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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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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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27‑4151603
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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19100 Ridgewood Pkwy, San Antonio, Texas 78259-1828
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(Address of principal executive offices) (Zip Code)
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210-626-6000
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(Registrant’s telephone number, including area code)
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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PART I. FINANCIAL INFORMATION
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Page
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PART II. OTHER INFORMATION
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||
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2014
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2013
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2014
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2013
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(Dollars in thousands, except unit and per unit amounts)
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||||||||||||||
REVENUES
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||||||||||||||
Affiliate
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$
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114,214
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$
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54,102
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$
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223,794
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$
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101,994
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Third-party
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16,111
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6,003
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31,580
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9,733
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||||
Total Revenues
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130,325
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60,105
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255,374
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111,727
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COSTS AND EXPENSES
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Operating and maintenance expenses
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53,746
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28,889
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98,844
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48,378
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||||
Imbalance settlement gains
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(2,700
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)
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(2,576
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)
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(5,117
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)
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(5,000
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)
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||||
General and administrative expenses
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12,448
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6,851
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21,794
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12,904
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Depreciation and amortization expenses
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16,460
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7,314
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31,985
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11,395
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Loss (gain) on asset disposals and impairments
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132
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—
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(4,616
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)
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164
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||||
Total Costs and Expenses
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80,086
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40,478
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142,890
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67,841
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OPERATING INCOME
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50,239
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19,627
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112,484
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43,886
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Interest and financing costs, net
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(17,473
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)
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(6,571
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)
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(35,220
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)
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(12,175
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)
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Interest income
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—
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470
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—
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493
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NET INCOME
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$
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32,766
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$
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13,526
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$
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77,264
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$
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32,204
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Loss attributable to Predecessor
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—
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5,647
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—
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5,647
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Net Income attributable to Partners
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32,766
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19,173
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77,264
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37,851
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General partner’s interest in net income, including incentive distribution rights
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(7,958
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)
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(1,978
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)
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(14,794
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)
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(3,514
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)
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Limited partners’ interest in net income
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$
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24,808
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$
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17,195
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$
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62,470
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$
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34,337
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Net income per limited partner unit:
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Common - basic
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$
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0.45
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$
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0.38
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$
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1.15
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$
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0.77
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Common - diluted
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$
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0.45
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$
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0.38
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$
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1.14
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$
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0.77
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Subordinated - basic and diluted
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$
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0.45
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$
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0.36
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$
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1.13
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$
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0.73
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Weighted average limited partner units outstanding:
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Common units - basic
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46,911,533
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30,752,989
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43,070,111
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29,812,337
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Common units - diluted
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47,012,424
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30,863,138
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43,169,298
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29,903,780
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Subordinated units - basic and diluted
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7,543,627
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15,254,890
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11,377,957
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15,254,890
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Cash distributions per unit
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$
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0.5900
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$
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0.4900
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$
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1.1550
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$
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0.9625
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Six Months Ended June 30,
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2014
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2013
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CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
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(Dollars in thousands)
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||||||
Net income
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$
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77,264
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$
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32,204
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Adjustments to reconcile net income to net cash from (used in) operating activities:
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Depreciation and amortization expenses
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31,985
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11,395
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Amortization of debt issuance costs
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1,581
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822
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Unit-based compensation expense
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917
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936
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Loss (gain) on asset disposals and impairments
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(4,616
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)
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164
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Changes in current assets and liabilities
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(20,483
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)
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(2,913
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)
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Changes in non-current assets and liabilities
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2,566
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10,466
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Net cash from operating activities
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89,214
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53,074
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CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
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Capital expenditures
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(63,760
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)
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(26,362
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)
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Capital expenditure reimbursements
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11
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320
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Proceeds from sale of assets
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9,721
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|
|
—
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Acquisitions
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—
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(314,757
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)
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Net cash used in investing activities
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(54,028
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)
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(340,799
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)
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CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
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Proceeds from issuance of common units, net of issuance costs
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379
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391,348
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|
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Proceeds from issuance of general partner units
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8
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8,319
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Quarterly distributions to unitholders
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(63,202
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)
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(43,838
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)
|
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Quarterly distributions to general partner
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(12,332
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)
|
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(3,066
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)
|
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Distributions in connection with acquisitions
|
—
|
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(544,000
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)
|
||
Advance distribution in connection with West Coast Logistics Assets acquisition
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(214,000
|
)
|
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—
|
|
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Borrowings under revolving credit agreement
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255,100
|
|
|
544,000
|
|
||
Repayments under revolving credit agreement
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(27,500
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)
|
|
—
|
|
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Payments on capital leases
|
(130
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)
|
|
(162
|
)
|
||
Financing costs
|
(850
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)
|
|
(3,294
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)
|
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Capital contributions by affiliate
|
4,594
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|
|
2,778
|
|
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Sponsor contribution of equity to the Predecessor
|
—
|
|
|
(7,813
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)
|
||
Net cash from (used in) financing activities
|
(57,933
|
)
|
|
344,272
|
|
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(22,747
|
)
|
|
56,547
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|
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CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
23,203
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|
|
19,290
|
|
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CASH AND CASH EQUIVALENTS, END OF PERIOD
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$
|
456
|
|
|
$
|
75,837
|
|
•
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six
marketing terminals and storage facilities located in Southern California (the “Los Angeles Terminal Assets”) effective
June 1, 2013
; and
|
•
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two
marine terminals, a marine storage facility, a products terminal, a petroleum coke handling and storage facility and crude oil and refined products pipelines located in Southern California (the “Los Angeles Logistics Assets”) effective
December 6, 2013
.
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•
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the short term duration of the instruments (
none
of our trade payables or trade receivables have been outstanding for greater than
90 days
); and
|
•
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the expected future insignificance of bad debt expense, which includes an evaluation of counterparty credit risk.
|
•
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a truck terminal and
six
storage tanks, located in Nikiski, Alaska;
|
•
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a truck terminal, rail loading and unloading facility, and
four
storage tanks with a shell capacity of approximately
1.5 million
barrels, all located at Tesoro’s refinery in Anacortes, Washington;
|
•
|
a truck terminal and rail loading and unloading facility, all located at Tesoro’s refinery in Martinez, California; and
|
•
|
certain related assets.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenues
|
$
|
114,214
|
|
|
$
|
54,102
|
|
|
$
|
223,794
|
|
|
$
|
101,994
|
|
Operating and maintenance expenses (a)
|
8,309
|
|
|
9,741
|
|
|
18,580
|
|
|
13,179
|
|
||||
General and administrative expenses
|
9,228
|
|
|
4,047
|
|
|
16,708
|
|
|
6,873
|
|
(a)
|
Operating and maintenance expenses include imbalance settlement gains of
$2.7 million
and
$2.6 million
for the
three
months ended
June 30, 2014
and
2013
, respectively, and
$5.1 million
and
$5.0 million
for the
six
months ended
June 30, 2014
and
2013
, respectively.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income attributable to partners
|
$
|
32,766
|
|
|
$
|
19,173
|
|
|
$
|
77,264
|
|
|
$
|
37,851
|
|
General partner’s distributions (including IDRs) (a)
|
(8,292
|
)
|
|
(2,149
|
)
|
|
(15,139
|
)
|
|
(3,815
|
)
|
||||
Limited partners’ distributions on common units
|
(29,199
|
)
|
|
(16,179
|
)
|
|
(52,328
|
)
|
|
(31,014
|
)
|
||||
Limited partners’ distributions on subordinated units (b)
|
(4,641
|
)
|
|
(7,780
|
)
|
|
(13,641
|
)
|
|
(15,255
|
)
|
||||
Distributions greater than earnings
|
$
|
(9,366
|
)
|
|
$
|
(6,935
|
)
|
|
$
|
(3,844
|
)
|
|
$
|
(12,233
|
)
|
|
|
|
|
|
|
|
|
||||||||
General partner’s earnings:
|
|
|
|
|
|
|
|
|
|||||||
Distributions (including IDRs) (a)
|
$
|
8,292
|
|
|
$
|
2,149
|
|
|
$
|
15,139
|
|
|
$
|
3,815
|
|
Allocation of distributions greater than earnings
|
(186
|
)
|
|
(139
|
)
|
|
(77
|
)
|
|
(245
|
)
|
||||
Total general partner’s earnings
|
$
|
8,106
|
|
|
$
|
2,010
|
|
|
$
|
15,062
|
|
|
$
|
3,570
|
|
|
|
|
|
|
|
|
|
||||||||
Limited partners’ earnings on common units:
|
|
|
|
|
|
|
|
||||||||
Distributions
|
$
|
29,199
|
|
|
$
|
16,179
|
|
|
$
|
52,328
|
|
|
$
|
31,014
|
|
Allocation of distributions greater than earnings
|
(7,908
|
)
|
|
(4,543
|
)
|
|
(2,980
|
)
|
|
(7,930
|
)
|
||||
Total limited partners’ earnings on common units
|
$
|
21,291
|
|
|
$
|
11,636
|
|
|
$
|
49,348
|
|
|
$
|
23,084
|
|
|
|
|
|
|
|
|
|
||||||||
Limited partners’ earnings on subordinated units (b):
|
|
|
|
|
|
|
|
||||||||
Distributions
|
$
|
4,641
|
|
|
$
|
7,780
|
|
|
$
|
13,641
|
|
|
$
|
15,255
|
|
Allocation of distributions greater than earnings
|
(1,272
|
)
|
|
(2,253
|
)
|
|
(787
|
)
|
|
(4,058
|
)
|
||||
Total limited partners’ earnings on subordinated units
|
$
|
3,369
|
|
|
$
|
5,527
|
|
|
$
|
12,854
|
|
|
$
|
11,197
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
|
|
||||||||
Common units - basic
|
46,911,533
|
|
|
30,752,989
|
|
|
43,070,111
|
|
|
29,812,337
|
|
||||
Common unit equivalents
|
100,891
|
|
|
110,149
|
|
|
99,187
|
|
|
91,443
|
|
||||
Common units - diluted
|
47,012,424
|
|
|
30,863,138
|
|
|
43,169,298
|
|
|
29,903,780
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Subordinated units - basic and diluted (b)
|
7,543,627
|
|
|
15,254,890
|
|
|
11,377,957
|
|
|
15,254,890
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per limited partner unit (c):
|
|
|
|
|
|
|
|
||||||||
Common - basic
|
$
|
0.45
|
|
|
$
|
0.38
|
|
|
$
|
1.15
|
|
|
$
|
0.77
|
|
Common - diluted
|
$
|
0.45
|
|
|
$
|
0.38
|
|
|
$
|
1.14
|
|
|
$
|
0.77
|
|
Subordinated - basic and diluted
|
$
|
0.45
|
|
|
$
|
0.36
|
|
|
$
|
1.13
|
|
|
$
|
0.73
|
|
(a)
|
General partner’s distributions (including IDRs) consist of an approximate
2%
general partner interest and IDRs, which entitle the general partner to receive increasing percentages, up to
50%
, of quarterly distributions in excess of
$0.388125
per unit per quarter. See Note K of our Annual Report on Form 10-K for the year ended
December 31, 2013
for further discussion related to IDRs.
