EX-99.1 2 tllpexibit991.htm EXHIBIT 99.1 TLLP Earnings Release 2Q 2014 Exhibit

Exhibit 99.1

Tesoro Logistics LP Reports Second Quarter 2014 Results

•
Net income of $32.8 million, or $0.45 per diluted common limited partner unit
•
Distributable cash flow of $49.6 million
•
Declared quarterly distribution of $0.615 per limited partner unit, representing 21% year-over-year annualized growth
•
Successful open season for Connolly Gathering System in North Dakota
•
Acquired West Coast terminalling and pipeline assets from Tesoro

SAN ANTONIO - July 30, 2014 - Tesoro Logistics LP (NYSE: TLLP) (“TLLP” or the “Partnership”) today reported second quarter 2014 net income of $32.8 million, or $0.45 per diluted common limited partner unit.

Distributable cash flow for the second quarter 2014 totaled $49.6 million, which was up $24.6 million or 99%, from the second quarter 2013 (excluding Predecessor results). The year-over-year increase reflects significant growth through our pursuit of organic growth opportunities and strategic acquisitions. On July 24, 2014, the Partnership announced its quarterly cash distribution of $42.1 million, or $0.615 per limited partnership unit, or $2.46 on an annualized basis. The declared distribution represents a 21% increase over the second quarter 2013 distribution of $0.51 paid in August 2013.

“During the second quarter, we completed the successful open season for the Connolly Gathering System, reached an agreement to purchase additional terminals and pipeline assets from Tesoro and announced the development of a new truck rack in Anacortes, Washington,” said Greg Goff, TLLP's Chairman and Chief Executive Officer. “With these new organic growth opportunities and acquisitions, we continue to demonstrate our commitment to grow the logistics business and increase unitholder cash distributions.”

Second Quarter 2014 Financial and Operational Segment Results

Adjusted EBITDA for the second quarter 2014 totaled $69.6 million, which primarily excludes Northwest Products Pipeline inspection and maintenance costs of $2.8 million. Adjusted EBITDA was up $38.0 million from the second quarter 2013 (excluding Predecessor results).

Crude Oil Gathering
Adjusted EBITDA for the Crude Oil Gathering segment totaled $13.1 million in the second quarter 2014, up $4.4 million or 50%, from the second quarter 2013. The year-over-year increase in adjusted EBITDA is mostly a result of the continued capture of incremental volume on the High Plains Pipeline in North Dakota through the addition of new capacity associated with the initial phase of the High Plains Pipeline reversal project and contributions from the initial build-out of the Bakken Storage Hub.

Terminalling and Transportation
Adjusted EBITDA for the Terminalling and Transportation segment totaled $61.2 million in the second quarter 2014, up $34.2 million or over 127%, from the second quarter 2013 (excluding Predecessor results). The year-over-year increase in adjusted EBITDA can be mostly attributed to continued strong contributions from the acquisitions of the Northwest Products System completed in June 2013, the Los Angeles Terminal Assets completed in June 2013 and the Los Angeles Logistics Assets completed in December 2013.

Strategic Update

Connolly Gathering System
On May 12, 2014, TLLP announced the successful conclusion of the Partnership’s second open season after receiving sufficient commitments from third party shippers to warrant construction of the Connolly Gathering System by its wholly owned subsidiary Tesoro High Plains Pipeline Company LLC (“THPP”). The proposed Connolly Gathering System will gather crude oil from various points in Dunn County, North Dakota for delivery to a central delivery point at the existing Connolly Station on THPP’s pipeline system.

Construction began in July 2014 with targeted completion by the end of 2015. The capacity of the gathering system’s main delivery line is expected to be approximately 60,000 barrels per day to accommodate estimated peak production of crude oil from the area.

1


Acquisition
On June 23, 2014, TLLP announced that it reached an agreement with Tesoro Corporation (“Tesoro”) to acquire certain terminalling and pipeline assets owned by Tesoro and two of its subsidiaries, Tesoro Refining & Marketing Company LLC and Tesoro Alaska Company LLC. Under terms of the agreement, the Partnership acquired three marketing terminals and a storage facility, and will acquire a refined products pipeline (collectively, the “West Coast Logistics Assets”) for total consideration of $270.0 million. In addition, TLLP plans to develop a new truck rack at the site of the acquired Anacortes terminal which is expected to add an additional 6,000 to 7,000 barrels per day of throughput.

