Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 29, 2015 | |
Entity Registrant Name | MARKWEST ENERGY PARTNERS L P | |
Entity Central Index Key | 1166036 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Common Units | ||
Entity Common Stock, Shares Outstanding | 186,751,224 | |
Class B Units | ||
Entity Common Stock, Shares Outstanding | 11,972,634 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents ($98,032 and $73,300, respectively) | $236,284 | $108,887 |
Restricted cash | 10,000 | 20,000 |
Receivables, net ($18,542 and $22,722, respectively) | 264,125 | 302,259 |
Receivables from unconsolidated affiliates, net ($0 and $30, respectively) | 5,669 | 7,097 |
Inventories ($2,922 and $2,434, respectively) | 27,718 | 31,749 |
Fair value of derivative instruments | 19,164 | 20,921 |
Deferred income taxes | 10 | 9 |
Other current assets ($6,472 and $9,511, respectively) | 34,754 | 46,731 |
Total current assets | 597,724 | 537,653 |
Property, plant and equipment ($1,461,209 and $1,411,797, respectively) | 10,259,868 | 9,923,524 |
Less: accumulated depreciation ($72,383 and $56,987, respectively) | -1,370,931 | -1,270,624 |
Total property, plant and equipment, net | 8,888,937 | 8,652,900 |
Other long-term assets: | ||
Investment in unconsolidated affiliates ($724,284 and $696,784, respectively) | 838,766 | 805,633 |
Intangibles, net of accumulated amortization of $355,715 and $350,327, respectively | 776,532 | 809,277 |
Goodwill | 79,729 | 82,411 |
Deferred financing costs, net of accumulated amortization of $32,984 and $31,298, respectively | 58,336 | 52,919 |
Deferred contract cost, net of accumulated amortization of $3,250 and $3,198, respectively | 20,000 | 20,052 |
Fair value of derivative instruments | 10,291 | 16,507 |
Other long-term assets ($664 and $664, respectively) | 3,452 | 3,426 |
Total assets | 11,273,767 | 10,980,778 |
Current liabilities: | ||
Accounts payable ($28,246 and $28,021, respectively) | 233,929 | 270,997 |
Accrued liabilities ($16,426 and $48,793, respectively) | 273,750 | 360,006 |
Deferred income taxes | 332 | 239 |
Fair value of derivative instruments | 187 | 0 |
Payables to unconsolidated affiliates, net ($8,774 and $5,500, respectively) | 11,295 | 8,621 |
Total current liabilities | 519,493 | 639,863 |
Deferred income taxes | 353,351 | 357,260 |
Long-term debt, net of premium and discount of $4,463 and $6,196, respectively | 4,184,463 | 3,621,404 |
Other long-term liabilities | 165,632 | 169,012 |
Commitments and contingencies (Note 11) | ||
Equity: | ||
Non-controlling interest in consolidated subsidiaries | 1,015,034 | 983,477 |
Total equity | 6,050,828 | 6,193,239 |
Total liabilities and equity | 11,273,767 | 10,980,778 |
Common Units | ||
Equity: | ||
Common units or Class B units | 4,584,275 | 4,758,243 |
Total equity | 4,584,275 | 4,758,243 |
Class B Units | ||
Equity: | ||
Common units or Class B units | 451,519 | 451,519 |
Total equity | $451,519 | $451,519 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Cash and cash equivalents | $236,284 | $108,887 |
Receivables, net | 264,125 | 302,259 |
Receivables from unconsolidated affiliates, net | 5,669 | 7,097 |
Inventories | 27,718 | 31,749 |
Other current assets | 34,754 | 46,731 |
Property, plant and equipment | 10,259,868 | 9,923,524 |
Less: accumulated depreciation | -1,370,931 | -1,270,624 |
Investment in unconsolidated affiliates | 838,766 | 805,633 |
Accumulated amortization, intangibles | 355,715 | 350,327 |
Accumulated amortization, deferred financing costs | 32,984 | 31,298 |
Accumulated amortization, deferred contract cost | 3,250 | 3,198 |
Other long-term assets | 3,452 | 3,426 |
Accounts payable | 233,929 | 270,997 |
Accrued liabilities | 273,750 | 360,006 |
Payables to unconsolidated affiliates | 11,295 | 8,621 |
Long-term debt, (premiums) and discounts | -4,463 | 6,196 |
Common Units | ||
Common units issued (in units) | 186,751 | 186,553 |
Common units outstanding (in units) | 186,751 | 186,553 |
Class B Units | ||
Common units issued (in units) | 11,973 | 11,973 |
Common units outstanding (in units) | 11,973 | 11,973 |
Total Variable Interest Entities | ||
Cash and cash equivalents | 98,032 | 73,300 |
Receivables, net | 18,542 | 22,722 |
Receivables from unconsolidated affiliates, net | 0 | 30 |
Inventories | 2,922 | 2,434 |
Other current assets | 6,472 | 9,511 |
Property, plant and equipment | 1,461,209 | 1,411,797 |
Less: accumulated depreciation | -72,383 | -56,987 |
Investment in unconsolidated affiliates | 724,284 | 696,784 |
Other long-term assets | 664 | 664 |
Accounts payable | 28,246 | 28,021 |
Accrued liabilities | 16,426 | 48,793 |
Payables to unconsolidated affiliates | $8,774 | $5,500 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenue: | ||
Product sales | $167,937 | $322,369 |
Service revenue | 292,025 | 194,074 |
Derivative gain (loss) | 7,368 | -3,967 |
Total revenue | 467,330 | 512,476 |
Operating expenses: | ||
Purchased product costs | 123,484 | 211,564 |
Derivative loss (gain) related to purchased product costs | 4,540 | -7,798 |
Facility expenses | 91,816 | 83,705 |
Derivative gain related to facility expenses | 0 | -268 |
Selling, general and administrative expenses | 34,635 | 35,290 |
Depreciation | 119,592 | 101,929 |
Amortization of intangible assets | 15,826 | 15,978 |
Impairment expense | 25,523 | 0 |
Gain on disposal of property, plant and equipment | -811 | -93 |
Accretion of asset retirement obligations | 193 | 168 |
Total operating expenses | 414,798 | 440,475 |
Income from operations | 52,532 | 72,001 |
Other income (expense): | ||
Equity in earnings from unconsolidated affiliates | 512 | 250 |
Interest expense | -50,057 | -40,984 |
Amortization of deferred financing costs and debt discount (a component of interest expense) | -1,635 | -2,824 |
Miscellaneous income, net | 48 | 19 |
Income before provision for income tax | 1,400 | 28,462 |
Provision for income tax expense (benefit): | ||
Current | 39 | 345 |
Deferred | -4,160 | 12,201 |
Total provision for income tax | -4,121 | 12,546 |
Net income | 5,521 | 15,916 |
Net income attributable to non-controlling interest | -14,604 | -3,424 |
Net (loss) income attributable to the Partnership's unitholders | ($9,083) | $12,492 |
Net (loss) income attributable to the Partnership's common unitholders per common unit: | ||
Basic (in dollars per unit) | ($0.05) | $0.08 |
Diluted (in dollars per unit) | ($0.05) | $0.07 |
Weighted average number of outstanding common units: | ||
Basic (in units) | 186,685 | 158,808 |
Diluted (in units) | 186,685 | 175,488 |
Cash distribution declared per common unit (in dollars per unit) | $0.90 | $0.86 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Changes in Equity (USD $) | Common Units | Class B Units | Non-controlling Interest | Total |
In Thousands, unless otherwise specified | ||||
Balance, Temporary Equity at Dec. 31, 2013 | $235,617 | |||
Balance, Equity at Dec. 31, 2013 | 3,476,295 | 602,025 | 719,813 | 4,798,133 |
Balance, Equity (in units) at Dec. 31, 2013 | 157,766 | 15,964 | ||
Increase (Decrease) in Equity | ||||
Issuance of units in public offering, net of offering costs | 271,880 | 271,880 | ||
Issuance of units in public offering, net of offering costs (in units) | 4,249 | |||
Distributions paid | -136,405 | -90 | -136,495 | |
Redeemable non-controlling interest classified as temporary equity | 104,052 | 104,052 | ||
Share-based compensation activity | -2,881 | -2,881 | ||
Share-based compensation activity (in units) | 210 | |||
Deferred income tax impact from changes in equity | -7,874 | -7,874 | ||
Net (loss) income | 12,492 | 3,424 | 15,916 | |
Redeemable Non-controlling Interest (Temporary Equity) | ||||
Redeemable non-controlling interest classified as temporary equity | -104,052 | |||
Balance, Temporary Equity at Mar. 31, 2014 | 131,565 | |||
Balance, Equity at Mar. 31, 2014 | 3,613,507 | 602,025 | 827,199 | 5,042,731 |
Balance, Equity (in units) at Mar. 31, 2014 | 162,225 | 15,964 | ||
Balance, Equity at Dec. 31, 2014 | 4,758,243 | 451,519 | 983,477 | 6,193,239 |
Balance, Equity (in units) at Dec. 31, 2014 | 186,553 | 11,973 | ||
Increase (Decrease) in Equity | ||||
Distributions paid | -168,718 | -9,567 | -178,285 | |
Contributions from non-controlling interest | 19,571 | 19,571 | ||
Sale of equity interest in a joint venture | 11,319 | 11,319 | ||
Transfer of interest due to sale of joint venture | 4,370 | -4,370 | ||
Share-based compensation activity | -194 | -194 | ||
Share-based compensation activity (in units) | 198 | |||
Deferred income tax impact from changes in equity | -343 | -343 | ||
Net (loss) income | -9,083 | 14,604 | 5,521 | |
Balance, Equity at Mar. 31, 2015 | $4,584,275 | $451,519 | $1,015,034 | $6,050,828 |
Balance, Equity (in units) at Mar. 31, 2015 | 186,751 | 11,973 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net income | $5,521 | $15,916 |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation | 119,592 | 101,929 |
Amortization of intangible assets | 15,826 | 15,978 |
Impairment expense | 25,523 | 0 |
Amortization of deferred financing costs and debt discount | 1,635 | 2,824 |
Accretion of asset retirement obligations | 193 | 168 |
Amortization of deferred contract cost | 52 | 875 |
Phantom unit compensation expense | 5,923 | 6,043 |
Equity in earnings from unconsolidated affiliates | -512 | -250 |
Distributions from unconsolidated affiliates | 14,938 | 1,369 |
Unrealized loss (gain) on derivative instruments | 8,160 | -11,820 |
Gain on disposal of property, plant and equipment | -811 | -93 |
Deferred income taxes | -4,160 | 12,201 |
Changes in operating assets and liabilities, net of working capital acquired: | ||
Receivables | 38,630 | -3,132 |
Receivables from unconsolidated affiliates | 1,428 | 0 |
Inventories | 4,477 | -6,303 |
Other current assets | 11,977 | 1,922 |
Accounts payable and accrued liabilities | -47,077 | -29,798 |
Payables to unconsolidated affiliates | 2,674 | 0 |
Other long-term assets | -26 | 460 |
Other long-term liabilities | -3,029 | 4,084 |
Net cash provided by operating activities | 200,934 | 112,373 |
Cash flows from investing activities: | ||
Restricted cash | 10,000 | 0 |
Capital expenditures | -438,271 | -587,120 |
Investment in unconsolidated affiliates | -47,426 | -7,498 |
Proceeds from disposal of property, plant and equipment | 857 | 19,144 |
Net cash flows used in investing activities | -474,840 | -575,474 |
Cash flows from financing activities: | ||
Proceeds from public equity offerings, net | 0 | 271,880 |
Proceeds from Credit Facility | 601,900 | 377,300 |
Payments of Credit Facility | -699,500 | 0 |
Proceeds from long-term debt | 660,563 | 0 |
Payments for debt issuance costs, deferred financing costs and registration costs | -7,000 | -1,890 |
Proceeds from sale of equity interest in joint venture | 10,823 | 0 |
Contributions from non-controlling interest | 19,571 | 0 |
Payments of SMR liability | -652 | -594 |
Cash paid for taxes related to net settlement of share-based payment awards | -6,117 | -8,924 |
Payment of distributions to common unitholders | -168,718 | -136,405 |
Payment of distributions to non-controlling interest | -9,567 | -90 |
Net cash flows provided by financing activities | 401,303 | 501,277 |
Net increase in cash and cash equivalents | 127,397 | 38,176 |
Cash and cash equivalents at beginning of period | 108,887 | 85,305 |
Cash and cash equivalents at end of period | $236,284 | $123,481 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Organization and Basis of Presentation | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation |
MarkWest Energy Partners, L.P. was formed in 2002 as a Delaware limited partnership. The Partnership is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the gathering and transportation of crude oil. The Partnership has a leading presence in many natural gas resource plays including the Marcellus Shale, Utica Shale, Huron/Berea Shale, Haynesville Shale, Woodford Shale and Granite Wash formations. | |
These unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC for interim financial reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Partnership’s consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2014. In management’s opinion, the Partnership has made all adjustments necessary for a fair presentation of its results of operations, financial position and cash flows for the periods shown. These adjustments are of a normal recurring nature. Finally, results for the three months ended March 31, 2015 are not necessarily indicative of results for the full year 2015 or any other future period. | |
The Partnership’s unaudited condensed consolidated financial statements include all majority-owned or controlled subsidiaries. In addition, MarkWest Utica EMG, L.L.C. (“MarkWest Utica EMG”), a VIE for which the Partnership has been determined to be the primary beneficiary, is included in the condensed consolidated financial statements (See Note 3). Intercompany investments, accounts and transactions have been eliminated. The Partnership’s investments in MarkWest Pioneer, L.L.C. (“MarkWest Pioneer”) and Centrahoma Processing, LLC (“Centrahoma”), in which the Partnership exercises significant influence but does not control and does not have a controlling financial interest, are accounted for using the equity method. The Partnership’s investments in Ohio Gathering Company L.L.C. (“Ohio Gathering”) and MarkWest Utica EMG Condensate L.L.C. (“Utica Condensate”), each VIEs, in which the Partnership exercises significant influence but in which the Partnership does not control and is not the primary beneficiary, are also accounted for using the equity method. | |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2015 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | |
2. Recent Accounting Pronouncements | |
In May 2014, the FASB issued ASU 2014-09 — Revenue from Contracts with Customers (“ASU 2014-09”) that will supersede current revenue recognition guidance. ASU 2014-09 is intended to provide companies with a single comprehensive model to use for all revenue arising from contracts with customers, which would include real estate sales transactions. ASU 2014-09 is effective for the Partnership as of January 1, 2017 and must be adopted using either a full retrospective approach for all periods presented in the period of adoption (with some limited relief provided) or a modified retrospective approach. The Partnership is in the early stages of evaluating ASU 2014-09 and has not yet determined the impact on the Partnership’s condensed consolidated financial statements. | |
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”), that provides guidance on management’s responsibility to perform interim and annual assessments of an entity’s ability to continue as a going concern and provides related disclosure requirements. ASU 2014-15 applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Partnership is in the early stages of evaluating ASU 2014-15 and has not yet determined the impact on the Partnership’s condensed consolidated financial statements. | |
In February 2015, the FASB issued ASU 2015-02—Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”) that will modify current consolidation guidance. ASU 2015-02 makes changes to both the variable interest model and the voting interest model, including modifying the evaluation of whether limited partnerships or similar legal entities are VIEs or voting interest entities and amending the guidance for assessing how relationships of related parties affect the consolidation analysis of VIEs. ASU 2015-02 is effective for the Partnership as of January 1, 2016 and early adoption is permitted. The Partnership is in the early stages of evaluating ASU 2015-02 and has not yet determined the impact on the Partnership’s consolidated financial statements. | |
In April 2015, the FASB issued ASU 2015-03-Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”) that will modify the presentation of debt issuance costs such that they are presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. ASU 2015-03 is effective for the Partnership as of January 1, 2016 and early adoption is permitted. The Partnership is in the early stages of evaluating ASU 2015-03 and has not yet determined the impact on the Partnership’s consolidated financial statements. | |
Variable_Interest_Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2015 | |
Variable Interest Entities | |
Variable Interest Entities | |
3. Variable Interest Entity | |
MarkWest Utica EMG | |
Effective January 1, 2012, the Partnership and EMG Utica, LLC (“EMG Utica”) (together the “Members”) executed agreements to form a joint venture, MarkWest Utica EMG, to develop significant natural gas gathering, processing and NGL fractionation, transportation and marketing infrastructure in eastern Ohio. | |
In February 2013, the Members entered into the Amended and Restated Limited Liability Company Agreement of MarkWest Utica EMG (“Amended Utica LLC Agreement”) which replaced the original agreement. Pursuant to the Amended Utica LLC Agreement, the aggregate funding commitment of EMG Utica increased to $950.0 million (the “Minimum EMG Investment”). EMG Utica was required to fund all capital until the Minimum EMG Investment was satisfied, which occurred in May 2013. After EMG Utica funded the Minimum EMG Investment, the Partnership was required to fund, as needed, 100% of future capital for MarkWest Utica EMG until such time as the aggregate capital that had been contributed by the Members reached $2.0 billion, which occurred in November 2014. Until such time as the investment balances of the Partnership and EMG Utica are in the ratio of 70% and 30%, respectively (such time being referred to as the “Second Equalization Date”), EMG Utica has the right, but not the obligation, to fund up to 10% of each capital call for MarkWest Utica EMG, and the Partnership will be required to fund all remaining capital not elected to be funded by EMG Utica. After the Second Equalization Date, the Partnership and EMG Utica will have the right, but not the obligation, to fund their pro rata portion (based on their respective investment balances) of any additional required capital and may also fund additional capital that the other party elects not to fund. As of March 31, 2015, EMG Utica has contributed $985.0 million and the Partnership has contributed approximately $1,364.7 million to MarkWest Utica EMG. As of March 31, 2015, the investment balances of the Partnership and EMG Utica are in the ratio of 58% and 42%, respectively. | |
Under the Amended Utica LLC Agreement, after EMG Utica has contributed more than $500.0 million to MarkWest Utica EMG and prior to December 31, 2016, EMG Utica’s investment balance will also be increased by a quarterly special non-cash allocation of income (“Preference Amount”) that is based upon the amount of capital contributed by EMG Utica in excess of $500.0 million. No Preference Amount will accrue to EMG Utica’s investment balance after December 31, 2016. EMG Utica received a special non-cash allocation of income of approximately $10.3 million and approximately $8.8 million for the three months ended March 31, 2015 and March 31, 2014, respectively. | |
Under the Amended Utica LLC Agreement, the Partnership will continue to receive 60% of cash generated by MarkWest Utica EMG that is available for distribution until the earlier of December 31, 2016 and the date on which the Partnership’s investment balance equals 60% of the aggregate investment balances of the Members. After the earlier of those dates, cash generated by MarkWest Utica EMG that is available for distribution will be allocated to the Members in proportion to their respective investment balances. | |
The Partnership has determined that MarkWest Utica EMG does not meet the business scope exception to be excluded as a VIE due to the unique investment structure, discussed above, which creates a de-facto agent relationship between the members, as EMG Utica has funded portions of the Partnership’s ownership in MarkWest Utica EMG. MarkWest Utica EMG’s inability to fund its planned activities without additional subordinated financial support qualifies it to be a VIE. The Partnership has concluded that it is the primary beneficiary of MarkWest Utica EMG. As the primary beneficiary of MarkWest Utica EMG, the Partnership consolidates the entity and recognizes non-controlling interest and redeemable non-controlling interest. The decision to consolidate MarkWest Utica EMG is re-evaluated quarterly and is subject to change. Upon the earlier of December 31, 2016 and the date on which the Partnership’s investment balance equals 60% of the aggregate investment balances of the Members, a de-facto agent relationship between the members will no longer exist. | |
The assets of MarkWest Utica EMG are the property of MarkWest Utica EMG and are not available to the Partnership for any other purpose, including as collateral for its secured debt (See Notes 9 and 15). MarkWest Utica EMG’s asset balances can only be used to settle its own obligations. The liabilities of MarkWest Utica EMG do not represent additional claims against the Partnership’s general assets and the creditors or beneficial interest holders of MarkWest Utica EMG do not have recourse to the general credit of the Partnership. The Partnership’s maximum exposure to loss as a result of its involvement with MarkWest Utica EMG includes its equity investment, any additional capital contribution commitments and any operating expenses incurred by the subsidiary operator in excess of its compensation received for the performance of the operating services. The Partnership did not provide any financial support to MarkWest Utica EMG that it was not contractually obligated to provide during the three months ended March 31, 2015 and 2014. | |
Ohio Gathering | |
Ohio Gathering is a subsidiary of MarkWest Utica EMG and is engaged in providing natural gas gathering services in the Utica Shale in eastern Ohio. Prior to June 1, 2014, MarkWest Utica EMG, as the primary beneficiary of a VIE, consolidated Ohio Gathering. Effective June 1, 2014 (“Summit Investment Date”), Summit Midstream Partners (“Summit”) exercised its option (“Ohio Gathering Option”) and increased its equity ownership (“Summit Equity Ownership”) from less than 1% to approximately 40% through a cash investment of approximately $341.1 million that Ohio Gathering received in 2014. MarkWest Utica EMG received $336.1 million as a distribution from Ohio Gathering as a result of the exercise of the Ohio Gathering Option. Summit purchased its initial 1% equity interest and the Ohio Gathering Option from Blackhawk Midstream LLC (“Blackhawk”) in January 2014. As of the Summit Investment Date, MarkWest Utica EMG was no longer deemed the primary beneficiary due to Summit’s voting rights on significant operating matters obtained as a result of its increased equity ownership in Ohio Gathering. As of the Summit Investment Date, the Partnership accounted for Ohio Gathering as an equity method investment. As of March 31, 2015, Ohio Gathering’s net assets are reported under the caption Investment in unconsolidated affiliates on the Condensed Consolidated Balance Sheet. | |
For the three months ended March 31, 2014, the Partnership’s condensed consolidated results of operations include the consolidated results of operations of Ohio Gathering. For the three months ended March 31, 2015, the Partnership, through its consolidation of MarkWest Utica EMG has reported its pro rata share of Ohio Gathering’s net income under the caption Equity in earnings from unconsolidated affiliates on the Condensed Consolidated Statements of Operations. Ohio Gathering is considered to be a related party. The Partnership receives engineering and construction and administrative management fee revenue and other direct personnel costs (“Operational Service” revenue) for operating Ohio Gathering. The amount of Operational Service revenue related to Ohio Gathering for the three months ended March 31, 2015 was approximately $4.7 million and is reported as Service Revenue in the Condensed Consolidated Statements of Operations. | |
Other_Equity_Interests
Other Equity Interests | 3 Months Ended |
Mar. 31, 2015 | |
Other Equity Interests | |
Other Equity Interests | |
4. Other Equity Interests | |
Utica Condensate | |
In December 2013, the Partnership and The Energy & Minerals Group (“EMG”) (together the “Condensate Members”) executed an agreement (“Utica Condensate LLC Agreement”) to form Utica Condensate for the purpose of engaging in wellhead condensate gathering, stabilization, terminalling, storage and marketing in the state of Ohio. If Utica Condensate requires additional capital, each Condensate Member has the right, but not the obligation, to contribute capital in proportion to its ownership interest. As of March 31, 2015, the Partnership owned 55% of Utica Condensate. | |
