Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Mar. 24, 2015 |
Document And Entity Information [Line Items] | ||
Document Type | 10-K | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Dec-14 | |
Document Fiscal Year Focus | 2014 | |
Document Fiscal Period Focus | FY | |
Trading Symbol | SHLX | |
Entity Registrant Name | Shell Midstream Partners, L.P. | |
Entity Central Index Key | 1610466 | |
Current Fiscal Year End Date | -19 | |
Entity Well-known Seasoned Issuer | No | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Public Float | $1,882 | |
Common Units | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 67,457,068 | |
Subordinated Units | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 67,457,068 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents | $150.20 | $0 |
Accounts receivable - third parties, net | 16.3 | 4.8 |
Accounts receivable - related parties | 10.3 | 11.9 |
Allowance oil | 3.4 | 10 |
Prepaid expenses | 3.6 | 2 |
Total current assets | 183.8 | 28.7 |
Equity method investments | 160.7 | 0 |
Property, plant and equipment, net | 275 | 223.5 |
Other assets | 4.2 | 0 |
Total assets | 623.7 | 252.2 |
Current liabilities | ||
Accounts payable - third parties | 0 | 8.4 |
Accounts payable - related parties | 10.6 | 0 |
Distribution payable to SPLC | 11.9 | 0 |
Deferred revenue - third parties | 15.3 | 0 |
Deferred revenue - related parties | 4.7 | 0 |
Accrued liabilities - third parties | 0.9 | 29.3 |
Accrued liabilities - related parties | 1.4 | 0 |
Total current liabilities | 44.8 | 37.7 |
Total liabilities | 44.8 | 37.7 |
Commitments and Contingencies (Note 12) | ||
EQUITY | ||
Total partners' capital | 417 | 0 |
Noncontrolling interest | 161.9 | 0 |
Net parent investment | 0 | 214.5 |
Total equity | 578.9 | 214.5 |
Total liabilities and equity | 623.7 | 252.2 |
Shell Pipeline Company L P | ||
EQUITY | ||
General Partner - SPLC (2,754,084 units issued and outstanding) | -18 | 0 |
Common Units | General Public | ||
EQUITY | ||
Limited partner unitholder | 1,016.20 | 0 |
Common Units | Shell Pipeline Company L P | ||
EQUITY | ||
Limited partner unitholder | -140.3 | 0 |
Subordinated Units | Shell Pipeline Company L P | ||
EQUITY | ||
Limited partner unitholder | -440.9 | 0 |
Total equity | ($440.90) |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Dec. 31, 2014 | Dec. 31, 2013 |
Shell Pipeline Company L P | ||
General partners' capital account, units issued | 2,754,084 | 0 |
General partners' capital account, units outstanding | 2,754,084 | 0 |
Common unitholder | General Public | ||
Limited partners' capital account, units issued | 46,000,000 | 0 |
Limited partners' capital account, units outstanding | 46,000,000 | 0 |
Common unitholder | Shell Pipeline Company L P | ||
Limited partners' capital account, units issued | 21,475,068 | 0 |
Limited partners' capital account, units outstanding | 21,475,068 | 0 |
Subordinated Units | Shell Pipeline Company L P | ||
Limited partners' capital account, units issued | 67,475,068 | 0 |
Limited partners' capital account, units outstanding | 67,475,068 | 0 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue | |||
Third parties | $136.90 | $45.60 | $56.40 |
Related parties | 45.5 | 48.7 | 58.4 |
Total revenue | 182.4 | 94.3 | 114.8 |
Costs and expenses | |||
Operations and maintenance - third parties | 31 | 37.2 | 30.9 |
Operations and maintenance - related parties | 16 | 14.9 | 15.1 |
Loss (gain) from disposition of fixed assets | 0.2 | -20.8 | 1.2 |
General and administrative - third parties | 3.2 | 1.1 | 0.4 |
General and administrative - related parties | 13.6 | 11.1 | 10 |
Depreciation | 11.6 | 6.9 | 5.8 |
Property and other taxes | 5.5 | 4.5 | 4.3 |
Total costs and expenses | 81.1 | 54.9 | 67.7 |
Operating income | 101.3 | 39.4 | 47.1 |
Income from equity investments | 6.7 | 0 | 0 |
Dividend income from investment | 0.8 | 0 | 0 |
Income from other investments | 7.5 | 0 | 0 |
Interest expense, net | 0.2 | 0 | 0 |
Income before income taxes | 108.6 | 39.4 | 47.1 |
Income tax expense | 0.2 | 0.1 | 0.1 |
Net income | 108.4 | 39.3 | 47 |
Less: Predecessor income prior to the Offering on November 3, 2014 | 83.6 | ||
Net income subsequent to the Offering | 24.8 | ||
Less: Net income attributable to noncontrolling interests | 11.4 | ||
Net income attributable to Shell Midstream Partners, L.P. | $13.40 | ||
Net income subsequent to the Offering per Limited Partner Unit - Basic and Diluted (in dollars): | |||
Cash distribution paid per unit (in dollars): | $0.10 | ||
Common Units | |||
Net income subsequent to the Offering per Limited Partner Unit - Basic and Diluted (in dollars): | |||
Net income subsequent to the Offering per limited partner unit - Basic | $0.10 | ||
Net income subsequent to the Offering per limited partner unit - Diluted | $0.10 | ||
Common Units | Shell Pipeline Company L P | |||
Weighted average Limited Partner Units outstanding - Basic and Diluted (in millions): | |||
Weighted average limited partner units | 21.5 | ||
Subordinated Units | |||
Net income subsequent to the Offering per Limited Partner Unit - Basic and Diluted (in dollars): | |||
Net income subsequent to the Offering per limited partner unit - Basic | $0.10 | ||
Net income subsequent to the Offering per limited partner unit - Diluted | $0.10 | ||
Subordinated Units | Shell Pipeline Company L P | |||
Weighted average Limited Partner Units outstanding - Basic and Diluted (in millions): | |||
Weighted average limited partner units | 67.5 | ||
Common unitholders - public | |||
Weighted average Limited Partner Units outstanding - Basic and Diluted (in millions): | |||
Weighted average limited partner units | 46 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | |||
Net income | $108.40 | $39.30 | $47 |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Depreciation | 11.6 | 6.9 | 5.8 |
Loss (gain) from disposition of fixed assets | 0.2 | -20.8 | 1.2 |
Allowance oil reduction to net realizable value | 4 | 0 | 0 |
Changes in operating assets and liabilities | |||
Accounts receivable | -9.9 | 4.4 | -2.1 |
Allowance oil | 2.6 | -4.8 | -1.9 |
Prepaid expenses | -1.6 | -0.5 | -0.4 |
Accounts payable | 7 | 0.7 | 0.2 |
Deferred revenue | 20 | 0 | 0 |
Accrued liabilities | -18.7 | 0.8 | 2 |
Net cash provided by operating activities | 123.6 | 26 | 51.8 |
Cash flows from investing activities | |||
Capital expenditures | -65 | -105.1 | -4.8 |
Return of investment | 1.6 | 0 | 0 |
Pre-Offering distribution received on behalf of SPLC | 5.1 | 0 | 0 |
Proceeds from disposition of assets | 0 | 22.5 | 0 |
Net cash used in investing activities | -58.3 | -82.6 | -4.8 |
Cash flows from financing activities | |||
Net proceeds from Offering, net of Offering costs of $46.3 million | 1,011.70 | 0 | 0 |
Proceeds from Offering distributed to Parent | -911.7 | 0 | 0 |
Credit facility issuance costs | -0.5 | 0 | 0 |
Distributions paid to noncontrolling interest | -25.2 | 0 | 0 |
Net contributions from Parent | 12.4 | 0 | 0 |
Distribution of working capital to Parent | -1.8 | 56.6 | -47 |
Net cash provided by (used in) financing activities | 84.9 | 56.6 | -47 |
Net increase in cash and cash equivalents | 150.2 | 0 | 0 |
Cash at beginning of the period | 0 | 0 | 0 |
Cash at end of the period | 150.2 | 0 | 0 |
Non-cash investing and financing transactions: | |||
Change in accrued capital expenditures | -13.1 | 19.6 | 10.8 |
Contribution of fixed assets from Parent | 11.4 | 0 | 0 |
Amount payable to SPLC for pre-Offering distribution | -6.8 | 0 | 0 |
Contribution of investments upon Offering | $166 | $0 | $0 |
CONSOLIDATED_STATEMENTS_OF_CAS1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Statement Of Cash Flows [Abstract] | |
Net proceeds from Offering, Offering costs | $46.30 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $) | Total | Common unitholders - public | Common unitholders - public | Subordinated Units | General Partner | Noncontrolling Interest | Net Parent Investment | |
In Millions | Shell Pipeline Company L P | Shell Pipeline Company L P | Shell Pipeline Company L P | |||||
Beginning Balance at Dec. 31, 2011 | $118.60 | $118.60 | ||||||
Net income | 47 | 47 | ||||||
Net contributions from ( distributions to ) Parent | -47 | -47 | ||||||
Ending Balance at Dec. 31, 2012 | 118.6 | 118.6 | ||||||
Net income | 39.3 | 39.3 | ||||||
Net contributions from ( distributions to ) Parent | 56.6 | 56.6 | ||||||
Ending Balance at Dec. 31, 2013 | 214.5 | 214.5 | ||||||
Net income | 83.6 | 83.6 | ||||||
Net contributions from ( distributions to ) Parent | 12.4 | 12.4 | ||||||
Distribution of working capital to Parent | -1.8 | -1.8 | ||||||
Contribution of fixed assets from Parent | 11.4 | 11.4 | ||||||
Ending Balance at Nov. 02, 2014 | 320.1 | 320.1 | ||||||
Net income | 24.8 | 4.5 | 2.1 | 6.5 | 0.3 | 11.4 | ||
Allocation of net parent investment to unitholders | 32.2 | 101.3 | 4.1 | 182.5 | -320.1 | |||
Contribution of ownership interests in equity and cost method investments | 166 | 38.9 | 122.1 | 5 | ||||
Net proceeds from the Offering, net of Offering costs of $46.3 million | 1,011.70 | 1,011.70 | ||||||
Proceeds from the Offering distributed to Parent | -911.7 | -213.5 | -670.8 | -27.4 | ||||
Distributions to non controlling interest | [1] | -32 | -32 | |||||
Ending Balance at Dec. 31, 2014 | $578.90 | $1,016.20 | ($140.30) | ($440.90) | ($18) | $161.90 | ||
[1] | Distribution to noncontrolling interest is comprised of $25.2 million for the distribution paid to our Parent for its 57.0% equity interest in Zydeco and $6.8 million for the distribution payable to our Parent for the period October 1, 2014 b November 2, 2014. |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) (USD $) | 1 Months Ended | 2 Months Ended |
In Millions, unless otherwise specified | Nov. 02, 2014 | Dec. 31, 2014 |
Zydeco | ||
Minority interest ownership percentage by noncontrolling owners | 57.00% | |
Shell Pipeline Company L P | ||
Distribution payable to parent | $6.80 | |
Common unitholders - public | ||
Net proceeds from Offering, Offering costs | 46.3 | |
Net Parent Investment | ||
Distribution paid to noncontrolling interest | $25.20 |
Business_and_Basis_of_Presenta
Business and Basis of Presentation | 12 Months Ended | |
Dec. 31, 2014 | ||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Business and Basis of Presentation | 1. Business and Basis of Presentation | |
References to “Shell Midstream Partners,” “the Partnership,” “us,” “our,” “we,” or similar expressions for time periods prior to June 30, 2014 refer to our accounting predecessor (“our Predecessor”) for accounting purposes, which is the crude oil pipeline system from Houston, Texas to Houma, Louisiana (“Ho-Ho”) wholly owned by Shell Pipeline Company LP (“SPLC”). For time periods from July 1, 2014 to prior to November 3, 2014 (the effective date of our initial public offering), these terms refer to Zydeco Pipeline Company LLC (“Zydeco”), “our Predecessor” for accounting purposes. The term “our Parent” refers to SPLC, any entity that wholly owns SPLC, including Shell Oil Company and Royal Dutch Shell plc (“RDS” or “Shell”), and any entity that is wholly owned by the aforementioned entities, excluding our Predecessor. References to “Mars,” “Bengal” and “Colonial” refer to Mars Oil Pipeline Company, Bengal Pipeline Company LLC and Colonial Pipeline Company, respectively, and the pipeline systems owned by those entities. See Note 3 — Initial Public Offering (“the “Offering”) for the discussion of the Offering. On November 3, 2014, we completed our Offering and our common units trade on the New York Stock Exchange under the symbol “SHLX.” | ||
Description of Business | ||
We are a fee-based, growth-oriented master limited partnership recently formed by Shell to own, operate, develop and acquire pipelines and other midstream assets. Our assets consist of interests in entities that own crude oil and refined products pipelines serving as key infrastructure to transport growing onshore and offshore crude oil production to Gulf Coast refining markets and to deliver refined products from those markets to major demand centers. We own interests in two crude oil pipeline systems and two refined products systems. The crude oil pipeline systems, which are held by Zydeco and Mars, are strategically located along the Texas and Louisiana Gulf Coast and offshore Louisiana. These systems link major onshore and offshore production areas with key refining markets. The refined products pipeline systems, which are held by Bengal and Colonial, connect Gulf Coast and southeastern U.S. refineries to major demand centers from Alabama to New York. | ||
On July 1, 2014, SPLC formed a wholly owned subsidiary named Zydeco. In anticipation of an Offering of common units by the Partnership, SPLC contributed the fixed assets and certain agreements of Ho-Ho and other related fixed assets of SPLC to Zydeco. The working capital balances of $1.8 million related to Ho-Ho as of June 30, 2014 were not contributed from SPLC to Zydeco. | ||
We own a 43.0% interest in Zydeco, a 28.6% interest in Mars, a 49.0% interest in Bengal and a 1.612% interest in Colonial (the “Contributed Assets”). The 57.0% ownership interest in Zydeco retained by SPLC is reflected as noncontrolling interest in our consolidated financial statements. We account for each of our investments in Mars and Bengal using the equity method of accounting, and we account for our investment in Colonial using the cost method of accounting. | ||
We generate the majority of our revenue under long-term agreements by charging fees for the transportation of crude oil and refined products through our pipelines. We do not engage in the marketing and trading of any commodities. Our operations consist of one reportable segment. | ||
Basis of Presentation | ||
Our consolidated financial statements include all majority owned and non-majority owned subsidiaries required to be consolidated under generally accepted accounting principles in the United States (“GAAP”). Our reporting currency is U.S. dollars, and all references to dollars are U.S. dollars. Our accompanying consolidated financial statements have been prepared under the rules and regulations of the Securities and Exchange Commission (the “SEC”). These rules and regulations conform to the accounting principles contained in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification, the single source of GAAP. | ||
These consolidated financial statements were derived from the financial statements and accounting records of our Parent. These statements reflect the consolidated historical results of operations, financial position and cash flows of our Predecessor as if such business had been a separate entity for all periods presented. Prior to July 1, 2014, intercompany transactions and accounts between our Predecessor and SPLC have been reflected as “Net parent investment” in the consolidated balance sheets. The assets and liabilities in these consolidated financial statements have been reflected on our Parent’s historical cost basis, as immediately prior to the Offering, all of the assets and liabilities presented were transferred to the Partnership within our Parent’s consolidated group in a transaction under common control. The consolidated statements of income also include expense allocations to our Predecessor prior to July 1, 2014 for certain functions historically performed by our Parent, including allocations of general corporate expenses related to finance, legal, information technology, human resources, communications, ethics and compliance, shared services, employee benefits and incentives, insurance, and share-based compensation. The portions of expenses that are specifically identifiable were directly expensed to our Predecessor, with the remainder allocated on the basis of fixed assets, headcount, labor or other measure. Our management believes the assumptions underlying the consolidated financial statements, including the assumptions regarding allocation of expenses from our Parent, are reasonable. Nevertheless, the consolidated financial statements may not include all of the expenses that would have been incurred had we been a stand-alone company during the periods presented and may not reflect our consolidated statements of income, financial position and cash flows had we been a stand-alone company during the periods presented. Beginning from July 1, 2014, Zydeco, our Predecessor, entered into an operating and management agreement with SPLC under which SPLC provides general management and administrative services to us. Therefore, we no longer receive allocated corporate expenses from SPLC. We will continue to receive direct and allocated field and regional expenses from SPLC including payroll expenses not covered under the operating and management agreement. See details of related party transactions in Note 9 — Related Party Transactions. | ||
Prior to the contribution of fixed assets and certain agreements on July 1, 2014, the cash generated and used by our operations was deposited to SPLC’s centralized account which was comingled with the cash of other pipeline entities controlled by SPLC. SPLC funded our operating and investing activities as needed. Accordingly, we did not record any cash and cash equivalents held by SPLC on our behalf for any period presented. We reflected the cash generated by our operations and expenses paid by our Parent on behalf of our operations as a component of “Net parent investment” on the accompanying consolidated balance sheets and consolidated statements of changes in equity, and as part of “Net contributions from (distributions to) Parent” on the accompanying consolidated statements of cash flows. On July 1, 2014, we established our own cash accounts for the funding of our operating and investing activities, with the exception of the capital expenditures incurred by SPLC on our behalf and then contributed to us. See Note 3 — Initial Public Offering for additional details. | ||
All financial information presented for the periods after the Offering represents the consolidated statements of income, financial position and cash flows of the Partnership. Accordingly: | ||
· | Our consolidated statements of income and cash flows for the year ended December 31, 2014, consist of the consolidated results of the Partnership for the period from November 3, 2014 through December 31, 2014, and the combined results of our Predecessor for the period from January 1, 2014 through November 2, 2014. Our consolidated statements of income and cash flows for the years ended December 31, 2013 and 2012 consists entirely of the combined results of our Predecessor. | |
