• Net income of $19.9 million; EBITDA of $36.1 million, up 27% versus Q1 2016
• Increased quarterly distribution to $0.4525 per unit; 13th consecutive increase since IPO
• Distributable cash flow of $28.1 million, up 25% compared to Q1 2016
EL PASO, Texas, May 02, 2017 (GLOBE NEWSWIRE) -- Western Refining Logistics, LP (NYSE:WNRL) today reported first
quarter 2017 net income attributable to limited partners of $19.9 million, or $0.22 per common limited partner unit, which
compares to $14.0 million and $0.28, respectively, in the first quarter 2016. First quarter 2017 EBITDA was $36.1 million
and distributable cash flow was $28.1 million; this compares to $28.5 million and $22.5 million, respectively, for
the first quarter 2016.
"WNRL delivered an increase in net income, EBITDA, distributable cash flow and its 13th consecutive quarter of
distribution growth driven primarily by increases in Delaware Basin mainline movements and the recent acquisition of the St. Paul
Park logistics assets," said Jeff Stevens, President and Chief Executive Officer of WNRL's general partner. "Our Wholesale
fuel business had a good quarter due to strong margins. We also saw strong growth in our crude oil and asphalt trucking volumes in
the Delaware."
On April 28, 2017, the board of directors declared a quarterly cash distribution for the first quarter 2017
of $0.4525 per unit, or $1.81 per unit, on an annualized basis. This distribution represents a 15% compound annual growth rate
since WNRL's October 2013 initial public offering.
Stevens concluded, “Delaware Basin rig activity and crude oil production growth continues to be positive. We
believe we are well-positioned to increase net income, EBITDA and distributions as crude oil production increases and we fully
leverage our logistics assets.”
Conference Call Information
The Company issued a press release on April 5, 2017, announcing an earnings conference call on May 2, 2017, to
discuss results for the first quarter ended March 31, 2017. On April 17, 2017, Tesoro Logistics LP (“TLLP”), filed a Schedule
13D, indicating that management of TLLP had been authorized to consider, discuss and endeavor to negotiate a merger, consolidation
or combination of assets held by and securities issued by WNRL. Consequently, WNRL will not be hosting a conference call.
About Western Refining Logistics, LP
Western Refining Logistics, LP is principally a fee-based, growth-oriented master limited partnership formed by Western
Refining, Inc. (NYSE:WNR) to own, operate, develop and acquire terminals, storage tanks, pipelines and other logistics assets
related to the terminalling, transportation and storage of crude oil and refined products. Headquartered in El Paso, Texas, Western
Refining Logistics, LP's assets include approximately 705 miles of pipelines, approximately 12.4 million barrels of active
storage capacity, distribution of wholesale petroleum products and crude oil and asphalt trucking.
More information about Western Refining Logistics, LP is available at www.wnrl.com.
Non-GAAP Financial Measures
In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP),
management utilizes non-GAAP measures to facilitate comparisons of past performance. This press release and supporting schedules
include the non-GAAP measures Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Distributable Cash Flow.
We believe certain investors and financial analysts use EBITDA and Distributable Cash Flow to evaluate WNRL’s financial performance
between periods and to compare WNRL's performance to certain competitors. We believe certain investors and financial analysts use
Distributable Cash Flow to determine the amount of cash available for distribution to our unitholders. These additional financial
measures are reconciled from the most directly comparable measures as reported in accordance with GAAP and should be viewed in
addition to, and not in lieu of, financial information that we report in accordance with GAAP.
Cautionary Statement on Forward-Looking Statements
This press release contains forward-looking statements. The forward-looking statements reflect WNRL’s current expectation
regarding future events, results or outcomes. The forward-looking statements contained herein include statements related to, among
other things: the continued growth of Delaware Basin rig activity and crude oil production; WNRL’s ability to increase net income,
EBITDA and distributions; increases in crude oil production; WNRL’s ability to fully leverage its logistics assets; and the
consideration and discussion of a merger, consolidation or combination of assets held by and securities issued by WNRL with Tesoro
Logistics LP. These statements are subject to the general risks inherent in WNRL’s business. These expectations may or may
not be realized and some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition,
WNRL’s business and operations involve numerous risks and uncertainties, many of which are beyond its control, which could result
in WNRL’s expectations not being realized, or otherwise materially affect WNRL’s financial condition, results of operations, and
cash flows. Additional information relating to the uncertainties affecting WNRL’s business is contained in its filings with the
Securities and Exchange Commission to which you are referred. The forward-looking statements are only as of the date made. Except
as required by law, WNRL does not undertake any obligation to (and expressly disclaims any obligation to) update any
forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the
occurrence of unanticipated events.
