10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

Or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 001-36168

ARC LOGISTICS PARTNERS LP

(Exact name of registrant as specified in its charter)

Delaware	36-4767846
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
725 Fifth Avenue, 19th Floor New York, New York	10022
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 993-1290

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨		Accelerated filer	þ
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No   þ

As of May 2, 2016, there were 13,181,409 common units and 6,081,081 subordinated units outstanding.

ARC LOGISTICS PARTNERS LP

TABLE OF CONTENTS

			Page
GLOSSARY OF TERMS			2
PART I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015	3
		Condensed Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended March 31, 2016 and 2015	4
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015	5
		Condensed Consolidated Statements of Partners’ Capital for the Three Months Ended March 31, 2016	6
		Notes to Condensed Consolidated Financial Statements	7
	Cautionary Statement Regarding Forward-Looking Statements		28
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
	Item 4.	Controls and Procedures	40
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	40
	Item 1A.	Risk Factors	40
	Item 5.	Other Information	40
	Item 6.	Exhibits	41
SIGNATURES			42
EXHIBIT INDEX			43

GLOSSARY OF TERMS

Adjusted EBITDA:    Represents net income before interest expense, income taxes and depreciation and amortization expense, as further adjusted for other non-cash charges and other charges that are not reflective of our ongoing operations. Adjusted EBITDA is not a presentation made in accordance with GAAP. Please see the reconciliation of Adjusted EBITDA to net income in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview of Our Results of Operations—Adjusted EBITDA.”

ancillary services fees:    Fees associated with ancillary services, such as heating, blending and mixing our customers’ products that are stored in our tanks.

bpd:  Barrels per day.

Distributable Cash Flow:    Represents Adjusted EBITDA less (i) cash interest expense paid; (ii) cash income taxes paid; (iii) maintenance capital expenditures paid; and (iv) equity earnings from the LNG Interest; plus (v) deferred revenue adjustments; and (vi) cash distributions from the LNG Interest. Distributable Cash Flow is not a presentation made in accordance with GAAP. Please see the reconciliation of Distributable Cash Flow to net income in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview of Our Results of Operations—Distributable Cash Flow.”

expansion capital expenditures:    Capital expenditures that we expect will increase our operating capacity or operating income over the long term. Examples of expansion capital expenditures include the acquisition of equipment or the construction, development or acquisition of additional storage, terminalling or pipeline capacity to the extent such capital expenditures are expected to increase our long-term operating capacity or operating income.

GAAP:    Generally accepted accounting principles in the United States.

LNG:     Liquefied natural gas.

maintenance capital expenditures:    Capital expenditures made to maintain our long-term operating capacity or operating income. Examples of maintenance capital expenditures include expenditures to repair, refurbish and replace storage, terminalling and pipeline infrastructure, to maintain equipment reliability, integrity and safety and to comply with environmental laws and regulations to the extent such expenditures are made to maintain our long-term operating capacity or operating income.

mbpd:    One thousand barrels per day.

SEC:    U.S. Securities and Exchange Commission.

storage and throughput services fees:    Fees paid by our customers to reserve tank storage, throughput and transloading capacity at our facilities and to compensate us for the receipt, storage, throughput and transloading of crude oil and petroleum products.

transloading:     The transfer of goods or products from one mode of transportation to another (e.g., from railcar to truck).

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ARC LOGISTICS PARTNERS LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except unit amounts)

(Unaudited)

	March 31,		December 31,
	2016		2015
Assets:
Current assets:
Cash and cash equivalents	$	6,888	$	5,870
Trade accounts receivable		9,041		8,633
Due from related parties		1,337		1,532
Inventories		419		318
Other current assets		1,106		1,162
Total current assets		18,791		17,515
Property, plant and equipment, net		391,171		380,671
Investment in unconsolidated affiliate		73,708		74,399
Intangible assets, net		128,501		132,121
Goodwill		39,871		39,871
Other assets		3,779		3,945
Total assets	$	655,821	$	648,522
Liabilities and partners’ capital:
Current liabilities:
Accounts payable	$	5,057	$	4,085
Accrued expenses		5,274		6,857
Due to general partner		1,020		638
Other liabilities		3,981		3,914
Total current liabilities		15,332		15,494
Credit facility		240,313		226,063
Other non-current liabilities		21,410		21,745
Total liabilities		277,055		263,302
Commitments and contingencies
Partners’ capital:
General partner interest		-		-
Limited partners’ interest
Common units – (13,181,409 and 13,174,410 units issued and outstanding at March 31, 2016 and December 31, 2015, respectively)		210,480		213,281
Subordinated units – (6,081,081 units issued and outstanding      at March 31, 2016 and December 31, 2015)		83,679		85,371
Non-controlling interests		84,210		85,275
Accumulated other comprehensive (loss) income		397		1,293
Total partners’ capital		378,766		385,220
Total liabilities and partners’ capital	$	655,821	$	648,522

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

ARC LOGISTICS PARTNERS LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except per unit amounts)

(Unaudited)

	Three Months Ended
	March 31,
	2016			2015
Revenues:
Third-party customers	$	22,584		$	11,379
Related parties		3,483			2,178
		26,067			13,557
Expenses:
Operating expenses		8,687			6,280
Selling, general and administrative		3,924			4,298
Selling, general and administrative – affiliate		1,322			1,076
Depreciation		3,652			1,844
Amortization		3,697			1,246
Total expenses		21,282			14,744
Operating (loss) income		4,785			(1,187	)
Other income (expense):
Equity earnings from unconsolidated affiliate		2,461			2,489
Other income		-			5
Interest expense		(2,367	)		(951	)
Total other income, net		94			1,543
Income before income taxes		4,879			356
Income taxes		28			52
Net income		4,851			304
Net income attributable to non-controlling interests		(1,735	)		-
Net income attributable to partners' capital		3,116			304
Other comprehensive (loss) income		(896	)		(471	)
Comprehensive (loss) income attributable to partners’ capital	$	2,220		$	(167	)
Earnings (loss) per limited partner unit:
Common units (basic and diluted)	$	0.15		$	0.01
Subordinated units (basic and diluted)	$	0.15		$	0.01

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

ARC LOGISTICS PARTNERS LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended
	March 31,
	2016			2015
Cash flow from operating activities:
Net income	$	4,851		$	304
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		3,652			1,844
Amortization		3,697			1,246
Equity earnings from unconsolidated affiliate, net of distributions		(282	)		(714	)
Amortization of deferred financing costs		359			96
Unit-based compensation		1,095			1,535
Changes in operating assets and liabilities:
Trade accounts receivable		(219	)		(196	)
Due from related parties		195			(45	)
Inventories		(101	)		(64	)
Other current assets		56			(447	)
Accounts payable		(792	)		(321	)
Accrued expenses		(1,447	)		(314	)
Due to general partner		383			2,282
Other liabilities		1,073			197
Net cash provided by operating activities		12,520			5,403
Cash flows from investing activities:
Capital expenditures		(5,715	)		(1,334	)
Investment in unconsolidated affiliate		-			(310	)
Net cash paid for acquisitions		(8,000	)		-
Net cash used in investing activities		(13,715	)		(1,644	)
Cash flows from financing activities:
Distributions		(8,473	)		(5,309	)
Deferred financing costs		(192	)		(389	)
Proceeds from credit facility		14,250			-
Payments of earn-out liability		(341	)		-
Distributions paid to non-controlling interests		(2,800	)		-
Distribution equivalent rights paid on unissued units		(231	)		(215	)
Net cash provided by (used in) financing activities		2,213			(5,913	)
Net increase (decrease) in cash and cash equivalents		1,018			(2,154	)
Cash and cash equivalents, beginning of period		5,870			6,599
Cash and cash equivalents, end of period	$	6,888		$	4,445
Supplemental disclosure of cash flow information:
Cash paid for interest	$	2,138		$	906
Cash paid for income taxes		27			52
Non-cash investing and financing activities:
Increase (decrease) in purchases of property plant and     equipment in accounts payable and accrued expenses		438			209

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

ARC LOGISTICS PARTNERS LP

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(In thousands)

(Unaudited)

	Partners' Capital
	Limited Partner Common Interest			Limited Partner Subordinated Interest			Non-Controlling Interests			Accumulated Other Comprehensive Income			Total Partners' Capital
Partners’ capital at December 31, 2015	$	213,281		$	85,371		$	85,275		$	1,293		$	385,220
Net income		2,132			984			1,735			-			4,851
Other comprehensive income		-			-			-			(896	)		(896	)
Unit-based compensation		1,095			-			-			-			1,095
Distribution equivalent rights paid on unissued units		(231	)		-			-			-			(231	)
Distributions		(5,797	)		(2,676	)		(2,800	)		-			(11,273	)
Partners’ capital at March 31, 2016	$	210,480		$	83,679		$	84,210		$	397		$	378,766

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

ARC LOGISTICS PARTNERS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Organization and Presentation

Defined Terms

Unless the context clearly indicates otherwise, references in these unaudited condensed consolidated financial statements (“interim statements”) to “Arc Logistics” or the “Partnership” refer to Arc Logistics Partners LP and its subsidiaries. Unless the context clearly indicates otherwise, references to our “General Partner” refer to Arc Logistics GP LLC, the general partner of Arc Logistics. References to “Sponsor” or “Lightfoot” refer to Lightfoot Capital Partners, LP and its general partner, Lightfoot Capital Partners GP LLC. References to “GCAC” refer to Gulf Coast Asphalt Company, L.L.C., which contributed its preferred units in Arc Terminals LP, predecessor to Arc Logistics (“Arc Terminals”), to the Partnership upon the consummation of the Partnership’s initial public offering in November 2013 (“IPO”). References to “Center Oil” refer to GP&W, Inc., d.b.a. Center Oil, and affiliates, including Center Terminal Company-Cleveland, which contributed its limited partner interests in Arc Terminals to the Partnership upon the consummation of the IPO. References to “Gulf LNG Holdings” refer to Gulf LNG Holdings Group, LLC and its subsidiaries, which own a liquefied natural gas regasification and storage facility in Pascagoula, MS, which is referred to herein as the “LNG Facility.” The Partnership owns a 10.3% limited liability company interest in Gulf LNG Holdings, which is referred to herein as the “LNG Interest.”

Organization and Description of Business

The Partnership is a fee-based, growth-oriented Delaware limited partnership formed by Lightfoot in 2007 to own, operate, develop and acquire a diversified portfolio of complementary energy logistics assets. The Partnership is principally engaged in the terminalling, storage, throughput and transloading of crude oil and petroleum products. The Partnership is focused on growing its business through the optimization, organic development and acquisition of terminalling, storage, rail, pipeline and other energy logistics assets that generate stable cash flows.

In November 2013, the Partnership completed its IPO by selling 6,786,869 common units (which includes 786,869 common units issued pursuant to the exercise of the underwriters’ over-allotment option) representing limited partner interests in the Partnership at a price to the public of $19.00 per common unit. In connection with the IPO, the Partnership amended and restated its $40.0 million revolving credit facility.

Our energy logistics assets are strategically located in the East Coast, Gulf Coast, Midwest, Rocky Mountains and West Coast regions of the United States and supply a diverse group of third-party customers, including major oil companies, independent refiners, crude oil and petroleum product marketers, distributors and various industrial manufacturers. Depending upon the location, our facilities possess pipeline, rail, marine and truck loading and unloading capabilities allowing customers to receive and deliver product throughout North America. Our asset platform allows customers to meet the specialized handling requirements that may be required by particular products. Our combination of diverse geographic locations and logistics platforms gives us the flexibility to meet the evolving demands of existing customers and address those of prospective customers.

As of March 31, 2016, our assets consisted of:

● 21 terminals in twelve states located in the East Coast, Gulf Coast, Midwest, Rocky Mountains and West Coast regions of the United States with approximately 7.7 million barrels of crude oil and petroleum product storage capacity;

● four rail transloading facilities with approximately 126,000 bpd of throughput capacity; and

● the LNG Interest in connection with the LNG Facility, which has 320,000 M³ of LNG storage, 1.5 bcf/d natural gas sendout capacity and interconnects to major natural gas pipeline networks

The Partnership interests included the following as of March 31, 2016:

● 13,181,409 common units representing limited partner interests (of which 68,617 common units are held by Lightfoot);

● 6,081,081 subordinated units representing limited partner interests (of which 5,146,264 subordinated units are held by Lightfoot);

● a non-economic general partner interest (which is held by our general partner, which is owned by Lightfoot); and

● incentive distribution rights (which are held by our general partner, which is owned by Lightfoot).

Note 2—Summary of Significant Accounting Policies

The Partnership has provided a discussion of significant accounting policies in its Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Partnership 10-K”). Certain items from that discussion are repeated or updated below as necessary to assist in the understanding of these interim statements.

7

Basis of Presentation

The accompanying interim statements of the Partnership have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments and disclosures necessary for a fair statement of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year or for any other period. These interim statements should be read in conjunction with the Partnership’s consolidated financial statements for the year ended December 31, 2015, which are included in the 2015 Partnership 10-K, as filed with the SEC. The year-end balance sheet data was derived from the audited financial statements, but does not include all disclosures required by GAAP.  

Use of Estimates

The preparation of 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 at the date of the financial statements. The most significant estimates relate to the valuation of acquired businesses, goodwill and intangible assets, assessment for impairment of long-lived assets and the useful lives of intangible assets and property, plant and equipment. Actual results could differ from those estimates.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and are no longer depreciated.

No impairment charges were recorded during the three months ended March 31, 2016 and 2015.

Goodwill

Goodwill represents the excess of consideration paid over the fair value of net assets acquired in a business combination. Goodwill is not amortized but instead is assessed for impairment at least annually or when facts and circumstances warrant. Goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed. The second step compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The Partnership determines the fair value of its single reporting unit by blending two valuation approaches: the income approach and a market value approach. The inputs included assumptions related to the future performance of the Partnership and assumptions related to discount rates, long-term growth rates and control premiums.  Based on the results of the first step of the quantitative impairment assessment of its goodwill as of December 31, 2015, the fair value of the Partnership’s reporting unit exceeded its carrying value by approximately 9% and management concluded that no impairment was necessary.  In the event that market conditions were to remain weak for an extended period of time, the Partnership may be required to record an impairment of goodwill in the future, and such impairment could be material.

A summary of the changes in the carrying amount of goodwill is as follows (in thousands):

	As of
	March 31,		December 31,
	2016		2015
Beginning Balance	$	39,871	$	15,162
Goodwill acquired		-		24,709
Ending Balance	$	39,871	$	39,871

Refer to “Note 3—Acquisitions – JBBR Acquisition” for discussion on the goodwill recorded in the second quarter of 2015 in connection with the JBBR Acquisition (as defined in “Note 2—Summary of Significant Accounting Policies—Fair Value of Financial Instruments” below).  

Deferred Rent

8

The Portland Lease Agreement (as defined in “Note 11—Related Party Transactions—Other Transactions with Related Persons—Operating Lease Agreement”below) contains certain rent escalation clauses, contingent rent provisions and lease termination payments. The Partnership recognizes rent expense for operating leases on a straight-line basis over the term of the lease, taking into consideration the items noted above. Contingent rental payments are generally recognized as rent expense as incurred. The deferred rent resulting from the recognition of rent expense on a straight-line basis related to the Portland Lease Agreement is included within “Other non-current liabilities” in the accompanying unaudited condensed consolidated balance sheets at March 31, 2016 and December 31, 2015.

Contingencies

In the normal course of business, the Partnership may be subject to loss contingencies, such as legal proceedings and claims arising out of its business that cover a wide range of matters. An accrual for a loss contingency is recognized when it is probable that an asset had been impaired or a liability had been incurred and the amount of loss can be reasonably estimated.  If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Partnership’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.  If the estimate of a probable loss is a range and no amount within the range is more likely, the Partnership will accrue the minimum amount of the range.  

There are many uncertainties associated with any legal proceeding and these actions or other third-party claims against us may cause us to incur costly litigation and/or substantial settlement charges. As a result, our business, financial condition, results of operations and cash flows could be adversely affected. The actual liability in any such matters may be materially different from our estimates, if any.

Revenue Recognition

Revenues from leased tank storage and delivery services are recognized as the services are performed, evidence of a contractual arrangement exists and collectability is reasonably assured. Revenues also include the sale of excess products and additives which are mixed with customer-owned liquid products. Revenues for the sale of excess products and additives are recognized when title and risk of loss pass to the customer.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a specified measurement date. Fair value measurements are derived using inputs and assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. GAAP establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This three-tier hierarchy classifies fair value amounts recognized or disclosed in the condensed consolidated financial statements based on the observability of inputs used to estimate such fair values. The classification within the hierarchy of a financial asset or liability is determined based on the lowest level input that is significant to the fair value measurement. The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3). At each balance sheet reporting date, the Partnership categorizes its financial assets and liabilities using this hierarchy.

The amounts reported in the balance sheet for cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value because of the short-term maturities of these instruments (Level 1). Because the Credit Facility (as defined in “Note 7 – Debt – Credit Facility” below) has a market rate of interest, its carrying amount approximated fair value (Level 2).  

In connection with the Partnership’s acquisition, through a joint venture company formed with an affiliate of GE Energy Financial Services (“GE EFS”), of all of the memberships interests of Joliet Bulk, Barge & Rail LLC (“JBBR”) from CenterPoint Properties Trust (“CenterPoint”) for $216.0 million ( the “JBBR Acquisition”), Arc Terminals Joliet Holdings LLC (“Joliet Holdings”) has an earn-out obligation to CenterPoint which was valued at the time of the JBBR Acquisition at approximately $19.7 million.  Refer to “Note 3—Acquisitions – JBBR Acquisition” for further discussion on the JBBR Acquisition. Joliet Holdings’ earn-out obligations to CenterPoint will terminate upon the payment, in the aggregate, of $27.0 million.  The balance of the earn-out liability is included within “Other non-current liabilities” in the accompanying consolidated balance sheets at March 31, 2016 and December 31, 2015.  Since the fair value of the contingent consideration obligation is based primarily upon unobservable inputs, it is classified as Level 3 in the fair value hierarchy.  The contingent consideration obligation will be revalued at each reporting period and changes to the fair value will be recorded as a component of operating income.  Increases or decreases in the fair value of the contingent consideration obligations can result from changes in the assumed timing of revenue and expense estimates.  Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent reporting period.  Accordingly, future business and economic conditions can materially impact the amount of contingent consideration expense we record in any given period.  No revaluation adjustments were necessary during the three months ended March 31, 2016.  For the three months ended March 31, 2016 and 2015, Joliet Holdings has paid $0.3 million and $0 million, respectively, related to the earn-out obligation.  Since the JBBR Acquisition through March 31, 2016, Joliet Holdings has paid $1.2 million of the earn-out to

9

CenterPoint. The following is a reconciliation of the beginning and ending amounts of the contingent consideration obligation related to the JBBR Acquisition (in thousands):

	Balance at				Earn-out			Balance at
	December 31		Revaluation		payments			March 31,
	2015		Adjustments		paid			2016
Liabilities at fair value:
JBBR contingent consideration	$	18,830	$	-	$	(341	)	$	18,489
Total liabilities at fair value	$	18,830	$	-	$	(341	)	$	18,489

The Partnership believes that its valuation methods are appropriate and consistent with the values that would be determined by other market participants. However, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Unit-Based Compensation

The Partnership recognizes all unit-based compensation to directors, officers, employees and other service providers in the consolidated financial statements based on the fair value of the awards.  Fair value for unit-based awards classified as equity awards is determined on the grant date of the award, and this value is recognized as compensation expense ratably over the requisite service or performance period of the equity award. Fair value for equity awards is calculated at the closing price of the common units on the grant date.  Fair value for unit-based awards classified as liability awards is calculated at the closing price of the common units on the grant date and is remeasured at each reporting period until the award is settled.  Compensation expense related to unit-based awards is included in the “Selling, general and administrative” line item in the accompanying unaudited condensed consolidated statements of operations and comprehensive income.

For awards with performance conditions, the expense is accrued over the service period only if the performance condition is considered to be probable of occurring. When awards with performance conditions that were previously considered improbable become probable, the Partnership incurs additional expense in the period that the probability assessment changes (see “Note 9—Equity Plans”).

Net Income Per Unit

The Partnership uses the two-class method in the computation of earnings per unit since there is more than one participating class of securities. Earnings per common and subordinated unit are determined by dividing net income allocated to the common units and subordinated units, respectively, after deducting the amount allocated to the phantom units, if any, by the weighted average number of outstanding common and subordinated units, respectively, during the period. The overall computation, presentation and disclosure of the Partnership’s limited partners’ net income per unit are made in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260 “Earnings per Share.”

Segment Reporting

The Partnership derives revenue from operating its terminal and transloading facilities.  These facilities have been aggregated into one reportable segment because the facilities have similar long-term economic characteristics, products and types of customers.

Noncontrolling Interests

The Partnership applies the provisions of ASC 810 Consolidations, which were amended on January 1, 2009 by ASC 810-10-65 and ASC 810-10-45 (“ASC 810”).  As required by ASC 810, our non-controlling ownership interests in consolidated subsidiaries are presented in the consolidated balance sheet within capital as a separate component from partners’ capital.  In addition, consolidated net income includes earnings attributable to both the partners and the non-controlling interests.  For the three months ended March 31, 2016 and 2015, $2.8 million and $0 million, respectively, of distributions have been made to non-controlling interest holders of consolidated subsidiaries.  Refer to “Note 3—Acquisitions—JBBR Acquisition” for discussion of the JBBR Acquisition which gave rise to the non-controlling interests.  

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue recognition. The update requires that an entity recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update also requires new qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, information about contract balances and performance obligations, and assets recognized from costs incurred to obtain or fulfill a contract. The Partnership is currently evaluating the potential impact of this authoritative guidance on its financial condition, results of operations, cash flows and related disclosures.  In April 2015, the FASB proposed a one-year deferral of the effective date, and therefore, this guidance will be effective for the Partnership beginning in the first quarter of 2018, with early adoption optional but not before the original effective date of December 15, 2016.

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In August 2015, the FASB issued new guidance which adds comments from the SEC related to the presentation of debt issuance costs related to line-of-credit arrangements. The SEC commented it would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Partnership adopted this requirement in the first quarter of 2016 and it had no impact on its financial condition, results of operations, cash flows and related disclosures.

In January 2016, the FASB issued new guidance which requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changesin fair value recognized in net income; requires public business entities to use the exit price notion when measuring fair value of financialinstruments for disclosure purposes; requires separate presentation of financial assets and financial liabilities by measurement category and form offinancial asset (i.e., securities or loans and receivables); and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost. The effective date will be the first quarter of fiscal year 2017. The Partnership does not expect this requirement to have a significant impact on its financial condition, results of operations, cash flows and related disclosures.

In February 2016, the FASB issued new guidance which amends various aspects of existing guidance for leases.   The new guidance requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. The main difference between previous GAAP and the amended standard is the recognition of lease assets and lease liabilities by lessees on the balance sheet for those leases classified as operating leases under previous GAAP. As a result, the Partnership will have to recognize a liability representing its lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. The new guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the effect this standard will have on our consolidated financial position or results of operations.

Note 3 – Acquisitions

Acquisitions

The following acquisitions were accounted for under the acquisition method of accounting whereby management utilized the services of third-party valuation consultants, along with estimates and assumptions provided by management, to estimate the fair value of the net assets acquired. The third-party valuation consultants utilized several appraisal methodologies including income, market and cost approaches to estimate the fair value of the identifiable assets acquired.

Gulf Oil Terminals Acquisition

In January 2016, the Partnership, through its wholly owned subsidiary Arc Terminals Holdings LLC (“Arc Terminals Holdings”), acquired four petroleum products terminals (the “Pennsylvania Terminals”) located in Altoona, Mechanicsburg, Pittston and South Williamsport, Pennsylvania from Gulf Oil Limited Partnership (“Gulf Oil”) for $8.0 million (the “Gulf Oil Terminals Acquisition”).  In connection with this acquisition, the Partnership also acquired an option to purchase from Gulf Oil at an agreed upon purchase price additional land with storage tanks located adjacent to one of the Pennsylvania Terminals.  At closing, the Partnership entered into a take-or-pay terminal services agreement with Gulf Oil with an initial term of two years.  The throughput and related services provided by the Partnership to Gulf Oil under the terminal services agreement are provided at the Pennsylvania Terminals, as well as several of the Partnership’s other petroleum products terminals.  The acquisition was financed with a combination of available cash and borrowings under the Credit Facility.  As of the issuance of this quarterly report, the Partnership had not concluded its assessment of the fair values of the net assets acquired as provided in ASC Topic 805, “Business Combinations” (“ASC 805”).

The Gulf Oil Terminals Acquisition was accounted for as a business combination in accordance with ASC 805.  The Gulf Oil Terminals Acquisition purchase price equaled the approximately $8.0 million fair value of the identifiable assets acquired and accordingly, the Partnership did not recognize any goodwill as a part of the Gulf Oil Terminals Acquisition.  Transaction costs incurred by the Partnership in connection with the acquisition, consisting primarily of legal and other professional fees, totaled approximately $0.5 million and were expensed as incurred in accordance with ASC 805.  Management is currently reviewing the valuation of the net assets acquired in connection with the Gulf Oil Terminals Acquisition to determine the final purchase price allocation, which is expected to be completed by the third quarter of 2016.

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The total preliminary purchase price of $8.0 million was preliminarily allocated to the net assets acquired as follows (in thousands):

Consideration:
Cash paid to seller	$	8,000
Total consideration	$	8,000
Allocation of purchase price:
Property and equipment	$	8,000
Net assets acquired	$	8,000

Since the Gulf Oil Terminals Acquisition closing date in January 2016 through March 31, 2016, the Pennsylvania Terminals have generated approximately $0.4 million in revenue and less than $0.1 million of operating losses.  

The unaudited pro forma results related to the Gulf Oil Terminals Acquisition have been excluded as the nature of the revenue-producing activities previously associated with the Pennsylvania Terminals has changed substantially post-acquisition from intercompany revenue to third-party generated revenue.  In addition, historical financial information for the Pennsylvania Terminals prior to the acquisition is not indicative of how the Pennsylvania Terminals are being operated since the Partnership’s acquisition and would be of no comparative value in understanding the future operations of the Pennsylvania Terminals.  

JBBR Acquisition

In May 2015, the Partnership and an affiliate of GE EFS, through Joliet Holdings, purchased all of the membership interests in JBBR from CenterPoint for a base cash purchase price of $216.0 million (“JBBR Purchase Price”).  Joliet Holdings is also required to pay to CenterPoint earn-out payments for each barrel of crude oil that is either delivered to or received by the Joliet Terminal (as defined below) (without duplication) or for which JBBR receives payment under minimum volume commitments regardless of actual throughput activity. Joliet Holdings’ earn-out obligations to CenterPoint will terminate upon the payment, in the aggregate, of $27.0 million.  JBBR owns, among other things, a petroleum products terminal and 4-mile crude oil pipeline located in Joliet, Illinois (“Joliet Terminal”).  To finance the Partnership’s portion of the consideration payable by it in connection with the JBBR Acquisition, the Partnership sold 4,520,795 common units at a price of $16.59 per unit in a private placement for proceeds totaling $72.7 million after placement agent commissions and expenses.  In addition, the Partnership borrowed $61.0 million under its Credit Facility to partially finance the balance of the purchase price payable by it at the closing of the JBBR Acquisition.    

Joliet Holdings is consolidated under the voting interest model in the Partnership’s operating results.  The GE EFS ownership interest in Joliet Holdings is presented separately as a non-controlling interest.  

The JBBR Acquisition was accounted for as a business combination in accordance with ASC 805.  In accordance with ASC 805, the Partnership recorded $19.7 million of additional consideration related to Joliet Holdings’s earn-out payments as contingent consideration.   The $19.7 million is recorded on the balance sheet of the Partnership as a liability and will be reduced by future earn-out payments made to CenterPoint. This liability is subject to remeasurement each reporting period until the full amount of the earn-out has been satisfied.   The JBBR Purchase Price exceeded the $211.0 million fair value of the identifiable assets acquired and accordingly, the Partnership recognized goodwill of $24.7 million.  The Partnership believes the primary items that generated goodwill are the expected ability to grow the acquired business by leveraging its existing customer relationships and by attracting new customers based on the strategic location of the Joliet Terminal.  Furthermore, the Partnership expects that the entire amount of its recorded goodwill will be deductible for tax purposes.  Transaction costs incurred by the Partnership in connection with the acquisition, consisting primarily of legal and other professional fees, totaled $1.3 million and were expensed as incurred in accordance with ASC 805 and included in the “Selling, general and administrative” line item in the accompanying consolidated statement of operations and comprehensive income. Management has finalized the valuation of the net assets acquired in connection with the JBBR Acquisition and the final purchase price allocation has been determined.

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The following table summarizes the consideration paid and the assets acquired at the JBBR Acquisition closing date (in thousands):

Consideration:
Cash paid to seller	$	216,000
Earn-out liability recognized		19,700
Total consideration	$	235,700
Allocation of purchase price:
Property and equipment	$	156,991
Intangible assets		54,000
Goodwill		24,709
Net assets acquired	$	235,700

The unaudited pro forma results pursuant to ASC 805 related to the JBBR Acquisition have been excluded as the Joliet Terminal was under construction prior to the consummation of the JBBR Acquisition and therefore there were no revenue-producing activities previously associated with the Joliet Terminal. The Joliet Terminal, post-acquisition, is now operating and is generating revenue.  In addition, the historical financial information for the Joliet Terminal prior to the acquisition is not indicative of how the Joliet Terminal is being operated since the JBBR Acquisition and would be of no comparative value in understanding the future operations of the Joliet Terminal.  

Pawnee Terminal Acquisition

In July 2015, the Partnership, through its wholly owned subsidiary Arc Terminals Holdings, acquired all of the limited liability company interests of UET Midstream, LLC (“UET Midstream”) from United Energy Trading, LLC (“UET”) and Hawkeye Midstream, LLC (together with UET, the “Pawnee Sellers”) for total consideration (net of certain adjustments) of $76.6 million (the “Pawnee Purchase Price”), consisting of $44.3 million in cash and $32.3 million in common units of the Partnership (the “Pawnee Terminal Acquisition”). UET Midstream’s principal assets consist of a newly constructed, substantially completed crude oil terminal and a nearby development property in northeastern Weld County, Colorado (“Pawnee Terminal”).  The number of common units issued to the Pawnee Sellers at the closing of the Pawnee Terminal Acquisition was based upon an issuance price of $18.50 per unit, which resulted in the issuance of 1,745,669 of the Partnership’s common units (“Pawnee Transaction Units”).  The fair value of the Pawnee Transaction Units on the closing date was $17.30 per unit (based upon the closing price of the Partnership’s common unit price on the closing date), which resulted in a further reduction of the Pawnee Purchase Price, recognized for accounting purposes, of $2.1 million. In connection with the issuance of the common units to the Pawnee Sellers, the Partnership entered into an agreement with the Pawnee Sellers granting the Pawnee Sellers certain registration rights.  Arc Terminals is responsible for completing the remaining construction of the Pawnee Terminal and the costs thereof are estimated to be approximately $11.0 million.  The Partnership recorded $4.5 million of liabilities related to the construction costs that had been completed, but not paid, as of the closing date.  The $4.5 million is recorded on the balance sheet as a current liability and will be reduced by any payments made to satisfy the identified construction costs.  As of March 31, 2016, the Partnership had $2.0 million remaining on the balance sheet as a current liability related to the construction liability acquired.  The Partnership expects construction of the Pawnee Terminal to be completed in 2016.

The Pawnee Terminal Acquisition was accounted for as a business combination in accordance with ASC Topic 805, “Business Combinations” (“ASC 805”).  The Pawnee Terminal Acquisition purchase price equaled the $74.5 million fair value of the identifiable assets acquired and accordingly, the Partnership did not recognize any goodwill as a part of the Pawnee Terminal Acquisition.  Transaction costs incurred by the Partnership in connection with the acquisition, consisting primarily of legal and other professional fees, totaled $1.8 million and were expensed as incurred in accordance with ASC 805.  Management has finalized the valuation of the net assets acquired in connection with the Pawnee Terminal Acquisition and the final purchase price allocation has been determined.  

The following table summarizes the consideration paid and the assets acquired at the Pawnee Terminal Acquisition closing date (in thousands):

Consideration:
Cash paid to seller	$	44,332
Fair value of equity issued to seller		30,200
Total consideration	$	74,532
Allocation of purchase price:
Property and equipment	$	23,613
Intangible assets		55,442
Less: liabilities assumed		(4,523	)
Net assets acquired	$	74,532

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The unaudited pro forma operating results pursuant to ASC 805 related to the Pawnee Terminal Acquisition have been excluded due to immateriality.  

Note 4—Investment in Unconsolidated Affiliate

The Partnership accounts for investments in limited liability companies under the equity method of accounting unless the Partnership’s interest is deemed to be so minor that it may have virtually no influence over operating and financial policies. “Investment in unconsolidated affiliate” consisted of the LNG Interest, and its balances as of March 31, 2016 and December 31, 2015 are represented below (in thousands):

Balance at December 31, 2015	$	74,399
Equity earnings		2,461
Contributions		-
Distributions		(2,179	)
Amortization of premium		(77	)
Other comprehensive income		(896	)
Balance at March 31, 2016	$	73,708

Investment in Gulf LNG Holdings

In November 2013, the Partnership purchased the LNG Interest from an affiliate of GE EFS for $72.7 million. The carrying value of the LNG Interest on the date of acquisition was $64.1 million and therefore the excess amount paid, by the Partnership, over the carrying value was $8.6 million. This excess can be attributed to the underlying long lived assets of Gulf LNG Holdings and is therefore being amortized using the straight line method over the remaining useful lives of the respective assets, which is 28 years. The estimated aggregate amortization of this premium for its remaining useful life from March 31, 2016 is as follows (in thousands):

	Total
2016	$	232
2017		309
2018		309
2019		309
2020		309
Thereafter		6,444
	$	7,912

Summarized financial information for Gulf LNG Holdings is reported below (in thousands):

	March 31,		December 31,
	2016		2015
Balance sheets
Current assets	$	5,554	$	7,523
Noncurrent assets		881,255		889,655
Total assets	$	886,809	$	897,178
Current liabilities	$	75,735	$	79,970
Long-term liabilities		675,233		678,926
Member’s equity		135,841		138,282
Total liabilities and member’s equity	$	886,809	$	897,178

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	Three Months Ended
	March 31,
	2016		2015
Income statements
Revenues	$	46,484	$	46,624
Total operating costs and expenses		13,855		14,206
Operating income		32,629		32,418
Net income	$	23,845	$	24,165

LNG Facility Arbitration

On March 1, 2016, an affiliate of Gulf LNG Holdings received a Notice of Disagreement and Disputed Statements and a Notice of Arbitration from Eni USA Gas Marketing L.L.C. (“Eni USA”), one of the two companies that had entered into a terminal use agreement for capacity of the LNG Facility.  Eni USA is an indirect subsidiary of Eni S.p.A., a multi-national integrated energy company headquartered in Milan, Italy.  Pursuant to the Notice of Arbitration, Eni USA seeks declaratory and monetary relief in respect of its terminal use agreement, asserting that (i) the terminal use agreement should be terminated because changes in the U.S. natural gas market since the execution of the agreement in December 2007 have “frustrated the essential purpose” of the agreement and (ii) the activities undertaken by affiliates of Gulf LNG Holdings “in connection with a plan to convert the LNG Facility into a liquefaction/export facility have given rise to a contractual right on the part of Eni USA to terminate” the terminal use agreement. 

Affiliates of Kinder Morgan, Inc., which control Gulf LNG Holdings and operate the LNG Facility, have expressed to us that they view the assertions by Eni USA to be without merit, and that they intend to vigorously contest the assertions set forth by Eni USA.  Although we do not control Gulf LNG Holdings, we also are of the view that the assertions made by Eni USA are without merit. As contemplated by the terminal use agreement, disputes are meant to be resolved by final and binding arbitration, and no date has been set for such arbitration. Eni USA has advised Gulf LNG Holdings’ affiliates that it shall continue to pay the amounts claimed to be due under the terminal use agreement pending resolution of the dispute.  

If the assertions by Eni USA are ultimately successful, our business, financial conditions and results of operations and our ability to make cash distributions to our unitholders would be materially adversely affected.  For the three months ended March 31, 2016, 18% and 24% of our Adjusted EBITDA and Distributable Cash Flow, respectively, were associated with our LNG Interest.  For the three months ended March 31, 2015, 34% and 33% of our Adjusted EBITDA and Distributable Cash Flow, respectively, were associated with our LNG Interest.  We are unable at this time to predict the amount of the legal fees in this matter that will be allocable to our LNG Interest.

Note 5—Property, Plant and Equipment

The Partnership’s property, plant and equipment consisted of (in thousands):

	As of
	March 31,			December 31,
	2016			2015
Land	$	78,455		$	74,855
Buildings and site improvements		78,483			77,514
Tanks and trim		114,523			111,076
Pipelines		20,364			20,364
Machinery and equipment		119,098			118,503
Office furniture and equipment		730			561
Construction in progress		17,678			12,306
		429,331			415,179
Less:  Accumulated depreciation		(38,160	)		(34,508	)
Property, plant and equipment, net	$	391,171		$	380,671

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Note 6—Intangible Assets

The Partnership’s intangible assets consisted of (in thousands):

	Estimated	As of
	Useful Lives	March 31,			December 31,
	in Years	2016			2015
Customer relationships	21	$	4,785		$	4,785
Acquired contracts	2-12		149,342			149,342
Non-compete agreements	2-3		741			741
			154,868			154,868
Less:  Accumulated amortization			(26,367	)		(22,747	)
Intangible assets, net		$	128,501		$	132,121

The Partnership’s intangible assets are amortized on a straight-line basis over the expected life of each intangible asset. The estimated future amortization expense is approximately $10.8 million for the remainder of 2016, $14.0 million in 2017, $12.8 million in 2018, $12.2 million in 2019, $12.2 million in 2020 and $66.5 million thereafter.

Note 7—Debt

Credit Facility

In November 2013, concurrent with the closing of the IPO, the Partnership entered into the Second Amended and Restated Revolving Credit Agreement (the “Credit Facility”) with a syndicate of lenders, under which Arc Terminals Holdings is the borrower. After several amendments, the Credit Facility currently has up to $300.0 million of borrowing capacity. As of March 31, 2016, the Partnership had borrowings of $240.3 million under the Credit Facility at an interest rate of 3.44%. During the first and second quarters of 2015, the Partnership had a $10 million letter of credit outstanding under its letter of credit sub-facility, which was issued in connection with the JBBR Acquisition. This letter of credit was extinguished when the JBBR Acquisition closed in May 2015.  Based on the restrictions under the total leverage ratio covenant, as of March 31, 2016, the Partnership had $33.8 million of available capacity under the Credit Facility.

