Delaware
|
0-16203
|
84-1060803
|
(State or other jurisdiction of
incorporation or organization)
|
(Commission file number)
|
(I.R.S. Employer
Identification No.)
|
800 Gessner Road, Suite 875
Houston, Texas
|
77024
|
|
(Address of principal executive offices)
|
(Zip Code)
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
(a)
|
Financial Statements of Businesses Acquired.
|
(b)
|
Pro Forma Financial Information.
|
(c)
|
Shell Company Transactions.
|
(d)
|
Exhibits:
|
2.1*
|
|
Membership Interest Purchase Agreement dated as at June 17, 2013, by and among Tesoro Corporation, Tesoro Hawaii, LLC and Hawaii Pacific Energy, LLC. Incorporated by reference to Exhibit 2.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, filed on August 14, 2013.
|
3.1
|
|
Certificate of Amendment to the Certificate of Incorporation of the Company dated effective September 25, 2013. Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
4.1
|
|
Registration Rights Agreement dated as of September 25, 2013, by and among the Company and the Purchasers party thereto. Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.1*
|
|
Framework Agreement dated as of September 25, 2013, by and among Hawaii Pacific Energy, LLC, Tesoro Hawaii, LLC and Barclays Bank PLC. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.2*
|
|
Storage and Services Agreement dated as of September 25, 2013, by and among Tesoro Hawaii, LLC and Barclays Bank PLC. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.3
|
|
Agency and Advisory Agreement dated as of September 25, 2013, by and among Tesoro Hawaii, LLC and Barclays Bank PLC. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.4*
|
|
Inventory First Lien Security Agreement dated as of September 25, 2013, by and between Tesoro Hawaii, LLC and Wells Fargo Bank, N.A., as inventory collateral agent. Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.5*
|
|
First Lien Mortgage dated as of September 25, 2013, by and between Tesoro Hawaii, LLC and Wells Fargo Bank, N.A., as collateral agent. Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.6*
|
|
Intercreditor Agreement dated as of September 25, 2013, by and among Barclays Bank PLC, Wells Fargo Bank, N.A., as inventory collateral agent, Deutsche Bank AG New York Branch, as ABL loan collateral agent and as administrative agent pursuant to the ABL Credit Agreement, Hawaii Pacific Energy, LLC, and Tesoro Hawaii, LLC. Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.7*
|
|
Membership Interests First Lien Pledge Agreement dated as of September 25, 2013, by and between Hawaii Pacific Energy, LLC and Wells Fargo Bank, N.A., as inventory collateral agent. Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.8
|
|
Tenth Amendment to Delayed Draw Term Loan Credit Agreement dated as of September 25, 2013, by and among the Company, the Guarantors party thereto, the Lenders party thereto and Jefferies Finance LLC, as administrative agent for the Lenders. Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.9*
|
|
ABL Credit Agreement dated as of September 25, 2013, by and among Tesoro Hawaii, LLC, the other borrowers party thereto, Hawaii Pacific Energy, LLC, the Lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent and ABL loan collateral agent. Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.10*
|
|
ABL Loan Second Lien Security Agreement dated as of September 25, 2013, by and between Tesoro Hawaii, LLC and Wells Fargo Bank, National Association, as inventory collateral agent. Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.11*
|
|
ABL Loan First Lien Security Agreement dated as of September 25, 2013, by and between Tesoro Hawaii, LLC and Deutsche Bank AG New York Branch, as ABL loan collateral agent. Incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.12*
|
|
Second Lien Mortgage dated as of September 25, 2013, by and between Tesoro Hawaii, LLC and Deutsche Bank AG New York Branch, as collateral agent. Incorporated by reference to Exhibit 10.12 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.13*
|
|
Membership Interests Second Lien Pledge Agreement dated as of September 25, 2013, by and between Hawaii Pacific Energy, LLC and Deutsche Bank AG New York Branch, as ABL loan collateral agent. Incorporated by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.14*
|
|
Inventory Second Lien Security Agreement dated as of September 25, 2013, by and between Tesoro Hawaii, LLC and Deutsche Bank AG New York Branch, as collateral agent. Incorporated by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
10.15
|
|
Common Stock Purchase Agreement dated effective as of September 10, 2013, by and among the Company and the Purchasers party thereto. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 13, 2013.
|
23.1
|
Consent of Ernst & Young LLP
|
|
99.1
|
|
Press Release dated September 25, 2013. Incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on September 27, 2013.
|
99.2
|
Tesoro Hawaii’s audited combined financial statements for the years ended December 31, 2012 and 2011.
|
|
99.3
|
Tesoro Hawaii’s unaudited combined financial statements for the six months ended June 30, 2013 and 2012.
|
|
99.4
|
The unaudited combined pro forma financial information for the Company, after giving effect to the acquisition of Tesoro Hawaii and adjustments described in such pro forma financial information.
|
*
|
Schedules and similar attachments to the referenced agreements have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish supplementally a copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon request.
