Andeavor Logistics LP Reports Fourth-Quarter and Full-Year 2018 Results
- Reported full-year net earnings of
$600 million and EBITDA of$1.2 billion , an increase of $294 million and $252 million, respectively - Terminalling and Transportation: segment operating income increased by $101 million primarily due to the 2018 Drop Down and the SLC Core Pipeline System acquisition
- Gathering and Processing: executed on Permian growth strategy and grew gathered volumes by 74 mbpd year-over-year to 225 mbpd and began construction of additional gathering projects
- Full-year net cash from operating activities of
$1 .0 billion and DCF attributable to common unitholders of $907 million, resulting in 1.02x distribution coverage and 3.8x leverage
"In 2018
For the year, the company generated
Fourth Quarter Results
Three Months Ended |
Twelve Months Ended |
||||||||||||
($ in millions) |
2018 |
2017 (a) |
2018 (a) |
2017 (a) |
|||||||||
Net Earnings |
$ |
171 |
$ |
53 |
$ |
600 |
$ |
306 |
|||||
Segment Operating Income |
|||||||||||||
Terminalling and Transportation |
$ |
146 |
$ |
107 |
$ |
498 |
$ |
397 |
|||||
Gathering and Processing |
84 |
87 |
310 |
245 |
|||||||||
Wholesale |
5 |
6 |
27 |
15 |
|||||||||
EBITDA (b) |
$ |
333 |
$ |
281 |
$ |
1,201 |
$ |
949 |
|||||
Segment EBITDA (b) |
|||||||||||||
Terminalling and Transportation |
$ |
186 |
$ |
146 |
$ |
660 |
$ |
530 |
|||||
Gathering and Processing |
146 |
147 |
537 |
446 |
|||||||||
Wholesale |
7 |
8 |
38 |
20 |
|||||||||
Net Cash From Operating Activities |
$ |
310 |
$ |
163 |
$ |
1,029 |
$ |
687 |
|||||
Distributable Cash Flow Attributable to Common Unitholders (b) |
$ |
243 |
$ |
188 |
$ |
907 |
$ |
665 |
|||||
Total Distributions to be Paid to Common Unitholders |
$ |
238 |
$ |
204 |
$ |
890 |
$ |
692 |
|||||
Distribution Coverage Ratio (b) |
1.02x |
0.92x |
1.02x |
0.96x |
(a) |
Adjusted to include the historical results of the Predecessors. See "Items Impacting Comparability." |
(b) |
For more information on EBITDA, Segment EBITDA, Distributable Cash Flow Attributable to Common Unitholders and Distribution Coverage Ratio, see "Non-GAAP Measures." |
Segment Results
Terminalling and Transportation
Terminalling and Transportation segment operating income was $146 million for the fourth quarter 2018, an increase of $39 million from the prior year, and segment EBITDA was $186 million, an increase of $40 million from the prior year. The year-over-year increase was primarily attributable to contributions from the 2018 Drop Down. The 2018 Drop Down contributed $23 million of segment operating income and $29 million of segment EBITDA in the Terminalling and Transportation segment during the quarter. Terminalling and Transportation segment operating income was $498 million for the full year 2018, an increase of $101 million from last year, and segment EBITDA was $660 million, an increase of $130 million from the prior year.
Gathering and Processing
Gathering and Processing segment operating income was
Wholesale
Wholesale segment operating income was $5 million for the fourth quarter 2018, a decrease of $1 million from the prior year, and segment EBITDA for the fourth quarter 2018 was $7 million, a decrease of $1 million from the prior year. This year-over-year decrease was driven by weaker unbranded wholesale pricing impacting margins with retailers in the
Balance Sheet and Cash Flow
Net cash from operating activities was $310 million in the fourth quarter 2018, and distributable cash flow attributable to common unitholders for the fourth quarter was $243 million. Net cash from operating activities was
Net capital expenditures for the fourth quarter 2018 were $199 million, which included $181 million of net growth investments and $18 million of net maintenance capital.
2019 and 2020 Financial Outlook
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This press release contains forward-looking statements within the meaning of federal securities laws regarding
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Non-GAAP Measures
As a supplement to our financial information presented in accordance with accounting principles generally accepted in
- Financial non-GAAP measures:
- EBITDA - U.S. GAAP-based net earnings before interest, income taxes, and depreciation and amortization expense;
- Distributable Cash Flow - U.S. GAAP-based net cash flow from EBITDA adjusted for amounts spent on maintenance capital net of reimbursements and other adjustments;
- Pro forma LTM EBITDA - Last twelve months ("LTM") of our EBITDA adjusted for pro forma contributions from acquisitions; and
- Segment EBITDA - A segment's U.S. GAAP-based operating income before depreciation and amortization expense plus equity in earnings (loss) of equity method investments and other income (expense), net.
- Liquidity non-GAAP measures:
- Distributable Cash Flow - U.S. GAAP-based net cash flow from operating activities adjusted for changes in working capital, amounts spent on maintenance capital net of reimbursements and other adjustments not expected to settle in cash;
- Distributable Cash Flow Attributable to Common Unitholders - Distributable Cash Flow minus distributions associated with the preferred units;
- Distribution Coverage Ratio - Distributable Cash Flow Attributable to Common Unitholders divided by total distributions to be paid to common unitholders for the reporting period; and
- Leverage Ratio - Total debt divided by Pro forma LTM EBITDA.
