Tesoro Logistics LP : Tesoro Logistics LP Reports 2012 Fourth Quarter and Full Year Results
Tesoro Logistics LP : Tesoro Logistics LP Reports 2012 Fourth Quarter and Full
Year Results
SAN ANTONIO - February 11, 2013 - Tesoro Logistics LP (NYSE: TLLP) ("TLLP" or
the "Partnership") today reported fourth quarter 2012 net income of $15.7
million, or $0.53 per diluted common limited partner unit. This amount
includes historical results reported by the predecessor on assets TLLP
acquired during the quarter. Excluding predecessor results, TLLP earned net
income of $16.6 million.
For the twelve months ended December 31, 2012 (the "2012 Period"), the
Partnership reported net income of $55.5 million, or $1.89 per diluted common
limited partner unit. Excluding historical results reported by the
predecessor on assets acquired during the 2012 Period, TLLP reported net
income of $56.8 million.
Distributable cash flow, excluding predecessor results, for the fourth quarter
was $19.6 million. On January 23, 2013, the Partnership announced its
quarterly cash distribution of $22.9 million, or $0.4725 per limited
partnership unit, or $1.89 on an annualized basis. This distribution
represents a four percent increase over the quarterly distribution of $0.4550
per unit ($1.82 per unit on an annualized basis) paid in November 2012 and a
thirty percent increase over the fourth quarter 2011 distribution paid in
February 2012. Distributable cash flow, excluding predecessor results, for
the 2012 Period was $67.0 million.
"This was another strong quarter for TLLP as we continued to capture the
benefits of our growth strategy," said Greg Goff, TLLP's Chairman and Chief
Executive Officer. "We continued to focus on delivering organic growth from
our existing assets with the expansion of our proprietary trucking fleet and
increasing volumes through the High Plains System. We captured the first full
quarter from the Long Beach assets acquisition and completed the third asset
purchase from Tesoro with the acquisition of the Anacortes Rail Facility.
Additionally, we announced the acquisition of the Chevron Northwest Products
System which will be immediately accretive and adds significant third party
revenue."
Fourth Quarter 2012 Highlights
Results of operations for the three months ended December 31, 2012 include the
historical results prior to our acquisition of the Anacortes Rail Facility
acquired from Tesoro Refining and Marketing Company ("Tesoro") during the
quarter. As a result, operating income and volumes are not comparable on a
period-to-period basis. We have provided additional information that is
comparable on a period-to-period basis focusing on the results of operations
of TLLP assets following their acquisition from Tesoro and excluding
predecessor results of operations. A reconciliation of the TLLP results to
the full fourth quarter results can be found in the attached tables.
Revenues for the fourth quarter totaled $47.7 million which were up $6.9
million from the prior quarter, excluding predecessor results. Volumes and
revenues within the Crude Oil Gathering segment increased over the prior
quarter, driven by strong demand for crude oil in the Bakken region.
Additionally, revenues in the Terminalling, Transportation and Storage
segment increased quarter over quarter due to a full quarter's throughput
contribution from the Long Beach assets acquired mid-third quarter and a
partial quarter contribution from the Anacortes Rail Unloading Facility.
Total costs and expenses for the fourth quarter were $26.5 million. Excluding
predecessor results, total costs and expenses for the fourth quarter totaled
$25.6 million, which were up $2.1 million from the prior quarter. The
increase in operating expenses during the quarter is primarily attributable to
a full quarter's operation of the Long Beach assets and the addition of the
Anacortes Rail Unloading Facility during the fourth quarter. Costs for the
fourth quarter include $1.2 million of transaction costs related to the
recently acquired assets and the announced acquisition of the Chevron
Northwest Products System.
The resulting EBITDA for the fourth quarter was $25.7 million, excluding
predecessor results.
On October 5, 2012, TLLP closed a public offering of 4,255,000 common units at
an offering price of $41.80 per unit, which included a 555,000 unit
over-allotment option that was exercised by the underwriters. Net proceeds to
TLLP from the sale of the units were approximately $171 million.
On November 15, 2012, TLLP purchased the Anacortes Rail Unloading Facility
owned by Tesoro's subsidiary, Tesoro Refining and Marketing Company, for a
purchase price of $180 million, which included cash of $162 million and Tesoro
Logistics equity valued at approximately $18 million. In connection with the
closing of the transaction, Tesoro and the Partnership entered into a
throughput and use agreement for the rail unloading facility. The Anacortes
Rail Unloading Facility added about $2.4 million of segment EBITDA following
its acquisition on November 15, 2012.
