Segment Disclosures (Notes)

12 Months Ended

Dec. 31, 2011

Segment Disclosures [Abstract]

Segment Disclosures [Text Block]

SEGMENT DISCLOSURES

Our revenues are derived from two operating segments: Crude Oil Gathering and Terminalling, Transportation and Storage. Our assets consist of a crude oil gathering system in the Bakken Shale/Williston Basin area of North Dakota and Montana, eight refined products terminals in the midwestern and western United States, a crude oil and refined products storage facility and five related short-haul pipelines. Our revenues are generated from existing third-party contracts and from commercial agreements we entered into with Tesoro at the closing of the Offering, and subsequent to the Offering, under which Tesoro pays us fees for gathering, transporting and storing crude oil and transporting, storing and terminalling refined products. The commercial agreements with Tesoro are described in Note C. The tariff rates for intrastate transportation on our High Plains system were adjusted in January 2011 to reflect more uniform mileage-based rates that are comparable to rates for similar pipeline gathering and transportation services in the area. This adjustment has created an overall increase in revenues that we receive for committed and uncommitted intrastate transportation services on our High Plains system. We do not have operations in foreign countries. Therefore, revenue in foreign countries and long-lived assets located in foreign countries are not material to our operations.

Crude Oil Gathering.  Our crude oil gathering system in North Dakota and Montana, which we refer to as our High Plains system, includes an approximate 27,000 barrels per day ("bpd") truck-based crude oil gathering operation and approximately 700 miles of common carrier pipeline (the "High Plains Pipeline") and related storage assets. The High Plains system has the capacity to deliver up to 85,000 bpd to Tesoro's North Dakota refinery, which is presently limited to processing 60,000 bpd of shipments, and 9,000 bpd into a third-party pipeline at Richey, Montana. This system gathers and transports crude oil produced in the Williston Basin including production from the Bakken Shale formation. We refer to this area, a significant portion of which is serviced by our High Plains system, as the Bakken Shale/Williston Basin area.

Terminalling, Transportation and Storage.  We own and operate eight refined products terminals with aggregate truck and barge delivery capacity of approximately 239,300 bpd. The terminals provide distribution primarily for refined products produced at Tesoro's refineries located in Los Angeles and Martinez, California (the Los Angeles and Martinez refineries, respectively); Salt Lake City, Utah (the Utah refinery); Kenai, Alaska (the Alaska refinery); Anacortes, Washington (the Washington refinery); and Mandan, North Dakota (the North Dakota refinery). We also own and operate assets that exclusively support Tesoro's Utah refinery, including a refined products and crude oil storage facility with total shell capacity of approximately 878,000 barrels and three short-haul crude oil supply pipelines and two short-haul refined product delivery pipelines connected to third-party interstate pipelines.

The operating segments adhere to the accounting polices used for our consolidated financial statements, as described in Note A. Our operating segments are strategic business units that offer different services and are managed separately because each segment requires different industry knowledge, technology and marketing strategies. We evaluate the performance of each segment based on its respective operating income. Segment operating income includes those revenues and expenses that are directly attributable to management of the respective segment. General and administrative expenses not directly attributable to an individual segment and interest and financing costs are excluded from segment operating income. Identifiable assets not directly attributable to a segment include cash and other assets that are not associated with a specific operating segment.

Segment information is as follows (in thousands):

	Years Ended December 31,
	2011 (a)			2010			2009
REVENUES				Predecessor			Predecessor
Crude Oil Gathering:
Affiliate (b)	$	44,570		$	19,477		$	19,297
Third-party	389			115			125
Total Crude Oil Gathering	44,959			19,592			19,422
Terminalling, Transportation and Storage:
Affiliate (b)	32,873			—			—
Third-party	3,114			3,708			3,237
Total Terminalling, Transportation and Storage	35,987			3,708			3,237
Total Segment Revenues	$	80,946		$	23,300		$	22,659
OPERATING AND MAINTENANCE EXPENSES
Crude Oil Gathering	$	23,721		$	19,622		$	18,917
Terminalling, Transportation and Storage	11,600			12,838			12,535
Total Segment Operating and Maintenance Expenses	$	35,321		$	32,460		$	31,452
DEPRECIATION AND AMORTIZATION EXPENSES
Crude Oil Gathering	$	3,141		$	3,097		$	3,073
Terminalling, Transportation and Storage	4,937			4,909			5,747
Total Segment Depreciation and Amortization Expenses	$	8,078		$	8,006		$	8,820
GENERAL AND ADMINISTRATIVE EXPENSES
Crude Oil Gathering	$	1,304		$	563		$	536
Terminalling, Transportation and Storage	1,566			406			379
Total Segment General and Administrative Expenses	$	2,870		$	969		$	915
(GAIN) LOSS ON ASSET DISPOSALS
Crude Oil Gathering	$	(10	)	$	62		$	45
Terminalling, Transportation and Storage	11			450			1,069
Total Segment Loss on Asset Disposals	$	1		$	512		$	1,114
OPERATING INCOME (LOSS)
Crude Oil Gathering	$	16,803		$	(3,752	)	$	(3,149	)
Terminalling, Transportation and Storage	17,873			(14,895		)	(16,493		)
Total Segment Operating Income (Loss)	34,676			(18,647		)	(19,642		)
Unallocated general and administrative expenses	(5,120		)	(2,229		)	(2,226		)
Interest and financing costs, net	(1,610		)	—			—
NET INCOME (LOSS)	$	27,946		$	(20,876	)	$	(21,868	)

____________

(a) The information presented includes the results of operations of our Predecessor for periods presented through April 25, 2011 and of TLLP for the period beginning April 26, 2011, the date TLLP commenced operations.

(b) Historically, no affiliate revenue was recognized by our Predecessor in the Terminalling, Transportation and Storage segment. Our FERC and NDPSC regulated pipelines were our source of affiliate revenues in the Crude Oil Gathering segment. No affiliate revenue was recognized by our Predecessor for trucking services in the Crude Oil Gathering segment.

Capital expenditures by operating segment were as follows (in thousands):

	December 31,
	2011		2010		2009
Capital Expenditures			Predecessor		Predecessor
Crude Oil Gathering	$	5,546	$	271	$	92
Terminalling, Transportation and Storage	5,977		1,799		9,142
Total Capital Expenditures	$	11,523	$	2,070	$	9,234

Total identifiable assets by operating segment were as follows (in thousands):

	December 31,
	2011		2010		2009
Identifiable Assets			Predecessor		Predecessor
Crude Oil Gathering	$	72,795	$	68,902	$	71,207
Terminalling, Transportation and Storage	76,667		66,675		70,008
Other	20,691		—		—
Total Identifiable Assets	$	170,153	$	135,577	$	141,215