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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Northern Tier Energy LP Common Units Representing Limited Partner Interests (delisted) | NYSE:NTI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 21.15 | 0 | 01:00:00 |
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2016
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _____ to _____
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Commission File Number
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Registrant; State of Incorporation; Address and Telephone Number
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I.R.S. Employer Identification No.
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001-32721
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WESTERN REFINING, INC.
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20-3472415
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Delaware
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123 W. Mills Ave., Suite 200
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El Paso, Texas 79901
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(
915) 534-1400
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001-35612
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NORTHERN TIER ENERGY LP
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80-0763623
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Delaware
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1250 W. Washington Street, Suite 300
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Tempe, Arizona 85281
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(602) 302-5450
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Western Refining, Inc.
|
Yes
|
þ
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No
|
o
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Northern Tier Energy LP
|
Yes
|
þ
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No
|
o
|
Western Refining, Inc.
|
Yes
|
þ
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No
|
o
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Northern Tier Energy LP
|
Yes
|
þ
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No
|
o
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Western Refining, Inc.
|
Large accelerated filer
þ
|
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Northern Tier Energy LP
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Large accelerated filer
þ
|
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Accelerated filer
o
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|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
Western Refining, Inc.
|
Yes
|
o
|
No
|
þ
|
Northern Tier Energy LP
|
Yes
|
o
|
No
|
þ
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Item 1. Financial Statements
(Unaudited)
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Item 2. Unregistered Sale of Equity Securities
and Use of Proceeds
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EX-10.3
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EX-31.1
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EX-31.2
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EX-32.1
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EX-32.2
|
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EX-101
|
•
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our ability to realize the anticipated benefits of the merger with NTI;
|
•
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availability, costs and price volatility of crude oil, other refinery feedstocks and refined products;
|
•
|
the successful integration and future performance of acquired assets, businesses or third-party product supply, and the possibility that expected synergies may not be achieved;
|
•
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the impact on us of increased levels and cost of indebtedness used to fund our merger with NTI or the cash portion of the merger consideration and increased cost of existing indebtedness due to the actions taken to consummate the merger with NTI;
|
•
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our ability to obtain debt or equity financing on satisfactory terms to fund additional acquisitions, expansion projects, working capital requirements and the repayment or refinancing of indebtedness;
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•
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changes in crack spreads;
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•
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changes in the spreads between WTI Cushing crude oil and other crude oil benchmarks such as West Texas Sour crude oil, WTI Midland crude oil, Bakken shale crude oil, Dated Brent crude oil and Western Canadian Select crude oil;
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•
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effects of and exposure to risks related to our commodity hedging strategies and transactions;
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•
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availability and costs of renewable fuels for blending and RINs to meet Renewable Fuel Standards ("RFS") obligations;
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•
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construction of new or expansion of existing product or crude oil pipelines by us or our competitors, including in the Permian Basin, the San Juan Basin and at Cushing, Oklahoma;
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•
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changes in the underlying demand for our refined products;
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•
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instability and volatility in the financial markets, including as a result of potential disruptions caused by economic uncertainties, commodity price fluctuations and expectations for changes in interest rates;
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•
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a potential economic recession in the United States and/or abroad;
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•
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adverse changes in the credit ratings assigned to our and our subsidiaries' debt instruments;
|
•
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changes in the availability and cost of capital;
|
•
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actions of customers and competitors;
|
•
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actions of third-party operators, processors and transporters;
|
•
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changes in fuel and utility costs incurred by our refineries;
|
•
|
the effect of weather-related problems upon our operations;
|
•
|
disruptions due to equipment interruption, pipeline disruptions or failure at our or third-party facilities;
|
•
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execution of planned capital projects, cost overruns relating to those projects and failure to realize the expected benefits from those projects;
|
•
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effects of and costs relating to compliance with current and future local, state and federal environmental, economic, climate change, safety, tax and other laws, policies and regulations and enforcement initiatives;
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•
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rulings, judgments or settlements in litigation, tax or other legal or regulatory matters, including unexpected environmental remediation costs in excess of any reserves or insurance coverage;
|
•
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the price, availability and acceptance of alternative fuels and alternative fuel vehicles;
|
•
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labor relations;
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•
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operating hazards, natural disasters, casualty losses, acts of terrorism including cyber-attacks and other matters beyond our control; and
|
•
|
other factors discussed in more detail under
Part I — Item 1A. Risk Factors
in Western's and NTI's Annual Reports on Form 10-K for the year ended
December 31, 2015
("
2015
10‑K").
|
Item 1.
|
Financial Statements
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents (WNRL: $16,542 and $44,605, respectively)
|
$
|
266,096
|
|
|
$
|
772,502
|
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Restricted cash
|
195,000
|
|
|
—
|
|
||
Accounts receivable, trade, net of a reserve for doubtful accounts of $246 and $169, respectively (WNRL: $57,065 and $55,053, respectively)
|
447,327
|
|
|
359,237
|
|
||
Inventories (WNRL: $11,130 and $15,200, respectively)
|
660,738
|
|
|
547,538
|
|
||
Prepaid expenses (WNRL: $5,523 and $4,133, respectively)
|
129,138
|
|
|
73,213
|
|
||
Other current assets (WNRL: $6,066 and $5,943, respectively)
|
121,581
|
|
|
169,728
|
|
||
Total current assets
|
1,819,880
|
|
|
1,922,218
|
|
||
Restricted cash
|
—
|
|
|
69,106
|
|
||
Equity method investment
|
98,185
|
|
|
97,513
|
|
||
Property, plant and equipment, net (WNRL: $422,006 and $430,141, respectively)
|
2,357,291
|
|
|
2,305,171
|
|
||
Goodwill
|
1,289,443
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|
1,289,443
|
|
||
Intangible assets, net (WNRL: $6,813 and $7,757, respectively)
|
84,543
|
|
|
84,945
|
|
||
Other assets (WNRL: $3,409 and $3,376, respectively)
|
65,783
|
|
|
64,997
|
|
||
Total assets
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$
|
5,715,125
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$
|
5,833,393
|
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LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable (WNRL: $9,171 and $10,501, respectively)
|
$
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634,716
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|
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$
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553,957
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Accrued liabilities (WNRL: $34,181 and $30,624, respectively)
|
216,169
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|
248,395
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|
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Current portion of long-term debt
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10,500
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5,500
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||
Total current liabilities
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861,385
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807,852
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|
||
Long-term liabilities:
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|
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|
||||
Long-term debt, less current portion (WNRL: $312,835 and $437,467, respectively)
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2,045,180
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1,644,894
|
|
||
Lease financing obligations
|
54,541
|
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|
53,232
|
|
||
Deferred income tax liability, net
|
416,951
|
|
|
312,914
|
|
||
Other liabilities (WNRL: $9 in both periods)
|
69,622
|
|
|
68,595
|
|
||
Total long-term liabilities
|
2,586,294
|
|
|
2,079,635
|
|
||
Commitments and contingencies
|
|
|
|
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|
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Equity:
|
|
|
|
||||
Western shareholders' equity:
|
|
|
|
||||
Common stock, par value $0.01, 240,000,000 shares authorized; 108,426,740 and 102,773,705 shares issued, respectively
|
1,085
|
|
|
1,028
|
|
||
Preferred stock, par value $0.01, 10,000,000 shares authorized; no shares issued or outstanding
|
—
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|
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—
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|
||
Additional paid-in capital
|
550,876
|
|
|
492,848
|
|
||
Retained earnings
|
1,112,895
|
|
|
1,167,938
|
|
||
Accumulated other comprehensive loss, net of tax
|
599
|
|
|
651
|
|
||
Treasury stock, 9,089,623 shares at cost
|
—
|
|
|
(363,168
|
)
|
||
Total Western shareholders' equity
|
1,665,455
|
|
|
1,299,297
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|
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Non-controlling interests
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601,991
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1,646,609
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|
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Total equity
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2,267,446
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|
2,945,906
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Total liabilities and equity
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$
|
5,715,125
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$
|
5,833,393
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|
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Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net sales
|
$
|
2,065,076
|
|
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$
|
2,569,090
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$
|
5,627,888
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$
|
7,716,712
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|
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of products sold (exclusive of depreciation and amortization)
|
1,607,010
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|
|
1,895,772
|
|
|
4,256,999
|
|
|
5,814,969
|
|
||||
Direct operating expenses (exclusive of depreciation and amortization)
|
232,553
|
|
|
234,440
|
|
|
687,307
|
|
|
674,474
|
|
||||
Selling, general and administrative expenses
|
57,320
|
|
|
54,465
|
|
|
166,657
|
|
|
169,808
|
|
||||
Gain on disposal of assets, net
|
(279
|
)
|
|
(52
|
)
|
|
(1,181
|
)
|
|
(157
|
)
|
||||
Maintenance turnaround expense
|
27,208
|
|
|
490
|
|
|
27,733
|
|
|
1,188
|
|
||||
Depreciation and amortization
|
54,321
|
|
|
51,377
|
|
|
161,331
|
|
|
152,446
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|
||||
Total operating costs and expenses
|
1,978,133
|
|
|
2,236,492
|
|
|
5,298,846
|
|
|
6,812,728
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|
||||
Operating income
|
86,943
|
|
|
332,598
|
|
|
329,042
|
|
|
903,984
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
141
|
|
|
186
|
|
|
436
|
|
|
550
|
|
||||
Interest and debt expense
|
(34,456
|
)
|
|
(26,896
|
)
|
|
(88,065
|
)
|
|
(79,169
|
)
|
||||
Other, net
|
3,380
|
|
|
4,327
|
|
|
13,825
|
|
|
11,557
|
|
||||
Income before income taxes
|
56,008
|
|
|
310,215
|
|
|
255,238
|
|
|
836,922
|
|
||||
Provision for income taxes
|
(11,700
|
)
|
|
(92,117
|
)
|
|
(68,481
|
)
|
|
(229,989
|
)
|
||||
Net income
|
44,308
|
|
|
218,098
|
|
|
186,757
|
|
|
606,933
|
|
||||
Less net income attributable to non-controlling interests
|
5,733
|
|
|
64,795
|
|
|
52,229
|
|
|
213,722
|
|
||||
Net income attributable to Western Refining, Inc.
|
$
|
38,575
|
|
|
$
|
153,303
|
|
|
$
|
134,528
|
|
|
$
|
393,211
|
|
|
|
|
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|
|
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|
||||||||
Net earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.36
|
|
|
$
|
1.61
|
|
|
$
|
1.37
|
|
|
$
|
4.12
|
|
Diluted
|
0.35
|
|
|
1.61
|
|
|
1.37
|
|
|
4.12
|
|
||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
108,424
|
|
|
94,826
|
|
|
97,802
|
|
|
95,308
|
|
||||
Diluted
|
108,734
|
|
|
94,924
|
|
|
98,110
|
|
|
95,408
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per common share
|
$
|
0.38
|
|
|
$
|
0.34
|
|
|
$
|
1.14
|
|
|
$
|
0.98
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income
|
$
|
44,308
|
|
|
$
|
218,098
|
|
|
$
|
186,757
|
|
|
$
|
606,933
|
|
Other comprehensive income items:
|
|
|
|
|
|
|
|
||||||||
Benefit plans:
|
|
|
|
|
|
|
|
||||||||
Amortization of net prior service cost
|
—
|
|
|
—
|
|
|
(133
|
)
|
|
107
|
|
||||
Reclassification of loss to income
|
—
|
|
|
13
|
|
|
11
|
|
|
38
|
|
||||
Other comprehensive income (loss) before tax
|
—
|
|
|
13
|
|
|
(122
|
)
|
|
145
|
|
||||
Income tax
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(14
|
)
|
||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
8
|
|
|
(122
|
)
|
|
131
|
|
||||
Comprehensive income
|
44,308
|
|
|
218,106
|
|
|
186,635
|
|
|
607,064
|
|
||||
Less comprehensive income attributable to non-controlling interests
|
5,733
|
|
|
64,795
|
|
|
52,159
|
|
|
213,788
|
|
||||
Comprehensive income attributable to Western Refining, Inc.
|
$
|
38,575
|
|
|
$
|
153,311
|
|
|
$
|
134,476
|
|
|
$
|
393,276
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
186,757
|
|
|
$
|
606,933
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
161,331
|
|
|
152,446
|
|
||
Changes in fair value of commodity hedging instruments
|
54,698
|
|
|
42,073
|
|
||
Reserve for doubtful accounts
|
77
|
|
|
103
|
|
||
Amortization of loan fees and original issue discount
|
5,948
|
|
|
4,801
|
|
||
Stock-based compensation expense
|
17,490
|
|
|
12,576
|
|
||
Deferred income taxes
|
58,727
|
|
|
47
|
|
||
Change in lower of cost or market reserve
|
(102,519
|
)
|
|
(17,131
|
)
|
||
Excess tax benefit from stock-based compensation
|
(26
|
)
|
|
(879
|
)
|
||
Income from equity method investment, net of dividends
|
(850
|
)
|
|
(12,029
|
)
|
||
Gain on disposal of assets, net
|
(1,181
|
)
|
|
(157
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|||
Accounts receivable
|
(88,976
|
)
|
|
54,738
|
|
||
Inventories
|
(10,681
|
)
|
|
(5,479
|
)
|
||
Prepaid expenses
|
(55,925
|
)
|
|
(10,706
|
)
|
||
Other assets
|
(7,768
|
)
|
|
(43,093
|
)
|
||
Accounts payable and accrued liabilities
|
69,572
|
|
|
(113,051
|
)
|
||
Other long-term liabilities
|
(8,797
|
)
|
|
(5,528
|
)
|
||
Net cash provided by operating activities
|
277,877
|
|
|
665,664
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(235,097
|
)
|
|
(195,976
|
)
|
||
Increase in restricted cash
|
(195,000
|
)
|
|
—
|
|
||
Use of restricted cash
|
69,106
|
|
|
154,681
|
|
||
Return of capital from equity method investment
|
—
|
|
|
5,780
|
|
||
Proceeds from the sale of assets
|
3,912
|
|
|
1,061
|
|
||
Net cash used in investing activities
|
(357,079
|
)
|
|
(34,454
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Additions to long-term debt
|
500,000
|
|
|
300,000
|
|
||
Payments on long-term debt and capital lease obligations
|
(7,150
|
)
|
|
(5,559
|
)
|
||
Borrowings on revolving credit facility
|
393,900
|
|
|
—
|
|
||
Repayments on revolving credit facility
|
(466,600
|
)
|
|
(269,000
|
)
|
||
Payments for NTI units related to merger
|
(859,893
|
)
|
|
—
|
|
||
Transaction costs for NTI merger
|
(11,741
|
)
|
|
—
|
|
||
Proceeds from issuance of WNRL common units
|
277,751
|
|
|
—
|
|
||
Offering costs for issuance of WNRL common units
|
(417
|
)
|
|
—
|
|
||
Deferred financing costs
|
(12,410
|
)
|
|
(6,820
|
)
|
||
Purchase of common stock for treasury
|
(75,000
|
)
|
|
(105,000
|
)
|
||
Distribution to non-controlling interest holders
|
(54,115
|
)
|
|
(173,687
|
)
|
||
Dividends paid
|
(111,555
|
)
|
|
(93,612
|
)
|
||
Excess tax benefit from stock-based compensation
|
26
|
|
|
879
|
|
||
Net cash used in financing activities
|
(427,204
|
)
|
|
(352,799
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(506,406
|
)
|
|
278,411
|
|
||
Cash and cash equivalents at beginning of period
|
772,502
|
|
|
431,159
|
|
||
Cash and cash equivalents at end of period
|
$
|
266,096
|
|
|
$
|
709,570
|
|
•
|
Recognition and reporting of revenues - the requirements were amended to remove inconsistencies in revenue requirements and to provide a more complete framework for addressing revenue issues across a broad range of industries and transaction types. The revised standard’s core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The revised standard also addresses principal versus agent considerations and indicators related to transfer of control over specified goods. These provisions are effective January 1, 2018, and are to be applied retrospectively, with early adoption permitted for periods beginning after December 15, 2016, and interim periods thereafter.
|
•
|
Lease accounting - the requirements were amended with regard to recognizing lease assets and lease liabilities on the balance sheet and disclosing information about leasing arrangements. The core principle is that a lessee should recognize the assets and liabilities that arise from leases. These provisions are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted.
|
•
|
Employee share-based payment accounting - the requirements involve several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, classification in the statement of cash flows and forfeiture rate calculations. These provisions are effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods. Early adoption is permitted in any interim or annual period.
|
•
|
Cash flow statement - the requirements address certain classification issues related to the statement of cash flows. These provisions are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted in any interim or annual period.
|
•
|
Recognition of breakage for certain prepaid stored-value products - the requirements align recognition of the financial liabilities related to prepaid stored-value products with the revenue recognition standard discussed above for non-financial liabilities. Certain of these liabilities may be extinguished proportionally in earnings as redemptions occur, or when redemption is remote if issuers are not entitled to the unredeemed stored value. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 with early adoption permitted subject to certain requirements.
|
•
|
Contingent put and call options in debt instruments - the requirements will reduce diversity of practice in identifying embedded derivatives in debt instruments and clarify the nature of an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt instrument and accounted for separately as a derivative. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, with early adoption permitted subject to certain requirements.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
Operating Results:
|
|
|
|
|
|
|
|
||||||||
Refining (2)
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
1,835,327
|
|
|
$
|
2,318,048
|
|
|
$
|
5,012,283
|
|
|
$
|
6,958,443
|
|
Intersegment eliminations
|
736,020
|
|
|
843,674
|
|
|
2,075,758
|
|
|
2,403,438
|
|
||||
Net refining sales to external customers
|
1,099,307
|
|
|
1,474,374
|
|
|
2,936,525
|
|
|
4,555,005
|
|
||||
WNRL (2)
|
|
|
|
|
|
|
|
||||||||
Net sales
|
569,261
|
|
|
680,670
|
|
|
1,615,902
|
|
|
2,023,970
|
|
||||
Intersegment eliminations
|
183,154
|
|
|
216,959
|
|
|
513,101
|
|
|
607,249
|
|
||||
Net WNRL sales to external customers
|
386,107
|
|
|
463,711
|
|
|
1,102,801
|
|
|
1,416,721
|
|
||||
Retail
|
|
|
|
|
|
|
|
||||||||
Net sales
|
597,621
|
|
|
633,793
|
|
|
1,610,033
|
|
|
1,753,503
|
|
||||
Intersegment eliminations
|
17,959
|
|
|
2,788
|
|
|
21,471
|
|
|
8,517
|
|
||||
Net retail sales to external customers
|
579,662
|
|
|
631,005
|
|
|
1,588,562
|
|
|
1,744,986
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Consolidated net sales to external customers
|
$
|
2,065,076
|
|
|
$
|
2,569,090
|
|
|
$
|
5,627,888
|
|
|
$
|
7,716,712
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
|
|
|
|
|
|
|
||||||||
Refining (1) (2)
|
$
|
89,158
|
|
|
$
|
312,602
|
|
|
$
|
338,803
|
|
|
$
|
900,405
|
|
WNRL (2)
|
13,271
|
|
|
18,424
|
|
|
43,056
|
|
|
41,454
|
|
||||
Retail
|
11,832
|
|
|
24,937
|
|
|
21,193
|
|
|
36,356
|
|
||||
Other
|
(27,318
|
)
|
|
(23,365
|
)
|
|
(74,010
|
)
|
|
(74,231
|
)
|
||||
Operating income from segments
|
86,943
|
|
|
332,598
|
|
|
329,042
|
|
|
903,984
|
|
||||
Other income (expense), net
|
(30,935
|
)
|
|
(22,383
|
)
|
|
(73,804
|
)
|
|
(67,062
|
)
|
||||
Consolidated income before income taxes
|
$
|
56,008
|
|
|
$
|
310,215
|
|
|
$
|
255,238
|
|
|
$
|
836,922
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
||||||||
Refining (2)
|
$
|
37,265
|
|
|
$
|
35,400
|
|
|
$
|
111,601
|
|
|
$
|
105,916
|
|
WNRL (2)
|
10,579
|
|
|
8,963
|
|
|
29,470
|
|
|
25,816
|
|
||||
Retail
|
5,710
|
|
|
5,846
|
|
|
17,622
|
|
|
17,257
|
|
||||
Other
|
767
|
|
|
1,168
|
|
|
2,638
|
|
|
3,457
|
|
||||
Consolidated depreciation and amortization
|
$
|
54,321
|
|
|
$
|
51,377
|
|
|
$
|
161,331
|
|
|
$
|
152,446
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
|
|
|
|
|
|
|
||||||||
Refining (2)
|
$
|
65,909
|
|
|
$
|
61,399
|
|
|
$
|
200,681
|
|
|
$
|
127,914
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
WNRL (2)
|
8,530
|
|
|
10,648
|
|
|
24,378
|
|
|
52,150
|
|
||||
Retail
|
3,593
|
|
|
3,903
|
|
|
8,528
|
|
|
13,175
|
|
||||
Other
|
305
|
|
|
481
|
|
|
1,510
|
|
|
2,737
|
|
||||
Consolidated capital expenditures
|
$
|
78,337
|
|
|
$
|
76,431
|
|
|
$
|
235,097
|
|
|
$
|
195,976
|
|
|
|
|
|
|
|
|
|
||||||||
Total assets
|
|
|
|
|
|
|
|
||||||||
Refining (2) (including $1,267,455 of goodwill)
|
|
|
|
|
$
|
4,394,967
|
|
|
$
|
3,574,746
|
|
||||
WNRL (2)
|
|
|
|
|
528,554
|
|
|
601,215
|
|
||||||
Retail (including $21,988 of goodwill)
|
|
|
|
|
430,363
|
|
|
430,147
|
|
||||||
Other
|
|
|
|
|
361,241
|
|
|
1,234,285
|
|
||||||
Consolidated total assets
|
|
|
|
|
$
|
5,715,125
|
|
|
$
|
5,840,393
|
|
(1)
|
The effect of our economic hedging activity is included within the operating income of our refining segment as a component of cost of products sold. The cost of products sold within our refining segment included
$0.1 million
in net realized and unrealized economic hedging
gains
for the three months ended
September 30, 2016
,
$8.6 million
in net realized and unrealized economic hedging
losses
for the
nine
months ended
September 30, 2016
, respectively, and
$27.2 million
and
$10.3 million
in net realized and unrealized economic hedging
gains
for the
three and nine
months ended
September 30, 2015
, respectively. Also included within cost of products sold for our refining segment is the net effect of non-cash LCM recoveries of
$15.2 million
and
$102.5 million
for the
three and nine
months ended
September 30, 2016
, respectively, charges of
$36.8 million
for the three months ended
September 30, 2015
and recoveries of
$17.1 million
for the
nine
months ended
September 30, 2015
.
|
(2)
|
WNRL's financial data includes its historical financial results and an allocated portion of corporate general and administrative expenses, previously reported as Other, for the
three and nine
months ended
September 30, 2015
. The information contained herein for WNRL has been retrospectively adjusted, to include the historical results of the
St. Paul Park Logistics Assets
and the
TexNew Mex Pipeline System
.
