Summary Of Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2014 |
Summary Of Significant Accounting Policies | ' |
Principles of Consolidation and Non-Controlling Interest | ' |
Principles of Consolidation and Non-Controlling Interest |
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The consolidated financial statements include the accounts of the Partnership, the Operating Partnership, a Variable Interest Entity (“VIE”) of which the Partnership is the primary beneficiary, and the Operating Partnership’s wholly-owned and majority-owned subsidiaries. The General Partner’s interest in the Operating Partnership is reported as part of its overall 2.0% general partner interest in the Partnership. All material intercompany transactions have been eliminated. |
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Comprehensive Income (Loss) | ' |
Comprehensive Income (Loss) |
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Comprehensive income (loss) includes net income (loss) and all other changes in the equity of a business during a period from transactions and other events and circumstances from non-owner sources that, under GAAP, have not been recognized in the calculation of net income (loss). These changes, other than net income (loss), are referred to as “other comprehensive income (loss).” The Partnership does not have any type of transaction that would be included within other comprehensive income (loss), thus comprehensive income (loss) is equal to net income (loss). |
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Net Income (Loss) Per Common Unit | ' |
Net Income (Loss) Per Common Unit |
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Basic net income (loss) attributable to common limited partners per unit is computed by dividing net income (loss) attributable to common limited partners by the weighted average number of common limited partner units outstanding during the period. Net income (loss) attributable to common limited partners is determined by deducting net income attributable to participating securities, if applicable, and net income (loss) attributable to the General Partner’s and the preferred unitholders' interests. The General Partner’s interest in net income (loss) is calculated on a quarterly basis based upon its 2.0% general partner interest and incentive distributions to be distributed for the quarter (see Note 5), with a priority allocation of net income to the General Partner’s incentive distributions, if any, in accordance with the partnership agreement, and the remaining net income (loss) allocated with respect to the General Partner’s and limited partners’ ownership interests. |
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The Partnership presents net income (loss) per unit under the two-class method for master limited partnerships, which considers whether the incentive distributions of a master limited partnership represent a participating security when considered in the calculation of earnings per unit under the two-class method. The two-class method considers whether the partnership agreement contains any contractual limitations concerning distributions to the incentive distribution rights that would impact the amount of earnings to allocate to the incentive distribution rights for each reporting period. If distributions are contractually limited to the incentive distribution rights’ share of currently designated available cash for distributions as defined under the partnership agreement, undistributed earnings in excess of available cash should not be allocated to the incentive distribution rights. Under the two-class method, management of the Partnership believes the partnership agreement contractually limits cash distributions to available cash; therefore, undistributed earnings are not allocated to the incentive distribution rights. |
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Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per unit pursuant to the two-class method. The Partnership’s phantom unit awards, which consist of common units issuable under the terms of its long-term incentive plans and incentive compensation agreements (see Note 15), contain non-forfeitable rights to distribution equivalents of the Partnership. The participation rights result in a non-contingent transfer of value each time the Partnership declares a distribution or distribution equivalent right during the award’s vesting period. However, unless the contractual terms of the participating securities require the holders to share in the losses of the entity, net loss is not allocated to the participating securities. Therefore, the net income (loss) utilized in the calculation of net income (loss) per unit must be determined based upon the allocation of only net income to the phantom units on a pro-rata basis. |
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Class D Preferred Units participate in distributions with the common limited partner units according to a predetermined formula (see Note 5), thus they are considered participating securities and are included in the computation of earnings per unit pursuant to the two-class method. The participation rights result in a non-contingent transfer of value each time the Partnership declares a distribution. However, the contractual terms of the Class D Preferred Units do not require the holders to share in the losses of the entity, therefore the net income (loss) utilized in the calculation of net income (loss) per unit must be determined based upon the allocation of only net income to the Class D Preferred Units on a pro-rata basis. |
