• Net income attributable to limited partners, $14.0 million; Distributable cash flow of $24.7 million
  • Increased quarterly distribution to $0.4225 per unit; 11th consecutive increase since IPO
  • Completed purchase of St. Paul Park refinery logistics assets for $210 million
  • Completed $193 million equity offering; increased revolver to $500 million

EL PASO, Texas, Oct. 31, 2016 (GLOBE NEWSWIRE) -- Western Refining Logistics, LP (NYSE:WNRL) today reported third quarter 2016 net income attributable to limited partners of $14.0 million, or $0.23 per common limited partner unit, which compares to $16.5 million and $0.35, respectively, in the third quarter of 2015. Third quarter 2016 EBITDA was $29.1 million and distributable cash flow was $24.7 million; this compares to $27.7 million and $18.6 million, respectively, for the third quarter of 2015.

"During the quarter, we acquired St. Paul Park refinery storage and terminalling assets, which expands our geographical diversity," said Jeff Stevens, President and Chief Executive Officer of WNRL's general partner.   "We successfully completed an equity offering to fund the acquisition and expanded our revolver to $500 million to position us for further growth. We believe we have sufficient liquidity to fund our business plan for the foreseeable future.

"WNRL delivered good results for the quarter, demonstrating the locational advantage of our asset base in the Delaware Basin. We've completed pipeline connections to new production, which will help increase our pipeline and gathering volumes. This not only benefits WNRL, but our sponsor Western Refining also benefits from increased volumes of high quality, advantaged crude oil," continued Stevens.

On October 24, 2016, the board of directors declared a quarterly cash distribution for the third quarter 2016 of $0.4225 per unit, or $1.69 per unit, on an annualized basis. This distribution represents a 15% compound annual growth rate since WNRL's October 2013 initial public offering.

Stevens concluded, "Delaware Basin rig activity and crude oil production growth estimates continue to be encouraging. We believe we are well-positioned to increase EBITDA and distributions as crude oil production increases. Additionally, WNRL will benefit from the geographic diversification and growth potential as a result of the St. Paul Park logistics assets acquisition. We continue to be excited about the strategic locations of our assets and the growth potential of WNRL."

Conference Call Information

On Tuesday, November 1, 2016, at 4:00 p.m. ET, WNRL will hold a webcast and conference call to discuss the reported results and provide an update on partnership operations. The webcast can be accessed at Western Refining Logistics, LP's website, www.wnrl.com. The call can also be heard by dialing (844) 831-3028 or (315) 625-6887, pass code: 83728384. The audio replay will be available two hours after the end of the call through November 15, 2016 by dialing (855) 859-2056 or (404) 537-3406, pass code: 83728384.

About Western Refining Logistics, LP

Western Refining Logistics, LP is principally a fee-based, growth-oriented master limited partnership formed by Western Refining, Inc. (NYSE:WNR) to own, operate, develop and acquire terminals, storage tanks, pipelines and other logistics assets related to the terminalling, transportation and storage of crude oil and refined products. Headquartered in El Paso, Texas, Western Refining Logistics, LP's assets include approximately 692 miles of pipelines, approximately 12.4 million barrels of active storage capacity, distribution of wholesale petroleum products and crude oil trucking.

More information about Western Refining Logistics, LP is available at www.wnrl.com.

Non-GAAP Financial Measures

In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP), management utilizes non-GAAP measures to facilitate comparisons of past performance. This press release and supporting schedules include the non-GAAP measures Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Distributable Cash Flow. We believe certain investors and financial analysts use EBITDA and Distributable Cash Flow to evaluate WNRL's financial performance between periods and to compare WNRL's performance to certain competitors. We believe certain investors and financial analysts use Distributable Cash Flow to determine the amount of cash available for distribution to our unitholders. These additional financial measures are reconciled from the most directly comparable measures as reported in accordance with GAAP and should be viewed in addition to, and not in lieu of, financial information that we report in accordance with GAAP.

