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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 December31,  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 April25, 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 December31, 2012  and 
2011 also include the results of operations for Tesoro Logistics LP ("TLLP" or
the "Partnership")  for the  period beginning  April26, 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  September14,  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)

                           December31,  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 January23, 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

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Source: Tesoro Logistics LP via Thomson Reuters ONE
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