Northern Tier Energy Reports Third Quarter 2013 Results and Declares Quarterly Cash Distribution

Northern Tier Energy Reports Third Quarter 2013 Results and Declares Quarterly
                              Cash Distribution

Company completes all planned and unplanned maintenance; Declares $0.31
quarterly distribution

PR Newswire

RIDGEFIELD, Conn., Nov. 11, 2013

RIDGEFIELD, Conn., Nov. 11, 2013 /PRNewswire/ -- 

Third Quarter Highlights:

  oNet Income was $27.2 million and Adjusted EBITDA was $51.3 million
  oCompany declared a third quarter distribution of $0.31 per common unit
    that will be paid in cash on November 27, 2013
  oCumulative cash distributions since initial public offering stands at
    $4.97 per common unit
  oAll planned and unplanned maintenance work was completed as of
    mid-October, resulting in enhanced future throughput and distillate yield

Northern Tier Energy LP and its subsidiaries (NYSE: NTI) ("Northern Tier
Energy" or "the Company") today reported results for the third quarter ending
September 30, 2013.

Net income was $27.2 million compared to $61.1 million for the third quarter
of 2012. Adjusted EBITDA for the third quarter of 2013 was $51.3 million
compared to $249.5 million for the third quarter of 2012. These decreases
were primarily driven by a 61% decline in the Group 3 6:3:2:1 crack spread and
a 7% decline in refinery throughput and production due to unplanned downtime
at the Saint Paul Park Refinery. Tightened crude oil price differentials and
weaker local market pricing for both light and heavy products also contributed
to the decrease in Adjusted EBITDA. See the table below for a full
reconciliation of non-GAAP performance measures.

"We faced a number of headwinds in the last month of this quarter with weaker
market fundamentals and some unplanned downtime at our Saint Paul Park
Refinery," said Hank Kuchta, Chief Executive Officer and President of Northern
Tier Energy. "However, we have now completed all of our planned and unplanned
maintenance work as well as certain discretionary projects we previously
announced, which has increased our potential throughput and enhanced our
distillate yield. We are very excited to look to 2014 as a year in which the
Saint Paul Park Refinery is very well positioned to take advantage of our
favorable crude dynamics."

Quarterly Distribution

The Board of Directors of Northern Tier Energy GP LLC, the general partner of
Northern Tier Energy LP, has approved a third quarter distribution of $0.31
per unit that will be paid in cash on November 27, 2013 to common unit holders
of record as of the close of business on November 21, 2013. Cash available
for distribution totaled approximately $28 million for the third quarter of
2013.

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 due to several factors including, but not limited to, (i)
its operating performance, (ii) fluctuations in the prices paid for crude oil
and other feedstocks as well as the prices received for finished products,
(iii) capital expenditures, and (iv) other cash reserves deemed necessary or
appropriate by the board of directors of its general partner.

Third Quarter Operating Segment Highlights

Refining Segment
The Refining segment's operating income was $27.8 million for the third
quarter of 2013 compared to $246.7 million for the third quarter of 2012.
Refining gross product margins were $11.84 per barrel of throughput for the
third quarter of 2013 compared to $36.69 per barrel for the third quarter of
2012. This decrease is primarily attributable to a 61% decrease in the Group
3 6:3:2:1 benchmark crack spread, tightened crude oil price differentials
versus the benchmark WTI crude oil prices and lower local market pricing for
refined products.

In addition to lower product margins per barrel, throughput and production
volumes decreased compared to the prior year quarter. Total throughput was
81,168 barrels per day for the third quarter of 2013 compared to 87,476
barrels per day for the prior year quarter. Production was 81,985 barrels per
day in the third quarter of 2013 compared to 88,413 barrels per day in the
third quarter of 2012. These decreases were due to unplanned maintenance
activities which resulted in downtime at the St. Paul Park refinery for a
portion of the 2013 third quarter. Sales volumes increased to 96,277 barrels
per day for the third quarter of 2013 from 94,105 barrels per day for the
third quarter of 2012.

Retail Segment
Retail operating income was $4.4 million in the third quarter of 2013 compared
to $1.2 million in the third quarter of 2012. Fuel margins were $0.19 per
gallon for the third quarter of 2013 compared to $0.12 per gallon for the same
period last year. Fuel gallons sold at company-operated retail stores were
81.2 million gallons in the third quarter of 2013 compared to 80.1 million in
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 September 30, 2013, Northern Tier Energy's cash on hand and
availability under the ABL Facility amounted to $264 million as compared to
$492 million as of September 30, 2012. This decrease was partially due to a
temporary impact in our working capital as a result of the unplanned downtime
at the Saint Paul Park Refinery at the end of the third quarter. Northern
Tier Energy continues to maintain low leverage with a debt to LTM EBITDA ratio
of 0.6x.

