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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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Delaware
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27‑4151603
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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19100 Ridgewood Pkwy, San Antonio, Texas 78259-1828
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(Address of principal executive offices) (Zip Code)
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210-626-6000
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(Registrant’s telephone number, including area code)
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Securities registered pursuant to 12(b) of the Act:
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Units Representing Limited Partnership Interests
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act: None
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Large accelerated filer
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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TABLE OF CONTENTS
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IMPORTANT INFORMATION REGARDING FORWARD LOOKING STATEMENTS
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•
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changes in global economic conditions 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 change in the crude oil and natural gas produced in the Bakken Shale/Williston Basin area of North Dakota and Montana or the Green River Basin, Uinta Basin and Vermillion Basin in the states of Utah, Colorado and Wyoming;
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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 ability to perform under the terms of our gathering agreements as they are the largest customers in our 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 obligations under our commercial agreements and our secondment agreement;
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a material change 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 or activist 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 our customers 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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•
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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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delays in obtaining necessary approvals and permits;
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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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December 31, 2016
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1
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IMPORTANT INFORMATION AND GLOSSARY OF TERMS
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•
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seasonal variations in demand for natural gas and refined products;
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•
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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;
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political developments; and
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the factors described in greater detail under “Competition” and “Risk Factors” in Items 1 and 1A herein, and our other filings with the SEC.
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2
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Tesoro Logistics LP
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BUSINESS
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December 31, 2016
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3
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BUSINESS
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•
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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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North Dakota Gathering Systems, which consists of a crude oil and natural gas gathering system located in and around the Williston Basin;
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•
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Uinta Basin Gathering System, which consists of
natural
gas
gathering
systems and compression assets located in northeastern Utah;
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•
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Green River System, consisting of an integrated natural gas gathering and transportation system;
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•
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Vermillion Gathering System, which consists of natural gas gathering and compression assets located
in
Southern
Wyoming,
northwest Colorado and northeast Utah; and
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•
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certain equity method investments that contribute to our gathering systems including investments in:
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◦
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Rendezvous Gas Services, L.L.C. (“RGS”), which operates 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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◦
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Three Rivers Gathering, LLC, which transports natural gas to our natural gas processing facilities in the Uinta Basin; and
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◦
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Uintah
Basin
Field
Services,
L.L.C.,
which operates gathering pipeline and gas compression assets located in the southeastern Uinta Basin.
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4
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Tesoro Logistics LP
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BUSINESS
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•
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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 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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RGS,
which
operates
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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December 31, 2016
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5
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BUSINESS
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(a)
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Includes the gathering pipelines associated with the North Dakota Gathering and Processing Assets acquisition.
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6
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Tesoro Logistics LP
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BUSINESS
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(a)
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Capacity is measured in MMcf/d.
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(b)
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We have fractionation throughput capacity at our Blacks Fork
complex,
Robinson
Lake
complex
and
our
Belfield
complex of
15.0
Mbpd,
11.5
Mbpd and
7.2
Mbpd, respectively.
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(c)
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Included with the North Dakota Gathering and Processing Assets acquisition.
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•
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delivering crude oil, refined products and intermediate feedstocks from vessels to refineries and terminals;
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loading and unloading crude oil transported by unit train to Tesoro’s Anacortes refinery;
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marine loading and unloading;
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providing storage services;
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transferring refined products from terminals to trucks, barges and pipelines;
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transporting refined products;
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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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December 31, 2016
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7
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BUSINESS
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Terminal Location
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Products Handled
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Total Approximate Storage
Capacity (a)
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Dedicated Storage (b)
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California Marine Terminals
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Crude Oil; Intermediate Feedstocks; Gasoline; Diesel; Jet Fuel
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3,349,000
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2,231,000
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California Terminals and Storage Facilities
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Crude Oil; Diesel; Intermediate Feedstocks; Gasoline; Gasoline Blendstocks; Jet Fuel; Light Ends; NGLs
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20,159,000
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17,154,486
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Idaho
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Gasoline; Diesel; Jet Fuel
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878,000
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53,826
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Utah
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Gasoline; Diesel; Jet Fuel; Crude Oil Storage; Truck Unloading
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895,000
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878,000
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Washington
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Gasoline; Diesel; NGLs
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2,374,000
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1,602,977
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Alaska
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Gasoline; Diesel; Jet Fuel; Aviation Gasoline
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5,563,000
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4,156,424
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Total Crude Oil and Refined Products
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33,218,000
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26,076,713
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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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8
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Tesoro Logistics LP
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BUSINESS
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•
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tankage
with
shell
capacity
of approximately
5.8 million
barrels of crude oil, feedstock, and refined product
storage
located
at
Tesoro’s Martinez refinery, together with all related equipment and ancillary facilities used for the operation thereof (the “Tankage”);
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•
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the Avon Marine Terminal Assets; and
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•
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the pipelines, causeway and ancillary equipment that connect the Tankage to the Avon Marine Terminal, as well as all associated easements, permits and licenses.
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December 31, 2016
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9
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BUSINESS
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•
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tankage with a shell capacity of approximately 3.5 million barrels located at TAC’s refinery in Kenai, Alaska, related equipment and ancillary facilities used in the operation thereof;
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all of TAC’s limited liability company interests in Tesoro Alaska Terminals LLC, a wholly-owned subsidiary of TAC, which owns (i) a bulk tank farm and terminal facility located at the Port of Anchorage in Anchorage, Alaska with 580 thousand barrels of in-service storage capacity for refined products, a truck rack and a rail-loading facility, and (ii) a terminal facility located at the Fairbanks International Airport in Fairbanks, Alaska, with 22.5 thousand barrels of in-service capacity for refined products and a truck rack; and
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certain related assets used in connection with the foregoing assets.
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10
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Tesoro Logistics LP
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BUSINESS
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December 31, 2016
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11
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BUSINESS
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12
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Tesoro Logistics LP
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BUSINESS
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•
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pipelines operate as common carriers;
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access to transportation services and pipeline rates be non-discriminatory;
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transported
crude
oil
volumes
be
apportioned
without
unreasonable
discrimination if more crude oil is offered for transportation than can be transported immediately; and
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pipeline rates be just and reasonable.
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December 31, 2016
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13
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BUSINESS
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14
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Tesoro Logistics LP
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BUSINESS
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December 31, 2016
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15
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BUSINESS
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16
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Tesoro Logistics LP
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BUSINESS
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•
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damages to pipelines, plants and facilities, related equipment and surrounding properties caused by earthquakes, floods, fires, severe weather, explosions and other natural disasters as well as acts of terrorism;
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damage to pipelines and other assets from construction, farm and utility equipment;
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December 31, 2016
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17
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RISK FACTORS
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damage to third-party property or persons, including injury or loss of life;
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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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ruptures, fires and explosions;
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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; and
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other hazards.
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18
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Tesoro Logistics LP
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RISK FACTORS
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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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•
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the anticipated future prices of crude oil, refined products, NGLs and natural gas in surrounding markets.
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December 31, 2016
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19
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RISK FACTORS
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20
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Tesoro Logistics LP
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RISK FACTORS
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December 31, 2016
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21
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RISK FACTORS
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22
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Tesoro Logistics LP
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|
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RISK FACTORS
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•
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the risk of contract cancellation, non-renewal or failure to perform by their customers;
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•
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disruptions due to equipment interruption or failure at their facilities or at third-party facilities on which their business is dependent;
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•
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the timing and extent of changes in commodity prices and demand for their refined products, natural gas and NGLs, and the availability and market price of crude oil and other refinery feedstocks;
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December 31, 2016
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23
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RISK FACTORS
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•
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their ability to remain in compliance with the terms of their outstanding indebtedness;
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•
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changes in the cost or availability of third-party pipelines, terminals and other means of delivering and transporting crude oil, natural gas and NGLs, feedstocks and refined products;
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state and federal environmental, economic, health and safety, energy and other policies and regulations and any changes in those policies and regulations;
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•
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environmental incidents and violations and related remediation costs, fines and other liabilities; and
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•
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changes in crude oil, natural gas, NGLs and refined product inventory levels and carrying costs.
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24
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Tesoro Logistics LP
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RISK FACTORS
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December 31, 2016
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25
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RISK FACTORS
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•
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the volume of crude oil, natural gas, NGLs and refined products that we handle;
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•
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the tariff rates with respect to volumes we transport on our pipelines (including whether such tariffs are for long-haul or short-haul segments);
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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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•
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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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•
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other business risks impacting our cash levels.
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26
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Tesoro Logistics LP
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RISK FACTORS
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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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December 31, 2016
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27
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RISK FACTORS
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•
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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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28
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Tesoro Logistics LP
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RISK FACTORS
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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, which could require unitholders to sell their common units at an undesirable time and price, potentially resulting in no return on their investment or a tax liability on the sale of their 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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December 31, 2016
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29
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RISK FACTORS
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•
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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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•
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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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•
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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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•
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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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30
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Tesoro Logistics LP
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RISK FACTORS
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•
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our unitholders’ proportionate ownership interest in us will decrease;
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•
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the amount of cash available for distribution on each unit may decrease;
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•
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the relative voting strength of each previously outstanding unit may be diminished; and
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•
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the market price of our common units may decline.
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December 31, 2016
|
31
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RISK FACTORS
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•
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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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•
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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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•
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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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•
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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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•
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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.
|
32
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Tesoro Logistics LP
|
|
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RISK FACTORS
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December 31, 2016
|
33
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RISK FACTORS
|
34
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Tesoro Logistics LP
|
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RISK FACTORS
|
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December 31, 2016
|
35
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RISK FACTORS
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36
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Tesoro Logistics LP
|
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RISK FACTORS
|
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December 31, 2016
|
37
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LEGAL PROCEEDINGS AND MINE SAFETY DISCLOSURES
|
38
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Tesoro Logistics LP
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MARKET FOR EQUITY, STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES
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Trading Prices per
|
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Quarterly Cash Distribution per Unit (a)
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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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Distribution Date
|
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Record Date
|
|||||||
December 31, 2016
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$
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51.87
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$
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43.00
|
|
|
$
|
0.9100
|
|
|
February 14, 2017
|
|
February 3, 2017
|
September 30, 2016
|
50.70
|
|
|
44.55
|
|
|
0.8750
|
|
|
November 14, 2016
|
|
November 4, 2016
|
|||
June 30, 2016
|
51.35
|
|
|
41.22
|
|
|
0.8420
|
|
|
August 12, 2016
|
|
August 2, 2016
|
|||
March 31, 2016
|
51.43
|
|
|
35.18
|
|
|
0.8100
|
|
|
May 13, 2016
|
|
May 2, 2016
|
|||
December 31, 2015
|
56.92
|
|
|
41.24
|
|
|
0.7800
|
|
|
February 12, 2016
|
|
February 2, 2016
|
|||
September 30, 2015
|
57.90
|
|
|
40.14
|
|
|
0.7500
|
|
|
November 13, 2015
|
|
November 2, 2015
|
|||
June 30, 2015
|
61.74
|
|
|
53.01
|
|
|
0.7225
|
|
|
August 14, 2015
|
|
August 3, 2015
|
|||
March 31, 2015
|
60.19
|
|
|
49.33
|
|
|
0.6950
|
|
|
May 15, 2015
|
|
May 4, 2015
|
(a)
|
Represents cash distributions attributable to the quarter and declared and paid within
45
days of quarter end in accordance with our partnership agreement.
|
|
|
December 31, 2016
|
39
|
SELECTED FINANCIAL DATA
|
Period
|
Total Number of Units Purchased (a)
|
|
Average Price Paid per Unit
|
|
Total Number of Units Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Units that May Yet Be Purchased Remaining at Period End Under the Plan or Programs
(in millions)
|
||||||
October 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
November 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
December 2016
|
10,738
|
|
|
$
|
47.71
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
10,738
|
|
|
|
|
—
|
|
|
|
(a)
|
The entire 10,738 units were acquired from employees during the fourth quarter of 2016 to satisfy tax withholding obligations in connection with the vesting of performance phantom unit awards issued to them.
|
•
|
tankage, refined product storage, marine terminal terminalling and storage assets, pipelines, causeway and ancillary equipment located in Martinez, California, effective November 21, 2016;
|
•
|
all of the limited liability company interests in Tesoro Alaska Terminals, LLC, tankage, bulk tank farm, a truck rack and rail-loading facility, terminalling and other storage assets located in Kenai, Anchorage and Fairbanks, Alaska, completed in two stages on July 1, 2016 and September 16, 2016;
|
•
|
a crude oil and refined products storage tank facility located at Tesoro’s Los Angeles refinery and a
50%
fee interest in a pipeline that transports jet fuel from Tesoro’s Los Angeles refinery to the Los Angeles International Airport, effective
November 12, 2015
; and
|
•
|
truck terminals, storage tanks, rail loading and unloading facilities and a refined products pipeline 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”).
|
40
|
Tesoro Logistics LP
|
|
|
SELECTED FINANCIAL DATA
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2016 (a)
|
|
2015 (a)
|
|
2014 (a)
|
|
2013 (a)
|
|
2012 (a)
|
||||||||||
|
(In millions, except units and per unit amounts)
|
||||||||||||||||||
Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues (b)
|
$
|
1,220
|
|
|
$
|
1,112
|
|
|
$
|
600
|
|
|
$
|
313
|
|
|
$
|
164
|
|
Net earnings
|
$
|
315
|
|
|
$
|
249
|
|
|
$
|
56
|
|
|
$
|
18
|
|
|
$
|
48
|
|
Loss attributable to Predecessors
|
24
|
|
|
43
|
|
|
46
|
|
|
62
|
|
|
9
|
|
|||||
Net earnings attributable to noncontrolling interest
|
—
|
|
|
(20
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|||||
Net earnings attributable to partners
|
$
|
339
|
|
|
$
|
272
|
|
|
$
|
99
|
|
|
$
|
80
|
|
|
$
|
57
|
|
General partner’s interest in net earnings, including incentive distribution rights
|
$
|
152
|
|
|
$
|
73
|
|
|
$
|
43
|
|
|
$
|
12
|
|
|
$
|
3
|
|
Common unitholders’ interest in net earnings
|
$
|
187
|
|
|
$
|
199
|
|
|
$
|
43
|
|
|
$
|
46
|
|
|
$
|
28
|
|
Subordinated unitholders’ interest in net earnings
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
22
|
|
|
$
|
26
|
|
Net earnings per limited partner unit:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common - basic
|
$
|
1.87
|
|
|
$
|
2.33
|
|
|
$
|
0.96
|
|
|
$
|
1.48
|
|
|
$
|
1.90
|
|
Common - diluted
|
$
|
1.87
|
|
|
$
|
2.33
|
|
|
$
|
0.96
|
|
|
$
|
1.47
|
|
|
$
|
1.89
|
|
Subordinated - basic and diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.62
|
|
|
$
|
1.35
|
|
|
$
|
1.47
|
|
Cash distribution per unit
|
$
|
3.3070
|
|
|
$
|
2.8350
|
|
|
$
|
2.4125
|
|
|
$
|
2.0175
|
|
|
$
|
1.6050
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of December 31,
|
||||||||||||||||||
|
2016
|
|
2015 (a)
|
|
2014 (a)
|
|
2013 (a)
|
|
2012 (a)
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
5,860
|
|
|
$
|
5,131
|
|
|
$
|
4,955
|
|
|
$
|
1,560
|
|
|
$
|
381
|
|
Total debt, net of unamortized issuance costs
|
$
|
4,054
|
|
|
$
|
2,844
|
|
|
$
|
2,544
|
|
|
$
|
1,141
|
|
|
$
|
344
|
|
(a)
|
Includes the historical results related to TLLP and Predecessors for years 2016, 2015 and 2014. For years 2013 and 2012, recasted amounts for the recent 2016 dropdowns are not shown because management does not believe presentation of these impacts is material to an investor’s understanding of TLLP’s current operations.
|
(b)
|
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, with the exception of transportation regulated by the FERC and the Regulatory Commission of Alaska tariffs charged to Tesoro on the refined products pipeline included in the West Coast Logistics Assets Acquisition.
|
|
|
December 31, 2016
|
41
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
•
|
expand our assets on our Gathering and Processing segments located in the Bakken Shale/Williston Basin area of North Dakota and Montana (the “Bakken Region”) and Green River Basin, Uinta Basin and Vermillion Basin in the states of Utah, Colorado and Wyoming (the “Rockies Region”) in support of third-party demand for crude oil, natural
|
42
|
Tesoro Logistics LP
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
◦
|
further expanding capacity and capabilities as well as adding new origin and destination points for our common carrier pipelines in North Dakota and Montana (the “High Plains Pipeline”);
|
◦
|
expanding our crude oil, natural gas and water gathering and associated gas processing footprint in the Bakken Region to enhance and improve overall basin logistics efficiencies;
|
◦
|
increasing compression on our natural gas gathering systems in the Green River and Vermillion basins to enhance natural gas volumes recovered from existing wells and support potential new drilling activity;
|
◦
|
expanding our gathering footprint and increase compression capabilities in the Uinta basin to increase volumes on our gathering systems and through our processing assets; and
|
◦
|
pursuing strategic assets across the western U.S. including potential acquisitions from Tesoro.
|
•
|
grow our terminalling and transportation business across the western U.S. through:
|
◦
|
increasing our terminalling volumes by expanding capacity and growing our third-party services at certain of our terminals;
|
◦
|
optimizing Tesoro volumes and growing third-party throughput at our terminalling and transportation assets; and
|
◦
|
pursuing strategic assets in the western U.S. such as our acquisition of Tesoro’s terminalling assets and storage assets in Alaska and California.
|
|
|
December 31, 2016
|
43
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
•
|
increase throughput volumes on our common carrier crude oil gathering and transportation system in North Dakota and Montana (“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.
