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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
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PART I.
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Page
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PART II.
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PART III.
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PART IV.
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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 (the “Northwest Products Pipeline”);
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a regulated common carrier refined products pipeline system connecting Tesoro’s Kenai refinery to Anchorage, Alaska;
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24
crude oil and refined products terminals and storage facilities in the western and midwestern U.S.;
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four
marine terminals in California;
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a rail-car unloading facility in Washington;
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a petroleum coke handling and storage facility in Los Angeles; and
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other pipelines which transport products and crude oil from Tesoro’s refineries to nearby facilities in Salt Lake City and Los Angeles.
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a truck terminal and storage tanks, located in Nikiski, Alaska;
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a truck terminal, rail loading and unloading facility, and storage tanks, all located at Tesoro’s refinery in Anacortes, Washington;
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a truck terminal and rail loading and unloading facility, all located at Tesoro’s refinery in Martinez, California; and
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all of Tesoro’s membership interests in Tesoro Alaska Pipeline Company LLC, a wholly-owned subsidiary of Tesoro, which owns an approximately 70-mile long common carrier refined products pipeline connecting Tesoro’s Kenai refinery to Anchorage, Alaska.
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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
(the “Los Angeles Logistics Assets Acquisition”);
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•
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six
marketing terminals and storage facilities located in Southern California (the “Los Angeles Terminal Assets”) effective
June 1, 2013
(the “Los Angeles Terminal Assets Acquisition”);
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the Anacortes rail car unloading facility assets (collectively, the “Anacortes Rail Facility”) effective November 15, 2012 (the “Anacortes Rail Facility Acquisition”);
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the Long Beach marine terminal and related short-haul pipelines, including the Los Angeles short-haul pipelines (collectively, the “Long Beach Assets”) effective September 14, 2012 (the “Long Beach Assets Acquisition”); and
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the Martinez crude oil marine terminal assets (collectively, the “Martinez Crude Oil Marine Terminal”) effective April 1, 2012 (the “Martinez Marine Terminal Acquisition”).
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Year Ended December 31,
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2014
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2013
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2012
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Gathering
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Crude oil gathering pipeline (a)
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11%
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13%
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20%
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Crude oil gathering trucking
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10%
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16%
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24%
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Gas gathering (a)
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2%
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—%
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—%
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Processing (a)
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NGL processing
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1%
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—%
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—%
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Fee-based processing
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1%
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—%
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—%
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Other processing
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2%
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—%
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—%
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Terminalling and Transportation (b)
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Terminalling
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55%
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59%
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47%
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Pipeline transportation
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18%
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12%
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9%
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(a)
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Includes revenues related to the crude oil and natural gas gathering operations and the natural gas processing facilities acquired in the Rockies Natural Gas Business Acquisition beginning December 2, 2014.
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(b)
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Our Predecessors did not record revenue for transactions with Tesoro in the Terminalling and Transportation segment prior to the effective date of each acquisition from Tesoro, with the exception of Regulatory Commission of Alaska (“RCA”) tariffs charged to Tesoro on the refined products pipeline included in the West Coast Logistics Assets Acquisition.
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a common carrier crude oil gathering and transportation system in North Dakota and Montana (the “High Plains System”);
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the Uinta Basin Gathering System which consists of natural gas gathering systems and compression assets located in northeastern Utah;
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an equity method investment, Uintah Basin Field Services, which operates gathering pipeline and gas compression assets located in the southeastern Uinta Basin; and
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approximately 57.8% of QEPM, whose assets include ownership interests in four gathering systems and two FERC-regulated pipelines through which it provides natural gas and crude oil gathering and transportation services.
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Year Ended December 31,
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2014
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2013
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2012
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Crude oil transported (bpd):
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Pipelines (a)
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123,355
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85,572
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66,615
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Trucking
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49,339
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44,363
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37,537
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Natural gas transported (thousands of MMBtu/d):
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Pipelines (b)
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86
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—
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—
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(a)
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Also includes barrels that were gathered and then delivered into our High Plains Pipeline by truck. The 2014 throughput includes barrels gathered from pipelines operated by QEPM, beginning December 2, 2014.
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(b)
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Includes throughput related to the natural gas gathering systems acquired in the Rockies Natural Gas Business Acquisition beginning December 2, 2014.
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The Green River Gathering Assets are primarily supported by “life-of-reserves” and long-term, fee-based gathering agreements.
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Rendezvous Gas is a non-wholly owned subsidiary of QEPM and Western Gas Partners, LP (“Western Gas”), which was formed to own and operate the infrastructure that transports gas from certain fields to several re-delivery points, including natural gas processing facilities that are owned by QEPM or a third party.
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Rendezvous Pipeline provides gas transportation services from the Blacks Fork processing complex in southwest Wyoming to an interconnect with the Kern River Pipeline. The capacity on the Rendezvous Pipeline system is contracted under long-term take or pay transportation contracts.
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Asset Type
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Length (
miles
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Compression (
bhp
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Throughput Capacity
(MMcf/d) (a)
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Average Daily Throughput
(Thousand MMBtu/d) (a)
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Gathering System
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Uinta Basin Gathering System
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Gas Gathering
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610
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54,306
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299
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200
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Uintah Basin Field Services, L.L.C. (b)
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Gas Gathering
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100
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5,360
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26
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3
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Green River System
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Green River Gathering Assets
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Gas Gathering
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365
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41,053
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737
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564
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Oil Gathering
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134
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—
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7,137 (c)
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3,769 (c)
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Water Gathering
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25
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—
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21,990 (d)
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14,155 (d)
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Oil Transmission
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60
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—
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40,800 (c)
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10,613 (c)
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Rendezvous Gas Services, L.L.C. (e)
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Gas Gathering
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311
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7,800
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1,032
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693
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Rendezvous Pipeline
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Gas Transmission
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21
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—
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450
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313
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Vermillion Gathering System
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Gas Gathering
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504
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23,932
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212
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97
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Three Rivers Gathering, L.L.C. (f)
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Gas Gathering
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52
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4,735
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212
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65
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Williston Gathering System
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Gas Gathering
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20
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239
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3
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2
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Oil Gathering
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18
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—
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7,000 (c)
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2,333 (c)
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Total
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2,220
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137,425
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(a)
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Represents 100% of the capacity as of December 31, 2014 and average daily throughput on the systems for the period of December 2, 2014 to December 31, 2014.
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(b)
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QEPFS’ ownership interest in Uintah Basin Field Services is 38%. Actual throughput presented in Management’s Discussion and Analysis in Part II excludes throughput related to QEPFS’ 38% ownership in Uintah Basin Field Services.
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(c)
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Capacity and throughput is measured in barrels of crude oil per day.
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(d)
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Capacity and throughput is measured in barrels of water per day.
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(e)
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QEPM’s ownership interest in Rendezvous Gas is 78%.
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(f)
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QEPM’s ownership interest in Three Rivers Gathering is 50%. Actual throughput presented in Management’s Discussion and Analysis in Part II excludes throughput related to QEPM’s 50% ownership in Three Rivers Gathering.
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Primary Location
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Asset Type
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Facility Type
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Throughput Capacity
(MMcf /d)
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Average Daily Throughput
(Thousand MMBtu/d) (a)
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Asset
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Vermillion Complex
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Southern Green River Basin
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Processing
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Cryogenic
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57
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63
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Uinta Basin Complex
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Uinta Basin
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Processing
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Cryogenic / Refrigeration
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650
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281
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Blacks Fork Complex
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Green River Basin
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Processing
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Cryogenic / Joule-Thomson
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835
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559
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Fractionation
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Fractionator
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15,000
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(b)
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8,947
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Emigrant Trail Complex
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Green River Basin
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Processing
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Cryogenic
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55
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(c)
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—
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Total
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Processing
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1,597
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903
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Fractionation
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15,000
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8,947
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(a)
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Represents 100% of the capacity as of December 31, 2014 and average daily throughput at the facilities for the period of December 2, 2014 to December 31, 2014.
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(b)
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Capacity and throughput for fractionation is measured in barrels of NGL per day.
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(c)
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Since May 2014 all the Emigrant Trail processing volumes have been diverted to the Blacks Fork processing plant.
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transferring refined products from terminals to trucks, barges and pipelines;
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delivering crude oil and intermediate feedstocks from vessels to refineries and terminals;
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transporting refined products for third-parties and Tesoro;
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unloading crude oil transported by unit train to Tesoro’s Washington refinery;
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providing ancillary services, including storage, ethanol blending and additive injection, and for barge loading or unloading fees; and
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handling and storing petroleum coke for Tesoro’s Los Angeles refinery.
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Year Ended December 31,
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2014
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2013
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2012
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Throughput by counterparty (bpd):
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Tesoro
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830,243
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609,933
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294,474
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Third parties
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87,037
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128,732
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74,219
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Total
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917,280
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738,665
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368,693
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Throughput by location (bpd):
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California Marine Terminals (a)
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459,785
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399,079
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186,682
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California Terminals and Storage Facilities (b)
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254,993
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165,211
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75,662
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Anacortes Rail Facility
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45,849
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46,656
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11,259
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Idaho Terminals (c)
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43,533
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33,608
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16,256
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Washington Terminals (d)
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39,571
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30,612
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16,700
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Utah Terminal
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31,150
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26,923
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28,998
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North Dakota Terminal
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22,700
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18,415
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15,789
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Alaska Terminals (e)
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19,699
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18,161
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17,347
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Total crude oil and refined products
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917,280
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738,665
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368,693
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(a)
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Includes two marine terminals that were acquired in the Los Angeles Logistics Assets Acquisition. As such, 2013 throughput includes predecessor volumes from June 1, 2013 through December 5, 2013 and TLLP volumes from December 6, 2013 through December 31, 2013.
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(b)
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Includes terminalling throughput from five terminals acquired in the Los Angeles Terminal Assets Acquisition, the Carson products terminal acquired in the Los Angeles Logistics Assets Acquisition and the Martinez terminal acquired in the West Coast Logistics Asset Acquisition. For the Carson products terminal, 2013 throughput includes predecessor volumes from June 1, 2013 through December 5, 2013 and TLLP volumes from December 6, 2013 through December 31, 2013. For the Martinez terminal, throughput volumes include predecessor volumes through June 30, 2014 and TLLP volumes from July 1, 2014 through December 31, 2014.
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(c)
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Includes the Boise and Pocatello terminals that were acquired in the Northwest Products System Acquisition on June 19, 2013.
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(d)
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Includes the Pasco terminal that was acquired in the Northwest Products System Acquisition on June 19, 2013, and the Anacortes terminal that was acquired in the West Coast Logistics Assets Acquisition on July 1, 2014. As such, throughput volumes for the Anacortes terminal include predecessor volumes through June 30, 2014 and TLLP volumes from July 1, 2014 through December 31, 2014.
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(e)
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Includes the Nikiski terminal that was acquired in the West Coast Logistics Assets Acquisition on July 1, 2014. As such, throughput volumes for the Nikiski terminal include predecessor volumes through June 30, 2014 and TLLP volumes from July 1, 2014 through December 31, 2014.
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(a)
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Includes storage capacity for refined products and ethanol only; excludes additive storage for gasoline and diesel.
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(b)
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Represents dedicated portion of total storage capacity for which we charge a per barrel monthly fee based on storage capacity.
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Year Ended December 31,
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2014
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2013 (a)
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2012
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Transportation volumes (bpd):
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Tesoro (b) (c)
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748,885
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170,468
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121,444
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Third parties
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72,831
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34,668
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—
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Total
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821,716
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205,136
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121,444
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(a)
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Includes throughput from the Northwest Products Pipeline from the June 19, 2013 acquisition date through December 31, 2013.
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(b)
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Los Angeles transportation pipelines were acquired on June 1, 2013 by Tesoro and later acquired by TLLP from Tesoro in the Los Angeles Logistics Assets Acquisition on December 6, 2013. Throughput includes TLLP volumes from December 6, 2013 through December 31, 2013. Tesoro did not separately track transportation volumes on the pipeline assets acquired in the Los Angeles Logistics Assets Acquisition; therefore, 2013 pipeline volume has not been adjusted to include the activity prior to December 6, 2013.
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(c)
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Includes volumes from the refined products pipeline acquired in the West Coast Logistics Assets Acquisition. As such, throughput includes predecessor volumes through September 29, 2014 and TLLP volumes from September 30, 2014 through December 31, 2014.
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Initiation Date
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Term
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Renewals
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Termination Provisions
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Refinery Shutdown Notice Period (a)
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Force Majeure
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Transportation Services Agreement (High Plains System)
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April 2011
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10 years
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2 x 5 years
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12 months
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TLLP can declare (unilateral)
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Second Amended and Restated Trucking Transportation Services Agreement (High Plains System)
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April 2011
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5 years
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1 x 5 years
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Second Amended and Restated Master Terminalling Services Agreement
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April 2011
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10 years
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2 x 5 years
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Amended Salt Lake City Storage and Transportation Services Agreement
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April 2011
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10 years
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2 x 5 years
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Amorco Terminal Use and Throughput Agreement (Martinez Marine)
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April 2012
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10 years
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2 x 5 years
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Amended Anacortes Track Use and Throughput Agreement
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November 2012
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10 years
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2 x 5 years
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N/A
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Carson Storage Services Agreement
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June 2013
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10 years
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2 x 5 years
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Amended and Restated Master Terminalling Services Agreement - Southern California
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June 2013
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10 years
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2 x 5 years
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Long Beach Storage Services Agreement
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December 2013
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10 years
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2 x 5 years
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Transportation Services Agreement (SoCal Pipelines)
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December 2013
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10 years
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2 x 5 years
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Carson Coke Handling Services Agreement
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December 2013
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10 years
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2 x 5 years
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Amended and Restated Long Beach Berth Access Use and Throughput Agreement (b)
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December 2013
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10 years
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2 x 5 years
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Long Beach Berth Throughput Agreement (b)
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December 2013
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10 years
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2 x 5 years
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Long Beach Pipeline Throughput Agreement
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December 2013
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10 years
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2 x 5 years
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Terminalling Services Agreement - Nikiski
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July 2014
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10 years
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2 x 5 years
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Terminalling Services Agreement - Anacortes
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July 2014
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10 years
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2 x 5 years
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Terminalling Services Agreement - Martinez
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July 2014
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10 years
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2 x 5 years
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Storage Services Agreement - Anacortes
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July 2014
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10 years
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2 x 5 years
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Martinez Dedicated LPG Storage Agreement
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July 2014
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10 years
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2 x 5 years
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Tesoro Alaska Pipeline Throughput Agreement
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September 2014
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10 years
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2 x 5 years
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(a)
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Fixed minimum volumes remain in effect during routine turnarounds.
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(b)
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Agreement gives Tesoro the option to renew for two five-year terms, or Tesoro may modify the term of the agreements to a twenty-year term by providing notice in accordance with each agreement.
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•
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pipelines operate as common carriers;
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•
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access to transportation services and pipeline rates be non-discriminatory;
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transported crude oil volumes must be apportioned without unreasonable discrimination if more crude oil is offered for transportation than can be transported immediately; and
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•
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pipeline rates are just and reasonable.
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•
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damages to pipelines, plants and facilities, related equipment and surrounding properties caused by earthquakes, floods, fires, severe weather, explosions and other natural disasters and acts of terrorism;
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•
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mechanical or structural failures on our pipelines, at our facilities or at third-party facilities on which our operations are dependent, including Tesoro’s facilities;
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•
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leaks or losses oil, natural gas, NGLs and other hydrocarbons or other regulated substances as a result of the malfunction of equipment or facilities;
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•
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curtailments of operations relative to severe seasonal weather;
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•
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damage to pipelines and other assets from construction, farm and utility equipment;
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•
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damage to third-party property or persons, including injury or death;
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•
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ruptures, fires and explosions; and
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•
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other hazards.
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•
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the volatility and uncertainty of regional pricing differentials;
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•
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the availability of drilling rigs for producers;
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•
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weather-related curtailment of operations by producers and disruptions to truck gathering operations;
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•
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the nature and extent of governmental regulation and taxation, including regulations related to the exploration, production and transportation of shale oil and natural gas, including hydraulic fracturing and natural gas flaring and rail transportation;
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•
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the development of third-party crude oil or natural gas gathering systems that could impact the price and availability of crude oil or natural gas in these areas; and
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•
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the anticipated future prices of crude oil, refined products, NGLs and natural gas in surrounding markets.
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•
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the risk of contract cancellation, non-renewal or failure to perform by their customers;
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•
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disruptions due to equipment interruption or failure at their facilities or at third-party facilities on which their business is dependent;
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•
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the timing and extent of changes in commodity prices and demand for their refined products, natural gas and NGLs, and the availability and market price of crude oil and other refinery feedstocks;
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•
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their ability to remain in compliance with the terms of their outstanding indebtedness;
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•
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changes in the cost or availability of third-party pipelines, terminals and other means of delivering and transporting crude oil, natural gas and NGLs, feedstocks and refined products;
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•
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state and federal environmental, economic, health and safety, energy and other policies and regulations and any changes in those policies and regulations;
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•
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environmental incidents and violations and related remediation costs, fines and other liabilities; and
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•
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changes in crude oil, natural gas, NGLs and refined product inventory levels and carrying costs.
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•
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the volume of crude oil, natural gas, NGLs and refined products that we handle;
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•
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the tariff rates with respect to volumes we transport on our pipelines (including whether such tariffs are for long-haul or short-haul segments);
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•
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the terminalling, trucking, processing and storage fees with respect to non-pipeline volumes we handle;
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•
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the mix of gathering, processing, transportation and storage services we provide; and
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•
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prevailing economic conditions.
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•
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the amount of our operating expenses and general and administrative expenses, including reimbursements to or from Tesoro with respect to those expenses and payment of an annual corporate services fee to Tesoro;
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•
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the amount of our capital expenditures;
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•
|
the volatility in capital markets at the time of new debt or equity issuances;
|
•
|
the timing of distributions on new unit issuances relating to acquisitions;
|
•
|
the cost of acquisitions, if any;
|
•
|
our debt service requirements and other liabilities;
|
•
|
fluctuations in our working capital needs;
|
•
|
our ability to borrow funds and access capital markets;
|
•
|
restrictions contained in our revolving credit facility and other debt service requirements;
|
•
|
an uninsured catastrophic loss;
|
•
|
the amount of cash reserves established by our general partner; and
|
•
|
other business risks impacting our cash levels.
|
•
|
make certain cash distributions;
|
•
|
incur certain indebtedness
|
•
|
incur certain liens;
|
•
|
make certain investments;
|
•
|
dispose of assets in excess of certain amounts;
|
•
|
engage in certain mergers or consolidations and transfers of assets; and
|
•
|
enter into certain transactions with affiliates.
|
•
|
the potential for unexpected costs, delays and challenges that may arise in integrating acquisitions into our existing business;
|
•
|
limitations on our ability to realize the expected cost savings and synergies from an acquisition;
|
•
|
challenges related to integrating acquired operations that have management teams and company cultures that differ from our own;
|
•
|
challenges related to the integration of businesses that operate in new geographic areas, including difficulties in identifying and gaining access to customers in new markets;
|
•
|
difficulties of managing operations outside of our existing core business, which may require development of additional skills and competencies; and
|
•
|
discovery of previously unknown liabilities following an acquisition with the acquired business or assets for which we cannot receive reimbursement under applicable indemnification provisions.
|
•
|
acts of God, fires, floods or storms;
|
•
|
compliance with orders of courts or any governmental authority;
|
•
|
explosions, wars, terrorist acts, riots, strikes, lockouts or other industrial disturbances;
|
•
|
accidental disruption of service;
|
•
|
breakdown of machinery, storage tanks or pipelines and inability to obtain or unavoidable delay in obtaining material or equipment; and
|
•
|
similar events or circumstances, so long as such events or circumstances are beyond our reasonable control and could not have been prevented by our due diligence.
|
•
|
Neither our partnership agreement nor any other agreement requires Tesoro to pursue a business strategy that favors us or utilizes our assets, which could involve decisions by Tesoro to increase or decrease refinery production, connect our pipeline systems to third-party delivery points, shut down or reconfigure a refinery, or pursue and grow particular markets. Tesoro’s directors and officers have a fiduciary duty to make these decisions in the best interests of the stockholders of Tesoro;
|
•
|
Tesoro, as our largest customer, may have an economic incentive to cause us to not seek higher tariff rates, trucking fees or terminalling fees, even if such higher rates or fees would reflect rates and fees that could be obtained in arm’s-length, third-party transactions;
|
•
|
Tesoro may be constrained by the terms of its debt instruments from taking actions, or refraining from taking actions, that may be in our best interests;
|
•
|
Our partnership agreement replaces the fiduciary duties that would otherwise be owed by our general partner with contractual standards governing its duties, limiting its liability and restricting the remedies available to our unitholders for actions that, without the limitations, might constitute breaches of fiduciary duty;
|
•
|
Except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval;
|
•
|
Our general partner determines the amount and timing of asset purchases and sales, borrowings, issuance of additional partnership securities and the creation, reduction or increase of cash reserves, each of which can affect the amount of cash that is distributed to our unitholders;
|
•
|
Our general partner determines the amount and timing of many of our cash expenditures and whether a cash expenditure is classified as an expansion capital expenditure, which does not reduce operating surplus. This determination can affect the amount of cash that is distributed to our unitholders and to our general partner and the amount of adjusted operating surplus in any given period;
|
•
|
Our general partner determines which costs incurred by it are reimbursable by us;
|
•
|
Our general partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make incentive distributions;
|
•
|
Our partnership agreement permits us to classify up to $30 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus. This cash may be used to fund distributions to our general partner in respect of the general partner interest or the incentive distribution rights;
|
•
|
Our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf;
|
•
|
Our general partner has limited and may continue to limit its liability regarding our contractual and other obligations;
|
•
|
Our general partner may exercise its right to call and purchase all of the common units not owned by it and its affiliates if it and its affiliates own more than
75% of the common units;
|
•
|
Our general partner controls the enforcement of obligations owed to us by our general partner and its affiliates, including our commercial agreements with Tesoro;
|
•
|
Our general partner decides whether to retain separate counsel, accountants, or others to perform services for us; and
|
•
|
Our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to our general partner’s incentive distribution rights without the approval of the conflicts committee of our Board, which we refer to as our conflicts committee, or our unitholders. This election may result in lower distributions to our common unitholders in certain situations.
|
•
|
provides that whenever our general partner makes a determination or takes, or declines to take, any other action in its capacity as our general partner, our general partner is required to make such determination, or take or decline to take such other action, in good faith, and will not be subject to any other or different standard imposed by our partnership agreement, Delaware law, or any other law, rule or regulation, or at equity;
|
•
|
provides that our general partner will not have any liability to us or our unitholders for decisions made in its capacity as a general partner so long as it acted in good faith, which requires that it believed that the decision was in, or not opposed to, the best interest of our partnership;
|
•
|
provides that our general partner and its officers and directors will not be liable for monetary damages to us or our limited partners resulting from any act or omission unless there has been a final and nonappealable judgment entered by a court of competent jurisdiction determining that our general partner or its officers and directors, as the case may be, acted in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the conduct was criminal;
|
•
|
provides that our general partner will not be in breach of its obligations under the partnership agreement or its fiduciary duties to us or our limited partners if a transaction with an affiliate or the resolution of a conflict of interest is not approved by our conflicts committee or approved by a vote of a majority of outstanding common units, but is entered into in good faith by our general partner and is on terms no less favorable to us than those generally being provided to or available from unrelated third parties or fair and reasonable to us, taking into account the totality of the relationships among the parties involved; and
|
•
|
provides that in resolving conflicts of interest, it is presumed that in making its decision the general partner acted in good faith and in any proceeding brought by or on behalf of any limited partner or us, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption.
|
•
|
our unitholders’ proportionate ownership interest in us will decrease;
|
•
|
the amount of cash available for distribution on each unit may decrease;
|
•
|
the relative voting strength of each previously outstanding unit may be diminished; and
|
•
|
the market price of our common units may decline.
|
•
|
any assets that were owned by Tesoro at the closing of our initial public offering (including replacements or expansions of those assets);
|
•
|
any assets acquired or constructed by Tesoro to replace one of our assets that no longer provides services to Tesoro due to the occurrence of a force majeure event under one of our commercial agreements with Tesoro that prevents us from providing services under such agreement;
|
•
|
any asset or business that Tesoro acquires or constructs that has a fair market value of less than $5 million; and
|
•
|
any asset or business that Tesoro acquires or constructs that has a fair market value of $5 million or more if we have been offered the opportunity to purchase the asset or business for fair market value not later than six months after completion of such acquisition or construction, and we decline to do so.