The Credit Facility is available to fund working capital and to finance capital expenditures and other permitted payments and for other lawful corporate purposes and allows the Partnership to request that the maximum amount of the Credit Facility be increased by up to an aggregate principal amount of $100.0 million, subject to receiving increased commitments from lenders or commitments from other financial institutions. The Credit Facility is available for revolving loans, including a sublimit of $5.0 million for swing line loans and a sublimit of $20.0 million for letters of credit. The Partnership’s obligations under the Credit Facility are secured by a first priority lien on substantially all of the Partnership’s material assets (other than the LNG Interest and the assets owned by JBBR and its subsidiaries). The Partnership and each of the Partnership’s existing restricted subsidiaries (other than the borrower) guarantee, and each of the Partnership’s future restricted subsidiaries will also guarantee, the Credit Facility. The Credit Facility matures in November 2018.

Loans under the Credit Facility bear interest at a floating rate, based upon the Partnership’s total leverage ratio, equal to, at the Partnership’s option, either (a) a base rate plus a range from 100 to 200 basis points per annum or (b) a LIBOR rate, plus a range of 200 to 300 basis points. The base rate is established as the highest of (i) the rate which SunTrust Bank announces, from time to time, as its prime lending rate, (ii) the daily one-month LIBOR plus 100 basis points per annum and (iii) the federal funds rate plus 50 basis points per annum. The unused portion of the Credit Facility is subject to a commitment fee calculated based upon the Partnership’s total leverage ratio ranging from 0.375% to 0.50% per annum. Upon any event of default, the interest rate will, upon the request of the lenders holding a majority of the commitments, be increased by 2.0% on overdue amounts per annum for the period during which the event of default exists.

The Credit Facility contains certain customary representations and warranties, affirmative covenants, negative covenants and events of default. As of March 31, 2016, the Partnership was in compliance with such covenants. The negative covenants include restrictions on the Partnership’s ability to incur additional indebtedness, acquire and sell assets, create liens, enter into certain lease agreements, make investments and make distributions.

The Credit Facility requires the Partnership to maintain a total leverage ratio of not more than 4.50 to 1.00, which may increase to up to 5.00 to 1.00 during specified periods following a material permitted acquisition or issuance of over $200.0 million of senior notes, and a minimum interest coverage ratio of not less than 2.50 to 1.00. If the Partnership issues over $200.0 million of senior notes, the Partnership will be subject to an additional financial covenant pursuant to which the Partnership’s secured leverage ratio must not be more than 3.50 to 1.00. The Credit Facility places certain restrictions on the issuance of senior notes.

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If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the Credit Facility, termination of the commitments under the Credit Facility and all remedial actions available to a secured creditor. The events of default include customary events for a financing agreement of this type, including, without limitation, payment defaults, material inaccuracies of representations and warranties, defaults in the performance of affirmative or negative covenants (including financial covenants), bankruptcy or related defaults, defaults relating to judgments, nonpayment of other material indebtedness and the occurrence of a change in control. In connection with the Credit Facility, the Partnership and the Partnership’s subsidiaries have entered into certain customary ancillary agreements and arrangements, which, among other things, provide that the indebtedness, obligations and liabilities arising under or in connection with the Credit Facility are unconditionally guaranteed by the Partnership and each of the Partnership’s existing restricted subsidiaries (other than the borrower) and each of the Partnership’s future restricted subsidiaries.

First Amendment

In January 2014, Arc Terminals Holdings, together with the Partnership and certain of its other subsidiaries, as guarantors, entered into the First amendment to the Credit Facility (the “First Amendment”). The First Amendment principally modified certain provisions of the Credit Facility to allow Arc Terminals Holdings to enter into the Portland Lease Agreement relating to the use of petroleum products terminals and pipeline infrastructure located in Portland, Oregon (the “Portland Terminal”).

Second Amendment

In May 2015, Arc Terminals Holdings, together with the Partnership and certain of its other subsidiaries, as guarantors, entered into the Second Amendment to the Credit Facility (the “Second Amendment”) as part of its financing for the JBBR Acquisition.  Upon the consummation of the JBBR Acquisition in May 2015, the aggregate commitments under the Credit Facility increased from $175 million to $275 million.  In addition, the sublimit for letters of credit was increased from $10 million to $20 million.  

Third Amendment

In July 2015 and in connection with the Pawnee Terminal Acquisition, Arc Terminals Holdings, together with the Partnership and certain of its other subsidiaries, as guarantors, entered into the third amendment to the Credit Facility (the “Third Amendment”).  The Third Amendment principally modifies certain provisions of the Credit Facility (i) to permit the consummation of the Pawnee Terminal Acquisition and (ii) to increase the aggregate commitments under the Credit Facility from $275 million to $300 million.

Note 8—Partners’ Capital and Distributions

Cash Distributions

The table below summarizes the quarterly distributions related to the Partnership’s quarterly financial results (in thousands, except per unit data):

	Total Quarterly		Total Cash		Date of	Unitholders
Quarter Ended	Distribution Per Unit		Distribution		Distribution	Record Date
March 31, 2016	$	0.4400	$	8,475	May 13, 2016	May 9, 2016
December 31, 2015	$	0.4400	$	8,472	February 12, 2016	February 8, 2016
September 30, 2015	$	0.4400	$	8,472	November 13, 2015	November 9, 2015
June 30, 2015	$	0.4250	$	8,181	August 14, 2015	August 10, 2015
March 31, 2015	$	0.4100	$	5,309	May 15, 2015	May 11, 2015

Cash Distribution Policy

The Partnership’s partnership agreement (the “Partnership Agreement”) provides that the General Partner will make a determination no less frequently than each quarter as to whether to make a distribution, but the Partnership Agreement does not require the Partnership to pay distributions at any time or in any amount. Instead, the board of directors of the General Partner (the “Board”) has adopted a cash distribution policy that sets forth the General Partner’s intention with respect to the distributions to be made to unitholders. Pursuant to the cash distribution policy, within 60 days after the end of each quarter, the Partnership expects to distribute to the holders of common and subordinated units on a quarterly basis at least the minimum quarterly distribution of $0.3875 per unit, or $1.55 per unit on an annualized basis, to the extent the Partnership has sufficient cash after establishment of cash reserves and payment of fees and expenses, including payments to the General Partner and its affiliates.

The Board may change the foregoing distribution policy at any time and from time to time, and even if the cash distribution policy is not modified or revoked, the amount of distributions paid under the policy and the decision to make any distribution is determined solely by the General Partner. As a result, there is no guarantee that the Partnership will pay the minimum quarterly distribution, or any distribution, on the units in any quarter. However, the partnership agreement contains provisions intended to motivate the General Partner to make steady, increasing and sustainable distributions over time.

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The Partnership Agreement generally provides that the Partnership will distribute cash each quarter in the following manner:

● first, to the holders of common units, until each common unit has received the minimum quarterly distribution of $0.3875 plus any arrearages from prior quarters;

● second, to the holders of subordinated units, until each subordinated unit has received the minimum quarterly distribution of $0.3875; and

● third, to all unitholders pro rata, until each has received a distribution of $0.4456.

If cash distributions to the Partnership’s unitholders exceed $0.4456 per unit in any quarter, the Partnership’s unitholders and the General Partner, as the initial holder of the incentive distribution rights, will receive distributions according to the following percentage allocations:

Total Quarterly Distribution Per Unit Target Amount	Marginal Percentage Interest in Distributions
	Unitholders			General Partner
above $0.3875 up to $0.4456		100.0	%		0.0	%
above $0.4456 up to $0.4844		85.0	%		15.0	%
above $0.4844 up to $0.5813		75.0	%		25.0	%
above $0.5813		50.0	%		50.0	%

The Partnership refers to additional increasing distributions to the General Partner as “incentive distributions.”

The principal difference between the Partnership’s common units and subordinated units is that in any quarter during the subordination period, holders of the subordinated units are not entitled to receive any distributions from operating surplus until the common units have received the minimum quarterly distribution for such quarter plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. Subordinated units will not accrue arrearages.

The subordination period will end on the first business day after the Partnership has earned and paid at least (1) $1.55 (the minimum quarterly distribution on an annualized basis) on each outstanding common unit and subordinated unit for each of three consecutive, non-overlapping four quarter periods ending on or after September 30, 2016 or (2) $2.325 (150.0% of the annualized minimum quarterly distribution) on each outstanding common unit and subordinated unit and the related distribution on the incentive distribution rights for a four-quarter period ending immediately preceding such date, in each case provided there are no arrearages on the Partnership’s common units at that time.

The subordination period will also end upon the removal of the General Partner other than for cause if no subordinated units or common units held by holder(s) of subordinated units or their affiliates are voted in favor of that removal. When the subordination period ends, all subordinated units will convert into common units on a one-for-one basis, and all common units thereafter will no longer be entitled to arrearages.

Note 9—Equity Plans

2013 Long-Term Incentive Plan

The Board approved and adopted the Arc Logistics Long-Term Incentive Plan (the “2013 Plan”) in November 2013.  In July 2014, the Board formed a Compensation Committee (the “Compensation Committee”) to administer the 2013 Plan.  Effective as of March 2015, the Board dissolved the Compensation Committee and, on and after such date, the Board serves as the administrative committee (the “Committee”) under the 2013 Plan.  Employees (including officers), consultants and directors of the General Partner, the Partnership and its affiliates (the “Partnership Entities”) are eligible to receive awards under the 2013 Plan.  The 2013 Plan authorizes up to an aggregate of 2.0 million common units to be available for awards under the 2013 Plan, subject to adjustment as provided in the 2013 Plan.  Awards available for grant under the 2013 Plan include, but are not limited to, restricted units, phantom units, unit options, and unit appreciation rights, but only phantom units have been granted under the 2013 Plan to date. Distribution equivalent rights (“DER”) are also available for grant under the 2013 Plan, either alone or in tandem with other specific awards, which entitle the recipient to receive an amount equal to distributions paid on an outstanding common unit.  Upon the occurrence of a “change of control” or an award recipient’s termination of service due to death or “disability” (each quoted term, as defined in the 2013 Plan), any outstanding unvested award will vest in full.  

In July 2014, the Compensation Committee authorized the grant of an aggregate of 939,500 phantom units pursuant to the 2013 Plan to certain employees, consultants and non-employee directors of the Partnership Entities. Awards of phantom units are settled in common units, except that an award of less than 1,000 phantom units is settled in cash. If a phantom unit award recipient experiences a termination of service with the Partnership Entities other than (i) as a result of death or “disability” or (ii) due to certain circumstances in connection with a “change of control,” the Committee, at its sole discretion, may decide to vest all or any portion of

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the recipient’s unvested phantom units as of the date of such termination or may allow the unvested phantom units to remain outstanding and vest pursuant to the vesting schedule set forth in the applicable award agreement.

Of the July 2014 awards, a total of 100,000 phantom units were granted to certain non-employee directors of the Board and are classified as equity awards for accounting purposes (the “Director Grants”).  Each Director Grant will be settled in common units and includes a DER. The Director Grants have an aggregate grant date fair value of $2.5 million and vest in equal annual installments over a three-year period starting from the date of grant. For the three months ended March 31, 2016 and 2015, the Partnership recorded approximately $0.2 million and $0.2 million, respectively, of unit-based compensation expense with respect to the Director Grants. As of March 31, 2016, the unrecognized unit-based compensation expense for the Director Grants is approximately $1.1 million, which will be recognized ratably over the remaining term of the awards.  In July 2015, one-third of the phantom units granted under the Director Grants vested.  

Of the July 2014 awards, a total of 832,000 phantom units were granted to employees and certain consultants of the Partnership Entities and are classified as equity awards for accounting purposes (the “Employee Equity Grants”).  Each Employee Equity Grant will be settled in common units and includes a DER.  The Employee Equity Grants have an aggregate grant date fair value of $21.2 million and vest as follows: (i) 25% of the Employee Equity Grants will vest the day after the end of the Subordination Period (as defined in the Partnership Agreement); and (ii) the three remaining 25% installments of the Employee Equity Grants will vest based on the date on which the Partnership has paid, for three consecutive quarters, distributions to its common and subordinated unitholders at or above a stated level, with (A) 25% of the award vesting after distributions are paid at or above $0.4457 per unit for the required period, (B) 25% of the award vesting after distributions are paid at or above $0.4845 per unit for the required period, and (C) the last 25% of the award vesting after distributions are paid at or above $0.5814 per unit for the required period.  To the extent not previously vested, the Employee Equity Grants expire on the fifth anniversary of the date of grant, provided that the expiration date can be extended to the eighth anniversary of the date of grant or longer upon the satisfaction of certain conditions specified in the award agreement.  For the three months ended March 31, 2016 and 2015, the Partnership recorded approximately $0.8 million and $1.3 million, respectively, of unit-based compensation expense with respect to the Employee Equity Grants. As of March 31, 2016, the unrecognized unit-based compensation expense for the Employee Equity Grants was approximately $13.0 million, which may be recognized variably over the remaining term of the awards based on the probability of the achievement of the performance vesting requirements.  

Of the July 2014 awards, a total of 7,500 phantom units were granted to certain employees of the Partnership Entities and are classified as liability awards for accounting purposes (the “Employee Liability Grants”).  Each Employee Liability Grant will be settled in cash (as such award consists of less than 1,000 phantom units) and includes a DER. The Employee Liability Grants have an aggregate grant date fair value of $0.2 million and have the same term and vesting requirements as the Employee Equity Grants described in the preceding paragraph.  For the three months ended March 31, 2016 and 2015, the Partnership recorded less than $0.1 million of unit-based compensation expense during each period, with respect to the Employee Liability Grants.  As of March 31, 2016, the unrecognized unit based compensation expense for the Employee Liability Grants was approximately $0.1 million, which may be recognized variably over the remaining term of the awards based on the probability of the achievement of the performance vesting requirements and is subject to remeasurement each reporting period until the awards settle.

In March 2015, the Board authorized the grant of an aggregate of 45,668 phantom units pursuant to the 2013 Plan to certain employees, consultants and non-employee directors of the Partnership Entities (“2015 Equity Grants”).  Each 2015 Equity Grant will be settled in common units and includes a DER.  The 2015 Equity Grants are classified as equity awards for accounting purposes and have an aggregate grant date fair value of $0.9 million and vest in equal annual installments over a three-year period starting from the date of grant.  For the three months ended March 31, 2016 and 2015, the Partnership recorded less than $0.1 million of unit-based compensation expense during each period, with respect to the 2015 Equity Grants.  As of March 31, 2016, the unrecognized unit-based compensation expense for the 2015 Equity Grants is approximately $0.5 million, which will be recognized ratably over the remaining term of the awards.    In March 2016, one-third of the phantom units granted under the 2015 Equity Grants vested.  

During the year ended December 31, 2015, the Board and Chief Executive Officer authorized the grant of an aggregate of 57,100 phantom units pursuant to the 2013 Plan to certain employees of the Partnership Entities (“2015 Performance Grants”).  Each 2015 Performance Grant will be settled in common units and includes a DER.  The 2015 Performance Grants are classified as equity awards for accounting purposes and have an aggregate grant date fair value of $1.0 million and have the same term and vesting requirements as the Employee Equity Grants described above.  For the three months ended March 31, 2016 and 2015, the Partnership recorded less than $0.1 million of unit-based compensation expense during each period, with respect to the 2015 Performance Grants.  As of March 31, 2016, the unrecognized unit-based compensation expense for the 2015 Performance Grants is approximately $0.8 million, which may be recognized variably over the remaining term of the awards based on the probability of the achievement of the performance vesting requirements.

During the three months ended March 31, 2016, the Board authorized the grant of an aggregate of 80,500 phantom units pursuant to the 2013 Plan to certain employees and consultants of the Partnership Entities (“2016 Equity Grants”).  Each 2016 Equity Grant will be settled in common units and includes a DER.  The 2016 Equity Grants are classified as equity awards for accounting purposes and have an aggregate grant date fair value of $0.9 million and vest in equal annual installments over a three-year period starting from the date of grant.  For the three months ended March 31, 2016, the Partnership recorded less than $0.1 million of unit-based compensation expense with respect to the 2016 Equity Grants.  As of March 31, 2016, the unrecognized unit-based

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compensation expense for the 2016 Equity Grants is approximately $0.9 million, which will be recognized ratably over the remaining term of the awards.  

Subject to applicable earning criteria, the DER included in each phantom unit award described above entitles the award recipient to a cash payment (or, if applicable, payment of other property) equal to the cash distribution (or, if applicable, distribution of other property) paid on an outstanding common unit to unitholders generally based on the number of common units related to the portion of the award recipient’s phantom units that have not vested and been settled as of the record date for such distribution.  Cash distributions paid during the vesting period on phantom units that are classified as equity awards for accounting purposes are reflected initially as a reduction of partners’ capital.  Cash distributions paid on such equity awards that are not initially expected to vest or ultimately do not vest are classified as compensation expense.  As the probability of vesting changes, these initial categorizations could change.  Cash distributions paid during the vesting period on phantom units that are classified as liability awards for accounting purposes are reflected as compensation expense and included in the “Selling, general and administrative” line item in the accompanying unaudited condensed consolidated statements of operations and comprehensive income. During the three months ended March 31, 2016 and 2015, the Partnership paid approximately $0.4 million, during each period, in DERs to phantom unit holders. For the three months ended March 31, 2016 and 2015, $0.2 million, during each period, was reflected as a reduction of partners’ capital, and the other $0.2 million, during each period, was reflected as compensation expense and included in the “Selling, general and administrative” line item in the accompanying unaudited condensed consolidated statements of operations and comprehensive income.  

The total compensation expense related to the 2013 Plan for the three months ended March 31, 2016 and 2015 was $1.1 million and $1.5 million, respectively, which was included in the “Selling, general and administrative” line item in the accompanying unaudited condensed consolidated statements of operations and comprehensive income. The amount recorded as liabilities in “Other non-current liabilities” in the accompanying unaudited condensed consolidated balance sheet as of March 31, 2016 was less than $0.1 million.

The following table presents phantom units granted pursuant to the 2013 Plan:

	Equity Awards					Liability Awards
	Three Months Ended					Three Months Ended
	March 31, 2016					March 31, 2016
	Number			Weighted Avg.		Number			Weighted Avg.
	of Phantom			Grant Date		of Phantom			Grant Date		Fair Value at
	Units			Fair Value		Units			Fair Value		3/31/2016
Balance at December 31, 2015		985,272		$	24.76		7,200		$	25.46	$	10.23
Granted		80,500		$	11.73		-		$	-	$	-
Vested		(8,551	)	$	19.13		-		$	-	$	-
Forfeited		(6,000	)	$	25.46		(200	)	$	25.46	$	-
Balance at March 31, 2016		1,051,221		$	23.84		7,000		$	25.46	$	10.23

Note 10—Earnings Per Unit

The Partnership uses the two-class method when calculating the net income per unit applicable to limited partners. The two-class method is based on the weighted-average number of common and subordinated units outstanding during the period. Basic net income per unit applicable to limited partners (including subordinated unitholders) is computed by dividing limited partners’ interest in net income, after deducting distributions, if any, by the weighted-average number of outstanding common and subordinated units. Payments made to the Partnership’s unitholders are determined in relation to actual distributions paid and are not based on the net income allocations used in the calculation of net income per unit.

Diluted net income per unit applicable to limited partners includes the effects of potentially dilutive units on the Partnership’s units. For the three months ended March 31, 2016 and 2015, the only potentially dilutive units outstanding consisted of the phantom units (see “Note 9—Equity Plans”). For the three months ended March 31, 2016 and 2015, none of the phantom units are considered outstanding and therefore there were no potentially dilutive units outstanding.

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The following table sets forth the calculation of basic and diluted earnings per limited partner unit for the periods indicated (in thousands, except per unit data):

	Three Months Ended
	March 31,
	2016		2015
Net Income attributable to partners' capital	$	3,116	$	304
Less:
Distribution equivalent rights for unissued units		274		230
Net income available to limited partners	$	2,842	$	74
Numerator for basic and diluted earnings per limited partner unit:
Allocation of net income among limited partner interests:
Net income allocated to common unitholders	$	1,945	$	39
Net income (loss) allocated to subordinated unitholders	$	897	$	35
Net income allocated to limited partners:	$	2,842	$	74
Denominator for basic and diluted earnings per limited partner unit:
Common units - (basic and diluted)		13,176		6,868
Subordinated units - (basic and diluted)		6,081		6,081
Earnings (loss) per limited partner unit:
Common - (basic and diluted)	$	0.15	$	0.01
Subordinated - (basic and diluted)	$	0.15	$	0.01

Note 11—Related Party Transactions

Agreements with Affiliates

Payments to the General Partner and its Affiliates

The General Partner conducts, directs and manages all activities of the Partnership. The General Partner is reimbursed on a monthly basis, or such other basis as may be determined, for: (i) all direct and indirect expenses it incurs or payments it makes on behalf of the Partnership and its subsidiaries; and (ii) all other expenses allocable to the Partnership and its subsidiaries or otherwise incurred by the General Partner in connection with operating the Partnership and its subsidiaries’ businesses (including expenses allocated to the General Partner by its affiliates).

For the three months ended March 31, 2016 and 2015, the General Partner incurred expenses of $1.3 million and $1.1 million, respectively.  Such expenses are reimbursable from the Partnership and are reflected in the “Selling, general and administrative – affiliate” line on the accompanying unaudited condensed consolidated statements of operations and comprehensive income. As of March 31, 2016 and December 31, 2015, the Partnership had a payable of approximately $1.1 million and $0.6 million, respectively, to the General Partner, which is reflected as “Due to general partner” in the accompanying unaudited condensed consolidated balance sheets.

Registration Rights Agreement

In connection with the IPO, the Partnership entered into a registration rights agreement with the Sponsor.  Pursuant to the registration rights agreement, the Partnership is required to file, upon request of the Sponsor, a registration statement to register the common units issued to the Sponsor and the common units issuable upon the conversion of the subordinated units held by the Sponsor.  In addition, the registration rights agreement gives the Sponsor piggyback registration rights under certain circumstances.  The registration rights agreement also includes provisions dealing with holdback agreements, indemnification and contribution and allocation of expenses.  These registration rights are transferable to affiliates and, in certain circumstances, to third parties.

Other Transactions with Related Persons

GCAC Guarantee

GCAC guarantees up to $20 million of the Partnership’s Credit Facility. Under certain circumstances, the lenders may release GCAC from such guarantee.

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Storage and Throughput Agreements with Center Oil

During 2007, the Partnership acquired seven terminals from Center Oil for $35.0 million in cash and 750,000 subordinated units in the Partnership. In connection with this purchase, the Partnership entered into a storage and throughput agreement with Center Oil whereby the Partnership provides storage and throughput services for various petroleum products to Center Oil at the terminals acquired by the Partnership in return for a fixed per barrel fee for each outbound barrel of Center Oil product shipped or committed to be shipped. The throughput fee is calculated and due monthly based on the terms and conditions as set forth in the storage and throughput agreement. In addition to the monthly throughput fee, Center Oil is required to pay the Partnership a fixed per barrel fee for any additives added into Center Oil’s product.

In December 2015, the Partnership extended the term of the storage and throughput agreement with Center Oil from June 2017 to June 2020.  The agreement will automatically renew for a period of three years at the expiration of the current term at an inflation adjusted rate (subject to a cap), as determined in accordance with the agreement, unless a party delivers a written notice of its election to terminate the storage and throughput agreement at least eighteen months prior to the expiration of the current term.

 In February 2010, the Partnership acquired a 50% undivided interest in the Baltimore, MD terminal. In connection with the acquisition, the Partnership acquired an existing agreement with Center Oil whereby the Partnership provides ethanol storage and throughput services to Center Oil. The Partnership charges Center Oil a fixed fee for storage and a fee based upon ethanol throughput at the Baltimore, MD terminal. The storage and throughput fees are calculated monthly based on the terms and conditions of the storage and throughput agreement.  This agreement was renewed under the one-year evergreen provision and has been extended to May 2017.  

In May 2011, the Partnership entered into an agreement to provide refined products storage and throughput services to Center Oil at the Baltimore, MD terminal. The Partnership charged Center Oil a fixed fee for storage and a fee for ethanol blending and any additives added to Center Oil’s product. The storage and throughput fees were calculated monthly based on the terms and conditions of the storage and throughput agreement.  This agreement was not renewed and expired in May 2015.  

In May 2013, the Partnership entered into an agreement to provide gasoline storage and throughput services to Center Oil at the Brooklyn, NY terminal. The Partnership charges Center Oil a fixed per barrel fee for each inbound delivery of ethanol and every outbound barrel of product shipped and a fee for any ethanol blending and additives added to Center Oil’s product. The storage and throughput fees are calculated monthly based on the terms and conditions of the storage and throughput agreement.  This agreement was renewed under the one-year evergreen provision and has been extended to May 2017.

Storage and Throughput Agreements with GCAC

In February 2013, the Partnership entered into a storage and throughput agreement with GCAC (the “GCAC Agreement 1”) whereby the Partnership provides storage and throughput services for various petroleum products to GCAC in return for a fixed per barrel storage fee plus a fixed per barrel fee for related throughput and other ancillary services. In addition, the Partnership entered into a second storage and throughput agreement with GCAC (the “GCAC Agreement 2”) whereby the Partnership built an additional 150,000 barrels of storage tanks for GCAC to store and throughput various petroleum products in return for similar economic terms of GCAC Agreement 1.

The initial term of GCAC Agreements 1 and 2 is approximately five years. These agreements can be mutually extended by both parties as long as the extension is agreed to 180 days prior to the end of the initial termination date; otherwise the Partnership has the right to lease the storage capacity to any third party.

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Throughput Agreements with UET

During July 2015, the Partnership acquired UET Midstream and its Pawnee Terminal from the Pawnee Sellers for $44.3 million in cash and 1,745,669 in unregistered common units in the Partnership.  In connection with such acquisition, the Partnership acquired two terminalling services agreements with UET (each, a “UET Throughput Agreement”).  Each UET Throughput Agreement requires UET Midstream to make available to UET a minimum volume of throughput capacity on a monthly basis at the Pawnee Terminal in exchange for payment by UET of a fixed, per barrel monthly fee for such capacity regardless of whether UET utilizes any or all such throughput capacity, in each case subject to certain exceptions.  The minimum monthly contract throughput capacity increases each year during the initial five-year term under one of the UET Throughput Agreements. The initial term of each UET Throughput Agreement will automatically extend under certain circumstances.  Each UET Throughput Agreement requires UET to deliver crude that meets certain specifications and to pay certain other fees, including fees for the use of excess throughput capacity and certain other ancillary services.  The UET Throughput Agreements contain certain other customary insurance, indemnification, default and termination provisions, including the right of a party to terminate the applicable UET Throughput Agreement following an event of default and the expiration of all applicable cure periods.

The total revenues associated with the storage and throughput agreements for Center Oil, GCAC and UET and reflected in the “Revenues – Related parties” line on the accompanying unaudited condensed consolidated statements of operations and comprehensive income are as follows (in thousands):

	Three Months Ended
	March 31,
	2016		2015
Center Oil	$	1,460	$	1,728
UET (a)		1,575	N/A
GCAC		448		450
Total	$	3,483	$	2,178

(a) UET did not become a related party until the closing of the Pawnee Terminal Acquisition

The total receivables associated with the storage and throughput agreements for Center Oil, GCAC and UET and reflected in the “Due from related parties” line on the accompanying unaudited condensed consolidated balance sheets are as follows (in thousands):

	As of
	March 31,		December 31,
	2016		2015
Center Oil	$	507	$	564
UET (a)		527		528
GCAC		303		440
Total	$	1,337	$	1,532

(a) UET did not become a related party until the closing of the Pawnee Terminal Acquisition

Natural Gas Supply Agreement

In March 2016, the Partnership, through its wholly owned subsidiary, Arc Terminals Holdings, entered into a natural gas supply agreement with UET to supply the Portland Terminal with natural gas. UET charges the Partnership for the actual amount of natural gas supplied on a monthly basis plus a transportation fee. The agreement expires on March 31, 2017, unless mutually extended for an additional year by both UET and the Partnership.

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Operating Lease Agreement

In January 2014, the Partnership, through its wholly owned subsidiary, Arc Terminals Holdings, entered into a triple net operating lease agreement relating to the Portland Terminal together with a supplemental co-terminus triple net operating lease agreement for the use of certain pipeline infrastructure at such terminal (such lease agreements, collectively, the “ Portland Lease Agreement”), pursuant to which Arc Terminals Holdings leased the Portland Terminal from a wholly owned subsidiary of CorEnergy Infrastructure Trust, Inc. (“CorEnergy”).  Arc Logistics guaranteed Arc Terminals Holdings’ obligations under the Portland Lease Agreement. CorEnergy owns a 6.6% direct investment in Lightfoot Capital Partners, LP and a 1.5% direct investment in Lightfoot Capital Partners GP LLC, the general partner of Lightfoot Capital Partners, LP.  The Portland Lease Agreement has a 15-year initial term and may be extended for additional five-year terms at the sole discretion of Arc Terminals Holdings, subject to renegotiated rental payment terms.

During the term of the Portland Lease Agreement, Arc Terminals Holdings will make base monthly rental payments and variable rent payments based on the volume of liquid hydrocarbons that flowed through the Portland Terminal in the prior month.  The base rent in the initial years of the Portland Lease Agreement was $230,000 per month through July 2014 (prorated for the partial month of January 2014) and is $417,522 for each month thereafter until the end of year five.  The base rent also increased each month starting with the month of August 2014 by a factor of 0.00958 of the specified construction costs incurred by LCP Oregon Holdings LLC (“LCP Oregon”) at the Portland Terminal.  During 2015, spending on terminal-related projects by CorEnergy since the commencement of the Portland Lease Agreement totaled 10.0 million and, as a result, the base rent has increased by approximately $95,800 per month.  Accordingly, any additional terminal-related projects will be funded by the Partnership.  The base rent will be increased in February 2019 by the change in the consumer price index for the prior five years, and every year thereafter by the greater of two percent or the change in the consumer price index. The base rent is not influenced by the flow of hydrocarbons. Variable rent will result from the flow of hydrocarbons through the Portland Terminal in excess of a designated threshold of 12,500 barrels per day of oil equivalent.  Variable rent is capped at 30% of base rent payments regardless of the level of hydrocarbon throughput.  During the three months ended March 31, 2016 and 2015, the expense associated with the Portland Lease Agreement was $1.6 million, during each period. During the three months ended March 31, 2016 and 2015, there was no variable rent associated with the Portland Lease Agreement.

So long as Arc Terminals Holdings is not in default under the Portland Lease Agreement, it shall have the right to purchase the Portland Terminal at the end of the third year of the Portland Lease Agreement and at the end of any month thereafter by delivery of 90 days’ notice (“Purchase Option”). The purchase price shall be the greater of (i) nine times the total of base rent and variable rent for the 12 months immediately preceding the notice and (ii) $65.7 million. If the Purchase Option is not exercised, the Portland Lease Agreement shall remain in place and Arc Terminals Holdings shall continue to pay rent as provided above. Arc Terminals Holdings also has the option to terminate the Portland Lease Agreement on the fifth and tenth anniversaries, by providing written notice 12 months in advance, for a termination fee of $4 million and $6 million, respectively.

Joliet LLC Agreement

In connection with the JBBR Acquisition, the Partnership and an affiliate of GE EFS entered into an amended and restated limited liability company agreement of Joliet Holdings governing their respective interests in Joliet Holdings (the “Joliet LLC Agreement”).  An affiliate of GE EFS owns 40% of Joliet Holdings, while the remaining 60% is owned by the Partnership.  GE EFS indirectly owns interests in Lightfoot.  Lightfoot has a significant interest in the Partnership through its ownership of a 29.9% limited partner interest in the Partnership, 100% of the limited liability company interests in the General Partner and all of the Partnership’s incentive distribution rights.  Daniel Castagnola serves on the board of managers of Lightfoot Capital Partners GP LLC and on the Board of the General Partner and is a Managing Director at GE EFS, which is an affiliate of General Electric Capital Corporation.  In addition, Arc Terminals Holdings entered into a Management Services Agreement (the “MSA”) with Joliet Holdings to manage and operate the Joliet Terminal.  Arc Terminals Holdings is receiving a fixed monthly management fee and reimbursements for out-of-pocket expenses.  In addition, Arc Terminals Holdings may receive additional monthly management fees based upon the throughput activity at the Joliet Terminal.  During the three months ended March 31, 2016, the Partnership was paid $0.2 million in fees and reimbursements by Joliet Holdings under the MSA.

PIPE Transaction

Registration Rights Agreement with PIPE Investors

Pursuant to a Unit Purchase Agreement dated as of February 19, 2015 (the “PIPE Purchase Agreement”) among the Partnership and the purchasers named therein (the “PIPE Purchasers”), the Partnership sold 4,520,795 common units at a price of $16.59 per common unit in a private placement (the “PIPE Transaction”) on May 14, 2015 for proceeds totaling $72.7 million after placement agent commissions and expenses, which were used to partially finance the Partnership’s portion of the purchase price of the JBBR Acquisition. As a part of the PIPE Transaction, the Partnership entered into a registration rights agreement (the “PIPE Registration Rights Agreement”), dated May 14, 2015, with the PIPE Purchasers. The issuance of the common units pursuant to the PIPE Purchase Agreement was made in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Section 4(a)(2) thereof.

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Pursuant to the PIPE Registration Rights Agreement, the Partnership filed, and the SEC declared effective, a shelf registration statement registering the common units of the PIPE Purchasers. In addition, the PIPE Registration Rights Agreement gives the PIPE Purchasers piggyback registration rights under certain circumstances. These registration rights are transferable to affiliates of the PIPE Purchasers.

Material Relationships Relating to PIPE Transaction

MTP Energy Master Fund Ltd. (“Magnetar PIPE Investor”), one of the PIPE Purchasers, purchased 572,635 common units for approximately $9.5 million in the PIPE Transaction. Magnetar Financial LLC controls the investment manager of the Magnetar PIPE Investor, and an affiliate of Magnetar Financial LLC also owns interests in Lightfoot, which is the sole owner of the General Partner. Eric Scheyer, the Head of the Energy Group of Magnetar Financial LLC, also serves on the Board.

UET Contribution Agreement

In July 2015, the Partnership, through its subsidiary Arc Terminals Holdings, entered into a contribution agreement (the “Contribution Agreement”) with the Pawnee Sellers, pursuant to which it acquired all of the limited liability company interests of UET Midstream from the Pawnee Sellers for total consideration, net of certain adjustments, of $76.6 million, consisting of $44.3 million in cash and $32.3 million of common units of the Partnership.  The number of common units issued to the Pawnee Sellers at the closing of the Pawnee Terminal Acquisition was based upon an issuance price of $18.50 per unit, which resulted in the issuance of 1,745,669 of the Partnership’s common units.

Registration Rights Agreement with Pawnee Sellers

In connection with the issuance of the Pawnee Transaction Units to the Pawnee Sellers (the “Initial Pawnee Holders”) pursuant to the Contribution Agreement as partial consideration for the Pawnee Terminal Acquisition, the Partnership entered into a Registration Rights Agreement (the “Pawnee Registration Rights Agreement”), dated as of July 14, 2015, with the Initial Pawnee Holders. The issuance of the Pawnee Transaction Units pursuant to the Contribution Agreement was made in reliance upon an exemption from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof.

Pursuant to the Pawnee Registration Rights Agreement, the Partnership filed, and the SEC declared effective, a shelf registration statement registering the common units of the Pawnee Sellers.  In addition, the Pawnee Registration Rights Agreement gives the Pawnee Sellers piggyback registration rights under certain circumstances. These registration rights are transferable to affiliates of the Pawnee Sellers.

.

Note 12—Major Customers

The following table presents the percentage of revenues and receivables associated with the Partnership’s significant customers (those that have accounted for 10% or more of the Partnership’s revenues in a given period) for the periods indicated:

	% of Revenues
	Three Months Ended						% of Receivables
	March 31,						March 31,			December 31,
	2016			2015			2016			2015
Customer A		33	%		2	%		29	%		30	%
Customer B		13	%		25	%		21	%		12	%
Customer C		6	%		13	%		5	%		6	%
Total		52	%		40	%		55	%		48	%

Note 13—Commitments and Contingencies

Environmental Matters

The Partnership may experience releases of crude oil, petroleum products and fuels or other contaminants into the environment or discover past releases that were previously unidentified. Although the Partnership maintains an inspection program designed to prevent and, as applicable, to detect and address such releases promptly, damages and liabilities incurred due to any such environmental releases from the Partnership’s assets may affect its business. As a result, the Partnership may accrue for losses associated with environmental remediation obligations, when such losses are probable and reasonably estimable. Estimated losses from environmental remediation obligations generally are recognized no later than completion of the remedial feasibility study. Loss accruals are adjusted as further information becomes available or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. The Partnership is not a party to any material pending legal proceedings relating to environmental remediation or other environmental matters and is not aware of any claims or events relating to environmental remediation or other environmental matters that, either individually or in the aggregate, could have a material adverse effect on the Partnership’s business, financial condition, results of operations and ability to make quarterly

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distributions to its unitholders.  As of March 31, 2016 and December 31, 2015, the Partnership had not experienced any releases of crude oil, petroleum products and fuels or other contaminants into the environment or discovered past releases that were previously unidentified that would give rise to evaluating an estimate of possible losses or a range of losses. Accordingly, the Partnership had not accrued for any loss contingencies in 2016 and 2015.

Commitments and Contractual Obligations

Future non-cancelable commitments related to certain contractual obligations as of March 31, 2016 are presented below (in thousands):

	Payments Due by Period
	Total		2016		2017		2018		2019		2020		Thereafter
Long-term debt obligations	$	240,313	$	-	$	-	$	240,313	$	-	$	-	$	-
Operating lease obligations		22,235		4,868		6,357		6,347		4,663		-		-
Earn-out obligations		18,489		1,028		1,369		1,369		1,369		1,369		11,985
Settlement obligations		1,750		750		500		500		-		-		-
Total	$	282,787	$	5,896	$	7,726	$	248,029	$	6,032	$	1,369	$	11,985

The schedule above assumes the Partnership will either exercise its Purchase Option or its right to terminate the Portland Lease Agreement (See “Note 11—Related Party Transactions—Other Transactions with Related Persons—Operating Lease Agreement” for further information).

