x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2018
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _______ to _______
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Delaware
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74-2956831
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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19003 IH-10 West
San Antonio, Texas
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78257
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Item 1.
|
|
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Item 2.
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Item 3.
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Item 4.
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Item 6.
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Item 1.
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Financial Statements
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June 30,
2018 |
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December 31,
2017 |
||||
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(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
20,344
|
|
|
$
|
24,292
|
|
Accounts receivable, net of allowance for doubtful accounts of $10,419
and $9,948 as of June 30, 2018 and December 31, 2017, respectively
|
141,872
|
|
|
176,570
|
|
||
Receivable from related party
|
279
|
|
|
205
|
|
||
Inventories
|
28,071
|
|
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26,857
|
|
||
Other current assets
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26,526
|
|
|
22,508
|
|
||
Total current assets
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217,092
|
|
|
250,432
|
|
||
Property, plant and equipment, at cost
|
6,514,589
|
|
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6,243,481
|
|
||
Accumulated depreciation and amortization
|
(2,054,908
|
)
|
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(1,942,548
|
)
|
||
Property, plant and equipment, net
|
4,459,681
|
|
|
4,300,933
|
|
||
Intangible assets, net
|
758,767
|
|
|
784,479
|
|
||
Goodwill
|
1,094,661
|
|
|
1,097,475
|
|
||
Deferred income tax asset
|
—
|
|
|
233
|
|
||
Other long-term assets, net
|
116,768
|
|
|
101,681
|
|
||
Total assets
|
$
|
6,646,969
|
|
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$
|
6,535,233
|
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Liabilities, Mezzanine Equity and Partners’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
127,801
|
|
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$
|
145,932
|
|
Short-term debt
|
63,000
|
|
|
35,000
|
|
||
Current portion of long-term debt
|
—
|
|
|
349,990
|
|
||
Accrued interest payable
|
36,192
|
|
|
40,449
|
|
||
Accrued liabilities
|
64,719
|
|
|
61,578
|
|
||
Taxes other than income tax
|
16,220
|
|
|
14,385
|
|
||
Income tax payable
|
3,357
|
|
|
4,172
|
|
||
Total current liabilities
|
311,289
|
|
|
651,506
|
|
||
Long-term debt, less current portion
|
3,380,366
|
|
|
3,263,069
|
|
||
Deferred income tax liability
|
23,113
|
|
|
22,272
|
|
||
Other long-term liabilities
|
105,013
|
|
|
118,297
|
|
||
Total liabilities
|
3,819,781
|
|
|
4,055,144
|
|
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|
|
|
|
||||
Commitments and contingencies (Note 6)
|
|
|
|
||||
|
|
|
|
||||
Series D preferred limited partners (15,760,441 preferred units outstanding as of
June 30, 2018) (Note 11)
|
370,711
|
|
|
—
|
|
||
|
|
|
|
||||
Partners’ equity (Note 12):
|
|
|
|
||||
Preferred limited partners (9,060,000 Series A preferred units, 15,400,000 Series B preferred units and 6,900,000 Series C preferred units outstanding as of June 30, 2018 and December 31, 2017)
