Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 06, 2017 | |
Document Information [Line Items] | ||
Entity Registrant Name | USD Partners LP | |
Trading Symbol | USDP | |
Entity Central Index Key | 1,610,682 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Units | ||
Document Information [Line Items] | ||
Entity Shares Outstanding | 19,537,971 | |
Subordinated Units | ||
Document Information [Line Items] | ||
Entity Shares Outstanding | 6,278,127 | |
Class A Units | ||
Document Information [Line Items] | ||
Entity Shares Outstanding | 82,500 | |
General Partner | ||
Document Information [Line Items] | ||
Entity Shares Outstanding | 461,136 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | ||||
Railroad incentives | $ 4 | $ 24 | $ 25 | $ 61 |
Fleet leases | 643 | 643 | 1,929 | 1,933 |
Freight and other reimbursables | 118 | 218 | 483 | 944 |
Total revenues | 28,981 | 28,343 | 83,722 | 82,571 |
Operating costs | ||||
Subcontracted rail services | 2,340 | 2,004 | 6,148 | 6,073 |
Pipeline fees | 6,367 | 5,492 | 17,153 | 15,544 |
Fleet leases | 1,656 | 1,534 | 4,723 | 4,605 |
Freight and other reimbursables | 118 | 218 | 484 | 944 |
Operating and maintenance | 749 | 746 | 2,050 | 2,399 |
Selling, general and administrative | 2,221 | 2,505 | 6,898 | 7,472 |
Depreciation and amortization | 5,254 | 4,906 | 15,164 | 14,725 |
Total operating costs | 20,182 | 18,843 | 56,925 | 56,131 |
Operating income | 8,799 | 9,500 | 26,797 | 26,440 |
Interest expense | 2,388 | 2,572 | 7,508 | 7,288 |
Loss (gain) associated with derivative instruments | 667 | (349) | 1,279 | 921 |
Foreign currency transaction loss (gain) | (457) | 25 | (527) | (120) |
Other income, net | (48) | 0 | (40) | 0 |
Income before income taxes | 6,249 | 7,252 | 18,577 | 18,351 |
Benefit from income taxes | (178) | (5,579) | (1,427) | (1,865) |
Net income | 6,427 | 12,831 | 20,004 | 20,216 |
Net income attributable to limited partner interests | $ 6,258 | $ 12,575 | $ 19,523 | $ 19,813 |
Weighted average units outstanding (in shares) | 26,361 | 23,153 | 24,600 | 23,137 |
Common Units | ||||
Operating costs | ||||
Net income per unit (basic and diluted) (USD per share) | $ 0.24 | $ 0.49 | $ 0.82 | $ 0.89 |
Weighted average units outstanding (in shares) | 19,538 | 14,182 | 17,380 | 13,760 |
Subordinated Units | ||||
Operating costs | ||||
Net income per unit (basic and diluted) (USD per share) | $ 0.24 | $ 0.49 | $ 0.80 | $ 0.85 |
Weighted average units outstanding (in shares) | 6,278 | 8,371 | 6,661 | 8,768 |
Related Party | ||||
Revenues | ||||
Fleet leases | $ 1,013 | $ 890 | $ 2,794 | $ 2,671 |
Freight and other reimbursables | 0 | 0 | 1 | 0 |
Operating costs | ||||
Selling, general and administrative | 1,477 | 1,438 | 4,305 | 4,369 |
Terminalling services | ||||
Revenues | ||||
Terminalling/Fleet services | 21,799 | 24,078 | 67,335 | 69,560 |
Terminalling services | Related Party | ||||
Revenues | ||||
Terminalling/Fleet services | 4,716 | 1,736 | 8,974 | 5,142 |
Fleet services | ||||
Revenues | ||||
Terminalling/Fleet services | 470 | 475 | 1,405 | 613 |
Fleet services | Related Party | ||||
Revenues | ||||
Terminalling/Fleet services | $ 218 | $ 279 | $ 776 | $ 1,647 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 6,427 | $ 12,831 | $ 20,004 | $ 20,216 |
Other comprehensive income (loss) — foreign currency translation | 1,660 | (105) | 3,159 | 675 |
Comprehensive income | $ 8,087 | $ 12,726 | $ 23,163 | $ 20,891 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 20,004 | $ 20,216 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 15,164 | 14,725 |
Loss associated with derivative instruments | 1,279 | 921 |
Settlement of derivative contracts | 242 | 1,640 |
Unit based compensation expense | 2,962 | 2,824 |
Other | 750 | 648 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 267 | 168 |
Accounts receivable — related party | (224) | 67 |
Prepaid expenses and other current assets | 1,819 | (3,037) |
Accounts payable and accrued expenses | 990 | (1,377) |
Accounts payable and accrued expenses — related party | (43) | 1,467 |
Deferred revenue and other liabilities | (6,733) | 2,284 |
Deferred revenue — related party | 1,066 | (2,783) |
Change in restricted cash | 685 | (664) |
Net cash provided by operating activities | 38,228 | 37,099 |
Cash flows from investing activities: | ||
Additions of property and equipment | (26,708) | (471) |
Net cash used in investing activities | (26,708) | (471) |
Cash flows from financing activities: | ||
Distributions | (25,532) | (21,943) |
Vested phantom units used for payment of participant taxes | (1,072) | (77) |
Net proceeds from issuance of common units | 33,700 | 0 |
Proceeds from long-term debt | 44,000 | 15,000 |
Repayments of long-term debt | (66,342) | (30,831) |
Net cash used in financing activities | (15,246) | (37,851) |
Effect of exchange rates on cash | (148) | 559 |
Net change in cash and cash equivalents | (3,874) | (664) |
Cash and cash equivalents – beginning of period | 11,705 | 10,500 |
Cash and cash equivalents – end of period | $ 7,831 | $ 9,836 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 7,831 | $ 11,705 |
Restricted cash | 5,138 | 5,433 |
Accounts receivable, net | 4,168 | 4,321 |
Accounts receivable — related party | 438 | 219 |
Prepaid expenses | 8,717 | 10,325 |
Other current assets | 3,178 | 2,562 |
Total current assets | 29,470 | 34,565 |
Property and equipment, net | 150,207 | 125,702 |
Intangible assets, net | 102,464 | 111,919 |
Goodwill | 33,589 | 33,589 |
Other non-current assets | 180 | 192 |
Total assets | 315,910 | 305,967 |
Current liabilities | ||
Accounts payable and accrued expenses | 3,555 | 2,221 |
Accounts payable and accrued expenses — related party | 210 | 214 |
Deferred revenue, current portion | 22,991 | 26,928 |
Deferred revenue, current portion — related party | 5,710 | 4,292 |
Other current liabilities | 3,189 | 3,513 |
Total current liabilities | 35,655 | 37,168 |
Long-term debt, net | 199,411 | 220,894 |
Deferred revenue, net of current portion | 0 | 264 |
Deferred income tax liability, net | 957 | 823 |
Total liabilities | 236,023 | 259,149 |
Commitments and contingencies | ||
Partners’ capital | ||
General partner units (461,136 outstanding at September 30, 2017 and December 31, 2016) | 58 | 111 |
Accumulated other comprehensive income (loss) | 2,002 | (1,157) |
Total partners’ capital | 79,887 | 46,818 |
Total liabilities and partners’ capital | 315,910 | 305,967 |
Common Units | ||
Partners’ capital | ||
Partners’ capital | 135,609 | 122,802 |
Class A Units | ||
Partners’ capital | ||
Partners’ capital | 1,284 | 1,811 |
Subordinated Units | ||
Partners’ capital | ||
Partners’ capital | $ (59,066) | $ (76,749) |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Sep. 30, 2017 | Dec. 31, 2016 |
General partners' units outstanding (in shares) | 461,136 | 461,136 |
Common Units | ||
Limited partners' units outstanding (in shares) | 19,537,699 | 14,185,599 |
Class A Units | ||
Limited partners' units outstanding (in shares) | 82,500 | 138,750 |
Subordinated Units | ||
Limited partners' units outstanding (in shares) | 6,278,127 | 8,370,836 |
CONSOLIDATED STATEMENTS OF PART
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL - USD ($) $ in Thousands | Total | Accumulated other comprehensive income (loss) | Class A Units | Limited PartnerCommon Units | Limited PartnerClass A Units | Limited PartnerSubordinated Units | General Partner | First vesting trancheLimited PartnerClass A Units |
Partners' capital account beginning balance (in units) at Dec. 31, 2015 | 185,000 | 11,947,127 | 185,000 | 10,463,545 | 461,136 | |||
Partners' capital account beginning balance at Dec. 31, 2015 | $ (138) | $ 141,374 | $ 1,749 | $ (93,445) | $ 220 | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Conversion of units (in units) | 2,138,959 | 2,092,709 | 46,250 | |||||
Conversion of units | $ (18,300) | $ 19,171 | $ (871) | |||||
Common units issued for vested phantom units (in units) | 95,910 | |||||||
Common units issued for vested phantom units | $ (77) | |||||||
Net income | $ 20,216 | 12,220 | 125 | 7,468 | 403 | |||
Unit based compensation expense | 1,805 | 782 | 0 | 0 | ||||
Forfeited units (in shares) | 0 | |||||||
Distributions | $ (12,778) | $ (146) | $ (8,581) | $ (438) | ||||
Cumulative translation adjustment | 675 | 675 | ||||||
Partners' capital account ending balance (in units) at Sep. 30, 2016 | 138,750 | 14,181,996 | 138,750 | 8,370,836 | 461,136 | |||
Partners' capital account ending balance at Sep. 30, 2016 | 51,218 | 537 | $ 124,244 | $ 1,639 | $ (75,387) | $ 185 | ||
Partners' capital account beginning balance (in units) at Dec. 31, 2016 | 138,750 | 14,185,599 | 138,750 | 8,370,836 | 461,136 | |||
Partners' capital account beginning balance at Dec. 31, 2016 | 46,818 | (1,157) | $ 122,802 | $ 1,811 | $ (76,749) | $ 111 | ||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Conversion of units (in units) | 2,162,084 | 2,092,709 | 46,250 | |||||
Conversion of units | $ (19,047) | $ 19,653 | $ (606) | |||||
Common units issued for vested phantom units (in units) | 190,016 | |||||||
Common units issued for vested phantom units | $ (1,072) | |||||||
Issuance of common units (in shares) | 3,000,000 | |||||||
Issuance of common units | $ 33,700 | |||||||
Net income | 20,004 | 14,143 | 79 | 5,301 | 481 | |||
Unit based compensation expense | 2,677 | $ 356 | 23 | 1 | ||||
Forfeited units (in shares) | (10,000) | (10,000) | ||||||
Forfeited units | $ (247) | |||||||
Distributions | $ (17,594) | $ (109) | $ (7,294) | $ (535) | ||||
Cumulative translation adjustment | 3,159 | 3,159 | ||||||
Partners' capital account ending balance (in units) at Sep. 30, 2017 | 82,500 | 19,537,699 | 82,500 | 6,278,127 | 461,136 | |||
Partners' capital account ending balance at Sep. 30, 2017 | $ 79,887 | $ 2,002 | $ 135,609 | $ 1,284 | $ (59,066) | $ 58 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION USD Partners LP and its consolidated subsidiaries, collectively referred to herein as we, us, our, the Partnership and USDP, is a fee-based, growth-oriented master limited partnership formed in 2014 by US Development Group, LLC, or USD, through its wholly-owned subsidiary, USD Group LLC, or USDG. We were formed to acquire, develop and operate midstream infrastructure and complementary logistics solutions for crude oil, biofuels and other energy-related products. We generate substantially all of our operating cash flows from multi-year, take-or-pay contracts with primarily investment grade customers, including major integrated oil companies and refiners. Our principal assets include a network of crude oil terminals that facilitate the transportation of heavy crude oil from Western Canada to key demand centers across North America. Our operations include railcar loading and unloading, storage and blending in on-site tanks, inbound and outbound pipeline connectivity, truck transloading, as well as other related logistics services. We also provide our customers with leased railcars and fleet services to facilitate the transportation of liquid hydrocarbons and biofuels by rail. We do not take ownership of the products that we handle nor do we receive any payments from our customers based on the value of such products. Our common units are traded on the New York Stock Exchange, or NYSE, under the symbol USDP. Basis of Presentation Our accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim consolidated financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete consolidated financial statements. In the opinion of our management, they contain all adjustments, consisting only of normal recurring adjustments, which our management considers necessary to present fairly our financial position as of September 30, 2017 , our results of operations for the three and nine months ended September 30, 2017 and 2016 , and our cash flows for the nine months ended September 30, 2017 and 2016 . We derived our consolidated balance sheet as of December 31, 2016 , from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 . Our results of operations for the three and nine months ended September 30, 2017 and 2016 should not be taken as indicative of the results to be expected for the full year due to fluctuations in the supply of and demand for crude oil and biofuels, timing and completion of acquisitions, if any, and the impact of fluctuations in foreign currency exchange rates. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 . Foreign Currency Translation We conduct a substantial portion of our operations in Canada, which we account for in the local currency, the Canadian dollar. We translate most Canadian dollar denominated balance sheet accounts into our reporting currency, the U.S. dollar, at the end of period exchange rate, while most income statement accounts are translated into our reporting currency based on the average exchange rate for each monthly period. Fluctuations in the exchange rate between the Canadian dollar and the U.S. dollar can create variability in the amounts we translate and report in U.S. dollars. Within these consolidated financial statements, we denote amounts denominated in Canadian dollars with “C$” immediately prior to the stated amount. US Development Group, LLC USD and its affiliates are engaged in designing, developing, owning and managing large-scale multi-modal logistics centers and energy-related infrastructure across North America. USD is the indirect owner of our general partner through its direct ownership of USDG and is currently owned by Energy Capital Partners, Goldman Sachs and certain of USD’s management team members. Comparative Amounts We have made certain reclassifications to the amounts reported in the prior year to conform with the current year presentation. None of these reclassifications have an impact on our operating results, cash flows or financial position. |
NET INCOME PER LIMITED PARTNER
NET INCOME PER LIMITED PARTNER INTEREST | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
NET INCOME PER LIMITED PARTNER INTEREST | NET INCOME PER LIMITED PARTNER INTEREST We allocate our net income among our general partner and limited partners using the two-class method in accordance with applicable authoritative accounting guidance. Under the two-class method, we allocate our net income and any net income in excess of distributions to our limited partners, our general partner and the holder of the incentive distribution rights, or IDRs, according to the distribution formula for available cash as set forth in our partnership agreement. We allocate any distributions in excess of earnings for the period to our limited partners and general partner based on their respective proportionate ownership interests in us, as set forth in our partnership agreement after taking into account distributions to be paid with respect to the IDRs. The formula for distributing available cash as set forth in our partnership agreement is as follows: Distribution Targets Portion of Quarterly Distribution Per Unit Percentage Distributed to Limited Partners Percentage Distributed to General Partner (including IDRs) (1) Minimum Quarterly Distribution Up to $0.2875 98% 2% First Target Distribution > $0.2875 to $0.330625 98% 2% Second Target Distribution > $0.330625 to $0.359375 85% 15% Third Target Distribution > $0.359375 to $0.431250 75% 25% Thereafter Amounts above $0.431250 50% 50% (1) Assumes our general partner maintains a 2% general partner interest in us. We determined basic and diluted net income per limited partner unit as set forth in the following tables: Three Months Ended September 30, 2017 Common Units Subordinated Units Class A General Total (in thousands, except per unit amounts) Net income attributable to general and limited partner interests in USD Partners LP (1) $ 4,721 $ 1,517 $ 20 $ 169 $ 6,427 Less: Distributable earnings (2) 7,030 2,260 29 223 9,542 Distributions in excess of earnings $ (2,309 ) $ (743 ) $ (9 ) $ (54 ) $ (3,115 ) Weighted average units outstanding (3) 19,538 6,278 84 461 26,361 Distributable earnings per unit (4) $ 0.36 $ 0.36 $ 0.35 Overdistributed earnings per unit (5) (0.12 ) (0.12 ) (0.11 ) Net income per limited partner unit (basic and diluted) $ 0.24 $ 0.24 $ 0.24 (1) Represents net income allocated to each class of units based on the actual ownership of the Partnership during the period. The net income for each class of limited partner interest has been reduced by its proportionate amount of the approximate $57 thousand attributed to the general partner for its incentive distribution rights (2) Represents the distributions payable for the period based upon the quarterly distribution amount of $0.345 per unit, or $1.38 per unit on an annualized basis. Amounts presented for each class of units include a proportionate amount of the $392 thousand distributable to holders of the Equity-classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Long-Term Incentive Plan. (3) Represents the weighted average units outstanding for the period. (4) Represents the total distributable earnings divided by the weighted average number of units outstanding for the period. (5) Represents the distributions in excess of earnings divided by the weighted average number of units outstanding for the period. Three Months Ended September 30, 2016 Common Units Subordinated Units Class A General Total (in thousands, except per unit amounts) Net income attributable to general and limited partner interests in USD Partners LP (1) $ 7,859 $ 4,639 $ 77 $ 256 $ 12,831 Less: Distributable earnings (2) 4,733 2,792 46 154 7,725 Excess net income $ 3,126 $ 1,847 $ 31 $ 102 $ 5,106 Weighted average units outstanding (3) 14,182 8,371 139 461 23,153 Distributable earnings per unit (4) $ 0.33 $ 0.33 $ 0.33 Undistributed earnings per unit (5) 0.16 0.16 0.16 Net income per limited partner unit (basic and diluted) $ 0.49 $ 0.49 $ 0.49 (1) Represents net income allocated to each class of units based on the actual ownership of the Partnership during the period. (2) Represents the distributions paid for the period based upon the quarterly distribution of $0.3225 per unit, or $1.29 per unit on an annualized basis. Amounts presented for each class of units include a proportionate amount of the $257 thousand distributed to holders of the Equity-classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Long-Term Incentive Plan. (3) Represents the weighted average units outstanding for the period. (4) Represents the total distributable earnings divided by the weighted average number of units outstanding for the period. (5) Represents the additional amount per unit necessary to distribute the excess net income for the period among our limited partners, our general partner and the holder of the IDRs according to the distribution formula for available cash as set forth in our partnership agreement. Nine Months Ended September 30, 2017 Common Units Subordinated Units Class A General Total (in thousands, except per unit amounts) Net income attributable to general and limited partner interests in USD Partners LP (1) $ 14,143 $ 5,301 $ 79 $ 481 $ 20,004 Less: Distributable earnings (2) 19,782 6,697 91 600 27,170 Distributions in excess of earnings $ (5,639 ) $ (1,396 ) $ (12 ) $ (119 ) $ (7,166 ) Weighted average units outstanding (3) 17,380 6,661 98 461 24,600 Distributable earnings per unit (4) $ 1.14 $ 1.01 $ 0.93 Overdistributed earnings per unit (5) (0.32 ) (0.21 ) (0.12 ) Net income per limited partner unit (basic and diluted) $ 0.82 $ 0.80 $ 0.81 (1) Represents net income allocated to each class of units based on the actual ownership of the Partnership during the period. The net income for each class of limited partner interest has been reduced by its proportionate amount of the approximate $109 thousand attributed to the general partner for its incentive distribution rights. (2) Represents the per unit distributions paid of $0.335 per unit for the three months ended March 31, 2017, $0.34 per unit for the three months ended June 30, 2017, and $0.345 per unit distributable for the three months ended September 30, 2017 , representing a year-to-date distribution amount of $1.02 per unit. Amounts presented for each class of units include a proportionate amount of the $785 thousand distributed and $392 thousand distributable to holders of the Equity-classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Long-Term Incentive Plan. (3) Represents the weighted average units outstanding for the period. (4) Represents the total distributable earnings divided by the weighted average number of units outstanding for the period. (5) Represents the distributions in excess of earnings divided by the weighted average number of units outstanding for the period. Nine Months Ended September 30, 2016 Common Units Subordinated Units Class A General Total (in thousands, except per unit amounts) Net income attributable to general and limited partner interests in USD Partners LP (1) $ 12,220 $ 7,468 $ 125 $ 403 $ 20,216 Less: Distributable earnings (2) 13,867 8,183 135 451 22,636 Distributions in excess of earnings $ (1,647 ) $ (715 ) $ (10 ) $ (48 ) $ (2,420 ) Weighted average units outstanding (3) 13,760 8,768 148 461 23,137 Distributable earnings per unit (4) $ 1.01 $ 0.93 $ 0.91 Overdistributed earnings per unit (5) (0.12 ) (0.08 ) (0.07 ) Net income per limited partner unit (basic and diluted) $ 0.89 $ 0.85 $ 0.84 (1) Represents net income allocated to each class of units based on the actual ownership of the Partnership during the period. (2) Represents the distributions paid of $0.3075 per unit with respect to the three months ended March 31, 2016, $0.315 per unit for the three months ended June 30, 2016, and $0.3225 per unit for the three months ended September 30, 2016 , representing a year-to-date distribution amount of $0.945 per unit. Amounts presented for each class of units include a proportionate amount of the $756 thousand distributed to holders of the Equity-classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Long-Term Incentive Plan. (3) Represents the weighted average units outstanding for the period. (4) Represents the total distributable earnings divided by the weighted average number of units outstanding for the period. (5) Represents the distributions in excess of earnings divided by the weighted average number of units outstanding for the period. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Our property and equipment consist of the following as of the dates indicated: September 30, 2017 December 31, 2016 Estimated Depreciable Lives (Years) (in thousands) Land $ 10,264 $ 9,636 N/A Trackage and facilities 128,475 108,782 10-30 Pipeline 16,105 10,313 20-25 Equipment 12,576 8,234 3-10 Furniture 68 44 5-10 Total property and equipment 167,488 137,009 Accumulated depreciation (20,322 ) (13,821 ) Construction in progress 3,041 2,514 Property and equipment, net $ 150,207 $ 125,702 The amounts classified as “Construction in progress” are excluded from amounts being depreciated. These amounts represent property that is not yet ready to be placed into productive service as of the respective consolidated balance sheet date. On June 2, 2017 , we acquired a 76 -acre crude oil terminal in Stroud, Oklahoma, the Stroud terminal, for $ 22.8 million in cash, to facilitate rail-to-pipeline shipments of crude oil from our Hardisty terminal to Cushing, Oklahoma. The Stroud terminal includes unit train-capable unloading capacity of approximately 50,000 barrels per day, or Bpd, expandable to approximately 70,000 Bpd, as well as onsite tanks with 140,000 barrels of total capacity and a truck bay. Additionally, the terminal includes a 12 -inch diameter, 17 -mile pipeline with a direct connection to the crude oil storage hub located in Cushing, Oklahoma. In connection with the transaction, we also purchased approximately $1.4 million of crude oil used by the prior owner for line fill and tank bottoms and capitalized approximately $1.3 million of one-time costs. We accounted for the acquisition of the Stroud terminal as an asset purchase, as a result of our early adoption of Financial Accounting Standards Board, or FASB, Accounting Standards Update No. 2017-01, or ASU 2017-01, which clarifies the definition of a business as set forth in Topic 805 of the FASB Accounting Standards Codification, or ASC. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price of an entity over the estimated fair value of the assets acquired and liabilities assumed. Our goodwill originated from our acquisition of the Casper terminal, which is included in our Terminalling services segment. As of September 30, 2017 , the carrying amount of our goodwill was $33.6 million . We test goodwill for impairment annually based on the carrying values of our reporting units on the first day of the third quarter of each year or more frequently if events or changes in circumstances suggest that the fair value of a reporting unit is less than its carrying value. During the third quarter of 2017, we completed our annual goodwill impairment analysis and determined that the fair value of the Casper terminal reporting unit exceeded its carrying value at July 1, 2017. An impairment charge would have resulted if our estimate of the fair value of the Casper terminal reporting unit was approximately 5% less than the amount determined. The critical assumptions used in our analysis include the following: (1) A weighted average cost of capital of 10.5% ; (2) A capital structure consisting of approximately 35% debt and 65% equity; (3) A range of EBITDA multiples derived from equity prices of public companies with similar operating and investment characteristics, from 8.25x to 9.25x ; and (4) A range of EBITDA multiples for transactions based on actual sales and purchases of comparable businesses, from 8.25x to 9.25x . We measured the fair value of our Casper terminal reporting unit by using an income analysis, market analysis and transaction analysis with weightings of 50% , 25% and 25% , respectively. Our estimate of fair value required us to use significant unobservable inputs representative of a Level 3 fair value measurement, including assumptions related to the future performance of our Casper terminal. We have not observed any events or circumstances subsequent to our analysis that would suggest the fair value of our Casper terminal is below its carrying amount as of September 30, 2017 . Intangible Assets The composition, gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows as of the dates indicated: September 30, 2017 December 31, 2016 (in thousands) Carrying amount: Customer service agreements $ 125,960 $ 125,960 Other 106 106 Total carrying amount 126,066 126,066 Accumulated amortization: Customer service agreements (23,582 ) (14,135 ) Other (20 ) (12 ) Total accumulated amortization (23,602 ) (14,147 ) Total intangible assets, net $ 102,464 $ 111,919 We determined the expiration of a customer contract for terminal services at our Casper terminal was an event that required us to evaluate our Casper terminal asset group for impairment. Our projections of the undiscounted cash flows expected to be derived from the operation and disposition of the Casper terminal asset group exceeded the carrying value of the asset group as of August 31, 2017, the date of our evaluation, indicating cash flows were expected to be sufficient to recover the carrying value of the Casper terminal asset group. Amortization expense associated with intangible assets totaled approximately $3.2 million for the three months ended September 30, 2017 and 2016 , respectively, and $9.5 million for the nine months ended September 30, 2017 and 2016 , respectively. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT We have a senior secured credit agreement, the Credit Agreement, comprised of a $400 million revolving credit facility (subject to the limits set forth therein), the Revolving Credit Facility, with Citibank, N.A., as administrative agent, and a syndicate of lenders. The Credit Agreement is a five year committed facility that matures on October 15, 2019. Previously, the Credit Agreement included a $300 million Revolving Credit Facility and a $100 million term loan (borrowed in Canadian dollars), the Term Loan Facility, which we repaid in March 2017. As we repaid amounts outstanding on the Term Loan Facility, the availability on our Revolving Credit Facility was automatically increased to the full $400 million of credit available under the Credit Agreement. Our Revolving Credit Facility and issuances of letters of credit are available for working capital, capital expenditures, permitted acquisitions and general partnership purposes, including distributions. We have the ability to increase the maximum amount of credit available under the Credit Agreement, as amended, by an aggregate amount of up to $100 million to a total facility size of $500 million , subject to receiving increased commitments from lenders or other financial institutions and satisfaction of certain conditions. The Revolving Credit Facility includes an aggregate $20 million sublimit for standby letters of credit and a $20 million sublimit for swingline loans. Obligations under the Revolving Credit Facility are guaranteed by our restricted subsidiaries (as such term is defined in our senior secured credit facility) and are secured by a first priority lien on our assets and those of our restricted subsidiaries, other than certain excluded assets. Our long-term debt balances included the following components as of the specified dates: September 30, 2017 December 31, 2016 (in thousands) Term Loan Facility $ — $ 10,128 Revolving Credit Facility 201,000 213,000 Less: Deferred financing costs, net (1,589 ) (2,234 ) Total long-term debt, net $ 199,411 $ 220,894 We determined the capacity available to us under the terms of our Credit Agreement was as follows as of the specified dates: September 30, 2017 December 31, 2016 (in millions) Aggregate borrowing capacity under Credit Agreement $ 400.0 $ 400.0 Less: Term Loan Facility amounts outstanding — 10.1 Revolving Credit Facility amounts outstanding 201.0 213.0 Letters of credit outstanding — — Available under Credit Agreement (1) $ 199.0 $ 176.9 (1) Pursuant to the terms of our Credit Agreement, our borrowing capacity currently is limited to 5.0 times our trailing 12-month consolidated EBITDA for the quarter in which a material acquisition occurs and the two quarters following a material acquisition, as defined in our Credit Agreement, after which time the covenant returns to 4.5 times our trailing 12-month consolidated EBITDA. Our acquisition of the Stroud terminal is treated as a material acquisition under the terms of our Credit Agreement. As a result, the 5.0 times our trailing 12-month consolidated EBITDA covenant will be effective through December 31, 2017 . The average interest rate on our outstanding indebtedness was 3.82% and 3.66% at September 30, 2017 and December 31, 2016 , respectively. In addition to the interest we incur on our outstanding indebtedness, we pay commitment fees of 0.50% on unused commitments, which rate will vary based on our consolidated net leverage ratio, as defined in our Credit Agreement. At September 30, 2017 , we were in compliance with the covenants set forth in our Credit Agreement. Interest expense associated with our outstanding indebtedness was as follows for the specified periods: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Interest expense on the Credit Agreement $ 2,172 $ 2,356 $ 6,862 $ 6,642 Amortization of deferred financing costs 216 216 646 646 Total interest expense $ 2,388 $ 2,572 $ 7,508 $ 7,288 |
DEFERRED REVENUE
DEFERRED REVENUE | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
DEFERRED REVENUE | DEFERRED REVENUE Our deferred revenue includes amounts we have received in cash from customers as payment for their minimum monthly commitment fees under take-or-pay contracts, where such payments exceed the charges implied by the customer’s actual throughput based on contractual rates set forth in our terminalling services agreements. We grant customers of our Hardisty terminal a credit for periods up to six months, which may be used to offset fees on throughput in excess of their minimum monthly commitments in future periods, to the extent capacity is available for the excess volume. We refer to these credits as make-up rights. We defer revenue associated with make-up rights until the earlier of when the throughput is utilized, the make-up rights expire, or when it is determined that the likelihood that the customer will utilize the make-up right is remote. A majority of our deferred revenue derived from the make-up rights provisions of our terminalling services agreements are denominated in Canadian dollars and translated into U.S. dollars at the exchange rate in effect at the end of the period. As a result, the balance of our deferred revenue may vary from period to period due to changes in the exchange rate between the U.S. dollar and the Canadian dollar. Our deferred revenue also include amounts collected in advance from customers of our Fleet services business, which will be recognized as revenue when earned pursuant to the terms of our contractual arrangements. We have likewise prepaid the rent on our railcar leases that are associated with these deferred revenues, which we will recognize as expense concurrently with our recognition of the associated revenue. The following table provides details of our deferred revenue from unrelated customers as reflected in our consolidated balance sheets as of the dates indicated: September 30, 2017 December 31, 2016 (in thousands) Customer prepayments, current portion (1) $ 856 $ 3,705 Minimum monthly commitment fees 22,135 23,223 Total deferred revenue, current portion $ 22,991 $ 26,928 Customer prepayments (1) $ — $ 264 Total deferred revenue, net of current portion $ — $ 264 (1) Represents amounts associated with lease payments received in advance from our Fleet services customers. Refer to Note 9 — Transactions with Related Parties for a discussion of deferred revenues associated with related parties included in our consolidated balance sheets. |
COLLABORATIVE ARRANGEMENT
COLLABORATIVE ARRANGEMENT | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
COLLABORATIVE ARRANGEMENT | COLLABORATIVE ARRANGEMENT We entered into a facilities connection agreement in 2014 with Gibson Energy Partnership, or Gibson, under which Gibson developed, constructed and operates a pipeline and related facilities connected to our Hardisty terminal. Gibson’s storage terminal is the exclusive means by which our Hardisty terminal receives crude oil. Subject to certain limited exceptions regarding manifest train facilities, our Hardisty terminal is the exclusive means by which crude oil from Gibson’s Hardisty storage terminal may be transported by rail. We remit pipeline fees to Gibson for the transportation of crude oil to our Hardisty terminal based on a predetermined formula. Pursuant to our arrangement with Gibson, we incurred $6.4 million and $5.5 million of expenses for the three months ended September 30, 2017 and 2016 , respectively, and $17.2 million and $15.5 million for the nine months ended September 30, 2017 and 2016 , respectively, which are presented as “Pipeline fees” in our consolidated statements of income. Additionally, at September 30, 2017 and December 31, 2016 , we had prepaid pipeline fees of $7.0 million and $6.8 million , respectively, included in “Prepaid expenses” on our consolidated balance sheets, which we will recognize as expense concurrently with our recognition of revenue that we deferred in connection with our minimum monthly volume commitments. |
NONCONSOLIDATED VARIABLE INTERE
NONCONSOLIDATED VARIABLE INTEREST ENTITIES | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NONCONSOLIDATED VARIABLE INTEREST ENTITIES | NONCONSOLIDATED VARIABLE INTEREST ENTITIES In 2014, we entered into purchase, assignment and assumption agreements to assign payment and performance obligations for certain operating lease agreements with lessors, as well as customer fleet service payments related to these operating leases, with unconsolidated entities in which we have variable interests. These variable interest entities, or VIEs, include LRT Logistics Funding LLC, USD Fleet Funding LLC, USD Fleet Funding Canada Inc., and USD Logistics Funding Canada Inc. We treat these entities as variable interests under the applicable accounting guidance due to their having an insufficient amount of equity invested at risk to finance their activities without additional subordinated financial support. We are not the primary beneficiary of the VIEs, as we do not have the power to direct the activities that most significantly affect the economic performance of the VIEs, nor do we have the power to remove the managing member under the terms of the VIEs ’ limited liability company agreements. Accordingly, we do not consolidate the results of the VIEs in our consolidated financial statements. Prior to July 1, 2016, our activities with the VIEs were treated as related party transactions and disclosed in Note 9 – Transactions with Related Parties due to the managing member of the VIEs being a member of the board of directors of USD. The managing member subsequently transferred ownership and control of the companies to a party that is unaffiliated with USD or us. As a result, for periods following June 30, 2016, we no longer treat the VIEs as related parties. The following table summarizes the total assets and liabilities between us and the VIEs as reflected in our consolidated balance sheets at September 30, 2017 and December 31, 2016 , as well as our maximum exposure to losses from entities in which we have a variable interest, but are not the primary beneficiary. Generally, our maximum exposure to losses is limited to amounts receivable for services we provided, reduced by any deferred revenue. September 30, 2017 Total assets Total liabilities Maximum exposure to loss (in thousands) Accounts receivable 20 $ — $ — Accounts payable — — — Deferred revenue, current portion — 603 — Deferred revenue, net of current portion — — — $ 20 $ 603 $ — December 31, 2016 Total assets Total liabilities Maximum exposure to loss (in thousands) Accounts receivable $ 7 $ — $ — Accounts payable — 3 — Deferred revenue, current portion — 1,297 — Deferred revenue, net of current portion — 264 — $ 7 $ 1,564 $ — We have assigned certain payment and performance obligations under the leases and master fleet service agreements for 2,613 railcars to the VIEs, but we have retained certain rights and obligations with respect to the servicing of these railcars. During the quarter ended September 30, 2017 , we provided no explicit or implicit financial or other support to these VIEs that were not previously contractually required. |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH RELATED PARTIES | TRANSACTIONS WITH RELATED PARTIES Nature of Relationship with Related Parties USD is engaged in designing, developing, owning and managing large-scale multi-modal logistics centers and other energy-related infrastructure across North America. USD is also the sole owner of USDG and the ultimate parent of our general partner. USD is owned by Energy Capital Partners, Goldman Sachs and certain members of its management. USDG is the sole owner of our general partner and owns 5,278,963 of our common units and all 6,278,127 of our subordinated units representing a combined 43.8% limited partner interest in us. USDG also provides us with general and administrative support services necessary for the operation and management of our business. USD Marketing LLC, or USDM, is a wholly-owned subsidiary of USDG, organized to facilitate terminalling services at our terminals. USD Partners GP LLC, our general partner, currently owns all 461,136 of our general partner units representing a 1.7% general partner interest in us, as well as all of our incentive distribution rights. Pursuant to our partnership agreement, our general partner is responsible for our overall governance and operations. Omnibus Agreement We are party to an omnibus agreement with USD, USDG and certain of their subsidiaries, including our general partner, pursuant to which we obtain and make payments for specified services provided to us and for out-of-pocket costs incurred on our behalf. We pay USDG, in equal monthly installments, the annual amount USDG estimates will be payable by us during the calendar year for providing services for our benefit. The omnibus agreement provides that this amount may be adjusted annually to reflect, among other things, changes in the scope of the general and administrative services provided to us due to a contribution, acquisition or disposition of assets by us or our subsidiaries, or for changes in any law, rule or regulation applicable to us, which affects the cost of providing the general and administrative services. We also reimburse USDG for any out-of-pocket costs and expenses incurred on our behalf in providing general and administrative services to us. This reimbursement is in addition to the amounts we pay to reimburse our general partner and its affiliates for certain costs and expenses incurred on our behalf for managing our business and operations, as required by our partnership agreement. The total amounts charged to us under the omnibus agreement for the three months ended September 30, 2017 and 2016 , were $1.5 million and $1.4 million , respectively, and for the nine months ended September 30, 2017 and 2016 , were $4.3 million and $4.4 million , respectively, which amounts are included in “Selling, general and administrative — related party” in our consolidated statements of income. At both September 30, 2017 and December 31, 2016 , we had balances payable related to these costs of $0.2 million , recorded as “Accounts payable and accrued expenses — related party” in our consolidated balance sheets. From time to time, in the ordinary course of business, USD and its affiliates may receive vendor payments or other amounts due to us or our subsidiaries. In addition, we may make payments to vendors and other unrelated parties on behalf of USD and its affiliates for which they routinely reimburse us. We had no significant balances payable or receivable at September 30, 2017 , and a $0.2 million balance receivable at December 31, 2016 , associated with these transactions included in “Accounts receivable — related party” within our consolidated balance sheet. Marketing Services Agreement In connection with our purchase of the Stroud terminal, we entered into a Marketing Services Agreement, effective as of May 31, 2017, with USDM, whereby we granted USDM the right to market the remaining capacity at the Stroud terminal in exchange for a nominal per barrel fee. USDM will fund any related capital costs associated with increasing the throughput or efficiency of the terminal to handle additional barrels. Upon expiration of our contract with the Stroud customer in June 2020, the same marketing rights will apply to throughput in excess of the throughput necessary for the Stroud terminal to generate Adjusted EBITDA that is at least equal to the average monthly Adjusted EBITDA derived from the Stroud terminal customer during the 12 months prior to expiration. We also granted USDG the right to develop other projects at the Stroud terminal in exchange for the payment to us of market-based compensation for the use of our property for such development projects. Any such development projects would be wholly-owned by USDG and would be subject to our existing right of first offer with respect to midstream projects developed by USDG. Variable Interest Entities We entered into purchase, assignment and assumption agreements to assign payment and performance obligations for certain operating lease agreements, as well as customer fleet service payments related to these operating leases, with the VIEs. Prior to July 1, 2016, a member of the board of directors of USD exercised control over the VIEs as its managing member. Subsequent to June 30, 2016, the managing member transferred ownership of the VIEs to a party that is unaffiliated with USD or us. As a result, for periods following June 30, 2016, we no longer treat the VIEs as related parties. Refer to Note 8 – Nonconsolidated Variable Interest Entities for additional discussion and information regarding transactions with the VIEs subsequent to June 30, 2016. For periods prior to July 1, 2016, our related party sales to the VIEs are included in the accompanying consolidated statements of operations as set forth in the following table for the indicated periods: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Fleet services — related party $ — $ — $ — $ 810 Related Party Revenue and Deferred Revenue We have agreements to provide USDM terminalling and fleet services with respect to our Hardisty terminal operations, which include reimbursement to us for certain out-of-pocket expenses we incur. In connection with our acquisition of the Stroud terminal, USDM assumed the rights and obligations for additional terminalling capacity at our Hardisty terminal from a former third-party customer, effective as of June 1, 2017, to facilitate the origination of crude oil barrels from our Hardisty terminal by the Stroud terminal customer for delivery to the Stroud terminal. As a result of the assumption of these rights and obligations by USDM, and in order to accommodate the needs of the Stroud terminal customer, the contracted term for the capacity held by USDM has been extended to June 30, 2020, and they control approximately 25 percent of the available monthly capacity of the Hardisty terminal. The terms and conditions of these agreements are similar to the terms and conditions of agreements we have with other parties at the Hardisty terminal that are not related to us. Our related party sales to USDM are presented in the following table for the indicated periods: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Terminalling services — related party $ 4,716 $ 1,736 $ 8,974 $ 5,142 Fleet leases — related party 1,013 890 2,794 2,671 Fleet services — related party 218 279 776 837 Freight and other reimbursables — related party — — 1 — $ 5,947 $ 2,905 $ 12,545 $ 8,650 We had $0.4 million receivable from USDM as of September 30, 2017 , and no receivables at December 31, 2016 , recorded in “Accounts receivable — related party.” We had deferred revenue included in “Deferred revenue, current — related party” in our consolidated balance sheets associated with our terminalling and fleet services agreements with USDM for amounts we have collected from them for their minimum volume commitment fees and prepaid lease amounts as follows as of the indicated dates: September 30, 2017 December 31, 2016 (in thousands) Customer prepayments, current portion (1) $ 411 $ 390 Minimum monthly commitment fees 5,299 3,902 Total deferred revenue, current portion $ 5,710 $ 4,292 (1) Represents amounts associated with railcar lease payments received in advance. Cash Distributions During the nine months ended September 30, 2017 , we paid the following aggregate cash distributions to USDG as a holder of our common units and the sole owner of our subordinated units and to USD Partners GP LLC for their general partner interest and as the holder of our IDRs. Distribution Declaration Date Record Date Distribution Payment Date Amount Paid to USDG Amount Paid to USD Partners GP LLC (in thousands) February 1, 2017 February 13, 2017 February 17, 2017 $ 3,814 $ 152 April 27, 2017 May 8, 2017 May 12, 2017 3,872 170 July 27, 2017 August 7, 2017 August 11, 2017 3,929 194 $ 11,615 $ 516 Transition Services Agreement In connection with our acquisition of the Casper terminal in November 2015, we entered into a transition services agreement with Cogent Energy Solutions, LLC, or Cogent, pursuant to which Cogent provided certain accounting, administrative, customer support and information technology support services to the Casper terminal for three months following the November 17, 2015, closing date, while we transitioned such services to our management. Two officers of an affiliate of our general partner are the principal owners of Cogent. As a result, these officers were considered to be beneficiaries of this agreement. Pursuant to the terms of this agreement, we incurred approximately $52 thousand of expenses for the nine months ended September 30, 2016 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES From time to time, we may be involved in legal, tax, regulatory and other proceedings in the ordinary course of business. We do not believe that we are currently a party to any such proceedings that will have a material adverse impact on our financial condition or results of operations. In connection with the railcar services we provide, we regularly incur railcar cleanup and repair costs upon our return of these railcars to the lessors. We typically pass such costs on to our customers pursuant to the terms of our lease agreements with them. A legacy customer associated with a terminal sold by USD prior to our formation has returned 265 railcars to us, all of which the lessors claim require additional cleaning and repair from alleged corrosion. We are currently in discussions with the lessors and our customer regarding the validity of these additional costs. We believe that our customer will ultimately be responsible for any costs associated with these returns, and USD has agreed to indemnify us to the extent that we are unable to recover any such costs from our customer. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING We manage our business in two reportable segments: Terminalling services and Fleet services. The Terminalling services segment charges minimum monthly commitment fees under multi-year take-or-pay contracts to load various grades of crude oil into railcars, as well as fixed fees per gallon to transload ethanol from railcars, including related logistics services. The Fleet services segment provides customers with railcars and fleet services related to the transportation of liquid hydrocarbons and biofuels under long-term, take-or-pay contracts. Corporate activities are not considered a reportable segment, but they are included to present shared services and financing activities that are not allocated to our established reporting segments. Our segments offer different services and are managed accordingly. Our chief operating decision maker, or CODM, regularly reviews financial information about both segments in order to allocate resources and evaluate performance. Our CODM assesses segment performance based on the cash flows produced by our established reporting segments using Segment Adjusted EBITDA. We define Segment Adjusted EBITDA as “Net cash provided by operating activities” adjusted for changes in working capital items, changes in restricted cash, interest, income taxes, foreign currency transaction gains and losses, adjustments related to deferred revenue associated with minimum monthly commitment fees and other items which do not affect the underlying cash flows produced by our businesses. The following tables summarize our reportable segment data: Three Months Ended September 30, 2017 Terminalling Fleet Corporate Total (in thousands) Revenues Terminalling services $ 21,799 $ — $ — $ 21,799 Terminalling services — related party 4,716 — — 4,716 Railroad incentives 4 — — 4 Fleet leases — 643 — 643 Fleet leases — related party — 1,013 — 1,013 Fleet services — 470 — 470 Fleet services — related party — 218 — 218 Freight and other reimbursables — 118 — 118 Freight and other reimbursables — related party — — — — Total revenues 26,519 2,462 — 28,981 Operating costs Subcontracted rail services 2,340 — — 2,340 Pipeline fees 6,367 — — 6,367 Fleet leases — 1,656 — 1,656 Freight and other reimbursables — 118 — 118 Operating and maintenance 654 95 — 749 Selling, general and administrative 1,395 210 2,093 3,698 Depreciation and amortization 5,254 — — 5,254 Total operating costs 16,010 2,079 2,093 20,182 Operating income (loss) 10,509 383 (2,093 ) 8,799 Interest expense — — 2,388 2,388 Loss associated with derivative instruments 667 — — 667 Foreign currency transaction loss (gain) (20 ) 4 (441 ) (457 ) Other income, net (48 ) — — (48 ) Provision for (benefit from) income taxes (343 ) 196 (31 ) (178 ) Net income (loss) $ 10,253 $ 183 $ (4,009 ) $ 6,427 Three Months Ended September 30, 2016 Terminalling Fleet Corporate Total (in thousands) Revenues Terminalling services $ 24,078 $ — $ — $ 24,078 Terminalling services — related party 1,736 — — 1,736 Railroad incentives 24 — — 24 Fleet leases — 643 — 643 Fleet leases — related party — 890 — 890 Fleet services — 475 — 475 Fleet services — related party — 279 — 279 Freight and other reimbursables — 218 — 218 Freight and other reimbursables — related party — — — — Total revenues 25,838 2,505 — 28,343 Operating costs Subcontracted rail services 2,004 — — 2,004 Pipeline fees 5,492 — — 5,492 Fleet leases — 1,534 — 1,534 Freight and other reimbursables — 218 — 218 Operating and maintenance 651 95 — 746 Selling, general and administrative 1,258 230 2,455 3,943 Depreciation and amortization 4,906 — — 4,906 Total operating costs 14,311 2,077 2,455 18,843 Operating income (loss) 11,527 428 (2,455 ) 9,500 Interest expense 286 — 2,286 2,572 Gain associated with derivative instruments (349 ) — — (349 ) Foreign currency transaction loss (gain) 31 (2 ) (4 ) 25 Other income, net — — — — Provision for (benefit from) income taxes (5,739 ) 160 — (5,579 ) Net income (loss) $ 17,298 $ 270 $ (4,737 ) $ 12,831 Nine Months Ended September 30, 2017 Terminalling Fleet Corporate Total (in thousands) Revenues Terminalling services $ 67,335 $ — $ — $ 67,335 Terminalling services — related party 8,974 — — 8,974 Railroad incentives 25 — — 25 Fleet leases — 1,929 — 1,929 Fleet leases — related party — 2,794 — 2,794 Fleet services — 1,405 — 1,405 Fleet services — related party — 776 — 776 Freight and other reimbursables 110 373 — 483 Freight and other reimbursables — related party — 1 — 1 Total revenues 76,444 7,278 — 83,722 Operating costs Subcontracted rail services 6,148 — — 6,148 Pipeline fees 17,153 — — 17,153 Fleet leases — 4,723 — 4,723 Freight and other reimbursables 110 374 — 484 Operating and maintenance 1,765 285 — 2,050 Selling, general and administrative 3,795 694 6,714 11,203 Depreciation and amortization 15,164 — — 15,164 Total operating costs 44,135 6,076 6,714 56,925 Operating income (loss) 32,309 1,202 (6,714 ) 26,797 Interest expense 170 — 7,338 7,508 Loss associated with derivative instruments 1,279 — — 1,279 Foreign currency transaction loss (gain) (33 ) 6 (500 ) (527 ) Other income, net (40 ) — — (40 ) Provision for (benefit from) income taxes (1,761 ) 511 (177 ) (1,427 ) Net income (loss) $ 32,694 $ 685 $ (13,375 ) $ 20,004 Goodwill $ 33,589 $ — $ — $ 33,589 Total assets $ 312,970 $ 2,001 $ 939 $ 315,910 Capital expenditures $ 26,708 $ — $ — $ 26,708 Nine Months Ended September 30, 2016 Terminalling Fleet Corporate Total (in thousands) Revenues Terminalling services $ 69,560 $ — $ — $ 69,560 Terminalling services — related party 5,142 — — 5,142 Railroad incentives 61 — — 61 Fleet leases — 1,933 — 1,933 Fleet leases — related party — 2,671 — 2,671 Fleet services — 613 — 613 Fleet services — related party — 1,647 — 1,647 Freight and other reimbursables 12 932 — 944 Freight and other reimbursables — related party — — — — Total revenues 74,775 7,796 — 82,571 Operating costs Subcontracted rail services 6,073 — — 6,073 Pipeline fees 15,544 — — 15,544 Fleet leases — 4,605 — 4,605 Freight and other reimbursables 12 932 — 944 Operating and maintenance 2,158 241 — 2,399 Selling, general and administrative 3,548 631 7,662 11,841 Depreciation and amortization 14,725 — — 14,725 Total operating costs 42,060 6,409 7,662 56,131 Operating income (loss) 32,715 1,387 (7,662 ) 26,440 Interest expense 968 — 6,320 7,288 Loss associated with derivative instruments 921 — — 921 Foreign currency transaction gain (44 ) (72 ) (4 ) (120 ) Other income, net — — — — Provision for (benefit from) income taxes (2,008 ) 142 1 (1,865 ) Net income (loss) $ 32,878 $ 1,317 $ (13,979 ) $ 20,216 Goodwill $ 33,970 $ — $ — $ 33,970 Total assets $ 309,357 $ 5,754 $ 1,951 $ 317,062 Capital expenditures $ 471 $ — $ — $ 471 Segment Adjusted EBITDA The following table provides a reconciliation of Segment Adjusted EBITDA to “Net cash provided by operating activities:” Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Segment Adjusted EBITDA Terminalling services $ 14,186 $ 17,080 $ 46,434 $ 50,310 Fleet services 383 428 1,202 1,387 Corporate activities (1) (1,147 ) (1,328 ) (3,752 ) (4,838 ) Total Adjusted EBITDA 13,422 16,180 43,884 46,859 Add (deduct): Amortization of deferred financing costs 216 216 646 646 Deferred income taxes (221 ) 98 86 2 Changes in accounts receivable and other assets 3,215 (4,309 ) 1,862 (2,802 ) Changes in accounts payable and accrued expenses 2,033 2,027 947 90 Changes in deferred revenue and other liabilities (3,147 ) (2,599 ) (5,667 ) (499 ) Change in restricted cash 915 (31 ) 685 (664 ) Interest expense, net (2,384 ) (2,572 ) (7,500 ) (7,288 ) Benefit from income taxes 178 5,579 1,427 1,865 Foreign currency transaction gain (loss) (2) 457 (25 ) 527 120 Deferred revenue associated with minimum monthly commitment fees (3) 1,473 (43 ) 1,331 (1,230 ) Net cash provided by operating activities $ 16,157 $ 14,521 $ 38,228 $ 37,099 (1) Corporate activities represent shared service and financing transactions that are not allocated to our established reporting segments. (2) Represents foreign exchange transaction amounts associated with activities between our U.S. and Canadian subsidiaries. (3) Represents deferred revenue associated with minimum monthly commitment fees in excess of throughput utilized, which fees are not refundable to our customers. Amounts presented are net of: (a) the corresponding prepaid Gibson pipeline fee that will be recognized as expense concurrently with the recognition of revenue; (b) revenue recognized in the current period that was previously deferred; and (c) expense recognized for previously prepaid Gibson pipeline fees, which correspond with the revenue recognized that was previously deferred. Refer to Note 6 - Deferred Revenue for additional discussion of deferred revenue. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES U.S. Federal and State Income Taxes We are treated as a partnership for U.S. federal and most state income tax purposes, with each partner being separately taxed on their share of our taxable income. One of our subsidiaries, USD Rail LP, has elected to be classified as an entity taxable as a corporation for U.S. federal income tax purposes. We are also subject to state franchise tax in the state of Texas, which is treated as an income tax under the applicable accounting guidance. Our U.S. federal income tax expense is based upon our estimated annual effective federal income tax rate of 34% , as applied to USD Rail LP’s taxable income of $0.9 million and $1.9 million for the three and nine months ended September 30, 2017 , respectively. We recorded a provision for U.S. federal income tax with respect to these periods utilizing net operating loss carryforwards to offset a portion of our taxable income. We had taxable income of $0.4 million and a net operating loss of $0.8 million for the three and nine months ended September 30, 2016 , respectively, and as a result of the year-to-date loss, we did not record a provision for U.S. federal income tax with respect to these periods. Foreign Income Taxes Our Canadian operations are conducted through entities that are subject to Canadian federal and provincial income taxes. We computed the current income tax expense associated with our Canadian operations using the combined federal and provincial income tax rate of 27% applied to the pretax book income of our Canadian operations for the three and nine months ended September 30, 2017 and 2016 . The combined rate was also used to compute deferred income tax expense, which is the result of temporary differences that are expected to reverse in the future. The 2017 income tax expense of our Canadian operations includes a reduction to our estimate for 2016 income tax expense resulting from refunds received of approximately $2.6 million ( C$3.4 million ) in connection with our Canadian federal and provincial income tax returns for 2016 , which we filed in June 2017 . In 2016 , we adopted a methodology for determining the return attributable to our Canadian subsidiaries based upon the completion of a study we initially commissioned in 2015 , which modifies the amount of Canadian federal and provincial income taxes to which our Canadian operations are subject. We calculated our 2017 and 2016 income tax provisions for our Canadian operations utilizing this methodology. This methodology also resulted in a reduction of our Canadian income tax liability for the 2015 tax year, which we reflected in our third quarter 2016 income statement as a benefit to our 2016 income taxes. Combined Effective Income Tax Rate We determined our 2017 income tax expense based upon our estimated annual effective income tax rate of approximately 27% on a consolidated basis for fiscal year 2017 , which rate is attributable to the multiple domestic and foreign tax jurisdictions to which we are subject. Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Current income tax expense (benefit): U.S. federal income tax $ 289 $ — $ 662 $ — U.S. federal operating loss carryforward 56 — (200 ) — State income tax expense (benefit) (17 ) 14 (126 ) 44 Canadian federal and provincial income taxes benefit (285 ) (5,691 ) (1,849 ) (1,911 ) Total current income tax expense (benefit) 43 (5,677 ) (1,513 ) (1,867 ) Deferred income tax expense (benefit): U.S. federal income tax expense (benefit) (164 ) 147 10 147 Canadian federal and provincial income taxes expense (benefit) (57 ) (49 ) 76 (145 ) Total change in deferred income tax expense (benefit) (221 ) 98 86 2 Benefit from income taxes $ (178 ) $ (5,579 ) $ (1,427 ) $ (1,865 ) The reconciliation between income tax expense based on the U.S. federal statutory income tax rate and our effective income tax expense is presented below: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Income tax expense at the U.S. federal statutory rate $ 2,124 $ 2,465 $ 6,316 $ 6,239 Amount attributable to partnership not subject to income tax (2,418 ) (9,477 ) (8,132 ) (8,318 ) Foreign income tax rate differential 91 1,668 456 709 Other 27 45 38 (17 ) State income tax expense (benefit) (1) (21 ) 14 (139 ) 44 Change in valuation allowance 19 (294 ) 34 (522 ) Benefit from income taxes $ (178 ) $ (5,579 ) $ (1,427 ) $ (1,865 ) (1) Net of the federal income tax expense or benefit for the deduction associated with state income taxes. Our deferred income tax assets and liabilities reflect the income tax effect of differences between the carrying amounts of our assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Major components of deferred income tax assets and liabilities associated with our operations were as follows as of the dates indicated: September 30, 2017 U.S. Foreign Total (in thousands) Deferred income tax assets Deferred revenues $ — $ — $ — Capital loss carryforwards — 472 472 Operating loss carryforwards — — — Deferred income tax liabilities Unbilled revenue — (285 ) (285 ) Prepaid expenses (256 ) — (256 ) Property and equipment — (416 ) (416 ) Valuation allowance — (472 ) (472 ) Deferred income tax liability, net $ (256 ) $ (701 ) $ (957 ) December 31, 2016 U.S. Foreign Total (in thousands) Deferred income tax assets Deferred revenues $ 89 $ — $ 89 Capital loss carryforwards — 438 438 Operating loss carryforwards 257 — 257 Deferred income tax liabilities Prepaid expenses (592 ) — (592 ) Property and equipment — (577 ) (577 ) Valuation allowance — (438 ) (438 ) Deferred income tax liability, net $ (246 ) $ (577 ) $ (823 ) We had no available U.S. federal loss carryforward remaining as of September 30, 2017 , and approximately $0.8 million as of December 31, 2016 . Our available Canadian loss carryforward was approximately $4.7 million and $4.4 million as of September 30, 2017 and December 31, 2016 , respectively, which will begin expiring in 2033. We are subject to examination by the taxing authorities for the years ended December 31, 2016, 2015 and 2014. USD has agreed to indemnify us for all federal, state and local tax liabilities for periods before our formation. We did not have any unrecognized income tax benefits or any income tax reserves for uncertain tax positions as of September 30, 2017 and December 31, 2016 . |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Our net income and cash flows are subject to fluctuations resulting from changes in interest rates on our variable rate debt obligations and foreign currency exchange rates, particularly with respect to the U.S. dollar and the Canadian dollar. At September 30, 2017 and December 31, 2016 , we did not employ any derivative financial instruments to manage our exposure to fluctuations in interest rates, although we may use derivative financial instruments, including swaps, options and other financial instruments with similar characteristics to manage this exposure in the future. Foreign Currency Derivatives We derive a significant portion of our cash flows from our Hardisty terminal operations in the province of Alberta, Canada. These cash flows are denominated in Canadian dollars. As a result, fluctuations in the exchange rate between the Canadian dollar and the U.S. dollar could have a significant effect on our results of operations, cash flows and financial position. We endeavor to limit our foreign currency risk exposure using various types of derivative financial instruments with characteristics that effectively reduce or eliminate the impact to us of declines in the exchange rate for a specified value of Canadian dollar denominated cash flows we expect to exchange into U.S. dollars. All of our derivative financial instruments are employed in connection with an underlying asset, liability and/or forecasted transaction and are not entered into for speculative purposes. In April 2016, we entered into four separate forward contracts with an aggregate notional amount of C$33.5 million to manage our exposure to fluctuations in the exchange rate between the Canadian dollar and the U.S. dollar resulting from our Canadian operations during the 2017 calendar year. Each forward contract effectively fixes the exchange rate we will receive for each Canadian dollar we sell to the counterparty. One of these forward contracts will settle at the end of each fiscal quarter during 2017 and secures an exchange rate where a Canadian dollar is exchanged for an amount between 0.7804 and 0.7809 U.S. dollars. In June 2015, we entered into four separate collar arrangements with an aggregate notional value of C$32.0 million , which settled at the end of each fiscal quarter during 2016, each having a notional value ranging between C$7.9 million and C$8.1 million . These derivative contracts were executed to secure cash flows totaling C$32.0 million at an exchange rate range where a Canadian dollar is exchanged for an amount between 0.84 and 0.86 U.S. dollars. Commodity Derivatives As a part of our purchase of the Stroud terminal and related facilities, we acquired crude oil used by the prior owner for line fill in the crude oil pipeline and tank bottoms for the storage tanks at the Stroud terminal. We agreed to sell the approximately 18,000 barrels, or bbl, of crude oil used for tank bottoms in July 2017 , and the approximately 13,000 bbl of crude oil used for line fill in October 2017 , to an unrelated party at a price which varies with the price of crude oil during the months of July and October of 2017 . In June 2017 , we entered into two separate fixed-for-floating swap contracts with an aggregate notional amount of 31,778 bbl, to manage our exposure to fluctuating crude oil prices. Each swap contract effectively fixes the price we will receive upon our delivery of the crude oil. The first contract for approximately 18,000 bbl settled in July 2017 at $47.20 per barrel and the second for approximately 13,000 bbl will settle in October 2017 at $47.70 per barrel. In September, we also acquired crude oil used by the prior owner of the Stroud terminal for tank bottoms in a leased storage tank at a third-party facility in Cushing, Oklahoma. We agreed to sell this crude oil in October 2017 to an unrelated party at a price which varies with the price of crude oil during the month of October. We entered into a fixed-for-floating swap contract with an aggregate notional amount of 30,000 bbl to manage our exposure to the variability in crude oil prices during the month of October 2017 . The swap contract effectively fixes the price we will receive upon our delivery of the crude oil and will settle in October 2017 at $47.90 per barrel. Derivative Positions We record all of our derivative financial instruments at their fair values in the line items specified below within our consolidated balance sheets, the amounts of which were as follows at the dates indicated: September 30, 2017 December 31, 2016 (in thousands) Other current assets $ — $ 1,167 Other current liabilities (354 ) — $ (354 ) $ 1,167 We have not designated our derivative financial instruments as hedges of our commodity or foreign currency exposures. As a result, changes in the fair value of these derivatives are recorded as “Loss (gain) associated with derivative instruments” in our consolidated statements of income. The gains or losses associated with changes in the fair value of our derivative contracts do not affect our cash flows until the underlying contract is settled by making or receiving a payment to or from the counterparty. In connection with our derivative activities, we recognized the following amounts during the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Loss (gain) associated with derivative instruments $ 667 $ (349 ) $ 1,279 $ 921 We determine the fair value of our derivative financial instruments using third party pricing information that is derived from observable market inputs, which we classify as level 2 with respect to the fair value hierarchy. The following tables present summarized information about the fair values of our outstanding foreign currency contracts: At September 30, 2017 At December 31, 2016 Notional (C$) Forward Rate (1) Market Price (1) Fair Value Fair Value (in thousands) Forward contracts maturing in 2017 March 31, 2017 C$ 8,300,000 0.7804 — $ — $ 299 June 30, 2017 C$ 8,400,000 0.7805 — — 296 September 29, 2017 C$ 8,400,000 0.7807 — — 290 December 29, 2017 C$ 8,400,000 0.7809 0.8028 (184 ) 282 Total $ (184 ) $ 1,167 (1) Forward rates and market prices are denoted in amounts where a Canadian dollar is exchanged for the indicated amount of U.S. dollars. The forward rate represents the rate we will receive upon settlement. The market price represents the rate we would expect to pay had the contract been settled on September 30, 2017 . At September 30, 2017 Notional Market Price (1) Fixed Price (2) Fair Value (in Bbl) (in thousands) Commodity swaps maturing in 2017 July 2017 (3) 18,395 $ — $ 47.20 $ — October 2017 13,383 $ 51.76 $ 47.70 (54 ) October 2017 30,000 $ 51.76 $ 47.90 (116 ) 61,778 $ (170 ) (1) The market price represents the price we would pay to purchase one barrel of crude oil of the grade specified for the settlement date as set forth in the derivative contract as of September 30, 2017 . (2) The fixed price represents the fixed price we will receive upon our sale of one barrel of crude oil of the grade specified for the settlement date as set forth in the derivative contract. (3) The market price for the commodity swap on July 14, 2017, the date we sold the crude oil, was $47.64 . We record the fair market value of our derivative financial instruments in our consolidated balance sheets as current and non-current assets or liabilities on a net basis by counterparty. The terms of the International Swaps and Derivatives Association Master Agreement, which governs our financial contracts and include master netting agreements, allow the parties to our derivative contracts to elect net settlement in respect of all transactions under the agreements. We did not have any assets associated with our derivative contracts at September 30, 2017 , or liabilities at December 31, 2016 , that were offset against the asset and liability balances for the respective periods. |
PARTNERS' CAPITAL
PARTNERS' CAPITAL | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