Cautionary Statement on Forward-Looking Statements

This press release contains forward-looking statements. The forward-looking statements reflect WNRL's current expectation regarding future events, results or outcomes. The forward-looking statements contained herein include statements related to, among other things: WNRL's positioning for continued growth; WNRL's ability to fund its business plan in the future;  the locational advantage of WNRL's assets in the Delaware Basin; the ability of WNRL's new pipeline connections to increase its pipeline and gathering volumes; growing rig activity and crude oil production in the Delaware Basin and WNRL's ability to increase EBITDA and distributions as crude oil production increases; and WNRL's ability to benefit from the St. Paul Park logistics assets acquisition.  These statements are subject to the general risks inherent in WNRL's business. These expectations may or may not be realized and some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, WNRL's business and operations involve numerous risks and uncertainties, many of which are beyond its control, which could result in WNRL's expectations not being realized, or otherwise materially affect WNRL's financial condition, results of operations, and cash flows. Additional information relating to the uncertainties affecting WNRL's business is contained in its filings with the Securities and Exchange Commission to which you are referred. The forward-looking statements are only as of the date made. Except as required by law, WNRL does not undertake any obligation to (and expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events.

Results of Operations

The following tables set forth WNRL's summary historical financial and operating data for the periods indicated below:
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2016   2015   2016   2015
  (Unaudited)
  (In thousands, except per unit data)
Revenues:              
Fee based:              
Affiliate $ 51,749     $ 58,111     $ 157,642     $ 151,054  
Third-party 814     787     2,181     2,089  
Sales based:              
Affiliate 131,405     158,848     355,459     456,195  
Third-party 385,293     462,924     1,100,620     1,414,632  
Total revenues 569,261     680,670     1,615,902     2,023,970  
Operating costs and expenses:              
Cost of products sold:              
Affiliate 128,792     156,388     347,811     449,087  
Third-party 366,744     445,169     1,047,571     1,358,197  
Operating and maintenance expenses 43,454     45,927     131,103     131,156  
Selling, general and administrative expenses 6,483     5,812     17,854     18,517  
Gain on disposal of assets, net (62 )   (13 )   (963 )   (257 )
Depreciation and amortization 10,579     8,963     29,470     25,816  
Total operating costs and expenses 555,990     662,246     1,572,846     1,982,516  
Operating income 13,271     18,424     43,056     41,454  
Other income (expense):              
Interest and debt expense (6,148 )   (6,204 )   (19,614 )   (16,416 )
Other, net 17     16     (87 )   51  
Net income before income taxes 7,140     12,236     23,355     25,089  
Provision for income taxes (282 )   (3 )   (760 )   (354 )
Net income 6,858     12,233     22,595     24,735  
Less net loss attributable to General Partner (7,165 )   (4,260 )   (23,309 )   (22,996 )
Net income attributable to limited partners $ 14,023     $ 16,493     $ 45,904     $ 47,731  
               
Net income per limited partner unit:              
Common - basic $ 0.23     $ 0.35     $ 0.83     $ 1.01  
Common - diluted 0.23     0.35     0.83     1.01  
Subordinated - basic and diluted 0.25     0.35     0.89     1.01  
               
Weighted average limited partner units outstanding:              
Common - basic 30,884     24,017     27,260     24,006  
Common - diluted 30,901     24,024     27,274     24,024  
Subordinated - basic and diluted 22,811     22,811     22,811     22,811  

  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2016   2015   2016   2015
  (Unaudited)
  (In thousands)
Cash Flow Data              
Net cash provided by (used in):              
Operating activities $ 33,293     $ 17,253     $ 80,709     $ 53,410  
Investing activities (8,502 )   (11,395 )   (23,613 )   (53,255 )
Financing activities (25,811 )   (13,036 )   (85,159 )   16,919  
Capital expenditures 8,530     11,558     24,618     53,708  
Other Data              
EBITDA (1) $ 29,090     $ 27,683     $ 89,384     $ 78,959  
Distributable cash flow (1) 24,704     18,648     72,322     57,857  
Balance Sheet Data (at end of period)              
Cash and cash equivalents         $ 16,542     $ 71,372  
Property, plant and equipment, net         422,006     426,093  
Total assets         582,730     643,385  
Total liabilities         478,287     434,940  
Division equity             236,503  
Partners' capital         104,443     (28,058 )
Total liabilities, division equity and partners' capital         582,730     643,385  

(1) We define EBITDA as earnings before interest and debt expense, provision for income taxes and depreciation and amortization. We define Distributable Cash Flow as EBITDA plus the change in deferred revenues, less interest accruals, income taxes paid, maintenance capital expenditures and distributions declared on our TexNew Mex units. The GAAP performance measure most directly comparable to EBITDA is net income. The GAAP liquidity measure most directly comparable to EBITDA and distributable cash flow is net cash provided by operating activities. These non-GAAP financial measures should not be considered alternatives to GAAP net income or net cash provided by operating activities. 

