Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Jul. 16, 2014 | |
Entity Information [Line Items] | ' | ' |
Entity Registrant Name | 'Flint Hills Resources Houston Chemical, LLC | ' |
Entity Central Index Key | '0001577785 | ' |
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 | 'Non-accelerated Filer | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Jun-14 | ' |
Petrologistics LP [Member] | ' | ' |
Entity Information [Line Items] | ' | ' |
Entity Registrant Name | 'PetroLogistics LP | ' |
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 | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | 139,355,037 | 0 |
CONSOLIDATED_BALANCE_SHEETS_Un
CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $48,399 | $25,424 |
Accounts receivable | 58,848 | 75,322 |
Accounts receivable, related parties | 133 | 109 |
Inventory | 13,259 | 20,061 |
Prepaid expenses and other current assets | 6,293 | 2,642 |
Total current assets | 126,932 | 123,558 |
Property, plant, and equipment, net | 604,918 | 612,448 |
Intangible asset, net | 21,611 | 21,901 |
Deferred financing costs and other assets | 10,999 | 12,038 |
Total assets | 764,460 | 769,945 |
Current liabilities: | ' | ' |
Accounts payable | 37,305 | 34,576 |
Accounts payable, related parties | 179 | 134 |
Accrued liabilities | 21,095 | 24,168 |
Deferred revenue | 0 | 9,960 |
Total current liabilities | 58,579 | 68,838 |
Long-term debt | 365,000 | 365,000 |
Asset retirement obligation | 1,427 | 1,376 |
Deferred income taxes | 1,776 | 1,680 |
Total liabilities | 426,782 | 436,894 |
Commitments and contingencies (Note 9) | ' | ' |
Partners' capital (139,355,037 and 139,212,767 common units issued and outstanding at June 30, 2014 and December 31, 2013) | 337,678 | 333,051 |
Total liabilities and partners' capital | $764,460 | $769,945 |
CONSOLIDATED_BALANCE_SHEETS_Un1
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) | Jun. 30, 2014 | Dec. 31, 2013 |
CONSOLIDATED BALANCE SHEETS [Abstract] | ' | ' |
Common units, issued (in units) | 139,355,037 | 139,212,737 |
Common units, outstanding (in units) | 139,355,037 | 139,212,737 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ' | ' | ' | ' |
Sales | $211,916 | $159,378 | $431,904 | $368,088 |
Cost of sales | 144,496 | 111,081 | 306,085 | 225,204 |
Gross profit | 67,420 | 48,297 | 125,819 | 142,884 |
General and administrative expense | 10,622 | 5,321 | 15,365 | 10,758 |
Gain on derivatives, net | 0 | -5,438 | 0 | -1,700 |
Operating income | 56,798 | 48,414 | 110,454 | 133,826 |
Interest expense, net | -6,447 | -6,431 | -12,885 | -13,549 |
Loss on extinguishment of debt | 0 | 0 | 0 | -20,446 |
Net income before income tax expense | 50,351 | 41,983 | 97,569 | 99,831 |
Income tax expense | -1,084 | -576 | -1,635 | -1,347 |
Net income | 49,267 | 41,407 | 95,934 | 98,484 |
Comprehensive income | $49,267 | $41,407 | $95,934 | $98,484 |
Net income per common unit - basic and diluted (in dollars per unit) | $0.35 | $0.29 | $0.69 | $0.70 |
Weighted average number of common units outstanding - basic and diluted (in units) | 139,295,615 | 139,077,484 | 139,254,405 | 139,038,956 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Operating activities | ' | ' |
Net income | $95,934 | $98,484 |
Adjustments to reconcile net income to net cash provided by operations: | ' | ' |
Equity-based compensation expense | 2,488 | 2,249 |
Amortization of deferred financing costs | 1,040 | 1,432 |
Loss on extinguishment of debt | 0 | 13,498 |
Depreciation and amortization expense | 23,766 | 20,303 |
Accretion expense | 51 | 51 |
Reversal of unrealized loss on derivatives | 0 | -63,053 |
Non-cash gain on insurance reimbursement | 0 | -1,368 |
Deferred income tax expense | 96 | 699 |
Changes in working capital: | ' | ' |
Accounts receivable | 16,474 | 13,741 |
Accounts receivable, related parties | -24 | -202 |
Inventory | 6,802 | -18,822 |
Prepaid expenses and other current assets | -3,651 | 31,644 |
Accounts payable | 2,730 | -20,657 |
Accounts payable, related parties | 45 | -94 |
Accrued liabilities | -3,347 | 3,402 |
Deferred revenue | -9,960 | -2,425 |
Net cash provided by operations | 132,444 | 78,882 |
Investing activities | ' | ' |
Capital expenditures and deferred major maintenance costs | -15,674 | -24,923 |
Net cash used in investing activities | -15,674 | -24,923 |
Financing activities | ' | ' |
Deferred financing costs | 0 | -1,199 |
Proceeds from borrowings | 45,300 | 27,255 |
Repayments on borrowings | -45,300 | -20,450 |
Cash distributions, net of contributions | -93,795 | -44,438 |
Total cash used in financing activities | -93,795 | -38,832 |
Net change in cash | 22,975 | 15,127 |
Cash at beginning of period | 25,424 | 31,434 |
Cash at end of period | 48,399 | 46,561 |
Noncash financing activities: | ' | ' |
Increase in non-cash capital expenditures | 274 | 0 |
Insurance proceeds receivable | 0 | 1,368 |
Capital contributions receivable from PL Manufacturing and PL Manufacturing Members for realized losses on derivatives | $0 | $4,808 |
Organization_and_Nature_of_Ope
Organization and Nature of Operations | 6 Months Ended |
Jun. 30, 2014 | |
Organization and Nature of Operations [Abstract] | ' |
Organization and Nature of Operations | ' |
1. Organization and Nature of Operations | |
As used in this Report, the term “PetroLogistics” refers to PetroLogistics LP. References to “PL Propylene” refer to PL Propylene LLC, our sole operating subsidiary at June 30, 2014. References in this Report to our “Sponsors” refer to Lindsay Goldberg LLC (“Lindsay Goldberg”) and York Capital Management, our sponsors at June 30, 2014. | |
For periods prior to the Merger, GP Equity Transfer, MLP Merger and GP Merger, references to “we,” ‘us,” “our” or like terms refer to PetroLogistics, unless the context otherwise requires. | |
For periods after the Merger, GP Equity Transfer, MLP Merger and GP Merger, references to the “Company,” “FHRHC”, “we,” ‘us,” “our” or like terms refer to Flint Hills Resources Houston Chemical, LLC, formerly known as PL Propylene and the successor by merger to PetroLogistics and PetroLogistics GP LLC (the “General Partner”), unless the context otherwise requires. See Note 10 for additional information. | |
Organization | |
PetroLogistics was a Delaware limited partnership that was formed on June 9, 2011, by Propylene Holdings LLC (“Propylene Holdings”) to own PL Propylene, a wholly owned subsidiary of Propylene Holdings. The General Partner held a non-economic interest in PetroLogistics. | |
On March 30, 2012, Propylene Holdings contributed PL Propylene to PetroLogistics. Because this transaction was a transaction between entities under common control, the contributed assets and liabilities of PL Propylene were recorded in the consolidated financial statements at PL Propylene’s historical cost. Prior to the contribution, PetroLogistics had no operations and nominal assets and liabilities. | |
Merger Agreement | |
On May 27, 2014, the Board of Directors of our General Partner unanimously approved an Agreement and Plan of Merger and Membership Interest Transfer Agreement by and among Flint Hills Resources, LLC, a Delaware limited liability company (“New Parent”), FHR Propylene, LLC, a Delaware limited liability company and subsidiary of New Parent (“Merger Sub”), PetroLogistics, our General Partner and Propylene Holdings. In this Report, we refer to the Agreement and Plan of Merger and Membership Interest Transfer Agreement as the “Merger Agreement” and to the merger of Merger Sub with and into PetroLogistics that is contemplated by the Merger Agreement as the “Merger.” | |
The Board of Directors of our General Partner unanimously approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement (collectively with the Merger, the “Transactions”) on the terms and subject to the conditions set forth in the Merger Agreement, declared the Merger Agreement and the Transactions to be advisable and in the best interest of PetroLogistics, the General Partner and the holders of common units of PetroLogistics (the “Unitholders”), and recommended that the Unitholders approve the Merger Agreement and Transactions. | |
Under the applicable provisions of our First Amended and Restated Agreement of Limited Partnership, the approval of the Merger Agreement by our Unitholders required the affirmative vote or written consent of the holders of a majority of the outstanding common units. On May 27, 2014, a majority of the Unitholders delivered to PetroLogistics a written consent approving the Merger Agreement. Accordingly, the approval of the Merger Agreement was effected on May 27, 2014, and no further action of the Unitholders was required to approve the Merger Agreement. No dissenters’ or appraisal rights are or were available with respect to the transactions contemplated by the Merger Agreement. See Note 10 for additional information regarding the Merger and Transactions. | |
Nature of Operations | |
We currently own and operate the only U.S. propane dehydrogenation facility (the “facility”) producing polymer grade and chemical grade propylene from propane. Propylene is used as one of the basic building blocks for petrochemicals in a variety of end uses, including paints, coatings, building materials, clothing, automotive parts, packaging and a range of other consumer and industrial products. In addition to propylene, the facility generates commercial quantities of the following by-products during the production process: hydrogen, C4 mix stream and C5+ stream. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||||||
2. Summary of Significant Accounting Policies | |||||||||||||||||
Basis of Presentation and Principles of Consolidation | |||||||||||||||||
The interim consolidated financial statements and notes thereto have been prepared by management without audit according to the rules and regulations of the Securities and Exchange Commission (“SEC”) and reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results for the periods presented. Such adjustments are of a normal recurring nature, unless otherwise disclosed. Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been omitted pursuant to the SEC’s rules and regulations. However, management believes that the disclosures presented herein are adequate to fairly present the information. All inter-company transactions and balances have been eliminated upon consolidation. The accompanying interim consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-K as filed with the SEC on March 7, 2014. The critical accounting policies used in applying U.S. GAAP to the financial statements included in this Report are the critical accounting policies of PetroLogistics prior to the Merger. | |||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of financial statements in conformity with U.S. GAAP 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 date of the financial statements, and the reported amounts of sales and expenses during the reporting periods. We review our estimates on an ongoing basis using currently available information. Changes in facts and circumstances may result in revised estimates, and actual results could differ materially from those estimates. The results of operations of PetroLogistics for any interim period are not necessarily indicative of results for the full year. | |||||||||||||||||
Derivative Instruments | |||||||||||||||||
Commencing October 2011 and through March 2012, we entered into commodity derivative contracts (the “propane swaps”) with settlement dates in 2012 and 2013 to manage our exposure to commodity price risk with respect to propane, our sole feedstock. The propane swaps were designed to mitigate the risk associated with unfavorable market movements in the price of energy commodities. Our propane swaps were intended to act as a hedging (offset) mechanism against the volatility of energy commodity prices by allowing us to transfer some of the price risk to counterparties who were able and willing to bear it. | |||||||||||||||||
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC” or “Codification”) Topic 815, Derivatives and Hedging (“ASC Topic 815”), addresses the accounting for derivative contracts. We entered into our commodity derivative contracts to economically hedge an exposure through a relationship that did not qualify for hedge accounting under ASC Topic 815. Our derivative contracts were recorded as derivative assets and liabilities, as applicable, at fair value on the consolidated balance sheets, and the associated unrealized gains and losses were recorded as current expense or income in the consolidated statements of comprehensive income. Unrealized gains or losses on commodity derivative contracts represent the non-cash change in the fair value of these derivative instruments and do not impact operating cash flows in the consolidated statements of cash flows. Until settlement occurred, the changes in fair value of the propane swaps resulted in non-cash gains or losses being reported in our operating results as gain or loss on derivatives. | |||||||||||||||||
Omnibus Agreement | |||||||||||||||||
On May 9, 2012, the General Partner, PetroLogistics, Propylene Holdings, PL Propylene and PL Manufacturing LLC (“PL Manufacturing”) entered into an omnibus agreement (the “omnibus agreement”). Pursuant to the omnibus agreement and a related pledge agreement (the “pledge agreement”), we allocated all of our benefits and obligations under the propane swaps to PL Manufacturing and the owners of 100% of the issued and outstanding equity interests in PL Manufacturing (the “PL Manufacturing Members”). | |||||||||||||||||
On April 19, 2013, we, PL Manufacturing and the counterparty to the propane swaps agreed to terminate the propane swaps remaining as of May 1, 2013. Under the omnibus agreement and the pledge agreement, any amounts that we were required to pay under the propane swaps were contributed to us as a capital contribution by PL Manufacturing and the PL Manufacturing Members. | |||||||||||||||||