GCAC was able to receive up to an additional $5.0 million in cash earnout payments based upon the throughput activity of one customer through January 31, 2016. As of March 31, 2016, no additional amounts had been paid or will be owed to GCAC.

In connection with the JBBR Acquisition, CenterPoint is entitled to receive up to an additional $27.0 million in cash earn-out payments.  As a part of the purchase price allocation related to the JBBR Acquisition, Joliet Holdings recorded a liability of $19.7 million, as of the date of the JBBR Acquisition, in connection with this potential CenterPoint earn-out payment.  From the date of acquisition through March 31, 2016, Joliet Holdings has paid $1.2 million related to the earn-out payment.  The Partnership will continue to evaluate this liability each quarter for any changes in the estimated fair value.  

In connection with the Pawnee Terminal Acquisition, Arc Terminals is responsible for completing the remaining construction of the Pawnee Terminal and the costs thereof are estimated to be approximately $11.0 million.  The Partnership expects the construction at the Pawnee Terminal to be completed in 2016.  The construction costs will be financed by a combination of available cash and borrowings under the Credit Facility.  

In August 2015, the City of Mobile, AL filed a complaint against Arc Terminals Holdings, pursuant to which the City of Mobile alleged that Arc Terminals Holdings was storing sulfuric acid at its Blakeley, AL facility without proper zoning approval.  Arc Terminals Holdings consented to an order with the City of Mobile, under which it agreed to cause all of the sulfuric acid of its customer (the “Blakeley Customer”) to be removed from its Blakeley, AL facility in a timely manner.  Following the removal of all sulfuric acid from the Blakeley, AL facility in November 2015, the City of Mobile dismissed its complaint against Arc Terminals Holdings.  The City of Mobile indicated that it intended to fine Arc Terminals Holdings $298 per day for each day that sulfuric acid was stored at its Blakeley, AL facility without the proper zoning approval.  The Partnership expects to reach a settlement with the City of Mobile regarding this fine and has accrued approximately $100,000 for this potential fine, which it believes is adequate.

In February 2016, Arc Terminals Holdings entered into a settlement agreement with the Blakeley Customer pursuant to which the parties agreed to terminate the terminal services agreement entered into by the parties for the storage and throughputting of sulfuric acid at the Blakeley, AL facility and to, among other things, release each party from all potential claims arising out of any non-performance of or non-compliance with the representations, warranties and covenants made thereunder.  Pursuant to the settlement agreement, Arc Terminals Holdings agreed to pay to the Blakeley Customer an aggregate amount of $2.0 million in certain increments over a three-year period commencing with the first quarter of 2016, except that Arc Terminals Holdings’ payment obligations thereunder shall be reduced by $0.5 million in the event that Arc Terminals Holdings and the Blakeley Customer enter into a new terminal services agreement for the storage and throughputting of such customer’s sulfuric acid at the Blakeley, AL facility commencing no later than January 1, 2018.  Neither Arc Terminals Holdings nor the Blakeley Customer has any obligation to enter into such new terminal services agreement.  As of December 31, 2015, the Partnership had established an accrual of $2.0 million with respect to its obligations under such settlement agreement.  For the three months ended March 31, 2016, the Partnership has paid $0.3 million related to the settlement agreement.  The terminal services agreement that has been terminated pursuant to such settlement agreement provided for an amount of minimum take-or-pay revenue, on a quarterly basis over the remaining term of such terminal services agreement, that would have represented less than 1% of the Partnership’s total revenue for the year ended December 31, 2015.

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Note 14—Subsequent Events

Cash Distributions

In April 2016, the Partnership declared a quarterly cash distribution of $0.44 per unit ($1.76 per unit on an annualized basis) totaling approximately $8.5 million for all common and subordinated units outstanding. The distribution is for the period from January 1, 2016 through March 31, 2016. The first quarter distribution represents a 7.3% increase over the first quarter 2015 cash distribution of $0.41 per unit ($1.64 per unit on an annualized basis).  The distribution is payable on May 13, 2016 to unitholders of record on May 9, 2016.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements and information in this Quarterly Report on Form 10-Q may constitute “forward-looking statements.” The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our expectations for future revenues and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, those summarized below:

● adverse regional, national or international economic conditions, adverse capital market conditions or adverse political developments;

● changes in the marketplace for our services, such as increased competition, better energy efficiency, or general reductions in demand;

● changes in the long-term supply and demand of crude oil and petroleum products in the markets in which we operate;

● actions taken by our customers, competitors and third party operators;

● nonpayment or nonperformance by our customers;

● changes in the availability and cost of capital;

● unanticipated capital expenditures in connection with the construction, repair, or replacement of our assets;

● operating hazards, natural disasters, terrorism, weather-related delays, adverse weather conditions, including hurricanes, natural disasters, environmental releases, casualty losses and other matters beyond our control;

● inability to consummate acquisitions, pending or otherwise, on acceptable terms and successfully integrate such businesses into our operations;

● the effects of existing and future laws and governmental regulations to which we are subject, including those that permit the treatment of us as a partnership for federal income tax purposes; and

● the effects of future litigation.

For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2015.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with our unaudited condensed consolidated financial statements (“interim statements”), including the notes thereto, set forth herein. The following information and such unaudited condensed consolidated financial statements should also be read in conjunction with the audited consolidated financial statements and related notes, together with our discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2015 (“2015 Partnership 10-K”), as filed with the SEC. This discussion may contain forward-looking statements that are based on the views and beliefs of our management, as well as assumptions and estimates made by our management. Actual results could differ materially from such forward-looking statements as a result of various risk factors, including those that may not be in the control of management. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly under “Cautionary Statement Regarding Forward-Looking Statements.”

Unless the context clearly indicates otherwise, references in this Quarterly Report on Form 10-Q to “Arc Logistics,” the “Partnership,” “we,” “our,” “us” or similar terms refer to Arc Logistics Partners LP and its subsidiaries. Unless the context clearly indicates otherwise, references to our “General Partner” refer to Arc Logistics GP LLC, the general partner of Arc Logistics. References to our “Sponsor” or “Lightfoot” refer to Lightfoot Capital Partners, LP and its general partner, Lightfoot Capital Partners GP LLC. References to “GCAC” refer to Gulf Coast Asphalt Company, L.L.C., which contributed its preferred units in Arc Terminals LP, predecessor to Arc Logistics (“Arc Terminals”), to the Partnership upon the consummation of the Partnership’s initial public offering in November 2013 (“IPO”). References to “Center Oil” refer to GP&W, Inc., d.b.a. Center Oil, and affiliates, including Center Terminal Company-Cleveland, which contributed its limited partner interests in Arc Terminals to the Partnership upon the consummation of the IPO. References to “Gulf LNG Holdings” refer to Gulf LNG Holdings Group, LLC and its subsidiaries, which own a liquefied natural gas regasification and storage facility in Pascagoula, MS, which is referred to herein as the “LNG Facility.” The Partnership owns a 10.3% limited liability company interest in Gulf LNG Holdings, which is referred to herein as the “LNG Interest.”

Overview

We are a fee-based, growth-oriented Delaware limited partnership formed by Lightfoot to own, operate, develop and acquire a diversified portfolio of complementary energy logistics assets. We are principally engaged in the terminalling, storage, throughput and transloading of crude oil and petroleum products. We are focused on growing our business through the optimization, organic development and acquisition of terminalling, storage, rail, pipeline and other energy logistics assets that generate stable cash flows.

Our primary business objective is to generate stable cash flows that enable us to pay quarterly cash distributions to unitholders and, over time, increase quarterly cash distributions. We intend to achieve this objective by evaluating long-term infrastructure needs in the areas we serve and by growing our network of energy logistics assets through expansion of existing facilities, the construction of new facilities in existing or new markets and strategic acquisitions from our Sponsor and third parties.

Recent Developments

Pennsylvania Terminals Acquisition

In January 2016, we acquired four petroleum products terminals (the “Pennsylvania Terminals”) located in Altoona, Mechanicsburg, Pittston and South Williamsport, Pennsylvania from Gulf Oil Limited Partnership (“Gulf Oil”) for $8.0 million (the “Pennsylvania Terminals Acquisition).  The acquisition, which expanded our operational footprint into the state of Pennsylvania, increased our total shell capacity by approximately 12% to 7.7 million barrels across 21 terminals.  In connection with this acquisition, we acquired an option to purchase from Gulf Oil additional land with storage tanks located adjacent to one of the Pennsylvania Terminals for an agreed upon purchase price.  At closing, we also entered into a take-or-pay terminal services agreement with Gulf Oil with an initial two-year term.  We provide throughput and related terminal services to Gulf Oil under the terminal services agreement at the Pennsylvania Terminals, as well as several of our other petroleum products terminals.  We financed the acquisition with a combination of available cash and borrowings under our Second Amended and Restated Revolving Credit Agreement (the “Credit Facility”).  We expect to invest additional capital over the next two to three years to support new customer initiatives at the Pennsylvania Terminals including bringing additional capacity on-line, improving renewable fuel capabilities, improving loading capabilities and other various terminal improvements.  

LNG Facility Arbitration

On March 1, 2016, an affiliate of Gulf LNG Holdings received a Notice of Disagreement and Disputed Statements and a Notice of Arbitration from Eni USA Gas Marketing L.L.C. (“Eni USA”), one of the two companies that had entered into a terminal use agreement for capacity of the LNG Facility.  Eni USA is an indirect subsidiary of Eni S.p.A., a multi-national integrated energy company headquartered in Milan, Italy.  Pursuant to the Notice of Arbitration, Eni USA seeks declaratory and monetary relief in respect of its terminal use agreement, asserting that (i) the terminal use agreement should be terminated because changes in the U.S. natural gas market since the execution of the agreement in December 2007 have “frustrated the essential purpose” of the agreement

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and (ii) the activities undertaken by affiliates of Gulf LNG Holdings “in connection with a plan to convert the LNG Facility into a liquefaction/export facility have given rise to a contractual right on the part of Eni USA to terminate” the terminal use agreement. 

Affiliates of Kinder Morgan, Inc., which control Gulf LNG Holdings and operate the LNG Facility, have expressed to us that they view the assertions by Eni USA to be without merit, and that they intend to vigorously contest the assertions set forth by Eni USA.  Although we do not control Gulf LNG Holdings, we also are of the view that the assertions made by Eni USA are without merit. As contemplated by the terminal use agreement, disputes are meant to be resolved by final and binding arbitration, and no date has been set for such arbitration. Eni USA has advised Gulf LNG Holdings’ affiliates that it shall continue to pay the amounts claimed to be due under the terminal use agreement pending resolution of the dispute.  

If the assertions by Eni USA are ultimately successful, our business, financial conditions and results of operations and our ability to make cash distributions to our unitholders would be materially adversely affected.  For the three months ended March 31, 2016, 18% and 24% of our Adjusted EBITDA and Distributable Cash Flow, respectively, were associated with our LNG Interest.  For the three months ended March 31, 2015, 34% and 33% of our Adjusted EBITDA and Distributable Cash Flow, respectively, were associated with our LNG Interest.  We are unable at this time to predict the amount of the legal fees in this matter that will be allocable to our LNG Interest.

Factors That Impact Our Business

The revenues generated by our logistics assets are generally driven by the storage, throughput and transloading capacity under contract. The regional demand for our customers’ products being shipped through our facilities drives the physical utilization of facilities and ultimately the revenues we receive for our services. Though substantially all of our services agreements require customers to enter into take-or-pay arrangements for committed terminalling services, our revenues can be affected by: (1) the incremental fees that we charge customers to receive and deliver product; (2) the length of any underlying back-to-back supply agreements that our customers have with their respective customers; (3) commodity pricing fluctuations; (4) fluctuations in product volumes to the extent revenues under the contracts are a function of the amount of product transported; (5) inflation adjustments in services agreements; and (6) changes in the demand for ancillary services, such as heating, blending, and mixing our customers’ products between our tanks, railcars and marine operations.

We believe key factors that influence our business are: (1) the short-term and long-term demand for and supply of crude oil and petroleum products; (2) the indirect impact of crude oil and petroleum product pricing including regional pricing differentials on the demand and supply of logistics assets; (3) the needs of our customers together with the competitiveness of our service offerings with respect to location, price, reliability and flexibility; (4) current and future economic conditions; (5) changes to local, state and federal laws and regulations and (6) our ability and the ability of our competitors to capitalize on growth opportunities and changing market dynamics.

Supply and Demand for Crude Oil and Petroleum Products

Our results of operations are dependent upon the volumes of crude oil and petroleum products we have contracted to store, throughput and transload. An important factor in such contracting is the amount of supply and demand for crude oil and petroleum products. The supply of and demand for crude oil and petroleum products are driven by many factors, including technological innovations, capital investment, delivery costs, the price for crude oil and petroleum products, local and regional price differentials, refining and manufacturing processes, weather/seasonal changes and general economic conditions. A significant increase or decrease in the demand for crude oil and petroleum products, which can be the result of fluctuations in production, market prices or a combination of both, in the areas served by our facilities will have a corresponding effect on (1) the volumes we actually store, throughput and transload on behalf of our customers; (2) our customers’ decision to renew existing services agreements; and (3) our ability to execute contracts with new customers.

Prices of Crude Oil and Petroleum Products

Because we do not take title to any of the crude oil and petroleum products that we handle for our customers and do not engage in the marketing of crude oil and petroleum products, we have minimal direct exposure to risks associated with fluctuating commodity prices. However, extended periods of depressed or elevated crude oil and petroleum product prices or significant changes in the pricing of crude oil or petroleum products in a short period of time can lead producers and refiners to increase or decrease production of crude oil and petroleum products, which can impact supply and demand dynamics resulting in changes in our customers’ product movements and the associated use of our facilities.

If the future prices of crude oil and petroleum products are substantially higher than the then-current prices, also called market contango, our customers’ demand for excess storage generally increases as they purchase products at today’s prices to take advantage of potential increasing product margins. If the future prices of crude oil and petroleum products are lower than the then-current prices, also called market backwardation, our customers’ demand for excess storage capacity generally decreases as they reduce their exposure to potential decreasing product margins.

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In most cases, as the market price of crude oil and petroleum products sold by our customers in local markets increases over the price charged by producers to supply our customers for such crude oil and petroleum products, our customers’ demand for crude oil and/or petroleum products increases.  As the market price for crude oil and petroleum products sold by our customers in local markets decreases as compared to the price charged by producers to supply our customers for such crude oil and petroleum products, our customers’ demand for crude oil and petroleum products decreases. In general, demand for our throughput services increases and decreases as pricing differentials in favor of our customers’ increases or decreases, respectively.

Diversity of Receipt and Delivery Modes

Access to terminal facilities includes marine, rail, pipeline and truck.  Depending on the type of commodity our customers are storing or throughputting, each product receipt/delivery mode may offer a significant advantage to that customer at any one time or under a certain situation.  In order for our customers to optimize product pricing differentials, they generally prefer as many receipt/delivery modes as possible to access our facilities whether it be for crude oil, petroleum products, ethanol and/or biodiesel.  An important factor in potential customers deciding whether to execute a new contract with us is the availability of these receipt/delivery modes versus our competition.  If we are not able to offer a customer its preferred receipt/delivery modes that a competitor is able to offer, we will most likely not be successful in executing an agreement with that customer.  

If market conditions change and a current customer is able to receive/deliver product through a competitor’s assets at a cost that is lower than our facility, we will generally see volumes decrease by that customer.  If we are able to offer receipt/delivery modes and access to our assets that allows that customer to utilize our facility at a cost that it is less than our competitors, we would expect the utilization of our asset by that customer to increase.

Customers and Competition

We provide terminalling, storage, throughput and transloading services for a broad mix of third-party customers, including major oil companies, independent refiners, crude oil and petroleum product marketers, distributors, chemical companies and various manufacturers. In general, the mix of services we provide to our customers varies with the business strategies of our customers, regional economies, market conditions, expectations for future market conditions and the overall competitiveness of our service offerings.

The level of competition varies in the markets in which we operate. We compete with other terminal operators and logistics providers on the basis of rates, terms of service, types of service, supply and market access and flexibility and reliability of service. The competitiveness of our service offerings, including the rates we charge for new contracts or contract renewals, is affected by the availability of storage and rail capacity relative to the overall demand for storage or rail capacity in a given market area and could be significantly impacted by the entry of new competitors into a market in which one of our facilities operates. We believe that significant barriers to entry exist in the crude oil and petroleum products logistics business.

Economic Conditions and Energy Industry

In the recent past, world financial markets experienced a severe reduction in the availability of credit. The condition of credit markets may adversely affect our liquidity and the availability of credit. In addition, given the number of parties involved in the exploration, transportation, storage and throughput of crude oil, petroleum products and chemicals, we could experience a tightening of trade credit as a result of our customers’ inability to access their own credit.

Economic conditions worldwide periodically contribute to slowdowns in the energy industry, as well as in the specific segments and markets in which we operate, resulting in reduced production, reduced supply or demand and increased price competition for our services.  In addition, economic conditions could result in a loss of customers because their access to the capital necessary to fund their supply and distribution business is limited.  Our operating results may also be affected by uncertain or changing economic conditions in certain regions of the United States.  If global economic and market conditions (including volatility or sustained weakness in commodity markets) or economic conditions in the United States remain uncertain or persist, spread or deteriorate further, we may experience material adverse effects on our business, financial condition, results of operations and ability to make distributions to our unitholders.

Regulatory Environment

The movement and storage of crude oil, petroleum products and chemicals in the United States is highly regulated by local, state and federal governments and governmental agencies. As an energy logistics service provider, in order to remain in compliance with these laws, we could be required to spend incremental capital expenditures or incur additional operating expenses to service our customer commitments, which could impact our business.

Organic Growth Opportunities

Regional crude oil and petroleum products supply and demand dynamics shift over time, which can lead to rapid and significant changes in demand for logistics services. At such times, we believe the companies that have positioned themselves to provide a complementary suite of logistics assets with organic growth opportunities will have a competitive advantage in capitalizing on the shifting market dynamics. Where feasible, we have designed the infrastructure at our facilities to allow for future expansion. As of

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March 31, 2016, we had an aggregate of over 250 acres of available land, across our facilities, to increase our rail, marine, truck and/or terminal capacity should either the crude oil or petroleum products market warrant incremental growth opportunities.

Factors Impacting the Comparability of Our Financial Results

Our future results of operations may not be comparable to our historical results of operations for the following reasons:

● In May 2015, we completed the acquisition of the Joliet terminal, in a joint venture arrangement with an affiliate of GE EFS. The historical condensed consolidated financial statements do not reflect the full impact of these revenue and expenses in first and second quarter of 2015.  

● In July 2015, we completed the acquisition of the Pawnee terminal.  The historical condensed consolidated financial statements do not reflect the full impact of these revenue and expenses in the first, second and third quarters of 2015.  

● In January 2016, we completed the Pennsylvania Terminals Acquisition.  The historical condensed consolidated financial statements do not reflect the impact of these revenue and expenses in 2015.  

Overview of Our Results of Operations

Our management uses a variety of financial measurements to analyze our performance, including the following key measures: (1) revenues derived from (a) storage and throughput services fees and (b) ancillary services fees; (2) our operating and selling, general and administrative (“SG&A”) expenses; (3) Adjusted EBITDA; and (4) Distributable Cash Flow.

We do not utilize non-cash depreciation and amortization expense in our key measures because we focus our performance management on cash flow generation and our assets have long useful lives. In our period-to-period comparisons of our revenues and expenses set forth below, we analyze the following revenue and expense components:

Revenues

Our cash flows are primarily generated by fee-based terminalling, storage, throughput and transloading services that we perform under multi-year contracts. A portion of our services agreements are operating under automatic renewal terms that began upon the expiration of the primary contract term. While a portion of our capacity is subject to a one-year commitment, historically these customers have continued to renew or expand their business. We generate revenues through the following fee-based services to our customers:

● Storage and Throughput Services Fees. We generate revenues from customers who reserve storage, throughput and transloading capacity at our facilities. Our service agreements typically allow us to charge customers a number of activity fees, including for the receipt, storage, throughput and transloading of crude oil and petroleum products. Many of our service agreements contain take-or-pay provisions whereby we generate revenue regardless of customers’ use of the facility.

● Ancillary Services Fees. We generate revenues from ancillary services, such as heating, blending and mixing associated with our customers’ activity. The revenues we generate from ancillary services vary based upon customers’ activity levels.

We believe that the high percentage of take-or-pay storage and throughput services fees generated from a diverse portfolio of multi-year contracts, coupled with little exposure to commodity price fluctuations, creates stable cash flow and substantially mitigates our exposure to volatility in supply and demand and other market factors.

We also receive cash distributions from the LNG Interest we acquired in November 2013, which is accounted for using equity method accounting. These distributions are supported by two 20-year, firm reservation charge terminal use agreements for all of the capacity of the LNG Facility that went into commercial operation in October 2011 with several integrated, multi-national oil and gas companies.  As of March 31, 2016, the remaining term of each terminal use agreement is approximately 15 years.  

While our financial statements separately present revenue from third parties and related parties, we evaluate our business and characterize our revenues as derived from storage and throughput services fees and ancillary services fees.

Operating Expenses

Our management seeks to maximize the profitability of our operations by effectively managing operating expenses. These expenses are comprised primarily of labor expenses, utility costs, additive expenses, insurance premiums, repair and maintenance expenses, health, safety and environmental compliance and property taxes. These expenses generally remain relatively stable across broad ranges of activity levels at our facilities but can fluctuate from period to period depending on the mix of activities performed during that period and the timing of these expenses. We incorporate preventative maintenance programs by scheduling maintenance over time to avoid significant variability in maintenance expenses and minimize their impact on our cash flow.

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Selling, General and Administrative Expenses

While our financial statements separately present SG&A expenses and SG&A–affiliate expenses, we evaluate our SG&A expenses as a whole, which primarily consist of compensation of non-operating personnel, employee benefits, transaction costs, reimbursements to our General Partner and its affiliates of SG&A expenses incurred in connection with our operations and expenses of overall administration.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure that management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess: (i) the performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets; (ii) the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities; (iii) our ability to make distributions; (iv) our ability to incur and service debt; (v) our ability to fund capital expenditures; and (vi) our ability to incur additional expenses. We define Adjusted EBITDA as net income before interest expense, income taxes and depreciation and amortization expense, as further adjusted for other non-cash charges and other charges that are not reflective of our ongoing operations.

We believe that the presentation of Adjusted EBITDA provides useful information to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA is net income. Adjusted EBITDA should not be considered as an alternative to net income. Adjusted EBITDA has important limitations as an analytical tool because it excludes some but not all items that affect net income. You should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Additionally, because Adjusted EBITDA may be defined differently by other companies in our industry, our definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.

Distributable Cash Flow

Distributable Cash Flow is a non-GAAP financial measure that management and external users of our consolidated financial statements may use to evaluate whether we are generating sufficient cash flow to support distributions to our unitholders as well as measure the ability of our assets to generate cash sufficient to support our indebtedness and maintain our operations.  We define Distributable Cash Flow as Adjusted EBITDA less (i) cash interest expense paid; (ii) cash income taxes paid; (iii) maintenance capital expenditures paid; and (iv) equity earnings from the LNG Interest; plus (v) deferred revenue adjustments; and (vi) cash distributions from the LNG Interest.

The GAAP measure most directly comparable to Distributable Cash Flow is net income. Distributable Cash Flow should not be considered as an alternative to net income. You should not consider Distributable Cash Flow in isolation or as a substitute for analysis of our results as reported under GAAP. Additionally, because Distributable Cash Flow may be defined differently by other companies in our industry, our definition of Distributable Cash Flow may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.

The following table presents a reconciliation of Adjusted EBITDA and Distributable Cash Flow to net income for each of the periods indicated (in thousands):

	Three Months Ended
	March 31,
	2016			2015
Net income attributable to partners' capital	$	3,116		$	304
Income taxes		28			52
Interest expense		2,367			951
Depreciation (a)		3,202			1,844
Amortization (a)		3,081			1,246
One-time non-recurring expenses (b)		559			1,285
Non-cash unit-based compensation		1,088			1,543
Non-cash deferred rent expense (c)		65			190
Adjusted EBITDA	$	13,506		$	7,415
Cash interest expense		(2,138	)		(906	)
Cash income taxes		(27	)		(52	)
Maintenance capital expenditures		(2,080	)		(288	)
Equity earnings from the LNG Interest		(2,461	)		(2,489	)
Cash distributions received from the LNG Interest		2,179			1,775
Distributable Cash Flow	$	8,979		$	5,455

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(a) The depreciation and amortization have been adjusted to remove the non-controlling interest portion related to the GE EFS affiliate’s ownership interest in Joliet Holdings.

(b) The one-time non-recurring expenses relate to amounts incurred as due diligence expenses from acquisitions and other infrequent or unusual expenses incurred.

(c) The non-cash deferred rent expense relates to the accounting treatment for the Portland terminal lease transaction termination fees.

Results of Operations

The following table and discussion is a summary of our results of operations for the three months ended March 31, 2016 and 2015 (in thousands, except operating data):

	Three Months Ended
	March 31,
	2016			2015
Revenues:
Third-party customers	$	22,584		$	11,379
Related parties		3,483			2,178
		26,067			13,557
Expenses:
Operating expenses		8,687			6,280
Selling, general and administrative		3,924			4,298
Selling, general and administrative - affiliate		1,322			1,076
Depreciation		3,652			1,844
Amortization		3,697			1,246
Total expenses		21,282			14,744
Operating (loss) income		4,785			(1,187	)
Other income (expense):
Equity earnings from unconsolidated affiliate		2,461			2,489
Other income		-			5
Interest expense		(2,367	)		(951	)
Total other income, net		94			1,543
Income before income taxes		4,879			356
Income taxes		28			52
Net income		4,851			304
Net income attributable to non-controlling interests		(1,735	)		-
Net income attributable to partners' capital	$	3,116		$	304
Other Financial Data:
Adjusted EBITDA	$	13,506		$	7,415
Distributable Cash Flow	$	8,979		$	5,455
Operating Data:
Storage capacity (bbls)		7,741,100			6,425,100
Throughput (bpd)		144,980			68,295
% Take or pay revenue		86	%		77	%

Three Months Ended March 31, 2016 Compared to Three Months Ended March 31, 2015

Storage Capacity. Storage capacity for the three months ended March 31, 2016 increased by 1,316,000 barrels or 20% compared to the three months ended March 31, 2015.  The increase in storage capacity is related to the Pennsylvania Terminals Acquisition and the storage capacity acquired in 2015 at our Joliet and Pawnee terminals.  

Throughput Activity. Throughput activity for the three months ended March 31, 2016 increased by 76.7 mbpd or 112%, compared to the three months ended March 31, 2015.  The increase was due to the Pennsylvania Terminals Acquisition and the acquisition of the Joliet and Pawnee terminals and increased customer activity in our Blakeley, Brooklyn, Norfolk and Toledo terminals offset by decreased customer activity in our Chickasaw, Mobile-Methanol, Portland and Selma terminals.  

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Revenues. The following table details the types and amounts of revenues generated during the three months ended March 31, 2016 and 2015 (in thousands, except percentages).

	Three Months Ended
	March 31,
	2016		2015		$ Change			% Change
Storage and throughput services fees	$	24,622	$	12,075	$	12,547			104	%
Ancillary services fees		1,445		1,482		(37	)		-2	%
Total revenues	$	26,067	$	13,557	$	12,510			92	%

Revenues for the three months ended March 31, 2016 increased by $12.5 million, or 92%, compared to the three months ended March 31, 2015. The $12.5 million, or 104%, increase in storage and throughput services fees compared to the three months ended March 31, 2015 was related to an increase in such fees of $12.0 million due to the new agreements acquired in the Pennsylvania Terminals Acquisition, the Joliet terminal acquisition and the Pawnee terminal acquisition and $0.6 million as the result of the execution of new or amendments to customer agreements at our Blakeley, Madison, Mobile-Methanol and Norfolk terminals and additional customer activity in our Brooklyn, Baltimore, Portland and Toledo terminals. The increased storage and throughput services fees were offset by $0.5 million as a result of recontracting rates at our Chickasaw and Mobile terminals and reduced throughput activity at our Chickasaw, Cleveland, Mobile and Selma terminals.  The less than $0.1 million, or 2%, decrease in ancillary services fees was driven by a mild winter which in turn resulted in less ancillary fees charged back to our customers.

Operating Expenses. Operating expenses for the three months ended March 31, 2016 increased by $2.4 million, or 38%, compared to the three months ended March 31, 2015. The $2.4 million increase in operating expenses was the result of higher property taxes, repair and maintenance expenses, employee and contract labor expenses as a result of the Pennsylvania Terminals Acquisition and the acquisitions of the Joliet and Pawnee terminals in 2015.

Selling, General and Administrative Expenses.  SG&A expenses for the three months ended March 31, 2016 decreased by $0.1 million, or 2%, compared to the three months ended March 31, 2015.  The decrease in SG&A expenses was a result of a $1.0 million decrease in due diligence expenses and stock based compensation of $0.3 million offset by an increase in professional fees associated with a customer dispute and audit and tax expenses of $0.8 million and an increase in expenses paid to our General Partner of $0.2 million.

Depreciation and Amortization Expense. Depreciation expense for the three months ended March 31, 2016 increased by $1.8 million, or 98%, compared to the three months ended March 31, 2015, primarily due to the impact of the Pennsylvania Terminals Acquisition, the Joliet and Pawnee terminal acquisitions, the 2015 capital expenditure program at the Gulf Coast terminal for customer expansion activities and incremental maintenance.  Amortization expense for the three months ended March 31, 2016 increased by $2.5 million, or 197%, compared to the three months ended March 31, 2015, primarily due to the intangible assets purchased in the Joliet and Pawnee terminal acquisitions.

Equity Earnings from Unconsolidated Affiliate. Equity earnings from unconsolidated affiliate for the three months ended March 31, 2016 decreased by less than $0.1 million, or 1%, compared to the three months ended March 31, 2015.

Interest Expense. Interest expense for the three months ended March 31, 2016 increased $1.4 million, or 149%, compared to the three months ended March 31, 2015. The increase in interest expense is the result of higher outstanding indebtedness during the three months ended March 31, 2016 compared to March 31, 2015.  The increase in indebtedness was primarily related to the amounts drawn from the Credit Facility to partially finance the Pennsylvania Terminals Acquisition and the acquisitions of the Joliet and Pawnee terminals.    

Net Income. Net income for the three months ended March 31, 2016 increased by $4.5 million, compared to the three months ended March 31, 2015.  The increase was primarily related to an increase in revenues of $12.0 million principally attributable to the Pennsylvania Terminals Acquisition, the Joliet and Pawnee terminal acquisitions and $0.6 million as the result of the execution of new customer agreements at our Blakeley, Madison, Mobile-Methanol and Norfolk terminals and additional customer activity in our Brooklyn, Baltimore, Portland and Toledo terminals.  These increases in revenue were offset by an increase in operating expenses of $2.4 million as a result of the 2015 and 2016 acquisitions, an increase in depreciation and amortization of $1.8 million and $2.5 million, respectively, attributable to our 2015 and 2016 acquisitions and an increase of $1.4 million of interest expense as a result of higher outstanding indebtedness during the three months ended March 31, 2016 due to our 2015 and 2016 acquisitions.  

Adjusted EBITDA. Adjusted EBITDA for the three months ended March 31, 2016 increased by $6.1 million, or 82%, compared to the three months ended March 31, 2015.  The increase in Adjusted EBITDA for the three months ended March 31, 2016 was primarily attributable to the increased activity at certain refined product terminals and the contribution of the Pennsylvania Terminals, the Joliet terminal and the Pawnee terminal operations.

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Liquidity and Capital Resources

Liquidity

Our principal liquidity requirements are to finance current operations, fund capital expenditures, including acquisitions from time to time, service our debt and pay distributions to our partners. Our sources of liquidity include cash generated by our operations, borrowings under our Credit Facility and issuances of equity and debt securities. We believe that cash generated from these sources will be sufficient to meet our short-term working capital requirements and long-term capital expenditure requirements. Please read “—Cash Flows” and “—Capital Expenditures” for a further discussion of the impact on liquidity.

In April 2016, we declared a quarterly distribution of $0.44 per common unit and subordinated unit per quarter, which equates to approximately $8.5 million per quarter, or $33.9 million per year, based on the number of common and subordinated units outstanding as of May 2, 2016.  The distribution is payable on May 13, 2016 to unitholders of record on May 9, 2016.Maintaining this level of distribution is dependent on our ability to generate sufficient cash from our operations after establishment of cash reserves and payment of fees and expenses, including payments to our General Partner and its affiliates.  We do not have a legal obligation to pay this distribution.

Credit Facility

Concurrent with the closing of the IPO, we entered into the Credit Facility with a syndicate of lenders, under which Arc Terminals Holdings LLC (“Arc Terminals Holdings”) is the borrower.  The Credit Facility, as subsequently amended, matures in November 2018 and has up to $300.0 million of borrowing capacity.  As of March 31, 2016, we had borrowings of $240.3 million under the Credit Facility at an interest rate of 3.44%.  During the first and second quarter of 2015, the Partnership had a $10 million line of credit outstanding under its letter of credit sub-facility, which was issued in connection with the acquisition of the Joliet terminal. This letter of credit was extinguished when the acquisition of the Joliet terminal closed in May 2015.  Based on the restrictions under our total leverage ratio covenant, as of March 31, 2016, we had $33.8 million of available capacity under the Credit Facility.

The Credit Facility is available to fund working capital and to finance capital expenditures and other permitted payments and allows us to request that the maximum amount of the Credit Facility be increased by up to an aggregate principal amount of $100.0 million, subject to receiving increased commitments from lenders or commitments from other financial institutions. The Credit Facility is available for revolving loans, including a sublimit of $5.0 million for swing line loans and a sublimit of $20.0 million for letters of credit. Our obligations under the Credit Facility are secured by a first priority lien on substantially all of our material assets other than the LNG Interest and the assets owned by Arc Terminals Joliet Holdings LLC and its subsidiaries. We and each of our existing restricted subsidiaries (other than the borrower) guarantee, and each of our future restricted subsidiaries will also guarantee, the Credit Facility.

Loans under the Credit Facility bear interest at a floating rate, based upon our total leverage ratio, equal to, at our option, either (a) a base rate plus a range from 100 to 200 basis points per annum or (b) a LIBOR rate, plus a range of 200 to 300 basis points. The base rate is established as the highest of (i) the rate which SunTrust Bank announces, from time to time, as its prime lending rate, (ii) the daily one-month LIBOR rate plus 100 basis points per annum and (iii) the federal funds rate plus 50 basis points per annum. The unused portion of the Credit Facility is subject to a commitment fee calculated based upon our total leverage ratio ranging from 0.375% to 0.50% per annum. Upon any event of default, the interest rate will, upon the request of the lenders holding a majority of the commitments, be increased by 2.0% on overdue amounts per annum for the period during which the event of default exists.

The Credit Facility contains certain customary representations and warranties, affirmative covenants, negative covenants and events of default. As of March 31, 2016, the Partnership was in compliance with such covenants. The negative covenants include restrictions on our ability to incur additional indebtedness, acquire and sell assets, create liens, enter into certain lease agreements, make investments and make distributions.

The Credit Facility requires us to maintain a total leverage ratio of not more than 4.50 to 1.00, which may increase to up to 5.00 to 1.00 during specified periods following a material permitted acquisition or issuance of over $200.0 million of senior notes, and a minimum interest coverage ratio of not less than 2.50 to 1.00. If we issue over $200.0 million of senior notes, we will be subject to an additional financial covenant pursuant to which our secured leverage ratio must not be more than 3.50 to 1.00. The Credit Facility places certain restrictions on the issuance of senior notes.

If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the Credit Facility, termination of the commitments under the Credit Facility and all remedial actions available to a secured creditor. The events of default include customary events for a financing agreement of this type, including, without limitation, payment defaults, material inaccuracies of representations and warranties, defaults in the performance of affirmative or negative covenants (including financial covenants), bankruptcy or related defaults, defaults relating to judgments, nonpayment of other material indebtedness and the occurrence of a change in control. In connection with the Credit Facility, we and our subsidiaries have entered into certain customary ancillary agreements and arrangements, which, among other things, provide that the indebtedness, obligations

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and liabilities arising under or in connection with the Credit Facility are unconditionally guaranteed by us and each of our existing subsidiaries (other than the borrower) and each of our future restricted subsidiaries.

First Amendment to Credit Agreement

In January 2014, in connection with the lease agreement at our Portland terminal, Arc Terminals Holdings, together with the Partnership and certain of its other subsidiaries, as guarantors, entered into the First Amendment to the Credit Facility (the “First Amendment”). The First Amendment principally modified certain provisions of the Credit Facility to allow Arc Terminals Holdings to enter into the lease agreement relating to the use of the Portland terminal.

Second Amendment to Credit Agreement

In May 2015, Arc Terminals Holdings, together with the Partnership and certain of its other subsidiaries, as guarantors, entered into the Second Amendment to the Credit Facility as part of its financing for the acquisition of the Joliet terminal.  Upon the closing of the acquisition of the Joliet terminal in May 2015, the aggregate commitments under the Credit Facility increased from $175 million to $275 million.  In addition, the sublimit for letters of credit was increased from $10 million to $20 million.  

Third Amendment to Credit Agreement

In July 2015, Arc Terminals Holdings, together with the Partnership and certain of its other subsidiaries, as guarantors, entered into the Third Amendment to the Credit Facility as part of its financing for the acquisition of the Pawnee terminal.  Upon the consummation of the acquisition of the Pawnee terminal in July 2015, the aggregate commitments under the Credit Facility increased from $275 million to $300 million.

JBBR Acquisition Financing

In May 2015, Arc Terminals Joliet Holdings LLC, a joint venture company owned 60% by the Partnership and 40% by an affiliate of GE Energy Financial Services, purchased all of the membership interests in Joliet Bulk, Barge & Rail LLC from CenterPoint Properties Trust for a base cash purchase price of $216 million (the “JBBR Acquisition”).  We financed our approximate $130 million portion of the purchase price with net proceeds from the sale of common units in a private placement and from borrowings under the Credit Facility. Pursuant to the Unit Purchase Agreement with the purchasers named therein (the “PIPE Purchasers”) in a private placement, the Partnership sold 4,520,795 common units at a price of $16.59 to the PIPE Purchasers for proceeds totaling $72.7 million after placement agent commissions and expenses.  In addition, Arc Terminals Holdings borrowed $61.0 million under the Credit Facility to partially finance the balance of the purchase price payable by it at the closing of the JBBR Acquisition.