- Operating performance non-GAAP measure:
- Average Margin on Natural Gas Liquids ("NGLs") Sales per Barrel - NGL sales revenues minus amounts recognized as NGL expense divided by our NGL sales volumes in barrels; and
- Average Wholesale Fuel Sales Margin per Gallon - Wholesale fuel revenues minus wholesale's cost of fuel divided by our total wholesale fuel sales volumes in gallons.
We present these measures because we believe they may help investors, analysts, lenders and ratings agencies analyze our results of operations and liquidity in conjunction with our U.S. GAAP results, including but not limited to:
- 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.
Management also uses these measures to assess internal performance, and we believe they may provide meaningful supplemental information to the users of our financial statements. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings, operating income and net cash from operating activities. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. See "Reconciliation of Amounts Reported Under U.S. GAAP," "Segment Reconciliation of Amounts Reported Under U.S. GAAP," "Average Margin on NGL Sales per Barrel" and "Average Fuel Sales Margin per Gallon" for reconciliations between non-GAAP measures and their most directly comparable U.S. GAAP measures.
Items Impacting Comparability
The Partnership's results of operations may not be comparable to the historical results of operations for the reasons described below.
Acquisitions and Mergers
Other than WNRL and certain assets acquired from the 2018 Drop Down, our Predecessors did not record revenues with Andeavor and our Predecessors recorded general and administrative expenses and financed operations differently than the Partnership. As previously mentioned, on
On November 8, 2017, we acquired the Anacortes Logistics Assets from a subsidiary of Andeavor for total consideration of $445 million. The Anacortes Logistics Assets include crude oil, feedstock and refined products storage at
Effective
The closing of the WNRL Merger was conditioned upon, among other things, the adoption and effectiveness of the Second Amended and Restated Agreement of Limited Partnership of
Accounting Standard Adoption
Due to the adoption of Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers" and the associated subsequent amendments (collectively, "ASC 606") on
Andeavor Logistics LP |
|||||||
Condensed Consolidated Balance Sheets (Unaudited) (In millions) |
|||||||
December 31, |
December 31, |
||||||
Assets |
|||||||
Current Assets |
|||||||
Cash and cash equivalents |
$ |
10 |
$ |
75 |
|||
Receivables, net of allowance for doubtful accounts |
474 |
483 |
|||||
Prepayments and other current assets |
79 |
27 |
|||||
Total Current Assets |
563 |
585 |
|||||
Property, Plant and Equipment, Net |
6,845 |
6,249 |
|||||
Other Noncurrent Assets, Net |
2,887 |
2,671 |
|||||
Total Assets |
$ |
10,295 |
$ |
9,505 |
|||
Liabilities and Equity |
|||||||
Current Liabilities |
|||||||
Accounts payable |
$ |
466 |
$ |
393 |
|||
Accrued interest and financing costs |
41 |
40 |
|||||
Current maturities of debt |
504 |
1 |
|||||
Other current liabilities |
81 |
84 |
|||||
Total Current Liabilities |
1,092 |
518 |
|||||
Debt, Net of Unamortized Issuance Costs |
4,460 |
4,127 |
|||||
Other Noncurrent Liabilities |
69 |
54 |
|||||
Equity |
4,674 |
4,806 |
|||||
Total Liabilities and Equity |
$ |
10,295 |
$ |
9,505 |
Andeavor Logistics LP |
|||||||||||||||
Results of Operations (Unaudited) (In millions, except per unit amounts) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2018 |
2017 (a) |
2018 (a) |
2017 (a) |
||||||||||||
Revenues |
|||||||||||||||
Terminalling and Transportation |
$ |
292 |
$ |
239 |
$ |
1,054 |
$ |
838 |
|||||||
Gathering and Processing |
318 |
333 |
1,263 |
1,129 |
|||||||||||
Wholesale (c) |
17 |
542 |
79 |
1,282 |
|||||||||||
Intersegment revenues |
(4) |
— |
(16) |
— |
|||||||||||
Total Revenues |
623 |
1,114 |
2,380 |
3,249 |
|||||||||||
Costs and Expenses |
|||||||||||||||
Cost of fuel and other (excluding items shown separately |
— |
528 |
— |
1,244 |
|||||||||||
NGL expense (excluding items shown separately below) |
40 |
86 |
206 |
265 |
|||||||||||
Operating expenses (excluding depreciation and amortization) |