Cash provided by operating activities for the third quarter of 2013 was $98.5
million compared to $74.9 million for the third quarter of 2012. Capital
expenditures for the third quarter of 2013 were $7.6 million.

Q4 2013 Operating and Capital Expenditure Guidance

For the fourth quarter of 2013, Northern Tier Energy projects it will realize
total throughput of between 80,000 and 85,000 barrels per day at the Saint
Paul Park Refinery and sales of between 82,500 and 87,500 barrels per day.
Direct operating expense per barrel of throughput at the Saint Paul Park
Refinery is expected to be between $5.25 and $5.75, not including turnaround
expenditures. The operating expenses per barrel are impacted by one-time
expenses related to unplanned downtime at the Saint Paul Park Refinery of
approximately $2 million as well as by our lower throughput during that same
period. Total capital expenditures are expected to be $20 million. See the
accompanying table for additional key metric guidance.

Conference Call Information

Northern Tier Energy will host a conference call to discuss its third quarter
2013 results on Tuesday, November 12, 2013 at 11:00 am Eastern Standard Time.
Callers may listen to the live presentation, which will be followed by a
question and answer segment, by dialing 800-237-9752 or 617-847-8706 and the
passcode 31834776. An audio webcast of the call will be available at
www.ntenergy.com within the Investor portion of the site under the Calendar of
Events section. 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 98333364.

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 a 92,500 barrels
per stream day refinery located in St. Paul Park, Minnesota. Northern Tier
Energy also operates 163 convenience stores and supports 74 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 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        Nine Months Ended
                             September 30,             September 30,
                             2013         2012         2013         2012
Revenue                      $ 1,440.9    $ 1,263.5    $ 3,687.1    $ 3,417.8
Costs, expenses and other:
Cost of sales                1,308.8      929.2        3,153.3      2,594.0
Direct operating expenses    69.5         66.9         195.9        189.1
Turnaround and related       12.2         2.1          49.2         17.1
expenses
Depreciation and             9.8          8.3          27.8         24.6
amortization
Selling, general and         17.8         22.0         64.2         67.1
administrative
Formation and offering costs 0.6          -            1.5          1.0
Contingent consideration     -            38.5         -            104.3
loss
Other income, net            (5.1)        (2.9)        (11.6)       (6.2)
Operating income             27.3         199.4        206.8        426.8
Realized gains (losses) from 0.8          (44.7)       (19.7)       (165.0)
derivative activities
Loss on early extinguishment -            -            -            (136.8)
of derivatives
Unrealized gains (losses)    6.8          (70.3)       46.7         32.6
from derivative activities
Interest expense, net        (6.3)        (15.6)       (19.0)       (36.7)
Earnings before income taxes 28.6         68.8         214.8        120.9
Income tax provision         (1.4)        (7.7)        (4.3)        (7.8)
Net earnings                 $   27.2  $   61.1  $  210.5   $  113.1
Net earnings per common      $   0.30               $   2.29
unit, basic and diluted







NORTHERN TIER ENERGY LP
SELECTED OPERATING SEGMENT DATA
(in millions, unaudited)
                                         Three Months Ended  Nine Months Ended
                                         September 30,       September 30,
                                         2013      2012      2013      2012
OPERATING INCOME:
Refining                                 $ 27.8    $ 246.7   $ 217.7   $ 560.3
Retail                                   4.4       1.2       13.0      5.2
Corporate and unallocated costs          (4.9)     (48.5)    (23.9)    (138.7)
TOTAL OPERATING INCOME                   27.3      199.4     206.8     426.8
Net gains (losses) on derivative         7.6       (115.0)   27.0      (269.2)
activities
Interest expense, net                    (6.3)     (15.6)    (19.0)    (36.7)
Income tax provision                     (1.4)     (7.7)     (4.3)     (7.8)
NET EARNINGS                             $ 27.2    $  61.1  $ 210.5   $ 113.1







NORTHERN TIER ENERGY LP
SELECTED BALANCE SHEET AND CASH FLOW DATA
(in millions, unaudited)
                                        September 30,       December 31,
                                        2013                2012
Cash and Cash Equivalents               $      126.7  $      272.9
Total Assets                            $     1,066.5   $    1,136.8
Total Debt and Financing Obligations    $      282.3  $      282.5
Equity                                  $      408.1  $      483.8
                                        Nine Months Ended September 30,
                                        2013                2012
Net cash provided by operating          $      222.6  $      174.8
activities
Net cash used in investing activities   (76.0)              (12.0)
Net cash (used in) provided by          (292.8)             37.2
financing activities
Net (decrease) increase in cash and     $     (146.2)  $      200.0
cash equivalents







