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Northern Tier Energy Reports Full Year and Fourth Quarter 2013 Results

    Northern Tier Energy Reports Full Year and Fourth Quarter 2013 Results

PR Newswire

RIDGEFIELD, Conn., Feb. 27, 2014

RIDGEFIELD, Conn., Feb. 27, 2014 /PRNewswire/ --

Fourth Quarter Highlights:

  oNet earnings of $20.6 million and Adjusted EBITDA of $69.4 million
  oCompany declared a fourth quarter distribution of $0.41 per common unit
    that will be paid in cash on February 28, 2014
  oCumulative cash distributions since initial public offering stands at
    $5.38 per common unit
  oJanuary throughput was approximately 88,000 barrels per day

Northern Tier Energy LP and its subsidiaries (NYSE:NTI) ("Northern Tier
Energy") today reported fourth quarter and full-year 2013 results. Fourth
quarter 2013 net earnings were $20.6 million compared with fourth quarter 2012
net earnings of $84.5 million. Adjusted EBITDA for the fourth quarter of 2013
was $69.4 million, a decrease of $93.0 million compared to $162.4 million for
the fourth quarter of 2012. This decrease was primarily also driven by less
favorable operating results in the refining segment.

Full year 2013 net earnings were $231.1 million compared to $197.6 million of
net earnings for the full year 2012. Adjusted EBITDA for the full year 2013
was $363.2 million compared to Adjusted EBITDA of $739.7 million for the full
year 2012. This decrease was primarily driven by less favorable operating
results in the refining segment on a year-over-year basis.

"This past year was an investment year for Northern Tier Energy both
operationally and commercially. We safely completed a planned major plant
turnaround with zero loss-time injuries and we took advantage of our planned
downtime to make strategic investments resulting in an increase to our
capacity by over 10% while enhancing our distillate yield by almost 4
percentage points. We generated over $360 million of Adjusted EBITDA and over
$240 million of cash available for distribution to our unitholders," said Chet
Kuchta, Chief Operating Officer of Northern Tier Energy "During this time, we
also gained a new, strategic partner in Western Refining. With this
partnership and our recent investments, we are confident we can continue to
capture strong crude dynamics and improve margins in 2014."

Fourth Quarter Operating Segment Highlights

Refining Segment
The refining segment's operating income was $38.0 million for the fourth
quarter of 2013 compared to $147.0 million for the fourth quarter of 2012.
Refining gross margins were $15.34 per barrel of throughput for the fourth
quarter of 2013 compared to $24.49 per barrel for the fourth quarter of 2012.
This decrease was primarily due to less favorable benchmark crack spreads
partially offset by favorable crude oil price differentials versus the
benchmark WTI crude oil prices in the 2013 fourth quarter compared to the 2012
fourth quarter.

In addition to lower refining margins per barrel, throughput and sales volumes
decreased compared to the prior year quarter. Total throughput was 79,838
barrels per day for the fourth quarter of 2013 compared to 90,265 barrels per
day for the prior year quarter. Sales volumes decreased to 87,397 barrels per
day for the fourth quarter of 2013 from 95,722 barrels per day for the fourth
quarter of 2012. These lower volumes were attributed to a planned turnaround
on the fluid catalytic cracking unit as well as some unplanned maintenance
activities during the fourth quarter of 2013 primarily relating to a fire
which occurred on the larger crude distillation unit at the end of September
2013.

Retail Segment
Retail operating income was $2.2 million in the fourth quarter of 2013
compared to $3.5 million in the fourth quarter of 2012. Fuel margins were
$0.19 per gallon for the fourth quarter of 2013 compared to $0.20 per gallon
for the fourth quarter of 2012. Fuel gallons sold at company-operated retail
stores were down less than 1% during the fourth quarter of 2013 compared to
the fourth quarter of 2012.

Quarterly Distribution

On February 7, 2014, the Board of Directors of Northern Tier Energy GP LLC,
the general partner of Northern Tier Energy LP, declared a quarterly
distribution of $0.41 per unit that will be paid in cash on February 28, 2014
to common unit holders of record as of the close of business on February 21,
2014. Cash available for distribution totaled $37.6 million for the fourth
quarter of 2013 compared to $116.7 million for the fourth quarter of 2012.
Total distributions relating to cash available for distribution for the year
ending December 31, 2013 amounted to $2.63 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.

