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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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45-2637964
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Title of each class
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Name of each exchange on which registered
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Common Units Representing Limited Partner Interests
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New York Stock Exchange
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
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(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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•
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Acquire additional terminals and marketing and distribution businesses that are accretive
. We intend to grow our asset and customer base by acquiring additional marine and inland terminals (both refined products and materials handling) within and adjacent to the geographic markets we currently serve. We also intend to acquire additional refined products and natural gas marketing businesses that have demonstrated an ability to generate cash flow and that will enable us to leverage our existing investment in our business and customer service systems to further increase and stabilize our own cash flow.
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•
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Increase our business with existing customers.
We intend to increase the net sales and margin we realize from customers we currently serve by expanding the range of products and services we provide and by developing additional ways to address our customers’ needs for certainty of supply, reduced commodity price risk and high-quality customer service.
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•
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Limit our exposure to commodity price volatility and credit risk.
We take title to the products we sell in our refined products and natural gas segments, while our materials handling business is operated predominantly under fixed-fee, multi-year contracts. We will continue to manage our exposure to commodity prices by seeking to maintain a balanced position in our purchases and sales through the use of derivatives and forward contracts. In addition to managing commodity price volatility, we will continue to manage our counterparty risk by maintaining a conservative credit management processes.
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•
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Maintain our operational excellence.
We intend to maintain our long history of safe, cost-effective operations and environmental stewardship by applying new technologies, investing in the maintenance of our assets and providing training programs for our personnel. We have a Health, Safety and Environmental department primarily devoted to safety matters and reducing operational and environmental risks. We will work diligently to meet or exceed applicable safety and environmental regulations and we will continue to enhance our safety monitoring function as our business grows and operating conditions change.
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•
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Competition from other companies that sell refined products, natural gas and/or renewable fuels in the Northeast United States and eastern Canada;
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•
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Competition from other companies in the materials handling business;
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•
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Demand for refined products, natural gas and our materials handling services in the markets we serve;
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•
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Absolute price levels, and volatility of prices, of refined products and natural gas in both the spot and futures markets;
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•
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Seasonal variation in temperature, which affects demand for natural gas and refined products such as heating oil and residual fuel oil (to the extent that it is used for space heating); and
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•
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Prevailing economic conditions.
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•
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The level of maintenance capital expenditures we make;
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•
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The level of operating and general and administrative expenses, including reimbursements to our General Partner and certain of its affiliates for services provided to us;
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•
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Fluctuations or changes in federal, state, local and foreign tax rates, including Canadian income and withholding tax rates;
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•
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The restrictions contained in our credit agreement, including borrowing base limitations and limitations on distributions;
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•
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Our debt service requirements;
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•
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The cost of acquisitions we make, if any;
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•
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Fluctuations in our working capital needs;
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•
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Our ability to access capital markets and to borrow under our credit agreement to make distributions to our unitholders; and
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•
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The amount of cash reserves established by our General Partner, if any.
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•
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Recession or other adverse economic conditions;
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•
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Unseasonably warm temperatures which would negatively impact demand for natural gas and refined products;
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•
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High prices caused by an increase in the market price of refined products or natural gas, higher fuel taxes or other governmental or regulatory actions that increase, directly or indirectly, the cost of gasoline or other refined products or natural gas;
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•
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Increased conservation, technological advances and the availability of alternative energy, whether as a result of industry changes, governmental or regulatory actions or otherwise. For example, energy efficiency measures, including the installation of improved insulation and the development of more efficient furnaces and other heating devices and increased use of fuel efficient motor vehicles, have adversely affected demand for some of our products, particularly home heating oil and residual fuel oil; and,
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•
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Conversion from consumption of heating oil or residual fuel oil to natural gas as such switching and conversions could reduce our sales of heating oil and residual fuel oil.
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•
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Make cash distributions;
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•
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Incur indebtedness;
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•
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Create liens;
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•
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Make investments;
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•
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Engage in transactions with affiliates;
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•
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Make any material change to the nature of our business;
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•
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Dispose of assets; and
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•
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Merge with another company or sell all or substantially all of our assets.
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•
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Our ability to obtain additional financing, if necessary, for working capital, capital expenditures or other purposes may be impaired, or such financing may not be available on favorable terms;
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•
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Our funds available for operations, future business opportunities and distributions to unitholders will be reduced by that portion of our cash flow required to make required debt service payments;
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•
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We may be more vulnerable to competitive pressures or a downturn in our business or the economy generally; and
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•
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Our flexibility in responding to changing business and economic conditions may be limited.
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•
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Mistaken assumptions about volumes, cash flows, net sales and costs, including synergies;
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•
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An inability to successfully integrate the businesses we acquire;
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•
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An inability to hire, train or retain qualified personnel to manage and operate our newly acquired assets;
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•
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The assumption of unknown liabilities;
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•
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Limitations on rights to indemnity from the seller;
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•
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Mistaken assumptions about the overall costs of equity or debt used to finance an acquisition;
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•
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The diversion of management’s and employees’ attention from other business concerns;
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•
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Unforeseen difficulties operating in new product areas or new geographic areas; and
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•
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Customer or key employee losses at the acquired businesses.
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•
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Damage to storage facilities and other assets caused by tornadoes, hurricanes, floods, earthquakes, fires, explosions, extreme weather conditions and other natural disasters;
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•
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Acts or threats of terrorism;
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•
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Unanticipated equipment and mechanical failures at our facilities;
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•
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Disruptions in supply infrastructure or logistics and other events beyond our control;
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•
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Operator error; and
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•
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Environmental pollution or other environmental issues.
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•
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Our General Partner is allowed to take into account the interests of parties other than us, such as its affiliates, including Axel Johnson, in resolving conflicts of interest, which has the effect of limiting its duty to our unitholders.
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•
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Affiliates of our General Partner, including Axel Johnson and Sprague Holdings, may engage in competition with us.
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•
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Neither our partnership agreement nor any other agreement requires Axel Johnson or Sprague Holdings to pursue a business strategy that favors us, Axel Johnson’s directors and officers have a fiduciary duty to make decisions in the best interests of the stockholder’s of Axel Johnson.
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•
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Some officers of our General Partner who provide services to us devote time to affiliates of our General Partner.
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•
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Our partnership agreement limits the liability of and reduces the duties owed by our General Partner to us and our common unitholders, and also restricts the remedies available to our unitholders for actions that, without the limitations, might constitute breaches of fiduciary duty.
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•
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Except in limited circumstances, our General Partner has the power and authority to conduct our business without unitholder approval.
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•
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Our General Partner determines the amount and timing of asset purchases and sales, borrowings, issuances of additional partnership securities and the creation, reductions or increases of cash reserves, each of which can affect the amount of cash that is available for distribution to our unitholders, including distributions on our subordinated units, and to the holders of the incentive distribution rights, as well as the ability of the subordinated units to convert to common units.
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•
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Our General Partner determines the amount and timing of any capital expenditures and whether a capital expenditure is classified as a maintenance capital expenditure, which reduces distributable cash flow. Such determination can affect the amount of distributable cash flow, including distributions on our subordinated units, and to the holders of the incentive distribution rights, as well as the ability of the subordinated units to convert to common units. Our partnership agreement does not limit the amount of maintenance capital expenditures that our General Partner can cause us to make.
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•
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Our partnership agreement and the services agreement allow our General Partner to determine, in good faith, the expenses that are allocable to us. Our partnership agreement and the services agreement do not limit the amount of expenses for which our General Partner and its affiliates may be reimbursed. These expenses include salary, bonus, incentive compensation and other amounts paid to persons, including affiliates of our General Partner, who perform services for us or on our behalf.
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•
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Our General Partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make a distribution on the subordinated units, to make incentive distributions or to accelerate the expiration of the subordination period.
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•
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Our partnership agreement permits us to distribute up to $25.0 million as distributable cash flow, even if it is generated from sources that would otherwise constitute capital surplus, and this cash may be used to fund distributions on our subordinated units or the incentive distribution rights.
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•
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Our partnership agreement does not restrict our General Partner from entering into additional contractual arrangements with any of its affiliates on our behalf.
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•
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Our General Partner intends to limit its liability regarding our contractual and other obligations.
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•
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Our General Partner may exercise its right to call and purchase all of the common units not owned by it and its affiliates if it and its affiliates own more than 80% of all outstanding common units.
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•
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Our General Partner controls the enforcement of obligations owed to us by our General Partner and its affiliates.
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•
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Our General Partner decides whether to retain separate counsel, accountants or others to perform services for us.
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•
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Sprague Holdings, or any transferee holding a majority of the incentive distribution rights, may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to the incentive distribution rights without the approval of the conflicts committee of the board of directors of our General Partner or unitholders. This election may result in lower distributions to common unitholders in certain situations.
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•
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How to allocate business opportunities among us and its other affiliates;
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•
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Whether to exercise its limited call right;
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•
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How to exercise its voting rights with respect to any units it owns;
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•
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Whether to exercise its registration rights with respect to any units it owns; and
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•
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Whether to consent to any merger or consolidation of the partnership or amendment to the partnership agreement.
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•
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Provides that whenever our General Partner makes a determination or takes, or declines to take, any other action in its capacity as our General Partner, our General Partner is required to make such determination, or take or decline to take such other action, in good faith and will not be subject to any other or different standard imposed by our partnership agreement, Delaware law or any other law, rule or regulation, or at equity;
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•
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Provides that a determination, other action or failure to act by our General Partner, the board of directors of our General Partner or any committee thereof (including the conflicts committee) will be deemed to be in good faith unless our General Partner, the board of directors of our General Partner or any committee thereof believed such determination, other action or failure to act was adverse to the interests of the partnership;
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•
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Provides that our General Partner will not have any liability to us or our unitholders for decisions made in its capacity as a General Partner so long as it acted in good faith;
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•
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Provides that our General Partner and its officers and directors will not be liable for monetary damages to us or our limited partners resulting from any act or omission unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our General Partner or its officers and directors, as the case may be, acted in bad faith or, in the case of a criminal matter, acted with knowledge that the conduct was criminal; and
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•
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Provides that our General Partner will not be in breach of its obligations under the partnership agreement or its duties to us or our limited partners if a transaction with an affiliate or the resolution of a conflict of interest is:
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(1)
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Approved by the conflicts committee of the board of directors of our General Partner, although our General Partner is not obligated to seek such approval; or
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(2)
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Approved by the vote of a majority of the outstanding common units, excluding any common units owned by our General Partner and its affiliates.
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•
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Our unitholders’ proportionate ownership interest in us will decrease;
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•
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The amount of distributable cash flow on each unit may decrease;
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•
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Because a lower percentage of total outstanding units will be subordinated units, the risk that a shortfall in the payment of the minimum quarterly distribution borne by our common unitholders will increase;
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•
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The ratio of taxable income to distributions may increase;
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•
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The relative voting strength of each previously outstanding unit may be diminished; and
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•
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The market price of our common units may decline.
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•
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We were conducting business in a state but had not complied with that particular state’s partnership statute; or
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•
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Your right to act with other unitholders to remove or replace the general partner, to approve some amendments to our partnership agreement or to take other actions under our partnership agreement constitutes “control” of our business.
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Liquids Storage Terminal
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Number of
Storage
Tanks (1)
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Storage Tank
Capacity
(Bbls) (1)
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Principal Products
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Sorel-Tracy Quebec, Canada
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27
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3,282,600
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refined products; asphalt, crude oil
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Searsport, ME
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17
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1,140,700
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refined products; caustic soda; asphalt
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South Portland, ME
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26
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1,122,100
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refined products; asphalt; clay slurry
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Bridgeport, CT
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11
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1,120,600
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refined products
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Albany, NY
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11
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1,104,500
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refined products
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East Providence, RI (2)
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9
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1,004,600
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refined products
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Newington, NH: River Road
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28
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941,800
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refined products; tallow
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Bronx, NY
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17
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907,500
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refined products; asphalt
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Newington, NH: Avery Lane
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12
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722,000
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refined products; asphalt
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New Haven, CT (3)
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15
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657,700
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refined products
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Quincy, MA
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9
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657,000
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refined products
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Providence, RI
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4
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484,000
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refined products; asphalt
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Everett, MA
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4
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317,600
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asphalt
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Quincy, MA: TRT (4)
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4
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304,200
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refined products
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Oswego, NY
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3
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209,800
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asphalt
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New Bedford, MA (5)
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2
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85,900
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refined products
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Mount Vernon, NY
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7
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72,100
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refined products
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Stamford, CT
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3
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46,600
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refined products
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Total
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209
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14,181,300
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Dry Storage Terminal
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Number of
Storage Pads
and Warehouses
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Storage
Capacity
(Square Feet)
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Principal Products
and Materials
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Newington, NH: River Road (6)
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3 pads
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390,000
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salt; gypsum
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Searsport, ME
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2 warehouses;
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90,000
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break bulk; salt; petroleum coke;
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15 pads
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857,000
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heavy lift
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Portland, ME (7)
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7 warehouses;
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215,000
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break bulk; coal;
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3 pads
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95,000
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salt
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South Portland, ME
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3 pads
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230,000
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salt; coal
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Providence, RI
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1 pad
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75,000
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salt
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9 warehouses;
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Total
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25 pads
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1,952,000
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(1)
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We also have an aggregate of
2.0 million
barrels of additional storage capacity attributable to
45
storage tanks not currently in service. These tanks are not necessary for the operation of our business at current levels. In the event that such additional storage capacity were desired, additional time and capital would be required to bring any of such storage tanks back into service.
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(2)
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These tanks are controlled via a petroleum storage services agreement whose terms include an initial term through April 30, 2019, with mutual rights of termination beginning April 16, 2016.
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(3)
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These tanks are controlled via a storage and thruput agreement with an initial term through July 2, 2019.
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(4)
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Operating assets and real estate are leased from Twin Rivers Technology L.P., an unaffiliated third party.
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(5)
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Operating assets and real estate are leased from Sprague Massachusetts Properties LLC, a wholly-owned subsidiary of Sprague Holdings.
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(6)
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The terminal also has two silos capable of storing a total of 26,000 tons of cement.
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(7)
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Real estate and two storage buildings are leased from Merrill Industries Inc., an unaffiliated third party, and the balance of the assets are owned by us.
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Sales Price per
Common Unit
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Quarterly
Cash
Distribution
per Unit
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Record Date
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Distribution Date
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||||||||
Quarter Ended
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High
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Low
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2014:
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March 31, 2014
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$
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20.75
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$
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17.68
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$
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0.4125
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May 9, 2014
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May 15, 2014
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June 30, 2014
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$
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27.30
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$
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19.05
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|
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$
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0.4275
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August 8, 2014
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August 14, 2014
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September 30, 2014
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$
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26.93
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$
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21.29
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|
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$
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0.4425
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November 10, 2014
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November 14, 2014
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December 31, 2014
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$
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27.02
|
|
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$
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19.00
|
|
|
$
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0.4575
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February 9, 2015
|
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February 13, 2015
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2015:
|
|
|
|
|
|
|
|
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||||||
March 31, 2015
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$
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26.63
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|
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$
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21.08
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$
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0.4725
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|
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May 11, 2015
|
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May 15, 2015
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June 30, 2015
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$
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28.90
|
|
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$
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24.51
|
|
|
$
|
0.4875
|
|
|
August 10, 2015
|
|
August 14, 2015
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September 30, 2015
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$
|
28.10
|
|
|
$
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17.15
|
|
|
$
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0.5025
|
|
|
November 10, 2015
|
|
November 13, 2015
|
December 31, 2015
|
$
|
26.00
|
|
|
$
|
18.62
|
|
|
$
|
0.5175
|
|
|
February 9, 2016
|
|
February 12, 2016
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•
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Our cash distribution policy may be affected by restrictions on distributions under our credit agreement as well as by restrictions in future debt agreements that we enter into. Specifically, our credit agreement contains financial tests and covenants that we must satisfy. Should we be unable to satisfy these restrictions or if we are otherwise in default under our credit agreement, we may be prohibited from making cash distributions to you notwithstanding our stated cash distribution policy.
|
•
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Our General Partner will have the authority to establish cash reserves for the prudent conduct of our business and for future cash distributions to our unitholders, and the establishment of or increase in those reserves could result
|
•
|
Under Section 17-607 of the Delaware Act we may not make a distribution if the distribution would cause our liabilities to exceed the fair value of our assets.
|
•
|
We may lack sufficient cash to make distributions to our unitholders due to a number of operational, commercial and other factors or increases in our operating costs, general and administrative expenses, principal and interest payments on our outstanding debt and working capital requirements.
|
•
|
If we make distributions out of capital surplus, as opposed to distributable cash flow, any such distributions would constitute a return of capital and would result in a reduction in the minimum quarterly distribution and the target distribution levels. We do not anticipate that we will make any distributions from capital surplus.
|
•
|
Our ability to make distributions to our unitholders depends on the performance of our subsidiaries and their ability to distribute cash to us. The ability of our subsidiaries to make distributions to us may be restricted by, among other things, the provisions of future indebtedness, applicable state partnership, limited liability company and corporate laws and other laws and regulations.
