Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 28, 2017 | |
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 | Mar. 31, 2017 | |
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 | 16,161,262 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
Consolidated balance sheets
Consolidated balance sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 641 | $ 593 |
Trade accounts receivable, net | 9,088 | 9,297 |
Due from affiliates | 963 | 653 |
Other current assets | 8,190 | 9,903 |
Total current assets | 18,882 | 20,446 |
Property, plant and equipment, net | 419,995 | 416,748 |
Goodwill | 8,485 | 8,485 |
Investments in unconsolidated affiliates | 241,304 | 241,093 |
Other assets, net | 7,864 | 2,922 |
TOTAL ASSETS | 696,530 | 689,694 |
Current liabilities: | ||
Trade accounts payable | 11,194 | 7,928 |
Accrued liabilities | 16,665 | 13,998 |
Total current liabilities | 27,859 | 21,926 |
Other liabilities | 3,113 | 3,234 |
Long-term debt | 292,500 | 291,800 |
Total liabilities | 323,472 | 316,960 |
Commitments and contingencies (Note 16) | ||
Partners’ equity: | ||
Common unitholders (16,161,262 units issued and outstanding at March 31, 2017 and 16,137,650 units issued and outstanding at December 31, 2016) | 320,130 | 320,042 |
General partner interest (2% interest with 329,821 equivalent units outstanding at March 31, 2017 and 329,339 equivalent units outstanding at December 31, 2016) | 52,928 | 52,692 |
Total partners’ equity | 373,058 | 372,734 |
TOTAL LIABILITIES AND EQUITY | $ 696,530 | $ 689,694 |
Consolidated balance sheets (Pa
Consolidated balance sheets (Parenthetical) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Consolidated balance sheets | ||
Common unitholders, units issued | 16,161,262 | 16,137,650 |
Common unitholders, units outstanding | 16,161,262 | 16,137,650 |
General partner interest (as a percent) | 2.00% | 2.00% |
General partner interest, equivalent units outstanding | 329,821 | 329,339 |
Consolidated statements of oper
Consolidated statements of operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue: | ||
External customers | $ 43,080 | $ 36,272 |
Affiliates | 1,770 | 4,354 |
Total revenue | 44,850 | 40,626 |
Operating costs and expenses and other: | ||
Direct operating costs and expenses | (16,511) | (15,906) |
General and administrative expenses | (3,971) | (3,878) |
Insurance expenses | (1,006) | (895) |
Equity-based compensation expense | (1,817) | (2,155) |
Depreciation and amortization | (8,705) | (7,935) |
Earnings from unconsolidated affiliates | 2,560 | 1,850 |
Total operating costs and expenses and other | (29,450) | (28,919) |
Operating income | 15,400 | 11,707 |
Other expenses: | ||
Interest expense | (2,152) | (2,792) |
Amortization of deferred financing costs | (294) | (205) |
Total other expenses | (2,446) | (2,997) |
Net earnings | 12,954 | 8,710 |
Less-earnings allocable to general partner interest including incentive distribution rights | (2,843) | (2,056) |
Net earnings allocable to limited partners | $ 10,111 | $ 6,654 |
Net earnings per limited partner unit-basic (in dollars per unit) | $ 0.62 | $ 0.41 |
Net earnings per limited partner unit-diluted (in dollars per unit) | $ 0.62 | $ 0.41 |
Consolidated statements of part
Consolidated statements of partners' equity - USD ($) $ in Thousands | Common units | General partner interest | Total |
Balance at Dec. 31, 2015 | $ 326,224 | $ 57,747 | $ 383,971 |
Increase (Decrease) in Partners' Capital | |||
Distributions to unitholders | (44,211) | (8,898) | (53,109) |
Equity-based compensation | 3,128 | 3,128 | |
Issuance of common units pursuant to our long-term incentive plan | 135 | 135 | |
TransMontaigne GP to maintain its 2% general partner interest | 9 | 9 | |
Excess of purchase price of hydrant system from TransMontaigne LLC over the carryover basis of the net assets | (5,506) | (5,506) | |
Net earnings | 34,766 | 9,340 | 44,106 |
Balance at Dec. 31, 2016 | 320,042 | 52,692 | 372,734 |
Increase (Decrease) in Partners' Capital | |||
Distributions to unitholders | (11,458) | (2,629) | (14,087) |
Equity-based compensation | 1,817 | 1,817 | |
Settlement of tax withholdings on equity-based compensation | (382) | (382) | |
TransMontaigne GP to maintain its 2% general partner interest | 22 | 22 | |
Net earnings | 10,111 | 2,843 | 12,954 |
Balance at Mar. 31, 2017 | $ 320,130 | $ 52,928 | $ 373,058 |
Consolidated statements of par6
Consolidated statements of partners' equity (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2016shares | |
Consolidated statements of partners' equity | |
Issuance of common units pursuant to our long-term incentive plan (in units) | 19,008 |
Issuance of common units pursuant to our savings and retention program (in units) | 2,094 |
General partner interest (as a percent) | 2.00% |
Consolidated statements of cash
Consolidated statements of cash flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net earnings | $ 12,954 | $ 8,710 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 8,705 | 7,935 |
Earnings from unconsolidated affiliates | (2,560) | (1,850) |
Distributions from unconsolidated affiliates | 4,349 | 4,135 |
Equity-based compensation | 1,817 | 2,155 |
Amortization of deferred financing costs | 294 | 205 |
Amortization of deferred revenue | (51) | (198) |
Unrealized (gain) loss on derivative instruments | (258) | 794 |
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions: | ||
Trade accounts receivable, net | 220 | (1,235) |
Due from affiliates | (310) | 400 |
Other current assets | 1,716 | 13 |
Amounts due under long-term terminaling services agreements, net | (98) | (47) |
Deposits | 54 | |
Trade accounts payable | 864 | (974) |
Accrued liabilities | 2,667 | 200 |
Net cash provided by operating activities | 30,363 | 20,243 |
Cash flows from investing activities: | ||
Acquisition of terminal assets | (12,000) | |
Investments in unconsolidated affiliates | (2,000) | (2,225) |
Capital expenditures | (9,500) | (9,483) |
Net cash used in investing activities | (11,500) | (23,708) |
Cash flows from financing activities: | ||
Borrowings of debt under credit facility | 46,000 | 58,400 |
Repayments of debt under credit facility | (45,300) | (42,300) |
Deferred financing costs | (5,065) | (395) |
Deferred shelf registration costs | (3) | |
Settlement of tax withholdings on equity-based compensation | (382) | |
Distributions paid to unitholders | (14,087) | (12,792) |
Contribution of cash by TransMontaigne GP | 22 | 5 |
Net cash provided by (used in) financing activities | (18,815) | 2,918 |
Increase (decrease) in cash and cash equivalents | 48 | (547) |
Cash and cash equivalents at beginning of period | 593 | 681 |
Cash and cash equivalents at end of period | 641 | 134 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 2,217 | 2,127 |
Property, plant and equipment acquired with accounts payable | $ 7,515 | $ 3,570 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Nature of business TransMontaigne Partners L.P. (“we,” “us,” “our,” “the Partnership”) was formed in February 2005 as a Delaware limited partnership. 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 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 are controlled by our general partner, TransMontaigne GP L.L.C. (“TransMontaigne GP”), which as of February 1, 2016 is a wholly‑owned indirect subsidiary of ArcLight Energy Partners Fund VI, L.P. (“ArcLight”). Prior to February 1, 2016, TransMontaigne LLC, a wholly-owned subsidiary of NGL Energy Partners LP (“NGL”), owned all the issued and outstanding ownership interests of TransMontaigne GP. (b) Basis of presentation and use of estimates Our accounting and financial reporting policies conform to accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of TransMontaigne Partners L.P. 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 March 31, 2017 and December 31, 2016 and our results of operations for the three months ended March 31, 2017 and 2016. Certain reclassifications of previously reported amounts have been made to conform to the current year presentation. The preparation of financial statements in conformity with “GAAP” 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/or involve complex analyses: useful lives of our plant and equipment and accrued environmental obligations. 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 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 March 31, 2017 and 2016, we recognized revenue of approximately $2.7 million and $1.4 million, respectively, for net product gained. Within these amounts, approximately $nil and $0.3 million for the three months ended March 31, 2017 and 2016, 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 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). In connection with our previous acquisitions of certain terminals from TransMontaigne LLC, TransMontaigne LLC has agreed to indemnify us against certain potential environmental claims, losses and expenses at those terminals (see Note 2 of Notes to consolidated financial statements). (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 (see Note 14 of Notes to consolidated financial statements). (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 9 of Notes to consolidated financial statements). Changes in the fair value of our derivative instruments are recognized in earnings. At both March 31, 2017 and December 31, 2016, our derivative instruments were limited to interest rate swap agreements with an aggregate notional amount of $125.0 million. Our derivative instruments expire between March 25, 2018 and March 11, 2019. Pursuant to the terms of the interest rate swap agreements, we pay a blended fixed rate of approximately 1.01% 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 we are treated as a partnership for federal income tax purposes. As a partnership, all income, gains, losses, expenses, deductions and tax credits generated by us flow through to our unitholders. (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 calculated under the two-class method and accordingly 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 our distributions. 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 the limited partners by the weighted average number of 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 average number of limited partner units outstanding during the period and any potential dilutive securities outstanding during the period. (m) Comprehensive income Entities that report items of other comprehensive income have the option to present the components of net earnings and comprehensive income in either one continuous financial statement, or two consecutive financial statements. As the Partnership has no components of comprehensive income other than net earnings, no statement of comprehensive income has been presented. (n) 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. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period and allows for both retrospective and modified retrospective methods of adoption. We are currently evaluating the impact of ASU 2014-09 and all related ASU’s on a representative sample of individual customer contracts. Additionally, we are in the process of evaluating and designing the necessary changes to our business processes, systems and controls to support recognition and disclosure under the new standard. We are continuing our evaluation to determine the impact on our consolidated financial condition and results of operations. In February 2016, the FASB issued ASU 2016-02, Leases. The objective of this update is to improve financial reporting about leasing transactions. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, 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. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipt and Cash Payments, to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. ASU 2016-15 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. In January 2017, the FASB issued ASU 2017-04, Intangibles- Goodwill and Other: Simplifying the Test for Goodwill Impairment, to simplify the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. ASU 2017-04 is effective for annual reporting periods beginning after December 15, 2019, 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 | 3 Months Ended |