|
•
|
we were conducting business in a state but had not complied with that particular state’s partnership statute; or
|
•
|
his right to act with other unitholders to remove or replace the general partner, to approve some amendments to our partnership agreement or to take other actions under our partnership agreement constitute control of our business.
|
|
|
Trading Prices per
|
|
Quarterly Cash Distribution per Unit (a)
|
|
Distribution Date
|
|
Record Date
|
|||||||||
|
|
Common Unit
|
|
|
|
||||||||||||
Quarter Ended
|
|
High
|
|
Low
|
|
|
|
||||||||||
December 31, 2014
|
|
$
|
71.37
|
|
|
$
|
49.01
|
|
|
$
|
0.6675
|
|
|
February 13, 2015
|
|
February 2, 2015
|
|
September 30, 2014
|
|
73.99
|
|
|
64.04
|
|
|
0.6425
|
|
|
November 13, 2014
|
|
November 3, 2014
|
||||
June 30, 2014
|
|
75.55
|
|
|
59.75
|
|
|
0.6150
|
|
|
August 14, 2014
|
|
August 4, 2014
|
||||
March 31, 2014
|
|
65.59
|
|
|
51.16
|
|
|
0.5900
|
|
|
May 15, 2014
|
|
May 5, 2014
|
||||
December 31, 2013
|
|
59.24
|
|
|
47.40
|
|
|
0.5650
|
|
|
February 13, 2014
|
|
February 3, 2014
|
||||
September 30, 2013
|
|
63.71
|
|
|
50.52
|
|
|
0.5450
|
|
|
November 14, 2013
|
|
November 4, 2013
|
||||
June 30, 2013
|
|
71.92
|
|
|
50.61
|
|
|
0.5100
|
|
|
August 14, 2013
|
|
August 2, 2013
|
||||
March 31, 2013
|
|
56.63
|
|
|
41.26
|
|
|
0.4900
|
|
|
May 14, 2013
|
|
May 3, 2013
|
|
|
|
|
Marginal percentage interest in distributions
|
||||
|
Total quarterly distribution per unit target amount
|
|
Unitholders
|
|
General Partner
|
|
Incentive Distribution Rights
|
|
Minimum Quarterly Distribution
|
$0.337500
|
|
|
98%
|
|
2%
|
|
—%
|
First Target Distribution
|
Above $0.337500 up to $0.388125
|
|
98%
|
|
2%
|
|
—%
|
|
Second Target Distribution
|
Above $0.388125 up to $0.421875
|
|
85%
|
|
2%
|
|
13%
|
|
Third Target Distribution
|
Above $0.421875 up to $0.506250
|
|
75%
|
|
2%
|
|
23%
|
|
Thereafter
|
Above $0.506250
|
|
|
50%
|
|
2%
|
|
48%
|
•
|
three truck terminals, ten storage tanks, two rail loading and unloading facilities and a refined products pipeline (the “West Coast Logistics Assets”) effective July 1, 2014 for the terminals, storage tanks and rail facilities and effective September 30, 2014 for the refined products pipeline (the “West Coast Logistics Assets Acquisition”);
|
•
|
two
marine terminals, a marine storage terminal, a products terminal, a petroleum coke handling and storage facility, over
100
miles of active crude oil and refined products pipeline and certain assets and properties related thereto located in Southern California (the “Los Angeles Logistics Assets”) effective
December 6, 2013
(the “Los Angeles Logistics Assets Acquisition”);
|
•
|
six marketing terminals and storage facilities located in Southern California and certain assets and properties related thereto (the “Los Angeles Terminal Assets”) effective
June 1, 2013
(the “Los Angeles Terminal Assets Acquisition”);
|
•
|
the Anacortes rail car unloading facility assets (collectively, the “Anacortes Rail Facility”) effective
November 15, 2012
(the “Anacortes Rail Facility Acquisition”);
|
•
|
the Long Beach marine terminal and related short-haul pipelines, including the Los Angeles short-haul pipelines (the “Long Beach Assets”) effective
September 14, 2012
(the “Long Beach Assets Acquisition”); and
|
•
|
the Martinez crude oil marine terminal assets (collectively, the “Martinez Crude Oil Marine Terminal”) effective
April 1, 2012
.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2014 (a)
|
|
2013 (a)
|
|
2012 (a)
|
|
2011 (a)
|
|
|
2010
|
||||||||||
|
|
|
|
|
|
|
|
|
|
Predecessors
|
||||||||||
|
(Dollars in millions, except units and per unit amounts)
|
|||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Revenues (b)
|
$
|
600
|
|
|
$
|
313
|
|
|
$
|
164
|
|
|
$
|
94
|
|
|
|
$
|
37
|
|
Net Income (Loss)
|
$
|
98
|
|
|
$
|
35
|
|
|
$
|
48
|
|
|
$
|
11
|
|
|
|
$
|
(40
|
)
|
Loss attributable to Predecessors
|
4
|
|
|
45
|
|
|
9
|
|
|
24
|
|
|
|
40
|
|
|||||
Income attributable to noncontrolling interest
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|||||
Net income attributable to partners
|
$
|
99
|
|
|
$
|
80
|
|
|
$
|
57
|
|
|
$
|
35
|
|
|
|
$
|
—
|
|
General partner’s interest in net income, including incentive distribution rights
|
$
|
43
|
|
|
$
|
12
|
|
|
$
|
3
|
|
|
$
|
1
|
|
|
|
$
|
—
|
|
Common unitholders’ interest in net income
|
$
|
43
|
|
|
$
|
46
|
|
|
$
|
28
|
|
|
$
|
17
|
|
|
|
$
|
—
|
|
Subordinated unitholders’ interest in net income
|
$
|
13
|
|
|
$
|
22
|
|
|
$
|
26
|
|
|
$
|
17
|
|
|
|
$
|
—
|
|
Net income per limited partner unit:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common - basic
|
$
|
0.96
|
|
|
$
|
1.48
|
|
|
$
|
1.90
|
|
|
$
|
1.11
|
|
|
|
|
||
Common - diluted
|
$
|
0.96
|
|
|
$
|
1.47
|
|
|
$
|
1.89
|
|
|
$
|
1.11
|
|
|
|
|
||
Subordinated - basic and diluted
|
$
|
0.62
|
|
|
$
|
1.35
|
|
|
$
|
1.47
|
|
|
$
|
1.11
|
|
|
|
|
||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common units - basic
|
54,203,508
|
|
|
31,545,935
|
|
|
16,614,668
|
|
|
15,254,890
|
|
|
|
|
||||||
Common units - diluted
|
54,249,416
|
|
|
31,618,434
|
|
|
16,708,950
|
|
|
15,282,366
|
|
|
|
|
||||||
Subordinated units - basic and diluted
|
5,642,220
|
|
|
15,254,890
|
|
|
15,254,890
|
|
|
15,254,890
|
|
|
|
|
||||||
Cash distribution per unit
|
$
|
2.4125
|
|
|
$
|
2.0175
|
|
|
$
|
1.6050
|
|
|
$
|
0.5948
|
|
|
|
|
||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Assets
|
$
|
4,814
|
|
|
$
|
1,533
|
|
|
$
|
391
|
|
|
$
|
261
|
|
|
|
$
|
220
|
|
Debt
|
2,593
|
|
|
1,164
|
|
|
354
|
|
|
50
|
|
|
|
—
|
|
|||||
Cash Flows From (Used In):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
185
|
|
|
$
|
93
|
|
|
$
|
72
|
|
|
$
|
20
|
|
|
|
$
|
(26
|
)
|
Investing activities
|
(2,668
|
)
|
|
(391
|
)
|
|
(128
|
)
|
|
(16
|
)
|
|
|
(5
|
)
|
|||||
Financing activities
|
2,479
|
|
|
302
|
|
|
57
|
|
|
14
|
|
|
|
31
|
|
|||||
Increase (decrease) in cash and cash equivalents
|
$
|
(4
|
)
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
18
|
|
|
|
$
|
—
|
|
Capital Expenditures:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Expansion
|
$
|
200
|
|
|
$
|
63
|
|
|
$
|
81
|
|
|
$
|
10
|
|
|
|
$
|
—
|
|
Maintenance (c)
|
44
|
|
|
20
|
|
|
13
|
|
|
10
|
|
|
|
5
|
|
|||||
Total Capital Expenditures
|
$
|
244
|
|
|
$
|
83
|
|
|
$
|
94
|
|
|
$
|
20
|
|
|
|
$
|
5
|
|
(a)
|
Includes the historical results related to the Partnership and Predecessors for the years ended December 31, 2014, 2013, 2012 and 2011 and as of December 31, 2013, 2012 and 2011.
|
•
|
the suspension, reduction or termination of Tesoro’s obligation under our commercial agreements and our secondment agreement;
|
•
|
changes in global economic conditions and the effects of a global economic downturn on Tesoro’s business and the business of its suppliers, customers, business partners and credit lenders;
|
•
|
a material decrease in Tesoro’s profitability;
|
•
|
a material decrease in the crude oil and natural gas produced in the Bakken Shale/Williston Basin area of North Dakota and Montana (the “Bakken Region”);
|
•
|
a material decrease in the natural gas produced in the Green River Basin, Uinta Basin and Vermillion Basin in the states of Utah, Colorado and Wyoming (the “Rockies Region”);
|
•
|
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, including, without limitation, expected accretion to our limited partners or operational synergies, of our transactions relating to our acquisition of QEP Resources’ wholly-owned subsidiary, QEPFS, our ability to integrate the acquired operations, or the value of the assets acquired in the Rockies Natural Gas Business Acquisition;
|
•
|
impact of QEP Resources’ and Questar Gas Company’s failure to perform under the terms of our gathering agreements as they are our largest customers in TLLP’s natural gas business.
|
•
|
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;
|
•
|
changes in the timing, terms or potential structure of the proposed combination of the Partnership and QEPM;
|
•
|
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;
|
•
|
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 refined products, natural gas and NGLs;
|
•
|
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, natural gas, NGLs 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.
|
•
|
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;
|
•
|
a regulated common carrier refined products pipeline system connecting Tesoro’s Kenai refinery to Anchorage, Alaska;
|
•
|
24
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.
|
•
|
a truck terminal and storage tanks, located in Nikiski, Alaska;
|
•
|
a truck terminal, rail loading and unloading facility, and storage tanks, 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
|
•
|
all of Tesoro’s membership interests in Tesoro Alaska Pipeline Company LLC, a wholly-owned subsidiary of Tesoro, which owns an approximately 70-mile long common carrier refined products pipeline connecting Tesoro’s Kenai refinery to Anchorage, Alaska.
|
•
|
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.
|
•
|
completed the Rockies Natural Gas Business Acquisition, effective December 2, 2014, which allows us to provide approximately 2.9 billion cubic feet per day of natural gas throughput capacity, over 54,000 bpd of crude oil throughput capacity, 1.5 billion cubic feet per day total natural gas processing capacity and 15,000 bpd of fractionation throughput capacity to our customers;
|
•
|
expanded a reversed segment of our common carrier pipeline in the fourth quarter of 2014 in the Bakken Region to allow for the optimization of the pipeline’s capacity to meet shipper demand to transport crude oil from areas of increasing production to new outlets;
|
•
|
completed the West Coast Logistics Assets Acquisition phase one, effective July 1, 2014, which provides approximately 45,000 bpd of terminal throughput capacity and adds approximately 1.5 million barrels of total storage capacity and phase two, effective September 30, 2014, which provides approximately 35,000 bpd of transportation throughput capacity;
|
•
|
completed the expansion of our San Diego terminal, allowing us to move an additional 8,000 to 10,000 bpd; and
|
•
|
constructed a waxy crude oil unloading facility in Salt Lake City, which commenced operations in September 2014.
|
•
|
expand our assets on our 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;
|
◦
|
further 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 Assets, Los Angeles Logistics Assets and West Coast Logistics Assets; and
|
•
|
expand and optimize our assets acquired in the Rockies Natural Gas Business Acquisition.
|
•
|
increase throughput volumes on our High Plains System by making connections to existing or new third-party pipelines or rail loading facilities, which will be driven by the anticipated supply of and demand for additional crude oil produced from the Bakken Region;
|
•
|
increase throughput volumes at our refined products terminals and provide additional ancillary services at those terminals, such as ethanol blending and additive injection; and
|
•
|
identify and execute organic expansion projects, and capture incremental Tesoro or third-party volumes.
|
•
|
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.
|
|
Year Ended December 31,
|
||||||||||
|
2014 (a)
|
|
2013 (a)
|
|
2012 (a)
|
||||||
REVENUES
|
|
|
|
|
|
||||||
Gathering
|
$
|
137
|
|
|
$
|
90
|
|
|
$
|
72
|
|
Processing
|
23
|
|
|
—
|
|
|
—
|
|
|||
Terminalling and Transportation (b)
|
442
|
|
|
223
|
|
|
92
|
|
|||
Intersegment sales
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
Total Revenues
|
600
|
|
|
313
|
|
|
164
|
|
|||
COSTS AND EXPENSES
|
|
|
|
|
|
||||||
Operating and maintenance expenses, net (c)
|
247
|
|
|
162
|
|
|
75
|
|
|||
General and administrative expenses
|
74
|
|
|
32
|
|
|
16
|
|
|||
Depreciation and amortization expenses
|
77
|
|
|
45
|
|
|
15
|
|
|||
Loss (gain) on asset disposals and impairments
|
(4
|
)
|
|
—
|
|
|
1
|
|
|||
Total Costs and Expenses
|
394
|
|
|
239
|
|
|
107
|
|
|||
OPERATING INCOME
|
206
|
|
|
74
|
|
|
57
|
|
|||
Interest and financing costs, net
|
(109
|
)
|
|
(40
|
)
|
|
(9
|
)
|
|||
Equity in earnings of unconsolidated affiliates
|
1
|
|
|
—
|
|
|
—
|
|
|||
Interest income
|
—
|
|
|
1
|
|
|
—
|
|
|||
NET INCOME
|
98
|
|
|
35
|
|
|
48
|
|
|||
|
|
|
|
|
|
||||||
Loss attributable to Predecessors
|
4
|
|
|
45
|
|
|
9
|
|
|||
Income attributable to noncontrolling interest
|
(3
|
)
|
|
—
|
|
|
—
|
|
|||
Net income attributable to partners
|
99
|
|
|
80
|
|
|
57
|
|
|||
General partner’s interest in net income, including incentive distribution rights
|
(43
|
)
|
|
(12
|
)
|
|
(3
|
)
|
|||
Limited partners’ interest in net income
|
$
|
56
|
|
|
$
|
68
|
|
|
$
|
54
|
|
|
|
|
|
|
|
||||||
Net income per limited partner unit (d):
|
|
|
|
|
|
||||||
Common - basic
|
$
|
0.96
|
|
|
$
|
1.48
|
|
|
$
|
1.90
|
|
Common - diluted
|
$
|
0.96
|
|
|
$
|
1.47
|
|
|
$
|
1.89
|
|
Subordinated - basic and diluted
|
$
|
0.62
|
|
|
$
|
1.35
|
|
|
$
|
1.47
|
|
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
||||||
Common units - basic
|
54,203,508
|
|
|
31,545,935
|
|
|
16,614,668
|
|
|||
Common units - diluted
|
54,249,416
|
|
|
31,618,434
|
|
|
16,708,950
|
|
|||
Subordinated units - basic and diluted
|
5,642,220
|
|
|
15,254,890
|
|
|
15,254,890
|
|
|
Year Ended December 31,
|
||||||||||
|
2014 (a)
|
|
2013 (a)
|
|
2012 (a)
|
||||||
EBITDA (e)
|
$
|
283
|
|
|
$
|
156
|
|
|
$
|
77
|
|
Adjusted EBITDA (e)
|
$
|
315
|
|
|
$
|
168
|
|
|
$
|
81
|
|
Distributable Cash Flow (e)
|
$
|
217
|
|
|
$
|
126
|
|
|
$
|
71
|
|
|
|
|
|
|
|
||||||
Reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow to Net Income:
|
|
|
|
|
|
||||||
Net income attributable to partners
|
$
|
99
|
|
|
$
|
80
|
|
|
$
|
57
|
|
Depreciation and amortization expenses, net of noncontrolling interest and Predecessors’ expense
|
75
|
|
|
37
|
|
|
11
|
|
|||
Interest and financing costs, net of capitalized interest
|
109
|
|
|
40
|
|
|
9
|
|
|||
Interest income
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
EBITDA (e)
|
283
|
|
|
156
|
|
|
77
|
|
|||
Loss (gain) on asset disposals and impairments
|
(4
|
)
|
|
—
|
|
|
1
|
|
|||
Acquisition costs included in general and administrative expenses
|
19
|
|
|
7
|
|
|
3
|
|
|||
Billing of deficiency payment (f)
|
10
|
|
|
—
|
|
|
—
|
|
|||
Inspection and maintenance expenses associated with the Northwest Products System
|
7
|
|
|
5
|
|
|
—
|
|
|||
Adjusted EBITDA (e)
|
315
|
|
|
168
|
|
|
81
|
|
|||
Interest and financing costs, net (g)
|
(86
|
)
|
|
(40
|
)
|
|
(9
|
)
|
|||
Proceeds from sale of assets
|
10
|
|
|
—
|
|
|
—
|
|
|||
Maintenance capital expenditures (h)
|
(44
|
)
|
|
(14
|
)
|
|
(9
|
)
|
|||
Reimbursement for maintenance capital expenditures (h)
|
7
|
|
|
5
|
|
|
6
|
|
|||
Unit-based compensation expense
|
2
|
|
|
2
|
|
|
1
|
|
|||
Change in deferred revenue
|
2
|
|
|
2
|
|
|
—
|
|
|||
Interest income
|
—
|
|
|
1
|
|
|
—
|
|
|||
Cash adjustment for noncontrolling interest (i)
|
5
|
|
|
—
|
|
|
—
|
|
|||
Amortization of debt issuance costs and other
|
6
|
|
|
2
|
|
|
1
|
|
|||
Distributable Cash Flow (e)
|
$
|
217
|
|
|
$
|
126
|
|
|
$
|
71
|
|
|
|
|
|
|
|
||||||
Reconciliation of EBITDA to Net Cash from Operating Activities:
|
|
|
|
|
|||||||
Net cash from operating activities
|
$
|
185
|
|
|
$
|
93
|
|
|
$
|
72
|
|
Interest and financing costs, net
|
109
|
|
|
40
|
|
|
9
|
|
|||
Changes in assets and liabilities
|
(7
|
)
|
|
(9
|
)
|
|
(6
|
)
|
|||
Amortization of debt issuance costs
|
(6
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|||
Unit-based compensation expense
|
(2
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|||
Interest income
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Income attributable to noncontrolling interest
|
(3
|
)
|
|
—
|
|
|
—
|
|
|||
Predecessor impact
|
3
|
|
|
37
|
|
|
5
|
|
|||
Gain (loss) on asset disposals and impairments
|
4
|
|
|
—
|
|
|
(1
|
)
|
|||
EBITDA (e)
|
$
|
283
|
|
|
$
|
156
|
|
|
$
|
77
|
|
(a)
|
Includes the historical results related to the Partnership and Predecessors for the years ended December 31, 2014, 2013 and 2012.
|
(b)
|
Our Predecessors did not record revenue for transactions with Tesoro in the Terminalling and Transportation segment for assets acquired in the 2014, 2013 and 2012 Acquisitions from Tesoro prior to the effective date of each acquisition with the exception of RCA tariffs charged to Tesoro on the refined products pipeline included in the West Coast Logistics Assets Acquisition.
|
(c)
|
Operating and maintenance expenses include imbalance settlement gains of
$17 million
,
$8 million
and
$10 million
for the years ended
December 31, 2014
,
2013
and
2012
, respectively and intersegment operating expenses of $2 million for the year ended
December 31, 2014
, which is eliminated upon consolidation. Also includes reimbursements primarily related to pressure testing and repairs and maintenance costs pursuant to the Amended Omnibus Agreement of
$26 million
,
$4 million
and
$2 million
in the years ended
December 31, 2014
,
2013
and
2012
, respectively.
|
(d)
|
TLLP excludes income or losses attributable to Predecessors 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 less the income attributable to noncontrolling interest shown above. This supplemental information assumes the common unitholders, subordinated unitholders and General Partner participated in the pre-acquisition date income or loss attributable to the Predecessors for the years ended December 31, 2014, 2013 and 2012.
|
|
|
Year Ended December 31,
|
||||
|
|
2014
|
|
2013
|
|
2012
|
Adjusted Net Income Per Limited Partner Unit:
|
|
|
|
|
||
Common - basic
|
|
$0.90
|
|
$0.54
|
|
$1.64
|
Common - diluted
|
|
$0.90
|
|
$0.54
|
|
$1.63
|
Subordinated - basic and diluted
|
|
$0.55
|
|
$0.42
|
|
$1.20
|
(e)
|
See “How We Evaluate Our Operations - Non-GAAP Financial Measures” on page 65 for a definition of EBITDA, adjusted EBITDA and Distributable Cash Flow and for information regarding the disaggregated presentation of our results of operations to exclude our Predecessors.
|
(f)
|
Several of our contracts contain minimum volume commitments that allow us to charge the customer a deficiency payment if the customer’s actual throughput volumes are less than its minimum volume commitments for the applicable period. In certain contracts, if a customer makes a deficiency payment, that customer may be entitled to offset gathering fees or processing fees in one or more subsequent periods to the extent that such customer's throughput volumes in those periods exceed its minimum volume commitment. Depending on the specific terms of the contract, revenue under these agreements may be classified as deferred revenue and recognized once all contingencies or potential performance obligations associated with these related volumes have either been satisfied through the gathering or processing of future excess volumes of natural gas, or are expected to expire or lapse through the passage of time pursuant to terms of the applicable agreement. During December 2014, we invoiced a QEPFS customer for a deficiency payment. We did not recognize
$10 million
of revenue related to the billing period as it represented an opening balance sheet asset for the Rockies Natural Gas Business Acquisition; however, TLLP is entitled to the cash receipt from such billing. The timing and amount of deficiency billings vary based on actual shortfall and terms under the applicable agreements.
|
(g)
|
Interest and financing costs, net exclude capitalized interest, $7 million of reimbursed premiums from Tesoro and $16 million of fees for an alternative financing arrangement related to the Rockies Natural Gas Business Acquisition (“Alternative Financing Arrangement”) during the year ended December 31, 2014.
|
(h)
|
Maintenance capital expenditures include expenditures required to ensure the safety, reliability, integrity and regulatory compliance of our assets. Maintenance capital expenditures included in the Distributable Cash Flow calculation are presented net of Predecessor amounts and the noncontrolling interest portion of maintenance capital expenditures.
|
(i)
|
Cash adjustment for noncontrolling interest is the portion applicable to our distributable cash flow from the addition of the noncontrolling interest obtained in the December 2, 2014 Rockies Natural Gas Business Acquisition related to QEPM public units.
|
•
|
an increase of $201 million in revenues related to the 2013 Acquisitions from Tesoro and the Northwest Products System Acquisition (collectively, the “2013 Acquisitions”);
|
•
|
$36 million
of revenue increase attributable to the Rockies Natural Gas Business Acquisition; and
|
•
|
higher throughput on our crude oil pipeline and trucking operations in our Gathering segment, which resulted in an increase in revenues of
$34 million
during
2014
.
|
•
|
an increase
in operating and maintenance expenses of
$85 million
, which includes $15 million of expenses related to the Rockies Natural Gas Business Acquisition. The remaining increase primarily related to increased labor and operating costs associated with operations at the assets associated with the 2014 and 2013 acquisitions and higher costs in our Gathering segment resulting primarily from higher throughput;
|
•
|
an increase
in general and administrative expenses of
$42 million
is primarily a result of higher costs, including acquisition and integration costs related to the 2014 acquisitions. Acquisition costs of
$19 million
for 2014 are included in unallocated general and administrative expenses. General and administrative expenses include $3 million related to the operation of the Rockies Natural Gas Business Acquisition;
|
•
|
an increase of
$32 million
in depreciation expense primarily related to the assets acquired in 2014 and for an entire year of activity in 2014 compared to partial activity in 2013 for the assets acquired in the 2013 Acquisitions. Depreciation expense includes $8 million related to the Rockies Natural Gas Business Acquisition; and
|
•
|
an increase
in net interest and financing costs of
$69 million
primarily related to the additional debt issued in conjunction with the Rockies Natural Gas Business Acquisition and the 2014 and 2013 Acquisitions from Tesoro. Net interest and financing costs in 2014 also includes $16 million of fees for an alternative financing arrangement which would have been used to fund borrowings in the event we were not able to finance the Rockies Natural Gas Business Acquisition with equity or debt offerings.
