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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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•
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changes in global economic conditions and the effects of a global economic downturn on our business, on the business of our key customers, including Tesoro, and on our customers’ suppliers, customers, business partners and credit lenders;
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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”);
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a material decrease in the natural gas and crude oil produced in the Green River Basin, Uinta Basin and Vermillion Basin in the states of Utah, Colorado and Wyoming (the “Rockies Region”);
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the ability
of our key customers, including Tesoro, to remain in compliance with the terms of their outstanding indebtedness;
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changes in insurance markets impacting costs and the level and types of coverage available;
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changes in the cost or availability of third-party vessels, pipelines and other means of delivering and transporting crude oil, feedstocks, natural gas, natural gas liquids (“NGLs”) and refined products;
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the coverage and ability to recover claims under our insurance policies;
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the availability and costs of crude oil, other refinery feedstocks and refined products;
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the timing and extent of changes in commodity prices and demand for refined products, natural gas and NGLs;
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changes in our cash flow from operations;
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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.
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the risk of contract cancellation, non-renewal or failure to perform by those in our supply and distribution chains, including Tesoro and Tesoro’s customers, and the ability to replace such contracts and/or customers;
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the suspension, reduction or termination of Tesoro’s obligation under our commercial agreements and our secondment agreement;
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a material decrease in profitability among our customers, including Tesoro;
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earthquakes or other natural disasters affecting operations;
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direct or indirect effects on our business resulting from actual or threatened terrorist incidents, cyber-security breaches or acts of war;
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weather conditions affecting operations by us or our key customers, including Tesoro, or the areas in which the customers we serve operate;
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disruptions due to equipment interruption or failure at our facilities, Tesoro’s facilities or third-party facilities on which our key customers, including Tesoro, are dependent;
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changes in the expected value of and benefits derived from acquisitions;
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actions of customers and competitors;
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changes in our credit profile;
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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, compliance costs or other factors beyond our control;
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operational hazards inherent in refining operations and in transporting and storing crude oil, natural gas, NGLs and refined products;
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changes in capital requirements or in execution and benefits of planned capital projects;
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seasonal variations in demand for natural gas and refined products;
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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;
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risks related to labor relations and workplace safety; and
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political developments.
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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 Williston Gathering System, which consists of a crude oil and natural gas gathering system located in the Williston Basin, North Dakota;
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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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the Green River System, which consists of an integrated natural gas gathering and transportation system;
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the Vermillion Gathering System, which consists of natural gas gathering and compression assets located in Southern Wyoming, northwest Colorado and northeast Utah;
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a 50% equity method investment in Three Rivers Gathering, which transports natural gas to our natural gas processing facilities, located in the Uinta Basin; and
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a 38% equity method investment in Uintah Basin Field Services, which operates gathering pipeline and gas compression assets located in the southeastern Uinta Basin.
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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.
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The Green River Gathering Assets are primarily supported by Life-of-Reserves Contracts and long-term, fee-based gathering agreements with minimum volume commitments.
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Rendezvous Gas is an indirect, non-wholly owned subsidiary of TLLP, 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 TLLP 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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Gathering System
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Products Handled
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Length (miles)
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Compression (bhp)
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High Plains System
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Crude Oil
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1,020
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—
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Williston Gathering System
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Natural gas
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20
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239
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Crude Oil
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18
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—
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Uinta Basin Gathering System
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Natural gas
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602
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54,280
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Green River System
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Green River Gathering Assets
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Natural gas
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366
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49,131
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Crude oil
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208
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—
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Water
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38
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—
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Rendezvous Gas Services, L.L.C.
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Natural gas
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311
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7,800
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Rendezvous Pipeline
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Natural gas
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21
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—
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Vermillion Gathering System
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Natural gas
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480
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25,562
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Three Rivers Gathering, L.L.C.
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Natural gas
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52
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4,735
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Uintah Basin Field Services, L.L.C.
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Natural gas
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96
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2,370
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Total
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3,232
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144,117
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Asset
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Primary Location
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Facility Type
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Throughput Capacity (a)
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Throughput (a)
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Processing Complexes
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Vermillion Complex
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Southern Green River Basin
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Cryogenic
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57
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57
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Uinta Basin Complex
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Uinta Basin
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Cryogenic / Refrigeration
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590
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275
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Blacks Fork Complex
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Green River Basin
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Cryogenic / Joule-Thomson
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730
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526
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Emigrant Trail Complex
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Green River Basin
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Cryogenic
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55
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52
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Total Processing
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1,432
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910
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Fractionation Complex
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Blacks Fork Complex
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Green River Basin
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Fractionator
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15,000
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2,931
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Total Fractionation
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15,000
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2,931
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(a)
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Capacity and throughput is measured in MMcf/d for processing complexes and bpd for the fractionation complex.
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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;
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unloading crude oil transported by unit train to Tesoro’s Washington refinery;
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providing storage services;
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providing ancillary services, ethanol blending and additive injection, and for barge loading or unloading fees; and
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handling petroleum coke for Tesoro’s Los Angeles refinery.
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Crude oil and refined products terminals:
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Daily Available
Terminalling
Capacity
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Throughput
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California Marine Terminals
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795,000
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456,497
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California Terminals and Storage Facilities
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707,600
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270,855
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Idaho Terminals
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50,000
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43,575
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Utah Terminal
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82,000
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40,337
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Washington Terminals and Storage Facilities
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120,500
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80,820
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North Dakota Terminal
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28,500
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21,983
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Alaska Terminals
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66,500
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20,631
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Total Crude Oil and Refined Products
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1,850,100
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934,698
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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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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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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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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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leaks or losses of crude oil, natural gas, NGLs, refined products and other hydrocarbons or other regulated substances as a result of the malfunction of equipment or facilities;
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curtailments of operations relative to severe seasonal weather;
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damage to pipelines and other assets from construction, farm and utility equipment;
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damage to third-party property or persons, including injury or death;
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ruptures, fires and explosions; and
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other hazards.
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the volatility and uncertainty of regional pricing differentials;
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the availability of drilling rigs for producers;
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weather-related curtailment of operations by producers and disruptions to truck gathering operations;
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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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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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the anticipated future prices of crude oil, refined products, NGLs and natural gas in surrounding markets.
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the risk of contract cancellation, non-renewal or failure to perform by their customers;
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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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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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their ability to remain in compliance with the terms of their outstanding indebtedness;
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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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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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changes in crude oil, natural gas, NGLs and refined product inventory levels and carrying costs.
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the volume of crude oil, natural gas, NGLs and refined products that we handle;
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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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the terminalling, trucking, processing and storage fees with respect to non-pipeline volumes we handle;
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the mix of gathering, processing, transportation and storage services we provide; and
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prevailing economic conditions.
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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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the amount of our capital expenditures;
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the volatility in capital markets at the time of new debt or equity issuances;
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the timing of distributions on new unit issuances relating to acquisitions;
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the cost of acquisitions, if any;
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our debt service requirements and other liabilities;
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fluctuations in our working capital needs;
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our ability to borrow funds and access capital markets;
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restrictions contained in our credit facilities and other debt service requirements;
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an uninsured catastrophic loss;
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the amount of cash reserves established by our general partner; and
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other business risks impacting our cash levels.
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make certain cash distributions;
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incur certain indebtedness;
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incur certain liens;
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make certain investments;
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dispose of assets in excess of certain amounts;
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engage in certain mergers or consolidations and transfers of assets; and
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enter into certain transactions with affiliates.
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the potential for unexpected costs, delays and challenges that may arise in integrating acquisitions into our existing business;
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limitations on our ability to realize the expected cost savings and synergies from an acquisition;
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challenges related to integrating acquired operations that have management teams and company cultures that differ from our own;
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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;
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difficulties of managing operations outside of our existing core business, which may require development of additional skills and competencies; and
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discovery of previously unknown liabilities following an acquisition with the acquired business or assets for which we cannot receive reimbursement under applicable indemnification provisions.
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acts of God, fires, floods or storms;
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compliance with orders of courts or any governmental authority;
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explosions, wars, terrorist acts, riots, strikes, lockouts or other industrial disturbances;
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accidental disruption of service;
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breakdown of machinery, storage tanks or pipelines and inability to obtain or unavoidable delay in obtaining material or equipment; and
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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.
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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;
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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;
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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;
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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;
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Except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval;
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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;
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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;
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Our general partner determines which costs incurred by it are reimbursable by us;
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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;
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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;
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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;
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Our general partner has limited and may continue to limit its liability regarding our contractual and other obligations;
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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;
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Our general partner controls the enforcement of obligations owed to us by our general partner and its affiliates, including our commercial agreements with Tesoro;
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Our general partner decides whether to retain separate counsel, accountants, or others to perform services for us; and
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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.
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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;
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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;
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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;
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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
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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.
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our unitholders’ proportionate ownership interest in us will decrease;
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the amount of cash available for distribution on each unit may decrease;
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the relative voting strength of each previously outstanding unit may be diminished; and
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the market price of our common units may decline.
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any assets that were owned by Tesoro at the closing of our initial public offering (including replacements or expansions of those assets);
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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;
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any asset or business that Tesoro acquires or constructs that has a fair market value of less than $5 million; and
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any asset or business that Tesoro acquires or constructs that has a fair market value of $5 million or more if we have been offered the opportunity to purchase the asset or business for fair market value not later than six months after completion of such acquisition or construction, and we decline to do so.
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•
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we were conducting business in a state but had not complied with that particular state’s partnership statute; or
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his right to act with other unitholders to remove or replace the general partner, to approve some amendments to our partnership agreement or to take other actions under our partnership agreement constitute control of our business.
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Trading Prices per
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Quarterly Cash Distribution per Unit (a)
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Distribution Date
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Record Date
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|||||||||
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Common Unit
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||||||||||||
Quarter Ended
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High
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Low
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||||||||||
December 31, 2015
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$
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56.92
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$
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41.24
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$
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0.7800
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February 12, 2016
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February 2, 2016
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September 30, 2015
|
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57.90
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|
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40.14
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0.7500
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|
|
November 13, 2015
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November 2, 2015
|
||||
June 30, 2015
|
|
61.74
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|
|
53.01
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|
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0.7225
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|
|
August 14, 2015
|
|
August 3, 2015
|
||||
March 31, 2015
|
|
60.19
|
|
|
49.33
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|
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0.6950
|
|
|
May 15, 2015
|
|
May 4, 2015
|
||||
December 31, 2014
|
|
71.37
|
|
|
49.01
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|
|
0.6675
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|
|
February 13, 2015
|
|
February 2, 2015
|
||||
September 30, 2014
|
|
73.99
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|
|
64.04
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|
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0.6425
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|
|
November 13, 2014
|
|
November 3, 2014
|
||||
June 30, 2014
|
|
75.55
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|
|
59.75
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|
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0.6150
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August 14, 2014
|
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August 4, 2014
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||||
March 31, 2014
|
|
65.59
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51.16
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0.5900
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May 15, 2014
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May 5, 2014
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(a)
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Represents cash distributions attributable to the quarter and declared and paid within
45
days of quarter end in accordance with our partnership agreement.
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Period
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Total Number of Units Purchased (a)
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Average Price Paid per Unit
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Total Number of Units Purchased as Part of Publicly Announced Plans or Programs
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Approximate Dollar Value of Units that May Yet Be Purchased Remaining at Period End Under the Plan or Programs
(in millions)
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||||||
October 2015
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—
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|
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$
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—
|
|
|
—
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|
|
$
|
—
|
|
November 2015
|
—
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|
|
$
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—
|
|
|
—
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|
|
$
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—
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|
December 2015
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11,299
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$
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48.54
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|
|
—
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|
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$
|
—
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Total
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11,299
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|
|
|
|
—
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|
|
|
(a)
|
The entire 11,299 units were acquired from employees during the fourth quarter of 2015 to satisfy tax withholding obligations in connection with the vesting of performance phantom unit awards issued to them.
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2015 (a)
|
|
2014 (a)
|
|
2013 (a)
|
|
2012 (a)
|
|
2011 (a)
|
||||||||||
|
(In millions, except units and per unit amounts)
|
||||||||||||||||||
Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues (b)
|
$
|
1,112
|
|
|
$
|
600
|
|
|
$
|
313
|
|
|
$
|
164
|
|
|
$
|
94
|
|
Net earnings
|
$
|
275
|
|
|
$
|
79
|
|
|
$
|
24
|
|
|
$
|
48
|
|
|
$
|
11
|
|
Loss attributable to Predecessors
|
17
|
|
|
23
|
|
|
56
|
|
|
9
|
|
|
24
|
|
|||||
Income attributable to noncontrolling interest
|
(20
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net earnings attributable to partners
|
$
|
272
|
|
|
$
|
99
|
|
|
$
|
80
|
|
|
$
|
57
|
|
|
$
|
35
|
|
General partner’s interest in net earnings, including incentive distribution rights
|
$
|
73
|
|
|
$
|
43
|
|
|
$
|
12
|
|
|
$
|
3
|
|
|
$
|
1
|
|
Common unitholders’ interest in net earnings
|
$
|
199
|
|
|
$
|
43
|
|
|
$
|
46
|
|
|
$
|
28
|
|
|
$
|
17
|
|
Subordinated unitholders’ interest in net earnings
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
22
|
|
|
$
|
26
|
|
|
$
|
17
|
|
Net earnings per limited partner unit:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common - basic
|
$
|
2.33
|
|
|
$
|
0.96
|
|
|
$
|
1.48
|
|
|
$
|
1.90
|
|
|
$
|
1.11
|
|
Common - diluted
|
$
|
2.33
|
|
|
$
|
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
|
84.7
|
|
|
54.2
|
|
|
31.5
|
|
|
16.6
|
|
|
15.3
|
|
|||||
Common units - diluted
|
84.8
|
|
|
54.2
|
|
|
31.6
|
|
|
16.7
|
|
|
15.3
|
|
|||||
Subordinated units - basic and diluted
|
—
|
|
|
5.6
|
|
|
15.3
|
|
|
15.3
|
|
|
15.3
|
|
|||||
Cash distribution per unit
|
$
|
2.8350
|
|
|
$
|
2.4125
|
|
|
$
|
2.0175
|
|
|
$
|
1.6050
|
|
|
$
|
0.5948
|
|
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
4,892
|
|
|
$
|
4,802
|
|
|
$
|
1,542
|
|
|
$
|
381
|
|
|
$
|
260
|
|
Total debt, net of unamortized issuance costs (c)
|
$
|
2,844
|
|
|
$
|
2,544
|
|
|
$
|
1,141
|
|
|
$
|
344
|
|
|
$
|
49
|
|
Cash Flows From (Used In)
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
459
|
|
|
$
|
166
|
|
|
$
|
86
|
|
|
$
|
72
|
|
|
$
|
20
|
|
Investing activities
|
(316
|
)
|
|
(2,673
|
)
|
|
(394
|
)
|
|
(128
|
)
|
|
(16
|
)
|
|||||
Financing activities
|
(146
|
)
|
|
2,503
|
|
|
312
|
|
|
57
|
|
|
14
|
|
|||||
Increase (decrease) in cash and cash equivalents
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
18
|
|
Capital Expenditures
|
|
|
|
|
|
|
|
|
|
||||||||||
Growth
|
$
|
243
|
|
|
$
|
200
|
|
|
$
|
63
|
|
|
$
|
81
|
|
|
$
|
10
|
|
Maintenance (d)
|
53
|
|
|
50
|
|
|
23
|
|
|
13
|
|
|
10
|
|
|||||
Total capital expenditures
|
$
|
296
|
|
|
$
|
250
|
|
|
$
|
86
|
|
|
$
|
94
|
|
|
$
|
20
|
|
(a)
|
Includes the historical results related to the Partnership and Predecessors for every year presented. In addition to the acquisitions discussed in Note 1 and Note 2 to our combined consolidated financial statements in Part II, Item 8, the December 31, 2012, results of operations include the Anacortes rail car unloading facility assets, the Long Beach marine terminal and related short-haul pipelines, the Los Angeles short-haul pipelines, and the Martinez crude oil marine terminal assets.
|
(b)
|
Our Predecessors did not record revenue for transactions with Tesoro in the Terminalling and Transportation segment or for trucking services in the Gathering segment for the TLLP Predecessor prior to the Initial Offering on
April 26, 2011
, or for assets acquired in the Acquisitions from Tesoro prior to the effective date of each acquisition, with the exception of transportation regulated by the FERC and the North Dakota Public Service Commission on our High Plains System and the Regulatory Commission of Alaska tariffs charged to Tesoro on the refined products pipeline included in the West Coast Logistics Assets Acquisition.
|
(c)
|
Total debt includes capital lease obligations.
|
(d)
|
Maintenance capital expenditures include expenditures required to ensure the safety, reliability, integrity and regulatory compliance of our assets.
