2012-11-15 14:31:54 -
SAN ANTONIO - November 15, 2012 - Tesoro Corporation (NYSE:TSO) and Tesoro
Logistics LP (NYSE:TLLP) today announced that Tesoro Corporation ("Tesoro")
closed the sale of the Anacortes Rail Unloading Facility owned by Tesoro's
subsidiary, Tesoro Refining and Marketing Company, to Tesoro Logistics LP (the
"Partnership") for total consideration of $180 million.
"The sale of the Anacortes rail facility marks Tesoro's third sale of assets to
the Partnership," said Greg Goff, Tesoro's President and Chief Executive Officer
and Tesoro Logistics' Chairman and Chief Executive Officer. "This transaction
highlights the ability of Tesoro to leverage TLLP in the growth and development
of its logistics business, allowing us to broaden our capability to deliver
price advantaged crude oil within the Tesoro refining system, while also
increasing cash distributions to the Partnership's unitholders."
The facility, located near Tesoro's Anacortes, Washington refinery, consists of
a four track offloading station capable of unloading 100 car unit trains and has
a permitted capacity of 50,000 barrels per day.
The purchase price of $180 million included cash of $162 million and Tesoro
Logistics equity valued at approximately $18 million. The cash consideration was
financed from available cash. The equity consideration was based on the average
daily closing price of common units for the 10 trading days prior to today, or
$44.65 per unit, with 77% in the form of common units and 23% in the form of
general partner units.
In connection with the closing of the transaction, Tesoro and the Partnership
entered into a throughput and use agreement for the rail unloading facility
assets. This agreement includes a minimum throughput commitment of 40 mbpd,
annual price escalations and ten year initial contract terms. Tesoro Logistics
expects that this contribution will result in an estimated $19 million of
additional annual logistics EBITDA.
TESORO LOGISTICS LP
RECONCILIATION OF FORECASTED EBITDA TO AMOUNTS UNDER US GAAP
(Unaudited, in millions)
Reconciliation of Forecasted EBITDA to Anacortes Rail Unloading
Forecasted Net Income: Facility
--------------------------------
Net income $ 16.0
Add: Depreciation and amortization expenses 3.0
Add: Interest and financing costs, net -
--------------------------------
Forecasted EBITDA (a) $ 19.0
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(a) We define EBITDA as net income before depreciation and amortization
expenses and net interest and financing costs. EBITDA should not be considered
as an alternative to net income in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP"). EBITDA has
important limitations as an analytical tool, because it excludes some, but not
all, items that affect net income. EBITDA is not a measure prescribed by U.S.
GAAP but is a supplemental financial measure that is used by management and may
be used by external users of our condensed combined consolidated financial
statements, such as industry analysts, investors, lenders and rating agencies to
assess:
* 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.
About Tesoro Corporation
Tesoro Corporation, a Fortune 150 company, is an independent refiner and
marketer of petroleum products. Tesoro, through its subsidiaries, operates
seven refineries in the western United States with a combined capacity of
approximately 675,000 barrels per day. Tesoro's retail-marketing system
includes nearly 1,390 branded retail stations, of which 595 are company operated
under the Tesoro®, Shell® and USA Gasoline(TM) brands.
About Tesoro Logistics LP
Tesoro Logistics LP, headquartered in San Antonio, Texas, is a fee-based,
growth-oriented Delaware limited partnership formed by Tesoro Corporation to
own, operate, develop and acquire crude oil and refined products logistics
assets.
This press release contains certain statements that are "forward-looking"
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 concerning our growth and
development of Tesoro's logistics businesses, capabilities to deliver price
advantaged crude oil, increases in Partnership distributions, and incremental
revenue and cash flow. For more information concerning factors that could affect
these statements, see the respective annual reports on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K for Tesoro Corporation and
Tesoro Logistics LP, filed with the Securities and Exchange Commission. We
undertake no obligation to publicly release the result of any revisions to any
such forward-looking statements that may be made to reflect events or
circumstances that occur, or which we become aware of, after the date hereof.
Contact:
Investors:
Louie Rubiola, Director, Investor Relations, (210) 626-4355
Media:
Tesoro Media Relations,
media@tsocorp.com, (210) 626-7702
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Tesoro Logistics LP via Thomson Reuters ONE
[HUG#1658033]
