Delaware | 001-36674 | 30-0831007 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits. |
USD Partners LP | ||||
By: | USD Partners GP LLC, | |||
its general partner | ||||
Dated: November 7, 2017 | By: | /s/ Adam Altsuler | ||
Name: | Adam Altsuler | |||
Title: | Vice President and Chief Financial Officer |
Exhibit Number | Description | |
99.1 |
• | Completed Stroud terminal retrofit activities on time and under the Partnership’s initial budget, resulting in the commencement of operations on October 1, 2017 |
• | Activity at the Hardisty terminal reached two-year highs during the quarter |
• | Generated Net cash provided by operating activities of $16.2 million, Adjusted EBITDA of $13.4 million and Distributable cash flow of $13.6 million |
• | Reported Net income of $6.4 million |
• | Increased quarterly cash distribution for tenth consecutive quarter to $0.345 per unit ($1.38 per unit annualized) while maintaining approximately 1.5x coverage |
• | Ended quarter with $206.8 million of available liquidity |
• | the Partnership’s liquidity and the ability of the Partnership’s businesses to produce sufficient cash flows to make distributions to the Partnership’s unitholders; and |
• | the Partnership’s ability to incur and service debt and fund capital expenditures. |
• | the amount of cash available for making distributions to the Partnership’s unitholders; |
• | the excess cash being retained for use in enhancing the Partnership’s existing businesses; and |
• | the sustainability of the Partnership’s current distribution rate per unit. |
USD Partners LP | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
For the Three and Nine Months Ended September 30, 2017 and 2016 | |||||||||||||||
(unaudited) | |||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Revenues | |||||||||||||||
Terminalling services | $ | 21,799 | $ | 24,078 | $ | 67,335 | $ | 69,560 | |||||||
Terminalling services — related party | 4,716 | 1,736 | 8,974 | 5,142 | |||||||||||
Railroad incentives | 4 | 24 | 25 | 61 | |||||||||||
Fleet leases | 643 | 643 | 1,929 | 1,933 | |||||||||||
Fleet leases — related party | 1,013 | 890 | 2,794 | 2,671 | |||||||||||
Fleet services | 470 | 475 | 1,405 | 613 | |||||||||||
Fleet services — related party | 218 | 279 | 776 | 1,647 | |||||||||||
Freight and other reimbursables | 118 | 218 | 483 | 944 | |||||||||||
Freight and other reimbursables — related party | — | — | 1 | — | |||||||||||
Total revenues | 28,981 | 28,343 | 83,722 | 82,571 | |||||||||||
Operating costs | |||||||||||||||
Subcontracted rail services | 2,340 | 2,004 | 6,148 | 6,073 | |||||||||||
Pipeline fees | 6,367 | 5,492 | 17,153 | 15,544 | |||||||||||
Fleet leases | 1,656 | 1,534 | 4,723 | 4,605 | |||||||||||
Freight and other reimbursables | 118 | 218 | 484 | 944 | |||||||||||
Operating and maintenance | 749 | 746 | 2,050 | 2,399 | |||||||||||
Selling, general and administrative | 2,221 | 2,505 | 6,898 | 7,472 | |||||||||||
Selling, general and administrative — related party | 1,477 | 1,438 | 4,305 | 4,369 | |||||||||||
Depreciation and amortization | 5,254 | 4,906 | 15,164 | 14,725 | |||||||||||
Total operating costs | 20,182 | 18,843 | 56,925 | 56,131 | |||||||||||
Operating income | 8,799 | 9,500 | 26,797 | 26,440 | |||||||||||
Interest expense | 2,388 | 2,572 | 7,508 | 7,288 | |||||||||||
Loss (gain) associated with derivative instruments | 667 | (349 | ) | 1,279 | 921 | ||||||||||
Foreign currency transaction loss (gain) | (457 | ) | 25 | (527 | ) | (120 | ) | ||||||||
Other income, net | (48 | ) | — | (40 | ) | — | |||||||||
Income before provision for income taxes | 6,249 | 7,252 | 18,577 | 18,351 | |||||||||||
Benefit from income taxes | (178 | ) | (5,579 | ) | (1,427 | ) | (1,865 | ) | |||||||
Net income | $ | 6,427 | $ | 12,831 | $ | 20,004 | $ | 20,216 |
