|
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
27‑4151603
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
|
|
200 East Hardin Street, Findlay, Ohio 45840
|
||
(Address of principal executive offices) (Zip Code)
|
||
419-421-2414
|
||
(Registrant’s telephone number, including area code)
|
Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
Common Units Representing Limited Partnership Interests
|
|
New York Stock Exchange
|
|
Large accelerated filer
|
þ
|
|
Accelerated filer
|
o
|
|
|
Non-accelerated filer
|
o
|
|
Smaller reporting company
|
o
|
|
|
|
|
|
Emerging growth company
|
o
|
|
|
Table of Contents
|
Glossary of Terms
|
||
Important Information Regarding Forward-Looking Statements
|
||
Part I
|
||
Item 1 Business
|
||
|
Terminalling and Transportation
|
|
|
Gathering and Processing
|
|
|
Wholesale
|
|
|
Rate and Other Regulations
|
|
|
Environmental Regulations
|
|
Item 1A Risk Factors
|
||
Item 1B Unresolved Staff Comments
|
||
Item 2 Properties
|
||
Item 3 Legal Proceedings
|
||
Item 4 Mine Safety Disclosures
|
Part II
|
||
Item 5 Market for Registrant’s Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities
|
||
Item 6 Selected Financial Data
|
||
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
||
|
Business Strategy and Overview
|
|
|
Results of Operations
|
|
|
Capital Resources and Liquidity
|
|
|
Accounting Standards
|
|
Item 7A Quantitative and Qualitative Disclosures about Market Risk
|
||
Item 8 Financial Statements and Supplementary Data
|
||
|
Consolidated Statements of Operations
|
|
|
Consolidated Balance Sheets
|
|
|
Consolidated Statements of Partner’s Equity
|
|
|
Consolidated Statements of Cash Flows
|
|
|
Notes to Consolidated Financial Statements
|
|
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
||
Item 9A Controls and Procedures
|
Part III
|
|
|
Item 10 Directors, Executive Officers and Corporate Governance
|
||
Item 11 Executive Compensation
|
||
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters
|
||
Item 13 Certain Relationships and Related Transactions, and Director Independence
|
||
Item 14 Principal Accountant Fees and Services
|
Glossary of Terms
|
|
|
December 31, 2018
|
1
|
Glossary of Terms
|
2
|
|
|
|
Glossary of Terms
|
|
|
December 31, 2018
|
3
|
Important Information Regarding Forward Looking Statements
|
|
•
|
our ability to achieve expected coverage improvement and distributable cash growth;
|
•
|
our ability to execute a funding model with no additional equity issuances and limited parent support;
|
•
|
risks related to Marathon, including those related to Marathon’s acquisition of Andeavor or the potential merger, consolidation or combination of MPLX with us;
|
•
|
changes in the expected value of and benefits derived from acquisitions, including any inability to successfully integrate acquisitions, realize expected synergies or achieve operational efficiency and effectiveness;
|
•
|
the effects of changes in global economic conditions on our business, on the business of our key customers, and on our customers’ suppliers, business partners and credit lenders;
|
•
|
a material change in the crude oil and natural gas produced in the basins where we operate;
|
•
|
the ability of our key customers to remain in compliance with the terms of their outstanding indebtedness;
|
•
|
changes in insurance markets impacting costs and the level and types of coverage available;
|
•
|
regulatory and other requirements concerning the transportation of crude oil, natural gas, NGLs and refined products, particularly in the areas where we operate;
|
•
|
changes in the cost or availability of third-party vessels, pipelines and other means of delivering and transporting crude oil, feedstocks, natural gas, NGLs and refined products;
|
•
|
the coverage and ability to recover claims under our insurance policies;
|
•
|
the availability and costs of crude oil, other refinery feedstocks and refined products;
|
•
|
the timing and extent of changes in commodity prices and demand for refined products, natural gas and NGLs;
|
•
|
changes in our cash flow from operations;
|
•
|
changes in our tax status;
|
•
|
the ability of our largest customers to perform under the terms of our gathering agreements;
|
•
|
the risk of contract cancellation, non-renewal or failure to perform by those in our supply and distribution chains, and the ability to replace such contracts and/or customers;
|
•
|
the suspension, reduction or termination of Marathon’s obligations under our commercial agreements and our secondment agreements;
|
•
|
a material change in profitability among our customers;
|
•
|
direct or indirect effects on our business resulting from actual or threatened terrorist or activist incidents, cyber-security breaches or acts of war;
|
•
|
weather conditions, earthquakes or other natural disasters affecting operations by us or our key customers or the areas in which our customers operate;
|
•
|
disruptions due to equipment interruption or failure at our facilities, Marathon’s facilities or third-party facilities on which our key customers are dependent;
|
•
|
our inability to complete acquisitions on economically acceptable terms or within anticipated timeframes;
|
•
|
actions of customers and competitors;
|
•
|
changes in our credit profile;
|
•
|
changes to our capital budget;
|
•
|
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 in obtaining necessary approvals and permits, compliance costs or other factors beyond our control;
|
•
|
operational hazards inherent in refining and natural gas processing operations and in transporting and storing crude oil, natural gas, NGLs and refined products;
|
•
|
changes in capital requirements or in expected timing, execution and benefits of planned capital projects;
|
•
|
seasonal variations in demand for natural gas and refined products;
|
•
|
adverse rulings, judgments, or settlements in litigation or other legal or tax matters, including unexpected environmental remediation costs in excess of any accruals, which affect us or Marathon;
|
•
|
risks related to labor relations and workplace safety;
|
•
|
political developments; and
|
•
|
the factors described in greater detail under “Competition,” “Pipeline, Terminal and Rail Safety,” “Rate and Other Regulations” and “Environmental Regulations” in Item 1 and “Risk Factors” in Item 1A, and our other filings with the SEC.
|
4
|
|
|
|
Business
|
Item 1.
|
Business
|
|
|
December 31, 2018
|
5
|
Business
|
•
|
Crude oil and other feedstock storage tankage and refined product storage tankage at Marathon’s Mandan, Salt Lake City and Los Angeles refineries;
|
•
|
Rail terminals and truck racks at Marathon’s Mandan, Salt Lake City and Los Angeles refineries for the loading and unloading of various refined products from manifest and other railcars and trucks, respectively;
|
•
|
Interconnecting pipeline facilities in the Los Angeles area as well as other railroad tracks and adjoining lands;
|
•
|
Mesquite and Yucca truck unloading stations in New Mexico for the unloading of crude trucks and injection of crude into the TexNew Mex pipeline;
|
•
|
Mason East and Jackrabbit (“Wink”) truck unloading and injection stations in Texas that receive crude via the T-Station line and trucks for injection into the Kinder Morgan and Bobcat Pipeline;
|
•
|
The Jal storage, injection and rail unloading facility in New Mexico that stores and supplies NGLs for use in Marathon’s El Paso refinery;
|
•
|
NGL storage tankage, a rail and truck terminal for the loading and unloading of natural gas liquids from railcars and trucks as well as from the waterline at the Wingate facility in New Mexico;
|
•
|
Crude oil and other feedstock storage tankage at the Clearbrook terminal in Minnesota;
|
•
|
Bobcat Pipeline that transports crude oil between the Mason East Station and the Wink Station;
|
•
|
Benny Pipeline that delivers crude oil from the Conan terminal in Texas to a connection with gathering lines in New Mexico;
|
•
|
All of the issued and outstanding limited liability company interests in: (i) Tesoro Great Plains Midstream LLC, which owns BakkenLink Pipeline LLC, (ii) Andeavor MPL Holdings LLC, which holds the investment in MPL, (iii) Andeavor Logistics CD LLC, (iv) Western Refining Conan Gathering, LLC, which owns the Conan Crude Oil Gathering System, (v) Western Refining Delaware Basin Storage, LLC, (vi) Asphalt Terminals LLC, which holds the investment in PNAC, and (vii) 67% of all of the issued and outstanding limited liability company interests in ALRP; and
|
•
|
Certain related real property interests.
|
6
|
|
|
|
Business
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 to our consolidated financial statements in Item 8 for further discussion.
|
(b)
|
The presentation of wholesale fuel sales was impacted by the adoption of ASC 606 on January 1, 2018. Beginning January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements were netted.
|
|
|
December 31, 2018
|
7
|
Business
|
Asset
|
Number of Terminals
|
Location
|
Key Products Handled
|
Volume Source
|
Terminalling Throughput Capacity (Mbpd)
|
Storage Capacity (thousand barrels)
|
Pipeline Mileage (b)
|
|||
Land Terminals
|
44
|
AK, AZ, CA, ID, MN, ND, NM, NV, TX, UT, WA
|
Crude Oil, Refined Products, Asphalt
|
Marathon, Third-Party
|
1,439
|
|
62,673
|
|
—
|
|
Marine Terminals
|
6
|
CA, MN, WA
|
Crude Oil, Refined Products
|
Marathon, Third-Party
|
2,124
|
|
2,900
|
|
—
|
|
Northwest Pipeline System
|
—
|
CO, ID, OR, UT, WA, WY
|
Crude Oil, Refined Products
|
Marathon, Third-Party
|
—
|
|
—
|
|
1,996
|
|
Southern California System
|
—
|
CA
|
Crude Oil, Natural Gas, Refined Product
|
Marathon, Third-Party
|
—
|
|
—
|
|
193
|
|
Kenai Pipeline
|
—
|
AK
|
Refined Products
|
Marathon
|
—
|
|
—
|
|
74
|
|
Salt Lake City Short-haul
|
—
|
UT
|
Crude Oil, Refined Products
|
Marathon
|
—
|
|
—
|
|
22
|
|
Northern California System
|
—
|
CA
|
Crude Oil, Refined Products
|
Marathon
|
—
|
|
—
|
|
14
|
|
St. Paul Park
|
—
|
MN
|
Crude Oil, Natural Gas
|
Marathon
|
—
|
|
—
|
|
13
|
|
Petroleum Coke Handling (a)
|
1
|
CA
|
Petroleum Coke
|
Marathon
|
—
|
|
—
|
|
—
|
|
|
51
|
|
|
|
3,563
|
|
65,573
|
|
2,312
|
|
(a)
|
Our Petroleum Coke handling facility has capacity of
2,600
metric tons per day.
|
(b)
|
The pipeline mileage associated with our equity method investments is not included in the table. Our equity method investments are discussed below.
|
•
|
providing storage services;
|
•
|
transporting refined products including asphalt;
|
•
|
delivering crude oil, refined products and intermediate feedstocks from vessels to refineries and terminals;
|
•
|
loading and unloading crude oil transported by unit train to Marathon’s Anacortes refinery;
|
•
|
loading and unloading from marine vessels and barges;
|
•
|
transferring refined products from terminals to trucks, barges, rail cars and pipelines;
|
•
|
providing ancillary services, ethanol blending and additive injection; and
|
•
|
handling petroleum coke for Marathon’s Los Angeles refinery.
|
•
|
MPL, which owns and operates an approximate 550 mile crude oil pipeline in Minnesota; and
|
•
|
PNAC, which owns and operates an asphalt terminal in Nevada.
|
8
|
|
|
|
Business
|
|
|
December 31, 2018
|
9
|
Business
|
System
|
Location
|
Key Products Handled
|
Volume Source
|
Processing Throughput Capacity
(MMcf/d)
|
Pipeline
Mileage (b) |
||
High Plains
|
MT, ND
|
Crude Oil
|
Marathon, Third-Party
|
—
|
|
1,119
|
|
Southwest
|
NM, TX
|
Crude Oil
|
Marathon, Third-Party
|
—
|
|
983
|
|
North Dakota (a)
|
ND
|
Crude Oil, Natural Gas, Produced Water
|
Marathon, Third-Party
|
170
|
|
897
|
|
Uinta Basin
|
CO, UT
|
Natural Gas
|
Marathon, Third-Party
|
650
|
|
631
|
|
Green River (a)
|
UT, WY
|
Crude Oil, Natural Gas
|
Marathon, Third-Party
|
850
|
|
619
|
|
Vermillion
|
CO, UT, WY
|
Natural Gas
|
Third-Party
|
57
|
|
482
|
|
|
|
|
|
1,727
|
|
4,731
|
|
(a)
|
We have a combined fractionation throughput capacity of
33.8
Mbpd at our Blacks Fork, Robinson Lake and Belfield complexes.
|
(b)
|
The pipeline mileage associated with our equity method investments is not included in the table. Our equity method investments are discussed below.
|
•
|
gathering and transporting crude oil, natural gas and produced water;
|
•
|
operating storage facilities with tanks located in strategic areas;
|
•
|
operating truck-based crude oil gathering; and
|
•
|
processing gas under fee-based processing, keep-whole and POP agreements.
|
•
|
ALRP, which operates a recently constructed 113 mile crude oil pipeline located in the Delaware and Midland basins in west Texas;
|
•
|
RGS, which operates the infrastructure that transports gas along 312 miles of pipeline from certain fields to several re-delivery points, including natural gas processing facilities that are owned by Andeavor Logistics or a third party;
|
•
|
TRG, which transports natural gas across 52 miles of pipeline to our natural gas processing facilities in the Uinta Basin; and
|
•
|
UBFS, which operates 79 miles of gathering pipeline and gas compression assets located in the southeastern Uinta Basin.
|
10
|
|
|
|
Business
|
|
|
December 31, 2018
|
11
|
Business
|
•
|
pipelines operate as common carriers;
|
•
|
access to transportation services and pipeline rates be non-discriminatory;
|
•
|
transported crude oil volumes be apportioned without unreasonable discrimination if more crude oil is offered for transportation than can be transported immediately; and
|
•
|
pipeline rates be just and reasonable.
|
12
|
|
|
|
Business
|
|
|
December 31, 2018
|
13
|
Business
|
14
|
|
|
|
Business
|
|
|
December 31, 2018
|
15
|
Risk Factors
|
Item 1A.
|
Risk Factors
|
•
|
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;
|
•
|
damage to pipelines and other assets from construction, farm and utility equipment;
|
•
|
damage to third-party property or persons, including injury or loss of life;
|
•
|
mechanical or structural failures on our pipelines, at our facilities or at third-party facilities on which our operations are dependent, including Marathon’s facilities;
|
•
|
ruptures, fires and explosions;
|
•
|
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;
|
•
|
curtailments of operations relative to severe seasonal weather; and
|
•
|
other hazards.
|
16
|
|
|
|
Risk Factors
|
•
|
the volatility and uncertainty of regional pricing differentials;
|
•
|
the availability of drilling rigs for producers;
|
•
|
weather-related curtailment of operations by producers and disruptions to truck gathering operations;
|
•
|
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;
|
•
|
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
|
•
|
the anticipated future prices of crude oil, refined products, NGLs and natural gas in surrounding markets.
|
|
|
December 31, 2018
|
17
|
Risk Factors
|
18
|
|
|
|
Risk Factors
|
|
|
December 31, 2018
|
19
|
Risk Factors
|
20
|
|
|
|
Risk Factors
|
•
|
the risk of contract cancellation, non-renewal or failure to perform by their customers;
|
•
|
disruptions due to equipment interruption or failure at their facilities or at third-party facilities on which their business is dependent;
|
•
|
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;
|
•
|
their ability to remain in compliance with the terms of their outstanding indebtedness;
|
•
|
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;
|
•
|
state and federal environmental, economic, health and safety, energy and other policies and regulations and any changes in those policies and regulations;
|
|
|
December 31, 2018
|
21
|
Risk Factors
|
•
|
environmental incidents and violations and related remediation costs, fines and other liabilities; and
|
•
|
changes in crude oil, natural gas, NGLs and refined product inventory levels and carrying costs.
|
22
|
|
|
|
Risk Factors
|
|
|
December 31, 2018
|
23
|
Risk Factors
|
•
|
the volume of crude oil, natural gas, NGLs and refined products that we handle;
|
•
|
the tariff rates with respect to volumes we transport on our pipelines (including whether such tariffs are for long-haul or short-haul segments);
|
•
|
the terminalling, trucking, processing and storage fees with respect to non-pipeline volumes we handle;
|
•
|
the mix of gathering, processing, transportation and storage services we provide; and
|
•
|
prevailing economic conditions.
|
•
|
the amount of our operating expenses and general and administrative expenses, including reimbursements to or from Marathon with respect to those expenses and payment of an annual corporate services fee to Marathon;
|
•
|
the amount of our capital expenditures;
|
•
|
the volatility in capital markets at the time of new debt or equity issuances;
|
•
|
the timing of distributions on new unit issuances relating to acquisitions;
|
•
|
the cost of acquisitions, if any;
|
•
|
our debt service requirements and other liabilities;
|
•
|
fluctuations in our working capital needs;
|
•
|
our ability to borrow funds and access capital markets;
|
•
|
restrictions contained in our credit facilities and other debt service requirements;
|
•
|
an uninsured catastrophic loss;
|
•
|
the amount of cash reserves established by our general partner; and
|
•
|
other business risks impacting our cash levels.
|
•
|
make certain cash distributions;
|
•
|
incur certain indebtedness;
|
•
|
incur certain liens;
|
•
|
engage in certain mergers or consolidations and transfers of assets; and
|
•
|
enter into certain transactions with affiliates.
|
24
|
|
|
|
Risk Factors
|
•
|
the potential for unexpected costs, delays and challenges that may arise in integrating acquisitions into our existing business;
|
•
|
limitations on our ability to realize the expected cost savings and synergies from an acquisition;
|
•
|
challenges related to integrating acquired operations that have management teams and company cultures that differ from our own;
|
•
|
challenges related to the integration of businesses that operate in new geographic areas, including difficulties in identifying and gaining access to customers in new markets;
|
•
|
difficulties of managing operations outside of our existing core business, which may require development of additional skills and competencies; and
|
•
|
discovery of previously unknown liabilities following an acquisition with the acquired business or assets for which we cannot receive reimbursement under applicable indemnification provisions.
|
•
|
acts of God, fires, floods or storms;
|
•
|
compliance with orders of courts or any governmental authority;
|
•
|
explosions, wars, terrorist acts, riots, strikes, lockouts or other industrial disturbances;
|
•
|
accidental disruption of service;
|
•
|
breakdown of machinery, storage tanks or pipelines and inability to obtain or unavoidable delay in obtaining material or equipment; and
|
•
|
similar events or circumstances, so long as such events or circumstances are beyond our reasonable control and could not have been prevented by our due diligence.
|
|
|
December 31, 2018
|
25
|
Risk Factors
|
•
|
Neither our partnership agreement nor any other agreement requires Marathon to pursue a business strategy that favors us or utilizes our assets, which could involve decisions by Marathon 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. Marathon’s directors and officers have a fiduciary duty to make these decisions in the best interests of the stockholders of Marathon;
|
•
|
Marathon, 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;
|
•
|
Marathon may be constrained by the terms of its debt instruments from taking actions, or refraining from taking actions, that may be in our best interests;
|
•
|
Our partnership agreement replaces the fiduciary duties that would otherwise be owed by our general partner with contractual standards governing its duties, limiting its liability and restricting the remedies available to our unitholders for actions that, without the limitations, might constitute breaches of fiduciary duty;
|
•
|
Except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval;
|
•
|
Our general partner determines the amount and timing of asset purchases and sales, borrowings, issuance of additional partnership securities and the creation, reduction or increase of cash reserves, each of which can affect the amount of cash that is distributed to our unitholders;
|
•
|
Our general partner determines the amount and timing of many of our cash expenditures and whether a cash expenditure is classified as an expansion capital expenditure, which does not reduce operating surplus. This determination can affect the amount of cash that is distributed to our unitholders and to our general partner and the amount of adjusted operating surplus in any given period;
|
•
|
Our general partner determines which costs incurred by it are reimbursable by us;
|
•
|
Our general partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make incentive distributions;
|
•
|
Our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf;
|
•
|
Our general partner has limited and may continue to limit its liability regarding our contractual and other obligations;
|
•
|
Our general partner may exercise its right to call and purchase all of the common units not owned by it and its affiliates if it and its affiliates own more than 75% of the common units, 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;
|
•
|
Our general partner controls the enforcement of obligations owed to us by our general partner and its affiliates, including our commercial agreements with our Sponsor; and
|
•
|
Our general partner decides whether to retain separate counsel, accountants, or others to perform services for us.
|
26
|
|
|
|
Risk Factors
|
•
|
provides that whenever our general partner makes a determination or takes, or declines to take, any other action in its capacity as our general partner, our general partner is required to make such determination, or take or decline to take such other action, in good faith, and will not be subject to any other or different standard imposed by our partnership agreement, Delaware law, or any other law, rule or regulation, or at equity;
|
•
|
provides that our general partner will not have any liability to us or our unitholders for decisions made in its capacity as a general partner so long as it acted in good faith, which requires that it believed that the decision was in, or not opposed to, the best interest of our partnership;
|
•
|
provides that our general partner and its officers and directors will not be liable for monetary damages to us or our limited partners resulting from any act or omission unless there has been a final and nonappealable judgment entered by a court of competent jurisdiction determining that our general partner or its officers and directors, as the case may be, acted in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the conduct was criminal;
|
•
|
provides that our general partner will not be in breach of its obligations under the partnership agreement or its fiduciary duties to us or our limited partners if a transaction with an affiliate or the resolution of a conflict of interest is not approved by our conflicts committee or approved by a vote of a majority of outstanding common units, but is entered into in good faith by our general partner and is on terms no less favorable to us than those generally being provided to or available from unrelated third parties or fair and reasonable to us, taking into account the totality of the relationships among the parties involved; and
|
•
|
provides that in resolving conflicts of interest, it is presumed that in making its decision the general partner acted in good faith and in any proceeding brought by or on behalf of any limited partner or us, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption.
|
|
|
December 31, 2018
|
27
|
Risk Factors
|
•
|
our unitholders’ proportionate ownership interest in us will decrease;
|
•
|
the amount of cash available for distribution on each unit may decrease;
|
•
|
the relative voting strength of each previously outstanding unit may be diminished; and
|
•
|
the market price of our common units and Preferred Units may decline.
|
28
|
|
|
|
Risk Factors
|
•
|
we were conducting business in a state but had not complied with that particular state’s partnership statute; or
|
•
|
his right to act with other unitholders to remove or replace the general partner, to approve some amendments to our partnership agreement or to take other actions under our partnership agreement constitute control of our business.
|
|
|
December 31, 2018
|
29
|
Risk Factors
|
30
|
|
|
|
Risk Factors
|
|
|
December 31, 2018
|
31
|
Risk Factors
|
32
|
|
|
|
Risk Factors
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
|
|
December 31, 2018
|
33
|
Market for Equity, Stockholder Matters and Purchases of Equity Securities
|
Item 5.
|
Market for Registrant’s Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities
|
34
|
|
|
|
Selected Financial Data
|
Item 6.
|
Selected Financial Data
|
•
|
gathering, storage and transportation assets in the Permian Basin; legacy Western Refining assets and associated crude terminals; the majority of Andeavor’s remaining refining terminalling, transportation and storage assets; and equity method investments in ALRP, MPL and PNAC on August 6, 2018. In addition, the Conan Crude Oil Gathering System and LARIP were transferred at cost plus incurred interest;
|
•
|
crude oil, feedstock and refined products storage, the Anacortes marine terminal, a manifest rail facility and crude oil and refined products pipelines located in Anacortes, Washington on November 8, 2017 (the “Anacortes Logistics Assets”);
|
•
|
logistic assets owned by WNRL, which consisted of pipelines, gathering, terminalling, storage, transportation and wholesale fuel distribution assets, and provides services to our Sponsor’s refining segment effective October 30, 2017;
|
•
|
tankage, refined product storage, marine terminal terminalling and storage assets, pipelines, causeway and ancillary equipment located in Martinez, California, effective November 21, 2016; and
|
•
|
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.