Results of Operations
The following tables set forth WNRL's summary historical financial and operating data for the periods indicated below:
|
Three Months Ended |
|
March 31, |
|
2017 |
|
2016 |
|
(Unaudited) |
|
(In thousands, except per unit
data) |
Revenues: |
|
|
|
Fee based: |
|
|
|
Affiliate |
$ |
65,477 |
|
|
$ |
51,928 |
|
Third-party |
619 |
|
|
690 |
|
Sales based: |
|
|
|
Affiliate |
125,067 |
|
|
97,529 |
|
Third-party |
413,529 |
|
|
317,892 |
|
Total revenues |
604,692 |
|
|
468,039 |
|
Operating costs and expenses: |
|
|
|
Cost of products sold: |
|
|
|
Affiliate |
122,699 |
|
|
95,149 |
|
Third-party |
394,600 |
|
|
300,441 |
|
Operating and maintenance expenses |
44,847 |
|
|
44,658 |
|
Selling, general and administrative expenses |
6,743 |
|
|
5,364 |
|
Gain on disposal of assets, net |
(291 |
) |
|
(99 |
) |
Depreciation and amortization |
9,732 |
|
|
9,338 |
|
Total operating costs and expenses |
578,330 |
|
|
454,851 |
|
Operating income |
26,362 |
|
|
13,188 |
|
Other income (expense): |
|
|
|
Interest and debt expense |
(6,608 |
) |
|
(7,052 |
) |
Other income (expense), net |
22 |
|
|
(118 |
) |
Net income before income taxes |
19,776 |
|
|
6,018 |
|
Benefit (provision) for income taxes |
110 |
|
|
(261 |
) |
Net income |
19,886 |
|
|
5,757 |
|
Less net loss attributable to General Partner |
— |
|
|
(8,250 |
) |
Net income attributable to limited partners |
$ |
19,886 |
|
|
$ |
14,007 |
|
|
|
|
|
Net income per limited partner unit: |
|
|
|
Common - basic |
$ |
0.22 |
|
|
$ |
0.28 |
|
Common - diluted |
0.22 |
|
|
0.28 |
|
Subordinated - basic and diluted |
0.51 |
|
|
0.28 |
|
|
|
|
|
Weighted average limited partner units outstanding: |
|
|
|
Common - basic |
45,681 |
|
|
24,448 |
|
Common - diluted |
45,688 |
|
|
24,454 |
|
Subordinated - basic and diluted |
15,207 |
|
|
22,811 |
|
|
Three Months Ended |
|
March 31, |
|
2017 |
|
2016 |
|
(Unaudited) |
|
(In thousands) |
Cash Flow Data |
|
|
|
Net cash provided by (used in): |
|
|
|
Operating activities |
$ |
43,346 |
|
|
$ |
19,013 |
|
Investing activities |
(5,107 |
) |
|
(8,237 |
) |
Financing activities |
(29,593 |
) |
|
(26,728 |
) |
Capital expenditures |
5,470 |
|
|
8,356 |
|
Other Data |
|
|
|
EBITDA (1) |
$ |
36,116 |
|
|
$ |
28,464 |
|
Distributable cash flow (1) |
28,075 |
|
|
22,528 |
|
Balance Sheet Data (at end of period) |
|
|
|
Cash and cash equivalents |
$ |
23,298 |
|
|
$ |
28,653 |
|
Property, plant and equipment, net |
410,154 |
|
|
432,750 |
|
Total assets |
579,478 |
|
|
596,048 |
|
Total liabilities |
490,149 |
|
|
561,595 |
|
Division equity |
— |
|
|
108,138 |
|
Partners' capital |
89,329 |
|
|
(73,685 |
) |
Total liabilities, division equity and partners' capital |
579,478 |
|
|
596,048 |
|
(1) We define EBITDA as earnings before interest and debt expense, provision for income taxes and depreciation and amortization.
We define Distributable Cash Flow as EBITDA plus the change in deferred revenues, less interest accruals, income taxes paid,
maintenance capital expenditures and distributions declared on our TexNew Mex units. The GAAP performance measure most directly
comparable to EBITDA is net income. The GAAP liquidity measure most directly comparable to EBITDA and distributable cash flow is
net cash provided by operating activities. These non-GAAP financial measures should not be considered alternatives to GAAP net
income or net cash provided by operating activities.
EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of
our results as reported under GAAP. Some of these limitations are:
• EBITDA does not reflect our cash expenditures or future requirements for capital
expenditures or contractual commitments;
• EBITDA does not reflect the interest expense or the cash requirements necessary to
service interest or principal payments on our debt;
• EBITDA does not reflect changes in, or cash requirements for, our working capital
needs; and
• EBITDA, as we calculate it, may differ from the EBITDA calculations of our
affiliates or other companies in our industry, thereby limiting its usefulness as a comparative measure.