Pawnee Terminal Acquisition Financing

In July 2015, we purchased all of the membership interests in UET Midstream, LLC from United Energy Trading, LLC (“UET”) and Hawkeye Midstream, LLC (together with UET, the “Pawnee Sellers”) for a purchase price, net of certain adjustments, of $76.6 million (the “Pawnee Terminal Acquisition”), consisting of $44.3 million in cash and $32.3 million in common units.  The number of common units issued to the Pawnee Sellers at the closing of the Pawnee Terminal Acquisition was based upon an issuance price of $18.50 per unit, which resulted in the issuance of 1,745,669 of the Partnership’s common units.  The fair value of the Pawnee Transaction Units on the closing date was $17.30 per unit (based upon the closing price of the Partnership’s unit price on the closing date), which results in a further reduction of the purchase price, recognized for accounting purposes, of approximately $2.1 million. In addition, we borrowed $47.0 million under the Credit Facility to partially finance the balance of the purchase price payable by it at the closing of the Pawnee Terminal Acquisition.  We are responsible for completing the remaining construction of the Pawnee terminal and the costs thereof are estimated to be approximately $11.0 million.  We expect the construction of the Pawnee terminal to be completed in 2016.  

Settlements

In August 2015, the City of Mobile, AL filed a complaint against Arc Terminals Holdings, pursuant to which the City of Mobile alleged that Arc Terminals Holdings was storing sulfuric acid at its Blakeley, AL facility without proper zoning approval.  Arc Terminals Holdings consented to an order with the City of Mobile, under which it agreed to cause all of the sulfuric acid of its customer (the “Blakeley Customer”) to be removed from the Blakeley, AL facility in a timely manner.  Following the removal of all sulfuric acid from the Blakeley, AL facility in November 2015, the City of Mobile dismissed its complaint against Arc Terminals Holdings.  The City of Mobile indicated that it intended to fine Arc Terminals Holdings $298 per day for each day that sulfuric acid was stored at its Blakeley, AL facility without the proper zoning approval.  Arc Terminals Holdings expects to reach a settlement with the City of Mobile regarding this fine and has accrued approximately $100,000 for this potential fine, which it believes is adequate.

In February 2016, Arc Terminals Holdings entered into a settlement agreement with the Blakeley Customer pursuant to which the parties agreed to terminate the terminal services agreement for the storage and throughputting of sulfuric acid at the Blakeley, AL facility and to, among other things, release each party from all potential claims arising out of any non-performance of or non-compliance with the representations, warranties and covenants made thereunder.  Pursuant to the settlement agreement, Arc Terminals Holdings agreed to pay to the Blakeley Customer an aggregate of $2.0 million in certain increments over a three-year period commencing with the first quarter of 2016, except that Arc Terminals Holdings’ payment obligations thereunder shall be reduced by

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$0.5 million in the event that Arc Terminals Holdings and the Blakeley Customer enter into a new terminal services agreement for the storage and throughputting of such customer’s sulfuric acid at the Blakeley, AL facility commencing no later than January 1, 2018.  Neither Arc Terminals Holdings nor the Blakeley Customer has any obligation to enter into such new terminal services agreement.  As of December 31, 2015, we had established an accrual of $2.0 million with respect to our obligations under the settlement agreement.  Through March 31, 2016, we have made paid approximately $0.3 million towards our obligations under the settlement agreement.   The terminal services agreement that has been terminated provided for an amount of minimum take or pay revenue, on a quarterly basis over the remaining term of such terminal services agreement, that would have represented less than 1% of our total revenue for the year ended December 31, 2015.

Cash Flows

Three Months Ended March 31, 2016 Compared to Three Months Ended March 31, 2015

A summary of the changes in cash flow data is provided as follows (in thousands, except percentages):

	Three Months Ended
	March 31,
	2016			2015			$ Change			% Change
Net cash flows provided by (used in):
Operating activities	$	12,520		$	5,403		$	7,117			132	%
Investing activities		(13,715	)		(1,644	)		(12,071	)	N/M
Financing activities		2,213			(5,913	)		8,126		N/M

Cash Flow from Operating Activities. Operating activities primarily consist of net income adjusted for non-cash items, including depreciation and amortization and the effect of working capital changes. Net cash provided by operating activities was $12.5 million for the three months ended March 31, 2016 compared to $5.4 million for the three months ended March 31, 2015. The increase in net cash provided by operating activities was primarily the result of an increase in net income of approximately $4.5 million for the three months ended March 31, 2016 compared to the three months ended March 31, 2015.  Our operating cash flows for the three months ended March 31, 2016 also included increases to certain non-cash charges relating to depreciation and amortization of $1.8 million and $2.5 million, respectively.  These increases were offset by a decrease in working capital of $1.9 million.  The net changes in working capital were primarily driven by the timing of collection of accounts receivables and the timing of payments of accounts payables and accrued expenses.  

Cash Flow from Investing Activities. Investing activities consist primarily of capital expenditures for expansion and maintenance as well as property and equipment divestitures.  Net cash used in investing activities was $13.7 million for the three months ended March 31, 2016, of which $8.0 million was used for the Pennsylvania Terminals Acquisition and $5.7 million was used for expansion and maintenance capital expenditures.  Net cash used in investing activities was $1.6 million for the three months ended March 31, 2015, of which $0.3 million related to the capital calls by Gulf LNG Holdings for its development of a natural gas liquefaction and export terminal at the LNG Facility and $1.3 million was used for expansion and maintenance capital expenditures.

Cash Flow from Financing Activities. Financing activities consist primarily of borrowings and repayments related to the Credit Facility, the related deferred financing costs and distributions to our investors. Net cash flows provided by financing activities was $2.2 million for the three months ended March 31, 2016, compared to net cash flows used in financing activities of $5.9 million for the three months ended March 31, 2015. This $8.1 million increase was primarily attributable to an increase in net borrowings from our Credit Facility of $14.3 million related to the Pennsylvania Terminals Acquisition and expansion capital expenditures, offset by an increase in distributions of $6.0 million.

Contractual Obligations

We have contractual obligations that are required to be settled in cash. Our contractual obligations as of March 31, 2016 were as follows (in thousands):

	Payments Due by Period
			Less than		1-3		3-5		More than
	Total		1 year		years		years		5 years
Long-term debt obligations	$	240,313	$	-	$	240,313	$	-	$	-
Operating lease obligations		22,235		6,457		15,673		105		-
Earn-out obligations		18,489		1,369		2,738		2,738		11,644
Settlement obligations		1,750		875		875		-		-
Total	$	282,787	$	7,826	$	258,724	$	2,843	$	11,644

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Capital Expenditures

The terminalling and storage business is capital-intensive, requiring significant investment for the maintenance of existing assets and the acquisition or development of new facilities. We categorize our capital expenditures as either:

● maintenance capital expenditures, which are cash expenditures made to maintain our long-term operating capacity or operating income; or

● expansion capital expenditures, which are cash expenditures incurred for acquisitions or capital improvements that we expect will increase our operating capacity or operating income over the long term.

We incurred maintenance and expansion capital expenditures for the three months ended March 31, 2016 and 2015 as set forth in the following table (in thousands):

	Three Months Ended
	March 31,
	2016		2015
Maintenance capital expenditures	$	2,080	$	288
Expansion capital expenditures		4,177		1,255
Total capital expenditures	$	6,257	$	1,543

Maintenance Capital Expenditures

Maintenance capital typically consists of capital invested to: (i) clean, inspect and repair storage tanks; (ii) clean and paint tank exteriors; (iii) inspect and upgrade vapor recovery/combustion units; (iv) upgrade fire protection systems; (v) evaluate certain facilities regulatory programs; (vi) inspect and repair cathodic protection systems; (vii) inspect and repair tank infrastructure; and (vi) make other general facility repairs as required. Due to the nature of these projects we will incur additional capital expenditures in some years as compared to others.  The increase during the three months ended March 31, 2016 as compared to the three months ended March 31, 2015 was due to maintenance dredging at our Gulf Coast terminals, maintenance to the marine infrastructure at our Chickasaw, AL terminal and tank inspections at our Mobile and Portland terminals, all which did not occur during the three months ended March 31, 2015 because these types of maintenance projects do not occur on an annual basis.  

Expansion Capital Expenditures

During the three months ended March 31, 2016, we invested capital to upgrade our Blakeley terminal in connection with a new long-term customer agreement, invested capital to upgrade our Joliet and Portland terminals to support existing customer agreements, invested capital at our Pawnee terminal to construct a new tank to support an existing customer contract and invested capital to expand the marine infrastructure and capabilities of our Chickasaw terminal.

During the three months ended March 31, 2015, we invested capital to upgrade the Blakeley terminal and Toledo terminal in connection with two new five-year customer agreements.

Our capital funding requirements were funded from borrowings under the Credit Facility and cash from operations. We anticipate that maintenance capital expenditures will be funded primarily with cash from operations or with borrowings under our Credit Facility. We generally intend to fund the capital required for expansion capital expenditures through borrowings under our Credit Facility and the issuance of equity and debt securities.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

As of March 31, 2016, there have been no significant changes to our critical accounting policies and estimates disclosed in our 2015 Partnership 10-K, as filed with the SEC.  

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The following market risk disclosures should be read in conjunction with the quantitative and qualitative disclosures about market risk contained in our 2015 Partnership 10-K, as filed with the SEC. Market risk is the risk of loss arising from adverse changes

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in market rates and prices. We do not take title to the crude oil and petroleum products that we handle and store. We do not intend to hedge our indirect exposure to commodity risk.

Interest Rate Risk

We have exposure to changes in interest rates on our indebtedness. As of March 31, 2016, we had $240.3 million of outstanding borrowings under the Credit Facility, bearing interest at variable rates. The weighted average interest rate incurred on the indebtedness during the three months ended March 31, 2016 was approximately 3.6%. The impact of a 1% increase in the interest rate on this amount of debt would have resulted in an estimated $0.6 million increase in interest expense for the three months ended March 31, 2016 assuming that our indebtedness remained constant throughout the year. We may use certain derivative instruments to hedge our exposure to variable interest rates in the future, but we do not currently have in place any hedges.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have evaluated, under the supervision and with the participation of management of our General Partner, including our General Partner’s principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our General Partner’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon that evaluation, our General Partner’s principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2016 at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2016 that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Although we may, from time to time, be involved in various legal claims arising out of our operations in the normal course of business, we do not believe that the resolution of these matters will have a material adverse impact on our financial condition or results of operations.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risks under the heading “Risk Factors” in our 2015 Partnership 10-K. There has been no material change in our risk factors from those described in the 2015 Partnership 10-K. These risks are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations.

Item 5. Other Information

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On May 9, 2016, our General Partner adopted a form of Change of Control Agreement (the “COC Agreement”) in order to recognize and encourage the continuation of valuable services to our General Partner, us and our subsidiaries provided by certain key personnel, including persons employed by an affiliate that controls our General Partner, and has entered into a COC Agreement with each of our Named Executive Officers.  A summary of the material features of the COC Agreement is set forth below. Capitalized terms used in the summary below but not otherwise defined therein shall have the meanings ascribed to such terms in the COC Agreement.

Under the COC Agreement, if a Named Executive Officer’s employment with the Partnership Entities is terminated (A) during the two-year period following a Change of Control either (i) without Cause, (ii) by the Named Executive Officer for Good Reason or (iii) due to the Named Executive Officer’s death or Disability provided such death or disability occurs while the Name Executive Officer is fulfilling his duties to the Partnership Entities or (B) during the six-month period preceding the Change of Control without

40

Cause provided such termination is in connection with or in anticipation of the Change of Control, such Named Executive Officer will be entitled to certain severance payments and benefits. The severance payments and benefits generally consist of a lump sum cash payment, payable on the 60^th day following the Date of Separation (or on the 60^th day following a Change of Control if the termination occurs without Cause in the six-monthperiod preceding, and in connection with or in anticipation of, the Change of Control), in an amount equal to the sum of (1) any payments or obligations accrued by the Named Executive Officer from the first day of the calendar year through the Date of Separation; (2) a pro-rata portion of the greater of the Named Executive Officer’s (a) target annual cash bonus for the year in which the Date of Separation occurs and (b) the total dollar amount of the annual bonus earned by the Named Executive Officer for the calendar year immediately prior to the calendar year in which the Date of Separation occurs (which amount shall include the dollar value of any equity-based interests, including derivate equity interests, awarded to the Named Executive Officer as part of such annual bonus); (3) the product of two (2) times the sum of the Named Executive Officer’s (a) annualized base salary and (b) target annual cash bonus for the calendar year in which the Date of Separation occurs (or, with respect to (b) in the event that no target annual cash bonus has been set, the Named Executive Officer’s target annual cash bonus established for the calendar year of 2016); and (4) an additional lump sum of $40,000.  In the case of the COC Agreements applicable to recipients thereof other than the Named Executive Officers, the multiplier applied to the sum of such recipient’s annualized base salary and target annual cash bonus (or, in certain circumstances, actual cash bonus in the year immediately preceding the year of separation) as described in clause (3) of the immediately preceding sentence varies between one (1), one and a half (1.5) and two (2), as selected by our Board.

Payments under a COC Agreement are subject to, and conditioned on, the COC Agreement recipient executing and not revoking a release of claims in our General Partner’s customary form following the Date of Separation.

The foregoing description of the COC Agreement does not purport to be complete and is qualified in its entirety by reference to the Form of Change of Control Agreement, a copy of which is filed as Exhibit 10.3 to this Quarterly Report on Form 10-Q.

Item 6. Exhibits

The information required by this Item 6 is set forth in the Index to Exhibits accompanying this Quarterly Report on Form 10-Q and is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ARC LOGISTICS PARTNERS LP
	By:	ARC LOGISTICS GP LLC, its General Partner
Date: May 6, 2016	By:	/s/ BRADLEY K. OSWALD
		Bradley K. Oswald
		Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Duly Authorized Officer)

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EXHIBIT INDEX

Exhibit No.	Description
3.1	Certificate of Limited Partnership of Arc Logistics Partners LP (incorporated herein by reference to Exhibit 3.1 to Amendment No. 1 to Arc Logistics Partners LP’s Registration Statement on Form S-1 filed on October 21, 2013 (SEC File No. 333-191534)).
3.2	First Amended and Restated Agreement of Limited Partnership of Arc Logistics Partners LP, dated November 12, 2013, by and among Arc Logistics GP LLC, Lightfoot Capital Partners, LP and Lightfoot Capital Partners GP LLC. (incorporated herein by reference to Exhibit 3.1 of Arc Logistics Partners LP’s Current Report on Form 8-K filed on November 12, 2013 (SEC File No. 001-36168)).
10.1*	Side Letter to the Storage and Throughput Agreement, dated July 1, 2007, by and between Arc Terminals Holdings LLC (as successor by assignment to Arc Terminals LP) and G.P. & W. Inc. d/b/a center Oil Company and d/b/a Center Marketing Company as amended, dated January 15, 2016.
10.2*	Form of Phantom Unit Award Agreement (Employees – 2016) under the Arc Logistics Amended and Restated Long Term Incentive Plan.
10.3*	Form of Change of Control Agreement.
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

* Filed herewith

** Furnished herewith

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EX-10.1

Exhibit 10.1

Arc Terminals Holdings LLC

c/o Arc Logistics Partners LP

725 Fifth Avenue, 19^th Floor

NY, NY 10022  

January 15, 2016

Center Oil Company

600 Mason Ridge Center Drive, 2nd Floor

St. Louis, Missouri 63141

Dear Gentlemen:

Reference is made to that certain Storage and Throughput Agreement by and between Arc Terminals Holdings LLC (as successor by assignment to Arc Terminals LP) (“Arc”) and G.P. & W., Inc. d/b/a/ Center Oil Company and d/b/a Center Marketing Company (“Center” and, together with Arc, the “Parties”) dated July 1, 2007 as the same has been amended, modified or supplemented to date (the “Throughput Agreement”).  Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Throughput Agreement.

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Center hereby agrees as follows:

1.Center hereby acknowledges and agrees that, for the avoidance of doubt and notwithstanding any other provision to the contrary contained in the Throughput Agreement, commencing July 1, 2015 through September 30, 2015, the Throughput Volume Fee Per Barrel was $0.43 per Barrel.

2. Center agrees that this letter agreement constitutes an amendment to and an integral part of the Throughput Agreement and that, except as amended hereby, the Throughput Agreement is hereby ratified and confirmed in all respects and, except as amended hereby, shall continue in full force and effect.

If you are in agreement with the foregoing, please execute this letter agreement in the space provided below.

Arc Terminals Holdings LLC

By: __/s/ John Blanchard_____________

        Name:  John Blanchard

        Title:    President

Accepted and agreed to by

G.P.&W., INC. as of the date first written above:

G.P.&W., INC., a Missouri corporation doing business as

Center Oil Company and Center Marketing Company

By: __/s/ Gerald L. Jost, Jr._____________

       Name: Gerald L. Jost, Jr.

       Title: Director of Distribution

EX-10.2

Exhibit 10.2

ARC LOGISTICS
AMENDED AND RESTATED LONG TERM INCENTIVE PLAN

PHANTOM UNIT AGREEMENT

This Phantom Unit Agreement, dated [                ] (this “Agreement”), is made and entered into by and between Arc Logistics GP LLC, a Delaware limited liability company (the “General Partner”), and [              ] (the “Awardee”), and relates to Phantom Units awarded to the Awardee on [                                ](the “Date of Grant”). Capitalized terms used in this Agreement but not otherwise defined herein shall have the meanings ascribed to such terms in the Plan (as defined below), unless the context requires otherwise.

W I T N E S S E T H:

WHEREAS, Arc Logistics Partners LP, a Delaware limited partnership (the “Partnership”), acting through the Board of Directors of the General Partner (the “Board”), has adopted the Arc Logistics Amended and Restated Long Term Incentive Plan (the “Plan”) to, among other things, attract, retain and motivate certain employees, consultants and directors of the Partnership, the General Partner and their respective Affiliates (collectively, the “Partnership Entities”); and

WHEREAS, the Committee has authorized the grant of Phantom Units of the Partnership to directors, employees, officers and consultants as part of their compensation for services provided to the Partnership Entities.

NOW, THEREFORE, in consideration of the Awardee’s agreement to provide or to continue providing services, the Awardee and the General Partner agree as follows:  

1.Grant of Phantom Units.  The General Partner hereby grants to the Awardee [Number of Units] Phantom Units (the “Award”), subject to all of the terms and conditions set forth in the Plan and this Agreement, including without limitation, those restrictions described in Section 4, whereby each Phantom Unit represents the right to receive one Unit of the Partnership and/or cash in an amount equal to the Fair Market Value of one Unit (each, a “Phantom Unit”).

2.Phantom Unit Account.  Phantom Units represent hypothetical Units and not actual Units. The General Partner shall establish and maintain a bookkeeping account on its records for the Awardee (a “Phantom Unit Account”) and shall record in such Phantom Unit Account: (a) the number of Phantom Units granted to the Awardee and (b) the amount deliverable to the Awardee at settlement on account of Phantom Units that have vested.  The Awardee shall not have any interest in any fund or specific assets of the Partnership by reason of this Award or the Phantom Unit Account established for the Awardee.  

3.Rights of Awardee.  No Units shall be issued to the Awardee at the time the grant is made, and the Awardee shall not be, nor have any of the rights and privileges of, a unitholder or limited partner of the Partnership with respect to any Phantom Units recorded in the Phantom Unit

Account.  The Awardee shall have no voting rights with respect to the Phantom Units.  In the event the Partnership pays any distributions in respect of its outstanding Units and, on the record date for such distribution, the Awardee holds Phantom Units granted pursuant to this Agreement that have not vested and been settled, the Partnership shall deliver to the Awardee an amount in cash or propertyin the same form the distribution was delivered to unitholders generally based on the number of Units related to the portion of the Awardee’s Phantom Units that have not been settled as of the record date for the distribution (the “DER”), such distribution equivalents to be delivered to the Awardee on or promptly following the date that the Partnership pays such cash distribution (however, in no event shall the DER payment be made later than 30 days following the date on which the Partnership pays such distribution to unitholders generally). Notwithstanding the date of payment, the Awardee will vest in such DER as of the record date for such distribution.  No interest will accrue on any such right between the issuance of the distribution to unitholders generally and the settlement of the DER.  

4.Vesting of Phantom Units.  The Phantom Units are restricted in that they may be forfeited by the Awardee and in that they may not, except as otherwise provided in the Plan, be transferred or otherwise disposed of by the Awardee.  Subject to the terms and conditions of this Agreement, the forfeiture restrictions on the Phantom Units shall lapse, and the Phantom Units shall vest as set forth in the following vesting chart:

Vesting Date	Percentage of Phantom Units that become Vested
On the first anniversary of the Date of Grant	33 ⅓%
On the second anniversary of the Date of Grant	33 ⅓%
On the third anniversary of the Date of Grant	33 ⅓%
Total	100%

Notwithstanding the vesting chart set forth above in this Section 4 (the “Vesting Chart”), such restrictions will lapse, and the Phantom Units shall vest in accordance with this Section 4 only if the Awardee has continuously provided services to one of the Partnership Entities (except to the extent such continuous service shall not be a vesting requirement in connection with a termination of employment or other separation from service as provided in Section 5(a) and Section 5(b) hereof) from the Date of Grant until the applicable date of vesting (each, a “Vesting Date”).

5.Change of Control and Termination of Employment or Service.

(a)Termination Prior to or Following a Change of Control. Notwithstanding the Vesting Chart set forth in Section 4 of this Agreement, in the event the Awardee experiences a termination of employment with or other separation from service from the applicable Partnership Entity prior to the final Vesting Date and (i) such termination of employment or other separation from service is by such Partnership Entity prior to and in connection with a Change of Control (or an anticipated Change of Control), then all Phantom Units subject to this Agreement shall

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immediately become vested and nonforfeitable (to the extent not vested prior to such date) contemporaneously with such Change of Control, or (ii) such termination of employment or other separation from service is by the Awardee for “Good Reason” or by such Partnership Entity without “Cause” (as such quoted terms are defined in Section 5(d) hereof)following, in either case, a Change of Control, then all Phantom Units subject to this Agreement shall immediately become vested and nonforfeitable (to the extent not vested prior to such date) as of the date of termination or separation.  

(b)Death and Disability.  If the Awardee experiences a termination of employment with or other separation from service from the applicable Partnership Entity due to death or Disability prior to the final Vesting Date, then all Phantom Units subject to this Agreement will immediately become vested and nonforfeitable (to the extent not vested or forfeited prior to that date) as of the date of termination or separation.

(c)Other Terminations. If the Awardee experiences a termination of employment with or other separation from service from the applicable Partnership Entity for any reason other than as described in Section 5(a) or Section 5(b) of this Agreement prior to the final Vesting Date, then all Phantom Units granted pursuant to this Agreement that have not yet vested shall become null and void as of the date of such termination of employment or other separation from service; provided, however, that the Committee, in its sole and absolute discretion, may decide to vest all or any portion of the Phantom Units that remain unvested as of the date of termination or separation or may allow such Phantom Units to remain outstanding and vest pursuant to the Vesting Chart set forth in Section 4 hereof or pursuant to such other terms and conditions established by the Committee. The portion of the Phantom Units, if any, that do not become vested in accordance with the foregoing (including in accordance with Section 5(a)(i), pursuant to which Phantom Units shall vest in connection with a Change in Control following the date the Awardee’s employment or other service terminates) shall become null and void as of the date of the termination of employment or other separation from service; provided, however, that, the portion, if any, of the Phantom Units that vest as of such date shall survive.

(d)Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below.

(i)“Cause” means a determination in good faith by a majority of the Board (sitting without the Awardee, if applicable) that the Awardee has:

(A)materially breached this Agreement or any other written employment or severance agreement between the Awardee and the General Partner or the Partnership, including a material breach by the Awardee of any representation, warranty or covenant made under any such agreement, or materially breached any written policy or written code of conduct established by the General Partner or the Partnership and applicable to the Awardee;

(B)committed an act of willful misconduct or breach of fiduciary duty with respect to the Partnership Entities, or an act of fraud, theft or embezzlement;

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(C)committed, been convicted of or been indicted for, or pled nolo contendere to, any felony (or state law equivalent) or any crime or misdemeanor involving moral turpitude; or 

(D)willfully failed or refused, other than due to death or Disability, to perform the Awardee’s duties or follow any reasonable directive from the Chief Executive Officer or the Board;

provided, however, that if the Awardee’s actions or omissions as set forth in (A) through (D) above are of such a nature that they may be cured, such actions or omissions must remain uncured for a period of 30 days after the General Partner or the Board has provided the Awardee written notice providing the details of such actions or omissions and requesting the Awardee to cure such actions or omissions.

(ii)“Good Reason” means the occurrence of any of the following events or conditions: (A) a diminution in the Awardee’s salary and target bonus of five percent (5%) or more; (B) a material diminution or adverse change in the Awardee’s title, duties or authority; (C) a material breach by the General Partner of any of its covenants or obligations under this Agreement or any other written employment or severance agreement between the Awardee and the General Partner or the Partnership; (D) the relocation of the geographic location of the Awardee’s principal place of service by more than 50 miles from the location of Awardee’s principal place of service as of the Date of Grant; or (E) the failure of any successor to assume the obligations of the General Partner hereunder in accordance with the provisions of Section 12(e) hereof; provided, however, that in the case of the Awardee’s allegation of Good Reason, (1) the condition described in the foregoing clauses must have arisen without the Awardee’s consent; (2) the Awardee must provide written notice to the General Partner of such condition in accordance with this Agreement within 45 days of the initial existence of the condition; (3) the condition specified in such notice must remain uncorrected for 30 days after the receipt of such notice by the General Partner; and (4) the Awardee’s termination of employment with or other separation from service from the applicable Partnership Entity must occur within 60 days after such notice is received by the General Partner.

6.Settlement Date; Manner of Settlement.  The settlement date or dates of the Units related to the Awardee’s Phantom Units will be the date or dates on which the restrictions on such Phantom Units expire and the Phantom Units become vested as provided in Sections 4 and 5 of this Agreement. To the extent that the Award consists of 1,000 Phantom Units or more, any Phantom Units that vest shall be paid to the Awardee in the form of Units on the settlement date(s). To the extent that the Award consists of less than 1,000 Phantom Units, any Phantom Units that vest shall be paid to the Awardee in cash on the settlement date(s). The value of any Phantom Unit paid in cash shall equal the number of vested Phantom Units multiplied by the Fair Market Value of a Unit. The value of any fractional Phantom Units shall be paid in cash on the settlement date(s).  The value of the fractional Phantom Unit paid in cash shall equal the percentage of a Unit represented by a fractional Phantom Unit multiplied by the Fair Market Value of the Unit. The Awardee agrees that any vested Units that the Awardee acquires upon vesting of the Phantom

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Units will not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable federal or state securities laws, the Plan or the rules, regulations and other requirements of the U.S. Securities and Exchange Commission (the “SEC”) and any stock exchange upon which the Units are then listed.  The Awardee also agrees that any certificates representing the Units acquired under this award may bear such legend or legends as the Committee deems appropriate in order to assure compliance with applicable securities laws.  In addition to the terms and conditions provided herein, the Partnership may require that the Awardee make such covenants, agreements, and representations as the Committee, in its sole discretion, deems advisable in order to comply with any such laws, rules, regulations, or requirements. 

7.Limitations on Transfer.  The Awardee agrees that such person shall not dispose of (meaning, without limitation, sell, transfer, pledge, exchange, hypothecate or otherwise dispose of) any Phantom Units or other rights hereby acquired prior to the date the Phantom Units are vested and settled.  Any attempted disposition of the Phantom Units in violation of the preceding sentence shall be null and void and the Phantom Units that the Awardee attempted to dispose of shall be forfeited.

8.Adjustment.  The number of Phantom Units granted to the Awardee pursuant to this Agreement shall be adjusted to reflect distributions of the Partnership paid in units, unit splits or other changes in the capital structure of the Partnership, all in accordance with the Plan.  All provisions of this Agreement shall be applicable to such new or additional or different units or securities distributed or issued pursuant to the Plan to the same extent that such provisions are applicable to the units with respect to which they were distributed or issued.  

9.Violation of Law, Regulation or Rule.  The General Partner shall not be required to deliver any Units hereunder if, upon the advice of counsel for the General Partner, such acquisition or delivery would violate the Securities Act of 1933 or any other applicable federal, state, or local law or regulation or the rules of the exchange upon which the Partnership’s Units are traded.  

10.Copy of Plan.  By the execution of this Agreement, the Awardee acknowledges receipt of a copy of the Plan.  If any provision of this Agreement is held to be illegal, invalid or unenforceable under any applicable law, then such provision will be deemed to be modified to the minimum extent necessary to render it legal, valid and enforceable; and if such provision cannot be so modified, then this Agreement will be construed as if not containing the provision held to be invalid, and the rights and obligations of the parties will be construed and enforced accordingly.

11.Notices.  Whenever any notice is required or permitted hereunder, such notice must be in writing and personally delivered or sent by mail.  Any such notice required or permitted to be delivered hereunder shall be deemed to be delivered on the date on which it is personally delivered or, whether actually received or not, on the third business day (on which banking institutions in the State of New York are open) after it is deposited in the United States mail, certified or registered, postage prepaid, addressed to the person who is to receive it at the address which such person has theretofore specified by written notice delivered in accordance herewith.  The General Partner or the Awardee may change at any time and from time to time by written notice to the other, the address which it or he previously specified for receiving notices.  The

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General Partner and the Awardee agree that any notices shall be given to the General Partner or to the Awardee at the following addresses:  

General Partner:Arc Logistics GP LLC

Attn: General Counsel

725 Fifth Avenue, 19^th Floor

New York, NY 10022

Awardee: At the Awardee’s current address as shown in the General Partner’s records.  

12.General Provisions.  

(a)Administration.  This Agreement shall at all times be subject to the terms and conditions of the Plan.  The Committee shall have sole and complete discretion with respect to all matters reserved to it by the Plan and decisions of a majority of the Committee with respect thereto and with respect to this Agreement shall be final and binding upon the Awardee and the General Partner.  In the event of any conflict between the terms and conditions of this Agreement and the Plan, the provisions of the Plan shall control.

(b)No Effect on Service.  Nothing in this Agreement or in the Plan shall be construed as giving the Awardee the right to be retained in the employ or service of the Partnership Entities. Furthermore, the Partnership Entities may at any time terminate the service relationship with the Awardee free from any liability or any claim under the Plan or this Agreement, unless otherwise expressly provided in the Plan, this Agreement or other written agreement.

(c)Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to conflicts of law principles thereof.

(d)Amendments.  This Agreement may be amended only by a written agreement executed by the General Partner and the Awardee, except that the Committee may unilaterally waive any conditions or rights under, amend any terms of, or alter this Agreement provided no such change (other than pursuant to Section 7(b), 7(c), 7(d), 7(e), or 7(g) of the Plan) materially reduces the rights or benefits of the Awardee with respect to the Phantom Units without his consent.  

(e)Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successor or successors of the General Partner or the Partnership and upon any person lawfully claiming under the Awardee.  

(f)Entire Agreement.  This Agreement and the Plan constitute the entire agreement of the parties hereto with regard to the subject matter hereof, and contain all the covenants, promises, representations, warranties and agreements between the parties with respect to the Phantom Units granted hereby.  Without limiting the scope of the preceding sentence, all prior understandings and agreements, if any, among the parties hereto relating to the subject matter hereof are hereby null and void and of no further force and effect.  

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(g)No Liability for Good Faith Determinations.  Neither the Partnership Entities nor the members of the Committee and the Board shall be liable for any act, omission or determination taken or made in good faith with respect to this Agreement or the Phantom Units granted hereunder. 

(h)No Guarantee of Interests.  The Committee, the Board and the Partnership Entities do not guarantee the Units from loss or depreciation.

(i)Tax Withholding.  Upon any taxable event arising in connection with the Phantom Units, the Partnership Entities shall have the authority and the right to deduct or withhold, or to require the Awardee to remit to a Partnership Entity, an amount sufficient to satisfy all applicable federal, state and local taxes (including the Awardee’s employment tax obligations) required by law to be withheld with respect to such event. In satisfaction of the foregoing requirement, unless otherwise determined by the Committee (which such determination may not be delegated), the General Partner or one of its Affiliates is permitted to withhold Units otherwise issuable in respect of such Phantom Units having a Fair Market Value on the date of withholding equal to the aggregate amount of taxes required to be withheld with respect to such event based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income to the extent such withholding is elected by the Awardee.

(j)Insider Trading Policy.  The terms of the Partnership’s insider trading policy with respect to Units are incorporated herein by reference.

(k)Severability.  If any provision of this Agreement is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and this Agreement shall be construed and enforced as if the illegal or invalid provision had never been included herein.

(l)Headings.  The titles and headings of Sections are included for convenience of reference only and are not to be considered in construction of the provisions hereof.

(m)Gender.  Words used in the masculine shall apply to the feminine where applicable, and wherever the context of this Agreement dictates, the plural shall be read as the singular and the singular as the plural.

(n)Clawback.  Notwithstanding any provisions in the Plan or this Agreement to the contrary, any portion of the payments and benefits provided under this Agreement or the sale of the Units granted hereunder shall be subject to a clawback or other recovery by the Partnership Entities to the extent necessary to comply with applicable law including, without limitation, the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any SEC rule.

(o)Consent to Electronic Delivery; Electronic Signature. In lieu of receiving documents in paper format, the Awardee agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Partnership may be required to deliver (including, without limitation, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other forms of

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communications) in connection with this and any other award made or offered by the Partnership. Electronic delivery may be via a Partnership electronic mail system or by reference to a location on a Partnership intranet to which the Awardee has access.  TheAwardee hereby consents to any and all procedures the Partnership has established or may establish for an electronic signature system for delivery and acceptance of any such documents that the Partnership may be required to deliver, and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature. 

(p)Section 409A. None of the Phantom Units, the DERs or any amounts paid pursuant to this Agreement are intended to constitute or provide for a deferral of compensation that is subject to Section 409A of the Code.  To the extent that the Committee determines that the Phantom Units or DERs are not exempt from Section 409A of the Code, the Committee may (but shall not be required to) amend this Agreement in a manner intended to comply with the requirements of Section 409A of the Code or an exemption therefrom (including amendments with retroactive effect), or take any other actions as it deems necessary or appropriate to (a) exempt the Phantom Units or DERs from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Phantom Units or DERs, or (b) comply with the requirements of Section 409A of the Code.  To the extent applicable, this Agreement shall be interpreted in accordance with the provisions of Section 409A of the Code.  Notwithstanding anything in this Agreement to the contrary, to the extent that any payment or benefit hereunder constitutes non-exempt “nonqualified deferred compensation” for purposes of Section 409A of the Code, and such payment or benefit would otherwise be payable or distributable hereunder by reason of the Awardee’s termination of employment or other separation from service, all references to the Awardee’s termination of employment or other separation from service shall be construed to mean a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), and the Awardee shall not be considered to have a termination of employment or a separation from service unless such termination or separation constitutes a Separation from Service with respect to the Awardee. Notwithstanding anything to the contrary in this Agreement, no amounts payable under this Agreement on account of the Awardee’s Separation From Service shall be paid to the Awardee prior to the expiration of the six (6) month period following the Awardee’s Separation From Service to the extent that the Partnership Entities determine that paying such amounts prior to the expiration of such six (6) month period would result in a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code. If the payment of any such amount is delayed as a result of the preceding sentence, then on the first business day following the end of the applicable six (6) month period (or such earlier date upon which such amount may be paid under Section 409A of the Code without resulting in a prohibited distribution), the amount shall be paid to the Awardee.

[Signature Page Follows]

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IN WITNESS WHEREOF, the General Partner has caused this Agreement to be executed by its officer thereunto duly authorized, and the Awardee has set his hand as to the date and year first above written.  

ARC LOGISTICS GP LLC

By:

Name:

Title:

AWARDEE

_____________________________________________

[Name of Employee]

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EX-10.3

Exhibit 10.3

ARC LOGISTICS GP LLC

CHANGE OF CONTROL AGREEMENT

This Change of Control Agreement (the “Agreement”) is made and entered into as of May ___, 2016 (the “Effective Date”) by and between Arc Logistics GP LLC, a Delaware limited liability company (the “General Partner”), and [●] (the “Recipient”).

W I T N E S S E T H:

WHEREAS, the General Partner is the general partner of Arc Logistics Partners LP, a Delaware limited partnership (the “Partnership”);

WHEREAS, the General Partner, the Partnership and the subsidiaries thereof benefit from services provided by certain key personnel, including persons employed by an Affiliate that controls the General Partner, and the General Partner desires to encourage the continuation of the services provided by the Recipient for the benefit of the General Partner, the Partnership and the other Partnership Entities by entering into this change of control severance agreement with the Recipient; and

WHEREAS, the Recipient is prepared to commit services for the benefit of the General Partner, the Partnership and the other Partnership Entities in return for specific arrangements with respect to potential change of control severance compensation;

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the General Partner and the Recipient agree as follows:

1.Definitions.  For purposes of this Agreement, the terms listed below will have the meanings specified herein:

(a)“Accrued Payments” means (i) any earned but unpaid Base Salary through the Date of Separation, (ii) any annual cash bonus for the calendar year ended immediately prior to the calendar year in which the Date of Separation occurs, to the extent unpaid, in an amount equal to the actual bonus earned by the Recipient for such prior calendar year, (iii) unreimbursed business expenses that are eligible for reimbursement in accordance with the policies applicable to the Recipient through the Date of Separation, and (iv) such employee benefits, if any, as to which the Recipient may be entitled pursuant to the terms governing such benefits.  

(b)“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

(c)“Base Salary” means the amount the Recipient is entitled to receive as wages or salary on an annualized (12-month) basis (which, for purposes of Section 3(b) below, shall be determined as of the time immediately prior to the Date of Separation). 

(d)“Board” means the board of directors of the General Partner.  

