Northern Tier Energy LP — Morgan Stanley Refining Corporate Access Day 2016
22 slides from Northern Tier Energy LP's conference presentation, May 12, 2016
Slide 1: Morgan Stanley Refining Corporate Access Day
May 12, 2016 Morgan Stanley Refining Corporate Access Day Filed by Northern Tier Energy LP Pursuant to Rule 425 under the Securities Act of 1933 And deemed filed pursuant to Rule 14a-12 Under the Securities Exchange Act of 1934 Subject Company: Northern Tier Energy LP Form S-4 File No.: 333-209031 O
Slide 2: Forward Looking Statements
Forward Looking Statements Forward-Looking Statements This presentation contains forward-looking statements. The forward-looking statements contained herein include statements about, among other things, future: advantageous access to crude oil supplies and the attractiveness of our refined product o
Slide 3: Key Business Highlights
Key Business Highlights Strategically-Located Refinery with Advantaged Access to Crude Oil Supplies and Attractive Refined Product Outlets Integrated Refining, Marketing, Retail, and Logistics Operations Flexible Refinery with Operational Redundancies Refinery Track Record of Safe Operations Low Lev
Slide 4: Northern Tier Overview
Gasoline 46% Northern Tier Overview Integrated refining, marketing, retail, and logistics assets operating as a variable distribution publicly traded partnership. St. Paul Park Refinery Product Yields1 St. Paul Park Refinery Feedstocks1 Total Input: 100,609 bpd Total Yield: 100,793 bpd 1Quarter Ende
Slide 5: Flexible Refinery with Crude Oil Advantage
Redundant refining assets, allowing for higher refinery utilization and increased maintenance flexibility Refinery configuration allows it to process a variety of light, heavy, sweet and sour crude oils, most of which have historically priced on average below WTI Compliance with currently known pros
Slide 6: Refinery Benchmarking
Refinery Benchmarking Source: Company filings.
Slide 7: Integrated Marketing Channel
Integrated Marketing Channel Northern Tier’s integrated marketing network included 169 company-operated and 114 franchised SuperAmerica convenience stores as of March 31, 2016 Approximately 270 stores are located in Minnesota with a majority clustered in the Twin Cities metropolitan area 40% - 50% o
Slide 8: Growth Strategy
Growth Strategy Organic Slate of high return projects (IRR in excess of 30%) which should improve yields of higher value light products, efficiency of operations, and/or crude oil slate flexibility: Projects underway intended to: replace the desalters to increase crude oil input flexibility No. 1 cr
Slide 9: Crude Unit Desalter Project
Crude Unit Desalter Project Replace Existing Single Stage Desalters with State of the Art Two Stage Desalters, intended to: Gain optionality to replace up to 10 MBPSD of Canadian Syncrude with higher valued crude oils Expected $4.50/bbl margin benefit based on 5-year average (2011 – 2015) historical
Slide 10: No. 2 Crude Unit and Diesel Hydrotreater Revamp Projects
No. 2 Crude Unit and Diesel Hydrotreater Revamp Projects Increase crude oil throughput capability by up to 4 MBPSD while increasing diesel recovery by 2% Expected $11/bbl Syncrude or similar crude oil margin benefit to overhead processing limits based on 5-year average (2011 – 2015) historical margi
Slide 11: Solvent Deasphalting Project
Solvent Deasphalting Project Upgrade residual oil for conversion to gasoline and diesel by utilizing excess FCC capacity Expected $31.50/bbl project light to heavy product spread benefit based on 5-year (2011-2015) average historical prices1 Expected 60% light product yield from unit Pitch yield fro
Slide 12: Bakken First Purchase Strategy
Bakken First Purchase Strategy Source: Company Information We Strive to Optimize Our First Purchases in the Bakken Field Goal: Optionality to Source all Bakken Crude Oil from the Field Goal: Increase Gross Margin by Acquiring the Best Quality Crude Oil for our Process Configuration
Slide 13: WNR/NTI Strategic Combination
WNR/NTI Strategic Combination On December 21, 2015, WNR and Northern Tier Energy announced a merger on the following terms: On April 19th, WNR filed a second amendment to S-4 Registration Statement that is currently undergoing the customary SEC review. In connection with this amendment, Northern Tie
Slide 14: Organizational Structure
Organizational Structure $300 mm Revolving Credit Facility $300 mm Senior Unsecured Notes due February 2023 Northern Tier Energy LLC Northern Tier Energy LLC Operating Subs Western Refining Logistics Operating Subs Western Refining Logistics, LP $500 mm Revolving Credit Facility $350 mm Senior Secur
Slide 15: Key Business Highlights
Key Business Highlights Strategically-Located Refinery with Advantaged Access to Crude Oil Supplies and Attractive Refined Product Outlets Integrated Refining, Marketing, Retail, and Logistics Operations Flexible Refinery with Operational Redundancies Refinery Track Record of Safe Operations Low Lev
Slide 16: Appendix
NORTHERN TIER APPENDIX
Slide 17: Q1 2016 Financial Summary
Q1 2016 Financial Summary 1 Gross margin data includes the impact of the lower of cost or market inventory adjustment which is depicted by dotted lines. See page 19 for the components used in this calculation (revenue, cost of sales, and lower of cost or market inventory adjustment). 2See page 20 fo
Slide 18: Key Refining Performance Metrics
Key Refining Performance Metrics 1Gross margin data for 2014 and 2015 excludes the impact of a lower of cost or market inventory adjustment. See page 19 for the components used in this calculation (revenue, cost of sales, and lower of cost or market inventory adjustment). 2Typically, 80% of our prod
Slide 19: Refining Operating Information Per Barrel of Throughput Reconciliation
Refining Operating Information Per Barrel of Throughput Reconciliation ($ in millions, unless otherwise indicated) ($ in millions unless otherwise indicated) 2013 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 2015 Q1 2016 Refinery gross margin per barrel: Refinery revenue $4,536.0 $5,097.7 $689.6 $839.8 $762
Slide 20: Adjusted EBITDA & Cash Available for Distribution Reconciliation
Adjusted EBITDA & Cash Available for Distribution Reconciliation 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Net Income (Loss) $71.5 $57.9 $96.2 $16.0 $111.2 $128.9 $103.5 ($12.6) $14.7 Adjustments: Interest expense 6.2 6.2 6.7 7.5 7.5 7.5 7.5 6.2 6.5 Income tax provision 0.1 1.5 1.9 3.6 0.8 2.9 3.6 1.1 0.6 Dep
Slide 21: Organic Growth Projects: Forecasted Net Income to EBITDA Reconciliation
Organic Growth Projects: Reconciliation of Annual Forecasted Net Income to Annual Forecasted EBITDA Annual Forecasted Net Income1 $24.0 Add: Estimated Depreciation and Amortization 3.0 Annual Forecasted EBITDA $27.0 ($ in millions) 1Based primarily on average crude prices, product netbacks, and othe
Slide 22: Non-GAAP Measures
Non-GAAP Measures This presentation includes Non-GAAP financial and performance measures, including: EBITDA and Adjusted EBITDA Adjusted EBITDA is defined as net income (loss) before interest expense, income taxes and depreciation and amortization, adjusted for depreciation from the Minnesota Pipe L
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