On July 1, 2014, the first portion of the West Coast Logistics Assets was purchased for consideration of $241.4 million, comprised of approximately $214.4 million in cash, and the issuance of equity to Tesoro with a fair value of $27.0 million. The equity was comprised of 370,843 common units and 8,856 general partner units.

TLLP expects to close and fund the remaining second portion of this acquisition in the third quarter or early in the fourth quarter of 2014 for consideration of $28.6 million. The remaining assets consist of all of Tesoro’s membership interests in Tesoro Alaska Pipeline Company LLC, a wholly-owned subsidiary of Tesoro, which owns an approximately 70 mile long common carrier refined products pipeline connecting Tesoro’s Kenai refinery to Anchorage, Alaska with expected average throughput of approximately 35,000 barrels per day.

Capital Expenditures
Capital expenditures for the second quarter 2014 totaled $47.5 million. This includes $42.9 million of expansion capital, of which approximately $5.1 million was reimbursed, and $4.6 million of maintenance capital, of which approximately $1.0 million was reimbursed. Due to the addition of expected spending related to the construction of the Connolly Gathering System and the Anacortes truck rack, the Partnership now estimates full year 2014 capital spending for both maintenance and expansion capital projects of $200 million, or $170 million net of reimbursements.

Public Invited to Listen to Analyst Conference Call
At 9:00 a.m. CDT on July 31, 2014, TLLP will broadcast, live, its conference call with analysts regarding second quarter 2014 and other business matters. Interested parties may listen to the live conference call over the Internet by logging on to http://www.tesorologistics.com.

Twitter Communication
TLLP utilizes Twitter, in conjunction with other Regulation FD-compliant disclosure vehicles, such as press releases, 8-Ks and its investor relations web site, as part of a broader investor and stakeholder communication strategy. The Twitter page can be found at http://twitter.com/TesoroLogistics.

About Tesoro Logistics LP
Tesoro Logistics LP, headquartered in San Antonio, Texas, is a fee-based, growth-oriented Delaware limited partnership formed by Tesoro Corporation. The Partnership is designed to own, operate, develop and acquire crude oil and refined products pipelines, terminals, tankage, and other transportation and logistics assets primarily in the Western and Mid-Continent regions of the United States.

Please visit us at: www.tesorologistics.com

This earnings release contains certain statements that are “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 concerning our expectations regarding growing cash distributions; the expected in-service date and capacity of the Connolly Gathering System , as well as estimated production in the surrounding area; the development of a new truck rack at the Anacortes terminal and related throughput volumes; closing dates for remaining assets in the West Coast Logistics Assets transaction; and capital spending and reimbursements. For more information concerning factors that could affect these statements see our annual report on Form 10-K and current reports on Form 8-K filed with the Securities and Exchange Commission. We undertake no obligation to publicly release the result of any revisions to any such forward-looking statements that may be made to reflect events or circumstances that occur, or which we become aware of, after the date hereof.


2

Contact:
Investors:
Evan Barbosa, Investor Relations Manager, (210) 626-7202

Media:
Tesoro Media Relations, media@tsocorp.com, (210) 626-7702


3

Results of Operations (Unaudited)

Factors Affecting Comparability

In 2013, we entered into two transactions with Tesoro and Tesoro Logistics GP, LLC (“TLGP”), our general partner, pursuant to which TLLP acquired from Tesoro the following:

•
six marketing terminals and storage facilities located in Southern California (the “Los Angeles Terminal Assets”) effective June 1, 2013; and
•
two marine terminals, a marine storage facility, a product terminal, a petroleum coke handling and storage facility and crude oil and refined products pipelines located in Southern California (the “Los Angeles Logistics Assets”) effective December 6, 2013.