|
Level 1
|
Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
Level 2
|
Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs that are derived principally from or corroborated by observable market data.
|
Level 3
|
Inputs are derived from valuation techniques that one or more significant inputs or value drivers are unobservable and cannot be corroborated by market data or other entity-specific inputs.
|
|
Carrying Value at September 30, 2016
|
|
Fair Value Measurement Using
|
|
Netting Adjustments
|
|
Recorded Value at September 30, 2016
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Gross financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other current assets
|
$
|
34,060
|
|
|
$
|
—
|
|
|
$
|
34,060
|
|
|
$
|
—
|
|
|
$
|
(7,303
|
)
|
|
$
|
26,757
|
|
Other assets
|
4,455
|
|
|
—
|
|
|
4,455
|
|
|
—
|
|
|
(1,604
|
)
|
|
2,851
|
|
||||||
Gross financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accrued liabilities
|
(10,449
|
)
|
|
—
|
|
|
(9,688
|
)
|
|
(761
|
)
|
|
5,992
|
|
|
(4,457
|
)
|
||||||
Other long-term liabilities
|
(3,068
|
)
|
|
—
|
|
|
(3,068
|
)
|
|
—
|
|
|
2,915
|
|
|
(153
|
)
|
||||||
|
$
|
24,998
|
|
|
$
|
—
|
|
|
$
|
25,759
|
|
|
$
|
(761
|
)
|
|
$
|
—
|
|
|
$
|
24,998
|
|
|
Carrying Value at December 31, 2015
|
|
Fair Value Measurement Using
|
|
Netting Adjustments
|
|
Recorded Value at December 31, 2015
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Gross financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other current assets
|
$
|
95,062
|
|
|
$
|
—
|
|
|
$
|
95,062
|
|
|
$
|
—
|
|
|
$
|
(16,937
|
)
|
|
$
|
78,125
|
|
Other assets
|
11,881
|
|
|
—
|
|
|
11,881
|
|
|
—
|
|
|
—
|
|
|
11,881
|
|
||||||
Gross financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accrued liabilities
|
(21,454
|
)
|
|
—
|
|
|
(15,698
|
)
|
|
(5,756
|
)
|
|
11,181
|
|
|
(10,273
|
)
|
||||||
Other long-term liabilities
|
(5,756
|
)
|
|
—
|
|
|
(5,756
|
)
|
|
—
|
|
|
5,756
|
|
|
—
|
|
||||||
|
$
|
79,733
|
|
|
$
|
—
|
|
|
$
|
85,489
|
|
|
$
|
(5,756
|
)
|
|
$
|
—
|
|
|
$
|
79,733
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
Asset (liability) balance at beginning of period
|
$
|
(1,951
|
)
|
|
$
|
1,614
|
|
|
$
|
(5,756
|
)
|
|
$
|
330
|
|
Change in fair value
|
237
|
|
|
(2,505
|
)
|
|
537
|
|
|
—
|
|
||||
Fair value of trades entered into during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,262
|
)
|
||||
Fair value reclassification from Level 3 to Level 2
|
953
|
|
|
(288
|
)
|
|
4,458
|
|
|
(247
|
)
|
||||
Liability balance at end of period
|
$
|
(761
|
)
|
|
$
|
(1,179
|
)
|
|
$
|
(761
|
)
|
|
$
|
(1,179
|
)
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
|
(In thousands)
|
||||||
Western obligations:
|
|
|
|
||||
Carrying amount
|
$
|
1,383,625
|
|
|
$
|
889,000
|
|
Fair value
|
1,380,125
|
|
|
867,178
|
|
||
NTI obligations:
|
|
|
|
||||
Carrying amount
|
$
|
402,000
|
|
|
$
|
350,000
|
|
Fair value
|
412,500
|
|
|
360,500
|
|
||
WNRL obligations:
|
|
|
|
||||
Carrying amount
|
$
|
320,300
|
|
|
$
|
445,000
|
|
Fair value
|
330,800
|
|
|
439,000
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
|
(In thousands)
|
||||||
Refined products (1)
|
$
|
259,125
|
|
|
$
|
201,928
|
|
Crude oil and other raw materials
|
348,109
|
|
|
288,403
|
|
||
Lubricants
|
11,118
|
|
|
14,996
|
|
||
Retail store merchandise
|
42,386
|
|
|
42,211
|
|
||
Inventories
|
$
|
660,738
|
|
|
$
|
547,538
|
|
(1)
|
Includes
$15.8 million
and
$14.5 million
of refined products inventory valued using the first-in, first-out ("FIFO") valuation method at
September 30, 2016
and
December 31, 2015
, respectively.
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||
|
Barrels
|
|
LIFO Cost
|
|
Average
LIFO
Cost Per
Barrel
|
|
Barrels
|
|
LIFO Cost
|
|
Average
LIFO
Cost Per
Barrel
|
||||||||||
|
(In thousands, except cost per barrel)
|
||||||||||||||||||||
Refined products
|
4,033
|
|
|
$
|
279,917
|
|
|
$
|
69.41
|
|
|
3,536
|
|
|
$
|
259,722
|
|
|
$
|
73.45
|
|
Crude oil and other
|
6,348
|
|
|
384,067
|
|
|
60.50
|
|
|
6,490
|
|
|
391,237
|
|
|
60.28
|
|
||||
|
10,381
|
|
|
$
|
663,984
|
|
|
63.96
|
|
|
10,026
|
|
|
$
|
650,959
|
|
|
64.93
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
|
(In thousands)
|
||||||
Refinery facilities and related equipment
|
$
|
2,198,560
|
|
|
$
|
2,113,650
|
|
Pipelines, terminals and transportation equipment
|
553,402
|
|
|
427,854
|
|
||
Retail facilities and related equipment
|
327,898
|
|
|
324,686
|
|
||
Wholesale facilities and related equipment
|
53,190
|
|
|
59,875
|
|
||
Corporate
|
52,105
|
|
|
50,607
|
|
||
|
3,185,155
|
|
|
2,976,672
|
|
||
Accumulated depreciation
|
(1,070,501
|
)
|
|
(923,415
|
)
|
||
|
2,114,654
|
|
|
2,053,257
|
|
||
Construction in progress
|
242,637
|
|
|
251,914
|
|
||
Property, plant and equipment, net
|
$
|
2,357,291
|
|
|
$
|
2,305,171
|
|
|
September 30, 2016
|
|
December 31, 2015
|
|
Weighted- Average Amortization Period
(Years)
|
||||||||||||||||||||
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
|
|||||||||||||
|
(In thousands)
|
|
|
||||||||||||||||||||||
Amortizable assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Licenses and permits
|
$
|
20,427
|
|
|
$
|
(14,913
|
)
|
|
$
|
5,514
|
|
|
$
|
20,427
|
|
|
$
|
(13,729
|
)
|
|
$
|
6,698
|
|
|
3.5
|
Customer relationships
|
7,172
|
|
|
(4,102
|
)
|
|
3,070
|
|
|
7,551
|
|
|
(3,921
|
)
|
|
3,630
|
|
|
5.8
|
||||||
Rights-of-way and other
|
7,889
|
|
|
(2,388
|
)
|
|
5,501
|
|
|
6,839
|
|
|
(1,797
|
)
|
|
5,042
|
|
|
5.5
|
||||||
|
35,488
|
|
|
(21,403
|
)
|
|
14,085
|
|
|
34,817
|
|
|
(19,447
|
)
|
|
15,370
|
|
|
|
||||||
Unamortizable assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Franchise rights and trademarks
|
50,500
|
|
|
—
|
|
|
50,500
|
|
|
50,500
|
|
|
—
|
|
|
50,500
|
|
|
|
||||||
Liquor licenses
|
19,958
|
|
|
—
|
|
|
19,958
|
|
|
19,075
|
|
|
—
|
|
|
19,075
|
|
|
|
||||||
Intangible assets, net
|
$
|
105,946
|
|
|
$
|
(21,403
|
)
|
|
$
|
84,543
|
|
|
$
|
104,392
|
|
|
$
|
(19,447
|
)
|
|
$
|
84,945
|
|
|
|
Remainder of 2016
|
$
|
720
|
|
2017
|
2,880
|
|
|
2018
|
2,880
|
|
|
2019
|
2,212
|
|
|
2020
|
1,268
|
|
|
2021
|
980
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
|
(In thousands)
|
||||||
Western obligations:
|
|
|
|
||||
Revolving Credit Facility due 2019
|
$
|
—
|
|
|
$
|
—
|
|
Term Loan - 5.25% Credit Facility due 2020
|
534,875
|
|
|
539,000
|
|
||
6.25% Senior Unsecured Notes due 2021
|
350,000
|
|
|
350,000
|
|
||
Term Loan - 5.50% Credit Facility due 2023
|
498,750
|
|
|
—
|
|
||
Total Western obligations
|
1,383,625
|
|
|
889,000
|
|
||
NTI obligations:
|
|
|
|
||||
Revolving Credit Facility due 2019
|
52,000
|
|
|
—
|
|
||
7.125% Senior Secured Notes due 2020
|
350,000
|
|
|
350,000
|
|
||
Total NTI obligations
|
402,000
|
|
|
350,000
|
|
||
WNRL obligations:
|
|
|
|
||||
Revolving Credit Facility due 2018
|
20,300
|
|
|
145,000
|
|
||
7.5% Senior Notes due 2023
|
300,000
|
|
|
300,000
|
|
||
Total WNRL obligations
|
320,300
|
|
|
445,000
|
|
||
Less unamortized discount, premium and debt issuance costs
|
50,245
|
|
|
33,606
|
|
||
Long-term debt
|
2,055,680
|
|
|
1,650,394
|
|
||
Current portion of long-term debt
|
(10,500
|
)
|
|
(5,500
|
)
|
||
Long-term debt, net of current portion
|
$
|
2,045,180
|
|
|
$
|
1,644,894
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
Contractual interest:
|
|
|
|
|
|
|
|
||||||||
Western obligations
|
$
|
20,475
|
|
|
$
|
12,150
|
|
|
$
|
45,606
|
|
|
$
|
36,250
|
|
NTI obligations
|
6,918
|
|
|
6,970
|
|
|
20,707
|
|
|
20,173
|
|
||||
WNRL obligations
|
6,039
|
|
|
5,854
|
|
|
19,144
|
|
|
15,481
|
|
||||
|
33,432
|
|
|
24,974
|
|
|
85,457
|
|
|
71,904
|
|
||||
Amortization of loan fees
|
2,479
|
|
|
1,932
|
|
|
6,395
|
|
|
5,630
|
|
||||
Amortization of original issuance discount
|
381
|
|
|
—
|
|
|
410
|
|
|
—
|
|
||||
Other interest expense
|
1,287
|
|
|
747
|
|
|
3,727
|
|
|
2,973
|
|
||||
Capitalized interest
|
(3,123
|
)
|
|
(757
|
)
|
|
(7,924
|
)
|
|
(1,338
|
)
|
||||
Interest and debt expense
|
$
|
34,456
|
|
|
$
|
26,896
|
|
|
$
|
88,065
|
|
|
$
|
79,169
|
|
|
Western Shareholders' Equity
|
|
Non-controlling Interest
|
|
Total Equity
|
||||||
|
(In thousands)
|
||||||||||
Balance at December 31, 2015
|
$
|
1,299,297
|
|
|
$
|
1,646,609
|
|
|
$
|
2,945,906
|
|
Net income
|
134,528
|
|
|
52,229
|
|
|
186,757
|
|
|||
Other comprehensive loss, net of tax
|
(52
|
)
|
|
(70
|
)
|
|
(122
|
)
|
|||
Dividends
|
(111,555
|
)
|
|
—
|
|
|
(111,555
|
)
|
|||
Stock-based compensation
|
6,264
|
|
|
5,203
|
|
|
11,467
|
|
|||
Tax deficiency from stock-based compensation
|
(434
|
)
|
|
—
|
|
|
(434
|
)
|
|||
Distributions to non-controlling interests
|
—
|
|
|
(49,906
|
)
|
|
(49,906
|
)
|
|||
NTI merger
|
(14,020
|
)
|
|
(1,329,348
|
)
|
|
(1,343,368
|
)
|
|||
Transaction costs for NTI merger
|
(11,741
|
)
|
|
—
|
|
|
(11,741
|
)
|
|||
Issuance of WNRL common units
|
—
|
|
|
277,751
|
|
|
277,751
|
|
|||
Offering costs for issuance of WNRL common units
|
—
|
|
|
(477
|
)
|
|
(477
|
)
|
|||
Treasury stock issuance
|
438,168
|
|
|
—
|
|
|
438,168
|
|
|||
Treasury stock purchases
|
(75,000
|
)
|
|
—
|
|
|
(75,000
|
)
|
|||
Balance at September 30, 2016
|
$
|
1,665,455
|
|
|
$
|
601,991
|
|
|
$
|
2,267,446
|
|
|
Western Shareholders' Equity
|
|
Non-controlling Interest
|
|
Total Equity
|
||||||
|
(In thousands)
|
||||||||||
Balance at December 31, 2014
|
$
|
1,119,708
|
|
|
$
|
1,667,936
|
|
|
$
|
2,787,644
|
|
Net income
|
393,211
|
|
|
213,722
|
|
|
606,933
|
|
|||
Other comprehensive income, net of tax
|
65
|
|
|
66
|
|
|
131
|
|
|||
Dividends
|
(93,612
|
)
|
|
—
|
|
|
(93,612
|
)
|
|||
Stock-based compensation
|
3,216
|
|
|
8,814
|
|
|
12,030
|
|
|||
Excess tax benefit from stock-based compensation
|
879
|
|
|
—
|
|
|
879
|
|
|||
Distributions to non-controlling interests
|
—
|
|
|
(176,289
|
)
|
|
(176,289
|
)
|
|||
Treasury stock purchases
|
(105,000
|
)
|
|
—
|
|
|
(105,000
|
)
|
|||
Other
|
—
|
|
|
(221
|
)
|
|
(221
|
)
|
|||
Balance at September 30, 2015
|
$
|
1,318,467
|
|
|
$
|
1,714,028
|
|
|
$
|
3,032,495
|
|
|
Number of shares purchased
|
|
Cost of share purchases
(In thousands)
|
|||
Shares purchased at December 31, 2015
|
—
|
|
|
$
|
—
|
|
Shares purchased during Q1, 2016
|
2,462,350
|
|
|
75,000
|
|
|
Shares purchased at March 31, 2016
|
2,462,350
|
|
|
75,000
|
|
|
Shares purchased during Q2, 2016
|
—
|
|
|
—
|
|
|
Shares purchased at June 30, 2016
|
2,462,350
|
|
|
75,000
|
|
|
Shares purchased during Q3, 2016
|
—
|
|
|
—
|
|
|
Shares purchased at September 30, 2016
|
2,462,350
|
|
|
$
|
75,000
|
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Dividend per Common Share
|
|
Total Payment
(In thousands)
|
||||
First quarter
|
January 6
|
|
January 20
|
|
February 4
|
|
$
|
0.38
|
|
|
$
|
35,601
|
|
Second quarter
|
April 8
|
|
April 18
|
|
May 2
|
|
0.38
|
|
|
34,685
|
|
||
Third quarter
|
July 15
|
|
July 25
|
|
August 9
|
|
0.38
|
|
|
41,202
|
|
||
Fourth quarter (1)
|
October 13
|
|
October 24
|
|
November 8
|
|
0.38
|
|
|
—
|
|
||
Total
|
|
|
|
|
|
|
|
|
$
|
111,488
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Distribution per Unit
|
||
February 3, 2016
|
|
February 12, 2016
|
|
February 19, 2016
|
|
$
|
0.38
|
|
June 13, 2016
|
|
June 23, 2016
|
|
June 23, 2016
|
|
0.18
|
|
|
Total
|
|
$
|
0.56
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Distribution per Common and Subordinated Unit
|
||
February 1, 2016
|
|
February 11, 2016
|
|
February 26, 2016
|
|
$
|
0.3925
|
|
April 25, 2016
|
|
May 13, 2016
|
|
May 27, 2016
|
|
0.4025
|
|
|
July 26, 2016
|
|
August 12, 2016
|
|
August 26, 2016
|
|
0.4125
|
|
|
October 24, 2016
|
|
November 7, 2016
|
|
November 23, 2016
|
|
0.4225
|
|
|
Total
|
|
$
|
1.6300
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
Beginning of period balance
|
$
|
599
|
|
|
$
|
(1,234
|
)
|
|
$
|
651
|
|
|
$
|
(1,291
|
)
|
Amortization of net prior service cost
|
—
|
|
|
—
|
|
|
(63
|
)
|
|
41
|
|
||||
Reclassification of loss to income
|
—
|
|
|
13
|
|
|
11
|
|
|
38
|
|
||||
Income tax
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(14
|
)
|
||||
End of period balance
|
$
|
599
|
|
|
$
|
(1,226
|
)
|
|
$
|
599
|
|
|
$
|
(1,226
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
Economic hedging results
|
|
|
|
|
|
|
|
||||||||
Realized hedging gain, net
|
$
|
27,757
|
|
|
$
|
26,949
|
|
|
$
|
46,110
|
|
|
$
|
52,325
|
|
Unrealized hedging gain (loss), net
|
(27,616
|
)
|
|
271
|
|
|
(54,698
|
)
|
|
(42,073
|
)
|
||||
Total hedging gain (loss), net
|
$
|
141
|
|
|
$
|
27,220
|
|
|
$
|
(8,588
|
)
|
|
$
|
10,252
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
|
(In thousands)
|
||||||
Open commodity hedging instruments (barrels)
|
|
|
|
||||
Crude oil differential swaps, net long positions
|
5,622
|
|
|
5,155
|
|
||
Crude oil futures, net short positions
|
(687
|
)
|
|
(562
|
)
|
||
Refined product price and crack spread swaps, net short positions
|
(3,902
|
)
|
|
(5,645
|
)
|
||
Total open commodity hedging instruments, net long (short) positions
|
1,033
|
|
|
(1,052
|
)
|
||
|
|
|
|
||||
Fair value of outstanding contracts, net
|
|
|
|
||||
Other current assets
|
$
|
26,757
|
|
|
$
|
78,125
|
|
Other assets
|
2,851
|
|
|
11,881
|
|
||
Accrued liabilities
|
(4,457
|
)
|
|
(10,273
|
)
|
||
Other long-term liabilities
|
(153
|
)
|
|
—
|
|
||
Fair value of outstanding contracts - unrealized gain, net
|
$
|
24,998
|
|
|
$
|
79,733
|
|
|
Gross Amounts of Recognized Assets (Liabilities)
|
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheet
|
|
Net Amounts of Assets (Liabilities) Presented in the Condensed Consolidated Balance Sheet
|
||||||
As of September 30, 2016
|
|
|
|||||||||
|
(In thousands)
|
||||||||||
Financial assets:
|
|
|
|
|
|
||||||
Current assets
|
$
|
34,060
|
|
|
$
|
(7,303
|
)
|
|
$
|
26,757
|
|
Other assets
|
4,455
|
|
|
(1,604
|
)
|
|
2,851
|
|
|||
Financial liabilities:
|
|
|
|
|
|
||||||
Accrued liabilities
|
(10,449
|
)
|
|
5,992
|
|
|
(4,457
|
)
|
|||
Other long-term liabilities
|
(3,068
|
)
|
|
2,915
|
|
|
(153
|
)
|
|||
|
$
|
24,998
|
|
|
$
|
—
|
|
|
$
|
24,998
|
|
|
Gross Amounts of Recognized Assets (Liabilities)
|
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheet
|
|
Net Amounts of Assets (Liabilities) Presented in the Condensed Consolidated Balance Sheet
|
||||||
As of December 31, 2015
|
|
|
|||||||||
|
(In thousands)
|
||||||||||
Financial assets:
|
|
|
|
|
|
||||||
Current assets
|
$
|
95,062
|
|
|
$
|
(16,937
|
)
|
|
$
|
78,125
|
|
Other assets
|
11,881
|
|
|
—
|
|
|
11,881
|
|
|||
Financial liabilities:
|
|
|
|
|
|
||||||
Accrued liabilities
|
(21,454
|
)
|
|
11,181
|
|
|
(10,273
|
)
|
|||
Other long-term liabilities
|
(5,756
|
)
|
|
5,756
|
|
|
—
|
|
|||
|
$
|
79,733
|
|
|
$
|
—
|
|
|
$
|
79,733
|
|
|
Notional Contract Volumes by Year of Maturity
|
||||
|
2016
|
|
2017
|
||
Inventory positions (futures and swaps):
|
|
|
|
||
Crude oil differential swaps, net long positions
|
3,042
|
|
|
2,580
|
|
Crude oil futures, net short positions
|
(687
|
)
|
|
—
|
|
Distillate - net short positions
|
(137
|
)
|
|
—
|
|
Refined products - net short positions
|
(315
|
)
|
|
(875
|
)
|
Natural gas futures - net long positions
|
151
|
|
|
329
|
|
Refined product positions (crack spread swaps):
|
|
|
|
||
Distillate - net short positions
|
(850
|
)
|
|
(1,680
|
)
|
Unleaded gasoline - net short positions
|
(525
|
)
|
|
—
|
|
|
Number
of Units
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Not vested at December 31, 2015
|
399,214
|
|
|
$
|
37.43
|
|
Awards granted
|
375,774
|
|
|
28.52
|
|
|
Awards vested
|
(109,634
|
)
|
|
37.63
|
|
|
Awards forfeited
|
(6,848
|
)
|
|
43.81
|
|
|
Not vested at September 30, 2016
|
658,506
|
|
|
32.25
|
|
|
Number of Phantom Stock
|
|
Weighted Average
Grant Date Fair Value |
|||
Not vested at December 31, 2015
|
—
|
|
|
$
|
—
|
|
Awards granted
|
848,267
|
|
|
20.25
|
|
|
Awards vested
|
(13,817
|
)
|
|
20.25
|
|
|
Awards forfeited
|
(12,132
|
)
|
|
20.25
|
|
|
Not vested at September 30, 2016
|
822,318
|
|
|
20.25
|
|
|
Number of Phantom Units
|
|
Weighted Average
Grant Date Fair Value |
|||
Not vested at December 31, 2015
|
279,787
|
|
|
$
|
28.06
|
|
Awards granted
|
101,955
|
|
|
22.69
|
|
|
Awards vested
|
(86,406
|
)
|
|
25.80
|
|
|
Awards forfeited
|
(10,181
|
)
|
|
31.87
|
|
|
Not vested at September 30, 2016
|
285,155
|
|
|
26.42
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands, except per share data)
|
||||||||||||||
Basic earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Allocation of earnings:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Western Refining, Inc.
|
$
|
38,575
|
|
|
$
|
153,303
|
|
|
$
|
134,528
|
|
|
$
|
393,211
|
|
Distributed earnings
|
(41,269
|
)
|
|
(32,498
|
)
|
|
(111,555
|
)
|
|
(93,612
|
)
|
||||
Undistributed income (loss) attributable to Western Refining, Inc.