Mar. 31, 2017 | |
TRANSACTIONS WITH AFFILIATES | |
TRANSACTIONS WITH AFFILIATES | (2) TRANSACTIONS WITH AFFILIATES Omnibus agreement. On May 27, 2005 we entered into an omnibus agreement with TransMontaigne LLC and our general partner, which agreement has been subsequently amended from time to time. In connection with the ArcLight acquisition of our general partner, effective February 1, 2016, we entered into the second amended and restated omnibus agreement to consent to the assignment of the omnibus agreement from TransMontaigne LLC to Gulf TLP Holdings LLC , an ArcLight subsidiary, to waive the automatic termination that would have occurred at such time as TransMontaigne LLC ceased to control our general partner and to remove certain legacy provisions that were no longer applicable to the Partnership. The omnibus agreement will continue in effect until the earlier of (i) ArcLight ceasing to control our general partner or (ii) the election of either us or the owner, following at least 24 months’ prior written notice to the other parties. Under the omnibus agreement we pay Gulf TLP Holdings, the owner of TransMontaigne GP, an administrative fee for the provision of various general and administrative services for our benefit. The administrative fee paid for the three months ended March 31, 2017 and 2016 was approximately $2.9 million and $2.8 million, respectively. The administrative fee is recognized as a component of general and administrative expense and encompasses 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, engineering and other corporate services. If we acquire or construct additional facilities, the owner of TransMontaigne GP may propose a revised administrative fee covering the provision of services for such additional facilities, subject to approval by the conflicts committee of our general partner. Effective May 3, 2017 the board of TransMontaigne GP, with the concurrence of the conflicts committee, approved a $1.8 million annual increase (or $150,000 monthly) to the administrative fee related to the construction of approximately 2.0 million barrels of new storage capacity at our Collins, Mississippi bulk storage terminal. The increase will be ratably applied monthly beginning May 3, 2017 based on the percentage of the 2.0 million barrels of new storage capacity that has been placed in service. The omnibus agreement further provides that we pay the owner of TransMontaigne GP for insurance policies purchased on our behalf to cover our facilities and operations. For the three months ended March 31, 2017 and 2016, the insurance reimbursement paid was approximately $nil and $0.9 million, respectively. Beginning October 31, 2016, we contracted directly with insurance carriers for the majority of our insurance requirements. For the three months ended March 31, 2017 and 2016, the expense associated with insurance contracted directly by us was approximately $1.0 million and $nil, respectively. We also pay the owner of TransMontaigne GP 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 the owner of TransMontaigne GP for bonus awards made to key employees under the owner’s savings and retention program, provided the compensation committee and the conflicts committee of our general partner approve the annual awards granted under the program. We have the option to provide the reimbursement in either a cash payment or the delivery of our common units to the owner of TransMontaigne GP or directly to the award recipients, with the reimbursement made in accordance with the underlying vesting and payment schedule of the savings and retention program (see Note 14 of Notes to the consolidated financial statements). Environmental indemnification. In connection with our acquisition of the Florida and Midwest terminals on May 27, 2005, 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 on December 31, 2006, 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 on December 31, 2007, 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 on March 1, 2011, TransMontaigne LLC agreed to indemnify us against potential environmental claims, losses and expenses that were 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. TransMontaigne LLC’s maximum liability for this indemnification obligation is $2.5 million. TransMontaigne LLC has no obligation to indemnify us for losses until such aggregate losses exceed $200,000. 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. The forgoing environmental indemnification obligations of TransMontaigne LLC to us remain in place and were not affected by ArcLight’s acquisition of our general partner. Operations and reimbursement agreement—Frontera. We have a 50% ownership interest in the Frontera Brownsville LLC joint venture, or “Frontera”. We 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. We recognized revenue related to this operations and reimbursement agreement of approximately $1.4 million for both the three months ended March 31, 2017 and 2016, respectively. Terminaling services agreement—Brownsville terminals. In September 2016, we entered into a terminaling services agreement with Frontera relating to our Brownsville, Texas facility that will expire in June 2019, subject to a two-year automatic renewal unless terminated by either party upon 180 days’ prior notice. In exchange for its minimum throughput commitment, we have agreed to provide Frontera with approximately 151,000 barrels of storage capacity. For the three months ended March 31, 2017 and 2016 we recognized approximately $0.3 million and $nil, respectively, of revenue related to this agreement. Terminaling services agreement—Southeast terminals. In connection with the ArcLight acquisition of our general partner, our Southeast terminaling services agreement with NGL was amended to extend the term of the agreement through July 31, 2040 at the prevailing contract rate terms contained within the agreement. Subsequent to January 31, 2023, NGL has the ability to terminate the agreement at any time upon at least 24 months’ prior notice of its intent to terminate the agreement. Subsequent to the ArcLight acquisition, effective February 1, 2016, revenue associated with the Southeast terminaling services agreement is recorded as revenue from external customers as opposed to revenue from affiliates. Under this agreement, NGL is obligated to throughput a volume of refined product that, at the fee schedule contained in the agreement, resulted in minimum throughput payments to us of approximately $6.8 million and $6.7 million for the three months ended March 31, 2017 and 2016, respectively. The agreement contains stipulated annual increases in throughput payments 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. |
ACQUISITION OF TERMINAL ASSETS
ACQUISITION OF TERMINAL ASSETS FROM AFFILIATE | 3 Months Ended |
Mar. 31, 2017 | |
ACQUISITION OF TERMINAL ASSETS FROM AFFILIATE | |
ACQUISITION OF TERMINAL ASSETS FROM AFFILIATE | (3) ACQUISITION OF TERMINAL ASSETS FROM AFFILIATE Effective January 28, 2016, we acquired from TransMontaigne LLC its Port Everglades, Florida hydrant system for a cash payment of $12.0 million. The hydrant system encompasses a system for fueling cruise ships. The acquisition of the hydrant system from TransMontaigne LLC has been recorded at the carryover basis in a manner similar to a reorganization of entities under common control. Accordingly, we recorded the assets at their net book value of $6.5 million with the remaining purchase price of $5.5 million recorded as a reduction to the general partner interest. TransMontaigne LLC controlled our general partner on the acquisition date, the difference between the consideration we paid to TransMontaigne LLC and the carryover basis of the net assets purchased has been reflected in the accompanying consolidated balance sheets and statements of partners’ equity as a decrease to the general partner interest. The accompanying consolidated financial statements include the assets, liabilities and results of operations of the hydrant system from January 28, 2016. As this transaction is not considered material to our consolidated financial statements we did not recast prior period consolidated financial statements. |
CONCENTRATION OF CREDIT RISK AN
CONCENTRATION OF CREDIT RISK AND TRADE ACCOUNTS RECEIVABLE | 3 Months Ended |
Mar. 31, 2017 | |
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): March 31, December 31, 2017 2016 Trade accounts receivable $ 9,207 $ 9,416 Less allowance for doubtful accounts (119) (119) $ 9,088 $ 9,297 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 March 31, 2017 2016 NGL Energy Partners LP 26 % 21 % Castleton Commodities International LLC 13 % 14 % RaceTrac Petroleum Inc. 12 % 12 % |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2017 | |
OTHER CURRENT ASSETS | |
OTHER CURRENT ASSETS | (5) OTHER CURRENT ASSETS Other current assets are as follows (in thousands): March 31, December 31, 2017 2016 Amounts due from insurance companies $ 2,248 $ 1,810 Additive detergent 1,292 1,364 Prepaid insurance 4,073 4,684 Deposits and other assets 577 2,045 $ 8,190 $ 9,903 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 March 31, 2017 and December 31, 2016, we have recognized amounts due from insurance companies of approximately $2.2 million and $1.8 million, respectively, representing our best estimate of our probable insurance recoveries. During the three months ended March 31, 2017, we received reimbursements from insurance companies of approximately $0.5 million. During the three months ended March 31, 2017, we increased our estimate of probable future insurance recoveries by approximately $0.9 million. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2017 | |
