Fourth Quarter and Year Ended 2012

Earnings Conference Call and Webcast

March 14, 2013

Forward Looking Statements

1

The

following

information

contains

forward-looking

statements

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

of

1995.

These

forward-looking statements are based on management’s current expectations and beliefs, as well as a number of assumptions concerning future events. 

You

can

identify

forward-looking

statements

by

words

such

as

“anticipate,”

“believe,”

“estimate,”

“forecast,”

“project,”

“could,”

“may,”

“should,”

“would,”

“will

or

other

similar

expression

that

convey

the

uncertainty

of

future

events

or

outcomes.

These

forward-looking

statements

are

based

on

our

current

expectations

and

beliefs

concerning

future

developments

and

their

potential

effect

on

us.

While

management

believes

that

these

forward-looking

statements

are

reasonable

as

and

when

made,

there

can

be

no

assurance

that

future

developments

affecting

us

will

be

those

that

we

anticipate.

All

comments

concerning

our

expectations

for

future

revenues

and

operating

results

are

based

on

our

forecasts

for

our

existing

operations

and

do

not

include

the

potential

impact

of

any

future

acquisitions.

Our

forward-looking

statements

involve

significant

risks

and

uncertainties

(some

of

which

are

beyond

our

control)

and

assumptions

that

could

cause

actual

results

to

differ

materially

from

our

historical

experience

and

our

present

expectations

or

projections. 

Important

factors

that

could

cause

actual

results

to

differ

materially

from

those

in

the

forward-looking

statements

include,

but

are

not

limited

to,

the

overall

demand

for

hydrocarbon

products,

fuels

and

other

refined

products;

our

ability

to

produce

products

and

fuels

that

meet

our

customers’

unique

and

precise

specifications;

the

impact

of

fluctuations

and

rapid

increases

or

decreases

in

crude

oil,

refined

products,

fuel

and

utility

services

prices

and

crack

spreads,

including

the

impact

of

these

factors

on

our

liquidity;

fluctuations

in

refinery

capacity;

accidents

or

other

unscheduled

shutdowns

or

disruptions

affecting

our

refinery,

machinery,

or

equipment,

or

those

of

our

suppliers

or

customers;

changes

in

the

cost

or

availability

of

transportation

for

feedstocks

and

refined

products;

the

results

of

our

hedging

and

other

risk

management

activities;

our

ability

to

comply

with

covenants

contained

in

our

debt

instruments;

labor

relations;

relationships

with

our

partners

and

franchisees;

successful

integration

and

future

performance

of

acquired

assets,

businesses

or

third-party

product

supply

and

processing

relationships;

our

access

to

capital

to

fund

expansions,

acquisitions

and

our

working

capital

needs

and

our

ability

to

obtain

debt

or

equity

financing

on

satisfactory

terms;

currently

unknown

liabilities

in

connection

with

the

Marathon

Acquisition

(as

defined

herein);

environmental

liabilities

or

events

that

are

not

covered

by

an

indemnity,

insurance

or

existing

reserves;

dependence

on

one

principal

supplier

for

merchandise;

maintenance

of

our

credit

ratings

and

ability

to

receive

open

credit

lines

from

our

suppliers;

the

effects

of

competition;

continued

creditworthiness

of,

and

performance

by,

counterparties;

the

impact

of

current

and

future

laws,

rulings

and

governmental

regulations,

including

guidance

related

to

the

Dodd-Frank

Wall

Street

Reform

and

Consumer

Protection

Act;

shortages

or

cost

increases

of

power

supplies,

natural

gas,

materials

or

labor;

weather

interference

with

business

operations;

seasonal

trends

in

the

industries

in

which

we

operate;

fluctuations

in

the

debt

markets;

potential

product

liability

claims

and

other

litigation;

and

changes

in

economic

conditions,

generally,

and

in

the

markets

we

serve,

consumer

behavior,

and

travel

and

tourism

trends.

For

additional

information

regarding

known

material

factors

that

could

cause

our

actual

results

to

differ

from

our

projected

results,

please

see

Part

I,

“Item

1A.

Risk

Factors”

and

elsewhere

in

our

Form

10-K,

dated

March

14,

2013

(File

No.

001-35612).

