changes in the availability and cost of capital, operating hazards and the effects of existing and future government regulations. These and other significant risks and uncertainties are described more fully in the Partnership's filings with the U.S. Securities and Exchange Commission (the "SEC"), available at the SEC's website at www.sec.gov. The Partnership has no obligation and, except as required by law, does not undertake any obligation, to update or revise these statements or provide any other information relating to such statements.
Use of Non-GAAP Financial Measures
This news release and the accompanying schedules include the non-GAAP financial measures of Adjusted EBITDA, distributable cash flow, distribution coverage ratio and the ratio of debt to Adjusted EBITDA, which may be used periodically by management when discussing our financial results with investors and analysts. The accompanying schedules of this news release provide reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. The Partnership believes investors benefit from having access to the same financial measures used by its management. These non-GAAP financial measures are commonly employed by management, financial analysts and investors to evaluate our performance from period to period and to compare our performance with the performance of our peers.
The Partnership defines Adjusted EBITDA as net income before net interest expense, income tax expense, depreciation and amortization expense and other income, as further adjusted to exclude gains and losses on disposals of fixed assets. Adjusted EBITDA is a non-GAAP supplemental financial performance measure management and other third parties, such as industry analysts, investors, lenders and rating agencies, may use to assess: (i) the Partnership's financial performance as compared to the performance of its peers, without regard to historical cost basis or financing methods, and (ii) the viability of proposed projects and acquisitions and determine rates of returns on investment in various opportunities. The GAAP measure most directly comparable to Adjusted EBITDA is net income. Adjusted EBITDA has important limitations as an analytical tool because it excludes some but not all items affecting net income.
Distributable cash flow is another non-GAAP financial measure used by the Partnership's management. The Partnership defines distributable cash flow as net income before (i) depreciation and amortization expense; (ii) gains or losses on disposal of fixed assets; and (iii) other (income) expense; less maintenance capital expenditures. Maintenance capital expenditures are capital expenditures (as defined by GAAP) resulting from improvements to and major renewals of existing assets. Such expenditures serve to maintain existing operations but do not generate additional revenues. Management believes distributable cash flow is useful to investors because it removes non-cash items from net income and provides visibility regarding the Partnership's cash available for distribution to unitholders.
The Partnership defines distribution coverage ratio for any given period as the ratio of distributable cash flow during such period to the total distribution payable to all unitholders, the general partner interest and incentive distribution rights.
The Partnership defines the ratio of debt to Adjusted EBITDA for any given period as the ratio of total outstanding debt, including the current portion at the end of such period, to Adjusted EBITDA for the latest twelve month period.
Adjusted EBITDA, distributable cash flow, distribution coverage ratio and the ratio of debt to Adjusted EBITDA should not be considered alternatives to net income, operating income, cash flow from operations, or any other measure of financial performance presented in accordance with GAAP. The presentation of these measures may not be comparable to similarly titled measures of other companies in the industry because the Partnership may define these measures differently than other companies.
Please see the attached reconciliations of Adjusted EBITDA, distributable cash flow, distribution coverage ratio and the ratio of debt to Adjusted EBITDA.