|
•
|
focus on opportunities to provide committed fee-based logistics services to Tesoro and third parties;
|
•
|
evaluate investment opportunities that may arise from the growth of Tesoro’s refining and marketing business or from increased third-party activity to make capital investments to expand our existing asset base;
|
•
|
pursue accretive acquisitions of complementary assets from Tesoro as well as third parties; and
|
•
|
seek to enhance the profitability of our existing assets by pursuing opportunities to add Tesoro and third-party volumes, improve operating efficiencies and increase utilization.
|
•
|
expand our assets on our gathering and transportation system, located in the Bakken Region (the “High Plains System”) in support of growing third-party demand for transportation services and Tesoro’s demand for Bakken crude oil in the mid-continent and west coast refining systems, including:
|
◦
|
further expanding capacity and capabilities of our High Plains Pipeline;
|
◦
|
expanding our gathering footprint in the Bakken Shale/Williston Basin area of North Dakota and Montana (the “Bakken Region”), including crude oil, natural gas and water, to enhance and improve overall basin logistics efficiencies;
|
◦
|
adding other origin and destination points on the High Plains System to increase volumes; and
|
◦
|
improving the utilization of our proprietary truck fleet, which should generate cost and operating efficiencies.
|
•
|
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 terminalling and transportation assets;
|
•
|
expand and optimize our natural gas gathering and processing assets;
|
•
|
completed the Connolly Gathering System major growth project, which has a capacity of approximately 60 Mbpd;
|
•
|
completed the construction of a new light products truck rack at the site of the existing Anacortes terminal, which has a capacity of 20 Mbpd; and
|
•
|
closed the acquisition of crude oil and refined product storage and pipeline assets in Los Angeles, California (the "LA Storage and Handling Assets") owned by subsidiaries of Tesoro, for a total consideration of $500 million.
|
•
|
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;
|
•
|
increase throughput volumes on our natural gas system through the connection of new wells and addition of compression to existing wells; 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 viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
|
Years Ended December 31,
|
||||||||||
|
2015 (a)
|
|
2014 (a)
|
|
2013 (a)
|
||||||
Revenues
|
|
|
|
|
|
||||||
Gathering
|
$
|
339
|
|
|
$
|
135
|
|
|
$
|
90
|
|
Processing
|
278
|
|
|
23
|
|
|
—
|
|
|||
Terminalling and Transportation (b)
|
495
|
|
|
442
|
|
|
223
|
|
|||
Total Revenues
|
1,112
|
|
|
600
|
|
|
313
|
|
|||
Costs and Expenses
|
|
|
|
|
|
||||||
Operating and maintenance expenses, net (c)
|
411
|
|
|
265
|
|
|
172
|
|
|||
General and administrative expenses
|
102
|
|
|
74
|
|
|
32
|
|
|||
Depreciation and amortization expenses
|
179
|
|
|
78
|
|
|
46
|
|
|||
Net (gain) loss on asset disposals and impairments
|
1
|
|
|
(4
|
)
|
|
—
|
|
|||
Total Costs and Expenses
|
693
|
|
|
413
|
|
|
250
|
|
|||
Operating Income
|
419
|
|
|
187
|
|
|
63
|
|
|||
Interest and financing costs, net
|
(150
|
)
|
|
(109
|
)
|
|
(39
|
)
|
|||
Equity in earnings of unconsolidated affiliates
|
7
|
|
|
1
|
|
|
—
|
|
|||
Earnings Before Income Taxes
|
276
|
|
|
79
|
|
|
24
|
|
|||
Income tax expense
|
1
|
|
|
—
|
|
|
—
|
|
|||
Net Earnings
|
275
|
|
|
79
|
|
|
24
|
|
|||
|
|
|
|
|
|
||||||
Loss attributable to Predecessors
|
17
|
|
|
23
|
|
|
56
|
|
|||
Net earnings attributable to noncontrolling interest
|
(20
|
)
|
|
(3
|
)
|
|
—
|
|
|||
Net earnings attributable to Partners
|
272
|
|
|
99
|
|
|
80
|
|
|||
General partner’s interest in net earnings, including incentive distribution rights
|
(73
|
)
|
|
(43
|
)
|
|
(12
|
)
|
|||
Limited Partners’ Interest in Net Earnings
|
$
|
199
|
|
|
$
|
56
|
|
|
$
|
68
|
|
|
|
|
|
|
|
||||||
Net Earnings per Limited Partner Unit:
|
|
|
|
|
|
||||||
Common - basic
|
$
|
2.33
|
|
|
$
|
0.96
|
|
|
$
|
1.48
|
|
Common - diluted
|
$
|
2.33
|
|
|
$
|
0.96
|
|
|
$
|
1.47
|
|
Subordinated - basic and diluted
|
$
|
—
|
|
|
$
|
0.62
|
|
|
$
|
1.35
|
|
|
|
|
|
|
|
||||||
Weighted Average Limited Partner Units Outstanding:
|
|
|
|
|
|
||||||
Common units - basic
|
84.7
|
|
|
54.2
|
|
|
31.5
|
|
|||
Common units - diluted
|
84.8
|
|
|
54.2
|
|
|
31.6
|
|
|||
Subordinated units - basic and diluted
|
—
|
|
|
5.6
|
|
|
15.3
|
|
|
Years Ended December 31,
|
||||||||||
|
2015 (a)
|
|
2014 (a)
|
|
2013 (a)
|
||||||
EBITDA
|
$
|
621
|
|
|
$
|
287
|
|
|
$
|
156
|
|
Adjusted EBITDA
|
$
|
636
|
|
|
$
|
318
|
|
|
$
|
168
|
|
Distributable Cash Flow
|
$
|
422
|
|
|
$
|
220
|
|
|
$
|
126
|
|
|
|
|
|
|
|
||||||
Reconciliation of Net Earnings to EBITDA, Adjusted EBITDA and Distributable Cash Flow:
|
|
|
|
|
|
||||||
Net earnings
|
$
|
275
|
|
|
$
|
79
|
|
|
$
|
24
|
|
Loss attributable to Predecessor
|
17
|
|
|
23
|
|
|
56
|
|
|||
Depreciation and amortization expenses, net of Predecessor expense
|
178
|
|
|
76
|
|
|
37
|
|
|||
Interest and financing costs, net of capitalized interest
|
150
|
|
|
109
|
|
|
39
|
|
|||
Income tax expense
|
1
|
|
|
—
|
|
|
—
|
|
|||
EBITDA
|
621
|
|
|
287
|
|
|
156
|
|
|||
Gain on sale of Boise Terminal (d)
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
Acquisition costs included in general and administrative expenses (e)
|
2
|
|
|
19
|
|
|
7
|
|
|||
Billing of deficiency payments (f)
|
13
|
|
|
10
|
|
|
—
|
|
|||
Inspection and maintenance capital expenses associated with the Northwest Products System (g)
|
—
|
|
|
7
|
|
|
5
|
|
|||
Adjusted EBITDA
|
636
|
|
|
318
|
|
|
168
|
|
|||
Interest and financing costs, net (h)
|
(150
|
)
|
|
(86
|
)
|
|
(39
|
)
|
|||
Maintenance capital expenditures (i)
|
(54
|
)
|
|
(44
|
)
|
|
(14
|
)
|
|||
Other adjustments for noncontrolling interest (j)
|
(21
|
)
|
|
8
|
|
|
—
|
|
|||
Net earnings attributable to noncontrolling interest (k)
|
(18
|
)
|
|
(3
|
)
|
|
—
|
|
|||
Reimbursement for maintenance capital expenditures (i)
|
9
|
|
|
7
|
|
|
5
|
|
|||
Other non-cash operating activities
|
20
|
|
|
10
|
|
|
6
|
|
|||
Proceeds from sale of assets
|
—
|
|
|
10
|
|
|
—
|
|
|||
Distributable Cash Flow
|
422
|
|
|
220
|
|
|
126
|
|
|||
Pro forma adjustment for acquisition of noncontrolling interest (l)
|
36
|
|
|
(1
|
)
|
|
—
|
|
|||
Pro Forma Distributable Cash Flow
|
$
|
458
|
|
|
$
|
219
|
|
|
$
|
126
|
|
|
|
|
|
|
|
||||||
Reconciliation of Net Cash from Operating Activities to EBITDA:
|
|
|
|
|
|
||||||
Net cash from operating activities
|
$
|
459
|
|
|
$
|
166
|
|
|
$
|
86
|
|
Interest and financing costs, net
|
150
|
|
|
109
|
|
|
39
|
|
|||
Changes in assets and liabilities
|
14
|
|
|
(5
|
)
|
|
(12
|
)
|
|||
Income tax expense
|
1
|
|
|
—
|
|
|
—
|
|
|||
Other non-cash operating activities
|
(18
|
)
|
|
(8
|
)
|
|
(4
|
)
|
|||
Predecessor impact
|
16
|
|
|
21
|
|
|
47
|
|
|||
Net gain on asset disposals and impairments
|
(1
|
)
|
|
4
|
|
|
—
|
|
|||
EBITDA
|
$
|
621
|
|
|
$
|
287
|
|
|
$
|
156
|
|
(a)
|
Includes the historical results related to the Partnership and Predecessors for the years ended
December 31, 2015
,
2014
and
2013
.
|
(b)
|
Our Predecessors did not record revenue for transactions with Tesoro in the Terminalling and Transportation segment for assets acquired from Tesoro for the periods presented prior to the effective date of each acquisition with the exception of the RCA tariffs charged to Tesoro on the refined products pipeline included in the West Coast Logistics Assets Acquisition.
|
(c)
|
Operating and maintenance expenses include net imbalance settlement gains of
$8 million
,
$17 million
and
$8 million
for the years ended
December 31, 2015
,
2014
and
2013
, respectively. Also includes reimbursements primarily related to pressure testing and repairs and maintenance costs pursuant to the Amended Omnibus Agreement and the Carson Assets Indemnity Agreement of
$34 million
,
$26 million
and
$4 million
in the years ended
December 31, 2015
,
2014
and
2013
, respectively.
|
(d)
|
Includes a gain of $5 million for the year ended December 31, 2014, resulting from the sale of our Boise terminal.
|
(e)
|
Reflects acquisition costs included in general and administrative expenses primarily related to the Rockies Natural Gas Business acquisition in 2015 and 2014 and the Northwest Products System acquisition in 2013.
|
(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 2015 and 2014, we invoiced QEP Field Services, LLC customers for deficiency payments. We did not recognize
$13 million
and
$10 million
of revenue for 2015 and 2014, respectively; however, we are 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)
|
Includes costs for detailed inspection and maintenance program on the Northwest Products System, which improved the integrity of the Northwest Products Pipeline to meet the intent of the compliance order.
|
(h)
|
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.
|
(i)
|
Maintenance capital expenditures include tank restoration costs and reimbursements, and 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.
|
(j)
|
Adjustments represent cash distributions in excess of (or less than) our controlling interest in income and depreciation as well as other adjustments for depreciation and maintenance capital expenditures applicable to the noncontrolling interest obtained in the Rockies Natural Gas Business Acquisition.
|
(k)
|
Excludes
$2 million
of undistributed QEPM earnings prior to the closing of the merger of QEPM with TLLP, as discussed further in Note 2 to our combined consolidated financial statements in Item 8, for the year ended
December 31, 2015
, that unitholders of QEPM were entitled to receive, but TLLP unitholders received as a result of the merger.
|
(l)
|
Reflects the adjustment to include the noncontrolling interest in QEPM as controlling interest based on the pro forma assumption that the merger occurred on
December 2, 2014
.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues
|
|
|
|
|
|
||||||
Gas gathering revenues (a)
|
$
|
170
|
|
|
$
|
11
|
|
|
$
|
—
|
|
Crude oil gathering pipeline revenues
|
123
|
|
|
66
|
|
|
40
|
|
|||
Crude oil gathering trucking revenues
|
46
|
|
|
58
|
|
|
50
|
|
|||
Total Revenues
|
339
|
|
|
135
|
|
|
90
|
|
|||
Costs and Expenses
|
|
|
|
|
|
||||||
Operating and maintenance expenses (b)
|
119
|
|
|
72
|
|
|
49
|
|
|||
General and administrative expenses
|
10
|
|
|
5
|
|
|
3
|
|
|||
Depreciation and amortization expenses
|
67
|
|
|
11
|
|
|
4
|
|
|||
Loss on asset disposals
|
1
|
|
|
—
|
|
|
—
|
|
|||
Total Costs and Expenses
|
197
|
|
|
88
|
|
|
56
|
|
|||
Gathering Segment Operating Income
|
$
|
142
|
|
|
$
|
47
|
|
|
$
|
34
|
|
Volumes
|
|
|
|
|
|
||||||
Gas gathering volume (thousands of MMBtu/d)
|
1,077
|
|
|
1,046
|
|
|
—
|
|
|||
Average gas gathering revenue per MMBtu
|
$
|
0.43
|
|
|
$
|
0.41
|
|
|
$
|
—
|
|
Crude oil gathering pipeline throughput (bpd)
|
187,836
|
|
|
123,355
|
|
|
85,572
|
|
|||
Average crude oil gathering pipeline revenue per barrel
|
$
|
1.79
|
|
|
$
|
1.46
|
|
|
$
|
1.27
|
|
Crude oil gathering trucking (bpd)
|
38,461
|
|
|
49,339
|
|
|
44,363
|
|
|||
Average crude oil gathering trucking revenue per barrel
|
$
|
3.25
|
|
|
$
|
3.23
|
|
|
$
|
3.10
|
|
(a)
|
Natural gas gathering revenues and volumes relate to the operations acquired in the Rockies Natural Gas Business Acquisition.
|
(b)
|
Operating and maintenance expenses include net imbalance settlement gains of
$2 million
,
$7 million
and
$2 million
in the years ended
December 31, 2015
,
2014
and
2013
, respectively.
|
|
Years Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Revenues
|
|
|
|
||||
NGL processing revenues
|
$
|
96
|
|
|
$
|
7
|
|
Fee-based processing revenues
|
107
|
|
|
6
|
|
||
Other processing revenues
|
75
|
|
|
10
|
|
||
Total Revenues
|
278
|
|
|
23
|
|
||
Costs and Expenses
|
|
|
|
||||
Operating and maintenance expenses
|
125
|
|
|
12
|
|
||
General and administrative expenses
|
4
|
|
|
1
|
|
||
Depreciation and amortization expenses
|
44
|
|
|
4
|
|
||
Total Costs and Expenses
|
173
|
|
|
17
|
|
||
Processing Segment Operating Income
|
$
|
105
|
|
|
$
|
6
|
|
Volumes
|
|
|
|
|
|
||
NGL processing volumes (bpd)
|
7,594
|
|
|
6,532
|
|
||
Average “keep-whole” fee per barrel of NGLs
|
$
|
34.46
|
|
|
$
|
35.51
|
|
Fee-based processing volumes (thousands of MMBtu/d)
|
743
|
|
|
693
|
|
||
Average fee-based processing revenue per MMBtu
|
$
|
0.39
|
|
|
$
|
0.30
|
|
•
|
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; and
|
•
|
25
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.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues (a)
|
|
|
|
|
|
||||||
Terminalling revenues
|
$
|
377
|
|
|
$
|
333
|
|
|
$
|
184
|
|
Pipeline transportation revenues
|
118
|
|
|
109
|
|
|
39
|
|
|||
Total Revenues
|
495
|
|
|
442
|
|
|
223
|
|
|||
Costs and Expenses
|
|
|
|
|
|
|
|||||
Operating and maintenance expenses (b)
|
167
|
|
|
181
|
|
|
123
|
|
|||
General and administrative expenses
|
34
|
|
|
29
|
|
|
12
|
|
|||
Depreciation and amortization expenses
|
68
|
|
|
63
|
|
|
42
|
|
|||
Gain on asset disposals and impairments
|
—
|
|
|
(4
|
)
|
|
—
|
|
|||
Total Costs and Expenses
|
269
|
|
|
269
|
|
|
177
|
|
|||
Terminalling and Transportation Segment Operating Income
|
$
|
226
|
|
|
$
|
173
|
|
|
$
|
46
|
|
Volumes (bpd)
|
|
|
|
|
|
|
|||||
Terminalling throughput (c)
|
934,697
|
|
|
917,280
|
|
|
738,665
|
|
|||
Average terminalling revenue per barrel
|
$
|
1.11
|
|
|
$
|
1.00
|
|
|
$
|
0.69
|
|
Pipeline transportation throughput (c)
|
824,710
|
|
|
821,716
|
|
|
205,136
|
|
|||
Average pipeline transportation revenue per barrel (c)
|
$
|
0.39
|
|
|
$
|
0.36
|
|
|
$
|
0.52
|
|
(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.
|
(b)
|
Operating and maintenance expenses include net imbalance settlement gains of
$4 million
,
$10 million
and
$6 million
in the years ended
December 31, 2015
,
2014
and
2013
, respectively.