|
(b)
|
On
May 16, 2014
, the
15,254,890
subordinated units were converted into common units on a one-for-one basis and thereafter participate on terms equal with all other common units in distributions of available cash. Distributions and the Partnership’s net income were allocated to the subordinated units through
May 15, 2014
.
|
(c)
|
We base our calculation of net income per unit on the weighted-average number of common and subordinated limited partner units outstanding during the period. Therefore, as a result of the public offering of common units in January 2013, and the conversion of the subordinated units to common units in May 2014, net income per common and subordinated limited partner units may not agree for the periods presented.
|
|
June 30, 2014
|
|
December 31, 2013
|
||||
Crude Oil Gathering
|
$
|
227,202
|
|
|
$
|
172,114
|
|
Terminalling and Transportation
|
1,353,957
|
|
|
1,331,387
|
|
||
Gross Property, Plant and Equipment
|
1,581,159
|
|
|
1,503,501
|
|
||
Accumulated depreciation
|
(167,102
|
)
|
|
(135,200
|
)
|
||
Net Property, Plant and Equipment
|
$
|
1,414,057
|
|
|
$
|
1,368,301
|
|
Debt, including current maturities:
|
June 30, 2014
|
|
December 31, 2013
|
||||
Revolving Credit Facility
|
$
|
227,600
|
|
|
$
|
—
|
|
5.875% TLLP Senior Notes due 2020 (a)
|
605,251
|
|
|
605,598
|
|
||
6.125% TLLP Senior Notes due 2021
|
550,000
|
|
|
550,000
|
|
||
Capital lease obligations
|
8,556
|
|
|
8,745
|
|
||
Total Debt
|
1,391,407
|
|
|
1,164,343
|
|
||
Current maturities
|
(328
|
)
|
|
(323
|
)
|
||
Debt, Less Current Maturities
|
$
|
1,391,079
|
|
|
$
|
1,164,020
|
|
Credit Facility
|
|
30 day Eurodollar (LIBOR) Rate
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
|
Commitment Fee
(unused portion)
|
TLLP Revolving Credit Facility (b)
|
|
0.16%
|
|
2.50%
|
|
3.25%
|
|
1.50%
|
|
0.500%
|
|
|
Tioga Crude Oil Pipeline Release
|
|
Chevron Corrective Action Order
|
|
Other Liabilities
|
|
Total
|
||||||||
Balance at December 31, 2013
|
|
$
|
11,568
|
|
|
$
|
8,016
|
|
|
$
|
4,856
|
|
|
$
|
24,440
|
|
Additions
|
|
5,636
|
|
|
—
|
|
|
571
|
|
|
6,207
|
|
||||
Expenditures
|
|
(2,122
|
)
|
|
(5,159
|
)
|
|
(325
|
)
|
|
(7,606
|
)
|
||||
Balance at June 30, 2014
|
|
$
|
15,082
|
|
|
$
|
2,857
|
|
|
$
|
5,102
|
|
|
$
|
23,041
|
|
|
Partnership
|
|
|
||||||||
|
Common
|
|
Subordinated
|
|
General Partner
|
|
Total
|
||||
Balance at December 31, 2013
|
39,148,916
|
|
|
15,254,890
|
|
|
1,110,282
|
|
|
55,514,088
|
|
Issuance of units under ATM Program
|
5,500
|
|
|
—
|
|
|
—
|
|
|
5,500
|
|
Unit-based compensation awards (a)
|
51,746
|
|
|
—
|
|
|
—
|
|
|
51,746
|
|
Subordinated unit conversion
|
15,254,890
|
|
|
(15,254,890
|
)
|
|
—
|
|
|
—
|
|
Balance at June 30, 2014
|
54,461,052
|
|
|
—
|
|
|
1,110,282
|
|
|
55,571,334
|
|
|
Partnership
|
|
|
||||||||||||
|
Common
|
|
Subordinated
|
|
General Partner
|
|
Total
|
||||||||
Balance at December 31, 2013
|
$
|
459,261
|
|
|
$
|
(161,311
|
)
|
|
$
|
(52,598
|
)
|
|
$
|
245,352
|
|
Equity offering under ATM Program, net of issuance costs
|
379
|
|
|
—
|
|
|
8
|
|
|
387
|
|
||||
Quarterly distributions (b)
|
(45,583
|
)
|
|
(17,619
|
)
|
|
(12,332
|
)
|
|
(75,534
|
)
|
||||
Net income attributable to partners
|
48,681
|
|
|
13,789
|
|
|
14,794
|
|
|
77,264
|
|
||||
Other
|
7,174
|
|
|
(13
|
)
|
|
600
|
|
|
7,761
|
|
||||
Subordinated unit conversion
|
(165,154
|
)
|
|
165,154
|
|
|
—
|
|
|
—
|
|
||||
Balance at June 30, 2014
|
$
|
304,758
|
|
|
$
|
—
|
|
|
$
|
(49,528
|
)
|
|
$
|
255,230
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income attributable to partners
|
$
|
32,766
|
|
|
$
|
19,173
|
|
|
$
|
77,264
|
|
|
$
|
37,851
|
|
General partner’s IDRs
|
(7,452
|
)
|
|
(1,627
|
)
|
|
(13,520
|
)
|
|
(2,813
|
)
|
||||
Net income available to partners
|
$
|
25,314
|
|
|
$
|
17,546
|
|
|
$
|
63,744
|
|
|
$
|
35,038
|
|
General partner’s ownership interest
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
||||
General partner’s allocated interest in net income
|
$
|
506
|
|
|
$
|
351
|
|
|
$
|
1,274
|
|
|
$
|
701
|
|
General partner’s IDRs
|
7,452
|
|
|
1,627
|
|
|
13,520
|
|
|
2,813
|
|
||||
Total general partner’s interest in net income
|
$
|
7,958
|
|
|
$
|
1,978
|
|
|
$
|
14,794
|
|
|
$
|
3,514
|
|
Quarter Ended
|
|
Quarterly Distribution Per Unit
|
|
Total Cash Distribution including general partner IDRs (in thousands)
|
|
Date of Distribution
|
|
Unitholders Record Date
|
||||
December 31, 2013
|
|
$
|
0.565
|
|
|
$
|
36,265
|
|
|
February 13, 2014
|
|
February 3, 2014
|
March 31, 2014
|
|
$
|
0.590
|
|
|
$
|
38,976
|
|
|
May 15, 2014
|
|
May 5, 2014
|
June 30, 2014 (c)
|
|
$
|
0.615
|
|
|
$
|
42,132
|
|
|
August 14, 2014
|
|
August 4, 2014
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
General partner’s distributions:
|
|
|
|
|
|
|
|
||||||||
General partner’s distributions
|
$
|
840
|
|
|
$
|
522
|
|
|
$
|
1,619
|
|
|
$
|
1,002
|
|
General partner’s IDRs
|
7,452
|
|
|
1,627
|
|
|
13,520
|
|
|
2,813
|
|
||||
Total general partner’s distributions
|
8,292
|
|
|
2,149
|
|
|
15,139
|
|
|
3,815
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Limited partners’ distributions:
|
|
|
|
|
|
|
|
||||||||
Common
|
29,199
|
|
|
16,179
|
|
|
52,328
|
|
|
31,014
|
|
||||
Subordinated
|
4,641
|
|
|
7,780
|
|
|
13,641
|
|
|
15,255
|
|
||||
Total limited partners’ distributions
|
33,840
|
|
|
23,959
|
|
|
65,969
|
|
|
46,269
|
|
||||
Total Cash Distributions
|
$
|
42,132
|
|
|
$
|
26,108
|
|
|
$
|
81,108
|
|
|
$
|
50,084
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Performance phantom units
|
$
|
517
|
|
|
$
|
442
|
|
|
$
|
810
|
|
|
$
|
843
|
|
Service phantom units
|
53
|
|
|
52
|
|
|
107
|
|
|
93
|
|
||||
Total Unit-Based Compensation Expense
|
$
|
570
|
|
|
$
|
494
|
|
|
$
|
917
|
|
|
$
|
936
|
|
|
Six Months Ended June 30,
|
||||||
|
2014
|
|
2013
|
||||
Assets received for deposit paid in prior period
|
$
|
—
|
|
|
$
|
40,000
|
|
Capital expenditures included in accounts payable
|
21,737
|
|
|
11,333
|
|
||
Receivable from affiliate for capital expenditures
|
4,167
|
|
|
1,120
|
|
||
Capital leases and other
|
3,950
|
|
|
5,026
|
|
•
|
the Northwest Products Pipeline, which includes a regulated common carrier products pipeline running from Salt Lake City, Utah to Spokane, Washington and a jet fuel pipeline to the Salt Lake City International Airport;
|
•
|
19
crude oil and refined products terminals and storage facilities in the western and midwestern U.S.;
|
•
|
four
marine terminals in California;
|
•
|
a rail-car unloading facility in Washington;
|
•
|
a petroleum coke handling and storage facility in Los Angeles; and
|
•
|
other pipelines which transport products and crude oil from Tesoro’s refineries to nearby facilities in Salt Lake City and Los Angeles.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
Crude Oil Gathering:
|
|
|
|
|
|
|
|
||||||||
Affiliate
|
$
|
25,115
|
|
|
$
|
20,529
|
|
|
$
|
48,366
|
|
|
$
|
41,906
|
|
Third-party
|
1,968
|
|
|
416
|
|
|
3,341
|
|
|
730
|
|
||||
Total Crude Oil Gathering
|
27,083
|
|
|
20,945
|
|
|
51,707
|
|
|
42,636
|
|
||||
Terminalling and Transportation:
|
|
|
|
|
|
|
|
||||||||
Affiliate (a)
|
89,099
|
|
|
33,573
|
|
|
175,428
|
|
|
60,088
|
|
||||
Third-party
|
14,143
|
|
|
5,587
|
|
|
28,239
|
|
|
9,003
|
|
||||
Total Terminalling and Transportation
|
103,242
|
|
|
39,160
|
|
|
203,667
|
|
|
69,091
|
|
||||
Total Segment Revenues
|
$
|
130,325
|
|
|
$
|
60,105
|
|
|
$
|
255,374
|
|
|
$
|
111,727
|
|
|
|
|
|
|
|
|
|
||||||||
OPERATING INCOME
|
|
|
|
|
|
|
|
||||||||
Crude Oil Gathering
|
$
|
11,925
|
|
|
$
|
7,688
|
|
|
$
|
22,939
|
|
|
$
|
16,715
|
|
Terminalling and Transportation
|
43,026
|
|
|
16,043
|
|
|
97,436
|
|
|
35,592
|
|
||||
Total Segment Operating Income
|
54,951
|
|
|
23,731
|
|
|
120,375
|
|
|
52,307
|
|
||||
Unallocated general and administrative expenses
|
(4,712
|
)
|
|
(4,104
|
)
|
|
(7,891
|
)
|
|
(8,421
|
)
|
||||
Interest and financing costs, net
|
(17,473
|
)
|
|
(6,571
|
)
|
|
(35,220
|
)
|
|
(12,175
|
)
|
||||
Interest income
|
—
|
|
|
470
|
|
|
—
|
|
|
493
|
|
||||
NET INCOME
|
$
|
32,766
|
|
|
$
|
13,526
|
|
|
$
|
77,264
|
|
|
$
|
32,204
|
|
|
|
|
|
|
|
|
|
||||||||
CAPITAL EXPENDITURES
|
|
|
|
|
|
|
|
||||||||
Crude Oil Gathering
|
$
|
33,667
|
|
|
$
|
14,924
|
|
|
$
|
51,322
|
|
|
$
|
18,869
|
|
Terminalling and Transportation
|
13,878
|
|
|
7,510
|
|
|
22,707
|
|
|
13,801
|
|
||||
Total Capital Expenditures
|
$
|
47,545
|
|
|
$
|
22,434
|
|
|
$
|
74,029
|
|
|
$
|
32,670
|
|
(a)
|
Our Predecessor did not record revenue for transactions with Tesoro in the Terminalling and Transportation segment for assets acquired in the Acquisitions from Tesoro prior to the effective date of each acquisition.