Under the Utica Condensate LLC Agreement, oversight of the business and affairs of Utica Condensate is managed by a board of managers. The number of managers that each Condensate Member may designate is determined based upon ownership interests. In addition, both the Partnership and EMG have consent rights with respect to certain specified material transactions involving Utica Condensate; therefore, management has concluded that Utica Condensate is under joint control and will be accounted for as an equity method investment. | |
Ohio Condensate | |
Utica Condensate’s business is conducted solely through its subsidiary, Ohio Condensate Company L.L.C. (“Ohio Condensate”), which was formed in December 2013 through an agreement executed between Utica Condensate and Blackhawk (“Ohio Condensate LLC Agreement”), in which Utica Condensate and Blackhawk contributed cash in exchange for equity ownership interests of 99% and 1%, respectively. In January 2014, Summit purchased Blackhawk’s less than 1% equity interest and its option to purchase up to an additional equity ownership interest of 40% in Ohio Condensate (“Ohio Condensate Option”). Effective as of the Summit Investment Date, Summit exercised the Ohio Condensate Option and increased its equity ownership from less than 1% to 40% through a cash investment of approximately $8.6 million. | |
As of March 31, 2015, Utica Condensate owned 60% of Ohio Condensate. The Partnership sold approximately $17 million of assets under construction to Utica Condensate in December 2013 and received the $17 million in the first quarter of 2014. The Partnership has recorded the proceeds in the Proceeds from disposal of property, plant and equipment in the accompanying Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2014. The amount of Operational Service revenue related to Ohio Condensate for the three months ended March 31, 2015 was approximately $1.1 million and is reported as Service revenue in the Condensed Consolidated Statements of Operations. | |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Derivative Financial Instruments | |||||||||||||||||||||
Derivative Financial Instruments | |||||||||||||||||||||
5. Derivative Financial Instruments | |||||||||||||||||||||
Commodity Derivatives | |||||||||||||||||||||
NGL and natural gas prices are volatile and are impacted by changes in fundamental supply and demand, as well as market uncertainty, availability of NGL transportation and fractionation capacity and a variety of additional factors that are beyond the Partnership’s control. The Partnership’s profitability is directly affected by prevailing commodity prices primarily as a result of processing or conditioning at its own or third-party processing plants, purchasing and selling or gathering and transporting volumes of natural gas at index-related prices and the cost of third-party transportation and fractionation services. To the extent that commodity prices influence the level of natural gas drilling by the Partnership’s producer customers, such prices also affect profitability. To protect itself financially against adverse price movements and to maintain more stable and predictable cash flows so that the Partnership can meet its cash distribution objectives, debt service and capital plans, the Partnership executes a strategy governed by the risk management policy approved by the General Partner’s board of directors. The Partnership has a committee comprised of senior management that oversees risk management activities, continually monitors the risk management program and adjusts its strategy as conditions warrant. The Partnership enters into certain derivative contracts to reduce the risks associated with unfavorable changes in the prices of natural gas, NGLs and crude oil. Derivative contracts utilized are swaps and options traded on the OTC market and fixed price forward contracts. The risk management policy does not allow the Partnership to take speculative positions with its derivative contracts. | |||||||||||||||||||||
To mitigate its cash flow exposure to fluctuations in the price of NGLs, the Partnership has entered into derivative financial instruments relating to the future price of NGLs and crude oil. The Partnership currently manages the majority of its NGL price risk using direct product NGL derivative contracts. The Partnership enters into NGL derivative contracts when adequate market liquidity exists and future prices are satisfactory. | |||||||||||||||||||||
To mitigate its cash flow exposure to fluctuations in the price of natural gas, the Partnership primarily utilizes derivative financial instruments relating to the future price of natural gas and takes into account the partial offset of its long and short gas positions resulting from normal operating activities. | |||||||||||||||||||||
As a result of its current derivative positions, the Partnership has mitigated a portion of its expected commodity price risk through the first quarter of 2016. The Partnership would be exposed to additional commodity risk in certain situations such as if producers under deliver or over deliver product or when processing facilities are operated in different recovery modes. In the event the Partnership has derivative positions in excess of the product delivered or expected to be delivered, the excess derivative positions may be terminated. | |||||||||||||||||||||
All of the Partnership’s financial derivative positions are with financial institutions that are participating members of the Credit Facility (“participating bank group members”). Management conducts a standard credit review on counterparties to derivative contracts. There are no collateral requirements for derivative contracts among the Partnership and any participating bank group members. Specifically, the Partnership is not required to post collateral when it enters into derivative contracts with participating bank group members, as the participating bank group members have a collateral position in substantially all the wholly-owned assets of the Partnership other than MarkWest Liberty Midstream & Resources, L.L.C. (“MarkWest Liberty Midstream”) and its subsidiaries. A separate agreement with certain participating bank group members allows MarkWest Liberty Midstream to enter into derivative positions without posting cash collateral. The Partnership uses standardized agreements that allow for offset of certain positive and negative exposures (“master netting arrangements”) in the event of default or other terminating events, including bankruptcy. | |||||||||||||||||||||
The Partnership records derivative contracts at fair value in the Condensed Consolidated Balance Sheets and has not elected hedge accounting or the normal purchases and normal sales designation. The Partnership’s accounting may cause volatility in the Condensed Consolidated Statements of Operations as the Partnership recognizes in current earnings all unrealized gains and losses from the changes in fair value of derivatives. | |||||||||||||||||||||
As of March 31, 2015, the Partnership had the following outstanding commodity contracts that were entered into to manage cash flow risk associated with future sales of NGLs or future purchases of natural gas: | |||||||||||||||||||||
Derivative contracts not designated as hedging instruments | Financial | Notional Quantity | |||||||||||||||||||
Position | (net) | ||||||||||||||||||||
Crude Oil (Bbl) | Short | 275,000 | |||||||||||||||||||
Natural Gas (MMBtu) | Long | 486,358 | |||||||||||||||||||
NGLs (Gal) | Short | 126,056,336 | |||||||||||||||||||
Embedded Derivatives in Commodity Contracts | |||||||||||||||||||||
The Partnership has a commodity contract with a producer in the Appalachia region that creates a floor on the frac spread for gas purchases of 9,000 Dth/d. The commodity contract is a component of a broader regional arrangement that also includes a keep-whole processing agreement. This contract is accounted for as an embedded derivative and is recorded at fair value. The changes in fair value of this commodity contract are based on the difference between the contractual and index pricing and are recorded in earnings through Derivative loss (gain) related to purchased product costs. In February 2011, the Partnership executed agreements with the producer to extend the commodity contract and the related processing agreement from March 31, 2015 to December 31, 2022 with the producer’s option to extend the agreement for successive five-year terms through December 31, 2032. As of March 31, 2015, the estimated fair value of this contract was a liability of $39.2 million and the recorded value was an asset of $14.3 million. The recorded asset does not include the inception fair value of the commodity contract related to the extended period from April 1, 2015 to December 31, 2022. In accordance with GAAP for non-option embedded derivatives, the fair value of this extended portion of the commodity contract at its inception of February 1, 2011 is deemed to be allocable to the host processing contract and therefore not recorded as a derivative asset. See the following table for a reconciliation of the liability recorded for the embedded derivative as of March 31, 2015 (in thousands): | |||||||||||||||||||||
Fair value of commodity contract | $ | (39,213 | ) | ||||||||||||||||||
Inception value for period from April 1, 2015 to December 31, 2022 | (53,507 | ) | |||||||||||||||||||
Derivative asset as of March 31, 2015 | $ | 14,294 | |||||||||||||||||||
The Partnership had a commodity contract that gave it an option to fix a component of the utilities cost to an index price on electricity at its plant location in the Southwest segment through the fourth quarter of 2014. Changes in the fair value of the derivative component of this contract were recognized as Derivative gain related to facility expenses. | |||||||||||||||||||||
Financial Statement Impact of Derivative Contracts | |||||||||||||||||||||
There were no material changes to the Partnership’s policy regarding the accounting for these instruments as previously disclosed in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2014. The impact of the Partnership’s derivative instruments on its Condensed Consolidated Balance Sheets is summarized below (in thousands): | |||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||
Derivative instruments not designated as hedging | Fair Value at | Fair Value at | Fair Value at | Fair Value at | |||||||||||||||||
instruments and their balance sheet location | March 31, | December 31, | March 31, | December 31, | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Commodity contracts(1) | |||||||||||||||||||||
Fair value of derivative contracts — current | $ | 19,164 | $ | 20,921 | $ | (187 | ) | $ | — | ||||||||||||
Fair value of derivative contracts — long-term | 10,291 | 16,507 | — | — | |||||||||||||||||
Total | $ | 29,455 | $ | 37,428 | $ | (187 | ) | $ | — | ||||||||||||
-1 | Includes Embedded Derivatives in Commodity Contracts as discussed above. | ||||||||||||||||||||
Although certain derivative positions are subject to master netting agreements, the Partnership has elected not to offset any derivative assets and liabilities. The gross amounts in the table below equal the balances presented in the Condensed Consolidated Balance Sheets. The table below summarizes the impact if the Partnership had elected to net its derivative positions that are subject to master netting arrangements (in thousands): | |||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||
As of March 31, 2015 | Gross | Gross | Net Amount | Gross | Gross | Net | |||||||||||||||
Amounts of | Amounts | Amounts of | Amounts | Amount | |||||||||||||||||
Assets in the | Not Offset in | Liabilities in | Not Offset in | ||||||||||||||||||
Consolidated | the | the | the | ||||||||||||||||||
Balance | Consolidated | Consolidated | Consolidated | ||||||||||||||||||
Sheet | Balance | Balance | Balance | ||||||||||||||||||
Sheet | Sheet | Sheet | |||||||||||||||||||
Current | |||||||||||||||||||||
Commodity contracts | $ | 15,161 | $ | (30 | ) | $ | 15,131 | $ | (187 | ) | $ | 30 | $ | (157 | ) | ||||||
Embedded derivatives in commodity contracts | 4,003 | — | 4,003 | — | — | — | |||||||||||||||
Total current derivative instruments | 19,164 | (30 | ) | 19,134 | (187 | ) | 30 | (157 | ) | ||||||||||||
Non-current | |||||||||||||||||||||
Embedded derivatives in commodity contracts | 10,291 | — | 10,291 | — | — | — | |||||||||||||||
Total non-current derivative instruments | 10,291 | — | 10,291 | — | — | — | |||||||||||||||
Total derivative instruments | $ | 29,455 | $ | (30 | ) | $ | 29,425 | $ | (187 | ) | $ | 30 | $ | (157 | ) | ||||||
Assets | Liabilities | ||||||||||||||||||||
As of December 31, 2014 | Gross | Gross | Net Amount | Gross | Gross | Net | |||||||||||||||
Amounts of | Amounts | Amounts of | Amounts | Amount | |||||||||||||||||
Assets in the | Not Offset in | Liabilities in | Not Offset in | ||||||||||||||||||
Consolidated | the | the | the | ||||||||||||||||||
Balance | Consolidated | Consolidated | Consolidated | ||||||||||||||||||
Sheet | Balance | Balance | Balance | ||||||||||||||||||
Sheet | Sheet | Sheet | |||||||||||||||||||
Current | |||||||||||||||||||||
Commodity contracts | $ | 18,652 | $ | — | $ | 18,652 | $ | — | $ | — | $ | — | |||||||||
Embedded derivatives in commodity contracts | 2,269 | — | 2,269 | — | — | — | |||||||||||||||
Total current derivative instruments | 20,921 | — | 20,921 | — | — | — | |||||||||||||||
Non-current | |||||||||||||||||||||
Embedded derivatives in commodity contracts | 16,507 | — | 16,507 | — | — | — | |||||||||||||||
Total non-current derivative instruments | 16,507 | — | 16,507 | — | — | — | |||||||||||||||
Total derivative instruments | $ | 37,428 | $ | — | $ | 37,428 | $ | — | $ | — | $ | — | |||||||||
In the tables above, the Partnership does not offset a counterparty’s current derivative contracts with the counterparty’s non-current derivative contracts, although the Partnership’s master netting arrangements would allow current and non-current positions to be offset in the event of default. Additionally, in the event of a default, the Partnership’s master netting arrangements would allow for the offsetting of all transactions executed under the master netting arrangement. These types of transactions may include non-derivative instruments, derivatives qualifying for scope exceptions, receivables and payables arising from settled positions, and other forms of non-cash collateral (such as letters of credit). These types of transactions are excluded from the offsetting tables presented above. | |||||||||||||||||||||
The impact of the Partnership’s derivative instruments on its Condensed Consolidated Statements of Operations is summarized below (in thousands): | |||||||||||||||||||||
Derivative contracts not designated as | Three months ended March 31, | ||||||||||||||||||||
hedging instruments and the location of | |||||||||||||||||||||
gain or (loss) recognized in income | 2015 | 2014 | |||||||||||||||||||
Revenue: Derivative gain (loss) | |||||||||||||||||||||
Realized gain (loss) | $ | 10,988 | $ | (7,607 | ) | ||||||||||||||||
Unrealized (loss) gain | (3,620 | ) | 3,640 | ||||||||||||||||||
Total revenue: derivative gain (loss) | 7,368 | (3,967 | ) | ||||||||||||||||||
Derivative (loss) gain related to purchased product costs | |||||||||||||||||||||
Realized loss | — | (114 | ) | ||||||||||||||||||
Unrealized (loss) gain | (4,540 | ) | 7,912 | ||||||||||||||||||
Total derivative (loss) gain related to purchased product costs | (4,540 | ) | 7,798 | ||||||||||||||||||
Derivative gain related to facility expenses | |||||||||||||||||||||
Unrealized gain | — | 268 | |||||||||||||||||||
Total gain | $ | 2,828 | $ | 4,099 | |||||||||||||||||
Fair_Value
Fair Value | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Fair Value | |||||||||
Fair Value | |||||||||
6. Fair Value | |||||||||
Fair value measurements and disclosures relate primarily to the Partnership’s derivative positions discussed in Note 5. Money market funds, which are included in Cash and cash equivalents on the Condensed Consolidated Balance Sheets, are measured at fair value and are included in Level 1 measurements of the valuation hierarchy. The following table presents the derivative instruments carried at fair value as of March 31, 2015 and December 31, 2014 (in thousands): | |||||||||
As of March 31, 2015 | Assets | Liabilities | |||||||
Significant other observable inputs (Level 2) | |||||||||
Commodity contracts | $ | 9,942 | $ | (59 | ) | ||||
Significant unobservable inputs (Level 3) | |||||||||
Commodity contracts | 5,219 | (128 | ) | ||||||
Embedded derivatives in commodity contracts | 14,294 | — | |||||||
Total carrying value in Condensed Consolidated Balance Sheets | $ | 29,455 | $ | (187 | ) | ||||
As of December 31, 2014 | Assets | Liabilities | |||||||
Significant other observable inputs (Level 2) | |||||||||
Commodity contracts | $ | 14,812 | $ | — | |||||
Significant unobservable inputs (Level 3) | |||||||||
Commodity contracts | 3,840 | — | |||||||
Embedded derivatives in commodity contracts | 18,776 | — | |||||||
Total carrying value in Condensed Consolidated Balance Sheets | $ | 37,428 | $ | — | |||||
The following table provides additional information about the significant unobservable inputs used in the valuation of Level 3 instruments as of March 31, 2015. The market approach is used for valuation of all instruments. | |||||||||
Level 3 Instrument | Balance | Unobservable Inputs | Value Range | Time Period | |||||
Sheet | |||||||||
Classification | |||||||||
Commodity contracts | Assets | Forward propane prices (per gallon) (1) | $0.52 - $0.57 | Apr. 2015 - Mar. 2016 | |||||
Forward isobutane prices (per gallon) (1) | $0.63 - $0.69 | Apr. 2015 - Mar. 2016 | |||||||
Forward normal butane prices (per gallon) (1) | $0.59 - $0.67 | Apr. 2015 - Mar. 2016 | |||||||
Forward natural gasoline prices (per gallon) (1) | $1.10 - $1.12 | May 2015 — Mar. 2016 | |||||||
Liabilities | Forward propane prices (per gallon) (1) | $0.52 - $0.54 | Apr. 2015 — Sep. 2015 | ||||||
Forward isobutane prices (per gallon) (1) | $0.63 - $0.65 | Apr. 2015 — Sep. 2015 | |||||||
Forward normal butane prices (per gallon) (1) | $0.59 - $0.67 | Apr. 2015 — Jan. 2016 | |||||||
Forward natural gasoline prices (per gallon) (1) | $1.11 - $1.17 | Apr. 2015 — Jun. 2015 | |||||||
Embedded derivative in commodity contract | Asset | Forward propane prices (per gallon) (1) | $0.52 - $0.60 | Apr. 2015 - Dec. 2022 | |||||
Forward isobutane prices (per gallon) (1) | $0.63 - $0.81 | Apr. 2015 - Dec. 2022 | |||||||
Forward normal butane prices (per gallon) (1) | $0.59 - $0.78 | Apr. 2015 - Dec. 2022 | |||||||
Forward natural gasoline prices (per gallon) (1) | $1.10 - $1.22 | Apr. 2015 - Dec. 2022 | |||||||
Forward natural gas prices (per MMBtu) (2) | $2.46 - $3.76 | Apr. 2015 - Dec. 2022 | |||||||
Probability of renewal (3) | 0% | ||||||||
-1 | NGL prices used in the valuations are generally at the lower end of the range in the early years and increase over time. | ||||||||
-2 | Natural gas prices used in the valuations are generally at the lower end of the range in the early years and increase over time. | ||||||||
-3 | The producer counterparty to the embedded derivative has the option to renew the gas purchase agreement and the related keep-whole processing agreement for two successive five-year terms after 2022. The embedded gas purchase agreement cannot be renewed without the renewal of the related keep-whole processing agreement. Due to the significant number of years until the renewal options are exercisable and the high level of uncertainty regarding the counterparty’s future business strategy, the future commodity price environment and the future competitive environment for midstream services in the Appalachia area, management determined that a 0% probability of renewal is an appropriate assumption. | ||||||||
Fair Value Sensitivity Related to Unobservable Inputs | |||||||||
Commodity contracts (assets and liabilities) - For the Partnership’s commodity contracts, increases in forward NGL prices result in a decrease in the fair value of the derivative assets and an increase in the fair value of the derivative liabilities. The forward prices for the individual NGL products generally increase or decrease in a positive correlation with one another. An increase in crude option volatilities will generally result in an increase in the fair value of the Partnership’s derivative assets and derivative liabilities in commodity contracts. | |||||||||
Embedded derivative in commodity contracts (asset and liability) - The embedded derivative asset relates to the natural gas purchase agreement embedded in a keep-whole processing agreement as discussed further in Note 5. Increases (decreases) in forward NGL prices result in an increase (decrease) in the fair value of the embedded derivative. An increase in the probability of renewal would result in an increase in the fair value of the related embedded derivative liability. | |||||||||
Level 3 Valuation Process | |||||||||
The Partnership’s Risk Management Department (the “Risk Department”) is responsible for the valuation of the Partnership’s commodity derivative contracts and embedded derivatives in commodity contracts. The Risk Department reports to the Chief Financial Officer for the oversight of the Partnership’s commodity risk management program. The members of the Risk Department have the requisite experience, knowledge and day-to-day involvement in the energy commodity markets to ensure appropriate valuations and understand the changes in the valuations from period to period. The valuations of the Level 3 commodity derivative contracts are performed by a third-party pricing service and reviewed and validated on a quarterly basis by the Risk Department by comparing the pricing and option volatilities to actual market data and/or data provided by at least one other independent third-party pricing service. The valuations for the embedded derivative in the commodity contract are completed by the Risk Department utilizing the market data and price curves provided by the third-party pricing service. For the embedded derivative in the keep-whole processing arrangement discussed in Note 5, the Risk Department must develop forward price curves for NGLs and natural gas for periods in which price curves are not available from third-party pricing services due to insufficient market data. As of March 31, 2015, the Risk Department utilized internally developed price curves for the period of April 2015 through December 2022 in the valuation of the embedded derivative in the keep-whole processing arrangement. In developing the pricing curves for these periods, the Risk Department maximizes its use of the latest known market data and trends as well as its understanding of the historical relationships between forward NGL and natural gas prices and the forward market data that is available for the required period, such as crude oil pricing and natural gas pricing from other markets. However, there is very limited actual market data available to validate the Risk Department’s estimated price curves. | |||||||||
Changes in Level 3 Fair Value Measurements | |||||||||
The tables below include a roll forward of the balance sheet amounts for the three months ended March 31, 2015 and 2014 (including the change in fair value) for assets and liabilities classified by the Partnership within Level 3 of the valuation hierarchy (in thousands): | |||||||||
Three months ended March 31, 2015 | |||||||||
Commodity Derivative | Embedded Derivatives | ||||||||
Contracts (net) | in Commodity | ||||||||
Contracts (net) | |||||||||
Fair value at beginning of period | $ | 3,840 | $ | 18,776 | |||||
Total loss (realized and unrealized) included in earnings (1) | 5,028 | (5,782 | ) | ||||||
Settlements | (3,777 | ) | 1,300 | ||||||
Fair value at end of period | $ | 5,091 | $ | 14,294 | |||||
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1) | $ | 5,091 | $ | (5,667 | ) | ||||
Three months ended March 31, 2014 | |||||||||
Commodity Derivative | Embedded Derivatives | ||||||||
Contracts (net) | in Commodity | ||||||||
Contracts (net) | |||||||||
Fair value at beginning of period | $ | (5,460 | ) | $ | (35,032 | ) | |||
Total loss (realized and unrealized) included in earnings (1) | (2,277 | ) | 4,410 | ||||||
Settlements | 6,986 | 2,136 | |||||||
Fair value at end of period | $ | (751 | ) | $ | (28,486 | ) | |||
