Western Refining, Inc. (NYSE:WNR) today reported results for the
fourth quarter ended December 31, 2016. The Company reported a
fourth quarter 2016 net loss attributable to Western of
$9.6 million, or $(0.09) per diluted share, as compared to net
income of $13.5 million, or $0.14 per diluted share for the
fourth quarter of 2015. Net loss attributable to Western, excluding
special items, was $7.8 million, or $(0.07) per diluted share.
This compares to fourth quarter 2015 net income, excluding special
items, of $52.2 million, or $0.56 per diluted share. A
reconciliation of reported earnings and description of special
items can be found in the accompanying financial tables.
For full year 2016, net income attributable to
Western was $124.9 million, or $1.24 per diluted share
compared to full year 2015 net income attributable to Western of
$406.8 million, or $4.28 per diluted share.
Jeff Stevens, Western's Chief Executive Officer,
said, "Western had a successful 2016 despite a volatile crude oil
price environment and challenging fourth quarter. There was
pressure on refining margins throughout 2016 which were
considerably below the highs we saw in 2015 and crude oil price
differentials also remained narrow. However, we had good,
reliable operations at our refineries and completed a major
turnaround at our St. Paul Park refinery resulting in additional
crude oil flexibility and increased capacity. Additionally, our
Retail operations achieved record levels in total fuel volumes and
merchandise sales in 2016."
Stevens continued, "Western invested $141
million in discretionary capital during the year to enhance our
crude oil flexibility, throughput, and improve product yields at
our St. Paul Park refinery and to enhance our logistics
capabilities in the Permian, San Juan and Williston Basins. In the
Permian and San Juan Basins, we continued to expand our fully
integrated crude oil pipeline logistics system and are able to move
crude oil south to either our El Paso refinery or eastward to
Midland and the Gulf Coast. Additionally, we continued to
balance capital investment with returning cash to
shareholders. In 2016, we returned approximately
$228 million in cash to shareholders through dividends and
share repurchases."
Stevens concluded, "As we begin 2017, we are
looking forward to the completion of the pending Tesoro
transaction. Meanwhile, we remain focused on safe and
reliable operations while emphasizing operational efficiencies and
managing our costs. We will also continue to maximize the benefits
of our investment in Western Refining Logistics. Overall, we
have expanded and enhanced our asset base which provides maximum
flexibility in these volatile business conditions."
Conference Call Information
A conference call is scheduled for Tuesday,
February 28, 2017, at 10:00 am ET to discuss Western's
financial results for the fourth quarter and full year ended
December 31, 2016. A slide presentation will be
available for reference during the conference call. The call, press
release, and slide presentation can be accessed on the Investor
Relations section on Western's website, www.wnr.com. The call can
also be heard by dialing (866) 566-8590 or (702) 224-9819,
passcode: 48866421. The audio replay will be available two hours
after the end of the call through March 7, 2017, by dialing (800)
585-8367 or (404) 537-3406, passcode: 48866421.
Non-GAAP Financial Measures
In a number of places in the press release and
related tables, we have excluded certain income and expense items
from GAAP measures. The excluded items are generally non-cash in
nature such as unrealized net gains and losses from commodity
hedging activities and lower of cost or market inventory
adjustments; however, other items that have a cash impact, such as
gains or losses on disposal of assets are also excluded. We believe
it is useful for investors and financial analysts to understand our
financial performance excluding such items so that they can see the
operating trends underlying our business. Readers of this press
release should not consider these non-GAAP measures in isolation
from, or as a substitute for, the financial information that we
report in accordance with GAAP.
About Western RefiningWestern Refining, Inc. is
an independent refining and marketing company headquartered in El
Paso, Texas. The Company operates refineries in El Paso, Gallup,
New Mexico and St. Paul Park, Minnesota. The Company’s retail
operations includes retail service stations and convenience stores
in Arizona, Colorado, Minnesota, New Mexico, Texas, and Wisconsin,
operating primarily through the Giant, Howdy’s, and SuperAmerica
brands.
Western Refining, Inc. also owns the general
partner and approximately 53% of the limited partnership interest
of Western Refining Logistics, LP (NYSE:WNRL).
More information about Western Refining is
available at www.wnr.com.
Cautionary Statement on Forward-Looking
StatementsThis communication 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. Words such as “may,” “will,” “could,”
“anticipate,” “estimate,” “expect,” “predict,” “project,” “future,”
“potential,” “intend,” “plan,” “assume,” “believe,” “forecast,”
“look,” “build,” “focus,” “create,” “work” “continue” or the
negative of such terms or other variations thereof and words and
terms of similar substance used in connection with any discussion
of future plans, actions, or events identify forward-looking
statements. These forward-looking statements include, but are not
limited to, statements regarding the proposed merger, integration
and transition plans, synergies, opportunities, anticipated future
performance, expected share buyback program and expected dividends.
In addition, the forward-looking statements contained herein
include statements about: Western’s ability to continue safe and
reliable operations at its refineries; Western's ability to achieve
crude oil flexibility and improve product yields at the St. Paul
Park refinery; Western's ability to enhance its logistics
capabilities in the Permian, San Juan and Williston Basins;
continued expansion of Western's crude oil pipeline logistics
system and ability to ship crude oil to El Paso, Midland, and the
Gulf Coast; the completion of the pending Tesoro transaction;
Western's ability to remain focused on safe and reliable
operations, to realize operational efficiencies, to manage its
costs, and to realize benefits of its investment in WNRL; and
Western's ability to achieve maximum flexibility in volatile
business conditions. There are a number of risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements included in this communication.
For example, the expected timing and likelihood of completion of
the proposed merger, including the timing, receipt and terms and
conditions of any required governmental and regulatory approvals of
the proposed merger that could reduce anticipated benefits or cause
the parties to abandon the transaction, the ability to successfully
integrate the businesses, the occurrence of any event, change or
other circumstances that could give rise to the termination of the
merger agreement, the possibility that stockholders of Tesoro
Corporation (“Tesoro”) may not approve the issuance of new shares
of common stock in the merger or that stockholders of Western
Refining, Inc. (“Western”) may not approve the merger agreement,
the risk that the parties may not be able to satisfy the conditions
to the proposed transaction in a timely manner or at all, risks
related to disruption of management time from ongoing business
operations due to the proposed transaction, the risk that any
announcements relating to the proposed transaction could have
adverse effects on the market price of Tesoro’s common stock or
Western’s common stock, the risk that the proposed transaction and
its announcement could have an adverse effect on the ability of
Tesoro and Western to retain customers and retain and hire key
personnel and maintain relationships with their suppliers and
customers and on their operating results and businesses generally,
the risk that problems may arise in successfully integrating the
businesses of the companies, which may result in the combined
company not operating as effectively and efficiently as expected,
the risk that the combined company may be unable to achieve
cost-cutting synergies or it may take longer than expected to
achieve those synergies, the risk that the combined company may not
buy back shares, the risk of the amount of any future dividend
Tesoro may pay, and other factors. All such factors are difficult
to predict and are beyond our control, including those detailed in
Tesoro’s annual reports on Form 10-K, quarterly reports on Form
10-Q, Current Reports on Form 8-K and registration statement on
Form S-4 filed with the SEC on December 14, 2016, as amended (the
“Form S-4”) that are available on Tesoro’s website at
http://www.tsocorp.com and on the SEC website at
http://www.sec.gov, and those detailed in Western’s annual reports
on Form 10-K, quarterly reports on Form 10-Q and Current Reports on
Form 8-K that are available on Western’s website at
http://www.wnr.com and on the SEC website at http://www.sec.gov.