While we did not bear any of the costs nor receive any of the benefits of the propane swaps, we remained a party to the propane swaps and were obligated to make payments to the propane swap counterparties as they came due and to post any collateral as required under the terms of the propane swap agreement. As a result, we continued to record the fair value of the propane swaps on our consolidated balance sheets with the related gains or losses reflected in our consolidated statements of comprehensive income. To the extent that we made payments under the propane swaps, PL Manufacturing and the PL Manufacturing Members were responsible for making quarterly capital contributions in an amount equal to the sum of all payments we made under such propane swaps during the applicable fiscal quarter or that we owed at the end of the quarter. During the six months ended June 30, 2013, we recorded a capital contribution of approximately $22.1 million for the reimbursement of the realized losses on the propane swaps that we incurred in the first quarter of 2013. | |||||||||||||||||
In connection with the termination of the propane swaps, we paid a cancellation payment of $34.4 million in May 2013, of which $5.4 million was reimbursed to us through a reduction in the distribution paid to PL Manufacturing and the PL Manufacturing Members in May 2013 in accordance with the terms of the omnibus agreement. The remaining $29.0 million was settled with cash held as collateral by the propane swap counterparty, and we were immediately reimbursed by PL Manufacturing and the PL Manufacturing Members. We received the final reimbursement for realized losses from PL Manufacturing and the PL Manufacturing Members on August 14, 2013, at which time the omnibus agreement terminated in accordance with its terms. | |||||||||||||||||
Equity-Based Compensation | |||||||||||||||||
We recognize compensation expense related to unit-based awards granted to employees based on the estimated fair value of the awards on the date of grant, net of estimated forfeitures (see Note 6). The grant date fair value of the unit-based awards is generally recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
We consider cash and cash equivalents, accounts receivable, accounts payable, accounts receivable-related parties, accounts payable-related parties, and accrued liabilities to be financial instruments in which the carrying amounts represent fair value because of the short-term nature of the accounts. | |||||||||||||||||
Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is determined based on inputs, which refer broadly to assumptions that market participants use in pricing assets or liabilities. These inputs can be readily observable, market corroborated or generally unobservable inputs. We make certain assumptions we believe that market participants would use in pricing assets or liabilities, including assumptions about risk, and the risks inherent in the inputs to valuation techniques. Credit risk of PetroLogistics and its counterparties is incorporated in the valuation of assets and liabilities. We believe we use valuation techniques that maximize the use of observable market-based inputs and minimize the use of unobservable inputs. | |||||||||||||||||
The following table presents the financial instruments that require fair value disclosure as of June 30, 2014: | |||||||||||||||||
Fair Value | |||||||||||||||||
(in thousands) | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Carrying Value | ||||||||||||||
Financial liabilities | |||||||||||||||||
Notes | $ | — | $ | 397,840 | $ | — | $ | 365,000 | |||||||||
The following table presents the financial instruments that require fair value disclosure as of December 31, 2013: | |||||||||||||||||
Fair Value | |||||||||||||||||
(in thousands) | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Carrying Value | ||||||||||||||
Financial liabilities | |||||||||||||||||
Notes | $ | — | $ | 367,401 | $ | — | $ | 365,000 | |||||||||
The Notes are deemed to be Level 2 financial instruments because the fair value is based on observable market data. At June 30, 2014 and December 31, 2013, the fair value of the Notes was determined based on market transactions and external market corroborated data. | |||||||||||||||||
There are no financial instruments that are split across the levels, and there have been no financial instruments that transferred between the levels during the six months ended June 30, 2014. | |||||||||||||||||
Segment Reporting | |||||||||||||||||
We operated in one segment for the production and sale of propylene and related by-products. All of our operations were located in Houston, Texas. | |||||||||||||||||
Net Income Per Common Unit | |||||||||||||||||
Net income per common unit for a given period is based on the distributions that are made to the unitholders plus an allocation of undistributed net income based on provisions of the partnership agreement, divided by the weighted average number of common units outstanding. The two-class method dictates that net income for a period be reduced by the amount of distributions and that any residual amount representing undistributed net income be allocated to common unitholders and other participating unitholders to the extent that each unit may share in net income as if all of the net income for the period had been distributed in accordance with the partnership agreement. Unit-based awards granted under the PetroLogistics Long-Term Incentive Plan (the “Long-Term Incentive Plan”) were eligible for Distribution Equivalent Rights (“DERs”). To the extent that non-forfeitable DERs are awarded, the underlying nonvested unit-based awards were considered participating securities for purposes of determining net income per unit. Undistributed income was allocated to participating securities based on the proportional relationship of the weighted average number of common units and unit-based awards outstanding. Undistributed losses (including those resulting from distributions in excess of net income) were allocated to common units based on provisions of the partnership agreement. Undistributed losses were not allocated to nonvested unit-based awards as they did not participate in net losses. Distributions declared and paid in the period were treated as distributed earnings in the computation of earnings per common unit even though cash distributions were not necessarily derived from current or prior period earnings. | |||||||||||||||||
The General Partner did not have an economic interest in PetroLogistics and, therefore, did not participate in PetroLogistics’ net income. | |||||||||||||||||
The following table provides a reconciliation of net income and the allocation of net income to the common units and the unit-based awards for purposes of computing net income per unit for the three months ended June 30, 2014 (in thousands, except units and per unit data): | |||||||||||||||||
Limited Partner Units | |||||||||||||||||
Total | Common Units | Long-Term Incentive Plan Unit-Based Awards | |||||||||||||||
Net income | $ | 49,267 | |||||||||||||||
Less: Distributions to unitholders | 51,797 | $ | 51,509 | $ | 288 | ||||||||||||
Assumed allocation of undistributed net loss | $ | (2,530 | ) | $ | (2,530 | ) | $ | — | |||||||||
Weighted average units outstanding | 139,295,615 | 675,849 | |||||||||||||||
Net income per unit: | |||||||||||||||||
Distributed earnings | $ | 0.37 | $ | 0.43 | |||||||||||||
Undistributed net loss allocation | (0.02 | ) | — | ||||||||||||||
Net income per common unit - basic and diluted | $ | 0.35 | $ | 0.43 | |||||||||||||
The following table provides a reconciliation of net income and the allocation of net income to the common units and the unit-based awards for purposes of computing net income per unit for the six months ended June 30, 2014 (in thousands, except units and per unit data): | |||||||||||||||||
Limited Partner Units | |||||||||||||||||
Total | Common Units | Long-Term Incentive Plan Unit-Based Awards | |||||||||||||||
Net income | $ | 95,934 | |||||||||||||||
Less: Distributions to unitholders | 93,795 | $ | 93,273 | $ | 522 | ||||||||||||
Assumed allocation of undistributed net income | $ | 2,139 | $ | 2,127 | $ | 12 | |||||||||||
Weighted average units outstanding | 139,254,405 | 710,929 | |||||||||||||||
Net income per unit: | |||||||||||||||||
Distributed earnings | $ | 0.67 | $ | 0.73 | |||||||||||||
Undistributed net income allocation | 0.02 | 0.02 | |||||||||||||||
Net income per common unit - basic and diluted | $ | 0.69 | $ | 0.75 | |||||||||||||
The following table provides a reconciliation of net income and the allocation of net income to the common units and the unit-based awards for purposes of computing net income per unit for the three months ended June 30, 2013 (in thousands, except units and per unit data): | |||||||||||||||||
Limited Partner Units | |||||||||||||||||
Total | Common Units | Long-Term Incentive Plan Unit-Based Awards | |||||||||||||||
Net income | $ | 41,407 | |||||||||||||||
Less: Distributions to unitholders | 93,704 | $ | 93,135 | $ | 569 | ||||||||||||
Assumed allocation of undistributed net loss | $ | (52,297 | ) | $ | (52,297 | ) | $ | — | |||||||||
Weighted average units outstanding | 139,077,484 | 755,077 | |||||||||||||||
Net income per unit: | |||||||||||||||||
Distributed earnings | $ | 0.67 | $ | 0.75 | |||||||||||||
Undistributed net loss allocation | (0.38 | ) | — | ||||||||||||||
Net income per common unit - basic and diluted | $ | 0.29 | $ | 0.75 | |||||||||||||
The following table provides a reconciliation of net income and the allocation of net income to the common units and the unit-based awards for purposes of computing net income per unit for the six months ended June 30, 2013 (in thousands, except units and per unit data): | |||||||||||||||||
Limited Partner Units | |||||||||||||||||
Total | Common Units | Long-Term Incentive Plan Unit-Based Awards | |||||||||||||||
Net income | $ | 98,484 | |||||||||||||||
Less: Distributions to unitholders | 132,865 | $ | 132,055 | $ | 810 | ||||||||||||
Assumed allocation of undistributed net loss | $ | (34,381 | ) | $ | (34,381 | ) | $ | — | |||||||||
Weighted average units outstanding | 139,038,956 | 806,143 | |||||||||||||||
Net income per unit: | |||||||||||||||||
Distributed earnings | $ | 0.95 | $ | 1 | |||||||||||||
Undistributed net loss allocation | (0.25 | ) | — | ||||||||||||||
Net income per common unit - basic and diluted | $ | 0.7 | $ | 1 | |||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
In April 2014, the FASB issued Accounting Standard Update (or “ASU”) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360) - Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). Under this amendment, requirements for reporting discontinued operations have changed. Discontinued operations may include disposals of a business, nonprofit activity and component of an entity upon meeting certain other criteria. Disposals representing components of an entity must reflect a strategic shift that has a major effect on the entity's operations and financial results. Previous conditions prohibiting the entity from having significant continuing involvement in the disposal group and requiring the elimination of operations and cash flows from ongoing operations of the entity have been removed. The update is effective on a prospective basis for disposals that occur within annual periods beginning on or after December 15, 2014, and interim periods in those years. We are evaluating the provisions of this statement and have not determined what impact the adoption of ASU 2014-08 will have on our financial position or results of operations. | |||||||||||||||||
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In adopting ASU 2014-09, companies may use either a full retrospective or a modified retrospective approach. ASU 2014-09 is effective for the first interim period within annual reporting periods beginning after December 15, 2016, and early adoption is not permitted. We will adopt ASU 2014-09 during the first quarter of fiscal 2017. We are evaluating the provisions of this statement and have not determined what impact the adoption of ASU 2014-09 will have on our financial position or results of operations. |
Inventory
Inventory | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Inventory [Abstract] | ' | ||||||||
Inventory | ' | ||||||||
3. Inventory | |||||||||
Inventory is recorded at the lower of cost or market, with cost determined using the weighted-average method. Inventory consists of the following (in thousands): | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Product inventory | |||||||||
Raw materials | $ | 3,055 | $ | 8,356 | |||||
Work in progress | 1,577 | 1,615 | |||||||
Finished product | 1,198 | 3,014 | |||||||
Total product inventory | 5,830 | 12,985 | |||||||
Maintenance spares | 7,429 | 7,076 | |||||||
Total inventory | $ | 13,259 | $ | 20,061 | |||||
Raw materials inventory consists primarily of propane. Work in progress inventory represents pipeline and plant fill inventory, which were a combination of propane and propylene. Finished goods inventory includes inventory stored at third party facilities pursuant to our propylene exchange and storage contracts. At June 30, 2014, the exchange and storage contracts provided for storage capacity of 95 million pounds. Legal title and custody, control and risk of loss of finished goods inventory remained with us until the finished goods inventory were delivered to the customer pursuant to our propylene sales contracts. |
Derivative_Instruments
Derivative Instruments | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Derivative Instruments [Abstract] | ' | ||||||||
Derivative Instruments | ' | ||||||||
4. Derivative Instruments | |||||||||
