Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 31, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | TransMontaigne Partners L.P. | |
Entity Central Index Key | 1,319,229 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 16,124,566 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
Consolidated balance sheets
Consolidated balance sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 5,046 | $ 3,304 |
Trade accounts receivable, net | 10,047 | 9,359 |
Due from affiliates | 852 | 1,316 |
Other current assets | 2,379 | 3,065 |
Total current assets | 18,324 | 17,044 |
Property, plant and equipment, net | 386,737 | 385,301 |
Goodwill | 8,485 | 8,485 |
Investments in unconsolidated affiliates | 249,297 | 249,676 |
Other assets, net | 3,940 | 3,551 |
TOTAL ASSETS | 666,783 | 664,057 |
Current liabilities: | ||
Trade accounts payable | 5,290 | 6,887 |
Due to affiliates | 115 | |
Accrued liabilities | 11,531 | 9,835 |
Total current liabilities | 16,936 | 16,722 |
Other liabilities | 3,301 | 3,870 |
Long-term debt | 257,000 | 252,000 |
Total liabilities | $ 277,237 | $ 272,592 |
Commitments and contingencies (Note 16) | ||
Partners' equity: | ||
Common unitholders (16,124,566 units issued and outstanding at June 30, 2015 and December 31, 2014) | $ 331,759 | $ 333,619 |
General partner interest (2% interest with 329,073 equivalent units outstanding at June 30, 2015 and December 31, 2014) | 57,787 | 57,846 |
Total partners' equity | 389,546 | 391,465 |
TOTAL LIABILITIES AND EQUITY | $ 666,783 | $ 664,057 |
Consolidated balance sheets (Pa
Consolidated balance sheets (Parenthetical) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Consolidated balance sheets | ||
Common unitholders, units issued | 16,124,566 | 16,124,566 |
Common unitholders, units outstanding | 16,124,566 | 16,124,566 |
General partner interest (as a percent) | 2.00% | 2.00% |
General partner interest, equivalent units outstanding | 329,073 | 329,073 |
Consolidated statements of oper
Consolidated statements of operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenue: | ||||
External customers | $ 26,754 | $ 15,474 | $ 52,053 | $ 29,097 |
Affiliates | 10,280 | 23,885 | 22,878 | 48,315 |
Total revenue | 37,034 | 39,359 | 74,931 | 77,412 |
Operating costs and expenses and other: | ||||
Direct operating costs and expenses | (15,872) | (16,396) | (30,826) | (31,788) |
Direct general and administrative expenses | (672) | (462) | (1,693) | (1,380) |
Allocated general and administrative expenses | (2,802) | (2,782) | (5,605) | (5,564) |
Allocated insurance expense | (934) | (913) | (1,868) | (1,827) |
Reimbursement of bonus awards expense | (539) | (375) | (1,064) | (750) |
Depreciation and amortization | (7,476) | (7,396) | (14,813) | (14,796) |
Earnings from unconsolidated affiliates | 5,517 | 1,275 | 7,573 | 1,438 |
Total operating costs and expenses and other | (22,778) | (27,049) | (48,296) | (54,667) |
Operating income | 14,256 | 12,310 | 26,635 | 22,745 |
Other expenses: | ||||
Interest expense | (1,943) | (1,226) | (3,885) | (2,179) |
Amortization of deferred financing costs | (125) | (244) | (440) | (488) |
Total other expenses | 2,068 | 1,470 | 4,325 | 2,667 |
Net earnings | 12,188 | 10,840 | 22,310 | 20,078 |
Less-earnings allocable to general partner interest including incentive distribution rights | (1,893) | (1,865) | (3,743) | (3,621) |
Net earnings allocable to limited partners | $ 10,295 | $ 8,975 | $ 18,567 | $ 16,457 |
Net earnings per limited partner unit-basic (in dollars per unit) | $ 0.64 | $ 0.56 | $ 1.15 | $ 1.02 |
Net earnings per limited partner unit-diluted (in dollars per unit) | $ 0.64 | $ 0.56 | $ 1.15 | $ 1.02 |
Consolidated statements of part
Consolidated statements of partners' equity - USD ($) $ in Thousands | Common unitholders | General partner equivalent units | Total |
Balance at Dec. 31, 2013 | $ 350,505 | $ 57,962 | $ 408,467 |
Increase (Decrease) in Partners' Capital | |||
Distributions to unitholders | (42,561) | (7,283) | (49,844) |
Equity-based compensation | 721 | 721 | |
Purchase of common units by our long-term incentive plan and from affiliate | (342) | (342) | |
Net earnings | 25,296 | 7,167 | 32,463 |
Balance at Dec. 31, 2014 | 333,619 | 57,846 | 391,465 |
Increase (Decrease) in Partners' Capital | |||
Distributions to unitholders | (21,445) | (3,802) | (25,247) |
Equity-based compensation | 1,110 | 1,110 | |
Purchase of common units by our long-term incentive plan and from affiliate | (92) | (92) | |
Net earnings | 18,567 | 3,743 | 22,310 |
Balance at Jun. 30, 2015 | $ 331,759 | $ 57,787 | $ 389,546 |
Consolidated statements of par6
Consolidated statements of partners' equity (Parenthetical) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Consolidated statements of partners' equity | ||
Purchase of common units by our long-term incentive plan and from affiliate (in units) | 2,668 | 8,004 |
Issuance of common units due to vesting of restricted phantom units (in units) | 20,500 |
Consolidated statements of cash
Consolidated statements of cash flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||||
Net earnings | $ 12,188 | $ 10,840 | $ 22,310 | $ 20,078 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||
Depreciation and amortization | 7,476 | 7,396 | 14,813 | 14,796 |
Earnings from unconsolidated affiliates | (5,517) | (1,275) | (7,573) | (1,438) |
Distributions from unconsolidated affiliates | 4,310 | 1,688 | 7,952 | 2,438 |
Equity-based compensation | 1,087 | 62 | 1,110 | 114 |
Amortization of deferred financing costs | 125 | 244 | 440 | 488 |
Amortization of deferred revenue | (258) | (671) | (567) | (1,411) |
Unrealized loss (gain) on derivative instrument | (59) | 90 | ||
Changes in operating assets and liabilities: | ||||
Trade accounts receivable, net | (1,286) | (1,518) | (688) | (2,119) |
Due from affiliates | 342 | (968) | 464 | (1,192) |
Other current assets | 393 | 38 | 686 | 229 |
Amounts due under long-term terminaling services agreements, net | 298 | 336 | 339 | 613 |
Trade accounts payable | (588) | 452 | (1,991) | (205) |
Due to affiliates | 115 | (57) | 115 | |
Accrued liabilities | 521 | (927) | 1,696 | (5,401) |
Net cash provided by operating activities | 19,147 | 15,640 | 39,196 | 26,990 |
Cash flows from investing activities: | ||||
Investments in unconsolidated affiliates | (5,380) | (23,397) | ||
Capital expenditures | (9,010) | (889) | (15,754) | (2,612) |
Net cash used in investing activities | (9,010) | (6,269) | (15,754) | (26,009) |
Cash flows from financing activities: | ||||
Borrowings of debt under credit facility | 17,200 | 17,000 | 38,000 | 56,000 |
Repayments of debt under credit facility | (10,200) | (17,000) | (33,000) | (34,000) |
Deferred debt issuance costs | (364) | (1,361) | ||
Distributions paid to unitholders | (12,623) | (12,462) | (25,247) | (24,598) |
Purchase of common units by our long-term incentive plan | (22) | (92) | (92) | (177) |
Net cash provided by (used in) financing activities | (6,009) | (12,554) | (21,700) | (2,775) |
Increase (decrease) in cash and cash equivalents | 4,128 | (3,183) | 1,742 | (1,794) |
Cash and cash equivalents at beginning of period | 918 | 4,652 | 3,304 | 3,263 |
Cash and cash equivalents at end of period | 5,046 | 1,469 | 5,046 | 1,469 |
Supplemental disclosures of cash flow information: | ||||
Cash paid for interest | 1,910 | 1,240 | 3,525 | 2,185 |
Property, plant and equipment acquired with accounts payable | $ 1,669 | $ 75 | $ 1,669 | $ 75 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Nature of business TransMontaigne Partners L.P. (“Partners,” “we,” “us” or “our”) was formed in February 2005 as a Delaware limited partnership initially to own and operate refined petroleum products terminaling and transportation facilities. We conduct our operations in the United States along the Gulf Coast, in the Midwest, in Houston and Brownsville, Texas, along the Mississippi and Ohio rivers, and in the Southeast. We provide integrated terminaling, storage, transportation and related services for companies engaged in the trading, distribution and marketing of light refined petroleum products, heavy refined petroleum products, crude oil, chemicals, fertilizers and other liquid products. We are controlled by our general partner, TransMontaigne GP L.L.C. (“TransMontaigne GP”), which is an indirect wholly ‑owned subsidiary of TransMontaigne LLC. At June 30, 2015, NGL Energy Partners LP (“NGL”) owned all of the issued and outstanding capital stock of TransMontaigne LLC, and as a result NGL is the indirect owner of our general partner. At June 30, 2015, TransMontaigne LLC and NGL had a significant interest in our partnership through their indirect ownership of an approximate 19% limited partner interest, a 2% general partner interest and the incentive distribution rights. Prior to July 1, 2014, Morgan Stanley Capital Group Inc. (“Morgan Stanley Capital Group”), a wholly ‑owned subsidiary of Morgan Stanley and the principal commodities trading arm of Morgan Stanley, owned all of the issued and outstanding capital stock of TransMontaigne LLC, and, as a result, Morgan Stanley was the indirect owner of our general partner. Effective July 1, 2014, Morgan Stanley consummated the sale of its 100% ownership interest in TransMontaigne LLC to NGL. In addition to the sale of our general partner to NGL, NGL acquired the common units owned by TransMontaigne LLC and affiliates of Morgan Stanley and assumed Morgan Stanley Capital Group’s obligations under our light-oil terminaling services agreements in Florida and the Southeast regions, excluding the Collins/Purvis tankage (collectively, the “NGL Acquisition”). All other terminaling services agreements with Morgan Stanley Capital Group remained with Morgan Stanley Capital Group. The NGL Acquisition did not involve the sale or purchase of any of our common units held by the public and our common units continue to trade on the New York Stock Exchange. (b) Basis of presentation and use of estimates Our accounting and financial reporting policies conform to accounting principles and practices generally accepted in the United States of America. The accompanying consolidated financial statements include the accounts of TransMontaigne Partners L.P., a Delaware limited partnership, and its controlled subsidiaries. Investments where we do not have the ability to exercise control, but do have the ability to exercise significant influence, are accounted for using the equity method of accounting. All inter ‑company accounts and transactions have been eliminated in the preparation of the accompanying consolidated financial statements. The accompanying consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly our financial position as of June 30, 2015 and December 31, 2014 and our results of operations for the three and six months ended June 30, 2015 and 2014. The preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. The following estimates, in management’s opinion, are subjective in nature, require the exercise of judgment, and involve complex analyses: useful lives of our plant and equipment, accrued environmental obligations and determining the fair value of our reporting units when analyzing goodwill. Changes in these estimates and assumptions will occur as a result of the passage of time and the occurrence of future events. Actual results could differ from these estimates. (c) Accounting for terminal and pipeline operations In connection with our terminal and pipeline operations, we utilize the accrual method of accounting for revenue and expenses. We generate revenue in our terminal and pipeline operations from terminaling services fees, transportation fees, management fees and cost reimbursements, fees from other ancillary services and gains from the sale of refined products. Terminaling services revenue is recognized ratably over the term of the agreement for storage fees and minimum revenue commitments that are fixed at the inception of the agreement and when product is delivered to the customer for fees based on a rate per barrel of throughput; transportation revenue is recognized when the product has been delivered to the customer at the specified delivery location; management fee revenue and cost reimbursements are recognized as the services are performed or as the costs are incurred; ancillary service revenue is recognized as the services are performed; and gains from the sale of refined products are recognized when the title to the product is transferred. Pursuant to terminaling services agreements with certain of our throughput customers, we are entitled to the volume of product gained resulting from differences in the measurement of product volumes received and distributed at our terminaling facilities. Consistent with recognized industry practices, measurement differentials occur as the result of the inherent variances in measurement devices and methodology. We recognize as revenue the net proceeds from the sale of the product gained. For the three months ended June 30, 2015 and 2014, we recognized revenue of approximately $ 2.2 million and $ 4.1 million, respectively, for net product gained. Within these amounts, approximately $0. 7 million and $2. 4 million for the three months ended June 30, 2015 and 2014, respectively, were pursuant to terminaling services agreements with affiliate customers. For the six months ended June 30, 2015 and 2014, we recognized revenue of approximately $4.0 million and $ 7.7 million, respectively, for net product gained. Within these amounts, approximately $1.6 million and $4.9 million for the six months ended June 30, 2015 and 2014, respectively, were pursuant to terminaling services agreements with affiliate customers. (d) Cash and cash equivalents We consider all short ‑term investments with a remaining maturity of three months or less at the date of purchase to be cash equivalents. (e) Property, plant and equipment Depreciation is computed using the straight ‑line method. Estimated useful lives are 15 to 25 years for terminals and pipelines and 3 to 25 years for furniture, fixtures and equipment. All items of property, plant and equipment are carried at cost. Expenditures that increase capacity or extend useful lives are capitalized. Repairs and maintenance are expensed as incurred. We evaluate long ‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable based on expected undiscounted future cash flows attributable to that asset group. If an asset group is impaired, the impairment loss to be recognized is the excess of the carrying amount of the asset group over its estimated fair value. (f) Investments in unconsolidated affiliates We account for our investments in our unconsolidated affiliates, which we do not control but do have the ability to exercise significant influence over, using the equity method of accounting. Under this method, the investment is recorded at acquisition cost, increased by our proportionate share of any earnings and additional capital contributions and decreased by our proportionate share of any losses, distributions received and amortization of any excess investment. Excess investment is the amount by which our total investment exceeds our proportionate share of the book value of the net assets of the investment entity. We evaluate our investments in unconsolidated affiliates for impairment whenever events or circumstances indicate there is a loss in value of the investment that is other than temporary. In the event of impairment, we would record a charge to earnings to adjust the carrying amount to fair value. (g) Environmental obligations We accrue for environmental costs that relate to existing conditions caused by past operations when probable and reasonably estimable (see Note 10 of Notes to consolidated financial statements). Environmental costs include initial site surveys and environmental studies of potentially contaminated sites, costs for remediation and restoration of sites determined to be contaminated and ongoing monitoring costs, as well as fines, damages and other costs, including direct legal costs. Liabilities for environmental costs at a specific site are initially recorded, on an undiscounted basis, when it is probable that we will be liable for such costs, and a reasonable estimate of the associated costs can be made based on available information. Such an estimate includes our share of the liability for each specific site and the sharing of the amounts related to each site that will not be paid by other potentially responsible parties, based on enacted laws and adopted regulations and policies. Adjustments to initial estimates are recorded, from time to time, to reflect changing circumstances and estimates based upon additional information developed in subsequent periods. Estimates of our ultimate liabilities associated with environmental costs are difficult to make with certainty due to the number of variables involved, including the early stage of investigation at certain sites, the lengthy time frames required to complete remediation, technology changes, alternatives available and the evolving nature of environmental laws and regulations. We periodically file claims for insurance recoveries of certain environmental remediation costs with our insurance carriers under our comprehensive liability policies (see Note 5 of Notes to consolidated financial statements). We recognize our insurance recoveries as a credit to income in the period that we assess the likelihood of recovery as being probable (i.e., likely to occur). TransMontaigne LLC agreed to indemnify us against certain potential environmental claims, losses and expenses that were identified on or before May 27, 2010 and that were associated with the ownership or operation of the Florida and Midwest terminal facilities prior to May 27, 2005, up to a maximum liability not to exceed $15.0 million for this indemnification obligation. TransMontaigne LLC agreed to indemnify us against certain potential environmental claims, losses and expenses that were identified on or before December 31, 2011 and that were associated with the ownership or operation of the Brownsville and River facilities prior to December 31, 2006, up to a maximum liability not to exceed $15.0 million for this indemnification obligation. TransMontaigne LLC agreed to indemnify us against certain potential environmental claims, losses and expenses that were identified on or before December 31, 2012 and that were associated with the ownership or operation of the Southeast terminals prior to December 31, 2007, up to a maximum liability not to exceed $15.0 million for this indemnification obligation. TransMontaigne LLC has agreed to indemnify us against certain potential environmental claims, losses and expenses that are identified on or before March 1, 2016 and that were associated with the ownership or operation of the