|
44
|
Tesoro Logistics LP
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
•
|
Financial non-GAAP measure of EBITDA, as defined above; and
|
•
|
Liquidity non-GAAP measures:
|
◦
|
Distributable Cash Flow—U.S. GAAP-based net cash flow from operating activities plus or minus changes in working capital, amounts spent on maintenance capital net of reimbursements and other adjustments not expected to settle in cash
|
◦
|
Pro Forma Distributable Cash Flow—Distributable Cash Flow plus or minus adjustments for the acquisition of noncontrolling interest in connection with the merger of QEP Midstream Partners, LP (“QEPM”) with TLLP completed in July 2015
|
•
|
our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or financing methods;
|
•
|
the ability of our assets to generate sufficient cash flow to make distributions to our unitholders;
|
•
|
our ability to incur and service debt and fund capital expenditures; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
|
|
December 31, 2016
|
45
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
46
|
Tesoro Logistics LP
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
|
Years Ended December 31,
|
||||||||||
|
2016 (a)
|
|
2015 (a)
|
|
2014 (a)
|
||||||
Reconciliation of Net Earnings to EBITDA:
|
|
|
|
|
|
||||||
Net earnings
|
$
|
315
|
|
|
$
|
249
|
|
|
$
|
56
|
|
Depreciation and amortization expense
|
190
|
|
|
187
|
|
|
85
|
|
|||
Interest and financing costs, net of capitalized interest
|
191
|
|
|
150
|
|
|
109
|
|
|||
Income tax expense
|
—
|
|
|
1
|
|
|
—
|
|
|||
EBITDA
|
$
|
696
|
|
|
$
|
587
|
|
|
$
|
250
|
|
|
|
|
|
|
|
||||||
Reconciliation of Net Cash from Operating Activities to Distributable Cash Flow and Pro Forma Distributable Cash Flow:
|
|
|
|
|
|
||||||
Net cash from operating activities (b)
|
$
|
498
|
|
|
$
|
436
|
|
|
$
|
165
|
|
Changes in assets and liabilities
|
44
|
|
|
19
|
|
|
(13
|
)
|
|||
Predecessors’ impact
|
17
|
|
|
34
|
|
|
37
|
|
|||
Maintenance capital expenditures (c)
|
(72
|
)
|
|
(54
|
)
|
|
(44
|
)
|
|||
Reimbursement for maintenance capital expenditures (c)
|
28
|
|
|
9
|
|
|
7
|
|
|||
Net earnings attributable to noncontrolling interest (d)
|
—
|
|
|
(18
|
)
|
|
(3
|
)
|
|||
Other adjustments for noncontrolling interest (e)
|
—
|
|
|
(21
|
)
|
|
8
|
|
|||
Adjustments for equity method investments (f)
|
2
|
|
|
(3
|
)
|
|
—
|
|
|||
Gain (loss) on sales of assets, net of proceeds
|
8
|
|
|
(1
|
)
|
|
14
|
|
|||
Other (g)
|
7
|
|
|
21
|
|
|
49
|
|
|||
Distributable Cash Flow
|
532
|
|
|
422
|
|
|
220
|
|
|||
Pro forma adjustment for acquisition of noncontrolling interest (h)
|
—
|
|
|
36
|
|
|
(1
|
)
|
|||
Pro Forma Distributable Cash Flow
|
$
|
532
|
|
|
$
|
458
|
|
|
$
|
219
|
|
(a)
|
Includes the historical results related to the Partnership and Predecessors for the years ended
December 31, 2016
,
2015
and
2014
.
|
(b)
|
During the second quarter of 2016, we revised our reconciliation of distributable cash flow and pro forma distributable cash flow by reconciling the liquidity measure from net cash from operating activities. There were no impacts to previously reported amounts as a result of this methodology change.
|
(c)
|
We adjust our reconciliation of distributable cash flows for maintenance capital expenditures, tank restoration costs and expenditures required to ensure the safety, reliability, integrity and regulatory compliance of our assets with an offset for any reimbursements received for such expenditures.
|
(d)
|
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 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.
|
(e)
|
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.
|
(f)
|
We adjust net cash from operating activities to reflect cash distributions received from equity method investments attributed to the period reported for the purposes of calculating distributable cash flow.
|
(g)
|
Other includes items that had a non-cash impact on our operations and should not be considered in distributable cash flow. Non-cash items primarily include the exclusion of the non-cash gain of
$6 million
recognized relating to the settlement of the Questar Gas Company litigation for the year ended
December 31, 2016
and the inclusion of
$13 million
for acquired deficiency revenue billings to customers for the year ended
December 31, 2015
. Non-cash items for the year ended December 31, 2014 primarily include $19 million of acquisition costs included in general and administrative expenses primarily related to the merger of QEPM into TLLP, $10 million for acquired deficiency revenue billings to customers, $7 million of costs for detailed inspection and maintenance program on the Northwest Products System and a gain of $5 million from TLLP’s sale of its Boise terminal.
|
(h)
|
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.
|
|
|
December 31, 2016
|
47
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
48
|
Tesoro Logistics LP
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
|
Years Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenues
|
|
|
|
||||
Gas gathering revenues
|
$
|
163
|
|
|
$
|
170
|
|
Crude oil gathering pipeline revenues
|
133
|
|
|
123
|
|
||
Crude oil trucking revenues
|
36
|
|
|
46
|
|
||
Other revenues
|
7
|
|
|
—
|
|
||
Total Revenues
|
339
|
|
|
339
|
|
||
Costs and Expenses
|
|
|
|
||||
Operating expenses (a)
|
131
|
|
|
119
|
|
||
General and administrative expenses
|
11
|
|
|
10
|
|
||
Depreciation and amortization expenses
|
62
|
|
|
67
|
|
||
Loss on asset disposals and impairments
|
3
|
|
|
1
|
|
||
Gathering Segment Operating Income
|
$
|
132
|
|
|
$
|
142
|
|
Volumes/Rates
|
|
|
|
||||
Gas gathering throughput (thousands of MMBtu/d) (b)
|
879
|
|
|
1,077
|
|
||
Average gas gathering revenue per MMBtu (b)
|
$
|
0.51
|
|
|
$
|
0.43
|
|
Crude oil gathering pipeline throughput (Mbpd)
|
212
|
|
|
188
|
|
||
Average crude oil gathering pipeline revenue per barrel
|
$
|
1.72
|
|
|
$
|
1.79
|
|
Crude oil trucking volume (Mbpd)
|
30
|
|
|
38
|
|
||
Average crude oil trucking revenue per barrel
|
$
|
3.23
|
|
|
$
|
3.25
|
|
(a)
|
Operating expenses include net imbalance settlement gains of
$3 million
,
$2 million
and
$7 million
in the years ended
December 31, 2016
,
2015
and
2014
, respectively.
|
(b)
|
Prior to deconsolidation of RGS as of January 1, 2016, fees paid by TLLP to RGS were eliminated upon consolidation and third-party transactions, including revenue and throughput volumes, were included in TLLP’s results of operations. Third party volumes associated with RGS, included in gas gathering volume for the years ended
December 31, 2015
and
2014
, were
141 thousand
MMBtu/d and
148 thousand
MMBtu/d, respectively and reduced our average gas gathering revenue by approximately
$0.05
per MMBtu for both periods.
|
(c)
|
We commenced natural gas gathering and processing operations with the acquisition of the Rockies Natural Gas Business in December 2014.
|
|
|
December 31, 2016
|
49
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
|
Years Ended December 31,
|
||||||
|
2015
|
|
2014 (c)
|
||||
Revenues
|
|
|
|
||||
Gas gathering revenues
|
$
|
170
|
|
|
$
|
11
|
|
Crude oil gathering pipeline revenues
|
123
|
|
|
66
|
|
||
Crude oil trucking revenues
|
46
|
|
|
58
|
|
||
Total Revenues
|
339
|
|
|
135
|
|
||
Costs and Expenses
|
|
|
|
||||
Operating expenses (a)
|
119
|
|
|
72
|
|
||
General and administrative expenses
|
10
|
|
|
5
|
|
||
Depreciation and amortization expenses
|
67
|
|
|
11
|
|
||
Loss on asset disposals
|
1
|
|
|
—
|
|
||
Gathering Segment Operating Income
|
$
|
142
|
|
|
$
|
47
|
|
Volumes/Rates
|
|
|
|
||||
Gas gathering throughput (thousands of MMBtu/d)
|
1,077
|
|
|
1,046
|
|
||
Average gas gathering revenue per MMBtu
|
$
|
0.43
|
|
|
$
|
0.41
|
|
Crude oil gathering pipeline throughput (Mbpd)
|
188
|
|
|
123
|
|
||
Average crude oil gathering pipeline revenue per barrel
|
$
|
1.79
|
|
|
$
|
1.46
|
|
Crude oil trucking volume (Mbpd)
|
38
|
|
|
49
|
|
||
Average crude oil trucking revenue per barrel
|
$
|
3.25
|
|
|
$
|
3.23
|
|
50
|
Tesoro Logistics LP
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
|
Years Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenues
|
|
|
|
||||
NGLs processing revenues
|
$
|
98
|
|
|
$
|
96
|
|
Fee-based processing revenues
|
106
|
|
|
107
|
|
||
Other processing revenues
|
72
|
|
|
75
|
|
||
Total Revenues
|
276
|
|
|
278
|
|
||
Costs and Expenses
|
|
|
|
||||
Operating expenses
|
120
|
|
|
125
|
|
||
General and administrative expenses
|
—
|
|
|
4
|
|
||
Depreciation and amortization expenses
|
45
|
|
|
44
|
|
||
Processing Segment Operating Income
|
$
|
111
|
|
|
$
|
105
|
|
Volumes/Rates
|
|
|
|
||||
NGLs processing throughput (Mbpd)
|
7.3
|
|
|
7.6
|
|
||
Average keep-whole fee per barrel of NGLs
|
$
|
36.53
|
|
|
$
|
34.46
|
|
Fee-based processing throughput (thousands of MMBtu/d)
|
639
|
|
|
743
|
|
||
Average fee-based processing revenue per MMBtu
|
$
|
0.45
|
|
|
$
|
0.39
|
|
|
|
December 31, 2016
|
51
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
|
Years Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Revenues
|
|
|
|
||||
NGLs processing revenues
|
$
|
96
|
|
|
$
|
7
|
|
Fee-based processing revenues
|
107
|
|
|
6
|
|
||
Other processing revenues
|
75
|
|
|
10
|
|
||
Total Revenues
|
278
|
|
|
23
|
|
||
Costs and Expenses
|
|
|
|
||||
Operating expenses
|
125
|
|
|
12
|
|
||
General and administrative expenses
|
4
|
|
|
1
|
|
||
Depreciation and amortization expenses
|
44
|
|
|
4
|
|
||
Processing Segment Operating Income
|
$
|
105
|
|
|
$
|
6
|
|
Volumes/Rates
|
|
|
|
||||
NGLs processing throughput (Mbpd)
|
7.6
|
|
|
6.5
|
|
||
Average keep-whole fee per barrel of NGLs
|
$
|
34.46
|
|
|
$
|
35.51
|
|
Fee-based processing throughput (thousands of MMBtu/d)
|
743
|
|
|
693
|
|
||
Average fee-based processing revenue per MMBtu
|
$
|
0.39
|
|
|
$
|
0.30
|
|
52
|
Tesoro Logistics LP
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
|
Years Ended December 31,
|
||||||||||
|
2016(a)
|
|
2015(a)
|
|
2014(a)
|
||||||
Revenues
|
|
|
|
|
|
||||||
Terminalling revenues
|
$
|
480
|
|
|
$
|
377
|
|
|
$
|
333
|
|
Pipeline transportation revenues
|
125
|
|
|
118
|
|
|
109
|
|
|||
Total Revenues
|
605
|
|
|
495
|
|
|
442
|
|
|||
Costs and Expenses
|
|
|
|
|
|
||||||
Operating expenses (b)
|
193
|
|
|
184
|
|
|
197
|
|
|||
General and administrative expenses
|
31
|
|
|
35
|
|
|
29
|
|
|||
Depreciation and amortization expenses
|
83
|
|
|
76
|
|
|
70
|
|
|||
Loss (gain) on asset disposals and impairments
|
1
|
|
|
—
|
|
|
(4
|
)
|
|||
Terminalling and Transportation Segment Operating Income
|
$
|
297
|
|
|
$
|
200
|
|
|
$
|
150
|
|
Volumes/Rates
|
|
|
|
|
|
||||||
Terminalling throughput (Mbpd)
|
984
|
|
|
955
|
|
|
952
|
|
|||
Average terminalling revenue per barrel
|
$
|
1.33
|
|
|
$
|
1.08
|
|
|
$
|
0.96
|
|
Pipeline transportation throughput (Mbpd)
|
868
|
|
|
825
|
|
|
822
|
|
|||
Average pipeline transportation revenue per barrel
|
$
|
0.39
|
|
|
$
|
0.39
|
|
|
$
|
0.36
|
|
(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 expenses include net imbalance settlement gains of
$3 million
,
$4 million
and
$10 million
in the years ended
December 31, 2016
,
2015
and
2014
, respectively.
|
|
|
December 31, 2016
|
53
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
54
|
Tesoro Logistics LP
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
Quarter Ended
|
Total Quarterly Distribution Per Unit
|
|
Total Quarterly Distribution Per Unit, Annualized
|
|
Total Cash Distribution
(in millions)
|
|
Date of Distribution
|
||||||
December 31, 2016
|
$
|
0.9100
|
|
|
$
|
3.64
|
|
|
$
|
140
|
|
|
February 14, 2017
|
September 30, 2016
|
0.8750
|
|
|
3.50
|
|
|
131
|
|
|
November 14, 2016
|
|||
June 30, 2016
|
0.8420
|
|
|
3.37
|
|
|
123
|
|
|
August 12, 2016
|
|||
March 31, 2016
|
0.8100
|
|
|
3.24
|
|
|
108
|
|
|
May 13, 2016
|
|||
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,
|
||||||
Debt, including current maturities:
|
2016
|
|
2015
|
||||
Revolving Credit Facility
|
$
|
330
|
|
|
$
|
305
|
|
Dropdown Credit Facility
|
—
|
|
|
—
|
|
||
TLLP Term Loan
|
—
|
|
|
250
|
|
||
5.500% Senior Notes due 2019
|
500
|
|
|
500
|
|
||
5.875% Senior Notes due 2020 (a)
|
470
|
|
|
470
|
|
||
6.125% Senior Notes due 2021 (a)
|
800
|
|
|
550
|
|
||
6.250% Senior Notes due 2022
|
800
|
|
|
800
|
|
||
6.375% Senior Notes due 2024
|
450
|
|
|
—
|
|
||
5.250% Senior Notes due 2025
|
750
|
|
|
—
|
|
||
Capital lease obligations and other
|
9
|
|
|
8
|
|
||
Total Debt
|
4,109
|
|
|
2,883
|
|
||
Unamortized Issuance Costs (a)
|
(55
|
)
|
|
(39
|
)
|
||
Debt, Net of Unamortized Issuance Costs
|
$
|
4,054
|
|
|
$
|
2,844
|
|
(a)
|
Unamortized premiums of
$4 million
associated with these senior notes are included in unamortized issuance costs at both
December 31, 2016
and
2015
.
|
|
|
December 31, 2016
|
55
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
Credit Facility
|
30 day Eurodollar (LIBOR) Rate at December 31, 2016
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
|
Commitment Fee
(unused portion)
|
Revolving Credit Facility (a)
|
0.77%
|
|
2.00%
|
|
3.75%
|
|
1.00%
|
|
0.375%
|
Dropdown Credit Facility (a)
|
0.77%
|
|
2.01%
|
|
3.75%
|
|
1.01%
|
|
0.375%
|
(a)
|
We have the option to elect if the borrowings will bear interest at either a base rate pus the base rate margin, or a Eurodollar rate, for the applicable period, plus the Eurodollar margin of the borrowing. The applicable margin varies based upon a certain leverage ratio, as defined by the Revolving Credit Facility. We also incur commitment fees for the unused portion of the Revolving Credit Facility at an annual rate. 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.
|
56
|
Tesoro Logistics LP
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
|
|
December 31, 2016
|
57
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
|
Years Ended December 31,
|
||||||||||
|
2016 (a)
|
|
2015 (a)
|
|
2014 (a)
|
||||||
Cash Flows From (Used In):
|
|
|
|
|
|
||||||
Operating Activities
|
$
|
498
|
|
|
$
|
436
|
|
|
$
|
165
|
|
Investing Activities
|
(318
|
)
|
|
(389
|
)
|
|
(2,690
|
)
|
|||
Financing Activities
|
492
|
|
|
(50
|
)
|
|
2,521
|
|
|||
Increase (Decrease) in Cash and Cash Equivalents
|
$
|
672
|
|
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
(a)
|
Includes the historical results related to the Partnership and Predecessors for the years ended
December 31, 2016
,
2015
and
2014
.
|
58
|
Tesoro Logistics LP
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
Major Projects
|
Total Project Expected Capital Expenditures
|
|
Actual 2016 Capital Expenditures
|
|||
Gathering Segment:
|
|
|
|
|
||
Uinta Compression (a)
|
$
|
50 - 60
|
|
$
|
36
|
|
Bakken Area Storage Hub (b)
|
|
25 - 30
|
|
5
|
|
|
High Plains Pipeline Expansion (c)
|
|
20 - 30
|
|
12
|
|
|
Terminalling and Transporting Segment:
|
|
|
|
|
||
Los Angeles Refinery Interconnect Pipeline System (d)
|
|
150 - 200
|
|
—
|
|
|
Terminal Expansions (e)
|
|
30 - 40
|
|
14
|
|
|
Avon Wharf Project (f)
|
|
185-195
|
|
58
|
|
(a)
|
Projects to increase compression for our Uinta natural gas gathering systems and expand our gathering system in the Uinta basin. We expect incremental volumes through our processing system upon the completion of the project.
|
(b)
|
The construction of the second phase of the Bakken Area Storage Hub provides storage tanks located in two strategic areas of the basin. With its completion during the first quarter of 2016, storage capacity has grown to over one million barrels. Amounts shown above for capital expenditures represent actual amounts spent on this completed project.
|
(c)
|
Projects to expand crude oil gathering throughput capacity on the High Plains Pipeline in McKenzie County, North Dakota. The expansion project’s expected capital expenditures may be reduced as a result of Tesoro’s recent acquisition of Great Northern Midstream and associated BakkenLink pipeline.
|
(d)
|
The pipeline interconnect project at the Los Angeles refinery is designed to provide direct connectivity between Tesoro’s refining sites. The proposed project is subject to final Board of Directors approval, project scoping, engineering and regulatory approval.
|
(e)
|
Projects to increase the throughput capacity and service capabilities at our crude oil and refined products terminals.
|
(f)
|
In connection with the Northern California Terminalling and Storage Assets acquisition, we acquired the Avon Wharf in Martinez, California. Our Predecessor’s regulatory and compliance project for the Avon Wharf was required under the California building code for Marine Oil Terminal Engineering and Maintenance Standards (“MOTEMS”). The project replaces the marine berth with a MOTEMS compliant structure that will improve clean product movements. The project is nearly complete with expected remaining capital expenditures of $8 million, which will be reimbursed by Tesoro.
|
|
|
December 31, 2016
|
59
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
Contractual Obligation
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term debt obligations (a)
|
$
|
232
|
|
|
$
|
232
|
|
|
$
|
726
|
|
|
$
|
671
|
|
|
$
|
1,287
|
|
|
$
|
2,225
|
|
|
$
|
5,373
|
|
Capital lease obligations (b)
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
7
|
|
|
12
|
|
|||||||
Operating lease obligations (c)
|
16
|
|
|
12
|
|
|
11
|
|
|
9
|
|
|
8
|
|
|
70
|
|
|
126
|
|
|||||||
Other purchase obligations (d)
|
86
|
|
|
86
|
|
|
86
|
|
|
87
|
|
|
49
|
|
|
—
|
|
|
394
|
|
|||||||
Capital expenditure obligations (e)
|
82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|||||||
Total Contractual Obligations
|
$
|
417
|
|
|
$
|
331
|
|
|
$
|
824
|
|
|
$
|
768
|
|
|
$
|
1,345
|
|
|
$
|
2,302
|
|
|
$
|
5,987
|
|
(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 NGLs transportation costs, fractionation fees, and fixed charges under the Third Amended and Restated Omnibus Agreement (“Amended Omnibus Agreement”), and the Secondment and Logistics Services 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, 2016
for the Amended Omnibus Agreement for disclosure purposes in the table above.