· | Our consolidated balance sheet at December 31, 2014, consists of the consolidated balances of the Partnership, while at December 31, 2013, it consists of the combined balances of our Predecessor. | |
· | Our consolidated statement of changes in equity for the year ended December 31, 2014, consists of both the combined activity for our Predecessor prior to November 3, 2014, and the consolidated activity for the Partnership completed at and subsequent to the Offering on November 3, 2014. Our consolidated statement of changes in equity for the years ended December 31, 2013 and 2012 consists entirely of the combined activity of our Predecessor. | |
The Partnership generally accounts for investments in 20% to 50%-owned affiliates, and investments in less than 20%-owned affiliates where it has the ability to exercise significant influence, under the equity method. We own a 43.0% interest in Zydeco, a 28.6% interest in Mars, a 49.0% interest in Bengal and a 1.612% interest in Colonial. Accordingly, the consolidated historical financial statements for the Partnership reflect the consolidation of Zydeco (100%), and the investments in Mars and Bengal using the equity method of accounting. Our investment in Colonial is accounted for as a cost method investment. | ||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies |
Principles of Consolidation | |
Our consolidated financial statements include all subsidiaries where the Partnership has control. The assets and liabilities in the accompanying consolidated financial statements have been reflected on a historical basis. All significant intercompany accounts and transactions are eliminated upon consolidation. We own 43.0% of the ownership interest in Zydeco and record a noncontrolling interest for the 57.0% ownership interest retained by SPLC. We obtained control of Zydeco via the voting agreement between SPLC and us under which we have voting power over the ownership interests retained by SPLC in Zydeco. | |
Regulation | |
Certain businesses are subject to regulation by various authorities including, but not limited to the Federal Energy Regulatory Commission (“FERC”). Regulatory bodies exercise statutory authority over matters such as construction, rates and ratemaking and agreements with customers. | |
Net Parent Investment | |
In the accompanying consolidated balance sheets, Net parent investment represents SPLC’s historical investment in us, our accumulated net earnings through November 2, 2014, and the net effect of transactions with, and allocations from, SPLC and Shell Oil Company. | |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from those estimates. | |
Common Control Transactions | |
Assets and businesses acquired from our Parent and its subsidiaries are accounted for as common control transactions whereby the net assets acquired are combined with ours at their historical costs. If any recognized consideration transferred in such a transaction exceeds the carrying value of the net assets acquired, the excess is treated as a capital distribution to our General Partner, similar to a dividend. If the carrying value of the net assets acquired exceeds any recognized consideration transferred including, if applicable, the fair value of any limited partner units issued, then that excess is treated as a capital contribution from our General Partner. To the extent that such transactions require prior periods to be recast, historical net equity amounts prior to the transaction date are reflected in “Net Parent Investment.” Cash consideration up to the carrying value of net assets acquired is presented as an investing activity in our consolidated statement of cash flows. Cash consideration in excess of the carrying value of net assets acquired is presented as a financing activity in our consolidated statement of cash flows. | |
Revenue Recognition | |
Our revenues are primarily generated from crude oil transportation services. In general, we recognize revenue from customers when all of the following criteria are met: (1) persuasive evidence of an exchange arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collectability is reasonably assured. We record revenue for crude oil transportation services over the period in which they are earned (i.e., either physical delivery of product has taken place or the services designated in the contract have been performed). We accrue revenue based on services rendered but not billed for that accounting month. Additionally, we provide crude storage rental services to third parties and related parties under long-term contracts. | |
As a result of FERC regulations, revenues we collect may be subject to refund. We establish reserves for these potential refunds based on actual expected refund amounts on the specific facts and circumstances. We had no reserves for potential refunds as of December 31, 2014 and 2013. | |
Our FERC-approved transportation services agreements on Zydeco entitle the customer to a specified amount of guaranteed capacity on a pipeline. This capacity cannot be pro-rated even if the pipeline is oversubscribed. In exchange, the customer makes a specified monthly payment regardless of the volume transported. If the customer does not ship its full guaranteed volume in a given month, it makes the full monthly cash payment and may ship the unused volume in a later month for no additional cash payment for up to 12 months, subject to availability on the pipeline. If there is insufficient capacity on the pipeline to allow the unused volume to be shipped, the customer forfeits its right to ship such unused volume. | |
Cash collected from customers for shortfalls under these agreements are recorded as deferred revenue. The Company recognizes deferred revenue under these arrangements into revenue once all contingencies or potential performance obligations associated with the related volumes have either (1) been satisfied through the transportation of future excess volumes of crude oil, or (2) expired (or lapsed) through the passage of time pursuant to the terms of the FERC-approved transportation services agreement. Because the expiration of a customer’s right to utilize shortfall payments is twelve months or less, we classify deferred revenue as a short term liability. Deferred revenue balance was $20.0 million and zero as of December 31, 2014 and 2013, respectively. | |
Our long-term transportation agreements and tariffs for crude oil transportation include a product loss allowance, or “PLA.” PLA is intended to assure proper measurement of the crude oil despite solids, water, evaporation and variable crude types that can cause mismeasurement. The PLA provides additional revenue for us if product losses on our pipelines are within the allowed levels, and we are required to compensate our customers for any product losses that exceed the allowed levels. We take title to any excess loss allowance when product losses are within an allowed level, and we convert that product to cash several times per year at prevailing market prices to a related party. | |
For the years ended December 31, 2014, 2013 and 2012, our transportation services revenue from third parties was $136.8 million, $43.9 million and $56.4 million, respectively; our transportation services revenue from related parties was $42.0 million $43.5 million and $52.6 million, respectively; our storage services revenues from third parties were $0.1 million, $1.7 million and zero, respectively; our storage services revenues from related parties was $3.5 million, $5.2 million and $5.8 million, respectively. | |
Cash and cash equivalents | |
Cash and cash equivalents comprise cash on deposit at banks. | |
Accounts Receivable and Allowance for Doubtful Accounts | |
Accounts receivable represent valid claims against customers for products sold or services rendered, net of allowances for doubtful accounts. We assess the creditworthiness of our counterparties on an ongoing basis and require security, including prepayments and other forms of collateral, when appropriate. We establish provisions for losses on accounts receivable due from shippers and operators if we determine that we will not collect all or part of the outstanding balance. Outstanding customer receivables are regularly reviewed for possible nonpayment indicators, and allowances for doubtful accounts are recorded based upon management’s estimate of collectability at each balance sheet date. As of December 31, 2014 and 2013, our allowance for doubtful accounts was not material. | |
Allowance Oil | |
A PLA factor per barrel is incorporated into applicable crude oil tariffs to cover evaporation and other loss in transit. Allowance oil represents the net difference between the tariff PLA volumes and the actual volumetric losses. Our allowance oil is valued at cost using the average market price of the relevant type of crude oil during the month product was transported. | |
For the twelve months ended December 31, 2014, we reduced the net realizable value of allowance oil by $4.0 million. As of December 31, 2014 and 2013, allowance oil on the balance sheet was $3.4 million and $10.0 million, respectively. Gains and losses from the conversion of allowance oil to cash and gains and losses from pipeline operations that relate to allowance oil are recorded in Operations and maintenance expenses in the accompanying consolidated statements of income. During the fourth quarter of 2014, we made a sale of allowance oil at prevailing market prices to a Parent affiliate. See Note 9 — Related Party Transactions for more details. | |
Equity Method Investments | |
Investments in entities over which we have significant influence, but not control, are accounted for using the equity method of accounting. Income from equity method investments represents our proportionate share of net income generated by the equity method investees. Equity method investments are assessed for impairment whenever changes in the facts and circumstances indicate a loss in value has occurred, if the loss is deemed to be other than temporary. When the loss is deemed to be other than temporary, the carrying value of the equity method investment is written down to fair value, and the amount of the write-down is included in net income. Differences in the basis of the investments and the separate net asset value of the investees, if any, are amortized into net income over the remaining useful lives of the underlying assets. Amortization expense of less than $0.1 million related to equity method investments is in the accompanying consolidated statement of income for the year ended December 31, 2014. As of December 31, 2014, the equity investment exceeded our equity in the net assets of Mars and Bengal by approximately $12.0 million and $6.3 million. | |
Property, Plant and Equipment | |
Our property, plant and equipment is recorded at its historical cost of construction or, upon acquisition, at either the fair value of the assets acquired or the cost to the entity that placed the asset in service. Expenditures for major renewals and betterments are capitalized while those minor replacement, maintenance, and repairs which do not improve or extend asset life are expensed when incurred. For constructed assets, we capitalize all construction-related direct labor and material costs, as well as indirect construction costs. | |
We use the straight-line method to depreciate property, plant and equipment based on the estimated useful life of the asset. We report gains or losses on dispositions of fixed assets as Loss (gain) from disposition of fixed assets in the accompanying consolidated statements of income. | |
Impairment of Long-lived Assets | |
We evaluate long lived assets of identifiable business activities for impairment when events or changes in circumstances indicate, in our management’s judgment, that the carrying value of such assets may not be recoverable. These events include market declines that are believed to be other than temporary, changes in the manner in which we intend to use a long-lived asset, decisions to sell an asset and adverse changes in the legal or business environment such as adverse actions by regulators. If an event occurs, which is a determination that involves judgment, we evaluate the recoverability of our carrying values based on the long-lived asset’s ability to generate future cash flows on an undiscounted basis. When an indicator of impairment has occurred, we compare our management’s estimate of forecasted discounted future cash flows attributable to the assets to the carrying value of the assets to determine whether the assets are recoverable (i.e. the discounted future cash flows exceed the net carrying value of the assets). If the assets are not recoverable, we determine the amount of the impairment recognized in the financial statements by estimating the fair value of the assets and recording a loss for the amount that the carrying value exceeds the estimated fair value. We determined that there were no asset impairments in the years ended December 31, 2014, 2013 or 2012. | |
Income Taxes | |
We are not a taxable entity for U.S. federal income tax purposes or for the majority of states that impose an income tax. Taxes on our net income are generally borne by our partners through the allocation of taxable income. Our income tax expense results from partnership activity in the state of Texas, as conducted by Zydeco. Income taxes for the years ended December 31, 2014, 2013, and 2012 were $0.2 million, $0.1 million and $0.1 million, respectively. | |
Cost Method Investment | |
We account for investments in entities we do not control or account for under the equity method under the cost method. Cost method investments are reported as Other assets in our consolidated balance sheets. As of December 31, 2014, our cost investment included a 1.612% interest in Colonial with a balance of $3.7 million. | |
Asset Retirement Obligations | |
Asset retirement obligations represent legal and constructive obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal use of the asset. We record liabilities for obligations related to the retirement and removal of long-lived assets used in our businesses at fair value on a discounted basis when they are incurred and can be reasonably estimated. Amounts recorded for the related assets are increased by the amount of these obligations. Over time, the liabilities increase due to the change in their present value, and the initial capitalized costs are depreciated over the useful lives of the related assets. The liabilities are eventually extinguished when settled at the time the asset is taken out of service. | |
We continue to evaluate our asset retirement obligations and future developments could impact the amounts we record. The demand for our pipelines depends on the ongoing demand to move crude oil through the system. Although individual assets will be replaced as needed, our pipelines will continue to exist for an indefinite useful life. As such, there is uncertainty around the timing of any asset retirement activities. As a result, we determined that there is not sufficient information to make a reasonable estimate of the asset retirement obligations for our assets and we have not recognized any asset retirement obligations as of December 31, 2014 and 2013. | |
Pensions and Other Postretirement Benefits | |
We do not have our own employees. Employees that work on our pipeline are employees of SPLC and we share employees with other SPLC-controlled and non-controlled entities. For presentation of these accompanying consolidated financial statements, our portion of payroll costs and employee benefit plan costs have been allocated to us as a charge to us by SPLC and Shell Oil Company. Shell Oil Company sponsors various employee pension and postretirement health and life insurance plans. For purposes of these accompanying consolidated financial statements, we are considered to be participating in the benefit plans of Shell Oil Company. We participate in the following defined benefits plans: Shell Oil Pension Plan, Shell Oil Retiree Health Care Plan, and Pennzoil-Quaker State Retiree Medical & Life Insurance. As a participant in these benefit plans, we recognize as expense in each period an allocation from Shell Oil Company, and we do not recognize any employee benefit plan assets or liabilities. See Note 9 — Related Party Transactions for total pension and benefit expenses under these plans. | |
Legal | |
We are subject to litigation and regulatory proceedings as the result of our business operations and transactions. We utilize both internal and external counsel in evaluating our potential exposure to adverse outcomes from orders, judgments or settlements. In general, we expense legal costs as incurred. When we identify specific litigation that is expected to continue for a significant period of time, is reasonably possible to occur and may require substantial expenditures, we identify a range of possible costs expected to be required to litigate the matter to a conclusion or reach an acceptable settlement, and we accrue for the lower end of the range. To the extent that actual outcomes differ from our estimates, or additional facts and circumstances cause us to revise our estimates, our earnings will be affected. | |
Environmental Matters | |
We are subject to federal, state, and local environmental laws and regulations. Environmental expenditures are expensed or capitalized depending on their economic benefit. We expense costs such as permits, compliance with existing environmental regulations, remedial investigations, soil sampling, testing and monitoring costs to meet applicable environmental laws and regulations where prudently incurred or determined to be reasonably possible in the ordinary course of business. We are permitted to recover such expenditure through tariff rates charged to customers. We also expense costs that relate to an existing condition caused by past environmental incidents, which do not contribute to current or future revenue generation. We discount environmental liabilities to a net present value, and we record environmental liabilities when environmental assessments and/or remedial efforts are probable and we can reasonably estimate the costs. Generally, our recording of these accruals coincides with our completion of a feasibility study or our commitment to a formal plan of action. We recognize receivables for anticipated associated insurance recoveries when such recoveries are deemed to be probable. We do not use regulatory accounting principles. | |