|
$
|
(2,694
|
)
|
|
$
|
120,805
|
|
|
$
|
22,973
|
|
|
$
|
299,599
|
|
Weighted-average number of common shares outstanding
|
108,424
|
|
|
94,826
|
|
|
97,802
|
|
|
95,308
|
|
||||
Basic earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Distributed earnings per share
|
$
|
0.38
|
|
|
$
|
0.34
|
|
|
$
|
1.14
|
|
|
$
|
0.98
|
|
Undistributed earnings (loss) per share
|
(0.02
|
)
|
|
1.27
|
|
|
0.23
|
|
|
3.14
|
|
||||
Basic earnings per common share
|
$
|
0.36
|
|
|
$
|
1.61
|
|
|
$
|
1.37
|
|
|
$
|
4.12
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Western Refining, Inc.
|
$
|
38,575
|
|
|
$
|
153,303
|
|
|
$
|
134,528
|
|
|
$
|
393,211
|
|
Weighted-average diluted common shares outstanding
|
108,734
|
|
|
94,924
|
|
|
98,110
|
|
|
95,408
|
|
||||
Diluted earnings per common share
|
$
|
0.35
|
|
|
$
|
1.61
|
|
|
$
|
1.37
|
|
|
$
|
4.12
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||||||
Weighted-average number of common shares outstanding
|
108,424
|
|
|
94,826
|
|
|
97,802
|
|
|
95,308
|
|
Restricted share units and phantom stock
|
310
|
|
|
98
|
|
|
308
|
|
|
100
|
|
Weighted-average number of diluted shares outstanding
|
108,734
|
|
|
94,924
|
|
|
98,110
|
|
|
95,408
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Non-cash operating activities were as follows:
|
|
|
|
||||
Income taxes paid
|
$
|
40,562
|
|
|
$
|
210,656
|
|
Interest paid, excluding amounts capitalized
|
83,156
|
|
|
62,216
|
|
||
Non-cash investing activities were as follows:
|
|
|
|
||||
Assets acquired through capital lease obligations
|
$
|
4,644
|
|
|
$
|
24,578
|
|
Accrued capital expenditures
|
33,111
|
|
|
31,744
|
|
||
PP&E derecognized from sale leaseback continuing involvement release
|
2,799
|
|
|
1,773
|
|
||
Transfer of capital spares from fixed asset to inventory
|
—
|
|
|
1,490
|
|
||
Transfer of capital spares from fixed assets to other assets
|
699
|
|
|
—
|
|
||
Transfer of capital spares from other assets to fixed assets
|
161
|
|
|
—
|
|
||
Non-cash financing activities were as follows:
|
|
|
|
||||
Reduction of long-term debt proceeds from original issuance discount
|
$
|
10,250
|
|
|
$
|
—
|
|
Treasury stock issuance
|
438,168
|
|
|
—
|
|
||
Distributions accrued on unvested equity awards
|
—
|
|
|
2,602
|
|
||
Distributions receivable from equity method investee
|
—
|
|
|
4,250
|
|
||
Accrued offering costs for issuance of WNRL common units
|
60
|
|
|
—
|
|
|
Operating
|
|
Capital
|
||||
Remaining 2016
|
$
|
14,021
|
|
|
$
|
1,380
|
|
2017
|
54,078
|
|
|
5,419
|
|
||
2018
|
50,739
|
|
|
5,444
|
|
||
2019
|
45,648
|
|
|
5,553
|
|
||
2020
|
41,467
|
|
|
5,744
|
|
||
2021 and thereafter
|
346,889
|
|
|
73,027
|
|
||
Total minimum lease payments
|
$
|
552,842
|
|
|
96,567
|
|
|
Less amount that represents interest
|
|
|
40,951
|
|
|||
Present value of net minimum capital lease payments
|
|
|
$
|
55,616
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
21
|
|
|
$
|
234,970
|
|
|
$
|
31,105
|
|
|
$
|
—
|
|
|
$
|
266,096
|
|
Restricted cash
|
—
|
|
|
—
|
|
|
195,000
|
|
|
—
|
|
|
195,000
|
|
|||||
Accounts receivable, trade, net of a reserve for doubtful accounts
|
—
|
|
|
137,775
|
|
|
309,552
|
|
|
—
|
|
|
447,327
|
|
|||||
Accounts receivable, affiliate
|
15,778
|
|
|
71,656
|
|
|
3,378
|
|
|
(90,812
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
380,161
|
|
|
280,577
|
|
|
—
|
|
|
660,738
|
|
|||||
Prepaid expenses
|
—
|
|
|
104,195
|
|
|
24,943
|
|
|
—
|
|
|
129,138
|
|
|||||
Other current assets
|
—
|
|
|
83,042
|
|
|
38,539
|
|
|
—
|
|
|
121,581
|
|
|||||
Total current assets
|
15,799
|
|
|
1,011,799
|
|
|
883,094
|
|
|
(90,812
|
)
|
|
1,819,880
|
|
|||||
Equity method investment
|
—
|
|
|
—
|
|
|
98,185
|
|
|
—
|
|
|
98,185
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
1,114,593
|
|
|
1,242,698
|
|
|
—
|
|
|
2,357,291
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
1,289,443
|
|
|
—
|
|
|
1,289,443
|
|
|||||
Intangible assets, net
|
—
|
|
|
31,947
|
|
|
52,596
|
|
|
—
|
|
|
84,543
|
|
|||||
Investment in subsidiaries
|
5,462,120
|
|
|
—
|
|
|
—
|
|
|
(5,462,120
|
)
|
|
—
|
|
|||||
Due from affiliate
|
—
|
|
|
2,460,977
|
|
|
—
|
|
|
(2,460,977
|
)
|
|
—
|
|
|||||
Other assets, net
|
—
|
|
|
32,195
|
|
|
33,588
|
|
|
—
|
|
|
65,783
|
|
|||||
Total assets
|
$
|
5,477,919
|
|
|
$
|
4,651,511
|
|
|
$
|
3,599,604
|
|
|
$
|
(8,013,909
|
)
|
|
$
|
5,715,125
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable, trade
|
$
|
—
|
|
|
$
|
306,033
|
|
|
$
|
328,683
|
|
|
$
|
—
|
|
|
$
|
634,716
|
|
Accounts payable, affiliate
|
—
|
|
|
—
|
|
|
90,812
|
|
|
(90,812
|
)
|
|
—
|
|
|||||
Accrued liabilities
|
10,960
|
|
|
107,907
|
|
|
97,302
|
|
|
—
|
|
|
216,169
|
|
|||||
Current portion of long-term debt
|
10,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,500
|
|
|||||
Total current liabilities
|
21,460
|
|
|
413,940
|
|
|
516,797
|
|
|
(90,812
|
)
|
|
861,385
|
|
|||||
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, less current portion
|
1,330,027
|
|
|
—
|
|
|
715,153
|
|
|
—
|
|
|
2,045,180
|
|
|||||
Due to affiliate
|
2,460,977
|
|
|
—
|
|
|
—
|
|
|
(2,460,977
|
)
|
|
—
|
|
|||||
Lease financing obligations
|
—
|
|
|
45,333
|
|
|
9,208
|
|
|
—
|
|
|
54,541
|
|
|||||
Deferred income tax liability, net
|
—
|
|
|
380,508
|
|
|
36,443
|
|
|
—
|
|
|
416,951
|
|
|||||
Deficit in subsidiaries
|
—
|
|
|
497,548
|
|
|
—
|
|
|
(497,548
|
)
|
|
—
|
|
|||||
Other liabilities
|
—
|
|
|
59,349
|
|
|
10,273
|
|
|
—
|
|
|
69,622
|
|
|||||
Total long-term liabilities
|
3,791,004
|
|
|
982,738
|
|
|
771,077
|
|
|
(2,958,525
|
)
|
|
2,586,294
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity - Western
|
1,665,455
|
|
|
3,254,833
|
|
|
1,709,739
|
|
|
(4,964,572
|
)
|
|
1,665,455
|
|
|||||
Equity - Non-controlling interests
|
—
|
|
|
—
|
|
|
601,991
|
|
|
—
|
|
|
601,991
|
|
|||||
Total equity
|
1,665,455
|
|
|
3,254,833
|
|
|
2,311,730
|
|
|
(4,964,572
|
)
|
|
2,267,446
|
|
|||||
Total liabilities and equity
|
$
|
5,477,919
|
|
|
$
|
4,651,511
|
|
|
$
|
3,599,604
|
|
|
$
|
(8,013,909
|
)
|
|
$
|
5,715,125
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
21
|
|
|
$
|
656,966
|
|
|
$
|
115,515
|
|
|
$
|
—
|
|
|
$
|
772,502
|
|
Accounts receivable, trade, net of a reserve for doubtful accounts
|
—
|
|
|
122,593
|
|
|
236,644
|
|
|
—
|
|
|
359,237
|
|
|||||
Accounts receivable, affiliate
|
—
|
|
|
55,550
|
|
|
3,505
|
|
|
(59,055
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
311,589
|
|
|
235,949
|
|
|
—
|
|
|
547,538
|
|
|||||
Prepaid expenses
|
—
|
|
|
55,699
|
|
|
17,514
|
|
|
—
|
|
|
73,213
|
|
|||||
Other current assets
|
—
|
|
|
135,139
|
|
|
34,589
|
|
|
—
|
|
|
169,728
|
|
|||||
Total current assets
|
21
|
|
|
1,337,536
|
|
|
643,716
|
|
|
(59,055
|
)
|
|
1,922,218
|
|
|||||
Restricted cash
|
—
|
|
|
69,106
|
|
|
—
|
|
|
—
|
|
|
69,106
|
|
|||||
Equity method investment
|
—
|
|
|
—
|
|
|
97,513
|
|
|
—
|
|
|
97,513
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
1,099,787
|
|
|
1,205,384
|
|
|
—
|
|
|
2,305,171
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
1,289,443
|
|
|
—
|
|
|
1,289,443
|
|
|||||
Intangible assets, net
|
—
|
|
|
31,401
|
|
|
53,544
|
|
|
—
|
|
|
84,945
|
|
|||||
Investment in subsidiaries
|
3,791,084
|
|
|
—
|
|
|
—
|
|
|
(3,791,084
|
)
|
|
—
|
|
|||||
Due from affiliate
|
—
|
|
|
1,623,553
|
|
|
—
|
|
|
(1,623,553
|
)
|
|
—
|
|
|||||
Other assets, net
|
—
|
|
|
42,166
|
|
|
22,831
|
|
|
—
|
|
|
64,997
|
|
|||||
Total assets
|
$
|
3,791,105
|
|
|
$
|
4,203,549
|
|
|
$
|
3,312,431
|
|
|
$
|
(5,473,692
|
)
|
|
$
|
5,833,393
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable, trade
|
$
|
—
|
|
|
$
|
262,550
|
|
|
$
|
291,407
|
|
|
$
|
—
|
|
|
$
|
553,957
|
|
Accounts payable, affiliate
|
920
|
|
|
—
|
|
|
58,135
|
|
|
(59,055
|
)
|
|
—
|
|
|||||
Accrued liabilities
|
5,508
|
|
|
142,257
|
|
|
100,630
|
|
|
—
|
|
|
248,395
|
|
|||||
Current portion of long-term debt
|
5,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,500
|
|
|||||
Total current liabilities
|
11,928
|
|
|
404,807
|
|
|
450,172
|
|
|
(59,055
|
)
|
|
807,852
|
|
|||||
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, less current portion
|
856,327
|
|
|
—
|
|
|
788,567
|
|
|
—
|
|
|
1,644,894
|
|
|||||
Due to affiliate
|
1,623,553
|
|
|
—
|
|
|
—
|
|
|
(1,623,553
|
)
|
|
—
|
|
|||||
Lease financing obligations
|
—
|
|
|
42,168
|
|
|
11,064
|
|
|
—
|
|
|
53,232
|
|
|||||
Deferred income tax liability, net
|
—
|
|
|
275,634
|
|
|
37,280
|
|
|
—
|
|
|
312,914
|
|
|||||
Deficit in subsidiaries
|
—
|
|
|
287,761
|
|
|
—
|
|
|
(287,761
|
)
|
|
—
|
|
|||||
Other liabilities
|
—
|
|
|
63,674
|
|
|
4,921
|
|
|
—
|
|
|
68,595
|
|
|||||
Total long-term liabilities
|
2,479,880
|
|
|
669,237
|
|
|
841,832
|
|
|
(1,911,314
|
)
|
|
2,079,635
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity - Western
|
1,299,297
|
|
|
3,129,505
|
|
|
373,818
|
|
|
(3,503,323
|
)
|
|
1,299,297
|
|
|||||
Equity - Non-controlling interests
|
—
|
|
|
—
|
|
|
1,646,609
|
|
|
—
|
|
|
1,646,609
|
|
|||||
Total equity
|
1,299,297
|
|
|
3,129,505
|
|
|
2,020,427
|
|
|
(3,503,323
|
)
|
|
2,945,906
|
|
|||||
Total liabilities and equity
|
$
|
3,791,105
|
|
|
$
|
4,203,549
|
|
|
$
|
3,312,431
|
|
|
$
|
(5,473,692
|
)
|
|
$
|
5,833,393
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,970,512
|
|
|
$
|
1,637,091
|
|
|
$
|
(1,542,527
|
)
|
|
$
|
2,065,076
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of products sold (exclusive of depreciation and amortization)
|
—
|
|
|
1,733,544
|
|
|
1,415,993
|
|
|
(1,542,527
|
)
|
|
1,607,010
|
|
|||||
Direct operating expenses (exclusive of depreciation and amortization)
|
—
|
|
|
113,416
|
|
|
119,137
|
|
|
—
|
|
|
232,553
|
|
|||||
Selling, general and administrative expenses
|
46
|
|
|
29,887
|
|
|
27,387
|
|
|
—
|
|
|
57,320
|
|
|||||
Gain on disposal of assets, net
|
—
|
|
|
(217
|
)
|
|
(62
|
)
|
|
—
|
|
|
(279
|
)
|
|||||
Maintenance turnaround expense
|
—
|
|
|
366
|
|
|
26,842
|
|
|
—
|
|
|
27,208
|
|
|||||
Depreciation and amortization
|
—
|
|
|
27,286
|
|
|
27,035
|
|
|
—
|
|
|
54,321
|
|
|||||
Total operating costs and expenses
|
46
|
|
|
1,904,282
|
|
|
1,616,332
|
|
|
(1,542,527
|
)
|
|
1,978,133
|
|
|||||
Operating income (loss)
|
(46
|
)
|
|
66,230
|
|
|
20,759
|
|
|
—
|
|
|
86,943
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
61,069
|
|
|
1,125
|
|
|
—
|
|
|
(62,194
|
)
|
|
—
|
|
|||||
Interest income
|
—
|
|
|
100
|
|
|
41
|
|
|
—
|
|
|
141
|
|
|||||
Interest and debt expense
|
(22,448
|
)
|
|
(788
|
)
|
|
(11,220
|
)
|
|
—
|
|
|
(34,456
|
)
|
|||||
Other, net
|
—
|
|
|
(1,301
|
)
|
|
4,681
|
|
|
—
|
|
|
3,380
|
|
|||||
Income (loss) before income taxes
|
38,575
|
|
|
65,366
|
|
|
14,261
|
|
|
(62,194
|
)
|
|
56,008
|
|
|||||
Provision for income taxes
|
—
|
|
|
(11,418
|
)
|
|
(282
|
)
|
|
—
|
|
|
(11,700
|
)
|
|||||
Net income (loss)
|
38,575
|
|
|
53,948
|
|
|
13,979
|
|
|
(62,194
|
)
|
|
44,308
|
|
|||||
Less net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
5,733
|
|
|
—
|
|
|
5,733
|
|
|||||
Net income (loss) attributable to Western Refining, Inc.
|
$
|
38,575
|
|
|
$
|
53,948
|
|
|
$
|
8,246
|
|
|
$
|
(62,194
|
)
|
|
$
|
38,575
|
|
Comprehensive income attributable to Western Refining, Inc.
|
$
|
38,575
|
|
|
$
|
53,948
|
|
|
$
|
8,246
|
|
|
$
|
(62,194
|
)
|
|
$
|
38,575
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
4,466,234
|
|
|
$
|
3,881,556
|
|
|
$
|
(2,719,902
|
)
|
|
$
|
5,627,888
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of products sold (exclusive of depreciation and amortization)
|
—
|
|
|
3,780,557
|
|
|
3,196,344
|
|
|
(2,719,902
|
)
|
|
4,256,999
|
|
|||||
Direct operating expenses (exclusive of depreciation and amortization)
|
—
|
|
|
333,556
|
|
|
353,751
|
|
|
—
|
|
|
687,307
|
|
|||||
Selling, general and administrative expenses
|
139
|
|
|
82,283
|
|
|
84,235
|
|
|
—
|
|
|
166,657
|
|
|||||
Gain on disposal of assets, net
|
—
|
|
|
(208
|
)
|
|
(973
|
)
|
|
—
|
|
|
(1,181
|
)
|
|||||
Maintenance turnaround expense
|
—
|
|
|
891
|
|
|
26,842
|
|
|
—
|
|
|
27,733
|
|
|||||
Depreciation and amortization
|
—
|
|
|
79,620
|
|
|
81,711
|
|
|
—
|
|
|
161,331
|
|
|||||
Total operating costs and expenses
|
139
|
|
|
4,276,699
|
|
|
3,741,910
|
|
|
(2,719,902
|
)
|
|
5,298,846
|
|
|||||
Operating income (loss)
|
(139
|
)
|
|
189,535
|
|
|
139,646
|
|
|
—
|
|
|
329,042
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
184,428
|
|
|
5,689
|
|
|
—
|
|
|
(190,117
|
)
|
|
—
|
|
|||||
Interest income
|
—
|
|
|
317
|
|
|
119
|
|
|
—
|
|
|
436
|
|
|||||
Interest and debt expense
|
(49,761
|
)
|
|
(2,284
|
)
|
|
(36,020
|
)
|
|
—
|
|
|
(88,065
|
)
|
|||||
Other, net
|
—
|
|
|
(208
|
)
|
|
14,033
|
|
|
—
|
|
|
13,825
|
|
|||||
Income (loss) before income taxes
|
134,528
|
|
|
193,049
|
|
|
117,778
|
|
|
(190,117
|
)
|
|
255,238
|
|
|||||
Provision for income taxes
|
—
|
|
|
(67,721
|
)
|
|
(760
|
)
|
|
—
|
|
|
(68,481
|
)
|
|||||
Net income (loss)
|
134,528
|
|
|
125,328
|
|
|
117,018
|
|
|
(190,117
|
)
|
|
186,757
|
|
|||||
Less net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
52,229
|
|
|
—
|
|
|
52,229
|
|
|||||
Net income (loss) attributable to Western Refining, Inc.
|
$
|
134,528
|
|
|
$
|
125,328
|
|
|
$
|
64,789
|
|
|
$
|
(190,117
|
)
|
|
$
|
134,528
|
|
Comprehensive income attributable to Western Refining, Inc.
|
$
|
134,528
|
|
|
$
|
125,328
|
|
|
$
|
64,737
|
|
|
$
|
(190,117
|
)
|
|
$
|
134,476
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
1,846,297
|
|
|
$
|
1,478,695
|
|
|
$
|
(755,902
|
)
|
|
$
|
2,569,090
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of products sold (exclusive of depreciation and amortization)
|
—
|
|
|
1,476,431
|
|
|
1,175,243
|
|
|
(755,902
|
)
|
|
1,895,772
|
|
|||||
Direct operating expenses (exclusive of depreciation and amortization)
|
—
|
|
|
111,871
|
|
|
122,569
|
|
|
—
|
|
|
234,440
|
|
|||||
Selling, general and administrative expenses
|
48
|
|
|
28,061
|
|
|
26,356
|
|
|
—
|
|
|
54,465
|
|
|||||
Gain on disposal of assets, net
|
—
|
|
|
(6
|
)
|
|
(46
|
)
|
|
—
|
|
|
(52
|
)
|
|||||
Maintenance turnaround expense
|
—
|
|
|
490
|
|
|
—
|
|
|
—
|
|
|
490
|
|
|||||
Depreciation and amortization
|
—
|
|
|
24,830
|
|
|
26,547
|
|
|
—
|
|
|
51,377
|
|
|||||
Total operating costs and expenses
|
48
|
|
|
1,641,677
|
|
|
1,350,669
|
|
|
(755,902
|
)
|
|
2,236,492
|
|
|||||
Operating income (loss)
|
(48
|
)
|
|
204,620
|
|
|
128,026
|
|
|
—
|
|
|
332,598
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
166,608
|
|
|
6,647
|
|
|
—
|
|
|
(173,255
|
)
|
|
—
|
|
|||||
Interest income
|
—
|
|
|
106
|
|
|
80
|
|
|
—
|
|
|
186
|
|
|||||
Interest and debt expense
|
(13,257
|
)
|
|
(703
|
)
|
|
(12,936
|
)
|
|
—
|
|
|
(26,896
|
)
|
|||||
Other, net
|
—
|
|
|
(6
|
)
|
|
4,333
|
|
|
—
|
|
|
4,327
|
|
|||||
Income (loss) before income taxes
|
153,303
|
|
|
210,664
|
|
|
119,503
|
|
|
(173,255
|
)
|
|
310,215
|
|
|||||
Provision for income taxes
|
—
|
|
|
(92,114
|
)
|
|
(3
|
)
|
|
—
|
|
|
(92,117
|
)
|
|||||
Net income (loss)
|
153,303
|
|
|
118,550
|
|
|
119,500
|
|
|
(173,255
|
)
|
|
218,098
|
|
|||||
Less net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
64,795
|
|
|
—
|
|
|
64,795
|
|
|||||
Net income (loss) attributable to Western Refining, Inc.
|
$
|
153,303
|
|
|
$
|
118,550
|
|
|
$
|
54,705
|
|
|
$
|
(173,255
|
)
|
|
$
|
153,303
|
|
Comprehensive income attributable to Western Refining, Inc.