227 |
179 |
885 |
691 |
|||||||||||
General and administrative expenses |
29 |
51 |
121 |
158 |
|||||||||||
Depreciation and amortization expenses |
101 |
91 |
368 |
313 |
|||||||||||
(Gain) loss on asset disposals and impairments |
2 |
— |
4 |
(25) |
|||||||||||
Operating Income |
224 |
179 |
796 |
603 |
|||||||||||
Interest and financing costs, net |
(61) |
(137) |
(233) |
(330) |
|||||||||||
Equity in earnings of equity method investments |
6 |
9 |
31 |
22 |
|||||||||||
Other income, net |
2 |
2 |
6 |
11 |
|||||||||||
Net Earnings |
$ |
171 |
$ |
53 |
$ |
600 |
$ |
306 |
|||||||
Loss (earnings) attributable to Predecessors |
$ |
— |
$ |
(3) |
$ |
28 |
$ |
43 |
|||||||
Net Earnings Attributable to Partners |
171 |
50 |
628 |
349 |
|||||||||||
Preferred unitholders' interest in net earnings |
(10) |
(3) |
(44) |
(3) |
|||||||||||
General partner's interest in net earnings, including incentive |
— |
— |
— |
(79) |
|||||||||||
Limited Partners' Interest in Net Earnings |
$ |
161 |
$ |
47 |
$ |
584 |
$ |
267 |
|||||||
Net Earnings per Limited Partner Unit: |
|||||||||||||||
Common - basic |
$ |
0.66 |
$ |
0.25 |
$ |
2.57 |
$ |
2.11 |
|||||||
Common - diluted |
$ |
0.66 |
$ |
0.25 |
$ |
2.57 |
$ |
2.11 |
|||||||
Weighted Average Limited Partner Units Outstanding: |
|||||||||||||||
Common units - basic |
245.5 |
182.6 |
228.7 |
126.0 |
|||||||||||
Common units - diluted |
245.7 |
182.7 |
228.9 |
126.1 |
|||||||||||
Cash Distributions Paid per Unit |
$ |
1.0300 |
$ |
0.9850 |
$ |
4.0750 |
$ |
3.8062 |
(c) |
The presentation of wholesale fuel sales and cost of fuel and other was impacted by adoption of the new revenue recognition accounting standard on January 1, 2018. Beginning January 1, 2018 in connection with the accounting standard adoption, the revenues and costs associated with our fuel purchase and supply arrangements were presented on a net basis versus gross basis in prior years. |
Andeavor Logistics LP |
|||||||||||||||
Selected Operating Segment Data (Unaudited) (In millions) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2018 |
2017 (a) |
2018 (a) |
2017 (a) |
||||||||||||
Earnings Before Income Taxes |
|||||||||||||||
Terminalling and Transportation |
$ |
146 |
$ |
107 |
$ |
498 |
$ |
397 |
|||||||
Gathering and Processing |
84 |
87 |
310 |
245 |
|||||||||||
Wholesale |
5 |
6 |
27 |
15 |
|||||||||||
Total Segment Operating Income |
235 |
200 |
835 |
657 |
|||||||||||
Unallocated general and administrative expenses |
(11) |
(21) |
(39) |
(54) |
|||||||||||
Operating Income |
224 |
179 |
796 |
603 |
|||||||||||
Interest and financing costs, net |
(61) |
(137) |
(233) |
(330) |
|||||||||||
Equity in earnings of equity method investments |
6 |
9 |
31 |
22 |
|||||||||||
Other income, net |
2 |
2 |
6 |
11 |
|||||||||||
Earnings Before Income Taxes |
$ |
171 |
$ |
53 |
$ |
600 |
$ |
306 |
|||||||
Depreciation and Amortization Expenses |
|||||||||||||||
Terminalling and Transportation |
$ |
40 |
$ |
32 |
$ |
144 |
$ |
117 |
|||||||
Gathering and Processing |
59 |
57 |
213 |
191 |
|||||||||||
Wholesale |
2 |
2 |
11 |
5 |
|||||||||||
Total Depreciation and Amortization Expenses |
$ |
101 |
$ |
91 |
$ |
368 |
$ |
313 |
|||||||
Segment EBITDA (d) |
|||||||||||||||
Terminalling and Transportation |
$ |
186 |
$ |
146 |
$ |
660 |
$ |
530 |
|||||||
Gathering and Processing |
146 |
147 |
537 |
446 |
|||||||||||
Wholesale |
7 |
8 |
38 |
20 |
|||||||||||
Total Segment EBITDA |
$ |
339 |
$ |
301 |
$ |
1,235 |
$ |
996 |
|||||||
Capital Expenditures |
|||||||||||||||
Terminalling and Transportation |
$ |
50 |
$ |
61 |
$ |
205 |
$ |
188 |
|||||||
Gathering and Processing |
177 |
90 |
545 |
175 |
|||||||||||
Wholesale |
— |
— |
1 |
— |
|||||||||||
Total Capital Expenditures |
$ |
227 |
$ |
151 |
$ |
751 |
$ |
363 |
(d) |
See "Non-GAAP Reconciliations" section below for further information regarding this non-GAAP measure. |
Andeavor Logistics LP |
|||||||||||||||
Components of Cash Flows (Unaudited) (In millions) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2018 |
2017 (a) |
2018 (a) |
2017 (a) |
||||||||||||
Cash Flows From (Used In) |
|||||||||||||||
Net earnings |
$ |
171 |
$ |
53 |
$ |
600 |
$ |
306 |
|||||||
Depreciation and amortization expenses |
101 |
91 |
368 |
313 |