|
(c)
|
Volumes for all periods presented include both affiliate and third-party throughput including predecessor activity, as applicable, with the exception of transportation volumes on the pipeline assets acquired in the Los Angeles Logistics Assets Acquisition, which were not separately reported by Tesoro prior to the acquisition date. Therefore, related 2013 pipeline volume and revenue per barrel information has not been adjusted to include the activity prior to December 6, 2013.
|
Quarter Ended
|
|
Total Quarterly Distribution Per Unit
|
|
Total Quarterly Distribution Per Unit, Annualized
|
|
Total Cash Distribution
(in millions)
|
|
Date of Distribution
|
||||||
December 31, 2015
|
|
$
|
0.7800
|
|
|
$
|
3.12
|
|
|
$
|
98
|
|
|
February 12, 2016
|
September 30, 2015
|
|
0.7500
|
|
|
3.00
|
|
|
86
|
|
|
November 13, 2015
|
|||
June 30, 2015
|
|
0.7225
|
|
|
2.89
|
|
|
81
|
|
|
August 14, 2015
|
|||
March 31, 2015
|
|
0.6950
|
|
|
2.78
|
|
|
70
|
|
|
May 15, 2015
|
|||
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
|
Debt, including current maturities:
|
December 31, 2015
|
||
Revolving Credit Facility
|
$
|
305
|
|
TLLP Term Loan
|
250
|
|
|
5.500% Senior Notes due 2019
|
500
|
|
|
5.875% Senior Notes due 2020
|
470
|
|
|
6.125% Senior Notes due 2021
|
550
|
|
|
6.250% Senior Notes due 2022
|
800
|
|
|
Capital lease obligations
|
8
|
|
|
Total Debt
|
2,883
|
|
|
Unamortized Issuance Costs (a)
|
(39
|
)
|
|
Debt, Net of Unamortized Issuance Costs
|
$
|
2,844
|
|
(a)
|
Includes an unamortized premium associated with our 5.875% Senior Notes due 2020 of
$4 million
as of
December 31, 2015
.
|
Credit Facility
|
|
30 day Eurodollar (LIBOR) Rate
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
|
Commitment Fee
(unused portion)
|
Revolving Credit Facility (a)
|
|
0.43%
|
|
2.50%
|
|
3.50%
|
|
1.50%
|
|
0.50%
|
(a)
|
We have the option to elect if the borrowings will bear interest at either a base rate plus the baser rate margin, or a Eurodollar rate, for the applicable period, plus the Eurodollar margin at the time of the borrowing. The applicable margin varies based upon a certain leverage ratio, as defined by the Revolving Credit Facility. Letters of credit outstanding under the Revolving Credit Facility incur fees at the Eurodollar margin rate.
|
•
|
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.
|
Credit Facility
|
|
30 day Eurodollar (LIBOR) Rate
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
Unsecured Term Loan Facility ($250 million) (b)
|
|
0.35%
|
|
2.75%
|
|
3.50%
|
|
1.75%
|
(b)
|
We can elect the interest rate to apply to the Unsecured Term Loan Facility between a base rate plus the base rate margin, or a Eurodollar rate, for the applicable term, plus the Eurodollar margin at the time of borrowing.
|
|
Years Ended December 31,
|
||||||||||
|
2015 (a)
|
|
2014 (a)
|
|
2013 (a)
|
||||||
Cash Flows From (Used In):
|
|
|
|
|
|
||||||
Operating Activities
|
$
|
459
|
|
|
$
|
166
|
|
|
$
|
86
|
|
Investing Activities
|
(316
|
)
|
|
(2,673
|
)
|
|
(394
|
)
|
|||
Financing Activities
|
(146
|
)
|
|
2,503
|
|
|
312
|
|
|||
Increase (Decrease) in Cash and Cash Equivalents
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
|
$
|
4
|
|
(a)
|
Includes the historical results related to the Partnership and Predecessors for the years ended December 31, 2015, 2014 and 2013.
|
|
Total Project Expected Capital Expenditures
|
|
Actual 2015 Capital Expenditures
|
||||
Connolly Gathering System (a)
|
$
|
148
|
|
|
$
|
100
|
|
Anacortes Light Products Truck Rack (b)
|
23
|
|
|
12
|
|
||
Southern California Distribution System (c)
|
22
|
|
|
12
|
|
(a)
|
The Connolly Gathering System gathers crude oil from various points in Dunn County, North Dakota for delivery at the existing Connolly Station and has a capacity of approximately 60,000 bpd. The project was substantially completed by December 2015.
|
(b)
|
A new light products truck rack at the site of the existing Anacortes terminal acquired as part of the West Coast Logistics Assets, which added approximately 8,000 barrels per day of additional gasoline and diesel throughput capacity. The project was operational in November 2015. The total capitalized project was $30 million, of which
$23 million
was cash spending. Additionally, we recognized an equity contribution of $7 million from Tesoro related to Tesoro’s full construction cost of $30 million.
|
(c)
|
Projects to expand and optimize the southern California distribution system increase throughput and expand ancillary service capabilities.
|
|
|
Total Project Expected Capital Expenditures
|
|
Actual 2015 Capital Expenditures
|
||
In Process:
|
|
|
|
|
||
Uinta Compression (a)
|
|
$ 50 - 60
|
|
$
|
—
|
|
High Plains Pipeline Expansion (b)
|
|
40 - 50
|
|
7
|
|
|
Charging Eagle Gathering System (c)
|
|
40 - 50
|
|
—
|
|
|
Bakken Area Storage Hub (d)
|
|
25 - 30
|
|
21
|
|
|
Under Development:
|
|
|
|
|
||
Los Angeles Refinery Interconnect Pipeline System (e)
|
|
$ 175 - 200
|
|
$
|
—
|
|
(a)
|
Projects to increase compression for our Uinta natural gas gathering systems and expand our gathering system in the Uinta basin.
|
(b)
|
Projects to expand crude oil gathering throughput capacity on the High Plains Pipeline in McKenzie County, North Dakota.
|
(c)
|
The construction of the Charging Eagle Gathering System, a crude oil and produced water gathering and treating system in eastern Dunn County, North Dakota. This project has been deferred due to current commodity market conditions.
|
(d)
|
The construction of the second phase of the Bakken Area Storage Hub provides storage for the Bakken region with tanks located in two strategic areas of the basin. It currently has approximately
780,000
barrels of storage capacity and is expected to grow to over 1 million barrels of capacity.
|
(e)
|
The pipeline interconnect project at the Los Angeles refinery is designed to improve the flexibility of gasoline and diesel yields and reduce carbon dioxide emissions. The proposed project is subject to final Board approval, project scoping, engineering and regulatory approval.
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term debt obligations (a)
|
$
|
155
|
|
|
$
|
155
|
|
|
$
|
155
|
|
|
$
|
955
|
|
|
$
|
832
|
|
|
$
|
1,467
|
|
|
$
|
3,719
|
|
Capital lease obligations (b)
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
7
|
|
|
12
|
|
|||||||
Operating lease obligations (c)
|
12
|
|
|
10
|
|
|
9
|
|
|
8
|
|
|
7
|
|
|
63
|
|
|
109
|
|
|||||||
Other purchase obligations (d)
|
85
|
|
|
84
|
|
|
84
|
|
|
84
|
|
|
84
|
|
|
61
|
|
|
482
|
|
|||||||
Capital expenditure obligations (e)
|
53
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|||||||
Total Contractual Obligations
|
$
|
306
|
|
|
$
|
250
|
|
|
$
|
249
|
|
|
$
|
1,048
|
|
|
$
|
924
|
|
|
$
|
1,598
|
|
|
$
|
4,375
|
|
(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, and the Secondment Agreement. Our Amended Omnibus Agreement remains in effect between the applicable parties until a change in control of the Partnership. As we are unable to estimate the termination of the omnibus agreement, we have included the fees for each of the five years following
December 31, 2015
for the Amended Omnibus Agreement for disclosure purposes in the table above.
|
(e)
|
Minimum contractual spending requirements for certain capital projects.
|
|
Years Ended December 31,
|
||||||||||
|
2015 (a)
|
|
2014 (a)
|
|
2013 (a)
|
||||||
|
(In millions, except per unit amounts)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Affiliate
|
$
|
615
|
|
|
$
|
497
|
|
|
$
|
273
|
|
Third-party
|
497
|
|
|
103
|
|
|
40
|
|
|||
Total Revenues
|
1,112
|
|
|
600
|
|
|
313
|
|
|||
Costs and Expenses:
|
|
|
|
|
|
||||||
Operating and maintenance expenses
|
451
|
|
|
308
|
|
|
184
|
|
|||
Imbalance settlement gains, net and reimbursements
|
(40
|
)
|
|
(43
|
)
|
|
(12
|
)
|
|||
General and administrative expenses
|
102
|
|
|
74
|
|
|
32
|
|
|||
Depreciation and amortization expenses
|
179
|
|
|
78
|
|
|
46
|
|
|||
Loss (gain) on asset disposals and impairments
|
1
|
|
|
(4
|
)
|
|
—
|
|
|||
Total Costs and Expenses
|
693
|
|
|
413
|
|
|
250
|
|
|||
Operating Income
|
419
|
|
|
187
|
|
|
63
|
|
|||
Interest and financing costs, net
|
(150
|
)
|
|
(109
|
)
|
|
(39
|
)
|
|||
Equity in earnings of unconsolidated affiliates
|
7
|
|
|
1
|
|
|
—
|
|
|||
Earnings Before Income Taxes
|
276
|
|
|
79
|
|
|
24
|
|
|||
Income tax expense
|
1
|
|
|
—
|
|
|
—
|
|
|||
Net Earnings
|
$
|
275
|
|
|
$
|
79
|
|
|
$
|
24
|
|
|
|
|
|
|
|
||||||
Loss attributable to Predecessors
|
$
|
17
|
|
|
$
|
23
|
|
|
$
|
56
|
|
Net earnings attributable to noncontrolling interest
|
(20
|
)
|
|
(3
|
)
|
|
—
|
|
|||
Net earnings attributable to partners
|
272
|
|
|
99
|
|
|
80
|
|
|||
General partner’s interest in net earnings, including incentive distribution rights
|
(73
|
)
|
|
(43
|
)
|
|
(12
|
)
|
|||
Limited partners’ interest in net earnings
|
$
|
199
|
|
|
$
|
56
|
|
|
$
|
68
|
|
|
|
|
|
|
|
||||||
Net earnings per limited partner unit:
|
|
|
|
|
|
||||||
Common - basic
|
$
|
2.33
|
|
|
$
|
0.96
|
|
|
$
|
1.48
|
|
Common - diluted
|
$
|
2.33
|
|
|
$
|
0.96
|
|
|
$
|
1.47
|
|
Subordinated - basic and diluted
|
$
|
—
|
|
|
$
|
0.62
|
|
|
$
|
1.35
|
|
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
||||||
Common units - basic
|
84.7
|
|
|
54.2
|
|
|
31.5
|
|
|||
Common units - diluted
|
84.8
|
|
|
54.2
|
|
|
31.6
|
|
|||
Subordinated units - basic and diluted
|
—
|
|
|
5.6
|
|
|
15.3
|
|
|||
|
|
|
|
|
|
||||||
Cash distributions paid per unit
|
$
|
2.8350
|
|
|
$
|
2.4125
|
|
|
$
|
2.0175
|
|
(a)
|
All periods include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
|
December 31,
|
||||||
|
2015
|
|
2014 (a)
|
||||
|
(In millions, except unit amounts)
|
||||||
ASSETS
|
|||||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
16
|
|
|
$
|
19
|
|
Receivables, net
|
|
|
|
||||
Trade
|
139
|
|
|
122
|
|
||
Affiliate
|
85
|
|
|
69
|
|
||
Other
|
—
|
|
|
18
|
|
||
Prepayments and other
|
12
|
|
|
7
|
|
||
Total Current Assets
|
252
|
|
|
235
|
|
||
Net Property, Plant, and Equipment
|
3,450
|
|
|
3,343
|
|
||
Acquired Intangibles, net
|
976
|
|
|
973
|
|
||
Goodwill
|
130
|
|
|
164
|
|
||
Investments in Unconsolidated Affiliates
|
58
|
|
|
57
|
|
||
Other Noncurrent Assets
|
26
|
|
|
30
|
|
||
Total Assets
|
$
|
4,892
|
|
|
$
|
4,802
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|||||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
|
|
|
||||
Trade
|
$
|
83
|
|
|
$
|
141
|
|
Affiliate
|
48
|
|
|
53
|
|
||
Accrued interest and financing costs
|
31
|
|
|
28
|
|
||
Other current liabilities
|
59
|
|
|
68
|
|
||
Total Current Liabilities
|
221
|
|
|
290
|
|
||
Other Noncurrent Liabilities
|
49
|
|
|
45
|
|
||
Debt, Net of Unamortized Issuance Costs
|
2,844
|
|
|
2,544
|
|
||
Total Liabilities
|
3,114
|
|
|
2,879
|
|
||
Commitments and Contingencies (Note 11)
|
|
|
|
|
|
||
Equity
|
|
|
|
||||
Equity of Predecessors
|
—
|
|
|
33
|
|
||
Common unitholders: 93,478,326
units issued and outstanding (80,125,930 in 2014)
|
1,707
|
|
|
1,474
|
|
||
General partner: 1,900,515 units issued and outstanding (1,631,448 in 2014)
|
(13
|
)
|
|
(19
|
)
|
||
Noncontrolling interest
|
84
|
|
|
435
|
|
||
Total Equity
|
1,778
|
|
|
1,923
|
|
||
Total Liabilities and Equity
|
$
|
4,892
|
|
|
$
|
4,802
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
|
|
|
|
Partnership
|
|
|
|
|
||||||||||||||||
|
Equity of Predecessors (a)
|
|
|
Common
|
|
Subordinated
|
|
General Partner
|
|
Non-controlling Interest
|
|
Total
|
||||||||||||
|
(In millions)
|
|||||||||||||||||||||||
Balance at December 31, 2012
|
$
|
26
|
|
|
|
$
|
153
|
|
|
$
|
(144
|
)
|
|
$
|
(27
|
)
|
|
$
|
—
|
|
|
$
|
8
|
|
Sponsor contributions of equity to the Predecessors
|
39
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
||||||
Sponsor contribution of assets acquired to the Predecessors
|
731
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
731
|
|
||||||
Loss attributable to Predecessors
|
(56
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
||||||
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 earnings excluding loss attributable to Predecessors
|
—
|
|
|
|
46
|
|
|
22
|
|
|
12
|
|
|
—
|
|
|
80
|
|
||||||
Other
|
—
|
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||
Balance at December 31, 2013
|
$
|
57
|
|
|
|
$
|
459
|
|
|
$
|
(161
|
)
|
|
$
|
(53
|
)
|
|
$
|
—
|
|
|
$
|
302
|
|
Sponsor contributions of equity to the Predecessors
|
27
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||||
Loss attributable to Predecessors
|
(23
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
||||||
Net liabilities not assumed by Tesoro Logistics LP
|
1
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Allocation of net assets acquired by the unitholders
|
(29
|
)
|
|
|
28
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Equity offering, net of issuance costs
|
—
|
|
|
|
1,449
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
1,478
|
|
||||||
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 earnings excluding loss attributable to Predecessors
|
—
|
|
|
|
43
|
|
|
13
|
|
|
43
|
|
|
3
|
|
|
102
|
|
||||||
Noncontrolling interest acquired
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
432
|
|
|
432
|
|
||||||
Other
|
—
|
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Balance at December 31, 2014
|
$
|
33
|
|
|
|
$
|
1,474
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
435
|
|
|
$
|
1,923
|
|
Sponsor contributions of equity to the Predecessors
|
20
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||||
Loss attributable to Predecessors
|
(17
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
||||||
Net liabilities not assumed by Tesoro Logistics LP
|
3
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Allocation of net assets acquired by the unitholders
|
(39
|
)
|
|
|
37
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||
Equity offering, net of issuance costs
|
—
|
|
|
|
95
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
99
|
|
||||||
Quarterly distributions to unitholders and general partner
|
—
|
|
|
|
(240
|
)
|
|
—
|
|
|
(68
|
)
|
|
(22
|
)
|
|
(330
|
)
|
||||||
Distributions to unitholders and general partner related to acquisitions (b)
|
—
|
|
|
|
(235
|
)
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(250
|
)
|
||||||
Contributions
|
—
|
|
|
|
22
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
32
|
|
||||||
Net earnings excluding loss attributable to Predecessors
|
—
|
|
|
|
199
|
|
|
—
|
|
|
73
|
|
|
20
|
|
|
292
|
|
||||||
QEPM Merger
|
—
|
|
|
|
351
|
|
|
—
|
|
|
—
|
|
|
(351
|
)
|
|
—
|
|
||||||
Other
|
—
|
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
6
|
|
||||||
Balance at December 31, 2015
|
$
|
—
|
|
|
|
$
|
1,707
|
|
|
$
|
—
|
|
|
$
|
(13
|
)
|
|
$
|
84
|
|
|
$
|
1,778
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
(b)
|
Distributions to unitholders and general partner include
$250 million
,
$243 million
and
$1.1 billion
in cash payments for acquisitions from Tesoro during 2015, 2014 and 2013, 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
$211 million
,
$214 million
and
$431 million
in our equity balance during 2015, 2014 and 2013, respectively.
