SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2013 |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation |
OCI Resources completed its IPO of common units representing limited partner interests on September 18, 2013. Reported results of operations for the year ended December 31, 2013 include the results of OCI Wyoming Holding Co. and its subsidiary (the "Predecessor" or "OCI Holdings") through September 17, 2013. Therefore, results of operations for the year ended December 31, 2013 are the combined results of the Predecessor through September 17, 2013 and the Partnership for the period from September 18, 2013 through December 31, 2013. The accompanying consolidated financial statements as of December 31, 2012 and 2011 are derived from the audited consolidated financial statements of the Predecessor, and unless otherwise noted, financial information for the Predecessor and the Partnership is presented before non-controlling interest. All significant intercompany balances have been eliminated in consolidation. |
Reorganization and Restructuring and Non-controlling interests | ' |
Reorganization and Restructuring |
Prior to the IPO, OCI Wyoming's general partner interests were owned 50.49% and 48.51% by the Predecessor and NRP, respectively, with the 1% limited partner interests in OCI Wyoming being held by OCI Wyoming Company ("Wyoming Co."). The Predecessor and Wyoming Co. are commonly controlled by OCI Chemical. In connection with the IPO, the following transactions (the "Restructuring") were completed: |
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• | The Predecessor contributed its 50.49% general partner interest in OCI Wyoming to the Partnership. |
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• | Through a series of transactions between OCI Chemical, its commonly controlled subsidiaries and NRP, the 1% limited partner interest in OCI Wyoming owned by Wyoming Co. was restructured resulting in the Partnership's and NRP's general partnership interest in OCI Wyoming being reduced to 40.98% and 39.37%, respectively, and Wyoming Co. and NRP owning a 10.02% and 9.63% limited partner interest in OCI Wyoming, respectively. |
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• | Wyoming Co. contributed its 10.02% limited partner interest to the Partnership in exchange for approximately $65.3 million paid from the net proceeds of the IPO. |
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• | At the conclusion of the restructuring, the Partnership owned a 40.98% general partner interest and a 10.02% limited partner interest in OCI Wyoming. NRP owned a 39.37% general partner interest and a 9.63% limited partner interest in OCI Wyoming. |
The restructuring has been accounted for as a reorganization of entities under common control. As a result, the consolidated financial statements of the Predecessor, for all periods presented, have been restated to reflect the combination of the ownership interests in OCI Wyoming previously held by the Predecessor and Wyoming Co. adjusted for certain push-down accounting effects of the restructuring. In addition, prior to the restructuring of the 1% limited partner interest, the distributions included cumulative annual priority returns, however, as of the close of the IPO, all priority return distributions have been paid. |
Due to a change in reporting entity that resulted from the Restructuring, Wyoming Co.’s accounting basis has been pushed down to the Company effective on the date of the Restructuring, September 18, 2013. The accompanying consolidated balance sheets, statement of operations and comprehensive income, cash flows and statements of equity present the results of the Company’s operations and cash flows for the periods preceding the Restructuring as Predecessor and for the periods subsequent to the Restructuring as Successor. |
Non-controlling interests |
Prior to the Restructuring and completion of the IPO, non-controlling interests in the consolidated financial statements of the Predecessor represented the 1% limited partner interest in OCI Wyoming owned by Wyoming Co. and the 48.51% general partner interest in OCI Wyoming owned by Anadarko, and subsequently acquired by NRP. Subsequent to the Restructuring and IPO, non-controlling interests in the consolidated financial statements of the Partnership consists of 39.37% general partner interest and 9.63% limited partner interest in OCI Wyoming owned by NRP. |
Use of Estimates | ' |
Use of Estimates |
The preparation of consolidated financial statements, in accordance with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | ' |
Revenue Recognition |
We recognize revenue when the earnings process is complete, which is generally upon transfer of title. This transfer typically occurs upon shipment to the customer, or upon receipt by the customer. In all cases, we apply the following criteria in recognizing revenue: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed, determinable or reasonably estimated sales price has been agreed with the customer; and (4) collectability is reasonably assured. Customer rebates are accounted for as sales deductions and are held in liability accounts until payments are made to the customers. |
We record amounts billed for shipping and handling fees as revenue. Costs incurred for shipping and handling are recorded as costs of sales and services. |
Freight Costs | ' |
Freight Costs |
The Partnership includes freight costs billed to customers for shipments administered by the Partnership in gross sales. The related freight costs along with cost of products sold are deducted from gross sales to determine gross profit. |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents |
The Partnership considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of money market mutual funds and certificates of deposit. |
Accounts Receivable | ' |
Accounts Receivable |
Accounts receivable are carried at the original invoice amount less an estimate for doubtful receivables. The allowance for doubtful accounts is based on specifically identified amounts that the Partnership believes to be uncollectible. An additional allowance is recorded based on certain percentages of aged receivables, which are determined based on management's assessment of the general financial conditions affecting the Partnership's customer base. If actual collection experience changes, revisions to the allowance may be required. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. |
Inventory | ' |
Inventory |
Inventory is carried at the lower of standard cost or market determined on a first-in, first-out basis. Costs include raw materials, direct labor and manufacturing overhead. Market is based on current replacement cost for raw materials and stores inventory, and finished goods is based on net realizable value. |
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• | Raw material inventory includes material and natural resources being used in the mining and refining process. |
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• | Finished goods inventory is the finished product soda ash. |
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• | Stores inventory includes materials and supplies currently available for future use. |
Property, Plant, and Equipment | ' |
Property, Plant, and Equipment |
Property, plant, and equipment are stated at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of depreciable assets, principally using the straight-line method. The estimated useful lives applied to depreciable assets range from 3 to 20 years for machinery and equipment and 20 to 39 years for buildings and improvements. When property, plant, and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations for the year. |
The excess of the purchase price paid by OCI Chemical over the appraised fair value of the intangible net assets in the 1996 acquisition of its interest in OCI Wyoming has been allocated to mining reserves and is being amortized on a straight line basis over the mining reserves estimated useful life. As a result of a revised mine reserve study, effective January 1, 2014, the mining reserve will be amortized over a remaining life of 66 years. During 2013, 2012 and 2011, the remaining life was 67, 69 and 65 years, respectively. Amortization expense totaled approximately $0.7 million, $0.4 million and $0.8 million for the years ended December 31, 2013, 2012 and 2011, respectively. The aggregate carrying amount of mining reserves is reported as a separate component of property, plant, and equipment (see Note 7). |
The Partnership's policy is to evaluate property, plant, and equipment for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Impairment is determined to exist if the estimated future undiscounted cash flows are less than the carrying value. The amount of any impairment then recognized would be calculated as the difference between estimated fair value and the carrying value of the asset. |
Derivative Instruments and Hedging Activities | ' |
Derivative Instruments and Hedging Activities |
The Partnership may enter into derivative contracts from time to time to manage exposure to the risk of exchange rate changes on its foreign currency transactions, and the risk of the variability in interest rates on borrowings. Gains and losses on derivative contracts are reported as a component of the underlying transactions. The Partnership follows hedge accounting for its hedging activities. All derivative instruments are recorded on the balance sheet at their fair values. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. The Partnership designates its derivatives based upon criteria established by hedge accounting. For a derivative designated as a fair value hedge, the gain or loss is recognized in earnings in the period of change together with the offsetting gain or loss on the hedged item attributed to the risk being hedged. For a derivative designated as a cash flow hedge, the effective portion of the derivative's gain or loss is initially reported as a component of accumulated other comprehensive income (loss) and subsequently reclassified into earnings when the hedged exposure affects earnings. Any ineffective portion of the gain or loss is reported in earnings immediately. For derivatives not designated as hedges, the gain or loss is reported in earnings in the period of change as a component of the underlying transactions. |
Income Tax | ' |
Income Tax |
We are organized as a pass-through entity for federal income tax purposes. As a result, our partners are responsible for federal income taxes based on their respective share of taxable income. Net income for financial statement purposes may differ significantly from taxable income reportable to unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under the partnership agreement. |
The Partnership is a limited partnership and generally is not subject to federal or certain state income taxes. The Predecessor was subject to income tax and was included in the consolidated income tax returns of OCI Enterprises. Income taxes were allocated to the Predecessor based on separate-company computations of income or loss. The income tax expense for the years ended December 31, 2012 and 2011 are those of the Predecessor. For the year ended December 31, 2013, included in income tax expense is the expense of the Predecessor through September 17, 2013. |
Reclamation Costs | ' |
Reclamation Costs |