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): March 31, December 31, 2017 2016 Land $ 53,079 $ 53,079 Terminals, pipelines and equipment 664,347 651,783 Furniture, fixtures and equipment 4,123 4,100 Construction in progress 11,032 11,715 732,581 720,677 Less accumulated depreciation (312,586) (303,929) $ 419,995 $ 416,748 |
GOODWILL
GOODWILL | 3 Months Ended |
Mar. 31, 2017 | |
GOODWILL. | |
GOODWILL | (7) GOODWILL Goodwill is as follows (in thousands): March 31, December 31, 2017 2016 Brownsville terminals $ 8,485 $ 8,485 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 March 31, 2017 and December 31, 2016, our only reporting unit that contained goodwill was our Brownsville terminals. We did not recognize any goodwill impairment charges during the three months ended March 31, 2017 or during the year ended December 31, 2016 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 | 3 Months Ended |
Mar. 31, 2017 | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | (8) INVESTMENTS IN UNCONSOLIDATED AFFILIATES At March 31, 2017 and December 31, 2016, our investments in unconsolidated affiliates include a 42.5% Class A ownership interest in Battleground Oil Specialty Terminal Company LLC (“BOSTCO”) and a 50% ownership interest in Frontera Brownsville LLC (“Frontera”). BOSTCO is a terminal facility located on the Houston Ship Channel that encompasses approximately 7.1 million barrels of distillate, residual and other black oil product storage. Class A and Class B ownership interests share in cash distributions on a 96.5% and 3.5% basis, respectively. Class B ownership interests do not have voting rights and are not required to make capital investments. Frontera is a terminal facility located in Brownsville, Texas that encompasses approximately 1.5 million barrels of light petroleum product storage, as well as related ancillary facilities. The following table summarizes our investments in unconsolidated affiliates: Percentage of Carrying value ownership (in thousands) March 31, December 31, March 31, December 31, 2017 2016 2017 2016 BOSTCO 42.5 % 42.5 % $ 216,568 $ 217,941 Frontera 50 % 50 % 24,736 23,152 Total investments in unconsolidated affiliates $ 241,304 $ 241,093 At March 31, 2017 and December 31, 2016, our investment in BOSTCO includes approximately $7.2 million and $7.2 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 amortized over the useful life of the assets. Excess investment is the amount by which our investment exceeds our proportionate share of the book value of the net assets of the BOSTCO entity. Earnings from investments in unconsolidated affiliates were as follows (in thousands): Three months ended March 31, 2017 2016 BOSTCO $ 1,706 $ 1,392 Frontera 854 458 Total earnings from investments in unconsolidated affiliates $ 2,560 $ 1,850 Additional capital investments in unconsolidated affiliates were as follows (in thousands): Three months ended March 31, 2017 2016 BOSTCO $ — $ 2,125 Frontera 2,000 100 Additional capital investments in unconsolidated affiliates $ 2,000 $ 2,225 Cash distributions received from unconsolidated affiliates were as follows (in thousands): Three months ended March 31, 2017 2016 BOSTCO $ 3,079 $ 3,634 Frontera 1,270 501 Cash distributions received from unconsolidated affiliates $ 4,349 $ 4,135 The summarized financial information of our unconsolidated affiliates was as follows (in thousands): Balance sheets: BOSTCO Frontera March 31, December 31, March 31, December 31, 2017 2016 2017 2016 Current assets $ 23,234 $ 23,237 $ 9,441 $ 5,779 Long-term assets 480,604 485,331 41,865 41,966 Current liabilities (11,183) (12,799) (1,588) (1,172) Long-term liabilities — — (246) (269) Net assets $ 492,655 $ 495,769 $ 49,472 $ 46,304 Statements of operations: BOSTCO Frontera Three months ended Three months ended March 31, March 31, 2017 2016 2017 2016 Revenue $ 16,630 $ 16,681 $ 5,393 $ 4,142 Expenses (12,238) (12,250) (3,685) (3,226) Net earnings $ 4,392 $ 4,431 $ 1,708 $ 916 |
OTHER ASSETS, NET
OTHER ASSETS, NET | 3 Months Ended |
Mar. 31, 2017 | |
OTHER ASSETS, NET | |
OTHER ASSETS, NET | (9) OTHER ASSETS, NET Other assets, net are as follows (in thousands): March 31, December 31, 2017 2016 Deferred financing costs, net of accumulated amortization of $5,057 and $4,763, respectively $ 6,069 $ 1,298 Amounts due under long-term terminaling services agreements 673 656 Customer relationships, net of accumulated amortization of $2,143 and $2,092, respectively 287 338 Unrealized gain on derivative instruments 602 344 Deposits and other assets 233 286 $ 7,864 $ 2,922 Deferred financing costs. Deferred financing costs are amortized using the effective interest method over the term of the related credit facility. 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 at stated amounts 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 terms of the respective agreements. At both March 31, 2017 and December 31, 2016, we have recognized revenue in excess of the minimum payments that was due through those respective dates under the long‑term terminaling services agreements resulting in an asset of approximately $0.7 million. 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 | 3 Months Ended |
Mar. 31, 2017 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | (10) ACCRUED LIABILITIES Accrued liabilities are as follows (in thousands): March 31, December 31, 2017 2016 Customer advances and deposits: External customers $ 9,921 $ 8,602 Affiliates 108 108 10,029 8,710 Accrued property taxes 1,630 1,061 Accrued environmental obligations 2,115 2,107 Interest payable 488 232 Accrued expenses and other 2,403 1,888 $ 16,665 $ 13,998 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 March 31, 2017 and December 31, 2016, we have billed and collected from certain of our customers approximately $10.0 million and $8.7 million, respectively, in advance of the terminaling services being provided. Accrued environmental obligations. At both March 31, 2017 and December 31, 2016, we have accrued environmental obligations of approximately $2.1 million, representing our best estimate of our remediation obligations. During the three months ended March 31, 2017, we made payments of approximately $0.5 million towards our environmental remediation obligations. During the three months ended March 31, 2017, we increased our estimate of our future environmental remediation costs by approximately $0.5 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. |
OTHER LIABILITIES
OTHER LIABILITIES | 3 Months Ended |
Mar. 31, 2017 | |
OTHER LIABILITIES | |
OTHER LIABILITIES | (11) OTHER LIABILITIES Other liabilities are as follows (in thousands): March 31, December 31, 2017 2016 Advance payments received under long-term terminaling services agreements $ 913 $ 994 Deferred revenue—ethanol blending fees and other projects 2,200 2,240 $ 3,113 $ 3,234 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 March 31, 2017 and December 31, 2016, we have received advance minimum payments in excess of revenue recognized under these long‑term terminaling services agreements resulting in a liability of approximately $0.9 million and $1.0 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 both March 31, 2017 and December 31, 2016, we have unamortized deferred revenue of approximately $2.2 million, for completed projects. During the three months ended March 31, 2017 and 2016, we recognized revenue on a straight‑line basis of approximately $0.1 million and $0.2 million, respectively, for completed projects. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2017 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | (12) LONG‑TERM DEBT On March 13, 2017, we entered into the third amended and restated senior secured credit facility, or the “credit facility”, that provides for a maximum borrowing line of credit equal to $600 million. At our request, the maximum borrowing line of credit may be increased by an additional $250 million, subject to the approval of the administrative agent and the receipt of additional commitments from one or more lenders. 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 $175 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 in March 2022. We may elect to have loans under the credit facility bear interest either (i) at a rate of LIBOR plus a margin ranging from 1.75% to 2.75% depending on the total leverage ratio then in effect, or (ii) at the base rate plus a margin ranging from 0.75% to 1.75% 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. For the three months ended March 31, 2017 and 2016, the weighted average interest rate on borrowings under the credit facility was approximately 3.3% and 3.1%, respectively. At March 31, 2017 and December 31, 2016, our outstanding borrowings under the credit facility were $292.5 million and $291.8 million, respectively. At both March 31, 2017 and December 31, 2016 our outstanding letters of credit were $0.4 million. We have an effective universal shelf‑registration statement and prospectus on Form S‑3 with the Securities and Exchange Commission that expires in September 2019. TLP Finance Corp., our 100% owned subsidiary, may act as a co‑issuer of any debt securities issued pursuant to that registration statement. TransMontaigne Partners L.P. has no independent assets or operations. TLP Finance Corp. has no assets or operations. Our operations are conducted by subsidiaries of TransMontaigne Partners L.P. through our 100% owned operating company subsidiary, TransMontaigne Operating Company L.P. Each of TransMontaigne Operating Company L.P.s’ and our 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 TransMontaigne Partners L.P. or any guarantor to obtain funds from its subsidiaries by dividend or loan. None of the assets of TransMontaigne Partners L.P. or a guarantor represent restricted net assets pursuant to the guidelines established by the Securities and Exchange Commission. |
PARTNERS' EQUITY
PARTNERS' EQUITY | 3 Months Ended |
Mar. 31, 2017 | |
PARTNERS' EQUITY | |
PARTNERS' EQUITY | (13) PARTNERS’ EQUITY The number of units outstanding is as follows: General Common partner units equivalent units Units outstanding at December 31, 2016 16,137,650 329,339 Issuance of common units pursuant to our savings and retention program 23,612 — TransMontaigne GP to maintain its 2% general partner interest — 482 Units outstanding at March 31, 2017 16,161,262 329,821 |
EQUITY BASED COMPENSATION
EQUITY BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2017 | |
EQUITY BASED COMPENSATION | |