These transactions are collectively referred to as “Acquisitions from Tesoro”. The Acquisitions from Tesoro were transfers between entities under common control. Accordingly, the financial information of TLLP contained herein has been retrospectively adjusted to include the historical results of the assets acquired in the Acquisitions from Tesoro prior to the effective date of each acquisition for all periods presented; however the Los Angeles Terminal Assets are not included in historical results prior to the effective date of their acquisition since they were not operated by Tesoro prior to their acquisition by TLLP. We refer to the Los Angeles Logistics Assets as our “Predecessor.” The results of the Acquisitions from Tesoro are included in the Terminalling and Transportation segment. The Partnership’s future results of operations may not be comparable to the Predecessor’s historical results of operations for the reasons described in “Factors Affecting the Comparability of Our Financial Results” in our Annual Report on Form 10-K for the year ended December 31, 2013.

Non-GAAP Financial Measures

We define EBITDA as net income before depreciation and amortization expenses, net interest and financing costs and interest income. We define adjusted EBITDA as EBITDA plus any loss (gain) on asset disposals and impairments and expenses incurred for the inspection and maintenance program associated with the Northwest Products System. We define our cash flow available to be distributed to unitholders (“Distributable Cash Flow”) as adjusted EBITDA less maintenance capital expenditures and net interest and financing costs, plus reimbursement by our customers for certain maintenance capital expenditures, non-cash unit-based compensation expense, proceeds from sale of assets, the change in deferred revenue and interest income. EBITDA, adjusted EBITDA and Distributable Cash Flow are not measures prescribed by U.S. GAAP (“non-GAAP”) but are supplemental financial measures that are used by management and may be used by external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, to assess:

•
our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or financing methods;
•
the ability of our assets to generate sufficient cash flow to make distributions to our unitholders;
•
our ability to incur and service debt and fund capital expenditures; and
•
the viability of acquisitions and other capital expenditure projects, and the returns on investment of various investment opportunities.

We believe that the presentation of EBITDA and adjusted EBITDA will provide useful information to investors in assessing our results of operations. The U.S. GAAP measures most directly comparable to EBITDA and adjusted EBITDA are net income and net cash from operating activities. EBITDA and adjusted EBITDA have important limitations as analytical tools, because they exclude some, but not all, items that affect net income and net cash from operating activities.

We believe that the presentation of Distributable Cash Flow will provide useful information to investors as it is a widely accepted financial indicator used by investors to compare partnership performance, as it provides investors an enhanced perspective of the operating performance of our assets and the cash our business is generating. The U.S. GAAP measure most directly comparable to Distributable Cash Flow is net income.

We also include the results of our operations excluding the results of our Predecessors. We believe that the presentation of our results of operations excluding results of our Predecessors will provide useful information to investors in assessing our results of operations. We believe investors want to analyze operations of our business under our current commercial agreements with Tesoro. These non-GAAP financial measures should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, because they may be defined differently by other companies in our industry.

4

TESORO LOGISTICS LP
RESULTS OF OPERATIONS
(Unaudited)
(In thousands, except unit and per unit amounts)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2014
 
2013
 
2014
 
2013
REVENUES
 
 
 
(Including Predecessor)
 
 
 
(Including Predecessor)
Crude Oil Gathering
 
$
27,083

 
$
20,945

 
$
51,707

 
$
42,636

Terminalling and Transportation
 
103,242

 
39,160

 
203,667

 
69,091

Total Revenues
 
130,325

 
60,105

 
255,374

 
111,727

COSTS AND EXPENSES
 
 
 
 
 
 
 
 
Operating and maintenance expenses
 
51,046

 
26,313

 
93,727

 
43,378

General and administrative expenses
 
12,448


6,851

 
21,794


12,904

Depreciation and amortization expenses
 
16,460

 
7,314

 
31,985

 
11,395

Loss (gain) on asset disposals and impairments (a)
 
132

 
—

 
(4,616
)
 
164

Total Costs and Expenses
 
80,086

 
40,478

 
142,890

 
67,841

OPERATING INCOME
 
50,239

 
19,627

 
112,484

 
43,886

Interest and financing costs, net
 
(17,473
)
 
(6,571
)
 
(35,220
)
 
(12,175
)
Interest income
 
—

 
470

 
—

 
493

NET INCOME
 
32,766


13,526

 
77,264


32,204

 
 