|
|
|
December 31, 2018
|
35
|
Selected Financial Data
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018 (a)
|
|
2017 (a)
|
|
2016 (a)
|
|
2015 (a)
|
|
2014 (a)
|
||||||||||
|
(In millions, except units and per unit amounts)
|
||||||||||||||||||
Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues (a) (b)
|
$
|
2,380
|
|
|
$
|
3,249
|
|
|
$
|
1,669
|
|
|
$
|
1,112
|
|
|
$
|
600
|
|
Net earnings
|
600
|
|
|
306
|
|
|
277
|
|
|
249
|
|
|
56
|
|
|||||
Loss attributable to Predecessors
|
28
|
|
|
43
|
|
|
62
|
|
|
43
|
|
|
46
|
|
|||||
Net earnings attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
(3
|
)
|
|||||
Net earnings attributable to partners
|
628
|
|
|
349
|
|
|
339
|
|
|
272
|
|
|
99
|
|
|||||
Preferred unitholders’ interest in net earnings
|
44
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
General partner’s interest in net earnings, including incentive distribution rights
|
—
|
|
|
79
|
|
|
152
|
|
|
73
|
|
|
43
|
|
|||||
Limited partners’ interest in net earnings
|
584
|
|
|
267
|
|
|
187
|
|
|
199
|
|
|
43
|
|
|||||
Subordinated unitholders’ interest in net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
Net earnings per limited partner unit:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common - basic
|
$
|
2.57
|
|
|
$
|
2.11
|
|
|
$
|
1.87
|
|
|
$
|
2.33
|
|
|
$
|
0.96
|
|
Common - diluted
|
2.57
|
|
|
2.11
|
|
|
1.87
|
|
|
2.33
|
|
|
0.96
|
|
|||||
Subordinated - basic and diluted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.62
|
|
|||||
Cash distribution per unit
|
4.0750
|
|
|
3.8062
|
|
|
3.3070
|
|
|
2.8350
|
|
|
2.4125
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of December 31,
|
||||||||||||||||||
|
2018
|
|
2017 (a)
|
|
2016 (a)
|
|
2015 (a)
|
|
2014 (a)
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
10,295
|
|
|
$
|
9,505
|
|
|
$
|
6,589
|
|
|
$
|
5,131
|
|
|
$
|
4,955
|
|
Total debt, net of unamortized issuance costs
|
4,964
|
|
|
4,128
|
|
|
4,054
|
|
|
2,844
|
|
|
2,544
|
|
(a)
|
Includes the historical results related to Andeavor Logistics and Predecessors. For the years ended 2015 and 2014, retrospectively adjusted amounts for the 2018 Drop Down are not shown because management does not believe presentation of these impacts is material to an investor’s understanding of Andeavor Logistics’ current operations. Other than certain assets included in the 2018 Drop Down, WNRL and transportation regulated by the FERC and the Regulatory Commission of Alaska tariffs charged to our Sponsor on the refined products pipeline included in the logistics assets acquired in 2014, our Predecessors did not record revenue for transactions with our Sponsor for assets acquired in the Acquisitions from our Sponsor prior to the effective date of each acquisition.
|
(b)
|
Due to the adoption of ASC 606 effective January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements for the year ended December 31, 2018 were netted. See Note 1 to our consolidated financial statements in Item 8 for further discussion.
|
36
|
|
|
|
Management’s Discussion and Analysis
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
December 31, 2018
|
37
|
Management’s Discussion and Analysis
|
•
|
increasing our terminalling volumes by expanding capacity and growing our third-party services at certain of our terminals;
|
•
|
optimizing volumes and growing third-party throughput at our Terminalling and Transportation assets; and
|
•
|
pursuing strategic assets in the western and inland U.S.
|
•
|
further expanding capacity and capabilities as well as adding new origin and destination points for our common carrier pipelines in North Dakota and Montana;
|
•
|
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;
|
•
|
expanding our crude oil gathering footprint in the Permian Basin; and
|
•
|
pursuing strategic assets across the western and inland U.S.
|
•
|
Average terminalling revenue per barrel;
|
•
|
Average pipeline transportation revenue per barrel;
|
•
|
Average margin on NGL sales per barrel;
|
•
|
Average gas gathering and processing revenue per MMBtu;
|
38
|
|
|
|
Management’s Discussion and Analysis
|
•
|
Average crude oil and water gathering revenue per barrel;
|
•
|
Wholesale fuel sales per gallon; and
|
•
|
Average wholesale fuel sales margin per gallon.
|
•
|
increase throughput volumes on our gathering systems by making connections to new wells and 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 in the regions we operate;
|
•
|
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 Marathon or third-party volumes.
|
|
|
December 31, 2018
|
39
|
Management’s Discussion and Analysis
|
•
|
Financial non-GAAP measure of EBITDA;
|
•
|
Financial non-GAAP measure of distributable cash flow;
|
•
|
Financial non-GAAP measure of Segment EBITDA;
|
•
|
Liquidity non-GAAP measure of distributable cash flow;
|
•
|
Liquidity non-GAAP measure of distributable cash flow attributable to common unitholders;
|
•
|
Operating performance measure of average margin on NGL sales per barrel; and
|
•
|
Operating performance measure of average wholesale fuel sales margin per gallon.
|
•
|
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.
|
40
|
|
|
|
Management’s Discussion and Analysis
|
(a)
|
Due to the adoption of ASC 606 effective January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements for year ended December 31, 2018 were netted. See Note 1 to our consolidated financial statements in Item 8 for further discussion.
|
(b)
|
See “Non-GAAP Reconciliations” section below for further information regarding these non-GAAP measures.
|
|
|
December 31, 2018
|
41
|
Management’s Discussion and Analysis
|
42
|
|
|
|
Management’s Discussion and Analysis
|
|
|
December 31, 2018
|
43
|
Management’s Discussion and Analysis
|
(a)
|
See “Non-GAAP Reconciliations” section below for further information regarding this non-GAAP measure.
|
44
|
|
|
|
Management’s Discussion and Analysis
|
|
Year Ended December 31,
|
||||||||||
|
2018 (a)
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Revenues
|
|
|
|
|
|
||||||
Terminalling
|
$
|
888
|
|
|
$
|
690
|
|
|
$
|
480
|
|
Pipeline transportation
|
160
|
|
|
130
|
|
|
125
|
|
|||
Other revenues
|
6
|
|
|
18
|
|
|
—
|
|
|||
Total Revenues
|
1,054
|
|
|
838
|
|
|
605
|
|
|||
Costs and Expenses
|
|
|
|
|
|
||||||
Operating expenses (excluding depreciation and amortization)
|
373
|
|
|
302
|
|
|
231
|
|
|||
General and administrative expenses
|
38
|
|
|
47
|
|
|
38
|
|
|||
Depreciation and amortization expenses
|
144
|
|
|
117
|
|
|
95
|
|
|||
(Gain) loss on asset disposals and impairments
|
1
|
|
|
(25
|
)
|
|
1
|
|
|||
Operating Income
|
$
|
498
|
|
|
$
|
397
|
|
|
$
|
240
|
|
Segment EBITDA (b)
|
$
|
660
|
|
|
$
|
530
|
|
|
$
|
335
|
|
Rates (c)
|
|
|
|
|
|
||||||
Average terminalling revenue per barrel
|
$
|
1.38
|
|
|
$
|
1.30
|
|
|
$
|
1.31
|
|
Average
pipeline
transportation revenue per barrel
|
$
|
0.43
|
|
|
$
|
0.40
|
|
|
$
|
0.39
|
|
(a)
|
Adjusted to include the historical results of the Predecessors.
|
(b)
|
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.
|
(c)
|
Amounts may not recalculate due to rounding of dollar and volume information.
|
|
|
December 31, 2018
|
45
|
Management’s Discussion and Analysis
|
(a)
|
See “Non-GAAP Reconciliations” section below for further information regarding this non-GAAP measure.
|
(a)
|
Volumes represent barrels sold in keep-whole arrangements, net barrels retained in POP arrangements and other associated products.
|
(b)
|
The adoption of ASC 606 changed the presentation of our gas gathering and processing throughput volumes. Volumes processed internally to enhance our NGL sales are no longer reported in our throughput volumes as certain fees contained within our commodity contracts are now reported as a reduction of “NGL expense.” The impact of the adoption in 2018 was
176
thousand MMBtu/d now being used internally and not reported in the throughput volumes used to calculate our average gas gathering and processing revenue per MMBtu.
|
(c)
|
Adjusted to include the historical results of the Predecessors.
|
46
|
|
|
|
Management’s Discussion and Analysis
|
|
Year Ended December 31,
|
||||||||||
|
2018 (a)
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Revenues
|
|
|
|
|
|
||||||
NGL sales (b)
|
$
|
436
|
|
|
$
|
369
|
|
|
$
|
103
|
|
Gas gathering and processing
|
330
|
|
|
333
|
|
|
264
|
|
|||
Crude oil and water gathering (f)
|
336
|
|
|
262
|
|
|
582
|
|
|||
Pass-thru and other (c)
|
161
|
|
|
165
|
|
|
115
|
|
|||
Total Revenues
|
1,263
|
|
|
1,129
|
|
|
1,064
|
|
|||
Costs and Expenses
|
|
|
|
|
|
||||||
Cost of fuel and other (excluding items shown separately below) (f)
|
—
|
|
|
—
|
|
|
316
|
|
|||
NGL expense (excluding items shown separately below) (b)(c)
|
206
|
|
|
265
|
|
|
2
|
|
|||
Operating expenses (excluding depreciation and amortization)
|
489
|
|
|
374
|
|
|
329
|
|
|||
General and administrative expenses
|
42
|
|
|
54
|
|
|
41
|
|
|||
Depreciation and amortization expenses
|
213
|
|
|
191
|
|
|
138
|
|
|||
Loss on asset disposals and impairments
|
3
|
|
|
—
|
|
|
3
|
|
|||
Operating Income
|
$
|
310
|
|
|
$
|
245
|
|
|
$
|
235
|
|
Segment EBITDA (d)
|
$
|
537
|
|
|
$
|
446
|
|
|
$
|
392
|
|
Rates (e)
|
|
|
|
|
|
||||||
Average margin on NGL sales per barrel (b)(c)(d)
|
$
|
59.92
|
|
|
$
|
34.77
|
|
|
$
|
36.59
|
|
Average gas gathering and processing revenue per MMBtu
|
$
|
1.19
|
|
|
$
|
0.95
|
|
|
$
|
0.82
|
|
Average crude oil and water gathering revenue per barrel (f)
|
$
|
2.05
|
|
|
$
|
1.86
|
|
|
$
|
5.76
|
|
(a)
|
Adjusted to include the historical results of the Predecessors.
|
(b)
|
We had
24.4
Mbpd and
22.2
Mbpd of gross NGL sales under POP and keep-whole arrangements for the years ended
December 31, 2018
and
2017
, respectively. We retained
10.4
Mbpd and
8.3
Mbpd, respectively, under these arrangements. The difference between gross sales barrels and barrels retained is reflected in NGL expense resulting from the gross presentation required for the POP arrangements associated with the North Dakota Gathering and Processing Assets.
|
(c)
|
Included in NGL expense for 2017 were
$2 million
of costs related to crude oil volumes obtained in connection with the North Dakota Gathering and Processing Assets acquisition. The corresponding revenues were recognized in pass-thru and other revenue. As such, the calculation of the average margin on NGL sales per barrel excludes this amount.
|
(d)
|
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.
|
(e)
|
Amounts may not recalculate due to rounding of dollar and volume information.
|
(f)
|
The retrospectively adjusted results for the year ended
December 31, 2016
included certain contracts of our Predecessor that were recognized as buy/sell arrangements. There were no such arrangements during the years ended
December 31, 2018
or
2017
.
|
|
|
December 31, 2018
|
47
|
Management’s Discussion and Analysis
|
(a)
|
See “Non-GAAP Reconciliations” section below for further information regarding this non-GAAP measure.
|
|
Year Ended
December 31,
|
||||||
|
2018
|
|
2017 (a)
|
||||
Revenues
|
|
|
|
||||
Fuel sales (b)
|
$
|
46
|
|
|
$
|
1,267
|
|
Other wholesale
|
33
|
|
|
15
|
|
||
Total Revenues
|
79
|
|
|
1,282
|
|
||
Costs and Expenses
|
|
|
|
||||
Cost of fuel and other (excluding items shown separately below) (b)
|
—
|
|
|
1,244
|
|
||
Operating expenses (excluding depreciation and amortization)
|
39
|
|
|
15
|
|
||
General and administrative expenses
|
2
|
|
|
3
|
|
||
Depreciation and amortization expenses
|
11
|
|
|
5
|
|
||
Operating Income
|
$
|
27
|
|
|
$
|
15
|
|
Segment EBITDA (c)
|
$
|
38
|
|
|
$
|
20
|
|
Rates (d)
|
|
|
|
||||
Wholesale fuel sales per gallon (b)
|
|
3.8
|
¢
|
|
|
||
Average wholesale fuel sales margin per gallon (b)(c)
|
|
|
|
3.0
|
¢
|
(a)
|
Adjusted to include the historical results of the Predecessors. The 2017 period only includes the results beginning June 1, 2017.
|
(b)
|
Due to the adoption of ASC 606 effective January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements for the year ended 2018 were netted. Therefore, we no longer present cost of fuel and other or average margin on fuel sales per gallon. Instead, we now present wholesale fuel sales per gallon, which is not a direct comparison of the previous metric.
|
(c)
|
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.
|
(d)
|
Amounts may not recalculate due to rounding of dollar and volume information.
|
48
|
|
|
|
Management’s Discussion and Analysis
|
(a)
|
Adjusted to include the historical results of the Predecessors.
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||
|
2018 (a)
|
|
2017 (a)
|
|
2016 (a)
|
|
2018 (a)
|
|
2017 (a)
|
|
2016 (a)
|
|
2018
|
|
2017 (a)
|
||||||||||||||||
|
Terminalling and Transportation
|
Gathering and Processing
|
Wholesale
|
||||||||||||||||||||||||||||
Segment Operating Income
|
$
|
498
|
|
|
$
|
397
|
|
|
$
|
240
|
|
|
$
|
310
|
|
|
$
|
245
|
|
|
$
|
235
|
|
|
$
|
27
|
|
|
$
|
15
|
|
Depreciation and amortization expenses
|
144
|
|
|
117
|
|
|
95
|
|
|
213
|
|
|
191
|
|
|
138
|
|
|
11
|
|
|
5
|
|
||||||||
Equity in earnings of equity method investments
|
17
|
|
|
12
|
|
|
—
|
|
|
14
|
|
|
10
|
|
|
13
|
|
|
—
|
|
|
—
|
|
||||||||
Other income, net
|
1
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||||||
Segment EBITDA
|
$
|
660
|
|
|
$
|
530
|
|
|
$
|
335
|
|
|
$
|
537
|
|
|
$
|
446
|
|
|
$
|
392
|
|
|
$
|
38
|
|
|
$
|
20
|
|
(a)
|
Adjusted to include the historical results of the Predecessors.
|
|
|
December 31, 2018
|
49
|
Management’s Discussion and Analysis
|
|
Year Ended December 31,
|
||||||||||
|
2018 (a)
|
|
2017 (a)
|
|
2016 (a)
|
||||||
EBITDA
|
$
|
1,201
|
|
|
$
|
949
|
|
|
$
|
705
|
|
Predecessor impact
|
12
|
|
|
8
|
|
|
13
|
|
|||
Maintenance capital expenditures (b)
|
(111
|
)
|
|
(119
|
)
|
|
(72
|
)
|
|||
Reimbursement for maintenance capital expenditures (b)
|
33
|
|
|
31
|
|
|
28
|
|
|||
Changes in deferred revenue (c)
|
3
|
|
|
3
|
|
|
7
|
|
|||
Net (gain) loss on asset disposals and impairments
|
4
|
|
|
(25
|
)
|
|
4
|
|
|||
Interest and financing costs, net
|
(233
|
)
|
|
(330
|
)
|
|
(195
|
)
|
|||
Proceeds from sale of assets
|
—
|
|
|
29
|
|
|
8
|
|
|||
Amortized debt costs
|
10
|
|
|
85
|
|
|
12
|
|
|||
Adjustments for equity method investments
|
17
|
|
|
18
|
|
|
17
|
|
|||
Other (d)
|
12
|
|
|
19
|
|
|
5
|
|
|||
Distributable Cash Flow
|
948
|
|
|
668
|
|
|
532
|
|
|||
Less: Preferred unit distributions (e)
|
(41
|
)
|
|
(3
|
)
|
|
—
|
|
|||
Distributable Cash Flow Attributable to Common Unitholders
|
$
|
907
|
|
|
$
|
665
|
|
|
$
|
532
|
|
(a)
|
Adjusted to include the historical results of the Predecessors.
|
(b)
|
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.
|
(c)
|
Included in changes in deferred revenue are adjustments to remove the impact of the adoption of ASC 606 on January 1, 2018 as well as the impact from the timing of recognition with certain of our contracts that contain minimum volume commitment with clawback provisions.
|
(d)
|
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.
|
(e)
|
Represents the cash distributions earned by the Preferred Units for the years ended
December 31, 2018
and 2017 assuming a distribution is declared by the Board. Cash distributions to be paid to holders of the Preferred Units are not available to common unitholders.
|
|
Year Ended December 31,
|
||||||||||
|
2018 (a)
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Net Cash from Operating Activities
|
$
|
1,029
|
|
|
$
|
687
|
|
|
$
|
442
|
|
Changes in assets and liabilities
|
(17
|
)
|
|
14
|
|
|
104
|
|
|||
Predecessors impact
|
12
|
|
|
8
|
|
|
13
|
|
|||
Maintenance capital expenditures (b)
|
(111
|
)
|
|
(119
|
)
|
|
(72
|
)
|
|||
Reimbursement for maintenance capital expenditures (b)
|
33
|
|
|
31
|
|
|
28
|
|
|||
Adjustments for equity method investments
|
(4
|
)
|
|
3
|
|
|
2
|
|
|||
Gain (loss) on sales of assets, net of proceeds
|
—
|
|
|
29
|
|
|
8
|
|
|||
Changes in deferred revenues (c)
|
3
|
|
|
3
|
|
|
7
|
|
|||
Other (d)
|
3
|
|
|
12
|
|
|
—
|
|
|||
Distributable Cash Flow
|
948
|
|
|
668
|
|
|
532
|
|
|||
Less: Preferred unit distributions (e)
|
(41
|
)
|
|
(3
|
)
|
|
—
|
|
|||
Distributable Cash Flow Attributable to Common Unitholders
|
$
|
907
|
|
|
$
|
665
|
|
|
$
|
532
|
|
(a)
|
Adjusted to include the historical results of the Predecessors.
|
(b)
|
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.
|
(c)
|
Included in changes in deferred revenue are adjustments to remove the impact of the adoption of ASC 606 on January 1, 2018 as well as the impact from the timing of recognition with certain of our contracts that contain minimum volume commitment with clawback provisions.
|
(d)
|
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.
|
50
|
|
|
|
Management’s Discussion and Analysis
|
(e)
|
Represents the cash distributions earned by the Preferred Units for the years ended
December 31, 2018
and 2017 assuming a distribution is declared by the Board. Cash distributions to be paid to holders of the Preferred Units are not available to common unitholders.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Gathering and Processing Segment Operating Income
|
$
|
310
|
|
|
$
|
245
|
|
|
$
|
235
|
|
Add back:
|
|
|
|
|
|
||||||
Cost of fuel and other (excluding items shown separately below)
|
—
|
|
|
—
|
|
|
316
|
|
|||
Operating expenses (excluding depreciation and amortization)
|
489
|
|
|
374
|
|
|
329
|
|
|||
General and administrative expenses
|
42
|
|
|
54
|
|
|
41
|
|
|||
Depreciation and amortization expenses
|
213
|
|
|
191
|
|
|
138
|
|
|||
Loss on asset disposals and impairments
|
3
|
|
|
—
|
|
|
3
|
|
|||
Other commodity purchases (a)
|
—
|
|
|
2
|
|
|
—
|
|
|||
Subtract:
|
|
|
|
|
|
||||||
Gas gathering and processing revenues
|
(330
|
)
|
|
(333
|
)
|
|
(264
|
)
|
|||
Crude oil gathering revenues
|
(336
|
)
|
|
(262
|
)
|
|
(582
|
)
|
|||
Pass-thru and other revenues
|
(161
|
)
|
|
(165
|
)
|
|
(115
|
)
|
|||
Margin on NGL Sales
|
$
|
230
|
|
|
$
|
106
|
|
|
$
|
101
|
|
Divided by Total Volumes for the Period:
|
|
|
|
|
|
||||||
NGLs sales volumes (Mbpd)
|
10.4
|
|
|
8.3
|
|
|
7.5
|
|
|||
Number of days in the period
|
365
|
|
|
365
|
|
|
366
|
|
|||
Total volumes for the period (thousands of barrels) (b)
|
3,796
|
|
|
3,030
|
|
|
2,745
|
|
|||
Average Margin on NGL Sales per Barrel (b)
|
$
|
59.92
|
|
|
$
|
34.77
|
|
|
$
|
36.59
|
|
(a)
|
Included in the NGL expense for the year ended December 31, 2017 was
$2 million
of costs related to crude oil volumes obtained and immediately sold in connection with the North Dakota Gathering and Processing Assets acquisition.
|
(b)
|
Amounts may not recalculate due to rounding of dollar and volume information.
|
|
Period Ended
|
||
|
December 31, 2017 (a)
|
||
Wholesale Segment Operating Income
|
$
|
15
|
|
Add back:
|
|
||
Operating expenses (excluding depreciation and amortization)
|
15
|
|
|
General and administrative expenses
|
3
|
|
|
Depreciation and amortization expenses
|
5
|
|
|
Subtract:
|
|
||
Other wholesale revenues
|
(15
|
)
|
|
Wholesale Fuel Sales Margin
|
$
|
23
|
|
Divided by Total Volumes for the Period:
|
|
||
Fuel sales volumes (millions of gallons)
|
722
|
|
|
Average Wholesale Fuel Sales Margin per Gallon (b)
|
|
3.0
|
¢
|
(a)
|
Adjusted to include the historical results of the Predecessors. The 2017 period only includes the results beginning June 1, 2017, the date the business was originally acquired by our Sponsor.
|
(b)
|
Amounts may not recalculate due to rounding of dollar and volume information.
|
|
|
December 31, 2018
|
51
|
Management’s Discussion and Analysis
|
52
|
|
|
|
Management’s Discussion and Analysis
|
Quarter Ended
|
Total Quarterly Distribution Per Common Unit
|
|
Total Quarterly Distribution Per Common Unit, Annualized
|
|
Total Cash Distribution
(in millions)
|
|
Date of Distribution
|
||||||
December 31, 2018
|
$
|
1.0300
|
|
|
$
|
4.12
|
|
|
$
|
238
|
|
|
February 14, 2019
|
September 30, 2018
|
1.0300
|
|
|
4.12
|
|
|
238
|
|
|
November 14, 2018
|
|||
June 30, 2018
|
1.0300
|
|
|
4.12
|
|
|
209
|
|
|
August 14, 2018
|
|||
March 31, 2018
|
1.0150
|
|
|
4.06
|
|
|
205
|
|
|
May 15, 2018
|
|||
December 31, 2017
|
1.0000
|
|
|
4.00
|
|
|
205
|
|
|
February 14, 2018
|
|||
September 30, 2017
|
0.9852
|
|
|
3.94
|
|
|
201
|
|
|
November 14, 2017
|
|||
June 30, 2017 (a)
|
0.9710
|
|
|
3.88
|
|
|
147
|
|
|
August 14, 2017
|
|||
March 31, 2017
|
0.9400
|
|
|
3.76
|
|
|
140
|
|
|
May 15, 2017
|
(a)
|
On July 25, 2017, WNRL declared a quarterly cash distribution of $0.4675 per common unit, which was paid on August 18, 2017, in the amount of $33 million.