|||||||||||
Changes in assets and liabilities |
24 |
(65) |
17 |
(14) |
|||||||||||
Other operating activities |
14 |
84 |
44 |
82 |
|||||||||||
Net Cash Flows from Operating Activities |
310 |
163 |
1,029 |
687 |
|||||||||||
Investing Activities |
(236) |
(129) |
(1,181) |
(1,533) |
|||||||||||
Financing Activities |
(94) |
3 |
87 |
233 |
|||||||||||
Increase (Decrease) in Cash and Cash Equivalents |
$ |
(20) |
$ |
37 |
$ |
(65) |
$ |
(613) |
Andeavor Logistics LP |
|||||||||||||||
Selected Operating Segment Data (Unaudited) |
|||||||||||||||
(In millions, except volumes and revenue per barrel) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2018 |
2017 (a) |
2018 (a) |
2017 (a) |
||||||||||||
Terminalling and Transportation Segment |
|||||||||||||||
Revenues |
|||||||||||||||
Terminalling |
$ |
245 |
$ |
197 |
$ |
888 |
$ |
690 |
|||||||
Pipeline transportation |
45 |
33 |
160 |
130 |
|||||||||||
Other revenues |
2 |
9 |
6 |
18 |
|||||||||||
Total Revenues |
292 |
239 |
1,054 |
838 |
|||||||||||
Costs and Expenses |
|||||||||||||||
Operating expenses (e) |
94 |
86 |
373 |
302 |
|||||||||||
Depreciation and amortization expenses |
40 |
32 |
144 |
117 |
|||||||||||
General and administrative expenses |
11 |
14 |
38 |
47 |
|||||||||||
Loss (gain) on asset disposals and impairments |
1 |
— |
1 |
(25) |
|||||||||||
Terminalling and Transportation Segment Operating Income |
$ |
146 |
$ |
107 |
$ |
498 |
$ |
397 |
|||||||
Volumes |
|||||||||||||||
Terminalling throughput (Mbpd) |
1,667 |
1,702 |
1,759 |
1,452 |
|||||||||||
Average terminalling revenue per barrel (f) |
$ |
1.61 |
$ |
1.26 |
$ |
1.38 |
$ |
1.30 |
|||||||
Pipeline transportation throughput (Mbpd) |
1,067 |
946 |
1,012 |
902 |
|||||||||||
Average pipeline transportation revenue per barrel (f) |
$ |
0.46 |
$ |
0.39 |
$ |
0.43 |
$ |
0.40 |
(e) |
Operating expenses include an imbalance settlement gain of $2 million and $5 million for the three and twelve months ended December 31, 2017, respectively. There were no gains for the three and twelve months ended December 31, 2018. |
||
(f) |
Management uses average margin per barrel, average revenue per Million British thermal units ("MMBtu"), average revenue per barrel and fuel sales per gallon to evaluate performance and compare profitability to other companies in the industry. |
||
-
|
Average terminalling revenue per barrel—calculated as total terminalling revenue divided by terminalling throughput presented in thousands of barrels per day ("Mbpd") multiplied by 1,000 and multiplied by the number of days in the period (92 days for both the three months ended December 31, 2018 and 2017 and 365 days for both the twelve months ended December 31, 2018 and 2017); |
||
- |
Average pipeline transportation revenue per barrel—calculated as total pipeline transportation revenue divided by pipeline transportation throughput presented in Mbpd multiplied by 1,000 and multiplied by the number of days in the period as outlined above; |
||
- |
Average margin on NGL sales per barrel—calculated as the difference between the NGL sales revenues and the amounts recognized as NGL expense divided by our NGL sales volumes presented in Mbpd multiplied by 1,000 and multiplied by the number of days in the period as outlined above; |
||
- |
Average gas gathering and processing revenue per MMBtu—calculated as total gathering and processing fee-based revenue divided by gas gathering throughput presented in thousands of MMBtu per day ("MMBtu/d") multiplied by 1,000 and multiplied by the number of days in the period as outlined above; |
||
- |
Average crude oil and water gathering revenue per barrel—calculated as total crude oil and water gathering fee-based revenue divided by crude oil and water gathering throughput presented in Mbpd multiplied by 1,000 and multiplied by the number of days in the period as outlined above; and |
||
- |
Wholesale fuel sales per gallon - calculated as wholesale fuel revenues divided by our total wholesale fuel sales volume in gallons. |
||
There are a variety of ways to calculate these measures; other companies may calculate these in a different way. Amounts may not recalculate due to rounding of dollar and volume information. |
Andeavor Logistics LP |
|||||||||||||||