|
PAR PETROLEUM CORPORATION
(Registrant)
|
||||
By:
|
/s/ William Monteleone
|
|||
William Monteleone
|
||||
Chief Executive Officer
|
||||
By:
|
/s/ R. Seth Bullock
|
|||
R. Seth Bullock
|
||||
Chief Financial Officer
|
Years Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
REVENUES (a)
|
$ | 3,270,374 | $ | 3,348,119 | $ | 2,407,044 | ||||||
COSTS AND EXPENSES:
|
||||||||||||
Cost of sales (a)
|
3,056,708 | 3,212,153 | 2,278,967 | |||||||||
Operating expenses
|
140,385 | 145,531 | 120,988 | |||||||||
Selling, general and administrative expenses
|
25,465 | 22,596 | 26,477 | |||||||||
Depreciation and amortization expense
|
27,233 | 25,809 | 19,765 | |||||||||
Loss on asset disposals and impairments
|
248,348 | 1,239 | 10,611 | |||||||||
OPERATING LOSS
|
(227,765 | ) | (59,209 | ) | (49,764 | ) | ||||||
Interest income (expense)
|
1,784 | (1,469 | ) | (382 | ) | |||||||
Other income
|
41 | 522 | 1,095 | |||||||||
LOSS BEFORE INCOME TAXES
|
(225,940 | ) | (60,156 | ) | (49,051 | ) | ||||||
Income tax expense (benefit)
|
(764 | ) | 1,514 | (5,484 | ) | |||||||
NET LOSS
|
$ | (225,176 | ) | $ | (61,670 | ) | $ | (43,567 | ) | |||
SUPPLEMENTAL INFORMATION:
|
||||||||||||
(a) Includes excise taxes collected by our retail segment (excluding credits)
|
$ | 22,902 | $ | 22,270 | $ | 18,775 |
December 31,
|
||||||||
2012
|
2011
|
|||||||
(In thousands)
|
||||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash
|
$ | 1,914 | $ | 6,048 | ||||
Receivables, less allowance for doubtful accounts
|
95,189 | 129,812 | ||||||
Inventories
|
223,544 | 264,837 | ||||||
Prepayments and other current assets
|
2,409 | 1,212 | ||||||
Total Current Assets
|
323,056 | 401,909 | ||||||
PROPERTY, PLANT AND EQUIPMENT
|
||||||||
Property, plant and equipment, at cost
|
51,055 | 339,281 | ||||||
Less accumulated depreciation and amortization
|
(37,630 | ) | (140,654 | ) | ||||
Net Property, Plant and Equipment
|
13,425 | 198,627 | ||||||
OTHER NONCURRENT ASSETS
|
7,791 | 40,475 | ||||||
Total Assets
|
$ | 344,272 | $ | 641,011 | ||||
LIABILITIES AND NET PARENT INVESTMENT
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
$ | 14,546 | $ | 12,264 | ||||
Accrued liabilities
|
43,141 | 23,831 | ||||||
Deferred revenue
|
2,863 | 16,152 | ||||||
Current portion of capital lease obligations
|
187 | 135 | ||||||
Total Current Liabilities
|
60,737 | 52,382 | ||||||
DEFERRED INCOME TAXES
|
702 | 299 | ||||||
OTHER NONCURRENT LIABILITIES
|
5,388 | 9,525 | ||||||
CAPITAL LEASE OBLIGATIONS, LESS CURRENT PORTION
|
1,734 | 1,920 | ||||||
COMMITMENTS AND CONTINGENCIES (Note O)
|
||||||||
NET PARENT INVESTMENT
|
275,711 | 576,885 | ||||||
Total Liabilities and Net Parent Investment
|
$ | 344,272 | $ | 641,011 |
Net Parent Investment
|
||||
(in thousands)
|
||||
AT DECEMBER 31, 2009
|
$
|
292,611
|
||
Net loss
|
(43,567
|
)
|
||
Net change in Parent advances
|
290,779
|
|||
AT DECEMBER 31, 2010
|
539,823
|
|||
Net loss
|
(61,670
|
)
|
||
Net change in Parent advances
|
98,732
|
|||
AT DECEMBER 31, 2011
|
576,885
|
|||
Net loss
|
(225,176
|
)
|
||
Net change in Parent advances
|
(75,998
|
)
|
||
AT DECEMBER 31, 2012
|
$
|
275,711
|
Years Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
(In thousands)
|
||||||||||||
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
|
||||||||||||
Net loss
|
$ | (225,176 | ) | $ | (61,670 | ) | $ | (43,567 | ) | |||
Adjustments to reconcile net loss to net cash from (used in) operating activities:
|
||||||||||||
Depreciation and amortization expense
|
27,233 | 25,809 | 19,765 | |||||||||
Loss on asset disposals and impairments
|
248,348 | 1,239 | 10,611 | |||||||||
Stock-based compensation expense
|
6,202 | 2,408 | 2,328 | |||||||||
Provisions for bad debts
|
1,004 | (617 | ) | 1,407 | ||||||||
Deferred income taxes
|
— | — | (5,484 | ) | ||||||||
Deferred turnaround and maintenance expenditures
|
(20,841 | ) | (2,685 | ) | (41,762 | ) | ||||||
Other changes in noncurrent assets and liabilities
|
(3,746 | ) | 2,964 | 3,662 | ||||||||
Changes in current assets and current liabilities:
|
||||||||||||
Receivables
|
33,342 | (45,820 | ) | (11,130 | ) | |||||||
Inventories
|
41,293 | (406 | ) | (207,585 | ) | |||||||
Prepayments
|
(794 | ) | 369 | (82 | ) | |||||||
Accounts payable and accrued liabilities
|
3,235 | 4,586 | (15,353 | ) | ||||||||
Deferred revenue
|
(13,288 | ) | (3,111 | ) | 10,370 | |||||||
Net cash from (used in) operating activities
|
96,812 | (76,934 | ) | (276,820 | ) | |||||||
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
|
||||||||||||
Capital expenditures
|
(18,610 | ) | (14,887 | ) | (11,558 | ) | ||||||
Proceeds from asset sales
|
— | 52 | — | |||||||||
Net cash used in investing activities
|
(18,610 | ) | (14,835 | ) | (11,558 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Net cash advances by (repayments to) Parent
|
(82,336 | ) | 96,201 | 288,342 | ||||||||
Net cash from (used in) financing activities
|
(82,336 | ) | 96,201 | 288,342 | ||||||||
INCREASE (DECREASE) IN CASH
|
(4,134 | ) | 4,432 | (36 | ) | |||||||
CASH, BEGINNING OF YEAR
|
6,048 | 1,616 | 1,652 | |||||||||
CASH, END OF YEAR
|
$ | 1,914 | $ | 6,048 | $ | 1,616 | ||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES
|
||||||||||||
Capital expenditures included in accounts payable at end of year
|
$ | 354 | $ | 1,380 | $ | 517 |
|
•
|
hazardous materials disposal (such as petroleum manufacturing by-products, chemical catalysts, and sealed insulation material containing asbestos), and removal or dismantlement requirements associated with the closure of our refining facilities, terminal facilities or pipelines, including the demolition or removal of certain major processing units, buildings, tanks, pipelines or other equipment; and
|
|
•
|
removal of underground storage tanks at our owned retail stations at or near the time of closure.
|
|
•
|
there are no plans or expectations of plans to retire or dispose of these assets except as discussed in Note S;
|
|
•
|
we plan on extending the assets’ estimated economic lives through scheduled maintenance projects at our refineries and other normal repair and maintenance and by continuing to make improvements based on technological advances;
|
|
•
|
we have rarely retired similar assets in the past; and
|
|
•
|
industry practice for similar assets has historically been to extend the economic lives through regular repair and maintenance and implementation of technological advances.