|
•
|
an increase of
$129 million
in revenues related to the 2013 and 2012 Acquisitions from Tesoro and the Northwest Products System Acquisition; and
|
•
|
higher throughput in our Gathering segment, which resulted in an increase in revenues of $18 million during
2013
.
|
•
|
an increase
in operating and maintenance expenses of
$87 million
, which includes $44 million of expenses related to Predecessor activity. The remaining increase primarily related to increased labor and operating costs associated with operations at the assets associated with the 2013 Acquisitions, a full year of operations at the Anacortes Rail Facility in 2013, which was acquired in November 2012, and higher costs in our Gathering segment resulting primarily from higher throughput;
|
•
|
an increase
in general and administrative expenses of
$16 million
, which includes an increase of $2 million of Predecessor expense. The remaining increase is primarily a result of higher costs, including costs to acquire and integrate the acquired assets from the 2013 Acquisitions and a full year of operations at the Anacortes Rail Facility. Transaction costs and exchange registration costs totaled
$7 million
for 2013 and are included in unallocated general and administrative expenses;
|
•
|
an increase of
$30 million
in depreciation expense primarily related to the assets acquired in 2013; and
|
•
|
an increase
in net interest and financing costs of
$31 million
primarily related to the additional debt issued in conjunction with the Northwest Products System Acquisition and the 2013 and 2012 Acquisitions from Tesoro.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
REVENUES
|
|
|
|
|
|
||||||
Crude oil gathering pipeline revenues
|
$
|
66
|
|
|
$
|
40
|
|
|
$
|
33
|
|
Crude oil gathering trucking revenues
|
58
|
|
|
50
|
|
|
39
|
|
|||
Gas gathering revenues (a)
|
13
|
|
|
—
|
|
|
—
|
|
|||
Total Revenues
|
137
|
|
|
90
|
|
|
72
|
|
|||
COSTS AND EXPENSES
|
|
|
|
|
|
||||||
Operating and maintenance expenses (b)
|
72
|
|
|
49
|
|
|
39
|
|
|||
General and administrative expenses
|
5
|
|
|
3
|
|
|
3
|
|
|||
Depreciation and amortization expenses
|
11
|
|
|
4
|
|
|
4
|
|
|||
Total Costs and Expenses
|
88
|
|
|
56
|
|
|
46
|
|
|||
GATHERING SEGMENT OPERATING INCOME
|
$
|
49
|
|
|
$
|
34
|
|
|
$
|
26
|
|
VOLUMES
|
|
|
|
|
|
||||||
Crude oil gathering pipeline throughput (bpd) (c)
|
123,355
|
|
|
85,572
|
|
|
66,615
|
|
|||
Average crude oil gathering pipeline revenue per barrel (d)
|
$
|
1.46
|
|
|
$
|
1.27
|
|
|
$
|
1.35
|
|
Crude oil gathering trucking (bpd)
|
49,339
|
|
|
44,363
|
|
|
37,537
|
|
|||
Average crude oil gathering trucking revenue per barrel (d)
|
$
|
3.23
|
|
|
$
|
3.10
|
|
|
$
|
2.84
|
|
Gas gathering volume (thousands of MMBtu/d) (e)
|
86
|
|
|
—
|
|
|
—
|
|
|||
Average gas gathering revenue per MMBtu (d)
|
$
|
0.41
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
Gas gathering revenues includes $2 million of intersegment revenues related to transactions between our Gathering and Processing segments for the year ended
December 31, 2014
, which is eliminated upon consolidation.
|
(c)
|
Also includes barrels that were gathered and then delivered into our High Plains Pipeline by truck.
|
(a)
|
Operating and maintenance expenses include intersegment operating expenses of $2 million related to transactions between our Gathering and Processing segments for the year ended
December 31, 2014
, which is eliminated upon consolidation.
|
(c)
|
Management uses average revenue per MMBtu and average keep-whole fee per gallon to evaluate performance and compare profitability to other companies in the industry. There are a variety of ways to calculate average revenue per MMBtu and average keep-whole fee per gallon; other companies may calculate these in different ways. We calculate average revenue per MMBtu as revenue divided by total volume (MMBtu). We calculate average keep-whole fee per gallon as revenue divided by volume (gallons). Investors and analysts use these financial measures to help analyze and compare companies in the industry on the basis of operating performance. These financial measures 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.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
REVENUES (a)
|
|
|
|
|
|
||||||
Terminalling revenues
|
$
|
333
|
|
|
$
|
184
|
|
|
$
|
77
|
|
Pipeline transportation revenues
|
109
|
|
|
39
|
|
|
15
|
|
|||
Total Revenues
|
442
|
|
|
223
|
|
|
92
|
|
|||
COSTS AND EXPENSES
|
|
|
|
|
|
|
|||||
Operating and maintenance expenses (b)
|
163
|
|
|
113
|
|
|
36
|
|
|||
General and administrative expenses
|
29
|
|
|
12
|
|
|
4
|
|
|||
Depreciation and amortization expenses
|
62
|
|
|
41
|
|
|
11
|
|
|||
Loss (gain) on asset disposals and impairments
|
(4
|
)
|
|
—
|
|
|
1
|
|
|||
Total Costs and Expenses
|
250
|
|
|
166
|
|
|
52
|
|
|||
TERMINALLING AND TRANSPORTATION SEGMENT OPERATING INCOME
|
$
|
192
|
|
|
$
|
57
|
|
|
$
|
40
|
|
VOLUMES (bpd)
|
|
|
|
|
|
|
|||||
Terminalling throughput
|
917,280
|
|
|
738,665
|
|
|
368,693
|
|
|||
Average terminalling revenue per barrel (c)
|
$
|
1.00
|
|
|
$
|
0.69
|
|
|
$
|
0.57
|
|
Pipeline transportation throughput (a)
|
821,716
|
|
|
205,136
|
|
|
121,444
|
|
|||
Average pipeline transportation revenue per barrel (c)
|
$
|
0.36
|
|
|
$
|
0.52
|
|
|
$
|
0.32
|
|
(a)
|
Our Predecessors did not record revenue for transactions with Tesoro in the Terminalling and Transportation segment for Predecessors’ assets acquired in the Acquisitions from Tesoro prior to the effective date of each acquisition, except for the RCA tariffs charged to Tesoro on the refined products pipeline included in the acquisition of the West Coast Logistics Assets. Volumes for all periods presented include both affiliate and third-party throughput, with the exception of transportation volumes on the pipeline assets acquired in the Los Angeles Logistics Assets Acquisition, which were not separately tracked by Tesoro prior to the acquisition date. Therefore, 2013 pipeline volume and revenue per barrel information has not been adjusted to include the activity prior to December 6, 2013.
|
(b)
|
Operating and maintenance expenses include imbalance settlement gains of
$10 million
,
$6 million
and
$5 million
in the years ended
December 31, 2014
,
2013
and
2012
, 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; different companies may calculate it in different ways. We calculate average revenue per barrel as revenue divided by total throughput (barrels). 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
(in millions)
|
|
Date of Distribution
|
||||||
December 31, 2014
|
|
$
|
0.6675
|
|
|
$
|
2.67
|
|
|
$
|
70
|
|
|
February 13, 2015
|
September 30, 2014
|
|
0.6425
|
|
|
2.57
|
|
|
66
|
|
|
November 13, 2014
|
|||
June 30, 2014
|
|
0.6150
|
|
|
2.46
|
|
|
42
|
|
|
August 14, 2014
|
|||
March 31, 2014
|
|
0.5900
|
|
|
2.36
|
|
|
39
|
|
|
May 15, 2014
|
|||
December 31, 2013
|
|
0.5650
|
|
|
2.26
|
|
|
36
|
|
|
February 13, 2014
|
|||
September 30, 2013
|
|
0.5450
|
|
|
2.18
|
|
|
29
|
|
|
November 14, 2013
|
|||
June 30, 2013
|
|
0.5100
|
|
|
2.04
|
|
|
26
|
|
|
August 14, 2013
|
|||
March 31, 2013
|
|
0.4900
|
|
|
1.96
|
|
|
24
|
|
|
May 14, 2013
|
Debt, including current maturities:
|
December 31,
2014 |
||
Revolving Credit Facility
|
$
|
260
|
|
5.500% Senior Notes due 2019
|
500
|
|
|
5.875% Senior Notes due 2020 (a)
|
475
|
|
|
6.125% Senior Notes due 2021
|
550
|
|
|
6.250% Senior Notes due 2022
|
800
|
|
|
Capital lease obligations
|
8
|
|
|
Total Debt
|
2,593
|
|
|
Current maturities
|
—
|
|
|
Debt, less current maturities
|
$
|
2,593
|
|
(a)
|
Includes an unamortized premium of
$5 million
.
|
Credit Facility
|
|
30 day Eurodollar (LIBOR) Rate
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
|
Commitment Fee
(unused portion)
|
Revolving Credit Facility (b)
|
|
0.17%
|
|
2.75%
|
|
3.25%
|
|
1.75%
|
|
0.50%
|
•
|
incur additional indebtedness and incur liens on assets to secure certain debt;
|
•
|
pay and make certain restricted payments;
|
•
|
make distributions from our subsidiaries;
|
•
|
dispose of assets in excess of an annual threshold amount;
|
•
|
in the case of the Revolving Credit Facility, make certain amendments, modifications or supplements to organization documents and material contracts;
|
•
|
in the case of the Revolving Credit Facility, engage in certain business activities;
|
•
|
engage in certain mergers or consolidations and transfers of assets; and
|
•
|
enter into non-arm’s-length transactions with affiliates.
|
|
Year Ended December 31,
|
||||||||||
|
2014 (a)
|
|
2013 (a)
|
|
2012 (a)
|
||||||
Cash Flows From (Used In):
|
|
|
|
|
|
||||||
Operating Activities
|
$
|
185
|
|
|
$
|
93
|
|
|
$
|
72
|
|
Investing Activities
|
(2,668
|
)
|
|
(391
|
)
|
|
(128
|
)
|
|||
Financing Activities
|
2,479
|
|
|
302
|
|
|
57
|
|
|||
Increase (decrease) in Cash and Cash Equivalents
|
$
|
(4
|
)
|
|
$
|
4
|
|
|
$
|
1
|
|
(a)
|
Includes the historical results related to the Partnership and Predecessors for the years ended December 31, 2014, 2013 and 2012.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Growth
|
$
|
200
|
|
|
$
|
63
|
|
|
$
|
81
|
|
Maintenance
|
44
|
|
|
20
|
|
|
13
|
|
|||
Total Capital Expenditures (a)
|
$
|
244
|
|
|
$
|
83
|
|
|
$
|
94
|
|
(a)
|
Includes capital spending related to our Predecessors of $
7 million
and
$56 million
for the years ended
December 31, 2013
and
2012
, respectively.
|
•
|
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 was completed in 2014. The High Plains Pipeline reversal project had total capital spending of $30 million in 2014.
|
•
|
The construction of the first phase of the BASH with total 2014 spending of $42 million. The BASH provides storage for the Bakken region with tanks located in two strategic areas of the basin. It has current storage capacity of approximately 780,000 barrels, growing to over 1 million barrels of capacity by the end of 2015.
|
•
|
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 bpd of gasoline and diesel throughput. The project has a total estimated capital spend of $23 million and is expected to be complete in 2015. The current year capital spend was $18 million.
|
•
|
Projects to expand and optimize the southern California distribution system with 2014 spending of $19 million, which includes additional projects associated with the Los Angeles Logistics Assets. The projects are to increase throughput and expand ancillary services.
|
•
|
Connolly Gathering System construction with total estimated capital spending of $150 million and current year spending of $38 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. The first barrels were delivered into the main line at the end of 2014.
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term debt obligations (a)
|
$
|
139
|
|
|
$
|
139
|
|
|
$
|
139
|
|
|
$
|
139
|
|
|
$
|
895
|
|
|
$
|
2,044
|
|
|
$
|
3,495
|
|
Capital lease obligations (b)
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
7
|
|
|
12
|
|
|||||||
Operating lease obligations (c)
|
10
|
|
|
8
|
|
|
7
|
|
|
6
|
|
|
6
|
|
|
65
|
|
|
102
|
|
|||||||
Other purchase obligations (d)
|
84
|
|
|
85
|
|
|
84
|
|
|
84
|
|
|
84
|
|
|
136
|
|
|
557
|
|
|||||||
Capital expenditure obligations (e)
|
94
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94
|
|
|||||||
Total Contractual Obligations
|
$
|
328
|
|
|
$
|
233
|
|
|
$
|
231
|
|
|
$
|
230
|
|
|
$
|
986
|
|
|
$
|
2,252
|
|
|
$
|
4,260
|
|
(a)
|
Includes maturities of principal and interest payments. Amounts and timing may be different from our estimated commitments due to potential voluntary debt prepayments and borrowings.
|
(b)
|
Capital lease obligations include amounts classified as interest.
|
(c)
|
Minimum operating lease payments for operating leases having initial or remaining non-cancellable lease terms in excess of one year primarily related to our truck vehicle leases and leases for pipelines, terminals, pump stations and property leases.
|
(d)
|
Purchase obligations include enforceable and legally binding service agreement commitments that meet any of the following criteria: (1) they are non-cancellable, (2) we would incur a penalty if the agreement was canceled, or (3) we must make specified minimum payments even if we do not take delivery of the contracted products or services. If we can unilaterally terminate the agreement simply by providing a certain number of days’ notice or by paying a termination fee, we have included the termination fee or the amount that would be paid over the notice period. Contracts that can be unilaterally terminated without a penalty are not included. Future purchase obligations primarily include NGL transportation costs, fractionation fees, and fixed charges under the Amended Omnibus Agreement, the QEPM Omnibus Agreement and the Secondment Agreement. Our Amended Omnibus Agreement and QEPM Omnibus Agreement remain in effect between the applicable parties until a change in control of the Partnership. As we are unable to estimate the termination of these omnibus agreements, we have included the fees for each of the five years following December 31, 2014 for the Amended Omnibus Agreement and the QEPM Omnibus Agreement for disclosure purposes in the table above.
|
•
|
the customer receiving the services provided by these billings;
|
•
|
the expiration of the period in which the customer is contractually allowed to receive the services; or
|
•
|
the determination that future services will not be required.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(Dollars in millions, except per unit amounts)
|
||||||||||
REVENUES
|
|
|
|
|
|
||||||
Affiliate
|
$
|
497
|
|
|
$
|
273
|
|
|
$
|
150
|
|
Third-party
|
103
|
|
|
40
|
|
|
14
|
|
|||
Total Revenues
|
600
|
|
|
313
|
|
|
164
|
|
|||
COSTS AND EXPENSES
|
|
|
|
|
|
||||||
Operating and maintenance expenses
|
290
|
|
|
174
|
|
|
87
|
|
|||
Imbalance settlement gains and reimbursements from Tesoro
|
(43
|
)
|
|
(12
|
)
|
|
(12
|
)
|
|||
General and administrative expenses
|
74
|
|
|
32
|
|
|
16
|
|
|||
Depreciation and amortization expenses
|
77
|
|
|
45
|
|
|
15
|
|
|||
Loss (gain) on asset disposals and impairments
|
(4
|
)
|
|
—
|
|
|
1
|
|
|||
Total Costs and Expenses
|
394
|
|
|
239
|
|
|
107
|
|
|||
OPERATING INCOME
|
206
|
|
|
74
|
|
|
57
|
|
|||
Interest and financing costs, net
|
(109
|
)
|
|
(40
|
)
|
|
(9
|
)
|
|||
Equity in earnings of unconsolidated affiliates
|
1
|
|
|
—
|
|
|
—
|
|
|||
Interest income
|
—
|
|
|
1
|
|
|
—
|
|
|||
NET INCOME
|
$
|
98
|
|
|
$
|
35
|
|
|
$
|
48
|
|
|
|
|
|
|
|
||||||
Loss attributable to Predecessors
|
$
|
4
|
|
|
$
|
45
|
|
|
$
|
9
|
|
Net income attributable to noncontrolling interest
|
(3
|
)
|
|
—
|
|
|
—
|
|
|||
Net income attributable to partners
|
99
|
|
|
80
|
|
|
57
|
|
|||
General partner’s interest in net income, including incentive distribution rights
|
(43
|
)
|
|
(12
|
)
|
|
(3
|
)
|
|||
Limited partners’ interest in net income
|
$
|
56
|
|
|
$
|
68
|
|
|
$
|
54
|
|
|
|
|
|
|
|
||||||
Net income per limited partner unit:
|
|
|
|
|
|
||||||
Common - basic
|
$
|
0.96
|
|
|
$
|
1.48
|
|
|
$
|
1.90
|
|
Common - diluted
|
$
|
0.96
|
|
|
$
|
1.47
|
|
|
$
|
1.89
|
|
Subordinated - basic and diluted
|
$
|
0.62
|
|
|
$
|
1.35
|
|
|
$
|
1.47
|
|
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
||||||
Common units - basic
|
54,203,508
|
|
|
31,545,935
|
|
|
16,614,668
|
|
|||
Common units - diluted
|
54,249,416
|
|
|
31,618,434
|
|
|
16,708,950
|
|
|||
Subordinated units - basic and diluted
|
5,642,220
|
|
|
15,254,890
|
|
|
15,254,890
|
|
|||
|
|
|
|
|
|
||||||
Cash distributions paid per unit
|
$
|
2.4125
|
|
|
$
|
2.0175
|
|
|
$
|
1.605
|
|
(a)
|
All periods include the historical results of the Predecessors. Prior year amounts have been adjusted to include amounts related to the West Coast Logistics Assets. See Notes 1 and 2 for further discussion.
|
|
|
|
|
Partnership
|
|
|
|
|
||||||||||||||||
|
Equity of Predecessors (a)
|
|
|
Common
|
|
Subordinated
|
|
General Partner
|
|
Non-controlling Interest
|
|
Total
|
||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||||||
Balance at December 31, 2011
|
$
|
83
|
|
|
|
$
|
250
|
|
|
$
|
(143
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
192
|
|
Sponsor contributions of equity to the Predecessors
|
61
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
||||||
Loss attributable to Predecessors
|
(9
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
||||||
Net liabilities not assumed by Tesoro Logistics LP
|
2
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Allocation of net assets acquired by the unitholders
|
(111
|
)
|
|
|
98
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
||||||
Equity offering, net of issuance costs
|
—
|
|
|
|
174
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
171
|
|
||||||
Distributions to unitholders and general partner related to acquisitions (b)
|
—
|
|
|
|
(376
|
)
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(419
|
)
|
||||||
Quarterly distributions to unitholders and general partner
|
—
|
|
|
|
(26
|
)
|
|
(25
|
)
|
|
(2
|
)
|
|
—
|
|
|
(53
|
)
|
||||||
Net income attributable to partners
|
—
|
|
|
|
28
|
|
|
26
|
|
|
3
|
|
|
—
|
|
|
57
|
|
||||||
Other
|
—
|
|
|
|
5
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Balance at December 31, 2012
|
$
|
26
|
|
|
|
$
|
153
|
|
|
$
|
(144
|
)
|
|
$
|
(27
|
)
|
|
$
|
—
|
|
|
$
|
8
|
|
Sponsor contributions of equity to the Predecessors
|
29
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||||
Sponsor contributions of assets acquired to the Predecessors
|
702
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
702
|
|
||||||
Loss attributable to Predecessors
|
(45
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
||||||
Net liabilities not assumed by Tesoro Logistics LP
|
15
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||||
Allocation of net assets acquired by the unitholders
|
(698
|
)
|
|
|
655
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
||||||
Equity offering, net of issuance costs
|
—
|
|
|
|
710
|
|
|
(9
|
)
|
|
8
|
|
|
—
|
|
|
709
|
|
||||||
Distributions to unitholders and general partner related to acquisitions (b)
|
—
|
|
|
|
(1,049
|
)
|
|
—
|
|
|
(80
|
)
|
|
—
|
|
|
(1,129
|
)
|
||||||
Quarterly distributions to unitholders and general partner
|
—
|
|
|
|
(63
|
)
|
|
(30
|
)
|
|
(9
|
)
|
|
—
|
|
|
(102
|
)
|
||||||
Net income attributable to partners
|
—
|
|
|
|
46
|
|
|
22
|
|
|
12
|
|
|
—
|
|
|
80
|
|
||||||
Other
|
—
|
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||
Balance at December 31, 2013
|
$
|
29
|
|
|
|
$
|
459
|
|
|
$
|
(161
|
)
|
|
$
|
(53
|
)
|
|
$
|
—
|
|
|
$
|
274
|
|
Sponsor contributions of equity to the Predecessors
|
3
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Loss attributable to Predecessors
|
(4
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||
Net liabilities not assumed by Tesoro Logistics LP
|
1
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Allocation of net assets acquired by the unitholders
|
(29
|
)
|
|
|
28
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Equity offerings
|
—
|
|
|
|
1,480
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
1,510
|
|
||||||
Equity issuance costs
|
—
|
|
|
|
(31
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(32
|
)
|
||||||
Quarterly distributions to unitholders and general partner
|
—
|
|
|
|
(131
|
)
|
|
(17
|
)
|
|
(35
|
)
|
|
—
|
|
|
(183
|
)
|
||||||
Subordinated unit conversion
|
—
|
|
|
|
(165
|
)
|
|
165
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Distributions to unitholders and general partner related to acquisitions (b)
|
—
|
|
|
|
(237
|
)
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(243
|
)
|
||||||
Contributions
|
—
|
|
|
|
27
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
29
|
|
||||||
Net income
|
—
|
|
|
|
43
|
|
|
13
|
|
|
43
|
|
|
3
|
|
|
102
|
|
||||||
Noncontrolling interest acquired
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
432
|
|
|
432
|
|
||||||
Other
|
—
|
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Balance at December 31, 2014
|
$
|
—
|
|
|
|
$
|
1,474
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
435
|
|
|
$
|
1,890
|
|
(b)
|
Distributions to unitholders and general partner include
$243 million
,
$1.1 billion
and
$419 million
in cash payments for acquisitions from Tesoro during 2014, 2013 and 2012, respectively. As an entity under common control with Tesoro, we record the assets that we acquire from Tesoro in our consolidated balance sheets at Tesoro’s historical book value instead of fair value, and any excess of cash paid over the historical book value of the assets acquired from Tesoro is recorded within equity. As a result of this accounting treatment, these transactions resulted in net decreases of
$214 million
,
$431 million
and
$308 million
in our equity balance during 2014, 2013 and 2012, respectively.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(Dollars in millions)
|
||||||||||
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
98
|
|
|
$
|
35
|
|
|
$
|
48
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expenses
|
77
|
|
|
45
|
|
|
15
|
|
|||
Amortization of debt issuance costs
|
6
|
|
|
2
|
|
|
1
|
|
|||
Unit-based compensation expense
|
2
|
|
|
2
|
|
|
1
|
|
|||
Loss (gain) on asset disposals and impairments
|
(4
|
)
|
|
—
|
|
|
1
|
|
|||
Earnings from unconsolidated affiliates in excess of distributions
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||
Changes in receivables
|
(8
|
)
|
|
(48
|
)
|
|
(8
|
)
|
|||
Changes in other current assets
|
10
|
|
|
(2
|
)
|
|
—
|
|
|||
Changes in current liabilities
|
9
|
|
|
47
|
|
|
13
|
|
|||
Changes in other noncurrent assets and liabilities
|
(4
|
)
|
|
12
|
|
|
1
|
|
|||
Net cash from operating activities
|
185
|
|
|
93
|
|
|
72
|
|
|||
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Capital expenditures
|
(199
|
)
|
|
(76
|
)
|
|
(93
|
)
|
|||
Acquisitions
|
(2,479
|
)
|
|
(315
|
)
|
|
(40
|
)
|
|||
Capital expenditure reimbursements
|
—
|
|
|
—
|
|
|
5
|
|
|||
Proceeds from sale of assets
|
10
|
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(2,668
|
)
|
|
(391
|
)
|
|
(128
|
)
|
|||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds from debt offering
|
1,300
|
|
|
806
|
|
|
350
|
|
|||
Proceeds from issuance of common units, net of issuance costs
|
1,449
|
|
|
701
|
|
|
171
|
|
|||
Proceeds from issuance of general partner units, net of issuance costs
|
29
|
|
|
8
|
|
|
—
|
|
|||
Distributions related to acquisitions
|
(243
|
)
|
|
(1,129
|
)
|
|
(419
|
)
|
|||
Quarterly distributions to unitholders
|
(148
|
)
|
|
(93
|
)
|
|
(51
|
)
|
|||
Quarterly distributions to general partner
|
(35
|
)
|
|
(9
|
)
|
|
(2
|
)
|
|||
Repayments under revolving credit agreement
|
(386
|
)
|
|
(794
|
)
|
|
(118
|
)
|
|||
Borrowings under revolving credit agreement
|
646
|
|
|
794
|
|
|
68
|
|
|||
Repayments of debt
|
(130
|
)
|
|
—
|
|
|
—
|
|
|||
Sponsor contributions of equity to the Predecessors
|
3
|
|
|
29
|
|
|
61
|
|
|||
Financing costs
|
(32
|
)
|
|
(16
|
)
|
|
(9
|
)
|
|||
Capital contributions by affiliate
|
26
|
|
|
5
|
|
|
6
|
|
|||
Net cash from financing activities
|
2,479
|
|
|
302
|
|
|
57
|
|
|||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(4
|
)
|
|
4
|
|
|
1
|
|
|||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
23
|
|
|
19
|
|
|
18
|
|
|||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
$
|
19
|
|
|
$
|
23
|
|
|
$
|
19
|
|
•
|
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 (the “Northwest Products Pipeline”);
|
•
|
a regulated common carrier refined products pipeline system connecting Tesoro’s Kenai refinery to Anchorage, Alaska;
|
•
|
24
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
truck terminals,
ten
storage tanks,
two
rail loading and unloading facilities and a refined products pipeline (the “West Coast Logistics Assets”) effective July 1, 2014 for the terminals, storage tanks and rail facilities and effective September 30, 2014 for the refined products pipeline (the “West Coast Logistics Assets Acquisition”);
|
•
|
two
marine terminals, a marine storage terminal, a products terminal, a petroleum coke handling and storage facility, over
100
miles of active crude oil and refined products pipeline and certain assets and properties related thereto located in Southern California (the “Los Angeles Logistics Assets”) effective
December 6, 2013
(the “Los Angeles Logistics Assets Acquisition”);
|
•
|
six
marketing terminals and storage facilities located in Southern California and certain assets and properties related thereto (the “Los Angeles Terminal Assets”) effective
June 1, 2013
(the “Los Angeles Terminal Assets Acquisition”);
|
•
|
the Anacortes rail car unloading facility assets (collectively, the “Anacortes Rail Facility”) effective
November 15, 2012
(the “Anacortes Rail Facility Acquisition”);
|
•
|
the Long Beach marine terminal and related short-haul pipelines, including the Los Angeles short-haul pipelines effective
September 14, 2012
(the “Long Beach Assets Acquisition”); and
|
•
|
the Martinez crude oil marine terminal assets effective
April 1, 2012
(the “Martinez Marine Terminal Acquisition”).