|
|
Years Ended December 31,
|
||||||||||||||||||
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2015
|
|
2014
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|
2013
|
|
2012
|
|
2011
|
||||||||||
|
|
|
|
|
|
|
Predecessor
|
|
Predecessor
|
||||||||||
|
(in thousands, except unit data and operating data)
|
||||||||||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
3,481,914
|
|
|
$
|
5,069,762
|
|
|
$
|
4,683,349
|
|
|
$
|
4,043,907
|
|
|
$
|
3,797,427
|
|
Cost of products sold (exclusive of depreciation and amortization)
|
3,188,924
|
|
|
4,755,031
|
|
|
4,554,188
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|
|
3,922,352
|
|
|
3,638,717
|
|
|||||
Operating expenses
|
71,468
|
|
|
62,993
|
|
|
53,273
|
|
|
47,054
|
|
|
42,414
|
|
|||||
Selling, general and administrative
|
94,403
|
|
|
76,420
|
|
|
55,210
|
|
|
46,449
|
|
|
46,292
|
|
|||||
Write-off of deferred offering costs (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
8,931
|
|
|
—
|
|
|||||
Depreciation and amortization
|
20,342
|
|
|
17,625
|
|
|
16,515
|
|
|
11,665
|
|
|
10,140
|
|
|||||
Total operating costs and expenses
|
3,375,137
|
|
|
4,912,069
|
|
|
4,679,186
|
|
|
4,036,451
|
|
|
3,737,563
|
|
|||||
Operating income
|
106,777
|
|
|
157,693
|
|
|
4,163
|
|
|
7,456
|
|
|
59,864
|
|
|||||
Gain on acquisition of business
|
—
|
|
|
—
|
|
|
—
|
|
|
1,512
|
|
|
6,016
|
|
|||||
Other income (expense)
|
298
|
|
|
(288
|
)
|
|
568
|
|
|
(160
|
)
|
|
—
|
|
|||||
Interest income
|
456
|
|
|
569
|
|
|
604
|
|
|
534
|
|
|
755
|
|
|||||
Interest expense
|
(27,367
|
)
|
|
(29,651
|
)
|
|
(30,914
|
)
|
|
(23,960
|
)
|
|
(24,049
|
)
|
|||||
Income (loss) before income taxes and equity in net (loss) income of foreign affiliate
|
80,164
|
|
|
128,323
|
|
|
(25,579
|
)
|
|
(14,618
|
)
|
|
42,586
|
|
|||||
Income tax (provision) benefit (2)
|
(1,816
|
)
|
|
(5,509
|
)
|
|
(4,259
|
)
|
|
2,796
|
|
|
(16,636
|
)
|
|||||
Income (loss) before equity in net (loss) income of foreign affiliate
|
78,348
|
|
|
122,814
|
|
|
(29,838
|
)
|
|
(11,822
|
)
|
|
25,950
|
|
|||||
Equity in net (loss) income in foreign affiliate
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,009
|
)
|
|
3,622
|
|
|||||
Net income (loss)
|
$
|
78,348
|
|
|
$
|
122,814
|
|
|
$
|
(29,838
|
)
|
|
$
|
(12,831
|
)
|
|
$
|
29,572
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
||||||||||
Predecessor income through October 29, 2013
|
—
|
|
|
—
|
|
|
(2,734
|
)
|
|
|
|
|
|||||||
(Income) loss attributable to Kildair from October 29, 2013 through December 8, 2014
|
—
|
|
|
(4,080
|
)
|
|
2,338
|
|
|
|
|
|
|||||||
Incentive distributions declared
|
(321
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
|||||||
Limited partners’ interest in net income (loss) (3)
|
$
|
78,027
|
|
|
$
|
118,734
|
|
|
$
|
(30,234
|
)
|
|
|
|
|
||||
Net income (loss) per limited partner common units—basic (3)
|
$
|
3.71
|
|
|
$
|
5.88
|
|
|
$
|
(1.50
|
)
|
|
|
|
|
||||
Net income (loss) per limited partner common units—diluted (3)
|
$
|
3.65
|
|
|
$
|
5.84
|
|
|
$
|
(1.50
|
)
|
|
|
|
|
||||
Weighted average limited partner common units—basic (3)
|
10,975,941
|
|
|
10,131,928
|
|
|
10,071,970
|
|
|
|
|
|
|||||||
Weighted average limited partner common units—diluted (3)
|
11,141,333
|
|
|
10,195,566
|
|
|
10,071,970
|
|
|
|
|
|
|||||||
Distributions declared per common and subordinated units
|
$
|
1.9800
|
|
|
$
|
1.7400
|
|
|
$
|
0.2825
|
|
|
|
|
|
||||
Adjusted EBITDA (4):
|
$
|
110,429
|
|
|
$
|
105,266
|
|
|
$
|
76,158
|
|
|
$
|
49,781
|
|
|
$
|
64,398
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
|
|
|
|
|
|
Predecessor
|
|
Predecessor
|
||||||||||
|
(in thousands, except operating data)
|
||||||||||||||||||
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
287,613
|
|
|
$
|
15,564
|
|
|
$
|
(80,663
|
)
|
|
$
|
163,129
|
|
|
$
|
(43,861
|
)
|
Investing activities
|
(14,565
|
)
|
|
(132,492
|
)
|
|
(46,751
|
)
|
|
(79,693
|
)
|
|
(17,004
|
)
|
|||||
Financing activities
|
(245,965
|
)
|
|
118,390
|
|
|
125,959
|
|
|
(111,560
|
)
|
|
88,882
|
|
|||||
Other Financial and Operating Data (unaudited):
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures (5)
|
$
|
14,899
|
|
|
$
|
18,580
|
|
|
$
|
28,090
|
|
|
$
|
7,293
|
|
|
$
|
7,255
|
|
Normal heating degree days (6)
|
6,749
|
|
|
6,749
|
|
|
6,752
|
|
|
6,787
|
|
|
6,752
|
|
|||||
Actual heating degree days (6)
|
6,707
|
|
|
6,855
|
|
|
6,624
|
|
|
5,803
|
|
|
6,284
|
|
|||||
Variance from normal heating degree days
|
(0.6
|
)%
|
|
1.6
|
%
|
|
(1.9
|
)%
|
|
(14.5
|
)%
|
|
(6.9
|
)%
|
|||||
Variance from prior period actual heating degree days
|
(2.2
|
)%
|
|
3.5
|
%
|
|
14.1
|
%
|
|
(7.7
|
)%
|
|
2.7
|
%
|
|||||
Total refined products volumes sold (barrels)
|
40,099
|
|
|
39,720
|
|
|
35,050
|
|
|
29,806
|
|
|
29,684
|
|
|||||
Variance from refined products volume from prior period
|
1.0
|
%
|
|
13.3
|
%
|
|
17.6
|
%
|
|
0.4
|
%
|
|
(0.4
|
)%
|
|||||
Total natural gas volumes sold (MMBtus)
|
56,894
|
|
|
54,430
|
|
|
51,979
|
|
|
49,417
|
|
|
50,741
|
|
|||||
Variance from natural gas volume from prior period
|
4.5
|
%
|
|
4.7
|
%
|
|
5.2
|
%
|
|
(2.6
|
)%
|
|
(2.4
|
)%
|
|||||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
30,974
|
|
|
$
|
4,080
|
|
|
$
|
2,046
|
|
|
$
|
3,691
|
|
|
$
|
31,829
|
|
Property, plant and equipment, net
|
250,909
|
|
|
250,126
|
|
|
198,476
|
|
|
177,080
|
|
|
110,743
|
|
|||||
Total assets
|
1,000,332
|
|
|
1,339,840
|
|
|
1,090,241
|
|
|
1,054,247
|
|
|
970,050
|
|
|||||
Total debt (including capital lease obligations)
|
621,100
|
|
|
822,307
|
|
|
576,385
|
|
|
555,619
|
|
|
524,377
|
|
|||||
Total liabilities
|
842,847
|
|
|
1,223,946
|
|
|
1,018,948
|
|
|
913,041
|
|
|
791,649
|
|
|||||
Total unitholders’/member’s equity
|
157,485
|
|
|
115,894
|
|
|
71,293
|
|
|
141,206
|
|
|
178,401
|
|
(1)
|
During the year ended December 31, 2012, we delayed the timing of our public offering and, as a result, deferred offering costs of $8.9 million were charged against earnings.
|
(2)
|
Prior to the completion of our initial public offering (the "IPO"), Sprague Energy Corp., which was converted into a limited liability company and renamed Sprague Operating Resources LLC on November 7, 2011, prepared its income tax provision as if it had filed a consolidated U.S. federal income tax return and state tax returns as required. Commencing with the closing of the IPO, the Partnership is treated as a pass through entity for U.S. federal income tax purposes. For pass through entities, all income, expenses, gains, losses and tax credits generated flow through to their owners and, accordingly, do not result in a provision for income taxes in our financial statements. The Partnership’s Canadian entities are subject to Canadian income tax.
|
(3)
|
Calculated based on operations since October 30, 2013, the date of the closing of the IPO. See Note 20 to the Consolidated and Combined Financial Statements included elsewhere in this report for the net income (loss) per limited partner unit calculation.
|
(4)
|
For a discussion of the non-GAAP financial measure adjusted EBITDA, please read “EDITDA and Adjusted EBITDA” below.
|
(5)
|
Includes
$7.8 million
, $8.3 million, $7.7 million, $6.0 million and $5.7 million of maintenance capital expenditures for the years ended
December 31, 2015
,
2014
,
2013
,
2012
and
2011
. Maintenance capital expenditures are capital expenditures made to replace assets or to maintain the long-term operating capacity of our assets.
|
(6)
|
As reported by the NOAA/National Weather Service for the New England oil home heating region over the period 1981-2011.
|
•
|
The financial performance of our assets, operations and return on capital without regard to financing methods, capital structure or historical cost basis;
|
•
|
The ability of our assets to generate cash sufficient to pay interest on our indebtedness and make distributions to our equity holders;
|
•
|
Repeatable operating performance that is not distorted by non-recurring items or market volatility; and
|
•
|
The viability of acquisitions and capital expenditure projects.
|
•
|
EBITDA and adjusted EBITDA do not include interest expense. Because we have borrowed money in order to finance our operations, interest expense is a necessary element of our costs and impacts our ability to generate profits and cash flows. Therefore, any measure that excludes interest expense may have material limitations;
|
•
|
EBITDA and adjusted EBITDA do not include depreciation and amortization expense. Because we use capital assets, depreciation and amortization expense is a necessary element of our costs and ability to generate profits. Therefore, any measure that excludes depreciation and amortization expense may have material limitations;
|
•
|
EBITDA and adjusted EBITDA do not include provision for income taxes. Because the payment of income taxes is a necessary element of our costs, any measure that excludes income tax expense may have material limitations;
|
•
|
EBITDA and adjusted EBITDA do not reflect capital expenditures or future requirements for capital expenditures or contractual commitments;
|
•
|
EBITDA and adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and
|
•
|
EBITDA and adjusted EBITDA do not allow us to analyze the effect of certain recurring and non-recurring items that materially affect our net income or loss.
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
|
|
|
|
|
|
Predecessor
|
|
Predecessor
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Reconciliation of EBITDA to net income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
78,348
|
|
|
$
|
122,814
|
|
|
$
|
(29,838
|
)
|
|
$
|
(12,831
|
)
|
|
$
|
29,572
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
26,911
|
|
|
29,082
|
|
|
30,310
|
|
|
23,426
|
|
|
23,294
|
|
|||||
Tax expense (benefit)
|
1,816
|
|
|
5,509
|
|
|
4,259
|
|
|
(2,796
|
)
|
|
16,636
|
|
|||||
Depreciation and amortization
|
20,342
|
|
|
17,625
|
|
|
16,515
|
|
|
11,665
|
|
|
10,140
|
|
|||||
EBITDA
|
$
|
127,417
|
|
|
$
|
175,030
|
|
|
$
|
21,246
|
|
|
$
|
19,464
|
|
|
$
|
79,642
|
|
Add: unrealized loss (gain) on inventory (1)
|
2,079
|
|
|
(11,070
|
)
|
|
4,188
|
|
|
227
|
|
|
(8,252
|
)
|
|||||
Add: unrealized loss on prepaid forward contract (2)
|
2,628
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Add: unrealized (gain) loss on natural gas transportation contracts (3)
|
(21,695
|
)
|
|
(58,694
|
)
|
|
55,745
|
|
|
17,650
|
|
|
(976
|
)
|
|||||
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain on acquisition of business (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,512
|
)
|
|
(6,016
|
)
|
|||||
Write-off of deferred offering costs (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
8,931
|
|
|
—
|
|
|||||
Bio-fuel excise tax credits (6)
|
—
|
|
|
—
|
|
|
(5,021
|
)
|
|
5,021
|
|
|
—
|
|
|||||
Adjusted EBITDA
|
$
|
110,429
|
|
|
$
|
105,266
|
|
|
$
|
76,158
|
|
|
$
|
49,781
|
|
|
$
|
64,398
|
|
(1)
|
Inventory is valued at the lower of cost or market. The fair value of the derivatives we use to economically hedge our inventory declines or appreciates in value as the value of the underlying inventory appreciates or declines, which creates unrealized hedging losses (gains) with respect to the derivatives that are included in net (loss) income.
|
(2)
|
The unrealized hedging (gain) loss on prepaid forward contracts represents our estimate of the change in fair value of the prepaid forward contracts which are not recorded in net income (loss) until the forward contract is settled in the future (i.e., when the commodity is delivered to the customer). As these contracts are prepaid, they do not qualify as derivatives. The fair value of the derivatives we use to economically hedge our prepaid forward contracts declines or appreciates in value as the value of the underlying forward contract appreciates or declines, which creates unrealized hedging (gains) losses with respect to the derivatives that are included in net income (loss).
|
(3)
|
The unrealized hedging (gain) loss on natural gas transportation contracts represents our estimate of the change in fair value of the natural gas transportation contracts which are not recorded in net (loss) income until the transportation is utilized in the future (i.e., when natural gas is delivered to the customer), as these contracts are executory contracts that do not qualify as derivatives. As the fair value of the natural gas transportation contracts decline or appreciate, the offsetting physical or financial derivative will also appreciate or decline creating unmatched unrealized hedging losses (gains) in net (loss) income.
|
(4)
|
Represents non-cash gains associated with (i) the re-measurement to fair value of our Predecessor’s 50% interest in Kildair in connection with its acquisition of the remaining 50% interest therein in 2012 and, (ii) the acquisition of an oil terminal at below fair value in 2011.
|
(5)
|
During the year ended December 31, 2012, we delayed the filing of our IPO and, as a result, deferred offering costs of $8.9 million were charged against earnings.
|
(6)
|
On January 2, 2013, the U.S. federal government enacted legislation that reinstated an excise tax credit program available for certain of our bio-fuel blending activities. This program had previously expired on December 31, 2011 and was reinstated retroactively to January 1, 2012. During the year ended December 31, 2013, we recorded U.S. federal excise tax credits of $5.0 million related to our bio-fuel blending activities that had occurred during the year ended December 31, 2012. These credits have been recorded as a reduction of cost of products sold (exclusive of depreciation and amortization) and, therefore, resulted in an increase in adjusted gross margin for the year ended December 31, 2013. This adjustment reflects the effect on our adjusted EBITDA had these credits been recorded in the period in which the blending activity took place.
|
•
|
The financial performance of our assets, operations and return on capital without regard to financing methods, capital structure or historical cost basis;
|
•
|
The ability of our assets to generate cash sufficient to pay interest on our indebtedness and make distributions to our equity holders;
|
•
|
Repeatable operating performance that is not distorted by non-recurring items or market volatility; and
|
•
|
The viability of acquisitions and capital expenditure projects.
|
•
|
The economic results of our operations;
|
•
|
The market value of our inventory and natural gas transportation contracts for financial reporting to our lenders, as well as for borrowing base purposes; and
|
•
|
Repeatable operating performance that is not distorted by non-recurring items or market volatility.
|
•
|
Qualifying Income Status and Proposed Regulations.
Pursuant to Internal Revenue Code Section 7704(c)(2), in order to be treated as a partnership for U.S. federal income tax purposes, more than 90 percent of the income of a partnership must be from certain specified sources, including the exploration, development, mining or production, processing, refining, transportation and marketing of minerals and natural resources. On May 5, 2015, the Treasury Department and the IRS issued the Proposed Regulations regarding qualifying income under Section 7704(d)(1)(E) of the Code. The Proposed Regulations provide rules regarding the Qualifying Income Exception. The comment period on the proposed new regulations ended on August 5, 2015. The IRS is in the process of reviewing and analyzing the comments received. During this time, they may consult with industry experts and others to fully understand the matter. However, there is no set time frame for this process and it can take months or years to finalize the proposed new regulations. Although we do not believe, based upon our current operations and language of the proposed regulations, that we will be treated as a corporation for U.S. federal income tax purposes, finalized regulations could modify the amount of our gross income that we are able to treat as qualifying income for purposes of the qualifying income requirement and modify or revoke existing private letter rulings, including ours.
|
•
|
Interest rates could rise
. Since mid-2009, the credit markets have been experiencing near-record lows in interest rates. As the overall economy strengthens, it is expected that monetary policy will tighten, resulting in higher interest rates to counter possible inflation. Increasing interest rates could affect our ability to access the debt capital markets on favorable terms. In addition, interest rates could be higher than current levels, causing our financing costs to increase accordingly. During the 24 months ended
December 31, 2015
, we hedged approximately
22%
of our floating-rate debt with fixed-for-floating interest rate swaps. Although higher interest rates could limit our ability to raise funds in the debt capital markets, we expect to remain competitive with respect to acquisitions and capital projects, as our competitors would face similar circumstances. As with other yield-oriented securities, our unit price is impacted by the level of our cash distributions and implied distribution yield. The distribution yield is often used by investors to compare and rank related yield-oriented securities for investment decision-making purposes. Therefore, changes in interest rates, either positive or negative, may affect the yield requirements of investors who invest in our common units, and a rising interest rate environment could have an adverse impact on our unit price and our ability to issue additional equity to make acquisitions, reduce debt or for other purposes.
|
•
|
New, stricter environmental laws and regulations are increasing the compliance cost of terminal operations, which could adversely affect our results of operations and financial condition
.
Our operations are subject to federal, state, local and foreign laws and regulations regulating product quality specifications, emissions in the air, discharges to land and water, and the generation, handling, treatment, and disposal of hazardous waste and other materials. The trend in regulation is towards additional restrictions and limitations on activities that may affect the environment. Compliance with laws and regulations may increase our overall cost of business including our capital cost to maintain and upgrade equipment and facilities.
|
•
|
Growth in exploration and production of shale gas has contributed to a weakness of domestic natural gas prices in the
Northeast United States,
leading to expanded use of natural gas in our marketing area.
Natural gas usage in the Northeast United States has grown substantially, as the supplies of gas from shale formations have grown both in the region (
e.g.
, Marcellus Shale) and the other parts of the United States. Further expansion of domestic natural gas supplies is expected, with consumption in the Northeast United States also expected to grow as infrastructure developments continue and could reduce consumption of other fuels.
|
•
|
Absolute price increase or decreases can impact demand and credit risk.
Commodity prices in both our refined products and natural gas segments can vary sharply due to market conditions. As commodity product prices rise, we can experience reduced demand as customers engage in conservation efforts, are exposed to a higher level of credit risk to meet customer requirements, and incur increased working capital costs for holding inventory and accounts receivable. In a lower commodity price environment our customers are generally less prone to engage in conservation efforts, we experience lower credit risk, and working capital costs to hold inventory and finance accounts receivable decrease.
|
•
|
Seasonality and weather conditions
. Our financial results are impacted by seasonality in our businesses and are generally better during the winter months, primarily because a material part of our business consists of supplying heating oil, residual fuel oil and natural gas for space heating purposes during the winter. For example, over the 36-month period ended
December 31, 2015
, we generated an average of
73%
of our total heating oil and residual fuel oil net sales during the months of November through March in the Northeast United States. In addition, weather conditions, particularly during these five months, have a significant impact on the demand for our products. Warmer-than-normal temperatures during these months in our areas of operations can decrease the total volume of heating oil, residual fuel oil and natural gas we sell and the adjusted gross margins realized on those sales, whereas colder-than-normal temperatures increase demand for those products and the associated adjusted gross margins.
|
•
|
The impact of the market structure on our hedging strategy
.
We typically hedge our exposure to commodity price moves with NYMEX futures contracts and "over the counter" or "OTC" swaps. In markets where futures prices are higher than spot prices (typically referred to as contango), we generate positive margins when rolling our inventory hedges to successive months. In markets where futures prices are lower than spot prices (typically referred to as backwardation), we realize losses when rolling our inventory hedges to successive months. In backwardated markets, we operate with lower inventory levels and, as a result, have reduced hedging and financing requirements, thereby limiting losses.
|
•
|
Energy efficiency, new technology and alternative fuels could reduce demand for our products
.
Increased conservation and technological advances have adversely affected the demand for heating oil and residual fuel oil. Consumption of residual fuel oil, in particular, has steadily declined in recent years, primarily due to customers converting from other fuels to natural gas, weak industrial demand and tightening of environmental regulations. Use of natural gas is expected to continue to displace other fuels, which we believe will favorably impact our natural gas volumes and margins.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
Predecessor
|
||||||
|
($ and volumes in thousands)
|
||||||||||
Volumes:
|
|
|
|
|
|
||||||
Refined products (gallons)
|
1,684,158
|
|
|
1,668,240
|
|
|
1,472,100
|
|
|||
Natural gas (MMBtus)
|
56,894
|
|
|
54,430
|
|
|
51,979
|
|
|||
Materials handling (short tons)
|
2,666
|
|
|
2,663
|
|
|
2,145
|
|
|||
Materials handling (gallons)
|
266,280
|
|
|
309,834
|
|
|
246,708
|
|
|||
Net Sales:
|
|
|
|
|
|
||||||
Refined products
|
$
|
3,063,858
|
|
|
$
|
4,650,871
|
|
|
$
|
4,331,410
|
|
Natural gas
|
347,453
|
|
|
359,984
|
|
|
304,843
|
|
|||
Materials handling
|
45,570
|
|
|
37,776
|
|
|
28,446
|
|
|||
Other operations
|
25,033
|
|
|
21,131
|
|
|
18,650
|
|
|||
Total net sales
|
$
|
3,481,914
|
|
|
$
|
5,069,762
|
|
|
$
|
4,683,349
|
|
Adjusted Gross Margin:
|
|
|
|
|
|
||||||
Refined products
|
$
|
170,448
|
|
|
$
|
146,021
|
|
|
$
|
114,744
|
|
Natural gas
|
51,004
|
|
|
55,536
|
|
|
40,373
|
|
|||
Materials handling
|
45,564
|
|
|
37,811
|
|
|
28,430
|
|
|||
Other operations
|
8,986
|
|
|
5,599
|
|
|
5,547
|
|
|||
Total adjusted gross margin
|
$
|
276,002
|
|
|
$
|
244,967
|
|
|
$
|
189,094
|
|
Reconciliation to Operating Income:
|
|
|
|
|
|
||||||
Total adjusted gross margin
|
$
|
276,002
|
|
|
$
|
244,967
|
|
|
$
|
189,094
|
|
Add: unrealized (loss) gain on inventory (1)
|
(2,079
|
)
|
|
11,070
|
|
|
(4,188
|
)
|
|||
Add: unrealized (loss) on prepaid forward contracts (2)
|
(2,628
|
)
|
|
—
|
|
|
—
|
|
|||
Add: unrealized gain (loss) on natural gas transportation contracts (3)
|
21,695
|
|
|
58,694
|
|
|
(55,745
|
)
|
|||
Operating expenses
|
(71,468
|
)
|
|
(62,993
|
)
|
|
(53,273
|
)
|
|||
Selling, general and administrative
|
(94,403
|
)
|
|
(76,420
|
)
|
|
(55,210
|
)
|
|||
Depreciation and amortization
|
(20,342
|
)
|
|
(17,625
|
)
|
|
(16,515
|
)
|
|||
Operating income
|
106,777
|
|
|
157,693
|
|
|
4,163
|
|
|||
Other income (expense)
|
298
|
|
|
(288
|
)
|
|
568
|
|
|||
Interest income
|
456
|
|
|
569
|
|
|
604
|
|
|||
Interest expense
|
(27,367
|
)
|
|
(29,651
|
)
|
|
(30,914
|
)
|
|||
Income tax provision
|
(1,816
|
)
|
|
(5,509
|
)
|
|
(4,259
|
)
|
|||
Net income (loss)
|
$
|
78,348
|
|
|
$
|
122,814
|
|
|
$
|
(29,838
|
)
|
Other Data:
|
|
|
|
|
|
||||||
Adjusted EBITDA (4)
|
$
|
110,429
|
|
|
$
|
105,266
|
|
|
$
|
76,158
|
|
Normal heating degree days (5)
|
6,749
|
|
|
6,749
|
|
|
6,752
|
|
|||
Actual heating degree days
|
6,707
|
|
|
6,855
|
|
|
6,624
|
|
|||
Variance from normal heating degree days
|
(0.6
|
)%
|
|
1.6
|
%
|
|
(1.9
|
)%
|
|||
Variance from prior period actual heating degree days
|
(2.2
|
)%
|
|
3.5
|
%
|
|
14.1
|
%
|
(1)
|
Inventory is valued at the lower of cost or market. The fair value of the derivatives we use to economically hedge our inventory declines or appreciates in value as the value of the underlying inventory appreciates or declines, which creates unrealized hedging (losses) gains with respect to the derivatives that are included in net income (loss).