|
$
|
153,303
|
|
|
$
|
118,558
|
|
|
$
|
54,705
|
|
|
$
|
(173,255
|
)
|
|
$
|
153,311
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
5,611,815
|
|
|
$
|
4,372,591
|
|
|
$
|
(2,267,694
|
)
|
|
$
|
7,716,712
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of products sold (exclusive of depreciation and amortization)
|
—
|
|
|
4,612,431
|
|
|
3,470,232
|
|
|
(2,267,694
|
)
|
|
5,814,969
|
|
|||||
Direct operating expenses (exclusive of depreciation and amortization)
|
—
|
|
|
331,423
|
|
|
343,051
|
|
|
—
|
|
|
674,474
|
|
|||||
Selling, general and administrative expenses
|
142
|
|
|
87,486
|
|
|
82,180
|
|
|
—
|
|
|
169,808
|
|
|||||
Loss (gain) on disposal of assets, net
|
—
|
|
|
444
|
|
|
(601
|
)
|
|
—
|
|
|
(157
|
)
|
|||||
Maintenance turnaround expense
|
—
|
|
|
1,188
|
|
|
—
|
|
|
—
|
|
|
1,188
|
|
|||||
Depreciation and amortization
|
—
|
|
|
74,457
|
|
|
77,989
|
|
|
—
|
|
|
152,446
|
|
|||||
Total operating costs and expenses
|
142
|
|
|
5,107,429
|
|
|
3,972,851
|
|
|
(2,267,694
|
)
|
|
6,812,728
|
|
|||||
Operating income (loss)
|
(142
|
)
|
|
504,386
|
|
|
399,740
|
|
|
—
|
|
|
903,984
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
433,921
|
|
|
8,576
|
|
|
—
|
|
|
(442,497
|
)
|
|
—
|
|
|||||
Interest income
|
—
|
|
|
308
|
|
|
242
|
|
|
—
|
|
|
550
|
|
|||||
Interest and debt expense
|
(40,568
|
)
|
|
(1,943
|
)
|
|
(36,658
|
)
|
|
—
|
|
|
(79,169
|
)
|
|||||
Other, net
|
—
|
|
|
(519
|
)
|
|
12,076
|
|
|
—
|
|
|
11,557
|
|
|||||
Income (loss) before income taxes
|
393,211
|
|
|
510,808
|
|
|
375,400
|
|
|
(442,497
|
)
|
|
836,922
|
|
|||||
Provision for income taxes
|
—
|
|
|
(229,635
|
)
|
|
(354
|
)
|
|
—
|
|
|
(229,989
|
)
|
|||||
Net income (loss)
|
393,211
|
|
|
281,173
|
|
|
375,046
|
|
|
(442,497
|
)
|
|
606,933
|
|
|||||
Less net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
213,722
|
|
|
—
|
|
|
213,722
|
|
|||||
Net income (loss) attributable to Western Refining, Inc.
|
$
|
393,211
|
|
|
$
|
281,173
|
|
|
$
|
161,324
|
|
|
$
|
(442,497
|
)
|
|
$
|
393,211
|
|
Comprehensive income attributable to Western Refining, Inc.
|
$
|
393,211
|
|
|
$
|
281,197
|
|
|
$
|
161,365
|
|
|
$
|
(442,497
|
)
|
|
$
|
393,276
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
(42,552
|
)
|
|
$
|
226,792
|
|
|
$
|
141,120
|
|
|
$
|
(47,483
|
)
|
|
$
|
277,877
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
(113,533
|
)
|
|
(121,804
|
)
|
|
240
|
|
|
(235,097
|
)
|
|||||
Return of capital from equity method investment
|
13,537
|
|
|
—
|
|
|
—
|
|
|
(13,537
|
)
|
|
—
|
|
|||||
Increase in restricted cash
|
—
|
|
|
—
|
|
|
(195,000
|
)
|
|
—
|
|
|
(195,000
|
)
|
|||||
Use of restricted cash
|
—
|
|
|
69,106
|
|
|
—
|
|
|
—
|
|
|
69,106
|
|
|||||
Contributions to affiliate
|
—
|
|
|
(603,987
|
)
|
|
(20,286
|
)
|
|
624,273
|
|
|
—
|
|
|||||
Proceeds from the sale of assets
|
—
|
|
|
348
|
|
|
3,804
|
|
|
(240
|
)
|
|
3,912
|
|
|||||
Net cash provided by (used in) investing activities
|
13,537
|
|
|
(648,066
|
)
|
|
(333,286
|
)
|
|
610,736
|
|
|
(357,079
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to long-term debt
|
500,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500,000
|
|
|||||
Payments on long-term debt and capital lease obligations
|
(5,375
|
)
|
|
(748
|
)
|
|
(1,027
|
)
|
|
—
|
|
|
(7,150
|
)
|
|||||
Borrowings on revolving credit facility
|
—
|
|
|
—
|
|
|
393,900
|
|
|
—
|
|
|
393,900
|
|
|||||
Repayments on revolving credit facility
|
—
|
|
|
—
|
|
|
(466,600
|
)
|
|
—
|
|
|
(466,600
|
)
|
|||||
Payments for NTI units related to merger
|
(859,893
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(859,893
|
)
|
|||||
Transaction costs for NTI merger
|
(11,741
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,741
|
)
|
|||||
Proceeds from issuance of WNRL common units
|
—
|
|
|
—
|
|
|
277,751
|
|
|
—
|
|
|
277,751
|
|
|||||
Offering costs for issuance of WNRL common units
|
—
|
|
|
—
|
|
|
(417
|
)
|
|
—
|
|
|
(417
|
)
|
|||||
Deferred financing costs
|
(11,408
|
)
|
|
—
|
|
|
(1,002
|
)
|
|
—
|
|
|
(12,410
|
)
|
|||||
Distribution to affiliate
|
—
|
|
|
—
|
|
|
(61,020
|
)
|
|
61,020
|
|
|
—
|
|
|||||
Purchases of common stock for treasury
|
(75,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75,000
|
)
|
|||||
Distribution to non-controlling interest holders
|
—
|
|
|
—
|
|
|
(54,115
|
)
|
|
—
|
|
|
(54,115
|
)
|
|||||
Dividends paid
|
(111,555
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(111,555
|
)
|
|||||
Contributions from affiliates
|
603,987
|
|
|
—
|
|
|
20,286
|
|
|
(624,273
|
)
|
|
—
|
|
|||||
Distribution to Western Refining, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Excess tax benefit from stock-based compensation
|
—
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|||||
Net cash provided by (used in) financing activities
|
29,015
|
|
|
(722
|
)
|
|
107,756
|
|
|
(563,253
|
)
|
|
(427,204
|
)
|
|||||
Net decrease in cash and cash equivalents
|
—
|
|
|
(421,996
|
)
|
|
(84,410
|
)
|
|
—
|
|
|
(506,406
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
21
|
|
|
656,966
|
|
|
115,515
|
|
|
—
|
|
|
772,502
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
21
|
|
|
$
|
234,970
|
|
|
$
|
31,105
|
|
|
$
|
—
|
|
|
$
|
266,096
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
67,772
|
|
|
$
|
345,293
|
|
|
$
|
383,762
|
|
|
$
|
(131,163
|
)
|
|
$
|
665,664
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
(108,988
|
)
|
|
(88,545
|
)
|
|
1,557
|
|
|
(195,976
|
)
|
|||||
Use of restricted cash
|
—
|
|
|
154,681
|
|
|
—
|
|
|
—
|
|
|
154,681
|
|
|||||
Return of capital from equity method investment
|
—
|
|
|
—
|
|
|
5,780
|
|
|
—
|
|
|
5,780
|
|
|||||
Contributions to affiliate
|
—
|
|
|
(158,652
|
)
|
|
(18,457
|
)
|
|
177,109
|
|
|
—
|
|
|||||
Proceeds from the sale of assets
|
—
|
|
|
2,028
|
|
|
590
|
|
|
(1,557
|
)
|
|
1,061
|
|
|||||
Net cash provided by (used in) investing activities
|
—
|
|
|
(110,931
|
)
|
|
(100,632
|
)
|
|
177,109
|
|
|
(34,454
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to long-term debt
|
—
|
|
|
—
|
|
|
300,000
|
|
|
—
|
|
|
300,000
|
|
|||||
Payments on long-term debt and capital lease obligations
|
(4,125
|
)
|
|
(658
|
)
|
|
(776
|
)
|
|
—
|
|
|
(5,559
|
)
|
|||||
Repayments on revolving credit facility
|
—
|
|
|
—
|
|
|
(269,000
|
)
|
|
—
|
|
|
(269,000
|
)
|
|||||
Distribution to affiliate
|
—
|
|
|
—
|
|
|
(131,163
|
)
|
|
131,163
|
|
|
—
|
|
|||||
Deferred financing costs
|
—
|
|
|
—
|
|
|
(6,820
|
)
|
|
—
|
|
|
(6,820
|
)
|
|||||
Purchases of common stock for treasury
|
(105,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(105,000
|
)
|
|||||
Distribution to non-controlling interest holders
|
—
|
|
|
—
|
|
|
(173,687
|
)
|
|
—
|
|
|
(173,687
|
)
|
|||||
Dividends paid
|
(93,612
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93,612
|
)
|
|||||
Contributions from affiliates
|
134,965
|
|
|
—
|
|
|
42,144
|
|
|
(177,109
|
)
|
|
—
|
|
|||||
Excess tax benefit from stock-based compensation
|
—
|
|
|
879
|
|
|
—
|
|
|
—
|
|
|
879
|
|
|||||
Net cash provided by (used in) financing activities
|
(67,772
|
)
|
|
221
|
|
|
(239,302
|
)
|
|
(45,946
|
)
|
|
(352,799
|
)
|
|||||
Net increase in cash and cash equivalents
|
—
|
|
|
234,583
|
|
|
43,828
|
|
|
—
|
|
|
278,411
|
|
|||||
Cash and cash equivalents at beginning of year
|
21
|
|
|
288,986
|
|
|
142,152
|
|
|
—
|
|
|
431,159
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
21
|
|
|
$
|
523,569
|
|
|
$
|
185,980
|
|
|
$
|
—
|
|
|
$
|
709,570
|
|
•
|
NTI common unitholders who made a valid “Mixed Election” (as defined in the Merger Agreement), or who made no election, received
$15.00
in cash and
0.2986
of a share of Western common stock for each such NTI common unit held.
|
•
|
NTI common unitholders who made a valid “Cash Election” (as defined in the Merger Agreement) received
$15.357
in cash and
0.28896
of a share of Western common stock as prorated in accordance with the Merger Agreement for each such NTI common unit held.
|
•
|
NTI common unitholders who made a valid “Stock Election” (as defined in the Merger Agreement) received
0.7036
of a share of Western common stock for each such NTI common unit held.
|
|
Unaudited Pro Forma for the
|
||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2015
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Net sales
|
$
|
2,569,090
|
|
|
$
|
5,627,888
|
|
|
$
|
7,716,712
|
|
Operating income
|
332,598
|
|
|
329,042
|
|
|
903,984
|
|
|||
Net income
|
189,905
|
|
|
162,768
|
|
|
514,874
|
|
|||
Net income attributable to Western Refining, Inc.
|
184,319
|
|
|
145,862
|
|
|
498,715
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
1.65
|
|
|
$
|
1.35
|
|
|
$
|
4.43
|
|
Diluted earnings per share
|
1.65
|
|
|
1.34
|
|
|
4.43
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
Beginning liability for merger and reorganization costs
|
$
|
452
|
|
|
$
|
470
|
|
|
$
|
189
|
|
|
$
|
808
|
|
Third-party professional service fees
|
178
|
|
|
—
|
|
|
1,321
|
|
|
—
|
|
||||
Reorganization and related personnel costs incurred during period
|
2,666
|
|
|
—
|
|
|
2,666
|
|
|
—
|
|
||||
Cash payments to third-party professional service providers
|
(442
|
)
|
|
—
|
|
|
(1,133
|
)
|
|
—
|
|
||||
Cash payments made to severed employees
|
(1,487
|
)
|
|
(112
|
)
|
|
(1,676
|
)
|
|
(450
|
)
|
||||
Ending liability for merger and reorganization costs
|
$
|
1,367
|
|
|
$
|
358
|
|
|
$
|
1,367
|
|
|
$
|
358
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Refining
.
Our refining segment owns and operates three refineries that process crude oil and other feedstocks primarily into gasoline, diesel fuel, jet fuel and asphalt. We market refined products to a diverse customer base including wholesale distributors and retail chains. The refining segment also sells refined products in the Mid-Atlantic region and Mexico.
|
•
|
WNRL
.
WNRL owns and operates terminal, storage, transportation and wholesale assets in the Southwest and terminal and transportation assets in the Upper Great Plains region. WNRL's Southwest wholesale assets consist of a fleet of crude oil, asphalt and refined product truck transports and wholesale petroleum product operations. WNRL's primary customer is our refining segment. WNRL purchases its wholesale product supply from the refining segment and third-party suppliers.
|
•
|
Retail
.
Our retail segment operates retail convenience stores and unmanned commercial fleet fueling ("cardlock") locations located in the Southwest ("Southwest Retail") and Upper Great Plains ("SuperAmerica") regions. The retail convenience stores sell gasoline, diesel fuel and convenience store merchandise.
|
•
|
We sold the
St. Paul Park Logistics Assets
to WNRL on
September 15, 2016
, in exchange for
$195 million
in cash and
628,224
common units representing limited partner interests in WNRL.
|
•
|
We averaged total throughput of
142,432
bpd at the El Paso refinery for the three months ended
September 30, 2016
, a
2.5%
increase
from the three months ended
September 30, 2015
.
|
•
|
We averaged throughput of
28,245
bpd at the Gallup refinery for the three months ended
September 30, 2016
, a
10.1%
increase
from the three months ended
September 30, 2015
.
|
•
|
We averaged throughput of
84,546
bpd at the St. Paul Park refinery for the three months ended
September 30, 2016
, a
6.7%
decrease
from the three months ended
September 30, 2015
. The decrease in average throughput over the prior year relates primarily to the turnaround of our No. 2 crude unit that commenced in September 2016.
|
•
|
WNRL issued
8,625,000
common units to the public in exchange for net proceeds of
$185.3 million
.
|
•
|
Dividends and distributions declared and paid:
|
◦
|
$0.38
per Western common share; and
|
◦
|
$0.4125
per WNRL common unit.
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Refining
|
$
|
338,803
|
|
|
$
|
900,405
|
|
|
$
|
(561,602
|
)
|
WNRL
|
43,056
|
|
|
41,454
|
|
|
1,602
|
|
|||
Retail
|
21,193
|
|
|
36,356
|
|
|
(15,163
|
)
|
|||
Other
|
(74,010
|
)
|
|
(74,231
|
)
|
|
221
|
|
|||
Total operating income
|
$
|
329,042
|
|
|
$
|
903,984
|
|
|
$
|
(574,942
|
)
|
•
|
supply and demand for crude oil, gasoline and other refined products;
|
•
|
changes in domestic and foreign economies;
|
•
|
weather conditions;
|
•
|
domestic and foreign political affairs;
|
•
|
crude oil and refined petroleum product production levels;
|
•
|
logistics constraints;
|
•
|
availability of imports;
|
•
|
marketing of competitive fuels;
|
•
|
price differentials between heavy and sour crude oils and light sweet crude oils;
|
•
|
government regulation; and
|
•
|
availability and cost of Renewable Identification Numbers ("RINs") to meet our Renewable Fuel Standards ("RFS") obligations.
|
•
|
fluctuations in petroleum based commodity values such as refined product prices and the cost of crude oil and other feedstocks;
|
•
|
product yield volumes that are less than total refinery throughput volume, resulting in yield loss and lower refinery gross margin;
|
•
|
the impact of our economic hedging activity;
|
•
|
adjustments to reflect the lower of cost or market value of crude oil, finished product and retail LIFO inventory values;
|
•
|
availability and cost of RINs to meet our RFS obligations;
|
•
|
fluctuations in our direct operating expenses;
|
•
|
planned maintenance turnarounds, generally significant in both downtime and cost, are expensed as incurred;
|
•
|
seasonal fluctuations in demand for refined products; and
|
•
|
unplanned downtime of our refineries generally leads to increased maintenance costs and a temporary increase in working capital investment.
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands, except per share data)
|
||||||||||
Statements of Operations Data
|
|
|
|
|
|
||||||
Net sales (1)
|
$
|
2,065,076
|
|
|
$
|
2,569,090
|
|
|
$
|
(504,014
|
)
|
Operating costs and expenses:
|
|
|
|
|
|
||||||
Cost of products sold (exclusive of depreciation and amortization) (1)
|
1,607,010
|
|
|
1,895,772
|
|
|
(288,762
|
)
|
|||
Direct operating expenses (exclusive of depreciation and amortization)
|
232,553
|
|
|
234,440
|
|
|
(1,887
|
)
|
|||
Selling, general and administrative expenses
|
57,320
|
|
|
54,465
|
|
|
2,855
|
|
|||
Gain on disposal of assets, net
|
(279
|
)
|
|
(52
|
)
|
|
(227
|
)
|
|||
Maintenance turnaround expense
|
27,208
|
|
|
490
|
|
|
26,718
|
|
|||
Depreciation and amortization
|
54,321
|
|
|
51,377
|
|
|
2,944
|
|
|||
Total operating costs and expenses
|
1,978,133
|
|
|
2,236,492
|
|
|
(258,359
|
)
|
|||
Operating income
|
86,943
|
|
|
332,598
|
|
|
(245,655
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest income
|
141
|
|
|
186
|
|
|
(45
|
)
|
|||
Interest and debt expense
|
(34,456
|
)
|
|
(26,896
|
)
|
|
(7,560
|
)
|
|||
Other, net
|
3,380
|
|
|
4,327
|
|
|
(947
|
)
|
|||
Income before income taxes
|
56,008
|
|
|
310,215
|
|
|
(254,207
|
)
|
|||
Provision for income taxes
|
(11,700
|
)
|
|
(92,117
|
)
|
|
80,417
|
|
|||
Net income
|
44,308
|
|
|
218,098
|
|
|
(173,790
|
)
|
|||
Less net income attributable to non-controlling interests (2)
|
5,733
|
|
|
64,795
|
|
|
(59,062
|
)
|
|||
Net income attributable to Western Refining, Inc.
|
$
|
38,575
|
|
|
$
|
153,303
|
|
|
$
|
(114,728
|
)
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
0.36
|
|
|
$
|
1.61
|
|
|
$
|
(1.25
|
)
|
Diluted earnings per share
|
$
|
0.35
|
|
|
$
|
1.61
|
|
|
$
|
(1.26
|
)
|
Dividends declared per common share
|
$
|
0.38
|
|
|
$
|
0.34
|
|
|
$
|
0.04
|
|
Weighted average basic shares outstanding
|
108,424
|
|
|
94,826
|
|
|
13,598
|
|
|||
Weighted average dilutive shares outstanding
|
108,734
|
|
|
94,924
|
|
|
13,810
|
|
(1)
|
Excludes
$937.1 million
and
$1,063.4 million
of intercompany sales and
$937.1 million
and
$1,063.4 million
of intercompany cost of products sold for the three months ended
September 30, 2016
and
September 30, 2015
, respectively.
|
(2)
|
Net income attributable to non-controlling interests for the three months ended
September 30, 2016
, consisted of income from WNRL in the amount of
$5.7 million
. Net income attributable to non-controlling interests for the three months ended
September 30, 2015
, consisted of income from NTI and WNRL in the amount of
$59.2 million
and
$5.6 million
, respectively.
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Economic Hedging Activities Recognized within Cost of Products Sold
|
|
|
|
|
|
||||||
Realized hedging gain, net
|
$
|
27,757
|
|
|
$
|
26,949
|
|
|
$
|
808
|
|
Unrealized hedging gain (loss), net
|
(27,616
|
)
|
|
271
|
|
|
(27,887
|
)
|
|||
Total hedging gain, net
|
$
|
141
|
|
|
$
|
27,220
|
|
|
$
|
(27,079
|
)
|
|
|
|
|
|
|
||||||
Cash Flow Data
|
|
|
|
|
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
161,019
|
|
|
$
|
373,620
|
|
|
$
|
(212,601
|
)
|
Investing activities
|
(269,218
|
)
|
|
(20,321
|
)
|
|
(248,897
|
)
|
|||
Financing activities
|
176,011
|
|
|
(187,665
|
)
|
|
363,676
|
|
|||
Capital expenditures
|
$
|
78,337
|
|
|
$
|
76,431
|
|
|
$
|
1,906
|
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Net sales
|
$
|
2,065,076
|
|
|
$
|
2,569,090
|
|
|
$
|
(504,014
|
)
|
Cost of products sold (exclusive of depreciation and amortization)
|
1,607,010
|
|
|
1,895,772
|
|
|
(288,762
|
)
|
|||
Gross margin
|
$
|
458,066
|
|
|
$
|
673,318
|
|
|
$
|
(215,252
|
)
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands, except per share data)
|
||||||||||
Statements of Operations Data
|
|
|
|
|
|
||||||
Net sales (1)
|
$
|
5,627,888
|
|
|
$
|
7,716,712
|
|
|
$
|
(2,088,824
|
)
|
Operating costs and expenses:
|
|
|
|
|
|
||||||
Cost of products sold (exclusive of depreciation and amortization) (1)
|
4,256,999
|
|
|
5,814,969
|
|
|
(1,557,970
|
)
|
|||
Direct operating expenses (exclusive of depreciation and amortization)
|
687,307
|
|
|
674,474
|
|
|
12,833
|
|
|||
Selling, general and administrative expenses
|
166,657
|
|
|
169,808
|
|
|
(3,151
|
)
|
|||
Gain on disposal of assets, net
|
(1,181
|
)
|
|
(157
|
)
|
|
(1,024
|
)
|
|||
Maintenance turnaround expense
|
27,733
|
|
|
1,188
|
|
|
26,545
|
|
|||
Depreciation and amortization
|
161,331
|
|
|
152,446
|
|
|
8,885
|
|
|||
Total operating costs and expenses
|
5,298,846
|
|
|
6,812,728
|
|
|
(1,513,882
|
)
|
|||
Operating income
|
329,042
|
|
|
903,984
|
|
|
(574,942
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest income
|
436
|
|
|
550
|
|
|
(114
|
)
|
|||
Interest and debt expense
|
(88,065
|
)
|
|
(79,169
|
)
|
|
(8,896
|
)
|
|||
Other, net
|
13,825
|
|
|
11,557
|
|
|
2,268
|
|
|||
Income before income taxes
|
255,238
|
|
|
836,922
|
|
|
(581,684
|
)
|
|||
Provision for income taxes
|
(68,481
|
)
|
|
(229,989
|
)
|
|
161,508
|
|
|||
Net income
|
186,757
|
|
|
606,933
|
|
|
(420,176
|
)
|
|||
Less net income attributable to non-controlling interests (2)
|
52,229
|
|
|
213,722
|
|
|
(161,493
|
)
|
|||
Net income attributable to Western Refining, Inc.
|
$
|
134,528
|
|
|
$
|
393,211
|
|
|
$
|
(258,683
|
)
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
1.37
|
|
|
$
|
4.12
|
|
|
$
|
(2.75
|
)
|
Diluted earnings per share
|
$
|
1.37
|
|
|
$
|
4.12
|
|
|
$
|
(2.75
|
)
|
Dividends declared per common share
|
$
|
1.14
|
|
|
$
|
0.98
|
|
|
$
|
0.16
|
|
Weighted average basic shares outstanding
|
97,802
|
|
|
95,308
|
|
|
2,494
|
|
|||
Weighted average dilutive shares outstanding
|
98,110
|
|
|
95,408
|
|
|
2,702
|
|
(1)
|
Excludes
$2,610.3 million
and
$3,019.2 million
of intercompany sales and
$2,610.3 million
and
$3,019.2 million
of intercompany cost of products sold for the
nine
months ended
September 30, 2016
and
September 30, 2015
, respectively.
|
(2)
|
Net income attributable to non-controlling interests for the
nine
months ended
September 30, 2016
, consisted of income from NTI and WNRL in the amount of
$35.3 million
and
$16.9 million
, respectively. Net income attributable to non-controlling interests for the
nine
months ended
September 30, 2015
, consisted of income from NTI and WNRL in the amount of
$197.6 million
and
$16.2 million
, respectively.