(e)“Cause” means a determination in good faith by a majority of the Board (sitting without the Recipient, if applicable) that the Recipient has:

(i)materially breached this Agreement or any other written employment or severance agreement between the Recipient and the General Partner or the Partnership, including a material breach by the Recipient of any representation, warranty or covenant made under any such agreement, or materially breached any written policy or written code of conduct established by the General Partner or the Partnership and applicable to the Recipient;

(ii)committed an act of willful misconduct or breach of fiduciary duty with respect to the Partnership Entities, or an act of fraud, theft or embezzlement;

(iii)committed, been convicted of or been indicted for, or pled nolo contendere to, any felony (or state law equivalent) or any crime or misdemeanor involving moral turpitude; or

(iv)willfully failed or refused, other than due to death or Disability, to perform the Recipient’s duties or follow any reasonable directive from the Chief Executive Officer or the Board;

provided, however, that if the Recipient’s actions or omissions as set forth in (i) through (iv) above are of such a nature that they may be cured, such actions or omissions must remain uncured for a period of 30 days after the General Partner or the Board has provided the Recipient written notice providing the details of such actions or omissions and requesting the Recipient to cure such actions or omissions.

(f)“Change of Control” means, and shall be deemed to have occurred upon one or more of the following events:

(i)any “person” or “group” shall become, directly or indirectly, the “beneficial owner” (each quoted term as defined within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act or the regulations thereunder), by way of acquisition, transfer, merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the voting power of the General Partner;

(ii)the members or limited partners (as applicable) of the General Partner or the Partnership elect, or a judicial decree is entered, to dissolve the General Partner or the Partnership;

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(iii)the sale or other disposition by either the General Partner or the Partnership (together with its subsidiaries taken as a whole) of all or substantially all of its assets in one or more transactions to any Person;  

(iv)the General Partner ceases to be the general partner of the Partnership; or

(v)the sale of a Series A Member (as defined in the LCPGP LLC Agreement) or an Affiliate of a Series A Member to a non-Series A Member or a Person that is not an Affiliate of such Series A Member, in either case, that results in a change in the majority of the non-independent members of the Board during a consecutive 12-month period.

(g)“Code” means the Internal Revenue Code of 1986, as amended, and applicable administrative guidance issued thereunder.  

(h)“Date of Separation” means, as applicable, (i) the date of receipt of the Notice of Separation or any later date specified therein or on an addendum thereto, as the case may be, or (ii) the date the Recipient is either determined to have a Disability (in accordance with Section 1(i) below) or dies.  For all purposes of this Agreement, the Recipient’s Date of Separation shall not occur prior to the date the Recipient incurs a “separation from service” with respect to the General Partner and the Partnership within the meaning of Section 409A of the Code.  

(i)“Disability” means (A) a determination in good faith by a majority of the Board (sitting without the Recipient, if applicable) that the Recipient is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (B) that the Recipient is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the General Partner or an Affiliate of the General Partner.

(j)“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(k)“Good Reason” means the occurrence of any of the following events or conditions: (i) a diminution in the Recipient’s Total Compensation of five percent (5%) or more; (ii) a material diminution or adverse change in the Recipient’s title, duties or authority; (iii) a material breach by the General Partner of any of its covenants or obligations under this Agreement; (iv) the relocation of the geographic location of the Recipient’s principal place of service by more than 50 miles from the location of the Recipient’s principal place of service as of the Effective Date; or (v) the failure of any successor to assume the obligations of the General Partner hereunder in accordance with the provisions of Section 4(c) hereof; provided, however, that in the case of the Recipient’s allegation of Good Reason, (A) the condition described in the foregoing clauses must have arisen without the Recipient’s consent; (B) the Recipient must provide written notice to the General Partner of such condition in accordance with this Agreement within 45 days of the initial existence of the condition; (C) the condition specified in such notice must remain uncorrected for

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30 days after receipt of such notice by the General Partner; and (D) the Recipient’s Date of Separation must occur within 60 days after such notice is received by the General Partner. 

(l)“LCPGP LLC Agreement” means the Limited Liability Company Agreement of Lightfoot Capital Partners GP LLC, as amended or restated from time to time.

(m)“Notice of Separation” means a written notice either communicated by (i) one of the Partnership Entities to the Recipient which (A) indicates the specific reason for the termination of the Recipient’s employment with the Partnership Entities, (B) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination, and (C) specifies the Date of Separation or, in the case of a termination without Cause, specifies that the Date of Separation shall be subject to the cure period described in Section 1(e) above, with the final Date of Separation communicated to the Recipient on an addendum to the Notice of Separation or (ii) the Recipient to the General Partner which (A) indicates the specific reason for the termination of the Recipient’s employment with the Partnership Entities, (B) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination, and (C) specifies the Date of Separation or, in the case of a termination for Good Reason, specifies that the Date of Separation shall be subject to the cure period described in Section 1(k) above, with the final Date of Separation communicated to the General Partner on an addendum to the Notice of Separation.

(n)“Partnership Entities” means the General Partner, the Partnership and any of their Affiliates.

(o)“Person” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, governmental agency or political subdivision thereof or other entity.

(p)“Pro-Rata Bonus” means a pro-rata portion of the greater of: (i) the Recipient’s target annual cash bonus for the calendar year during which the Date of Separation occurs under the programs, policies and arrangements applicable to the Recipient for such calendar year and (ii) an amount equal to the sum of (A) the portion of the annual bonus denominated in cash, expressed as a dollar amount and (B) the portion of the annual bonus denominated in equity-based interests (including derivative equity interests), expressed as a dollar amount equal to the amount used by the applicable Partnership Entity to determine the number of such equity-based interests granted to the Recipient (without giving effect to whether the equity-based interests granted have vested), and in the case of (A) and (B), actually earned by, or granted to (in the case of equity-based interests), the Recipient for the calendar year immediately prior to the calendar year in which the Date of Separation occurs under the programs, policies and arrangements applicable to the Recipient for such prior calendar year.

(q)“Protection Period” means (i) the six-month period ending on the date a Change of Control occurs, and (ii) the two-year period beginning on the date a Change of Control occurs.  

(r)“Separation Event” means the termination of the Recipient’s employment with the Partnership Entities during the Protection Period either (i) by one of the Partnership

4

Entities without Cause,(ii) by the Recipientfor Good Reason, or (iii) due to the Recipient’s death or Disability.  

(s)“Severance Conditions” means the Recipient’s execution, on or before the 45^th day following the Date of Separation, and delivery to the General Partner of a release of claims agreement in the General Partner’s customary form following the Date of Separation, which shall exclude (and not release) claims for indemnification, claims for coverage under officer and director policies, claims arising out of a breach of, or non-compliance with, the provisions of this Agreement, and claims as a direct or indirect equity holder of the Partnership and/or the General Partner and which may be amended by the General Partner to reflect changes in applicable laws and regulations, and the Recipient’s subsequent non-revocation of such release on or before the 53^rd day following the Date of Separation.

(t)“Target Bonus” means the amount of the Recipient’s target annual cash bonus for the calendar year during which the Date of Separation occurs under the programs, policies and arrangements applicable to the Recipient for such calendar year; provided, however, that if no such target annual cash bonus shall have been established for such calendar year, then “Target Bonus” shall instead mean the greater of: (i) the Recipient’s target annual cash bonus for the calendar year immediately prior to the calendar year in which the Date of Separation occurs under the programs, policies and arrangements applicable to the Recipient for such prior calendar year and (ii) the amount of the annual cash bonus actually earned by the Recipient for the calendar year immediately prior to the calendar year in which the Date of Separation occurs under the programs, policies and arrangements applicable to the Recipient for such prior calendar year.

(u)“Total Compensation” means the sum of the Recipient’s Base Salary and Target Bonus.

2.Term of Agreement.  The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect until it has been performed in full by the General Partner (or its successor, as provided herein) in accordance with the provisions hereof (the “Term”).

3.Payments.  In the event that the Recipient experiences a Separation Event, then the General Partner shall, contingent upon the Recipient satisfying the Severance Conditions:

(a)pay the Recipient, in a lump sum cash payment on the 60^th day following the Date of Separation (or the 60^th day following the occurrence of the Change of Control, in the case of a separation occurring during the six (6) month period ending on the Change of Control), an amount equal to the sum of (i) the Accrued Payments and (ii) the Pro-Rata Bonus;

(b)pay the Recipient, in a lump sum cash payment on the 60^th day following the Date of Separation (or the 60^th day following the occurrence of the Change of Control, in the case of a separation occurring during the six (6) month period ending on

5

the Change of Control), an amount equal to the product of[one (1)] [one and one-half (1.5)] [two (2)]¹times the sum of the Recipient’s (i) Base Salaryand(ii) Target Bonus; and 

(c)pay the Recipient, in a lump sum cash payment on the 60^th day following the Date of Separation (or the 60^th day following the occurrence of the Change of Control, in the case of a separation occurring during the six (6) month period ending on the Change of Control), an amount equal to $_________.

4.General Provisions.      

(a)Taxes.  The General Partner is authorized to withhold from any payments made hereunder amounts of withholding and other taxes due or potentially payable in connection therewith, and to take such other action as the General Partner may deem advisable to enable the General Partner and the Recipient to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any payments made under this Agreement.    

(b)Offset.  The General Partner may set off against, and the Recipient authorizes the General Partner to deduct from, any payments due to the Recipient, or to his estate, heirs, legal representatives, or successors, any amounts which may be due and owing to the General Partner or an Affiliate by the Recipient, whether arising under this Agreement or otherwise; provided that no such offset may be made with respect to amounts payable that are subject to the requirements of Section 409A of the Code unless the offset would not result in a violation of the requirements of Section 409A of the Code.  

(c)Successors.  This Agreement and all rights hereunder are personal to the Recipient and shall not be assignable by the Recipient; provided, however, that any amounts that shall become payable under this Agreement prior to the Recipient’s death shall inure to the benefit of the Recipient’s heirs and other legal representatives, as the case may be.  This Agreement shall bind, and inure to the benefit of, the General Partner and any successor pursuant to a Change of Control.  The General Partner shall require any successor pursuant to a Change of Control to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the General Partner would be required to perform if no succession had taken place.  Upon such assumption by the successor, the General Partner automatically shall be released from all liability hereunder.

(d)Unfunded Obligation.  All benefits due to the Recipient under this Agreement are unfunded and unsecured and are payable out of the general funds of the General Partner.  

(e)Limitation on Rights Conferred.  Neither this Agreement nor any action taken hereunder will be construed as (i) giving the Recipient the right to continue in the service of the General Partner or an Affiliate; (ii) interfering in any way with the right of the General Partner or any Affiliate to terminate the Recipient’s service at any time; or (iii) giving the Recipient any claim to be treated uniformly with other employees or service providers.

¹  NTD:  Select a time period, based on the severance period applicable to the individual a party to this agreement.

6

(f)Entire Agreement.  Except as otherwise specifically provided herein, this Agreement constitutes the entire agreement between the parties respecting the subject matter hereof and supersedes any prior agreements respecting severance benefits upon a Change of Control.  No amendment to this Agreement shall be deemed valid unless in writing and signed by the parties.  A waiver of any term, covenant, agreement or condition contained in this Agreement shall not be deemed a waiver of any other term, covenant, agreement or condition, and any waiver of any default in any such term, covenant, agreement or condition shall not be deemed a waiver of any later default thereof or of any other term, covenant, agreement or condition.  

(g)Severability.  If any provision of this Agreement is held to be illegal or invalid for any reason, the illegality or invalidity will not affect the remaining provisions of this Agreement, but such provision will be fully severable and this Agreement will be construed and enforced as if the illegal or invalid provision had never been included herein.

(h)Notices.  Any notice required or permitted to be given by this Agreement shall be effective only if in writing, delivered personally or by courier or by facsimile transmission or sent by express, registered or certified mail, postage prepaid, (i) to the Recipient at the last address he has filed with the General Partner, and (ii) to the General Partner at its principal executive offices, or at such other places that either party may designate by notice to the other.

(i)Section 409A. The amounts payable pursuant to this Agreement are intended to comply with the short term deferral exception to Section 409A of the Code and the regulations issued thereunder (“Section 409A”) and this Agreement shall be interpreted accordingly.  Notwithstanding anything contained herein to the contrary, to the extent that the Recipient is a “specified employee” within the meaning of Section 409A, no amount that may constitute a deferral of compensation and is not otherwise exempt from Section 409A which is payable on account of the Recipient’s separation from service shall be paid to the Recipient before the date (the “Delayed Payment Date”) which is first day of the seventh month after the Recipient’s Date of Separation or, if earlier, the date of the Recipient’s death following such date of separation.  All such amounts that would, but for this Section 4(i), become payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date.  No interest will be paid by the General Partner or an Affiliate with respect to any such delayed payments. In the event that the General Partner or an Affiliate determines that any amounts payable hereunder shall be taxable to the Recipient under Section 409A prior to payment to the Recipient, then, notwithstanding anything contained herein to the contrary, the General Partner may (i) adopt amendments to this Agreement, including amendments with a retroactive effect, that such party deems necessary or appropriate to preserve the intended tax treatment of the benefits provided hereunder and/or (ii) take such other action as such party deems necessary or appropriate to avoid the imposition of tax under Section 409A.  Notwithstanding the foregoing, in no event shall the General Partner or an Affiliate be liable for any tax, interest or penalties that may be imposed on the Recipient under Section 409A. For purposes of Section 409A, each payment or amount due under this Agreement shall be considered a separate payment.

(j)Clawback.  Notwithstanding any provisions in this Agreement to the contrary, any portion of the payments and benefits provided under this Agreement shall be subject to a clawback or other recovery by the General Partner or an Affiliate only to the extent the clawback or other recovery of such payments and benefits is necessary to comply with applicable

7

law including, without limitation, the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any U.S. Securities and Exchange Commission rule. 

(k)Governing Law.  All questions arising with respect to the provisions of this Agreement and payments due hereunder will be determined by application of the laws of the State of Delaware, without giving effect to any conflict of law provisions thereof, except to the extent Delaware law is preempted by federal law.

(l)Word Usage.  Words used in the masculine shall apply to the feminine, where applicable, and wherever the context of this Agreement dictates, the plural shall be read as the singular and the singular as the plural.

[Signature Page Follows]

8

IN WITNESS WHEREOF, the General Partner has caused this Agreement to be executed by its officer thereunto duly authorized, and the Recipient has executed this Agreement as of the date written below.  

ARC LOGISTICS GP LLC

By: ________________________________

Name: ______________________________

Title: _______________________________

RECIPIENT

____________________________________

[Name]

Signature Page to Change of Control Agreement

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Vincent T. Cubbage, certify that:

1. I have reviewed this report on Form 10-Q of Arc Logistics Partners LP (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 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 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.

Date: May 6, 2016

/s/ VINCENT T. CUBBAGE 

Vincent T. Cubbage

Chief Executive Officer, Chairman and Director

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Bradley K. Oswald, certify that:

1. I have reviewed this report on Form 10-Q of Arc Logistics Partners LP (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 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 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.

Date: May 6, 2016

/s/ BRADLEY K. OSWALD

Bradley K. Oswald

Senior Vice President, Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

Certification of the

Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Arc Logistics Partners LP (the “Partnership”) on Form 10-Q for the period ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Vincent T. Cubbage, the Chief Executive Officer of Arc Logistics GP LLC, the General Partner of the Partnership, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date: May 6, 2016

/s/ VINCENT T. CUBBAGE

Vincent T. Cubbage

Chief Executive Officer, Chairman and Director

EX-32.2

Exhibit 32.2

Certification of the

Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Arc Logistics Partners LP (the “Partnership”) on Form 10-Q for the period ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bradley K. Oswald, the Chief Financial Officer of Arc Logistics GP LLC, the General Partner of the Partnership, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date: May 6, 2016

/s/ BRADLEY K. OSWALD

Bradley K. Oswald

Senior Vice President, Chief Financial Officer and Treasurer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 02, 2016
Document And Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Trading Symbol	ARCX
Entity Registrant Name	Arc Logistics Partners LP
Entity Central Index Key	0001583744
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Common Units [Member]
Document And Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		13,181,409
Subordinated Units [Member]
Document And Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		6,081,081

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 6,888	$ 5,870
Trade accounts receivable	9,041	8,633
Due from related parties	1,337	1,532
Inventories	419	318
Other current assets	1,106	1,162
Total current assets	18,791	17,515
Property, plant and equipment, net	391,171	380,671
Investment in unconsolidated affiliate	73,708	74,399
Intangible assets, net	128,501	132,121
Goodwill	39,871	39,871
Other assets	3,779	3,945
Total assets	655,821	648,522
Current liabilities:
Accounts payable	5,057	4,085
Accrued expenses	5,274	6,857
Due to general partner	1,020	638
Other liabilities	3,981	3,914
Total current liabilities	15,332	15,494
Credit facility	240,313	226,063
Other non-current liabilities	21,410	21,745
Total liabilities	$ 277,055	$ 263,302
Commitments and contingencies
Limited partners’ interest
Non-controlling interests	$ 84,210	$ 85,275
Accumulated other comprehensive (loss) income	397	1,293
Total partners’ capital	378,766	385,220
Total liabilities and partners’ capital	655,821	648,522
Common Units [Member]
Limited partners’ interest
Limited partners' units	210,480	213,281
Subordinated Units [Member]
Limited partners’ interest
Limited partners' units	$ 83,679	$ 85,371

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - shares	Mar. 31, 2016	Dec. 31, 2015
Common Units [Member]
Limited partners' units issued	13,181,409	13,174,410
Limited partners' units outstanding	13,181,409	13,174,410
Subordinated Units [Member]
Limited partners' units issued	6,081,081	6,081,081
Limited partners' units outstanding	6,081,081	6,081,081

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues:
Third-party customers	$ 22,584	$ 11,379
Related parties	3,483	2,178
Revenues	26,067	13,557
Expenses:
Operating expenses	8,687	6,280
Selling, general and administrative	3,924	4,298
Selling, general and administrative – affiliate	1,322	1,076
Depreciation	3,652	1,844
Amortization	3,697	1,246
Total expenses	21,282	14,744
Operating (loss) income	4,785	(1,187)
Other income (expense):
Equity earnings from unconsolidated affiliate	2,461	2,489
Other income		5
Interest expense	(2,367)	(951)
Total other income, net	94	1,543
Income before income taxes	4,879	356
Income taxes	28	52
Net income	4,851	304
Net income attributable to non-controlling interests	(1,735)
Net income attributable to partners' capital	3,116	304
Other comprehensive (loss) income	(896)	(471)
Comprehensive (loss) income attributable to partners’ capital	$ 2,220	$ (167)
Common Units [Member]
Earnings (loss) per limited partner unit:
Earnings per limited partner unit, basic and diluted	$ 0.15	$ 0.01
Subordinated Units [Member]
Earnings (loss) per limited partner unit:
Earnings per limited partner unit, basic and diluted	$ 0.15	$ 0.01

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flow from operating activities:
Net income	$ 4,851	$ 304
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	3,652	1,844
Amortization	3,697	1,246
Equity earnings from unconsolidated affiliate, net of distributions	(282)	(714)
Amortization of deferred financing costs	359	96
Unit-based compensation	1,095	1,535
Changes in operating assets and liabilities:
Trade accounts receivable	(219)	(196)
Due from related parties	195	(45)
Inventories	(101)	(64)
Other current assets	56	(447)
Accounts payable	(792)	(321)
Accrued expenses	(1,447)	(314)
Due to general partner	383	2,282
Other liabilities	1,073	197
Net cash provided by operating activities	12,520	5,403
Cash flows from investing activities:
Capital expenditures	(5,715)	(1,334)
Investment in unconsolidated affiliate		(310)
Net cash paid for acquisitions	(8,000)
Net cash used in investing activities	(13,715)	(1,644)
Cash flows from financing activities:
Distributions	(8,473)	(5,309)
Deferred financing costs	(192)	(389)
Proceeds from credit facility	14,250
Payments of earn-out liability	(341)
Distributions paid to non-controlling interests	(2,800)	0
Distribution equivalent rights paid on unissued units	(231)	(215)
Net cash provided by (used in) financing activities	2,213	(5,913)
Net increase (decrease) in cash and cash equivalents	1,018	(2,154)
Cash and cash equivalents, beginning of period	5,870	6,599
Cash and cash equivalents, end of period	6,888	4,445
Supplemental disclosure of cash flow information:
Cash paid for interest	2,138	906
Cash paid for income taxes	27	52
Non-cash investing and financing activities:
Increase (decrease) in purchases of property plant and equipment in accounts payable and accrued expenses	$ 438	$ 209

XML

Condensed Consolidated Statements of Partners' Capital (Unaudited) - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands	Total	Limited Partner Common Interest [Member]	Limited Partner Subordinated Interest [Member]	Non-controlling Interests [Member]	Accumulated Other Comprehensive Income [Member]
Partners' capital, beginning balance at Dec. 31, 2015	$ 385,220	$ 213,281	$ 85,371	$ 85,275	$ 1,293
Net income	4,851	2,132	984	1,735
Other comprehensive income	(896)				(896)
Unit-based compensation	1,095	1,095
Distribution equivalent rights paid on unissued units	(231)	(231)
Distributions	(11,273)	(5,797)	(2,676)	(2,800)
Partners' capital, ending balance at Mar. 31, 2016	$ 378,766	$ 210,480	$ 83,679	$ 84,210	$ 397

XML

Organization and Presentation

3 Months Ended

Mar. 31, 2016

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Presentation

Note 1—Organization and Presentation

Defined Terms

Unless the context clearly indicates otherwise, references in these unaudited condensed consolidated financial statements (“interim statements”) to “Arc Logistics” or the “Partnership” refer to Arc Logistics Partners LP and its subsidiaries. Unless the context clearly indicates otherwise, references to our “General Partner” refer to Arc Logistics GP LLC, the general partner of Arc Logistics. References to “Sponsor” or “Lightfoot” refer to Lightfoot Capital Partners, LP and its general partner, Lightfoot Capital Partners GP LLC. References to “GCAC” refer to Gulf Coast Asphalt Company, L.L.C., which contributed its preferred units in Arc Terminals LP, predecessor to Arc Logistics (“Arc Terminals”), to the Partnership upon the consummation of the Partnership’s initial public offering in November 2013 (“IPO”). References to “Center Oil” refer to GP&W, Inc., d.b.a. Center Oil, and affiliates, including Center Terminal Company-Cleveland, which contributed its limited partner interests in Arc Terminals to the Partnership upon the consummation of the IPO. References to “Gulf LNG Holdings” refer to Gulf LNG Holdings Group, LLC and its subsidiaries, which own a liquefied natural gas regasification and storage facility in Pascagoula, MS, which is referred to herein as the “LNG Facility.” The Partnership owns a 10.3% limited liability company interest in Gulf LNG Holdings, which is referred to herein as the “LNG Interest.”

Organization and Description of Business

The Partnership is a fee-based, growth-oriented Delaware limited partnership formed by Lightfoot in 2007 to own, operate, develop and acquire a diversified portfolio of complementary energy logistics assets. The Partnership is principally engaged in the terminalling, storage, throughput and transloading of crude oil and petroleum products. The Partnership is focused on growing its business through the optimization, organic development and acquisition of terminalling, storage, rail, pipeline and other energy logistics assets that generate stable cash flows.

In November 2013, the Partnership completed its IPO by selling 6,786,869 common units (which includes 786,869 common units issued pursuant to the exercise of the underwriters’ over-allotment option) representing limited partner interests in the Partnership at a price to the public of $19.00 per common unit. In connection with the IPO, the Partnership amended and restated its $40.0 million revolving credit facility.

Our energy logistics assets are strategically located in the East Coast, Gulf Coast, Midwest, Rocky Mountains and West Coast regions of the United States and supply a diverse group of third-party customers, including major oil companies, independent refiners, crude oil and petroleum product marketers, distributors and various industrial manufacturers. Depending upon the location, our facilities possess pipeline, rail, marine and truck loading and unloading capabilities allowing customers to receive and deliver product throughout North America. Our asset platform allows customers to meet the specialized handling requirements that may be required by particular products. Our combination of diverse geographic locations and logistics platforms gives us the flexibility to meet the evolving demands of existing customers and address those of prospective customers.

As of March 31, 2016, our assets consisted of:

— 21 terminals in twelve states located in the East Coast, Gulf Coast, Midwest, Rocky Mountains and West Coast regions of the United States with approximately 7.7 million barrels of crude oil and petroleum product storage capacity;

— four rail transloading facilities with approximately 126,000 bpd of throughput capacity; and

— the LNG Interest in connection with the LNG Facility, which has 320,000 M³ of LNG storage, 1.5 bcf/d natural gas sendout capacity and interconnects to major natural gas pipeline networks

The Partnership interests included the following as of March 31, 2016:

— 13,181,409 common units representing limited partner interests (of which 68,617 common units are held by Lightfoot);

— 6,081,081 subordinated units representing limited partner interests (of which 5,146,264 subordinated units are held by Lightfoot);

— a non-economic general partner interest (which is held by our general partner, which is owned by Lightfoot); and

— incentive distribution rights (which are held by our general partner, which is owned by Lightfoot).

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2—Summary of Significant Accounting Policies

The Partnership has provided a discussion of significant accounting policies in its Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Partnership 10-K”). Certain items from that discussion are repeated or updated below as necessary to assist in the understanding of these interim statements.

Basis of Presentation

The accompanying interim statements of the Partnership have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments and disclosures necessary for a fair statement of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year or for any other period. These interim statements should be read in conjunction with the Partnership’s consolidated financial statements for the year ended December 31, 2015, which are included in the 2015 Partnership 10-K, as filed with the SEC. The year-end balance sheet data was derived from the audited financial statements, but does not include all disclosures required by GAAP.  

Use of Estimates

The preparation of 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 at the date of the financial statements. The most significant estimates relate to the valuation of acquired businesses, goodwill and intangible assets, assessment for impairment of long-lived assets and the useful lives of intangible assets and property, plant and equipment. Actual results could differ from those estimates.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and are no longer depreciated.

No impairment charges were recorded during the three months ended March 31, 2016 and 2015.

Goodwill

Goodwill represents the excess of consideration paid over the fair value of net assets acquired in a business combination. Goodwill is not amortized but instead is assessed for impairment at least annually or when facts and circumstances warrant. Goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed. The second step compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The Partnership determines the fair value of its single reporting unit by blending two valuation approaches: the income approach and a market value approach. The inputs included assumptions related to the future performance of the Partnership and assumptions related to discount rates, long-term growth rates and control premiums.  Based on the results of the first step of the quantitative impairment assessment of its goodwill as of December 31, 2015, the fair value of the Partnership’s reporting unit exceeded its carrying value by approximately 9% and management concluded that no impairment was necessary.  In the event that market conditions were to remain weak for an extended period of time, the Partnership may be required to record an impairment of goodwill in the future, and such impairment could be material.

A summary of the changes in the carrying amount of goodwill is as follows (in thousands):

	As of
	March 31,		December 31,
	2016		2015
Beginning Balance	$	39,871	$	15,162
Goodwill acquired		-		24,709
Ending Balance	$	39,871	$	39,871

Refer to “Note 3—Acquisitions – JBBR Acquisition” for discussion on the goodwill recorded in the second quarter of 2015 in connection with the JBBR Acquisition (as defined in “Note 2—Summary of Significant Accounting Policies—Fair Value of Financial Instruments” below).  

Deferred Rent

The Portland Lease Agreement (as defined in “Note 11—Related Party Transactions—Other Transactions with Related Persons—Operating Lease Agreement”below) contains certain rent escalation clauses, contingent rent provisions and lease termination payments. The Partnership recognizes rent expense for operating leases on a straight-line basis over the term of the lease, taking into consideration the items noted above. Contingent rental payments are generally recognized as rent expense as incurred. The deferred rent resulting from the recognition of rent expense on a straight-line basis related to the Portland Lease Agreement is included within “Other non-current liabilities” in the accompanying unaudited condensed consolidated balance sheets at March 31, 2016 and December 31, 2015.

Contingencies

In the normal course of business, the Partnership may be subject to loss contingencies, such as legal proceedings and claims arising out of its business that cover a wide range of matters. An accrual for a loss contingency is recognized when it is probable that an asset had been impaired or a liability had been incurred and the amount of loss can be reasonably estimated.  If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Partnership’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.  If the estimate of a probable loss is a range and no amount within the range is more likely, the Partnership will accrue the minimum amount of the range.  

There are many uncertainties associated with any legal proceeding and these actions or other third-party claims against us may cause us to incur costly litigation and/or substantial settlement charges. As a result, our business, financial condition, results of operations and cash flows could be adversely affected. The actual liability in any such matters may be materially different from our estimates, if any.

Revenue Recognition

Revenues from leased tank storage and delivery services are recognized as the services are performed, evidence of a contractual arrangement exists and collectability is reasonably assured. Revenues also include the sale of excess products and additives which are mixed with customer-owned liquid products. Revenues for the sale of excess products and additives are recognized when title and risk of loss pass to the customer.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a specified measurement date. Fair value measurements are derived using inputs and assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. GAAP establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This three-tier hierarchy classifies fair value amounts recognized or disclosed in the condensed consolidated financial statements based on the observability of inputs used to estimate such fair values. The classification within the hierarchy of a financial asset or liability is determined based on the lowest level input that is significant to the fair value measurement. The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3). At each balance sheet reporting date, the Partnership categorizes its financial assets and liabilities using this hierarchy.

The amounts reported in the balance sheet for cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value because of the short-term maturities of these instruments (Level 1). Because the Credit Facility (as defined in “Note 7 – Debt – Credit Facility” below) has a market rate of interest, its carrying amount approximated fair value (Level 2).  

In connection with the Partnership’s acquisition, through a joint venture company formed with an affiliate of GE Energy Financial Services (“GE EFS”), of all of the memberships interests of Joliet Bulk, Barge & Rail LLC (“JBBR”) from CenterPoint Properties Trust (“CenterPoint”) for $216.0 million ( the “JBBR Acquisition”), Arc Terminals Joliet Holdings LLC (“Joliet Holdings”) has an earn-out obligation to CenterPoint which was valued at the time of the JBBR Acquisition at approximately $19.7 million.  Refer to “Note 3—Acquisitions – JBBR Acquisition” for further discussion on the JBBR Acquisition. Joliet Holdings’ earn-out obligations to CenterPoint will terminate upon the payment, in the aggregate, of $27.0 million.  The balance of the earn-out liability is included within “Other non-current liabilities” in the accompanying consolidated balance sheets at March 31, 2016 and December 31, 2015.  Since the fair value of the contingent consideration obligation is based primarily upon unobservable inputs, it is classified as Level 3 in the fair value hierarchy.  The contingent consideration obligation will be revalued at each reporting period and changes to the fair value will be recorded as a component of operating income.  Increases or decreases in the fair value of the contingent consideration obligations can result from changes in the assumed timing of revenue and expense estimates.  Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent reporting period.  Accordingly, future business and economic conditions can materially impact the amount of contingent consideration expense we record in any given period.  No revaluation adjustments were necessary during the three months ended March 31, 2016.  For the three months ended March 31, 2016 and 2015, Joliet Holdings has paid $0.3 million and $0 million, respectively, related to the earn-out obligation.  Since the JBBR Acquisition through March 31, 2016, Joliet Holdings has paid $1.2 million of the earn-out to CenterPoint. The following is a reconciliation of the beginning and ending amounts of the contingent consideration obligation related to the JBBR Acquisition (in thousands):

	Balance at				Earn-out			Balance at
	December 31		Revaluation		payments			March 31,
	2015		Adjustments		paid			2016
Liabilities at fair value:
JBBR contingent consideration	$	18,830	$	-	$	(341	)	$	18,489
Total liabilities at fair value	$	18,830	$	-	$	(341	)	$	18,489

The Partnership believes that its valuation methods are appropriate and consistent with the values that would be determined by other market participants. However, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Unit-Based Compensation

The Partnership recognizes all unit-based compensation to directors, officers, employees and other service providers in the consolidated financial statements based on the fair value of the awards.  Fair value for unit-based awards classified as equity awards is determined on the grant date of the award, and this value is recognized as compensation expense ratably over the requisite service or performance period of the equity award. Fair value for equity awards is calculated at the closing price of the common units on the grant date.  Fair value for unit-based awards classified as liability awards is calculated at the closing price of the common units on the grant date and is remeasured at each reporting period until the award is settled.  Compensation expense related to unit-based awards is included in the “Selling, general and administrative” line item in the accompanying unaudited condensed consolidated statements of operations and comprehensive income.

For awards with performance conditions, the expense is accrued over the service period only if the performance condition is considered to be probable of occurring. When awards with performance conditions that were previously considered improbable become probable, the Partnership incurs additional expense in the period that the probability assessment changes (see “Note 9—Equity Plans”).

Net Income Per Unit

The Partnership uses the two-class method in the computation of earnings per unit since there is more than one participating class of securities. Earnings per common and subordinated unit are determined by dividing net income allocated to the common units and subordinated units, respectively, after deducting the amount allocated to the phantom units, if any, by the weighted average number of outstanding common and subordinated units, respectively, during the period. The overall computation, presentation and disclosure of the Partnership’s limited partners’ net income per unit are made in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260 “Earnings per Share.”

Segment Reporting

The Partnership derives revenue from operating its terminal and transloading facilities.  These facilities have been aggregated into one reportable segment because the facilities have similar long-term economic characteristics, products and types of customers.

Noncontrolling Interests

The Partnership applies the provisions of ASC 810 Consolidations, which were amended on January 1, 2009 by ASC 810-10-65 and ASC 810-10-45 (“ASC 810”).  As required by ASC 810, our non-controlling ownership interests in consolidated subsidiaries are presented in the consolidated balance sheet within capital as a separate component from partners’ capital.  In addition, consolidated net income includes earnings attributable to both the partners and the non-controlling interests.  For the three months ended March 31, 2016 and 2015, $2.8 million and $0 million, respectively, of distributions have been made to non-controlling interest holders of consolidated subsidiaries.  Refer to “Note 3—Acquisitions—JBBR Acquisition” for discussion of the JBBR Acquisition which gave rise to the non-controlling interests.  

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue recognition. The update requires that an entity recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update also requires new qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, information about contract balances and performance obligations, and assets recognized from costs incurred to obtain or fulfill a contract. The Partnership is currently evaluating the potential impact of this authoritative guidance on its financial condition, results of operations, cash flows and related disclosures.  In April 2015, the FASB proposed a one-year deferral of the effective date, and therefore, this guidance will be effective for the Partnership beginning in the first quarter of 2018, with early adoption optional but not before the original effective date of December 15, 2016.

In August 2015, the FASB issued new guidance which adds comments from the SEC related to the presentation of debt issuance costs related to line-of-credit arrangements. The SEC commented it would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Partnership adopted this requirement in the first quarter of 2016 and it had no impact on its financial condition, results of operations, cash flows and related disclosures.

In January 2016, the FASB issued new guidance which requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changesin fair value recognized in net income; requires public business entities to use the exit price notion when measuring fair value of financialinstruments for disclosure purposes; requires separate presentation of financial assets and financial liabilities by measurement category and form offinancial asset (i.e., securities or loans and receivables); and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost. The effective date will be the first quarter of fiscal year 2017. The Partnership does not expect this requirement to have a significant impact on its financial condition, results of operations, cash flows and related disclosures.

In February 2016, the FASB issued new guidance which amends various aspects of existing guidance for leases.   The new guidance requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. The main difference between previous GAAP and the amended standard is the recognition of lease assets and lease liabilities by lessees on the balance sheet for those leases classified as operating leases under previous GAAP. As a result, the Partnership will have to recognize a liability representing its lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. The new guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the effect this standard will have on our consolidated financial position or results of operations.

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Acquisitions

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

Acquisitions

Note 3 – Acquisitions

Acquisitions

The following acquisitions were accounted for under the acquisition method of accounting whereby management utilized the services of third-party valuation consultants, along with estimates and assumptions provided by management, to estimate the fair value of the net assets acquired. The third-party valuation consultants utilized several appraisal methodologies including income, market and cost approaches to estimate the fair value of the identifiable assets acquired.

Gulf Oil Terminals Acquisition

In January 2016, the Partnership, through its wholly owned subsidiary Arc Terminals Holdings LLC (“Arc Terminals Holdings”), acquired four petroleum products terminals (the “Pennsylvania Terminals”) located in Altoona, Mechanicsburg, Pittston and South Williamsport, Pennsylvania from Gulf Oil Limited Partnership (“Gulf Oil”) for $8.0 million (the “Gulf Oil Terminals Acquisition”).  In connection with this acquisition, the Partnership also acquired an option to purchase from Gulf Oil at an agreed upon purchase price additional land with storage tanks located adjacent to one of the Pennsylvania Terminals.  At closing, the Partnership entered into a take-or-pay terminal services agreement with Gulf Oil with an initial term of two years.  The throughput and related services provided by the Partnership to Gulf Oil under the terminal services agreement are provided at the Pennsylvania Terminals, as well as several of the Partnership’s other petroleum products terminals.  The acquisition was financed with a combination of available cash and borrowings under the Credit Facility.  As of the issuance of this quarterly report, the Partnership had not concluded its assessment of the fair values of the net assets acquired as provided in ASC Topic 805, “Business Combinations” (“ASC 805”).

The Gulf Oil Terminals Acquisition was accounted for as a business combination in accordance with ASC 805.  The Gulf Oil Terminals Acquisition purchase price equaled the approximately $8.0 million fair value of the identifiable assets acquired and accordingly, the Partnership did not recognize any goodwill as a part of the Gulf Oil Terminals Acquisition.  Transaction costs incurred by the Partnership in connection with the acquisition, consisting primarily of legal and other professional fees, totaled approximately $0.5 million and were expensed as incurred in accordance with ASC 805.  Management is currently reviewing the valuation of the net assets acquired in connection with the Gulf Oil Terminals Acquisition to determine the final purchase price allocation, which is expected to be completed by the third quarter of 2016.

The total preliminary purchase price of $8.0 million was preliminarily allocated to the net assets acquired as follows (in thousands):

Consideration:
Cash paid to seller	$	8,000
Total consideration	$	8,000
Allocation of purchase price:
Property and equipment	$	8,000
Net assets acquired	$	8,000

Since the Gulf Oil Terminals Acquisition closing date in January 2016 through March 31, 2016, the Pennsylvania Terminals have generated approximately $0.4 million in revenue and less than $0.1 million of operating losses.  

The unaudited pro forma results related to the Gulf Oil Terminals Acquisition have been excluded as the nature of the revenue-producing activities previously associated with the Pennsylvania Terminals has changed substantially post-acquisition from intercompany revenue to third-party generated revenue.  In addition, historical financial information for the Pennsylvania Terminals prior to the acquisition is not indicative of how the Pennsylvania Terminals are being operated since the Partnership’s acquisition and would be of no comparative value in understanding the future operations of the Pennsylvania Terminals.  