|
2012
|
2011
|
|||||||
Trade receivables
|
$
|
92,270
|
$
|
128,131
|
||||
Other
|
5,555
|
2,902
|
||||||
Allowance for doubtful accounts
|
(2,636
|
)
|
(1,221
|
)
|
||||
Total Receivables, Net
|
$
|
95,189
|
$
|
129,812
|
2012
|
2011
|
|||||||
Crude oil and refined products
|
$ | 210,378 | $ | 251,206 | ||||
Materials and supplies
|
11,422 | 11,791 | ||||||
Merchandise
|
1,744 | 1,840 | ||||||
Total Inventories
|
$ | 223,544 | $ | 264,837 |
2012
|
2011
|
|||||||
Refining
|
$ | — | $ | 287,129 | ||||
Retail
|
51,055 | 52,152 | ||||||
Property, plant and equipment, at cost
|
51,055 | 339,281 | ||||||
Accumulated depreciation
|
(37,630 | ) | (140,654 | ) | ||||
Net property, plant and equipment
|
$ | 13,425 | $ | 198,627 |
2012
|
2011
|
|||||||
Deferred maintenance costs, including refinery turnarounds, net of amortization
|
$
|
—
|
$
|
25,588
|
||||
Deferred catalyst costs, net of amortization
|
—
|
4,911
|
||||||
Deferred income taxes
|
341
|
457
|
||||||
Goodwill
|
3,391
|
3,391
|
||||||
Other assets, net of amortization
|
4,059
|
6,128
|
||||||
Total Other Noncurrent Assets
|
$
|
7,791
|
$
|
40,475
|
|
•
|
level 1 - quoted prices in active markets for identical assets and liabilities;
|
|
•
|
level 2 - quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability; and
|
|
•
|
level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
December 31, 2012
|
Level 1
|
Level 2
|
Level 3
|
Total Losses
for the year ended December 31, 2012
|
||||||||||||||||
Assets:
|
||||||||||||||||||||
The Refinery and its terminal and distribution assets (a)
|
$ | — | — | — | — | $ | 247,500 |
Derivative Treatment
|
Accounting Method
|
|
Normal purchases and normal sales exception
|
Accrual accounting
|
|
All other derivatives
|
Mark-to-market accounting
|
Mark-to-Market Derivatives:
|
2012
|
2011
|
2010
|
|||||||||
Commodity Futures Contracts
|
$ | 25,284 | $ | (23,939 | ) | $ | (4,772 | ) | ||||
Commodity OTC Swap Contracts
|
(19,593 | ) | 33,592 | 5,134 | ||||||||
Total Mark-to-Market Derivatives
|
$ | 5,691 | $ | 9,653 | $ | 362 |
Mark-to-Market Derivatives
|
|||
Derivative instrument and
Year of maturity
|
Long Contract Volumes
|
||
Futures
|
|||
2013
|
655
|
2012
|
2011
|
|||||||
Asset retirement obligations
|
$ | 19,500 | $ | — | ||||
Taxes other than income taxes, primarily excise taxes
|
13,178 | 13,016 | ||||||
Employee costs
|
4,764 | 4,174 | ||||||
Accrued rent expense
|
3,492 | 3,611 | ||||||
Environmental liabilities
|
441 | 225 | ||||||
Deferred income taxes
|
341 | 457 | ||||||
Other
|
1,425 | 2,348 | ||||||
Total Accrued Liabilities
|
$ | 43,141 | $ | 23,831 |
2012
|
2011
|
|||||||
Liability for unrecognized tax benefits
|
$
|
—
|
$
|
4,196
|
||||
Environmental liabilities
|
3,209
|
3,308
|
||||||
Asset retirement obligations
|
1,733
|
1,676
|
||||||
Other
|
446
|
345
|
||||||
Total Other Noncurrent Liabilities
|
$
|
5,388
|
$
|
9,525
|
2013
|
$ | 382 | ||
2014
|
382 | |||
2015
|
382 | |||
2016
|
382 | |||
2017
|
382 | |||
Thereafter
|
840 | |||
Total minimum lease payments
|
2,750 | |||
Less amount representing interest
|
829 | |||
Capital lease obligations
|
$ | 1,921 |
2012
|
2011
|
|||||||
Balance at beginning of year
|
$
|
1,676
|
$
|
1,499
|
||||
Additions to accrual
|
19,451
|
83
|
||||||
Accretion expense
|
106
|
94
|
||||||
Balance at end of year
|
$
|
21,233
|
$
|
1,676
|
2012
|
2011
|
2010
|
||||||||||
Current:
|
||||||||||||
Federal
|
$
|
636
|
$
|
477
|
$
|
—
|
||||||
State
|
(1,400
|
)
|
1,037
|
—
|
||||||||
Deferred:
|
||||||||||||
State
|
—
|
—
|
(5,484
|
)
|
||||||||
Income tax expense (benefit)
|
$
|
(764
|
)
|
$
|
1,514
|
$
|
(5,484
|
)
|
2012
|
2011
|
|||||||
Deferred tax assets:
|
||||||||
Net operating losses
|
$
|
46,145
|
$
|
59,573
|
||||
Tax credit carryforwards
|
44,291
|
43,419
|
||||||
Accelerated depreciation and property related items
|
29,640
|
—
|
||||||
Inventory
|
9,035
|
—
|
||||||
Asset retirement obligations
|
8,293
|
656
|
||||||
Accrued compensation
|
1,035
|
869
|
||||||
Allowance for doubtful accounts
|
1,032
|
587
|
||||||
Capital lease obligations
|
757
|
805
|
||||||
Environmental liabilities
|
491
|
418
|
||||||
Other
|
110
|
2,206
|
||||||
Total deferred tax assets
|
140,829
|
108,533
|
||||||
Less: valuation allowance
|
(140,258
|
)
|
(51,113
|
)
|
||||
Deferred tax assets, net
|
571
|
57,420
|
||||||
Deferred tax liabilities:
|
||||||||
Accelerated depreciation and property related items
|
—
|
46,679
|
||||||
Deferred maintenance costs, including refinery turnarounds
|
—
|
10,020
|
||||||
Other
|
571
|
721
|
||||||
Total deferred tax liabilities
|
571
|
57,420
|
||||||
Deferred tax liabilities, net
|
$
|
—
|
$
|
—
|
2012
|
2011
|
|||||||
Current assets
|
$
|
702
|
$
|
299
|
||||
Current liabilities
|
341
|
457
|
||||||
Noncurrent assets
|
341
|
457
|
||||||
Noncurrent liabilities
|
702
|
299
|
2012
|
2011
|
2010
|
||||||||||
Income tax benefit at U.S. federal statutory rate
|
$
|
(79,079
|
)
|
$
|
(21,054
|
)
|
$
|
(17,168
|
)
|
|||
Effect of:
|
||||||||||||
State income taxes, net of federal income tax effect
|
(10,853
|
)
|
(1,869
|
)
|
(1,935
|
)
|
||||||
Valuation allowance
|
89,145
|
24,414
|
12,729
|
|||||||||
Goodwill write-off
|
—
|
—
|
871
|
|||||||||
Other
|
23
|
23
|
19
|
|||||||||
Income tax expense (benefit)
|
$
|
(764
|
)
|
$
|
1,514
|
$
|
(5,484
|
)
|
2012
|
2011
|
2010
|
||||||||||
Balance as of beginning of year
|
$
|
2,074
|
$
|
1,037
|
$
|
1,037
|
||||||
Increases related to prior year tax positions
|
—
|
1,037
|
—
|
|||||||||
Decreases related to prior year tax positions
|
(1,400
|
)
|
—
|
—
|
||||||||
Decreases related to settlements with taxing authorities