|
756,334
|
|
|
756,603
|
|
||
Common limited partners (93,597,181 and 93,176,683 common units outstanding
as of June 30, 2018 and December 31, 2017, respectively)
|
1,740,768
|
|
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1,770,587
|
|
||
General partner
|
25,999
|
|
|
37,826
|
|
||
Accumulated other comprehensive loss
|
(66,624
|
)
|
|
(84,927
|
)
|
||
Total partners’ equity
|
2,456,477
|
|
|
2,480,089
|
|
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Total liabilities, mezzanine equity and partners’ equity
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$
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6,646,969
|
|
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$
|
6,535,233
|
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Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
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2018
|
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2017
|
|
2018
|
|
2017
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Service revenues
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$
|
302,131
|
|
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$
|
283,700
|
|
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$
|
593,544
|
|
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$
|
550,162
|
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Product sales
|
184,073
|
|
|
151,788
|
|
|
368,541
|
|
|
372,756
|
|
||||
Total revenues
|
486,204
|
|
|
435,488
|
|
|
962,085
|
|
|
922,918
|
|
||||
Costs and expenses:
|
|
|
|
|
|
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|
||||||||
Costs associated with service revenues:
|
|
|
|
|
|
|
|
||||||||
Operating expenses (excluding depreciation and amortization expense)
|
131,672
|
|
|
116,400
|
|
|
240,556
|
|
|
217,426
|
|
||||
Depreciation and amortization expense
|
73,613
|
|
|
65,402
|
|
|
143,510
|
|
|
120,073
|
|
||||
Total costs associated with service revenues
|
205,285
|
|
|
181,802
|
|
|
384,066
|
|
|
337,499
|
|
||||
Cost of product sales
|
170,849
|
|
|
144,479
|
|
|
347,577
|
|
|
352,285
|
|
||||
General and administrative expenses (excluding depreciation and amortization expense)
|
27,981
|
|
|
33,604
|
|
|
47,755
|
|
|
58,199
|
|
||||
Other depreciation and amortization expense
|
2,251
|
|
|
2,199
|
|
|
4,369
|
|
|
4,392
|
|
||||
Total costs and expenses
|
406,366
|
|
|
362,084
|
|
|
783,767
|
|
|
752,375
|
|
||||
Operating income
|
79,838
|
|
|
73,404
|
|
|
178,318
|
|
|
170,543
|
|
||||
Interest expense, net
|
(48,936
|
)
|
|
(45,612
|
)
|
|
(96,708
|
)
|
|
(82,026
|
)
|
||||
Other income, net
|
1,412
|
|
|
88
|
|
|
81,164
|
|
|
228
|
|
||||
Income before income tax expense
|
32,314
|
|
|
27,880
|
|
|
162,774
|
|
|
88,745
|
|
||||
Income tax expense
|
2,915
|
|
|
1,630
|
|
|
7,242
|
|
|
4,555
|
|
||||
Net income
|
$
|
29,399
|
|
|
$
|
26,250
|
|
|
$
|
155,532
|
|
|
$
|
84,190
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net income per common unit (Note 14)
|
$
|
0.15
|
|
|
$
|
0.05
|
|
|
$
|
1.30
|
|
|
$
|
0.51
|
|
Basic weighted-average common units outstanding
|
93,192,238
|
|
|
90,345,469
|
|
|
93,187,038
|
|
|
84,526,506
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
$
|
26,778
|
|
|
$
|
27,381
|
|
|
$
|
173,835
|
|
|
$
|
89,084
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash Flows from Operating Activities:
|
|
|
|
||||
Net income
|
$
|
155,532
|
|
|
$
|
84,190
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
147,879
|
|
|
124,465
|
|
||
Unit-based compensation expense
|
4,277
|
|
|
5,117
|
|
||