For the years ended December 31, 2014, 2013 and 2012, we incurred $3.0 million, $13.6 million and zero environmental cleanup costs. Due to the formation of Zydeco via the contribution of fixed assets and certain agreements from SPLC, Zydeco was indemnified by SPLC against environmental cleanup costs for incidents that occurred prior to Zydeco’s formation on July 1, 2014. In 2013, the West Columbia pipeline experienced a breach in which approximately 940 barrels of oil released in the vicinity of the pipeline. During 2013, we incurred $12.1 million in costs primarily related to several large maintenance projects for the containment of this incident at the West Columbia pipeline. As of December 31, 2014 and December 31, 2013, we accrued zero and $2.8 million, respectively, for environmental clean-up costs. Refer to Note 3 — Initial Public Offering under the Omnibus Agreement for additional details. | |
We routinely conduct reviews of potential environmental issues and claims that could impact our assets or operations. These reviews assist us in identifying environmental issues and estimating the costs and timing of remediation efforts. In making environmental liability estimations, we consider the material effect of environmental compliance, pending legal actions against us and potential third-party liability claims. Often, as the remediation evaluation and effort progresses, additional information is obtained, requiring revisions to estimated costs. These revisions are reflected in our income in the period in which they are probable and reasonably estimable. | |
Other Contingencies | |
We recognize liabilities for other contingencies when we have an exposure that indicates it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Where the most likely outcome of a contingency can be reasonably estimated, we accrue a liability for that amount. Where the most likely outcome cannot be estimated, a range of potential losses is established and if no one amount in that range is more likely than any other, the lower end of the range is accrued. | |
Fair Value Estimates | |
We measure assets and liabilities requiring fair value presentation or disclosure using an exit price (i.e., the price that would be received to sell an asset or paid to transfer a liability) and disclose such amounts according to the quality of valuation inputs under the following hierarchy: | |
Level 1: Quoted prices in an active market for identical assets or liabilities. | |
Level 2: Inputs other than quoted prices that are directly or indirectly observable. | |
Level 3: Unobservable inputs that are significant to the fair value of assets or liabilities. | |
We classify the fair value of an asset or liability based on the lowest level of input significant to its measurement. A fair value initially reported as Level 3 will be subsequently reported as Level 2 if the unobservable inputs become inconsequential to its measurement, or corroborating market data becomes available. Asset and liability fair values initially reported as Level 2 will be subsequently reported as Level 3 if corroborating market data becomes unavailable. | |
The carrying amounts of our accounts receivable, accounts payable, accrued liabilities and revolving credit agreements approximate their carrying values due to their short term nature. | |
Nonrecurring Fair Value Measurements — Fair value measurements are applied with respect to our nonfinancial assets and liabilities measured on a nonrecurring basis, which consist primarily of asset retirement obligations. Nonrecurring fair value measurements are also applied, when applicable, to determine the fair value of our long-lived assets. | |
Net income per limited partner unit | |
Net income per unit applicable to common limited partner units and to subordinated limited partner units is computed by dividing the respective limited partners’ interest in net income for the period subsequent to the Offering by the weighted average number of common units and subordinated units, respectively, outstanding for the period. Because we have more than one class of participating securities, we use the two-class method when calculating the net income per unit applicable to limited partners. The classes of participating securities include common units, subordinated units, general partner units, and incentive distribution rights. Basic and diluted net income per unit are the same because we do not have any potentially dilutive units outstanding for the period presented. | |
Comprehensive Income | |
We have not reported comprehensive income due to the absence of items of other comprehensive income in the periods presented. | |
Recent Accounting Pronouncements | |
In April 2014, the FASB issued accounting standards updates to Topic 205, “Presentation of Financial Statements” and to Topic 360, “Property, Plant, and Equipment” to change the criteria for reporting discontinued operations. The amendments modify the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have or will have a major effect on an entity’s operations and financial results. These amendments require additional disclosures about discontinued operations and new disclosures for other disposals of individually material components of an organization that do not meet the definition of a discontinued operation. In addition, the guidance allows companies to have significant continuing involvement and continuing cash flows with the discontinued operation. These provisions are effective prospectively for annual reporting periods beginning on or after December 15, 2014, and interim periods within those annual periods, with early adoption permitted. The adoption of this guidance, effective January 1, 2015, will not affect our financial position or results of operations; however, it may result in changes to the manner in which future dispositions of operations or assets, if any, are presented in our consolidated financial statements, or it may require additional disclosures. | |
In May 2014, the FASB and the International Accounting Standards Board (“IASB”) issued a new accounting standard, Topic 606, “Revenue from Contracts with Customers,” to clarify the principles for recognizing revenue. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The standard also requires improved interim and annual disclosures that enable the users of financial statements to better understand the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. The accounting standards update will be effective on a retrospective or modified retrospective basis for annual reporting periods beginning after December 15, 2016, and interim periods within those years, with no early adoption permitted. We are currently evaluating the effect that adopting this new standard will have on our consolidated financial statements and related disclosures. | |
In August 2014, the FASB issued accounting standards update, Subtopic 205-40, “Presentation of Financial Statements—Going Concern,” requiring management to evaluate whether events or conditions could impact an entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or available to be issued) and to provide disclosures if necessary. Disclosures will be required if conditions give rise to substantial doubt and the type of disclosure will be determined based on whether management's plans will be able to alleviate the substantial doubt. The accounting standards update will be effective for the first annual period ending after December 15, 2016, and for annual periods and interim periods thereafter with early application permitted. The adoption of this guidance will not affect our financial position or results of operations. | |
In November 2014, the FASB issued ASU 2014-17 that gives acquired entities that are businesses or nonprofit activities the option to apply pushdown accounting in their separate financial statements when an acquirer obtains control of them. The adoption of this guidance, effective November 18, 2014, will not affect our financial position or results of operations. | |
In January 2015, the FASB issued accounting standards update, Subtopic 225-20, “Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items,” The adoption of this guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The adoption of this guidance will not affect our financial position or results of operations. | |
In February 2015, the FASB issued accounting standards updates to topic 810, “Consolidation” to change the criteria for reporting entities that are required to evaluate whether they should consolidate certain legal entities. The amendments require additional testing to determine if a legal entity qualifies as a Variable Interest Entity and whether the entity should be consolidated. These provisions are effective prospectively for annual reporting periods beginning on or after December 15, 2015, and interim periods within those annual periods, with early adoption permitted. The adoption of this guidance will not affect our financial position or results of operations. |
Initial_Public_Offering
Initial Public Offering | 12 Months Ended | |
Dec. 31, 2014 | ||
Initial Public Offering Disclosure [Abstract] | ||
Initial Public Offering | 3. Initial Public Offering | |
On November 3, 2014, the Partnership completed its Offering of 46,000,000 common units representing limited partner interests at a price to the public of $23.00 per unit, which included 6,000,000 common units issued pursuant to the exercise of the underwriters’ over-allotment option. The Partnership received net proceeds of $1,011.7 million from the sale of 46,000,000 common units, after deducting underwriting discounts and commissions, structuring fees and other offering expenses (the “Offering Costs”) of approximately $46.3 million. The Partnership: (i) made a cash distribution of $795.9 million to SPLC, in part to reimburse SPLC for capital expenditures incurred prior to the Offering related to the Contributed Assets; (ii) made a cash contribution of $115.8 million to Zydeco in exchange for additional interest in Zydeco, which Zydeco distributed to SPLC to reimburse SPLC for capital expenditures incurred prior to the Offering; and (iii) retained $100.0 million of these net proceeds for general partnership purposes, including to fund expansion capital expenditures, acquisitions and financing costs. In exchange for SPLC’s contribution of assets and liabilities to the Partnership, SPLC received: a) 21,475,068 common units and 67,475,068 subordinated units, representing an aggregate 64.6% limited partner interest in us; b) all of our incentive distribution rights; c) 2,754,084 general partner units, representing a 2.0% general partner interest; and d) a cash distribution of $911.7 million. A registration statement on Form S-1, as amended through the time of its effectiveness, was filed by the Partnership with the SEC and was declared effective on October 28, 2014. On October 29, 2014, Shell Midstream Partners, L.P. common units began trading on the New York Stock Exchange under the symbol “SHLX.” | ||
Commercial Agreements | ||
Contribution Agreement | ||
On July 1, 2014, Zydeco entered into a contribution agreement with SPLC. As part of that agreement, SPLC contributed the fixed assets of $249.3 million and certain agreements of the Predecessor and other fixed assets of SPLC of $11.4 million to Zydeco in exchange for 100.0% of the equity in Zydeco. The working capital balances of $1.8 million related to the Predecessor were not contributed as part of this agreement from SPLC to Zydeco. From July 1, 2014 until the Offering, capital expenditures of $16.5 million were incurred by SPLC on behalf of Zydeco and then contributed to Zydeco as an additional investment. Subsequent to the Offering, Zydeco reimburses SPLC for capital expenditures incurred by SPLC on behalf of Zydeco. | ||
Omnibus Agreement | ||
In connection with the Offering, the Partnership entered into an Omnibus Agreement with SPLC and our general partner that addresses the following matters: | ||
· | our payment of an annual general and administrative fee, initially $8.5 million, for the provision of certain services by SPLC; | |
· | our obligation to reimburse SPLC for certain direct or allocated costs and expenses incurred by SPLC on our behalf; | |
· | our obligation to reimburse SPLC for all expenses incurred by SPLC as a result of us becoming and continuing as a publicly traded entity; we will reimburse our general partner for these expenses to the extent the fees relating to such services are not included in the general and administrative fee; | |
· | SPLC’s obligation to indemnify us for certain environmental and other liabilities, and our obligation to indemnify SPLC for certain environmental and other liabilities related to our assets to the extent SPLC is not required to indemnify us; and | |
· | the granting of a license from Shell to us with respect to use of certain Shell trademarks and trade names. | |
Operating and Management Agreement | ||
Upon the formation of Zydeco on July 1, 2014, Zydeco entered into an operating and management agreement with SPLC. Zydeco reimburses SPLC for certain operational costs such as labor, contract services and materials and supplies. Zydeco also pays an annual management fee, initially $7.0 million, to SPLC for general management and administrative services. | ||
Tax Sharing Agreement | ||
In connection with the Offering, we entered into a tax sharing agreement with an affiliate of Shell pursuant to which we have agreed to reimburse Shell for state and local income and franchise taxes attributable to our activity that is reported on Shell’s state or local income or franchise tax returns filed on a combined or unitary basis. Reimbursements under the agreement equal the amount of tax that we would be required to pay if it were to file a consolidated, combined or unitary tax return separate from Shell. Shell will compute and invoice us for the reimbursement amount within 90 days of Shell filing the combined or unitary tax return on which our activity is included. We may be required to make prepayments toward the reimbursement amount to the extent that Shell is required to make estimated tax payments. |
Accounts_Receivable
Accounts Receivable | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Receivables [Abstract] | |||||||||
Accounts Receivable | 4. Accounts Receivable | ||||||||
Accounts receivable from third parties consist of the following at December 31 (in millions of dollars): | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Trade customers | $ | 16.3 | $ | 4.9 | |||||
Allowance for doubtful accounts | — | (0.1 | ) | ||||||
Accounts receivable - third parties, net | $ | 16.3 | $ | 4.8 | |||||
The reduction in allowance for doubtful accounts in 2014 is due to SPLC not contributing working capital balances to Zydeco on July 1, 2014. | |||||||||
Equity_Method_Investments
Equity Method Investments | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity Method Investments And Joint Ventures [Abstract] | |||||||||||||
Equity Method Investments | 5. Equity Method Investments | ||||||||||||
As of December 31, 2014, our equity method investments consist of 28.6% interest in Mars and 49.0% interest in Bengal. The equity method investment balances as of December 31, 2014 for Mars and Bengal are $85.7 million and $75.0 million, respectively. The net income earned from equity method investments for the period November 3, 2014 through December 31, 2014 for Mars and Bengal are $3.4 million and $3.3 million, respectively. | |||||||||||||
Summarized Financial Information | |||||||||||||
The following tables present aggregated selected balance sheet and income statement data for our equity method investments Mars and Bengal (on a 100% basis) for all periods presented: | |||||||||||||
November 3 - December 31, 2014 | |||||||||||||
Mars | Bengal | Total | |||||||||||
Statements of Income | |||||||||||||
Total revenues(1) | $ | — | $ | — | $ | — | |||||||
Total operating expenses(1) | — | — | — | ||||||||||
Operating income(1) | — | — | — | ||||||||||
Net income | 11.9 | 6.6 | 18.5 | ||||||||||
Balance Sheets | |||||||||||||
Current assets | $ | 38.3 | $ | 35.9 | $ | 74.2 | |||||||
Non-current assets | 214 | 146.7 | 360.7 | ||||||||||
Total assets | $ | 252.3 | $ | 182.6 | $ | 434.9 | |||||||
Current liabilities | 6.1 | 19 | 25.1 | ||||||||||
Non-current liabilities | — | 1.2 | 1.2 | ||||||||||
Equity | 246.2 | 162.4 | 408.6 | ||||||||||
Total liabilities and equity | $ | 252.3 | $ | 182.6 | $ | 434.9 | |||||||
-1 | Interests in Mars and Bengal were acquired by the Partnership on November 3, 2014. For the year ended December 31, 2014, Mars total revenue, total operating expenses and operating income (on a 100% basis) was $160.5 million, $70.6 million, and $89.9 million, respectively, and Bengal total revenue, total operating expenses and operating income (on a 100% basis) was $65.9 million, $27.2 million, and $38.7 million, respectively. |
Property_Plant_and_Equipment
Property, Plant and Equipment | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Property Plant And Equipment [Abstract] | |||||||||||||
Property, Plant and Equipment | 6. Property, Plant and Equipment | ||||||||||||
Property, plant and equipment consist of the following at December 31 (in millions of dollars): | |||||||||||||
December 31, | |||||||||||||
Depreciable | 2014 | 2013 | |||||||||||
Life | |||||||||||||
Land | — | $ | 1.1 | $ | 0.7 | ||||||||
Building and improvements | 10 - 40 years | 10.5 | 8.2 | ||||||||||
Pipeline and equipment | 10 - 30 years | 313.6 | 257 | ||||||||||
Other | 5 - 25 years | 5.5 | 5.2 | ||||||||||
330.7 | 271.1 | ||||||||||||
Less: Accumulated depreciation | (66.5 | ) | (54.8 | ) | |||||||||
264.2 | 216.3 | ||||||||||||
Construction in progress | 10.8 | 7.2 | |||||||||||
Property, plant and equipment, net | $ | 275 | $ | 223.5 | |||||||||
Depreciation expense on property, plant and equipment of $11.6 million, $6.9 million and $5.8 million is included in cost and expenses in the accompanying consolidated statements of income for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
In August 2013, we sold to Magellan Midstream Partners (“Magellan’) our West Columbia pipeline in east Houston, a 16-inch diameter crude oil pipeline that is approximately 15 miles long and originates at Genoa Junction and terminates at Magellan’s crude oil and refined products distribution terminal in East Houston, Texas. We recorded a $20.8 million gain related to the sale. | |||||||||||||
Accrued_Liabilities
Accrued Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables And Accruals [Abstract] | |||||||||
Accrued Liabilities | 7. Accrued Liabilities | ||||||||
Accrued liabilities consist of the following at December 31 (in millions of dollars): | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Transportation, project engineering | $ | 0.6 | $ | 27.2 | |||||