Tesoro’s and Western’s forward-looking statements are based on
assumptions that Tesoro and Western believe to be reasonable but
that may not prove to be accurate. Tesoro and Western 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, except as
required by applicable law or regulation. Readers are cautioned not
to place undue reliance on these forward-looking statements that
speak only as of the date hereof.
No Offer or Solicitation:
This communication relates to a proposed
business combination between Western and Tesoro. This announcement
is for informational purposes only and is neither an offer to
purchase, nor a solicitation of an offer to sell, any securities or
the solicitation of any vote in any jurisdiction pursuant to the
proposed transactions or otherwise, nor shall there be any sale,
issuance or transfer or securities in any jurisdiction in
contravention of applicable law. No offer of securities shall be
made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act of 1933, as amended.
Additional Information and Where to Find
It:This communication may be deemed to be solicitation
material in respect of the proposed transaction between Tesoro and
Western. In connection with the proposed transaction, Tesoro has
filed with the SEC, and the SEC has declared effective, a
registration statement on Form S-4 (Reg. No. 333-215080),
containing a joint proxy statement/prospectus of Tesoro and
Western, which proxy statement/prospectus was first mailed to
Tesoro and Western stockholders on February 17, 2017. This
communication is not a substitute for the registration statement,
proxy statement/prospectus or any other documents that Tesoro or
Western may file with the SEC or send to stockholders in connection
with the proposed transaction. STOCKHOLDERS OF TESORO AND WESTERN
ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC,
INCLUDING THE FORM S-4 AND THE DEFINITIVE PROXY
STATEMENT/PROSPECTUS INCLUDED THEREIN, AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to
obtain copies of these documents, including the proxy
statement/prospectus, and other documents filed with the SEC (when
available) free of charge at the SEC’s website, http://www.sec.gov.
Copies of documents filed with the SEC by Tesoro will be made
available free of charge on Tesoro’s website at
http://www.tsocorp.com or by contacting Tesoro’s Investor Relations
Department by phone at 210-626-6000. Copies of documents filed with
the SEC by Western will be made available free of charge on
Western’s website at http://www.wnr.com or by contacting Western’s
Investor Relations Department by phone at 602-286-1530 or
602-286-1533.
Participants in the
Solicitation:
Tesoro and its directors and executive officers,
and Western and its directors and executive officers, may be deemed
to be participants in the solicitation of proxies from the holders
of Tesoro common stock and Western common stock in respect of the
proposed transaction. Information about the directors and executive
officers of Tesoro is set forth in the proxy statement for Tesoro’s
2016 Annual Meeting of Stockholders, which was filed with the SEC
on March 22, 2016, and in the other documents filed after the date
thereof by Tesoro with the SEC. Information about the directors and
executive officers of Western is set forth in the proxy statement
for Western’s 2016 Annual Meeting of Shareholders, which was filed
with the SEC on April 22, 2016, and in the other documents filed
after the date thereof by Western with the SEC. Investors may
obtain additional information regarding the interests of such
participants by reading the proxy statement/prospectus regarding
the proposed transaction when it becomes available. You may obtain
free copies of these documents as described in the preceding
paragraph.
Consolidated Financial Data
We report our operating results in three business segments:
refining, WNRL and retail.
- Refining. Our refining segment owns and operates three
refineries that process crude oil and other feedstocks primarily
into gasoline, diesel fuel, jet fuel and asphalt. We market refined
products to a diverse customer base including wholesale
distributors and retail chains. The refining segment also sells
refined products in the Mid-Atlantic region and Mexico.
- WNRL. WNRL owns and operates terminal, storage, transportation
and wholesale assets in the Southwest and terminal and storage
assets in the Upper Great Plains region. WNRL's Southwest wholesale
assets consist of a fleet of crude oil, asphalt and refined product
truck transports and wholesale petroleum product operations. WNRL's
primary customer is our refining segment. WNRL purchases its
wholesale product supply from the refining segment and third-party
suppliers.
- Retail. Our retail segment operates retail convenience stores
and unmanned commercial fleet fueling ("cardlock") locations
located in the Southwest ("Southwest Retail") and Upper Great
Plains ("SuperAmerica") regions. The retail convenience stores sell
gasoline, diesel fuel and convenience store merchandise.
The following tables set forth our unaudited
summary historical financial and operating data for the periods
indicated below:
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(In thousands, except per share
data) |
| Statements of
Operations Data |
|
|
|
|
|
|
|
| Net sales (1) |
$ |
2,115,325 |
|
|
$ |
2,070,324 |
|
|
$ |
7,743,213 |
|
|
$ |
9,787,036 |
|
| Operating costs and
expenses: |
|
|
|
|
|
|
|
| Cost of
products sold (exclusive of depreciation and amortization) (1) |
1,721,812 |
|
|
1,706,406 |
|
|
5,978,811 |
|
|
7,521,375 |
|
| Direct
operating expenses (exclusive of depreciation and amortization)
(1) |
240,716 |
|
|
228,451 |
|
|
928,023 |
|
|
902,925 |
|
| Selling,
general and administrative expenses |
51,204 |
|
|
55,437 |
|
|
217,861 |
|
|
225,245 |
|
| Merger
and reorganization costs |
8,453 |
|
|
— |
|
|
12,440 |
|
|
— |
|
| Loss
(gain) and impairments on disposal of assets, net |
(90 |
) |
|
208 |
|
|
(1,271 |
) |
|
51 |
|
|
Maintenance turnaround expense |
19,404 |
|
|
836 |
|
|
47,137 |
|
|
2,024 |
|
|
Depreciation and amortization |
55,456 |
|
|
52,845 |
|
|
216,787 |
|
|
205,291 |
|
| Total
operating costs and expenses |
2,096,955 |
|
|
2,044,183 |
|
|
7,399,788 |
|
|
8,856,911 |
|
| Operating
income |
18,370 |
|
|
26,141 |
|
|
343,425 |
|
|
930,125 |
|
| Other income