Amortization of debt related items
|
3,965
|
|
|
3,146
|
|
||
Gain from sale or disposition of assets
|
(1,218
|
)
|
|
(36
|
)
|
||
Gain from insurance recoveries
|
(78,756
|
)
|
|
—
|
|
||
Deferred income tax expense
|
1,142
|
|
|
23
|
|
||
Changes in current assets and current liabilities (Note 15)
|
42,733
|
|
|
(15,344
|
)
|
||
(Increase) decrease in other long-term assets
|
(11,224
|
)
|
|
2,698
|
|
||
(Decrease) increase in other long-term liabilities
|
(20,073
|
)
|
|
5,494
|
|
||
Other, net
|
(407
|
)
|
|
(765
|
)
|
||
Net cash provided by operating activities
|
243,850
|
|
|
208,988
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(248,521
|
)
|
|
(108,849
|
)
|
||
Change in accounts payable related to capital expenditures
|
(19,320
|
)
|
|
6,851
|
|
||
Proceeds from sale or disposition of assets
|
2,097
|
|
|
1,966
|
|
||
Proceeds from Axeon term loan
|
—
|
|
|
110,000
|
|
||
Proceeds from insurance recoveries
|
78,419
|
|
|
—
|
|
||
Acquisitions
|
(37,502
|
)
|
|
(1,476,719
|
)
|
||
Net cash used in investing activities
|
(224,827
|
)
|
|
(1,466,751
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
Proceeds from long-term debt borrowings
|
677,272
|
|
|
1,037,161
|
|
||
Proceeds from short-term debt borrowings
|
456,000
|
|
|
565,000
|
|
||
Proceeds from note offering, net of issuance costs
|
—
|
|
|
543,313
|
|
||
Long-term debt repayments
|
(905,521
|
)
|
|
(1,122,239
|
)
|
||
Short-term debt repayments
|
(428,000
|
)
|
|
(574,000
|
)
|
||
Proceeds from issuance of Series D preferred units
|
400,000
|
|
|
—
|
|
||
Payment of issuance costs for Series D preferred units
|
(29,289
|
)
|
|
—
|
|
||
Proceeds from issuance of other preferred units, net of issuance costs
|
—
|
|
|
371,802
|
|
||
Proceeds from issuance of common units, net of issuance costs
|
10,000
|
|
|
643,858
|
|
||
Contributions from general partner
|
—
|
|
|
13,597
|
|
||
Distributions to preferred unitholders
|
(32,713
|
)
|
|
(10,696
|
)
|
||
Distributions to common unitholders and general partner
|
(172,324
|
)
|
|
(216,139
|
)
|
||
Proceeds from termination of interest rate swaps
|
8,048
|
|
|
—
|
|
||
(Decrease) increase in cash book overdrafts
|
(436
|
)
|
|
1,321
|
|
||
Other, net
|
(5,587
|
)
|
|
(2,615
|
)
|
||
Net cash (used in) provided by financing activities
|
(22,550
|
)
|
|
1,250,363
|
|
||
Effect of foreign exchange rate changes on cash
|
(421
|
)
|
|
649
|
|
||
Net decrease in cash and cash equivalents
|
(3,948
|
)
|
|
(6,751
|
)
|
||
Cash and cash equivalents as of the beginning of the period
|
24,292
|
|
|
35,942
|
|
||
Cash and cash equivalents as of the end of the period
|
$
|
20,344
|
|
|
$
|
29,191
|
|
|
Purchase Price Allocation
|
||
|
(Thousands of Dollars)
|
||
Accounts receivable
|
$
|
4,747
|
|
Other current assets
|
2,359
|
|
|
Property, plant and equipment, net
|
376,690
|
|
|
Intangible assets (a)
|
700,000
|
|
|
Goodwill (b)
|
398,024
|
|
|
Other long-term assets, net
|
2,199
|
|
|
Current liabilities
|
(22,300
|
)
|
|
Purchase price allocation, net of cash acquired
|
$
|
1,461,719
|
|
(a)
|
Intangible assets, which consist of customer contracts and relationships, are amortized on a straight-line basis over a period of
20 years
.
|
(b)
|
The goodwill acquired represents the expected benefit from entering new geographic areas and the anticipated opportunities to generate future cash flows from the assets acquired and potential future projects.
|
•
|
we completed the Navigator Acquisition on January 1, 2017;
|
•
|
we issued approximately
14.4 million
common units;
|
•
|
we received a contribution from our general partner of
$13.6 million
to maintain its
2%
interest;