|
Identifiable Assets
|
June 30, 2014
|
|
December 31, 2013
|
||||
Crude Oil Gathering
|
$
|
212,603
|
|
|
$
|
154,583
|
|
Terminalling and Transportation
|
1,503,002
|
|
|
1,299,310
|
|
||
Other
|
31,934
|
|
|
48,419
|
|
||
Total Identifiable Assets
|
$
|
1,747,539
|
|
|
$
|
1,502,312
|
|
•
|
six
marketing terminals and storage facilities located in Southern California (the “Los Angeles Terminal Assets”) effective
June 1, 2013
; and
|
•
|
two
marine terminals, a marine storage facility, a products terminal, a petroleum coke handling and storage facility and crude oil and refined products pipelines located in Southern California (the “Los Angeles Logistics Assets”) effective
December 6, 2013
.
|
•
|
focus on opportunities to provide committed fee-based logistics services to Tesoro and third parties;
|
•
|
evaluate investment opportunities that may arise from the growth of Tesoro’s refining and marketing business or from increased third-party activity to make capital investments to expand our existing asset base;
|
•
|
pursue accretive acquisitions of complementary assets from Tesoro as well as third parties; and
|
•
|
seek to enhance the profitability of our existing assets by pursuing opportunities to add Tesoro and third-party volumes, improve operating efficiencies and increase utilization.
|
•
|
expand our assets on our crude oil gathering system (the “High Plains System”) in support of growing third-party demand for transportation services and Tesoro’s increased demand for Bakken crude oil in the mid-continent and west coast refining systems, including:
|
◦
|
expanding utilization of our proprietary truck fleet, which should generate cost and operating efficiencies;
|
◦
|
expanding capacity on the recently reversed segment of our High Plains pipeline; and
|
◦
|
adding other origin and destination points on the High Plains System to increase volumes.
|
•
|
increase our terminalling volumes by expanding capacity and growing our third-party services at certain of our terminals;
|
•
|
optimize Tesoro volumes and grow third-party volumes at our recently acquired Los Angeles Terminal and Logistics Assets; and
|
•
|
complete the construction of a waxy crude oil unloading facility in Salt Lake City.
|
•
|
a truck terminal and
six
storage tanks, located in Nikiski, Alaska;
|
•
|
a truck terminal, rail loading and unloading facility, and
four
storage tanks with a shell capacity of approximately
1.5 million
barrels, all located at Tesoro’s refinery in Anacortes, Washington;
|
•
|
a truck terminal and rail loading and unloading facility, all located at Tesoro’s refinery in Martinez, California; and
|
•
|
certain related assets.
|
•
|
our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or financing methods;
|
•
|
the ability of our assets to generate sufficient cash flow to make distributions to our unitholders;
|
•
|
our ability to incur and service debt and fund capital expenditures; and
|
•
|
the viability of acquisitions and other capital expenditure projects, and the returns on investment of various investment opportunities.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
REVENUES
|
|
|
(Including Predecessor)
|
|
|
|
(Including Predecessor)
|
||||||||
Crude Oil Gathering
|
$
|
27,083
|
|
|
$
|
20,945
|
|
|
$
|
51,707
|
|
|
$
|
42,636
|
|
Terminalling and Transportation
|
103,242
|
|
|
39,160
|
|
|
203,667
|
|
|
69,091
|
|
||||
Total Revenues
|
130,325
|
|
|
60,105
|
|
|
255,374
|
|
|
111,727
|
|
||||
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating and maintenance expenses (a)
|
51,046
|
|
|
26,313
|
|
|
93,727
|
|
|
43,378
|
|
||||
General and administrative expenses
|
12,448
|
|
|
6,851
|
|
|
21,794
|
|
|
12,904
|
|
||||
Depreciation and amortization expenses
|
16,460
|
|
|
7,314
|
|
|
31,985
|
|
|
11,395
|
|
||||
Loss (gain) on asset disposals and impairments
|
132
|
|
|
—
|
|
|
(4,616
|
)
|
|
164
|
|
||||
Total Costs and Expenses
|
80,086
|
|
|
40,478
|
|
|
142,890
|
|
|
67,841
|
|
||||
OPERATING INCOME
|
50,239
|
|
|
19,627
|
|
|
112,484
|
|
|
43,886
|
|
||||
Interest and financing costs, net
|
(17,473
|
)
|
|
(6,571
|
)
|
|
(35,220
|
)
|
|
(12,175
|
)
|
||||
Interest income
|
—
|
|
|
470
|
|
|
—
|
|
|
493
|
|
||||
NET INCOME
|
$
|
32,766
|
|
|
$
|
13,526
|
|
|
$
|
77,264
|
|
|
$
|
32,204
|
|
|
|
|
|
|
|
|
|
||||||||
Loss attributable to Predecessor
|
—
|
|
|
5,647
|
|
|
—
|
|
|
5,647
|
|
||||
Net Income attributable to Partners
|
32,766
|
|
|
19,173
|
|
|
77,264
|
|
|
37,851
|
|
||||
General partner’s interest in net income, including incentive distribution rights
|
(7,958
|
)
|
|
(1,978
|
)
|
|
(14,794
|
)
|
|
(3,514
|
)
|
||||
Limited partners’ interest in net income
|
$
|
24,808
|
|
|
$
|
17,195
|
|
|
$
|
62,470
|
|
|
$
|
34,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income per limited partner unit (b):
|
|
|
|
|
|
|
|
|
|
|
|||||
Common - basic
|
$
|
0.45
|
|
|
$
|
0.38
|
|
|
$
|
1.15
|
|
|
$
|
0.77
|
|
Common - diluted
|
$
|
0.45
|
|
|
$
|
0.38
|
|
|
$
|
1.14
|
|
|
$
|
0.77
|
|
Subordinated - basic and diluted
|
$
|
0.45
|
|
|
$
|
0.36
|
|
|
$
|
1.13
|
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
|
|
|
|
|
|||||
Common units - basic
|
46,911,533
|
|
|
30,752,989
|
|
|
43,070,111
|
|
|
29,812,337
|
|
||||
Common units - diluted
|
47,012,424
|
|
|
30,863,138
|
|
|
43,169,298
|
|
|
29,903,780
|
|
||||
Subordinated units - basic and diluted
|
7,543,627
|
|
|
15,254,890
|
|
|
11,377,957
|
|
|
15,254,890
|
|
||||
|
|
|
|
|
|
|
|
||||||||
EBITDA (c)
|
$
|
66,699
|
|
|
$
|
26,941
|
|
|
$
|
144,469
|
|
|
$
|
55,281
|
|
Adjusted EBITDA (c)
|
$
|
69,620
|
|
|
$
|
26,941
|
|
|
$
|
144,791
|
|
|
$
|
55,445
|
|
Distributable Cash Flow (c)
|
$
|
49,550
|
|
|
$
|
20,043
|
|
|
$
|
115,570
|
|
|
$
|
43,066
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Reconciliation of EBITDA and Distributable Cash Flow to Net Income:
|
|
|
(Including Predecessor)
|
|
|
|
(Including Predecessor)
|
||||||||
Net income
|
$
|
32,766
|
|
|
$
|
13,526
|
|
|
$
|
77,264
|
|
|
$
|
32,204
|
|
Depreciation and amortization expenses
|
16,460
|
|
|
7,314
|
|
|
31,985
|
|
|
11,395
|
|
||||
Interest and financing costs, net
|
17,473
|
|
|
6,571
|
|
|
35,220
|
|
|
12,175
|
|
||||
Interest income
|
—
|
|
|
(470
|
)
|
|
—
|
|
|
(493
|
)
|
||||
EBITDA (c)
|
$
|
66,699
|
|
|
$
|
26,941
|
|
|
$
|
144,469
|
|
|
$
|
55,281
|
|
Loss (gain) on asset disposals and impairments
|
132
|
|
|
—
|
|
|
(4,616
|
)
|
|
164
|
|
||||
Inspection and maintenance capital expenses associated with the Northwest Products System
|
2,789
|
|
|
—
|
|
|
4,938
|
|
|
—
|
|
||||
Adjusted EBITDA (c)
|
69,620
|
|
|
26,941
|
|
|
144,791
|
|
|
55,445
|
|
||||
Interest and financing costs, net
|
(17,473
|
)
|
|
(6,571
|
)
|
|
(35,220
|
)
|
|
(12,175
|
)
|
||||
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
9,721
|
|
|
—
|
|
||||
Maintenance capital expenditures (d)
|
(4,628
|
)
|
|
(4,437
|
)
|
|
(6,292
|
)
|
|
(6,333
|
)
|
||||
Reimbursement for maintenance capital expenditures (d)
|
1,011
|
|
|
2,404
|
|
|
1,497
|
|
|
3,587
|
|
||||
Non-cash unit-based compensation expense
|
570
|
|
|
490
|
|
|
917
|
|
|
920
|
|
||||
Change in deferred revenue
|
450
|
|
|
746
|
|
|
156
|
|
|
1,129
|
|
||||
Interest income
|
—
|
|
|
470
|
|
|
—
|
|
|
493
|
|
||||
Distributable Cash Flow (c)
|
$
|
49,550
|
|
|
$
|
20,043
|
|
|
$
|
115,570
|
|
|
$
|
43,066
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of EBITDA to Net Cash from Operating Activities:
|
|
|
|
|
|
|
|
||||||||
Net cash from operating activities
|
$
|
18,543
|
|
|
$
|
23,370
|
|
|
$
|
89,214
|
|
|
$
|
53,074
|
|
Interest and financing costs, net
|
17,473
|
|
|
6,571
|
|
|
35,220
|
|
|
12,175
|
|
||||
Changes in assets and liabilities
|
32,179
|
|
|
(1,630
|
)
|
|
17,917
|
|
|
(7,553
|
)
|
||||
Gain (loss) on asset disposals and impairments
|
(132
|
)
|
|
—
|
|
|
4,616
|
|
|
(164
|
)
|
||||
Amortization of debt issuance costs
|
(794
|
)
|
|
(406
|
)
|
|
(1,581
|
)
|
|
(822
|
)
|
||||
Unit-based compensation expense
|
(570
|
)
|
|
(494
|
)
|
|
(917
|
)
|
|
(936
|
)
|
||||
Interest income
|
—
|
|
|
(470
|
)
|
|
—
|
|
|
(493
|
)
|
||||
EBITDA (c)
|
$
|
66,699
|
|
|
$
|
26,941
|
|
|
$
|
144,469
|
|
|
$
|
55,281
|
|
(a)
|
Operating and maintenance expenses include imbalance settlement gains of
$2.7 million
and
$2.6 million
in the
three
months ended
June 30, 2014
and
2013
, respectively, and
$5.1 million
and
$5.0 million
in the
six
months ended
June 30, 2014
and
2013
, respectively.