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Economic Hedging Activities Recognized within Cost of Products Sold
|
|
|
|
|
|
||||||
Realized hedging gain, net
|
$
|
46,110
|
|
|
$
|
52,325
|
|
|
$
|
(6,215
|
)
|
Unrealized hedging loss, net
|
(54,698
|
)
|
|
(42,073
|
)
|
|
(12,625
|
)
|
|||
Total hedging gain (loss), net
|
$
|
(8,588
|
)
|
|
$
|
10,252
|
|
|
$
|
(18,840
|
)
|
|
|
|
|
|
|
||||||
Cash Flow Data
|
|
|
|
|
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
277,877
|
|
|
$
|
665,664
|
|
|
$
|
(387,787
|
)
|
Investing activities
|
(357,079
|
)
|
|
(34,454
|
)
|
|
(322,625
|
)
|
|||
Financing activities
|
(427,204
|
)
|
|
(352,799
|
)
|
|
(74,405
|
)
|
|||
Capital expenditures
|
$
|
235,097
|
|
|
$
|
195,976
|
|
|
$
|
39,121
|
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Net sales
|
$
|
5,627,888
|
|
|
$
|
7,716,712
|
|
|
$
|
(2,088,824
|
)
|
Cost of products sold (exclusive of depreciation and amortization)
|
4,256,999
|
|
|
5,814,969
|
|
|
(1,557,970
|
)
|
|||
Gross margin
|
$
|
1,370,889
|
|
|
$
|
1,901,743
|
|
|
$
|
(530,854
|
)
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Gross Margin by Segment
|
|
|
|
|
|
||||||
Refining
|
$
|
283,834
|
|
|
$
|
482,744
|
|
|
$
|
(198,910
|
)
|
WNRL
|
73,725
|
|
|
79,113
|
|
|
(5,388
|
)
|
|||
Retail
|
100,507
|
|
|
111,691
|
|
|
(11,184
|
)
|
|||
Other
|
—
|
|
|
(230
|
)
|
|
230
|
|
|||
Consolidated gross margin
|
$
|
458,066
|
|
|
$
|
673,318
|
|
|
$
|
(215,252
|
)
|
Direct Operating Expenses by Segment
|
|
|
|
|
|
||||||
Refining
|
$
|
115,791
|
|
|
$
|
118,401
|
|
|
$
|
(2,610
|
)
|
WNRL
|
43,454
|
|
|
45,927
|
|
|
(2,473
|
)
|
|||
Retail
|
73,388
|
|
|
70,112
|
|
|
3,276
|
|
|||
Other
|
(80
|
)
|
|
—
|
|
|
(80
|
)
|
|||
Consolidated direct operating expenses
|
$
|
232,553
|
|
|
$
|
234,440
|
|
|
$
|
(1,887
|
)
|
Depreciation and Amortization by Segment
|
|
|
|
|
|
||||||
Refining
|
$
|
37,265
|
|
|
$
|
35,400
|
|
|
$
|
1,865
|
|
WNRL
|
10,579
|
|
|
8,963
|
|
|
1,616
|
|
|||
Retail
|
5,710
|
|
|
5,846
|
|
|
(136
|
)
|
|||
Other
|
767
|
|
|
1,168
|
|
|
(401
|
)
|
|||
Consolidated depreciation and amortization
|
$
|
54,321
|
|
|
$
|
51,377
|
|
|
$
|
2,944
|
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Gross Margin by Segment
|
|
|
|
|
|
||||||
Refining
|
$
|
869,137
|
|
|
$
|
1,401,105
|
|
|
$
|
(531,968
|
)
|
WNRL
|
220,520
|
|
|
216,686
|
|
|
3,834
|
|
|||
Retail
|
281,232
|
|
|
284,182
|
|
|
(2,950
|
)
|
|||
Other
|
—
|
|
|
(230
|
)
|
|
230
|
|
|||
Consolidated gross margin
|
$
|
1,370,889
|
|
|
$
|
1,901,743
|
|
|
$
|
(530,854
|
)
|
Direct Operating Expenses by Segment
|
|
|
|
|
|
||||||
Refining
|
$
|
345,352
|
|
|
$
|
343,681
|
|
|
$
|
1,671
|
|
WNRL
|
131,103
|
|
|
131,156
|
|
|
(53
|
)
|
|||
Retail
|
210,932
|
|
|
199,554
|
|
|
11,378
|
|
|||
Other
|
(80
|
)
|
|
83
|
|
|
(163
|
)
|
|||
Consolidated direct operating expenses
|
$
|
687,307
|
|
|
$
|
674,474
|
|
|
$
|
12,833
|
|
Depreciation and Amortization by Segment
|
|
|
|
|
|
||||||
Refining
|
$
|
111,601
|
|
|
$
|
105,916
|
|
|
$
|
5,685
|
|
WNRL
|
29,470
|
|
|
25,816
|
|
|
3,654
|
|
|||
Retail
|
17,622
|
|
|
17,257
|
|
|
365
|
|
|||
Other
|
2,638
|
|
|
3,457
|
|
|
(819
|
)
|
|||
Consolidated depreciation and amortization
|
$
|
161,331
|
|
|
$
|
152,446
|
|
|
$
|
8,885
|
|
•
|
Adjusted EBITDA does not reflect our cash expenditures or future requirements for significant turnaround activities, capital expenditures or contractual commitments;
|
•
|
Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt;
|
•
|
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and
|
•
|
Adjusted EBITDA, as we calculate it, may differ from the Adjusted EBITDA calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure.
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Net income attributable to Western Refining, Inc.
|
$
|
38,575
|
|
|
$
|
153,303
|
|
|
$
|
(114,728
|
)
|
Net income attributable to non-controlling interests
|
5,733
|
|
|
64,795
|
|
|
(59,062
|
)
|
|||
Interest and debt expense
|
34,456
|
|
|
26,896
|
|
|
7,560
|
|
|||
Provision for income taxes
|
11,700
|
|
|
92,117
|
|
|
(80,417
|
)
|
|||
Gain on disposal of assets, net
|
(279
|
)
|
|
(52
|
)
|
|
(227
|
)
|
|||
Depreciation and amortization
|
54,321
|
|
|
51,377
|
|
|
2,944
|
|
|||
Maintenance turnaround expense
|
27,208
|
|
|
490
|
|
|
26,718
|
|
|||
Net change in lower of cost or market inventory reserve
|
(15,166
|
)
|
|
36,795
|
|
|
(51,961
|
)
|
|||
Unrealized loss (gain) on commodity hedging transactions
|
27,616
|
|
|
(271
|
)
|
|
27,887
|
|
|||
Adjusted EBITDA
|
$
|
184,164
|
|
|
$
|
425,450
|
|
|
$
|
(241,286
|
)
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Net income attributable to Western Refining, Inc.
|
$
|
134,528
|
|
|
$
|
393,211
|
|
|
$
|
(258,683
|
)
|
Net income attributable to non-controlling interests
|
52,229
|
|
|
213,722
|
|
|
(161,493
|
)
|
|||
Interest and debt expense
|
88,065
|
|
|
79,169
|
|
|
8,896
|
|
|||
Provision for income taxes
|
68,481
|
|
|
229,989
|
|
|
(161,508
|
)
|
|||
Gain on disposal of assets, net
|
(1,181
|
)
|
|
(157
|
)
|
|
(1,024
|
)
|
|||
Depreciation and amortization
|
161,331
|
|
|
152,446
|
|
|
8,885
|
|
|||
Maintenance turnaround expense
|
27,733
|
|
|
1,188
|
|
|
26,545
|
|
|||
Net change in lower of cost or market inventory reserve
|
(102,519
|
)
|
|
(17,131
|
)
|
|
(85,388
|
)
|
|||
Unrealized loss on commodity hedging transactions
|
54,698
|
|
|
42,073
|
|
|
12,625
|
|
|||
Adjusted EBITDA
|
$
|
483,365
|
|
|
$
|
1,094,510
|
|
|
$
|
(611,145
|
)
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands, except bpd and per barrel data)
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
||||||
Net sales (including intersegment sales) (1)
|
$
|
1,835,327
|
|
|
$
|
2,318,048
|
|
|
$
|
(482,721
|
)
|
Operating costs and expenses:
|
|
|
|
|
|
||||||
Cost of products sold (exclusive of depreciation and amortization) (2)
|
1,551,493
|
|
|
1,835,304
|
|
|
(283,811
|
)
|
|||
Direct operating expenses (exclusive of depreciation and amortization)
|
115,791
|
|
|
118,401
|
|
|
(2,610
|
)
|
|||
Selling, general and administrative expenses
|
14,420
|
|
|
15,851
|
|
|
(1,431
|
)
|
|||
Gain on disposal of assets, net
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||
Maintenance turnaround expense
|
27,208
|
|
|
490
|
|
|
26,718
|
|
|||
Depreciation and amortization
|
37,265
|
|
|
35,400
|
|
|
1,865
|
|
|||
Total operating costs and expenses
|
1,746,169
|
|
|
2,005,446
|
|
|
(259,277
|
)
|
|||
Operating income
|
$
|
89,158
|
|
|
$
|
312,602
|
|
|
$
|
(223,444
|
)
|
Key Operating Statistics
|
|
|
|
|
|
||||||
Total sales volume (bpd) (1) (3)
|
314,239
|
|
|
347,456
|
|
|
(33,217
|
)
|
|||
Total refinery production (bpd)
|
253,365
|
|
|
252,420
|
|
|
945
|
|
|||
Total refinery throughput (bpd) (4)
|
255,222
|
|
|
255,170
|
|
|
52
|
|
|||
Per barrel of throughput:
|
|
|
|
|
|
||||||
Refinery gross margin (2) (5) (6)
|
$
|
12.02
|
|
|
$
|
20.65
|
|
|
$
|
(8.63
|
)
|
Direct operating expenses (7)
|
4.93
|
|
|
5.04
|
|
|
(0.11
|
)
|
|||
Mid-Atlantic sales volume (barrels)
|
1,987
|
|
|
2,144
|
|
|
(157
|
)
|
|||
Mid-Atlantic margin per barrel
|
$
|
0.77
|
|
|
$
|
(1.10
|
)
|
|
$
|
1.87
|
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Key Operating Statistics
|
|
|
|
|
|
||||||
Refinery product yields (bpd):
|
|
|
|
|
|
||||||
Gasoline
|
76,161
|
|
|
71,855
|
|
|
4,306
|
|
|||
Diesel and jet fuel
|
56,574
|
|
|
55,667
|
|
|
907
|
|
|||
Residuum
|
2,930
|
|
|
4,121
|
|
|
(1,191
|
)
|
|||
Other
|
5,356
|
|
|
5,016
|
|
|
340
|
|
|||
Total refinery production (bpd)
|
141,021
|
|
|
136,659
|
|
|
4,362
|
|
|||
Refinery throughput (bpd):
|
|
|
|
|
|
||||||
Sweet crude oil
|
105,990
|
|
|
107,577
|
|
|
(1,587
|
)
|
|||
Sour crude oil
|
27,566
|
|
|
23,854
|
|
|
3,712
|
|
|||
Other feedstocks and blendstocks
|
8,876
|
|
|
7,485
|
|
|
1,391
|
|
|||
Total refinery throughput (bpd) (4)
|
142,432
|
|
|
138,916
|
|
|
3,516
|
|
|||
Total sales volume (bpd) (3)
|
154,648
|
|
|
149,861
|
|
|
4,787
|
|
|||
Per barrel of throughput:
|
|
|
|
|
|
||||||
Refinery gross margin (2) (5) (6)
|
$
|
11.80
|
|
|
$
|
18.51
|
|
|
$
|
(6.71
|
)
|
Direct operating expenses (7)
|
3.71
|
|
|
3.64
|
|
|
0.07
|
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Key Operating Statistics
|
|
|
|
|
|
||||||
Refinery product yields (bpd):
|
|
|
|
|
|
||||||
Gasoline
|
17,719
|
|
|
15,961
|
|
|
1,758
|
|
|||
Diesel and jet fuel
|
8,831
|
|
|
7,878
|
|
|
953
|
|
|||
Other
|
1,058
|
|
|
1,560
|
|
|
(502
|
)
|
|||
Total refinery production (bpd)
|
27,608
|
|
|
25,399
|
|
|
2,209
|
|
|||
Refinery throughput (bpd):
|
|
|
|
|
|
||||||
Sweet crude oil
|
24,985
|
|
|
23,888
|
|
|
1,097
|
|
|||
Other feedstocks and blendstocks
|
3,260
|
|
|
1,776
|
|
|
1,484
|
|
|||
Total refinery throughput (bpd) (4)
|
28,245
|
|
|
25,664
|
|
|
2,581
|
|
|||
Total sales volume (bpd) (3)
|
37,022
|
|
|
33,489
|
|
|
3,533
|
|
|||
Per barrel of throughput:
|
|
|
|
|
|
||||||
Refinery gross margin (2) (5) (6)
|
$
|
14.01
|
|
|
$
|
23.08
|
|
|
$
|
(9.07
|
)
|
Direct operating expenses (7)
|
8.10
|
|
|
9.10
|
|
|
(1.00
|
)
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Key Operating Statistics
|
|
|
|
|
|
||||||
Refinery product yields (bpd):
|
|
|
|
|
|
||||||
Gasoline
|
42,896
|
|
|
43,914
|
|
|
(1,018
|
)
|
|||
Distillate
|
25,667
|
|
|
30,404
|
|
|
(4,737
|
)
|
|||
Residuum
|
9,212
|
|
|
10,091
|
|
|
(879
|
)
|
|||
Other
|
6,960
|
|
|
5,953
|
|
|
1,007
|
|
|||
Total refinery production (bpd)
|
84,735
|
|
|
90,362
|
|
|
(5,627
|
)
|
|||
Refinery throughput (bpd):
|
|
|
|
|
|
||||||
Light crude oil
|
43,888
|
|
|
51,701
|
|
|
(7,813
|
)
|
|||
Synthetic crude oil
|
18,769
|
|
|
14,735
|
|
|
4,034
|
|
|||
Heavy crude oil
|
19,380
|
|
|
23,150
|
|
|
(3,770
|
)
|
|||
Other feedstocks
|
2,509
|
|
|
1,004
|
|
|
1,505
|
|
|||
Total refinery throughput (bpd) (4)
|
84,546
|
|
|
90,590
|
|
|
(6,044
|
)
|
|||
Total sales volume (bpd) (3)
|
90,906
|
|
|
99,617
|
|
|
(8,711
|
)
|
|||
Per barrel of throughput:
|
|
|
|
|
|
||||||
Refinery gross margin (2) (5) (6)
|
$
|
11.20
|
|
|
$
|
24.57
|
|
|
$
|
(13.37
|
)
|
Direct operating expenses (7)
|
5.94
|
|
|
5.68
|
|
|
0.26
|
|
(1)
|
Refining net sales for the three months ended
September 30, 2016
and
2015
, includes
$148.3 million
and
$409.1 million
, respectively, in crude oil sales to third parties, representing a period average of
37,027
bpd and
73,630
bpd, respectively.
|
(2)
|
Cost of products sold for the combined refining segment includes the net realized and net non-cash unrealized hedging activity shown in the table below. The hedging gains and losses are also included in the combined gross profit and refinery gross margin but are not included in those measures for our individual refineries.
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Realized hedging gain, net
|
$
|
27,757
|
|
|
$
|
26,949
|
|
|
$
|
808
|
|
Unrealized hedging gain (loss), net
|
(27,616
|
)
|
|
271
|
|
|
(27,887
|
)
|
|||
Total hedging gain, net
|
$
|
141
|
|
|
$
|
27,220
|
|
|
$
|
(27,079
|
)
|
(3)
|
Sales volume includes sales of refined products sourced primarily from our refinery production as well as refined products purchased from third parties. We purchase additional refined products from third parties to supplement supply to our customers. These products are similar to the products that we currently manufacture and represented
6.0%
and
6.2%
of our total consolidated sales volumes for the three months ended
September 30, 2016
and
2015
, respectively.
The majority of the purchased refined products are distributed through our refined product sales activities in the Mid-Atlantic region where we satisfy our refined product customer sales requirements through a third-party supply agreement.
|
(4)
|
Total refinery throughput includes crude oil, other feedstocks and blendstocks.
|
(5)
|
Refinery gross margin is a per barrel measurement calculated by dividing the difference between net sales and cost of products sold by our refineries’ total throughput volumes for the respective periods presented. Net realized and net non-cash unrealized economic hedging gains and losses included in the combined refining segment gross margin are not allocated to the individual refineries. Cost of products sold does not include any depreciation or amortization. Refinery gross margin is a non-GAAP performance measure that we believe is important to investors in evaluating our refinery performance as a general indication of the amount above our cost of products that we are able to sell refined products. Each of the components used in this calculation (net sales and cost of products sold) can be reconciled directly to our statement of operations. Our calculation of refinery gross margin may differ from similar calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure.
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Refinery net sales (including intersegment sales)
|
$
|
1,714,913
|
|
|
$
|
2,163,163
|
|
|
$
|
(448,250
|
)
|
Mid-Atlantic sales
|
120,414
|
|
|
154,885
|
|
|
(34,471
|
)
|
|||
Net sales (including intersegment sales)
|
$
|
1,835,327
|
|
|
$
|
2,318,048
|
|
|
$
|
(482,721
|
)
|
|
|
|
|
|
|
||||||
Refinery cost of products sold (exclusive of depreciation and amortization)
|
$
|
1,432,610
|
|
|
$
|
1,678,390
|
|
|
$
|
(245,780
|
)
|
Mid-Atlantic cost of products sold
|
118,883
|
|
|
156,914
|
|
|
(38,031
|
)
|
|||
Cost of products sold (exclusive of depreciation and amortization)
|
$
|
1,551,493
|
|
|
$
|
1,835,304
|
|
|
$
|
(283,811
|
)
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands, except per barrel data)
|
||||||||||
Refinery net sales (including intersegment sales)
|
$
|
1,714,913
|
|
|
$
|
2,163,163
|
|
|
$
|
(448,250
|
)
|
Refinery cost of products sold (exclusive of depreciation and amortization)
|
1,432,610
|
|
|
1,678,390
|
|
|
(245,780
|
)
|
|||
Depreciation and amortization
|
37,265
|
|
|
35,400
|
|
|
1,865
|
|
|||
Gross profit
|
245,038
|
|
|
449,373
|
|
|
(204,335
|
)
|
|||
Plus depreciation and amortization
|
37,265
|
|
|
35,400
|
|
|
1,865
|
|
|||
Refinery gross margin
|
$
|
282,303
|
|
|
$
|
484,773
|
|
|
$
|
(202,470
|
)
|
Refinery gross margin per throughput barrel
|
$
|
12.02
|
|
|
$
|
20.65
|
|
|
$
|
(8.63
|
)
|
Gross profit per throughput barrel
|
$
|
10.44
|
|
|
$
|
19.14
|
|
|
$
|
(8.70
|
)
|
(6)
|
Cost of products sold for the combined refining segment includes changes in the lower of cost or market inventory reserve shown in the table below. The changes in this reserve are included in the combined refinery gross margin but are not included in those measures for the individual refineries. The following table calculates the combined refinery gross margin per throughput barrel excluding changes in the lower of cost or market inventory reserve that we believe is useful in evaluating our refinery performance exclusive of the impact of fluctuations in inventory values:
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands, except per barrel data)
|
||||||||||
Refinery gross margin
|
$
|
282,303
|
|
|
$
|
484,773
|
|
|
$
|
(202,470
|
)
|
Net change in lower of cost or market inventory reserve
|
(15,167
|
)
|
|
36,022
|
|
|
(51,189
|
)
|
|||
Refinery gross margin, excluding LCM adjustment
|
$
|
267,136
|
|
|
$
|
520,795
|
|
|
$
|
(253,659
|
)
|
Refinery gross margin, excluding LCM adjustment, per refinery throughput barrel
|
$
|
11.38
|
|
|
$
|
22.18
|
|
|
$
|
(10.80
|
)
|
(7)
|
Refinery direct operating expenses per throughput barrel is calculated by dividing direct operating expenses by total throughput volumes for the respective periods presented. Direct operating expenses do not include any depreciation or amortization.