|
|
Years Ended December 31,
|
||||||||||
|
2015 (a)
|
|
2014 (a)
|
|
2013 (a)
|
||||||
|
(In millions)
|
||||||||||
Cash Flows From (Used In) Operating Activities:
|
|
|
|
|
|
||||||
Net earnings
|
$
|
275
|
|
|
$
|
79
|
|
|
$
|
24
|
|
Adjustments to reconcile net earnings to net cash from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expenses
|
179
|
|
|
78
|
|
|
46
|
|
|||
Amortization of debt issuance costs
|
8
|
|
|
6
|
|
|
2
|
|
|||
Unit-based compensation expense
|
6
|
|
|
2
|
|
|
2
|
|
|||
Other non-cash operating activities
|
5
|
|
|
(5
|
)
|
|
—
|
|
|||
Changes in receivables
|
(21
|
)
|
|
(8
|
)
|
|
(48
|
)
|
|||
Changes in other current assets
|
(9
|
)
|
|
10
|
|
|
(2
|
)
|
|||
Changes in current liabilities
|
(7
|
)
|
|
8
|
|
|
50
|
|
|||
Changes in other noncurrent assets and liabilities
|
23
|
|
|
(4
|
)
|
|
12
|
|
|||
Net cash from operating activities
|
459
|
|
|
166
|
|
|
86
|
|
|||
Cash Flows From (Used In) Investing Activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(310
|
)
|
|
(204
|
)
|
|
(79
|
)
|
|||
Acquisitions
|
(6
|
)
|
|
(2,479
|
)
|
|
(315
|
)
|
|||
Proceeds from sale of assets
|
—
|
|
|
10
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(316
|
)
|
|
(2,673
|
)
|
|
(394
|
)
|
|||
Cash Flows From (Used In) Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from debt offering
|
250
|
|
|
1,300
|
|
|
806
|
|
|||
Proceeds from issuance of common units, net of issuance costs
|
95
|
|
|
1,449
|
|
|
701
|
|
|||
Proceeds from issuance of general partner units, net of issuance costs
|
4
|
|
|
29
|
|
|
8
|
|
|||
Quarterly distributions to common and subordinated unitholders
|
(240
|
)
|
|
(148
|
)
|
|
(93
|
)
|
|||
Quarterly distributions to general partner
|
(68
|
)
|
|
(35
|
)
|
|
(9
|
)
|
|||
Distributions to noncontrolling interest
|
(22
|
)
|
|
—
|
|
|
—
|
|
|||
Distributions in connection with acquisitions
|
(250
|
)
|
|
(243
|
)
|
|
(1,129
|
)
|
|||
Borrowings under revolving credit agreement
|
476
|
|
|
646
|
|
|
794
|
|
|||
Repayments under revolving credit agreement
|
(431
|
)
|
|
(386
|
)
|
|
(794
|
)
|
|||
Repayments of senior notes
|
—
|
|
|
(130
|
)
|
|
—
|
|
|||
Sponsor contributions of equity to the Predecessors
|
20
|
|
|
27
|
|
|
39
|
|
|||
Financing costs
|
(2
|
)
|
|
(32
|
)
|
|
(16
|
)
|
|||
Capital contributions by affiliate
|
22
|
|
|
26
|
|
|
5
|
|
|||
Net cash from (used in) financing activities
|
(146
|
)
|
|
2,503
|
|
|
312
|
|
|||
Increase (Decrease) in Cash and Cash Equivalents
|
(3
|
)
|
|
(4
|
)
|
|
4
|
|
|||
Cash and Cash Equivalents, Beginning of Year
|
19
|
|
|
23
|
|
|
19
|
|
|||
Cash and Cash Equivalents, End of Year
|
$
|
16
|
|
|
$
|
19
|
|
|
$
|
23
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
•
|
a common carrier crude oil gathering and transportation system in North Dakota and Montana (the “High Plains System”);
|
•
|
the Williston Gathering System, which consists of a crude oil and natural gas gathering system located in the Williston Basin, North Dakota;
|
•
|
the Uinta Basin Gathering System, which consists of natural gas gathering systems and compression assets located in northeastern Utah;
|
•
|
the Green River System, which consists of an integrated natural gas gathering and transportation system;
|
•
|
the Vermillion Gathering System, which consists of natural gas gathering and compression assets located in Southern Wyoming, northwest Colorado and northeast Utah;
|
•
|
an equity method investment in Three Rivers Gathering, which transports natural gas to our natural gas processing facilities, located in the Uinta Basin; and
|
•
|
an equity method investment in Uintah Basin Field Services, which operates gathering pipeline and gas compression assets located in the southeastern Uinta Basin.
|
•
|
25
crude oil and refined products terminals and storage facilities in the western and midwestern U.S. that are supplied by Tesoro-owned and third-party pipelines, trucks and barges;
|
•
|
four
marine terminals in California that load and unload vessels;
|
•
|
130
miles of pipelines, which transport products and crude oil from Tesoro’s refineries to nearby facilities in Salt Lake City and Los Angeles and a
50%
fee interest in a
16
-mile pipeline that transports jet fuel from Tesoro’s Los Angeles refinery to the Los Angeles International Airport;
|
•
|
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 rail-car unloading facility in Washington;
|
•
|
a petroleum coke handling and storage facility in Los Angeles; and
|
•
|
a regulated common carrier refined products pipeline system connecting Tesoro’s Kenai refinery to terminals in Anchorage, Alaska.
|
•
|
a crude oil and refined products storage tank facility located at Tesoro’s Los Angeles refinery and a
50%
fee interest in a
16
-mile pipeline that transports jet fuel from Tesoro’s Los Angeles refinery to the Los Angeles International Airport (the “Los Angeles Assets”) effective
November 12, 2015
;
|
•
|
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 short term duration of the instruments (less than
four percent
of our trade payables and
one 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.
|
|
December 31, 2015
|
||
Cash
|
$
|
32
|
|
Accounts receivable
|
120
|
|
|
Prepayments and other
|
3
|
|
|
Property, plant and equipment
|
1,695
|
|
|
Intangibles
|
1,008
|
|
|
Goodwill
|
121
|
|
|
Investment in unconsolidated affiliates
|
59
|
|
|
Other noncurrent assets
|
25
|
|
|
Accounts payable
|
(56
|
)
|
|
Other current liabilities
|
(53
|
)
|
|
Other noncurrent liabilities
|
(5
|
)
|
|
Noncontrolling interest
|
(433
|
)
|
|
Total purchase price
|
$
|
2,516
|
|
|
Years Ended December 31,
|
||||||
|
2014 (a)
|
|
2013 (a)
|
||||
|
(In millions, except per unit amounts)
|
||||||
Revenues
|
$
|
936
|
|
|
$
|
689
|
|
Net earnings
|
126
|
|
|
72
|
|
||
Net earnings attributable to partners
|
106
|
|
|
105
|
|
||
|
|
|
|
||||
Net earnings per limited partner unit:
|
|
|
|
||||
Common - basic and diluted
|
$
|
0.77
|
|
|
$
|
1.23
|
|
Subordinated - basic and diluted
|
$
|
1.13
|
|
|
$
|
1.39
|
|
(a)
|
Does not include the historical results related to Predecessors for the years ended
December 31, 2014
and
2013
.
|
|
Years Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(In millions)
|
||||||
Revenues
|
$
|
6
|
|
|
$
|
8
|
|
Total costs and expenses
|
(10
|
)
|
|
(15
|
)
|
||
Net loss
|
$
|
(4
|
)
|
|
$
|
(7
|
)
|
|
Year Ended
December 31, 2013 (a)
|
||
|
(In millions, except per unit amounts)
|
||
Revenues
|
$
|
327
|
|
Net earnings
|
46
|
|
|
Net earnings attributable to partners
|
84
|
|
|
|
|
||
Net earnings per limited partner unit:
|
|
||
Common - basic
|
$
|
1.56
|
|
Common - diluted
|
$
|
1.56
|
|
Subordinated - basic and diluted
|
$
|
1.46
|
|
(a)
|
Does not include the historical results related to Predecessors for the year ended
December 31, 2013
.
|
|
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
|
|
|
||
Amended 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
|
|
|
||
Carson II Storage Services Agreement
|
November 2015
|
|
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.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues
|
$
|
615
|
|
|
$
|
497
|
|
|
$
|
273
|
|
Operating and maintenance expenses
|
118
|
|
|
95
|
|
|
81
|
|
|||
Imbalance settlement gains, net and reimbursements from Tesoro (a)
|
(42
|
)
|
|
(43
|
)
|
|
(12
|
)
|
|||
General and administrative expenses
|
71
|
|
|
39
|
|
|
20
|
|
(a)
|
Includes net imbalance settlement gains of
$8 million
,
$17 million
and
$8 million
in the years ended
December 31, 2015
,
2014
and
2013
, respectively. Also includes reimbursements primarily related to pressure testing and repairs and maintenance costs pursuant to the Amended Omnibus Agreement and the Carson Assets Indemnity Agreement of
$34 million
,
$26 million
and
$4 million
in the years ended
December 31, 2015
,
2014
and
2013
, respectively.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net earnings
|
$
|
275
|
|
|
$
|
79
|
|
|
$
|
24
|
|
Net earnings attributable to noncontrolling interest
|
(20
|
)
|
|
(3
|
)
|
|
—
|
|
|||
Special allocation of net earnings (“Special Allocation”) (a)
|
—
|
|
|
7
|
|
|
—
|
|
|||
Net earnings, excluding noncontrolling interest (b)
|
255
|
|
|
83
|
|
|
24
|
|
|||
General partner’s distributions
|
(6
|
)
|
|
(5
|
)
|
|
(2
|
)
|
|||
General partner’s IDRs (c)
|
(69
|
)
|
|
(41
|
)
|
|
(11
|
)
|
|||
Limited partners’ distributions on common units
|
(259
|
)
|
|
(157
|
)
|
|
(71
|
)
|
|||
Limited partner’s distributions on subordinated units (d)
|
—
|
|
|
(14
|
)
|
|
(32
|
)
|
|||
Distributions greater than earnings
|
$
|
(79
|
)
|
|
$
|
(134
|
)
|
|
$
|
(92
|
)
|
General partner’s earnings:
|
|
|
|
|
|
||||||
Distributions
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
2
|
|
General partners IDRs (c)
|
69
|
|
|
41
|
|
|
11
|
|
|||
Allocation of distributions greater than earnings (b)
|
(18
|
)
|
|
(26
|
)
|
|
(57
|
)
|
|||
Total general partner’s earnings (loss)
|
$
|
57
|
|
|
$
|
20
|
|
|
$
|
(44
|
)
|
Limited partners’ earnings on common units:
|
|
|
|
|
|
||||||
Distributions
|
$
|
259
|
|
|
$
|
157
|
|
|
$
|
71
|
|
Special Allocation
|
—
|
|
|
(7
|
)
|
|
—
|
|
|||
Allocation of distributions greater than earnings
|
(61
|
)
|
|
(98
|
)
|
|
(23
|
)
|
|||
Total limited partners’ earnings on common units
|
$
|
198
|
|
|
$
|
52
|
|
|
$
|
48
|
|
Limited partner’s earnings on subordinated units (d):
|
|
|
|
|
|
||||||
Distributions
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
32
|
|
Allocation of distributions greater than earnings
|
—
|
|
|
(10
|
)
|
|
(12
|
)
|
|||
Total limited partner’s earnings on subordinated units
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
20
|
|
Weighted average limited partner units outstanding:
|
|
|
|
|
|
||||||
Common units - basic
|
84.7
|
|
|
54.2
|
|
|
31.5
|
|
|||
Common unit equivalents
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Common units - diluted
|
84.8
|
|
|
54.2
|
|
|
31.6
|
|
|||
Subordinated units - basic and diluted (d)
|
—
|
|
|
5.6
|
|
|
15.3
|
|
|||
Net earnings per limited partner unit:
|
|
|
|
|
|
|
|||||
Common - basic
|
$
|
2.33
|
|
|
$
|
0.96
|
|
|
$
|
1.48
|
|
Common - diluted
|
$
|
2.33
|
|
|
$
|
0.96
|
|
|
$
|
1.47
|
|
Subordinated - basic and diluted
|
$
|
—
|
|
|
$
|
0.62
|
|
|
$
|
1.35
|
|
(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 TLLP common unitholders for the premium paid in connection with the redemption of the senior notes during the year ended December 31, 2014.
|
(b)
|
In April 2015, the FASB issued ASU 2015-06 concerning historical earnings per unit for master limited partnership drop down transactions. We have revised the historical allocation of general partner earnings to include the Predecessor losses TLLP recognized of
$17 million
,
$23 million
, and
$56 million
during the years ended
December 31, 2015
,
2014
, and
2013
. See Note 1 for additional information on the new guidance.
|
(c)
|
IDRs entitle the general partner to receive increasing percentages, up to
50%
, of quarterly distributions in excess of
$0.388125
per unit per quarter. The amount above reflects earnings distributed to our general partner net of
$10 million
of IDRs for the year ended
December 31, 2015
, waved by TLGP in connection with the Rockies Natural Gas Business Acquisition. See Note 12 for further discussion related to IDRs.
|
(d)
|
On
May 16, 2014
, the 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 earnings were allocated to the subordinated units through May 15, 2014.
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Gathering
|
$
|
1,700
|
|
|
$
|
1,507
|
|
Processing
|
565
|
|
|
539
|
|
||
Terminalling and Transportation
|
1,582
|
|
|
1,517
|
|
||
Other
|
—
|
|
|
27
|
|
||
Property, Plant and Equipment, at Cost
|
3,847
|
|
|
3,590
|
|
||
Accumulated depreciation
|
(397
|
)
|
|
(247
|
)
|
||
Net Property, Plant and Equipment
|
$
|
3,450
|
|
|
$
|
3,343
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Legal
|
$
|
21
|
|
|
$
|
21
|
|
Accrued environmental liabilities
|
21
|
|
|
13
|
|
||
Other
|
17
|
|
|
34
|
|
||
Total Other Current Liabilities
|
$
|
59
|
|
|
$
|
68
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Revolving Credit Facility
|
$
|
305
|
|
|
$
|
260
|
|
Term Loan Facility
|
250
|
|
|
—
|
|
||
5.500% Senior Notes due 2019
|
500
|
|
|
500
|
|
||
5.875% Senior Notes due 2020 (a)
|
470
|
|
|
470
|
|
||
6.125% Senior Notes due 2021
|
550
|
|
|
550
|
|
||
6.250% Senior Notes due 2022
|
800
|
|
|
800
|
|
||
Capital lease obligations
|
8
|
|
|
8
|
|
||
Total Debt
|
2,883
|
|
|
2,588
|
|
||
Unamortized issuance costs (b)
|
(39
|
)
|
|
(44
|
)
|
||
Current maturities
|
—
|
|
|
—
|
|
||
Debt, less current maturities
|
$
|
2,844
|
|
|
$
|
2,544
|
|
(a)
|
Unamortized premium of
$4 million
and
$5 million
associated with these senior notes are included in unamortized issuance costs at
December 31, 2015
and
2014
, respectively.
|
(b)
|
The Company adopted ASU 2015-03 in the first quarter of 2015 and applied changes retrospectively to the prior period presented. See Note 1 for further discussion.
|
Credit Facility
|
|
30 day Eurodollar (LIBOR) Rate
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
|
Commitment Fee
(unused portion)
|
Revolving Credit Facility (a)
|
|
0.43%
|
|
2.50%
|
|
3.50%
|
|
1.50%
|
|
0.50%
|
(a)
|
We have the option to elect if the borrowings will bear interest at either, a base rate plus the base rate margin or a Eurodollar rate, for the applicable period, plus the Eurodollar margin at the time of the borrowing. The applicable margin varies based upon a certain leverage ratio, as defined by the Revolving Credit Facility. Letters of credit outstanding under the Revolving Credit Facility incur fees at the Eurodollar margin rate.
|
•
|
incur additional indebtedness and incur liens on assets to secure certain debt;
|
•
|
pay and make certain restricted payments;
|
•
|
make distributions from its subsidiaries;
|
•
|
dispose of assets in excess of an annual threshold amount;
|
•
|
in the case of our Revolving Credit Facility, make certain amendments, modifications or supplements to organization documents and material contracts;
|
•
|
in the case of the our 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.
|
Credit Facility
|
|
30 day Eurodollar (LIBOR) Rate
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
Unsecured Term Loan Facility ($250 million) (b)
|
|
0.35%
|
|
2.75%
|
|
3.50%
|
|
1.75%
|
(b)
|
We can elect the interest rate to apply to the Unsecured Term Loan Facility between a base rate plus the base rate margin, or a Eurodollar rate, for the applicable term, plus the Eurodollar margin at the time of borrowing.