|
(b)
|
TLLP excludes losses attributable to Predecessor from its calculation of net income per limited partner unit in accordance with the partnership agreement. The table below provides supplemental presentation of net income per limited partner unit, as adjusted, using the Net Income shown above. This supplemental information assumes the common unitholders, subordinated unitholders and General Partner participated in the pre-acquisition date losses attributable to the Predecessor for the
three and six
months ended
June 30, 2013
. There were no losses attributable to the Predecessor for the three and six months ended June 30, 2014.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||
|
2013
|
|
2013
|
||||
Adjusted Net Income Per Limited Partner Unit:
|
|
|
|
||||
Common - basic and diluted
|
$0.26
|
|
$0.65
|
||||
Subordinated - basic and diluted
|
$0.24
|
|
$0.61
|
(c)
|
For a definition of EBITDA, Adjusted EBITDA and Distributable Cash Flow, see “Non-GAAP Financial Measures.”
|
(d)
|
Maintenance capital expenditures include expenditures required to ensure the safety, reliability, integrity and regulatory compliance of our assets.
|
•
|
an
increase
in operating and maintenance expenses of
$24.7 million
, or
94%
, primarily related to costs associated with operations of the assets acquired in the 2013 Acquisitions;
|
•
|
an increase in net interest and financing costs of
$10.9 million
related to the increase in outstanding debt in the 2014 Quarter as a result of the issuance of $800.0 million of senior notes (“Senior Notes”) used to fund the 2013 Acquisitions from Tesoro;
|
•
|
an increase in depreciation expense of
$9.1 million
, or
125%
associated with the increase in depreciable assets as a result of the 2013 Acquisitions; and
|
•
|
an
increase
in general and administrative expenses of
$5.6 million
, or
82%
, primarily related to higher allocated overhead to support the Partnership’s growing business.
|
•
|
an
increase
in operating and maintenance expenses of
$50.3 million
, or
116%
, mainly related to costs associated with operations of the assets acquired in the 2013 Acquisition;
|
•
|
an increase in net interest and financing costs of
$23.0 million
related to the increase in outstanding debt in the 2014 Period as a result of the issuance of $800.0 million of Senior Notes used to fund the 2013 Acquisitions from Tesoro;
|
•
|
an increase in depreciation expense of
$20.6 million
, or
181%
, primarily associated with the increase in depreciable assets as a result of the 2013 Acquisitions; and
|
•
|
an
increase
in general and administrative expenses of
$8.9 million
, or
69%
, primarily related to higher allocated overhead to support the Partnership’s growing business.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
Pipeline revenues
|
$
|
13,304
|
|
|
$
|
9,048
|
|
|
$
|
25,119
|
|
|
$
|
18,489
|
|
Trucking revenues
|
13,779
|
|
|
11,897
|
|
|
26,588
|
|
|
24,147
|
|
||||
Total Revenues
|
27,083
|
|
|
20,945
|
|
|
51,707
|
|
|
42,636
|
|
||||
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
||||||||
Operating and maintenance expenses (a)
|
13,842
|
|
|
11,467
|
|
|
24,777
|
|
|
22,431
|
|
||||
General and administrative expenses
|
152
|
|
|
761
|
|
|
1,804
|
|
|
1,455
|
|
||||
Depreciation and amortization expenses
|
1,032
|
|
|
1,029
|
|
|
2,055
|
|
|
2,035
|
|
||||
Loss on asset disposals and impairments
|
132
|
|
|
—
|
|
|
132
|
|
|
—
|
|
||||
Total Costs and Expenses
|
15,158
|
|
|
13,257
|
|
|
28,768
|
|
|
25,921
|
|
||||
CRUDE OIL GATHERING SEGMENT OPERATING INCOME
|
$
|
11,925
|
|
|
$
|
7,688
|
|
|
$
|
22,939
|
|
|
$
|
16,715
|
|
VOLUMES (bpd)
|
|
|
|
|
|
|
|
||||||||
Pipeline throughput
|
108,848
|
|
|
80,543
|
|
|
103,449
|
|
|
81,445
|
|
||||
Average pipeline revenue per barrel (b)
|
$
|
1.34
|
|
|
$
|
1.23
|
|
|
$
|
1.34
|
|
|
$
|
1.25
|
|
Trucking volume
|
46,884
|
|
|
42,084
|
|
|
45,798
|
|
|
43,497
|
|
||||
Average trucking revenue per barrel (b)
|
$
|
3.23
|
|
|
$
|
3.11
|
|
|
$
|
3.21
|
|
|
$
|
3.07
|
|
(a)
|
Operating and maintenance expenses include imbalance settlement gains of
$1.5 million
for both the
three
months ended
June 30, 2014
and
2013
and
$2.6 million
and
$2.9 million
in the
six
months ended
June 30, 2014
and
2013
, respectively.
|
(b)
|
Management uses average revenue per barrel to evaluate performance and compare profitability to other companies in the industry. There are a variety of ways to calculate average revenue per barrel; other companies may calculate it in different ways. We calculate average revenue per barrel as revenue divided by the number of days in the period divided by throughput (bpd). Investors and analysts use this financial measure to help analyze and compare companies in the industry on the basis of operating performance. This financial measure should not be considered as an alternative to segment operating income, revenues and operating expenses or any other measure of financial performance presented in accordance with U.S. GAAP.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
REVENUES (a)
|
|
|
(Including Predecessor)
|
|
|
|
(Including Predecessor)
|
||||||||
Terminalling revenues
|
$
|
79,143
|
|
|
$
|
36,326
|
|
|
$
|
154,940
|
|
|
$
|
64,250
|
|
Pipeline transportation revenues
|
24,099
|
|
|
2,834
|
|
|
48,727
|
|
|
4,841
|
|
||||
Total Revenues
|
103,242
|
|
|
39,160
|
|
|
203,667
|
|
|
69,091
|
|
||||
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
||||||||
Operating and maintenance expenses (b)
|
37,204
|
|
|
14,846
|
|
|
68,950
|
|
|
20,947
|
|
||||
General and administrative expenses
|
7,584
|
|
|
1,986
|
|
|
12,099
|
|
|
3,028
|
|
||||
Depreciation and amortization expenses
|
15,428
|
|
|
6,285
|
|
|
29,930
|
|
|
9,360
|
|
||||
Loss (gain) on asset disposals and impairments
|
—
|
|
|
—
|
|
|
(4,748
|
)
|
|
164
|
|
||||
Total Costs and Expenses
|
60,216
|
|
|
23,117
|
|
|
106,231
|
|
|
33,499
|
|
||||
TERMINALLING AND TRANSPORTATION SEGMENT OPERATING INCOME
|
$
|
43,026
|
|
|
$
|
16,043
|
|
|
$
|
97,436
|
|
|
$
|
35,592
|
|
VOLUMES (bpd)
|
|
|
|
|
|
|
|
||||||||
Terminalling throughput
|
889,596
|
|
|
553,056
|
|
|
883,825
|
|
|
472,746
|
|
||||
Average terminalling revenue per barrel (a) (c)
|
$
|
0.98
|
|
|
$
|
0.72
|
|
|
$
|
0.97
|
|
|
$
|
0.75
|
|
Pipeline transportation throughput
|
772,483
|
|
|
85,476
|
|
|
778,698
|
|
|
88,005
|
|
||||
Average pipeline transportation revenue per barrel (a) (c)
|
$
|
0.34
|
|
|
$
|
0.36
|
|
|
$
|
0.35
|
|
|
$
|
0.30
|
|
(b)
|
Operating and maintenance expenses include imbalance settlement gains of
$1.2 million
and $1.1 million for the
three
months ended
June 30, 2014
and
2013
, respectively, and
$2.5 million
and
$2.1 million
in the
six
months ended
June 30, 2014
and
2013
, respectively.
|
(c)
|
Management uses average revenue per barrel to evaluate performance and compare profitability to other companies in the industry. There are a variety of ways to calculate average revenue per barrel; other companies may calculate it in different ways. We calculate average revenue per barrel as revenue divided by the number of days in the period divided by throughput (bpd). Investors and analysts use this financial measure to help analyze and compare companies in the industry on the basis of operating performance. This financial measure should not be considered as an alternative to segment operating income, revenues and operating expenses or any other measure of financial performance presented in accordance with U.S. GAAP.
|
Quarter Ended
|
|
Total Quarterly Distribution Per Unit
|
|
Total Quarterly Distribution Per Unit, Annualized
|
|
Total Cash Distribution including general partner IDRs (in thousands)
|
|
Date of Distribution
|
|
Unitholders Record Date
|
||||||
December 31, 2013
|
|
$
|
0.565
|
|
|
$
|
2.26
|
|
|
$
|
36,265
|
|
|
February 13, 2014
|
|
February 3, 2014
|
March 31, 2014
|
|
0.590
|
|
|
2.36
|
|
|
38,976
|
|
|
May 15, 2014
|
|
May 5, 2014
|
|||
June 30, 2014 (a)
|
|
0.615
|
|
|
2.46
|
|
|
42,132
|
|
|
August 14, 2014
|
|
August 4, 2014
|
Debt, including current maturities:
|
June 30, 2014
|
||
Revolving Credit Facility
|
$
|
227,600
|
|
5.875% TLLP Senior Notes due 2020 (b)
|
605,251
|
|
|
6.125% TLLP Senior Notes due 2021
|
550,000
|
|
|
Capital lease obligations
|
8,556
|
|
|
Total Debt
|
$
|
1,391,407
|
|
Credit Facility
|
|
30 day Eurodollar (LIBOR) Rate
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
|
Commitment Fee
(unused portion)
|
TLLP Revolving Credit Facility (c)
|
|
0.16%
|
|
2.50%
|
|
3.25%
|
|
1.50%
|
|
0.500%
|
|
Six Months Ended June 30,
|
||||||
|
2014
|
|
2013
|
||||
Cash Flows From (Used In):
|
|
|
|
||||
Operating Activities
|
$
|
89,214
|
|
|
$
|
53,074
|
|
Investing Activities
|
(54,028
|
)
|
|
(340,799
|
)
|
||
Financing Activities (d)
|
(57,933
|
)
|
|
344,272
|
|
||
Increase in Cash and Cash Equivalents
|
$
|
(22,747
|
)
|
|
$
|
56,547
|
|
(d)
|
Cash flows from financing activities include an advance distribution to affiliate in connection with the West Coast Logistics Assets Acquisition in the 2014 Period, and amounts distributed to Tesoro for the acquisition of the Los Angles Terminal Assets in the 2013 Period.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Expansion
|
$
|
42,917
|
|
|
$
|
17,997
|
|
|
$
|
67,737
|
|
|
$
|
26,337
|
|
Maintenance
|
4,628
|
|
|
4,437
|
|
|
6,292
|
|
|
6,333
|
|
||||
Total Capital Expenditures
|
$
|
47,545
|
|
|
$
|
22,434
|
|
|
$
|
74,029
|
|
|
$
|
32,670
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2013 Total Tesoro Logistics LP
|
||||||
|
Tesoro Logistics LP (Partnership) (a)
|
|
|
Predecessors
|
|
|||||||
Expansion
|
$
|
17,997
|
|
|
|
$
|
—
|
|
|
$
|
17,997
|
|
Maintenance
|
4,246
|
|
|
|
191
|
|
|
4,437
|
|
|||
Total Capital Expenditures
|
$
|
22,243
|
|
|
|
$
|
191
|
|
|
$
|
22,434
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2013 Total Tesoro Logistics LP
|
||||||
|
Tesoro Logistics LP (Partnership) (a)
|
|
|
Predecessors
|
|
|||||||
Expansion
|
$
|
26,337
|
|
|
|
$
|
—
|
|
|
$
|
26,337
|
|
Maintenance
|
6,142
|
|
|
|
191
|
|
|
6,333
|
|
|||
Total Capital Expenditures
|
$
|
32,479
|
|
|
|
$
|
191
|
|
|
$
|
32,670
|
|
•
|
High Plains pipeline reversal project which is expected to increase throughput on the High Plains pipeline by over
50 percent
. The project commenced in 2013 and has an expected completion in 2014. The High Plains pipeline reversal project has a total expected spend of
$35.0 million
.
