v2.3.0.15
Segment Disclosures (Notes)
9 Months Ended
Sep. 30, 2011
Segment Disclosures [Abstract] 
Segment Disclosures [Text Block]
SEGMENT DISCLOSURES

Our revenues are derived from two operating segments: Crude Oil Gathering and Terminalling, Transportation and Storage. Our assets consist of a crude oil gathering system in the Bakken Shale/Williston Basin area of North Dakota and Montana, eight refined products terminals in the midwestern and western United States, a crude oil and refined products storage facility and five related short-haul pipelines. Our revenues are generated from existing third-party contracts and from commercial agreements we entered into with Tesoro at the closing of the Offering under which Tesoro pays us fees for gathering, transporting and storing crude oil and transporting, storing and terminalling refined products. The commercial agreements with Tesoro are described in Note C. The tariff rates for intrastate transportation on our High Plains system were adjusted in January 2011 to reflect more uniform mileage-based rates that are comparable to rates for similar pipeline gathering and transportation services in the area. This adjustment has created an overall increase in revenues that we receive for committed and uncommitted intrastate transportation services on our High Plains system. We do not have any foreign operations.

Our operating segments are strategic business units that offer different services and are managed separately because each segment requires different industry knowledge, technology and marketing strategies. We evaluate the performance of each segment based on its respective operating income.

Crude Oil Gathering.  Our crude oil gathering system in North Dakota and Montana, which we refer to as our High Plains system, includes an approximate 23,000 barrels per day ("bpd") truck-based crude oil gathering operation and approximately 700 miles of common carrier pipeline and related storage assets with current capacity to deliver up to 70,000 bpd to Tesoro's North Dakota refinery. This system gathers and transports crude oil produced in the Williston Basin including production from the Bakken Shale formation. We refer to this area, a significant portion of which is serviced by our High Plains system, as the Bakken Shale/Williston Basin area. Currently, Tesoro's North Dakota refinery is the only destination point on our High Plains Pipeline.

Terminalling, Transportation and Storage.  We own and operate eight refined products terminals with aggregate truck and barge delivery capacity of approximately 229,000 bpd. The terminals provide distribution primarily for refined products produced at Tesoro's refineries located in Los Angeles and Martinez, California (the Los Angeles and Golden Eagle refineries, respectively); Salt Lake City, Utah (the Utah refinery); Kenai, Alaska (the Alaska refinery); Anacortes, Washington (the Washington refinery); and Mandan, North Dakota (the North Dakota refinery). We also own and operate assets that exclusively support Tesoro's Utah refinery, including a refined products and crude oil storage facility with total shell capacity of approximately 878,000 barrels and three short-haul crude oil supply pipelines and two short-haul refined product delivery pipelines connected to third-party interstate pipelines.

Segment information is as follows (in thousands):
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2011
 
 
2010
 
2011 (a)
 
 
2010
REVENUES
 
 
 
Predecessor
 
 
 
 
Predecessor
Crude Oil Gathering:
 
 
 
 
 
 
 
 
 
Affiliate (b)
$
13,676

 
 
$
5,145

 
$
29,810

 
 
$
14,087

Third-party
113

 
 
28

 
237

 
 
90

Total Crude Oil Gathering
13,789

 
 
5,173

 
30,047

 
 
14,177

Terminalling, Transportation and Storage:

 
 

 

 
 

Affiliate (b)
12,467

 
 
—

 
20,773

 
 
—

Third-party
871

 
 
983

 
2,343

 
 
2,797

Total Terminalling, Transportation and Storage
13,338

 
 
983

 
23,116

 
 
2,797

Total Segment Revenues
$
27,127

 
 
$
6,156

 
$
53,163

 
 
$
16,974

 

 
 

 

 
 

OPERATING AND MAINTENANCE EXPENSES

 
 

 

 
 

Crude Oil Gathering
$
5,998

 
 
$
5,469

 
$
15,874

 
 
