Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | ||
Jun. 30, 2017 | Jul. 27, 2017 | Dec. 31, 2016 | |
Entity Information [Line Items] | |||
Series A Preferred unitholders, units outstanding | 35,125,202 | 35,125,202 | |
Entity Registrant Name | Blueknight Energy Partners, L.P. | ||
Entity Central Index Key | 1,392,091 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | Q2 | ||
Document Type | 10-Q | ||
Amendment Flag | false | ||
Document Period End Date | Jun. 30, 2017 | ||
Entity Common Stock, Shares Outstanding | 38,183,975 | ||
Subsequent Event [Member] | |||
Entity Information [Line Items] | |||
Series A Preferred unitholders, units outstanding | 35,125,202 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 3,274 | $ 3,304 |
Accounts receivable, net of allowance for doubtful accounts of $49 and $37 at December 31, 2016 and June 30, 2017, respectively | 9,341 | 7,544 |
Receivables from related parties, net of allowance for doubtful accounts of $0 at both dates | 1,534 | 1,860 |
Prepaid insurance | 2,665 | 1,578 |
Other current assets | 7,671 | 7,934 |
Total current assets | 24,485 | 22,220 |
Assets, Noncurrent [Abstract] | ||
Property, plant and equipment, net of accumulated depreciation of $292,117 and $300,615 at December 31, 2016 and June 30, 2017, respectively | 298,345 | 307,334 |
Assets held for sale, net of accumulated depreciation of $3,041 at December 31, 2016 | 0 | 4,237 |
Investment in unconsolidated affiliate | 0 | 20,561 |
Goodwill | 4,746 | 4,746 |
Debt issuance costs, net | 4,759 | 2,050 |
Intangibles and other assets, net | 13,761 | 14,515 |
Total assets | 346,096 | 375,663 |
Current liabilities: | ||
Accounts payable | 4,430 | 3,174 |
Accounts payable to related parties | 1,680 | 1,053 |
Accrued interest payable | 729 | 413 |
Accrued property taxes payable | 2,736 | 2,531 |
Unearned revenue | 3,224 | 2,350 |
Unearned revenue with related parties | 4,413 | 383 |
Accrued payroll | 4,341 | 6,358 |
Other current liabilities | 4,393 | 4,279 |
Total current liabilities | 25,946 | 20,541 |
Long-term unearned revenue with related parties | 563 | 640 |
Other long-term liabilities | 3,372 | 2,959 |
Interest rate swap liabilities | 972 | 1,947 |
Long-term debt | 303,592 | 324,000 |
Commitments and contingencies (Note 14) | ||
Partners’ capital: | ||
Common unitholders (38,003,397 and 38,155,434 units issued and outstanding at December 31, 2016 and June 30, 2017, respectively) | 457,375 | 471,180 |
Series A Preferred Units (35,125,202 units issued and outstanding at both dates) | 253,923 | 253,923 |
General partner interest (1.7% and 1.6% interest at December 31, 2016 and June 30, 2017, respectively, with 1,225,409 general partner units outstanding at both dates) | (699,647) | (699,527) |
Total partners’ capital | 11,651 | 25,576 |
Total liabilities and partners’ capital | $ 346,096 | $ 375,663 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Accounts receivable, allowance for doubtful accounts | $ 37 | $ 49 |
Receivables from related parties, allowance for doubtful accounts | 0 | 0 |
Accumulated depreciation | 300,615 | 292,117 |
Assets, Noncurrent [Abstract] | ||
Accumulated Depreciation, Assets held for sale | $ 0 | $ 3,041 |
Partners’ capital: | ||
Common unitholders, units issued | 38,155,434 | 38,003,397 |
Common unitholders, units outstanding | 38,155,434 | 38,003,397 |
Series A Preferred unitholders, units issued | 35,125,202 | 35,125,202 |
Series A Preferred unitholders, units outstanding | 35,125,202 | 35,125,202 |
General partner interest, units outstanding | 1,225,409 | 1,225,409 |
General partner percentage interest | 1.60% | 1.70% |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Service revenue: | ||||
Third party revenue | $ 28,145 | $ 30,854 | $ 56,808 | $ 61,110 |
Related party revenue | 13,505 | 5,862 | 27,147 | 12,871 |
Product sales revenue: | ||||
Third party revenue | 2,227 | 6,709 | 6,262 | 10,454 |
Total revenue | 43,877 | 43,425 | 90,217 | 84,435 |
Costs and expenses: | ||||
Operating | 30,610 | 27,290 | 62,516 | 55,050 |
Cost of product sales | 1,669 | 4,089 | 4,808 | 7,276 |
General and administrative | 4,322 | 4,834 | 8,907 | 9,579 |
Asset impairment expense | 17 | 22,574 | 45 | 22,845 |
Total costs and expenses | 36,618 | 58,787 | 76,276 | 94,750 |
Gain (loss) on sale of assets | (754) | 14 | (879) | (19) |
Operating income (loss) | 6,505 | (15,348) | 13,062 | (10,334) |
Other income (expense): | ||||
Equity earnings in unconsolidated affiliate | 0 | 157 | 61 | 781 |
Gain on sale of unconsolidated affiliate | 4,172 | 0 | 4,172 | 0 |
Interest expense (net of capitalized interest of $7, $3, $41 and $5, respectively) | (4,265) | (3,697) | (7,295) | (8,567) |
Income (loss) before income taxes | 6,412 | (18,888) | 10,000 | (18,120) |
Provision for income taxes | 41 | 48 | 87 | 90 |
Net income (loss) | 6,371 | (18,936) | 9,913 | (18,210) |
Allocation of net income (loss) for calculation of earnings per unit: | ||||
General partner interest in net income (loss) | 256 | (195) | 465 | (51) |
Preferred interest in net income | 6,279 | 5,389 | 12,558 | 10,780 |
Loss available to limited partners | $ (164) | $ (24,130) | $ (3,110) | $ (28,939) |
Basic and diluted net loss per common unit | $ 0 | $ (0.71) | $ (0.08) | $ (0.85) |
Weighted average common units outstanding - basic and diluted | 38,155 | 33,206 | 38,151 | 33,191 |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS CONSOLIDATED STATEMENT OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Capitalized interest | $ 3 | $ 7 | $ 5 | $ 41 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Total | Limited Partner [Member] | General Partner [Member] | Preferred Partner [Member] |
Balance at Dec. 31, 2016 | $ 25,576 | $ 471,180 | $ (699,527) | $ 253,923 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 9,913 | (3,119) | 474 | 12,558 |
Equity-based incentive compensation | 524 | 516 | 8 | |
Distributions | (24,550) | (11,286) | (706) | (12,558) |
Capital contributions | 104 | 104 | ||
Proceeds from sale of 24,538 common units pursuant to the Employee Unit Purchase Plan | 84 | 84 | ||
Balance at Jun. 30, 2017 | $ 11,651 | $ 457,375 | $ (699,647) | $ 253,923 |
CONSOLIDATED STATEMENTS OF CHA7
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (PARENTHETICAL) | 6 Months Ended |
Jun. 30, 2017shares | |
Statement of Partners' Capital [Abstract] | |
Units Issued during period, EUPP | 24,538 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 9,913 | $ (18,210) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Provision for uncollectible receivables from third parties | (12) | (17) |
Provision for uncollectible receivables from related parties | 0 | (229) |
Depreciation and amortization | 15,905 | 14,823 |
Amortization and write-off of debt issuance costs | 1,307 | 440 |
Unrealized (gain) loss related to interest rate swaps | (975) | 2,194 |
Asset impairment charge | 45 | 22,845 |
Loss on sale of assets | 879 | 19 |
Gain on sale of unconsolidated affiliate | (4,172) | 0 |
Equity-based incentive compensation | 524 | 815 |
Equity earnings in unconsolidated affiliate | (61) | (781) |
Changes in assets and liabilities | ||
Increase in accounts receivable | (1,785) | (1,950) |
Decrease in receivables from related parties | 326 | 510 |
Decrease in prepaid insurance | 1,194 | 1,181 |
Decrease (increase) in other current assets | 148 | (123) |
Decrease in other assets | 111 | 37 |
Increase in accounts payable | 183 | 1,043 |
Increase in payables to related parties | 156 | 0 |
Increase in accrued interest payable | 316 | 8 |
Increase in accrued property taxes | 232 | 577 |
Increase (decrease) in unearned revenue | 1,352 | (823) |
Increase (decrease) in unearned revenue from related parties | 3,953 | (716) |
Decrease in accrued payroll | (2,017) | (2,703) |
Increase (decrease) in other accrued liabilities | (961) | 39 |
Net cash provided by operating activities | 26,561 | 18,979 |
Cash flows from investing activities: | ||
Acquisitions | 0 | (18,989) |
Capital expenditures | (10,331) | (11,577) |
Proceeds from sale of assets | 8,474 | 1,233 |
Proceeds from sale of unconsolidated affiliate | 25,324 | 0 |
Net cash provided by (used in) investing activities | 23,467 | (29,333) |
Cash flows from financing activities: | ||
Payment on insurance premium financing agreement | (1,271) | (2,612) |
Debt issuance costs | (4,017) | (17) |
Borrowings under credit facility | 335,592 | 65,000 |
Payments under credit facility | 356,000 | 31,000 |
Proceeds from equity issuance, net of offering costs | 84 | 154 |
Capital contributions | 104 | 0 |
Capital contribution related to profits interest | 0 | 75 |
Distributions | (24,550) | (21,250) |
Net cash provided by (used in) financing activities | (50,058) | 10,350 |
Net decrease in cash and cash equivalents | (30) | (4) |
Cash and cash equivalents at beginning of period | 3,304 | 3,038 |
Cash and cash equivalents at end of period | 3,274 | 3,034 |
Supplemental disclosure of non-cash financing and investing cash flow information: | ||
Increase (decrease) in accounts payable related to purchase of property, plant and equipment | 1,545 | (1,432) |
Increase in accrued liabilities related to insurance premium financing agreement | $ 2,281 | $ 2,469 |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 6 Months Ended |
Jun. 30, 2017 | |
ORGANIZATION AND NATURE OF BUSINESS [Abstract] | |
ORGANIZATION AND NATURE OF BUSINESS | ORGANIZATION AND NATURE OF BUSINESS Blueknight Energy Partners, L.P. (together with its subsidiaries, the “Partnership”) is a publicly traded master limited partnership with operations in twenty-six states. The Partnership provides integrated terminalling, storage, processing, gathering, transportation and marketing services for companies engaged in the production, distribution and marketing of crude oil and asphalt products. The Partnership manages its operations through four operating segments: (i) asphalt terminalling services, (ii) crude oil terminalling and storage services, (iii) crude oil pipeline services and (iv) crude oil trucking and producer field services. The Partnership’s common units and preferred units, which represent limited partnership interests in the Partnership, are listed on the NASDAQ Global Market under the symbols “BKEP” and “BKEPP,” respectively. The Partnership was formed in February 2007 as a Delaware master limited partnership initially to own, operate and develop a diversified portfolio of complementary midstream energy assets. On October 5, 2016, the Partnership completed the following transactions (the “Ergon Transactions”): (i) a subsidiary of Ergon, Inc. (together with its subsidiaries, “Ergon”) purchased 100% of the outstanding voting stock of Blueknight GP Holding, L.L.C., which owns 100% of the capital stock of the Partnership’s general partner, Blueknight Energy Partners G.P., L.L.C., pursuant to a Membership Interest Purchase Agreement dated July 19, 2016 among CB-Blueknight, LLC, an indirect wholly-owned subsidiary of Charlesbank Capital Partners, LLC (together with its affiliates and subsidiaries, “Charlesbank”), Blueknight Energy Holding, Inc., an indirect wholly-owned subsidiary of Vitol Holding B.V. (together with its affiliates and subsidiaries “Vitol”), and Ergon Asphalt Holdings, LLC, a wholly-owned subsidiary of Ergon (the “Ergon Change of Control”); (ii) Ergon contributed nine asphalt terminals plus $22.1 million in cash in return for total consideration of approximately $144.7 million , which consisted of the issuance of 18,312,968 of Series A preferred units in a private placement; and (iii) Ergon acquired an aggregate of $5.0 million of common units for cash in a private placement, pursuant to a Contribution Agreement between the Partnership and Ergon. The Partnership’s acquisition of nine asphalt terminals from Ergon on October 5, 2016 was accounted for as a transaction among entities under common control. As a result, the Partnership recorded the acquired assets at Ergon’s historical cost of $31.3 million , net of accumulated depreciation of $63.0 million . The $91.3 million of consideration in excess of Ergon’s historical net book value was recorded as a deemed distribution to the Partnership’s general partner and was reflected as Consideration paid in excess of historical cost of assets acquired from Ergon on the Partnership’s consolidated statement of changes in partners’ capital. |
BASIS OF CONSOLIDATION AND PRES
