Northern Tier Energy Reports Full Year and Fourth Quarter 2012 Results

    Northern Tier Energy Reports Full Year and Fourth Quarter 2012 Results

PR Newswire

RIDGEFIELD, Conn., March 13, 2013

RIDGEFIELD, Conn., March 13, 2013 /PRNewswire/ --Northern Tier Energy LP and
its subsidiaries (NYSE:NTI) ("Northern Tier Energy") today reported full year
2012 net income of $197.6 million compared to $28.3 million of net income for
the full year 2011.

Net income for a respective reporting period may include the following special
items: (i) contingent consideration loss (income), (ii) unrealized gains
(losses) from derivative activities and (iii) a loss on early extinguishment
of debt. Excluding these special items, full year 2012 Adjusted Net Income
was $283.9 million compared to full year 2011 Adjusted Net Income of $14.4
million.

Adjusted EBITDA for the full year 2012 was $739.7 million compared to Adjusted
EBITDA of $430.7 million for the full year 2011. This improvement is
primarily driven by favorable operating results in the Refining segment.

Fourth quarter 2012 net income was $84.5 million (or $0.92 per unit) compared
with fourth quarter 2011 net income of $292.7 million. Excluding the special
items previously noted, fourth quarter 2012 Adjusted Net Income was $99.1
million (or $1.08 per unit) compared to a fourth quarter 2011 Adjusted Net
Loss of $18.1 million.

Adjusted EBITDA for the fourth quarter 2012 was $162.4 million, an increase of
$95.9 million compared to $66.5 million for the fourth quarter 2011. This
increase is primarily driven by favorable operating results in the Refining
segment.

Quarterly Distribution

On February 11, 2013, the Board of Directors of Northern Tier Energy GP LLC,
the general partner of Northern Tier Energy LP, declared a quarterly
distribution of $1.27 per unit that was paid in cash on February 28, 2013 to
common unit holders of record as of the close of business on February 21,
2013. Cash available for distribution totaled $116.7 million for the fourth
quarter 2012.

This was the second cash distribution paid by Northern Tier Energy since its
initial public offering ("IPO") in July 2012 and results in cumulative cash
distributions since the IPO of $2.75 per common unit. Northern Tier Energy LP
is a variable distribution master limited partnership. As a result, its
quarterly distributions, if any, will vary from quarter to quarter as a result
of variations in, among other factors, (i) its operating performance, (ii)
cash flows caused by fluctuations in the prices it pays for crude oil and
other feedstocks and the prices it receives for finished products, (iii)
capital expenditures, (iv) potential cash reserves or payments relating to
working capital fluctuations and (v) other cash reserves deemed necessary or
appropriate by the board of directors of its general partner.

Fourth Quarter Operating Segment Highlights

Refining Segment

The Refining segment's operating income was $147.0 million for the fourth
quarter 2012 compared to $61.5 million for the fourth quarter 2011. Refining
gross product margins were $24.49 per barrel of throughput for the fourth
quarter 2012 compared to $14.16 per barrel for the fourth quarter 2011. This
increase is primarily due to favorable benchmark crack spreads as well as
favorable crude oil price differentials versus the benchmark WTI crude oil
prices in the 2012 fourth quarter compared to the 2011 fourth quarter.

In addition to higher product margins per barrel, throughput and sales volumes
increased compared to the prior year quarter. Total throughput was 90,265
barrels per day for the fourth quarter 2012 compared to 83,335 barrels per day
for the prior year quarter. Sales volumes increased to 95,722 barrels per day
for the fourth quarter 2012 from 88,615 barrels per day for the fourth quarter
2011.

Retail Segment

Retail operating income was $3.5 million in the fourth quarter 2012 compared
to $6.8 million in the fourth quarter 2011. Fuel margins were $0.20 per
gallon for the fourth quarter 2012 compared to $0.22 per gallon for the fourth
quarter 2011. Fuel gallons sold at company-operated retail stores increased
by 3.3% from the prior year period.