Pensacola terminal prior to March 1, 2011, up to a maximum liability not to exceed $2.5 million for this indemnification obligation. (h) Asset retirement obligations Asset retirement obligations are legal obligations associated with the retirement of long ‑lived assets that result from the acquisition, construction, development or normal use of the asset. Generally accepted accounting principles require that the fair value of a liability related to the retirement of long ‑lived assets be recorded at the time a legal obligation is incurred. Once an asset retirement obligation is identified and a liability is recorded, a corresponding asset is recorded, which is depreciated over the remaining useful life of the asset. After the initial measurement, the liability is adjusted to reflect changes in the asset retirement obligation. If and when it is determined that a legal obligation has been incurred, the fair value of any liability is determined based on estimates and assumptions related to retirement costs, future inflation rates and interest rates. Our long ‑lived assets consist of above ‑ground storage facilities and underground pipelines. We are unable to predict if and when these long ‑lived assets will become completely obsolete and require dismantlement. We have not recorded an asset retirement obligation, or corresponding asset, because the future dismantlement and removal dates of our long ‑lived assets is indeterminable and the amount of any associated costs are believed to be insignificant. Changes in our assumptions and estimates may occur as a result of the passage of time and the occurrence of future events. (i) Equity based compensation Generally accepted accounting principles require us to measure the cost of services received in exchange for an award of equity instruments based on the measurement ‑date fair value of the award. That cost is recognized during the period services are provided in exchange for the award. (j) Accounting for derivative instruments Generally accepted accounting principles require us to recognize all derivative instruments at fair value in the consolidated balance sheets as assets or liabilities (see Note 11 of Notes to consolidated financial statements). Changes in the fair value of our derivative instruments are recognized in earnings. We did not have any derivative instruments at December 31, 2014. At June 30, 2015, our derivative instruments were limited to interest rate swap agreements with an aggregate notional amount of $75.0 million that expire March 25, 2018. Pursuant to the terms of the interest rate swap agreements, we pay a blended fixed rate of approximately 1.05% and receive interest payments based on the one-month LIBOR. The net difference to be paid or received under the interest rate swap agreements is settled monthly and is recognized as an adjustment to interest expense. The fair value of our interest rate swap agreements are determined using a pricing model based on the LIBOR swap rate and other observable market data. (k) Income taxes No provision for U.S. federal income taxes has been reflected in the accompanying consolidated financial statements because Partners is treated as a partnership for federal income taxes. As a partnership, all income, gains, losses, expenses, deductions and tax credits generated by Partners flow through to its unitholders. Partners is a taxable entity under certain U.S. state jurisdictions, primarily Texas. Partners accounts for U.S. state income taxes under the asset and liability method pursuant to generally accepted accounting principles. U.S. state income taxes are not material. (l) Net earnings per limited partner unit Net earnings allocable to the limited partners, for purposes of calculating net earnings per limited partner unit, are net of the earnings allocable to the general partner interest and distributions payable to any restricted phantom units granted under our equity based compensation plans that participate in Partners’ distributions (see Note 15 of Notes to consolidated financial statements). The earnings allocable to the general partner interest include the distributions of available cash (as defined by our partnership agreement) attributable to the period to the general partner interest, net of adjustments for the general partner’s share of undistributed earnings, and the incentive distribution rights. Undistributed earnings are the difference between the earnings and the distributions attributable to the period. Undistributed earnings are allocated to the limited partners and general partner interest based on their respective sharing of earnings or losses specified in the partnership agreement, which is based on their ownership percentages of 98% and 2% , respectively. The incentive distribution rights are not allocated a portion of the undistributed earnings given they are not entitled to distributions other than from available cash. Further, the incentive distribution rights do not share in losses under our partnership agreement. Basic net earnings per limited partner unit is computed by dividing net earnings allocable to limited partners by the weighted average number o f limited partner units outstanding during the period. Diluted net earnings per limited partner unit is computed by dividing net earnings allocable to the limited partners by the weighted avera ge number of limited partner units outstanding during the period and any potential dilutive securities outstanding during the period. (m) Recent accounting pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The objective of this update is to clarify the principles for recognizing revenue and to develop a common revenue standard. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We are currently evaluating the potential impact that the adoption will have on our disclosures and financial statements. |
TRANSACTIONS WITH AFFILIATES
TRANSACTIONS WITH AFFILIATES | 6 Months Ended |
Jun. 30, 2015 | |
TRANSACTIONS WITH AFFILIATES | |
TRANSACTIONS WITH AFFILIATES | (2) TRANSACTIONS WITH AFFILIATES Omnibus agreement. We have an omnibus agreement with TransMontaigne LLC that will continue in effect until the earlier to occur of (i) TransMontaigne LLC ceasing to control our general partner or (ii) the election of either us or TransMontaigne LLC, following at least 24 months’ prior written notice to the other parties. Under the omnibus agreement we pay TransMontaigne LLC an administrative fee for the provision of various general and administrative services for our benefit. For the three months ended June 30, 2015 and 2014, the administrative fee paid to TransMontaigne LLC was approximately $2.8 million and $2.8 million, respectively. For the six months ended June 30, 2015 and 2014, the administrative fee paid to TransMontaigne LLC was approximately $5.6 million and $5.6 million, respectively. If we acquire or construct additional facilities, TransMontaigne LLC will propose a revised administrative fee covering the provision of services for such additional facilities. If the conflicts committee of our general partner agrees to the revised administrative fee, TransMontaigne LLC will provide services for the additional facilities pursuant to the agreement. The administrative fee encompasses the reimbursement of services to perform centralized corporate functions, such as legal, accounting, treasury, insurance administration and claims processing, health, safety and environmental, information technology, human resources, credit, payroll, taxes and engineering and other corporate services, to the extent such services are not outsourced by TransMontaigne LLC. The omnibus agreement further provides that we pay TransMontaigne LLC an insurance reimbursement for premiums on insurance policies covering our facilities and operations. For the three months ended June 30, 2015 and 2014, the insurance reimbursement paid to TransMontaigne LLC was approximately $0.9 million and $0.9 million, respectively. For the six months ended June 30, 2015 and 2014, the insurance reimbursement paid to TransMontaigne LLC was approximately $1.9 million and $1.8 million, respectively. We also reimburse TransMontaigne LLC for direct operating costs and expenses, such as salaries of operational personnel performing services on ‑site at our terminals and pipelines and the cost of their employee benefits, including 401(k) and health insurance benefits. Under the omnibus agreement we have agreed to reimburse TransMontaigne LLC for a portion of the incentive bonus awards made to key employees under the TransMontaigne Services LLC savings and retention plan, provided the compensation committee of our general partner determines that an adequate portion of the incentive bonus awards are indexed to the performance of our common units in the form of restricted phantom units. The value of our incentive bonus award reimbursement for a single grant year may be no less than $1.5 million. Effective April 13, 2015 and beginning with the 2015 incentive bonus award, we have the option to provide the reimbursement in either a cash payment to TransMontaigne LLC or the delivery of our common units to TransMontaigne LLC or to the award recipients, with the reimbursement made in accordance with the underlying vesting and payment schedule of the TransMontaigne Services LLC savings and retention plan. Prior to the 2015 incentive bonus award, we reimbursed our portion of the incentive bonus awards by making cash payments to TransMontaigne LLC over the first year that each applicable award was granted. For the three months ended June 30, 2015 and 2014, the expense associated with the reimbursement of incentive bonus awards w as approximately $0.5 million and $0.4 million respectively. For the six months ended June 30, 2015 and 2014, the expense associated with the reimbursemen t of incentive bonus awards was approximately $1.1 million and $0.8 million respectively. The omnibus agreement also provides TransMontaigne LLC a right of first refusal to purchase our assets, subject to certain exceptions discussed below and provided that TransMontaigne LLC agrees to pay no less than 105% of the purchase price offered by the third party bidder. Before we enter into any contract to sell such terminal or pipeline facilities, we must give written notice of all material terms of such proposed sale to TransMontaigne LLC. TransMontaigne LLC will then have the sole and exclusive option, for a period of 45 days following receipt of the notice. Subject to certain exceptions discussed below, TransMontaigne LLC also has a right of first refusal to contract for the use of any petroleum product storage capacity that (i) is put into commercial service after January 1, 2008, or (ii) was subject to a terminaling services agreement that expires or is terminated (excluding a contract renewable solely at the option of our customer), provided that TransMontaigne LLC agrees to pay no less than 105% of the fees offered by the third party customer. The above rights of first refusal do not apply to any storage capacity or terminaling assets for which TransMontaigne LLC, or an affiliate of TransMontaigne LLC, has, subsequent to July 2013, elected to terminate (or not renew upon expiration) its existing terminaling services agreement relating thereto. Environmental indemnification. In connection with our acquisition of the Florida and Midwest terminals, TransMontaigne LLC agreed to indemnify us against certain potential environmental claims, losses and expenses that were identified on or before May 27, 2010, and that were associated with the ownership or operation of the Florida and Midwest terminals prior to May 27, 2005. TransMontaigne LLC’s maximum liability for this indemnification obligation is $15.0 million. TransMontaigne LLC has no obligation to indemnify us for losses until such aggregate losses exceed $250,000 . TransMontaigne LLC has no indemnification obligations with respect to environmental claims made as a result of additions to or modifications of environmental laws promulgated after May 27, 2005. In connection with our acquisition of the Brownsville, Texas and River terminals, TransMontaigne LLC agreed to indemnify us against potential environmental claims, losses and expenses that were identified on or before December 31, 2011, and that were associated with the ownership or operation of the Brownsville and River facilities prior to December 31, 2006. TransMontaigne LLC’s maximum liability for this indemnification obligation is $15.0 million. TransMontaigne LLC has no obligation to indemnify us for losses until such aggregate losses exceed $250,000 . The deductible amount, cap amount and limitation of time for indemnification do not apply to any environmental liabilities known to exist as of December 31, 2006. TransMontaigne LLC has no indemnification obligations with respect to environmental claims made as a result of additions to or modifications of environmental laws promulgated after December 31, 2006. In connection with our acquisition of the Southeast terminals, TransMontaigne LLC agreed to indemnify us against potential environmental claims, losses and expenses that were identified on or before December 31, 2012, and that were associated with the ownership or operation of the Southeast terminals prior to December 31, 2007. TransMontaigne LLC’s maximum liability for this indemnification obligation is $15.0 million. TransMontaigne LLC has no obligation to indemnify us for losses until such aggregate losses exceed $250,000 . The deductible amount, cap amount and limitation of time for indemnification do not apply to any environmental liabilities known to exist as of December 31, 2007. TransMontaigne LLC has no indemnification obligations with respect to environmental claims made as a result of additions to or modifications of environmental laws promulgated after December 31, 2007. In connection with our acquisition of the Pensacola terminal, TransMontaigne LLC has agreed to indemnify us against potential environmental claims, losses and expenses that are identified on or before March 1, 2016, and that are associated with the ownership or operation of the Pensacola terminal prior to March 1, 2011. Our environmental losses must first exceed $200,000 and TransMontaigne LLC’s indemnification obligations are capped at $2.5 million. The deductible amount, cap amount and limitation of time for indemnification do not apply to any environmental liabilities known to exist as of March 1, 2011 . TransMontaigne LLC has no indemnification obligations with respect to environmental claims made as a result of additions to or modifications of environmental laws promulgated after March 1, 2011. Terminaling services agreement—Florida and Midwest terminals. In connection with the NGL Acquisition, effective July 1, 2014, Morgan Stanley Capital Group assigned to NGL its obligations under our terminaling services agreement for light oil terminaling capacity at our Florida terminals. Effective September 16, 2014, we amended our long-term terminaling services agreement with RaceTrac Petroleum Inc. to include the use of gasoline, ethanol and diesel tankage at our Cape Canaveral, Port Manatee and Port Everglades South terminals. Simultaneous with the entry into the RaceTrac Petroleum Inc. agreement, we amended the Florida and Midwest terminaling services agreement to immediately terminate NGL’s obligations at our Cape Canaveral and Port Everglades South terminals, and to terminate NGL’s obligation at our Port Manatee terminal effective March 14, 2015. The tankage at Cape Canaveral and Port Everglades South became available to RaceTrac Petroleum Inc. on September 16, 2014. The tankage at Port Manatee became available to RaceTrac Petroleum Inc. in July of 2015, upon the completion of certain enhancements at this facility. On October 31, 2014, NGL provided us the required 18 months’ prior notice that it will terminate its remaining obligations under the Florida and Midwest terminaling services agreement effective April 30, 2016, which constitutes NGL’s light oil terminaling capacity for approximately 1.1 million barrels at our Port Everglades North, Florida terminal. NGL has agreed to allow us to re-contract some of this tankage prior to its effective contract termination date. Accordingly, we have re-contracted approximately 0.5 million barrels of this capacity to World Fuel Services Corporation and RaceTrac Petroleum Inc. at similar rates charged to NGL. The approximately 0.5 million barrels of tankage became available to these third party customers in May of 2015. Effective May 31, 2014, the Florida tanks dedicated to bunker fuels were no longer subject to the Florida and Midwest terminaling services agreement. A large portion of this capacity has been re ‑contracted to Glencore Ltd. effective June 1, 2014. Under the Florida and Midwest terminaling services agreement, Morgan Stanley Capital Group had also contracted for our Mount Vernon, Missouri and Rogers, Arkansas terminals and the use of our Razorback Pipeline, which runs from Mount Vernon to Rogers. We refer to these terminals and the related pipeline as the Razorback system. This portion of the Florida and Midwest terminaling services agreement related to the Razorback system was terminated effective February 28, 2014. Effective March 1, 2014, we entered into a ten - year capacity agreement with Magellan Pipeline Company, L.P., covering 100% of the capacity of our Razorback system. Under the Florida and Midwest terminaling services agreement, taking into consideration terminations, NGL is obligated to throughput a volume that, at the fee and tariff schedule contained in the agreement, will result in minimum throughput payments to us of approximately $5.7 million for the year ending December 31, 2015. The minimum annual throughput payment is reduced proportionately for any decrease in storage capacity due to out ‑of ‑service tank capacity or for capacity that has been vacated. If a force majeure event occurs that renders us unable to perform our obligations with respect to an asset, the obligations would be temporarily suspended with respect to that asset. If a force majeure event continues for 30 consecutive days or more and results in a diminution in the storage capacity we make available, then the counterparty may terminate its obligations with respect to the asset affected by the force majeure event and their minimum revenue commitment would be reduced proportionately for the duration of the agreement. Terminaling services agreement—Cushing terminal. In July 2011, we entered into a terminaling services agreement with Morgan Stanley Capital Group relating to our Cushing, Oklahoma facility that will expire in July 2019, subject to a five -year automatic renewal unless terminated by either party upon 180 days’ prior notice. In exchange for its minimum revenue commitment, we