|
•
|
we issued
15.4 million
Series B Preferred Units;
|
•
|
we issued
$550.0 million
of
5.625%
senior notes;
|
•
|
additional depreciation and amortization that would have been incurred assuming the fair value adjustments to property, plant and equipment and intangible assets reflected in the purchase price allocation above; and
|
•
|
we satisfied Navigator’s outstanding obligations under its revolving credit agreement.
|
|
Three Months Ended
June 30, 2017
|
|
Six Months Ended June 30, 2017
|
||||
|
(Thousands of Dollars, Except Per Unit Data)
|
||||||
Revenues
|
$
|
439,933
|
|
|
$
|
937,317
|
|
Net income
|
$
|
21,211
|
|
|
$
|
63,659
|
|
Basic net (loss) income per common unit
|
$
|
(0.03
|
)
|
|
$
|
0.16
|
|
|
June 30, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Other long-term assets, net:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
4,491
|
|
|
$
|
—
|
|
|
$
|
4,491
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity derivatives
|
$
|
(247
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(247
|
)
|
|
December 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Other current assets:
|
|
|
|
|
|
|
|
||||||||
Product imbalances
|
$
|
3,890
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,890
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities:
|
|
|
|
|
|
|
|
||||||||
Product imbalances
|
$
|
(1,534
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,534
|
)
|
Commodity derivatives
|
(878
|
)
|
|
—
|
|
|
—
|
|
|
(878
|
)
|
||||
Interest rate swaps
|
—
|
|
|
(5,394
|
)
|
|
—
|
|
|
(5,394
|
)
|
||||
Other long-term liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
—
|
|
|
(4,594
|
)
|
|
—
|
|
|
(4,594
|
)
|
||||
Total liabilities
|
$
|
(2,412
|
)
|
|
$
|
(9,988
|
)
|
|
$
|
—
|
|
|
$
|
(12,400
|
)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
(Thousands of Dollars)
|
||||||
Fair value
|
$
|
3,394,956
|
|
|
$
|
3,677,622
|
|
Carrying amount
|
$
|
3,380,366
|
|
|
$
|
3,613,059
|
|
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||
|
Balance Sheet Location
|
|
June 30,
2018 |
|
December 31,
2017 |
|
June 30,
2018 |
|
December 31,
2017 |
||||||||
|
|
|
(Thousands of Dollars)
|
||||||||||||||
Derivatives Designated as
Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
Other long-term assets, net
|
|
$
|
4,491
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity contracts
|
Accrued liabilities
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
(112
|
)
|
||||
Interest rate swaps
|
Accrued liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,394
|
)
|
||||
Interest rate swaps
|
Other long-term liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,594
|
)
|
||||
Total
|
|
|
4,491
|
|
|
—
|
|
|
(70
|
)
|
|
(10,100
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives Not Designated
as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
Accrued liabilities
|
|
1,278
|
|
|
742
|
|
|
(1,455
|
)
|
|
(1,508
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Total Derivatives
|
|
|
$
|
5,769
|
|
|
$
|
742
|
|
|
$
|
(1,525
|
)
|
|
$
|
(11,608
|
)
|
Commodity Contracts
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
(Thousands of Dollars)
|
||||||
Net amounts of assets presented in the consolidated balance sheets
|
|
$
|
—
|
|
|
$
|
—
|
|
Net amounts of liabilities presented in the consolidated balance sheets
|
|
$
|
(247
|
)
|
|
$
|
(878
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Derivatives Designated as Fair Value Hedging Instruments:
|
|
|
|
|
|
|
|
||||||||
(Loss) gain recognized in income on derivative
|
$
|
(1,007
|
)
|
|
$
|
364
|
|
|
$
|
(1,303
|
)
|
|
$
|
2,461
|
|