Our business activities expose us to risks associated with unfavorable changes in the market price of propylene and propane. Commencing October 2011 and through March 2012, we entered into derivative transactions with the intent of reducing volatility in our cash flows due to fluctuations in the price of propane, our sole feedstock. Under the terms of the arrangement, for a portion of our propane consumption, we locked in the price of propane as a fixed percentage of the price of Brent crude oil (the “contractual percentage”). Beginning in January 2012, and at the conclusion of each month thereafter through the May 2013 cancellation date, we performed a calculation to determine the average actual price of propane for that month as a percentage of the average actual price of Brent crude oil for that month (the “actual percentage”). If the actual percentage exceeded the contractual percentage under the propane swaps, we were owed a sum by the propane swaps counterparty. If the contractual percentage exceeded the actual percentage under the propane swaps, we owed a sum to the propane swaps counterparty. | |||||||||
On April 19, 2013, we, PL Manufacturing and the counterparty to the propane swaps agreed to terminate the propane swaps remaining as of May 1, 2013. Under the omnibus agreement and the pledge agreement, any amounts that we were required to pay under the propane swaps were contributed to us as a capital contribution by PL Manufacturing and the PL Manufacturing Members. See Note 2 regarding the omnibus agreement. | |||||||||
As of June 30, 2014 and December 31, 2013, we did not have any outstanding commodity forward contracts to hedge our forecasted energy commodity purchases. | |||||||||
Effect of Derivative Contracts on the Consolidated Statements of Comprehensive Income | |||||||||
The following table summarizes the impact of our derivative contracts on our accompanying consolidated statements of comprehensive income (in thousands): | |||||||||
Net Gain Recognized in Statement of Comprehensive Income | |||||||||
Derivatives Not Designated as Hedging Contracts | Three Months Ended | Six Months Ended | |||||||
30-Jun-13 | 30-Jun-13 | ||||||||
Realized loss on propane swaps | $ | 39,223 | $ | 61,353 | |||||
Unrealized gain on propane swaps | 44,661 | 63,053 | |||||||
Propane swaps | $ | 5,438 | $ | 1,700 | |||||
Total net gain on derivatives | $ | 5,438 | $ | 1,700 |
Debt
Debt | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Debt [Abstract] | ' | ||||||||||||||||
Debt | ' | ||||||||||||||||
5. Debt | |||||||||||||||||
2012 Credit Facilities | |||||||||||||||||
On March 27, 2012, PL Propylene entered into a $350.0 million term loan facility (the “2012 Term Loan Facility”) and a $120.0 million revolving credit facility with Morgan Stanley Senior Funding, Inc., and the lenders party thereto (the “2012 Revolving Credit Facility” and collectively with the 2012 Term Loan Facility, the “2012 Credit Facilities”). Borrowings under the 2012 Credit Facilities carried interest at a rate per annum based on an underlying base rate plus an applicable margin. The applicable margin for the 2012 Term Loan Facility and the 2012 Revolving Credit Facility ranged from 4.75% for loans bearing interest at the alternate base rate to 5.75% for loans bearing interest at LIBOR. During the first quarter of 2013, the interest rate on the term loan was based on LIBOR, subject to a LIBOR floor of 1.25%, resulting in a rate of 7%. | |||||||||||||||||
The 2012 Revolving Credit Facility also included a commitment fee calculated at a rate per annum equal to 0.50% on the average daily unused portion of the commitments under that facility. In addition, we paid an annual management fee for the 2012 Term Loan Facility and the 2012 Revolving Credit Facility. We were also required to pay a participation fee equal to the applicable margin for LIBOR loans, and a fronting fee to lenders participating in any letter of credit of 5.75% and 0.125%, respectively. | |||||||||||||||||
As required by the 2012 Term Loan Facility, we entered into an interest rate protection agreement in July 2012 whereby we capped the three month LIBOR rate at 2.0% for up to $115.5 million on the 2012 Term Loan Facility. The agreement terminated on March 27, 2014. | |||||||||||||||||
2013 Credit Facilities and Debt Refinancing | |||||||||||||||||
On March 28, 2013, we and our wholly owned finance subsidiary, PetroLogistics Finance Corp. (“Finance Corp.”), co-issued jointly and severally $365.0 million of senior unsecured notes due 2020 (the “Notes”), and we amended and extended the 2012 Revolving Credit Facility (the “2013 Revolving Credit Facility” and together with the Notes, the “2013 Credit Facilities”) from $120 million to $170 million with Morgan Stanley Senior Funding, Inc. (the “Agent”), and the lender parties thereto. We used the net proceeds from the issuance of the Notes, after underwriting fees of $7.3 million, to (1) repay all borrowings outstanding under the 2012 Term Loan Facility in the amount of $347.4 million, (2) pay $6.9 million for the call premium and costs associated with the cancellation of the 2012 Term Loan Facility and (3) pay $3.0 million in commitment fees for the 2013 Revolving Credit Facility and approximately $0.4 million in transaction fees. The proceeds from the Notes, the repayment of the 2012 Term Loan Facility and the transaction fees were net settled with the Agent as presented in the consolidated statement of cash flows for the six months ended June 30, 2013. In addition, we incurred approximately $1.3 million in third-party transaction costs. The Notes were issued at the par value of $365 million and are reported as long-term debt in our consolidated balance sheets at June 30, 2014 and December 31, 2013. We recorded total deferred financing costs of approximately $12.0 million in connection with the issuance of the Notes and the amendment and extension of our 2013 Revolving Credit Facility. Cash paid for deferred financing costs totaled approximately $1.3 million with the remaining portion of $10.7 million net settled with the Agent through the Note proceeds. We amortized the deferred financing costs using the effective interest method over the terms of the Notes and 2013 Revolving Credit Facility. | |||||||||||||||||
At June 30, 2014, the 2013 Credit Facilities contained certain restrictive financial covenants, including limitations on our ability to incur additional debt and the requirement under the terms of our 2013 Revolving Credit Facility to maintain a total senior secured leverage ratio, as defined, no greater than 2.0 to 1.0, but only in the event that on the last day of any quarter beginning with the quarter ended June 30, 2013, the aggregate amounts outstanding under the 2013 Revolving Credit Facility exceeds $120 million. | |||||||||||||||||
Interest Rate and Fees. The Notes bear interest at a fixed rate of 6.25% per annum, payable on April 1 and October 1. Prior to the repayment and termination of the 2013 Revolving Credit Facility in connection with the completion of the Merger, the 2013 Revolving Credit Facility bore interest at a rate per annum based on an underlying base rate plus an applicable margin. The applicable margin for the 2013 Revolving Credit Facility ranged from 2.0% for loans bearing interest at the alternate base rate to 3.0% for loans bearing interest at LIBOR. The alternate base rate was defined as the greater of the prime rate in effect or the federal funds effective rate in effect plus ½ of 1.0%. The 2013 Revolving Credit Facility also contained a facility commitment fee at a rate of 0.50% per annum based on the daily unused amount of the commitment amount of $170 million payable in arrears on the last day of March, June, September and December of each year. | |||||||||||||||||
Amortization and Final Maturity. The Notes have a maturity date of April 1, 2020. Prior to April 1, 2016, we may redeem all or part of the senior notes at a redemption price equal to the sum of 100% of the principal amount of the Notes, plus a “make-whole” premium, plus accrued and unpaid interest, if any, to the date of redemption. We may also redeem some or all of the Notes on or after April 1, 2016, at the redemption prices (expressed as percentages of principal) set forth below, plus accrued and unpaid interest, if any, on the Notes redeemed to the applicable redemption date. | |||||||||||||||||
Year | Percentage | ||||||||||||||||
2016 | 103.125 | ||||||||||||||||
2017 | 101.563 | ||||||||||||||||
2018 and thereafter | 100 | ||||||||||||||||
At June 30, 2014 and December 31, 2013, there were no amounts outstanding under the 2013 Revolving Credit Facility. The 2013 Revolving Credit Facility was repaid in full and terminated in connection with the Merger. See Note 10 for additional information. | |||||||||||||||||
Guarantees. The Notes rank equally in right of payment with all of our existing and future senior indebtedness. Prior to the merger of PetroLogistics into PL Propylene, the Notes were guaranteed on a senior unsecured basis by PetroLogistics’ wholly owned subsidiary PL Propylene. The full and unconditional guarantee ranked equally with all of the existing and future senior indebtedness of PL Propylene. At June 30, 2014, PL Propylene and PetroLogistics Finance Corp. were our only subsidiaries. At June 30, 2014, PetroLogistics had no independent assets or operations and there were no significant restrictions upon our ability to obtain funds from our subsidiaries by dividend or loan. Finance Corp. has no material assets and does not conduct any operations. None of the assets of our subsidiaries represent restricted net assets pursuant to Rule 4-08(e)(3) of Regulation S-X under the Securities Act of 1933, as amended. Prior to the merger of PetroLogistics into PL Propylene, (1) the Notes were effectively subordinated to all of our and our guarantor subsidiaries’ existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and (2) the Notes were structurally subordinated to all future indebtedness and other liabilities of any of our subsidiaries that are not issuers or guarantors of the Notes. See Note 10 for additional information. | |||||||||||||||||
Loss on Extinguishment of Debt | |||||||||||||||||
When we entered into the 2013 Credit Facilities, we recognized a loss on extinguishment of debt of approximately $20.4 million in our consolidated statements of comprehensive income for the six-month period ended June 30, 2013. This loss on extinguishment resulted from the write off of approximately $7.7 million of unamortized deferred financing costs associated with the 2012 Credit Facilities. We also wrote off the unamortized original issue discount associated with the 2012 Credit Facilities in the amount of approximately $5.8 million. In addition, we paid a call premium of approximately $6.9 million for the prepayment of the 2012 Term Loan Facility. | |||||||||||||||||
Interest expense, net consists of the following (in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Interest expense incurred on borrowings | $ | (5,713 | ) | $ | (5,705 | ) | $ | (11,430 | ) | $ | (11,784 | ) | |||||
Amortization of discount | — | — | — | (315 | ) | ||||||||||||
Loan commitment fees | (214 | ) | (220 | ) | (426 | ) | (374 | ) | |||||||||
Amortization of deferred financing costs | (524 | ) | (523 | ) | (1,039 | ) | (1,117 | ) | |||||||||
Interest income | 4 | 17 | 10 | 41 | |||||||||||||
Interest expense, net | $ | (6,447 | ) | $ | (6,431 | ) | $ | (12,885 | ) | $ | (13,549 | ) |
LongTerm_Incentive_Plan
Long-Term Incentive Plan | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Long-Term Incentive Plan [Abstract] | ' | ||||||||
Long-Term Incentive Plan | ' | ||||||||
6. Long-Term Incentive Plan | |||||||||
2012 Long-Term Incentive Plan | |||||||||
Our General Partner adopted the Long-Term Incentive Plan in May 2012. The Long-Term Incentive Plan was intended to promote our interests by providing incentive compensation, based on our common units, to employees, consultants and directors and to encourage superior performance. The Long-Term Incentive Plan provided for grants of restricted units, phantom units, unit awards and other unit-based awards up to a plan maximum of 5,882,352 common units. See Note 10 for additional information. | |||||||||
Unit-based Awards | |||||||||
A unit-based award under the Long-Term Incentive Plan was a phantom unit whose terms and conditions were set by the Long-Term Incentive Plan administrative committee and that generally vested over a period of time and during that time is subject to forfeiture. Our unit-based awards to employees generally vested over a three-year period either annually from the date of grant or upon the third anniversary of the grant date, provided the recipient had continuously provided services to us, our General Partner, or any other of our affiliates. Unit awards to members of our General Partner’s board of directors vested upon the first anniversary of the date of grant. | |||||||||
Certain unit-based awards were eligible for DERs. Absent any restrictions on the DERs in an award agreement, we paid DERs to the holder of the award without restriction at approximately the same time as we paid quarterly cash distributions to our common unitholders. | |||||||||
During the three and six months ended June 30, 2014, we recognized total equity-based compensation expense of approximately $1.2 million and $2.5 million, respectively, related to the unit-based awards ($0.5 million and $1.1 million as cost of sales and $0.7 million and $1.4 million as general and administrative expense for the three and six month periods, respectively). | |||||||||
During the three and six months ended June 30, 2013, we recognized total equity-based compensation expense of approximately $1.2 million and $2.2 million, respectively related to the unit-based awards ($0.5 million and $1.0 million as cost of sales and $0.7 million and $1.2 million as general and administrative expense). | |||||||||
The following table presents activity related to our Long-Term Incentive Plan awards, including those granted to employees during the six months ended June 30, 2014: | |||||||||
Unit-Based Awards | Weighted average | ||||||||
grant date fair value | |||||||||
Awards outstanding December 31, 2013 | 543,774 | $ | 15.14 | ||||||
Awards granted | 212,372 | 12 | |||||||
Awards vested | (172,702 | ) | 16.6 | ||||||
Awards forfeited | (4,091 | ) | 13.65 | ||||||