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1) | $ | 802 | $ | 4,036 | |||||
-1 | Gains and losses on Commodity Derivative Contracts classified as Level 3 are recorded in Revenue: Derivative gain (loss). Gains and losses on Embedded Derivatives in Commodity Contracts are recorded in Purchased product costs, Derivative loss (gain) related to purchased product costs, Facility expenses and Derivative gain related to facility expenses. | ||||||||
Inventories
Inventories | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventories | ||||||||
Inventories | ||||||||
7. Inventories | ||||||||
Inventories consist of the following (in thousands): | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
NGLs | $ | 3,560 | $ | 9,687 | ||||
Line fill | 5,894 | 6,241 | ||||||
Spare parts, materials and supplies | 18,264 | 15,821 | ||||||
Total inventories | $ | 27,718 | $ | 31,749 | ||||
Impairment_of_LongLived_Assets
Impairment of Long-Lived Assets and Goodwill | 3 Months Ended |
Mar. 31, 2015 | |
Impairment of Long-Lived Assets and Goodwill | |
Impairment of Long-Lived Assets and Goodwill | |
8. Impairment of Long-Lived Assets and Goodwill | |
Long-Lived Assets. The Partnership’s policy is to evaluate whether there has been an impairment in the value of long-lived assets when certain events have taken place that indicate that the remaining balance may not be recoverable. The Partnership evaluates the carrying value of its property, plant and equipment and intangibles on at least a segment level and at lower levels when cash flows for specific assets can be identified. | |
An analysis completed during the first quarter of 2015 indicated a potential impairment of the Appleby asset grouping in the Southwest segment. Appleby is a gathering system in Nacogdoches County, Texas (“Appleby”). In the first quarter of 2015, Appleby’s expected future cash flows were adversely impacted by declines in the forward price strip of natural gas and condensate. The Partnership used a combination of the income and market approaches for determining the fair value of Appleby and recognized an impairment totaling approximately $22.8 million, of which approximately $16.8 million relates to intangibles and $6.0 million to property, plant and equipment for the three months ended March 31, 2015. This impairment is recorded as Impairment expense on the Condensed Consolidated Statements of Operations. | |
Goodwill. The Partnership annually evaluates goodwill for impairment as of November 30, as well as whenever events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. | |
Management considered the decline in commodity prices and resulting decline in projected operating income to be an indicator of impairment of goodwill of the Western Oklahoma assets in our Southwest segment (“Western Oklahoma Reporting Unit”). The Partnership performed the first step of our goodwill impairment analysis as of February 28, 2015 and determined that the carrying value of the Western Oklahoma Reporting Unit exceeded its fair value. The Partnership completed the second step of its goodwill impairment analysis comparing the implied fair value of that reporting unit’s goodwill to the carrying amount of that goodwill and determined goodwill related to the Western Oklahoma Reporting Unit was fully impaired and recorded an impairment charge of $2.7 million. | |
In completing these evaluations, management’s best estimates of the expected future results are the primary driver in determining the fair value. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the goodwill impairment test will prove to be an accurate prediction of the future. Management estimated the fair value of the Partnership’s reporting units primarily using an income approach based on discounted future cash flows using significant unobservable inputs (Level 3). Management estimated the fair value of the Partnership’s asset grouping using a combination of the income and market approaches based on discounted future cash flows using significant unobservable inputs (Level 3). | |
There were no impairments recorded related to the Partnership’s other reporting units as a result of its analyses for the three months ended March 31, 2015. | |
LongTerm_Debt
Long-Term Debt | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Long-Term Debt | ||||||||
Long-Term Debt | ||||||||
9. Long-Term Debt | ||||||||
Debt is summarized below (in thousands): | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Credit Facility | ||||||||
Credit Facility, variable interest, due March 2019 (1) | $ | — | $ | 97,600 | ||||
Senior Notes (2) | ||||||||
2020 Senior Notes, 6.75% interest, issued November 2010 and due November 2020 | 500,000 | 500,000 | ||||||
2021 Senior Notes, 6.5% interest, net of discount of $397 and $413, respectively, issued February and March 2011 and due August 2021 | 324,603 | 324,587 | ||||||
2022 Senior Notes, 6.25% interest, issued October 2011 and due September 2022 | 455,000 | 455,000 | ||||||
2023A Senior Notes, 5.5% interest, net of discount of $5,615 and $5,783, respectively, issued August 2012 and due February 2023 | 744,385 | 744,217 | ||||||
2023B Senior Notes, 4.5% interest, issued January 2013 and due July 2023 | 1,000,000 | 1,000,000 | ||||||
2024 Senior Notes, 4.875% interest, including premium of $10,475, issued November 2014 and March 2015 and due December 2024 | 1,160,475 | 500,000 | ||||||
Total long-term debt (3) | $ | 4,184,463 | $ | 3,621,404 | ||||
-1 | Applicable interest rate was 4.5% at December 31, 2014. The carrying amount of the Credit Facility approximates fair value due to the short-term and variable nature of the borrowings. The fair value of the Partnership’s Credit Facility is considered a Level 2 measurement. | |||||||
-2 | The estimated aggregate fair value of the senior notes (collectively, the “Senior Notes”) was approximately $4,297 million and $3,563 million as of March 31, 2015 and December 31, 2014, respectively, based on recent actual prices for over the counter secondary market transactions. The fair value of the Partnership’s Senior Notes is considered a Level 2 measurement. | |||||||
-3 | Accrued interest payable was approximately $62.2 million for the three months ended March 31, 2015. | |||||||
Credit Facility | ||||||||
On March 20, 2014, the Partnership amended the Credit Facility to increase total borrowing capacity to $1.3 billion, extend the maturity by approximately 18 months to March 20, 2019, amend the pricing terms, expand the existing accordion option from $250 million to $500 million and provide the Partnership with the right to release the collateral securing the Credit Facility. The right to release collateral will occur once the Partnership’s long-term, senior unsecured debt (“Index Debt”) has received an investment grade rating from Standard & Poor’s equal to or more favorable than BBB- (stable) and from Moody’s equal to or more favorable than Baa3 (stable) and the Partnership’s Total Leverage Ratio (as defined in the Credit Facility) is not greater than 5.00 to 1.00 (“Collateral Release Date”). The Partnership incurred approximately $1.9 million of deferred financing costs associated with modifications of the Credit Facility during the three months ended March 31, 2014. | ||||||||
The borrowings under the Credit Facility bear interest at a variable interest rate, plus a margin. The variable interest rate is based either on the London interbank market rate (“LIBO Rate Loans”) or the higher of (a) the prime rate set by the Credit Facility’s administrative agent, (b) the Federal Funds Rate plus 0.50% and (c) the rate for LIBO Rate Loans for a one month interest period plus 1% (“Alternate Base Rate Loans”). Prior to the Collateral Release Date, the margin is determined by the Partnership’s Total Leverage Ratio, ranging from 0.5% to 1.5% for Alternate Base Rate Loans and from 1.5% to 2.5% for LIBO Rate Loans. After the Collateral Release Date, the margin is determined by the credit rating for the Partnership’s Index Debt issued by Moody’s and Standard & Poor’s, ranging from 0.125% to 1% for Alternate Base Rate Loans and from 1.125% to 2% for LIBO Rate Loans. The Partnership may utilize up to $150.0 million of the Credit Facility for the issuance of letters of credit and $10.0 million for shorter-term swingline loans. | ||||||||
Under the provisions of the Credit Facility and indentures, the Partnership is subject to a number of restrictions and covenants. The Credit Facility and indentures place limits on the ability of the Partnership and its restricted subsidiaries to incur additional indebtedness; declare or pay dividends or distributions or redeem, repurchase or retire equity interests or subordinated indebtedness; make investments; incur liens; create any consensual limitation on the ability of the Partnership’s restricted subsidiaries to pay dividends or distributions, make loans or transfer property to the Partnership; engage in transactions with the Partnership’s affiliates; sell assets, including equity interests of the Partnership’s subsidiaries; make any payment on or with respect to or purchase, redeem, defease or otherwise acquire or retire for value any subordinated obligation or guarantor subordination obligation (except principal and interest at maturity); and consolidate, merge or transfer assets. The Credit Facility also limits the Partnership’s ability to enter into transactions with parties that require margin calls under certain derivative instruments. Under the Credit Facility, neither the Partnership nor the bank can require margin calls for outstanding derivative positions. | ||||||||
Significant financial covenants under the Credit Facility include the Interest Coverage Ratio (as defined in the Credit Facility), which must be greater than 2.5 to 1.0 and the Total Leverage Ratio (as defined in the Credit Facility), which must be less than 5.5 to 1.0 prior to January 1, 2015, and thereafter until the Collateral Release Date the maximum permissible Total Leverage Ratio will be 5.25 to 1.0. In February 2015, we entered into an amendment which permanently increases our maximum permissible leverage ratio to 5.5 to 1.0. The Total Leverage Ratio at any fiscal quarter-end on or after the Collateral Release Date shall not be greater than 5.00 to 1.00. | ||||||||
As of March 31, 2015, the Partnership was in compliance with these financial covenants. These covenants are used to calculate the available borrowing capacity on a quarterly basis. The Credit Facility is guaranteed by and collateralized by substantially all assets of the Partnership’s wholly-owned subsidiaries, other than MarkWest Liberty Midstream and its subsidiaries. As of March 31, 2015, the Partnership had no borrowings outstanding and approximately $11.3 million of letters of credit outstanding under the Credit Facility, leaving approximately $1,288.7 million of unused capacity of which approximately $1,040.2 million was available for borrowing based on financial covenant requirements. Additionally, the full amount of unused capacity is available for borrowing on a short-term basis to provide financial flexibility within a given fiscal quarter. | ||||||||
Senior Notes | ||||||||
In March 2015, the Partnership completed a public offering for $650 million in additional aggregate principal amount of 4.875% unsecured notes due December 2024 (“new notes”), which are additional notes under an indenture pursuant to which the Partnership issued $500 million aggregate principal amount of 4.875% Senior Notes due 2024 on November 21, 2014 (“existing notes”). The new notes and the existing notes are treated as a single class of securities under the indenture (“2024 Senior Notes”). The 2024 Senior Notes mature December 1, 2024. Interest on the new notes will accrue from November 21, 2014, and the Partnership will pay interest on the notes twice a year, beginning on June 1, 2015. The Partnership received aggregate net proceeds of approximately $653.6 million from the new notes offerings, after deducting underwriting fees and third-party expenses and excluding approximately $9.0 million for accrued interest. | ||||||||
Equity
Equity | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Equity | |||||||||||||||||
Equity | |||||||||||||||||
10. Equity | |||||||||||||||||
Equity Offerings | |||||||||||||||||
Our public equity offerings are summarized in the table below for the three months ended March 31, 2015 and 2014 (in millions): | |||||||||||||||||
Three months ended | Three months ended | ||||||||||||||||
March 31, 2015 | March 31, 2014 | ||||||||||||||||
Common | Net | Common | Net | ||||||||||||||
units | Proceeds | units | Proceeds | ||||||||||||||
September 2013ATM (1) | — | $ | — | 4.2 | $ | 272 | |||||||||||
November 2014 ATM (2) | — | — | — | — | |||||||||||||
Total | — | $ | — | 4.2 | $ | 272 | |||||||||||
-1 | In September, 2013, the Partnership entered into an Equity Distribution Agreement with a financial institution (the “2013 Manager”) that established an At the Market offering program (the “September 2013 ATM”) pursuant to which the Partnership could have sold from time to time through the 2013 Manager, as its sales agent, common units having an aggregate offering price of up to $1 billion. During the three months ended March 31, 2014, the Partnership incurred approximately $4 million in manager fees and other third-party expenses. The proceeds from sales were used to fund capital expenditures and for general Partnership purposes. The Partnership completed the September 2013 ATM on March 31, 2014. | ||||||||||||||||
-2 | In November, 2014, the Partnership entered into an Equity Distribution Agreement with financial institutions (the “November 2014 Managers”) that established an At the Market offering program (the “November 2014 ATM”) pursuant to which the Partnership may sell from time to time through the November 2014 Managers, as its sales agents, common units having an aggregate offering price of up to $1.5 billion. As of March 31, 2015, the Partnership has issued 2.5 million units receiving net proceeds of approximately $175 million under the November 2014 ATM. | ||||||||||||||||
All of the Partnership’s Class B units were issued to and are held by M&R MWE Liberty, LLC, an affiliate of EMG, as part of the Partnership’s December 31, 2011 acquisition of the non-controlling interest in MarkWest Liberty Midstream. The remaining Class B units will convert to common units on a one-for-one basis in three equal installments beginning on July 1, 2015 and each of the next two anniversaries of such date. | |||||||||||||||||
Distributions of Available Cash and Range of Unit Prices | |||||||||||||||||
Common Unit Price | Distribution | ||||||||||||||||
Per | |||||||||||||||||
Common | |||||||||||||||||
Quarter Ended | High | Low | Unit | Declaration Date | Record Date | Payment Date | |||||||||||
March 31, 2015 | $ | 69.16 | $ | 54.04 | $ | 0.91 | April 22, 2015 | May 7, 2015 | May 15, 2015 | ||||||||
December 31, 2014 | $ | 77.31 | $ | 58.67 | $ | 0.90 | January 21, 2015 | February 5, 2015 | February 13, 2015 | ||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | |
11. Commitments and Contingencies | |
Legal | |
The Partnership is subject to a variety of risks and disputes and is a party to various legal proceedings in the normal course of its business. The Partnership maintains insurance policies in amounts and with coverage and deductibles that it believes are reasonable and prudent. However, the Partnership cannot assure that the insurance companies will promptly honor their policy obligations or that the coverage or levels of insurance will be adequate to protect the Partnership from all material expenses related to future claims for property loss or business interruption to the Partnership, or for third-party claims of personal injury and property damage, or that the coverage or levels of insurance it currently has will be available in the future at economical prices. While it is not possible to predict the outcome of the legal actions with certainty, management is of the opinion that appropriate provisions and accruals associated with all legal actions have been made in the accompanying Condensed Consolidated Financial Statements and that none of these actions, either individually or in the aggregate, will have a material adverse effect on the Partnership’s financial condition, liquidity or results of operations. | |
Contract Contingencies | |
Certain natural gas processing and gathering arrangements require the Partnership to construct new natural gas processing plants, natural gas gathering pipelines and NGL pipelines and contain certain fees and charges if specified construction milestones are not achieved for reasons other than force majeure. In certain cases, certain producers may have the right to cancel the processing arrangements if there are significant delays that are not due to force majeure. As of March 31, 2015, management does not believe there are any indications that the Partnership will not be able to meet the construction milestones, that force majeure does not apply, or that such fees and charges will otherwise be triggered. | |
Income_Taxes
Income Taxes | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Income Taxes | ||||||||||||||
Income Taxes | ||||||||||||||
12. Income Taxes | ||||||||||||||
A reconciliation of the provision for income tax and the amount computed by applying the federal statutory rate to income before provision for income tax for the three months ended March 31, 2015 and 2014 is as follows (in thousands): | ||||||||||||||
Three months ended March 31, 2015 | ||||||||||||||
Corporation | Partnership | Eliminations | Consolidated | |||||||||||
(Loss) income before provision for income tax | $ | (12,830 | ) | $ | 14,912 | $ | (682 | ) | $ | 1,400 | ||||
Federal statutory rate | 35 | % | 0 | % | 0 | % | ||||||||
Federal income tax at statutory rate | (4,491 | ) | — | — | (4,491 | ) | ||||||||
Permanent items | 9 | — | — | 9 | ||||||||||
State income taxes net of federal benefit | (384 | ) | 165 | — | (219 | ) | ||||||||
Provision on income from Class A units (1) | 580 | — | — | 580 | ||||||||||
Provision for income tax | $ | (4,286 | ) | $ | 165 | $ | — | $ | (4,121 | ) | ||||
Three months ended March 31, 2014 | ||||||||||||||
Corporation | Partnership | Eliminations | Consolidated | |||||||||||
Income before provision for income tax | $ | 18,459 | $ | 15,106 | $ | (5,103 | ) | $ | 28,462 | |||||
Federal statutory rate | 35 | % | 0 | % | 0 | % | ||||||||
Federal income tax at statutory rate | 6,461 | — | — | 6,461 | ||||||||||
Permanent items | 21 | — | — | 21 | ||||||||||
State income taxes net of federal benefit | 463 | 156 | — | 619 | ||||||||||
Federal and state tax rate change | 4,250 | — | — | 4,250 | ||||||||||
Provision on income from Class A units (1) | 1,195 | — | — | 1,195 | ||||||||||
Provision for income tax | $ | 12,390 | $ | 156 | $ | — | $ | 12,546 | ||||||
-1 | The Corporation and the General Partner of the Partnership own Class A units of the Partnership that were received in the merger of the Corporation and the Partnership completed in February 2008. The Class A units share, on a pro-rata basis, in the income or loss of the Partnership, except for items attributable to the Partnership’s ownership of or sale of shares of the Corporation’s common stock. The provision for income tax on income from Class A units includes intra period allocations to continued operations and excludes allocations to equity. | |||||||||||||
Earnings_Per_Common_Unit
Earnings Per Common Unit | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Common Unit | ||||||||
Earnings Per Common Unit | ||||||||
13. Earnings Per Common Unit | ||||||||
The following table shows the computation of basic and diluted net income per common unit, and the weighted-average units used to compute basic and diluted net income per common unit for the three months ended March 31, 2015 and 2014 (in thousands, except per unit data): | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Net (loss) income attributable to the Partnership’s unitholders | $ | (9,083 | ) | $ | 12,492 | |||
Less: Income allocable to phantom units | 642 | 545 | ||||||
(Loss) income available for common unitholders - basic | (9,725 | ) | 11,947 | |||||
Add: Income allocable to phantom units and DER expense (1) | — | 568 | ||||||
(Loss) income available for common unitholders - diluted | $ | (9,725 | ) | $ | 12,515 | |||
Weighted average common units outstanding - basic | 186,685 | 158,808 | ||||||
Potential common shares (Class B and phantom units) (1) | — | 16,680 | ||||||
Weighted average common units outstanding - diluted | 186,685 | 175,488 | ||||||
Net (loss) income attributable to the Partnership’s common unitholders per common unit (2) | ||||||||
Basic | $ | (0.05 | ) | $ | 0.08 | |||
Diluted | $ | (0.05 | ) | $ | 0.07 | |||
-1 | For the three months ended March 31, 2015, approximately $674,000 of income allocable to phantom units and DER expense and 12,735,000 potential common shares were excluded from the calculation because the impact was anti-dilutive. | |||||||
-2 | Earnings per Class B units equals zero as Class B unitholders are not entitled to receive distributions and therefore no income is allocable to Class B units under the two class method. | |||||||
Segment_Information
Segment Information | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Segment Information | ||||||||||||||||||||
Segment Information | ||||||||||||||||||||
14. Segment Information | ||||||||||||||||||||
The Partnership prepares segment information in accordance with GAAP. However, certain items below Income from operations in the accompanying Condensed Consolidated Statements of Operations, certain compensation expense, certain other non-cash items and any gains (losses) from derivative instruments are not allocated to individual segments. Management does not consider these items allocable to or controllable by any individual segment and therefore excludes these items when evaluating segment performance. Segment results are also adjusted to exclude the portion of operating income attributable to the non-controlling interests. As disclosed in Note 3 of these Notes to the Condensed Consolidated Financial Statements, Ohio Gathering was deconsolidated effective June 1, 2014 and its financial position as of March 31, 2015 and results of operations are reported under the equity method of accounting as of March 31, 2015. However, the Partnership’s Chief Executive Officer and “chief operating decision maker” continues to view the Utica Segment inclusive of Ohio Gathering, and review its financial information as if it were still consolidated. In addition, the Partnership’s Chief Executive Officer and “chief operating decision maker” views all Partnership operated, non-wholly owned subsidiaries as if they are consolidated, as these subsidiaries are operated by the Partnership. | ||||||||||||||||||||
The tables below present the Partnership’s segment profit measure, Operating income before items not allocated to segments for the three months ended March 31, 2015 and 2014 for the reported segments (in thousands): | ||||||||||||||||||||
Three months ended March 31, 2015: | ||||||||||||||||||||
Marcellus | Utica (1) | Northeast | Southwest | Elimination (2) | Total | |||||||||||||||
Segment revenue | $ | 197,176 | $ | 58,911 | $ | 30,021 | $ | 196,267 | $ | (44 | ) | $ | 482,331 | |||||||
Segment purchased product costs | 6,502 | 181 | 12,518 | 104,283 | — | 123,484 | ||||||||||||||
Net operating margin | 190,674 | 58,730 | 17,503 | 91,984 | (44 | ) | 358,847 | |||||||||||||
Segment facility expenses | 43,382 | 16,638 | 6,878 | 33,917 | (44 | ) | 100,771 | |||||||||||||
Segment portion of operating income attributable to non-controlling interests | — | 20,107 | — | 1,547 | — | 21,654 | ||||||||||||||
Operating income before items not allocated to segments | $ | 147,292 | $ | 21,985 | $ | 10,625 | $ | 56,520 | $ | — | $ | 236,422 | ||||||||
Capital expenditures | $ | 314,559 | $ | 179,218 | $ | 1,205 | $ | 40,585 | $ | — | $ | 535,567 | ||||||||
Capital expenditures for Partnership operated, non-wholly owned subsidiaries(1) | (100,878 | ) | ||||||||||||||||||
Capital expenditures not allocated to segments | 3,582 | |||||||||||||||||||
Total capital expenditures | $ | 438,271 | ||||||||||||||||||
Three months ended March 31, 2014: | ||||||||||||||||||||
Marcellus | Utica | Northeast | Southwest | Elimination (2) | Total | |||||||||||||||
Segment revenue | $ | 175,159 | $ | 23,766 | $ | 61,253 | $ | 259,329 | (1,571 | ) | $ | 517,936 | ||||||||
Segment purchased product costs | 34,290 | 4,135 | 20,455 | 152,684 | — | 211,564 | ||||||||||||||