agreed to construct storage tanks and associated infrastructure to provide approximately 1.0 million barrels of crude oil capacity. These capital projects were completed and placed into service on August 1, 2012. Under this agreement, Morgan Stanley Capital Group agreed to throughput a volume of crude oil at our terminal that will, at the fee schedule contained in the agreement, result in minimum throughput payments to us of approximately $4.3 million for each one ‑year period following the in ‑service date of August 1, 2012. Subsequent to the NGL Acquisition, effective July 1, 2014, revenue associated with the Cushing tankage is recorded as revenue from external customers as opposed to revenue from affiliates. If a force majeure event occurs that renders us unable to perform our obligations with respect to an asset, Morgan Stanley Capital Group’s obligations would be temporarily suspended with respect to that asset. If a force majeure event continues for 120 consecutive days or more and results in a diminution in the storage capacity we make available to Morgan Stanley Capital Group, Morgan Stanley Capital Group may terminate its obligations with respect to the asset affected by the force majeure event and their minimum revenue commitment would be reduced proportionately for the duration of the agreement. Terminaling services agreement—Southeast terminals. In connection with the NGL Acquisition, effective July 1, 2014, Morgan Stanley Capital Group assigned to NGL its obligations under our terminaling services agreement relating to our Southeast terminals, excluding the Collins/Purvis tankage. The terminaling services agreement provisions pertaining to the Collins/Purvis tankage remained with Morgan Stanley Capital Group, and subsequent to the NGL Acquisition the revenue associated with the Collins/Purvis tankage is recorded as revenue from external customers as opposed to revenue from affiliates. The Southeast terminaling services agreement, excluding the Collins/Purvis tankage, will continue in effect unless and until NGL provides us at least 24 months’ prior notice of its intent to terminate the agreement. We have the right to terminate the terminaling services agreement effective at any time after July 31, 2023 by providing at least 24 months’ prior notice to NGL. Under this agreement, NGL is obligated to throughput a volume of refined product at our Southeast terminals that will, at the fee schedule contained in the agreement, result in minimum throughput payments to us of approximately $27.0 million for the year ending December 31, 2015; with stipulated annual increases in throughput payments through July 31, 2015, and for each contract year thereafter the throughput payments will adjust based on increases in the United States Consumer Price Index. The minimum annual throughput payment is reduced proportionately for any decrease in storage capacity due to out ‑of ‑service tank capacity. If a force majeure event occurs that renders us unable to perform our obligations with respect to an asset, the obligations would be temporarily suspended with respect to that asset. If a force majeure event continues for 30 consecutive days or more and results in a diminution in the storage capacity we make available, the counterparty may terminate its obligations with respect to the asset affected by the force majeure event and their minimum revenue commitment would be reduced proportionately for the duration of the agreement. Terminaling services agreement—Collins/Purvis additional light oil tankage. In January 2010, we entered into a terminaling services agreement with Morgan Stanley Capital Group for additional light oil tankage relating to our Collins/Purvis, Mississippi facility that will expire in July 2018, after which the terminaling services agreement will continue in effect unless and until Morgan Stanley Capital Group provides us at least 24 months’ prior notice of its intent to terminate the agreement. In exchange for its minimum revenue commitment, we agreed to undertake certain capital projects to provide approximately 700,000 barrels of additional light oil capacity and other improvements at the Collins/Purvis terminal. These capital projects were completed and placed into service in July 2011. Under this agreement, Morgan Stanley Capital Group has agreed to throughput a volume of light oil products at our terminal that will, at the fee schedule contained in the agreement, result in minimum throughput payments to us of approximately $4.1 million for the one - year period following the in ‑service date of July 2011 for the aforementioned capital projects, and for each contract year thereafter, subject to increases based on increases in the United States Consumer Price Index beginning July 1, 2018. Subsequent to the NGL Acquisition, effective July 1, 2014, revenue associated with the Collins/Purvis additional light oil tankage is recorded as revenue from external customers as opposed to revenue from affiliates. If a force majeure event occurs that renders us unable to perform our obligations with respect to an asset, Morgan Stanley Capital Group’s obligations would be temporarily suspended with respect to that asset. If a force majeure event continues for 30 consecutive days or more and results in a diminution in the storage capacity we make available to Morgan Stanley Capital Group, Morgan Stanley Capital Group may terminate its obligations with respect to the asset affected by the force majeure event and their minimum revenue commitment would be reduced proportionately for the duration of the agreement. Barge dock services agreement—Baton Rouge dock. Effective May 2013, we entered into a barge dock services agreement with Morgan Stanley Capital Group relating to our Baton Rouge, LA dock facility that will expire in May 2023, subject to a five - year automatic renewal unless terminated by either party upon 180 days’ prior notice. Under this agreement, Morgan Stanley Capital Group agreed to throughput a volume of refined product at our Baton Rouge dock facility that will, at the fee schedule contained in the agreement, result in minimum throughput payments to us of approximately $1.2 million for each of the first three years ending May 12, 2016 and approximately $0.9 million for each of the remaining seven years ending May 12, 2023. In exchange for its minimum throughput commitment, we agreed to provide Morgan Stanley Capital Group with exclusive access to our dock facility. Effective September 1, 2014, Morgan Stanley Capital Group assigned its rights and obligations under the Baton Rouge barge dock services agreement to Colonial Pipeline Company. Subsequent to the NGL Acquisition, effective July 1, 2014, revenue associated with the Baton Rouge barge dock services agreement is recorded as revenue from external customers as opposed to revenue from affiliates. If a force majeure event occurs that renders us unable to perform our obligations, Morgan Stanley Capital Group’s obligations would be temporarily suspended. If a force majeure event continues for 120 consecutive days, Morgan Stanley Capital Group may terminate its obligations under this agreement. Operations and reimbursement agreement—Frontera. Effective as of April 1, 2011, we entered into the Frontera Brownsville LLC joint venture, or “Frontera”, in which we have a 50% ownership interest. In conjunction with us entering into the joint venture, we agreed to operate Frontera, in accordance with an operations and reimbursement agreement executed between us and Frontera, for a management fee that is based on our costs incurred. Our agreement with Frontera stipulates that we may resign as the operator at any time with the prior written consent of Frontera, or that we may be removed as the operator for good cause, which includes material noncompliance with laws and material failure to adhere to good industry practice regarding health, safety or environmental matters. For the three months ended June 30, 2015 and 2014, we recognized revenue of approximately $1. 0 million and $ 1.0 million, respectively, related to this operations and reimbursement agreement. |
TERMINAL ACQUISITION
TERMINAL ACQUISITION | 6 Months Ended |
Jun. 30, 2015 | |
TERMINAL ACQUISITION | |
TERMINAL ACQUISITION | (3) TERMINAL ACQUISITION On December 20, 2012, we acquired a 42.5% , general voting, Class A Member (“ownership”) interest in BOSTCO, for approximately $79 million, from Kinder Morgan Battleground Oil, LLC, a wholly owned subsidiary of Kinder Morgan Energy Partners, L.P. (“Kinder Morgan”). BOSTCO is a new terminal facility on the Houston Ship Channel designed to handle residual fuel, feedstocks, other black oils and distillates. The initial phase of BOSTCO involved the construction of 51 storage tanks with approximately 6.2 million barrels of storage capacity. The BOSTCO facility began initial commercial operation s in the fourth quarter of 2013. Completion of the full 6.2 million barrels of storage capacity and related infrastructure occurred in the second quarter of 2014. On June 5, 2013, we announced an expansion of BOSTCO for an additional 900,000 barrels of distillate tankage. Work on the expansion started in the second quarter of 2013, and was placed into service at the end of the third quarter of 2014. With the addition of this expansion proje ct, BOSTCO has capacity of approximately 7.1 million barrels at an overall construction cost of approximately $530 million. Our total payme nts for the initial and expansion projects are estimated to be approximately $234 million, which includes our proportionate share of the BOSTCO project costs and necessary start ‑up working capital, a one ‑time buy ‑in fee paid to Kinder Morgan to acquire our 42.5% interest and the capitalization of interest on our investment during the construction of BOSTCO. We have funded our payments for BOSTCO utilizing borrowings under our credit facility. Our investment in BOSTCO entitles us to appoint a member to the Board of Managers of BOSTCO to vote our proportionate ownership share on general governance matters and to certain rights of approval over significant changes in, or expansion of, BOSTCO’s business. Kinder Morgan is responsible for managing BOSTCO’s day ‑to ‑day operations. Our 42.5% ownership interest does not allow us to control BOSTCO, but does allow us to exercise significant influence over its operations. Accordingly, we account for our investment in BOSTCO under the equity method of accounting. |
CONCENTRATION OF CREDIT RISK AN
CONCENTRATION OF CREDIT RISK AND TRADE ACCOUNTS RECEIVABLE | 6 Months Ended |
Jun. 30, 2015 | |
CONCENTRATION OF CREDIT RISK AND TRADE ACCOUNTS RECEIVABLE | |
CONCENTRATION OF CREDIT RISK AND TRADE ACCOUNTS RECEIVABLE | (4) CONCENTRATION OF CREDIT RISK AND TRADE ACCOUNTS RECEIVABLE Our primary market areas are located in the United States along the Gulf Coast, in the Southeast, in Brownsville, Texas, along the Mississippi and Ohio Rivers, and in the Midwest. We have a concentration of trade receivable balances due from companies engaged in the trading, distribution and marketing of refined products and crude oil. These concentrations of customers may affect our overall credit risk in that the customers may be similarly affected by changes in economic, regulatory or other factors. Our customers’ historical financial and operating information is analyzed prior to extending credit. We manage our exposure to credit risk through credit analysis, credit approvals, credit limits and monitoring procedures, and for certain transactions we may request letters of credit, prepayments or guarantees. We maintain allowances for potentially uncollectible accounts receivable. Trade accounts receivable, net consists of the following (in thousands): June 30, December 31, 2015 2014 Trade accounts receivable $ $ Less allowance for doubtful accounts $ $ The following customers accounted for at least 10% of our consolidated revenue in at least one of the periods presented in the accompanying consolidated statements of operations: Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 NGL Energy Partners LP % — % % — % Morgan Stanley Capital Group % % % % RaceTrac Petroleum Inc. % % % % |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 6 Months Ended |
Jun. 30, 2015 | |
OTHER ASSETS, NET | |
OTHER CURRENT ASSETS | (5) OTHER CURRENT ASSETS Other current assets are as follows (in thousands): June 30, December 31, 2015 2014 Amounts due from insurance companies $ $ Additive detergent Deposits and other assets $ $ Amounts due from insurance companies. We periodically file claims for recovery of environmental remediation costs with our insurance carriers under our comprehensive liability policies. We recognize our insurance recoveries in the period that we assess the likelihood of recovery as being probable (i.e., likely to occur). At June 30, 2015 and December 31, 2014, we have recognized amounts due from insurance companies of approximately $ 0.8 million and $1.2 million, respectively, representing our best estimate of our probable insurance recoveries. During the six months ended June 30, 2015, we received reimbursements from insurance companies of approximately $0.3 million. During the six months ended June 30, 2015, we decreased our estimate of probable future insurance recoveries by $0.1 million. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 6 Months Ended |
Jun. 30, 2015 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |
PROPERTY, PLANT AND EQUIPMENT, NET | (6) PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net is as follows (in thousands): June 30, December 31, 2015 2014 Land $ $ Terminals, pipelines and equipment Furniture, fixtures and equipment Construction in progress Less accumulated depreciation $ $ |
GOODWILL
GOODWILL | 6 Months Ended |
Jun. 30, 2015 | |
GOODWILL. | |
GOODWILL | (7) GOODWILL Goodwill is as follows (in thousands): June 30, December 31, 2015 2014 Brownsville terminals $ $ Goodwill is required to be tested for impairment annually unless events or changes in circumstances indicate it is more likely than not that an impairment loss has been incurred at an interim date. Our annual test for the impairment of goodwill is performed as of December 31. The impairment test is performed at the reporting unit level. Our reporting units are our operating segments (see Note 18 of Notes to consolidated financial statements). The fair value of each reporting unit is determined on a stand ‑alone basis from the perspective of a market participant and represents an estimate of the price that would be received to sell the unit as a whole in an orderly transaction between market participants at the measurement date. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered to be impaired. At June 30, 2015 and December 31, 2014, our only reporting unit that contained goodwill was our Brownsville terminals. We did not recognize any goodwill impairment charges during the six months ended June 30, 2015 or during the year ended December 31, 2014 for this reporting unit. However, a significant decline in the price of our common units with a resulting increase in the assumed market participants’ weighted average cost of capital, the loss of a significant customer, the disposition of significant assets, or an unforeseen increase in the costs to operate and maintain the Brownsville terminals, could result in the recognition of an impairment charge in the future. |
INVESTMENTS IN UNCONSOLIDATED A
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 6 Months Ended |
Jun. 30, 2015 | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | (8) INVESTMENTS IN UNCONSOLIDATED AFFILIATES At June 30, 2015 and December 31, 2014, our investments in unconsolidated affiliates include a 42.5% interest in BOSTCO and a 50% interest in Frontera. BOSTCO is a newly constructed terminal facility located on the Houston Ship Channel. BOSTCO began initial commercial operations in the fourth quarter of 2013; with completion of its approximately 7.1 million barrels of storage capacity and related infrastructure occurring at the end of the third quarter of 2014 (see Note 3 of Notes to consolidated financial statements). Frontera is a terminal facility located in Brownsville, Texas that encompasses approximately 1.5 million barrels of light petroleum product storage capacity, as well as related ancillary facilities. The following table summarizes our investments in unconsolidated affiliates: Percentage of Carrying value ownership (in thousands) June 30, December 31, June 30, December 31, 2015 2014 2015 2014 BOSTCO % % $ $ Frontera % % Total investments in unconsolidated affiliates $ $ At June 30, 2015 and December 31, 2014, our investment in BOSTCO includes approximately $7. 5 million and $7.8 million, respectively, of excess investment related to a one time buy-in fee to acquire our 42.5% interest and capitalization of interest on our investment during the construction of BOSTCO. Excess investment is the amount by which our investment exceeds our proportionate share of the book value of the net assets of BOSTCO. Earnings from investments in unconsolidated affiliates were as follows (in thousands): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 BOSTCO $ $ $ $ Frontera Total earnings from investments in unconsolidated affiliates $ $ $ $ Additional capital investments in unconsolidated affiliates were as follows (in thousands): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 BOSTCO $ — $ $ — $ Frontera — — — Additional capital investments in unconsolidated affiliates $ — $ $ — $ Cash distributions received from unconsolidated affiliates were as follows (in thousands): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 BOSTCO $ $ $ $ Frontera Cash distributions received from unconsolidated affiliates $ $ $ $ The summarized financial information of our unconsolidated affiliates was as follows (in thousands): Balance sheets: BOSTCO Frontera June 30, December 31, June 30, December 31, 2015 2014 2015 2014 Current assets $ $ $ $ Long-term assets Current liabilities Long-term liabilities — — — — Net assets $ $ $ $ Statements of operations: BOSTCO Frontera Three Months Ended Three Months Ended June 30, June 30, 2015 2014 2015 2014 Revenue $ $ $ $ Expenses Net earnings (loss) $ $ $ $ BOSTCO Frontera Six months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Revenue $ $ $ $ Expenses Net earnings $ $ $ $ |
OTHER ASSETS, NET
OTHER ASSETS, NET | 6 Months Ended |
Jun. 30, 2015 | |
OTHER ASSETS, NET | |