USD Partners LP | |||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||
For the Three and Nine Months Ended September 30, 2017 and 2016 | |||||||||||||||
(unaudited) | |||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 6,427 | $ | 12,831 | $ | 20,004 | $ | 20,216 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 5,254 | 4,906 | 15,164 | 14,725 | |||||||||||
Loss (gain) associated with derivative instruments | 667 | (349 | ) | 1,279 | 921 | ||||||||||
Settlement of derivative contracts | (148 | ) | 604 | 242 | 1,640 | ||||||||||
Unit based compensation expense | 946 | 1,127 | 2,962 | 2,824 | |||||||||||
Other | (5 | ) | 314 | 750 | 648 | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable | 691 | (39 | ) | 267 | 168 | ||||||||||
Accounts receivable — related party | (403 | ) | (1,693 | ) | (224 | ) | 67 | ||||||||
Prepaid expenses and other current assets | 2,927 | (2,577 | ) | 1,819 | (3,037 | ) | |||||||||
Accounts payable and accrued expenses | 2,306 | 584 | 990 | (1,377 | ) | ||||||||||
Accounts payable and accrued expenses — related party | (273 | ) | 1,443 | (43 | ) | 1,467 | |||||||||
Deferred revenue and other liabilities | (3,188 | ) | (445 | ) | (6,733 | ) | 2,284 | ||||||||
Deferred revenue — related party | 41 | (2,154 | ) | 1,066 | (2,783 | ) | |||||||||
Change in restricted cash | 915 | (31 | ) | 685 | (664 | ) | |||||||||
Net cash provided by operating activities | 16,157 | 14,521 | 38,228 | 37,099 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Additions of property and equipment | (935 | ) | (225 | ) | (26,708 | ) | (471 | ) | |||||||
Net cash used in investing activities | (935 | ) | (225 | ) | (26,708 | ) | (471 | ) | |||||||
Cash flows from financing activities: | |||||||||||||||
Distributions | (9,390 | ) | (7,547 | ) | (25,532 | ) | (21,943 | ) | |||||||
Vested phantom units used for payment of participant taxes | — | — | (1,072 | ) | (77 | ) | |||||||||
Net proceeds from issuance of common units | — | — | 33,700 | — | |||||||||||
Proceeds from long-term debt | 4,000 | 5,000 | 44,000 | 15,000 | |||||||||||
Repayments of long-term debt | (9,000 | ) | (11,929 | ) | (66,342 | ) | (30,831 | ) | |||||||
Net cash used in financing activities | (14,390 | ) | (14,476 | ) | (15,246 | ) | (37,851 | ) | |||||||
Effect of exchange rates on cash | (197 | ) | 120 | (148 | ) | 559 | |||||||||
Net change in cash and cash equivalents | 635 | (60 | ) | (3,874 | ) | (664 | ) | ||||||||
Cash and cash equivalents – beginning of period | 7,196 | 9,896 | 11,705 | 10,500 | |||||||||||
Cash and cash equivalents – end of period | $ | 7,831 | $ | 9,836 | $ | 7,831 | $ | 9,836 |
USD Partners LP | ||||||||
Consolidated Balance Sheets | ||||||||
(unaudited) | ||||||||
September 30, | December 31, | |||||||
2017 | 2016 | |||||||
ASSETS | (in thousands) | |||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 7,831 | $ | 11,705 | ||||
Restricted cash | 5,138 | 5,433 | ||||||
Accounts receivable, net | 4,168 | 4,321 | ||||||
Accounts receivable — related party | 438 | 219 | ||||||
Prepaid expenses | 8,717 | 10,325 | ||||||
Other current assets | 3,178 | 2,562 | ||||||
Total current assets | 29,470 | 34,565 | ||||||
Property and equipment, net | 150,207 | 125,702 | ||||||
Intangible assets, net | 102,464 | 111,919 | ||||||
Goodwill | 33,589 | 33,589 | ||||||
Other non-current assets | 180 | 192 | ||||||
Total assets | $ | 315,910 | $ | 305,967 | ||||
LIABILITIES AND PARTNERS’ CAPITAL | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | $ | 3,555 | $ | 2,221 | ||||
Accounts payable and accrued expenses — related party | 210 | 214 | ||||||
Deferred revenue, current portion | 22,991 | 26,928 | ||||||
Deferred revenue, current portion — related party | 5,710 | 4,292 | ||||||