Net operating margin | 140,869 | 19,631 | 40,798 | 106,645 | (1,571 | ) | 306,372 | |||||||||||||
Segment facility expenses | 35,473 | 11,852 | 7,114 | 32,521 | (1,571 | ) | 85,389 | |||||||||||||
Segment portion of operating income (loss) attributable to non-controlling interests | — | 3,136 | — | (1 | ) | — | 3,135 | |||||||||||||
Operating income (loss) before items not allocated to segments | $ | 105,396 | $ | 4,643 | $ | 33,684 | $ | 74,125 | — | $ | 217,848 | |||||||||
Capital expenditures | $ | 360,598 | $ | 181,332 | $ | 463 | $ | 40,132 | — | $ | 582,525 | |||||||||
Capital expenditures not allocated to segments | 4,595 | |||||||||||||||||||
Total capital expenditures | $ | 587,120 | ||||||||||||||||||
-1 | The Utica segment includes $97.9 million of capital expenditures related to Partnership operated, non-wholly owned subsidiaries capital expenditures. The Southwest segment includes $3.0 million related to Partnership operated, non-wholly owned subsidiaries. | |||||||||||||||||||
-2 | Amounts represent revenues and expenses associated with the Northeast segment fractionation completed on behalf of the Marcellus segment. | |||||||||||||||||||
The following is a reconciliation of segment revenue to total revenue and operating income before items not allocated to segments to income before provision for income tax for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||||||||||||||
Three months ended March 31, | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||
Total segment revenue | $ | 482,331 | $ | 517,936 | ||||||||||||||||
Derivative gain (loss) not allocated to segments | 7,368 | (3,967 | ) | |||||||||||||||||
Revenue adjustment for unconsolidated affiliates (1) | (27,531 | ) | — | |||||||||||||||||
Revenue deferral adjustment and other (2) | 5,162 | (1,493 | ) | |||||||||||||||||
Total revenue | $ | 467,330 | $ | 512,476 | ||||||||||||||||
Operating income before items not allocated to segments | $ | 236,422 | $ | 217,848 | ||||||||||||||||
Portion of operating income attributable to non-controlling interests | 11,414 | 3,135 | ||||||||||||||||||
Derivative gain not allocated to segments | 2,828 | 4,099 | ||||||||||||||||||
Revenue adjustment for unconsolidated affiliates (1) | (27,531 | ) | — | |||||||||||||||||
Revenue deferral adjustment (2) | (922 | ) | (1,493 | ) | ||||||||||||||||
Compensation expense included in facility expenses not allocated to segments | (1,107 | ) | (1,004 | ) | ||||||||||||||||
Facility expense, operational service fees and purchased product cost adjustments for unconsolidated affiliates (3) | 13,458 | — | ||||||||||||||||||
Portion of operating loss attributable to non-controlling interests of an unconsolidated affiliates (4) | 10,240 | — | ||||||||||||||||||
Facility expense adjustments (5) | 2,688 | 2,688 | ||||||||||||||||||
Selling, general and administrative expenses | (34,635 | ) | (35,290 | ) | ||||||||||||||||
Depreciation | (119,592 | ) | (101,929 | ) | ||||||||||||||||
Amortization of intangible assets | (15,826 | ) | (15,978 | ) | ||||||||||||||||
Impairment expense | (25,523 | ) | — | |||||||||||||||||
Gain on disposal of property, plant and equipment | 811 | 93 | ||||||||||||||||||
Accretion of asset retirement obligations | (193 | ) | (168 | ) | ||||||||||||||||
Income from operations | 52,532 | 72,001 | ||||||||||||||||||
Earnings from unconsolidated affiliates | 512 | 250 | ||||||||||||||||||
Interest expense | (50,057 | ) | (40,984 | ) | ||||||||||||||||
Amortization of deferred financing costs and debt discount (a component of interest expense) | (1,635 | ) | (2,824 | ) | ||||||||||||||||
Miscellaneous income, net | 48 | 19 | ||||||||||||||||||
Income before provision for income tax | $ | 1,400 | $ | 28,462 | ||||||||||||||||
(1)Revenue adjustment for unconsolidated affiliates relates to revenue of Partnership operated, non-wholly owned subsidiaries (See note (1) above and Note 3). | ||||||||||||||||||||
(2)Revenue deferral amount relates primarily to certain contracts in which the cash consideration that the Partnership receives for providing service is greater during the initial years of the contract compared to the later years. In accordance with GAAP, the revenue is recognized evenly over the term of the contract as the Partnership will perform a similar level of service for the entire term. Therefore, the revenue recognized in the current reporting period is less than the cash received. However, the Partnership’s chief operating decision maker and management evaluate the segment performance based on the cash consideration received and therefore, the impact of the revenue deferrals is excluded for segment reporting purposes. In March 2015, the cash consideration received from the Southwest segment contract declined and the reported segment revenue was less than the revenue recognized for GAAP purposes. For the three months ended March 31, 2015, approximately $0.1 million of the revenue deferral adjustment is attributable to the Southwest segment. Beginning in the second quarter of 2015, the cash consideration received from the Northeast segment contract is expected to decline and the reported segment revenue will be less than the revenue recognized for GAAP purposes. For the three months ended March 31, 2015, approximately $0.8 million of the revenue deferral adjustment is attributable to the Northeast segment. In comparison, for the three months ended March 31, 2014, approximately $0.2 million and $1.9 million of the revenue deferral adjustment was attributable to the Southwest segment and Northeast segment, respectively. Other consists of Operational Service revenues from unconsolidated affiliates of $6.1 million for the three months ended March 31, 2015 compared to $0.6 million for three months ended March 31, 2014. | ||||||||||||||||||||
(3)Facility expense and purchased product cost adjustments for unconsolidated affiliate consist of the facility expenses and purchased product costs related to Partnership operated, non-wholly owned subsidiaries (See note (1) above and Note 3 of these Notes to the Condensed Consolidated Financial Statements). | ||||||||||||||||||||
(4)Portion of operating loss attributable to non-controlling interests of an unconsolidated affiliate amount relates to the Partnership’s joint venture partners’ proportionate share of operating income in Partnership operated, non-wholly owned subsidiaries, which is included in segment operating income calculation as if the Partnership operated, non-wholly owned subsidiaries are consolidated (See note (1) above and Note 3). | ||||||||||||||||||||
(5)Facility expenses adjustments consist of the reallocation of the interest expense related to the SMR, which is included in facility expenses for the purposes of evaluating the performance of the Southwest segment. | ||||||||||||||||||||
The table below presents information about segment assets as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||
Marcellus | $ | 5,924,190 | $ | 5,749,932 | ||||||||||||||||
Utica (1) | 2,278,054 | 2,163,025 | ||||||||||||||||||
Northeast | 436,303 | 445,911 | ||||||||||||||||||
Southwest (1) | 2,381,701 | 2,362,113 | ||||||||||||||||||
Total segment assets | 11,020,248 | 10,720,981 | ||||||||||||||||||
Assets not allocated to segments: | ||||||||||||||||||||
Certain cash and cash equivalents | 71,509 | — | ||||||||||||||||||
Fair value of derivatives | 29,455 | 37,428 | ||||||||||||||||||
Investment in unconsolidated affiliates | 50,000 | 108,849 | ||||||||||||||||||
Other (2) | 102,555 | 113,520 | ||||||||||||||||||
Total assets | $ | 11,273,767 | $ | 10,980,778 | ||||||||||||||||
-1 | The March 31, 2015 and December 31, 2014 amounts exclude assets related to the Partnership’s unconsolidated joint ventures. The amounts include the investments in unconsolidated affiliates. | |||||||||||||||||||
-2 | Includes corporate fixed assets, deferred financing costs, income tax receivable, receivables and other corporate assets not allocated to segments. | |||||||||||||||||||
Supplemental_Condensed_Consoli
Supplemental Condensed Consolidating Financial Information | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Supplemental Condensed Consolidating Financial Information | |||||||||||||||||
Supplemental Condensed Consolidating Financial Information | |||||||||||||||||
15. Supplemental Condensed Consolidating Financial Information | |||||||||||||||||
MarkWest Energy Partners L.P. has no significant operations independent of its subsidiaries. As of March 31, 2015, the Partnership’s obligations under the outstanding Senior Notes (See Note 9) were fully, jointly and severally guaranteed, by all of the subsidiaries that are owned 100% by the Partnership, other than MarkWest Liberty Midstream and its subsidiaries. The guarantees are unconditional except for certain customary circumstances in which a subsidiary would be released from the guarantee under the indentures (See Note 17 to the Consolidated Financial Statements included in Item 8 of the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2014 for discussion of these circumstances). Subsidiaries that are not 100% owned by the Partnership do not guarantee the Senior Notes. For the purpose of the following financial information, the Partnership’s investments in its subsidiaries and the guarantor subsidiaries’ investments in their subsidiaries are presented in accordance with the equity method of accounting. The co-issuer, MarkWest Energy Finance Corporation, has no independent assets or operations. Condensed consolidating financial information for the Partnership and its combined guarantor and combined non-guarantor subsidiaries as of March 31, 2015 and December 31, 2014 and for the three months ended March 31, 2015 and 2014 is as follows (in thousands): | |||||||||||||||||
Condensed Consolidating Balance Sheets | |||||||||||||||||
As of March 31, 2015 | |||||||||||||||||
Parent | Guarantor | Non- | Consolidating | Consolidated | |||||||||||||
Subsidiaries | Guarantor | Adjustments | |||||||||||||||
Subsidiaries | |||||||||||||||||
ASSETS | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | 61,000 | $ | 13,350 | $ | 161,934 | $ | — | $ | 236,284 | |||||||
Restricted cash | — | — | 10,000 | — | 10,000 | ||||||||||||
Receivables and other current assets | 1,563 | 191,268 | 133,776 | — | 326,607 | ||||||||||||
Receivables from unconsolidated affiliates, net | — | 2,859 | 2,810 | — | 5,669 | ||||||||||||
Intercompany receivables | 868,412 | 25,324 | 85,970 | (979,706 | ) | — | |||||||||||
Fair value of derivative instruments | — | 16,351 | 2,813 | — | 19,164 | ||||||||||||
Total current assets | 930,975 | 249,152 | 397,303 | (979,706 | ) | 597,724 | |||||||||||
Total property, plant and equipment, net | 10,346 | 2,136,418 | 6,784,889 | (42,716 | ) | 8,888,937 | |||||||||||
Other long-term assets: | |||||||||||||||||
Investment in unconsolidated affiliates | — | 85,791 | 763,051 | (10,076 | ) | 838,766 | |||||||||||
Investment in consolidated affiliates | 8,040,510 | 6,837,186 | — | (14,877,696 | ) | — | |||||||||||
Intangibles, net of accumulated amortization | — | 517,991 | 258,541 | — | 776,532 | ||||||||||||
Fair value of derivative instruments | — | 10,291 | — | — | 10,291 | ||||||||||||
Intercompany notes receivable | 213,100 | — | — | (213,100 | ) | — | |||||||||||
Other long-term assets | 58,167 | 26,651 | 76,699 | — | 161,517 | ||||||||||||
Total assets | $ | 9,253,098 | $ | 9,863,480 | $ | 8,280,483 | $ | (16,123,294 | ) | $ | 11,273,767 | ||||||
LIABILITIES AND EQUITY | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Intercompany payables | $ | 111 | $ | 948,971 | $ | 30,624 | $ | (979,706 | ) | $ | — | ||||||
Fair value of derivative instruments | — | 165 | 22 | — | 187 | ||||||||||||
Payables to unconsolidated affiliates | — | 39 | 11,256 | — | 11,295 | ||||||||||||
Other current liabilities | 67,170 | 164,654 | 278,659 | (2,472 | ) | 508,011 | |||||||||||
Total current liabilities | 67,281 | 1,113,829 | 320,561 | (982,178 | ) | 519,493 | |||||||||||
Deferred income taxes | 6,328 | 347,023 | — | — | 353,351 | ||||||||||||
Long-term intercompany financing payable | — | 213,100 | 94,415 | (307,515 | ) | — | |||||||||||
Long-term debt, net of discounts | 4,184,463 | — | — | — | 4,184,463 | ||||||||||||
Other long-term liabilities | 8,633 | 149,018 | 7,981 | — | 165,632 | ||||||||||||
Equity: | |||||||||||||||||
Common Units | 4,534,874 | 8,040,510 | 7,857,526 | (15,848,635 | ) | 4,584,275 | |||||||||||
Class B Units | 451,519 | — | — | — | 451,519 | ||||||||||||
Non-controlling interest in consolidated subsidiaries | — | — | — | 1,015,034 | 1,015,034 | ||||||||||||
Total equity | 4,986,393 | 8,040,510 | 7,857,526 | (14,833,601 | ) | 6,050,828 | |||||||||||
Total liabilities and equity | $ | 9,253,098 | $ | 9,863,480 | $ | 8,280,483 | $ | (16,123,294 | ) | $ | 11,273,767 | ||||||
As of December 31, 2014 | |||||||||||||||||
Parent | Guarantor | Non- | Consolidating | Consolidated | |||||||||||||
Subsidiaries | Guarantor | Adjustments | |||||||||||||||
Subsidiaries | |||||||||||||||||
ASSETS | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | — | $ | — | $ | 108,887 | $ | — | $ | 108,887 | |||||||
Restricted cash | — | — | 20,000 | — | 20,000 | ||||||||||||
Receivables and other current assets | 1,219 | 225,695 | 153,834 | — | 380,748 | ||||||||||||
Receivables from unconsolidated affiliates, net | 247 | 3,001 | 3,849 | — | 7,097 | ||||||||||||
Intercompany receivables | 633,994 | 24,683 | 178,109 | (836,786 | ) | — | |||||||||||
Fair value of derivative instruments | — | 17,386 | 3,535 | — | 20,921 | ||||||||||||
Total current assets | 635,460 | 270,765 | 468,214 | (836,786 | ) | 537,653 | |||||||||||
Total property, plant and equipment, net | 9,992 | 2,140,565 | 6,550,040 | (47,697 | ) | 8,652,900 | |||||||||||
Other long-term assets: | |||||||||||||||||
Investment in unconsolidated affiliates | — | 82,616 | 733,226 | (10,209 | ) | 805,633 | |||||||||||
Investment in consolidated affiliates | 7,990,532 | 6,500,008 | — | (14,490,540 | ) | — | |||||||||||
Intangibles, net of accumulated amortization | — | 546,637 | 262,640 | — | 809,277 | ||||||||||||
Fair value of derivative instruments | — | 16,507 | — | — | 16,507 | ||||||||||||
Intercompany notes receivable | 186,100 | — | — | (186,100 | ) | — | |||||||||||
Other long-term assets | 52,825 | 29,412 | 76,571 | — | 158,808 | ||||||||||||
Total assets | $ | 8,874,909 | $ | 9,586,510 | $ | 8,090,691 | $ | (15,571,332 | ) | $ | 10,980,778 | ||||||
LIABILITIES AND EQUITY | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Intercompany payables | $ | 3,287 | $ | 729,714 | $ | 103,787 | $ | (836,788 | ) | $ | — | ||||||
Payables to unconsolidated affiliates | — | — | 8,621 | — | 8,621 | ||||||||||||
Other current liabilities | 69,552 | 177,269 | 386,821 | (2,400 | ) | 631,242 | |||||||||||
Total current liabilities | 72,839 | 906,983 | 499,229 | (839,188 | ) | 639,863 | |||||||||||
Deferred income taxes | 6,162 | 351,098 | — | — | 357,260 | ||||||||||||
Long-term intercompany financing payable | — | 186,100 | 95,061 | (281,161 | ) | — | |||||||||||
Long-term debt, net of discounts | 3,621,404 | — | — | — | 3,621,404 | ||||||||||||
Other long-term liabilities | 8,794 | 151,797 | 8,421 | — | 169,012 | ||||||||||||
Equity: | |||||||||||||||||
Common Units | 4,714,191 | 7,990,532 | 7,487,980 | (15,434,460 | ) | 4,758,243 | |||||||||||
Class B Units | 451,519 | — | — | — | 451,519 | ||||||||||||
Non-controlling interest in consolidated subsidiaries | — | — | — | 983,477 | 983,477 | ||||||||||||
Total equity | 5,165,710 | 7,990,532 | 7,487,980 | (14,450,983 | ) | 6,193,239 | |||||||||||
Total liabilities and equity | $ | 8,874,909 | $ | 9,586,510 | $ | 8,090,691 | $ | (15,571,332 | ) | $ | 10,980,778 | ||||||
Condensed Consolidating Statements of Operations | |||||||||||||||||
Three months ended March 31, 2015 | |||||||||||||||||
Parent | Guarantor | Non- | Consolidating | Consolidated | |||||||||||||
Subsidiaries | Guarantor | Adjustments | |||||||||||||||
Subsidiaries | |||||||||||||||||
Total revenue | $ | — | $ | 241,325 | $ | 231,927 | $ | (5,922 | ) | $ | 467,330 | ||||||
Operating expenses: | |||||||||||||||||
Purchased product costs | — | 121,331 | 6,693 | — | 128,024 | ||||||||||||
Facility expenses | — | 38,000 | 50,885 | 2,931 | 91,816 | ||||||||||||
Selling, general and administrative expenses | 13,532 | 15,784 | 9,745 | (4,426 | ) | 34,635 | |||||||||||
Depreciation and amortization | 324 | 50,944 | 85,222 | (1,072 | ) | 135,418 | |||||||||||
Other operating expenses (income) | — | 629 | (1,247 | ) | — | (618 | ) | ||||||||||
Impairment expense | — | 25,523 | — | — | 25,523 | ||||||||||||
Total operating expenses | 13,856 | 252,211 | 151,298 | (2,567 | ) | 414,798 | |||||||||||
(Loss) income from operations | (13,856 | ) | (10,886 | ) | 80,629 | (3,355 | ) | 52,532 | |||||||||
Earnings from consolidated affiliates | 50,268 | 62,468 | — | (112,736 | ) | — | |||||||||||
Other expense, net | (50,311 | ) | (5,599 | ) | (3,557 | ) | 8,335 | (51,132 | ) | ||||||||
(Loss) income before provision for income tax | (13,899 | ) | 45,983 | 77,072 | (107,756 | ) | 1,400 | ||||||||||
Provision for income tax expense (benefit) | 165 | (4,286 | ) | — | — | (4,121 | ) | ||||||||||
Net income | (14,064 | ) | 50,269 | 77,072 | (107,756 | ) | 5,521 | ||||||||||
Net income attributable to non-controlling interest | — | — | — | (14,604 | ) | (14,604 | ) | ||||||||||
Net (loss) income attributable to the Partnership’s unitholders | $ | (14,064 | ) | $ | 50,269 | $ | 77,072 | $ | (122,360 | ) | $ | (9,083 | ) | ||||
Three months ended March 31, 2014 | |||||||||||||||||
Parent | Guarantor | Non- | Consolidating | Consolidated | |||||||||||||
Subsidiaries | Guarantor | Adjustments | |||||||||||||||
Subsidiaries | |||||||||||||||||
Total revenue | $ | — | $ | 325,501 | $ | 199,118 | $ | (12,143 | ) | $ | 512,476 | ||||||
Operating expenses: | |||||||||||||||||
Purchased product costs | — | 165,183 | 38,583 | — | 203,766 | ||||||||||||
Facility expenses | — | 37,033 | 48,371 | (1,967 | ) | 83,437 | |||||||||||
Selling, general and administrative expenses | 13,655 | 10,516 | 13,349 | (2,230 | ) | 35,290 | |||||||||||
Depreciation and amortization | 280 | 49,120 | 69,813 | (1,306 | ) | 117,907 | |||||||||||
Other operating (income) expenses | — | (159 | ) | 234 | — | 75 | |||||||||||
Total operating expenses | 13,935 | 261,693 | 170,350 | (5,503 | ) | 440,475 | |||||||||||
(Loss) income from operations | (13,935 | ) | 63,808 | 28,768 | (6,640 | ) | 72,001 | ||||||||||
Earnings from consolidated affiliates | 67,710 | 22,389 | — | (90,099 | ) | — | |||||||||||
Other expense, net | (43,162 | ) | (6,098 | ) | (2,956 | ) | 8,677 | (43,539 | ) | ||||||||
Income before provision for income tax | 10,613 | 80,099 | 25,812 | (88,062 | ) | 28,462 | |||||||||||
Provision for income tax expense | 157 | 12,389 | — | — | 12,546 | ||||||||||||
Net income | 10,456 | 67,710 | 25,812 | (88,062 | ) | 15,916 | |||||||||||
Net income attributable to non-controlling interest | — | — | — | (3,424 | ) | (3,424 | ) | ||||||||||
Net income attributable to the Partnership’s unitholders | $ | 10,456 | $ | 67,710 | $ | 25,812 | $ | (91,486 | ) | $ | 12,492 | ||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||
Three months ended March 31, 2015 | |||||||||||||||||
Parent | Guarantor | Non- | Consolidating | Consolidated | |||||||||||||
Subsidiaries | Guarantor | Adjustments | |||||||||||||||
Subsidiaries | |||||||||||||||||
Net cash (used in) provided by operating activities | $ | (61,211 | ) | $ | 59,387 | $ | 198,899 | $ | 3,859 | 200,934 | |||||||
Cash flows from investing activities: | |||||||||||||||||
Restricted cash | — | — | 10,000 | — | 10,000 | ||||||||||||
Capital expenditures | (695 | ) | (40,384 | ) | (393,117 | ) | (4,075 | ) | (438,271 | ) | |||||||
Equity investments in consolidated affiliates | (17,640 | ) | (408,037 | ) | — | 425,677 | — | ||||||||||
Intercompany advances, net | (235,245 | ) | — | (12,320 | ) | 247,565 | — | ||||||||||
Investment in unconsolidated affiliates | — | (6,632 | ) | (40,794 | ) | — | (47,426 | ) | |||||||||
Distributions from consolidated affiliates | 21,663 | 138,750 | — | (160,413 | ) | — | |||||||||||
Investment in intercompany notes receivable, net | (27,000 | ) | — | — | 27,000 | — | |||||||||||
Proceeds from disposal of property, plant and equipment | — | 19 | 838 | — | 857 | ||||||||||||
Net cash flows used in investing activities | (258,917 | ) | (316,284 | ) | (435,393 | ) | 535,754 | (474,840 | ) | ||||||||
Cash flows from financing activities: | |||||||||||||||||
Proceeds from Credit Facility | 601,900 | — | — | — | 601,900 | ||||||||||||
Payments Credit Facility | (699,500 | ) | — | — | — | (699,500 | ) | ||||||||||
Proceeds from long-term debt | 660,563 | — | — | — | 660,563 | ||||||||||||
Payments for debt issue costs and deferred financing costs | (7,000 | ) | — | — | — | (7,000 | ) | ||||||||||
Payments related to intercompany financing, net | — | 27,000 | (573 | ) | (26,427 | ) | — | ||||||||||
Proceeds from sale of equity interest in consolidated subsidiary | — | — | 10,823 | — | 10,823 | ||||||||||||
Contributions from non-controlling interest | — | — | 19,571 | — | 19,571 | ||||||||||||
Contributions from parent and affiliates | — | 17,640 | 408,037 | (425,677 | ) | — | |||||||||||
Payments of SMR liability | — | (652 | ) | — | — | (652 | ) | ||||||||||
Share-based payment activity | (6,117 | ) | — | — | — | (6,117 | ) | ||||||||||
Payment of distributions | (168,718 | ) | (21,663 | ) | (148,317 | ) | 160,413 | (178,285 | ) | ||||||||
Intercompany advances, net | — | 247,922 | — | (247,922 | ) | — | |||||||||||
Net cash flows provided by financing activities | 381,128 | 270,247 | 289,541 | (539,613 | ) | 401,303 | |||||||||||
Net increase in cash | 61,000 | 13,350 | 53,047 | — | 127,397 | ||||||||||||
Cash and cash equivalents at beginning of period | — | — | 108,887 | — | 108,887 | ||||||||||||
Cash and cash equivalents at end of period | $ | 61,000 | $ | 13,350 | $ | 161,934 | $ | — | $ | 236,284 | |||||||
Three months ended March 31, 2014 | |||||||||||||||||
Parent | Guarantor | Non- | Consolidating | Consolidated | |||||||||||||
Subsidiaries | Guarantor | Adjustments | |||||||||||||||
Subsidiaries | |||||||||||||||||
Net cash (used in) provided by operating activities | $ | (56,688 | ) | $ | 103,777 | $ | 64,456 | $ | 828 | $ | 112,373 | ||||||
Cash flows from investing activities: | |||||||||||||||||
Capital expenditures | (3,512 | ) | (51,417 | ) | (530,853 | ) | (1,338 | ) | (587,120 | ) | |||||||
Equity investments in consolidated affiliates | (14,243 | ) | (522,200 | ) | — | 536,443 | — | ||||||||||
Intercompany advances, net | (445,203 | ) | — | — | 445,203 | — | |||||||||||
Investment in unconsolidated affiliates | — | (7,498 | ) | — | — | (7,498 | ) | ||||||||||
Distributions from consolidated affiliates | 35,861 | 73,610 | — | (109,471 | ) | — | |||||||||||
Investment in intercompany notes, net | (18,400 | ) | — | — | 18,400 | — | |||||||||||
Proceeds from disposal of property, plant and equipment | — | 2,043 | 17,101 | — | 19,144 | ||||||||||||
Net cash flows used in investing activities | (445,497 | ) | (505,462 | ) | (513,752 | ) | 889,237 | (575,474 | ) | ||||||||
Cash flows from financing activities: | |||||||||||||||||
Proceeds from public equity offerings, net | 271,880 | — | — | — | 271,880 | ||||||||||||
Proceeds from Credit Facility | 377,300 | — | — | — | 377,300 | ||||||||||||
Payments related to intercompany financing, net | — | 18,400 | (510 | ) | (17,890 | ) | — | ||||||||||
Payments for debt issuance costs, deferred financing costs and registration costs | (1,890 | ) | — | — | — | (1,890 | ) | ||||||||||
Contributions from parent and affiliates | — | 14,243 | 522,200 | (536,443 | ) | — | |||||||||||
Share-based payment activity | (8,924 | ) | — | — | — | (8,924 | ) | ||||||||||
Payments of distributions | (136,405 | ) | (35,861 | ) | (73,700 | ) | 109,471 | (136,495 | ) | ||||||||
Payments of SMR liability | — | (594 | ) | — | — | (594 | ) | ||||||||||
Intercompany advances, net | — | 445,203 | — | (445,203 | ) | — | |||||||||||
Net cash flows provided by financing activities | 501,961 | 441,391 | 447,990 | (890,065 | ) | 501,277 | |||||||||||
Net (decrease) increase in cash and cash equivalents | (224 | ) | 39,706 | (1,306 | ) | — | 38,176 | ||||||||||
Cash and cash equivalents at beginning of period | 224 | 79,363 | 5,718 | — | 85,305 | ||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | 119,069 | $ | 4,412 | $ | — | $ | 123,481 | |||||||
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Supplemental Cash Flow Information | ||||||||
Supplemental Cash Flow Information | ||||||||