 
 
 
 
 
 
 
Loss attributable to Predecessor
 
—

 
5,647

 
—

 
5,647

Net income attributable to partners
 
32,766

 
19,173

 
77,264

 
37,851

General partner’s interest in net income, including incentive distribution rights
 
(7,958
)
 
(1,978
)
 
(14,794
)
 
(3,514
)
Limited partners’ interest in net income
 
$
24,808

 
$
17,195

 
$
62,470

 
$
34,337

 
 
 
 
 
 
 
 
 
Net income per limited partner unit (b):
 
 
 
 
 
 
 
 
Common - basic
 
$
0.45

 
$
0.38

 
$
1.15

 
$
0.77

Common - diluted
 
$
0.45

 
$
0.38

 
$
1.14

 
$
0.77

Subordinated - basic and diluted
 
$
0.45

 
$
0.36

 
$
1.13

 
$
0.73

 
 
 
 
 
 
 
 
 
Weighted average limited partner units outstanding:
 
 
 
 
 
 
 
 
Common units - basic
 
46,911,533

 
30,752,989

 
43,070,111

 
29,812,337

Common units - diluted
 
47,012,424

 
30,863,138

 
43,169,298

 
29,903,780

Subordinated units - basic and diluted
 
7,543,627

 
15,254,890

 
11,377,957

 
15,254,890

 
 
 
 
 
 
 
 
 
Cash distributions per unit paid during period (c)
 
$
0.5900

 
$
0.4900

 
$
1.1550

 
$
0.9625

_____________
(a)
Includes a $4.7 million gain on assets related to the sale of the Boise Terminal for the six months ended June 30, 2014.
(b)
TLLP excludes losses attributable to Predecessor from its calculation of net income per limited partner unit in accordance with the partnership agreement. The table below provides supplemental presentation of net income per limited partner unit, as adjusted, using the Net Income shown above. This supplemental information assumes the common unitholders, subordinated unitholders and General Partner participated in the pre-acquisition date losses attributable to the Predecessor for the three and six months ended June 30, 2013. There were no losses attributable to the Predecessor for the three and six months ended June 30, 2014.
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2013
 
2013
Adjusted Net Income Per Limited Partner Unit:
 
 
 
Common - basic and diluted
$0.26
 
$0.65
Subordinated - basic and diluted
$0.24
 
$0.61
(c)
On July 24, 2014, we announced the declaration of a quarterly cash distribution of $0.6150 per limited partner unit for the second quarter of 2014.

5

TESORO LOGISTICS LP
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
(Unaudited)
(In thousands)
 
Three Months Ended June 30,

Six Months Ended June 30,
 
2014

2013

2014

2013
Reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow to Net Income:
 
 
(Including Predecessor)
 
 
 
(Including Predecessor)
Net income
$
32,766

 
$
13,526

 
$
77,264

 
$
32,204

Depreciation and amortization expenses
16,460

 
7,314

 
31,985

 
11,395

Interest and financing costs, net
17,473

 
6,571

 
35,220

 
12,175

Interest income
—

 
(470
)
 
—

 
(493
)
EBITDA (d)
66,699

 
26,941

 
144,469

 
55,281

Loss (gain) on asset disposals and impairments (a)
132

 
—

 
(4,616
)
 
164

Inspection and maintenance expenses associated with the Northwest Products System
2,789


—


4,938


—

Adjusted EBITDA (d)
69,620

 
26,941

 
144,791

 
55,445

Interest and financing costs, net
(17,473
)
 
(6,571
)
 
(35,220
)
 
(12,175
)
Proceeds from sale of assets
—

 
—

 
9,721

 
—

Maintenance capital expenditures (e)
(4,628
)
 
(4,437
)
 
(6,292
)
 
(6,333
)
Reimbursement for maintenance capital expenditures (e)
1,011

 
2,404

 
1,497

 
3,587

Non-cash unit-based compensation expense
570

 
490

 
917

 
920

Change in deferred revenue
450

 
746

 
156

 
1,129

Interest income
—

 
470

 
—

 
493

Distributable Cash Flow (d)
$
49,550

 
$
20,043

 
$
115,570

 
$
43,066

 
 