EBITDA and Distributable Cash Flow are used as supplemental financial measures by management and by external users of our
financial statements, such as investors and commercial banks, to assess:
• our operating performance and liquidity as compared to those of other companies in
the midstream energy industry, without regard to financial methods, historical cost basis or capital structure;
• the ability of our assets to generate sufficient cash to make distributions to our
unitholders;
• our ability to incur and service debt and fund capital expenditures; and
• the viability of acquisitions and other capital expenditure projects and the
returns on investment of various investment opportunities.
Distributable Cash Flow is a standard used by the investment community with respect to publicly traded partnerships because the
value of a partnership unit is, in part, measured by its yield. Yield is based on the amount of cash distributions a partnership
can pay to a unitholder. Although distributable cash flow is a liquidity measure, it is presented in this reconciliation to net
income as supplemental information.
We believe that the presentation of these non-GAAP measures provides useful information to investors in assessing our financial
condition and results of operations. These non-GAAP measures should not be considered as alternatives to net income or any other
measure of financial performance presented in accordance with GAAP. EBITDA excludes some, but not all, items that affect net income
attributable to limited partners. These non-GAAP measures may vary from those of other companies. As a result, EBITDA and
Distributable Cash Flow as presented herein may not be comparable to similarly titled measures of other companies.
The calculation of EBITDA and Distributable Cash Flow includes the results of operations for the St. Paul Park Logistics Assets
subsequent to the St. Paul Park Logistics Transaction for the three months ended March 31, 2017. The results of operations for
the St. Paul Park Logistics Assets are excluded from the EBITDA and Distributable Cash Flow calculations for the comparable periods
in the prior year because a retrospective adjustment of these performance measures is not a representative measure of performance
results.
The following tables reconcile net income attributable to limited partners and net cash provided by operating activities to
EBITDA and Distributable Cash Flow for the three months ended March 31, 2017 and 2016, respectively.
|
Three Months Ended |
|
March 31, |
|
2017 |
|
2016 |
|
(Unaudited) |
|
(In thousands) |
Net income attributable to limited partners |
$ |
19,886 |
|
|
$ |
14,007 |
|
Interest and debt expense |
6,608 |
|
|
7,052 |
|
Provision (benefit) for income taxes |
(110 |
) |
|
261 |
|
Depreciation and amortization |
9,732 |
|
|
7,144 |
|
EBITDA |
36,116 |
|
|
28,464 |
|
|
|
|
|
Change in deferred revenues |
364 |
|
|
2,232 |
|
Interest accruals |
(6,132 |
) |
|
(6,709 |
) |
Income taxes paid |
(89 |
) |
|
(30 |
) |
Maintenance capital expenditures |
(2,184 |
) |
|
(1,429 |
) |
Distributable cash flow |
$ |
28,075 |
|
|
$ |
22,528 |
|
|
Three Months Ended |
|
March 31, |
|
2017 |
|
2016 |
|
(In thousands) |
Net cash provided by operating activities |
$ |
43,346 |
|
|
$ |
19,013 |
|
Changes in operating assets and liabilities |
(12,419 |
) |
|
(3,150 |
) |
Interest and debt expense |
6,608 |
|
|
7,052 |
|
Unit-based compensation expense |
(635 |
) |
|
(524 |
) |
Amortization of loan fees and original issue discount |
(492 |
) |
|
(342 |
) |
Deferred income taxes |
(488 |
) |
|
— |
|
Gain on disposal of assets, net |
291 |
|
|
99 |
|
Provision (benefit) for income taxes |
(110 |
) |
|
261 |
|
Reserve for doubtful accounts |
15 |
|
|
(1 |
) |
EBITDA attributable to General Partner (1) |
— |
|
|
6,056 |
|
EBITDA |
36,116 |
|
|
28,464 |
|
|
|
|
|
Change in deferred revenues |
364 |
|
|
2,232 |
|
Interest accruals |
(6,132 |
) |
|
(6,709 |
) |
Income taxes paid |
(89 |
) |
|
(30 |
) |
Maintenance capital expenditures |
(2,184 |
) |
|
(1,429 |
) |
Distributable cash flow |
$ |
28,075 |
|
|
$ |
22,528 |
|
(1) The calculation of EBITDA attributable to General Partner is as follows:
|
Three Months Ended |
|
March
31, |
|
2016 |
|
(In thousands) |
Net loss attributable to General Partner |
