Shell Midstream Partners, L.P.

Good morning, ladies and gentlemen. My name is Olivia, and I will be your conference operator today. At this time, I would like to welcome everyone to today's webcast of Sheldon Stream Partners. All participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press the star, then the one key on your touchtone telephone. I will now turn the call over to Jamie Parker, Investor Relations Officer. You may begin your conference.

Thank you. Welcome to today's webcast for Shell Midstream Partners. With me today are Steve Ledbetter, CEO, Sean Karsten, CFO, and Sean Guillory, VP Commercial and Business Development. Slide two contains our safe harbor statement. We will be making forward-looking statements related to future events and expectations during the presentation and Q&A session. Actual results may differ materially from such statements and factors that could cause actual results to be different are included here as well as in today's press release and the risk factors in our filings with the SEC. Today's call also contains certain non-GAAP financial measures. Please refer to the earnings press release in Appendix 1 of this presentation for important disclosures regarding such measures, including reconciliations to the most comparable GAAP financial measures. We will take questions at the end of the presentation, and with that, I'll turn the call over to Steve Ledbetter. Thanks, Jamie.

Good morning, and welcome to our fourth quarter earnings webcast. No doubt you have all seen the recent announcement that our board received a non-binding preliminary offer from Shell Pipeline Company to acquire all of our remaining publicly held units at $12.89 per unit. The board has appointed a complex committee to review, evaluate, and negotiate the offer. Of course, if a transaction materializes, it would be subject to a number of contingencies, including board and complex committee approval, as well as the execution of a definitive agreement. For now, we are continuing business as usual. We will continue to focus on delivering unit holder value by fueling stable, rateable cash flows and honoring our contracts and commitments to our customers and partners. Our day-to-day business focus has not changed and will remain steadfast throughout the process. In light of the announcement, we will suspend providing forward guidance as well as our formal unit holder engagement program, such as attending investor conferences and roadshows. We will, however, continue to report on our operational and financial performance as usual. So with that, I'll turn it over to Sean to walk through the financial results for the fourth quarter. Sean?

Thanks, Steve. So first, let me cover a few of our key financial metrics for the quarter. Our total revenue was $141 million, an increase of $13 million from the third quarter. Now, this increase was primarily related to increased transportation revenue as our assets returned to normal operation following the hurricane impacts experienced in Q3. Operating expense was $87 million, up about $8 million from the prior quarter. This is mostly due to timing of Norco maintenance expenses being delayed by the storm in Q3. Income from equity investments was $59 million, down about $27 million from the prior quarter, mostly related to an impairment charge recorded by Colonial. Now, all this was partially offset by increased earnings from Mars and Amberjack. So with all this, adjusted EBITDA attributable to the partnership was $167 million. And after interest expense, maintenance capital, and other adjustments, total cash available for distribution was $142 million. Our partnership declared distribution of $0.30 per LP unit. Now, this resulted in a coverage ratio for the quarter of 1.2 times. And finally, we incurred $4 million of maintenance capex in the fourth quarter. Now, this was a mix of various routine maintenance projects across the asset. And as of December 31st, the partnership had total debt outstanding of $2.7 billion. Now, this equates to a debt to EBITDA ratio of four times based on an annualized Q4 adjusted EBITDA. In light of the offer from Shell and our suspension of forward guidance, the Q&A portion of our call today will be limited to our operational and financial performance for the fourth quarter. We'll not be able to elaborate any further regarding Shell's offer, and we will not be able to take questions relating to future guidance or future performance. So thank you again for joining our call today. Now, it doesn't look like we have any questions in the queue, so with that, I'll turn the call back over to James.

Everyone, we thank you very much for your interest in Shell Midstream Partners. If you have any follow-up questions following today's presentation and call, please feel free to call me directly. My contact information can be found on the presentation materials as well as on our website, shellmidstreampartners.com.