|
|
December 31,
|
||||||
Debt, including current maturities:
|
2018
|
|
2017
|
||||
Revolving Credit Facility
|
$
|
945
|
|
|
$
|
423
|
|
Dropdown Credit Facility
|
300
|
|
|
—
|
|
||
MPC Loan Agreement
|
—
|
|
|
—
|
|
||
5.500% Senior Notes due 2019
|
500
|
|
|
500
|
|
||
3.500% Senior Notes due 2022 (a)
|
500
|
|
|
500
|
|
||
6.250% Senior Notes due 2022
|
300
|
|
|
300
|
|
||
6.375% Senior Notes due 2024
|
450
|
|
|
450
|
|
||
5.250% Senior Notes due 2025
|
750
|
|
|
750
|
|
||
4.250% Senior Notes due 2027 (a)
|
750
|
|
|
750
|
|
||
5.200% Senior Notes due 2047 (a)
|
500
|
|
|
500
|
|
||
Capital lease obligations
|
15
|
|
|
9
|
|
||
Total Debt
|
5,010
|
|
|
4,182
|
|
||
Unamortized Issuance Costs (a)
|
(46
|
)
|
|
(54
|
)
|
||
Debt, Net of Unamortized Issuance Costs
|
$
|
4,964
|
|
|
$
|
4,128
|
|
(a)
|
Unamortized discounts of
$4 million
and
$5 million
associated with these senior notes are included in unamortized issuance costs at
December 31, 2018
and
2017
, respectively.
|
|
|
December 31, 2018
|
53
|
Management’s Discussion and Analysis
|
Credit Facility
|
30 day Eurodollar (LIBOR) Rate at December 31, 2018
|
|
Eurodollar Margin
|
|
Base Rate
|
|
Base Rate Margin
|
|
Commitment Fee
(unused portion)
|
Revolving Credit Facility (a)
|
2.50%
|
|
1.75%
|
|
5.50%
|
|
0.75%
|
|
0.300%
|
Dropdown Credit Facility (a)
|
2.50%
|
|
1.76%
|
|
5.50%
|
|
0.76%
|
|
0.300%
|
(a)
|
We have the option to elect whether the borrowings will bear interest at either a Eurodollar rate, for the applicable period, plus the Eurodollar margin, or a base rate plus the base rate margin of the borrowing. The applicable margins vary based upon our credit ratings. We also incur commitment fees for the unused portion of the Revolving Credit Facility and Dropdown Credit Facility at an annual rate. Letters of credit outstanding under the Revolving Credit Facility incur fees at the Eurodollar margin rate.
|
54
|
|
|
|
Management’s Discussion and Analysis
|
•
|
Lower Cost of Capital - We expect to realize incremental interest savings and lower new issuance costs;
|
•
|
Balance Sheet Flexibility - We have the ability to extend our maturity profile to increase duration and match asset life. This provides simplified and less restrictive covenants;
|
•
|
Financial and Operational Flexibility - We gain access to improved commercial terms that reduce the need for letters of credit. This enhances our financial standing with customers, suppliers and partners; and
|
•
|
Improved Market Access - We have the opportunity to a greater market depth and breadth that provides stability and reliable access. We now have access to subordinated debt and preferred equity markets.
|
|
Year Ended December 31,
|
||||||||||
|
2018 (a)
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Cash Flows From (Used In):
|
|
|
|
|
|
||||||
Operating Activities
|
$
|
1,029
|
|
|
$
|
687
|
|
|
$
|
442
|
|
Investing Activities
|
(1,149
|
)
|
|
(1,533
|
)
|
|
(658
|
)
|
|||
Financing Activities
|
55
|
|
|
233
|
|
|
888
|
|
|||
Increase (Decrease) in Cash and Cash Equivalents
|
$
|
(65
|
)
|
|
$
|
(613
|
)
|
|
$
|
672
|
|
(a)
|
Includes the historical results related to the Partnership and Predecessors.
|
|
|
December 31, 2018
|
55
|
Management’s Discussion and Analysis
|
56
|
|
|
|
Management’s Discussion and Analysis
|
Major Projects
|
Total Project Expected Capital Expenditures
|
|
Actual 2018 Capital Expenditures (a)
|
||||
Conan Crude Gathering System (b)
|
$
|
270
|
|
|
$
|
188
|
|
Carson Crude Terminal Expansion Project (c)
|
|
165
|
|
|
6
|
|
|
North Dakota NGL Logistics Hub (d)
|
|
160
|
|
|
137
|
|
|
Los Angeles Refinery Interconnect Pipeline System (e)
|
|
150
|
|
|
86
|
|
(a)
|
Includes the historical results related to the Partnership and Predecessors.
|
(b)
|
The construction of the Conan crude gathering system provides connectivity to multiple long-haul pipelines. The initial capacity is planned to be approximately 250 Mbpd, which is expandable to 500 Mbpd. The initial storage capacity is estimated to be 720,000 barrels. The project was transferred from our Sponsor to us in 2018 at cost plus capitalized interest.
|
(c)
|
We intend to construct and operate two to three million barrels of additional crude oil storage capacity to better accommodate the unloading of marine vessels at our nearby marine terminal, which is expected to reduce transportation costs for Marathon, such as port fees and demurrage.
|
(d)
|
We intend to transport mixed NGLs from a third party processing plant in McKenzie County, North Dakota to our Belfield gas processing plant for fractionation and then ship purity NGL products on manifest and unit trains from the Fryburg rail terminal.
|
(e)
|
The pipeline interconnect project at Marathon’s Los Angeles refinery is designed to provide direct connectivity between Marathon’s refining sites. The project was transferred from our Sponsor to us in 2018 at cost plus capitalized interest.
|
Contractual Obligation
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term debt obligations (a)
|
$
|
737
|
|
|
$
|
216
|
|
|
$
|
1,412
|
|
|
$
|
957
|
|
|
$
|
126
|
|
|
$
|
3,273
|
|
|
$
|
6,721
|
|
Capital lease obligations (b)
|
4
|
|
|
3
|
|
|
3
|
|
|
2
|
|
|
2
|
|
|
4
|
|
|
18
|
|
|||||||
Operating lease obligations (c)
|
17
|
|
|
17
|
|
|
15
|
|
|
13
|
|
|
13
|
|
|
105
|
|
|
180
|
|
|||||||
Purchase obligations (d)
|
2,078
|
|
|
2,084
|
|
|
2,054
|
|
|
2,013
|
|
|
2,013
|
|
|
1,673
|
|
|
11,915
|
|
|||||||
Capital expenditure obligations (e)
|
297
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
297
|
|
|||||||
Total Contractual Obligations
|
$
|
3,133
|
|
|
$
|
2,320
|
|
|
$
|
3,484
|
|
|
$
|
2,985
|
|
|
$
|
2,154
|
|
|
$
|
5,055
|
|
|
$
|
19,131
|
|
(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 our fuel costs associated with our wholesale product supply agreement, NGLs transportation costs, fractionation fees, and fixed charges under the Amended Omnibus Agreement and the 2019 Secondment Agreements. As we are unable to estimate the termination of the Amended Omnibus Agreement, we have included the fees for each of the five years following
December 31, 2018
for disclosure purposes in the table above.
|
(e)
|
Minimum contractual spending requirements for certain capital projects.
|
|
|
December 31, 2018
|
57
|
Management’s Discussion and Analysis
|
58
|
|
|
|
Management’s Discussion and Analysis
|
|
|
December 31, 2018
|
59
|
Quantitative and Qualitative Disclosure
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
60
|
|
|
|
Financial Statements
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
|
December 31, 2018
|
61
|
Financial Statements
|
|
|
Year Ended December 31,
|
||||||||||
|
Note
|
2018 (a)
|
|
2017 (a)
|
|
2016 (a)
|
||||||
|
|
(In millions, except per unit amounts)
|
||||||||||
Revenues:
|
|
|
|
|
|
|
||||||
Fee-based:
|
|
|
|
|
|
|
||||||
Affiliate
|
3
|
$
|
1,309
|
|
|
$
|
942
|
|
|
$
|
747
|
|
Third-party
|
|
591
|
|
|
656
|
|
|
819
|
|
|||
Product-based: (b)
|
|
|
|
|
|
|
||||||
Affiliate
|
3
|
280
|
|
|
489
|
|
|
100
|
|
|||
Third-party
|
|
200
|
|
|
1,162
|
|
|
3
|
|
|||
Total Revenues
|
13
|
2,380
|
|
|
3,249
|
|
|
1,669
|
|
|||
Costs and Expenses:
|
|
|
|
|
|
|
||||||
Cost of fuel and other (excluding items shown separately below) (b)
|
|
—
|
|
|
1,244
|
|
|
316
|
|
|||
NGL expense (excluding items shown separately below)
|
|
206
|
|
|
265
|
|
|
2
|
|
|||
Operating expenses (excluding depreciation and amortization)
|
|
885
|
|
|
691
|
|
|
560
|
|
|||
General and administrative expenses
|
|
121
|
|
|
158
|
|
|
106
|
|
|||
Depreciation and amortization expenses
|
|
368
|
|
|
313
|
|
|
233
|
|
|||
(Gain) loss on asset disposals and impairments
|
2
|
4
|
|
|
(25
|
)
|
|
4
|
|
|||
Operating Income
|
|
796
|
|
|
603
|
|
|
448
|
|
|||
Interest and financing costs, net
|
|
(233
|
)
|
|
(330
|
)
|
|
(195
|
)
|
|||
Equity in earnings of equity method investments
|
6
|
31
|
|
|
22
|
|
|
13
|
|
|||
Other income, net
|
|
6
|
|
|
11
|
|
|
11
|
|
|||
Net Earnings
|
|
$
|
600
|
|
|
$
|
306
|
|
|
$
|
277
|
|
|
|
|
|
|
|
|
||||||
Loss attributable to Predecessors
|
2
|
$
|
28
|
|
|
$
|
43
|
|
|
$
|
62
|
|
Net Earnings Attributable to Partners
|
|
628
|
|
|
349
|
|
|
339
|
|
|||
Preferred unitholders’ interest in net earnings
|
|
(44
|
)
|
|
(3
|
)
|
|
—
|
|
|||
General partner’s interest in net earnings, including IDRs
|
|
—
|
|
|
(79
|
)
|
|
(152
|
)
|
|||
Limited Partners’ Interest in Net Earnings
|
|
$
|
584
|
|
|
$
|
267
|
|
|
$
|
187
|
|
|
|
|
|
|
|
|
||||||
Net earnings per limited partner unit:
|
|
|
|
|
|
|
||||||
Common - basic
|
|
$
|
2.57
|
|
|
$
|
2.11
|
|
|
$
|
1.87
|
|
Common - diluted
|
|
$
|
2.57
|
|
|
$
|
2.11
|
|
|
$
|
1.87
|
|
|
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
|
||||||
Common units - basic
|
|
228.7
|
|
|
126.0
|
|
|
98.2
|
|
|||
Common units - diluted
|
|
228.9
|
|
|
126.1
|
|
|
98.2
|
|
|||
|
|
|
|
|
|
|
||||||
Cash distributions paid per unit
|
|
$
|
4.0750
|
|
|
$
|
3.8062
|
|
|
$
|
3.3070
|
|
(a)
|
All periods include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
(b)
|
Due to the adoption of ASC 606 effective January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements for year ended December 31, 2018 were netted. See Note 1 for further discussion.
|
62
|
|
|
|
Financial Statements
|
|
|
December 31,
|
||||||
|
Note
|
2018
|
|
2017 (a)
|
||||
|
|
(In millions, except unit amounts)
|
||||||
Assets
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
10
|
|
|
$
|
75
|
|
Receivables, net of allowance for doubtful accounts
|
|
|
|
|
||||
Trade and other
|
|
195
|
|
|
219
|
|
||
Affiliate
|
|
279
|
|
|
264
|
|
||
Prepayments and other current assets
|
7
|
79
|
|
|
27
|
|
||
Total Current Assets
|
|
563
|
|
|
585
|
|
||
Property, Plant and Equipment, Net
|
4
|
6,845
|
|
|
6,249
|
|
||
Acquired Intangibles, Net
|
5
|
1,104
|
|
|
1,154
|
|
||
Goodwill
|
5
|
1,051
|
|
|
956
|
|
||
Equity Method Investments
|
6
|
602
|
|
|
440
|
|
||
Other Noncurrent Assets, Net
|
|
130
|
|
|
121
|
|
||
Total Assets
|
|
$
|
10,295
|
|
|
$
|
9,505
|
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
||||
Accounts payable
|
|
|
|
|
||||
Trade and other
|
|
$
|
214
|
|
|
$
|
186
|
|
Affiliate
|
|
252
|
|
|
207
|
|
||
Accrued interest and financing costs
|
|
41
|
|
|
40
|
|
||
Current maturities of debt
|
8
|
504
|
|
|
1
|
|
||
Other current liabilities
|
7
|
81
|
|
|
84
|
|
||
Total Current Liabilities
|
|
1,092
|
|
|
518
|
|
||
Debt, Net of Unamortized Issuance Costs
|
8
|
4,460
|
|
|
4,127
|
|
||
Other Noncurrent Liabilities
|
|
69
|
|
|
54
|
|
||
Total Liabilities
|
|
5,621
|
|
|
4,699
|
|
||
Commitments and Contingencies
|
10
|
|
|
|
|
|
||
Equity
|
|
|
|
|
||||
Equity of Predecessors
|
|
—
|
|
|
1,292
|
|
||
Preferred unitholders:
600,000
units issued and outstanding in 2018 and 2017
|
|
604
|
|
|
589
|
|
||
Common unitholders:
245,493,184
units issued and outstanding (217,097,057 in 2017)
|
|
4,070
|
|
|
2,925
|
|
||
Total Equity
|
11
|
4,674
|
|
|
4,806
|
|
||
Total Liabilities and Equity
|
|
$
|
10,295
|
|
|
$
|
9,505
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
|
|
December 31, 2018
|
63
|
Financial Statements
|
|
Equity of Predecessors (a)
|
|
Partnership
|
|
Non-controlling Interest
|
|
Total
|
||||||||||||||||
|
|
Common
|
|
Preferred
|
|
General Partner
|
|
|
|||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Balance at December 31, 2015
|
$
|
464
|
|
|
$
|
1,707
|
|
|
$
|
—
|
|
|
$
|
(13
|
)
|
|
$
|
84
|
|
|
$
|
2,242
|
|
Sponsor contributions of equity to the Predecessors
|
515
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
515
|
|
||||||
Loss attributable to Predecessors
|
(62
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(62
|
)
|
||||||
Net liabilities not assumed by Andeavor 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
|
)
|
||||||
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
|
$
|
617
|
|
|
$
|
1,608
|
|
|
$
|
—
|
|
|
$
|
(66
|
)
|
|
$
|
—
|
|
|
$
|
2,159
|
|
Sponsor contributions of equity to the Predecessors
|
2,464
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,464
|
|
||||||
Loss attributable to the Predecessors
|
(43
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
||||||
Allocation of net assets acquired by the unitholders
|
(1,713
|
)
|
|
1,713
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Proceeds from issuance of units, net of issuance costs
|
—
|
|
|
284
|
|
|
589
|
|
|
6
|
|
|
—
|
|
|
879
|
|
||||||
Unit-based compensation
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||||
Distributions to unitholders and general partner
|
(33
|
)
|
|
(501
|
)
|
|
—
|
|
|
(127
|
)
|
|
—
|
|
|
(661
|
)
|
||||||
Distributions to unitholders and general partner related to acquisitions
|
—
|
|
|
(401
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(401
|
)
|
||||||
Contributions
|
—
|
|
|
50
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
53
|
|
||||||
Net earnings excluding loss attributable to Predecessors
|
—
|
|
|
229
|
|
|
—
|
|
|
120
|
|
|
—
|
|
|
349
|
|
||||||
General partner restructuring
|
—
|
|
|
(60
|
)
|
|
—
|
|
|
60
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
4
|
|
|
—
|
|
|
2
|
|
||||||
Balance at December 31, 2017
|
$
|
1,292
|
|
|
$
|
2,925
|
|
|
$
|
589
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,806
|
|
Sponsor contributions of equity to the Predecessors
|
374
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
374
|
|
||||||
Loss attributable to the Predecessors
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
||||||
Net liabilities not assumed by Andeavor Logistics LP
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||||
Allocation of net assets acquired by the unitholders
|
(1,651
|
)
|
|
1,651
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Unit-based compensation
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||
Distributions to common and preferred unitholders
|
—
|
|
|
(859
|
)
|
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
(888
|
)
|
||||||
Distributions to unitholders related to acquisitions
|
—
|
|
|
(300
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(300
|
)
|
||||||
Contributions
|
—
|
|
|
81
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81
|
|
||||||
Net earnings excluding loss attributable to Predecessors
|
—
|
|
|
584
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
628
|
|
||||||
Cumulative effect of accounting standard adoption
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
||||||
Other
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||
Balance at December 31, 2018
|
$
|
—
|
|
|
$
|
4,070
|
|
|
$
|
604
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,674
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
64
|
|
|
|
Financial Statements
|
|
Year Ended December 31,
|
||||||||||
|
2018 (a)
|
|
2017 (a)
|
|
2016 (a)
|
||||||
|
(In millions)
|
||||||||||
Cash Flows From (Used In) Operating Activities:
|
|
|
|
|
|
||||||
Net earnings
|
$
|
600
|
|
|
$
|
306
|
|
|
$
|
277
|
|
Adjustments to reconcile net earnings to net cash from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expenses
|
368
|
|
|
313
|
|
|
233
|
|
|||
Amortization of debt issuance costs
|
10
|
|
|
10
|
|
|
9
|
|
|||
Debt redemption charges
|
—
|
|
|
77
|
|
|
—
|
|
|||
(Gain) loss on asset disposals and impairments
|
4
|
|
|
(25
|
)
|
|
4
|
|
|||
Unit-based compensation expense
|
9
|
|
|
9
|
|
|
6
|
|
|||
Distributions received in excess of equity in earnings of equity method investments
|
21
|
|
|
17
|
|
|
16
|
|
|||
Other non-cash operating activities
|
—
|
|
|
(6
|
)
|
|
1
|
|
|||
Changes in receivables
|
(17
|
)
|
|
24
|
|
|
(172
|
)
|
|||
Changes in other current assets
|
(39
|
)
|
|
1
|
|
|
(6
|
)
|
|||
Changes in current liabilities
|
104
|
|
|
3
|
|
|
81
|
|
|||
Changes in other noncurrent assets and liabilities
|
(31
|
)
|
|
(42
|
)
|
|
(7
|
)
|
|||
Net cash from operating activities
|
1,029
|
|
|
687
|
|
|
442
|
|
|||
Cash Flows From (Used In) Investing Activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(770
|
)
|
|
(349
|
)
|
|
(298
|
)
|
|||
Acquisitions, net of cash acquired
|
(379
|
)
|
|
(1,231
|
)
|
|
(332
|
)
|
|||
Proceeds from sale of assets
|
—
|
|
|
47
|
|
|
—
|
|
|||
Deposits for acquisitions
|
—
|
|
|
—
|
|
|
(33
|
)
|
|||
Other investing activities
|
—
|
|
|
—
|
|
|
5
|
|
|||
Net cash used in investing activities
|
(1,149
|
)
|
|
(1,533
|
)
|
|
(658
|
)
|
|||
Cash Flows From (Used In) Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from debt offering
|
—
|
|
|
1,750
|
|
|
1,451
|
|
|||
Proceeds from issuance of common units, net of issuance costs
|
—
|
|
|
284
|
|
|
364
|
|
|||
Proceeds from issuance of preferred units, net of issuance costs
|
—
|
|
|
589
|
|
|
—
|
|
|||
Proceeds from issuance of general partner units, net of issuance costs
|
—
|
|
|
6
|
|
|
—
|
|
|||
Quarterly distributions to common unitholders
|
(859
|
)
|
|
(530
|
)
|
|
(324
|
)
|
|||
Distributions to preferred unitholders
|
(29
|
)
|
|
—
|
|
|
—
|
|
|||
Quarterly distributions to general partner
|
—
|
|
|
(131
|
)
|
|
(137
|
)
|
|||
Distributions in connection with acquisitions from our Sponsor
|
(300
|
)
|
|
(406
|
)
|
|
(760
|
)
|
|||
Borrowings under revolving credit agreements
|
1,320
|
|
|
1,225
|
|
|
1,451
|
|
|||
Repayments under revolving credit agreements
|
(498
|
)
|
|
(1,152
|
)
|
|
(1,426
|
)
|
|||
Repayments of long-term debt including capital leases
|
(1
|
)
|
|
(2,070
|
)
|
|
(251
|
)
|
|||
Premiums paid on debt redemption
|
—
|
|
|
(85
|
)
|
|
—
|
|
|||
Sponsor contributions of equity to the Predecessors
|
374
|
|
|
742
|
|
|
515
|
|
|||
Financing costs
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||
Payments of debt issuance costs
|
—
|
|
|
(22
|
)
|
|
(21
|
)
|
|||
Contribution from general partner
|
—
|
|
|
—
|
|
|
4
|
|
|||
Capital contributions by affiliate
|
51
|
|
|
34
|
|
|
29
|
|
|||
Other financing activities
|
(3
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Net cash from financing activities
|
55
|
|
|
233
|
|
|
888
|
|
|||
Increase (Decrease) in Cash and Cash Equivalents
|
(65
|
)
|
|
(613
|
)
|
|
672
|
|
|||
Cash and Cash Equivalents, Beginning of Year
|
75
|
|
|
688
|
|
|
16
|
|
|||
Cash and Cash Equivalents, End of Year
|
$
|
10
|
|
|
$
|
75
|
|
|
$
|
688
|
|
(a)
|
All periods include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
|
|
December 31, 2018
|
65
|
Notes to Consolidated Financial Statements
|
66
|
|
|
|
Notes to Consolidated Financial Statements
|
|
•
|
gathering, storage and transportation assets in the Permian Basin; legacy Western Refining assets and associated crude terminals; the majority of our Sponsor’s remaining refining terminalling, transportation and storage assets; and equity method investments in ALRP, MPL and PNAC on August 6, 2018. In addition, the Conan Crude Oil Gathering System and LARIP were transferred at cost plus incurred interest;
|
•
|
crude oil, feedstock and refined products storage, the Anacortes marine terminal, a manifest rail facility and crude oil and refined products pipelines located in Anacortes, Washington on November 8, 2017;
|
•
|
logistic assets owned by WNRL, which consisted of pipelines, gathering, terminalling, storage, transportation and wholesale fuel distribution assets effective October 30, 2017;
|
•
|
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
; and
|
•
|
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.
