Attached files
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| 8-K - 8-K - Western Refining Logistics, LP | form8-kxwnrlearningsreleas.htm |
FOR IMMEDIATE RELEASE | Exhibit 99.1 |
Investor and Analyst Contact: | Media Contact: |
Michelle Clemente | Gary W. Hanson |
(602) 286-1533 | (602) 286-1777 |
Jeffrey S. Beyersdorfer | |
(602) 286-1530 | |
WESTERN REFINING LOGISTICS, LP
REPORTS THIRD QUARTER 2015 RESULTS
• Net income of $16.5 million; EBITDA of $27.7 million, up 72% from Q3 2014 |
• Increased quarterly distribution to $0.3825 per unit, a 20% increase vs Q3 2014 |
• Increased Permian/Delaware Basin crude oil volume to 83,000 bpd, up 60% vs Q3 2014 |
• Completed TexNew Mex pipeline acquisition in October |
EL PASO, Texas - November 3, 2015 - Western Refining Logistics, LP (NYSE: WNRL) reported third quarter 2015 net income of $16.5 million, or $0.35 per common limited partner unit, which compares to $0.27 per common limited partner unit in the third quarter of 2014. Third quarter 2015 EBITDA was $27.7 million and distributable cash flow was $18.6 million; this compares to $16.1 million and $15.4 million, respectively, for the third quarter of 2014.
“The third quarter was another solid quarter for us," said WNRL Chief Executive Officer and President Jeff Stevens. “We are pleased with continued growth in the Delaware Basin and Four Corners area, and the strong volumes on the TexNew Mex pipeline. This growth in our logistics business, combined with the solid performance of our wholesale business, allowed us to deliver another great quarter.”
On October 30, the board of directors declared a quarterly cash distribution for the third quarter of 2015 of $0.3825 per unit, or $1.53 per unit on an annualized basis. This distribution represents a 5% increase over the second quarter 2015 distribution of $0.3650 per unit, and a 20% increase over the third quarter 2014 distribution.
On November 2, WNRL announced that it had completed the acquisition of WNR's remaining portion of the TexNew Mex pipeline for $180 million and the issuance of a new class of WNRL partnership interests to WNR.
Stevens concluded, “We are excited about the TexNew Mex acquisition and the positive impact it will have on our operations, allowing us to grow pipeline volume and significantly increase EBITDA and distributable cash flow. Going forward, we will continue to focus on growing our business, which will allow us to continue to deliver distribution growth for our unitholders.”
Conference Call Information
On Tuesday, November 3, 2015, at 3:00 p.m. ET, WNRL will hold a webcast and conference call to discuss the reported results and provide an update on partnership operations. The webcast can be accessed at Western Refining Logistics, LP's website, www.wnrl.com. The call can also be heard by dialing (844) 831-3028 or (315) 625-6887, pass code: 43087876. The audio replay will be available two hours after the end of the call through November 17, 2015 by dialing (855) 859-2056 or (404) 537-3406, pass code: 43087876.
About Western Refining Logistics, LP
Western Refining Logistics, LP is principally a fee-based, growth-oriented master limited partnership formed by Western Refining, Inc. (NYSE: WNR) to own, operate, develop and acquire terminals, storage tanks, pipelines and other logistics assets related to the terminalling, transportation and storage of crude oil and refined products. Headquartered in El Paso, Texas, Western Refining Logistics, LP's assets include approximately 675 miles of pipelines, approximately 8.2 million barrels of active storage capacity, distribution of wholesale petroleum products and crude oil trucking.
More information about Western Refining Logistics, LP is available at www.wnrl.com.
Non-GAAP Financial Measures
In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP), management utilizes non-GAAP measures to facilitate comparisons of past performance. This press release and supporting schedules include the non-GAAP measures Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Distributable Cash Flow. We believe certain investors and financial analysts use EBITDA and Distributable Cash Flow to evaluate WNRL’s financial performance between periods and to compare WNRL's performance to certain competitors. We believe certain investors and financial analysts use Distributable Cash Flow to determine the amount of cash generated from the partnership's operations and available for distribution to its unitholders. These additional financial measures are reconciled from the most directly comparable measures as reported in accordance with GAAP and should be viewed in addition to, and not in lieu of, financial information that we report in accordance with GAAP.