|
(e)
|
Minimum contractual spending requirements for certain capital projects.
|
60
|
Tesoro Logistics LP
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
|
|
December 31, 2016
|
61
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
62
|
Tesoro Logistics LP
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS
|
|
|
December 31, 2016
|
63
|
FINANCIAL STATEMENTS
|
64
|
Tesoro Logistics LP
|
|
|
FINANCIAL STATEMENTS
|
|
|
Years Ended December 31,
|
||||||||||
|
Note
|
2016 (a)
|
|
2015 (a)
|
|
2014 (a)
|
||||||
|
|
(In millions, except per unit amounts)
|
||||||||||
Revenues
|
|
|
|
|
|
|
||||||
Affiliate
|
3
|
$
|
715
|
|
|
$
|
615
|
|
|
$
|
497
|
|
Third-party
|
|
505
|
|
|
497
|
|
|
103
|
|
|||
Total Revenues
|
|
1,220
|
|
|
1,112
|
|
|
600
|
|
|||
Costs and Expenses:
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
471
|
|
|
468
|
|
|
324
|
|
|||
Imbalance settlement gains, net and reimbursements
|
|
(27
|
)
|
|
(40
|
)
|
|
(43
|
)
|
|||
General and administrative expenses
|
|
95
|
|
|
103
|
|
|
74
|
|
|||
Depreciation and amortization expenses
|
|
190
|
|
|
187
|
|
|
85
|
|
|||
Loss (gain) on asset disposals and impairments
|
|
4
|
|
|
1
|
|
|
(4
|
)
|
|||
Operating Income
|
|
487
|
|
|
393
|
|
|
164
|
|
|||
Interest and financing costs, net
|
|
(191
|
)
|
|
(150
|
)
|
|
(109
|
)
|
|||
Equity in earnings of equity method investments
|
6
|
13
|
|
|
7
|
|
|
1
|
|
|||
Other Income, net
|
|
6
|
|
|
—
|
|
|
—
|
|
|||
Earnings Before Income Taxes
|
|
315
|
|
|
250
|
|
|
56
|
|
|||
Income tax expense
|
|
—
|
|
|
1
|
|
|
—
|
|
|||
Net Earnings
|
|
$
|
315
|
|
|
$
|
249
|
|
|
$
|
56
|
|
|
|
|
|
|
|
|
||||||
Loss attributable to Predecessors
|
|
$
|
24
|
|
|
$
|
43
|
|
|
$
|
46
|
|
Net earnings attributable to noncontrolling interest
|
|
—
|
|
|
(20
|
)
|
|
(3
|
)
|
|||
Net earnings attributable to partners
|
|
339
|
|
|
272
|
|
|
99
|
|
|||
General partner’s interest in net earnings, including incentive distribution rights
|
|
(152
|
)
|
|
(73
|
)
|
|
(43
|
)
|
|||
Limited partners’ interest in net earnings
|
|
$
|
187
|
|
|
$
|
199
|
|
|
$
|
56
|
|
|
|
|
|
|
|
|
||||||
Net earnings per limited partner unit:
|
|
|
|
|
|
|
||||||
Common - basic
|
|
$
|
1.87
|
|
|
$
|
2.33
|
|
|
$
|
0.96
|
|
Common - diluted
|
|
$
|
1.87
|
|
|
$
|
2.33
|
|
|
$
|
0.96
|
|
Subordinated - basic and diluted
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.62
|
|
|
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
|
||||||
Common units - basic
|
|
98.2
|
|
|
84.7
|
|
|
54.2
|
|
|||
Common units - diluted
|
|
98.2
|
|
|
84.8
|
|
|
54.2
|
|
|||
Subordinated units - basic and diluted
|
|
—
|
|
|
—
|
|
|
5.6
|
|
|||
|
|
|
|
|
|
|
||||||
Cash distributions paid per unit
|
|
$
|
3.3070
|
|
|
$
|
2.8350
|
|
|
$
|
2.4125
|
|
(a)
|
All periods include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
|
|
December 31, 2016
|
65
|
FINANCIAL STATEMENTS
|
|
|
December 31,
|
||||||
|
Note
|
2016
|
|
2015 (a)
|
||||
|
|
(In millions, except unit amounts)
|
||||||
ASSETS
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
688
|
|
|
$
|
16
|
|
Receivables, net of allowance for doubtful accounts
|
|
|
|
|
||||
Trade
|
|
129
|
|
|
139
|
|
||
Affiliate
|
|
101
|
|
|
85
|
|
||
Prepayments and other current assets
|
|
20
|
|
|
12
|
|
||
Total Current Assets
|
|
938
|
|
|
252
|
|
||
Property, Plant, and Equipment, Net
|
4
|
3,444
|
|
|
3,681
|
|
||
Acquired Intangibles, Net
|
5
|
947
|
|
|
976
|
|
||
Goodwill
|
5
|
117
|
|
|
130
|
|
||
Equity Method Investments
|
6
|
337
|
|
|
58
|
|
||
Other Noncurrent Assets, Net
|
|
77
|
|
|
34
|
|
||
Total Assets
|
|
$
|
5,860
|
|
|
$
|
5,131
|
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
||||
Accounts payable
|
|
|
|
|
||||
Trade
|
|
$
|
69
|
|
|
$
|
106
|
|
Affiliate
|
|
56
|
|
|
48
|
|
||
Accrued interest and financing costs
|
|
42
|
|
|
31
|
|
||
Other current liabilities
|
7
|
45
|
|
|
61
|
|
||
Total Current Liabilities
|
|
212
|
|
|
246
|
|
||
Debt, Net of Unamortized Issuance Costs
|
8
|
4,053
|
|
|
2,844
|
|
||
Other Noncurrent Liabilities
|
|
53
|
|
|
58
|
|
||
Total Liabilities
|
|
4,318
|
|
|
3,148
|
|
||
Commitments and Contingencies
|
10
|
|
|
|
|
|
||
Equity
|
|
|
|
|
||||
Equity of Predecessors
|
|
—
|
|
|
205
|
|
||
Common unitholders:
102,981,495
units issued and outstanding (93,478,326 in 2015)
|
|
1,608
|
|
|
1,707
|
|
||
General partner:
2,100,900
units issued and outstanding (1,900,515 in 2015)
|
|
(66
|
)
|
|
(13
|
)
|
||
Noncontrolling interest
|
|
—
|
|
|
84
|
|
||
Total Equity
|
11
|
1,542
|
|
|
1,983
|
|
||
Total Liabilities and Equity
|
|
$
|
5,860
|
|
|
$
|
5,131
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
66
|
Tesoro Logistics LP
|
|
|
FINANCIAL STATEMENTS
|
|
Equity of Predecessors (a)
|
|
Partnership
|
|
Non-controlling Interest
|
|
Total
|
||||||||||||||||
|
|
Common
|
|
Subordinated
|
|
General Partner
|
|
|
|||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Balance at December 31, 2013
|
$
|
189
|
|
|
$
|
459
|
|
|
$
|
(161
|
)
|
|
$
|
(53
|
)
|
|
$
|
—
|
|
|
$
|
434
|
|
Sponsor contributions of equity to the Predecessors
|
53
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
||||||
Loss attributable to Predecessors
|
(46
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
||||||
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
|
—
|
|
|
(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
|
$
|
168
|
|
|
$
|
1,474
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
435
|
|
|
$
|
2,058
|
|
Sponsor contributions of equity to the Predecessors
|
116
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
116
|
|
||||||
Loss attributable to Predecessors
|
(43
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
||||||
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
|
—
|
|
|
(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
|
$
|
205
|
|
|
$
|
1,707
|
|
|
$
|
—
|
|
|
$
|
(13
|
)
|
|
$
|
84
|
|
|
$
|
1,983
|
|
Sponsor contributions of equity to the Predecessors
|
119
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
119
|
|
||||||
Loss attributable to Predecessors
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
||||||
Net liabilities not assumed by Tesoro Logistics LP
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||||
Allocation of net assets acquired by the unitholders
|
(322
|
)
|
|
310
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
||||||
Equity offering under ATM Program, net of issuance costs
|
—
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71
|
|
||||||
Proceeds from issuance of units, net of issuance costs
|
—
|
|
|
293
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
293
|
|
||||||
Effect of deconsolidation of RGS
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(84
|
)
|
|
(84
|
)
|
||||||
Quarterly distributions to unitholders and general partner
|
—
|
|
|
(324
|
)
|
|
—
|
|
|
(137
|
)
|
|
—
|
|
|
(461
|
)
|
||||||
Distributions to unitholders and general partner related to acquisitions
|
—
|
|
|
(679
|
)
|
|
—
|
|
|
(86
|
)
|
|
—
|
|
|
(765
|
)
|
||||||
Contributions
|
—
|
|
|
39
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
42
|
|
||||||
Net earnings excluding loss attributable to Predecessors
|
—
|
|
|
187
|
|
|
—
|
|
|
152
|
|
|
—
|
|
|
339
|
|
||||||
Other
|
—
|
|
|
4
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
7
|
|
||||||
Balance at December 31, 2016
|
$
|
—
|
|
|
$
|
1,608
|
|
|
$
|
—
|
|
|
$
|
(66
|
)
|
|
$
|
—
|
|
|
$
|
1,542
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
|
|
December 31, 2016
|
67
|
FINANCIAL STATEMENTS
|
|
Years Ended December 31,
|
||||||||||
|
2016 (a)
|
|
2015 (a)
|
|
2014 (a)
|
||||||
|
(In millions)
|
||||||||||
Cash Flows From (Used In) Operating Activities:
|
|
|
|
|
|
||||||
Net earnings
|
$
|
315
|
|
|
$
|
249
|
|
|
$
|
56
|
|
Adjustments to reconcile net earnings to net cash from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expenses
|
190
|
|
|
187
|
|
|
85
|
|
|||
Amortization of debt issuance costs
|
9
|
|
|
8
|
|
|
6
|
|
|||
Unit-based compensation expense
|
6
|
|
|
6
|
|
|
2
|
|
|||
Equity in earnings of equity method investments, net of distributions
|
16
|
|
|
3
|
|
|
(1
|
)
|
|||
Other non-cash operating activities
|
6
|
|
|
2
|
|
|
4
|
|
|||
Changes in receivables
|
(9
|
)
|
|
(21
|
)
|
|
(8
|
)
|
|||
Changes in other current assets
|
(5
|
)
|
|
(9
|
)
|
|
10
|
|
|||
Changes in current liabilities
|
(22
|
)
|
|
(6
|
)
|
|
9
|
|
|||
Changes in other noncurrent assets and liabilities
|
(8
|
)
|
|
17
|
|
|
2
|
|
|||
Net cash from operating activities
|
498
|
|
|
436
|
|
|
165
|
|
|||
Cash Flows From (Used In) Investing Activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(260
|
)
|
|
(383
|
)
|
|
(221
|
)
|
|||
Acquisitions, net of cash acquired
|
(30
|
)
|
|
(6
|
)
|
|
(2,479
|
)
|
|||
Deposits for acquisitions
|
(33
|
)
|
|
—
|
|
|
—
|
|
|||
Other investing activities
|
5
|
|
|
—
|
|
|
10
|
|
|||
Net cash used in investing activities
|
(318
|
)
|
|
(389
|
)
|
|
(2,690
|
)
|
|||
Cash Flows From (Used In) Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from debt offering
|
1,451
|
|
|
250
|
|
|
1,300
|
|
|||
Proceeds from issuance of common units, net of issuance costs
|
364
|
|
|
95
|
|
|
1,449
|
|
|||
Proceeds from issuance of general partner units, net of issuance costs
|
—
|
|
|
4
|
|
|
29
|
|
|||
Quarterly distributions to common and subordinated unitholders
|
(324
|
)
|
|
(240
|
)
|
|
(148
|
)
|
|||
Quarterly distributions to general partner
|
(137
|
)
|
|
(68
|
)
|
|
(35
|
)
|
|||
Distributions to noncontrolling interest
|
—
|
|
|
(22
|
)
|
|
—
|
|
|||
Distributions in connection with acquisitions from Tesoro
|
(760
|
)
|
|
(250
|
)
|
|
(243
|
)
|
|||
Borrowings under revolving credit agreements
|
1,451
|
|
|
476
|
|
|
646
|
|
|||
Repayments under revolving credit agreements
|
(1,426
|
)
|
|
(431
|
)
|
|
(386
|
)
|
|||
Repayments of long-term debt including capital leases
|
(251
|
)
|
|
—
|
|
|
(130
|
)
|
|||
Sponsor contributions of equity to the Predecessors
|
119
|
|
|
116
|
|
|
53
|
|
|||
Financing costs
|
(7
|
)
|
|
—
|
|
|
(21
|
)
|
|||
Payments of debt issuance costs
|
(21
|
)
|
|
(2
|
)
|
|
(19
|
)
|
|||
Contribution from general partner
|
4
|
|
|
—
|
|
|
8
|
|
|||
Capital contributions by affiliate
|
29
|
|
|
22
|
|
|
18
|
|
|||
Net cash from (used in) financing activities
|
492
|
|
|
(50
|
)
|
|
2,521
|
|
|||
Increase (Decrease) in Cash and Cash Equivalents
|
672
|
|
|
(3
|
)
|
|
(4
|
)
|
|||
Cash and Cash Equivalents, Beginning of Year
|
16
|
|
|
19
|
|
|
23
|
|
|||
Cash and Cash Equivalents, End of Year
|
$
|
688
|
|
|
$
|
16
|
|
|
$
|
19
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
68
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
December 31, 2016
|
69
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
•
|
tankage, refined product storage, marine terminal terminalling and storage assets, pipelines, causeway and ancillary equipment located in Martinez, California (the “Northern California Terminalling and Storage Assets”) effective November 21, 2016;
|
•
|
all of the limited liability company interests in Tesoro Alaska Terminals, LLC, tankage, bulk tank farm, a truck rack and rail-loading facility, terminalling and other storage assets located in Kenai, Anchorage and Fairbanks, Alaska (the “Alaska Storage and Terminalling Assets”) completed in two stages on July 1, 2016 and September 16, 2016;
|
•
|
a crude oil and refined products storage tank facility located at Tesoro’s Los Angeles refinery and a
50%
fee interest in a pipeline that transports jet fuel from Tesoro’s Los Angeles refinery to the Los Angeles International Airport (the “Los Angeles Storage and Handling Assets”) effective
November 12, 2015
; and
|
•
|
truck terminals, storage tanks, 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”).
|
70
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
December 31, 2016
|
71
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
•
|
the short term duration of the instruments (less than
two percent
for both our trade payables and 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.
|
72
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
December 31, 2016
|
73
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
74
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
December 31, 2016
|
75
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
76
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
December 31, 2016
|
77
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
78
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
Termination Provisions
|
|
Commercial Agreement
|
Initiation Date
|
Term
|
Renewals
|
Refinery Shutdown Notice Period (a)
|
Force Majeure
|
Transportation Agreement (High Plains System)
|
April 2011
|
10
|
2 x 5 years
|
12 months
|
TLLP can declare (unilateral)
|
Second Amended and Restated Master Terminalling Agreement
|
April 2011
|
10
|
2 x 5 years
|
||
Stockton Minimum Throughput Commitment (MTA supplement)
|
April 2011
|
10
|
2 x 5 years
|
||
Salt Lake City Storage Agreement
|
April 2011
|
10
|
2 x 5 years
|
||
Amended and Restated Transportation Services Agreement
|
April 2011
|
10
|
2 x 5 years
|
||
Amorco Terminal Use and Throughput Agreement (Martinez Marine)
|
April 2012
|
10
|
2 x 5 years
|
||
Amended Anacortes Track Use and Throughput Agreement
|
November 2012
|
10
|
2 x 5 years
|
N/A
|
|
Terminalling Services Agreement for Northwest Products System
|
June 2013
|
1
|
Year to year
|
||
Southern California Terminalling Services Agreement
|
June 2013
|
10
|
2 x 5 years
|
||
Carson Storage Services Agreement Amended
|
June 2013
|
10
|
2 x 5 years
|
||
Southern California Dedicated Storage Agreement
|
June 2013
|
10
|
2 x 5 years
|
||
Long Beach Storage Services Agreement
|
December 2013
|
10
|
2 x 5 years
|
||
Carson Coke Handling Service Agreement
|
December 2013
|
10
|
2 x 5 years
|
||
Long Beach Throughput Agreement (b)
|
December 2013
|
10
|
2 x 5 years
|
||
Transportation Services Agreement (SoCal Pipelines)
|
December 2013
|
10
|
2 x 5 years
|
||
Amended and Restated Long Beach Berth Access Use and Throughput Agreement
|
December 2013
|
10
|
2 x 5 years
|
||
BASH Storage - TRMC Tanks
|
April 2014
|
5
|
2 x 5 years
|
||
Terminalling Services Agreement - Martinez
|
July 2014
|
10
|
2 x 5 years
|
||
Terminalling Services Agreement - Nikiski
|
July 2014
|
10
|
2 x 5 years
|
||
Storage Services Agreement - Anacortes
|
July 2014
|
10
|
2 x 5 years
|
||
Martinez Dedicated LPG Storage Agreement
|
July 2014
|
10
|
2 x 5 years
|
||
THPP Reversal Open Season Northbound Commitment
|
September 2014
|
7
|
None
|
||
Tesoro Alaska Pipeline Throughput Agreement
|
September 2014
|
10
|
2 x 5 years
|
||
Transportation Services Agreement (LAR Short Haul Pipelines)
|
September 2014
|
10
|
2 x 5 years
|
||
Keep-Whole Commodity Fee Agreement
|
December 2014
|
5
|
1 year auto
|
90 days prior to expiration
|
Bilateral
|
Terminalling Services Agreement - Anacortes Rack
|
November 2015
|
10
|
2 x 5 years
|
N/A
|
TLLP can declare (unilateral)
|
Carson Tank Farm Storage Agreement
|
November 2015
|
10
|
2 x 5 years
|
||
Kenai Storage Services Agreement
|
July 2016
|
10
|
2 x 5 years
|
||
Alaska Terminalling Services Agreement
|
September 2016
|
10
|
2 x 5 years
|
||
Avon Marine Terminal Operating Agreement
|
November 2016
|
Effective date of sublease
|
None
|
||
Martinez Storage Services Agreement
|
November 2016
|
10
|
2 x 5 years
|
||
Asphalt and Propane Rack Loading Services Agreement
|
December 2016
|
10
|
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.
|
|
|
December 31, 2016
|
79
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
80
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues
|
$
|
715
|
|
|
$
|
615
|
|
|
$
|
497
|
|
Operating expenses
|
166
|
|
|
135
|
|
|
111
|
|
|||
Imbalance settlement gains, net and reimbursements from
Tesoro (a)
|
24
|
|
|
42
|
|
|
43
|
|
|||
General and administrative expenses
|
69
|
|
|
72
|
|
|
39
|
|
(a)
|
Includes net imbalance settlement gains of
$7 million
,
$8 million
and
$17 million
in the years ended
December 31, 2016
,
2015
and
2014
, 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
$17 million
,
$34 million
and
$26 million
in the years ended
December 31, 2016
,
2015
and
2014
, respectively.
|
|
|
December 31, 2016
|
81
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Gathering (a)
|
$
|
1,406
|
|
|
$
|
1,700
|
|
Processing
|
577
|
|
|
565
|
|
||
Terminalling and Transportation (b)
|
2,076
|
|
|
1,897
|
|
||
Property, Plant and Equipment, at Cost
|
4,059
|
|
|
4,162
|
|
||
Accumulated depreciation (a) (b)
|
(615
|
)
|
|
(481
|
)
|
||
Property, Plant and Equipment, Net
|
$
|
3,444
|
|
|
$
|
3,681
|
|
(a)
|
We recognized a decrease of
$363 million
to net property, plant and equipment as of January 1, 2016, as a result of the deconsolidation of RGS. See Note 6 for further discussion of the deconsolidation of RGS.
|
(b)
|
Assets owned by us for which we are the lessor under operating leases were
$385 million
and
$252 million
before accumulated depreciation of
$111 million
and
$41 million
as of
December 31, 2016
and
2015
, respectively.
|
82
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
•
|
RGS.