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, 2013, Northern Tier Energy's cash on hand and
availability under the ABL Facility amounted to approximately $220 million as
compared to $405 million as of December 31, 2012. During 2013, Northern Tier
Energy utilized approximately $100 million of its cash in order to fund
discretionary growth capital expenditures as well as non-discretionary
turnaround spending. While the current level of liquidity is sufficient to
support the continuing operations of Northern Tier Energy, the Board of
Directors of Northern Tier Energy GP LLC may establish additional cash
reserves as it deems necessary.

Q1 2014 Operating and Capital Expenditure Guidance

For the first quarter of 2014, Northern Tier Energy projects it will realize
total throughput of between 85,000 and 90,000 barrels per day at the Saint
Paul Park Refinery and sales of between 85,000 and 90,000 barrels per day.
Direct operating expense per barrel of throughput at the Saint Paul Park
Refinery is expected to be between $4.75 and $5.00, not including turnaround
expenditures. Total capital expenditures for the first quarter are expected
to be approximately $11 million and approximately $35 million for the full
year. See the accompanying table for additional key metric guidance.

Conference Call Information

The management teams of Northern Tier Energy and Western Refining, Inc. will
hold a joint conference call to discuss financial results for the fourth
quarter and full year ending December 31, 2013. The conference call is
scheduled for February 27, 2014 at 10:00 a.m. EST. Callers may listen to the
live presentation, which will be followed by a question and answer segment, by
dialing 866-566-8590 or 702-224-9819, passcode: 31406191. 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 two hours after the end of the
conference call through March 6, 2014. The replay teleconference will be
available by dialing 800-585-8367 or 404-537-3406, passcode: 31406191.

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 96,500 barrels per
stream day refinery located in St. Paul Park, Minnesota. Northern Tier Energy
also operates 164 convenience stores and supports 75 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.







NORTHERN TIER ENERGY LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions except per unit amounts, unaudited)
                                   Three Months Ended       Year Ended
                                   December 31,             December 31,
                                   2013          2012       2013       2012
Revenue                            $  1,292.1  $        $        $  
                                                 1,236.1    4,979.2    4,653.9
Costs, expenses and other:
Cost of sales                      1,138.3       990.9      4,291.6    3,584.9
Direct operating expenses          66.5          65.0       262.4      254.1
Turnaround and related expenses    24.1          9.0        73.3       26.1
Depreciation and amortization     10.3          8.6        38.1       33.2
Selling, general and               21.6          21.2       85.8       88.3
administrative
Formation and offering costs       1.6           0.4        3.1        1.4
Contingent consideration loss     -             -          -          104.3
Other income, net                  (2.2)         (3.2)      (13.8)     (9.4)
Operating income                   31.9          144.2      238.7      571.0
Net (losses) gains on derivative   (3.5)         (2.2)      23.5       (271.4)
activities
Interest expense, net              (7.9)         (5.5)      (26.9)     (42.2)
Loss on early extinguishment of    -             (50.0)     -          (50.0)
debt
Earnings before income taxes       20.5          86.5       235.3      207.4
Income tax (benefit) provision     0.1           (2.0)      (4.2)      (9.8)
Net earnings                       $         $      $       $   
                                   20.6         84.5      231.1     197.6
Net earnings per common unit,      $         $      $    
basic and diluted                  0.22         0.92      2.51







NORTHERN TIER ENERGY LP
SELECTED OPERATING SEGMENT DATA
(in millions, unaudited)
                               Three Months Ended     Year Ended
                               December 31,           December 31,
                               2013     2012          2013         2012
OPERATING INCOME:
Refining                       $     $   147.0   $   255.7  $   707.3
                               38.0
Retail                         2.2      3.5           15.2         8.7
Corporate and unallocated      (8.3)    (6.3)         (32.2)       (145.0)
costs
TOTAL OPERATING INCOME         31.9     144.2         238.7        571.0
Net (losses) gains on          (3.5)    (2.2)         23.5         (271.4)
derivative activities
Interest expense, net          (7.9)    (5.5)         (26.9)       (42.2)
Loss on early extinguishment   -        (50.0)        -            (50.0)
of debt
Income tax (benefit) provision 0.1      (2.0)         (4.2)        (9.8)
NET EARNINGS                   $     $    84.5  $   231.1  $   197.6
                               20.6