16. Supplemental Cash Flow Information | ||||||||
The following table provides information regarding supplemental cash flow information (in thousands): | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for interest, net of amounts capitalized | $ | 43,262 | $ | 51,622 | ||||
Cash received for income taxes, net | (149 | ) | (183 | ) | ||||
Supplemental schedule of non-cash investing and financing activities: | ||||||||
Amounts payable for property, plant and equipment (1) | $ | 276,046 | $ | 553,370 | ||||
Interest capitalized on construction in progress | 5,556 | 5,936 | ||||||
Issuance of common units for vesting of share-based payment awards | 12,044 | 7,720 | ||||||
-1 | The March 31, 2015 total amounts payable for property, plant and equipment includes approximately $157.1 million recorded in accrued liabilities in the accompanying Condensed Consolidated Balance Sheets. | |||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Derivative Financial Instruments | |||||||||||||||||||||
Schedule of notional amounts of derivative contracts | |||||||||||||||||||||
Derivative contracts not designated as hedging instruments | Financial | Notional Quantity | |||||||||||||||||||
Position | (net) | ||||||||||||||||||||
Crude Oil (Bbl) | Short | 275,000 | |||||||||||||||||||
Natural Gas (MMBtu) | Long | 486,358 | |||||||||||||||||||
NGLs (Gal) | Short | 126,056,336 | |||||||||||||||||||
Reconciliation of liability recorded for embedded derivative | See the following table for a reconciliation of the liability recorded for the embedded derivative as of March 31, 2015 (in thousands): | ||||||||||||||||||||
Fair value of commodity contract | $ | (39,213 | ) | ||||||||||||||||||
Inception value for period from April 1, 2015 to December 31, 2022 | (53,507 | ) | |||||||||||||||||||
Derivative asset as of March 31, 2015 | $ | 14,294 | |||||||||||||||||||
Schedule of the impact of derivative instruments on the balance sheet and statement of operations | The impact of the Partnership’s derivative instruments on its Condensed Consolidated Balance Sheets is summarized below (in thousands): | ||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||
Derivative instruments not designated as hedging | Fair Value at | Fair Value at | Fair Value at | Fair Value at | |||||||||||||||||
instruments and their balance sheet location | March 31, | December 31, | March 31, | December 31, | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Commodity contracts(1) | |||||||||||||||||||||
Fair value of derivative contracts — current | $ | 19,164 | $ | 20,921 | $ | (187 | ) | $ | — | ||||||||||||
Fair value of derivative contracts — long-term | 10,291 | 16,507 | — | — | |||||||||||||||||
Total | $ | 29,455 | $ | 37,428 | $ | (187 | ) | $ | — | ||||||||||||
-1 | Includes Embedded Derivatives in Commodity Contracts as discussed above. | ||||||||||||||||||||
The impact of the Partnership’s derivative instruments on its Condensed Consolidated Statements of Operations is summarized below (in thousands): | |||||||||||||||||||||
Derivative contracts not designated as | Three months ended March 31, | ||||||||||||||||||||
hedging instruments and the location of | |||||||||||||||||||||
gain or (loss) recognized in income | 2015 | 2014 | |||||||||||||||||||
Revenue: Derivative gain (loss) | |||||||||||||||||||||
Realized gain (loss) | $ | 10,988 | $ | (7,607 | ) | ||||||||||||||||
Unrealized (loss) gain | (3,620 | ) | 3,640 | ||||||||||||||||||
Total revenue: derivative gain (loss) | 7,368 | (3,967 | ) | ||||||||||||||||||
Derivative (loss) gain related to purchased product costs | |||||||||||||||||||||
Realized loss | — | (114 | ) | ||||||||||||||||||
Unrealized (loss) gain | (4,540 | ) | 7,912 | ||||||||||||||||||
Total derivative (loss) gain related to purchased product costs | (4,540 | ) | 7,798 | ||||||||||||||||||
Derivative gain related to facility expenses | |||||||||||||||||||||
Unrealized gain | — | 268 | |||||||||||||||||||
Total gain | $ | 2,828 | $ | 4,099 | |||||||||||||||||
Schedule of impact on the balance sheet if Partnership had elected to net derivative positions subject to master netting arrangements | The table below summarizes the impact if the Partnership had elected to net its derivative positions that are subject to master netting arrangements (in thousands): | ||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||
As of March 31, 2015 | Gross | Gross | Net Amount | Gross | Gross | Net | |||||||||||||||
Amounts of | Amounts | Amounts of | Amounts | Amount | |||||||||||||||||
Assets in the | Not Offset in | Liabilities in | Not Offset in | ||||||||||||||||||
Consolidated | the | the | the | ||||||||||||||||||
Balance | Consolidated | Consolidated | Consolidated | ||||||||||||||||||
Sheet | Balance | Balance | Balance | ||||||||||||||||||
Sheet | Sheet | Sheet | |||||||||||||||||||
Current | |||||||||||||||||||||
Commodity contracts | $ | 15,161 | $ | (30 | ) | $ | 15,131 | $ | (187 | ) | $ | 30 | $ | (157 | ) | ||||||
Embedded derivatives in commodity contracts | 4,003 | — | 4,003 | — | — | — | |||||||||||||||
Total current derivative instruments | 19,164 | (30 | ) | 19,134 | (187 | ) | 30 | (157 | ) | ||||||||||||
Non-current | |||||||||||||||||||||
Embedded derivatives in commodity contracts | 10,291 | — | 10,291 | — | — | — | |||||||||||||||
Total non-current derivative instruments | 10,291 | — | 10,291 | — | — | — | |||||||||||||||
Total derivative instruments | $ | 29,455 | $ | (30 | ) | $ | 29,425 | $ | (187 | ) | $ | 30 | $ | (157 | ) | ||||||
Assets | Liabilities | ||||||||||||||||||||
As of December 31, 2014 | Gross | Gross | Net Amount | Gross | Gross | Net | |||||||||||||||
Amounts of | Amounts | Amounts of | Amounts | Amount | |||||||||||||||||
Assets in the | Not Offset in | Liabilities in | Not Offset in | ||||||||||||||||||
Consolidated | the | the | the | ||||||||||||||||||
Balance | Consolidated | Consolidated | Consolidated | ||||||||||||||||||
Sheet | Balance | Balance | Balance | ||||||||||||||||||
Sheet | Sheet | Sheet | |||||||||||||||||||
Current | |||||||||||||||||||||
Commodity contracts | $ | 18,652 | $ | — | $ | 18,652 | $ | — | $ | — | $ | — | |||||||||
Embedded derivatives in commodity contracts | 2,269 | — | 2,269 | — | — | — | |||||||||||||||
Total current derivative instruments | 20,921 | — | 20,921 | — | — | — | |||||||||||||||
Non-current | |||||||||||||||||||||
Embedded derivatives in commodity contracts | 16,507 | — | 16,507 | — | — | — | |||||||||||||||
Total non-current derivative instruments | 16,507 | — | 16,507 | — | — | — | |||||||||||||||
Total derivative instruments | $ | 37,428 | $ | — | $ | 37,428 | $ | — | $ | — | $ | — | |||||||||
Fair_Value_Tables
Fair Value (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Fair Value | |||||||||
Schedule of derivative instruments carried at fair value | The following table presents the derivative instruments carried at fair value as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||
As of March 31, 2015 | Assets | Liabilities | |||||||
Significant other observable inputs (Level 2) | |||||||||
Commodity contracts | $ | 9,942 | $ | (59 | ) | ||||
Significant unobservable inputs (Level 3) | |||||||||
Commodity contracts | 5,219 | (128 | ) | ||||||
Embedded derivatives in commodity contracts | 14,294 | — | |||||||
Total carrying value in Condensed Consolidated Balance Sheets | $ | 29,455 | $ | (187 | ) | ||||
As of December 31, 2014 | Assets | Liabilities | |||||||
Significant other observable inputs (Level 2) | |||||||||
Commodity contracts | $ | 14,812 | $ | — | |||||
Significant unobservable inputs (Level 3) | |||||||||
Commodity contracts | 3,840 | — | |||||||
Embedded derivatives in commodity contracts | 18,776 | — | |||||||
Total carrying value in Condensed Consolidated Balance Sheets | $ | 37,428 | $ | — | |||||
Schedule of information about significant unobservable inputs used in the valuation of Level 3 instruments | |||||||||
Level 3 Instrument | Balance | Unobservable Inputs | Value Range | Time Period | |||||
Sheet | |||||||||
Classification | |||||||||
Commodity contracts | Assets | Forward propane prices (per gallon) (1) | $0.52 - $0.57 | Apr. 2015 - Mar. 2016 | |||||
Forward isobutane prices (per gallon) (1) | $0.63 - $0.69 | Apr. 2015 - Mar. 2016 | |||||||
Forward normal butane prices (per gallon) (1) | $0.59 - $0.67 | Apr. 2015 - Mar. 2016 | |||||||
Forward natural gasoline prices (per gallon) (1) | $1.10 - $1.12 | May 2015 — Mar. 2016 | |||||||
Liabilities | Forward propane prices (per gallon) (1) | $0.52 - $0.54 | Apr. 2015 — Sep. 2015 | ||||||
Forward isobutane prices (per gallon) (1) | $0.63 - $0.65 | Apr. 2015 — Sep. 2015 | |||||||
Forward normal butane prices (per gallon) (1) | $0.59 - $0.67 | Apr. 2015 — Jan. 2016 | |||||||
Forward natural gasoline prices (per gallon) (1) | $1.11 - $1.17 | Apr. 2015 — Jun. 2015 | |||||||
Embedded derivative in commodity contract | Asset | Forward propane prices (per gallon) (1) | $0.52 - $0.60 | Apr. 2015 - Dec. 2022 | |||||
Forward isobutane prices (per gallon) (1) | $0.63 - $0.81 | Apr. 2015 - Dec. 2022 | |||||||
Forward normal butane prices (per gallon) (1) | $0.59 - $0.78 | Apr. 2015 - Dec. 2022 | |||||||
Forward natural gasoline prices (per gallon) (1) | $1.10 - $1.22 | Apr. 2015 - Dec. 2022 | |||||||
Forward natural gas prices (per MMBtu) (2) | $2.46 - $3.76 | Apr. 2015 - Dec. 2022 | |||||||
Probability of renewal (3) | 0% | ||||||||
-1 | NGL prices used in the valuations are generally at the lower end of the range in the early years and increase over time. | ||||||||
-2 | Natural gas prices used in the valuations are generally at the lower end of the range in the early years and increase over time. | ||||||||
-3 | The producer counterparty to the embedded derivative has the option to renew the gas purchase agreement and the related keep-whole processing agreement for two successive five-year terms after 2022. The embedded gas purchase agreement cannot be renewed without the renewal of the related keep-whole processing agreement. Due to the significant number of years until the renewal options are exercisable and the high level of uncertainty regarding the counterparty’s future business strategy, the future commodity price environment and the future competitive environment for midstream services in the Appalachia area, management determined that a 0% probability of renewal is an appropriate assumption. | ||||||||
Schedule of changes in Level 3 fair value measurements | |||||||||
The tables below include a roll forward of the balance sheet amounts for the three months ended March 31, 2015 and 2014 (including the change in fair value) for assets and liabilities classified by the Partnership within Level 3 of the valuation hierarchy (in thousands): | |||||||||
Three months ended March 31, 2015 | |||||||||
Commodity Derivative | Embedded Derivatives | ||||||||
Contracts (net) | in Commodity | ||||||||
Contracts (net) | |||||||||
Fair value at beginning of period | $ | 3,840 | $ | 18,776 | |||||
Total loss (realized and unrealized) included in earnings (1) | 5,028 | (5,782 | ) | ||||||
Settlements | (3,777 | ) | 1,300 | ||||||
Fair value at end of period | $ | 5,091 | $ | 14,294 | |||||
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1) | $ | 5,091 | $ | (5,667 | ) | ||||
Three months ended March 31, 2014 | |||||||||
Commodity Derivative | Embedded Derivatives | ||||||||
Contracts (net) | in Commodity | ||||||||
Contracts (net) | |||||||||
Fair value at beginning of period | $ | (5,460 | ) | $ | (35,032 | ) | |||
Total loss (realized and unrealized) included in earnings (1) | (2,277 | ) | 4,410 | ||||||
Settlements | 6,986 | 2,136 | |||||||
Fair value at end of period | $ | (751 | ) | $ | (28,486 | ) | |||
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1) | $ | 802 | $ | 4,036 | |||||
-1 | Gains and losses on Commodity Derivative Contracts classified as Level 3 are recorded in Revenue: Derivative gain (loss). Gains and losses on Embedded Derivatives in Commodity Contracts are recorded in Purchased product costs, Derivative loss (gain) related to purchased product costs, Facility expenses and Derivative gain related to facility expenses. | ||||||||
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventories | ||||||||
Schedule of components of inventories | ||||||||
Inventories consist of the following (in thousands): | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
NGLs | $ | 3,560 | $ | 9,687 | ||||
Line fill | 5,894 | 6,241 | ||||||
Spare parts, materials and supplies | 18,264 | 15,821 | ||||||
Total inventories | $ | 27,718 | $ | 31,749 | ||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Long-Term Debt | ||||||||
Summary of debt | ||||||||
Debt is summarized below (in thousands): | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Credit Facility | ||||||||
Credit Facility, variable interest, due March 2019 (1) | $ | — | $ | 97,600 | ||||
Senior Notes (2) | ||||||||
2020 Senior Notes, 6.75% interest, issued November 2010 and due November 2020 | 500,000 | 500,000 | ||||||
2021 Senior Notes, 6.5% interest, net of discount of $397 and $413, respectively, issued February and March 2011 and due August 2021 | 324,603 | 324,587 | ||||||
2022 Senior Notes, 6.25% interest, issued October 2011 and due September 2022 | 455,000 | 455,000 | ||||||
2023A Senior Notes, 5.5% interest, net of discount of $5,615 and $5,783, respectively, issued August 2012 and due February 2023 | 744,385 | 744,217 | ||||||
2023B Senior Notes, 4.5% interest, issued January 2013 and due July 2023 | 1,000,000 | 1,000,000 | ||||||
2024 Senior Notes, 4.875% interest, including premium of $10,475, issued November 2014 and March 2015 and due December 2024 | 1,160,475 | 500,000 | ||||||
Total long-term debt (3) | $ | 4,184,463 | $ | 3,621,404 | ||||
-1 | Applicable interest rate was 4.5% at December 31, 2014. The carrying amount of the Credit Facility approximates fair value due to the short-term and variable nature of the borrowings. The fair value of the Partnership’s Credit Facility is considered a Level 2 measurement. | |||||||
-2 | The estimated aggregate fair value of the senior notes (collectively, the “Senior Notes”) was approximately $4,297 million and $3,563 million as of March 31, 2015 and December 31, 2014, respectively, based on recent actual prices for over the counter secondary market transactions. The fair value of the Partnership’s Senior Notes is considered a Level 2 measurement. | |||||||
-3 | Accrued interest payable was approximately $62.2 million for the three months ended March 31, 2015. | |||||||
Equity_Tables
Equity (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Equity | |||||||||||||||||
Schedule of public equity offerings | |||||||||||||||||
Our public equity offerings are summarized in the table below for the three months ended March 31, 2015 and 2014 (in millions): | |||||||||||||||||
Three months ended | Three months ended | ||||||||||||||||
March 31, 2015 | March 31, 2014 | ||||||||||||||||
Common | Net | Common | Net | ||||||||||||||
units | Proceeds | units | Proceeds | ||||||||||||||
September 2013ATM (1) | — | $ | — | 4.2 | $ | 272 | |||||||||||
November 2014 ATM (2) | — | — | — | — | |||||||||||||
Total | — | $ | — | 4.2 | $ | 272 | |||||||||||
-1 | In September, 2013, the Partnership entered into an Equity Distribution Agreement with a financial institution (the “2013 Manager”) that established an At the Market offering program (the “September 2013 ATM”) pursuant to which the Partnership could have sold from time to time through the 2013 Manager, as its sales agent, common units having an aggregate offering price of up to $1 billion. During the three months ended March 31, 2014, the Partnership incurred approximately $4 million in manager fees and other third-party expenses. The proceeds from sales were used to fund capital expenditures and for general Partnership purposes. The Partnership completed the September 2013 ATM on March 31, 2014. | ||||||||||||||||
-2 | In November, 2014, the Partnership entered into an Equity Distribution Agreement with financial institutions (the “November 2014 Managers”) that established an At the Market offering program (the “November 2014 ATM”) pursuant to which the Partnership may sell from time to time through the November 2014 Managers, as its sales agents, common units having an aggregate offering price of up to $1.5 billion. As of March 31, 2015, the Partnership has issued 2.5 million units receiving net proceeds of approximately $175 million under the November 2014 ATM. | ||||||||||||||||
Schedule of distributions of available cash and range of unit prices | |||||||||||||||||
Common Unit Price | Distribution | ||||||||||||||||
Per | |||||||||||||||||
Common | |||||||||||||||||
Quarter Ended | High | Low | Unit | Declaration Date | Record Date | Payment Date | |||||||||||
March 31, 2015 | $ | 69.16 | $ | 54.04 | $ | 0.91 | April 22, 2015 | May 7, 2015 | May 15, 2015 | ||||||||
December 31, 2014 | $ | 77.31 | $ | 58.67 | $ | 0.90 | January 21, 2015 | February 5, 2015 | February 13, 2015 | ||||||||
Income_Tax_Tables
Income Tax (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Income Taxes | ||||||||||||||
Schedule of income tax rate reconciliation | ||||||||||||||
A reconciliation of the provision for income tax and the amount computed by applying the federal statutory rate to income before provision for income tax for the three months ended March 31, 2015 and 2014 is as follows (in thousands): | ||||||||||||||
Three months ended March 31, 2015 | ||||||||||||||
Corporation | Partnership | Eliminations | Consolidated | |||||||||||
(Loss) income before provision for income tax | $ | (12,830 | ) | $ | 14,912 | $ | (682 | ) | $ | 1,400 | ||||
Federal statutory rate | 35 | % | 0 | % | 0 | % | ||||||||
Federal income tax at statutory rate | (4,491 | ) | — | — | (4,491 | ) | ||||||||
Permanent items | 9 | — | — | 9 | ||||||||||
State income taxes net of federal benefit | (384 | ) | 165 | — | (219 | ) | ||||||||
Provision on income from Class A units (1) | 580 | — | — | 580 | ||||||||||
Provision for income tax | $ | (4,286 | ) | $ | 165 | $ | — | $ | (4,121 | ) | ||||
Three months ended March 31, 2014 | ||||||||||||||
Corporation | Partnership | Eliminations | Consolidated | |||||||||||
Income before provision for income tax | $ | 18,459 | $ | 15,106 | $ | (5,103 | ) | $ | 28,462 | |||||
Federal statutory rate | 35 | % | 0 | % | 0 | % | ||||||||
Federal income tax at statutory rate | 6,461 | — | — | 6,461 | ||||||||||
Permanent items | 21 | — | — | 21 | ||||||||||
State income taxes net of federal benefit | 463 | 156 | — | 619 | ||||||||||
Federal and state tax rate change | 4,250 | — | — | 4,250 | ||||||||||
Provision on income from Class A units (1) | 1,195 | — | — | 1,195 | ||||||||||
Provision for income tax | $ | 12,390 | $ | 156 | $ | — | $ | 12,546 | ||||||
-1 | The Corporation and the General Partner of the Partnership own Class A units of the Partnership that were received in the merger of the Corporation and the Partnership completed in February 2008. The Class A units share, on a pro-rata basis, in the income or loss of the Partnership, except for items attributable to the Partnership’s ownership of or sale of shares of the Corporation’s common stock. The provision for income tax on income from Class A units includes intra period allocations to continued operations and excludes allocations to equity. | |||||||||||||
Earnings_Per_Common_Unit_Table
Earnings Per Common Unit (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Common Unit | ||||||||
Schedule of computation of basic and diluted net income per common unit | ||||||||
The following table shows the computation of basic and diluted net income per common unit, and the weighted-average units used to compute basic and diluted net income per common unit for the three months ended March 31, 2015 and 2014 (in thousands, except per unit data): | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Net (loss) income attributable to the Partnership’s unitholders | $ | (9,083 | ) | $ | 12,492 | |||
Less: Income allocable to phantom units | 642 | 545 | ||||||
(Loss) income available for common unitholders - basic | (9,725 | ) | 11,947 | |||||
Add: Income allocable to phantom units and DER expense (1) | — | 568 | ||||||
(Loss) income available for common unitholders - diluted | $ | (9,725 | ) | $ | 12,515 | |||
Weighted average common units outstanding - basic | 186,685 | 158,808 | ||||||
Potential common shares (Class B and phantom units) (1) | — | 16,680 | ||||||
Weighted average common units outstanding - diluted | 186,685 | 175,488 | ||||||
Net (loss) income attributable to the Partnership’s common unitholders per common unit (2) | ||||||||
Basic | $ | (0.05 | ) | $ | 0.08 | |||
Diluted | $ | (0.05 | ) | $ | 0.07 | |||
-1 | For the three months ended March 31, 2015, approximately $674,000 of income allocable to phantom units and DER expense and 12,735,000 potential common shares were excluded from the calculation because the impact was anti-dilutive. | |||||||
-2 | Earnings per Class B units equals zero as Class B unitholders are not entitled to receive distributions and therefore no income is allocable to Class B units under the two class method. | |||||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Segment Information | ||||||||||||||||||||
Schedule of operating income and capital expenditures of reportable segments | ||||||||||||||||||||
The tables below present the Partnership’s segment profit measure, Operating income before items not allocated to segments for the three months ended March 31, 2015 and 2014 for the reported segments (in thousands): | ||||||||||||||||||||
Three months ended March 31, 2015: | ||||||||||||||||||||
Marcellus | Utica (1) | Northeast | Southwest | Elimination (2) | Total | |||||||||||||||
Segment revenue | $ | 197,176 | $ | 58,911 | $ | 30,021 | $ | 196,267 | $ | (44 | ) | $ | 482,331 | |||||||
Segment purchased product costs | 6,502 | 181 | 12,518 | 104,283 | — | 123,484 | ||||||||||||||
Net operating margin | 190,674 | 58,730 | 17,503 | 91,984 | (44 | ) | 358,847 | |||||||||||||
Segment facility expenses | 43,382 | 16,638 | 6,878 | 33,917 | (44 | ) | 100,771 | |||||||||||||
Segment portion of operating income attributable to non-controlling interests | — | 20,107 | — | 1,547 | — | 21,654 | ||||||||||||||
Operating income before items not allocated to segments | $ | 147,292 | $ | 21,985 | $ | 10,625 | $ | 56,520 | $ | — | $ | 236,422 | ||||||||
Capital expenditures | $ | 314,559 | $ | 179,218 | $ | 1,205 | $ | 40,585 | $ | — | $ | 535,567 | ||||||||
Capital expenditures for Partnership operated, non-wholly owned subsidiaries(1) | (100,878 | ) | ||||||||||||||||||
Capital expenditures not allocated to segments | 3,582 | |||||||||||||||||||
Total capital expenditures | $ | 438,271 | ||||||||||||||||||
Three months ended March 31, 2014: | ||||||||||||||||||||
Marcellus | Utica | Northeast | Southwest | Elimination (2) | Total | |||||||||||||||
Segment revenue | $ | 175,159 | $ | 23,766 | $ | 61,253 | $ | 259,329 | (1,571 | ) | $ | 517,936 | ||||||||
Segment purchased product costs | 34,290 | 4,135 | 20,455 | 152,684 | — | 211,564 | ||||||||||||||
Net operating margin | 140,869 | 19,631 | 40,798 | 106,645 | (1,571 | ) | 306,372 | |||||||||||||
Segment facility expenses | 35,473 | 11,852 | 7,114 | 32,521 | (1,571 | ) | 85,389 | |||||||||||||
Segment portion of operating income (loss) attributable to non-controlling interests | — | 3,136 | — | (1 | ) | — | 3,135 | |||||||||||||
Operating income (loss) before items not allocated to segments | $ | 105,396 | $ | 4,643 | $ | 33,684 | $ | 74,125 | — | $ | 217,848 | |||||||||
Capital expenditures | $ | 360,598 | $ | 181,332 | $ | 463 | $ | 40,132 | — | $ | 582,525 | |||||||||
Capital expenditures not allocated to segments | 4,595 | |||||||||||||||||||
Total capital expenditures | $ | 587,120 | ||||||||||||||||||
-1 | The Utica segment includes $97.9 million of capital expenditures related to Partnership operated, non-wholly owned subsidiaries capital expenditures. The Southwest segment includes $3.0 million related to Partnership operated, non-wholly owned subsidiaries. | |||||||||||||||||||
-2 | Amounts represent revenues and expenses associated with the Northeast segment fractionation completed on behalf of the Marcellus segment. | |||||||||||||||||||
Reconciliation of segment revenue to total revenue and operating income before items not allocated to segments to income before provision for income tax | ||||||||||||||||||||
The following is a reconciliation of segment revenue to total revenue and operating income before items not allocated to segments to income before provision for income tax for the three months ended March 31, 2015 and 2014 (in thousands): | ||||||||||||||||||||