$ |
(8,250 |
) |
Depreciation and amortization |
2,194 |
|
EBITDA attributable to General Partner |
$ |
(6,056 |
) |
Logistics Segment
|
Three Months Ended |
|
March 31, |
|
2017 |
|
2016 |
|
(Unaudited) |
|
(In thousands, except key operating
statistics) |
Statement of Operations Data: |
|
|
|
Fee based revenues: |
|
|
|
Affiliate |
$ |
49,637 |
|
|
$ |
40,916 |
|
Third-party |
619 |
|
|
690 |
|
Total revenues |
50,256 |
|
|
41,606 |
|
Operating costs and expenses: |
|
|
|
Operating and maintenance expenses |
25,828 |
|
|
26,757 |
|
General and administrative expenses |
807 |
|
|
781 |
|
Loss on disposal of assets, net |
10 |
|
|
— |
|
Depreciation and amortization |
8,581 |
|
|
8,155 |
|
Total operating costs and expenses |
35,226 |
|
|
35,693 |
|
Operating income |
$ |
15,030 |
|
|
$ |
5,913 |
|
Key Operating Statistics: |
|
|
|
Pipeline and gathering (bpd): |
|
|
|
Mainline movements (1): |
|
|
|
Permian/Delaware Basin system |
53,136 |
|
|
49,486 |
|
Four Corners system |
47,480 |
|
|
52,467 |
|
TexNew Mex system |
4,402 |
|
|
12,544 |
|
Gathering (truck offloading): |
|
|
|
Permian/Delaware Basin system |
14,605 |
|
|
20,533 |
|
Four Corners system |
6,617 |
|
|
12,761 |
|
Pipeline gathering and injection system: |
|
|
|
Permian/Delaware Basin system |
11,972 |
|
|
7,885 |
|
Four Corners system |
24,068 |
|
|
24,437 |
|
TexNew Mex system |
5,336 |
|
|
— |
|
Tank storage capacity (bbls) (2) |
959,087 |
|
|
828,202 |
|
Terminalling, transportation and storage: |
|
|
|
Shipments into and out of storage (bpd) (includes asphalt) |
584,476 |
|
|
388,258 |
|
Terminal storage capacity (bbls) (2) |
11,376,734 |
|
|
7,385,543 |
|
(1) Some barrels of crude oil in route to Western's Gallup refinery and Permian/Delaware Basin are transported on more than one
of our mainlines. Mainline movements for the Four Corners and Delaware Basin systems include each barrel transported on each
mainline.
(2) Storage shell capacities represent weighted-average capacities for the periods indicated.
Wholesale Segment
|
Three Months Ended |
|
March 31, |
|
2017 |
|
2016 |
|
(Unaudited) |
|
(In thousands, except key operating
stats) |
Statement of Operations Data: |
|
|
|
Fee based revenues (1): |
|
|
|
Affiliate |
$ |
15,840 |
|
|
$ |
11,012 |
|
Sales based revenues (1): |
|
|
|
Affiliate |
125,067 |
|
|
97,529 |
|
Third-party |
413,529 |
|
|
317,892 |
|
Total revenues |
554,436 |
|
|
426,433 |
|
Operating costs and expenses: |
|
|
|
Cost of products sold: |
|
|
|
Affiliate |
122,699 |
|
|
95,149 |
|
Third-party |
394,600 |
|
|
300,441 |
|
Operating and maintenance expenses |
19,019 |
|
|
17,901 |
|
Selling, general and administrative expenses |
2,294 |
|
|
1,905 |
|
Gain on disposal of assets, net |
(301 |
) |
|
(99 |
) |
Depreciation and amortization |
1,151 |
|
|
1,183 |
|
Total operating costs and expenses |
539,462 |
|
|
416,480 |
|
Operating income |
$ |
14,974 |
|
|
$ |
9,953 |
|
Key Operating Statistics: |
|
|
|
Fuel gallons sold (in thousands) |
302,050 |
|
|
314,943 |
|
Fuel gallons sold to retail (included in fuel gallons sold above) (in
thousands) |
79,113 |
|
|
79,841 |
|
Fuel margin per gallon (2) |
$ |
0.042 |
|
|
$ |
0.028 |
|
Lubricant gallons sold (in thousands) |
1,321 |
|
|
2,201 |
|
Lubricant margin per gallon (3) |
$ |
1.08 |
|
|
$ |
0.69 |
|
Asphalt trucking volume (bpd) |
5,205 |
|
|
— |
|
Crude oil trucking volume (bpd) |
48,894 |
|
|
35,111 |
|
Average crude oil revenue per barrel |
$ |
2.26 |
|
|
$ |
2.24 |
|
(1) All wholesale fee based revenues are generated through fees charged to Western's refining segment for truck transportation
and delivery of crude oil and asphalt. Affiliate and third-party sales based revenues result from sales of refined products to
Western and third-party customers at a delivered price that includes charges for product transportation.
(2) Fuel margin per gallon is a measurement calculated by dividing the difference between fuel sales, net of transportation
charges, and cost of fuel sales for our wholesale 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.
Investor and Analyst Contact: Michelle Clemente (602) 286-1533 Jeffrey S. Beyersdorfer (602) 286-1530 Media Contact: Gary W. Hanson (602) 286-1777
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