BASIS OF CONSOLIDATION AND PRESENTATION | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF CONSOLIDATION AND PRESENTATION | BASIS OF CONSOLIDATION AND PRESENTATION The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated statements of operations for the three and six months ended June 30, 2016 and 2017 , the condensed consolidated statement of changes in partners’ capital for the six months ended June 30, 2017 , the condensed consolidated statements of cash flows for the six months ended June 30, 2016 and 2017 , and the condensed consolidated balance sheet as of June 30, 2017 , are unaudited. In the opinion of management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments necessary to state fairly the financial position and results of operations for the respective interim periods. All adjustments are of a recurring nature unless otherwise disclosed herein. The 2016 year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Partnership’s annual report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission (the “SEC”) on March 9, 2017 (the “ 2016 Form 10-K”). Interim financial results are not necessarily indicative of the results to be expected for an annual period. The Partnership’s significant accounting policies are consistent with those disclosed in Note 3 of the Notes to Consolidated Financial Statements in its 2016 Form 10-K. The Partnership’s investment in Advantage Pipeline, L.L.C. (“Advantage Pipeline”), over which the Partnership had significant influence but not control, was accounted for by the equity method. The Partnership did not consolidate any part of the assets or liabilities of its equity investee. The Partnership’s share of net income or loss is reflected as one line item on the Partnership’s unaudited condensed consolidated statements of operations entitled “Equity earnings in unconsolidated affiliate” and increased or decreased, as applicable, the carrying value of the Partnership’s “Investment in unconsolidated affiliate” on the unaudited condensed consolidated balance sheets. Distributions to the Partnership reduced the carrying value of its investment and, to the extent received, were reflected in the Partnership’s unaudited condensed consolidated statements of cash flows in the line item “Distributions from unconsolidated affiliate.” Contributions increased the carrying value of the Partnership’s investment and were reflected in the Partnership’s unaudited condensed consolidated statements of cash flows in investing activities. On April 3, 2017, the Partnership sold its investment in Advantage Pipeline. See Note 4 for additional information. |
RESTRUCTURING CHARGES RESTRUCTU
RESTRUCTURING CHARGES RESTRUCTURING CHARGES | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | RESTRUCTURING CHARGES During the fourth quarter of 2015, the Partnership recognized certain restructuring charges in the crude oil trucking and producer field services segment pursuant to an approved plan to exit the trucking market in West Texas. Changes in the accrued amounts pertaining to the restructuring charges are summarized as follows (in thousands): Three Months ended Six Months ended 2016 2017 2016 2017 Beginning balance $ 1,003 $ 428 $ 1,565 $ 474 Charged to expense — — — — Cash payments 208 46 770 92 Ending balance $ 795 $ 382 $ 795 $ 382 The remaining accrued amounts relate to lease payments that will be paid over the remaining lease terms, which extend through July 2019. |
EQUITY METHOD INVESTMENT EQUITY
EQUITY METHOD INVESTMENT EQUITY METHOD INVESTMENT | 6 Months Ended |
Jun. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | EQUITY METHOD INVESTMENT The Partnership’s investment in Advantage Pipeline, over which the Partnership had significant influence but not control, was accounted for by the equity method. On April 3, 2017, Advantage Pipeline was acquired by a joint venture formed by affiliates of Plains All American Pipeline, L.P. and Noble Midstream Partners LP. The Partnership received cash proceeds at closing from the sale of its approximate 30% equity ownership interest in Advantage Pipeline of approximately $25.3 million and recorded a gain on the sale of the investment of $4.2 million . Approximately 10% of the gross sale proceeds are currently being held in escrow, subject to certain post-closing settlement terms and conditions. The Partnership expects to receive its approximately 30% pro rata portion of the net escrow proceeds by the end of 2017. The Partnership’s initial net proceeds received at closing were used to prepay revolving debt (without a commitment reduction). The operating and administrative services agreement to which the Partnership and Advantage Pipeline were parties and under which the Partnership operated the 70-mile, 16-inch Advantage crude oil pipeline, located in the southern Delaware Basin in Texas, was terminated at closing. The Partnership and the Plains/Noble joint venture have entered into a short-term transition services agreement under which the Partnership provides certain services. Summarized financial information for Advantage Pipeline is set forth in the tables below for the periods indicated in which the Partnership held the investment in Advantage Pipeline (in thousands): December 31, 2016 Balance sheet Current assets $ 2,075 Noncurrent assets 89,065 Total assets $ 91,140 Current liabilities 1,327 Long-term liabilities 20,910 Member’s equity 68,903 Total liabilities and member’s equity $ 91,140 Three Months ended Six Months ended Three Months ended June 30, 2016 March 31, 2017 Income statements Operating revenues $ 3,370 $ 8,475 $ 3,150 Operating expenses $ 2,763 $ 5,464 $ 465 Net income $ 607 $ 3,011 $ 187 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Estimated Useful Lives (Years) December 31, 2016 June 30, (dollars in thousands) Land N/A $ 25,863 $ 24,668 Land improvements 10-20 6,698 6,799 Pipelines and facilities 5-30 165,293 164,971 Storage and terminal facilities 10-35 347,656 354,609 Transportation equipment 3-10 12,391 7,230 Office property and equipment and other 3-20 35,578 33,706 Pipeline linefill and tank bottoms N/A 3,234 3,234 Construction-in-progress N/A 2,738 3,743 Property, plant and equipment, gross 599,451 598,960 Accumulated depreciation (292,117 ) (300,615 ) Property, plant and equipment, net $ 307,334 $ 298,345 Depreciation expense for three months ended June 30, 2016 and 2017 was $7.4 million and $7.5 million , respectively, and depreciation expense for the six months ended June 30, 2016 and 2017 was $14.3 million and $15.3 million , respectively. On April 18, 2017, the Partnership sold its East Texas pipeline system. The Partnership received cash proceeds at closing of approximately $4.8 million and recorded a gain of less than $0.1 million . The Partnership used the proceeds received at closing to prepay revolving debt (without a commitment reduction). |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT On May 11, 2017, the Partnership entered into an amended and restated credit agreement that consists of a $450.0 million revolving loan facility. As of July 27, 2017 , approximately $300.6 million of revolver borrowings and $1.5 million of letters of credit were outstanding under the credit agreement, leaving the Partnership with approximately $147.9 million available capacity for additional revolver borrowings and letters of credit under the credit agreement, although the Partnership’s ability to borrow such funds may be limited by the financial covenants in the credit agreement. In connection with entering the amended and restated credit agreement, the Partnership paid certain upfront fees to the lenders thereunder, and the Partnership paid certain arrangement and other fees to the arranger and administrative agent of the credit agreement. The proceeds of loans made under the credit agreement may be used for working capital and other general corporate purposes of the Partnership. All references herein to the credit agreement on or after May 11, 2017, refer to the amended and restated credit agreement. The credit agreement is guaranteed by all of the Partnership’s existing subsidiaries. Obligations under the credit agreement are secured by first priority liens on substantially all of the Partnership’s assets and those of the guarantors. The credit agreement includes procedures for additional financial institutions to become revolving lenders, or for any existing lender to increase its revolving commitment thereunder, subject to an aggregate maximum of $600.0 million for all revolving loan commitments under the credit agreement. The credit agreement will mature on May 11, 2022 , and all amounts outstanding under the credit agreement will become due and payable on such date. The credit agreement requires mandatory prepayments of amounts outstanding thereunder with the net proceeds of certain asset sales, property or casualty insurance claims, and condemnation proceedings, unless the Partnership reinvests such proceeds in accordance with the credit agreement, but these mandatory prepayments will not require any reduction of the lenders’ commitments under the credit agreement. Borrowings under the credit agreement bear interest, at the Partnership’s option, at either the reserve-adjusted eurodollar rate (as defined in the credit agreement) plus an applicable margin that ranges from 2.0% to 3.0% or the alternate base rate (the highest of the agent bank’s prime rate, the federal funds effective rate plus 0.5% , and the 30-day eurodollar rate plus 1.0% ) plus an applicable margin that ranges from 1.0% to 2.0% . The Partnership pays a per annum fee on all letters of credit issued under the credit agreement, which fee equals the applicable margin for loans accruing interest based on the eurodollar rate, and the Partnership pays a commitment fee ranging from 0.375% to 0.5% on the unused commitments under the credit agreement. The applicable margins for the Partnership’s interest rate, the letter of credit fee and the commitment fee vary quarterly based on the Partnership’s consolidated total leverage ratio (as defined in the credit agreement, being generally computed as the ratio of consolidated total debt to consolidated earnings before interest, taxes, depreciation, amortization and certain other non-cash charges). The credit agreement includes financial covenants that are tested on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter. Prior to the date on which the Partnership issues qualified senior notes in an aggregate principal amount (when combined with all other qualified senior notes previously or concurrently issued) that equals or exceeds $200.0 million , the maximum permitted consolidated total leverage ratio is 4.75 to 1.00; provided that the maximum permitted consolidated total leverage ratio will be 5.25 to 1.00 for certain quarters based on the occurrence of a specified acquisition (as defined in the credit agreement, but generally being an acquisition for which the aggregate consideration is $15.0 million or more). The acquisition of the nine asphalt terminals from Ergon in October 2016 qualified as a specified acquisition. From and after the date on which the Partnership issues qualified senior notes in an aggregate principal amount (when combined with all other qualified senior notes previously or concurrently issued) that equals or exceeds $200.0 million , the maximum permitted consolidated total leverage ratio is 5.00 to 1.00; provided that from and after the fiscal quarter ending immediately preceding the fiscal quarter in which a specified acquisition occurs to and including the last day of the second full fiscal quarter following the fiscal quarter in which such acquisition occurred, the maximum permitted consolidated total leverage ratio will be 5.50 to 1.00. The maximum permitted consolidated senior secured leverage ratio (as defined in the credit agreement, but generally computed as the ratio of consolidated total secured debt to consolidated earnings before interest, taxes, depreciation, amortization and certain other non-cash charges) is 3.50 to 1.00, but this covenant is only tested from and after the date on which the Partnership issues qualified senior notes in an aggregate principal amount (when combined with all other qualified senior notes previously or concurrently issued) that equals or exceeds $200.0 million . The minimum permitted consolidated interest coverage ratio (as defined in the credit agreement, but generally computed as the ratio of consolidated earnings before interest, taxes, depreciation, amortization and certain other non-cash charges to consolidated interest expense) is 2.50 to 1.00. In addition, the credit agreement contains various covenants that, among other restrictions, limit the Partnership’s ability to: • create, issue, incur or assume indebtedness; • create, incur or assume liens; • engage in mergers or acquisitions; • sell, transfer, assign or convey assets; • repurchase the Partnership’s equity, make distributions to unitholders and make certain other restricted payments; • make investments; • modify the terms of certain indebtedness, or prepay certain indebtedness; • engage in transactions with affiliates; • enter into certain hedging contracts; • enter into certain burdensome agreements; • change the nature of the Partnership’s business; and • make certain amendments to the Partnership’s partnership agreement. At June 30, 2017 , the Partnership’s consolidated total leverage ratio was 4.17 to 1.00 and the consolidated interest coverage ratio was 5.36 to 1.00. The Partnership was in compliance with all covenants of its credit agreement as of June 30, 2017 . The credit agreement permits the Partnership to make quarterly distributions of available cash (as defined in the Partnership’s partnership agreement) to unitholders so long as no default or event of default exists under the credit agreement on a pro forma basis after giving effect to such distribution. The Partnership is currently allowed to make distributions to its unitholders in accordance with this covenant; however, the Partnership will only make distributions to the extent it has sufficient cash from operations after establishment of cash reserves as determined by the Board of Directors (the “Board”) of the general partner in accordance with the Partnership’s cash distribution policy, including the establishment of any reserves for the proper conduct of the Partnership’s business. See Note 8 for additional information regarding distributions. In addition to other customary events of default, the credit agreement includes an event of default if (i) the general partner ceases to own 100% of the Partnership’s general partner interest or ceases to control the Partnership, or (ii) Ergon ceases to own and control 50.0% or more of the membership interests of the general partner, or (iii) during any period of 12 consecutive months, a majority of the members of the Board of the general partner ceases to be composed of individuals (A) who were members of the Board on the first day of such period, (B) whose election or nomination to the Board was approved by individuals referred to in clause (A) above constituting at the time of such election or nomination at least a majority of the Board or (C) whose election or nomination to the Board was approved by individuals referred to in clauses (A) and (B) above constituting at the time of such election or nomination at least a majority of the Board; provided that, any changes to the composition of individuals serving as members of the Board approved by Ergon will not cause an event of default. If an event of default relating to bankruptcy or other insolvency events occurs with respect to the general partner or the Partnership, all indebtedness under the credit agreement will immediately become due and payable. If any other event of default exists under the credit agreement, the lenders may accelerate the maturity of the obligations outstanding under the credit agreement and exercise other rights and remedies. In addition, if any event of default exists under the credit agreement, the lenders may commence foreclosure or other actions against the collateral. If any default occurs under the credit agreement, or if the Partnership is unable to make any of the representations and warranties in the credit agreement, the Partnership will be unable to borrow funds or to have letters of credit issued under the credit agreement. Upon the execution of the amended and restated credit agreement, the Partnership expensed $0.7 million of debt issuance costs related to the prior revolving loan facility, leaving a remaining balance of $0.9 million ascribed to those lenders with commitments under both the prior and the amended and restated credit facility. The Partnership capitalized debt issuance costs of less than $0.1 million and $4.0 million during the three months ended June 30, 2016 and 2017 , respectively. The Partnership capitalized debt issuance costs of less than $0.1 million and $4.0 million during the six months ended June 30, 2016 and 2017 , respectively. Debt issuance costs are being amortized over the term of the credit agreement. Interest expense related to debt issuance cost amortization for the three months ended June 30, 2016 and 2017 , was $0.2 million and $0.3 million , respectively. Interest expense related to debt issuance cost amortization for the six months ended June 30, 2016 and 2017 , was $0.4 million and $0.6 million , respectively. During the three months ended June 30, 2016 and 2017 , the weighted average interest rate under the Partnership’s credit agreement, excluding the $0.7 million of debt issuance costs related to the prior credit facility that was expensed during the three months ended June 30, 2017 , was 3.89% and 4.44% , respectively, resulting in interest expense of approximately $2.7 million and $3.4 million , respectively. During the six months ended June 30, 2016 and 2017 , the weighted average interest rate under the Partnership’s credit agreement, excluding the $0.7 million of debt issuance costs related to the prior credit facility that was expensed during the six months ended June 30, 2017 , was 3.75% and 4.27% , respectively, resulting in interest expense of approximately $5.1 million and $6.7 million , respectively. During each of the three and six months ended June 30, 2016 and 2017 , the Partnership capitalized interest of less than $0.1 million . The Partnership is exposed to market risk for changes in interest rates related to its credit facility. Interest rate swap agreements are used to manage a portion of the exposure related to changing interest rates by converting floating-rate debt to fixed-rate debt. As of December 31, 2016 and June 30, 2017 , the Partnership had interest rate swaps with notional amounts totaling $200.0 million to hedge the variability of its LIBOR-based interest payments, with half maturing on June 28, 2018, and the other half on January 28, 2019. During the three months ended June 30, 2016 and 2017 , the Partnership recorded swap interest expense of $0.6 million and $0.4 million , respectively. During the six months ended June 30, 2016 and 2017 , the Partnership recorded swap interest expense of $1.3 million and $0.8 million , respectively. The interest rate swaps do not receive hedge accounting treatment under ASC 815 - Derivatives and Hedging . The following provides information regarding the Partnership’s liabilities related to its interest rate swap agreements as of the periods indicated (in thousands): Fair Values of Liability Derivative Instruments December 31, 2016 June 30, 2017 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives not designated as hedging instruments: Interest rate swaps Interest rate swap liabilities $ 1,947 Interest rate swap liabilities $ 972 Changes in the fair value of the interest rate swaps are reflected in the unaudited condensed consolidated statements of operations as follows (in thousands): Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Net Income on Derivative Amount of Gain (Loss) Recognized in Net Income on Derivative Three Months ended Six Months ended 2016 2017 2016 2017 Interest rate swaps Interest expense, net of capitalized interest $ (314 ) $ 223 $ (2,194 ) $ 975 |
NET INCOME PER LIMITED PARTNER
NET INCOME PER LIMITED PARTNER UNIT | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
NET INCOME PER LIMITED PARTNER UNIT | NET INCOME PER LIMITED PARTNER UNIT For purposes of calculating earnings per unit, the excess of distributions over earnings or excess of earnings over distributions for each period are allocated to the Partnership’s general partner based on the general partner’s ownership interest at the time. The following sets forth the computation of basic and diluted net income per common unit (in thousands, except per unit data): Three Months ended Six Months ended 2016 2017 2016 2017 Net income (loss) $ (18,936 ) $ 6,371 $ (18,210 ) $ 9,913 General partner interest in net income (loss) (195 ) 256 (51 ) 465 Preferred interest in net income 5,389 6,279 10,780 12,558 Loss available to limited partners $ (24,130 ) $ (164 ) $ (28,939 ) $ (3,110 ) Basic and diluted weighted average number of units: Common units 33,206 38,155 33,191 38,151 Restricted and phantom units 906 923 761 806 Total units 34,112 39,078 33,952 38,957 Basic and diluted net loss per common unit $ (0.71 ) $ — $ (0.85 ) $ (0.08 ) |
PARTNERS' CAPITAL AND DISTRIBUT
PARTNERS' CAPITAL AND DISTRIBUTIONS | 6 Months Ended |
Jun. 30, 2017 | |
Partners' Capital Account, Distributions [Abstract] | |
PARTNERS' CAPITAL AND DISTRIBUTIONS | PARTNERS’ CAPITAL AND DISTRIBUTIONS On October 5, 2016, the Partnership issued 847,457 common units to Ergon in a private placement for $5.0 million . In addition, on October 5, 2016, the Partnership repurchased 6,667,695 Series A Preferred Units from each of Vitol and Charlesbank for an aggregate purchase price of approximately $95.3 million . Vitol and Charlesbank each retained 2,488,789 Series A Preferred Units upon completion of these transactions. Also, on October, 5, 2016, the Partnership issued 18,312,968 Series A Preferred Units to Ergon for $144.7 million , as well as 97,654 general partner units to the Partnership’s general partner for $0.7 million . On July 26, 2016, the Partnership issued and sold 3,795,000 common units for a public offering price of $5.90 per unit, resulting in proceeds of approximately $20.9 million , net of underwriters’ discount and offering expenses of $1.5 million . On July 18, 2017 , the Board approved a distribution of $0.17875 per preferred unit, or a total distribution of $6.3 million , for the quarter ending June 30, 2017 . The Partnership will pay this distribution on the preferred units on August 14, 2017 , to unitholders of record as of August 4, 2017 . In addition, on July 18, 2017 , the Board declared a cash distribution of $0.1450 per unit on its outstanding common units. The distribution will be paid on August 14, 2017 , to unitholders of record on August 4, 2017 . The distribution is for the three months ended June 30, 2017 . The total distribution will be approximately $5.9 million , with approximately $5.5 million and $0.3 million to be paid to the Partnership’s common unitholders and general partner, respectively, and $0.1 million to be paid to holders of phantom and restricted units pursuant to awards granted under the Partnership’s long-term incentive plan. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS On October 5, 2016, Ergon purchased 100% of the Partnership’s general partner from Vitol and Charlesbank, resulting in Ergon being classified as a related party and Vitol and Charlesbank no longer being classified as related parties as of October 5, 2016. The Partnership leases facilities to Ergon and provides asphalt product and residual fuel terminalling, storage and blending services to Ergon. For the three months ended June 30, 2016 and 2017 , the Partnership recognized total revenues of $3.5 million and $13.5 million , respectively, for services provided to Ergon. For the six months ended June 30, 2016 and 2017 , the Partnership recognized total revenues of $7.1 million and $26.8 million , respectively, for services provided to Ergon. For the three and six months ended June 30, 2016 , all of the revenues are classified as third party revenue, while revenues for the three and six months ended June 30, 2017 are classified as related party revenue. As of December 31, 2016 and June 30, 2017 , the Partnership had receivables from Ergon of $1.7 million and $1.5 million , respectively, net of allowance for doubtful accounts. As of December 31, 2016 and June 30, 2017 , the Partnership had unearned revenues from Ergon of $1.0 million and $5.0 million , respectively. The Partnership provides crude oil gathering, transportation, terminalling and storage services to Vitol. For the three months ended June 30, 2016 , the Partnership recognized related party revenues of $5.5 million for services provided to Vitol. For the six months ended June 30, 2016 , the Partnership recognized related party revenues of $12.2 million for services provided to Vitol. All revenue from services provided to Vitol for the three and six months ended June 30, 2017 is classified as third party revenue. The Partnership provided operating and administrative services to Advantage Pipeline. On April 3, 2017, the Partnership sold its investment in Advantage Pipeline and the operating and administrative services agreement was terminated at closing. See Note 4 for additional information. For the three months ended June 30, 2016 , the Partnership earned revenues of $0.3 million for services provided to Advantage Pipeline. For the six months ended June 30, 2016 and 2017 , the Partnership earned revenues of $0.7 million and $0.3 million , respectively, for services provided to Advantage Pipeline. As of December 31, 2016 , the Partnership had receivables from Advantage Pipeline of $0.1 million . |
LONG-TERM INCENTIVE PLAN
LONG-TERM INCENTIVE PLAN | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
