Adjusted EBITDA increased 113% to $42.2 million for the fourth quarter of 2013, compared to $19.8 million for the fourth quarter of 2012.  Adjusted EBITDA for the year 2013 increased 80% to $145.3 million compared to $80.6 million for 2012.  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 fourth quarter capped a year of records and milestones for the Partnership,” said Anne-Marie Ainsworth, President and Chief Executive Officer of the Partnership’s general partner.  “In addition to across-the-board record results for revenues, net income, Adjusted EBITDA and distributable cash flow, we successfully achieved key operational milestones last year by increasing our storage capacity by 23% and exceeding one million barrels of throughput per day.”

The Partnership’s revenues increased by approximately $26.1 million, or 77%, to $60.2 million during the fourth quarter of 2013 compared to the same period in 2012, due to higher storage service fee revenues, throughput fee revenues and ancillary service fee revenues.  Storage service fee revenue grew by $9.0 million due to new storage capacity of approximately 4.1 million barrels placed into service throughout 2013 and, to a lesser extent, higher contract rates.  Throughput fee revenues grew by $15.3 million during the fourth quarter of 2013 due, in large part, to an increase in fees related to liquefied petroleum gas (“LPG”) exports at our Houston terminal and, to a lesser extent, fees generated on pipelines placed into service in the first quarter of 2013.  A significant proportion of the increase in throughput fees was attributable to amounts we received under a margin sharing arrangement with our customer; the margin sharing fees received were in addition to the volume-based throughput fees we earned under that arrangement.

Operating expenses during the fourth quarter of 2013 were $12.1 million, increasing by $2.7 million compared to the same period in 2012, primarily due to higher costs associated with operations personnel, repairs and maintenance, power and fuel, property taxes and insurance.  Selling, general and administrative expenses during the fourth quarter of 2013 were $5.8 million, increasing by $1.0 million compared to the same period in 2012, primarily due to an increase in the fixed fee charged to us under our services agreement with our general partner and its affiliate. 

On January 7, 2014, we announced an expanded terminal agreement with Enterprise Products Partners, L.P. to further increase exports of LPG at the Partnership’s terminal on the Houston Ship Channel.  Already one of the world’s largest, the LPG export terminal is expected to have total loading capacity of more than 16 million barrels per month of low-ethane propane and/or butane if the expansion is completed as planned by year-end 2015.  Under the expanded agreement with Enterprise, the Partnership will provide additional dock capacity to load LPG vessels and land for Enterprise to expand its export facility.  The expanded agreement amends the agreement previously announced in March 2013, and has a 50-year term beginning on February 1, 2014.  The Partnership will continue to earn volume-based throughput fees and participate in margin sharing on all customer vessels loaded at our Houston facility under the expanded agreement.

“In 2014, we expect to deliver continued growth by executing on our previously announced capital projects and capitalizing on our substantial organic growth opportunities,” commented Ms. Ainsworth.  “As part of our ongoing Appelt expansion projects, we expect to add another 3.7 million barrels of storage in 2014 and 2015 to our nearly 22 million barrels of current capacity.  In addition, we expect to complete the 24-inch pipeline to Crossroads Junction, providing our terminal customers access to the origination point of Shell Pipeline’s Houston-to-Houma pipeline.  Based on our current plans, we expect to spend between $230 million and $250 million on capital expenditures in 2014.”

During 2014, construction will continue on the 36-inch pipeline to Crossroads Junction, which is expected to be completed by the end of the first quarter of 2015.  We anticipate commencing construction on 3.1 million barrels of storage capacity as part of our Appelt III expansion project during the third quarter of 2014, after all relevant permits have been obtained.  We expect to place the additional tanks into service during the fourth quarter of 2015 and first quarter of 2016.  When the Appelt II and III expansion projects have been completed, the Partnership’s total storage capacity is projected to be nearly 29 million barrels. 

“We remain focused on expansion opportunities that will deliver continued growth in distributable cash flow per unit to our investors,” added Ainsworth.  “Our low leverage and robust distribution coverage give us substantial financial flexibility as we continue to evaluate more than $400 million in potential capital projects and acquisitions.”

On January 21, 2014, the Partnership declared an increase in its quarterly cash distribution to $0.47 per unit, or $1.88 per unit on an annualized basis, for all of its outstanding limited partner units.  The fourth quarter distribution represents our ninth consecutive quarterly increase since going public in the third quarter of 2011, a 6% increase over the distribution of $0.445 per unit for the third quarter of 2013 and a 21% increase over the distribution of $0.39 per unit for the fourth quarter of 2012.  The $20.7 million fourth quarter 2013 cash distribution was paid on February 14, 2014.  Distributable cash flow for the fourth quarter of 2013 provided distribution coverage of 1.88 times the amount needed for the Partnership to fund the quarterly distribution to both the general and limited partners and incentive distribution rights.  The Partnership will 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.