Contact Information:
Mark Buscovich
Manager, FP&A and IR
ir@oiltankingpartners.com
(855) 866-6458
-- Tables to Follow --
OILTANKING PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per unit data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Revenues $69,073 $52,079 $129,026 $92,265
------- ------- -------- -------
Costs and expenses:
Operating 13,978 10,979 27,760 20,444
Selling, general and
administrative 6,264 4,741 12,042 9,738
Depreciation and
amortization 5,540 4,981 10,979 9,471
Gain on disposal of
fixed assets (88) - (88) -
--- --- --- ---
Total costs and
expenses 25,694 20,701 50,693 39,653
------ ------ ------ ------
Operating income 43,379 31,378 78,333 52,612
------ ------ ------ ------
Other income (expense):
Interest expense (757) (1,759) (2,202) (2,651)
Interest income 36 - 88 3
Other income 1 17 5 19
--- --- --- ---
Total other expense,
net (720) (1,742) (2,109) (2,629)
---- ------ ------ ------
Income before income
tax expense 42,659 29,636 76,224 49,983
Income tax expense (408) (160) (717) (315)
---- ---- ---- ----
Net income $42,251 $29,476 $75,507 $49,668
======= ======= ======= =======
Allocation of net income to
partners:
Net income allocated to
general partner $11,492 $5,710 $18,486 $7,060
======= ====== ======= ======
Net income allocated to
common unitholders $16,343 $11,883 $30,297 $21,304
======= ======= ======= =======
Net income allocated to
subordinated
unitholders $14,416 $11,883 $26,724 $21,304
======= ======= ======= =======
Earnings per limited partner unit:
Common unit (basic and
diluted) $0.37 $0.31 $0.69 $0.55
===== ===== ===== =====
Subordinated unit
(basic and diluted) $0.37 $0.31 $0.69 $0.55
===== ===== ===== =====
Weighted average number of limited
partner
units outstanding:
Common units (basic and
diluted) 44,100 38,900 44,100 38,900
====== ====== ====== ======
Subordinated units
(basic and diluted) 38,900 38,900 38,900 38,900
====== ====== ====== ======
OILTANKING PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except unit amounts)
(Unaudited)
June 30, December 31,
2014 2013
---- ----
Assets:
Current assets:
Cash and
cash
equivalents $10,492 $17,332
Receivables:
Trade 29,857 18,013
Affiliates 65 127
Other 5,108 613
Notes
receivable,
affiliate 40,000 100,000
Prepaid
expenses
and other 4,084 1,502
----- -----
Total
current
assets 89,606 137,587
Property,
plant and
equipment,
net 666,403 585,826
Intangible
assets 3,739 3,739
Other
assets,
net 4,289 1,822
----- -----
Total
assets $764,037 $728,974
======== ========
Liabilities and
partners' capital:
Current liabilities:
Accounts
payable
and
accrued
liabilities $39,780 $38,104
Current
maturities
of long-
term debt,
affiliate 2,500 2,500
Accounts
payable,
affiliates 4,764 4,264
----- -----
Total
current
liabilities 47,044 44,868
Long-term
debt,
affiliate,
less
current
maturities 187,050 188,300
Deferred
revenue 3,666 2,159
----- -----
Total
liabilities 237,760 235,327
------- -------
Commitments and
contingencies
Partners' capital:
Common
units
(44,099,802
units
issued and
outstanding
at 427,454 418,435
June 30, 2014 and
December 31, 2013)
Subordinated
units
(38,899,802
units
issued and
outstanding
at 58,566 50,611
June 30, 2014 and
December 31, 2013)
General
partner's
interest 40,257 24,601
------ ------
Total
partners'
capital 526,277 493,647
------- -------
Total
liabilities
and
partners'
capital $764,037 $728,974
======== ========
OILTANKING PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
--------
2014 2013
---- ----
Cash flows from operating activities:
Net income $75,507 $49,668
------- -------
Adjustments to reconcile net income to net
cash provided by
operating activities:
Depreciation and amortization 10,979 9,471
Gain on disposal of fixed assets (88) -
Amortization of deferred
financing costs 104 93
Changes in assets and liabilities:
Trade and other receivables (16,642) (6,792)
Prepaid expenses and other
assets (5,153) (2,188)
Accounts receivable/payable,
affiliates 562 (359)
Accounts payable and accrued
liabilities (590) (2,202)
Deferred revenue 2,660 735
----- ---
Total adjustments from operating
activities (8,168) (1,242)
------ ------
Net cash provided by operating
activities 67,339 48,426
------ ------
Cash flows from investing activities:
Issuance of notes receivable,
affiliate - (3,000)
Collections of notes receivable,
affiliate 60,000 28,000
Payments for purchase of
property, plant and equipment (90,450) (95,920)
Proceeds from sale of property,
plant and equipment 95 44
Purchase of intangible assets - (3,739)
Proceeds from property casualty
indemnification 303 -
--- ---
Net cash used in investing
activities (30,052) (74,615)
------- -------
Cash flows from financing activities:
Borrowings under credit
agreement, affiliate - 57,000
Payments under notes payable,
affiliate (1,250) (1,250)
Distributions paid to partners (42,877) (31,670)
------- -------
Net cash (used in) provided by
financing activities (44,127) 24,080
------- ------
Net decrease in cash and cash
equivalents (6,840) (2,109)
Cash and cash equivalents -
Beginning of period 17,332 7,071
------ -----
Cash and cash equivalents -End
of period $10,492 $4,962
======= ======
OILTANKING PARTNERS, L.P.