LONG-TERM INCENTIVE PLAN | LONG-TERM INCENTIVE PLAN In July 2007, the general partner adopted the Long-Term Incentive Plan (the “LTIP”). The compensation committee of the Board administers the LTIP. Effective April 29, 2014, the Partnership’s unitholders approved an amendment to the LTIP to increase the number of common units reserved for issuance under the incentive plan to 4,100,000 common units. The common units are deliverable upon vesting. Although other types of awards are contemplated under the LTIP, currently outstanding awards include “phantom” units, which convey the right to receive common units upon vesting, and “restricted” units, which are grants of common units restricted until the time of vesting. Certain of the phantom unit awards also include distribution equivalent rights (“DERs”). Subject to applicable earning criteria, a DER entitles the grantee to a cash payment equal to the cash distribution paid on an outstanding common unit prior to the vesting date of the underlying award. Recipients of restricted units are entitled to receive cash distributions paid on common units during the vesting period which distributions are reflected initially as a reduction of partners’ capital. Distributions paid on units which ultimately do not vest are reclassified as compensation expense. Awards granted to date are equity awards and, accordingly, the fair value of the awards as of the grant date is expensed over the vesting period. In connection with each anniversary of joining the Board, restricted common units are granted to the independent directors. The units vest in one-third increments over three years. The following table includes information on outstanding grants made to the directors under the LTIP: Grant Date Number of Units Weighted Average Grant Date Fair Value (1) Grant Date Total Fair Value (in thousands) December 2016 10,950 $ 6.85 $ 75 _________________ (1) Fair value is the closing market price on the grant date of the awards. The Partnership also grants phantom units to employees. These grants are equity awards under ASC 718 – Stock Compensation , and, accordingly, the fair value of the awards as of the grant date is expensed over the vesting period. The following table includes information on the outstanding grants: Grant Date Number of Units Weighted Average Grant Date Fair Value (1) Grant Date Total Fair Value (in thousands) March 2015 266,076 $ 7.74 $ 2,059 March 2016 416,131 $ 4.77 $ 1,985 October 2016 9,960 $ 5.85 $ 58 March 2017 323,339 $ 7.15 $ 2,312 _________________ (1) Fair value is the closing market price on the grant date of the awards. The unrecognized estimated compensation cost of outstanding phantom units at June 30, 2017 was $2.9 million , which will be recognized over the remaining vesting period. In September 2012 , Mr. Mark Hurley was granted 500,000 phantom units under the LTIP upon his employment as the Chief Executive Officer of the general partner. These grants are equity awards under ASC 718 – Stock Compensation , and, accordingly, the fair value of the awards as of the grant date is expensed over the vesting period. These units vest ratably over five years pursuant to the Employee Phantom Unit Agreement between Mr. Hurley and the general partner and do not include DERs. The weighted average grant date fair value for the units of $5.62 was determined based on the closing market price of the Partnership’s common units on the grant date of the award, less the present value of the estimated distributions to be paid to holders of an outstanding common unit prior to the vesting of the underlying award. The value of this award grant was approximately $2.8 million on the grant date, and the unrecognized estimated compensation cost at June 30, 2017 was $0.1 million and will be expensed over the remaining vesting period. The Partnership’s equity-based incentive compensation expense for each of the three months ended June 30, 2016 and 2017 was $0.6 million . The Partnership’s equity-based incentive compensation expense for the six months ended June 30, 2016 and 2017 was $1.2 million and $1.1 million , respectively. Activity pertaining to phantom common units and restricted common unit awards granted under the Plan is as follows: Number of Units Weighted Average Grant Date Fair Value Nonvested at December 31, 2016 915,180 $ 6.61 Granted 323,339 7.15 Vested 213,923 9.06 Forfeited 1,316 7.74 Nonvested at June 30, 2017 1,023,280 $ 6.26 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Under the Partnership’s 401(k) Plan, which was instituted in 2009 , employees who meet specified service requirements may contribute a percentage of their total compensation, up to a specified maximum, to the 401(k) Plan. The Partnership may match each employee’s contribution, up to a specified maximum, in full or on a partial basis. The Partnership recognized expense of $0.3 million for each of the three months ended June 30, 2016 and 2017 , for discretionary contributions under the 401(k) Plan. The Partnership recognized expense of $0.6 million for each of the six months ended June 30, 2016 and 2017 , for discretionary contributions under the 401(k) Plan. The Partnership may also make annual lump-sum contributions to the 401(k) Plan irrespective of the employee’s contribution match. The Partnership may make a discretionary annual contribution in the form of profit sharing calculated as a percentage of an employee’s eligible compensation. This contribution is retirement income under the qualified 401(k) Plan. Annual profit sharing contributions to the 401(k) Plan are submitted to and approved by the Board. The Partnership recognized expense of $0.2 million for each of the three months ended June 30, 2016 and 2017 , for discretionary profit sharing contributions under the 401(k) Plan. The Partnership recognized expense of $0.4 million for each of the six months ended June 30, 2016 and 2017 , for discretionary profit sharing contributions under the 401(k) Plan. Under the Partnership’s Employee Unit Purchase Plan (the “Unit Purchase Plan”), which was instituted in January 2015, employees have the opportunity to acquire or increase their ownership of common units representing limited partner interests in the Partnership. Eligible employees who enroll in the Unit Purchase Plan may elect to have a designated whole percentage, up to a specified maximum, of their eligible compensation for each pay period withheld for the purchase of common units at a discount to the then current market value. A maximum of 1,000,000 common units may be delivered under the Unit Purchase Plan, subject to adjustment for a recapitalization, split, reorganization, or similar event pursuant to the terms of the Unit Purchase Plan. The Partnership recognized compensation expense of less than $0.1 million during each of the three and six months ended June 30, 2016 and 2017 , in connection with the Unit Purchase Plan. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Partnership uses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost) to value assets and liabilities required to be measured at fair value, as appropriate. The Partnership uses an exit price when determining the fair value. The exit price represents amounts that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Partnership utilizes a three-tier fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1 Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 Inputs other than quoted prices that are observable for these assets or liabilities, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 Unobservable inputs in which there is little market data, which requires the reporting entity to develop its own assumptions. This hierarchy requires the use of observable market data, when available, to minimize the use of unobservable inputs when determining fair value. In periods in which they occur, the Partnership recognizes transfers into and out of Level 3 as of the end of the reporting period. There were no transfers during the six months ended June 30, 2017 . Transfers out of Level 3 represent existing assets and liabilities that were classified previously as Level 3 for which the observable inputs became a more significant portion of the fair value estimates. Determining the appropriate classification of the Partnership’s fair value measurements within the fair value hierarchy requires management’s judgment regarding the degree to which market data is observable or corroborated by observable market data. The Partnership’s recurring financial assets and liabilities subject to fair value measurements and the necessary disclosures are as follows (in thousands): Fair Value Measurements as of December 31, 2016 Description Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Interest rate swap liabilities $ 1,947 $ — $ 1,947 $ — Total $ 1,947 $ — $ 1,947 $ — Fair Value Measurements as of June 30, 2017 Description Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Interest rate swap liabilities $ 972 $ — $ 972 $ — Total $ 972 $ — $ 972 $ — Fair Value of Other Financial Instruments The following disclosure of the estimated fair value of financial instruments is made in accordance with accounting guidance for financial instruments. The Partnership has determined the estimated fair values by using available market information and valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. The use of different market assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. At June 30, 2017 , the carrying values on the unaudited condensed consolidated balance sheets for cash and cash equivalents (classified as Level 1), accounts receivable, and accounts payable approximate their fair value because of their short-term nature. Based on the borrowing rates currently available to the Partnership for credit agreement debt with similar terms and maturities and consideration of the Partnership’s non-performance risk, long-term debt associated with the Partnership’s credit agreement at June 30, 2017 approximates its fair value. The fair value of the Partnership’s long-term debt was calculated using observable inputs (LIBOR for the risk-free component) and unobservable company-specific credit spread information. As such, the Partnership considers this debt to be Level 3. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS | OPERATING SEGMENTS The Partnership’s operations consist of four operating segments: (i) asphalt terminalling services, (ii) crude oil terminalling and storage services, (iii) crude oil pipeline services, and (iv) crude oil trucking and producer field services. ASPHALT TERMINALLING SERVICES —The Partnership provides asphalt product and residual fuel terminalling, storage and blending services at its 54 terminalling and storage facilities located in 26 states. CRUDE OIL TERMINALLING AND STORAGE SERVICES —The Partnership provides crude oil terminalling and storage services at its terminalling and storage facility located in Oklahoma. CRUDE OIL PIPELINE SERVICES —The Partnership owns and operates pipeline systems that gather crude oil purchased by its customers and transports it to refiners, to common carrier pipelines for ultimate delivery to refiners or to terminalling and storage facilities owned by the Partnership and others. The Partnership refers to its pipeline system located in Oklahoma and the Texas Panhandle as the Mid-Continent system. Revenue for the sale of crude oil is recognized when title to the crude oil transfers to the customer and is based on contractual prices for the sale of crude oil. The Partnership previously owned and operated the East Texas pipeline system, which is located in Texas. On April 18, 2017, the Partnership sold the East Texas system. See Note 5 for additional information. CRUDE OIL TRUCKING AND PRODUCER FIELD SERVICES — The Partnership uses its owned and leased tanker trucks to gather crude oil for its customers at remote wellhead locations generally not covered by pipeline and gathering systems and to transport the crude oil to aggregation points and storage facilities located along pipeline gathering and transportation systems. Crude oil producer field services consist of a number of producer field services, ranging from gathering condensates from natural gas companies to hauling produced water to disposal wells. The Partnership’s management evaluates performance based upon segment operating margin, which includes revenues from related parties and external customers less operating expenses excluding depreciation and amortization. This measure forms the basis of the Partnership’s internal financial reporting and is used by its management in deciding how to allocate capital resources among segments. The Partnership believes that investors benefit from having access to the same financial measures being utilized by management. The non-GAAP measure of total operating margin, excluding depreciation and amortization, is presented in the following table. Total operating margin, excluding depreciation and amortization, is an important measure of the economic performance of the Partnership’s core operations. The Partnership computes the components of total operating margin by using amounts that are determined in accordance with GAAP. A reconciliation of total operating margin, excluding depreciation and amortization, to income before income taxes, which is its nearest comparable GAAP financial measure, is included in the following table. Income before income taxes, alternatively, includes expense items, such as depreciation and amortization, general and administrative expenses and interest expense, which management does not consider when evaluating the core profitability of the Partnership’s operations. The following table reflects certain financial data for each segment for the periods indicated (in thousands): Three Months ended Six Months ended 2016 2017 2016 2017 Asphalt Terminalling Services Service revenue Third party revenue $ 18,132 $ 13,259 $ 35,438 $ 26,482 Related party revenue 256 13,505 558 26,837 Total revenue for reportable segments 18,388 26,764 35,996 53,319 Operating expense (excluding depreciation and amortization) 6,839 11,935 13,271 24,255 Segment operating margin 11,549 14,829 22,725 29,064 Total assets (end of period) $ 117,096 $ 147,832 $ 117,096 $ 147,832 Crude Oil Terminalling and Storage Services Service revenue Third party revenue $ 3,626 $ 5,726 $ 7,187 $ 11,851 Related party revenue 2,645 — 5,404 — Total revenue for reportable segments 6,271 5,726 12,591 11,851 Operating expense (excluding depreciation and amortization) 1,134 992 2,295 2,003 Segment operating margin 5,137 4,734 10,296 9,848 Total assets (end of period) $ 74,072 $ 69,834 $ 74,072 $ 69,834 Crude Oil Pipeline Services Service revenue Third party revenue $ 2,702 $ 2,720 $ 4,954 $ 5,324 Related party