|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
30-0831007
|
(State or other jurisdiction
of organization)
|
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
¨
|
Accelerated filer
¨
|
Non-accelerated filer
x
|
Smaller reporting company
¨
|
(Do not check if smaller reporting company)
|
|
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(unaudited; in thousands, except per unit amounts)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Terminalling services
|
$
|
15,973
|
|
|
$
|
7,873
|
|
|
$
|
38,639
|
|
|
$
|
11,321
|
|
Terminalling services — related party
|
1,735
|
|
|
1,314
|
|
|
3,538
|
|
|
1,314
|
|
||||
Railroad incentives
|
18
|
|
|
577
|
|
|
45
|
|
|
577
|
|
||||
Fleet leases
|
2,036
|
|
|
2,189
|
|
|
5,820
|
|
|
6,785
|
|
||||
Fleet leases — related party
|
1,013
|
|
|
—
|
|
|
3,234
|
|
|
—
|
|
||||
Fleet services
|
156
|
|
|
337
|
|
|
467
|
|
|
575
|
|
||||
Fleet services — related party
|
681
|
|
|
366
|
|
|
2,223
|
|
|
1,084
|
|
||||
Freight and other reimbursables
|
152
|
|
|
123
|
|
|
1,639
|
|
|
1,825
|
|
||||
Freight and other reimbursables — related party
|
33
|
|
|
207
|
|
|
95
|
|
|
426
|
|
||||
Total revenues
|
21,797
|
|
|
12,986
|
|
|
55,700
|
|
|
23,907
|
|
||||
Operating costs
|
|
|
|
|
|
|
|
||||||||
Subcontracted rail services
|
1,535
|
|
|
2,486
|
|
|
5,984
|
|
|
4,595
|
|
||||
Pipeline fees
|
5,256
|
|
|
1,660
|
|
|
11,659
|
|
|
1,660
|
|
||||
Fleet leases
|
3,049
|
|
|
2,189
|
|
|
9,054
|
|
|
6,785
|
|
||||
Freight and other reimbursables
|
185
|
|
|
330
|
|
|
1,734
|
|
|
2,251
|
|
||||
Selling, general and administrative
|
2,586
|
|
|
2,017
|
|
|
7,036
|
|
|
4,025
|
|
||||
Selling, general and administrative — related party
|
1,080
|
|
|
1,198
|
|
|
3,366
|
|
|
3,003
|
|
||||
Depreciation
|
1,055
|
|
|
1,083
|
|
|
3,244
|
|
|
1,337
|
|
||||
Total operating costs
|
14,746
|
|
|
10,963
|
|
|
42,077
|
|
|
23,656
|
|
||||
Operating income
|
7,051
|
|
|
2,023
|
|
|
13,623
|
|
|
251
|
|
||||
Interest expense
|
923
|
|
|
1,525
|
|
|
2,910
|
|
|
3,509
|
|
||||
Gain associated with derivative instruments
|
(2,341
|
)
|
|
(1,375
|
)
|
|
(4,072
|
)
|
|
(573
|
)
|
||||
Foreign currency transaction loss (gain)
|
2
|
|
|
2,991
|
|
|
(381
|
)
|
|
3,679
|
|
||||
Income (loss) from continuing operations before provision for income taxes
|
8,467
|
|
|
(1,118
|
)
|
|
15,166
|
|
|
(6,364
|
)
|
||||
Provision for income taxes
|
2,142
|
|
|
61
|
|
|
4,148
|
|
|
85
|
|
||||
Income (loss) from continuing operations
|
6,325
|
|
|
(1,179
|
)
|
|
11,018
|
|
|
(6,449
|
)
|
||||
Discontinued operations
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations
|
—
|
|
|
(183
|
)
|
|
—
|
|
|
(152
|
)
|
||||
Net income (loss)
|
$
|
6,325
|
|
|
$
|
(1,362
|
)
|
|
$
|
11,018
|
|
|
$
|
(6,601
|
)
|
Net income (loss) attributable to limited partner interest
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
6,198
|
|
|
$
|
(1,156
|
)
|
|
$
|
10,797
|
|
|
$
|
(6,321
|
)
|