PARTNERS' CAPITAL | PARTNERS’ CAPITAL Our common units and subordinated units represent limited partner interests in us. The holders of our common units and subordinated units are entitled to participate in partnership distributions and to exercise the rights and privileges available to limited partners under our partnership agreement. Our Class A units are limited partner interests in us that entitle the holders to nonforfeitable distributions that are equivalent to the distributions paid with respect to our common units (excluding any arrearages of unpaid minimum quarterly distributions from prior quarters) and, as a result, are considered participating securities. Our Class A units do not have voting rights and vest in four equal annual installments over the four years following the consummation of our initial public offering, or IPO, only if we grow our annualized distributions each year. If we do not achieve positive distribution growth in any of these years, the Class A units that would otherwise vest for that year will be forfeited. The Class A units contain a conversion feature, which, upon vesting, provides for the conversion of the Class A units into common units based on a conversion factor that is tied to the level of our distribution growth for the applicable year. The conversion factor was 1.00 for the first vesting tranche, 1.50 for the second vesting tranche and will be no more than 1.75 for the third vesting tranche and 2.00 for the fourth and final vesting tranche. In February 2017, pursuant to the terms set forth in our partnership agreement, the second vesting tranche of 46,250 Class A units vested. We determined that, upon conversion, each vested Class A unit would receive one and one-half ( 1.50 ) common units based upon our distributions paid for the four preceding quarters. As a result, 46,250 Class A units were converted into 69,375 common units. Our partnership agreement provides that, while any subordinated units remain outstanding, holders of our common units and Class A units will have the right to receive distributions of available cash from operating surplus each quarter in an amount equal to our minimum quarterly distribution per unit, plus (with respect to the common units) any arrearages in the payment of the minimum quarterly distribution on the common units from prior quarters, before any distributions of available cash from operating surplus may be made on the subordinated units. Subordinated units convert into common units on a one -for-one basis in separate sequential tranches. Each tranche is comprised of 20.0 percent of the subordinated units issued in conjunction with our IPO. A separate tranche is eligible to convert on or after December 31, 2015 (but no more frequently than once in any twelve -month period), provided on such date: (i) distributions of available cash from operating surplus on each of the outstanding common units, Class A units, subordinated units and general partner units equaled or exceeded $1.15 per unit (the annualized minimum quarterly distribution) for the four quarter period immediately preceding that date; (ii) the adjusted operating surplus generated during the four quarter period immediately preceding that date equaled or exceeded the sum of $1.15 per unit (the annualized minimum quarterly distribution) on all of the common units, Class A units, subordinated units and general partner units outstanding during that period on a fully diluted basis; and (iii) there are no arrearages in the payment of the minimum quarterly distribution on our common units. For each successive tranche, the four quarter period specified in clauses (i) and (ii) above must commence after the four quarter period applicable to any prior tranche of subordinated units. In February 2017, pursuant to the terms set forth in our partnership agreement, we converted the second tranche of 2,092,709 of our subordinated units into common units upon satisfaction of the conditions established for conversion. Pursuant to the terms of the USD Partners LP 2014 Long-Term Incentive Plan, which we refer to as the LTIP, our phantom unit awards, or Phantom Units, granted to directors and employees of our general partner and its affiliates, which are classified as equity, are converted into our common units upon vesting. Equity-classified Phantom Units totaling 269,286 vested during the first nine months of 2017 , of which 190,016 were converted into our common units after 79,270 Phantom Units were withheld from participants for the payment of applicable employment-related withholding taxes. The conversion of these Phantom Units did not have any economic impact on Partners’ Capital, since the economic impact is recognized over the vesting period. Additional information and discussion regarding our unit based compensation plans is included below in Note 15 - Unit Based Compensation . The board of directors of our general partner has adopted a cash distribution policy pursuant to which we intend to distribute at least the minimum quarterly distribution of $0.2875 per unit ( $1.15 per unit on an annualized basis) on all of our units to the extent we have sufficient available cash after the establishment of cash reserves and the payment of our expenses, including payments to our general partner and its affiliates. The board of directors of our general partner may change our distribution policy at any time and from time to time. Our partnership agreement does not require us to pay cash distributions on a quarterly or other basis. The amount of distributions we pay under our cash distribution policy and the decision to make any distribution are determined by our general partner. In June 2017, we completed an underwritten public offering of 3,000,000 common units that we used to repay a portion of the amounts outstanding on our revolving credit facility, including amounts we borrowed to fund our acquisition of the Stroud terminal. The following table presents the net proceeds from our common unit issuances: Number of Common Units Issued Public Offering Price per Common Unit Net Proceeds to the Partnership (1) (in millions) June 7, 2017 Issuance 3,000,000 $ 11.60 $ 33.7 (1) Net of underwriter’s fees and discounts, commissions and issuance costs. |
UNIT BASED COMPENSATION
UNIT BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
UNIT BASED COMPENSATION | UNIT BASED COMPENSATION Class A units Our Class A units vest over a four year period if established distribution target thresholds are met each year of the four year vesting period. In February 2017, pursuant to the terms set forth in our partnership agreement, the second vesting tranche of 46,250 Class A units vested based upon our distributions paid for the four preceding quarters and were converted on a basis of one and one-half common units for each class A unit. As a result, we converted 46,250 Class A units into 69,375 common units. The grant date average fair value of all Class A units was $25.71 per unit at September 30, 2017 and 2016 . The following table presents the activity associated with our Class A units for the specified periods: Nine Months Ended September 30, 2017 2016 Class A units outstanding at beginning of period 138,750 185,000 Vested (46,250 ) (46,250 ) Forfeited (10,000 ) — Class A units outstanding at end of period 82,500 138,750 We recognized compensation expense in “Selling, general and administrative” with regard to our Class A units for the following amounts during the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Selling, general and administrative (1) $ (124 ) $ 248 $ 108 $ 782 (1) Includes $ 247 thousand reduction to compensation expense for Class A forfeitures for the three and nine months ended September 30, 2017 . For the three and nine months ended September 30, 2017 , we had forfeitures of 10,000 Class A units. No forfeitures occurred during the three and nine months ended September 30, 2016 . We have elected to account for actual forfeitures as they occur rather than applying an estimated forfeiture rate when determining compensation expense. Each holder of a Class A unit is entitled to nonforfeitable cash distributions equal to the product of the number of Class A units outstanding for the participant and the cash distribution per unit paid to our common unitholders. These distributions are included in “Distributions” as presented in our consolidated statements of cash flows and our consolidated statement of partners’ capital. However, any distributions paid on Class A units that are forfeited are reclassified to unit based compensation expense when we determine that the Class A units are not expected to vest. For the three and nine months ended September 30, 2017 , we recognized compensation expense of $30 thousand for distributions paid on Class A units that were forfeited during the periods. For the three and nine months ended September 30, 2016 , we recognized no amounts in compensation expense for distributions paid on forfeited Class A units. Long-term Incentive Plan In 2017 and 2016 , the board of directors of our general partner, acting in its capacity as our general partner, approved the grant of 693,099 and 576,373 Phantom Units, respectively, to directors and employees of our general partner and its affiliates under our LTIP. The total number of our common units initially authorized for issuance under the LTIP was 1,654,167 , of which 177,952 remained available at September 30, 2017 . The Phantom Units are subject to all of the terms and conditions of the LTIP and the Phantom Unit award agreements, which are collectively referred to as the Award Agreements. Award amounts for each of the grants are generally determined by reference to a specified dollar amount determined based on an allocation formula which included a percentage multiplier of the grantee’s base salary, among other factors, converted to a number of units based on the closing price of one of our common units preceding the grant date, as quoted on the NYSE. Phantom Unit awards generally represent rights to receive our common units upon vesting. However, with respect to the awards granted to directors and employees of our general partner and its affiliates domiciled in Canada, for each Phantom Unit that vests, a participant is entitled to receive cash for an amount equivalent to the closing market price of one of our common units on the vesting date. Each Phantom Unit granted under the Award Agreements includes an accompanying distribution equivalent right, or DER, which entitles each participant to receive payments at a per unit rate equal in amount to the per unit rate for any distributions we make with respect to our common units. The Award Agreements granted to employees of our general partner and its affiliates generally contemplate that the individual grants of Phantom Units will vest in four equal annual installments based on the grantee’s continued employment through the vesting dates specified in the Award Agreements, subject to acceleration upon the grantee’s death or disability or involuntary termination in connection with a change in control of the Partnership or our general partner. Awards to independent directors of the board of our general partner and an independent consultant typically vest over a one year period following the grant date. The following tables present our Equity-classified Phantom Unit award activity: Number of Director and Independent Consultant Units Number of Employee Units Weighted-Average Grant Date Fair Value Per Unit Phantom Unit awards at December 31, 2016 64,830 730,808 $ 8.51 Granted 24,999 639,955 $ 12.79 Vested (64,830 ) (204,456 ) $ 8.47 Forfeited — (56,083 ) $ 10.94 Phantom Unit awards at September 30, 2017 24,999 1,110,224 $ 10.91 Number of Director and Independent Consultant Units Number of Employee Units Weighted-Average Grant Date Fair Value Per Unit Phantom Unit awards at December 31, 2015 24,045 349,976 $ 12.75 Granted 64,830 471,412 $ 6.39 Vested (20,442 ) (87,500 ) $ 12.79 Forfeited — (2,608 ) $ 7.97 Phantom Unit awards at September 30, 2016 68,433 731,280 $ 8.50 The following tables present our Liability-classified Phantom Unit award activity: Number of Director and Independent Consultant Units Number of Employee Units Weighted-Average Grant Date Fair Value Per Unit Phantom Unit awards at December 31, 2016 21,610 21,615 $ 7.70 Granted 8,333 19,812 $ 12.80 Vested (21,610 ) — $ 6.39 Phantom Unit awards at September 30, 2017 8,333 41,427 $ 11.15 Number of Director and Independent Consultant Units Number of Employee Units Weighted-Average Grant Date Fair Value Per Unit Phantom Unit awards at December 31, 2015 10,256 13,276 $ 12.78 Granted 21,610 17,021 $ 6.39 Vested (10,256 ) — $ 12.78 Phantom Unit awards at September 30, 2016 21,610 30,297 $ 8.02 The fair value of each Phantom Unit on the grant date is equal to the closing market price of our common units on the grant date. We account for the Phantom Unit grants to independent directors and employees of our general partner and its affiliates domiciled in Canada that are paid out in cash upon vesting, throughout the requisite vesting period, by revaluing the unvested Phantom Units outstanding at the end of each reporting period and recording a charge to compensation expense in “Selling, general and administrative” in our consolidated statements of income and recognizing a liability in “Other current liabilities” in our consolidated balance sheets. With respect to the Phantom Units granted to employees of our general partner and its affiliates domiciled in the United States, we amortize the initial grant date fair value over the requisite service period using the straight-line method with a charge to compensation expense in “Selling, general and administrative” in our consolidated statements of income, with an offset to common units within the Partners’ Capital section of our consolidated balance sheet. With respect to the Phantom Units granted to consultants and independent directors of our general partner and its affiliates domiciled in the United States, we revalue the unvested Phantom Units outstanding at the end of each reporting period throughout the requisite service period and record a charge to compensation expense in “Selling, general and administrative” in our consolidated statements of income, with an offset to common units within the Partners’ Capital section of our consolidated balance sheet. For the three months ended September 30, 2017 and 2016 , we recognized approximately $1.1 million and $0.9 million , respectively, of compensation expense associated with outstanding Phantom Units, and for the nine months ended September 30, 2017 and 2016 , we recognized approximately $2.9 million and $2.0 million , respectively. As of September 30, 2017 , we have unrecognized compensation expense associated with our outstanding Phantom Units totaling $10.3 million , which we expect to recognize over a weighted average period of 2.87 years. We have elected to account for actual forfeitures as they occur rather than using an estimated forfeiture rate to determine the number of awards we expect to vest. We made payments to holders of the Phantom Units pursuant to the associated DERs granted to them under the Award Agreements as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Equity-classified Phantom Units (1) $ 388 $ 252 $ 1,048 $ 612 Liability-classified Phantom Units 17 16 48 39 Total $ 405 $ 268 $ 1,096 $ 651 (1) We reclassified $61 thousand and $2 thousand for the three months ended September 30, 2017 and 2016 , and $64 thousand and $2 thousand for the nine months ended September 30, 2017 and 2016 , respectively, to unit based compensation expense for DERs paid in relation to Phantom Units that have been forfeited. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION The following table provides supplemental cash flow information for the periods indicated: Nine Months Ended September 30, 2017 2016 (in thousands) Cash paid (received) for income taxes $ (1,250 ) $ 2,160 Cash paid for interest $ 7,102 $ 6,558 The following table provides supplemental information for the item labeled “Other” in the “Net cash provided by operating activities” section of our consolidated statements of cash flows: Nine Months Ended September 30, 2017 2016 (in thousands) Loss associated with disposal of assets $ 18 $ — Amortization of deferred financing costs 646 646 Deferred income taxes 86 2 $ 750 $ 648 |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED | RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED Intangibles — Goodwill and Other In January 2017, the FASB issued Accounting Standards Update No. 2017-04, or ASU 2017-04, which amends ASC Topic 350 to modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. An entity should recognize an impairment loss for the amount by which the carrying amount of a reporting unit exceeds the reporting unit’s fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The pronouncement is effective for fiscal years beginning after December 15, 2019, or for any interim impairment testing within those fiscal years and is required to be applied prospectively, with early adoption permitted. We do not expect our adoption of this standard to have a material impact on our consolidated financial statements. However, any impairment assessment we perform subsequent to our adoption of the standard could produce an impairment of goodwill to the extent the carrying amount of a reporting unit exceeds its fair value. Restricted Cash In November 2016, the FASB issued Accounting Standards Update No. 2016-18, or ASU 2016-18, which amends ASC Topic 230 to require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents will be included with cash and cash equivalents when we reconcile the beginning-of-period and end-of-period total amounts shown on our consolidated statements of cash flows. The pronouncement is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and is required to be applied retrospectively for all financial statements presented, with early adoption permitted. We do not expect to adopt this standard early, nor do we expect our adoption of this standard to have a material impact on our consolidated financial statements, other than the presentation of cash and cash equivalents within our consolidated statements of cash flows. Leases In February 2016, the FASB issued Accounting Standards Update No. 2016-02, or ASU 2016-02, which amends ASC Topic 842 to require balance sheet recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. The amendment provides an option that permits us to elect not to recognize the lease assets and liabilities for leases with a term of 12 months or less. The pronouncement is effective for years beginning after December 15, 2018, and early adoption is permitted. Currently, we cannot reasonably estimate the impact our adoption of ASU 2016-02 will have on our consolidated financial statements. We do not currently recognize operating leases in our balance sheets as will be required by ASU 2016-02, but we record payments for operating leases as rent expense as incurred. Our process for implementing ASU 2016-02 will involve evaluating all of our existing leases with terms greater than 12 months to quantify the impact to our financial statements, developing accounting policies and internal control processes to address adherence to the requirements of the standard, evaluating the capability of existing accounting systems and any enhancements needed, determining the need to modify any bank or debt compliance requirements, and training and educating our workforce and the investment community regarding the financial statement impact that application of the standard will have. We recently initiated steps to identify, accumulate and categorize our lease agreements into homogeneous groups to evaluate the particular terms for each type of agreement in relation to the requirements of ASU 2016-02 to determine the accounting impact, commonly referred to as an “Impact Assessment.” Once we have determined the impact ASU 2016-02 will have on our current accounting for each particular type of lease, we will develop accounting policies and internal control processes and initiate other steps to implement ASU 2016-02. We do not currently expect to early adopt the provisions of this standard. Revenue from Contracts with Customers In May 2014, the FASB issued Accounting Standards Update No. 2014-09, or ASU 2014-09, that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 is effective for annual and interim periods beginning on or after December 15, 2017, and may be applied on either a full or modified retrospective basis. Additionally, the FASB has issued other related Accounting Standards Updates to clarify application of the guidance in the original standard and to provide practical expedients for implementing the guidance, all of which will be effective upon adoption. We have assessed the impact our adoption of ASU 2014-09 is expected to have on our current accounting policies, which we have modified to incorporate the requirements of the new standard. We have completed our evaluation and modification of existing accounting policies although further refinement may be necessary. We have developed financial models to permit quantifying the impact our application of ASU 2014-09 will have on our previously issued financial statements and are currently in the process of quantifying the impact our adoption will have on previously issued financial statements. We have prepared drafts of disclosures required by the new standard, which we are refining in connection with quantifying the impact to previously issued financial statements. We are also evaluating our processes and controls to identify any enhancements necessary to ensure we properly account for revenue from contracts with customers and accumulate the information necessary to adequately disclose such data as required by ASU 2014-09. Additionally, our implementation of ASU 2014-09 will require training and educating our workforce and the investment community regarding the financial statement impact that application of the standard will have based upon the terms of our existing contracts and any new contracts we may execute in the future. We currently expect to adopt ASU 2014-09 by applying the full retrospective transition method. The most significant policy revision we have identified relates to our accounting for the make-up rights provisions granted to customers of our Hardisty terminal. Under our current policy, we defer revenue associated with the make-up rights provisions until the earlier of when the throughput is utilized, the make-up rights expire, or when we determine the likelihood that the customer will utilize the make-up right is remote. Our revised revenue policy requires us to assess the value of the make-up right option based upon the likelihood of exercise and the expected amount to be received from the option exercise to determine the amount of revenue to defer. For example, if we consider the make-up right option unlikely to be exercised, we would attribute no value to the option and apply 100% breakage, resulting in the recognition of all the revenue. We have identified other elements within our consolidated financial statements that are likely to be affected by our policy revisions for assessing the value of make-up rights provisions granted to customers of our Hardisty terminal, which are discussed below. We cannot currently quantify with sufficient accuracy the impact that our adoption will have on each of the elements we expect to be affected within our consolidated financial statements. The following discussion addresses the primary items within our financial statements and the related disclosures we expect to be affected by our application of the requirements of ASU 2014-09, based upon modifications of our accounting policies. The discussion focuses on the impact we expect ASU 2014-09 to have on each of these items as compared with the amounts we have historically presented as a result of our application of currently accepted accounting standards associated with revenue. Once ASU 2014-09 is adopted and presented on a full retrospective basis, we anticipate the variances between periods for each of the items discussed will not be significantly different than the historical trends in each of these items. Terminalling Services Revenue and Deferred Revenue — We expect the terminalling services revenue of our Hardisty terminal operations to increase by a portion of the amounts previously deferred in connection with the payments we receive from our customers for their minimum monthly volume commitments. We have historically deferred recognition of all such amounts due to the make-up rights we have granted customers of our Hardisty terminal for periods up to six months following the month for which the minimum volume commitments were paid. Historically, breakage associated with these make-up rights options has approximated 100% , which will result in our recognizing all or a portion of the previously deferred amounts as revenue upon our adoption of ASU 2014-09. Breakage rates will be regularly evaluated and modified as necessary to reflect our current expectations and experience. Our implementation of these changes will affect our existing accounting policy disclosures. Additionally, our revenue and deferred revenue disclosures will be revised to include the periods that the remaining performance obligations will be recognized, as well as disclosure of the breakage rates associated with the make-up right options. Pipeline Fees and Prepaid Expenses — We expect our pipeline fees to increase by a portion of the amounts we have paid to Gibson and historically recorded as prepaid pipeline fees in connection with the revenue we have collected from customers of our Hardisty terminal for minimum monthly commitment fees for which we have deferred recognition. We have historically recognized these prepaid pipeline fees as expense concurrently with the recognition of revenue associated with the expiration of the make-up rights we granted to customers of our Hardisty terminal. As a result of our recognition of a portion of the previously deferred revenue, we will concurrently recognize a proportionate amount of the prepaid pipeline fees as expense in connection with our adoption of ASU 2014-09. Our implementation of these changes will also affect the disclosures we make regarding amounts associated with our collaborative arrangement with Gibson. Provision for Income Taxes and Non-current Deferred Income Tax Liability — As a result of the increases in “Terminalling services revenue” and “Pipeline fees” as discussed above, our provision for income taxes and the related non-current deferred income tax liability, as well as the related disclosures thereof, may increase due to the expected increases in “Income (loss) from continuing operations before provision for income taxes.” Other Comprehensive Income - Foreign Currency Translation and Accumulated Other Comprehensive Income — Our translation of the foregoing items within our consolidated income statements and balance sheets will also result in changes to the amounts reported in our consolidated statements of comprehensive income for “Other comprehensive income – foreign currency translation” and the related amount for “Accumulated other comprehensive income (loss)” included in our consolidated balance sheets. The functional currency of our Hardisty terminal is the Canadian dollar, which we translate into U.S. dollars for reporting in our consolidated financial statements. Cash Flows From Operating Activities — We do not expect our adoption of ASU 2014-09 to affect the amount we report as cash flow from operating activities, as our adoption of this standard does not affect cash flow. However, the components that comprise “Net cash provided by operating activities” within our Consolidated Statements of Cash Flows will change to reflect the changes presented in the income statement and balance sheet items discussed above. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Distribution to Partners On October 26, 2017 , the board of directors of USD Partners GP LLC, acting in its capacity as our general partner, declared a quarterly cash distribution payable of $0.345 per unit, or $1.38 per unit on an annualized basis, for the three months ended September 30, 2017 . The distribution represents an increase of $0.005 per unit, or 1.5% over the prior quarter distribution per unit, and is 20.0% over our minimum quarterly distribution per unit. The distribution will be paid on November 13, 2017 , to unitholders of record at the close of business on November 6, 2017 . The distribution will include payment of $4.9 million to our public common unitholders, $28 thousand to the Class A unitholders, an aggregate of $4.0 million to USDG as a holder of our common units and the sole owner of our subordinated units and $216 thousand to USD Partners GP LLC for its general partner interest and as holder of the IDR. |