$
15,674

Terminalling, Transportation and Storage
1,384

 
 
3,891

 
8,357

 
 
9,810

Total Segment Operating and Maintenance Expenses
$
7,382

 
 
$
9,360

 
$
24,231

 
 
$
25,484

 

 
 

 

 
 

DEPRECIATION AND AMORTIZATION EXPENSE
 
 

 

 
 

Crude Oil Gathering
$
785

 
 
$
778

 
$
2,355

 
 
$
2,317

Terminalling, Transportation and Storage
1,232

 
 
1,226

 
3,699

 
 
3,666

Total Segment Depreciation and Amortization Expense
$
2,017

 
 
$
2,004

 
$
6,054

 
 
$
5,983

 

 
 

 

 
 

GENERAL AND ADMINISTRATIVE EXPENSES
 
 

 

 
 

Crude Oil Gathering
$
386

 
 
$
145

 
$
821

 
 
$
424

Terminalling, Transportation and Storage
483

 
 
88

 
975

 
 
270

Total Segment General and Administrative Expenses
$
869

 
 
$
233

 
$
1,796

 
 
$
694

 

 
 

 

 
 

(GAIN) LOSS ON ASSET DISPOSALS
 
 
 
 
 
 
 
 
 
Crude Oil Gathering
$
—

 
 
$
—

 
$
(10
)
 
 
$
61

Terminalling, Transportation and Storage
—

 
 
70

 
11

 
 
445

Total Segment Loss on Asset Disposals
$
—

 
 
$
70

 
$
1

 
 
$
506

 
 
 
 
 
 
 
 
 
 
OPERATING INCOME (LOSS)

 
 

 

 
 

Crude Oil Gathering
$
6,620

 
 
$
(1,219
)
 
$
11,007

 
 
$
(4,299
)
Terminalling, Transportation and Storage
10,239

 
 
(4,292
)
 
10,074

 
 
(11,394
)
Total Segment Operating Income (Loss)
$
16,859

 
 
$
(5,511
)
 
$
21,081

 
 
$
(15,693
)
 

 
 

 

 
 

Unallocated general and administrative expenses
$
(1,131
)
 
 
$
(613
)
 
$
(3,619
)
 
 
$
(1,643
)
Interest and financing costs, net
(601
)
 
 
—

 
(1,062
)
 
 
—

NET INCOME (LOSS)
$
15,127

 
 
$
(6,124
)
 
$
16,400

 
 
$
(17,336
)
____________ 
 
 
(a) The information presented includes the results of operations of our Predecessor for periods presented through April 25, 2011 and of TLLP for the period beginning April 26, 2011, the date TLLP commenced operations.
(b) Historically, no affiliate revenue was recognized by our Predecessor in the Terminalling, Transportation and Storage segment. Our FERC and NDPSC regulated pipelines were our source of affiliate revenues in the Crude Oil Gathering segment. No affiliate revenue was recognized by our Predecessor for trucking services in the Crude Oil Gathering segment.
Capital expenditures by operating segment were as follows (in thousands):
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2011
 
 
2010
 
2011 (a)
 
 
2010
Capital Expenditures
 
 
 
Predecessor
 
 
 
 
Predecessor
Crude Oil Gathering
$
401

 
 
$
173

 
$
406

 
 
$
224

Terminalling, Transportation and Storage
1,935

 
 
462

 
3,700

 
 
1,362

Total Capital Expenditures
$
2,336

 
 
$
635

 
$
4,106

 
 
$
1,586


Total identifiable assets by operating segment were as follows (in thousands):
 
September 30,
2011
 
 
December 31,
2010
Identifiable Assets
 
 
 
Predecessor
Crude Oil Gathering
$
67,355

 
 
$
68,902

Terminalling, Transportation and Storage
77,593

 
 
66,675

 Other
20,400

 
 
—

Total Identifiable Assets
$
165,348

 
 
$
135,577