Liquidity and Capital Spending

Northern Tier Energy's primary sources of liquidity are cash generated from
operating activities and its asset backed revolving credit facility (the "ABL
Facility"). As of December 31, 2012, Northern Tier Energy's cash on hand and
availability under the ABL Facility amounted to $405 million as compared to
$232 million as of December 31, 2011.

Cash provided by operating activities for the fourth quarter 2012 was $133.7
million compared to $14.4 million for the fourth quarter 2011. The cash
provided in the 2012 period relates primarily to the strength of the Refining
segment's operating results. Capital expenditures for the fourth quarter 2012
were $17.6 million. 

Conference Call Information

The Northern Tier Energy conference call to discuss financial results for the
fourth quarter and full year ending December 31, 2012 is scheduled for
Thursday, March 14, 2013 at 11:00 a.m. eastern time. Callers may listen to
the live presentation, which will be followed by a question and answer
segment, by dialing 800-510-0146 or 617-614-3449 and the passcode 24438968.
An audio webcast of the call along with a slide presentation will be available
at www.ntenergy.com within the Investor section of the site. This audio
webcast will be available on the website for fourteen days after the
conference call. A replay will also be available by teleconference for seven
days from the conference call. The replay teleconference will be available by
dialing 888-286-8010 or 617-801-6888 and the passcode 66526544.

About Northern Tier Energy

Northern Tier Energy LP (NYSE:NTI) is an independent downstream energy company
with refining, retail and pipeline operations that serves the PADD II region
of the United States. Northern Tier Energy operates an 84,500 barrels per
stream day refinery located in St. Paul Park, Minnesota. Northern Tier Energy
also operates 166 convenience stores and supports 70 franchised convenience
stores, primarily in Minnesota and Wisconsin, under the SuperAmerica
trademark, and owns a bakery and commissary under the SuperMom's brand.
Northern Tier Energy is headquartered in Ridgefield, Connecticut.

Non-GAAP Measures

This earnings release includes non-GAAP measures including Adjusted EBITDA,
Adjusted Net Income and Cash Available for Distribution. Northern Tier Energy
believes that these non-GAAP financial measures provide useful information
about its operating performance. However, these measures have important
limitations as analytical tools and should not be viewed in isolation or
considered as alternatives to comparable GAAP financial measures. Northern
Tier Energy's non-GAAP financial measures may also differ from similarly named
measures used by other companies. See the accompanying tables and footnotes
in this release for additional information on the non-GAAP measures used in
this release and reconciliations to the most directly comparable GAAP
measures.

Forward-Looking Statements

This press release contains certain "forward-looking statements" which reflect
Northern Tier Energy's views and assumptions on the date of this press release
regarding future events. They involve known and unknown risks, uncertainties
and other factors, many of which may be beyond its control, that may cause
actual results to differ materially from any future results, performance or
achievements expressed or implied by the forward-looking statements. All
forward-looking statements speak only as of the date hereof. Northern Tier
Energy undertakes no obligation to update or revise publicly any such
forward-looking statements. Northern Tier Energy cautions you not to place
undue reliance on these forward-looking statements. Please refer to Northern
Tier Energy's filings with the SEC for more detailed information regarding
these risks, uncertainties and assumptions.

This release serves as a qualified notice to nominees and brokers as provided
for under Treasury Regulation Section 1.1446-4(b). Please note that 100
percent of Northern Tier Energy LP's distributions to foreign investors are
attributable to income that is effectively connected with a United States
trade or business. Accordingly, Northern Tier Energy LP's distributions to
foreign investors are subject to federal income tax withholding at the highest
effective tax rate.