revenue 985 — 3,305 310 Product sales revenue Third party revenue 6,709 2,227 10,454 5,877 Total revenue for reportable segments 10,396 4,947 18,713 11,511 Operating expense (excluding depreciation and amortization) 3,711 3,142 7,939 6,383 Operating expense (intersegment) 235 74 495 244 Cost of product sales 4,089 1,669 7,276 4,808 Cost of product sales (intersegment) 426 — 426 — Segment operating margin 1,935 62 2,577 76 Total assets (end of period) $ 153,706 $ 117,222 $ 153,706 $ 117,222 Crude Oil Trucking and Producer Field Services Service revenue Third party revenue $ 6,394 $ 6,440 $ 13,531 $ 13,151 Related party revenue 1,976 — 3,604 — Intersegment revenue 235 74 495 244 Product sales revenue Third party revenue — — — 385 Intersegment revenue 426 — 426 — Total revenue for reportable segments 9,031 6,514 18,056 13,780 Operating expense (excluding depreciation and amortization) 7,918 6,702 16,722 13,970 Segment operating margin 1,113 (188 ) 1,334 (190 ) Total assets (end of period) $ 13,503 $ 11,208 $ 13,503 $ 11,208 Three Months ended Six Months ended 2016 2017 2016 2017 Total operating margin (excluding depreciation and amortization) (1) $ 19,734 $ 19,437 $ 36,932 $ 38,798 Total segment revenues $ 44,086 $ 43,951 $ 85,356 $ 90,461 Elimination of intersegment revenues (661 ) (74 ) (921 ) (244 ) Consolidated revenues $ 43,425 $ 43,877 $ 84,435 $ 90,217 ____________________ (1) The following table reconciles segment operating margin (excluding depreciation and amortization) to income (loss) before income taxes (in thousands): Three Months ended Six Months ended 2016 2017 2016 2017 Operating margin (excluding depreciation and amortization) $ 19,734 $ 19,437 $ 36,932 $ 38,798 Depreciation and amortization (7,688 ) (7,839 ) (14,823 ) (15,905 ) General and administrative expenses (4,834 ) (4,322 ) (9,579 ) (8,907 ) Asset impairment expense (22,574 ) (17 ) (22,845 ) (45 ) Gain (loss) on sale of assets 14 (754 ) (19 ) (879 ) Equity earnings in unconsolidated affiliate 157 — 781 61 Gain on sale of unconsolidated affiliate — 4,172 — 4,172 Interest expense (3,697 ) (4,265 ) (8,567 ) (7,295 ) Income (loss) before income taxes $ (18,888 ) $ 6,412 $ (18,120 ) $ 10,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENT AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Partnership is from time to time subject to various legal actions and claims incidental to its business. Management believes that these legal proceedings will not have a material adverse effect on the financial position, results of operations or cash flows of the Partnership. Once management determines that information pertaining to a legal proceeding indicates that it is probable that a liability has been incurred and the amount of such liability can be reasonably estimated, an accrual is established equal to its estimate of the likely exposure. The Partnership has contractual obligations to perform dismantlement and removal activities in the event that some of its asphalt product and residual fuel oil terminalling and storage assets are abandoned. These obligations include varying levels of activity including completely removing the assets and returning the land to its original state. The Partnership has determined that the settlement dates related to the retirement obligations are indeterminate. The assets with indeterminate settlement dates have been in existence for many years and with regular maintenance will continue to be in service for many years to come. Also, it is not possible to predict when demands for the Partnership’s terminalling and storage services will cease, and the Partnership does not believe that such demand will cease for the foreseeable future. Accordingly, the Partnership believes the date when these assets will be abandoned is indeterminate. With no reasonably determinable abandonment date, the Partnership cannot reasonably estimate the fair value of the associated asset retirement obligations. Management believes that if the Partnership’s asset retirement obligations were settled in the foreseeable future the present value of potential cash flows that would be required to settle the obligations based on current costs are not material. The Partnership will record asset retirement obligations for these assets in the period in which sufficient information becomes available for it to reasonably determine the settlement dates. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The anticipated after-tax economic benefit of an investment in the Partnership’s units depends largely on the Partnership being treated as a partnership for federal income tax purposes. If less than 90% of the gross income of a publicly traded partnership, such as the Partnership, for any taxable year is “qualifying income” from sources such as the transportation, storage, marketing (other than to end users), or processing of crude oil, natural gas or products thereof, rents from real property leased to unrelated parties, interest, dividends or certain other specified sources, that partnership will be taxable as a corporation under Section 7704 of the Internal Revenue Code for federal income tax purposes for that taxable year and all subsequent years. If the Partnership were treated as a corporation for federal income tax purposes, then it would pay federal income tax on its income at the corporate tax rate, which is currently a maximum of 35% , and would likely pay state income tax at varying rates. Distributions would generally be taxed again to unitholders as corporate dividends and none of the Partnership’s income, gains, losses, deductions or credits would flow through to its unitholders. Because a tax would be imposed upon the Partnership as an entity, cash available for distribution to its unitholders would be substantially reduced. Treatment of the Partnership as a corporation would result in a material reduction in the anticipated cash flow and after-tax return to unitholders and thus would likely result in a substantial reduction in the value of the Partnership’s units. The Partnership has entered into storage contracts with third party customers and leases with third party lessees with respect to all of its asphalt facilities. In the second quarter of 2009 , the Partnership submitted a request for a ruling from the IRS that rental income from the leases constitutes “qualifying income.” In October 2009 , the Partnership received a favorable ruling from the IRS to the effect that rental income received under the leases with third party lessees constitutes qualifying income. As part of this ruling, however, the Partnership agreed to transfer, and has transferred, certain of its asphalt processing assets and related fee income to a subsidiary taxed as a corporation. This transfer occurred in the first quarter of 2010. Such subsidiary’s income is subject to tax at the applicable federal, state and local income tax rates. Distributions from this subsidiary generally are taxed again to the Partnership’s unitholders as corporate distributions and none of the income, gains, losses, deductions or credits of this subsidiary will flow through to the Partnership’s unitholders. In relation to the Partnership’s taxable subsidiary, the tax effects of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts at June 30, 2017 , are presented below (dollars in thousands): Deferred tax assets Difference in bases of property, plant and equipment $ 793 Deferred tax asset 793 Less: valuation allowance 793 Net deferred tax asset $ — The Partnership has considered the taxable income projections in future years, whether the carryforward period is so brief that it would limit realization of tax benefits, whether future revenue and operating cost projections will produce enough taxable income to realize the deferred tax asset based on existing service rates and cost structures, and the Partnership’s earnings history exclusive of the loss that created the future deductible amount for the Partnership’s subsidiary that is taxed as a corporation for purposes of determining the likelihood of realizing the benefits of the deferred tax assets. As a result of the Partnership’s consideration of these factors, the Partnership has provided a full valuation allowance against its deferred tax asset as of June 30, 2017 . |
RECENTLY ISSUED ACCOUNTING STAN
RECENTLY ISSUED ACCOUNTING STANDARDS | 6 Months Ended |
Jun. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENTLY ISSUED ACCOUNTING STANDARDS | RECENTLY ISSUED ACCOUNTING STANDARDS Except as discussed below and in the 2016 Annual Report on Form 10-K, there have been no new accounting pronouncements that have become effective or have been issued during the six months ended June 30, 2017 that are of significance or potential significance to the Partnership. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The amendments in this update create Topic 606, Revenue from Contracts with Customers, and supersede the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendments supersede the cost guidance in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts, and create new Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers. In summary, the core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Throughout 2015 and 2016, the FASB has issued a series of subsequent updates to the revenue recognition guidance in Topic 606, including ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The amendments in ASU 2014-09, ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU 2016-20 are effective for public entities for annual reporting periods beginning after December 15, 2017, and for interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016. The Partnership is evaluating the impact of this standard, which will be adopted as of January 1, 2018. • The Partnership is currently assessing implementation challenges, technical interpretations, industry-specific treatment of certain revenue contract types, and project status. • The Partnership is currently reviewing contracts for each revenue stream identified within each of our business segments. Through this process, the Partnership is evaluating potential changes in revenue recognition upon adoption of the revised guidance. • The Partnership is evaluating the potential information technology and internal control changes that will be required for adoption based on the findings of the contract review process. • The Partnership plans to provide internal training and awareness related to the revised guidance to the key stakeholders throughout the organization. While the Partnership has tentatively concluded that the implementation of ASU 2014-09 will not have a material impact on the revenue recognition policies for a substantial number of contracts, management has identified several areas of potential impact through the contract review process currently underway, including accounting for non-cash consideration and the timing of revenue recognition with respect to deficiency payments in the crude oil pipeline services segment The Partnership is in the process of quantifying the impact of adoption, but cannot reasonably estimate the full impact of the standard until the industry reaches consensus on these issues. The Partnership is currently evaluating potential changes to disclosures based on the additional requirements prescribed by the standard. These new disclosures include information regarding the significant judgments used in evaluating when and how revenue is (or will be) recognized and data related to contract assets and liabilities. Additionally, the Partnership is evaluating the business processes, systems, and controls to ensure the accuracy and timeliness of the recognition and disclosure requirements under the new revenue guidance. The Partnership will continue to conduct the contract review process throughout 2017 and, as a result, additional areas of impact may be identified. The Partnership expects to adopt the new standard on January 1, 2018, using the modified retrospective approach. This approach allows for applying the new standard to (i) all new contracts entered into after January 1, 2018, and (ii) all existing contracts for which all (or substantially all) of the revenue has not been recognized under legacy revenue guidance as of January 1, 2018, through a cumulative adjustment to equity. Consolidated revenues presented in the comparative financial statements for periods prior to January 1, 2018, would not be revised. In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740).” This update simplifies the presentation of deferred income taxes on the balance sheet. This update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those fiscal years. The Partnership adopted this update in the three month period ending March 31, 2017, and there was no impact on the Partnership’s financial position, results of operations or cash flow. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” This update introduces a new lease model that requires the recognition of lease assets and lease liabilities on the balance sheet and the disclosure of key information about leasing arrangements. This update is effective for financial statements issued for annual periods beginning after December 15, 2018, and interim periods within those fiscal years. The Partnership is evaluating the impact of this guidance, which will be adopted beginning with the Partnership’s quarterly report for the period ending March 31, 2019. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718).” This update is intended to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those fiscal years. The Partnership adopted this update in the three month period ending March 31, 2017, and there was no impact on the Partnership’s financial position, results of operations or cash flow. In February 2017, the FASB issued ASU 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20).” This update clarifies the scope of Subtopic 610-20 and adds guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May 2014 as a part of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments in ASU 2017-05 are effective for public entities for annual reporting periods beginning after December 15, 2017, and for interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016. The Partnership is evaluating the impact of this standard on us, which will be adopted beginning with the Partnership’s quarterly report for the period ending March 31, 2018. In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718) Scope of Modification Accounting.” This update provides clarity and reduces both diversity in practice and cost and complexity when applying the guidance of Topic 718, Compensation - Stock Compensation, to a change in the terms or conditions of a share-based payment award. This update is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. The Partnership is evaluating the impact of this guidance, which will be adopted beginning with the Partnership’s quarterly report for the period ending March 31, 2018. |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Crude Oil Trucking and Producer Field Services [Member] | West Texas Trucking Market Exit Plan [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring and Related Costs [Table Text Block] | Changes in the accrued amounts pertaining to the restructuring charges are summarized as follows (in thousands): Three Months ended Six Months ended 2016 2017 2016 2017 Beginning balance $ 1,003 $ 428 $ 1,565 $ 474 Charged to expense — — — — Cash payments 208 46 770 92 Ending balance $ 795 $ 382 $ 795 $ 382 |
EQUITY METHOD INVESTMENT (Table
EQUITY METHOD INVESTMENT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments [Table Text Block] | Summarized financial information for Advantage Pipeline is set forth in the tables below for the periods indicated in which the Partnership held the investment in Advantage Pipeline (in thousands): December 31, 2016 Balance sheet Current assets $ 2,075 Noncurrent assets 89,065 Total assets $ 91,140 Current liabilities 1,327 Long-term liabilities 20,910 Member’s equity 68,903 Total liabilities and member’s equity $ 91,140 Three Months ended Six Months ended Three Months ended June 30, 2016 March 31, 2017 Income statements Operating revenues $ 3,370 $ 8,475 $ 3,150 Operating expenses $ 2,763 $ 5,464 $ 465 Net income $ 607 $ 3,011 $ 187 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Estimated Useful Lives (Years) December 31, 2016 June 30, (dollars in thousands) Land N/A $ 25,863 $ 24,668 Land improvements 10-20 6,698 6,799 Pipelines and facilities 5-30 165,293 164,971 Storage and terminal facilities 10-35 347,656 354,609 Transportation equipment 3-10 12,391 7,230 Office property and equipment and other 3-20 35,578 33,706 Pipeline linefill and tank bottoms N/A 3,234 3,234 Construction-in-progress N/A 2,738 3,743 Property, plant and equipment, gross 599,451 598,960 Accumulated depreciation (292,117 ) (300,615 ) Property, plant and equipment, net $ 307,334 $ 298,345 |
DEBT Fair Values of Derivative
DEBT Fair Values of Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block] | The following provides information regarding the Partnership’s liabilities related to its interest rate swap agreements as of the periods indicated (in thousands): Fair Values of Liability Derivative Instruments December 31, 2016 June 30, 2017 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives not designated as hedging instruments: Interest rate swaps Interest rate swap liabilities $ 1,947 Interest rate swap liabilities $ 972 Changes in the fair value of the interest rate swaps are reflected in the unaudited condensed consolidated statements of operations as follows (in thousands): Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Net Income on Derivative Amount of Gain (Loss) Recognized in Net Income on Derivative Three Months ended Six Months ended 2016 2017 2016 2017 Interest rate swaps Interest expense, net of capitalized interest $ (314 ) $ 223 $ (2,194 ) $ 975 |
NET INCOME PER LIMITED PARTNE29
NET INCOME PER LIMITED PARTNER UNIT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income (Loss) Per Common Unit | The following sets forth the computation of basic and diluted net income per common unit (in thousands, except per unit data): Three Months ended Six Months ended 2016 2017 2016 2017 Net income (loss) $ (18,936 ) $ 6,371 $ (18,210 ) $ 9,913 General partner interest in net income (loss) (195 ) 256 (51 ) 465 Preferred interest in net income 5,389 6,279 10,780 12,558 Loss available to limited partners $ (24,130 ) $ (164 ) $ (28,939 ) $ (3,110 ) Basic and diluted weighted average number of units: Common units 33,206 38,155 33,191 38,151 Restricted and phantom units 906 923 761 806 Total units 34,112 39,078 33,952 38,957 Basic and diluted net loss per common unit $ (0.71 ) $ — $ (0.85 ) $ (0.08 ) |
LONG-TERM INCENTIVE PLAN (Table
LONG-TERM INCENTIVE PLAN (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation Arrangements by Share-based Payment Award, Restricted Stock Units, Vested and Expected to Vest [Table Text Block] | In connection with each anniversary of joining the Board, restricted common units are granted to the independent directors. The units vest in one-third increments over three years. The following table includes information on outstanding grants made to the directors under the LTIP: Grant Date Number of Units Weighted Average Grant Date Fair Value (1) Grant Date Total Fair Value (in thousands) December 2016 10,950 $ 6.85 $ 75 _________________ (1) Fair value is the closing market price on the grant date of the awards. |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block] | The Partnership also grants phantom units to employees. These grants are equity awards under ASC 718 – Stock Compensation , and, accordingly, the fair value of the awards as of the grant date is expensed over the vesting period. The following table includes information on the outstanding grants: Grant Date Number of Units Weighted Average Grant Date Fair Value (1) Grant Date Total Fair Value (in thousands) March 2015 266,076 $ 7.74 $ 2,059 March 2016 416,131 $ 4.77 $ 1,985 October 2016 9,960 $ 5.85 $ 58 March 2017 323,339 $ 7.15 $ 2,312 _________________ (1) Fair value is the closing market price on the grant date of the awards. |
Schedule Of Phantom Common Units And Restricted Common Units Activity | Activity pertaining to phantom common units and restricted common unit awards granted under the Plan is as follows: Number of Units Weighted Average Grant Date Fair Value Nonvested at December 31, 2016 915,180 $ 6.61 Granted 323,339 7.15 Vested 213,923 9.06 Forfeited 1,316 7.74 Nonvested at June 30, 2017 1,023,280 $ 6.26 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | The Partnership’s recurring financial assets and liabilities subject to fair value measurements and the necessary disclosures are as follows (in thousands): Fair Value Measurements as of December 31, 2016 Description Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Interest rate swap liabilities $ 1,947 $ — $ 1,947 $ — Total $ 1,947 $ — $ 1,947 $ — Fair Value Measurements as of June 30, 2017 Description Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Interest rate swap liabilities $ 972 $ — $ 972 $ — Total $ 972 $ — $ 972 $ — |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table reflects certain financial data for each segment for the periods indicated (in thousands): Three Months ended Six Months ended 2016 2017 2016 2017 Asphalt Terminalling Services Service revenue Third party revenue $ 18,132 $ 13,259 $ 35,438 $ 26,482 Related party revenue 256 13,505 558 26,837 Total revenue for reportable segments 18,388 26,764 35,996 53,319 Operating expense (excluding depreciation and amortization) 6,839 11,935 13,271 24,255 Segment operating margin 11,549 14,829 22,725 29,064 Total assets (end of period) $ 117,096 $ 147,832 $ 117,096 $ 147,832 Crude Oil Terminalling and Storage Services Service revenue Third party revenue $ 3,626 $ 5,726 $ 7,187 $ 11,851 Related party revenue 2,645 — 5,404 — Total revenue for reportable segments 6,271 5,726 12,591 11,851 Operating expense (excluding depreciation and amortization) 1,134 992 2,295 2,003 Segment operating margin 5,137 4,734 10,296 9,848 Total assets (end of period) $ 74,072 $ 69,834 $ 74,072 $ 69,834 Crude Oil Pipeline Services Service revenue Third party revenue $ 2,702 $ 2,720 $ 4,954 $ 5,324 Related party revenue 985 — 3,305 310 Product sales revenue Third party revenue 6,709 2,227 10,454 5,877 Total revenue for reportable segments 10,396 4,947 18,713 11,511 Operating expense (excluding depreciation and amortization) 3,711 3,142 7,939 6,383 Operating expense (intersegment) 235 74 495 244 Cost of product sales 4,089 1,669 7,276 4,808 Cost of product sales (intersegment) 426 — 426 — Segment operating margin 1,935 62 2,577 76 Total assets (end of period) $ 153,706 $ 117,222 $ 153,706 $ 117,222 Crude Oil Trucking and Producer Field Services Service revenue Third party revenue $ 6,394 $ 6,440 $ 13,531 $ 13,151 Related party revenue 1,976 — 3,604 — Intersegment revenue 235 74 495 244 Product sales revenue Third party revenue — — — 385 Intersegment revenue 426 — 426 — Total revenue for reportable segments 9,031 6,514 18,056 13,780 Operating expense (excluding depreciation and amortization) 7,918 6,702 16,722 13,970 Segment operating margin 1,113 (188 ) 1,334 (190 ) Total assets (end of period) $ 13,503 $ 11,208 $ 13,503 $ 11,208 Three Months ended Six Months ended 2016 2017 2016 2017 Total operating margin (excluding depreciation and amortization) (1) $ 19,734 $ 19,437 $ 36,932 $ 38,798 Total segment revenues $ 44,086 $ 43,951 $ 85,356 $ 90,461 Elimination of intersegment revenues (661 ) (74 ) (921 ) (244 ) Consolidated revenues $ 43,425 $ 43,877 $ 84,435 $ 90,217 ____________________ (1) The following table reconciles segment operating margin (excluding depreciation and amortization) to income (loss) before income taxes (in thousands): Three Months ended Six Months ended 2016 2017 2016 2017 Operating margin (excluding depreciation and amortization) $ 19,734 $ 19,437 $ 36,932 $ 38,798 Depreciation and amortization (7,688 ) (7,839 ) (14,823 ) (15,905 ) General and administrative expenses (4,834 ) (4,322 ) (9,579 ) (8,907 ) Asset impairment expense (22,574 ) (17 ) (22,845 ) (45 ) Gain (loss) on sale of assets 14 (754 ) (19 ) (879 ) Equity earnings in unconsolidated affiliate 157 — 781 61 Gain on sale of unconsolidated affiliate — 4,172 — 4,172 Interest expense (3,697 ) (4,265 ) (8,567 ) (7,295 ) Income (loss) before income taxes $ (18,888 ) $ 6,412 $ (18,120 ) $ 10,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets | In relation to the Partnership’s taxable subsidiary, the tax effects of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts at June 30, 2017 , are presented below (dollars in thousands): Deferred tax assets Difference in bases of property, plant and equipment $ 793 Deferred tax asset 793 Less: valuation allowance 793 Net deferred tax asset $ — |
ORGANIZATION AND NATURE OF BU34
ORGANIZATION AND NATURE OF BUSINESS (Narrative) (Details) $ in Millions | Oct. 05, 2016USD ($)Terminalling_And_Storage_Facilitiesshares | Jun. 30, 2017Operating-segmentsStates | Dec. 31, 2016USD ($)shares |
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Number of states in which entity operates (in states) | States | 26 | ||
Number of operating segments (in operating segments) | Operating-segments | 4 | ||
Blueknight GP Holding, LLC [Member] | |||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||
General Partner [Member] | |||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||
Preferred Partner [Member] | |||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Proceeds from Issuance of Preferred Limited Partners Units | $ 144.7 | $ 144.7 | |
Partners' Capital Account, Units, Sale of Units | shares | 18,312,968 | 18,312,968 | |
Limited Partner [Member] | |||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Partners' Capital Account, Units, Sale of Units | shares | 3,795,000 | ||
Proceeds from Issuance of Private Placement | $ 5 | $ 5 | |
Ergon [Member] | |||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Combination of Entities under Common Control, Number of Asphalt Facilities Acquired | Terminalling_And_Storage_Facilities | 9 | ||
Combination of Entities under Common Control, Cash Received | $ 22.1 | ||
Combination of Entities under Common Control, Historical Cost of Assets Acquired | 31.3 | ||
Combination of Entities under Common Control, Accumulated Depreciation on Assets Acquired | 63 | ||
Combination of Entities under Common Control, Consideration Paid in Excess of Historical Cost | $ 91.3 |