We have a
78%
interest in RGS, which owns and operates the infrastructure that transports gas from certain fields to several re-delivery points in southwestern Wyoming, including natural gas processing facilities that are owned by us or a third party. Prior to 2016, we consolidated RGS, however, upon our reassessment performed in conjunction with the adoption of ASU 2015-02 as of January 1, 2016, we determined RGS represented a variable interest entity to us for which we are not the primary beneficiary. Under the limited liability company agreement, we do not have voting rights commensurate with our economic interest due to veto rights available to our partner in RGS. Certain business decisions, including, but not limited to, decisions with respect to significant expenditures or contractual commitments, annual budgets, material financings, dispositions of assets or amending the members’ gas servicing agreements, require unanimous approval of the members.
|
•
|
TRG.
We own a
50%
interest in TRG located in the southeastern Uinta Basin. TRG was formed with Ute Energy to transport natural gas gathered by UBFS and other third-party volumes to gas processing facilities. The Three Rivers Gathering system is primarily supported by long-term, fee-based gas gathering agreements with minimum volume commitments.
|
•
|
UBFS.
We own a
38%
interest in UBFS which owns and operates the natural gas gathering infrastructure located in the southeastern Uinta Basin and is supported by long-term, fee-based gas gathering agreements that contain firm throughput commitments, which generate fees whether or not the capacity is used, and is operated by us.
|
|
RGS
|
|
TRG
|
|
UBFS
|
|
Total
|
||||||||
Balance at December 31, 2014
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
18
|
|
|
$
|
58
|
|
Investments
|
—
|
|
|
3
|
|
(c)
|
—
|
|
(c)
|
3
|
|
||||
Equity in earnings
|
—
|
|
|
5
|
|
|
2
|
|
|
7
|
|
||||
Distributions received
|
—
|
|
|
(6
|
)
|
|
(4
|
)
|
|
(10
|
)
|
||||
Balance at December 31, 2015 (a)
|
—
|
|
|
42
|
|
|
16
|
|
|
58
|
|
||||
Effect of deconsolidation (b)
|
295
|
|
|
—
|
|
|
—
|
|
|
295
|
|
||||
Equity in earnings
|
8
|
|
|
2
|
|
|
3
|
|
|
13
|
|
||||
Distributions received
|
(22
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
(29
|
)
|
||||
Balance at December 31, 2016 (a)
|
$
|
281
|
|
|
$
|
40
|
|
|
$
|
16
|
|
|
$
|
337
|
|
(a)
|
The carrying amount of our investments in RGS, TRG and UBFS exceeded the underlying equity in net assets by
$135 million
,
$16 million
and
$7 million
, respectively, at
December 31, 2016
. The carrying amount of our investments in TRG and UBFS exceeded the underlying equity in net assets by
$17 million
and
$8 million
, respectively, at
December 31, 2015
. The carrying amounts of our investments that exceed the underlying equity in net assets are amortized over the useful life of the underlying fixed assets and included in equity in earnings (loss).
|
(b)
|
We recognized an increase of
$295 million
to equity method investments as of January 1, 2016 as a result of the deconsolidation of RGS. The carrying amount of our investment in RGS exceeded the underlying equity in net assets by
$135 million
at
December 31, 2016
|
(c)
|
Includes the final fair value adjustment resulting from measurement period changes related to TLLP’s Rockies Natural Gas Business in 2015.
|
|
|
December 31, 2016
|
83
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Legal
|
$
|
—
|
|
|
$
|
21
|
|
Accrued environmental liabilities
|
17
|
|
|
21
|
|
||
Asset retirement obligation
|
6
|
|
|
1
|
|
||
Other
|
22
|
|
|
18
|
|
||
Total Other Current Liabilities
|
$
|
45
|
|
|
$
|
61
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Revolving Credit Facility
|
$
|
330
|
|
|
$
|
305
|
|
Dropdown Credit Facility
|
—
|
|
|
—
|
|
||
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 (a)
|
800
|
|
|
550
|
|
||
6.250% Senior Notes due 2022
|
800
|
|
|
800
|
|
||
6.375% Senior Notes due 2024
|
450
|
|
|
—
|
|
||
5.250% Senior Notes due 2025
|
750
|
|
|
—
|
|
||
Capital lease obligations
|
9
|
|
|
8
|
|
||
Total Debt
|
4,109
|
|
|
2,883
|
|
||
Unamortized issuance costs (a)
|
(55
|
)
|
|
(39
|
)
|
||
Current maturities, net of unamortized issuance costs
|
(1
|
)
|
|
—
|
|
||
Debt, Net of Current Maturities and Unamortized Issuance Costs
|
$
|
4,053
|
|
|
$
|
2,844
|
|
(a)
|
Unamortized premiums of
$4 million
associated with these senior notes are included in unamortized issuance costs at both
December 31, 2016
and
2015
.
|
84
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
•
|
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.
|
|
|
December 31, 2016
|
85
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
86
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
December 31, 2016
|
87
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31, 2016
|
||
2017
|
$
|
1
|
|
2018
|
1
|
|
|
2019
|
1
|
|
|
2020
|
1
|
|
|
2021
|
1
|
|
|
Thereafter
|
7
|
|
|
Total minimum lease payments
|
12
|
|
|
Less amount representing interest
|
(3
|
)
|
|
Capital lease obligations
|
$
|
9
|
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Operating leases
|
$
|
16
|
|
|
$
|
12
|
|
|
$
|
11
|
|
|
$
|
9
|
|
|
$
|
8
|
|
|
$
|
70
|
|
|
$
|
126
|
|
Purchase obligations
|
86
|
|
|
86
|
|
|
86
|
|
|
87
|
|
|
49
|
|
|
—
|
|
|
394
|
|
|||||||
Total
|
$
|
102
|
|
|
$
|
98
|
|
|
$
|
97
|
|
|
$
|
96
|
|
|
$
|
57
|
|
|
$
|
70
|
|
|
$
|
520
|
|
88
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
Tioga Crude Oil Pipeline Release
|
|
Other Liabilities
|
|
Total
|
||||||
At December 31, 2014
|
$
|
25
|
|
|
$
|
7
|
|
|
$
|
32
|
|
Additions
|
24
|
|
|
1
|
|
|
25
|
|
|||
Expenditures
|
(22
|
)
|
|
(2
|
)
|
|
(24
|
)
|
|||
At December 31, 2015
|
27
|
|
|
6
|
|
|
33
|
|
|||
Additions
|
7
|
|
|
1
|
|
|
8
|
|
|||
Expenditures
|
(18
|
)
|
|
(1
|
)
|
|
(19
|
)
|
|||
At December 31, 2016
|
$
|
16
|
|
|
$
|
6
|
|
|
$
|
22
|
|
|
|
December 31, 2016
|
89
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
90
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
December 31, 2016
|
91
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net earnings
|
$
|
315
|
|
|
$
|
249
|
|
|
$
|
56
|
|
Net earnings attributable to noncontrolling interest
|
—
|
|
|
(20
|
)
|
|
(3
|
)
|
|||
Special allocation of net earnings (“Special Allocation”) (a)
|
3
|
|
|
—
|
|
|
7
|
|
|||
Net earnings, excluding noncontrolling interest and including special allocations
|
318
|
|
|
229
|
|
|
60
|
|
|||
General partner’s distributions
|
(10
|
)
|
|
(6
|
)
|
|
(5
|
)
|
|||
General partner’s IDRs (b)
|
(148
|
)
|
|
(69
|
)
|
|
(41
|
)
|
|||
Limited partners’ distributions on common units
|
(344
|
)
|
|
(259
|
)
|
|
(157
|
)
|
|||
Limited partner’s distributions on subordinated units (c)
|
—
|
|
|
—
|
|
|
(14
|
)
|
|||
Distributions greater than earnings
|
$
|
(184
|
)
|
|
$
|
(105
|
)
|
|
$
|
(157
|
)
|
General partner’s earnings:
|
|
|
|
|
|
||||||
Distributions
|
$
|
10
|
|
|
$
|
6
|
|
|
$
|
5
|
|
General partners IDRs (b)
|
148
|
|
|
69
|
|
|
41
|
|
|||
Allocation of distributions greater than earnings (d)
|
(27
|
)
|
|
(44
|
)
|
|
(49
|
)
|
|||
Total general partner’s earnings (loss)
|
$
|
131
|
|
|
$
|
31
|
|
|
$
|
(3
|
)
|
Limited partners’ earnings on common units:
|
|
|
|
|
|
||||||
Distributions
|
$
|
344
|
|
|
$
|
259
|
|
|
$
|
157
|
|
Special Allocation
|
(3
|
)
|
|
—
|
|
|
(7
|
)
|
|||
Allocation of distributions greater than earnings
|
(157
|
)
|
|
(61
|
)
|
|
(98
|
)
|
|||
Total limited partners’ earnings on common units
|
$
|
184
|
|
|
$
|
198
|
|
|
$
|
52
|
|
Limited partner’s earnings on subordinated units (c):
|
|
|
|
|
|
||||||
Distributions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
Allocation of distributions greater than earnings
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||
Total limited partner’s earnings on subordinated units
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Weighted average limited partner units outstanding:
|
|
|
|
|
|
||||||
Common units - basic
|
98.2
|
|
|
84.7
|
|
|
54.2
|
|
|||
Common unit equivalents
|
—
|
|
|
0.1
|
|
|
—
|
|
|||
Common units - diluted
|
98.2
|
|
|
84.8
|
|
|
54.2
|
|
|||
Subordinated units - basic and diluted (c)
|
—
|
|
|
—
|
|
|
5.6
|
|
|||
Net earnings per limited partner unit:
|
|
|
|
|
|
||||||
Common - basic
|
$
|
1.87
|
|
|
$
|
2.33
|
|
|
$
|
0.96
|
|
Common - diluted
|
$
|
1.87
|
|
|
$
|
2.33
|
|
|
$
|
0.96
|
|
Subordinated - basic and diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.62
|
|
(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 common units held by TLGP for the interest incurred in connection with borrowings on the Dropdown Credit Facility in lieu of using cash on hand to fund the Alaska Storage and Terminalling Assets acquisition during the year ended
December 31, 2016
.
|
(b)
|
IDRs entitle the general partner to receive increasing percentages, up to
50%
, of quarterly distributions in excess of
$0.3881
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
, waived by TLGP.
|
(c)
|
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
.
|
(d)
|
We have revised the historical allocation of general partner earnings to include the Predecessors’ losses of
$24 million
,
$43 million
and
$46 million
for the years ended
December 31, 2016
,
2015
and
2014
, respectively.
|
92
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net earnings attributable to partners
|
$
|
339
|
|
|
$
|
272
|
|
|
$
|
99
|
|
General partner’s IDRs
|
(148
|
)
|
|
(69
|
)
|
|
(41
|
)
|
|||
Special Allocation
|
3
|
|
|
—
|
|
|
7
|
|
|||
Net earnings available to partners
|
$
|
194
|
|
|
$
|
203
|
|
|
$
|
65
|
|
General partner’s ownership interest
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|||
General partner’s allocated interest in net earnings
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
1
|
|
General partner’s IDRs
|
148
|
|
|
69
|
|
|
41
|
|
|||
Allocation of Predecessors’ impact to general partner interest
|
(24
|
)
|
|
(43
|
)
|
|
(46
|
)
|
|||
Total general partner’s interest in net earnings (loss)
|
$
|
128
|
|
|
$
|
30
|
|
|
$
|
(4
|
)
|
|
Common
|
|
Subordinated
|
|
General Partner
|
|
Total
|
||||
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
|
|
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
|
7.1
|
|
|
—
|
|
|
—
|
|
|
7.1
|
|
Issuance in November 2015 in connection with the LA Storage and Handling Assets acquisition
|
4.3
|
|
|
—
|
|
|
0.3
|
|
|
4.6
|
|
Unit-based compensation awards
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
At December 31, 2015
|
93.5
|
|
|
—
|
|
|
1.9
|
|
|
95.4
|
|
Issuances under ATM Program
|
1.4
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
Issuance of units in June 2016 for cash (a)
|
6.3
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
Issuance in July 2016 in connection with the Alaska Storage and Terminalling Assets acquisition (b)
|
0.4
|
|
|
—
|
|
|
0.2
|
|
|
0.6
|
|
Issuance in September 2016 in connection with the Alaska Storage and Terminalling Assets acquisition (b)
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
Issuance in November 2016 in connection with the Northern California Terminalling and Storage Assets acquisition (c)
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
Unit-based compensation awards
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
At December 31, 2016
|
103.0
|
|
|
—
|
|
|
2.1
|
|
|
105.1
|
|
(a)
|
In June 2016, we issued common units representing limited partner interests in a registered public offering, including the over-allotment option exercised by the underwriter for the purchase of common units.
|
(b)
|
On
July 1
and
September 16, 2016
, we issued general partner and common units to Tesoro and TLGP in connection with the completion of the Alaska Storage and Terminalling Assets acquisition discussed in Note 2.
|
(c)
|
On
November 21, 2016
, we issued common units to Tesoro and TLGP in connection with the Northern California Terminalling and Storage Assets acquisition discussed in Note 2.
|
|
|
December 31, 2016
|
93
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
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%
|
94
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
Years Ended December 31,
|
||||||||||
|
2016 (a)
|
|
2015 (a)
|
|
2014 (a)
|
||||||
General partner’s distributions:
|
|
|
|
|
|
||||||
General partner’s distributions
|
$
|
(10
|
)
|
|
$
|
(6
|
)
|
|
$
|
(5
|
)
|
General partner’s IDRs (b)
|
(148
|
)
|
|
(69
|
)
|
|
(41
|
)
|
|||
Total general partner’s distributions
|
$
|
(158
|
)
|
|
$
|
(75
|
)
|
|
$
|
(46
|
)
|
|
|
|
|
|
|
||||||
Limited partners’ distributions:
|
|
|
|
|
|
||||||
Common
|
$
|
(344
|
)
|
|
$
|
(259
|
)
|
|
$
|
(157
|
)
|
Subordinated
|
—
|
|
|
—
|
|
|
(14
|
)
|
|||
Total limited partners’ distributions
|
(344
|
)
|
|
(259
|
)
|
|
(171
|
)
|
|||
Total Cash Distributions
|
$
|
(502
|
)
|
|
$
|
(334
|
)
|
|
$
|
(217
|
)
|
(a)
|
Our distributions are declared subsequent to quarter end; therefore, the following table represents total cash distributions applicable to the period in which the distributions are earned.
|
(b)
|
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,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Capital expenditures included in accounts payable at period end
|
$
|
30
|
|
|
$
|
54
|
|
|
$
|
50
|
|
Capital expenditures included in affiliate payable at period end
|
8
|
|
|
—
|
|
|
17
|
|
|||
Capital leases and other
|
2
|
|
|
—
|
|
|
4
|
|
|||
Predecessors’ net liabilities not assumed by Tesoro Logistics LP
|
22
|
|
|
3
|
|
|
1
|
|
|||
Receivable from affiliate for capital expenditures
|
4
|
|
|
6
|
|
|
3
|
|
|
|
December 31, 2016
|
95
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
•
|
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; and
|
•
|
equity method investments, which operate gathering pipeline and gas compression assets and transports natural gas to our natural gas processing facilities, located in the Uinta Basin.
|
•
|
the Vermillion processing complex;
|
•
|
the Uinta Basin processing complex;
|
•
|
the Blacks Fork processing complex fractionation facility; and
|
•
|
the Emigrant Trail processing complex.
|
•
|
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;
|
•
|
marine terminals in California that load and unload vessels;
|
•
|
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 pipeline that transports jet fuel from Tesoro’s Los Angeles refinery to the Los Angeles International Airport;
|
•
|
a regulated common carrier products pipeline and a jet fuel pipeline to the Salt Lake City International Airport
|
•
|
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
|
96
|
Tesoro Logistics LP
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues
|
|
|
|
|
|
||||||
Gathering:
|
|
|
|
|
|
||||||
Affiliate
|
$
|
81
|
|
|
$
|
89
|
|
|
$
|
105
|
|
Third-party
|
258
|
|
|
250
|
|
|
30
|
|
|||
Total Gathering
|
339
|
|
|
339
|
|
|
135
|
|
|||
Processing:
|
|
|
|
|
|
||||||
Affiliate
|
98
|
|
|
96
|
|
|
7
|
|
|||
Third-party
|
178
|
|
|
182
|
|
|
16
|
|
|||
Total Processing
|
276
|
|
|
278
|
|
|
23
|
|
|||
Terminalling and Transportation: (a)
|
|
|
|
|
|
||||||
Affiliate
|
536
|
|
|
430
|
|
|
385
|
|
|||
Third-party
|
69
|
|
|
65
|
|
|
57
|
|
|||
Total Terminalling and Transportation
|
605
|
|
|
495
|
|
|
442
|
|
|||
Total Segment Revenues
|
$
|
1,220
|
|
|
$
|
1,112
|
|
|
$
|
600
|
|
Segment Operating Income
|
|
|
|
|
|
||||||
Gathering
|
$
|
132
|
|
|
$
|
142
|
|
|
$
|
47
|
|
Processing
|
111
|
|
|
105
|
|
|
6
|
|
|||
Terminalling and Transportation
|
297
|
|
|
200
|
|
|
150
|
|
|||
Total Segment Operating Income
|
540
|
|
|
447
|
|
|
203
|
|
|||
Unallocated general and administrative expenses
|
(53
|
)
|
|
(54
|
)
|
|
(39
|
)
|
|||
Interest and financing costs, net
|
(191
|
)
|
|
(150
|
)
|
|
(109
|
)
|
|||
Equity in earnings of equity method investments
|
13
|
|
|
7
|
|
|
1
|
|
|||
Other Income, net
|
6
|
|
|
—
|
|
|
—
|
|
|||
Earnings Before Income Taxes
|
$
|
315
|
|
|
$
|
250
|
|
|
$
|
56
|
|
|
|
|
|
|
|
||||||
Depreciation and Amortization Expense
|
|
|
|
|
|
||||||
Gathering
|
$
|
62
|
|
|
$
|
67
|
|
|
$
|
11
|
|
Processing
|
45
|
|
|
44
|
|
|
4
|
|
|||
Terminalling and Transportation
|
83
|
|
|
76
|
|
|
70
|
|
|||
Total Depreciation and Amortization Expense
|
$
|
190
|
|
|
$
|
187
|
|
|
$
|
85
|
|
|
|
|
|
|
|
||||||
Capital Expenditures
|
|
|
|
|
|
||||||
Gathering
|
$
|
99
|
|
|
$
|
213
|
|
|
$
|
156
|
|
Processing
|
20
|
|
|
15
|
|
|
4
|
|
|||
Terminalling and Transportation
|
154
|
|
|
158
|
|
|
112
|
|
|||
Total Capital Expenditures
|
$
|
273
|
|
|
$
|
386
|
|
|
$
|
272
|
|
(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, 2016
|
97
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Identifiable Assets
|
|
|
|
||||
Gathering
|
$
|
1,765
|
|
|
$
|
1,850
|
|
Processing
|
1,627
|
|
|
1,619
|
|
||
Terminalling and Transportation
|
1,768
|
|
|
1,641
|
|
||
Other (a)
|
700
|
|
|
21
|
|
||
Total Identifiable Assets
|
$
|
5,860
|
|
|
$
|
5,131
|
|
(a)
|
Other consists mainly of
$688 million
in cash and cash equivalents as of
December 31, 2016
, which was used to fund the acquisition of the North Dakota Gathering and Processing Assets on
January 1, 2017
.