On December 11, 2012, TLLP announced that it had executed a definitive
agreement to purchase Chevron Pipe Line Company's Northwest Products System
for $400 million. The Northwest Products System allows TLLP to grow its
portfolio of well-positioned, fee-based logistics assets in the western U.S.,
while significantly increasing third-party revenue. The Northwest Products
System is expected to generate annual EBITDA of about $33 million in the first
twelve months post-closing. The transaction is expected to close during the
first quarter of 2013, subject to regulatory approval.
On January 4, 2013 TLLP amended its $300 million revolving credit facility to
increase the capacity to $500 million and reduce interest rates in support of
our expanding operations and opportunities.
On January 14, 2013, TLLP closed a public offering of 9,775,000 common units
at an offering price of $41.70 per unit, which included a 1,275,000 unit
over-allotment option that was exercised by the underwriters. The Partnership
expects to use net proceeds from the offering, totaling approximately $392
million, to fund a portion of the consideration for the Partnership's
announced acquisition of Chevron Pipe Line Company's Northwest Products
System.
2012 Highlights
Revenues for the 2012 Period totaled $156.8 million. Excluding predecessor
results, revenues for the 2012 Period totaled $148.8 million. Relative to the
fourth quarter of 2011, the Partnership ended the year with pipeline
throughput volumes in the Crude Oil Gathering segment up almost thirty
percent, driven by expansion of Tesoro's Mandan Refinery, additional volumes
destined for Tesoro's Anacortes refinery and the establishment of
interconnection points with other regional pipelines at Richey, Montana and
Dry Fork, North Dakota. For the base assets within the Terminalling,
Transportation and Storage segment, five terminals set record annual
throughput volumes for the year, driven by continued optimization efforts, the
physical expansion of the Vancouver terminal and the revision of the ethanol
permit at the Los Angeles terminal. Total EBITDA for the 2012 Period was
$76.7 million, excluding predecessor results.
The Partnership continues to be focused on driving EBITDA growth into the
future through the completion of current and future organic growth projects
within the Crude Oil Gathering and Terminalling, Transportation and Storage
segments, as well as the successful integration of the Northwest Products
System. Excluding announced acquisitions, which are currently pending
regulatory approval, the Partnership expects to generate EBITDA of about $140
million in 2013.
Public Invited to Listen to Analyst Conference Call
At 7:30 a.m. CST on February 12, 2013, TLLP will broadcast, live, its
conference call with analysts regarding fourth quarter 2012 and annual results
and other business matters. Interested parties may listen to the live
conference call over the Internet by logging on to
http://www.tesorologistics.com.
About Tesoro Logistics LP
Tesoro Logistics LP, headquartered in San Antonio, Texas, is a fee-based,
growth-oriented Delaware limited partnership formed by Tesoro Corporation to
own, operate, develop and acquire crude oil and refined products logistics
assets.
This earnings release contains certain statements that are "forward-looking"
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, concerning expected growth
projects and our expectations about 2013 EBITDA, as well as expectations
regarding the timing and benefits of the Chevron Northwest Products System
acquisition, including expectations regarding accretion, third party revenue,
EBITDA contribution and integration. For more information concerning factors
that could affect these statements see our annual report on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K filed with the
Securities and Exchange Commission. We undertake no obligation to publicly
release the result of any revisions to any such forward-looking statements
that may be made to reflect events or circumstances that occur, or which we
become aware of, after the date hereof.
Contact:
Investors:
Louie Rubiola, Director, Investor Relations, (210) 626-4355
Media:
Tesoro Media Relations, media@tsocorp.com, (210) 626-7702
Results of Operations (Unaudited)
Factors Affecting Comparability
The following tables present net income, distributable cash flow, earnings
before interest, income taxes, depreciation and amortization expenses
("EBITDA") and related operational information for the three and twelve months
ended December 31, 2012 and 2011. The information presented contains the
unaudited combined financial results of Tesoro Logistics LP Predecessor (the
"TLLP Predecessor"), our predecessor for accounting purposes, for periods
presented through April 25, 2011. The TLLP Predecessor includes the financial
results of the initial assets acquired from Tesoro during the initial public
offering (the "Initial Offering"). The unaudited combined consolidated
financial results for the three and twelve months ended December 31, 2012 and
2011 also include the results of operations for Tesoro Logistics LP ("TLLP" or
the "Partnership") for the period beginning April 26, 2011, the date TLLP
commenced operations.
