x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
£ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 73-1599053 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
ITEM 1. | CONSOLIDATED FINANCIAL STATEMENTS | |||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS: | ||||
1. | ||||
2. | ||||
3. | ||||
4. | ||||
5. | ||||
6. | ||||
7. | ||||
8. | ||||
9. | ||||
10. | ||||
11. | ||||
12. | ||||
13. | ||||
14. | ||||
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | |||
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | |||
ITEM 4. | CONTROLS AND PROCEDURES | |||
PART II OTHER INFORMATION | ||||
ITEM 1. | ||||
ITEM 1A. | ||||
ITEM 2. | ||||
ITEM 3. | ||||
ITEM 4. | ||||
ITEM 5. | ||||
ITEM 6. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2016 | 2015 | 2016 | ||||||||||||
Transportation and terminals revenue | $ | 410,387 | $ | 413,433 | $ | 1,149,100 | $ | 1,175,748 | |||||||
Product sales revenue | 172,731 | 133,356 | 455,827 | 403,607 | |||||||||||
Affiliate management fee revenue | 3,557 | 4,993 | 10,478 | 11,140 | |||||||||||
Total revenue | 586,675 | 551,782 | 1,615,405 | 1,590,495 | |||||||||||
Costs and expenses: | |||||||||||||||
Operating | 147,349 | 135,286 | 396,374 | 392,681 | |||||||||||
Cost of product sales | 85,522 | 118,242 | 316,208 | 327,530 | |||||||||||
Depreciation and amortization | 42,043 | 47,081 | 124,180 | 134,137 | |||||||||||
General and administrative | 37,612 | 35,800 | 111,052 | 111,216 | |||||||||||
Total costs and expenses | 312,526 | 336,409 | 947,814 | 965,564 | |||||||||||
Earnings of non-controlled entities | 15,521 | 18,576 | 49,653 | 51,543 | |||||||||||
Operating profit | 289,670 | 233,949 | 717,244 | 676,474 | |||||||||||
Interest expense | 40,419 | 50,163 | 118,009 | 142,573 | |||||||||||
Interest income | (310 | ) | (302 | ) | (993 | ) | (1,067 | ) | |||||||
Interest capitalized | (3,984 | ) | (7,877 | ) | (9,037 | ) | (21,143 | ) | |||||||
Gain on exchange of interest in non-controlled entity | — | — | — | (28,144 | ) | ||||||||||
Other expense (income) | 1,706 | (3,324 | ) | (4,554 | ) | (7,519 | ) | ||||||||
Income before provision for income taxes | 251,839 | 195,289 | 613,819 | 591,774 | |||||||||||
Provision for income taxes | 867 | 738 | 1,820 | 2,294 | |||||||||||
Net income | $ | 250,972 | $ | 194,551 | $ | 611,999 | $ | 589,480 | |||||||
Basic net income per limited partner unit | $ | 1.10 | $ | 0.85 | $ | 2.69 | $ | 2.59 | |||||||
Diluted net income per limited partner unit | $ | 1.10 | $ | 0.85 | $ | 2.69 | $ | 2.59 | |||||||
Weighted average number of limited partner units outstanding used for basic net income per unit calculation(1) | 227,580 | 227,960 | 227,540 | 227,913 | |||||||||||
Weighted average number of limited partner units outstanding used for diluted net income per unit calculation(1) | 227,945 | 227,999 | 227,702 | 227,947 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2016 | 2015 | 2016 | ||||||||||||
Net income | $ | 250,972 | $ | 194,551 | $ | 611,999 | $ | 589,480 | |||||||
Other comprehensive income: | |||||||||||||||
Derivative activity: | |||||||||||||||
Net loss on cash flow hedges(1) | (3,410 | ) | (3,169 | ) | (16,939 | ) | (24,278 | ) | |||||||
Reclassification of net loss on cash flow hedges to income(1) | 388 | 512 | 976 | 1,288 | |||||||||||
Changes in employee benefit plan assets and benefit obligations recognized in other comprehensive income: | |||||||||||||||
Amortization of prior service credit(2) | (928 | ) | (973 | ) | (2,784 | ) | (2,920 | ) | |||||||
Amortization of actuarial loss(2) | 1,798 | 1,452 | 5,393 | 4,145 | |||||||||||
Settlement cost(2) | — | 202 | — | 202 | |||||||||||
Total other comprehensive loss | (2,152 | ) | (1,976 | ) | (13,354 | ) | (21,563 | ) | |||||||
Comprehensive income | $ | 248,820 | $ | 192,575 | $ | 598,645 | $ | 567,917 |
December 31, 2015 | September 30, 2016 | ||||||
ASSETS | (Unaudited) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 28,731 | $ | 291,097 | |||
Trade accounts receivable | 83,893 | 126,141 | |||||
Other accounts receivable | 12,701 | 24,867 | |||||
Inventory | 130,868 | 123,011 | |||||
Energy commodity derivatives contracts, net | 39,243 | — | |||||
Energy commodity derivatives deposits | — | 30,559 | |||||
Other current assets | 43,418 | 52,600 | |||||
Total current assets | 338,854 | 648,275 | |||||
Property, plant and equipment | 6,166,766 | 6,657,305 | |||||
Less: Accumulated depreciation | 1,347,537 | 1,471,263 | |||||
Net property, plant and equipment | 4,819,229 | 5,186,042 | |||||
Investments in non-controlled entities | 765,628 | 912,419 | |||||
Long-term receivables | 20,374 | 22,101 | |||||
Goodwill | 53,260 | 53,260 | |||||
Other intangibles (less accumulated amortization of $13,709 and $2,010 at December 31, 2015 and September 30, 2016, respectively) | 1,856 | 52,102 | |||||
Tank bottoms | 27,533 | 35,429 | |||||
Other noncurrent assets | 14,833 | 10,157 | |||||
Total assets | $ | 6,041,567 | $ | 6,919,785 | |||
LIABILITIES AND PARTNERS’ CAPITAL | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 104,094 | $ | 101,012 | |||
Accrued payroll and benefits | 51,764 | 39,039 | |||||
Accrued interest payable | 51,296 | 48,903 | |||||
Accrued taxes other than income | 51,587 | 53,702 | |||||
Environmental liabilities | 15,679 | 11,711 | |||||
Deferred revenue | 81,627 | 98,818 | |||||
Accrued product purchases | 31,339 | 25,156 | |||||
Energy commodity derivatives contracts, net | — | 12,430 | |||||
Energy commodity derivatives deposits | 24,252 | — | |||||
Current portion of long-term debt, net | 250,335 | 250,020 | |||||
Other current liabilities | 51,099 | 43,058 | |||||
Total current liabilities | 713,072 | 683,849 | |||||
Long-term debt, net | 3,189,287 | 4,073,502 | |||||
Long-term pension and benefits | 77,551 | 70,416 | |||||
Other noncurrent liabilities | 24,162 | 29,408 | |||||
Environmental liabilities | 15,759 | 14,078 | |||||
Commitments and contingencies | |||||||
Partners’ capital: | |||||||
Limited partner unitholders (227,427 units and 227,784 units outstanding at December 31, 2015 and September 30, 2016, respectively) | 2,118,086 | 2,166,445 | |||||
Accumulated other comprehensive loss | (96,350 | ) | (117,913 | ) | |||
Total partners’ capital | 2,021,736 | 2,048,532 | |||||
Total liabilities and partners’ capital | $ | 6,041,567 | $ | 6,919,785 |
Nine Months Ended | |||||||
September 30, | |||||||
2015 | 2016 | ||||||
Operating Activities: | |||||||
Net income | $ | 611,999 | $ | 589,480 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization expense | 124,180 | 134,137 | |||||
Loss on sale and retirement of assets | 4,378 | 5,397 | |||||
Earnings of non-controlled entities | (49,653 | ) | (51,543 | ) | |||
Distributions of earnings from investments in non-controlled entities | 47,236 | 50,047 | |||||
Equity-based incentive compensation expense | 15,226 | 14,737 | |||||
Settlement cost, amortization of prior service credit and actuarial loss | 2,609 | 1,427 | |||||
Gain on exchange of interest in non-controlled entity | — | (28,144 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Trade accounts receivable and other accounts receivable | (24,601 | ) | (49,014 | ) | |||
Inventory | 22,581 | 7,857 | |||||
Energy commodity derivatives contracts, net of derivatives deposits | (11,402 | ) | 637 | ||||
Accounts payable | 12,226 | 5,850 | |||||
Accrued payroll and benefits | 452 | (12,725 | ) | ||||
Accrued interest payable | (841 | ) | (2,393 | ) | |||
Accrued taxes other than income | 6,334 | 2,115 | |||||
Accrued product purchases | (23,947 | ) | (6,183 | ) | |||
Deferred revenue | 4,141 | 17,191 | |||||
Current and noncurrent environmental liabilities | (4,864 | ) | (5,649 | ) | |||
Other current and noncurrent assets and liabilities | (11,950 | ) | (34,229 | ) | |||
Net cash provided by operating activities | 724,104 | 638,995 | |||||
Investing Activities: | |||||||
Additions to property, plant and equipment, net(1) | (431,260 | ) | (517,810 | ) | |||
Proceeds from sale and disposition of assets | 3,178 | 6,098 | |||||
Acquisition of business | (54,678 | ) | — | ||||
Investments in non-controlled entities | (133,373 | ) | (174,900 | ) | |||
Distributions in excess of earnings of non-controlled entities | 9,341 | 4,500 | |||||
Net cash used by investing activities | (606,792 | ) | (682,112 | ) | |||
Financing Activities: | |||||||
Distributions paid | (489,535 | ) | (548,388 | ) | |||
Net commercial paper repayments | (69,976 | ) | (244,963 | ) | |||
Borrowings under long-term notes | 499,589 | 1,142,997 | |||||
Debt placement costs | (4,754 | ) | (10,500 | ) | |||
Net payment on financial derivatives | (42,908 | ) | (19,287 | ) | |||
Settlement of tax withholdings on long-term incentive compensation | (17,784 | ) | (14,376 | ) | |||
Net cash provided (used) by financing activities | (125,368 | ) | 305,483 | ||||
Change in cash and cash equivalents | (8,056 | ) | 262,366 | ||||
Cash and cash equivalents at beginning of period | 17,063 | 28,731 | |||||
Cash and cash equivalents at end of period | $ | 9,007 | $ | 291,097 | |||
Supplemental non-cash investing and financing activities: | |||||||
Contribution of property, plant and equipment to a non-controlled entity | $ | 13,252 | $ | — | |||
Issuance of limited partner units in settlement of equity-based incentive plan awards | $ | 8,045 | $ | 7,092 | |||
(1) Additions to property, plant and equipment | $ | (439,721 | ) | $ | (514,205 | ) | |
Changes in accounts payable and other current liabilities related to capital expenditures | 8,461 | (3,605 | ) | ||||
Additions to property, plant and equipment, net | $ | (431,260 | ) | $ | (517,810 | ) |
1. | Organization, Description of Business and Basis of Presentation |
• | our refined products segment, comprised of our 9,700-mile refined products pipeline system with 53 terminals as well as 26 independent terminals not connected to our pipeline system and our 1,100-mile ammonia pipeline system; |
• | our crude oil segment, comprised of approximately 2,100 miles of crude oil pipelines and storage facilities with an aggregate storage capacity of approximately 23 million barrels, of which approximately 15 million barrels are used for leased storage; and |
• | our marine storage segment, consisting of five marine terminals located along coastal waterways with an aggregate storage capacity of approximately 26 million barrels. |
• | refined products are the output from refineries and are primarily used as fuels by consumers. Refined products include gasoline, diesel fuel, aviation fuel, kerosene and heating oil. Collectively, diesel fuel and heating oil are referred to as distillates; |
• | liquefied petroleum gases, or LPGs, are produced as by-products of the crude oil refining process and in connection with natural gas production. LPGs include butane and propane; |
• | blendstocks are blended with refined products to change or enhance their characteristics such as increasing a gasoline’s octane or oxygen content. Blendstocks include alkylates, oxygenates and natural gasoline; |
• | heavy oils and feedstocks are used as burner fuels or feedstocks for further processing by refineries and petrochemical facilities. Heavy oils and feedstocks include No. 6 fuel oil and vacuum gas oil; |
• | crude oil and condensate are used as feedstocks by refineries and petrochemical facilities; |
• | biofuels, such as ethanol and biodiesel, are increasingly required by government mandates; and |
• | ammonia is primarily used as a nitrogen fertilizer. |
2. | Product Sales Revenue |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2016 | 2015 | 2016 | ||||||||||||
Physical sale of petroleum products | $ | 100,829 | $ | 146,006 | $ | 403,395 | $ | 412,045 | |||||||
Change in value of NYMEX contracts | 71,902 | (12,650 | ) | 52,432 | (8,438 | ) | |||||||||
Total product sales revenue | $ | 172,731 | $ | 133,356 | $ | 455,827 | $ | 403,607 |
3. | Segment Disclosures |
Three Months Ended September 30, 2015 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Refined Products | Crude Oil | Marine Storage | Intersegment Eliminations | Total | |||||||||||||||
Transportation and terminals revenue | $ | 264,156 | $ | 101,122 | $ | 45,109 | $ | — | $ | 410,387 | |||||||||
Product sales revenue | 171,775 | — | 956 | — | 172,731 | ||||||||||||||
Affiliate management fee revenue | — | 3,211 | 346 | — | 3,557 | ||||||||||||||
Total revenue | 435,931 | 104,333 | 46,411 | — | 586,675 | ||||||||||||||
Operating expenses | 108,972 | 24,572 | 14,700 | (895 | ) | 147,349 | |||||||||||||
Cost of product sales | 85,341 | — | 181 | — | 85,522 | ||||||||||||||
Losses (earnings) of non-controlled entities | 48 | (14,906 | ) | (663 | ) | — | (15,521 | ) | |||||||||||
Operating margin | 241,570 | 94,667 | 32,193 | 895 | 369,325 | ||||||||||||||
Depreciation and amortization expense | 24,333 | 9,502 | 7,313 | 895 | 42,043 | ||||||||||||||
G&A expenses | 22,238 | 9,818 | 5,556 | — | 37,612 | ||||||||||||||
Operating profit | $ | 194,999 | $ | 75,347 | $ | 19,324 | $ | — | $ | 289,670 |
Three Months Ended September 30, 2016 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Refined Products | Crude Oil | Marine Storage | Intersegment Eliminations | Total | |||||||||||||||
Transportation and terminals revenue | $ | 267,339 | $ | 100,113 | $ | 46,182 | $ | (201 | ) | $ | 413,433 | ||||||||
Product sales revenue | 105,834 | 24,750 | 2,772 | — | 133,356 | ||||||||||||||
Affiliate management fee revenue | 218 | 4,416 | 359 | — | 4,993 | ||||||||||||||
Total revenue | 373,391 | 129,279 | 49,313 | (201 | ) | 551,782 | |||||||||||||
Operating expenses | 95,776 | 24,628 | 16,374 | (1,492 | ) | 135,286 | |||||||||||||
Cost of product sales | 93,761 | 24,108 | 373 | — | 118,242 | ||||||||||||||
Losses (earnings) of non-controlled entities | 272 | (18,180 | ) | (668 | ) | — | (18,576 | ) | |||||||||||
Operating margin | 183,582 | 98,723 | 33,234 | 1,291 | 316,830 | ||||||||||||||
Depreciation and amortization expense | 28,432 | 9,333 | 8,025 | 1,291 | 47,081 | ||||||||||||||
G&A expenses | 22,993 | 8,493 | 4,314 | — | 35,800 | ||||||||||||||
Operating profit | $ | 132,157 | $ | 80,897 | $ | 20,895 | $ | — | $ | 233,949 |
Nine Months Ended September 30, 2015 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Refined Products | Crude Oil | Marine Storage | Intersegment Eliminations | Total | |||||||||||||||
Transportation and terminals revenue | $ | 723,156 | $ | 294,023 | $ | 131,921 | $ | — | $ | 1,149,100 | |||||||||
Product sales revenue | 453,737 | — | 2,090 | — | 455,827 | ||||||||||||||
Affiliate management fee revenue | — | 9,449 | 1,029 | — | 10,478 | ||||||||||||||
Total revenue | 1,176,893 | 303,472 | 135,040 | — | 1,615,405 | ||||||||||||||
Operating expenses | 288,265 | 65,032 | 45,916 | (2,839 | ) | 396,374 | |||||||||||||
Cost of product sales | 315,301 | — | 907 | — | 316,208 | ||||||||||||||
Losses (earnings) of non-controlled entities | 146 | (47,735 | ) | (2,064 | ) | — | (49,653 | ) | |||||||||||
Operating margin | 573,181 | 286,175 | 90,281 | 2,839 | 952,476 | ||||||||||||||
Depreciation and amortization expense | 71,742 | 25,995 | 23,604 | 2,839 | 124,180 | ||||||||||||||
G&A expenses | 68,730 | 26,935 | 15,387 | — | 111,052 | ||||||||||||||
Operating profit | $ | 432,709 | $ | 233,245 | $ | 51,290 | $ | — | $ | 717,244 | |||||||||
Nine Months Ended September 30, 2016 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Refined Products | Crude Oil | Marine Storage | Intersegment Eliminations | Total | |||||||||||||||
Transportation and terminals revenue | $ | 739,931 | $ | 303,181 | $ | 132,837 | $ | (201 | ) | $ | 1,175,748 | ||||||||
Product sales revenue | 372,061 | 26,465 | 5,081 | — | 403,607 | ||||||||||||||
Affiliate management fee revenue | 422 | 9,686 | 1,032 | — | 11,140 | ||||||||||||||
Total revenue | 1,112,414 | 339,332 | 138,950 | (201 | ) | 1,590,495 | |||||||||||||
Operating expenses | 280,261 | 66,370 | 49,897 | (3,847 | ) | 392,681 | |||||||||||||
Cost of product sales | 300,009 | 26,469 | 1,052 | — | 327,530 | ||||||||||||||
Losses (earnings) of non-controlled entities | 352 | (49,870 | ) | (2,025 | ) | — | (51,543 | ) | |||||||||||
Operating margin | 531,792 | 296,363 | 90,026 | 3,646 | 921,827 | ||||||||||||||
Depreciation and amortization expense | 78,523 | 28,264 | 23,704 | 3,646 | 134,137 | ||||||||||||||
G&A expenses | 68,852 | 27,419 | 14,945 | — | 111,216 | ||||||||||||||
Operating profit | $ | 384,417 | $ | 240,680 | $ | 51,377 | $ | — | $ | 676,474 | |||||||||
4. | Investments in Non-Controlled Entities |
Entity | Ownership Interest | |
BridgeTex Pipeline Company, LLC (“BridgeTex”) | 50% | |
Double Eagle Pipeline LLC (“Double Eagle”) | 50% | |
HoustonLink Pipeline Company, LLC (“HoustonLink”) | 50% | |
Powder Springs Logistics, LLC (“Powder Springs”) | 50% | |
Saddlehorn Pipeline Company, LLC (“Saddlehorn”) | 40% | |
Seabrook Logistics, LLC (“Seabrook”) | 50% | |
Texas Frontera, LLC (“Texas Frontera”) | 50% |
BridgeTex | All Others | Consolidated | ||||||||||
Investments at December 31, 2015 | $ | 495,267 | $ | 270,361 | $ | 765,628 | ||||||
Additional investment | 31,503 | 143,397 | 174,900 | |||||||||
Exchange of investment in non-controlled entity | — | (25,105 | ) | (25,105 | ) | |||||||
Earnings of non-controlled entities: | ||||||||||||
Proportionate share of earnings | 45,990 | 7,256 | 53,246 | |||||||||
Amortization of excess investment and capitalized interest | (1,529 | ) | (174 | ) | (1,703 | ) | ||||||
Earnings of non-controlled entities | 44,461 | 7,082 | 51,543 | |||||||||
Less: | ||||||||||||
Distributions of earnings from investments in non-controlled entities | 44,461 | 5,586 | 50,047 | |||||||||
Distributions in excess of earnings of non-controlled entities | 3,333 | 1,167 | 4,500 | |||||||||
Investments at September 30, 2016 | $ | 523,437 | $ | 388,982 | $ | 912,419 | ||||||
Three Months Ended September 30, 2015 | Three Months Ended September 30, 2016 | |||||||||||||||||||||||
BridgeTex | All Others | Consolidated | BridgeTex | All Others | Consolidated | |||||||||||||||||||
Revenue | $ | 47,555 | $ | 12,530 | $ | 60,085 | $ | 55,843 | $ | 14,022 | $ | 69,865 | ||||||||||||
Net income | $ | 28,150 | $ | 4,151 | $ | 32,301 | $ | 33,514 | $ | 5,149 | $ | 38,663 |
Nine Months Ended September 30, 2015 | Nine Months Ended September 30, 2016 | |||||||||||||||||||||||
BridgeTex | All Others | Consolidated | BridgeTex | All Others | Consolidated | |||||||||||||||||||
Revenue | $ | 146,320 | $ | 33,677 | $ | 179,997 | $ | 155,067 | $ | 35,451 | $ | 190,518 | ||||||||||||
Net income | $ | 91,806 | $ | 11,525 | $ | 103,331 | $ | 91,981 | $ | 14,907 | $ | 106,888 | ||||||||||||
5. | Inventory |
December 31, 2015 | September 30, 2016 | ||||||
Refined products | $ | 57,455 | $ | 23,028 | |||
Crude oil | 28,385 | 20,475 | |||||
Transmix | 21,297 | 33,108 | |||||
Liquefied petroleum gases | 17,954 | 40,684 | |||||
Additives | 5,777 | 5,716 | |||||
Total inventory | $ | 130,868 | $ | 123,011 |
6. | Employee Benefit Plans |
Three Months Ended | Three Months Ended | ||||||||||||||
September 30, 2015 | September 30, 2016 | ||||||||||||||
Pension Benefits | Other Postretirement Benefits | Pension Benefits | Other Postretirement Benefits | ||||||||||||
Components of net periodic benefit costs: | |||||||||||||||
Service cost | $ | 4,723 | $ | 61 | $ | 4,555 | $ | 53 | |||||||
Interest cost | 1,938 | 109 | 1,992 | 148 | |||||||||||
Expected return on plan assets | (2,009 | ) | — | (2,235 | ) | — | |||||||||
Amortization of prior service credit | — | (928 | ) | (45 | ) | (928 | ) | ||||||||
Amortization of actuarial loss | 1,577 | 221 | 1,161 | 291 | |||||||||||