NORTHERN TIER ENERGY LP
SUPPLEMENTAL OPERATING DATA
(unaudited)
                                        Three Months Ended  Nine Months Ended
                                        September 30,       September 30,
                                        2013       2012     2013      2012
REFINING SEGMENT
Key Operating Statistics
 Total refinery production (bpd)      81,985     88,413   74,539    82,330
 Total refinery throughput (bpd)      81,168     87,476   73,990    81,697
 Refined products sold (bpd)          96,277     94,105   83,164    86,960
 Per barrel of throughput:
 Refining gross margin             $11.84     $36.69   $20.17    $31.52
 Direct operating expenses         $5.16      $4.54    $5.32     $4.45
 Per barrel of refined products sold:
 Refining gross margin             $9.98      $34.11   $17.95    $29.61
 Direct operating expenses         $4.35      $4.22    $4.73     $4.18
Refinery product yields (bpd):
 Gasoline                             37,893     41,623   35,190    39,578
 Distillate                           29,046     28,466   25,600    26,464
 Asphalt                              8,023      12,241   8,279     11,011
 Other                                7,023      6,083    5,470     5,277
 Total                             81,985     88,413   74,539    82,330
Refinery throughput (bpd):
 Crude oil                            80,439     86,366   72,625    80,158
 Other feedstocks                     729        1,110    1,365     1,539
 Total                             81,168     87,476   73,990    81,697
Crude oil by type (bpd):
Light crude                             50,590     44,445   41,678    45,287
Synthetic crude                         12,316     18,443   13,521    14,477
Heavy crude                             17,533     23,478   17,426    20,394
 Total                             80,439     86,366   72,625    80,158
RETAIL SEGMENT
Company operated stores:
Fuel gallons sold (in millions)       81.2       80.1     232.8     231.6
Fuel margin per gallon                $0.19      $0.12    $0.19     $0.17
Merchandise sales (in millions)       $94.8      $92.2    $256.6    $258.3
Merchandise margin %                  24.6%      25.5%    26.2%     25.4%
Number of stores at period end        163        166      163       166



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





NORTHERN TIER ENERGY LP
ADJUSTED EBITDA RECONCILIATION
(in millions, unaudited)
                        Three Months Ended September 30, 2013
                        Refining    Retail       Other       Total
(in millions)
Net income (loss)     $    27.8  $     4.4  $          $   
                                                     (5.0)         27.2
Adjustments:
Interest expense        -             -              6.3           6.3
Income tax provision    -             -              1.4           1.4
Depreciation and        7.9           1.7            0.2           9.8
amortization
EBITDA subtotal         35.7          6.1            2.9           44.7
Minnesota Pipe Line     0.7           -              -             0.7
proportionate EBITDA
Turnaround and related  12.2          -              -             12.2
expenses
Equity-based            -             -              0.7           0.7
compensation expense
Unrealized gains on     -             -              (6.8)         (6.8)
derivative activities
Formation and offering  -             -              0.6           0.6
costs
Realized losses on      -             -              (0.8)         (0.8)
derivative activities
Adjusted EBITDA (a)   $    48.6  $     6.1  $          $   
                                                     (3.4)         51.3
                        Three Months Ended September 30, 2012
                        Refining    Retail       Other       Total
(in millions)
Net income (loss)     $   246.7   $     1.2  $  (186.8)   $   
                                                                   61.1
Adjustments:
Interest expense        -             -              15.6          15.6
Income tax provision    -             -              7.7           7.7
Depreciation and        6.4           1.8            0.1           8.3
amortization
EBITDA subtotal         253.1         3.0            (163.4)       92.7
Minnesota Pipe Line     0.7           -              -             0.7
proportionate EBITDA
Turnaround and related  2.1           -              -             2.1
expenses
Equity-based            -             -              0.5           0.5
compensation expense
Unrealized losses on    -             -              70.3          70.3
derivative activities
Contingent              -             -              38.5          38.5
consideration loss
Realized losses on      -             -              44.7          44.7
derivative activities
Adjusted EBITDA (a)   $   255.9   $     3.0  $          $   249.5
                                                     (9.4)
                        Nine Months Ended September 30, 2013
                        Refining    Retail       Other       Total
(in millions)
Net income (loss)     $   217.7   $    13.0   $   (20.2)  $   210.5
Adjustments:
Interest expense        -             -              19.0          19.0
Income tax provision    -             -              4.3           4.3
Depreciation and        22.1          5.3            0.4           27.8
amortization
EBITDA subtotal         239.8         18.3           3.5           261.6
Minnesota Pipe Line     2.1           -              -             2.1
proportionate EBITDA
Turnaround and related  49.2          -              -             49.2
expenses
Equity-based            -             -              6.4           6.4
compensation expense
Unrealized gains on     -             -              (46.7)        (46.7)
derivative activities
Formation and offering  -             -              1.5           1.5
costs
Realized losses on      -             -              19.7          19.7
derivative activities
Adjusted EBITDA (a)   $   291.1   $    18.3   $   (15.6)  $   293.8
                        Nine Months Ended September 30, 2012
                        Refining    Retail       Other       Total
(in millions)
Net income (loss)     $   560.3   $     5.2  $  (452.4)   $   113.1
Adjustments:
Interest expense        -             -              36.7          36.7
Income tax provision    -             -              7.8           7.8
Depreciation and        18.5          5.6            0.5           24.6
amortization
EBITDA subtotal         578.8         10.8           (407.4)       182.2
Minnesota Pipe Line     2.1           -              -             2.1
proportionate EBITDA
Turnaround and related  17.1          -              -             17.1
expenses
Equity-based            -             -              1.4           1.4
compensation expense
Unrealized gains on     -             -              (32.6)        (32.6)
derivative activities
Contingent              -             -              104.3         104.3
consideration loss
Formation and offering  -             -              1.0           1.0
costs
Loss on early
extinguishment of       -             -              136.8         136.8
derivatives
Realized losses on      -             -              165.0         165.0
derivative activities
Adjusted EBITDA (a)   $   598.0   $    10.8   $   (31.5)  $   577.3