(expense): |
|
|
|
|
|
|
|
| Interest
income |
256 |
|
|
153 |
|
|
692 |
|
|
703 |
|
| Interest
and debt expense |
(35,226 |
) |
|
(26,434 |
) |
|
(123,291 |
) |
|
(105,603 |
) |
| Loss on
extinguishment of debt |
(3,916 |
) |
|
— |
|
|
(3,916 |
) |
|
— |
|
| Other,
net |
7,152 |
|
|
1,604 |
|
|
24,964 |
|
|
13,161 |
|
| Net
income (loss) before income taxes |
(13,364 |
) |
|
1,464 |
|
|
241,874 |
|
|
838,386 |
|
| Provision for income
taxes |
13,613 |
|
|
6,034 |
|
|
(54,868 |
) |
|
(223,955 |
) |
| Net
income |
249 |
|
|
7,498 |
|
|
187,006 |
|
|
614,431 |
|
| Less net income (loss)
attributable to non-controlling interests (2) |
9,838 |
|
|
(6,047 |
) |
|
62,067 |
|
|
207,675 |
|
| Net
income (loss) attributable to Western Refining, Inc. |
$ |
(9,589 |
) |
|
$ |
13,545 |
|
|
$ |
124,939 |
|
|
$ |
406,756 |
|
| Basic earnings (loss)
per share |
$ |
(0.09 |
) |
|
$ |
0.14 |
|
|
$ |
1.24 |
|
|
$ |
4.28 |
|
| Diluted earnings (loss)
per share (3) |
(0.09 |
) |
|
0.14 |
|
|
1.24 |
|
|
4.28 |
|
| Dividends declared per
common share |
0.38 |
|
|
0.38 |
|
|
1.52 |
|
|
1.36 |
|
| Weighted average basic
shares outstanding |
108,431 |
|
|
93,683 |
|
|
100,473 |
|
|
94,899 |
|
| Weighted average
dilutive shares outstanding |
108,890 |
|
|
93,785 |
|
|
100,868 |
|
|
94,999 |
|
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(In thousands) |
| Economic
Hedging Activities Recognized Within Cost of Products
Sold |
|
|
|
|
|
|
|
| Realized hedging gain,
net |
$ |
12,663 |
|
|
$ |
41,374 |
|
|
$ |
58,773 |
|
|
$ |
93,699 |
|
| Unrealized hedging
loss, net |
(22,976 |
) |
|
(8,160 |
) |
|
(77,674 |
) |
|
(50,233 |
) |
| Total
hedging gain (loss), net |
$ |
(10,313 |
) |
|
$ |
33,214 |
|
|
$ |
(18,901 |
) |
|
$ |
43,466 |
|
| |
|
|
|
|
|
|
|
| Cash Flow
Data |
|
|
|
|
|
|
|
| Net cash
provided by (used in): |
|
|
|
|
|
|
|
| Operating
activities |
$ |
105,870 |
|
|
$ |
177,419 |
|
|
$ |
383,747 |
|
|
$ |
843,083 |
|
| Investing
activities |
130,737 |
|
|
(157,392 |
) |
|
(226,342 |
) |
|
(191,846 |
) |
| Financing
activities |
(234,122 |
) |
|
42,905 |
|
|
(661,326 |
) |
|
(309,894 |
) |
| Capital
expenditures |
$ |
65,872 |
|
|
$ |
94,887 |
|
|
$ |
300,969 |
|
|
$ |
290,863 |
|
| Cash
distributions received by Western from: |
|
|
|
|
|
|
|
| NTI |
$ |
110,000 |
|
|
$ |
37,047 |
|
|
$ |
129,949 |
|
|
$ |
135,365 |
|
| WNRL |
15,119 |
|
|
12,610 |
|
|
56,190 |
|
|
45,455 |
|
| Other
Data |
|
|
|
|
|
|
|
| Adjusted
EBITDA (4) |
$ |
92,629 |
|
|
$ |
203,614 |
|
|
$ |
575,994 |
|
|
$ |
1,298,124 |
|
| Balance Sheet
Data (at end of period) |
|
|
|
|
|
|
|
| Cash and
cash equivalents |
|
|
|
|
$ |
268,581 |
|
|
$ |
772,502 |
|
|
Restricted cash |
|
|
|
|
— |
|
|
69,106 |
|
| Working
capital |
|
|
|
|
688,477 |
|
|
1,114,366 |
|
| Total
assets |
|
|
|
|
5,560,397 |
|
|
5,833,393 |
|
| Total
debt and lease financing obligation |
|
|
|
|
1,936,468 |
|
|
1,703,626 |
|
| Total
equity |
|
|
|
|
2,296,960 |
|
|
2,945,906 |
|
(1) Excludes $948.1 million, $3,558.4 million,
$850.6 million and $3,869.8 million of intercompany
sales; $948.1 million, $3,558.4 million,
$850.6 million and $3,869.8 million of intercompany cost
of products sold for the three and twelve months ended
December 31, 2016 and 2015, respectively.(2) Net income (loss)
attributable to non-controlling interests for the twelve months
ended December 31, 2016 and 2015, consisted of income from NTI
of $35.3 million and $186.5 million, respectively, and
$(11.0) million for the three months ended December 31,
2015 with no comparable activity during the three months ended
December 31, 2016. Net income attributable to non-controlling
interest for the three and twelve months ended December 31,
2016 and 2015, consisted of income from WNRL of $9.8 million,
$26.7 million, $5.0 million and $21.2 million,
respectively.(3) Our computation of diluted earnings per share
includes the dilutive effect of any unvested restricted shares
units and phantom stock. If determined to be dilutive to period
earnings, these securities are included in the denominator of our
diluted earnings per share calculation. For purposes of the diluted
earnings per share calculation, we assumed issuance of
0.5 million and 0.4 million restricted share units and
phantom stock for the three and twelve months ended
December 31, 2016, respectively. We assumed issuance of
0.1 million restricted share units for both the three and
twelve months ended December 31, 2015.(4) Adjusted EBITDA
represents earnings before interest and debt expense, provision for
income taxes, depreciation, amortization, maintenance turnaround
expense and certain other non-cash income and expense items.
However, Adjusted EBITDA is not a recognized measurement under U.S.
generally accepted accounting principles ("GAAP"). Our management
believes that the presentation of Adjusted EBITDA is useful to
investors because it is frequently used by securities analysts,
investors and other interested parties in the evaluation of
companies in our industry. In addition, our management believes
that Adjusted EBITDA is useful in evaluating our operating
performance compared to that of other companies in our industry
because the calculation of Adjusted EBITDA generally eliminates the
effects of financings, income taxes, the accounting effects of
significant turnaround activities (that many of our competitors
capitalize and thereby exclude from their measures of EBITDA) and
certain non-cash charges that are items that may vary for different
companies for reasons unrelated to overall operating
performance.
Adjusted EBITDA has limitations as an analytical tool, and you
should not consider it in isolation, or as a substitute for
analysis of our results as reported under GAAP. Some of these
limitations are:
- Adjusted EBITDA does not reflect our cash expenditures or
future requirements for significant turnaround activities, capital
expenditures or contractual commitments;
- Adjusted EBITDA does not reflect the interest expense or the
cash requirements necessary to service interest or principal
payments on our debt;
- Adjusted EBITDA does not reflect changes in, or cash
requirements for, our working capital needs; and
- Adjusted EBITDA, as we calculate it, may differ from the
Adjusted EBITDA calculations of other companies in our industry,
thereby limiting its usefulness as a comparative measure.