|
(2)
|
The unrealized hedging gain (loss) on prepaid forward contracts represents our estimate of the change in fair value of the prepaid forward contracts which are not recorded in net income (loss) until the forward contract is settled in the future (i.e., when the commodity is delivered to the customer). As these contracts are prepaid, they do not qualify as
|
(3)
|
The unrealized (gain) loss on natural gas transportation contracts represents our estimate of the change in fair value of the natural gas transportation contracts which are not recorded in net (loss) income until the transportation is utilized in the future (i.e., when natural gas is delivered to the customer), as these contracts are executory contracts that do not qualify as derivatives. As the fair value of the natural gas transportation contracts decline or appreciate, the offsetting physical or financial derivative will also appreciate or decline creating unmatched unrealized hedging losses (gains) in net (loss) income.
|
(4)
|
For a discussion of the non-GAAP financial measure adjusted EBITDA, please read “EDITDA and Adjusted EBITDA” above under "How Management Evaluates Our Results of Operations”.
|
(5)
|
As reported by the NOAA/National Weather Service for the New England oil home heating region over the period of 1981-2011.
|
•
|
increasing volumes, adjusted gross margin and adjusted unit gross margin, and decreasing net sales in our refined products segment;
|
•
|
increasing volumes and decreasing net sales, adjusted gross margin and adjusted unit gross margin in our natural gas segment; and
|
•
|
steady volumes and increasing net sales, and adjusted gross margin in our materials handling segment.
|
|
Years Ended December 31,
|
|
Increase/(Decrease)
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
($ and volumes in thousands, except adjusted unit gross margin)
|
|||||||||||||
Volumes:
|
|
|
|
|
|
|
|
|||||||
Refined products (gallons)
|
1,684,158
|
|
|
1,668,240
|
|
|
15,918
|
|
|
1
|
%
|
|||
Natural gas (MMBtus)
|
56,894
|
|
|
54,430
|
|
|
2,464
|
|
|
5
|
%
|
|||
Materials handling (short tons)
|
2,666
|
|
|
2,663
|
|
|
3
|
|
|
—
|
%
|
|||
Materials handling (gallons)
|
266,280
|
|
|
309,834
|
|
|
(43,554
|
)
|
|
(14
|
)%
|
|||
Net Sales:
|
|
|
|
|
|
|
|
|||||||
Refined products
|
$
|
3,063,858
|
|
|
$
|
4,650,871
|
|
|
$
|
(1,587,013
|
)
|
|
(34
|
)%
|
Natural gas
|
347,453
|
|
|
359,984
|
|
|
(12,531
|
)
|
|
(3
|
)%
|
|||
Materials handling
|
45,570
|
|
|
37,776
|
|
|
7,794
|
|
|
21
|
%
|
|||
Other operations
|
25,033
|
|
|
21,131
|
|
|
3,902
|
|
|
18
|
%
|
|||
Total net sales
|
$
|
3,481,914
|
|
|
$
|
5,069,762
|
|
|
$
|
(1,587,848
|
)
|
|
(31
|
)%
|
Adjusted Gross Margin:
|
|
|
|
|
|
|
|
|||||||
Refined products
|
$
|
170,448
|
|
|
$
|
146,021
|
|
|
$
|
24,427
|
|
|
17
|
%
|
Natural gas
|
51,004
|
|
|
55,536
|
|
|
(4,532
|
)
|
|
(8
|
)%
|
|||
Materials handling
|
45,564
|
|
|
37,811
|
|
|
7,753
|
|
|
21
|
%
|
|||
Other operations
|
8,986
|
|
|
5,599
|
|
|
3,387
|
|
|
60
|
%
|
|||
Total adjusted gross margin
|
$
|
276,002
|
|
|
$
|
244,967
|
|
|
$
|
31,035
|
|
|
13
|
%
|
Adjusted Unit Gross Margin:
|
|
|
|
|
|
|
|
|||||||
Refined products
|
$
|
0.101
|
|
|
$
|
0.088
|
|
|
$
|
0.013
|
|
|
15
|
%
|
Natural gas
|
$
|
0.896
|
|
|
$
|
1.020
|
|
|
$
|
(0.124
|
)
|
|
(12
|
)%
|
•
|
increasing volumes, net sales, adjusted gross margin and adjusted unit gross margin in our refined products segment;
|
•
|
increasing volumes, net sales, adjusted gross margin and adjusted unit gross margin in our natural gas segment; and
|
•
|
increasing volumes, net sales and adjusted gross margin in our materials handling segment.
|
|
Years Ended December 31,
|
|
Increase/(Decrease)
|
|||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
($ and volumes in thousands, except adjusted unit gross margin)
|
|||||||||||||
Volumes:
|
|
|
|
|
|
|
|
|||||||
Refined products (gallons)
|
1,668,240
|
|
|
1,472,100
|
|
|
196,140
|
|
|
13
|
%
|
|||
Natural gas (MMBtus)
|
54,430
|
|
|
51,979
|
|
|
2,451
|
|
|
5
|
%
|
|||
Materials handling (short tons)
|
2,663
|
|
|
2,145
|
|
|
518
|
|
|
24
|
%
|
|||
Materials handling (gallons)
|
309,834
|
|
|
246,708
|
|
|
63,126
|
|
|
26
|
%
|
|||
Net Sales:
|
|
|
|
|
|
|
|
|||||||
Refined products
|
$
|
4,650,871
|
|
|
$
|
4,331,410
|
|
|
$
|
319,461
|
|
|
7
|
%
|
Natural gas
|
359,984
|
|
|
304,843
|
|
|
55,141
|
|
|
18
|
%
|
|||
Materials handling
|
37,776
|
|
|
28,446
|
|
|
9,330
|
|
|
33
|
%
|
|||
Other operations
|
21,131
|
|
|
18,650
|
|
|
2,481
|
|
|
13
|
%
|
|||
Total net sales
|
$
|
5,069,762
|
|
|
$
|
4,683,349
|
|
|
$
|
386,413
|
|
|
8
|
%
|
Adjusted Gross Margin:
|
|
|
|
|
|
|
|
|||||||
Refined products
|
$
|
146,021
|
|
|
$
|
114,744
|
|
|
$
|
31,277
|
|
|
27
|
%
|
Natural gas
|
55,536
|
|
|
40,373
|
|
|
15,163
|
|
|
38
|
%
|
|||
Materials handling
|
37,811
|
|
|
28,430
|
|
|
9,381
|
|
|
33
|
%
|
|||
Other operations
|
5,599
|
|
|
5,547
|
|
|
52
|
|
|
1
|
%
|
|||
Total adjusted gross margin
|
$
|
244,967
|
|
|
$
|
189,094
|
|
|
$
|
55,873
|
|
|
30
|
%
|
Adjusted Unit Gross Margin:
|
|
|
|
|
|
|
|
|||||||
Refined products
|
$
|
0.088
|
|
|
$
|
0.078
|
|
|
$
|
0.010
|
|
|
13
|
%
|
Natural gas
|
$
|
1.020
|
|
|
$
|
0.777
|
|
|
$
|
0.243
|
|
|
31
|
%
|
|
Years Ended December 31,
|
|
Increase/(Decrease)
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
($ in thousands)
|
|
|
|||||||||||
Operating expenses
|
$
|
71,468
|
|
|
$
|
62,993
|
|
|
$
|
8,475
|
|
|
13
|
%
|
Selling, general and administrative expenses
|
$
|
94,403
|
|
|
$
|
76,420
|
|
|
$
|
17,983
|
|
|
24
|
%
|
Depreciation and amortization
|
$
|
20,342
|
|
|
$
|
17,625
|
|
|
$
|
2,717
|
|
|
15
|
%
|
Interest expense, net
|
$
|
26,911
|
|
|
$
|
29,082
|
|
|
$
|
(2,171
|
)
|
|
(7
|
)%
|
|
Years Ended December 31,
|
|
Increase/(Decrease)
|
|||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
($ in thousands)
|
|
|
|||||||||||
Operating expenses
|
$
|
62,993
|
|
|
$
|
53,273
|
|
|
$
|
9,720
|
|
|
18
|
%
|
Selling, general and administrative expenses
|
$
|
76,420
|
|
|
$
|
55,210
|
|
|
$
|
21,210
|
|
|
38
|
%
|
Depreciation and amortization
|
$
|
17,625
|
|
|
$
|
16,515
|
|
|
$
|
1,110
|
|
|
7
|
%
|
Interest expense, net
|
$
|
29,082
|
|
|
$
|
30,310
|
|
|
$
|
(1,228
|
)
|
|
(4
|
)%
|
|
Payments due by period
|
||||||||||||||||||
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
4-5 years
|
|
More than
5 years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Operating lease obligations (1)
|
$
|
69,024
|
|
|
$
|
15,450
|
|
|
$
|
30,439
|
|
|
$
|
13,522
|
|
|
$
|
9,613
|
|
Capital lease obligations (including interest)
|
$
|
5,851
|
|
|
$
|
1,268
|
|
|
$
|
1,734
|
|
|
$
|
1,038
|
|
|
$
|
1,811
|
|
Credit facilities (including interest) (2)
|
$
|
677,560
|
|
|
$
|
87,732
|
|
|
$
|
169,397
|
|
|
$
|
420,431
|
|
|
$
|
—
|
|
Product purchases (3)
|
$
|
296,333
|
|
|
$
|
292,856
|
|
|
$
|
3,477
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Transportation and storage (4)
|
$
|
34,861
|
|
|
$
|
18,641
|
|
|
$
|
13,991
|
|
|
$
|
2,229
|
|
|
$
|
—
|
|
Total
|
$
|
1,083,629
|
|
|
$
|
415,947
|
|
|
$
|
219,038
|
|
|
$
|
437,220
|
|
|
$
|
11,424
|
|
(1)
|
We have leases for a refined products terminal, refined products storage, maritime charters, vehicles, office and plant facilities, computer and other equipment that are accounted for as operating leases.
|
(2)
|
Amounts include principal and interest on our working capital revolving credit facility and our acquisition line revolving credit facility at
December 31, 2015
. The credit agreement has a contractual maturity of December 9, 2019 and no scheduled principal payments are required prior to that date. However, we repay amounts outstanding and borrow funds based on our working capital requirements. Therefore, the current portion of the working capital revolving credit facility included in our Consolidated Balance Sheets is the amount we expect to pay down during the course of the year, and the long-term portion of the working capital revolving credit facility is the amount we expect to be outstanding during the entire year. Interest is calculated using the rates in effect as of
December 31, 2015
, and we assume a ratable payment of the current portion of the working capital revolving credit facility through the expiration date.
|
(3)
|
Product purchases include estimated purchase commitments for refined products and natural gas. The value of these future supply commitments, if not fixed in price, will fluctuate based on prevailing market prices. The prices at which we purchase refined products and natural gas are determined by reference to published market prices prevailing at the time of purchase. The value of our product purchase commitments were computed based on contractual prices.
|
(4)
|
Transportation and storage commitments include refined products throughput agreements at third-party terminals and natural gas pipeline transportation and storage agreements that have minimum usage requirements.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
287,613
|
|
|
$
|
15,564
|
|
|
$
|
(80,663
|
)
|
Net cash used in investing activities
|
$
|
(14,565
|
)
|
|
$
|
(132,492
|
)
|
|
$
|
(46,751
|
)
|
Net cash (used in) provided by financing activities
|
$
|
(245,965
|
)
|
|
$
|
118,390
|
|
|
$
|
125,959
|
|
•
|
A U.S. dollar revolving working capital facility of up to $1.0 billion to be used for working capital loans and letters of credit;
|
•
|
A multicurrency revolving working capital facility of up to $120.0 million to be used by Kildair for working capital loans and letters of credit;
|
•
|
A revolving acquisition facility of up to $550.0 million to be used for loans and letters of credit to fund capital expenditures and acquisitions and other general corporate purposes related to the Partnership’s current businesses; and,
|
•
|
Subject to certain conditions, the U.S. dollar and multicurrency revolving working capital facilities may be increased by $200.0 million in the aggregate. Additionally, subject to certain conditions, the revolving acquisition facility may be increased by $200.0 million.
|
Product Group
|
Primary Financial Hedging Instrument
|
|
Gasolines
|
NYMEX RBOB futures contract
|
|
Distillates
|
NYMEX Ultra Low Sulfur Diesel futures contract
|
|
Residual Fuel Oils
|
New York Harbor 1% Sulfur Residual Fuel Oil Swaps
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Refined products contracts
|
$
|
149,741
|
|
|
$
|
159,751
|
|
|
$
|
(320
|
)
|
Natural gas contracts
|
19,824
|
|
|
30,372
|
|
|
(76,707
|
)
|
|||
Total
|
$
|
169,565
|
|
|
$
|
190,123
|
|
|
$
|
(77,027
|
)
|
|
Fair Value
Measurement
|
|
Active
Markets
Level 1
|
|
Observable
Inputs
Level 2
|
|
Unobservable
Inputs
Level 3
|
||||||||
|
(in thousands)
|
||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Commodity fixed forwards
|
$
|
157,389
|
|
|
$
|
—
|
|
|
$
|
157,389
|
|
|
$
|
—
|
|
Commodity swaps and options
|
51
|
|
|
—
|
|
|
51
|
|
|
—
|
|
||||
Commodity derivatives
|
157,440
|
|
|
—
|
|
|
157,440
|
|
|
—
|
|
||||
Interest rate swaps
|
274
|
|
|
—
|
|
|
274
|
|
|
—
|
|
||||
Total
|
$
|
157,714
|
|
|
$
|
—
|
|
|
$
|
157,714
|
|
|
$
|
—
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity fixed forwards
|
$
|
31,801
|
|
|
$
|
—
|
|
|
$
|
31,801
|
|
|
$
|
—
|
|
Commodity swaps and options
|
4,250
|
|
|
—
|
|
|
4,250
|
|
|
—
|
|
||||
Commodity derivatives
|
36,051
|
|
|
—
|
|
|
36,051
|
|
|
—
|
|
||||
Interest rate swaps
|
1,115
|
|
|
—
|
|
|
1,115
|
|
|
—
|
|
||||
Other
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Total
|
$
|
37,178
|
|
|
$
|
—
|
|
|
$
|
37,178
|
|
|
$
|
—
|
|
|
Refined Products
|
|
Natural Gas
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||||||
At December 31
|
$
|
85
|
|
|
$
|
315
|
|
|
$
|
369
|
|
|
$
|
237
|
|
|
$
|
282
|
|
|
$
|
389
|
|
Average
|
193
|
|
|
219
|
|
|
168
|
|
|
243
|
|
|
296
|
|
|
293
|
|
||||||
High
|
1,863
|
|
|
815
|
|
|
369
|
|
|
617
|
|
|
617
|
|
|
687
|
|
||||||
Low
|
25
|
|
|
58
|
|
|
72
|
|
|
117
|
|
|
105
|
|
|
130
|
|
Name
|
Age
|
|
Position with our General Partner
|
|
Michael D. Milligan
|
52
|
|
|
Chairman of the Board of Directors
|
Ben J. Hennelly
|
45
|
|
|
Director
|
Sally A. Sarsfield
|
56
|
|
|
Director
|
C. Gregory Harper
|
51
|
|
|
Director
|
Robert B. Evans
|
67
|
|
|
Director
|
Beth A. Bowman
|
59
|
|
|
Director
|
David C. Glendon*
|
50
|
|
|
President, Chief Executive Officer and Director
|
Gary A. Rinaldi*
|
58
|
|
|
Senior Vice President, Chief Operating Officer, Chief Financial Officer and Director
|
John W. Moore*
|
57
|
|
|
Vice President, Chief Accounting Officer
|
Thomas F. Flaherty*
|
60
|
|
|
Vice President, Refined Products
|
Steven D. Scammon*
|
54
|
|
|
Vice President, Chief Risk Officer
|
Joseph S. Smith*
|
59
|
|
|
Vice President, Business Development
|
Paul A. Scoff*
|
56
|
|
|
Vice President, General Counsel, Chief Compliance Officer and Secretary
|
James Therriault*
|
55
|
|
|
Vice President, Materials Handling
|
Burton S. Russell
|
60
|
|
|
Vice President, Operations
|
Brian W. Weego*
|
49
|
|
|
Vice President, Natural Gas
|
Frank B. Easton
|
69
|
|
|
Vice President, Human Resources
|
Kevin G. Henry
|
55
|
|
|
Vice President, Treasurer
|
*
|
Indicates an “executive officer” for purposes of Item 401(b) of Regulation S-K.
|
|
THE BOARD OF DIRECTORS
|
|
Michael D. Milligan
|
|
Robert Evans
|
|
C. Gregory Harper
|
|
Beth A. Bowman
|
|
Ben J. Hennelly
|
|
Sally A. Sarsfield
|
•
|
The compensation paid to our executives should be competitive with that paid to the executives of those companies with which we compete for executive talent so that we attract and retain a skilled and experienced management team.
|
•
|
Incentive compensation should be a material portion of total compensation so that our executives are properly motivated to focus on achieving or exceeding our financial and business goals.
|
•
|
Unitholders should receive a threshold return on investment before the payout of any incentive compensation, so as to align the interests of the executive team with those of the unitholders.
|
•
|
Base salary;
|
•
|
Annual incentive bonus consisting of cash and units;
|
•
|
Long term equity incentive awards; and
|
•
|
Other benefits, including retirement, health and welfare, and related benefits and, in certain instances, the use of a car or a car allowance.
|
Name
|
2016 Base Salaries
|
|
2015 Base Salaries
|
|
2014 Base Salaries
|
||||||
David C. Glendon
|
$
|
358,750
|
|
|
$
|
350,000
|
|
|
$
|
350,000
|
|
Gary A. Rinaldi
|
$
|
358,750
|
|
|
$
|
350,000
|
|
|
$
|
350,000
|
|
Thomas F. Flaherty
|
$
|
262,107
|
|
|
$
|
258,234
|
|
|
$
|
253,170
|
|
Steven D. Scammon
|
$
|
277,459
|
|
|
$
|
273,358
|
|
|
$
|
270,652
|
|
John W. Moore
|
$
|
254,085
|
|
|
$
|
251,569
|
|
|
$
|
246,636
|
|
|
2015 Annual Incentive Bonus
|
|||||||||
Name
|
Cash
|
|
Common Units
|
|
Grant Date Fair Value of Common Units
|
|||||
David C. Glendon
|
$
|
525,000
|
|
|
28,292
|
|
|
$
|
481,530
|
|
Gary A. Rinaldi
|
$
|
525,000
|
|
|
28,292
|
|
|
$
|
481,530
|
|
Thomas F. Flaherty
|
$
|
193,676
|
|
|
10,936
|
|
|
$
|
186,131
|
|
Steven D. Scammon
|
$
|
205,019
|
|
|
9,747
|
|
|
$
|
165,894
|
|
John W. Moore
|
$
|
188,678
|
|
|
9,747
|
|
|
$
|
165,894
|
|
Name
|
Target Number of Phantom Units Granted
|
|
Grant Date
Fair Value (1)
|
|||
David C. Glendon
|
23,750
|
|
|
$
|
750,025
|
|
Gary A. Rinaldi
|
23,750
|
|
|
$
|
750,025
|
|
Thomas F. Flaherty
|
6,000
|
|
|
$
|
189,480
|
|
Steven D. Scammon
|
6,000
|
|
|
$
|
189,480
|
|
John W. Moore
|
6,000
|
|
|
$
|
189,480
|
|
(1)
|
The value of the phantom performance awards is based on the grant date fair value of those common units, as calculated pursuant to FASB ASC Topic 718.