NORTHERN TIER ENERGY LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions except per unit amounts, unaudited)
                                      Three Months Ended  Years Ended
                                      December 31,        December 31,
                                      2012       2011     2012       2011
Revenue                               $        $      $        $  
                                      1,236.1    1,088.8  4,653.9    4,280.8
Costs, expenses and other:
Cost of sales                         990.9      934.2    3,584.9    3,512.4
Direct operating expenses             65.0       65.4     254.1      257.9
Turnaround and related expenses       9.0        0.1      26.1       22.6
Depreciation and amortization        8.6        7.2      33.2       29.5
Selling, general and administrative  21.2       25.4     88.3       88.7
Formation and offering costs          0.4        1.3      1.4        7.4
Contingent consideration loss         -          (18.2)   104.3      (55.8)
(income)
Other income, net                     (3.2)      (2.1)    (9.4)      (4.5)
Operating income                      144.2      75.5     571.0      422.6
Realized losses from derivative       (37.6)     (63.9)   (339.4)    (310.3)
activities
Unrealized gains (losses) from        35.4       292.6    68.0       (41.9)
derivative activities
Interest expense, net                 (5.5)      (11.5)   (42.2)     (42.1)
Loss on early extinguishment of debt  (50.0)     -        (50.0)     -
Income before income taxes            86.5       292.7    207.4      28.3
Income tax provision                  (2.0)      -        (9.8)      -
Net income                            $      $     $       $    
                                      84.5      292.7   197.6     28.3
EARNINGS PER UNIT ("EPU")
INFORMATION:
Net income used for EPU calculation:
Net Income                            $               $   
                                      84.5               197.6
Net Income prior to initial public    -                   (70.7)
offering
Net Income subsequent to initial      $               $   
public offering                       84.5               126.9
Earnings per common unit, basic and   $               $    
diluted                               0.92               1.38

NORTHERN TIER ENERGY LP
SELECTED OPERATING SEGMENT DATA
(in millions, unaudited)
                          Three Months Ended         Years Ended
                          December 31,               December 31,
                          2012          2011         2012         2011
OPERATING INCOME:
Refining                  $   147.0   $         $   707.3  $   388.2
                                        61.5
Retail                    3.5           6.8          8.7          14.0
Corporate and unallocated (6.3)         7.2          (145.0)      20.4
costs
TOTAL OPERATING INCOME    144.2         75.5         571.0        422.6
Net (losses) gains on     (2.2)         228.7        (271.4)      (352.2)
derivative activities
Interest expense, net     (5.5)         (11.5)       (42.2)       (42.1)
Loss on early             (50.0)        -            (50.0)       -
extinguishment of debt
Income tax provision      (2.0)         -            (9.8)        -
NET INCOME                $    84.5  $   292.7  $   197.6  $    28.3

NORTHERN TIER ENERGY LP
SELECTED BALANCE SHEET AND CASH FLOW DATA
(in millions, unaudited)
                                         December 31,       December 31,
                                         2012               2011
Cash and Cash Equivalents                $          $       
                                         272.9              123.5
Total Assets                             $            $       
                                         1,136.8           998.8
Total Debt and Financing Obligations     $          $       
                                         282.5              301.9
Equity                                   $          $       
                                         483.8              312.2
                                         Years Ended,
                                         December 31,
                                         2012               2011
Net cash provided by operating           $          $       
activities                               308.5              209.3
Net cash used in investing activities    (28.7)             (156.3)
Net cash used in financing activities    (130.4)            (2.3)
Net increase in cash and cash            $          $        
equivalents                              149.4              50.7

NORTHERN TIER ENERGY LP
SUPPLEMENTAL OPERATING DATA
(unaudited)
                                        Three Months Ended  Years Ended
                                        December 31,        December 31,
                                        2012       2011     2012    2011
REFINING SEGMENT
Key Operating Statistics
 Total refinery production (bpd)      91,081     85,153   84,530  82,079
 Total refinery throughput (bpd)      90,265     83,335   83,851  81,150
 Refined products sold (bpd)          95,722     88,615   89,162  86,038
 Per barrel of throughput:
 Refining gross margin             $24.49     $14.16   $29.62  $20.11
 Direct operating expenses         $4.43      $4.25    $4.44   $4.43
 Per barrel of refined products sold:
 Refining gross margin             $23.10     $13.32   $27.85  $18.97
 Direct operating expenses         $4.18      $4.00    $4.18   $4.18
Refinery product yields (bpd):
 Gasoline                             44,540     41,454   40,825  40,240
 Distillate                           29,044     27,778   27,113  24,841
 Asphalt                              12,692     6,743    11,434  9,888
 Other                                4,805      9,178    5,158   7,110
 Total                             91,081     85,153   84,530  82,079
RETAIL SEGMENT
Company operated stores:
Fuel gallons sold (in millions)       80.8       78.2     312.4   324.0
Fuel margin per gallon                $0.20      $0.22    $0.18   $0.21
Merchandise sales (in millions)       $82.0      $86.4    $340.4  $340.3
Merchandise margin %                  25.2%      25.0%    25.4%   25.4%
Number of stores at period end        166        166      166     166