|
(674
|
)
|
—
|
—
|
||||||||
Balance as of end of year
|
$
|
—
|
$
|
2,074
|
$
|
1,037
|
2012
|
2011
|
2010
|
||||||||||
Thrift Plan
|
$
|
1,536
|
$
|
1,532
|
$
|
1,965
|
||||||
Retail Savings Plan
|
118
|
159
|
145
|
2013
|
$
|
12,262
|
||
2014
|
11,594
|
|||
2015
|
10,801
|
|||
2016
|
9,987
|
|||
2017
|
9,219
|
|||
Thereafter
|
33,616
|
|||
Total minimum rental payments
|
$
|
87,479
|
2012
|
2011
|
|||||||
Balance at beginning of year
|
$
|
3,533
|
$
|
4,062
|
||||
Additions, net
|
372
|
214
|
||||||
Expenditures
|
(255
|
)
|
(743
|
)
|
||||
Balance at end of year
|
$
|
3,650
|
$
|
3,533
|
2012
|
2011
|
2010
|
||||||||||
Revenues
|
$
|
331,053
|
$
|
227,110
|
$
|
75,295
|
||||||
Cost of sales
|
290,827
|
234,547
|
97,993
|
|||||||||
Operating expenses
|
13,038
|
11,356
|
10,718
|
|||||||||
Selling, general and administrative expenses
|
22,562
|
18,507
|
21,516
|
2012
|
2011
|
2010
|
||||||||||
Purchases of crude oil and feedstocks sold to Tesoro
|
$
|
251,950
|
$
|
208,224
|
$
|
64,692
|
||||||
Marine transportation costs
|
44,568
|
35,976
|
33,663
|
|||||||||
Gains on derivative contracts
|
(5,691
|
)
|
(9,653
|
)
|
(362
|
)
|
||||||
Total cost of sales
|
$
|
290,827
|
$
|
234,547
|
$
|
97,993
|
2012
|
2011
|
2010
|
||||||||||
Operating expenses
|
$
|
13,038
|
$
|
11,356
|
$
|
10,718
|
||||||
Selling, general and administrative expenses
|
4,927
|
5,529
|
6,075
|
|||||||||
Total corporate and national cost allocations
|
$
|
17,965
|
$
|
16,885
|
$
|
16,793
|
2012
|
2011
|
2010
|
||||||||||
Management fees
|
$
|
17,635
|
$
|
12,978
|
$
|
15,441
|
2012
|
2011
|
2010
|
||||||||||
Revenues
|
(In thousands)
|
|||||||||||
Refining:
|
||||||||||||
Refined products
|
$ | 3,159,991 | $ | 3,251,636 | $ | 2,281,862 | ||||||
Crude oil resales and other
|
34,706 | 27,963 | 55,635 | |||||||||
Retail:
|
||||||||||||
Fuel (a)
|
197,915 | 180,889 | 134,687 | |||||||||
Merchandise and other
|
34,959 | 35,400 | 34,107 | |||||||||
Intersegment sales from Refining to Retail
|
(157,197 | ) | (147,769 | ) | (99,247 | ) | ||||||
Total Revenues
|
$ | 3,270,374 | $ | 3,348,119 | $ | 2,407,044 | ||||||
Segment Operating Income (Loss)
|
||||||||||||
Refining (b)
|
$ | (222,413 | ) | $ | (55,757 | ) | $ | (49,339 | ) | |||
Retail
|
850 | (1,044 | ) | 1,903 | ||||||||
Total Segment Operating Loss
|
(221,563 | ) | (56,801 | ) | (47,436 | ) | ||||||
Unallocated costs
|
(6,202 | ) | (2,408 | ) | (2,328 | ) | ||||||
Operating Loss
|
(227,765 | ) | (59,209 | ) | (49,764 | ) | ||||||
Interest income (expense)
|
1,784 | (1,469 | ) | (382 | ) | |||||||
Other income
|
41 | 522 | 1,095 | |||||||||
Loss Before Income Taxes
|
$ | (225,940 | ) | $ | (60,156 | ) | $ | (49,051 | ) | |||
Depreciation and Amortization Expense
|
||||||||||||
Refining
|
$ | 24,670 | $ | 23,250 | $ | 17,375 | ||||||
Retail
|
2,563 | 2,559 | 2,390 | |||||||||
Total Depreciation and Amortization Expense
|
$ | 27,233 | $ | 25,809 | $ | 19,765 | ||||||
Capital Expenditures
|
||||||||||||
Refining
|
$ | 16,029 | $ | 13,206 | $ | 9,676 | ||||||
Retail
|
1,555 | 2,544 | 1,666 | |||||||||
Total Capital Expenditures
|
$ | 17,584 | $ | 15,750 | $ | 11,342 |
(a)
|
Federal and state motor fuel taxes on sales by our retail segment are included in both revenues and cost of sales in our statements of combined operations. These taxes, excluding credits, totaled $22.9 million, $22.3 million and $18.8 million for the years ended December 31, 2012, 2011 and 2010, respectively.
|
(b)
|
Includes impairment charges and asset retirement obligations of $228.0 million and $19.5 million, respectively, for the year ended December 31, 2012, as a result of the decision to cease refining operations at the Refinery, and begin the process of converting the Refinery to an import, storage and distribution terminal. Also includes goodwill write-off of $10.0 million for the year ended December 31, 2010. The loss on asset disposals and impairments is included in refining segment operating income.
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
(In thousands)
|
||||||||
Identifiable Assets:
|
||||||||
Refining
|
$ | 319,247 | $ | 614,731 | ||||
Retail
|
25,025 | 26,280 | ||||||
Total Assets
|
$ | 344,272 | $ | 641,011 |
2012
|
2011
|
2010
|
||||||||||
Hawaii Electric Industries and affiliates
|
12 | % | 15 | % | 15 | % | ||||||
U.S. Government
|
11 | % | 11 | % | 15 | % | ||||||
Aloha Petroleum
|
10 | % | 10 | % | 5 | % |
2012
|
2011
|
|||||||
U.S. Government
|
21 | % | 23 | % | ||||
Hawaii Electric Industries and affiliates
|
17 | % | 18 | % |
Six Months Ended June 30,
|
||||||||
2013
|
2012
|
|||||||
(In thousands)
|
||||||||
REVENUES (a)
|
$ | 1,493,113 | $ | 1,662,445 | ||||
COSTS AND EXPENSES:
|
||||||||
Cost of sales (a)
|
1,426,976 | 1,534,190 | ||||||
Operating expenses
|
61,189 | 70,414 | ||||||
Selling, general and administrative expenses
|
11,412 | 12,964 | ||||||
Depreciation and amortization expense
|
1,332 | 13,837 | ||||||
(Gain) loss on asset disposals and impairments
|
(14,340 | ) | 370 | |||||
OPERATING INCOME
|
6,544 | 30,670 | ||||||
Interest income (expense), net
|
(61 | ) | 1,776 | |||||
EARNINGS BEFORE INCOME TAXES
|
6,483 | 32,446 | ||||||
Income tax expense (benefit)
|
172 | (600 | ) | |||||
NET EARNINGS
|
$ | 6,311 | $ | 33,046 | ||||
SUPPLEMENTAL INFORMATION:
|
||||||||
(a) Includes excise taxes collected by our retail segment (excluding credits)
|
$ | 10,600 | $ | 11,424 |
June 30,
2013
|
December 31,
2012
|
|||||||
(In thousands)
|
||||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash
|
$ | 2,015 | $ | 1,914 | ||||
Receivables, less allowance for doubtful accounts
|
80,202 | 95,189 | ||||||