Because of these limitations, Adjusted EBITDA should not be
considered a measure of discretionary cash available to us to
invest in the growth of our business. We compensate for these
limitations by relying primarily on our GAAP results and using
Adjusted EBITDA only supplementally. The following table reconciles
net income attributable to Western Refining, Inc. to Adjusted
EBITDA for the periods presented:
| |
Three Months Ended |
|
Twelve Months Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(In thousands) |
| Net income (loss)
attributable to Western Refining, Inc. |
$ |
(9,589 |
) |
|
$ |
13,545 |
|
|
$ |
124,939 |
|
|
$ |
406,756 |
|
| Net
income (loss) attributable to non-controlling interests |
9,838 |
|
|
(6,047 |
) |
|
62,067 |
|
|
207,675 |
|
| Interest
and debt expense |
35,226 |
|
|
26,434 |
|
|
123,291 |
|
|
105,603 |
|
| Provision
for income taxes |
(13,613 |
) |
|
(6,034 |
) |
|
54,868 |
|
|
223,955 |
|
|
Depreciation and amortization |
55,456 |
|
|
52,845 |
|
|
216,787 |
|
|
205,291 |
|
|
Maintenance turnaround expense |
19,404 |
|
|
836 |
|
|
47,137 |
|
|
2,024 |
|
| Loss
(gain) and impairments on disposal of assets, net |
(90 |
) |
|
208 |
|
|
(1,271 |
) |
|
51 |
|
| Loss on
extinguishment of debt |
3,916 |
|
|
— |
|
|
3,916 |
|
|
— |
|
| Net
change in lower of cost or market inventory reserve |
(30,895 |
) |
|
113,667 |
|
|
(133,414 |
) |
|
96,536 |
|
|
Unrealized loss on commodity hedging transactions |
22,976 |
|
|
8,160 |
|
|
77,674 |
|
|
50,233 |
|
| Adjusted EBITDA |
$ |
92,629 |
|
|
$ |
203,614 |
|
|
$ |
575,994 |
|
|
$ |
1,298,124 |
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA: |
|
|
|
|
|
|
|
| Western
(1) |
$ |
55,892 |
|
|
$ |
175,932 |
|
|
$ |
450,836 |
|
|
$ |
1,191,740 |
|
| WNRL |
36,737 |
|
|
27,682 |
|
|
125,158 |
|
|
106,384 |
|
| Consolidated Adjusted
EBITDA |
$ |
92,629 |
|
|
$ |
203,614 |
|
|
$ |
575,994 |
|
|
$ |
1,298,124 |
|
| |
Three Months Ended |
| |
December 31, |
| |
2016 |
|
2015 |
| |
Western (1) |
|
WNRL |
|
Western (1) |
|
WNRL |
| |
(Unaudited) |
| |
(In thousands) |
| Net income (loss)
attributable to Western Refining, Inc. |
$ |
(20,503 |
) |
|
$ |
10,914 |
|
|
$ |
3,699 |
|
|
$ |
9,846 |
|
| Net
income (loss) attributable to non-controlling interests |
— |
|
|
9,838 |
|
|
(11,043 |
) |
|
4,996 |
|
| Interest
and debt expense |
28,868 |
|
|
6,358 |
|
|
19,743 |
|
|
6,691 |
|
| Provision
for income taxes |
(13,559 |
) |
|
(54 |
) |
|
(5,727 |
) |
|
(307 |
) |
|
Depreciation and amortization |
45,684 |
|
|
9,772 |
|
|
46,368 |
|
|
6,477 |
|
|
Maintenance turnaround expense |
19,404 |
|
|
— |
|
|
836 |
|
|
— |
|
| Loss
(gain) and impairments on disposal of assets, net |
1 |
|
|
(91 |
) |
|
229 |
|
|
(21 |
) |
| Loss on
extinguishment of debt |
3,916 |
|
|
— |
|
|
— |
|
|
— |
|
| Net
change in lower of cost or market inventory reserve |
(30,895 |
) |
|
— |
|
|
113,667 |
|
|
— |
|
|
Unrealized loss on commodity hedging transactions |
22,976 |
|
|
— |
|
|
8,160 |
|
|
— |
|
| Adjusted EBITDA |
$ |
55,892 |
|
|
$ |
36,737 |
|
|
$ |
175,932 |
|
|
$ |
27,682 |
|
| |
Twelve Months Ended |
| |
December 31, |
| |
2016 |
|
2015 |
| |
Western (1) |
|
WNRL |
|
Western (1) |
|
WNRL |
| |
(Unaudited) |
| |
(In thousands) |
| Net income attributable
to Western Refining, Inc. |
$ |
85,027 |
|
|
$ |
39,912 |
|
|
$ |
365,338 |
|
|
$ |
41,418 |
|
| Net
income attributable to non-controlling interests |
35,323 |
|
|
26,744 |
|
|
186,520 |
|
|
21,155 |
|
| Interest
and debt expense |
97,319 |
|
|
25,972 |
|
|
82,496 |
|
|
23,107 |
|
| Provision
for income taxes |
54,162 |
|
|
706 |
|
|
223,908 |
|
|
47 |
|
|
Depreciation and amortization |
183,909 |
|
|
32,878 |
|
|
184,356 |
|
|
20,935 |
|
|
Maintenance turnaround expense |
47,137 |
|
|
— |
|
|
2,024 |
|
|
— |
|
| Loss
(gain) and impairments on disposal of assets, net |
(217 |
) |
|
(1,054 |
) |
|
329 |
|
|
(278 |
) |
| Loss on
extinguishment of debt |
3,916 |
|
|
— |
|
|
— |
|
|
— |
|
| Net
change in lower of cost or market inventory reserve |
(133,414 |
) |
|
— |
|
|
96,536 |
|
|
— |
|
|
Unrealized loss on commodity hedging transactions |
77,674 |
|
|
— |
|
|
50,233 |
|
|
— |
|
| Adjusted EBITDA |
$ |
450,836 |
|
|
$ |
125,158 |
|
|
$ |
1,191,740 |
|
|
$ |
106,384 |
|
(1) Our presentation of Adjusted EBITDA for Western excludes the
results of WNRL for all periods presented.
Consolidating Financial Data
The following tables set forth our consolidating historical
financial data for the periods presented below.
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(In thousands) |
| Operating
Income |
|
|
|
|
|
|
|
|
Refining |
$ |
18,807 |
|
|
$ |
30,126 |
|
|
$ |
357,610 |
|
|
$ |
930,531 |
|
| WNRL |
27,039 |
|
|
14,340 |
|
|
70,095 |
|
|
55,794 |
|
|
Retail |
3,953 |
|
|
4,923 |
|
|
25,146 |
|
|
41,279 |
|
|
Other |
(31,429 |
) |
|
(23,248 |
) |
|
(109,426 |
) |
|
(97,479 |
) |
| Operating
income |
$ |
18,370 |
|
|
$ |
26,141 |
|
|
$ |
343,425 |
|
|
$ |
930,125 |
|
| Depreciation
and Amortization |
|
|
|
|
|
|
|
|
Refining |
$ |
39,388 |
|
|
$ |
36,192 |
|
|
$ |
150,989 |
|
|
$ |
142,108 |
|
| WNRL |
9,772 |
|
|
9,568 |
|
|
39,242 |
|
|
35,384 |
|
|
Retail |
5,571 |
|
|
5,940 |
|
|
23,193 |
|
|
23,197 |
|
|
Other |
725 |
|
|
1,145 |
|
|
3,363 |
|
|
4,602 |
|
|
Depreciation and amortization expense |
$ |
55,456 |
|
|
$ |
52,845 |
|
|
$ |
216,787 |
|
|
$ |
205,291 |
|
| Capital
Expenditures |
|
|
|
|
|
|
|
|
Refining |
$ |
48,182 |
|
|
$ |
73,335 |
|
|
$ |
248,863 |
|
|
$ |
201,249 |
|
| WNRL |
4,783 |
|
|
13,485 |
|
|
29,161 |
|
|
65,635 |
|
|
Retail |
11,780 |
|
|
7,720 |
|
|
20,308 |
|
|
20,895 |
|
|
Other |
1,127 |
|
|
347 |
|
|
2,637 |
|
|
3,084 |
|
| Capital
expenditures |
$ |
65,872 |
|
|
$ |
94,887 |
|
|
$ |
300,969 |
|
|
$ |
290,863 |
|
| Balance Sheet
Data (at end of period) |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
| Western,
excluding WNRL |
|
|
|
|
$ |
253,929 |
|
|
$ |
727,897 |
|
| WNRL |
|
|
|
|
14,652 |
|
|
44,605 |
|
| Cash and
cash equivalents |
|
|
|
|
$ |