Loss from discontinued operations
|
—
|
|
|
(179
|
)
|
|
—
|
|
|
(149
|
)
|
||||
Net income (loss) attributable to limited partner interest
|
$
|
6,198
|
|
|
$
|
(1,335
|
)
|
|
$
|
10,797
|
|
|
$
|
(6,470
|
)
|
Basic and diluted earnings per common unit (Note 4)
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
0.30
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.52
|
|
|
$
|
(0.55
|
)
|
Loss from discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
||||
Net income (loss) per common unit (basic and diluted)
|
$
|
0.30
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.52
|
|
|
$
|
(0.56
|
)
|
Weighted average common units outstanding - basic
|
10,214
|
|
|
1,094
|
|
|
10,214
|
|
|
1,094
|
|
||||
Basic and diluted earnings per subordinated unit (Note 4)
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
0.30
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.52
|
|
|
$
|
(0.55
|
)
|
Loss from discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
||||
Net income (loss) per subordinated unit (basic and diluted)
|
$
|
0.30
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.52
|
|
|
$
|
(0.56
|
)
|
Weighted average subordinated units outstanding
|
10,464
|
|
|
10,464
|
|
|
10,464
|
|
|
10,464
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(unaudited; in thousands)
|
||||||||||||||
Net income (loss)
|
$
|
6,325
|
|
|
$
|
(1,362
|
)
|
|
$
|
11,018
|
|
|
$
|
(6,601
|
)
|
Other comprehensive income (loss) — foreign currency translation, net of income tax expense (benefit) of ($41) thousand, $0, $73 thousand and $0, respectively
|
(110
|
)
|
|
(663
|
)
|
|
197
|
|
|
607
|
|
||||
Comprehensive income (loss)
|
$
|
6,215
|
|
|
$
|
(2,025
|
)
|
|
$
|
11,215
|
|
|
$
|
(5,994
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(unaudited; in thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
11,018
|
|
|
$
|
(6,601
|
)
|
Less: Loss from discontinued operations
|
—
|
|
|
(152
|
)
|
||
Income (loss) from continuing operations
|
11,018
|
|
|
(6,449
|
)
|
||
Adjustments to reconcile income (loss) from continuing operations to net cash from operating activities:
|
|
|
|
||||
Depreciation
|
3,244
|
|
|
1,337
|
|
||
Gain associated with derivative instruments
|
(4,072
|
)
|
|
(573
|
)
|
||
Settlement of derivative contracts
|
2,885
|
|
|
—
|
|
||
Bad debt expense
|
—
|
|
|
1,475
|
|
||
Amortization of deferred financing costs
|
471
|
|
|
877
|
|
||
Unit based compensation expense
|
2,168
|
|
|
—
|
|
||
Deferred income taxes
|
837
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
1,468
|
|
|
(4,339
|
)
|
||
Accounts receivable
—
related party
|
(1,017
|
)
|
|
402
|
|
||
Prepaid expenses and other current assets
|
(3,149
|
)
|
|
(1,168
|
)
|
||
Accounts payable and accrued expenses
|
(788
|
)
|
|
(2,488
|
)
|
||
Deferred revenue and other liabilities
|
12,015
|
|
|
8,011
|
|
||
Deferred revenue
—
related party
|
900
|
|
|
534
|
|
||
Change in restricted cash
|
297
|
|
|