|
•
|
the short term duration of the instruments (less than
one
percent of our trade payables and
seven percent
of our third-party receivables have been outstanding for greater than
90 days
); and
|
•
|
the expected future insignificance of bad debt expense, which includes an evaluation of counterparty credit risk.
|
•
|
the customer receiving the services provided by these billings;
|
•
|
the expiration of the period in which the customer is contractually allowed to receive the services; or
|
•
|
the determination that future services will not be required.
|
Cash
|
$
|
31
|
|
Accounts receivable
|
117
|
|
|
Prepayments and other
|
7
|
|
|
Property, plant and equipment
|
1,735
|
|
|
Intangibles
|
976
|
|
|
Goodwill
|
155
|
|
|
Investment in unconsolidated affiliates
|
57
|
|
|
Other noncurrent assets
|
22
|
|
|
Accounts payable
|
(81
|
)
|
|
Other current liabilities
|
(47
|
)
|
|
Other noncurrent liabilities
|
(30
|
)
|
|
Noncontrolling interest
|
(432
|
)
|
|
Total purchase price
|
$
|
2,510
|
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(Dollars in millions, except per unit amounts)
|
||||||
Revenues
|
$
|
936
|
|
|
$
|
689
|
|
Net income
|
126
|
|
|
72
|
|
||
Net income attributable to partners
|
106
|
|
|
105
|
|
||
|
|
|
|
||||
Net income per limited partner unit:
|
|
|
|
||||
Common - basic and diluted
|
$
|
0.77
|
|
|
$
|
1.23
|
|
Subordinated - basic and diluted
|
$
|
1.13
|
|
|
$
|
1.39
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
(in millions)
|
||||||||||
Revenues
|
|
$
|
6
|
|
|
$
|
8
|
|
|
$
|
7
|
|
Total costs and expenses
|
|
(10
|
)
|
|
(15
|
)
|
|
(15
|
)
|
|||
Net loss
|
|
$
|
(4
|
)
|
|
$
|
(7
|
)
|
|
$
|
(8
|
)
|
|
|
Year Ended December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
|
|
(Dollars in millions, except per unit amounts)
|
||||||
Revenues
|
|
$
|
327
|
|
|
$
|
207
|
|
Net income
|
|
46
|
|
|
67
|
|
||
Net income attributable to partners
|
|
84
|
|
|
68
|
|
||
|
|
|
|
|
||||
Net income per limited partner unit:
|
|
|
|
|
||||
Common - basic
|
|
$
|
1.56
|
|
|
$
|
1.59
|
|
Common - diluted
|
|
$
|
1.56
|
|
|
$
|
1.58
|
|
Subordinated - basic and diluted
|
|
$
|
1.46
|
|
|
$
|
1.49
|
|
|
Year Ended
December 31, 2014
|
||
West Coast Logistics Acquisition:
|
|
||
Total revenues
|
$
|
19
|
|
Net income attributable to partners
|
13
|
|
|
Costs associated with the acquisition (a)
|
2
|
|
|
Rockies Natural Gas Business Acquisition:
|
|
||
Total revenues
|
$
|
36
|
|
Net income attributable to partners
|
7
|
|
|
Costs associated with the acquisition (a)
|
33
|
|
(a)
|
Costs associated with the acquisitions are included in the general and administrative expenses and interest and financing costs in our combined consolidated statements of operations.
|
|
Initiation Date
|
|
Term
|
|
Renewals
|
|
Termination Provisions
|
||
|
|
|
Refinery Shutdown Notice Period (a)
|
|
Force Majeure
|
||||
Transportation Services Agreement (High Plains System)
|
April 2011
|
|
10 years
|
|
2 x 5 years
|
|
12 months
|
|
TLLP can declare (unilateral)
|
Second Amended and Restated Trucking Transportation Services Agreement (High Plains System)
|
April 2011
|
|
5 years
|
|
1 x 5 years
|
|
|||
Second Amended and Restated Master Terminalling Services Agreement
|
April 2011
|
|
10 years
|
|
2 x 5 years
|
|
|||
Amended Salt Lake City Storage and Transportation Services Agreement
|
April 2011
|
|
10 years
|
|
2 x 5 years
|
|
|||
Amorco Terminal Use and Throughput Agreement (Martinez Marine)
|
April 2012
|
|
10 years
|
|
2 x 5 years
|
|
|||
Amended Anacortes Track Use and Throughput Agreement
|
November 2012
|
|
10 years
|
|
2 x 5 years
|
|
N/A
|
|
|
Carson Storage Services Agreement
|
June 2013
|
|
10 years
|
|
2 x 5 years
|
|
|
||
Amended and Restated Master Terminalling Services Agreement - Southern California
|
June 2013
|
|
10 years
|
|
2 x 5 years
|
|
|
||
Long Beach Storage Services Agreement
|
December 2013
|
|
10 years
|
|
2 x 5 years
|
|
|
||
Transportation Services Agreement (SoCal Pipelines)
|
December 2013
|
|
10 years
|
|
2 x 5 years
|
|
|
||
Carson Coke Handling Services Agreement
|
December 2013
|
|
10 years
|
|
2 x 5 years
|
|
|
||
Amended and Restated Long Beach Berth Access Use and Throughput Agreement (b)
|
December 2013
|
|
10 years
|
|
2 x 5 years
|
|
|
||
Long Beach Berth Throughput Agreement (b)
|
December 2013
|
|
10 years
|
|
2 x 5 years
|
|
|
||
Long Beach Pipeline Throughput Agreement
|
December 2013
|
|
10 years
|
|
2 x 5 years
|
|
|
||
Terminalling Services Agreement - Nikiski
|
July 2014
|
|
10 years
|
|
2 x 5 years
|
|
|
||
Terminalling Services Agreement - Anacortes
|
July 2014
|
|
10 years
|
|
2 x 5 years
|
|
|
||
Terminalling Services Agreement - Martinez
|
July 2014
|
|
10 years
|
|
2 x 5 years
|
|
|
||
Storage Services Agreement - Anacortes
|
July 2014
|
|
10 years
|
|
2 x 5 years
|
|
|
||
Martinez Dedicated LPG Storage Agreement
|
July 2014
|
|
10 years
|
|
2 x 5 years
|
|
|
||
Tesoro Alaska Pipeline Throughput Agreement
|
September 2014
|
|
10 years
|
|
2 x 5 years
|
|
|
(a)
|
Fixed minimum volumes remain in effect during routine turnarounds.
|
(b)
|
Agreement gives Tesoro the option to renew for two five-year terms, or Tesoro may modify the term of the agreements to a twenty-year term by providing notice in accordance with each agreement.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Revenues
|
$
|
497
|
|
|
$
|
273
|
|
|
$
|
150
|
|
Operating and maintenance expenses
|
77
|
|
|
71
|
|
|
28
|
|
|||
Imbalance settlement gains and reimbursements from Tesoro (a)
|
(43
|
)
|
|
(12
|
)
|
|
(12
|
)
|
|||
General and administrative expenses
|
39
|
|
|
20
|
|
|
13
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net income attributable to partners
|
$
|
99
|
|
|
$
|
80
|
|
|
$
|
57
|
|
Special allocation of net income (“Special Allocation”) (a)
|
7
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to partners, excluding Special Allocation
|
106
|
|
|
80
|
|
|
57
|
|
|||
General partner’s distributions (including IDRs) (b)
|
(46
|
)
|
|
(13
|
)
|
|
(3
|
)
|
|||
Limited partners’ distributions on common units
|
(157
|
)
|
|
(71
|
)
|
|
(36
|
)
|
|||
Limited partner’s distributions on subordinated units (c)
|
(14
|
)
|
|
(32
|
)
|
|
(26
|
)
|
|||
Distributions greater than earnings
|
$
|
(111
|
)
|
|
$
|
(36
|
)
|
|
$
|
(8
|
)
|
|
|
|
|
|
|
||||||
General partner’s earnings:
|
|
|
|
|
|
||||||
Distributions (including IDRs) (b)
|
$
|
46
|
|
|
$
|
13
|
|
|
$
|
3
|
|
Allocation of distributions greater than earnings
|
(3
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Total general partner’s earnings
|
$
|
43
|
|
|
$
|
12
|
|
|
$
|
3
|
|
|
|
|
|
|
|
||||||
Limited partners’ earnings on common units:
|
|
|
|
|
|
||||||
Distributions
|
$
|
157
|
|
|
$
|
71
|
|
|
$
|
36
|
|
Special Allocation (a)
|
(7
|
)
|
|
—
|
|
|
—
|
|
|||
Allocation of distributions greater than earnings
|
(98
|
)
|
|
(23
|
)
|
|
(4
|
)
|
|||
Total limited partners’ earnings on common units
|
$
|
52
|
|
|
$
|
48
|
|
|
$
|
32
|
|
|
|
|
|
|
|
||||||
Limited partner’s earnings on subordinated units (c):
|
|
|
|
|
|
||||||
Distributions
|
$
|
14
|
|
|
$
|
32
|
|
|
$
|
26
|
|
Allocation of distributions greater than earnings
|
(10
|
)
|
|
(12
|
)
|
|
(4
|
)
|
|||
Total limited partner’s earnings on subordinated units
|
$
|
4
|
|
|
$
|
20
|
|
|
$
|
22
|
|
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
||||||
Common units - basic
|
54,203,508
|
|
|
31,545,935
|
|
|
16,614,668
|
|
|||
Common unit equivalents
|
45,908
|
|
|
72,499
|
|
|
94,282
|
|
|||
Common units - diluted
|
54,249,416
|
|
|
31,618,434
|
|
|
16,708,950
|
|
|||
|
|
|
|
|
|
||||||
Subordinated units - basic and diluted (c)
|
5,642,220
|
|
|
15,254,890
|
|
|
15,254,890
|
|
|||
|
|
|
|
|
|
||||||
Net income per limited partner unit:
|
|
|
|
|
|
|
|||||
Common - basic
|
$
|
0.96
|
|
|
$
|
1.48
|
|
|
$
|
1.90
|
|
Common - diluted
|
$
|
0.96
|
|
|
$
|
1.47
|
|
|
$
|
1.89
|
|
Subordinated - basic and diluted
|
$
|
0.62
|
|
|
$
|
1.35
|
|
|
$
|
1.47
|
|
(a)
|
Normal allocations according to percentage interests are made after giving effect, if any, to priority income allocations in an amount equal to incentive cash distributions fully allocated to the general partner and any special allocations. The adjustment reflects the special allocation to TLGP common unitholders for the premium paid in connection with the redemption of the senior notes due 2020.
|
(b)
|
General partner’s distributions (including IDRs) consist of the
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 12 for further discussion related to IDRs.
|
(c)
|
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.
|
|
December 31,
2014 |
|
December 31,
2013 |
||||
Gathering
|
$
|
1,507
|
|
|
$
|
172
|
|
Processing
|
539
|
|
|
—
|
|
||
Terminalling and Transportation
|
1,478
|
|
|
1,397
|
|
||
Other
|
27
|
|
|
—
|
|
||
Property, Plant and Equipment
|
3,551
|
|
|
1,569
|
|
||
Accumulated depreciation
|
(245
|
)
|
|
(171
|
)
|
||
Net Property, Plant and Equipment
|
$
|
3,306
|
|
|
$
|
1,398
|
|
|
December 31,
2014 |
|
December 31,
2013 |
||||
Legal
|
$
|
21
|
|
|
$
|
—
|
|
Accrued environmental liabilities
|
13
|
|
|
20
|
|
||
Other
|
45
|
|
|
10
|
|
||
Total Other Current Liabilities
|
$
|
79
|
|
|
$
|
30
|
|
Debt, including current maturities:
|
December 31,
2014 |
|
December 31,
2013 |
||||
Revolving Credit Facility
|
$
|
260
|
|
|
$
|
—
|
|
5.500% Senior Notes due 2019
|
500
|
|
|
—
|
|
||
5.875% Senior Notes due 2020 (a)
|
475
|
|
|
606
|
|
||
6.125% Senior Notes due 2021
|
550
|
|
|
550
|
|
||
6.250% Senior Notes due 2022
|
800
|
|
|
—
|
|
||
Capital lease obligations
|
8
|
|
|
8
|
|
||
Total Debt
|
2,593
|
|
|
1,164
|
|
||
Current maturities
|
—
|
|
|
—
|
|
||
Debt, less current maturities
|
$
|
2,593
|
|
|
$
|
1,164
|
|
(a)
|
Includes an unamortized premium of
$5 million
and
$6 million
as of December 31, 2014 and 2013, respectively.
|
Credit Facility
|
|
30 day Eurodollar (LIBOR) Rate
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
|
Commitment Fee
(unused portion)
|
Revolving Credit Facility (b)
|
|
0.17%
|
|
2.75%
|
|
3.25%
|
|
1.75%
|
|
0.50%
|
2015
|
$
|
1
|
|
2016
|
1
|
|
|
2017
|
1
|
|
|
2018
|
1
|
|
|
2019
|
1
|
|
|
Thereafter
|
7
|
|
|
Total minimum lease payments
|
12
|
|
|
Less amount representing interest
|
(4
|
)
|
|
Capital lease obligations
|
$
|
8
|
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
Operating leases
|
$
|
10
|
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
65
|
|
|
$
|
102
|
|
Purchase obligations
|
84
|
|
|
85
|
|
|
84
|
|
|
84
|
|
|
84
|
|
|
136
|
|
|
557
|
|
|||||||
Total
|
$
|
94
|
|
|
$
|
93
|
|
|
$
|
91
|
|
|
$
|
90
|
|
|
$
|
90
|
|
|
$
|
201
|
|
|
$
|
659
|
|
|
|
Tioga Crude Oil Pipeline Release
|
|
Chevron Corrective Action Order
|
|
Other Liabilities
|
|
Total
|
||||||||
Balance at December 31, 2013
|
|
$
|
11
|
|
|
$
|
8
|
|
|
$
|
5
|
|
|
$
|
24
|
|
Additions
|
|
28
|
|
|
—
|
|
|
2
|
|
|
30
|
|
||||
Expenditures
|
|
(14
|
)
|
|
(6
|
)
|
|
(2
|
)
|
|
(22
|
)
|
||||
Balance at December 31, 2014
|
|
$
|
25
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
32
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net income attributable to partners
|
$
|
99
|
|
|
$
|
80
|
|
|
$
|
57
|
|
General partner’s IDRs
|
(41
|
)
|
|
(11
|
)
|
|
(2
|
)
|
|||
Special Allocation
|
7
|
|
|
—
|
|
|
—
|
|
|||
Net income available to partners
|
$
|
65
|
|
|
$
|
69
|
|
|
$
|
55
|
|
General partner’s ownership interest
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|||
General partner’s allocated interest in net income
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
1
|
|
General partner’s IDRs
|
41
|
|
|
11
|
|
|
2
|
|
|||
Total general partner’s interest in net income
|
$
|
43
|
|
|
$
|
12
|
|
|
$
|
3
|
|
|
Common
|
|
Subordinated
|
|
General Partner
|
|
Total
|
||||
Balance at December 31, 2011
|
15,254,890
|
|
|
15,254,890
|
|
|
622,649
|
|
|
31,132,429
|
|
Units issued in the Martinez Marine Terminal Acquisition
|
206,362
|
|
|
—
|
|
|
4,212
|
|
|
210,574
|
|
Units issued in the Long Beach Assets Acquisition
|
462,825
|
|
|
—
|
|
|
9,446
|
|
|
472,271
|
|
Units issued in the Anacortes Rail Facility Acquisition
|
309,838
|
|
|
—
|
|
|
93,289
|
|
|
403,127
|
|
Issuance of units in October 2012 equity offering (a)
|
4,255,000
|
|
|
—
|
|
|
—
|
|
|
4,255,000
|
|
Unit-based compensation awards (b)
|
6,339
|
|
|
—
|
|
|
—
|
|
|
6,339
|
|
Balance at December 31, 2012
|
20,495,254
|
|
|
15,254,890
|
|
|
729,596
|
|
|
36,479,740
|
|
Issuance of units in January 2013 equity offering (c)
|
9,775,000
|
|
|
—
|
|
|
199,490
|
|
|
9,974,490
|
|
Units issued for the LA Terminal Assets Acquisition
|
1,445,561
|
|
|
—
|
|
|
29,501
|
|
|
1,475,062
|
|
Issuance of units in November 2013 equity offering (d)
|
6,300,000
|
|
|
—
|
|
|
—
|
|
|
6,300,000
|
|
Units issued for the LA Logistics Assets Acquisition
|
1,126,348
|
|
|
—
|
|
|
151,695
|
|
|
1,278,043
|
|
Unit-based compensation awards (b)
|
6,753
|
|
|
—
|
|
|
—
|
|
|
6,753
|
|
Balance at December 31, 2013
|
39,148,916
|
|
|
15,254,890
|
|
|
1,110,282
|
|
|
55,514,088
|
|
Issuance of units under ATM Program
|
199,400
|
|
|
—
|
|
|
—
|
|
|
199,400
|
|
Issuance of units in the West Coast Logistics Assets Acquisition (e)
|
370,843
|
|
|
—
|
|
|
8,856
|
|
|
379,699
|
|
Issuance of units in August 2014 equity offering (f)
|
2,100,000
|
|
|
—
|
|
|
44,000
|
|
|
2,144,000
|
|
Issuance of units in October 2014 equity offering (g)
|
23,000,000
|
|
|
—
|
|
|
468,310
|
|
|
23,468,310
|
|
Unit-based compensation awards (b)
|
51,881
|
|
|
—
|
|
|
—
|
|
|
51,881
|
|
Subordinated unit conversion
|
15,254,890
|
|
|
(15,254,890
|
)
|
|
—
|
|
|
—
|
|
Balance at December 31, 2014
|
80,125,930
|
|
|
—
|
|
|
1,631,448
|
|
|
81,757,378
|
|
(e)
|
On
July 1, 2014
, we closed on the first portion of the West Coast Logistics Assets Acquisition and issued equity to Tesoro with a fair value of
$27 million
comprised of
370,843
common units and
8,856
general partner units.
|
(f)
|
On
August 22, 2014
, we closed the August 2014 Equity Offering. We used a significant portion of the net proceeds of
$142 million
to redeem a portion of the
5.875%
Senior Notes due
2020
. TLGP contributed
$3 million
to maintain its
2%
general partnership interest.
|
(g)
|
On
October 24, 2014
, we closed a registered public offering of
23 million
common units representing limited partner interests, at a public offering price of
$57.47
per unit. The net proceeds of
$1.3 billion
include the purchase of
8,700,191
common units by Tesoro equal to
$500 million
and an over-allotment option exercised by the underwriters to purchase an additional
3 million
common units. Concurrent with the October 2014 Equity Offering, TLGP contributed
$27 million
to maintain its
2%
general partner interest in TLLP.