Awards outstanding June 30, 2014 | 579,353 | $ | 13.55 | ||||||
At June 30, 2014, none of the outstanding unit-based awards were vested. The aggregate intrinsic value of outstanding unit-based awards at June 30, 2014, was approximately $8.3 million. Also at June 30, 2014, total compensation cost related to nonvested employee unit-based awards that had not yet been recognized totaled approximately $6.3 million. The weighted-average period over which this amount will be recognized is approximately 2.2 years. | |||||||||
Upon the closing of the Merger, the outstanding unit-based awards became immediately vested. The New Parent paid holders of the unit-based awards $14.00 per unit, or approximately $8.1 million, in exchange for the rights to the units underlying the unit-based awards. In addition, holders received a one-time cash payment as a DER of $0.40 per common unit for a total of approximately $0.2 million. Upon closing of the Merger, the unit-based awards were cancelled. | |||||||||
The following table presents activity related to our Long-Term Incentive Plan awards granted to employees during the six months ended June 30, 2013: | |||||||||
Unit-Based Awards | Weighted average | ||||||||
grant date fair value | |||||||||
Awards outstanding December 31, 2012 | 845,736 | $ | 15.19 | ||||||
Awards granted | — | — | |||||||
Awards vested | (181,344 | ) | 16.6 | ||||||
Awards forfeited | (10,416 | ) | 16.6 | ||||||
Awards outstanding June 30, 2013 | 653,976 | $ | 14.78 | ||||||
These service-based awards provided for vesting ratably over three years. At June 30, 2013, none of the outstanding unit-based awards were vested. | |||||||||
The following table presents activity related to our Long-Term Incentive Plan awards granted to members of our General Partner’s Board of Directors during the six months ended June 30, 2014: | |||||||||
Unit-Based Awards | Weighted average | ||||||||
grant date fair value | |||||||||
Awards outstanding December 31, 2013 | 23,289 | $ | 12.88 | ||||||
Awards granted | 22,884 | 13.05 | |||||||
Awards vested | (23,289 | ) | 12.88 | ||||||
Awards forfeited | — | — | |||||||
Awards outstanding June 30, 2014 | 22,884 | $ | 13.05 | ||||||
Generally, these awards were to vest on the first anniversary of the grant date. At June 30, 2014, none of the outstanding awards were vested. Upon the closing of the Merger, the outstanding awards immediately vested. In connection with the Merger, the New Parent paid holders of the awards $14.00 per unit, or approximately $0.3 million, in exchange for the rights to the units underlying the awards. In addition, holders received a one-time cash payment as a DER of $0.40 per common unit. Upon closing of the Merger, the awards were cancelled. | |||||||||
The following table presents activity related to our Long-Term Incentive Plan awards granted to members of our General Partner’s Board of Directors during the six months ended June 30, 2013: | |||||||||
Unit-Based Awards | Weighted average | ||||||||
grant date fair value | |||||||||
Awards outstanding December 31, 2012 | 16,182 | $ | 12.36 | ||||||
Awards granted | 15,638 | 12.79 | |||||||
Awards vested | (8,091 | ) | 12.36 | ||||||
Awards forfeited | — | — | |||||||
Awards outstanding June 30, 2013 | 23,729 | $ | 12.64 |
Related_Party_and_Affiliate_Tr
Related Party and Affiliate Transactions | 6 Months Ended |
Jun. 30, 2014 | |
Related Party and Affiliate Transactions [Abstract] | ' |
Related Party and Affiliate Transactions | ' |
7. Related Party and Affiliate Transactions | |
Services Agreement with our General Partner | |
At June 30, 2014, our General Partner provided certain operational, managerial and general administrative services to us. All employees of PL Propylene were employees of our General Partner. We reimbursed the General Partner for all direct and indirect expenses the General Partner incurred or payments the General Partner made on our behalf including, without limitation, salary, bonus, incentive cash compensation and employee benefits. During the three months ended June 30, 2014 and 2013, we incurred fees of $5.8 million and $5.5 million, respectively, under the services agreement with our General Partner. During the six months ended June 30, 2014 and 2013, we incurred fees of $14.2 million and $12.7 million, respectively, under the services agreement. The amounts we paid the General Partner for these services are reported in the consolidated statements of comprehensive income in the line item to which the expense relates. In connection with the GP Merger, this service agreement was terminated. | |
We utilized the services of a company owned by Lindsay Goldberg for facilities maintenance activities. During the six months ended June 30, 2014 and 2013, we paid approximately $1.1 million and $0.8 million, respectively, for these services which are reported in cost of sales. For the three months ended June 30, 2014 and 2013, we paid approximately $0.5 million and $0.4 million, respectively, for these services. |
Concentration_of_Risk
Concentration of Risk | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Concentration of Risk [Abstract] | ' | ||||||||||||||||
Concentration of Risk | ' | ||||||||||||||||
8. Concentration of Risk | |||||||||||||||||
Credit Risk Due to Industry and Customer Concentrations | |||||||||||||||||
All of our revenues are derived from companies in the petrochemical industry, and our principal market is the Texas Gulf Coast region. This concentration could affect our overall exposure to credit risk since these customers may be affected by similar economic or other conditions. Generally, we do not require collateral for our accounts receivable; however, we attempt to negotiate prepayment agreements with customers that are deemed to be credit risks in order to minimize our potential exposure to any defaults. | |||||||||||||||||
The following table presents the concentration of total sales to our largest customers: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Dow Chemical Company (Dow) | 50 | % | 43 | % | 46 | % | 42 | % | |||||||||
Total Petrochemicals USA, Inc. (Total) | 23 | % | 20 | % | 23 | % | 21 | % | |||||||||
INEOS Olefins and Polymers USA (INEOS) | 17 | % | 18 | % | 19 | % | 19 | % | |||||||||
Others (less than 10% individually) | 10 | % | 19 | % | 12 | % | 18 | % | |||||||||
Total sales | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||
At June 30, 2014, we had market-based sales contracts with our propylene customers to provide minimum and maximum annual quantities. See Note 9. These maximum quantities comprise the substantial majority of our facility’s anticipated annual production of propylene. This concentration in the volume of business transacted with a limited number of customers subjects us to substantial risks. The loss of any of the above-named customers without replacement on comparable terms could adversely affect our business, results of operations and financial condition. If we were to lose one or more of our current customers, we would seek to engage in sales transactions with other petrochemical companies on either a long-term contract basis or in the spot market, although there is no assurance we would be able to do so. | |||||||||||||||||
Feedstock Supplier Concentration Risk | |||||||||||||||||
At June 30, 2014, we had long-term market-based contracts for the purchase of propane, our sole feedstock, as well as nitrogen and natural gas. There is only one supplier in each of these contracts. Interruptions in or limitations on volumes provided under these contracts subject us to the risk that we would be unable to meet our production requirements if we were unable to locate and procure replacement volumes from alternate sources. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Commitments and Contingencies [Abstract] | ' | ||||||||||||
Commitments and Contingencies | ' | ||||||||||||
9. Commitments and Contingencies | |||||||||||||
At June 30, 2014, we were obligated under long-term market-based propylene sales agreements to supply our customers with minimum quantities of propylene annually. | |||||||||||||
The following table illustrates certain information regarding our propylene contracts (in millions of pounds): | |||||||||||||
Company | Max | Min | Ends December | ||||||||||
31 | |||||||||||||
Contracts: | |||||||||||||
Dow | 690 | 510 | 2018 | ||||||||||
Total | 300 | 240 | 2017 | ||||||||||
INEOS | 288 | 228 | 2016 | ||||||||||
LyondellBasell Industries N.V. | 60 | 60 | 2014 | ||||||||||
BASF Corporation | 60 | 48 | 2016 | ||||||||||
Total | 1,398 | 1,086 | |||||||||||
Legal Matters | |||||||||||||
We are routinely involved in various legal matters arising from the normal course of business for which no provision has been made in the financial statements. The outcome of these proceedings cannot be predicted with certainty. However, except for the matters described below, we believe that these proceedings, when resolved, will not have a material adverse effect on our results of operations financial position or liquidity. | |||||||||||||
On June 2, 2014, a putative class action complaint by unitholders of PetroLogistics, captioned Klemesrud v. PetroLogistics LP, et al., C.A. No. 9723-VCP, which we refer to as the "Klemesrud Action," was filed in the Court of Chancery of the State of Delaware. Between June 4 and June 25, 2014, two additional putative class action complaints by unitholders of PetroLogistics, captioned Swanson v. PetroLogistics LP, et al., C.A. No. 9737-VCP, which we refer to as the "Swanson Action," and Henry v. PetroLogistics LP, et al., C.A. No. 9759-VCP, which we refer to as the "Henry Action," were filed in the Delaware Court, and three additional putative class action complaints by unitholders of PetroLogistics, captioned Basaraba v. PetroLogistics LP, et al., No. 4:14-cv-1558, which we refer to as the "Basaraba Action," Wolfson v. PetroLogistics LP, et al., No. 4:14-cv-1723, which we refer to as the "Wolfson Action," and Maggi v. Petrologistics, LP, et al., No. 4:14-cv-1786, which we refer to as the “Maggi Action,” were filed in the United States District Court for the Southern District of Texas, Houston Division. Each of the complaints names PetroLogistics and the General Partner, the members of the board of directors of the General Partner, Propylene Holdings LLC, New Parent and Merger Sub as defendants, and the complaints in the Klemesrud Action and the Henry Action also name Koch Industries, Inc. or Koch Industries, LLC as defendants. In each of the complaints, the plaintiffs generally allege that the members of the board of directors of the General Partner breached their duties to the unitholders of PetroLogistics by entering into the Merger Agreement and further allege that the other defendants aided and abetted the alleged breaches of duty by the members of the board of directors of the General Partner. The Henry Action also alleges that the defendants breached the terms of our partnership agreement, and the Wolfson Action and the Maggi Action allege that the defendants violated Sections 14(a) and 20(a) of the Securities and Exchange Act of 1934 by issuing an information statement that omits and/or misrepresents material information concerning the Merger. In each of the complaints, the plaintiffs seek, among other things, to enjoin the Merger and/or money damages. | |||||||||||||
No plaintiff in any of the actions sought injunctive relief before the merger closed. The Company intends to vigorously defend these lawsuits. |
Subsequent_Events
Subsequent Events | 6 Months Ended | ||
Jun. 30, 2014 | |||
Subsequent Events [Abstract] | ' | ||
Subsequent Events | ' | ||
10. Subsequent Events | |||
Merger of PetroLogistics LP with a subsidiary of Flint Hills Resources, LLC | |||
On July 16, 2014, PetroLogistics completed the Merger with FHR Propylene. PetroLogistics was the surviving entity in the Merger and as a result of the Merger became an indirect subsidiary of New Parent. In connection with the Merger, Propylene Holdings also transferred to an indirect subsidiary of New Parent 100% of the issued and outstanding membership interests of the General Partner (the “GP Equity Transfer”). | |||
Upon the closing of Merger and GP Equity Transfer, by virtue of the Merger and without any action on the part of PetroLogistics or the General Partner, (a) each common unit issued and outstanding and owned by holders, other than the Sponsors and the Founding Unitholders (each as defined below) (such holders, the “Public Unitholders”) was cancelled and converted automatically into the right to receive an amount in cash equal to $14.00, without interest and subject to any required withholding taxes (the “Public Merger Consideration”), and (b) each common unit issued and outstanding and beneficially owned by (1) our Sponsors and (2) David Lumpkins, Nathan Ticatch and a related family partnership and family trust (collectively, the “Founding Unitholders”) was cancelled and converted automatically into the right to receive an amount in cash equal to $12.00, without interest and subject to any required withholding taxes, in each case, upon the terms and subject to the conditions set forth in the Merger Agreement. No additional consideration was delivered in exchange for the GP Equity Transfer. | |||
As a result of the Merger, PetroLogistics outstanding common units ceased trading on the New York Stock Exchange. Further, PetroLogistics terminated the registration of its Notes. Under the Indenture governing the Notes, PetroLogistics has a contractual obligation to file reports with the SEC. | |||
In addition, a one-time cash distribution of $0.40 per common unit, payable to the Unitholders of record on the day preceding the closing date of the Merger, was declared and made in accordance with the provisions of the Merger Agreement (the “Merger Related Distribution”). | |||