—
|
|
||
Net cash provided by (used in) operating activities
|
26,277
|
|
|
(2,381
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions of property and equipment
|
(1,424
|
)
|
|
(33,119
|
)
|
||
Purchase of derivative contracts
|
(1,167
|
)
|
|
(468
|
)
|
||
Net cash used in investing activities
|
(2,591
|
)
|
|
(33,587
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from borrowings on Bank of Oklahoma credit facility
|
—
|
|
|
69,225
|
|
||
Payments for deferred financing costs
|
—
|
|
|
(1,250
|
)
|
||
Contributions
|
—
|
|
|
12,946
|
|
||
Distributions
|
(17,695
|
)
|
|
—
|
|
||
Proceeds from long-term debt
|
18,000
|
|
|
—
|
|
||
Repayment of long-term debt
|
(22,728
|
)
|
|
—
|
|
||
Repayment of loan from parent
|
—
|
|
|
(49,874
|
)
|
||
Net cash provided by (used in) financing activities
|
(22,423
|
)
|
|
31,047
|
|
||
Cash provided by (used in) discontinued operations:
|
|
|
|
||||
Net cash used in operating activities
|
—
|
|
|
(3,425
|
)
|
||
Net cash provided by investing activities
|
—
|
|
|
29,473
|
|
||
Net cash provided by financing activities
|
—
|
|
|
152
|
|
||
Net cash provided by discontinued operations
|
—
|
|
|
26,200
|
|
||
Effect of exchange rates on cash
|
(442
|
)
|
|
725
|
|
||
Net change in cash and cash equivalents
|
821
|
|
|
22,004
|
|
||
Cash and cash equivalents – beginning of period
|
40,249
|
|
|
6,151
|
|
||
Cash and cash equivalents – end of period
|
$
|
41,070
|
|
|
$
|
28,155
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
|
(unaudited; in thousands, except
unit amounts)
|
||||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
41,070
|
|
|
$
|
40,249
|
|
Restricted cash
|
5,348
|
|
|
6,490
|
|
||
Accounts receivable, net
|
2,383
|
|
|
4,221
|
|
||
Accounts receivable
—
related party
|
313
|
|
|
134
|
|
||
Prepaid expenses
|
10,947
|
|
|
8,367
|
|
||
Other current assets
|
4,501
|
|
|
2,003
|
|
||
Total current assets
|
64,562
|
|
|
61,464
|
|
||
Property and equipment, net
|
72,065
|
|
|
84,059
|
|
||
Other non-current assets
|
4,778
|
|
|
5,657
|
|
||
Total assets
|
$
|
141,405
|
|
|
$
|
151,180
|
|
|
|
|
|
||||
LIABILITIES AND PARTNERS’ CAPITAL
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
2,770
|
|
|
$
|
3,875
|
|
Accounts payable
—
related party
|
—
|
|
|
492
|
|
||
Deferred revenue, current portion
|
24,761
|
|
|
15,540
|
|
||
Deferred revenue, current portion
—
related party
|
5,615
|
|
|
5,256
|
|
||
Other current liabilities
|
2,453
|
|
|
877
|
|
||
Total current liabilities
|
35,599
|
|
|
26,040
|
|
||
Long-term debt
|
66,921
|
|
|
81,358
|
|
||
Deferred revenue, net of current portion
|
2,430
|
|
|
3,656
|
|
||
Deferred revenue, net of current portion
—
related party
|
1,861
|
|
|
1,931
|
|
||
Non-current deferred income tax liability
|
784
|
|
|
—
|
|
||
Total liabilities
|
107,595
|
|
|
112,985
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
||||
Partners' capital
|
|
|
|
||||