|
|
Total quarterly distribution per unit target amount
|
|
Marginal percentage interest in distributions
|
|||||
|
|
Unitholders
|
|
General Partner
|
|
Incentive Distribution Rights
|
||
Minimum Quarterly Distribution
|
$0.337500
|
|
|
98%
|
|
2%
|
|
—
|
First Target Distribution
|
Above $0.337500 up to $0.388125
|
|
98%
|
|
2%
|
|
—
|
|
Second Target Distribution
|
Above $0.388125 up to $0.421875
|
|
85%
|
|
2%
|
|
13%
|
|
Third Target Distribution
|
Above $0.421875 up to $0.506250
|
|
75%
|
|
2%
|
|
23%
|
|
Thereafter
|
Above $0.506250
|
|
|
50%
|
|
2%
|
|
48%
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
General partner’s distributions:
|
|
|
|
|
|
||||||
General partner’s distributions
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
1
|
|
General partner’s IDRs
|
41
|
|
|
11
|
|
|
2
|
|
|||
Total general partner’s distributions
|
$
|
46
|
|
|
$
|
13
|
|
|
$
|
3
|
|
|
|
|
|
|
|
||||||
Limited partners’ distributions:
|
|
|
|
|
|
||||||
Common
|
$
|
157
|
|
|
$
|
71
|
|
|
$
|
36
|
|
Subordinated
|
14
|
|
|
32
|
|
|
26
|
|
|||
Total limited partners’ distributions
|
171
|
|
|
103
|
|
|
62
|
|
|||
Total Cash Distributions
|
$
|
217
|
|
|
$
|
116
|
|
|
$
|
65
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Sponsor contributions of assets acquired to the Predecessors
|
$
|
—
|
|
|
$
|
702
|
|
|
$
|
—
|
|
Assets received for deposit paid in prior period
|
—
|
|
|
40
|
|
|
—
|
|
|||
Capital expenditures included in accounts payable at period end
|
62
|
|
|
12
|
|
|
5
|
|
|||
Capital leases and other
|
4
|
|
|
5
|
|
|
4
|
|
|||
Predecessors’ net liabilities not assumed by Tesoro Logistics LP
|
1
|
|
|
15
|
|
|
2
|
|
|||
Receivable from affiliate for capital expenditures
|
3
|
|
|
1
|
|
|
—
|
|
•
|
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;
|
•
|
a regulated common carrier refined products pipeline system connecting Tesoro’s Kenai refinery to Anchorage, Alaska;
|
•
|
24
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.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
REVENUES
|
|
|
|
|
|
||||||
Gathering:
|
|
|
|
|
|
||||||
Affiliate (a)
|
$
|
107
|
|
|
$
|
88
|
|
|
$
|
72
|
|
Third-party
|
30
|
|
|
2
|
|
|
—
|
|
|||
Total Gathering
|
137
|
|
|
90
|
|
|
72
|
|
|||
Processing:
|
|
|
|
|
|
||||||
Affiliate
|
7
|
|
|
—
|
|
|
—
|
|
|||
Third-party
|
16
|
|
|
—
|
|
|
—
|
|
|||
Total Processing
|
23
|
|
|
—
|
|
|
—
|
|
|||
Terminalling and Transportation:
|
|
|
|
|
|
||||||
Affiliate (b)
|
385
|
|
|
185
|
|
|
78
|
|
|||
Third-party
|
57
|
|
|
38
|
|
|
14
|
|
|||
Total Terminalling and Transportation
|
442
|
|
|
223
|
|
|
92
|
|
|||
Intersegment Revenues (a)
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
Total Segment Revenues
|
$
|
600
|
|
|
$
|
313
|
|
|
$
|
164
|
|
OPERATING INCOME
|
|
|
|
|
|
||||||
Gathering
|
$
|
49
|
|
|
$
|
34
|
|
|
$
|
26
|
|
Processing
|
4
|
|
|
—
|
|
|
—
|
|
|||
Terminalling and Transportation
|
192
|
|
|
57
|
|
|
40
|
|
|||
Total Segment Operating Income
|
245
|
|
|
91
|
|
|
66
|
|
|||
Unallocated general and administrative expenses
|
(39
|
)
|
|
(17
|
)
|
|
(9
|
)
|
|||
Interest and financing costs, net
|
(109
|
)
|
|
(40
|
)
|
|
(9
|
)
|
|||
Equity in earnings of unconsolidated affiliates
|
1
|
|
|
—
|
|
|
—
|
|
|||
Interest income
|
—
|
|
|
1
|
|
|
—
|
|
|||
NET INCOME
|
$
|
98
|
|
|
$
|
35
|
|
|
$
|
48
|
|
(a)
|
Affiliate gathering revenues includes
$2 million
of intersegment revenues related to transactions between our Gathering and Processing segments for the year ended
December 31, 2014
, which is eliminated upon consolidation.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Capital Expenditures
|
|
|
|
|
|
||||||
Gathering
|
$
|
156
|
|
|
$
|
52
|
|
|
$
|
17
|
|
Processing
|
4
|
|
|
—
|
|
|
—
|
|
|||
Terminalling and Transportation
|
84
|
|
|
31
|
|
|
77
|
|
|||
Total Capital Expenditures
|
$
|
244
|
|
|
$
|
83
|
|
|
$
|
94
|
|
|
December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Identifiable Assets
|
|
|
|
|
|
||||||
Gathering
|
$
|
1,694
|
|
|
$
|
155
|
|
|
$
|
87
|
|
Processing
|
1,612
|
|
|
—
|
|
|
—
|
|
|||
Terminalling and Transportation
|
1,352
|
|
|
1,330
|
|
|
233
|
|
|||
Other
|
156
|
|
|
48
|
|
|
71
|
|
|||
Total Identifiable Assets
|
$
|
4,814
|
|
|
$
|
1,533
|
|
|
$
|
391
|
|
|
Quarters
|
|
|
||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Total Year
|
||||||||||
2014
|
(Dollars in millions, except per unit amounts)
|
||||||||||||||||||
Total Revenues
|
$
|
127
|
|
|
$
|
133
|
|
|
$
|
150
|
|
|
$
|
190
|
|
|
$
|
600
|
|
Operating and Maintenance Expenses
|
53
|
|
|
63
|
|
|
72
|
|
|
102
|
|
|
290
|
|
|||||
Operating Income
|
60
|
|
|
48
|
|
|
61
|
|
|
37
|
|
|
206
|
|
|||||
Net Income (Loss)
|
42
|
|
|
31
|
|
|
33
|
|
|
(8
|
)
|
|
98
|
|
|||||
Limited partners’ interest in net income (loss)
|
36
|
|
|
26
|
|
|
19
|
|
|
(25
|
)
|
|
56
|
|
|||||
Net Income (Loss) per limited partner unit (a):
|
|
|
|
|
|
|
|
|
|
||||||||||
Common - basic
|
$
|
0.64
|
|
|
$
|
0.45
|
|
|
$
|
0.33
|
|
|
$
|
(0.34
|
)
|
|
$
|
0.96
|
|
Common - diluted
|
$
|
0.64
|
|
|
$
|
0.45
|
|
|
$
|
0.33
|
|
|
$
|
(0.34
|
)
|
|
$
|
0.96
|
|
Subordinated - basic and diluted
|
$
|
0.64
|
|
|
$
|
0.45
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.62
|
|
2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Revenues
|
$
|
53
|
|
|
$
|
62
|
|
|
$
|
97
|
|
|
$
|
101
|
|
|
$
|
313
|
|
Operating and Maintenance Expenses
|
23
|
|
|
32
|
|
|
60
|
|
|
59
|
|
|
174
|
|
|||||
Operating Income
|
22
|
|
|
18
|
|
|
13
|
|
|
21
|
|
|
74
|
|
|||||
Net Income
|
17
|
|
|
11
|
|
|
1
|
|
|
6
|
|
|
35
|
|
|||||
Limited partners’ interest in net income
|
17
|
|
|
17
|
|
|
18
|
|
|
16
|
|
|
68
|
|
|||||
Net Income per limited partner unit (a):
|
|
|
|
|
|
|
|
|
|
||||||||||
Common - basic
|
$
|
0.40
|
|
|
$
|
0.38
|
|
|
$
|
0.37
|
|
|
$
|
0.33
|
|
|
$
|
1.48
|
|
Common - diluted
|
$
|
0.40
|
|
|
$
|
0.38
|
|
|
$
|
0.37
|
|
|
$
|
0.33
|
|
|
$
|
1.47
|
|
Subordinated - basic and diluted
|
$
|
0.37
|
|
|
$
|
0.36
|
|
|
$
|
0.37
|
|
|
$
|
0.26
|
|
|
$
|
1.35
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
||||||||||
Affiliate
|
$
|
6
|
|
|
$
|
484
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
497
|
|
Third-party
|
—
|
|
|
74
|
|
|
29
|
|
|
—
|
|
|
103
|
|
|||||
Total Revenues
|
6
|
|
|
558
|
|
|
36
|
|
|
—
|
|
|
600
|
|
|||||
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating and maintenance expenses
|
9
|
|
|
266
|
|
|
15
|
|
|
—
|
|
|
290
|
|
|||||
Imbalance settlement gains and reimbursements from Tesoro
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|||||
General and administrative expenses
|
37
|
|
|
34
|
|
|
3
|
|
|
—
|
|
|
74
|
|
|||||
Depreciation and amortization expenses
|
1
|
|
|
68
|
|
|
8
|
|
|
—
|
|
|
77
|
|
|||||
Gain on asset disposals and impairments
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Total Costs and Expenses
|
47
|
|
|
321
|
|
|
26
|
|
|
—
|
|
|
394
|
|
|||||
OPERATING INCOME (LOSS)
|
(41
|
)
|
|
237
|
|
|
10
|
|
|
—
|
|
|
206
|
|
|||||
Interest and financing costs, net
|
(115
|
)
|
|
6
|
|
|
—
|
|
|
—
|
|
|
(109
|
)
|
|||||
Equity in earnings of unconsolidated affiliates
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Equity in earnings of subsidiaries
|
251
|
|
|
—
|
|
|
—
|
|
|
(251
|
)
|
|
—
|
|
|||||
NET INCOME
|
$
|
95
|
|
|
$
|
243
|
|
|
$
|
11
|
|
|
$
|
(251
|
)
|
|
$
|
98
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss attributable to Predecessors (a)
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Net income attributable to partners
|
$
|
99
|
|
|
$
|
243
|
|
|
$
|
8
|
|
|
$
|
(251
|
)
|
|
$
|
99
|
|
(a)
|
Amounts attributable to Predecessors have been reflected in the Parent column.
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
19
|
|
Receivables, net
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Trade
|
—
|
|
|
13
|
|
|
109
|
|
|
—
|
|
|
122
|
|
|||||
Affiliate
|
3
|
|
|
52
|
|
|
14
|
|
|
—
|
|
|
69
|
|
|||||
Other
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|||||
Prepayments and other
|
3
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
7
|
|
|||||
Total Current Assets
|
6
|
|
|
85
|
|
|
144
|
|
|
—
|
|
|
235
|
|
|||||
Net property, plant and equipment
|
1
|
|
|
1,569
|
|
|
1,736
|
|
|
—
|
|
|
3,306
|
|
|||||
Intangibles
|
—
|
|
|
—
|
|
|
973
|
|
|
—
|
|
|
973
|
|
|||||
Goodwill
|
—
|
|
|
9
|
|
|
155
|
|
|
—
|
|
|
164
|
|
|||||
Investment in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
|||||
Investments in subsidiaries
|
4,348
|
|
|
—
|
|
|
—
|
|
|
(4,348
|
)
|
|
—
|
|
|||||
Long-term intercompany receivable
|
—
|
|
|
307
|
|
|
—
|
|
|
(307
|
)
|
|
—
|
|
|||||
Other noncurrent assets
|
49
|
|
|
7
|
|
|
23
|
|
|
—
|
|
|
79
|
|
|||||
Total Assets
|
$
|
4,404
|
|
|
$
|
1,977
|
|
|
$
|
3,088
|
|
|
$
|
(4,655
|
)
|
|
$
|
4,814
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade
|
$
|
6
|
|
|
$
|
57
|
|
|
$
|
63
|
|
|
$
|
—
|
|
|
$
|
126
|
|
Affiliate
|
2
|
|
|
40
|
|
|
11
|
|
|
—
|
|
|
53
|
|
|||||
Accrued interest and financing costs
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|||||
Other current liabilities
|
21
|
|
|
33
|
|
|
25
|
|
|
—
|
|
|
79
|
|
|||||
Total Current Liabilities
|
57
|
|
|
130
|
|
|
99
|
|
|
—
|
|
|
286
|
|
|||||
Long-term intercompany payable
|
307
|
|
|
—
|
|
|
—
|
|
|
(307
|
)
|
|
—
|
|
|||||
Other noncurrent liabilities
|
—
|
|
|
14
|
|
|
31
|
|
|
—
|
|
|
45
|
|
|||||
Debt
|
2,585
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
2,593
|
|
|||||
Equity - TLLP
|
1,455
|
|
|
1,825
|
|
|
2,523
|
|
|
(4,348
|
)
|
|
1,455
|
|
|||||
Equity - Noncontrolling interest
|
—
|
|
|
—
|
|
|
435
|
|
|
—
|
|
|
435
|
|
|||||
Total Liabilities and Equity
|
$
|
4,404
|
|
|
$
|
1,977
|
|
|
$
|
3,088
|
|
|
$
|
(4,655
|
)
|
|
$
|
4,814
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash from (used in) operating activities
|
$
|
(138
|
)
|
|
$
|
317
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
185
|
|
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Capital expenditures
|
(1
|
)
|
|
(195
|
)
|
|
(3
|
)
|
|
—
|
|
|
(199
|
)
|
|||||
Acquisitions
|
—
|
|
|
—
|
|
|
(2,479
|
)
|
|
—
|
|
|
(2,479
|
)
|
|||||
Investments in subsidiaries
|
(2,510
|
)
|
|
—
|
|
|
—
|
|
|
2,510
|
|
|
—
|
|
|||||
Distributions to parent
|
15
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|||||
Proceeds from sale of assets
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Net cash used in investing activities
|
(2,496
|
)
|
|
(185
|
)
|
|
(2,497
|
)
|
|
2,510
|
|
|
(2,668
|
)
|
|||||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Proceeds from debt offering
|
1,300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,300
|
|
|||||
Proceeds from issuance of common units, net of issuance costs
|
1,449
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,449
|
|
|||||
Proceeds from issuance of general partner units, net of issuance costs
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|||||
Distributions related to acquisitions
|
(243
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(243
|
)
|
|||||
Quarterly distributions to unitholders
|
(148
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(148
|
)
|
|||||
Quarterly distributions to general partner
|
(35
|
)
|
|
|
|
|
|
|
|
|
|
|
(35
|
)
|
|||||
Repayments under revolving credit agreement
|
(386
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(386
|
)
|
|||||
Borrowings under revolving credit agreement
|
646
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
646
|
|
|||||
Repayments of debt
|
(130
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(130
|
)
|
|||||
Contributions by parent
|
—
|
|
|
—
|
|
|
2,510
|
|
|
(2,510
|
)
|
|
—
|
|
|||||
Intercompany borrowings (payments)
|
132
|
|
|
(132
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sponsor contributions of equity to the Predecessors
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Financing costs
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|||||
Capital contributions by affiliate
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|||||
Net cash from (used in) financing activities
|
2,611
|
|
|
(132
|
)
|
|
2,510
|
|
|
(2,510
|
)
|
|
2,479
|
|
|||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(23
|
)
|
|
—
|
|
|
19
|
|
|
—
|
|
|
(4
|
)
|
|||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
19
|
|
•
|
Leadership experience, as directors with experience in significant leadership positions possess strong abilities to motivate and manage others and to identify and develop leadership qualities in others.
|
•
|
Knowledge of the energy industry, particularly logistics operations, which is integral to understanding our business and strategy.
|
•
|
Operations experience, as it gives directors a practical understanding of developing, implementing and assessing our business strategy and operating plan.
|
•
|
Legal experience, for oversight of our legal and compliance matters.
|
•
|
Risk management experience, which is critical to the Board’s oversight of our risk assessment and risk management programs.
|
•
|
Financial/accounting experience, particularly knowledge of finance and financial reporting processes, which is relevant to understanding and evaluating our capital structure and overseeing the preparation of our financial statements, and internal controls over financial reporting.
|
•
|
Government/regulatory experience, as we operate in a heavily regulated industry that is directly affected by governmental requirements.
|
•
|
Strategic planning experience, which is relevant to the Board’s review of our strategies and monitoring their implementation and results.
|
•
|
Talent management experience, which is valuable in helping us attract, motivate and retain top candidates for management positions.
|
•
|
Public company board service, as directors who have served on other public company boards have experience overseeing and providing insight and guidance to management.
|
Name
|
|
Age
|
|
Position with the General Partner
|
Gregory J. Goff
|
|
58
|
|
Chairman of the Board of Directors and Chief Executive Officer
|
Phillip M. Anderson
|
|
49
|
|
President and Director
|
Raymond J. Bromark
|
|
69
|
|
Director
|
Keith M. Casey
|
|
48
|
|
Director
|
Arlen O. Glenewinkel, Jr.
|
|
58
|
|
Vice President and Controller
|
Brad S. Lakhia
|
|
42
|
|
Vice President and Treasurer
|
James H. Lamanna
|
|
61
|
|
Director
|
Thomas C. O’Connor
|
|
59
|
|
Director
|
Charles S. Parrish
|
|
57
|
|
Vice President, General Counsel, Secretary and Director
|
Don J. Sorensen
|
|
47
|
|
Vice President, Operations
|
Steven M. Sterin
|
|
43
|
|
Vice President, Chief Financial Officer and Director
|
•
|
corporate accounting and financial reporting practices;
|
•
|
the quality and integrity of our financial statements;
|
•
|
the independent auditor’s qualifications, independence, and performance;
|
•
|
the performance of our internal audit function; and
|
•
|
our systems of disclosure controls and procedures and internal controls over financial reporting.
|
(1)
|
The Audit Committee has reviewed and discussed the audited financial statements with management.
|
(2)
|
The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by applicable PCAOB standards.
|
(3)
|
The Audit Committee has received the written disclosures and the letter from the independent auditors required by the PCAOB regarding the independent auditors’ communications with the Audit Committee concerning independence and has discussed with the independent auditors their independence.
|
(4)
|
Based on the review and discussions referred to in paragraphs (1) through (3) above, the Audit Committee recommended to the Board, and the Board has approved, that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2014, for filing with the SEC.
|
•
|
reviewing our executive compensation programs to ensure that they are adequate to attract, motivate and retain competent executive personnel and that they are directly and materially related to our short-term and long-term objectives and operating performance;
|
•
|
reviewing and approving all aspects of direct and indirect compensation other than retirement and benefits for those of our executive officers who do not also serve as executive officers of Tesoro; and
|
•
|
administering and granting awards to our officers and employees under our long-term incentive plan.
|
Name
|
|
Fees Earned or Paid in Cash (a)
|
|
Fair Value of Service Phantom Unit Awards (b) (c)
|
|
All Other Compensation
|
|
Total
|
||||||||
Raymond J. Bromark
|
|
$
|
112,000
|
|
|
$
|
64,408
|
|
|
$
|
—
|
|
|
$
|
176,408
|
|
James H. Lamanna
|
|
94,000
|
|
|
64,408
|
|
|
—
|
|
|
158,408
|
|
||||
Thomas C. O’Connor
|
|
112,000
|
|
|
64,408
|
|
|
—
|
|
|
176,408
|
|
(a)
|
The amounts shown in this column include the portion of the annual retainer earned in 2014, any individual retainers for serving as the chair of a committee and the Board and committee meeting fees paid in 2014.
|
(b)
|
The amounts shown in this column represent the aggregate grant date fair value of the directors’ portion of the annual retainer paid in service phantom units computed in accordance with accounting principles generally accepted in the United States of America.
|
(c)
|
The table below reflects the total service phantom units outstanding as of the end of the 2014 fiscal year for each non-employee director. No options or other equity-based awards have been granted to the non-employee directors.
|
Name
|
|
Service Phantom Units Outstanding
|
Raymond J. Bromark
|
|
1,108
|
James H. Lamanna
|
|
1,108
|
Thomas C. O’Connor
|
|
1,108
|
•
|
Gregory J. Goff
, Chief Executive Officer and Chairman of the Board;
|
•
|
Steven M. Sterin
, Vice President, Chief Financial Officer and Director;
|
•
|
Phillip M. Anderson
, President and Director; and
|
•
|
Charles S. Parrish
, Vice President, General Counsel, Secretary and Director.
|
•
|
G. Scott Spendlove
, our former Vice President and Chief Financial Officer, whose positions with TLLP and its general partner ended effective August 31, 2014; and
|
•
|
Rick D. Weyen
, former Vice President, Operations, who the Board determined should no longer be designated as an executive officer effective April 23, 2014, but continued to serve as an employee of our general partner and as an officer of certain of our subsidiaries until January 1, 2015.
|
•
|
Executive officers employed by our general partner (Mr. Anderson and Mr. Weyen)
- decisions related to compensation of executive officers of our general partner that are employed by our general partner reside with the board of directors of our general partner but will be based in large part on the recommendation of the compensation committee of the board of directors of Tesoro. Because many of the directors of our general partner are also officers of our general partner or Tesoro, the board of directors of our general partner has delegated these compensation decisions to the Chairman of the Board and the independent directors.
|
•
|
Executive officers employed by Tesoro (Messrs. Goff, Sterin, Parrish and, until August 31, 2014, Mr. Spendlove)
- decisions related to compensation of executive officers of our general partner that are employed by Tesoro reside with the compensation committee of the board of directors of Tesoro. Any determination with respect to awards made under the Tesoro Logistics LP 2011 Long-Term Incentive Plan (the “LTIP”) to executive officers and other employees of Tesoro are delegated to the Chairman of the Board and the independent directors of our general partner; however, such awards may only be made following the recommendation of the compensation committee of the board of directors of Tesoro. Any other compensation decisions for these individuals are not subject to any approvals by the board of directors of our general partner or any committees thereof.
|
•
|
rewarding leaders for delivery of outstanding business results and driving a performance-oriented culture;
|
•
|
promoting and sustaining exceptional performance over time to generate long-term growth in unitholder value; and
|
•
|
leading in accordance with our guiding principles, which are core values, exceptional people, shared purpose, powerful collaboration and superior execution.
|
|
Atlas Pipeline Partners, L.P.
|
|
MPLX, L.P.
|
|
Buckeye Partners, L.P.
|
|
NuStar Energy L.P.
|
|
DCP Midstream Partners, LP
|
|
Phillips 66 Partners, L.P.
|
|
Eagle Rock Energy Partners, L.P.
|
|
PVR Partners, L.P.
|
|
EnLink Midstream Partners LP
(1)
|
|
Spectra Energy Partners, LP
|
|
Genesis Energy, L.P.
|
|
Sunoco Logistics Partners L.P.
|
|
Holly Energy Partners, L.P.
|
|
Targa Resources Partners LP
|
|
Markwest Energy Partners, L.P.
|
|
Western Gas Partners, LP
|
(1)
|
Formerly known as Crosstex Energy, L.P.
|
Compensation
Element
|
Objective
|
Key Features
|
Performance-Based /
At Risk?
|
Base Salary
|
Reflects executive responsibilities, job characteristics, seniority, experience and skill set; designed to be competitive with those of comparable companies with which we compete for talent
|
Reviewed annually and subject to adjustment based on market factors, individual performance, experience and leadership
|
NO
|
Annual Cash
Incentive
|
Rewards executives’ contributions to the achievement of predetermined Tesoro, business unit and individual goals
|
Establishes performance measures to best align performance relative to meeting financial and safety goals ultimately driving unitholder value
|
YES -- Pays out only based on achievement of established measurable goals; does not pay out if established threshold goals are not achieved
|
Performance Phantom Units (Long-Term Equity Awards)
|
Correlates executives’ pay with increases in unitholder value over a three-year period
|
In periods of low unitholder return, executives realize little or no value. In periods of high unitholder return, executives may realize substantial value
|
YES -- Pays out only based on increased unitholder value; may not vest depending upon unitholder return
|
Total ICP Bonus Payout
|
=
|
[
|
Bonus Eligible Earnings
|
x
|
Target Bonus %
|
x
|
% Overall
Performance Achieved*
|
]
|
+/-
|
Individual Performance Adjustment
|
•
|
EBITDA was the most heavily weighted metric and is measured on a margin neutral basis, rather than a reported basis, by excluding fluctuations in commodity prices (and thereby fluctuations in margins) over which management has little influence. Targets for this component are based on Tesoro’s annual business plan.
|
•
|
Controllable cost management is the second most heavily weighted metric of the Tesoro corporate component. Targets are based on Tesoro’s business plan. This metric is measured as total cash costs excluding annual incentive compensation program, stock-based compensation expense, non-controllable expenses for post-retirement employee benefits (pension, medical, life insurance) and insurance (property, casualty and liability), spill prevention costs and environmental accruals and benefits. It includes allocations of refining maintenance and labor to capital projects. Refining energy variable costs and internally produced fuel consumption are market adjusted to budget-assumed prices.
|
•
|
Business Improvement includes capital improvement initiatives (“CII”), synergies related to asset acquisitions and other projects and initiatives.
|
•
|
Personal safety, process safety and environmental safety are critical to Tesoro’s success and reflect its ability to operate its assets in a safe and reliable manner. Because Tesoro believes in continuous improvement, each of the safety metrics is measured by improvement compared to the average incident rate for the prior three year period.