In addition, in connection with the Merger, each phantom unit granted pursuant to the Long Term Incentive Plan (collectively, the “Phantom Units”) (a) was cancelled and converted into the right to receive from New Parent (through General Partner) an amount of cash equal to the Public Merger Consideration plus the Merger Related Distribution for each Phantom Unit (the “Phantom Unit Consideration”), (b) is no longer outstanding, and (c) ceased to exist. Following the Merger, New Parent caused the General Partner to pay the Phantom Unit Consideration to each holder of Phantom Units, upon the terms and subject to the conditions set forth in the Merger Agreement, in full satisfaction of all rights pertaining to the Phantom Units formerly outstanding. See Note 6 for additional information. | |||
Reorganization Following the Merger | |||
Following the Merger, New Parent affected an internal restructuring, pursuant to which the following transactions were consummated sequentially on July 16, 2014: | |||
1 | the MLP Merger consisting of the merger of PetroLogistics with and into PL Propylene; | ||
2 | the GP Merger consisting of the merger of the General Partner with and into PL Propylene; | ||
3 | PL Propylene amended its certificate of formation to change its name to Flint Hills Resources Houston Chemical, LLC; and | ||
4 | Finance Corp., the co-issuer of the Notes, amended its certificate of incorporation to change its name to FHR Houston Chemical Finance Corp. | ||
FHRHC was the surviving entity in the MLP Merger and the GP Merger and assumed all of the obligations of PetroLogistics and General Partner by operation of law, including SEC reporting obligations. All future SEC reporting obligations with respect to common units of PetroLogistics or the contractual reporting obligations of PetroLogistics with respect to the Notes will be performed by FHRHC. Following the MLP Merger and the GP Merger, FHRHC is an indirect subsidiary of New Parent. | |||
In connection with the GP Merger, our services agreement with the General Partner was cancelled. See Note 7 for additional information. | |||
Agreements Assumed Following the Merger | |||
As a result of the Merger, PetroLogistics assumed certain agreements of FHR Propylene. As a result of the MLP Merger, FHRHC assumed these agreements from PetroLogistics. | |||
Termination of the 2013 Revolving Credit Facility and Assumption of the New Credit Facility. In connection with the Merger, FHR Propylene entered into a $290.0 million unsecured revolving credit facility as the borrower with the lenders party thereto and FHR Liquidity Holdings I, LLC (“FHR Liquidity”), as administrative agent (the “New Credit Facility”). In connection with the Merger, PetroLogistics (as successor by merger to FHR Propylene) assumed the rights and obligations of FHR Propylene under the New Credit Facility. In connection with the MLP Merger, FHRHC (as successor by merger to PetroLogistics) assumed the rights and obligations of PetroLogistics under the New Credit Facility. The New Credit Facility matures on July 1, 2020. The lender under the New Credit Facility is an affiliate of New Parent. The New Credit Facility is pari passu in right of payment with the Notes. | |||
The New Credit Facility accrues interest, at the election of the borrower, at an alternative base rate or based on LIBOR, in each case, plus an applicable margin. In addition, the New Credit Facility also requires FHRHC to pay an unused commitment fee. The New Credit Facility contains customary affirmative and negative covenants and events of default for financings of this type by investment grade borrowers. | |||
Upon completion of the Merger, PetroLogistics caused PL Propylene to terminate the 2013 Revolving Credit Facility. With proceeds of loans borrowed by PetroLogistics under the New Credit Facility, all indebtedness, liabilities and obligations (other than contingent reimbursement and indemnification obligations for which a claim had not been made as of the termination date) were paid in full, and all commitments of the lenders to extend credit under the 2013 Revolving Credit Facility were terminated in full. No prepayment or early termination penalties or premiums were incurred as a result of the termination of the 2013 Revolving Credit Facility. | |||
Demand Note. In connection with the Merger, FHR Propylene received a contribution in the form of a $500.0 million demand note receivable with New Parent (the “Demand Note”), which is payable by New Parent. In connection with the Merger, PetroLogistics (as successor by merger to FHR Propylene) assumed the rights of FHR Propylene under the Demand Note. In connection with the MLP Merger, FHRHC (as successor by merger to PetroLogistics) assumed the rights of PetroLogistics under the Demand Note. FHRHC may call for repayment as needed to pay amounts due to holders of the Notes issued under the Indenture governing the Notes. The New Parent must prepay the Demand Note in each of the following circumstances: | |||
1 | the Demand Note must be prepaid in an aggregate amount equal to any principal or interest payment that FHRHC fails to make on the Notes in accordance with the Indenture if such payment has not been made on the 20th day after FHRHC receives written notice under the Demand Note of such failure from the Trustee (any prepayment required as described in this clause (1) is referred to as a “Default Mandatory Prepayment”); | ||
2 | the Demand Note must be prepaid in full if a major casualty loss occurs and the New Parent elects not to repair or rebuild FHRHC’s facility; and | ||
3 | the Demand Note must be prepaid in the amount of any payment due on the Notes (whether principal, interest, make-whole premium or otherwise) if FHRHC requests such payment. | ||
FHRHC must cause the proceeds of any such prepayment to be applied to the payment of the Notes (the “Note Application Requirement”). The Trustee is a third party beneficiary of the Default Mandatory Prepayment and Note Application Requirement provisions of the Demand Note, entitled to enforce such provisions if FHRHC and New Parent do not comply with the terms of such provisions. | |||
Master Sales Agreement. In connection with the Merger, FHR Propylene entered into a master sales agreement (the “Master Sales Agreement”) with Flint Hills Resources, LP, an affiliate of New Parent (“FHRLP”). In connection with the Merger, PetroLogistics (as successor by merger to FHR Propylene) assumed the rights and obligations of FHR Propylene under the Master Sales Agreement. In connection with the MLP Merger, FHRHC (as successor by merger to PetroLogistics) assumed the rights and obligations of PetroLogistics under the Master Sales Agreement. The Master Sales Agreement effectively obligates FHRLP (1) to supply up to 75% of feedstock requirements of FHRHC or pay FHRHC for its lost production margin and (2) to purchase or pay for 100% of the propylene production of FHRHC, priced at the higher of (a) propylene market price less $0.038 per pound or (b) the propane market price plus $0.15 per pound. | |||
Termination of Indenture Covenants Governing the Notes | |||
Following the Merger, the ratings of the Notes were upgraded by Standard & Poor’s Ratings Services from B to AA- and by Moody’s Investors Service from B2 to A3. As permitted under the terms of the Indenture governing the Notes, FHRHC delivered an officers’ certificate to the trustee under the Indenture terminating substantially all of the covenants under the Indenture, except for the SEC reporting covenant. See Note 5 for additional information. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Basis of Presentation and Principles of Consolidation | ' | ||||||||||||||||
Basis of Presentation and Principles of Consolidation | |||||||||||||||||
The interim consolidated financial statements and notes thereto have been prepared by management without audit according to the rules and regulations of the Securities and Exchange Commission (“SEC”) and reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results for the periods presented. Such adjustments are of a normal recurring nature, unless otherwise disclosed. Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been omitted pursuant to the SEC’s rules and regulations. However, management believes that the disclosures presented herein are adequate to fairly present the information. All inter-company transactions and balances have been eliminated upon consolidation. The accompanying interim consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-K as filed with the SEC on March 7, 2014. The critical accounting policies used in applying U.S. GAAP to the financial statements included in this Report are the critical accounting policies of PetroLogistics prior to the Merger. | |||||||||||||||||
Use of Estimates | ' | ||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of financial statements in conformity with U.S. GAAP 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 date of the financial statements, and the reported amounts of sales and expenses during the reporting periods. We review our estimates on an ongoing basis using currently available information. Changes in facts and circumstances may result in revised estimates, and actual results could differ materially from those estimates. The results of operations of PetroLogistics for any interim period are not necessarily indicative of results for the full year. | |||||||||||||||||
Derivative Instruments | ' | ||||||||||||||||
Derivative Instruments | |||||||||||||||||
Commencing October 2011 and through March 2012, we entered into commodity derivative contracts (the “propane swaps”) with settlement dates in 2012 and 2013 to manage our exposure to commodity price risk with respect to propane, our sole feedstock. The propane swaps were designed to mitigate the risk associated with unfavorable market movements in the price of energy commodities. Our propane swaps were intended to act as a hedging (offset) mechanism against the volatility of energy commodity prices by allowing us to transfer some of the price risk to counterparties who were able and willing to bear it. | |||||||||||||||||
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC” or “Codification”) Topic 815, Derivatives and Hedging (“ASC Topic 815”), addresses the accounting for derivative contracts. We entered into our commodity derivative contracts to economically hedge an exposure through a relationship that did not qualify for hedge accounting under ASC Topic 815. Our derivative contracts were recorded as derivative assets and liabilities, as applicable, at fair value on the consolidated balance sheets, and the associated unrealized gains and losses were recorded as current expense or income in the consolidated statements of comprehensive income. Unrealized gains or losses on commodity derivative contracts represent the non-cash change in the fair value of these derivative instruments and do not impact operating cash flows in the consolidated statements of cash flows. Until settlement occurred, the changes in fair value of the propane swaps resulted in non-cash gains or losses being reported in our operating results as gain or loss on derivatives. | |||||||||||||||||
Omnibus Agreement | ' | ||||||||||||||||
Omnibus Agreement | |||||||||||||||||
On May 9, 2012, the General Partner, PetroLogistics, Propylene Holdings, PL Propylene and PL Manufacturing LLC (“PL Manufacturing”) entered into an omnibus agreement (the “omnibus agreement”). Pursuant to the omnibus agreement and a related pledge agreement (the “pledge agreement”), we allocated all of our benefits and obligations under the propane swaps to PL Manufacturing and the owners of 100% of the issued and outstanding equity interests in PL Manufacturing (the “PL Manufacturing Members”). | |||||||||||||||||
On April 19, 2013, we, PL Manufacturing and the counterparty to the propane swaps agreed to terminate the propane swaps remaining as of May 1, 2013. Under the omnibus agreement and the pledge agreement, any amounts that we were required to pay under the propane swaps were contributed to us as a capital contribution by PL Manufacturing and the PL Manufacturing Members. | |||||||||||||||||
While we did not bear any of the costs nor receive any of the benefits of the propane swaps, we remained a party to the propane swaps and were obligated to make payments to the propane swap counterparties as they came due and to post any collateral as required under the terms of the propane swap agreement. As a result, we continued to record the fair value of the propane swaps on our consolidated balance sheets with the related gains or losses reflected in our consolidated statements of comprehensive income. To the extent that we made payments under the propane swaps, PL Manufacturing and the PL Manufacturing Members were responsible for making quarterly capital contributions in an amount equal to the sum of all payments we made under such propane swaps during the applicable fiscal quarter or that we owed at the end of the quarter. During the six months ended June 30, 2013, we recorded a capital contribution of approximately $22.1 million for the reimbursement of the realized losses on the propane swaps that we incurred in the first quarter of 2013. | |||||||||||||||||
In connection with the termination of the propane swaps, we paid a cancellation payment of $34.4 million in May 2013, of which $5.4 million was reimbursed to us through a reduction in the distribution paid to PL Manufacturing and the PL Manufacturing Members in May 2013 in accordance with the terms of the omnibus agreement. The remaining $29.0 million was settled with cash held as collateral by the propane swap counterparty, and we were immediately reimbursed by PL Manufacturing and the PL Manufacturing Members. We received the final reimbursement for realized losses from PL Manufacturing and the PL Manufacturing Members on August 14, 2013, at which time the omnibus agreement terminated in accordance with its terms. | |||||||||||||||||
Equity-Based Compensation | ' | ||||||||||||||||
Equity-Based Compensation | |||||||||||||||||