Cautionary Statement on Forward-Looking Statements
This press release contains forward-looking statements. The forward-looking statements reflect WNRL’s current expectation regarding future events, results or outcomes. The forward-looking statements contained herein include statements about: the TexNew Mex acquisition and its positive impact on WNRL’s operations, including its ability to allow WNRL to grow pipeline volume and significantly increase EBITDA and distributable cash flow; and continued growth of WNRL’s business and distributions to its unitholders. These statements are subject to the general risks inherent in WNRL’s business. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, WNRL’s business and operations involve numerous risks and uncertainties, many of which are beyond its control, which could result in WNRL’s expectations not being realized, or otherwise materially affect WNRL’s financial condition, results of operations, and cash flows. Additional information relating to the uncertainties affecting WNRL’s business is contained in its filings with the Securities and Exchange Commission to which you are referred. The forward-looking statements are only as of the date made. Except as required by law, WNRL does not undertake any obligation to (and expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events.
Results of Operations
The following tables set forth WNRL's summary historical financial and operating data for the periods indicated below:
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Unaudited) | |||||||||||||||
(In thousands, except per unit data) | |||||||||||||||
Revenues: | |||||||||||||||
Fee based: | |||||||||||||||
Affiliate | $ | 51,920 | $ | 45,016 | $ | 143,460 | $ | 129,043 | |||||||
Third-party | 787 | 686 | 2,089 | 2,044 | |||||||||||
Sales based: | |||||||||||||||
Affiliate | 158,848 | 234,485 | 456,195 | 660,763 | |||||||||||
Third-party | 462,924 | 635,532 | 1,414,632 | 1,958,816 | |||||||||||
Total revenues | 674,479 | 915,719 | 2,016,376 | 2,750,666 | |||||||||||
Operating costs and expenses: | |||||||||||||||
Cost of products sold: | |||||||||||||||
Affiliate | 156,388 | 234,485 | 449,087 | 660,763 | |||||||||||
Third-party | 445,169 | 616,757 | 1,358,197 | 1,901,022 | |||||||||||
Operating and maintenance expenses | 39,705 | 37,112 | 112,697 | 107,769 | |||||||||||
General and administrative expenses | 5,563 | 6,388 | 17,744 | 17,276 | |||||||||||
Gain on disposal of assets, net | (13 | ) | (34 | ) | (257 | ) | (16 | ) | |||||||
Depreciation and amortization | 4,983 | 4,292 | 14,458 | 12,898 | |||||||||||
Total operating costs and expenses | 651,795 | 899,000 | 1,951,926 | 2,699,712 | |||||||||||
Operating income | 22,684 | 16,719 | 64,450 | 50,954 | |||||||||||
Other income (expense): | |||||||||||||||
Interest income | — | 4 | — | 4 | |||||||||||
Interest expense and other financing costs | (6,204 | ) | (366 | ) | (16,416 | ) | (1,088 | ) | |||||||
Other, net | 16 | 28 | 51 | 103 | |||||||||||
Net income before income taxes | 16,496 | 16,385 | 48,085 | 49,973 | |||||||||||
Provision for income taxes | (3 | ) | (135 | ) | (354 | ) | (339 | ) | |||||||
Net income | 16,493 | 16,250 | 47,731 | 49,634 | |||||||||||
Net income attributable to General Partner | — | 3,985 | — | 15,461 | |||||||||||
Net income attributable to limited partners | $ | 16,493 | $ | 12,265 | $ | 47,731 | $ | 34,173 | |||||||
Net income per limited partner unit: | |||||||||||||||
Common - basic | $ | 0.35 | $ | 0.27 | $ | 1.01 | $ | 0.75 | |||||||
Common - diluted | 0.35 | 0.27 | 1.01 | 0.75 | |||||||||||
Subordinated - basic and diluted | 0.35 | 0.27 | 1.01 | 0.75 | |||||||||||
Weighted average limited partner units outstanding: | |||||||||||||||
Common - basic | 24,017 | 22,811 | 24,006 | 22,811 | |||||||||||