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Class E Preferred Units do not participate in distributions with the common limited partner units according to a predetermined formula, but rather receive distributions based upon a set percentage rate (see Note 5), thus they are not considered participating securities. However, income available to common limited partners is reduced by the distributions accumulated for the period on the Class E Preferred Units, whether declared or not, since the distributions on Class E Preferred Units are cumulative. |
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The following is a reconciliation of net income (loss) allocated to the General Partner and common limited partners for purposes of calculating net income (loss) attributable to common limited partners per unit (in thousands): |
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| Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| 2014 | | 2013 | | 2014 | | 2013 |
Net income (loss) | $ | 49,374 | | $ | -25,564 | | $ | 116,924 | | $ | -42,965 |
Income attributable to non-controlling interests | | -4,029 | | | -1,514 | | | -10,456 | | | -4,693 |
Preferred unit imputed dividend effect | | -11,378 | | | -11,378 | | | -34,134 | | | -18,107 |
Preferred unit dividends in kind | | -11,408 | | | -9,072 | | | -31,533 | | | -14,413 |
Preferred unit dividends | | -2,609 | | | - | | | -5,624 | | | - |
Net income (loss) attributable to common limited partners and the General Partner | | 19,950 | | | -47,528 | | | 35,177 | | | -80,178 |
General Partner’s cash incentive distributions | | 6,865 | | | 4,901 | | | 17,708 | | | 12,678 |
General Partner’s ownership interest | | 263 | | | -1,053 | | | 351 | | | -1,866 |
Net income attributable to the General Partner’s ownership interests | | 7,128 | | | 3,848 | | | 18,059 | | | 10,812 |
Net income (loss) attributable to common limited partners | | 12,822 | | | -51,376 | | | 17,118 | | | -90,990 |
Net income attributable to participating securities – phantom units(1) | | 248 | | | - | | | 300 | | | - |
Net income attributable to participating securities – Class D Preferred Units(2) | | 1,907 | | | - | | | 2,542 | | | - |
Net income attributable to participating securities | | 2,155 | | | - | | | 2,842 | | | - |
Net income (loss) utilized in the calculation of net income (loss) attributable to common limited partners per unit | $ | 10,667 | | $ | -51,376 | | $ | 14,276 | | $ | -90,990 |
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-1 | Net income attributable to common limited partners’ ownership interest is allocated to the phantom units on a pro-rata basis (weighted average phantom units outstanding as a percentage of the sum of the weighted average phantom units and common limited partner units outstanding). For the three and nine months ended September 30, 2013, net loss attributable to common limited partners’ ownership interest is not allocated to approximately 1,455,000 and 1,160,000 weighted average phantom units, respectively, because the contractual terms of the phantom units as participating securities do not require the holders to share in the losses of the entity. | | | | | | | | | |
-2 | Net income attributable to common limited partners’ ownership interest is allocated to the Class D Preferred Units on a pro-rata basis (weighted average Class D Preferred Units outstanding, plus a contractual yield premium of 1.5%, as a percentage of the sum of the weighted average Class D Preferred Units and common limited partner units outstanding). For the three and nine months ended September 30, 2013, net loss attributable to common limited partners’ ownership interest is not allocated to approximately 13,518,000 and 7,560,000 weighted average Class D Preferred Units, respectively, because the contractual terms of the Class D Preferred Units as participating securities do not require the holders to share in the losses of the entity. | | | | | | | | | |
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Diluted net income (loss) attributable to common limited partners per unit is calculated by dividing net income (loss) attributable to common limited partners, plus income allocable to participating securities, by the sum of the weighted average number of common limited partner units outstanding plus the dilutive effect of outstanding participating securities and the effects of outstanding convertible securities. The phantom units and Class D Preferred Units are participating securities included in the calculation of diluted net income (loss) attributable to common units, due to their participation rights and due to their dilution if converted. The Class E Preferred Units are not participating securities and are not convertible and thus are not included in the units outstanding for calculation of diluted net income (loss) attributable to common limited partners per unit. |
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The following table sets forth the reconciliation of the Partnership’s weighted average number of common limited partner units used to compute basic net income (loss) attributable to common limited partners per unit with those used to compute diluted net income (loss) attributable to common limited partners per unit (in thousands): |
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| Three Months Ended | | Nine Months Ended | | | | |
| September 30, | | September 30, | | | | |
