Investors Attention Alert: Andeavor Logistics LP (NYSE: ANDX)

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On Monday, Shares of Andeavor Logistics LP (NYSE: ANDX) price closed at $42.08 in the trading session. After opening the first trading session at $42.33, it registered a day’s high of $42.53 and touched a day’s low of $41.88. The last trade was registered at price of $42.53 and volume was 400,558 as compared to it’s an average volume of 678,932.

Andeavor Logistics LP (NYSE: ANDX) stated 1st quarter net earnings of $139M, or $0.59 per diluted ordinary limited partner unit, and EBITDA of $273M.

Stated first quarter net earnings of $139M and EBITDA of $273M

Increased quarterly distribution to $1.015 per limited partner unit; 28th consecutive increase

Reported predictable $1.6 to $1.7B drop down and asset transfer with predictable close in August 2018

Reported three new Permian crude oil gathering projects further enhancing position in the Delaware Basin

Andeavor reported participation in Gray Oak Pipeline and South Texas Gateway Terminal to move Permian Basin crude oil to Corpus Christi, TX

Completed acquisition of Wamsutter Pipeline for $180M on May 1, 2018

Increased 2020 net earnings target to $965M and EBITDA by $150M to over $1.6B, representing 60% growth over 2017

Greg Goff, Chairman and Chief Executive Officer of Andeavor Logistics said that their business performed very well this quarter and they continue to execute on their Permian growth strategy with the announcement of several new organic gathering projects as well as Andeavor`s participation in long-haul takeaway pipeline capacity out of the region with its Gray Oak Pipeline and South Texas Gateway Terminal joint ventures. The company also reported intent to accelerate their drop down and asset transfer plans, which will further strengthen the business with the addition of high-growth Permian assets and other high-quality logistics assets.

Gathering and Processing

Gathering and Processing section operating income was $74M for the first quarter 2018, a raise of $12M from the previous year and section EBITDA was $124M, a raise of $23M from the previous year. The year-over-year increase was primarily attributable to contributions from the Western Refining Logistics acquisition and growth at the Robinson Lake gathering and processing facility. Results for the quarter were also influenced by lower High Plains Pipeline crude oil volumes Because of additional third party interconnects into the Dakota Access Pipeline, which have occurred over the last two quarters. This impact was partially offset by continued growth in Permian crude oil gathering, transportation, and storage assets, which continue to set record levels each quarter since acquisition.

Balance Sheet and Cash Flow

Net cash from operating activities was $230M in the first quarter 2018 and distributable cash flow attributable to ordinary unit holders for the first quarter was $199M. Andeavor Logistics LP (NYSE: ANDX) ended the first quarter 2018 with $27M of cash and about $1.7B of availability under its revolving credit facilities.

Net capital expenditures for the first quarter 2018 were $71M, which included $61M of growth capital and $10M of net maintenance capital. Andeavor Logistics expects to invest about $2.2 to $2.3B in 2018, including $325M in growth capital, $180M in the recently completed Wamsutter acquisition, $1.6 to $1.7B in drop downs (which contains the Conan Crude Oil Gathering system and the Los Angeles Refinery Interconnect Pipeline at cost plus incurred interest) and $75M in net maintenance capital. The firm plans for total capital investments of about $3.3B from the year 2018 to 2020, unaffected from previous guidance presented at the December 2017 Investor and Analyst Day.

On April 18, 2018, Andeavor Logistics reported a quarterly cash distribution of $1.015 per limited joint venture unit or $4.06 on an annualized basis. This represents a raise of 1.5% over the previous distribution and the joint venture`s 28th consecutive quarterly increase. The distribution coverage ratio was 0.97x for the first quarter 2018.

Andeavor Logistics LP’s (ANDX) EPS growth ratio for the past five years was -8.10% while Sales growth for the past five years was 81.30%. Return on equity (ROE) was noted as 14.40% while return on investment (ROI) was 9.70%. The stock’s institutional ownership stands at 41.40%.


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