|
Corporate Goals
|
|
Weighting
|
|
% Achieved
|
Margin-neutral EBITDA of $2.07 billion
|
|
50%
|
|
200%
|
Management of costs to no more than $3.138 billion
|
|
17.5
|
|
131
|
Business Improvements (including CII, synergy and other projects and initiatives) of $425 million
|
|
17.5
|
|
200
|
Personal Safety improvement of 16% (measured by improvement in # of incidents over the prior three-year average)
|
|
5
|
|
200
|
Process Safety Management improvement of 35% (measured by improvement in # of incidents over prior three-year average)
|
|
5
|
|
200
|
21 or fewer Environmental Incidents
|
|
5
|
|
200
|
Overall Tesoro Corporate Performance Achieved
|
|
|
|
188%
|
TLLP Goals
|
|
Weighting
|
|
Result / Performance
|
EBITDA of $309 million for 2014 base business
|
|
15%
|
|
$302 million (slightly below target)
|
Management of costs to no more than $7.1 million
|
|
15%
|
|
$5.5 million (better than target)
|
Various Business Improvement Objectives (including improvement in base business EBITDA, execution on asset purchases from Tesoro, identification of third-party assets for acquisition, and growth in unitholder distributions while maintaining coverage ratio)
|
|
60%
|
|
Various, all of which were above target
|
OSHA combined recordable rate of 0.8
|
|
10%
|
|
0.32 (significantly better than target)
|
Overall TLLP Performance Achieved
|
|
195%
|
Name
|
|
Bonus Eligible Earnings
|
|
Target Bonus
|
|
Overall Performance Achieved
|
|
Calculated Bonus Payout
|
|
Individual Performance Adjustments (Increase/ Decrease)
|
|
Total Bonus Payout
|
||||||
Phillip M. Anderson
|
|
$
|
346,794
|
|
|
65%
|
|
195%
|
|
$
|
439,561
|
|
|
10%
|
|
$
|
462,103
|
|
Rick D. Weyen
|
|
297,687
|
|
|
50%
|
|
186%
|
|
276,849
|
|
|
—
|
|
276,849
|
|
Relative Total Unitholder Return
|
|
Payout as a % of Target
|
90th percentile and above
|
|
200%
|
75th percentile
|
|
150%
|
50th percentile
|
|
100%
|
30th percentile
|
|
50%
|
Below 30th percentile
|
|
—
|
Name and Principal Position
|
|
Year
|
|
Salary (a)
|
|
Unit Awards
(b)
|
|
Non-Equity Incentive Plan Compensation (c)
|
|
Change in Pension Value and Non-qualified Compensation Earnings (d)
|
|
All Other Compensation
(e)
|
|
Total
|
||||||||
Gregory J. Goff
Chairman and Chief Executive Officer
|
|
2014
|
|
$ (f)
|
|
|
$
|
1,917,842
|
|
|
$ (f)
|
|
|
$ (f)
|
|
|
$ (f)
|
|
|
$
|
1,917,842
|
|
|
2013
|
|
(f)
|
|
|
1,665,300
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
1,665,300
|
|
|||
|
2012
|
|
(f)
|
|
|
705,420
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
705,420
|
|
|||
Phillip M. Anderson
President
|
|
2014
|
|
349,102
|
|
|
213,154
|
|
|
462,103
|
|
|
361,397
|
|
|
19,074
|
|
|
1,404,830
|
|
||
|
2013
|
|
327,408
|
|
|
213,500
|
|
|
199,914
|
|
|
106,760
|
|
|
13,066
|
|
|
860,648
|
|
|||
|
2012
|
|
309,608
|
|
|
195,950
|
|
|
276,583
|
|
|
286,004
|
|
|
9,256
|
|
|
1,077,401
|
|
|||
Steven M. Sterin
Vice President and Chief Financial Officer
|
|
2014
|
|
(f)
|
|
|
—
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
—
|
|
||
Charles S. Parrish
Vice President, General Counsel and Secretary
|
|
2014
|
|
(f)
|
|
|
213,154
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
213,154
|
|
||
|
2013
|
|
(f)
|
|
|
213,500
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
213,500
|
|
|||
|
2012
|
|
(f)
|
|
|
117,570
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
117,570
|
|
|||
Former Executives
G. Scott Spendlove
Vice President and Chief Financial Officer (g)
|
|
2014
|
|
(f)
|
|
|
213,154
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
213,154
|
|
||
|
2013
|
|
(f)
|
|
|
256,200
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
256,200
|
|
|||
|
2012
|
|
(f)
|
|
|
117,570
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
117,570
|
|
|||
Rick D. Weyen
Vice President, Operations (h)
|
|
2014
|
|
269,281
|
|
|
119,355
|
|
|
249,164
|
|
|
391,875
|
|
|
25,866
|
|
|
1,055,541
|
|
||
|
2013
|
|
202,929
|
|
|
128,100
|
|
|
75,972
|
|
|
127,026
|
|
|
12,763
|
|
|
546,790
|
|
|||
|
2012
|
|
64,222
|
|
|
__
|
|
|
30,736
|
|
|
53,005
|
|
|
2,987
|
|
|
150,950
|
|
(a)
|
The amounts shown in this column reflect the base salary expense that was allocated to us by Tesoro. For Mr. Anderson, this includes 100% of his base salary expense from the date of our initial public offering in April 2011 through December 31, 2014. For Mr. Weyen, this includes 70% of his base salary expense from September 1, 2012 through December 31, 2013 and 90% of his base salary from January 1, 2014 through December 31, 2014.
|
(b)
|
The amounts shown in this column for 2014 reflect the aggregate grant date fair value of performance phantom units granted during the fiscal year, calculated in accordance with U.S. generally accepted accounting principles. The aggregate grant date fair value of such performance phantom units at the highest level of performance, resulting in 200% payout, would be as follows: Mr. Goff - $3,835,684; Mr. Anderson - $426,308; Mr. Parrish - $426,308; Mr. Weyen - $238,710 and Mr. Spendlove - $426,308.
For Messrs. Goff, Parrish and Spendlove, this amount represents 20% of their 2014 and 2013 long-term incentive values as recommended by the Tesoro compensation committee and awarded by the Board of our general partner; this amount was increased from 10% of their total long-term incentive compensation in 2012.
This column does not include grants of performance share awards or market stock units to the executive officers by Tesoro, which are not allocated to us. As a result of his termination of employment effective August 31, 2014, Mr. Spendlove forfeited his 2014 grant of performance phantom units.
|
(c)
|
The amounts shown in this column reflect the compensation expense allocated to us by Tesoro with respect to awards under Tesoro’s ICP. The Partnership’s portion of such expense is 100% for Mr. Anderson. For 2014, the Partnership’s portion of such expense is 90% for Mr. Weyen; for 2013, the Partnership’s portion of such expense is 70% for Mr. Weyen; for 2012, the Partnership’s portion of such expense is 23.3% for Mr. Weyen (reflecting the 70% of Mr. Weyen’s compensation that we were responsible for and the fact that Mr. Weyen was only employed by TLLP for four months of 2012).
|
(d)
|
The amount shown in this column reflects the change in pension value during the fiscal year. The amount shown in the column for Mr. Anderson is 100%. The amount shown in the column for Mr. Weyen in 2014 is 90% and for 2013 is 70%. The amount shown for Mr. Weyen in 2012 reflects 23.3% (reflecting the 70% of Mr. Weyen’s compensation that we were responsible for and the fact that Mr. Weyen was only employed by TLLP for four months of 2012) of the change in his pension value during the fiscal year, although pension expense was allocated to us by Tesoro on an estimated aggregate basis for all TLGP employees and was not allocated on an individual basis.
|
(e)
|
The amounts shown in this column for 2014 reflect the matching dollar-for-dollar contributions up to 6% of eligible earnings that Tesoro provides for all employees who participate in the Tesoro Thrift Plan. In addition, Tesoro provides a profit-sharing contribution to the Thrift Plan. This discretionary contribution, calculated as a percentage of employee’s base pay based on a pre-determined target for the calendar year, can range from 0% to 4% based on actual performance. Also included for Mr. Weyen is the company match contribution for the Executive Deferred Compensation Plan which matches the participant’s base salary contributions dollar for dollar up to 4% of eligible earnings above the IRS salary limitations. The Partnership’s portion of Tesoro Thrift Plan Company Contributions, the Executive Deferred Compensation Plan Company Contributions and the Thrift Sharing Plan Contribution is 100% for Mr. Anderson. For Mr. Weyen, the Partnership’s portion of Tesoro Thrift Plan Company Contributions, the Executive Deferred Compensation Plan Company Contributions and the Thrift Profits Sharing Plan Contribution is 90% for 2014, 70% for 2013 and 23.3% for 2012 (reflecting the 70% of Mr. Weyen’s compensation that we were responsible for and the fact that Mr. Weyen was only employed by TLLP for four months of 2012). No NEO received perquisites and other personal benefits with respect to 2014 with an aggregate value greater than $10,000 and no NEO received any other item of compensation with respect to 2014 required to be disclosed in this column with a value of $10,000 or more.
|
(f)
|
As noted above, no compensation has been reported for Messrs. Goff, Sterin, Parrish and Spendlove because, other than grants of performance phantom units, none of their compensation is allocated to us. The $6 million annual administrative fee under the Amended Omnibus Agreement covers a variety of services provided to TLLP by Tesoro and no portion is specifically allocated to services provided by these individuals to TLLP.
|
(g)
|
Mr. Spendlove terminated employment effective August 31, 2014.
|
Name
|
|
Award Type
|
|
Grant Date
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
(a)
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
(b)
|
|
All Other Unit Awards: Number of Units
|
|
Grant date fair value of unit awards (c)
|
||||||||||||||||||||
|
Threshold
|
|
Target
|
|
Maxi-mum
|
|
Threshold
|
|
Target
|
|
Maxi-
mum
|
|
||||||||||||||||||||
Gregory J. Goff
|
|
Phantom Units
|
|
2/7/2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
14,108
|
|
|
28,216
|
|
|
56,432
|
|
|
—
|
|
|
$
|
1,917,842
|
|
Phillip M. Anderson
|
|
Annual Incentive
|
|
n/a
|
|
112,708
|
|
|
225,416
|
|
|
450,832
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
Phantom Units
|
|
2/7/2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,568
|
|
|
3,136
|
|
|
6,272
|
|
|
—
|
|
|
213,154
|
|
|||||
Steven M. Sterin
|
|
Phantom Units
|
|
n/a
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Charles S. Parrish
|
|
Phantom Units
|
|
2/7/2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,568
|
|
|
3,136
|
|
|
6,272
|
|
|
—
|
|
|
213,154
|
|
||||
Former Executives G. Scott Spendlove (d)
|
|
Phantom Units
|
|
2/7/2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,568
|
|
|
3,136
|
|
|
6,272
|
|
|
—
|
|
|
213,154
|
|
||||
Rick D. Weyen
|
|
Annual Incentive
|
|
n/a
|
|
66,980
|
|
|
133,959
|
|
|
267,918
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
Phantom Units
|
|
2/7/2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
878
|
|
|
1,756
|
|
|
3,512
|
|
|
—
|
|
|
119,355
|
|
(a)
|
These columns show the range of awards under the ICP for which we would be allocated responsibility, which is described in the section “Annual Performance Incentives” in the Compensation Discussion and Analysis. The “threshold” column represents the minimum payout for the performance metrics under the ICP assuming that the minimum level of performance is attained. The “target” column represents the amount payable if the performance metrics are reached. The “maximum” column represents the maximum payout for the performance metrics under the ICP assuming that the maximum level of performance is attained. The general partnership’s portion of Tesoro’s 2014 ICP reflected is 100% for Mr. Anderson and 90% for Mr. Weyen. We are not responsible for any portion of the other NEOs’ 2014 ICP.
|
(b)
|
The amounts shown in these columns represent the number of performance phantom units granted during 2014 under the LTIP as described in the section “Long-Term Incentives” in the CD&A. This performance phantom unit award is contingent on our achievement of relative total unitholder return at the end of the performance period from January 1, 2014 through December 31, 2016. Actual payouts will vary based on relative total unitholder return from none of the units vesting to a threshold vesting of 50% of the units to a maximum vesting of 200% of the units.
|
(c)
|
The amounts shown in this column represent the grant date fair value of the awards computed in accordance with financial accounting standards.
|
(d)
|
As a result of his termination of employment, Mr. Spendlove forfeited this performance phantom unit award.
|
|
|
Equity Awards
|
|
|||||||||||||||
Name
|
|
Grant Date
|
|
Number of Units That Have Not Vested
|
|
Market Value of Units That Have Not Vested
|
|
Equity Incentive Plan Awards: Number of Unearned Units, Units or Other Rights That Have Not Vested
(a) (b)
|
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Units, Units or Other Rights That Have Not Vested
(a) (b)
|
|
||||||
Gregory J. Goff
|
|
2/7/2014
|
|
—
|
|
|
$
|
—
|
|
|
28,216
|
|
|
|
$
|
1,712,641
|
|
|
|
2/8/2013
|
|
|
|
|
|
39,000
|
|
|
|
2,449,493
|
|
|
|||||
Phillip M. Anderson
|
|
2/7/2014
|
|
|
|
|
|
3,136
|
|
|
|
190,347
|
|
|
||||
|
2/8/2013
|
|
|
|
|
|
5,000
|
|
|
|
314,038
|
|
|
|||||
Steven M. Sterin
|
|
n/a
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
||
Charles S. Parrish
|
|
2/7/2014
|
|
|
|
|
|
3,136
|
|
|
|
190,347
|
|
|
||||
|
2/8/2013
|
|
|
|
|
|
5,000
|
|
|
|
314,038
|
|
|
|||||
Former Executives G. Scott Spendlove
|
|
2/8/2013
|
|
|
|
|
|
3,333
|
|
|
|
209,337
|
|
|
||||
Rick D. Weyen
|
|
2/7/2014
|
|
|
|
|
|
1,756
|
|
|
|
106,585
|
|
|
||||
|
2/8/2013
|
|
|
|
|
|
3,000
|
|
|
|
188,423
|
|
|
(a)
|
These awards represent performance phantom units, which provide the right to receive a number of common units at the end of the performance period depending upon our achievement of relative total unitholder return against a defined performance peer group. The closing price of our common units on December 31, 2014 of $58.85, as reported on the NYSE, was used to calculate the market value of the unvested unit awards.
|
(b)
|
These awards represent TLLP performance phantom units, which are the right to receive a number of common units at the end of the performance period depending on our achievement of relative total unitholder return against a defined performance peer group. Each award will vest at the end of the relevant performance period, subject to performance. For each award, the number of unvested units and the payout values shown assume a payout at target; for all such awards, the payout value also includes any outstanding distribution equivalent rights that will be paid to the executive once both the award has vested and the payout results have been certified by the TLGP Board of Directors. The performance period for each award, as well as the amount of outstanding distribution equivalent rights included in the payout value is shown for each of the executives below:
|
|
Dividend Equivalent Rights Accrued as of 12/31/2014 ($)
|
|||
Name
|
TLPP Performance Phantom Units Granted February 2014
(Performance Period of 1/1/2014-12/31/2016)
|
TLPP Performance Phantom Units Granted February 2013
(Performance Period of 1/1/2013-12/31/2015)
|
||
Goff
|
52,129
|
|
154,343
|
|
Anderson
|
5,794
|
|
19,788
|
|
Sterin
|
—
|
|
—
|
|
Parrish
|
5,794
|
|
19,788
|
|
Spendlove
|
*
|
|
13,190
|
|
Weyen
|
3,244
|
|
11,873
|
|
*
|
Mr. Spendlove forfeited this award and the related distribution equivalent rights upon termination of his employment.
|
|
|
Unit Awards
|
|||||
Name
|
|
Number of Units Acquired on Vesting (a)
|
|
Value Realized on Vesting (b)
|
|||
Gregory J. Goff
|
|
26,181
|
|
|
$
|
1,579,565
|
|
Phillip M. Anderson
|
|
8,507
|
|
|
530,265
|
|
|
Steven M. Sterin
|
|
—
|
|
|
—
|
|
|
Charles S. Parrish
|
|
4,364
|
|
|
263,291
|
|
|
Former Executives
G. Scott Spendlove
|
|
3,880
|
|
|
234,090
|
|
|
Rick D. Weyen
|
|
—
|
|
|
—
|
|
(a)
|
Reflects the vesting of one-third of the service phantom units granted to Mr. Anderson in May 2011 along with the payout of the performance phantom units that were granted in February 2012 for Messrs. Goff, Anderson, Spendlove and Parrish.
|
(b)
|
The value realized for the service phantom units was calculated using the closing price of our common units on May 16, 2014, the vesting date, multiplied by the number of units that vested. This amount also includes the value of tandem distribution equivalent rights to receive an amount equal to all or a portion of the cash distributions made on the vested units during the vesting period. Of the amounts realized, the amounts paid in distribution equivalent rights to Mr. Anderson upon vesting were $6,629. The value realized on the payout of the performance phantom units was calculated based on the number of units granted multiplied by the performance payout factor approved by our general partner’s Board of Directors on January 22, 2014 and then multiplied by the closing price of the common units on that date. Of the amounts realized for the performance phantom units payout, the amounts paid in distribution equivalent rights to the NEOs were: Mr. Goff, $148,512; Mr. Anderson, $41,256; Mr. Parrish, $24,755; and Mr. Spendlove, $22,009.
|
Name
|
|
Plan Name
|
|
Years of Credited Service (a)
|
|
Present Value of Accumulated Benefit (b)
|
|
Payments during last fiscal year
|
||
Gregory J. Goff
|
|
— (c)
|
|
— (c)
|
|
|
$ — (c)
|
|
|
$ — (c)
|
Phillip M. Anderson
|
|
Tesoro Corporation Retirement Plan
|
|
12
|
|
|
502,383
|
|
|
—
|
|
Restoration Retirement Plan
|
|
12
|
|
|
677,126
|
|
|
—
|
|
Steven M. Sterin
|
|
— (c)
|
|
— (c)
|
|
|
— (c)
|
|
|
— (c)
|
Charles S. Parrish
|
|
— (c)
|
|
— (c)
|
|
|
— (c)
|
|
|
— (c)
|
Former Executives G. Scott Spendlove
|
|
— (c)
|
|
— (c)
|
|
|
— (c)
|
|
|
— (c)
|
Rick D. Weyen
|
|
Tesoro Corporation Retirement Plan
|
|
30
|
|
|
683,632
|
|
|
—
|
|
Restoration Retirement Plan
|
|
30
|
|
|
1,225,224
|
|
|
—
|
(a)
|
Due to a freeze of credited service as of December 31, 2010, credited service values for the Tesoro Corporation Retirement Plan are less than actual service values. Credited service is used to calculate the Final Average Pay portion of the Retirement Plan benefit. The Cash Balance portion of the retirement benefit that went into effect on January 1, 2011 does not utilize credited service.
|
(b)
|
The present values of the accumulated plan benefits are equal to the value of the retirement benefits at the earliest unreduced age for each plan using the assumptions used as of December 31, 2014 for financial reporting purposes. These assumptions include a discount rate of 4.05%, a cash balance interest crediting rate of 3.05%, the use of the RP-2014 Mortality Table with generational mortality improvements in accordance with Scale MP-2014 and for the Tesoro Corporation Retirement Plan, that each employee will elect a lump sum payment at retirement using an interest rate of 4.05% and the PPA 2015 Mortality Table. The Partnership reimburses Tesoro for the pension expense that is allocated to us for employees of our general partner. During 2014, the portion of each NEO’s pension expense was allocated to us based on their service to us as follows: 100% for Mr. Anderson and 90% for Mr. Weyen. However, the amounts reflected in the above table represent the full present value of the accumulated benefit for Mr. Weyen.
|
(c)
|
No portion of the compensation expense for retirement benefits to Messrs. Goff, Sterin, Parrish and Spendlove is allocated to us. The $6 million annual administrative fee under the Amended Omnibus Agreement covers a variety of services provided to TLLP by Tesoro and no portion is specifically allocated to services provided by these individuals to TLLP.
|
Name
|
|
Executive Contributions in Last Fiscal Year (a)
|
|
Registrant Contributions in Last Fiscal Year (b)
|
|
Aggregate Earnings in Last Fiscal Year
(c)
|
|
Aggregate Withdrawals/Distributions
|
|
Aggregate Balance at Last Fiscal Year-End
|
||||||||||
Gregory J. Goff
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Phillip M. Anderson
|
|
—
|
|
|
2,170
|
|
|
—
|
|
|
—
|
|
|
2,886
|
|
|||||
Steven M. Sterin
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Charles S. Parrish
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Former Executives
G. Scott Spendlove
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Rick D. Weyen
|
|
11,908
|
|
|
6,791
|
|
|
3,472
|
|
|
—
|
|
|
71,700
|
|
(a)
|
The amounts shown include amounts reflected in the base salary column of the Summary Compensation Table for Mr. Weyen.
|
(b)
|
The amounts shown include amounts reflected in the All Other Compensation column of the Summary Compensation Table for Messrs. Anderson and Weyen.
|
(c)
|
The amounts shown reflect the change in the market value pertaining to the investment funds in which the NEOs have chosen to invest their contributions and the company’s contribution under the Tesoro Corporation Executive Deferred Compensation Plan.
|
Name
|
Scenario
|
Severance ($)
|
Accelerated Equity Vesting ($)
|
Retirement Benefits ($)
|
Health Benefits ($)
|
Total ($)
|
|||||
Goff
|
w/o Cause or w/Good Reason
|
—
|
|
513,792
|
|
—
|
|
—
|
|
513,792
|
|
Term. after Change-in-Control
|
—
|
|
4,162,133
|
|
—
|
|
—
|
|
4,162,133
|
|
|
Retirement or Voluntary Term.
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
—
|
|
4,162,133
|
|
—
|
|
—
|
|
4,162,133
|
|
|
Disability
|
—
|
|
4,162,133
|
|
—
|
|
—
|
|
4,162,133
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Anderson
|
w/o Cause or w/Good Reason
|
—
|
|
57,104
|
|
|
|
57,104
|
|
||
Term. after Change-in-Control
|
1,617,103
|
|
504,385
|
|
173,574
|
|
44,540
|
|
2,339,602
|
|
|
Retirement or Voluntary Term.
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
—
|
|
504,385
|
|
—
|
|
—
|
|
504,385
|
|
|
Disability
|
—
|
|
504,385
|
|
—
|
|
—
|
|
504,385
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Sterin
|
w/o Cause or w/Good Reason
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Term. after Change-in-Control
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Retirement or Voluntary Term.
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Disability
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Parrish
|
w/o Cause or w/Good Reason
|
—
|
|
57,104
|
|
—
|
|
—
|
|
57,104
|
|
Term. after Change-in-Control
|
—
|
|
504,385
|
|
—
|
|
—
|
|
504,385
|
|
|
Retirement or Voluntary Term.
|
—
|
|
57,104
|
|
—
|
|
—
|
|
57,104
|
|
|
Death
|
—
|
|
504,385
|
|
—
|
|
—
|
|
504,385
|
|
|
Disability
|
—
|
|
504,385
|
|
—
|
|
—
|
|
504,385
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Weyen
|
w/o Cause or w/Good Reason
|
—
|
|
31,975
|
|
—
|
|
—
|
|
31,975
|
|
Term. after Change-in-Control
|
1,056,194
|
|
295,007
|
|
157,790
|
|
39,948
|
|
1,548,939
|
|
|
Retirement or Voluntary Term.
|
249,164
|
|
31,975
|
|
—
|
|
—
|
|
281,139
|
|
|
Death
|
—
|
|
295,007
|
|
—
|
|
—
|
|
295,007
|
|
|
Disability
|
—
|
|
295,007
|
|
—
|
|
—
|
|
295,007
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
•
|
Accrued Benefits
. Messrs. Anderson and Weyen would be entitled to the following accrued benefits: any accrued but unpaid base salary to the date of termination; any accrued but unpaid expenses; any unused vacation pay; any unpaid bonuses for a prior period to which they are entitled per the incentive compensation program; and any other benefits to which they are entitled. The Partnership’s portion of these benefits will be 100% for Mr. Anderson and 90% for Mr. Weyen.
|
•
|
Severance
.
|
◦
|
Termination With a Change-in-Control
. Pursuant to their management stability agreements for Messrs. Anderson and Weyen, in the event of a termination by Tesoro without cause or by the NEO with good reason within two years following a change-in-control of Tesoro Corporation (which would result in a change-in-control of our general partner and the Partnership), Messrs. Anderson and Weyen will receive a multiple of two times of their base salary and target annual bonus as well as a pro-rated bonus for the year of termination. Their severance amount (excluding the pro-rated bonus, as applicable) will be paid in a lump sum after their termination. The Partnership’s portion of the severance, as reflected in the table, is 100% for Mr. Anderson and 90% for Mr. Weyen. These benefits would not be payable in the case of a change-in-control of the Partnership that did not also constitute a change-on-control of Tesoro Corporation.
|
◦
|
Retirement or Voluntary Termination
.
Pursuant to the terms of Tesoro’s annual incentive program, upon retirement for any reason on or after June 30 of the applicable year, Mr. Weyen will receive a pro-rated bonus for the year of termination since he is retirement eligible. The Partnership’s portion of such incentive compensation payments, as reflected in the table, is 90%. Mr. Anderson will not receive a pro-rated bonus since he is not retirement eligible.
|
•
|
Accelerated Equity Vesting
.
|
◦
|
Involuntary Termination Without Cause.