| 2014 | | 2013 | | 2014 | | 2013 | | | | |
Weighted average number of common limited partner units – basic | 82,892 | | 78,398 | | 81,497 | | 72,512 | | | | |
Add effect of dilutive securities – phantom units(1) | 1,918 | | - | | 1,706 | | - | | | | |
Add effect of convertible preferred limited partner units(2) | 14,558 | | - | | 14,262 | | - | | | | |
Weighted average common limited partner units – diluted | 99,368 | | 78,398 | | 97,465 | | 72,512 | | | | |
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-1 | For the three and nine months ended September 30, 2013, approximately 1,455,000 and 1,160,000 weighted average phantom units, respectively, were excluded from the computation of diluted net income (loss) attributable to common limited partners per unit, because the inclusion of such phantom units would have been anti-dilutive. | | | | | | | | | |
-2 | For the three and nine months ended September 30, 2013, approximately 13,518,000 and 7,560,000 weighted average Class D Preferred Units, respectively, were excluded from the computation of diluted net income (loss) attributable to common limited partners as the impact of the conversion would have been anti-dilutive. | | | | | | | | | |
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Revenue Recognition | ' |
Revenue Recognition |
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The Partnership accrues unbilled revenue and the related purchase costs due to timing differences between the delivery of natural gas, NGLs, and condensate and the receipt of a delivery statement. This revenue is recorded based upon volumetric data from the Partnership’s records and management estimates of the related gathering and compression fees and applicable product prices. The Partnership had unbilled revenues at September 30, 2014 and December 31, 2013 of $181.3 million and $134.9 million, respectively, which are included in accounts receivable within its consolidated balance sheets. |
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Cash and Cash Equivalents | ' |
Cash and Cash Equivalents |
The Partnership considers all highly liquid investments with a remaining maturity of three months or less at the time of purchase to be cash equivalents. These cash equivalents consist principally of temporary investments of cash in short-term money market instruments. Checks outstanding at the end of a period that exceed available cash balances held at the bank are considered to be book overdrafts and are reclassified to accounts payable. At September 30, 2014 and December 31, 2013, the Partnership reclassified the balances related to book overdrafts of $11.1 million and $28.8 million, respectively, from cash and cash equivalents to accounts payable on the Partnership’s consolidated balance sheets. |
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Recently Adopted Accounting Standards | ' |
Recently Adopted Accounting Standards |
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In July 2013, the FASB issued Accounting Standard Update (“ASU”) 2013-11, “Income Taxes (Topic 740) –Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists,” which, among other changes, requires an entity to present an unrecognized tax benefit as a liability and not net with deferred tax assets when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date to settle any additional income taxes under the tax law of the applicable jurisdiction that would result from the disallowance of a tax position or when the tax law of the applicable tax jurisdiction does not require, and the entity does not intend to, use the deferred tax asset for such purpose. These requirements are effective for interim and annual reporting periods beginning after December 15, 2013. These amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Partnership applied these requirements upon the adoption of ASU 2013-11 on January 1, 2014. The application had no material impact on the Partnership’s financial position or results of operations. |
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Recently Issued Accounting Standards | ' |
Recently Issued Accounting Standards |
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In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 will supersede the revenue recognition requirements in Topic 605 “Revenue Recognition”, and most industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. |
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The amendments in ASU 2014-09 are effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. An entity should apply the amendments in this ASU using one of the following methods: (1) retrospectively to each prior reporting period presented, or (2) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application. |
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These requirements will be applied upon the application of ASU 2014-09 on January 1, 2017. The Partnership is currently in the process of evaluating which method to use for application of ASU 2014-09 and is still determining the impacts of ASU 2014-09 on its financial position, results of operations and disclosures. |
In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in ASU 2014-15 are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Partnership plans on applying the new standard for the annual period ending December 31, 2016. The Partnership does not expect the new standard to have an impact on its disclosures. |
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