Settlement cost | — | — | 202 | — | |||||||||||
Net periodic benefit cost (credit) | $ | 6,229 | $ | (537 | ) | $ | 5,630 | $ | (436 | ) |
Nine Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2015 | September 30, 2016 | ||||||||||||||
Pension Benefits | Other Postretirement Benefits | Pension Benefits | Other Postretirement Benefits | ||||||||||||
Components of net periodic benefit costs: | |||||||||||||||
Service cost | $ | 14,168 | $ | 183 | $ | 13,648 | $ | 176 | |||||||
Interest cost | 5,815 | 328 | 5,970 | 368 | |||||||||||
Expected return on plan assets | (6,028 | ) | — | (6,694 | ) | — | |||||||||
Amortization of prior service credit | — | (2,784 | ) | (135 | ) | (2,785 | ) | ||||||||
Amortization of actuarial loss | 4,730 | 663 | 3,485 | 660 | |||||||||||
Settlement cost | — | — | 202 | — | |||||||||||
Net periodic benefit cost (credit) | $ | 18,685 | $ | (1,610 | ) | $ | 16,476 | $ | (1,581 | ) | |||||
Three Months Ended | Three Months Ended | |||||||||||||||
September 30, 2015 | September 30, 2016 | |||||||||||||||
Gains (Losses) Included in AOCL | Pension Benefits | Other Postretirement Benefits | Pension Benefits | Other Postretirement Benefits | ||||||||||||
Beginning balance | $ | (60,104 | ) | $ | (3,110 | ) | $ | (60,045 | ) | $ | (5,433 | ) | ||||
Amortization of prior service credit | — | (928 | ) | (45 | ) | (928 | ) | |||||||||
Amortization of actuarial loss | 1,577 | 221 | 1,161 | 291 | ||||||||||||
Settlement cost | — | — | 202 | — | ||||||||||||
Ending balance | $ | (58,527 | ) | $ | (3,817 | ) | $ | (58,727 | ) | $ | (6,070 | ) |
Nine Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2015 | September 30, 2016 | |||||||||||||||
Gains (Losses) Included in AOCL | Pension Benefits | Other Postretirement Benefits | Pension Benefits | Other Postretirement Benefits | ||||||||||||
Beginning balance | $ | (63,257 | ) | $ | (1,696 | ) | $ | (62,279 | ) | $ | (3,945 | ) | ||||
Amortization of prior service credit | — | (2,784 | ) | (135 | ) | (2,785 | ) | |||||||||
Amortization of actuarial loss | 4,730 | 663 | 3,485 | 660 | ||||||||||||
Settlement cost | — | — | 202 | — | ||||||||||||
Ending balance | $ | (58,527 | ) | $ | (3,817 | ) | $ | (58,727 | ) | $ | (6,070 | ) | ||||
7. | Debt |
December 31, 2015 | September 30, 2016 | Weighted-Average Interest Rate for the Nine Months Ended September 30, 2016 (1) | ||||||||
Commercial paper(2) | $ | 279,801 | $ | 34,880 | 0.8% | |||||
$250.0 million of 5.65% Notes due 2016(3) | 250,208 | 250,020 | 5.7% | |||||||
$250.0 million of 6.40% Notes due 2018 | 254,694 | 253,298 | 5.5% | |||||||
$550.0 million of 6.55% Notes due 2019 | 562,600 | 560,042 | 5.7% | |||||||
$550.0 million of 4.25% Notes due 2021 | 553,002 | 552,620 | 4.1% | |||||||
$250.0 million of 3.20% Notes due 2025 | 247,788 | 247,967 | 3.2% | |||||||
$650.0 million of 5.00% Notes due 2026(2) | — | 644,129 | 5.1% | |||||||
$250.0 million of 6.40% Notes due 2037 | 247,230 | 247,312 | 6.4% | |||||||
$250.0 million of 4.20% Notes due 2042 | 246,142 | 246,230 | 4.3% | |||||||
$550.0 million of 5.15% Notes due 2043 | 550,819 | 550,885 | 5.1% | |||||||
$250.0 million of 4.20% Notes due 2045 | 247,338 | 247,408 | 4.7% | |||||||
$500.0 million of 4.25% Notes due 2046(2) | — | 488,731 | 4.8% | |||||||
Total debt | 3,439,622 | 4,323,522 | 4.9% | |||||||
Less: current portion of long-term debt, net | 250,335 | 250,020 | ||||||||
Long-term debt, net(4) | $ | 3,189,287 | $ | 4,073,502 | ||||||
(1) | Weighted-average interest rate includes the amortization/accretion of discounts, premiums and gains/losses realized on historical cash flow and fair value hedges recognized as interest expense. |
(2) | These borrowings were outstanding for only a portion of the nine-month period ending September 30, 2016. The weighted-average interest rate for these borrowings was calculated based on the number of days the borrowings were outstanding during the noted period. |
(3) | These borrowings will mature in October 2016 and are reflected in current debt on our consolidated balance sheets at December 31, 2015 and September 30, 2016. |
(4) | Long-term debt is presented net of unamortized debt issuance costs of $18.7 million and $27.4 million at December 31, 2015 and September 30, 2016, respectively. |
8. | Derivative Financial Instruments |
Hedge Category | Hedge Purpose | Accounting Treatment | ||
Qualifies For Hedge Accounting Treatment | ||||
Cash Flow Hedge | To hedge the variability in cash flows related to a forecasted transaction. | The effective portion of changes in the fair value of the hedge is recorded to accumulated other comprehensive income/loss and reclassified to earnings when the forecasted transaction occurs. Any ineffectiveness is recognized currently in earnings. | ||
Fair Value Hedge | To hedge against changes in the fair value of a recognized asset or liability. | The effective portion of changes in the fair value of the hedge is recorded as adjustments to the asset or liability being hedged. Any ineffectiveness and amounts excluded from the assessment of hedge effectiveness are recognized currently in earnings. | ||
Does Not Qualify For Hedge Accounting Treatment | ||||
Economic Hedge | To effectively serve as either a fair value or a cash flow hedge; however, the derivative agreement does not qualify for hedge accounting treatment under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging. | Changes in the fair value of these agreements are recognized currently in earnings. |
Type of Contract/Accounting Methodology | Product Represented by the Contract and Associated Barrels | Maturity Dates | ||
NYMEX - Fair Value Hedges | 0.7 million barrels of crude oil | November 2017 | ||
NYMEX - Economic Hedges | 5.1 million barrels of refined products and crude oil | Between October 2016 and April 2017 | ||
NYMEX - Economic Hedges | 1.3 million barrels of future purchases of butane | Between October 2016 and April 2017 |
December 31, 2015 | ||||||||||||||||||||
Description | Gross Amounts of Recognized Assets | Gross Amounts of Liabilities Offset in the Consolidated Balance Sheets | Net Amounts of Assets Presented in the Consolidated Balance Sheets(1) | Margin Deposit Amounts Not Offset in the Consolidated Balance Sheets | Net Asset Amount(3) | |||||||||||||||
Energy commodity derivatives | $ | 48,367 | $ | (5,646 | ) | $ | 42,721 | $ | (24,252 | ) | $ | 18,469 | ||||||||
September 30, 2016 | ||||||||||||||||||||
Description | Gross Amounts of Recognized Liabilities | Gross Amounts of Assets Offset in the Consolidated Balance Sheets | Net Amounts of Liabilities Presented in the Consolidated Balance Sheets(2) | Margin Deposit Amounts Not Offset in the Consolidated Balance Sheets | Net Asset Amount(3) | |||||||||||||||
Energy commodity derivatives | $ | (15,576 | ) | $ | 3,247 | $ | (12,329 | ) | $ | 30,559 | $ | 18,230 | ||||||||
(1) | Net amount includes energy commodity derivative contracts classified as current assets, net, of $39,243 and noncurrent assets of $3,478. |
(2) | Net amount includes energy commodity derivative contracts classified as current liabilities, net, of $12,430 and noncurrent assets of $101. |
(3) | Amount represents the maximum loss we would incur if all of our counterparties failed to perform on their derivative contracts. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
Derivative Losses Included in AOCL | 2015 | 2016 | 2015 | 2016 | |||||||||||
Beginning balance | $ | (29,528 | ) | $ | (50,459 | ) | $ | (16,587 | ) | $ | (30,126 | ) | |||
Net loss on cash flow hedges | (3,410 | ) | (3,169 | ) | (16,939 | ) | (24,278 | ) | |||||||
Reclassification of net loss on cash flow hedges to income | 388 | 512 | 976 | 1,288 | |||||||||||
Ending balance | $ | (32,550 | ) | $ | (53,116 | ) | $ | (32,550 | ) | $ | (53,116 | ) |
Three Months Ended September 30, 2015 | ||||||||||||||||||||
Amount of Loss Recognized in AOCL on Derivative | Location of Loss Reclassified from AOCL into Income | Amount of Loss Reclassified from AOCL into Income | ||||||||||||||||||
Derivative Instrument | Effective Portion | Ineffective Portion | ||||||||||||||||||
Interest rate contracts | $ | (3,410 | ) | Interest expense | $ | (388 | ) | $ | — |
Three Months Ended September 30, 2016 | ||||||||||||||||||||
Amount of Loss Recognized in AOCL on Derivative | Location of Loss Reclassified from AOCL into Income | Amount of Loss Reclassified from AOCL into Income | ||||||||||||||||||
Derivative Instrument | Effective Portion | Ineffective Portion | ||||||||||||||||||
Interest rate contracts | $ | (3,169 | ) | Interest expense | $ | (512 | ) | $ | — |
Nine Months Ended September 30, 2015 | ||||||||||||||||||||
Amount of Loss Recognized in AOCL on Derivative | Location of Loss Reclassified from AOCL into Income | Amount of Loss Reclassified from AOCL into Income | ||||||||||||||||||
Derivative Instrument | Effective Portion | Ineffective Portion | ||||||||||||||||||
Interest rate contracts | $ | (16,939 | ) | Interest expense | $ | (976 | ) | $ | — | |||||||||||
Nine Months Ended September 30, 2016 | ||||||||||||||||||||
Amount of Loss Recognized in AOCL on Derivative | Location of Loss Reclassified from AOCL into Income | Amount of Loss Reclassified from AOCL into Income | ||||||||||||||||||
Derivative Instrument | Effective Portion | Ineffective Portion | ||||||||||||||||||
Interest rate contracts | $ | (24,278 | ) | Interest expense | $ | (1,288 | ) | $ | — | |||||||||||
Amount of Gain (Loss) Recognized on Derivatives | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
Location of Gain (Loss) Recognized on Derivatives | September 30, | September 30, | ||||||||||||||||
Derivative Instrument | 2015 | 2016 | 2015 | 2016 | ||||||||||||||
NYMEX commodity contracts | Product sales revenue | $ | 71,902 | $ | (12,650 | ) | $ | 52,432 | $ | (8,438 | ) | |||||||
NYMEX commodity contracts | Operating expenses | 14,761 | 4,212 | 7,181 | (1,192 | ) | ||||||||||||
NYMEX commodity contracts | Cost of product sales | (3,767 | ) | 831 | (5,847 | ) | 3,643 | |||||||||||
Total | $ | 82,896 | $ | (7,607 | ) | $ | 53,766 | $ | (5,987 | ) |
December 31, 2015 | ||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||
Derivative Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
NYMEX commodity contracts | Energy commodity derivatives contracts, net | $ | 60 | Energy commodity derivatives contracts, net | $ | — | ||||||
NYMEX commodity contracts | Other noncurrent assets | 3,478 | Other noncurrent liabilities | — | ||||||||
Interest rate contracts | Other current assets | 2,179 | Other current liabilities | 653 | ||||||||
Total | $ | 5,717 | Total | $ | 653 |
September 30, 2016 | ||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||
Derivative Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
NYMEX commodity contracts | Other noncurrent assets | $ | 101 | Other noncurrent liabilities | $ | — | ||||||
Interest rate contracts | Other noncurrent assets | — | Other noncurrent liabilities | 3,465 | ||||||||
Total | $ | 101 | Total | $ | 3,465 |
December 31, 2015 | ||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||
Derivative Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
NYMEX commodity contracts | Energy commodity derivatives contracts, net | $ | 44,829 | Energy commodity derivatives contracts, net | $ | 5,646 | ||||||
September 30, 2016 | ||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||
Derivative Instrument | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
NYMEX commodity contracts | Energy commodity derivatives contracts, net | $ | 3,146 | Energy commodity derivatives contracts, net | $ | 15,576 |
9. | Commitments and Contingencies |
10. | Long-Term Incentive Plan |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2015 | September 30, 2015 | ||||||||||||||||||||||
Equity Method | Liability Method | Total | Equity Method | Liability Method | Total | ||||||||||||||||||
Performance-based awards: | |||||||||||||||||||||||
2013 awards | $ | 1,673 | $ | (590 | ) | $ | 1,083 | $ | 6,246 | $ | 501 | $ | 6,747 | ||||||||||
2014 awards | 1,497 | — | 1,497 | 3,980 | — | 3,980 | |||||||||||||||||
2015 awards | 1,727 | — | 1,727 | 3,687 | — | 3,687 | |||||||||||||||||
Time-based awards | 380 | — | 380 | 812 | — | 812 | |||||||||||||||||
Total | $ | 5,277 | $ | (590 | ) | $ | 4,687 | $ | 14,725 | $ | 501 | $ | 15,226 | ||||||||||
Allocation of LTIP expense on our consolidated statements of income: | |||||||||||||||||||||||
G&A expense | $ | 4,643 | $ | 15,016 | |||||||||||||||||||
Operating expense | 44 | 210 | |||||||||||||||||||||
Total | $ | 4,687 | $ | 15,226 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2016 | September 30, 2016 | ||||||||||||||||||||||
Equity Method | Liability Method | Total | Equity Method | Liability Method | Total | ||||||||||||||||||
Performance-based awards: | |||||||||||||||||||||||
2014 awards | $ | 1,780 | $ | — | $ | 1,780 | $ | 6,168 | $ | — | $ | 6,168 | |||||||||||
2015 awards | 1,208 | — | 1,208 | 3,679 | — | 3,679 | |||||||||||||||||
2016 awards | 1,097 | — | 1,097 | 3,240 | — | 3,240 | |||||||||||||||||
Time-based awards | 593 | — | 593 | 1,650 | — | 1,650 | |||||||||||||||||
Total | $ | 4,678 | $ | — | $ | 4,678 | $ | 14,737 | $ | — | $ | 14,737 | |||||||||||
Allocation of LTIP expense on our consolidated statements of income: | |||||||||||||||||||||||
G&A expense | $ | 4,637 | $ | 14,623 | |||||||||||||||||||
Operating expense | 41 | 114 | |||||||||||||||||||||
Total | $ | 4,678 | $ | 14,737 | |||||||||||||||||||
11. | Distributions |
Payment Date | Per Unit Cash Distribution Amount | Total Cash Distribution to Limited Partners | ||||||||||
02/13/2015 | $ | 0.6950 | $ | 158,061 | ||||||||
05/15/2015 | 0.7175 | 163,178 | ||||||||||
08/14/2015 | 0.7400 | 168,296 | ||||||||||
Through 09/30/2015 | 2.1525 | 489,535 | ||||||||||
11/13/2015 | 0.7625 | 173,413 | ||||||||||
Total | $ | 2.9150 | $ | 662,948 | ||||||||
2/12/2016 | $ | 0.7850 | $ | 178,808 | ||||||||
5/13/2016 | 0.8025 | 182,797 | ||||||||||
08/12/2016 | 0.8200 | 186,783 | ||||||||||
Through 09/30/2016 | 2.4075 | 548,388 | ||||||||||
11/14/2016(1) | 0.8375 | 190,769 | ||||||||||
Total | $ | 3.2450 | $ | 739,157 | ||||||||
12. | Fair Value |
• | Energy commodity derivatives contracts. These include NYMEX futures agreements related to petroleum products. These contracts are carried at fair value on our consolidated balance sheets and are valued based on quoted prices in active markets. See Note 8 – Derivative Financial Instruments for further disclosures regarding these contracts. |
• | Interest rate contracts. These include forward-starting interest rate swap agreements to hedge against the risk of variability of interest payments on future debt. These contracts are carried at fair value on our consolidated balance sheets and are valued based on an assumed exchange, at the end of each period, in an orderly transaction with a market participant in the market in which the financial instrument is traded. The exchange value was calculated using present value techniques on estimated future cash flows based on forward interest rate curves. See Note 8 – Derivative Financial Instruments for further disclosures regarding these contracts. |
• | Long-term receivables. These primarily include lease payments receivable under a direct-financing leasing arrangement and cost reimbursement payments receivable. These receivables were recorded at fair value on our consolidated balance sheets, using then-current market rates to estimate the present value of future cash flows. |
• | Debt. The fair value of our publicly traded notes was based on the prices of those notes at December 31, 2015 and September 30, 2016; however, where recent observable market trades were not available, prices were determined using adjustments to the last traded value for that debt issuance or by adjustments to the prices of similar debt instruments of peer entities that are actively traded. The carrying amount of borrowings, if any, under our revolving credit facility and our commercial paper program approximates fair value due to the frequent repricing of these obligations. |
December 31, 2015 | ||||||||||||||||||||
Assets (Liabilities) | Fair Value Measurements using: | |||||||||||||||||||
Carrying Amount | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||
Energy commodity derivatives contracts | $ | 42,721 | $ | 42,721 | $ | 42,721 | $ | — | $ | — | ||||||||||
Interest rate contracts | $ | 1,526 | $ | 1,526 | $ | — | $ | 1,526 | $ | — | ||||||||||
Long-term receivables | $ | 20,374 | $ | 20,374 | $ | — | $ | — | $ | 20,374 | ||||||||||
Debt | $ | (3,439,622 | ) | $ | (3,284,791 | ) | $ | — | $ | (3,284,791 | ) | $ | — |
September 30, 2016 | ||||||||||||||||||||
Assets (Liabilities) | Fair Value Measurements using: | |||||||||||||||||||
Carrying Amount | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||
Energy commodity derivatives contracts | $ | (12,329 | ) | $ | (12,329 | ) | $ | (12,329 | ) | $ | — | $ | — | |||||||
Interest rate contracts | $ | (3,465 | ) | $ | (3,465 | ) | $ | — | $ | (3,465 | ) | $ | — | |||||||
Long-term receivables | $ | 22,101 | $ | 22,101 | $ | — | $ | — | $ | 22,101 | ||||||||||
Debt | $ | (4,323,522 | ) | $ | (4,678,925 | ) | $ | — | $ | (4,678,925 | ) | $ | — |
13. | Related Party Transactions |
14. | Subsequent Events |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | our refined products segment, comprised of our 9,700-mile refined products pipeline system with 53 terminals as well as 26 independent terminals not connected to our pipeline system and our 1,100-mile ammonia pipeline system; |
• | our crude oil segment, comprised of approximately 2,100 miles of crude oil pipelines and storage facilities with an aggregate storage capacity of approximately 23 million barrels, of which approximately 15 million barrels are used for leased storage; and |
• | our marine storage segment, consisting of five marine terminals located along coastal waterways with an aggregate storage capacity of approximately 26 million barrels. |
Three Months Ended September 30, | Variance Favorable (Unfavorable) | ||||||||||||
2015 | 2016 | $ Change | % Change | ||||||||||
Financial Highlights ($ in millions, except operating statistics) | |||||||||||||
Transportation and terminals revenue: | |||||||||||||
Refined products | $ | 264.2 | $ | 267.3 | $ | 3.1 | 1 | ||||||
Crude oil | 101.2 | 100.1 | (1.1 | ) | (1) | ||||||||
Marine storage | 45.1 | 46.2 | 1.1 | 2 | |||||||||
Intersegment eliminations | — | (0.1 | ) | (0.1 | ) | n/a | |||||||
Total transportation and terminals revenue | 410.5 | 413.5 | 3.0 | 1 | |||||||||
Affiliate management fee revenue | 3.6 | 5.0 | 1.4 | 39 | |||||||||
Operating expenses: | |||||||||||||
Refined products | 109.0 | 95.8 | 13.2 | 12 | |||||||||
Crude oil | 24.5 | 24.7 | (0.2 | ) | (1) | ||||||||
Marine storage | 14.7 | 16.4 | (1.7 | ) | (12) | ||||||||
Intersegment eliminations | (0.8 | ) | (1.6 | ) | 0.8 | 100 | |||||||
Total operating expenses | 147.4 | 135.3 | 12.1 | 8 | |||||||||
Product margin: | |||||||||||||
Product sales revenue | 172.7 | 133.3 | (39.4 | ) | (23) | ||||||||
Cost of product sales | 85.5 | 118.2 | (32.7 | ) | (38) | ||||||||
Product margin(1) | 87.2 | 15.1 | (72.1 | ) | (83) | ||||||||
Earnings of non-controlled entities | 15.5 | 18.5 | 3.0 | 19 | |||||||||
Operating margin | 369.4 | 316.8 | (52.6 | ) | (14) | ||||||||
Depreciation and amortization expense | 42.1 | 47.0 | (4.9 | ) | (12) | ||||||||
G&A expense | 37.7 | 35.8 | 1.9 | 5 | |||||||||
Operating profit | 289.6 | 234.0 | (55.6 | ) | (19) | ||||||||
Interest expense (net of interest income and interest capitalized) | 36.1 | 42.0 | (5.9 | ) | (16) | ||||||||