The financial information contained herein of the TLLP Predecessor and TLLP
have been retrospectively adjusted to include the historical results of the
Martinez crude oil marine terminal assets (collectively, the "Martinez Crude
Oil Marine Terminal") prior to the acquisition through April 1, 2012, the Long
Beach marine terminal assets and related short-haul pipelines, including the
Los Angeles short-haul pipelines (collectively, the "Long Beach Assets") prior
to the acquisition through September 14, 2012 and the Anacortes rail car
unloading facility assets (collectively, the "Anacortes Rail Facility") prior
to the acquisition through November 15, 2012. We refer to the historical
results of the TLLP Predecessor, the Martinez Crude Oil Marine Terminal, the
Long Beach Assets and the Anacortes Rail Facility prior to the acquisition
dates collectively as our "Predecessor(s)." The results of the Martinez Crude
Oil Marine Terminal, the Long Beach Assets and the Anacortes Rail Facility are
included in the Terminalling, Transportation and Storage segment.
Our Predecessors generally recognized only the costs and did not record
revenue for transactions with Tesoro in the Terminalling, Transportation and
Storage segment or for trucking services in the Crude Oil Gathering segment
prior to the Initial Offering and the subsequent acquisitions. Accordingly,
the revenues in our Predecessors' historical combined financial statements
relate only to amounts received from third parties for these services and
amounts received from affiliates with respect to transportation regulated by
the Federal Energy Regulatory Commission and the North Dakota Public Service
Commission on our High Plains system. Affiliate revenues have been recorded
for all of our assets in the Crude Oil Gathering segment and the Terminalling,
Transportation and Storage segment subsequent to the commencement of the
commercial agreements with Tesoro upon completion of the Initial Offering and
subsequent acquisitions. As a result, the information included in the
following tables is not comparable on a year-over-year basis.
TESORO LOGISTICS LP
RESULTS OF OPERATIONS
(Unaudited)
(In thousands, except units and per unit amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
REVENUES (a)
Crude Oil Gathering $ 21,410 $ 14,912 $ 72,432 $ 44,959
Terminalling,
Transportation and
Storage 26,328 14,545 84,407 42,378
Total Revenues 47,738 29,457 156,839 87,337
COSTS AND EXPENSES
Operating and
maintenance expenses 18,091 14,006 63,083 47,149
Depreciation and
amortization expenses 3,934 2,828 13,057 11,277
General and
administrative
expenses (a) 4,155 2,778 15,713 8,776
Loss on asset
disposals 278 - 535 26
Total Costs and
Expenses 26,458 19,612 92,388 67,228
OPERATING INCOME 21,280 9,845 64,451 20,109
Less: Interest and
financing costs, net 5,632 548 8,992 1,610
Add: Interest income 48 - 48 -
NET INCOME 15,696 9,297 55,507 18,499
Less: Loss
attributable to
Predecessors (876 ) (2,249 ) (1,284 ) (16,069 )
Net income
attributable to
partners 16,572 11,546 56,791 34,568
Less: General
partner's interest in
net income, including
incentive distribution
rights 1,238 232 2,674 692
Limited partners'
interest in net income $ 15,334 $ 11,314 $ 54,117 $ 33,876
Net income per limited
partner unit:
Common - basic $ 0.53 $ 0.37 $ 1.90 $ 1.11
Common - diluted $ 0.53 $ 0.37 $ 1.89 $ 1.11
Subordinated - basic
and diluted $ 0.30 $ 0.37 $ 1.47 $ 1.11
Weighted average
limited partner units
outstanding:
Common units - basic 20,158,703 15,254,890 16,614,668 15,254,890
Common units - diluted 20,270,174 15,275,844 16,708,950 15,282,366