We recognize compensation expense related to unit-based awards granted to employees based on the estimated fair value of the awards on the date of grant, net of estimated forfeitures (see Note 6). The grant date fair value of the unit-based awards is generally recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. | |||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
We consider cash and cash equivalents, accounts receivable, accounts payable, accounts receivable-related parties, accounts payable-related parties, and accrued liabilities to be financial instruments in which the carrying amounts represent fair value because of the short-term nature of the accounts. | |||||||||||||||||
Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is determined based on inputs, which refer broadly to assumptions that market participants use in pricing assets or liabilities. These inputs can be readily observable, market corroborated or generally unobservable inputs. We make certain assumptions we believe that market participants would use in pricing assets or liabilities, including assumptions about risk, and the risks inherent in the inputs to valuation techniques. Credit risk of PetroLogistics and its counterparties is incorporated in the valuation of assets and liabilities. We believe we use valuation techniques that maximize the use of observable market-based inputs and minimize the use of unobservable inputs. | |||||||||||||||||
The following table presents the financial instruments that require fair value disclosure as of June 30, 2014: | |||||||||||||||||
Fair Value | |||||||||||||||||
(in thousands) | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Carrying Value | ||||||||||||||
Financial liabilities | |||||||||||||||||
Notes | $ | — | $ | 397,840 | $ | — | $ | 365,000 | |||||||||
The following table presents the financial instruments that require fair value disclosure as of December 31, 2013: | |||||||||||||||||
Fair Value | |||||||||||||||||
(in thousands) | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Carrying Value | ||||||||||||||
Financial liabilities | |||||||||||||||||
Notes | $ | — | $ | 367,401 | $ | — | $ | 365,000 | |||||||||
The Notes are deemed to be Level 2 financial instruments because the fair value is based on observable market data. At June 30, 2014 and December 31, 2013, the fair value of the Notes was determined based on market transactions and external market corroborated data. | |||||||||||||||||
There are no financial instruments that are split across the levels, and there have been no financial instruments that transferred between the levels during the six months ended June 30, 2014. | |||||||||||||||||
Segment Reporting | ' | ||||||||||||||||
Segment Reporting | |||||||||||||||||
We operated in one segment for the production and sale of propylene and related by-products. All of our operations were located in Houston, Texas. | |||||||||||||||||
Net Income Per Common Unit | ' | ||||||||||||||||
Net Income Per Common Unit | |||||||||||||||||
Net income per common unit for a given period is based on the distributions that are made to the unitholders plus an allocation of undistributed net income based on provisions of the partnership agreement, divided by the weighted average number of common units outstanding. The two-class method dictates that net income for a period be reduced by the amount of distributions and that any residual amount representing undistributed net income be allocated to common unitholders and other participating unitholders to the extent that each unit may share in net income as if all of the net income for the period had been distributed in accordance with the partnership agreement. Unit-based awards granted under the PetroLogistics Long-Term Incentive Plan (the “Long-Term Incentive Plan”) were eligible for Distribution Equivalent Rights (“DERs”). To the extent that non-forfeitable DERs are awarded, the underlying nonvested unit-based awards were considered participating securities for purposes of determining net income per unit. Undistributed income was allocated to participating securities based on the proportional relationship of the weighted average number of common units and unit-based awards outstanding. Undistributed losses (including those resulting from distributions in excess of net income) were allocated to common units based on provisions of the partnership agreement. Undistributed losses were not allocated to nonvested unit-based awards as they did not participate in net losses. Distributions declared and paid in the period were treated as distributed earnings in the computation of earnings per common unit even though cash distributions were not necessarily derived from current or prior period earnings. | |||||||||||||||||
The General Partner did not have an economic interest in PetroLogistics and, therefore, did not participate in PetroLogistics’ net income. | |||||||||||||||||
The following table provides a reconciliation of net income and the allocation of net income to the common units and the unit-based awards for purposes of computing net income per unit for the three months ended June 30, 2014 (in thousands, except units and per unit data): | |||||||||||||||||
Limited Partner Units | |||||||||||||||||
Total | Common Units | Long-Term Incentive Plan Unit-Based Awards | |||||||||||||||
Net income | $ | 49,267 | |||||||||||||||
Less: Distributions to unitholders | 51,797 | $ | 51,509 | $ | 288 | ||||||||||||
Assumed allocation of undistributed net loss | $ | (2,530 | ) | $ | (2,530 | ) | $ | — | |||||||||
Weighted average units outstanding | 139,295,615 | 675,849 | |||||||||||||||
Net income per unit: | |||||||||||||||||
Distributed earnings | $ | 0.37 | $ | 0.43 | |||||||||||||
Undistributed net loss allocation | (0.02 | ) | — | ||||||||||||||
Net income per common unit - basic and diluted | $ | 0.35 | $ | 0.43 | |||||||||||||
The following table provides a reconciliation of net income and the allocation of net income to the common units and the unit-based awards for purposes of computing net income per unit for the six months ended June 30, 2014 (in thousands, except units and per unit data): | |||||||||||||||||
Limited Partner Units | |||||||||||||||||
Total | Common Units | Long-Term Incentive Plan Unit-Based Awards | |||||||||||||||
Net income | $ | 95,934 | |||||||||||||||
Less: Distributions to unitholders | 93,795 | $ | 93,273 | $ | 522 | ||||||||||||
Assumed allocation of undistributed net income | $ | 2,139 | $ | 2,127 | $ | 12 | |||||||||||
Weighted average units outstanding | 139,254,405 | 710,929 | |||||||||||||||
Net income per unit: | |||||||||||||||||
Distributed earnings | $ | 0.67 | $ | 0.73 | |||||||||||||
Undistributed net income allocation | 0.02 | 0.02 | |||||||||||||||
Net income per common unit - basic and diluted | $ | 0.69 | $ | 0.75 | |||||||||||||
The following table provides a reconciliation of net income and the allocation of net income to the common units and the unit-based awards for purposes of computing net income per unit for the three months ended June 30, 2013 (in thousands, except units and per unit data): | |||||||||||||||||
Limited Partner Units | |||||||||||||||||
Total | Common Units | Long-Term Incentive Plan Unit-Based Awards | |||||||||||||||
Net income | $ | 41,407 | |||||||||||||||
Less: Distributions to unitholders | 93,704 | $ | 93,135 | $ | 569 | ||||||||||||
Assumed allocation of undistributed net loss | $ | (52,297 | ) | $ | (52,297 | ) | $ | — | |||||||||
Weighted average units outstanding | 139,077,484 | 755,077 | |||||||||||||||
Net income per unit: | |||||||||||||||||
Distributed earnings | $ | 0.67 | $ | 0.75 | |||||||||||||
Undistributed net loss allocation | (0.38 | ) | — | ||||||||||||||
Net income per common unit - basic and diluted | $ | 0.29 | $ | 0.75 | |||||||||||||
The following table provides a reconciliation of net income and the allocation of net income to the common units and the unit-based awards for purposes of computing net income per unit for the six months ended June 30, 2013 (in thousands, except units and per unit data): | |||||||||||||||||
Limited Partner Units | |||||||||||||||||
Total | Common Units | Long-Term Incentive Plan Unit-Based Awards | |||||||||||||||
Net income | $ | 98,484 | |||||||||||||||
Less: Distributions to unitholders | 132,865 | $ | 132,055 | $ | 810 | ||||||||||||
Assumed allocation of undistributed net loss | $ | (34,381 | ) | $ | (34,381 | ) | $ | — | |||||||||
Weighted average units outstanding | 139,038,956 | 806,143 | |||||||||||||||
Net income per unit: | |||||||||||||||||
Distributed earnings | $ | 0.95 | $ | 1 | |||||||||||||
Undistributed net loss allocation | (0.25 | ) | — | ||||||||||||||
Net income per common unit - basic and diluted | $ | 0.7 | $ | 1 | |||||||||||||
Recently Accounting Pronouncements | ' | ||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
In April 2014, the FASB issued Accounting Standard Update (or “ASU”) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360) - Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). Under this amendment, requirements for reporting discontinued operations have changed. Discontinued operations may include disposals of a business, nonprofit activity and component of an entity upon meeting certain other criteria. Disposals representing components of an entity must reflect a strategic shift that has a major effect on the entity's operations and financial results. Previous conditions prohibiting the entity from having significant continuing involvement in the disposal group and requiring the elimination of operations and cash flows from ongoing operations of the entity have been removed. The update is effective on a prospective basis for disposals that occur within annual periods beginning on or after December 15, 2014, and interim periods in those years. We are evaluating the provisions of this statement and have not determined what impact the adoption of ASU 2014-08 will have on our financial position or results of operations. | |||||||||||||||||
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In adopting ASU 2014-09, companies may use either a full retrospective or a modified retrospective approach. ASU 2014-09 is effective for the first interim period within annual reporting periods beginning after December 15, 2016, and early adoption is not permitted. We will adopt ASU 2014-09 during the first quarter of fiscal 2017. We are evaluating the provisions of this statement and have not determined what impact the adoption of ASU 2014-09 will have on our financial position or results of operations. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Financial Instruments | ' | ||||||||||||||||
The following table presents the financial instruments that require fair value disclosure as of June 30, 2014: | |||||||||||||||||
Fair Value | |||||||||||||||||
(in thousands) | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Carrying Value | ||||||||||||||
Financial liabilities | |||||||||||||||||
Notes | $ | — | $ | 397,840 | $ | — | $ | 365,000 | |||||||||
The following table presents the financial instruments that require fair value disclosure as of December 31, 2013: | |||||||||||||||||
Fair Value | |||||||||||||||||
(in thousands) | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Carrying Value | ||||||||||||||
Financial liabilities | |||||||||||||||||
Notes | $ | — | $ | 367,401 | $ | — | $ | 365,000 | |||||||||
Reconciliation of Earnings per Share | ' | ||||||||||||||||
The following table provides a reconciliation of net income and the allocation of net income to the common units and the unit-based awards for purposes of computing net income per unit for the three months ended June 30, 2014 (in thousands, except units and per unit data): | |||||||||||||||||
Limited Partner Units | |||||||||||||||||
Total | Common Units | Long-Term Incentive Plan Unit-Based Awards | |||||||||||||||
Net income | $ | 49,267 | |||||||||||||||
Less: Distributions to unitholders | 51,797 | $ | 51,509 | $ | 288 | ||||||||||||
Assumed allocation of undistributed net loss | $ | (2,530 | ) | $ | (2,530 | ) | $ | — | |||||||||
Weighted average units outstanding | 139,295,615 | 675,849 | |||||||||||||||
Net income per unit: | |||||||||||||||||
Distributed earnings | $ | 0.37 | $ | 0.43 | |||||||||||||
Undistributed net loss allocation | (0.02 | ) | — | ||||||||||||||
Net income per common unit - basic and diluted | $ | 0.35 | $ | 0.43 | |||||||||||||
The following table provides a reconciliation of net income and the allocation of net income to the common units and the unit-based awards for purposes of computing net income per unit for the six months ended June 30, 2014 (in thousands, except units and per unit data): | |||||||||||||||||
Limited Partner Units | |||||||||||||||||
Total | Common Units | Long-Term Incentive Plan Unit-Based Awards | |||||||||||||||
Net income | $ | 95,934 | |||||||||||||||
Less: Distributions to unitholders | 93,795 | $ | 93,273 | $ | 522 | ||||||||||||
Assumed allocation of undistributed net income | $ | 2,139 | $ | 2,127 | $ | 12 | |||||||||||
Weighted average units outstanding | 139,254,405 | 710,929 | |||||||||||||||
Net income per unit: | |||||||||||||||||
Distributed earnings | $ | 0.67 | $ | 0.73 | |||||||||||||
Undistributed net income allocation | 0.02 | 0.02 | |||||||||||||||
Net income per common unit - basic and diluted | $ | 0.69 | $ | 0.75 | |||||||||||||
The following table provides a reconciliation of net income and the allocation of net income to the common units and the unit-based awards for purposes of computing net income per unit for the three months ended June 30, 2013 (in thousands, except units and per unit data): | |||||||||||||||||
Limited Partner Units | |||||||||||||||||
Total | Common Units | Long-Term Incentive Plan Unit-Based Awards | |||||||||||||||
Net income | $ | 41,407 | |||||||||||||||
Less: Distributions to unitholders | 93,704 | $ | 93,135 | $ | 569 | ||||||||||||
Assumed allocation of undistributed net loss | $ | (52,297 | ) | $ | (52,297 | ) | $ | — | |||||||||
Weighted average units outstanding | 139,077,484 | 755,077 | |||||||||||||||
Net income per unit: | |||||||||||||||||