Note: See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included within Northern Tier Energy's annual report on
Form 10-K for further information on operating statistic definitions.

NORTHERN TIER ENERGY LP
ADJUSTED EBITDA RECONCILIATION
(in millions, unaudited)
                          Year Ended December 31, 2012
                          Refining   Retail       Other      Total
(in millions)
Net income (loss)       $   707.3  $     8.7  $  (518.4)  $   197.6
Adjustments:
Interest expense          -            -              42.2         42.2
Income tax provision      -            -              9.8          9.8
Depreciation and          25.2         7.5            0.5          33.2
amortization
EBITDA subtotal           732.5        16.2           (465.9)      282.8
Minnesota Pipe Line       2.8          -              -            2.8
proportionate EBITDA
Turnaround and related    26.1         -              -            26.1
expenses
Equity-based compensation -            -              0.9          0.9
expense
Unrealized gains on       -            -              (68.0)       (68.0)
derivative activities
Contingent consideration  -            -              104.3        104.3
loss
Formation and offering    -            -              1.4          1.4
costs
Loss on early             -            -              50.0         50.0
extinguishment of debt
Realized losses on        -            -              339.4        339.4
derivative activities
Adjusted EBITDA (a)     $   761.4  $    16.2   $          $   739.7
                                                      (37.9)
                          Year Ended December 31, 2011
                          Refining   Retail       Other      Total
(in millions)
Net income (loss)       $   388.2  $    14.0   $  (373.9)  $   
                                                                   28.3
Adjustments:
Interest expense          -            -              42.1         42.1
Depreciation and          21.5         7.2            0.8          29.5
amortization
EBITDA subtotal           409.7        21.2           (331.0)      99.9
Minnesota Pipe Line       2.8          -              -            2.8
proportionate EBITDA
Turnaround and related    22.6         -              -            22.6
expenses
Equity-based compensation -            -              1.6          1.6
expense
Unrealized losses on      -            -              41.9         41.9
derivative activities
Contingent consideration  -            -              (55.8)       (55.8)
income
Formation costs           -            -              7.4          7.4
Realized losses on        -            -              310.3        310.3
derivative activities
Adjusted EBITDA (a)     $   435.1  $    21.2   $          $   430.7
                                                      (25.6)