The presentation also includes non-GAAP measures.  We believe that these non-GAAP financial measures provide useful information about our operating

performance and should not be viewed in isolation or considered as alternatives to comparable GAAP measures.  Our non-GAAP financial measures may also differ

from similarly names measures used by other companies.  See the disclosures in the “Management’s Discussion and Analysis of Financial Condition and Results of

Operations”

included in our Form 10-K, dated March 14, 2013, for additional information on the non –GAAP measures used in this presentation and

reconciliations to the most directly comparable GAAP measures.

Q4 and Full Year 2012 Financial Results

and Key Refining Performance Metrics

2

Q4 2012

Q4 2011

Full Year 2012

Full Year 2011

Net Income

$84.5 

$292.7

$197.6

$28.3

Adjusted EBITDA

162.4

66.5

739.7

430.7

Consolidated Financial Results

Key Refining Performance Metrics

1

See Appendix for reconciliation of Net Income to Adjusted EBITDA.

2

See Appendix for the components used in this calculation (revenue and cost of sales).  Gross margin per barrel is our average margin per barrel across all refined products.  Whereas the 3-2-1 crack   

spread is specific to light products only (gasoline and distillates).

3

Direct operating expenses per barrel is calculated by dividing direct operating expenses by the total barrels of throughput for the respective periods presented.

($ in millions)

Gross Margin²

($ per throughput barrel)

Group 3 3-2-1

Benchmark Crack Spread (per bbl)

Direct Operating Expenses³

($ per throughput barrel)

Throughput

(millions of barrels)

2012

2011

1

Select Balance Sheet & Cash Flow Data

3

Q4 2012

Cash and Cash Equivalents

$272.9 

Total Debt

282.5

Equity

483.8

Full Year Adjusted EBITDA

739.7

Net Debt to Full Year Adjusted EBITDA

0.0x

Cash Flow from Operations

$133.7

Cash Available for Distribution¹

116.7

Distribution per Unit

$1.27

($ in millions)

1

See Appendix for reconciliation of Net Income to Cash Available for Distribution.

Hedge Positions

4

Volume Hedged

(000 barrels)

NTI Strike Price

Gasoline

Diesel

Gasoline

Distillate

2013

Q1

504

761

$16.08

$21.40

Q2

504

761

16.08

21.40

Q3

504

761

16.08

21.40

Q4

504

761

16.08

21.40

1

30,000 barrels of gasoline per quarter and 15,000 barrels  of diesel per quarter are hedged at cracks against WCS, while the remaining barrels are hedged at cracks against WTI.

1

Expansion Capital

#2

Crude

Unit

Expansion

•Increase the processing capability of NDL crude via modifications to the #2 Crude unit, Sats

Plant, and LSR Hydrotreater

•Allows for additional crude rate capability (8,000 bpd) during periods of increased demand for

light products and more flexibility in the winter to optimize crude supply

Other

Refining

Projects

•Start up of North Dakota trucking operation to purchase crude from well head in order to

improve delivered cost of crude

•Install dedicated slurry separation column on the fuel oil product stream to capture light

product value uplift

Project

Estimated

2013 Capital

Estimated

Annual

EBITDA

Impact

#2 Crude Unit Expansion

$29

$36

Other Refining Projects

$10

$10

1

Assumes a 10% expansion of  throughput at an average gross margin of $13 per barrel.

5

1

Q1 ‘13 Operating and Full Year Capex Guidance

6

Q1 2013

Low

High

Refinery Statistics:

Total throughput (bpd)

80,000

85,000

Refined products sold (bpd)¹

75,000

80,000

Direct opex ex. turnaround ($/throughput bbl)

$4.85

Turnaround reserve ($ in mm)

$10.0

Retail Statistics:

Forecasted gallons (mm)

72.0

Retail fuel margin ($/gallon)

$0.16

Merchandise sales ($ in mm)

$80.0

Merchandise gross margin (%)

25.5%

Direct operating expense ($ in mm)

$29.0

Other Guidance ($ in mm):

SG&A

$22.0

Depreciation & amortization

$10.0

Cash interest expense

$5.1

Taxes

$0.5

Capital Program:

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Maintenance and replacement capital

$7.2

$10.4

$7.4

$6.2

Waste Water Treatment (non recurring regulatory capital)

3.8

1.9

8.7

7.2

Expansion capital

20.5

13.7

2.7

1.7

Total Planned Capital Expenditures ($ in mm)

$31.5

$26.0

$18.8

$15.1

1

GAAP Net Income and Adjusted EBITDA are based on volume of refined products sold. For Q1 2013, products sold are anticipated to be below throughput. Q1 2013 working capital will increase

given the planned inventory build leading into the April 2013 turnaround. Management anticipates to manage 2013 working capital requirements using available liquidity while not impacting the

Cash

Available

for

Distribution

in

any

given

quarter.