|
|
|
December 31, 2018
|
67
|
Notes to Consolidated Financial Statements
|
68
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
December 31, 2018
|
69
|
Notes to Consolidated Financial Statements
|
70
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
December 31, 2018
|
71
|
Notes to Consolidated Financial Statements
|
72
|
|
|
|
Notes to Consolidated Financial Statements
|
|
•
|
Crude oil and other feedstock storage tankage and refined product storage tankage at Marathon’s Mandan, Salt Lake City and Los Angeles refineries;
|
•
|
Rail terminals and truck racks at Marathon’s Mandan, Salt Lake City and Los Angeles refineries for the loading and unloading of various refined products from manifest and other railcars and trucks, respectively;
|
•
|
Interconnecting pipeline facilities in the Los Angeles area as well as other railroad tracks and adjoining lands;
|
•
|
Mesquite and Yucca truck unloading stations in New Mexico for the unloading of crude trucks and injection of crude into the TexNew Mex pipeline;
|
•
|
Mason East and Jackrabbit (“Wink”) truck unloading and injection stations in Texas that receive crude via the T-Station line and trucks for injection into the Kinder Morgan and Bobcat Pipeline;
|
•
|
The Jal storage, injection and rail unloading facility in New Mexico that stores and supplies natural gas liquids for use in Marathon’s El Paso refinery;
|
•
|
Natural gas liquid storage tankage, a rail and truck terminal for the loading and unloading of natural gas liquids from railcars and trucks as well as from the waterline at the Wingate facility in New Mexico;
|
•
|
Crude oil and other feedstock storage tankage at the Clearbrook terminal in Minnesota;
|
•
|
Bobcat Pipeline that transports crude oil between the Mason East Station and the Wink Station;
|
•
|
Benny Pipeline that delivers crude oil from the Conan terminal in Texas to a connection with gathering lines in New Mexico;
|
•
|
All of the issued and outstanding limited liability company interests in: (i) Tesoro Great Plains Midstream LLC, which owns BakkenLink Pipeline LLC, (ii) Andeavor MPL Holdings LLC, which holds the investment in MPL, (iii) Andeavor Logistics CD LLC, (iv) Western Refining Conan Gathering, LLC, which owns the Conan Crude Oil Gathering System, (v) Western Refining Delaware Basin Storage, LLC, (vi) Asphalt Terminals LLC, which holds the investment in PNAC, and (vii)
67%
of all of the issued and outstanding limited liability company interests in ALRP; and
|
•
|
Certain related real property interests.
|
|
|
December 31, 2018
|
73
|
Notes to Consolidated Financial Statements
|
Cash
|
$
|
22
|
|
Receivables
|
112
|
|
|
Inventories
|
11
|
|
|
Prepayments and Other Current Assets
|
25
|
|
|
Property, Plant and Equipment (a)
|
1,295
|
|
|
Goodwill
|
620
|
|
|
Acquired Intangibles
|
130
|
|
|
Other Noncurrent Assets
|
2
|
|
|
Accounts Payable
|
(167
|
)
|
|
Accrued Liabilities
|
(41
|
)
|
|
Debt
|
(347
|
)
|
|
Total purchase price
|
$
|
1,662
|
|
(a)
|
Estimated useful lives ranging from
3
to
22
years have been assumed based on the valuation.
|
74
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
December 31, 2018
|
75
|
Notes to Consolidated Financial Statements
|
|
Year Ended December 31, 2018
|
||||||||||
|
Combined
|
|
Andeavor Logistics LP
|
|
Predecessors
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Fee-based:
|
|
|
|
|
|
||||||
Affiliate
|
$
|
1,309
|
|
|
$
|
1,288
|
|
|
$
|
21
|
|
Third-party
|
591
|
|
|
582
|
|
|
9
|
|
|||
Product-based:
|
|
|
|
|
|
||||||
Affiliate
|
280
|
|
|
280
|
|
|
—
|
|
|||
Third-party
|
200
|
|
|
200
|
|
|
—
|
|
|||
Total Revenues
|
2,380
|
|
|
2,350
|
|
|
30
|
|
|||
Costs and Expenses
|
|
|
|
|
|
||||||
NGL expense (exclusive of items shown separately below)
|
206
|
|
|
206
|
|
|
—
|
|
|||
Operating expenses (exclusive of depreciation and amortization)
|
885
|
|
|
845
|
|
|
40
|
|
|||
General and administrative expenses
|
121
|
|
|
112
|
|
|
9
|
|
|||
Depreciation and amortization expenses
|
368
|
|
|
346
|
|
|
22
|
|
|||
Loss on asset disposals and impairments
|
4
|
|
|
4
|
|
|
—
|
|
|||
Operating Income (Loss)
|
796
|
|
|
837
|
|
|
(41
|
)
|
|||
Interest and financing costs, net
|
(233
|
)
|
|
(229
|
)
|
|
(4
|
)
|
|||
Equity in earnings of equity method investments
|
31
|
|
|
15
|
|
|
16
|
|
|||
Other income, net
|
6
|
|
|
5
|
|
|
1
|
|
|||
Net Earnings (Loss)
|
$
|
600
|
|
|
$
|
628
|
|
|
$
|
(28
|
)
|
Loss attributable to Predecessors
|
28
|
|
|
—
|
|
|
28
|
|
|||
Net Earnings Attributable to Partners
|
628
|
|
|
628
|
|
|
—
|
|
|||
Preferred unitholders’ interest in net earnings
|
(44
|
)
|
|
(44
|
)
|
|
—
|
|
|||
Limited Partners’ Interest in Net Earnings
|
$
|
584
|
|
|
$
|
584
|
|
|
$
|
—
|
|
76
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
Year Ended December 31, 2017
|
||||||||||
|
Combined
|
|
Andeavor Logistics LP
|
|
Predecessors
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Fee-based:
|
|
|
|
|
|
||||||
Affiliate
|
$
|
942
|
|
|
$
|
796
|
|
|
$
|
146
|
|
Third-party
|
656
|
|
|
647
|
|
|
9
|
|
|||
Product-based:
|
|
|
|
|
|
||||||
Affiliate
|
489
|
|
|
213
|
|
|
276
|
|
|||
Third-party
|
1,162
|
|
|
495
|
|
|
667
|
|
|||
Total Revenues
|
3,249
|
|
|
2,151
|
|
|
1,098
|
|
|||
Costs and Expenses
|
|
|
|
|
|
||||||
Cost of fuel and other (excluding items shown separately below)
|
1,244
|
|
|
330
|
|
|
914
|
|
|||
NGL expense (exclusive of items shown separately below)
|
265
|
|
|
265
|
|
|
—
|
|
|||
Operating expenses (exclusive of depreciation and amortization)
|
691
|
|
|
554
|
|
|
137
|
|
|||
General and administrative expenses
|
158
|
|
|
121
|
|
|
37
|
|
|||
Depreciation and amortization expenses
|
313
|
|
|
255
|
|
|
58
|
|
|||
Gain on asset disposals and impairments
|
(25
|
)
|
|
(24
|
)
|
|
(1
|
)
|
|||
Operating Income (Loss)
|
603
|
|
|
650
|
|
|
(47
|
)
|
|||
Interest and financing costs, net
|
(330
|
)
|
|
(321
|
)
|
|
(9
|
)
|
|||
Equity in earnings of equity method investments
|
22
|
|
|
10
|
|
|
12
|
|
|||
Other income, net
|
11
|
|
|
10
|
|
|
1
|
|
|||
Net Earnings (Loss)
|
$
|
306
|
|
|
$
|
349
|
|
|
$
|
(43
|
)
|
Loss attributable to Predecessors
|
43
|
|
|
—
|
|
|
43
|
|
|||
Net Earnings Attributable to Partners
|
349
|
|
|
349
|
|
|
—
|
|
|||
Preferred unitholders’ interest in net earnings
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|||
General partner’s interest in net earnings, including IDRs
|
(79
|
)
|
|
(79
|
)
|
|
—
|
|
|||
Limited Partners’ Interest in Net Earnings
|
$
|
267
|
|
|
$
|
267
|
|
|
$
|
—
|
|
|
|
December 31, 2018
|
77
|
Notes to Consolidated Financial Statements
|
|
Year Ended December 31, 2016
|
||||||||||
|
Combined
|
|
Andeavor Logistics LP
|
|
Predecessors
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Fee-based:
|
|
|
|
|
|
||||||
Affiliate
|
$
|
747
|
|
|
$
|
615
|
|
|
$
|
132
|
|
Third-party
|
819
|
|
|
502
|
|
|
317
|
|
|||
Product-based:
|
|
|
|
|
|
||||||
Affiliate
|
100
|
|
|
100
|
|
|
—
|
|
|||
Third-party
|
3
|
|
|
3
|
|
|
—
|
|
|||
Total Revenues
|
1,669
|
|
|
1,220
|
|
|
449
|
|
|||
Costs and Expenses
|
|
|
|
|
|
||||||
Cost of fuel and other (excluding items shown separately below)
|
316
|
|
|
—
|
|
|
316
|
|
|||
NGL expense (exclusive of items shown separately below)
|
2
|
|
|
2
|
|
|
—
|
|
|||
Operating expenses (exclusive of depreciation and amortization)
|
560
|
|
|
426
|
|
|
134
|
|
|||
General and administrative expenses
|
106
|
|
|
94
|
|
|
12
|
|
|||
Depreciation and amortization expenses
|
233
|
|
|
183
|
|
|
50
|
|
|||
Loss on asset disposals and impairments
|
4
|
|
|
4
|
|
|
—
|
|
|||
Operating Income (Loss)
|
448
|
|
|
511
|
|
|
(63
|
)
|
|||
Interest and financing costs, net
|
(195
|
)
|
|
(196
|
)
|
|
1
|
|
|||
Equity in earnings of equity method investments
|
13
|
|
|
13
|
|
|
—
|
|
|||
Other income, net
|
11
|
|
|
11
|
|
|
—
|
|
|||
Net Earnings (Loss)
|
$
|
277
|
|
|
$
|
339
|
|
|
$
|
(62
|
)
|
Loss attributable to Predecessors
|
62
|
|
|
—
|
|
|
62
|
|
|||
Net Earnings Attributable to Partners
|
339
|
|
|
339
|
|
|
—
|
|
|||
General partner’s interest in net earnings, including IDRs
|
(152
|
)
|
|
(152
|
)
|
|
—
|
|
|||
Limited Partners’ Interest in Net Earnings
|
$
|
187
|
|
|
$
|
187
|
|
|
$
|
—
|
|
78
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
|
Termination Provisions
|
|
Commercial Agreement
|
Initiation Date
|
Term Years
|
Renewals
|
Refinery Shutdown Notice Period (a)
|
Force Majeure
|
Amended Transportation Services Agreement (High Plains System)
|
Apr-11
|
10
|
2 x 5 years
|
12 months
|
Unilateral
|
Second Amended and Restated Master Terminalling Agreement
|
Apr-11
|
10
|
2 x 5 years
|
12 months
|
Unilateral
|
Salt Lake City Storage Agreement
|
Apr-11
|
10
|
2 x 5 years
|
12 months
|
Unilateral
|
Amended and Restated Transportation Services Agreement (Salt Lake City Short Haul Pipeline)
|
Apr-11
|
10
|
2 x 5 years
|
12 months
|
Unilateral
|
Amorco Terminal Use and Throughput Agreement (Martinez Marine)
|
Apr-12
|
10
|
2 x 5 years
|
12 months
|
Unilateral
|
Transportation Services Agreement (LAR Short Haul Pipelines)
|
Sep-12
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Amended Anacortes Track Use and Throughput Agreement
|
Nov-12
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Long Beach Storage Services Agreement
|
Dec-12
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Terminalling Services Agreement for Northwest Pipeline System
|
Jun-13
|
1
|
Year to year
|
N/A
|
Unilateral
|
Southern California Terminalling & Dedicated Services Agreement
|
Jun-13
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Amended Carson Storage Services Agreement
|
Jun-13
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Carson Tank Farm Storage Agreement
|
Jun-13
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Amended Terminalling, Transportation and Storage Services Agreement (WNRL)
|
Oct-13
|
10
|
2 x 5 years
|
12 months
|
Unilateral
|
Amended Pipeline and Gathering Services Agreement (WNRL)
|
Oct-13
|
10
|
2 x 5 years
|
12 months
|
Unilateral
|
Carson Coke Handling Service Agreement
|
Dec-13
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Amended and Restated Long Beach Berth Access Use and Throughput Agreement
|
Dec-13
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Long Beach Pipeline Throughput Agreement (b)
|
Dec-13
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Amended Transportation Services Agreement (SoCal Pipelines)
|
Dec-13
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Bakken Area Storage Hub Storage - TRMC Tanks
|
Apr-14
|
5
|
2 x 5 years
|
N/A
|
Unilateral
|
Terminalling & Dedicated Storage Services Agreement - Martinez
|
Jul-14
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Terminalling & Dedicated Storage Services Agreement - Anacortes
|
Jul-14
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
THPP Reversal Open Season Northbound Commitment
|
Sep-14
|
7
|
None
|
N/A
|
Unilateral
|
Tesoro Alaska Pipeline Throughput Agreement
|
Sep-14
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Amended Crude Oil Trucking Transportation Services Agreement (WNRL)
|
Oct-14
|
10
|
None
|
N/A
|
Unilateral
|
Fuel Distribution and Supply Agreement (WNRL)
|
Oct-14
|
10
|
None
|
N/A
|
Unilateral
|
Amended Product Supply Agreement (WNRL)
|
Oct-14
|
10
|
None
|
N/A
|
Unilateral
|
Keep-Whole Commodity Fee Agreement
|
Dec-14
|
5
|
1 year auto
|
90 days prior to expiration
|
Bilateral
|
Sale of Natural Gas
|
Oct-15
|
1 month
|
Evergreen
|
N/A
|
Bilateral
|
Amended Asphalt Trucking Services Agreement (WNRL)
|
Jan-16
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Green River Processing Crude Oil Sales Agreement
|
Feb-16
|
1
|
Evergreen
|
N/A
|
Bilateral
|
Tank #2030 Use, Storage and Throughput Agreement
|
Apr-16
|
6 months
|
6 months
|
N/A
|
Bilateral
|
Asphalt and Propane Rack Loading Services Agreement (Kenai)
|
May-16
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Kenai Storage Services Agreement
|
Jul-16
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
|
|
December 31, 2018
|
79
|
Notes to Consolidated Financial Statements
|
|
|
|
|
Termination Provisions
|
|
Commercial Agreement
|
Initiation Date
|
Term Years
|
Renewals
|
Refinery Shutdown Notice Period (a)
|
Force Majeure
|
Terminalling, Transportation and Storage Services Agreement (St. Paul Park)
|
Sep-16
|
10
|
2 x 5 years
|
12 months
|
Unilateral
|
Alaska Terminalling Services Agreement
|
Sep-16
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Martinez Storage Services Agreement
|
Nov-16
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Avon Marine Terminal Use and Throughput Agreement
|
Jan-17
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Belfield Crude & Oil Gathering
|
Jan-17
|
2
|
None
|
N/A
|
Unilateral
|
Amended Renewal Trucking Transportation Services Agreement
|
Apr-17
|
1
|
Evergreen
|
2 months prior to expiration
|
Unilateral
|
Transportation Services Agreement (Anacortes Short Haul Pipelines)
|
Nov-17
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Anacortes Manifest Rail Terminalling Services Agreement
|
Nov-17
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Anacortes Marine Terminal Operating Agreement
|
Nov-17
|
17
|
None
|
N/A
|
Unilateral
|
Storage Services Agreement - Anacortes II
|
Nov-17
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Product Transportation Agreement (TRMC, WRSW, WRCLP, SPPRC)
|
Jan-18
|
1
|
Evergreen
|
N/A
|
Unilateral
|
Plant Dedication Agreement (Robinson Lake and Belfield)
|
Apr-18
|
3
|
Month to month
|
N/A
|
Bilateral
|
Product Sales Agreement - Robinson Lake
|
Apr-18
|
3
|
N/A
|
N/A
|
Bilateral
|
Product Sales Agreement - Belfield
|
Apr-18
|
3
|
N/A
|
N/A
|
Bilateral
|
Product Sales Agreement Y-Grade - Robinson Lake
|
May-18
|
1 month
|
Month to month
|
N/A
|
Bilateral
|
SLC Core Crude Throughput
|
May-18
|
0.2
|
Evergreen
|
N/A
|
Unilateral
|
Truck Loading (H2S) Little Knife
|
Jun-18
|
6
|
None
|
N/A
|
Unilateral
|
Truck Unloading Facility Throughput Agreement (Stanley LACT)
|
Jun-18
|
3
|
None
|
N/A
|
Unilateral
|
Transportation Services Agreement (LAR Interconnecting Pipelines)
|
Aug-18
|
10
|
2 x 5 years
|
12 months
|
Unilateral
|
Amended Master Terminalling Services Agreement - Clearbrook, Fryburg, Jal, LAR, Mandan, Wingate
|
Aug-18
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Master Unloading and Storage Agreement (WNRL)
|
Aug-18
|
10
|
2 x 5 years
|
N/A
|
Unilateral
|
Amended Asphalt Terminalling, Transportation and Storage Services Agreement
|
Aug-18
|
10
|
2 x 5 years
|
30 days
|
Unilateral
|
Fryburg Terminal Services Agreement
|
Aug-18
|
2.6
|
1 month
|
N/A
|
Unilateral
|
Transloading Services Agreement - Salt Lake City Spur
|
Oct-18
|
3
|
None
|
N/A
|
Unilateral
|
Natural Gas Liquids Marketing Agreement
|
Oct-18
|
3
|
3 year extension with 60 days notice by AFS
|
N/A
|
Bilateral
|
(a)
|
Fixed minimum volumes remain in effect during routine turnarounds.
|
(b)
|
Agreement gives Marathon the option to renew for two five-year terms, or Marathon may modify the term of the agreements to a twenty-year term by providing notice in accordance with each agreement.
|
80
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
December 31, 2018
|
81
|
Notes to Consolidated Financial Statements
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues
|
$
|
1,589
|
|
|
$
|
1,431
|
|
|
$
|
847
|
|
Operating expenses (exclusive of depreciation and amortization) (a)
|
272
|
|
|
251
|
|
|
308
|
|
|||
General and administrative expenses
|
98
|
|
|
101
|
|
|
80
|
|
(a)
|
Includes net imbalance settlement gains of
$12 million
and
$7 million
in the years ended
December 31, 2017
and
2016
, respectively. Due to the adoption of ASC 606 effective January 1, 2018, imbalance settlement gains of
$16 million
in the year ended
December 31, 2018
were included in revenues. 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
$15 million
,
$16 million
and
$17 million
in the years ended
December 31, 2018
,
2017
and
2016
, respectively.
|
82
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
Estimated Depreciable Lives (Years) (a)
|
|
December 31,
|
||||||
|
|
2018
|
|
2017 (b)
|
|||||
Terminals and tankage
|
3 - 40
|
|
$
|
3,749
|
|
|
$
|
3,557
|
|
Pipelines
|
5 - 30
|
|
3,411
|
|
|
2,825
|
|
||
Land and leasehold improvements
|
3 - 29
|
|
297
|
|
|
282
|
|
||
Buildings and improvements
|
3 - 28
|
|
87
|
|
|
91
|
|
||
Other
|
1 - 28
|
|
82
|
|
|
142
|
|
||
Construction in progress
|
—
|
|
519
|
|
|
346
|
|
||
Property, Plant and Equipment, at Cost (c)
|
|
|
8,145
|
|
|
7,243
|
|
||
Accumulated depreciation (c)
|
|
|
(1,300
|
)
|
|
(994
|
)
|
||
Property, Plant and Equipment, Net
|
|
|
$
|
6,845
|
|
|
$
|
6,249
|
|
(a)
|
The above excludes assets not being depreciated.
|
(b)
|
Property, plant and equipment transferred to the Partnership in the 2018 Drop Down was recorded at historical costs. The Partnership recorded property, plant and equipment of
$948 million
and accumulated depreciation of
$112 million
as of December 31, 2017 in connection with the 2018 Drop Down.
|
(c)
|
Assets owned by us for which we are the lessor under operating leases were
$691 million
and
$643 million
before accumulated depreciation of
$224 million
and
$195 million
as of
December 31, 2018
and
2017
, respectively.
|
|
December 31,
|
||||||
|
2018
|
|
2017 (a)
|
||||
Terminalling and Transportation (b) (c)
|
$
|
284
|
|
|
$
|
260
|
|
Gathering and Processing (b) (c)
|
718
|
|
|
607
|
|
||
Wholesale (b)
|
49
|
|
|
89
|
|
||
Goodwill
|
$
|
1,051
|
|
|
$
|
956
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Note 1 for further discussion.
|
(b)
|
In connection with the finalization of the purchase price allocation associated with the WNRL Merger during 2018, we reallocated goodwill amongst the segments.
|
(c)
|
Goodwill transferred to the Partnership in the 2018 Drop Down was recorded at historical cost. We recorded goodwill of
$39 million
and
$225 million
in our Terminalling and Transportation and Gathering and Processing segments, respectively, as of December 31, 2017 as a result of the 2018 Drop Down.
|
|
|
December 31, 2018
|
83
|
Notes to Consolidated Financial Statements
|
•
|
ALRP -
We own a
67%
interest in ALRP, a recently constructed crude oil pipeline located in the Delaware and Midland basins in west Texas.
|
•
|
MPL
-
We own a
17%
interest in MPL, which owns and operates a crude oil pipeline in Minnesota.
|
•
|
PNAC -
We own a
50%
interest in PNAC, which owns and operates an asphalt terminal in Nevada.
|
•
|
RGS -
We own 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.
|
•
|
TRG -
We own a
50%
interest in TRG located in the southeastern Uinta Basin, which transports natural gas gathered by UBFS and other third-party volumes to gas processing facilities.
|
•
|
UBFS -
We own a
38%
interest in UBFS, which owns and operates the natural gas gathering infrastructure located in the southeastern Uinta Basin.
|
|
ALRP (a)
|
|
MPL
(a)
|
|
PNAC (a)
|
|
RGS
|
|
TRG
|
|
UBFS
|
|
Total
|
||||||||||||||
Balance at December 31, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
281
|
|
|
$
|
40
|
|
|
$
|
16
|
|
|
$
|
337
|
|
Acquired interests
|
—
|
|
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|||||||
Equity in earnings
|
—
|
|
|
12
|
|
|
—
|
|
|
6
|
|
|
2
|
|
|
2
|
|
|
22
|
|
|||||||
Distributions received
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(19
|
)
|
|
(5
|
)
|
|
(3
|
)
|
|
(39
|
)
|
|||||||
Balance at December 31, 2017 (b)
|
—
|
|
|
120
|
|
|
—
|
|
|
268
|
|
|
37
|
|
|
15
|
|
|
440
|
|
|||||||
Acquired interests
|
159
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
186
|
|
|||||||
Equity in earnings (loss)
|
6
|
|
|
17
|
|
|
(1
|
)
|
|
5
|
|
|
3
|
|
|
1
|
|
|
31
|
|
|||||||
Cumulative effect of accounting standard adoption
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||||
Distributions received
|
(5
|
)
|
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
|
(5
|
)
|
|
(2
|
)
|
|
(52
|
)
|
|||||||
Balance at December 31, 2018 (b)
|
$
|
160
|
|
|
$
|
117
|
|
|
$
|
26
|
|
|
$
|
253
|
|
|
$
|
32
|
|
|
$
|
14
|
|
|
$
|
602
|
|
(a)
|
These equity method investments were included in the 2018 Drop Down. Amounts were adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
(b)
|
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. The carrying amount of our investments in these equity method investments exceeded the underlying equity in net assets as shown below.