Common units (10,213,545 authorized and issued at September 30, 2015 and December 31, 2014)
|
125,449
|
|
|
127,865
|
|
||
Class A units (250,000 authorized, 185,000 issued at September 30, 2015 and 220,000 issued at December 31, 2014)
|
1,793
|
|
|
550
|
|
||
Subordinated units (10,463,545 authorized and issued at September 30, 2015 and December 31, 2014)
|
(93,491
|
)
|
|
(90,214
|
)
|
||
General partner units (427,083 authorized and issued at September 30, 2015 and December 31, 2014)
|
(120
|
)
|
|
12
|
|
||
Accumulated other comprehensive income (loss)
|
179
|
|
|
(18
|
)
|
||
Total partners' capital
|
33,810
|
|
|
38,195
|
|
||
Total liabilities and partners' capital
|
$
|
141,405
|
|
|
$
|
151,180
|
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
||||||||||
|
Units
|
|
Amount
|
|
Units
|
|
Amount
|
||||||
|
(unaudited; in thousands, except unit amounts)
|
||||||||||||
Common units
|
|
|
|
|
|
|
|
||||||
Beginning balance
|
10,213,545
|
|
|
$
|
127,865
|
|
|
—
|
|
|
$
|
—
|
|
Net income
|
—
|
|
|
5,280
|
|
|
—
|
|
|
—
|
|
||
Unit based compensation expense
|
—
|
|
|
794
|
|
|
—
|
|
|
—
|
|
||
Distributions
|
—
|
|
|
(8,490
|
)
|
|
—
|
|
|
—
|
|
||
Ending balance
|
10,213,545
|
|
|
125,449
|
|
|
—
|
|
|
—
|
|
||
Class A units
|
|
|
|
|
|
|
|
||||||
Beginning balance
|
220,000
|
|
|
550
|
|
|
—
|
|
|
—
|
|
||
Net income
|
—
|
|
|
96
|
|
|
—
|
|
|
—
|
|
||
Unit based compensation expense
|
—
|
|
|
1,546
|
|
|
—
|
|
|
—
|
|
||
Forfeited units
|
(35,000
|
)
|
|
(245
|
)
|
|
—
|
|
|
—
|
|
||
Distributions
|
—
|
|
|
(154
|
)
|
|
—
|
|
|
—
|
|
||
Ending balance
|
185,000
|
|
|
1,793
|
|
|
—
|
|
|
—
|
|
||
Subordinated units
|
|
|
|
|
|
|
|
||||||
Beginning balance
|
10,463,545
|
|
|
(90,214
|
)
|
|
—
|
|
|
—
|
|
||
Net income
|
—
|
|
|
5,421
|
|
|
—
|
|
|
—
|
|
||
Distributions
|
—
|
|
|
(8,698
|
)
|
|
—
|
|
|
—
|
|
||
Ending balance
|
10,463,545
|
|
|
(93,491
|
)
|
|
—
|
|
|
—
|
|
||
General Partner
|
|
|
|
|
|
|
|
||||||
Beginning balance
|
427,083
|
|
|
12
|
|
|
—
|
|
|
—
|
|
||
Net income
|
—
|
|
|
221
|
|
|
—
|
|
|
—
|
|
||
Distributions
|
—
|
|
|
(353
|
)
|
|
—
|
|
|
—
|
|
||
Ending balance
|
427,083
|
|
|
(120
|
)
|
|
—
|
|
|
—
|
|
||
Predecessor Partner Interest
|
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
|
—
|
|
|
|
|
4,003
|
|
||||
Net loss
|
|
|
—
|
|
|
|
|
(6,601
|
)
|
||||
Contribution
|
|
|
—
|
|
|
|
|
13,098
|
|
||||
Distributions
|
|
|
—
|
|
|
|
|
—
|
|
||||
Ending balance
|
|
|
—
|
|
|
|
|
10,500
|
|
||||
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
|
(18
|
)
|
|
|
|
(1,400
|
)
|
||||
Cumulative translation adjustment
|
|
|
197
|
|
|
|
|
607
|
|
||||
Ending balance
|
|
|
179
|
|
|
|
|
(793
|
)
|
||||
Total partners’ capital at September 30,
|
|
|
$
|
33,810
|
|
|
|
|
$
|
9,707
|
|
|
|
As reported
|
|
|
|
As corrected
|
||||||
|
|
December 31, 2014
|
|
Adjustment
|
|
December 31, 2014
|
||||||
|
|
(in thousands)
|
||||||||||
Note receivable — related party
|
|
$
|
2,472
|
|
|
$
|