Pursuant to the award agreements, Messrs. Goff, Anderson, Parrish and Weyen worked a minimum of twelve months during the performance period, as applicable, they will receive a pro-rated payout of their TLLP performance phantom units based on actual performance at the end of the performance period and will be paid the accumulated distribution equivalent rights on those units.
|
◦
|
Termination With a Change-in-Control
. Pursuant to the award agreements, each NEO will be 100% vested in all equity awards. Messrs. Goff, Anderson, Parrish and Weyen will vest in their performance phantom units at target and will be paid the accumulated distribution equivalent rights accumulated on those units.
|
◦
|
Retirement or Voluntary Termination
. Pursuant to the award agreements, since Messrs. Parrish and Weyen are retirement eligible, they will receive a pro-rated award of their performance phantom units based on the actual performance at that the end of the performance period along with the accumulated distribution equivalent rights. Messrs. Goff and Anderson will forfeit all unvested performance phantom awards, along with the accumulated distribution rights, since they are not retirement eligible.
|
•
|
Retirement Benefits
.
|
◦
|
Termination With a Change-in-Control.
Pursuant to their management stability agreements, Messrs. Anderson and Weyen will receive two additional service credits under the current non-qualified supplemental pension plans. The Partnership’s portion, as reflected in the table, is 100% for Mr. Anderson and 90% for Mr. Weyen. These benefits would not be payable in the case of a change-in-control of the Partnership that did not also constitute a change-in-control of Tesoro Corporation.
|
•
|
Health Coverage
.
|
◦
|
Termination With a Change-in-Control
.
Pursuant to their management stability agreements, Messrs. Anderson and Weyen will receive health and welfare coverage for two years. The Partnership’s portion, as reflected in the table, is 100% for Mr. Anderson and 90% for Mr. Weyen. These benefits would not be payable in the case of a change-in-control of the Partnership that did not also constitute a change-in-control of Tesoro Corporation.
|
•
|
An appropriate pay philosophy and market comparisons support business objectives.
|
•
|
Programs appropriately balance fixed compensation with short-term and long-term variable compensation such that no single pay element would motivate employees to engage in excessive risk taking.
|
•
|
The characteristics of our annual incentive program design do not lend themselves to excessive risk taking because we base annual incentive awards on:
|
◦
|
corporate, business unit and individual performance goals, with a variety of pre-established performance conditions in each category, thus diversifying the risk associated with any single indicator of performance; and
|
◦
|
financial and non-financial performance targets that are objectively determined by measurable and certifiable results.
|
•
|
Our long-term incentive program encourages employees to focus on our long-term success by providing performance phantom units that only reward employees if we meet specified performance goals. These awards also incorporate pre-established caps to prevent over-payment.
|
•
|
The ownership shown below includes common units underlying phantom units held by our directors and executive officers that vest within 60 days of
February 18, 2015
.
|
•
|
Unless otherwise indicated, each person or member of the group listed has sole voting and investment power with respect to the common units listed.
|
•
|
As of
February 18, 2015
, there were
80,155,850
common units outstanding (including
28,181,748
common units held by Tesoro Corporation and its affiliates). This table does not include (1) the
1,631,448
general partner units held by Tesoro Logistics GP, LLC
|
•
|
None of our executive officers or directors hold general partner units.
|
•
|
No director, NEO or executive officer beneficially owns more than 1% of our common units. Furthermore, the current directors and executive officers as a group do not own more than 1% of our common units.
|
|
|
Aggregate Number of Units Beneficially Owned
|
|
Additional Information
|
|
|
Gregory J. Goff
|
|
53,526
|
|
|
|
|
Phillip M. Anderson
|
|
21,471
|
|
|
|
|
Raymond J. Bromark
|
|
9,190
|
|
|
Includes 1,108 units underlying phantom units
|
|
Keith M. Casey
|
|
—
|
|
|
|
|
James H. Lamanna
|
|
8,328
|
|
|
Includes 1,108 units underlying phantom units
|
|
Thomas C. O’Connor
|
|
13,955
|
|
|
Includes 1,108 units underlying phantom units
|
|
Charles S. Parrish
|
|
8,913
|
|
|
|
|
Steven M. Sterin
|
|
—
|
|
|
|
|
Former Executives
|
|
|
|
|
|
|
G. Scott Spendlove
|
|
8,499
|
|
|
Mr. Spendlove ceased to be affiliated with Tesoro, TLLP or our general partner effective August 31, 2014. His beneficial ownership is as of such date (being the date of his last known unit balance) plus any net shares paid in settlement of equity awards since such date.
|
|
Rick D. Weyen
|
|
4,000
|
|
|
|
|
All Current Directors and Executive Officers as a Group
(11 individuals)
|
|
119,860
|
|
|
Does not include shares beneficially owned by Messrs. Spendlove or Weyen, who were no longer executive officers as of February 18, 2015.
|
|
|
|
Aggregate Number of Shares Beneficially Owned
|
|
Additional Information
|
|
Gregory J. Goff
|
|
673,927
|
|
|
Includes 151,513 shares underlying stock options and 582 shares credited under the Tesoro Corporation Thrift Plan
|
Phillip M. Anderson
|
|
7,500
|
|
|
Includes 1,666 shares credited under the Tesoro Corporation Thrift Plan
|
Raymond J. Bromark
|
|
—
|
|
|
|
Keith M. Casey
|
|
8,891
|
|
|
Includes 5,150 shares of restricted stock that remain subject to vesting requirements
|
James H. Lamanna
|
|
—
|
|
|
|
Thomas C. O’Connor
|
|
—
|
|
|
|
Charles S. Parrish
|
|
188,264
|
|
|
Includes 79,800 shares underlying stock options
|
Steven M. Sterin
|
|
6,253
|
|
|
Restricted stock that remains subject to vesting requirements
|
Former Executives
|
|
|
|
|
|
G. Scott Spendlove
|
|
89,632
|
|
|
Mr. Spendlove ceased to be employed by Tesoro or affiliated with TLLP and its general partner effective August 31, 2014. His beneficial ownership is as of such date (being the date of his last known stock balance) plus any net shares paid in connection with the vesting of equity awards and 8,160 shares credited under the Tesoro Corporation Thrift Plan.
|
Rick D. Weyen
|
|
31,243
|
|
|
Includes 21,900 shares underlying stock options and 2,904 shares credited under the Tesoro Corporation Thrift Plan
|
All Current Directors and Executive Officers as a Group (11 individuals)
|
|
940,758
|
|
|
Does not include shares beneficially owned by Messrs. Spendlove or Weyen, who were no longer executive officers as of February 18, 2015. Includes 961 shares held in the retirement account of an executive officer’s spouse.
|
|
|
Aggregate Number of Shares Beneficially Owned
|
|
Additional Information
|
|
Gregory J. Goff
|
|
—
|
|
|
|
Phillip M. Anderson
|
|
—
|
|
|
|
Raymond J. Bromark
|
|
—
|
|
|
|
Keith M. Casey
|
|
—
|
|
|
|
James H. Lamanna
|
|
—
|
|
|
|
Thomas C. O’Connor
|
|
—
|
|
|
|
Charles S. Parrish
|
|
—
|
|
|
|
Steven M. Sterin
|
|
—
|
|
|
|
Former Executives
|
|
|
|
|
|
G. Scott Spendlove
|
|
—
|
|
|
|
Rick D. Weyen
|
|
—
|
|
|
|
All Current Directors and Executive Officers as a Group (11 individuals)
|
|
1,600
|
|
|
Does not include units that may be beneficially owned by Mr. Spendlove, who ceased to be employed by Tesoro effective August 31, 2014. Shares reported are indirectly held by an executive officer’s child.
|
|
|
Amount and Nature of
Beneficial Ownership
|
|||||||||||
Name and Address of Beneficial Owner
|
|
Number of Common Units
|
|
Percent of Common Units (a)
|
|
Number of General Partner Units
|
|
Percent of General Partner Units (a)
|
|
Percent
of
Total Units (a)
|
|||
Tesoro Corporation (b)
19100 Ridgewood Parkway
San Antonio, Texas 78259
|
|
28,181,748
|
|
|
35.2%
|
|
1,631,448
|
|
|
100
|
%
|
|
36.5%
|
Tortoise Capital Advisors, LLC (c)
11550 Ash Street, Suite 300
Leawood, Kansas 66211
|
|
8,671,400
|
|
|
10.8%
|
|
—
|
|
—
|
|
10.6%
|
||
OppenheimerFunds, Inc. (d)
Two World Financial Center
225 Liberty Street
New York, NY 10281
|
|
4,789,061
|
|
|
6.0%
|
|
—
|
|
—
|
|
5.9%
|
(a)
|
As of
December 31, 2014
, there were
80,125,930
common units and
1,631,448
general partner units outstanding, for an aggregate of
81,757,378
units.
|
(b)
|
As of both
December 31, 2014
and
February 18, 2015
, Tesoro Corporation directly held 15,620,925 common units; limited partner units were also held by affiliates of Tesoro Corporation, as follows: Tesoro Refining & Marketing Company LLC directly held 8,067,981 common units, Tesoro Alaska Company LLC directly held 571,065 common units and Tesoro Logistics GP, LLC directly held 3,921,777 common units and
1,631,448
general partner units. Tesoro Corporation is the ultimate parent company of each such entity and may, therefore, be deemed to beneficially own the units held by each such entity. Tesoro Corporation files information with, or furnishes information to, the Securities and Exchange Commission pursuant to the information requirements of the Securities Exchange Act of 1934, as amended.
|
(c)
|
According to Amendment No. 5 to a Schedule 13G filed with the SEC on February 10, 2015, Tortoise Capital Advisors has sole voting power with regard to 39 of our common units, shared voting power with regard to 7,952,335 of our common units, sole investment power with respect to 39 of our common units and shared investment power with regard to 8,671,361 of our common units.
|
(d)
|
According to Amendment No. 1 to a Schedule 13G filed with the SEC on February 10, 2015, OppenheimerFunds, Inc. has shared voting and investment power with regard to 4,789,061 of our common units.
|
Plan Category
|
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)
|
|
Weighted-Average Exercise Price of Outstanding Options, Warrants And Rights (b)
|
|
Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in the First Column) (c)
|
||
Equity Compensation plans approved by security holders
|
|
—
|
|
|
|
|
—
|
|
Equity compensation plans not approved by security holders (d)
|
|
322,792
|
|
|
|
|
337,342
|
|
Total
|
|
322,792
|
|
|
|
|
337,342
|
|
(a)
|
The amounts in column (a) of this table reflect only phantom units that have been granted under the Tesoro Logistics LP 2011 Long-Term Incentive Plan (the “LTIP”). No unit options have been granted. Each phantom unit shown in the table represents a right to receive (upon vesting and payout) a specified number of our common units. Vesting and payout may be conditioned upon achievement of pre-determined performance objectives (typically total unitholder return over a defined period) or conditioned only upon continued service with us and our affiliates. For illustrative purposes, the maximum payment (i.e., a 200% ratio) provided by the provisions of the award agreements has been assumed for vesting and payout of performance-related grants. Payment at target levels (i.e., a 100% ratio) would result in
201,548
units to be issued and
458,586
units remaining available for future issuance.
|
(b)
|
No value is shown in column (b) of the table, since the phantom units do not have an exercise, or strike, price.
|
(c)
|
For illustrative purposes, a maximum payment (i.e., a 200% ratio) has been assumed for vesting and payout of outstanding performance-related grants.
|
(d)
|
The LTIP was adopted by the Tesoro Logistics GP, LLC Board of Directors in connection with the closing of our initial public offering in April 2011 and provides for awards of options, restricted units, phantom units, distribution equivalent rights, substitute awards, unit appreciation rights and unit awards to be available for employees, consultants and directors of the general partner and any of their affiliates who perform services for Tesoro Logistics LP.
|
•
|
payment of compensation by us to a related person for the related person’s service in the capacity or capacities that give rise to the person’s status as a related person;
|
•
|
transactions available to all employees or all unitholders on the same terms;
|
•
|
purchases from us in the ordinary course of business at the same price and on the same terms as offered to our other customers, regardless of whether the transactions are required to be reported in our filings with the SEC; and
|
•
|
transactions, which when aggregated with the amount of all other transactions between the related person and us, involve less than $120,000 in a fiscal year.
|
•
|
High Plains Pipeline gathering and trucking ($105 million) - a pipeline transportation services agreement for gathering and transporting crude oil on our High Plains System, as well as a crude oil trucking transportation services agreement for trucking related services and storage at the Bakken Area Storage Hub
|
•
|
Terminalling Use, Services and Throughput ($276 million) - agreements for berth access, terminal use and services, storage and throughput at TLLP’s marine terminals, storage and marketing terminals and similar facilities, including the Martinez Terminaling Agreement, the Nikiski Terminaling Agreement and the Anacortes Terminaling Agreement for terminalling and storage services at the terminals acquired in the West Coast Logistics Assets Acquisition; and the Anacortes Storage Service Agreement for storage services with respect to the tanks at the Anacortes facility acquired in the West Coast Logistics Assets acquisition;
|
•
|
Pipeline Transportation Services ($61 million) - pipeline transportation services agreements for transporting crude oil, refined products and other commodities on our short-haul pipeline systems in Salt Lake City and Los Angeles, a pipeline system in Los Angeles, and a regulated common carrier refined products pipeline system connecting Tesoro’s Kenai refinery to Anchorage, included in the West Coast Logistics Assets acquisition.
|
•
|
Anacortes Rail Facility ($25 million) - a track use and throughput agreement in which Tesoro pays us fees for transporting and offloading crude oil through our Anacortes, Washington rail unloading facility.
|
•
|
Carson Coke Lease and Handling ($4 million) - agreements for TRMC to lease the land on which the petroleum coke handling and storage facility resides and for us to provide operational services related to the operation of such facility.
|
•
|
Keep-whole Commodity Agreement ($7 million) - agreement between QEPFS LLC and certain of its subsidiaries, (collectively, the “Processors”) and Tesoro. Effective
December 2, 2014
, following the completion of the Rockies Natural Gas Business Acquisition, we began processing gas for certain producers under “keep-whole” processing agreements. Under a keep-whole agreement, a producer transfers title to the natural gas liquids (“NGLs”) produced during gas processing, and the processor, in exchange, delivers to the producer natural gas with a BTU content equivalent to the NGLs removed. The operating margin for these contracts is determined by the spread between NGL sales prices and the price paid to purchase the replacement natural gas (“Shrink Gas”). TLLP entered into a
five
-year agreement with Tesoro, which transfers the commodity risk exposure associated with these keep-whole processing agreements from TLLP to Tesoro (the “Keep-Whole Commodity Agreement”). Under the Keep-Whole Commodity Agreement with Tesoro, Tesoro pays TLLP a processing fee for NGLs related to keep-whole agreements and delivers Shrink Gas to the producers on behalf of TLLP. TLLP pays Tesoro a marketing fee in exchange for assuming the commodity risk. Terms and pricing under this agreement are revised each year.
|
•
|
our obligation to pay Tesoro an annual corporate services fee, currently in the amount of
$6 million
, for the provision by Tesoro and its subsidiaries of certain centralized corporate services, as well as our obligation to reimburse Tesoro for all other direct or allocated costs and expenses incurred by Tesoro or its affiliates on our behalf;
|
•
|
an agreement from TRMC and Tesoro Alaska Company LLC (“Tesoro Alaska”) not to compete with us under certain circumstances;
|
•
|
our right of first offer to acquire certain logistics assets from Tesoro, TRMC and Tesoro Alaska;
|
•
|
the indemnification obligations of the parties for certain claims, losses and expenses attributable to certain environmental, title, tax and other liabilities relating to assets contributed by Tesoro and its subsidiaries to us; and
|
•
|
the granting of a license from Tesoro to us with respect to use of the Tesoro name and trademark.
|
|
2014
|
|
2013
|
||||
Audit Fees (a)
|
$
|
1,765
|
|
|
$
|
908
|
|
Audit-Related Fees (b)
|
—
|
|
|
110
|
|
||
Tax Fees
|
—
|
|
|
—
|
|
||
All Other Fees
|
—
|
|
|
—
|
|
||
Total
|
$
|
1,765
|
|
|
$
|
1,018
|
|
(a)
|
Audit Fees represent the aggregate fees for professional services rendered by EY in connection with its audits of our combined consolidated financial statements, including the audits of internal control over financial reporting, reviews of the combined consolidated financial statements included in our Quarterly Reports on Form 10-Q and services that were provided in connection with registration statements, comfort letters and accounting consultations.
|
(b)
|
Fees for audit-related services related to the audit of acquired businesses required for SEC Regulation S-X 3-05 purposes.
|
|
Page
|
Report of Independent Registered Public Accounting Firm (Ernst & Young LLP)
|
|
Combined Consolidated Statements of Operations - Years Ended December 31, 2014, 2013 and 2012
|
|
Consolidated Balance Sheets - December 31, 2014 and 2013
|
|
Combined Consolidated Statements of Partners’ Equity - Years Ended December 31, 2014, 2013 and 2012
|
|
Combined Consolidated Statements of Cash Flows - Years Ended December 31, 2014, 2013 and 2012
|
|
Notes to Combined Consolidated Financial Statements
|
Exhibit Number
|
|
Description of Exhibit
|
2.1
|
|
Contribution, Conveyance and Assumption Agreement, dated as of April 26, 2011, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Corporation, Tesoro Alaska Company, Tesoro Refining and Marketing Company and Tesoro High Plains Pipeline Company LLC (incorporated by reference herein to Exhibit 10.2 to the Partnership’s Current Report on Form 8-K filed on April 29, 2011, File No. 1-35143).
|
|
|
|
2.2
|
|
Contribution, Conveyance and Assumption Agreement, effective April 1, 2012, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Corporation and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on April 3, 2012, File No. 1-35143).
|
|
|
|
2.3
|
|
Contribution Conveyance and Assumption Agreement, effective September 14, 2012, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Corporation and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on September 17, 2012, File No. 1-35143).
|
|
|
|
2.4
|
|
Contribution, Conveyance and Assumption Agreement, dated as of November 15, 2012, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Corporation and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on November 15, 2012, File No. 1-35143).
|
|
|
|
2.5
|
|
Contribution, Conveyance and Assumption Agreement, dated as of May 17, 2013, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Corporation and Tesoro Refining & Marketing Company LLC (incorporated by reference herein to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed on May 17, 2013, File No. 1-35143).
|
|
|
|
2.6
|
|
Contribution, Conveyance and Assumption Agreement, dated as of November 18, 2013, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Corporation, Tesoro Refining & Marketing Company LLC and Carson Cogeneration Company (incorporated by reference herein to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed on November 18, 2013, File No. 1-35143).
|
|
|
|
2.7
|
|
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, File No. 1-35143).
|
|
|
|
2.8
|
|
Amendment No. 1 to the Tranche 1 Contribution Agreement, dated as of December 6, 2013, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Logistics LP, Tesoro Logistics GP, LLC and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
|
|
|
|
Exhibit Number
|
|
Description of Exhibit
|
2.9
|
|
Asset Sale and Purchase Agreement by and between Tesoro Logistics Operations LLC and Northwest Terminalling Company dated as of December 6, 2012 (incorporated by reference herein to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed on December 11, 2012, File No. 1-35143).
|
|
|
|
2.10
|
|
Asset Sale and Purchase Agreement by and between Tesoro Logistics Northwest Pipeline LLC and Chevron Pipe Line Company dated as of December 6, 2012 (incorporated by reference herein to Exhibit 2.2 to the Partnership’s Current Report on Form 8-K filed on December 11, 2012, File No. 1-35143).
|
|
|
|
2.11
|
|
Amendment to Northwest Products System - Terminal Interests Asset Sale and Purchase Agreement by and between Tesoro Logistics Operations LLC and Northwest Terminalling Company, dated as of March 28, 2013 (incorporated by reference herein to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed on April 1, 2013, File No. 1-35143).
|
|
|
|
2.12
|
|
Amendment to Northwest Products Pipeline System Asset Sale and Purchase Agreement by and between Tesoro Logistics Northwest Pipeline LLC and Chevron Pipe Line Company, dated as of March 28, 2013 (incorporated by reference herein to Exhibit 2.2 to the Partnership’s Current Report on Form 8-K filed on April 1, 2013, File No. 1-35143).
|
|
|
|
2.13
|
|
Agreement Concerning Northwest Products System Asset Sale and Purchase Agreements among Chevron Pipe Line Company, Northwest Terminalling Company, Tesoro Logistics Northwest Pipeline LLC and Tesoro Logistics Operations LLC, dated as of May 17, 2013 (incorporated by reference herein to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed on May 20, 2013, File No. 1-35143).
|
|
|
|
2.14
|
|
Membership Interest Purchase Agreement, dated as of October 19, 2014, between Tesoro Logistics LP and QEP Field Services Company (incorporated by reference herein from Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed on October 20, 2014, File No. 1-35143).
|
|
|
|
2.15
|
|
Amendment No. 1 to Membership Interest Purchase Agreement, dated as of December 2, 2014, between Tesoro Logistics LP and QEP Field Services Company (incorporated by reference herein from Exhibit 2.2 to the Partnership’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-35143).
|
|
|
|
3.1
|
|
Certificate of Limited Partnership of Tesoro Logistics LP (incorporated by reference herein to Exhibit 3.1 to the Partnership’s Registration Statement on Form S-1 filed on January 4, 2011, File No. 333-171525).
|
|
|
|
3.2
|
|
Certificate of Formation of Tesoro Logistics GP, LLC (incorporated by reference herein to Exhibit 3.3 to the Partnership’s Registration Statement on Form S-1 filed on January 4, 2011, File No. 333-171525).
|
|
|
|
3.3
|
|
First Amended and Restated Agreement of Limited Partnership of Tesoro Logistics LP dated April 26, 2011 (incorporated by reference herein to Exhibit 3.1 to the Partnership’s Current Report on Form 8-K filed on April 29, 2011, File No. 1-35143).
|
|
|
|
3.4
|
|
Amendment No. 1 to Amended and Restated Agreement of Limited Partnership of Tesoro Logistics LP, dated as of December 2, 2014, entered into and effectuated by Tesoro Logistics GP, LLC (incorporated by reference herein from Exhibit 3.1 to the Partnership’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-35143).
|
|
|
|
3.5
|
|
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, File No. 1-35143).
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3.6
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Amendment No. 1 to the 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 September 30, 2014, File No. 1-35143).
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4.1
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Indenture, effective September 14, 2012, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2020 (incorporated by reference herein to Exhibit 4.1 to the Partnership’s Current Report on Form 8-K filed on September 17, 2012, File No. 1-35143).
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4.2
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First Supplemental Indenture, dated as of January 24, 2013, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2020 (incorporated by reference herein to Exhibit 4.2 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2012, File No. 1-35143).
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4.3
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Second Supplemental Indenture dated as of December 9, 2013, among Tesoro SoCal Pipeline Company LLC, Tesoro Logistics LP, Tesoro Logistics Finance Corp., and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2020 (incorporated by reference herein to Exhibit 4.2 to the Partnership’s Current Report on Form 8-K filed on December 12, 2013, File No. 1-35143).
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4.4
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Third Supplemental Indenture, dated as of December 17, 2013, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2020 (incorporated by reference herein to Exhibit 4.2 to the Partnership’s Current Report on Form 8-K filed on December 17, 2013, File No. 1-35143).
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Exhibit Number
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Description of Exhibit
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4.5
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Fourth Supplemental Indenture dated as of October 8, 2014, among Tesoro Alaska Pipeline Company LLC, Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. National Bank Association, as trustee, relating to the 5.875% Senior Notes due 2020 (incorporated by reference herein from Exhibit 4.1 to the Partnership’s Quarterly Report on Form 10-Q filed on October 31, 2014, File No. 1-35143).
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*4.6
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Fifth Supplemental Indenture dated as of January 8, 2015, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. National Bank Association, as trustee, relating to the 5.875% Senior Notes due 2020.
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4.7
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Indenture, dated as of August 1, 2013, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 6.125% Senior Notes due 2021 (incorporated by reference herein to Exhibit 4.1 to the Partnership’s Current Report on Form 8-K filed on August 2, 2013, File No. 1-35143).
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4.8
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First Supplemental Indenture dated as of December 9, 2013, among Tesoro SoCal Pipeline Company LLC, Tesoro Logistics LP, Tesoro Logistics Finance Corp., and U.S. Bank National Association, as trustee, relating to the 6.125% Senior Notes due 2021 (incorporated by reference herein to Exhibit 4.1 to the Partnership’s Current Report on Form 8-K filed on December 12, 2013, File No. 1-35143).