Other current liabilities | 3,189 | 3,513 | ||||||
Total current liabilities | 35,655 | 37,168 | ||||||
Long-term debt, net | 199,411 | 220,894 | ||||||
Deferred revenue, net of current portion | — | 264 | ||||||
Deferred income tax liability, net | 957 | 823 | ||||||
Total liabilities | 236,023 | 259,149 | ||||||
Commitments and contingencies | ||||||||
Partners’ capital | ||||||||
Common units | 135,609 | 122,802 | ||||||
Class A units | 1,284 | 1,811 | ||||||
Subordinated units | (59,066 | ) | (76,749 | ) | ||||
General partner units | 58 | 111 | ||||||
Accumulated other comprehensive income (loss) | 2,002 | (1,157 | ) | |||||
Total partners’ capital | 79,887 | 46,818 | ||||||
Total liabilities and partners’ capital | $ | 315,910 | $ | 305,967 |
USD Partners LP | ||||||||||||||||
GAAP to Non-GAAP Reconciliations | ||||||||||||||||
For the Three and Nine Months Ended September 30, 2017 and 2016 | ||||||||||||||||
(unaudited) | ||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(in thousands) | ||||||||||||||||
Net cash provided by operating activities | $ | 16,157 | $ | 14,521 | $ | 38,228 | $ | 37,099 | ||||||||
Add (deduct): | ||||||||||||||||
Amortization of deferred financing costs | (216 | ) | (216 | ) | (646 | ) | (646 | ) | ||||||||
Deferred income taxes | 221 | (98 | ) | (86 | ) | (2 | ) | |||||||||
Changes in accounts receivable and other assets | (3,215 | ) | 4,309 | (1,862 | ) | 2,802 | ||||||||||
Changes in accounts payable and accrued expenses | (2,033 | ) | (2,027 | ) | (947 | ) | (90 | ) | ||||||||
Changes in deferred revenue and other liabilities | 3,147 | 2,599 | 5,667 | 499 | ||||||||||||
Change in restricted cash | (915 | ) | 31 | (685 | ) | 664 | ||||||||||
Interest expense, net | 2,384 | 2,572 | 7,500 | 7,288 | ||||||||||||
Benefit from income taxes | (178 | ) | (5,579 | ) | (1,427 | ) | (1,865 | ) | ||||||||
Foreign currency transaction loss (gain) (1) | (457 | ) | 25 | (527 | ) | (120 | ) | |||||||||
Deferred revenue associated with minimum monthly commitment fees (2) | (1,473 | ) | 43 | (1,331 | ) | 1,230 | ||||||||||
Adjusted EBITDA | 13,422 | 16,180 | 43,884 | 46,859 | ||||||||||||
Add (deduct): | ||||||||||||||||
Cash received (paid) for income taxes (3) | 2,664 | 1,036 | 1,250 | (2,160 | ) | |||||||||||
Cash paid for interest | (2,165 | ) | (2,571 | ) | (7,102 | ) | (6,558 | ) | ||||||||
Maintenance capital expenditures | (274 | ) | (227 | ) | (472 | ) | (245 | ) | ||||||||
Distributable cash flow | $ | 13,647 | $ | 14,418 | $ | 37,560 | $ | 37,896 | ||||||||
(1) | Represents foreign exchange transaction gains and losses associated with activities between our U.S. and Canadian subsidiaries. | |||||||||||||||
(2) | Represents deferred revenue associated with minimum monthly commitment fees in excess of throughput utilized, which fees are not refundable to the Partnership's customers. Amounts presented are net of: (a) the corresponding prepaid Gibson pipeline fee that will be recognized as expense concurrently with the recognition of revenue; (b) revenue recognized in the current period that was previously deferred; and (c) expense recognized for previously prepaid Gibson pipeline fees, which correspond with the revenue recognized that was previously deferred. | |||||||||||||||
(3) | Includes a refund of $2.6 million (representing C$3.4 million) received in the three and nine months ended September 30, 2017, for our 2016 foreign income taxes. Also includes refunds of approximately $0.7 million (representing C$0.9 million) received in the nine months ended September 30, 2017, and approximately $1.4 million (representing C$1.8 million) received in the three and nine months ended September 30, 2016, for our 2015 foreign income taxes. |
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