Other expense (income) | 1.7 | (3.3 | ) | 5.0 | n/a | ||||||||
Income before provision for income taxes | 251.8 | 195.3 | (56.5 | ) | (22) | ||||||||
Provision for income taxes | 0.8 | 0.7 | 0.1 | 13 | |||||||||
Net income | $ | 251.0 | $ | 194.6 | $ | (56.4 | ) | (22) | |||||
Operating Statistics: | |||||||||||||
Refined products: | |||||||||||||
Transportation revenue per barrel shipped | $ | 1.476 | $ | 1.503 | |||||||||
Volume shipped (million barrels): | |||||||||||||
Gasoline | 73.9 | 72.7 | |||||||||||
Distillates | 38.8 | 37.3 | |||||||||||
Aviation fuel | 5.6 | 7.2 | |||||||||||
Liquefied petroleum gases | 3.5 | 4.1 | |||||||||||
Total volume shipped | 121.8 | 121.3 | |||||||||||
Crude oil: | |||||||||||||
Magellan 100%-owned assets: | |||||||||||||
Transportation revenue per barrel shipped | $ | 1.148 | $ | 1.189 | |||||||||
Volume shipped (million barrels) | 53.6 | 50.7 | |||||||||||
Crude oil terminal average utilization (million barrels per month) | 13.5 | 14.8 | |||||||||||
Select joint venture pipelines: | |||||||||||||
BridgeTex - volume shipped (million barrels)(2) | 18.5 | 20.6 | |||||||||||
Marine storage: | |||||||||||||
Marine terminal average utilization (million barrels per month) | 24.3 | 24.3 |
• | an increase in refined products revenue of $3.1 million primarily attributable to higher average tariff rates. The average rate per barrel in the current period was favorably impacted by the mid-year 2016 tariff adjustment, which was an approximate 2% average increase over all of our markets. Shipments decreased slightly in the current period primarily due to refinery turnarounds that favorably impacted demand on our system during third quarter 2015, partially offset by volumes from recent growth projects, including our Little Rock pipeline which commenced commercial operations in July 2016. Additionally, revenue from leased storage along our pipeline system increased due to new customer contracts; |
• | a decrease in crude oil revenue of $1.1 million primarily due to lower volumes on the Longhorn pipeline as shippers utilized historical credits (earned by shipping in excess of their minimum commitments in the past) that were set to expire in the third quarter of 2016. This decline was partially offset by higher revenue from leased storage primarily due to strong demand at our East Houston terminal; and |
• | an increase in marine storage revenue of $1.1 million primarily due to higher average rates from contract renewals and escalations in the current period. |
• | a decrease in refined products expenses of $13.2 million primarily due to lower asset integrity spending related to the timing of tank maintenance work, lower environmental accruals related to historical remediation sites, more favorable product overages in the current period (which reduce operating expenses) and lower asset retirements, partially offset by rental costs related to a pipeline segment we began leasing in third quarter 2016 in connection with our Little Rock pipeline; |
• | an increase in crude oil expenses of $0.2 million primarily due to higher personnel costs resulting from additional headcount, partially offset by lower power costs; and |
• | an increase in marine storage expenses of $1.7 million primarily due to higher asset integrity spending related to the timing of tank inspections and maintenance work. |
Nine Months Ended September 30, | Variance Favorable (Unfavorable) | ||||||||||||
2015 | 2016 | $ Change | % Change | ||||||||||
Financial Highlights ($ in millions, except operating statistics) | |||||||||||||
Transportation and terminals revenue: | |||||||||||||
Refined products | $ | 723.2 | $ | 739.9 | $ | 16.7 | 2 | ||||||
Crude oil | 294.1 | 303.2 | 9.1 | 3 | |||||||||
Marine storage | 131.9 | 132.8 | 0.9 | 1 | |||||||||
Intersegment eliminations | — | (0.1 | ) | (0.1 | ) | n/a | |||||||
Total transportation and terminals revenue | 1,149.2 | 1,175.8 | 26.6 | 2 | |||||||||
Affiliate management fee revenue | 10.5 | 11.1 | 0.6 | 6 | |||||||||
Operating expenses: | |||||||||||||
Refined products | 288.3 | 280.3 | 8.0 | 3 | |||||||||
Crude oil | 65.0 | 66.4 | (1.4 | ) | (2) | ||||||||
Marine storage | 45.9 | 49.9 | (4.0 | ) | (9) | ||||||||
Intersegment eliminations | (2.8 | ) | (3.9 | ) | 1.1 | 39 | |||||||
Total operating expenses | 396.4 | 392.7 | 3.7 | 1 | |||||||||
Product margin: | |||||||||||||
Product sales revenue | 455.8 | 403.6 | (52.2 | ) | (11) | ||||||||
Cost of product sales | 316.2 | 327.5 | (11.3 | ) | (4) | ||||||||
Product margin(1) | 139.6 | 76.1 | (63.5 | ) | (45) | ||||||||
Earnings of non-controlled entities | 49.6 | 51.5 | 1.9 | 4 | |||||||||
Operating margin | 952.5 | 921.8 | (30.7 | ) | (3) | ||||||||
Depreciation and amortization expense | 124.2 | 134.1 | (9.9 | ) | (8) | ||||||||
G&A expense | 111.1 | 111.2 | (0.1 | ) | — | ||||||||
Operating profit | 717.2 | 676.5 | (40.7 | ) | (6) | ||||||||
Interest expense (net of interest income and interest capitalized) | 108.0 | 120.4 | (12.4 | ) | (11) | ||||||||
Gain on exchange of interest in non-controlled entity | — | (28.1 | ) | 28.1 | n/a | ||||||||
Other income | (4.6 | ) | (7.6 | ) | 3.0 | 65 | |||||||
Income before provision for income taxes | 613.8 | 591.8 | (22.0 | ) | (4) | ||||||||
Provision for income taxes | 1.8 | 2.3 | (0.5 | ) | (28) | ||||||||
Net income | $ | 612.0 | $ | 589.5 | $ | (22.5 | ) | (4) | |||||
Operating Statistics: | |||||||||||||
Refined products: | |||||||||||||
Transportation revenue per barrel shipped | $ | 1.417 | $ | 1.451 | |||||||||
Volume shipped (million barrels): | |||||||||||||
Gasoline | 203.3 | 204.9 | |||||||||||
Distillates | 112.0 | 110.0 | |||||||||||
Aviation fuel | 16.1 | 19.6 | |||||||||||
Liquefied petroleum gases | 9.3 | 9.9 | |||||||||||
Total volume shipped | 340.7 | 344.4 | |||||||||||
Crude oil: | |||||||||||||
Magellan 100%-owned assets: | |||||||||||||
Transportation revenue per barrel shipped | $ | 1.104 | $ | 1.325 | |||||||||
Volume shipped (million barrels) | 157.4 | 139.5 | |||||||||||
Crude oil terminal average utilization (million barrels per month) | 13.0 | 14.7 | |||||||||||
Select joint venture pipelines: | |||||||||||||
BridgeTex - volume shipped (million barrels)(2) | 57.2 | 58.7 | |||||||||||
Marine storage: | |||||||||||||
Marine terminal average utilization (million barrels per month) | 24.1 | 23.6 |
• | an increase in refined products revenue of $16.7 million primarily attributable to higher average tariff rates and increased shipments. The average rate per barrel in the current period was favorably impacted by the mid-year 2015 tariff rate increase of 4.6% and the mid-year 2016 increase which averaged approximately 2% across all of our markets. Shipments increased 1% in the current period primarily associated with higher gasoline shipments, additional volumes from recent growth projects, including our Little Rock pipeline which commenced commercial operations in July 2016, and increased demand for aviation fuel. Additionally, revenue from leased storage along our pipeline system increased due to new customer contracts; |
• | an increase in crude oil revenue of $9.1 million primarily due to higher average rates and more shipments on our Longhorn pipeline system, as well as new leased storage contracts. Overall crude oil shipments declined and average rate per barrel increased due to fewer barrels moving on our lower-priced Houston distribution system tariff structure to their ultimate destination. Instead, customers utilized space available on our capacity lease for shipments from BridgeTex pipeline; and |
• | an increase in marine storage revenue of $0.9 million primarily due to higher average contract renewal rates, other escalations in the current period, and new contracts, partially offset by lower miscellaneous revenue due to lower customer activity. |
• | a decrease in refined products expenses of $8.0 million primarily due to lower asset integrity spending related to the timing of tank maintenance work, lower environmental costs and more favorable product gains (which reduce operating expenses), partially offset by more product handling costs related to the receipt of off-spec product during 2016 and higher asset retirements; |
• | an increase in crude oil expenses of $1.4 million primarily due to increased personnel costs, additional environmental accruals due to a product release in the current year and higher property taxes, partially offset by lower power costs and more favorable product overages (which reduce operating expenses); and |
• | an increase in marine storage expenses of $4.0 million primarily due to higher asset integrity spending related to the timing of tank maintenance work. |
Nine Months Ended September 30, | Increase (Decrease) | |||||||||||
2015 | 2016 | |||||||||||
Net income | $ | 612.0 | $ | 589.5 | $ | (22.5 | ) | |||||
Interest expense, net(1) | 108.0 | 120.4 | 12.4 | |||||||||
Depreciation and amortization | 124.2 | 134.1 | 9.9 | |||||||||
Equity-based incentive compensation(2) | (2.6 | ) | 0.4 | 3.0 | ||||||||
Loss on sale and retirement of assets | 4.4 | 5.4 | 1.0 | |||||||||
Gain on exchange of interest in non-controlled entity(3) | — | (28.1 | ) | (28.1 | ) | |||||||
Commodity-related adjustments: | ||||||||||||
Derivative (gains) losses recognized in the period associated with future product transactions(5) | (54.2 | ) | 10.1 | 64.3 | ||||||||
Derivative gains (losses) recognized in previous periods associated with product sales completed in the period(5) | 96.1 | 38.6 | (57.5 | ) | ||||||||
Lower-of-cost-or-market adjustments(6) | (38.7 | ) | (2.8 | ) | 35.9 | |||||||
Total commodity-related adjustments | 3.2 | 45.9 | 42.7 | |||||||||
Cash distributions received from non-controlled entities in excess of (less than) earnings for the period | 7.5 | 3.0 | (4.5 | ) | ||||||||
Other(4) | — | 3.9 | 3.9 | |||||||||
Adjusted EBITDA | 856.7 | 874.5 | 17.8 | |||||||||
Interest expense, net, excluding debt issuance cost amortization(1) | (106.0 | ) | (118.1 | ) | (12.1 | ) | ||||||
Maintenance capital(7) | (64.7 | ) | (86.1 | ) | (21.4 | ) | ||||||
DCF | $ | 686.0 | $ | 670.3 | $ | (15.7 | ) | |||||
(1) | In 2015, we adopted Accounting Standards Update (“ASU”) No. 2015-03, Interest: Simplifying the Presentation of Debt Issuance Costs. Under this new accounting standard, we have reclassified debt issuance cost amortization expense as interest expense. For the purposes of calculating DCF, we have excluded debt issuance cost amortization from interest expense of $1.9 million and $2.3 million for the nine months ended September 30, 2015 and 2016, respectively. |
(2) | Because we intend to satisfy vesting of units under our equity-based incentive compensation program with the issuance of limited partner units, expenses related to this program generally are deemed non-cash and added back for DCF purposes. Total equity-based incentive compensation expense for the nine months ended September 30, 2015 and 2016 was $15.2 million and $14.7 million, respectively. However, the figures above include an adjustment for minimum statutory tax withholdings we paid in 2015 and 2016 of $17.8 million and $14.4 million, respectively, for equity-based incentive compensation units that vested on the previous year end, which reduces DCF. |
(3) | In February 2016, we transferred our 50% membership interest in Osage to an affiliate of HollyFrontier Corporation (“HFC”). In conjunction with this transaction, we entered into several commercial agreements with affiliates of HFC, which we recorded as intangible assets and other receivables in our consolidated balance sheets. We recorded a $28.1 million non-cash gain in relation to this transaction. |
(4) | In conjunction with the February 2016 Osage transaction, HFC agreed to make certain payments to us until HFC completes a connection to our El Paso terminal. These payments replace distributions we would have received had the Osage transaction not occurred and are, therefore, included in our calculation of DCF. |
(5) | Certain derivatives we use as economic hedges have not been designated as hedges for accounting purposes and the mark-to-market changes of these derivatives are recognized currently in earnings. In addition, we have designated certain derivatives we use to hedge our crude oil tank bottoms as fair value hedges, and the change in the differential between the current spot price and forward price on these hedges is recognized currently in earnings. We exclude the net impact of both of these adjustments from our determination of DCF until the hedged products are physically sold. In the period in which these products are physically sold, the net impact of the associated hedges is included in our determination of DCF. |
(6) | We add the amount of lower-of-cost-or-market (“LCM”) adjustments on inventory and firm purchase commitments we recognize in each applicable period to determine DCF as these are non-cash charges against income. In subsequent periods when we physically sell or purchase the related products, we deduct the LCM adjustments previously recognized to determine DCF. |
(7) | Maintenance capital expenditure projects maintain our existing assets and do not generate incremental DCF (i.e. incremental returns to our unitholders). For this reason, we deduct maintenance capital expenditures to determine DCF. |
• | Maintenance capital expenditures. These expenditures include costs required to maintain equipment reliability and safety and to address environmental or other regulatory requirements rather than to generate incremental DCF; and |
• | Expansion capital expenditures. These expenditures are undertaken primarily to generate incremental DCF and include costs to acquire additional assets to grow our business and to expand or upgrade our existing facilities, which we refer to as organic growth projects. Organic growth projects include capital expenditures that increase storage or throughput volumes or develop pipeline connections to new supply sources. |
• | NYMEX contracts covering 0.7 million barrels of crude oil to hedge against future price changes of crude oil tank bottoms. These contracts, which we are accounting for as fair value hedges, mature November 2017. Through September 30, 2016, the cumulative amount of gains from these agreements was $17.6 million. The cumulative gains from these fair value hedges were recorded as adjustments to the asset being hedged, and there has been no ineffectiveness recognized for these hedges. We exclude the differential between the current spot price and forward price from our assessment of hedge effectiveness for these fair value hedges. The net change in the amounts excluded from our assessment of hedge effectiveness during the nine months ended September 30, 2016 was a gain of $4.5 million, which we recognized as other income on our consolidated statements of income. |
• | NYMEX contracts covering 4.7 million barrels of refined products and crude oil related to our butane blending, fractionation and certain crude oil inventory. These contracts mature between October 2016 and April 2017 and are being accounted for as economic hedges. Through September 30, 2016, the cumulative amount of net unrealized losses associated with these agreements was $13.6 million. We recorded these net losses as an adjustment to product sales revenue, of which $7.0 million of net gains was recognized in 2015 and $20.6 million of net losses was recognized in 2016. |
• | NYMEX contracts covering 0.4 million barrels of refined products and crude oil related to inventory we carry that resulted from pipeline product overages. These contracts, which mature between October and December 2016, are being accounted for as economic hedges. Through September 30, 2016, the cumulative amount of net unrealized losses associated with these agreements was $2.0 million. We recorded these losses as an adjustment to operating expense, all of which was recognized in 2016. |
• | NYMEX contracts covering 1.3 million barrels of butane purchases that mature between October 2016 and April 2017, which are being accounted for as economic hedges. Through September 30, 2016, the |
• | NYMEX contracts covering 7.9 million barrels of refined products and crude oil related to economic hedges of products from our butane blending, fractionation and certain crude oil inventory activities that we sold during 2016. We recognized a gain of $12.2 million in 2016 related to these contracts, which we recorded as an adjustment to product sales revenue. |
• | NYMEX contracts covering 7.8 million barrels of refined products and crude oil related to economic hedges of product inventories from product overages on our pipeline system that we sold during 2016. We recognized a gain of $0.8 million in 2016 on the settlement of these contracts, which we recorded as an adjustment to operating expense. |
• | NYMEX contracts covering 1.1 million barrels related to economic hedges of butane purchases we made during 2016 associated with our butane blending activities. We recognized a gain of $0.1 million in 2016 on the settlement of these contracts, which we recorded as an adjustment to cost of product sales. |
Nine Months Ended September 30, 2015 | |||||||||||||||||||
Product Sales Revenue | Cost of Product Sales | Operating Expense | Other Income | Net Impact on Net Income | |||||||||||||||
NYMEX gains (losses) recorded on open contracts during the period | $ | 0.2 | $ | (0.7 | ) | $ | 6.6 | $ | — | $ | 6.1 | ||||||||
NYMEX gains (losses) recognized on settled contracts during the period | 52.2 | (5.1 | ) | 0.6 | 4.6 | 52.3 | |||||||||||||
Net impact of NYMEX contracts | $ | 52.4 | $ | (5.8 | ) | $ | 7.2 | $ | 4.6 | $ | 58.4 |
Nine Months Ended September 30, 2016 | |||||||||||||||||||
Product Sales Revenue | Cost of Product Sales | Operating Expense | Other Income | Net Impact on Net Income | |||||||||||||||
NYMEX gains (losses) recorded on open contracts during the period | $ | (20.6 | ) | $ | 3.5 | $ | (2.0 | ) | $ | 4.5 | $ | (14.6 | ) | ||||||
NYMEX gains recognized on settled contracts during the period | 12.2 | 0.1 | 0.8 | — | 13.1 | ||||||||||||||
Net impact of NYMEX contracts | $ | (8.4 | ) | $ | 3.6 | $ | (1.2 | ) | $ | 4.5 | $ | (1.5 | ) |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Total | < 1 Year | 1 - 3 Years | |||||||||
Forward purchase contracts – notional value | $ | 178.1 | $ | 61.4 | $ | 116.7 | |||||
Forward purchase contracts – barrels | 5.3 | 1.8 | 3.5 | ||||||||
Forward sales contracts – notional value | $ | 83.3 | $ | 82.0 | $ | 1.3 | |||||
Forward sales contracts – barrels | 1.4 | 1.4 | — |
ITEM 4. | CONTROLS AND PROCEDURES |
• | overall demand for refined products, crude oil, liquefied petroleum gases and ammonia in the U.S.; |
• | price fluctuations for refined products, crude oil, liquefied petroleum gases and ammonia and expectations about future prices for these products; |
• | decreases in the production of crude oil in the basins served by our pipelines; |
• | changes in general economic conditions, interest rates and price levels; |
• | changes in the financial condition of our customers, vendors, derivatives counterparties, lenders or joint venture co-owners; |
• | our ability to secure financing in the credit and capital markets in amounts and on terms that will allow us to execute our growth strategy, refinance our existing obligations when due and maintain adequate liquidity; |
• | development of alternative energy sources, including but not limited to natural gas, solar power, wind power and geothermal energy, increased use of biofuels such as ethanol and biodiesel, increased conservation or fuel efficiency, as well as regulatory developments or other trends that could affect demand for our services; |