RESTRUCTURING CHARGES (Details)
RESTRUCTURING CHARGES (Details) - West Texas Trucking Market Exit Plan [Member] - Crude Oil Trucking and Producer Field Services [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring Reserve | $ 382 | $ 795 | $ 382 | $ 795 | $ 428 | $ 474 | $ 1,003 | $ 1,565 |
Charged to expense | 0 | 0 | 0 | 0 | ||||
Cash payments | $ 46 | $ 208 | $ 92 | $ 770 |
EQUITY METHOD INVESTMENT (Detai
EQUITY METHOD INVESTMENT (Details) - USD ($) $ in Thousands | Apr. 03, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Schedule of Equity Method Investments [Line Items] | |||||||
Proceeds from sale of unconsolidated affiliate | $ 25,324 | $ 0 | |||||
Gain on sale of unconsolidated affiliate | $ 4,172 | $ 0 | $ 4,172 | 0 | |||
Advantage Pipeline, L.L.C. [Member] | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Equity Method Investment, Ownership Percentage | 30.00% | 30.00% | 30.00% | ||||
Equity Method Investment, Summarized Financial Information, Current Assets | $ 2,075 | ||||||
Equity Method Investment, Summarized Financial Information, Noncurrent Assets | 89,065 | ||||||
Equity Method Investment, Summarized Financial Information, Assets | 91,140 | ||||||
Equity Method Investment, Summarized Financial Information, Current Liabilities | 1,327 | ||||||
Equity Method Investment, Summarized Financial Information, Noncurrent Liabilities | 20,910 | ||||||
Equity Method Investment Summarized Financial Information, Equity | 68,903 | ||||||
Equity Method Investment, Summarized Financial Information, Liabilities and Equity | $ 91,140 | ||||||
Equity Method Investment, Summarized Financial Information, Revenue | $ 3,150 | 3,370 | 8,475 | ||||
Equity Method Investment, Summarized Financial Information, Cost of Sales | 465 | 2,763 | 5,464 | ||||
Equity Method Investment, Summarized Financial Information, Net income | $ 187 | $ 607 | $ 3,011 | ||||
Proceeds from sale of unconsolidated affiliate | $ 25,300 | ||||||
Gain on sale of unconsolidated affiliate | $ 4,200 | ||||||
Proceeds from Sale of Equity Method Investment, Percent Held In Escrow | 10.00% | 10.00% |
PROPERTY, PLANT AND EQUIPMENT37
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | Apr. 18, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | $ 598,960 | $ 598,960 | $ 599,451 | |||
Accumulated depreciation | 300,615 | 300,615 | 292,117 | |||
Property, plant and equipment, net | 298,345 | 298,345 | 307,334 | |||
Depreciation | 7,500 | $ 7,400 | 15,300 | $ 14,300 | ||
Land | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 24,668 | 24,668 | 25,863 | |||
Land improvements | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 6,799 | $ 6,799 | 6,698 | |||
Land improvements | Min | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Estimated Useful Lives (Years) | 10 years | |||||
Land improvements | Max | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Estimated Useful Lives (Years) | 20 years | |||||
Pipelines and facilities | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 164,971 | $ 164,971 | 165,293 | |||
Pipelines and facilities | Min | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Estimated Useful Lives (Years) | 5 years | |||||
Pipelines and facilities | Max | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Estimated Useful Lives (Years) | 30 years | |||||
Storage and terminal facilities | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 354,609 | $ 354,609 | 347,656 | |||
Storage and terminal facilities | Min | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Estimated Useful Lives (Years) | 10 years | |||||
Storage and terminal facilities | Max | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Estimated Useful Lives (Years) | 35 years | |||||
Transportation equipment | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 7,230 | $ 7,230 | 12,391 | |||
Transportation equipment | Min | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Estimated Useful Lives (Years) | 3 years | |||||
Transportation equipment | Max | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Estimated Useful Lives (Years) | 10 years | |||||
Office property and equipment and other | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 33,706 | $ 33,706 | 35,578 | |||
Office property and equipment and other | Min | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Estimated Useful Lives (Years) | 3 years | |||||
Office property and equipment and other | Max | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Estimated Useful Lives (Years) | 20 years | |||||
Pipeline linefill and tank bottoms | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 3,234 | $ 3,234 | 3,234 | |||
Construction-in-progress | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | $ 3,743 | $ 3,743 | $ 2,738 | |||
Texas [Member] | Pipelines and facilities | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Proceeds from Sale of Property Held-for-sale | $ 4,800 | |||||
Gain (Loss) on Disposition of Assets | $ 100 |
DEBT Credit Agreements (Details
DEBT Credit Agreements (Details) | May 11, 2017USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jul. 27, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | ||||||||
Cash and cash equivalents | $ 3,274,000 | $ 3,034,000 | $ 3,274,000 | $ 3,034,000 | $ 3,304,000 | $ 3,038,000 | ||
Write off of Deferred Debt Issuance Cost | $ 700,000 | 700,000 | 700,000 | |||||
Debt issuance costs, noncurrent, net | 4,759,000 | 4,759,000 | $ 2,050,000 | |||||
Debt issuance costs | 4,017,000 | 17,000 | ||||||
Amortization and write-off of debt issuance costs | 300,000 | 200,000 | 600,000 | 400,000 | ||||
Interest expense for long-term debt | 3,400,000 | 2,700,000 | 6,700,000 | 5,100,000 | ||||
Capitalized interest | 3,000 | 7,000 | $ 5,000 | 41,000 | ||||
Blueknight General Partners G. P., L.L.C. [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit agreement, Constitute a change of control, if ceases to own, directly or indirectly, exactly 100% of the membership interests of the General Partner or if General Partner ceases to be controlled (as a percent) | 100.00% | |||||||
Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving credit facility amount | 450,000,000 | $ 450,000,000 | ||||||
Maximum borrowing capacity including additional lenders | $ 600,000,000 | $ 600,000,000 | ||||||
Debt Instrument Maximum Covenant Consolidated Senior Secured Leverage Ratio | 3.50 | 3.50 | ||||||
Consolidated interest coverage (as a ratio), minimum permitted | 2.50 | 2.50 | ||||||
Consolidated total leverage (as a ratio), actual | 4.17 | 4.17 | ||||||
Consolidated interest coverage (as a ratio), actual | 5.36 | 5.36 | ||||||
Debt issuance costs, noncurrent, net | $ 900,000 | |||||||
Debt issuance costs | $ 4,000,000 | $ 100,000 | $ 4,000,000 | $ 100,000 | ||||
Debt Instrument, Interest Rate During Period | 4.44% | 3.89% | 4.27% | 3.75% | ||||
Revolving Credit Facility [Member] | Min | ||||||||
Debt Instrument [Line Items] | ||||||||
Unused capacity, commitment fee (as a percent) | 0.375% | |||||||
Debt Instrument Covenant, Issued Qualified Senior Notes | $ 200,000,000 | $ 200,000,000 | ||||||
Revolving Credit Facility [Member] | Max | ||||||||
Debt Instrument [Line Items] | ||||||||
Unused capacity, commitment fee (as a percent) | 0.50% | |||||||
Revolving Credit Facility [Member] | Subsequent Event [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolver borrowings | $ 300,600,000 | |||||||
Debt Instrument, Unused Borrowing Capacity, Amount | 147,900,000 | |||||||
Revolving Credit Facility [Member] | Federal funds rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 0.50% | |||||||
Revolving Credit Facility [Member] | Eurodollar rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 1.00% | |||||||
Revolving Credit Facility [Member] | Applicable margin based on ABR [Member] | Min | ||||||||
Debt Instrument [Line Items] | ||||||||
Applicable margin interest rate increase (as a percent) | 1.00% | |||||||
Revolving Credit Facility [Member] | Applicable margin based on ABR [Member] | Max | ||||||||
Debt Instrument [Line Items] | ||||||||
Applicable margin interest rate increase (as a percent) | 2.00% | |||||||
Revolving Credit Facility [Member] | Applicable margin based on Eurodollar rate [Member] | Min | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 2.00% | |||||||
Revolving Credit Facility [Member] | Applicable margin based on Eurodollar rate [Member] | Max | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 3.00% | |||||||
Letter of Credit [Member] | Subsequent Event [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Letters of credit outstanding, amount | $ 1,500,000 | |||||||
Aggregate Principal Below Threshold [Member] | Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Consolidated total leverage (as a ratio), Maximum permitted | 4.75 | 4.75 | ||||||
Minimum Acquisition Costs | $ 15,000,000 | |||||||
Debt Instrument Covenant, Issued Qualified Senior Notes | $ 200,000,000 | 200,000,000 | ||||||
Aggregate Principal Above Threshold [Member] | Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument Covenant, Issued Qualified Senior Notes | $ 200,000,000 | $ 200,000,000 | ||||||
Provision One [Member] | Aggregate Principal Below Threshold [Member] | Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Consolidated total leverage (as a ratio), Maximum permitted | 5.25 | 5.25 | ||||||
Provision Two [Member] | Aggregate Principal Above Threshold [Member] | Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Consolidated total leverage (as a ratio), Maximum permitted | 5 | 5 | ||||||
Provision Three [Member] | Aggregate Principal Above Threshold [Member] | Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Consolidated total leverage (as a ratio), Maximum permitted | 5.50 | 5.50 | ||||||
Ergon [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit agreement, Constitute a change of control if Ergon ceases to own and control 50% of the GP | 50.00% |
DEBT Derivative Instruments (De
DEBT Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, Notional Amount | $ 200,000 | $ 200,000 | |||
Interest Expense, Other | 400 | $ 600 | 800 | $ 1,300 | |
Interest rate swap liabilities | 972 | 972 | $ 1,947 | ||
Unrealized (gain) loss related to interest rate swaps | $ (223) | $ 314 | $ (975) | $ 2,194 |
NET INCOME PER LIMITED PARTNE40
NET INCOME PER LIMITED PARTNER UNIT (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ 6,371 | $ (18,936) | $ 9,913 | $ (18,210) |
General partner interest in net income (loss) | 256 | (195) | 465 | (51) |
Preferred interest in net income | 6,279 | 5,389 | 12,558 | 10,780 |
Loss available to limited partners | $ (164) | $ (24,130) | $ (3,110) | $ (28,939) |
Basic and diluted weighted average number of units: | ||||
Common units | 38,155 | 33,206 | 38,151 | 33,191 |
Restricted and phantom units | 923 | 906 | 806 | 761 |
Total units | 39,078 | 34,112 | 38,957 | 33,952 |
Basic and diluted net loss per common unit | $ 0 | $ (0.71) | $ (0.08) | $ (0.85) |
PARTNERS' CAPITAL AND DISTRIB41
PARTNERS' CAPITAL AND DISTRIBUTIONS Issuances Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 05, 2016 | Dec. 31, 2016 | Jun. 30, 2017 | Jul. 26, 2016 |
Capital Unit [Line Items] | ||||
Preferred Units, Outstanding | 35,125,202 | 35,125,202 | ||
Limited Partner [Member] | ||||
Capital Unit [Line Items] | ||||
Partners' Capital Account, Units, Sold in Private Placement | 847,457 | |||
Partners' Capital Account, Units Issued | 3,795,000 | |||
Sale of Stock, Price Per Share | $ 5.90 | |||
Proceeds from equity issuance, net of offering costs | $ 20.9 | |||
Limited Partners' Offering Costs | $ 1.5 | |||
Proceeds from Issuance of Private Placement | $ 5 | $ 5 | ||
Preferred Partner [Member] | ||||
Capital Unit [Line Items] | ||||
Partners' Capital Account, Units Issued | 18,312,968 | 18,312,968 | ||
Proceeds from Issuance of Preferred Limited Partners Units | $ 144.7 | $ 144.7 | ||
Payments for Repurchase of Preferred Stock and Preference Stock | $ (95.3) | |||
General Partner [Member] | ||||
Capital Unit [Line Items] | ||||
Partners' Capital Account, Units Issued | 97,654 | |||
Partners' Capital Account, Sale of Units | $ 0.7 | |||
Vitol [Member] | Preferred Partner [Member] | ||||
Capital Unit [Line Items] | ||||
Stock Repurchased During Period, Shares | 6,667,695 | |||
Preferred Units, Outstanding | 2,488,789 | |||
Charlesbank [Member] | Preferred Partner [Member] | ||||
Capital Unit [Line Items] | ||||
Stock Repurchased During Period, Shares | 6,667,695 | |||
Preferred Units, Outstanding | 2,488,789 |
PARTNERS' CAPITAL AND DISTRIB42
PARTNERS' CAPITAL AND DISTRIBUTIONS (Narrative) (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Jun. 30, 2017USD ($)$ / shares | |
Distribution Made to Member or Limited Partner, Cash Distributions Declared | $ 5.9 |
Limited Partner [Member] | |
Distribution Made to Member or Limited Partner, Distributions Declared (in dollars per unit) | $ / shares | $ 0.1450 |
Distribution Made to Member or Limited Partner, Cash Distributions Declared | $ 5.5 |
Preferred Partner [Member] | |
Distribution Made to Member or Limited Partner, Distributions Declared (in dollars per unit) | $ / shares | $ 0.17875 |
Distribution Made to Member or Limited Partner, Cash Distributions Declared | $ 6.3 |
Phantom Share Units and Restricted Units [Member] | |