Property taxes | 0.2 | 0.6 | |||||||
Other accrued liabilities | 0.1 | 1.5 | |||||||
Accrued liabilities - third parties | $ | 0.9 | $ | 29.3 | |||||
Debt
Debt | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt |
Revolving Credit Facility Agreement | |
On November 3, 2014, the Partnership entered into a $300.0 million senior unsecured revolving credit facility agreement (the “Revolver”) with Shell Treasury Center (West) Inc., an affiliate of Shell. The Revolver matures in October 2019 and contains certain restrictive covenants. The Revolver contains representations and warranties, covenants such as restricting additional indebtedness above $600 million and requiring pari passu ranking with any new indebtedness, and contains customary events of default, such as nonpayment of principal when due, nonpayment of interest, fees or other amounts, violation of covenants, and cross-payment default (due to indebtedness in excess of $100 million). | |
Borrowings under the Revolver bear interest at the three-month LIBOR rate plus a margin. The Revolver also provides for customary fees, including administrative agent fees and commitment fees. Commitment fees began to accrue beginning on the date the Partnership entered into the Revolver agreement. The Partnership paid a credit facility issuance fee of $0.5 million which was capitalized and will be amortized over the five year term of the facility. As of December 31, 2014, the amount of credit facility issuance costs in Other assets is $0.5 million. For the year ended December 31, 2014, interest and fee expenses were approximately $0.1 million. During 2014, there were no borrowings under the Revolver. As of December 31, 2014, there were no borrowings outstanding under the Revolver. | |
Zydeco Revolving Credit Facility Agreement | |
In August 2014, Zydeco entered into a senior unsecured revolving credit facility agreement (the ‘Zydeco Revolver”) with an affiliate of Shell as the lender. The facility has a borrowing capacity of $30.0 million. Borrowings under the credit facility bear interest at the three-month LIBOR rate plus a margin. The credit agreement governing the Zydeco Revolver provides for covenants such as requiring pari passu ranking with any new indebtedness and contains customary events of default, such as nonpayment of principal when due, nonpayment of interest, fees or other amounts, violation of covenants, and cross-payment default (due to indebtedness in excess of $100 million). The Zydeco Revolver also requires payment of customary fees, including issuance and commitment fees and matures in August 2019. | |
During the six month period ending December 31, 2014, Zydeco had borrowings of $6.0 million from its revolving credit facility agreement in order to meet working capital requirements, which were repaid within two months of the withdrawal. Interest and fees incurred was approximately $0.1 million. No amount was outstanding as of December 31, 2014. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Related Party Transactions [Abstract] | |||||||||||||
Related Party Transactions | 9. Related Party Transactions | ||||||||||||
Related party transactions include transactions with our Parent and our Parents’ affiliates including those entities in which our Parent has an ownership interest but does not have control. | |||||||||||||
Cash Management Program | |||||||||||||
Prior to SPLC’s contribution of fixed assets and certain agreements to us on July 1, 2014, we participated in our Parent’s centralized cash management and funding system. Our working capital and capital expenditure requirements have historically been part of the corporate-wide cash management program for our Parent. As part of this program, our Parent maintained all cash generated by our operations, and cash required to meet our operating and investing needs was provided by our Parent as necessary. Net cash generated from or used by our operations is reflected as a component of “Net parent investment” on the accompanying consolidated balance sheets and as “Net contributions from (distributions to) Parent” on the accompanying consolidated statements of cash flows. No interest income has been recognized on net cash kept by our Parent since, historically, we have not charged interest on intercompany balances. On July 1, 2014, we established our own cash accounts for the funding of our operating and investing activities. We will therefore no longer participate in our Parent’s cash management program, with the exception of the capital expenditures incurred by SPLC on our behalf and then contributed to us. From November 3 through December 31, 2014, Zydeco reimbursed SPLC for expenditures incurred on behalf of Zydeco. See Note 3 — Initial Public Offering for additional details. | |||||||||||||
Other Related Party Balances | |||||||||||||
Other related party balances consist of the following as of December 31 (in millions of dollars): | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Accounts receivable | $ | 10.3 | $ | 11.9 | |||||||||
Prepaid expenses and other current assets | 1.8 | 2 | |||||||||||
Other assets | 0.5 | — | |||||||||||
Total assets | $ | 12.6 | $ | 13.9 | |||||||||
Accounts payable | $ | 10.6 | $ | — | |||||||||
Distribution payable to SPLC | 11.9 | — | |||||||||||
Deferred revenue | 4.7 | — | |||||||||||
Accrued liabilities | 1.4 | — | |||||||||||
Total liabilities | $ | 28.6 | $ | — | |||||||||
Accounts payable – related parties reflects amounts owed to SPLC for reimbursement of third-party expenses incurred by SPLC for our benefit. | |||||||||||||
Related Party Revenues and Expenses | |||||||||||||
We provide crude oil transportation and storage services to related parties under long-term contracts. We entered into these contracts in the normal course of our business and the services are based on the same terms as those provided to third parties. Our transportation services revenue from related parties was $42.0 million, $43.5 million and $52.6 million for each of the years ended December 31, 2014, 2013 and 2012, respectively. In November 2014, we recorded a $0.4 million loss in Operations and maintenance – related parties from converting excess allowance oil to cash by selling the allowance oil to an affiliate of our Parent. Revenues related to storage services from related parties were approximately $3.5 million, $5.2 million and $5.8 million for each of the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
During the three month period ending December 31, 2014, the Partnership received cash distributions of $33.3 million in total from Zydeco, Mars, Bengal and Colonial, of which $19.0 million related to Zydeco. In accordance with the Partnership agreement which became effective on November 3, 2014, the pro rata share of the distributions prior to the effective date are owed to SPLC. The amount of the Distribution payable to SPLC is $11.9 million, of which $6.8 million relates to Zydeco. | |||||||||||||
Prior to SPLC’s contribution of certain fixed assets and agreements to Zydeco on July 1, 2014, our Parent performed certain services which directly and indirectly supported our operations. Personnel and operating costs incurred by our Parent on our behalf were charged to us and are included in either general and administrative expenses or operations and maintenance expenses in the accompanying consolidated statements of income, depending on the nature of the employee’s role in our operations. Our Parent also performs certain general corporate functions for us related to finance, legal, information technology, human resources, communications, ethics and compliance, and other shared services. During the six months ended June 30, 2014, and the years ended December 31, 2013 and 2012, we were allocated $6.8 million, $11.1 million and $10.0 million, respectively, of indirect general corporate expenses incurred by our Parent which are included within general and administrative expenses in the accompanying consolidated statements of income. These allocated corporate costs relate primarily to the wages and benefits of our Parent’s employees that support our operations. Expenses incurred by our Parent on our behalf have been allocated to us on the basis of direct usage when identifiable. Where costs incurred by our Parent could not be determined to relate to us by specific identification, these costs were primarily allocated to us on the basis of headcount, labor or other measure. The expense allocations have been determined on a basis that both we and our Parent consider to be a reasonable reflection of the utilization of services provided or the benefit received by us during the periods presented. The allocations may not, however, fully reflect the expenses we would have incurred as a separate, publicly-traded company for the periods presented. All employees performing services on behalf of our operations are employees of SPLC. | |||||||||||||
Beginning July 1, 2014, we entered into an operating and management agreement with SPLC under which SPLC provides general management and administrative services to us. We no longer receive allocated corporate expenses from SPLC, Shell Oil Company or any other Parent affiliate. We will continue to receive direct and allocated field and regional expenses including payroll expenses not covered under the operating and management agreement. These expenses are primarily allocated to us on the basis of headcount, labor or other measure. These expense allocations have been determined on a basis that both SPLC and we consider to be a reasonable reflection of the utilization of services provided or the benefit received by us during the periods presented. For the six months ended December 31, 2014, the management fee charged by SPLC under the operating and management agreement was $3.5 million. | |||||||||||||
Prior to the Offering, we were covered by the insurance policies of SPLC. Subsequent to the Offering, the majority of our coverage is provided by our Parent with the remaining coverage by third party insurers. The related party portion of insurance expense in 2014 was $3.7 million. | |||||||||||||
The following table shows related party expenses, including personnel costs described above, incurred by Shell Oil Company and SPLC on our behalf that are reflected in the accompanying consolidated statements of income for the years ended December 31 (in millions of dollars): | |||||||||||||
Year Ended December 31 | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Operations and maintenance - related parties | $ | 16 | $ | 14.9 | $ | 15.1 | |||||||
General and administrative - related parties | 13.6 | 11.1 | 10 | ||||||||||
Pension and retirement savings plans | |||||||||||||
Employees who directly or indirectly support our operations participate in the pension, postretirement health and life insurance, and defined contribution benefit plans sponsored by our Parent, which include other Parent subsidiaries. Our share of pension and postretirement health and life insurance costs for the years ended December 31, 2014, 2013 and 2012 was $2.5 million, $3.1 million and $3.2 million, respectively. Our share of defined contribution benefit plan costs for the same periods was $1.0 million, $1.2 million and $0.9 million, respectively. Pension and defined contribution benefit plan expenses are included in either general and administrative expenses or operations and maintenance expenses in the accompanying consolidated statements of income, depending on the nature of the employee’s role in our operations. | |||||||||||||
Share-based compensation | |||||||||||||
Our Parent’s incentive compensation programs primarily consist of share awards, restricted share awards or cash awards (any of which may be a performance award). The Performance Share Plan (“PSP”) was introduced in 2005 by our Parent. Conditional awards of RDS shares are made under the terms of the PSP to some 15,000 employees each year. The extent to which the awards vest is determined over a three-year performance period. Half of the award is linked to the key performance indicators, averaged over the period. For the PSP awards made prior to 2010, the other half of the award was linked to the relative total shareholder return over the period compared with four main competitors of RDS. For awards made in 2010 and onwards, the other half of the award is linked to a comparison with four main competitors of RDS over the period on the basis of four relative performance measures. All shares that vest are increased by an amount equal to the notional dividends accrued on those shares during the period from the award date to the vesting date. None of the awards result in beneficial ownership until the shares are delivered. | |||||||||||||
Under the PSP, awards are made on a highly selective basis to senior personnel. Shares are awarded subject to a three-year vesting period. | |||||||||||||
Certain Parent employees supporting our operations as well as other RDS operations were historically granted these types of awards. These share-based compensation costs have been allocated to us as part of the cost allocations from our Parent prior to June 30, 2014 and have been immaterial. Beginning July 1, 2014, we did not receive any allocated share-based compensation. Share-based compensation expense is included in general and administrative expenses in the accompanying consolidated statements of income. These costs totaled $0.1 million for the six months ended June 30, 2014, and totaled less than $0.2 million and $0.2 million for the years ended December 31, 2013 and 2012, respectively. | |||||||||||||
Equity Method Investments | |||||||||||||
We have equity method investments in entities that own certain of our assets, including Mars and Bengal. In some cases we may be required to make capital contributions or other payments to these entities. For information regarding these equity method investments, see Note 5 – Equity Method Investments for additional details. |
Net_Income_Per_Limited_Partner
Net Income Per Limited Partner Unit | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Partners Capital Notes [Abstract] | |||||||||||||||||
Net Income Per Limited Partner Unit | 10. Net Income Per Limited Partner Unit | ||||||||||||||||
Net income per unit applicable to common limited partner units and to subordinated limited partner units is computed by dividing the respective limited partners’ interest in net income for the period subsequent to the Offering by the weighted average number of common units and subordinated units, respectively, outstanding for the period. Because we have more than one class of participating securities, we use the two-class method when calculating the net income per unit applicable to limited partners. The classes of participating securities include common units, subordinated units, general partner units, and incentive distribution rights. Basic and diluted net income per unit are the same because we do not have any potentially dilutive units outstanding for the period presented. | |||||||||||||||||
On January 20, 2015, the Board of Directors of our general partner declared our quarterly cash distribution of $0.1042 per unit, or $14.4 million in total, for the fourth quarter of 2014. This distribution was paid on February 12, 2015, to unitholders of record as of February 2, 2015. The following table shows the allocation of net income to arrive at net income per limited partner unit: | |||||||||||||||||
2014 | |||||||||||||||||
(in millions of dollars) | |||||||||||||||||
Net income from November 3, 2014 through | $ | 13.4 | |||||||||||||||
December 31,2014 | |||||||||||||||||
Less: | |||||||||||||||||
General partner's distribution declared | 0.3 | ||||||||||||||||
Limited partners' distribution declared on common units | 7 | ||||||||||||||||
Limited partner's distribution declared on subordinated units | 7.1 | ||||||||||||||||
Distributions in excess of net income subsequent to the Offering | $ | (1.0 | ) | ||||||||||||||
2014 | |||||||||||||||||
General Partner | Limited Partners' Common Units | Limited Partner's Subordinated Units | Total | ||||||||||||||
Net income from November 3, 2014 through | (in millions of dollars, except per unit data) | ||||||||||||||||
December 31,2014 | |||||||||||||||||
Distributions declared | $ | 0.3 | $ | 7 | $ | 7.1 | $ | 14.4 | |||||||||
Distributions in excess of net income subsequent to the Offering | — | (0.5 | ) | (0.5 | ) | (1.0 | ) | ||||||||||
Net income subsequent to the Offering | $ | 0.3 | $ | 6.5 | $ | 6.6 | $ | 13.4 | |||||||||
Weighted average units outstanding (in millions): | |||||||||||||||||
Basic | 2.7 | 67.5 | 67.5 | 137.7 | |||||||||||||
Diluted | 2.7 | 67.5 | 67.5 | 137.7 | |||||||||||||
Net income per limited partner unit (in dollars): | |||||||||||||||||
Basic | $ | 0.1 | $ | 0.1 | |||||||||||||
Diluted | $ | 0.1 | $ | 0.1 | |||||||||||||
Transactions_with_Major_Custom
Transactions with Major Customers and Concentration of Credit Risk | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Risks And Uncertainties [Abstract] | |||||||||||||
Transactions with Major Customers and Concentration of Credit Risk | 11. Transactions with Major Customers and Concentration of Credit Risk | ||||||||||||
The following table shows revenues from third party customers that accounted for 10% or a greater share of consolidated revenues for each of the three years ended December 31 (in millions of dollars): | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Customer A | $ | 15.9 | $ | 14.6 | $ | 15.7 | |||||||
Customer B | 39.4 | 1.8 | — | ||||||||||
Customer C | 44.6 | 6.2 | — | ||||||||||
Customer E | 20.2 | — | — | ||||||||||
Our Parent and our Parent’s affiliates accounted for 25%, 52% and 51% of our total revenues for the years ended December 31, 2014, 2013 and 2012, respectively. The following table shows accounts receivable from third party customers that accounted for 10% or a greater share of consolidated accounts receivable, net for each of the two years ended December 31 (in millions of dollars): | |||||||||||||
2014 | 2013 | ||||||||||||
Customer A | $ | 0.9 | $ | 1.1 | |||||||||
Customer B | 6.3 | 0.2 | |||||||||||
Customer C | 5.7 | 1.3 | |||||||||||
Customer D | — | 0.5 | |||||||||||
Customer E | 3 | — | |||||||||||