Three months ended March 31, | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||
Total segment revenue | $ | 482,331 | $ | 517,936 | ||||||||||||||||
Derivative gain (loss) not allocated to segments | 7,368 | (3,967 | ) | |||||||||||||||||
Revenue adjustment for unconsolidated affiliates (1) | (27,531 | ) | — | |||||||||||||||||
Revenue deferral adjustment and other (2) | 5,162 | (1,493 | ) | |||||||||||||||||
Total revenue | $ | 467,330 | $ | 512,476 | ||||||||||||||||
Operating income before items not allocated to segments | $ | 236,422 | $ | 217,848 | ||||||||||||||||
Portion of operating income attributable to non-controlling interests | 11,414 | 3,135 | ||||||||||||||||||
Derivative gain not allocated to segments | 2,828 | 4,099 | ||||||||||||||||||
Revenue adjustment for unconsolidated affiliates (1) | (27,531 | ) | — | |||||||||||||||||
Revenue deferral adjustment (2) | (922 | ) | (1,493 | ) | ||||||||||||||||
Compensation expense included in facility expenses not allocated to segments | (1,107 | ) | (1,004 | ) | ||||||||||||||||
Facility expense, operational service fees and purchased product cost adjustments for unconsolidated affiliates (3) | 13,458 | — | ||||||||||||||||||
Portion of operating loss attributable to non-controlling interests of an unconsolidated affiliates (4) | 10,240 | — | ||||||||||||||||||
Facility expense adjustments (5) | 2,688 | 2,688 | ||||||||||||||||||
Selling, general and administrative expenses | (34,635 | ) | (35,290 | ) | ||||||||||||||||
Depreciation | (119,592 | ) | (101,929 | ) | ||||||||||||||||
Amortization of intangible assets | (15,826 | ) | (15,978 | ) | ||||||||||||||||
Impairment expense | (25,523 | ) | — | |||||||||||||||||
Gain on disposal of property, plant and equipment | 811 | 93 | ||||||||||||||||||
Accretion of asset retirement obligations | (193 | ) | (168 | ) | ||||||||||||||||
Income from operations | 52,532 | 72,001 | ||||||||||||||||||
Earnings from unconsolidated affiliates | 512 | 250 | ||||||||||||||||||
Interest expense | (50,057 | ) | (40,984 | ) | ||||||||||||||||
Amortization of deferred financing costs and debt discount (a component of interest expense) | (1,635 | ) | (2,824 | ) | ||||||||||||||||
Miscellaneous income, net | 48 | 19 | ||||||||||||||||||
Income before provision for income tax | $ | 1,400 | $ | 28,462 | ||||||||||||||||
(1)Revenue adjustment for unconsolidated affiliates relates to revenue of Partnership operated, non-wholly owned subsidiaries (See note (1) above and Note 3). | ||||||||||||||||||||
(2)Revenue deferral amount relates primarily to certain contracts in which the cash consideration that the Partnership receives for providing service is greater during the initial years of the contract compared to the later years. In accordance with GAAP, the revenue is recognized evenly over the term of the contract as the Partnership will perform a similar level of service for the entire term. Therefore, the revenue recognized in the current reporting period is less than the cash received. However, the Partnership’s chief operating decision maker and management evaluate the segment performance based on the cash consideration received and therefore, the impact of the revenue deferrals is excluded for segment reporting purposes. In March 2015, the cash consideration received from the Southwest segment contract declined and the reported segment revenue was less than the revenue recognized for GAAP purposes. For the three months ended March 31, 2015, approximately $0.1 million of the revenue deferral adjustment is attributable to the Southwest segment. Beginning in the second quarter of 2015, the cash consideration received from the Northeast segment contract is expected to decline and the reported segment revenue will be less than the revenue recognized for GAAP purposes. For the three months ended March 31, 2015, approximately $0.8 million of the revenue deferral adjustment is attributable to the Northeast segment. In comparison, for the three months ended March 31, 2014, approximately $0.2 million and $1.9 million of the revenue deferral adjustment was attributable to the Southwest segment and Northeast segment, respectively. Other consists of Operational Service revenues from unconsolidated affiliates of $6.1 million for the three months ended March 31, 2015 compared to $0.6 million for three months ended March 31, 2014. | ||||||||||||||||||||
(3)Facility expense and purchased product cost adjustments for unconsolidated affiliate consist of the facility expenses and purchased product costs related to Partnership operated, non-wholly owned subsidiaries (See note (1) above and Note 3 of these Notes to the Condensed Consolidated Financial Statements). | ||||||||||||||||||||
(4)Portion of operating loss attributable to non-controlling interests of an unconsolidated affiliate amount relates to the Partnership’s joint venture partners’ proportionate share of operating income in Partnership operated, non-wholly owned subsidiaries, which is included in segment operating income calculation as if the Partnership operated, non-wholly owned subsidiaries are consolidated (See note (1) above and Note 3). | ||||||||||||||||||||
(5)Facility expenses adjustments consist of the reallocation of the interest expense related to the SMR, which is included in facility expenses for the purposes of evaluating the performance of the Southwest segment. | ||||||||||||||||||||
Schedule of assets by segment | ||||||||||||||||||||
The table below presents information about segment assets as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||
Marcellus | $ | 5,924,190 | $ | 5,749,932 | ||||||||||||||||
Utica (1) | 2,278,054 | 2,163,025 | ||||||||||||||||||
Northeast | 436,303 | 445,911 | ||||||||||||||||||
Southwest (1) | 2,381,701 | 2,362,113 | ||||||||||||||||||
Total segment assets | 11,020,248 | 10,720,981 | ||||||||||||||||||
Assets not allocated to segments: | ||||||||||||||||||||
Certain cash and cash equivalents | 71,509 | — | ||||||||||||||||||
Fair value of derivatives | 29,455 | 37,428 | ||||||||||||||||||
Investment in unconsolidated affiliates | 50,000 | 108,849 | ||||||||||||||||||
Other (2) | 102,555 | 113,520 | ||||||||||||||||||
Total assets | $ | 11,273,767 | $ | 10,980,778 | ||||||||||||||||
-1 | The March 31, 2015 and December 31, 2014 amounts exclude assets related to the Partnership’s unconsolidated joint ventures. The amounts include the investments in unconsolidated affiliates. | |||||||||||||||||||
-2 | Includes corporate fixed assets, deferred financing costs, income tax receivable, receivables and other corporate assets not allocated to segments. | |||||||||||||||||||
Supplemental_Condensed_Consoli1
Supplemental Condensed Consolidating Financial Information (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Supplemental Condensed Consolidating Financial Information | |||||||||||||||||
Schedule of condensed consolidating balance sheets | Condensed consolidating financial information for the Partnership and its combined guarantor and combined non-guarantor subsidiaries as of March 31, 2015 and December 31, 2014 and for the three months ended March 31, 2015 and 2014 is as follows (in thousands): | ||||||||||||||||
Condensed Consolidating Balance Sheets | |||||||||||||||||
As of March 31, 2015 | |||||||||||||||||
Parent | Guarantor | Non- | Consolidating | Consolidated | |||||||||||||
Subsidiaries | Guarantor | Adjustments | |||||||||||||||
Subsidiaries | |||||||||||||||||
ASSETS | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | 61,000 | $ | 13,350 | $ | 161,934 | $ | — | $ | 236,284 | |||||||
Restricted cash | — | — | 10,000 | — | 10,000 | ||||||||||||
Receivables and other current assets | 1,563 | 191,268 | 133,776 | — | 326,607 | ||||||||||||
Receivables from unconsolidated affiliates, net | — | 2,859 | 2,810 | — | 5,669 | ||||||||||||
Intercompany receivables | 868,412 | 25,324 | 85,970 | (979,706 | ) | — | |||||||||||
Fair value of derivative instruments | — | 16,351 | 2,813 | — | 19,164 | ||||||||||||
Total current assets | 930,975 | 249,152 | 397,303 | (979,706 | ) | 597,724 | |||||||||||
Total property, plant and equipment, net | 10,346 | 2,136,418 | 6,784,889 | (42,716 | ) | 8,888,937 | |||||||||||
Other long-term assets: | |||||||||||||||||
Investment in unconsolidated affiliates | — | 85,791 | 763,051 | (10,076 | ) | 838,766 | |||||||||||
Investment in consolidated affiliates | 8,040,510 | 6,837,186 | — | (14,877,696 | ) | — | |||||||||||
Intangibles, net of accumulated amortization | — | 517,991 | 258,541 | — | 776,532 | ||||||||||||
Fair value of derivative instruments | — | 10,291 | — | — | 10,291 | ||||||||||||
Intercompany notes receivable | 213,100 | — | — | (213,100 | ) | — | |||||||||||
Other long-term assets | 58,167 | 26,651 | 76,699 | — | 161,517 | ||||||||||||
Total assets | $ | 9,253,098 | $ | 9,863,480 | $ | 8,280,483 | $ | (16,123,294 | ) | $ | 11,273,767 | ||||||
LIABILITIES AND EQUITY | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Intercompany payables | $ | 111 | $ | 948,971 | $ | 30,624 | $ | (979,706 | ) | $ | — | ||||||
Fair value of derivative instruments | — | 165 | 22 | — | 187 | ||||||||||||
Payables to unconsolidated affiliates | — | 39 | 11,256 | — | 11,295 | ||||||||||||
Other current liabilities | 67,170 | 164,654 | 278,659 | (2,472 | ) | 508,011 | |||||||||||
Total current liabilities | 67,281 | 1,113,829 | 320,561 | (982,178 | ) | 519,493 | |||||||||||
Deferred income taxes | 6,328 | 347,023 | — | — | 353,351 | ||||||||||||
Long-term intercompany financing payable | — | 213,100 | 94,415 | (307,515 | ) | — | |||||||||||
Long-term debt, net of discounts | 4,184,463 | — | — | — | 4,184,463 | ||||||||||||
Other long-term liabilities | 8,633 | 149,018 | 7,981 | — | 165,632 | ||||||||||||
Equity: | |||||||||||||||||
Common Units | 4,534,874 | 8,040,510 | 7,857,526 | (15,848,635 | ) | 4,584,275 | |||||||||||
Class B Units | 451,519 | — | — | — | 451,519 | ||||||||||||
Non-controlling interest in consolidated subsidiaries | — | — | — | 1,015,034 | 1,015,034 | ||||||||||||
Total equity | 4,986,393 | 8,040,510 | 7,857,526 | (14,833,601 | ) | 6,050,828 | |||||||||||
Total liabilities and equity | $ | 9,253,098 | $ | 9,863,480 | $ | 8,280,483 | $ | (16,123,294 | ) | $ | 11,273,767 | ||||||
As of December 31, 2014 | |||||||||||||||||
Parent | Guarantor | Non- | Consolidating | Consolidated | |||||||||||||
Subsidiaries | Guarantor | Adjustments | |||||||||||||||
Subsidiaries | |||||||||||||||||
ASSETS | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | — | $ | — | $ | 108,887 | $ | — | $ | 108,887 | |||||||
Restricted cash | — | — | 20,000 | — | 20,000 | ||||||||||||
Receivables and other current assets | 1,219 | 225,695 | 153,834 | — | 380,748 | ||||||||||||
Receivables from unconsolidated affiliates, net | 247 | 3,001 | 3,849 | — | 7,097 | ||||||||||||
Intercompany receivables | 633,994 | 24,683 | 178,109 | (836,786 | ) | — | |||||||||||
Fair value of derivative instruments | — | 17,386 | 3,535 | — | 20,921 | ||||||||||||
Total current assets | 635,460 | 270,765 | 468,214 | (836,786 | ) | 537,653 | |||||||||||
Total property, plant and equipment, net | 9,992 | 2,140,565 | 6,550,040 | (47,697 | ) | 8,652,900 | |||||||||||
Other long-term assets: | |||||||||||||||||
Investment in unconsolidated affiliates | — | 82,616 | 733,226 | (10,209 | ) | 805,633 | |||||||||||
Investment in consolidated affiliates | 7,990,532 | 6,500,008 | — | (14,490,540 | ) | — | |||||||||||
Intangibles, net of accumulated amortization | — | 546,637 | 262,640 | — | 809,277 | ||||||||||||
Fair value of derivative instruments | — | 16,507 | — | — | 16,507 | ||||||||||||
Intercompany notes receivable | 186,100 | — | — | (186,100 | ) | — | |||||||||||
Other long-term assets | 52,825 | 29,412 | 76,571 | — | 158,808 | ||||||||||||
Total assets | $ | 8,874,909 | $ | 9,586,510 | $ | 8,090,691 | $ | (15,571,332 | ) | $ | 10,980,778 | ||||||
LIABILITIES AND EQUITY | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Intercompany payables | $ | 3,287 | $ | 729,714 | $ | 103,787 | $ | (836,788 | ) | $ | — | ||||||
Payables to unconsolidated affiliates | — | — | 8,621 | — | 8,621 | ||||||||||||
Other current liabilities | 69,552 | 177,269 | 386,821 | (2,400 | ) | 631,242 | |||||||||||
Total current liabilities | 72,839 | 906,983 | 499,229 | (839,188 | ) | 639,863 | |||||||||||
Deferred income taxes | 6,162 | 351,098 | — | — | 357,260 | ||||||||||||
Long-term intercompany financing payable | — | 186,100 | 95,061 | (281,161 | ) | — | |||||||||||
Long-term debt, net of discounts | 3,621,404 | — | — | — | 3,621,404 | ||||||||||||
Other long-term liabilities | 8,794 | 151,797 | 8,421 | — | 169,012 | ||||||||||||
Equity: | |||||||||||||||||
Common Units | 4,714,191 | 7,990,532 | 7,487,980 | (15,434,460 | ) | 4,758,243 | |||||||||||
Class B Units | 451,519 | — | — | — | 451,519 | ||||||||||||
Non-controlling interest in consolidated subsidiaries | — | — | — | 983,477 | 983,477 | ||||||||||||
Total equity | 5,165,710 | 7,990,532 | 7,487,980 | (14,450,983 | ) | 6,193,239 | |||||||||||
Total liabilities and equity | $ | 8,874,909 | $ | 9,586,510 | $ | 8,090,691 | $ | (15,571,332 | ) | $ | 10,980,778 | ||||||
Schedule of condensed consolidating statements of operations | |||||||||||||||||
Condensed Consolidating Statements of Operations | |||||||||||||||||
Three months ended March 31, 2015 | |||||||||||||||||
Parent | Guarantor | Non- | Consolidating | Consolidated | |||||||||||||
Subsidiaries | Guarantor | Adjustments | |||||||||||||||
Subsidiaries | |||||||||||||||||
Total revenue | $ | — | $ | 241,325 | $ | 231,927 | $ | (5,922 | ) | $ | 467,330 | ||||||
Operating expenses: | |||||||||||||||||
Purchased product costs | — | 121,331 | 6,693 | — | 128,024 | ||||||||||||
Facility expenses | — | 38,000 | 50,885 | 2,931 | 91,816 | ||||||||||||
Selling, general and administrative expenses | 13,532 | 15,784 | 9,745 | (4,426 | ) | 34,635 | |||||||||||
Depreciation and amortization | 324 | 50,944 | 85,222 | (1,072 | ) | 135,418 | |||||||||||
Other operating expenses (income) | — | 629 | (1,247 | ) | — | (618 | ) | ||||||||||
Impairment expense | — | 25,523 | — | — | 25,523 | ||||||||||||
Total operating expenses | 13,856 | 252,211 | 151,298 | (2,567 | ) | 414,798 | |||||||||||
(Loss) income from operations | (13,856 | ) | (10,886 | ) | 80,629 | (3,355 | ) | 52,532 | |||||||||
Earnings from consolidated affiliates | 50,268 | 62,468 | — | (112,736 | ) | — | |||||||||||
Other expense, net | (50,311 | ) | (5,599 | ) | (3,557 | ) | 8,335 | (51,132 | ) | ||||||||
(Loss) income before provision for income tax | (13,899 | ) | 45,983 | 77,072 | (107,756 | ) | 1,400 | ||||||||||
Provision for income tax expense (benefit) | 165 | (4,286 | ) | — | — | (4,121 | ) | ||||||||||
Net income | (14,064 | ) | 50,269 | 77,072 | (107,756 | ) | 5,521 | ||||||||||
Net income attributable to non-controlling interest | — | — | — | (14,604 | ) | (14,604 | ) | ||||||||||
Net (loss) income attributable to the Partnership’s unitholders | $ | (14,064 | ) | $ | 50,269 | $ | 77,072 | $ | (122,360 | ) | $ | (9,083 | ) | ||||
Three months ended March 31, 2014 | |||||||||||||||||
Parent | Guarantor | Non- | Consolidating | Consolidated | |||||||||||||
Subsidiaries | Guarantor | Adjustments | |||||||||||||||
Subsidiaries | |||||||||||||||||
Total revenue | $ | — | $ | 325,501 | $ | 199,118 | $ | (12,143 | ) | $ | 512,476 | ||||||
Operating expenses: | |||||||||||||||||
Purchased product costs | — | 165,183 | 38,583 | — | 203,766 | ||||||||||||
Facility expenses | — | 37,033 | 48,371 | (1,967 | ) | 83,437 | |||||||||||
Selling, general and administrative expenses | 13,655 | 10,516 | 13,349 | (2,230 | ) | 35,290 | |||||||||||
Depreciation and amortization | 280 | 49,120 | 69,813 | (1,306 | ) | 117,907 | |||||||||||
Other operating (income) expenses | — | (159 | ) | 234 | — | 75 | |||||||||||
Total operating expenses | 13,935 | 261,693 | 170,350 | (5,503 | ) | 440,475 | |||||||||||
(Loss) income from operations | (13,935 | ) | 63,808 | 28,768 | (6,640 | ) | 72,001 | ||||||||||
Earnings from consolidated affiliates | 67,710 | 22,389 | — | (90,099 | ) | — | |||||||||||
Other expense, net | (43,162 | ) | (6,098 | ) | (2,956 | ) | 8,677 | (43,539 | ) | ||||||||
Income before provision for income tax | 10,613 | 80,099 | 25,812 | (88,062 | ) | 28,462 | |||||||||||
Provision for income tax expense | 157 | 12,389 | — | — | 12,546 | ||||||||||||
Net income | 10,456 | 67,710 | 25,812 | (88,062 | ) | 15,916 | |||||||||||
Net income attributable to non-controlling interest | — | — | — | (3,424 | ) | (3,424 | ) | ||||||||||
Net income attributable to the Partnership’s unitholders | $ | 10,456 | $ | 67,710 | $ | 25,812 | $ | (91,486 | ) | $ | 12,492 | ||||||
Schedule of condensed consolidating statements of cash flows | |||||||||||||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||
Three months ended March 31, 2015 | |||||||||||||||||
Parent | Guarantor | Non- | Consolidating | Consolidated | |||||||||||||
Subsidiaries | Guarantor | Adjustments | |||||||||||||||
Subsidiaries | |||||||||||||||||
Net cash (used in) provided by operating activities | $ | (61,211 | ) | $ | 59,387 | $ | 198,899 | $ | 3,859 | 200,934 | |||||||
Cash flows from investing activities: | |||||||||||||||||
Restricted cash | — | — | 10,000 | — | 10,000 | ||||||||||||
Capital expenditures | (695 | ) | (40,384 | ) | (393,117 | ) | (4,075 | ) | (438,271 | ) | |||||||
Equity investments in consolidated affiliates | (17,640 | ) | (408,037 | ) | — | 425,677 | — | ||||||||||
Intercompany advances, net | (235,245 | ) | — | (12,320 | ) | 247,565 | — | ||||||||||
Investment in unconsolidated affiliates | — | (6,632 | ) | (40,794 | ) | — | (47,426 | ) | |||||||||
Distributions from consolidated affiliates | 21,663 | 138,750 | — | (160,413 | ) | — | |||||||||||
Investment in intercompany notes receivable, net | (27,000 | ) | — | — | 27,000 | — | |||||||||||
Proceeds from disposal of property, plant and equipment | — | 19 | 838 | — | 857 | ||||||||||||
Net cash flows used in investing activities | (258,917 | ) | (316,284 | ) | (435,393 | ) | 535,754 | (474,840 | ) | ||||||||
Cash flows from financing activities: | |||||||||||||||||
Proceeds from Credit Facility | 601,900 | — | — | — | 601,900 | ||||||||||||
Payments Credit Facility | (699,500 | ) | — | — | — | (699,500 | ) | ||||||||||
Proceeds from long-term debt | 660,563 | — | — | — | 660,563 | ||||||||||||
Payments for debt issue costs and deferred financing costs | (7,000 | ) | — | — | — | (7,000 | ) | ||||||||||
Payments related to intercompany financing, net | — | 27,000 | (573 | ) | (26,427 | ) | — | ||||||||||
Proceeds from sale of equity interest in consolidated subsidiary | — | — | 10,823 | — | 10,823 | ||||||||||||
Contributions from non-controlling interest | — | — | 19,571 | — | 19,571 | ||||||||||||
Contributions from parent and affiliates | — | 17,640 | 408,037 | (425,677 | ) | — | |||||||||||
Payments of SMR liability | — | (652 | ) | — | — | (652 | ) | ||||||||||
Share-based payment activity | (6,117 | ) | — | — | — | (6,117 | ) | ||||||||||
Payment of distributions | (168,718 | ) | (21,663 | ) | (148,317 | ) | 160,413 | (178,285 | ) | ||||||||
Intercompany advances, net | — | 247,922 | — | (247,922 | ) | — | |||||||||||
Net cash flows provided by financing activities | 381,128 | 270,247 | 289,541 | (539,613 | ) | 401,303 | |||||||||||
Net increase in cash | 61,000 | 13,350 | 53,047 | — | 127,397 | ||||||||||||
Cash and cash equivalents at beginning of period | — | — | 108,887 | — | 108,887 | ||||||||||||
Cash and cash equivalents at end of period | $ | 61,000 | $ | 13,350 | $ | 161,934 | $ | — | $ | 236,284 | |||||||
Three months ended March 31, 2014 | |||||||||||||||||
Parent | Guarantor | Non- | Consolidating | Consolidated | |||||||||||||
Subsidiaries | Guarantor | Adjustments | |||||||||||||||
Subsidiaries | |||||||||||||||||
Net cash (used in) provided by operating activities | $ | (56,688 | ) | $ | 103,777 | $ | 64,456 | $ | 828 | $ | 112,373 | ||||||
Cash flows from investing activities: | |||||||||||||||||
Capital expenditures | (3,512 | ) | (51,417 | ) | (530,853 | ) | (1,338 | ) | (587,120 | ) | |||||||
Equity investments in consolidated affiliates | (14,243 | ) | (522,200 | ) | — | 536,443 | — | ||||||||||
Intercompany advances, net | (445,203 | ) | — | — | 445,203 | — | |||||||||||
Investment in unconsolidated affiliates | — | (7,498 | ) | — | — | (7,498 | ) | ||||||||||
Distributions from consolidated affiliates | 35,861 | 73,610 | — | (109,471 | ) | — | |||||||||||
Investment in intercompany notes, net | (18,400 | ) | — | — | 18,400 | — | |||||||||||
Proceeds from disposal of property, plant and equipment | — | 2,043 | 17,101 | — | 19,144 | ||||||||||||
Net cash flows used in investing activities | (445,497 | ) | (505,462 | ) | (513,752 | ) | 889,237 | (575,474 | ) | ||||||||
Cash flows from financing activities: | |||||||||||||||||
Proceeds from public equity offerings, net | 271,880 | — | — | — | 271,880 | ||||||||||||
Proceeds from Credit Facility | 377,300 | — | — | — | 377,300 | ||||||||||||
Payments related to intercompany financing, net | — | 18,400 | (510 | ) | (17,890 | ) | — | ||||||||||
Payments for debt issuance costs, deferred financing costs and registration costs | (1,890 | ) | — | — | — | (1,890 | ) | ||||||||||
Contributions from parent and affiliates | — | 14,243 | 522,200 | (536,443 | ) | — | |||||||||||
Share-based payment activity | (8,924 | ) | — | — | — | (8,924 | ) | ||||||||||
Payments of distributions | (136,405 | ) | (35,861 | ) | (73,700 | ) | 109,471 | (136,495 | ) | ||||||||
Payments of SMR liability | — | (594 | ) | — | — | (594 | ) | ||||||||||
Intercompany advances, net | — | 445,203 | — | (445,203 | ) | — | |||||||||||
Net cash flows provided by financing activities | 501,961 | 441,391 | 447,990 | (890,065 | ) | 501,277 | |||||||||||
Net (decrease) increase in cash and cash equivalents | (224 | ) | 39,706 | (1,306 | ) | — | 38,176 | ||||||||||
Cash and cash equivalents at beginning of period | 224 | 79,363 | 5,718 | — | 85,305 | ||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | 119,069 | $ | 4,412 | $ | — | $ | 123,481 | |||||||
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Supplemental Cash Flow Information | ||||||||
Schedule of supplemental cash flow information | ||||||||
The following table provides information regarding supplemental cash flow information (in thousands): | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for interest, net of amounts capitalized | $ | 43,262 | $ | 51,622 | ||||
Cash received for income taxes, net | (149 | ) | (183 | ) | ||||
Supplemental schedule of non-cash investing and financing activities: | ||||||||
Amounts payable for property, plant and equipment (1) | $ | 276,046 | $ | 553,370 | ||||
Interest capitalized on construction in progress | 5,556 | 5,936 | ||||||
Issuance of common units for vesting of share-based payment awards | 12,044 | 7,720 | ||||||
-1 | The March 31, 2015 total amounts payable for property, plant and equipment includes approximately $157.1 million recorded in accrued liabilities in the accompanying Condensed Consolidated Balance Sheets. | |||||||
Variable_Interest_Entity_Detai
Variable Interest Entity (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Jan. 31, 2014 | Nov. 30, 2014 | Feb. 28, 2013 | |
MarkWest Utica EMG | ||||||
Variable Interest Entities | ||||||
Distributions received from Ohio Gathering | $336,100,000 | |||||
Ohio Gathering | ||||||
Variable Interest Entities | ||||||
Operational service revenue | 4,700,000 | |||||
Ohio Gathering | Summit | ||||||
Variable Interest Entities | ||||||
Percentage of ownership interest held by non-controlling interest | 40.00% | 1.00% | ||||
Total Variable Interest Entities | MarkWest Utica EMG | ||||||
Variable Interest Entities | ||||||
Noncontrolling interest owners total funding commitment | 950,000,000 | |||||
Percentage of capital required by reporting entity after non-controlling interest minimum contribution | 100.00% | |||||
Aggregate contributions to VIE threshold | 2,000,000,000 | |||||
Aggregate capital contributed by all members | 2,000,000,000 | |||||
Maximum percentage of ownership interest in joint venture | 70.00% | |||||
Threshold percentage for non-controlling owners to make pro rata contributions | 30.00% | |||||
Maximum non-controlling percentage of capital contributions until pro rata ownership threshold is reached | 10.00% | |||||
Noncontrolling interest owners actual contribution | 985,000,000 | |||||
Contribution by the Partnership | 1,364,700,000 | |||||
Investment balance as a percent of aggregate investment balances | 58.00% | |||||