(2,472
|
)
|
|
$
|
—
|
|
Total current assets
|
|
$
|
63,936
|
|
|
$
|
(2,472
|
)
|
|
$
|
61,464
|
|
Total assets
|
|
$
|
153,652
|
|
|
$
|
(2,472
|
)
|
|
$
|
151,180
|
|
Partners' capital
|
|
|
|
|
|
|
||||||
Common units
|
|
$
|
128,097
|
|
|
$
|
(232
|
)
|
|
$
|
127,865
|
|
Subordinated units
|
|
$
|
(87,978
|
)
|
|
$
|
(2,236
|
)
|
|
$
|
(90,214
|
)
|
General partner units
|
|
$
|
103
|
|
|
$
|
(91
|
)
|
|
$
|
12
|
|
Accumulated other comprehensive income (loss)
|
|
$
|
(105
|
)
|
|
$
|
87
|
|
|
$
|
(18
|
)
|
Total partners' capital
|
|
$
|
40,667
|
|
|
$
|
(2,472
|
)
|
|
$
|
38,195
|
|
Total liabilities and partners' capital
|
|
$
|
153,652
|
|
|
$
|
(2,472
|
)
|
|
$
|
151,180
|
|
Distribution Targets
|
|
Portion of Quarterly
Distribution Per Unit
|
|
Percentage Distributed to Limited Partners
|
|
Percentage Distributed to
General Partner
(including IDRs)
(1)
|
Minimum Quarterly Distribution
|
|
Up to $0.2875
|
|
98%
|
|
2%
|
First Target Distribution
|
|
> $0.2875 to $0.330625
|
|
98%
|
|
2%
|
Second Target Distribution
|
|
> $0.330625 to $0.359375
|
|
85%
|
|
15%
|
Third Target Distribution
|
|
> $0.359375 to $0.431250
|
|
75%
|
|
25%
|
Over Third Target Distribution
|
|
In excess of $0.431250
|
|
50%
|
|
50%
|
|
|
Three Months Ended September 30, 2015
|
||||||||||||||||||
|
|
Common
Units
|
|
Subordinated
Units
|
|
Class A
Units |
|
General
Partner Units |
|
Total
|
||||||||||
|
|
(in thousands, except per unit amounts)
|
||||||||||||||||||
Net income attributable to general and limited partner interests in USD Partners LP
(1)
|
|
$
|
3,030
|
|
|
$
|
3,112
|
|
|
$
|
56
|
|
|
$
|
127
|
|
|
$
|
6,325
|
|
Less: Distributable earnings
(2)
|
|
3,033
|
|
|
3,107
|
|
|
55
|
|
|
127
|
|
|
6,322
|
|
|||||
Excess net income (distributions)
|
|
$
|
(3
|
)
|
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Weighted average units outstanding
(3)
|
|
10,214
|
|
|
10,464
|
|
|
185
|
|
|
427
|
|
|
21,290
|
|
|||||
Distributable earnings per unit
(4)
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
|
|
|
||||
Overdistributed earnings per unit
(5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||||||
Net income per limited partner unit (basic and diluted)
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
|
|
|
|
(1)
|
Represents earnings allocated to each class of units based on the percentage ownership in the Partnership. Calculation of the percentage ownership for net income per limited partner unit uses the actual units outstanding.
|
(2)
|
Represents the distributions payable for the period based upon the quarterly distribution amount of
$0.2925
per unit, or
$1.17
per unit on an annualized basis. Amounts presented for each class of unit include a proportionate amount of the
$95 thousand
distributable to holders of the Equity-classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Long-Term Incentive Plan.
|
(3)
|
Represents the weighted average units outstanding during the period.