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Net sales
|
$
|
1,835,327
|
|
|
$
|
2,318,048
|
|
|
$
|
(482,721
|
)
|
Cost of products sold (exclusive of depreciation and amortization)
|
1,551,493
|
|
|
1,835,304
|
|
|
(283,811
|
)
|
|||
Gross margin
|
$
|
283,834
|
|
|
$
|
482,744
|
|
|
$
|
(198,910
|
)
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands, except bpd and per barrel data)
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
||||||
Net sales (including intersegment sales) (1)
|
$
|
5,012,283
|
|
|
$
|
6,958,443
|
|
|
$
|
(1,946,160
|
)
|
Operating costs and expenses:
|
|
|
|
|
|
||||||
Cost of products sold (exclusive of depreciation and amortization) (2)
|
4,143,146
|
|
|
5,557,338
|
|
|
(1,414,192
|
)
|
|||
Direct operating expenses (exclusive of depreciation and amortization)
|
345,352
|
|
|
343,681
|
|
|
1,671
|
|
|||
Selling, general and administrative expenses
|
45,631
|
|
|
49,559
|
|
|
(3,928
|
)
|
|||
Loss on disposal of assets, net
|
17
|
|
|
356
|
|
|
(339
|
)
|
|||
Maintenance turnaround expense
|
27,733
|
|
|
1,188
|
|
|
26,545
|
|
|||
Depreciation and amortization
|
111,601
|
|
|
105,916
|
|
|
5,685
|
|
|||
Total operating costs and expenses
|
4,673,480
|
|
|
6,058,038
|
|
|
(1,384,558
|
)
|
|||
Operating income
|
$
|
338,803
|
|
|
$
|
900,405
|
|
|
$
|
(561,602
|
)
|
Key Operating Statistics
|
|
|
|
|
|
||||||
Total sales volume (bpd) (1) (3)
|
312,131
|
|
|
339,005
|
|
|
(26,874
|
)
|
|||
Total refinery production (bpd)
|
258,166
|
|
|
256,828
|
|
|
1,338
|
|
|||
Total refinery throughput (bpd) (4)
|
260,024
|
|
|
259,154
|
|
|
870
|
|
|||
Per barrel of refinery throughput:
|
|
|
|
|
|
||||||
Refinery gross margin (2) (5) (6)
|
$
|
12.13
|
|
|
$
|
19.79
|
|
|
$
|
(7.66
|
)
|
Direct operating expenses (7)
|
4.85
|
|
|
4.86
|
|
|
(0.01
|
)
|
|||
Mid-Atlantic sales volume (barrels)
|
5,689
|
|
|
6,597
|
|
|
(908
|
)
|
|||
Mid-Atlantic margin per barrel
|
$
|
0.88
|
|
|
$
|
0.15
|
|
|
$
|
0.73
|
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Key Operating Statistics
|
|
|
|
|
|
||||||
Refinery product yields (bpd):
|
|
|
|
|
|
||||||
Gasoline
|
74,054
|
|
|
70,613
|
|
|
3,441
|
|
|||
Diesel and jet fuel
|
55,871
|
|
|
55,804
|
|
|
67
|
|
|||
Residuum
|
2,876
|
|
|
4,730
|
|
|
(1,854
|
)
|
|||
Other
|
5,080
|
|
|
4,503
|
|
|
577
|
|
|||
Total refinery production (bpd)
|
137,881
|
|
|
135,650
|
|
|
2,231
|
|
|||
Refinery throughput (bpd):
|
|
|
|
|
|
||||||
Sweet crude oil
|
104,513
|
|
|
106,850
|
|
|
(2,337
|
)
|
|||
Sour crude oil
|
26,261
|
|
|
23,055
|
|
|
3,206
|
|
|||
Other feedstocks and blendstocks
|
8,614
|
|
|
7,604
|
|
|
1,010
|
|
|||
Total refinery throughput (bpd) (4)
|
139,388
|
|
|
137,509
|
|
|
1,879
|
|
|||
Total sales volume (bpd) (3)
|
148,753
|
|
|
150,404
|
|
|
(1,651
|
)
|
|||
Per barrel of refinery throughput:
|
|
|
|
|
|
||||||
Refinery gross margin (2) (5) (6)
|
$
|
11.05
|
|
|
$
|
18.65
|
|
|
$
|
(7.60
|
)
|
Direct operating expenses (7)
|
3.81
|
|
|
3.96
|
|
|
(0.15
|
)
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Key Operating Statistics
|
|
|
|
|
|
||||||
Refinery product yields (bpd):
|
|
|
|
|
|
||||||
Gasoline
|
16,607
|
|
|
17,065
|
|
|
(458
|
)
|
|||
Diesel and jet fuel
|
7,548
|
|
|
8,137
|
|
|
(589
|
)
|
|||
Other
|
1,243
|
|
|
1,525
|
|
|
(282
|
)
|
|||
Total refinery production (bpd)
|
25,398
|
|
|
26,727
|
|
|
(1,329
|
)
|
|||
Refinery throughput (bpd):
|
|
|
|
|
|
||||||
Sweet crude oil
|
23,149
|
|
|
24,776
|
|
|
(1,627
|
)
|
|||
Other feedstocks and blendstocks
|
2,755
|
|
|
2,331
|
|
|
424
|
|
|||
Total refinery throughput (bpd) (4)
|
25,904
|
|
|
27,107
|
|
|
(1,203
|
)
|
|||
Total sales volume (bpd) (3)
|
35,033
|
|
|
33,339
|
|
|
1,694
|
|
|||
Per barrel of refinery throughput:
|
|
|
|
|
|
||||||
Refinery gross margin (2) (5) (6)
|
$
|
12.48
|
|
|
$
|
19.85
|
|
|
$
|
(7.37
|
)
|
Direct operating expenses (7)
|
8.72
|
|
|
8.30
|
|
|
0.42
|
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Key Operating Statistics
|
|
|
|
|
|
||||||
Refinery product yields (bpd):
|
|
|
|
|
|
||||||
Gasoline
|
47,158
|
|
|
45,155
|
|
|
2,003
|
|
|||
Distillate
|
30,417
|
|
|
32,791
|
|
|
(2,374
|
)
|
|||
Residuum
|
11,036
|
|
|
10,742
|
|
|
294
|
|
|||
Other
|
6,276
|
|
|
5,763
|
|
|
513
|
|
|||
Total refinery production (bpd)
|
94,887
|
|
|
94,451
|
|
|
436
|
|
|||
Refinery throughput (bpd):
|
|
|
|
|
|
||||||
Light crude oil
|
53,692
|
|
|
55,779
|
|
|
(2,087
|
)
|
|||
Synthetic crude oil
|
13,850
|
|
|
12,303
|
|
|
1,547
|
|
|||
Heavy crude oil
|
24,325
|
|
|
24,629
|
|
|
(304
|
)
|
|||
Other feedstocks
|
2,863
|
|
|
1,827
|
|
|
1,036
|
|
|||
Total refinery throughput (bpd) (4)
|
94,730
|
|
|
94,538
|
|
|
192
|
|
|||
Total sales volume (bpd) (3)
|
101,064
|
|
|
100,630
|
|
|
434
|
|
|||
Per barrel of throughput:
|
|
|
|
|
|
||||||
Refinery gross margin (2) (5) (6)
|
$
|
10.27
|
|
|
$
|
20.57
|
|
|
$
|
(10.30
|
)
|
Direct operating expenses (7)
|
5.08
|
|
|
5.04
|
|
|
0.04
|
|
(1)
|
Refining net sales for the
nine
months ended
September 30, 2016
and
2015
, includes
$341.3 million
and
$848.2 million
, respectively, representing a period average of
29,875
bpd and
62,248
bpd, respectively, in crude oil sales to third parties.
|
(2)
|
Cost of products sold for the combined refining segment includes the net realized and net non-cash unrealized hedging activity shown in the table below. The hedging gains and losses are also included in the combined gross profit and refinery gross margin but are not included in those measures for our individual refineries.
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Realized hedging gain, net
|
$
|
46,110
|
|
|
$
|
52,325
|
|
|
$
|
(6,215
|
)
|
Unrealized hedging loss, net
|
(54,698
|
)
|
|
(42,073
|
)
|
|
(12,625
|
)
|
|||
Total hedging gain (loss), net
|
$
|
(8,588
|
)
|
|
$
|
10,252
|
|
|
$
|
(18,840
|
)
|
(3)
|
Sales volume includes sales of refined products sourced primarily from our refinery production as well as refined products purchased from third parties. We purchase additional refined products from third parties to supplement supply to our customers. These products are similar to the products that we currently manufacture and represented
5.8%
and
6.8%
of our total consolidated sales volumes for the
nine
months ended
September 30, 2016
and
2015
, respectively.
The majority of the purchased refined products are distributed through our refined product sales activities in the Mid-Atlantic region where we satisfy our refined product customer sales requirements through a third-party supply agreement.
|
(4)
|
Total refinery throughput includes crude oil, other feedstocks and blendstocks.
|
(5)
|
Refinery gross margin is a per barrel measurement calculated by dividing the difference between net sales and cost of products sold by our refineries’ total throughput volumes for the respective periods presented. Net realized and net non-cash unrealized economic hedging gains and losses included in the combined refining segment gross margin are not allocated to the individual refineries. Cost of products sold does not include any depreciation or amortization. Refinery gross margin is a non-GAAP performance measure that we believe is important to investors in evaluating our refinery performance as a general indication of the amount above our cost of products that we are able to sell refined products. Each of the components used in this calculation (net sales and cost of products sold) can be reconciled directly to our statement of operations. Our calculation of refinery gross margin may differ from similar calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure.
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Refinery net sales (including intersegment sales)
|
$
|
4,680,900
|
|
|
$
|
6,461,580
|
|
|
$
|
(1,780,680
|
)
|
Mid-Atlantic sales
|
331,383
|
|
|
496,863
|
|
|
(165,480
|
)
|
|||
Net sales (including intersegment sales)
|
$
|
5,012,283
|
|
|
$
|
6,958,443
|
|
|
$
|
(1,946,160
|
)
|
|
|
|
|
|
|
||||||
Refinery cost of products sold (exclusive of depreciation and amortization)
|
$
|
3,816,760
|
|
|
$
|
5,061,474
|
|
|
$
|
(1,244,714
|
)
|
Mid-Atlantic cost of products sold
|
326,386
|
|
|
495,864
|
|
|
(169,478
|
)
|
|||
Cost of products sold (exclusive of depreciation and amortization)
|
$
|
4,143,146
|
|
|
$
|
5,557,338
|
|
|
$
|
(1,414,192
|
)
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands, except per barrel data)
|
||||||||||
Net sales (including intersegment sales)
|
$
|
4,680,900
|
|
|
$
|
6,461,580
|
|
|
$
|
(1,780,680
|
)
|
Cost of products sold (exclusive of depreciation and amortization)
|
3,816,760
|
|
|
5,061,474
|
|
|
(1,244,714
|
)
|
|||
Depreciation and amortization
|
111,601
|
|
|
105,916
|
|
|
5,685
|
|
|||
Gross profit
|
752,539
|
|
|
1,294,190
|
|
|
(541,651
|
)
|
|||
Plus depreciation and amortization
|
111,601
|
|
|
105,916
|
|
|
5,685
|
|
|||
Refinery gross margin
|
$
|
864,140
|
|
|
$
|
1,400,106
|
|
|
$
|
(535,966
|
)
|
Refinery gross margin per throughput barrel
|
$
|
12.13
|
|
|
$
|
19.79
|
|
|
$
|
(7.66
|
)
|
Gross profit per throughput barrel
|
$
|
10.56
|
|
|
$
|
18.29
|
|
|
$
|
(7.73
|
)
|
(6)
|
Cost of products sold for the combined refining segment includes changes in the lower of cost or market inventory reserve shown in the table below. The changes in this reserve are included in the combined refinery gross margin but are not included in those measures for the individual refineries. The following table calculates the combined refinery gross margin per throughput barrel excluding changes in the lower of cost or market inventory reserve that we believe is useful in evaluating our refinery performance exclusive of the impact of fluctuations in inventory values:
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands, except per barrel data)
|
||||||||||
Refinery gross margin
|
$
|
864,140
|
|
|
$
|
1,400,106
|
|
|
$
|
(535,966
|
)
|
Net change in lower of cost or market inventory reserve
|
(101,708
|
)
|
|
(16,598
|
)
|
|
(85,110
|
)
|
|||
Refinery gross margin, excluding LCM adjustment
|
$
|
762,432
|
|
|
$
|
1,383,508
|
|
|
$
|
(621,076
|
)
|
Refinery gross margin, excluding LCM adjustment, per refinery throughput barrel
|
$
|
10.70
|
|
|
$
|
19.56
|
|
|
$
|
(8.86
|
)
|
(7)
|
Refinery direct operating expenses per throughput barrel is calculated by dividing direct operating expenses by total throughput volumes for the respective periods presented. Direct operating expenses do not include any depreciation or amortization.
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Net sales
|
$
|
5,012,283
|
|
|
$
|
6,958,443
|
|
|
$
|
(1,946,160
|
)
|
Cost of products sold (exclusive of depreciation and amortization)
|
4,143,146
|
|
|
5,557,338
|
|
|
(1,414,192
|
)
|
|||
Gross margin
|
$
|
869,137
|
|
|
$
|
1,401,105
|
|
|
$
|
(531,968
|
)
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
||||||
Net sales
|
$
|
569,261
|
|
|
$
|
680,670
|
|
|
$
|
(111,409
|
)
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||
Cost of products sold
|
495,536
|
|
|
601,557
|
|
|
(106,021
|
)
|
|||
Direct operating expenses
|
43,454
|
|
|
45,927
|
|
|
(2,473
|
)
|
|||
Selling, general and administrative expenses
|
6,483
|
|
|
5,812
|
|
|
671
|
|
|||
Gain on disposal of assets, net
|
(62
|
)
|
|
(13
|
)
|
|
(49
|
)
|
|||
Depreciation and amortization
|
10,579
|
|
|
8,963
|
|
|
1,616
|
|
|||
Total operating costs and expenses
|
555,990
|
|
|
662,246
|
|
|
(106,256
|
)
|
|||
Operating income
|
$
|
13,271
|
|
|
$
|
18,424
|
|
|
$
|
(5,153
|
)
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Key Operating Statistics
|
|
|
|
|
|
||||||
Pipeline and gathering (bpd):
|
|
|
|
|
|
||||||
Mainline movements:
|
|
|
|
|
|
||||||
Permian/Delaware Basin system
|
49,709
|
|
|
56,745
|
|
|
(7,036
|
)
|
|||
Four Corners system (1)
|
53,070
|
|
|
66,602
|
|
|
(13,532
|
)
|
|||
TexNew Mex system
|
7,504
|
|
|
14,834
|
|
|
(7,330
|
)
|
|||
Gathering (truck offloading):
|
|
|
|
|
|
||||||
Permian/Delaware Basin system
|
15,514
|
|
|
25,961
|
|
|
(10,447
|
)
|
|||
Four Corners system
|
9,577
|
|
|
16,487
|
|
|
(6,910
|
)
|
|||
Terminalling, transportation and storage (bpd):
|
|
|
|
|
|
||||||
Shipments into and out of storage (includes asphalt):
|
416,761
|
|
|
408,787
|
|
|
7,974
|
|
|||
Wholesale:
|
|
|
|
|
|
||||||
Fuel gallons sold (in thousands)
|
313,600
|
|
|
305,566
|
|
|
8,034
|
|
|||
Fuel gallons sold to retail (included in fuel gallons sold above) (in thousands)
|
87,131
|
|
|
81,538
|
|
|
5,593
|
|
|||
Fuel margin per gallon (2)
|
$
|
0.030
|
|
|
$
|
0.029
|
|
|
$
|
0.001
|
|
Lubricant gallons sold (in thousands)
|
1,355
|
|
|
2,998
|
|
|
(1,643
|
)
|
|||
Lubricant margin per gallon (3)
|
$
|
1.05
|
|
|
$
|
0.70
|
|
|
$
|
0.35
|
|
Asphalt trucking volume (bpd)
|
5,620
|
|
|
—
|
|
|
5,620
|
|
|||
Crude oil trucking volume (bpd)
|
36,144
|
|
|
49,620
|
|
|
(13,476
|
)
|
|||
Average crude oil revenue per barrel
|
$
|
2.11
|
|
|
$
|
2.51
|
|
|
$
|
(0.40
|
)
|
(1)
|
Some barrels of crude oil in route to Western's Gallup refinery and Permian/Delaware Basin are transported on more than one mainline. Mainline movements for the Four Corners and Delaware Basin systems include each barrel transported on each mainline.
|
(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 business 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.
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Net sales
|
$
|
569,261
|
|
|
$
|
680,670
|
|
|
$
|
(111,409
|
)
|
Cost of products sold (exclusive of depreciation and amortization)
|
495,536
|
|
|
601,557
|
|
|
(106,021
|
)
|
|||
Gross margin
|
$
|
73,725
|
|
|
$
|
79,113
|
|
|
$
|
(5,388
|
)
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
||||||
Net sales
|
$
|
1,615,902
|
|
|
$
|
2,023,970
|
|
|
$
|
(408,068
|
)
|
Operating costs and expenses:
|
|
|
|
|
|
|
|||||
Cost of products sold
|
1,395,382
|
|
|
1,807,284
|
|
|
(411,902
|
)
|
|||
Direct operating expenses
|
131,103
|
|
|
131,156
|
|
|
(53
|
)
|
|||
Selling, general and administrative expenses
|
17,854
|
|
|
18,517
|
|
|
(663
|
)
|
|||
Gain on disposal of assets, net
|
(963
|
)
|
|
(257
|
)
|
|
(706
|
)
|
|||
Depreciation and amortization
|
29,470
|
|
|
25,816
|
|
|
3,654
|
|
|||
Total operating costs and expenses
|
1,572,846
|
|
|
1,982,516
|
|
|
(409,670
|
)
|
|||
Operating income
|
$
|
43,056
|
|
|
$
|
41,454
|
|
|
$
|
1,602
|
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Key Operating Statistics
|
|
|
|
|
|
||||||
Pipeline and gathering (bpd):
|
|
|
|
|
|
||||||
Mainline movements:
|
|
|
|
|
|
||||||
Permian/Delaware Basin system
|
51,709
|
|
|
45,784
|
|
|
5,925
|
|
|||
Four Corners system (1)
|
54,523
|
|
|
54,719
|
|
|
(196
|
)
|
|||
TexNew Mex system
|
10,132
|
|
|
6,131
|
|
|
4,001
|
|
|||
Gathering (truck offloading):
|
|
|
|
|
|
||||||
Permian/Delaware Basin system
|
17,948
|
|
|
24,207
|
|
|
(6,259
|
)
|
|||
Four Corners system
|
11,151
|
|
|
13,387
|
|
|
(2,236
|
)
|
|||
Terminalling, transportation and storage (bpd):
|
|
|
|
|
|
||||||
Shipments into and out of storage (includes asphalt)
|
399,415
|
|
|
396,506
|
|
|
2,909
|
|
|||
Wholesale:
|
|
|
|
|
|
||||||
Fuel gallons sold (in thousands)
|
940,029
|
|
|
919,808
|
|
|
20,221
|
|
|||
Fuel gallons sold to retail (included in fuel gallons sold above) (in thousands)
|
250,693
|
|
|
235,824
|
|
|
14,869
|
|
|||
Fuel margin per gallon (2)
|
$
|
0.028
|
|
|
$
|
0.031
|
|
|
$
|
(0.003
|
)
|
Lubricant gallons sold (in thousands)
|
5,402
|
|
|
8,969
|
|
|
(3,567
|
)
|
|||
Lubricant margin per gallon (3)
|
$
|
0.85
|
|
|
$
|
0.71
|
|
|
$
|
0.14
|
|
Asphalt trucking volume (bpd)
|
4,461
|
|
|
—
|
|
|
4,461
|
|
|||
Crude oil trucking volume (bpd)
|
37,909
|
|
|
47,245
|
|
|
(9,336
|
)
|
|||
Average crude oil revenue per barrel
|
$
|
2.17
|
|
|
$
|
2.58
|
|
|
$
|
(0.41
|
)
|
(1)
|
Some barrels of crude oil in route to Western's Gallup refinery and Permian/Delaware Basin are transported on more than one mainline. Mainline movements for the Four Corners and Delaware Basin systems include each barrel transported on each mainline.
|
(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 business 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.
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Net sales
|
$
|
1,615,902
|
|
|
$
|
2,023,970
|
|
|
$
|
(408,068
|
)
|
Cost of products sold (exclusive of depreciation and amortization)
|
1,395,382
|
|
|
1,807,284
|
|
|
(411,902
|
)
|
|||
Gross margin
|
$
|
220,520
|
|
|
$
|
216,686
|
|
|
$
|
3,834
|
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands, except per gallon data)
|
||||||||||
Statement of Operations Data
|
|
|
|
|
|
||||||
Net sales (including intersegment sales)
|
$
|
597,621
|
|
|
$
|
633,793
|
|
|
$
|
(36,172
|
)
|
Operating costs and expenses:
|
|
|
|
|
|
||||||
Cost of products sold (exclusive of depreciation and amortization)
|
497,114
|
|
|
522,102
|
|
|
(24,988
|
)
|
|||
Direct operating expenses (exclusive of depreciation and amortization)
|
73,388
|
|
|
70,112
|
|
|
3,276
|
|
|||
Selling, general and administrative expenses
|
9,786
|
|
|
10,835
|
|
|
(1,049
|
)
|
|||
Gain on disposal of assets, net
|
(209
|
)
|
|
(39
|
)
|
|
(170
|
)
|
|||
Depreciation and amortization
|
5,710
|
|
|
5,846
|
|
|
(136
|
)
|
|||
Total operating costs and expenses
|
585,789
|
|
|
608,856
|
|
|
(23,067
|
)
|
|||
Operating income
|
$
|
11,832
|
|
|
$
|
24,937
|
|
|
$
|
(13,105
|
)
|
Key Operating Statistics
|
|
|
|
|
|
||||||
Southwest Retail:
|
|
|
|
|
|
||||||
Retail fuel gallons sold
|
105,304
|
|
|
92,939
|
|
|
12,365
|
|
|||
Average retail fuel sales price per gallon, net of excise taxes
|
$
|
1.79
|
|
|
$
|
2.26
|
|
|
$
|
(0.47
|
)
|
Average retail fuel cost per gallon, net of excise taxes
|
1.60
|
|
|
1.95
|
|
|
(0.35
|
)
|
|||
Retail fuel margin per gallon (1)
|
0.19
|
|
|
0.31
|
|
|
(0.12
|
)
|
|||
Merchandise sales
|
$
|
88,151
|
|
|
$
|
83,146
|
|
|
$
|
5,005
|
|
Merchandise margin (2)
|
28.8
|
%
|
|
29.4
|
%
|
|
(0.6
|
)%
|
|||
Cardlock fuel gallons sold
|
16,630
|
|
|
16,990
|
|
|
(360
|
)
|
|||
Cardlock fuel margin per gallon
|
$
|
0.122
|
|
|
$
|
0.176
|
|
|
$
|
(0.054
|
)
|
SuperAmerica:
|
|
|
|
|
|
||||||
Retail fuel gallons sold
|
79,539
|
|
|
78,414
|
|
|
1,125
|
|
|||
Retail fuel margin per gallon (1)
|
$
|
0.22
|
|
|
$
|
0.27
|
|
|
$
|
(0.05
|
)
|
Merchandise sales
|
99,535
|
|
|
100,645
|
|
|
(1,110
|
)
|
|||
Merchandise margin (2)
|
25.8
|
%
|
|
25.8
|
%
|
|
—
|
%
|
|
Three Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands, except per gallon data)
|
||||||||||
Net Sales
|
|
|
|
|
|
||||||
Retail fuel sales, net of excise taxes
|
$
|
359,916
|
|
|
$
|
408,801
|
|
|
$
|
(48,885
|
)
|
Merchandise sales
|
187,686
|
|
|
183,791
|
|
|
3,895
|
|
|||
Cardlock sales
|
25,042
|
|
|
33,184
|
|
|
(8,142
|
)
|
|||
Other sales
|
24,977
|
|
|
8,017
|
|
|
16,960
|
|
|||
Net sales
|
$
|
597,621
|
|
|
$
|
633,793
|
|
|
$
|
(36,172
|
)
|
Cost of Products Sold
|
|
|
|
|
|
||||||
Retail fuel cost of products sold, net of excise taxes
|
$
|
321,843
|
|
|
$
|
359,142
|
|
|
$
|
(37,299
|
)
|
Merchandise cost of products sold
|
136,597
|
|
|
133,346
|
|
|
3,251
|
|
|||
Cardlock cost of products sold
|
22,920
|
|
|
30,141
|
|
|
(7,221
|
)
|
|||
Other cost of products sold
|
15,754
|
|
|
(527
|
)
|
|
16,281
|
|
|||
Cost of products sold
|
$
|
497,114
|
|
|
$
|
522,102
|
|
|
$
|
(24,988
|
)
|
Gross margin
|
$
|
100,507
|
|
|
$
|
111,691
|
|
|
$
|
(11,184
|
)
|
Retail fuel margin per gallon (1)
|
$
|
0.21
|
|
|
$
|
0.29
|
|
|
$
|
(0.08
|
)
|
(1)
|
Retail fuel margin per gallon is a measurement calculated by dividing the difference between retail fuel sales and cost of retail fuel sales for our retail segment by the number of gallons sold. Retail fuel margin per gallon is a measure frequently used in the convenience store industry to measure operating results related to retail fuel sales.
|
(2)
|
Merchandise margin is a measurement calculated by dividing the difference between merchandise sales and merchandise cost of products sold by merchandise sales. Merchandise margin is a measure frequently used in the convenience store industry to measure operating results related to merchandise sales.