Gain (loss) recognized in income on hedged item
|
981
|
|
|
(313
|
)
|
|
1,218
|
|
|
(2,147
|
)
|
||||
(Loss) gain recognized in income for ineffective portion
|
$
|
(26
|
)
|
|
$
|
51
|
|
|
$
|
(85
|
)
|
|
$
|
314
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
||||||||
(Loss) gain recognized in income on derivative
|
$
|
(90
|
)
|
|
$
|
52
|
|
|
$
|
(231
|
)
|
|
$
|
(86
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Derivatives Designated as Cash Flow Hedging Instruments:
|
|
|
|
|
|
|
|
||||||||
Gain (loss) recognized in other comprehensive income on derivative (effective portion)
|
$
|
5,106
|
|
|
$
|
(7,980
|
)
|
|
$
|
22,527
|
|
|
$
|
(7,941
|
)
|
Loss reclassified from AOCI into interest expense, net (effective portion)
|
$
|
(1,162
|
)
|
|
$
|
(1,729
|
)
|
|
$
|
(2,552
|
)
|
|
$
|
(3,528
|
)
|
|
Pension Plans
|
|
Other Postretirement Benefit Plans
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
For the three months ended June 30:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
2,405
|
|
|
$
|
2,239
|
|
|
$
|
126
|
|
|
$
|
113
|
|
Interest cost
|
1,206
|
|
|
1,127
|
|
|
107
|
|
|
108
|
|
||||
Expected return on assets
|
(1,854
|
)
|
|
(1,602
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(514
|
)
|
|
(516
|
)
|
|
(286
|
)
|
|
(286
|
)
|
||||
Amortization of net loss
|
543
|
|
|
371
|
|
|
53
|
|
|
48
|
|
||||
Net periodic benefit cost (income)
|
$
|
1,786
|
|
|
$
|
1,619
|
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
|
|
|
|
|
|
|
|
||||||||
For the six months ended June 30:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
4,811
|
|
|
$
|
4,478
|
|
|
$
|
252
|
|
|
$
|
226
|
|
Interest cost
|
2,412
|
|
|
2,254
|
|
|
215
|
|
|
216
|
|
||||
Expected return on assets
|
(3,709
|
)
|
|
(3,205
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
(1,028
|
)
|
|
(1,031
|
)
|
|
(573
|
)
|
|
(572
|
)
|
||||
Amortization of net loss
|
1,087
|
|
|
742
|
|
|
107
|
|
|
96
|
|
||||
Net periodic benefit cost (income)
|
$
|
3,573
|
|
|
$
|
3,238
|
|
|
$
|
1
|
|
|
$
|
(34
|
)
|
Balance as of January 1, 2018
|
$
|
2,480,089
|
|
Net income
|
155,320
|
|
|
Unit-based compensation
|
3,051
|
|
|
Other comprehensive income
|
18,303
|
|
|
Distributions to partners
|
(204,347
|
)
|
|
Issuance of common units, including contribution from general partner
|
10,204
|
|
|
Other
|
(6,143
|
)
|
|
Balance as of June 30, 2018
|
$
|
2,456,477
|
|
|
|
Percentage of Distribution
|
||
Quarterly Distribution Amount per Common Unit
|
|
Common
Unitholders
|
|
General Partner
Including Incentive Distributions
|
Up to $0.60
|
|
98%
|
|
2%
|
Above $0.60 up to $0.66
|
|
90%
|
|
10%
|
Above $0.66
|
|
75%
|
|
25%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars, Except Per Unit Data)
|
||||||||||||||
General partner interest
|
$
|
—
|
|
|
$
|
2,302
|
|
|
$
|
1,141
|
|
|
$
|
4,645
|
|
General partner incentive distribution
|
—
|
|
|
10,912
|
|
|
—
|
|
|
23,824
|
|
||||
Total general partner distribution
|
—
|
|
|
13,214
|
|
|
1,141
|
|
|
28,469
|
|
||||
Common limited partners’ distribution
|
64,205
|
|
|
101,869
|
|
|
120,121
|
|
|
203,782
|
|
||||
Total cash distributions
|
$
|
64,205
|
|
|
$
|
115,083
|
|
|
$
|
121,262
|
|
|
$
|
232,251
|
|
|
|
|
|
|
|
|
|
||||||||
Cash distributions per unit applicable to common limited partners
|
$
|
0.60
|
|
|
$
|
1.095
|
|
|
$
|
1.200
|
|
|
$
|
2.190
|
|
Quarter Ended
|
|
Cash
Distributions
Per Unit
|
|
Total Cash
Distributions
|
|
Record Date
|
|
Payment Date
|
||||
|
|
|
|
(Thousands of Dollars)
|
|
|
|
|
||||
June 30, 2018
|
|
$
|
0.600
|
|
|
$
|
64,205
|
|
|
August 7, 2018
|
|
August 13, 2018
|
March 31, 2018
|
|
$
|