Selected Operating Segment Data (Unaudited) |
|||||||||||||||
(In millions, except volumes, margin per barrel, revenue per barrel and revenue per MMBtu) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2018 |
2017 (a) |
2018 (a) |
2017 (a) |
||||||||||||
Gathering and Processing Segment |
|||||||||||||||
Revenues |
|||||||||||||||
NGL sales (g) |
$ |
100 |
$ |
115 |
$ |
436 |
$ |
369 |
|||||||
Gas gathering and processing |
81 |
81 |
330 |
333 |
|||||||||||
Crude oil and water gathering |
95 |
92 |
336 |
262 |
|||||||||||
Pass-thru and other (h) |
42 |
45 |
161 |
165 |
|||||||||||
Total Revenues |
318 |
333 |
1,263 |
1,129 |
|||||||||||
Costs and Expenses |
|||||||||||||||
NGL expense (excluding items shown separately below) (g) |
40 |
86 |
206 |
265 |
|||||||||||
Operating expenses (i) |
128 |
90 |
489 |
374 |
|||||||||||
Depreciation and amortization expenses |
59 |
57 |
213 |
191 |
|||||||||||
General and administrative expenses |
6 |
13 |
42 |
54 |
|||||||||||
Loss on asset disposals and impairments |
1 |
— |
3 |
— |
|||||||||||
Gathering and Processing Segment Operating Income |
$ |
84 |
$ |
87 |
$ |
310 |
$ |
245 |
|||||||
Volumes |
|||||||||||||||
NGL sales (Mbpd) (g) |
11.4 |
11.4 |
10.4 |
8.3 |
|||||||||||
Average margin on NGL sales per barrel (d)(f)(g)(h) |
$ |
54.77 |
$ |
28.10 |
$ |
59.92 |
$ |
34.77 |
|||||||
Gas gathering and processing throughput (thousands of |
716 |
988 |
763 |
963 |
|||||||||||
Average gas gathering and processing revenue per MMBtu |
$ |
1.24 |
$ |
0.89 |
$ |
1.19 |
$ |
0.95 |
|||||||
Crude oil and water gathering volume (Mbpd) |
522 |
444 |
450 |
385 |
|||||||||||
Average crude oil and water gathering revenue per barrel (f) |
$ |
1.97 |
$ |
2.25 |
$ |
2.05 |
$ |
1.86 |
|||||||
(g) |
We had 24.6 Mbpd and 24.4 Mbpd of NGL sales under percent of proceeds ("POP") and keep-whole arrangements, for the three and twelve months ended December 31, 2018, respectively, and 25.6 Mbpd and 22.2 Mbpd for the three and twelve months ended December 31, 2017, respectively, of which we retained 11.4 Mbpd, 10.4 Mbpd, 11.4 Mbpd and 8.3 Mbpd, respectively. The difference between gross sales barrels and barrels retained is reflected in NGL expense resulting from the gross presentation required for the POP arrangements. Volumes represent barrels sold under our keep-whole arrangements, net barrels retained under our POP arrangements and other associated products. |
(h) |
Included in NGL expense for the twelve months ended December 31, 2017 were approximately $2 million of crude costs related to crude oil volumes obtained in connection with the acquisition of our North Dakota gathering and processing assets. 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. |
(i) |
Operating expenses include an imbalance settlement gain of $4 million and $8 million for the three and twelve months ended December 31, 2017, respectively. There were no gains for the three and twelve months ended December 31, 2018. |
(j) |
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 was 193 thousand MMBtu/d and 176 thousand MMBtu/d for the three and twelve months ended December 31, 2018, respectively, now being used internally and not reported in the throughput volumes used to calculate our average gas gathering and processing revenue per MMBtu. |
Andeavor Logistics LP |
|||||||||||||||
Selected Operating Segment Data (Unaudited) |
|||||||||||||||
(In millions, except per gallon) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2018 |
2017 (a) |
2018 |
2017 (a) |
||||||||||||
Wholesale Segment |
|||||||||||||||
Revenues |
|||||||||||||||
Fuel sales (c) |
$ |
9 |
$ |
537 |
$ |
46 |
$ |
1,267 |
|||||||
Other wholesale |
8 |
5 |
33 |
15 |
|||||||||||
Total Revenues |
17 |
542 |
79 |
1,282 |
|||||||||||
Costs and Expenses |
|||||||||||||||
Cost of fuel and other (excluding items shown separately |
— |
528 |
— |
1,244 |
|||||||||||
Operating expenses |
9 |
3 |
39 |
15 |
|||||||||||
Depreciation and amortization expenses |
2 |
2 |
11 |
5 |
|||||||||||
General and administrative expenses |
1 |
3 |
2 |
3 |
|||||||||||
Wholesale Operating Income |
$ |
5 |
$ |
6 |
$ |
27 |
15 |
||||||||
Volumes |
|||||||||||||||
Fuel sales volumes (millions of gallons) |
314 |
292 |
1,218 |
722 |
|||||||||||
Wholesale fuel sales per gallon (f) |