EQUITY BASED COMPENSATION | (14) EQUITY BASED COMPENSATION TransMontaigne GP is our general partner and manages our operations and activities. Prior to February 1, 2016, TransMontaigne GP was a wholly owned subsidiary of TransMontaigne LLC, which is a wholly owned subsidiary of NGL. TransMontaigne Services LLC, which is a wholly owned subsidiary of TransMontaigne LLC, had a long‑term incentive plan and a savings and retention program to compensate through bonus awards certain employees and independent directors of our general partner who provided services with respect to the business of our general partner. Long-term incentive plan. On February 26, 2016, the board of our general partner approved, subject to the approval of our common unitholders, the TLP Management Services 2016 long-term incentive plan and the TLP Management Services savings and retention program (discussed further below) which constitutes a program under, and is subject to, the TLP Management Services long-term incentive plan, which replaced the TransMontaigne Services LLC long-term incentive plan and the TransMontaigne Services LLC savings and retention program. TLP Management Services is a wholly owned indirect subsidiary of ArcLight and employs all the officers and employees who provide services to our partnership and such entity provides payroll and maintains all employee benefits programs on behalf of our partnership. On July 12, 2016, we held a special meeting of our common unitholders at which time the TLP Management Services long-term incentive plan and savings and retention program were approved by the Partnership’s unitholders. The TLP Management Services long-term incentive plan operates in a manner similar to the TransMontaigne Services LLC long-term incentive plan used previously. The TLP Management Services long-term incentive plan reserves 750,000 common units to be granted as awards under the plan, with such amount subject to adjustment as provided for under the terms of the plan if there is a change in our common units, such as a unit split or other reorganization. The common units authorized to be granted under the TLP Management Services long-term incentive plan are registered pursuant to a registration statement on Form S-8. The TLP Management Services long‑term incentive plan is administered by the compensation committee of the board of directors of our general partner and is used for grants of units to the independent directors of our general partner. The grants to the independent directors of our general partner under the TransMontaigne Services LLC long-term incentive plan had historically vested and were payable annually in equal tranches over a four-year period, subject to accelerated vesting upon a change in control of TransMontaigne GP. Ownership in the awards was subject to forfeiture until the vesting date, but recipients had distribution and voting rights from the date of the grant. The grants to the independent directors of our general partner under the TLP Management Services long-term incentive plan are immediately vested and not subject to forfeiture. Accordingly there are no long-term incentive plan grants outstanding as of March 31, 2017. 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 with the costs being accelerated upon the occurrence of accelerated vesting events, such as a change in control of our general partner. In connection with the ArcLight acquisition of our general partner, effective February 1, 2016, 15,750 restricted phantom units previously granted to the independent directors vested and were satisfied via the delivery of our common units. Effective as of October 18, 2016, the board of directors of our general partner, with the concurrence of the compensation committee, adopted a revised independent director annual compensation program, which includes the grant of common units valued at $90,000 annually and issued pursuant to the TLP Management Services long-term incentive plan, which common units are immediately vested and are not subject to forfeiture. On October 21, 2016, we granted and issued an additional 3,258 common units to our independent directors under the TLP Management Services long‑term incentive plan. The annual common unit award for 2016 was prorated for Mr. Wiese and Mr. Welch, who were each appointed to the board in July 2016, based on their length of service on the board of our general partner. For awards to the independent directors of our general partner, equity-based compensation of approximately $68,000 and $520,000 is included in equity-based compensation expense for the three months ended March 31, 2017 and 2016, respectively. Savings and retention program. On February 26, 2016, the board of our general partner unanimously approved the TLP Management Services savings and retention program , subject to the approval of our common unitholders, for employees who provide services with respect to our business . This plan is intended to constitute a program under, and be subject to, the TLP Management Services 2016 long-term incentive plan described above. The savings and retention program is used for awards to employees of TLP Management Services who provide services to the Partnership. The savings and retention program operates in a manner substantially similar to the TransMontaigne Services LLC savings and retention program used previously. The restricted phantom units awarded and accrued under the savings and retention program are subject to forfeiture until the vesting date. 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 program do not have voting rights. The purpose of the savings and retention program 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 program generally become vested as to 50% of a participant’s annual award as of the first day of the month that falls closest to the second anniversary of the grant date, and the remaining 50% as of the first day of the month that falls closest to the third anniversary of the grant date, subject to earlier vesting upon a participant’s attainment of the age and length of service thresholds, retirement, death or disability, involuntary termination without cause, or termination of a participant’s employment following a change in control of the Partnership, our general partner or TLP Management Services, as specified in the program. For certain senior level employees, including the executive officers of our general partner, all prior grants under the TransMontaigne Services LLC savings and retention program vested upon the change in control of our general partner as a result of the ArcLight acquisition that occurred on February 1, 2016. A person will satisfy the age and length of service thresholds of the program upon the attainment of the earliest of (a) age sixty, (b) age fifty five and ten years of service as an officer of TLP Management Services or any of its affiliates or predecessors, or (c) age fifty and twenty years of service as an employee of TLP Management Services or any of its affiliates or predecessors. Under the omnibus agreement we have agreed to reimburse the owner of TransMontaigne GP for bonus awards made to key employees under the owner’s savings and retention program, provided the compensation committee and the conflicts committee of our general partner approve the annual awards granted under the program (see Note 2 of the Notes to consolidated financial statements). We have the option to provide the reimbursement in either a cash payment or the delivery of our common units to the savings and retention program or alternatively directly to the award recipients, with the reimbursement made in accordance with the underlying vesting and payment schedule of the savings and retention program. Our reimbursement for the bonus awards 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 bonus awards in our common units, and accordingly, we account for the bonus awards as an equity award. Given that we do not have any employees to provide corporate and support services and instead we contract for such services under the omnibus agreement, generally accepted accounting principles require us to classify the savings and retention program awards 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. That cost, or an estimate of that cost in the case of unvested restricted phantom units, is recognized over the period during which services are provided in exchange for the award. As of March 31, 2017, there was approximately $2.1 million of total unrecognized equity-based compensation expense related to unvested restricted phantom units, which is expected to be amortized over the remaining weighted average period of 1.91 years For bonus awards to employees of TLP Management Services, equity-based compensation of approximately $1,749,000 and $1,635,000 is included in equity-based compensation expense for the three months ended March 31, 2017 and 2016, respectively. Activity related to our equity based awards granted under the savings and retention program for services performed under the omnibus agreement for the three months ended March 31, 2017 is as follows: Weighted Weighted average average Vested price Unvested price Restricted phantom units outstanding at December 31, 2016 88,118 $ 35.82 38,438 $ 34.90 Issuance of units (23,612) $ 44.70 — $ — Units withheld for settlement of withholding taxes (8,618) $ 44.33 — $ — Unit accrual for distributions paid 974 $ 44.42 534 $ 44.42 Vesting of units 6,358 $ 44.56 (6,358) $ 44.56 Grant of units 34,978 $ 44.70 21,875 $ 44.70 Restricted phantom units outstanding at March 31, 2017 98,198 $ 38.70 54,489 $ 38.64 Vested and expected to vest at March 31, 2017 152,687 $ 38.68 |
NET EARNINGS PER LIMITED PARTNE
NET EARNINGS PER LIMITED PARTNER UNIT | 3 Months Ended |
Mar. 31, 2017 | |
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, except per unit amounts): Three months ended March 31, 2017 2016 Net earnings $ 12,954 $ 8,710 Less: Distributions payable on behalf of incentive distribution rights (2,636) (1,920) Distributions payable on behalf of general partner interest (239) (224) Earnings allocable to general partner interest less than distributions payable to general partner interest 32 88 Earnings allocable to general partner interest including incentive distribution rights (2,843) (2,056) Net earnings allocable to limited partners per the consolidated statements of operations $ 10,111 $ 6,654 Basic weighted average units 16,245 16,181 Diluted weighted average units 16,266 16,188 Net earnings per limited partner unit—basic $ 0.62 $ 0.41 Net earnings per limited partner unit—diluted $ 0.62 $ 0.41 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, 2016 through March 31, 2016 $ 0.680 April 1, 2016 through June 30, 2016 $ 0.690 July 1, 2016 through September 30, 2016 $ 0.700 October 1, 2016 through December 31, 2016 $ 0.710 January 1, 2017 through March 31, 2017 $ 0.725 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | (16) COMMITMENTS AND CONTINGENCIES Contract commitments. At March 31, 2017, we have contractual commitments of approximately $23.8 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 March 31, 2017, future minimum lease payments under these non‑cancelable operating leases are as follows (in thousands): Years ending December 31: 2017 (remainder of the year) $ 2,949 2018 1,650 2019 1,636 2020 1,483 2021 1,414 Thereafter 3,502 $ 12,634 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 $2.6 million in future periods. Rental expense under operating leases was approximately $0.9 million for both the three months ended March 31, 2017 and 2016. Legal proceedings . We are party to various legal, regulatory and other matters arising from the day-to-day operations of our business that may result in claims against us. While the ultimate impact of any proceedings cannot be predicted with certainty, our management believes that the resolution of any of our pending legal proceedings will not have a material adverse effect on our business, financial position, results of operations or cash flows. |