• | changes in the throughput or interruption in service of refined products or crude oil pipelines owned and operated by third parties and connected to our assets; |
• | changes in demand for storage in our refined products, crude oil or marine terminals; |
• | changes in supply and demand patterns for our facilities due to geopolitical events, the activities of the Organization of the Petroleum Exporting Countries, changes in U.S. trade policies or in laws governing the importing and exporting of petroleum products, technological developments or other factors; |
• | our ability to manage interest rate and commodity price exposures; |
• | changes in our tariff rates implemented by the Federal Energy Regulatory Commission, the U.S. Surface Transportation Board or state regulatory agencies; |
• | shut-downs or cutbacks at refineries, oil wells, petrochemical plants, ammonia production facilities or other customers or businesses that use or supply our services; |
• | the effect of weather patterns and other natural phenomena, including climate change, on our operations and demand for our services; |
• | an increase in the competition our operations encounter; |
• | the occurrence of natural disasters, terrorism, operational hazards, equipment failures, system failures or unforeseen interruptions; |
• | our ability to obtain adequate levels of insurance at a reasonable cost, and the potential for losses to exceed the insurance coverage we do obtain; |
• | the treatment of us as a corporation for federal or state income tax purposes or if we become subject to significant forms of other taxation or more aggressive enforcement or increased assessments under existing forms of taxation; |
• | our ability to identify expansion projects or to complete identified expansion projects on time and at projected costs; |
• | our ability to make and integrate accretive acquisitions and joint ventures and successfully execute our business strategy; |
• | uncertainty of estimates, including accruals and costs of environmental remediation; |
• | our ability to cooperate with and rely on our joint venture co-owners; |
• | actions by rating agencies concerning our credit ratings; |
• | our ability to timely obtain and maintain all necessary approvals, consents and permits required to operate our existing assets and to construct, acquire and operate any new or modified assets; |
• | our ability to promptly obtain all necessary services, materials, labor, supplies and rights-of-way required for construction of our growth projects, and to complete construction without significant delays, disputes or cost overruns; |
• | risks inherent in the use and security of information systems in our business and implementation of new software and hardware; |
• | changes in laws and regulations that govern product quality specifications or renewable fuel obligations that could impact our ability to produce gasoline volumes through our butane blending activities or that could require significant capital outlays for compliance; |
• | changes in laws and regulations to which we or our customers are or become subject, including tax withholding requirements, safety, security, employment, hydraulic fracturing, derivatives transactions, trade and environmental laws and regulations, including laws and regulations designed to address climate change; |
• | the cost and effects of legal and administrative claims and proceedings against us or our subsidiaries; |
• | the amount of our indebtedness, which could make us vulnerable to general adverse economic and industry conditions, limit our ability to borrow additional funds, place us at competitive disadvantages compared to our competitors that have less debt or have other adverse consequences; |
• | the effect of changes in accounting policies; |
• | the potential that our internal controls may not be adequate, weaknesses may be discovered or remediation of any identified weaknesses may not be successful; |
• | the ability of our customers, vendors, lenders, joint venture co-owners or other third parties to perform on their contractual obligations to us; |
• | petroleum product supply disruptions; |
• | global and domestic repercussions from terrorist activities, including cyber attacks, and the government’s response thereto; and |
• | other factors and uncertainties inherent in the transportation, storage and distribution of petroleum products and ammonia, and the operation, acquisition and construction of assets related to such activities. |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
Exhibit Number | Description | |
Exhibit 4.1* | — | Seventh Supplemental Indenture dated as of September 13, 2016, between Magellan Midstream Partners, L.P. and U.S. Bank National Association, as trustee (filed as Exhibit 4.2 to Form 8-K filed September 13, 2016). |
Exhibit 10.1* | — | First Amendment to 364-Day Credit Agreement, dated as of October 20, 2016, among Magellan Midstream Partners, L.P., as borrower, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto (filed as Exhibit 10.1 to Form 8-K filed October 20, 2016). |
Exhibit 12 | — | Ratio of earnings to fixed charges. |
Exhibit 31.1 | — | Certification of Michael N. Mears, principal executive officer. |
Exhibit 31.2 | — | Certification of Aaron L. Milford, principal financial officer. |
Exhibit 32.1 | — | Section 1350 Certification of Michael N. Mears, Chief Executive Officer. |
Exhibit 32.2 | — | Section 1350 Certification of Aaron L. Milford, Chief Financial Officer. |
Exhibit 101.INS | — | XBRL Instance Document. |
Exhibit 101.SCH | — | XBRL Taxonomy Extension Schema. |
Exhibit 101.CAL | — | XBRL Taxonomy Extension Calculation Linkbase. |
Exhibit 101.DEF | — | XBRL Taxonomy Extension Definition Linkbase. |
Exhibit 101.LAB | — | XBRL Taxonomy Extension Label Linkbase. |
Exhibit 101.PRE | — | XBRL Taxonomy Extension Presentation Linkbase. |
MAGELLAN MIDSTREAM PARTNERS, L.P. | ||
By: | Magellan GP, LLC, | |
its general partner | ||
/s/ Aaron L. Milford | ||
Aaron L. Milford | ||
Chief Financial Officer | ||
(Principal Accounting and Financial Officer) |
Exhibit Number | Description | |
Exhibit 4.1* | — | Seventh Supplemental Indenture dated as of September 13, 2016, between Magellan Midstream Partners, L.P. and U.S. Bank National Association, as trustee (filed as Exhibit 4.2 to Form 8-K filed September 13, 2016). |
Exhibit 10.1* | — | First Amendment to 364-Day Credit Agreement, dated as of October 20, 2016, among Magellan Midstream Partners, L.P., as borrower, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto (filed as Exhibit 10.1 to Form 8-K filed October 20, 2016). |
Exhibit 12 | — | Ratio of earnings to fixed charges. |
Exhibit 31.1 | — | Certification of Michael N. Mears, principal executive officer. |
Exhibit 31.2 | — | Certification of Aaron L. Milford, principal financial officer. |
Exhibit 32.1 | — | Section 1350 Certification of Michael N. Mears, Chief Executive Officer. |
Exhibit 32.2 | — | Section 1350 Certification of Aaron L. Milford, Chief Financial Officer. |
Exhibit 101.INS | — | XBRL Instance Document. |
Exhibit 101.SCH | — | XBRL Taxonomy Extension Schema. |
Exhibit 101.CAL | — | XBRL Taxonomy Extension Calculation Linkbase. |
Exhibit 101.DEF | — | XBRL Taxonomy Extension Definition Linkbase. |
Exhibit 101.LAB | — | XBRL Taxonomy Extension Label Linkbase. |
Exhibit 101.PRE | — | XBRL Taxonomy Extension Presentation Linkbase. |
Year Ended December 31, | Year-to-Date Period Ending September 30, 2016 | ||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | |||||||||||||||||||
EARNINGS: | |||||||||||||||||||||||
Income from continuing operations before income taxes, extraordinary gain (loss) and cumulative effect of change in accounting principle* | $ | 408,669 | $ | 435,331 | $ | 580,575 | $ | 824,745 | $ | 754,975 | $ | 540,231 | |||||||||||
Add: Fixed charges | 110,946 | 120,321 | 133,511 | 146,835 | 160,044 | 143,553 | |||||||||||||||||
Amortization of interest capitalized | 739 | 755 | 816 | 900 | 993 | 1,350 | |||||||||||||||||
Distributed income of equity investees | 5,598 | 7,793 | 3,274 | 3,086 | 66,285 | 50,047 | |||||||||||||||||
Less: Interest capitalized | (3,174 | ) | (6,195 | ) | (14,339 | ) | (22,803 | ) | (14,442 | ) | (21,143 | ) | |||||||||||
Total earnings | $ | 522,778 | $ | 558,005 | $ | 703,837 | $ | 952,763 | $ | 967,855 | $ | 714,038 | |||||||||||
FIXED CHARGES: | |||||||||||||||||||||||
Interest expense | $ | 110,700 | $ | 120,068 | $ | 132,887 | $ | 145,862 | $ | 158,895 | $ | 142,573 | |||||||||||
Rent expense representative of interest factor | 246 | 253 | 624 | 973 | 1,149 | 980 | |||||||||||||||||
Total fixed charges | $ | 110,946 | $ | 120,321 | $ | 133,511 | $ | 146,835 | $ | 160,044 | $ | 143,553 | |||||||||||
Ratio of earnings to fixed charges | 4.7 | 4.6 | 5.3 | 6.5 | 6.0 | 5.0 | |||||||||||||||||
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ending September 30, 2016 (this “report”) of Magellan Midstream Partners, L.P. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Michael N. Mears |
Michael N. Mears, principal executive officer |
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ending September 30, 2016 (this “report”) of Magellan Midstream Partners, L.P. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Aaron L. Milford |
Aaron L. Milford, principal financial and accounting officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. |
/s/ Michael N. Mears |
Michael N. Mears, Chief Executive Officer |
Date: November 2, 2016 |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. |
/s/ Aaron L. Milford |
Aaron L. Milford, Chief Financial Officer |
Date: November 2, 2016 |
Document And Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Nov. 01, 2016 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | MAGELLAN MIDSTREAM PARTNERS LP | |
Entity Central Index Key | 0001126975 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 227,783,916 |
Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
||||
Income Statement [Abstract] | |||||||
Transportation and terminals revenue | $ 413,433 | $ 410,387 | $ 1,175,748 | $ 1,149,100 | |||
Product sales revenue | 133,356 | 172,731 | 403,607 | 455,827 | |||
Affiliate management fee revenue | 4,993 | 3,557 | 11,140 | 10,478 | |||
Total revenue | 551,782 | 586,675 | 1,590,495 | 1,615,405 | |||
Costs and expenses: | |||||||
Operating | 135,286 | 147,349 | 392,681 | 396,374 | |||
Cost of product sales | 118,242 | 85,522 | 327,530 | 316,208 | |||
Depreciation and amortization | 47,081 | 42,043 | 134,137 | 124,180 | |||
General and administrative | 35,800 | 37,612 | 111,216 | 111,052 | |||
Total costs and expenses | 336,409 | 312,526 | 965,564 | 947,814 | |||
Earnings of non-controlled entities | 18,576 | 15,521 | 51,543 | 49,653 | |||
Operating profit | 233,949 | 289,670 | 676,474 | 717,244 | |||
Interest expense | 50,163 | 40,419 | 142,573 | 118,009 | |||
Interest income | (302) | (310) | (1,067) | (993) | |||
Interest capitalized | (7,877) | (3,984) | (21,143) | (9,037) | |||
Gain on exchange of interest in non-controlled entity | 0 | 0 | (28,144) | 0 | |||
Other expense (income) | (3,324) | 1,706 | (7,519) | (4,554) | |||
Income before provision for income taxes | 195,289 | 251,839 | 591,774 | 613,819 | |||
Provision for income taxes | 738 | 867 | 2,294 | 1,820 | |||
Net income | $ 194,551 | $ 250,972 | $ 589,480 | $ 611,999 | |||
Basic net income per limited partner unit | $ 0.85 | $ 1.10 | $ 2.59 | $ 2.69 | |||
Diluted net income per limited partner unit | $ 0.85 | $ 1.10 | $ 2.59 | $ 2.69 | |||
Weighted average number of limited partner units outstanding used for basic net income per unit calculation(1) | [1] | 227,960 | 227,580 | 227,913 | 227,540 | ||
Weighted average number of limited partner units outstanding used for diluted net income per unit calculation(1) | [1] | 227,999 | 227,945 | 227,947 | 227,702 | ||
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Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||
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Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Statement of Comprehensive Income [Abstract] | |||||||||
Net income | $ 194,551 | $ 250,972 | $ 589,480 | $ 611,999 | |||||
Other comprehensive income: | |||||||||
Net loss on cash flow hedges(1) | [1] | (3,169) | (3,410) | (24,278) | (16,939) | ||||
Reclassification of net loss on cash flow hedges to income(1) | [1] | 512 | 388 | 1,288 | 976 | ||||
Amortization of prior service credit(2) | [2] | (973) | (928) | (2,920) | (2,784) | ||||
Amortization of actuarial loss(2) | [2] | 1,452 | 1,798 | 4,145 | 5,393 | ||||
Settlement cost(2) | [2] | 202 | 0 | 202 | 0 | ||||
Total other comprehensive loss | (1,976) | (2,152) | (21,563) | (13,354) | |||||
Comprehensive income | $ 192,575 | $ 248,820 | $ 567,917 | $ 598,645 | |||||
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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
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Statement of Financial Position [Abstract] | ||
Other intangibles, accumulated amortization | $ 2,010 | $ 13,709 |
Limited partner unitholders, units outstanding | 227,783,916 | 227,427,247 |
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands |
9 Months Ended | |
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Sep. 30, 2016 |
Sep. 30, 2015 |
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Operating Activities: | ||
Net income | $ 589,480 | $ 611,999 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 134,137 | 124,180 |
Loss on sale and retirement of assets | 5,397 | 4,378 |
Earnings of non-controlled entities | (51,543) | (49,653) |
Distributions of earnings from investments in non-controlled entities | 50,047 | 47,236 |
Equity-based incentive compensation expense | 14,737 | 15,226 |
Settlement cost, amortization of prior service credit and actuarial loss | 1,427 | 2,609 |
Gain on exchange of interest in non-controlled entity | (28,144) | 0 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable and other accounts receivable | (49,014) | (24,601) |
Inventory | 7,857 | 22,581 |
Energy commodity derivatives contracts, net of derivatives deposits | 637 | (11,402) |
Accounts payable | 5,850 | 12,226 |
Accrued payroll and benefits | (12,725) | 452 |
Accrued interest payable | (2,393) | (841) |
Accrued taxes other than income | 2,115 | 6,334 |
Accrued product purchases | (6,183) | (23,947) |
Deferred revenue | 17,191 | 4,141 |
Current and noncurrent environmental liabilities | (5,649) | (4,864) |
Other current and noncurrent assets and liabilities | (34,229) | (11,950) |
Net cash provided by operating activities | 638,995 | 724,104 |
Investing Activities: | ||
Additions to property, plant and equipment, net(1) | (517,810) | (431,260) |
Proceeds from sale and disposition of assets | 6,098 | 3,178 |
Acquisition of business | 0 | (54,678) |
Investments in non-controlled entities | (174,900) | (133,373) |
Distributions in excess of earnings of non-controlled entities | 4,500 | 9,341 |
Net cash used by investing activities | (682,112) | (606,792) |
Financing Activities: | ||
Distributions paid | (548,388) | (489,535) |
Net commercial paper repayments | (244,963) | (69,976) |
Borrowings under long-term notes | 1,142,997 | 499,589 |
Debt placement costs | (10,500) | (4,754) |
Net payment on financial derivatives | (19,287) | (42,908) |
Settlement of tax withholdings on long-term incentive compensation | (14,376) | (17,784) |
Net cash provided (used) by financing activities | 305,483 | (125,368) |
Change in cash and cash equivalents | 262,366 | (8,056) |
Cash and cash equivalents at beginning of period | 28,731 | 17,063 |
Cash and cash equivalents at end of period | 291,097 | 9,007 |
Supplemental non-cash investing and financing activities: | ||
Contribution of property, plant and equipment to a non-controlled entity | 0 | 13,252 |
Issuance of limited partner units in settlement of equity-based incentive plan awards | 7,092 | 8,045 |
(1) Additions to property, plant and equipment | (514,205) | (439,721) |
Changes in accounts payable and other current liabilities related to capital expenditures | (3,605) | 8,461 |
Additions to property, plant and equipment, net | $ (517,810) | $ (431,260) |
Organization, Description of Business And Basis Of Presentation |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Organization, Description of Business and Basis of Presentation | Organization, Description of Business and Basis of Presentation Organization Unless indicated otherwise, the terms “our,” “we,” “us” and similar language refer to Magellan Midstream Partners, L.P. together with its subsidiaries. We are a Delaware limited partnership and our limited partner units are traded on the New York Stock Exchange under the ticker symbol “MMP.” Magellan GP, LLC, a wholly-owned Delaware limited liability company, serves as our general partner. Description of Business We are principally engaged in the transportation, storage and distribution of refined petroleum products and crude oil. As of September 30, 2016, our asset portfolio, including the assets of our joint ventures, consisted of:
Terminology common in our industry includes the following terms, which describe products that we transport, store and distribute through our pipelines and terminals:
Except for ammonia, we use the term petroleum products to describe any, or a combination, of the above-noted products. Basis of Presentation In the opinion of management, our accompanying consolidated financial statements which are unaudited, except for the consolidated balance sheet as of December 31, 2015, which is derived from our audited financial statements, include all normal and recurring adjustments necessary to present fairly our financial position as of September 30, 2016, the results of operations for the three and nine months ended September 30, 2015 and 2016 and cash flows for the nine months ended September 30, 2015 and 2016. The results of operations for the nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016 for several reasons. Profits from our butane blending activities are realized largely during the first and fourth quarters of each year. Additionally, gasoline demand, which drives transportation volumes and revenues on our pipeline systems, generally trends higher during the summer driving months. Further, the volatility of commodity prices impacts the profits from our commodity activities and, to a lesser extent, the volume of petroleum products we transport on our pipelines. Pursuant to the rules and regulations of the Securities and Exchange Commission, the financial statements in this report do not include all of the information and notes normally included with financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015. Use of Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities that exist at the date of our consolidated financial statements, as well as their impact on the reported amounts of revenue and expense during the reporting periods. Actual results could differ from those estimates. New Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which is part of the FASB’s initiative to simplify accounting standards. The guidance requires an entity to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur, and allows equity classification for awards where employees elect to withhold up to the maximum statutory tax rates in the applicable jurisdictions. The new standard also requires cash paid by employers when directly withholding shares for tax withholding purposes to be classified as a financing activity in the statement of cash flows. We elected to early adopt ASU 2016-09 during the first quarter of 2016, and this adoption did not have a material impact on our consolidated financial statements. In conjunction with our adoption of this new accounting standard, we have elected to account for equity-based compensation forfeitures as they occur. Additionally, and consistent with our prior accounting policy, we continue to show cash paid when directly withholding shares for tax withholding purposes as a financing activity in our statements of cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires lessees to recognize a right of use asset and lease liability on the balance sheet for all leases, with the exception of short-term leases. The new accounting model for lessors remains largely the same, although some changes have been made to align it with the new lessee model and the new revenue recognition guidance. This update also requires companies to include additional disclosures regarding their lessee and lessor agreements. Public companies are required to adopt the standard for financial reporting periods that start after December 15, 2018, although early adoption is permitted. We are currently in the process of evaluating the impact this new standard will have on our financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which eliminates the industry-specific guidance in U.S. GAAP and produces a single, principles-based method for companies to report revenue in their financial statements. This standard requires companies to make more estimates and use more judgment than under current guidance. In addition, all companies must compile more extensive footnote disclosures about how the revenue numbers were derived. This ASU requires full retrospective, modified retrospective or use of the cumulative effect method during the period of adoption. In July 2015, the FASB extended the effective date of this standard from January 1, 2017 to January 1, 2018. We are currently in the process of evaluating the impact this new standard will have on our financial statements. |
