UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): December 21, 2018
Shell Midstream Partners, L.P.
(Exact name of registrant as specified in its charter)
| Delaware | 1-36710 | 46-5223743 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
||
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150 N. Dairy Ashford Houston, Texas |
77079 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (832) 337-2034
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2):
| ☐ |
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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 5.03 |
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On December 21, 2018, Shell Midstream Partners GP LLC (the “General Partner”), the general partner of Shell Midstream Partners, L.P. (the “Partnership”), executed Amendment No. 2 (the “Amendment”) to the Partnership’s First Amended and Restated Agreement of Limited Partnership dated November 3, 2014, as amended by Amendment No. 1 thereto dated February 26, 2018. Pursuant to the Amendment, distributions to holders of the incentive distribution rights shall be reduced by: (1) $17,000,000 for the quarter ending March 31, 2019, (2) $17,000,000 for the quarter ending June 30, 2019 and (3) $16,000,000 for the quarter ending September 30, 2019.
The foregoing description of the Amendment is qualified in its entirety by reference to the full text of the Amendment, which is filed as Exhibit 3.1 hereto and incorporated by reference herein.
| Item 7.01 |
Regulation FD Disclosure. |
On December 21, 2018, the Partnership issued a press release announcing the adoption by the General Partner of the Amendment. The press release is being furnished as Exhibit 99.1 to this Current Report and is incorporated herein by reference.
The information provided in this Item 7.01 (including the press release furnished as Exhibit 99.1) shall be deemed “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, nor shall it be incorporated by reference in any filing made by the Partnership pursuant to the Securities Act, except to the extent that such filing incorporates by reference any or all of such information by express reference thereto.
| Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SHELL MIDSTREAM PARTNERS, L.P. | ||
| By: |
Shell Midstream Partners GP LLC, its general partner |
|
| By: |
/s/ Lori M. Muratta |
|
| Lori M. Muratta | ||
| Vice President, General Counsel and Secretary | ||
Date: December 21, 2018
Exhibit 3.1
AMENDMENT NO. 2 TO THE FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
SHELL MIDSTREAM PARTNERS, L.P.
This Amendment No. 2 dated as of December 21, 2018 (this “ Amendment No. 2 ”) to the First Amended and Restated Agreement of Limited Partnership of Shell Midstream Partners, L.P., a Delaware limited partnership (the “ Partnership ”), is hereby adopted by Shell Midstream Partners GP LLC, a Delaware limited liability company (the “ General Partner ”), as general partner of the Partnership, pursuant to authority granted in Section 13.1 of the Partnership Agreement (as defined below). Capitalized terms used but not defined herein are used as defined in the Partnership Agreement.
RECITALS
WHEREAS, the General Partner and the Limited Partners of the Partnership entered into that certain First Amended and Restated Agreement of Limited Partnership of the Partnership dated as of November 3, 2014 (as amended, the “ Partnership Agreement ”); and
WHEREAS, the General Partner, as the sole holder of Incentive Distribution Rights, has agreed to a reduction of quarterly distributions in respect of its Incentive Distribution Rights in the amounts per quarter set forth herein commencing with the quarter ending March 31, 2019 and ending with the quarter ending September 30, 2019; and
WHEREAS, Section 13.1(d) of the Partnership Agreement provides, among other things, that the General Partner, without the approval of any Partner, may amend any provision of the Partnership Agreement to reflect a change that the General Partner determines does not adversely affect the Limited Partners considered as a whole or any particular class of Partnership Interests as compared to other classes of Partnership Interests in any material respect; and
WHEREAS, the General Partner has determined, pursuant to Section 13.1(d)(i) of the Partnership Agreement, that the changes to the Partnership Agreement set forth herein do not adversely affect the Limited Partners considered as a whole or any particular class of Partnership Interests as compared to other classes of Partnership Interests in any material respect.
NOW, THEREFORE, the General Partner does hereby amend the Partnership Agreement as follows:
Section 1. AMENDMENTS . Section 6.4 of the Partnership Agreement is hereby amended by adding a new subsection (c) to such Section:
“(c) Notwithstanding anything to the contrary in Section 6.4, for a period of three (3) consecutive quarters commencing with the Quarter ending March 31, 2019 and ending with the Quarter ending September 30, 2019, aggregate quarterly distributions, if any, to holders of the Incentive Distribution Rights provided by clauses (iii)(B), (iv)(B) and (v)(B)
1
of Subsection 6.4(b) shall be reduced (x) by $17,000,000 for the Quarter ending March 31, 2019, (y) by $17,000,000 for the Quarter ending June 30, 2019, and (z) by $16,000,000 for the Quarter ending September 30, 2019.”