ORGANIZATION AND BASIS OF PRE26
ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Our accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim consolidated financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete consolidated financial statements. In the opinion of our management, they contain all adjustments, consisting only of normal recurring adjustments, which our management considers necessary to present fairly our financial position as of September 30, 2017 , our results of operations for the three and nine months ended September 30, 2017 and 2016 , and our cash flows for the nine months ended September 30, 2017 and 2016 . We derived our consolidated balance sheet as of December 31, 2016 , from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 . Our results of operations for the three and nine months ended September 30, 2017 and 2016 should not be taken as indicative of the results to be expected for the full year due to fluctuations in the supply of and demand for crude oil and biofuels, timing and completion of acquisitions, if any, and the impact of fluctuations in foreign currency exchange rates. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 . |
Foreign Currency Translation | Foreign Currency Translation We conduct a substantial portion of our operations in Canada, which we account for in the local currency, the Canadian dollar. We translate most Canadian dollar denominated balance sheet accounts into our reporting currency, the U.S. dollar, at the end of period exchange rate, while most income statement accounts are translated into our reporting currency based on the average exchange rate for each monthly period. Fluctuations in the exchange rate between the Canadian dollar and the U.S. dollar can create variability in the amounts we translate and report in U.S. dollars. Within these consolidated financial statements, we denote amounts denominated in Canadian dollars with “C$” immediately prior to the stated amount. |
Comparative Amounts | Comparative Amounts We have made certain reclassifications to the amounts reported in the prior year to conform with the current year presentation. None of these reclassifications have an impact on our operating results, cash flows or financial position. |
Recent Accounting Pronouncements Not Yet Adopted | RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED Intangibles — Goodwill and Other In January 2017, the FASB issued Accounting Standards Update No. 2017-04, or ASU 2017-04, which amends ASC Topic 350 to modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. An entity should recognize an impairment loss for the amount by which the carrying amount of a reporting unit exceeds the reporting unit’s fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The pronouncement is effective for fiscal years beginning after December 15, 2019, or for any interim impairment testing within those fiscal years and is required to be applied prospectively, with early adoption permitted. We do not expect our adoption of this standard to have a material impact on our consolidated financial statements. However, any impairment assessment we perform subsequent to our adoption of the standard could produce an impairment of goodwill to the extent the carrying amount of a reporting unit exceeds its fair value. Restricted Cash In November 2016, the FASB issued Accounting Standards Update No. 2016-18, or ASU 2016-18, which amends ASC Topic 230 to require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents will be included with cash and cash equivalents when we reconcile the beginning-of-period and end-of-period total amounts shown on our consolidated statements of cash flows. The pronouncement is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and is required to be applied retrospectively for all financial statements presented, with early adoption permitted. We do not expect to adopt this standard early, nor do we expect our adoption of this standard to have a material impact on our consolidated financial statements, other than the presentation of cash and cash equivalents within our consolidated statements of cash flows. Leases In February 2016, the FASB issued Accounting Standards Update No. 2016-02, or ASU 2016-02, which amends ASC Topic 842 to require balance sheet recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. The amendment provides an option that permits us to elect not to recognize the lease assets and liabilities for leases with a term of 12 months or less. The pronouncement is effective for years beginning after December 15, 2018, and early adoption is permitted. Currently, we cannot reasonably estimate the impact our adoption of ASU 2016-02 will have on our consolidated financial statements. We do not currently recognize operating leases in our balance sheets as will be required by ASU 2016-02, but we record payments for operating leases as rent expense as incurred. Our process for implementing ASU 2016-02 will involve evaluating all of our existing leases with terms greater than 12 months to quantify the impact to our financial statements, developing accounting policies and internal control processes to address adherence to the requirements of the standard, evaluating the capability of existing accounting systems and any enhancements needed, determining the need to modify any bank or debt compliance requirements, and training and educating our workforce and the investment community regarding the financial statement impact that application of the standard will have. We recently initiated steps to identify, accumulate and categorize our lease agreements into homogeneous groups to evaluate the particular terms for each type of agreement in relation to the requirements of ASU 2016-02 to determine the accounting impact, commonly referred to as an “Impact Assessment.” Once we have determined the impact ASU 2016-02 will have on our current accounting for each particular type of lease, we will develop accounting policies and internal control processes and initiate other steps to implement ASU 2016-02. We do not currently expect to early adopt the provisions of this standard. Revenue from Contracts with Customers In May 2014, the FASB issued Accounting Standards Update No. 2014-09, or ASU 2014-09, that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 is effective for annual and interim periods beginning on or after December 15, 2017, and may be applied on either a full or modified retrospective basis. Additionally, the FASB has issued other related Accounting Standards Updates to clarify application of the guidance in the original standard and to provide practical expedients for implementing the guidance, all of which will be effective upon adoption. We have assessed the impact our adoption of ASU 2014-09 is expected to have on our current accounting policies, which we have modified to incorporate the requirements of the new standard. We have completed our evaluation and modification of existing accounting policies although further refinement may be necessary. We have developed financial models to permit quantifying the impact our application of ASU 2014-09 will have on our previously issued financial statements and are currently in the process of quantifying the impact our adoption will have on previously issued financial statements. We have prepared drafts of disclosures required by the new standard, which we are refining in connection with quantifying the impact to previously issued financial statements. We are also evaluating our processes and controls to identify any enhancements necessary to ensure we properly account for revenue from contracts with customers and accumulate the information necessary to adequately disclose such data as required by ASU 2014-09. Additionally, our implementation of ASU 2014-09 will require training and educating our workforce and the investment community regarding the financial statement impact that application of the standard will have based upon the terms of our existing contracts and any new contracts we may execute in the future. We currently expect to adopt ASU 2014-09 by applying the full retrospective transition method. The most significant policy revision we have identified relates to our accounting for the make-up rights provisions granted to customers of our Hardisty terminal. Under our current policy, we defer revenue associated with the make-up rights provisions until the earlier of when the throughput is utilized, the make-up rights expire, or when we determine the likelihood that the customer will utilize the make-up right is remote. Our revised revenue policy requires us to assess the value of the make-up right option based upon the likelihood of exercise and the expected amount to be received from the option exercise to determine the amount of revenue to defer. For example, if we consider the make-up right option unlikely to be exercised, we would attribute no value to the option and apply 100% breakage, resulting in the recognition of all the revenue. We have identified other elements within our consolidated financial statements that are likely to be affected by our policy revisions for assessing the value of make-up rights provisions granted to customers of our Hardisty terminal, which are discussed below. We cannot currently quantify with sufficient accuracy the impact that our adoption will have on each of the elements we expect to be affected within our consolidated financial statements. The following discussion addresses the primary items within our financial statements and the related disclosures we expect to be affected by our application of the requirements of ASU 2014-09, based upon modifications of our accounting policies. The discussion focuses on the impact we expect ASU 2014-09 to have on each of these items as compared with the amounts we have historically presented as a result of our application of currently accepted accounting standards associated with revenue. Once ASU 2014-09 is adopted and presented on a full retrospective basis, we anticipate the variances between periods for each of the items discussed will not be significantly different than the historical trends in each of these items. Terminalling Services Revenue and Deferred Revenue — We expect the terminalling services revenue of our Hardisty terminal operations to increase by a portion of the amounts previously deferred in connection with the payments we receive from our customers for their minimum monthly volume commitments. We have historically deferred recognition of all such amounts due to the make-up rights we have granted customers of our Hardisty terminal for periods up to six months following the month for which the minimum volume commitments were paid. Historically, breakage associated with these make-up rights options has approximated 100% , which will result in our recognizing all or a portion of the previously deferred amounts as revenue upon our adoption of ASU 2014-09. Breakage rates will be regularly evaluated and modified as necessary to reflect our current expectations and experience. Our implementation of these changes will affect our existing accounting policy disclosures. Additionally, our revenue and deferred revenue disclosures will be revised to include the periods that the remaining performance obligations will be recognized, as well as disclosure of the breakage rates associated with the make-up right options. Pipeline Fees and Prepaid Expenses — We expect our pipeline fees to increase by a portion of the amounts we have paid to Gibson and historically recorded as prepaid pipeline fees in connection with the revenue we have collected from customers of our Hardisty terminal for minimum monthly commitment fees for which we have deferred recognition. We have historically recognized these prepaid pipeline fees as expense concurrently with the recognition of revenue associated with the expiration of the make-up rights we granted to customers of our Hardisty terminal. As a result of our recognition of a portion of the previously deferred revenue, we will concurrently recognize a proportionate amount of the prepaid pipeline fees as expense in connection with our adoption of ASU 2014-09. Our implementation of these changes will also affect the disclosures we make regarding amounts associated with our collaborative arrangement with Gibson. Provision for Income Taxes and Non-current Deferred Income Tax Liability — As a result of the increases in “Terminalling services revenue” and “Pipeline fees” as discussed above, our provision for income taxes and the related non-current deferred income tax liability, as well as the related disclosures thereof, may increase due to the expected increases in “Income (loss) from continuing operations before provision for income taxes.” Other Comprehensive Income - Foreign Currency Translation and Accumulated Other Comprehensive Income — Our translation of the foregoing items within our consolidated income statements and balance sheets will also result in changes to the amounts reported in our consolidated statements of comprehensive income for “Other comprehensive income – foreign currency translation” and the related amount for “Accumulated other comprehensive income (loss)” included in our consolidated balance sheets. The functional currency of our Hardisty terminal is the Canadian dollar, which we translate into U.S. dollars for reporting in our consolidated financial statements. Cash Flows From Operating Activities — We do not expect our adoption of ASU 2014-09 to affect the amount we report as cash flow from operating activities, as our adoption of this standard does not affect cash flow. However, the components that comprise “Net cash provided by operating activities” within our Consolidated Statements of Cash Flows will change to reflect the changes presented in the income statement and balance sheet items discussed above. |
NET INCOME PER LIMITED PARTNE27
NET INCOME PER LIMITED PARTNER INTEREST (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Distribution Method to Limited and General Partners | The formula for distributing available cash as set forth in our partnership agreement is as follows: Distribution Targets Portion of Quarterly Distribution Per Unit Percentage Distributed to Limited Partners Percentage Distributed to General Partner (including IDRs) (1) Minimum Quarterly Distribution Up to $0.2875 98% 2% First Target Distribution > $0.2875 to $0.330625 98% 2% Second Target Distribution > $0.330625 to $0.359375 85% 15% Third Target Distribution > $0.359375 to $0.431250 75% 25% Thereafter Amounts above $0.431250 50% 50% (1) Assumes our general partner maintains a 2% general partner interest in us. |
Schedule of Earnings Per Share, Basic and Diluted | We determined basic and diluted net income per limited partner unit as set forth in the following tables: Three Months Ended September 30, 2017 Common Units Subordinated Units Class A General Total (in thousands, except per unit amounts) Net income attributable to general and limited partner interests in USD Partners LP (1) $ 4,721 $ 1,517 $ 20 $ 169 $ 6,427 Less: Distributable earnings (2) 7,030 2,260 29 223 9,542 Distributions in excess of earnings $ (2,309 ) $ (743 ) $ (9 ) $ (54 ) $ (3,115 ) Weighted average units outstanding (3) 19,538 6,278 84 461 26,361 Distributable earnings per unit (4) $ 0.36 $ 0.36 $ 0.35 Overdistributed earnings per unit (5) (0.12 ) (0.12 ) (0.11 ) Net income per limited partner unit (basic and diluted) $ 0.24 $ 0.24 $ 0.24 (1) Represents net income allocated to each class of units based on the actual ownership of the Partnership during the period. The net income for each class of limited partner interest has been reduced by its proportionate amount of the approximate $57 thousand attributed to the general partner for its incentive distribution rights (2) Represents the distributions payable for the period based upon the quarterly distribution amount of $0.345 per unit, or $1.38 per unit on an annualized basis. Amounts presented for each class of units include a proportionate amount of the $392 thousand distributable to holders of the Equity-classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Long-Term Incentive Plan. (3) Represents the weighted average units outstanding for the period. (4) Represents the total distributable earnings divided by the weighted average number of units outstanding for the period. (5) Represents the distributions in excess of earnings divided by the weighted average number of units outstanding for the period. Three Months Ended September 30, 2016 Common Units Subordinated Units Class A General Total (in thousands, except per unit amounts) Net income attributable to general and limited partner interests in USD Partners LP (1) $ 7,859 $ 4,639 $ 77 $ 256 $ 12,831 Less: Distributable earnings (2) 4,733 2,792 46 154 7,725 Excess net income $ 3,126 $ 1,847 $ 31 $ 102 $ 5,106 Weighted average units outstanding (3) 14,182 8,371 139 461 23,153 Distributable earnings per unit (4) $ 0.33 $ 0.33 $ 0.33 Undistributed earnings per unit (5) 0.16 0.16 0.16 Net income per limited partner unit (basic and diluted) $ 0.49 $ 0.49 $ 0.49 (1) Represents net income allocated to each class of units based on the actual ownership of the Partnership during the period. (2) Represents the distributions paid for the period based upon the quarterly distribution of $0.3225 per unit, or $1.29 per unit on an annualized basis. Amounts presented for each class of units include a proportionate amount of the $257 thousand distributed to holders of the Equity-classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Long-Term Incentive Plan. (3) Represents the weighted average units outstanding for the period. (4) Represents the total distributable earnings divided by the weighted average number of units outstanding for the period. (5) Represents the additional amount per unit necessary to distribute the excess net income for the period among our limited partners, our general partner and the holder of the IDRs according to the distribution formula for available cash as set forth in our partnership agreement. Nine Months Ended September 30, 2017 Common Units Subordinated Units Class A General Total (in thousands, except per unit amounts) Net income attributable to general and limited partner interests in USD Partners LP (1) $ 14,143 $ 5,301 $ 79 $ 481 $ 20,004 Less: Distributable earnings (2) 19,782 6,697 91 600 27,170 Distributions in excess of earnings $ (5,639 ) $ (1,396 ) $ (12 ) $ (119 ) $ (7,166 ) Weighted average units outstanding (3) 17,380 6,661 98 461 24,600 Distributable earnings per unit (4) $ 1.14 $ 1.01 $ 0.93 Overdistributed earnings per unit (5) (0.32 ) (0.21 ) (0.12 ) Net income per limited partner unit (basic and diluted) $ 0.82 $ 0.80 $ 0.81 (1) Represents net income allocated to each class of units based on the actual ownership of the Partnership during the period. The net income for each class of limited partner interest has been reduced by its proportionate amount of the approximate $109 thousand attributed to the general partner for its incentive distribution rights. (2) Represents the per unit distributions paid of $0.335 per unit for the three months ended March 31, 2017, $0.34 per unit for the three months ended June 30, 2017, and $0.345 per unit distributable for the three months ended September 30, 2017 , representing a year-to-date distribution amount of $1.02 per unit. Amounts presented for each class of units include a proportionate amount of the $785 thousand distributed and $392 thousand distributable to holders of the Equity-classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Long-Term Incentive Plan. (3) Represents the weighted average units outstanding for the period. (4) Represents the total distributable earnings divided by the weighted average number of units outstanding for the period. (5) Represents the distributions in excess of earnings divided by the weighted average number of units outstanding for the period. Nine Months Ended September 30, 2016 Common Units Subordinated Units Class A General Total (in thousands, except per unit amounts) Net income attributable to general and limited partner interests in USD Partners LP (1) $ 12,220 $ 7,468 $ 125 $ 403 $ 20,216 Less: Distributable earnings (2) 13,867 8,183 135 451 22,636 Distributions in excess of earnings $ (1,647 ) $ (715 ) $ (10 ) $ (48 ) $ (2,420 ) Weighted average units outstanding (3) 13,760 8,768 148 461 23,137 Distributable earnings per unit (4) $ 1.01 $ 0.93 $ 0.91 Overdistributed earnings per unit (5) (0.12 ) (0.08 ) (0.07 ) Net income per limited partner unit (basic and diluted) $ 0.89 $ 0.85 $ 0.84 (1) Represents net income allocated to each class of units based on the actual ownership of the Partnership during the period. (2) Represents the distributions paid of $0.3075 per unit with respect to the three months ended March 31, 2016, $0.315 per unit for the three months ended June 30, 2016, and $0.3225 per unit for the three months ended September 30, 2016 , representing a year-to-date distribution amount of $0.945 per unit. Amounts presented for each class of units include a proportionate amount of the $756 thousand distributed to holders of the Equity-classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Long-Term Incentive Plan. (3) Represents the weighted average units outstanding for the period. (4) Represents the total distributable earnings divided by the weighted average number of units outstanding for the period. (5) Represents the distributions in excess of earnings divided by the weighted average number of units outstanding for the period. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Our property and equipment consist of the following as of the dates indicated: September 30, 2017 December 31, 2016 Estimated Depreciable Lives (Years) (in thousands) Land $ 10,264 $ 9,636 N/A Trackage and facilities 128,475 108,782 10-30 Pipeline 16,105 10,313 20-25 Equipment 12,576 8,234 3-10 Furniture 68 44 5-10 Total property and equipment 167,488 137,009 Accumulated depreciation (20,322 ) (13,821 ) Construction in progress 3,041 2,514 Property and equipment, net $ 150,207 $ 125,702 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The composition, gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows as of the dates indicated: September 30, 2017 December 31, 2016 (in thousands) Carrying amount: Customer service agreements $ 125,960 $ 125,960 Other 106 106 Total carrying amount 126,066 126,066 Accumulated amortization: Customer service agreements (23,582 ) (14,135 ) Other (20 ) (12 ) Total accumulated amortization (23,602 ) (14,147 ) Total intangible assets, net $ 102,464 $ 111,919 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Our long-term debt balances included the following components as of the specified dates: September 30, 2017 December 31, 2016 (in thousands) Term Loan Facility $ — $ 10,128 Revolving Credit Facility 201,000 213,000 Less: Deferred financing costs, net (1,589 ) (2,234 ) Total long-term debt, net $ 199,411 $ 220,894 |