Percentage of ownership interest held by non-controlling interest | 42.00% | |||||
Noncontrolling interest owners capital contribution preference threshold | 500,000,000 | |||||
Accrual of preference amount to EMG Utica's investment balance during the period | 10,300,000 | 8,800,000 | ||||
Percentage of available cash to be received by the Partnership | 60.00% | |||||
Percentage of aggregate investment balances for proportionate distribution of cash | 60.00% | |||||
Percentage of aggregate investment balances for end of de facto agent relationship | 60.00% | |||||
Ohio Gathering | Summit | ||||||
Variable Interest Entities | ||||||
Cash investment received | $341,100,000 |
Other_Equity_Interests_Details
Other Equity Interests (Details) (USD $) | 3 Months Ended | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Jan. 31, 2014 | |
Other Equity Interests | |||||
Proceeds from sale of assets under construction | $857,000 | $19,144,000 | |||
Utica Condensate | |||||
Other Equity Interests | |||||
Ownership percentage in equity method investment | 55.00% | ||||
Utica Condensate | Sale of assets to investee | Assets under construction | |||||
Other Equity Interests | |||||
Amount of assets sold | 17,000,000 | ||||
Proceeds from sale of assets under construction | 17,000,000 | ||||
Ohio Condensate | |||||
Other Equity Interests | |||||
Operational service revenue | 1,100,000 | ||||
Ohio Condensate | Blackhawk | Maximum | |||||
Other Equity Interests | |||||
Percentage of ownership interest held by non-controlling interest | 1.00% | ||||
Ohio Condensate | Summit | |||||
Other Equity Interests | |||||
Percentage of ownership interest held by non-controlling interest | 40.00% | 1.00% | |||
Utica Condensate | Ohio Condensate | |||||
Other Equity Interests | |||||
Ownership percentage in subsidiary | 60.00% | 99.00% | |||
Ohio Condensate | Summit | |||||
Other Equity Interests | |||||
Cash investment received | $8,600,000 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Commodity contracts | Derivative instruments not designated as hedging instruments | |
Derivative financial instruments | |
Notional quantity of Crude Oil contracts (in Bbl) | 275,000 |
Notional quantity of Natural Gas contracts (in MMBtu) | 486,358 |
Notional quantity of NGL contracts (in Gal) | 126,056,336 |
Embedded derivatives in commodity contracts | Embedded derivative in natural gas processing and purchase contract | |
Derivative financial instruments | |
Notional amount for embedded derivative in commodity contract (in Dth per day) | 9,000 |
Producer's option to extend successive years, number | 5 years |
Fair value of commodity contract | ($39,213) |
Inception value for period from April 1, 2015 to December 31, 2022 | -53,507 |
Derivative asset as of March 31,2015 | $14,294 |
Derivative_Financial_Instrumen3
Derivative Financial Instruments (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets | ||
Total carrying value of derivative assets in Condensed Consolidated Balance Sheets | $29,455 | $37,428 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | -30 | |
Net Amount | 29,425 | 37,428 |
Liabilities | ||
Total carrying value of derivative liabilities in Condensed Consolidated Balance Sheets | -187 | |
Gross Amounts Not Offset in the Consolidated Balance Sheet | 30 | |
Net Amount | -157 | |
Current Assets | ||
Assets | ||
Total carrying value of derivative assets in Condensed Consolidated Balance Sheets | 19,164 | 20,921 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | -30 | |
Net Amount | 19,134 | 20,921 |
Non-current Assets | ||
Assets | ||
Total carrying value of derivative assets in Condensed Consolidated Balance Sheets | 10,291 | 16,507 |
Net Amount | 10,291 | 16,507 |
Current Liabilities | ||
Liabilities | ||
Total carrying value of derivative liabilities in Condensed Consolidated Balance Sheets | -187 | |
Gross Amounts Not Offset in the Consolidated Balance Sheet | 30 | |
Net Amount | -157 | |
Commodity contracts, including embedded derivatives | Derivative instruments not designated as hedging instruments | ||
Assets | ||
Total carrying value of derivative assets in Condensed Consolidated Balance Sheets | 29,455 | 37,428 |
Liabilities | ||
Total carrying value of derivative liabilities in Condensed Consolidated Balance Sheets | -187 | |
Commodity contracts, including embedded derivatives | Derivative instruments not designated as hedging instruments | Current Assets | ||
Assets | ||
Total carrying value of derivative assets in Condensed Consolidated Balance Sheets | 19,164 | 20,921 |
Commodity contracts, including embedded derivatives | Derivative instruments not designated as hedging instruments | Non-current Assets | ||
Assets | ||
Total carrying value of derivative assets in Condensed Consolidated Balance Sheets | 10,291 | 16,507 |
Commodity contracts, including embedded derivatives | Derivative instruments not designated as hedging instruments | Current Liabilities | ||
Liabilities | ||
Total carrying value of derivative liabilities in Condensed Consolidated Balance Sheets | -187 | |
Commodity contracts | Current Assets | ||
Assets | ||
Total carrying value of derivative assets in Condensed Consolidated Balance Sheets | 15,161 | 18,652 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | -30 | |
Net Amount | 15,131 | 18,652 |
Commodity contracts | Current Liabilities | ||
Liabilities | ||
Total carrying value of derivative liabilities in Condensed Consolidated Balance Sheets | -187 | |
Gross Amounts Not Offset in the Consolidated Balance Sheet | 30 | |
Net Amount | -157 | |
Embedded derivatives in commodity contracts | Current Assets | ||
Assets | ||
Total carrying value of derivative assets in Condensed Consolidated Balance Sheets | 4,003 | 2,269 |
Net Amount | 4,003 | 2,269 |
Embedded derivatives in commodity contracts | Non-current Assets | ||
Assets | ||
Total carrying value of derivative assets in Condensed Consolidated Balance Sheets | 10,291 | 16,507 |
Net Amount | $10,291 | $16,507 |
Derivative_Financial_Instrumen4
Derivative Financial Instruments (Details 3) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Impact of the Partnership's derivative instruments on Condensed Consolidated Statements of Operations | ||
Unrealized (loss) gain | ($8,160) | $11,820 |
Derivative instruments not designated as hedging instruments | ||
Impact of the Partnership's derivative instruments on Condensed Consolidated Statements of Operations | ||
Total gain (loss) | 2,828 | 4,099 |
Derivative instruments not designated as hedging instruments | Revenue: Derivative gain (loss) | ||
Impact of the Partnership's derivative instruments on Condensed Consolidated Statements of Operations | ||
Realized gain (loss) | 10,988 | -7,607 |
Unrealized (loss) gain | -3,620 | 3,640 |
Total gain (loss) | 7,368 | -3,967 |
Derivative instruments not designated as hedging instruments | Derivative (loss) gain related to purchased product costs | ||
Impact of the Partnership's derivative instruments on Condensed Consolidated Statements of Operations | ||
Realized gain (loss) | -114 | |
Unrealized (loss) gain | -4,540 | 7,912 |
Total gain (loss) | -4,540 | 7,798 |
Derivative instruments not designated as hedging instruments | Derivative gain related to facility expenses | ||
Impact of the Partnership's derivative instruments on Condensed Consolidated Statements of Operations | ||
Unrealized (loss) gain | $268 |
Fair_Value_Details
Fair Value (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Derivative instruments carried at fair value in Condensed Consolidated Balance Sheet | ||
Total carrying value of derivative assets in Condensed Consolidated Balance Sheets | $29,455 | $37,428 |
Total carrying value of derivative liabilities in Condensed Consolidated Balance Sheets | -187 | |
Recurring | Significant other observable inputs (Level 2) | Commodity contracts | ||
Derivative instruments carried at fair value in Condensed Consolidated Balance Sheet | ||
Total carrying value of derivative assets in Condensed Consolidated Balance Sheets | 9,942 | 14,812 |
Total carrying value of derivative liabilities in Condensed Consolidated Balance Sheets | -59 | |
Recurring | Significant unobservable inputs (Level 3) | Commodity contracts | ||
Derivative instruments carried at fair value in Condensed Consolidated Balance Sheet | ||
Total carrying value of derivative assets in Condensed Consolidated Balance Sheets | 5,219 | 3,840 |
Total carrying value of derivative liabilities in Condensed Consolidated Balance Sheets | -128 | |
Recurring | Significant unobservable inputs (Level 3) | Embedded derivatives in commodity contracts | ||
Derivative instruments carried at fair value in Condensed Consolidated Balance Sheet | ||
Total carrying value of derivative assets in Condensed Consolidated Balance Sheets | $14,294 | $18,776 |
Fair_Value_Details_2
Fair Value (Details 2) (Commodity contracts, Significant unobservable inputs (Level 3)) | Mar. 31, 2015 |
Assets | Propane prices | Minimum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.52 |
Assets | Propane prices | Maximum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.57 |
Assets | Isobutane prices | Minimum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.63 |
Assets | Isobutane prices | Maximum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.69 |
Assets | Normal butane prices | Minimum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.59 |
Assets | Normal butane prices | Maximum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.67 |
Assets | Natural gasoline prices | Minimum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 1.1 |
Assets | Natural gasoline prices | Maximum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 1.12 |
Liabilities | Propane prices | Minimum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.52 |
Liabilities | Propane prices | Maximum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.54 |
Liabilities | Isobutane prices | Minimum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.63 |
Liabilities | Isobutane prices | Maximum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.65 |
Liabilities | Normal butane prices | Minimum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.59 |
Liabilities | Normal butane prices | Maximum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.67 |
Liabilities | Natural gasoline prices | Minimum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 1.11 |
Liabilities | Natural gasoline prices | Maximum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 1.17 |
Fair_Value_Details_3
Fair Value (Details 3) (Embedded derivatives in commodity contracts, Assets, Significant unobservable inputs (Level 3)) | 3 Months Ended |
Mar. 31, 2015 | |
item | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Number of renewal periods | 2 |
Term of counterparty option to renew gas purchase agreement | 5 years |
Probability of renewal (as a percent) | 0.00% |
Propane prices | Minimum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.52 |
Propane prices | Maximum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.6 |
Isobutane prices | Minimum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.63 |
Isobutane prices | Maximum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.81 |
Normal butane prices | Minimum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.59 |
Normal butane prices | Maximum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 0.78 |
Natural gasoline prices | Minimum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 1.1 |
Natural gasoline prices | Maximum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 1.22 |
Natural gas prices | Minimum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 2.46 |
Natural gas prices | Maximum | |
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities | |
Forward price (in dollars per unit) | 3.76 |
Fair_Value_Details_4
Fair Value (Details 4) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Commodity contracts | ||
Derivative assets and liabilities classified by the Partnership within Level 3 of the valuation hierarchy | ||
Fair value at beginning of period | $3,840 | ($5,460) |
Total loss (realized and unrealized) included in earnings | 5,028 | -2,277 |
Settlements | -3,777 | 6,986 |
Fair value at end of period | 5,091 | -751 |
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period | 5,091 | 802 |
Embedded derivatives in commodity contracts | ||
Derivative assets and liabilities classified by the Partnership within Level 3 of the valuation hierarchy | ||
Fair value at beginning of period | 18,776 | -35,032 |
Total loss (realized and unrealized) included in earnings | -5,782 | 4,410 |
Settlements | 1,300 | 2,136 |
Fair value at end of period | 14,294 | -28,486 |
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period | ($5,667) | $4,036 |
Inventories_Details
Inventories (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventories | ||
NGLs | $3,560 | $9,687 |
Line fill | 5,894 | 6,241 |
Spare parts, materials and supplies | 18,264 | 15,821 |
Total inventories | $27,718 | $31,749 |
Impairment_of_LongLived_Assets1
Impairment of Long-Lived Assets and Goodwill (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Impairment expense | $25,523,000 | $0 |
Southwest Segment | Appleby | ||
Impairment expense | 22,800,000 | |
Impairment related to intangibles | 16,800,000 | |
Impairment related to property, plant and equipment | 6,000,000 | |
Western Oklahoma Reporting Unit | Southwest Segment | ||
Goodwill impairment charge | 2,700,000 | |
Other reporting units | ||
Goodwill impairment charge | $0 |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 3 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 2 Months Ended | 12 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 20, 2014 | Jan. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 19, 2014 | Nov. 30, 2014 | |
Long-Term Debt | |||||||||
Long-term debt, net of discounts | $4,184,463,000 | $4,184,463,000 | $4,184,463,000 | $3,621,404,000 | |||||
Accrued interest payable | 62,200,000 | 62,200,000 | 62,200,000 | ||||||
Deferred financing costs | 7,000,000 | 1,890,000 | |||||||
2024 Senior Notes, 4.875% interest, issued March 2015 and due December 2024 | |||||||||
Long-Term Debt | |||||||||
Debt instrument, stated interest rate percentage | 4.88% | 4.88% | 4.88% | ||||||
Accrued interest on notes issued | 9,000,000 | ||||||||
Revolving credit facility | |||||||||
Long-Term Debt | |||||||||
Long-term debt, net of discounts | 97,600,000 | ||||||||
Applicable interest rate (as a percent) | 4.50% | ||||||||
Credit facility current lending capacity | 1,300,000,000 | ||||||||
Extension of maturity | 18 months | ||||||||
Accordion option to increase borrowing capacity under the Credit Facility | 500,000,000 | 250,000,000 | |||||||
Deferred financing costs | 1,900,000 | ||||||||
Letters of credit maximum borrowing capacity | 150,000,000 | 150,000,000 | 150,000,000 | ||||||
Short-term swingline loan maximum borrowing capacity | 10,000,000 | 10,000,000 | 10,000,000 | ||||||
Minimum Interest Coverage Ratio | 2.5 | ||||||||
Maximum leverage ratio prior to Collateral Release Date | 5.25 | 5.5 | 5.5 | ||||||
Maximum leverage ratio after Collateral Release Date | 5 | ||||||||
Borrowings outstanding | 0 | 0 | 0 | ||||||
Letters of credit outstanding amount | 11,300,000 | 11,300,000 | 11,300,000 | ||||||
Unused borrowing capacity | 1,288,700,000 | 1,288,700,000 | 1,288,700,000 | ||||||
Amount available for borrowing based on financial covenant requirements | 1,040,200,000 | 1,040,200,000 | 1,040,200,000 | ||||||
Revolving credit facility | Alternate Base Rate Loans | Minimum | |||||||||
Long-Term Debt | |||||||||
Margin prior to Collateral Release Date (as a percent) | 0.50% | ||||||||
Margin after Collateral Release Date (as a percent) | 0.13% | ||||||||
Revolving credit facility | Alternate Base Rate Loans | Maximum | |||||||||
Long-Term Debt | |||||||||
Margin prior to Collateral Release Date (as a percent) | 1.50% | ||||||||
Margin after Collateral Release Date (as a percent) | 1.00% | ||||||||
Revolving credit facility | Alternate Base Rate Loans | Prime rate | |||||||||
Long-Term Debt | |||||||||
Basis of variable interest rate | prime rate | ||||||||
Revolving credit facility | Alternate Base Rate Loans | Federal funds effective swap rate | |||||||||
Long-Term Debt | |||||||||
Basis of variable interest rate | Federal Funds Rate | ||||||||
Spread on variable rate basis (as a percent) | 0.50% | ||||||||
Revolving credit facility | Alternate Base Rate Loans | One month LIBOR | |||||||||
Long-Term Debt | |||||||||
Basis of variable interest rate | One month LIBOR | ||||||||
Spread on variable rate basis (as a percent) | 1.00% | ||||||||
Revolving credit facility | LIBO Rate Loans | Minimum | |||||||||
Long-Term Debt | |||||||||
Margin prior to Collateral Release Date (as a percent) | 1.50% | ||||||||
Margin after Collateral Release Date (as a percent) | 1.13% | ||||||||
Revolving credit facility | LIBO Rate Loans | Maximum | |||||||||
Long-Term Debt | |||||||||
Margin prior to Collateral Release Date (as a percent) | 2.50% | ||||||||
Margin after Collateral Release Date (as a percent) | 2.00% | ||||||||
Revolving credit facility | LIBO Rate Loans | One month LIBOR | |||||||||
Long-Term Debt | |||||||||
Basis of variable interest rate | LIBOR | ||||||||
Senior Notes | |||||||||
Long-Term Debt | |||||||||
Estimated aggregate fair value of debt | 4,297,000,000 | 4,297,000,000 | 4,297,000,000 | 3,563,000,000 | |||||
Senior Notes | 2020 Senior Notes, 6.75% interest, issued November 2010 and due November 2020 | |||||||||
Long-Term Debt | |||||||||
Long-term debt, net of discounts | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |||||
Debt instrument, stated interest rate percentage | 6.75% | 6.75% | 6.75% | 6.75% | |||||
Senior Notes | 2021 Senior Notes, 6.5% interest, issued February and March 2011 and due August 2021 | |||||||||
Long-Term Debt | |||||||||
Long-term debt, net of discounts | 324,603,000 | 324,603,000 | 324,603,000 | 324,587,000 | |||||
Debt instrument, stated interest rate percentage | 6.50% | 6.50% | 6.50% | 6.50% | |||||
Long-term debt, discounts | 397,000 | 397,000 | 397,000 | 413,000 | |||||
Senior Notes | 2022 Senior Notes, 6.25% interest, issued October 2011 and due June 2022 | |||||||||
Long-Term Debt | |||||||||
Long-term debt, net of discounts | 455,000,000 | 455,000,000 | 455,000,000 | 455,000,000 | |||||
Debt instrument, stated interest rate percentage | 6.25% | 6.25% | 6.25% | 6.25% | |||||
Senior Notes | 2023A Senior Notes, 5.5% interest, issued August 2012 and due February 2023 | |||||||||
Long-Term Debt | |||||||||
Long-term debt, net of discounts | 744,385,000 | 744,385,000 | 744,385,000 | 744,217,000 | |||||
Debt instrument, stated interest rate percentage | 5.50% | 5.50% | 5.50% | 5.50% | |||||
Long-term debt, discounts | 5,615,000 | 5,615,000 | 5,615,000 | 5,783,000 | |||||
Senior Notes | 2023B Senior Notes, 4.5% interest, issued January 2013 and due July 2023 | |||||||||
Long-Term Debt | |||||||||
Long-term debt, net of discounts | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |||||
Debt instrument, stated interest rate percentage | 4.50% | 4.50% | 4.50% | 4.50% | |||||
Senior Notes | 2024 Senior Notes, 4.875% interest, issued November 2014 and March 2015, due December 2024 | |||||||||
Long-Term Debt | |||||||||
Long-term debt, net of discounts | 1,160,475,000 | 1,160,475,000 | 1,160,475,000 | 500,000,000 | |||||
Debt instrument, stated interest rate percentage | 4.88% | 4.88% | 4.88% | ||||||
Long-term debt, premium | 10,475,000 | 10,475,000 | 10,475,000 | ||||||
Senior Notes | 2024 Senior Notes, 4.875% interest, issued March 2015 and due December 2024 | |||||||||
Long-Term Debt | |||||||||
Aggregate principal amount | 650,000,000 | 650,000,000 | 650,000,000 | ||||||
Proceeds from issuance of senior notes, net of underwriting fees and the other expenses of the offering | 653,600,000 | ||||||||
Senior Notes | 2024 Senior Notes, 4.875% interest, issued November 2014 and due December 2024 | |||||||||
Long-Term Debt | |||||||||
Debt instrument, stated interest rate percentage | 4.88% | ||||||||
Aggregate principal amount | $500,000,000 |
Equity_Details
Equity (Details) (USD $) | 3 Months Ended | 1 Months Ended | 5 Months Ended | |||
Share data in Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2013 | Nov. 30, 2014 | Mar. 31, 2015 |
Equity Offerings | ||||||
Proceeds from public equity offerings, net | $0 | $271,880,000 | ||||
Common Units | ||||||
Equity Offerings | ||||||
Aggregate common units sold (in units) | 4,249 | |||||
Distributions of Available Cash | ||||||
Distribution per common unit (in dollars per unit) | $0.91 | $0.90 | ||||
Common Units | ATM | ||||||
Equity Offerings | ||||||
Aggregate common units sold (in units) | 4,200 | |||||
Proceeds from public equity offerings, net | 272,000,000 | |||||
Common Units | September 2013 ATM | ||||||
Equity Offerings | ||||||
Aggregate common units sold (in units) | 4,200 | |||||
Proceeds from public equity offerings, net | 272,000,000 | |||||
Offering under program | 1,000,000,000 | |||||
Manager fees | 4,000,000 | |||||
Common Units | November 2014 ATM | ||||||
Equity Offerings | ||||||
Aggregate common units sold (in units) | 2,500 | |||||
Proceeds from public equity offerings, net | 175,000,000 | |||||
Offering under program | $1,500,000,000 | |||||
Class B Units | M & R | ||||||
Equity Offerings | ||||||
Conversion ratio | 1 | |||||
Number of installments | 3 | |||||
Number of anniversaries | 2 | |||||
Maximum | Common Units | ||||||
Distributions of Available Cash | ||||||
Common Unit Price (in dollars per share) | $69.16 | $77.31 | $69.16 | |||
Minimum | Common Units | ||||||
Distributions of Available Cash | ||||||
Common Unit Price (in dollars per share) | $54.04 | $58.67 | $54.04 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income tax | ||
(Loss) income before provision for income tax | $1,400 | $28,462 |
Federal income tax at statutory rate | -4,491 | 6,461 |
Permanent items | 9 | 21 |
State income taxes, net of federal benefit | -219 | 619 |
Federal and state tax rate change | 4,250 | |
Provision on income from Class A units | 580 | 1,195 |
Total provision for income tax | -4,121 | 12,546 |
Eliminations | ||
Income tax | ||
(Loss) income before provision for income tax | -682 | -5,103 |
Federal statutory rate (as a percent) | 0.00% | 0.00% |
Corporation | Reportable legal entities | ||
Income tax | ||
(Loss) income before provision for income tax | -12,830 | 18,459 |
Federal statutory rate (as a percent) | 35.00% | 35.00% |
Federal income tax at statutory rate | -4,491 | 6,461 |
Permanent items | 9 | 21 |
State income taxes, net of federal benefit | -384 | 463 |
Federal and state tax rate change | 4,250 | |
Provision on income from Class A units | 580 | 1,195 |
Total provision for income tax | -4,286 | 12,390 |
Partnership | Reportable legal entities | ||
Income tax | ||
(Loss) income before provision for income tax | 14,912 | 15,106 |
Federal statutory rate (as a percent) | 0.00% | 0.00% |
State income taxes, net of federal benefit | 165 | 156 |
Total provision for income tax | $165 | $156 |
Earnings_Per_Common_Unit_Detai
Earnings Per Common Unit (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Earnings (Loss) Per Common Unit | ||
Net (loss) income attributable to the Partnership's unitholders | ($9,083,000) | $12,492,000 |
Less: Income allocable to phantom units | 642,000 | 545,000 |
(Loss) income available for common unitholders - basic | -9,725,000 | 11,947,000 |
Add: Income allocable to phantom units and DER expense | 568,000 | |
(Loss) income available for common unitholders - diluted | -9,725,000 | 12,515,000 |
Weighted average common units outstanding-basic (in units) | 186,685,000 | 158,808,000 |
Potential common shares (Class B and phantom units) | 16,680,000 | |
Weighted average common units outstanding-diluted (in units) | 186,685,000 | 175,488,000 |
Net (loss) income attributable to the Partnership's common unitholders per common unit: | ||
Basic (in dollars per unit) | ($0.05) | $0.08 |
Diluted (in dollars per unit) | ($0.05) | $0.07 |
Income allocable to phantom units and DER expense excluded from the calculation | 674,000 | |
Potential common shares excluded from calculation as anti-dilutive (in units) | 12,735,000 | |
Class B Units | ||
Earnings (Loss) Per Common Unit | ||
Net (loss) income attributable to the Partnership's unitholders | $0 | $0 |
Net (loss) income attributable to the Partnership's common unitholders per common unit: | ||
Basic (in dollars per unit) | $0 | $0 |
Diluted (in dollars per unit) | $0 | $0 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Segment information | ||
Segment purchased product costs | $123,484 | $211,564 |