Distributed earnings | $ | 0.67 | $ | 0.75 | |||||||||||||
Undistributed net loss allocation | (0.38 | ) | — | ||||||||||||||
Net income per common unit - basic and diluted | $ | 0.29 | $ | 0.75 | |||||||||||||
The following table provides a reconciliation of net income and the allocation of net income to the common units and the unit-based awards for purposes of computing net income per unit for the six months ended June 30, 2013 (in thousands, except units and per unit data): | |||||||||||||||||
Limited Partner Units | |||||||||||||||||
Total | Common Units | Long-Term Incentive Plan Unit-Based Awards | |||||||||||||||
Net income | $ | 98,484 | |||||||||||||||
Less: Distributions to unitholders | 132,865 | $ | 132,055 | $ | 810 | ||||||||||||
Assumed allocation of undistributed net loss | $ | (34,381 | ) | $ | (34,381 | ) | $ | — | |||||||||
Weighted average units outstanding | 139,038,956 | 806,143 | |||||||||||||||
Net income per unit: | |||||||||||||||||
Distributed earnings | $ | 0.95 | $ | 1 | |||||||||||||
Undistributed net loss allocation | (0.25 | ) | — | ||||||||||||||
Net income per common unit - basic and diluted | $ | 0.7 | $ | 1 |
Inventory_Tables
Inventory (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Inventory [Abstract] | ' | ||||||||
Inventory | ' | ||||||||
Inventory is recorded at the lower of cost or market, with cost determined using the weighted-average method. Inventory consists of the following (in thousands): | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Product inventory | |||||||||
Raw materials | $ | 3,055 | $ | 8,356 | |||||
Work in progress | 1,577 | 1,615 | |||||||
Finished product | 1,198 | 3,014 | |||||||
Total product inventory | 5,830 | 12,985 | |||||||
Maintenance spares | 7,429 | 7,076 | |||||||
Total inventory | $ | 13,259 | $ | 20,061 |
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Derivative Instruments [Abstract] | ' | ||||||||
Loss on Derivative Contracts | ' | ||||||||
The following table summarizes the impact of our derivative contracts on our accompanying consolidated statements of comprehensive income (in thousands): | |||||||||
Net Gain Recognized in Statement of Comprehensive Income | |||||||||
Derivatives Not Designated as Hedging Contracts | Three Months Ended | Six Months Ended | |||||||
30-Jun-13 | 30-Jun-13 | ||||||||
Realized loss on propane swaps | $ | 39,223 | $ | 61,353 | |||||
Unrealized gain on propane swaps | 44,661 | 63,053 | |||||||
Propane swaps | $ | 5,438 | $ | 1,700 | |||||
Total net gain on derivatives | $ | 5,438 | $ | 1,700 |
Debt_Tables
Debt (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Debt [Abstract] | ' | ||||||||||||||||
Redemption Prices as Percentage of Principal | ' | ||||||||||||||||
Amortization and Final Maturity. The Notes have a maturity date of April 1, 2020. Prior to April 1, 2016, we may redeem all or part of the senior notes at a redemption price equal to the sum of 100% of the principal amount of the Notes, plus a “make-whole” premium, plus accrued and unpaid interest, if any, to the date of redemption. We may also redeem some or all of the Notes on or after April 1, 2016, at the redemption prices (expressed as percentages of principal) set forth below, plus accrued and unpaid interest, if any, on the Notes redeemed to the applicable redemption date. | |||||||||||||||||
Year | Percentage | ||||||||||||||||
2016 | 103.125 | ||||||||||||||||
2017 | 101.563 | ||||||||||||||||
2018 and thereafter | 100 | ||||||||||||||||
Interest Expense, Net | ' | ||||||||||||||||
Interest expense, net consists of the following (in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Interest expense incurred on borrowings | $ | (5,713 | ) | $ | (5,705 | ) | $ | (11,430 | ) | $ | (11,784 | ) | |||||
Amortization of discount | — | — | — | (315 | ) | ||||||||||||
Loan commitment fees | (214 | ) | (220 | ) | (426 | ) | (374 | ) | |||||||||
Amortization of deferred financing costs | (524 | ) | (523 | ) | (1,039 | ) | (1,117 | ) | |||||||||
Interest income | 4 | 17 | 10 | 41 | |||||||||||||
Interest expense, net | $ | (6,447 | ) | $ | (6,431 | ) | $ | (12,885 | ) | $ | (13,549 | ) |
LongTerm_Incentive_Plan_Tables
Long-Term Incentive Plan (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Employees [Member] | ' | ||||||||
Long-term incentive plan | ' | ||||||||
Activity Related to Long-Term Incentive Plan Awards | ' | ||||||||
The following table presents activity related to our Long-Term Incentive Plan awards, including those granted to employees during the six months ended June 30, 2014: | |||||||||
Unit-Based Awards | Weighted average | ||||||||
grant date fair value | |||||||||
Awards outstanding December 31, 2013 | 543,774 | $ | 15.14 | ||||||
Awards granted | 212,372 | 12 | |||||||
Awards vested | (172,702 | ) | 16.6 | ||||||
Awards forfeited | (4,091 | ) | 13.65 | ||||||
Awards outstanding June 30, 2014 | 579,353 | $ | 13.55 | ||||||
The following table presents activity related to our Long-Term Incentive Plan awards granted to employees during the six months ended June 30, 2013: | |||||||||
Unit-Based Awards | Weighted average | ||||||||
grant date fair value | |||||||||
Awards outstanding December 31, 2012 | 845,736 | $ | 15.19 | ||||||
Awards granted | — | — | |||||||
Awards vested | (181,344 | ) | 16.6 | ||||||
Awards forfeited | (10,416 | ) | 16.6 | ||||||
Awards outstanding June 30, 2013 | 653,976 | $ | 14.78 | ||||||
Members of General Partner's Board of Directors [Member] | ' | ||||||||
Long-term incentive plan | ' | ||||||||
Activity Related to Long-Term Incentive Plan Awards | ' | ||||||||
The following table presents activity related to our Long-Term Incentive Plan awards granted to members of our General Partner’s Board of Directors during the six months ended June 30, 2014: | |||||||||
Unit-Based Awards | Weighted average | ||||||||
grant date fair value | |||||||||
Awards outstanding December 31, 2013 | 23,289 | $ | 12.88 | ||||||
Awards granted | 22,884 | 13.05 | |||||||
Awards vested | (23,289 | ) | 12.88 | ||||||
Awards forfeited | — | — | |||||||
Awards outstanding June 30, 2014 | 22,884 | $ | 13.05 | ||||||
The following table presents activity related to our Long-Term Incentive Plan awards granted to members of our General Partner’s Board of Directors during the six months ended June 30, 2013: | |||||||||
Unit-Based Awards | Weighted average | ||||||||
grant date fair value | |||||||||
Awards outstanding December 31, 2012 | 16,182 | $ | 12.36 | ||||||
Awards granted | 15,638 | 12.79 | |||||||
Awards vested | (8,091 | ) | 12.36 | ||||||
Awards forfeited | — | — | |||||||
Awards outstanding June 30, 2013 | 23,729 | $ | 12.64 |
Concentration_of_Risk_Tables
Concentration of Risk (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Concentration of Risk [Abstract] | ' | ||||||||||||||||
Total Sales to Largest Customers | ' | ||||||||||||||||
The following table presents the concentration of total sales to our largest customers: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Dow Chemical Company (Dow) | 50 | % | 43 | % | 46 | % | 42 | % | |||||||||
Total Petrochemicals USA, Inc. (Total) | 23 | % | 20 | % | 23 | % | 21 | % | |||||||||
INEOS Olefins and Polymers USA (INEOS) | 17 | % | 18 | % | 19 | % | 19 | % | |||||||||
Others (less than 10% individually) | 10 | % | 19 | % | 12 | % | 18 | % | |||||||||
Total sales | 100 | % | 100 | % | 100 | % | 100 | % |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Commitments and Contingencies [Abstract] | ' | ||||||||||||
Information Regarding Propylene Contracts | ' | ||||||||||||
The following table illustrates certain information regarding our propylene contracts (in millions of pounds): | |||||||||||||
Company | Max | Min | Ends December | ||||||||||
31 | |||||||||||||
Contracts: | |||||||||||||
Dow | 690 | 510 | 2018 | ||||||||||
Total | 300 | 240 | 2017 | ||||||||||
INEOS | 288 | 228 | 2016 | ||||||||||
LyondellBasell Industries N.V. | 60 | 60 | 2014 | ||||||||||
BASF Corporation | 60 | 48 | 2016 | ||||||||||
Total | 1,398 | 1,086 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 1 Months Ended | 6 Months Ended | |
In Millions, unless otherwise specified | 31-May-12 | Jun. 30, 2014 | Jun. 30, 2013 |
PL Propylene [Member] | |||
Omnibus Agreement [Abstract] | ' | ' | ' |
Owners' percentage of issued and outstanding equity interests in PL Manufacturing (in hundredths) | 100.00% | ' | ' |
Contribution to the partnership by PL Manufacturing and the PL Manufacturing Members | ' | ' | $22.10 |
Cancellation payment to counterparty for termination of transaction | ' | 34.4 | ' |
Remaining cancellation payment to counterparty | ' | 5.4 | ' |
Cash deposited with the counterparty | ' | $29 | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies, Fair Value of Financial Instruments (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value [Member] | Level 1 [Member] | ' | ' |
Financial liabilities [Abstract] | ' | ' |
Notes | $0 | $0 |
Fair Value [Member] | Level 2 [Member] | ' | ' |
Financial liabilities [Abstract] | ' | ' |
Notes | 397,840 | 367,401 |
Fair Value [Member] | Level 3 [Member] | ' | ' |
Financial liabilities [Abstract] | ' | ' |
Notes | 0 | 0 |
Carrying Value [Member] | ' | ' |
Financial liabilities [Abstract] | ' | ' |
Notes | $365,000 | $365,000 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies, Net Income Per Common Unit (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Net Income Per Common Unit | ' | ' | ' | ' |
Net income | $49,267 | $41,407 | $95,934 | $98,484 |
Less: Distribution to unitholders | 51,797 | 93,704 | 93,795 | 132,865 |
Assumed allocation of undistributed net loss | -2,530 | -52,297 | 2,139 | -34,381 |
Weighted average units outstanding (in units) | 139,295,615 | 139,077,484 | 139,254,405 | 139,038,956 |
Net income per unit: [Abstract] | ' | ' | ' | ' |
Net income per common unit - basic and diluted (in dollars per unit) | $0.35 | $0.29 | $0.69 | $0.70 |
Common Units [Member] | ' | ' | ' | ' |
Net Income Per Common Unit | ' | ' | ' | ' |
Less: Distribution to unitholders | 51,509 | 93,135 | 93,273 | 132,055 |
Assumed allocation of undistributed net loss | -2,530 | -52,297 | 2,127 | -34,381 |
Weighted average units outstanding (in units) | 139,295,615 | 139,077,484 | 139,254,405 | 139,038,956 |
Net income per unit: [Abstract] | ' | ' | ' | ' |
Distributed earnings (in dollars per unit) | $0.37 | $0.67 | $0.67 | $0.95 |
Undistributed net loss allocation (in dollars per unit) | ($0.02) | ($0.38) | $0.02 | ($0.25) |
Net income per common unit - basic and diluted (in dollars per unit) | $0.35 | $0.29 | $0.69 | $0.70 |
Long-Term Incentive Plan Unit-Based Awards [Member] | ' | ' | ' | ' |
Net Income Per Common Unit | ' | ' | ' | ' |
Less: Distribution to unitholders | 288 | 522 | 522 | 810 |
Assumed allocation of undistributed net loss | $0 | $12 | $12 | $0 |
Weighted average units outstanding (in units) | 675,849 | 710,929 | 710,929 | 806,143 |
Net income per unit: [Abstract] | ' | ' | ' | ' |
Distributed earnings (in dollars per unit) | $0.43 | $0.75 | $0.73 | $1 |
Undistributed net loss allocation (in dollars per unit) | $0 | $0 | $0.02 | $0 |
Net income per common unit - basic and diluted (in dollars per unit) | $0.43 | $0.75 | $0.75 | $1 |
Inventory_Details
Inventory (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
lb | ||
Inventory [Abstract] | ' | ' |
Product inventory, Raw materials | $3,055 | $8,356 |
Product inventory, Work in progress | 1,577 | 1,615 |
Product inventory, Finished product | 1,198 | 3,014 |
Total product inventory | 5,830 | 12,985 |
Maintenance spares | 7,429 | 7,076 |
Total inventory | $13,259 | $20,061 |
Storage capacity (in pounds) | 95,000,000 | ' |
Derivative_Instruments_Details
Derivative Instruments (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Effect of derivative contracts on accompanying statements of comprehensive income (loss) | ' | ' | ' | ' |
Realized loss on propane swaps | ' | $39,223 | ' | $61,353 |
Unrealized gain on propane swaps | ' | 44,661 | ' | 63,053 |
Total net gain on derivatives | 0 | 5,438 | 0 | 1,700 |
Propane swaps [Member] | ' | ' | ' | ' |
Effect of derivative contracts on accompanying statements of comprehensive income (loss) | ' | ' | ' | ' |
Unrealized gain on propane swaps | ' | $5,438 | ' | $1,700 |
Debt_Details
Debt (Details) (2012 Credit Facilities [Member], PL Propylene [Member], USD $) | Mar. 27, 2012 |
In Millions, unless otherwise specified | |
Revolving credit facility [Member] | ' |
Debt [Abstract] | ' |
Maximum capacity available | $120 |
Term loan facility [Member] | ' |
Debt [Abstract] | ' |
Face amount | $350 |
Debt_Credit_Facilities_Details
Debt, Credit Facilities (Details) (USD $) | 3 Months Ended | 6 Months Ended | 6 Months Ended | 3 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | 3 Months Ended | |||||||||||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Mar. 27, 2012 | Mar. 31, 2012 | Mar. 27, 2012 | Mar. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2012 | Mar. 31, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | |
2012 Credit Facilities [Member] | 2012 Credit Facilities [Member] | 2012 Credit Facilities [Member] | 2012 Credit Facilities [Member] | 2012 Credit Facilities [Member] | 2012 Credit Facilities [Member] | 2012 Credit Facilities [Member] | 2012 Credit Facilities [Member] | 2013 Credit Facilities [Member] | 2013 Credit Facilities [Member] | 2013 Credit Facilities [Member] | 2013 Credit Facilities [Member] | 2013 Credit Facilities [Member] | 2013 Credit Facilities [Member] | 2013 Credit Facilities [Member] | 2013 Credit Facilities [Member] | 2013 Credit Facilities [Member] | 2013 Credit Facilities [Member] | 2013 Credit Facilities [Member] | 2013 Credit Facilities [Member] | 2013 Credit Facilities [Member] | 2013 Credit Facilities [Member] | ||||||