|
•
|
A new truck rack at the site of the existing Anacortes terminal acquired as part of the West Coast Logistics Assets, which is expected to add an additional
6,000
to
7,000
barrels per day of gasoline and diesel throughput. The project has a total estimated capital spend of $23.0 million and is expected to be complete in 2015. The estimated current year capital spend is between $5.0 million and $10.0 million.
|
•
|
Projects to expand and optimize the Southern California distribution system with 2014 expected spending of
$25.0 million
, which has been adjusted to include additional projects associated with the Los Angeles Logistics Assets. The project is expected to increase throughput and expand ancillary services.
|
•
|
Connolly Gathering System construction with estimated capital spending of $150.0 million, with current year spending expected to be $25.0 million. The Connolly Gathering System will gather crude oil from various points in Dunn County, North Dakota for delivery at the existing Connolly Station and is expected to have a capacity of approximately 60,000 bpd. We expect the first barrels will be delivered into the main line in late 2014 to early 2015.
|
•
|
the suspension, reduction or termination of Tesoro’s obligation under our commercial agreements and our secondment and logistics services agreement;
|
•
|
changes in global economic conditions and the effects of the global economic downturn on Tesoro’s business and the business of its suppliers, customers, business partners and credit lenders;
|
•
|
changes in the expected spending related to the responsibility the Partnership assumed for performing testing and associated pipeline repairs pursuant to the Corrective Action Order in the Northwest Products System acquisition;
|
•
|
a material decrease in Tesoro’s profitability;
|
•
|
a material decrease in the crude oil produced in the Bakken Shale/Williston Basin area of North Dakota and Montana;
|
•
|
disruptions due to equipment interruption or failure at our facilities, Tesoro’s facilities or third-party facilities on which Tesoro’s business is dependent;
|
•
|
changes in the expected benefits of our transactions relating to our acquisitions from Tesoro and third parties including the acquisitions of the Los Angeles Terminal Assets, the Northwest Products System, the Los Angeles Logistics Assets and the West Coast Logistics Assets;
|
•
|
the risk of contract cancellation, non-renewal or failure to perform by Tesoro’s customers, and Tesoro’s inability to replace such contracts and/or customers;
|
•
|
Tesoro’s ability to remain in compliance with the terms of its outstanding indebtedness;
|
•
|
the timing and extent of changes in commodity prices and demand for Tesoro’s refined products;
|
•
|
actions of customers and competitors;
|
•
|
changes in our cash flow from operations;
|
•
|
state and federal environmental, economic, health and safety, energy and other policies and regulations, including those related to climate change and any changes therein, and any legal or regulatory investigations, delays or other factors beyond our control;
|
•
|
operational hazards inherent in refining operations and in transporting and storing crude oil and refined products;
|
•
|
earthquakes or other natural disasters affecting operations;
|
•
|
changes in capital requirements or in execution of planned capital projects;
|
•
|
the availability and costs of crude oil, other refinery feedstocks and refined products;
|
•
|
changes in the cost or availability of third-party vessels, pipelines and other means of delivering and transporting crude oil, feedstocks and refined products;
|
•
|
direct or indirect effects on our business resulting from actual or threatened terrorist incidents or acts of war;
|
•
|
weather conditions affecting our or Tesoro’s operations or the areas in which Tesoro markets its refined products;
|
•
|
seasonal variations in demand for refined products;
|
•
|
adverse rulings, judgments, or settlements in litigation or other legal or tax matters, including unexpected environmental remediation costs in excess of any accruals, which affect us or Tesoro;
|
•
|
risks related to labor relations and workplace safety;
|
•
|
changes in insurance markets impacting costs and the level and types of coverage available;
|
•
|
the coverage and ability to recover claims under our insurance policies; and
|
•
|
political developments.
|
Period
|
Total Number of Units Purchased (a)
|
|
Average Price Paid per Unit
|
|
Total Number of Units Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Units that May Yet Be Purchased Remaining at Period End Under the Plan or Programs (In Thousands)
|
||||||
April 2014
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
May 2014
|
338
|
|
|
$
|
68.75
|
|
|
—
|
|
|
$
|
—
|
|
June 2014
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
338
|
|
|
|
|
—
|
|
|
|
(a)
|
The entire
338
units were acquired from employees during the second quarter of 2014 to satisfy tax withholding obligations in connection with the vesting of service phantom unit awards issued to them.
|
Exhibit Number
|
|
Description of Exhibit
|
|
|
|
2.1
|
|
Contribution, Conveyance and Assumption Agreement, dated as of June 23, 2014, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Alaska Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, Tesoro Logistics Operations LLC and Tesoro Logistics Pipelines LLC (incorporated by reference herein from Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed on June 23, 2014).
|
|
|
|
3.1
|
|
Second Amended and Restated Limited Liability Company Agreement of Tesoro Logistics GP, LLC, dated as of July 1, 2014, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Alaska Company LLC, and Tesoro Logistics GP, LLC (incorporated by reference herein from Exhibit 3.1 to the Partnership’s Current Report on Form 8-K filed on July 1, 2014).
|
|
|
|
*10.1
|
|
Construction Service Agreement - Anacortes Products Terminal, dated as of July 28, 2014 between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC.
|
|
|
|
10.2
|
|
Terminalling Services Agreement – Nikiski, dated as of July 1, 2014, among Tesoro Alaska Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein from Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on July 1, 2014).
|
|
|
|
10.3
|
|
Terminalling Services Agreement – Anacortes, dated as of July 1, 2014, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Logistics Operations LLC (incorporated by reference herein from Exhibit 10.2 to the Partnership’s Current Report on Form 8-K filed on July 1, 2014).
|
|
|
|
10.4
|
|
Amendment No. 1 to Anacortes Track Use and Throughput Agreement, dated as of July 1, 2014, between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC (incorporated by reference herein from Exhibit 10.3 to the Partnership’s Current Report on Form 8-K filed on July 1, 2014).
|
|
|
|
10.5
|
|
Terminalling Services Agreement – Martinez, dated as of July 1, 2014, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein from Exhibit 10.4 to the Partnership’s Current Report on Form 8-K filed on July 1, 2014).
|
|
|
|
10.6
|
|
Storage Services Agreement - Anacortes, dated as of July 1, 2014, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Logistics Operations LLC (incorporated by reference herein from Exhibit 10.5 to the Partnership’s Current Report on Form 8-K filed on July 1, 2014).
|
|
|
|
10.7
|
|
First Amendment to Ground Lease, dated as of July 1, 2014, between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC (incorporated by reference herein from Exhibit 10.6 to the Partnership’s Current Report on Form 8-K filed on July 1, 2014).
|
|
|
|
10.8
|
|
Ground Lease dated as of July 1, 2014, between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC (incorporated by reference herein from Exhibit 10.7 to the Partnership’s Current Report on Form 8-K filed on July 1, 2014).
|
|
|
|
10.9
|
|
Martinez License Agreement, dated as of July 1, 2014, between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC (incorporated by reference herein from Exhibit 10.8 to the Partnership’s Current Report on Form 8-K filed on July 1, 2014).
|
|
|
|
10.10
|
|
Martinez Rights Agreement, dated as of July 1, 2014, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Logistics Operations LLC (incorporated by reference herein from Exhibit 10.9 to the Partnership’s Current Report on Form 8-K filed on July 1, 2014).
|
|
|
|
10.11
|
|
Third Amended and Restated Omnibus Agreement, dated as of July 1, 2014, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics LP and Tesoro Logistics GP, LLC (incorporated by reference herein from Exhibit 10.10 to the Partnership’s Current Report on Form 8-K filed on July 1, 2014).
|
|
|
|
10.12
|
|
Secondment and Logistics Services Agreement, dated as of July 1, 2014, among Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics Operations, LLC, Tesoro Logistics Pipelines LLC, Tesoro High Plains Pipeline Company LLC, Tesoro Logistics Northwest Pipeline LLC and Tesoro Alaska Pipeline Company LLC (incorporated by reference herein from Exhibit 10.11 to the Partnership’s Current Report on Form 8-K filed on July 1, 2014).
|
|
|
|
Exhibit Number
|
|
Description of Exhibit
|
10.13
|
|
Termination Agreement, dated as of July 1, 2014, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics Operations, LLC and Tesoro High Plains Pipeline Company LLC (incorporated by reference herein from Exhibit 10.12 to the Partnership’s Current Report on Form 8-K filed on July 1, 2014).
|
|
|
|
*31.1
|
|
Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*31.2
|
|
Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*32.1
|
|
Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*32.2
|
|
Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
**101.INS
|
|
XBRL Instance Document
|
|
|
|
**101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
**101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
**101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
**101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
**101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith
|
**
|
Submitted electronically herewith
|
|
|
TESORO LOGISTICS LP
|
|
|
|
|
|
|
|
By:
|
Tesoro Logistics GP, LLC
|
|
|
|
Its general partner
|
|
|
|
|
Date:
|
August 1, 2014
|
By:
|
/s/ GREGORY J. GOFF
|
|
|
|
Gregory J. Goff
|
|
|
|
Chairman of the Board of Directors and Chief Executive Officer
|
|
|
|
|
Date:
|
August 1, 2014
|
By:
|
/s/ G. SCOTT SPENDLOVE
|
|
|
|
G. Scott Spendlove
|
|
|
|
Director, Vice President and Chief Financial Officer
|
1.0
|
Nature of Agreement
|
1.1
|
This Agreement establishes the terms applicable to the Work, as may be specified in Exhibit B or another written agreement between the Parties referencing this Agreement.