3.0 |
¢ |
3.8 |
¢ |
|||||||||||
Average wholesale fuel sales margin per gallon (c)(d) |
3.0 |
¢ |
3.0 |
¢ |
Non-GAAP Reconciliations
Andeavor Logistics LP |
|||||||||||||||
Reconciliation of Amounts Reported Under U.S. GAAP (Unaudited) |
|||||||||||||||
(In millions, except ratios) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2018 |
2017 (a) |
2018 (a) |
2017 (a) |
||||||||||||
Reconciliation of Net Earnings to EBITDA |
|||||||||||||||
Net earnings |
$ |
171 |
$ |
53 |
$ |
600 |
$ |
306 |
|||||||
Depreciation and amortization expenses |
101 |
91 |
368 |
313 |
|||||||||||
Interest and financing costs, net of capitalized interest |
61 |
137 |
233 |
330 |
|||||||||||
EBITDA |
333 |
281 |
1,201 |
949 |
|||||||||||
Predecessor impact |
— |
(12) |
12 |
8 |
|||||||||||
Maintenance capital expenditures (k) |
(41) |
(39) |
(111) |
(119) |
|||||||||||
Reimbursement for maintenance capital expenditures (k) |
14 |
9 |
33 |
31 |
|||||||||||
Changes in deferred revenue (l) |
(5) |
(2) |
3 |
3 |
|||||||||||
Net (gain) loss on asset disposals and impairments |
2 |
— |
4 |
(25) |
|||||||||||
Interest and financing costs, net |
(61) |
(137) |
(233) |
(330) |
|||||||||||
Proceeds from sale of assets |
— |
1 |
— |
29 |
|||||||||||
Amortized debt costs |
2 |
77 |
10 |
85 |
|||||||||||
Adjustments for equity method investments |
4 |
3 |
17 |
18 |
|||||||||||
Other (m) |
5 |
10 |
12 |
19 |
|||||||||||
Distributable Cash Flow |
253 |
191 |
948 |
668 |
|||||||||||
Less: Preferred unit distributions (n) |
(10) |
(3) |
(41) |
(3) |
|||||||||||
Distributable Cash Flow Attributable to Common |
$ |
243 |
$ |
188 |
$ |
907 |
$ |
665 |
|||||||
(k) |
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. |
(l) |
Included in changes in deferred revenue are adjustments to remove the impact of the adoption of the new revenue recognition accounting standard 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, which are predominantly recognized annually in the third quarter based on current contract terms. |
(m) |
Other includes transaction costs related to recent acquisitions, settlement expenses and unit-based compensation expense. |
(n) |
Represents the cash distributions earned by the Preferred Units for the three and twelve months ended December 31, 2018 assuming a distribution is declared by the Board of Directors. Cash distributions to be paid to holders of the Preferred Units are not available to common unitholders. |
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2018 |
2017 (a) |
2018 (a) |
2017 (a) |
||||||||||||
Reconciliation of Net Cash from Operating Activities to |
|||||||||||||||
Net cash from operating activities |
$ |
310 |
$ |
163 |
$ |
1,029 |
$ |
687 |
|||||||
Changes in assets and liabilities |
(24) |
65 |
(17) |
14 |
|||||||||||
Predecessors impact |
— |
(12) |
12 |
8 |
|||||||||||
Maintenance capital expenditures (k) |
(41) |
(39) |
(111) |
(119) |
|||||||||||
Reimbursement for maintenance capital expenditures (k) |
14 |
9 |
33 |
31 |
|||||||||||
Adjustments for equity method investments |
(1) |
(2) |
(4) |
3 |
|||||||||||
Proceeds from sale of assets |
— |
1 |
— |
29 |
|||||||||||
Changes in deferred revenue (l) |
(5) |
(2) |
3 |
3 |
|||||||||||
Other (o) |
— |
8 |
3 |
12 |
|||||||||||
Distributable Cash Flow |
253 |
191 |
948 |
668 |
|||||||||||
Less: Preferred unit distributions (n) |
(10) |
(3) |
(41) |
(3) |
|||||||||||
Distributable Cash Flow Attributable to Common |
$ |
243 |
$ |
188 |
$ |
907 |
$ |
665 |
|||||||
(o) |
Other includes transaction costs related to recent acquisitions and settlement expenses. |
Three Months Ended |
Twelve Months Ended |
|||||||||||||
2018 |
2017 (a) |
2018 (a) |
2017 (a) |
|||||||||||
Distributions |
||||||||||||||
Limited partner's distributions on common units |
$ |
238 |
$ |
204 |
$ |
890 |
$ |
611 |
||||||
General partner's distributions including IDRs |
— |
— |
— |
81 |
||||||||||
Distributions on preferred units |
10 |
3 |
41 |
3 |
||||||||||
Total Distributions to be Paid |
248 |
207 |
931 |
695 |
||||||||||
Less: Distributions on preferred units |
(10) |
(3) |
(41) |
(3) |
||||||||||
Total Distributions to be Paid to Common Unitholders |
$ |
238 |
$ |
204 |
$ |
890 |
$ |
692 |
||||||
Distributable Cash Flow Attributable to Common |
$ |
243 |