DISCLOSURES ABOUT FAIR VALUE
DISCLOSURES ABOUT FAIR VALUE | 3 Months Ended |
Mar. 31, 2017 | |
DISCLOSURES ABOUT FAIR VALUE | |
DISCLOSURES ABOUT FAIR VALUE | (17) DISCLOSURES ABOUT FAIR VALUE “GAAP” defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. GAAP 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 March 31, 2017 and December 31, 2016. 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 instruments. The carrying amount of our interest rate swaps 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. 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 | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 2016 Gulf Coast Terminals: Terminaling services fees $ 13,124 $ 11,367 Other 3,166 2,236 Revenue 16,290 13,603 Direct operating costs and expenses (5,554) (5,226) Net margins 10,736 8,377 Midwest Terminals and Pipeline System: Terminaling services fees 2,167 2,177 Pipeline transportation fees 433 433 Other 236 286 Revenue 2,836 2,896 Direct operating costs and expenses (712) (682) Net margins 2,124 2,214 Brownsville Terminals: Terminaling services fees 1,992 2,155 Pipeline transportation fees 1,283 1,008 Other 2,399 4,530 Revenue 5,674 7,693 Direct operating costs and expenses (2,872) (2,701) Net margins 2,802 4,992 River Terminals: Terminaling services fees 2,467 2,146 Other 203 197 Revenue 2,670 2,343 Direct operating costs and expenses (1,650) (2,047) Net margins 1,020 296 Southeast Terminals: Terminaling services fees 15,384 13,257 Other 1,996 834 Revenue 17,380 14,091 Direct operating costs and expenses (5,723) (5,250) Net margins 11,657 8,841 Total net margins 28,339 24,720 General and administrative expenses (3,971) (3,878) Insurance expenses (1,006) (895) Equity-based compensation expense (1,817) (2,155) Depreciation and amortization (8,705) (7,935) Earnings from unconsolidated affiliates 2,560 1,850 Operating income 15,400 11,707 Other expenses (2,446) (2,997) Net earnings $ 12,954 $ 8,710 Supplemental information about our business segments is summarized below (in thousands): Three months ended March 31, 2017 Midwest Terminals and Gulf Coast Pipeline Brownsville River Southeast Terminals System Terminals Terminals Terminals Total Revenue: External customers $ 16,290 $ 2,836 $ 3,904 $ 2,670 $ 17,380 $ 43,080 Frontera — — 1,770 — — 1,770 Revenue $ 16,290 $ 2,836 $ 5,674 $ 2,670 $ 17,380 $ 44,850 Capital expenditures $ 1,527 $ 222 $ 144 $ 394 $ 7,213 $ 9,500 Identifiable assets $ 126,807 $ 21,798 $ 43,403 $ 51,610 $ 199,274 $ 442,892 Cash and cash equivalents 641 Investments in unconsolidated affiliates 241,304 Deferred financing costs 6,069 Other 5,624 Total assets $ 696,530 Three months ended March 31, 2016 Midwest Terminals and Gulf Coast Pipeline Brownsville River Southeast Terminals System Terminals Terminals Terminals Total Revenue: External customers $ 13,479 $ 2,896 $ 6,300 $ 2,343 $ 11,254 $ 36,272 NGL Energy Partners LP 124 — — — 2,837 2,961 Frontera — — 1,393 — — 1,393 Revenue $ 13,603 $ 2,896 $ 7,693 $ 2,343 $ 14,091 $ 40,626 Capital expenditures $ 820 $ 261 $ 256 $ 739 $ 7,407 $ 9,483 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 3 Months Ended |
Mar. 31, 2017 | |
SUBSEQUENT EVENT. | |
SUBSEQUENT EVENT | (19) SUBSEQUENT EVENT On April 17, 2017, we announced a distribution of $0.725 per unit for the period from January 1, 2017 through March 31, 2017. This distribution was paid on May 8, 2017 to unitholders of record on April 28, 2017. |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of business | (a) Nature of business TransMontaigne Partners L.P. (“we,” “us,” “our,” “the Partnership”) was formed in February 2005 as a Delaware limited partnership. 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 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 are controlled by our general partner, TransMontaigne GP L.L.C. (“TransMontaigne GP”), which as of February 1, 2016 is a wholly‑owned indirect subsidiary of ArcLight Energy Partners Fund VI, L.P. (“ArcLight”). Prior to February 1, 2016, TransMontaigne LLC, a wholly-owned subsidiary of NGL Energy Partners LP (“NGL”), owned all the issued and outstanding ownership interests of TransMontaigne GP. |
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 generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of TransMontaigne Partners L.P. 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 March 31, 2017 and December 31, 2016 and our results of operations for the three months ended March 31, 2017 and 2016. Certain reclassifications of previously reported amounts have been made to conform to the current year presentation. The preparation of financial statements in conformity with “GAAP” 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/or involve complex analyses: useful lives of our plant and equipment and accrued environmental obligations. 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 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 March 31, 2017 and 2016, we recognized revenue of approximately $2.7 million and $1.4 million, respectively, for net product gained. Within these amounts, approximately $nil and $0.3 million for the three months ended March 31, 2017 and 2016, 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 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). In connection with our previous acquisitions of certain terminals from TransMontaigne LLC, TransMontaigne LLC has agreed to indemnify us against certain potential environmental claims, losses and expenses at those terminals (see Note 2 of Notes to consolidated financial statements). |
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 (see Note 14 of Notes to consolidated financial statements). |
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 9 of Notes to consolidated financial statements). Changes in the fair value of our derivative instruments are recognized in earnings. At both March 31, 2017 and December 31, 2016, our derivative instruments were limited to interest rate swap agreements with an aggregate notional amount of $125.0 million. Our derivative instruments expire between March 25, 2018 and March 11, 2019. Pursuant to the terms of the interest rate swap agreements, we pay a blended fixed rate of approximately 1.01% 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 we are treated as a partnership for federal income tax purposes. As a partnership, all income, gains, losses, expenses, deductions and tax credits generated by us flow through to our unitholders. |
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 calculated under the two-class method and accordingly 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 our distributions. 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 the limited partners by the weighted average number of 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 average number of limited partner units outstanding during the period and any potential dilutive securities outstanding during the period. |
Comprehensive Income | (m) Comprehensive income Entities that report items of other comprehensive income have the option to present the components of net earnings and comprehensive income in either one continuous financial statement, or two consecutive financial statements. As the Partnership has no components of comprehensive income other than net earnings, no statement of comprehensive income has been presented. |
Recent accounting pronouncements | (n) 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. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period and allows for both retrospective and modified retrospective methods of adoption. We are currently evaluating the impact of ASU 2014-09 and all related ASU’s on a representative sample of individual customer contracts. Additionally, we are in the process of evaluating and designing the necessary changes to our business processes, systems and controls to support recognition and disclosure under the new standard. We are continuing our evaluation to determine the impact on our consolidated financial condition and results of operations. In February 2016, the FASB issued ASU 2016-02, Leases. The objective of this update is to improve financial reporting about leasing transactions. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, 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. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipt and Cash Payments, to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. ASU 2016-15 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. In January 2017, the FASB issued ASU 2017-04, Intangibles- Goodwill and Other: Simplifying the Test for Goodwill Impairment, to simplify the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. ASU 2017-04 is effective for annual reporting periods beginning after December 15, 2019, 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) | 3 Months Ended |
Mar. 31, 2017 | |
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): March 31, December 31, 2017 2016 Trade accounts receivable $ 9,207 $ 9,416 Less allowance for doubtful accounts (119) (119) $ 9,088 $ 9,297 |
Schedule of customer who accounted for at least 10% of consolidated revenue | Three months ended March 31, 2017 2016 NGL Energy Partners LP 26 % 21 % Castleton Commodities International LLC 13 % 14 % RaceTrac Petroleum Inc. 12 % 12 % |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
OTHER CURRENT ASSETS | |
Schedule of other current assets (in thousands) | Other current assets are as follows (in thousands): March 31, December 31, 2017 2016 Amounts due from insurance companies $ 2,248 $ 1,810 Additive detergent 1,292 1,364 Prepaid insurance 4,073 4,684 Deposits and other assets 577 2,045 $ 8,190 $ 9,903 |
PROPERTY, PLANT AND EQUIPMENT30
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |
Schedule of property, plant and equipment, net (in thousands) | Property, plant and equipment, net is as follows (in thousands): March 31, December 31, 2017 2016 Land $ 53,079 $ 53,079 Terminals, pipelines and equipment 664,347 651,783 Furniture, fixtures and equipment 4,123 4,100 Construction in progress 11,032 11,715 732,581 720,677 Less accumulated depreciation (312,586) (303,929) $ 419,995 $ 416,748 |
GOODWILL (Tables)
GOODWILL (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
GOODWILL. | |
Schedule of goodwill (in thousands) | Goodwill is as follows (in thousands): March 31, December 31, 2017 2016 Brownsville terminals $ 8,485 $ 8,485 |
INVESTMENTS IN UNCONSOLIDATED32
INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | |
Summary of investments in unconsolidated affiliates | Percentage of Carrying value ownership (in thousands) March 31, December 31, March 31, December 31, 2017 2016 2017 2016 BOSTCO 42.5 % 42.5 % $ 216,568 $ 217,941 Frontera 50 % 50 % 24,736 23,152 Total investments in unconsolidated affiliates $ 241,304 $ 241,093 |
Schedule of earnings from investments in unconsolidated affiliates (in thousands) | Earnings from investments in unconsolidated affiliates were as follows (in thousands): Three months ended March 31, 2017 2016 BOSTCO $ 1,706 $ 1,392 Frontera 854 458 Total earnings from investments in unconsolidated affiliates $ 2,560 $ 1,850 |
Schedule of additional capital investments in unconsolidated affiliates (in thousands) | Additional capital investments in unconsolidated affiliates were as follows (in thousands): Three months ended March 31, 2017 2016 BOSTCO $ — $ 2,125 Frontera 2,000 100 Additional capital investments in unconsolidated affiliates $ 2,000 $ 2,225 |
Schedule of cash distributions received from unconsolidated affiliates (in thousands) | Cash distributions received from unconsolidated affiliates were as follows (in thousands): Three months ended March 31, 2017 2016 BOSTCO $ 3,079 $ 3,634 Frontera 1,270 501 Cash distributions received from unconsolidated affiliates $ 4,349 $ 4,135 |
Summary of financial information of unconsolidated affiliates (in thousands) | The summarized financial information of our unconsolidated affiliates was as follows (in thousands): Balance sheets: BOSTCO Frontera March 31, December 31, March 31, December 31, 2017 2016 2017 2016 Current assets $ 23,234 $ 23,237 $ 9,441 $ 5,779 Long-term assets 480,604 485,331 41,865 41,966 Current liabilities (11,183) (12,799) (1,588) (1,172) Long-term liabilities — — (246) (269) Net assets $ 492,655 $ 495,769 $ 49,472 $ 46,304 Statements of operations: BOSTCO Frontera Three months ended Three months ended March 31, March 31, 2017 2016 2017 2016 Revenue $ 16,630 $ 16,681 $ 5,393 $ 4,142 Expenses (12,238) (12,250) (3,685) (3,226) Net earnings $ 4,392 $ 4,431 $ 1,708 $ 916 |
OTHER ASSETS, NET (Tables)
OTHER ASSETS, NET (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
OTHER ASSETS, NET | |
Schedule of other assets, net (in thousands) | Other assets, net are as follows (in thousands): March 31, December 31, 2017 2016 Deferred financing costs, net of accumulated amortization of $5,057 and $4,763, respectively $ 6,069 $ 1,298 Amounts due under long-term terminaling services agreements 673 656 Customer relationships, net of accumulated amortization of $2,143 and $2,092, respectively 287 338 Unrealized gain on derivative instruments 602 344 Deposits and other assets 233 286 $ 7,864 $ 2,922 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
ACCRUED LIABILITIES | |
Schedule of accrued liabilities (in thousands) | Accrued liabilities are as follows (in thousands): March 31, December 31, 2017 2016 Customer advances and deposits: External customers $ 9,921 $ 8,602 Affiliates 108 108 10,029 8,710 Accrued property taxes 1,630 1,061 Accrued environmental obligations 2,115 2,107 Interest payable 488 232 Accrued expenses and other 2,403 1,888 $ 16,665 $ 13,998 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
OTHER LIABILITIES | |
Schedule of other liabilities (in thousands) | Other liabilities are as follows (in thousands): March 31, December 31, 2017 2016 Advance payments received under long-term terminaling services agreements $ 913 $ 994 Deferred revenue—ethanol blending fees and other projects 2,200 2,240 $ 3,113 $ 3,234 |
PARTNERS' EQUITY (Tables)
PARTNERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
PARTNERS' EQUITY | |
Schedule of number of units outstanding | General Common partner units equivalent units Units outstanding at December 31, 2016 16,137,650 329,339 Issuance of common units pursuant to our savings and retention program 23,612 — TransMontaigne GP to maintain its 2% general partner interest — 482 Units outstanding at March 31, 2017 16,161,262 329,821 |
EQUITY BASED COMPENSATION (Tabl
EQUITY BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
TransMontaigne LLC-related party | |
Schedule of long-term incentive plan activity | Weighted Weighted average average Vested price Unvested price Restricted phantom units outstanding at December 31, 2016 88,118 $ 35.82 38,438 $ 34.90 Issuance of units (23,612) $ 44.70 — $ — Units withheld for settlement of withholding taxes (8,618) $ 44.33 — $ — Unit accrual for distributions paid 974 $ 44.42 534 $ 44.42 Vesting of units 6,358 $ 44.56 (6,358) $ 44.56 Grant of units 34,978 $ 44.70 21,875 $ 44.70 Restricted phantom units outstanding at March 31, 2017 98,198 $ 38.70 54,489 $ 38.64 Vested and expected to vest at March 31, 2017 152,687 $ 38.68 |
NET EARNINGS PER LIMITED PART38
NET EARNINGS PER LIMITED PARTNER UNIT (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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, except per unit amounts): Three months ended March 31, 2017 2016 Net earnings $ 12,954 $ 8,710 Less: Distributions payable on behalf of incentive distribution rights (2,636) (1,920) Distributions payable on behalf of general partner interest (239) (224) Earnings allocable to general partner interest less than distributions payable to general partner interest 32 88 Earnings allocable to general partner interest including incentive distribution rights (2,843) (2,056) Net earnings allocable to limited partners per the consolidated statements of operations $ 10,111 $ 6,654 Basic weighted average units 16,245 16,181 Diluted weighted average units 16,266 16,188 Net earnings per limited partner unit—basic $ 0.62 $ 0.41 Net earnings per limited partner unit—diluted $ 0.62 $ 0.41 |
Schedule of distribution declared per common unit attributable to the periods | Distribution January 1, 2016 through March 31, 2016 $ 0.680 April 1, 2016 through June 30, 2016 $ 0.690 July 1, 2016 through September 30, 2016 $ 0.700 October 1, 2016 through December 31, 2016 $ 0.710 January 1, 2017 through March 31, 2017 $ 0.725 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of future minimum lease payments under non-cancelable operating leases (in thousands) | At March 31, 2017, future minimum lease payments under these non‑cancelable operating leases are as follows (in thousands): Years ending December 31: 2017 (remainder of the year) $ 2,949 2018 1,650 2019 1,636 2020 1,483 2021 1,414 Thereafter 3,502 $ 12,634 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 2016 Gulf Coast Terminals: Terminaling services fees $ 13,124 $ 11,367 Other 3,166 2,236 Revenue 16,290 13,603 Direct operating costs and expenses (5,554) (5,226) Net margins 10,736 8,377 Midwest Terminals and Pipeline System: Terminaling services fees 2,167 2,177 Pipeline transportation fees 433 433 Other 236 286 Revenue 2,836 2,896 Direct operating costs and expenses (712) (682) Net margins 2,124 2,214 Brownsville Terminals: Terminaling services fees 1,992 2,155 Pipeline transportation fees 1,283 1,008 Other 2,399 4,530 Revenue 5,674 7,693 Direct operating costs and expenses (2,872) (2,701) Net margins 2,802 4,992 River Terminals: Terminaling services fees 2,467 2,146 Other 203 197 Revenue 2,670 2,343 Direct operating costs and expenses (1,650) (2,047) Net margins 1,020 296 Southeast Terminals: Terminaling services fees 15,384 13,257 Other 1,996 834 Revenue 17,380 14,091 Direct operating costs and expenses (5,723) (5,250) Net margins 11,657 8,841 Total net margins 28,339 24,720 General and administrative expenses (3,971) (3,878) Insurance expenses (1,006) (895) Equity-based compensation expense (1,817) (2,155) Depreciation and amortization (8,705) (7,935) Earnings from unconsolidated affiliates 2,560 1,850 Operating income 15,400 11,707 Other expenses (2,446) (2,997) Net earnings $ 12,954 $ 8,710 |
Schedule of supplemental information about consolidated business segments (in thousands) | Supplemental information about our business segments is summarized below (in thousands): Three months ended March 31, 2017 Midwest Terminals and Gulf Coast Pipeline Brownsville River Southeast Terminals System Terminals Terminals Terminals Total Revenue: External customers $ 16,290 $ 2,836 $ 3,904 $ 2,670 $ 17,380 $ 43,080 Frontera — — 1,770 — — 1,770 Revenue $ 16,290 $ 2,836 $ 5,674 $ 2,670 $ 17,380 $ 44,850 Capital expenditures $ 1,527 $ 222 $ 144 $ 394 $ 7,213 $ 9,500 Identifiable assets $ 126,807 $ 21,798 $ 43,403 $ 51,610 $ 199,274 $ 442,892 Cash and cash equivalents 641 Investments in unconsolidated affiliates 241,304 Deferred financing costs 6,069 Other 5,624 Total assets $ 696,530 Three months ended March 31, 2016 Midwest Terminals and Gulf Coast Pipeline Brownsville River Southeast Terminals System Terminals Terminals Terminals Total Revenue: External customers $ 13,479 $ 2,896 $ 6,300 $ 2,343 $ 11,254 $ 36,272 NGL Energy Partners LP 124 — — — 2,837 2,961 Frontera — — 1,393 — — 1,393 Revenue $ 13,603 $ 2,896 $ 7,693 $ 2,343 $ 14,091 $ 40,626 Capital expenditures $ 820 $ 261 $ 256 $ 739 $ 7,407 $ 9,483 |
SUMMARY OF SIGNIFICANT ACCOUN41
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Revenue recognized from proceeds of sale of product gained | $ 2.7 | $ 1.4 |
Recognized revenue pursuant to terminaling services agreements with affiliate customers | $ 0 | $ 0.3 |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property (Details) | 3 Months Ended |
Mar. 31, 2017 | |
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 and Derivatives (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Net earnings per limited partner unit | ||
General partner interest (as a percent) | 2.00% | 2.00% |
Interest rate swap | ||
Accounting for derivative instruments | ||
Notional amount | $ 125 | $ 125 |
Fixed interest rate paid (as a percent) | 1.01% |
TRANSACTIONS WITH AFFILIATES (D
TRANSACTIONS WITH AFFILIATES (Details) bbl in Millions | May 03, 2017USD ($)bbl | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) |
Transactions with affiliates | |||
Insurance expense paid | $ 1,006,000 | $ 895,000 | |
Expense of insurance contracted with affiliates | 3,971,000 | 3,878,000 | |
Insurance expense | 1,000,000 | 0 | |
Gulf TLP Holdings, LLC-related party | Omnibus agreement | |||
Transactions with affiliates | |||
Administrative fee paid | 2,900,000 | 2,800,000 | |
Insurance expense paid | $ 0 | $ 0 | |
Collins Mississippi bulk storage terminal | |||