Product Sales Revenues |
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Product Sales Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Sales Revenues | Product Sales Revenue The amounts reported as product sales revenue on our consolidated statements of income include revenue from the physical sale of petroleum products and mark-to-market adjustments from New York Mercantile Exchange (“NYMEX”) contracts. See Note 8 – Derivative Financial Instruments for a discussion of our commodity hedging strategies and how our NYMEX contracts impact product sales revenue. All of the petroleum products inventory we physically sell associated with our butane blending and fractionation activities, as well as the barrels from product gains we obtain from our operations, are reported as product sales revenue on our consolidated statements of income. For the three and nine months ended September 30, 2015 and 2016, product sales revenue included the following (in thousands):
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Segment Disclosures |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Disclosures | Segment Disclosures Our reportable segments are strategic business units that offer different products and services. Our segments are managed separately as each segment requires different marketing strategies and business knowledge. Management evaluates performance based on segment operating margin, which includes revenue from affiliates and external customers, operating expenses, cost of product sales and earnings of non-controlled entities. We believe that investors benefit from having access to the same financial measures used by management. Operating margin, which is presented in the following tables, is an important measure used by management to evaluate the economic performance of our core operations. Operating margin is not a GAAP measure, but the components of operating margin are computed using amounts that are determined in accordance with GAAP. A reconciliation of operating margin to operating profit, which is its nearest comparable GAAP financial measure, is included in the tables below. Operating profit includes depreciation and amortization expense and general and administrative (“G&A”) expense that management does not consider when evaluating the core profitability of our separate operating segments.
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Investments in Non-Controlled Entities (Notes) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Non-Controlled Entities | Investments in Non-Controlled Entities Our investments in non-controlled entities at September 30, 2016 were comprised of:
In February 2016, we transferred our 50% membership interest in Osage Pipe Line Company, LLC (“Osage”) to an affiliate of HollyFrontier Corporation. In conjunction with this transaction, we entered into several commercial agreements with affiliates of HollyFrontier Corporation. We recorded these commercial agreements as $43.7 million of intangible assets and $8.3 million of other receivables in our consolidated balance sheets. The intangible assets will be amortized over the 20-year life of the contracts received. The total gain recorded in 2016 was $28.1 million. The management fees we have recognized from BridgeTex, Osage, Powder Springs, Saddlehorn and Texas Frontera are reported as affiliate management fee revenue on our consolidated statements of income. In addition, we receive reimbursement from certain of our joint ventures for costs incurred during construction, which we included as reductions to costs and expenses on our consolidated statements of income. These construction cost reimbursements totaled $1.2 million and $2.7 million during the three and nine months ended September 30, 2016, respectively. We recognized pipeline capacity lease revenue from BridgeTex of $8.9 million and $8.9 million for the three months ended September 30, 2015 and 2016, respectively, and $25.8 million and $26.6 million for the nine months ended September 30, 2015 and 2016, respectively, which we included in transportation and terminals revenue on our consolidated statements of income. We recognized throughput revenue from Double Eagle of $0.8 million and $0.9 million for the three months ended September 30, 2015 and 2016, respectively, and $2.6 million and $2.5 million for the nine months ended September 30, 2015 and 2016, respectively, which we included in transportation and terminals revenue on our consolidated statements of income. At December 31, 2015 and September 30, 2016, respectively, we recognized a $0.2 million and $0.3 million trade accounts receivable from Double Eagle. At September 30, 2016, we recognized $2.9 million, $1.4 million and $0.5 million of other receivables from Saddlehorn, BridgeTex and Powder Springs, respectively, related to the activities detailed above and miscellaneous cost reimbursements. These receivables are reported in our balance sheets as other accounts receivable. The financial results from Texas Frontera are included in our marine storage segment, the financial results from BridgeTex, Double Eagle, HoustonLink, Osage, Saddlehorn and Seabrook are included in our crude oil segment and the financial results from Powder Springs are included in our refined products segment, each as earnings/losses of non-controlled entities. A summary of our investments in non-controlled entities follows (in thousands):
Summarized financial information of our non-controlled entities for the three and nine months ended September 30, 2015 and 2016 follows (in thousands):
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Inventory |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventory Inventory at December 31, 2015 and September 30, 2016 was as follows (in thousands):
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Employee Benefit Plans |
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Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans We sponsor two pension plans for certain union employees and a pension plan primarily for non-union employees, a postretirement benefit plan for selected employees and a defined contribution plan. The following tables present our consolidated net periodic benefit costs related to the pension and postretirement benefit plans for the three and nine months ended September 30, 2015 and 2016 (in thousands):
Contributions estimated to be paid into the plans in 2016 are $26.0 million and $0.5 million for the pension and other postretirement benefit plans, respectively. We match our employees’ qualifying contributions to our defined contribution plan, resulting in expense to us. Expenses related to the defined contribution plan were $1.8 million and $2.4 million, respectively, for the three months ended September 30, 2015 and 2016 and $6.8 million and $7.8 million, respectively, for the nine months ended September 30, 2015 and 2016. Amounts Included in AOCL The changes in AOCL related to employee benefit plan assets and benefit obligations for the three and nine months ended September 30, 2015 and 2016 were as follows (in thousands):
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The carrying amount of our consolidated debt at December 31, 2015 and September 30, 2016 was as follows (in thousands, except as otherwise noted):
All of the instruments detailed in the table above are senior indebtedness. The face value of our debt at December 31, 2015 and September 30, 2016 was $3.4 billion and $4.3 billion, respectively. The difference between the face value and carrying value of our debt outstanding is the unamortized portion of terminated fair value hedges and the unamortized discounts and premiums on debt issuances. Realized gains and losses on fair value hedges and note discounts and premiums are being amortized or accreted to the applicable notes over the respective lives of those notes. 2016 Debt Offering In September 2016, we issued $500.0 million of our 4.25% notes due 2046 in an underwritten public offering. The notes were issued at 98.762% of par. Net proceeds from this offering were approximately $488.7 million, after underwriting discounts and offering expenses of $5.1 million. The net proceeds from this offering were used to repay our 5.65% senior notes when due in October 2016 and to repay borrowings outstanding under our commercial paper program. The remaining proceeds may be used for general partnership purposes, which may include capital expenditures. In February 2016, we issued $650.0 million of our 5.00% notes due 2026 in an underwritten public offering. The notes were issued at 99.875% of par. Net proceeds from this offering were approximately $643.8 million, after underwriting discounts and offering expenses of $5.4 million. The net proceeds from this offering were used to repay borrowings outstanding under our commercial paper program and for general partnership purposes, including expansion capital. Other Debt Revolving Credit Facilities. At September 30, 2016, the total borrowing capacity under our revolving credit facility with a maturity date of October 27, 2020 was $1.0 billion. Any borrowings outstanding under this facility are classified as long-term debt on our consolidated balance sheets. Borrowings under this facility are unsecured and bear interest at LIBOR plus a spread ranging from 1.000% to 1.625% based on our credit ratings. Additionally, an unused commitment fee is assessed at a rate between 0.100% and 0.275% depending on our credit ratings. The unused commitment fee was 0.125% at September 30, 2016. Borrowings under this facility may be used for general partnership purposes, including capital expenditures. As of December 31, 2015 and September 30, 2016, respectively, there were no borrowings outstanding under this facility, with $6.3 million obligated for letters of credit. Amounts obligated for letters of credit are not reflected as debt on our consolidated balance sheets, but decrease our borrowing capacity under this facility. At September 30, 2016, the total borrowing capacity under our 364-day credit facility was $250.0 million. The maturity date of this credit facility is October 25, 2016. See Note 14 – Subsequent Events for recent information about this credit facility. Any borrowings under this credit facility are classified as current debt on our consolidated balance sheets. Borrowings under this facility are unsecured and bear interest at LIBOR plus a spread ranging from 1.000% to 1.625% based on our credit ratings. Additionally, an unused commitment fee is assessed at a rate between 0.080% and 0.225% depending on our credit ratings. The unused commitment fee was 0.100% at September 30, 2016. Borrowings under this facility may be used for general partnership purposes, including capital expenditures. As of December 31, 2015 and September 30, 2016, respectively, there were no borrowings outstanding under this facility. Commercial Paper Program. The maturities of our commercial paper notes vary, but may not exceed 397 days from the date of issuance. The commercial paper notes are sold under customary terms in the commercial paper market and are issued at a discount from par, or alternatively, are sold at par and bear varying interest rates on a fixed or floating basis. The commercial paper we can issue is limited by the amounts available under our revolving credit facility up to an aggregate principal amount of $1.0 billion and is classified as long-term debt. |
Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments Interest Rate Derivatives We periodically enter into interest rate derivatives to hedge the fair value of our debt or interest on expected debt issuances, and we have historically designated these derivatives as cash flow or fair value hedges for accounting purposes. Adjustments resulting from discontinued hedges continue to be recognized in accordance with their historic hedging relationships. During 2016, we entered into $100.0 million of forward-starting interest rate swap agreements to hedge against the risk of variability of future interest payments on a portion of debt we anticipate issuing in 2018. The fair values of these contracts at September 30, 2016 were recorded on our balance sheets as an other noncurrent liability of $3.5 million, with the offset recorded to other comprehensive income. We account for these agreements as cash flow hedges. During 2015 and 2016, we entered into $250.0 million of forward-starting interest rate swap agreements to hedge against the risk of variability of future interest payments on a portion of debt we anticipated issuing in 2016. We accounted for these agreements as cash flow hedges. When we issued $500.0 million of 4.25% notes due 2046 in September 2016, we settled the associated interest rate swap agreements for a loss of $19.3 million. The loss was recorded to other comprehensive income and will be recognized into earnings as an adjustment to our periodic interest expense accruals over the first ten-year payment period of the associated notes. This loss was also reported as a net payment on financial derivatives in the financing activities of our consolidated statements of cash flows in 2016. Commodity Derivatives Hedging Strategies Our butane blending activities produce gasoline products, and we can reasonably estimate the timing and quantities of sales of these products. We use a combination of NYMEX and forward purchase and sale contracts to help manage commodity price changes, which is intended to mitigate the risk of decline in the product margin realized from our butane blending activities that we choose to hedge. Further, certain of our other commercial operations generate petroleum products. We use NYMEX contracts to hedge against future price changes for some of these commodities. We account for the forward physical purchase and sale contracts we use in our butane blending and fractionation activities as normal purchases and sales. Forward contracts that qualify for and are elected as normal purchases and sales are accounted for using traditional accrual accounting. The NYMEX contracts that we enter into fall into one of three hedge categories:
During the three and nine months ended September 30, 2015 and 2016, none of the commodity hedging contracts we entered into qualified for or were designated as cash flow hedges. Period changes in the fair value of NYMEX agreements that are accounted for as economic hedges (other than those economic hedges of our butane purchases and our pipeline product overages as discussed below), the effective portion of changes in the fair value of cash flow hedges that are reclassified from AOCL and any ineffectiveness associated with hedges related to our commodity activities are recognized currently in earnings as adjustments to product sales. We also use NYMEX contracts, which are not designated as hedges for accounting purposes, to hedge against changes in the price of butane we expect to purchase in the future. Period changes in the fair value of these agreements are recognized currently in earnings as adjustments to cost of product sales. We hold petroleum product inventories that we obtain from overages on our pipeline systems. We use NYMEX contracts that are not designated as hedges for accounting purposes to help manage price changes related to these inventory barrels. Period changes in the fair value of these agreements are recognized currently in earnings as adjustments to operating expense. Additionally, we hold crude oil barrels that we use for operational purposes, which we classify as a long-term asset on our consolidated balance sheets as tank bottoms. We use NYMEX contracts to hedge against changes in the price of these crude oil barrels. We record the effective portion of the gains or losses for those contracts that qualify as fair value hedges as adjustments to the assets being hedged and the ineffective portions as well as amounts excluded from the assessment of hedge effectiveness as adjustments to other income or expense. As outlined in the table below, our open NYMEX contracts at September 30, 2016 were as follows:
Energy Commodity Derivatives Contracts and Deposits Offsets At September 30, 2016, we had made margin deposits of $30.6 million for our NYMEX contracts with our counterparties, which were recorded as a current asset under energy commodity derivatives deposits on our consolidated balance sheets. We have the right to offset the combined fair values of our open NYMEX contracts against our margin deposits under a master netting arrangement for each counterparty; however, we have elected to present the combined fair values of our open NYMEX contracts separately from the related margin deposits on our consolidated balance sheets. Additionally, we have the right to offset the fair values of our NYMEX agreements together for each counterparty, which we have elected to do, and we report the combined net balances on our consolidated balance sheets. A schedule of the derivative amounts we have offset and the deposit amounts we could offset under a master netting arrangement are provided below as of December 31, 2015 and September 30, 2016 (in thousands):
Impact of Derivatives on Our Financial Statements Comprehensive Income The changes in derivative activity included in AOCL for the three and nine months ended September 30, 2015 and 2016 were as follows (in thousands):
Income Statements The following tables provide a summary of the effect on our consolidated statements of income for the three and nine months ended September 30, 2015 and 2016 of derivatives accounted for under ASC 815-30, Derivatives and Hedging—Cash Flow Hedges, that were designated as hedging instruments (in thousands):