|
(c)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
84
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
December 31,
|
||||||
|
2018
|
|
2017 (a)
|
||||
Deferred charges
|
$
|
45
|
|
|
$
|
—
|
|
Inventories
|
22
|
|
|
12
|
|
||
Prepayments
|
12
|
|
|
15
|
|
||
Total Other Current Assets
|
$
|
79
|
|
|
$
|
27
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
|
December 31,
|
||||||
|
2018
|
|
2017 (a)
|
||||
Deferred income
|
$
|
24
|
|
|
$
|
23
|
|
Taxes other than income taxes
|
22
|
|
|
20
|
|
||
Employee costs
|
11
|
|
|
7
|
|
||
Asset retirement obligation
|
10
|
|
|
11
|
|
||
Accrued environmental liabilities
|
4
|
|
|
12
|
|
||
Other
|
10
|
|
|
11
|
|
||
Total Other Current Liabilities
|
$
|
81
|
|
|
$
|
84
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
|
|
December 31, 2018
|
85
|
Notes to Consolidated Financial Statements
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Revolving Credit Facility
|
$
|
945
|
|
|
$
|
423
|
|
Dropdown Credit Facility
|
300
|
|
|
—
|
|
||
MPC Loan Agreement
|
—
|
|
|
—
|
|
||
5.500% Senior Notes due 2019
|
500
|
|
|
500
|
|
||
3.500% Senior Notes due 2022 (a)
|
500
|
|
|
500
|
|
||
6.250% Senior Notes due 2022
|
300
|
|
|
300
|
|
||
6.375% Senior Notes due 2024
|
450
|
|
|
450
|
|
||
5.250% Senior Notes due 2025
|
750
|
|
|
750
|
|
||
4.250% Senior Notes due 2027 (a)
|
750
|
|
|
750
|
|
||
5.200% Senior Notes due 2047 (a)
|
500
|
|
|
500
|
|
||
Capital lease obligations
|
15
|
|
|
9
|
|
||
Total Debt
|
5,010
|
|
|
4,182
|
|
||
Unamortized issuance costs (a)
|
(46
|
)
|
|
(54
|
)
|
||
Current maturities, net of unamortized issuance costs
|
(504
|
)
|
|
(1
|
)
|
||
Debt, Net of Current Maturities and Unamortized Issuance Costs
|
$
|
4,460
|
|
|
$
|
4,127
|
|
(a)
|
Unamortized discounts of
$4 million
and
$5 million
associated with these senior notes are included in unamortized issuance costs at
December 31, 2018
and
2017
, respectively.
|
86
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
December 31, 2018
|
87
|
Notes to Consolidated Financial Statements
|
88
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
December 31, 2018
|
||
2019
|
$
|
4
|
|
2020
|
3
|
|
|
2021
|
3
|
|
|
2022
|
2
|
|
|
2023
|
2
|
|
|
Thereafter
|
4
|
|
|
Total minimum lease payments
|
18
|
|
|
Less amount representing interest
|
(3
|
)
|
|
Capital lease obligations
|
$
|
15
|
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
Purchase obligations
|
$
|
2,078
|
|
|
$
|
2,084
|
|
|
$
|
2,054
|
|
|
$
|
2,013
|
|
|
$
|
2,013
|
|
|
$
|
1,673
|
|
|
$
|
11,915
|
|
Operating leases
|
17
|
|
|
17
|
|
|
15
|
|
|
13
|
|
|
13
|
|
|
105
|
|
|
180
|
|
|||||||
Total
|
$
|
2,095
|
|
|
$
|
2,101
|
|
|
$
|
2,069
|
|
|
$
|
2,026
|
|
|
$
|
2,026
|
|
|
$
|
1,778
|
|
|
$
|
12,095
|
|
|
|
December 31, 2018
|
89
|
Notes to Consolidated Financial Statements
|
|
Tioga Crude Oil Pipeline Release
|
|
Other Liabilities
|
|
Total
|
||||||
At December 31, 2016
|
$
|
16
|
|
|
$
|
6
|
|
|
$
|
22
|
|
Additions
|
19
|
|
|
1
|
|
|
20
|
|
|||
Expenditures
|
(25
|
)
|
|
(1
|
)
|
|
(26
|
)
|
|||
At December 31, 2017
|
10
|
|
|
6
|
|
|
16
|
|
|||
Additions
|
1
|
|
|
5
|
|
|
6
|
|
|||
Expenditures
|
(11
|
)
|
|
(5
|
)
|
|
(16
|
)
|
|||
At December 31, 2018
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
6
|
|
90
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
December 31, 2018
|
91
|
Notes to Consolidated Financial Statements
|
92
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
Year Ended December 31,
|
||||||||||
|
2018 (a)
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Net earnings
|
$
|
600
|
|
|
$
|
306
|
|
|
$
|
277
|
|
Special Allocation (b)
|
—
|
|
|
1
|
|
|
3
|
|
|||
Net earnings, including special allocations
|
600
|
|
|
307
|
|
|
280
|
|
|||
Distributions on Preferred Units (c)
|
(41
|
)
|
|
(3
|
)
|
|
—
|
|
|||
Net earnings attributable to common units
|
559
|
|
|
304
|
|
|
280
|
|
|||
General partner’s distributions
|
—
|
|
|
(6
|
)
|
|
(10
|
)
|
|||
General partner’s IDRs (d)
|
—
|
|
|
(75
|
)
|
|
(148
|
)
|
|||
Limited partners’ distributions on common units
|
(890
|
)
|
|
(611
|
)
|
|
(344
|
)
|
|||
Distributions on common units greater than earnings
|
$
|
(331
|
)
|
|
$
|
(388
|
)
|
|
$
|
(222
|
)
|
General partner’s earnings:
|
|
|
|
|
|
||||||
Distributions
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
10
|
|
General partners IDRs (d)
|
—
|
|
|
75
|
|
|
148
|
|
|||
Allocation of distributions (greater) less than earnings (e)
|
(28
|
)
|
|
(44
|
)
|
|
(65
|
)
|
|||
Total general partner’s earnings
|
$
|
(28
|
)
|
|
$
|
37
|
|
|
$
|
93
|
|
Limited partners’ earnings on common units:
|
|
|
|
|
|
||||||
Distributions (f)
|
$
|
890
|
|
|
$
|
611
|
|
|
$
|
344
|
|
Special allocation (f)
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
|||
Allocation of distributions greater than earnings
|
(303
|
)
|
|
(344
|
)
|
|
(157
|
)
|
|||
Total limited partners’ earnings on common units
|
$
|
587
|
|
|
$
|
266
|
|
|
$
|
184
|
|
Weighted average limited partner units outstanding:
|
|
|
|
|
|
||||||
Common units - basic
|
228.7
|
|
|
126.0
|
|
|
98.2
|
|
|||
Common units - diluted (g)
|
228.9
|
|
|
126.1
|
|
|
98.2
|
|
|||
Net earnings per limited partner unit: (h)
|
|
|
|
|
|
||||||
Common - basic
|
$
|
2.57
|
|
|
$
|
2.11
|
|
|
$
|
1.87
|
|
Common - diluted
|
$
|
2.57
|
|
|
$
|
2.11
|
|
|
$
|
1.87
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
(b)
|
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 North Dakota Gathering and Processing Assets in
2017
and the Alaska Storage and Terminalling Assets acquisition in
2016
.
|
(c)
|
The Preferred Units entitle unitholders to receive preferred distributions on a semi-annually basis.
|
(d)
|
IDRs entitled 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
$50 million
of IDRs for the year ended
December 31, 2017
waived by TLGP. Our general partner no longer holds IDRs as a result of the IDR/GP Transaction.
|
(e)
|
We have revised the historical allocation of general partner earnings to include the Predecessors’ losses of
$28 million
,
$43 million
and
$62 million
for the years ended
December 31, 2018
,
2017
and
2016
, respectively.
|
(f)
|
Distributions of earnings for limited partners’ common units for the years ended
December 31, 2018
and 2017 is net of a
$60 million
and
$25 million
waiver, respectively, from our Sponsor in connection with the WNRL Merger.
|
(g)
|
Diluted net earnings per unit include the effects of potentially dilutive units on our common units, which consist of unvested service and performance phantom units.
|
(h)
|
Amounts may not recalculate due to rounding of dollar and unit information.
|
|
|
December 31, 2018
|
93
|
Notes to Consolidated Financial Statements
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net earnings attributable to partners
|
$
|
628
|
|
|
$
|
349
|
|
|
$
|
339
|
|
Distributions on Preferred Units
|
(41
|
)
|
|
(3
|
)
|
|
—
|
|
|||
General partner’s IDRs
|
—
|
|
|
(75
|
)
|
|
(148
|
)
|
|||
Special allocation
|
—
|
|
|
1
|
|
|
3
|
|
|||
Net earnings available to partners
|
$
|
587
|
|
|
$
|
272
|
|
|
$
|
194
|
|
General partner’s ownership interest (a)
|
—
|
%
|
|
—
|
%
|
|
2.0
|
%
|
|||
General partner’s allocated interest in net earnings (b)
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
4
|
|
General partner’s IDRs
|
—
|
|
|
75
|
|
|
148
|
|
|||
Allocation of Predecessors’ impact to general partner interest
|
(28
|
)
|
|
(43
|
)
|
|
(62
|
)
|
|||
Total general partner’s interest in net earnings
|
$
|
(28
|
)
|
|
$
|
36
|
|
|
$
|
90
|
|
(a)
|
In connection with the IDR/GP Transaction, our general partner units converted into non-economic general partner units.
|
(b)
|
Prior to the IDR/GP Transaction, we allocated net earnings to our general partner based on its ownership interest.
|
|
Common
|
|
Preferred
|
|
General Partner
|
|
Total
|
||||
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
|
6.3
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
Issuance in July 2016 in connection with the Alaska Storage and Terminalling Assets acquisition
|
0.4
|
|
|
—
|
|
|
0.2
|
|
|
0.6
|
|
Issuance in September 2016 in connection with the Alaska Storage and Terminalling Assets acquisition
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
Issuance in November 2016 in connection with the Northern California Terminalling and Storage Assets acquisition
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
Unit-based compensation awards
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
At December 31, 2016
|
103.0
|
|
|
—
|
|
|
2.1
|
|
|
105.1
|
|
Issuances under ATM Program
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
Issuance of units in February 2017 for cash
|
5.0
|
|
|
—
|
|
|
0.1
|
|
|
5.1
|
|
Issuance in October 2017 in connection with the WNRL Merger
|
108.0
|
|
|
—
|
|
|
—
|
|
|
108.0
|
|
Issuance in November 2017 in connection with the
Anacortes Logistics Assets
acquisition
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
Issuance of Preferred Units in December 2017
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
At December 31, 2017
|
217.1
|
|
|
0.6
|
|
|
2.2
|
|
|
219.9
|
|
Issuance in August 2018 in connection with the 2018 Drop Down
|
28.3
|
|
|
—
|
|
|
—
|
|
|
28.3
|
|
Unit-based compensation awards
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
At December 31, 2018
|
245.5
|
|
|
0.6
|
|
|
2.2
|
|
|
248.3
|
|
94
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
General partner’s distributions:
|
|
|
|
|
|
||||||
General partner’s distributions
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
(10
|
)
|
General partner’s IDRs (a)
|
—
|
|
|
(75
|
)
|
|
(148
|
)
|
|||
Total general partner’s distributions
|
$
|
—
|
|
|
$
|
(81
|
)
|
|
$
|
(158
|
)
|
|
|
|
|
|
|
||||||
Limited partners’ distributions:
|
|
|
|
|
|
||||||
Common
|
$
|
(890
|
)
|
|
$
|
(611
|
)
|
|
$
|
(344
|
)
|
Total limited partners’ distributions
|
(890
|
)
|
|
(611
|
)
|
|
(344
|
)
|
|||
Total Cash Distributions
|
$
|
(890
|
)
|
|
$
|
(692
|
)
|
|
$
|
(502
|
)
|
(a)
|
As a result of the IDR/GP Transaction that occurred on October 30, 2017, our general partner no longer receives IDRs.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Capital expenditures included in accounts payable at period end
|
$
|
105
|
|
|
$
|
50
|
|
|
$
|
30
|
|
Capital expenditures included in affiliate payable at period end
|
—
|
|
|
—
|
|
|
8
|
|
|||
Capital leases and other
|
—
|
|
|
—
|
|
|
2
|
|
|||
Predecessors’ net liabilities not assumed by Andeavor Logistics
|
13
|
|
|
—
|
|
|
22
|
|
|||
Receivable from affiliate for capital expenditures
|
26
|
|
|
4
|
|
|
4
|
|
|
|
December 31, 2018
|
95
|
Notes to Consolidated Financial Statements
|
96
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
December 31, 2017 (a)
|
|
Adjustments for ASC 606 (b)(c)
|
|
Balance at January 1, 2018
|
|
December 31,
2018 |
||||
Contract assets
|
—
|
|
|
34
|
|
|
34
|
|
|
32
|
|
Deferred income, current
|
23
|
|
|
—
|
|
|
23
|
|
|
24
|
|
Deferred income, noncurrent
|
43
|
|
|
16
|
|
|
59
|
|
|
57
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
(b)
|
These amounts exclude balances associated with equity method investments. We recognized a cumulative adjustment of
$3 million
as a decrease to Equity Method Investments in our consolidated balance sheets as of January 1, 2018 for the impacts related to our equity method investment in TRG. There were no material impacts to this balance during the year ended
December 31, 2018
due to the adoption.
|
(c)
|
Included in the
$34 million
change to contract assets is a
$32 million
reclass from Receivables for amounts for which we were not allowed to invoice as of January 1, 2018.
|
|
|
December 31, 2018
|
97
|
Notes to Consolidated Financial Statements
|
|
Year Ended December 31, 2018
|
||||||||||
|
Terminalling and Transportation (a)
|
|
Gathering and Processing (a)
|
|
Wholesale
|
||||||
Service Revenues (b)
|
|
|
|
|
|
||||||
Refined products
|
$
|
898
|
|
|
$
|
—
|
|
|
$
|
17
|
|
Crude oil and water
|
153
|
|
|
438
|
|
|
—
|
|
|||
Natural gas
|
—
|
|
|
391
|
|
|
—
|
|
|||
Other
|
3
|
|
|
—
|
|
|
—
|
|
|||
Total Service Revenues
|
1,054
|
|
|
829
|
|
|
17
|
|
|||
Product Revenues
|
|
|
|
|
|
||||||
NGL products
|
—
|
|
|
434
|
|
|
—
|
|
|||
Refined products
|
—
|
|
|
—
|
|
|
46
|
|
|||
Total Product Revenues
|
—
|
|
|
434
|
|
|
46
|
|
|||
Total Revenues
|
$
|
1,054
|
|
|
$
|
1,263
|
|
|
$
|
63
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
(b)
|
Includes
$425 million
of lease revenues for the year ended
December 31, 2018
.
|
98
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
Year Ended December 31,
|
||||||||||
|
2018 (a)
|
|
2017 (a)
|
|
2016 (a)
|
||||||
Revenues
|
|
|
|
|
|
||||||
Terminalling and Transportation:
|
|
|
|
|
|
||||||
Terminalling
|
$
|
888
|
|
|
$
|
690
|
|
|
$
|
480
|
|
Pipeline transportation
|
160
|
|
|
130
|
|
|
125
|
|
|||
Other revenues
|
6
|
|
|
18
|
|
|
—
|
|
|||
Total Terminalling and Transportation
|
1,054
|
|
|
838
|
|
|
605
|
|
|||
Gathering and Processing:
|
|
|
|
|
|
||||||
NGL sales
|
436
|
|
|
369
|
|
|
103
|
|
|||
Gas gathering and processing
|
330
|
|
|
333
|
|
|
264
|
|
|||
Crude oil and water gathering
|
336
|
|
|
262
|
|
|
582
|
|
|||
Pass-thru and other
|
161
|
|
|
165
|
|
|
115
|
|
|||
Total Gathering and Processing
|
1,263
|
|
|
1,129
|
|
|
1,064
|
|
|||
Wholesale:
|
|
|
|
|
|
||||||
Fuel sales (b)
|
46
|
|
|
1,267
|
|
|
—
|
|
|||
Other wholesale
|
33
|
|
|
15
|
|
|
—
|
|
|||
Total Wholesale
|
79
|
|
|
1,282
|
|
|
—
|
|
|||
Intersegment wholesale revenues
|
(16
|
)
|
|
—
|
|
|
—
|
|
|||
Total Segment Revenues
|
$
|
2,380
|
|
|
$
|
3,249
|
|
|
$
|
1,669
|
|
|
|
|
|
|
|
||||||
Segment Operating Income
|
|
|
|
|
|
||||||
Terminalling and Transportation
|
$
|
498
|
|
|
$
|
397
|
|
|
$
|
240
|
|
Gathering and Processing
|
310
|
|
|
245
|
|
|
235
|
|
|||
Wholesale
|
27
|
|
|
15
|
|
|
—
|
|
|||
Total Segment Operating Income
|
835
|
|
|
657
|
|
|
475
|
|
|||
Unallocated general and administrative expenses
|
(39
|
)
|
|
(54
|
)
|
|
(27
|
)
|
|||
Operating Income
|
796
|
|
|
603
|
|
|
448
|
|
|||
Interest and financing costs, net
|
(233
|
)
|
|
(330
|
)
|
|
(195
|
)
|
|||
Equity in earnings of equity method investments
|
31
|
|
|
22
|
|
|
13
|
|
|||
Other income, net
|
6
|
|
|
11
|
|
|
11
|
|
|||
Net Earnings
|
$
|
600
|
|
|
$
|
306
|
|
|
$
|
277
|
|
|
|
|
|
|
|
||||||
Depreciation and Amortization Expense
|
|
|
|
|
|
||||||
Terminalling and Transportation
|
$
|
144
|
|
|
$
|
117
|
|
|
$
|
95
|
|
Gathering and Processing
|
213
|
|
|
191
|
|
|
138
|
|
|||
Wholesale
|
11
|
|
|
5
|
|
|
—
|
|
|||
Total Depreciation and Amortization Expense
|
$
|
368
|
|
|
$
|
313
|
|
|
$
|
233
|
|
|
|
|
|
|
|
||||||
Capital Expenditures
|
|
|
|
|
|
||||||
Terminalling and Transportation
|
$
|
205
|
|
|
$
|
188
|
|
|
$
|
193
|
|
Gathering and Processing
|
545
|
|
|
175
|
|
|
119
|
|
|||
Wholesale
|
1
|
|
|
—
|
|
|
—
|
|
|||
Total Capital Expenditures
|
$
|
751
|
|
|
$
|
363
|
|
|
$
|
312
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
(b)
|
The presentation of wholesale fuel sales was impacted by adoption of ASC 606 on January 1, 2018. Beginning January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements were netted.
|
|
|
December 31, 2018
|
99
|
Notes to Consolidated Financial Statements
|
|
December 31,
|
||||||
|
2018
|
|
2017 (a)
|
||||
Identifiable Assets
|
|
|
|
||||
Terminalling and Transportation
|
$
|
3,458
|
|
|
$
|
3,045
|
|
Gathering and Processing
|
6,488
|
|
|
6,006
|
|
||
Wholesale
|
255
|
|
|
342
|
|
||
Other
|
94
|
|
|
112
|
|
||
Total Identifiable Assets
|
$
|
10,295
|
|
|
$
|
9,505
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
|
Quarters
|
|
|
||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Total Year
|
||||||||||
2018 (a)
|
(In millions, except per unit amounts)
|
||||||||||||||||||
Revenues
|
$
|
546
|
|
|
$
|
569
|
|
|
$
|
642
|
|
|
$
|
623
|
|
|
$
|
2,380
|
|
NGL expense (b)
|
48
|
|
|
45
|
|
|
73
|
|
|
40
|
|
|
206
|
|
|||||
Operating expenses
|
201
|
|
|
221
|
|
|
236
|
|
|
227
|
|
|
885
|
|
|||||
Operating income
|
177
|
|
|
180
|
|
|
215
|
|
|
224
|
|
|
796
|
|
|||||
Net earnings
|
131
|
|
|
132
|
|
|
166
|
|
|
171
|
|
|
600
|
|
|||||
Limited partners' interest in net earnings
|
125
|
|
|
138
|
|
|
160
|
|
|
161
|
|
|
584
|
|
|||||
Net earnings per limited partner unit (c):
|
|
|
|
|
|
|
|
|
|
||||||||||
Common - basic
|
$
|
0.59
|
|
|
$
|
0.63
|
|
|
$
|
0.68
|
|
|
$
|
0.66
|
|
|
$
|
2.57
|
|
Common - diluted
|
$
|
0.59
|
|
|
$
|
0.63
|
|
|
$
|
0.68
|
|
|
$
|
0.66
|
|
|
$
|
2.57
|
|
2017 (a)
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
427
|
|
|
$
|
614
|
|
|
$
|
1,094
|
|
|
$
|
1,114
|
|
|
$
|
3,249
|
|
Cost of fuel and other (b)(d)
|
—
|
|
|
162
|
|
|
554
|
|
|
528
|
|
|
1,244
|
|
|||||
NGL expense (b)
|
59
|
|
|
56
|
|
|
64
|
|
|
86
|
|
|
265
|
|
|||||
Operating expenses
|
142
|
|
|
171
|
|
|
199
|
|
|
179
|
|
|
691
|
|
|||||
Operating income
|
131
|
|
|
146
|
|
|
147
|
|
|
179
|
|
|
603
|
|
|||||
Net earnings
|
73
|
|
|
90
|
|
|
90
|
|
|
53
|
|
|
306
|
|
|||||
Limited partners' interest in net earnings (c)
|
55
|
|
|
70
|
|
|
97
|
|
|
47
|
|
|
267
|
|
|||||
Net earnings per limited partner unit (c):
|
|
|
|
|
|
|
|
|
|
||||||||||
Common - basic
|
$
|
0.51
|
|
|
$
|
0.63
|
|
|
$
|
0.90
|
|
|
$
|
0.25
|
|
|
$
|
2.11
|
|
Common - diluted
|
$
|
0.51
|
|
|
$
|
0.63
|
|
|
$
|
0.90
|
|
|
$
|
0.25
|
|
|
$
|
2.11
|
|
(a)
|
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
|
(b)
|
Excludes direct operating expenses incurred across our operating segments and depreciation and amortization expenses.
|
(c)
|
The sum of four quarters may not equal annual results due to rounding or the quarterly number of units outstanding.
|
(d)
|
Due to the adoption of ASC 606 effective January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements for the year ended December 31, 2018 were netted. See Note 1 for further discussion.
|
100
|
|
|
|
Changes and Disagreements with Accountants, Controls and Procedures and Other Information
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
|
|
December 31, 2018
|
101
|
Internal Control
|
102
|
|
|
|
Directors, Executive Officers and Corporate Governance
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Name
|
Age as of
January 31, 2019
|
Position with Tesoro Logistics GP, LLC
|
Gary R. Heminger
|
65
|
Chairman of the Board of Directors and Chief Executive Officer
|
Pamela K.M. Beall
|
62
|
Director
|
Sigmund L. Cornelius
|
64
|
Director
|
Ruth I. Dreessen
|
62
|
Director
|
Gregory J. Goff
|
62
|
Director
|
Timothy T. Griffith
|
49
|
Director
|
Michael J. Hennigan
|
59
|
Director
|
James H. Lamanna
|
64
|
Director
|
Frank M. Semple
|
67
|
Director
|
Donald C. Templin
|
55
|
Director
|
Don J. Sorensen
|
51
|
President
|
Suzanne Gagle
|
53
|
General Counsel
|
Blane W. Peery
|
52
|
Vice President, Accounting and Systems Integration
|
D. Andrew Woodward
|
36
|
Vice President, Finance
|
Molly R. Benson (a)
|
52
|
Vice President, Chief Securities, Governance & Compliance Officer and Corporate Secretary
|
Kristina A. Kazarian (a)
|
36
|
Vice President, Investor Relations
|
|
|
December 31, 2018
|
103
|
Directors, Executive Officers and Corporate Governance
|
104
|
|
|
|
Directors, Executive Officers and Corporate Governance
|
|
|
December 31, 2018
|
105
|
Directors, Executive Officers and Corporate Governance
|
106
|
|
|
|
Directors, Executive Officers and Corporate Governance
|
|
|
December 31, 2018
|
107
|
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.