268,581 |
|
|
$ |
772,502 |
|
|
Total debt |
|
|
|
|
|
|
|
| Western,
excluding WNRL |
|
|
|
|
$ |
1,569,273 |
|
|
$ |
1,212,927 |
|
| WNRL |
|
|
|
|
313,032 |
|
|
437,467 |
|
| Total
debt |
|
|
|
|
$ |
1,882,305 |
|
|
$ |
1,650,394 |
|
|
Total working capital |
|
|
|
|
|
|
|
| Western,
excluding WNRL |
|
|
|
|
$ |
705,667 |
|
|
$ |
1,078,574 |
|
| WNRL |
|
|
|
|
(17,190 |
) |
|
35,792 |
|
| Total
working capital |
|
|
|
|
$ |
688,477 |
|
|
$ |
1,114,366 |
|
Refining
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(In thousands, except per barrel
data) |
| Statement of
Operations Data: |
|
|
|
|
|
|
|
| Net sales (including
intersegment sales) (1) |
$ |
1,906,648 |
|
|
$ |
1,818,753 |
|
|
$ |
6,918,931 |
|
|
$ |
8,777,196 |
|
| Operating costs and
expenses: |
|
|
|
|
|
|
|
| Cost of
products sold (exclusive of depreciation and amortization) (7) |
1,688,665 |
|
|
1,619,368 |
|
|
5,831,811 |
|
|
7,176,706 |
|
| Direct
operating expenses (exclusive of depreciation and
amortization) |
126,776 |
|
|
116,315 |
|
|
472,128 |
|
|
459,996 |
|
| Selling,
general and administrative expenses |
13,608 |
|
|
15,863 |
|
|
59,239 |
|
|
65,422 |
|
| Loss and
impairments on disposal of assets, net |
— |
|
|
53 |
|
|
17 |
|
|
409 |
|
|
Maintenance turnaround expense |
19,404 |
|
|
836 |
|
|
47,137 |
|
|
2,024 |
|
|
Depreciation and amortization |
39,388 |
|
|
36,192 |
|
|
150,989 |
|
|
142,108 |
|
| Total
operating costs and expenses |
1,887,841 |
|
|
1,788,627 |
|
|
6,561,321 |
|
|
7,846,665 |
|
| Operating
income |
$ |
18,807 |
|
|
$ |
30,126 |
|
|
$ |
357,610 |
|
|
$ |
930,531 |
|
| Key Operating
Statistics |
|
|
|
|
|
|
|
| Total sales volume
(bpd) (2) |
314,391 |
|
|
336,617 |
|
|
312,699 |
|
|
338,403 |
|
| Total refinery
production (bpd) |
250,254 |
|
|
254,321 |
|
|
256,177 |
|
|
256,197 |
|
| Total refinery
throughput (bpd) (3) |
252,063 |
|
|
255,847 |
|
|
258,023 |
|
|
258,322 |
|
| Per barrel of
throughput: |
|
|
|
|
|
|
|
| Refinery
gross margin (4) (5) (7) |
$ |
9.36 |
|
|
$ |
8.35 |
|
|
$ |
11.45 |
|
|
$ |
16.93 |
|
| Refinery
gross margin, excluding LCM adjustment (4) (5) (7) |
8.06 |
|
|
13.13 |
|
|
10.05 |
|
|
17.95 |
|
| Direct
operating expenses (6) |
5.46 |
|
|
4.94 |
|
|
5.00 |
|
|
4.87 |
|
| Mid-Atlantic sales
volume (bbls) |
1,549 |
|
|
1,759 |
|
|
7,239 |
|
|
8,356 |
|
| Mid-Atlantic margin per
barrel |
$ |
0.60 |
|
|
$ |
1.61 |
|
|
$ |
0.82 |
|
|
$ |
0.46 |
|
El Paso Refinery
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| Key Operating
Statistics |
|
|
|
|
|
|
|
| Refinery product yields
(bpd): |
|
|
|
|
|
|
|
|
Gasoline |
77,482 |
|
|
68,976 |
|
|
74,916 |
|
|
70,200 |
|
| Diesel
and jet fuel |
55,561 |
|
|
48,972 |
|
|
55,793 |
|
|
54,082 |
|
|
Residuum |
3,086 |
|
|
2,524 |
|
|
2,929 |
|
|
4,174 |
|
|
Other |
3,755 |
|
|
5,964 |
|
|
4,747 |
|
|
4,872 |
|
| Total
refinery production (bpd) |
139,884 |
|
|
126,436 |
|
|
138,385 |
|
|
133,328 |
|
| Refinery throughput
(bpd): |
|
|
|
|
|
|
|
| Sweet
crude oil |
104,276 |
|
|
99,765 |
|
|
104,454 |
|
|
105,064 |
|
| Sour
crude oil |
27,657 |
|
|
22,634 |
|
|
26,612 |
|
|
22,949 |
|
| Other
feedstocks and blendstocks |
9,374 |
|
|
5,459 |
|
|
8,805 |
|
|
7,064 |
|
| Total
refinery throughput (bpd) (3) |
141,307 |
|
|
127,858 |
|
|
139,871 |
|
|
135,077 |
|
| Total sales volume
(bpd) (2) |
148,971 |
|
|
144,423 |
|
|
148,808 |
|
|
148,897 |
|
| Per barrel of
throughput: |
|
|
|
|
|
|
|
| Refinery
gross margin (4) (7) |
$ |
10.57 |
|
|
$ |
9.55 |
|
|
$ |
10.93 |
|
|
$ |
16.48 |
|
| Direct
operating expenses (6) |
3.86 |
|
|
4.22 |
|
|
3.82 |
|
|
4.02 |
|
Gallup Refinery
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| Key Operating
Statistics |
|
|
|
|
|
|
|
| Refinery product yields
(bpd): |
|
|
|
|
|
|
|
|
Gasoline |
15,446 |
|
|
17,068 |
|
|
16,315 |
|
|
17,066 |
|
| Diesel
and jet fuel |
7,654 |
|
|
7,569 |
|
|
7,574 |
|
|
7,994 |
|
|
Other |
1,689 |
|
|
646 |
|
|
1,355 |
|
|
1,303 |
|
| Total
refinery production (bpd) |
24,789 |
|
|
25,283 |
|
|
25,244 |
|
|
26,363 |
|
| Refinery throughput
(bpd): |
|
|
|
|
|
|
|
| Sweet
crude oil |
22,412 |
|
|
21,979 |
|
|
22,964 |
|
|
24,071 |
|
| Other
feedstocks and blendstocks |
2,883 |
|
|
3,633 |
|
|
2,787 |
|
|
2,659 |
|
| Total
refinery throughput (bpd) (3) |
25,295 |
|
|
25,612 |
|
|
25,751 |
|
|
26,730 |
|
| Total sales volume
(bpd) (2) |
32,620 |
|
|
32,014 |
|
|
34,427 |
|
|
33,005 |
|
| Per barrel of
throughput: |
|
|
|
|
|
|
|
| Refinery
gross margin (4) (7) |
$ |
11.45 |
|
|
$ |
13.61 |
|
|
$ |
12.23 |
|
|
$ |
18.34 |
|
| Direct
operating expenses (6) |
11.91 |
|
|
8.60 |
|
|
9.51 |
|
|
8.38 |
|
St. Paul Park Refinery
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| Key Operating
Statistics |
|
|
|
|
|
|
|
| Refinery product yields
(bpd): |
|
|
|
|
|
|
|
|
Gasoline |
43,694 |
|
|
50,303 |
|
|
46,287 |
|
|
46,453 |
|
| Diesel
and jet fuel |
31,808 |
|
|
35,033 |
|
|
30,767 |
|
|
33,356 |
|
|
Residuum |
5,565 |
|
|
11,500 |
|
|
9,661 |
|
|
10,933 |
|
|
Other |
4,515 |
|
|
5,766 |
|
|
5,833 |
|
|
5,764 |
|
| Total
refinery production (bpd) |
85,582 |
|
|
102,602 |
|
|
92,548 |
|
|
96,506 |
|
| Refinery throughput
(bpd): |
|
|
|
|
|
|
|
| Light
crude oil |
38,187 |
|
|
55,116 |
|
|
49,794 |
|
|
55,612 |
|
| Synthetic
crude oil |
28,434 |
|
|
15,571 |
|
|
17,516 |
|
|
13,127 |
|
| Heavy
crude oil |
13,645 |
|
|
25,948 |
|
|
21,641 |
|
|
24,962 |
|
| Other
feedstocks and blendstocks |
5,195 |
|
|
5,742 |
|
|
3,449 |
|
|
2,814 |
|
| Total
refinery throughput (bpd) (3) |
85,461 |
|
|
102,377 |
|
|
92,400 |
|
|
96,515 |
|
| Total sales volume
(bpd) (2) |
92,712 |
|
|
103,483 |
|
|
98,965 |
|
|
101,349 |
|
| Per barrel of
throughput: |
|
|
|
|
|
|
|
| Refinery
gross margin (4) (7) |
$ |
5.54 |
|
|
$ |
14.26 |
|
|
$ |
9.17 |
|
|
$ |
18.88 |
|
| Direct
operating expenses (6) |
5.34 |
|
|
4.12 |
|
|
4.66 |
|
|
4.33 |
|
(1) Refining net sales for the three and twelve months ended
December 31, 2016 and 2015, includes $206.1 million,
$547.4 million, $230.0 million and $1,078.2 million,