|
|
December 31, 2015
|
||
2016
|
$
|
1
|
|
2017
|
1
|
|
|
2018
|
1
|
|
|
2019
|
1
|
|
|
2020
|
1
|
|
|
Thereafter
|
7
|
|
|
Total minimum lease payments
|
12
|
|
|
Less amount representing interest
|
(4
|
)
|
|
Capital lease obligations
|
$
|
8
|
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Operating leases
|
$
|
12
|
|
|
$
|
10
|
|
|
$
|
9
|
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
63
|
|
|
$
|
109
|
|
Purchase obligations
|
85
|
|
|
84
|
|
|
84
|
|
|
84
|
|
|
84
|
|
|
61
|
|
|
482
|
|
|||||||
Total
|
$
|
97
|
|
|
$
|
94
|
|
|
$
|
93
|
|
|
$
|
92
|
|
|
$
|
91
|
|
|
$
|
124
|
|
|
$
|
591
|
|
|
Tioga Crude Oil Pipeline Release
|
|
Other Liabilities
|
|
Total
|
||||||
Balance at December 31, 2014
|
$
|
25
|
|
|
$
|
7
|
|
|
$
|
32
|
|
Additions
|
24
|
|
|
1
|
|
|
25
|
|
|||
Expenditures
|
(22
|
)
|
|
(2
|
)
|
|
(24
|
)
|
|||
Balance at December 31, 2015
|
$
|
27
|
|
|
$
|
6
|
|
|
$
|
33
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net earnings attributable to partners
|
$
|
272
|
|
|
$
|
99
|
|
|
$
|
80
|
|
General partner’s IDRs
|
(69
|
)
|
|
(41
|
)
|
|
(11
|
)
|
|||
Special Allocation
|
—
|
|
|
7
|
|
|
—
|
|
|||
Net earnings available to partners
|
$
|
203
|
|
|
$
|
65
|
|
|
$
|
69
|
|
General partner’s ownership interest
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|||
General partner’s allocated interest in net earnings
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
1
|
|
General partner’s IDRs
|
69
|
|
|
41
|
|
|
11
|
|
|||
Allocation of Predecessor impact to general partner interest
|
(17
|
)
|
|
(23
|
)
|
|
(56
|
)
|
|||
Total general partner’s interest in net earnings (loss)
|
$
|
57
|
|
|
$
|
20
|
|
|
$
|
(44
|
)
|
|
Common
|
|
Subordinated
|
|
General Partner
|
|
Total
|
||||
Balance at December 31, 2012
|
20.5
|
|
|
15.3
|
|
|
0.7
|
|
|
36.5
|
|
Issuance in January 2013 used primarily to fund Northwest Products Acquisition
|
9.8
|
|
|
—
|
|
|
0.2
|
|
|
10.0
|
|
Issuance in June 2013 in connection with LA Terminal Assets Acquisition
|
1.4
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
Issuance in November 2013 to fund the LA Logistics Assets Acquisition
|
6.3
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
Issuance in December 2013 in connection with LA Logistics Assets Acquisition
|
1.1
|
|
|
—
|
|
|
0.2
|
|
|
1.3
|
|
Balance at December 31, 2013
|
39.1
|
|
|
15.3
|
|
|
1.1
|
|
|
55.5
|
|
Issuances under ATM Program
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
Conversion in May 2014 of Tesoro’s subordinated units to common units
|
15.3
|
|
|
(15.3
|
)
|
|
—
|
|
|
—
|
|
Issuance in July 2014 in connection with the West Coast Logistics Assets acquisition
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
Issuance in August 2014 used primarily to redeem a portion of our 5.875% Senior Notes due 2020
|
2.1
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
Issuance in October 2014 to fund the Rockies Natural Gas Business Acquisition
|
23.0
|
|
|
—
|
|
|
0.5
|
|
|
23.5
|
|
Unit-based compensation awards
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
Balance at December 31, 2014
|
80.1
|
|
|
—
|
|
|
1.6
|
|
|
81.7
|
|
Issuances under ATM Program
|
1.9
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
Issuance in July 2015 to effect the QEPM Merger (a)
|
7.1
|
|
|
—
|
|
|
—
|
|
|
7.1
|
|
Issuance in November 2015 in connection with the LA Storage and Handling Assets acquisition (b)
|
4.3
|
|
|
—
|
|
|
0.3
|
|
|
4.6
|
|
Unit-based compensation awards
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
Balance at December 31, 2015
|
93.5
|
|
|
—
|
|
|
1.9
|
|
|
95.4
|
|
(a)
|
On July 22, 2015, we issued common units to QEPM unitholders upon completion of the Merger discussed in Note 2.
|
(b)
|
On November 12, 2015, we issued common units to Tesoro and TLGP in connection with the completion of the LA Storage and Handling Assets discussed in Note 2.
|
|
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%
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
General partner’s distributions:
|
|
|
|
|
|
||||||
General partner’s distributions
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
2
|
|
General partner’s IDRs (a)
|
69
|
|
|
41
|
|
|
11
|
|
|||
Total general partner’s distributions
|
$
|
75
|
|
|
$
|
46
|
|
|
$
|
13
|
|
|
|
|
|
|
|
||||||
Limited partners’ distributions:
|
|
|
|
|
|
||||||
Common
|
$
|
259
|
|
|
$
|
157
|
|
|
$
|
71
|
|
Subordinated
|
—
|
|
|
14
|
|
|
32
|
|
|||
Total limited partners’ distributions
|
259
|
|
|
171
|
|
|
103
|
|
|||
Total Cash Distributions
|
$
|
334
|
|
|
$
|
217
|
|
|
$
|
116
|
|
(a)
|
In connection with the Rockies Natural Gas Business Acquisition, our general partner waived its right to
$10 million
of general partner distributions with respect to IDRs during 2015.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Assets received for deposit paid in prior period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
Capital expenditures included in accounts payable at period end
|
32
|
|
|
62
|
|
|
12
|
|
|||
Capital leases and other
|
—
|
|
|
4
|
|
|
5
|
|
|||
Predecessors’ net liabilities not assumed by Tesoro Logistics LP
|
3
|
|
|
1
|
|
|
15
|
|
|||
Receivable from affiliate for capital expenditures
|
6
|
|
|
3
|
|
|
1
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Gathering:
|
|
|
|
|
|
||||||
Affiliate
|
$
|
89
|
|
|
$
|
105
|
|
|
$
|
88
|
|
Third-party
|
250
|
|
|
30
|
|
|
2
|
|
|||
Total Gathering
|
339
|
|
|
135
|
|
|
90
|
|
|||
Processing:
|
|
|
|
|
|
||||||
Affiliate
|
96
|
|
|
7
|
|
|
—
|
|
|||
Third-party
|
182
|
|
|
16
|
|
|
—
|
|
|||
Total Processing
|
278
|
|
|
23
|
|
|
—
|
|
|||
Terminalling and Transportation:
|
|
|
|
|
|
||||||
Affiliate (a)
|
430
|
|
|
385
|
|
|
185
|
|
|||
Third-party
|
65
|
|
|
57
|
|
|
38
|
|
|||
Total Terminalling and Transportation
|
495
|
|
|
442
|
|
|
223
|
|
|||
Total Segment Revenues
|
$
|
1,112
|
|
|
$
|
600
|
|
|
$
|
313
|
|
Segment Operating Income
|
|
|
|
|
|
||||||
Gathering
|
$
|
142
|
|
|
$
|
47
|
|
|
$
|
34
|
|
Processing
|
105
|
|
|
6
|
|
|
—
|
|
|||
Terminalling and Transportation
|
226
|
|
|
173
|
|
|
46
|
|
|||
Total Segment Operating Income
|
473
|
|
|
226
|
|
|
80
|
|
|||
Unallocated general and administrative expenses
|
(54
|
)
|
|
(39
|
)
|
|
(17
|
)
|
|||
Interest and financing costs, net
|
(150
|
)
|
|
(109
|
)
|
|
(39
|
)
|
|||
Equity in earnings of unconsolidated affiliates
|
7
|
|
|
1
|
|
|
—
|
|
|||
Earnings Before Income Taxes
|
$
|
276
|
|
|
$
|
79
|
|
|
$
|
24
|
|
|
|
|
|
|
|
||||||
Capital Expenditures
|
|
|
|
|
|
||||||
Gathering
|
$
|
213
|
|
|
$
|
156
|
|
|
$
|
52
|
|
Processing
|
15
|
|
|
4
|
|
|
—
|
|
|||
Terminalling and Transportation
|
68
|
|
|
90
|
|
|
34
|
|
|||
Total Capital Expenditures
|
$
|
296
|
|
|
$
|
250
|
|
|
$
|
86
|
|
(a)
|
Our Predecessors did not record revenue for transactions with Tesoro in the Terminalling and Transportation segment for assets acquired in the Acquisitions from Tesoro prior to the effective date of each acquisition, except for the RCA tariffs charged to Tesoro on the refined products pipeline included in the acquisition of the West Coast Logistics Assets.
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Identifiable Assets
|
|
|
|
||||
Gathering
|
$
|
1,850
|
|
|
$
|
1,694
|
|
Processing
|
1,619
|
|
|
1,612
|
|
||
Terminalling and Transportation
|
1,402
|
|
|
1,389
|
|
||
Other
|
21
|
|
|
107
|
|
||
Total Identifiable Assets
|
$
|
4,892
|
|
|
$
|
4,802
|
|
|
Quarters
|
|
|
||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Total Year
|
||||||||||
2015
|
(In millions, except per unit amounts)
|
||||||||||||||||||
Total revenues
|
$
|
263
|
|
|
$
|
275
|
|
|
$
|
282
|
|
|
$
|
292
|
|
|
$
|
1,112
|
|
Operating and maintenance expenses
|
98
|
|
|
110
|
|
|
112
|
|
|
131
|
|
|
451
|
|
|||||
Operating income
|
104
|
|
|
105
|
|
|
106
|
|
|
104
|
|
|
419
|
|
|||||
Net earnings
|
70
|
|
|
68
|
|
|
71
|
|
|
66
|
|
|
275
|
|
|||||
Limited partners’ interest in net earnings
|
50
|
|
|
50
|
|
|
53
|
|
|
46
|
|
|
199
|
|
|||||
Net earnings per limited partner unit (a):
|
|
|
|
|
|
|
|
|
|
||||||||||
Common - basic
|
$
|
0.63
|
|
|
$
|
0.60
|
|
|
$
|
0.62
|
|
|
$
|
0.49
|
|
|
$
|
2.33
|
|
Common - diluted
|
$
|
0.63
|
|
|
$
|
0.60
|
|
|
$
|
0.62
|
|
|
$
|
0.49
|
|
|
$
|
2.33
|
|
2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
127
|
|
|
$
|
133
|
|
|
$
|
150
|
|
|
$
|
190
|
|
|
$
|
600
|
|
Operating and maintenance expenses
|
58
|
|
|
67
|
|
|
77
|
|
|
106
|
|
|
308
|
|
|||||
Operating income
|
55
|
|
|
44
|
|
|
56
|
|
|
32
|
|
|
187
|
|
|||||
Net earnings (loss)
|
37
|
|
|
27
|
|
|
28
|
|
|
(13
|
)
|
|
79
|
|
|||||
Limited partners’ interest in net earnings (loss)
|
35
|
|
|
26
|
|
|
20
|
|
|
(25
|
)
|
|
56
|
|
|||||
Net earnings (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
|
|
(a)
|
The sum of four quarters may not equal annual results due to rounding or the quarterly number of shares outstanding.
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
Affiliate
|
$
|
—
|
|
|
$
|
615
|
|
|
$
|
28
|
|
|
$
|
(28
|
)
|
|
$
|
615
|
|
Third-party
|
—
|
|
|
492
|
|
|
5
|
|
|
—
|
|
|
497
|
|
|||||
Total Revenues
|
—
|
|
|
1,107
|
|
|
33
|
|
|
(28
|
)
|
|
1,112
|
|
|||||
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating and maintenance expenses
|
15
|
|
|
463
|
|
|
1
|
|
|
(28
|
)
|
|
451
|
|
|||||
Imbalance settlement gains, net and
reimbursements
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|||||
General and administrative expenses
|
29
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
102
|
|
|||||
Depreciation and amortization expenses
|
1
|
|
|
162
|
|
|
16
|
|
|
—
|
|
|
179
|
|
|||||
Loss on asset disposals and impairments
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Total Costs and Expenses
|
45
|
|
|
659
|
|
|
17
|
|
|
(28
|
)
|
|
693
|
|
|||||
Operating Income (Loss)
|
(45
|
)
|
|
448
|
|
|
16
|
|
|
—
|
|
|
419
|
|
|||||
Interest and financing costs, net
|
—
|
|
|
(140
|
)
|
|
(10
|
)
|
|
—
|
|
|
(150
|
)
|
|||||
Equity in earnings of unconsolidated affiliates
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Equity in earnings of subsidiaries
|
300
|
|
|
3
|
|
|
—
|
|
|
(303
|
)
|
|
—
|
|
|||||
Income tax expense
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Net Earnings
|
$
|
255
|
|
|
$
|
317
|
|
|
$
|
6
|
|
|
$
|
(303
|
)
|
|
$
|
275
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss attributable to Predecessors (a)
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||
Net earnings attributable to noncontrolling interest
|
—
|
|
|
(17
|
)
|
|
(3
|
)
|
|
—
|
|
|
(20
|
)
|
|||||
Net earnings attributable to partners
|
$
|
272
|
|
|
$
|
300
|
|
|
$
|
3
|
|
|
$
|
(303
|
)
|
|
$
|
272
|
|
(a)
|
Amounts attributable to Predecessors have been reflected in the Parent column.
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
Affiliate
|
$
|
6
|
|
|
$
|
491
|
|
|
$
|
2
|
|
|
$
|
(2
|
)
|
|
$
|
497
|
|
Third-party
|
—
|
|
|
103
|
|
|
—
|
|
|
—
|
|
|
103
|
|
|||||
Total Revenues
|
6
|
|
|
594
|
|
|
2
|
|
|
(2
|
)
|
|
600
|
|
|||||
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating and maintenance expenses
|
27
|
|
|
283
|
|
|
—
|
|
|
(2
|
)
|
|
308
|
|
|||||
Imbalance settlement gains, net and
reimbursements
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|||||
General and administrative expenses
|
37
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|||||
Depreciation and amortization expenses
|
2
|
|
|
75
|
|
|
1
|
|
|
—
|
|
|
78
|
|
|||||
Gain on asset disposals and impairments
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Total Costs and Expenses
|
66
|
|
|
348
|
|
|
1
|
|
|
(2
|
)
|
|
413
|
|
|||||
Operating Income (Loss)
|
(60
|
)
|
|
246
|
|
|
1
|
|
|
—
|
|
|
187
|
|
|||||
Interest and financing costs, net
|
—
|
|
|
(105
|
)
|
|
(4
|
)
|
|
—
|
|
|
(109
|
)
|
|||||
Equity in earnings of unconsolidated affiliates
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Equity in earnings (loss) of subsidiaries
|
136
|
|
|
(3
|
)
|
|
—
|
|
|
(133
|
)
|
|
—
|
|
|||||
Net Earnings (Loss)
|
$
|
76
|
|
|
$
|
139
|
|
|
$
|
(3
|
)
|
|
$
|
(133
|
)
|
|
$
|
79
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss attributable to Predecessors (a)
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||
Net earnings attributable to noncontrolling interest
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Net earnings (loss) attributable to partners
|
$
|
99
|
|
|
$
|
136
|
|
|
$
|
(3
|
)
|
|
$
|
(133
|
)
|
|
$
|
99
|
|
(a)
|
Amounts attributable to Predecessors have been reflected in the Parent column.