We have a concentration of revenues and trade receivables due from customers in the same industry, our Parent’s affiliates, integrated oil companies, and independent exploration, production and refining companies. These concentrations of customers may impact our overall exposure to credit risk as they may be similarly affected by changes in economic, regulatory and other factors. We are potentially exposed to concentration of credit risk primarily through our accounts receivable with our Parent. These receivables have payment terms of 30 days or less. We monitor the creditworthiness of our Parent, which has an investment grade credit rating and no history of collectability issues, and we monitor the creditworthiness of third-party major customers. We manage our exposure to credit risk through credit analysis, credit limit approvals and monitoring procedures, and for certain transactions, we may request letters of credit, prepayments or guarantees. As of December 31, 2014 and 2013, there were no such arrangements. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Commitments And Contingencies Disclosure [Abstract] | |||||||||||||||||||||
Commitments and Contingencies | 12. Commitments and Contingencies | ||||||||||||||||||||
Legal Proceedings | |||||||||||||||||||||
Our Parent and certain affiliates are named defendants in lawsuits and governmental proceedings that arise in the ordinary course of our business. For each of our outstanding legal matters, we evaluate the merits of the case, our exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. While there are still uncertainties related to the ultimate costs we may incur, based upon our evaluation and experience to date, we do not expect that the ultimate resolution of these matters will have a material adverse effect on our financial position, operating results, or cash flows. | |||||||||||||||||||||
Indemnification | |||||||||||||||||||||
Under our Omnibus Agreement, SPLC will indemnify us for certain environmental liabilities, tax liabilities, litigation and other matters attributable to the ownership or operation of our assets prior to the closing of the Offering. For the purposes of determining the indemnified amount of any loss suffered or incurred by the Partnership, the Partnership’s ownership of 43.0% of Zydeco, 28.6% of Mars, 49.0% of Bengal and 1.612% of Colonial shall be taken into account. The aggregate liability of SPLC shall not exceed $15.0 million and is subject to an aggregate deductible of $0.5 million before we are entitled to indemnification. | |||||||||||||||||||||
Indemnification for any unknown environmental liabilities is limited to liabilities due to occurrences prior to the closing of the Offering and that are identified before the third anniversary of the closing of the Offering. Indemnification for losses related to right-of-way and permits, retained assets or litigation matters (other than currently pending legal actions) are limited to events reported within one year of the Closing Date. SPLC will also indemnify us for tax liabilities which are identified prior to the date that is 60 days after the expiration of the statute of limitations applicable to such liabilities. We have agreed to indemnify SPLC for events and conditions associated with the ownership or operation of our assets that occur on or after the closing of the Offering and for certain environmental liabilities related to our assets to the extent SPLC is not required to indemnify us and limited to ownership percentages. | |||||||||||||||||||||
Other Commitments | |||||||||||||||||||||
We hold cancelable easements or rights-of-way arrangements from landowners permitting the use of land for the construction and operation of our pipeline systems. Obligations under these easements are not material to the results of our operations. | |||||||||||||||||||||
On December 1, 2014, Zydeco entered into a terminal services agreement (the "terminal agreement") to lease three new-build storage tanks from an affiliate of Shell at the Port Neches terminal. The terminal agreement calls for initial monthly payments of $0.4 million (the Facility Fee) to begin when the tanks are put in service, which is anticipated to be before the end of 2015.The 15 -year terminal agreement is considered a capital lease obligation to be recognized within our financial statements once the tanks are put in service. The terminal agreement has an option to extend for 5 years. The counterparty is entitled to an incentive payment of $0.1 million per month for each month the project is delivered prior to January 2016. | |||||||||||||||||||||
We are also obligated under various long-term and short-term noncancelable operating leases, primarily related to tank farm land leases. Several of the leases provide for renewal terms. Rental expense included in Operations and maintenance in the consolidated statements of income was $0.5 million for each of the years ended December 31, 2014, 2013 and 2012. As of December 31, 2014, we have the following long-term lease obligation related to a tank farm land lease (in millions of dollars): | |||||||||||||||||||||
Total | Less than 1 year | 1 year to 3 years | 4 years to 5 years | More than 5 years | |||||||||||||||||
Operating lease for land | $ | 1.8 | $ | 0.5 | $ | 1.1 | $ | 0.2 | $ | — | |||||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Event(s) | 13. Subsequent Event(s) |
We have evaluated events that occurred after December 31, 2014 through the issuance of these consolidated financial statements. Any material subsequent events that occurred during this time have been properly recognized or disclosed in the consolidated financial statements and accompanying notes. |
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | 14. Selected Quarterly Financial Data (Unaudited) | ||||||||||||||||||||||||
(in millions of dollars, except for per unit data) | Total Revenues | Income Before Income Taxes | Net Income | Net Income Subsequent to the Offering | Limited Partners' Interest in Net Income Subsequent to Initial Public Offering (1) | Net Income per Common Unit Subsequent to the Offering - Basic | |||||||||||||||||||
and Diluted | |||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||
First | $ | 36.3 | $ | 15.2 | $ | 15.2 | $ | — | $ | — | $ | — | |||||||||||||
Second | 43.6 | 26.6 | 26.6 | — | — | — | |||||||||||||||||||
Third | 46.9 | 31 | 31 | — | — | — | |||||||||||||||||||
Fourth | 55.6 | 35.8 | 35.6 | 13.4 | 13.1 | 0.1 | |||||||||||||||||||
2013 | |||||||||||||||||||||||||
First | $ | 26.9 | $ | 0.2 | $ | 0.2 | $ | — | $ | — | $ | — | |||||||||||||
Second | 26.9 | 11 | 11 | — | — | — | |||||||||||||||||||
Third | 20.2 | 22.4 | 22.4 | — | — | — | |||||||||||||||||||
Fourth | 20.3 | 5.8 | 5.7 | — | — | — | |||||||||||||||||||
-1 | On November 3, 2014, the Partnership completed its Offering of 46,000,000 common units representing limited partner interests. See Note 3 — Initial Public Offering for additional details. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Description of Business | Description of Business | |
We are a fee-based, growth-oriented master limited partnership recently formed by Shell to own, operate, develop and acquire pipelines and other midstream assets. Our assets consist of interests in entities that own crude oil and refined products pipelines serving as key infrastructure to transport growing onshore and offshore crude oil production to Gulf Coast refining markets and to deliver refined products from those markets to major demand centers. We own interests in two crude oil pipeline systems and two refined products systems. The crude oil pipeline systems, which are held by Zydeco and Mars, are strategically located along the Texas and Louisiana Gulf Coast and offshore Louisiana. These systems link major onshore and offshore production areas with key refining markets. The refined products pipeline systems, which are held by Bengal and Colonial, connect Gulf Coast and southeastern U.S. refineries to major demand centers from Alabama to New York. | ||
On July 1, 2014, SPLC formed a wholly owned subsidiary named Zydeco. In anticipation of an Offering of common units by the Partnership, SPLC contributed the fixed assets and certain agreements of Ho-Ho and other related fixed assets of SPLC to Zydeco. The working capital balances of $1.8 million related to Ho-Ho as of June 30, 2014 were not contributed from SPLC to Zydeco. | ||
We own a 43.0% interest in Zydeco, a 28.6% interest in Mars, a 49.0% interest in Bengal and a 1.612% interest in Colonial (the “Contributed Assets”). The 57.0% ownership interest in Zydeco retained by SPLC is reflected as noncontrolling interest in our consolidated financial statements. We account for each of our investments in Mars and Bengal using the equity method of accounting, and we account for our investment in Colonial using the cost method of accounting. | ||
We generate the majority of our revenue under long-term agreements by charging fees for the transportation of crude oil and refined products through our pipelines. We do not engage in the marketing and trading of any commodities. Our operations consist of one reportable segment. | ||
Basis of Presentation | Basis of Presentation | |
Our consolidated financial statements include all majority owned and non-majority owned subsidiaries required to be consolidated under generally accepted accounting principles in the United States (“GAAP”). Our reporting currency is U.S. dollars, and all references to dollars are U.S. dollars. Our accompanying consolidated financial statements have been prepared under the rules and regulations of the Securities and Exchange Commission (the “SEC”). These rules and regulations conform to the accounting principles contained in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification, the single source of GAAP. | ||
These consolidated financial statements were derived from the financial statements and accounting records of our Parent. These statements reflect the consolidated historical results of operations, financial position and cash flows of our Predecessor as if such business had been a separate entity for all periods presented. Prior to July 1, 2014, intercompany transactions and accounts between our Predecessor and SPLC have been reflected as “Net parent investment” in the consolidated balance sheets. The assets and liabilities in these consolidated financial statements have been reflected on our Parent’s historical cost basis, as immediately prior to the Offering, all of the assets and liabilities presented were transferred to the Partnership within our Parent’s consolidated group in a transaction under common control. The consolidated statements of income also include expense allocations to our Predecessor prior to July 1, 2014 for certain functions historically performed by our Parent, including allocations of general corporate expenses related to finance, legal, information technology, human resources, communications, ethics and compliance, shared services, employee benefits and incentives, insurance, and share-based compensation. The portions of expenses that are specifically identifiable were directly expensed to our Predecessor, with the remainder allocated on the basis of fixed assets, headcount, labor or other measure. Our management believes the assumptions underlying the consolidated financial statements, including the assumptions regarding allocation of expenses from our Parent, are reasonable. Nevertheless, the consolidated financial statements may not include all of the expenses that would have been incurred had we been a stand-alone company during the periods presented and may not reflect our consolidated statements of income, financial position and cash flows had we been a stand-alone company during the periods presented. Beginning from July 1, 2014, Zydeco, our Predecessor, entered into an operating and management agreement with SPLC under which SPLC provides general management and administrative services to us. Therefore, we no longer receive allocated corporate expenses from SPLC. We will continue to receive direct and allocated field and regional expenses from SPLC including payroll expenses not covered under the operating and management agreement. See details of related party transactions in Note 9 — Related Party Transactions. | ||
Prior to the contribution of fixed assets and certain agreements on July 1, 2014, the cash generated and used by our operations was deposited to SPLC’s centralized account which was comingled with the cash of other pipeline entities controlled by SPLC. SPLC funded our operating and investing activities as needed. Accordingly, we did not record any cash and cash equivalents held by SPLC on our behalf for any period presented. We reflected the cash generated by our operations and expenses paid by our Parent on behalf of our operations as a component of “Net parent investment” on the accompanying consolidated balance sheets and consolidated statements of changes in equity, and as part of “Net contributions from (distributions to) Parent” on the accompanying consolidated statements of cash flows. On July 1, 2014, we established our own cash accounts for the funding of our operating and investing activities, with the exception of the capital expenditures incurred by SPLC on our behalf and then contributed to us. See Note 3 — Initial Public Offering for additional details. | ||
All financial information presented for the periods after the Offering represents the consolidated statements of income, financial position and cash flows of the Partnership. Accordingly: | ||
· | Our consolidated statements of income and cash flows for the year ended December 31, 2014, consist of the consolidated results of the Partnership for the period from November 3, 2014 through December 31, 2014, and the combined results of our Predecessor for the period from January 1, 2014 through November 2, 2014. Our consolidated statements of income and cash flows for the years ended December 31, 2013 and 2012 consists entirely of the combined results of our Predecessor. | |
· | Our consolidated balance sheet at December 31, 2014, consists of the consolidated balances of the Partnership, while at December 31, 2013, it consists of the combined balances of our Predecessor. | |
· | Our consolidated statement of changes in equity for the year ended December 31, 2014, consists of both the combined activity for our Predecessor prior to November 3, 2014, and the consolidated activity for the Partnership completed at and subsequent to the Offering on November 3, 2014. Our consolidated statement of changes in equity for the years ended December 31, 2013 and 2012 consists entirely of the combined activity of our Predecessor. | |
The Partnership generally accounts for investments in 20% to 50%-owned affiliates, and investments in less than 20%-owned affiliates where it has the ability to exercise significant influence, under the equity method. We own a 43.0% interest in Zydeco, a 28.6% interest in Mars, a 49.0% interest in Bengal and a 1.612% interest in Colonial. Accordingly, the consolidated historical financial statements for the Partnership reflect the consolidation of Zydeco (100%), and the investments in Mars and Bengal using the equity method of accounting. Our investment in Colonial is accounted for as a cost method investment. | ||
Principles of Consolidation | Principles of Consolidation | |
Our consolidated financial statements include all subsidiaries where the Partnership has control. The assets and liabilities in the accompanying consolidated financial statements have been reflected on a historical basis. All significant intercompany accounts and transactions are eliminated upon consolidation. We own 43.0% of the ownership interest in Zydeco and record a noncontrolling interest for the 57.0% ownership interest retained by SPLC. We obtained control of Zydeco via the voting agreement between SPLC and us under which we have voting power over the ownership interests retained by SPLC in Zydeco. | ||
Regulation | Regulation | |
Certain businesses are subject to regulation by various authorities including, but not limited to the Federal Energy Regulatory Commission (“FERC”). Regulatory bodies exercise statutory authority over matters such as construction, rates and ratemaking and agreements with customers. | ||
Net Parent Investment | Net Parent Investment | |
In the accompanying consolidated balance sheets, Net parent investment represents SPLC’s historical investment in us, our accumulated net earnings through November 2, 2014, and the net effect of transactions with, and allocations from, SPLC and Shell Oil Company. | ||
Use of Estimates | Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from those estimates. | ||
Common Control Transactions | Common Control Transactions | |
Assets and businesses acquired from our Parent and its subsidiaries are accounted for as common control transactions whereby the net assets acquired are combined with ours at their historical costs. If any recognized consideration transferred in such a transaction exceeds the carrying value of the net assets acquired, the excess is treated as a capital distribution to our General Partner, similar to a dividend. If the carrying value of the net assets acquired exceeds any recognized consideration transferred including, if applicable, the fair value of any limited partner units issued, then that excess is treated as a capital contribution from our General Partner. To the extent that such transactions require prior periods to be recast, historical net equity amounts prior to the transaction date are reflected in “Net Parent Investment.” Cash consideration up to the carrying value of net assets acquired is presented as an investing activity in our consolidated statement of cash flows. Cash consideration in excess of the carrying value of net assets acquired is presented as a financing activity in our consolidated statement of cash flows. | ||
Revenue Recognition | Revenue Recognition | |
Our revenues are primarily generated from crude oil transportation services. In general, we recognize revenue from customers when all of the following criteria are met: (1) persuasive evidence of an exchange arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collectability is reasonably assured. We record revenue for crude oil transportation services over the period in which they are earned (i.e., either physical delivery of product has taken place or the services designated in the contract have been performed). We accrue revenue based on services rendered but not billed for that accounting month. Additionally, we provide crude storage rental services to third parties and related parties under long-term contracts. | ||
As a result of FERC regulations, revenues we collect may be subject to refund. We establish reserves for these potential refunds based on actual expected refund amounts on the specific facts and circumstances. We had no reserves for potential refunds as of December 31, 2014 and 2013. | ||