Schedule of Line of Credit Facilities | We determined the capacity available to us under the terms of our Credit Agreement was as follows as of the specified dates: September 30, 2017 December 31, 2016 (in millions) Aggregate borrowing capacity under Credit Agreement $ 400.0 $ 400.0 Less: Term Loan Facility amounts outstanding — 10.1 Revolving Credit Facility amounts outstanding 201.0 213.0 Letters of credit outstanding — — Available under Credit Agreement (1) $ 199.0 $ 176.9 (1) Pursuant to the terms of our Credit Agreement, our borrowing capacity currently is limited to 5.0 times our trailing 12-month consolidated EBITDA for the quarter in which a material acquisition occurs and the two quarters following a material acquisition, as defined in our Credit Agreement, after which time the covenant returns to 4.5 times our trailing 12-month consolidated EBITDA. Our acquisition of the Stroud terminal is treated as a material acquisition under the terms of our Credit Agreement. As a result, the 5.0 times our trailing 12-month consolidated EBITDA covenant will be effective through December 31, 2017 . |
Schedule of Interest Expense, Net | Interest expense associated with our outstanding indebtedness was as follows for the specified periods: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Interest expense on the Credit Agreement $ 2,172 $ 2,356 $ 6,862 $ 6,642 Amortization of deferred financing costs 216 216 646 646 Total interest expense $ 2,388 $ 2,572 $ 7,508 $ 7,288 |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
Summary of Deferred Revenue | The following table provides details of our deferred revenue from unrelated customers as reflected in our consolidated balance sheets as of the dates indicated: September 30, 2017 December 31, 2016 (in thousands) Customer prepayments, current portion (1) $ 856 $ 3,705 Minimum monthly commitment fees 22,135 23,223 Total deferred revenue, current portion $ 22,991 $ 26,928 Customer prepayments (1) $ — $ 264 Total deferred revenue, net of current portion $ — $ 264 (1) Represents amounts associated with lease payments received in advance from our Fleet services customers. |
NONCONSOLIDATED VARIABLE INTE32
NONCONSOLIDATED VARIABLE INTEREST ENTITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The following table summarizes the total assets and liabilities between us and the VIEs as reflected in our consolidated balance sheets at September 30, 2017 and December 31, 2016 , as well as our maximum exposure to losses from entities in which we have a variable interest, but are not the primary beneficiary. Generally, our maximum exposure to losses is limited to amounts receivable for services we provided, reduced by any deferred revenue. September 30, 2017 Total assets Total liabilities Maximum exposure to loss (in thousands) Accounts receivable 20 $ — $ — Accounts payable — — — Deferred revenue, current portion — 603 — Deferred revenue, net of current portion — — — $ 20 $ 603 $ — December 31, 2016 Total assets Total liabilities Maximum exposure to loss (in thousands) Accounts receivable $ 7 $ — $ — Accounts payable — 3 — Deferred revenue, current portion — 1,297 — Deferred revenue, net of current portion — 264 — $ 7 $ 1,564 $ — For periods prior to July 1, 2016, our related party sales to the VIEs are included in the accompanying consolidated statements of operations as set forth in the following table for the indicated periods: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Fleet services — related party $ — $ — $ — $ 810 |
TRANSACTIONS WITH RELATED PAR33
TRANSACTIONS WITH RELATED PARTIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Variable Interest Entities | The following table summarizes the total assets and liabilities between us and the VIEs as reflected in our consolidated balance sheets at September 30, 2017 and December 31, 2016 , as well as our maximum exposure to losses from entities in which we have a variable interest, but are not the primary beneficiary. Generally, our maximum exposure to losses is limited to amounts receivable for services we provided, reduced by any deferred revenue. September 30, 2017 Total assets Total liabilities Maximum exposure to loss (in thousands) Accounts receivable 20 $ — $ — Accounts payable — — — Deferred revenue, current portion — 603 — Deferred revenue, net of current portion — — — $ 20 $ 603 $ — December 31, 2016 Total assets Total liabilities Maximum exposure to loss (in thousands) Accounts receivable $ 7 $ — $ — Accounts payable — 3 — Deferred revenue, current portion — 1,297 — Deferred revenue, net of current portion — 264 — $ 7 $ 1,564 $ — For periods prior to July 1, 2016, our related party sales to the VIEs are included in the accompanying consolidated statements of operations as set forth in the following table for the indicated periods: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Fleet services — related party $ — $ — $ — $ 810 |
Schedule of Deferred Revenue, Current Portion - Related Party | Our related party sales to USDM are presented in the following table for the indicated periods: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Terminalling services — related party $ 4,716 $ 1,736 $ 8,974 $ 5,142 Fleet leases — related party 1,013 890 2,794 2,671 Fleet services — related party 218 279 776 837 Freight and other reimbursables — related party — — 1 — $ 5,947 $ 2,905 $ 12,545 $ 8,650 We had deferred revenue included in “Deferred revenue, current — related party” in our consolidated balance sheets associated with our terminalling and fleet services agreements with USDM for amounts we have collected from them for their minimum volume commitment fees and prepaid lease amounts as follows as of the indicated dates: September 30, 2017 December 31, 2016 (in thousands) Customer prepayments, current portion (1) $ 411 $ 390 Minimum monthly commitment fees 5,299 3,902 Total deferred revenue, current portion $ 5,710 $ 4,292 (1) Represents amounts associated with railcar lease payments received in advance. |
Distributions Made to General and Limited Partner, by Distribution | During the nine months ended September 30, 2017 , we paid the following aggregate cash distributions to USDG as a holder of our common units and the sole owner of our subordinated units and to USD Partners GP LLC for their general partner interest and as the holder of our IDRs. Distribution Declaration Date Record Date Distribution Payment Date Amount Paid to USDG Amount Paid to USD Partners GP LLC (in thousands) February 1, 2017 February 13, 2017 February 17, 2017 $ 3,814 $ 152 April 27, 2017 May 8, 2017 May 12, 2017 3,872 170 July 27, 2017 August 7, 2017 August 11, 2017 3,929 194 $ 11,615 $ 516 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Summary of Reportable Segment Data for Continuing Operations | The following tables summarize our reportable segment data: Three Months Ended September 30, 2017 Terminalling Fleet Corporate Total (in thousands) Revenues Terminalling services $ 21,799 $ — $ — $ 21,799 Terminalling services — related party 4,716 — — 4,716 Railroad incentives 4 — — 4 Fleet leases — 643 — 643 Fleet leases — related party — 1,013 — 1,013 Fleet services — 470 — 470 Fleet services — related party — 218 — 218 Freight and other reimbursables — 118 — 118 Freight and other reimbursables — related party — — — — Total revenues 26,519 2,462 — 28,981 Operating costs Subcontracted rail services 2,340 — — 2,340 Pipeline fees 6,367 — — 6,367 Fleet leases — 1,656 — 1,656 Freight and other reimbursables — 118 — 118 Operating and maintenance 654 95 — 749 Selling, general and administrative 1,395 210 2,093 3,698 Depreciation and amortization 5,254 — — 5,254 Total operating costs 16,010 2,079 2,093 20,182 Operating income (loss) 10,509 383 (2,093 ) 8,799 Interest expense — — 2,388 2,388 Loss associated with derivative instruments 667 — — 667 Foreign currency transaction loss (gain) (20 ) 4 (441 ) (457 ) Other income, net (48 ) — — (48 ) Provision for (benefit from) income taxes (343 ) 196 (31 ) (178 ) Net income (loss) $ 10,253 $ 183 $ (4,009 ) $ 6,427 Three Months Ended September 30, 2016 Terminalling Fleet Corporate Total (in thousands) Revenues Terminalling services $ 24,078 $ — $ — $ 24,078 Terminalling services — related party 1,736 — — 1,736 Railroad incentives 24 — — 24 Fleet leases — 643 — 643 Fleet leases — related party — 890 — 890 Fleet services — 475 — 475 Fleet services — related party — 279 — 279 Freight and other reimbursables — 218 — 218 Freight and other reimbursables — related party — — — — Total revenues 25,838 2,505 — 28,343 Operating costs Subcontracted rail services 2,004 — — 2,004 Pipeline fees 5,492 — — 5,492 Fleet leases — 1,534 — 1,534 Freight and other reimbursables — 218 — 218 Operating and maintenance 651 95 — 746 Selling, general and administrative 1,258 230 2,455 3,943 Depreciation and amortization 4,906 — — 4,906 Total operating costs 14,311 2,077 2,455 18,843 Operating income (loss) 11,527 428 (2,455 ) 9,500 Interest expense 286 — 2,286 2,572 Gain associated with derivative instruments (349 ) — — (349 ) Foreign currency transaction loss (gain) 31 (2 ) (4 ) 25 Other income, net — — — — Provision for (benefit from) income taxes (5,739 ) 160 — (5,579 ) Net income (loss) $ 17,298 $ 270 $ (4,737 ) $ 12,831 Nine Months Ended September 30, 2017 Terminalling Fleet Corporate Total (in thousands) Revenues Terminalling services $ 67,335 $ — $ — $ 67,335 Terminalling services — related party 8,974 — — 8,974 Railroad incentives 25 — — 25 Fleet leases — 1,929 — 1,929 Fleet leases — related party — 2,794 — 2,794 Fleet services — 1,405 — 1,405 Fleet services — related party — 776 — 776 Freight and other reimbursables 110 373 — 483 Freight and other reimbursables — related party — 1 — 1 Total revenues 76,444 7,278 — 83,722 Operating costs Subcontracted rail services 6,148 — — 6,148 Pipeline fees 17,153 — — 17,153 Fleet leases — 4,723 — 4,723 Freight and other reimbursables 110 374 — 484 Operating and maintenance 1,765 285 — 2,050 Selling, general and administrative 3,795 694 6,714 11,203 Depreciation and amortization 15,164 — — 15,164 Total operating costs 44,135 6,076 6,714 56,925 Operating income (loss) 32,309 1,202 (6,714 ) 26,797 Interest expense 170 — 7,338 7,508 Loss associated with derivative instruments 1,279 — — 1,279 Foreign currency transaction loss (gain) (33 ) 6 (500 ) (527 ) Other income, net (40 ) — — (40 ) Provision for (benefit from) income taxes (1,761 ) 511 (177 ) (1,427 ) Net income (loss) $ 32,694 $ 685 $ (13,375 ) $ 20,004 Goodwill $ 33,589 $ — $ — $ 33,589 Total assets $ 312,970 $ 2,001 $ 939 $ 315,910 Capital expenditures $ 26,708 $ — $ — $ 26,708 Nine Months Ended September 30, 2016 Terminalling Fleet Corporate Total (in thousands) Revenues Terminalling services $ 69,560 $ — $ — $ 69,560 Terminalling services — related party 5,142 — — 5,142 Railroad incentives 61 — — 61 Fleet leases — 1,933 — 1,933 Fleet leases — related party — 2,671 — 2,671 Fleet services — 613 — 613 Fleet services — related party — 1,647 — 1,647 Freight and other reimbursables 12 932 — 944 Freight and other reimbursables — related party — — — — Total revenues 74,775 7,796 — 82,571 Operating costs Subcontracted rail services 6,073 — — 6,073 Pipeline fees 15,544 — — 15,544 Fleet leases — 4,605 — 4,605 Freight and other reimbursables 12 932 — 944 Operating and maintenance 2,158 241 — 2,399 Selling, general and administrative 3,548 631 7,662 11,841 Depreciation and amortization 14,725 — — 14,725 Total operating costs 42,060 6,409 7,662 56,131 Operating income (loss) 32,715 1,387 (7,662 ) 26,440 Interest expense 968 — 6,320 7,288 Loss associated with derivative instruments 921 — — 921 Foreign currency transaction gain (44 ) (72 ) (4 ) (120 ) Other income, net — — — — Provision for (benefit from) income taxes (2,008 ) 142 1 (1,865 ) Net income (loss) $ 32,878 $ 1,317 $ (13,979 ) $ 20,216 Goodwill $ 33,970 $ — $ — $ 33,970 Total assets $ 309,357 $ 5,754 $ 1,951 $ 317,062 Capital expenditures $ 471 $ — $ — $ 471 |
Reconciliation of Adjusted EBITDA to Loss from Continuing Operations | The following table provides a reconciliation of Segment Adjusted EBITDA to “Net cash provided by operating activities:” Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Segment Adjusted EBITDA Terminalling services $ 14,186 $ 17,080 $ 46,434 $ 50,310 Fleet services 383 428 1,202 1,387 Corporate activities (1) (1,147 ) (1,328 ) (3,752 ) (4,838 ) Total Adjusted EBITDA 13,422 16,180 43,884 46,859 Add (deduct): Amortization of deferred financing costs 216 216 646 646 Deferred income taxes (221 ) 98 86 2 Changes in accounts receivable and other assets 3,215 (4,309 ) 1,862 (2,802 ) Changes in accounts payable and accrued expenses 2,033 2,027 947 90 Changes in deferred revenue and other liabilities (3,147 ) (2,599 ) (5,667 ) (499 ) Change in restricted cash 915 (31 ) 685 (664 ) Interest expense, net (2,384 ) (2,572 ) (7,500 ) (7,288 ) Benefit from income taxes 178 5,579 1,427 1,865 Foreign currency transaction gain (loss) (2) 457 (25 ) 527 120 Deferred revenue associated with minimum monthly commitment fees (3) 1,473 (43 ) 1,331 (1,230 ) Net cash provided by operating activities $ 16,157 $ 14,521 $ 38,228 $ 37,099 (1) Corporate activities represent shared service and financing transactions that are not allocated to our established reporting segments. (2) Represents foreign exchange transaction amounts associated with activities between our U.S. and Canadian subsidiaries. (3) Represents deferred revenue associated with minimum monthly commitment fees in excess of throughput utilized, which fees are not refundable to our customers. Amounts presented are net of: (a) the corresponding prepaid Gibson pipeline fee that will be recognized as expense concurrently with the recognition of revenue; (b) revenue recognized in the current period that was previously deferred; and (c) expense recognized for previously prepaid Gibson pipeline fees, which correspond with the revenue recognized that was previously deferred. Refer to Note 6 - Deferred Revenue for additional discussion of deferred revenue. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | We determined our 2017 income tax expense based upon our estimated annual effective income tax rate of approximately 27% on a consolidated basis for fiscal year 2017 , which rate is attributable to the multiple domestic and foreign tax jurisdictions to which we are subject. Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Current income tax expense (benefit): U.S. federal income tax $ 289 $ — $ 662 $ — U.S. federal operating loss carryforward 56 — (200 ) — State income tax expense (benefit) (17 ) 14 (126 ) 44 Canadian federal and provincial income taxes benefit (285 ) (5,691 ) (1,849 ) (1,911 ) Total current income tax expense (benefit) 43 (5,677 ) (1,513 ) (1,867 ) Deferred income tax expense (benefit): U.S. federal income tax expense (benefit) (164 ) 147 10 147 Canadian federal and provincial income taxes expense (benefit) (57 ) (49 ) 76 (145 ) Total change in deferred income tax expense (benefit) (221 ) 98 86 2 Benefit from income taxes $ (178 ) $ (5,579 ) $ (1,427 ) $ (1,865 ) |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation between income tax expense based on the U.S. federal statutory income tax rate and our effective income tax expense is presented below: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Income tax expense at the U.S. federal statutory rate $ 2,124 $ 2,465 $ 6,316 $ 6,239 Amount attributable to partnership not subject to income tax (2,418 ) (9,477 ) (8,132 ) (8,318 ) Foreign income tax rate differential 91 1,668 456 709 Other 27 45 38 (17 ) State income tax expense (benefit) (1) (21 ) 14 (139 ) 44 Change in valuation allowance 19 (294 ) 34 (522 ) Benefit from income taxes $ (178 ) $ (5,579 ) $ (1,427 ) $ (1,865 ) (1) Net of the federal income tax expense or benefit for the deduction associated with state income taxes. |
Schedule of Deferred Tax Assets and Liabilities | Major components of deferred income tax assets and liabilities associated with our operations were as follows as of the dates indicated: September 30, 2017 U.S. Foreign Total (in thousands) Deferred income tax assets Deferred revenues $ — $ — $ — Capital loss carryforwards — 472 472 Operating loss carryforwards — — — Deferred income tax liabilities Unbilled revenue — (285 ) (285 ) Prepaid expenses (256 ) — (256 ) Property and equipment — (416 ) (416 ) Valuation allowance — (472 ) (472 ) Deferred income tax liability, net $ (256 ) $ (701 ) $ (957 ) December 31, 2016 U.S. Foreign Total (in thousands) Deferred income tax assets Deferred revenues $ 89 $ — $ 89 Capital loss carryforwards — 438 438 Operating loss carryforwards 257 — 257 Deferred income tax liabilities Prepaid expenses (592 ) — (592 ) Property and equipment — (577 ) (577 ) Valuation allowance — (438 ) (438 ) Deferred income tax liability, net $ (246 ) $ (577 ) $ (823 ) |
DERIVATIVE FINANCIAL INSTRUME36
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Positions Included in the Consolidated Balance Sheets at Fair Value | We record all of our derivative financial instruments at their fair values in the line items specified below within our consolidated balance sheets, the amounts of which were as follows at the dates indicated: September 30, 2017 December 31, 2016 (in thousands) Other current assets $ — $ 1,167 Other current liabilities (354 ) — $ (354 ) $ 1,167 |
Schedule of Gain (Loss) on Derivative Instruments | In connection with our derivative activities, we recognized the following amounts during the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Loss (gain) associated with derivative instruments $ 667 $ (349 ) $ 1,279 $ 921 |
Schedule of Derivative Instruments | The following tables present summarized information about the fair values of our outstanding foreign currency contracts: At September 30, 2017 At December 31, 2016 Notional (C$) Forward Rate (1) Market Price (1) Fair Value Fair Value (in thousands) Forward contracts maturing in 2017 March 31, 2017 C$ 8,300,000 0.7804 — $ — $ 299 June 30, 2017 C$ 8,400,000 0.7805 — — 296 September 29, 2017 C$ 8,400,000 0.7807 — — 290 December 29, 2017 C$ 8,400,000 0.7809 0.8028 (184 ) 282 Total $ (184 ) $ 1,167 (1) Forward rates and market prices are denoted in amounts where a Canadian dollar is exchanged for the indicated amount of U.S. dollars. The forward rate represents the rate we will receive upon settlement. The market price represents the rate we would expect to pay had the contract been settled on September 30, 2017 . At September 30, 2017 Notional Market Price (1) Fixed Price (2) Fair Value (in Bbl) (in thousands) Commodity swaps maturing in 2017 July 2017 (3) 18,395 $ — $ 47.20 $ — October 2017 13,383 $ 51.76 $ 47.70 (54 ) October 2017 30,000 $ 51.76 $ 47.90 (116 ) 61,778 $ (170 ) (1) The market price represents the price we would pay to purchase one barrel of crude oil of the grade specified for the settlement date as set forth in the derivative contract as of September 30, 2017 . (2) The fixed price represents the fixed price we will receive upon our sale of one barrel of crude oil of the grade specified for the settlement date as set forth in the derivative contract. (3) The market price for the commodity swap on July 14, 2017, the date we sold the crude oil, was $47.64 . |
PARTNERS' CAPITAL (Tables)
PARTNERS' CAPITAL (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of Stock by Class | The following table presents the net proceeds from our common unit issuances: Number of Common Units Issued Public Offering Price per Common Unit Net Proceeds to the Partnership (1) (in millions) June 7, 2017 Issuance 3,000,000 $ 11.60 $ 33.7 (1) Net of underwriter’s fees and discounts, commissions and issuance costs. |
UNIT BASED COMPENSATION (Tables
UNIT BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule Of Selling General And Administrative Expense | We recognized compensation expense in “Selling, general and administrative” with regard to our Class A units for the following amounts during the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Selling, general and administrative (1) $ (124 ) $ 248 $ 108 $ 782 (1) Includes $ 247 thousand reduction to compensation expense for Class A forfeitures for the three and nine months ended September 30, 2017 . |
Schedule of Share-based Compensation, Activity | The following tables present our Equity-classified Phantom Unit award activity: Number of Director and Independent Consultant Units Number of Employee Units Weighted-Average Grant Date Fair Value Per Unit Phantom Unit awards at December 31, 2016 64,830 730,808 $ 8.51 Granted 24,999 639,955 $ 12.79 Vested (64,830 ) (204,456 ) $ 8.47 Forfeited — (56,083 ) $ 10.94 Phantom Unit awards at September 30, 2017 24,999 1,110,224 $ 10.91 Number of Director and Independent Consultant Units Number of Employee Units Weighted-Average Grant Date Fair Value Per Unit Phantom Unit awards at December 31, 2015 24,045 349,976 $ 12.75 Granted 64,830 471,412 $ 6.39 Vested (20,442 ) (87,500 ) $ 12.79 Forfeited — (2,608 ) $ 7.97 Phantom Unit awards at September 30, 2016 68,433 731,280 $ 8.50 The following tables present our Liability-classified Phantom Unit award activity: Number of Director and Independent Consultant Units Number of Employee Units Weighted-Average Grant Date Fair Value Per Unit Phantom Unit awards at December 31, 2016 21,610 21,615 $ 7.70 Granted 8,333 19,812 $ 12.80 Vested (21,610 ) — $ 6.39 Phantom Unit awards at September 30, 2017 8,333 41,427 $ 11.15 Number of Director and Independent Consultant Units Number of Employee Units Weighted-Average Grant Date Fair Value Per Unit Phantom Unit awards at December 31, 2015 10,256 13,276 $ 12.78 Granted 21,610 17,021 $ 6.39 Vested (10,256 ) — $ 12.78 Phantom Unit awards at September 30, 2016 21,610 30,297 $ 8.02 |
Schedule of Phantom Units Granted | We made payments to holders of the Phantom Units pursuant to the associated DERs granted to them under the Award Agreements as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (in thousands) Equity-classified Phantom Units (1) $ 388 $ 252 $ 1,048 $ 612 Liability-classified Phantom Units 17 16 48 39 Total $ 405 $ 268 $ 1,096 $ 651 (1) We reclassified $61 thousand and $2 thousand for the three months ended September 30, 2017 and 2016 , and $64 thousand and $2 thousand for the nine months ended September 30, 2017 and 2016 , respectively, to unit based compensation expense for DERs paid in relation to Phantom Units that have been forfeited. |
Class A Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Class A Units Outstanding | The following table presents the activity associated with our Class A units for the specified periods: Nine Months Ended September 30, 2017 2016 Class A units outstanding at beginning of period 138,750 185,000 Vested (46,250 ) (46,250 ) Forfeited (10,000 ) — Class A units outstanding at end of period 82,500 138,750 |
SUPPLEMENTAL CASH FLOW INFORM39
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Disclosures | The following table provides supplemental cash flow information for the periods indicated: Nine Months Ended September 30, 2017 2016 (in thousands) Cash paid (received) for income taxes $ (1,250 ) $ 2,160 Cash paid for interest $ 7,102 $ 6,558 The following table provides supplemental information for the item labeled “Other” in the “Net cash provided by operating activities” section of our consolidated statements of cash flows: Nine Months Ended September 30, 2017 2016 (in thousands) Loss associated with disposal of assets $ 18 $ — Amortization of deferred financing costs 646 646 Deferred income taxes 86 2 $ 750 $ 648 |
NET INCOME PER LIMITED PARTNE40
NET INCOME PER LIMITED PARTNER INTEREST - Schedule of Distribution Method to Limited and General Partners (Details) | 9 Months Ended |
Sep. 30, 2017$ / shares | |
Minimum Quarterly Distribution | |
Distribution Made to Limited Partner [Line Items] | |
Percentage Distributed to Limited Partners | 98.00% |
Percentage Distributed to General Partner (including IDRs) | 2.00% |
Minimum Quarterly Distribution | Maximum | |
Distribution Made to Limited Partner [Line Items] | |
Portion of quarterly distribution per unit (USD per share) | $ 0.2875 |
First Target Distribution | |
Distribution Made to Limited Partner [Line Items] | |
Percentage Distributed to Limited Partners | 98.00% |
Percentage Distributed to General Partner (including IDRs) | 2.00% |
First Target Distribution | Minimum | |
Distribution Made to Limited Partner [Line Items] | |
Portion of quarterly distribution per unit (USD per share) | $ 0.2875 |
First Target Distribution | Maximum | |
Distribution Made to Limited Partner [Line Items] | |
Portion of quarterly distribution per unit (USD per share) | $ 0.330625 |
Second Target Distribution | |
Distribution Made to Limited Partner [Line Items] | |
Percentage Distributed to Limited Partners | 85.00% |
Percentage Distributed to General Partner (including IDRs) | 15.00% |
Second Target Distribution | Minimum | |
Distribution Made to Limited Partner [Line Items] | |
Portion of quarterly distribution per unit (USD per share) | $ 0.330625 |
Second Target Distribution | Maximum | |
Distribution Made to Limited Partner [Line Items] | |
Portion of quarterly distribution per unit (USD per share) | $ 0.359375 |
Third Target Distribution | |