As of September 30, 2016, the net loss estimated to be classified to interest expense over the next twelve months from AOCL is approximately $3.0 million. During 2015 and 2016, we had open NYMEX contracts on 0.7 million barrels of crude oil that were designated as fair value hedges. Because there was no ineffectiveness recognized on these hedges, the cumulative gains at December 31, 2015 and September 30, 2016 of $27.9 million and $17.6 million, respectively, from these agreements were offset by a cumulative decrease to tank bottoms. The differential between the current spot price and forward price is excluded from the assessment of hedge effectiveness for these fair value hedges. For the three months ended September 30, 2015 and 2016, we recognized a gain (loss) of $(1.7) million and $0.3 million, respectively, and for the nine months ended September 30, 2015 and 2016, we recognized a gain of $4.6 million and $4.5 million, respectively, for the amounts we excluded from the assessment of effectiveness of these fair value hedges, which we reported as other income/expense on our consolidated statements of income. The following table provides a summary of the effect on our consolidated statements of income for the three and nine months ended September 30, 2015 and 2016 of derivatives accounted for under ASC 815, Derivatives and Hedging, that were not designated as hedging instruments (in thousands):
The impact of the derivatives in the above table was reflected as cash from operations on our consolidated statements of cash flows. Balance Sheets The following tables provide a summary of the fair value of derivatives accounted for under ASC 815, Derivatives and Hedging, which are presented on a net basis in our consolidated balance sheets, that were designated as hedging instruments as of December 31, 2015 and September 30, 2016 (in thousands):
The following tables provide a summary of the fair value of derivatives accounted for under ASC 815, Derivatives and Hedging, which are presented on a net basis in our consolidated balance sheets, that were not designated as hedging instruments as of December 31, 2015 and September 30, 2016 (in thousands):
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Commitments And Contingencies |
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Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Environmental Liabilities Liabilities recognized for estimated environmental costs were $31.4 million and $25.8 million at December 31, 2015 and September 30, 2016, respectively. We have classified environmental liabilities as current or noncurrent based on management’s estimates regarding the timing of actual payments. Management estimates that expenditures associated with these environmental liabilities will be substantially paid over the next 9 years. Environmental expense recognized as a result of changes in our environmental liabilities are generally included in operating expenses on our consolidated statements of income. Environmental expenses were $1.3 million and $0.3 million for the three months ended September 30, 2015 and 2016, respectively, and $5.6 million and $4.6 million for the nine months ended September 30, 2015 and 2016, respectively. Environmental Receivables Receivables from insurance carriers and other third parties related to environmental matters were $2.6 million at December 31, 2015, of which $0.7 million and $1.9 million were recorded to other accounts receivable and long-term receivables, respectively, on our consolidated balance sheets. Receivables from insurance carriers and other third parties related to environmental matters were $2.0 million at September 30, 2016, of which $0.8 million and $1.2 million were recorded to other accounts receivable and long-term receivables, respectively, on our consolidated balance sheets. Other We are a party to various other claims, legal actions and complaints arising in the ordinary course of business, including without limitation those disclosed in Item 1, Legal Proceedings of Part II of this report on Form 10-Q. While the results cannot be predicted with certainty, management believes the ultimate resolution of these claims, legal actions and complaints after consideration of amounts accrued, insurance coverage or other indemnification arrangements will not have a material adverse effect on our results of operations, financial position or cash flows. See Note 14 – Subsequent Events for additional information about a recent event. |
Long-Term Incentive Plan |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Incentive Plan | Long-Term Incentive Plan We have a long-term incentive plan (“LTIP”) for certain of our employees and directors of our general partner. The LTIP primarily consists of phantom units and permits the grant of awards covering an aggregate payout of 11.9 million of our limited partner units. The compensation committee of our general partner’s board of directors administers our LTIP. The estimated units remaining available under the LTIP at September 30, 2016 total 3.0 million. Our equity-based incentive compensation expense (benefit) was as follows (in thousands):
In February 2016, 218,046 phantom unit awards were issued pursuant to our LTIP. These grants included both performance-based and time-based phantom unit awards and have a three-year vesting period that will end on December 31, 2018. In February 2016, we issued 350,552 limited partner units to settle unit award grants to certain employees that vested on December 31, 2015. Further, 6,117 limited partner units were issued during 2016 to settle the equity-based retainers paid to the directors of our general partner. Basic and Diluted Net Income Per Limited Partner Unit The difference between our actual limited partner units outstanding and our weighted-average number of limited partner units outstanding used to calculate basic net income per unit is due to the impact of: (i) the phantom units issued to non-employee directors and (ii) the weighted average effect of units actually issued during a period. The difference between the weighted-average number of limited partner units outstanding used for basic and diluted net income per unit calculations on our consolidated statements of income is primarily the dilutive effect of phantom unit grants associated with our LTIP that have not yet vested. |
Distributions |
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Distributions Made to Members or Limited Partners [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions | Distributions Distributions we paid during 2015 and 2016 were as follows (in thousands, except per unit amounts):
(1) Our general partner’s board of directors declared this cash distribution in October 2016 to be paid on November 14, 2016 to unitholders of record at the close of business on October 31, 2016. |
Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value Recurring Fair Value Methods and Assumptions - Financial Assets and Liabilities. We used the following methods and assumptions in estimating fair value of our financial assets and liabilities:
Fair Value Measurements - Financial Assets and Liabilities The following tables summarize the carrying amounts, fair values and recurring fair value measurements recorded or disclosed as of December 31, 2015 and September 30, 2016 based on the three levels established by ASC 820, Fair Value Measurements and Disclosures (in thousands):
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Related Party Transactions |
9 Months Ended |
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Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Barry R. Pearl is an independent member of our general partner’s board of directors and was also a director of the general partner of Targa Resources Partners, L.P. (“Targa”) through February 29, 2016. In the normal course of business, we purchase butane from subsidiaries of Targa. During Mr. Pearl’s tenure as a director of the general partner of Targa, we made purchases of butane from subsidiaries of Targa of $1.5 million and $14.3 million, respectively, for the three and nine month periods ending September 30, 2015, and $4.7 million for the period from January 1, 2016 through February 29, 2016. These purchases were based on the then-current index prices. We had recognized payables to Targa of $2.0 million at December 31, 2015. Stacy P. Methvin was elected as an independent member of our general partner’s board of directors on April 23, 2015 and is also a director of one of our customers. We received tariff revenue from this customer of $4.1 million and $6.7 million, respectively, for the three and nine month periods ending September 30, 2015 and $4.3 million and $12.0 million, respectively, for the three and nine month periods ended September 30, 2016. We recorded receivables of $1.3 million and $1.5 million from this customer at December 31, 2015 and September 30, 2016, respectively. The tariff revenue we recognized from this customer was in the normal course of business, with rates determined in accordance with published tariffs. See Note 4 – Investments in Non-Controlled Entities for a discussion of affiliate joint venture transactions we account for under the equity method. |
Subsequent Events |
9 Months Ended |
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Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Recognizable events No recognizable events occurred subsequent to September 30, 2016. Non-recognizable events Renewal of 364-Day Credit Facility. In October 2016, we renewed our 364-day credit facility (see Note 7 - Debt for a description of this facility). The new maturity date is October 19, 2017. All other terms remain the same. Anhydrous Ammonia Event. On October 17, 2016, we experienced a release of anhydrous ammonia on our ammonia pipeline system near Tekamah, Nebraska. The release resulted in a fatality and possible injuries. The National Transportation Safety Board is investigating the event. On October 21, 2016, the U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration (“PHMSA”) issued a Corrective Action Order to Magellan Ammonia Pipeline, L.P. related to the event, which, among other things, requires PHMSA’s approval prior to re-start of the affected pipeline segment. We are currently unable to estimate the full impact of this event. However, we believe the impact on our financial position and results of operations is not likely to be material as defined by the Securities and Exchange Commission. Cash Distribution. In October 2016, our general partner’s board of directors declared a quarterly distribution of $0.8375 per unit to be paid on November 14, 2016 to unitholders of record at the close of business on October 31, 2016. The total cash distributions expected to be paid under this declaration are approximately $190.8 million. |
Organization, Description of Business And Basis Of Presentation (Accounting Policies) (Policies) |
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Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which is part of the FASB’s initiative to simplify accounting standards. The guidance requires an entity to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur, and allows equity classification for awards where employees elect to withhold up to the maximum statutory tax rates in the applicable jurisdictions. The new standard also requires cash paid by employers when directly withholding shares for tax withholding purposes to be classified as a financing activity in the statement of cash flows. We elected to early adopt ASU 2016-09 during the first quarter of 2016, and this adoption did not have a material impact on our consolidated financial statements. In conjunction with our adoption of this new accounting standard, we have elected to account for equity-based compensation forfeitures as they occur. Additionally, and consistent with our prior accounting policy, we continue to show cash paid when directly withholding shares for tax withholding purposes as a financing activity in our statements of cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires lessees to recognize a right of use asset and lease liability on the balance sheet for all leases, with the exception of short-term leases. The new accounting model for lessors remains largely the same, although some changes have been made to align it with the new lessee model and the new revenue recognition guidance. This update also requires companies to include additional disclosures regarding their lessee and lessor agreements. Public companies are required to adopt the standard for financial reporting periods that start after December 15, 2018, although early adoption is permitted. We are currently in the process of evaluating the impact this new standard will have on our financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which eliminates the industry-specific guidance in U.S. GAAP and produces a single, principles-based method for companies to report revenue in their financial statements. This standard requires companies to make more estimates and use more judgment than under current guidance. In addition, all companies must compile more extensive footnote disclosures about how the revenue numbers were derived. This ASU requires full retrospective, modified retrospective or use of the cumulative effect method during the period of adoption. In July 2015, the FASB extended the effective date of this standard from January 1, 2017 to January 1, 2018. We are currently in the process of evaluating the impact this new standard will have on our financial statements. |
Product Sales Revenues (Tables) |
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Product Sales Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Product Sales Revenues | For the three and nine months ended September 30, 2015 and 2016, product sales revenue included the following (in thousands):
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Segment Disclosures (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Segment Reporting Information |
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Investments in Non-Controlled Entities (Tables) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments | Our investments in non-controlled entities at September 30, 2016 were comprised of:
In February 2016, we transferred our 50% membership interest in Osage Pipe Line Company, LLC (“Osage”) to an affiliate of HollyFrontier Corporation. In conjunction with this transaction, we entered into several commercial agreements with affiliates of HollyFrontier Corporation. We recorded these commercial agreements as $43.7 million of intangible assets and $8.3 million of other receivables in our consolidated balance sheets. The intangible assets will be amortized over the 20-year life of the contracts received. The total gain recorded in 2016 was $28.1 million. The management fees we have recognized from BridgeTex, Osage, Powder Springs, Saddlehorn and Texas Frontera are reported as affiliate management fee revenue on our consolidated statements of income. In addition, we receive reimbursement from certain of our joint ventures for costs incurred during construction, which we included as reductions to costs and expenses on our consolidated statements of income. These construction cost reimbursements totaled $1.2 million and $2.7 million during the three and nine months ended September 30, 2016, respectively. We recognized pipeline capacity lease revenue from BridgeTex of $8.9 million and $8.9 million for the three months ended September 30, 2015 and 2016, respectively, and $25.8 million and $26.6 million for the nine months ended September 30, 2015 and 2016, respectively, which we included in transportation and terminals revenue on our consolidated statements of income. We recognized throughput revenue from Double Eagle of $0.8 million and $0.9 million for the three months ended September 30, 2015 and 2016, respectively, and $2.6 million and $2.5 million for the nine months ended September 30, 2015 and 2016, respectively, which we included in transportation and terminals revenue on our consolidated statements of income. At December 31, 2015 and September 30, 2016, respectively, we recognized a $0.2 million and $0.3 million trade accounts receivable from Double Eagle. At September 30, 2016, we recognized $2.9 million, $1.4 million and $0.5 million of other receivables from Saddlehorn, BridgeTex and Powder Springs, respectively, related to the activities detailed above and miscellaneous cost reimbursements. These receivables are reported in our balance sheets as other accounts receivable. The financial results from Texas Frontera are included in our marine storage segment, the financial results from BridgeTex, Double Eagle, HoustonLink, Osage, Saddlehorn and Seabrook are included in our crude oil segment and the financial results from Powder Springs are included in our refined products segment, each as earnings/losses of non-controlled entities. A summary of our investments in non-controlled entities follows (in thousands):
Summarized financial information of our non-controlled entities for the three and nine months ended September 30, 2015 and 2016 follows (in thousands):
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Inventory (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventory at December 31, 2015 and September 30, 2016 was as follows (in thousands):
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Employee Benefit Plans (Tables) |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Consolidated Net Periodic Benefit Costs | The following tables present our consolidated net periodic benefit costs related to the pension and postretirement benefit plans for the three and nine months ended September 30, 2015 and 2016 (in thousands):
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Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | The changes in AOCL related to employee benefit plan assets and benefit obligations for the three and nine months ended September 30, 2015 and 2016 were as follows (in thousands):
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Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Debt | onsolidated debt at December 31, 2015 and September 30, 2016 was as follows (in thousands, except as otherwise noted):
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Derivative Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of NYMEX Contracts And Butane Price Swap Purchase Agreements | As outlined in the table below, our open NYMEX contracts at September 30, 2016 were as follows:
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Derivatives and Offset Amounts | A schedule of the derivative amounts we have offset and the deposit amounts we could offset under a master netting arrangement are provided below as of December 31, 2015 and September 30, 2016 (in thousands):
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Derivative Gains Included In Accumulated Other Comprehensive Loss (AOCL) | The changes in derivative activity included in AOCL for the three and nine months ended September 30, 2015 and 2016 were as follows (in thousands):
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Derivatives And Hedging-Cash Flow Hedges | The following tables provide a summary of the effect on our consolidated statements of income for the three and nine months ended September 30, 2015 and 2016 of derivatives accounted for under ASC 815-30, Derivatives and Hedging—Cash Flow Hedges, that were designated as hedging instruments (in thousands):