Common - diluted | 24,024 | 22,883 | 24,024 | 22,853 | |||||||||||
Subordinated - basic and diluted | 22,811 | 22,811 | 22,811 | 22,811 | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Unaudited) | |||||||||||||||
(In thousands) | |||||||||||||||
Cash Flow Data | |||||||||||||||
Net cash provided by (used in): | |||||||||||||||
Operating activities | $ | 17,686 | $ | 22,943 | $ | 65,867 | $ | 64,992 | |||||||
Investing activities | (7,446 | ) | (9,199 | ) | (23,568 | ) | (31,301 | ) | |||||||
Financing activities | (17,418 | ) | (14,030 | ) | (25,225 | ) | (38,583 | ) | |||||||
Capital expenditures | 7,609 | 5,248 | 24,021 | 17,335 | |||||||||||
Other Data | |||||||||||||||
EBITDA (1) | $ | 27,683 | $ | 16,093 | $ | 78,959 | $ | 45,627 | |||||||
Distributable cash flow (1) | 18,648 | 15,369 | 57,857 | 44,833 | |||||||||||
Balance Sheet Data (at end of period) | |||||||||||||||
Cash and cash equivalents | $ | 71,372 | $ | 79,112 | |||||||||||
Property, plant and equipment, net | 191,104 | 183,036 | |||||||||||||
Total assets | 412,033 | 308,907 | |||||||||||||
Total liabilities | 440,091 | 16,536 | |||||||||||||
Division equity | — | 62,242 | |||||||||||||
Partners' capital | (28,058 | ) | 230,129 | ||||||||||||
Total liabilities, division equity and partners' capital | 412,033 | 308,907 | |||||||||||||
(1) | We define EBITDA as earnings before interest expense and other financing costs, provision for income taxes and depreciation and amortization. We define Distributable Cash Flow as EBITDA plus the change in deferred revenues, less net cash interest paid, income taxes paid and maintenance capital expenditures. |
EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
• | EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; |
• | EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt; |
• | EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and |
• | EBITDA, as we calculate it, may differ from the EBITDA calculations of our affiliates or other companies in our industry, thereby limiting its usefulness as a comparative measure. |
EBITDA and Distributable Cash Flow are used as supplemental financial measures by management and by external users of our financial statements, such as investors and commercial banks, to assess:
• | our operating performance as compared to those of other companies in the midstream energy industry, without regard to financial methods, historical cost basis or capital structure; |
• | the ability of our assets to generate sufficient cash 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. |
Distributable Cash Flow is also a quantitative standard used by the investment community with respect to publicly traded partnerships because the value of a partnership unit is, in part, measured by its yield. Yield is based on the amount of cash distributions a partnership can pay to a unitholder.
We believe that the presentation of these non-GAAP measures provides useful information to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to EBITDA and Distributable Cash Flow is net income attributable to limited partners. These non-GAAP measures should not be considered as alternatives to net income or any other measure of financial performance presented in accordance with GAAP. EBITDA excludes some, but not all, items that affect net income attributable to limited partners. These non-GAAP measures may vary from those of other companies. As a result, EBITDA and Distributable Cash Flow as presented herein may not be comparable to similarly titled measures of other companies. The calculation of EBITDA and Distributable Cash Flow includes the results of operations for the wholesale segment for the period subsequent to the Wholesale Acquisition through September 30, 2015.