The Partnership is obligated to return the land beneath its refinery and tailings ponds to its natural condition upon completion of operations and is required to return the land beneath its rail yard to its natural condition upon termination of the various lease agreements. |
The Partnership accounts for its land reclamation liability as an asset retirement obligation, which requires that obligations associated with the retirement of a tangible long-lived asset be recorded as a liability when those obligations are incurred, with the amount of the liability initially measured at fair value. Upon initially recognizing a liability for an asset retirement obligation, an entity must capitalize the cost by recognizing an increase in the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the estimated useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or loss upon settlement. |
The estimated original liability calculated in 1996 for the refinery and tailing ponds was calculated based on the estimated useful life of the mine, which was 80 years, and on external and internal estimates as to the cost to restore the land in the future and state regulatory requirements. As a result of a revised mine reserve study, effective January 1, 2014, the mining reserve will be amortized over a remaining life of 66 years. During 2013, 2012 and 2011, the remaining life was 67, 69 and 65 years, respectively. The extension of remaining life by four years in 2012 from 2011, resulted in the addition of a new asset retirement obligation layer. The original liability and the new liability added because of the mine life study were discounted using credit-adjusted, risk-free rates of 7% and 4.25%, respectively, and both are being accreted throughout the estimated life of the related assets to equal the total estimated costs with a corresponding entry being recorded to interest expense. |
During 2011, the Partnership constructed a rail yard to facilitate loading and switching of rail cars. The Partnership is required to restore the land on which the rail yard is constructed to its natural conditions. The estimated liability for restoring the rail yard to its natural condition is calculated based on the land lease life of 30 years and on external and internal estimates as to the cost to restore the land in the future. The liability is discounted using a credit-adjusted risk-free rate of 4.25% and will be accreted throughout the estimated life of the related assets to equal the total estimated costs with a corresponding entry being recorded to interest expense. |
The Partnership recorded accretion expense for reclamation of its two liabilities of $0.2 million, $0.1 million and $0.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. At December 31, 2013 and 2012, these reclamation liabilities had a balance of $3.8 million and $3.6 million (including $1.0 million initial retirement liability), respectively (see Note 10). |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments |
Fair value is determined using a valuation hierarchy, generally by reference to an active trading market, quoted market prices or model-derived valuations for same or similar financial instruments. As of December 31, 2013 and 2012 the interest rate swap contract was measured at fair value on a recurring basis using Level 2 inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. See Note 16, "Fair Value Measurements," for more information. |
Net Income Per Unit | ' |
Net Income Per Unit |
Net income per unit applicable to limited partners (including subordinated unitholders) is computed by dividing limited partners’ interest in net income attributable to OCI Resources LP, after deducting the general partner's interest and any incentive distributions, by the weighted average number of outstanding common and subordinated units. Our net income is allocated to the general partner and limited partners in accordance with their respective partnership percentages, after giving effect to priority income allocations for incentive distributions, if any, to our general partner, pursuant to our partnership agreement. Net income per unit is only calculated for the Partnership subsequent to the IPO as no units were outstanding prior to September 18, 2013. Earnings in excess of distributions are allocated to the general partner and limited partners based on their respective ownership interests. Payments made to our unitholders are determined in relation to actual distributions declared and are not based on the net income allocations used in the calculation of net income per unit. |
In addition to the common and subordinated units, we have also identified the general partner interest and incentive distribution rights ("IDRs") as participating securities and use the two-class method when calculating the net income per unit applicable to limited partners, which is based on the weighted-average number of common units outstanding during the period. Basic and diluted net income per unit applicable to limited partners are the same because we do not have any potentially dilutive units outstanding. For the year ended ended December 31, 2013, the weighted-average number of units outstanding equals the total number of units outstanding. |
Reclassifications | ' |
Reclassifications - Certain amounts reported in the previous year have been reclassified to conform to the current year presentation. |
Subsequent Events | ' |
Subsequent Events |
We have evaluated subsequent events through the filing of this Annual Report on Form 10-K. |
Accounting Pronouncements Recently Adopted and Pending Accounting Pronouncements | ' |
Accounting Pronouncements Recently Adopted and Pending Accounting Pronouncements |
We believe recently issued accounting standards had no material effect on our financial statements as of and for the year ended December 2013. |