Distribution Made to Limited Partner [Line Items] | |
Percentage Distributed to Limited Partners | 75.00% |
Percentage Distributed to General Partner (including IDRs) | 25.00% |
Third Target Distribution | Minimum | |
Distribution Made to Limited Partner [Line Items] | |
Portion of quarterly distribution per unit (USD per share) | $ 0.359375 |
Third Target Distribution | Maximum | |
Distribution Made to Limited Partner [Line Items] | |
Portion of quarterly distribution per unit (USD per share) | $ 0.431250 |
Thereafter | |
Distribution Made to Limited Partner [Line Items] | |
Percentage Distributed to Limited Partners | 50.00% |
Percentage Distributed to General Partner (including IDRs) | 50.00% |
Thereafter | Minimum | |
Distribution Made to Limited Partner [Line Items] | |
Portion of quarterly distribution per unit (USD per share) | $ 0.431250 |
General Partner | USD Partners GP LLC | |
Distribution Made to Limited Partner [Line Items] | |
General partner interest (as percent) | 2.00% |
NET INCOME PER LIMITED PARTNE41
NET INCOME PER LIMITED PARTNER INTEREST - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Limited Partners' Capital Account [Line Items] | ||||||||
Net income attributable to general and limited partner interests in USD Partners LP | $ 6,427 | $ 12,831 | $ 20,004 | $ 20,216 | ||||
Less: Distributable earnings | 9,542 | 7,725 | 27,170 | 22,636 | ||||
Distributions in excess of earnings | $ (3,115) | $ 5,106 | $ (7,166) | $ (2,420) | ||||
Weighted average units outstanding (in shares) | 26,361 | 23,153 | 24,600 | 23,137 | ||||
Partners share targeted year-to-date distribution amount (USD per share) | $ 0.345 | $ 0.3225 | $ 0.315 | $ 0.3075 | $ 1.02 | $ 0.945 | ||
Targeted annual distribution amount (USD per share) | 1.38 | $ 1.29 | $ 1.15 | |||||
Phantom Share Units (PSUs) | ||||||||
Limited Partners' Capital Account [Line Items] | ||||||||
Equity-classified phantom units | $ 257 | $ 785 | $ 756 | |||||
Partners share targeted year-to-date distribution amount (USD per share) | $ 0.34 | $ 0.335 | ||||||
Partners share year-to-date distributable amount per share | $ 0.345 | |||||||
Distributable amount | $ 392 | $ 392 | ||||||
Common Units | ||||||||
Limited Partners' Capital Account [Line Items] | ||||||||
Weighted average units outstanding (in shares) | 19,538 | 14,182 | 17,380 | 13,760 | ||||
Subordinated Units | ||||||||
Limited Partners' Capital Account [Line Items] | ||||||||
Weighted average units outstanding (in shares) | 6,278 | 8,371 | 6,661 | 8,768 | ||||
Limited Partner | Common Units | ||||||||
Limited Partners' Capital Account [Line Items] | ||||||||
Net income attributable to general and limited partner interests in USD Partners LP | $ 4,721 | $ 7,859 | $ 14,143 | $ 12,220 | ||||
Less: Distributable earnings | 7,030 | 4,733 | 19,782 | 13,867 | ||||
Distributions in excess of earnings | $ (2,309) | $ 3,126 | $ (5,639) | $ (1,647) | ||||
Weighted average units outstanding (in shares) | 19,538 | 14,182 | 17,380 | 13,760 | ||||
Distributable earnings per unit (USD per share) | $ 0.36 | $ 0.33 | $ 1.14 | $ 1.01 | ||||
Overdistributed earnings per unit (USD per share) | (0.12) | 0.16 | (0.32) | (0.12) | ||||
Net income per limited partner unit (basic and diluted) (USD per share) | $ 0.24 | $ 0.49 | $ 0.82 | $ 0.89 | ||||
Equity-classified phantom units | $ 17,594 | $ 12,778 | ||||||
Limited Partner | Subordinated Units | ||||||||
Limited Partners' Capital Account [Line Items] | ||||||||
Net income attributable to general and limited partner interests in USD Partners LP | $ 1,517 | $ 4,639 | 5,301 | 7,468 | ||||
Less: Distributable earnings | 2,260 | 2,792 | 6,697 | 8,183 | ||||
Distributions in excess of earnings | $ (743) | $ 1,847 | $ (1,396) | $ (715) | ||||
Distributable earnings per unit (USD per share) | $ 0.36 | $ 0.33 | $ 1.01 | $ 0.93 | ||||
Overdistributed earnings per unit (USD per share) | (0.12) | 0.16 | (0.21) | (0.08) | ||||
Net income per limited partner unit (basic and diluted) (USD per share) | $ 0.24 | $ 0.49 | $ 0.80 | $ 0.85 | ||||
Equity-classified phantom units | $ 7,294 | $ 8,581 | ||||||
Limited Partner | Class A Units | ||||||||
Limited Partners' Capital Account [Line Items] | ||||||||
Net income attributable to general and limited partner interests in USD Partners LP | $ 20 | $ 77 | 79 | 125 | ||||
Less: Distributable earnings | 29 | 46 | 91 | 135 | ||||
Distributions in excess of earnings | $ (9) | $ 31 | $ (12) | $ (10) | ||||
Weighted average units outstanding (in shares) | 84 | 139 | 98 | 148 | ||||
Distributable earnings per unit (USD per share) | $ 0.35 | $ 0.33 | $ 0.93 | $ 0.91 | ||||
Overdistributed earnings per unit (USD per share) | (0.11) | 0.16 | (0.12) | (0.07) | ||||
Net income per limited partner unit (basic and diluted) (USD per share) | $ 0.24 | $ 0.49 | $ 0.81 | $ 0.84 | ||||
Equity-classified phantom units | $ 109 | $ 146 | ||||||
General Partner | ||||||||
Limited Partners' Capital Account [Line Items] | ||||||||
Net income attributable to general and limited partner interests in USD Partners LP | $ 169 | $ 256 | 481 | 403 | ||||
Less: Distributable earnings | 223 | 154 | 600 | 451 | ||||
Distributions in excess of earnings | $ (54) | $ 102 | $ (119) | $ (48) | ||||
Weighted average units outstanding (in shares) | 461 | 461 | 461 | 461 | ||||
Equity-classified phantom units | $ 535 | $ 438 | ||||||
General Partner | Incentive Distribution Rights | ||||||||
Limited Partners' Capital Account [Line Items] | ||||||||
Equity-classified phantom units | $ 57 | $ 109 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 167,488 | $ 137,009 |
Accumulated depreciation | (20,322) | (13,821) |
Construction in progress | 3,041 | 2,514 |
Property and equipment, net | 150,207 | 125,702 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 10,264 | 9,636 |
Trackage and facilities | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 128,475 | 108,782 |
Trackage and facilities | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, useful life | 10 years | |
Trackage and facilities | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, useful life | 30 years | |
Pipeline | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 16,105 | 10,313 |
Pipeline | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, useful life | 20 years | |
Pipeline | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, useful life | 25 years | |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 12,576 | 8,234 |
Equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, useful life | 3 years | |
Equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, useful life | 10 years | |
Furniture | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 68 | $ 44 |
Furniture | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, useful life | 5 years | |
Furniture | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment, useful life | 10 years |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) - Hardisty Terminal Acquisition $ in Millions | Jun. 02, 2017USD ($)ainmibbl |
Business Acquisition [Line Items] | |
Area of real estate property | a | 76 |
Cash consideration | $ | $ 22.8 |
Terminal capacity for unit trains load per day | bbl | 50,000 |
Terminal expandable capacity for unit trains load per day | bbl | 70,000 |
Total capacity of storage tanks | bbl | 140,000 |
Diameter of pipeline | in | 12 |
Length of pipeline | mi | 17 |
Transaction costs | $ | $ 1.3 |
Crude Oil | |
Business Acquisition [Line Items] | |
Cost of purchased oil and gas | $ | $ 1.4 |
GOODWILL AND INTANGIBLE ASSET44
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 33,589 | $ 33,970 | $ 33,589 | $ 33,970 | $ 33,589 |
Weighted average cost of capital (percent) | 10.50% | ||||
Debt capital structure (percent) | 35.00% | ||||
Equity capital structure (percent) | 65.00% | ||||
Income analysis weight (percent) | 50.00% | ||||
Market analysis weight (percent) | 25.00% | ||||
Transaction analysis weight (percent) | 25.00% | ||||
Amortization of intangible assets | $ 3,200 | $ 3,200 | $ 9,500 | $ 9,500 | |
Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
EBITDA multiple for public company equity prices | 8.25 | ||||
EBITDA multiple for sales and purchase of comparable business | 8.25 | ||||
Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
EBITDA multiple for public company equity prices | 9.25 | ||||
EBITDA multiple for sales and purchase of comparable business | 9.25 |
GOODWILL AND INTANGIBLE ASSET45
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Carrying amount: | $ 126,066 | $ 126,066 |
Accumulated amortization: | (23,602) | (14,147) |
Total intangible assets, net | 102,464 | 111,919 |
Customer service agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying amount: | 125,960 | 125,960 |
Accumulated amortization: | (23,582) | (14,135) |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying amount: | 106 | 106 |
Accumulated amortization: | $ (20) | $ (12) |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - Credit Facility - Secured Debt - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 400,000,000 | $ 400,000,000 |
Term of agreement | 5 years | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 300,000,000 | |
Line of credit facility, accordion feature, increase limit | 100,000,000 | |
Line of credit facility, accordion feature, higher borrowing capacity option | $ 500,000,000 | |
Average interest rate | 3.82% | 3.66% |
Revolving Credit Facility | Maximum | ||
Line of Credit Facility [Line Items] | ||
Commitment fee percentage | 0.50% | |
Term Loan Facility | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 100,000,000 | |
Standby Letters of Credit | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | 20,000,000 | |
Swingline Sub-facility | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 20,000,000 |
DEBT - Schedule of Long-term De
DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Long-term Debt | $ 199,411 | $ 220,894 |
Secured Debt | Credit Facility | ||
Debt Instrument [Line Items] | ||
Less: Deferred financing costs, net | (1,589) | (2,234) |
Term Loan Facility | Secured Debt | Credit Facility | ||
Debt Instrument [Line Items] | ||
Facility amounts outstanding | 0 | 10,128 |
Revolving Credit Facility | Secured Debt | Credit Facility | ||
Debt Instrument [Line Items] | ||
Facility amounts outstanding | $ 201,000 | $ 213,000 |
DEBT - Schedule of Line of Cred
DEBT - Schedule of Line of Credit Facilities (Details) - Secured Debt - Credit Facility | 9 Months Ended | |
Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Line of Credit Facility [Line Items] | ||
Aggregate borrowing capacity under Credit Agreement | $ 400,000,000 | $ 400,000,000 |
Available under Credit Agreement | 199,000,000 | 176,900,000 |
Term Loan Facility | ||
Line of Credit Facility [Line Items] | ||
Aggregate borrowing capacity under Credit Agreement | 100,000,000 | |
Term Loan Facility amounts outstanding | 0 | 10,100,000 |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Aggregate borrowing capacity under Credit Agreement | 300,000,000 | |
Term Loan Facility amounts outstanding | 201,000,000 | 213,000,000 |
Letters of Credit | ||
Line of Credit Facility [Line Items] | ||
Term Loan Facility amounts outstanding | $ 0 | $ 0 |
Two quarters following a material acquisition | ||
Line of Credit Facility [Line Items] | ||
Borrowing capacity limit multiple of EBITDA | 5 | |
After two quarters following a material acquisition | ||
Line of Credit Facility [Line Items] | ||
Borrowing capacity limit multiple of EBITDA | 4.5 |
DEBT - Schedule of Interest Exp
DEBT - Schedule of Interest Expense, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Disclosure [Abstract] | ||||
Interest expense on the Credit Agreement | $ 2,172 | $ 2,356 | $ 6,862 | $ 6,642 |
Amortization of deferred financing costs | 216 | 216 | 646 | 646 |
Total interest expense | $ 2,388 | $ 2,572 | $ 7,508 | $ 7,288 |
DEFERRED REVENUE - Summary of D
DEFERRED REVENUE - Summary of Deferred Revenue, Current Portion (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue, current portion | $ 22,991 | $ 26,928 |
Total deferred revenue, net of current portion | 0 | 264 |
Customer prepayments, current portion | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue, current portion | 856 | 3,705 |
Total deferred revenue, net of current portion | 0 | 264 |
Minimum monthly commitment fees | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue, current portion | $ 22,135 | $ 23,223 |
COLLABORATIVE ARRANGEMENT - Nar
COLLABORATIVE ARRANGEMENT - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Pipeline fees | $ 6,367 | $ 5,492 | $ 17,153 | $ 15,544 | |
Prepaid pipeline fees | $ 7,000 | $ 7,000 | $ 6,800 |
NONCONSOLIDATED VARIABLE INTE52
NONCONSOLIDATED VARIABLE INTEREST ENTITIES (Details) - Variable Interest Entity, Not Primary Beneficiary $ in Thousands | Sep. 30, 2017USD ($)railcar | Dec. 31, 2016USD ($) |
Variable Interest Entity [Line Items] | ||
Total assets | $ 20 | $ 7 |
Total liabilities | 603 | 1,564 |
Maximum exposure to loss | $ 0 | 0 |
Number of railcars with payment and performance obligations | railcar | 2,613 | |
Accounts receivable | ||
Variable Interest Entity [Line Items] | ||
Total assets | $ 20 | 7 |
Total liabilities | 0 | 0 |
Maximum exposure to loss | 0 | 0 |
Accounts payable | ||
Variable Interest Entity [Line Items] | ||
Total assets | 0 | 0 |
Total liabilities | 0 | 3 |
Maximum exposure to loss | 0 | 0 |
Deferred revenue, current portion | ||
Variable Interest Entity [Line Items] | ||
Total assets | 0 | 0 |
Total liabilities | 603 | 1,297 |
Maximum exposure to loss | 0 | 0 |
Deferred revenue, net of current portion | ||
Variable Interest Entity [Line Items] | ||
Total assets | 0 | 0 |
Total liabilities | 0 | 264 |
Maximum exposure to loss | $ 0 | $ 0 |
TRANSACTIONS WITH RELATED PAR53
TRANSACTIONS WITH RELATED PARTIES - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($)shares | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($)shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015shares | Nov. 17, 2015owner | |
Related Party Transaction [Line Items] | |||||||
Selling, general and administrative costs | $ 2,221,000 | $ 2,505,000 | $ 6,898,000 | $ 7,472,000 | |||
Accounts payable and accrued expenses — related party | 210,000 | 210,000 | $ 214,000 | ||||
Accounts receivable — related party | 438,000 | $ 438,000 | 219,000 | ||||
USDG | Limited Partner | |||||||
Related Party Transaction [Line Items] | |||||||
Limited partner interest, percentage | 43.80% | ||||||
USD Partners GP LLC | General Partner | |||||||
Related Party Transaction [Line Items] | |||||||
General partner interest (as percent) | 1.70% | ||||||
Stroud Terminal | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of control of terminal capacity | 25.00% | ||||||
USDG | Limited Partner | |||||||
Related Party Transaction [Line Items] | |||||||
Accounts payable and accrued expenses — related party | 0 | $ 0 | |||||
Accounts receivable — related party | 200,000 | ||||||
USDG | Omnibus Agreement | Limited Partner | |||||||
Related Party Transaction [Line Items] | |||||||
Selling, general and administrative costs | 1,500,000 | $ 1,400,000 | 4,300,000 | 4,400,000 | |||
Accounts payable and accrued expenses — related party | 200,000 | 200,000 | 200,000 | ||||
USD Marketing | |||||||
Related Party Transaction [Line Items] | |||||||
Accounts receivable — related party | $ 400,000 | $ 400,000 | $ 0 | ||||
Cogent | Transition Services Agreement | Casper Crude to Rail Holdings, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Transition services agreement expenses - related party | $ 52,000 | ||||||
Cogent | Transition Services Agreement | Casper Crude to Rail Holdings, LLC | Officer | |||||||
Related Party Transaction [Line Items] | |||||||
Number of officers who are principle owners of Cogent | owner | 2 | ||||||
General Partner | |||||||
Related Party Transaction [Line Items] | |||||||
Partners' capital account (in units) | shares | 461,136 | 461,136 | 461,136 | 461,136 | 461,136 | 461,136 | |
General Partner | USD Partners GP LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Partners' capital account (in units) | shares | 461,136 | 461,136 | |||||
General partner interest (as percent) | 2.00% | ||||||
Common Units | Limited Partner | |||||||
Related Party Transaction [Line Items] | |||||||
Partners' capital account (in units) | shares | 19,537,699 | 14,181,996 | 19,537,699 | 14,181,996 | 14,185,599 | 11,947,127 | |
Common Units | Limited Partner | USDG | |||||||
Related Party Transaction [Line Items] | |||||||
Partners' capital account (in units) | shares | 5,278,963 | 5,278,963 | |||||
Subordinated Units | Limited Partner | |||||||
Related Party Transaction [Line Items] | |||||||
Partners' capital account (in units) | shares | 6,278,127 | 8,370,836 | 6,278,127 | 8,370,836 | 8,370,836 | 10,463,545 | |
Subordinated Units | Limited Partner | USDG | |||||||
Related Party Transaction [Line Items] | |||||||
Partners' capital account (in units) | shares | 6,278,127 | 6,278,127 |
TRANSACTIONS WITH RELATED PAR54
TRANSACTIONS WITH RELATED PARTIES - Schedule of Fleet Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Fleet services — related party | Variable Interest Entity, Not Primary Beneficiary | ||||
Variable Interest Entity [Line Items] | ||||
Revenue from related parties | $ 0 | $ 0 | $ 0 | $ 810 |
TRANSACTIONS WITH RELATED PAR55
TRANSACTIONS WITH RELATED PARTIES - Schedule of Deferred Revenue, Current Portion - Related Party (Details) - USD Marketing - Related Party - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Related Party Transaction [Line Items] | ||||
Revenue from related parties | $ 5,947 | $ 2,905 | $ 12,545 | $ 8,650 |
Terminalling services — related party | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related parties | 4,716 | 1,736 | 8,974 | 5,142 |
Fleet leases — related party | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related parties | 1,013 | 890 | 2,794 | 2,671 |
Fleet services — related party | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related parties | 218 | 279 | 776 | 837 |
Freight and other reimbursables — related party | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related parties | $ 0 | $ 0 | $ 1 | $ 0 |
TRANSACTIONS WITH RELATED PAR56
TRANSACTIONS WITH RELATED PARTIES - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Variable Interest Entity [Line Items] | ||
Deferred revenue, current portion | $ 22,991 | $ 26,928 |
Customer prepayments, current portion | ||
Variable Interest Entity [Line Items] | ||
Deferred revenue, current portion | 856 | 3,705 |
Minimum monthly commitment fees | ||
Variable Interest Entity [Line Items] | ||
Deferred revenue, current portion | 22,135 | 23,223 |
Terminalling and Fleets Services Agreements | ||
Variable Interest Entity [Line Items] | ||
Deferred revenue, current portion | 5,710 | 4,292 |
Terminalling and Fleets Services Agreements | Customer prepayments, current portion | ||
Variable Interest Entity [Line Items] | ||
Deferred revenue, current portion | 411 | 390 |
Terminalling and Fleets Services Agreements | Minimum monthly commitment fees | ||
Variable Interest Entity [Line Items] | ||
Deferred revenue, current portion | $ 5,299 | $ 3,902 |
TRANSACTIONS WITH RELATED PAR57
TRANSACTIONS WITH RELATED PARTIES - Schedule of Cash Distributions (Details) - USD ($) $ in Thousands | Aug. 11, 2017 | May 12, 2017 | Feb. 17, 2017 | Sep. 30, 2017 |
USDG | ||||
Related Party Transaction [Line Items] | ||||
Amount Paid to USDG | $ 3,929 | $ 3,872 | $ 3,814 | $ 11,615 |
USD Group LLC | ||||
Related Party Transaction [Line Items] | ||||
Amount Paid to USD Partners GP LLC | $ 194 | $ 170 | $ 152 | $ 516 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Sep. 30, 2017railcar |
Commitments and Contingencies Disclosure [Abstract] | |
Number of railcars | 265 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 9 Months Ended |
Sep. 30, 2017segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SEGMENT REPORTING - Summary of
SEGMENT REPORTING - Summary of Reportable Segment Data for Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Revenues | |||||
Railroad incentives | $ 4 | $ 24 | $ 25 | $ 61 | |
Fleet leases | 643 | 643 | 1,929 | 1,933 | |
Freight and other reimbursables | 118 | 218 | 483 | 944 | |
Total revenues | 28,981 | 28,343 | 83,722 | 82,571 | |
Operating costs | |||||
Subcontracted rail services | 2,340 | 2,004 | 6,148 | 6,073 | |
Pipeline fees | 6,367 | 5,492 | 17,153 | 15,544 | |
Fleet leases | 1,656 | 1,534 | 4,723 | 4,605 | |
Freight and other reimbursables | 118 | 218 | 484 | 944 | |
Operating and maintenance | 749 | 746 | 2,050 | 2,399 | |
Selling, general and administrative | 3,698 | 3,943 | 11,203 | 11,841 | |
Depreciation and amortization | 5,254 | 4,906 | 15,164 | 14,725 | |
Total operating costs | 20,182 | 18,843 | 56,925 | 56,131 | |
Operating income | 8,799 | 9,500 | 26,797 | 26,440 | |
Interest expense | 2,388 | 2,572 | 7,508 | 7,288 | |
Loss (gain) associated with derivative instruments | 667 | (349) | 1,279 | 921 | |
Foreign currency transaction loss (gain) | (457) | 25 | (527) | (120) | |
Other income, net | (48) | 0 | (40) | 0 | |
Provision for (benefit from) income taxes | (178) | (5,579) | (1,427) | (1,865) | |
Net income | 6,427 | 12,831 | 20,004 | 20,216 | |
Goodwill | 33,589 | 33,970 | 33,589 | 33,970 | $ 33,589 |
Total assets | 315,910 | 317,062 | 315,910 | 317,062 | $ 305,967 |
Capital expenditures | 26,708 | 471 | |||
Related Party | |||||
Revenues | |||||
Fleet leases | 1,013 | 890 | 2,794 | 2,671 | |
Freight and other reimbursables | 0 | 0 | 1 | 0 | |
Terminalling services | |||||
Revenues | |||||
Terminalling/Fleet services | 21,799 | 24,078 | 67,335 | 69,560 | |
Terminalling services | Related Party | |||||
Revenues | |||||
Terminalling/Fleet services | 4,716 | 1,736 | 8,974 | 5,142 | |
Fleet services | |||||
Revenues | |||||
Terminalling/Fleet services | 470 | 475 | 1,405 | 613 | |
Fleet services | Related Party | |||||
Revenues | |||||
Terminalling/Fleet services | 218 | 279 | 776 | 1,647 | |
Operating Segments | |||||
Operating costs | |||||
Fleet leases | 0 | 0 | |||
Operating Segments | Terminalling services | |||||
Revenues | |||||
Terminalling/Fleet services | 21,799 | 24,078 | 67,335 | 69,560 | |
Railroad incentives | 4 | 24 | 25 | 61 | |
Fleet leases | 0 | 0 | 0 | 0 | |
Freight and other reimbursables | 0 | 0 | 110 | 12 | |
Total revenues | 26,519 | 25,838 | 76,444 | 74,775 | |
Operating costs | |||||
Subcontracted rail services | 2,340 | 2,004 | 6,148 | 6,073 | |
Pipeline fees | 6,367 | 5,492 | 17,153 | 15,544 | |
Fleet leases | 0 | 0 | |||
Freight and other reimbursables | 0 | 0 | 110 | 12 | |
Operating and maintenance | 654 | 651 | 1,765 | 2,158 | |
Selling, general and administrative | 1,395 | 1,258 | 3,795 | 3,548 | |
Depreciation and amortization | 5,254 | 4,906 | 15,164 | 14,725 | |
Total operating costs | 16,010 | 14,311 | 44,135 | 42,060 | |
Operating income | 10,509 | 11,527 | 32,309 | 32,715 | |
Interest expense | 0 | 286 | 170 | 968 | |
Loss (gain) associated with derivative instruments | 667 | (349) | 1,279 | 921 | |
Foreign currency transaction loss (gain) | (20) | 31 | (33) | (44) | |
Other income, net | (48) | 0 | (40) | 0 | |
Provision for (benefit from) income taxes | (343) | (5,739) | (1,761) | (2,008) | |
Net income | 10,253 | 17,298 | 32,694 | 32,878 | |
Goodwill | 33,589 | 33,970 | 33,589 | 33,970 | |
Total assets | 312,970 | 309,357 | 312,970 | 309,357 | |
Capital expenditures | 26,708 | 471 | |||
Operating Segments | Terminalling services | Related Party | |||||
Revenues | |||||
Terminalling/Fleet services | 4,716 | 1,736 | 8,974 | 5,142 | |
Fleet leases | 0 | 0 | 0 | 0 | |
Freight and other reimbursables | 0 | 0 | 0 | 0 | |
Operating Segments | Fleet services | |||||
Revenues | |||||
Terminalling/Fleet services | 470 | 475 | 1,405 | 613 | |
Railroad incentives | 0 | 0 | 0 | 0 | |
Fleet leases | 643 | 643 | 1,929 | 1,933 | |
Freight and other reimbursables | 118 | 218 | 373 | 932 | |
Total revenues | 2,462 | 2,505 | 7,278 | 7,796 | |
Operating costs | |||||
Subcontracted rail services | 0 | 0 | 0 | 0 | |
Pipeline fees | 0 | 0 | 0 | 0 | |
Fleet leases | 1,656 | 1,534 | 4,723 | 4,605 | |
Freight and other reimbursables | 118 | 218 | 374 | 932 | |
Operating and maintenance | 95 | 95 | 285 | 241 | |
Selling, general and administrative | 210 | 230 | 694 | 631 | |
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Total operating costs | 2,079 | 2,077 | 6,076 | 6,409 | |
Operating income | 383 | 428 | 1,202 | 1,387 | |
Interest expense | 0 | 0 | 0 | 0 | |
Loss (gain) associated with derivative instruments | 0 | 0 | 0 | 0 | |
Foreign currency transaction loss (gain) | 4 | (2) | 6 | (72) | |
Other income, net | 0 | 0 | 0 | 0 | |
Provision for (benefit from) income taxes | 196 | 160 | 511 | 142 | |
Net income | 183 | 270 | 685 | 1,317 | |
Goodwill | 0 | 0 | 0 | 0 | |
Total assets | 2,001 | 5,754 | 2,001 | 5,754 | |
Capital expenditures | 0 | 0 | |||
Operating Segments | Fleet services | Related Party | |||||