$ |
188 |
$ |
907 |
$ |
665 |
||||||
Distribution Coverage Ratio |
1.02x |
0.92x |
1.02x |
0.96x |
Andeavor Logistics LP |
|||||||||||||||
Segment Reconciliation of Amounts Reported Under U.S. GAAP (Unaudited) |
|||||||||||||||
(In millions) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2018 |
2017 (a) |
2018 (a) |
2017 (a) |
||||||||||||
Reconciliation of Segment Operating Income to Segment |
|||||||||||||||
Terminalling and Transportation segment operating income |
$ |
146 |
$ |
107 |
$ |
498 |
$ |
397 |
|||||||
Depreciation and amortization expenses |
40 |
32 |
144 |
117 |
|||||||||||
Equity in earnings of equity method investments |
3 |
6 |
17 |
12 |
|||||||||||
Other income (expense), net |
(3) |
1 |
1 |
4 |
|||||||||||
Terminalling and Transportation Segment EBITDA |
$ |
186 |
$ |
146 |
$ |
660 |
$ |
530 |
|||||||
Gathering and Processing segment operating income |
$ |
84 |
$ |
87 |
$ |
310 |
$ |
245 |
|||||||
Depreciation and amortization expenses |
59 |
57 |
213 |
191 |
|||||||||||
Equity in earnings of equity method investments |
3 |
3 |
14 |
10 |
|||||||||||
Gathering and Processing Segment EBITDA |
$ |
146 |
$ |
147 |
$ |
537 |
$ |
446 |
|||||||
Wholesale segment operating income |
$ |
5 |
$ |
6 |
$ |
27 |
$ |
15 |
|||||||
Depreciation and amortization expenses |
2 |
2 |
11 |
5 |
|||||||||||
Wholesale Segment EBITDA |
$ |
7 |
$ |
8 |
$ |
38 |
$ |
20 |
Andeavor Logistics LP |
|||||||||||||||
Average Margin on NGL Sales per Barrel (Unaudited) |
|||||||||||||||
(In millions, except days and per barrel amounts) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2018 |
2017 (a) |
2018 (a) |
2017 (a) |
||||||||||||
Segment Operating Income |
$ |
84 |
$ |
87 |
$ |
310 |
$ |
245 |
|||||||
Add back: |
|||||||||||||||
Operating expenses |
128 |
90 |
489 |
374 |
|||||||||||
General and administrative expenses |
6 |
13 |
42 |
54 |
|||||||||||
Depreciation and amortization expenses |
59 |
57 |
213 |
191 |
|||||||||||
Loss on asset disposals and impairments |
1 |
— |
3 |
— |
|||||||||||
Other commodity purchases (h) |
— |
— |
— |
2 |
|||||||||||
Subtract: |
|||||||||||||||
Gas gathering and processing revenues |
(81) |
(81) |
(330) |
(333) |
|||||||||||
Crude oil gathering revenues |
(95) |
(92) |
(336) |
(262) |
|||||||||||
Pass-thru and other revenues |
(42) |
(45) |
(161) |
(165) |
|||||||||||
Margin on NGL Sales |
$ |
60 |
$ |
29 |
$ |
230 |
$ |
106 |
|||||||
Divided by Total Volumes for the Period: |
|||||||||||||||
NGLs sales volumes (Mbpd) |
11.4 |
11.4 |
10.4 |
8.3 |
|||||||||||
Number of days in the period |
92 |
92 |
365 |
365 |
|||||||||||
Total volumes for the period (thousands of barrels) (p) |
1,049 |
1,049 |
3,796 |
3,030 |
|||||||||||
Average Margin on NGL Sales per Barrel (p) |
$ |
54.77 |
$ |
28.10 |
$ |
59.92 |
$ |
34.77 |
(p) |
Amounts may not recalculate due to rounding of dollar and volume information. |
Andeavor Logistics LP |
|||||||
Average Wholesale Fuel Sales Margin per Gallon (Unaudited) |
|||||||
(In millions, except per gallon amounts) |
|||||||
Three Months |
Seven-Month |
||||||
December 31, 2017 (a) |
|||||||
Segment Operating Income |
$ |
6 |
$ |
15 |
|||
Add back: |
|||||||
Operating expenses (excluding depreciation and amortization) |
3 |
15 |
|||||
Depreciation and amortization expenses |
2 |
5 |
|||||
General and administrative expenses |
3 |
3 |
|||||
Subtract: |
|||||||
Other wholesale revenues |
(5) |
(15) |
|||||
Wholesale Fuel Sales Margin |
$ |
9 |
$ |
23 |
|||
Divided by Total Volumes for the Period: |
|||||||
Fuel sales volumes (millions of gallons) |
292 |
722 |
|||||
Average Wholesale Fuel Sales Margin per Gallon (p) |
3.0 |
¢ |
3.0 |
¢ |
Andeavor Logistics LP |
|||||||||||||||
Selected Financial Data (Unaudited) (In millions) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2018 |
2017 (a) |
2018 (a) |
2017 (a) |
||||||||||||
Capital Expenditures |
|||||||||||||||
Growth |
$ |
197 |
$ |
122 |
$ |
667 |
$ |
266 |
|||||||
Maintenance |
30 |
29 |
84 |
97 |
|||||||||||
Total Capital Expenditures |
$ |
227 |
$ |
151 |
$ |
751 |
$ |
363 |
|||||||
Capital Expenditures, Net of Reimbursements |
|||||||||||||||
Growth |
$ |
181 |
$ |
119 |
$ |
635 |
$ |
246 |
|||||||
Maintenance |
18 |
17 |
60 |
76 |
|||||||||||
Total Capital Expenditures, Net of Reimbursements |