 
 
 
 
 
 
Reconciliation of EBITDA to Net Cash from Operating Activities:
 
 
 
 
 
 
 
Net cash from operating activities
$
18,543

 
$
23,370

 
$
89,214

 
$
53,074

Interest and financing costs, net
17,473

 
6,571

 
35,220

 
12,175

Changes in assets and liabilities
32,179

 
(1,630
)
 
17,917

 
(7,553
)
Gain (loss) on asset disposals and impairments (a)
(132
)
 
—

 
4,616

 
(164
)
Amortization of debt issuance costs
(794
)
 
(406
)
 
(1,581
)
 
(822
)
Unit-based compensation expense
(570
)
 
(494
)
 
(917
)
 
(936
)
Interest income
—

 
(470
)
 
—

 
(493
)
EBITDA (d)
$
66,699

 
$
26,941

 
$
144,469

 
$
55,281

_____________
(d)
See “Non-GAAP Financial Measures” on page 4 for a definition of EBITDA, adjusted EBITDA and Distributable Cash Flow.
(e)
Maintenance capital expenditures include expenditures required to ensure the safety, reliability, integrity and regulatory compliance of our assets.

6

TESORO LOGISTICS LP
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
RECONCILIATION OF PARTNERSHIP AND PREDECESSORS (d)
(Unaudited)
(In thousands)
 
Tesoro Logistics LP
 
 
Predecessors
 
Three Months Ended
June 30, 2013
Reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow to Net Income (Loss):
 
 
 
 
 
 
Net income (loss)
$
19,173

 
 
$
(5,647
)
 
$
13,526

Depreciation and amortization expenses
6,338

 
 
976

 
7,314

Interest and financing costs, net
6,571

 
 
—

 
6,571

Interest income
(470
)
 
 
—

 
(470
)
EBITDA (d)
31,612

 
 
(4,671
)
 
26,941

Inspection and maintenance expenses associated with the Northwest Products System
—

 
 
—

 
—

Adjusted EBITDA (d)
31,612

 
 
(4,671
)
 
26,941

Interest and financing costs, net
(6,571
)
 
 
—

 
(6,571
)
Maintenance capital expenditures (e)
(4,246
)
 
 
(191
)
 
(4,437
)
Reimbursement for maintenance capital expenditures (e)
2,404

 
 
—

 
2,404

Non-cash unit-based compensation expense
488

 
 
2

 
490

Change in deferred revenue
746

 
 
—

 
746

Interest income
470

 
 
—

 
470

Distributable Cash Flow (d)
$
24,903

 
 
$
(4,860
)
 
$
20,043

 
 
 
 
 
 
 
Reconciliation of EBITDA to Net Cash from Operating Activities:
 
 
 
 
 
 
Net cash from operating activities
$
15,541

 
 
$
7,829

 
$
23,370

Interest and financing costs, net
6,571

 
 
—

 
6,571

Changes in assets and liabilities
10,868

 
 
(12,498
)
 
(1,630
)
Amortization of debt issuance costs
(406
)
 
 
—

 
(406
)
Unit-based compensation expense
(492
)
 
 
(2
)
 
(494
)
Interest income
(470
)
 
 
—

 
(470
)
EBITDA (d)
$
31,612

 
 
$
(4,671
)
 
$
26,941



7

TESORO LOGISTICS LP
SELECTED OPERATING SEGMENT DATA
(Unaudited)
(In thousands, except barrel and per barrel amounts)
 
 
Three Months Ended June 30,

Six Months Ended June 30,
 
 
2014

2013

2014

2013
OPERATING SEGMENTS
 
 
 
 
 
 
 
 
CRUDE OIL GATHERING
 
 
 
 
 
 
 
 
Pipeline:
 
 
 
 
 
 
 
 
Pipeline revenues
 
$
13,304

 
$
9,048

 
$
25,119

 
$
18,489

Pipeline throughput (barrels per day (“bpd”))
 
108,848

 
80,543

 
103,449

 
81,445

Average pipeline revenue per barrel (f)
 
$
1.34

 
$
1.23

 
$
1.34

 
$
1.25

Trucking:
 
 
 