0.600
|
|
|
$
|
57,057
|
|
|
May 8, 2018
|
|
May 14, 2018
|
December 31, 2017
|
|
$
|
1.095
|
|
|
$
|
115,267
|
|
|
February 8, 2018
|
|
February 13, 2018
|
Period
|
|
Cash
Distributions
Per Unit
|
|
Total Cash
Distributions
|
|
Record Date
|
|
Payment Date
|
||||
|
|
|
|
(Thousands of Dollars)
|
|
|
|
|
||||
Series A Preferred Units:
|
|
|
|
|
|
|
|
|
||||
June 15, 2018 - September 14, 2018
|
|
$
|
0.53125
|
|
|
$
|
4,813
|
|
|
September 4, 2018
|
|
September 17, 2018
|
March 15, 2018 - June 14, 2018
|
|
$
|
0.53125
|
|
|
$
|
4,813
|
|
|
June 1, 2018
|
|
June 15, 2018
|
December 15, 2017 - March 14, 2018
|
|
$
|
0.53125
|
|
|
$
|
4,813
|
|
|
March 1, 2018
|
|
March 15, 2018
|
|
|
|
|
|
|
|
|
|
||||
Series B Preferred Units:
|
|
|
|
|
|
|
|
|
||||
June 15, 2018 to September 14, 2018
|
|
$
|
0.47657
|
|
|
$
|
7,339
|
|
|
September 4, 2018
|
|
September 17, 2018
|
March 15, 2018 to June 14, 2018
|
|
$
|
0.47657
|
|
|
$
|
7,339
|
|
|
June 1, 2018
|
|
June 15, 2018
|
December 15, 2017 to March 14, 2018
|
|
$
|
0.47657
|
|
|
$
|
7,339
|
|
|
March 1, 2018
|
|
March 15, 2018
|
|
|
|
|
|
|
|
|
|
||||
Series C Preferred Units:
|
|
|
|
|
|
|
|
|
||||
June 15, 2018 to September 14, 2018
|
|
$
|
0.56250
|
|
|
$
|
3,881
|
|
|
September 4, 2018
|
|
September 17, 2018
|
March 15, 2018 to June 14, 2018
|
|
$
|
0.56250
|
|
|
$
|
3,881
|
|
|
June 1, 2018
|
|
June 15, 2018
|
November 30, 2017 - March 14, 2018
|
|
$
|
0.65625
|
|
|
$
|
4,528
|
|
|
March 1, 2018
|
|
March 15, 2018
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars, Except Percentage Data)
|
||||||||||||||
Net income
|
$
|
29,399
|
|
|
$
|
26,250
|
|
|
$
|
155,532
|
|
|
$
|
84,190
|
|
Less preferred limited partner interest
|
16,245
|
|
|
9,950
|
|
|
32,235
|
|
|
14,763
|
|
||||
Less general partner incentive distribution
|
—
|
|
|
10,912
|
|
|
—
|
|
|
23,824
|
|
||||
Net income after preferred limited partner interest and general partner incentive distribution
|
13,154
|
|
|
5,388
|
|
|
123,297
|
|
|
45,603
|
|
||||
General partner interest allocation
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
||||
General partner interest allocation of net income
|
263
|
|
|
108
|
|
|
2,466
|
|
|
912
|
|
||||
General partner incentive distribution
|
—
|
|
|
10,912
|
|
|
—
|
|
|
23,824
|
|
||||
Net income applicable to general partner
|
$
|
263
|
|
|
$
|
11,020
|
|
|
$
|
2,466
|
|
|
$
|
24,736
|
|
|
Foreign
Currency
Translation
|
|
Cash Flow
Hedges
|
|
Pension and
Other
Postretirement
Benefits
|
|
Total
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Balance as of January 1, 2018
|
$
|
(51,603
|
)
|
|
$
|
(24,304
|
)
|
|
$
|
(9,020
|
)
|
|
$
|
(84,927
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income before reclassification adjustments
|
(6,379
|
)
|
|
22,527
|
|
|
—
|
|
|
16,148
|
|
||||
Net gain on pension costs reclassified into other income, net
|
—
|
|
|
—
|
|
|
(407
|
)
|
|
(407
|
)
|
||||
Net loss on cash flow hedges reclassified into interest
expense, net
|
—
|
|
|
2,552
|
|
|
—
|
|
|
2,552
|
|
||||
Other
|
60
|
|
|
—
|
|
|
(50
|
)
|
|
10
|
|
||||
Other comprehensive (loss) income
|
(6,319
|
)
|
|
25,079
|
|
|
(457
|
)
|
|
18,303
|
|
||||
Balance as of June 30, 2018
|
$
|
(57,922
|
)
|
|
$
|
775
|
|
|
$
|
(9,477
|
)
|
|
$
|
(66,624
|
)
|
|
As Reported
|
|
Without Adoption of ASC Topic 606
|
|
Effect of Change
Higher/(Lower)
|
||||||
|
(Thousands of Dollars, Except Per Unit Data)
|
||||||||||
For the three months ended June 30, 2018:
|
|
|
|
|
|
||||||
Revenues
|
$
|
486,204
|
|
|
$
|
484,646
|
|
|
$
|
1,558
|
|
Operating income
|
$
|
79,838
|
|
|
$
|
78,280
|
|
|
$
|
1,558
|
|
Net income
|
$
|