Distribution Made to Limited Partner, Cash Distributions Paid | 0.1 |
General Partner [Member] | |
Distribution Made to Member or Limited Partner, Cash Distributions Declared | $ 0.3 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Oct. 05, 2016 | |
Related Party Transaction [Line Items] | ||||||
Revenues | $ 43,877 | $ 43,425 | $ 90,217 | $ 84,435 | ||
Related party revenue | 13,505 | 5,862 | 27,147 | 12,871 | ||
Receivables from related parties | 1,534 | 1,534 | $ 1,860 | |||
Ergon [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related party revenue | 13,500 | 26,800 | ||||
Receivables from related parties | 1,500 | 1,500 | 1,700 | |||
Due to Related Parties | $ 5,000 | 5,000 | 1,000 | |||
Vitol [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related party revenue | 5,500 | 12,200 | ||||
Advantage Pipeline, L.L.C. [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related party revenue | 300 | $ 300 | 700 | |||
Receivables from related parties | $ 100 | |||||
Ergon [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Revenues | $ 3,500 | $ 7,100 | ||||
Blueknight GP Holding, LLC [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% |
LONG-TERM INCENTIVE PLAN (Detai
LONG-TERM INCENTIVE PLAN (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
Mar. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | Sep. 30, 2012 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Equity-based incentive compensation expense (in dollars) | $ 524 | $ 815 | |||||||||
Plan [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of units authorized | 4,100,000 | 4,100,000 | |||||||||
Number of Units [Roll Forward] | |||||||||||
Number of Units, Nonvested, Beginning balance | 915,180 | ||||||||||
Number of Units, Granted | 323,339 | ||||||||||
Number of Units, Vested | 213,923 | ||||||||||
Number of Units, Forfeited | 1,316 | ||||||||||
Number of Units, Nonvested, Ending balance | 915,180 | 1,023,280 | 1,023,280 | ||||||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||||||||
Weighted Average Grant Date Fair Value, Nonvested, Beginning balance (in dollars per unit) | $ 6.61 | ||||||||||
Weighted Average Grant Date Fair Value, Granted (in dollars per unit) | 7.15 | ||||||||||
Weighted Average Grant Date Fair Value, Vested (in dollars per unit) | 9.06 | ||||||||||
Weighted Average Grant Date Fair Value, Forfeited (in dollars per unit) | 7.74 | ||||||||||
Weighted Average Grant Date Fair Value, Nonvested, Ending balance (in dollars per unit) | $ 6.61 | $ 6.26 | $ 6.26 | ||||||||
Plan [Member] | Phantom common units [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unrecognized estimated compensation cost (in dollars) | $ 2,900 | $ 2,900 | |||||||||
Equity-based incentive compensation expense (in dollars) | 600 | $ 600 | 1,100 | $ 1,200 | |||||||
Plan [Member] | Phantom common units [Member] | Chief Executive Officer [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 5 years | ||||||||||
Value of award grants (in dollars) | $ 2,800 | ||||||||||
Unrecognized estimated compensation cost (in dollars) | $ 100 | $ 100 | |||||||||
Number of Units [Roll Forward] | |||||||||||
Number of Units, Granted | 500,000 | ||||||||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||||||||
Weighted Average Grant Date Fair Value, Granted (in dollars per unit) | $ 5.62 | ||||||||||
Plan [Member] | Restricted common units [Member] | Independent Directors [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 3 years | ||||||||||
Value of award grants (in dollars) | $ 75 | ||||||||||
Number of Units [Roll Forward] | |||||||||||
Number of Units, Granted | 10,950 | ||||||||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||||||||
Weighted Average Grant Date Fair Value, Granted (in dollars per unit) | [1] | $ 6.85 | |||||||||
January 2018 Vesting [Member] | Plan [Member] | Phantom common units [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Value of award grants (in dollars) | $ 2,059 | ||||||||||
Number of Units [Roll Forward] | |||||||||||
Number of Units, Granted | 266,076 | ||||||||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||||||||
Weighted Average Grant Date Fair Value, Granted (in dollars per unit) | [1] | $ 7.74 | |||||||||
January 2019 Vesting [Member] | Plan [Member] | Phantom common units [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Value of award grants (in dollars) | $ 58 | $ 1,985 | |||||||||
Number of Units [Roll Forward] | |||||||||||
Number of Units, Granted | 9,960 | 416,131 | |||||||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||||||||
Weighted Average Grant Date Fair Value, Granted (in dollars per unit) | [1] | $ 5.85 | $ 4.77 | ||||||||
January 2020 Vesting [Member] | Plan [Member] | Phantom common units [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Value of award grants (in dollars) | $ 2,312 | ||||||||||
Number of Units [Roll Forward] | |||||||||||
Number of Units, Granted | 323,339 | ||||||||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||||||||
Weighted Average Grant Date Fair Value, Granted (in dollars per unit) | [1] | $ 7.15 | |||||||||
[1] | Fair value is the closing market price on the grant date of the awards. |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Defined Contribution Plan [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employer discretionary contribution amount | $ 0.3 | $ 0.3 | $ 0.6 | $ 0.6 |
Deferred Profit Sharing [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employer discretionary contribution amount | $ 0.2 | $ 0.2 | $ 0.4 | $ 0.4 |
EMPLOYEE BENEFIT PLANS EUPP (De
EMPLOYEE BENEFIT PLANS EUPP (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Employee Benefits and Share-based Compensation, Noncash [Abstract] | ||||
Employee Stock Ownership Plan (ESOP), Shares in ESOP | 1,000,000 | 1,000,000 | ||
Employee Stock Ownership Plan (ESOP), Compensation Expense | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | $ 972 | $ 1,947 |
Total | 972 | 1,947 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | 0 | 0 |
Total | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | 972 | 1,947 |
Total | 972 | 1,947 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | 0 | 0 |
Total | $ 0 | $ 0 |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2017USD ($)StatesTerminalling_And_Storage_Facilities | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)Operating-segmentsStatesTerminalling_And_Storage_Facilities | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |||
Segment Reporting Information [Line Items] | |||||||
Number of operating segments (in operating segments) | Operating-segments | 4 | ||||||
Service revenue | |||||||
Third party revenue | $ 28,145 | $ 30,854 | $ 56,808 | $ 61,110 | |||
Related party revenue | 13,505 | 5,862 | 27,147 | 12,871 | |||
Product sales revenue: | |||||||
Third party revenue | 2,227 | 6,709 | 6,262 | 10,454 | |||
Total revenue for reportable segments | 43,877 | 43,425 | 90,217 | 84,435 | |||
Cost of product sales | 1,669 | 4,089 | 4,808 | 7,276 | |||
Operating margin (excluding depreciation and amortization) | 19,437 | [1] | 19,734 | [1] | 38,798 | 36,932 | |
Total assets (end of period) | 346,096 | 346,096 | $ 375,663 | ||||
Reconciles segment operating margin (excluding depreciation and amortization) to income before income taxes | |||||||
Operating margin (excluding depreciation and amortization) | 19,437 | [1] | 19,734 | [1] | 38,798 | 36,932 | |
Depreciation and amortization | (7,839) | (7,688) | (15,905) | (14,823) | |||
General and administrative expenses | (4,322) | (4,834) | (8,907) | (9,579) | |||
Asset impairment expense | (17) | (22,574) | (45) | (22,845) | |||
Gain (loss) on sale of assets | (754) | 14 | (879) | (19) | |||
Equity earnings in unconsolidated affiliate | 0 | 157 | 61 | 781 | |||
Gain on sale of unconsolidated affiliate | 4,172 | 0 | 4,172 | 0 | |||
Interest expense | (4,265) | (3,697) | (7,295) | (8,567) | |||
Income (loss) before income taxes | $ 6,412 | (18,888) | $ 10,000 | (18,120) | |||
Asphalt Services [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Number of terminalling and storage facilities | Terminalling_And_Storage_Facilities | 54 | 54 | |||||
Number of states where Asphalt terminalling and storage facilities are located | States | 26 | 26 | |||||
Service revenue | |||||||
Third party revenue | $ 13,259 | 18,132 | $ 26,482 | 35,438 | |||
Related party revenue | 13,505 | 256 | 26,837 | 558 | |||
Product sales revenue: | |||||||
Total revenue for reportable segments | 26,764 | 18,388 | 53,319 | 35,996 | |||
Operating expenses (excluding depreciation and amortization) | 11,935 | 6,839 | 24,255 | 13,271 | |||
Operating margin (excluding depreciation and amortization) | 14,829 | 11,549 | 29,064 | 22,725 | |||
Total assets (end of period) | 147,832 | 117,096 | 147,832 | 117,096 | |||
Reconciles segment operating margin (excluding depreciation and amortization) to income before income taxes | |||||||
Operating margin (excluding depreciation and amortization) | 14,829 | 11,549 | 29,064 | 22,725 | |||
Crude Oil Terminalling and Storage Services [Member] | |||||||
Service revenue | |||||||
Third party revenue | 5,726 | 3,626 | 11,851 | 7,187 | |||
Related party revenue | 0 | 2,645 | 0 | 5,404 | |||
Product sales revenue: | |||||||
Total revenue for reportable segments | 5,726 | 6,271 | 11,851 | 12,591 | |||
Operating expenses (excluding depreciation and amortization) | 992 | 1,134 | 2,003 | 2,295 | |||
Operating margin (excluding depreciation and amortization) | 4,734 | 5,137 | 9,848 | 10,296 | |||
Total assets (end of period) | 69,834 | 74,072 | 69,834 | 74,072 | |||
Reconciles segment operating margin (excluding depreciation and amortization) to income before income taxes | |||||||
Operating margin (excluding depreciation and amortization) | 4,734 | 5,137 | 9,848 | 10,296 | |||
Crude Oil Pipeline Services [Member] | |||||||
Service revenue | |||||||
Third party revenue | 2,720 | 2,702 | 5,324 | 4,954 | |||
Related party revenue | 0 | 985 | 310 | 3,305 | |||
Product sales revenue: | |||||||
Third party revenue | 2,227 | 6,709 | 5,877 | 10,454 | |||
Total revenue for reportable segments | 4,947 | 10,396 | 11,511 | 18,713 | |||
Operating expenses (excluding depreciation and amortization) | 3,142 | 3,711 | 6,383 | 7,939 | |||
Inter-segment Operating Expenses | 74 | 235 | 244 | 495 | |||
Cost of product sales | 1,669 | 4,089 | 4,808 | 7,276 | |||
Inter-Segment Cost of Purchased Oil and Gas | 0 | 426 | 0 | 426 | |||
Operating margin (excluding depreciation and amortization) | 62 | 1,935 | 76 | 2,577 | |||
Total assets (end of period) | 117,222 | 153,706 | 117,222 | 153,706 | |||
Reconciles segment operating margin (excluding depreciation and amortization) to income before income taxes | |||||||
Operating margin (excluding depreciation and amortization) | 62 | 1,935 | 76 | 2,577 | |||
Crude Oil Trucking and Producer Field Services [Member] | |||||||
Service revenue | |||||||
Third party revenue | 6,440 | 6,394 | 13,151 | 13,531 | |||
Related party revenue | 0 | 1,976 | 0 | 3,604 | |||
Intersegment Revenues | 74 | 235 | 244 | 495 | |||
Product sales revenue: | |||||||
Third party revenue | 0 | 0 | 385 | 0 | |||
Intersegment revenue | 0 | 426 | 0 | 426 | |||
Total revenue for reportable segments | 6,514 | 9,031 | 13,780 | 18,056 | |||
Operating expenses (excluding depreciation and amortization) | 6,702 | 7,918 | 13,970 | 16,722 | |||
Operating margin (excluding depreciation and amortization) | (188) | 1,113 | (190) | 1,334 | |||
Total assets (end of period) | 11,208 | 13,503 | 11,208 | 13,503 | |||
Reconciles segment operating margin (excluding depreciation and amortization) to income before income taxes | |||||||
Operating margin (excluding depreciation and amortization) | (188) | 1,113 | (190) | 1,334 | |||
Operating Segments [Member] | |||||||
Product sales revenue: | |||||||
Total revenue for reportable segments | 43,951 | 44,086 | 90,461 | 85,356 | |||
Intersegment Eliminations [Member] | |||||||
Service revenue | |||||||
Intersegment Revenues | $ (74) | $ (661) | $ (244) | $ (921) | |||
[1] | The following table reconciles segment operating margin (excluding depreciation and amortization) to income (loss) before income taxes (in thousands): Three Months ended June 30, Six Months ended June 30, 2016 2017 2016 2017Operating margin (excluding depreciation and amortization)$19,734 $19,437 $36,932 $38,798Depreciation and amortization(7,688) (7,839) (14,823) (15,905)General and administrative expenses(4,834) (4,322) (9,579) (8,907)Asset impairment expense(22,574) (17) (22,845) (45)Gain (loss) on sale of assets14 (754) (19) (879)Equity earnings in unconsolidated affiliate157 — 781 61Gain on sale of unconsolidated affiliate— 4,172 — 4,172Interest expense(3,697) (4,265) (8,567) (7,295)Income (loss) before income taxes$(18,888) $6,412 $(18,120) $10,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Gross income of a partnership, for any taxable year is qualifying income will be taxable as a corporation for federal income tax purposes for that taxable year and all subsequent years, maximum (as a percent) | 90.00% |
Federal statutory income tax rate (as a percent) | 35.00% |
Valuation Allowance [Line Items] | |
Difference in bases of property, plant and equipment | $ 793 |
Deferred tax asset | 793 |
Less: valuation allowance | 793 |
Net deferred tax asset | $ 0 |