Transactions with affiliates | |||
Increase in administrative fee | $ 1,800,000 | ||
Monthly increase in administrative fee | $ 150,000 | ||
Storage capacity placed in service (in barrels) | bbl | 2 |
TRANSACTIONS WITH AFFILIATES -
TRANSACTIONS WITH AFFILIATES - Agreements (Details) | Jul. 01, 2014 | Mar. 31, 2017USD ($)bbl | Mar. 31, 2016USD ($) | Mar. 31, 2017USD ($) | Apr. 01, 2011 | Mar. 01, 2011USD ($) |
Transactions with affiliates | ||||||
Throughput revenue | $ 1,770,000 | $ 4,354,000 | ||||
Frontera | ||||||
Transactions with affiliates | ||||||
Throughput revenue | 1,770,000 | 1,393,000 | ||||
Environmental indemnification | TransMontaigne LLC-related party | Florida and Midwest terminals | ||||||
Transactions with affiliates | ||||||
Maximum liability for indemnification obligation | 15,000,000 | $ 15,000,000 | ||||
Liability for indemnification obligation, if aggregate losses do not exceed specified amount | 0 | 0 | ||||
Aggregate losses for indemnification obligation | 250,000 | 250,000 | ||||
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, Texas and River terminals | ||||||
Transactions with affiliates | ||||||
Maximum liability for indemnification obligation | 15,000,000 | 15,000,000 | ||||
Liability for indemnification obligation, if aggregate losses do not exceed specified amount | 0 | 0 | ||||
Aggregate losses for indemnification obligation | 250,000 | 250,000 | ||||
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 | ||||||
Transactions with affiliates | ||||||
Maximum liability for indemnification obligation | 15,000,000 | 15,000,000 | ||||
Liability for indemnification obligation, if aggregate losses do not exceed specified amount | 0 | 0 | ||||
Aggregate losses for indemnification obligation | 250,000 | 250,000 | ||||
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 | ||||||
Transactions with affiliates | ||||||
Maximum liability for indemnification obligation | $ 2,500,000 | |||||
Liability for indemnification obligation, if aggregate losses do not exceed specified amount | $ 200,000 | |||||
Terminaling services agreement-Southeast terminals | NGL | Minimum | ||||||
Transactions with affiliates | ||||||
Throughput revenue | $ 6,800,000 | 6,700,000 | ||||
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-Southeast terminals | NGL | Southeast terminals | Minimum | ||||||
Transactions with affiliates | ||||||
Notice period for termination of service agreement | 24 months | |||||
Terminaling services agreement-Brownsville LPG | Frontera | Brownsville terminals | ||||||
Transactions with affiliates | ||||||
Notice period for termination of service agreement | 2 years | |||||
Terminaling services agreement-Brownsville LLC | Frontera | Brownsville terminals | ||||||
Transactions with affiliates | ||||||
Notice period for termination of service agreement | 180 days | |||||
Storage capacity agreed to be provided (in barrels) | bbl | 151,000 | |||||
Throughput revenue | $ 300,000 | $ 0 | ||||
Operations and reimbursement agreement-Frontera | Frontera | ||||||
Transactions with affiliates | ||||||
Ownership interest in joint venture (as a percent) | 50.00% | |||||
Revenue recognized | $ 1,400,000 |
ACQUISITION OF TERMINAL ASSET46
ACQUISITION OF TERMINAL ASSETS FROM AFFILIATE (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Jan. 28, 2016 | |
Acquisitions | |||
Payment for acquisition of hydrant system from TransMontaigne LLC | $ 12,000 | ||
Remaining purchase price | $ 5,500 | ||
Port Everglades-hydrant system | |||
Acquisitions | |||
Net book value | $ 6,500 |
CONCENTRATION OF CREDIT RISK 47
CONCENTRATION OF CREDIT RISK AND TRADE ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Concentration of credit risk and trade accounts receivable | |||
Trade accounts receivable | $ 9,207 | $ 9,416 | |
Less allowance for doubtful accounts | (119) | (119) | |
Trade accounts receivable, net | $ 9,088 | $ 9,297 | |
NGL Energy Partners LP | |||
Concentration of credit risk and trade accounts receivable | |||
Percentage of total revenue generated by major customer | 26.00% | 21.00% | |
Castleton Commodities International LLC | |||
Concentration of credit risk and trade accounts receivable | |||
Percentage of total revenue generated by major customer | 13.00% | 14.00% | |
RaceTrac Petroleum Inc | |||
Concentration of credit risk and trade accounts receivable | |||
Percentage of total revenue generated by major customer | 12.00% | 12.00% |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
OTHER CURRENT ASSETS | ||
Amounts due from insurance companies | $ 2,248 | $ 1,810 |
Additive detergent | 1,292 | 1,364 |
Prepaid insurance | 4,073 | 4,684 |
Deposits and other assets | 577 | 2,045 |
Other current assets | 8,190 | $ 9,903 |
Reimbursements from insurance companies | 500 | |
Increase in estimated insurance recovery | $ 900 |
PROPERTY, PLANT AND EQUIPMENT49
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Property, plant and equipment, net | ||
Property, plant and equipment, gross | $ 732,581 | $ 720,677 |
Less accumulated depreciation | (312,586) | (303,929) |
Property, plant and equipment, net | 419,995 | 416,748 |
Land | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | 53,079 | 53,079 |
Terminals, pipelines and equipment | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | 664,347 | 651,783 |
Furniture, fixtures and equipment | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | 4,123 | 4,100 |
Construction in progress | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | $ 11,032 | $ 11,715 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Goodwill | ||
Goodwill | $ 8,485 | $ 8,485 |
Brownsville terminals | ||
Goodwill | ||
Goodwill | 8,485 | 8,485 |
Impairment charges | $ 0 | $ 0 |
INVESTMENTS IN UNCONSOLIDATED51
INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Details) $ in Thousands, bbl in Millions | 3 Months Ended | ||
Mar. 31, 2017USD ($)bbl | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | |||
Carrying value of investments in unconsolidated affiliates | $ 241,304 | $ 241,093 | |
Earnings from unconsolidated affiliates | 2,560 | $ 1,850 | |
Additional capital investments in unconsolidated affiliates | 2,000 | 2,225 | |
Cash distributions received from unconsolidated affiliates | $ 4,349 | 4,135 | |
BOSTCO | |||
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | |||
Storage capacity | bbl | 7.1 | ||
Percentage of ownership | 42.50% | 42.50% | |
Carrying value of investments in unconsolidated affiliates | $ 216,568 | $ 217,941 | |
Excess investment | 7,200 | 7,200 | |
Earnings from unconsolidated affiliates | 1,706 | 1,392 | |
Additional capital investments in unconsolidated affiliates | 2,125 | ||
Cash distributions received from unconsolidated affiliates | 3,079 | 3,634 | |
Balance sheets: | |||
Current assets | 23,234 | 23,237 | |
Long-term assets | 480,604 | 485,331 | |
Current liabilities | (11,183) | (12,799) | |
Net assets | 492,655 | $ 495,769 | |
Statements of comprehensive income (loss): | |||
Revenue | 16,630 | 16,681 | |
Expenses | (12,238) | (12,250) | |
Net earnings | $ 4,392 | 4,431 | |
Frontera | |||
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | |||
Storage capacity | bbl | 1.5 | ||
Percentage of ownership | 50.00% | 50.00% | |
Carrying value of investments in unconsolidated affiliates | $ 24,736 | $ 23,152 | |
Earnings from unconsolidated affiliates | 854 | 458 | |
Additional capital investments in unconsolidated affiliates | 2,000 | 100 | |
Cash distributions received from unconsolidated affiliates | 1,270 | 501 | |
Balance sheets: | |||
Current assets | 9,441 | 5,779 | |
Long-term assets | 41,865 | 41,966 | |
Current liabilities | (1,588) | (1,172) | |
Long-term liabilities | (246) | (269) | |
Net assets | 49,472 | $ 46,304 | |
Statements of comprehensive income (loss): | |||
Revenue | 5,393 | 4,142 | |
Expenses | (3,685) | (3,226) | |
Net earnings | $ 1,708 | $ 916 | |
Class A Member Ownership Interest | BOSTCO | |||
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | |||
Cash distributions, allocation percentage | 96.50% | ||
Class B Member Ownership Interest | BOSTCO | |||
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | |||
Cash distributions, allocation percentage | 3.50% |
OTHER ASSETS, NET (Details)
OTHER ASSETS, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
OTHER ASSETS, NET | ||
Deferred financing costs, net of accumulated amortization of $5,057 and $4,763, respectively | $ 6,069 | $ 1,298 |
Amounts due under long-term terminaling services agreements | 673 | 656 |
Customer relationships, net of accumulated amortization of $2,143 and $2,092, respectively | 287 | 338 |
Unrealized gain on derivative instruments | 602 | 344 |
Deposits and other assets | 233 | 286 |
Other assets, net | 7,864 | 2,922 |
Accumulated amortization of deferred financing costs | 5,057 | 4,763 |
Accumulated amortization of customer relationships | $ 2,143 | $ 2,092 |
Amortization period of customer relationships | 12 years |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Customer advances and deposits: | ||
External customers | $ 9,921 | $ 8,602 |
Affiliates | 108 | 108 |
Customer advances and deposits | 10,029 | 8,710 |
Accrued property taxes | 1,630 | 1,061 |
Accrued environmental obligations | 2,115 | 2,107 |
Interest payable | 488 | 232 |
Accrued expenses and other | 2,403 | 1,888 |
Accrued liabilities | $ 16,665 | $ 13,998 |
Period for billing of customers in advance for terminaling services | 1 month | |
Accrued environmental obligations | ||
Payments | $ 500 | |
Increase in estimate | $ 500 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
OTHER LIABILITIES | |||
Advance payments received under long-term terminaling services agreements | $ 913 | $ 994 | |
Deferred revenue-ethanol blending fees and other projects | 2,200 | 2,240 | |
Other liabilities | 3,113 | $ 3,234 | |
Recognized revenue on a straight line basis for completed projects | $ 100 | $ 200 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Long-term debt | |||
Ownership interest in subsidiary (as a percent) | 100.00% | ||
TransMontaigne Operating Company L.P | |||
Long-term debt | |||
Ownership interest in subsidiary (as a percent) | 100.00% | ||
Maximum | |||
Long-term debt | |||
Other investments as a percentage of consolidated net tangible assets | 5.00% | ||
Permitted JV investments subject to liquidity | $ 175 | ||
Credit facility | |||
Long-term debt | |||
Maximum borrowing capacity | 600 | ||
Additional amount the line of credit facility may be increased | $ 250 | ||
Weighted average interest rate on borrowings (as a percent) | 3.30% | 3.10% | |
Outstanding borrowings under credit facility | $ 292.5 | $ 291.8 | |
Outstanding borrowings under letters of credit | $ 0.4 | $ 0.4 | |
Credit facility | Minimum | |||
Long-term debt | |||
Commitment fee on unused amount of commitments (as a percent) | 0.375% | ||
Credit facility | Minimum | LIBOR | |||