OTHER ASSETS, NET | (9) OTHER ASSETS, NET Other assets, net are as follows (in thousands): June 30, December 31, 2015 2014 Amounts due under long-term terminaling services agreements: External customers $ $ Affiliates Deferred financing costs, net of accumulated amortization of $3,612 and $3,278 , respectively Customer relationships, net of accumulated amortization of $1,789 and $1,687 , respectively Deposits and other assets $ $ Amounts due under long ‑term terminaling services agreements. We have long ‑term terminaling services agreements with certain of our customers that provide for minimum payments that increase over the terms of the respective agreements. We recognize as revenue the minimum payments under the long ‑term terminaling services agreements on a straight ‑line basis over the term of the respective agreements. At June 30, 2015 and December 31, 2014, we have recognized revenue in excess of the minimum payments that are due through those respective dates under the long ‑term terminaling services agreements resulting in an asset of approximately $1.2 million and $1.6 million, respectively. Deferred financing costs. Deferred financing costs are amortized using the effective interest method over the term of the related credit facility (see Note 12 of Notes to consolidated financial statements). Customer relationships. Other assets, net include certain customer relationships at our River terminals. These customer relationships are being amortized on a straight ‑line basis over twelve years. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 6 Months Ended |
Jun. 30, 2015 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | (10) ACCRUED LIABILITIES Accrued liabilities are as follows (in thousands): June 30, December 31, 2015 2014 Customer advances and deposits: External customers $ $ Affiliates — Accrued property taxes Accrued environmental obligations Interest payable Rebate due to affiliate — Accrued expenses and other $ $ Customer advances and deposits. We bill certain of our customers one month in advance for terminaling services to be provided in the following month. At June 30, 2015 and December 31, 2014, we have billed and collected from certain of our customers approximately $ 5.4 million and $2.8 million, respectively, in advance of the terminaling services being provided. Accrued environmental obligations. At June 30, 2015 and December 31, 2014, we have accrued environmental obligations of approximately $1. 1 million and $1.5 million, respectively, representing our best estimate of our remediation obligations. During the six months ended June 30, 2015, we made payments of approximately $0.3 million towards our environmental remediation obligations. During the six months ended June 30, 2015, we decreased our estimate of our future environmental remediation costs by $0.1 million. Changes in our estimates of our future environmental remediation obligations may occur as a result of the passage of time and the occurrence of future events. Rebate due to affiliate. Pursuant to our terminaling services agreement related to the Southeast terminals, we agreed to rebate to our affiliate customer 50% of the proceeds we receive annually in excess of $4.2 million from the sale of product gains at our Southeast terminals. At June 30, 2015 and December 31, 2014, we have accrued a liability due to affiliate of approximately $ nil and $1.8 million, respectively. In January of 2015 we paid approximately $1.8 million to our affiliate customer for the rebate due for the year ended December 31, 2014. |
OTHER LIABILITIES
OTHER LIABILITIES | 6 Months Ended |
Jun. 30, 2015 | |
OTHER LIABILITIES | |
OTHER LIABILITIES | (11) OTHER LIABILITIES Other liabilities are as follows (in thousands): June 30, December 31, 2015 2014 Advance payments received under long-term terminaling services agreements $ $ Deferred revenue—ethanol blending fees and other projects Unrealized loss on derivative instruments — $ $ Advance payments received under long ‑term terminaling services agreements. We have long ‑term terminaling services agreements with certain of our customers that provide for advance minimum payments. We recognize the advance minimum payments as revenue either on a straight ‑line basis over the term of the respective agreements or when services have been provided based on volumes of product distributed. At June 30, 2015 and December 31, 2014, we have received advance minimum payments in excess of revenue recognized under these long ‑term terminaling services agreements resulting in a liability of approximately $0.4 million and $0.5 million, respectively. Deferred revenue—ethanol blending fees and other projects. Pursuant to agreements with our customers, we agreed to undertake certain capital projects that primarily pertain to providing ethanol blending functionality at certain of our Southeast terminals. Upon completion of the projects, our customers have paid us lump ‑sum amounts that will be recognized as revenue on a straight ‑line basis over the remaining term of the agreements. At June 30, 2015 and December 31, 2014, we have unamortized deferred revenue of approximately $2.9 million and $3.4 million, respectively, for completed projects. During the three months ended June 30, 2015 and 2014, we recognized revenue on a straight ‑line basis of approximately $0.3 million and $0.7 million, respectively, for completed projects. During the six months ended June 30, 2015 and 2014, we recognized revenue on a straight ‑line basis of approximately $0.6 million and $1.4 million, respectively, for completed projects. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2015 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | (12) LONG ‑TERM DEBT On March 9, 2011, we entered into an amended and restated senior secured credit facility, or “credit facility”, which has been subsequently amended from time to time. The most recent amendment to our credit facility was the Fifth Amendment, which was completed on February 26, 2015. This amendment extended the maturity date of the credit facility from March 9, 2016 to July 31, 2018, increased the maximum borrowing line of credit from $350 million to $400 million, and allowed for up to $125 million in additional future “permitted JV investments”, which may include additional investments in BOSTCO. In addition, the amendment allowed for, at our request, the maximum borrowing line of credit to be increased by an additional $100 million, subject to the approval of the administrative agent and the receipt of additional commitments from one or more lenders. At June 30, 2015, the credit facility provides for a maximum borrowing line of credit equal to the lesser of (i) $400 million and (ii) 4.75 times Consolidated EBITDA (as defined: $375.5 million at June 30, 2015). At our request, the maximum borrowing line of credit may be increased by an additional $100 million, subject to the approval of the administrative agent and the receipt of additional commitments from one or more lenders. We may elect to have loans under the credit facility bear interest either (i) at a rate of LIBOR plus a margin ranging from 2% to 3% depending on the total leverage ratio then in effect, or (ii) at the base rate plus a margin ranging from 1% to 2% depending on the total leverage ratio then in effect. We also pay a commitment fee on the unused amount of commitments, ranging from 0.375% to 0.5% per annum, depending on the total leverage ratio then in effect. Our obligations under the credit facility are secured by a first priority security interest in favor of the lenders in the majority of our assets, including our investments in unconsolidated affiliates. The terms of the credit facility include covenants that restrict our ability to make cash distributions, acquisitions and investments, including investments in joint ventures. We may make distributions of cash to the extent of our “available cash” as defined in our partnership agreement. We may make acquisitions and investments that meet the definition of “permitted acquisitions”; “other investments” which may not exceed 5% of “consolidated net tangible assets”; and additional future “permitted JV investments” up to $125 million, which may include additional investments in BOSTCO. The principal balance of loans and any accrued and unpaid interest are due and payable in full on the maturity date, July 31, 2018. The credit facility also contains customary representations and warranties (including those relating to organization and authorization, compliance with laws, absence of defaults, material agreements and litigation) and customary events of default (including those relating to monetary defaults, covenant defaults, cross defaults and bankruptcy events). The primary financial covenants contained in the credit facility are (i) a total leverage ratio test (not to exceed 4.75 times), (ii) a senior secured leverage ratio test (not to exceed 3.75 times) in the event we issue senior unsecured notes, and (iii) a minimum interest coverage ratio test (not less than 3.0 times). If we were to fail any financial performance covenant, or any other covenant contained in the credit facility, we would seek a waiver from our lenders under such facility. If we were unable to obtain a waiver from our lenders and the default remained uncured after any applicable grace period, we would be in breach of the credit facility, and the lenders would be entitled to declare all outstanding borrowings immediately due and payable. We were in compliance with all of the financial covenants under the credit facility as of June 30, 2015. For the three months ended June 30, 2015 and 2014, the weighted average interest rate on borrowings under the credit facility was approximately 2.9% and 2.6% , respectively. For the six months ended June 30, 2015 and 2014, the weighted average interest rate on borrowings under the credit facility was approximately 2.8% and 2.6% , respectively. At June 30, 2015 and December 31, 2014, our outstanding borrowings under the credit facility were $25 7 million and $252 million, respectively. At June 30, 2015 and December 31, 2014, our outstanding lette rs of credit were $nil at both dates. We have an effective universal shelf ‑registration statement and prospectus on Form S ‑3 with the Securities and Exchange Commission that expires in June 2016. TLP Finance Corp., a 100% owned subsidiary of Partners, may act as a co ‑issuer of any debt securities issued pursuant to that registration statement. Partners and TLP Finance Corp. have no independent assets or operations . Our operations are conducted by subsidiaries of Partners through Partners’ 100% owned operating company subsidiary, TransMontaigne Operating Company L.P. Each of TransMontaigne Operating Company L.P.s’ and Partners’ other 100% owned subsidiaries (other than TLP Finance Corp., whose sole purpose is to act as co ‑issuer of any debt securities) may guarantee the debt securities. We expect that any guarantees will be full and unconditional and joint and several, subject to certain automatic customary releases, including sale, disposition, or transfer of the capital stock or substantially all of the assets of a subsidiary guarantor, exercise of legal defeasance option or covenant defeasance option, and designation of a subsidiary guarantor as unrestricted in accordance with the indenture. There are no significant restrictions on the ability of Partners or any guarantor to obtain funds from its subsidiaries by dividend or loan. None of the assets of Partners or a guarantor represent restricted net assets pursuant to the guidelines established by the Securities and Exchange Commission. |
PARTNERS' EQUITY
PARTNERS' EQUITY | 6 Months Ended |
Jun. 30, 2015 | |
PARTNERS' EQUITY | |
PARTNERS' EQUITY | (13) PARTNERS’ EQUITY The number of units outstanding is as follows: General Common partner units equivalent units Units outstanding at June 30, 2015 and December 31, 2014 At June 30, 2015 and December 31, 2014, common units outstanding include 10,268 and 7,600 common units, respectively, held on behalf of TransMontaigne LLC’s long ‑term incentive plan. |
EQUITY BASED COMPENSATION
EQUITY BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2015 | |
EQUITY BASED COMPENSATION | |
EQUITY BASED COMPENSATION | (14) EQUITY BASED COMPENSATION TransMontaigne GP is our general partner and manages our operations and activities. T ransMontaigne GP is a wholly owned su bsidiary of TransMontaigne LLC, which is a wholly owned subsidiary of NGL. Prior to January 1, 2015, TransMontaigne Services LLC, a wholly owned subsidiary of TransMontaigne LLC, employed the personnel who provide corporate and support services to TransMontaigne LLC’s operations, as well as our operations. Effective January 1, 2015, all the employees of TransMontaigne Services LLC became employees of NGL Energy Operating, LLC, which is a wholly owned subsidiary of NGL. TransMontaigne Services LLC has adopted a long ‑term incentive plan and a savings and retention pl an to compensate certain employees who provide corporate and support services to Partners and to the independent directors of our general partner. Long-term incentive plan. The long ‑term incentive plan currently permits the grant of awards covering an aggregate of 2,750,868 units, which amount will automatically increase on an annual basis by 2% of the total outstanding common and subordinated units, if any, at the end of the preceding fiscal year. At June 30, 2015, 2,501,948 units are available for future grant under the long ‑term incentive plan. The long ‑term incentive plan is administered by the compensation committee of the board of directors of our general partner and is currently used for grants of restricted phantom units to the independent directors of our general partner. The grants to the independent directors of our general partner generally vest and are payable annually in equal tranches over a four -year period. Ownership in the awards is subject to forfeiture until the vesting date, but recipients have distribution and voting rights from the date of the grant. TransMontaigne GP has historically acquired outstanding common units on the open market under a purchase program for purposes of delivering vested units to the independent directors of our general partner. The purchase program concluded with its final purchase of 667 units on the program’s scheduled termination date of April 1, 2015. Future grants of restricted phantom units under t he TransMontaigne Services LLC long ‑term incentive p lan are expected to be settled by us through the issuance of common units pursuant to our existing Form S-8 Registration Statements. TransMontaigne GP, on behalf of the long ‑term incentive plan, has purchased 2,668 and 4,002 common units pursuant to the program during the six months ended June 30, 2015 and 2014, respectively. Activity under the long-term incentive plan for the six months ended June 30, 2015 is as follows: Restricted Available for phantom future grant units Units available at December 31, 2014 Automatic increase in units available for future grant on January 1, 2015 — Units available at June 30, 2015 Generally accepted accounting principles require us to measure the cost of board member services received in exchange for an award of equity instruments based on the grant ‑date fair value of the award. That cost is recognized over the vesting period on a straight line basis during which a board member is required to provide services in exchange for the award. For awards to the independent directors of our general partner, equity ‑based compensation expense of approximately $46,000 and $114,000 is included in direct general and administrative expenses for the six months ended June 30, 2015 and 2014, respectively. Savings and retention plan. Under the omnibus agreement we have agreed to reimburse TransMontaigne LLC for a portion of the incentive bonus awards made by TransMontaigne Services LLC under the TransMontaigne Services LLC savings and retention plan to key employees that provide corporate and support services to Partners , provided the compensation committee of our general partner determines that an adequate portion of the incentive bonus awards are indexed to the performance of our common units in the form of restricted phantom units. In accordance with the omnibus agreement, the value of our incentive bonus award reimbursement for a single grant year may be no less than $1.5 million. Ownership in the restricted phantom units under the savings and retention plan is subject to forfeiture until the vesting date, but recipients have distribution equivalent rights from the date of grant that accrue additional restricted phantom units equivalent to the value of quarterly distributions paid by us on each of our outstanding common units. Recipients of restricted phantom units under the savings and retention plan do not have voting rights. The purpose of the savings and retention plan is to provide for the reward and retention of participants by providing them with bonus awards that vest over future service periods. Awards under the plan generally become vested as to 50% of a participant’s annual award as of the January 1 that falls closest to the second anniversary of the grant date, and the remaining 50% as of the January 1 that falls closest to the third anniversary of the grant date, subject to earlier vesting upon a participant’s age and length of service thresholds, retirement, death or disability, involuntary termination without cause, or termination of a participant’s employment following a change of control of TransMontaigne LLC , or its affiliates, as specified in the plan. Awards are payable as to 50% of a participant’s annual award in the month containing the second anniversary of the grant date, and the remaining 50% in the month containing the third anniversary of the grant date, subject to earlier vesting and payment , as applicable, upon the participant’s attainment of retirement, death or disability, involuntary te rmination without cause, or a participant’s termination of employment following a change of control of TransMontaigne LLC , or its affiliates, as specified in the plan. Pursuant to the provisions of the pla n, once participants reach the age and length of service thresholds set forth below , awards become vested and are payable as set forth above. A person will satisfy the age and length of service thresholds of the plan upon the attainment of the earliest of (a) age sixty , (b) age fifty ‑five and ten years of service as an officer of TransMontaigne LLC or any of its affiliates , or (c) age fifty and twenty years of service as an employee of TransMontaigne LLC or any of its affiliates. Effective April 13, 2015 and beginning with the 2015 incentive bonus award, under the omnibus agreement we have the option to provide the reimbursement in either a cash payment to TransMontaigne LLC or the delivery of our common units to TransMontaigne LLC or to the award recipients, with the reimbursement made in accordance with the underlying vesting and payment schedule of the TransMontaigne Services LLC savings and retention plan. Our reimbursement for the 2015 incentive bonus award is reduced for forfeitures and is increased for the value of quarterly distributions accrued under the distribution equivalent rights. We have the intent and ability to settle our reimbursement for the 2015 incentive bonus award in our common units, and accordingly, effective April 13 , 2015, we began accounting for the 2015 incentive bonus award as an equity award. Prior to the 2015 incentive bonus award, we reimbursed our portion of the incentive bon us awards through monthly cash payments to TransMontaigne LLC over the first year that each applicable award was granted. Given that Partners does not have any employees to provide corporate and support services and instead contracts for such services under its omnibus agreement with TransMontaigne LLC, generally accepted accounting principles require us to classify the 2015 incentive bonus award as a non-employee award and measure the cost of services received in exchange for an award of equity instruments based on the vesting ‑date fair value of the award. For the three months ended June 30, 2015 and 2014, the expenses associated with the reimbursement of incentive bonus awards were approximately $0.5 million and $0.4 million respectively. For the six months ended June 30, 2015 and 2014, the expenses associated with the reimbursement of incentive bonus awards were approximately $1.1 million and $0.8 million respectively. Activity related to our equity based award granted to TransMontaigne LLC for services performed under the omnibus agreement for the six months ended June 30, 2015 is as follows: NYSE closing Vested Unvested price Restricted phantom units outstanding at December 31, 2014 — — Grant on April 13, 2015 $ Unit accrual for distributions paid on May 7, 2015 $ Restricted phantom units outstanding at June 30, 2015 |