|
|
Quarters
|
|
|
||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Total Year
|
||||||||||
2016
|
(In millions, except per unit amounts)
|
||||||||||||||||||
Revenues
|
$
|
300
|
|
|
$
|
293
|
|
|
$
|
308
|
|
|
$
|
319
|
|
|
$
|
1,220
|
|
Operating expenses
|
117
|
|
|
113
|
|
|
113
|
|
|
128
|
|
|
471
|
|
|||||
Operating income
|
119
|
|
|
118
|
|
|
127
|
|
|
123
|
|
|
487
|
|
|||||
Net earnings
|
85
|
|
|
76
|
|
|
81
|
|
|
73
|
|
|
315
|
|
|||||
Limited partners' interest in net earnings
|
60
|
|
|
47
|
|
|
48
|
|
|
32
|
|
|
187
|
|
|||||
Net earnings per limited partner unit (a):
|
|
|
|
|
|
|
|
|
|
||||||||||
Common - basic
|
$
|
0.64
|
|
|
$
|
0.48
|
|
|
$
|
0.46
|
|
|
$
|
0.31
|
|
|
$
|
1.87
|
|
Common - diluted
|
$
|
0.64
|
|
|
$
|
0.48
|
|
|
$
|
0.46
|
|
|
$
|
0.31
|
|
|
$
|
1.87
|
|
2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
263
|
|
|
$
|
275
|
|
|
$
|
282
|
|
|
$
|
292
|
|
|
$
|
1,112
|
|
Operating expenses
|
101
|
|
|
115
|
|
|
117
|
|
|
135
|
|
|
468
|
|
|||||
Operating income
|
99
|
|
|
97
|
|
|
100
|
|
|
97
|
|
|
393
|
|
|||||
Net earnings
|
65
|
|
|
60
|
|
|
65
|
|
|
59
|
|
|
249
|
|
|||||
Limited partners' interest in net earnings
|
50
|
|
|
49
|
|
|
54
|
|
|
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
|
|
(a)
|
The sum of four quarters may not equal annual results due to rounding or the quarterly number of units outstanding.
|
98
|
Tesoro Logistics LP
|
|
|
CHANGE AND DISAGREEMENTS, CONTROLS AND PROCEDURES, AND OTHER INFORMATION
|
|
|
December 31, 2016
|
99
|
FINANCIAL STATEMENTS
|
100
|
Tesoro Logistics LP
|
|
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
•
|
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.
|
•
|
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.
|
|
|
December 31, 2016
|
101
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
102
|
Tesoro Logistics LP
|
|
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
|
|
December 31, 2016
|
103
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
104
|
Tesoro Logistics LP
|
|
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
|
|
December 31, 2016
|
105
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
•
|
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, 2016, for filing with the SEC.
|
106
|
Tesoro Logistics LP
|
|
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
•
|
reviewing our executive compensation programs to ensure that they are adequate to attract, motivate and retain competent executive personnel and that they directly and materially relate 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 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.
|
|
|
December 31, 2016
|
107
|
EXECUTIVE COMPENSATION
|
Name
|
Fees Earned or Paid in Cash (a)
|
|
Fair Value of Service Phantom Unit Awards (b) (c)
|
|
All Other Compensation
|
|
Total
|
||||||||
Raymond J. Bromark
|
$
|
127,000
|
|
|
$
|
86,407
|
|
|
$
|
—
|
|
|
$
|
213,407
|
|
James H. Lamanna
|
109,000
|
|
|
86,407
|
|
|
—
|
|
|
195,407
|
|
||||
Thomas C. O’Connor
|
127,000
|
|
|
86,407
|
|
|
—
|
|
|
213,407
|
|
||||
Robert W. Goldman
|
105,000
|
|
|
—
|
|
|
—
|
|
|
105,000
|
|
||||
Michael E. Wiley
|
102,000
|
|
|
—
|
|
|
—
|
|
|
102,000
|
|
(a)
|
The amounts shown in this column include the portion of the annual retainer earned in
2016
, any individual retainers for serving as the chair of a committee earned in 2016 and the Board and committee meeting fees paid in
2016
.
|
(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 U.S. GAAP.
|
(c)
|
The following table shows the total service phantom units outstanding as of December 31,
2016
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
|
2,009
|
James H. Lamanna
|
2,009
|
Thomas C. O’Connor
|
2,009
|
Robert W. Goldman
|
—
|
Michael E. Wiley
|
—
|
108
|
Tesoro Logistics LP
|
|
|
EXECUTIVE COMPENSATION
|
•
|
Gregory J. Goff, Chief Executive Officer and Chairman of the Board;
|
•
|
Steven M. Sterin, Executive Vice President, Chief Financial Officer and Director;
|
•
|
Phillip M. Anderson, President and Director;
|
•
|
Don J. Sorensen, Senior Vice President, Operations; and
|
•
|
Kim K. W. Rucker, Executive 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. Decisions related to his compensation are made by our general partner’s board of directors, but are based in large part on the recommendation of the compensation committee of Tesoro’s board of directors. Because several of our general partner’s directors are also officers of our general partner or Tesoro, our general partner’s board of directors 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 Tesoro subsidiaries. Because of this role as a Senior Vice President of Tesoro, decisions related to Mr. Sorensen’s compensation are made by Tesoro’s compensation committee. However, because Mr. Sorensen also serves as an executive officer of our general partner and our general partner pays a significant portion of his compensation, decisions related to his compensation must be approved by our general partner’s board of directors (based in large part on the recommendation of the Tesoro’s compensation committee). These compensation decisions are delegated to the Chairman of the Board and the independent directors.
|
•
|
Messrs. Goff and Sterin, and Ms. Rucker
- Decisions related to compensation of our general partner’s executive officers that are employed by Tesoro are made by Tesoro’s compensation committee. Any determination with respect to awards made under the Tesoro Logistics LP 2011 Long-Term Incentive Plan (as amended and restated, 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 Tesoro’s compensation committee. Any other compensation decisions for these individuals are not subject to any approvals by our general partner’s board of directors or committees.
|
|
|
December 31, 2016
|
109
|
EXECUTIVE COMPENSATION
|
•
|
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 by our guiding principles, which are core values, exceptional people, shared purpose, powerful collaboration and superior execution.
|
110
|
Tesoro Logistics LP
|
|
|
EXECUTIVE COMPENSATION
|
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
|
|
|
December 31, 2016
|
111
|
EXECUTIVE COMPENSATION
|
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
2016
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.
|
112
|
Tesoro Logistics LP
|
|
|
EXECUTIVE COMPENSATION
|
•
|
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 $3.122 billion
|
50
|
|
92%
|
Management of costs to no more than $3.254 billion
|
17.5
|
|
92%
|
Business improvements (including CII, synergy and other projects and initiatives) of $252 million
|
17.5
|
|
200%
|
Personal Safety improvement
|
5
|
|
200%
|
Process Safety Management improvement
|
5
|
|
200%
|
Environmental improvement
|
5
|
|
200%
|
Overall Tesoro Corporate Performance Achieved
|
|
|
127%
|
TLLP Goals
|
Weighting (%)
|
Result / Performance
|
EBITDA of $796 million for 2016 base business
|
15
|
$720 million (below target)
|
Various Business Improvement Objectives (including improvement in EBITDA through Optimization and Organic Initiatives of $115 million)
|
60
|
$70 million (below target)
|
OSHA combined recordable rate of 0
|
10
|
1 recordable injury (below target)
|
Management of costs to no more than $7.66 million
|
15
|
$6.26 (above target)
|
Overall TLLP Performance Achieved
|
110%
|
|
|
December 31, 2016
|
113
|
EXECUTIVE COMPENSATION
|
Name
|
|
Bonus Eligible Earnings
|
|
Target Bonus
|
|
Overall Performance Achieved
|
|
Calculated Bonus Payout
|
|
Individual Performance Adjustments (Increase/ Decrease)
|
|
Total Bonus Payout
|
||||||
Phillip M. Anderson
|
|
$
|
378,038
|
|
|
75%
|
|
110%
|
|
$
|
311,882
|
|
|
10%
|
|
$
|
340,235
|
|
Don J. Sorensen
|
|
$
|
406,538
|
|
|
65%
|
|
125%
|
|
$
|
330,312
|
|
|
—
|
|
$
|
330,312
|
|
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
|
|
—
|
114
|
Tesoro Logistics LP
|
|
|
EXECUTIVE COMPENSATION
|
|
|
December 31, 2016
|
115
|
EXECUTIVE COMPENSATION
|
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
|
|
2016
|
|
$ (f)
|
|
|
$
|
2,129,175
|
|
|
$ (f)
|
|
|
$ (f)
|
|
|
$ (f)
|
|
|
$
|
2,129,175
|
|
|
2015
|
|
(f)
|
|
|
2,345,798
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
2,345,798
|
|
|||
|
2014
|
|
(f)
|
|
|
1,917,842
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
1,917,842
|
|
|||
Phillip M. Anderson
President
|
|
2016
|
|
378,365
|
|
|
202,820
|
|
|
340,235
|
|
|
250,421
|
|
|
11,341
|
|
|
1,183,182
|
|
||
|
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
|
|
|||
Don J. Sorensen
Senior Vice President, Operations
|
|
2016
|
|
366,404
|
|
|
243,345
|
|
|
297,281
|
|
|
269,017
|
|
|
387,525
|
|
|
1,563,572
|
|
||
|
2015
|
|
342,000
|
|
|
234,633
|
|
|
318,745
|
|
|
153,939
|
|
|
281,277
|
|
|
1,330,594
|
|
|||
Steven M. Sterin
Vice President and Chief Financial Officer
|
|
2016
|
|
(f)
|
|
|
431,919
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
431,919
|
|
||
|
2015
|
|
(f)
|
|
|
410,558
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
410,558
|
|
|||
|
2014
|
|
(f)
|
|
|
—
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
—
|
|
|||
Kim K.W. Rucker
Vice President and General Counsel
|
|
2016
|
|
(f)
|
|
|
324,444
|
|
|
(f)
|
|
|
(f)
|
|
|
(f)
|
|
|
324,444
|
|
(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, 2016. For Mr. Sorensen, this includes 90% of his base salary expense from January 1, 2015 through December 31, 2016.
|
116
|
Tesoro Logistics LP
|
|
|
EXECUTIVE COMPENSATION
|
(b)
|
The amounts shown in this column for 2016 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 - $4,258,350; Mr. Anderson - $405,640; Mr. Sorensen - $486,691; Mr. Sterin - $863,837; and Ms. Rucker - $648,889. For Messrs. Goff and Sterin, and Ms. Rucker, this amount represents 25% of their 2016 long-term incentive values as recommended by the Tesoro compensation committee and awarded by the Board of our general partner. For Mr. Goff, this amount was increased from 20% of his total long-term incentive compensation in 2014. 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 2016, 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 2016 is 90%.
|
(e)
|
The amounts shown in this column for 2016 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 2016 were $11,341 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.
|
(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 2016). The matching contribution for 2016 was $18,734 for Mr. Sorensen.
|
(3)
|
Tesoro Relocation Benefits: Tesoro provided benefits in 2016 under its relocation program for Mr. Sorensen in connection with his promotion in the amount of $354,481.
|
(f)
|
As noted above, no compensation has been reported for Mr. Goff, Mr. Sterin, and Ms. Rucker because, other than grants of performance phantom units, none of their compensation is allocated to us. The
$11 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)
|
|
Grant date fair value of unit awards (c)
|
||||||||||||||||||||||
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
||||||||||||||||||||
Gregory J. Goff
|
|
Phantom Units
|
|
2/9/2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22,119
|
|
|
$
|
44,238
|
|
|
$
|
88,476
|
|
|
$
|
2,219,175
|
|
Phillip M. Anderson
|
|
Annual Incentive
|
|
N/A
|
|
141,764
|
|
|
283,529
|
|
|
567,058
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
Phantom Units
|
|
2/9/2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,107
|
|
|
4,214
|
|
|
8,428
|
|
|
202,820
|
|
||||||||
Don J. Sorensen
|
|
Annual Incentive
|
|
N/A
|
|
118,913
|
|
|
237,825
|
|
|
475,650
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
Phantom Units
|
|
2/9/2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,528
|
|
|
5,056
|
|
|
10,112
|
|
|
243,345
|
|
||||||||
Steven M. Sterin
|
|
Phantom Units
|
|
2/9/2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,487
|
|
|
8,974
|
|
|
17,948
|
|
|
431,919
|
|
|||||||
Kim K.W. Rucker
|
|
Phantom Units
|
|
3/14/2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,371
|
|
|
6,741
|
|
|
13,482
|
|
|
324,444
|
|
(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 2016 ICP reflected is 100% for Mr. Anderson and 90% for Mr. Sorensen. We are not responsible for any portion of the other NEOs’ 2016 ICP.
|
(b)
|
The amounts shown in these columns represent the number of performance phantom units granted during 2016 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, 2016 through December 31, 2018. 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 up 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.
|
|
|
December 31, 2016
|
117
|
EXECUTIVE COMPENSATION
|
|
|
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
|
|
2/9/2016
|
|
—
|
|
|
$
|
—
|
|
|
44,238
|
|
|
$
|
2,359,522
|
|
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
35,122
|
|
|
1,976,824
|
|
|||
Phillip M. Anderson
|
|
2/9/2016
|
|
—
|
|
|
—
|
|
|
4,214
|
|
|
224,762
|
|
||
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
3,161
|
|
|
177,915
|
|
|||
Don J. Sorensen
|
|
2/9/2016
|
|
—
|
|
|
—
|
|
|
5,056
|
|
|
269,672
|
|
||
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
3,513
|
|
|
197,727
|
|
|||
Steven M. Sterin
|
|
2/9/2016
|
|
—
|
|
|
—
|
|
|
8,974
|
|
|
478,646
|
|
||
|
2/12/2015
|
|
—
|
|
|
—
|
|
|
6,147
|
|
|
345,981
|
|
|||
Kim K.W. Rucker
|
|
3/14/2016
|
|
—
|
|
|
—
|
|
|
6,741
|
|
|
359,545
|
|
(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 30, 2016 of $50.81, as reported on the NYSE, was used to calculate the market value of the unvested unit awards.
|
(b)
|
These awards represent TLLP performance phantom units, which are the right to receive a number of common units at the end of the performance period depending on our achievement of relative total unitholder return against a defined performance peer group. Each award will vest at the end of the relevant performance period, subject to performance. For each award, the number of unvested units and the payout values shown assume a payout at target; for all such awards, the payout value also includes any outstanding distribution equivalent rights that will be paid to the executive once both the award has vested and the payout results have been certified by the TLGP Board of Directors. The performance period for each award, as well as the amount of outstanding distribution equivalent rights included in the payout value is shown for each of the executives below:
|
|
Dividend Equivalent Rights Accrued as of 12/31/2016 ($)
|
|||
Name
|
TLLP Performance Phantom Units
Granted February 2016 for all NEOs other than Ms. Rucker (Granted March 2016)
(Performance Period of 1/1/2016-12/31/2018)
|
TLLP Performance Phantom Units
Granted February 2015
(Performance Period of 1/1/2015-12/31/2017)
|
||
Gregory J. Goff
|
111,789
|
|
192,275
|
|
Philip M. Anderson
|
10,649
|
|
17,305
|
|
Don J. Sorensen
|
12,777
|
|
19,232
|
|
Steven M. Sterin
|
22,677
|
|
33,652
|
|
Kim K.W. Rucker
|
17,035
|
|
—
|
|
118
|
Tesoro Logistics LP
|
|
|
EXECUTIVE COMPENSATION
|
|
|
Unit Awards
|
|||||
Name
|
|
Number of Units Acquired on Vesting (a)
|
|
Value Realized on Vesting (b)
|
|||
Gregory J. Goff
|
|
16,459
|
|
|
$
|
1,025,552
|
|
Philip M. Anderson
|
|
1,830
|
|
|
114,026
|
|
|
Don J. Sorensen
|
|
—
|
|
|
—
|
|
|
Steven M. Sterin
|
|
—
|
|
|
—
|
|
|
Kim K.W. Rucker
|
|
—
|
|
|
—
|
|
(a)
|
Reflects the vesting of the payout of the performance phantom units that were granted in 2014 for Messrs. Goff and Anderson.
|
(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 17, 2017 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 - $131,499; and Mr. Anderson - $14,621.
|
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
|
|
|
568,905
|
|
|
—
|
|
|
Restoration Retirement Plan
|
|
12
|
|
|
1,057,640
|
|
|
—
|
|
|
Don J. Sorensen
|
|
Tesoro Corporation Retirement Plan
|
|
22
|
|
|
850,118
|
|
|
—
|
|
|
Restoration Retirement Plan
|
|
22
|
|
|
608,891
|
|
|
—
|
|
|
Steven M. Sterin
|
|
— (c)
|
|
— (c)
|
|
|
— (c)
|
|
|
— (c)
|
|
Kim K.W. Rucker
|
|
— (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, 2016
for financial reporting purposes. These assumptions include a discount rate of 4.12%, a cash balance interest crediting rate of 3.12%, the use of the RP-2016 Mortality Table with generational mortality improvements in accordance with Scale MP-2016 and for the Tesoro Corporation Retirement Plan, that each employee will elect a lump sum payment at retirement using an interest rate of 4.12% and the PPA 2017 Mortality Table. The Partnership reimburses Tesoro for the pension expense that is allocated to us for employees of our general partner. During
2016
, 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 Mr. Goff, Mr. Sterin, and Ms. Rucker is allocated to us. The
$11 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.
|
|
|
December 31, 2016
|
119
|
EXECUTIVE COMPENSATION
|
120
|
Tesoro Logistics LP
|
|
|
EXECUTIVE COMPENSATION
|
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
|
|
—
|
|
|
—
|
|
|
498
|
|
|
—
|
|
|
7,580
|
|
|||||
Don J. Sorensen
|
|
24,392
|
|
|
20,815
|
|
|
19,505
|
|
|
—
|
|
|
242,279
|
|
|||||
Steven M. Sterin
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Kim K.W. Rucker
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(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 Messrs. Anderson and Sorensen have previously been reported in the Summary Compensation Tables for previous years, including the following amounts: Mr. Anderson - $4,398 for 2015 and $2,170 for 2014; and Mr. Sorensen - $48,043 for 2015.
|
|
|
December 31, 2016
|
121
|
EXECUTIVE COMPENSATION
|
Name
|
Scenario
|
Severance ($)
|
Accelerated Equity Vesting ($)
|
Retirement Benefits ($)
|
Health Benefits ($)
|
Outplacement Services ($)
|
Total ($)
|
||||||
Goff
|
w/o Cause or w/Good Reason
|
—
|
|
1,186,140
|
|
—
|
|
—
|
|
—
|
|
1,186,140
|
|
Term. after Change-in-Control
|
—
|
|
4,336,346
|
|
—
|
|
—
|
|
—
|
|
4,336,346
|
|
|
Retirement or Voluntary Term.
|
—
|
|
1,186,140
|
|
—
|
|
—
|
|
—
|
|
1,186,140
|
|
|
Death
|
—
|
|
1,976,824
|
|
—
|
|
—
|
|
—
|
|
1,976,824
|
|
|
Disability
|
—
|
|
1,976,824
|
|
—
|
|
—
|
|
—
|
|
1,976,824
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Anderson
|
w/o Cause or w/Good Reason
|
—
|
|
106,772
|
|
—
|
|
—
|
|
—
|
|
106,772
|
|
Term. after Change-in-Control
|
1,330,000
|
|
402,677
|
|
228,338
|
|
42,891
|
|
—
|
|
2,003,906
|
|
|
Retirement or Voluntary Term.