If

availableliquidity

is

not

sufficient

to

mitigate

working

capital

requirements,

the

board

of

directors

of

NTE

GP

LLC

may

determine

that  incremental cash reserves are required.

APPENDIX

Adjusted EBITDA Reconciliation

8

2011

2012

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

Net Income (Loss)

$(224.5) 

$(42.1) 

$2.2

$292.7

$(193.6)

$246.6 

$61.1 

$84.5

Adjustments:

Interest Expense

10.0

10.2

10.4

11.5

10.4

10.7

15.6

5.5

Income Tax Provision

0.1

(0.1)

-

-

-

0.1

7.7

2.0

Depreciation and Amortization

7.3

7.6

7.4

7.2

8.5

7.8

8.3

8.6

EBITDA Subtotal

$(207.1)

$(24.4)

$20.0

$311.4

(174.7)

$265.2

$92.7

$100.6

Minnesota Pipe Line Proportionate EBITDA

0.9

0.9

0.9

0.1

0.7

0.7

0.7

0.7

Turnaround and Related Expenses

3.3

19.2

-

0.1

3.5

11.5

2.1

9.0

Equity-based Compensation Impacts

0.3

0.4

0.4

0.5

0.4

0.5

0.5

(0.5)

Unrealized (Gains) / Losses on Derivative Activities

262.9

31.0

40.6

(292.6)

88.4

(191.3)

70.3

(35.4)

Contingent Consideration (Income) / Loss

(31.8)

(9.2)

3.4

(18.2)

65.7

0.1

38.5

-

Formation and Offering Costs

2.5

1.9

1.7

1.3

-

-

-

0.4

Loss on Early Extinguishment of Derivatives/Debt

-

-

-

-

44.6

92.2

-

50.0

Realized losses on derivative activities

52.2

81.7

112.5

63.9

52.9

67.4

44.7

37.6

Adjusted EBITDA

$83.2

$101.5

$179.5

$66.5

$81.5

$246.3

$249.5

$162.4

($ in millions)

Refining Gross Product Margin Per Barrel of

Throughput Reconciliation

9

Q4 2012

Full Year

2012

Q4 2011

Full Year

2011

Refinery Revenue

$1,127.8

$4,212.6

$946.4

$3,804.1

Refinery Costs of Sales

924.4

3,303.7

837.8

3,208.5

Refinery Gross Product Margin

$203.4

$908.9

$108.6

$595.6

Total Refinery Throughput (bpd)

90,265

83,851

83,335

81,150

Refinery Gross Product Margin Per

Barrel of Throughput

$24.49

$29.62

$14.16

$20.11

($ in millions, unless otherwise indicated)

Cash Available for Distribution Reconciliation

For the 3 months ending

12/31/12

Net income

$84.5

Adjustments:

Interest expense

5.5

Income tax provision

2.0

Depreciation and amortization

8.6

EBITDA subtotal

100.6

Minnesota Pipe Line proportionate EBITDA

0.7

Turnaround and related expenses

9.0

Equity-based compensation impacts

(0.5)

Unrealized gains on derivative activities

(35.4)

Formation and offering Costs

0.4

Loss on early extinguishment of debt

50.0

Realized losses on derivative activities

37.6

Adjusted EBITDA

162.4

Cash interest expense

(6.4)

Current tax provision

0.0

Minnesota Pipe Line proportionate EBITDA

(0.7)

Realized losses on derivative activities

(37.6)

Capital expenditures

(17.6)

Reserve for turnaround and related expenses

(10.0)

Working capital impacts

26.6

Cash Available for Distribution

$116.7

($ in millions)

10