NORTHERN TIER ENERGY LP
SELECTED BALANCE SHEET AND CASH FLOW DATA
(in millions, unaudited)
                                         December 31,         December 31,
                                         2013                 2012
Cash and Cash Equivalents                $           $       
                                         85.8                 272.9
Total Assets                             $              $      
                                         1,117.8             1,136.8
Total Debt and Financing Obligations     $            $       
                                         283.4                282.5
Equity                                   $            $       
                                         401.1                483.8
                                         Year Ended December 31,
                                         2013                 2012
Net cash provided by operating           $            $       
activities                               229.8                308.5
Net cash used in investing activities    (95.5)               (28.7)
Net cash used in financing activities    (321.4)              (130.4)
Net (decrease) increase in cash and cash $             $       
equivalents                              (187.1)             149.4



NORTHERN TIER ENERGY LP
SUPPLEMENTAL OPERATING DATA
(unaudited)
                                        Three Months Ended  Year Ended
                                        December 31,        December 31,
                                        2013       2012     2013    2012
REFINING SEGMENT
Key Operating Statistics
 Total refinery production (bpd)      79,867     91,081   75,882  84,530
 Total refinery throughput (bpd)      79,838     90,265   75,464  83,851
 Refined products sold (bpd)          87,397     95,722   84,231  89,162
 Per barrel of throughput:
 Refining gross margin             $15.34     $24.49   $18.89  $29.62
 Direct operating expenses         $5.00      $4.43    $5.23   $4.44
 Per barrel of refined products sold:
 Refining gross margin             $14.02     $23.10   $16.92  $27.85
 Direct operating expenses         $4.56      $4.18    $4.69   $4.18
Refinery product yields (bpd):
 Gasoline                             31,772     44,540   34,329  40,825
 Distillate                           27,481     29,044   26,074  27,113
 Asphalt                              8,447      12,692   8,321   11,434
 Other                                12,167     4,805    7,158   5,158
 Total                             79,867     91,081   75,882  84,530
Refinery throughput (bpd):
 Crude oil                            79,020     86,606   74,237  81,779
 Other feedstocks                     818        3,659    1,227   2,072
 Total                             79,838     90,265   75,464  83,851
Crude oil by type (bpd):
Light crude                             42,706     44,302   41,937  45,040
Synthetic crude                         16,900     17,695   14,373  15,286
Heavy crude                             19,414     24,609   17,927  21,453
 Total                             79,020     86,606   74,237  81,779
RETAIL SEGMENT
Company operated stores:
Fuel gallons sold (in millions)       80.4       80.8     313.2   312.4
Fuel margin per gallon                $0.19      $0.20    $0.19   $0.18
Merchandise sales (in millions)       $85.0      $82.0    $341.6  $340.4
Merchandise margin %                  24.9%      25.2%    25.9%   25.4%
Number of stores at period end        164        166      164     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
(unaudited)
                            Three Months Ended December 31, 2013
                            Refining       Retail     Other    Total
(in millions)
Net income (loss)         $           $       $       $    
                            38.0             2.2          (19.6)     20.6
Adjustments:
Interest expense            -                -            7.9        7.9
Income tax benefit          -                -            (0.1)      (0.1)
Depreciation and            8.3              1.8          0.2        10.3
amortization
EBITDA subtotal             46.3             4.0          (11.6)     38.7
MPL proportionate           0.8              -            -          0.8
depreciation expense
Turnaround and related      24.1             -            -          24.1
expenses
Equity-based compensation   -                -            0.7        0.7
expense
Formation and offering      -                -            1.6        1.6
costs
Gains on derivative         -                -            3.5        3.5
activities
Adjusted EBITDA (a)       $           $       $      $    
                            71.2             4.0          (5.8)      69.4
                            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          -          8.6
amortization
EBITDA subtotal             153.7            5.4          (58.5)     100.6
MPL proportionate           0.7              -            -          0.7
depreciation expense
Turnaround and related      9.0              -            -          9.0
expenses
Equity-based compensation   -                -            (0.5)      (0.5)
expense
Loss on early               -                -            50.0       50.0
extinguishment of debt
Formation and offering      -                -            0.4        0.4
costs
Losses on derivative        -                -            2.2        2.2
activities
Adjusted EBITDA (a)       $     163.4  $       $      $   
                                             5.4          (6.4)      162.4
                            Year Ended December 31, 2013
                            Refining       Retail     Other    Total
(in millions)
Net income (loss)         $     255.7  $        $       $   
                                             15.2         (39.8)     231.1
Adjustments:
Interest expense            -                -            26.9       26.9
Income tax provision        -                -            4.2        4.2
Depreciation and            30.4             7.1          0.6        38.1
amortization
EBITDA subtotal             286.1            22.3         (8.1)      300.3
MPL proportionate           2.9              -            -          2.9
depreciation expense
Turnaround and related      73.3             -            -          73.3
expenses
Equity-based compensation   -                -            7.1        7.1
expense
Formation and offering      -                -            3.1        3.1
costs
Gains on derivative         -                -            (23.5)     (23.5)
activities
Adjusted EBITDA (a)       $     362.3  $        $       $   
                                             22.3         (21.4)     363.2
                            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
MPL proportionate           2.8              -            -          2.8
depreciation expense
Turnaround and related      26.1             -            -          26.1
expenses
Equity-based compensation   -                -            0.9        0.9
expense
Contingent consideration    -                -            104.3      104.3
loss
Loss on early               -                -            50.0       50.0
extinguishment of debt
Formation and offering      -                -            1.4        1.4
costs
Losses on derivative        -                -            271.4      271.4
activities
Adjusted EBITDA (a)       $     761.4  $        $       $   
                                             16.2         (37.9)     739.7