$ |
199 |
$ |
136 |
$ |
695 |
$ |
322 |
|||||||
Capital Expenditures, Andeavor Logistics LP (q) |
|||||||||||||||
Growth |
$ |
197 |
$ |
60 |
$ |
503 |
$ |
160 |
|||||||
Maintenance |
30 |
24 |
78 |
77 |
|||||||||||
Total Capital Expenditures, Andeavor Logistics LP |
$ |
227 |
$ |
84 |
$ |
581 |
$ |
237 |
|||||||
Capital Expenditures, Net of Reimbursements, Andeavor Logistics LP (q) |
|||||||||||||||
Growth |
$ |
181 |
$ |
57 |
$ |
471 |
$ |
140 |
|||||||
Maintenance |
18 |
12 |
54 |
56 |
|||||||||||
Total Capital Expenditures, Net of Reimbursements, Andeavor Logistics LP |
$ |
199 |
$ |
69 |
$ |
525 |
$ |
196 |
|||||||
Capital Expenditures, Predecessors |
|||||||||||||||
Growth |
$ |
— |
$ |
62 |
$ |
164 |
$ |
106 |
|||||||
Maintenance |
— |
5 |
6 |
20 |
|||||||||||
Total Capital Expenditures, Predecessors |
$ |
— |
$ |
67 |
$ |
170 |
$ |
126 |
|||||||
Deferred Costs |
|||||||||||||||
Turnarounds & Catalysts |
$ |
6 |
$ |
3 |
$ |
12 |
$ |
16 |
|||||||
Tank Restoration |
8 |
2 |
22 |
12 |
|||||||||||
Total Deferred Costs |
$ |
14 |
$ |
5 |
$ |
34 |
$ |
28 |
(q) |
We believe that this presentation of our results of operations, excluding results of our Predecessors, will provide useful information to investors in assessing our results of operations. This non-GAAP financial measure should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. |
Three Months Ended |
Twelve Months Ended |
|||||||||||||
2018 |
2017 (a) |
2018 (a) |
2017 (a) |
|||||||||||
General and Administrative Expenses |
||||||||||||||
Terminalling and Transportation |
$ |
11 |
$ |
14 |
$ |
38 |
$ |
47 |
||||||
Gathering and Processing |
6 |
13 |
42 |
54 |
||||||||||
Wholesale |
1 |
3 |
2 |
3 |
||||||||||
Unallocated |
11 |
21 |
39 |
54 |
||||||||||
Total General and Administrative Expenses |
$ |
29 |
$ |
51 |
$ |
121 |
$ |
158 |
Andeavor Logistics LP |
|||||||||||||||||||||||
Reconciliation of Combined Financial Statements (Unaudited) |
|||||||||||||||||||||||
(In millions) |
|||||||||||||||||||||||
Three Months Ended December 31, 2018 |
Twelve Months Ended December 31, 2018 |
||||||||||||||||||||||
Combined |
Andeavor |
Predecessors |
Combined |
Andeavor |
Predecessors |
||||||||||||||||||
Revenues |
|||||||||||||||||||||||
Affiliate |
$ |
458 |
$ |
458 |
$ |
— |
$ |
1,589 |
$ |
1,568 |
$ |
21 |
|||||||||||
Third-party |
165 |
165 |
— |
791 |
782 |
9 |
|||||||||||||||||
Total Revenues |
623 |
623 |
— |
2,380 |
2,350 |
30 |
|||||||||||||||||
Costs and Expenses |
|||||||||||||||||||||||
NGL expense (exclusive of items |
40 |
40 |
— |
206 |
206 |
— |
|||||||||||||||||
Operating expenses (exclusive of |
227 |
227 |
— |
885 |
845 |
40 |
|||||||||||||||||
Depreciation and amortization expenses |
101 |
101 |
— |
368 |
347 |
21 |
|||||||||||||||||
General and administrative expenses |
29 |
29 |
— |
121 |
111 |
10 |
|||||||||||||||||
Loss on asset disposals and |
2 |
2 |
— |
4 |
4 |
— |
|||||||||||||||||
Operating Income (Loss) |
224 |
224 |
— |
796 |
837 |
(41) |
|||||||||||||||||
Interest and financing costs, net |
(61) |
(61) |
— |
(233) |
(229) |
(4) |
|||||||||||||||||
Equity in earnings of equity method |
6 |
6 |
— |
31 |
15 |
16 |
|||||||||||||||||
Other income, net |
2 |
2 |
— |
6 |
5 |
1 |
|||||||||||||||||
Net Earnings (Loss) |
$ |
171 |
$ |
171 |
$ |
— |
$ |
600 |
$ |
628 |
$ |
(28) |
|||||||||||
Loss attributable to Predecessors |
— |
— |
— |
28 |
— |
28 |
|||||||||||||||||
Net Earnings Attributable to |
171 |
171 |
— |
628 |
628 |
— |
|||||||||||||||||
Preferred unitholders' interest in net |
(10) |
(10) |
— |
(44) |
(44) |
— |
|||||||||||||||||
Limited Partners' Interest in Net |
$ |
161 |
$ |
161 |
$ |
— |
$ |
584 |
$ |
584 |
$ |
— |
Andeavor Logistics LP |
|||||||||||||||||||||||
Reconciliation of Combined Financial Statements (Unaudited) |
|||||||||||||||||||||||
(In millions) |
|||||||||||||||||||||||
Three Months Ended December 31, 2017 |
Twelve Months Ended December 31, 2017 |
||||||||||||||||||||||
Combined |
Andeavor |
Predecessors |
Combined |
Andeavor |
Predecessors |
||||||||||||||||||
Revenues |
|||||||||||||||||||||||
Affiliate |
$ |
480 |
$ |
385 |
$ |
95 |
$ |
1,431 |
$ |
1,009 |
$ |
422 |
|||||||||||
Third-party |
634 |
489 |
145 |
1,818 |
1,142 |
676 |
|||||||||||||||||
Total Revenues |