NET EARNINGS PER LIMITED PARTNE
NET EARNINGS PER LIMITED PARTNER UNIT | 6 Months Ended |
Jun. 30, 2015 | |
NET EARNINGS PER LIMITED PARTNER UNIT | |
NET EARNINGS PER LIMITED PARTNER UNIT | (15) NET EARNINGS PER LIMITED PARTNER UNIT The following table reconciles net earnings to net earnings allocable to limited partners and sets forth the computation of basic and diluted net earnings per limited partner unit (in thousands): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Net earnings $ $ $ $ Less: Distributions payable on behalf of incentive distribution rights Distributions payable on behalf of general partner interest Earnings allocable to general partner interest less than distributions payable to general partner interest Earnings allocable to general partner interest including incentive distribution rights Net earnings allocable to limited partners per the consolidated statements of operations Less distributions payable for unvested long-term incentive plan grants Less value of distributions payable in equivalent units for outstanding vested equity awards to TransMontaigne LLC — — Net earnings allocable to limited partners for calculating net earnings per limited partner unit $ $ $ $ Basic weighted average units Diluted weighted average units Net earnings per limited partner unit—basic $ $ $ $ Net earnings per limited partner unit—diluted $ $ $ $ Pursuant to our partnership agreement we are required to distribute available cash (as defined by our partnership agreement) as of the end of the reporting period. Such distributions are declared within 45 days after period end. The following table sets forth the distribution declared per common unit attributable to the periods indicated: Distribution January 1, 2014 through March 31, 2014 $ April 1, 2014 through June 30, 2014 $ July 1, 2014 through September 30, 2014 $ October 1, 2014 through December 31, 2014 $ January 1, 2015 through March 31, 2015 $ April 1, 2015 through June 30, 2015 $ |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2015 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | (16) COMMITMENTS AND CONTINGENCIES Contract commitments. At June 30, 2015, we have contractual commitments of approximately $3.2 million for the supply of services, labor and materials related to capital projects that currently are under development. We expect that these contractual commitments will be paid within the next twelve months. Operating leases. We lease property and equipment under non ‑cancelable operating leases that extend through August 2030. At June 30, 2015, future minimum lease payments under these non ‑cancelable operating leases are as follows (in thousands): Years ending December 31: 2015 (remainder of the year) $ 2016 2017 2018 2019 Thereafter $ Included in the above non ‑cancelable operating lease commitments are amounts for property rentals that we have sublet under non ‑cancelable sublease agreements, for which we expect to receive minimum rentals of approximately $0.8 million in future periods. Rental expense under operating leases was approximately $0 .9 million and $0 .9 million for the three months ended June 30, 2015 and 2014, respectively. Rental expense under operating leases was approximately $1.8 million and $ 1.7 million for the six months ended June 30, 2015 and 2014, respectively. Legal proceedings. The King Ranch natural-gas-processing plant in Kleberg County, Texas, was shut down as a result of a fire at the plant beginning in November 2013. This plant supplies a significant amount of liquefied petroleum gas, or “LPG,” to our third-party customer, Nieto Trading, B.V. (“Nieto”), which transports LPG through our Ella-Brownsville and Diamondback pipelines, and has contracted for the LPG storage capacity at our Brownsville terminals. The King Ranch plant became operational again in late November 2014. Nieto has claimed that the fire at the King Ranch plant constitutes a force majeure event that relieves Nieto of its obligation to pay certain fees required under the related terminaling services agreement for failure to throughput a minimum number of barrels of LPG (“deficiency fees”). We do not believe that the King Ranch fire qualified as a force majeure event under the terminaling services agreement, or that, even if it did, it relieved Nieto of its obligation to pay the deficiency fees. As a result of Nieto’s failure to pay the deficiency fees due to us, on September 26, 2014, we filed a complaint for damages and declaratory relief in the Supreme Court of the State of New York, County of New York, against Nieto, by which we seek damages that have accumulated as of June 30 , 2015 in the amount of at least $5.7 million and a declaratory judgment clarifying our rights to receive the deficiency fees under the terminaling services agreement. |
DISCLOSURES ABOUT FAIR VALUE
DISCLOSURES ABOUT FAIR VALUE | 6 Months Ended |
Jun. 30, 2015 | |
DISCLOSURES ABOUT FAIR VALUE | |
DISCLOSURES ABOUT FAIR VALUE | (17) DISCLOSURES ABOUT FAIR VALUE Generally accepted accounting principles defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Generally accepted accounting principles also establishes a fair value hierarchy that prioritizes the use of higher ‑level inputs for valuation techniques used to measure fair value. The three levels of the fair value hierarchy are: (1) Level 1 inputs, which are quoted prices (unadjusted) in active markets for identical assets or liabilities; (2) Level 2 inputs, which are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and (3) Level 3 inputs, which are unobservable inputs for the asset or liability. The fair values of the following financial instruments represent our best estimate of the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants at that date. Our fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects our judgments about the assumptions that market participants would use in pricing the asset or liability based on the best information available in the circumstances. The following methods and assumptions were used to estimate the fair value of financial instruments at June 30, 2015 and December 31, 2014. Cash and cash equivalents. The carrying amount approximates fair value because of the short ‑term maturity of these instruments. The fair value is categorized in Level 1 of the fair value hierarchy. Derivative instrument s . The carrying amount of our interest rate swap s as of June 30, 2015 was determined using a pricing model based on the LIBOR swap rate and other observable market data. The fair value is categorized in Level 2 of the fair value hierarchy. We did not have an interest rate swap as of December 31, 2014. Debt. The carrying amount of our credit facility debt approximates fair value since borrowings under the facility bear interest at current market interest rates. The fair value is categorized in Level 2 of the fair value hierarchy. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 6 Months Ended |
Jun. 30, 2015 | |
BUSINESS SEGMENTS | |
BUSINESS SEGMENTS | (18) BUSINESS SEGMENTS We provide integrated terminaling, storage, transportation and related services to companies engaged in the trading, distribution and marketing of refined petroleum products, crude oil, chemicals, fertilizers and other liquid products. Our chief operating decision maker is our general partner’s chief executive officer. Our general partner’s chief executive officer reviews the financial performance of our business segments using disaggregated financial information about “net margins” for purposes of making operating decisions and assessing financial performance. “Net margins” is composed of revenue less direct operating costs and expenses. Accordingly, we present “net margins” for each of our business segments: (i) Gulf Coast terminals, (ii) Midwest terminals and pipeline system, (iii) Brownsville terminals, (iv) River terminals and (v) Southeast terminals. The financial performance of our business segments is as follows (in thousands): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Gulf Coast Terminals: Terminaling services fees $ $ $ $ Other Revenue Direct operating costs and expenses Net margins Midwest Terminals and Pipeline System: Terminaling services fees Pipeline transportation fees Other Revenue Direct operating costs and expenses Net margins Brownsville Terminals: Terminaling services fees Pipeline transportation fees Other Revenue Direct operating costs and expenses Net margins River Terminals: Terminaling services fees Other Revenue Direct operating costs and expenses Net margins Southeast Terminals: Terminaling services fees Other Revenue Direct operating costs and expenses Net margins Total net margins Direct general and administrative expenses Allocated general and administrative expenses Allocated insurance expense Reimbursement of bonus awards expense Depreciation and amortization Earnings from unconsolidated affiliates Operating income Other expenses Net earnings $ $ $ $ Supplemental information about our business segments is summarized below (in thousands): Three Months Ended June 30, 2015 Midwest Terminals and Gulf Coast Pipeline Brownsville River Southeast Terminals System Terminals Terminals Terminals Total Revenue: External customers $ $ $ $ $ $ NGL Energy Partners LP — — Frontera — — — — Revenue $ $ $ $ $ $ Capital expenditures $ $ $ $ $ $ Identifiable assets $ $ $ $ $ $ Cash and cash equivalents Investments in unconsolidated affiliates Deferred financing costs Other Total assets $ Three Months Ended June 30, 2014 Midwest Terminals and Gulf Coast Pipeline Brownsville River Southeast Terminals System Terminals Terminals Terminals Total Revenue: External customers $ $ $ $ $ $ Morgan Stanley Capital Group — Frontera — — — — Revenue $ $ $ $ $ $ Capital expenditures $ $ $ $ $ $ Six Months Ended June 30, 2015 Midwest Terminals and Gulf Coast Pipeline Brownsville River Southeast Terminals System Terminals Terminals Terminals Total Revenue: External customers $ $ $ $ $ $ NGL Energy Partners LP — Frontera — — — — Revenue $ $ $ $ $ $ Capital expenditures $ $ $ $ $ $ Six Months Ended June 30, 2014 Midwest Terminals and Gulf Coast Pipeline Brownsville River Southeast Terminals System Terminals Terminals Terminals Total Revenue: External customers $ $ $ $ $ $ Morgan Stanley Capital Group — Frontera — — — — Revenue $ $ $ $ $ $ Capital expenditures $ $ $ $ $ $ r |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2015 | |
SUBSEQUENT EVENT. | |
SUBSEQUENT EVENT | (19) SUBSEQUENT EVENT On July 13, 2015, we announced a distribution of $0.665 per unit for the period from April 1, 2015 through June 30 , 2015. This distribution is payable on August 7, 2015 to unitholders of record on July 31, 2015. |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of business | (a) Nature of business TransMontaigne Partners L.P. (“Partners,” “we,” “us” or “our”) was formed in February 2005 as a Delaware limited partnership initially to own and operate refined petroleum products terminaling and transportation facilities. We conduct our operations in the United States along the Gulf Coast, in the Midwest, in Houston and Brownsville, Texas, along the Mississippi and Ohio rivers, and in the Southeast. We provide integrated terminaling, storage, transportation and related services for companies engaged in the trading, distribution and marketing of light refined petroleum products, heavy refined petroleum products, crude oil, chemicals, fertilizers and other liquid products. We are controlled by our general partner, TransMontaigne GP L.L.C. (“TransMontaigne GP”), which is an indirect wholly ‑owned subsidiary of TransMontaigne LLC. At June 30, 2015, NGL Energy Partners LP (“NGL”) owned all of the issued and outstanding capital stock of TransMontaigne LLC, and as a result NGL is the indirect owner of our general partner. At June 30, 2015, TransMontaigne LLC and NGL had a significant interest in our partnership through their indirect ownership of an approximate 19% limited partner interest, a 2% general partner interest and the incentive distribution rights. Prior to July 1, 2014, Morgan Stanley Capital Group Inc. (“Morgan Stanley Capital Group”), a wholly ‑owned subsidiary of Morgan Stanley and the principal commodities trading arm of Morgan Stanley, owned all of the issued and outstanding capital stock of TransMontaigne LLC, and, as a result, Morgan Stanley was the indirect owner of our general partner. Effective July 1, 2014, Morgan Stanley consummated the sale of its 100% ownership interest in TransMontaigne LLC to NGL. In addition to the sale of our general partner to NGL, NGL acquired the common units owned by TransMontaigne LLC and affiliates of Morgan Stanley and assumed Morgan Stanley Capital Group’s obligations under our light-oil terminaling services agreements in Florida and the Southeast regions, excluding the Collins/Purvis tankage (collectively, the “NGL Acquisition”). All other terminaling services agreements with Morgan Stanley Capital Group remained with Morgan Stanley Capital Group. The NGL Acquisition did not involve the sale or purchase of any of our common units held by the public and our common units continue to trade on the New York Stock Exchange. |
Basis of presentation and use of estimates | (b) Basis of presentation and use of estimates Our accounting and financial reporting policies conform to accounting principles and practices generally accepted in the United States of America. The accompanying consolidated financial statements include the accounts of TransMontaigne Partners L.P., a Delaware limited partnership, and its controlled subsidiaries. Investments where we do not have the ability to exercise control, but do have the ability to exercise significant influence, are accounted for using the equity method of accounting. All inter ‑company accounts and transactions have been eliminated in the preparation of the accompanying consolidated financial statements. The accompanying consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly our financial position as of June 30, 2015 and December 31, 2014 and our results of operations for the three and six months ended June 30, 2015 and 2014. The preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. The following estimates, in management’s opinion, are subjective in nature, require the exercise of judgment, and involve complex analyses: useful lives of our plant and equipment, accrued environmental obligations and determining the fair value of our reporting units when analyzing goodwill. Changes in these estimates and assumptions will occur as a result of the passage of time and the occurrence of future events. Actual results could differ from these estimates. |
Accounting for terminal and pipeline operations | (c) Accounting for terminal and pipeline operations In connection with our terminal and pipeline operations, we utilize the accrual method of accounting for revenue and expenses. We generate revenue in our terminal and pipeline operations from terminaling services fees, transportation fees, management fees and cost reimbursements, fees from other ancillary services and gains from the sale of refined products. Terminaling services revenue is recognized ratably over the term of the agreement for storage fees and minimum revenue commitments that are fixed at the inception of the agreement and when product is delivered to the customer for fees based on a rate per barrel of throughput; transportation revenue is recognized when the product has been delivered to the customer at the specified delivery location; management fee revenue and cost reimbursements are recognized as the services are performed or as the costs are incurred; ancillary service revenue is recognized as the services are performed; and gains from the sale of refined products are recognized when the title to the product is transferred. Pursuant to terminaling services agreements with certain of our throughput customers, we are entitled to the volume of product gained resulting from differences in the measurement of product volumes received and distributed at our terminaling facilities. Consistent with recognized industry practices, measurement differentials occur as the result of the inherent variances in measurement devices and methodology. We recognize as revenue the net proceeds from the sale of the product gained. For the three months ended June 30, 2015 and 2014, we recognized revenue of approximately $ 2.2 million and $ 4.1 million, respectively, for net product gained. Within these amounts, approximately $0. 7 million and $2. 4 million for the three months ended June 30, 2015 and 2014, respectively, were pursuant to terminaling services agreements with affiliate customers. For the six months ended June 30, 2015 and 2014, we recognized revenue of approximately $4.0 million and $ 7.7 million, respectively, for net product gained. Within these amounts, approximately $1.6 million and $4.9 million for the six months ended June 30, 2015 and 2014, respectively, were pursuant to terminaling services agreements with affiliate customers. |