 
 
 
 
 
Trucking revenues
 
$
13,779

 
$
11,897

 
$
26,588

 
$
24,147

Trucking volume (bpd)
 
46,884

 
42,084

 
45,798

 
43,497

Average trucking revenue per barrel (f)
 
$
3.23

 
$
3.11

 
$
3.21

 
$
3.07

Total Revenues
 
27,083

 
20,945

 
51,707

 
42,636

Costs and Expenses:
 
 
 
 
 
 
 
 
Operating and maintenance expenses
 
13,842

 
11,467

 
24,777

 
22,431

General and administrative expenses
 
152


761


1,804


1,455

Depreciation and amortization expenses
 
1,032


1,029


2,055


2,035

Loss on asset disposals and impairments
 
132


—


132


—

Total Costs and Expenses
 
15,158

 
13,257

 
28,768

 
25,921

CRUDE OIL GATHERING SEGMENT OPERATING INCOME
 
$
11,925


$
7,688


$
22,939


$
16,715

 
 
 
 
 
 
 
 
 
TERMINALLING AND TRANSPORTATION
 
 
 
 
 
 
Terminalling:
 
 
 
(Including Predecessor)
 
 
 
(Including Predecessor)
Terminalling revenues (g)
 
$
79,143

 
$
36,326

 
$
154,940

 
$
64,250

Terminalling throughput (bpd) (h)
 
889,596

 
553,056

 
883,825

 
472,746

Average terminalling revenue per barrel (f) (g)
 
$
0.98

 
$
0.72

 
$
0.97

 
$
0.75

Pipeline transportation:
 
 
 
 
 
 
 
 
Pipeline transportation revenues
 
$
24,099

 
$
2,834

 
$
48,727

 
$
4,841

Pipeline transportation throughput (bpd) (h)
 
772,483

 
85,476

 
778,698

 
88,005

Average pipeline transportation revenue per barrel (f)
 
$
0.34

 
$
0.36

 
$
0.35

 
$
0.30

Total Revenues
 
103,242

 
39,160

 
203,667

 
69,091

Costs and Expenses:
 
 
 
 
 
 
 
 
Operating and maintenance expenses
 
37,204

 
14,846

 
68,950

 
20,947

General and administrative expenses
 
7,584


1,986


12,099


3,028

Depreciation and amortization expenses
 
15,428


6,285


29,930


9,360

Loss (gain) on asset disposals and impairments (a)
 
—


—


(4,748
)

164

Total Costs and Expenses
 
60,216

 
23,117

 
106,231

 
33,499

TERMINALLING AND TRANSPORTATION SEGMENT OPERATING INCOME
 
$
43,026


$
16,043


$
97,436


$
35,592

_____________
(f)
Management uses average revenue per barrel to evaluate performance and compare profitability to other companies in the industry. There are a variety of ways to calculate average revenue per barrel; other companies may calculate it in different ways. We calculate average revenue per barrel as revenue divided by the number of days in the period divided by throughput (bpd). Investors and analysts use this financial measure to help analyze and compare companies in the industry on the basis of operating performance. This financial measure should not be considered as an alternative to segment operating income, revenues and operating expenses or any other measure of financial performance presented in accordance with U.S. GAAP.
(g)
The Partnership adjusted the disclosure of terminalling revenues to include amounts previously reported as storage revenues. Prior year balances for terminalling revenues and average terminalling revenue per barrel have been adjusted to conform to current presentation.
(h)
Terminalling and transportation throughput volumes were higher in the three and six months ended June 30, 2014 primarily as a result of the completion of various acquisitions in 2013.