29,399
|
|
|
$
|
27,841
|
|
|
$
|
1,558
|
|
Basic net income per common unit
|
$
|
0.15
|
|
|
$
|
0.13
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
||||||
For the six months ended June 30, 2018:
|
|
|
|
|
|
||||||
Revenues
|
$
|
962,085
|
|
|
$
|
966,432
|
|
|
$
|
(4,347
|
)
|
Operating income
|
$
|
178,318
|
|
|
$
|
182,665
|
|
|
$
|
(4,347
|
)
|
Net income
|
$
|
155,532
|
|
|
$
|
159,879
|
|
|
$
|
(4,347
|
)
|
Basic net income per common unit
|
$
|
1.30
|
|
|
$
|
1.34
|
|
|
$
|
(0.04
|
)
|
|
Contract Assets
|
|
Contract Liabilities
|
||||
|
(Thousands of Dollars)
|
||||||
Balance as of January 1, 2018
|
$
|
2,127
|
|
|
$
|
(60,464
|
)
|
|
|
|
|
||||
Additions
|
879
|
|
|
(20,820
|
)
|
||
Transfer to accounts receivable
|
(2,397
|
)
|
|
—
|
|
||
Transfer to revenues
|
—
|
|
|
28,466
|
|
||
Total activity
|
(1,518
|
)
|
|
7,646
|
|
||
|
|
|
|
||||
Balance as of June 30, 2018
|
609
|
|
|
(52,818
|
)
|
||
Less current portion
|
327
|
|
|
(18,149
|
)
|
||
Noncurrent portion
|
$
|
282
|
|
|
$
|
(34,669
|
)
|
2018 (remaining)
|
|
$
|
260,929
|
|
2019
|
|
377,617
|
|
|
2020
|
|
229,327
|
|
|
2021
|
|
168,290
|
|
|
2022
|
|
130,220
|
|
|
Thereafter
|
|
412,921
|
|
|
Total
|
|
$
|
1,579,304
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Pipeline segment:
|
|
|
|
|
|
|
|
||||||||
Crude oil pipelines (excluding lessor revenues)
|
$
|
60,507
|
|
|
$
|
47,039
|
|
|
$
|
113,944
|
|
|
$
|
83,786
|
|
Refined products and ammonia pipelines
|
89,769
|
|
|
79,701
|
|
|
173,068
|
|
|
164,194
|
|
||||
Total pipeline segment revenues from contracts with customers
|
150,276
|
|
|
126,740
|
|
|
287,012
|
|
|
247,980
|
|
||||
Lessor revenues
|
—
|
|
|
—
|
|
|
54
|
|
|
—
|
|
||||
Total pipeline segment revenues
|
150,276
|
|
|
126,740
|
|
|
287,066
|
|
|
247,980
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Storage segment:
|
|
|
|
|
|
|
|
||||||||
Throughput terminals
|
20,141
|
|
|
22,122
|
|
|
40,157
|
|
|
42,812
|
|
||||
Storage terminals (excluding lessor revenues)
|
127,347
|
|
|
126,655
|
|
|
252,697
|
|
|
243,615
|
|
||||
Total storage segment revenues from contracts with customers
|
147,488
|
|
|
148,777
|
|
|
292,854
|
|
|
286,427
|
|
||||
Lessor revenues
|
9,962
|
|
|
9,782
|
|
|
19,924
|
|
|
19,563
|
|
||||
Total storage segment revenues
|
157,450
|
|
|
158,559
|
|
|
312,778
|
|
|
305,990
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Fuels marketing segment revenues from contracts with customers
|
180,483
|
|
|
153,918
|
|
|
366,321
|
|
|
376,620
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Consolidation and intersegment eliminations
|
(2,005
|
)
|
|
(3,729
|
)
|
|
(4,080
|
)
|
|
(7,672
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
486,204
|
|
|
$
|
435,488
|
|
|
$
|
962,085
|
|
|
$
|
922,918
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars, Except Unit and Per Unit Data)
|
||||||||||||||
Net income
|
$
|
29,399
|
|
|
$
|
26,250
|
|
|
$
|
155,532
|
|
|
$
|
84,190
|
|
Less: Distributions to preferred limited partners
|
16,245
|
|
|
9,950
|
|
|
32,235
|
|
|
14,763
|
|
||||
Less: Distributions to general partner (including incentive distribution rights)
|
—
|
|
|
13,214
|
|
|
1,141
|
|
|
28,469
|
|
||||
Less: Distributions to common limited partners
|
64,205
|
|
|
101,869
|
|
|
120,121
|
|
|
203,782
|
|
||||
Less: Distribution equivalent rights to restricted units
|
480
|
|
|
712
|
|
|
925
|
|
|
1,427
|
|
||||
Distributions (in excess of) less than earnings
|
$
|
(51,531
|
)
|
|
$
|
(99,495
|
)
|
|
$
|
1,110
|
|
|
$
|
(164,251
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common units:
|
|
|
|
|
|
|
|
||||||||