The following table reconciles net income attributable to limited partners to EBITDA for the periods presented and Distributable Cash Flow for the three and nine months ended September 30, 2015 and 2014, respectively. The reconciliation of Distributable Cash Flow to EBITDA for the three and nine months ended September 30, 2015, includes interest accruals related to the 2023 WNRL Senior Notes. Prior to the second quarter of 2015, we calculated Distributable Cash Flows using cash interest paid.
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Unaudited) | |||||||||||||||
(In thousands) | |||||||||||||||
Net income attributable to limited partners | $ | 16,493 | $ | 12,265 | $ | 47,731 | $ | 34,173 | |||||||
Interest expense and other financing costs | 6,204 | 362 | 16,416 | 1,073 | |||||||||||
Provision for income taxes | 3 | 135 | 354 | 339 | |||||||||||
Depreciation and amortization | 4,983 | 3,331 | 14,458 | 10,042 | |||||||||||
EBITDA | 27,683 | 16,093 | 78,959 | 45,627 | |||||||||||
Change in deferred revenues | (218 | ) | 848 | 2,229 | 3,422 | ||||||||||
Interest expense | (5,858 | ) | (230 | ) | (15,491 | ) | (683 | ) | |||||||
Income taxes paid | (156 | ) | (1 | ) | (737 | ) | (1 | ) | |||||||
Maintenance capital expenditures | (2,803 | ) | (1,341 | ) | (7,885 | ) | (3,532 | ) | |||||||
Other | — | — | 782 | — | |||||||||||
Distributable cash flow | $ | 18,648 | $ | 15,369 | $ | 57,857 | $ | 44,833 | |||||||
Logistics Segment
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Unaudited) | |||||||||||||||
(In thousands, except key operating statistics) | |||||||||||||||
Statement of Operations Data: | |||||||||||||||
Fee based revenues: | |||||||||||||||
Affiliate | $ | 40,478 | $ | 34,914 | $ | 110,129 | $ | 101,294 | |||||||
Third-party | 787 | 686 | 2,089 | 2,044 | |||||||||||
Total revenues | 41,265 | 35,600 | 112,218 | 103,338 | |||||||||||
Operating costs and expenses: | |||||||||||||||
Operating and maintenance expenses | 19,841 | 17,034 | 55,162 | 51,123 | |||||||||||
General and administrative expenses | 303 | 626 | 2,168 | 1,769 | |||||||||||
Loss on disposal of assets, net | 124 | — | 124 | — | |||||||||||
Depreciation and amortization | 3,837 | 3,331 | 11,128 | 10,042 | |||||||||||
Total operating costs and expenses | 24,105 | 20,991 | 68,582 | 62,934 | |||||||||||
Operating income | $ | 17,160 | $ | 14,609 | $ | 43,636 | $ | 40,404 | |||||||
Key Operating Statistics: | |||||||||||||||
Pipeline and gathering: | |||||||||||||||
Mainline movements (bpd) (1): | |||||||||||||||
Permian/Delaware Basin system | 56,745 | 27,382 | 45,784 | 22,351 | |||||||||||
Four Corners system | 66,602 | 38,623 | 54,719 | 38,483 | |||||||||||
Gathering (truck offloading) (bpd): | |||||||||||||||
Permian/Delaware Basin system | 25,961 | 24,250 | 24,207 | 24,205 | |||||||||||
Four Corners system | 16,487 | 10,979 | 13,387 | 11,187 | |||||||||||
Pipeline Gathering and Injection system (bpd): | |||||||||||||||
Permian/Delaware Basin system | 8,458 | 1,473 | 5,353 | 1,528 | |||||||||||
Four Corners system | 28,841 | 19,396 | 23,859 | 20,822 | |||||||||||
Tank storage capacity (bbls) (2) | 651,545 | 619,706 | 630,761 | 592,131 | |||||||||||
Terminalling, transportation and storage: | |||||||||||||||
Shipments into and out of storage (bpd) (includes asphalt) | 408,787 | 389,773 | 396,506 | 379,261 | |||||||||||
Terminal storage capacity (bbls) (2) | 7,420,754 | 7,355,432 | 7,464,236 | 7,355,432 | |||||||||||