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
11
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
16
|
|
Receivables, net
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Trade
|
—
|
|
|
138
|
|
|
1
|
|
|
—
|
|
|
139
|
|
|||||
Affiliate
|
5
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Prepayments and other
|
4
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||
Total Current Assets
|
20
|
|
|
228
|
|
|
4
|
|
|
—
|
|
|
252
|
|
|||||
Net property, plant and equipment
|
—
|
|
|
3,087
|
|
|
363
|
|
|
—
|
|
|
3,450
|
|
|||||
Intangibles
|
—
|
|
|
976
|
|
|
—
|
|
|
—
|
|
|
976
|
|
|||||
Goodwill
|
—
|
|
|
111
|
|
|
19
|
|
|
—
|
|
|
130
|
|
|||||
Investment in unconsolidated affiliates
|
—
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|||||
Investments in subsidiaries
|
4,929
|
|
|
284
|
|
|
—
|
|
|
(5,213
|
)
|
|
—
|
|
|||||
Long-term intercompany receivable
|
—
|
|
|
381
|
|
|
—
|
|
|
(381
|
)
|
|
—
|
|
|||||
Other noncurrent assets
|
1
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|||||
Total Assets
|
$
|
4,950
|
|
|
$
|
5,150
|
|
|
$
|
386
|
|
|
$
|
(5,594
|
)
|
|
$
|
4,892
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade
|
$
|
1
|
|
|
$
|
82
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
83
|
|
Affiliate
|
3
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|||||
Accrued interest and financing costs
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|||||
Other current liabilities
|
22
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|||||
Total Current Liabilities
|
57
|
|
|
164
|
|
|
—
|
|
|
—
|
|
|
221
|
|
|||||
Long-term intercompany payable
|
363
|
|
|
—
|
|
|
18
|
|
|
(381
|
)
|
|
—
|
|
|||||
Other noncurrent liabilities
|
—
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|||||
Debt
|
2,836
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
2,844
|
|
|||||
Equity - TLLP
|
1,694
|
|
|
4,929
|
|
|
284
|
|
|
(5,213
|
)
|
|
1,694
|
|
|||||
Equity - Noncontrolling interest
|
—
|
|
|
—
|
|
|
84
|
|
|
—
|
|
|
84
|
|
|||||
Total Liabilities and Equity
|
$
|
4,950
|
|
|
$
|
5,150
|
|
|
$
|
386
|
|
|
$
|
(5,594
|
)
|
|
$
|
4,892
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
19
|
|
Receivables, net
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade
|
—
|
|
|
121
|
|
|
1
|
|
|
—
|
|
|
122
|
|
|||||
Affiliate
|
3
|
|
|
66
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|||||
Other
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|||||
Prepayments and other
|
3
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Total Current Assets
|
6
|
|
|
226
|
|
|
3
|
|
|
—
|
|
|
235
|
|
|||||
Net property, plant and equipment
|
39
|
|
|
2,918
|
|
|
386
|
|
|
—
|
|
|
3,343
|
|
|||||
Intangibles
|
—
|
|
|
973
|
|
|
—
|
|
|
—
|
|
|
973
|
|
|||||
Goodwill
|
—
|
|
|
164
|
|
|
—
|
|
|
—
|
|
|
164
|
|
|||||
Investment in unconsolidated affiliates
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|||||
Investments in subsidiaries
|
4,233
|
|
|
302
|
|
|
—
|
|
|
(4,535
|
)
|
|
—
|
|
|||||
Long-term intercompany receivable
|
—
|
|
|
191
|
|
|
1
|
|
|
(192
|
)
|
|
—
|
|
|||||
Other noncurrent assets
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|||||
Total Assets
|
$
|
4,278
|
|
|
$
|
4,861
|
|
|
$
|
390
|
|
|
$
|
(4,727
|
)
|
|
$
|
4,802
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade
|
$
|
8
|
|
|
$
|
133
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
141
|
|
Affiliate
|
3
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|||||
Accrued interest and financing costs
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|||||
Other current liabilities
|
23
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
68
|
|
|||||
Total Current Liabilities
|
62
|
|
|
228
|
|
|
—
|
|
|
—
|
|
|
290
|
|
|||||
Long-term intercompany payable
|
192
|
|
|
—
|
|
|
—
|
|
|
(192
|
)
|
|
—
|
|
|||||
Other noncurrent liabilities
|
—
|
|
|
43
|
|
|
2
|
|
|
—
|
|
|
45
|
|
|||||
Debt
|
2,536
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
2,544
|
|
|||||
Equity - TLLP
|
1,488
|
|
|
4,233
|
|
|
302
|
|
|
(4,535
|
)
|
|
1,488
|
|
|||||
Equity - Noncontrolling interest
|
—
|
|
|
349
|
|
|
86
|
|
|
—
|
|
|
435
|
|
|||||
Total Liabilities and Equity
|
$
|
4,278
|
|
|
$
|
4,861
|
|
|
$
|
390
|
|
|
$
|
(4,727
|
)
|
|
$
|
4,802
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||
Cash Flows From (Used In) Operating Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash from (used in) operating activities
|
$
|
(34
|
)
|
|
$
|
499
|
|
|
$
|
22
|
|
|
$
|
(28
|
)
|
|
$
|
459
|
|
Cash Flows From (Used In) Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Capital expenditures
|
(4
|
)
|
|
(306
|
)
|
|
—
|
|
|
—
|
|
|
(310
|
)
|
|||||
Acquisitions
|
—
|
|
|
2
|
|
|
(8
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Investments in subsidiaries
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|||||
Net cash used in investing activities
|
(49
|
)
|
|
(304
|
)
|
|
(8
|
)
|
|
45
|
|
|
(316
|
)
|
|||||
Cash Flows From (Used In) Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Proceeds from debt offering
|
250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250
|
|
|||||
Proceeds from issuance of common units, net of issuance costs
|
95
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
|||||
Proceeds from issuance of general partner units, net of issuance costs
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Distributions to noncontrolling interest
|
—
|
|
|
(15
|
)
|
|
(7
|
)
|
|
—
|
|
|
(22
|
)
|
|||||
Distributions in connection with acquisitions
|
(250
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(250
|
)
|
|||||
Quarterly distributions to unitholders
|
(240
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(240
|
)
|
|||||
Quarterly distributions to general partner
|
(68
|
)
|
|
—
|
|
|
(28
|
)
|
|
28
|
|
|
(68
|
)
|
|||||
Repayments under revolving credit agreement
|
(431
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(431
|
)
|
|||||
Borrowings under revolving credit agreement
|
476
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
476
|
|
|||||
Contributions by parent
|
—
|
|
|
45
|
|
|
—
|
|
|
(45
|
)
|
|
—
|
|
|||||
Intercompany borrowings (payments)
|
218
|
|
|
(240
|
)
|
|
22
|
|
|
—
|
|
|
—
|
|
|||||
Sponsor contributions of equity to the Predecessors
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|||||
Financing costs
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Capital contributions by affiliate
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
Net cash from (used in) financing activities
|
94
|
|
|
(210
|
)
|
|
(13
|
)
|
|
(17
|
)
|
|
(146
|
)
|
|||||
Increase (Decrease) in Cash and Cash Equivalents
|
11
|
|
|
(15
|
)
|
|
1
|
|
|
—
|
|
|
(3
|
)
|
|||||
Cash and Cash Equivalents, Beginning of Year
|
—
|
|
|
17
|
|
|
2
|
|
|
—
|
|
|
19
|
|
|||||
Cash and Cash Equivalents, End of Year
|
$
|
11
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantors
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||
Cash Flows From (Used In) Operating Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash from (used in) operating activities
|
$
|
(42
|
)
|
|
$
|
210
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
166
|
|
Cash Flows From (Used In) Investing Activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(7
|
)
|
|
(197
|
)
|
|
—
|
|
|
—
|
|
|
(204
|
)
|
|||||
Acquisitions
|
—
|
|
|
(2,175
|
)
|
|
(304
|
)
|
|
—
|
|
|
(2,479
|
)
|
|||||
Investments in subsidiaries
|
(2,510
|
)
|
|
—
|
|
|
—
|
|
|
2,510
|
|
|
—
|
|
|||||
Distributions to parent
|
16
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Proceeds from sale of assets
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Net cash used in investing activities
|
(2,501
|
)
|
|
(2,378
|
)
|
|
(304
|
)
|
|
2,510
|
|
|
(2,673
|
)
|
|||||
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 in connection with 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 senior notes
|
(130
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(130
|
)
|
|||||
Contributions by parent
|
—
|
|
|
2,205
|
|
|
305
|
|
|
(2,510
|
)
|
|
—
|
|
|||||
Intercompany borrowings (payments)
|
17
|
|
|
(20
|
)
|
|
3
|
|
|
—
|
|
|
—
|
|
|||||
Sponsor contributions of equity to the Predecessors
|
27
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|||||
Financing costs
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|||||
Capital contributions by affiliate
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|||||
Net cash from financing activities
|
2,520
|
|
|
2,185
|
|
|
308
|
|
|
(2,510
|
)
|
|
2,503
|
|
|||||
Increase (Decrease) in Cash and Cash Equivalents
|
(23
|
)
|
|
17
|
|
|
2
|
|
|
—
|
|
|
(4
|
)
|
|||||
Cash and Cash Equivalents, Beginning of Year
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||
Cash and Cash Equivalents, End of Year
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
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
|
|
59
|
|
Chairman of the Board of Directors and Chief Executive Officer
|
Phillip M. Anderson
|
|
50
|
|
President and Director
|
Raymond J. Bromark
|
|
70
|
|
Director
|
Robert W. Goldman
|
|
73
|
|
Director
|
Tracy D. Jackson
|
|
47
|
|
Vice President and Controller
|
Brad S. Lakhia
|
|
43
|
|
Vice President and Treasurer
|
James H. Lamanna
|
|
62
|
|
Director
|
Thomas C. O’Connor
|
|
60
|
|
Director
|
Charles S. Parrish
|
|
58
|
|
Vice President and General Counsel
|
Don J. Sorensen
|
|
48
|
|
Vice President, Operations
|
Steven M. Sterin
|
|
44
|
|
Vice President, Chief Financial Officer and Director
|
Michael E. Wiley
|
|
65
|
|
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, 2015, 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
|
|
$
|
97,000
|
|
|
$
|
76,749
|
|
|
$
|
—
|
|
|
$
|
173,749
|
|
James H. Lamanna
|
|
85,000
|
|
|
76,749
|
|
|
—
|
|
|
161,749
|
|
||||
Thomas C. O’Connor
|
|
97,000
|
|
|
76,749
|
|
|
—
|
|
|
173,749
|
|
||||
Robert W. Goldman (d)
|
|
61,561
|
|
|
—
|
|
|
—
|
|
|
61,561
|
|
||||
Michael E. Wiley (d)
|
|
61,561
|
|
|
—
|
|
|
—
|
|
|
61,561
|
|
(a)
|
The amounts shown in this column include the portion of the annual retainer earned in
2015
, any individual retainers for serving as the chair of a committee and the Board and committee meeting fees paid in
2015
.
|
(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
2015
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
|
|
1,371
|
James H. Lamanna
|
|
1,371
|
Thomas C. O’Connor
|
|
1,371
|
Robert W. Goldman
|
|
—
|
Michael E. Wiley
|
|
—
|
•
|
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;
|
•
|
Don J. Sorensen
, Vice President, Operations;
|
•
|
Keith M. Casey
, former Vice President, Operations; and
|
•
|
Charles S. Parrish
, Vice President and General Counsel.
|
•
|
Mr. Anderson
- Although he serves as a member of Tesoro’s executive committee, Mr. Anderson’s only officer role within Tesoro is as the President of our general partner and its subsidiaries. He is also employed by our general partner. Decisions related to his compensation reside with the board of directors of our general partner but are based in large part on the recommendation of the compensation committee of the board of directors of Tesoro. Because several 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.
|
•
|
Mr. Sorensen
- Mr. Sorensen is employed by our general partner and serves as an officer of our general partner and its subsidiaries. He also serves a broader role as Senior Vice President, Logistics of Tesoro Companies, Inc. Tesoro Refining & Marketing Company LLC and several other subsidiaries of Tesoro. Because of this role as a Senior Vice President of Tesoro companies, decisions related to Mr. Sorensen’s compensation reside with the compensation committee of Tesoro. However, because he also serves as an executive officer of our general partner and our general partner pays a significant portion of Mr. Sorensen’s compensation, decisions related to his compensation must be approved by the board of directors of our general partner (based in large part on the recommendation of the compensation committee of the board of directors of Tesoro). Again, these compensation decisions are delegated to the Chairman of the Board and the independent directors.
|
•
|
Messrs. Goff, Sterin, Casey (for a portion of 2015) and Parrish
- Decisions related to compensation of executive officers (or persons who served for a portion of the year as 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.
|
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 relative unitholder return, executives realize little or no value. In periods of high relative unitholder return, executives may realize substantial value
|
YES
-
Pays out only based on increased relative 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. Similarly, adjustments were made for the 2015 ICP to exclude the impact of inventory valuation adjustments related to changes in commodity prices. Targets for this component are based on Tesoro’s annual business plan.
|
•
|
Controllable cost management and Business Improvement are tied as the second most heavily weighted metric of the Tesoro corporate component. Controllable cost management 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”), margin improvement initiatives, synergies related to asset acquisitions and similar 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 $2.274 billion
|
|
50%
|
|
99%
|
Management of costs to no more than $3.386 billion
|
|
17.5
|
|
200
|
Business Improvements (including CII, synergy and other projects and initiatives) of $275 million
|
|
17.5
|
|
200
|
Personal Safety improvement of 15% (measured by improvement in # of incidents over the prior three-year average)
|
|
5
|
|
200
|
Process Safety Management improvement of 15% (measured by improvement in # of incidents over prior three-year average)
|
|
5
|
|
200
|
Environmental improvement of 15% (measured by improvement in # of incidents over prior three-year average)
|
|
5
|
|
200
|
Overall Tesoro Corporate Performance Achieved
|
|
|
|
150%
|
TLLP Goals
|
|
Weighting
|
|
Result / Performance
|
EBITDA of $654 million for 2015 base business
|
|
15%
|
|
$660 million (slightly above target)
|
Various Business Improvement Objectives (including improvement in base business EBITDA, improvement in crude oil gathering EBITDA, execution on organic growth plans for the terminalling and transportation segment and development of organic growth plans for the Rockies natural gas business)
|
|
60%
|
|
$192 million (slightly below target)
|
OSHA combined recordable rate of 0
|
|
10%
|
|
0 recordable injuries (at target)
|
Management of costs to no more than $6.5 million
|
|
15%
|
|
$5.9 million (significantly better than target)
|
Overall TLLP Performance Achieved
|
|
135%
|
Name
|
|
Bonus Eligible Earnings
|
|
Target Bonus
|
|
Overall Performance Achieved
|
|
Calculated Bonus Payout
|
|
Individual Performance Adjustments (Increase/ Decrease)
|
|
Total Bonus Payout
|
||
Phillip M. Anderson
|
|
$
|
363,000
|
|
|
70%
|
|
135%
|
|
$354,339
|
|
$26,247
|
|
$380,586
|
Don J. Sorensen
|
|
380,000
|
|
|
60%
|
|
150%
|
|
354,161
|
|
—
|
|
354,161
|
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
|
|
2015
|
|
$ (f)
|
|
|
$
|
2,345,798
|
|
|
$ (f)
|
|
|
$ (f)
|
|
|
$ (f)
|
|
|
$
|
2,345,798
|
|
|
2014
|
|
(f)
|
|
|
1,917,842
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
1,917,842
|
|
|||
|
2013
|
|
(f)
|
|
|
1,665,300
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
1,665,300
|
|
|||
Phillip M. Anderson
President
|
|
2015
|
|
361,700
|
|
|
211,123
|
|
|
380,586
|
|
|
196,615
|
|
|
26,247
|
|
|
1,176,271
|
|
||
|
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
|
|
|||
Don J. Sorensen
Vice President, Operations
|
|
2015
|
|
342,000
|
|
|
234,633
|
|
|
318,745
|
|
|
153,939
|
|
|
281,277
|
|
|
1,330,594
|
|
||
Steven M. Sterin
Vice President and Chief Financial Officer
|
|
2015
|
|
(f)
|
|
|
410,558
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
410,558
|
|
||
|
2014
|
|
(f)
|
|
|
—
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
—
|
|
|||
Keith M. Casey
Former Vice President, Operations
|
|
2015
|
|
(f)
|
|
|
410,558
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
410,558
|
|
||
Charles S. Parrish
Vice President and General Counsel
|
|
2015
|
|
(f)
|
|
|
281,520
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
281,520
|
|
||
|
2014
|
|
(f)
|
|
|
213,154
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
213,154
|
|
|||
|
2013
|
|
(f)
|
|
|
213,500
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
213,500
|
|
(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, 2015. For Mr. Sorensen, this includes 90% of his base salary expense from January 1, 2015 through December 31, 2015.
|
(b)
|
The amounts shown in this column for 2015 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 - $4,691,597; Mr. Anderson - $422,246; Mr. Sorensen - $469,267; Mr. Sterin - $821,116; Mr. Casey - $821,116; and Mr. Parrish - $563,040. For Messrs. Goff, Sterin, Casey and Parrish, this amount represents 25% of their 2015 long-term incentive values as recommended by the Tesoro compensation committee and awarded by the Board of our general partner. For Messrs. Goff and Parrish, this amount was increased from 20% of their total long-term incentive compensation in 2014 and 2013. 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.
|
(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 2015, the Partnership’s portion of such expense is 90% for Mr. Sorensen.
|
(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. Sorensen in 2015 is 90%.
|
(e)
|
The amounts shown in this column for 2015 is 100% for Mr. Anderson and 90% for Mr. Sorensen and reflect the following:
|
(1)
|
Tesoro Thrift Plan Contributions: Tesoro provides matching contributions dollar-for-dollar up to 6% of eligible earnings for all employees who participate in the Tesoro Thrift Plan. The matching contributions for 2015 were $11,249 for Mr. Anderson and $14,310 for Sorensen. 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. The profit-sharing contributions for 2015 were $14,998 for Mr. Anderson and $14,166 for Mr. Sorensen.