Our FERC-approved transportation services agreements on Zydeco entitle the customer to a specified amount of guaranteed capacity on a pipeline. This capacity cannot be pro-rated even if the pipeline is oversubscribed. In exchange, the customer makes a specified monthly payment regardless of the volume transported. If the customer does not ship its full guaranteed volume in a given month, it makes the full monthly cash payment and may ship the unused volume in a later month for no additional cash payment for up to 12 months, subject to availability on the pipeline. If there is insufficient capacity on the pipeline to allow the unused volume to be shipped, the customer forfeits its right to ship such unused volume. | ||
Cash collected from customers for shortfalls under these agreements are recorded as deferred revenue. The Company recognizes deferred revenue under these arrangements into revenue once all contingencies or potential performance obligations associated with the related volumes have either (1) been satisfied through the transportation of future excess volumes of crude oil, or (2) expired (or lapsed) through the passage of time pursuant to the terms of the FERC-approved transportation services agreement. Because the expiration of a customer’s right to utilize shortfall payments is twelve months or less, we classify deferred revenue as a short term liability. Deferred revenue balance was $20.0 million and zero as of December 31, 2014 and 2013, respectively. | ||
Our long-term transportation agreements and tariffs for crude oil transportation include a product loss allowance, or “PLA.” PLA is intended to assure proper measurement of the crude oil despite solids, water, evaporation and variable crude types that can cause mismeasurement. The PLA provides additional revenue for us if product losses on our pipelines are within the allowed levels, and we are required to compensate our customers for any product losses that exceed the allowed levels. We take title to any excess loss allowance when product losses are within an allowed level, and we convert that product to cash several times per year at prevailing market prices to a related party. | ||
For the years ended December 31, 2014, 2013 and 2012, our transportation services revenue from third parties was $136.8 million, $43.9 million and $56.4 million, respectively; our transportation services revenue from related parties was $42.0 million $43.5 million and $52.6 million, respectively; our storage services revenues from third parties were $0.1 million, $1.7 million and zero, respectively; our storage services revenues from related parties was $3.5 million, $5.2 million and $5.8 million, respectively. | ||
Cash and Cash Equivalents | Cash and cash equivalents | |
Cash and cash equivalents comprise cash on deposit at banks. | ||
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts | |
Accounts receivable represent valid claims against customers for products sold or services rendered, net of allowances for doubtful accounts. We assess the creditworthiness of our counterparties on an ongoing basis and require security, including prepayments and other forms of collateral, when appropriate. We establish provisions for losses on accounts receivable due from shippers and operators if we determine that we will not collect all or part of the outstanding balance. Outstanding customer receivables are regularly reviewed for possible nonpayment indicators, and allowances for doubtful accounts are recorded based upon management’s estimate of collectability at each balance sheet date. As of December 31, 2014 and 2013, our allowance for doubtful accounts was not material. | ||
Allowance Oil | Allowance Oil | |
A PLA factor per barrel is incorporated into applicable crude oil tariffs to cover evaporation and other loss in transit. Allowance oil represents the net difference between the tariff PLA volumes and the actual volumetric losses. Our allowance oil is valued at cost using the average market price of the relevant type of crude oil during the month product was transported. | ||
For the twelve months ended December 31, 2014, we reduced the net realizable value of allowance oil by $4.0 million. As of December 31, 2014 and 2013, allowance oil on the balance sheet was $3.4 million and $10.0 million, respectively. Gains and losses from the conversion of allowance oil to cash and gains and losses from pipeline operations that relate to allowance oil are recorded in Operations and maintenance expenses in the accompanying consolidated statements of income. During the fourth quarter of 2014, we made a sale of allowance oil at prevailing market prices to a Parent affiliate. See Note 9 — Related Party Transactions for more details. | ||
Equity Method Investments | Equity Method Investments | |
Investments in entities over which we have significant influence, but not control, are accounted for using the equity method of accounting. Income from equity method investments represents our proportionate share of net income generated by the equity method investees. Equity method investments are assessed for impairment whenever changes in the facts and circumstances indicate a loss in value has occurred, if the loss is deemed to be other than temporary. When the loss is deemed to be other than temporary, the carrying value of the equity method investment is written down to fair value, and the amount of the write-down is included in net income. Differences in the basis of the investments and the separate net asset value of the investees, if any, are amortized into net income over the remaining useful lives of the underlying assets. Amortization expense of less than $0.1 million related to equity method investments is in the accompanying consolidated statement of income for the year ended December 31, 2014. As of December 31, 2014, the equity investment exceeded our equity in the net assets of Mars and Bengal by approximately $12.0 million and $6.3 million. | ||
Property, Plant and Equipment | Property, Plant and Equipment | |
Our property, plant and equipment is recorded at its historical cost of construction or, upon acquisition, at either the fair value of the assets acquired or the cost to the entity that placed the asset in service. Expenditures for major renewals and betterments are capitalized while those minor replacement, maintenance, and repairs which do not improve or extend asset life are expensed when incurred. For constructed assets, we capitalize all construction-related direct labor and material costs, as well as indirect construction costs. | ||
We use the straight-line method to depreciate property, plant and equipment based on the estimated useful life of the asset. We report gains or losses on dispositions of fixed assets as Loss (gain) from disposition of fixed assets in the accompanying consolidated statements of income. | ||
Impairment of Long-lived Assets | Impairment of Long-lived Assets | |
We evaluate long lived assets of identifiable business activities for impairment when events or changes in circumstances indicate, in our management’s judgment, that the carrying value of such assets may not be recoverable. These events include market declines that are believed to be other than temporary, changes in the manner in which we intend to use a long-lived asset, decisions to sell an asset and adverse changes in the legal or business environment such as adverse actions by regulators. If an event occurs, which is a determination that involves judgment, we evaluate the recoverability of our carrying values based on the long-lived asset’s ability to generate future cash flows on an undiscounted basis. When an indicator of impairment has occurred, we compare our management’s estimate of forecasted discounted future cash flows attributable to the assets to the carrying value of the assets to determine whether the assets are recoverable (i.e. the discounted future cash flows exceed the net carrying value of the assets). If the assets are not recoverable, we determine the amount of the impairment recognized in the financial statements by estimating the fair value of the assets and recording a loss for the amount that the carrying value exceeds the estimated fair value. We determined that there were no asset impairments in the years ended December 31, 2014, 2013 or 2012. | ||
Income Taxes | Income Taxes | |
We are not a taxable entity for U.S. federal income tax purposes or for the majority of states that impose an income tax. Taxes on our net income are generally borne by our partners through the allocation of taxable income. Our income tax expense results from partnership activity in the state of Texas, as conducted by Zydeco. Income taxes for the years ended December 31, 2014, 2013, and 2012 were $0.2 million, $0.1 million and $0.1 million, respectively. | ||
Cost Method Investment | Cost Method Investment | |
We account for investments in entities we do not control or account for under the equity method under the cost method. Cost method investments are reported as Other assets in our consolidated balance sheets. As of December 31, 2014, our cost investment included a 1.612% interest in Colonial with a balance of $3.7 million. | ||
Asset Retirement Obligations | Asset Retirement Obligations | |
Asset retirement obligations represent legal and constructive obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal use of the asset. We record liabilities for obligations related to the retirement and removal of long-lived assets used in our businesses at fair value on a discounted basis when they are incurred and can be reasonably estimated. Amounts recorded for the related assets are increased by the amount of these obligations. Over time, the liabilities increase due to the change in their present value, and the initial capitalized costs are depreciated over the useful lives of the related assets. The liabilities are eventually extinguished when settled at the time the asset is taken out of service. | ||
We continue to evaluate our asset retirement obligations and future developments could impact the amounts we record. The demand for our pipelines depends on the ongoing demand to move crude oil through the system. Although individual assets will be replaced as needed, our pipelines will continue to exist for an indefinite useful life. As such, there is uncertainty around the timing of any asset retirement activities. As a result, we determined that there is not sufficient information to make a reasonable estimate of the asset retirement obligations for our assets and we have not recognized any asset retirement obligations as of December 31, 2014 and 2013. | ||
Pensions and Other Postretirement Benefits | Pensions and Other Postretirement Benefits | |
We do not have our own employees. Employees that work on our pipeline are employees of SPLC and we share employees with other SPLC-controlled and non-controlled entities. For presentation of these accompanying consolidated financial statements, our portion of payroll costs and employee benefit plan costs have been allocated to us as a charge to us by SPLC and Shell Oil Company. Shell Oil Company sponsors various employee pension and postretirement health and life insurance plans. For purposes of these accompanying consolidated financial statements, we are considered to be participating in the benefit plans of Shell Oil Company. We participate in the following defined benefits plans: Shell Oil Pension Plan, Shell Oil Retiree Health Care Plan, and Pennzoil-Quaker State Retiree Medical & Life Insurance. As a participant in these benefit plans, we recognize as expense in each period an allocation from Shell Oil Company, and we do not recognize any employee benefit plan assets or liabilities. See Note 9 — Related Party Transactions for total pension and benefit expenses under these plans. | ||
Legal | Legal | |
We are subject to litigation and regulatory proceedings as the result of our business operations and transactions. We utilize both internal and external counsel in evaluating our potential exposure to adverse outcomes from orders, judgments or settlements. In general, we expense legal costs as incurred. When we identify specific litigation that is expected to continue for a significant period of time, is reasonably possible to occur and may require substantial expenditures, we identify a range of possible costs expected to be required to litigate the matter to a conclusion or reach an acceptable settlement, and we accrue for the lower end of the range. To the extent that actual outcomes differ from our estimates, or additional facts and circumstances cause us to revise our estimates, our earnings will be affected. | ||
Environmental Matters | Environmental Matters | |
We are subject to federal, state, and local environmental laws and regulations. Environmental expenditures are expensed or capitalized depending on their economic benefit. We expense costs such as permits, compliance with existing environmental regulations, remedial investigations, soil sampling, testing and monitoring costs to meet applicable environmental laws and regulations where prudently incurred or determined to be reasonably possible in the ordinary course of business. We are permitted to recover such expenditure through tariff rates charged to customers. We also expense costs that relate to an existing condition caused by past environmental incidents, which do not contribute to current or future revenue generation. We discount environmental liabilities to a net present value, and we record environmental liabilities when environmental assessments and/or remedial efforts are probable and we can reasonably estimate the costs. Generally, our recording of these accruals coincides with our completion of a feasibility study or our commitment to a formal plan of action. We recognize receivables for anticipated associated insurance recoveries when such recoveries are deemed to be probable. We do not use regulatory accounting principles. | ||
For the years ended December 31, 2014, 2013 and 2012, we incurred $3.0 million, $13.6 million and zero environmental cleanup costs. Due to the formation of Zydeco via the contribution of fixed assets and certain agreements from SPLC, Zydeco was indemnified by SPLC against environmental cleanup costs for incidents that occurred prior to Zydeco’s formation on July 1, 2014. In 2013, the West Columbia pipeline experienced a breach in which approximately 940 barrels of oil released in the vicinity of the pipeline. During 2013, we incurred $12.1 million in costs primarily related to several large maintenance projects for the containment of this incident at the West Columbia pipeline. As of December 31, 2014 and December 31, 2013, we accrued zero and $2.8 million, respectively, for environmental clean-up costs. Refer to Note 3 — Initial Public Offering under the Omnibus Agreement for additional details. | ||
We routinely conduct reviews of potential environmental issues and claims that could impact our assets or operations. These reviews assist us in identifying environmental issues and estimating the costs and timing of remediation efforts. In making environmental liability estimations, we consider the material effect of environmental compliance, pending legal actions against us and potential third-party liability claims. Often, as the remediation evaluation and effort progresses, additional information is obtained, requiring revisions to estimated costs. These revisions are reflected in our income in the period in which they are probable and reasonably estimable. | ||
Other Contingencies | Other Contingencies | |
We recognize liabilities for other contingencies when we have an exposure that indicates it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Where the most likely outcome of a contingency can be reasonably estimated, we accrue a liability for that amount. Where the most likely outcome cannot be estimated, a range of potential losses is established and if no one amount in that range is more likely than any other, the lower end of the range is accrued. | ||
Fair Value Estimates | Fair Value Estimates | |
We measure assets and liabilities requiring fair value presentation or disclosure using an exit price (i.e., the price that would be received to sell an asset or paid to transfer a liability) and disclose such amounts according to the quality of valuation inputs under the following hierarchy: | ||
Level 1: Quoted prices in an active market for identical assets or liabilities. | ||
Level 2: Inputs other than quoted prices that are directly or indirectly observable. | ||
Level 3: Unobservable inputs that are significant to the fair value of assets or liabilities. | ||
We classify the fair value of an asset or liability based on the lowest level of input significant to its measurement. A fair value initially reported as Level 3 will be subsequently reported as Level 2 if the unobservable inputs become inconsequential to its measurement, or corroborating market data becomes available. Asset and liability fair values initially reported as Level 2 will be subsequently reported as Level 3 if corroborating market data becomes unavailable. | ||
The carrying amounts of our accounts receivable, accounts payable, accrued liabilities and revolving credit agreements approximate their carrying values due to their short term nature. | ||
Nonrecurring Fair Value Measurements — Fair value measurements are applied with respect to our nonfinancial assets and liabilities measured on a nonrecurring basis, which consist primarily of asset retirement obligations. Nonrecurring fair value measurements are also applied, when applicable, to determine the fair value of our long-lived assets. | ||
Net Income per Limited Partner Unit | Net income per limited partner unit | |
Net income per unit applicable to common limited partner units and to subordinated limited partner units is computed by dividing the respective limited partners’ interest in net income for the period subsequent to the Offering by the weighted average number of common units and subordinated units, respectively, outstanding for the period. Because we have more than one class of participating securities, we use the two-class method when calculating the net income per unit applicable to limited partners. The classes of participating securities include common units, subordinated units, general partner units, and incentive distribution rights. Basic and diluted net income per unit are the same because we do not have any potentially dilutive units outstanding for the period presented. | ||
Comprehensive Income | Comprehensive Income | |