(1) | Some barrels of crude oil in route to Western's Gallup refinery and Permian/Delaware Basin are transported on more than one of our mainlines. Mainline movements for the Four Corners and Delaware Basin systems include each barrel transported on each mainline. During the second quarter, we began shipping crude oil from the Four Corners system, through a pipeline connection, to the Permian/Delaware system. |
(2) | Storage shell capacities represent weighted-average capacities for the periods indicated. |
Wholesale Segment
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Unaudited) | |||||||||||||||
(In thousands, except key operating stats) | |||||||||||||||
Statement of Operations Data: | |||||||||||||||
Fee based revenues (1): | |||||||||||||||
Affiliate | $ | 11,442 | $ | 10,102 | $ | 33,331 | $ | 27,749 | |||||||
Sales based revenues (1): | |||||||||||||||
Affiliate | 158,848 | 234,485 | 456,195 | 660,763 | |||||||||||
Third-party | 462,924 | 635,532 | 1,414,632 | 1,958,816 | |||||||||||
Total revenues | 633,214 | 880,119 | 1,904,158 | 2,647,328 | |||||||||||
Operating costs and expenses: | |||||||||||||||
Cost of products sold: | |||||||||||||||
Affiliate | 156,388 | 234,485 | 449,087 | 660,763 | |||||||||||
Third-party | 445,169 | 616,757 | 1,358,197 | 1,901,022 | |||||||||||
Operating and maintenance expenses | 19,864 | 20,078 | 57,535 | 56,646 | |||||||||||
General and administrative expenses | 2,269 | 2,887 | 6,715 | 8,328 | |||||||||||
Gain on disposal of assets, net | (137 | ) | (34 | ) | (381 | ) | (16 | ) | |||||||
Depreciation and amortization | 1,146 | 961 | 3,330 | 2,856 | |||||||||||
Total operating costs and expenses | 624,699 | 875,134 | 1,874,483 | 2,629,599 | |||||||||||
Operating income | $ | 8,515 | $ | 4,985 | $ | 29,675 | $ | 17,729 | |||||||
Key Operating Statistics: | |||||||||||||||
Fuel gallons sold (in thousands) | 305,566 | 289,822 | 919,808 | 850,840 | |||||||||||
Fuel gallons sold to retail (included in fuel gallons sold above) (in thousands) | 81,538 | 68,064 | 235,824 | 194,753 | |||||||||||
Fuel margin per gallon (2) | $ | 0.029 | $ | 0.019 | $ | 0.031 | $ | 0.021 | |||||||
Lubricant gallons sold (in thousands) | 2,998 | 3,071 | 8,969 | 9,163 | |||||||||||
Lubricant margin per gallon (3) | $ | 0.70 | $ | 0.83 | $ | 0.71 | $ | 0.81 | |||||||
Crude oil trucking volume (bpd) | 49,620 | 39,473 | 47,245 | 34,610 | |||||||||||
Average crude oil revenue per barrel | $ | 2.51 | $ | 2.78 | $ | 2.58 | $ | 2.94 | |||||||
(1) | All wholesale fee based revenues are generated through fees charged to Western's refining segment for truck transportation and delivery of crude oil. Affiliate and third-party sales based revenues result from sales of refined products to Western and third-party customers at a delivered price that includes charges for product transportation. |
(2) | Fuel margin per gallon is a measurement calculated by dividing the difference between fuel sales, net of transportation charges, and cost of fuel sales for our wholesale segment by the number of gallons sold. Fuel margin per gallon is a measure frequently used in the petroleum products wholesale industry to measure operating results related to fuel sales. |
(3) | Lubricant margin per gallon is a measurement calculated by dividing the difference between lubricant sales, net of transportation charges, and lubricant cost of products sold by the number of gallons sold. Lubricant margin is a measure frequently used in the petroleum products wholesale industry to measure operating results related to lubricant sales. |