(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 depreciation 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, 2013
(in millions, unaudited)
Net income                                        $      20.6
Adjustments:
Interest expense                                    7.9
Income tax benefit                                  (0.1)
Depreciation and amortization                       10.3
EBITDA subtotal                                     38.7
MPL proportionate depreciation expense              0.8
Turnaround and related expenses                     24.1
Equity-based compensation impacts                   0.7
Change in fair value of outstanding derivatives     5.1
Formation and offering costs                        1.6
Settlement gains on derivative activities           (1.6)
Adjusted EBITDA (a)                               69.4
Cash interest expense                               (7.3)
Current tax provision                               (1.1)
MPL proportionate depreciation expense              (0.8)
Settlement gains on derivative activities           1.6
Capital expenditures (b)                            (14.2)
Cash reserve for turnaround and related expenses    (5.0)
Cash reserve for discretionary capital expenditures (5.0)
Cash Available for Distribution (c)               $      37.6

(b) Capital expenditures include maintenance, replacement, regulatory and
expansion capital projects.
(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           Year Ended
                       December 31,                 December 31,
                       2013           2012          2013          2012
Refining revenue       $  1,180.9    $  1,127.8   $  4,536.0   $  4,212.6
Refining cost of sales 1,068.2        924.4         4,015.8       3,303.7
Refining gross product $   112.7   $   203.4  $   520.2  $   908.9
margin (d)
                       Three Months Ended           Year Ended
                       December 31,                 December 31,
                       2013           2012          2013          2012
Retail gross margin:
Fuel margin            $    16.0  $          $          $   
                                      16.2         60.2         56.1
Merchandise margin     21.2           20.7          88.4          86.3
Other margin           3.8            4.9           18.8          17.7
Retail gross margin    $    41.0  $          $   167.4  $   160.1
(e)                                   41.8

(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
Q1 2014 OPERATING AND CAPITAL EXPENDITURE GUIDANCE
                                               Q1 2014
                                               Low                   High
Refinery Statistics:
Total throughput (bpd)                         85,000                90,000
Total refined products sold (bpd)              85,000                90,000
Direct opex ex. turnaround ($/throughput bbl)          $4.75 - $5.00
Retail Statistics:
Forecasted gallons (mm)                        72
Retail fuel margin ($/gallon)                  $0.19
Merchandise sales ($ in mm)                    $80
Merchandise gross margin (%)                   26.0%
Direct operating expense ($ in mm)             $28
Other Guidance ($ 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                            $1
                                               Q1 2014               Full Year
Capital Program ($ in mm):
Maintenance and replacement capital            $2                    $23
Waste Water Treatment (non recurring           $8                    $10
regulatory capital)
Discretionary capital                          $1                    $2
Total planned capital expenditures             $11                   $35

SOURCE Northern Tier Energy LP

Website: http://www.ntenergy.com
Contact: Northern Tier Energy LP, Alpha IR Group, 203-244-6544,
nti@alpha-ir.com
 
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