Andeavor and Andeavor Logistics Outline 2018-2020 Plan at Investor and Analyst Day
NEW YORK - December 5, 2017 - Andeavor (NYSE: ANDV) and Andeavor Logistics LP (NYSE: ANDX) will jointly host their 2017 Investor and Analyst Day today to outline their strategic plans and financial objectives for 2018 through 2020.
"Andeavor's integrated value chain is well positioned to meet our goals to grow annual EBITDA by $1.4 billion to a total of $4.5 billion in 2020, following a transformational 2017," said Greg Goff, Chairman, President and CEO of Andeavor and Chairman and CEO of Andeavor Logistics' general partner. "We are also very confident that we will capture at least $400 million of Western Refining synergies by 2020 and achieve our targeted run rate of $350 to $425 million by mid-2019," Goff added.
A Leading Marketer of Convenience and Fuel
Mike Morrison, Senior Vice President, Marketing, will outline Andeavor's Marketing strategy to grow segment EBITDA to $1.2 billion by 2020, driven by a focus on the Company's branded portfolio in each region to grow stores, expand branded volume and increase and improve convenience margins. Additionally, Morrison will highlight the Company's Marketing expansion and opportunities in Mexico.
Logistics Positioned for Continued Growth
Steven Sterin, Executive Vice President, CFO of Andeavor and President and CFO of Andeavor Logistics' general partner, will provide an overview of Andeavor Logistics' strategy for sustainable growth, with a focus on investments in the Permian Basin and Bakken. "We expect to deliver $1.2 to $1.3 billion in segment EBITDA in 2018 and our customer-focused, full-service midstream business is positioned to grow and deliver $1.4 to $1.5 billion of segment EBITDA by 2020," said Sterin.
Enhancing the Refining System
CJ Warner, Executive Vice President, Operations, will discuss Andeavor's strategy to enhance its refining system and increase segment EBITDA to $2.3 billion by 2020. This growth is driven by the delivery of $200 million in additional Western Refining synergies and $350 million of earnings improvement, consisting of $175 million from major strategic capital projects and $175 million from the full year impact of the Western Refining acquisition and increasing productivity.
Optimizing the Integrated Value Chain
Keith Casey, Executive Vice President, Commercial and Value Chain, will highlight Andeavor's strategy to identify and capture opportunities across the Company's value chain to drive higher integrated margins, yielding significant enhancement to profitability.
Creating Value through Capital Allocation and Financial Discipline
Steven Sterin will also outline Andeavor and Andeavor Logistics' financial priorities, focusing on disciplined capital allocation and an ongoing commitment to delivering shareholder and unitholder value. "The business plan we are outlining today is expected to generate strong cash flow. We are committed to generating approximately $8 to $10 billion of cash from 2018 to 2020 and will allocate capital in a disciplined manner that creates superior shareholder value," said Sterin.
The 2017 Investor and Analyst Day presentation will be webcast live at http://www.andeavor.com and http://www.andeavorlogistics.com at 9:00 a.m. ET. Presentation materials will also be available at 9:00 a.m. ET on the Investor Relations section of http://www.andeavor.com and http://www.andeavorlogistics.com.
Andeavor is a premier, highly integrated marketing, logistics and refining company. Andeavor's retail-marketing system includes more than 3,200 stores marketed under multiple well-known fuel brands, including ARCO®, SUPERAMERICA®, Shell®, Exxon®, Mobil®, Tesoro®, USA Gasoline(TM) and Giant®. It also has ownership in Andeavor Logistics LP (NYSE: ANDX) and its non-economic general partner. Andeavor operates 10 refineries with a combined capacity of approximately 1.2 million barrels per day in the mid-continent and western United States.
About Andeavor Logistics LP
Andeavor Logistics LP is a leading full-service logistics company operating primarily in the western and mid-continent regions of the United States. Andeavor Logistics owns and operates a network of crude oil, refined products and natural gas pipelines. Andeavor Logistics also owns and operates crude oil and refined products truck terminals, marine terminals and dedicated storage facilities. In addition, Andeavor Logistics owns and operates natural gas processing and fractionation complexes. Andeavor Logistics is a fee-based, growth oriented Delaware limited partnership formed by Andeavor.