|
Relative Unitholder Return
for Performance Period
|
|
Percentage of Target Phantom Units
that Vest
|
< 30
th
Percentile
|
|
0%
|
30
th
Percentile
|
|
50%
|
50
th
Percentile
|
|
100%
|
90
th
Percentile
|
|
200%
|
•
|
Our overall compensation levels are competitive with the market.
|
•
|
Our compensation mix is balanced among fixed components like salary and benefits, as well as annual incentives that reward overall company and individual performance.
|
•
|
Our long term equity incentive program is tied to total unitholder return and relative unitholder return over a period of multiple years, with units paid out at the end of the applicable performance period if the pre-established goals are met. This program was designed to encourage executives to focus on unitholder interests over the longer term. In contrast, the annual incentive bonus focuses on distributable cash flow over the shorter term. The combination of both programs appropriately focuses our employees on both our short and longer term performance. The use of multiple performance metrics across programs also means that our executives are not singularly focused on one metric at the exclusion of other important performance goals.
|
•
|
The board of directors of our General Partner has retained an appropriate level of discretion to reduce annual incentive bonus payments if it determines that such adjustments would be appropriate based on our interests and the interests of our unitholders.
|
Name and Title
|
Year
|
|
Salary ($)(1)
|
|
Bonus ($)(2)
|
|
Stock
Awards
($)(3)
|
|
Change in
Pension Value
Non-Qualified
Deferred
Compensation
Earnings
($)(4)
|
|
All Other
Compensation
($)(6)
|
|
Total ($)
|
||||||
David C. Glendon
|
2015
|
|
350,000
|
|
|
655,000
|
|
|
1,231,555
|
|
|
N/A
|
|
|
21,004
|
|
|
2,257,559
|
|
President and Chief Executive Officer
|
2014
|
|
350,000
|
|
|
717,000
|
|
|
1,891,870
|
|
|
N/A
|
|
|
22,425
|
|
|
2,981,295
|
|
2013
|
|
350,000
|
|
|
802,000
|
|
|
|
|
N/A
|
|
|
22,259
|
|
|
1,174,259
|
|
||
Gary A. Rinaldi
|
2015
|
|
350,000
|
|
|
655,000
|
|
|
1,231,555
|
|
|
N/A
|
|
|
22,890
|
|
|
2,259,445
|
|
Senior Vice President, Chief Operating Officer and Chief Financial Officer
|
2014
|
|
350,000
|
|
|
717,000
|
|
|
1,891,870
|
|
|
N/A
|
|
|
22,525
|
|
|
2,981,395
|
|
2013
|
|
350,000
|
|
|
802,000
|
|
|
|
|
N/A
|
|
|
22,309
|
|
|
1,174,309
|
|
||
Thomas F. Flaherty
|
2015
|
|
256,968
|
|
|
233,676
|
|
|
375,611
|
|
|
—
|
|
|
48,040
|
|
|
914,295
|
|
Vice President, Refined Products
|
2014
|
|
251,960
|
|
|
249,878
|
|
|
581,637
|
|
|
178,199
|
|
|
47,335
|
|
|
1,309,009
|
|
2013
|
|
247,545
|
|
|
270,000
|
|
|
|
|
—
|
|
(5)
|
47,063
|
|
|
564,608
|
|
||
Steven D. Scammon
|
2015
|
|
272,682
|
|
|
240,019
|
|
|
355,374
|
|
|
—
|
|
|
22,594
|
|
|
890,669
|
|
Vice President, Chief Risk Officer
|
2014
|
|
272,527
|
|
|
252,989
|
|
|
520,949
|
|
|
25,466
|
|
|
24,475
|
|
|
1,096,406
|
|
2013
|
|
257,597
|
|
|
249,600
|
|
|
|
|
—
|
|
(5)
|
29,759
|
|
|
536,956
|
|
||
John W. Moore
|
2015
|
|
250,336
|
|
|
228,678
|
|
|
355,374
|
|
|
—
|
|
|
29,385
|
|
|
863,773
|
|
Vice President, Chief Accounting Officer
|
2014
|
|
245,457
|
|
|
239,977
|
|
|
578,878
|
|
|
33,470
|
|
|
29,268
|
|
|
1,127,050
|
|
2013
|
|
241,156
|
|
|
265,000
|
|
|
|
|
—
|
|
(5)
|
29,182
|
|
|
535,338
|
|
|
(1)
|
Amounts in this column reflect all compensation earned by the Named Executive Officers during the fiscal year as base salary. Prior to March of 2015, the 2015 base salaries for Messrs. Glendon, Rinaldi, Flaherty, Scammon and Moore were $350,000, $350,000, $253,170, $270,652 and $246,636, respectively. After March of 2015, the 2015 base salaries for Messrs. Glendon, Rinaldi, Flaherty, Scammon and Moore were as follows: $350,000, $350,000, $258,234, $273,358 and $251,569, respectively.
|
(2)
|
For 2015, the amounts in this column reflect cash payments under (i) the annual incentive bonus award for 2015, and (ii) the third (and final) payment under the 2013 long term incentive cash program award:
|
Recipient
|
Cash Bonus Program
|
2015 Bonus ($)
|
|
David C. Glendon
|
2015 annual cash bonus award
|
525,000
|
|
|
2013 long term incentive cash program
|
130,000
|
|
Gary A. Rinaldi
|
2015 annual cash bonus award
|
525,000
|
|
|
2013 long term incentive cash program
|
130,000
|
|
Thomas F. Flaherty
|
2015 annual cash bonus award
|
193,676
|
|
|
2013 long term incentive cash program
|
40,000
|
|
Steven D. Scammon
|
2015 annual cash bonus award
|
205,019
|
|
|
2013 long term incentive cash program
|
35,000
|
|
John W. Moore
|
2015 annual cash bonus award
|
188,678
|
|
|
2013 long term incentive cash program
|
40,000
|
|
(3)
|
Amounts in this column for 2015 reflect the grant date fair value of the (i) performance based phantom awards and (ii) units issued pursuant to the 2015 annual incentive bonus program, in each case computed in accordance with FASB ASC Topic 718, disregarding estimated forfeitures. The values of the performance-based phantom units at the grant date assuming that the highest level of performance conditions will be achieved for Messrs. Glendon, Rinaldi, Flaherty, Scammon and Moore are as follows: $1,500,050, $1,500,050, $378,960, $378,960 and $378,960, respectively.
|
(4)
|
Amounts in this column represent the actuarial increase, if any, in the present value of benefits under the DB Plan and the RRP determined by using interest rate and mortality rate assumptions consistent with those used in the Pension Benefits table. Messrs. Glendon and Rinaldi are not participants in these plans. Negative values are not reported in this column and are instead indicated by use of a dash.
|
(5)
|
For fiscal year 2015, there was an aggregate loss of $9,629, $2,952 and $5,615 for Messrs. Flaherty, Scammon and Moore, respectively. For fiscal year 2013 there was an aggregate loss of $43,306, $8,385 and $8,890 in the present value of accumulated benefits for Messrs. Flaherty, Scammon and Moore, respectively, under the DB Plan and RRP.
|
(6)
|
The amounts set forth in this column for 2015 represent: (i) a 401(k) plan matching contribution (ii) our contribution to the DC Plan; (iii) Named Executive Officer car allowance and; (iv) other incidental payments. Although we typically make a contribution to the DC Plan equal to 5% of each Named Executive Officer’s base pay, we make a supplemental contribution of an additional 5% for Mr. Flaherty, and as such the amount of his DC Plan contribution is double that of the other Named Executive Officers. For a quantification of these benefits please see the table below. For more information regarding these benefits, please see the “Other Benefits” section of our Compensation Discussion and Analysis above.
|
Recipient
|
401(k) Plan Matching Contribution
($)
|
Defined Contribution Plan
($)
|
Car Allowance
($)
|
Other Incidental
($)
|
All Other Compensation Total
($)
|
|||||
David C. Glendon
|
7,754
|
|
13,250
|
|
—
|
|
—
|
|
21,004
|
|
Gary A. Rinaldi
|
9,540
|
|
13,250
|
|
—
|
|
100
|
|
22,890
|
|
Thomas F. Flaherty
|
9,540
|
|
26,500
|
|
12,000
|
|
—
|
|
48,040
|
|
Steven D. Scammon
|
8,970
|
|
13,250
|
|
—
|
|
374
|
|
22,594
|
|
John W. Moore
|
8,835
|
|
13,250
|
|
7,200
|
|
100
|
|
29,385
|
|
Name (a)
|
Grant Date
(#)
|
|
Award Approval Date
(#)
|
|
Estimated Future Payouts Under
Equity Incentive Plan Awards (1)
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#) (2)
|
|
Grant Date Fair
Value of Stock
and Option
Awards
($)(3)
|
|||||||||
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|||||||||||||
David C. Glendon
|
3/5/2015
|
|
3/5/2015
|
|
11,875
|
|
|
23,750
|
|
|
47,500
|
|
|
|
|
750,025
|
|
|
|
3/2/2016
|
|
2/26/2016
|
|
|
|
|
|
|
|
28,292
|
|
(2)
|
481,530
|
|
|||
Gary A. Rinaldi
|
3/5/2015
|
|
3/5/2015
|
|
11,875
|
|
|
23,750
|
|
|
47,500
|
|
|
|
|
750,025
|
|
|
|
3/2/2016
|
|
2/26/2016
|
|
|
|
|
|
|
|
28,292
|
|
(2)
|
481,530
|
|
|||
Thomas F. Flaherty
|
3/5/2015
|
|
3/5/2015
|
|
3,000
|
|
|
6,000
|
|
|
12,000
|
|
|
|
|
189,480
|
|
|
|
3/2/2016
|
|
2/26/2016
|
|
|
|
|
|
|
|
10,936
|
|
(2)
|
186,131
|
|
|||
Steven D. Scammon
|
3/5/2015
|
|
3/5/2015
|
|
3,000
|
|
|
6,000
|
|
|
12,000
|
|
|
|
|
189,480
|
|
|
|
3/2/2016
|
|
2/26/2016
|
|
|
|
|
|
|
|
9,747
|
|
(2)
|
165,894
|
|
|||
John W. Moore
|
3/5/2015
|
|
3/5/2015
|
|
3,000
|
|
|
6,000
|
|
|
12,000
|
|
|
|
|
189,480
|
|
|
|
3/2/2016
|
|
2/26/2016
|
|
|
|
|
|
|
|
9,747
|
|
(2)
|
165,894
|
|
|
(1)
|
Amounts shown in the “Estimated Future Payouts Under Equity Incentive Plan Awards” columns represent the threshold, target and maximum settlement levels with respect to the performance-based phantom unit awards settled in our common units and granted to our Named Executive Officers pursuant to our LTIP. So long as the total shareholder return threshold is met, vesting of the phantom units is determined based on the Company’s performance during the performance period from January 1, 2015 through December 31, 2017. The performance-based phantom unit awards
|
(2)
|
These amounts represent common units issued under the 2015 annual incentive bonus program pursuant to our LTIP. A portion of the 2015 annual incentive bonus program is payable in cash, and a portion is payable in units. Specifically, the cash bonus amounts deliverable to Named Executive Officers is capped at 150% of the individual bonus target levels for 2015, and Named Executive Officers are eligible to earn annual incentive bonus amounts settled in common units rather than cash for performance above that level. Units distributed under the annual incentive bonus program to the Named Executive Officers are fully vested but are subject to a one-year holding period from date of issuance. The 2015 annual incentive bonus program was based on achievement of distributable cash flow of $89.7 million to establish the bonus pool. For more information regarding the amounts received under the 2015 annual incentive bonus program, please see the “Components of Compensation-Annual Incentive Bonus” section of our Compensation Discussion and Analysis above.
|
(3)
|
The amounts in this column reflect the aggregate grant date fair value of awards made to our Named Executive Officers in 2015 computed in accordance with FASB ASC Topic 718, disregarding estimated forfeitures. For a discussion of the valuation assumptions used in determining the grant date fair value of these awards. See Note 19 “Equity-Based Compensation”-of the Notes to Consolidated Financial Statements included below.
|
Name (a)
|
Stock Awards
|
||||||||||
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
|
|
Market Value of
Shares or Units
of Stock That
Have Not Vested
($)
|
|
Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
other Rights
That Have Not
Vested
(#)
|
|
Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares,
Units or other Rights
That Have Not Vested
($)
|
|||||
David C. Glendon
|
2,893
|
|
(1)
|
58,352
|
|
|
|
|
|
||
|
14,000
|
|
(2)
|
282,380
|
|
|
|
|
|
||
|
|
|
|
28,000
|
|
(3)
|
564,760
|
|
|||
|
|
|
|
11,875
|
|
(4)
|
239,519
|
|
|||
Gary A. Rinaldi
|
2,893
|
|
(1)
|
58,352
|
|
|
|
|
|
||
|
14,000
|
|
(2)
|
282,380
|
|
|
|
|
|
||
|
|
|
|
28,000
|
|
(3)
|
564,760
|
|
|||
|
|
|
|
11,875
|
|
(4)
|
239,519
|
|
|||
Thomas F. Flaherty
|
3,500
|
|
(2)
|
70,595
|
|
|
|
|
|
||
|
|
|
|
|
7,000
|
|
(3)
|
141,190
|
|
||
|
|
|
|
3,000
|
|
(4)
|
60,510
|
|
|||
Steven D. Scammon
|
3,500
|
|
(2)
|
70,595
|
|
|
|
|
|
||
|
|
|
|
|
7,000
|
|
(3)
|
141,190
|
|
||
|
|
|
|
3,000
|
|
(4)
|
60,510
|
|
|||
John W. Moore
|
1,653
|
|
(1)
|
33,341
|
|
|
|
|
|
||
|
3,500
|
|
(2)
|
70,595
|
|
|
|
|
|
||
|
|
|
|
7,000
|
|
(3)
|
141,190
|
|
|||
|
|
|
|
3,000
|
|
(4)
|
60,510
|
|
|
(1)
|
These figures represent the time-based phantom unit awards granted on March 31, 2014 that are settled in our common units upon vesting. These amounts represent the remaining 50% of such awards that will vest on the final anniversary of the grant date (March 31, 2016). These awards contain distribution equivalent rights that are paid out to the phantom unit holders at the same time as such distributions are paid to our common unitholders generally.
|
(2)
|
These figures represent the number of common units deliverable to each of our Named Executive Officers as a result of the vesting of the second tranche of the performance-based phantom unit awards granted in July of 2014. These amounts represent the actual number of our common units earned pursuant to the terms of the awards for the performance period from January 1, 2015 through December 31, 2015, based on our total unitholder return and relative total unitholder return during that period. This tranche vested at 200% of target. Because we achieved our maximum performance goals for the 2015 performance period effective as of December 31, 2015 these awards were no longer considered “equity incentive plan awards” as of that date. The awards are enumerated in this column because each of our Named Executive Officers must remain employed with us through the date of settlement of the awards or such awards will be forfeited. As such, the awards were not fully vested as of December 31, 2015.
|
(3)
|
These figures represent the maximum number of the third and final tranche of unvested performance-based phantom units granted in July of 2014. These awards are settled in our common units upon vesting and will vest based upon total unitholder return and relative unitholder return with respect to the performance period from January 1, 2014 through December 31, 2016. These awards contain distribution equivalent rights that are paid out to the phantom unit holders at the time of settlement of the underlying phantom unit in the same form (cash or common units) as was delivered to our common unitholders at the time of the distribution. The second tranche of performance-based phantom units granted in July of 2014 were subject to a performance period that ended December 31, 2015 and are reported in the “Number of Shares or Units of Stock That Have Not Vested” column since they are still subject to a service condition even though the applicable performance period has concluded.
|
(4)
|
These figures represent the threshold settlement level with respect to the performance-based phantom unit awards granted to our Named Executive Officers pursuant to our LTIP on March 5, 2015. Assuming achievement of threshold performance, all of these phantom units will vest based on the Company’s performance during the performance period from January 1, 2015 through December 31, 2017. These awards contain distribution equivalent rights that are paid out to the phantom unit holders at the time of settlement of the underlying phantom unit in the same form (cash or common units) as was delivered to our common unitholders at the time of the distribution.
|
|
Stock Awards
|
|
||||
Name
|
Number of Shares Acquired on Vesting (#)
|
|
Value Realized on Vesting ($)(1)(2)
|
|
||
David C. Glendon
|
16,894
|
|
|
396,671
|
|
(3)
|
Gary A. Rinaldi
|
16,894
|
|
|
396,671
|
|
(4)
|
Thomas F. Flaherty
|
3,500
|
|
|
80,675
|
|
(5)
|
Steven D. Scammon
|
3,500
|
|
|
80,675
|
|
(6)
|
John W. Moore
|
5,154
|
|
|
122,951
|
|
(7)
|
(1)
|
The amounts reflected in this column represent the aggregate market value realized by each Named Executive Officer on the vesting date of the time-based or performance-based phantom units held by such Named Executive Officer. The value realized upon vesting is computed by multiplying the number of units by the closing market price of the underlying units on the vesting date. For the time-based phantom unit awards, the closing price on the vesting date, March 31, 2015, was $25.56. For the performance-based phantom units granted in July of 2014, the closing price on the vesting date, January 28, 2015, was $23.05. The value realized upon vesting is comprised of the gross number of common units that vested and has not been reduced to take into account any common units net withheld to pay taxes.
|
(2)
|
Value realized on vesting was computed as described in footnote 1 above and was based on the following:
|
|
Recipient
|
Date of Award
|
|
Vesting Date
|
|
Number of Shares Vested (#)
|
|
Market Price on Vesting Date ($)
|
|
Value Realized on Vesting ($)
|
|||
(3)
|
David C. Glendon
|
3/31/2014
|
|
3/31/2015
|
|
2,894
|
|
|
25.56
|
|
|
73,971
|
|
|
|
7/11/2014
|
|
1/28/2015
|
|
14,000
|
|
|
23.05
|
|
|
322,700
|
|
(4)
|
Gary A. Rinaldi
|
3/31/2014
|
|
3/31/2015
|
|
2,894
|
|
|
25.56
|
|
|
73,971
|
|
|
|
7/11/2014
|
|
1/28/2015
|
|
14,000
|
|
|
23.05
|
|
|
322,700
|
|
(5)
|
Thomas F. Flaherty
|
7/11/2014
|
|
1/28/2015
|
|
3,500
|
|
|
23.05
|
|
|
80,675
|
|
(6)
|
Steven D. Scammon
|
7/11/2014
|
|
1/28/2015
|
|
3,500
|
|
|
23.05
|
|
|
80,675
|
|
(7)
|
John W. Moore
|
3/31/2014
|
|
3/31/2015
|
|
1,654
|
|
|
25.56
|
|
|
42,276
|
|
|
|
7/11/2014
|
|
1/28/2015
|
|
3,500
|
|
|
23.05
|
|
|
80,675
|
|
Name
|
|
Plan Name
|
|
Number of
Years Credited
Service
(#)(1)(2)
|
|
Present Value
of Accumulated
Benefit
($)(3)
|
|
Payments
During 2015
Fiscal Year
($)
|
||||
David C. Glendon
|
|
Axel Johnson Inc. Retirement Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
Axel Johnson Inc. Retirement Restoration Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Gary A. Rinaldi
|
|
Axel Johnson Inc. Retirement Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
Axel Johnson Inc. Retirement Restoration Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Thomas F. Flaherty
|
|
Axel Johnson Inc. Retirement Plan
|
|
20.4
|
|
|
$
|
720,058
|
|
|
—
|
|
|
|
Axel Johnson Inc. Retirement Restoration Plan
|
|
20.4
|
|
|
$
|
188,986
|
|
|
—
|
|
Steven D. Scammon
|
|
Axel Johnson Inc. Retirement Plan
|
|
3.0
|
|
|
$
|
80,475
|
|
|
—
|
|
|
|
Axel Johnson Inc. Retirement Restoration Plan
|
|
3.0
|
|
|
$
|
23,094
|
|
|
—
|
|
John Moore
|
|
Axel Johnson Inc. Retirement Plan
|
|
5.5
|
|
|
$
|
149,231
|
|
|
—
|
|
|
|
Axel Johnson Inc. Retirement Restoration Plan
|
|
5.5
|
|
|
$
|
6,411
|
|
|
—
|
|
(1)
|
Amounts in this column represent the number of years of credited service rounded to the nearest month and were frozen as of December 31, 2003.