respectively, in crude oil sales to third parties representing a
period average of 46,990 bpd, 34,177 bpd, 59,344 bpd and 61,516
bpd, respectively.(2) Sales volume includes sales of refined
products sourced primarily from our refinery production as well as
refined products purchased from third parties. We purchase
additional refined products from third parties to supplement supply
to our customers. These products are similar to the products
that we currently manufacture and represent 5.4%, 5.7%, 5.5% and
6.5% of our total consolidated sales volumes for the three and
twelve months ended December 31, 2016 and 2015, respectively.
The majority of the purchased refined products are distributed
through our refined product sales activities in the Mid-Atlantic
region where we satisfied our refined product customer sales
requirements via a third-party supply agreement through December
31, 2016.(3) Total refinery throughput includes crude oil, other
feedstocks and blendstocks.(4) Refinery gross margin is a per
barrel measurement calculated by dividing the difference between
net sales and cost of products sold by our refineries’ total
throughput volumes for the respective periods presented. Net
realized and net non-cash unrealized economic hedging gains and
losses included in the combined refining segment gross margin are
not allocated to the individual refineries. Cost of products sold
does not include any depreciation or amortization. Refinery gross
margin is a non-GAAP performance measure that we believe is
important to investors in evaluating our refinery performance as a
general indication of the amount above our cost of products that we
are able to sell refined products. Each of the components used in
this calculation (net sales and cost of products sold) can be
reconciled directly to our statement of operations. Our calculation
of refinery gross margin may differ from similar calculations of
other companies in our industry, thereby limiting its usefulness as
a comparative measure.
Our calculation of refinery gross margin excludes the sales and
costs related to our Mid-Atlantic business that we report within
the refining segment. The following table reconciles the sales and
cost of sales used to calculate refinery gross margin with the
total sales and cost of sales reported in the refining statement of
operations data above:
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(In thousands) |
| Refinery net sales
(including intersegment sales) |
$ |
1,804,640 |
|
|
$ |
1,715,670 |
|
|
$ |
6,485,540 |
|
|
$ |
8,177,250 |
|
| Mid-Atlantic sales |
102,008 |
|
|
103,083 |
|
|
433,391 |
|
|
599,946 |
|
| Net sales
(including intersegment sales) |
$ |
1,906,648 |
|
|
$ |
1,818,753 |
|
|
$ |
6,918,931 |
|
|
$ |
8,777,196 |
|
| |
|
|
|
|
|
|
|
| Refinery cost of
products sold (exclusive of depreciation and amortization) |
$ |
1,587,579 |
|
|
$ |
1,519,117 |
|
|
$ |
5,404,339 |
|
|
$ |
6,580,591 |
|
| Mid-Atlantic cost of
products sold |
101,086 |
|
|
100,251 |
|
|
427,472 |
|
|
596,115 |
|
| Cost of
products sold (exclusive of depreciation and amortization) |
$ |
1,688,665 |
|
|
$ |
1,619,368 |
|
|
$ |
5,831,811 |
|
|
$ |
7,176,706 |
|
The following table reconciles combined gross profit for our
refineries to combined gross margin for our refineries for the
periods presented:
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(In thousands, except per barrel
data) |
| Net sales (including
intersegment sales) |
$ |
1,804,640 |
|
|
$ |
1,715,670 |
|
|
$ |
6,485,540 |
|
|
$ |
8,177,250 |
|
| Cost of products sold
(exclusive of depreciation and amortization) |
1,587,579 |
|
|
1,519,117 |
|
|
5,404,339 |
|
|
6,580,591 |
|
| Depreciation and
amortization |
39,388 |
|
|
36,192 |
|
|
150,989 |
|
|
142,108 |
|
| Gross
profit |
177,673 |
|
|
160,361 |
|
|
930,212 |
|
|
1,454,551 |
|
| Plus depreciation and
amortization |
39,388 |
|
|
36,192 |
|
|
150,989 |
|
|
142,108 |
|
| Refinery
gross margin |
$ |
217,061 |
|
|
$ |
196,553 |
|
|
$ |
1,081,201 |
|
|
$ |
1,596,659 |
|
| Refinery gross margin
per refinery throughput barrel |
$ |
9.36 |
|
|
$ |
8.35 |
|
|
$ |
11.45 |
|
|
$ |
16.93 |
|
| Gross profit per
refinery throughput barrel |
$ |
7.66 |
|
|
$ |
6.81 |
|
|
$ |
9.85 |
|
|
$ |
15.43 |
|
(5) Cost of products sold for the combined refining segment
includes changes in the lower of cost or market inventory reserve
shown in the table below. The reserve changes are also included in
the combined refinery gross margin but are not included in those
measures for the individual refineries. The following table
calculates the refinery gross margin per refinery throughput barrel
excluding changes in the lower of cost or market inventory reserve
that we believe is useful in evaluating our refinery performance
exclusive of the impact of fluctuations in inventory values:
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(in thousands, except per barrel
data) |
| Refinery gross
margin |
$ |
217,061 |
|
|
$ |
196,553 |
|
|
$ |
1,081,201 |
|
|
$ |
1,596,659 |
|
| Net change in lower of
cost or market inventory reserve |
(30,246 |
) |
|
112,432 |
|
|
(131,954 |
) |
|
95,835 |
|
| Refinery gross margin,
excluding LCM adjustment |
$ |
186,815 |
|
|
$ |
308,985 |
|
|
$ |
949,247 |
|
|
$ |
1,692,494 |
|
| Refinery
gross margin, excluding LCM adjustment, per refinery throughput
barrel |
$ |
8.06 |
|
|
$ |
13.13 |
|
|
$ |
10.05 |
|
|
$ |
17.95 |
|
(6) Refinery direct operating expenses per throughput barrel is
calculated by dividing direct operating expenses by total
throughput volumes for the respective periods presented. Direct
operating expenses do not include any depreciation or
amortization.(7) Cost of products sold for the combined refining
segment includes the net realized and net non-cash unrealized
hedging activity shown in the table below. The hedging gains and
losses are also included in the combined gross profit and refinery
gross margin but are not included in those measures for the
individual refineries.