|
108
|
|
|
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
•
|
Gary Heminger, Chief Executive Officer and Chairman of the Board;
|
•
|
D. Andrew Woodward, Vice President, Finance;
|
•
|
Don J. Sorensen, President;
|
•
|
Gregory J. Goff,
Former
Chief Executive Officer and Chairman of the Board;
|
•
|
Steven M. Sterin,
Former
President and Chief Financial Officer; and
|
•
|
Kim K. W. Rucker,
Former
Executive Vice President and General Counsel.
|
|
|
December 31, 2018
|
109
|
Executive Compensation
|
•
|
100% of Mr. Woodward’s compensation expenses for the period from October 1, 2018 (the date he was elected as our Vice President, Finance) through December 31, 2018; and
|
•
|
90% of Mr. Sorensen’s compensation expenses for 2018.
|
110
|
|
|
|
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 Compensation Program
|
Rewards executives’ contributions to the achievement of predetermined Andeavor corporate, business unit and individual goals
|
|
Establishes performance measures that 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
|
Long-Term Equity Awards in the form of Performance Phantom Units
|
Correlates executives’ pay with relative increases (as compared to a peer group) in unitholder value over a three-year period
|
|
In periods of low relative performance, executives realize little or no value
In periods of high relative performance, executives may realize substantial value
|
|
YES - Pays out only based on increased relative unitholder value
May not vest depending upon unitholder return
|
|
|
December 31, 2018
|
111
|
Executive Compensation
|
[
|
Bonus Eligible Earnings
|
x
|
Target Bonus %
|
x
|
% Overall
Company Performance Achieved
|
]
|
+/-
|
Individual Performance Adjustment
(a)
|
=
|
Final Award
|
Performance Measure
|
Threshold
(50% Payout)
|
Target
(100% Payout)
|
Maximum
(200% Payout)
|
Weighting (%)
|
Performance Achieved (a) (%)
|
|||||||||||
Margin-neutral EBITDA (b)
|
$
|
2,762
|
|
|
$
|
3,249
|
|
|
$
|
3,573
|
|
|
50
|
200
|
|
|
Growth, Productivity and Synergy Improvements (c)
|
$
|
437
|
|
|
$
|
486
|
|
|
$
|
559
|
|
|
20
|
200
|
|
|
Cost Management (d)
|
$
|
3,961
|
|
|
$
|
3,772
|
|
|
$
|
3,583
|
|
|
15
|
106
|
|
|
Process Safety Management (e)
|
0.18
|
|
|
0.16
|
|
|
0.14
|
|
|
5
|
—
|
|
|
|||
Environmental (e)
|
33
|
|
|
28
|
|
|
25
|
|
|
5
|
88
|
|
|
|||
Personal Safety (f)
|
0.73
|
|
|
0.57
|
|
|
0.51
|
|
|
5
|
84
|
|
|
|||
|
|
|
|
|
|
|
Total
|
165
|
|
|
(a)
|
MPC’s compensation committee had the discretion to adjust Andeavor’s performance results to take into account unplanned or unanticipated business decisions or events that are outside of management’s control, unusual or non-recurring items, and other factors, to determine the total amount, if any, payable under the 2018 ICP. In calculating Andeavor’s performance under each measure, MPC’s compensation committee considered the impact of the MPC Merger and determined to adjust Andeavor’s performance under each measure to consider Andeavor’s performance for the period from January 1, 2018 through September 30, 2018, prior to its acquisition on October 1, 2018, rather than for the full 2018 fiscal year.
|
(b)
|
Achievement of U.S. GAAP-based net earnings before interest, income taxes, depreciation and amortization, measured on a margin neutral basis by excluding fluctuations in commodity prices (and thereby fluctuations in margins) over which management has little influence.
|
(c)
|
Targeted improvements from growth initiatives, productivity with existing assets and synergies from acquisitions to create value, including growth from income-generating capital improvements, margin improvement initiatives, organic growth initiatives and other smaller projects.
|
(d)
|
Measurement of operating expenditures and administrative expenses less certain adjustments. The cost metric excludes refining energy costs, annual incentive compensation costs, stock-based compensation expense, non-controllable expenses for post-retirement employee benefits (pension, medical, life insurance) and insurance costs (property, casualty and liability).
|
(e)
|
Targeted improvement in the number of incidents over the average for the past three years. Threshold is set at the three-year average.
|
(f)
|
Targeted improvement in the number of recordable personal safety incidents over the average for the past three years. Threshold is set at the three-year average.
|
112
|
|
|
|
Executive Compensation
|
Name
|
Bonus Eligible Earnings ($) (a)
|
Target Bonus as a % of Earnings
|
Target Bonus ($)
|
Final Award as a % of Target
|
Final Award ($)
|
Woodward (b)
|
228,069
|
35
|
79,824
|
180
|
143,684
|
Sorensen (c)
|
450,165
|
90
|
405,149
|
173
|
700,000
|
(a)
|
Bonus eligible earnings
is based on salary earned during the 2018 calendar year.
|
(b)
|
Reflects Mr. Woodward’s full ICP payout for 2018. As discussed above, we have been allocated 100% of Mr. Woodward’s cash compensation attributable to the period from October 1, 2018 through December 31, 2018.
|
(c)
|
Reflects Mr. Sorensen’s full ICP payout for 2018. As discussed above, 90% of Mr. Sorensen’s cash compensation was allocated to us for 2018.
|
Relative Total Unitholder Return
|
|
Payout as a % of Target
|
75th percentile and above
|
|
200%
|
50th percentile
|
|
100%
|
30th percentile
|
|
60%
|
Below 30th percentile
|
|
—
|
Performance Unit Grant Date
|
Original Performance Period
|
Final Performance Period
|
Actual TUR (%)
|
Relative Total Unitholder Return
|
Payout (% of Target)
|
DER Value/Unit ($)
|
|
2/9/2016
|
1/1/2016—12/31/2018
|
1/1/2016—10/1/2018
|
8.22
|
|
72nd percentile
|
145.44
|
9.3782
|
2/16/2017
|
2/16/2017—2/16/2020
|
2/16/2017—10/1/2018
|
(0.67)
|
|
72nd percentile
|
145.44
|
5.9412
|
2/16/2018
|
2/16/2018—2/16/2021
|
2/16/2018—10/1/2018
|
0.60
|
|
63rd percentile
|
154.52
|
2.0450
|
|
|
December 31, 2018
|
113
|
Executive Compensation
|
|
Target Number of Performance Units
|
Number of Units Awarded
|
||||||||||
Name
|
2016
|
|
2017
|
|
2018
|
|
2016
|
|
2017
|
|
2018
|
|
Sorensen
|
5,056
|
|
4,398
|
|
6,476
|
|
7,354
|
|
6,397
|
|
10,007
|
|
Goff
|
44,238
|
|
38,054
|
|
49,580
|
|
64,340
|
|
55,346
|
|
76,612
|
|
Sterin
|
8,974
|
|
7,780
|
|
10,523
|
|
13,052
|
|
11,316
|
|
16,261
|
|
Rucker
|
6,741
|
|
5,920
|
|
8,095
|
|
9,805
|
|
8,611
|
|
12,509
|
|
114
|
|
|
|
Executive Compensation
|
|
|
December 31, 2018
|
115
|
Executive Compensation
|
Name and Principal Position
|
|
Year
|
|
Salary ($)
|
|
Unit Awards
($) (a)
|
|
Non-Equity Incentive Plan Compensation ($)
|
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (b)
|
|
All Other Compensation
($) (c)
|
|
Total ($)
|
||||||
Gary R. Heminger
Chief Executive Officer and Chairman of the Board
|
|
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
D. Andrew Woodward
Vice President, Finance (Principal Financial Officer)
|
|
2018
|
|
58,352
|
|
|
—
|
|
|
35,921
|
|
|
2,728
|
|
|
4,937
|
|
|
101,938
|
|
Don J. Sorensen
President
|
|
2018
|
|
407,280
|
|
|
400,023
|
|
|
630,000
|
|
|
—
|
|
|
99,480
|
|
|
1,536,783
|
|
|
2017
|
|
380,215
|
|
|
325,056
|
|
|
275,855
|
|
|
401,155
|
|
|
37,771
|
|
|
1,420,052
|
|
|
|
2016
|
|
366,404
|
|
|
243,345
|
|
|
297,281
|
|
|
269,017
|
|
|
387,525
|
|
|
1,563,572
|
|
|
Gregory J. Goff
Former
Chief Executive Officer and Chairman of the Board
|
|
2018
|
|
—
|
|
|
3,062,557
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,062,557
|
|
|
2017
|
|
—
|
|
|
2,812,571
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,812,571
|
|
|
|
2016
|
|
—
|
|
|
2,129,175
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,129,175
|
|
|
Steven M. Sterin
Former
President and Chief Financial Office
r
|
|
2018
|
|
—
|
|
|
650,006
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
650,006
|
|
|
2017
|
|
—
|
|
|
575,020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
575,020
|
|
|
|
2016
|
|
—
|
|
|
431,919
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
431,919
|
|
|
Kim K.W. Rucker
Former
Executive Vice President and General Counsel
|
|
2018
|
|
—
|
|
|
500,028
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500,028
|
|
|
2017
|
|
—
|
|
|
437,547
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
437,547
|
|
|
|
2016
|
|
—
|
|
|
324,444
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
324,444
|
|
(a)
|
Amounts for
2018
reflect the aggregate grant date fair value of performance phantom units granted during the year, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification 718, Compensation-Stock Compensation (“FASB ASC Topic 718”). See Note 1 to our consolidated financial statements in Item 8 for assumptions used in this calculation. The aggregate grant date fair value of the performance phantom units granted in 2018, assuming the highest level of performance is achieved, would be as follows: Mr. Sorensen, $800,045; Mr. Goff, $6,125,113; Mr. Sterin, $1,300,011; and Ms. Rucker, $1,000,056. Amounts do not include Andeavor’s equity awards, which are not allocated to us.
|
(b)
|
Amounts reflect the change in pension value during the fiscal year. The amount for Sorensen was a decrease of $40,085, therefore $0 is reflected in the table.
|
(c)
|
Amounts for
2018
include:
|
◦
|
Andeavor 401(k) Plan Contributions: Andeavor provided matching contributions dollar-for-dollar up to 6% of eligible earnings for all employees who participated in the Andeavor 401(k) Plan. The portion of the matching contributions allocated to us for
2018
was $3,421 for Mr. Woodward and $14,850 for Mr. Sorensen. In addition, Andeavor provides a profit sharing contribution to the 401(k) Plan. This discretionary contribution, calculated as a percentage of employee’s base pay based on a pre-determined target for the calendar year, can range from 0% to 4% based on actual performance. The profit sharing contributions allocated to us for 2018 were $1,375 for Mr. Woodward and $4,950 for Mr. Sorensen.
|
◦
|
Andeavor Executive Deferred Compensation Contributions: Andeavor matched participants’ base salary contributions dollar-for-dollar up to 4% of eligible earnings above the Internal Revenue Code annual compensation limit ($275,000 for
2018
). The portion of the matching contributions allocated to us for
2018
was $26,010 for Mr. Sorensen. Also, the Plan credited a discretionary profit sharing contribution in an amount up to 2% of each participant’s Plan-considered compensation. The profit sharing contributions allocated to us for 2018 were $141 for Mr. Woodward and $8,670 for Mr. Sorensen.
|
◦
|
Long-Term Incentive Award Amendment: Andeavor entered into an agreement with Mr. Sorensen that extended and strengthened certain non-competition provisions in his long-term incentive award agreements. The portion of the payment he received as consideration for these additional obligations that was allocated to us was $45,000.
|
116
|
|
|
|
Executive Compensation
|
Name
|
|
Award Type
|
|
Grant Date
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) (a)
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards ($) (b)
|
|
Grant Date Fair Value of Unit Awards ($) (c)
|
|||||||||||||
|
Threshold
|
Target
|
|
Maximum
|
|
Threshold
|
Target
|
|
Maximum
|
|
|||||||||||||
Woodward
|
|
Annual Incentive
|
|
N/A
|
|
9,978
|
|
19,956
|
|
|
39,912
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
Sorensen
|
|
Annual Incentive
|
|
N/A
|
|
182,317
|
|
364,634
|
|
|
729,268
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Phantom Units
|
|
2/16/2018
|
|
—
|
|
—
|
|
|
—
|
|
|
3,886
|
|
6,476
|
|
|
12,952
|
|
|
400,023
|
|
|
Goff
|
|
Phantom Units
|
|
2/16/2018
|
|
—
|
|
—
|
|
|
—
|
|
|
29,748
|
|
49,580
|
|
|
99,160
|
|
|
3,062,557
|
|
Sterin
|
|
Phantom Units
|
|
2/16/2018
|
|
—
|
|
—
|
|
|
—
|
|
|
6,314
|
|
10,523
|
|
|
21,046
|
|
|
650,006
|
|
Rucker
|
|
Phantom Units
|
|
2/16/2018
|
|
—
|
|
—
|
|
|
—
|
|
|
4,857
|
|
8,095
|
|
|
16,190
|
|
|
500,028
|
|
(a)
|
“Threshold” represents the minimum payout for the performance metrics under the ICP assuming that the minimum level of performance is attained. “Target” represents the amount payable if the performance metrics are reached. “Maximum” represents the maximum payout assuming that the maximum level of performance is attained. See “Elements of Compensation— Andeavor’s 2018 Incentive Compensation Program” for more information about awards under the ICP. Amounts in these columns reflect the range of compensation expense allocated to us by our Sponsor with respect to awards under Andeavor’s ICP: Mr. Woodward, 100% for the period from October 1, 2018 through December 31, 2018; Mr. Sorensen, 90% for 2018. These columns do not show the ICP range for Messrs. Goff and Sterin or Ms. Rucker, as no portion of their ICP payout was allocated to us.
|
(b)
|
Amounts show the number of performance phantom units granted during 2018 under our LTIP as described under “Elements of Compensation—Long-Term Incentive Compensation.” The performance period for this award ended on October 1, 2018 as a result of the MPC Merger. The final performance factor of 154.52% was applied to the target share amounts resulting in the following number of units being earned: Mr. Sorensen, 10,007; Mr. Goff, 76,612; Mr. Sterin, 16,261; and Ms. Rucker, 12,509.
|
(c)
|
Amounts reflect the grant date fair value calculated in accordance with FASB ASC Topic 718. See Note 1 to our consolidated financial statements in Item 8 for assumptions used in this calculation.
|
|
|
December 31, 2018
|
117
|
Executive Compensation
|
|
|
Equity Awards (a)
|
|||||||
Name
|
|
Grant Date (b)
|
|
Number of Units That
Have Not Vested (c)
|
Market Value of Units
That Have Not Vested ($) (d)
|
||||
Sorensen
|
|
2/16/2018
|
|
9,923
|
|
|
322,398
|
|
|
|
2/16/2017
|
|
6,279
|
|
|
204,005
|
|
|
|
Goff
|
|
2/16/2018
|
|
75,818
|
|
|
2,463,327
|
|
|
|
2/16/2017
|
|
54,084
|
|
|
1,757,189
|
|
|
|
Sterin (e)
|
|
N/A
|
|
—
|
|
|
—
|
|
|
Rucker (e)
|
|
N/A
|
|
—
|
|
|
—
|
|
|
(a)
|
As discussed above under “Elements of Compensation—Long-Term Incentive Compensation,” all outstanding performance phantom units previously granted to our NEOs were converted to time-based phantom units on October 16, 2018.
|
(b)
|
Reflects the grant date of the original performance phantom units.
|
(c)
|
Amounts for Messrs. Sorensen and Goff reflect the number of ANDX phantom units, converted upon the MPC Merger from prior ANDX performance phantom unit awards, held on December 31, 2018. These awards were granted under the Andeavor Logistics LP 2011 Long-Term Incentive Plan and remain subject to their original vesting schedules. These awards generally provide for pro rata vesting based on the number of full months worked during the awards’ original performance period once the grantee becomes retirement eligible. Messrs. Sorensen and Goff became retirement eligible on June 19, 2018 and May 1, 2015, respectively. Under applicable tax rules, this retirement eligibility caused Messrs. Sorensen and Goff to “vest” in a pro rata portion of their ANDX awards for payroll tax (e.g., FICA taxes) purposes upon their conversion on October 1, 2018, because on and after such date no substantial risk of forfeiture applies to these awards. While these awards continue to be reflected in this table, the portion used to pay the associated taxes has been excluded from this table, and is instead included in the “Option Exercises and Units Vested in 2018” table below.
|
(d)
|
The market value was calculated using the closing price of our common units on
December 31, 2018
($32.49).
|
(e)
|
All outstanding awards held by Mr. Sterin and Ms. Rucker vested on an accelerated basis due to the termination of their employment on October 3, 2018 and October 1, 2018, respectively, in connection with the MPC Merger; however, due to Section 409A of the Internal Revenue Code, these awards will not be distributed until six months plus one day following each NEO’s respective termination date. They are reflected in the “Option Exercises and Units Vested in 2018” table.
|
|
|
Unit Awards
|
|||||
Name
|
|
Number of Units Acquired on Vesting
|
Value Realized on Vesting ($) (a)
|
||||
Sorensen (b)
|
|
7,556
|
|
|
245,925
|
|
|
Goff (b)
|
|
66,396
|
|
|
2,161,585
|
|
|
Sterin (c)
|
|
42,146
|
|
|
1,324,466
|
|
|
Rucker (c)
|
|
32,080
|
|
|
1,089,923
|
|
|
(a)
|
Amounts reflect the pre-tax gain realized upon vesting, which is the fair market value of the units on the vesting date. See “Elements of Compensation—Long-Term Incentive Compensation” for additional information on the performance phantom units.
|
(b)
|
As discussed in footnote (c) to the Outstanding Equity at 2018 Fiscal Year-End table, during 2018, certain awards held by Messrs. Sorensen and Goff vested for payroll tax (e.g., FICA taxes) purposes due to their retirement eligibility under the applicable plans and agreements. Amounts in this column include the following numbers of such awards used to pay the associated taxes: Mr. Sorensen, 202 phantom units; Mr. Goff, 2,056 phantom units.
|
(c)
|
Includes performance phantom units granted in 2016, 2017 and 2018 that vested and were paid out to pay required FICA taxes and associated income taxes. All outstanding awards held by Mr. Sterin and Ms. Rucker vested on an accelerated basis due to the termination of their employment on October 3, 2018 and October 1, 2018, respectively, in connection with the MPC Merger; however, due to Section 409A of the Internal Revenue Code, these awards will not be distributed until six months plus one day following each NEO’s respective termination date. The number of deferred phantom units included in this table is: Mr. Sterin, 39,112; and Ms. Rucker, 29,770. The value realized on vesting for these deferred phantom units was calculated using the closing price of our common units on
December 31, 2018
($32.49).
|
118
|
|
|
|
Executive Compensation
|
Name
|
|
Plan Name
|
|
Number of Years of Credited Service (a)
|
|
Present Value of Accumulated Benefit ($) (b)
|
Payments During Last Fiscal Year ($)
|
|||
Woodward
|
|
Andeavor Pension Plan
|
|
—
|
|
40,087
|
|
|
—
|
|
|
Restoration Plan
|
|
—
|
|
3,556
|
|
|
—
|
|
|
Sorensen
|
|
Andeavor Pension Plan
|
|
22
|
|
986,643
|
|
|
—
|
|
|
Restoration Plan
|
|
22
|
|
873,555
|
|
|
—
|
|
(a)
|
Due to a freeze of credited service as of December 31, 2010, credited service values for the Andeavor Pension Plan are less than actual service values. Credited service is used to calculate the final average pay portion of the Pension Plan benefit. The Cash Balance portion of the retirement benefit that went into effect on January 1, 2011 does not utilize credited service. Mr. Woodward does not have any years of credited service as he was hired after the freeze went into effect.
|
(b)
|
The present values of the accumulated plan benefits are equal to the value of the retirement benefits at the earliest unreduced age for each plan using the assumptions as of
December 31, 2018
for financial reporting purposes. These assumptions include a discount rate of 4.22%, a cash balance interest crediting rate of 3.22%, the use of the RP-2018 Mortality Table with generational mortality improvements in accordance with Scale MP-2018 and for the Andeavor Pension Plan, that each employee will elect a lump sum payment at retirement using an interest rate of 4.22% and the PPA 2018 Mortality Table.
|
|
|
December 31, 2018
|
119
|
Executive Compensation
|
Name
|
|
|
|
Executive Contributions in Last Fiscal Year
($) (a)
|
|
Company Contributions in Last Fiscal Year
($) (b)
|
|
Aggregate Earnings in Last Fiscal Year
($) (c)
|
|
Aggregate Withdrawals/Distributions ($) (d)
|
|
Aggregate Balance at Last Fiscal Year-End ($) (d) (e)
|
Sorensen
|
|
Andeavor Executive Deferred Compensation Plan
|
|
27,010
|
|
28,900
|
|
(8,023)
|
|
—
|
|
861,569
|
|
|
Andeavor Logistics LP 2011 Long-Term Incentive Plan
|
|
—
|
|
306,974
|
|
—
|
|
6,993
|
|
285,083
|
(a)
|
Amounts shown for the Andeavor Executive Deferred Compensation Plan include amounts reflected for Mr. Sorensen in the “Salary” and Non-Equity Incentive Plan Compensation” columns of the 2018 Summary Compensation Table.
|
(b)
|
As discussed above under “Compensation Decisions and Allocation,” our Sponsor allocates a portion of the compensation expenses for Mr. Sorensen to us. Amounts shown for the Andeavor Executive Deferred Compensation Plan represent the full amounts of the contributions, earnings and year-end balances for Mr. Sorensen; the portion allocated to us is included in the “All Other Compensation” column of the 2018 Summary Compensation Table. Amounts shown for the Andeavor Logistics LP 2011 Long-Term Incentive Plan represent the value of Mr. Sorensen’s phantom units and accrued distribution equivalents under this plan, calculated using the December 19, 2018 closing price of our common units ($34.62).
|
(c)
|
Amounts shown for the Andeavor Executive Deferred Compensation Plan reflect the change in the market value pertaining to the investment funds in which Mr. Sorensen has chosen to invest his contributions and Andeavor’s contribution under the plan.
|
(d)
|
As discussed in footnote (c) to the “Outstanding Equity at 2018 Fiscal Year-End” table, during 2018, certain awards held by Mr. Sorensen vested for income tax and payroll tax (e.g., FICA taxes) purposes due to his retirement eligibility under the applicable plans and agreements. 202 phantom units were withheld for such taxes as of December 19, 2018. Using the closing price of our common units on that date ($34.62), the taxes totaled $6,993. As of December 31, 2018, Mr. Sorensen had 6,488 vested, but as yet unpaid, phantom units.