Subordinated units -
basic and diluted 15,254,890 15,254,890 15,254,890 15,254,890
Cash distributions per
unit (b) $ 0.4725 $ 0.3625 $ 1.7150 $ 0.9573
TESORO LOGISTICS LP
RESULTS OF OPERATIONS
RECONCILIATION OF PARTNERSHIP AND PREDECESSOR (c)
(Unaudited)
(In thousands)
Three Months Ended
Tesoro Logistics LP Predecessors December 31, 2012
REVENUES (a)
Crude Oil Gathering $ 21,410 $ - $ 21,410
Terminalling,
Transportation and
Storage 26,328 - 26,328
Total Revenues 47,738 - 47,738
COSTS AND EXPENSES
Operating and
maintenance expenses 17,621 470 18,091
Depreciation and
amortization expenses 3,534 400 3,934
General and
administrative expenses
(a) 4,149 6 4,155
Loss on asset disposals 278 - 278
Total Costs and
Expenses 25,582 876 26,458
OPERATING INCOME (LOSS) 22,156 (876 ) 21,280
Less: Interest and
financing costs, net 5,632 - 5,632
Add: Interest income 48 - 48
NET INCOME (LOSS) 16,572 (876 ) 15,696
Less: Loss attributable
to Predecessors - (876 ) (876 )
Net income attributable
to partners $ 16,572 $ - $ 16,572
Year Ended
Tesoro Logistics LP Predecessors December 31, 2012
REVENUES (a)
Crude Oil Gathering $ 72,432 $ - $ 72,432
Terminalling,
Transportation and
Storage 76,416 7,991 84,407
Total Revenues 148,848 7,991 156,839
COSTS AND EXPENSES
Operating and
maintenance expenses 56,587 6,496 63,083
Depreciation and
amortization expenses 10,969 2,088 13,057
General and
administrative expenses
(a) 15,266 447 15,713
Loss on asset disposals 291 244 535
Total Costs and Expenses 83,113 9,275 92,388
OPERATING INCOME (LOSS) 65,735 (1,284 ) 64,451
Less: Interest and
financing costs, net 8,992 - 8,992
Add: Interest income 48 - 48
NET INCOME (LOSS) 56,791 (1,284 ) 55,507
Less: Loss attributable
to Predecessors - (1,284 ) (1,284 )
Net income attributable
to partners $ 56,791 $ - $ 56,791
TESORO LOGISTICS LP
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
(Unaudited)
(In thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
Reconciliation of EBITDA and
Distributable Cash Flow to Net
Income:
Net income $ 15,696 $ 9,297 $ 55,507 $ 18,499
Add: Depreciation and
amortization expenses 3,934 2,828 13,057 11,277
Add: Interest and financing
costs, net 5,632 548 8,992 1,610
Less: Interest income 48 - 48 -
EBITDA (c) $ 25,214 $ 12,673 $ 77,508 $ 31,386
Less: Maintenance capital
expenditures (d) 3,794 2,849 10,719 8,268
Less: Interest and financing
costs, net 5,632 548 8,992 1,610
Add: Reimbursement for
maintenance capital
expenditures (d) 3,241 - 6,169 8
Add: Non-cash unit-based
compensation expense 328 178 1,191 479
Add: Loss on asset disposals 278 - 535 26
Add: Change in deferred revenue
related to shortfall payments 130 - 309 -
Add: Interest income 48 - 48 -
Add: Other reimbursements (703 ) - - -
Distributable Cash Flow (c) $ 19,110 $ 9,454 $ 66,049 $ 22,021
Reconciliation of EBITDA to Net Cash from Operating
Activities:
Net cash from operating
activities $ 23,834 $ 12,261 $ 77,505 $ 26,505
Less: Changes in assets and
liabilities 3,115 (196 ) 6,068 (4,196 )
Less: Amortization of debt
issuance costs 483 154 1,147 420
Less: Unit-based compensation
expense 328 178 1,191 479
Less: Loss on asset disposals 278 - 535 26
Less: Interest income 48 - 48 -
Add: Interest and financing
costs, net 5,632 548 8,992 1,610
EBITDA (c) $ 25,214 $ 12,673 $ 77,508 $ 31,386
TESORO LOGISTICS LP
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
RECONCILIATION OF PARTNERSHIP AND PREDECESSORS (c)
(Unaudited)
(In thousands)
Three Months
Ended
Tesoro Logistics LP Predecessors December 31, 2012
Reconciliation of EBITDA
and Distributable Cash
Flow to Net Income
(Loss):
Net income (loss) $ 16,572 $ (876 ) $ 15,696