8

TESORO LOGISTICS LP
RECONCILIATION TO AMOUNTS UNDER U.S. GAAP
(Unaudited) (In thousands)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2014
 
2013
 
2014
 
2013
Reconciliation of Crude Oil Gathering Segment EBITDA to Operating Income:
 
 
 
 
 
 
 
 
Crude oil gathering segment operating income
 
$
11,925

 
$
7,688

 
$
22,939

 
$
16,715

Depreciation and amortization expenses
 
1,032

 
1,029

 
2,055

 
2,035

Crude Oil Gathering Segment EBITDA (d)
 
12,957

 
8,717

 
24,994

 
18,750

Loss on asset disposals and impairments
 
132

 
—

 
132

 
—

Crude Oil Gathering Segment Adjusted EBITDA (d)
 
$
13,089


$
8,717


$
25,126


$
18,750


 
 
Three Months Ended June 30,

Six Months Ended June 30,
 
 
2014

2013

2014

2013
Reconciliation of Terminalling and Transportation Segment Adjusted EBITDA to Operating Income:
 
 
 
(Including Predecessor)
 
 
 
(Including Predecessor)
Transportation and terminalling segment operating income
 
$
43,026

 
$
16,043

 
$
97,436

 
$
35,592

Depreciation and amortization expenses
 
15,428

 
6,285

 
29,930

 
9,360

Terminalling and Transportation Segment EBITDA (d)
 
58,454

 
22,328


127,366

 
44,952

Loss (gain) on asset disposals and impairments (a)
 
—

 
—

 
(4,748
)
 
164

Inspection and maintenance expenses associated with the Northwest Products System
 
2,789

 
—

 
4,938

 
—

Terminalling and Transportation Segment Adjusted EBITDA (d)
 
$
61,243

 
$
22,328

 
$
127,556

 
$
45,116


TESORO LOGISTICS LP
SELECTED OPERATING SEGMENT DATA
RECONCILIATION OF PARTNERSHIP AND PREDECESSOR (d)
(Unaudited)
(In thousands, except barrel and per barrel amounts)
 
Tesoro Logistics LP
 
 
Predecessors
 
Three Months Ended
June 30, 2013
Reconciliation of Terminalling and Transportation Segment Adjusted EBITDA to Operating Income:
 
 
 
 
 
 
Transportation and terminalling segment operating income
$
21,690

 
 
$
(5,647
)
 
$
16,043

Depreciation and amortization expenses
5,309

 
 
976

 
6,285

Terminalling and Transportation Segment EBITDA (d)
26,999

 
 
(4,671
)
 
22,328

Loss (gain) on asset disposals and impairments
—

 
 
—

 
—

Inspection and maintenance expenses associated with the Northwest Products System
—

 
 
—

 
—

Terminalling and Transportation Segment Adjusted EBITDA (d)
$
26,999

 
 
$
(4,671
)
 
$
22,328




9

TESORO LOGISTICS LP
SELECTED FINANCIAL DATA
(Unaudited) (In thousands)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2014
 
2013
 
2014
 
2013
Capital Expenditures
 
 
 
(Including Predecessor)
 
 
 
(Including Predecessor)
Expansion
 
$
42,917

 
$
17,997

 
$
67,737

 
$
26,337

Maintenance (e)
 
4,628

 
4,437

 
6,292

 
6,333

Total Capital Expenditures
 
$
47,545

 
$
22,434

 
$
74,029

 
$
32,670


 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2014
 
2013
 
2014
 
2013
General and Administrative Expenses
 
 
 
(Including Predecessor)
 
 
 
(Including Predecessor)
Crude Oil Gathering
 
$
152

 
$
761

 
$
1,804

 
$
1,455

Terminalling and Transportation
 
7,584

 
1,986

 
12,099

 
3,028

Unallocated
 
4,712

 
4,104

 
7,891

 
8,421

Total General and Administrative Expenses
 
$
12,448

 
$
6,851

 
$
21,794

 
$
12,904


TESORO LOGISTICS LP
BALANCE SHEET DATA
(Unaudited) (In thousands)
 
 
June 30, 2014
 
December 31, 2013
Cash and cash equivalents
 
$
456

 
$
23,203

Total debt
 
1,391,407

 
1,164,343


TESORO LOGISTICS LP
RECONCILIATION OF FORECASTED ANNUAL EBITDA TO AMOUNTS UNDER U.S. GAAP
(Unaudited, in millions)
Reconciliation of Forecasted annual EBITDA to Forecasted Net Income:
West Coast Logistics Assets
 
Forecasted net income
$
20

Add: Depreciation and amortization expenses
2

Add: Interest and financing costs, net
6

Forecasted annual EBITDA (d)
$
28



10