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4.9
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Second Supplemental Indenture dated as of October 8, 2014, among Tesoro Alaska Pipeline Company LLC, Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. National Bank Association, as trustee, relating to the 6.125% Senior Notes due 2021 (incorporated by reference herein from Exhibit 4.1 to the Partnership’s Quarterly Report on Form 10-Q filed on October 31, 2014, File No. 1-35143).
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*4.10
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Third Supplemental Indenture dated as of January 8, 2015, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. National Bank Association, as trustee, relating to the 6.125% Senior Notes due 2021.
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4.11
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Indenture, dated as of October 29, 2014 among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference herein from Exhibit 4.1 to the Partnership’s Current Report on Form 8-K filed on October 29, 2014, File No. 1-35143).
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4.12
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Supplemental Indenture, dated as of December 2, 2014, among the Partnership, Tesoro Logistics Finance Corp., QEP Field Services, LLC, the other entities party thereto, and U.S. Bank National Association, as trustee (incorporated by reference herein from Exhibit 4.1 to the Partnership’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-35143).
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4.13
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Registration Rights Agreement, dated as of October 29, 2014, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several initial purchasers (incorporated by reference herein from Exhibit 4.2 to the Partnership’s Current Report on Form 8-K filed on October 29, 2014, File No. 1-35143).
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4.14
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Joinder Agreement to the Registration Rights Agreement, dated as of December 2, 2014, among QEP Field Services, LLC, and the other entities party thereto (incorporated by reference herein from Exhibit 4.2 to the Partnership’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-35143).
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10.1
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Second Amended and Restated Credit Agreement, dated as of December 2, 2014, among Tesoro Logistics LP, Bank of America, N.A., as administrative agent, L/C issuer and lender, and other lenders party thereto (incorporated by reference herein to Exhibit 10.5 to the Partnership’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-35143).
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10.2
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Credit Agreement, dated as of December 2, 2014, between QEP Field Services, LLC and QEP Midstream Partners, LP (incorporated by reference herein to Exhibit 10.4 to the Partnership’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-35143).
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#10.3
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Management Stability Agreement of Phillip M. Anderson (incorporated by reference herein to Exhibit 10.13 to the Partnership’s Registration Statement on Form S-1 filed on January 4, 2011, File No. 333-171525).
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#10.4
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Tesoro Logistics LP 2011 Long-Term Incentive Plan, adopted as of March 31, 2011 (incorporated by reference herein to Exhibit 10.3 to the Partnership’s Current Report on Form 8-K filed on April 29, 2011, File No. 1-35143).
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#10.5
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Form of Tesoro Logistics LP 2011 Long-Term Incentive Plan Performance Phantom Unit Agreement (Form of employee performance-based award used for grants in 2011 and 2012) (incorporated by reference herein to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on May 20, 2011, File No. 1-35143).
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#10.6
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Form of Tesoro Logistics LP 2011 Long-Term Incentive Plan Performance Phantom Unit Agreement (Form of employee performance-based award used for grants beginning in 2013) (incorporated by reference herein to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on February 13, 2013, File No. 1-35143).
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#10.7
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Form of Tesoro Logistics LP 2011 Long-Term Incentive Plan Performance Phantom Unit Agreement (incorporated by reference herein to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on February 18, 2015, File No. 1-35143).
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#10.8
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Form of Tesoro Logistics LP 2011 Long-Term Incentive Plan Phantom Unit Award (Employee time-vesting award) (incorporated by reference herein to Exhibit 10.17 to the Partnership’s Registration Statement on Form S-1 filed on January 4, 2011, File No. 333-171525).
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#10.9
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Form of Tesoro Logistics LP 2011 Long-Term Incentive Plan Phantom Unit Award (Form of non-employee director award used for grants made in 2011 through 2013) (incorporated by reference herein to Exhibit 10.18 to the Partnership’s Registration Statement on Form S-1 filed on January 4, 2011, File No. 333-171525).
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Exhibit Number
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Description of Exhibit
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#10.10
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Form of Tesoro Logistics LP 2011 Long-Term Incentive Plan Phantom Unit Award (Form of non-employee director award used for grants made beginning in 2014) (incorporated by reference herein to Exhibit 10.10 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2013, File No. 1-35143).
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#10.11
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Tesoro Logistics LP 2013 Grant of Performance-Vesting Phantom Units and Tandem DERs Term Sheet (incorporated by reference herein to Exhibit 10.2 to the Partnership’s Current Report on Form 8-K filed on February 13, 2013, File No. 1-35143).
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#10.12
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Tesoro Logistics LP 2014 Grant of Performance-Vesting Phantom Units and Tandem DERs Term Sheet (incorporated by reference herein to Exhibit 10.2 to the Partnership’s Current Report on Form 8-K filed on February 12, 2014, File No. 1-35143).
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#10.13
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Tesoro Logistics LP 2015 Grant of Performance-Vesting Phantom Units and Tandem DERs Term Sheet (incorporated by reference herein to Exhibit 10.2 to the Partnership’s Current Report on Form 8-K filed on February 18, 2015, File No. 1-35143).
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#10.14
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Description of 2014 Incentive Compensation Program (incorporated by reference herein to Exhibit 10.10 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2013, File No. 1-35143).
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*#10.15
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Description of 2015 Incentive Compensation Program
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*#10.16
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Tesoro Logistics LP Non-Employee Director Compensation Program.
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10.17
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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, File No. 1-35143).
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*10.18
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Amendment No. 1 to the Third Amended and Restated Omnibus Agreement, dated as of February 20, 2015, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Companies Inc., Tesoro Alaska Company LLC, Tesoro Logistics LP and Tesoro Logistics GP, LLC.
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10.19
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First Amended and Restated Omnibus Agreement, dated as of December 2, 2014, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, QEP Midstream Partners GP, LLC, QEP Midstream Partners, LP and QEP Midstream Partners Operating, LLC (incorporated by reference herein to Exhibit 10.7 to the Partnership’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-35143).
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*10.20
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QEPM Omnibus Side Agreement, dated as of February 11, 2015, among Tesoro Logistics GP, LLC and Tesoro Logistics LP.
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10.21
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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, File No. 1-35143).
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10.22
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Amendment No. 1 to Secondment and Logistics Services Agreement, dated as of December 2, 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, Tesoro Alaska Pipeline Company LLC, QEP Field Services, LLC, QEP Midstream Partners GP, LLC, QEP Midstream Partners Operating, LLC, QEPM Gathering I, LLC, Rendezvous Pipeline Company, LLC and Green River Processing, LLC (incorporated by reference herein from Exhibit 10.8 to the Partnership’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-35143).
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10.23
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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, File No. 1-35143).
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10.24
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Transportation Services Agreement (High Plains Pipeline System), dated as of April 26, 2011, between Tesoro High Plains Pipeline Company LLC and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.6 to the Partnership’s Current Report on Form 8-K filed on April 29, 2011, File No. 1-35143).
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10.25
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Second Amended and Restated Trucking Transportation Services Agreement, dated as of March 26, 2013, among Tesoro Logistics Operations, LLC and Tesoro Refining & Marketing Company LLC (incorporated by reference herein to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on April 1, 2013, File No. 1-35143).
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10.26
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Second Amended and Restated Master Terminalling Services Agreement, dated as of May 3, 2013, among Tesoro Refining and Marketing Company LLC, Tesoro Alaska Company and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.2 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013, File No. 1-35143).
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10.27
|
|
Amended and Restated Master Terminalling Services Agreement – Southern California, dated as December 6, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.10 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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Exhibit Number
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|
Description of Exhibit
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10.28
|
|
Terminal Expansion Agreement, dated as of February 27, 2012, between Tesoro Logistics Operations LLC and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.21 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-35143).
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10.29
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|
Amended and Restated Transportation Services Agreement (Salt Lake City Short-Haul Pipelines), dated as of November 19, 2014, between Tesoro Logistics Operations LLC and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.3 to the Partnership’s Current Report on Form 8-K filed on December 15, 2014, File No. 1-35143).
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10.30
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|
Salt Lake City Storage and Transportation Services Agreement, dated as of April 26, 2011, between Tesoro Refining and Marketing Company and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.10 to the Partnership’s Current Report on Form 8-K filed on April 29, 2011, File No. 1-35143).
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10.31
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Terminal Sublease, dated as of April 26, 2011, between Tesoro Alaska Company, as Landlord, and Tesoro Alaska Logistics LLC, as Tenant (incorporated by reference herein to Exhibit 10.11 to the Partnership’s Current Report on Form 8-K filed on April 29, 2011, File No. 1-35143).
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10.32
|
|
Amorco Marine Terminal Use and Throughput Agreement, effective April 1, 2012, between Tesoro Refining and Marketing Company and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.4 to the Partnership’s Current Report on Form 8-K filed on April 3, 2012, File No. 1-35143).
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10.33
|
|
Amended and Restated Long Beach Berth Access Use and Throughput Agreement, dated as of December 6, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.8 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.34
|
|
Long Beach Berth Throughput Agreement, dated as of December 6, 2013, among Carson Cogeneration Company, Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.9 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.35
|
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Long Beach Operating Agreement, effective September 14, 2012, between Tesoro Logistics Operations LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.6 to the Partnership’s Current Report on Form 8-K filed on September 17, 2012, File No. 1-35143).
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10.36
|
|
Long Beach Storage Services Agreement, dated as of December 6, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.11 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.37
|
|
Long Beach Pipeline Throughput Agreement (84/86 Pipelines), dated as of December 6, 2013, between the Operating Company and Tesoro Refining & Marketing Company LLC (incorporated by reference herein to Exhibit 10.13 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.38
|
|
Transportation Services Agreement (Los Angeles Short-Haul Pipelines), effective September 14, 2012, among Tesoro Logistics Operations LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.7 to the Partnership’s Current Report on Form 8-K filed on September 17, 2012, File No. 1-35143).
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10.39
|
|
Anacortes Track Use and Throughput Agreement, dated as of November 15, 2012, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Refining and Marketing Company and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.4 to the Partnership’s Current Report on Form 8-K filed on November 15, 2012, File No. 1-35143).
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10.40
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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, File No. 1-35143).
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10.41
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|
Ground Lease, dated as of November 15, 2012, between Tesoro Logistics Operations LLC and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.5 to the Partnership’s Current Report on Form 8-K filed on November 15, 2012, File No. 1-35143).
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10.42
|
|
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, File No. 1-35143).
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10.43
|
|
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, File No. 1-35143).
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10.44
|
|
Right of First Refusal, Option Agreement and Agreement of Purchase and Sale, dated as of November 15, 2012, between Tesoro Logistics Operations LLC and Tesoro Refining and Marketing Company (incorporated by reference herein to Exhibit 10.6 to the Partnership’s Current Report on Form 8-K filed on November 15, 2012, File No. 1-35143).
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Exhibit Number
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|
Description of Exhibit
|
10.45
|
|
Amended and Restated Representation and Services Agreement for Oil Spill Contingency Planning, Response and Remediation, dated as of December 6, 2013, by and among Tesoro Companies, Inc., Tesoro Maritime Company, Tesoro Refining & Marketing Company LLC, Tesoro Alaska Company, Kenai Pipeline Company, Tesoro Alaska Pipeline Company, Carson Cogeneration Company, Tesoro Logistics Operations LLC, Tesoro High Plains Pipeline Company LLC, Tesoro Logistics Pipelines LLC, and Tesoro Logistics Northwest Pipeline LLC (incorporated by reference herein to Exhibit 10.18 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.46
|
|
Carson Storage Services Agreement, dated as of June 1, 2013, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.5 to the Partnership’s Current Report on Form 8-K filed on June 3, 2013, File No. 1-35143).
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10.47
|
|
Carson Assets Indemnity Agreement, dated as of December 6, 2013, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.2 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.48
|
|
Berth 121 Sublease Rights Agreement, dated as of December 6, 2013, among Carson Cogeneration Company, Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.3 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.49
|
|
Berth 121 Operating Agreement, dated as of December 6, 2013, between Carson Cogeneration Company and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.4 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.50
|
|
Terminal 2 Sublease Rights Agreement, dated as of December 6, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.5 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.51
|
|
Terminals 2 and 3 Ground Lease Rights Agreement, dated as of December 6, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.6 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.52
|
|
Terminals 2 and 3 Operating Agreement, dated as of December 6, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.7 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.53
|
|
Transportation Services Agreement (SoCal Pipelines), dated as of December 6, 2013, between Tesoro Refining & Marketing Company LLC and Tesoro SoCal Pipeline Company LLC (incorporated by reference herein to Exhibit 10.12 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.54
|
|
Carson Coke Handling Services Agreement, dated as of December 6, 2013, among Tesoro Refining & Marketing Company LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP, and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.14 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.55
|
|
Lease Agreement, dated as of December 6, 2013, between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 10.19 to the Partnership’s Current Report on Form 8-K filed on December 6, 2013, File No. 1-35143).
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10.56
|
|
Sublease, dated as of December 9, 2013, by and between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC (incorporated by reference herein to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed on December 10, 2013, File No. 1-35143).
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10.57
|
|
Lease, dated as of January 11, 2012, by and between the City of Long Beach and Tesoro Refining & Marketing Company LLC (incorporated by reference herein to Exhibit 2.2 to the Partnership’s Current Report on Form 8-K filed on December 10, 2013, File No. 1-35143).
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10.58
|
|
Construction Service Agreement - Anacortes Products Terminal, dated as of July 28, 2014 between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC (incorporated by reference herein from Exhibit 10.1 to the Partnership’s Quarterly Report on Form 10-Q filed on August 1, 2014, File No. 1-35143).
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10.59
|
|
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, File No. 1-35143).
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10.60
|
|
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, File No. 1-35143).
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10.61
|
|
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, File No. 1-35143).
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10.62
|
|
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, File No. 1-35143).
|
Exhibit Number
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|
Description of Exhibit
|
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|
10.63
|
|
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, File No. 1-35143).
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|
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10.64
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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, File No. 1-35143).
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10.65
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Indemnification Agreement, dated as of December 2, 2014, between Tesoro Logistics LP and QEP Field Services Company (incorporated by reference herein to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-35143).
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10.66
|
|
Transition Services Agreement, dated as of December 2, 2014, between Tesoro Logistics LP and QEP Resources, Inc. (incorporated by reference herein to Exhibit 10.2 to the Partnership’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-35143).
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10.67
|
|
Guaranty, dated as of December 2, 2014, by QEP Resources, Inc., in favor of Tesoro Logistics LP (incorporated by reference herein to Exhibit 10.3 to the Partnership’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-35143).
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10.68
|
|
Intercompany Indemnity, Subrogation and Contribution Agreement, dated as of December 2, 2014, among Tesoro Logistics LP, QEP Midstream Partners, LP, QEP Midstream Partners Operating, LLC, QEPM Gathering I, LLC, Rendezvous Pipeline Company, LLC and Green River Processing, LLC (incorporated by reference herein to Exhibit 10.6 to the Partnership’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-35143).
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10.69
|
|
Keep-Whole Commodity Fee Agreement, dated as of December 7, 2014, among Tesoro Refining & Marketing Company LLC, QEP Field Services, LLC, QEPM Gathering I, LLC and Green River Processing, LLC (incorporated by reference herein to Exhibit 10.9 to the Partnership’s Current Report on Form 8-K filed on December 8, 2014, File No. 1-35143).
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10.70
|
|
Form of indemnification agreement between Tesoro Logistics GP, LLC and the independent members of its board of directors(incorporated by reference herein to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on December 15, 2014, File No. 1-35143).
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10.71
|
|
Form of indemnification agreement between Tesoro Corporation and members of its management who may serve as directors or executive officers of Tesoro Logistics GP, LLC (incorporated by reference herein to Exhibit 10.3 to the Current Report on Form 8-K of Tesoro Corporation filed on August 4, 2008, File No. 1-03473).
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14.1
|
|
Code of Business Conduct and Ethics for Senior Financial Executives (incorporated by reference herein to Exhibit 14.1 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-35143).
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14.2
|
|
Code of Business Conduct (incorporated by reference herein to Exhibit 14.2 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-35143).
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*21.1
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Subsidiaries of the Company.
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*23.1
|
|
Consent of Independent Registered Public Accounting Firm (Ernst & Young LLP).
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*31.1
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|
Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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*31.2
|
|
Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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*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.
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*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.
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|
**101.INS
|
|
XBRL Instance Document
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|
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|
**101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
**101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
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|
|
|
**101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
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|
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|
**101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
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**101.PRE
|
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XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith
|
**
|
Submitted electronically herewith
|
#
|
Compensatory plan or arrangement
|
|
|
TESORO LOGISTICS LP
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|
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By:
|
Tesoro Logistics GP, LLC
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|
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Its General Partner
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By:
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/s/ GREGORY J. GOFF
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|
Gregory J. Goff
|
|
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|
Chairman of the Board of Directors and Chief Executive Officer
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|
|
|
(Principal Executive Officer)
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Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ GREGORY J. GOFF
|
|
Chairman of the Board of Directors and
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|
February 24, 2015
|
Gregory J. Goff
|
|
Chief Executive Officer
|
|
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|
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(Principal Executive Officer)
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|
|
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|
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|
|
/s/ STEVEN M. STERIN
|
|
Director, Vice President and Chief Financial Officer
|
|
February 24, 2015
|
Steven M. Sterin
|
|
(Principal Financial Officer)
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|
|
|
|
|
|
|
/s/ ARLEN O. GLENEWINKEL, JR.
|
|
Vice President and Controller
|
|
February 24, 2015
|
Arlen O. Glenewinkel, Jr.
|
|
(Principal Accounting Officer)
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|
|
|
|
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|
|
/s/ PHILLIP M. ANDERSON
|
|
Director and President
|
|
February 24, 2015
|
Phillip M. Anderson
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|
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|
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/s/ CHARLES S. PARRISH
|
|
Director, Vice President, General Counsel and
|
|
February 24, 2015
|
Charles S. Parrish
|
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Secretary
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|
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|
/s/ KEITH M. CASEY
|
|
Director
|
|
February 24, 2015
|
Keith M. Casey
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|
|
/s/ RAYMOND J. BROMARK
|
|
Director
|
|
February 24, 2015
|
Raymond J. Bromark
|
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|
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|
|
/s/ JAMES H. LAMANNA
|
|
Director
|
|
February 24, 2015
|
James H. Lamanna
|
|
|
|
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|
|
/s/ THOMAS C. O’CONNOR
|
|
Director
|
|
February 24, 2015
|
Thomas C. O’Connor
|
|
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|
|
•
|
Achievement of earnings before interest, taxes, depreciation and amortization (“EBITDA”) measured on a margin neutral basis (this is the more heavily weighted metric, constituting 50% of the bonus opportunity for the corporate performance component);
|
•
|
Safety - Targeted improvement in recordable incidents (this metric constitutes 5% of the bonus opportunity for the corporate performance component);
|
•
|
Process Safety Management - Targeted improvement in the number of process safety incidents (this metric constitutes 5% of the bonus opportunity for the corporate performance component);
|
•
|
Environmental - Targeted improvements in the number of environmental incidents (this metric constitutes 5% of the bonus opportunity for the corporate performance component);
|
•
|
Cost Management - Measurement of non-capital cash expenditure versus budget (this metric constitutes 17.5% of the bonus opportunity for the corporate performance component); and
|
•
|
Business Improvement - Targeted improvements from capital improvement initiatives, synergies related to asset acquisitions and other projects & initiatives (this metric constitutes 17.5% of the bonus opportunity for the corporate performance component).
|
•
|
Safety and Environmental;
|
•
|
Cost Management;
|
•
|
Improvements in EBITDA; and
|
•
|
Business improvement and value creation initiatives.
|
|
|
|
|
Board of Directors Annual Retainer (b)
|
$
|
136,000
|
|
Annual Retainer for Audit and Conflicts Committee Chairs
|
15,000
|
|
|
Board and Committee Meeting Fees (c)
|
1,500 per meeting
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|
|
|
(a)
|
In addition to the retainers set forth above, we reimburse our non-employee directors for travel and lodging expenses that they incur in connection with attending meetings of the board of directors or its committees.
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|
|
(b)
|
The annual retainer is payable $58,000 in cash and $78,000 in an award of service phantom units. Unit-based awards granted to non-employee directors under the annual compensation package or upon first election to the board of directors under our long-term incentive plan, generally vest one year from the date of grant. If the non-employee director termination from the board is due to death or disability, director’s service phantom units will automatically vest along with any accrued cash distribution equivalent rights. If termination is due to any other reason, the non-employee director will receive a pro-rated award for the number of full months served as a non-employee director during the vesting period along with any accrued cash distribution equivalent rights. The pro-rated award will vest one year from the date of grant. Cash distribution equivalent rights accrue with respect to equity-based awards and are distributed at the time such awards vest. The number of units granted will be determined by dividing $78,000 by the average closing price of our common units on the NYSE over a ten business-day period ending on the third business day prior to the grant date and rounding any resulting fractional units to the nearest whole unit. The plan provides that unit-based awards to directors will be granted annually in conjunction with the Board's approval of our Annual Report on Form 10-K, and that any new non-employee director will receive a pro-rata award of service phantom units when commencing his or her services as a board member.
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|
|
(c)
|
A meeting fee is paid to a non-employee director for attendance in person or by telephone.
|
By:
|
Tesoro Logistics GP, LLC, its
|
By:
|
/s/ PHILLIP M. ANDERSON
Phillip M. Anderson President |
By:
|
/s/ PHILLIP M. ANDERSON
|
Subsidiary
|
|
|
|
Jurisdiction of Organization
|
Tesoro High Plains Pipeline Company LLC
|
|
|
|
Delaware
|
Tesoro Logistics Finance Corp.
|
|
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|
Delaware
|
Tesoro Logistics Northwest Pipeline LLC
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|
Delaware
|
Tesoro Logistics Pipelines LLC
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Delaware
|
Tesoro Logistics Operations LLC
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Delaware
|
Tesoro SoCal Pipeline Company LLC
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Delaware
|
Tesoro Alaska Pipeline Company LLC
|
|
|
|
Delaware
|
QEP Field Services, LLC
|
|
|
|
Delaware
|
QEP Midstream Partners GP, LLC
|
|
|
|
Delaware
|
QEP Midstream Partners, LP (a)
|
|
|
|
Delaware
|
QEP Midstream Partners Operating, LLC (b)
|
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|
|
Delaware
|
QEPM Gathering I, LLC (c)
|
|
|
|
Delaware
|
Rendezvous Pipeline Company, LLC (d)
|
|
|
|
Colorado
|
Rendezvous Gas Services, L.L.C. (e)
|
|
|
|
Wyoming
|
Green River Processing, LLC (f)
|
|
|
|
Delaware
|
Three Rivers Gathering, L.L.C. (g)
|
|
|
|
Delaware
|
Uintah Basin Field Services, L.L.C. (h)
|
|
|
|
Delaware
|
(
a)
|
56% owned by QEP Field Services, LLC and 2% general partner interest owned by QEP Midstream Partners GP, LLC
|
(b)
|
100% owned by QEP Midstream Partners, LP
|
(c)
|
100% owned by QEP Midstream Operating, LLC
|
(d)
|
100% owned by QEPM Gathering I, LLC
|
(e)
|
78% owned by QEPM Gathering I, LLC
|
(f)
|
50% owned by QEP Midstream Partners Operating, LLC
|
(g)
|
60% owned by QEP Field Services, LLC and 40% owned by QEP Midstream Partners Operating, LLC
|
1.
|
I have reviewed this annual report on Form 10-K of Tesoro Logistics LP;
|
2.
|
Based on my knowledge, this annual 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 annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) 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 annual 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 annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and
|
(d)
|
Disclosed in this annual 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:
|
February 24, 2015
|
/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 annual report on Form 10-K of Tesoro Logistics LP;
|
2.
|
Based on my knowledge, this annual 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 annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) 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 annual 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 annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and
|
(d)
|
Disclosed in this annual 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:
|
February 24, 2015
|
/s/ STEVEN M. STERIN
|
|
|
Steven M. Sterin
|
|
|
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)
|
|||
February 24, 2015
|
(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/ STEVEN M. STERIN
|
|||
Steven M. Sterin
|
|||
Chief Financial Officer of Tesoro Logistics GP, LLC
(the general partner of Tesoro Logistics LP)
|
|||
February 24, 2015
|