|
(4)
|
Represents the total distributable earnings divided by the weighted average number of units outstanding for the period.
|
(5)
|
Represents the distributions in excess of earnings divided by the weighted average number of units outstanding for the period.
|
|
|
Three Months Ended September 30, 2014
|
||||||||||||||||||
|
|
Common
Units
|
|
Subordinated
Units
|
|
Class A
Units |
|
General
Partner
Units
|
|
Total
|
||||||||||
|
|
(in thousands, except per unit amounts)
|
||||||||||||||||||
Net loss attributable to general and limited partner interests
(1)
|
|
$
|
(126
|
)
|
|
$
|
(1,209
|
)
|
|
$
|
—
|
|
|
$
|
(27
|
)
|
|
$
|
(1,362
|
)
|
Less: Income from discontinued operations attributable to general and limited partner interests
(1)
|
|
(16
|
)
|
|
(163
|
)
|
|
—
|
|
|
(4
|
)
|
|
(183
|
)
|
|||||
Loss from continuing operations attributable to general and limited partner interests
(1)
|
|
(110
|
)
|
|
(1,046
|
)
|
|
—
|
|
|
(23
|
)
|
|
(1,179
|
)
|
|||||
Less: Distributable earnings
(2)
|
|
314
|
|
|
3,008
|
|
|
—
|
|
|
68
|
|
|
3,390
|
|
|||||
Distributions in excess of earnings
|
|
$
|
(424
|
)
|
|
$
|
(4,054
|
)
|
|
$
|
—
|
|
|
$
|
(91
|
)
|
|
$
|
(4,569
|
)
|
Weighted average units outstanding
(3)
|
|
1,094
|
|
|
10,464
|
|
|
—
|
|
|
427
|
|
|
|
||||||
Distributable earnings per unit
(4)
|
|
$
|
0.28
|
|
|
$
|
0.28
|
|
|
$
|
—
|
|
|
|
|
|
||||
Overdistributed earnings per unit
(5)
|
|
(0.39
|
)
|
|
(0.39
|
)
|
|
—
|
|
|
|
|
|
|||||||
Net loss per limited partner unit from continuing operations (basic and diluted)
|
|
(0.11
|
)
|
|
(0.11
|
)
|
|
—
|
|
|
|
|
|
|||||||
Net loss per limited partner unit from discontinued operations (basic and diluted)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
—
|
|
|
|
|
|
|||||||
Net loss per limited partner unit (basic and diluted)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
—
|
|
|
|
|
|
|
(1)
|
Represents earnings (loss) allocated to each class of units on a retrospective basis using the percentage ownership in the Partnership as if the units issued to our general partner and USDG in connection with the IPO were outstanding for the
three months ended September 30, 2014
and common units issued to the public and Class A units issued to certain members of management were not outstanding during the
three months ended September 30, 2014
.
|
(2)
|
Represents the distributions that would have been payable for the quarter assuming the minimum quarterly distribution amount of
$0.2875
per unit, or
$1.15
per unit on an annualized basis, was distributed on a retrospective basis as if the units issued to our general partner and USDG were outstanding the entire period.
|
(3)
|
Represents the weighted average units outstanding computed on a retrospective basis as if the units issued to our general partner and USDG in connection with the IPO were outstanding for the entire period.
|
(4)
|
Represents the total distributable earnings divided by the weighted average number of units outstanding for the period.
|
(5)
|
Represents the distributions in excess of earnings divided by the weighted average number of units outstanding for the period.