|
2.0
|
Definitions
|
2.1
|
“Applicable Laws”
mean laws, regulations, statutes, codes, rules, orders, permits, policies, licenses, certifications, decrees, standards, or interpretations imposed by any governmental authority that apply to the Services or this Agreement, including those within the Area of Operations or the country where the Services are performed.
|
2.2
|
“Area of Operations”
means the area (i) described in Exhibit D or (iii) any other area within TLO’s operational control where TRMC performs or is expected to perform the Work.
|
2.3
|
“Claim”
means any and all demands, causes of action, damages (whether compensatory, punitive, statutory or otherwise), losses, penalties, fines, and/or expenses (including reasonable attorneys’ fees, expert fees and litigation or arbitration costs) of every kind and character, whether asserted by Tesoro or a third party.
|
2.4
|
“
TLO
” means the party listed in the preamble above who has contracted with TRMC for the Work.
|
2.5
|
“
TRMC
” means the party listed in the preamble above who, according to the terms and conditions of this Agreement, will provide the Work to TLO.
|
2.6
|
“
FCO
” means Field Change Order.
|
2.7
|
“
FCR
” means Field Change Request.
|
2.8
|
“
Force Majeure
” means an act of God, strike, lockout, or other industrial disturbance, act of public enemy, terrorism, war, blockade, fire, storm or governmental action, governmental restraint, or any other cause, whether of the kind enumerated above or not, which is not reasonably within the control of the Party asserting a Force Majeure.
|
2.9
|
“
Goods
” shall mean personal property, materials, supplies and equipment included within the Work.
|
2.10
|
“
PO
” means Purchase Order.
|
2.11
|
“
Services
” means those services as specified in Exhibit B or other written agreement between the Parties referencing this Agreement.
|
2.12
|
“
SO
” means Service Order.
|
2.13
|
“
Substance
” means alcohol, drug(s), chemical(s), illegal or prescribed, that may be inhaled, injected, absorbed or taken by mouth that may impair an individual in any way.
|
2.14
|
“
Work
” includes the furnishing of Services and delivery by TRMC of all labor, supervision, materials, tools, equipment and supplies which may be necessary to provide the work as indicated on Exhibit B, attached hereto.
|
3.0
|
Agreement Price
|
3.1
|
TLO shall pay TRMC a lump sum price of $23,000,000.00 for the Work, subject to and in accordance with the pricing terms of Exhibit C, attached hereto.
|
4.0
|
Orders and Field Change Requests
|
4.1
|
TLO may request changes in the Work to be performed. Prior to the commencement of any additional or revised Work requested by TLO, TRMC shall provide TLO with a FCR to reflect the additional or revised Work to be performed and the revised costs thereof. TLO may approve said FCR, and, if the FCR is approved, shall issue a FCO before such additional or revised Work shall commence. Once so approved by TLO, a FCO shall amend the applicable price indicated in section 3.0 above and Exhibit C. Any changes to any Work requested by TLO that do not affect TRMC’s net costs shall be without additional cost to TLO.
|
5.0
|
Term of Agreement
|
5.1
|
This Agreement shall become effective on the Effective Date and will continue until July 1, 2014 and, unless terminated sooner in accordance with this Agreement, will continue thereafter on a month-to-month basis, subject to termination by either Party by giving the other Party thirty (30) days’ notice in writing, as set forth in Article 19 of this Agreement, titled “Notices”.
|
5.2
|
If TLO decides that it is necessary to continue ongoing Work after notice of termination is given, then termination shall not be effective until the ongoing Work and the transition thereof is completed or made secure to the satisfaction of TLO, unless TLO, in its sole discretion, decides on an earlier effective termination date.
|
6.0
|
Inspection, Testing, Acceptance, and Rejection
|
6.1
|
TLO may inspect and test the Work and also reject any or all of the same not conforming as to quality, type or quantity as stated in Exhibit B, even if payment has been made by TLO to TRMC. TLO shall be under no obligation or duty to inspect the Work. Unless Exhibit B or an FCR specifically provides otherwise, TLO’s inspection of or failure to inspect any Work shall not limit, waive, release or otherwise affect TRMC’s guaranties and warranties provided herein or relieve TRMC of any other responsibilities hereunder. TLO’s failure to inspect any particular Work shall not be a continuing waiver of its right to inspect any future Work to be performed hereunder.
|
6.2
|
TRMC shall furnish to TLO all information and data as may be reasonably required to perform TLO's inspection. TLO reserves the right at any time to cancel or suspend the Work if Tesoro’s inspection reveals that the Work being performed does not conform to applicable safety laws and/or regulations.
|
6.3
|
The right to test and reject non-conforming Work includes, but is not limited to: processes, technical information, computer software, raw materials, components, intermediate assemblies, and end products
|
6.4
|
TLO shall have the absolute right to reject any Work that is deficient or non-conforming with respect to the specifications contained in Exhibit B or the warranties contained herein, and TLO shall be under no obligation to pay for any such rejected Work. In the event TLO accepts such Work, TLO shall continue to retain any and all of its remedies provided by the terms of this Agreement, including, but not limited to, (i) conditionally accepting such defective or non-conforming Work subject to an equitable price reduction; (ii) correcting or replacing such defective or non-conforming Work and back-charging TRMC for all costs incurred by TLO; (iii) requiring TRMC to promptly repair or replace such defective or non-conforming Work or materials or equipment at TRMC’s sole expense; or (iv) terminating this Agreement.
|
6.5
|
All materials and equipment delivered or installed and Work performed by TRMC shall be deemed to be accepted when the same have been determined by TLO in its discretion to be in conformance with the specifications contained in Exhibit B and the warranties provided herein. TLO’s inspection or acceptance of or payment for any Work shall not constitute a waiver of any warranties, rights or remedies.
|
6.6
|
TRMC is under a continuing obligation, subsequent to the performance of any Work, to notify TLO in the event TRMC discovers or becomes aware of any non-conformity in the delivered Work performed. TRMC must provide written notice to Tesoro within twenty-four (24) hours of such discovery.
|
7.0
|
Scheduling and Suspension of Services and/or Work
|
7.1
|
TRMC shall strictly adhere to the delivery dates and completion schedules specified by TLO in Exhibit B. The obligation of TRMC to meet the delivery dates and schedules is important to this Agreement.
|
7.2
|
If TRMC believes it may be unable to comply with any delivery and/or installation date or completion schedule, TRMC shall promptly notify TLO in writing of the probable length of any anticipated delay and the reasons for it.
|
7.3
|
Acceptance of late performance of the Work shall not be deemed a waiver of TLO’s right to deduct the late performance penalties set forth on Exhibit C, nor will it act as a modification of any of TRMC 's performance obligations hereunder.
|
7.4
|
TLO may, by written directive, suspend all or part of any Work to be performed for a period not to exceed ninety (90) days. Within such period, or any extension thereof to which the Parties may agree, TLO shall either (i) cancel such suspension, or (ii) terminate the Work covered by suspension in accordance with this Agreement. In the event that TLO suspends performance of Work, other than by reason of a breach by TRMC of its representations and warranties hereunder, then the periods set forth in Exhibit C that occur after such suspension shall be extended by the period of such suspension.
|
8.0
|
Offset and Liens
|
8.1
|
TRMC shall keep TLO’s property free of all liens and claims of TRMC contractors and other third parties, which may arise as a result of TRMC or its contractor’s performance of the Work.
|
8.2
|
TRMC, at its own expense, shall secure the prompt discharge of any lien(s) which may arise out of or in connection with TRMC or its contractor’s performance of the Work.
|
8.3
|
If TRMC fails to discharge any lien or Claim of lien not permitted by this Article, within five (5) business days from receipt of notice by TLO to TRMC, Tesoro may discharge or release the liens or Claim of lien, and TRMC shall pay TLO its costs for the release and reasonable attorneys' fees and other costs associated with securing the release or settlement of lien.
|
9.0
|
Warranties and Representations
|
9.1
|
TRMC will construct and deliver to TLO an operable truck loading rack at the site described on Exhibit D that is in conformance with the specifications set forth on Exhibit B, and is free of material defects and in compliance with all applicable laws and regulations and capable of blending and loading onto trucks light petroleum products in accordance with applicable laws and regulations and customary industry standards.
|
9.2
|
TRMC shall utilize employees and contractors to perform all Work in a good and workmanlike manner with due diligence and without undue delay or interruption. TRMC warrants that it will employ employees and contractors who have adequate equipment, in good working order, free from defects and fit for its intended use of performing the Work, and that TRMC and such contractors will have fully trained and adequately supervised personnel perform the Work who are capable of safely and properly operating the equipment, and that the Work shall be performed as economically to TLO as possible and in full compliance with TLO’s safety and environmental rules and policies.
|
9.3
|
The representations and warranties contained herein shall extend to the Work performed by TRMC contractors to the same extent as to any such Work performed by TRMC.
|
9.4
|
TRMC hereby agrees to assign TLO any and all warranties and guarantees from third party contractors, suppliers and manufacturers and to cooperate in the enforcement of such warranties and guarantees.
|
9.5
|
TRMC shall: (i) conduct its operations in such a manner as to cause a minimum of interference with TLO’s operations and the operations of other contractors at the jobsite; and (ii) protect all persons and property thereon from damage or injury.
|
9.6
|
If any Work performed or materials or equipment installed by TRMC or its contractors shall prove defective in title, material and/or workmanship, within eighteen (18) months from the date of receipt by TLO, or one year of the date of installation, whichever occurs first in time, TLO shall notify TRMC in writing of such defect or non-compliance within sixty (60) days of discovery of such defect or non-compliance, and TRMC shall, at its option, modify, repair or replace said Goods or item, at no cost to TLO. TRMC shall take custody and title of the defective Goods or item upon installation of the replacement Goods or item. Adjustments for materials or equipment not manufactured by TRMC shall be made to the extent of any warranty of the manufacturer or supplier thereof. In the event any Goods are not available for use due to defects in materials, workmanship or engineering furnished by TRMC, the guarantee period shall be extended for a period equal to the time of delay due to non-use.
|
9.7
|
TLO shall not be entitled to recover any incidental or consequential damages by reason of any breach of warranty hereunder, and its sole and exclusive remedy against TRMC for defective or non-conforming Work shall be as set forth in Section 6.4; provided however, that if TLO should be unable to provide truck loading services to TRMC by reason of any defective or non-conforming Work that is not in compliance with the warranties and representations under this Agreement, then TRMC shall not have any right to assert any offsets, credits or other excuses that might it might be otherwise entitled to assert avoid payment for fixed commitments under any terminalling agreements between TLO and TRMC to the extent that TLO’s inability to perform or delay in performance of terminalling services is caused by defective or non-conforming Work performed by TRMC that is not in accordance with the warranties and representations contained herein.