JBBR Acquisition

In May 2015, the Partnership and an affiliate of GE EFS, through Joliet Holdings, purchased all of the membership interests in JBBR from CenterPoint for a base cash purchase price of $216.0 million (“JBBR Purchase Price”).  Joliet Holdings is also required to pay to CenterPoint earn-out payments for each barrel of crude oil that is either delivered to or received by the Joliet Terminal (as defined below) (without duplication) or for which JBBR receives payment under minimum volume commitments regardless of actual throughput activity. Joliet Holdings’ earn-out obligations to CenterPoint will terminate upon the payment, in the aggregate, of $27.0 million.  JBBR owns, among other things, a petroleum products terminal and 4-mile crude oil pipeline located in Joliet, Illinois (“Joliet Terminal”).  To finance the Partnership’s portion of the consideration payable by it in connection with the JBBR Acquisition, the Partnership sold 4,520,795 common units at a price of $16.59 per unit in a private placement for proceeds totaling $72.7 million after placement agent commissions and expenses.  In addition, the Partnership borrowed $61.0 million under its Credit Facility to partially finance the balance of the purchase price payable by it at the closing of the JBBR Acquisition.    

Joliet Holdings is consolidated under the voting interest model in the Partnership’s operating results.  The GE EFS ownership interest in Joliet Holdings is presented separately as a non-controlling interest.  

The JBBR Acquisition was accounted for as a business combination in accordance with ASC 805.  In accordance with ASC 805, the Partnership recorded $19.7 million of additional consideration related to Joliet Holdings’s earn-out payments as contingent consideration.   The $19.7 million is recorded on the balance sheet of the Partnership as a liability and will be reduced by future earn-out payments made to CenterPoint. This liability is subject to remeasurement each reporting period until the full amount of the earn-out has been satisfied.   The JBBR Purchase Price exceeded the $211.0 million fair value of the identifiable assets acquired and accordingly, the Partnership recognized goodwill of $24.7 million.  The Partnership believes the primary items that generated goodwill are the expected ability to grow the acquired business by leveraging its existing customer relationships and by attracting new customers based on the strategic location of the Joliet Terminal.  Furthermore, the Partnership expects that the entire amount of its recorded goodwill will be deductible for tax purposes.  Transaction costs incurred by the Partnership in connection with the acquisition, consisting primarily of legal and other professional fees, totaled $1.3 million and were expensed as incurred in accordance with ASC 805 and included in the “Selling, general and administrative” line item in the accompanying consolidated statement of operations and comprehensive income. Management has finalized the valuation of the net assets acquired in connection with the JBBR Acquisition and the final purchase price allocation has been determined.

The following table summarizes the consideration paid and the assets acquired at the JBBR Acquisition closing date (in thousands):

Consideration:
Cash paid to seller	$	216,000
Earn-out liability recognized		19,700
Total consideration	$	235,700
Allocation of purchase price:
Property and equipment	$	156,991
Intangible assets		54,000
Goodwill		24,709
Net assets acquired	$	235,700

The unaudited pro forma results pursuant to ASC 805 related to the JBBR Acquisition have been excluded as the Joliet Terminal was under construction prior to the consummation of the JBBR Acquisition and therefore there were no revenue-producing activities previously associated with the Joliet Terminal. The Joliet Terminal, post-acquisition, is now operating and is generating revenue.  In addition, the historical financial information for the Joliet Terminal prior to the acquisition is not indicative of how the Joliet Terminal is being operated since the JBBR Acquisition and would be of no comparative value in understanding the future operations of the Joliet Terminal.  

Pawnee Terminal Acquisition

In July 2015, the Partnership, through its wholly owned subsidiary Arc Terminals Holdings, acquired all of the limited liability company interests of UET Midstream, LLC (“UET Midstream”) from United Energy Trading, LLC (“UET”) and Hawkeye Midstream, LLC (together with UET, the “Pawnee Sellers”) for total consideration (net of certain adjustments) of $76.6 million (the “Pawnee Purchase Price”), consisting of $44.3 million in cash and $32.3 million in common units of the Partnership (the “Pawnee Terminal Acquisition”). UET Midstream’s principal assets consist of a newly constructed, substantially completed crude oil terminal and a nearby development property in northeastern Weld County, Colorado (“Pawnee Terminal”).  The number of common units issued to the Pawnee Sellers at the closing of the Pawnee Terminal Acquisition was based upon an issuance price of $18.50 per unit, which resulted in the issuance of 1,745,669 of the Partnership’s common units (“Pawnee Transaction Units”).  The fair value of the Pawnee Transaction Units on the closing date was $17.30 per unit (based upon the closing price of the Partnership’s common unit price on the closing date), which resulted in a further reduction of the Pawnee Purchase Price, recognized for accounting purposes, of $2.1 million. In connection with the issuance of the common units to the Pawnee Sellers, the Partnership entered into an agreement with the Pawnee Sellers granting the Pawnee Sellers certain registration rights.  Arc Terminals is responsible for completing the remaining construction of the Pawnee Terminal and the costs thereof are estimated to be approximately $11.0 million.  The Partnership recorded $4.5 million of liabilities related to the construction costs that had been completed, but not paid, as of the closing date.  The $4.5 million is recorded on the balance sheet as a current liability and will be reduced by any payments made to satisfy the identified construction costs.  As of March 31, 2016, the Partnership had $2.0 million remaining on the balance sheet as a current liability related to the construction liability acquired.  The Partnership expects construction of the Pawnee Terminal to be completed in 2016.

The Pawnee Terminal Acquisition was accounted for as a business combination in accordance with ASC Topic 805, “Business Combinations” (“ASC 805”).  The Pawnee Terminal Acquisition purchase price equaled the $74.5 million fair value of the identifiable assets acquired and accordingly, the Partnership did not recognize any goodwill as a part of the Pawnee Terminal Acquisition.  Transaction costs incurred by the Partnership in connection with the acquisition, consisting primarily of legal and other professional fees, totaled $1.8 million and were expensed as incurred in accordance with ASC 805.  Management has finalized the valuation of the net assets acquired in connection with the Pawnee Terminal Acquisition and the final purchase price allocation has been determined.  

The following table summarizes the consideration paid and the assets acquired at the Pawnee Terminal Acquisition closing date (in thousands):

Consideration:
Cash paid to seller	$	44,332
Fair value of equity issued to seller		30,200
Total consideration	$	74,532
Allocation of purchase price:
Property and equipment	$	23,613
Intangible assets		55,442
Less: liabilities assumed		(4,523	)
Net assets acquired	$	74,532

The unaudited pro forma operating results pursuant to ASC 805 related to the Pawnee Terminal Acquisition have been excluded due to immateriality.  

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Investment in Unconsolidated Affiliate

3 Months Ended

Mar. 31, 2016

Equity Method Investments And Joint Ventures [Abstract]

Investment in Unconsolidated Affiliate

Note 4—Investment in Unconsolidated Affiliate

The Partnership accounts for investments in limited liability companies under the equity method of accounting unless the Partnership’s interest is deemed to be so minor that it may have virtually no influence over operating and financial policies. “Investment in unconsolidated affiliate” consisted of the LNG Interest, and its balances as of March 31, 2016 and December 31, 2015 are represented below (in thousands):

Balance at December 31, 2015	$	74,399
Equity earnings		2,461
Contributions		-
Distributions		(2,179	)
Amortization of premium		(77	)
Other comprehensive income		(896	)
Balance at March 31, 2016	$	73,708

Investment in Gulf LNG Holdings

In November 2013, the Partnership purchased the LNG Interest from an affiliate of GE EFS for $72.7 million. The carrying value of the LNG Interest on the date of acquisition was $64.1 million and therefore the excess amount paid, by the Partnership, over the carrying value was $8.6 million. This excess can be attributed to the underlying long lived assets of Gulf LNG Holdings and is therefore being amortized using the straight line method over the remaining useful lives of the respective assets, which is 28 years. The estimated aggregate amortization of this premium for its remaining useful life from March 31, 2016 is as follows (in thousands):

	Total
2016	$	232
2017		309
2018		309
2019		309
2020		309
Thereafter		6,444
	$	7,912

Summarized financial information for Gulf LNG Holdings is reported below (in thousands):

	March 31,		December 31,
	2016		2015
Balance sheets
Current assets	$	5,554	$	7,523
Noncurrent assets		881,255		889,655
Total assets	$	886,809	$	897,178
Current liabilities	$	75,735	$	79,970
Long-term liabilities		675,233		678,926
Member’s equity		135,841		138,282
Total liabilities and member’s equity	$	886,809	$	897,178

	Three Months Ended
	March 31,
	2016		2015
Income statements
Revenues	$	46,484	$	46,624
Total operating costs and expenses		13,855		14,206
Operating income		32,629		32,418
Net income	$	23,845	$	24,165

LNG Facility Arbitration

On March 1, 2016, an affiliate of Gulf LNG Holdings received a Notice of Disagreement and Disputed Statements and a Notice of Arbitration from Eni USA Gas Marketing L.L.C. (“Eni USA”), one of the two companies that had entered into a terminal use agreement for capacity of the LNG Facility.  Eni USA is an indirect subsidiary of Eni S.p.A., a multi-national integrated energy company headquartered in Milan, Italy.  Pursuant to the Notice of Arbitration, Eni USA seeks declaratory and monetary relief in respect of its terminal use agreement, asserting that (i) the terminal use agreement should be terminated because changes in the U.S. natural gas market since the execution of the agreement in December 2007 have “frustrated the essential purpose” of the agreement and (ii) the activities undertaken by affiliates of Gulf LNG Holdings “in connection with a plan to convert the LNG Facility into a liquefaction/export facility have given rise to a contractual right on the part of Eni USA to terminate” the terminal use agreement. 

Affiliates of Kinder Morgan, Inc., which control Gulf LNG Holdings and operate the LNG Facility, have expressed to us that they view the assertions by Eni USA to be without merit, and that they intend to vigorously contest the assertions set forth by Eni USA.  Although we do not control Gulf LNG Holdings, we also are of the view that the assertions made by Eni USA are without merit. As contemplated by the terminal use agreement, disputes are meant to be resolved by final and binding arbitration, and no date has been set for such arbitration. Eni USA has advised Gulf LNG Holdings’ affiliates that it shall continue to pay the amounts claimed to be due under the terminal use agreement pending resolution of the dispute.  

If the assertions by Eni USA are ultimately successful, our business, financial conditions and results of operations and our ability to make cash distributions to our unitholders would be materially adversely affected.  For the three months ended March 31, 2016, 18% and 24% of our Adjusted EBITDA and Distributable Cash Flow, respectively, were associated with our LNG Interest.  For the three months ended March 31, 2015, 34% and 33% of our Adjusted EBITDA and Distributable Cash Flow, respectively, were associated with our LNG Interest.  We are unable at this time to predict the amount of the legal fees in this matter that will be allocable to our LNG Interest.

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Property, Plant and Equipment

3 Months Ended

Mar. 31, 2016

Property Plant And Equipment [Abstract]

Property, Plant and Equipment

Note 5—Property, Plant and Equipment

The Partnership’s property, plant and equipment consisted of (in thousands):

	As of
	March 31,			December 31,
	2016			2015
Land	$	78,455		$	74,855
Buildings and site improvements		78,483			77,514
Tanks and trim		114,523			111,076
Pipelines		20,364			20,364
Machinery and equipment		119,098			118,503
Office furniture and equipment		730			561
Construction in progress		17,678			12,306
		429,331			415,179
Less:  Accumulated depreciation		(38,160	)		(34,508	)
Property, plant and equipment, net	$	391,171		$	380,671

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Intangible Assets

3 Months Ended

Mar. 31, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets

Note 6—Intangible Assets

The Partnership’s intangible assets consisted of (in thousands):

	Estimated	As of
	Useful Lives	March 31,			December 31,
	in Years	2016			2015
Customer relationships	21	$	4,785		$	4,785
Acquired contracts	2-12		149,342			149,342
Non-compete agreements	2-3		741			741
			154,868			154,868
Less:  Accumulated amortization			(26,367	)		(22,747	)
Intangible assets, net		$	128,501		$	132,121

The Partnership’s intangible assets are amortized on a straight-line basis over the expected life of each intangible asset. The estimated future amortization expense is approximately $10.8 million for the remainder of 2016, $14.0 million in 2017, $12.8 million in 2018, $12.2 million in 2019, $12.2 million in 2020 and $66.5 million thereafter.

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Debt

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Debt

Note 7—Debt

Credit Facility

In November 2013, concurrent with the closing of the IPO, the Partnership entered into the Second Amended and Restated Revolving Credit Agreement (the “Credit Facility”) with a syndicate of lenders, under which Arc Terminals Holdings is the borrower. After several amendments, the Credit Facility currently has up to $300.0 million of borrowing capacity. As of March 31, 2016, the Partnership had borrowings of $240.3 million under the Credit Facility at an interest rate of 3.44%. During the first and second quarters of 2015, the Partnership had a $10 million letter of credit outstanding under its letter of credit sub-facility, which was issued in connection with the JBBR Acquisition. This letter of credit was extinguished when the JBBR Acquisition closed in May 2015.  Based on the restrictions under the total leverage ratio covenant, as of March 31, 2016, the Partnership had $33.8 million of available capacity under the Credit Facility.

The Credit Facility is available to fund working capital and to finance capital expenditures and other permitted payments and for other lawful corporate purposes and allows the Partnership to request that the maximum amount of the Credit Facility be increased by up to an aggregate principal amount of $100.0 million, subject to receiving increased commitments from lenders or commitments from other financial institutions. The Credit Facility is available for revolving loans, including a sublimit of $5.0 million for swing line loans and a sublimit of $20.0 million for letters of credit. The Partnership’s obligations under the Credit Facility are secured by a first priority lien on substantially all of the Partnership’s material assets (other than the LNG Interest and the assets owned by JBBR and its subsidiaries). The Partnership and each of the Partnership’s existing restricted subsidiaries (other than the borrower) guarantee, and each of the Partnership’s future restricted subsidiaries will also guarantee, the Credit Facility. The Credit Facility matures in November 2018.

Loans under the Credit Facility bear interest at a floating rate, based upon the Partnership’s total leverage ratio, equal to, at the Partnership’s option, either (a) a base rate plus a range from 100 to 200 basis points per annum or (b) a LIBOR rate, plus a range of 200 to 300 basis points. The base rate is established as the highest of (i) the rate which SunTrust Bank announces, from time to time, as its prime lending rate, (ii) the daily one-month LIBOR plus 100 basis points per annum and (iii) the federal funds rate plus 50 basis points per annum. The unused portion of the Credit Facility is subject to a commitment fee calculated based upon the Partnership’s total leverage ratio ranging from 0.375% to 0.50% per annum. Upon any event of default, the interest rate will, upon the request of the lenders holding a majority of the commitments, be increased by 2.0% on overdue amounts per annum for the period during which the event of default exists.

The Credit Facility contains certain customary representations and warranties, affirmative covenants, negative covenants and events of default. As of March 31, 2016, the Partnership was in compliance with such covenants. The negative covenants include restrictions on the Partnership’s ability to incur additional indebtedness, acquire and sell assets, create liens, enter into certain lease agreements, make investments and make distributions.

The Credit Facility requires the Partnership to maintain a total leverage ratio of not more than 4.50 to 1.00, which may increase to up to 5.00 to 1.00 during specified periods following a material permitted acquisition or issuance of over $200.0 million of senior notes, and a minimum interest coverage ratio of not less than 2.50 to 1.00. If the Partnership issues over $200.0 million of senior notes, the Partnership will be subject to an additional financial covenant pursuant to which the Partnership’s secured leverage ratio must not be more than 3.50 to 1.00. The Credit Facility places certain restrictions on the issuance of senior notes.

If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the Credit Facility, termination of the commitments under the Credit Facility and all remedial actions available to a secured creditor. The events of default include customary events for a financing agreement of this type, including, without limitation, payment defaults, material inaccuracies of representations and warranties, defaults in the performance of affirmative or negative covenants (including financial covenants), bankruptcy or related defaults, defaults relating to judgments, nonpayment of other material indebtedness and the occurrence of a change in control. In connection with the Credit Facility, the Partnership and the Partnership’s subsidiaries have entered into certain customary ancillary agreements and arrangements, which, among other things, provide that the indebtedness, obligations and liabilities arising under or in connection with the Credit Facility are unconditionally guaranteed by the Partnership and each of the Partnership’s existing restricted subsidiaries (other than the borrower) and each of the Partnership’s future restricted subsidiaries.

First Amendment

In January 2014, Arc Terminals Holdings, together with the Partnership and certain of its other subsidiaries, as guarantors, entered into the First amendment to the Credit Facility (the “First Amendment”). The First Amendment principally modified certain provisions of the Credit Facility to allow Arc Terminals Holdings to enter into the Portland Lease Agreement relating to the use of petroleum products terminals and pipeline infrastructure located in Portland, Oregon (the “Portland Terminal”).

Second Amendment

In May 2015, Arc Terminals Holdings, together with the Partnership and certain of its other subsidiaries, as guarantors, entered into the Second Amendment to the Credit Facility (the “Second Amendment”) as part of its financing for the JBBR Acquisition.  Upon the consummation of the JBBR Acquisition in May 2015, the aggregate commitments under the Credit Facility increased from $175 million to $275 million.  In addition, the sublimit for letters of credit was increased from $10 million to $20 million.  

Third Amendment

In July 2015 and in connection with the Pawnee Terminal Acquisition, Arc Terminals Holdings, together with the Partnership and certain of its other subsidiaries, as guarantors, entered into the third amendment to the Credit Facility (the “Third Amendment”).  The Third Amendment principally modifies certain provisions of the Credit Facility (i) to permit the consummation of the Pawnee Terminal Acquisition and (ii) to increase the aggregate commitments under the Credit Facility from $275 million to $300 million.

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Partners' Capital and Distributions

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Partners' Capital and Distributions

Note 8—Partners’ Capital and Distributions

Cash Distributions

The table below summarizes the quarterly distributions related to the Partnership’s quarterly financial results (in thousands, except per unit data):

	Total Quarterly		Total Cash		Date of	Unitholders
Quarter Ended	Distribution Per Unit		Distribution		Distribution	Record Date
March 31, 2016	$	0.4400	$	8,475	May 13, 2016	May 9, 2016
December 31, 2015	$	0.4400	$	8,472	February 12, 2016	February 8, 2016
September 30, 2015	$	0.4400	$	8,472	November 13, 2015	November 9, 2015
June 30, 2015	$	0.4250	$	8,181	August 14, 2015	August 10, 2015
March 31, 2015	$	0.4100	$	5,309	May 15, 2015	May 11, 2015

Cash Distribution Policy

The Partnership’s partnership agreement (the “Partnership Agreement”) provides that the General Partner will make a determination no less frequently than each quarter as to whether to make a distribution, but the Partnership Agreement does not require the Partnership to pay distributions at any time or in any amount. Instead, the board of directors of the General Partner (the “Board”) has adopted a cash distribution policy that sets forth the General Partner’s intention with respect to the distributions to be made to unitholders. Pursuant to the cash distribution policy, within 60 days after the end of each quarter, the Partnership expects to distribute to the holders of common and subordinated units on a quarterly basis at least the minimum quarterly distribution of $0.3875 per unit, or $1.55 per unit on an annualized basis, to the extent the Partnership has sufficient cash after establishment of cash reserves and payment of fees and expenses, including payments to the General Partner and its affiliates.

The Board may change the foregoing distribution policy at any time and from time to time, and even if the cash distribution policy is not modified or revoked, the amount of distributions paid under the policy and the decision to make any distribution is determined solely by the General Partner. As a result, there is no guarantee that the Partnership will pay the minimum quarterly distribution, or any distribution, on the units in any quarter. However, the partnership agreement contains provisions intended to motivate the General Partner to make steady, increasing and sustainable distributions over time.

The Partnership Agreement generally provides that the Partnership will distribute cash each quarter in the following manner:

— first, to the holders of common units, until each common unit has received the minimum quarterly distribution of $0.3875 plus any arrearages from prior quarters;

— second, to the holders of subordinated units, until each subordinated unit has received the minimum quarterly distribution of $0.3875; and

— third, to all unitholders pro rata, until each has received a distribution of $0.4456.

If cash distributions to the Partnership’s unitholders exceed $0.4456 per unit in any quarter, the Partnership’s unitholders and the General Partner, as the initial holder of the incentive distribution rights, will receive distributions according to the following percentage allocations:

Total Quarterly Distribution Per Unit Target Amount	Marginal Percentage Interest in Distributions
	Unitholders			General Partner
above $0.3875 up to $0.4456		100.0	%		0.0	%
above $0.4456 up to $0.4844		85.0	%		15.0	%
above $0.4844 up to $0.5813		75.0	%		25.0	%
above $0.5813		50.0	%		50.0	%

The Partnership refers to additional increasing distributions to the General Partner as “incentive distributions.”

The principal difference between the Partnership’s common units and subordinated units is that in any quarter during the subordination period, holders of the subordinated units are not entitled to receive any distributions from operating surplus until the common units have received the minimum quarterly distribution for such quarter plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. Subordinated units will not accrue arrearages.

The subordination period will end on the first business day after the Partnership has earned and paid at least (1) $1.55 (the minimum quarterly distribution on an annualized basis) on each outstanding common unit and subordinated unit for each of three consecutive, non-overlapping four quarter periods ending on or after September 30, 2016 or (2) $2.325 (150.0% of the annualized minimum quarterly distribution) on each outstanding common unit and subordinated unit and the related distribution on the incentive distribution rights for a four-quarter period ending immediately preceding such date, in each case provided there are no arrearages on the Partnership’s common units at that time.

The subordination period will also end upon the removal of the General Partner other than for cause if no subordinated units or common units held by holder(s) of subordinated units or their affiliates are voted in favor of that removal. When the subordination period ends, all subordinated units will convert into common units on a one-for-one basis, and all common units thereafter will no longer be entitled to arrearages.

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Equity Plans

3 Months Ended

Mar. 31, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments

Note 9—Equity Plans

2013 Long-Term Incentive Plan

The Board approved and adopted the Arc Logistics Long-Term Incentive Plan (the “2013 Plan”) in November 2013.  In July 2014, the Board formed a Compensation Committee (the “Compensation Committee”) to administer the 2013 Plan.  Effective as of March 2015, the Board dissolved the Compensation Committee and, on and after such date, the Board serves as the administrative committee (the “Committee”) under the 2013 Plan.  Employees (including officers), consultants and directors of the General Partner, the Partnership and its affiliates (the “Partnership Entities”) are eligible to receive awards under the 2013 Plan.  The 2013 Plan authorizes up to an aggregate of 2.0 million common units to be available for awards under the 2013 Plan, subject to adjustment as provided in the 2013 Plan.  Awards available for grant under the 2013 Plan include, but are not limited to, restricted units, phantom units, unit options, and unit appreciation rights, but only phantom units have been granted under the 2013 Plan to date. Distribution equivalent rights (“DER”) are also available for grant under the 2013 Plan, either alone or in tandem with other specific awards, which entitle the recipient to receive an amount equal to distributions paid on an outstanding common unit.  Upon the occurrence of a “change of control” or an award recipient’s termination of service due to death or “disability” (each quoted term, as defined in the 2013 Plan), any outstanding unvested award will vest in full.  

In July 2014, the Compensation Committee authorized the grant of an aggregate of 939,500 phantom units pursuant to the 2013 Plan to certain employees, consultants and non-employee directors of the Partnership Entities. Awards of phantom units are settled in common units, except that an award of less than 1,000 phantom units is settled in cash. If a phantom unit award recipient experiences a termination of service with the Partnership Entities other than (i) as a result of death or “disability” or (ii) due to certain circumstances in connection with a “change of control,” the Committee, at its sole discretion, may decide to vest all or any portion of the recipient’s unvested phantom units as of the date of such termination or may allow the unvested phantom units to remain outstanding and vest pursuant to the vesting schedule set forth in the applicable award agreement.

Of the July 2014 awards, a total of 100,000 phantom units were granted to certain non-employee directors of the Board and are classified as equity awards for accounting purposes (the “Director Grants”).  Each Director Grant will be settled in common units and includes a DER. The Director Grants have an aggregate grant date fair value of $2.5 million and vest in equal annual installments over a three-year period starting from the date of grant. For the three months ended March 31, 2016 and 2015, the Partnership recorded approximately $0.2 million and $0.2 million, respectively, of unit-based compensation expense with respect to the Director Grants. As of March 31, 2016, the unrecognized unit-based compensation expense for the Director Grants is approximately $1.1 million, which will be recognized ratably over the remaining term of the awards.  In July 2015, one-third of the phantom units granted under the Director Grants vested.  

Of the July 2014 awards, a total of 832,000 phantom units were granted to employees and certain consultants of the Partnership Entities and are classified as equity awards for accounting purposes (the “Employee Equity Grants”).  Each Employee Equity Grant will be settled in common units and includes a DER.  The Employee Equity Grants have an aggregate grant date fair value of $21.2 million and vest as follows: (i) 25% of the Employee Equity Grants will vest the day after the end of the Subordination Period (as defined in the Partnership Agreement); and (ii) the three remaining 25% installments of the Employee Equity Grants will vest based on the date on which the Partnership has paid, for three consecutive quarters, distributions to its common and subordinated unitholders at or above a stated level, with (A) 25% of the award vesting after distributions are paid at or above $0.4457 per unit for the required period, (B) 25% of the award vesting after distributions are paid at or above $0.4845 per unit for the required period, and (C) the last 25% of the award vesting after distributions are paid at or above $0.5814 per unit for the required period.  To the extent not previously vested, the Employee Equity Grants expire on the fifth anniversary of the date of grant, provided that the expiration date can be extended to the eighth anniversary of the date of grant or longer upon the satisfaction of certain conditions specified in the award agreement.  For the three months ended March 31, 2016 and 2015, the Partnership recorded approximately $0.8 million and $1.3 million, respectively, of unit-based compensation expense with respect to the Employee Equity Grants. As of March 31, 2016, the unrecognized unit-based compensation expense for the Employee Equity Grants was approximately $13.0 million, which may be recognized variably over the remaining term of the awards based on the probability of the achievement of the performance vesting requirements.  

Of the July 2014 awards, a total of 7,500 phantom units were granted to certain employees of the Partnership Entities and are classified as liability awards for accounting purposes (the “Employee Liability Grants”).  Each Employee Liability Grant will be settled in cash (as such award consists of less than 1,000 phantom units) and includes a DER. The Employee Liability Grants have an aggregate grant date fair value of $0.2 million and have the same term and vesting requirements as the Employee Equity Grants described in the preceding paragraph.  For the three months ended March 31, 2016 and 2015, the Partnership recorded less than $0.1 million of unit-based compensation expense during each period, with respect to the Employee Liability Grants.  As of March 31, 2016, the unrecognized unit based compensation expense for the Employee Liability Grants was approximately $0.1 million, which may be recognized variably over the remaining term of the awards based on the probability of the achievement of the performance vesting requirements and is subject to remeasurement each reporting period until the awards settle.

In March 2015, the Board authorized the grant of an aggregate of 45,668 phantom units pursuant to the 2013 Plan to certain employees, consultants and non-employee directors of the Partnership Entities (“2015 Equity Grants”).  Each 2015 Equity Grant will be settled in common units and includes a DER.  The 2015 Equity Grants are classified as equity awards for accounting purposes and have an aggregate grant date fair value of $0.9 million and vest in equal annual installments over a three-year period starting from the date of grant.  For the three months ended March 31, 2016 and 2015, the Partnership recorded less than $0.1 million of unit-based compensation expense during each period, with respect to the 2015 Equity Grants.  As of March 31, 2016, the unrecognized unit-based compensation expense for the 2015 Equity Grants is approximately $0.5 million, which will be recognized ratably over the remaining term of the awards.    In March 2016, one-third of the phantom units granted under the 2015 Equity Grants vested.  

During the year ended December 31, 2015, the Board and Chief Executive Officer authorized the grant of an aggregate of 57,100 phantom units pursuant to the 2013 Plan to certain employees of the Partnership Entities (“2015 Performance Grants”).  Each 2015 Performance Grant will be settled in common units and includes a DER.  The 2015 Performance Grants are classified as equity awards for accounting purposes and have an aggregate grant date fair value of $1.0 million and have the same term and vesting requirements as the Employee Equity Grants described above.  For the three months ended March 31, 2016 and 2015, the Partnership recorded less than $0.1 million of unit-based compensation expense during each period, with respect to the 2015 Performance Grants.  As of March 31, 2016, the unrecognized unit-based compensation expense for the 2015 Performance Grants is approximately $0.8 million, which may be recognized variably over the remaining term of the awards based on the probability of the achievement of the performance vesting requirements.

During the three months ended March 31, 2016, the Board authorized the grant of an aggregate of 80,500 phantom units pursuant to the 2013 Plan to certain employees and consultants of the Partnership Entities (“2016 Equity Grants”).  Each 2016 Equity Grant will be settled in common units and includes a DER.  The 2016 Equity Grants are classified as equity awards for accounting purposes and have an aggregate grant date fair value of $0.9 million and vest in equal annual installments over a three-year period starting from the date of grant.  For the three months ended March 31, 2016, the Partnership recorded less than $0.1 million of unit-based compensation expense with respect to the 2016 Equity Grants.  As of March 31, 2016, the unrecognized unit-based compensation expense for the 2016 Equity Grants is approximately $0.9 million, which will be recognized ratably over the remaining term of the awards.  

Subject to applicable earning criteria, the DER included in each phantom unit award described above entitles the award recipient to a cash payment (or, if applicable, payment of other property) equal to the cash distribution (or, if applicable, distribution of other property) paid on an outstanding common unit to unitholders generally based on the number of common units related to the portion of the award recipient’s phantom units that have not vested and been settled as of the record date for such distribution.  Cash distributions paid during the vesting period on phantom units that are classified as equity awards for accounting purposes are reflected initially as a reduction of partners’ capital.  Cash distributions paid on such equity awards that are not initially expected to vest or ultimately do not vest are classified as compensation expense.  As the probability of vesting changes, these initial categorizations could change.  Cash distributions paid during the vesting period on phantom units that are classified as liability awards for accounting purposes are reflected as compensation expense and included in the “Selling, general and administrative” line item in the accompanying unaudited condensed consolidated statements of operations and comprehensive income. During the three months ended March 31, 2016 and 2015, the Partnership paid approximately $0.4 million, during each period, in DERs to phantom unit holders. For the three months ended March 31, 2016 and 2015, $0.2 million, during each period, was reflected as a reduction of partners’ capital, and the other $0.2 million, during each period, was reflected as compensation expense and included in the “Selling, general and administrative” line item in the accompanying unaudited condensed consolidated statements of operations and comprehensive income.  

The total compensation expense related to the 2013 Plan for the three months ended March 31, 2016 and 2015 was $1.1 million and $1.5 million, respectively, which was included in the “Selling, general and administrative” line item in the accompanying unaudited condensed consolidated statements of operations and comprehensive income. The amount recorded as liabilities in “Other non-current liabilities” in the accompanying unaudited condensed consolidated balance sheet as of March 31, 2016 was less than $0.1 million.

The following table presents phantom units granted pursuant to the 2013 Plan:

	Equity Awards					Liability Awards
	Three Months Ended					Three Months Ended
	March 31, 2016					March 31, 2016
	Number			Weighted Avg.		Number			Weighted Avg.
	of Phantom			Grant Date		of Phantom			Grant Date		Fair Value at
	Units			Fair Value		Units			Fair Value		3/31/2016
Balance at December 31, 2015		985,272		$	24.76		7,200		$	25.46	$	10.23
Granted		80,500		$	11.73		-		$	-	$	-
Vested		(8,551	)	$	19.13		-		$	-	$	-
Forfeited		(6,000	)	$	25.46		(200	)	$	25.46	$	-
Balance at March 31, 2016		1,051,221		$	23.84		7,000		$	25.46	$	10.23

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Earnings Per Unit

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Earnings Per Unit

Note 10—Earnings Per Unit

The Partnership uses the two-class method when calculating the net income per unit applicable to limited partners. The two-class method is based on the weighted-average number of common and subordinated units outstanding during the period. Basic net income per unit applicable to limited partners (including subordinated unitholders) is computed by dividing limited partners’ interest in net income, after deducting distributions, if any, by the weighted-average number of outstanding common and subordinated units. Payments made to the Partnership’s unitholders are determined in relation to actual distributions paid and are not based on the net income allocations used in the calculation of net income per unit.

Diluted net income per unit applicable to limited partners includes the effects of potentially dilutive units on the Partnership’s units. For the three months ended March 31, 2016 and 2015, the only potentially dilutive units outstanding consisted of the phantom units (see “Note 9—Equity Plans”). For the three months ended March 31, 2016 and 2015, none of the phantom units are considered outstanding and therefore there were no potentially dilutive units outstanding.

The following table sets forth the calculation of basic and diluted earnings per limited partner unit for the periods indicated (in thousands, except per unit data):

	Three Months Ended
	March 31,
	2016		2015
Net Income attributable to partners' capital	$	3,116	$	304
Less:
Distribution equivalent rights for unissued units		274		230
Net income available to limited partners	$	2,842	$	74
Numerator for basic and diluted earnings per limited partner unit:
Allocation of net income among limited partner interests:
Net income allocated to common unitholders	$	1,945	$	39
Net income (loss) allocated to subordinated unitholders	$	897	$	35
Net income allocated to limited partners:	$	2,842	$	74
Denominator for basic and diluted earnings per limited partner unit:
Common units - (basic and diluted)		13,176		6,868
Subordinated units - (basic and diluted)		6,081		6,081
Earnings (loss) per limited partner unit:
Common - (basic and diluted)	$	0.15	$	0.01
Subordinated - (basic and diluted)	$	0.15	$	0.01

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Related Party Transactions

3 Months Ended

Mar. 31, 2016

Related Party Transactions [Abstract]

Related Party Transactions

Note 11—Related Party Transactions

Agreements with Affiliates

Payments to the General Partner and its Affiliates

The General Partner conducts, directs and manages all activities of the Partnership. The General Partner is reimbursed on a monthly basis, or such other basis as may be determined, for: (i) all direct and indirect expenses it incurs or payments it makes on behalf of the Partnership and its subsidiaries; and (ii) all other expenses allocable to the Partnership and its subsidiaries or otherwise incurred by the General Partner in connection with operating the Partnership and its subsidiaries’ businesses (including expenses allocated to the General Partner by its affiliates).

For the three months ended March 31, 2016 and 2015, the General Partner incurred expenses of $1.3 million and $1.1 million, respectively.  Such expenses are reimbursable from the Partnership and are reflected in the “Selling, general and administrative – affiliate” line on the accompanying unaudited condensed consolidated statements of operations and comprehensive income. As of March 31, 2016 and December 31, 2015, the Partnership had a payable of approximately $1.1 million and $0.6 million, respectively, to the General Partner, which is reflected as “Due to general partner” in the accompanying unaudited condensed consolidated balance sheets.

Registration Rights Agreement

In connection with the IPO, the Partnership entered into a registration rights agreement with the Sponsor.  Pursuant to the registration rights agreement, the Partnership is required to file, upon request of the Sponsor, a registration statement to register the common units issued to the Sponsor and the common units issuable upon the conversion of the subordinated units held by the Sponsor.  In addition, the registration rights agreement gives the Sponsor piggyback registration rights under certain circumstances.  The registration rights agreement also includes provisions dealing with holdback agreements, indemnification and contribution and allocation of expenses.  These registration rights are transferable to affiliates and, in certain circumstances, to third parties.

Other Transactions with Related Persons

GCAC Guarantee

GCAC guarantees up to $20 million of the Partnership’s Credit Facility. Under certain circumstances, the lenders may release GCAC from such guarantee.

Storage and Throughput Agreements with Center Oil

During 2007, the Partnership acquired seven terminals from Center Oil for $35.0 million in cash and 750,000 subordinated units in the Partnership. In connection with this purchase, the Partnership entered into a storage and throughput agreement with Center Oil whereby the Partnership provides storage and throughput services for various petroleum products to Center Oil at the terminals acquired by the Partnership in return for a fixed per barrel fee for each outbound barrel of Center Oil product shipped or committed to be shipped. The throughput fee is calculated and due monthly based on the terms and conditions as set forth in the storage and throughput agreement. In addition to the monthly throughput fee, Center Oil is required to pay the Partnership a fixed per barrel fee for any additives added into Center Oil’s product.

In December 2015, the Partnership extended the term of the storage and throughput agreement with Center Oil from June 2017 to June 2020.  The agreement will automatically renew for a period of three years at the expiration of the current term at an inflation adjusted rate (subject to a cap), as determined in accordance with the agreement, unless a party delivers a written notice of its election to terminate the storage and throughput agreement at least eighteen months prior to the expiration of the current term.

 In February 2010, the Partnership acquired a 50% undivided interest in the Baltimore, MD terminal. In connection with the acquisition, the Partnership acquired an existing agreement with Center Oil whereby the Partnership provides ethanol storage and throughput services to Center Oil. The Partnership charges Center Oil a fixed fee for storage and a fee based upon ethanol throughput at the Baltimore, MD terminal. The storage and throughput fees are calculated monthly based on the terms and conditions of the storage and throughput agreement.  This agreement was renewed under the one-year evergreen provision and has been extended to May 2017.  

In May 2011, the Partnership entered into an agreement to provide refined products storage and throughput services to Center Oil at the Baltimore, MD terminal. The Partnership charged Center Oil a fixed fee for storage and a fee for ethanol blending and any additives added to Center Oil’s product. The storage and throughput fees were calculated monthly based on the terms and conditions of the storage and throughput agreement.  This agreement was not renewed and expired in May 2015.  

In May 2013, the Partnership entered into an agreement to provide gasoline storage and throughput services to Center Oil at the Brooklyn, NY terminal. The Partnership charges Center Oil a fixed per barrel fee for each inbound delivery of ethanol and every outbound barrel of product shipped and a fee for any ethanol blending and additives added to Center Oil’s product. The storage and throughput fees are calculated monthly based on the terms and conditions of the storage and throughput agreement.  This agreement was renewed under the one-year evergreen provision and has been extended to May 2017.

Storage and Throughput Agreements with GCAC

In February 2013, the Partnership entered into a storage and throughput agreement with GCAC (the “GCAC Agreement 1”) whereby the Partnership provides storage and throughput services for various petroleum products to GCAC in return for a fixed per barrel storage fee plus a fixed per barrel fee for related throughput and other ancillary services. In addition, the Partnership entered into a second storage and throughput agreement with GCAC (the “GCAC Agreement 2”) whereby the Partnership built an additional 150,000 barrels of storage tanks for GCAC to store and throughput various petroleum products in return for similar economic terms of GCAC Agreement 1.