Alternate Base Rate [Member] | Alternate Base Rate [Member] | LIBOR [Member] | Term loan facility [Member] | Term loan facility [Member] | Term loan facility [Member] | Revolving credit facility [Member] | Alternate Base Rate [Member] | LIBOR [Member] | Prime rate [Member] | Federal funds effective base rate [Member] | Term loan facility [Member] | Revolving credit facility [Member] | Revolving credit facility [Member] | Revolving credit facility [Member] | Revolving credit facility [Member] | Revolving credit facility [Member] | Senior unsecured notes [Member] | Senior unsecured notes [Member] | Senior unsecured notes [Member] | ||||||||
LIBOR [Member] | Three month LIBOR [Member] | Three month LIBOR [Member] | Minimum [Member] | Maximum [Member] | PL Propylene and its wholly owned subsidiary PetroLogistics Finance Corp [Member] | ||||||||||||||||||||||
Maximum [Member] | |||||||||||||||||||||||||||
Interest Rate and Fee [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Description of variable rate | ' | ' | ' | ' | ' | ' | ' | 'Alternate Base Rate | 'LIBOR | 'LIBOR | ' | ' | ' | ' | 'Alternate Base Rate | 'LIBOR | 'Prime Rate | 'Federal funds | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate, variable interest rate floor (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on variable rate (in hundredths) | ' | ' | ' | ' | ' | ' | 4.75% | ' | 5.75% | ' | ' | ' | ' | ' | 2.00% | 3.00% | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective interest rate (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment fee (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' |
Applicable fronting fee to lenders participating in any letter of credit (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.13% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Applicable participation fee to lenders participating in LIBOR loans (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capped interest rate (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Portion of term loan capped | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $115,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 365,000,000 |
Maximum capacity available | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 170,000,000 | ' | ' | ' | ' | ' |
Deferred Financing Costs-Cash Portion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,300,000 | ' | ' |
Repayment of all borrowings outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 347,400,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' |
Transaction fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' |
Third party transaction costs paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,300,000 | ' | ' |
Par value of long-term debt | 365,000,000 | ' | 365,000,000 | ' | 365,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 365,000,000 | 365,000,000 | ' |
Deferred financing costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,000,000 | ' | ' |
Deferred Financing Costs-Noncash Portion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior Secured Leverage Ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' |
Covenant borrowing threshold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 120,000,000 | ' | ' | ' | ' |
Fixed interest rate (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.25% | ' | ' |
Maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 28-Mar-18 | ' | ' | ' | ' | 1-Apr-20 | ' | ' |
Loss on extinguishment of debt | 0 | 0 | 0 | -20,446,000 | ' | 20,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Write off of unamortized deferred financing costs | ' | ' | ' | ' | ' | 7,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Write off of unamortized original issue discount | ' | ' | ' | ' | ' | 5,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment of call premium and costs associated with the cancellation of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6,900,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt_Loss_on_Extinguishment_of
Debt, Loss on Extinguishment of Debt (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Interest expense, net [Abstract] | ' | ' | ' | ' |
Interest expense incurred on borrowings | ($5,713) | ($5,705) | ($11,430) | ($11,784) |
Amortization of discount | 0 | 0 | 0 | -315 |
Loan commitment fees | -214 | -220 | -426 | -374 |
Amortization of deferred financing costs | -524 | -523 | -1,039 | -1,117 |
Interest income | 4 | 17 | 10 | 41 |
Interest expense, net | ($6,447) | ($6,431) | ($12,885) | ($13,549) |
2016 [Member] | ' | ' | ' | ' |
Redemption prices (expressed as percentages of principal), plus accrued and unpaid interest, if any, on the notes redeemed to the applicable redemption date | ' | ' | ' | ' |
Redemption price (in hundredths) | ' | ' | 103.13% | ' |
2017 [Member] | ' | ' | ' | ' |
Redemption prices (expressed as percentages of principal), plus accrued and unpaid interest, if any, on the notes redeemed to the applicable redemption date | ' | ' | ' | ' |
Redemption price (in hundredths) | ' | ' | 101.56% | ' |
2018 and thereafter [Member] | ' | ' | ' | ' |
Redemption prices (expressed as percentages of principal), plus accrued and unpaid interest, if any, on the notes redeemed to the applicable redemption date | ' | ' | ' | ' |
Redemption price (in hundredths) | ' | ' | 100.00% | ' |
LongTerm_Incentive_Plan_Detail
Long-Term Incentive Plan (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Long-term incentive plan | ' | ' | ' | ' |
Equity-based compensation expense | ' | ' | $2,488,000 | $2,249,000 |
2012 Long-Term Incentive Plan [Member] | ' | ' | ' | ' |
Long-term incentive plan | ' | ' | ' | ' |
Maximum number of restricted units, phantom units, unit awards and other unit-based awards that can be granted (in units) | 5,882,352 | ' | 5,882,352 | ' |
2012 Long-Term Incentive Plan [Member] | Unit-Based Awards [Member] | ' | ' | ' | ' |
Long-term incentive plan | ' | ' | ' | ' |
Vesting period | ' | ' | '3 years | ' |
Equity-based compensation expense | 1,200,000 | 1,200,000 | 2,500,000 | 2,200,000 |
2012 Long-Term Incentive Plan [Member] | Unit-Based Awards [Member] | Employees [Member] | ' | ' | ' | ' |
Unit-Based Awards [Abstract] | ' | ' | ' | ' |
Awards outstanding at the beginning of the period (in units) | ' | ' | 543,774 | 845,736 |
Awards granted (in units) | ' | ' | 212,372 | 0 |
Awards vested (in units) | ' | ' | -172,702 | -181,344 |
Awards forfeited (in units) | ' | ' | -4,091 | -10,416 |
Awards outstanding at the end of the period (in units) | 579,353 | 653,976 | 579,353 | 653,976 |
Weighted average grant date fair value [Abstract] | ' | ' | ' | ' |
Awards outstanding at the beginning of the period (in dollars per unit) | ' | ' | $15.14 | $15.19 |
Awards granted (in dollars per unit) | ' | ' | $12 | $0 |
Awards vested (in dollars per unit) | ' | ' | $16.60 | $16.60 |
Awards forfeited (in dollars per unit) | ' | ' | $13.65 | $16.60 |
Awards outstanding at the end of the period (in dollars per unit) | $13.55 | $14.78 | $13.55 | $14.78 |
Additional disclosures [Abstract] | ' | ' | ' | ' |
Aggregate intrinsic value | 8,300,000 | ' | 8,300,000 | ' |
Total compensation cost related to nonvested awards that had not yet been recognized | 6,300,000 | ' | 6,300,000 | ' |
Weighted-average period over which unrecognized compensation cost related to nonvested awards will be recognized | ' | ' | '2 years 2 months 12 days | ' |
Unit-based awards pay per unit (in dollars per unit) | $14 | ' | $14 | ' |
Amount payable to unit-based awards | 8,100,000 | ' | 8,100,000 | ' |
Unit-based awards pay per unit as a DER (in dollars per share) | $0.40 | ' | $0.40 | ' |
Amount payable to unit-based awards as a DER | 200,000 | ' | 200,000 | ' |
2012 Long-Term Incentive Plan [Member] | Unit-Based Awards [Member] | Members of General Partner's Board of Directors [Member] | ' | ' | ' | ' |
Long-term incentive plan | ' | ' | ' | ' |
Vesting period | ' | ' | '1 year | ' |
Unit-Based Awards [Abstract] | ' | ' | ' | ' |
Awards outstanding at the beginning of the period (in units) | ' | ' | 23,289 | 16,182 |
Awards granted (in units) | ' | ' | 22,884 | 15,638 |
Awards vested (in units) | ' | ' | -23,289 | -8,091 |
Awards forfeited (in units) | ' | ' | 0 | 0 |
Awards outstanding at the end of the period (in units) | 22,884 | 23,729 | 22,884 | 23,729 |
Weighted average grant date fair value [Abstract] | ' | ' | ' | ' |
Awards outstanding at the beginning of the period (in dollars per unit) | ' | ' | $12.88 | $12.36 |
Awards granted (in dollars per unit) | ' | ' | $13.05 | $12.79 |
Awards vested (in dollars per unit) | ' | ' | $12.88 | $12.36 |
Awards forfeited (in dollars per unit) | ' | ' | $0 | $0 |
Awards outstanding at the end of the period (in dollars per unit) | $13.05 | $12.64 | $13.05 | $12.64 |
Additional disclosures [Abstract] | ' | ' | ' | ' |
Unit-based awards pay per unit (in dollars per unit) | $14 | ' | $14 | ' |
Amount payable to unit-based awards | 300,000 | ' | 300,000 | ' |
Unit-based awards pay per unit as a DER (in dollars per share) | $0.40 | ' | $0.40 | ' |
2012 Long-Term Incentive Plan [Member] | Unit-Based Awards [Member] | Cost of sales [Member] | ' | ' | ' | ' |
Long-term incentive plan | ' | ' | ' | ' |
Equity-based compensation expense | 500,000 | 500,000 | 1,100,000 | 1,000,000 |
2012 Long-Term Incentive Plan [Member] | Unit-Based Awards [Member] | General and administrative expense [Member] | ' | ' | ' | ' |
Long-term incentive plan | ' | ' | ' | ' |
Equity-based compensation expense | $700,000 | $700,000 | $1,400,000 | $1,200,000 |
Related_Party_and_Affiliate_Tr1
Related Party and Affiliate Transactions (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Affiliates of Lindsay Goldberg [Member] | ' | ' | ' | ' |
Related party and affiliate transactions [Line Items] | ' | ' | ' | ' |
Services utilized in connection with facility maintenance activities | $0.50 | $0.40 | $1.10 | $0.80 |
General Partner [Member] | ' | ' | ' | ' |
Related party and affiliate transactions [Line Items] | ' | ' | ' | ' |
Related Party Transaction, Service Fees | $5.80 | $5.50 | $14.20 | $12.70 |
Concentration_of_Risk_Details
Concentration of Risk (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Sales [Member] | Customer concentration risk [Member] | ' | ' | ' | ' |
Concentration of risk | ' | ' | ' | ' |
Concentration risk (in hundredths)) | 100.00% | 100.00% | 100.00% | 100.00% |
Sales [Member] | Customer concentration risk [Member] | Dow Chemical Company (Dow) [Member] | ' | ' | ' | ' |
Concentration of risk | ' | ' | ' | ' |
Concentration risk (in hundredths)) | 50.00% | 43.00% | 46.00% | 42.00% |
Sales [Member] | Customer concentration risk [Member] | Total Petrochemicals USA, Inc. (Total) [Member] | ' | ' | ' | ' |
Concentration of risk | ' | ' | ' | ' |
Concentration risk (in hundredths)) | 23.00% | 20.00% | 23.00% | 21.00% |
Sales [Member] | Customer concentration risk [Member] | INEOS Olefins and Polymers USA (INEOS) [Member] | ' | ' | ' | ' |
Concentration of risk | ' | ' | ' | ' |
Concentration risk (in hundredths)) | 17.00% | 18.00% | 19.00% | 19.00% |
Sales [Member] | Customer concentration risk [Member] | Others (less than 10% individually) [Member] | ' | ' | ' | ' |
Concentration of risk | ' | ' | ' | ' |
Concentration risk (in hundredths)) | 10.00% | 19.00% | 12.00% | 18.00% |
Purchase of propane [Member] | Supplier concentration risk [Member] | ' | ' | ' | ' |
Concentration of risk | ' | ' | ' | ' |
Number of suppliers | ' | ' | 1 | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) | 1 Months Ended | |||||||||||||
Jun. 25, 2014 | Jun. 25, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
Swanson Action [Member] | Basaraba Action [Member] | Long-term market-based propylene sales agreements [Member] | Long-term market-based propylene sales agreements [Member] | Long-term market-based propylene sales agreements [Member] | Long-term market-based propylene sales agreements [Member] | Long-term market-based propylene sales agreements [Member] | Long-term market-based propylene sales agreements [Member] | Long-term market-based propylene sales agreements [Member] | Long-term market-based propylene sales agreements [Member] | Long-term market-based propylene sales agreements [Member] | Long-term market-based propylene sales agreements [Member] | Long-term market-based propylene sales agreements [Member] | Long-term market-based propylene sales agreements [Member] | |
Complaint | Complaint | Maximum [Member] | Minimum [Member] | Dow [Member] | Dow [Member] | Total [Member] | Total [Member] | INEOS [Member] | INEOS [Member] | LyondellBasell Industries N.V. [Member] | LyondellBasell Industries N.V. [Member] | BASF Corporation [Member] | BASF Corporation [Member] | |
lb | lb | Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | |||
lb | lb | lb | lb | lb | lb | lb | lb | lb | lb | |||||
Commitments and contingencies | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quantities of propylene to be supplied annually (in pounds) | ' | ' | 1,398,000,000 | 1,086,000,000 | 690,000,000 | 510,000,000 | 300,000,000 | 240,000,000 | 288,000,000 | 228,000,000 | 60,000,000 | 60,000,000 | 60,000,000 | 48,000,000 |
Additional putative class action complaints | 2 | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 0 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Jul. 16, 2014 |
Supply Commitment (1) [Member] | ' |
Subsequent Event [Line Items] | ' |
Feed stocks requirement percentage (in hundredths) | 75.00% |
Feed stocks market adjustment (in dollars per share) | 0.038 |
Supply Commitment (2) [Member] | ' |
Subsequent Event [Line Items] | ' |
Feed stocks requirement percentage (in hundredths) | 100.00% |
Feed stocks market adjustment (in dollars per share) | 0.15 |
Unsecured Revolving Credit Facility [Member] | ' |
Subsequent Event [Line Items] | ' |
Maximum capacity available | $290 |
Maturity date | 1-Jul-20 |
Demand Note [Member] | ' |
Subsequent Event [Line Items] | ' |
Contribution amount | $500 |
Subsequent Events [Member] | ' |
Subsequent Event [Line Items] | ' |
Equity transferred to indirect subsidiary | 100.00% |
Unit-based awards pay per unit | $0.40 |
Subsequent Events [Member] | Public Unitholders [Member] | ' |
Subsequent Event [Line Items] | ' |
Unit-based awards pay per unit | $14 |
Subsequent Events [Member] | Founding Unitholders [Member] | ' |
Subsequent Event [Line Items] | ' |
Unit-based awards pay per unit | $12 |