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:

  • EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
  • EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt;
  • EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and
  • EBITDA, as we calculate it, may differ from the EBITDA calculations of our affiliates or other companies in our industry, thereby limiting its usefulness as a comparative measure.

EBITDA and Distributable Cash Flow are used as supplemental financial measures by management and by external users of our financial statements, such as investors and commercial banks, to assess:
  • our operating performance as compared to those of other companies in the midstream energy industry, without regard to financial methods, historical cost basis or capital structure;
  • the ability of our assets to generate sufficient cash 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.

Distributable Cash Flow is a standard used by the investment community with respect to publicly traded partnerships because the value of a partnership unit is, in part, measured by its yield. Yield is based on the amount of cash distributions a partnership can pay to a unitholder. Although distributable cash flow is a liquidity measure, it is presented in this reconciliation to net income as supplemental information.

We believe that the presentation of these non-GAAP measures provides useful information to investors in assessing our financial condition and results of operations. These non-GAAP measures should not be considered as alternatives to net income or any other measure of financial performance presented in accordance with GAAP. EBITDA excludes some, but not all, items that affect net income attributable to limited partners. These non-GAAP measures may vary from those of other companies. As a result, EBITDA and Distributable Cash Flow as presented herein may not be comparable to similarly titled measures of other companies.

The calculation of EBITDA and Distributable Cash Flow includes the results of operations for the St. Paul Park Logistics Assets subsequent to the St. Paul Park Logistics Transaction and the TexNew Mex Pipeline System for the three and nine months ended September 30, 2016. The results of operations for the St. Paul Park Logistics Assets and the TexNew Mex Pipeline System are excluded from the EBITDA and Distributable Cash Flow calculations for the comparable periods in the prior year because a retrospective adjustment of these performance measures is not a representative measure of performance results.

The following table reconciles net income attributable to limited partners to EBITDA for the periods presented and Distributable Cash Flow for the three and nine months ended September 30, 2016 and 2015, respectively.
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2016   2015   2016   2015
  (Unaudited)
  (In thousands)
Net income attributable to limited partners $ 14,023     $ 16,493     $ 45,904     $ 47,731  
Interest and debt expense 6,148     6,204     19,614     16,416  
Provision for income taxes 282     3     760     354  
Depreciation and amortization 8,637     4,983     23,106     14,458  
EBITDA 29,090     27,683     89,384     78,959  
               
Change in deferred revenues 4,460     (218 )   8,138     2,229  
Interest accruals (6,377 )   (5,858 )   (19,158 )   (15,491 )
Income taxes paid (150 )   (156 )   (244 )   (737 )
Maintenance capital expenditures (2,319 )   (2,803 )   (5,798 )   (7,885 )
Other             782  
Distributable cash flow $ 24,704     $ 18,648     $ 72,322     $ 57,857  