Cash and cash equivalents | (d) Cash and cash equivalents We consider all short ‑term investments with a remaining maturity of three months or less at the date of purchase to be cash equivalents. |
Property, plant and equipment | (e) Property, plant and equipment Depreciation is computed using the straight ‑line method. Estimated useful lives are 15 to 25 years for terminals and pipelines and 3 to 25 years for furniture, fixtures and equipment. All items of property, plant and equipment are carried at cost. Expenditures that increase capacity or extend useful lives are capitalized. Repairs and maintenance are expensed as incurred. We evaluate long ‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable based on expected undiscounted future cash flows attributable to that asset group. If an asset group is impaired, the impairment loss to be recognized is the excess of the carrying amount of the asset group over its estimated fair value. |
Investments in unconsolidated affiliates | (f) Investments in unconsolidated affiliates We account for our investments in our unconsolidated affiliates, which we do not control but do have the ability to exercise significant influence over, using the equity method of accounting. Under this method, the investment is recorded at acquisition cost, increased by our proportionate share of any earnings and additional capital contributions and decreased by our proportionate share of any losses, distributions received and amortization of any excess investment. Excess investment is the amount by which our total investment exceeds our proportionate share of the book value of the net assets of the investment entity. We evaluate our investments in unconsolidated affiliates for impairment whenever events or circumstances indicate there is a loss in value of the investment that is other than temporary. In the event of impairment, we would record a charge to earnings to adjust the carrying amount to fair value. |
Environmental obligations | (g) Environmental obligations We accrue for environmental costs that relate to existing conditions caused by past operations when probable and reasonably estimable (see Note 10 of Notes to consolidated financial statements). Environmental costs include initial site surveys and environmental studies of potentially contaminated sites, costs for remediation and restoration of sites determined to be contaminated and ongoing monitoring costs, as well as fines, damages and other costs, including direct legal costs. Liabilities for environmental costs at a specific site are initially recorded, on an undiscounted basis, when it is probable that we will be liable for such costs, and a reasonable estimate of the associated costs can be made based on available information. Such an estimate includes our share of the liability for each specific site and the sharing of the amounts related to each site that will not be paid by other potentially responsible parties, based on enacted laws and adopted regulations and policies. Adjustments to initial estimates are recorded, from time to time, to reflect changing circumstances and estimates based upon additional information developed in subsequent periods. Estimates of our ultimate liabilities associated with environmental costs are difficult to make with certainty due to the number of variables involved, including the early stage of investigation at certain sites, the lengthy time frames required to complete remediation, technology changes, alternatives available and the evolving nature of environmental laws and regulations. We periodically file claims for insurance recoveries of certain environmental remediation costs with our insurance carriers under our comprehensive liability policies (see Note 5 of Notes to consolidated financial statements). We recognize our insurance recoveries as a credit to income in the period that we assess the likelihood of recovery as being probable (i.e., likely to occur). TransMontaigne LLC agreed to indemnify us against certain potential environmental claims, losses and expenses that were identified on or before May 27, 2010 and that were associated with the ownership or operation of the Florida and Midwest terminal facilities prior to May 27, 2005, up to a maximum liability not to exceed $15.0 million for this indemnification obligation. TransMontaigne LLC agreed to indemnify us against certain potential environmental claims, losses and expenses that were identified on or before December 31, 2011 and that were associated with the ownership or operation of the Brownsville and River facilities prior to December 31, 2006, up to a maximum liability not to exceed $15.0 million for this indemnification obligation. TransMontaigne LLC agreed to indemnify us against certain potential environmental claims, losses and expenses that were identified on or before December 31, 2012 and that were associated with the ownership or operation of the Southeast terminals prior to December 31, 2007, up to a maximum liability not to exceed $15.0 million for this indemnification obligation. TransMontaigne LLC has agreed to indemnify us against certain potential environmental claims, losses and expenses that are identified on or before March 1, 2016 and that were associated with the ownership or operation of the Pensacola terminal prior to March 1, 2011, up to a maximum liability not to exceed $2.5 million for this indemnification obligation. |
Asset retirement obligations | (h) Asset retirement obligations Asset retirement obligations are legal obligations associated with the retirement of long ‑lived assets that result from the acquisition, construction, development or normal use of the asset. Generally accepted accounting principles require that the fair value of a liability related to the retirement of long ‑lived assets be recorded at the time a legal obligation is incurred. Once an asset retirement obligation is identified and a liability is recorded, a corresponding asset is recorded, which is depreciated over the remaining useful life of the asset. After the initial measurement, the liability is adjusted to reflect changes in the asset retirement obligation. If and when it is determined that a legal obligation has been incurred, the fair value of any liability is determined based on estimates and assumptions related to retirement costs, future inflation rates and interest rates. Our long ‑lived assets consist of above ‑ground storage facilities and underground pipelines. We are unable to predict if and when these long ‑lived assets will become completely obsolete and require dismantlement. We have not recorded an asset retirement obligation, or corresponding asset, because the future dismantlement and removal dates of our long ‑lived assets is indeterminable and the amount of any associated costs are believed to be insignificant. Changes in our assumptions and estimates may occur as a result of the passage of time and the occurrence of future events. |
Equity-based compensation | (i) Equity based compensation Generally accepted accounting principles require us to measure the cost of services received in exchange for an award of equity instruments based on the measurement ‑date fair value of the award. That cost is recognized during the period services are provided in exchange for the award. |
Accounting for derivative instruments | (j) Accounting for derivative instruments Generally accepted accounting principles require us to recognize all derivative instruments at fair value in the consolidated balance sheets as assets or liabilities (see Note 11 of Notes to consolidated financial statements). Changes in the fair value of our derivative instruments are recognized in earnings. We did not have any derivative instruments at December 31, 2014. At June 30, 2015, our derivative instruments were limited to interest rate swap agreements with an aggregate notional amount of $75.0 million that expire March 25, 2018. Pursuant to the terms of the interest rate swap agreements, we pay a blended fixed rate of approximately 1.05% and receive interest payments based on the one-month LIBOR. The net difference to be paid or received under the interest rate swap agreements is settled monthly and is recognized as an adjustment to interest expense. The fair value of our interest rate swap agreements are determined using a pricing model based on the LIBOR swap rate and other observable market data. |
Income taxes | (k) Income taxes No provision for U.S. federal income taxes has been reflected in the accompanying consolidated financial statements because Partners is treated as a partnership for federal income taxes. As a partnership, all income, gains, losses, expenses, deductions and tax credits generated by Partners flow through to its unitholders. Partners is a taxable entity under certain U.S. state jurisdictions, primarily Texas. Partners accounts for U.S. state income taxes under the asset and liability method pursuant to generally accepted accounting principles. U.S. state income taxes are not material. |
Net earnings per limited partner unit | (l) Net earnings per limited partner unit Net earnings allocable to the limited partners, for purposes of calculating net earnings per limited partner unit, are net of the earnings allocable to the general partner interest and distributions payable to any restricted phantom units granted under our equity based compensation plans that participate in Partners’ distributions (see Note 15 of Notes to consolidated financial statements). The earnings allocable to the general partner interest include the distributions of available cash (as defined by our partnership agreement) attributable to the period to the general partner interest, net of adjustments for the general partner’s share of undistributed earnings, and the incentive distribution rights. Undistributed earnings are the difference between the earnings and the distributions attributable to the period. Undistributed earnings are allocated to the limited partners and general partner interest based on their respective sharing of earnings or losses specified in the partnership agreement, which is based on their ownership percentages of 98% and 2% , respectively. The incentive distribution rights are not allocated a portion of the undistributed earnings given they are not entitled to distributions other than from available cash. Further, the incentive distribution rights do not share in losses under our partnership agreement. Basic net earnings per limited partner unit is computed by dividing net earnings allocable to limited partners by the weighted average number o f limited partner units outstanding during the period. Diluted net earnings per limited partner unit is computed by dividing net earnings allocable to the limited partners by the weighted avera ge number of limited partner units outstanding during the period and any potential dilutive securities outstanding during the period. |
Recent Accounting Pronouncements | (m) Recent accounting pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The objective of this update is to clarify the principles for recognizing revenue and to develop a common revenue standard. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We are currently evaluating the potential impact that the adoption will have on our disclosures and financial statements. |
CONCENTRATION OF CREDIT RISK 28
CONCENTRATION OF CREDIT RISK AND TRADE ACCOUNTS RECEIVABLE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
CONCENTRATION OF CREDIT RISK AND TRADE ACCOUNTS RECEIVABLE | |
Schedule of trade accounts receivable, net (in thousands) | Trade accounts receivable, net consists of the following (in thousands): June 30, December 31, 2015 2014 Trade accounts receivable $ $ Less allowance for doubtful accounts $ $ |
Schedule of customer who accounted for at least 10% of consolidated revenue | Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 NGL Energy Partners LP % — % % — % Morgan Stanley Capital Group % % % % RaceTrac Petroleum Inc. % % % % |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
OTHER ASSETS, NET | |
Schedule of other current assets (in thousands) | Other current assets are as follows (in thousands): June 30, December 31, 2015 2014 Amounts due from insurance companies $ $ Additive detergent Deposits and other assets $ $ |
PROPERTY, PLANT AND EQUIPMENT30
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |
Schedule of property, plant and equipment, net (in thousands) | Property, plant and equipment, net is as follows (in thousands): June 30, December 31, 2015 2014 Land $ $ Terminals, pipelines and equipment Furniture, fixtures and equipment Construction in progress Less accumulated depreciation $ $ |
GOODWILL (Tables)
GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
GOODWILL. | |
Schedule of goodwill (in thousands) | Goodwill is as follows (in thousands): June 30, December 31, 2015 2014 Brownsville terminals $ $ |
INVESTMENTS IN UNCONSOLIDATED32
INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | |
Summary of investments in unconsolidated affiliates | Percentage of Carrying value ownership (in thousands) June 30, December 31, June 30, December 31, 2015 2014 2015 2014 BOSTCO % % $ $ Frontera % % Total investments in unconsolidated affiliates $ $ |
Schedule of earnings (losses) from investments in unconsolidated affiliates (in thousands) | Earnings from investments in unconsolidated affiliates were as follows (in thousands): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 BOSTCO $ $ $ $ Frontera Total earnings from investments in unconsolidated affiliates $ $ $ $ |
Schedule of additional capital investments in unconsolidated affiliates (in thousands) | Additional capital investments in unconsolidated affiliates were as follows (in thousands): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 BOSTCO $ — $ $ — $ Frontera — — — Additional capital investments in unconsolidated affiliates $ — $ $ — $ |
Schedule of cash distributions received from unconsolidated affiliates (in thousands) | Cash distributions received from unconsolidated affiliates were as follows (in thousands): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 BOSTCO $ $ $ $ Frontera Cash distributions received from unconsolidated affiliates $ $ $ $ |
Summary of financial information of unconsolidated affiliates | The summarized financial information of our unconsolidated affiliates was as follows (in thousands): Balance sheets: BOSTCO Frontera June 30, December 31, June 30, December 31, 2015 2014 2015 2014 Current assets $ $ $ $ Long-term assets Current liabilities Long-term liabilities — — — — Net assets $ $ $ $ Statements of operations: BOSTCO Frontera Three Months Ended Three Months Ended June 30, June 30, 2015 2014 2015 2014 Revenue $ $ $ $ Expenses Net earnings (loss) $ $ $ $ BOSTCO Frontera Six months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Revenue $ $ $ $ Expenses Net earnings $ $ $ $ |
OTHER ASSETS, NET (Tables)
OTHER ASSETS, NET (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
OTHER ASSETS, NET | |
Schedule of other assets, net (in thousands) | Other assets, net are as follows (in thousands): June 30, December 31, 2015 2014 Amounts due under long-term terminaling services agreements: External customers $ $ Affiliates Deferred financing costs, net of accumulated amortization of $3,612 and $3,278 , respectively Customer relationships, net of accumulated amortization of $1,789 and $1,687 , respectively Deposits and other assets $ $ |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
ACCRUED LIABILITIES | |
Schedule of accrued liabilities (in thousands) | Accrued liabilities are as follows (in thousands): June 30, December 31, 2015 2014 Customer advances and deposits: External customers $ $ Affiliates — Accrued property taxes Accrued environmental obligations Interest payable Rebate due to affiliate — Accrued expenses and other $ $ |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
OTHER LIABILITIES | |
Schedule of other liabilities (in thousands) | Other liabilities are as follows (in thousands): June 30, December 31, 2015 2014 Advance payments received under long-term terminaling services agreements $ $ Deferred revenue—ethanol blending fees and other projects Unrealized loss on derivative instruments — $ $ |
PARTNERS' EQUITY (Tables)
PARTNERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
PARTNERS' EQUITY | |
Schedule of number of units outstanding | General Common partner units equivalent units Units outstanding at June 30, 2015 and December 31, 2014 |
EQUITY BASED COMPENSATION (Tabl
EQUITY BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Schedule of long-term incentive plan activity | Restricted Available for phantom future grant units Units available at December 31, 2014 Automatic increase in units available for future grant on January 1, 2015 — Units available at June 30, 2015 |
TransMontaigne LLC-related party | |
Schedule of long-term incentive plan activity | NYSE closing Vested Unvested price Restricted phantom units outstanding at December 31, 2014 — — Grant on April 13, 2015 $ Unit accrual for distributions paid on May 7, 2015 $ Restricted phantom units outstanding at June 30, 2015 |
NET EARNINGS PER LIMITED PART38
NET EARNINGS PER LIMITED PARTNER UNIT (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
NET EARNINGS PER LIMITED PARTNER UNIT | |
Schedule of reconciliation of net earnings to net earnings allocable to limited partners (in thousands) | The following table reconciles net earnings to net earnings allocable to limited partners and sets forth the computation of basic and diluted net earnings per limited partner unit (in thousands): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Net earnings $ $ $ $ Less: Distributions payable on behalf of incentive distribution rights Distributions payable on behalf of general partner interest Earnings allocable to general partner interest less than distributions payable to general partner interest Earnings allocable to general partner interest including incentive distribution rights Net earnings allocable to limited partners per the consolidated statements of operations Less distributions payable for unvested long-term incentive plan grants Less value of distributions payable in equivalent units for outstanding vested equity awards to TransMontaigne LLC — — Net earnings allocable to limited partners for calculating net earnings per limited partner unit $ $ $ $ Basic weighted average units Diluted weighted average units Net earnings per limited partner unit—basic $ $ $ $ Net earnings per limited partner unit—diluted $ $ $ $ |