Distributions to common limited partners
|
$
|
64,205
|
|
|
$
|
101,869
|
|
|
$
|
120,121
|
|
|
$
|
203,782
|
|
Allocation of distributions (in excess of) less than earnings
|
(50,500
|
)
|
|
(97,505
|
)
|
|
1,079
|
|
|
(160,966
|
)
|
||||
Total
|
$
|
13,705
|
|
|
$
|
4,364
|
|
|
$
|
121,200
|
|
|
$
|
42,816
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average common units outstanding
|
93,192,238
|
|
|
90,345,469
|
|
|
93,187,038
|
|
|
84,526,506
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net income per common unit
|
$
|
0.15
|
|
|
$
|
0.05
|
|
|
$
|
1.30
|
|
|
$
|
0.51
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(Thousands of Dollars)
|
||||||
Decrease (increase) in current assets:
|
|
|
|
||||
Accounts receivable
|
$
|
34,518
|
|
|
$
|
48,875
|
|
Receivable from related party
|
130
|
|
|
231
|
|
||
Inventories
|
(1,233
|
)
|
|
13,005
|
|
||
Other current assets
|
(2,494
|
)
|
|
(2,388
|
)
|
||
Increase (decrease) in current liabilities:
|
|
|
|
||||
Accounts payable
|
5,149
|
|
|
(57,822
|
)
|
||
Accrued interest payable
|
(4,325
|
)
|
|
6,234
|
|
||
Accrued liabilities
|
10,476
|
|
|
(14,703
|
)
|
||
Taxes other than income tax
|
1,329
|
|
|
(3,094
|
)
|
||
Income tax payable
|
(817
|
)
|
|
(5,682
|
)
|
||
Changes in current assets and current liabilities
|
$
|
42,733
|
|
|
$
|
(15,344
|
)
|
•
|
current assets and current liabilities acquired during the period;
|
•
|
the change in the amount accrued for capital expenditures;
|
•
|
the effect of foreign currency translation; and
|
•
|
changes in the fair values of our interest rate swap agreements.
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(Thousands of Dollars)
|
||||||
Cash paid for interest, net of amount capitalized
|
$
|
96,761
|
|
|
$
|
70,119
|
|
Cash paid for income taxes, net of tax refunds received
|
$
|
7,973
|
|
|
$
|
9,556
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Thousands of Dollars)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Pipeline
|
$
|
150,276
|
|
|
$
|
126,740
|
|
|
$
|
287,066
|
|
|
$
|
247,980
|
|
Storage:
|
|
|
|
|
|
|
|
||||||||
Third parties
|
155,445
|
|
|
154,830
|
|
|
308,698
|
|
|
298,318
|
|
||||
Intersegment
|
2,005
|
|
|
3,729
|
|
|
4,080
|
|
|
7,672
|
|
||||
Total storage
|
157,450
|
|
|
158,559
|
|
|
312,778
|
|
|
305,990
|
|
||||
Fuels marketing
|
180,483
|
|
|
153,918
|
|
|
366,321
|
|
|
376,620
|
|
||||
Consolidation and intersegment eliminations
|
(2,005
|
)
|
|
(3,729
|
)
|
|
(4,080
|
)
|
|
(7,672
|
)
|
||||
Total revenues
|
$
|
486,204
|
|
|
$
|
435,488
|
|
|
$
|
962,085
|
|
|
$
|
922,918
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income:
|
|
|
|
|
|
|
|
||||||||
Pipeline
|
$
|
62,979
|
|
|
$
|
52,868
|
|
|
$
|
120,773
|
|
|
$
|
117,896
|
|
Storage
|
44,184
|
|
|
56,049
|
|
|
100,445
|
|
|
109,808
|
|
||||
Fuels marketing
|
2,904
|
|
|
289
|
|
|
9,224
|
|
|
5,429
|
|
||||
Consolidation and intersegment eliminations
|
3
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total segment operating income
|
110,070
|
|
|
109,207
|
|
|
230,442
|
|
|
233,134
|
|
||||
General and administrative expenses
|
27,981
|
|
|
33,604
|
|
|
47,755
|
|
|
58,199
|
|
||||
Other depreciation and amortization expense
|
2,251
|
|
|
2,199
|
|
|
4,369
|
|
|
4,392
|
|
||||
Total operating income
|
$
|
79,838
|
|
|
$
|
73,404
|
|
|
$
|
178,318
|
|
|
$
|
170,543
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
(Thousands of Dollars)
|
||||||
Pipeline
|
$
|
3,581,710
|
|
|
$
|
3,492,417
|
|
Storage
|
2,754,290
|
|
|
2,735,563
|
|
||
Fuels marketing
|
118,119
|
|
|
118,746
|
|
||
Total segment assets
|
6,454,119
|
|
|
6,346,726
|
|
||
|