Add: Depreciation and
amortization expenses 3,534 400 3,934
Add: Interest and
financing costs, net 5,632 - 5,632
Less: Interest income 48 - 48
EBITDA (c) $ 25,690 $ (476 ) $ 25,214
Less: Maintenance
capital expenditures (d) 3,794 - 3,794
Less: Interest and
financing costs, net 5,632 - 5,632
Add: Reimbursement for
maintenance capital
expenditures (d) 3,241 - 3,241
Add: Non-cash unit-based
compensation expense 328 - 328
Add: Loss on asset
disposals 278 - 278
Add: Change in deferred
revenue related to
shortfall payments 130 - 130
Add: Interest income 48 - 48
Add: Other
reimbursements (703 ) - (703 )
Distributable Cash Flow
(c) $ 19,586 $ (476 ) $ 19,110
Reconciliation of EBITDA
to Net Cash from (used
in) Operating
Activities:
Net cash from (used in)
operating activities $ 23,666 $ 168 $ 23,834
Less: Changes in assets
and liabilities 2,471 644 3,115
Less: Amortization of
debt issuance costs 483 - 483
Less: Unit-based
compensation expense 328 - 328
Less: Loss on asset
disposals 278 - 278
Less: Interest income 48 - 48
Add: Interest and
financing costs, net 5,632 - 5,632
EBITDA (c) $ 25,690 $ (476 ) $ 25,214
Tesoro Logistics Year Ended
LP Predecessors December 31, 2012
Reconciliation of EBITDA
and Distributable Cash Flow
to Net Income (Loss):
Net income (loss) $ 56,791 $ (1,284 ) $ 55,507
Add: Depreciation and
amortization expenses 10,969 2,088 13,057
Add: Interest and financing
costs, net 8,992 - 8,992
Less: Interest income 48 - 48
EBITDA (c) $ 76,704 $ 804 $ 77,508
Less: Maintenance capital
expenditures (d) 8,701 2,018 10,719
Less: Interest and
financing costs, net 8,992 - 8,992
Add: Reimbursement for
maintenance capital
expenditures (d) 6,169 - 6,169
Add: Non-cash unit-based
compensation expense 1,191 - 1,191
Add: Loss on asset
disposals 291 244 535
Add: Change in deferred
revenue related to
shortfall payments 309 - 309
Add: Interest income 48 - 48
Distributable Cash Flow (c) $ 67,019 $ (970 ) $ 66,049
Reconciliation of EBITDA to
Net Cash from Operating
Activities:
Net cash from operating
activities $ 75,763 $ 1,742 $ 77,505
Less: Changes in assets and
liabilities 5,374 694 6,068
Less: Amortization of debt
issuance costs 1,147 - 1,147
Less: Unit-based
compensation expense 1,191 - 1,191
Less: Loss on asset
disposals 291 244 535
Less: Interest income 48 - 48
Add: Interest and financing
costs, net 8,992 - 8,992
EBITDA (c) $ 76,704 $ 804 $ 77,508
TESORO LOGISTICS LP
SELECTED OPERATING SEGMENT DATA
(Unaudited)
(In thousands, except barrel and per barrel amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
OPERATING SEGMENTS
CRUDE OIL GATHERING
Pipeline:
Pipeline revenues $ 9,190 $ 7,558 $ 33,012 $ 26,839
Pipeline throughput (barrels per
day ("bpd")) (e) 77,459 60,064 66,615 57,900
Average pipeline revenue per
barrel (f) $ 1.29 $ 1.37 $ 1.35 $ 1.27
Trucking:
Trucking revenues (a) $ 12,220 $ 7,354 $ 39,420 $ 18,120
Trucking volume (bpd) 46,837 27,007 37,537 24,059
Average trucking revenue per
barrel (f) $ 2.84 $ 2.96 $ 2.87 $ 2.06
Total Revenues $ 21,410 $ 14,912 $ 72,432 $ 44,959
Costs and Expenses:
Operating and maintenance
expenses $ 12,063 $ 7,847 $ 39,774 $ 23,721
Depreciation and amortization
expenses 901 786 3,383 3,141
General and administrative
expenses (a) 511 483 2,875 1,304
Gain on asset disposals - - - (10 )
Total Costs and Expenses 13,475 9,116 46,032 28,156
CRUDE OIL GATHERING SEGMENT
OPERATING INCOME $ 7,935 $ 5,796 $ 26,400 $ 16,803
TERMINALLING, TRANSPORTATION AND STORAGE
Terminalling:
Terminalling revenues (a) $ 23,092 $ 11,610 $ 71,896 $ 34,077
Terminalling throughput (bpd) (g) 383,660 328,794 344,431 314,386
Average terminalling revenue per