|
(2)
|
Messrs. Glendon and Rinaldi were not eligible to participate in the DB Plan or the RRP as they were hired after January 1, 2003.
|
(3)
|
Amounts in this column represent the actuarial present value of each Named Executive Officer’s accumulated benefit under the DB Plan and the RRP as of December 31, 2015. In quantifying the present value of the accumulated benefit indicated above, we used the same assumptions used for financial reporting purposes under GAAP, except that retirement age was assumed to be the earliest time at which a participant may retire under the plan without any benefit reduction due to age. The material assumptions were as follows: (i) an estimated discount rate of 4.40% for the Axel Johnson Inc. Retirement Plan and 4.30% for the Axel Johnson Inc. Retirement Restoration Plan, (ii) the RP-2014 annuitant table and the MP-2015 mortality improvement scale and (iii) expected long-term rate of return on plan assets of 6.75%.
|
1.1% of final average compensation
|
x
|
Credited service (up to 40 years, rounded to the
nearest month)
|
+
|
0.4% of final average compensation in excess of social security covered compensation
|
x
|
Credited service
(up to 35 years, rounded to the nearest month)
|
Name
|
Cash Severance ($)(1)
|
|
Outplacement
Support ($)(2)
|
|
Health and
Dental ($)(3)
|
|
Accelerated Equity ($)(4)
|
|
Total Severance
Benefits ($)
|
|||||
David C. Glendon
|
350,000
|
|
|
6,000
|
|
|
17,019
|
|
|
58,352
|
|
|
431,371
|
|
Gary A. Rinaldi
|
350,000
|
|
|
6,000
|
|
|
12,843
|
|
|
58,352
|
|
|
427,195
|
|
Thomas F. Flaherty
|
258,234
|
|
|
6,000
|
|
|
17,019
|
|
|
—
|
|
|
281,253
|
|
Steven D. Scammon
|
273,358
|
|
|
6,000
|
|
|
17,193
|
|
|
—
|
|
|
296,551
|
|
John W. Moore
|
251,569
|
|
|
6,000
|
|
|
17,193
|
|
|
33,341
|
|
|
308,103
|
|
(1)
|
Amounts in this column reflect the Named Executive Officers’ base salaries in effect as of December 31, 2015. The severance amounts are payable by the Company on a monthly basis for the first year following termination of employment.
|
(2)
|
Amounts in this column reflect the estimated cost to us of providing outplacement services to the Named Executive Officers over a six-month period; however, such services would be provided by an outside vendor and could vary based on the individual needs of each Named Executive Officer.
|
(3)
|
Amounts in this column reflect the value of continued health and dental benefits based on the value of the benefits received by each individual as of December 31, 2015.
|
(4)
|
Amounts in this column reflect the value received by the Named Executive Officers as a result of the accelerated vesting of the time-based phantom unit awards granted on March 31, 2014. These awards provide for full acceleration of vesting of any unvested time-based phantom units granted thereunder in the event of (i) the Named Executive Officer’s termination of employment by reason of death or Disability (as defined below) or (ii) a Change of Control (as defined below). When calculating the value of the accelerated vesting for the time-based phantom unit awards received by each of the Named Executive Officers, we assumed a market value of $20.17 per common unit-the closing price of our common units on December 31, 2015.
|
|
(1)
|
Messrs. Glendon and Rinaldi serve as our Named Executive Officers and are not included in this table because they receive no compensation for their services as directors and the compensation received by Messrs. Glendon and Rinaldi as our Named Executive Officers is shown in the Summary Compensation Table.
|
(2)
|
Messrs. Milligan and Hennelly and Ms. Sarsfield, as officers of Axel Johnson, do not receive separate compensation for their services as directors.
|
(3)
|
The amounts in this column reflect the aggregate dollar amount of fees earned or paid in cash including annual retainer fees and chairmanship or membership fees. Mr. Evans served on the Conflicts Committee (Chairman) and the Audit Committee, and Mr. Harper served on the Audit Committee (Chairman) and Conflicts Committee. Ms. Bowman is a member of the Audit Committee and the Conflicts Committee.
|
(4)
|
Represents the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“FASB ASC Topic 718”). Messrs. Evans and Harper and Ms. Bowman all received the annual grant valued at approximately $60,000 in October 2015. Please see Note 19 to our Consolidated Financial Statements for assumptions used in valuing our Common Units.
|
(5)
|
On December 31, 2015, two of our directors held outstanding, unvested awards for service as follows: Mr. Evans—1,111 Restricted Units; and Mr. Harper—1,111 Restricted Units.
|
•
|
each person known by us to be a beneficial owner of more than 5% of our outstanding units, including Sprague Holdings;
|
•
|
each of the directors of and nominees to our General Partner’s board of directors;
|
•
|
each of the named executive officers of our General Partner; and
|
•
|
all of the directors, director nominees and executive officers of our General Partner as a group.
|
Name of Beneficial Owner
|
Common Units
Beneficially
Owned
|
|
Percentage of
Common Units
Beneficially
Owned
|
|
Subordinated
Units
Beneficially
Owned
|
|
Percentage of
Subordinated
Units
Beneficially
Owned
|
|
Percentage of
Common and
Subordinated
Units
Beneficially
Owned
|
||||||
Sprague Holdings LLC (1)(2)
|
2,034,378
|
|
|
18.1
|
%
|
|
10,071,970
|
|
|
100.0
|
%
|
|
56.8
|
%
|
|
Axel Johnson (2)(3)
|
2,034,378
|
|
|
18.1
|
%
|
|
10,071,970
|
|
|
100.0
|
%
|
|
56.8
|
%
|
|
Lexa International Corporation (2)(4)
|
2,034,378
|
|
|
18.1
|
%
|
|
10,071,970
|
|
|
100.0
|
%
|
|
56.8
|
%
|
|
Antonia Ax:son Johnson (2)(5)
|
2,034,378
|
|
|
18.1
|
%
|
|
10,071,970
|
|
|
100.0
|
%
|
|
56.8
|
%
|
|
Oppenheimer Funds, Inc. (6)
|
1,656,388
|
|
|
14.7
|
%
|
|
—
|
|
|
—
|
|
|
7.8
|
%
|
|
Kayne Anderson Capital Advisors (7)
|
1,613,742
|
|
|
14.4
|
%
|
|
—
|
|
|
—
|
|
|
7.6
|
%
|
|
Goldman Sachs Asset Management (8)
|
1,268,544
|
|
|
11.3
|
%
|
|
—
|
|
|
—
|
|
|
6.0
|
%
|
|
David C. Glendon
|
64,181
|
|
(9
|
)
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Gary A. Rinaldi
|
59,689
|
|
(10
|
)
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
John W. Moore
|
22,367
|
|
(11
|
)
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Thomas E. Flaherty
|
22,341
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
|
Michael D. Milligan
|
20,000
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
|
Steven D. Scammon
|
17,822
|
|
|
*
|
|
|
|
|
|
|
*
|
|
|||
Robert B. Evans
|
9,475
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
|
C. Gregory Harper
|
9,475
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
|
Beth A. Bowman
|
5,149
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
|
Sally A. Sarsfield
|
4,100
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
|
Ben J. Hennelly
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
All executive officers and directors of our General Partner as a group (15 persons)
|
316,535
|
|
(12
|
)
|
2.8
|
%
|
|
—
|
|
|
—
|
|
|
1.5
|
%
|
|
*
|
Represents less than 1%.
|
(1)
|
The address for this entity is 185 International Drive, Portsmouth, NH 03801.
|
(2)
|
Common units and subordinated units shown as beneficially owned by Axel Johnson, Lexa International Corporation and Antonia Ax:son Johnson reflect common units and subordinated units owned of record by Sprague Holdings. Sprague Holdings is a wholly-owned subsidiary of Axel Johnson and, as such, Axel Johnson may be deemed to share beneficial ownership of the units beneficially owned by Sprague Holdings and its subsidiaries, but disclaims such beneficial ownership. Axel Johnson is a wholly-owned subsidiary of Lexa International Corporation and, as such, Lexa International Corporation may be deemed to share beneficial ownership of the units beneficially owned by Sprague
|
(3)
|
The address for this entity is 155 Spring Street, 6th Floor, New York, NY 10012.
|
(4)
|
The address for this entity is 2410 Old Ivy Road, Suite 300, Charlottesville, VA 22903.
|
(5)
|
The address for this person is c/o Axel Johnson AB, Villagatan 6, P.O. Box 26008, SE-100 41 Stockholm, Sweden.
|
(6)
|
The address for this entity is 2 World Financial Center, 225 Liberty Street, New York, NY 10281. Oppenheimer Funds, Inc. reports shared voting power and shared dispositive power for 1,656,388 common units. Oppenheimer SteelPath MLP Income Fund, whose address is 6803 S. Tuscon Way, Centennial, CO 80112-3924, reported that they have shared voting power and shared dispositive power with respect to 1,530,958 common units. Oppenheimer Funds, Inc. reported beneficial ownership of 1,656,388 common units which includes 1,530,958 common units beneficially owned by Oppenheimer SteelPath MLP Income Fund. Beneficial ownership reported based solely on a Schedule 13G filed on February 5, 2016.
|
(7)
|
The address for this entity is 1800 Avenue of the Stars, Third Floor, Los Angeles, CA 90067. Kayne Anderson Capital Advisors, L.P. and Richard A. Kayne have reported that they have shared voting and dispositive power with respect to all of the 1,613,742 common units. Beneficial ownership reported based solely on a Schedule 13G filed on January 27, 2016.
|
(8)
|
Goldman Sachs Asset Management, L.P., together with GS Investment Strategies, LLC jointly filed by Goldman Sachs Asset Management. The address for this entity is 200 West Street, New York, NY 10282. Goldman Sachs Asset Management has reported that it has shared voting and dispositive power with respect to all of the 1,268,544 common units. Beneficial ownership reported based solely on a Schedule 13G filed on February 10, 2016.
|
(9)
|
Includes 2,893 units that will vest and net settle within 60 days of
March 4, 2016
.
|
(10)
|
Includes 2,893 units that will vest and net settle within 60 days of
March 4, 2016
.
|
(11)
|
Includes 1,653 units that will vest and net settle within 60 days of
March 4, 2016
.
|
(12)
|
The address of each of the executive officers and directors is 185 International Drive, Portsmouth, NH 03801. Except as noted in the footnotes to this table, common units beneficially owned by executive officers and directors consist of units owned by the indicated person. Includes 9,919 units that will vest and net settle within 60 days of
March 4, 2016
.
|
|
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
|
Number of Securities remaining
available for future issuance under
equity compensation plans (excluding securities
reflected in column (a))
|
|||
Plan Category
|
|
(a)(1)
|
|
(b)(2)
|
|
(c)
|
|||
Equity compensation plans approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
Equity compensation plans not approved by security holders
|
|
261,994
|
|
|
—
|
|
|
304,483
|
|
|
(1)
|
Awards in this column represent the total number of all performance-based phantom units granted under our LTIP and outstanding as of
December 31, 2015
. We have not granted any stock option awards.
|
(2)
|
The outstanding phantom units do not have an exercise price. As such, there is no weighted average exercise price to report for outstanding awards.
|
•
|
Any acquisition of any additional interests in any assets or businesses owned by Axel Johnson or its controlled affiliates at the time of the IPO but not contributed to us in connection with the IPO, including any replacements and natural extensions thereof;
|
•
|
Any investment in or acquisition of any assets or businesses primarily engaged in the businesses in which we are engaged as of the closing of the IPO and that do not operate primarily in the United States or Quebec, Ontario or the Maritimes, Canada;
|
•
|
Any investment in or acquisition of a minority non-controlling interest in any assets or businesses primarily engaged in the businesses described above; or
|
•
|
Any investment in or acquisition of any assets or businesses that Axel Johnson or its controlled affiliates, at the time of the closing of the IPO, are actively seeking to invest in or acquire, or have the right to invest in or acquire.
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
||||||
Audit Fees (1)
|
$
|
2,086,000
|
|
|
$
|
2,520,000
|
|
|
$
|
1,550,000
|
|
Audit-Related Fees
|
10,000
|
|
|
—
|
|
|
—
|
|
|||
Tax Fees (2)
|
405,000
|
|
|
325,000
|
|
|
710,000
|
|
|||
All Other Fees
|
5,000
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
2,506,000
|
|
|
$
|
2,845,000
|
|
|
$
|
2,260,000
|
|
|
(1)
|
Fees for audit services billed or expected to be billed consisted of the audit of our annual financial statements, reviews of our interim financial statements and services associated with SEC registration statements and other SEC matters.
|
(2)
|
Fees for tax services billed or expected to be billed consisted of services associated with the SEC registration statements, services related to tax compliance and services related to the review of our partnership Form K-1.
|
(a)
|
Financial Statements, Financial Statement Schedules and Exhibits—The following documents are filed as part of this Annual Report on Form 10-K for the year ended
December 31, 2015
.
|
1.
|
Sprague Resources LP Audited Consolidated and Combined Financial Statements:
|
|
Page
|
2.
|
Financial Statement Schedules—No schedules are included because the required information is inapplicable or is presented in the Consolidated and Combined Financial Statements or related notes thereto.
|
3.
|
Exhibits
:
|
|
The list of exhibits attached to this Annual Report on Form 10-K is incorporated herein by reference.
|
Sprague Resources LP
|
|
|
|
By:
|
Sprague Resources GP LLC, its General Partner
|
|
|
By:
|
/s/ David C. Glendon
|
|
David C. Glendon
|
|
President, Chief Executive Officer
|
|
(On behalf of the registrant, and in his capacity as principal executive officer)
|
|
|
Date:
|
March 10, 2016
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Michael D. Milligan
|
|
|
|
March 10, 2016
|
Michael D. Milligan
|
|
Chairman of the Board of Directors
|
|
|
|
|
|
|
|
/s/ David C. Glendon
|
|
|
|
March 10, 2016
|
David C. Glendon
|
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Gary A. Rinaldi
|
|
|
|
March 10, 2016
|
Gary A. Rinaldi
|
|
Senior Vice President, Chief Operating Officer and Chief Financial Officer and Director (Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Beth A. Bowman
|
|
|
|
March 10, 2016
|
Beth A. Bowman
|
|
Director
|
|
|
|
|
|
|
|
/s/ Robert B. Evans
|
|
|
|
March 10, 2016
|
Robert B. Evans
|
|
Director
|
|
|
|
|
|
|
|
/s/ C. Gregory Harper
|
|
|
|
March 10, 2016
|
C. Gregory Harper
|
|
Director
|
|
|
|
|
|
|
|
/s/ Ben J. Hennelly
|
|
|
|
March 10, 2016
|
Ben J. Hennelly
|
|
Director
|
|
|
|
|
|
|
|
/s/ Sally A. Sarsfield
|
|
|
|
March 10, 2016
|
Sally A. Sarsfield
|
|
Director
|
|
|
|
Page
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
30,974
|
|
|
$
|
4,080
|
|
Accounts receivable, net
|
160,848
|
|
|
289,424
|
|
||
Inventories
|
241,320
|
|
|
390,555
|
|
||
Fair value of derivative assets
|
157,714
|
|
|
229,890
|
|
||
Deferred income taxes
|
—
|
|
|
895
|
|
||
Other current assets
|
57,006
|
|
|
52,416
|
|
||
Total current assets
|
647,862
|
|
|
967,260
|
|
||
Property, plant, and equipment, net
|
250,909
|
|
|
250,126
|
|
||
Assets held for sale
|
—
|
|
|
1,321
|
|
||
Intangibles, net
|
22,113
|
|
|
27,626
|
|
||
Other assets, net
|
16,160
|
|
|
30,219
|
|
||
Goodwill
|
63,288
|
|
|
63,288
|
|
||
Total assets
|
$
|
1,000,332
|
|
|
$
|
1,339,840
|
|
Liabilities and unitholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
91,387
|
|
|
$
|
198,609
|
|
Accrued liabilities
|
47,840
|
|
|
63,816
|
|
||
Fair value of derivative liabilities
|
37,178
|
|
|
89,176
|
|
||
Due to General Partner and affiliate
|
14,021
|
|
|
15,340
|
|
||
Current portion of long-term debt
|
332,914
|
|
|
397,214
|
|
||
Current portion of capital leases
|
1,002
|
|
|
1,313
|
|
||
Total current liabilities
|
524,342
|
|
|
765,468
|
|
||
Commitments and contingencies (Note 18)
|
—
|
|
|
—
|
|
||
Long-term debt
|
283,561
|
|
|
418,356
|
|
||
Long-term capital leases
|
3,623
|
|
|
5,424
|
|
||
Other liabilities
|
14,995
|
|
|
17,884
|
|
||
Due to General Partner
|
1,264
|
|
|
988
|
|
||
Deferred income taxes
|
15,062
|
|
|
15,826
|
|
||
Total liabilities
|
842,847
|
|
|
1,223,946
|
|
||
Unitholders’ equity:
|
|
|
|
||||
Common unitholders—public (8,977,378 and 8,777,922 units issued and outstanding, as of December 31, 2015 and 2014, respectively)
|
189,483
|
|
|
171,055
|
|
||
Common unitholders—affiliated (2,034,378 units issued and outstanding)
|
(1,370
|
)
|
|
(5,566
|
)
|
||
Subordinated unitholders—affiliated (10,071,970 units issued and outstanding)
|
(18,989
|
)
|
|
(39,762
|
)
|
||
Accumulated other comprehensive loss, net of tax
|
(11,639
|
)
|
|
(9,833
|
)
|
||
Total unitholders’ equity
|
157,485
|
|
|
115,894
|
|
||
Total liabilities and unitholders’ equity
|
$
|
1,000,332
|
|
|
$
|
1,339,840
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net sales
|
$
|
3,481,914
|
|
|
$
|
5,069,762
|
|
|
$
|
4,683,349
|
|
Cost of products sold (exclusive of depreciation and amortization)
|
3,188,924
|
|
|
4,755,031
|
|
|
4,554,188
|
|
|||
Operating expenses
|
71,468
|
|
|