NORTHERN TIER ENERGY LP
ADJUSTED EBITDA RECONCILIATION
(in millions, unaudited)
                        Three Months Ended December 31, 2012
                        Refining    Retail       Other       Total
(in millions)
Net income (loss)     $   147.0   $     3.5  $   (66.0)  $   
                                                                   84.5
Adjustments:
Interest expense        -             -              5.5           5.5
Income tax provision    -             -              2.0           2.0
Depreciation and        6.7           1.9            0.0           8.6
amortization
EBITDA subtotal         153.7         5.4            (58.5)        100.6
Minnesota Pipe Line     0.7           -              -             0.7
proportionate EBITDA
Turnaround and related  9.0           -              -             9.0
expenses
Equity-based            -             -              (0.5)         (0.5)
compensation impacts
Unrealized gains on     -             -              (35.4)        (35.4)
derivative activities
Formation and offering  -             -              0.4           0.4
costs
Loss on early
extinguishment of       -             -              50.0          50.0
derivatives
Realized losses on      -             -              37.6          37.6
derivative activities
Adjusted EBITDA (a)   $   163.4   $     5.4  $          $   162.4
                                                     (6.4)
                        Three Months Ended December 31, 2011
                        Refining    Retail       Other       Total
(in millions)
Net income            $    61.5  $     6.8  $   224.4   $   292.7
Adjustments:
Interest expense        -             -              11.5          11.5
Income tax benefit      -             -              -             -
Depreciation and        5.5           1.2            0.5           7.2
amortization
EBITDA subtotal         67.0          8.0            236.4         311.4
Minnesota Pipe Line     0.1           -              -             0.1
proportionate EBITDA
Turnaround and related  0.1           -              -             0.1
expenses
Equity-based            -             -              0.5           0.5
compensation expense
Unrealized gains on     -             -              (292.6)       (292.6)
derivative activities
Contingent              -             -              (18.2)        (18.2)
consideration income
Formation costs         -             -              1.3           1.3
Realized losses on      -             -              63.9          63.9
derivative activities
Adjusted EBITDA (a)   $    67.2  $     8.0  $          $   
                                                     (8.7)         66.5

(a) Adjusted EBITDA is not a presentation made in accordance with GAAP and
Northern Tier Energy's computation of Adjusted EBITDA may vary from others in
its industry. In addition, Adjusted EBITDA contains some, but not all,
adjustments that are taken into account in the calculation of the components
of various covenants in the agreements governing the Secured Notes, ABL
Facility, and contingent consideration arrangements.Adjusted EBITDA should
not be considered as an alternative to operating income or net income as
measures of operating performance. In addition, Adjusted EBITDA is not
presented as, and should not be considered, an alternative to cash flow from
operations as a measure of liquidity.Adjusted EBITDA is defined as net income
(loss) before interest expense, income taxes and depreciation and
amortization, adjusted for EBITDA from the Minnesota Pipe Line operations,
turnaround and related expenses, equity-based compensation expense, gains or
losses from derivative activities, fair value adjustments for contingent
consideration arrangements and costs related to Northern Tier Energy's
formation and equity offerings. Adjusted EBITDA has limitations as an
analytical tool and should not be considered in isolation, or as a substitute
for analysis of the results as reported under GAAP.

NORTHERN TIER ENERGY LP
CASH AVAILABLE FOR DISTRIBUTION RECONCILIATION
For the Three Months Ended December 31, 2012
(in millions, unaudited)
Net income                                $      84.5
Adjustments:
Interest expense                            5.5
Income tax provision                        2.0
Depreciation and amortization               8.6
EBITDA subtotal                             100.6
Minnesota Pipe Line proportionate EBITDA    0.7
Turnaround and related expenses             9.0
Equity-based compensation impacts           (0.5)
Unrealized gains on derivative activities   (35.4)
Formation and offering costs                0.4
Loss on early extinguishment of debt        50.0
Realized losses on derivative activities    37.6
Adjusted EBITDA (a)                       162.4
Cash interest expense                       (6.4)
Minnesota Pipe Line proportionate EBITDA    (0.7)
Realized losses on derivative activities    (37.6)
Capital expenditures (b)                    (17.6)
Reserve for turnaround and related expenses (10.0)
Working capital impacts (c)                 26.6
Cash Available for Distribution (d)       $     116.7

(b) Capital expenditures include maintenance, replacement, regulatory and
expansion capital projects.

(c) Working capital impacts include the amount of quarterly cash provided by
or used by Northern Tier Energy based upon fluctuations in working capital.
The amount paid or reserved is determined by the board of directors of
Northern Tier Energy's general partner following the end of such quarter and
it is based upon the ensuring that sufficient liquidity is maintained to
support the ongoing operations.