|
(2)
|
Tesoro Executive Deferred Compensation Contributions: Tesoro will match the participant’s base salary contributions dollar-for-dollar up to 4% eligible earnings above the IRS salary limitation (i.e., $265,000 for 2015). The matching contribution for 2015 was $17,363 for Mr. Sorensen.
|
(3)
|
Tesoro Relocation Benefits: Tesoro provided benefits in 2015 under its relocation program for Mr. Sorensen in connection with his promotion in the amount of $235,438.
|
(f)
|
As noted above, no compensation has been reported for Messrs. Goff, Sterin, Casey and Parrish because, other than grants of performance phantom units, none of their compensation is allocated to us. The $9 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
|
|
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
|
|
2/12/2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
17,561
|
|
|
35,122
|
|
|
70,244
|
|
|
—
|
|
|
$
|
2,345,798
|
|
Phillip M. Anderson
|
|
Annual Incentive
|
|
N/A
|
|
131,237
|
|
|
262,473
|
|
|
524,946
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
Phantom Units
|
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,581
|
|
|
3,161
|
|
|
6,322
|
|
|
—
|
|
|
211,123
|
|
|||||
Don J. Sorensen
|
|
Annual Incentive
|
|
N/A
|
|
106,249
|
|
|
212,496
|
|
|
424,993
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Phantom Units
|
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,757
|
|
|
3,513
|
|
|
7,026
|
|
|
—
|
|
|
234,633
|
|
||||
Steven M. Sterin
|
|
Phantom Units
|
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,074
|
|
|
6,147
|
|
|
12,294
|
|
|
—
|
|
|
410,558
|
|
||||
Keith M. Casey
|
|
Phantom Units
|
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,074
|
|
|
6,147
|
|
|
12,294
|
|
|
—
|
|
|
410,558
|
|
||||
Charles S. Parrish
|
|
Phantom Units
|
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,108
|
|
|
4,215
|
|
|
8,430
|
|
|
—
|
|
|
281,520
|
|
(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 2015 ICP reflected is 100% for Mr. Anderson and 90% for Mr. Sorensen. We are not responsible for any portion of the other NEOs’ 2015 ICP.
|
(b)
|
The amounts shown in these columns represent the number of performance phantom units granted during 2015 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, 2015 through December 31, 2017. 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.
|
|
|
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
|
|
2/12/2015
|
|
—
|
|
|
$
|
—
|
|
|
70,244
|
|
|
$
|
3,686,932
|
|
|
2/7/2014
|
|
—
|
|
|
—
|
|
|
56,432
|
|
|
3,103,901
|
|
|||
Phillip M. Anderson
|
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
6,322
|
|
|
331,826
|
|
||
|
2/7/2014
|
|
—
|
|
|
—
|
|
|
6,272
|
|
|
344,976
|
|
|||
Don J. Sorensen
|
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
7,026
|
|
|
368,777
|
|
||
Steven M. Sterin
|
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
12,294
|
|
|
645,281
|
|
||
Keith M. Casey
|
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
12,294
|
|
|
645,281
|
|
||
Charles S. Parrish
|
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
8,430
|
|
|
442,470
|
|
||
|
2/7/2014
|
|
—
|
|
|
—
|
|
|
6,272
|
|
|
344,976
|
|
(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, 2015 of $50.32, as reported on the NYSE, was used to calculate the market value of the unvested unit awards.
|
(b)
|
These awards represent TLLP performance phantom units, which are the right to receive a number of common units at the end of the performance period depending on our achievement of relative total unitholder return against a defined performance peer group. Each award will vest at the end of the relevant performance period, subject to performance. For each award, the number of unvested units and the payout values shown assume a payout at maximum; for all such awards, the payout value also includes any outstanding distribution equivalent rights that will be paid to the executive once both the award has vested and the payout results have been certified by the TLGP Board of Directors. The performance period for each award, as well as the amount of outstanding distribution equivalent rights included in the payout value is shown for each of the executives below:
|
|
Dividend Equivalent Rights Accrued as of 12/31/2015 ($)
|
|||
Name
|
TLPP Performance Phantom Units Granted February 2015
(Performance Period of 1/1/2015-12/31/2017)
|
TLPP Performance Phantom Units Granted February 2014
(Performance Period of 1/1/2014-12/31/2016)
|
||
Gregory J. Goff
|
152,254
|
|
264,243
|
|
Philip M. Anderson
|
13,703
|
|
29,369
|
|
Don J. Sorensen
|
15,229
|
|
—
|
|
Steven M. Sterin
|
26,647
|
|
—
|
|
Keith M. Casey
|
26,647
|
|
—
|
|
Charles S. Parrish
|
18,272
|
|
29,369
|
|
|
|
Unit Awards
|
|||||
Name
|
|
Number of Units Acquired on Vesting (a)
|
|
Value Realized on Vesting (b)
|
|||
Gregory J. Goff
|
|
49,636
|
|
|
$
|
2,344,432
|
|
Philip M. Anderson
|
|
6,364
|
|
|
300,588
|
|
|
Don J. Sorensen
|
|
—
|
|
|
—
|
|
|
Steven M. Sterin
|
|
—
|
|
|
—
|
|
|
Keith M. Casey
|
|
—
|
|
|
—
|
|
|
Charles S. Parrish
|
|
6,364
|
|
|
300,588
|
|
(a)
|
Reflects the vesting of the payout of the performance phantom units that were granted in 2013 for Messrs. Goff, Anderson and Parrish.
|
(b)
|
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 20, 2015 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 - $337,153; Mr. Anderson - $43,227; and Mr. Parrish - $43,227.
|
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)
|
|
Philip M. Anderson
|
|
Tesoro Corporation Retirement Plan
|
|
12
|
|
|
497,714
|
|
|
—
|
|
|
Restoration Retirement Plan
|
|
12
|
|
|
878,410
|
|
|
—
|
|
|
Don J. Sorensen
|
|
Tesoro Corporation Retirement Plan
|
|
22
|
|
|
749,519
|
|
|
—
|
|
|
Restoration Retirement Plan
|
|
22
|
|
|
410,582
|
|
|
—
|
|
|
Steven M. Sterin
|
|
— (c)
|
|
— (c)
|
|
|
— (c)
|
|
|
— (c)
|
|
Keith M. Casey
|
|
— (c)
|
|
— (c)
|
|
|
— (c)
|
|
|
— (c)
|
|
Charles S. Parrish
|
|
— (c)
|
|
— (c)
|
|
|
— (c)
|
|
|
— (c)
|
|
(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 as of December 31, 2015 for financial reporting purposes. These assumptions include a discount rate of 4.40%, a cash balance interest crediting rate of 3.40%, 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 4.40% and the PPA 2016 Mortality Table. The Partnership reimburses Tesoro for the pension expense that is allocated to us for employees of our general partner. During 2015, 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. Sorensen. However, the amounts reflected in the above table represent the full present value of the accumulated benefit for Mr. Sorensen.
|
(c)
|
No portion of the compensation expense for retirement benefits to Messrs. Goff, Sterin, Casey and Parrish is allocated to us. The $9 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
(d)
|
||||||||||
Gregory J. Goff
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Philip M. Anderson
|
|
—
|
|
|
4,398
|
|
|
(273
|
)
|
|
—
|
|
|
7,081
|
|
|||||
Don J. Sorensen
|
|
23,611
|
|
|
24,432
|
|
|
(1,059
|
)
|
|
—
|
|
|
177,562
|
|
|||||
Steven M. Sterin
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Keith M. Casey
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Charles S. Parrish
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(a)
|
The amounts shown include amounts reflected in the base salary column of the Summary Compensation Table for Mr. Sorensen.
|
(b)
|
The amounts shown include amounts reflected in the All Other Compensation column of the Summary Compensation Table for Messrs. Anderson and Sorensen.
|
(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.
|
(d)
|
A portion of the amounts disclosed in this column for Mr. Anderson has previously been reported in Summary Compensation Table of $2,170 for 2014 and $717 for 2013.
|
Name
|
Scenario
|
Severance ($)
|
Accelerated Equity Vesting ($)
|
Retirement Benefits ($)
|
Health Benefits ($)
|
Total ($)
|
|||||
Goff
|
w/o Cause or w/Good Reason
|
—
|
|
2,597,925
|
|
—
|
|
—
|
|
2,597,925
|
|
Term. after Change-in-Control
|
—
|
|
3,395,417
|
|
—
|
|
—
|
|
3,395,417
|
|
|
Retirement or Voluntary Term.
|
—
|
|
2,597,925
|
|
—
|
|
—
|
|
2,597,925
|
|
|
Death
|
—
|
|
3,395,417
|
|
—
|
|
—
|
|
3,395,417
|
|
|
Disability
|
—
|
|
3,395,417
|
|
—
|
|
—
|
|
3,395,417
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Anderson
|
w/o Cause or w/Good Reason
|
—
|
|
263,294
|
|
|
|
263,294
|
|
||
Term. after Change-in-Control
|
1,234,200
|
|
338,401
|
|
199,997
|
|
44,651
|
|
1,817,249
|
|
|
Retirement or Voluntary Term.
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
—
|
|
338,401
|
|
—
|
|
—
|
|
338,401
|
|
|
Disability
|
—
|
|
338,401
|
|
—
|
|
—
|
|
338,401
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Sorensen
|
w/o Cause or w/Good Reason
|
—
|
|
120,388
|
|
|
|
120,388
|
|
||
Term. after Change-in-Control
|
1,094,400
|
|
184,389
|
|
150,062
|
|
40,300
|
|
1,469,151
|
|
|
Retirement or Voluntary Term.
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
—
|
|
184,389
|
|
—
|
|
—
|
|
184,389
|
|
|
Disability
|
—
|
|
184,389
|
|
—
|
|
—
|
|
184,389
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Sterin
|
w/o Cause or w/Good Reason
|
—
|
|
210,653
|
|
—
|
|
—
|
|
210,653
|
|
Term. after Change-in-Control
|
—
|
|
322,641
|
|
—
|
|
—
|
|
322,641
|
|
|
Retirement or Voluntary Term.
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
—
|
|
322,641
|
|
—
|
|
—
|
|
322,641
|
|
|
Disability
|
—
|
|
322,641
|
|
—
|
|
—
|
|
322,641
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Casey
|
w/o Cause or w/Good Reason
|
—
|
|
210,653
|
|
—
|
|
—
|
|
210,653
|
|
Term. after Change-in-Control
|
—
|
|
322,641
|
|
|
|
322,641
|
|
|||
Retirement or Voluntary Term.
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
—
|
|
322,641
|
|
—
|
|
—
|
|
322,641
|
|
|
Disability
|
—
|
|
322,641
|
|
—
|
|
—
|
|
322,641
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Parrish
|
w/o Cause or w/Good Reason
|
—
|
|
364,639
|
|
—
|
|
—
|
|
364,639
|
|
Term. after Change-in-Control
|
—
|
|
393,723
|
|
—
|
|
—
|
|
393,723
|
|
|
Retirement or Voluntary Term.
|
—
|
|
364,639
|
|
—
|
|
—
|
|
364,639
|
|
|
Death
|
—
|
|
393,723
|
|
—
|
|
—
|
|
393,723
|
|
|
Disability
|
—
|
|
393,723
|
|
—
|
|
—
|
|
393,723
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
•
|
Accrued Benefits
. Messrs. Anderson and Sorensen 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. Sorensen.
|
•
|
Severance
.
|
◦
|
Termination With a Change-in-Control
. Pursuant to their management stability agreements for Messrs. Anderson and Sorensen, 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 Sorensen 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. Sorensen. 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.
|
•
|
Accelerated Equity Vesting
.
|
◦
|
Involuntary Termination Without Cause.
Pursuant to the award agreements, Messrs. Goff and Parrish being retirement eligible and Messrs. Anderson, Sorensen, Sterin and Casey having worked a minimum of twelve months during the performance period, 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 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. Goff and Parrish are retirement eligible, they will receive a pro-rated award of their performance phantom units based on the actual performance at the end of the performance period along with the accumulated distribution equivalent rights. Messrs. Anderson, Sorensen, Stein and Casey will forfeit all unvested performance phantom awards, along with the accumulated distribution rights, since they are not retirement eligible.
|
◦
|
Death and Disability
. Pursuant to the award agreements, each NEO will vest in their performance phantom units at target and will be paid the accumulated distribution equivalent rights accumulated on those units.
|
•
|
Retirement Benefits
.
|
◦
|
Termination With a Change-in-Control.
Pursuant to their management stability agreements, Messrs. Anderson and Sorensen 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. Sorensen. 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 Sorensen 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. Sorensen. 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 verifiable 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, 2016
.
|
•
|
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, 2016
, there were
93,569,345
common units outstanding (including
32,445,115
common units held by Tesoro Corporation and its affiliates). This table does not include (1) the
1,900,515
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
|
|
85,785
|
|
|
|
Phillip M. Anderson
|
|
25,975
|
|
|
|
Raymond J. Bromark
|
|
10,561
|
|
|
Includes 1,371 common units underlying phantom units
|
Keith M. Casey
|
|
—
|
|
|
|
Robert W. Goldman
|
|
4,100
|
|
|
|
James H. Lamanna
|
|
9,785
|
|
|
Includes 1,371 common units underlying phantom units
|
Thomas C. O’Connor
|
|
15,326
|
|
|
Includes 1,371 common units underlying phantom units
|
Charles S. Parrish
|
|
13,428
|
|
|
|
Don J. Sorensen
|
|
1,177
|
|
|
|
Steven M. Sterin
|
|
2,214
|
|
|
|
Michael E. Wiley
|
|
—
|
|
|
|
All Current Directors and Executive Officers as a Group (12 individuals)
|
|
168,351
|
|
|
Does not include Mr. Casey, who is no longer an executive officer or director
|
|
|
Aggregate Number of Shares Beneficially Owned
|
|
Additional Information
|
|
Gregory J. Goff
|
|
714,974
|
|
|
Includes 151,513 shares underlying stock options and 597 shares credited under the Tesoro Corporation Thrift Plan
|
Phillip M. Anderson
|
|
4,613
|
|
|
Includes 1707 shares credited under the Tesoro Corporation Thrift Plan
|
Raymond J. Bromark
|
|
—
|
|
|
|
Keith M. Casey
|
|
—
|
|
|
|
Robert W. Goldman
|
|
48,643
|
|
|
Includes 15,000 shares underlying stock options and 2,843 shares underlying restricted stock units
|
James H. Lamanna
|
|
—
|
|
|
|
Thomas C. O’Connor
|
|
—
|
|
|
|
Charles S. Parrish
|
|
124,811
|
|
|
|
Don J. Sorensen
|
|
12,759
|
|
|
|
Steven M. Sterin
|
|
5,792
|
|
|
|
Michael E. Wiley
|
|
36,098
|
|
|
Includes 9,000 shares underlying stock options
|
All Current Directors and Executive Officers as a Group (12 individuals)
|
|
960,215
|
|
|
Does not include units beneficially owned by Mr. Casey, who is no longer an executive officer or director
|
|
|
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, TX 78259
|
|
32,445,115
|
|
|
34.7%
|
|
1,900,515
|
|
|
100
|
%
|
|
36.0%
|
Tortoise Capital Advisors, LLC (c)
11550 Ash Street, Suite 300
Leawood, KS 66211
|
|
10,106,110
|
|
|
10.8%
|
|
—
|
|
—
|
|
10.6%
|
||
Goldman Sachs Asset Management (d)
200 West Street
New York, NY 10282
|
|
6,876,817
|
|
|
7.4%
|
|
—
|
|
—
|
|
7.2%
|
||
ALPS Advisors, Inc. (e)
1290 Broadway, Suite 1100
Denver, CO 80203
|
|
4,694,381
|
|
|
5.0%
|
|
—
|
|
—
|
|
4.9%
|
||
OppenheimerFunds, Inc. (f)
Two World Financial Center
225 Liberty Street
New York, NY 10281
|
|
4,662,164
|
|
|
5.0%
|
|
—
|
|
—
|
|
4.9%
|
(a)
|
As of
December 31, 2015
, there were
93,478,326
common units and
1,900,515
general partner units outstanding, for an aggregate of
95,378,841
units.
|
(b)
|
As of both
December 31, 2015
and
February 18, 2016
, 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 8,219,002 common units, including 151,021 common units held through its wholly-owned subsidiary, Carson Cogeneration Company, Tesoro Alaska Company LLC directly held 571,065 common units, and Tesoro Logistics GP, LLC directly held 8,034,123 common units and 1,900,515 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. 6 to a Schedule 13G/A filed with the SEC on February 10, 2016, Tortoise Capital Advisors has sole voting and investment power with regard to 156,909 of our common units, shared voting power with regard to 9,021,669 of our common units, and shared investment power with regard to 9,949,201 of our common units.