We have not reported comprehensive income due to the absence of items of other comprehensive income in the periods presented. | ||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |
In April 2014, the FASB issued accounting standards updates to Topic 205, “Presentation of Financial Statements” and to Topic 360, “Property, Plant, and Equipment” to change the criteria for reporting discontinued operations. The amendments modify the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have or will have a major effect on an entity’s operations and financial results. These amendments require additional disclosures about discontinued operations and new disclosures for other disposals of individually material components of an organization that do not meet the definition of a discontinued operation. In addition, the guidance allows companies to have significant continuing involvement and continuing cash flows with the discontinued operation. These provisions are effective prospectively for annual reporting periods beginning on or after December 15, 2014, and interim periods within those annual periods, with early adoption permitted. The adoption of this guidance, effective January 1, 2015, will not affect our financial position or results of operations; however, it may result in changes to the manner in which future dispositions of operations or assets, if any, are presented in our consolidated financial statements, or it may require additional disclosures. | ||
In May 2014, the FASB and the International Accounting Standards Board (“IASB”) issued a new accounting standard, Topic 606, “Revenue from Contracts with Customers,” to clarify the principles for recognizing revenue. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The standard also requires improved interim and annual disclosures that enable the users of financial statements to better understand the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. The accounting standards update will be effective on a retrospective or modified retrospective basis for annual reporting periods beginning after December 15, 2016, and interim periods within those years, with no early adoption permitted. We are currently evaluating the effect that adopting this new standard will have on our consolidated financial statements and related disclosures. | ||
In August 2014, the FASB issued accounting standards update, Subtopic 205-40, “Presentation of Financial Statements—Going Concern,” requiring management to evaluate whether events or conditions could impact an entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or available to be issued) and to provide disclosures if necessary. Disclosures will be required if conditions give rise to substantial doubt and the type of disclosure will be determined based on whether management's plans will be able to alleviate the substantial doubt. The accounting standards update will be effective for the first annual period ending after December 15, 2016, and for annual periods and interim periods thereafter with early application permitted. The adoption of this guidance will not affect our financial position or results of operations. | ||
In November 2014, the FASB issued ASU 2014-17 that gives acquired entities that are businesses or nonprofit activities the option to apply pushdown accounting in their separate financial statements when an acquirer obtains control of them. The adoption of this guidance, effective November 18, 2014, will not affect our financial position or results of operations. | ||
In January 2015, the FASB issued accounting standards update, Subtopic 225-20, “Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items,” The adoption of this guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The adoption of this guidance will not affect our financial position or results of operations. | ||
In February 2015, the FASB issued accounting standards updates to topic 810, “Consolidation” to change the criteria for reporting entities that are required to evaluate whether they should consolidate certain legal entities. The amendments require additional testing to determine if a legal entity qualifies as a Variable Interest Entity and whether the entity should be consolidated. These provisions are effective prospectively for annual reporting periods beginning on or after December 15, 2015, and interim periods within those annual periods, with early adoption permitted. The adoption of this guidance will not affect our financial position or results of operations. |
Accounts_Receivable_Tables
Accounts Receivable (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Receivables [Abstract] | |||||||||
Summary of Accounts Receivable from Third Parties | Accounts receivable from third parties consist of the following at December 31 (in millions of dollars): | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Trade customers | $ | 16.3 | $ | 4.9 | |||||
Allowance for doubtful accounts | — | (0.1 | ) | ||||||
Accounts receivable - third parties, net | $ | 16.3 | $ | 4.8 | |||||
Equity_Method_Investments_Tabl
Equity Method Investments (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity Method Investments And Joint Ventures [Abstract] | |||||||||||||
Summary of Balance Sheet and Income Statement Data for Equity Method Investments | The following tables present aggregated selected balance sheet and income statement data for our equity method investments Mars and Bengal (on a 100% basis) for all periods presented: | ||||||||||||
November 3 - December 31, 2014 | |||||||||||||
Mars | Bengal | Total | |||||||||||
Statements of Income | |||||||||||||
Total revenues(1) | $ | — | $ | — | $ | — | |||||||
Total operating expenses(1) | — | — | — | ||||||||||
Operating income(1) | — | — | — | ||||||||||
Net income | 11.9 | 6.6 | 18.5 | ||||||||||
Balance Sheets | |||||||||||||
Current assets | $ | 38.3 | $ | 35.9 | $ | 74.2 | |||||||
Non-current assets | 214 | 146.7 | 360.7 | ||||||||||
Total assets | $ | 252.3 | $ | 182.6 | $ | 434.9 | |||||||
Current liabilities | 6.1 | 19 | 25.1 | ||||||||||
Non-current liabilities | — | 1.2 | 1.2 | ||||||||||
Equity | 246.2 | 162.4 | 408.6 | ||||||||||
Total liabilities and equity | $ | 252.3 | $ | 182.6 | $ | 434.9 | |||||||
-1 | Interests in Mars and Bengal were acquired by the Partnership on November 3, 2014. For the year ended December 31, 2014, Mars total revenue, total operating expenses and operating income (on a 100% basis) was $160.5 million, $70.6 million, and $89.9 million, respectively, and Bengal total revenue, total operating expenses and operating income (on a 100% basis) was $65.9 million, $27.2 million, and $38.7 million, respectively. |
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Property Plant And Equipment [Abstract] | |||||||||||||
Components of Property, Plant and Equipment | Property, plant and equipment consist of the following at December 31 (in millions of dollars): | ||||||||||||
December 31, | |||||||||||||
Depreciable | 2014 | 2013 | |||||||||||
Life | |||||||||||||
Land | — | $ | 1.1 | $ | 0.7 | ||||||||
Building and improvements | 10 - 40 years | 10.5 | 8.2 | ||||||||||
Pipeline and equipment | 10 - 30 years | 313.6 | 257 | ||||||||||
Other | 5 - 25 years | 5.5 | 5.2 | ||||||||||
330.7 | 271.1 | ||||||||||||
Less: Accumulated depreciation | (66.5 | ) | (54.8 | ) | |||||||||
264.2 | 216.3 | ||||||||||||
Construction in progress | 10.8 | 7.2 | |||||||||||
Property, plant and equipment, net | $ | 275 | $ | 223.5 | |||||||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables And Accruals [Abstract] | |||||||||
Schedule of Accrued Liabilities | Accrued liabilities consist of the following at December 31 (in millions of dollars): | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Transportation, project engineering | $ | 0.6 | $ | 27.2 | |||||
Property taxes | 0.2 | 0.6 | |||||||
Other accrued liabilities | 0.1 | 1.5 | |||||||
Accrued liabilities - third parties | $ | 0.9 | $ | 29.3 | |||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Related Party Transactions [Abstract] | |||||||||||||
Schedule of Other Related Party Balances | Other related party balances consist of the following as of December 31 (in millions of dollars): | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Accounts receivable | $ | 10.3 | $ | 11.9 | |||||||||
Prepaid expenses and other current assets | 1.8 | 2 | |||||||||||
Other assets | 0.5 | — | |||||||||||
Total assets | $ | 12.6 | $ | 13.9 | |||||||||
Accounts payable | $ | 10.6 | $ | — | |||||||||
Distribution payable to SPLC | 11.9 | — | |||||||||||
Deferred revenue | 4.7 | — | |||||||||||
Accrued liabilities | 1.4 | — | |||||||||||
Total liabilities | $ | 28.6 | $ | — | |||||||||
Schedule Of Related Party Expenses Including Personnel Costs | The following table shows related party expenses, including personnel costs described above, incurred by Shell Oil Company and SPLC on our behalf that are reflected in the accompanying consolidated statements of income for the years ended December 31 (in millions of dollars): | ||||||||||||
Year Ended December 31 | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Operations and maintenance - related parties | $ | 16 | $ | 14.9 | $ | 15.1 | |||||||
General and administrative - related parties | 13.6 | 11.1 | 10 | ||||||||||
Net_Income_Per_Limited_Partner1
Net Income Per Limited Partner Unit (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Partners Capital Notes [Abstract] | |||||||||||||||||
Schedule of Allocation of Net Income to Arrive at Net Income Per Limited Partner Unit | The following table shows the allocation of net income to arrive at net income per limited partner unit: | ||||||||||||||||
2014 | |||||||||||||||||
(in millions of dollars) | |||||||||||||||||
Net income from November 3, 2014 through | $ | 13.4 | |||||||||||||||
December 31,2014 | |||||||||||||||||
Less: | |||||||||||||||||
General partner's distribution declared | 0.3 | ||||||||||||||||
Limited partners' distribution declared on common units | 7 | ||||||||||||||||
Limited partner's distribution declared on subordinated units | 7.1 | ||||||||||||||||
Distributions in excess of net income subsequent to the Offering | $ | (1.0 | ) | ||||||||||||||
Schedule of Basic and Diluted Net Income Per Unit | 2014 | ||||||||||||||||
General Partner | Limited Partners' Common Units | Limited Partner's Subordinated Units | Total | ||||||||||||||
Net income from November 3, 2014 through | (in millions of dollars, except per unit data) | ||||||||||||||||
December 31,2014 | |||||||||||||||||
Distributions declared | $ | 0.3 | $ | 7 | $ | 7.1 | $ | 14.4 | |||||||||
Distributions in excess of net income subsequent to the Offering | — | (0.5 | ) | (0.5 | ) | (1.0 | ) | ||||||||||
Net income subsequent to the Offering | $ | 0.3 | $ | 6.5 | $ | 6.6 | $ | 13.4 | |||||||||
Weighted average units outstanding (in millions): | |||||||||||||||||
Basic | 2.7 | 67.5 | 67.5 | 137.7 | |||||||||||||
Diluted | 2.7 | 67.5 | 67.5 | 137.7 | |||||||||||||
Net income per limited partner unit (in dollars): | |||||||||||||||||
Basic | $ | 0.1 | $ | 0.1 | |||||||||||||
Diluted | $ | 0.1 | $ | 0.1 | |||||||||||||
Transactions_with_Major_Custom1
Transactions with Major Customers and Concentration of Credit Risk (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Risks And Uncertainties [Abstract] | |||||||||||||
Schedule of Revenues from Third Party Customers | The following table shows revenues from third party customers that accounted for 10% or a greater share of consolidated revenues for each of the three years ended December 31 (in millions of dollars): | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Customer A | $ | 15.9 | $ | 14.6 | $ | 15.7 | |||||||
Customer B | 39.4 | 1.8 | — | ||||||||||
Customer C | 44.6 | 6.2 | — | ||||||||||
Customer E | 20.2 | — | — | ||||||||||
Schedule of Accounts Receivable from Third Party Customers | Our Parent and our Parent’s affiliates accounted for 25%, 52% and 51% of our total revenues for the years ended December 31, 2014, 2013 and 2012, respectively. The following table shows accounts receivable from third party customers that accounted for 10% or a greater share of consolidated accounts receivable, net for each of the two years ended December 31 (in millions of dollars): | ||||||||||||
2014 | 2013 | ||||||||||||
Customer A | $ | 0.9 | $ | 1.1 | |||||||||
Customer B | 6.3 | 0.2 | |||||||||||
Customer C | 5.7 | 1.3 | |||||||||||
Customer D | — | 0.5 | |||||||||||
Customer E | 3 | — | |||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Commitments And Contingencies Disclosure [Abstract] | |||||||||||||||||||||
Schedule of Long-term Lease Obligations | As of December 31, 2014, we have the following long-term lease obligation related to a tank farm land lease (in millions of dollars): | ||||||||||||||||||||
Total | Less than 1 year | 1 year to 3 years | 4 years to 5 years | More than 5 years | |||||||||||||||||
Operating lease for land | $ | 1.8 | $ | 0.5 | $ | 1.1 | $ | 0.2 | $ | — | |||||||||||
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | |||||||||||||||||||||||||
(in millions of dollars, except for per unit data) | Total Revenues | Income Before Income Taxes | Net Income | Net Income Subsequent to the Offering | Limited Partners' Interest in Net Income Subsequent to Initial Public Offering (1) | Net Income per Common Unit Subsequent to the Offering - Basic | |||||||||||||||||||
and Diluted | |||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||
First | $ | 36.3 | $ | 15.2 | $ | 15.2 | $ | — | $ | — | $ | — | |||||||||||||
Second | 43.6 | 26.6 | 26.6 | — | — | — | |||||||||||||||||||
Third | 46.9 | 31 | 31 | — | — | — | |||||||||||||||||||
Fourth | 55.6 | 35.8 | 35.6 | 13.4 | 13.1 | 0.1 | |||||||||||||||||||
2013 | |||||||||||||||||||||||||
First | $ | 26.9 | $ | 0.2 | $ | 0.2 | $ | — | $ | — | $ | — | |||||||||||||
Second | 26.9 | 11 | 11 | — | — | — | |||||||||||||||||||
Third | 20.2 | 22.4 | 22.4 | — | — | — | |||||||||||||||||||
Fourth | 20.3 | 5.8 | 5.7 | — | — | — | |||||||||||||||||||
-1 | On November 3, 2014, the Partnership completed its Offering of 46,000,000 common units representing limited partner interests. See Note 3 — Initial Public Offering for additional details. |
Business_and_Basis_of_Presenta1
Business and Basis of Presentation - Additional Information (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Jul. 01, 2014 |
Segment | ||
Description Of Business And Basis Of Presentation [Line Items] | ||
Working capital balances | $1.80 | |
Number of segments | 1 | |
Zydeco | ||
Description Of Business And Basis Of Presentation [Line Items] | ||
Minority interest ownership percentage by parent | 43.00% | |
Minority interest ownership percentage by noncontrolling owners | 57.00% | |
Colonial | ||
Description Of Business And Basis Of Presentation [Line Items] | ||
Cost method investment percentage | 1.61% | |
Mars | ||
Description Of Business And Basis Of Presentation [Line Items] | ||
Equity method investment percentage | 28.60% | |
Bengal | ||
Description Of Business And Basis Of Presentation [Line Items] | ||
Equity method investment percentage | 49.00% | |
Ho-Ho | ||
Description Of Business And Basis Of Presentation [Line Items] | ||
Working capital balances | $1.80 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Summary Of Significant Accounting Policies [Line Items] | |||
Reserves for potential refund | $0 | $0 | |
Deferred revenue, current | 20,000,000 | 0 | |
Third parties | 136,900,000 | 45,600,000 | 56,400,000 |
Related parties | 45,500,000 | 48,700,000 | 58,400,000 |
Allowance oil reduction to net realizable value | 4,000,000 | 0 | 0 |
Allowance oil | 3,400,000 | 10,000,000 | |
Asset impairments | 0 | 0 | 0 |
Income tax expense | 200,000 | 100,000 | 100,000 |
Asset retirement obligations | 0 | 0 | |
Clean-up costs incurred | 3,000,000 | 13,600,000 | 0 |
Project maintenance costs | 12,100,000 | ||
Clean-up costs accrued | 0 | 2,800,000 | |
Potentially dilutive units outstanding | 0 | 0 | |
West Columbia Pipeline | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Barrels of oil released | 940 | ||
Colonial | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Cost method investments | 3,700,000 | ||
Cost method investment percentage | 1.61% | ||
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Amortization expenses related to equity method investment | 100,000 | ||
Transportation and Allowance Oil | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Third parties | 136,800,000 | 43,900,000 | 56,400,000 |
Related parties | 42,000,000 | 43,500,000 | 52,600,000 |
Storage Services | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Third parties | 100,000 | 1,700,000 | 0 |
Related parties | 3,500,000 | 5,200,000 | 5,800,000 |
Zydeco | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Ownership interest (in percentage) | 43.00% | ||
Ownership non controlling interest | 57.00% | ||
Mars | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Difference in equity investment and equity in net assets | 12,000,000 | ||
Bengal | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Difference in equity investment and equity in net assets | $6,300,000 |
Initial_Public_Offering_Additi
Initial Public Offering - Additional Information (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Jul. 01, 2014 | Nov. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 03, 2014 |
Initial Public Offering [Line Items] | ||||||
Sale of common units, date | 3-Nov-14 | |||||
Common units for initial public offering | 46,000,000 | |||||
Net proceeds from issuance of common limited partner units | $1,011.70 | $1,011.70 | $0 | $0 | ||
Contribution of fixed assets from Parent | 249.3 | 11.4 | 0 | 0 | ||
Other fixed assets contributed by SPLC to Zydeco | 11.4 | |||||
Percentage of ownership acquired | 100.00% | |||||
Working capital balances | 1.8 | |||||
Contribution by SPLC | 16.5 | |||||
Zydeco | ||||||
Initial Public Offering [Line Items] | ||||||
Cash contribution in exchange for additional interest | 115.8 | |||||
Annual management fee | 7 | |||||
Shell Pipeline Company L P | ||||||
Initial Public Offering [Line Items] | ||||||
Offering costs | 46.3 | |||||
General partners' capital account, units issued | 2,754,084 | 0 | ||||
Aggregate percentage of general partner interest | 2.00% | |||||
Total net proceeds from initial public offering distributed to SPLC | 911.7 | |||||
Payment of general and administrative fee | 8.5 | |||||
Over-Allotment Option | ||||||
Initial Public Offering [Line Items] | ||||||
Common units for initial public offering | 6,000,000 | |||||
Limited Partners' Common Units | ||||||
Initial Public Offering [Line Items] | ||||||
Common units for initial public offering | 46,000,000 | |||||