The initial term of GCAC Agreements 1 and 2 is approximately five years. These agreements can be mutually extended by both parties as long as the extension is agreed to 180 days prior to the end of the initial termination date; otherwise the Partnership has the right to lease the storage capacity to any third party.

Throughput Agreements with UET

During July 2015, the Partnership acquired UET Midstream and its Pawnee Terminal from the Pawnee Sellers for $44.3 million in cash and 1,745,669 in unregistered common units in the Partnership.  In connection with such acquisition, the Partnership acquired two terminalling services agreements with UET (each, a “UET Throughput Agreement”).  Each UET Throughput Agreement requires UET Midstream to make available to UET a minimum volume of throughput capacity on a monthly basis at the Pawnee Terminal in exchange for payment by UET of a fixed, per barrel monthly fee for such capacity regardless of whether UET utilizes any or all such throughput capacity, in each case subject to certain exceptions.  The minimum monthly contract throughput capacity increases each year during the initial five-year term under one of the UET Throughput Agreements. The initial term of each UET Throughput Agreement will automatically extend under certain circumstances.  Each UET Throughput Agreement requires UET to deliver crude that meets certain specifications and to pay certain other fees, including fees for the use of excess throughput capacity and certain other ancillary services.  The UET Throughput Agreements contain certain other customary insurance, indemnification, default and termination provisions, including the right of a party to terminate the applicable UET Throughput Agreement following an event of default and the expiration of all applicable cure periods.

The total revenues associated with the storage and throughput agreements for Center Oil, GCAC and UET and reflected in the “Revenues – Related parties” line on the accompanying unaudited condensed consolidated statements of operations and comprehensive income are as follows (in thousands):

	Three Months Ended
	March 31,
	2016		2015
Center Oil	$	1,460	$	1,728
UET (a)		1,575	N/A
GCAC		448		450
Total	$	3,483	$	2,178

(a) UET did not become a related party until the closing of the Pawnee Terminal Acquisition

The total receivables associated with the storage and throughput agreements for Center Oil, GCAC and UET and reflected in the “Due from related parties” line on the accompanying unaudited condensed consolidated balance sheets are as follows (in thousands):

	As of
	March 31,		December 31,
	2016		2015
Center Oil	$	507	$	564
UET (a)		527		528
GCAC		303		440
Total	$	1,337	$	1,532

(a) UET did not become a related party until the closing of the Pawnee Terminal Acquisition

Natural Gas Supply Agreement

In March 2016, the Partnership, through its wholly owned subsidiary, Arc Terminals Holdings, entered into a natural gas supply agreement with UET to supply the Portland Terminal with natural gas. UET charges the Partnership for the actual amount of natural gas supplied on a monthly basis plus a transportation fee. The agreement expires on March 31, 2017, unless mutually extended for an additional year by both UET and the Partnership.

Operating Lease Agreement

In January 2014, the Partnership, through its wholly owned subsidiary, Arc Terminals Holdings, entered into a triple net operating lease agreement relating to the Portland Terminal together with a supplemental co-terminus triple net operating lease agreement for the use of certain pipeline infrastructure at such terminal (such lease agreements, collectively, the “ Portland Lease Agreement”), pursuant to which Arc Terminals Holdings leased the Portland Terminal from a wholly owned subsidiary of CorEnergy Infrastructure Trust, Inc. (“CorEnergy”).  Arc Logistics guaranteed Arc Terminals Holdings’ obligations under the Portland Lease Agreement. CorEnergy owns a 6.6% direct investment in Lightfoot Capital Partners, LP and a 1.5% direct investment in Lightfoot Capital Partners GP LLC, the general partner of Lightfoot Capital Partners, LP.  The Portland Lease Agreement has a 15-year initial term and may be extended for additional five-year terms at the sole discretion of Arc Terminals Holdings, subject to renegotiated rental payment terms.

During the term of the Portland Lease Agreement, Arc Terminals Holdings will make base monthly rental payments and variable rent payments based on the volume of liquid hydrocarbons that flowed through the Portland Terminal in the prior month.  The base rent in the initial years of the Portland Lease Agreement was $230,000 per month through July 2014 (prorated for the partial month of January 2014) and is $417,522 for each month thereafter until the end of year five.  The base rent also increased each month starting with the month of August 2014 by a factor of 0.00958 of the specified construction costs incurred by LCP Oregon Holdings LLC (“LCP Oregon”) at the Portland Terminal.  During 2015, spending on terminal-related projects by CorEnergy since the commencement of the Portland Lease Agreement totaled 10.0 million and, as a result, the base rent has increased by approximately $95,800 per month.  Accordingly, any additional terminal-related projects will be funded by the Partnership.  The base rent will be increased in February 2019 by the change in the consumer price index for the prior five years, and every year thereafter by the greater of two percent or the change in the consumer price index. The base rent is not influenced by the flow of hydrocarbons. Variable rent will result from the flow of hydrocarbons through the Portland Terminal in excess of a designated threshold of 12,500 barrels per day of oil equivalent.  Variable rent is capped at 30% of base rent payments regardless of the level of hydrocarbon throughput.  During the three months ended March 31, 2016 and 2015, the expense associated with the Portland Lease Agreement was $1.6 million, during each period. During the three months ended March 31, 2016 and 2015, there was no variable rent associated with the Portland Lease Agreement.

So long as Arc Terminals Holdings is not in default under the Portland Lease Agreement, it shall have the right to purchase the Portland Terminal at the end of the third year of the Portland Lease Agreement and at the end of any month thereafter by delivery of 90 days’ notice (“Purchase Option”). The purchase price shall be the greater of (i) nine times the total of base rent and variable rent for the 12 months immediately preceding the notice and (ii) $65.7 million. If the Purchase Option is not exercised, the Portland Lease Agreement shall remain in place and Arc Terminals Holdings shall continue to pay rent as provided above. Arc Terminals Holdings also has the option to terminate the Portland Lease Agreement on the fifth and tenth anniversaries, by providing written notice 12 months in advance, for a termination fee of $4 million and $6 million, respectively.

Joliet LLC Agreement

In connection with the JBBR Acquisition, the Partnership and an affiliate of GE EFS entered into an amended and restated limited liability company agreement of Joliet Holdings governing their respective interests in Joliet Holdings (the “Joliet LLC Agreement”).  An affiliate of GE EFS owns 40% of Joliet Holdings, while the remaining 60% is owned by the Partnership.  GE EFS indirectly owns interests in Lightfoot.  Lightfoot has a significant interest in the Partnership through its ownership of a 29.9% limited partner interest in the Partnership, 100% of the limited liability company interests in the General Partner and all of the Partnership’s incentive distribution rights.  Daniel Castagnola serves on the board of managers of Lightfoot Capital Partners GP LLC and on the Board of the General Partner and is a Managing Director at GE EFS, which is an affiliate of General Electric Capital Corporation.  In addition, Arc Terminals Holdings entered into a Management Services Agreement (the “MSA”) with Joliet Holdings to manage and operate the Joliet Terminal.  Arc Terminals Holdings is receiving a fixed monthly management fee and reimbursements for out-of-pocket expenses.  In addition, Arc Terminals Holdings may receive additional monthly management fees based upon the throughput activity at the Joliet Terminal.  During the three months ended March 31, 2016, the Partnership was paid $0.2 million in fees and reimbursements by Joliet Holdings under the MSA.

PIPE Transaction

Registration Rights Agreement with PIPE Investors

Pursuant to a Unit Purchase Agreement dated as of February 19, 2015 (the “PIPE Purchase Agreement”) among the Partnership and the purchasers named therein (the “PIPE Purchasers”), the Partnership sold 4,520,795 common units at a price of $16.59 per common unit in a private placement (the “PIPE Transaction”) on May 14, 2015 for proceeds totaling $72.7 million after placement agent commissions and expenses, which were used to partially finance the Partnership’s portion of the purchase price of the JBBR Acquisition. As a part of the PIPE Transaction, the Partnership entered into a registration rights agreement (the “PIPE Registration Rights Agreement”), dated May 14, 2015, with the PIPE Purchasers. The issuance of the common units pursuant to the PIPE Purchase Agreement was made in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Section 4(a)(2) thereof.

Pursuant to the PIPE Registration Rights Agreement, the Partnership filed, and the SEC declared effective, a shelf registration statement registering the common units of the PIPE Purchasers. In addition, the PIPE Registration Rights Agreement gives the PIPE Purchasers piggyback registration rights under certain circumstances. These registration rights are transferable to affiliates of the PIPE Purchasers.

Material Relationships Relating to PIPE Transaction

MTP Energy Master Fund Ltd. (“Magnetar PIPE Investor”), one of the PIPE Purchasers, purchased 572,635 common units for approximately $9.5 million in the PIPE Transaction. Magnetar Financial LLC controls the investment manager of the Magnetar PIPE Investor, and an affiliate of Magnetar Financial LLC also owns interests in Lightfoot, which is the sole owner of the General Partner. Eric Scheyer, the Head of the Energy Group of Magnetar Financial LLC, also serves on the Board.

UET Contribution Agreement

In July 2015, the Partnership, through its subsidiary Arc Terminals Holdings, entered into a contribution agreement (the “Contribution Agreement”) with the Pawnee Sellers, pursuant to which it acquired all of the limited liability company interests of UET Midstream from the Pawnee Sellers for total consideration, net of certain adjustments, of $76.6 million, consisting of $44.3 million in cash and $32.3 million of common units of the Partnership.  The number of common units issued to the Pawnee Sellers at the closing of the Pawnee Terminal Acquisition was based upon an issuance price of $18.50 per unit, which resulted in the issuance of 1,745,669 of the Partnership’s common units.

Registration Rights Agreement with Pawnee Sellers

In connection with the issuance of the Pawnee Transaction Units to the Pawnee Sellers (the “Initial Pawnee Holders”) pursuant to the Contribution Agreement as partial consideration for the Pawnee Terminal Acquisition, the Partnership entered into a Registration Rights Agreement (the “Pawnee Registration Rights Agreement”), dated as of July 14, 2015, with the Initial Pawnee Holders. The issuance of the Pawnee Transaction Units pursuant to the Contribution Agreement was made in reliance upon an exemption from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof.

Pursuant to the Pawnee Registration Rights Agreement, the Partnership filed, and the SEC declared effective, a shelf registration statement registering the common units of the Pawnee Sellers.  In addition, the Pawnee Registration Rights Agreement gives the Pawnee Sellers piggyback registration rights under certain circumstances. These registration rights are transferable to affiliates of the Pawnee Sellers.

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Major Customers

3 Months Ended

Mar. 31, 2016

Risks And Uncertainties [Abstract]

Major Customers

Note 12—Major Customers

The following table presents the percentage of revenues and receivables associated with the Partnership’s significant customers (those that have accounted for 10% or more of the Partnership’s revenues in a given period) for the periods indicated:

	% of Revenues
	Three Months Ended						% of Receivables
	March 31,						March 31,			December 31,
	2016			2015			2016			2015
Customer A		33	%		2	%		29	%		30	%
Customer B		13	%		25	%		21	%		12	%
Customer C		6	%		13	%		5	%		6	%
Total		52	%		40	%		55	%		48	%

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2016

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 13—Commitments and Contingencies

Environmental Matters

The Partnership may experience releases of crude oil, petroleum products and fuels or other contaminants into the environment or discover past releases that were previously unidentified. Although the Partnership maintains an inspection program designed to prevent and, as applicable, to detect and address such releases promptly, damages and liabilities incurred due to any such environmental releases from the Partnership’s assets may affect its business. As a result, the Partnership may accrue for losses associated with environmental remediation obligations, when such losses are probable and reasonably estimable. Estimated losses from environmental remediation obligations generally are recognized no later than completion of the remedial feasibility study. Loss accruals are adjusted as further information becomes available or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. The Partnership is not a party to any material pending legal proceedings relating to environmental remediation or other environmental matters and is not aware of any claims or events relating to environmental remediation or other environmental matters that, either individually or in the aggregate, could have a material adverse effect on the Partnership’s business, financial condition, results of operations and ability to make quarterly distributions to its unitholders.  As of March 31, 2016 and December 31, 2015, the Partnership had not experienced any releases of crude oil, petroleum products and fuels or other contaminants into the environment or discovered past releases that were previously unidentified that would give rise to evaluating an estimate of possible losses or a range of losses. Accordingly, the Partnership had not accrued for any loss contingencies in 2016 and 2015.

Commitments and Contractual Obligations

Future non-cancelable commitments related to certain contractual obligations as of March 31, 2016 are presented below (in thousands):

	Payments Due by Period
	Total		2016		2017		2018		2019		2020		Thereafter
Long-term debt obligations	$	240,313	$	-	$	-	$	240,313	$	-	$	-	$	-
Operating lease obligations		22,235		4,868		6,357		6,347		4,663		-		-
Earn-out obligations		18,489		1,028		1,369		1,369		1,369		1,369		11,985
Settlement obligations		1,750		750		500		500		-		-		-
Total	$	282,787	$	5,896	$	7,726	$	248,029	$	6,032	$	1,369	$	11,985

The schedule above assumes the Partnership will either exercise its Purchase Option or its right to terminate the Portland Lease Agreement (See “Note 11—Related Party Transactions—Other Transactions with Related Persons—Operating Lease Agreement” for further information).

GCAC was able to receive up to an additional $5.0 million in cash earnout payments based upon the throughput activity of one customer through January 31, 2016. As of March 31, 2016, no additional amounts had been paid or will be owed to GCAC.

In connection with the JBBR Acquisition, CenterPoint is entitled to receive up to an additional $27.0 million in cash earn-out payments.  As a part of the purchase price allocation related to the JBBR Acquisition, Joliet Holdings recorded a liability of $19.7 million, as of the date of the JBBR Acquisition, in connection with this potential CenterPoint earn-out payment.  From the date of acquisition through March 31, 2016, Joliet Holdings has paid $1.2 million related to the earn-out payment.  The Partnership will continue to evaluate this liability each quarter for any changes in the estimated fair value.  

In connection with the Pawnee Terminal Acquisition, Arc Terminals is responsible for completing the remaining construction of the Pawnee Terminal and the costs thereof are estimated to be approximately $11.0 million.  The Partnership expects the construction at the Pawnee Terminal to be completed in 2016.  The construction costs will be financed by a combination of available cash and borrowings under the Credit Facility.  

In August 2015, the City of Mobile, AL filed a complaint against Arc Terminals Holdings, pursuant to which the City of Mobile alleged that Arc Terminals Holdings was storing sulfuric acid at its Blakeley, AL facility without proper zoning approval.  Arc Terminals Holdings consented to an order with the City of Mobile, under which it agreed to cause all of the sulfuric acid of its customer (the “Blakeley Customer”) to be removed from its Blakeley, AL facility in a timely manner.  Following the removal of all sulfuric acid from the Blakeley, AL facility in November 2015, the City of Mobile dismissed its complaint against Arc Terminals Holdings.  The City of Mobile indicated that it intended to fine Arc Terminals Holdings $298 per day for each day that sulfuric acid was stored at its Blakeley, AL facility without the proper zoning approval.  The Partnership expects to reach a settlement with the City of Mobile regarding this fine and has accrued approximately $100,000 for this potential fine, which it believes is adequate.

In February 2016, Arc Terminals Holdings entered into a settlement agreement with the Blakeley Customer pursuant to which the parties agreed to terminate the terminal services agreement entered into by the parties for the storage and throughputting of sulfuric acid at the Blakeley, AL facility and to, among other things, release each party from all potential claims arising out of any non-performance of or non-compliance with the representations, warranties and covenants made thereunder.  Pursuant to the settlement agreement, Arc Terminals Holdings agreed to pay to the Blakeley Customer an aggregate amount of $2.0 million in certain increments over a three-year period commencing with the first quarter of 2016, except that Arc Terminals Holdings’ payment obligations thereunder shall be reduced by $0.5 million in the event that Arc Terminals Holdings and the Blakeley Customer enter into a new terminal services agreement for the storage and throughputting of such customer’s sulfuric acid at the Blakeley, AL facility commencing no later than January 1, 2018.  Neither Arc Terminals Holdings nor the Blakeley Customer has any obligation to enter into such new terminal services agreement.  As of December 31, 2015, the Partnership had established an accrual of $2.0 million with respect to its obligations under such settlement agreement.  For the three months ended March 31, 2016, the Partnership has paid $0.3 million related to the settlement agreement.  The terminal services agreement that has been terminated pursuant to such settlement agreement provided for an amount of minimum take-or-pay revenue, on a quarterly basis over the remaining term of such terminal services agreement, that would have represented less than 1% of the Partnership’s total revenue for the year ended December 31, 2015.

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Subsequent Events

3 Months Ended

Mar. 31, 2016

Subsequent Events [Abstract]

Subsequent Events

Note 14—Subsequent Events

Cash Distributions

In April 2016, the Partnership declared a quarterly cash distribution of $0.44 per unit ($1.76 per unit on an annualized basis) totaling approximately $8.5 million for all common and subordinated units outstanding. The distribution is for the period from January 1, 2016 through March 31, 2016. The first quarter distribution represents a 7.3% increase over the first quarter 2015 cash distribution of $0.41 per unit ($1.64 per unit on an annualized basis).  The distribution is payable on May 13, 2016 to unitholders of record on May 9, 2016.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying interim statements of the Partnership have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments and disclosures necessary for a fair statement of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year or for any other period. These interim statements should be read in conjunction with the Partnership’s consolidated financial statements for the year ended December 31, 2015, which are included in the 2015 Partnership 10-K, as filed with the SEC. The year-end balance sheet data was derived from the audited financial statements, but does not include all disclosures required by GAAP.  

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The most significant estimates relate to the valuation of acquired businesses, goodwill and intangible assets, assessment for impairment of long-lived assets and the useful lives of intangible assets and property, plant and equipment. Actual results could differ from those estimates.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and are no longer depreciated.

No impairment charges were recorded during the three months ended March 31, 2016 and 2015.

Goodwill

Goodwill

Goodwill represents the excess of consideration paid over the fair value of net assets acquired in a business combination. Goodwill is not amortized but instead is assessed for impairment at least annually or when facts and circumstances warrant. Goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed. The second step compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The Partnership determines the fair value of its single reporting unit by blending two valuation approaches: the income approach and a market value approach. The inputs included assumptions related to the future performance of the Partnership and assumptions related to discount rates, long-term growth rates and control premiums.  Based on the results of the first step of the quantitative impairment assessment of its goodwill as of December 31, 2015, the fair value of the Partnership’s reporting unit exceeded its carrying value by approximately 9% and management concluded that no impairment was necessary.  In the event that market conditions were to remain weak for an extended period of time, the Partnership may be required to record an impairment of goodwill in the future, and such impairment could be material.

A summary of the changes in the carrying amount of goodwill is as follows (in thousands):

	As of
	March 31,		December 31,
	2016		2015
Beginning Balance	$	39,871	$	15,162
Goodwill acquired		-		24,709
Ending Balance	$	39,871	$	39,871

Refer to “Note 3—Acquisitions – JBBR Acquisition” for discussion on the goodwill recorded in the second quarter of 2015 in connection with the JBBR Acquisition (as defined in “Note 2—Summary of Significant Accounting Policies—Fair Value of Financial Instruments” below).  

Deferred Rent

Deferred Rent

The Portland Lease Agreement (as defined in “Note 11—Related Party Transactions—Other Transactions with Related Persons—Operating Lease Agreement”below) contains certain rent escalation clauses, contingent rent provisions and lease termination payments. The Partnership recognizes rent expense for operating leases on a straight-line basis over the term of the lease, taking into consideration the items noted above. Contingent rental payments are generally recognized as rent expense as incurred. The deferred rent resulting from the recognition of rent expense on a straight-line basis related to the Portland Lease Agreement is included within “Other non-current liabilities” in the accompanying unaudited condensed consolidated balance sheets at March 31, 2016 and December 31, 2015.

Contingencies

Contingencies

In the normal course of business, the Partnership may be subject to loss contingencies, such as legal proceedings and claims arising out of its business that cover a wide range of matters. An accrual for a loss contingency is recognized when it is probable that an asset had been impaired or a liability had been incurred and the amount of loss can be reasonably estimated.  If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Partnership’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.  If the estimate of a probable loss is a range and no amount within the range is more likely, the Partnership will accrue the minimum amount of the range.  

There are many uncertainties associated with any legal proceeding and these actions or other third-party claims against us may cause us to incur costly litigation and/or substantial settlement charges. As a result, our business, financial condition, results of operations and cash flows could be adversely affected. The actual liability in any such matters may be materially different from our estimates, if any.

Revenue Recognition

Revenue Recognition

Revenues from leased tank storage and delivery services are recognized as the services are performed, evidence of a contractual arrangement exists and collectability is reasonably assured. Revenues also include the sale of excess products and additives which are mixed with customer-owned liquid products. Revenues for the sale of excess products and additives are recognized when title and risk of loss pass to the customer.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a specified measurement date. Fair value measurements are derived using inputs and assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. GAAP establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This three-tier hierarchy classifies fair value amounts recognized or disclosed in the condensed consolidated financial statements based on the observability of inputs used to estimate such fair values. The classification within the hierarchy of a financial asset or liability is determined based on the lowest level input that is significant to the fair value measurement. The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3). At each balance sheet reporting date, the Partnership categorizes its financial assets and liabilities using this hierarchy.

The amounts reported in the balance sheet for cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value because of the short-term maturities of these instruments (Level 1). Because the Credit Facility (as defined in “Note 7 – Debt – Credit Facility” below) has a market rate of interest, its carrying amount approximated fair value (Level 2).  

In connection with the Partnership’s acquisition, through a joint venture company formed with an affiliate of GE Energy Financial Services (“GE EFS”), of all of the memberships interests of Joliet Bulk, Barge & Rail LLC (“JBBR”) from CenterPoint Properties Trust (“CenterPoint”) for $216.0 million ( the “JBBR Acquisition”), Arc Terminals Joliet Holdings LLC (“Joliet Holdings”) has an earn-out obligation to CenterPoint which was valued at the time of the JBBR Acquisition at approximately $19.7 million.  Refer to “Note 3—Acquisitions – JBBR Acquisition” for further discussion on the JBBR Acquisition. Joliet Holdings’ earn-out obligations to CenterPoint will terminate upon the payment, in the aggregate, of $27.0 million.  The balance of the earn-out liability is included within “Other non-current liabilities” in the accompanying consolidated balance sheets at March 31, 2016 and December 31, 2015.  Since the fair value of the contingent consideration obligation is based primarily upon unobservable inputs, it is classified as Level 3 in the fair value hierarchy.  The contingent consideration obligation will be revalued at each reporting period and changes to the fair value will be recorded as a component of operating income.  Increases or decreases in the fair value of the contingent consideration obligations can result from changes in the assumed timing of revenue and expense estimates.  Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent reporting period.  Accordingly, future business and economic conditions can materially impact the amount of contingent consideration expense we record in any given period.  No revaluation adjustments were necessary during the three months ended March 31, 2016.  For the three months ended March 31, 2016 and 2015, Joliet Holdings has paid $0.3 million and $0 million, respectively, related to the earn-out obligation.  Since the JBBR Acquisition through March 31, 2016, Joliet Holdings has paid $1.2 million of the earn-out to CenterPoint. The following is a reconciliation of the beginning and ending amounts of the contingent consideration obligation related to the JBBR Acquisition (in thousands):

	Balance at				Earn-out			Balance at
	December 31		Revaluation		payments			March 31,
	2015		Adjustments		paid			2016
Liabilities at fair value:
JBBR contingent consideration	$	18,830	$	-	$	(341	)	$	18,489
Total liabilities at fair value	$	18,830	$	-	$	(341	)	$	18,489

The Partnership believes that its valuation methods are appropriate and consistent with the values that would be determined by other market participants. However, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Unit-Based Compensation

Unit-Based Compensation

The Partnership recognizes all unit-based compensation to directors, officers, employees and other service providers in the consolidated financial statements based on the fair value of the awards.  Fair value for unit-based awards classified as equity awards is determined on the grant date of the award, and this value is recognized as compensation expense ratably over the requisite service or performance period of the equity award. Fair value for equity awards is calculated at the closing price of the common units on the grant date.  Fair value for unit-based awards classified as liability awards is calculated at the closing price of the common units on the grant date and is remeasured at each reporting period until the award is settled.  Compensation expense related to unit-based awards is included in the “Selling, general and administrative” line item in the accompanying unaudited condensed consolidated statements of operations and comprehensive income.

For awards with performance conditions, the expense is accrued over the service period only if the performance condition is considered to be probable of occurring. When awards with performance conditions that were previously considered improbable become probable, the Partnership incurs additional expense in the period that the probability assessment changes (see “Note 9—Equity Plans”).

Net Income Per Unit

Net Income Per Unit

The Partnership uses the two-class method in the computation of earnings per unit since there is more than one participating class of securities. Earnings per common and subordinated unit are determined by dividing net income allocated to the common units and subordinated units, respectively, after deducting the amount allocated to the phantom units, if any, by the weighted average number of outstanding common and subordinated units, respectively, during the period. The overall computation, presentation and disclosure of the Partnership’s limited partners’ net income per unit are made in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260 “Earnings per Share.”

Segment Reporting

Segment Reporting

The Partnership derives revenue from operating its terminal and transloading facilities.  These facilities have been aggregated into one reportable segment because the facilities have similar long-term economic characteristics, products and types of customers.

Noncontrolling Interests

Noncontrolling Interests

The Partnership applies the provisions of ASC 810 Consolidations, which were amended on January 1, 2009 by ASC 810-10-65 and ASC 810-10-45 (“ASC 810”).  As required by ASC 810, our non-controlling ownership interests in consolidated subsidiaries are presented in the consolidated balance sheet within capital as a separate component from partners’ capital.  In addition, consolidated net income includes earnings attributable to both the partners and the non-controlling interests.  For the three months ended March 31, 2016 and 2015, $2.8 million and $0 million, respectively, of distributions have been made to non-controlling interest holders of consolidated subsidiaries.  Refer to “Note 3—Acquisitions—JBBR Acquisition” for discussion of the JBBR Acquisition which gave rise to the non-controlling interests.  

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued updated guidance on the reporting and disclosure of revenue recognition. The update requires that an entity recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update also requires new qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, information about contract balances and performance obligations, and assets recognized from costs incurred to obtain or fulfill a contract. The Partnership is currently evaluating the potential impact of this authoritative guidance on its financial condition, results of operations, cash flows and related disclosures.  In April 2015, the FASB proposed a one-year deferral of the effective date, and therefore, this guidance will be effective for the Partnership beginning in the first quarter of 2018, with early adoption optional but not before the original effective date of December 15, 2016.

In August 2015, the FASB issued new guidance which adds comments from the SEC related to the presentation of debt issuance costs related to line-of-credit arrangements. The SEC commented it would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Partnership adopted this requirement in the first quarter of 2016 and it had no impact on its financial condition, results of operations, cash flows and related disclosures.

In January 2016, the FASB issued new guidance which requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changesin fair value recognized in net income; requires public business entities to use the exit price notion when measuring fair value of financialinstruments for disclosure purposes; requires separate presentation of financial assets and financial liabilities by measurement category and form offinancial asset (i.e., securities or loans and receivables); and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost. The effective date will be the first quarter of fiscal year 2017. The Partnership does not expect this requirement to have a significant impact on its financial condition, results of operations, cash flows and related disclosures.

In February 2016, the FASB issued new guidance which amends various aspects of existing guidance for leases.   The new guidance requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. The main difference between previous GAAP and the amended standard is the recognition of lease assets and lease liabilities by lessees on the balance sheet for those leases classified as operating leases under previous GAAP. As a result, the Partnership will have to recognize a liability representing its lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. The new guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the effect this standard will have on our consolidated financial position or results of operations.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Schedule of Goodwill

A summary of the changes in the carrying amount of goodwill is as follows (in thousands):

	As of
	March 31,		December 31,
	2016		2015
Beginning Balance	$	39,871	$	15,162
Goodwill acquired		-		24,709
Ending Balance	$	39,871	$	39,871

Schedule of Reconciliation of Contingent Consideration

The following is a reconciliation of the beginning and ending amounts of the contingent consideration obligation related to the JBBR Acquisition (in thousands):

	Balance at				Earn-out			Balance at
	December 31		Revaluation		payments			March 31,
	2015		Adjustments		paid			2016
Liabilities at fair value:
JBBR contingent consideration	$	18,830	$	-	$	(341	)	$	18,489
Total liabilities at fair value	$	18,830	$	-	$	(341	)	$	18,489

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Acquisitions (Tables)

3 Months Ended

Mar. 31, 2016

Pennsylvania Terminals [Member]

Summary of Consideration Paid and Assets Acquired

The total preliminary purchase price of $8.0 million was preliminarily allocated to the net assets acquired as follows (in thousands):

Consideration:
Cash paid to seller	$	8,000
Total consideration	$	8,000
Allocation of purchase price:
Property and equipment	$	8,000
Net assets acquired	$	8,000

JBBR Acquisition [Member]

Summary of Consideration Paid and Assets Acquired

The following table summarizes the consideration paid and the assets acquired at the JBBR Acquisition closing date (in thousands):

Consideration:
Cash paid to seller	$	216,000
Earn-out liability recognized		19,700
Total consideration	$	235,700
Allocation of purchase price:
Property and equipment	$	156,991
Intangible assets		54,000
Goodwill		24,709
Net assets acquired	$	235,700

Pawnee Terminal Acquisition [Member]

Summary of Consideration Paid and Assets Acquired

The following table summarizes the consideration paid and the assets acquired at the Pawnee Terminal Acquisition closing date (in thousands):

Consideration:
Cash paid to seller	$	44,332
Fair value of equity issued to seller		30,200
Total consideration	$	74,532
Allocation of purchase price:
Property and equipment	$	23,613
Intangible assets		55,442
Less: liabilities assumed		(4,523	)
Net assets acquired	$	74,532

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Investment in Unconsolidated Affiliate (Tables)

3 Months Ended

Mar. 31, 2016

Schedule of Investment in Unconsolidated Affiliate

“Investment in unconsolidated affiliate” consisted of the LNG Interest, and its balances as of March 31, 2016 and December 31, 2015 are represented below (in thousands):

Balance at December 31, 2015	$	74,399
Equity earnings		2,461
Contributions		-
Distributions		(2,179	)
Amortization of premium		(77	)
Other comprehensive income		(896	)
Balance at March 31, 2016	$	73,708

Schedule of Estimated Aggregate Amortization of Premium

The estimated aggregate amortization of this premium for its remaining useful life from March 31, 2016 is as follows (in thousands):

	Total
2016	$	232
2017		309
2018		309
2019		309
2020		309
Thereafter		6,444
	$	7,912

Gulf LNG Holdings [Member]

Schedule of Investment in Unconsolidated Affiliate

Summarized financial information for Gulf LNG Holdings is reported below (in thousands):

	March 31,		December 31,
	2016		2015
Balance sheets
Current assets	$	5,554	$	7,523
Noncurrent assets		881,255		889,655
Total assets	$	886,809	$	897,178
Current liabilities	$	75,735	$	79,970
Long-term liabilities		675,233		678,926
Member’s equity		135,841		138,282
Total liabilities and member’s equity	$	886,809	$	897,178

	Three Months Ended
	March 31,
	2016		2015
Income statements
Revenues	$	46,484	$	46,624
Total operating costs and expenses		13,855		14,206
Operating income		32,629		32,418
Net income	$	23,845	$	24,165

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Property, Plant and Equipment (Tables)

3 Months Ended

Mar. 31, 2016

Property Plant And Equipment [Abstract]

Schedule of Property, Plant and Equipment

The Partnership’s property, plant and equipment consisted of (in thousands):

	As of
	March 31,			December 31,
	2016			2015
Land	$	78,455		$	74,855
Buildings and site improvements		78,483			77,514
Tanks and trim		114,523			111,076
Pipelines		20,364			20,364
Machinery and equipment		119,098			118,503
Office furniture and equipment		730			561
Construction in progress		17,678			12,306
		429,331			415,179
Less:  Accumulated depreciation		(38,160	)		(34,508	)
Property, plant and equipment, net	$	391,171		$	380,671

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Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Partnership's Intangible Assets

The Partnership’s intangible assets consisted of (in thousands):

	Estimated	As of
	Useful Lives	March 31,			December 31,
	in Years	2016			2015
Customer relationships	21	$	4,785		$	4,785
Acquired contracts	2-12		149,342			149,342
Non-compete agreements	2-3		741			741
			154,868			154,868
Less:  Accumulated amortization			(26,367	)		(22,747	)
Intangible assets, net		$	128,501		$	132,121

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Partners' Capital and Distributions (Tables)

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Schedule of the Quarterly Distributions Related to the Partnership's Quarterly Financial Results

The table below summarizes the quarterly distributions related to the Partnership’s quarterly financial results (in thousands, except per unit data):

	Total Quarterly		Total Cash		Date of	Unitholders
Quarter Ended	Distribution Per Unit		Distribution		Distribution	Record Date
March 31, 2016	$	0.4400	$	8,475	May 13, 2016	May 9, 2016
December 31, 2015	$	0.4400	$	8,472	February 12, 2016	February 8, 2016
September 30, 2015	$	0.4400	$	8,472	November 13, 2015	November 9, 2015
June 30, 2015	$	0.4250	$	8,181	August 14, 2015	August 10, 2015
March 31, 2015	$	0.4100	$	5,309	May 15, 2015	May 11, 2015

Schedule Of Percentage Of Incentive Distribution Rights To Partnership Unitholders And General Partner

If cash distributions to the Partnership’s unitholders exceed $0.4456 per unit in any quarter, the Partnership’s unitholders and the General Partner, as the initial holder of the incentive distribution rights, will receive distributions according to the following percentage allocations:

Total Quarterly Distribution Per Unit Target Amount	Marginal Percentage Interest in Distributions
	Unitholders			General Partner
above $0.3875 up to $0.4456		100.0	%		0.0	%
above $0.4456 up to $0.4844		85.0	%		15.0	%
above $0.4844 up to $0.5813		75.0	%		25.0	%
above $0.5813		50.0	%		50.0	%

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Equity Plans (Table)

3 Months Ended

Mar. 31, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity

The following table presents phantom units granted pursuant to the 2013 Plan:

	Equity Awards					Liability Awards
	Three Months Ended					Three Months Ended
	March 31, 2016					March 31, 2016
	Number			Weighted Avg.		Number			Weighted Avg.
	of Phantom			Grant Date		of Phantom			Grant Date		Fair Value at
	Units			Fair Value		Units			Fair Value		3/31/2016
Balance at December 31, 2015		985,272		$	24.76		7,200		$	25.46	$	10.23
Granted		80,500		$	11.73		-		$	-	$	-
Vested		(8,551	)	$	19.13		-		$	-	$	-
Forfeited		(6,000	)	$	25.46		(200	)	$	25.46	$	-
Balance at March 31, 2016		1,051,221		$	23.84		7,000		$	25.46	$	10.23

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Earnings Per Unit (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Unit

The following table sets forth the calculation of basic and diluted earnings per limited partner unit for the periods indicated (in thousands, except per unit data):

	Three Months Ended
	March 31,
	2016		2015
Net Income attributable to partners' capital	$	3,116	$	304
Less:
Distribution equivalent rights for unissued units		274		230
Net income available to limited partners	$	2,842	$	74
Numerator for basic and diluted earnings per limited partner unit:
Allocation of net income among limited partner interests:
Net income allocated to common unitholders	$	1,945	$	39
Net income (loss) allocated to subordinated unitholders	$	897	$	35
Net income allocated to limited partners:	$	2,842	$	74
Denominator for basic and diluted earnings per limited partner unit:
Common units - (basic and diluted)		13,176		6,868
Subordinated units - (basic and diluted)		6,081		6,081
Earnings (loss) per limited partner unit:
Common - (basic and diluted)	$	0.15	$	0.01
Subordinated - (basic and diluted)	$	0.15	$	0.01

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Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2016

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The total revenues associated with the storage and throughput agreements for Center Oil, GCAC and UET and reflected in the “Revenues – Related parties” line on the accompanying unaudited condensed consolidated statements of operations and comprehensive income are as follows (in thousands):

	Three Months Ended
	March 31,
	2016		2015
Center Oil	$	1,460	$	1,728
UET (a)		1,575	N/A
GCAC		448		450
Total	$	3,483	$	2,178

(a) UET did not become a related party until the closing of the Pawnee Terminal Acquisition

The total receivables associated with the storage and throughput agreements for Center Oil, GCAC and UET and reflected in the “Due from related parties” line on the accompanying unaudited condensed consolidated balance sheets are as follows (in thousands):

	As of
	March 31,		December 31,
	2016		2015
Center Oil	$	507	$	564
UET (a)		527		528
GCAC		303		440
Total	$	1,337	$	1,532

(a) UET did not become a related party until the closing of the Pawnee Terminal Acquisition

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Major Customers (Tables)

3 Months Ended

Mar. 31, 2016

Risks And Uncertainties [Abstract]

Schedules of Percentages of Revenues and Receivables Associated with Significant Customers

The following table presents the percentage of revenues and receivables associated with the Partnership’s significant customers (those that have accounted for 10% or more of the Partnership’s revenues in a given period) for the periods indicated:

	% of Revenues
	Three Months Ended						% of Receivables
	March 31,						March 31,			December 31,
	2016			2015			2016			2015
Customer A		33	%		2	%		29	%		30	%
Customer B		13	%		25	%		21	%		12	%
Customer C		6	%		13	%		5	%		6	%
Total		52	%		40	%		55	%		48	%

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2016

Commitments And Contingencies Disclosure [Abstract]

Schedule of Future Non-Cancelable Commitments Related to Certain Contractual Obligations

Future non-cancelable commitments related to certain contractual obligations as of March 31, 2016 are presented below (in thousands):

	Payments Due by Period
	Total		2016		2017		2018		2019		2020		Thereafter
Long-term debt obligations	$	240,313	$	-	$	-	$	240,313	$	-	$	-	$	-
Operating lease obligations		22,235		4,868		6,357		6,347		4,663		-		-
Earn-out obligations		18,489		1,028		1,369		1,369		1,369		1,369		11,985
Settlement obligations		1,750		750		500		500		-		-		-
Total	$	282,787	$	5,896	$	7,726	$	248,029	$	6,032	$	1,369	$	11,985