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Derivatives And Hedging-Overall-Subsequent Measurement | The following table provides a summary of the effect on our consolidated statements of income for the three and nine months ended September 30, 2015 and 2016 of derivatives accounted for under ASC 815, Derivatives and Hedging, that were not designated as hedging instruments (in thousands):
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Derivatives And Hedging-Designated | The following tables provide a summary of the fair value of derivatives accounted for under ASC 815, Derivatives and Hedging, which are presented on a net basis in our consolidated balance sheets, that were designated as hedging instruments as of December 31, 2015 and September 30, 2016 (in thousands):
The following tables provide a summary of the fair value of derivatives accounted for under ASC 815, Derivatives and Hedging, which are presented on a net basis in our consolidated balance sheets, that were not designated as hedging instruments as of December 31, 2015 and September 30, 2016 (in thousands):
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Long-Term Incentive Plan (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-Based Incentive Compensation Expense | Our equity-based incentive compensation expense (benefit) was as follows (in thousands):
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Distributions (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions Made to Members or Limited Partners [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Distributions | Distributions we paid during 2015 and 2016 were as follows (in thousands, except per unit amounts):
(1) Our general partner’s board of directors declared this cash distribution in October 2016 to be paid on November 14, 2016 to unitholders of record at the close of business on October 31, 2016. |
Fair Value (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables summarize the carrying amounts, fair values and recurring fair value measurements recorded or disclosed as of December 31, 2015 and September 30, 2016 based on the three levels established by ASC 820, Fair Value Measurements and Disclosures (in thousands):
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Organization, Description of Business and Basis of Presentation (Narrative) (Details) bbl in Millions |
Sep. 30, 2016
Terminal
bbl
mi
|
---|---|
Refined Products [Member] | |
Organization and Description of Business [Line Items] | |
Number of Pipeline Terminals | Terminal | 53 |
Number of Independent Terminals | Terminal | 26 |
Refined Products [Member] | Refined Products Transportation Services [Member] | |
Organization and Description of Business [Line Items] | |
Pipeline Length | mi | 9,700 |
Refined Products [Member] | Ammonia Transportation Services [Member] | |
Organization and Description of Business [Line Items] | |
Pipeline Length | mi | 1,100 |
Crude Oil Pipeline and Terminals [Member] | |
Organization and Description of Business [Line Items] | |
Pipeline Length | mi | 2,100 |
Storage Capacity | bbl | 23 |
Leasable Storage Capacity | bbl | 15 |
Marine Storage [Member] | |
Organization and Description of Business [Line Items] | |
Number of Independent Terminals | Terminal | 5 |
Storage Capacity | bbl | 26 |
Product Sales Revenues (Components Of Product Sales Revenues) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Product Sales Revenue [Abstract] | ||||
Physical sale of petroleum products | $ 146,006 | $ 100,829 | $ 412,045 | $ 403,395 |
Change in value of NYMEX contracts | (12,650) | 71,902 | (8,438) | 52,432 |
Total product sales revenue | $ 133,356 | $ 172,731 | $ 403,607 | $ 455,827 |
Segment Disclosures (Schedule Of Business Segment Reporting Information) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Segment Reporting Information [Line Items] | ||||
Transportation and terminals revenue | $ 413,433 | $ 410,387 | $ 1,175,748 | $ 1,149,100 |
Product sales revenue | 133,356 | 172,731 | 403,607 | 455,827 |
Affiliate management fee revenue | 4,993 | 3,557 | 11,140 | 10,478 |
Total revenue | 551,782 | 586,675 | 1,590,495 | 1,615,405 |
Operating expenses | 135,286 | 147,349 | 392,681 | 396,374 |
Cost of product sales | 118,242 | 85,522 | 327,530 | 316,208 |
Earnings of non-controlled entities | (18,576) | (15,521) | (51,543) | (49,653) |
Operating margin | 316,830 | 369,325 | 921,827 | 952,476 |
Depreciation and amortization expense | 47,081 | 42,043 | 134,137 | 124,180 |
G&A expenses | 35,800 | 37,612 | 111,216 | 111,052 |
Operating profit | 233,949 | 289,670 | 676,474 | 717,244 |
Operating Segments [Member] | Refined Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Transportation and terminals revenue | 267,339 | 264,156 | 739,931 | 723,156 |
Product sales revenue | 105,834 | 171,775 | 372,061 | 453,737 |
Affiliate management fee revenue | 218 | 0 | 422 | 0 |
Total revenue | 373,391 | 435,931 | 1,112,414 | 1,176,893 |
Operating expenses | 95,776 | 108,972 | 280,261 | 288,265 |
Cost of product sales | 93,761 | 85,341 | 300,009 | 315,301 |
Earnings of non-controlled entities | 272 | 48 | 352 | 146 |
Operating margin | 183,582 | 241,570 | 531,792 | 573,181 |
Depreciation and amortization expense | 28,432 | 24,333 | 78,523 | 71,742 |
G&A expenses | 22,993 | 22,238 | 68,852 | 68,730 |
Operating profit | 132,157 | 194,999 | 384,417 | 432,709 |
Operating Segments [Member] | Crude Oil Pipeline and Terminals [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Transportation and terminals revenue | 100,113 | 101,122 | 303,181 | 294,023 |
Product sales revenue | 24,750 | 0 | 26,465 | 0 |
Affiliate management fee revenue | 4,416 | 3,211 | 9,686 | 9,449 |
Total revenue | 129,279 | 104,333 | 339,332 | 303,472 |
Operating expenses | 24,628 | 24,572 | 66,370 | 65,032 |
Cost of product sales | 24,108 | 0 | 26,469 | 0 |
Earnings of non-controlled entities | (18,180) | (14,906) | (49,870) | (47,735) |
Operating margin | 98,723 | 94,667 | 296,363 | 286,175 |
Depreciation and amortization expense | 9,333 | 9,502 | 28,264 | 25,995 |
G&A expenses | 8,493 | 9,818 | 27,419 | 26,935 |
Operating profit | 80,897 | 75,347 | 240,680 | 233,245 |
Operating Segments [Member] | Marine Storage [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Transportation and terminals revenue | 46,182 | 45,109 | 132,837 | 131,921 |
Product sales revenue | 2,772 | 956 | 5,081 | 2,090 |
Affiliate management fee revenue | 359 | 346 | 1,032 | 1,029 |
Total revenue | 49,313 | 46,411 | 138,950 | 135,040 |
Operating expenses | 16,374 | 14,700 | 49,897 | 45,916 |
Cost of product sales | 373 | 181 | 1,052 | 907 |
Earnings of non-controlled entities | (668) | (663) | (2,025) | (2,064) |
Operating margin | 33,234 | 32,193 | 90,026 | 90,281 |
Depreciation and amortization expense | 8,025 | 7,313 | 23,704 | 23,604 |
G&A expenses | 4,314 | 5,556 | 14,945 | 15,387 |
Operating profit | 20,895 | 19,324 | 51,377 | 51,290 |
Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Transportation and terminals revenue | (201) | 0 | (201) | 0 |
Product sales revenue | 0 | 0 | 0 | 0 |
Affiliate management fee revenue | 0 | 0 | 0 | 0 |
Total revenue | (201) | 0 | (201) | 0 |
Operating expenses | (1,492) | (895) | (3,847) | (2,839) |
Cost of product sales | 0 | 0 | 0 | 0 |
Earnings of non-controlled entities | 0 | 0 | 0 | 0 |
Operating margin | 1,291 | 895 | 3,646 | 2,839 |
Depreciation and amortization expense | 1,291 | 895 | 3,646 | 2,839 |
G&A expenses | 0 | 0 | 0 | 0 |
Operating profit | $ 0 | $ 0 | $ 0 | $ 0 |
Investments in Non-Controlled Entities (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Feb. 29, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Schedule of Equity Method Investments [Line Items] | ||||||
Intangible Assets, Net (Excluding Goodwill) | $ 52,102 | $ 52,102 | $ 1,856 | |||
Equity Method Investment, Realized Gain (Loss) on Disposal | 0 | $ 0 | 28,144 | $ 0 | ||
Change in Equity Method Investments [Roll Forward] | ||||||
Investments at December 31, 2015 | 765,628 | |||||
Additional investment | 174,900 | |||||
Exchange of investment in non-controlled entity | (25,105) | |||||
Proportionate share of earnings | 53,246 | |||||
Amortization of excess investment and capitalized interest | (1,703) | |||||
Earnings of non-controlled entities | 18,576 | 15,521 | 51,543 | 49,653 | ||
Distributions of earnings from investments in non-controlled entities | 50,047 | 47,236 | ||||
Distributions in excess of earnings of non-controlled entities | 4,500 | 9,341 | ||||
Investments at September 30, 2016 | 912,419 | 912,419 | ||||
Equity Method Investment, Summarized Financial Information, Revenue | 69,865 | 60,085 | 190,518 | 179,997 | ||
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | $ 38,663 | 32,301 | $ 106,888 | 103,331 | ||
BridgeTex [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Interest in equity method investment | 50.00% | 50.00% | ||||
Change in Equity Method Investments [Roll Forward] | ||||||
Investments at December 31, 2015 | $ 495,267 | |||||
Additional investment | 31,503 | |||||
Exchange of investment in non-controlled entity | 0 | |||||
Proportionate share of earnings | 45,990 | |||||
Amortization of excess investment and capitalized interest | (1,529) | |||||
Earnings of non-controlled entities | 44,461 | |||||
Distributions of earnings from investments in non-controlled entities | 44,461 | |||||
Distributions in excess of earnings of non-controlled entities | 3,333 | |||||
Investments at September 30, 2016 | $ 523,437 | 523,437 | ||||
Equity Method Investment, Summarized Financial Information, Revenue | 55,843 | 47,555 | 155,067 | 146,320 | ||
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | $ 33,514 | 28,150 | $ 91,981 | 91,806 | ||
Double Eagle Pipeline Llc [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Interest in equity method investment | 50.00% | 50.00% | ||||
HoustonLink Pipeline Company LLC [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Interest in equity method investment | 50.00% | 50.00% | ||||
Powder Springs Logistics, LLC [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Interest in equity method investment | 50.00% | 50.00% | ||||
Saddlehorn Pipeline Company [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Interest in equity method investment | 40.00% | 40.00% | ||||
Seabrook Logistics, LLC [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Interest in equity method investment | 50.00% | 50.00% | ||||
Texas Frontera Llc [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Interest in equity method investment | 50.00% | 50.00% | ||||
Osage Pipeline Co [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Interest in equity method investment | 50.00% | |||||
Intangible Assets, Net (Excluding Goodwill) | $ 43,700 | |||||
Nontrade Receivables | $ 8,300 | |||||
Finite-Lived Intangible Asset, Useful Life | 20 years | |||||
Equity Method Investment, Realized Gain (Loss) on Disposal | $ 28,100 | |||||
All Other Equity Investments [Member] | ||||||
Change in Equity Method Investments [Roll Forward] | ||||||
Investments at December 31, 2015 | 270,361 | |||||
Additional investment | 143,397 | |||||
Exchange of investment in non-controlled entity | (25,105) | |||||
Proportionate share of earnings | 7,256 | |||||
Amortization of excess investment and capitalized interest | (174) | |||||
Earnings of non-controlled entities | 7,082 | |||||
Distributions of earnings from investments in non-controlled entities | 5,586 | |||||
Distributions in excess of earnings of non-controlled entities | 1,167 | |||||
Investments at September 30, 2016 | $ 388,982 | 388,982 | ||||
Equity Method Investment, Summarized Financial Information, Revenue | 14,022 | 12,530 | 35,451 | 33,677 | ||
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | 5,149 | 4,151 | 14,907 | 11,525 | ||
Equity Method Investee [Member] | BridgeTex [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Related Party Transaction, Other Revenues from Transactions with Related Party | 8,900 | 8,900 | 26,600 | 25,800 | ||
Accounts Receivable, Related Parties, Current | 1,400 | 1,400 | ||||
Equity Method Investee [Member] | Double Eagle Pipeline Llc [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Related Party Transaction, Other Revenues from Transactions with Related Party | 900 | $ 800 | 2,500 | $ 2,600 | ||
Accounts Receivable, Related Parties, Current | 300 | 300 | $ 200 | |||
Equity Method Investee [Member] | Powder Springs Logistics, LLC [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Accounts Receivable, Related Parties, Current | 500 | 500 | ||||
Equity Method Investee [Member] | Saddlehorn Pipeline Company [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Accounts Receivable, Related Parties, Current | 2,900 | 2,900 | ||||
Equity Method Investee [Member] | All Other Equity Investments - Construction [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Related Party Transaction, Other Revenues from Transactions with Related Party | $ 1,200 | $ 2,700 |
Inventory (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Refined products | $ 23,028 | $ 57,455 |
Crude oil | 20,475 | 28,385 |
Transmix | 33,108 | 21,297 |
Liquefied petroleum gases | 40,684 | 17,954 |
Additives | 5,716 | 5,777 |
Total inventory | $ 123,011 | $ 130,868 |
Schedule Of Consolidated Net Periodic Benefit Costs (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
|
Sep. 30, 2016
USD ($)
pension_plan
|
Sep. 30, 2015
USD ($)
|
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of Union Pension Plans | pension_plan | 2 | |||
Defined Contribution Plan, Cost Recognized | $ 2,400 | $ 1,800 | $ 7,800 | $ 6,800 |
Pension Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year | 26,000 | |||
Components of net periodic benefit costs: | ||||
Service cost | 4,555 | 4,723 | 13,648 | 14,168 |
Interest cost | 1,992 | 1,938 | 5,970 | 5,815 |
Expected return on plan assets | (2,235) | (2,009) | (6,694) | (6,028) |
Amortization of prior service credit | (45) | 0 | (135) | 0 |
Amortization of actuarial loss | 1,161 | 1,577 | 3,485 | 4,730 |
Settlement cost | 202 | 0 | 202 | 0 |
Net periodic benefit cost (credit) | 5,630 | 6,229 | 16,476 | 18,685 |
Other Postretirement Benefit Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year | 500 | |||
Components of net periodic benefit costs: | ||||
Service cost | 53 | 61 | 176 | 183 |
Interest cost | 148 | 109 | 368 | 328 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service credit | (928) | (928) | (2,785) | (2,784) |
Amortization of actuarial loss | 291 | 221 | 660 | 663 |
Settlement cost | 0 | 0 | 0 | 0 |
Net periodic benefit cost (credit) | $ (436) | $ (537) | $ (1,581) | $ (1,610) |
Employee Benefit Plans Schedule of Amounts Recognized in Other Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
||||
Changes in AOCL [Roll Forward] | |||||||
Accumulated other comprehensive loss (Beginning Bal) | $ (96,350) | ||||||
Amortization of prior service credit | [1] | $ (973) | $ (928) | (2,920) | $ (2,784) | ||
Amortization of actuarial loss | [1] | 1,452 | 1,798 | 4,145 | 5,393 | ||
Settlement cost | [1] | 202 | 0 | 202 | 0 | ||
Accumulated other comprehensive loss (Ending Bal) | (117,913) | (117,913) | |||||
Pension Plan [Member] | |||||||
Changes in AOCL [Roll Forward] | |||||||
Accumulated other comprehensive loss (Beginning Bal) | (60,045) | (60,104) | (62,279) | (63,257) | |||
Amortization of prior service credit | (45) | 0 | (135) | 0 | |||
Amortization of actuarial loss | 1,161 | 1,577 | 3,485 | 4,730 | |||
Settlement cost | 202 | 0 | 202 | 0 | |||
Accumulated other comprehensive loss (Ending Bal) | (58,727) | (58,527) | (58,727) | (58,527) | |||
Other Postretirement Benefit Plan [Member] | |||||||
Changes in AOCL [Roll Forward] | |||||||
Accumulated other comprehensive loss (Beginning Bal) | (5,433) | (3,110) | (3,945) | (1,696) | |||
Amortization of prior service credit | (928) | (928) | (2,785) | (2,784) | |||
Amortization of actuarial loss | 291 | 221 | 660 | 663 | |||
Settlement cost | 0 | 0 | 0 | 0 | |||
Accumulated other comprehensive loss (Ending Bal) | $ (6,070) | $ (3,817) | $ (6,070) | $ (3,817) | |||
|
Debt (Consolidated Debt) (Details) - USD ($) |
Sep. 30, 2016 |
Feb. 29, 2016 |
Dec. 31, 2015 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Debt Instrument [Line Items] | ||||||||||||
Long term debt | $ 4,323,522,000 | $ 3,439,622,000 | ||||||||||
Weighted-Average Interest Rate | [1] | 4.90% | ||||||||||
Debt Instrument, Face Amount | $ 4,300,000,000.0 | 3,400,000,000.0 | ||||||||||
Current portion of long-term debt, net | 250,020,000 | 250,335,000 | ||||||||||
Long-term debt, net | [2] | 4,073,502,000 | 3,189,287,000 | |||||||||
Senior Notes [Member] | Five Point Six Five Percentage Notes Due Two Thousand Sixteen [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt | [3] | $ 250,020,000 | 250,208,000 | |||||||||
Weighted-Average Interest Rate | [1] | 5.70% | ||||||||||
Debt Instrument, Face Amount | $ 250,000,000.0 | $ 250,000,000 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.65% | 5.65% | ||||||||||
Senior Notes [Member] | 6.40% Notes Due 2018 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt | $ 253,298,000 | $ 254,694,000 | ||||||||||
Weighted-Average Interest Rate | [1] | 5.50% | ||||||||||
Debt Instrument, Face Amount | $ 250,000,000.0 | $ 250,000,000 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.40% | 6.40% | ||||||||||
Senior Notes [Member] | 6.55% Notes Due 2019 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt | $ 560,042,000 | $ 562,600,000 | ||||||||||
Weighted-Average Interest Rate | [1] | 5.70% | ||||||||||
Debt Instrument, Face Amount | $ 550,000,000.0 | $ 550,000,000 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.55% | 6.55% | ||||||||||
Senior Notes [Member] | 4.25% Notes Due 2021 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt | $ 552,620,000 | $ 553,002,000 | ||||||||||
Weighted-Average Interest Rate | [1] | 4.10% | ||||||||||
Debt Instrument, Face Amount | $ 550,000,000.0 | $ 550,000,000 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.25% | 4.25% | ||||||||||
Senior Notes [Member] | 3.20% Notes Due 2025 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt | $ 247,967,000 | $ 247,788,000 | ||||||||||
Weighted-Average Interest Rate | [1] | 3.20% | ||||||||||
Debt Instrument, Face Amount | $ 250,000,000.0 | $ 250,000,000.0 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.20% | 3.20% | ||||||||||
Senior Notes [Member] | Five Point Zero Percentage Notes Due Two Thousand Twenty Six [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt | $ 644,129,000 | $ 0 | ||||||||||
Weighted-Average Interest Rate | [1],[4] | 5.10% | ||||||||||
Debt Instrument, Face Amount | $ 650,000,000.0 | $ 650,000,000.0 | $ 0 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | 5.00% | 0.00% | |||||||||
Senior Notes [Member] | 6.40% Notes Due 2037 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt | $ 247,312,000 | $ 247,230,000 | ||||||||||
Weighted-Average Interest Rate | [1] | 6.40% | ||||||||||
Debt Instrument, Face Amount | $ 250,000,000.0 | $ 250,000,000 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.40% | 6.40% | ||||||||||
Senior Notes [Member] | 4.20% Notes Due 2042 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt | $ 246,230,000 | $ 246,142,000 | ||||||||||
Weighted-Average Interest Rate | [1] | 4.30% | ||||||||||
Debt Instrument, Face Amount | $ 250,000,000.0 | $ 250,000,000 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.20% | 4.20% | ||||||||||
Senior Notes [Member] | 5.15% Notes Due 2043 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt | $ 550,885,000 | $ 550,819,000 | ||||||||||