Revenues | |||||
Terminalling/Fleet services | 218 | 279 | 776 | 1,647 | |
Fleet leases | 1,013 | 890 | 2,794 | 2,671 | |
Freight and other reimbursables | 0 | 0 | 1 | 0 | |
Corporate | |||||
Revenues | |||||
Terminalling/Fleet services | 0 | 0 | 0 | 0 | |
Railroad incentives | 0 | 0 | 0 | 0 | |
Fleet leases | 0 | 0 | 0 | 0 | |
Freight and other reimbursables | 0 | 0 | 0 | 0 | |
Total revenues | 0 | 0 | 0 | 0 | |
Operating costs | |||||
Subcontracted rail services | 0 | 0 | 0 | 0 | |
Pipeline fees | 0 | 0 | 0 | 0 | |
Fleet leases | 0 | 0 | 0 | 0 | |
Freight and other reimbursables | 0 | 0 | 0 | 0 | |
Operating and maintenance | 0 | 0 | 0 | 0 | |
Selling, general and administrative | 2,093 | 2,455 | 6,714 | 7,662 | |
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Total operating costs | 2,093 | 2,455 | 6,714 | 7,662 | |
Operating income | (2,093) | (2,455) | (6,714) | (7,662) | |
Interest expense | 2,388 | 2,286 | 7,338 | 6,320 | |
Loss (gain) associated with derivative instruments | 0 | 0 | 0 | 0 | |
Foreign currency transaction loss (gain) | (441) | (4) | (500) | (4) | |
Other income, net | 0 | 0 | 0 | 0 | |
Provision for (benefit from) income taxes | (31) | 0 | (177) | 1 | |
Net income | (4,009) | (4,737) | (13,375) | (13,979) | |
Goodwill | 0 | 0 | 0 | 0 | |
Total assets | 939 | 1,951 | 939 | 1,951 | |
Capital expenditures | 0 | 0 | |||
Corporate | Related Party | |||||
Revenues | |||||
Terminalling/Fleet services | 0 | 0 | 0 | 0 | |
Fleet leases | 0 | 0 | 0 | 0 | |
Freight and other reimbursables | $ 0 | $ 0 | $ 0 | $ 0 |
SEGMENT REPORTING - Reconciliat
SEGMENT REPORTING - Reconciliation of Adjusted EBITDA to Loss from Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Adjusted EBITDA | ||||
Services Adjusted EBITDA | $ 13,422 | $ 16,180 | $ 43,884 | $ 46,859 |
Add (deduct): | ||||
Amortization of deferred financing costs | 216 | 216 | 646 | 646 |
Deferred income taxes | (221) | 98 | 86 | 2 |
Changes in accounts receivable and other assets | 3,215 | (4,309) | 1,862 | (2,802) |
Changes in accounts payable and accrued expenses | 2,033 | 2,027 | 947 | 90 |
Changes in deferred revenue and other liabilities | (3,147) | (2,599) | (5,667) | (499) |
Change in restricted cash | 915 | (31) | 685 | (664) |
Interest expense, net | (2,384) | (2,572) | (7,500) | (7,288) |
Provision for (benefit from) income taxes | 178 | 5,579 | 1,427 | 1,865 |
Foreign currency transaction gain (loss) | 457 | (25) | 527 | 120 |
Deferred revenue associated with minimum monthly commitment fees | 1,473 | (43) | 1,331 | (1,230) |
Net cash provided by operating activities | 16,157 | 14,521 | 38,228 | 37,099 |
Operating Segments | Terminalling services | ||||
Segment Adjusted EBITDA | ||||
Services Adjusted EBITDA | 14,186 | 17,080 | 46,434 | 50,310 |
Add (deduct): | ||||
Provision for (benefit from) income taxes | 343 | 5,739 | 1,761 | 2,008 |
Foreign currency transaction gain (loss) | 20 | (31) | 33 | 44 |
Operating Segments | Fleet services | ||||
Segment Adjusted EBITDA | ||||
Services Adjusted EBITDA | 383 | 428 | 1,202 | 1,387 |
Add (deduct): | ||||
Provision for (benefit from) income taxes | (196) | (160) | (511) | (142) |
Foreign currency transaction gain (loss) | (4) | 2 | (6) | 72 |
Corporate | ||||
Segment Adjusted EBITDA | ||||
Services Adjusted EBITDA | (1,147) | (1,328) | (3,752) | (4,838) |
Add (deduct): | ||||
Provision for (benefit from) income taxes | 31 | 0 | 177 | (1) |
Foreign currency transaction gain (loss) | $ 441 | $ 4 | $ 500 | $ 4 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) CAD in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)subsidiary | Sep. 30, 2017CADsubsidiary | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Operating Loss Carryforwards [Line Items] | ||||||
Number of subsidiaries taxable as a corporation | subsidiary | 1 | 1 | ||||
Effective income tax rate | 27.00% | 27.00% | ||||
Income (loss) | $ 6,249,000 | $ 7,252,000 | $ 18,577,000 | $ 18,351,000 | ||
Reduction in prior year tax expense | 2,600,000 | CAD 3.4 | ||||
Unrecognized tax benefits | 0 | 0 | $ 0 | |||
Canada | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Operating loss carryforwards | $ 4,700,000 | $ 4,700,000 | 4,400,000 | |||
Internal Revenue Service (IRS) | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Effective income tax rate | 34.00% | 34.00% | 34.00% | |||
Canada Revenue Agency | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Federal and provincial income tax rate (as percent) | 27.00% | 27.00% | 27.00% | 27.00% | 27.00% | |
Subsidiaries | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Income (loss) | $ 900,000 | $ 400,000 | $ 1,900,000 | $ (800,000) | ||
Subsidiaries | US | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Operating loss carryforwards | $ 0 | $ 0 | $ 800,000 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Current income tax expense (benefit): | ||||
U.S. federal income tax | $ 289 | $ 0 | $ 662 | $ 0 |
U.S. federal operating loss carryforward | 56 | 0 | (200) | 0 |
State income tax expense (benefit) | (17) | 14 | (126) | 44 |
Canadian federal and provincial income taxes benefit | (285) | (5,691) | (1,849) | (1,911) |
Total current income tax expense (benefit) | 43 | (5,677) | (1,513) | (1,867) |
Deferred income tax expense (benefit): | ||||
U.S. federal income tax expense (benefit) | (164) | 147 | 10 | 147 |
Canadian federal and provincial income taxes expense (benefit) | (57) | (49) | 76 | (145) |
Total change in deferred income tax expense (benefit) | (221) | 98 | 86 | 2 |
Benefit from income taxes | $ (178) | $ (5,579) | $ (1,427) | $ (1,865) |
INCOME TAXES - Schedule of Effe
INCOME TAXES - Schedule of Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense at the U.S. federal statutory rate | $ 2,124 | $ 2,465 | $ 6,316 | $ 6,239 |
Amount attributable to partnership not subject to income tax | (2,418) | (9,477) | (8,132) | (8,318) |
Foreign income tax rate differential | 91 | 1,668 | 456 | 709 |
Other | 27 | 45 | 38 | (17) |
State income tax expense (benefit) | (21) | 14 | (139) | 44 |
Change in valuation allowance | 19 | (294) | 34 | (522) |
Benefit from income taxes | $ (178) | $ (5,579) | $ (1,427) | $ (1,865) |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Deferred income tax assets | ||
Deferred revenues | $ 0 | $ 89 |
Capital loss carryforwards | 472 | 438 |
Operating loss carryforwards | 0 | 257 |
Deferred income tax liabilities | ||
Unbilled revenue | (285) | |
Prepaid expenses | (256) | (592) |
Property and equipment | (416) | (577) |
Valuation allowance | (472) | (438) |
Deferred income tax liability, net | (957) | (823) |
U.S. | ||
Deferred income tax assets | ||
Deferred revenues | 0 | 89 |
Capital loss carryforwards | 0 | 0 |
Operating loss carryforwards | 0 | 257 |
Deferred income tax liabilities | ||
Unbilled revenue | 0 | |
Prepaid expenses | (256) | (592) |
Property and equipment | 0 | 0 |
Valuation allowance | 0 | 0 |
Deferred income tax liability, net | (256) | (246) |
Foreign | ||
Deferred income tax assets | ||
Deferred revenues | 0 | 0 |
Capital loss carryforwards | 472 | 438 |
Operating loss carryforwards | 0 | 0 |
Deferred income tax liabilities | ||
Unbilled revenue | (285) | |
Prepaid expenses | 0 | 0 |
Property and equipment | (416) | (577) |
Valuation allowance | (472) | (438) |
Deferred income tax liability, net | $ (701) | $ (577) |
DERIVATIVE FINANCIAL INSTRUME66
DERIVATIVE FINANCIAL INSTRUMENTS - Narrative (Details) CAD in Millions | Sep. 30, 2017$ / bblbbl | Sep. 30, 2017$ / bblbbl | Jun. 30, 2017contractbbl | Oct. 31, 2017$ / d | Jul. 31, 2017$ / d | Jul. 14, 2017$ / d | Apr. 30, 2016CADcollar_arrangementcontract$ / CAD | Jun. 30, 2015CADcollar_arrangement$ / CAD |
Forward Contract Maturing in 2017 | ||||||||
Derivative [Line Items] | ||||||||
Number of derivative instruments held | contract | 4 | |||||||
Notional amount | CAD | CAD 33.5 | |||||||
Number of derivative instruments maturing each quarter | collar_arrangement | 1 | |||||||
Exchange rate floor (USD per cad dollar) | $ / CAD | 0.7804 | |||||||
Exchange rate cap (USD per cad dollar) | $ / CAD | 0.7809 | |||||||
Foreign Exchange Option/Maturing in 2016 | ||||||||
Derivative [Line Items] | ||||||||
Number of derivative instruments held | collar_arrangement | 4 | |||||||
Notional amount | CAD | CAD 32 | |||||||
Exchange rate floor (USD per cad dollar) | $ / CAD | 0.84 | |||||||
Exchange rate cap (USD per cad dollar) | $ / CAD | 0.86 | |||||||
Foreign Exchange Option/Maturing in 2016 | Minimum | ||||||||
Derivative [Line Items] | ||||||||
Notional amount | CAD | CAD 7.9 | |||||||
Foreign Exchange Option/Maturing in 2016 | Maximum | ||||||||
Derivative [Line Items] | ||||||||
Notional amount | CAD | CAD 8.1 | |||||||
Crude Oil | Commodity derivatives | ||||||||
Derivative [Line Items] | ||||||||
Number of derivative instruments held | contract | 2 | |||||||
Notional (in Bbl) | bbl | 61,778 | 31,778 | ||||||
Crude Oil | July 3, 2017 | ||||||||
Derivative [Line Items] | ||||||||
Notional (in Bbl) | bbl | 18,395 | 18,000 | ||||||
Crude Oil | October 2017 | ||||||||
Derivative [Line Items] | ||||||||
Notional (in Bbl) | bbl | 13,383 | 13,000 | ||||||
Crude Oil | October 2017 | ||||||||
Derivative [Line Items] | ||||||||
Notional (in Bbl) | bbl | 30,000 | 30,000 | ||||||
Crude Oil | Receive | July 3, 2017 | ||||||||
Derivative [Line Items] | ||||||||
Derivative price (USD per bbl) | 47.2 | 47.2 | 47.20 | 47.64 | ||||
Crude Oil | Receive | October 2017 | ||||||||
Derivative [Line Items] | ||||||||
Derivative price (USD per bbl) | $ / bbl | 47.7 | 47.7 | ||||||
Crude Oil | Receive | October 2017 | ||||||||
Derivative [Line Items] | ||||||||
Derivative price (USD per bbl) | $ / bbl | 47.9 | 47.9 | ||||||
Subsequent Event | Crude Oil | Receive | October 2017 | ||||||||
Derivative [Line Items] | ||||||||
Derivative price (USD per bbl) | $ / d | 47.70 | |||||||
Subsequent Event | Crude Oil | Receive | October 2017 | ||||||||
Derivative [Line Items] | ||||||||
Derivative price (USD per bbl) | $ / d | 47.90 |
DERIVATIVE FINANCIAL INSTRUME67
DERIVATIVE FINANCIAL INSTRUMENTS - Derivative Positions Included in the Consolidated Balance Sheets at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||
Fair Value | $ (354) | $ 1,167 |
Other current assets | ||
Derivative [Line Items] | ||
Fair Value | 0 | 1,167 |
Other current liabilities | ||
Derivative [Line Items] | ||
Fair Value | $ (354) | $ 0 |
DERIVATIVE FINANCIAL INSTRUME68
DERIVATIVE FINANCIAL INSTRUMENTS - Gain (Loss) on Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Loss (gain) associated with derivative instruments | $ 667 | $ (349) | $ 1,279 | $ 921 |
DERIVATIVE FINANCIAL INSTRUME69
DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Fair Values of Outstanding Foreign Currency Options (Details) $ in Thousands | Sep. 30, 2017USD ($) | Sep. 30, 2017CAD | Dec. 31, 2016USD ($) | Apr. 30, 2016CAD |
Derivative [Line Items] | ||||
Fair Value | $ (354) | $ 1,167 | ||
March 31, 2017 | Puts (purchased) | ||||
Derivative [Line Items] | ||||
Notional (C$) | CAD | CAD 8,300,000 | |||
Forward Rate | 0.7804 | 0.7804 | ||
Market Price | 0 | 0 | ||
Fair Value | $ 0 | 299 | ||
June 30, 2017 | Puts (purchased) | ||||
Derivative [Line Items] | ||||
Notional (C$) | CAD | CAD 8,400,000 | |||
Forward Rate | 0.7805 | 0.7805 | ||
Market Price | 0 | 0 | ||
Fair Value | $ 0 | 296 | ||
September 29, 2017 | Puts (purchased) | ||||
Derivative [Line Items] | ||||
Notional (C$) | CAD | CAD 8,400,000 | |||
Forward Rate | 0.7807 | 0.7807 | ||
Market Price | 0 | 0 | ||
Fair Value | $ 0 | 290 | ||
December 29, 2017 | Puts (purchased) | ||||
Derivative [Line Items] | ||||
Notional (C$) | CAD | CAD 8,400,000 | |||
Forward Rate | 0.7809 | 0.7809 | ||
Market Price | 0.8028 | 0.8028 | ||
Fair Value | $ (184) | 282 | ||
Total | ||||
Derivative [Line Items] | ||||
Notional (C$) | CAD | CAD 33,500,000 | |||
Total | Puts (purchased) | ||||
Derivative [Line Items] | ||||
Fair Value | $ (184) | $ 1,167 |
DERIVATIVE FINANCIAL INSTRUME70
DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of commodity swaps (Details) $ in Thousands | Sep. 30, 2017USD ($)$ / d$ / bblbbl | Sep. 30, 2017USD ($)$ / d$ / bblbbl | Jun. 30, 2017bbl | Jul. 31, 2017$ / d | Jul. 14, 2017$ / d | Dec. 31, 2016USD ($) |
Derivative [Line Items] | ||||||
Fair Value | $ (354) | $ (354) | $ 1,167 | |||
Crude Oil | July 3, 2017 | ||||||
Derivative [Line Items] | ||||||
Notional (in Bbl) | bbl | 18,395 | 18,000 | ||||
Fair Value | $ 0 | 0 | ||||
Crude Oil | October 2017 | ||||||
Derivative [Line Items] | ||||||
Notional (in Bbl) | bbl | 13,383 | 13,000 | ||||
Fair Value | $ (54) | $ (54) | ||||
Crude Oil | October 2017 | ||||||
Derivative [Line Items] | ||||||
Notional (in Bbl) | bbl | 30,000 | 30,000 | ||||
Fair Value | $ (116) | $ (116) | ||||
Crude Oil | Commodity derivatives | ||||||
Derivative [Line Items] | ||||||
Notional (in Bbl) | bbl | 61,778 | 31,778 | ||||
Fair Value | $ (170) | $ (170) | ||||
Pay | Crude Oil | July 3, 2017 | ||||||
Derivative [Line Items] | ||||||
Pay | $ / d | 0 | 0 | ||||
Pay | Crude Oil | October 2017 | ||||||
Derivative [Line Items] | ||||||
Pay | $ / d | 51.76 | 51.76 | ||||
Pay | Crude Oil | October 2017 | ||||||
Derivative [Line Items] | ||||||
Pay | $ / d | 51.76 | 51.76 | ||||
Receive | Crude Oil | July 3, 2017 | ||||||
Derivative [Line Items] | ||||||
Pay | 47.2 | 47.2 | 47.20 | 47.64 | ||
Receive | Crude Oil | October 2017 | ||||||
Derivative [Line Items] | ||||||
Pay | $ / bbl | 47.7 | 47.7 | ||||
Receive | Crude Oil | October 2017 | ||||||
Derivative [Line Items] | ||||||
Pay | $ / bbl | 47.9 | 47.9 |
PARTNERS' CAPITAL (Details)
PARTNERS' CAPITAL (Details) | Jun. 07, 2017shares | Feb. 28, 2017quartershares | Sep. 30, 2017$ / shares | Sep. 30, 2016$ / shares | Sep. 30, 2017quarterinstallment$ / sharesshares | Sep. 30, 2016shares |
Limited Partners' Capital Account [Line Items] | ||||||
Targeted annual distribution amount (USD per share) | $ / shares | $ 1.38 | $ 1.29 | $ 1.15 | |||
Targeted quarterly distribution (USD per share) | $ / shares | $ 0.2875 | |||||
Common Units | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Issuance of common units (in shares) | 3,000,000 | |||||
Limited Partner | Class A Units | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Vested (in shares) | 46,250 | 46,250 | 46,250 | |||
Limited Partner | Common Units | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Conversion of units (in units) | 2,162,084 | 2,138,959 | ||||
Issuance of common units (in shares) | 3,000,000 | |||||
Limited Partner | Subordinated Units | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Conversion of units (in units) | 2,092,709 | 2,092,709 | ||||
First vesting tranche | Limited Partner | Capital Unit, Class A | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Number of vesting installments | installment | 4 | |||||
Vesting period | 4 years | |||||
Conversion factor | 1 | |||||
Conversion ratio | 1.50 | |||||
Number of quarters distributions paid for | quarter | 4 | |||||
First vesting tranche | Limited Partner | Class A Units | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Conversion of units (in units) | 46,250 | 46,250 | 46,250 | |||
First vesting tranche | Limited Partner | Common Units | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Conversion of units (in units) | 69,375 | |||||
First vesting tranche | Limited Partner | Subordinated Units | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Conversion ratio | 1 | |||||
Number of quarters distributions paid for | quarter | 4 | |||||
Conversion of units (in units) | 2,092,709 | |||||
Conversion on units, percentage | 20.00% | |||||
Minimum period to elapse before eligibility of conversion of units | 12 months | |||||
Second vesting tranche | Limited Partner | Capital Unit, Class A | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Conversion factor | 1.5 | |||||
Third vesting tranche | Limited Partner | Capital Unit, Class A | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Conversion factor | 1.75 | |||||
Last vesting tranche | Limited Partner | Capital Unit, Class A | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Conversion factor | 2 | |||||
LTIP | First vesting tranche | Limited Partner | Common Units | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Conversion of units (in units) | 190,016 | |||||
Phantom Share Units (PSUs) | LTIP | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Conversion ratio | 1 | |||||
Phantom Share Units (PSUs) | LTIP | First vesting tranche | Limited Partner | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Vested (in shares) | 269,286 | |||||
Units retained (in shares) | 79,270 |
PARTNERS' CAPITAL - Schedule of
PARTNERS' CAPITAL - Schedule of Stock Issuances (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 07, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Limited Partners' Capital Account [Line Items] | |||
Net Proceeds to the Partnership | $ 33,700 | $ 0 | |
Common Units | |||
Limited Partners' Capital Account [Line Items] | |||
Number of Common Units Issued (in units) | 3,000,000 | ||
Public Offering Price per Common Unit (in USD per unit) | $ 11.60 | ||
Net Proceeds to the Partnership | $ 33,700 |
UNIT BASED COMPENSATION - Narra
UNIT BASED COMPENSATION - Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Feb. 28, 2017quartershares | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Dec. 31, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Allocated share based compensation expense not expected to vest | $ | $ 30,000 | $ 0 | $ 30,000 | $ 0 | ||
Class A Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Forfeited units (in shares) | 10,000 | 0 | 10,000 | 0 | ||
Allocated share-based compensation expense | $ | $ (124,000) | $ 248,000 | $ 108,000 | $ 782,000 | ||
Phantom Share Units (PSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 4 years | |||||
Allocated share-based compensation expense | $ | 1,100,000 | $ 900,000 | $ 2,900,000 | $ 2,000,000 | ||
Unit based compensation expense, unrecognized | $ | $ 10,300,000 | $ 10,300,000 | ||||
Weighted average recognition period | 2 years 10 months 13 days | |||||
Phantom Share Units (PSUs) | Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 1 year | |||||
LTIP | Phantom Share Units (PSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Conversion ratio | 1 | |||||
Approved for grant (in units) | 693,099 | 576,373 | ||||
Authorized for issuance (in units) | 1,654,167 | 1,654,167 | ||||
Share remaining available (in units) | 177,952 | 177,952 | ||||
Limited Partner | Class A Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vested (in shares) | 46,250 | 46,250 | 46,250 | |||
Forfeited units (in shares) | 10,000 | |||||
Limited Partner | Common Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Conversion of units (in units) | 2,162,084 | 2,138,959 | ||||
First vesting tranche | Limited Partner | Capital Unit, Class A | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Number of quarters distributions paid for | quarter | 4 | |||||
Conversion ratio | 1.50 | |||||
First vesting tranche | Limited Partner | Class A Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Conversion of units (in units) | 46,250 | 46,250 | 46,250 | |||
First vesting tranche | Limited Partner | Common Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Conversion of units (in units) | 69,375 | |||||
Grant date average fair value (USD per share) | $ / shares | $ 25.71 | $ 25.71 | $ 25.71 | $ 25.71 | ||
First vesting tranche | Limited Partner | LTIP | Common Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Conversion of units (in units) | 190,016 |
UNIT BASED COMPENSATION - Class
UNIT BASED COMPENSATION - Class A Units (Details) - Class A Units - shares | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Partners' capital account beginning balance (in units) | 138,750 | 185,000 | |||
Forfeited units (in shares) | (10,000) | 0 | (10,000) | 0 | |
Partners' capital account ending balance (in units) | 82,500 | 138,750 | 82,500 | 138,750 | |
Limited Partner | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Partners' capital account beginning balance (in units) | 138,750 | 185,000 | |||
Vested (in shares) | (46,250) | (46,250) | (46,250) | ||
Forfeited units (in shares) | (10,000) | ||||
Partners' capital account ending balance (in units) | 82,500 | 138,750 | 82,500 | 138,750 |
UNIT BASED COMPENSATION - Selli
UNIT BASED COMPENSATION - Selling General And Administrative Expense Related To Unit Based Compensation (Details) - Class A Units - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ (124) | $ 248 | $ 108 | $ 782 |
Forfeited units | $ 247 |
UNIT BASED COMPENSATION - Long-
UNIT BASED COMPENSATION - Long-term Incentive Plan (Details) - LTIP - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Phantom Share Units (PSU) Equity Classified | ||
Weighted-Average Grant Date Fair Value Per Unit | ||
Grant date average fair value, beginning of period (USD per share) | $ 8.51 | $ 12.75 |
Granted (USD per share) | 12.79 | 6.39 |
Vested (USD per share) | 8.47 | 12.79 |
Forfeited (USD per share) | 10.94 | 7.97 |
Grant date average fair value, end of period (USD per share) | 10.91 | 8.50 |
Phantom Share Units (PSU) Liability Classified | ||
Weighted-Average Grant Date Fair Value Per Unit | ||
Grant date average fair value, beginning of period (USD per share) | 7.70 | 12.78 |
Granted (USD per share) | 12.80 | 6.39 |
Vested (USD per share) | 6.39 | 12.78 |
Grant date average fair value, end of period (USD per share) | $ 11.15 | $ 8.02 |
Number of Director and Independent Consultant Units | Phantom Share Units (PSU) Equity Classified | ||
Number of units | ||
Phantom Units, beginning of period (in shares) | 64,830 | 24,045 |
Granted (in shares) | 24,999 | 64,830 |
Vested (in shares) | (64,830) | (20,442) |
Forfeited (in shares) | 0 | 0 |
Phantom Units, end of period (in shares) | 24,999 | 68,433 |
Number of Director and Independent Consultant Units | Phantom Share Units (PSU) Liability Classified | ||
Number of units | ||
Phantom Units, beginning of period (in shares) | 21,610 | 10,256 |
Granted (in shares) | 8,333 | 21,610 |
Vested (in shares) | (21,610) | (10,256) |
Phantom Units, end of period (in shares) | 8,333 | 21,610 |
Number of Employee Units | Phantom Share Units (PSU) Equity Classified | ||
Number of units | ||
Phantom Units, beginning of period (in shares) | 730,808 | 349,976 |
Granted (in shares) | 639,955 | 471,412 |
Vested (in shares) | (204,456) | (87,500) |
Forfeited (in shares) | (56,083) | (2,608) |
Phantom Units, end of period (in shares) | 1,110,224 | 731,280 |
Number of Employee Units | Phantom Share Units (PSU) Liability Classified | ||
Number of units | ||
Phantom Units, beginning of period (in shares) | 21,615 | 13,276 |
Granted (in shares) | 19,812 | 17,021 |
Vested (in shares) | 0 | 0 |
Phantom Units, end of period (in shares) | 41,427 | 30,297 |
UNIT BASED COMPENSATION - Phant
UNIT BASED COMPENSATION - Phantom Units Pursuant to Associated DERs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Distribution Equivalent Right | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-classified Phantom Units | $ 388 | $ 252 | $ 1,048 | $ 612 |
Liability-classified Phantom Units | 17 | 16 | 48 | 39 |
Total | 405 | 268 | 1,096 | 651 |
Phantom Share Units (PSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-classified Phantom Units | 257 | 785 | 756 | |
Share-based compensation, forfeited | $ 61 | $ 2 | $ 64 | $ 2 |
SUPPLEMENTAL CASH FLOW INFORM78
SUPPLEMENTAL CASH FLOW INFORMATION - Schedule of Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash paid (received) for income taxes | $ (1,250) | $ 2,160 | ||
Cash paid for interest | 7,102 | 6,558 | ||
Loss associated with disposal of assets | 18 | 0 | ||
Amortization of deferred financing costs | $ 216 | $ 216 | 646 | 646 |
Deferred income taxes | $ (221) | $ 98 | 86 | 2 |
Other | $ 750 | $ 648 |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 13, 2017 | Oct. 26, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 |
Subsequent Event [Line Items] | |||||
Targeted annual distribution amount (USD per share) | $ 1.38 | $ 1.29 | $ 1.15 | ||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Distribution (USD per share) | $ 0.005 | ||||
Increase in distribution | 1.47059% | ||||
Increase in distribution over minimum | 20.00% | ||||
Subsequent Event | Common Units | |||||
Subsequent Event [Line Items] | |||||
Partners' capital distribution amount per share (USD per share) | $ 0.345 | ||||
Targeted annual distribution amount (USD per share) | $ 1.38 | ||||
Forecast | Common Units | |||||
Subsequent Event [Line Items] | |||||
Distributions, limited partner | $ 4,900 | ||||
Forecast | Class A Units | |||||
Subsequent Event [Line Items] | |||||
Distributions, limited partner | 28 | ||||
Forecast | USDG | Common Units and Subordinated Units | |||||
Subsequent Event [Line Items] | |||||
Distributions, limited partner | 4,000 | ||||
Forecast | USD Partners GP LLC | |||||
Subsequent Event [Line Items] | |||||
Distributions, general partner | $ 216 |