Inventories
|
59,901 | 223,544 | ||||||
Prepayments and other current assets
|
2,291 | 2,409 | ||||||
Total Current Assets
|
144,409 | 323,056 | ||||||
PROPERTY, PLANT AND EQUIPMENT
|
||||||||
Property, plant and equipment, at cost
|
52,650 | 51,055 | ||||||
Less accumulated depreciation and amortization
|
(38,962 | ) | (37,630 | ) | ||||
Net Property, Plant and Equipment
|
13,688 | 13,425 | ||||||
OTHER NONCURRENT ASSETS
|
8,297 | 7,791 | ||||||
Total Assets
|
$ | 166,394 | $ | 344,272 | ||||
LIABILITIES AND NET PARENT INVESTMENT
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
$ | 7,880 | $ | 14,546 | ||||
Accrued liabilities
|
37,472 | 43,141 | ||||||
Deferred revenue
|
7,503 | 2,863 | ||||||
Current portion of capital lease obligations
|
197 | 187 | ||||||
Total Current Liabilities
|
53,052 | 60,737 | ||||||
DEFERRED INCOME TAXES
|
687 | 702 | ||||||
OTHER NONCURRENT LIABILITIES
|
5,689 | 5,388 | ||||||
CAPITAL LEASE OBLIGATIONS, LESS CURRENT PORTION
|
1,633 | 1,734 | ||||||
COMMITMENTS AND CONTINGENCIES (Note H)
|
||||||||
NET PARENT INVESTMENT
|
105,333 | 275,711 | ||||||
Total Liabilities and Net Parent Investment
|
$ | 166,394 | $ | 344,272 |
Net Parent Investment
|
||||
(in thousands)
|
||||
AT DECEMBER 31, 2012
|
$
|
275,711
|
||
Net earnings
|
6,311
|
|||
Net change in Parent advances
|
(176,689
|
)
|
||
AT JUNE 30, 2013
|
$
|
105,333
|
Six Months Ended
|
||||||||
June 30, 2013
|
June 30, 2012
|
|||||||
(In thousands)
|
||||||||
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
|
||||||||
Net earnings
|
$ | 6,311 | $ | 33,046 | ||||
Adjustments to reconcile net earnings to net cash from operating activities:
|
||||||||
Depreciation and amortization expense
|
1,332 | 13,837 | ||||||
Loss (gain) on asset disposals and impairments
|
(14,340 | ) | 370 | |||||
Stock-based compensation expense
|
2,234 | 625 | ||||||
Provisions for bad debts
|
(200 | ) | (861 | ) | ||||
Deferred income taxes
|
— | 830 | ||||||
Deferred turnaround and maintenance expenditures
|
— | (19,949 | ) | |||||
Other changes in noncurrent assets and liabilities
|
(212 | ) | (4,102 | ) | ||||
Changes in current assets and current liabilities:
|
||||||||
Receivables
|
15,187 | 33,467 | ||||||
Inventories
|
163,643 | 118,643 | ||||||
Prepayments
|
104 | (230 | ) | |||||
Accounts payable and accrued liabilities
|
2,342 | 3,306 | ||||||
Deferred revenue
|
4,642 | (2,050 | ) | |||||
Net cash from operating activities
|
181,043 | 176,932 | ||||||
CASH FLOWS USED IN INVESTING ACTIVITIES
|
||||||||
Capital expenditures
|
(1,929 | ) | (10,209 | ) | ||||
Net cash used in investing activities
|
(1,929 | ) | (10,209 | ) | ||||
CASH FLOWS USED IN FINANCING ACTIVITIES
|
||||||||
Net cash repayments to Parent
|
(179,013 | ) | (169,738 | ) | ||||
Net cash used in financing activities
|
(179,013 | ) | (169,738 | ) | ||||
INCREASE (DECREASE) IN CASH
|
101 | (3,015 | ) | |||||
CASH, BEGINNING OF PERIOD
|
1,914 | 6,048 | ||||||
CASH, END OF PERIOD
|
$ | 2,015 | $ | 3,033 | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES
|
||||||||
Capital expenditures included in accounts payable at end of period
|
$ | 20 | $ | 893 |
June 30,
2013
|
December 31,
2012
|
|||||||
Crude oil and refined products
|
$ | 46,001 | $ | 210,378 | ||||
Materials and supplies
|
12,014 | 11,422 | ||||||
Merchandise
|
1,886 | 1,744 | ||||||
Total Inventories
|
$ | 59,901 | $ | 223,544 |
June 30,
2013
|
December 31,
2012
|
|||||||
Refining
|
$ | 1,532 | $ | — | ||||
Retail
|
51,118 | 51,055 | ||||||
Property, plant and equipment, at cost
|
52,650 | 51,055 | ||||||
Accumulated depreciation
|
(38,962 | ) | (37,630 | ) | ||||
Net property, plant and equipment
|
$ | 13,688 | $ | 13,425 |
|
•
|
level 1 - quoted prices in active markets for identical assets and liabilities;
|
|
•
|
level 2 - quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability; and
|
|
•
|
level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
Derivative Treatment
|
Accounting Method
|
|
Normal purchases and normal sales exception
|
Accrual accounting
|
|
All other derivatives
|
Mark-to-market accounting
|
Six Months Ended
|
||||||||
Mark-to-Market Derivatives:
|
June 30,
2013
|
June 30,
2012
|
||||||
Commodity Futures Contracts
|
$ | (9,336 | ) | $ | 4,506 | |||
Commodity OTC Swap Contracts
|
(365 | ) | (18,121 | ) | ||||
Total Mark-to-Market Derivatives
|
$ | (9,701 | ) | $ | (13,615 | ) |
Mark-to-Market Derivatives
|
|||
Derivative instrument and
Year of maturity
|
Short Contract Volumes
|
||
Futures
|
|||
2013
|
(4,045
|
)
|
June 30,
2013
|
December 31,
2012
|
|||||||
Asset retirement obligations
|
$ | 3,055 | $ | 19,500 | ||||
Deposit for Refinery start-up costs
|
14,951 | — | ||||||
Taxes other than income taxes, primarily excise taxes
|
11,908 | 13,178 | ||||||
Employee costs
|
4,682 | 4,764 | ||||||
Accrued rent expense
|
2,178 | 3,492 | ||||||
Environmental liabilities
|
69 | 441 | ||||||
Deferred income taxes
|
334 | 341 | ||||||
Other
|
295 | 1,425 | ||||||
Total Accrued Liabilities
|
$ | 37,472 | $ | 43,141 |
Six Months Ended
|
||||||||
June 30,
2013
|
June 30,
2012
|
|||||||
Thrift Plan (a)
|
$
|
956
|
$
|
784
|
||||
Retail Savings Plan
|
78
|
51
|
(a)
|
Includes expense charged to the Company related to a profit-sharing contribution to the Thrift Plan during the six months ended June 30, 2013. This discretionary contribution will normally be made following the performance year. All employees eligible for the Thrift Plan who are employed on December 31 of the year the results are achieved are qualified to receive this contribution, even if they are not contributing to the Thrift Plan.