|
(e)
|
Amounts shown for the Andeavor Logistics LP 2011 Long-Term Incentive Plan represent the value of Mr. Sorensen’s phantom units and accrued distribution equivalents under this plan, calculated using the December 31, 2018 closing price of our common units ($32.49).
|
120
|
|
|
|
Executive Compensation
|
Name
|
Scenario
|
Severance ($)
|
Additional Pension Benefits ($) (a)
|
Accelerated Equity Vesting ($)
|
Other Benefits ($) (b)
|
Total ($)
|
|||||
Sorensen
|
Retirement (c)
|
—
|
|
—
|
|
210,795
|
|
—
|
|
210,795
|
|
Resignation (d)
|
—
|
|
—
|
|
210,795
|
|
—
|
|
210,795
|
|
|
Involuntary Termination without Cause or Voluntary Termination (d)
|
1,550,608
|
|
—
|
|
526,403
|
|
2,284
|
|
2,079,295
|
|
|
Involuntary Termination for Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Change in Control with Qualified Termination
|
2,188,245
|
|
2,120,383
|
|
526,403
|
|
50,017
|
|
4,885,048
|
|
|
Death
|
—
|
|
—
|
|
210,795
|
|
—
|
|
210,795
|
|
|
Disability
|
—
|
|
—
|
|
210,795
|
|
—
|
|
210,795
|
|
|
Goff
|
Retirement (c)
|
—
|
|
—
|
|
1,723,562
|
|
—
|
|
1,723,562
|
|
Resignation (d)
|
—
|
|
—
|
|
1,723,562
|
|
—
|
|
1,723,562
|
|
|
Involuntary Termination without Cause or Voluntary Termination (d)
|
—
|
|
—
|
|
4,220,516
|
|
—
|
|
4,220,516
|
|
|
Involuntary Termination for Cause
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Change in Control with Qualified Termination
|
—
|
|
—
|
|
4,220,516
|
|
—
|
|
4,220,516
|
|
|
Death
|
—
|
|
—
|
|
1,723,562
|
|
—
|
|
1,723,562
|
|
|
Disability
|
—
|
|
—
|
|
1,723,562
|
|
—
|
|
1,723,562
|
|
(a)
|
Pension benefits for our NEOs are reflected in the “2018 Pension Benefits” table above. Amounts in this column for Mr. Sorensen represent additional pension benefits attributable solely to the final average pay formula under the Andeavor Pension Plan and the Andeavor Restoration Pension Plan. The incremental retirement benefits included in this amount were calculated using the following assumptions: the present value is equal to the value of the normal retirement benefits under the Andeavor Pension Plan, adjusted to incorporate the enhancements listed below, at the earliest unreduced age assuming a discount rate of 4.22%, a cash balance interest crediting rate of 3.22%, the use of the RP-2018 Mortality Table with generational mortality improvements in accordance with Scale MP-2018, and assuming the election of a lump sum payment at retirement using an interest rate of 4.22% and the PPA 2019 Mortality Table. The referenced enhancements are (i) final average pay is calculated using base salary in effect immediately prior to separation from service and the highest bonus paid during the three years immediately preceding the separation from service, but not less than the final average pay taken into account in the determination of the NEO’s actual pension benefit, and (ii) the service used in determining the normal retirement benefit is equal to actual service for benefit accrual purposes plus three years (three years of additional age is also incorporated).
|
(b)
|
Includes 36 months of continued health, dental and life insurance coverage. In the event of death, life insurance would be paid out to the estate of Mr. Sorensen in the amount of $1 million.
|
(c)
|
Assumes retirement from ANDX and all affiliates, including MPC.
|
(d)
|
As Messrs. Sorensen and Goff are retirement eligible, any resignation, voluntary termination, or involuntary termination without cause would be deemed a retirement under the applicable plans and agreements.
|
|
|
December 31, 2018
|
121
|
Executive Compensation
|
•
|
due to death or disability;
|
•
|
for cause;
|
•
|
voluntary, unless the NEO has good reason (defined as a reduction in the NEO’s roles, responsibilities, pay or benefits, or the NEO being required to relocate more than 50 miles from his or her current location); or
|
•
|
on or after the date the NEO attains age 65.
|
•
|
a cash payment of up to three times the sum of the NEO’s current annualized base salary plus three times the highest bonus paid in the three years before the termination or change in control;
|
•
|
life and health insurance benefits for up to 36 months after termination at the lesser of the current cost or the active employee cost;
|
•
|
an additional three years of service credit and three years of age credit for purposes of retiree health and life insurance benefits;
|
•
|
a cash payment equal to the actuarial equivalent of the difference between amounts receivable by the NEO under the final average pay formula in our pension plans and those that would be payable if: (i) the NEO had an additional three years of participation service credit; (ii) the NEO’s final average pay were the higher of the NEO’s salary at the time of the change in control event or Qualified Termination plus the NEO’s highest annual bonus from the preceding three years (for purposes of determining early retirement commencement factors, the NEO is credited with three additional years of vesting service and three additional years of age);
|
•
|
a cash payment equal to the difference between amounts receivable under our tax-qualified and nonqualified defined contribution type retirement and deferred compensation plans and amounts that would have been received if the NEO’s defined contribution plan account had been fully vested; and
|
•
|
accelerated vesting of all outstanding MPC LTI awards.
|
122
|
|
|
|
Executive Compensation
|
Role
|
Cash Retainer ($)
|
Service Phantom Unit Award ($)
|
Committee Chair
Retainer ($)
|
Total
($)
|
Audit Committee Chair
|
65,000
|
90,000
|
15,000
|
170,000
|
Conflicts Committee Chair
|
65,000
|
90,000
|
15,000
|
170,000
|
All Other Directors
|
65,000
|
90,000
|
—
|
155,000
|
|
|
December 31, 2018
|
123
|
Executive Compensation
|
Compensation Component
|
2018 ($)
|
2019 ($)
|
||||
Cash Retainer
|
65,000
|
|
|
90,000
|
|
|
Deferred Phantom Unit Equity Award
|
90,000
|
|
|
110,000
|
|
|
Lead Director Retainer
|
N/A
|
|
|
15,000
|
|
|
Audit Committee Chair Retainer
|
15,000
|
|
|
15,000
|
|
|
Conflicts Committee Chair Retainer
|
15,000
|
|
|
15,000
|
|
|
MLP Representative MPC Board Observer Retainer
|
N/A
|
|
|
62,500
|
|
|
Name
|
Fees Earned or Paid in Cash ($)
|
Service Phantom Unit Awards ($) (a)
|
All Other Compensation ($)
|
|
Total ($)
|
||||||
Raymond J. Bromark (b)
|
94,500
|
|
|
86,386
|
|
|
—
|
|
180,886
|
|
|
Sigmund L. Cornelius
|
122,000
|
|
|
96,918
|
|
|
—
|
|
218,918
|
|
|
Ruth I. Dreessen
|
110,750
|
|
|
96,918
|
|
|
—
|
|
207,668
|
|
|
James H. Lamanna
|
107,000
|
|
|
86,386
|
|
|
—
|
|
193,386
|
|
|
Thomas C. O’Connor (c)
|
215
|
|
|
—
|
|
|
—
|
|
215
|
|
|
Frank M. Semple (d)
|
34,875
|
|
|
22,709
|
|
|
—
|
|
57,584
|
|
|
Jeff A. Stevens (e)
|
57,750
|
|
|
86,386
|
|
|
—
|
|
144,136
|
|
|
Michael E. Wiley (e)
|
57,750
|
|
|
86,386
|
|
|
—
|
|
144,136
|
|
|
(a)
|
Amounts shown represent the aggregate grant date fair value of the directors’ portion of the annual retainer paid in service phantom units computed in accordance with FASB ASC Topic 718. Non-employee directors generally received an annual grant of phantom units with a grant date fair value of $86,386. Mr. Cornelius and Ms. Dreessen joined the Board effective January 1, 2018, and each received a prorated award of phantom units with a grant date fair value of $10,532. Mr. Semple joined the Board effective October 1, 2018, and received an award of phantom units for the fourth quarter with a grant date fair value of $22,709. As a result of the MPC Merger, on October 1, 2018, all then-outstanding outstanding phantom units were paid out per the terms of the awards. The only service phantom units outstanding as of December 31,
2018
were the 456 units granted to Mr. Semple in respect of his election to the Board on October 1, 2018.
|
(b)
|
Mr. Bromark retired from the Board effective September 27, 2018, at which time his outstanding phantom units vested.
|
(c)
|
Mr. O’Connor retired from the Board effective January 1, 2018. Amounts shown for him reflect a prorated portion of his 2018 Board retainer and Conflicts Committee Chair retainers.
|
(d)
|
Mr. Semple joined the Board effective October 1, 2018 in connection with the MPC Merger. In addition to his service as our director, he serves as our Representative Observer to attend certain MPC Board and committee meetings, a role in which he acts as a liaison between the MPC Board and us
.
|
(e)
|
Messrs. Stevens and Wiley resigned from the Board effective October 1, 2018 in connection with the MPC Merger.
|
124
|
|
|
|
Security Ownership and Related Unitholder Matters
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters
|
|
Amount and Nature of Beneficial Ownership
|
Percent of Total Outstanding (%)
|
||||||
|
ANDX Common Units
|
MPC Common Stock
|
ANDX
|
MPC
|
||||
Pamela K. M. Beall
|
—
|
|
|
125,226
|
|
(f)
|
*
|
*
|
Sigmund L. Cornelius
|
4,158
|
|
(a)
|
—
|
|
|
*
|
*
|
Ruth I. Dreessen
|
2,850
|
|
(a)
|
—
|
|
|
*
|
*
|
Gregory J. Goff
|
300,378
|
|
(b)
|
2,035,418
|
|
(b)(f)
|
*
|
*
|
Timothy T. Griffith
|
—
|
|
|
280,749
|
|
(f)
|
*
|
*
|
Gary R. Heminger
|
—
|
|
|
3,065,847
|
|
(f)(g)
|
*
|
*
|
Michael J. Hennigan
|
—
|
|
|
33,502
|
|
(f)
|
*
|
*
|
James H. Lamanna
|
15,816
|
|
(a)
|
—
|
|
|
*
|
*
|
Kim K. W. Rucker
|
29,770
|
|
(c)
|
106,091
|
|
(c)(h)
|
*
|
*
|
Frank M. Semple
|
1,270
|
|
(a)
|
4,707
|
|
(h)
|
*
|
*
|
Don J. Sorensen
|
25,822
|
|
(d)
|
33,339
|
|
(d)
|
*
|
*
|
Steven M. Sterin
|
39,112
|
|
(e)
|
133,314
|
|
(e)
|
*
|
*
|
Donald C. Templin
|
—
|
|
|
581,422
|
|
(f)
|
*
|
*
|
D. Andrew Woodward
|
—
|
|
|
6,696
|
|
(i)
|
*
|
*
|
All Current Directors and Executive Officers as a Group (14 individuals)
|
350,294
|
|
|
6,285,808
|
|
(f)(j)
|
*
|
*
|
*
|
Less than 1% of the common units or common shares outstanding, as applicable.
|
(a)
|
Includes 814 phantom units that will settle in common units upon the director’s retirement from service on the Board. Mr. Semple’s amount also includes 456 phantom units that will vest and settle in common units on October 1, 2019.
|
(b)
|
ANDX total includes 129,902 time-based phantom units, a portion of which may be forfeited under certain conditions, that will settle in common units. MPC total includes (i) 483,554 restricted stock units converted from previously outstanding Andeavor awards, a portion of which may be forfeited under certain conditions, (ii) 226,383 shares held by G Goff Foundation Inc., for which Mr. Goff serves as a director with shared voting and investment power, (iii) 38,875 shares held in trust for which Mr. Goff acts as trustee with shared voting and investment power, and (iv) shares held jointly with his spouse.
|
(c)
|
ANDX total includes 29,770 time-based phantom units that will settle in common units on April 2, 2019. MPC total includes 105,018 restricted stock units that will settle in shares of common stock on April 2, 2019.
|
(d)
|
ANDX total includes 16,202 time-based phantom units, a portion of which may be forfeited under certain conditions, that will settle in common units. MPC total includes 20,653 restricted stock units converted from previously outstanding Andeavor awards, a portion of which may be forfeited under certain conditions.
|
(e)
|
ANDX total includes 39,112 time-based phantom units that will settle in common units on April 4, 2019. MPC total includes 133,314 restricted stock units that will settle in shares of common stock on April 4, 2019.
|
(f)
|
Includes all stock options exercisable within 60 days of January 31, 2019 as follows: Ms. Beall, 83,440; Mr. Goff, 283,329; Mr. Griffith, 233,800; Mr. Heminger, 2,498,655; Mr. Hennigan, 10,075; Mr. Templin, 495,395; all other executive officers, 71,357.
|
(g)
|
Includes 206,202 shares of common stock indirectly beneficially held in trust by Mr. Heminger.
|
(h)
|
Includes restricted stock unit awards that will settle in shares of common stock upon the director’s retirement from service on the MPC board or observer status as follows: Ms. Rucker, 1,073; Mr. Semple, 4,707.
|
(i)
|
Includes 5,081 restricted stock units converted from previously outstanding Andeavor awards, a portion of which may be forfeited under certain conditions.
|
(j)
|
Includes 23,912 restricted stock units held by all other executive officers, which were converted from previously outstanding Andeavor awards and a portion of which may be forfeited under certain conditions.
|
|
|
December 31, 2018
|
125
|
Security Ownership and Related Unitholder Matters
|
|
Amount and Nature of Beneficial Ownership
|
|||
Name and Address of Beneficial Owner
|
Number of Common Units
|
|
Percent of Common Units (a)
|
|
Marathon Petroleum Corporation (b)
539 South Main Street
Findlay, Ohio 45840
|
156,173,128
|
|
|
63.6%
|
Tortoise Capital Advisors, LLC (c)
11550 Ash Street, Suite 300
Leawood, KS 66211
|
14,650,854
|
|
|
6.0%
|
(a)
|
Based on 245,551,332 common units representing limited partner interests outstanding (including
156,173,128
common units held by MPC and its affiliates) on February 21, 2019.
|
(b)
|
The
156,173,128
common units are directly held by TLGP and Western Refining Southwest Inc., which are wholly owned indirect subsidiaries of MPC. As the ultimate parent company of each such entity, MPC may be deemed to beneficially own the units.
|
(c)
|
Based on Amendment No. 10 to a Schedule 13G/A filed with the SEC on February 12, 2019, Tortoise Capital Advisors has sole voting and dispositive power with respect to 369,483 common units, shared voting power with respect to 13,055,751 common units and shared dispositive power with respect to 14,281,371 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
|
379,318
|
|
|
—
|
|
|
943,466
|
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
379,318
|
|
|
—
|
|
|
943,466
|
|
|
(a)
|
Includes only phantom unit and time-based phantom unit awards that have been granted under the Andeavor Logistics LP 2011 Long-Term Incentive Plan, as amended and restated, each of which represents a right to receive, upon vesting and payout, a common unit. No unit options have been granted. These amounts do not include 24,922 phantom unit awards outstanding under the Western Refining Logistics, LP 2013 Long-Term Incentive Plan, each of which represents a right to receive, upon vesting and payout, a common unit.
|
(b)
|
There is no exercise price associated with the awards.
|
(c)
|
Reflects the common units available for issuance pursuant to the Andeavor Logistics LP 2011 Long-Term Incentive Plan. All of these shares may be available for awards other than options, warrants and rights. All granting authority under the Western Refining Logistics, LP 2013 Long-Term Incentive Plan was revoked at the time of the WNRL Merger.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
•
|
Payment of compensation to an executive officer or director of our general partner if the compensation is otherwise required to be disclosed in our filings with the SEC;
|
126
|
|
|
|
Certain Relationships and Related Transactions and Director Independence
|
|
•
|
Any transaction where the related person’s interest arises solely from the ownership of securities;
|
•
|
Any ongoing employment relationship provided that such employment relationship will be subject to initial review and approval; and
|
•
|
Any transaction between any of our subsidiaries or us, on the one hand, and our general partner or any of its affiliates, on the other hand; provided, however, that such transaction is approved consistent with our Partnership Agreement.
|
•
|
the benefits to us, including the business justification;
|
•
|
if the related person is a director or an immediate family member of a director, the impact on the director’s independence;
|
•
|
the availability of other sources for comparable products or services;
|
•
|
the terms of the transaction and the terms available to unrelated third parties or to employees generally; and
|
•
|
whether the transaction is consistent with our Code of Business Conduct.
|
|
|
December 31, 2018
|
127
|
Certain Relationships and Related Transactions and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Audit Fees (a)
|
$
|
2,220
|
|
|
$
|
2,369
|
|
Audit-Related Fees
|
—
|
|
|
—
|
|
||
Tax Fees
|
—
|
|
|
—
|
|
||
All Other Fees
|
—
|
|
|
—
|
|
||
Total
|
$
|
2,220
|
|
|
$
|
2,369
|
|
(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.