62,993
|
|
|
53,273
|
|
|||
Selling, general and administrative
|
94,403
|
|
|
76,420
|
|
|
55,210
|
|
|||
Depreciation and amortization
|
20,342
|
|
|
17,625
|
|
|
16,515
|
|
|||
Total operating costs and expenses
|
3,375,137
|
|
|
4,912,069
|
|
|
4,679,186
|
|
|||
Operating income
|
106,777
|
|
|
157,693
|
|
|
4,163
|
|
|||
Other income (expense)
|
298
|
|
|
(288
|
)
|
|
568
|
|
|||
Interest income
|
456
|
|
|
569
|
|
|
604
|
|
|||
Interest expense
|
(27,367
|
)
|
|
(29,651
|
)
|
|
(30,914
|
)
|
|||
Income (loss) before income taxes
|
80,164
|
|
|
128,323
|
|
|
(25,579
|
)
|
|||
Income tax provision
|
(1,816
|
)
|
|
(5,509
|
)
|
|
(4,259
|
)
|
|||
Net income (loss)
|
$
|
78,348
|
|
|
$
|
122,814
|
|
|
$
|
(29,838
|
)
|
Add/(deduct):
|
|
|
|
|
|
||||||
Predecessor income through October 29, 2013
|
—
|
|
|
—
|
|
|
(2,734
|
)
|
|||
(Income) loss attributable to Kildair from October 29, 2013 through December 8th, 2014 (Note 2)
|
—
|
|
|
(4,080
|
)
|
|
2,338
|
|
|||
Incentive distributions declared
|
(321
|
)
|
|
—
|
|
|
—
|
|
|||
Limited partners’ interest in net income (loss)
|
$
|
78,027
|
|
|
$
|
118,734
|
|
|
$
|
(30,234
|
)
|
Net income (loss) per limited partner unit:
|
|
|
|
|
|
||||||
Common—basic
|
$
|
3.71
|
|
|
$
|
5.88
|
|
|
$
|
(1.50
|
)
|
Common—diluted
|
$
|
3.65
|
|
|
$
|
5.84
|
|
|
$
|
(1.50
|
)
|
Subordinated—basic and diluted
|
$
|
3.71
|
|
|
$
|
5.88
|
|
|
$
|
(1.50
|
)
|
Weighted-average units used to compute net income (loss) per limited partner unit:
|
|
|
|
|
|
||||||
Common—basic
|
10,975,941
|
|
|
10,131,928
|
|
|
10,071,970
|
|
|||
Common—diluted
|
11,141,333
|
|
|
10,195,566
|
|
|
10,071,970
|
|
|||
Subordinated—basic and diluted
|
10,071,970
|
|
|
10,071,970
|
|
|
10,071,970
|
|
|||
Distribution declared per common and subordinated units
|
$
|
1.9800
|
|
|
$
|
1.7400
|
|
|
$
|
0.2825
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net income (loss)
|
$
|
78,348
|
|
|
$
|
122,814
|
|
|
$
|
(29,838
|
)
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||||||
Unrealized (loss) gain on interest rate swaps (Note 17)
|
|
|
|
|
|
||||||
Net loss arising in the period
|
(939
|
)
|
|
(531
|
)
|
|
(376
|
)
|
|||
Reclassification adjustment related to losses realized in income
|
504
|
|
|
2,501
|
|
|
5,121
|
|
|||
Net change in unrealized (gain) loss on interest rate swaps
|
(435
|
)
|
|
1,970
|
|
|
4,745
|
|
|||
Tax effect
|
15
|
|
|
(50
|
)
|
|
(1,585
|
)
|
|||
|
(420
|
)
|
|
1,920
|
|
|
3,160
|
|
|||
Foreign currency translation adjustment
|
(1,386
|
)
|
|
(1,143
|
)
|
|
(3,476
|
)
|
|||
Unrealized loss on inter-entity long-term foreign currency transactions
|
—
|
|
|
—
|
|
|
(3,500
|
)
|
|||
Other comprehensive (loss) income
|
(1,806
|
)
|
|
777
|
|
|
(3,816
|
)
|
|||
Comprehensive income (loss)
|
$
|
76,542
|
|
|
$
|
123,591
|
|
|
$
|
(33,654
|
)
|
|
|
|
Partnership
|
||||||||||||||||||||||||
|
Predecessor
Member’s
Equity
|
|
Common-
Public
|
|
Common-
Sprague
Holdings
|
|
Subordinated
Sprague
Holdings
|
|
Incentive Distribution Rights
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
||||||||||||||
Balance as of December 31, 2012
|
$
|
146,779
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5,573
|
)
|
|
$
|
141,206
|
|
Net income
|
2,734
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,734
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,630
|
)
|
|
(3,630
|
)
|
|||||||
Dividend
|
(40,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,000
|
)
|
|||||||
Capital contribution
|
18,835
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,835
|
|
|||||||
Balance at October 29, 2013
|
128,348
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,203
|
)
|
|
119,145
|
|
|||||||
Net assets not assumed by the Partnership
|
(154,130
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,221
|
)
|
|
(155,351
|
)
|
|||||||
Allocation of net Parent investment to unitholders
|
25,782
|
|
|
—
|
|
|
(3,481
|
)
|
|
(22,301
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Proceeds from initial public offerings, net
|
—
|
|
|
140,251
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140,251
|
|
|||||||
Partnership net loss
|
—
|
|
|
(12,758
|
)
|
|
(2,674
|
)
|
|
(17,140
|
)
|
|
—
|
|
|
—
|
|
|
(32,572
|
)
|
|||||||
Unit-based compensation
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(186
|
)
|
|
(186
|
)
|
|||||||
Balance as of December 31, 2013
|
—
|
|
|
127,496
|
|
|
(6,155
|
)
|
|
(39,438
|
)
|
|
—
|
|
|
(10,610
|
)
|
|
71,293
|
|
|||||||
Net income
|
—
|
|
|
50,141
|
|
|
9,953
|
|
|
62,720
|
|
|
—
|
|
|
—
|
|
|
122,814
|
|
|||||||
Other comprehensive income.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
777
|
|
|
777
|
|
|||||||
Unit-based compensation
|
—
|
|
|
1,528
|
|
|
286
|
|
|
1,803
|
|
|
—
|
|
|
—
|
|
|
3,617
|
|
|||||||
Distribution to unitholders
|
—
|
|
|
(13,370
|
)
|
|
(2,460
|
)
|
|
(15,764
|
)
|
|
—
|
|
|
—
|
|
|
(31,594
|
)
|
|||||||
Distribution to sponsor for Kildair acquisition
|
—
|
|
|
—
|
|
|
(17,652
|
)
|
|
(49,015
|
)
|
|
—
|
|
|
—
|
|
|
(66,667
|
)
|
|||||||
Common units issued for Kildair acquisition
|
—
|
|
|
—
|
|
|
10,002
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,002
|
|
|||||||
Common units issued for Castle acquisition
|
—
|
|
|
5,318
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,318
|
|
|||||||
Other contributions from Parent
|
—
|
|
|
—
|
|
|
470
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
470
|
|
|||||||
Units withheld for employee tax obligation
|
—
|
|
|
(58
|
)
|
|
(10
|
)
|
|
(68
|
)
|
|
—
|
|
|
—
|
|
|
(136
|
)
|
|||||||
Balance as of December 31, 2014
|
—
|
|
|
171,055
|
|
|
(5,566
|
)
|
|
(39,762
|
)
|
|
—
|
|
|
(9,833
|
)
|
|
115,894
|
|
|||||||
Net income
|
—
|
|
|
33,218
|
|
|
7,558
|
|
|
37,418
|
|
|
154
|
|
|
—
|
|
|
78,348
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,806
|
)
|
|
(1,806
|
)
|
|||||||
Unit-based compensation
|
—
|
|
|
1,284
|
|
|
292
|
|
|
1,446
|
|
|
—
|
|
|
—
|
|
|
3,022
|
|
|||||||
Distribution to unitholders
|
—
|
|
|
(17,172
|
)
|
|
(3,906
|
)
|
|
(19,337
|
)
|
|
(154
|
)
|
|
—
|
|
|
(40,569
|
)
|
|||||||
Common units issued with annual bonus
|
—
|
|
|
2,088
|
|
|
479
|
|
|
2,372
|
|
|
—
|
|
|
—
|
|
|
4,939
|
|
|||||||
Units withheld for employee tax obligation
|
—
|
|
|
(990
|
)
|
|
(227
|
)
|
|
(1,126
|
)
|
|
—
|
|
|
—
|
|
|
(2,343
|
)
|
|||||||
Balance as of December 31, 2015
|
$
|
—
|
|
|
$
|
189,483
|
|
|
$
|
(1,370
|
)
|
|
$
|
(18,989
|
)
|
|
$
|
—
|
|
|
$
|
(11,639
|
)
|
|
$
|
157,485
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
78,348
|
|
|
$
|
122,814
|
|
|
$
|
(29,838
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization (includes amortization of deferred debt issue costs)
|
23,893
|
|
|
22,441
|
|
|
20,432
|
|
|||
Gain on sale of assets and insurance recoveries
|
(269
|
)
|
|
(87
|
)
|
|
(779
|
)
|
|||
Impairments on terminal asset
|
—
|
|
|
288
|
|
|
—
|
|
|||
Provision for doubtful accounts
|
1,589
|
|
|
2,350
|
|
|
887
|
|
|||
Non-cash unit-based compensation
|
8,436
|
|
|
8,182
|
|
|
6
|
|
|||
Deferred income taxes
|
147
|
|
|
2,467
|
|
|
(9,014
|
)
|
|||
Changes in assets and liabilities, net of effects of Kildair contribution agreement:
|
|
|
|
|
|
||||||
Accounts receivable
|
127,202
|
|
|
(19,135
|
)
|
|
(158,191
|
)
|
|||
Inventories
|
149,236
|
|
|
84,456
|
|
|
30,635
|
|
|||
Prepaid expenses and other assets
|
7,751
|
|
|
15,254
|
|
|
480
|
|
|||
Fair value of commodity derivative instruments
|
19,754
|
|
|
(242,596
|
)
|
|
51,487
|
|
|||
Due to/from General Partner and affiliates
|
(1,066
|
)
|
|
11,964
|
|
|
5,052
|
|
|||
Accounts payable, accrued liabilities and other
|
(127,408
|
)
|
|
7,166
|
|
|
8,180
|
|
|||
Net cash provided by (used in) operating activities
|
287,613
|
|
|
15,564
|
|
|
(80,663
|
)
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
(14,899
|
)
|
|
(18,580
|
)
|
|
(28,090
|
)
|
|||
Proceeds from property insurance settlements and sale of assets
|
781
|
|
|
1,603
|
|
|
2,039
|
|
|||
Acquisitions, net of cash acquired
|
(447
|
)
|
|
(115,515
|
)
|
|
(20,700
|
)
|
|||
Net cash used in investing activities
|
(14,565
|
)
|
|
(132,492
|
)
|
|
(46,751
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Net (payments) borrowings under credit agreements
|
(198,917
|
)
|
|
244,739
|
|
|
28,387
|
|
|||
Payments on capital lease liabilities and term debt
|
(1,373
|
)
|
|
(848
|
)
|
|
(2,342
|
)
|
|||
Payments on long-term terminal obligations
|
(559
|
)
|
|
(602
|
)
|
|
(459
|
)
|
|||
Debt issue costs
|
(1,938
|
)
|
|
(4,432
|
)
|
|
(16,699
|
)
|
|||
Dividend paid to Parent
|
—
|
|
|
—
|
|
|
(40,000
|
)
|
|||
Distributions to unitholders
|
(40,569
|
)
|
|
(31,594
|
)
|
|
—
|
|
|||
Capital contribution from Parent
|
—
|
|
|
—
|
|
|
10,000
|
|
|||
Proceeds from initial public offering, net of offering costs of $12.7 million
|
—
|
|
|
—
|
|
|
140,251
|
|
|||
Foreign exchange on capital lease obligations
|
(266
|
)
|
|
(184
|
)
|
|
—
|
|
|||
Repurchased units withheld for employee tax obligation.
|
(2,343
|
)
|
|
(136
|
)
|
|
—
|
|
|||
Cash distribution to Parent in connection with initial public offering
|
—
|
|
|
—
|
|
|
(10,038
|
)
|
|||
Net (payments) borrowings to Parent and affiliate
|
—
|
|
|
(32,035
|
)
|
|
17,500
|
|
|||
Distribution to Parent for contribution of Kildair
|
—
|
|
|
(56,665
|
)
|
|
—
|
|
|||
Net increase (decrease) in payable to Parent
|
—
|
|
|
147
|
|
|
(641
|
)
|
|||
Net cash (used in) provided by financing activities
|
(245,965
|
)
|
|
118,390
|
|
|
125,959
|
|
|||
Effect of exchange rate changes on cash balances held in foreign currencies
|
(189
|
)
|
|
572
|
|
|
(190
|
)
|
|||
Net change in cash and cash equivalents
|
26,894
|
|
|
2,034
|
|
|
(1,645
|
)
|
|||
Cash and cash equivalents, beginning of period
|
4,080
|
|
|
2,046
|
|
|
3,691
|
|
|||
Cash and cash equivalents, end of period
|
$
|
30,974
|
|
|
$
|
4,080
|
|
|
$
|
2,046
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
24,382
|
|
|
$
|
25,036
|
|
|
$
|
26,309
|
|
Cash paid for taxes
|
$
|
3,929
|
|
|
$
|
1,827
|
|
|
$
|
3,392
|
|
Fair value of common units issued in connection with acquisitions
|
$
|
—
|
|
|
$
|
15,320
|
|
|
$
|
—
|
|
1.
|
Description of Business and Summary of Significant Accounting Policies
|
Furniture and fixtures
|
5 to 10 years
|
Plant, machinery and equipment
|
5 to 30 years
|
Building and leasehold improvements
|
10 to 25 years
|
2.
|
Business Combinations
|
3.
|
Accumulated Other Comprehensive Loss, Net of Tax
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Fair value of interest rate swaps, net of tax
|
$
|
(826
|
)
|
|
$
|
(406
|
)
|
Cumulative foreign currency translation adjustment
|
(10,813
|
)
|
|
(9,427
|
)
|
||
Accumulated other comprehensive loss, net of tax
|
$
|
(11,639
|
)
|
|
$
|
(9,833
|
)
|
4.
|
Accounts Receivable, Net
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Accounts receivable, trade
|
$
|
154,497
|
|
|
$
|
280,657
|
|
Less allowance for doubtful accounts
|
(4,139
|
)
|
|
(3,976
|
)
|
||
Net accounts receivable, trade
|
150,358
|
|
|
276,681
|
|
||
Accounts receivable, other
|
10,490
|
|
|
12,743
|
|
||
Accounts receivable, net
|
$
|
160,848
|
|
|
$
|
289,424
|
|
|
Balance at
Beginning
of Period
|
|
Charged to
Expense
|
|
Charged (to)
from Another
Account
|
|
Deductions
|
|
Balance at
End of
Period
|
||||||||||
Balance, December 31, 2015:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
3,976
|
|
|
$
|
1,589
|
|
|
$
|
7
|
|
|
$
|
1,433
|
|
|
$
|
4,139
|
|
Allowance for notes receivable
|
2,367
|
|
|
—
|
|
|
(7
|
)
|
|
959
|
|
|
1,401
|
|
|||||
Total
|
$
|
6,343
|
|
|
$
|
1,589
|
|
|
$
|
—
|
|
|
$
|
2,392
|
|
|
$
|
5,540
|
|
Balance, December 31, 2014:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
1,607
|
|
|
$
|
2,350
|
|
|
$
|
84
|
|
|
$
|
65
|
|
|
$
|
3,976
|
|
Allowance for notes receivable
|
3,515
|
|
|
—
|
|
|
(84
|
)
|
|
1,064
|
|
|
2,367
|
|
|||||
Total
|
$
|
5,122
|
|
|
$
|
2,350
|
|
|
$
|
—
|
|
|
$
|
1,129
|
|
|
$
|
6,343
|
|
Balance, December 31, 2013:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
2,556
|
|
|
$
|
559
|
|
|
$
|
(740
|
)
|
|
$
|
768
|
|
|
$
|
1,607
|
|
Allowance for notes receivable
|
2,847
|
|
|
328
|
|
|
740
|
|
|
400
|
|
|
3,515
|
|
|||||
Total
|
$
|
5,403
|
|
|
$
|
887
|
|
|
$
|
—
|
|
|
$
|
1,168
|
|
|
$
|
5,122
|
|
5.
|
Inventories
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Petroleum and related products
|
$
|
215,048
|
|
|
$
|
366,431
|
|
Asphalt
|
20,677
|
|
|
18,357
|
|
||
Coal
|
3,713
|
|
|
2,380
|
|
||
Natural gas
|
1,882
|
|
|
3,387
|
|
||
Inventories
|
$
|
241,320
|
|
|
$
|
390,555
|
|
6.
|
Other Current Assets
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Margin deposits with brokers
|
$
|
37,089
|
|
|
$
|
22,779
|
|
Deposits
|
5,758
|
|
|
—
|
|
||
Natural gas transportation, current portion
|
2,716
|
|
|
11,748
|
|
||
Income tax receivable
|
1,697
|
|
|
436
|
|
||
Prepaid petroleum products
|
—
|
|
|
8,071
|
|
||
Other
|
9,746
|
|
|
9,382
|
|
||
Other current assets
|
$
|
57,006
|
|
|
$
|
52,416
|
|
7.
|
Property, Plant and Equipment, Net
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Plant, machinery, furniture and fixtures
|
$
|
305,763
|
|
|
$
|
293,080
|
|
Building and leasehold improvements
|
14,698
|
|
|
14,565
|
|
||
Land and land improvements
|
60,687
|
|
|
60,395
|
|
||
Construction in progress
|
6,660
|
|
|
3,238
|
|
||
Property, plant and equipment, gross
|
387,808
|
|
|
371,278
|
|
||
Less: accumulated depreciation
|
(136,899
|
)
|
|
(121,152
|
)
|
||
Property, plant and equipment, net
|
$
|
250,909
|
|
|
$
|
250,126
|
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Plant, machinery, furniture and fixtures
|
$
|
16,457
|
|
|
$
|
16,931
|
|
Building and leasehold improvements
|
4,719
|
|
|
4,719
|
|
||
Land and land improvements
|
251
|
|
|
251
|
|
||
Property, plant and equipment, gross
|
21,427
|
|
|
21,901
|
|
||
Less: accumulated amortization
|
(9,572
|
)
|
|
(8,175
|
)
|
||
Property, plant and equipment, net
|
$
|
11,855
|
|
|
$
|
13,726
|
|
8.
|
Intangibles, Net
|
|
As of December 31, 2015
|
||||||||||||
|
Remaining
Useful
Life (Years)
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Customer relationships
|
3-15
|
|
$
|
30,426
|
|
|
$
|
10,204
|
|
|
$
|
20,222
|
|
Other
|
4-6
|
|
5,121
|
|
|
3,230
|
|
|
1,891
|
|
|||
Intangible assets, net
|
|
|
$
|
35,547
|
|
|
$
|
13,434
|
|
|
$
|
22,113
|
|
|
As of December 31, 2014
|
||||||||||||
|
Remaining
Useful
Life (Years)
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Customer relationships
|
5-16
|
|
$
|
31,961
|
|
|
$
|
6,853
|
|
|
$
|
25,108
|
|
Other
|
5-7
|
|
4,671
|
|
|
2,153
|
|
|
2,518
|
|
|||
Intangible assets, net
|
|
|
$
|
36,632
|
|
|
$
|
9,006
|
|
|
$
|
27,626
|
|
9.
|
Other Assets, Net
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Deferred debt issuance costs, net
|
$
|
14,198
|
|
|
$
|
15,487
|
|
Natural gas transportation, long-term portion
|
368
|
|
|
5,677
|
|
||
Deposits
|
—
|
|
|
6,893
|
|
||
Other
|
1,594
|
|
|
2,162
|
|
||
Other assets, net
|
$
|
16,160
|
|
|
$
|
30,219
|
|
10.
|
Accrued Liabilities
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Customer prepayments and deposits
|
$
|
14,318
|
|
|
$
|
14,665
|
|
Accrued product taxes
|
8,272
|
|
|
18,248
|
|
||
Accrued wages and benefits
|
7,813
|
|
|
6,389
|
|
||
Accrued product costs
|
4,728
|
|
|
10,174
|
|
||
Other
|
12,709
|
|
|
14,340
|
|
||
Other current liabilities
|
$
|
47,840
|
|
|
$
|
63,816
|
|
11.
|
Debt
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Current debt
|
|
|
|
||||
Credit agreement
|
$
|
332,703
|
|
|
$
|
396,961
|
|
Other
|
211
|
|
|
253
|
|
||
Current debt
|
332,914
|
|
|
397,214
|
|
||
Long-term debt
|
|
|
|
||||
Credit agreement
|
283,197
|
|
|
417,789
|
|
||
Other
|
364
|
|
|
567
|
|
||
Long-term debt
|
283,561
|
|
|
418,356
|
|
||
Total debt
|
$
|
616,475
|
|
|
$
|
815,570
|
|
•
|
A U.S. dollar revolving working capital facility of up to
$1.0 billion
to be used for working capital loans and letters of credit in the principal amount equal to the lesser of Sprague’s borrowing base and
$1.0 billion
;
|
•
|
A multicurrency revolving working capital facility of up to
$120.0 million
to be used by Sprague’s Canadian subsidiaries for working capital loans and letters of credit in the principal amount equal to the lesser of Kildair’ s borrowing base and
$120.0 million
.
|
•
|
A revolving acquisition facility of up to
$400.0 million
to be used for loans and letters of credit to fund capital expenditures and acquisitions and other general corporate purposes related to Sprague’s current businesses; and,
|
•
|
Subject to certain conditions, the U.S. dollar or multicurrency revolving working capital facilities may be increased by
$200.0 million
. Additionally, subject to certain conditions, the revolving acquisition facility may be increased by
$200.0 million
.
|
12.
|
Related Party Transactions
|
13.
|
Other Liabilities
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Port Authority terminal obligations
|
$
|
7,850
|
|
|
$
|
8,409
|
|
Postretirement benefit obligations
|
4,030
|
|
|
4,360
|
|
||
Other
|
3,115
|
|
|
5,115
|
|
||
Other liabilities
|
$
|
14,995
|
|
|
$
|
17,884
|
|
14.