SELECTED OPERATING DATA
(Unaudited)
Operating data:
---------------
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Storage
capacity, end
of period
(mmbbls) (1)
(3) 23.6 18.5 23.6 18.5
Storage
capacity,
average
(mmbbls) (3) 23.5 18.5 22.3 18.3
Terminal
throughput
(mbpd) (2) 1,256.2 1,135.7 1,158.4 1,008.5
Vessels per
period 261 225 487 419
Barges per
period 772 788 1,449 1,619
Trucks per
period 16,750 6,900 29,779 12,138
Rail cars per
period 98 1,950 148 3,588
________________
(1) Represents million barrels
("mmbbls").
(2) Represents thousands of barrels per
day ("mbpd").
(3) During the second quarter of 2014,
we placed into service
approximately 1.8 million barrels
of storage capacity. Amounts do
not reflect approximately 210,000
barrels of storage capacity placed
into service in July 2014.
Revenues by
service
category:
-----------
(In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Storage service
fees $35,380 $28,620 $69,417 $56,578
Throughput fees 30,309 21,430 53,579 31,918
Ancillary
service fees 3,384 2,029 6,030 3,769
----- ----- ----- -----
Total revenues $69,073 $52,079 $129,026 $92,265
======= ======= ======== =======
OILTANKING PARTNERS, L.P.
SELECTED FINANCIAL DATA
Non-GAAP Reconciliations
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Reconciliation of Adjusted EBITDA
and
Distributable cash flow from net
income:
Net income $42,251 $29,476 $75,507 $49,668
Depreciation and
amortization 5,540 4,981 10,979 9,471
Income tax expense 408 160 717 315
Interest expense, net 721 1,759 2,114 2,648
Gain on disposal of
fixed assets (88) - (88) -
Other income (1) (17) (5) (19)
--- --- --- ---
Adjusted EBITDA $48,831 $36,359 $89,224 $62,083
------- ------- ------- -------
Interest expense, net (721) (1,759) (2,114) (2,648)
Income tax expense (408) (160) (717) (315)
Maintenance capital
expenditures (1,463) (260) (2,829) (995)
------ ---- ------ ----
Distributable cash flow $46,239 $34,180 $83,564 $58,125
======= ======= ======= =======
Cash distributions (1) $23,894 $17,112 $46,024 $33,290
======= ======= ======= =======
Distribution coverage
ratio 1.94 x 2.00 x 1.82 x 1.75 x
==== === ==== === ==== === ==== ===
_____________
(1) Amounts represent cash
distributions declared for our
limited partner units, general
partner interest and incentive
distribution rights, as
applicable, for each respective
period.
Reconciliation of Debt to Adjusted EBITDA Ratio:
2014 Latest Twelve Months (LTM) Adjusted EBITDA (as of
June 30, 2014):
Adjusted EBITDA for the six months ended June 30, 2014 $89,224
2013 Adjusted EBITDA (1) 145,275
Less: Adjusted EBITDA for the six months ended June
30, 2013 (62,083)
-------
2014 Latest Twelve Months (LTM) Adjusted EBITDA (as of
June 30, 2014) $172,416
========
Total debt, including current portion at June 30, 2014 $189,550
--------
Debt/Adjusted EBITDA Ratio 1.10 x
==== ===
_____________
(1) Please refer to the press release
of Oiltanking Partners, L.P.
issued February 24, 2014, for a
reconciliation of Adjusted EBITDA
for the year ended December 31,
2013 from net income.
SOURCE Oiltanking Partners, L.P.