Schedule of distribution declared per common unit attributable to the periods | Distribution January 1, 2014 through March 31, 2014 $ April 1, 2014 through June 30, 2014 $ July 1, 2014 through September 30, 2014 $ October 1, 2014 through December 31, 2014 $ January 1, 2015 through March 31, 2015 $ April 1, 2015 through June 30, 2015 $ |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of future minimum lease payments under non-cancelable operating leases (in thousands) | At June 30, 2015, future minimum lease payments under these non ‑cancelable operating leases are as follows (in thousands): Years ending December 31: 2015 (remainder of the year) $ 2016 2017 2018 2019 Thereafter $ |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
BUSINESS SEGMENTS | |
Schedule of information related to financial performance of business segments (in thousands) | The financial performance of our business segments is as follows (in thousands): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Gulf Coast Terminals: Terminaling services fees $ $ $ $ Other Revenue Direct operating costs and expenses Net margins Midwest Terminals and Pipeline System: Terminaling services fees Pipeline transportation fees Other Revenue Direct operating costs and expenses Net margins Brownsville Terminals: Terminaling services fees Pipeline transportation fees Other Revenue Direct operating costs and expenses Net margins River Terminals: Terminaling services fees Other Revenue Direct operating costs and expenses Net margins Southeast Terminals: Terminaling services fees Other Revenue Direct operating costs and expenses Net margins Total net margins Direct general and administrative expenses Allocated general and administrative expenses Allocated insurance expense Reimbursement of bonus awards expense Depreciation and amortization Earnings from unconsolidated affiliates Operating income Other expenses Net earnings $ $ $ $ |
Schedule of supplemental information about consolidated business segments (in thousands) | Supplemental information about our business segments is summarized below (in thousands): Three Months Ended June 30, 2015 Midwest Terminals and Gulf Coast Pipeline Brownsville River Southeast Terminals System Terminals Terminals Terminals Total Revenue: External customers $ $ $ $ $ $ NGL Energy Partners LP — — Frontera — — — — Revenue $ $ $ $ $ $ Capital expenditures $ $ $ $ $ $ Identifiable assets $ $ $ $ $ $ Cash and cash equivalents Investments in unconsolidated affiliates Deferred financing costs Other Total assets $ Three Months Ended June 30, 2014 Midwest Terminals and Gulf Coast Pipeline Brownsville River Southeast Terminals System Terminals Terminals Terminals Total Revenue: External customers $ $ $ $ $ $ Morgan Stanley Capital Group — Frontera — — — — Revenue $ $ $ $ $ $ Capital expenditures $ $ $ $ $ $ Six Months Ended June 30, 2015 Midwest Terminals and Gulf Coast Pipeline Brownsville River Southeast Terminals System Terminals Terminals Terminals Total Revenue: External customers $ $ $ $ $ $ NGL Energy Partners LP — Frontera — — — — Revenue $ $ $ $ $ $ Capital expenditures $ $ $ $ $ $ Six Months Ended June 30, 2014 Midwest Terminals and Gulf Coast Pipeline Brownsville River Southeast Terminals System Terminals Terminals Terminals Total Revenue: External customers $ $ $ $ $ $ Morgan Stanley Capital Group — Frontera — — — — Revenue $ $ $ $ $ $ Capital expenditures $ $ $ $ $ $ |
SUMMARY OF SIGNIFICANT ACCOUN41
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Jul. 01, 2014 | |
Limited partner interest (as a percent) | 98.00% | |||||
General partner interest (as a percent) | 2.00% | 2.00% | ||||
Allocated general and administrative expenses | $ 2,802 | $ 2,782 | $ 5,605 | $ 5,564 | ||
Allocated insurance charges | 934 | 913 | 1,868 | 1,827 | ||
Reimbursement of bonus awards | 539 | 375 | 1,064 | 750 | ||
Revenue recognized from proceeds of sale of product gained | 2,200 | 4,100 | 4,000 | 7,700 | ||
Recognized revenue pursuant to terminaling services agreements with affiliate customers | $ 700 | $ 2,400 | $ 1,600 | $ 4,900 | ||
NGL | ||||||
Limited partner interest (as a percent) | 19.00% | |||||
General partner interest (as a percent) | 2.00% | |||||
Morgan Stanley | TransMontaigne LLC-related party | ||||||
Ownership interest sold (as a percent) | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property (Details) | 6 Months Ended |
Jun. 30, 2015 | |
Terminals and pipelines | Minimum | |
Property, plant and equipment | |
Estimated useful lives | 15 years |
Terminals and pipelines | Maximum | |
Property, plant and equipment | |
Estimated useful lives | 25 years |
Furniture, fixtures and equipment | Minimum | |
Property, plant and equipment | |
Estimated useful lives | 3 years |
Furniture, fixtures and equipment | Maximum | |
Property, plant and equipment | |
Estimated useful lives | 25 years |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Taxes, Derivatives (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Net earnings per limited partner unit | ||
Limited partner interest (as a percent) | 98.00% | |
General partner interest (as a percent) | 2.00% | 2.00% |
Interest Rate Swap | ||
Net earnings per limited partner unit | ||
Notional amount | $ 75 | |
Fixed interest rate paid (as a percent) | 1.05% |
TRANSACTIONS WITH AFFILIATES (D
TRANSACTIONS WITH AFFILIATES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Transactions with affiliates | ||||
Annual administrative fee paid | $ 2,802 | $ 2,782 | $ 5,605 | $ 5,564 |
Annual insurance reimbursement paid | 934 | 913 | 1,868 | 1,827 |
Reimbursement of bonus awards | 539 | 375 | $ 1,064 | 750 |
TransMontaigne LLC-related party | Omnibus agreement | ||||
Transactions with affiliates | ||||
Notice period for termination of service agreement | 24 months | |||
Annual administrative fee paid | 2,800 | 2,800 | $ 5,600 | 5,600 |
Annual insurance reimbursement paid | 900 | 900 | 1,900 | 1,800 |
Reimbursement of bonus awards | $ 500 | $ 400 | $ 1,100 | $ 800 |
Period, following receipt of the notice, to purchase the subject facilities by related party | 45 days | |||
TransMontaigne LLC-related party | Minimum | Omnibus agreement | ||||
Transactions with affiliates | ||||
Reimbursement of bonus awards | $ 1,500 | |||
Percentage of purchase price offered by third party bidder agreed to be paid for right of refusal to purchase the entity's assets | 105.00% | |||
Percentage of fees offered by third party agreed to be paid for right of refusal to contract | 105.00% |
TRANSACTIONS WITH AFFILIATES -
TRANSACTIONS WITH AFFILIATES - Agreements (Details) | Oct. 31, 2014USD ($)bbl | Jul. 01, 2014USD ($) | Mar. 01, 2014 | Jul. 11, 2011USD ($)bbl | May. 31, 2013USD ($) | Jan. 31, 2010USD ($)bbl | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Apr. 01, 2011 |
TransMontaigne LLC-related party | Florida and Midwest terminals | Maximum | ||||||||||
Transactions with affiliates | ||||||||||
Maximum liability for indemnification obligation | $ 15,000,000 | $ 15,000,000 | ||||||||
TransMontaigne LLC-related party | Brownsville and River terminals | Maximum | ||||||||||
Transactions with affiliates | ||||||||||
Maximum liability for indemnification obligation | 15,000,000 | 15,000,000 | ||||||||
TransMontaigne LLC-related party | Southeast Terminals | Maximum | ||||||||||
Transactions with affiliates | ||||||||||
Maximum liability for indemnification obligation | 15,000,000 | 15,000,000 | ||||||||
TransMontaigne LLC-related party | Pensacola terminal | Maximum | ||||||||||
Transactions with affiliates | ||||||||||
Maximum liability for indemnification obligation | 2,500,000 | 2,500,000 | ||||||||
Environmental indemnification | TransMontaigne LLC-related party | Florida and Midwest terminals | ||||||||||
Transactions with affiliates | ||||||||||
Liability for indemnification obligation, if aggregate losses do not exceed specified amount | 0 | 0 | ||||||||
Liability for indemnification obligation related to environmental claims made as a result of additions to or modifications of environmental laws | 0 | 0 | ||||||||
Environmental indemnification | TransMontaigne LLC-related party | Florida and Midwest terminals | Minimum | ||||||||||
Transactions with affiliates | ||||||||||
Aggregate losses for indemnification obligation | 250,000 | |||||||||
Environmental indemnification | TransMontaigne LLC-related party | Florida and Midwest terminals | Maximum | ||||||||||
Transactions with affiliates | ||||||||||
Maximum liability for indemnification obligation | 15,000,000 | 15,000,000 | ||||||||
Environmental indemnification | TransMontaigne LLC-related party | Brownsville and River terminals | ||||||||||
Transactions with affiliates | ||||||||||
Liability for indemnification obligation, if aggregate losses do not exceed specified amount | 0 | 0 | ||||||||
Liability for indemnification obligation related to environmental claims made as a result of additions to or modifications of environmental laws | 0 | 0 | ||||||||
Environmental indemnification | TransMontaigne LLC-related party | Brownsville and River terminals | Minimum | ||||||||||
Transactions with affiliates | ||||||||||
Aggregate losses for indemnification obligation | 250,000 | |||||||||
Environmental indemnification | TransMontaigne LLC-related party | Brownsville and River terminals | Maximum | ||||||||||
Transactions with affiliates | ||||||||||
Maximum liability for indemnification obligation | 15,000,000 | 15,000,000 | ||||||||
Environmental indemnification | TransMontaigne LLC-related party | Southeast Terminals | ||||||||||
Transactions with affiliates | ||||||||||
Liability for indemnification obligation, if aggregate losses do not exceed specified amount | 0 | 0 | ||||||||
Liability for indemnification obligation related to environmental claims made as a result of additions to or modifications of environmental laws | 0 | 0 | ||||||||
Environmental indemnification | TransMontaigne LLC-related party | Southeast Terminals | Minimum | ||||||||||
Transactions with affiliates | ||||||||||
Aggregate losses for indemnification obligation | 250,000 | |||||||||
Environmental indemnification | TransMontaigne LLC-related party | Southeast Terminals | Maximum | ||||||||||
Transactions with affiliates | ||||||||||
Maximum liability for indemnification obligation | 15,000,000 | 15,000,000 | ||||||||
Environmental indemnification | TransMontaigne LLC-related party | Pensacola terminal | ||||||||||
Transactions with affiliates | ||||||||||
Liability for indemnification obligation related to environmental claims made as a result of additions to or modifications of environmental laws | 0 | 0 | ||||||||
Environmental indemnification | TransMontaigne LLC-related party | Pensacola terminal | Minimum | ||||||||||
Transactions with affiliates | ||||||||||
Aggregate losses for indemnification obligation | 200,000 | |||||||||
Environmental indemnification | TransMontaigne LLC-related party | Pensacola terminal | Maximum | ||||||||||
Transactions with affiliates | ||||||||||
Maximum liability for indemnification obligation | 2,500,000 | $ 2,500,000 | ||||||||
Terminaling services agreement-Florida and Midwest terminals | ||||||||||
Transactions with affiliates | ||||||||||
Term of lease agreement | 10 years | |||||||||
Percentage of capacity of Razorback terminals and the Razorback pipeline covered under the agreement | 100.00% | |||||||||
Terminaling services agreement-Florida and Midwest terminals | NGL | ||||||||||
Transactions with affiliates | ||||||||||
Notice period for termination of service agreement | 18 months | |||||||||
Storage capacity agreed to be provided (in barrels) | bbl | 1,100,000 | |||||||||
Storage capacity under commitment re-contracted (in barrels) | bbl | 500,000 | |||||||||
Terminaling services agreement-Florida and Midwest terminals | NGL | Minimum | ||||||||||
Transactions with affiliates | ||||||||||
Revenue per the agreement | $ 5,700,000 | |||||||||
Number of consecutive days for which diminution in the storage capacity the entity makes available to related party due to force majeure event as a result of which related party's minimum revenue commitment would be reduced proportionately | 30 days | |||||||||
Terminaling services agreement-Cushing terminal | Morgan Stanley Capital Group | ||||||||||
Transactions with affiliates | ||||||||||
Notice period for termination of service agreement | 180 days | |||||||||
Storage capacity agreed to be provided (in barrels) | bbl | 1,000,000 | |||||||||
Term of lease agreement | 1 year | |||||||||
Automatic renewal period of service agreement | 5 years | |||||||||
Terminaling services agreement-Cushing terminal | Morgan Stanley Capital Group | Minimum | ||||||||||
Transactions with affiliates | ||||||||||
Revenue per the agreement | $ 4,300,000 | |||||||||
Number of consecutive days for which diminution in the storage capacity the entity makes available to related party due to force majeure event as a result of which related party's minimum revenue commitment would be reduced proportionately | 120 days | |||||||||
Terminaling services agreement-Southeast terminals | Minimum | ||||||||||
Transactions with affiliates | ||||||||||
Notice period for termination of service agreement | 24 months | |||||||||
Terminaling services agreement-Southeast terminals | NGL | Minimum | ||||||||||
Transactions with affiliates | ||||||||||
Notice period for termination of service agreement | 24 months | |||||||||
Revenue per the agreement | $ 27,000,000 | |||||||||
Number of consecutive days for which diminution in the storage capacity the entity makes available to related party due to force majeure event as a result of which related party's minimum revenue commitment would be reduced proportionately | 30 days | |||||||||
Terminaling services agreement-Collins/Purvis | Morgan Stanley Capital Group | ||||||||||
Transactions with affiliates | ||||||||||
Storage capacity agreed to be provided (in barrels) | bbl | 700,000 | |||||||||
Term of lease agreement | 1 year | |||||||||
Terminaling services agreement-Collins/Purvis | Morgan Stanley Capital Group | Minimum | ||||||||||
Transactions with affiliates | ||||||||||
Notice period for termination of service agreement | 24 months | |||||||||
Revenue per the agreement | $ 4,100,000 | |||||||||
Number of consecutive days for which diminution in the storage capacity the entity makes available to related party due to force majeure event as a result of which related party's minimum revenue commitment would be reduced proportionately | 30 days | |||||||||
Barge dock services agreement-Baton Rouge dock | Morgan Stanley Capital Group | ||||||||||
Transactions with affiliates | ||||||||||
Notice period for termination of service agreement | 180 days | |||||||||
Number of consecutive days for which diminution in the storage capacity the entity makes available to related party due to force majeure event as a result of which related party's minimum revenue commitment would be reduced proportionately | 120 days | |||||||||
Automatic renewal period of service agreement | 5 years | |||||||||
Minimum throughput payments for the first three years | $ 1,200,000 | |||||||||
First period, following the in-service date, over which minimum throughput payments are received | 3 years | |||||||||
Minimum throughput payments for the remaining seven years | $ 900,000 | |||||||||
Remaining period, following the first three year period after the in-service date, over which minimum throughput payments are received | 7 years | |||||||||
Operations and reimbursement agreement-Frontera | Frontera | ||||||||||
Transactions with affiliates | ||||||||||
Ownership interest in joint venture (as a percent) | 50.00% | |||||||||
Revenue recognized | $ 1,000,000 | $ 1,000,000 |
TERMINAL ACQUISITION (Details)
TERMINAL ACQUISITION (Details) - BOSTCO $ in Millions | Jun. 05, 2013USD ($)bbl | Dec. 20, 2012USD ($) | Dec. 31, 2013itembbl |
Acquisitions | |||
Number of storage tanks, the construction of which is involved in the initial phase of acquisition | item | 51 | ||
Storage capacity of storage tanks, the construction of which is involved in the initial phase of acquisition (in barrels) | bbl | 6,200,000 | ||
Number of barrels involved in the expansion phase of acquisition | bbl | 900,000 | ||
Fully subscribed storage capacity of storage tanks after initial phase and expansion projects | bbl | 7,100,000 | ||
Storage tanks, cost of construction | $ 530 | ||
Estimated overall construction cost of storage tanks including initial phase and expansion projects | $ 234 | ||
Class A Members | Kinder Morgan | |||
Acquisitions | |||
Percentage of ownership | 42.50% | ||
Cost of voting interest acquired | $ 79 |
CONCENTRATION OF CREDIT RISK 47
CONCENTRATION OF CREDIT RISK AND TRADE ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Concentration of credit risk and trade accounts receivable | |||||
Trade accounts receivable | $ 10,511 | $ 10,511 | $ 9,823 | ||
Less allowance for doubtful accounts | (464) | (464) | (464) | ||
Trade accounts receivable, net | $ 10,047 | $ 10,047 | $ 9,359 | ||
NGL Energy Partners LP | |||||
Concentration of credit risk and trade accounts receivable | |||||
Percentage of total revenue generated by major customer | 25.00% | 28.00% | |||
Morgan Stanley Capital Group | |||||
Concentration of credit risk and trade accounts receivable | |||||
Percentage of total revenue generated by major customer | 12.00% | 58.00% | 13.00% | 60.00% | |
RaceTrac Petroleum Inc | |||||
Concentration of credit risk and trade accounts receivable | |||||
Percentage of total revenue generated by major customer | 11.00% | 5.00% | 10.00% | 5.00% |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
OTHER ASSETS, NET | ||
Amounts due from insurance companies | $ 844 | $ 1,233 |
Additive detergent | 1,404 | 1,591 |
Deposits and other assets | 131 | 241 |
Other current assets | 2,379 | $ 3,065 |
Reimbursements from insurance companies | 300 | |
Decrease estimated insurance recovery | $ 100 |
PROPERTY, PLANT AND EQUIPMENT49
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Property, plant and equipment, net | ||
Property, plant and equipment, gross | $ 642,909 | $ 626,762 |
Less accumulated depreciation | (256,172) | (241,461) |
Property, plant and equipment, net | 386,737 | 385,301 |
Land | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | 52,519 | 52,519 |
Terminals, pipelines and equipment | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | 578,386 | 566,677 |
Furniture, fixtures and equipment | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | 2,184 | 2,122 |
Construction in progress | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | $ 9,820 | $ 5,444 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Goodwill | ||
Goodwill | $ 8,485 | $ 8,485 |
Brownsville terminals | ||
Goodwill | ||
Goodwill | $ 8,485 | $ 8,485 |
INVESTMENTS IN UNCONSOLIDATED51
INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Details) $ in Thousands, bbl in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015USD ($) | Sep. 30, 2014bbl | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)bbl | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | ||||||