|
Income Taxes
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Current
|
|
|
|
|
|
||||||
U.S. Federal income tax
|
$
|
162
|
|
|
$
|
95
|
|
|
$
|
8,572
|
|
State and local income tax
|
1,072
|
|
|
1,499
|
|
|
3,063
|
|
|||
Foreign income taxes
|
435
|
|
|
1,448
|
|
|
755
|
|
|||
Total current income tax provision
|
1,669
|
|
|
3,042
|
|
|
12,390
|
|
|||
Deferred
|
|
|
|
|
|
||||||
U.S. Federal income tax
|
39
|
|
|
(11
|
)
|
|
(3,420
|
)
|
|||
State and local income tax
|
(48
|
)
|
|
1,618
|
|
|
(2,358
|
)
|
|||
Foreign income taxes
|
156
|
|
|
860
|
|
|
(2,353
|
)
|
|||
Total deferred income tax provision (benefit)
|
147
|
|
|
2,467
|
|
|
(8,131
|
)
|
|||
Total income tax provision
|
$
|
1,816
|
|
|
$
|
5,509
|
|
|
$
|
4,259
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
77,993
|
|
|
$
|
120,470
|
|
|
$
|
(15,772
|
)
|
Foreign
|
2,171
|
|
|
7,853
|
|
|
(9,807
|
)
|
|||
Total income (loss) before income taxes
|
$
|
80,164
|
|
|
$
|
128,323
|
|
|
$
|
(25,579
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Statutory U.S. Federal income tax at 35%
|
$
|
28,058
|
|
|
$
|
44,913
|
|
|
$
|
(8,951
|
)
|
Partnership (income) losses not subject to tax
|
(27,076
|
)
|
|
(42,843
|
)
|
|
10,854
|
|
|||
State and local income taxes, net of federal tax
|
1,003
|
|
|
3,111
|
|
|
173
|
|
|||
Foreign income tax (benefit) provision
|
(169
|
)
|
|
328
|
|
|
1,520
|
|
|||
Transaction costs
|
—
|
|
|
—
|
|
|
(55
|
)
|
|||
Other, including non-recurring items
|
—
|
|
|
—
|
|
|
718
|
|
|||
Total income tax provision
|
$
|
1,816
|
|
|
$
|
5,509
|
|
|
$
|
4,259
|
|
|
As of December 31,
|
||||||
|
2015 (1)
|
|
2014
|
||||
Deferred tax assets (liabilities)
|
|
|
|
||||
Bad debts
|
$
|
62
|
|
|
$
|
102
|
|
Inventories
|
110
|
|
|
580
|
|
||
Compensation
|
296
|
|
|
108
|
|
||
Depreciation and amortization
|
(18,115
|
)
|
|
(18,338
|
)
|
||
Other differences, net
|
2,996
|
|
|
3,051
|
|
||
Valuation allowance
|
(411
|
)
|
|
(434
|
)
|
||
Net deferred tax (liabilities)
|
$
|
(15,062
|
)
|
|
$
|
(14,931
|
)
|
Classified in the Consolidated Balance Sheets as follows:
|
|
|
|
||||
Net current deferred tax asset
(1)
|
$
|
—
|
|
|
$
|
895
|
|
Net long-term deferred tax (liability)
|
$
|
(15,062
|
)
|
|
$
|
(15,826
|
)
|
15.
|
Retirement Plans
|
16.
|
Segment Reporting
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net sales:
|
|
|
|
|
|
||||||
Refined products
|
$
|
3,063,858
|
|
|
$
|
4,650,871
|
|
|
$
|
4,331,410
|
|
Natural gas
|
347,453
|
|
|
359,984
|
|
|
304,843
|
|
|||
Materials handling
|
45,570
|
|
|
37,776
|
|
|
28,446
|
|
|||
Other operations
|
25,033
|
|
|
21,131
|
|
|
18,650
|
|
|||
Net sales
|
$
|
3,481,914
|
|
|
$
|
5,069,762
|
|
|
$
|
4,683,349
|
|
Adjusted gross margin (1):
|
|
|
|
|
|
||||||
Refined products
|
$
|
170,448
|
|
|
$
|
146,021
|
|
|
$
|
114,744
|
|
Natural gas
|
51,004
|
|
|
55,536
|
|
|
40,373
|
|
|||
Materials handling
|
45,564
|
|
|
37,811
|
|
|
28,430
|
|
|||
Other operations
|
8,986
|
|
|
5,599
|
|
|
5,547
|
|
|||
Adjusted gross margin
|
276,002
|
|
|
244,967
|
|
|
189,094
|
|
|||
Reconciliation to operating income (2):
|
|
|
|
|
|
||||||
Add: unrealized (loss) gain on inventory (3)
|
(2,079
|
)
|
|
11,070
|
|
|
(4,188
|
)
|
|||
Add: unrealized (loss) on prepaid forward contracts (4)
|
(2,628
|
)
|
|
—
|
|
|
—
|
|
|||
Add: unrealized gain (loss) on natural gas transportation contracts (5)
|
21,695
|
|
|
58,694
|
|
|
(55,745
|
)
|
|||
Operating costs and expenses not allocated to operating segments:
|
|
|
|
|
|
||||||
Operating expenses
|
(71,468
|
)
|
|
(62,993
|
)
|
|
(53,273
|
)
|
|||
Selling, general and administrative
|
(94,403
|
)
|
|
(76,420
|
)
|
|
(55,210
|
)
|
|||
Depreciation and amortization
|
(20,342
|
)
|
|
(17,625
|
)
|
|
(16,515
|
)
|
|||
Operating income
|
106,777
|
|
|
157,693
|
|
|
4,163
|
|
|||
Other income (expense)
|
298
|
|
|
(288
|
)
|
|
568
|
|
|||
Interest income
|
456
|
|
|
569
|
|
|
604
|
|
|||
Interest expense
|
(27,367
|
)
|
|
(29,651
|
)
|
|
(30,914
|
)
|
|||
Income tax provision
|
(1,816
|
)
|
|
(5,509
|
)
|
|
(4,259
|
)
|
|||
Net income (loss)
|
$
|
78,348
|
|
|
$
|
122,814
|
|
|
$
|
(29,838
|
)
|
(1)
|
Adjusted gross margin is a non-GAAP financial measure used by management and external users of the Partnership’s consolidated financial statements to assess the Partnership’s economic results of operations and its market value reporting to lenders. The Partnership adjusts its segment results for the impact of unrealized hedging gains and losses with regard to refined products and natural gas inventory, prepaid forward contracts and natural gas transportation contracts relating to the underlying commodity derivative hedges, which are not marked to market for the purpose of recording unrealized gains or losses in net income (loss). These adjustments align the unrealized hedging gains and losses to the period in which the revenue from the sale of inventory, prepaid fixed forwards and the utilization of transportation contracts relating to those hedges is realized in net income (loss).
|
(2)
|
Reconciliation of adjusted gross margin to operating income, the most directly comparable GAAP measure.
|
(3)
|
Inventory is valued at the lower of cost or market. The fair value of the derivatives the Company uses to economically hedge its inventory declines or appreciates in value as the value of the underlying inventory appreciates or declines, which creates unrealized hedging losses (gains) with respect to the derivatives that are included in net income (loss).
|
(4)
|
The unrealized hedging gain (loss) on prepaid forward contracts represents the Partnership’s estimate of the change in fair value of the prepaid forward contracts which are not recorded in net income (loss) until the forward contract is settled in the future (i.e., when the commodity is delivered to the customer). As these contracts are prepaid, they do not qualify as derivatives. The fair value of the derivatives the Partnership uses to economically hedge its prepaid forward contracts declines or appreciates in value as the value of the underlying forward contract appreciates or declines, which creates unrealized hedging gains (losses) with respect to the derivatives that are included in net income (loss).
|
(5)
|
The unrealized hedging gain (loss) on natural gas transportation contracts represents the Partnership’s estimate of the change in fair value of the natural gas transportation contracts which are not recorded in net income (loss) until the transportation is utilized in the future (i.e., when natural gas is delivered to the customer), as these contracts do not qualify as derivatives. As the fair value of the natural gas transportation contracts decline or appreciate, the offsetting physical or financial derivative will also appreciate or decline creating unmatched unrealized hedging (losses) gains in net income (loss) as of each period end.
|
|
As of
December 31,
2013
|
|
Activity (1)
|
|
As of
December 31,
2014
|
|
Activity
|
|
As of
December 31,
2015
|
||||||||||
Refined products
|
$
|
36,550
|
|
|
$
|
—
|
|
|
$
|
36,550
|
|
|
$
|
—
|
|
|
$
|
36,550
|
|
Natural gas
|
4,383
|
|
|
14,243
|
|
|
18,626
|
|
|
—
|
|
|
18,626
|
|
|||||
Materials handling
|
6,896
|
|
|
—
|
|
|
6,896
|
|
|
—
|
|
|
6,896
|
|
|||||
Other
|
1,216
|
|
|
—
|
|
|
1,216
|
|
|
—
|
|
|
1,216
|
|
|||||
Total
|
$
|
49,045
|
|
|
$
|
14,243
|
|
|
$
|
63,288
|
|
|
$
|
—
|
|
|
$
|
63,288
|
|
(1)
|
Reflects goodwill attributable to the Metromedia Energy acquisition.
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
United States
|
$
|
168,144
|
|
|
$
|
163,963
|
|
Canada
|
82,765
|
|
|
86,163
|
|
||
Total
|
$
|
250,909
|
|
|
$
|
250,126
|
|
17.
|
Financial Instruments and Off-Balance Sheet Risk
|
|
As of December 31, 2015
|
||||||||||||||
|
Fair Value
Measurement
|
|
Quoted
Prices in
Active
Markets
Level 1
|
|
Significant
Other
Observable
Inputs
Level 2
|
|
Significant
Unobservable
Inputs
Level 3
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Commodity fixed forwards
|
$
|
157,389
|
|
|
$
|
—
|
|
|
$
|
157,389
|
|
|
$
|
—
|
|
Commodity swaps and options
|
51
|
|
|
—
|
|
|
51
|
|
|
—
|
|
||||
Commodity derivatives
|
157,440
|
|
|
—
|
|
|
157,440
|
|
|
—
|
|
||||
Interest rate swaps
|
274
|
|
|
—
|
|
|
274
|
|
|
—
|
|
||||
Total
|
$
|
157,714
|
|
|
$
|
—
|
|
|
$
|
157,714
|
|
|
$
|
—
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity fixed forwards
|
$
|
31,801
|
|
|
$
|
—
|
|
|
$
|
31,801
|
|
|
$
|
—
|
|
Commodity swaps and options
|
4,250
|
|
|
—
|
|
|
4,250
|
|
|
—
|
|
||||
Commodity derivatives
|
36,051
|
|
|
—
|
|
|
36,051
|
|
|
—
|
|
||||
Interest rate swaps
|
1,115
|
|
|
—
|
|
|
1,115
|
|
|
—
|
|
||||
Other
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Total
|
$
|
37,178
|
|
|
$
|
—
|
|
|
$
|
37,178
|
|
|
$
|
—
|
|
|
As of December 31, 2014
|
||||||||||||||
|
Fair Value
Measurement
|
|
Quoted
Prices in
Active
Markets
Level 1
|
|
Significant
Other
Observable
Inputs
Level 2
|
|
Significant
Unobservable
Inputs
Level 3
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Commodity fixed forwards
|
$
|
229,679
|
|
|
$
|
—
|
|
|
$
|
229,679
|
|
|
$
|
—
|
|
Commodity swaps and options
|
74
|
|
|
—
|
|
|
74
|
|
|
—
|
|
||||
Commodity derivatives
|
229,753
|
|
|
—
|
|
|
229,753
|
|
|
—
|
|
||||
Interest rate swaps
|
137
|
|
|
—
|
|
|
137
|
|
|
—
|
|
||||
Total
|
$
|
229,890
|
|
|
$
|
—
|
|
|
$
|
229,890
|
|
|
$
|
—
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity exchange contracts
|
$
|
97
|
|
|
$
|
97
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity fixed forwards
|
80,080
|
|
|
—
|
|
|
80,080
|
|
|
—
|
|
||||
Commodity swaps and options
|
8,424
|
|
|
—
|
|
|
8,424
|
|
|
—
|
|
||||
Commodity derivatives
|
88,601
|
|
|
97
|
|
|
88,504
|
|
|
—
|
|
||||
Interest rate swaps
|
553
|
|
|
—
|
|
|
553
|
|
|
—
|
|
||||
Other
|
22
|
|
|
—
|
|
|
22
|
|
|
—
|
|
||||
Total
|
$
|
89,176
|
|
|
$
|
97
|
|
|
$
|
89,079
|
|
|
$
|
—
|
|
|
As of December 31, 2015
|
||||||||||||||||||||||
|
|
|
|
|
|
|
Gross Amount Not Offset
in the Balance Sheet
|
|
Net
Amount
|
||||||||||||||
|
Gross
Amounts of
Recognized
Assets/
Liabilities
|
Gross
Amounts
Offset in the
Balance
Sheet
|
Amounts of
Assets/
Liabilities in
Balance Sheet
|
Financial
Instruments
|
|
Cash
Collateral
Posted
|
|
||||||||||||||||
Commodity derivative assets
|
$
|
157,440
|
|
|
$
|
—
|
|
|
$
|
157,440
|
|
|
$
|
(1,811
|
)
|
|
$
|
(1,798
|
)
|
|
$
|
153,831
|
|
Interest rate swap derivative assets
|
274
|
|
|
—
|
|
|
274
|
|
|
—
|
|
|
—
|
|
|
274
|
|
||||||
Fair value of derivative assets
|
$
|
157,714
|
|
|
$
|
—
|
|
|
$
|
157,714
|
|
|
$
|
(1,811
|
)
|
|
$
|
(1,798
|
)
|
|
$
|
154,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity derivative liabilities
|
$
|
(36,051
|
)
|
|
$
|
—
|
|
|
$
|
(36,051
|
)
|
|
$
|
1,811
|
|
|
$
|
—
|
|
|
$
|
(34,240
|
)
|
Interest rate swap derivative liabilities
|
(1,115
|
)
|
|
—
|
|
|
(1,115
|
)
|
|
—
|
|
|
—
|
|
|
(1,115
|
)
|
||||||
Other liabilities
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||||
Fair value of derivative liabilities
|
$
|
(37,178
|
)
|
|
$
|
—
|
|
|
$
|
(37,178
|
)
|
|
$
|
1,811
|
|
|
$
|
—
|
|
|
$
|
(35,367
|
)
|
|
As of December 31, 2014
|
||||||||||||||||||||||
|
|
|
|
|
|
|
Gross Amount Not Offset
in the Balance Sheet
|
|
Net
Amount
|
||||||||||||||
|
Gross
Amounts of
Recognized
Assets/
Liabilities
|
Gross
Amounts
Offset in the
Balance
Sheet
|
Amounts of
Assets/
Liabilities in
Balance Sheet
|
Financial
Instruments
|
|
Cash
Collateral
Posted
|
|
||||||||||||||||
Commodity derivative assets
|
$
|
229,753
|
|
|
$
|
—
|
|
|
$
|
229,753
|
|
|
$
|
(4,831
|
)
|
|
$
|
(2,417
|
)
|
|
$
|
222,505
|
|
Interest rate swap derivative assets
|
137
|
|
|
—
|
|
|
137
|
|
|
—
|
|
|
—
|
|
|
137
|
|
||||||
Fair value of derivative assets
|
$
|
229,890
|
|
|
$
|
—
|
|
|
$
|
229,890
|
|
|
$
|
(4,831
|
)
|
|
$
|
(2,417
|
)
|
|
$
|
222,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity derivative liabilities
|
$
|
(88,601
|
)
|
|
$
|
—
|
|
|
$
|
(88,601
|
)
|
|
$
|
4,831
|
|
|
$
|
—
|
|
|
$
|
(83,770
|
)
|
Interest rate swap derivative liabilities
|
(553
|
)
|
|
—
|
|
|
(553
|
)
|
|
—
|
|
|
—
|
|
|
(553
|
)
|
||||||
Other liabilities
|
(22
|
)
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
||||||
Fair value of derivative liabilities
|
$
|
(89,176
|
)
|
|
$
|
—
|
|
|
$
|
(89,176
|
)
|
|
$
|
4,831
|
|
|
$
|
—
|
|
|
$
|
(84,345
|
)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Refined products contracts
|
$
|
149,741
|
|
|
$
|
159,751
|
|
|
$
|
(320
|
)
|
Natural gas contracts
|
19,824
|
|
|
30,372
|
|
|
(76,707
|
)
|
|||
Total
|
$
|
169,565
|
|
|
$
|
190,123
|
|
|
$
|
(77,027
|
)
|
|
As of December 31, 2015
|
|
As of December 31, 2014
|
||||
|
Refined Products
(Barrels)
|
|
Natural Gas
(MMBTUs)
|
|
Refined Products
(Barrels)
|
|
Natural Gas
(MMBTUs)
|
Long contracts
|
12,067
|
|
123,711
|
|
10,823
|
|
131,376
|
Short contracts
|
(16,558)
|
|
(75,785)
|
|
(15,434)
|
|
(82,796)
|
Interest Rate Swap Agreements
|
||||||
Beginning
|
|
Ending
|
|
Notional Amount
|
||
January 2016
|
|
January 2017
|
|
$
|
250,000
|
|
September 2016
|
|
April 2017
|
|
$
|
25,000
|
|
January 2017
|
|
January 2018
|
|
$
|
100,000
|
|
18.
|
Commitments and Contingencies
|
|
|
||
2016
|
$
|
1,268
|
|
2017
|
1,010
|
|
|
2018
|
724
|
|
|
2019
|
550
|
|
|
2020
|
488
|
|
|
Thereafter
|
1,811
|
|
|
Total
|
5,851
|
|
|
Less amounts representing interest at rates between 3.7% and 7.4%
|
(1,226
|
)
|
|
Present value of net minimum capital lease payments
|
$
|
4,625
|
|
|
|
||
2016
|
$
|
15,450
|
|
2017
|
15,604
|
|
|
2018
|
14,835
|
|
|
2019
|
10,101
|
|
|
2020
|
3,421
|
|
19.
|
Equity-Based Compensation
|
|
Time-Based and
Restricted Units
|
|
Performance-Based
Phantom Units
|
||||||||||
|
Units
|
|
Weighted
Average
Grant
Date Fair
Value
(per unit)
|
|
Units
|
|
Weighted
Average
Grant
Date Fair
Value
(per unit)
|
||||||
Nonvested at December 31, 2014
|
28,129
|
|
|
$
|
19.71
|
|
|
111,075
|
|
|
$
|
36.88
|
|
Granted
|
—
|
|
|
—
|
|
|
141,000
|
|
|
31.58
|
|
||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Vested
|
(15,988
|
)
|
|
(19.77
|
)
|
|
(37,024
|
)
|
|
(36.88
|
)
|
||
Nonvested at December 31, 2015
|
12,141
|
|
|
$
|
19.63
|
|
|
215,051
|
|
|
$
|
33.40
|
|
|
Common Units
|
|
|
|||||
|
Public
|
|
Sprague
Holdings
|
|
Subordinated
Units
|
|||
Balance as of October 29, 2013
|
—
|
|
|
—
|
|
|
—
|
|
Units issued in connection with initial public offering
|
8,500,000
|
|
|
1,571,970
|
|
|
10,071,970
|
|
Restricted unit awards
|
6,666
|
|
|
—
|
|
|
—
|
|
Balance as of December 31, 2013
|
8,506,666
|
|
|
1,571,970
|
|
|
10,071,970
|
|
Employee and Director vested awards
|
27,401
|
|
|
—
|
|
|
—
|
|
Units issued in connection with Castle acquisition
|
243,855
|
|
|
—
|
|
|
—
|
|
Units issued in connection with Kildair acquisition
|
—
|
|
|
462,408
|
|
|
—
|
|
Balance as of December 31, 2014
|
8,777,922
|
|
|
2,034,378
|
|
|
10,071,970
|
|
Units issued in connection with employee bonus
|
133,634
|
|
|
—
|
|
|
—
|
|
Units issued in connection with phantom and performance awards
|
58,358
|
|
|
—
|
|
|
—
|
|
Director vested awards
|
7,464
|
|
|
—
|
|
|
—
|
|
Balance as of December 31, 2015
|
8,977,378
|
|
|
2,034,378
|
|
|
10,071,970
|
|
20.