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
—
|
|
252,854
|
|
—
|
|
—
|
|
—
|
|
252,854
|
|
|
Disability
|
—
|
|
252,854
|
|
—
|
|
—
|
|
—
|
|
252,854
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Sorensen
|
w/o Cause or w/Good Reason
|
914,914
|
|
118,648
|
|
—
|
|
25,226
|
|
31,500
|
|
1,090,288
|
|
Term. after Change-in-Control
|
1,217,700
|
|
467,399
|
|
—
|
|
30,271
|
|
—
|
|
1,715,370
|
|
|
Retirement or Voluntary Term.
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
—
|
|
287,654
|
|
—
|
|
—
|
|
—
|
|
287,654
|
|
|
Disability
|
—
|
|
287,654
|
|
—
|
|
—
|
|
—
|
|
287,654
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Sterin
|
w/o Cause or w/Good Reason
|
—
|
|
207,634
|
|
—
|
|
—
|
|
—
|
|
207,634
|
|
Term. after Change-in-Control
|
—
|
|
824,627
|
|
—
|
|
—
|
|
—
|
|
824,627
|
|
|
Retirement or Voluntary Term.
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
—
|
|
505,565
|
|
—
|
|
—
|
|
—
|
|
505,565
|
|
|
Disability
|
—
|
|
505,565
|
|
—
|
|
—
|
|
—
|
|
505,565
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Rucker
|
w/o Cause or w/Good Reason
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Term. after Change-in-Control
|
—
|
|
359,545
|
|
—
|
|
—
|
|
—
|
|
359,545
|
|
|
Retirement or Voluntary Term.
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
—
|
|
119,848
|
|
—
|
|
—
|
|
—
|
|
119,848
|
|
|
Disability
|
—
|
|
119,848
|
|
—
|
|
—
|
|
—
|
|
119,848
|
|
|
w/Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
•
|
INVOLUNTARY TERMINATION WITHOUT CAUSE.
Pursuant to the Tesoro Executive Severance and Change-in-Control Plan, Mr. Sorensen will receive an amount equal to one and one-half times the sum of his base salary and the average bonuses paid during the preceding three years. Severance will be paid in a lump sum following the end of the six months after termination. The Partnership’s portion of the severance, as reflected in the table, is 90% for Mr. Sorensen.
|
•
|
TERMINATION WITH A CHANGE-IN-CONTROL.
Pursuant to Mr. Anderson’s management stability agreement, in the event of a termination by Tesoro without cause or by the NEO with good reason within two years following a change-
|
122
|
Tesoro Logistics LP
|
|
|
EXECUTIVE COMPENSATION
|
•
|
INVOLUNTARY TERMINATION WITHOUT CAUSE.
Pursuant to the award agreements, as Mr. Goff is retirement eligible and Mr. Anderson, Mr. Sorensen, Mr. Sterin and Ms. Rucker have worked a minimum of twelve months during the performance period, as applicable, they will receive a pro-rated payout of their TLLP performance phantom units based on actual performance at the end of the performance period and will be paid the accumulated distribution equivalent rights on those units.
|
•
|
TERMINATION WITH A CHANGE-IN-CONTROL.
Pursuant to the award agreements for awards granted in 2015, Messrs. Goff, Anderson, Sorensen and Sterin will vest in their performance phantom units at target and will be paid the accumulated distribution equivalent rights accumulated on those units. Beginning with the 2016 awards, each NEO will vest in their performance phantom units at the greater of actual performance or target and will be paid the accumulated distribution equivalent rights accumulated on those units.
|
•
|
RETIREMENT OR VOLUNTARY TERMINATION.
Pursuant to the award agreements, as Mr. Goff is retirement eligible, he will receive a pro-rated award of his performance phantom units based on the actual performance at the end of the performance period along with the accumulated distribution equivalent rights. Mr. Anderson, Mr. Sorensen, Mr. Stein and Ms. Rucker 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 for awards granted in 2015, Messrs. Goff, Anderson, Sorensen and Sterin will vest in their performance phantom units at target and will be paid the accumulated distribution equivalent rights accumulated on those units. As Mr. Goff is retirement eligible, he will receive a pro-rated award of his performance phantom units, granted in 2016, based on the actual performance at the end of the performance period along with the accumulated distribution equivalent rights. Each NEO (other than Mr. Goff) will receive a pro-rated award of their performance phantom units, granted in 2016, based on the target performance with the accumulated distribution equivalent rights.
|
•
|
TERMINATION WITH A CHANGE-IN-CONTROL.
Pursuant to his management stability agreement, Mr. Anderson 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. Mr. Sorensen does not receive any additional service credit under Tesoro’s Executive Severance and CIC Plan. 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.
|
•
|
INVOLUNTARY TERMINATION WITHOUT CAUSE.
Pursuant to Tesoro’s Executive Severance and CIC Plan, Mr. Sorensen will receive medical benefits for eighteen months. The Partnership’s portion, as reflected in the table, is 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.
|
•
|
TERMINATION WITH A CHANGE-IN-CONTROL.
Pursuant to Mr. Anderson’s management stability agreement, he will receive health and welfare coverage for two years. Pursuant to Tesoro’s Executive Severance and CIC Plan, Mr. Sorensen will receive medical benefits 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.
|
•
|
INVOLUNTARY TERMINATION WITHOUT CAUSE.
Pursuant to Tesoro’s Executive Severance and CIC Plan, Mr. Sorensen will receive outplacement services for up to twelve months commencing after date of termination. The Partnership’s portion, as reflected in the table, is 90% for Mr. Sorensen.
|
|
|
December 31, 2016
|
123
|
EXECUTIVE COMPENSATION
|
•
|
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 15, 2017
.
|
•
|
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 15, 2017
, there were
102,996,246
common units outstanding (including
34,055,042
common units held by Tesoro Corporation and its affiliates). This table does not include the
2,100,900
general partner units held by Tesoro Logistics GP, LLC.
|
•
|
None of our executive officers or directors hold general partner units.
|
124
|
Tesoro Logistics LP
|
|
|
SECURITY OWNERSHIP AND RELATED STOCKHOLDER MATTERS
|
|
Aggregate Number of Units Beneficially Owned
|
|
Percent of Total Outstanding
|
||
Gregory J. Goff
|
97,690
|
|
|
*
|
|
Phillip M. Anderson
|
27,207
|
|
|
*
|
|
Raymond J. Bromark
|
10,561
|
|
(1
|
)
|
*
|
Robert W. Goldman
|
4,100
|
|
|
*
|
|
James H. Lamanna
|
9,785
|
|
(1
|
)
|
*
|
Thomas C. O’Connor
|
15,326
|
|
(1
|
)
|
*
|
Kim K.W. Rucker
|
—
|
|
|
*
|
|
Don J. Sorensen
|
1,177
|
|
|
*
|
|
Steven M. Sterin
|
3,814
|
|
|
*
|
|
Michael E. Wiley
|
—
|
|
|
*
|
|
All Current Directors and Executive Officers as a Group (12 individuals)
|
169,660
|
|
|
*
|
*
|
Less than 1% of units outstanding.
|
(1)
|
Includes 1,371 common units underlying phantom units.
|
|
Aggregate Number of Shares Beneficially Owned
|
|
Percent of Total Outstanding
|
Additional Information
|
||
Gregory J. Goff
|
769,633
|
|
(1
|
)
|
*
|
Includes 151,513 shares underlying stock options and 609 shares under the Tesoro Corporation Thrift Plan
|
Phillip M. Anderson
|
6,964
|
|
(2
|
)
|
*
|
Includes 1,742 shares under the Tesoro Corporation Thrift Plan
|
Raymond J. Bromark
|
—
|
|
|
*
|
|
|
Robert W. Goldman
|
47,662
|
|
|
*
|
Includes 9,000 shares underlying stock options and 4,532 shares underlying restricted stock units
|
|
James H. Lamanna
|
—
|
|
|
*
|
|
|
Thomas C. O’Connor
|
—
|
|
|
*
|
|
|
Kim K.W. Rucker
|
—
|
|
|
*
|
|
|
Don J. Sorensen
|
15,782
|
|
(3
|
)
|
*
|
|
Steven M. Sterin
|
8,892
|
|
|
*
|
|
|
Michael E. Wiley
|
37,787
|
|
|
*
|
Includes 9,000 shares underlying stock options
|
|
All Current Directors and Executive Officers as a Group (12 individuals)
|
886,720
|
|
|
*
|
|
*
|
Less than 1% of outstanding common stock.
|
(1)
|
Includes 32,115 performance shares based on ROCE scheduled to vest within 60 days.
|
(2)
|
Includes 714 performance shares based on ROCE scheduled to vest within 60 days.
|
(3)
|
Includes 800 performance shares based on ROCE scheduled to vest within 60 days.
|
|
|
December 31, 2016
|
125
|
SECURITY OWNERSHIP AND RELATED STOCKHOLDER MATTERS
|
|
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
|
34,055,042
|
|
|
33.1%
|
|
2,100,900
|
|
|
100%
|
|
34.4%
|
Tortoise Capital Advisors, LLC (c)
11550 Ash Street, Suite 300
Leawood, KS 66211
|
11,165,489
|
|
|
10.8%
|
|
—
|
|
—
|
|
10.6%
|
|
Center Coast Capital Advisors, LP (d)
1600 Smith Street, Suite 3800
Houston, TX 77002
|
5,361,917
|
|
|
5.2%
|
|
—
|
|
—
|
|
5.1%
|
(a)
|
As of
February 15, 2017
, there were
102,996,246
common units and
2,100,900
general partner units outstanding, for an aggregate of 105,097,146
units.
|
(b)
|
As of
February 15, 2017
, Tesoro Corporation directly held 15,620,925 common units. Affiliates of Tesoro Corporation also held common and general partner units: Tesoro Refining & Marketing Company LLC directly held 8,067,981 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 9,644,050 common units and 2,100,900 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.
|
(c)
|
Based on Amendment No. 7 to a Schedule 13G/A filed with the SEC on February 13, 2017, Tortoise Capital Advisors has sole voting and investment power with respect to 187,460 common units, shared voting power with respect to 9,750,559 common units, and shared investment power with respect to 10,978,029 common units.
|
(d)
|
Based on a Schedule 13G filed with the SEC on January 10, 2017, Center Coast Capital Advisors, LP has shared voting and investment power with respect to 5,361,917 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
|
382,593
|
|
|
—
|
|
|
1,085,464
|
|
Equity compensation plans not approved by
security holders
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
382,593
|
|
|
—
|
|
|
1,085,464
|
|
(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, as amended and restated on October 4, 2016. 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 204,977 units to be issued and 1,263,080 units remaining available for future issuance.
|
(b)
|
No value is shown in column (b) because 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.
|
126
|
Tesoro Logistics LP
|
|
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
|
•
|
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, or any series of similar transactions, between the related person and us that involve less than $120,000 during the fiscal year.
|
|
|
December 31, 2016
|
127
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
•
|
our obligation to pay Tesoro an annual corporate services fee, currently in the amount of approximately
$11 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.
|
128
|
Tesoro Logistics LP
|
|
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
|
|
|
December 31, 2016
|
129
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
|
Years Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Audit Fees (a)
|
$
|
1,210
|
|
|
$
|
1,360
|
|
Audit-Related Fees
|
—
|
|
|
—
|
|
||
Tax Fees
|
—
|
|
|
—
|
|
||
All Other Fees
|
—
|
|
|
—
|
|
||
Total
|
$
|
1,210
|
|
|
$
|
1,360
|
|
(a)
|
Audit Fees represent the aggregate fees for professional services rendered by EY in connection with its audits of our consolidated financial statements, including the audits of internal control over financial reporting, reviews of the 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.
|
130
|
Tesoro Logistics LP
|
|
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
Page
|
Report of Independent Registered Public Accounting Firm (Ernst & Young LLP)
|
|
Consolidated Statements of Operations - Years Ended December 31, 2016, 2015 and 2014
|
|
Consolidated Balance Sheets - December 31, 2016 and 2015
|
|
Consolidated Statements of Partners’ Equity - Years Ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Cash Flows - Years Ended December 31, 2016, 2015 and 2014
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
2.1
|
|
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
|
|
8-K
|
|
2.1
|
|
11/12/2015
|
|
|
|
|
|
|
|
|
|
2.2
|
|
Contribution, Conveyance and Assumption Agreement, dated as of July 1, 2016, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Alaska Company LLC and Tesoro Corporation
|
|
8-K
|
|
2.1
|
|
7/7/2016
|
|
|
|
|
|
|
|
|
|
2.3
|
|
Revision to the Contribution, Conveyance and Assumption Agreement, dated as of July 27, 2016, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Alaska Company LLC and Tesoro Corporation
|
|
10-Q
|
|
2.2
|
|
11/2/2016
|
|
|
|
|
|
|
|
|
|
*2.4
|
|
Revision to the Contribution, Conveyance and Assumption Agreement, dated as of November 21, 2016, by and among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Corporation and Tesoro Refining & Marketing Company LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.5
|
|
Asset Sale and Purchase Agreement by and between Tesoro Logistics Operations LLC and Northwest Terminalling Company dated as of December 6, 2012
|
|
8-K
|
|
2.1
|
|
12/11/2012
|
|
|
|
|
|
|
|
|
|
2.6
|
|
Asset Sale and Purchase Agreement by and between Tesoro Logistics Northwest Pipeline LLC and Chevron Pipe Line Company dated as of December 6, 2012
|
|
8-K
|
|
2.2
|
|
12/11/2012
|
|
|
|
|
|
|
|
|
|
2.7
|
|
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
|
|
8-K
|
|
2.1
|
|
4/1/2013
|
|
|
|
|
|
|
|
|
|
2.8
|
|
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
|
|
8-K
|
|
2.2
|
|
4/1/2013
|
|
|
|
|
|
|
|
|
|
2.9
|
|
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
|
|
8-K
|
|
2.1
|
|
5/20/2013
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
131
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
2.10
|
|
Membership Interest Purchase Agreement, dated as of October 19, 2014, between Tesoro Logistics LP and QEP Field Services Company
|
|
8-K
|
|
2.1
|
|
10/20/2014
|
|
|
|
|
|
|
|
|
|
2.11
|
|
Amendment No. 1 to Membership Interest Purchase Agreement, dated as of December 2, 2014, between Tesoro Logistics LP and QEP Field Services Company
|
|
8-K
|
|
2.2
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
2.12
|
|
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
|
|
8-K
|
|
2.1
|
|
4/6/2015
|
|
|
|
|
|
|
|
|
|
3.1
|
|
Certificate of Limited Partnership of Tesoro Logistics LP
|
|
S-1
(File No. 333-171525)
|
|
3.1
|
|
1/4/2011
|
|
|
|
|
|
|
|
|
|
3.2
|
|
Certificate of Formation of Tesoro Logistics GP, LLC
|
|
S-1
(File No. 333-171525)
|
|
3.3
|
|
1/4/2011
|
|
|
|
|
|
|
|
|
|
3.3
|
|
First Amended and Restated Agreement of Limited Partnership of Tesoro Logistics LP dated April 26, 2011
|
|
8-K
|
|
3.1
|
|
4/29/2011
|
|
|
|
|
|
|
|
|
|
3.4
|
|
Amendment No. 1 to Amended and Restated Agreement of Limited Partnership of Tesoro Logistics LP, dated as of December 2, 2014, entered into and effectuated by Tesoro Logistics GP, LLC
|
|
8-K
|
|
3.1
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
3.5
|
|
Amendment No. 2 to First Amended and Restated Agreement of Limited Partnership of Tesoro Logistics LP, dated as of November 21, 2016, entered into and effectuated by Tesoro Logistics GP, LLC
|
|
8-K
|
|
3.1
|
|
11/21/2016
|
|
|
|
|
|
|
|
|
|
3.6
|
|
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
|
|
8-K
|
|
3.1
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
3.7
|
|
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
|
|
8-K
|
|
3.1
|
|
9/30/2014
|
|
|
|
|
|
|
|
|
|
3.8
|
|
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
|
|
8-K
|
|
3.1
|
|
11/12/2015
|
|
|
|
|
|
|
|
|
|
3.9
|
|
Amendment No. 3 to the Second Amended and Restated Limited Liability Company Agreement of Tesoro Logistics GP, LLC, dated as of July 1, 2016, between Tesoro Corporation, Tesoro Refining & Marketing Company LLC and Tesoro Alaska Company LLC
|
|
10-Q
|
|
3.1
|
|
8/4/2016
|
|
|
|
|
|
|
|
|
|
3.10
|
|
Amendment No. 4 to the Second Amended and Restated Limited Liability Company Agreement of Tesoro Logistics GP, LLC, dated as September 16, 2016, by and among Tesoro Logistics GP, LLC, Tesoro Corporation, Tesoro Refining & Marketing Company LLC and Tesoro Alaska Company LLC
|
|
8-K
|
|
3.1
|
|
9/22/2016
|
|
|
|
|
|
|
|
|
|
3.11
|
|
Amendment No. 5 to the Second Amended and Restated Limited Liability Company Agreement of Tesoro Logistics GP, LLC, dated as of November 21, 2016, by and among Tesoro Logistics GP, LLC, Tesoro Corporation, Tesoro Refining & Marketing Company LLC and Tesoro Alaska Company LLC
|
|
8-K
|
|
3.2
|
|
11/21/2016
|
|
|
|
|
|
|
|
|
|
4.1
|
|
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
|
|
8-K
|
|
4.1
|
|
9/17/2012
|
|
|
|
|
|
|
|
|
|
4.2
|
|
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
|
|
10-K
|
|
4.2
|
|
2/28/2013
|
|
|
|
|
|
|
|
|
|
4.3
|
|
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
|
|
8-K
|
|
4.2
|
|
12/12/2013
|
132
|
Tesoro Logistics LP
|
|
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
|
|
|
|
|
|
|
|
4.4
|
|
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
|
|
8-K
|
|
4.2
|
|
12/17/2013
|
|
|
|
|
|
|
|
|
|
4.5
|
|
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
|
|
10-Q
|
|
4.1
|
|
10/31/2014
|
|
|
|
|
|
|
|
|
|
4.6
|
|
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
|
|
10-K
|
|
4.6
|
|
2/24/2015
|
|
|
|
|
|
|
|
|
|
4.7
|
|
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
|
|
10-Q
|
|
4.3
|
|
8/6/2015
|
|
|
|
|
|
|
|
|
|
4.8
|
|
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
|
|
8-K
|
|
4.1
|
|
8/2/2013
|
|
|
|
|
|
|
|
|
|
4.9
|
|
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
|
|
8-K
|
|
4.1
|
|
12/12/2013
|
|
|
|
|
|
|
|
|
|
4.10
|
|
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
|
|
10-Q
|
|
4.1
|
|
10/31/2014
|
|
|
|
|
|
|
|
|
|
4.11
|
|
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
|
|
10-K
|
|
4.6
|
|
2/24/2015
|
|
|
|
|
|
|
|
|
|
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
|
|
10-Q
|
|
4.2
|
|
8/6/2015
|
|
|
|
|
|
|
|
|
|
4.13
|
|
Fifth Supplemental Indenture, dated as of May 12, 2016, 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
|
|
8-K
|
|
4.2
|
|
5/12/2016
|
|
|
|
|
|
|
|
|
|
4.14
|
|
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
|
|
8-K
|
|
4.1
|
|
10/29/2014
|
|
|
|
|
|
|
|
|
|
4.15
|
|
First 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, relating to the 5.50% Senior Notes due 2019 and the 6.25% Senior Notes due 2022
|
|
8-K
|
|
4.1
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
4.16
|
|
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
|
|
10-Q
|
|
4.1
|
|
8/6/2015
|
|
|
|
|
|
|
|
|
|
4.17
|
|
Indenture, dated as of May 12, 2016, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 6.375% Senior Notes due 2024
|
|
8-K
|
|
4.3
|
|
5/12/2016
|
|
|
|
|
|
|
|
|
|
4.18
|
|
Indenture, dated as of December 2, 2016, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 5.25% Senior Notes due 2025
|
|
8-K
|
|
4.1
|
|
12/2/2016
|
|
|
|
|
|
|
|
|
|
10.1
|
|
Third Amended and Restated Senior Secured Revolving Credit Agreement, dated as of January 29, 2016, among Tesoro Logistics LP, Bank of America, N.A., as administrative agent, and the other lenders party thereto
|
|
8-K
|
|
10.1
|
|
2/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
133
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
10.2
|
|
Senior Secured Revolving Credit Agreement, dated as of January 29, 2016, among Tesoro Logistics LP, Bank of America, N.A., as administrative agent, and the other lenders party thereto
|
|
8-K
|
|
10.2
|
|
2/3/2016
|
|
|
|
|
|
|
|
|
|
10.3
|
|
Support Agreement, dated as of April 6, 2015 by and among QEP Midstream Partners, LP, Tesoro Logistics LP, and QEP Field Services, LLC
|
|
8-K
|
|
10.1
|
|
4/6/2015
|
|
|
|
|
|
|
|
|
|
10.4
|
|
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
|
|
8-K
|
|
10.10
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
10.5
|
|
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
|
|
10-K
|
|
10.18
|
|
2/24/2015
|
|
|
|
|
|
|
|
|
|
10.6
|
|
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
|
|
10-Q
|
|
10.3
|
|
8/6/2015
|
|
|
|
|
|
|
|
|
|
10.7
|
|
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
|
|
8-K
|
|
10.1
|
|
11/12/2015
|
|
|
|
|
|
|
|
|
|
10.8
|
|
Second Amended and Restated Schedules to the Third Amended and Restated Omnibus Agreement, dated as of July 1, 2016, among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Alaska Company LLC and Tesoro Companies, Inc.