|
June 30,
2013
|
||||
Balance at December 31, 2012
|
$
|
3,649
|
||
Additions, net
|
273
|
|||
Expenditures
|
(430
|
)
|
||
Balance at June 30, 2013
|
$
|
3,492
|
Six Months Ended
|
||||||||
June 30,
2013
|
June 30,
2012
|
|||||||
Revenues
|
$
|
41,753
|
$
|
77,849
|
||||
Cost of sales
|
71,067
|
94,585
|
||||||
Operating expenses
|
6,601
|
4,486
|
||||||
Selling, general and administrative expenses
|
12,295
|
12,963
|
Six Months Ended
|
||||||||
June 30,
2013
|
June 30,
2012
|
|||||||
Purchases of crude oil and feedstocks sold to Tesoro
|
$
|
33,265
|
$
|
62,371
|
||||
Marine transportation costs
|
28,101
|
18,599
|
||||||
Losses on derivative contracts
|
9,701
|
13,615
|
||||||
Total cost of sales
|
$
|
71,067
|
$
|
94,585
|
Six Months Ended
|
||||||||
June 30,
2013
|
June 30,
2012
|
|||||||
Operating expenses
|
$
|
6,601
|
$
|
4,486
|
||||
Selling, general and administrative expenses
|
2,094
|
4,146
|
||||||
Total corporate and national cost allocations
|
$
|
8,695
|
$
|
8,632
|
Six Months Ended
|
||||||||
June 30,
2013
|
June 30,
2012
|
|||||||
Management fees
|
$
|
10,201
|
$
|
8,817
|
Six Months Ended
|
||||||||
June 30,
2013
|
June 30,
2012
|
|||||||
Revenues
|
(In thousands)
|
|||||||
Refining:
|
||||||||
Refined products
|
$ | 1,449,719 | $ | 1,594,496 | ||||
Crude oil resales and other
|
3,202 | 30,709 | ||||||
Retail:
|
||||||||
Fuel (a)
|
93,594 | 99,994 | ||||||
Merchandise and other
|
17,501 | 17,538 | ||||||
Intersegment sales from Refining to Retail
|
(70,903 | ) | (80,292 | ) | ||||
Total Revenues
|
$ | 1,493,113 | $ | 1,662,445 | ||||
Segment Operating Income (Loss)
|
||||||||
Refining (b)
|
$ | 7,168 | $ | 31,718 | ||||
Retail
|
1,610 | (423 | ) | |||||
Total Segment Operating Income
|
8,778 | 31,295 | ||||||
Unallocated costs
|
(2,234 | ) | (625 | ) | ||||
Operating Income
|
6,544 | 30,670 | ||||||
Interest income (expense), net
|
(61 | ) | 1,776 | |||||
Earnings Before Income Taxes
|
$ | 6,483 | $ | 32,446 | ||||
Depreciation and Amortization Expense
|
||||||||
Refining
|
$ | 1 | $ | 12,552 | ||||
Retail
|
1,331 | 1,285 | ||||||
Total Depreciation and Amortization Expense
|
$ | 1,332 | $ | 13,837 | ||||
Capital Expenditures
|
||||||||
Refining
|
$ | 1,532 | $ | 8,989 | ||||
Retail
|
63 | 733 | ||||||
Total Capital Expenditures
|
$ | 1,595 | $ | 9,722 |
(a)
|
Federal and state motor fuel taxes on sales by our retail segment are included in both revenues and cost of sales in our statements of combined operations. These taxes, excluding credits, totaled $10.6 million and $11.4 million for the six months ended June 30, 2013 and 2012, respectively.
|
(b)
|
Includes a benefit of $14.3 million recognized during the period ended June 30, 2013. Par Petroleum has agreed to assume any ARO’s upon close of the Hawaii sale; therefore, we no longer expect to incur any removal or other closure costs for the Hawaii Refinery. This benefit is included in refining segment operating income. See additional details on the Hawaii Sale in Note L.
|
June 30,
2013
|
December 31,
2012
|
|||||||
(In thousands)
|
||||||||
Identifiable Assets:
|
||||||||
Refining
|
$ | 141,812 | $ | 319,247 | ||||
Retail
|
24,582 | 25,025 | ||||||
Total Assets
|
$ | 166,394 | $ | 344,272 |
Six Months Ended
|
||||||||
June 30,
2013
|
June 30,
2012
|
|||||||
Hawaii Electric Industries and affiliates
|
8 | % | 11 | % | ||||
U.S. Government
|
6 | % | 5 | % | ||||
Aloha Petroleum
|
6 | % | 8 | % |
June 30,
2013
|
December 31,
2012
|
|||||||
U.S. Government
|
11 | % | 21 | % | ||||
Hawaii Electric Industries and affiliates
|
14 | % | 17 | % | ||||
Hai Soon Int’l Trading
|
13 | % | — | % |
Company Historical
|
Pro Forma Adjustments
|
Acquisition of HIE
|
Company
Pro Forma
|
|||||||||||||||
A | E | |||||||||||||||||
ASSETS
|
||||||||||||||||||
Current assets:
|
||||||||||||||||||
Cash and cash equivalents
|
$ | 43,018 | $ | 27,819 | B,D,G | $ | 604 | $ | 71,441 | |||||||||
Restricted cash
|
318 | — | — | 318 | ||||||||||||||
Acquisition deposits
|
40,000 | 135,263 | B,C,D | (175,263 | ) | — | ||||||||||||
Trade accounts receivable, net
|
10,204 | — | 59,734 | 69,938 | ||||||||||||||
Inventories
|
10,275 | — | 420,111 | 430,386 | ||||||||||||||
Prepaid and other current assets
|
1,474 | — | 3,875 | 5,349 | ||||||||||||||
Total current assets
|
105,289 | 163,082 | 309,061 | 577,432 | ||||||||||||||
Property and equipment:
|
||||||||||||||||||
Land
|
— | — | 39,800 | 39,800 | ||||||||||||||
Property, plant and equipment
|
— | — | 66,144 | 66,144 | ||||||||||||||
Natural gas and oil properties, at cost
|
||||||||||||||||||
Proved
|
4,873 | — | — | 4,873 | ||||||||||||||
Other
|
1,439 | — | — | 1,439 | ||||||||||||||
Total property and equipment
|
6,312 | 105,944 | 112,256 | |||||||||||||||
Less accumulated depreciation and depletion
|
(1,110 | ) | — | — | (1,110 | ) | ||||||||||||
Net property and equipment
|
5,202 | — | 105,944 | 111,146 | ||||||||||||||
Long-term assets:
|
||||||||||||||||||
Investment in unconsolidated affiliate
|
103,815 | — | — | 103,815 | ||||||||||||||
Intangible assets, net
|
7,805 | — | 4,782 | 12,587 | ||||||||||||||
Goodwill
|
8,290 | — | 5,203 | 13,493 | ||||||||||||||
Other long-term assets
|
7 | 2,264 | C | — | 2,271 | |||||||||||||
Total long-term assets
|
119,917 | 2,264 | 9,985 | 132,166 | ||||||||||||||
Total assets
|