Long-term debt | |||
Margin interest above reference rate (as a percent) | 1.75% | ||
Credit facility | Minimum | Base Rate | |||
Long-term debt | |||
Margin interest above reference rate (as a percent) | 0.75% | ||
Credit facility | Maximum | |||
Long-term debt | |||
Commitment fee on unused amount of commitments (as a percent) | 0.50% | ||
Credit facility | Maximum | LIBOR | |||
Long-term debt | |||
Margin interest above reference rate (as a percent) | 2.75% | ||
Credit facility | Maximum | Base Rate | |||
Long-term debt | |||
Margin interest above reference rate (as a percent) | 1.75% |
PARTNERS' EQUITY (Details)
PARTNERS' EQUITY (Details) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Changes in number of units outstanding | ||
Issuance of common units pursuant to our savings and retention program (in units) | 23,612 | 2,094 |
Common units | ||
Changes in number of units outstanding | ||
Units outstanding at the beginning of the period | 16,137,650 | |
Issuance of common units pursuant to our savings and retention program (in units) | 23,612 | |
Units outstanding at the end of the period | 16,161,262 | 16,137,650 |
General partner interest | ||
Changes in number of units outstanding | ||
Units outstanding at the beginning of the period | 329,339 | |
TransMontaigne GP to maintain its 2% general partner interest | 482 | |
Units outstanding at the end of the period | 329,821 | 329,339 |
EQUITY BASED COMPENSATION (Deta
EQUITY BASED COMPENSATION (Details) - USD ($) | Oct. 21, 2016 | Oct. 18, 2016 | Feb. 01, 2016 | Mar. 31, 2017 | Mar. 31, 2016 |
Incentive plan activity | |||||
Vesting (in units) | 15,750 | ||||
Additional disclosures | |||||
Equity-based compensation | $ 1,817,000 | $ 2,155,000 | |||
TLP Management Services LLC | |||||
Additional disclosures | |||||
Equity-based compensation | $ 1,749,000 | 1,635,000 | |||
Restricted phantom units | TransMontaigne LLC-related party | |||||
Incentive plan activity | |||||
Units, unvested, outstanding at the beginning of the period | 38,438 | ||||
Vesting (in units) | 6,358 | ||||
Unit accrual for distributions paid (in units) | 534 | ||||
Grant (in units) | 34,978 | ||||
Units, unvested, outstanding at the end of the period | 54,489 | ||||
Outstanding at the beginning of the period (in dollars per unit) | $ 34.90 | ||||
Vesting (in dollars per unit) | 44.56 | ||||
Units accrual for distributions paid (in dollars per unit) | 44.42 | ||||
Grant (in dollars per unit) | 44.70 | ||||
Outstanding at the end of the period (in dollars per unit) | $ 38.64 | ||||
Units outstanding at the beginning of the period (in units) | 88,118 | ||||
Vesting (in units) | (6,358) | ||||
Unit accrual for distributions (in units) | 974 | ||||
Grant (in units) | 21,875 | ||||
Issuance (in units) | (23,612) | ||||
Units withheld for settlement of withholding taxes (in units) | (8,618) | ||||
Units outstanding at the end of the period (in units) | 98,198 | ||||
Vested and expected to vest (in units) | 152,687 | ||||
Outstanding at the beginning of the period (in dollars per unit) | $ 35.82 | ||||
Vesting (in dollars per unit) | 44.56 | ||||
Unit accrual for distributions paid (in dollars per unit) | 44.42 | ||||
Grant (in dollars per unit) | 44.70 | ||||
Issuance (in dollars per unit) | 44.70 | ||||
Units withheld for settlement of withholding taxes (in dollars) | 44.33 | ||||
Outstanding at the end of the period (in dollars per unit) | 38.70 | ||||
Vested and expected to vest (in dollars per unit) | $ 38.68 | ||||
Restricted phantom units | TLP Management Services LLC | |||||
Additional disclosures | |||||
Nonemployee service, unrecognized equity-based compensation expense | $ 2,100,000 | ||||
Expected term (in years) | 1 year 10 months 28 days | ||||
Vesting (as a percent) | 50.00% | ||||
Restricted phantom units | TLP Management Services LLC | Vesting Tranche One | |||||
Additional disclosures | |||||
Earlier vesting, age threshold (in years) | 60 years | ||||
Restricted phantom units | TLP Management Services LLC | Vesting Tranche Two | |||||
Additional disclosures | |||||
Earlier vesting, age threshold (in years) | 55 years | ||||
Earlier vesting, length of service threshold (in years) | 10 years | ||||
Restricted phantom units | TLP Management Services LLC | Vesting Tranche Three | |||||
Additional disclosures | |||||
Earlier vesting, age threshold (in years) | 50 years | ||||
Earlier vesting, length of service threshold (in years) | 20 years | ||||
Long-term incentive plan | |||||
Long-term incentive plan | |||||
Authorized units | 750,000 | ||||
Additional disclosures | |||||
Equity-based compensation | $ 68,000 | $ 520,000 | |||
Long-term incentive plan | TLP Management Services LLC | |||||
Incentive plan activity | |||||
Grant (in units) | 3,258 | ||||
Additional disclosures | |||||
Issuance of common units pursuant to long-term incentive plan (in dollars) | $ 90,000 | ||||
Long-term incentive plan | Common units | TransMontaigne GP | |||||
Long-term incentive plan | |||||
Vesting period | 4 years | ||||
Long-term incentive plan | Common units | TLP Management Services LLC | |||||
Incentive plan activity | |||||
Outstanding at the end of the period (in dollars per unit) | $ 0 |
NET EARNINGS PER LIMITED PART58
NET EARNINGS PER LIMITED PARTNER UNIT (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | |
NET EARNINGS PER LIMITED PARTNER UNIT | ||||||
Net earnings | $ 12,954 | $ 8,710 | $ 44,106 | |||
Less: | ||||||
Distributions payable on behalf of incentive distribution rights | (2,636) | (1,920) | ||||
Distributions payable on behalf of general partner interest | (239) | (224) | ||||
Earnings allocable to general partner interest less than distributions payable to general partner interest | 32 | 88 | ||||
Earnings allocable to general partner interest including incentive distribution rights | (2,843) | (2,056) | ||||
Net earnings allocable to limited partners | $ 10,111 | $ 6,654 | ||||
Basic weighted average units | 16,245 | 16,181 | ||||
Diluted weighted average units | 16,266 | 16,188 | ||||
Net earnings per limited partner unit-basic (in dollars per unit) | $ 0.62 | $ 0.41 | ||||
Net earnings per limited partner unit-diluted (in dollars per unit) | $ 0.62 | 0.41 | ||||
Period for declaration of distribution, maximum | 45 days | |||||
Distribution declared per common unit (in dollars per unit) | $ 0.725 | $ 0.710 | $ 0.700 | $ 0.690 | $ 0.680 |
COMMITMENTS AND CONTINGENCIES59
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES | ||
Contractual commitments for supply of services, labor and materials | $ 23,800 | |
Future minimum lease payments under non-cancelable operating leases | ||
2017 (remainder of the year) | 2,949 | |
2,018 | 1,650 | |
2,019 | 1,636 | |
2,020 | 1,483 | |
2,021 | 1,414 | |
Thereafter | 3,502 | |
Total | 12,634 | |
Expected minimum sublease rentals to be received | 2,600 | |
Rental expense under operating leases | $ 900 | $ 900 |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segments of business | ||||
Total revenue | $ 44,850 | $ 40,626 | ||
Direct operating costs and expenses | (16,511) | (15,906) | ||
Net margins | 28,339 | 24,720 | ||
General and administrative expenses | (3,971) | (3,878) | ||
Insurance expenses | (1,006) | (895) | ||
Equity-based compensation expense | (1,817) | (2,155) | ||
Depreciation and amortization | (8,705) | (7,935) | ||
Earnings from unconsolidated affiliates | 2,560 | 1,850 | ||
Operating income | 15,400 | 11,707 | ||
Other expenses | (2,446) | (2,997) | ||
Net earnings | 12,954 | 8,710 | $ 44,106 | |
External customers | 43,080 | 36,272 | ||
Revenue from affiliates | 1,770 | 4,354 | ||
Capital expenditures | 9,500 | 9,483 | ||
Identifiable assets | 442,892 | |||
Cash and cash equivalents | 641 | 134 | 593 | $ 681 |
Investments in unconsolidated affiliates | 241,304 | 241,093 | ||
Deferred financing costs | 6,069 | 1,298 | ||
Other | 5,624 | |||
TOTAL ASSETS | 696,530 | 689,694 | ||
NGL Energy Partners LP | ||||
Segments of business | ||||
Revenue from affiliates | 2,961 | |||
Frontera | ||||
Segments of business | ||||
Revenue from affiliates | 1,770 | 1,393 | ||
Gulf Coast Terminals | ||||
Segments of business | ||||
Terminaling services fees | 13,124 | 11,367 | ||
Other | 3,166 | 2,236 | ||
Total revenue | 16,290 | 13,603 | ||
Direct operating costs and expenses | (5,554) | (5,226) | ||
Net margins | 10,736 | 8,377 | ||
External customers | 16,290 | 13,479 | ||
Capital expenditures | 1,527 | 820 | ||
Identifiable assets | 126,807 | |||
Gulf Coast Terminals | NGL Energy Partners LP | ||||
Segments of business | ||||
Revenue from affiliates | 124 | |||
Midwest Terminals and Pipeline System | ||||
Segments of business | ||||
Terminaling services fees | 2,167 | 2,177 | ||
Pipeline transportation fees | 433 | 433 | ||
Other | 236 | 286 | ||
Total revenue | 2,836 | 2,896 | ||
Direct operating costs and expenses | (712) | (682) | ||
Net margins | 2,124 | 2,214 | ||
External customers | 2,836 | 2,896 | ||
Capital expenditures | 222 | 261 | ||
Identifiable assets | 21,798 | |||
Brownsville terminals | ||||
Segments of business | ||||
Terminaling services fees | 1,992 | 2,155 | ||
Pipeline transportation fees | 1,283 | 1,008 | ||
Other | 2,399 | 4,530 | ||
Total revenue | 5,674 | 7,693 | ||
Direct operating costs and expenses | (2,872) | (2,701) | ||
Net margins | 2,802 | 4,992 | ||
External customers | 3,904 | 6,300 | ||
Capital expenditures | 144 | 256 | ||
Identifiable assets | 43,403 | |||
Impairment of goodwill | 0 | $ 0 | ||
Brownsville terminals | Frontera | ||||
Segments of business | ||||
Revenue from affiliates | 1,770 | 1,393 | ||
River terminals | ||||
Segments of business | ||||
Terminaling services fees | 2,467 | 2,146 | ||
Other | 203 | 197 | ||
Total revenue | 2,670 | 2,343 | ||
Direct operating costs and expenses | (1,650) | (2,047) | ||
Net margins | 1,020 | 296 | ||
External customers | 2,670 | 2,343 | ||
Capital expenditures | 394 | 739 | ||
Identifiable assets | 51,610 | |||
Southeast terminals | ||||
Segments of business | ||||
Terminaling services fees | 15,384 | 13,257 | ||
Other | 1,996 | 834 | ||
Total revenue | 17,380 | 14,091 | ||
Direct operating costs and expenses | (5,723) | (5,250) | ||
Net margins | 11,657 | 8,841 | ||
External customers | 17,380 | 11,254 | ||
Capital expenditures | 7,213 | 7,407 | ||
Identifiable assets | $ 199,274 | |||
Southeast terminals | NGL Energy Partners LP | ||||
Segments of business | ||||
Revenue from affiliates | $ 2,837 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - $ / shares | May 08, 2017 | Apr. 17, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 |
Subsequent Event | |||||||
Distribution announced per unit (in dollars per unit) | $ 0.725 | $ 0.710 | $ 0.700 | $ 0.690 | $ 0.680 | ||
Subsequent event | |||||||
Subsequent Event | |||||||
Distribution announced per unit (in dollars per unit) | $ 0.725 | ||||||
Distribution paid per unit (in dollars per unit) | $ 0.725 |