Price of common unit (in USD per common unit) | $23 | |||||
Limited Partners' Common Units | Shell Pipeline Company L P | ||||||
Initial Public Offering [Line Items] | ||||||
Limited partners' capital account, units issued | 21,475,068 | |||||
Ownership interest (in percentage) | 64.60% | |||||
General Partner | ||||||
Initial Public Offering [Line Items] | ||||||
Cash distribution to parent | 795.9 | |||||
Proceeds from offering retained for general partnership purposes | $100 | |||||
General Partner | Shell Pipeline Company L P | ||||||
Initial Public Offering [Line Items] | ||||||
General partners' capital account, units issued | 2,754,084 | |||||
Limited Partner's Subordinated Units | Shell Pipeline Company L P | ||||||
Initial Public Offering [Line Items] | ||||||
Limited partners' capital account, units issued | 67,475,068 |
Accounts_Receivable_Summary_of
Accounts Receivable - Summary of Accounts Receivable from Third Parties (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Receivables [Abstract] | ||
Trade customers | $16.30 | $4.90 |
Allowance for doubtful accounts | 0 | -0.1 |
Accounts receivable - third parties, net | $16.30 | $4.80 |
Equity_Method_Investments_Addi
Equity Method Investments - Additional Information (Details) (USD $) | 12 Months Ended | 2 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 |
Schedule Of Equity Method Investments [Line Items] | ||||
Equity method investments | $160.70 | $0 | $160.70 | |
Income earned from equity method investments | 6.7 | 0 | 0 | |
Mars | ||||
Schedule Of Equity Method Investments [Line Items] | ||||
Equity method investment percentage | 28.60% | 28.60% | ||
Equity method investments | 85.7 | 85.7 | ||
Income earned from equity method investments | 3.4 | |||
Bengal | ||||
Schedule Of Equity Method Investments [Line Items] | ||||
Equity method investment percentage | 49.00% | 49.00% | ||
Equity method investments | 75 | 75 | ||
Income earned from equity method investments | $3.30 |
Equity_Method_Investments_Summ
Equity Method Investments - Summary of Balance Sheet and Income Statement Data for Equity Method Investments (Details) (USD $) | 2 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 |
Statements of Income | ||
Net income | $18.50 | |
Balance Sheets | ||
Current assets | 74.2 | 74.2 |
Non-current assets | 360.7 | 360.7 |
Total assets | 434.9 | 434.9 |
Current liabilities | 25.1 | 25.1 |
Non-current liabilities | 1.2 | 1.2 |
Equity | 408.6 | 408.6 |
Total liabilities and equity | 434.9 | 434.9 |
Mars | ||
Statements of Income | ||
Total revenues | 160.5 | |
Total operating expenses | 70.6 | |
Operating income | 89.9 | |
Net income | 11.9 | |
Balance Sheets | ||
Current assets | 38.3 | 38.3 |
Non-current assets | 214 | 214 |
Total assets | 252.3 | 252.3 |
Current liabilities | 6.1 | 6.1 |
Equity | 246.2 | 246.2 |
Total liabilities and equity | 252.3 | 252.3 |
Bengal | ||
Statements of Income | ||
Total revenues | 65.9 | |
Total operating expenses | 27.2 | |
Operating income | 38.7 | |
Net income | 6.6 | |
Balance Sheets | ||
Current assets | 35.9 | 35.9 |
Non-current assets | 146.7 | 146.7 |
Total assets | 182.6 | 182.6 |
Current liabilities | 19 | 19 |
Non-current liabilities | 1.2 | 1.2 |
Equity | 162.4 | 162.4 |
Total liabilities and equity | $182.60 | $182.60 |
Equity_Method_Investments_Summ1
Equity Method Investments - Summary of Balance Sheet and Income Statement Data for Equity Method Investments (Parenthetical) (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Mars | |
Schedule Of Equity Method Investments [Line Items] | |
Total revenues | $160.50 |
Total operating expenses | 70.6 |
Operating income | 89.9 |
Bengal | |
Schedule Of Equity Method Investments [Line Items] | |
Total revenues | 65.9 |
Total operating expenses | 27.2 |
Operating income | $38.70 |
Property_Plant_and_Equipment_C
Property, Plant and Equipment - Components of Property,Plant and Equipment (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Property Plant And Equipment [Line Items] | ||
Land | 1.1 | $0.70 |
Building and improvements | 10.5 | 8.2 |
Pipeline and equipment | 313.6 | 257 |
Other | 5.5 | 5.2 |
Property, plant and equipment, gross | 330.7 | 271.1 |
Less: Accumulated depreciation | -66.5 | -54.8 |
Property plant and equipment excluding construction in progress | 264.2 | 216.3 |
Construction in progress | 10.8 | 7.2 |
Property, plant and equipment, net | 275 | $223.50 |
Building and Improvements | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, depreciable life | 10 years | |
Building and Improvements | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, depreciable life | 40 years | |
Pipeline and Equipment | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, depreciable life | 10 years | |
Pipeline and Equipment | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, depreciable life | 30 years | |
Other | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, depreciable life | 5 years | |
Other | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, depreciable life | 25 years |
Property_Plant_and_Equipment_A
Property, Plant and Equipment - Additional Information (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Aug. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property Plant And Equipment [Abstract] | ||||
Depreciation | $11.60 | $6.90 | $5.80 | |
Gain (loss) from disposition of fixed assets | $20.80 | ($0.20) | $20.80 | ($1.20) |
Accrued_Liabilities_Schedule_o
Accrued Liabilities - Schedule of Accrued Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Payables And Accruals [Abstract] | ||
Transportation, project engineering | $0.60 | $27.20 |
Property taxes | 0.2 | 0.6 |
Other accrued liabilities | 0.1 | 1.5 |
Accrued liabilities - third parties | $0.90 | $29.30 |
Debt_Additional_Information_De
Debt - Additional Information - (Details) (Revolving Credit Facility, USD $) | 12 Months Ended | 1 Months Ended | 6 Months Ended | |
Dec. 31, 2014 | Aug. 31, 2014 | Dec. 31, 2014 | Nov. 03, 2014 | |
Line Of Credit Facility [Line Items] | ||||
Line of credit facility maximum borrowing capacity | $300,000,000 | |||
Line of credit facility covenant terms | The Revolver contains representations and warranties, covenants such as restricting additional indebtedness above $600 million and requiring pari passu ranking with any new indebtedness, and contains customary events of default, such as nonpayment of principal when due, nonpayment of interest, fees or other amounts, violation of covenants, and cross-payment default (due to indebtedness in excess of $100 million). | |||
Line of credit facility maturity Period | 2019-10 | |||
Revolving credit facility, interest rate terms | Borrowings under the Revolver bear interest at the three-month LIBOR rate plus a margin. | |||
Credit facility issuance fee | 500,000 | |||
Issuance fee amortization period | 5 years | |||
Interest and fee expenses | 100,000 | |||
Borrowings under the revolver | 0 | 0 | ||
Borrowings outstanding | 0 | 0 | ||
Zydeco | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility maximum borrowing capacity | 30,000,000 | |||
Line of credit facility covenant terms | The credit agreement governing the Zydeco Revolver provides for covenants such as requiring pari passu ranking with any new indebtedness and contains customary events of default, such as nonpayment of principal when due, nonpayment of interest, fees or other amounts, violation of covenants, and cross-payment default (due to indebtedness in excess of $100 million). | |||
Line of credit facility maturity Period | 2019-08 | |||
Revolving credit facility, interest rate terms | Borrowings under the credit facility bear interest at the three-month LIBOR rate plus a margin. | |||
Interest and fee expenses | 100,000 | |||
Borrowings outstanding | 0 | 0 | ||
Amount borrowed and repaid | 6,000,000 | |||
Term of repayment | two months of the withdrawal | |||
Other Assets | ||||
Line Of Credit Facility [Line Items] | ||||
Credit facility issuance fee | 500,000 | |||
Minimum | ||||
Line Of Credit Facility [Line Items] | ||||
Restriction on additional indebtedness | 600,000,000 | |||
Limit on indebtedness | 100,000,000 | |||
Minimum | Zydeco | ||||
Line Of Credit Facility [Line Items] | ||||
Limit on indebtedness | $100,000,000 |
Related_Party_Transactions_Sch
Related Party Transactions - Schedule of Other Related Party Balances (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Related Party Transactions [Abstract] | ||
Accounts receivable | $10.30 | $11.90 |
Prepaid expenses and other current assets | 1.8 | 2 |
Other assets | 0.5 | 0 |
Total assets | 12.6 | 13.9 |
Accounts payable | 10.6 | 0 |
Distribution payable to SPLC | 11.9 | 0 |
Deferred revenue | 4.7 | 0 |
Accrued liabilities | 1.4 | 0 |
Total liabilities | $28.60 | $0 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Details) (USD $) | 1 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Nov. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 |
Employees | ||||||
Related Party Transaction [Line Items] | ||||||
Related parties | $45.50 | $48.70 | $58.40 | |||
Loss from sale of excess allowance oil | 0.4 | |||||
Total distributions to general partners | 33.3 | 33.3 | ||||
Distribution payable to SPLC | 11.9 | 0 | 11.9 | |||
General insurance expense | 3.7 | |||||
Pension and postretirement health and life insurance costs | 2.5 | 3.1 | 3.2 | |||
Defined contribution benefit plan costs | 1 | 1.2 | 0.9 | |||
No of employees under share based compensation award | 15,000 | |||||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years | |||||
Share-based compensation expense | 0.1 | 0.2 | 0.2 | |||
Zydeco | ||||||
Related Party Transaction [Line Items] | ||||||
Total distributions to general partners | 19 | 19 | ||||
Distribution payable to SPLC | 6.8 | 6.8 | ||||
SPLC | ||||||
Related Party Transaction [Line Items] | ||||||
General and administrative - related parties | 6.8 | 11.1 | 10 | |||
Fixed management service fee | 3.5 | |||||
Transportation Services | ||||||
Related Party Transaction [Line Items] | ||||||
Related parties | 42 | 43.5 | 52.6 | |||
Storage Services | ||||||
Related Party Transaction [Line Items] | ||||||
Related parties | $3.50 | $5.20 | $5.80 |
Related_Party_Transactions_Sch1
Related Party Transactions - Schedule of Condensed Combined Statement of Operations (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Related Party Transactions [Abstract] | |||
Operations and maintenance - related parties | $16 | $14.90 | $15.10 |
General and administrative - related parties | $13.60 | $11.10 | $10 |
Net_Income_Per_Limited_Partner2
Net Income Per Limited Partner Unit - Additional Information (Details) (USD $) | 12 Months Ended | 0 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Jan. 20, 2015 |
Net Income Per Share [Line Items] | ||
Cash distribution declaration date | 20-Jan-15 | |
Cash distribution paid date | 12-Feb-15 | |
Cash distribution date of record | 2-Feb-15 | |
Subsequent Event | ||
Net Income Per Share [Line Items] | ||
Distributions declared per unit | $0.10 | |
Cash distributions declared | $14.40 |
Net_Income_Per_Limited_Partner3
Net Income Per Limited Partner Unit - Schedule of Allocation of Net Income to Arrive at Net Income Per Limited Partner Unit (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 |
Limited Partners Capital Account [Line Items] | ||
Net income from November 3, 2014 through December 31,2014 | $13.40 | $13.40 |
Distributions in excess of net income subsequent to the Offering | -1 | |
General Partner | ||
Limited Partners Capital Account [Line Items] | ||
Net income from November 3, 2014 through December 31,2014 | 0.3 | |
General partner's distribution declared | 0.3 | |
Limited Partners' Common Units | ||
Limited Partners Capital Account [Line Items] | ||
Net income from November 3, 2014 through December 31,2014 | 6.5 | |
Limited partners' distribution declared | 7 | |
Distributions in excess of net income subsequent to the Offering | -0.5 | |
Limited Partner's Subordinated Units | ||
Limited Partners Capital Account [Line Items] | ||
Net income from November 3, 2014 through December 31,2014 | 6.6 | |
Limited partners' distribution declared | 7.1 | |
Distributions in excess of net income subsequent to the Offering | ($0.50) |
Net_Income_Per_Limited_Partner4
Net Income Per Limited Partner Unit - Schedule of Basic and Diluted Net Income Per Unit (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 |
Distribution Made To Limited Partner [Line Items] | ||
Distributions declared | $14.40 | |
Distributions in excess of net income subsequent to the Offering | -1 | |
Net income subsequent to the Offering | 13.4 | 13.4 |
Weighted average units outstanding | ||
Basic | 137.7 | |
Diluted | 137.7 | |
General Partner | ||
Distribution Made To Limited Partner [Line Items] | ||
Distributions declared | 0.3 | |
Net income subsequent to the Offering | 0.3 | |
Weighted average units outstanding | ||
Basic | 2.7 | |
Diluted | 2.7 | |
Limited Partners' Common Units | ||
Distribution Made To Limited Partner [Line Items] | ||
Distributions declared | 7 | |
Distributions in excess of net income subsequent to the Offering | -0.5 | |
Net income subsequent to the Offering | 6.5 | |
Weighted average units outstanding | ||
Basic | 67.5 | |
Diluted | 67.5 | |
Net income per limited partner unit | ||
Basic | $0.10 | |
Diluted | $0.10 | |
Limited Partner's Subordinated Units | ||
Distribution Made To Limited Partner [Line Items] | ||
Distributions declared | 7.1 | |
Distributions in excess of net income subsequent to the Offering | -0.5 | |
Net income subsequent to the Offering | $6.60 | |
Weighted average units outstanding | ||
Basic | 67.5 | |
Diluted | 67.5 | |
Net income per limited partner unit | ||
Basic | $0.10 | |
Diluted | $0.10 |
Transactions_with_Major_Custom2
Transactions with Major Customers and Concentration of Credit Risk - Schedule of Revenues from Third Party Customers (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Concentration Risk [Line Items] | |||||||||||
Revenues | $55.60 | $46.90 | $43.60 | $36.30 | $20.30 | $20.20 | $26.90 | $26.90 | $182.40 | $94.30 | $114.80 |
Customer A | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Revenues | 15.9 | 14.6 | 15.7 | ||||||||
Customer B | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Revenues | 39.4 | 1.8 | |||||||||
Customer C | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Revenues | 44.6 | 6.2 | |||||||||
Customer E | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Revenues | $20.20 |
Transactions_with_Major_Custom3
Transactions with Major Customers and Concentration of Credit Risk - Additional Information (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Concentration Risk [Line Items] | |||
Cash and cash equivalents in excess of FDIC limits | 149.7 | ||
Maximum | |||
Concentration Risk [Line Items] | |||
Receivables payment terms | 30 days | ||
Sales Revenue, Net | Customer Concentration Risk | Parent and Affiliates [Member] | |||
Concentration Risk [Line Items] | |||
Revenue with parent as percentage of total revenues | 25.00% | 52.00% | 51.00% |
Transactions_with_Major_Custom4
Transactions with Major Customers and Concentration of Credit Risk - Schedule of Accounts Receivable from Third Party Customers (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Customer A | ||
Concentration Risk [Line Items] | ||
Accounts receivable, net | $0.90 | $1.10 |
Customer B | ||
Concentration Risk [Line Items] | ||
Accounts receivable, net | 6.3 | 0.2 |
Customer C | ||
Concentration Risk [Line Items] | ||
Accounts receivable, net | 5.7 | 1.3 |
Customer D | ||
Concentration Risk [Line Items] | ||
Accounts receivable, net | 0.5 | |
Customer E | ||
Concentration Risk [Line Items] | ||
Accounts receivable, net | $3 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 01, 2014 |
Commitments And Contingencies [Line Items] | ||||
Aggregate liability of SPLC | $15 | |||
Indemnification liability deductible amount | 0.5 | |||
Rental expense | 0.5 | 0.5 | 0.5 | |
Terminal Agreement | ||||
Commitments And Contingencies [Line Items] | ||||
Initial monthly payments in terms of facility fee | 0.4 | |||
Leasing arrangements term | 15 years | |||
Leasing arrangements option to extend term | 5 years | |||
Lease incentive amount payable each month | $0.10 | |||
Zydeco | ||||
Commitments And Contingencies [Line Items] | ||||
Minority interest ownership percentage by parent | 43.00% | |||
Zydeco | Terminal Agreement | ||||
Commitments And Contingencies [Line Items] | ||||
Number of newly build storage tanks | 3 | |||
Colonial Pipeline Company | ||||
Commitments And Contingencies [Line Items] | ||||
Cost method investment percentage | 1.61% | |||
Mars Oil Pipeline Company | ||||
Commitments And Contingencies [Line Items] | ||||
Equity method investment percentage | 28.60% | |||
Bengal Pipeline Company LLC | ||||
Commitments And Contingencies [Line Items] | ||||
Equity method investment percentage | 49.00% |
Commitments_and_Contingencies_2
Commitments and Contingencies - Schedule of Long-term Lease Obligations (Details) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Commitments And Contingencies Disclosure [Abstract] | |
Operating lease for land, Total | $1.80 |
Operating lease for land, Less than 1 year | 0.5 |
Operating lease for land, 1 year to 3 years | 1.1 |
Operating lease for land, 4 years to 5 years | $0.20 |
Selected_Quarterly_Financial_D2
Selected Quarterly Financial Data (Unaudited) (Details) (USD $) | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | ||||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Nov. 02, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Total Revenues | $55.60 | $46.90 | $43.60 | $36.30 | $20.30 | $20.20 | $26.90 | $26.90 | $182.40 | $94.30 | $114.80 | |||
Income Before Income Taxes | 35.8 | 31 | 26.6 | 15.2 | 5.8 | 22.4 | 11 | 0.2 | 108.6 | 39.4 | 47.1 | |||
Net income | 24.8 | 35.6 | 31 | 26.6 | 15.2 | 5.7 | 22.4 | 11 | 0.2 | 83.6 | 108.4 | 39.3 | 47 | |
Net Income Subsequent to the Offering | 13.4 | 13.4 | ||||||||||||
Limited Partners' Interest in Net Income Subsequent to Initial Public Offering | $13.10 | [1] | ||||||||||||
Net Income per Common Unit Subsequent to the Offering - Basic and Diluted | $0.10 | |||||||||||||
[1] | On November 3, 2014, the Partnership completed its Offering of 46,000,000 common units representing limited partner interests. See Note 3 b Initial Public Offering for additional details. |
Selected_Quarterly_Financial_D3
Selected Quarterly Financial Data (Unaudited) (Parenthetical) (Details) | 1 Months Ended |
Nov. 30, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |
Sale of common units, date | 3-Nov-14 |
Common units representing limited partner | 46,000,000 |