Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Northern Tier Energy LP | d583719d8k.htm |
| EX-99.1 - EX-99.1 - Northern Tier Energy LP | d583719dex991.htm |
 Second Quarter
2013 Earnings Conference Call and Webcast
August 13, 2013
Exhibit 99.2 |
 Forward Looking
Statements 1
This presentation includes “forward-looking statements.” The words
“believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,”
“would,” “could,” “attempt,” “appears,”
“forecast,” “outlook,” “estimate,” “project,” “potential,” “may,” “will,” “are likely” or other similar
expressions are intended to identify forward-looking statements. These
forward-looking statements are based on management’s current expectations and
beliefs concerning future developments and their potential effect on us. While management believes that these forward-
looking statements are reasonable as and when made, there can be no assurance that future
developments affecting us will be those that we anticipate, and any and all of our
forward-looking statements in this presentation may turn out to be inaccurate. Our forward-looking
statements involve significant risks and uncertainties (some of which are beyond our control)
and assumptions that could cause actual results to differ materially from our
historical experience and our present expectations or projections. Important factors that could cause actual results to
differ materially from those in the forward-looking statements include, but are not
limited to, the overall demand for hydrocarbon products, fuels and other refined
products; our ability to produce products and fuels that meet our customers’ unique and precise specifications; the
impact of fluctuations and rapid increases or decreases in crude oil, refined products, fuel,
utility services and crack-spread prices, including the impact of these factors on
our liquidity; fluctuations in refinery capacity; accidents or other unscheduled shutdowns affecting our refineries,
machinery, or equipment, or those of our suppliers or customers; changes in the cost or
availability of transportation for feedstocks and refined products; the results of our
hedging and other risk management activities; our ability to comply with covenants contained in our debt
instruments; labor relations; relationships with our partners and franchisees; successful
integration and future performance of acquired assets, businesses or third-party
product supply and processing relationships; our access to capital to fund expansions, acquisitions and our working
capital needs and our ability to obtain debt or equity financing on satisfactory terms;
environmental liabilities or events that are not covered by an indemnity, insurance or
existing reserves; dependence on one principal supplier for our retail merchandise; maintenance of our credit ratings
and ability to receive open credit lines from our suppliers; the effects of competition;
continued creditworthiness of, and performance by, counterparties; the impact of
current and future laws, rulings and governmental regulations, including guidance related to the Dodd-Frank Wall
Street Reform and Consumer Protection Act; shortages or cost increases of power supplies,
natural gas, materials or labor; weather interference with business operations;
seasonal trends in the industries in which we operate; fluctuations in the debt markets; potential product liability
claims and other litigation; accidents or other unscheduled shutdowns or disruptions; and
changes in economic conditions, generally, and in the markets we serve, consumer
behavior, and travel and tourism trends. These factors are not necessarily all of the important factors that could
cause actual results to differ materially from those expressed in any of our
forward-looking statements. Other unknown or unpredictable factors could have
material adverse effects on our future results. For additional information regarding known material factors that could cause our
actual results to differ from our projected results, please refer to our Annual Report on Form
10-K for the year ended December 31, 2012 and other subsequent filings with the
SEC. The presentation also includes non-GAAP measures. We believe that
these non-GAAP financial measures provide useful information about our operating
performance and should not be viewed in isolation or considered as alternatives to comparable GAAP measures. Our non-GAAP
financial measures may also differ from similarly names measures used by other
companies. See the disclosures in the “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” included in our quarterly report on Form 10-Q for the three and six
months ended June 30, 2013 for additional information on the non–GAAP measures used in
this presentation and reconciliations to the most directly comparable GAAP measures.
|
 Q2 2013
Financial Results; Select Balance Sheet & Cash Flow Data
2
Consolidated Financial Results
1
See Appendix for reconciliation of Net Income to Adjusted EBITDA.
($ in millions)
Q2 2013
Q2 2012
Q2 YTD 2013
Q2 YTD 2012
Net Income
$63.9
$245.6
$183.3
$52.0
Adjusted EBITDA
85.9
246.3
242.5
327.8
Q2 2013
Cash and Cash Equivalents
$98.5
Total Debt (including capital leases)
$282.3
Equity
$442.8
Adjusted EBITDA
$85.9
Debt to LTM Adjusted EBITDA
0.4x
Cash Flow from Operations
$82.6
Cash Available for Distribution
$62.6
Distribution per Unit
$0.68
Balance Sheet & Cash Flows
1
1 |
 Direct
operating expenses per barrel is calculated by dividing direct operating expenses by the total barrels of throughput for the respective periods presented.
Typically, 80% of our products are comparable to a 3-2-1 crack spread, while 95% of
our products are comparable to a 6-3-2-1 crack spread.