|
Earnings Per Unit Calculation
|
|
Years Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Weighted average limited partner common units - basic
|
10,975,941
|
|
|
10,131,928
|
|
|
10,071,970
|
|
Dilutive effect of unvested restricted and phantom units
|
165,392
|
|
|
63,638
|
|
|
—
|
|
Weighted average limited partner common units - dilutive
|
11,141,333
|
|
|
10,195,566
|
|
|
10,071,970
|
|
|
Year Ended December 31, 2015
|
||||||||||||||
|
Common
|
|
Subordinated
|
|
IDR
|
|
Total
|
||||||||
|
(in thousands, except for per unit amounts)
|
||||||||||||||
Net income
|
|
|
|
|
|
|
$
|
78,348
|
|
||||||
Distributions declared
|
$
|
21,826
|
|
|
$
|
19,943
|
|
|
$
|
321
|
|
|
$
|
42,090
|
|
Assumed net income from operations after distributions
|
18,863
|
|
|
17,395
|
|
|
—
|
|
|
36,258
|
|
||||
Assumed net income to be allocated
|
$
|
40,689
|
|
|
$
|
37,338
|
|
|
$
|
321
|
|
|
$
|
78,348
|
|
Income per unit - basic
|
$
|
3.71
|
|
|
$
|
3.71
|
|
|
|
|
|
||||
Income per unit - diluted
|
$
|
3.65
|
|
|
$
|
3.71
|
|
|
|
|
|
|
Year Ended December 31, 2014
|
||||||||||||||
|
Common
|
|
Subordinated
|
|
IDR
|
|
Total
|
||||||||
|
(in thousands, except for per unit amounts)
|
||||||||||||||
Net income
|
|
|
|
|
|
|
$
|
122,814
|
|
||||||
Income attributable to Kildair (Note 2)
|
|
|
|
|
|
|
(4,080
|
)
|
|||||||
Limited partners' interest in net income
|
|
|
|
|
|
|
$
|
118,734
|
|
||||||
Distributions declared
|
$
|
17,964
|
|
|
$
|
17,526
|
|
|
$
|
—
|
|
|
$
|
35,490
|
|
Assumed net income from operations after distributions
|
41,579
|
|
|
41,665
|
|
|
—
|
|
|
83,244
|
|
||||
Assumed net income to be allocated
|
$
|
59,543
|
|
|
$
|
59,191
|
|
|
$
|
—
|
|
|
$
|
118,734
|
|
Income per unit - basic
|
$
|
5.88
|
|
|
$
|
5.88
|
|
|
|
|
|
||||
Income per unit - diluted
|
$
|
5.84
|
|
|
$
|
5.88
|
|
|
|
|
|
|
Year Ended December 31, 2013
|
||||||||||||||
|
Common
|
|
Subordinated
|
|
IDR
|
|
Total
|
||||||||
|
(in thousands, except for per unit amounts)
|
||||||||||||||
Net loss
|
|
|
|
|
|
|
$
|
(29,838
|
)
|
||||||
Predecessor income through October 29, 2013
|
|
|
|
|
|
|
(2,734
|
)
|
|||||||
Loss attributable to Kildair (Note 2)
|
|
|
|
|
|
|
2,338
|
|
|||||||
Limited partners' interest in net loss
|
|
|
|
|
|
|
$
|
(30,234
|
)
|
||||||
Distributions declared
|
$
|
2,846
|
|
|
$
|
2,846
|
|
|
$
|
—
|
|
|
$
|
5,692
|
|
Assumed net loss from operations after distributions
|
(17,963
|
)
|
|
(17,963
|
)
|
|
—
|
|
|
(35,926
|
)
|
||||
Assumed net loss to be allocated
|
$
|
(15,117
|
)
|
|
$
|
(15,117
|
)
|
|
$
|
—
|
|
|
$
|
(30,234
|
)
|
Loss per unit - basic
|
$
|
(1.50
|
)
|
|
$
|
(1.50
|
)
|
|
|
|
|
||||
Loss per unit - diluted
|
$
|
(1.50
|
)
|
|
$
|
(1.50
|
)
|
|
|
|
|
21.
|
Quarterly Financial Data (Unaudited)
|
|
Year Ended December 31, 2015
|
||||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth (1)
|
|
Total
|
||||||||||
|
(in thousands, except for per unit amounts)
|
||||||||||||||||||
Net sales
|
$
|
1,598,358
|
|
|
$
|
661,743
|
|
|
$
|
558,022
|
|
|
$
|
663,791
|
|
|
$
|
3,481,914
|
|
Net income (loss)
|
43,939
|
|
|
(2,550
|
)
|
|
8,580
|
|
|
28,379
|
|
|
78,348
|
|
|||||
Limited Partners' interest in net income (loss)
|
43,939
|
|
|
(2,599
|
)
|
|
8,475
|
|
|
28,212
|
|
|
78,027
|
|
|||||
Net income (loss) per limited partner unit: (2)
|
|
|
|
|
|
|
|
|
|
||||||||||
Common-basic
|
$
|
2.10
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.40
|
|
|
$
|
1.34
|
|
|
$
|
3.71
|
|
Common-diluted
|
$
|
2.06
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.39
|
|
|
$
|
1.32
|
|
|
$
|
3.65
|
|
Subordinated-basic and diluted
|
$
|
2.10
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.40
|
|
|
$
|
1.34
|
|
|
$
|
3.71
|
|
|
Year Ended December 31, 2014
|
||||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Total
|
||||||||||
|
(in thousands, except for per unit amounts)
|
||||||||||||||||||
Net sales
|
$
|
1,994,699
|
|
|
$
|
979,661
|
|
|
$
|
897,408
|
|
|
$
|
1,197,994
|
|
|
$
|
5,069,762
|
|
Net income (loss)
|
73,132
|
|
|
(10,604
|
)
|
|
(5,302
|
)
|
|
65,588
|
|
|
122,814
|
|
|||||
Limited Partners' interest in net income (loss)
|
75,335
|
|
|
(9,494
|
)
|
|
(10,718
|
)
|
|
63,611
|
|
|
118,734
|
|
|||||
Net income (loss) per limited partner unit: (2)
|
|
|
|
|
|
|
|
|
|
||||||||||
Common-basic
|
$
|
3.74
|
|
|
$
|
(0.47
|
)
|
|
$
|
(0.53
|
)
|
|
$
|
3.13
|
|
|
$
|
5.88
|
|
Common-diluted
|
$
|
3.74
|
|
|
$
|
(0.47
|
)
|
|
$
|
(0.53
|
)
|
|
$
|
3.07
|
|
|
$
|
5.84
|
|
Subordinated-basic and diluted
|
$
|
3.74
|
|
|
$
|
(0.47
|
)
|
|
$
|
(0.53
|
)
|
|
$
|
3.13
|
|
|
$
|
5.88
|
|
|
(1)
|
On December 21, 2015, the federal government enacted legislation that reinstated an excise tax credit program available for certain bio-fuel blending activities. This program had previously expired on December 31, 2014 and was reinstated retroactively to January 1, 2015. During the three months ended December 31, 2015, the Partnership recorded federal excise tax credits of
$7.8 million
related to its bio-fuel blending activities that had occurred throughout the year. These credits have been recorded as a reduction of cost of products sold (exclusive of depreciation and amortization) for the three months ended December 31, 2015.
|
(2)
|
Quarterly net income per limited partner unit amounts are stand-alone calculations and may not be additive to full year amounts due to rounding and changes in outstanding units.
|
22.
|
Partnership Distributions
|
|
|
|
|
Cash Distributed
|
||||||||||||||||
For the Quarter Ended
|
|
Payment Date
|
|
Per Unit
|
|
Common
|
|
Subordinated
|
|
IDR
|
|
Total
|
||||||||
December 31, 2013 (1)
|
|
February 14, 2014
|
|
$0.2825
|
|
$
|
2,847
|
|
|
$
|
2,846
|
|
|
$
|
—
|
|
|
$
|
5,693
|
|
March 31, 2014
|
|
May 15, 2014
|
|
$0.4125
|
|
$
|
4,175
|
|
|
$
|
4,155
|
|
|
$
|
—
|
|
|
$
|
8,330
|
|
June 30, 2014
|
|
August 14, 2014
|
|
$0.4275
|
|
$
|
4,326
|
|
|
$
|
4,306
|
|
|
$
|
—
|
|
|
$
|
8,632
|
|
September 30, 2014
|
|
November 14, 2014
|
|
$0.4425
|
|
$
|
4,482
|
|
|
$
|
4,457
|
|
|
$
|
—
|
|
|
$
|
8,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2014
|
|
February 13, 2015
|
|
$0.4575
|
|
$
|
4,981
|
|
|
$
|
4,608
|
|
|
$
|
—
|
|
|
$
|
9,589
|
|
March 31, 2015
|
|
May 15, 2015
|
|
$0.4725
|
|
$
|
5,199
|
|
|
$
|
4,759
|
|
|
$
|
—
|
|
|
$
|
9,958
|
|
June 30, 2015
|
|
August 14, 2015
|
|
$0.4875
|
|
$
|
5,364
|
|
|
$
|
4,910
|
|
|
$
|
49
|
|
|
$
|
10,323
|
|
September 30, 2015
|
|
November 13, 2015
|
|
$0.5025
|
|
$
|
5,533
|
|
|
$
|
5,061
|
|
|
$
|
105
|
|
|
$
|
10,699
|
|
(1)
|
The Partnership's cash distribution with respect to the quarter ended December 31, 2013 was calculated as the minimum quarterly cash distribution of
$0.4125
per unit prorated for the period beginning October 30, 2013, the IPO closing date through December 31, 2013.
|
23.
|
Subsequent Events
|
Exhibit
No.
|
|
Description
|
|
|
|
2.1***
|
|
Asset Purchase Agreement, dated September 10, 2014, by and among Sprague Operating Resources LLC, Metromedia Gas & Power, Inc., Metromedia Gas LLC, Metromedia Energy, Inc., EnergyEXPRESS, Inc. and Metromedia Power, Inc. (incorporated by reference to Exhibit 2.1 of Sprague Resources LP’s Current Report on Form 8-K filed September 11, 2014 (File No. 001-36137)).
|
|
|
|
2.2***
|
|
Asset Purchase Agreement, dated November 4, 2014, by and among Sprague Operating Resources LLC, Castle Oil Corporation, Castle Port Morris Terminals, Inc., Castle Energy Solutions, LLC, Castle Fuels Corporation, Castle Supply & Marketing, Inc. and Castle Energy Solutions S.B., LLC (incorporated by reference to Exhibit 2.1 of Sprague Resources LP’s Current Report on Form 8-K filed November 5, 2014 (File No. 001-36137)).
|
|
|
|
2.3
|
|
Purchase Agreement, dated December 9, 2014, by and among Sprague Resources ULC, Sprague International Properties LLC, Sprague Canadian Properties LLC and Axel Johnson Inc. (incorporated by reference to Exhibit 2.1 of Sprague Resources LP’s Current Report on Form 8-K filed December 12, 2014 (File No. 001-36137)).
|
|
|
|
2.4
|
|
Consideration Agreement, dated December 9, 2014, between Sprague Resources LP and Sprague Resources ULC (incorporated by reference to Exhibit 2.2 of Sprague Resources LP’s Current Report on Form 8-K filed December 12, 2014 (File No. 001-36137)).
|
|
|
|
3.1
|
|
First Amended and Restated Agreement of Limited Partnership of Sprague Resources LP (incorporated by reference to Exhibit 3.1 of Sprague Resources LP’s Current Report on Form 8-K filed November 5, 2013 (File No. 001-36137)).
|
|
|
|
3.2
|
|
First Amended and Restated Limited Liability Company Agreement of Sprague Resources GP LLC (incorporated by reference to Exhibit 3.2 of Sprague Resources LP’s Current Report on Form 8-K filed November 5, 2013 (File No. 001-36137)).
|
|
|
|
10.1
|
|
Amended and Restated Credit Agreement among Sprague Operating Resources LLC, as U.S. borrower, Sprague Resources ULC and Kildair Service Ltd., as initial Canadian borrowers, the several lenders parties thereto, JPMorgan Chase Bank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian agent, and the co-collateral agents, the co-syndication agents and the co-documentation agents party thereto (incorporated by reference to Exhibit 10.1 of Sprague Resources LP’s Current Report on Form 8-K filed December 12, 2014 (File No. 001-36137)).
|
|
|
|
10.2
|
|
Contribution, Conveyance and Assumption Agreement by and among Sprague Resources LP, Sprague Resources GP LLC, Axel Johnson Inc., Sprague International Properties LLC, Sprague Canadian Properties LLC, Sprague Resources Holdings LLC, Sprague Massachusetts Properties LLC and Sprague Operating Resources LLC (incorporated by reference to Exhibit 10.2 of Sprague Resources LP’s Current Report on Form 8-K filed November 5, 2013 (File No. 001-36137)).
|
|
|
|
10.3
|
|
Omnibus Agreement by and among Axel Johnson Inc., Sprague Resources Holdings LLC, Sprague Resources LP and Sprague Resources GP LLC (incorporated by reference to Exhibit 10.3 of Sprague Resources LP’s Current Report on Form 8-K filed November 5, 2013 (File No. 001-36137)).
|
|
|
|
10.4
|
|
Services Agreement by and among Sprague Resources GP LLC, Sprague Resources LP, Sprague Resources Holdings LLC and Sprague Energy Solutions Inc. (incorporated by reference to Exhibit 10.4 of Sprague Resources LP’s Current Report on Form 8-K filed November 5, 2013 (File No. 001-36137)).
|
|
|
|
10.5
|
|
Terminal Operating Agreement by and between Sprague Massachusetts Properties LLC and Sprague Operating Resources LLC (incorporated by reference to Exhibit 10.5 of Sprague Resources LP’s Current Report on Form 8-K filed November 5, 2013 (File No. 001-36137)).
|
Exhibit
No.
|
|
Description
|
|
|
|
10.6†
|
|
Sprague Resources LP 2013 Long-Term Incentive Plan, effective as of October 28, 2013 (incorporated by reference to Exhibit 4.4 to Sprague Resources LP’s Registration Statement on Form S-8, filed on October 25, 2013 (File No. 333-191923)).
|
|
|
|
10.7†
|
|
Form of Phantom Unit Award Agreement (incorporated by reference to Exhibit 10.8 to Sprague Resources LP’s Registration Statement on Form S-1, filed on September 24, 2013 (File No. 333-175826)).
|
|
|
|
10.8†
|
|
Form of Restricted Unit Award Agreement (incorporated by reference to Exhibit 10.9 to Sprague Resources LP’s Registration Statement on Form S-1, filed on September 24, 2013 (File No. 333-175826)).
|
|
|
|
10.9†
|
|
Form of Unit Award Letter (incorporated by reference to Exhibit 10.10 to Sprague Resources LP’s Registration Statement on Form S-1, filed on September 24, 2013 (File No. 333-175826)).
|
|
|
|
10.10†
|
|
Form of Phantom Unit Agreement (Performance Based Vesting) (incorporated by reference to Exhibit 10.1 of Sprague Resources LP’s Current Report on Form 10-Q filed on August 13, 2014 (File No. 001-36137)).
|
|
|
|
10.11†
|
|
Director Compensation Summary (incorporated by reference to Exhibit 10.1 of Sprague Resources LP’s Current Report on Form 8-K filed on October 17, 2014 (File No. 001-36137)).
|
|
|
|
10.12
|
|
Unit Purchase Agreement, dated November 4, 2014, by and between Sprague Resources LP and Castle Oil Corporation, dated November 4, 2014 (incorporated by reference to Exhibit 10.1 of Sprague Resources LP’s Current Report on Form 8-K filed November 5, 2014 (File No. 001-36137)).
|
|
|
|
10.13†*
|
|
Form of Phantom Unit Agreement (Performance Based Vesting)
|
|
|
|
12.1*
|
|
Computation of Ratio of Earnings to Combined Fixed Charges and Preference Dividends
|
|
|
|
21.1*
|
|
Subsidiaries of the Registrant
|
|
|
|
23.1*
|
|
Consent of Ernst & Young LLP
|
|
|
|
31.1*
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Rule 13a-14(a) /15d-14(a), by Chief Executive Officer.
|
|
|
|
31.2*
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Rule 13a-14(a) /15d-14(a), by Chief Financial Officer.
|
|
|
|
32.1**
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Executive Officer.
|
|
|
|
32.2**
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Financial Officer.
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation
|
†
|
Compensatory plan or arrangement.
|
*
|
Filed herewith.
|
**
|
Furnished herewith in accordance with Item 601(b)(32) of Regulation S-K.
|
***
|
Pursuant to Item 601(b)(2) of Regulation S-K, certain schedules to the Asset Purchase Agreements have been omitted. The registrant hereby agrees to furnish supplementally to the SEC, upon its request, any or all omitted schedules.
|
Service Provider:
|
At the Service Provider’s current address as shown in the General Partner’s records.
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
|
|
|
|
|
|
|
Predecessor
|
|
Predecessor
|
||||||||||
|
|
($ in thousands)
|
||||||||||||||||||
Earnings (loss):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) before income taxes and equity in net income (loss) of affiliate
|
|
$
|
80,164
|
|
|
$
|
128,323
|
|
|
$
|
(25,579
|
)
|
|
$
|
(14,618
|
)
|
|
$
|
42,586
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest and debt expense (2)
|
|
27,367
|
|
|
29,651
|
|
|
30,914
|
|
|
23,960
|
|
|
24,049
|
|
|||||
Estimated interest factor in rental expense (3)
|
|
4,427
|
|
|
3,473
|
|
|
2,363
|
|
|
2,167
|
|
|
2,468
|
|
|||||
Total earnings
|
|
$
|
111,958
|
|
|
$
|
161,447
|
|
|
$
|
7,698
|
|
|
$
|
11,509
|
|
|
$
|
69,103
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest and debt expense (2)
|
|
$
|
27,367
|
|
|
$
|
29,651
|
|
|
$
|
30,914
|
|
|
$
|
23,960
|
|
|
$
|
24,049
|
|
Estimated interest factor in rental expense (3)
|
|
4,427
|
|
|
3,473
|
|
|
2,362
|
|
|
2,167
|
|
|
2,468
|
|
|||||
Total fixed changes
|
|
$
|
31,794
|
|
|
$
|
33,124
|
|
|
$
|
33,276
|
|
|
$
|
26,127
|
|
|
$
|
26,517
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges (4)
|
|
3.5
|
|
|
4.9
|
|
|
-
|
|
|
-
|
|
|
2.6
|
|
(1)
|
For each period, the ratio of earnings to fixed charges and the ratio of earnings to combined fixed charges and preference dividends is the same, because we had no preference equity securities outstanding during any of the periods.
|
(2)
|
Interest and debt expense includes amortization expense for debt costs.
|
(3)
|
Included in fixed charges is one-fifth of rent expense as the representative portion of interest.
|
(4)
|
For the years ended December 31, 2013 and December 31, 2012, our earnings were insufficient to cover fixed charges by $25.6 million and $14.6 million, respectively.
|
Name
|
State or Other Jurisdiction of Incorporation
|
Percent of Ownership
|
Sprague Operating Resources LLC
|
Delaware
|
100%
|
Sprague Energy Solutions Inc.
|
Delaware
|
100%
|
Sprague Connecticut Properties LLC
|
Delaware
|
100%
|
Sprague Terminal Services LLC
|
Delaware
|
100%
|
Sprague Co-op Member LLC
|
Delaware
|
100%
|
Sprague Resources Coöperatief U.A.
[0.9% owned by Sprague Co-op Member LLC]
|
The Netherlands
|
99.1%
|
Kildair Service ULC
|
Canada
|
100%
|
Sprague Resources Canada ULC
|
Canada
|
100%
|
Wintergreen Transport Corporation ULC
|
Canada
|
100%
|
Sprague Resources Finance Corp
|
Delaware
|
100%
|
|
|
|
•
|
the Registration Statement (Form S-8 No. 333-191923) pertaining to the Sprague Resources LP 2013 Long Term Incentive Plan; and
|
•
|
the Registration Statement (Form S-3 No. 333-200148) pertaining to Sprague Resources LP and Sprague Resources Finance Corp
|
1.
|
I have reviewed this annual report on Form 10-K of Sprague Resources LP;
|
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: March 10, 2016
|
|
/s/ DAVID C. GLENDON
|
David C. Glendon
|
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Sprague Resources LP;
|
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: March 10, 2016
|
|
/s/ GARY A. RINALDI
|
Gary A. Rinaldi
|
Senior Vice President, Chief Operating Officer
and Chief Financial Officer
|
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: March 10, 2016
|
|
/s/ DAVID C. GLENDON
|
David C. Glendon
|
President and Chief Executive Officer
|
(Principal Executive Officer)
|
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: March 10, 2016
|
|
/s/ GARY A. RINALDI
|
Gary A. Rinaldi
|
Senior Vice President, Chief Operating Officer and
Chief Financial Officer
|
(Principal Financial Officer)
|