|
(d)
|
According to Amendment No. 3 to a Schedule 13G/A filed with the SEC on February 1, 2016, Goldman Sachs Asset Management (Goldman Sachs Asset Management, L.P., together with GS Investment Strategies, LLC), has shared voting and investment power with regard to 6,876,817 of our common units.
|
(e)
|
According to Amendment No. 3 to a Schedule 13G/A filed with the SEC on February 3, 2016, ALPS Advisors, Inc. has shared voting and investment power with regard to 4,694,381 of our common units, and Alerian MLP ETF has shares voting and investment power with regard to 4,658,370 of our common units.
|
(f)
|
According to Amendment No. 2 to a Schedule 13G/A filed with the SEC on February 5, 2016, OppenheimerFunds, Inc. has shared voting and investment power with regard to 4,662,164 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)
|
|
365,546
|
|
|
|
|
212,310
|
|
Total
|
|
365,546
|
|
|
|
|
212,310
|
|
(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 202,747 units to be issued and 375,109 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.
|
•
|
our obligation to pay Tesoro an annual corporate services fee, currently in the amount of approximately
$9 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.
|
|
Years Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Audit Fees (a)
|
$
|
1,360
|
|
|
$
|
1,765
|
|
Audit-Related Fees
|
—
|
|
|
—
|
|
||
Tax Fees
|
—
|
|
|
—
|
|
||
All Other Fees
|
—
|
|
|
—
|
|
||
Total
|
$
|
1,360
|
|
|
$
|
1,765
|
|
(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.
|
|
Page
|
Report of Independent Registered Public Accounting Firm (Ernst & Young LLP)
|
|
Combined Consolidated Statements of Operations - Years Ended December 31, 2015, 2014 and 2013
|
|
Consolidated Balance Sheets - December 31, 2015 and 2014
|
|
Combined Consolidated Statements of Partners’ Equity - Years Ended December 31, 2015, 2014 and 2013
|
|
Combined Consolidated Statements of Cash Flows - Years Ended December 31, 2015, 2014 and 2013
|
|
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
|
|
Contribution, Conveyance and Assumption Agreement, dated as of November 12, 2015, among Tesoro Corporation, Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro SoCal Pipeline Company LLC, 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 12, 2015, File No. 1-35143).
|
|
|
|
Exhibit Number
|
|
Description of Exhibit
|
2.9
|
|
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).
|
|
|
|
2.10
|
|
Amendment No. 1 to the Tranche 2 Contribution Agreement, dated as of November 12, 2015, among Tesoro Logistics LP, Tesoro Logistics GP, LLC and Tesoro Logistics Operations LLC, Tesoro Corporation, Tesoro Refining & Marketing Company LLC and Carson Cogeneration Company (incorporated by reference herein to Exhibit 10.5 to the Partnership’s Current Report on Form 8-K filed on November 12, 2015, File No. 1-35143).
|
|
|
|
2.11
|
|
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).
|
|
|
|
2.12
|
|
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).
|
|
|
|
2.13
|
|
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).
|
|
|
|
2.14
|
|
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).
|
|
|
|
2.15
|
|
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).
|
|
|
|
2.16
|
|
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).
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2.17
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|
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).
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2.18
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|
Agreement and Plan of Merger, dated as of April 6, 2015, by and among Tesoro Logistics LP, Tesoro Logistics GP, LLC, QEP Field Services, LLC, TLLPMerger Sub LLC, QEPMidstream Partners, LP, and QEPMidstream Partners GP, LLC (incorporated by reference herein to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed on April 6, 2015, File 1-35143).
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3.1
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|
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).
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3.2
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|
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).
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3.3
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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).
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3.4
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|
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).
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3.5
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|
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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3.7
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|
Amendment No. 2 to the Second Amended and Restated Limited Liability Company Agreement of Tesoro Logistics GP, LLC, dated as of November 12, 2015, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, and Tesoro Alaska Company LLC (incorporated by reference herein from Exhibit 3.1 to the Partnership’s Current Report on Form 8-K filed on November 12, 2015, 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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Exhibit Number
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Description of Exhibit
|
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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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 for the quarterly period ended September 30, 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 (incorporated by reference herein to Exhibit 4.6 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2014, File No. 1-35143).
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4.7
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|
Sixth Supplemental Indenture, dated as of May 21, 2015, 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 4.3 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, File No. 1-35143).
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4.8
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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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4.9
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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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4.10
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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 for the quarterly period ended September 30, 2014, File No. 1-35143).
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4.11
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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 (incorporated by reference herein to Exhibit 4.6 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2014, File No. 1-35143).
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4.12
|
|
Fourth Supplemental Indenture, dated as of May 21, 2015, 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 4.2 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, File No. 1-35143).
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4.13
|
|
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, relating to the 5.50% Senior Notes due 2019 and the 6.25% Senior Notes due 2022 (incorporated by reference herein to 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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4.14
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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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4.15
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|
Second Supplemental Indenture, dated as of May 21, 2015, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 5.50% Senior Notes due 2019 and the 6.25% Senior Notes due 2022 (incorporated by reference herein to Exhibit 4.1 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, File No. 1-35143).
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4.16
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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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Exhibit Number
|
|
Description of Exhibit
|
10.22
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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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10.23
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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 (incorporated by reference herein to Exhibit 10.18 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2014, File No. 1-35143).
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10.24
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|
Amendment No. 2 to the Third Amended and Restated Omnibus Agreement, dated as of August 3, 2015, 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 to Exhibit 10.3 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, File No. 1-35143).
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10.25
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|
First Amended and Restated Schedules to the Third Amended and Restated Omnibus Agreement, dated as of November 12, 2015, among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics LP, Tesoro Logistics GP, LLC and the other Tesoro entities named therein (incorporated by reference herein to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on November 12, 2015, File No. 1-35143).
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10.26
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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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10.27
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|
Termination of First Amended and Restated Omnibus Agreement, dated as of August 3, 2015, among Tesoro Logistics LP and 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 10.4 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, File No. 1-35143).
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10.28
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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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10.29
|
|
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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10.30
|
|
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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10.31
|
|
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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10.32
|
|
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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10.33
|
|
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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10.34
|
|
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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10.35
|
|
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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10.36
|
|
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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|
Exhibit Number
|
|
Description of Exhibit
|
10.37
|
|
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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10.38
|
|
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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10.39
|
|
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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10.40
|
|
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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10.41
|
|
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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10.42
|
|
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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10.43
|
|
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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10.44
|
|
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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10.45
|
|
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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10.46
|
|
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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10.47
|
|
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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10.48
|
|
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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10.49
|
|
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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|
10.50
|
|
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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10.51
|
|
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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10.52
|
|
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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10.53
|
|
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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Exhibit Number
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|
Description of Exhibit
|
10.54
|
|
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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10.55
|
|
Carson II Storage Services Agreement, dated as of November 12, 2015, by and between Tesoro Refining & Marketing Company LLC 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 November 12, 2015, File No. 1-35143).
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10.56
|
|
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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10.57
|
|
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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10.58
|
|
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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10.59
|
|
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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|
10.60
|
|
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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|
10.61
|
|
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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|
10.62
|
|
Amendment No. 1 to Transportation Services Agreement (SoCal Pipelines), dated as of November 12, 2015, among Tesoro SoCal Pipeline Company LLC and Tesoro Refining & Marketing Company LLC (incorporated by reference herein to Exhibit 10.3 to the Partnership’s Current Report on Form 8-K filed on November 12, 2015, File No. 1-35143).
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10.63
|
|
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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|
|
|
10.64
|
|
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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|
10.65
|
|
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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|
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|
10.66
|
|
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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|
|
|
10.67
|
|
License Agreement, dated as of November 12, 2015, among Tesoro Refining & Marketing Company LLC 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 12, 2015, File No. 1-35143).
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|
|
|
10.68
|
|
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 for the quarterly period ended June 30, 2014, File No. 1-35143).
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|
10.69
|
|
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).
|
|
|
|
10.70
|
|
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).
|
|
|
|
*10.71
|
|
Amendment No.1 to Terminalling Services Agreement - Anacortes, dated as of November 1, 2015, between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC.
|
|
|
|
Exhibit Number
|
|
Description of Exhibit
|
10.72
|
|
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).
|
|
|
|
10.73
|
|
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).
|
|
|
|
10.74
|
|
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).
|
|
|
|
10.75
|
|
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).
|
|
|
|
10.76
|
|
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).
|
|
|
|
10.77
|
|
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).
|
|
|
|
10.78
|
|
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).
|
|
|
|
10.79
|
|
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).
|
|
|
|
10.80
|
|
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).
|
|
|
|
10.81
|
|
First Amendment to Keep-Whole Commodity Fee Agreement, dated as of February 1, 2016, among QEP Field Services, LLC, QEPM Gathering I, LLC, Green River Processing, LLC, and Tesoro Refining & Marketing Company LLC (incorporated by reference herein to Exhibit 10.3 to the Partnership’s Current Report on Form 8-K filed on February 3, 2016, File No. 1-35143).
|
|
|
|
*10.82
|
|
Agreement, dated effective as of February 19, 2016, between Tesoro Refining and Marketing Company LLC and Green River Processing, LLC, related to the back-to-back purchase and sale of waxy crude oil.
|
|
|
|
10.83
|
|
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).
|
|
|
|
10.84
|
|
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).
|
|
|
|
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).
|
|
|
|
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).
|
|
|
|
*21.1
|
|
Subsidiaries of the Company.
|
|
|
|
*23.1
|
|
Consent of Independent Registered Public Accounting Firm (Ernst & Young LLP).
|
|
|
|
*31.1
|
|
Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*31.2
|
|
Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*32.1
|
|
Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
*32.2
|
|
Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
**101.INS
|
|
XBRL Instance Document
|
|
|
|
**101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
Exhibit Number
|
|
Description of Exhibit
|
**101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
**101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
**101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
**101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
TESORO LOGISTICS LP
|
|
|
|
|
|
|
|
By:
|
Tesoro Logistics GP, LLC
|
|
|
|
Its General Partner
|
|
|
|
|
|
|
By:
|
/s/ GREGORY J. GOFF
|
|
|
|
Gregory J. Goff
|
|
|
|
Chairman of the Board of Directors and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ GREGORY J. GOFF
|
|
Chairman of the Board of Directors and
|
|
February 25, 2016
|
Gregory J. Goff
|
|
Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ STEVEN M. STERIN
|
|
Director, Vice President and Chief Financial Officer
|
|
February 25, 2016
|
Steven M. Sterin
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ TRACY D. JACKSON
|
|
Vice President and Controller
|
|
February 25, 2016
|
Tracy D. Jackson
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ PHILLIP M. ANDERSON
|
|
Director and President
|
|
February 25, 2016
|
Phillip M. Anderson
|
|
|
|
|
|
|
|
|
|
/s/ RAYMOND J. BROMARK
|
|
Director
|
|
February 25, 2016
|
Raymond J. Bromark
|
|
|
|
|
|
|
|
|
|
/s/ ROBERT W. GOLDMAN
|
|
Director
|
|
February 25, 2016
|
Robert W. Goldman
|
|
|
|
|
|
|
|
|
|
/s/ JAMES H. LAMANNA
|
|
Director
|
|
February 25, 2016
|
James H. Lamanna
|
|
|
|
|
|
|
|
|
|
/s/ THOMAS C. O’CONNOR
|
|
Director
|
|
February 25, 2016
|
Thomas C. O’Connor
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL E. WILEY
|
|
Director
|
|
February 25, 2016
|
Michael E. Wiley
|
|
|
|
|
EMPLOYEE:
|
Don J. Sorensen
|
•
|
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.
|
Executive Officers
|
Business Unit
|
Total Target Payout Amount (a)
|
Phillip M. Anderson
|
The Partnership
|
75%
|
Don J. Sorensen
|
Business unit results are tied to the Partnership’s performance as well as the performance of all of Tesoro’s logistical assets (other than the Partnership and including logistics assets for which the Partnership may have the right of first refusal)
|
65%
|
(a)
|
Percentage to be applied to base salary earnings during the 2016 calendar year.
|
|
|
|
||
Annual Retainer for Non-Employee Directors Designated Independent (b)
|
|
$
|
142,000
|
|
Annual Retainer for Non-Employee Directors who serve on both the Board of Directors of the General Partner and the Board of Directors of Tesoro Corporation (c)
|
|
87,000
|
|
|
Annual Retainer for Audit and Conflicts Committee Chairs
|
|
15,000
|
|
|
Board and Committee Meeting Fees (d)
|
|
1,500 per meeting
|
|
(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.
|
(b)
|
The annual retainer for non-employee directors designated as independent is payable $61,000 in cash and $81,000 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 $81,000 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.
|
(c)
|
The annual retainer for non-employee directors who serve on both the Board of Directors of the General Partner and the Board of Directors of Tesoro Corporation (which directly and indirectly owns the General Partner) is payable in cash.
|
(d)
|
A meeting fee is paid to a non-employee director for attendance in person or by telephone.
|
2.
|
Amendments to the Existing Agreement.
As of the Effective Date (defined below), the Existing Agreement is hereby amended or modified as follows:
|
4.
|
Miscellaneous.
|
TESORO LOGISTICS OPERATIONS LLC
By:
Name: Phillip M. Anderson
Title: President
|
TESORO REFINING & MARKETING COMPANY LLC
By:
Name: Gregory J. Goff
Title: Chairman of the Board of Managers and President
|
|
|
Solely with respect to Section 33(a):
|
Solely with respect to Section 33(a):
|
|
|
TESORO LOGISTICS GP, LLC
By:
Name: Phillip M. Anderson
Title: President
|
TESORO LOGISTICS LP
BY: TESORO LOGISTICS GP, LLC, its general partner
By:
Name: Phillip M. Anderson
Title: President
|
(ii)
|
RESERVED;
|
(iii)
|
transmix handling fees pursuant to Section 6;
|
(iv)
|
additization pursuant to Section 7;
|
(vii)
|
ethanol blending services pursuant to Section 9 and the fees related thereto;
|
(viii)
|
reimbursement related to newly imposed taxes pursuant to Section 1O;
|
TESORO LOGISTICS OPERATIONS LLC
By:
Name:
Title:
|
TESORO REFINING & MARKETING COMPANY LLC
By:
Name:
Title:
|
Product
|
Minimum Commitment
|
Reserved Capacity
|
Light Ends via truck rack Light Ends via rail
Clean Products via truck rack
|
69,959 Barrels per Month 128,359 Barrels per Month
295,041 Barrels per Month
|
82,125 Barrels per Month
151,019 Barrels per Month 339,291 Barrels per Month
|
GREEN RIVER PROCESSING, LLC
|
GREEN RIVER PROCESSING, LLC
|
Contract No: [________________]
|
19100 RIDGEWOOD PKWY
|
|
SAN ANTONIO, TX 78259
|
TESORO REFINING & MARKETING COMPANY LLC
|
210.828.8484
|
Contract No: ________
|
210.579.4578 Fax
|
Confidential
|
1
|
February 19, 2016
|
Confidential
|
2
|
February 19, 2016
|
GREEN RIVER PROCESSING, LLC
19100 RIDGEWOOD PKWY
San Antonio, Texas 78259-1828
Attn: Commercial Contract Administration
Phone # 1-210-626-4459
Fax # 1-210-579-4578
|
Tesoro Refining & Marketing Company LLC
19100 RIDGEWOOD PKWY
San Antonio, Texas 78259-1828
Attn: Commercial Contract Administration
Phone # 1-210-626-6529
Fax # 1-210-579-4578
|
OPERATIONS
|
Crude Scheduling
|
Phone: (303) 454-6600
Fax: (210) 745-4565
Email: Denverops@tsocorp.com
and
sat-crudescheduling@tsocorp.com
|
CREDIT
|
Customer Service
|
Phone: (877) 876-7297 Fax: (210) 626-4048
Email: CREDSAT@tsocorp.com
|
ACCOUNTING
|
Mid-Office Accounting
|
Phone: (210) 881-6435
Email: sat-tsocrudeinvoices@tsocorp.com
|
Confidential
|
3
|
February 19, 2016
|
GREEN RIVER PROCESSING, LLC
|
TESORO REFINING & MARKETING COMPANY LLC
|
Confidential
|
4
|
February 19, 2016
|
Subsidiary
|
|
|
|
Jurisdiction of Organization
|
Tesoro High Plains Pipeline Company LLC
|
|
|
|
Delaware
|
Tesoro Logistics Finance Corp.
|
|
|
|
Delaware
|
Tesoro Logistics Northwest Pipeline LLC
|
|
|
|
Delaware
|
Tesoro Logistics Pipelines LLC
|
|
|
|
Delaware
|
Tesoro Logistics Operations LLC
|
|
|
|
Delaware
|
Tesoro SoCal Pipeline Company LLC
|
|
|
|
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)
|
|
|
|
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 25, 2016
|
/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 25, 2016
|
/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 25, 2016
|
(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 25, 2016
|