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands, except per gallon data)
|
||||||||||
Statement of Operations Data
|
|
|
|
|
|
||||||
Net sales (including intersegment sales)
|
$
|
1,610,033
|
|
|
$
|
1,753,503
|
|
|
$
|
(143,470
|
)
|
Operating costs and expenses:
|
|
|
|
|
|
||||||
Cost of products sold (exclusive of depreciation and amortization)
|
1,328,801
|
|
|
1,469,321
|
|
|
(140,520
|
)
|
|||
Direct operating expenses (exclusive of depreciation and amortization)
|
210,932
|
|
|
199,554
|
|
|
11,378
|
|
|||
Selling, general and administrative expenses
|
31,720
|
|
|
31,369
|
|
|
351
|
|
|||
Gain on disposal of assets, net
|
(235
|
)
|
|
(354
|
)
|
|
119
|
|
|||
Depreciation and amortization
|
17,622
|
|
|
17,257
|
|
|
365
|
|
|||
Total operating costs and expenses
|
1,588,840
|
|
|
1,717,147
|
|
|
(128,307
|
)
|
|||
Operating income
|
$
|
21,193
|
|
|
$
|
36,356
|
|
|
$
|
(15,163
|
)
|
Key Operating Statistics
|
|
|
|
|
|
||||||
Southwest Retail:
|
|
|
|
|
|
||||||
Retail fuel gallons sold
|
295,323
|
|
|
267,102
|
|
|
28,221
|
|
|||
Average retail fuel sales price per gallon, net of excise taxes
|
$
|
1.66
|
|
|
$
|
2.10
|
|
|
$
|
(0.44
|
)
|
Average retail fuel cost per gallon, net of excise taxes
|
1.50
|
|
|
1.89
|
|
|
(0.39
|
)
|
|||
Retail fuel margin per gallon (1)
|
0.16
|
|
|
0.21
|
|
|
(0.05
|
)
|
|||
Merchandise sales
|
$
|
249,187
|
|
|
$
|
234,014
|
|
|
$
|
15,173
|
|
Merchandise margin (2)
|
29.2
|
%
|
|
29.5
|
%
|
|
(0.3
|
)%
|
|||
Operating retail outlets at period end
|
260
|
|
|
261
|
|
|
(1
|
)
|
|||
Cardlock fuel gallons sold
|
48,398
|
|
|
50,013
|
|
|
(1,615
|
)
|
|||
Cardlock fuel margin per gallon
|
$
|
0.123
|
|
|
$
|
0.174
|
|
|
$
|
(0.051
|
)
|
Operating cardlocks at period end
|
51
|
|
|
52
|
|
|
(1
|
)
|
|||
SuperAmerica:
|
|
|
|
|
|
||||||
Retail fuel gallons sold
|
231,087
|
|
|
227,673
|
|
|
3,414
|
|
|||
Retail fuel margin per gallon (1)
|
$
|
0.23
|
|
|
$
|
0.23
|
|
|
$
|
—
|
|
Merchandise sales
|
279,963
|
|
|
279,058
|
|
|
905
|
|
|||
Merchandise margin (2)
|
26.0
|
%
|
|
25.9
|
%
|
|
0.1
|
%
|
|||
Company-operated retail outlets at period end
|
170
|
|
|
165
|
|
|
5
|
|
|||
Franchised retail outlets at period end
|
115
|
|
|
102
|
|
|
13
|
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands, except per gallon data)
|
||||||||||
Net Sales
|
|
|
|
|
|
||||||
Retail fuel sales, net of excise taxes
|
$
|
963,670
|
|
|
$
|
1,115,571
|
|
|
$
|
(151,901
|
)
|
Merchandise sales
|
529,150
|
|
|
513,072
|
|
|
16,078
|
|
|||
Cardlock sales
|
74,302
|
|
|
100,960
|
|
|
(26,658
|
)
|
|||
Other sales
|
42,911
|
|
|
23,900
|
|
|
19,011
|
|
|||
Net sales
|
$
|
1,610,033
|
|
|
$
|
1,753,503
|
|
|
$
|
(143,470
|
)
|
Cost of Products Sold
|
|
|
|
|
|
||||||
Retail fuel cost of products sold, net of excise taxes
|
$
|
862,609
|
|
|
$
|
1,006,717
|
|
|
$
|
(144,108
|
)
|
Merchandise cost of products sold
|
383,680
|
|
|
371,719
|
|
|
11,961
|
|
|||
Cardlock cost of products sold
|
68,101
|
|
|
92,077
|
|
|
(23,976
|
)
|
|||
Other cost of products sold
|
14,411
|
|
|
(1,192
|
)
|
|
15,603
|
|
|||
Cost of products sold
|
$
|
1,328,801
|
|
|
$
|
1,469,321
|
|
|
$
|
(140,520
|
)
|
Gross margin
|
$
|
281,232
|
|
|
$
|
284,182
|
|
|
$
|
(2,950
|
)
|
Retail fuel margin per gallon (1)
|
$
|
0.19
|
|
|
$
|
0.22
|
|
|
$
|
(0.03
|
)
|
(1)
|
Retail fuel margin per gallon is a measurement calculated by dividing the difference between retail fuel sales and cost of retail fuel sales for our retail segment by the number of gallons sold. Retail fuel margin per gallon is a measure frequently used in the convenience store industry to measure operating results related to retail fuel sales.
|
(2)
|
Merchandise margin is a measurement calculated by dividing the difference between merchandise sales and merchandise cost of products sold by merchandise sales. Merchandise margin is a measure frequently used in the convenience store industry to measure operating results related to merchandise sales.
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In millions)
|
||||||||||
Statements of Operations Data
|
|
|
|
|
|
||||||
Revenue (1)
|
$
|
2,149.0
|
|
|
$
|
2,645.2
|
|
|
$
|
(496.2
|
)
|
Operating costs and expenses:
|
|
|
|
|
|
||||||
Cost of products sold (exclusive of depreciation and amortization) (1)
|
1,685.0
|
|
|
1,957.7
|
|
|
(272.7
|
)
|
|||
Direct operating expenses (exclusive of depreciation and amortization)
|
238.3
|
|
|
220.8
|
|
|
17.5
|
|
|||
Selling, general and administrative expenses
|
66.2
|
|
|
62.9
|
|
|
3.3
|
|
|||
Merger-related expenses
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|||
Maintenance turnaround expense
|
26.8
|
|
|
9.4
|
|
|
17.4
|
|
|||
Depreciation and amortization
|
35.0
|
|
|
32.6
|
|
|
2.4
|
|
|||
Income from equity method investment
|
(15.3
|
)
|
|
(12.0
|
)
|
|
(3.3
|
)
|
|||
Other (gain) loss
|
(0.7
|
)
|
|
0.4
|
|
|
(1.1
|
)
|
|||
Total operating costs and expenses
|
2,037.9
|
|
|
2,271.8
|
|
|
(233.9
|
)
|
|||
Operating income
|
111.1
|
|
|
373.4
|
|
|
(262.3
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest and debt expense
|
(18.5
|
)
|
|
(22.5
|
)
|
|
4
|
|
|||
Income before income taxes
|
92.6
|
|
|
350.9
|
|
|
(258.3
|
)
|
|||
Provision for income taxes
|
(3.7
|
)
|
|
(7.3
|
)
|
|
3.6
|
|
|||
Net income
|
$
|
88.9
|
|
|
$
|
343.6
|
|
|
$
|
(254.7
|
)
|
(1)
|
Includes excise taxes of
$323.5 million
and
$296.6 million
for the
nine
months ended
September 30, 2016
and
2015
, respectively.
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In thousands)
|
||||||||||
Net cash provided by operating activities
|
$
|
277,877
|
|
|
$
|
665,664
|
|
|
$
|
(387,787
|
)
|
Net cash used in investing activities
|
(357,079
|
)
|
|
(34,454
|
)
|
|
(322,625
|
)
|
|||
Net cash used in financing activities
|
(427,204
|
)
|
|
(352,799
|
)
|
|
(74,405
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
(506,406
|
)
|
|
$
|
278,411
|
|
|
$
|
(784,817
|
)
|
•
|
Payment of consideration to NTI public unitholders (
$859.9 million
), sourced from cash on hand and from the proceeds of additions to Western's long-term debt;
|
|
Western (1)
|
|
WNRL
|
|
Totals
|
||||||
|
(In thousands)
|
||||||||||
Sustaining
|
$
|
80,000
|
|
|
$
|
7,100
|
|
|
$
|
87,100
|
|
Discretionary
|
150,000
|
|
|
20,000
|
|
|
170,000
|
|
|||
Regulatory
|
30,000
|
|
|
2,900
|
|
|
32,900
|
|
|||
Total
|
$
|
260,000
|
|
|
$
|
30,000
|
|
|
$
|
290,000
|
|
(1)
|
Western's capital expenditure forecast for the full year
2016
is
$260.0 million
, of which
$241.1 million
is for our refining segment,
$14.0 million
for our retail segment and
$4.9 million
for other general projects.
|
|
September 30,
2016 |
|
September 30,
2015 |
||||
|
(In thousands)
|
||||||
Debt, including current maturities:
|
|
|
|
||||
Western obligations:
|
|
|
|
||||
Revolving Credit Facility due 2019
|
$
|
—
|
|
|
$
|
—
|
|
Term Loan - 5.25% Credit Facility due 2020
|
534,875
|
|
|
540,375
|
|
||
6.25% Senior Unsecured Notes due 2021
|
350,000
|
|
|
350,000
|
|
||
Term Loan - 5.50% Credit Facility due 2023
|
498,750
|
|
|
—
|
|
||
Total Western obligations
|
1,383,625
|
|
|
890,375
|
|
||
NTI obligations:
|
|
|
|
||||
Revolving Credit Facility due 2019
|
52,000
|
|
|
—
|
|
||
7.125% Senior Secured Notes due 2020
|
350,000
|
|
|
350,000
|
|
||
Total NTI obligations
|
402,000
|
|
|
350,000
|
|
||
WNRL obligations:
|
|
|
|
||||
Revolving Credit Facility due 2018
|
20,300
|
|
|
—
|
|
||
7.5% Senior Notes due 2023
|
300,000
|
|
|
300,000
|
|
||
Total WNRL obligations
|
320,300
|
|
|
300,000
|
|
||
Less unamortized discount, premium and debt issuance costs
|
50,245
|
|
|
35,284
|
|
||
Long-term debt
|
2,055,680
|
|
|
1,505,091
|
|
||
Equity
|
2,267,446
|
|
|
3,032,495
|
|
||
Total capitalization
|
$
|
4,323,126
|
|
|
$
|
4,537,586
|
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Dividend per Common Share
|
|
Total Payment
(In thousands)
|
||||
First quarter
|
January 6
|
|
January 20
|
|
February 4
|
|
$
|
0.38
|
|
|
$
|
35,601
|
|
Second quarter
|
April 8
|
|
April 18
|
|
May 2
|
|
0.38
|
|
|
34,685
|
|
||
Third quarter
|
July 15
|
|
July 25
|
|
August 9
|
|
0.38
|
|
|
41,202
|
|
||
Fourth quarter (1)
|
October 13
|
|
October 24
|
|
November 8
|
|
0.38
|
|
|
—
|
|
||
Total
|
|
|
|
|
|
|
|
|
$
|
111,488
|
|
(1)
|
The fourth quarter 2016 cash dividend of
$0.38
per common share will result in an estimated aggregate payment of
$41.2 million
.
|
Item 3.
|
Quantitative and Qualitative Disclosure About Market Risk
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
Economic hedging results
|
|
|
|
|
|
|
|
||||||||
Realized hedging gain, net
|
$
|
27,757
|
|
|
$
|
26,949
|
|
|
$
|
46,110
|
|
|
$
|
52,325
|
|
Unrealized hedging gain (loss), net
|
(27,616
|
)
|
|
271
|
|
|
(54,698
|
)
|
|
(42,073
|
)
|
||||
Total hedging gain (loss), net
|
$
|
141
|
|
|
$
|
27,220
|
|
|
$
|
(8,588
|
)
|
|
$
|
10,252
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
|
(In thousands)
|
||||||
Open commodity hedging instruments (barrels)
|
|
|
|
||||
Crude oil differential swaps, net long positions
|
5,622
|
|
|
5,155
|
|
||
Crude oil futures, net short positions
|
(687
|
)
|
|
(562
|
)
|
||
Refined product price and crack spread swaps, net short positions
|
(3,902
|
)
|
|
(5,645
|
)
|
||
Total open commodity hedging instruments, net long (short) positions
|
1,033
|
|
|
(1,052
|
)
|
||
|
|
|
|
||||
Fair value of outstanding contracts, net
|
|
|
|
||||
Other current assets
|
$
|
26,757
|
|
|
$
|
78,125
|
|
Other assets
|
2,851
|
|
|
11,881
|
|
||
Accrued liabilities
|
(4,457
|
)
|
|
(10,273
|
)
|
||
Other long-term liabilities
|
(153
|
)
|
|
—
|
|
||
Fair value of outstanding contracts - unrealized gain, net
|
$
|
24,998
|
|
|
$
|
79,733
|
|
Item 4.
|
Controls and Procedures
|
Exhibit Number
|
|
Exhibit Title
|
|
||
10.1
|
|
Contribution, Conveyance and Assumption Agreement, dated as of September 7, 2016, by and among the Company, St. Paul Park Refining Co. LLC, Western Refining Logistics GP, LLC and Western Refining Logistics, LP (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on September 7, 2016)
|
|
|
|
10.2
|
|
Terminalling, Transportation and Storage Services Agreement, dated September 15, 2016, by and between St. Paul Park Refining Co. LLC and Western Refining Terminals, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on September 20, 2016)
|
|
|
|
10.3*
|
|
Employment Agreement, effective August 15, 2016, by and between Western Refining GP, LLC and Gary R. Dalke.
|
|
|
|
31.1*
|
|
Certification Statement of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.1**
|
|
Certification Statement of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101
|
|
Interactive Data Files
|
*
|
|
Filed herewith.
|
|
|
|
**
|
|
Furnished herewith.
|
|
|
|
***
|
|
Reports filed under the Securities Exchange Act of 1934, as amended, (Form 10-K, Form 10-Q and Form 8-K) are filed under File No. 001-32721.
|
|
|
|
Number
|
|
Exhibit Title
|
|
||
10.1
|
|
Contribution, Conveyance and Assumption Agreement, dated as of September 7, 2016, by and among the Company, St. Paul Park Refining Co. LLC, Western Refining Logistics GP, LLC and Western Refining Logistics, LP (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on September 7, 2016)
|
|
|
|
10.2
|
|
Terminalling, Transportation and Storage Services Agreement, dated September 15, 2016, by and between St. Paul Park Refining Co. LLC and Western Refining Terminals, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on September 20, 2016)
|
|
|
|
31.2*
|
|
Certification Statement of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.2**
|
|
Certification Statement of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101
|
|
Interactive Data Files
|
*
|
|
Filed herewith.
|
|
|
|
**
|
|
Furnished herewith.
|
|
|
|
***
|
|
Reports filed under the Securities Exchange Act of 1934, as amended, (Form 10-K, Form 10-Q and Form 8-K) are filed under File No. 001-35612.
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Karen B. Davis
|
|
Executive Vice President and Chief Financial Officer
|
|
November 2, 2016
|
Karen B. Davis
|
|
(Principal Financial Officer and Duly Authorized Signatory)
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Karen B. Davis
|
|
Executive Vice President and Chief Financial Officer of Northern Tier Energy GP LLC
|
|
November 2, 2016
|
Karen B. Davis
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
Page
|
PART I - FINANCIAL INFORMATION
|
|||
|
ITEM 1.
|
Condensed Consolidated Financial Statements (Unaudited)
|
|
|
|
Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015
|
|
|
|
Condensed Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2016 and 2015
|
|
|
|
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015
|
|
|
|
Notes to Condensed Consolidated Financial Statements
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
14.6
|
|
|
$
|
70.9
|
|
Restricted cash
|
195.0
|
|
|
—
|
|
||
Accounts receivable, net
|
255.9
|
|
|
186.0
|
|
||
Inventories
|
290.5
|
|
|
241.2
|
|
||
Other current assets
|
31.1
|
|
|
21.3
|
|
||
Total current assets
|
787.1
|
|
|
519.4
|
|
||
NON-CURRENT ASSETS
|
|
|
|
||||
Equity method investments
|
82.8
|
|
|
82.1
|
|
||
Property, plant and equipment, net
|
504.3
|
|
|
487.8
|
|
||
Intangible assets
|
33.8
|
|
|
33.8
|
|
||
Other assets
|
14.3
|
|
|
14.2
|
|
||
Total Assets
|
$
|
1,422.3
|
|
|
$
|
1,137.3
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
CURRENT LIABILITIES
|
|
|
|
||||
Accounts payable
|
$
|
331.9
|
|
|
$
|
301.4
|
|
Accrued liabilities
|
74.7
|
|
|
61.8
|
|
||
Total current liabilities
|
406.6
|
|
|
363.2
|
|
||
NON-CURRENT LIABILITIES
|
|
|
|
||||
Long-term debt
|
395.5
|
|
|
342.0
|
|
||
Lease financing obligation
|
9.2
|
|
|
11.1
|
|
||
Other liabilities
|
25.7
|
|
|
27.9
|
|
||
Total liabilities
|
837.0
|
|
|
744.2
|
|
||
Commitments and contingencies
|
|
|
|
||||
EQUITY
|
|
|
|
||||
Partners' capital (92,947,533 and 92,833,486 units issued and outstanding at September 30, 2016 and December 31, 2015, respectively)
|
585.3
|
|
|
392.9
|
|
||
Accumulated other comprehensive income
|
—
|
|
|
0.2
|
|
||
Total equity
|
585.3
|
|
|
393.1
|
|
||
Total Liabilities and Equity
|
$
|
1,422.3
|
|
|
$
|
1,137.3
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
REVENUE
(a)
|
$
|
732.3
|
|
|
$
|
891.6
|
|
|
$
|
2,149.0
|
|
|
$
|
2,645.2
|
|
COSTS, EXPENSES AND OTHER
|
|
|
|
|
|
|
|
||||||||
Cost of sales
(a)
|
584.7
|
|
|
666.6
|
|
|
1,685.0
|
|
|
1,957.7
|
|
||||
Direct operating expenses
|
83.2
|
|
|
75.2
|
|
|
238.3
|
|
|
220.8
|
|
||||
Turnaround and related expenses
|
24.6
|
|
|
7.8
|
|
|
26.8
|
|
|
9.4
|
|
||||
Depreciation and amortization
|
12.1
|
|
|
11.0
|
|
|
35.0
|
|
|
32.6
|
|
||||
Selling, general and administrative expenses
|
20.5
|
|
|
20.5
|
|
|
66.2
|
|
|
62.9
|
|
||||
Merger-related expenses
|
1.5
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
||||
Income from equity method investments
|
(5.3
|
)
|
|
(4.2
|
)
|
|
(15.3
|
)
|
|
(12.0
|
)
|
||||
Other (gain) loss
|
(0.6
|
)
|
|
0.1
|
|
|
(0.7
|
)
|
|
0.4
|
|
||||
OPERATING INCOME
|
11.6
|
|
|
114.6
|
|
|
111.1
|
|
|
373.4
|
|
||||
Interest expense, net
|
(5.8
|
)
|
|
(7.5
|
)
|
|
(18.5
|
)
|
|
(22.5
|
)
|
||||
INCOME BEFORE INCOME TAXES
|
5.8
|
|
|
107.1
|
|
|
92.6
|
|
|
350.9
|
|
||||
Income tax provision
|
(2.2
|
)
|
|
(3.6
|
)
|
|
(3.7
|
)
|
|
(7.3
|
)
|
||||
NET INCOME
|
3.6
|
|
|
103.5
|
|
|
88.9
|
|
|
343.6
|
|
||||
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Post-employment benefit plans gain (loss)
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
0.1
|
|
||||
COMPREHENSIVE INCOME
|
$
|
3.6
|
|
|
$
|
103.5
|
|
|
$
|
88.7
|
|
|
$
|
343.7
|
|
|
|
|
|
|
|
|
|
||||||||
Cash distributions declared per common unit
|
$
|
—
|
|
|
$
|
1.19
|
|
|
$
|
0.56
|
|
|
$
|
2.76
|
|
|
|
|
|
|
|
|
|
||||||||
SUPPLEMENTAL INFORMATION:
|
|
|
|
|
|
|
|
||||||||
(a) Excise taxes included in revenues and cost of sales
|
$
|
104.6
|
|
|
$
|
93.6
|
|
|
$
|
323.5
|
|
|
$
|
296.6
|
|
|
Nine Months Ended
|
||||||
|
September 30, 2016
|
|
September 30, 2015
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
88.9
|
|
|
$
|
343.6
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
35.0
|
|
|
32.6
|
|
||
Non-cash interest expense
|
1.5
|
|
|
1.5
|
|
||
Equity-based compensation expense
|
11.0
|
|
|
7.9
|
|
||
Gain from the change in fair value of outstanding derivatives
|
(6.1
|
)
|
|
(0.3
|
)
|
||
Deferred income tax benefit
|
(0.8
|
)
|
|
—
|
|
||
Equity investment earnings, net of dividends
|
(0.8
|
)
|
|
(6.2
|
)
|
||
Change in lower of cost or market inventory adjustment
|
(61.8
|
)
|
|
(12.2
|
)
|
||
Other
|
(0.5
|
)
|
|
—
|
|
||
Changes in assets and liabilities, net:
|
|
|
|
||||
Accounts receivable
|
(69.9
|
)
|
|
54.1
|
|
||
Inventories
|
11.9
|
|
|
(20.2
|
)
|
||
Other current assets
|
(7.6
|
)
|
|
(3.3
|
)
|
||
Accounts payable and accrued expenses
|
46.2
|
|
|
(81.2
|
)
|
||
Other, net
|
(2.9
|
)
|
|
1.0
|
|
||
Net cash provided by operating activities
|
44.1
|
|
|
317.3
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(99.2
|
)
|
|
(35.2
|
)
|
||
Increase in restricted cash
|
(195.0
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(294.2
|
)
|
|
(35.2
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
||||
Borrowings from revolving credit arrangement
|
339.5
|
|
|
—
|
|
||
Repayments of revolving credit arrangement
|
(287.5
|
)
|
|
—
|
|
||
Proceeds from sale to entity under common control
|
195.0
|
|
|
—
|
|
||
Equity distributions
|
(53.2
|
)
|
|
(255.4
|
)
|
||
Net cash provided by (used in) financing activities
|
193.8
|
|
|
(255.4
|
)
|
||
CASH AND CASH EQUIVALENTS
|
|
|
|
||||
Change in cash and cash equivalents
|
(56.3
|
)
|
|
26.7
|
|
||
Cash and cash equivalents at beginning of period
|
70.9
|
|
|
87.9
|
|
||
Cash and cash equivalents at end of period
|
$
|
14.6
|
|
|
$
|
114.6
|
|
•
|
NTI common unitholders who made a valid “Mixed Election” (as defined in the Merger Agreement), or who made no election, received
$15.00
in cash and
0.2986
of a share of Western common stock for each such NTI common unit held.