|
128
|
|
|
|
Exhibits and Financial Statement Schedules
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
|
Page
|
Report of Independent Registered Public Accounting Firm (Ernst & Young LLP)
|
|
Consolidated Statements of Operations - Years Ended December 31, 2018, 2017 and 2016
|
|
Consolidated Balance Sheets - December 31, 2018 and 2017
|
|
Consolidated Statements of Partners’ Equity - Years Ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Cash Flows - Years Ended December 31, 2018, 2017 and 2016
|
|
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
|
|
|
8-K
|
|
2.1
|
|
11/12/2015
|
|
|
|
|
|
|
|
|
|
|
2.2
|
|
|
8-K
|
|
2.1
|
|
7/7/2016
|
|
|
|
|
|
|
|
|
|
|
2.3
|
|
|
10-Q
|
|
2.2
|
|
11/2/2016
|
|
|
|
|
|
|
|
|
|
|
2.4
|
|
|
10-K
|
|
2.4
|
|
2/21/2017
|
|
|
|
|
|
|
|
|
|
|
‡
2.5
|
|
|
8-K
|
|
2.1
|
|
11/8/2017
|
|
|
|
|
|
|
|
|
|
|
2.6
|
|
|
8-K
|
|
2.1
|
|
10/20/2014
|
|
|
|
|
|
|
|
|
|
|
2.7
|
|
|
8-K
|
|
2.2
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
|
2.8
|
|
|
8-K
|
|
2.1
|
|
4/6/2015
|
|
|
|
|
|
|
|
|
|
|
‡
2.9
|
|
|
8-K
|
|
2.1
|
|
8/14/2017
|
|
|
|
|
|
|
|
|
|
|
‡
2.10
|
|
|
10-Q
|
|
2.3
|
|
5/7/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
129
|
Exhibits and Financial Statement Schedules
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
2.11
|
|
|
8-K
|
|
2.1
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
2.12
|
|
|
10-Q
|
|
2.5
|
|
11/7/2018
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
|
8-K
|
|
3.1
|
|
10/29/2018
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
|
8-K
|
|
3.1
|
|
12/1/2017
|
|
|
|
|
|
|
|
|
|
|
3.3
|
|
|
S-1
(File No. 333-171525)
|
|
3.3
|
|
1/4/2011
|
|
|
|
|
|
|
|
|
|
|
3.4
|
|
|
8-K
|
|
3.1
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
3.5
|
|
|
8-K
|
|
3.3
|
|
10/2/2018
|
|
|
|
|
|
|
|
|
|
|
3.6
|
|
|
8-K
|
|
3.4
|
|
10/2/2018
|
|
|
|
|
|
|
|
|
|
|
3.7
|
|
|
8-K
|
|
3.2
|
|
10/2/2018
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
|
8-K
|
|
4.1
|
|
10/29/2014
|
|
|
|
|
|
|
|
|
|
|
4.2
|
|
|
8-K
|
|
4.3
|
|
5/12/2016
|
|
|
|
|
|
|
|
|
|
|
4.3
|
|
|
8-K
|
|
4.1
|
|
12/2/2016
|
|
|
|
|
|
|
|
|
|
|
4.4
|
|
|
8-K
|
|
4.1
|
|
11/28/2017
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
|
8-K
|
|
10.1
|
|
2/3/2016
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
|
8-K
|
|
10.1
|
|
11/13/2017
|
|
|
|
|
|
|
|
|
|
|
10.3
|
|
|
8-K
|
|
10.2
|
|
2/3/2016
|
|
|
|
|
|
|
|
|
|
|
10.4
|
|
|
8-K
|
|
10.2
|
|
11/13/2017
|
|
|
|
|
|
|
|
|
|
|
10.5
|
|
|
8-K
|
|
10.1
|
|
4/6/2015
|
|
|
|
|
|
|
|
|
|
|
130
|
|
|
|
Exhibits and Financial Statement Schedules
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
10.6
|
|
|
8-K
|
|
10.2
|
|
10/31/2017
|
|
|
|
|
|
|
|
|
|
|
10.7
|
|
|
8-K
|
|
10.1
|
|
11/8/2017
|
|
|
|
|
|
|
|
|
|
|
10.8
|
|
|
8-K
|
|
10.3
|
|
10/31/2017
|
|
|
|
|
|
|
|
|
|
|
10.9
|
|
|
8-K
|
|
10.6
|
|
4/29/2011
|
|
|
|
|
|
|
|
|
|
|
10.10
|
|
|
8-K
|
|
10.1
|
|
4/1/2013
|
|
|
|
|
|
|
|
|
|
|
10.11
|
|
|
10-Q
|
|
10.2
|
|
5/8/2013
|
|
|
|
|
|
|
|
|
|
|
10.12
|
|
|
8-K
|
|
10.1
|
|
9/22/2016
|
|
|
|
|
|
|
|
|
|
|
10.13
|
|
|
8-K
|
|
10.10
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.14
|
|
|
10-K
|
|
10.21
|
|
2/29/2012
|
|
|
|
|
|
|
|
|
|
|
10.15
|
|
|
8-K
|
|
10.3
|
|
12/15/2014
|
|
|
|
|
|
|
|
|
|
|
10.16
|
|
|
8-K
|
|
10.10
|
|
4/29/2011
|
|
|
|
|
|
|
|
|
|
|
10.17
|
|
|
8-K
|
|
10.11
|
|
4/29/2011
|
|
|
|
|
|
|
|
|
|
|
10.18
|
|
|
8-K
|
|
10.4
|
|
4/3/2012
|
|
|
|
|
|
|
|
|
|
|
10.19
|
|
|
8-K
|
|
10.8
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.20
|
|
|
8-K
|
|
10.9
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.21
|
|
|
8-K
|
|
10.6
|
|
9/17/2012
|
|
|
|
|
|
|
|
|
|
|
10.22
|
|
|
8-K
|
|
10.11
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.23
|
|
|
8-K
|
|
10.13
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.24
|
|
|
8-K
|
|
10.7
|
|
9/17/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
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
|
10.25
|
|
|
8-K
|
|
10.4
|
|
11/15/2012
|
|
|
|
|
|
|
|
|
|
|
10.26
|
|
|
8-K
|
|
10.3
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
|
10.27
|
|
|
8-K
|
|
10.5
|
|
11/15/2012
|
|
|
|
|
|
|
|
|
|
|
10.28
|
|
|
8-K
|
|
10.6
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
|
10.29
|
|
|
8-K
|
|
10.7
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
|
10.30
|
|
|
8-K
|
|
10.6
|
|
11/15/2012
|
|
|
|
|
|
|
|
|
|
|
10.31
|
|
|
8-K
|
|
10.3
|
|
9/22/2016
|
|
|
|
|
|
|
|
|
|
|
10.32
|
|
|
8-K
|
|
10.5
|
|
6/3/2013
|
|
|
|
|
|
|
|
|
|
|
10.33
|
|
|
8-K
|
|
10.2
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.34
|
|
|
8-K
|
|
10.2
|
|
11/12/2015
|
|
|
|
|
|
|
|
|
|
|
10.35
|
|
|
8-K
|
|
10.3
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.36
|
|
|
8-K
|
|
10.4
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.37
|
|
|
8-K
|
|
10.5
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.38
|
|
|
8-K
|
|
10.6
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.39
|
|
|
8-K
|
|
10.7
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.40
|
|
|
8-K
|
|
10.12
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.41
|
|
|
8-K
|
|
10.3
|
|
11/12/2015
|
|
|
|
|
|
|
|
|
|
|
10.42
|
|
|
8-K
|
|
10.14
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.43
|
|
|
8-K
|
|
10.19
|
|
12/9/2013
|
|
|
|
|
|
|
|
|
|
|
10.44
|
|
|
8-K
|
|
2.1
|
|
12/10/2013
|
|
|
|
|
|
|
|
|
|
|
132
|
|
|
|
Exhibits and Financial Statement Schedules
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
10.45
|
|
|
8-K
|
|
2.2
|
|
12/10/2013
|
|
|
|
|
|
|
|
|
|
|
10.46
|
|
|
8-K
|
|
10.4
|
|
11/12/2015
|
|
|
|
|
|
|
|
|
|
|
10.47
|
|
|
10-Q
|
|
10.1
|
|
8/1/2014
|
|
|
|
|
|
|
|
|
|
|
10.48
|
|
|
8-K
|
|
10.1
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
|
10.49
|
|
|
8-K
|
|
10.2
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
|
10.50
|
|
|
10-K
|
|
10.71
|
|
2/25/2016
|
|
|
|
|
|
|
|
|
|
|
10.51
|
|
|
8-K
|
|
10.4
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
|
10.52
|
|
|
8-K
|
|
10.5
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
|
10.53
|
|
|
8-K
|
|
10.8
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
|
10.54
|
|
|
8-K
|
|
10.9
|
|
7/1/2014
|
|
|
|
|
|
|
|
|
|
|
10.55
|
|
|
8-K
|
|
10.1
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
|
10.56
|
|
|
8-K
|
|
10.2
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
|
10.57
|
|
|
8-K
|
|
10.3
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
|
10.58
|
|
|
8-K
|
|
10.6
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
|
10.59
|
|
|
8-K
|
|
10.9
|
|
12/8/2014
|
|
|
|
|
|
|
|
|
|
|
10.60
|
|
|
8-K
|
|
10.3
|
|
2/3/2016
|
|
|
|
|
|
|
|
|
|
|
10.61
|
|
|
10-K
|
|
10.82
|
|
2/25/2016
|
|
|
|
|
|
|
|
|
|
|
10.62
|
|
|
8-K
|
|
10.1
|
|
7/7/2016
|
|
|
|
|
|
|
|
|
|
|
10.63
|
|
|
8-K
|
|
10.3
|
|
7/7/2016
|
|
|
|
|
|
|
|
|
|
|
10.64
|
|
|
8-K
|
|
10.2
|
|
9/22/2016
|
|
|
|
|
|
|
|
|
|
|
10.65
|
|
|
8-K
|
|
10.2
|
|
11/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
133
|
Exhibits and Financial Statement Schedules
|
134
|
|
|
|
Exhibits and Financial Statement Schedules
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
10.83
|
|
|
8-K
|
|
10.4
|
|
11/8/2017
|
|
|
|
|
|
|
|
|
|
|
10.84
|
|
|
8-K
|
|
10.5
|
|
11/8/2017
|
|
|
|
|
|
|
|
|
|
|
10.85
|
|
|
8-K
|
|
10.6
|
|
11/8/2017
|
|
|
|
|
|
|
|
|
|
|
10.86
|
|
|
8-K
|
|
10.7
|
|
11/8/2017
|
|
|
|
|
|
|
|
|
|
|
10.87
|
|
|
8-K
|
|
10.8
|
|
11/8/2017
|
|
|
|
|
|
|
|
|
|
|
10.88
|
|
|
8-K
|
|
10.9
|
|
11/8/2017
|
|
|
|
|
|
|
|
|
|
|
†10.89
|
|
|
10-K
|
|
10.88
|
|
2/21/2018
|
|
|
|
|
|
|
|
|
|
|
†10.90
|
|
|
S-1
(File No. 333-171525)
|
|
10.17
|
|
1/4/2011
|
|
|
|
|
|
|
|
|
|
|
†10.91
|
|
|
10-K
|
|
10.90
|
|
2/21/2018
|
|
|
|
|
|
|
|
|
|
|
†10.92
|
|
|
8-K
|
|
10.1
|
|
2/22/2017
|
|
|
|
|
|
|
|
|
|
|
†10.93
|
|
|
8-K
|
|
10.2
|
|
2/22/2017
|
|
|
|
|
|
|
|
|
|
|
†10.94
|
|
|
8-K
|
|
10.1
|
|
2/18/2015
|
|
|
|
|
|
|
|
|
|
|
†10.95
|
|
|
8-K
|
|
10.2
|
|
2/18/2015
|
|
|
|
|
|
|
|
|
|
|
†10.96
|
|
|
8-K
|
|
10.1
|
|
2/11/2016
|
|
|
|
|
|
|
|
|
|
|
†10.97
|
|
|
8-K
|
|
10.2
|
|
2/11/2016
|
|
|
|
|
|
|
|
|
|
|
†10.98
|
|
|
8-K
|
|
10.1
|
|
7/23/2015
|
|
|
|
|
|
|
|
|
|
|
†10.99
|
|
|
10-K
|
|
10.15
|
|
2/24/2015
|
|
|
|
|
|
|
|
|
|
|
†10.100
|
|
|
10-K
|
|
10.20
|
|
2/25/2016
|
|
|
|
|
|
|
|
|
|
|
†10.101
|
|
|
10-K
|
|
10.100
|
|
2/21/2018
|
|
|
|
|
|
|
|
|
|
|
†10.102
|
|
|
10-K
|
|
10.101
|
|
2/21/2018
|
|
|
|
|
|
|
|
|
|
|
†10.103
|
|
|
8-K
|
|
10.1
|
|
12/15/2014
|
|
|
|
|
|
|
|
|
|
|
†10.104
|
|
|
8-K
|
|
10.3
|
|
8/4/2008
|
|
|
|
|
|
|
|
|
|
|
10.105
|
|
|
8-K
|
|
10.1
|
|
1/5/2018
|
|
|
|
|
|
|
|
|
|
|
10.106
|
|
|
8-K
|
|
10.2
|
|
1/5/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
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
|
10.107
|
|
|
8-K
|
|
10.1
|
|
2/23/2018
|
|
|
|
|
|
|
|
|
|
|
10.108
|
|
|
8-K
|
|
10.2
|
|
2/23/2018
|
|
|
|
|
|
|
|
|
|
|
10.109
|
|
|
8-K
|
|
10.2
|
|
2/23/2018
|
|
|
|
|
|
|
|
|
|
|
10.110
|
|
|
10-Q
|
|
10.1
|
|
5/8/2018
|
|
|
|
|
|
|
|
|
|
|
10.111
|
|
|
10-Q
|
|
10.1
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.112
|
|
|
10-Q
|
|
10.2
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.113
|
|
|
10-Q
|
|
10.3
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.114
|
|
|
10-Q
|
|
10.4
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.115
|
|
|
10-Q
|
|
10.5
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.116
|
|
|
10-Q
|
|
10.6
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.117
|
|
|
10-Q
|
|
10.7
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.118
|
|
|
10-Q
|
|
10.8
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.119
|
|
|
10-Q
|
|
10.9
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.120
|
|
|
10-Q
|
|
10.10
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.121
|
|
|
10-Q
|
|
10.11
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.122
|
|
|
10-Q
|
|
10.12
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.123
|
|
|
10-Q
|
|
10.13
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.124
|
|
|
10-Q
|
|
10.14
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.125
|
|
|
10-Q
|
|
10.15
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.126
|
|
|
10-Q
|
|
10.16
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
136
|
|
|
|
Exhibits and Financial Statement Schedules
|
|
|
|
|
Incorporated by Reference
(File No. 1-35143, unless otherwise indicated)
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
10.127
|
|
|
10-Q
|
|
10.17
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.128
|
|
|
10-Q
|
|
10.18
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.129
|
|
|
10-Q
|
|
10.19
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.130
|
|
|
10-Q
|
|
10.20
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.131
|
|
|
8-K
|
|
10.1
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.132
|
|
|
8-K
|
|
10.2
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.133
|
|
|
8-K
|
|
10.3
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.134
|
|
|
8-K
|
|
10.4
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.135
|
|
|
8-K
|
|
10.5
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.136
|
|
|
8-K
|
|
10.6
|
|
8/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.137
|
|
|
10-Q
|
|
10.4
|
|
11/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.138
|
|
|
10-Q
|
|
10.9
|
|
11/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.139
|
|
|
10-Q
|
|
10.10
|
|
11/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.140
|
|
|
10-Q
|
|
10.11
|
|
11/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.141
|
|
|
10-Q
|
|
10.2
|
|
11/7/2018
|
|
|
|
|
|
|
|
|
|
|
10.142
|
|
|
8-K
|
|
10.1
|
|
12/27/2018
|
|
|
|
|
|
|
|
|
|
|
10.143
|
|
|
8-K
|
|
10.2
|
|
12/27/2018
|
|
|
|
|
|
|
|
|
|
|
10.144
|
|
|
8-K
|
|
10.3
|
|
12/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
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
|
10.145
|
|
|
8-K
|
|
10.1
|
|
2/5/2019
|
|
|
|
|
|
|
|
|
|
|
10.146
|
|
|
8-K
|
|
10.2
|
|
2/5/2019
|
|
|
|
|
|
|
|
|
|
|
*10.147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*†10.148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*†10.149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*†10.150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*21.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*23.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*24.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*31.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*31.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*32.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*32.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**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
|
|
|
|
|
|
|
‡
|
Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Andeavor agrees to furnish a copy of such schedules, or any section thereof, to the SEC upon request.
|
Item 16.
|
Form 10-K Summary
|
138
|
|
|
|
Date:
|
February 28, 2019
|
|
Andeavor Logistics LP
|
|
|
|
|
|
|
|
|
|
By:
|
Tesoro Logistics GP, LLC
|
|
|
|
|
Its General Partner
|
|
|
|
|
|
|
|
|
By:
|
/s/ D. ANDREW WOODWARD
|
|
|
|
|
D. Andrew Woodward
|
|
|
|
|
Vice President, Finance
|
|
|
|
|
(Principal Financial Officer and Duly Authorized Signatory)
|
Signature
|
|
Title
|
|
|
|
/s/ GARY R. HEMINGER
|
|
Chairman of the Board of Directors and Chief Executive Officer
|
Gary R. Heminger
|
|
(Principal Executive Officer)
|
|
|
|
/s/ D. ANDREW WOODWARD
|
|
Vice President, Finance
|
D. Andrew Woodward
|
|
(Principal Financial Officer)
|
|
|
|
/s/ BLANE W. PEERY
|
|
Vice President, Accounting & Systems Integration
|
Blane W. Peery
|
|
(Principal Accounting Officer)
|
|
|
|
*
|
|
Director
|
Pamela K. M. Beall
|
|
|
|
|
|
*
|
|
Director
|
Sigmund L. Cornelius
|
|
|
|
|
|
*
|
|
Director
|
Ruth I. Dreessen
|
|
|
|
|
|
*
|
|
Director
|
Gregory J. Goff
|
|
|
|
|
|
*
|
|
Director
|
Timothy T. Griffith
|
|
|
|
|
|
*
|
|
Director
|
Michael J. Hennigan
|
|
|
|
|
|
*
|
|
Director
|
James H. Lamanna
|
|
|
|
|
|
*
|
|
Director
|
Frank M. Semple
|
|
|
|
|
|
*
|
|
Director
|
Donald C. Templin
|
|
|
|
|
December 31, 2018
|
139
|
|
|
|
|
By:
|
/s/ GARY R. HEMINGER
|
|
February 28, 2019
|
|
|
|
|
|
Gary R. Heminger
|
|
|
|
Attorney-in-Fact
|
|
|
140
|
|
|
|
1.
|
The preamble to the Omnibus Agreement is hereby amended to add MPCLP as a party to the Omnibus Agreement, and MPCLP, by its signature below, agrees to be bound by, and subject to, all of the covenants, terms and conditions of the Omnibus Agreement as though an original party thereto.
|
2.
|
Section 4.1 in the Omnibus Agreement is hereby amended and restated in its entirety as follows:
|
3.
|
Section 9.2 of the Omnibus Agreement is amended to add the following notice information at the end of the section:
|
4.
|
Section 9.3 of the Omnibus Agreement is amended to add “, MPCLP” after “Andeavor” in the first sentence of such section.
|
5.
|
Schedule 4.1(a) to the Omnibus Agreement is amended to replace “Andeavor” with “MPCLP” in the first clause.
|
6.
|
The provisions of Article IX of the Omnibus Agreement, as amended by this Amendment, are incorporated herein by reference and apply to the terms of this Amendment
mutatis mutandis
.
|
ANDEAVOR LLC
|
|
|
|
By:
|
/s/ Molly R. Benson
|
Name:
|
Molly R. Benson
|
Title:
|
Vice President and Secretary
|
|
|
TESORO REFINING & MARKETING COMPANY LLC
|
|
|
|
By:
|
/s/ Molly R. Benson
|
Name:
|
Molly R. Benson
|
Title:
|
Vice President and Secretary
|
|
|
TESORO COMPANIES, INC.
|
|
|
|
By:
|
/s/ Molly R. Benson
|
Name:
|
Molly R. Benson
|
Title:
|
Vice President and Secretary
|
|
|
TESORO ALASKA COMPANY LLC
|
|
|
|
By:
|
/s/ Molly R. Benson
|
Name:
|
Molly R. Benson
|
Title:
|
Vice President and Secretary
|
ANDEAVOR LOGISTICS LP
|
|
|
|
By:
|
Tesoro Logistics GP, LLC, its general partner
|
|
|
|
|
By:
|
/s/ Don J. Sorensen
|
|
Don J. Sorensen
|
|
President
|
|
|
TESORO LOGISTICS GP, LLC
|
|
|
|
By:
|
/s/ Don J. Sorensen
|
|
Don J. Sorensen
|
|
President
|
|
MARATHON PETROLEUM COMPANY LP
|
|
|
|
|
|
By:
|
/s/ Molly R. Benson
|
Name:
|
Molly R. Benson
|
Title:
|
Vice President, Chief Securities, Governance & Compliance Officer and Corporate Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
October 1, 2018
|
|
ANDEAVOR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Fiona Laird
|
|
|
|
|
|
|
|
|
Name:
|
Fiona Laird
|
|
|
|
|
|
|
|
|
Title:
|
Senior Vice President, Chief Human Resources Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMPLOYEE
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
September 26, 2018
|
|
By:
|
/s/ Steven Sterin
|
|
|
|
|
STEVEN STERIN
|
|
|
|
|
|
|
|
|
|
|
Date:
|
October 1, 2018
|
|
ANDEAVOR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Fiona Laird
|
|
|
|
|
|
|
|
|
Name:
|
Fiona Laird
|
|
|
|
|
|
|
|
|
Title:
|
Senior Vice President, Chief Human Resources Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMPLOYEE
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
September 26, 2018
|
|
By:
|
/s/ Don Sorensen
|
|
|
|
|
DON SORENSEN
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
TESORO LOGISTICS GP, LLC
Non-Management Director Compensation Package
|
||
Annual Board Retainer (Cash)
|
|
$90,000
|
Annual Director Deferred Phantom Unit Equity Award
|
|
$110,000
|
Total Annual Compensation Package – Exclusive of Chair Retainers
|
|
$200,000
|
|
|
|
Audit Committee Annual Chair Retainer (Cash)
|
|
$15,000
|
Conflicts Committee Annual Chair Retainer (Cash)
|
|
$15,000
|
Lead Director Annual Retainer (Cash)
|
|
$15,000
|
General Partner Board Observer Retainer (Cash)
|
|
$62,500
|
|
Name of Subsidiary
|
|
Jurisdiction of Organization/Incorporation
|
|
Andeavor Field Services LLC
|
|
Delaware
|
|
Andeavor Gathering I LLC
|
|
Delaware
|
|
Andeavor Logistics CD LLC
|
|
Delaware
|
*
|
Andeavor Logistics Rio Pipeline LLC
|
|
Delaware
|
|
Andeavor Midstream Partners GP LLC
|
|
Delaware
|
|
Andeavor Midstream Partners LP
|
|
Delaware
|
|
Andeavor Midstream Partners Operating LLC
|
|
Delaware
|
|
Andeavor MPL Holdings LLC
|
|
Delaware
|
|
Asphalt Terminals LLC
|
|
Delaware
|
|
Green River Processing, LLC
|
|
Delaware
|
*
|
Minnesota Pipe Line Company, LLC
|
|
Delaware
|
*
|
MPL Investments, Inc.
|
|
Delaware
|
*
|
PNAC, LLC
|
|
Nevada
|
*
|
Rendezvous Gas Services, L.L.C.
|
|
Wyoming
|
|
Rendezvous Pipeline Company, LLC
|
|
Colorado
|
|
Tesoro Alaska Pipeline Company LLC
|
|
Delaware
|
|
Tesoro Alaska Terminals LLC
|
|
Delaware
|
|
Tesoro Great Plains Gathering & Marketing LLC
|
|
Delaware
|
|
Tesoro Great Plains Midstream LLC
|
|
Delaware
|
|
Tesoro High Plains Pipeline Company LLC
|
|
Delaware
|
|
Tesoro Logistics Finance Corp.
|
|
Delaware
|
|
Tesoro Logistics Northwest Pipeline LLC
|
|
Delaware
|
|
Tesoro Logistics Operations LLC
|
|
Delaware
|
|
Tesoro Logistics Pipelines LLC
|
|
Delaware
|
|
Tesoro SoCal Pipeline Company LLC
|
|
Delaware
|
*
|
Three Rivers Gathering, LLC
|
|
Delaware
|
*
|
Uintah Basin Field Services, L.L.C.
|
|
Delaware
|
|
Western Refining Conan Gathering, LLC
|
|
Delaware
|
|
Western Refining Delaware Basin Storage, LLC
|
|
Delaware
|
|
Western Refining Logistics GP, LLC
|
|
Delaware
|
|
Western Refining Logistics, LP
|
|
Delaware
|
|
Western Refining Pipeline, LLC
|
|
New Mexico
|
|
Western Refining Product Transport, LLC
|
|
Delaware
|
|
Western Refining Terminals, LLC
|
|
Delaware
|
|
Western Refining Wholesale, LLC
|
|
Delaware
|
|
WNRL Energy GP, LLC
|
|
Delaware
|
|
WNRL Energy, LLC
|
|
Delaware
|
|
WNRL Finance Corp.
|
|
Delaware
|
|
|
|
|
*
|
Indicates a company that is not wholly owned directly or indirectly by Andeavor Logistics LP.
|
1)
|
Registration Statement (Form S-8 No. 333-173807) pertaining to the Tesoro Logistics LP 2011 Long-Term Incentive Plan
|
2)
|
Registration Statement (Form S-3 No. 333-211863) of Tesoro Logistics LP
|
3)
|
Registration Statement (Form S-8 No. 333-214395) pertaining to the Tesoro Logistics LP 2011 Long-Term Incentive Plan
|
4)
|
Registration Statement (Form S-8 No. 333-221229) pertaining to the Western Refining Logistics, LP 2013 Long-Term Incentive Plan
|
5)
|
Registration Statement (Form S-3 No. 333-221549) of Andeavor Logistics LP for the registration of common units representing limited partner interests, senior debt securities and subsidiary guarantees of senior debt securities
|
Signature
|
|
Title
|
|
|
|
/s/ Gary R. Heminger
|
|
Chairman of the Board of Directors and Chief Executive Officer of Tesoro Logistics GP, LLC (the general partner of Andeavor Logistics LP) (principal executive officer)
|
Gary R. Heminger
|
|
|
|
|
|
/s/ D. Andrew Woodward
|
|
Vice President, Finance of Tesoro Logistics GP, LLC (the general partner of Andeavor Logistics LP) (principal financial officer)
|
D. Andrew Woodward
|
|
|
|
|
|
/s/ Blane W. Peery
|
|
Vice President, Accounting and Systems Integration of Tesoro Logistics GP, LLC (the general partner of Andeavor Logistics LP) (principal accounting officer)
|
Blane W. Peery
|
|
|
|
|
|
/s/ Pamela K.M. Beall
|
|
Director of Tesoro Logistics GP, LLC (the general partner of Andeavor Logistics LP)
|
Pamela K.M. Beall
|
|
|
|
|
|
/s/ Sigmund L. Cornelius
|
|
Director of Tesoro Logistics GP, LLC (the general partner of Andeavor Logistics LP)
|
Sigmund L. Cornelius
|
|
|
|
|
|
/s/ Ruth I. Dreessen
|
|
Director of Tesoro Logistics GP, LLC (the general partner of Andeavor Logistics LP)
|
Ruth I. Dreessen
|
|
|
|
|
|
/s/ Gregory J. Goff
|
|
Director of Tesoro Logistics GP, LLC (the general partner of Andeavor Logistics LP)
|
Gregory J. Goff
|
|
|
|
|
|
/s/ Timothy T. Griffith
|
|
Director of Tesoro Logistics GP, LLC (the general partner of Andeavor Logistics LP)
|
Timothy T. Griffith
|
|
|
|
|
|
/s/ Michael J. Hennigan
|
|
Director of Tesoro Logistics GP, LLC (the general partner of Andeavor Logistics LP)
|
Michael J. Hennigan
|
|
|
|
|
|
/s/ James H. Lamanna
|
|
Director of Tesoro Logistics GP, LLC (the general partner of Andeavor Logistics LP)
|
James H. Lamanna
|
|
|
|
|
|
/s/ Frank M. Semple
|
|
Director of Tesoro Logistics GP, LLC (the general partner of Andeavor Logistics LP)
|
Frank M. Semple
|
|
|
|
|
|
/s/ Donald C. Templin
|
|
Director of Tesoro Logistics GP, LLC (the general partner of Andeavor Logistics LP)
|
Donald C. Templin
|
|
1.
|
I have reviewed this
Annual
Report on Form
10-K
of Andeavor 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 28, 2019
|
/s/ GARY R. HEMINGER
|
|
|
Gary R. Heminger
|
|
|
Chief Executive Officer of Tesoro Logistics GP, LLC
|
|
|
(the general partner of Andeavor Logistics LP)
|
1.
|
I have reviewed this
Annual
Report on Form
10-K
of Andeavor 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 28, 2019
|
/s/ D. ANDREW WOODWARD
|
|
|
D. Andrew Woodward
|
|
|
Principal Financial Officer of Tesoro Logistics GP, LLC
|
|
|
(the general partner of Andeavor 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/ GARY R. HEMINGER
|
|||
Gary R. Heminger
|
|||
Chief Executive Officer of Tesoro Logistics GP, LLC
|
|||
(the general partner of Andeavor Logistics LP)
|
|||
February 28, 2019
|
(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/ D. ANDREW WOODWARD
|
|||
D. Andrew Woodward
|
|||
Principal Financial Officer of Tesoro Logistics GP, LLC
|
|||
(the general partner of Andeavor Logistics LP)
|
|||
February 28, 2019
|