Carrying value of investments in unconsolidated affiliates | $ 249,297 | $ 249,297 | $ 249,676 | |||
Total earnings (loss) from investments in unconsolidated affiliates | 5,517 | $ 1,275 | 7,573 | $ 1,438 | ||
Additional capital investments in unconsolidated affiliates | 5,380 | 23,397 | ||||
Cash distributions from unconsolidated affiliates | $ 4,310 | 1,688 | $ 7,952 | 2,438 | ||
BOSTCO | ||||||
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | ||||||
Storage capacity | bbl | 7.1 | |||||
Percentage of ownership | 42.50% | 42.50% | 42.50% | |||
Carrying value of investments in unconsolidated affiliates | $ 225,686 | $ 225,686 | $ 225,920 | |||
Excess investment | 7,500 | 7,500 | 7,800 | |||
Total earnings (loss) from investments in unconsolidated affiliates | 4,793 | 1,329 | 6,574 | 1,249 | ||
Additional capital investments in unconsolidated affiliates | 5,380 | 23,352 | ||||
Cash distributions from unconsolidated affiliates | 3,674 | 1,044 | 6,808 | 1,157 | ||
Balance sheets: | ||||||
Current assets | 18,723 | 18,723 | 19,400 | |||
Long-term assets | 503,827 | 503,827 | 511,373 | |||
Current liabilities | (9,524) | (9,524) | (17,435) | |||
Net assets | 513,026 | 513,026 | $ 513,338 | |||
Statements of comprehensive income (loss): | ||||||
Revenue | 22,967 | 12,406 | 38,854 | 20,743 | ||
Expenses | (11,157) | (9,203) | (22,624) | (17,658) | ||
Net earnings and comprehensive income (loss) | $ 11,810 | 3,203 | $ 16,230 | 3,085 | ||
Frontera | ||||||
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | ||||||
Storage capacity | bbl | 1.5 | |||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | |||
Carrying value of investments in unconsolidated affiliates | $ 23,611 | $ 23,611 | $ 23,756 | |||
Total earnings (loss) from investments in unconsolidated affiliates | 724 | (54) | 999 | 189 | ||
Additional capital investments in unconsolidated affiliates | 45 | |||||
Cash distributions from unconsolidated affiliates | 636 | 644 | 1,144 | 1,281 | ||
Balance sheets: | ||||||
Current assets | 5,233 | 5,233 | 4,222 | |||
Long-term assets | 43,344 | 43,344 | 44,528 | |||
Current liabilities | (1,355) | (1,355) | (1,238) | |||
Net assets | 47,222 | 47,222 | $ 47,512 | |||
Statements of comprehensive income (loss): | ||||||
Revenue | 4,251 | 3,415 | 7,891 | 6,460 | ||
Expenses | (2,803) | (3,523) | (5,893) | (6,082) | ||
Net earnings and comprehensive income (loss) | $ 1,448 | $ (108) | $ 1,998 | $ 378 |
OTHER ASSETS, NET (Details)
OTHER ASSETS, NET (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Amounts due under long-term terminaling services agreements: | ||
External customers | $ 431 | $ 649 |
Affiliates | 732 | 945 |
Amounts due under long-term terminaling services agreements | 1,163 | 1,594 |
Deferred financing costs, net of accumulated amortization | 2,059 | 1,138 |
Customer relationships, net of accumulated amortization | 641 | 743 |
Deposits and other assets | 77 | 76 |
Other assets, net | 3,940 | 3,551 |
Accumulated amortization of deferred financing costs | 3,612 | 3,278 |
Accumulated amortization of customer relationships | $ 1,789 | $ 1,687 |
Amortization period of customer relationships | 12 years |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Jan. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Customer advances and deposits: | |||
External customers | $ 2,795 | $ 2,756 | |
Affiliates | 2,584 | ||
Customer advances and deposits | 5,379 | 2,756 | |
Accrued property taxes | 2,595 | 892 | |
Accrued environmental obligations | 1,122 | 1,524 | |
Interest payable | 135 | 159 | |
Rebate due to affiliates | 1,795 | ||
Accrued expenses and other | 2,300 | 2,709 | |
Accrued liabilities | $ 11,531 | $ 9,835 | |
Period for billing of customers in advance for terminaling services | 1 month | ||
Accrued environmental obligations | |||
Payments | $ 300 | ||
Increase in remediation obligations due to change in estimate | $ (100) | ||
Agreed rebate as a percentage of proceeds in excess of threshold sales | 50.00% | ||
Threshold sales to provide rebate | $ 4,200 | ||
Payment of rebate to related party | $ 1,800 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
OTHER LIABILITIES | |||||
Advance payments received under long-term terminaling services agreements | $ 359 | $ 359 | $ 451 | ||
Deferred revenue-ethanol blending fees and other projects | 2,852 | 2,852 | 3,419 | ||
Unrealized loss on derivative instrument | 90 | 90 | |||
Other liabilities | 3,301 | 3,301 | $ 3,870 | ||
Recognized revenue on a straight line basis for completed projects | $ 300 | $ 700 | $ 600 | $ 1,400 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2014 | Jun. 30, 2015USD ($)item | Jun. 30, 2014 | Dec. 31, 2014USD ($) | |
Long-term debt | |||||
Restricted net assets | $ 0 | $ 0 | |||
TLP Finance Corp | |||||
Long-term debt | |||||
Ownership interest in subsidiary (as a percent) | 100.00% | ||||
Amount of independent assets | 0 | $ 0 | |||
Amount of independent operations | 0 | ||||
Credit Facility | |||||
Long-term debt | |||||
Maximum borrowing capacity | 400,000,000 | 400,000,000 | $ 350,000,000 | ||
Optional increase to maximum borrowing capacity | 100,000,000 | $ 100,000,000 | |||
Consolidated EBITDA multiplier | item | 4.75 | ||||
Maximum borrowing capacity based on 4.75 times Consolidated EBITDA | $ 375,500,000 | $ 375,500,000 | |||
Weighted average interest rate on borrowings (as a percent) | 2.90% | 2.60% | 2.80% | 2.60% | |
Outstanding borrowings under credit facility | $ 257,000,000 | $ 257,000,000 | 252,000,000 | ||
Outstanding borrowings under letters of credit | $ 0 | $ 0 | $ 0 | ||
Credit Facility | Minimum | |||||
Long-term debt | |||||
Commitment fee on unused amount of commitments (as a percent) | 0.375% | ||||
Interest coverage ratio | 3 | 3 | |||
Credit Facility | Minimum | LIBOR | |||||
Long-term debt | |||||
Margin interest above reference rate (as a percent) | 2.00% | ||||
Credit Facility | Minimum | Base Rate | |||||
Long-term debt | |||||
Margin interest above reference rate (as a percent) | 1.00% | ||||
Credit Facility | Maximum | |||||
Long-term debt | |||||
Commitment fee on unused amount of commitments (as a percent) | 0.50% | ||||
Other investments as a percentage of consolidated net tangible assets | 5.00% | ||||
Permitted JV investments subject to liquidity | $ 125,000,000 | ||||
Leverage ratio | 4.75 | 4.75 | |||
Senior secured leverage ratio | 3.75 | 3.75 | |||
Credit Facility | Maximum | LIBOR | |||||
Long-term debt | |||||
Margin interest above reference rate (as a percent) | 3.00% | ||||
Credit Facility | Maximum | Base Rate | |||||
Long-term debt | |||||
Margin interest above reference rate (as a percent) | 2.00% |
PARTNERS' EQUITY (Details)
PARTNERS' EQUITY (Details) - Long-term incentive plan - shares | Jun. 30, 2015 | Dec. 31, 2014 |
Information related to public offering | ||
Common units held on behalf of TransMontaigne Services Inc.'s long-term incentive plan | 2,750,868 | |
Common unitholders | ||
Information related to public offering | ||
Common units held on behalf of TransMontaigne Services Inc.'s long-term incentive plan | 10,268 | 7,600 |
EQUITY BASED COMPENSATION (Deta
EQUITY BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 01, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Incentive plan activity | |||||
Available for future grant, outstanding at the beginning of the period | 2,179,457 | ||||
Automatic increase in units available for future grant | 322,491 | ||||
Available for future grant, outstanding at the end of the period | 2,501,948 | 2,501,948 | |||
Restricted phantom units | |||||
Incentive plan activity | |||||
Units outstanding at the beginning of the period | 9,000 | ||||
Units outstanding at the end of the period | 9,000 | 9,000 | |||
Restricted phantom units | TransMontaigne LLC-related party | |||||
Incentive plan activity | |||||
Grant (in units) | 28,399 | ||||
Unit accrual for distributions (in units) | 540 | ||||
Units outstanding at the end of the period | 28,939 | 28,939 | |||
Grant (in dollars per unit) | $ 34.02 | ||||
Accrual for distribution (in dollars per unit) | $ 34.95 | ||||
Grant, nonvested (in units) | 29,644 | ||||
Unit accrual for distributions, nonvested (in units) | 564 | ||||
Units, nonvested, outstanding at the end of the period | 30,208 | 30,208 | |||
Additional disclosures | |||||
Deferred equity-based compensation | $ 500 | $ 400 | $ 1,100 | $ 800 | |
Vesting (as a percent) | 50.00% | ||||
Restricted phantom units | TransMontaigne LLC-related party | Vesting Tranche One | |||||
Additional disclosures | |||||
Age to eligible for award | 60 years | ||||
Restricted phantom units | TransMontaigne LLC-related party | Vesting Tranche Two | |||||
Additional disclosures | |||||
Age to eligible for award | 55 years | ||||
Service period to be eligible for award | 10 years | ||||
Restricted phantom units | TransMontaigne LLC-related party | Vesting Tranche Three | |||||
Additional disclosures | |||||
Age to eligible for award | 50 years | ||||
Service period to be eligible for award | 20 years | ||||
Long-term incentive plan | |||||
Long-term incentive plan | |||||
Authorized units | 2,750,868 | 2,750,868 | |||
Percentage of total outstanding common and subordinated units authorized for automatic increase in grant awards authorized on an annual basis | 2.00% | ||||
Incentive plan activity | |||||
Available for future grant, outstanding at the end of the period | 2,501,948 | 2,501,948 | |||
Additional disclosures | |||||
Deferred equity-based compensation | $ 46 | $ 114 | |||
Long-term incentive plan | Common unitholders | TransMontaigne GP | |||||
Long-term incentive plan | |||||
Vesting period | 4 years | ||||
Number of common units purchased | 667 | 2,668 | 4,002 | ||
Minimum | Restricted phantom units | TransMontaigne LLC-related party | |||||
Additional disclosures | |||||
Deferred equity-based compensation | $ 1,500 |
NET EARNINGS PER LIMITED PART58
NET EARNINGS PER LIMITED PARTNER UNIT (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
NET EARNINGS PER LIMITED PARTNER UNIT | |||||||||
Net earnings | $ 12,188 | $ 10,840 | $ 22,310 | $ 20,078 | $ 32,463 | ||||
Less: | |||||||||
Distributions payable on behalf of incentive distribution rights | (1,682) | (1,682) | (3,364) | (3,285) | |||||
Distributions payable on behalf of general partner interest | (219) | (219) | (438) | (436) | |||||
Earnings allocable to general partner interest less than distributions payable to general partner interest | 8 | 36 | 59 | 100 | |||||
Earnings allocable to general partner interest including incentive distribution rights | (1,893) | (1,865) | (3,743) | (3,621) | |||||
Net earnings allocable to limited partners | 10,295 | 8,975 | 18,567 | 16,457 | |||||
Less distributions payable for unvested long-term incentive plan grants | (6) | (10) | (12) | (20) | |||||
Less value of distributions payable in equivalent units for outstanding vested equity awards to TransMontaigne LLC | (19) | (19) | |||||||
Net earnings allocable to limited partners for calculating net earnings per limited partner unit | $ 10,270 | $ 8,965 | $ 18,536 | $ 16,437 | |||||
Basic weighted average units | 16,148 | 16,107 | 16,136 | 16,105 | |||||
Diluted weighted average units | 16,152 | 16,107 | 16,138 | 16,105 | |||||
Net earnings per limited partner unit-basic (in dollars per unit) | $ 0.64 | $ 0.56 | $ 1.15 | $ 1.02 | |||||
Net earnings per limited partner unit-diluted (in dollars per unit) | 0.64 | 0.56 | $ 1.15 | $ 1.02 | |||||
Period for declaration of distribution, maximum | 45 days | ||||||||
Distribution declared per common unit (in dollars per unit) | $ 0.665 | $ 0.665 | $ 0.665 | $ 0.665 | $ 0.665 | $ 0.660 |
COMMITMENTS AND CONTINGENCIES59
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Contractual commitments for supply of services, labor and materials | $ 3,200 | $ 3,200 | ||
Future minimum lease payments under non-cancelable operating leases | ||||
2015 (remainder of the year) | 1,826 | 1,826 | ||
2,016 | 3,977 | 3,977 | ||
2,017 | 3,004 | 3,004 | ||
2,018 | 608 | 608 | ||
2,019 | 594 | 594 | ||
Thereafter | 3,414 | 3,414 | ||
Total | 13,423 | 13,423 | ||
Expected minimum sublease rentals to be received | 800 | 800 | ||
Rental expense under operating leases | $ 900 | $ 900 | 1,800 | $ 1,700 |
Brownsville terminals | Litigation | Nieto | ||||
Legal proceedings | ||||
Damages sought | $ 5,700 |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | |
Segments of business | ||||||||
Total revenue | $ 37,034 | $ 39,359 | $ 74,931 | $ 77,412 | ||||
Direct operating costs and expenses | (15,872) | (16,396) | (30,826) | (31,788) | ||||
Net margins | 21,162 | 22,963 | 44,105 | 45,624 | ||||
Direct general and administrative expenses | (672) | (462) | (1,693) | (1,380) | ||||
Allocated general and administrative expenses | (2,802) | (2,782) | (5,605) | (5,564) | ||||
Allocated insurance expense | (934) | (913) | (1,868) | (1,827) | ||||
Reimbursement of bonus awards expense | (539) | (375) | (1,064) | (750) | ||||
Depreciation and amortization | (7,476) | (7,396) | (14,813) | (14,796) | ||||
Earnings from unconsolidated affiliates | 5,517 | 1,275 | 7,573 | 1,438 | ||||
Operating income | 14,256 | 12,310 | 26,635 | 22,745 | ||||
Other expenses | 2,068 | 1,470 | 4,325 | 2,667 | ||||
Net earnings | 12,188 | 10,840 | 22,310 | 20,078 | $ 32,463 | |||
External customers | 26,754 | 15,474 | 52,053 | 29,097 | ||||
Revenue from affiliates | 10,280 | 23,885 | 22,878 | 48,315 | ||||
Capital expenditures | 9,010 | 889 | 15,754 | 2,612 | ||||
Identifiable assets | 409,941 | 409,941 | ||||||
Cash and cash equivalents | 5,046 | 1,469 | 5,046 | 1,469 | 3,304 | $ 918 | $ 4,652 | $ 3,263 |
Investments in unconsolidated affiliates | 249,297 | 249,297 | 249,676 | |||||
Deferred financing costs | 2,059 | 2,059 | 1,138 | |||||
Other | 440 | 440 | ||||||
TOTAL ASSETS | 666,783 | 666,783 | $ 664,057 | |||||
NGL Energy Partners LP | ||||||||
Segments of business | ||||||||
Revenue from affiliates | 9,270 | 20,691 | ||||||
Morgan Stanley Capital Group | ||||||||
Segments of business | ||||||||
Revenue from affiliates | 22,892 | 46,481 | ||||||
Frontera | ||||||||
Segments of business | ||||||||
Revenue from affiliates | 1,010 | 993 | 2,187 | 1,834 | ||||
Gulf Coast Terminals | ||||||||
Segments of business | ||||||||
Terminaling services fees, net | 9,783 | 11,307 | 20,461 | 23,075 | ||||
Other | 2,259 | 4,087 | 4,257 | 7,088 | ||||
Total revenue | 12,042 | 15,394 | 24,718 | 30,163 | ||||
Direct operating costs and expenses | (4,489) | (4,704) | (8,895) | (9,541) | ||||
Net margins | 7,553 | 10,690 | 15,823 | 20,622 | ||||
External customers | 10,959 | 6,658 | 20,879 | 12,681 | ||||
Capital expenditures | 3,745 | 189 | 6,984 | 389 | ||||
Identifiable assets | 124,841 | 124,841 | ||||||
Gulf Coast Terminals | NGL Energy Partners LP | ||||||||
Segments of business | ||||||||
Revenue from affiliates | 1,083 | 3,839 | ||||||
Gulf Coast Terminals | Morgan Stanley Capital Group | ||||||||
Segments of business | ||||||||
Revenue from affiliates | 8,736 | 17,482 | ||||||
Midwest Terminals and Pipeline System | ||||||||
Segments of business | ||||||||
Terminaling services fees, net | 1,991 | 2,014 | 4,093 | 4,007 | ||||
Pipeline transportation fees | 414 | 414 | 828 | 741 | ||||
Other | 286 | 636 | 513 | 1,010 | ||||
Total revenue | 2,691 | 3,064 | 5,434 | 5,758 | ||||
Direct operating costs and expenses | (802) | (868) | (1,480) | (1,572) | ||||
Net margins | 1,889 | 2,196 | 3,954 | 4,186 | ||||
External customers | 2,691 | 1,965 | 5,434 | 2,772 | ||||
Capital expenditures | 260 | 1 | 697 | 29 | ||||
Identifiable assets | 23,218 | 23,218 | ||||||
Midwest Terminals and Pipeline System | Morgan Stanley Capital Group | ||||||||
Segments of business | ||||||||
Revenue from affiliates | 1,099 | 2,986 | ||||||
Brownsville terminals | ||||||||
Segments of business | ||||||||
Terminaling services fees, net | 2,067 | 1,467 | 3,883 | 2,964 | ||||
Pipeline transportation fees | 1,322 | 362 | 2,504 | 728 | ||||
Other | 3,254 | 3,170 | 7,216 | 6,144 | ||||
Total revenue | 6,643 | 4,999 | 13,603 | 9,836 | ||||
Direct operating costs and expenses | (3,060) | (3,451) | (6,210) | (6,931) | ||||
Net margins | 3,583 | 1,548 | 7,393 | 2,905 | ||||
External customers | 5,633 | 4,006 | 11,406 | 8,002 | ||||
Capital expenditures | 1,274 | 354 | 2,267 | 921 | ||||
Identifiable assets | 47,623 | 47,623 | ||||||
Brownsville terminals | NGL Energy Partners LP | ||||||||
Segments of business | ||||||||
Revenue from affiliates | 10 | |||||||
Brownsville terminals | Frontera | ||||||||
Segments of business | ||||||||
Revenue from affiliates | 1,010 | 993 | 2,187 | 1,834 | ||||
River terminals | ||||||||
Segments of business | ||||||||
Terminaling services fees, net | 2,296 | 2,093 | 4,553 | 4,114 | ||||
Other | 178 | 176 | 433 | 390 | ||||
Total revenue | 2,474 | 2,269 | 4,986 | 4,504 | ||||
Direct operating costs and expenses | (1,814) | (1,853) | (3,357) | (3,635) | ||||
Net margins | 660 | 416 | 1,629 | 869 | ||||
External customers | 2,357 | 1,884 | 4,752 | 3,835 | ||||
Capital expenditures | 1,715 | 102 | 3,043 | 595 | ||||
Identifiable assets | 55,046 | 55,046 | ||||||
River terminals | NGL Energy Partners LP | ||||||||
Segments of business | ||||||||
Revenue from affiliates | 117 | 234 | ||||||
River terminals | Morgan Stanley Capital Group | ||||||||
Segments of business | ||||||||
Revenue from affiliates | 385 | 669 | ||||||
Southeast Terminals | ||||||||
Segments of business | ||||||||
Terminaling services fees, net | 11,511 | 11,515 | 23,268 | 22,955 | ||||
Other | 1,673 | 2,118 | 2,922 | 4,196 | ||||
Total revenue | 13,184 | 13,633 | 26,190 | 27,151 | ||||
Direct operating costs and expenses | (5,707) | (5,520) | (10,884) | (10,109) | ||||
Net margins | 7,477 | 8,113 | 15,306 | 17,042 | ||||
External customers | 5,114 | 961 | 9,582 | 1,807 | ||||
Capital expenditures | 2,016 | 243 | 2,763 | 678 | ||||
Identifiable assets | 159,213 | 159,213 | ||||||
Southeast Terminals | NGL Energy Partners LP | ||||||||
Segments of business | ||||||||
Revenue from affiliates | $ 8,070 | $ 16,608 | ||||||
Southeast Terminals | Morgan Stanley Capital Group | ||||||||
Segments of business | ||||||||
Revenue from affiliates | $ 12,672 | $ 25,344 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | Jul. 13, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 |
Subsequent Event | |||||||
Distribution announced per unit (in dollars per unit) | $ 0.665 | $ 0.665 | $ 0.665 | $ 0.665 | $ 0.665 | $ 0.660 | |
Subsequent Event | |||||||
Subsequent Event | |||||||
Distribution announced per unit (in dollars per unit) | $ 0.665 |
Uncategorized Items - tlp-20150
Label | Element | Value |
General Partner [Member] | ||
Partners' Capital Account, Units | us-gaap_PartnersCapitalAccountUnits | 329,073 |
Limited Partner [Member] | ||
Partners' Capital Account, Units | us-gaap_PartnersCapitalAccountUnits | 16,124,566 |