|
9.8
|
TLO shall not be entitled to recover any incidental or consequential damages by reason of any failure by TRMC to meet the schedules for completion of the Work set forth in Exhibit B, and its sole and exclusive remedy against TRMC for delays in performance shall be as set forth in Exhibit C.
|
9.9
|
TRMC acknowledges that there are hazards inherent in TLO’s operations and that TLO’s facilities, equipment and premises may contain patent and latent hazardous conditions and defects. TRMC shall familiarize itself with the condition of TLO’s facilities and equipment prior to beginning such Work and TRMC accepts such facilities and equipment “AS IS, WHERE IS” for such Work.
|
10.0
|
Release and Indemnity
|
10.1
|
TO THE EXTENT CAUSED BY OR ARISING OUT OF TRMC’S NEGLIGENCE, WILLFUL MISCONDUCT, ACTS OR OMISSIONS, STRICT LIABILITY, OR BREACH OF THIS AGREEMENT IN THE PERFORMANCE OR NONPERFORMANCE OF THE SERVICES OR WORK OR TRMC’S BREACH OF THIS AGREEMENT, TRMC SHALL AND HEREBY DOES RELEASE, DEFEND, AND INDEMNIFY TLO, TESORO LOGISTICS LP AND TESORO LOGISTICS GP, LLC, FROM AND AGAINST ANY AND ALL CLAIMS, INCLUDING THOSE CAUSED BY OR ARISING OUT OF ANY AND ALL OF THE FOLLOWING, WHETHER OR NOT CONTRIBUTED TO BY THE ACT OR OMISSION OF ANOTHER (THIRD) PARTY:
|
A.
|
BODILY INJURY, ILLNESS OR DEATH TO ANY PERSONS, INCLUDING EMPLOYEES OF TRMC AND ITS CONTRACTORS;
|
B.
|
LOSS, DAMAGE AND DESTRUCTION OF PROPERTY;
|
C.
|
CLAIMED OR ACTUAL INFRINGEMENT OR CONTRIBUTORY INFRINGEMENT OF ANY PATENT, OR INFRINGEMENT OF ANY COPYRIGHT OR TRADEMARK, OR MISAPPROPRIATION OF ANY TRADE SECRET;
|
D.
|
A BREACH OF ANY OF THE REPRESENTATIONS OR WARRANTIES CONTAINED IN ARTICLE 9 HEREOF; AND
|
E.
|
ANY CLAIMS ARISING IN CONNECTION WITH A LIEN BECOMING FIXED UPON THE AREA OF OPERATIONS OR OTHERWISE ASSERTED AGAINST ANY PROPERTY OF TLO AS A RESULT OF TRMC FAILING TO PAY (OR TO PROCURE THE PAYMENT OF) ITS DEBTS.
|
10.2
|
TRMC’S RELEASE, DEFENSE AND INDEMNITY OBLIGATIONS SHALL BE CONSTRUED IN ACCORDANCE WITH AND ENFORCEABLE TO THE MAXIMUM EXTENT PERMITTED BY LAW, AND IF ANY PORTION OF THIS ARTICLE 10 SHOULD BE DEEMED TO BE LEGALLY UNENFORCEABLE, THIS ARTICLE 10 SHALL BE DEEMED AMENDED TO PROVIDE FOR TRMC’S OBLIGATIONS HEREUNDER TO BE THE MAXIMUM OBLIGATIONS ALLOWABLE UNDER APPLICABLE LAW, AND THE REMAINING PORTIONS SHALL BE ENFORCED TO THE MAXIMUM EXTENT ALLOWED BY APPLICABLE LAW. IN THOSE CLAIMS FOR WHICH TRMC IS REQUIRED TO INDEMNIFY AND/OR DEFEND CLAIMS AGAINST TLO, TLO SHALL HAVE THE RIGHT, AT ITS OPTION AND EXPENSE, TO PARTICIPATE IN THE DEFENSE OF ANY SUCH CLAIM WITHOUT RELIEVING TRMC OF ANY OBLIGATIONS HEREUNDER.
|
11.0
|
Insurance
|
11.1
|
TRMC shall, at its sole cost and expense, obtain and maintain in force at all times during the term of this Agreement, sufficient insurance (i) as may be required by law, and (ii) to protect TRMC and TLO from third party claims arising out of or connected with the performance of the Work hereunder.
|
11.2
|
TRMC shall require all of its contractors to provide the insurance coverage (including additional insured, waiver of subrogation, certificates and non-cancellation) as indicated in Exhibit A, attached hereto.
|
11.3
|
The existence or non-existence of insurance as required by this Agreement will not limit TRMC’s liability for any claims asserted against TLO.
|
12.0
|
Responsibility for Loss or Damage to Equipment and Materials
|
12.1
|
Unless otherwise agreed by the Parties, TLO shall not safeguard or protect any vehicles, vessels, tools, equipment, machinery, supplies or other personal property belonging to TRMC, its contractors or employees, whether or not on TLO’s premises, and the owners of such property shall be solely responsible for the protection of such property.
|
13.0
|
Independent Contractor Relationship
|
13.1
|
TRMC will be an independent contractor in its performance of all Work hereunder. TRMC shall have exclusive direction and control of its contractors and shall be solely responsible for its acts and omissions and for the acts and omissions of its contractors. TLO is interested only in the results obtained and has only general right of inspection, review and approval of the Work, in order to assure satisfactory completion of the Work and compliance with the terms of this Agreement.
|
14.0
|
Safety and Environmental Requirements
|
14.1
|
TRMC shall take any and all necessary precautions to prevent the occurrence of any injury (including death) to any person(s), or any damage to any property or the environment, arising out of acts or omissions of TRMC.
|
14.2
|
TRMC agrees to comply with any safety and environmental requirements set forth by the TLO environmental, health and safety manager at the location where Work is performed. Approval of any exceptions to safety or environmental requirements shall be handled by the safety manager at the location where Work is performed.
|
15.0
|
Security and Background Check Requirements
|
15.1
|
TRMC shall have background checks performed on all of its contractors and their employees who will have access to the Area of Operations, unescorted by a TLO or TRMC employee.
|
16.0
|
Laws, Rules, and Regulations
|
16.1
|
TRMC will ensure that its employees and contractors comply with all federal, state, and local laws, rules, regulations and orders applicable to all Work performed under this Agreement. TRMC shall have its employees and contractors secure and maintain current all required permits, licenses, certificates, and approvals for the Work. TRMC employees and contractors shall specifically comply with all applicable federal, state, and local environmental, employment, safety and zoning laws, rules, and regulations as amended on one or more occasions. Without limiting the foregoing, to the extent required by law, rule or regulation, and as applicable to the Work performed under this Agreement, TRMC shall and shall require its contractors to comply, with the following:
|
(i)
|
Equal Opportunity: Executive Order 11246, the Equal Opportunity Clause prescribed in 41 CFR 60-1.4(d) (race, color, religion, sex and national origin); 41 CFR 60-1.7 (filing the Employer Information Report annually); 41 CFR 60-1.8 (non-segregated facilities); 41 CFR 60-1.40 (establishment of a written affirmative action plan); 41 CFR 60-741.5 (workers with disabilities); 48 CFR Chapter 1 Subpart 19.7 (Small Business and Small Disadvantaged Business Concerns); Executive Order 12138 (women-owned businesses);
|
(ii)
|
The Fair Labor Standards Act of 1938, as amended and related regulations;
|
(iii)
|
The Immigration Reform and Control Act of 1986 and related regulations;
|
(iv)
|
TRMC and its Contractor’s employees, agents, subcontractors, representatives and servants performing operation or maintenance work on Pipelines or Pipeline Facilities (as defined in 49 CFR 192 and 195) under this Agreement, will: 1) comply with the Accountable Pipeline Safety and Partnership Act of 1996 (the “
Pipeline Safety Act
”), 49 CFR Parts 192 or 195, 2) meet the U.S. Department Transportation’s Operator qualification requirements and Tesoro’s qualification requirements by being qualified by the National Center for Construction Education Research (“
NCCER
”),Operator Qualification Solutions Group (“
OQSG
”), or any other qualification program approved by Tesoro, and 3) create and retain required records under the Pipeline Safety Act and any regulations or rules promulgated in accordance therewith;
|
(v)
|
Anti-Drug Plan and Drug Testing: 46 CFR Parts 4, 5, and 16 and 49 CFR Parts 40 and 199 (requirements of the U.S. Coast Guard, the U.S. Department of Transportation);
|
(vi)
|
Occupational Safety: The Occupational Safety and Health Act and all OSHA regulations, including without limitation those regulating the handling and use of asbestos or asbestos-containing material, 40 CFR Part 61 Subparts A and M, 29 CFR 1926 (Construction, Industrial Standards for Asbestos), 29 CFR 1910.1001 (Asbestos), 29 CFR 1910.134 (Respiratory Protection) 29 CFR Subpart K (Medical) and all other applicable state rules and regulations for the abatement of asbestos materials;
|
(vii)
|
Water Pollution. The Clean Water Act, as amended, The Oil Pollution Act of 1990, the Federal Water Pollution Control Act;
|
(viii)
|
Hazardous Substances and Wastes: The Resource Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act Amendments of 1980, the Hazardous and Solid Waste Amendments of 1984, the Hazardous Materials Transportation Act, as amended, the Toxic Substance Control Act, as amended; the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), as amended by the Superfund Amendments and Re-authorization Act of 1986;
|
(ix)
|
The Clean Air Act, as amended;
|
(x)
|
Executive Order 13496 Compliance: TRMC agrees to comply with the provisions of 29 CFR Part 471.
|
(xi)
|
Where applicable, all Department of Homeland Security provisions including, but not limited to Transportation Worker Identification Credential (“
TWIC
”).
|
(xii)
|
Where applicable, the requirements of 41 CFR 60-300.5(a) which prohibits discrimination against qualified protected veterans, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans.
|
16.2
|
In the event any provision of this Agreement is inconsistent with or contrary to any applicable law, rule, regulation, or order of a court of competent jurisdiction, said provision shall be deemed to be modified to the extent required to comply with said law, rule, regulation, or order, and this Agreement as so modified will remain in full force and effect.
|
16.3
|
TRMC SHALL AND DOES HEREBY RELEASE, DEFEND, INDEMNIFY, AND HOLD TLO HARMLESS FROM ALL CLAIMS, JUDGEMENTS, DAMAGES, LOSSES, LIABILITIES, EXPENSES, AND ANY COSTS RELATED THERETO (INCLUDING WITHOUT LIMITATION COURT COSTS, EXPERT FEES, AND REASONABLE ATTORNEYS’ FEES) ARISING IN WHOLE, OR IN PART FROM, OR IN ANY WAY RELATED TO, TRMC OR ITS CONTRACTOR’S FAILURE TO COMPLY WITH FEDERAL, STATE, AND LOCAL LAWS, RULES, REGULATIONS, AND ORDERS APPLICABLE TO ALL WORK PERFORMED UNDER THIS AGREEMENT.