Logistics Segment
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2016   2015   2016   2015
  (Unaudited)
  (In thousands, except key operating statistics)
Statement of Operations Data:              
Fee based revenues:              
Affiliate $ 42,319     $ 46,669     $ 126,288     $ 117,723  
Third-party 814     787     2,181     2,089  
Total revenues 43,133     47,456     128,469     119,812  
Operating costs and expenses:              
Operating and maintenance expenses 25,241     26,063     75,732     73,621  
General and administrative expenses 629     303     2,000     2,168  
Loss (gain) on disposal of assets, net (12 )   124     (17 )   124  
Depreciation and amortization 8,581     7,817     25,083     22,486  
Total operating costs and expenses 34,439     34,307     102,798     98,399  
Operating income $ 8,694     $ 13,149     $ 25,671     $ 21,413  
Key Operating Statistics:              
Pipeline and gathering (bpd):              
Mainline movements (1):              
Permian/Delaware Basin system 49,709     56,745     51,709     45,784  
Four Corners system 53,070     66,602     54,523     54,719  
TexNew Mex system 7,504     14,834     10,132     6,131  
Gathering (truck offloading):              
Permian/Delaware Basin system 15,514     25,961     17,948     24,207  
Four Corners system 9,577     16,487     11,151     13,387  
Pipeline Gathering and Injection system:              
Permian/Delaware Basin system 15,229     8,458     11,486     5,353  
Four Corners system 21,776     28,841     24,470     23,859  
TexNew Mex system 1,669         674      
Tank storage capacity (bbls) (2) 959,087     651,545     877,899     630,761  
Terminalling, transportation and storage:              
Shipments into and out of storage (bpd) (includes asphalt) 416,761     408,787     399,415     396,506  
Terminal storage capacity (bbls) (2) 8,082,734     7,420,754     7,619,637     7,464,236  

(1) Some barrels of crude oil in route to Western's Gallup refinery and Permian/Delaware Basin are transported on more than one of our mainlines. Mainline movements for the Four Corners and Delaware Basin systems include each barrel transported on each mainline. During the second quarter of 2015, we began shipping crude oil from the Four Corners system, through the TexNew Mex Pipeline System, to the Permian/Delaware system.

(2) Storage shell capacities represent weighted-average capacities for the periods indicated.

Wholesale Segment
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2016   2015   2016   2015
  (Unaudited)
  (In thousands, except key operating stats)
Statement of Operations Data:              
Fee based revenues (1):              
Affiliate $ 9,430     $ 11,442     $ 31,354     $ 33,331  
Sales based revenues (1):              
Affiliate 131,405     158,848     355,459     456,195  
Third-party 385,293     462,924     1,100,620     1,414,632  
Total revenues 526,128     633,214     1,487,433     1,904,158  
Operating costs and expenses:              
Cost of products sold:              
Affiliate 128,792     156,388     347,811     449,087  
Third-party 366,744     445,169     1,047,571     1,358,197  
Operating and maintenance expenses 18,213     19,864     55,371     57,535  
Selling, general and administrative expenses 2,065     2,269     6,123     6,715  
Gain on disposal of assets, net (50 )   (137 )   (946 )   (381 )
Depreciation and amortization 1,998     1,146     4,387     3,330  
Total operating costs and expenses 517,762     624,699     1,460,317     1,874,483  
Operating income $ 8,366     $ 8,515     $ 27,116     $ 29,675  
Key Operating Statistics:              
Fuel gallons sold (in thousands) 313,600     305,566     940,029     919,808  
Fuel gallons sold to retail (included in fuel gallons sold above) (in thousands) 87,131     81,538     250,693     235,824  
Fuel margin per gallon (2) $ 0.030     $ 0.029     $ 0.028     $ 0.031  
Lubricant gallons sold (in thousands) 1,355     2,998     5,402     8,969  
Lubricant margin per gallon (3) $ 1.05     $ 0.70     $ 0.85     $ 0.71  
Asphalt trucking volume (bpd) 5,620         4,461      
Crude oil trucking volume (bpd) 36,144     49,620     37,909     47,245  
Average crude oil revenue per barrel $ 2.11     $ 2.51     $ 2.17     $ 2.58  

(1) All wholesale fee based revenues are generated through fees charged to Western's refining segment for truck transportation and delivery of crude oil and asphalt. Affiliate and third-party sales based revenues result from sales of refined products to Western and third-party customers at a delivered price that includes charges for product transportation.

(2) Fuel margin per gallon is a measurement calculated by dividing the difference between fuel sales, net of transportation charges, and cost of fuel sales for our wholesale business by the number of gallons sold. 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 the number of gallons sold. Lubricant margin is a measure frequently used in the petroleum products wholesale industry to measure operating results related to lubricant sales.
Investor and Analyst Contact:Michelle Clemente(602) 286-1533Jeffrey S. Beyersdorfer(602) 286-1530Retail Investors Contact:Alpha IR GroupDylan SchweitzerChris Hodges(312) 445-2870WNRL@alpha-ir.comMedia Contact:Gary W. Hanson(602) 286-1777

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