barrel (f) $ 0.65 $ 0.38 $ 0.57 $ 0.30
Pipeline transportation:
Pipeline transportation revenues
(a) $ 1,856 $ 1,597 $ 7,072 $ 4,673
Pipeline transportation
throughput (bpd) (g) 79,129 91,757 88,857 90,721
Average pipeline transportation
revenue per barrel (f) $ 0.25 $ 0.19 $ 0.22 $ 0.14
Storage:
Storage revenues (a) $ 1,380 $ 1,338 $ 5,439 $ 3,628
Storage capacity reserved (shell
capacity barrels) 878,000 878,000 878,000 878,000
Storage revenue per barrel on
shell capacity (per month) (f) $ 0.52 $ 0.51 $ 0.52 $ 0.50
Total Revenues $ 26,328 $ 14,545 $ 84,407 $ 42,378
Costs and Expenses:
Operating and maintenance
expenses $ 6,028 $ 6,159 $ 23,309 $ 23,428
Depreciation and amortization
expenses 3,033 2,042 9,674 8,136
General and administrative
expenses (a) 647 794 3,131 2,352
Loss on asset disposals 278 - 535 36
Total Costs and Expenses 9,986 8,995 36,649 33,952
TERMINALLING, TRANSPORTATION AND
STORAGE SEGMENT OPERATING INCOME $ 16,342 $ 5,550 $ 47,758 $ 8,426
TESORO LOGISTICS LP
SELECTED OPERATING SEGMENT DATA
RECONCILIATION OF PARTNERSHIP AND PREDECESSOR (c)
(Unaudited)
(In thousands, except barrel and per barrel amounts)
Tesoro Logistics Three Months Ended
LP Predecessors December 31, 2012
REVENUES (a)
Terminalling revenues $ 23,092 $ - $ 23,092
Pipeline transportation
revenues 1,856 - 1,856
Storage revenues 1,380 - 1,380
Total Revenues 26,328 - 26,328
COSTS AND EXPENSES
Operating and maintenance
expenses 5,558 470 6,028
Depreciation and
amortization expenses 2,633 400 3,033
General and administrative
expenses (a) 641 6 647
Loss on asset disposals 278 - 278
Total Costs and Expenses 9,110 876 9,986
TERMINALLING,
TRANSPORTATION AND STORAGE
SEGMENT OPERATING INCOME
(LOSS) $ 17,218 $ (876 ) $ 16,342
VOLUMES (bpd)
Terminalling throughput 366,574
Average terminalling
revenue per barrel (f) $ 0.68
Pipeline transportation
throughput 79,129
Average pipeline
transportation revenue per
barrel (f) $ 0.25
Storage capacity reserved
(shell capacity barrels) 878,000
Storage revenue per barrel
on shell capacity (per
month) (f) $ 0.52
Tesoro Logistics Year Ended
LP Predecessors December 31, 2012
REVENUES (a)
Terminalling revenues $ 64,158 $ 7,738 $ 71,896
Pipeline transportation
revenues 6,819 253 7,072
Storage revenues 5,439 - 5,439
Total Revenues 76,416 7,991 84,407
COSTS AND EXPENSES
Operating and maintenance
expenses 16,813 6,496 23,309
Depreciation and
amortization expenses 7,586 2,088 9,674
General and administrative
expenses (a) 2,684 447 3,131
Loss on asset disposals 291 244 535
Total Costs and Expenses 27,374 9,275 36,649
TERMINALLING,
TRANSPORTATION AND STORAGE
SEGMENT OPERATING INCOME
(LOSS) $ 49,042 $ (1,284 ) $ 47,758
VOLUMES (bpd)
Terminalling throughput 245,250
Average terminalling
revenue per barrel (f) $ 0.71
Pipeline transportation
throughput 72,933
Average pipeline
transportation revenue per
barrel (f) $ 0.26
Storage capacity reserved
(shell capacity barrels) 878,000
Storage revenue per barrel
on shell capacity (per
month) (f) $ 0.52
TESORO LOGISTICS LP
SELECTED FINANCIAL DATA
(Unaudited)
(In thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
Capital Expenditures
Expansion $ 12,260 $ 6,887 $ 80,633 $ 10,418
Maintenance (d) 3,794 2,849 10,719 8,268
Total Capital Expenditures $ 16,054 $ 9,736 $ 91,352 $ 18,686
TESORO LOGISTICS LP
SELECTED FINANCIAL DATA
RECONCILIATION OF PARTNERSHIP AND PREDECESSOR (c)
(Unaudited)
(In thousands)
Three Months Ended
Tesoro Logistics LP Predecessors December 31, 2012
Capital Expenditures
Expansion $ 9,674 $ 2,586 $ 12,260
Maintenance (d) 3,794 - 3,794
Total Capital
Expenditures $ 13,468 $ 2,586 $ 16,054
Year Ended