Section 2. RATIFICATION OF PARTNERSHIP AGREEMENT . Except as expressly modified and amended herein, all of the terms and conditions of the Partnership Agreement shall remain in full force and effect.
Section 3. GOVERNING LAW . This Amendment No. 2 shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.
[Signature page follows]
2
IN WITNESS WHEREOF, this Amendment No.2 has been executed as of the date first above written.
| GENERAL PARTNER: | ||
| SHELL MIDSTREAM PARTNERS GP LLC | ||
| By: |
/s/ Kevin M. Nichols |
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| Name: | Kevin M. Nichols | |
| Title: | President and Chief Executive Officer | |
[Signature Page to Amendment No. 2 to Partnership Agreement]
Exhibit 99.1
Shell Midstream Partners, L.P. Finalizes Amendment for 2019 Incentive Distribution Rights Growth Waiver
HOUSTON, December 21, 2018 – Shell Midstream Partners, L.P. (NYSE: SHLX) (the “Partnership”), a growth-oriented midstream master limited partnership formed by Royal Dutch Shell plc (“RDS”), announced that it and its general partner, Shell Midstream Partners GP LLC, have amended the Partnership’s partnership agreement for the 2019 Incentive Distribution Rights (IDR’s) Growth Waiver.
As announced on November 2, 2018, the Partnership’s sponsor, RDS, has elected to waive $50 million of distributions in 2019 and these funds are expected to be used by the Partnership for future investment. Under the terms of the amendment, the incentive distribution rights shall be reduced by (1) $17 million for the quarter ending March 31, 2019, (2) $17 million for the quarter ending June 30, 2019 and (3) $16 million for the quarter ending September 30, 2019.
“We believe this waiver is evidence of strong sponsor support and further demonstrates RDS’ commitment to grow its midstream footprint through Shell Midstream Partners,” said Kevin Nichols, CEO and President of Shell Midstream Partners GP LLC.
ABOUT SHELL MIDSTREAM PARTNERS, L.P.
Shell Midstream Partners, L.P., headquartered in Houston, Texas, is a fee-based, growth-oriented midstream master limited partnership formed by Royal Dutch Shell plc to own, operate, develop and acquire pipelines and other midstream assets. Shell Midstream Partners, L.P.’s assets include interests in entities that own crude oil and refined products pipelines and terminals that serve as key infrastructure to (i) transport onshore and offshore crude oil production to Gulf Coast and Midwest refining markets and (ii) deliver refined products from those markets to major demand centers. Our assets also include interests in entities that own natural gas and refinery gas pipelines that transport offshore natural gas to market hubs and deliver refinery gas from refineries and plants to chemical sites along the Gulf Coast.
For more information on Shell Midstream Partners and the assets owned by the Partnership, please visit www.shellmidstreampartners.com.
FORWARD LOOKING STATEMENTS
This press release includes various “forward-looking statements.” All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. You can identify our forward-looking statements by words such as “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “goals”, “objectives”, “outlook”, “intend”, “plan”, “predict”, “project”, “risks”, “schedule”, “seek”, “target”, “could”, “may”, “should” or “would” or other similar expressions that convey the uncertainty of future events or outcomes. These statements are accompanied by cautionary language identifying important factors, though not necessarily all such factors, which could cause future outcomes to differ materially from those set forth in forward-looking statements. In particular, expressed or implied statements concerning future growth, future actions, future investment, volumes, capital requirements, conditions or events, future impact of prior acquisitions, future operating results or the ability to generate sales, income or cash flow are forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future actions, conditions or events and future results of operations may differ materially from those expressed in these forward-looking statements. Forward-looking statements speak only as of the date of this press release, December 21, 2018, and we disclaim any obligation to update such statements for any reason, except as required by law. All forward-looking statements contained in this document are expressly qualified in their entirety by the cautionary statements contained or referred to in this paragraph. Many of the factors that will determine these results are beyond our ability to control or predict. These factors include the risk factors described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017, as updated by the information in our other filings with the U.S. Securities and Exchange Commission. If any of those risks occur, it could cause our actual results to differ materially from those contained in any forward-looking statement. Because of these risks and uncertainties, you should not place undue reliance on any forward-looking statement.
December 21, 2018
Inquiries:
Shell Media Relations
Americas: +1 832 337 4355
Shell Investor Relations
North America: +1 832 337 2034