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(In thousands) |
| Realized hedging gain,
net |
$ |
12,663 |
|
|
$ |
41,374 |
|
|
$ |
58,773 |
|
|
$ |
93,699 |
|
| Unrealized hedging
loss, net |
(22,976 |
) |
|
(8,160 |
) |
|
(77,674 |
) |
|
(50,233 |
) |
| Total
hedging gain (loss), net |
$ |
(10,313 |
) |
|
$ |
33,214 |
|
|
$ |
(18,901 |
) |
|
$ |
43,466 |
|
WNRL
The WNRL financial and operational data presented includes the
historical results of all assets acquired from Western in the St.
Paul Park Logistics Transaction and the TexNew Mex Pipeline
Transaction. These acquisitions from Western were transfers of
assets between entities under common control. We have
retrospectively adjusted historical financial and operational data
of WNRL, for all periods presented, to reflect the purchase and
consolidation of the purchased assets into WNRL.
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(In thousands) |
| Net sales |
$ |
606,816 |
|
|
$ |
575,897 |
|
|
$ |
2,222,718 |
|
|
$ |
2,599,867 |
|
| Operating costs and
expenses: |
|
|
|
|
|
|
|
| Cost of
products sold |
520,731 |
|
|
500,853 |
|
|
1,916,113 |
|
|
2,308,137 |
|
| Direct
operating expenses |
43,833 |
|
|
44,611 |
|
|
174,936 |
|
|
175,767 |
|
| Selling,
general and administrative expenses |
5,532 |
|
|
6,546 |
|
|
23,386 |
|
|
25,063 |
|
| Gain and
impairments on disposal of assets, net |
(91 |
) |
|
(21 |
) |
|
(1,054 |
) |
|
(278 |
) |
|
Depreciation and amortization |
9,772 |
|
|
9,568 |
|
|
39,242 |
|
|
35,384 |
|
| Total
operating costs and expenses |
579,777 |
|
|
561,557 |
|
|
2,152,623 |
|
|
2,544,073 |
|
| Operating
income |
$ |
27,039 |
|
|
$ |
14,340 |
|
|
$ |
70,095 |
|
|
$ |
55,794 |
|
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(In thousands, except per gallon/barrel
data) |
| Pipeline and gathering
(bpd): |
|
|
|
|
|
|
|
| Mainline
movements: |
|
|
|
|
|
|
|
|
Permian/Delaware Basin system |
52,090 |
|
|
52,068 |
|
|
51,805 |
|
|
47,368 |
|
| TexNew
Mex system |
7,790 |
|
|
14,566 |
|
|
9,543 |
|
|
12,302 |
|
| Four
Corners system (1) |
49,278 |
|
|
60,115 |
|
|
53,204 |
|
|
56,079 |
|
| Gathering
(truck offloading) (bpd): |
|
|
|
|
|
|
|
|
Permian/Delaware Basin system |
16,809 |
|
|
21,865 |
|
|
17,662 |
|
|
23,617 |
|
| Four
Corners system |
8,417 |
|
|
13,589 |
|
|
10,464 |
|
|
13,438 |
|
| Terminalling,
transportation and storage (bpd): |
|
|
|
|
|
|
|
| Shipments
into and out of storage (includes asphalt) |
568,288 |
|
|
377,698 |
|
|
441,865 |
|
|
391,842 |
|
| Wholesale: |
|
|
|
|
|
|
|
| Fuel
gallons sold |
317,998 |
|
|
318,186 |
|
|
1,258,027 |
|
|
1,237,994 |
|
| Fuel
gallons sold to retail (included in fuel gallons sold, above) |
81,521 |
|
|
78,780 |
|
|
332,214 |
|
|
314,604 |
|
| Fuel
margin per gallon (2) |
$ |
0.030 |
|
|
$ |
0.026 |
|
|
$ |
0.028 |
|
|
$ |
0.030 |
|
| Lubricant
gallons sold |
1,385 |
|
|
2,728 |
|
|
6,787 |
|
|
11,697 |
|
| Lubricant
margin per gallon (3) |
$ |
0.83 |
|
|
$ |
0.77 |
|
|
$ |
0.85 |
|
|
$ |
0.73 |
|
| Asphalt
trucking volume (bpd) |
5,518 |
|
|
— |
|
|
4,727 |
|
|
— |
|
| Crude oil
trucking volume (bpd) |
40,586 |
|
|
39,675 |
|
|
38,582 |
|
|
45,337 |
|
| Average
crude oil trucking revenue per barrel |
$ |
2.12 |
|
|
$ |
2.35 |
|
|
$ |
2.16 |
|
|
$ |
2.53 |
|
(1) Some barrels of crude oil in route to Western's Gallup
refinery and Permian/Delaware Basin are transported on more than
one mainline. Mainline movements for the Four Corners and Delaware
Basin systems include each barrel transported on each mainline.(2)
Fuel margin per gallon is a function of the difference between fuel
sales and cost of fuel sales divided by the number of total gallons
sold less gallons sold to our retail segment. Fuel margin per
gallon is a measure frequently used in the petroleum products
wholesale industry to measure operating results related to fuel
sales.(3) Lubricant margin per gallon is a measurement calculated
by dividing the difference between lubricant sales, net of
transportation charges, and lubricant cost of products sold by
lubricant sales. Lubricant margin is a measure frequently used in
the petroleum products wholesale industry to measure operating
results related to lubricant sales.