Tesoro Logistics LP Predecessors December 31, 2012
Capital Expenditures
Expansion $ 29,152 $ 51,481 $ 80,633
Maintenance (d) 8,701 2,018 10,719
Total Capital
Expenditures $ 37,853 $ 53,499 $ 91,352
TESORO LOGISTICS LP
SELECTED FINANCIAL DATA
(Unaudited)
(In thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
General and Administrative Expenses
(a)
Crude Oil Gathering $ 511 $ 483 $ 2,875 $ 1,304
Terminalling, Transportation and
Storage 647 794 3,131 2,352
Unallocated 2,997 1,501 9,707 5,120
Total General and Administrative
Expenses $ 4,155 $ 2,778 $ 15,713 $ 8,776
TESORO LOGISTICS LP
BALANCE SHEET DATA
(Unaudited)
(In thousands)
December 31, December 31,
2012 2011
Cash and cash equivalents $ 19,290 $ 18,326
Total Assets 363,178 233,809
Total Debt 354,032 50,000
Total Equity (Deficit) (18,123 ) 166,672
TESORO LOGISTICS LP
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
ANACORTES RAIL FACILITY, EXCLUDING PREDECESSOR (c)
(Unaudited)
(In thousands)
Three Months Ended
December 31, 2012
Reconciliation of EBITDA to Net Income:
Net income $ 1,138
Less: Loss attributable to Predecessor (876 )
Net income, excluding Predecessor $ 2,014
Add: Depreciation and amortization expenses 383
Add: Interest and financing costs, net -
EBITDA (c) $ 2,397
TESORO LOGISTICS LP
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
LONG BEACH ASSETS
(Unaudited)
(In thousands)
Three Months Ended
December 31, 2012
Reconciliation of EBITDA to Net Income:
Net income $ 4,076
Add: Depreciation and amortization expenses 449
Add: Interest and financing costs, net -
EBITDA (c) $ 4,525
TESORO LOGISTICS LP
RECONCILIATION OF FORECASTED EBITDA TO AMOUNTS UNDER U.S. GAAP
(Unaudited)
(In millions)
Chevron Northwest Products System
Twelve Months Post-Closing
Reconciliation of Forecasted EBITDA to
Forecasted Net Income:
Forecasted net income $ 3.0
Add: Depreciation and amortization expenses 18.0
Add: Interest and financing costs, net (h) 12.0
Forecasted EBITDA (c) $ 33.0
Full Year 2013
Excluding Announced Acquisitions
Reconciliation of Forecasted EBITDA to
Forecasted Net Income:
Forecasted net income $ 101.0
Add: Depreciation and amortization expenses 17.5
Add: Interest and financing costs, net 21.5
Forecasted EBITDA (c) $ 140.0
_____________
(a) See discussion of the factors affecting comparability noted on page 4.
The Partnership's results of operations may not be comparable to the
Predecessors' historical results of operations for the reasons described
below:
Revenues-- There are differences in the way our Predecessors recorded
revenues and the way the Partnership records revenues after completion of the
Initial Offering and subsequent acquisitions as discussed under "Factors
Affecting Comparability."
General and Administrative Expenses-- Our Predecessors' general and
administrative expenses included direct charges for the management and
operation of our logistics assets and certain expenses allocated by Tesoro for
general corporate services, such as treasury, accounting and legal services.
These expenses were charged, or allocated, to our Predecessors based on the
nature of the expenses. Tesoro continues to charge the Partnership a
combination of direct charges for the management and operation of our
logistics assets and a fixed annual fee for general corporate services, such
as treasury, accounting and legal services. We also incur additional
incremental general and administrative expenses as a result of being a
separate publicly-traded partnership.
(b) On January 23, 2013, we declared a quarterly cash distribution of
$0.4725 per limited partner unit for the fourth quarter of 2012.