|
•
|
NTI common unitholders who made a valid “Cash Election” (as defined in the Merger Agreement) received
$15.357
in cash and
0.28896
of a share of Western common stock as prorated in accordance with the Merger Agreement for each such NTI common unit held.
|
•
|
NTI common unitholders who made a valid “Stock Election” (as defined in the Merger Agreement) received
0.7036
of a share of Western common stock for each such NTI common unit held.
|
•
|
Refining – operates the St. Paul Park, Minnesota refinery, terminal and related assets, NTOT and includes the Company’s interest in MPL and MPLI, and
|
•
|
Retail – comprised of
170
Company operated convenience stores and
115
franchisee operated convenience stores as of
September 30, 2016
, primarily in Minnesota and Wisconsin. The retail segment also includes the operation of NTB.
|
|
September 30,
|
|
December 31,
|
||||
(in millions)
|
2016
|
|
2015
|
||||
Crude oil and refinery feedstocks
|
$
|
158.8
|
|
|
$
|
171.8
|
|
Refined products
|
161.6
|
|
|
162.0
|
|
||
Merchandise
|
22.6
|
|
|
22.8
|
|
||
Supplies and sundry items
|
20.1
|
|
|
19.0
|
|
||
|
363.1
|
|
|
375.6
|
|
||
Lower of cost or market inventory reserve
|
(72.6
|
)
|
|
(134.4
|
)
|
||
Total
|
$
|
290.5
|
|
|
$
|
241.2
|
|
|
Estimated
|
|
September 30,
|
|
December 31,
|
||||
(in millions)
|
Useful Lives
|
|
2016
|
|
2015
|
||||
Land
|
|
|
$
|
7.1
|
|
|
$
|
9.0
|
|
Retail stores and equipment
|
2 - 22 years
|
|
76.6
|
|
|
72.3
|
|
||
Refinery and equipment
|
5 - 24 years
|
|
431.6
|
|
|
457.2
|
|
||
Buildings and building improvements
|
25 years
|
|
13.0
|
|
|
11.7
|
|
||
Software
|
5 years
|
|
18.9
|
|
|
18.9
|
|
||
Vehicles
|
5 years
|
|
5.8
|
|
|
5.6
|
|
||
Other equipment
|
2 - 7 years
|
|
12.0
|
|
|
10.4
|
|
||
Precious metals
|
|
|
10.4
|
|
|
10.2
|
|
||
Assets under construction
|
|
|
119.1
|
|
|
73.3
|
|
||
|
|
|
694.5
|
|
|
668.6
|
|
||
Less: Accumulated depreciation
|
|
|
(190.2
|
)
|
|
(180.8
|
)
|
||
Property, plant and equipment, net
|
|
|
$
|
504.3
|
|
|
$
|
487.8
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||
Crude oil and refined products (thousands of barrels):
|
|
|
|
||
Futures - long
|
—
|
|
|
90
|
|
Futures - short
|
869
|
|
|
933
|
|
Swaps - long
|
4,438
|
|
|
5,155
|
|
Swaps - short
|
750
|
|
|
525
|
|
Forwards - long
|
3,747
|
|
|
4,445
|
|
Forwards - short
|
2,863
|
|
|
2,572
|
|
Natural gas (thousands of MMBTUs):
|
|
|
|
||
Swaps
|
1,598
|
|
|
1,554
|
|
|
Notional Contract Volumes by Year of Maturity
|
||||
|
2016
|
|
2017
|
||
Crude oil and refined products (thousands of barrels):
|
|
|
|
||
Futures - short
|
869
|
|
|
—
|
|
Swaps - long
|
2,159
|
|
|
2,279
|
|
Swaps - short
|
750
|
|
|
—
|
|
Forwards - long
|
3,747
|
|
|
—
|
|
Forwards - short
|
2,863
|
|
|
—
|
|
Natural gas (thousands of MMBTUs):
|
|
|
|
||
Swaps
|
321
|
|
|
1,277
|
|
|
|
|
September 30, 2016
|
||||||
(in millions)
|
Balance Sheet Location
|
|
Assets
|
|
Liabilities
|
||||
Commodity instruments:
|
|
|
|
|
|
||||
Swaps
|
Other current assets
|
|
$
|
4.0
|
|
|
$
|
2.2
|
|
Swaps
|
Accrued liabilities
|
|
0.5
|
|
|
0.9
|
|
||
Swaps
|
Other assets
|
|
1.3
|
|
|
0.8
|
|
||
Futures
|
Accrued liabilities
|
|
—
|
|
|
2.8
|
|
||
Forwards
|
Other current assets
|
|
2.4
|
|
|
—
|
|
||
Forwards
|
Accrued liabilities
|
|
—
|
|
|
2.9
|
|
||
Total
|
|
|
$
|
8.2
|
|
|
$
|
9.6
|
|
|
|
|
|
|
|
||||
|
|
|
December 31, 2015
|
||||||
(in millions)
|
Balance Sheet Location
|
|
Assets
|
|
Liabilities
|
||||
Commodity instruments:
|
|
|
|
|
|
||||
Swaps
|
Accrued liabilities
|
|
$
|
—
|
|
|
$
|
7.9
|
|
Futures
|
Other current assets
|
|
0.4
|
|
|
—
|
|
||
Forwards
|
Other current assets
|
|
1.5
|
|
|
—
|
|
||
Forwards
|
Accrued liabilities
|
|
—
|
|
|
1.5
|
|
||
Total
|
|
|
$
|
1.9
|
|
|
$
|
9.4
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Gain (loss) on the change in fair value of outstanding derivatives
|
$
|
(3.8
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
6.1
|
|
|
$
|
0.3
|
|
Settled derivative gains (losses)
|
(0.8
|
)
|
|
3.9
|
|
|
(13.6
|
)
|
|
1.1
|
|
||||
Total recognized gain (loss)
|
$
|
(4.6
|
)
|
|
$
|
2.6
|
|
|
$
|
(7.5
|
)
|
|
$
|
1.4
|
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) recognized in cost of sales
|
$
|
(4.4
|
)
|
|
$
|
3.4
|
|
|
$
|
(8.2
|
)
|
|
$
|
3.3
|
|
Gain (loss) recognized in operating expenses
|
(0.2
|
)
|
|
(0.8
|
)
|
|
0.7
|
|
|
(1.9
|
)
|
||||
Total recognized net gain (loss) on derivatives
|
$
|
(4.6
|
)
|
|
$
|
2.6
|
|
|
$
|
(7.5
|
)
|
|
$
|
1.4
|
|
•
|
NTI common unitholders who made a valid “Mixed Election” (as defined in the Merger Agreement), or who made no election, received
$15.00
in cash and
0.2986
of a share of Western common stock for each such NTI common unit held.
|
•
|
NTI common unitholders who made a valid “Cash Election” (as defined in the Merger Agreement) received
$15.357
in cash and
0.28896
of a share of Western common stock as prorated in accordance with the Merger Agreement for each such NTI common unit held.
|
•
|
NTI common unitholders who made a valid “Stock Election” (as defined in the Merger Agreement) received
0.7036
of a share of Western common stock for each such NTI common unit held.
|
Date Declared
|
|
Date Paid
|
|
Common Units and equivalents at record date (in millions)
|
|
Distribution per common unit and equivalent
|
|
Total Distribution (in millions)
|
||||
2015 Distributions:
|
|
|
|
|
|
|
|
|
||||
February 5, 2015
|
|
February 27, 2015
|
|
93.7
|
|
$
|
0.49
|
|
|
$
|
45.9
|
|
May 5, 2015
|
|
May 29, 2015
|
|
93.7
|
|
1.08
|
|
|
100.8
|
|
||
August 4, 2015
|
|
August 28, 2015
|
|
93.7
|
|
1.19
|
|
|
111.3
|
|
||
November 3, 2015
|
|
November 25, 2015
|
|
93.7
|
|
1.04
|
|
|
97.3
|
|
||
Total distributions paid during 2015
|
|
|
|
$
|
3.80
|
|
|
$
|
355.3
|
|
||
2016 Distributions:
|
|
|
|
|
|
|
|
|
||||
February 3, 2016
|
|
February 19, 2016
|
|
94.2
|
|
$
|
0.38
|
|
|
$
|
36.0
|
|
June 13, 2016
|
|
June 23, 2016
|
|
93.0
|
|
0.18
|
|
|
16.7
|
|
||
Total distributions paid during 2016
|
|
|
|
$
|
0.56
|
|
|
$
|
52.7
|
|
(in millions)
|
Partners' Capital
|
|
Accumulated Other Comprehensive Income
|
|
Total Partners' Equity
|
||||||
Balance at December 31, 2015
|
$
|
392.9
|
|
|
$
|
0.2
|
|
|
$
|
393.1
|
|
Net income
|
88.9
|
|
|
—
|
|
|
88.9
|
|
|||
Asset sale to entity under common control
|
146.1
|
|
|
—
|
|
|
146.1
|
|
|||
Distributions
|
(52.7
|
)
|
|
—
|
|
|
(52.7
|
)
|
|||
Equity-based compensation expense
|
10.4
|
|
|
—
|
|
|
10.4
|
|
|||
Other
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Amortization of net prior service cost and deferred loss on defined benefit plans
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|||
Balance at September 30, 2016
|
$
|
585.3
|
|
|
$
|
—
|
|
|
$
|
585.3
|
|
•
|
Level 1 – Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
|
•
|
Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
|
•
|
Level 3 – Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management’s best estimate of fair value.
|
|
Balance at
|
|
Quoted prices in active markets
|
|
Significant other observable inputs
|
|
Unobservable inputs
|
||||||||
(in millions)
|
September 30, 2016
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
14.6
|
|
|
$
|
14.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
195.0
|
|
|
195.0
|
|
|
—
|
|
|
—
|
|
||||
Other current assets
|
|
|
|
|
|
|
|
||||||||
Derivative asset - current
|
4.1
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
||||
Other assets
|
|
|
|
|
|
|
|
||||||||
Derivative asset - long-term
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
||||
|
$
|
214.3
|
|
|
$
|
209.6
|
|
|
$
|
4.7
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
LIABILITIES
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liability - current
|
$
|
6.1
|
|
|
$
|
—
|
|
|
$
|
6.1
|
|
|
$
|
—
|
|
|
$
|
6.1
|
|
|
$
|
—
|
|
|
$
|
6.1
|
|
|
$
|
—
|
|
|
Balance at
|
|
Quoted prices in active markets
|
|
Significant other observable inputs
|
|
Unobservable inputs
|
||||||||
(in millions)
|
December 31, 2015
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
70.9
|
|
|
$
|
70.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other current assets
|
|
|
|
|
|
|
|
||||||||
Derivative asset - current
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
||||
|
$
|
72.8
|
|
|
$
|
70.9
|
|
|
$
|
1.9
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
LIABILITIES
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liability - current
|
$
|
9.4
|
|
|
$
|
—
|
|
|
$
|
9.4
|
|
|
$
|
—
|
|
|
$
|
9.4
|
|
|
$
|
—
|
|
|
$
|
9.4
|
|
|
$
|
—
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||
(in millions)
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
2020 Secured Notes
|
$
|
350.0
|
|
|
$
|
360.5
|
|
|
$
|
350.0
|
|
|
$
|
360.5
|
|
Outstanding borrowings on ABL Facility
|
52.0
|
|
|
52.0
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
402.0
|
|
|
$
|
412.5
|
|
|
$
|
350.0
|
|
|
$
|
360.5
|
|
|
Nine Months Ended
|
||||||
(in millions)
|
September 30, 2016
|
|
September 30, 2015
|
||||
Asset retirement obligation balance at beginning of period
|
$
|
2.4
|
|
|
$
|
2.4
|
|
Costs incurred to remediate
|
(0.2
|
)
|
|
(0.3
|
)
|
||
Accretion expense
|
0.2
|
|
|
0.2
|
|
||
Asset retirement obligation balance at end of period
|
$
|
2.4
|
|
|
$
|
2.3
|
|
|
Number of
|
|
Weighted
|
|
Weighted
|
||||
|
restricted common units
|
|
Average Grant
|
|
Average Term
|
||||
|
(in thousands)
|
|
Date Value
|
|
Until Maturity
|
||||
Nonvested at December 31, 2015
|
191.5
|
|
|
$
|
24.75
|
|
|
1.0
|
|
Forfeited
|
(12.3
|
)
|
|
$
|
25.57
|
|
|
—
|
|
Vested
|
(34.5
|
)
|
|
$
|
26.83
|
|
|
—
|
|
Exchanged due to merger
|
(144.7
|
)
|
|
$
|
24.18
|
|
|
0.5
|
|
Nonvested at September 30, 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
Number of phantom common units
|
|
Weighted
|
|
Weighted
|
||||||||||
|
(in thousands)
|
|
Average Grant
|
|
Average Term
|
||||||||||
|
Service-Based
|
|
Performance-Based
|
|
Total
|
|
Date Value
|
|
Until Maturity
|
||||||
Nonvested at December 31, 2015
|
581.9
|
|
|
260.7
|
|
|
842.6
|
|
|
$
|
24.00
|
|
|
1.5
|
|
Awarded
|
381.0
|
|
|
163.6
|
|
|
544.6
|
|
|
$
|
25.87
|
|
|
2.5
|
|
Incremental performance units
|
—
|
|
|
231.8
|
|
|
231.8
|
|
|
$
|
27.82
|
|
|
2.0
|
|
Forfeited
|
(16.5
|
)
|
|
(19.1
|
)
|
|
(35.6
|
)
|
|
$
|
25.36
|
|
|
—
|
|
Vested
|
(269.2
|
)
|
|
(1.8
|
)
|
|
(271.0
|
)
|
|
$
|
24.10
|
|
|
—
|
|
Exchanged due to merger
|
(677.2
|
)
|
|
(635.2
|
)
|
|
(1,312.4
|
)
|
|
$
|
25.45
|
|
|
2.0
|
|
Nonvested at September 30, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
Nine Months Ended
|
||||||
(in millions)
|
September 30, 2016
|
|
September 30, 2015
|
||||
Net cash from operating activities included:
|
|
|
|
||||
Interest paid
|
$
|
15.2
|
|
|
$
|
15.6
|
|
Income taxes paid
|
0.1
|
|
|
2.7
|
|
||
|
|
|
|
||||
Noncash investing activities included:
|
|
|
|
||||
Capital expenditures included in accounts payable
|
$
|
15.6
|
|
|
$
|
9.6
|
|
PP&E derecognized from sale leaseback continuing involvement release
|
2.8
|
|
|
1.8
|
|
||
Book value of tank and terminal related assets sold to WNRL
|
48.9
|
|
|
—
|
|
||
Common equity investment in WNRL
|
14.0
|
|
|
—
|
|
||
PP&E additions resulting from a capital lease
|
0.3
|
|
|
—
|
|
||
|
|
|
|
||||
Noncash financing activities included:
|
|
|
|
||||
Distributions accrued on unvested equity awards
|
$
|
—
|
|
|
$
|
2.6
|
|
Increase in equity due to proceeds received exceeding book value of assets sold to WNRL
|
146.1
|
|
|
—
|
|
•
|
Refining – operates the St. Paul Park, Minnesota refinery, terminal, NTOT and related assets, and includes the Company’s interest in MPL and MPLI, and
|
•
|
Retail – operates
170
convenience stores primarily in Minnesota and Wisconsin. The retail segment also includes the operations of NTB and SAF.
|
|
Three Months Ended September 30, 2016
|
||||||||||||||
(in millions)
|
Refining
|
|
Retail
|
|
Other
|
|
Total
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Customer
|
$
|
452.7
|
|
|
$
|
279.6
|
|
|
$
|
—
|
|
|
$
|
732.3
|
|
Intersegment
|
154.1
|
|
|
—
|
|
|
—
|
|
|
154.1
|
|
||||
Segment revenues
|
606.8
|
|
|
279.6
|
|
|
—
|
|
|
886.4
|
|
||||
Elimination of intersegment revenues
|
—
|
|
|
—
|
|
|
(154.1
|
)
|
|
(154.1
|
)
|
||||
Total revenues
|
$
|
606.8
|
|
|
$
|
279.6
|
|
|
$
|
(154.1
|
)
|
|
$
|
732.3
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations
|
$
|
14.4
|
|
|
$
|
4.4
|
|
|
$
|
(7.2
|
)
|
|
$
|
11.6
|
|
Income from equity method investment
|
$
|
5.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.3
|
|
Depreciation and amortization
|
$
|
9.7
|
|
|
$
|
2.2
|
|
|
$
|
0.2
|
|
|
$
|
12.1
|
|
Capital expenditures
|
$
|
42.8
|
|
|
$
|
1.6
|
|
|
$
|
0.1
|
|
|
$
|
44.5
|
|
|
Three Months Ended September 30, 2015
|
||||||||||||||
(in millions)
|
Refining
|
|
Retail
|
|
Other
|
|
Total
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Customer
|
$
|
584.0
|
|
|
$
|
307.6
|
|
|
$
|
—
|
|
|
$
|
891.6
|
|
Intersegment
|
178.3
|
|
|
—
|
|
|
—
|
|
|
178.3
|
|
||||
Segment revenues
|
762.3
|
|
|
307.6
|
|
|
—
|
|
|
1,069.9
|
|
||||
Elimination of intersegment revenues
|
—
|
|
|
—
|
|
|
(178.3
|
)
|
|
(178.3
|
)
|
||||
Total revenues
|
$
|
762.3
|
|
|
$
|
307.6
|
|
|
$
|
(178.3
|
)
|
|
$
|
891.6
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations
|
$
|
111.1
|
|
|
$
|
8.6
|
|
|
$
|
(5.1
|
)
|
|
$
|
114.6
|
|
Income from equity method investment
|
$
|
4.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.2
|
|
Depreciation and amortization
|
$
|
8.8
|
|
|
$
|
2.0
|
|
|
$
|
0.2
|
|
|
$
|
11.0
|
|
Capital expenditures
|
$
|
16.4
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
17.5
|
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||
(in millions)
|
Refining
|
|
Retail
|
|
Other
|
|
Total
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Customer
|
$
|
1,373.3
|
|
|
$
|
775.7
|
|
|
$
|
—
|
|
|
$
|
2,149.0
|
|
Intersegment
|
419.0
|
|
|
—
|
|
|
—
|
|
|
419.0
|
|
||||
Segment revenues
|
1,792.3
|
|
|
775.7
|
|
|
—
|
|
|
2,568.0
|
|
||||
Elimination of intersegment revenues
|
—
|
|
|
—
|
|
|
(419.0
|
)
|
|
(419.0
|
)
|
||||
Total revenues
|
$
|
1,792.3
|
|
|
$
|
775.7
|
|
|
$
|
(419.0
|
)
|
|
$
|
2,149.0
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations
|
$
|
124.6
|
|
|
$
|
9.2
|
|
|
$
|
(22.7
|
)
|
|
$
|
111.1
|
|
Income from equity method investment
|
$
|
15.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15.3
|
|
Depreciation and amortization
|
$
|
27.9
|
|
|
$
|
6.5
|
|
|
$
|
0.6
|
|
|
$
|
35.0
|
|
Capital expenditures
|
$
|
95.7
|
|
|
$
|
3.2
|
|
|
$
|
0.3
|
|
|
$
|
99.2
|
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||
(in millions)
|
Refining
|
|
Retail
|
|
Other
|
|
Total
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Customer
|
$
|
1,789.7
|
|
|
$
|
855.5
|
|
|
$
|
—
|
|
|
$
|
2,645.2
|
|
Intersegment
|
502.0
|
|
|
—
|
|
|
—
|
|
|
502.0
|
|
||||
Segment revenues
|
2,291.7
|
|
|
855.5
|
|
|
—
|
|
|
3,147.2
|
|
||||
Elimination of intersegment revenues
|
—
|
|
|
—
|
|
|
(502.0
|
)
|
|
(502.0
|
)
|
||||
Total revenues
|
$
|
2,291.7
|
|
|
$
|
855.5
|
|
|
$
|
(502.0
|
)
|
|
$
|
2,645.2
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations
|
$
|
374.7
|
|
|
$
|
16.9
|
|
|
$
|
(18.2
|
)
|
|
$
|
373.4
|
|
Income from equity method investment
|
$
|
12.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12.0
|
|
Depreciation and amortization
|
$
|
26.3
|
|
|
$
|
5.7
|
|
|
$
|
0.6
|
|
|
$
|
32.6
|
|
Capital expenditures
|
$
|
30.7
|
|
|
$
|
4.2
|
|
|
$
|
0.3
|
|
|
$
|
35.2
|
|
(in millions)
|
Refining
|
|
Retail
|
|
Other
|
|
Total
|
||||||||
At September 30, 2016
|
$
|
1,266.8
|
|
|
$
|
132.0
|
|
|
$
|
23.5
|
|
|
$
|
1,422.3
|
|
|
|
|
|
|
|
|
|
||||||||
At December 31, 2015
|
$
|
917.4
|
|
|
$
|
138.7
|
|
|
$
|
81.2
|
|
|
$
|
1,137.3
|
|
•
|
NTI common unitholders who made a valid “Mixed Election” (as defined in the Merger Agreement), or who made no election, received
$15.00
in cash and
0.2986
of a share of Western Common Stock for each such NTI common unit held.
|
•
|
NTI common unitholders who made a valid “Cash Election” (as defined in the Merger Agreement) received
$15.357
in cash and
0.28896
of a share of Western Common Stock, prorated in accordance with the Merger Agreement for each such NTI common unit held.
|
•
|
NTI common unitholders who made a valid “Stock Election” (as defined in the Merger Agreement) received
0.7036
of a share of Western Common Stock for each such NTI common unit held.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Beginning liability for merger and reorganization costs
|
|
$
|
0.4
|
|
|
$
|
0.5
|
|
|
$
|
0.2
|
|
|
$
|
0.8
|
|
Third-party professional service fees
|
|
0.2
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
||||
Reorganization and related personnel costs incurred during period
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
||||
Cash payments to third-party professional service providers
|
|
(0.4
|
)
|
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
||||
Cash payments made to severed employees
|
|
(0.4
|
)
|
|
(0.1
|
)
|
|
(0.6
|
)
|
|
(0.4
|
)
|
||||
Ending liability for merger and reorganization costs
|
|
$
|
1.1
|
|
|
$
|
0.4
|
|
|
$
|
1.1
|
|
|
$
|
0.4
|
|
1 Year Northern Tier Energy LP Common Units Representing Limited Partner Interests (delisted) Chart |
1 Month Northern Tier Energy LP Common Units Representing Limited Partner Interests (delisted) Chart |
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