(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 September 30, 2013
(in millions, unaudited)
Net income                                        $      27.2
Adjustments:
Interest expense                                    6.3
Income tax provision                                1.4
Depreciation and amortization                       9.8
EBITDA subtotal                                     44.7
Minnesota Pipe Line proportionate EBITDA            0.7
Turnaround and related expenses                     12.2
Equity-based compensation impacts                   0.7
Unrealized gains on derivative activities           (6.8)
Formation and offering costs                        0.6
Realized gains on derivative activities             (0.8)
Adjusted EBITDA (a)                               51.3
Cash interest expense                               (5.7)
Current tax provision                               (1.4)
Minnesota Pipe Line proportionate EBITDA            (0.7)
Realized gains on derivative activities             0.8
Capital expenditures (b)                            (5.4)
Formation and offering costs                        (0.6)
Cash reserve for turnaround and related expenses    (5.0)
Cash reserve for discretionary capital expenditures (5.0)
Cash Available for Distribution (c)               $      28.3
Distributions per unit                              $      0.31



(b) Capital expenditures include maintenance, replacement, and regulatory
capital projects. Expansion capital projects are not included.

(c) 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          Nine Months Ended
                          September 30,               September 30,
                          2013          2012          2013         2012
Refining revenue          $ 1,321.7     $ 1,151.1     $ 3,355.1    $ 3,084.8
Refining cost of sales    1,233.3       855.8         2,947.6      2,379.3
Refining gross product    $   88.4   $  295.3    $  407.5   $  705.5
margin (d)
                          Three Months Ended          Nine Months Ended
                          September 30,               September 30,
                          2013          2012          2013         2012
Retail gross margin:
Fuel margin               $   15.4   $    9.6  $   44.2  $   39.4
Merchandise margin        23.3          23.5          67.2         65.6
Other margin              5.0           5.9           15.0         13.3
Retail gross margin       43.7          39.0          126.4        118.3
Expenses:
Direct operating         31.2          30.4          89.1         89.6
expenses
Depreciation and         1.7           1.8           5.3          5.6
amortization
Selling, general and     6.4           5.6           19.0         17.9
administrative
Retail segment operating  $    4.4  $    1.2  $   13.0  $   
income (e)                                                         5.2



(d) 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.

(e) 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.



NORTHERN TIER ENERGY LP
Q4 2013 OPERATING AND CAPITAL EXPENDITURE GUIDANCE
                                                         Q4 2013
                                                         Low     High
Refinery Statistics:
Total throughput (bpd)                                   80,000  85,000
Total refined products sold (bpd)                        82,500  87,500
Direct opex ex. turnaround ($/throughput bbl)            $5.25   $5.75
Retail Statistics:
Forecasted gallons (mm)                                  79
Retail fuel margin ($/gallon)                            $0.16
Merchandise sales ($ in mm)                              $91
Merchandise gross margin (%)                             26.0%
Direct operating expense ($ in mm)                       $30
Other Guidance ($ in mm):
Turnaround cash reserve                                  $5      $10
Discretionary capital cash reserve                       $5      $10
SG&A                                                     $22
Depreciation & amortization                              $10
Cash interest expense                                    $6
Current tax expense                                      $1
Capital Program ($ in mm):                               Q4 2013
Maintenance and replacement capital                      $8
Waste Water Treatment (non recurring regulatory capital) $8
Discretionary capital                                    $4
Total planned capital expenditures                       $20



SOURCE Northern Tier Energy LP

Website: http://www.ntenergy.com
Contact: Alpha IR Group, Phone: (203) 244-6544, Email: NTI@alpha-IR.com
 
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