$ | 230,408 | $ | 165,346 | $ | 424,990 | $ | 820,744 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||||||||
Current liabilities:
|
||||||||||||||||||
Current maturities of debt
|
$ | — | $ | — | $ | — | $ | — | ||||||||||
Obligations under supply and exchange agreement
|
— | — | 384,948 | F | 384,948 | |||||||||||||
Accounts payable
|
21,508 | — | 13,935 | 35,443 | ||||||||||||||
Other accrued liabilities
|
4,434 | — | 7,358 | 11,792 | ||||||||||||||
Accrued settlement claims
|
7,234 | — | — | 7,234 | ||||||||||||||
Total current liabilities
|
33,176 | — | 406,241 | 439,417 | ||||||||||||||
Long-term liabilities:
|
||||||||||||||||||
Long – term debt, net
|
91,549 | (31,741 | ) | B,C | — | 59,808 | ||||||||||||
Derivative liabilities
|
16,200 | — | — | 16,200 | ||||||||||||||
Other liabilities
|
540 | — | 18,749 | 19,289 | ||||||||||||||
Total liabilities
|
141,465 | (31,741 | ) | 424,990 | 534,714 | |||||||||||||
Commitments and contingencies
|
||||||||||||||||||
Stockholders’ Equity:
|
||||||||||||||||||
Preferred stock, $0.01 par value: authorized 3,000,000 shares, none issued
|
— | — | — | — | ||||||||||||||
Common stock, $0.01 par value; 300,000,000 shares authorized ; 296,563,378 shares issued and outstanding at June 30, 2013, respectively
|
1,527 | 1,439 | B | — | 2,966 | |||||||||||||
Additional paid-in capital
|
110,284 | 197,561 | B | — | 307,845 | |||||||||||||
Accumulated deficit
|
(22,868 | ) | (1,913 | ) | C,G | — | (24,781 | ) | ||||||||||
Total stockholders’ equity
|
88,943 | 197,087 | — | 286,030 | ||||||||||||||
Total liabilities and stockholders’ equity
|
$ | 230,408 | $ | 165,346 | $ | 424,990 | $ | 820,744 |
Company Historical
|
HIE Historical | Pro Forma Adjustments |
Company
Pro Forma
|
|||||||||||||||
H | I | |||||||||||||||||
Revenue:
|
||||||||||||||||||
Operating revenues
|
$ | 95,757 | $ | 1,493,113 | — | $ | 1,588,870 | |||||||||||
Natural gas and oil sales
|
3,806 | — | — | 3,806 | ||||||||||||||
Total revenues
|
99,563 | 1,493,113 | — | 1,592,676 | ||||||||||||||
Operating expenses:
|
||||||||||||||||||
Cost of sales
|
— | 1,426,976 | — | 1,426,976 | ||||||||||||||
Operating expenses
|
82,905 | 61,189 | — | 144,094 | ||||||||||||||
Lease operating expense
|
3,175 | — | — | 3,175 | ||||||||||||||
Production taxes
|
24 | — | — | 24 | ||||||||||||||
Gain on asset disposal
|
— | (14,340 | ) | 14,340 | K | — | ||||||||||||
Depreciation, depletion, amortization and accretion
|
1,804 | 1,332 | 2,938 | L | 6,074 | |||||||||||||
Trust litigation and settlements
|
5,164 | — | — | 5,164 | ||||||||||||||
General and administrative expense
|
9,059 | 11,412 | — | 20,471 | ||||||||||||||
Total operating expenses
|
102,131 | 1,486,569 | 17,278 | 1,605,978 | ||||||||||||||
Loss from unconsolidated affiliates
|
(865 | ) | — | — | (865 | ) | ||||||||||||
Operating income (loss)
|
(3,433 | ) | 6,544 | (17,278 | ) | (14,167 | ) | |||||||||||
Other income and (expense):
|
||||||||||||||||||
Interest expense and financing costs, net
|
(5,871 | ) | (61 | ) | 1,038 | J | (4,894 | ) | ||||||||||
Other income (expense)
|
770 | — | — | 770 | ||||||||||||||
Realized gain on derivative instruments, net
|
410 | — | — | 410 | ||||||||||||||
Unrealized loss on derivative instruments
|
(5,255 | ) | — | — | (5,255 | ) | ||||||||||||
Total other expense
|
(9,946 | ) | (61 | ) | 1,038 | (8,969 | ) | |||||||||||
Income (loss) before income taxes
|
(13,379 | ) | 6,483 | (16,240 | ) | 23,136 | ||||||||||||
Income tax expense
|
(650 | ) | (172 | ) | — | M | (822 | ) | ||||||||||
Net income (loss)
|
$ | (14,029 | ) | $ | 6,311 | $ | 16,240 | $ | 23,958 | |||||||||
Company Historical
|
||||||||||||||||||||||||||
Eight months Ended August 31, 2012
|
Four months Ended December 31, 2012
|
HIE Historical
|
Texadian Historical
|
Pro Forma Adjustments
|
Company Pro
Forma
|
|||||||||||||||||||||
N | N | O | P | |||||||||||||||||||||||
Revenue:
|
||||||||||||||||||||||||||
Operating revenues
|
$ | — | $ | — | $ | 3,270,374 | $ | 515,468 | $ | — | $ | 3,785,842 | ||||||||||||||
Natural gas and oil sales
|
23,079 | 2,144 | — | — | — | 25,223 | ||||||||||||||||||||
Total revenues
|
23,079 | 2,144 | 3,270,374 | 515,468 | — | 3,811,065 | ||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||||
Cost of sales
|
— | — | 3,056,708 | — | — | 3,056,708 | ||||||||||||||||||||
Operating expenses
|
— | — | 140,385 | 503,295 | — | 643,680 | ||||||||||||||||||||
Lease operating expense
|
9,038 | 1,684 | — | — | — | 10,722 | ||||||||||||||||||||
Transportation expense
|
6,963 | — | — | — | — | 6,963 | ||||||||||||||||||||
Production taxes
|
979 | 4 | — | — | — | 983 | ||||||||||||||||||||
Exploration expense
|
2 | — | — | — | — | 2 | ||||||||||||||||||||
Impairments
|
151,347 | — | 248,348 | — | (248,348 | ) | K | 151,347 | ||||||||||||||||||
Depreciation, depletion, amortization and accretion
|
16,041 | 401 | 27,233 | (3 | ) | (16,686 | ) | L,Q | 26,986 | |||||||||||||||||
General and administrative expense
|
9,386 | 5,076 | 25,465 | 5,579 | — | 45,506 | ||||||||||||||||||||
Total operating expenses
|
193,756 | 7,165 | 3,498,139 | 508,871 | (265,034 | ) | 3,942,897 | |||||||||||||||||||
Loss from unconsolidated affiliates
|
— | (1,325 | ) | — | — | — | (1,325 | ) | ||||||||||||||||||
Operating income (loss)
|
(170,677 | ) | (6,346 | ) | (227,765 | ) | 6,597 | (265,034 | ) | (133,157 | ) | |||||||||||||||
Other income and (expense):
|