|
17.0
|
Force Majeure
|
17.1
|
In the event either Party is rendered unable by Force Majeure to carry out its obligations under this Agreement, other than its obligation to indemnify or make money payments, that Party shall give the other Party prompt written notice of the Force Majeure with full particulars concerning it; thereupon, the obligations of the Party giving the notice, so far as they are affected by the Force Majeure, shall be suspended during, but not longer than, the continuance of the Force Majeure. The affected Party shall use all reasonable dispatch to remedy the Force Majeure situation as quickly as possible; provided, however, the Party shall not be required to settle any strike or other labor dispute contrary to its wishes. In the event that performance of Work is suspended by reason of Force Majeure, then the periods set forth in Exhibit C that occur after such suspension shall be extended by the period of such suspension.
|
18.0
|
Subcontracting
|
18.1
|
TRMC may hire contractors to perform the Work, but TRMC is solely responsible and shall timely provide for payment to such contractor(s). TRMC shall provide TLO with adequate advance notice of the identity of each contractor to be hired to perform Work, and any other information reasonably required or requested by TLO with respect to such contractor(s). TLO may approve or reject contractor(s), and may reject any contractor with or without cause. TRMC shall not employ or continue to employ any contractor rejected by TLO to perform the Work hereunder. Contractor(s) hired by TRMC shall not be deemed to be servants, agents, employees, representatives of TLO, but shall perform in accordance with the terms hereof; provided, however, TRMC shall remain responsible for acts and omissions of such contractor(s) and the performance and breach of this Agreement by such contractor(s).
|
19.0
|
Notices
|
19.1
|
Unless otherwise specifically provided for, any and all notices or other communications provided for under this Agreement shall be in writing or by confirmed e-mail address for the Parties listed below. Notices must be given in one or more of the following ways: (i) in person;(ii) by courier;(iii) by United States registered or certified mail with return receipt requested;(iv) by postage prepaid to the attention of the appropriate representative of the Party at the address set forth below;(v) by e-mail; or (vi) at such other physical or e-mail address as may be designated with ten (10) days prior thereto by notice to the other Party. Notice is deemed given when received by the Party to be notified or for e-mail, when receipt of the e-mail is confirmed; provided, however, that notices received after 5:00 PM or on a non-business day shall be deemed given the following business day; and provided further, that if mailed, notices cannot be given after reasonable effort at such address, notices shall be deemed constructively given three (3) days after being mailed.
|
TLO
|
|
TRMC
|
Travis Fisher
|
|
Donald J. Manuel
|
Director, Logistics, Engineering & Integrity
|
|
Senior Manager, Technical
|
19100 Ridgewood Parkway,
|
|
10200 West March Point Road
|
San Antonio, TX 78259
|
|
Anacortes, Washington 98221
|
Telephone: (210) 626-4903
|
|
Telephone: (360) 293-1688
|
E-mail: Travis.C.Fisher@tsocorp.com
|
|
E-mail: Don.J.Manuel@tsocorp.com
|
20.0
|
Confidentiality
|
20.1
|
TLO and TRMC may, in connection with Work contemplated under this Agreement, disclose Confidential Information to each other. Each Party will use reasonable efforts to prevent the disclosure of any of the other Party’s Confidential Information to third parties during the term of this Agreement and for a period of three (3) years from termination of this Agreement, provided that the recipient Party’s obligation under this paragraph shall not apply to:
|
(i)
|
Information that is already in the recipient Party’s possession with no obligation of confidentiality at the time of disclosure thereof;
|
(ii)
|
Information that is received from a third party having no obligation of confidentiality to the disclosing Party;
|
(iii)
|
Information that later becomes publicly known or part of the public domain through no fault of the recipient Party;
|
(iv)
|
Information that is independently developed by the recipient Party; or
|
(v)
|
Information that is required by law or regulation to be disclosed.
|
20.2
|
TRMC shall return to TLO all such Confidential Information, including all copies thereof, when and as requested by TLO during the term of this Agreement when the Work has been completed.
|
20.3
|
The provisions of this Article shall not apply to any information which was in TRMC’s possession prior to its disclosure by or on behalf of TLO to TRMC, or to any information which shall become part of the public domain or which shall become available to TRMC legitimately from a source other than TLO, or to any information which TRMC shall become legally compelled to disclose.
|
20.4
|
TLO is entitled to specific performance of this Article and to injunctive relief against further violations, as well as any further remedies at law or in equity available to TLO.
|
20.5
|
The provisions of this Article survive the termination of this Agreement.
|
21.0
|
Governing Law
|
21.1
|
The laws of the State of Texas, without giving effect to principles of conflict of laws, shall govern all matters arising under this Agreement, including but not limited to the validity, interpretation and enforcement of this Agreement, the rights and obligations of the Parties hereunder and all tort claims.
|
22.0
|
Attorneys' Fees
|
22.1
|
The prevailing Party in any dispute hereunder, in addition to actual damages and any other legal or equitable remedies to which it may be entitled, shall be entitled to recover reasonable attorneys’ fees and costs from the non-prevailing Party.
|
23.0
|
Contract in Entirety
|
23.1
|
This Agreement sets forth the full and complete agreement of the Parties as to the Work, but shall alter, amend or change the Ground Lease or any other commercial agreement between the Parties except as specifically provided herein.
|
24.0
|
Modifications or Waivers
|
24.1
|
No change, modification, or alteration of this Agreement will be valid unless written and signed by the authorized representatives of the Parties hereto, and no course of dealing between the Parties is construed to alter the terms hereof. No waiver of any breach of this Agreement will be deemed to be a waiver of any other or subsequent breach.
|
25.0
|
Survival
|
25.1
|
Articles 8.0 through 12.0, and 20.0 through 25.0, and all other provisions of this Agreement that by their terms are intended to survive termination or expiration of this Agreement, including any accrued obligations, warranties, representations, and indemnities under this Agreement, shall survive any termination or expiration of this Agreement.
|
26.0
|
Construction
|
26.1
|
In the event of any ambiguity in any of the terms or conditions of this Agreement such ambiguity shall not be construed for or against any Party hereto on the basis that such Party did or did not author the Agreement. The underlined headings used throughout this Agreement are for administrative convenience only and shall be disregarded for the purposes of construing this Agreement.
|
26.2
|
|
Tesoro Logistics Operations
LLC
|
Tesoro Refining & Marketing Company LLC
|
By: /s/ PHILLIP M. ANDERSON
|
By: /s/ KEITH M. CASEY
|
Name: Phillip M. Anderson
|
Name: Keith M. Casey
|
Title: President
|
Title: Executive Vice President, Operations
|
a.
|
Statutory requirements
in the jurisdiction where the operations are conducted. This includes coverage under the U.S. Longshore and Harbor Workers’ Compensation Act as well as the Outer Continental Shelf Lands Act with voluntary compensation for marine operations to include transportation, wages, maintenance and cure, and Jones Act Coverage where required.
|
b.
|
Coverage B Employer’s Liability
with a minimum limit of
$1,000,000.00
.
|
c.
|
Endorsement to include a
waiver of subrogation
in favor of TRMC and TLO.
|
a.
|
Minimum combined single limit of
$1,000,000.00 per occurrence for bodily injury or property damage liability.
Deductible or self-retention amount must be shown on certificate of insurance.
|
b.
|
Blanket Contractual liability
specifically covering the indemnities contained in this Agreement.
|
c.
|
Products and Completed Operations
coverage.
|
d.
|
Personal Injury
coverage.
|
e.
|
Premises/operations
coverage.
|
f.
|
Explosion, blasting, underground damage and collapse coverage.
|
g.
|
Broad form property damage.
|
h.
|
TRMC and TLO named as
additional insured
.
|
i.
|
Endorsement to include a
waiver of subrogation
in favor of TRMC and TLO.
|
a.
|
Coverage for
all owned and non-owned, hired vehicles
.
|
b.
|
Minimum combined single limit of
$1,000,000.00 per occurrence for bodily injury and property damage liability.
Deductible or a self-retention amount must be shown on certificate.
|
c.
|
If applicable
,
Motor Carrier Policies of Insurance for Public Liability Endorsement (Motor Carrier Act of 1980) with Minimum Limits of $1,000,000 Bodily Injury and Property Damage per occurrence.
|
d.
|
TRMC and TLO named as
additional insured.
|
e.
|
Endorsement to include a
waiver of subrogation
in favor of TRMC and TLO.
|
a.
|
Limits of Liability
not less than
$4,000,000.00
per occurrence.
|
b.
|
TRMC and TLO named as
additional insured.
|
c.
|
Additional excess limits may be utilized to supplement inadequate limits in the primary policies required in Items 1(b), 2(a) and 3(b) above.
|
d.
|
Endorsement to include a
waiver of subrogation
in favor of TRMC and TLO.
|
1.
|
The truck terminal component shall consist of two covered truck lanes with two loading positions per lane with three loading arms per position, a vapor recovery unit, additization facilities, a driver kiosk, and security features, all located on the same plot space as the existing diesel and propane truck loading facility.
|
2.
|
The “off sites” component shall consist of tanks, piping and pumps to transfer regular grade gasoline bob, premium grade gasoline bob, and ULSD products from refinery storage to the truck terminal. The system shall deliver regular gasoline and diesel truck loading rates up to 2000 gpm and premium gasoline truck loading rate up to 1000 gpm.
|
3.
|
The ethanol receiving and storage component shall consist of a rail spur, rail car and truck offloading equipment, an ethanol storage tank, pumps and piping to transfer the ethanol to the truck terminal for blending into the gasoline.
|
Completion Milestones
|
|
Timing
|
$MM
|
Award
|
5%
|
Jul 1, 2014
|
1
|
Day Tank Construction
|
25%
|
Nov 1, 2014
|
6
|
Truck Rack Module Delivery
|
30%
|
Jan 1, 2015
|
7
|
Mechanically Complete
|
25%
|
Mar 1, 2015
|
6
|
Hold Back until Operational In-service Date* of April 30, 2015
|
15%
|
Apr 30, 2015
|
3
|
|
100%
|
|
23
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Tesoro Logistics LP;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
|
(d)
|
Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 1, 2014
|
/s/ GREGORY J. GOFF
|
|
|
Gregory J. Goff
|
|
|
Chief Executive Officer of Tesoro Logistics GP, LLC
|
|
|
(the general partner of Tesoro Logistics LP)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Tesoro Logistics LP;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
|
(d)
|
Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 1, 2014
|
/s/ G. SCOTT SPENDLOVE
|
|
|
G. Scott Spendlove
|
|
|
Chief Financial Officer of Tesoro Logistics GP, LLC
|
|
|
(the general partner of Tesoro Logistics LP)
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
/s/ GREGORY J. GOFF
|
|||
Gregory J. Goff
|
|||
Chief Executive Officer of Tesoro Logistics GP, LLC
(the general partner of Tesoro Logistics LP)
|
|||
August 1, 2014
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
/s/ G. SCOTT SPENDLOVE
|
|||
G. Scott Spendlove
|
|||
Chief Financial Officer of Tesoro Logistics GP, LLC
(the general partner of Tesoro Logistics LP)
|
|||
August 1, 2014
|