Forward Looking Statements
This release contains "forward-looking statements" within the meaning of the federal securities laws. All statements, other than statements of historical fact, are forward-looking statements, including without limitation statements concerning: Andeavor and Andeavor Logistics' (the "Companies") operational, financial and growth strategies, the Companies' ability to successfully effect those strategies and the expected timing and results thereof; the Companies' financial and operational outlook, including targets for EBITDA, synergy capture and run rate, and ability to fulfill that outlook; financial position, liquidity and capital resources; expectations regarding future economic and market conditions and their effects on the Companies; strategies, goals, EBITDA targets, synergy targets, earnings improvement targets and profitability for Andeavor's marketing segment, logistics segment, refining segment and integrated value chain; targets and assumptions related to Andeavor's expanding presence in Mexico; financial strategy, including disciplined capital allocation, financial discipline, expected cash generation, value creation for shareholders and unitholders, and targets for cash generation; projected net earnings, EBITDA, segment operating income, and segment EBITDA; and other aspects of future performance. Although we believe the assumptions concerning future events are reasonable, a number of factors could cause results to differ materially from those projected. Our operations involve risks and uncertainties, many of which are outside of our control and could materially affect our results. For more information concerning factors that could affect these statements, see Andeavor's and Andeavor Logistics' annual reports on Form 10-K, quarterly reports on Form 10-Q, and other public filings, available at http://www.andeavor.com and andeavorlogistics.com. We undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
See "Non-GAAP Measures" below for reconciliations of the differences between the non-GAAP measures in this release and their most directly comparable GAAP measures.
Brad Troutman, Vice President, Investor Relations, (210) 626-4757
Andeavor Logistics Investors:
Andrew Woodward, Sr. Director, Finance and Investor Relations, (210) 626-7202
Andeavor Media Relations, firstname.lastname@example.org, (210) 626-7702
|(in millions) Unaudited||Projected EBITDA Reconciliation|
|Projected Net Earnings||$ 1,180||$ 2,035||$ 855|
|Add: Depreciation and amortization expense||1,015||1,070||55|
|Add: Interest and financing costs, net||375||420||45|
|Add: Income tax expense||530||975||445|
|Projected EBITDA||$ 3,100||$ 4,500||$ 1,400|
|(in millions) Unaudited||Projected Marketing Segment EBITDA Reconciliation|
|Projected Marketing Segment Operating Income||$ 1,130|
|Add: Depreciation and amortization expense||70|
|Projected Marketing Segment EBITDA||$ 1,200|
|(in millions) Unaudited||Projected Logistics Segment EBITDA|
|2018E Projected Segment EBITDA||2020E Projected Segment EBITDA|
|Projected Logistics Segment Operating Income||$ 615-715||$ 745-845|
|Add: Depreciation and amortization expense||295||335|
|Add: Interest and financing costs, net||290||320|
|Projected Logistics Segment EBITDA||$ 1,200-1,300||$ 1,400-1,500|
|(in millions) Unaudited|| Projected Refining Segment |
|2017E||2020E||2017E-2020E Change||Refining Special Projects||Refining Growth|
|Projected Refining Segment Operating Income||$ 1,305||$ 1,590||$ 285||$ 142||$ 143|
|Add: Depreciation and amortization expense||645||710||65||33||32|
|Projected Refining Segment EBITDA||$ 1,950||$ 2,300||$ 350||$ 175||$ 175|
|(in millions) Unaudited||Western Refining Synergies|
|Projected Segment Operating Income||$ 60||$ 75||$ 65||$ 200|
|Add: Depreciation and amortization expense||-||-||-||-|
|Projected Segment EBITDA||$ 60||$ 75||$ 65||$ 200|