||||||||||||||||||||||||||
Interest expense and financing costs, net
|
(6,852 | ) | (1,056 | ) | — | (344 | ) | (1,430 | ) | J | (9,482 | ) | ||||||||||||||
Interest income
|
— | — | 1,784 | — | — | 1,784 | ||||||||||||||||||||
Other income (expense)
|
516 | 86 | 41 | (504 | ) | — | 139 | |||||||||||||||||||
Unrealized loss on derivative instruments
|
— | (4,280 | ) | — | (2,309 | ) | — | (6,589 | ) | |||||||||||||||||
Loss from unconsolidated affiliates
|
(20 | ) | — | — | — | — | (20 | ) | ||||||||||||||||||
Total other income (expense)
|
(6,356 | ) | (5,250 | ) | 1,825 | (3,157 | ) | 1,430 | (14,368 | ) | ||||||||||||||||
Income (loss) before income taxes and reorganization items
|
(177,033 | ) | (11,596 | ) | (225,940 | ) | 3,440 | 263,604 | (147,525 | ) | ||||||||||||||||
Income tax expense (benefit)
|
— | (2,757 | ) | (764 | ) | 1,127 | (1,550 | ) | M | (3,944 | ) | |||||||||||||||
Income (loss) before reorganization items
|
(177,033 | ) | (8,839 | ) | (225,176 | ) | 2,313 | 265,154 | (143,581 | ) | ||||||||||||||||
Reorganization items
|
||||||||||||||||||||||||||
Professional fees and administrative costs
|
22,354 | — | — | — | — | 22,354 | ||||||||||||||||||||
Changes in asset values due to fresh start accounting adjustments
|
14,765 | — | — | — | — | 14,765 | ||||||||||||||||||||
Gain on settlement of senior debt and liabilities
|
(168,715 | ) | — | — | — | — | (168,715 | ) | ||||||||||||||||||
Net income (loss)
|
$ | (45,437 | ) | $ | (8,839 | ) | $ | (225,176 | ) | $ | 2,313 | $ | 265,154 | $ | (11,985 | ) |
1.
|
Adjustments to the Unaudited Pro Forma Condensed Consolidated Balance Sheet
|
A.
|
Company Historical
|
B.
|
Private Placement
|
C.
|
Proceeds from debt facility
|
D.
|
Additional Purchase Consideration
|
E.
|
Acquisition of HIE
|
Property, plant and equipment
|
$
|
66,144
|
||
Land
|
39,800
|
|||
Goodwill
|
5,203
|
|||
Intangible assets
|
4,782
|
|||
Net working capital
|
463,031
|
|||
Contingent consideration liability
|
(10,500
|
)
|
||
Other noncurrent liabilities
|
(8,249
|
)
|
||
Total consideration paid
|
$
|
560,211
|
Cash
|
$
|
604
|
||
Accounts receivable
|
59,734
|
|||
Inventories
|
420,111
|
|||
Prepaids and other current assets
|
3,875
|
|||
Accounts payable
|
(13,935
|
)
|
||
Other accrued liabilities
|
(7,358
|
)
|
||
Total net working capital acquired
|
$
|
463,031
|
F.
|
In connection with the acquisition, the Company entered into supply and exchange agreements with Barclays Bank PLC (“Barclays”). Pursuant to the supply and exchange agreements, Barclays purchased the crude oil and refined product inventory owned by HIE on September 25, 2013 (the “Effective Date”), and following the Effective Date, will (A) provide crude oil supply and intermediation arrangements to meet the processing needs of HIE’s petroleum refinery located at the Campbell Industrial Park in Kapolei, Hawaii (the “Refinery”), (B) provide a refined product exchange mechanism to HIE permitting it to flow volumes of refined product through Barclays' inventory, and (C) store Barclays' crude oil and refined product inventory at the terminals and related facilities owned and operated by HIE. On the Effective Date, the obligation owed to Barclays for the purchase of the crude was approximately $384.9 million.
|
G.
|
In addition, the Company incurred approximately $1.0 million in acquisition costs which has been reflected as pro forma adjustments to cash and retained earnings.
|
2.
|
Adjustments to the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the Six Months Ended June 30, 2013 and for the Year Ended December 31, 2012
|
H.
|
Company Historical
|
|
Derived from the Company’s historical consolidated statement of operations for the six months ended June 30, 2013.
|
I.
|
HIE Historical
|
|
Derived from the HIE’s historical consolidated statement of operations for the six months ended June 30, 2013.
|
J.
|
Financing Costs
|
K.
|
Impairments and Gain on Disposal of Assets
|
L.
|
Depreciation and Amortization Expense
|
Remaining Useful Life (Years)
|
Fair Value
|
Annual Depreciation
|
||||||||||
Refinery real estate
|
47 | $ | 1,360 | $ | 29 | |||||||
Refinery Machinery &Equipment
|
10 | 38,359 | 3,836 | |||||||||
Cogen unit
|
8 | 5,000 | 625 | |||||||||
Terminal Machinery & Equipment
|
11 | 1,464 | 133 | |||||||||
Pipelines - onshore
|
9 | 2,383 | 265 | |||||||||
Pipelines - offshore
|
8 | 2,524 | 316 | |||||||||
SPM - new
|
28 | 6,250 | 223 | |||||||||
SPM - old
|
3 | 2,500 | 833 | |||||||||
Vehicles
|
4 | 1,600 | 400 | |||||||||
Row
|
30 | 34 | 1 | |||||||||
Improvements – Real estate
|
18 | 3,113 | 173 | |||||||||
Improvements – Machinery & Equipment
|
14 | 1,557 | 111 | |||||||||
Total plant and equipment
|
$ | 66,144 | $ | 6,945 | ||||||||
Trade marks and trade names
|
3 | $ | 4,782 | $ | 1,594 | |||||||
Pro forma depreciation and amortization:
For the year ended December 31, 2012
|
$ | 8,539 | ||||||||||
For the six months ended June 30, 2013
|
$ | 4,270 |
M.
|
Income taxes
|
N.
|
Company Historical
|
O.
|
HIE Historical
|
P.
|
Texadian Energy’s Historical
|
Q.
|
Amortization of Texadian’s intangible assets
|
Remaining Useful Life (Years)
|
Fair Value
|
Annual Amortization
|
||||||||||
Supplier relationships
|
13 | $ | 3,360 | $ | 258 | |||||||
Historical shipper status
|
2 | 2,200 | 1,100 | |||||||||
Railcar leases
|
5 | 3,249 | 650 | |||||||||
$ | 8,809 | $ | 2,008 |