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Organization and Presentation - Additional Information (Detail) $ / shares in Units, bbl in Millions, $ in Millions	1 Months Ended	3 Months Ended
	Nov. 30, 2013 USD ($) $ / shares shares	Mar. 31, 2016 Bcf / d Terminal State Facility bbl / d shares bbl m³	Dec. 31, 2015 shares
Organization [Line Items]
Number of terminals | Terminal		21
Number of states terminal located | State		12
Number of barrels of storage capacity | bbl		7.7
Number of rail transloading facilities | Facility		4
Rail transloading facility throughput capacity | bbl / d		126,000
Common Units [Member]
Organization [Line Items]
Limited partners' units issued		13,181,409	13,174,410
Common Units [Member] | Lightfoot Capital Partners LP And Lightfoot Capital Partners GPLLC [Member]
Organization [Line Items]
Limited partners' units issued		68,617
Subordinated Units [Member]
Organization [Line Items]
Limited partners' units issued		6,081,081	6,081,081
Subordinated Units [Member] | Lightfoot Capital Partners LP And Lightfoot Capital Partners GPLLC [Member]
Organization [Line Items]
Limited partners' units issued		5,146,264
Initial Public Offering [Member] | Terminal Credit Facility [Member]
Organization [Line Items]
Amended and restated credit facility | $	$ 40.0
Initial Public Offering [Member] | Limited Partners [Member]
Organization [Line Items]
Common units issued in initial public offering	6,786,869
Common units issued, per unit | $ / shares	$ 19.00
Initial Public Offering [Member] | Underwriters' Over-allotment Option [Member] | Limited Partners [Member]
Organization [Line Items]
Common units issued in initial public offering	786,869
Gulf LNG Holdings [Member]
Organization [Line Items]
Limited partners capital units percentage	10.30%
Gulf LNG Holdings Group, LLC Acquisition [Member]
Organization [Line Items]
Liquefied natural gas storage capacity | m³		320,000
Liquefied natural gas sendout capacity | Bcf / d		1.5

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Summary of Significant Accounting Policies - Additional Information (Detail)		1 Months Ended	3 Months Ended		13 Months Ended
	May. 31, 2015 USD ($)	May. 31, 2015 USD ($)	Mar. 31, 2016 USD ($) Segment	Mar. 31, 2015 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2015
Schedule Of Accounting Policies [Line Items]
Impairment charges			$ 0	$ 0
Percentage of reporting unit fair value in excess of carrying value						9.00%
Earn-out Payments paid			$ 341,000
Number of reportable segment | Segment			1
Distributions to noncontrolling interest holders			$ 2,800,000	0
JBBR Acquisition [Member]
Schedule Of Accounting Policies [Line Items]
Cash paid to seller		$ 216,000,000	216,000,000
Initial Valuation	$ 19,700,000
Earn-out payments	$ 27,000,000	$ 27,000,000	27,000,000		$ 27,000,000
Earn-out Payments paid			341,000	$ 0
Business acquisition earn-out payment			$ 1,200,000		$ 1,200,000

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Summary of Significant Accounting Policies - Schedule of Goodwill (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
Beginning Balance	$ 39,871	$ 15,162
Goodwill acquired	0	24,709
Ending Balance	$ 39,871	$ 39,871

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Summary of Significant Accounting Policies - Summary of Reconciliation of Contingent Consideration (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Schedule Of Reconciliation Of Contingent Consideration [Line Items]
Beginning balance	$ 18,830
Revaluation Adjustments	0
Payments of earn-out liability	(341)
Ending balance	18,489
JBBR Acquisition [Member]
Schedule Of Reconciliation Of Contingent Consideration [Line Items]
Beginning balance	18,830
Revaluation Adjustments	0
Payments of earn-out liability	(341)	$ 0
Ending balance	$ 18,489

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Acquisitions - Additional Information (Detail)	1 Months Ended			2 Months Ended	3 Months Ended
	Jan. 31, 2016 USD ($) Terminal	Jul. 31, 2015 USD ($) $ / shares shares	May. 31, 2015 USD ($) $ / shares shares	Mar. 31, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Business Acquisition [Line Items]
Proceeds from credit facility					$ 14,250,000
Earn-out liability recognized				$ 18,489,000	18,489,000	$ 18,830,000
Goodwill				39,871,000	39,871,000	39,871,000	$ 15,162,000
Pennsylvania Terminals [Member]
Business Acquisition [Line Items]
Number of terminals acquired | Terminal	4
Cash paid to seller	$ 8,000,000
Initial term of take or pay terminal services	2 years
Identifiable assets acquired, fair value	$ 8,000,000
Transaction costs	500,000
Total purchase price	$ 8,000,000
Total revenue				400,000
Pennsylvania Terminals [Member] | Maximum [Member]
Business Acquisition [Line Items]
Operating losses				100,000
JBBR Acquisition [Member]
Business Acquisition [Line Items]
Cash paid to seller			$ 216,000,000		216,000,000
Identifiable assets acquired, fair value			211,000,000
Transaction costs			1,300,000
Total purchase price			235,700,000
Earn-out payments			27,000,000	27,000,000	27,000,000
Proceeds from private placement			72,700,000
Earn-out liability recognized			19,700,000	18,489,000	18,489,000	$ 18,830,000
Goodwill			$ 24,709,000
JBBR Acquisition [Member] | Private Placement [Member]
Business Acquisition [Line Items]
Sale of common units, shares | shares			4,520,795
Price per unit of common units | $ / shares			$ 16.59
Proceeds from credit facility			$ 61,000,000
Pawnee Terminal Acquisition [Member]
Business Acquisition [Line Items]
Cash paid to seller		$ 44,332,000
Identifiable assets acquired, fair value		74,500,000
Transaction costs		1,800,000
Total purchase price		74,532,000
Business acquisition, total consideration cost		76,600,000
Business combination consideration transferred net of adjustment.		76,600,000
Business acquisition, Equity interest issued, Value		$ 32,300,000
Business acquisition, Share price | $ / shares		$ 18.50
Business acquisition, Equity interest issued or issuable, Number of shares | shares		1,745,669
Business acquisition, Fair value of share | $ / shares		$ 17.30
Business acquisition reduction of purchase price		$ 2,100,000
Estimated remaining construction cost		11,000,000
Business acquisition construction cost payable		$ 4,523,000		$ 2,000,000	$ 2,000,000

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Acquisitions - Summary of Consideration Paid and Assets Acquired (Detail) - USD ($) $ in Thousands	1 Months Ended			3 Months Ended
	Jan. 31, 2016	Jul. 31, 2015	May. 31, 2015	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Consideration:
Earn-out liability recognized				$ 18,489	$ 18,830
Allocation of purchase price:
Goodwill				39,871	39,871	$ 15,162
Pennsylvania Terminals [Member]
Consideration:
Cash paid to seller	$ 8,000
Total purchase price	8,000
Allocation of purchase price:
Property and equipment	8,000
Net assets acquired	$ 8,000
JBBR Acquisition [Member]
Consideration:
Cash paid to seller			$ 216,000	216,000
Earn-out liability recognized			19,700	18,489	$ 18,830
Total purchase price			235,700
Allocation of purchase price:
Property and equipment			156,991
Intangible assets			54,000
Goodwill			24,709
Net assets acquired			$ 235,700
Pawnee Terminal Acquisition [Member]
Consideration:
Cash paid to seller		$ 44,332
Fair value of equity issued to seller		30,200
Total purchase price		74,532
Allocation of purchase price:
Property and equipment		23,613
Intangible assets		55,442
Less: liabilities assumed		(4,523)		$ (2,000)
Net assets acquired		$ 74,532

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Investment in Unconsolidated Affiliate - Schedule of Investments in Unconsolidated Affiliate (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Investments In And Advances To Affiliates Schedule Of Investments [Abstract]
Beginning balance	$ 74,399
Equity earnings	2,461	$ 2,489
Contributions		310
Distributions	(2,179)
Amortization of premium	(77)
Other comprehensive income	(896)	$ (471)
Ending balance	$ 73,708

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Investment in Unconsolidated Affiliate - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Nov. 30, 2013	Mar. 31, 2016	Mar. 31, 2015
Schedule Of Equity Method Investments [Line Items]
Purchase of LNG Interest from an affiliate			$ 310
Percentage of adjusted EBITDA associated with LNG interest		18.00%	34.00%
Percentage of distributable cash flow associated with LNG interest		24.00%	33.00%
Gulf LNG Holdings Group, LLC Acquisition [Member]
Schedule Of Equity Method Investments [Line Items]
Purchase of LNG Interest from an affiliate	$ 72,700
Carrying value of LNG Interest	64,100
Purchase price excess amount paid over the carrying value	$ 8,600
Long lived assets useful life		28 years

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Investment in Unconsolidated Affiliate - Schedule of Estimated Aggregate Amortization of Premium (Detail) - Gulf LNG Holdings Group, LLC Acquisition [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Schedule Of Equity Method Investments [Line Items]
Estimated future amortization expense, 2016	$ 232
Estimated future amortization expense, 2017	309
Estimated future amortization expense, 2018	309
Estimated future amortization expense, 2019	309
Estimated future amortization expense, 2020	309
Estimated future amortization expense, Thereafter	6,444
Total future amortization expense	$ 7,912

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Investment in Unconsolidated Affiliate - Summarized Financial Information for the Gulf LNG Holdings (Detail) - Gulf LNG Holdings Group, LLC Acquisition [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Balance sheets
Current assets	$ 5,554		$ 7,523
Noncurrent assets	881,255		889,655
Total assets	886,809		897,178
Current liabilities	75,735		79,970
Long-term liabilities	675,233		678,926
Member’s equity	135,841		138,282
Total liabilities and partners’ capital	886,809		$ 897,178
Income statements
Revenues	46,484	$ 46,624
Total operating costs and expenses	13,855	14,206
Operating income	32,629	32,418
Net income	$ 23,845	$ 24,165

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Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 429,331	$ 415,179
Less: Accumulated depreciation	(38,160)	(34,508)
Property, plant and equipment, net	391,171	380,671
Land [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	78,455	74,855
Building and Site Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	78,483	77,514
Tanks and Trim [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	114,523	111,076
Pipelines [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	20,364	20,364
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	119,098	118,503
Office Furniture and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	730	561
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 17,678	$ 12,306

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Intangible Assets - Summary of Partnership's Intangible Assets (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 154,868	$ 154,868
Less: Accumulated amortization	(26,367)	(22,747)
Intangible assets, net	$ 128,501	132,121
Customer Relationships [Member]
Finite Lived Intangible Assets [Line Items]
Intangible assets estimated useful life	21 years
Intangible assets, gross	$ 4,785	4,785
Contract-Based Intangible Assets [Member]
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 149,342	149,342
Contract-Based Intangible Assets [Member] | Minimum [Member]
Finite Lived Intangible Assets [Line Items]
Intangible assets estimated useful life	2 years
Contract-Based Intangible Assets [Member] | Maximum [Member]
Finite Lived Intangible Assets [Line Items]
Intangible assets estimated useful life	12 years
Non-compete agreements [Member]
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 741	$ 741
Non-compete agreements [Member] | Minimum [Member]
Finite Lived Intangible Assets [Line Items]
Intangible assets estimated useful life	2 years
Non-compete agreements [Member] | Maximum [Member]
Finite Lived Intangible Assets [Line Items]
Intangible assets estimated useful life	3 years

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Intangible Assets - Additional Information (Detail) $ in Millions	Mar. 31, 2016 USD ($)
Finite Lived Intangible Assets Future Amortization Expense [Abstract]
Estimated future amortization expense, remainder of 2016	$ 10.8
Estimated future amortization expense, 2017	14.0
Estimated future amortization expense, 2018	12.8
Estimated future amortization expense, 2019	12.2
Estimated future amortization expense, 2020	12.2
Estimated future amortization expense, thereafter	$ 66.5

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Debt - Additional Information (Detail)	1 Months Ended	3 Months Ended
	Nov. 30, 2013 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Jul. 31, 2015 USD ($)	May. 31, 2015 USD ($)	Nov. 12, 2013 USD ($)
Line Of Credit Facility [Line Items]
Credit facility		$ 240,313,000	$ 226,063,000
Sublimit for issuance of swing line loans	$ 5,000,000
Percentage of increase in interest rate on default exists	2.00%
Credit Facility [Member]
Line Of Credit Facility [Line Items]
Line of Credit Facility, amount	$ 300,000,000			$ 300,000,000	$ 275,000,000	$ 275,000,000
Credit facility		$ 240,300,000
Line of Credit Facility, interest rate		3.44%
Letter of credit outstanding amount	10,000,000
Available capacity under the credit facility		$ 33,800,000
Amount of commitments under the Credit Facility	$ 100,000,000
Credit Facility, maturity date		Nov. 30, 2018
Maximum leverage ratio to be maintained as per credit facility	4.50
Minimum interest coverage ratio	2.50
Maximum secured leverage ratio	3.50
Credit Facility [Member] | Senior Notes [Member]
Line Of Credit Facility [Line Items]
Future issuance of debt	$ 200,000,000
Credit Facility [Member] | Minimum [Member]
Line Of Credit Facility [Line Items]
Commitment fee percentage on unused portion of facility	0.375%
Credit Facility [Member] | Maximum [Member]
Line Of Credit Facility [Line Items]
Commitment fee percentage on unused portion of facility	0.50%
Increase in Partnership leverage ratio	5.00
Credit Facility [Member] | Base Rate [Member] | Minimum [Member]
Line Of Credit Facility [Line Items]
Basis points spread on floating rate debt	1.00%
Credit Facility [Member] | Base Rate [Member] | Maximum [Member]
Line Of Credit Facility [Line Items]
Basis points spread on floating rate debt	2.00%
Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Line Of Credit Facility [Line Items]
Basis points spread on floating rate debt	2.00%
Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Line Of Credit Facility [Line Items]
Basis points spread on floating rate debt	3.00%
Credit Facility [Member] | One-Month LIBOR Rate [Member]
Line Of Credit Facility [Line Items]
Basis points spread on floating rate debt	1.00%
Credit Facility [Member] | Federal Funds Rate [Member]
Line Of Credit Facility [Line Items]
Basis points spread on floating rate debt	0.50%
Credit Facility [Member] | Standby Letters of Credit [Member]
Line Of Credit Facility [Line Items]
Sublimit for letters of credit	$ 20,000,000				$ 20,000,000

XML

Partners' Capital and Distributions - Schedule of the Quarterly Distributions Related to the Partnership's Quarterly Financial Results (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015
Distributions Made To Members Or Limited Partners [Abstract]
Total Quarterly Distribution Per Unit	$ 0.4400	$ 0.4400	$ 0.4400	$ 0.4250	$ 0.4100
Total Cash Distribution Declared	$ 8,475
Total Cash Distribution	$ 8,473	$ 8,472	$ 8,472	$ 8,181	$ 5,309
Date of Distribution	May 13, 2016	Feb. 12, 2016	Nov. 13, 2015	Aug. 14, 2015	May 15, 2015
Unitholders Record Date	May 09, 2016	Feb. 08, 2016	Nov. 09, 2015	Aug. 10, 2015	May 11, 2015

XML

Partners' Capital and Distributions - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016 $ / shares
Limited Partners Capital Account [Line Items]
Cash distribution after period end of each quarter	60 days
Annualized minimum quarterly distribution on each outstanding common and subordinated units, percentage	150.00%
Annualized minimum quarterly distribution on each outstanding common and subordinated units	$ 2.325
Conversion basis	When the subordination period ends, all subordinated units will convert into common units on a one-for-one basis, and all common units thereafter will no longer be entitled to arrearages.
Annualized Basis [Member]
Limited Partners Capital Account [Line Items]
Cash distribution received, per unit	$ 1.55
Common Units [Member]
Limited Partners Capital Account [Line Items]
Cash distribution received, per unit	0.3875
Subordinated Units [Member]
Limited Partners Capital Account [Line Items]
Cash distribution received, per unit	0.3875
All Unitholders [Member]
Limited Partners Capital Account [Line Items]
Cash distribution received, per unit	$ 0.4456

XML

Partners' Capital and Distributions - Percentage of Incentive Distribution Rights to Partnership's Unitholders and General Partner (Detail)	3 Months Ended
	Mar. 31, 2016
Above $0.3875 up to $0.4456 [Member] | Unitholders [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Marginal Percentage Interest in Distributions	100.00%
Above $0.3875 up to $0.4456 [Member] | General Partners [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Marginal Percentage Interest in Distributions	0.00%
Above $0.4456 up to $0.4844 [Member] | Unitholders [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Marginal Percentage Interest in Distributions	85.00%
Above $0.4456 up to $0.4844 [Member] | General Partners [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Marginal Percentage Interest in Distributions	15.00%
Above $0.4844 up to $0.5813 [Member] | Unitholders [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Marginal Percentage Interest in Distributions	75.00%
Above $0.4844 up to $0.5813 [Member] | General Partners [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Marginal Percentage Interest in Distributions	25.00%
Above $0.5813 [Member] | Unitholders [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Marginal Percentage Interest in Distributions	50.00%
Above $0.5813 [Member] | General Partners [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Marginal Percentage Interest in Distributions	50.00%

XML

Partners' Capital and Distributions - Percentage of Incentive Distribution Rights to Partnership's Unitholders and General Partner (Parenthetical) (Detail)	3 Months Ended
	Mar. 31, 2016 $ / shares
Minimum [Member] | Above $0.3875 up to $0.4456 [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Cash distribution paid, per unit	$ 0.3875
Minimum [Member] | Above $0.4456 up to $0.4844 [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Cash distribution paid, per unit	0.4456
Minimum [Member] | Above $0.4844 up to $0.5813 [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Cash distribution paid, per unit	0.4844
Minimum [Member] | Above $0.5813 [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Cash distribution paid, per unit	0.5813
Maximum [Member] | Above $0.3875 up to $0.4456 [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Cash distribution paid, per unit	0.4456
Maximum [Member] | Above $0.4456 up to $0.4844 [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Cash distribution paid, per unit	0.4844
Maximum [Member] | Above $0.4844 up to $0.5813 [Member]
Incentive Distribution Made To Managing Member Or General Partner [Line Items]
Cash distribution paid, per unit	$ 0.5813

XML

Equity Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Jul. 31, 2014	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Nov. 30, 2013
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized unit-based compensation expense		$ 13,000
Payments to phantom unit holders		$ 231
Phantom Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares granted under the plan	939,500
Phantom Units | Directors Grant
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period		3 years
Unit-based compensation		$ 200	$ 200
Unrecognized unit-based compensation expense		1,100
Employee Equity Grants
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unit-based compensation		800	1,300
2015 Equity Grants
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Aggregate grant date fair value			$ 900
Vesting period			3 years
Unit-based compensation		100	$ 100
Unrecognized unit-based compensation expense		$ 500
Employee equity grants vested percentage		33.33%
2015 Performance Grants
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Aggregate grant date fair value				$ 1,000
Unrecognized unit-based compensation expense		$ 800
2015 Performance Grants | Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unit-based compensation		100
2016 Performance Grants
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Aggregate grant date fair value		$ 900
Vesting period		3 years
Unit-based compensation		$ 100
Unrecognized unit-based compensation expense		900
2013 Long-Term Incentive Plan | Other Non-current Liabilities [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unit-based compensation, liabilities		100
2013 Long-Term Incentive Plan | Selling, general and administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unit-based compensation		1,100	1,500
2013 Long-Term Incentive Plan | Employee Equity Grants Tranche One
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Employee equity grants vest percentage	25.00%
2013 Long-Term Incentive Plan | Employee Equity Grants Tranche Two
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Employee equity grants vest percentage	25.00%
Cash distribution received, per unit	$ 0.4457
2013 Long-Term Incentive Plan | Employee Equity Grants Tranche Three
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Employee equity grants vest percentage	25.00%
Cash distribution received, per unit	$ 0.4845
2013 Long-Term Incentive Plan | Employee Equity Grants Tranche Four
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Employee equity grants vest percentage	25.00%
Cash distribution received, per unit	$ 0.5814
2013 Long-Term Incentive Plan | Phantom Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Payments to phantom unit holders		400	$ 400
2013 Long-Term Incentive Plan | Phantom Units | Directors Grant
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares granted under the plan	100,000
Aggregate grant date fair value	$ 2,500
2013 Long-Term Incentive Plan | Phantom Units Which Will Be Settled In Cash | Minimum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares granted under the plan	1,000
2013 Long-Term Incentive Plan | Employee Equity Grants
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Aggregate grant date fair value	$ 21,200
Number of shares granted under the plan	832,000
2013 Long-Term Incentive Plan | Employee Liability Grants
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares granted under the plan	7,500
Aggregate grant date fair value	$ 200
Unit-based compensation		100
Unrecognized unit-based compensation expense		$ 100
2013 Long-Term Incentive Plan | 2015 Equity Grants
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares granted under the plan			45,668
2013 Long-Term Incentive Plan | 2015 Performance Grants
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares granted under the plan				57,100
2013 Long-Term Incentive Plan | 2016 Performance Grants
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares granted under the plan		80,500
2013 Long-Term Incentive Plan | Employee Equity Grants And Consultants
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Payments to phantom unit holders		$ 200	$ 200
2013 Long-Term Incentive Plan | Employee Equity Grants And Consultants | Selling, general and administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unit-based compensation		$ 200	$ 200
Common Units [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized					2,000,000

XML

Equity Plans - Summary of Phantom Units Granted (Detail)	3 Months Ended
	Mar. 31, 2016 $ / shares shares
Phantom Share Units PSUs Equity Award [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Phantom Units, Beginning Balance | shares	985,272
Number of Phantom Units, Granted | shares	80,500
Number of Phantom Units, Vested | shares	(8,551)
Number of Phantom Units, Forfeited | shares	(6,000)
Number of Phantom Units, Ending Balance | shares	1,051,221
Weighted Avg. Grant Date Fair Value, Beginning Balance	$ 24.76
Weighted Avg. Grant Date Fair Value, Granted	11.73
Weighted Avg. Grant Date Fair Value, Vested	19.13
Weighted Avg. Grant Date Fair Value, Forfeited	25.46
Weighted Avg. Grant Date Fair Value, Ending Balance	$ 23.84
Phantom Share Units PSUs Liability Award [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Phantom Units, Beginning Balance | shares	7,200
Number of Phantom Units, Forfeited | shares	(200)
Number of Phantom Units, Ending Balance | shares	7,000
Weighted Avg. Grant Date Fair Value, Beginning Balance	$ 25.46
Weighted Avg. Grant Date Fair Value, Forfeited	25.46
Weighted Avg. Grant Date Fair Value, Ending Balance	25.46
Fair Value, Beginning Balance	10.23
Fair Value, Ending Balance	$ 10.23

XML

Earnings Per Unit - Additional Information (Detail) - shares	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Share [Abstract]
Number of Phantom units, outstanding	0	0

XML

Earnings Per Unit - Schedule of Earnings Per Unit (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Share Basic And Diluted [Line Items]
Net Income attributable to partners' capital	$ 3,116	$ 304
Less: Distribution equivalent rights for unissued units	274	230
Net income available to limited partners	2,842	74
Numerator for basic and diluted earnings per limited partner unit:
Net income allocated to limited partners	2,842	74
Common Units [Member]
Numerator for basic and diluted earnings per limited partner unit:
Net income allocated to limited partners	$ 1,945	$ 39
Denominator for basic and diluted earnings per limited partner unit:
Total basic units outstanding	13,176	6,868
Earnings (loss) per limited partner unit:
Earnings per limited partner unit, basic and diluted	$ 0.15	$ 0.01
Subordinated Units [Member]
Numerator for basic and diluted earnings per limited partner unit:
Net income allocated to limited partners	$ 897	$ 35
Denominator for basic and diluted earnings per limited partner unit:
Total basic units outstanding	6,081	6,081
Earnings (loss) per limited partner unit:
Earnings per limited partner unit, basic and diluted	$ 0.15	$ 0.01

XML

Related Party Transactions - Additional Information (Detail)						1 Months Ended					3 Months Ended		12 Months Ended
	Nov. 30, 2015	Feb. 19, 2015 USD ($) $ / shares shares	May. 31, 2013	May. 31, 2011	Feb. 28, 2010	Mar. 31, 2016 USD ($) bbl	Dec. 31, 2015 USD ($)	Jul. 31, 2015 USD ($) $ / shares shares	May. 31, 2015 USD ($) $ / shares	Jan. 31, 2014	Mar. 31, 2016 USD ($) Terminal shares bbl	Mar. 31, 2015 USD ($)	Dec. 31, 2007 USD ($)	Feb. 28, 2013 bbl
Related Party Transaction [Line Items]
Selling, general and administrative expenses-affiliate											$ 1,322,000	$ 1,076,000
Due to general partner						$ 1,020,000	$ 638,000				1,020,000
Pawnee Terminal Acquisition [Member]
Related Party Transaction [Line Items]
Cash paid for Partnership acquired								$ 44,332,000
Business acquisition, Equity interest issued or issuable, Number of shares | shares								1,745,669
Business combination consideration transferred net of adjustment.								$ 76,600,000
Business acquisition, Equity interest issued, Value								$ 32,300,000
Business acquisition, Share price | $ / shares								$ 18.50
JBBR Acquisition [Member]
Related Party Transaction [Line Items]
Cash paid for Partnership acquired									$ 216,000,000		$ 216,000,000
Proceeds from private placement									$ 72,700,000
JBBR Acquisition [Member] | Private Placement [Member]
Related Party Transaction [Line Items]
Price per unit of common units | $ / shares									$ 16.59
Lightfoot Capital Partners LP And Lightfoot Capital Partners GPLLC [Member]
Related Party Transaction [Line Items]
Registration rights agreement											In connection with the IPO, the Partnership entered into a registration rights agreement with the Sponsor. Pursuant to the registration rights agreement, the Partnership is required to file, upon request of the Sponsor, a registration statement to register the common units issued to the Sponsor and the common units issuable upon the conversion of the subordinated units held by the Sponsor. In addition, the registration rights agreement gives the Sponsor piggyback registration rights under certain circumstances.
Limited partners capital units percentage											29.90%
Percentage of interest in general partner											100.00%
G E Energy Financial Services | JBBR Acquisition [Member]
Related Party Transaction [Line Items]
Business combination, equity interest in acquire percentage						40.00%					40.00%
Arc Logistics Partners LP [Member] | JBBR Acquisition [Member]
Related Party Transaction [Line Items]
Business combination, equity interest in acquire percentage						60.00%					60.00%
Arc Logistics GP LLC [Member]
Related Party Transaction [Line Items]
Selling, general and administrative expenses-affiliate											$ 1,300,000	1,100,000
Due to general partner						$ 1,100,000	$ 600,000				1,100,000
Gulf Coast Asphalt Company, L.L.C. [Member]
Related Party Transaction [Line Items]
Partnership's Credit Facility						$ 20,000,000					$ 20,000,000
Number of barrels of storage tanks | bbl														150,000
Initial term of agreement											5 years
Center Oil [Member]
Related Party Transaction [Line Items]
Cash paid for Partnership acquired													$ 35,000,000
Number of terminals acquired | Terminal											7
Center Oil [Member] | Limited Partners [Member]
Related Party Transaction [Line Items]
Partnership units issued on acquisition | shares											750,000
Written notification for termination of agreement											In December 2015, the Partnership extended the term of the storage and throughput agreement with Center Oil from June 2017 to June 2020. The agreement will automatically renew for a period of three years at the expiration of the current term at an inflation adjusted rate (subject to a cap), as determined in accordance with the agreement, unless a party delivers a written notice of its election to terminate the storage and throughput agreement at least eighteen months prior to the expiration of the current term.
Agreement extension, month and year	2017-06						2020-06
Agreement renewal term			1 year								3 years
Valuation percentage of assets at the time of acquisition					50.00%
Agreements extended month and year					2017-05
Agreement renewal, month and year				2015-05
United Energy Trading [Member]
Related Party Transaction [Line Items]
Initial term of agreement											5 years
United Energy Trading [Member] | Natural Gas Supply Agreement [Member]
Related Party Transaction [Line Items]
Agreement expiration date						Mar. 31, 2017
Arc Terminals Holdings [Member]
Related Party Transaction [Line Items]
Lease agreement rent expenses											$ 230,000
Lease agreement rent expenses for future period											$ 417,522
Rent amount increase effective date											2014-08
Number of barrels per day of oil equivalent | bbl						12,500					12,500
Percentage of variable rate on base rent											30.00%
Operating lease agreement expense											$ 1,600,000	$ 1,600,000
Arc Terminals Holdings [Member] | Portland Terminal [Member]
Related Party Transaction [Line Items]
Maximum purchase price under the lease purchase option											$ 65,700,000
Lease agreement notice period											So long as Arc Terminals Holdings is not in default under the Portland Lease Agreement, it shall have the right to purchase the Portland Terminal at the end of the third year of the Portland Lease Agreement and at the end of any month thereafter by delivery of 90 days’ notice (“Purchase Option”). The purchase price shall be the greater of (i) nine times the total of base rent and variable rent for the 12 months immediately preceding the notice and (ii) $65.7 million.
Operating lease termination notice											12 months
Arc Terminals Holdings [Member] | Fifth Anniversary [Member]
Related Party Transaction [Line Items]
Operating lease termination fee											$ 4,000,000
Arc Terminals Holdings [Member] | Tenth Anniversary [Member]
Related Party Transaction [Line Items]
Operating lease termination fee											$ 6,000,000
Arc Terminals Holdings [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Percentage of change in the consumer price index											2.00%
Arc Terminals Holdings [Member] | LCP Oregon Holdings LLC [Member]
Related Party Transaction [Line Items]
Description of increase in base rent											increased each month starting with the month of August 2014 by a factor of 0.00958 of the specified construction costs incurred by LCP Oregon Holdings LLC (“LCP Oregon”) at the Portland Terminal
Arc Terminals Holdings [Member] | CorEnergy [Member]
Related Party Transaction [Line Items]
Operating lease, additional spending											$ 10,000,000
Operating leases, Rent expense increased											95,800
Arc Terminals Holdings [Member] | Pawnee Terminal Acquisition [Member]
Related Party Transaction [Line Items]
Cash paid for Partnership acquired								$ 44,300,000
Business acquisition, Equity interest issued or issuable, Number of shares | shares								1,745,669
Business combination consideration transferred net of adjustment.								$ 76,600,000
Business acquisition, Equity interest issued, Value								$ 32,300,000
Business acquisition, Share price | $ / shares								$ 18.50
Arc Terminals Holdings [Member] | Lightfoot Capital Partners LP [Member]
Related Party Transaction [Line Items]
Percentage of investment in subsidiary										6.60%
Arc Terminals Holdings [Member] | Lightfoot Capital Partners GP LLC [Member]
Related Party Transaction [Line Items]
Percentage of investment in subsidiary										1.50%
Initial term of lease agreement										15 years
Additional term for lease agreement										5 years
Joliet Holding [Member]
Related Party Transaction [Line Items]
Fees and reimbursements											$ 200,000
Investor [Member]
Related Party Transaction [Line Items]
Sale of common units in private placement, shares | shares		4,520,795
Proceeds from private placement		$ 72,700,000
Investor [Member] | MTP Energy Master Fund Ltd [Member]
Related Party Transaction [Line Items]
Sale of common units in private placement, shares | shares		572,635
Issuance of common units, net of offering costs		$ 9,500,000
Investor [Member] | Private Placement [Member]
Related Party Transaction [Line Items]
Price per unit of common units | $ / shares		$ 16.59
Private placement transaction due date		May 14, 2015

XML

Related Party Transactions - Schedule of Revenue from Related Parties (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Related Party Transaction [Line Items]
Related parties	$ 3,483	$ 2,178
Center Oil [Member]
Related Party Transaction [Line Items]
Related parties	1,460	1,728
United Energy Trading [Member]
Related Party Transaction [Line Items]
Related parties	1,575
Gulf Coast Asphalt Company, L.L.C. [Member]
Related Party Transaction [Line Items]
Related parties	$ 448	$ 450

XML

Related Party Transactions - Schedule of Accounts Receivable due from Related Parties (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Related Party Transaction [Line Items]
Due from related parties	$ 1,337	$ 1,532
Center Oil [Member]
Related Party Transaction [Line Items]
Due from related parties	507	564
United Energy Trading [Member]
Related Party Transaction [Line Items]
Due from related parties	527	528
Gulf Coast Asphalt Company, L.L.C. [Member]
Related Party Transaction [Line Items]
Due from related parties	$ 303	$ 440

XML

Major Customers - Additional Information (Detail) - Customer Concentration Risk - Sales Revenue, Net [Member]	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Entity Wide Revenue Major Customer [Line Items]
Total percentages of revenue and receivables associated with significant customers	52.00%	40.00%
Minimum [Member]
Entity Wide Revenue Major Customer [Line Items]
Total percentages of revenue and receivables associated with significant customers	10.00%

XML

Major Customers - Schedules of Percentages of Revenues and Receivables Associated with Significant Customers (Detail) - Customer Concentration Risk	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Sales Revenue, Net [Member]
Entity Wide Revenue Major Customer [Line Items]
Total percentages of revenue and receivables associated with significant customers	52.00%	40.00%
Sales Revenue, Net [Member] | Customer A [Member]
Entity Wide Revenue Major Customer [Line Items]
Total percentages of revenue and receivables associated with significant customers	33.00%	2.00%
Sales Revenue, Net [Member] | Customer B [Member]
Entity Wide Revenue Major Customer [Line Items]
Total percentages of revenue and receivables associated with significant customers	13.00%	25.00%
Sales Revenue, Net [Member] | Customer C [Member]
Entity Wide Revenue Major Customer [Line Items]
Total percentages of revenue and receivables associated with significant customers	6.00%	13.00%
Receivables [Member]
Entity Wide Revenue Major Customer [Line Items]
Total percentages of revenue and receivables associated with significant customers	55.00%		48.00%
Receivables [Member] | Customer A [Member]
Entity Wide Revenue Major Customer [Line Items]
Total percentages of revenue and receivables associated with significant customers	29.00%		30.00%
Receivables [Member] | Customer B [Member]
Entity Wide Revenue Major Customer [Line Items]
Total percentages of revenue and receivables associated with significant customers	21.00%		12.00%
Receivables [Member] | Customer C [Member]
Entity Wide Revenue Major Customer [Line Items]
Total percentages of revenue and receivables associated with significant customers	5.00%		6.00%

XML

Commitments and Contingencies - Additional Information (Detail)	1 Months Ended		3 Months Ended		12 Months Ended	13 Months Ended
	Feb. 29, 2016 USD ($)	Jul. 31, 2015 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($) Customer	Dec. 31, 2015 USD ($)	Mar. 31, 2016 USD ($)	May. 31, 2015 USD ($)
Operating Leased Assets [Line Items]
Accrual for loss contingencies				$ 0	$ 0	$ 0
Earn-out liability recognized				$ 18,489,000	18,830,000	18,489,000
Fine amount for storage without permit limit (per day)				298
Accrued fine amount for storage without permit limit				$ 100,000		100,000
Settlement agreement aggregate amount payable	$ 2,000,000				$ 2,000,000
Settlement agreement period	3 years
Reduction in settlement payment	$ 500,000
Settlement agreement date	Jan. 01, 2018
Settlement agreement amount paid				300,000
Maximum [Member]
Operating Leased Assets [Line Items]
Percentage of revenue represents settlement of terminal services agreement					1.00%
JBBR Acquisition [Member]
Operating Leased Assets [Line Items]
Earn-out payments				27,000,000		27,000,000	$ 27,000,000
Earn-out liability recognized				18,489,000	$ 18,830,000	18,489,000	$ 19,700,000
Business acquisition earn-out payment				1,200,000		1,200,000
Pawnee Terminal Acquisition [Member]
Operating Leased Assets [Line Items]
Estimated remaining construction cost		$ 11,000,000
Pawnee Terminal Acquisition [Member] | Scenario Forecast [Member]
Operating Leased Assets [Line Items]
Estimated remaining construction cost			$ 11,000,000
Gulf Coast Asphalt Company, L.L.C. [Member]
Operating Leased Assets [Line Items]
Earn-out payments				5,000,000		5,000,000
Earn-out payments, low				$ 0		$ 0
Number of customers | Customer				1

XML

Commitments and Contingencies - Schedule of Future Non-Cancelable Commitments Related to Certain Contractual Obligations (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Commitments And Contingencies Disclosure [Abstract]
Long-term debt obligations, Total	$ 240,313	$ 226,063
Long-term debt obligations, 2018	240,313
Operating lease obligations, Total	22,235
Operating lease obligations, 2016	4,868
Operating lease obligations, 2017	6,357
Operating lease obligations, 2018	6,347
Operating lease obligations, 2019	4,663
Earn-out obligations, Total	18,489
Earn-out obligations, 2016	1,028
Earn-out obligations, 2017	1,369
Earn-out obligations, 2018	1,369
Earn-out obligations, 2019	1,369
Earn-out obligations, 2020	1,369
Earn-out obligations, thereafter	11,985
Settlement obligations, Total	1,750
Settlement obligations, 2016	750
Settlement obligations, 2017	500
Settlement obligations, 2018	500
Contractual obligations, Total	282,787
Contractual obligations, 2016	5,896
Contractual obligations, 2017	7,726
Contractual obligations, 2018	248,029
Contractual obligations, 2019	6,032
Contractual obligations, 2020	1,369
Contractual obligations, thereafter	$ 11,985

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Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015
Subsequent Event [Line Items]
Cash distribution, total amount		$ 8,475
Total distribution per unit		$ 0.4400	$ 0.4400	$ 0.4400	$ 0.4250	$ 0.4100
Change in cash distribution percentage						7.30%
Cash distribution payment date		May 13, 2016	Feb. 12, 2016	Nov. 13, 2015	Aug. 14, 2015	May 15, 2015
Cash distribution date of record		May 09, 2016	Feb. 08, 2016	Nov. 09, 2015	Aug. 10, 2015	May 11, 2015
Quarterly Distribution [Member]
Subsequent Event [Line Items]
Total distribution per unit						$ 0.41
Annual Distribution [Member]
Subsequent Event [Line Items]
Total distribution per unit						$ 1.64
Subsequent Event [Member]
Subsequent Event [Line Items]
Cash distribution, declaration month and year	2016-04
Cash distribution, total amount	$ 8,500
Cash distribution payment date	May 13, 2016
Cash distribution date of record	May 09, 2016
Subsequent Event [Member] | Quarterly Distribution [Member]
Subsequent Event [Line Items]
Total distribution per unit	$ 0.44
Subsequent Event [Member] | Annual Distribution [Member]
Subsequent Event [Line Items]
Total distribution per unit	$ 1.76