(c) We define EBITDA as net income (loss) before net interest and financing
costs, interest income and depreciation and amortization expenses. We define
distributable cash flow as EBITDA less net interest and financing costs and
maintenance capital expenditures, plus interest income, loss on asset
disposals, the change in deferred revenue related to shortfall payments,
reimbursement by Tesoro for certain maintenance capital expenditures and other
reimbursements by Tesoro and non-cash unit-based compensation expense. EBITDA
and distributable cash flow are not measures prescribed by U.S. GAAP
("non-GAAP") but are supplemental financial measures that are used by
management and may be used by external users of our combined consolidated
financial statements, such as industry analysts, investors, lenders and rating
agencies, to assess:
* our operating performance as compared to other publicly traded
partnerships in the midstream energy industry, without regard to
historical cost basis or financing methods;
* the ability of our assets to generate sufficient cash flow to make
distributions to our unitholders;
* our ability to incur and service debt and fund capital expenditures; and
* the viability of acquisitions and other capital expenditure projects and
the returns on investment of various investment opportunities.
We believe that the presentation of EBITDA will provide useful information to
investors in assessing our financial condition and results of operations. The
U.S. GAAP measures most directly comparable to EBITDA are net income (loss)
and net cash from (used in) operating activities. EBITDA should not be
considered as an alternative to U.S. GAAP net income (loss) or net cash from
(used in) operating activities. EBITDA has important limitations as an
analytical tool, because it excludes some, but not all, items that affect net
income (loss) and net cash from (used in) operating activities.
We believe that the presentation of distributable cash flow will provide
useful information to investors as it is a widely accepted financial indicator
used by investors to compare partnership performance, as it provides investors
an enhanced perspective of the operating performance of our assets and the
cash our business is generating. The U.S. GAAP measure most directly
comparable to distributable cash flow is net income (loss). The amounts
included in the calculation of distributable cash flow are derived from
amounts separately presented in our combined consolidated financial
statements, with the exception of deferred revenue related to shortfall
payments, maintenance capital expenditures, reimbursement by Tesoro for
certain maintenance capital expenditures and other reimbursements by Tesoro.
We also include the results of our operations excluding the results of our
Predecessors. We believe that the presentation of our results of operations
and capital expenditures excluding results of our Predecessors will provide
useful information to investors in assessing our financial condition and
results of operations. We believe investors want to analyze operations of our
business under our current commercial agreements with Tesoro.
These non-GAAP financial metrics should not be considered in isolation or as a
substitute for analysis of our results as reported under U.S. GAAP. Our
definitions of these non-GAAP financial metrics may not be comparable to
similarly titled measures of other companies, because they may be defined
differently by other companies in our industry, thereby limiting their
utility.
(d) Maintenance capital expenditures include expenditures required to
maintain equipment, equipment reliability, tankage and pipeline integrity and
safety, and to address environmental regulations.
(e) Also includes barrels that were gathered and then delivered into our
High Plains Pipeline by truck.
(f) Management uses average revenue per barrel and storage revenue per
barrel on shell capacity to evaluate performance and compare profitability to
other companies in the industry. There are a variety of ways to calculate
average revenue per barrel; different companies may calculate it in different
ways. We calculate average revenue per barrel as revenue divided by the
number of days in the period divided by throughput (bpd). We calculate storage
revenue per barrel on shell capacity as revenue divided by number of months in
the period divided by shell capacity barrels. Investors and analysts use this
financial measure to help analyze and compare companies in the industry on the
basis of operating performance. These financial measures should not be
considered as an alternative to segment operating income, revenues and
operating expenses or any other measure of financial performance presented in
accordance with U.S. GAAP.
(g) Terminalling throughput volumes were higher in the three months and year
ended December 31, 2012 primarily as a result of the completion of the
Anacortes Rail Facility in September 2012. Pipeline transportation throughput
volumes in the three months and year ended December 31, 2012 were lower as a
result of lower throughput volumes in 2012 related to Tesoro's refinery
maintenance activities.
(h) Forecasted net interest and financing costs associated with the Chevron
Northwest Products System acquisition assumes an equal split of debt and
equity financing.
TLLP - 2012 4Q and FY Results
------------------------------------------------------------------------------
This announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of
the
information contained therein.
Source: Tesoro Logistics LP via Thomson Reuters ONE
HUG#1677252
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