Weighted-Average Interest Rate | [1] | 5.10% | ||||||||||
Debt Instrument, Face Amount | $ 550,000,000.0 | $ 550,000,000.0 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.15% | 5.15% | ||||||||||
Senior Notes [Member] | 4.20% Notes Due 2045 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt | $ 247,408,000 | $ 247,338,000 | ||||||||||
Weighted-Average Interest Rate | [1] | 4.70% | ||||||||||
Debt Instrument, Face Amount | $ 250,000,000.0 | $ 250,000,000.0 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.20% | 4.20% | ||||||||||
Senior Notes [Member] | Four Point Two Five Percentage Notes Due Two Thousand Forty Six [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt | $ 488,731,000 | $ 0 | ||||||||||
Weighted-Average Interest Rate | [1] | 4.80% | ||||||||||
Debt Instrument, Face Amount | $ 500,000,000.0 | $ 0 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.25% | 0.00% | ||||||||||
Commercial Paper [Member] | Senior Notes [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt | $ 34,880,000 | $ 279,801,000 | ||||||||||
Weighted-Average Interest Rate | [1],[4] | 0.80% | ||||||||||
|
Debt (Narrative) (Details) - USD ($) |
9 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Feb. 29, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|||
Debt Instrument [Line Items] | |||||||
Debt Issuance Costs, Net | $ 27,400,000 | $ 27,400,000 | $ 18,700,000 | ||||
Debt Instrument, Face Amount | 4,300,000,000.0 | 4,300,000,000.0 | 3,400,000,000.0 | ||||
Borrowings under long-term notes | 1,142,997,000 | $ 499,589,000 | |||||
Debt placement costs | 10,500,000 | $ 4,754,000 | |||||
Long term debt | 4,323,522,000 | 4,323,522,000 | 3,439,622,000 | ||||
Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Short-term Debt | 0 | 0 | 0 | ||||
Revolving Credit Facility [Member] | Notes Payable to Banks [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity | 250,000,000.0 | $ 250,000,000.0 | |||||
Unused commitment fee | 0.10% | ||||||
Debt Instrument, Term | 364 days | ||||||
Revolving Credit Facility [Member] | Minimum [Member] | Notes Payable to Banks [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | ||||||
Unused commitment fee | 0.08% | ||||||
Revolving Credit Facility [Member] | Maximum [Member] | Notes Payable to Banks [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.625% | ||||||
Unused commitment fee | 0.225% | ||||||
Senior Notes [Member] | Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity | 1,000,000,000.0 | $ 1,000,000,000.0 | |||||
Unused commitment fee | 0.125% | ||||||
Long term debt | 0 | $ 0 | 0 | ||||
Obligation for letters of credit | 6,300,000 | $ 6,300,000 | 6,300,000 | ||||
Senior Notes [Member] | Revolving Credit Facility [Member] | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | ||||||
Unused commitment fee | 0.10% | ||||||
Senior Notes [Member] | Revolving Credit Facility [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.625% | ||||||
Unused commitment fee | 0.275% | ||||||
Senior Notes [Member] | Commercial Paper [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity | 1,000,000,000.0 | $ 1,000,000,000.0 | |||||
Long term debt | 34,880,000 | $ 34,880,000 | 279,801,000 | ||||
Senior Notes [Member] | Commercial Paper [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Term | 397 days | ||||||
Four Point Two Five Percentage Notes Due Two Thousand Forty Six [Member] | Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Face Amount | $ 500,000,000.0 | $ 500,000,000.0 | $ 0 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 4.25% | 4.25% | 0.00% | ||||
Notes At Price | 98.762% | 98.762% | |||||
Borrowings under long-term notes | $ 488,700,000 | ||||||
Debt placement costs | 5,100,000 | ||||||
Long term debt | 488,731,000 | $ 488,731,000 | $ 0 | ||||
Five Point Six Five Percentage Notes Due Two Thousand Sixteen [Member] | Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Face Amount | $ 250,000,000.0 | $ 250,000,000.0 | $ 250,000,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 5.65% | 5.65% | 5.65% | ||||
Long term debt | [1] | $ 250,020,000 | $ 250,020,000 | $ 250,208,000 | |||
Five Point Zero Percentage Notes Due Two Thousand Twenty Six [Member] | Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Face Amount | $ 650,000,000.0 | $ 650,000,000.0 | $ 650,000,000.0 | $ 0 | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | 5.00% | 5.00% | 0.00% | |||
Notes At Price | 99.875% | ||||||
Borrowings under long-term notes | $ 643,800,000 | ||||||
Debt placement costs | $ 5,400,000 | ||||||
Long term debt | $ 644,129,000 | $ 644,129,000 | $ 0 | ||||
|
Derivative Financial Instruments (Narrative) (Details) bbl in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2016
USD ($)
bbl
|
Sep. 30, 2015
USD ($)
|
Sep. 30, 2016
USD ($)
bbl
|
Sep. 30, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
bbl
|
|
Derivative [Line Items] | |||||
Energy commodity derivatives deposits, current asset | $ 30,559,000 | $ 30,559,000 | $ 0 | ||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | (3,000,000) | ||||
Debt Instrument, Face Amount | $ 4,300,000,000.0 | 4,300,000,000.0 | $ 3,400,000,000.0 | ||
Payments for (Proceeds from) Hedge, Financing Activities | $ 19,287,000 | $ 42,908,000 | |||
Fair Value Hedging [Member] | |||||
Derivative [Line Items] | |||||
Derivative, Nonmonetary Notional Amount | bbl | 0.7 | 0.7 | |||
Fair Value Hedging [Member] | NYMEX Commodity Contracts [Member] | |||||
Derivative [Line Items] | |||||
Derivative, Nonmonetary Notional Amount | bbl | 0.7 | 0.7 | 0.7 | ||
Cumulative Gains from Fair Value Hedges | $ 17,600,000 | $ 17,600,000 | $ 27,900,000 | ||
Gain (Loss) from Components Excluded from Assessment of Fair Value Hedge Effectiveness, Net | 300,000 | $ (1,700,000) | 4,500,000 | $ 4,600,000 | |
Future Debt Issuance 2018 [Member] | Cash Flow Hedging [Member] | Interest Rate Contract [Member] | |||||
Derivative [Line Items] | |||||
Derivative, Notional Amount | 100,000,000 | 100,000,000 | |||
Derivative Liability, Fair Value, Gross Liability | 3,500,000 | 3,500,000 | |||
Five Point Zero Percentage Notes Due Two Thousand Twenty Six [Member] | Cash Flow Hedging [Member] | Interest Rate Contract [Member] | |||||
Derivative [Line Items] | |||||
Derivative, Notional Amount | 250,000,000 | 250,000,000 | |||
Debt Instrument, Face Amount | $ 500,000,000 | $ 500,000,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.25% | 4.25% | |||
Payments for (Proceeds from) Hedge, Financing Activities | $ 19,300,000 | ||||
Maximum Length of Time Hedged in Interest Rate Cash Flow Hedge | 10 years |
Derivative Financial Instruments (Schedule Of NYMEX Contracts And Butane Price Swap Purchase Agreements) (Details) bbl in Millions |
Sep. 30, 2016
bbl
|
---|---|
Fair Value Hedging [Member] | |
Derivative [Line Items] | |
Derivative, Nonmonetary Notional Amount | 0.7 |
Economic Hedges [Member] | |
Derivative [Line Items] | |
Derivative, Nonmonetary Notional Amount | 5.1 |
Economic Hedges Futures [Member] | |
Derivative [Line Items] | |
Derivative, Nonmonetary Notional Amount | 1.3 |
Derivative Financial Instruments (Schedule of Derivative Offset Amounts) (Details) - Exchange Traded [Member] - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
|||||||
---|---|---|---|---|---|---|---|---|---|
Derivative [Line Items] | |||||||||
Derivative Asset, Fair Value, Gross Asset | $ 3,247 | $ 48,367 | |||||||
Derivative Liability, Fair Value, Gross Liability | (15,576) | (5,646) | |||||||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | [1] | 42,721 | |||||||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | [2] | (12,329) | |||||||
Derivative, Collateral, Obligation to Return Cash | (24,252) | ||||||||
Derivative, Collateral, Right to Reclaim Cash | 30,559 | ||||||||
Amount After Offset | [3] | 18,230 | 18,469 | ||||||
Other Current Liabilities [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | (12,430) | ||||||||
Other Noncurrent Assets [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | 3,478 | ||||||||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | $ 101 | ||||||||
Other Current Assets [Member] | |||||||||
Derivative [Line Items] | |||||||||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | $ 39,243 | ||||||||
|
Derivative Financial Instruments (Derivative Gains Included In Accumulated Other Comprehensive Loss (AOCL) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
||||
Derivative Gains Included in AOCI [Roll Forward] | |||||||
Beginning balance | $ (50,459) | $ (29,528) | $ (30,126) | $ (16,587) | |||
Net gain (loss) on cash flow hedges | [1] | (3,169) | (3,410) | (24,278) | (16,939) | ||
Reclassification of net loss (gain) on cash flow hedges to income | [1] | 512 | 388 | 1,288 | 976 | ||
Ending balance | $ (53,116) | $ (32,550) | $ (53,116) | $ (32,550) | |||
|
Derivative Financial Instruments (Derivatives And Hedging-Cash Flow Hedges) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Net gain (loss) on cash flow hedges | [1] | $ (3,169) | $ (3,410) | $ (24,278) | $ (16,939) | |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Interest Rate Contract [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Net gain (loss) on cash flow hedges | (3,169) | (3,410) | (24,278) | (16,939) | ||
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Interest Rate Contract [Member] | Interest Expense [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (512) | (388) | (1,288) | (976) | ||
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net | $ 0 | $ 0 | $ 0 | $ 0 | ||
|
Derivative Financial Instruments (Derivatives And Hedging-Overall-Subsequent Measurement) (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ (7,607) | $ 82,896 | $ (5,987) | $ 53,766 |
NYMEX Commodity Contracts [Member] | Sales [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | (12,650) | 71,902 | (8,438) | 52,432 |
NYMEX Commodity Contracts [Member] | Operating Expenses [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 4,212 | 14,761 | (1,192) | 7,181 |
NYMEX Commodity Contracts [Member] | Cost of Sales [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ 831 | $ (3,767) | $ 3,643 | $ (5,847) |
Derivative Financial Instruments (Derivatives and Hedging - Designated) (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | $ 101 | $ 5,717 |
Derivative Liability, Fair Value, Gross Liability | 3,465 | 653 |
Designated as Hedging Instrument [Member] | NYMEX Commodity Contracts [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 60 | |
Designated as Hedging Instrument [Member] | NYMEX Commodity Contracts [Member] | Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 0 | |
Designated as Hedging Instrument [Member] | NYMEX Commodity Contracts [Member] | Other Noncurrent Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 101 | 3,478 |
Designated as Hedging Instrument [Member] | NYMEX Commodity Contracts [Member] | Other Noncurrent Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 0 | 0 |
Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 2,179 | |
Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 653 | |
Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Noncurrent Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 0 | |
Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Noncurrent Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 3,465 | |
Not Designated as Hedging Instrument [Member] | NYMEX Commodity Contracts [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 3,146 | 44,829 |
Not Designated as Hedging Instrument [Member] | NYMEX Commodity Contracts [Member] | Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | $ 15,576 | $ 5,646 |
Commitments And Contingencies (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Loss Contingencies [Line Items] | |||||
Liabilities recognized for estimated environmental costs | $ 25.8 | $ 25.8 | $ 31.4 | ||
Estimated environmental liabilities, years | 9 years | ||||
Environmental expenses | 0.3 | $ 1.3 | $ 4.6 | $ 5.6 | |
Receivables from insurance carriers related to environmental matters | 2.0 | 2.0 | 2.6 | ||
Accounts Receivable [Member] | |||||
Loss Contingencies [Line Items] | |||||
Receivables from insurance carriers related to environmental matters | 0.8 | 0.8 | 0.7 | ||
Other Noncurrent Assets [Member] | |||||
Loss Contingencies [Line Items] | |||||
Receivables from insurance carriers related to environmental matters | $ 1.2 | $ 1.2 | $ 1.9 |
Long-Term Incentive Plan (Narrative) (Details) - shares |
1 Months Ended | 9 Months Ended |
---|---|---|
Feb. 29, 2016 |
Sep. 30, 2016 |
|
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||
Limited partners' capital account, units authorized for issuance | 11,900,000 | |
Limited partner unitholders, units remaining available | 3,000,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 218,046 | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |
Management [Member] | ||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||
Partners' Capital Account, Units, Unit-based Compensation | 350,552 | |
Director [Member] | ||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||
Partners' Capital Account, Units, Unit-based Compensation | 6,117 |
Long-Term Incentive Plan (Equity-Based Incentive Compensation Expense) (Details) - Management [Member] - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | $ 4,678 | $ 4,687 | $ 14,737 | $ 15,226 |
G&A Expense [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 4,637 | 4,643 | 14,623 | 15,016 |
Operating Expenses [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 41 | 44 | 114 | 210 |
Equity Method [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 4,678 | 5,277 | 14,737 | 14,725 |
Liability Method [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 0 | (590) | 0 | 501 |
Performance Based Awards [Member] | Two Thousand Thirteen Awards [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 1,083 | 6,747 | ||
Performance Based Awards [Member] | Two Thousand Thirteen Awards [Member] | Equity Method [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 1,673 | 6,246 | ||
Performance Based Awards [Member] | Two Thousand Thirteen Awards [Member] | Liability Method [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | (590) | 501 | ||
Performance Based Awards [Member] | Two Thousand Fourteen Awards [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 1,780 | 1,497 | 6,168 | 3,980 |
Performance Based Awards [Member] | Two Thousand Fourteen Awards [Member] | Equity Method [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 1,780 | 1,497 | 6,168 | 3,980 |
Performance Based Awards [Member] | Two Thousand Fourteen Awards [Member] | Liability Method [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 0 | 0 | 0 | 0 |
Performance Based Awards [Member] | Two Thousand Fifteen Awards [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 1,208 | 1,727 | 3,679 | 3,687 |
Performance Based Awards [Member] | Two Thousand Fifteen Awards [Member] | Equity Method [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 1,208 | 1,727 | 3,679 | 3,687 |
Performance Based Awards [Member] | Two Thousand Fifteen Awards [Member] | Liability Method [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 0 | 0 | 0 | 0 |
Performance Based Awards [Member] | Two Thousand Sixteen Awards [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 1,097 | 3,240 | ||
Performance Based Awards [Member] | Two Thousand Sixteen Awards [Member] | Equity Method [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 1,097 | 3,240 | ||
Performance Based Awards [Member] | Two Thousand Sixteen Awards [Member] | Liability Method [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 0 | 0 | ||
Time-Based Awards [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 593 | 380 | 1,650 | 812 |
Time-Based Awards [Member] | Equity Method [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | 593 | 380 | 1,650 | 812 |
Time-Based Awards [Member] | Liability Method [Member] | ||||
Share-based Compensation Arrangements by Share-based Payment Award [Line Items] | ||||
Allocation of LTIP expense on consolidated statements of income | $ 0 | $ 0 | $ 0 | $ 0 |
Distributions (Schedule Of Distributions) (Details) - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 14, 2016 |
Aug. 12, 2016 |
May 13, 2016 |
Feb. 12, 2016 |
Nov. 13, 2015 |
Aug. 14, 2015 |
May 15, 2015 |
Feb. 13, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Per Unit Cash Distribution Amount | $ 0.8200 | $ 0.8025 | $ 0.785 | $ 0.7625 | $ 0.7400 | $ 0.7175 | $ 0.6950 | $ 2.4075 | $ 2.1525 | $ 2.915 | ||
Total Cash Distribution to Limited Partners | $ 186,783 | $ 182,797 | $ 178,808 | $ 173,413 | $ 168,296 | $ 163,178 | $ 158,061 | $ 548,388 | $ 489,535 | $ 662,948 | ||
Scenario, Forecast | ||||||||||||
Per Unit Cash Distribution Amount | $ 0.8375 | $ 3.245 | ||||||||||
Total Cash Distribution to Limited Partners | $ 190,769 | $ 739,157 |
Fair Value (Schedule Of Carrying Amounts And Fair Values Of Financial Assets/Liabilities) (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | NYMEX Commodity Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | $ 42,721 | |
Derivative Liability | $ (12,329) | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt | (4,678,925) | (3,284,791) |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Interest Rate Contract [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 1,526 | |
Derivative Liability | (3,465) | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term receivables | 22,101 | 20,374 |
Estimate of Fair Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term receivables | 22,101 | 20,374 |
Debt | (4,678,925) | (3,284,791) |
Estimate of Fair Value Measurement [Member] | NYMEX Commodity Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 42,721 | |
Derivative Liability | (12,329) | |
Estimate of Fair Value Measurement [Member] | Interest Rate Contract [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 1,526 | |
Derivative Liability | (3,465) | |
Reported Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term receivables | 22,101 | 20,374 |
Debt | (4,323,522) | (3,439,622) |
Reported Value Measurement [Member] | NYMEX Commodity Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 42,721 | |
Derivative Liability | (12,329) | |
Reported Value Measurement [Member] | Interest Rate Contract [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | $ 1,526 | |
Derivative Liability | $ (3,465) |
Related Party Transactions (Details) - Director [Member] - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Targa Resource Partners L P [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 1.5 | $ 4.7 | $ 14.3 | ||
Accounts Payable, Related Parties | $ 2.0 | ||||
Methvin Company [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Other Revenues from Transactions with Related Party | $ 4.3 | $ 4.1 | 12.0 | $ 6.7 | |
Accounts Receivable, Related Parties, Current | $ 1.5 | $ 1.5 | $ 1.3 |
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 14, 2016 |
Aug. 12, 2016 |
May 13, 2016 |
Feb. 12, 2016 |
Nov. 13, 2015 |
Aug. 14, 2015 |
May 15, 2015 |
Feb. 13, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Subsequent Event [Line Items] | ||||||||||||
Cash distribution per unit | $ 0.8200 | $ 0.8025 | $ 0.785 | $ 0.7625 | $ 0.7400 | $ 0.7175 | $ 0.6950 | $ 2.4075 | $ 2.1525 | $ 2.915 | ||
Total cash distributions | $ 186,783 | $ 182,797 | $ 178,808 | $ 173,413 | $ 168,296 | $ 163,178 | $ 158,061 | $ 548,388 | $ 489,535 | $ 662,948 | ||
Scenario, Forecast | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Cash distribution per unit | $ 0.8375 | $ 3.245 | ||||||||||
Total cash distributions | $ 190,769 | $ 739,157 |
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