(d) Cash available for distribution is a non-GAAP performance measure that
Northern Tier Energy believes is important to investors in evaluating its
overall cash generation performance. Cash available for distribution should
not be considered as an alternative to operating income or net income (loss)
as measures of operating performance. In addition, cash available for
distribution is not presented as, and should not be considered, an alternative
to cash flow from operations as a measure of liquidity. Northern Tier Energy
has reconciled cash available for distribution to adjusted EBITDA and in
addition reconciled adjusted EBITDA to net income. Cash available for
distribution has limitations as an analytical tool and should not be
considered in isolation, or as a substitute for analysis of the results as
reported under GAAP. Northern Tier Energy's calculation of cash available for
distribution may differ from similar calculations of other companies in its
industry, thereby limiting its usefulness as a comparative measure. Cash
available for distribution for each quarter will be determined by the board of
directors of Northern Tier Energy's general partner following the end of such
quarter.

NORTHERN TIER ENERGY LP
OTHER NON-GAAP PERFORMANCE MEASURES
(in millions, unaudited)
                          Three Months Ended          Years Ended
                          December 31,                December 31,
                          2012          2011          2012         2011
Refining revenue          $  1,127.8   $   946.4  $  4,212.6  $  3,804.1
Refining cost of sales    924.4         837.8         3,303.7      3,208.5
Refining gross product    $   203.4  $   108.6  $          $  
margin (e)                                            908.9       595.6
                          Three Months Ended          Years Ended
                          December 31,                December 31,
                          2012          2011          2012         2011
Retail gross margin:
Fuel margin               $          $          $         $   
                          16.2         17.5         56.1        66.5
Merchandise margin        20.7          21.6          86.3         86.3
Other margin              4.9           6.9           17.7         20.0
Retail gross margin       41.8          46.0          160.1        172.8
Expenses:
Direct operating         29.2          32.8          118.8        126.6
expenses
Depreciation and         1.9           1.2           7.5          7.2
amortization
Selling, general and     7.2           5.2           25.1         25.0
administrative
Retail segment operating  $         $         $        $   
income (f)                3.5          6.8          8.7         14.0
                          Three Months Ended          Years Ended
                          December 31,                December 31,
                          2012          2011          2012         2011
Net Income                $          $   292.7  $          $   
                          84.5                       197.6       28.3
Adjusted for special
items:
Contingent consideration  -             (18.2)        104.3        (55.8)
loss (income)
Unrealized (gains) losses
from derivative           (35.4)        (292.6)       (68.0)       41.9
activities
Loss on early             50.0          -             50.0         -
extinguishment of debt
Adjusted Net Income       $          $          $          $   
(Loss) (g)                99.1         (18.1)        283.9       14.4



(e) Refining gross product margin per barrel is a financial measurement
calculated by subtracting refining costs of sales from total refining revenues
and dividing the difference by the total throughput or total refined products
sold for the respective periods presented. Refining gross product margin is a
non-GAAP performance measure that Northern Tier Energy believes is important
to investors in evaluating its refining segment performance as a general
indication of the amount above its cost of products that it is able to sell
refined products. Each of the components used in these calculations (revenues
and cost of sales) can be reconciled directly to Northern Tier Energy's
statements of operations. Northern Tier Energy's calculation of refining
gross product margin may differ from similar calculations of other companies
in its industry, thereby limiting its usefulness as a comparative measure.

(f) Retail fuel gross margin and retail merchandise gross margin are non-GAAP
performance measures that Northern Tier Energy believes are important to
investors in evaluating its retail performance. Northern Tier Energy's
calculation of retail fuel margin and retail merchandise margin may differ
from similar calculations of other companies in its industry, thereby limiting
their usefulness as comparative measures.

(g) Adjusted Net Income (Loss) is a non-GAAP performance measure that Northern
Tier Energy believes is important to investors in evaluating its operating
performance. Northern Tier Energy's calculation of Adjusted Net Income (Loss)
may differ from similar calculations of other companies in its industry,
thereby limiting their usefulness as comparative measures.

SOURCE Northern Tier Energy LP

Website: http://www.ntenergy.com
Contact: Maria Testani, Director, Planning and Strategy, +1-203-244-6550
 
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