|
|
8-K
|
|
10.2
|
|
7/7/2016
|
|
|
|
|
|
|
|
|
|
10.9
|
|
Third Amended and Restated Schedules to the Third Amended and Restated Omnibus Agreement, dated as of September 16, 2016, by and among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics LP and Tesoro Logistics GP, LLC
|
|
8-K
|
|
10.4
|
|
9/22/2016
|
|
|
|
|
|
|
|
|
|
10.10
|
|
Fourth Amended and Restated Schedules to the Third Amended and Restated Omnibus Agreement, dated as of November 21, 2016, by and among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics LP and Tesoro Logistics GP, LLC
|
|
8-K
|
|
10.1
|
|
11/21/2016
|
|
|
|
|
|
|
|
|
|
10.11
|
|
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
|
|
8-K
|
|
10.11
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
10.12
|
|
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
|
|
8-K
|
|
10.8
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
10.13
|
|
Amendment No. 2 to Secondment and Logistics Services Agreement, dated as of March 31, 2016, among Tesoro Refining & Marketing Company LLC, Tesoro Companies Inc., Tesoro Alaska Company LLC, Tesoro Great Plains Midstream LLC, Tesoro Great Plains Gathering and Marketing LLC, BakkenLink Pipeline LLC, ND Land Holdings LLC, Tesoro Alaska Terminals 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 Operating LLC, QEPM Gathering I LLC, Rendezvous Pipeline Company LLC, and Green River Processing LLC
|
|
10-Q
|
|
10.1
|
|
5/5/2016
|
|
|
|
|
|
|
|
|
|
134
|
Tesoro Logistics LP
|
|
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
10.14
|
|
Amendment No. 3 to Secondment and Logistics Services Agreement, dated as of November 21, 2016, among Tesoro Companies Inc., Tesoro Refining & Marketing Company LLC, 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
|
|
8-K
|
|
10.5
|
|
11/21/2016
|
|
|
|
|
|
|
|
|
|
10.15
|
|
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
|
|
8-K
|
|
10.6
|
|
4/29/2011
|
|
|
|
|
|
|
|
|
|
10.16
|
|
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
|
|
8-K
|
|
10.1
|
|
4/1/2013
|
|
|
|
|
|
|
|
|
|
10.17
|
|
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
|
|
10-Q
|
|
10.2
|
|
5/8/2013
|
|
|
|
|
|
|
|
|
|
10.18
|
|
Amendment No. 1 to the Second Amended and Restated Master Terminalling Services Agreement dated as of September 16, 2016, by and among Tesoro Refining and Marketing Company LLC, Tesoro Alaska Company LLC and Tesoro Logistics Operations LLC
|
|
8-K
|
|
10.1
|
|
9/22/2016
|
|
|
|
|
|
|
|
|
|
10.19
|
|
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
|
|
8-K
|
|
10.10
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.20
|
|
Terminal Expansion Agreement, dated as of February 27, 2012, between Tesoro Logistics Operations LLC and Tesoro Refining and Marketing Company
|
|
10-K
|
|
10.21
|
|
2/29/2012
|
|
|
|
|
|
|
|
|
|
10.21
|
|
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
|
|
8-K
|
|
10.3
|
|
12/15/2014
|
|
|
|
|
|
|
|
|
|
10.22
|
|
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
|
|
8-K
|
|
10.10
|
|
4/29/2011
|
|
|
|
|
|
|
|
|
|
10.23
|
|
Terminal Sublease, dated as of April 26, 2011, between Tesoro Alaska Company, as Landlord, and Tesoro Alaska Logistics LLC, as Tenant
|
|
8-K
|
|
10.11
|
|
4/29/2011
|
|
|
|
|
|
|
|
|
|
10.24
|
|
Amorco Marine Terminal Use and Throughput Agreement, effective April 1, 2012, between Tesoro Refining and Marketing Company and Tesoro Logistics Operations LLC
|
|
8-K
|
|
10.4
|
|
4/3/2012
|
|
|
|
|
|
|
|
|
|
10.25
|
|
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
|
|
8-K
|
|
10.8
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.26
|
|
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
|
|
8-K
|
|
10.9
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.27
|
|
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
|
|
8-K
|
|
10.6
|
|
9/17/2012
|
|
|
|
|
|
|
|
|
|
10.28
|
|
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
|
|
8-K
|
|
10.11
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.29
|
|
Long Beach Pipeline Throughput Agreement (84/86 Pipelines), dated as of December 6, 2013, between the Operating Company and Tesoro Refining & Marketing Company LLC
|
|
8-K
|
|
10.13
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.30
|
|
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
|
|
8-K
|
|
10.7
|
|
9/17/2012
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
135
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
10.31
|
|
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
|
|
8-K
|
|
10.4
|
|
11/15/2012
|
|
|
|
|
|
|
|
|
|
10.32
|
|
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
|
|
8-K
|
|
10.3
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
10.33
|
|
Ground Lease, dated as of November 15, 2012, between Tesoro Logistics Operations LLC and Tesoro Refining and Marketing Company
|
|
8-K
|
|
10.5
|
|
11/15/2012
|
|
|
|
|
|
|
|
|
|
10.34
|
|
First Amendment to Ground Lease, dated as of July 1, 2014, between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC
|
|
8-K
|
|
10.6
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
10.35
|
|
Ground Lease dated as of July 1, 2014, between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC
|
|
8-K
|
|
10.7
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
10.36
|
|
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
|
|
8-K
|
|
10.6
|
|
11/15/2012
|
|
|
|
|
|
|
|
|
|
10.37
|
|
Second Amended and Restated Representation and Services Agreement for Oil Spill Contingency Planning, Response and Remediation, dated as of September 16, 2016, by and among Tesoro Companies, Inc., Tesoro Maritime Company, Tesoro Refining & Marketing Company LLC, Tesoro Alaska Company LLC, Kenai Pipe Line Company, Tesoro Alaska Pipeline Company LLC, Carson Cogeneration Company, Tesoro Great Plains Midstream LLC, Tesoro Great Plains Gathering & Marketing LLC, BakkenLink Pipeline LLC, ND Land Holdings LLC, Tesoro Logistics Operations LLC, Tesoro High Plains Pipeline Company LLC, Tesoro Logistics Pipelines LLC, Tesoro Logistics Northwest Pipeline LLC, Tesoro SoCal Pipeline Company LLC, QEP Field Services, LLC, QEPM Gathering I, LLC, Green River Processing, LLC, Rendezvous Pipeline Company, LLC and Tesoro Alaska Terminals LLC
|
|
8-K
|
|
10.3
|
|
9/22/2016
|
|
|
|
|
|
|
|
|
|
10.38
|
|
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
|
|
8-K
|
|
10.5
|
|
6/3/2013
|
|
|
|
|
|
|
|
|
|
10.39
|
|
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
|
|
8-K
|
|
10.2
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.40
|
|
Carson II Storage Services Agreement, dated as of November 12, 2015, by and between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC
|
|
8-K
|
|
10.2
|
|
11/12/2015
|
|
|
|
|
|
|
|
|
|
10.41
|
|
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
|
|
8-K
|
|
10.3
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.42
|
|
Berth 121 Operating Agreement, dated as of December 6, 2013, between Carson Cogeneration Company and Tesoro Logistics Operations LLC
|
|
8-K
|
|
10.4
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.43
|
|
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
|
|
8-K
|
|
10.5
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.44
|
|
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
|
|
8-K
|
|
10.6
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.45
|
|
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
|
|
8-K
|
|
10.7
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.46
|
|
Transportation Services Agreement (SoCal Pipelines), dated as of December 6, 2013, between Tesoro Refining & Marketing Company LLC and Tesoro SoCal Pipeline Company LLC
|
|
8-K
|
|
10.12
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.47
|
|
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
|
|
8-K
|
|
10.3
|
|
11/12/2015
|
|
|
|
|
|
|
|
|
|
136
|
Tesoro Logistics LP
|
|
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
10.48
|
|
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
|
|
8-K
|
|
10.14
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.49
|
|
Lease Agreement, dated as of December 6, 2013, between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC
|
|
8-K
|
|
10.19
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
10.50
|
|
Sublease, dated as of December 9, 2013, by and between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC
|
|
8-K
|
|
2.1
|
|
12/10/2013
|
|
|
|
|
|
|
|
|
|
10.51
|
|
Lease, dated as of January 11, 2012, by and between the City of Long Beach and Tesoro Refining & Marketing Company LLC
|
|
8-K
|
|
2.2
|
|
12/10/2013
|
|
|
|
|
|
|
|
|
|
10.52
|
|
License Agreement, dated as of November 12, 2015, among Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC
|
|
8-K
|
|
10.4
|
|
11/12/2015
|
|
|
|
|
|
|
|
|
|
10.53
|
|
Construction Service Agreement - Anacortes Products Terminal, dated as of July 28, 2014, between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC
|
|
10-Q
|
|
10.1
|
|
8/1/2014
|
|
|
|
|
|
|
|
|
|
10.54
|
|
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
|
|
8-K
|
|
10.1
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
10.55
|
|
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
|
|
8-K
|
|
10.2
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
10.56
|
|
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
|
|
10-K
|
|
10.71
|
|
2/25/2016
|
|
|
|
|
|
|
|
|
|
10.57
|
|
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
|
|
8-K
|
|
10.4
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
10.58
|
|
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
|
|
8-K
|
|
10.5
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
10.59
|
|
Martinez License Agreement, dated as of July 1, 2014, between Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC
|
|
8-K
|
|
10.8
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
10.60
|
|
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
|
|
8-K
|
|
10.9
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
10.61
|
|
Indemnification Agreement, dated as of December 2, 2014, between Tesoro Logistics LP and QEP Field Services Company
|
|
8-K
|
|
10.1
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
10.62
|
|
Transition Services Agreement, dated as of December 2, 2014, between Tesoro Logistics LP and QEP Resources, Inc.