See Appendix for each of the components used in this calculation (revenue and cost of
sales). Key Refining Performance Metrics
3
2
3
4 |
 Cash Available
for Distribution Reconciliation For the 3 months ending
6/30/13
Net income
$63.9
Adjustments:
Interest expense
6.3
Income tax provision
3.0
Depreciation and amortization
9.4
EBITDA subtotal
$82.6
Minnesota Pipe Line proportionate EBITDA
0.7
Turnaround and related expenses
27.3
Equity-based compensation impacts
0.4
Unrealized gains on derivative activities
(28.7)
Formation and offering costs
0.5
Realized losses on derivative activities
3.1
Adjusted EBITDA
$85.9
Cash interest expense
(5.1)
Current tax position
(0.4)
Minnesota Pipe Line proportionate EBITDA
(0.7)
Realized losses on derivative activities
(3.1)
Capital expenditures¹
(13.5)
Formation and offering costs
(0.5)
Reserve for turnaround and related expenses
(0.0)
Cash Available for Distribution
$62.6
($ in millions)
4
1
Includes non-discretionary capital expenditures and Waste Water Treatment Plant spend for
the quarter ending June 30, 2013. |
 Hedge
Positions 5
Volume Hedged
(000 barrels)
NTI Strike Price
Gasoline
Diesel
Gasoline
Distillate
2013
Q3
504
761
16.08
21.40
Q4
504
761
16.08
21.40
1
30,000 barrels of gasoline per quarter and 15,000 barrels of diesel per quarter are
hedged at cracks against WCS, while the remaining barrels are hedged at cracks against WTI.
1 |
 Q3 ‘13
Operating and ROY Capex Guidance 6
Q3 2013
Low
High
Refinery Statistics:
Total throughput (bpd)
90,000
95,000
Total refined products sold (bpd)
90,000
95,000
Direct opex ex. Turnaround ($/throughput bbl)
$4.50 -
$4.75
Retail Statistics:
Forecasted gallons (mm)
77
Retail fuel margin ($/gallon)
$0.16
Merchandise sales ($ in mm)
$93
Merchandise gross margin (%)
27.0%
Direct operating expense ($ in mm)
$31
Other Guidance ($ 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:
Q313
Q413
Maintenance and replacement capital
$8
$8
Waste Water Treatment (non recurring regulatory capital)
$9
$8
Discretionary capital
$3
$1
Total
Planned
Capital
Expenditures
($
in
mm)
$20
$17 |
 APPENDIX
|
 Adjusted EBITDA
Reconciliation 8
2011
2012
2013
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
Net Income (Loss)
$2.2
$292.7
$(193.6)
$246.6
$61.1
$84.5
$119.4
$63.9
Adjustments:
Interest Expense
10.4
11.5
10.4
10.7
15.6
5.5
6.4
6.3
Income Tax Provision
-
-
-
0.1
7.7
2.0
(0.1)
3.0
Depreciation and Amortization
7.4
7.2
8.5
7.8
8.3
8.6
8.6
9.4
EBITDA Subtotal
$20.0
$311.4
(174.7)
$265.2
$92.7
$100.6
$134.3
$82.6
Minnesota Pipe Line Proportionate EBITDA
0.9
0.1
0.7
0.7
0.7
0.7
0.7
0.7
Turnaround and Related Expenses
-
0.1
3.5
11.5
2.1
9.0
9.7
27.3
Equity-based Compensation Impacts
0.4
0.5
0.4
0.5
0.5
(0.5)
5.3
0.4
Unrealized (Gains) / Losses on Derivative Activities
40.6
(292.6)
88.4
(191.3)
70.3
(35.4)
(11.2)
(28.7)
Contingent Consideration (Income) / Loss
3.4
(18.2)
65.7
0.1
38.5
-
-
-
Formation and Offering Costs
1.7
1.3
-
-
-
0.4
0.4
0.5
Loss on Early Extinguishment of Derivatives/Debt
-
-
44.6
92.2
-
50.0
-
-
Realized losses on derivative activities
112.5
63.9
52.9
67.4
44.7
37.6
17.4
3.1
Adjusted EBITDA
$179.5
$66.5
$81.5
$246.3
$249.5
$162.4
$156.6
$85.9
($ in millions) |
 Refining Gross
Product Margin Per Barrel of Throughput Reconciliation
9
Q2 2013
Q2 2012
Refinery Revenue
$1,014.8
$1,039.2
Refinery Costs of Sales
894.0
751.5
Refinery Gross Product Margin
$120.8
$287.7
Total Refinery Throughput (bpd)
55,486
82,069
$23.92
$38.60
($ in millions, unless otherwise indicated)
Refinery Gross Product Margin Per Barrel of Throughput |