Segment facility expenses | 91,816 | 83,705 |
Income from operations | 52,532 | 72,001 |
Capital expenditures | 438,271 | 587,120 |
Total segments | ||
Segment information | ||
Segment revenue | 482,331 | 517,936 |
Segment purchased product costs | 123,484 | 211,564 |
Net operating margin | 358,847 | 306,372 |
Segment facility expenses | 100,771 | 85,389 |
Segment portion of operating income (loss) attributable to non-controlling interests | 21,654 | 3,135 |
Income from operations | 236,422 | 217,848 |
Capital expenditures | 535,567 | 582,525 |
Intersegment Eliminations | ||
Segment information | ||
Segment revenue | -44 | -1,571 |
Net operating margin | -44 | -1,571 |
Segment facility expenses | -44 | -1,571 |
Adjustments for unconsolidated affiliates | ||
Segment information | ||
Segment portion of operating income (loss) attributable to non-controlling interests | -10,240 | |
Capital expenditures | -100,878 | |
Not allocated to segments | ||
Segment information | ||
Capital expenditures | 3,582 | 4,595 |
Marcellus | Total segments | ||
Segment information | ||
Segment revenue | 197,176 | 175,159 |
Segment purchased product costs | 6,502 | 34,290 |
Net operating margin | 190,674 | 140,869 |
Segment facility expenses | 43,382 | 35,473 |
Income from operations | 147,292 | 105,396 |
Capital expenditures | 314,559 | 360,598 |
Utica Segment | Total segments | ||
Segment information | ||
Segment revenue | 58,911 | 23,766 |
Segment purchased product costs | 181 | 4,135 |
Net operating margin | 58,730 | 19,631 |
Segment facility expenses | 16,638 | 11,852 |
Segment portion of operating income (loss) attributable to non-controlling interests | 20,107 | 3,136 |
Income from operations | 21,985 | 4,643 |
Capital expenditures | 179,218 | 181,332 |
Utica Segment | Adjustments for unconsolidated affiliates | ||
Segment information | ||
Capital expenditures | 97,900 | |
Northeast Segment | Total segments | ||
Segment information | ||
Segment revenue | 30,021 | 61,253 |
Segment purchased product costs | 12,518 | 20,455 |
Net operating margin | 17,503 | 40,798 |
Segment facility expenses | 6,878 | 7,114 |
Income from operations | 10,625 | 33,684 |
Capital expenditures | 1,205 | 463 |
Southwest Segment | Total segments | ||
Segment information | ||
Segment revenue | 196,267 | 259,329 |
Segment purchased product costs | 104,283 | 152,684 |
Net operating margin | 91,984 | 106,645 |
Segment facility expenses | 33,917 | 32,521 |
Segment portion of operating income (loss) attributable to non-controlling interests | 1,547 | -1 |
Income from operations | 56,520 | 74,125 |
Capital expenditures | 40,585 | 40,132 |
Southwest Segment | Adjustments for unconsolidated affiliates | ||
Segment information | ||
Capital expenditures | $3,000 |
Segment_Information_Details_2
Segment Information (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Segment information | ||
Derivative gain (loss) | $7,368 | ($3,967) |
Total revenue | 467,330 | 512,476 |
Total segments | ||
Segment information | ||
Total segment revenue | 482,331 | 517,936 |
Not allocated to segments | ||
Segment information | ||
Derivative gain (loss) | 7,368 | -3,967 |
Adjustments for unconsolidated affiliates | ||
Segment information | ||
Total revenue | -27,531 | |
Reconciling adjustments | ||
Segment information | ||
Revenue deferral adjustment and other | $5,162 | ($1,493) |
Segment_Information_Details_3
Segment Information (Details 3) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Segment information | ||
Income from operations | $52,532 | $72,001 |
Revenue | 467,330 | 512,476 |
Selling, general and administrative expenses | -34,635 | -35,290 |
Depreciation | -119,592 | -101,929 |
Amortization of intangible assets | -15,826 | -15,978 |
Impairment expense | -25,523 | 0 |
Gain on disposal of property, plant and equipment | 811 | 93 |
Accretion of asset retirement obligations | -193 | -168 |
Earnings from unconsolidated affiliates | 512 | 250 |
Interest expense | -50,057 | -40,984 |
Amortization of deferred financing costs and debt discount (a component of interest expense) | -1,635 | -2,824 |
Miscellaneous income, net | 48 | 19 |
Income before provision for income tax | 1,400 | 28,462 |
Total segments | ||
Segment information | ||
Income from operations | 236,422 | 217,848 |
Portion of operating income attributable to non-controlling interests | -21,654 | -3,135 |
Reconciling adjustments | ||
Segment information | ||
Portion of operating income attributable to non-controlling interests | 11,414 | 3,135 |
Revenue deferral adjustment | -922 | -1,493 |
Facility expenses adjustments | 2,688 | 2,688 |
Adjustments for unconsolidated affiliates | ||
Segment information | ||
Portion of operating income attributable to non-controlling interests | 10,240 | |
Revenue | -27,531 | |
Facility expense, operational service fees and purchased product cost adjustments | 13,458 | |
Not allocated to segments | ||
Segment information | ||
Derivative gain not allocated to segments | 2,828 | 4,099 |
Compensation expense included in facility expenses not allocated to segments | -1,107 | -1,004 |
Selling, general and administrative expenses | -34,635 | -35,290 |
Depreciation | -119,592 | -101,929 |
Amortization of intangible assets | -15,826 | -15,978 |
Gain on disposal of property, plant and equipment | 811 | 93 |
Accretion of asset retirement obligations | ($193) | ($168) |
Segment_Information_Details_4
Segment Information (Details 4) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Segment information | ||
Management fee revenues unconsolidated affiliate | $6.10 | $0.60 |
Southwest Segment | ||
Segment information | ||
Revenue deferral adjustment | 0.1 | 0.2 |
Northeast Segment | ||
Segment information | ||
Revenue deferral adjustment | $0.80 | $1.90 |
Segment_Information_Details_5
Segment Information (Details 5) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||||
Segment Assets | ||||
Certain cash and cash equivalents | $236,284 | $108,887 | $123,481 | $85,305 |
Fair value of derivatives | 29,455 | 37,428 | ||
Investment in unconsolidated affiliates | 838,766 | 805,633 | ||
Total assets | 11,273,767 | 10,980,778 | ||
Total segments | ||||
Segment Assets | ||||
Total assets | 11,020,248 | 10,720,981 | ||
Not allocated to segments | ||||
Segment Assets | ||||
Certain cash and cash equivalents | 71,509 | |||
Fair value of derivatives | 29,455 | 37,428 | ||
Investment in unconsolidated affiliates | 50,000 | 108,849 | ||
Other | 102,555 | 113,520 | ||
Marcellus | Total segments | ||||
Segment Assets | ||||
Total assets | 5,924,190 | 5,749,932 | ||
Utica Segment | Total segments | ||||
Segment Assets | ||||
Total assets | 2,278,054 | 2,163,025 | ||
Northeast Segment | Total segments | ||||
Segment Assets | ||||
Total assets | 436,303 | 445,911 | ||
Southwest Segment | Total segments | ||||
Segment Assets | ||||
Total assets | $2,381,701 | $2,362,113 |
Supplemental_Condensed_Consoli2
Supplemental Condensed Consolidating Financial Information (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||||
Cash and cash equivalents | 236,284 | $108,887 | $123,481 | $85,305 |
Restricted cash | 10,000 | 20,000 | ||
Receivables and other current assets | 326,607 | 380,748 | ||
Receivables from unconsolidated affiliates, net | 5,669 | 7,097 | ||
Fair value of derivative instruments | 19,164 | 20,921 | ||
Total current assets | 597,724 | 537,653 | ||
Total property, plant and equipment, net | 8,888,937 | 8,652,900 | ||
Other long-term assets: | ||||
Investment in unconsolidated affiliates | 838,766 | 805,633 | ||
Intangibles, net of accumulated amortization | 776,532 | 809,277 | ||
Fair value of derivative instruments | 10,291 | 16,507 | ||
Other long-term assets | 161,517 | 158,808 | ||
Total assets | 11,273,767 | 10,980,778 | ||
Current liabilities: | ||||
Fair value of derivative instruments | 187 | 0 | ||
Payables to unconsolidated affiliates | 11,295 | 8,621 | ||
Other current liabilities | 508,011 | 631,242 | ||
Total current liabilities | 519,493 | 639,863 | ||
Deferred income taxes | 353,351 | 357,260 | ||
Long-term debt, net of discounts | 4,184,463 | 3,621,404 | ||
Other long-term liabilities | 165,632 | 169,012 | ||
Redeemable non-controlling interest | 131,565 | 235,617 | ||
Equity: | ||||
Non-controlling interest in consolidated subsidiaries | 1,015,034 | 983,477 | ||
Total equity | 6,050,828 | 6,193,239 | 5,042,731 | 4,798,133 |
Total liabilities and equity | 11,273,767 | 10,980,778 | ||
Common Units | ||||
Equity: | ||||
Common units or Class B units | 4,584,275 | 4,758,243 | ||
Total equity | 4,584,275 | 4,758,243 | 3,613,507 | 3,476,295 |
Class B Units | ||||
Equity: | ||||
Common units or Class B units | 451,519 | 451,519 | ||
Total equity | 451,519 | 451,519 | 602,025 | 602,025 |
Guarantor Subsidiaries | ||||
Condensed Consolidating Balance Sheets | ||||
Percentage of Partnership interest in subsidiaries guaranteeing the Senior Notes | 100.00% | |||
Reportable legal entities | Parent | ||||
Current assets: | ||||
Cash and cash equivalents | 61,000 | 224 | ||
Receivables and other current assets | 1,563 | 1,219 | ||
Receivables from unconsolidated affiliates, net | 247 | |||
Intercompany receivables | 868,412 | 633,994 | ||
Total current assets | 930,975 | 635,460 | ||
Total property, plant and equipment, net | 10,346 | 9,992 | ||
Other long-term assets: | ||||
Investment in consolidated affiliates | 8,040,510 | 7,990,532 | ||
Intercompany notes receivable | 213,100 | 186,100 | ||
Other long-term assets | 58,167 | 52,825 | ||
Total assets | 9,253,098 | 8,874,909 | ||
Current liabilities: | ||||
Intercompany payables | 111 | 3,287 | ||
Other current liabilities | 67,170 | 69,552 | ||
Total current liabilities | 67,281 | 72,839 | ||
Deferred income taxes | 6,328 | 6,162 | ||
Long-term debt, net of discounts | 4,184,463 | 3,621,404 | ||
Other long-term liabilities | 8,633 | 8,794 | ||
Equity: | ||||
Total equity | 4,986,393 | 5,165,710 | ||
Total liabilities and equity | 9,253,098 | 8,874,909 | ||
Reportable legal entities | Parent | Common Units | ||||
Equity: | ||||
Common units or Class B units | 4,534,874 | 4,714,191 | ||
Reportable legal entities | Parent | Class B Units | ||||
Equity: | ||||
Common units or Class B units | 451,519 | 451,519 | ||
Reportable legal entities | Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 13,350 | 119,069 | 79,363 | |
Receivables and other current assets | 191,268 | 225,695 | ||
Receivables from unconsolidated affiliates, net | 2,859 | 3,001 | ||
Intercompany receivables | 25,324 | 24,683 | ||
Fair value of derivative instruments | 16,351 | 17,386 | ||
Total current assets | 249,152 | 270,765 | ||
Total property, plant and equipment, net | 2,136,418 | 2,140,565 | ||
Other long-term assets: | ||||
Investment in unconsolidated affiliates | 85,791 | 82,616 | ||
Investment in consolidated affiliates | 6,837,186 | 6,500,008 | ||
Intangibles, net of accumulated amortization | 517,991 | 546,637 | ||
Fair value of derivative instruments | 10,291 | 16,507 | ||
Other long-term assets | 26,651 | 29,412 | ||
Total assets | 9,863,480 | 9,586,510 | ||
Current liabilities: | ||||
Intercompany payables | 948,971 | 729,714 | ||
Fair value of derivative instruments | 165 | |||
Payables to unconsolidated affiliates | 39 | |||
Other current liabilities | 164,654 | 177,269 | ||
Total current liabilities | 1,113,829 | 906,983 | ||
Deferred income taxes | 347,023 | 351,098 | ||
Long-term intercompany financing payable | 213,100 | 186,100 | ||
Other long-term liabilities | 149,018 | 151,797 | ||
Equity: | ||||
Total equity | 8,040,510 | 7,990,532 | ||
Total liabilities and equity | 9,863,480 | 9,586,510 | ||
Reportable legal entities | Guarantor Subsidiaries | Common Units | ||||
Equity: | ||||
Common units or Class B units | 8,040,510 | 7,990,532 | ||
Reportable legal entities | Non-Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 161,934 | 108,887 | 4,412 | 5,718 |
Restricted cash | 10,000 | 20,000 | ||
Receivables and other current assets | 133,776 | 153,834 | ||
Receivables from unconsolidated affiliates, net | 2,810 | 3,849 | ||
Intercompany receivables | 85,970 | 178,109 | ||
Fair value of derivative instruments | 2,813 | 3,535 | ||
Total current assets | 397,303 | 468,214 | ||
Total property, plant and equipment, net | 6,784,889 | 6,550,040 | ||
Other long-term assets: | ||||
Investment in unconsolidated affiliates | 763,051 | 733,226 | ||
Intangibles, net of accumulated amortization | 258,541 | 262,640 | ||
Other long-term assets | 76,699 | 76,571 | ||
Total assets | 8,280,483 | 8,090,691 | ||
Current liabilities: | ||||
Intercompany payables | 30,624 | 103,787 | ||
Fair value of derivative instruments | 22 | |||
Payables to unconsolidated affiliates | 11,256 | 8,621 | ||
Other current liabilities | 278,659 | 386,821 | ||
Total current liabilities | 320,561 | 499,229 | ||
Long-term intercompany financing payable | 94,415 | 95,061 | ||
Other long-term liabilities | 7,981 | 8,421 | ||
Equity: | ||||
Total equity | 7,857,526 | 7,487,980 | ||
Total liabilities and equity | 8,280,483 | 8,090,691 | ||
Reportable legal entities | Non-Guarantor Subsidiaries | Common Units | ||||
Equity: | ||||
Common units or Class B units | 7,857,526 | 7,487,980 | ||
Eliminations | ||||
Current assets: | ||||
Intercompany receivables | -979,706 | -836,786 | ||
Total current assets | -979,706 | -836,786 | ||
Total property, plant and equipment, net | -42,716 | -47,697 | ||
Other long-term assets: | ||||
Investment in unconsolidated affiliates | -10,076 | -10,209 | ||
Investment in consolidated affiliates | -14,877,696 | -14,490,540 | ||
Intercompany notes receivable | -213,100 | -186,100 | ||
Total assets | -16,123,294 | -15,571,332 | ||
Current liabilities: | ||||
Intercompany payables | -979,706 | -836,788 | ||
Other current liabilities | -2,472 | -2,400 | ||
Total current liabilities | -982,178 | -839,188 | ||
Long-term intercompany financing payable | -307,515 | -281,161 | ||
Equity: | ||||
Non-controlling interest in consolidated subsidiaries | 1,015,034 | 983,477 | ||
Total equity | -14,833,601 | -14,450,983 | ||
Total liabilities and equity | -16,123,294 | -15,571,332 | ||
Eliminations | Common Units | ||||
Equity: | ||||
Common units or Class B units | -15,848,635 | ($15,434,460) |
Supplemental_Condensed_Consoli3
Supplemental Condensed Consolidating Financial Information (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Condensed Consolidating Statements of Operations | ||
Total revenue | $467,330 | $512,476 |
Operating expenses: | ||
Purchased product costs | 128,024 | 203,766 |
Facility expenses | 91,816 | 83,437 |
Selling, general and administrative expenses | 34,635 | 35,290 |
Depreciation and amortization | 135,418 | 117,907 |
Other operating (income) expenses | -618 | 75 |
Impairment expense | 25,523 | 0 |
Total operating expenses | 414,798 | 440,475 |
Income from operations | 52,532 | 72,001 |
Other expense, net | -51,132 | -43,539 |
Income before provision for income tax | 1,400 | 28,462 |
Provision for income tax expense (benefit) | -4,121 | 12,546 |
Net income | 5,521 | 15,916 |
Net loss attributable to non-controlling interest | -14,604 | -3,424 |
Net (loss) income attributable to the Partnership's unitholders | -9,083 | 12,492 |
Reportable legal entities | Parent | ||
Operating expenses: | ||
Selling, general and administrative expenses | 13,532 | 13,655 |
Depreciation and amortization | 324 | 280 |
Total operating expenses | 13,856 | 13,935 |
Income from operations | -13,856 | -13,935 |
Earnings from consolidated affiliates | 50,268 | 67,710 |
Other expense, net | -50,311 | -43,162 |
Income before provision for income tax | -13,899 | 10,613 |
Provision for income tax expense (benefit) | 165 | 157 |
Net income | -14,064 | 10,456 |
Net (loss) income attributable to the Partnership's unitholders | -14,064 | 10,456 |
Reportable legal entities | Guarantor Subsidiaries | ||
Condensed Consolidating Statements of Operations | ||
Total revenue | 241,325 | 325,501 |
Operating expenses: | ||
Purchased product costs | 121,331 | 165,183 |
Facility expenses | 38,000 | 37,033 |
Selling, general and administrative expenses | 15,784 | 10,516 |
Depreciation and amortization | 50,944 | 49,120 |
Other operating (income) expenses | 629 | -159 |
Impairment expense | 25,523 | |
Total operating expenses | 252,211 | 261,693 |
Income from operations | -10,886 | 63,808 |
Earnings from consolidated affiliates | 62,468 | 22,389 |
Other expense, net | -5,599 | -6,098 |
Income before provision for income tax | 45,983 | 80,099 |
Provision for income tax expense (benefit) | -4,286 | 12,389 |
Net income | 50,269 | 67,710 |
Net (loss) income attributable to the Partnership's unitholders | 50,269 | 67,710 |
Reportable legal entities | Non-Guarantor Subsidiaries | ||
Condensed Consolidating Statements of Operations | ||
Total revenue | 231,927 | 199,118 |
Operating expenses: | ||
Purchased product costs | 6,693 | 38,583 |
Facility expenses | 50,885 | 48,371 |
Selling, general and administrative expenses | 9,745 | 13,349 |
Depreciation and amortization | 85,222 | 69,813 |
Other operating (income) expenses | -1,247 | 234 |
Total operating expenses | 151,298 | 170,350 |
Income from operations | 80,629 | 28,768 |
Other expense, net | -3,557 | -2,956 |
Income before provision for income tax | 77,072 | 25,812 |
Net income | 77,072 | 25,812 |
Net (loss) income attributable to the Partnership's unitholders | 77,072 | 25,812 |
Eliminations | ||
Condensed Consolidating Statements of Operations | ||
Total revenue | -5,922 | -12,143 |
Operating expenses: | ||
Facility expenses | 2,931 | -1,967 |
Selling, general and administrative expenses | -4,426 | -2,230 |
Depreciation and amortization | -1,072 | -1,306 |
Total operating expenses | -2,567 | -5,503 |
Income from operations | -3,355 | -6,640 |
Earnings from consolidated affiliates | -112,736 | -90,099 |
Other expense, net | 8,335 | 8,677 |
Income before provision for income tax | -107,756 | -88,062 |
Net income | -107,756 | -88,062 |
Net loss attributable to non-controlling interest | -14,604 | -3,424 |
Net (loss) income attributable to the Partnership's unitholders | ($122,360) | ($91,486) |
Supplemental_Condensed_Consoli4
Supplemental Condensed Consolidating Financial Information (Details 3) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Condensed Consolidating Statements of Cash Flows | ||
Net cash (used in) provided by operating activities | $200,934 | $112,373 |
Cash flows from investing activities: | ||
Restricted cash | 10,000 | 0 |
Capital expenditures | -438,271 | -587,120 |
Investment in unconsolidated affiliates | -47,426 | -7,498 |
Proceeds from disposal of property, plant and equipment | 857 | 19,144 |
Net cash flows used in investing activities | -474,840 | -575,474 |
Cash flows from financing activities: | ||
Proceeds from public equity offerings, net | 0 | 271,880 |
Proceeds from Credit Facility | 601,900 | 377,300 |
Payments of Credit Facility | -699,500 | 0 |
Proceeds from long-term debt | 660,563 | 0 |
Payments for debt issuance costs, deferred financing costs and registration costs | -7,000 | -1,890 |
Proceeds from sale of equity interest in consolidated subsidiary | 10,823 | 0 |
Contributions from non-controlling interest | 19,571 | 0 |
Payments of SMR liability | -652 | -594 |
Share-based payment activity | -6,117 | -8,924 |
Payment of distributions | -178,285 | -136,495 |
Net cash flows provided by financing activities | 401,303 | 501,277 |
Net increase in cash and cash equivalents | 127,397 | 38,176 |
Cash and cash equivalents at beginning of period | 108,887 | 85,305 |
Cash and cash equivalents at end of period | 236,284 | 123,481 |
Reportable legal entities | Parent | ||
Condensed Consolidating Statements of Cash Flows | ||
Net cash (used in) provided by operating activities | -61,211 | -56,688 |
Cash flows from investing activities: | ||
Capital expenditures | -695 | -3,512 |
Equity investment in consolidated affiliates | -17,640 | -14,243 |
Intercompany advances, net | -235,245 | -445,203 |
Distributions from consolidated affiliates | 21,663 | 35,861 |
Investment in intercompany notes receivable, net | -27,000 | -18,400 |
Net cash flows used in investing activities | -258,917 | -445,497 |
Cash flows from financing activities: | ||
Proceeds from public equity offerings, net | 271,880 | |
Proceeds from Credit Facility | 601,900 | 377,300 |
Payments of Credit Facility | -699,500 | |
Proceeds from long-term debt | 660,563 | |
Payments for debt issuance costs, deferred financing costs and registration costs | -7,000 | -1,890 |
Share-based payment activity | -6,117 | -8,924 |
Payment of distributions | -168,718 | -136,405 |
Net cash flows provided by financing activities | 381,128 | 501,961 |
Net increase in cash and cash equivalents | 61,000 | -224 |
Cash and cash equivalents at beginning of period | 224 | |
Cash and cash equivalents at end of period | 61,000 | |
Reportable legal entities | Guarantor Subsidiaries | ||
Condensed Consolidating Statements of Cash Flows | ||
Net cash (used in) provided by operating activities | 59,387 | 103,777 |
Cash flows from investing activities: | ||
Capital expenditures | -40,384 | -51,417 |
Equity investment in consolidated affiliates | -408,037 | -522,200 |
Investment in unconsolidated affiliates | -6,632 | -7,498 |
Distributions from consolidated affiliates | 138,750 | 73,610 |
Proceeds from disposal of property, plant and equipment | 19 | 2,043 |
Net cash flows used in investing activities | -316,284 | -505,462 |
Cash flows from financing activities: | ||
Payments related to intercompany financing, net | 27,000 | 18,400 |
Contributions from Parent and affiliates | 17,640 | 14,243 |
Payments of SMR liability | -652 | -594 |
Payment of distributions | -21,663 | -35,861 |
Intercompany advances, net | 247,922 | 445,203 |
Net cash flows provided by financing activities | 270,247 | 441,391 |
Net increase in cash and cash equivalents | 13,350 | 39,706 |
Cash and cash equivalents at beginning of period | 79,363 | |
Cash and cash equivalents at end of period | 13,350 | 119,069 |
Reportable legal entities | Non-Guarantor Subsidiaries | ||
Condensed Consolidating Statements of Cash Flows | ||
Net cash (used in) provided by operating activities | 198,899 | 64,456 |
Cash flows from investing activities: | ||
Restricted cash | 10,000 | |
Capital expenditures | -393,117 | -530,853 |
Intercompany advances, net | -12,320 | |
Investment in unconsolidated affiliates | -40,794 | |
Proceeds from disposal of property, plant and equipment | 838 | 17,101 |
Net cash flows used in investing activities | -435,393 | -513,752 |
Cash flows from financing activities: | ||
Payments related to intercompany financing, net | -573 | -510 |
Proceeds from sale of equity interest in consolidated subsidiary | 10,823 | |
Contributions from non-controlling interest | 19,571 | |
Contributions from Parent and affiliates | 408,037 | 522,200 |
Payment of distributions | -148,317 | -73,700 |
Net cash flows provided by financing activities | 289,541 | 447,990 |
Net increase in cash and cash equivalents | 53,047 | -1,306 |
Cash and cash equivalents at beginning of period | 108,887 | 5,718 |
Cash and cash equivalents at end of period | 161,934 | 4,412 |
Eliminations | ||
Condensed Consolidating Statements of Cash Flows | ||
Net cash (used in) provided by operating activities | 3,859 | 828 |
Cash flows from investing activities: | ||
Capital expenditures | -4,075 | -1,338 |
Equity investment in consolidated affiliates | 425,677 | 536,443 |
Intercompany advances, net | 247,565 | 445,203 |
Distributions from consolidated affiliates | -160,413 | -109,471 |
Investment in intercompany notes receivable, net | 27,000 | 18,400 |
Net cash flows used in investing activities | 535,754 | 889,237 |
Cash flows from financing activities: | ||
Payments related to intercompany financing, net | -26,427 | -17,890 |
Contributions from Parent and affiliates | -425,677 | -536,443 |
Payment of distributions | 160,413 | 109,471 |
Intercompany advances, net | -247,922 | -445,203 |
Net cash flows provided by financing activities | ($539,613) | ($890,065) |
Supplemental_Cash_Flow_Informa2
Supplemental Cash Flow Information (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Supplemental Cash Flow Information | ||
Cash paid for interest, net of amounts capitalized | $43,262,000 | $51,622,000 |
Cash paid (received) for income taxes, net | -149,000 | -183,000 |
Supplemental schedule of non-cash investing and financing activities: | ||
Amounts payable for property, plant and equipment(1) | 276,046,000 | 553,370,000 |
Interest capitalized on construction in progress | 5,556,000 | 5,936,000 |
Issuance of common units for vesting of share-based payment awards | 12,044,000 | 7,720,000 |
Accrued property, plant and equipment | $157,100,000 |