|
|
8-K
|
|
10.2
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
10.63
|
|
Guaranty, dated as of December 2, 2014, by QEP Resources, Inc., in favor of Tesoro Logistics LP
|
|
8-K
|
|
10.3
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
10.64
|
|
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
|
|
8-K
|
|
10.6
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
10.65
|
|
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
|
|
8-K
|
|
10.9
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
10.66
|
|
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
|
|
8-K
|
|
10.3
|
|
2/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
137
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
10.67
|
|
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-K
|
|
10.82
|
|
2/25/2016
|
|
|
|
|
|
|
|
|
|
10.68
|
|
Ground Lease, dated as of July 1, 2016, between Tesoro Alaska Company LLC and Tesoro Logistics Operations LLC
|
|
8-K
|
|
10.1
|
|
7/7/2016
|
|
|
|
|
|
|
|
|
|
10.69
|
|
Kenai Storage Services Agreement, dated as of July 1, 2016, among Tesoro Alaska Company LLC, Tesoro Logistics Operations LLC, Tesoro Logistics GP, LLC and Tesoro Logistics LP
|
|
8-K
|
|
10.3
|
|
7/7/2016
|
|
|
|
|
|
|
|
|
|
10.70
|
|
Alaska Terminalling Services Agreement, dated as of September 16, 2016 by and among Tesoro Alaska Company LLC, Tesoro Logistics Operations LLC, Tesoro Alaska Terminals LLC, Tesoro Logistics GP, LLC and Tesoro Logistics LP
|
|
8-K
|
|
10.2
|
|
9/22/2016
|
|
|
|
|
|
|
|
|
|
10.71
|
|
Martinez Storage Services Agreement, dated as of November 21, 2016, by and among Tesoro Refining & Marketing Company LLC, Tesoro Logistics Operations LLC, Tesoro Logistics GP, LLC and Tesoro Logistics LP
|
|
8-K
|
|
10.2
|
|
11/21/2013
|
|
|
|
|
|
|
|
|
|
10.72
|
|
License Agreement, dated as of November 21, 2016, by and among Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC
|
|
8-K
|
|
10.3
|
|
11/21/2013
|
|
|
|
|
|
|
|
|
|
10.73
|
|
Avon Marine Terminal Operating Agreement, dated as of November 21, 2016, by and among Tesoro Logistics Operations LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Refining & Marketing Company LLC
|
|
8-K
|
|
10.4
|
|
11/21/2013
|
|
|
|
|
|
|
|
|
|
10.74
|
|
Sublease, dated as of November 21, 2016, by and among Tesoro Refining & Marketing Company LLC and Tesoro Logistics Operations LLC
|
|
8-K
|
|
10.6
|
|
11/21/2013
|
|
|
|
|
|
|
|
|
|
10.75
|
|
Avon Marine Terminal Use and Throughput Agreement, dated as of November 21, 2016, by and among Tesoro Logistics Operations LLC, Tesoro Logistics GP, LLC, Tesoro Logistics LP and Tesoro Refining & Marketing Company LLC
|
|
8-K
|
|
10.7
|
|
11/21/2013
|
|
|
|
|
|
|
|
|
|
†10.76
|
|
Tesoro Logistics LP 2011 Long-Term Incentive Plan as amended and restated on October 4, 2016
|
|
8-K
|
|
10.1
|
|
10/5/2016
|
|
|
|
|
|
|
|
|
|
†10.77
|
|
Form of Tesoro Logistics LP 2011 Long-Term Incentive Plan Phantom Unit Award (Employee time-vesting awards)
|
|
S-1
(File No. 333-171525)
|
|
10.17
|
|
1/4/2011
|
|
|
|
|
|
|
|
|
|
†10.78
|
|
Form of Tesoro Logistics LP 2011 Long-Term Incentive Plan Phantom Unit Award (Non-employee director awards)
|
|
10-K
|
|
10.10
|
|
2/24/2014
|
|
|
|
|
|
|
|
|
|
†10.79
|
|
Form of Tesoro Logistics LP 2011 Long-Term Incentive Plan Performance Phantom Unit Agreement (Employee performance-based awards granted in 2013 and 2014)
|
|
8-K
|
|
10.1
|
|
2/13/2013
|
|
|
|
|
|
|
|
|
|
†10.80
|
|
Tesoro Logistics LP 2013 Grant of Performance-Vesting Phantom Units and Tandem DERs Term Sheet (Employee performance-based awards granted in 2013)
|
|
8-K
|
|
10.2
|
|
2/13/2013
|
|
|
|
|
|
|
|
|
|
†10.81
|
|
Tesoro Logistics LP 2014 Grant of Performance-Vesting Phantom Units and Tandem DERs Term Sheet (Employee performance-based awards granted in 2014)
|
|
8-K
|
|
10.2
|
|
2/12/2014
|
|
|
|
|
|
|
|
|
|
†10.82
|
|
Form of Tesoro Logistics LP 2011 Long-Term Incentive Plan Performance Phantom Unit Agreement (Employee performance-based awards granted in 2015)
|
|
8-K
|
|
10.1
|
|
2/18/2015
|
|
|
|
|
|
|
|
|
|
†10.83
|
|
Tesoro Logistics LP 2015 Grant of Performance-Vesting Phantom Units and Tandem DERs Term Sheet (Employee performance-based awards granted in 2015)
|
|
8-K
|
|
10.2
|
|
2/18/2015
|
|
|
|
|
|
|
|
|
|
†10.84
|
|
Form of Tesoro Logistics LP 2011 Long-Term Incentive Plan Performance Phantom Unit Agreement (Employee performance-based awards granted in 2016)
|
|
8-K
|
|
10.1
|
|
2/11/2016
|
|
|
|
|
|
|
|
|
|
†10.85
|
|
Tesoro Logistics LP 2016 Grant of Performance-Vesting Phantom Units and Tandem DERs Term Sheet (Employee performance-based awards granted in 2016)
|
|
8-K
|
|
10.2
|
|
2/11/2016
|
|
|
|
|
|
|
|
|
|
†10.86
|
|
Amended and Restated QEP Midstream Partners, LP 2013 Long-Term Incentive Plan
|
|
8-K
|
|
10.1
|
|
7/23/2015
|
|
|
|
|
|
|
|
|
|
†10.87
|
|
Description of 2015 Incentive Compensation Program
|
|
10-K
|
|
10.15
|
|
2/24/2015
|
|
|
|
|
|
|
|
|
|
†10.88
|
|
Description of 2016 Incentive Compensation Program
|
|
10-K
|
|
10.20
|
|
2/25/2016
|
|
|
|
|
|
|
|
|
|
†10.89
|
|
Tesoro Logistics LP Non-Employee Director Compensation Program (2016)
|
|
10-K
|
|
10.21
|
|
2/25/2016
|
|
|
|
|
|
|
|
|
|
138
|
Tesoro Logistics LP
|
|
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
*†10.90
|
|
Tesoro Logistics LP Non-Employee Director Compensation Program (2017)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
†10.91
|
|
Amended and Restated Tesoro Corporation Executive Severance and Change in Control Plan effective May 1, 2013
|
|
10-Q
|
|
10.5
|
|
8/4/2016
|
|
|
|
|
|
|
|
|
|
†10.92
|
|
Management Stability Agreement of Phillip M. Anderson
|
|
S-1
(File No. 333-171525)
|
|
10.3
|
|
1/4/2011
|
|
|
|
|
|
|
|
|
|
†10.93
|
|
Management Stability Agreement of Don J. Sorenson
|
|
10-K
|
|
10.6
|
|
2/25/2016
|
|
|
|
|
|
|
|
|
|
†10.94
|
|
Waiver and Release of the Amended & Restated Management Stability Agreement of Don J. Sorenson
|
|
10-Q
|
|
10.6
|
|
8/4/2016
|
|
|
|
|
|
|
|
|
|
†10.95
|
|
Form of indemnification agreement between Tesoro Logistics GP, LLC and the independent members of its board of directors
|
|
8-K
|
|
10.1
|
|
12/15/2014
|
|
|
|
|
|
|
|
|
|
†10.96
|
|
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
|
|
8-K
|
|
10.3
|
|
8/4/2008
|
|
|
|
|
|
|
|
|
|
*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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**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
|
|
|
|
|
|
|
|
|
December 31, 2016
|
139
|
|
|
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 21, 2017
|
Gregory J. Goff
|
|
Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ STEVEN M. STERIN
|
|
Director, Executive Vice President and
|
|
February 21, 2017
|
Steven M. Sterin
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ BLANE W. PEERY
|
|
Vice President and Controller
|
|
February 21, 2017
|
Blane W. Peery
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ PHILLIP M. ANDERSON
|
|
Director and President
|
|
February 21, 2017
|
Phillip M. Anderson
|
|
|
|
|
|
|
|
|
|
/s/ RAYMOND J. BROMARK
|
|
Director
|
|
February 21, 2017
|
Raymond J. Bromark
|
|
|
|
|
|
|
|
|
|
/s/ ROBERT W. GOLDMAN
|
|
Director
|
|
February 21, 2017
|
Robert W. Goldman
|
|
|
|
|
|
|
|
|
|
/s/ JAMES H. LAMANNA
|
|
Director
|
|
February 21, 2017
|
James H. Lamanna
|
|
|
|
|
|
|
|
|
|
/s/ THOMAS C. O’CONNOR
|
|
Director
|
|
February 21, 2017
|
Thomas C. O’Connor
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL E. WILEY
|
|
Director
|
|
February 21, 2017
|
Michael E. Wiley
|
|
|
|
|
140
|
Tesoro Logistics LP
|
|
|
TESORO CORPORATION
By:
/S/ GREGORY J. GOFF
Gregory J. Goff
President and Chief Executive Officer
|
TESORO REFINING & MARKETING COMPANY LLC
By:
/S/ GREGORY J. GOFF
Gregory J. Goff
Chairman of the Board of Managers and President
|
TESORO LOGISTICS LP
By: Tesoro Logistics GP, LLC,
its general partner
By:
/S/ PHILLIP M. ANDERSON
Phillip M. Anderson
President
|
TESORO LOGISTICS GP, LLC
TESORO LOGISTICS OPERATIONS LLC
By:
/S/ PHILLIP M. ANDERSON
Phillip M. Anderson
President
|
|
Shell Capacity
|
Tank #
|
(Barrels)
|
TK003
|
71,100
|
TK026
|
97,900
|
TK033
|
97,900
|
TK037
|
53,688
|
TK038
|
53,678
|
TK217
|
97,800
|
TK270
|
75,400
|
TK272
|
75,500
|
TK274
|
75,500
|
TK601
|
14,600
|
TK612
|
10,400
|
TK613
|
10,400
|
TK631
|
122,700
|
TK637
|
71,600
|
TK638
|
71,600
|
TK639
|
71,600
|
TK640
|
71,600
|
TK641
|
71,600
|
TK664
|
116,500
|
TK690
|
283,000
|
TK691
|
222,100
|
TK692
|
66,000
|
TK694
|
283,000
|
TK696
|
13,616
|
TK697
|
13,500
|
TK698
|
13,500
|
TK701
|
283,000
|
TK702
|
117,300
|
TK705
|
210,000
|
TK706
|
113,000
|
TK707
|
113,000
|
TK708
|
283,000
|
TK709
|
113,000
|
TK710
|
80,000
|
TK711
|
80,000
|
TK777
|
6
|
TK778
|
6
|
TK849
|
112,000
|
TK866
|
218,400
|
TK867
|
218,400
|
TK868
|
86,700
|
TK869
|
86,700
|
TK870
|
119,171
|
TK871
|
283,000
|
TK872
|
218,400
|
TK893
|
114,300
|
TK894
|
113,300
|
TK904
|
115,600
|
TK905
|
126,700
|
TK932
|
86,700
|
TK933
|
127,000
|
TK961
|
190
|
TK981
|
190
|
Cost Ctr
|
Asset
|
SNo.
|
Cap.date
|
Asset description
|
18004
|
100018779
|
0
|
12/31/2002
|
CARB 3 PROJECT - GASOLINE BLENDING FACILITIES
|
18004
|
100029031
|
0
|
8/15/2003
|
CARB 3 PROJECT - GASOLINE BLENDING FACILITIES
|
18004
|
100034399
|
0
|
5/17/2002
|
#1-247 WAREHOUSE,4000 SF, PRE-ENG METAL-1951
|
18004
|
100034417
|
0
|
5/17/2002
|
#3-129 SCALE OFFICE, 200 SF, PRE-ENG METAL-1951
|
18004
|
100034418
|
0
|
5/17/2002
|
#3-130 GAUGER'S OFC, 1500 SF, PRE-ENGMETAL-1951
|
18004
|
100034431
|
0
|
5/17/2002
|
BLENDING, TREATING & RACKS
|
18004
|
100034892
|
0
|
12/31/2002
|
CARB PHASE 3 - GASOLINE BLENDING
|
18004
|
100037036
|
0
|
5/27/2005
|
TR6 PIPING - PHA RECOMMENDATIONS 2004/05
|
18004
|
100052436
|
0
|
3/28/2013
|
LINE 68 DIESEL CONVERSION PIPING
|
18004
|
100052437
|
0
|
3/28/2013
|
LINE 68 DIESEL CONVERSION INSTRUMENTATION
|
18004
|
100052652
|
0
|
4/3/2013
|
DIESEL PUMP TIE-INS PIPING
|
18004
|
100052652
|
1
|
1/1/2014
|
DIESEL PUMP TIE-INS PIPING
|
|
|
|
|
|
18004
|
Fixed Assets
|
|
|
|
|
|
|
|
|
18044
|
100034882
|
0
|
10/15/2002
|
FIREWATER IMPROVEMENTS - TR 4 / 6
|
18044
|
100036473
|
0
|
6/30/2004
|
TANK 38 WATER PUMP/TRACT 4 - FIREWATER SYS UPGRADE
|
|
|
|
|
|
18044
|
|
|
|
|
|
|
|
|
|
18342
|
100018841
|
0
|
12/27/2002
|
GASOLINE BLENDER AIR COMPRESSOR & DRYER
|
18342
|
100018971
|
0
|
1/1/2003
|
GASOLINE BLENDER AIR COMPRESSOR & DRYER
|
18342
|
100034891
|
0
|
12/27/2002
|
GASOLINE BLENDER AIR COMPRESSOR & DRYER
|
18342
|
100036006
|
0
|
3/8/2004
|
GASOLINE BLENDING LOGISTICS - PIPING TKS 639 & 640
|
18342
|
100036470
|
0
|
11/5/2004
|
CORIOLIS FLOW METER - CHEVRON LACT METER SKID
|
18342
|
100036471
|
0
|
11/5/2004
|
6" FISHER ET VALVE - CHEVRON LACT METER SKID
|
18342
|
100036764
|
0
|
1/1/2005
|
CORIOLIS FLOW METER - CHEVRON LACT METER SKID
|
18342
|
100036765
|
0
|
1/1/2005
|
6" FISHER ET VALVE - CHEVRON LACT METER SKID
|
18342
|
100037587
|
0
|
12/8/2005
|
TRANSFORMER - TRACT 4 NEAR TANK 707
|
18342
|
100038448
|
0
|
9/13/2006
|
GAUGING - TR4 PUMP P-747 UPGRADE
|
18342
|
100038826
|
0
|
12/19/2006
|
TANK RECONSTRUCTION - PHASE 2 - PUMP P-10144
|
18342
|
100038827
|
0
|
12/19/2006
|
TANK RECONSTRUCTION - PHASE 2 - PUMP P-10147
|
18342
|
100038828
|
0
|
12/19/2006
|
TANK RECONSTRUCTION - PHASE 2 - PUMP P-10148
|
Cost Ctr
|
Asset
|
SNo.
|
Cap.date
|
Asset description
|
18342
|
100038829
|
0
|
12/19/2006
|
TANK RECONSTRUCTION - PHASE 2 - EXCHANGER E-5150
|
18342
|
100038830
|
0
|
12/19/2006
|
TANK RECONSTRUCTION-PHASE 2 - TR4 PIPING UPGRADES
|
18342
|
100038831
|
0
|
12/19/2006
|
TANK RECONSTRUCTION - PHASE 2 - TR4 I/E UPGRADES
|
18342
|
100038968
|
0
|
2/14/2007
|
GASOLINE BLENDING ANALYZER - FTIR
|
18342
|
100039004
|
0
|
1/1/2007
|
GAUGING - TR4 PUMP P-747 UPGRADE
|
18342
|
100039046
|
0
|
3/28/2007
|
SECONDARY CONTAINMENT/BERM SYSTEM UPGRADE-TANK 318
|
18342
|
100039056
|
0
|
2/27/2007
|
PROCESS HAZARD ANALYSIS 2004/2005 - GAUGING
|
18342
|
100039438
|
0
|
4/30/2007
|
CRUDE TRANSFER LINE EXTENSION - TRACK 4
|
18342
|
100039439
|
0
|
4/30/2007
|
TANK PIPING CONNECTIONS - TRACK 4 CRUDE SYSTEM
|
18342
|
100039440
|
0
|
4/30/2007
|
CRUDE BLENDING INSTRUMENTATION IMPROVEMENTS
|
18342
|
100039441
|
0
|
6/3/2007
|
63 CRUDE OIL PIPELINE SECTION-TR3 SLOUGH-TR2 PUMP
|
18342
|
100040405
|
0
|
1/1/2008
|
63 CRUDE OIL PIPELINE SECTION-TR3 SLOUGH-TR2 PUMP
|
18342
|
100040581
|
0
|
1/1/2008
|
TRACT 4 - PIPELINE IMPR/ADD-CRUDE TRANSFERS
|
18342
|
100040950
|
0
|
1/1/2008
|
CRUDE TRANSFER LINE EXTENSION - TRACK 4
|
18342
|
100041047
|
0
|
1/1/2008
|
TANK RECON - TR4 PIPING UPGRADE - PUNCHLIST ITEMS
|
18342
|
100044693
|
0
|
9/1/2009
|
OFFSITES SUITE - SOFTWARE
|
18342
|
100044694
|
0
|
9/1/2009
|
OFFSITES SUITE - SERVER HARDWARE
|
18342
|
100044761
|
0
|
9/2/2009
|
PHA - TRACT4 - #26 & #32
|
18342
|
100044762
|
0
|
1/1/2010
|
PHA - PUMP 9829 MODIFICATIONS
|
18342
|
100044763
|
0
|
1/7/2010
|
PHA - PUMPHOUSE 68 SUMP MODIFICATIONS
|
18342
|
100044774
|
0
|
1/1/2010
|
TANK MONITORING EQUIPMENT (TANK #s 134,137, & 318)
|
18342
|
100044775
|
0
|
1/1/2010
|
GAUGING/SHIPPING PIPELINE MONITORING EQPT
|
18342
|
100045684
|
0
|
3/1/2010
|
TRACT 3 - POWER DISTRIBUTION CENTER - PDC-49
|
18342
|
100046189
|
0
|
1/1/2011
|
TR6-DIESEL PIPING UPGRADES RE: TK270
|
18342
|
100046190
|
0
|
1/1/2011
|
TR3-DIESEL PIPING UPGRADES RE: TK932
|
18342
|
100046371
|
0
|
1/1/2011
|
PHA ASSETS - TR6 - REVISE 68 PUMP HOUSE SUMP#1
|
18342
|
100046372
|
0
|
1/1/2011
|
PHA ASSETS - TR6 - REVISE 68 PUMP HOUSE SUMP#2
|
18342
|
100048763
|
0
|
1/18/2012
|
PHA - TR4 - MISC VALVES AND PLATFORMS
|
18342
|
100048765
|
0
|
1/1/2012
|
PHA - TR6 BLENDING
|
18342
|
100048766
|
0
|
1/1/2012
|
PHA - TR6 BLENDING - ELECTRICAL CLASSIFICATION
|
18342
|
100048767
|
0
|
1/1/2012
|
SULFUR ANALZER - TR6 GASOLINE BLENDING
|
18342
|
100051411
|
0
|
11/13/2012
|
COMMUNICATION AND SECURITY SYSTEM
|
18342
|
100051412
|
0
|
11/13/2012
|
FIRE & SAFETY SYSTEM - BAKKEN CRUDE OFFLOADING
|
18342
|
100051413
|
0
|
11/13/2012
|
CONTAINMENT PAD AND PAVING
|
18342
|
100051413
|
1
|
1/1/2013
|
CONTAINMENT PAD AND PAVING
|
18342
|
100051414
|
0
|
11/13/2012
|
TANK TRUCK UNLOADING STATION
|
18342
|
100051414
|
1
|
1/1/2013
|
TANK TRUCK UNLOADING STATION
|
18342
|
100051415
|
0
|
11/13/2012
|
TRANSFER PIPING FROM UNLOADING STATION TO TK-707
|
18342
|
100051415
|
1
|
1/1/2013
|
TRANSFER PIPING FROM UNLOADING STATION TO TK-707
|
18342
|
300039718
|
0
|
6/30/2012
|
Permit Cost
|
Cost Ctr
|
Asset
|
SNo.
|
Cap.date
|
Asset description
|
|
Avon Wharf Slops Tanks
|
|
|
|
|
|
|
|
TK906 - 27 bbls
|
|
|
|
|
TK907 – 27 bbls
|
Cost Ctr
|
Asset
|
SNo.
|
Cap.date
|
Asset description
|
18365
|
100037201
|
0
|
7/15/2005
|
AVON WHARF PIPING AND SUPPORT - UPGRADE
|
18365
|
100037920
|
0
|
1/1/2006
|
AVON WHARF PIPING AND SUPPORT - UPGRADE
|
18365
|
100048114
|
0
|
1/18/2011
|
Avon Wharf - Approach Trestle / Structural Pile
|
18365
|
1000481226
|
0
|
9/16/2011
|
Avon Wharf – Berth 1 – Piping Manifold
|
18365
|
100048226
|
1
|
1/1/2012
|
Avon Wharf – Berth 1 – Piping Manifold
|
◦
|
Any and all inventory;
|
◦
|
Any liabilities with respect to the Avon Marine Terminal Renovation
|
◦
|
Any land on which the Avon Marine Terminal is located and any liabilities related thereto; and
|
◦
|
Any working capital of TRMC and its Affiliates (other than the General Partner and the Partnership Group) related to such assets.
|
◦
|
Any and all inventory;
|
◦
|
Any land on which the Tankage is located and any liabilities related thereto; and
|
◦
|
Any working capital of TRMC and its Affiliates (other than the General Partner and the Partnership Group) related to such assets.
|
(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 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)
|
A meeting fee is paid to a non-employee director for attendance in person or by telephone.
|
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
|
Tesoro Alaska Terminals 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)
|
98% 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)
|
60% owned by QEP Field Services, LLC and 40% owned by QEP Midstream Partners Operating, LLC
|
(g)
|
50% owned by QEP Midstream Partners Operating, LLC
|
(h)
|
38% owned by QEP Field Services, LLC
|
1)
|
Registration Statement (Form S-3 No. 333-206168) of Tesoro Logistics LP authorizing the continuous issuance of common units representing limited partner interests having an aggregate gross sales price of up to $750 million
|
2)
|
Registration Statement (Form S-3 No. 333-211863) of Tesoro Logistics LP
|
3)
|
Registration Statement (Form S-8 No. 333-173807) pertaining to the Tesoro Logistics LP 2011 Long-Term Incentive Plan
|
4)
|
Registration Statement (Form S-8 No. 333-214395) pertaining to the Tesoro Logistics LP 2011 Long-Term Incentive Plan
|
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 21, 2017
|
/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 21, 2017
|
/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 21, 2017
|
(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 21, 2017
|