Retail
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(In thousands, except per gallon
data) |
| Statement of
Operations Data: |
|
|
|
|
|
|
|
| Net sales (including
intersegment sales) |
$ |
549,913 |
|
|
$ |
526,234 |
|
|
$ |
2,159,946 |
|
|
$ |
2,279,737 |
|
| Operating costs and
expenses: |
|
|
|
|
|
|
|
| Cost of
products sold (exclusive of depreciation and amortization) |
460,468 |
|
|
436,727 |
|
|
1,789,269 |
|
|
1,906,048 |
|
| Direct
operating expenses (exclusive of depreciation and
amortization) |
70,107 |
|
|
67,525 |
|
|
281,039 |
|
|
267,079 |
|
| Selling,
general and administrative expenses |
9,813 |
|
|
10,943 |
|
|
41,533 |
|
|
42,312 |
|
| Loss
(gain) and impairments on disposal of assets, net |
1 |
|
|
176 |
|
|
(234 |
) |
|
(178 |
) |
|
Depreciation and amortization |
5,571 |
|
|
5,940 |
|
|
23,193 |
|
|
23,197 |
|
| Total
operating costs and expenses |
545,960 |
|
|
521,311 |
|
|
2,134,800 |
|
|
2,238,458 |
|
| Operating
income |
$ |
3,953 |
|
|
$ |
4,923 |
|
|
$ |
25,146 |
|
|
$ |
41,279 |
|
| Key Operating
Statistics: |
|
|
|
|
|
|
|
|
Southwest Retail: |
|
|
|
|
|
|
|
| Retail
fuel gallons sold |
99,602 |
|
|
90,733 |
|
|
394,925 |
|
|
357,835 |
|
| Average
retail fuel sales price per gallon, net of excise taxes |
$ |
1.80 |
|
|
$ |
1.78 |
|
|
$ |
1.70 |
|
|
$ |
2.02 |
|
| Average
retail fuel cost per gallon, net of excise taxes |
1.64 |
|
|
1.59 |
|
|
1.54 |
|
|
1.82 |
|
| Retail
fuel margin per gallon (1) |
0.16 |
|
|
0.19 |
|
|
0.16 |
|
|
0.20 |
|
|
Merchandise sales |
$ |
81,057 |
|
|
$ |
77,640 |
|
|
$ |
330,244 |
|
|
$ |
311,654 |
|
|
Merchandise margin (2) |
30.1 |
% |
|
29.1 |
% |
|
29.4 |
% |
|
29.4 |
% |
| Operating
retail outlets at period end |
|
|
|
|
259 |
|
|
258 |
|
| Cardlock
gallons sold |
15,669 |
|
|
15,495 |
|
|
64,067 |
|
|
65,508 |
|
| Cardlock
margin per gallon |
$ |
0.120 |
|
|
$ |
0.127 |
|
|
$ |
0.122 |
|
|
$ |
0.163 |
|
| Operating
cardlocks at period end |
|
|
|
|
51 |
|
|
52 |
|
|
SuperAmerica: |
|
|
|
|
|
|
|
| Retail
fuel gallons sold |
75,738 |
|
|
76,811 |
|
|
306,825 |
|
|
304,484 |
|
| Retail
fuel margin per gallon (1) |
$ |
0.20 |
|
|
$ |
0.23 |
|
|
$ |
0.22 |
|
|
$ |
0.23 |
|
|
Merchandise sales |
87,774 |
|
|
87,343 |
|
|
367,737 |
|
|
366,401 |
|
|
Merchandise margin (2) |
25.7 |
% |
|
24.6 |
% |
|
25.9 |
% |
|
25.6 |
% |
|
Company-operated retail outlets at period end |
|
|
|
|
170 |
|
|
168 |
|
|
Franchised retail outlets at period end |
|
|
|
|
115 |
|
|
109 |
|
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(In thousands, except per gallon
data) |
| Net
Sales |
|
|
|
|
|
|
|
| Retail
fuel sales, net of excise taxes |
$ |
337,910 |
|
|
$ |
326,576 |
|
|
$ |
1,301,580 |
|
|
$ |
1,442,147 |
|
|
Merchandise sales |
168,831 |
|
|
164,983 |
|
|
697,981 |
|
|
678,055 |
|
| Cardlock
sales |
29,777 |
|
|
26,453 |
|
|
104,079 |
|
|
127,413 |
|
| Other
sales |
13,395 |
|
|
8,222 |
|
|
56,306 |
|
|
32,122 |
|
| Net
sales |
$ |
549,913 |
|
|
$ |
526,234 |
|
|
$ |
2,159,946 |
|
|
$ |
2,279,737 |
|
| Cost of
Products Sold |
|
|
|
|
|
|
|
| Retail
fuel cost of products sold, net of excise taxes |
$ |
307,739 |
|
|
$ |
291,739 |
|
|
$ |
1,170,348 |
|
|
$ |
1,298,456 |
|
|
Merchandise cost of products sold |
121,958 |
|
|
120,859 |
|
|
505,638 |
|
|
492,578 |
|
| Cardlock
cost of products sold |
27,827 |
|
|
24,429 |
|
|
95,928 |
|
|
116,506 |
|
| Other
cost of products sold |
2,944 |
|
|
(300 |
) |
|
17,355 |
|
|
(1,492 |
) |
| Cost of
products sold |
$ |
460,468 |
|
|
$ |
436,727 |
|
|
$ |
1,789,269 |
|
|
$ |
1,906,048 |
|
| Retail fuel margin per
gallon (1) |
$ |
0.17 |
|
|
$ |
0.21 |
|
|
$ |
0.19 |
|
|
$ |
0.22 |
|
(1) Retail fuel margin per gallon is a measurement calculated by
dividing the difference between retail fuel sales and cost of
retail fuel sales for our retail segment by the number of gallons
sold. Retail fuel margin per gallon is a measure frequently used in
the convenience store industry to measure operating results related
to retail fuel sales.(2) Merchandise margin is a measurement
calculated by dividing the difference between merchandise sales and
merchandise cost of products sold by merchandise sales. Merchandise
margin is a measure frequently used in the convenience store
industry to measure operating results related to merchandise
sales.
Reconciliation of Special Items
We present certain additional financial measures below that are
non-GAAP measures within the meaning of Regulation G under the
Securities Exchange Act of 1934.
We present these non-GAAP measures to provide investors with
additional information to analyze our performance from period to
period. We believe it is useful for investors to understand our
financial performance excluding these special items so that
investors can see the operating trends underlying our business.
Investors should not consider these non-GAAP measures in isolation
from, or as a substitute for, the financial information that we
report in accordance with GAAP. These non-GAAP measures reflect
subjective determinations by management and may differ from
similarly titled non-GAAP measures presented by other
companies.
| |
Three Months Ended |
| |
December 31, |
| |
2016 |
|
2015 |
| |
(In thousands, except per share
data) |
| Reported diluted
earnings (loss) per share |
$ |
(0.09 |
) |
|
$ |
0.14 |
|
| Income (loss) before
income taxes |
$ |
(13,364 |
) |
|
$ |
1,464 |
|
| Special items: |
|
|
|
| Loss
(gain) and impairments on disposal of assets, net |
(90 |
) |
|
208 |
|
| Merger
and reorganization costs |
8,453 |
|
|
— |
|
|
Unrealized loss on commodity hedging transactions |
22,976 |
|
|
8,160 |
|
| Net
change in lower of cost or market inventory reserve |
(30,895 |
) |
|
113,667 |
|
| Loss on
extinguishment of debt |
3,916 |
|
|
— |
|
| Earnings
(loss) before income taxes excluding special items |
(9,004 |
) |
|
123,499 |
|
| Recomputed income taxes
after special items (1) |
11,029 |
|
|
(28,737 |
) |
| Net
income (loss) excluding special items |
2,025 |
|
|
94,762 |
|
| Net income attributable
to non-controlling interests |
9,795 |
|
|
42,572 |
|
| Net
income (loss) attributable to Western excluding special items |
$ |
(7,770 |
) |
|
$ |
52,190 |
|
| Diluted
earnings (loss) per share excluding special items |
$ |
(0.07 |
) |
|
$ |
0.56 |
|
(1) We recompute income taxes after deducting special items and
earnings attributable to non-controlling interests.
Investor and Analyst Contact:
Jeffrey S. Beyersdorfer
(602) 286-1530
Michelle Clemente
(602) 286-1533
Media Contact:
Gary W. Hanson
(602) 286-1777
Grafico Azioni Western Refining (NYSE:WNR)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Western Refining (NYSE:WNR)
Storico
Da Giu 2023 a Giu 2024