|
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||||||
|
|
Common
Units
|
|
Subordinated
Units
|
|
Class A
Units |
|
General
Partner Units |
|
Total
|
||||||||||
|
|
(in thousands, except per unit amounts)
|
||||||||||||||||||
Net income attributable to general and limited partner interests in USD Partners LP
(1)
|
|
$
|
5,280
|
|
|
$
|
5,421
|
|
|
$
|
96
|
|
|
$
|
221
|
|
|
$
|
11,018
|
|
Less: Distributable earnings
(2)
|
|
9,040
|
|
|
9,262
|
|
|
164
|
|
|
378
|
|
|
18,844
|
|
|||||
Distributions in excess of earnings
|
|
$
|
(3,760
|
)
|
|
$
|
(3,841
|
)
|
|
$
|
(68
|
)
|
|
$
|
(157
|
)
|
|
$
|
(7,826
|
)
|
Weighted average units outstanding
(3)
|
|
10,214
|
|
|
10,464
|
|
|
206
|
|
|
427
|
|
|
21,311
|
|
|||||
Distributable earnings per unit
(4)
|
|
$
|
0.89
|
|
|
$
|
0.89
|
|
|
$
|
0.80
|
|
|
|
|
|
||||
Overdistributed earnings per unit
(5)
|
|
(0.37
|
)
|
|
(0.37
|
)
|
|
(0.33
|
)
|
|
|
|
|
|||||||
Net income per limited partner unit (basic and diluted)
|
|
$
|
0.52
|
|
|
$
|
0.52
|
|
|
$
|
0.47
|
|
|
|
|
|
|
(1)
|
Represents earnings allocated to each class of units based on the percentage ownership in the Partnership. Calculation of the percentage ownership for net income per limited partner unit uses the actual units outstanding.
|
(2)
|
Represents the distributions paid of
$0.2875
per unit with respect to the three months ended March 31, 2015,
$0.29
per unit with respect to the three months ended June 30, 2015, and
$0.2925
per unit payable for the three months ended
September 30, 2015
, representing a year-to-date distribution amount of
$0.87
per unit. Amounts presented for each class of unit include a proportionate amount of the
$322 thousand
attributable to holders of the Equity-classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Long-Term Incentive Plan.
|
(3)
|
Represents the weighted average units outstanding during the period.
|
(4)
|
Represents the total distributable earnings divided by the weighted average number of units outstanding for the period.
|
(5)
|
Represents the distributions in excess of earnings divided by the weighted average number of units outstanding for the period.
|
|
|
Nine Months Ended September 30, 2014
|
||||||||||||||||||
|
|
Common
Units
|
|
Subordinated
Units
|
|
Class A
Units |
|
General
Partner Units |
|
Total
|
||||||||||
|
|
(in thousands, except per unit amounts)
|
||||||||||||||||||
Net loss attributable to general and limited partner interests
(1)
|
|
$
|
(613
|
)
|
|
$
|
(5,857
|
)
|
|
$
|
—
|
|
|
$
|
(131
|
)
|
|
$
|
(6,601
|
)
|
Less: Income from discontinued operations attributable to general and limited partner interests
(1)
|
|
(14
|
)
|
|
(135
|
)
|
|
—
|
|
|
(3
|
)
|
|
(152
|
)
|
|||||
Loss from continuing operations attributable to general and limited partner interests
(1)
|
|
(599
|
)
|
|
(5,722
|
)
|
|
—
|
|
|
(128
|
)
|
|
(6,449
|
)
|
|||||
Less: Distributable earnings
(2)
|
|
943
|
|
|
9,025
|
|
|
—
|
|
|
203
|
|
|
10,171
|
|
|||||
Distributions in excess of earnings
|
|
$
|
(1,542
|
)
|
|
$
|
(14,747
|
)
|
|
$
|
—
|
|
|
$
|
(331
|
)
|
|
$
|
(16,620
|
)
|
Weighted average units outstanding
(3)
|
|
1,094
|
|
|
10,464
|
|
|
—
|
|
|
427
|
|
|
|
||||||
Distributable earnings per unit
(4)
|
|
$
|
0.86
|
|
|
$
|
0.86
|
|
|
$
|
—
|
|
|
|
|
|
||||
Overdistributed earnings per unit
(5)
|
|
(1.41
|
)
|
|
(1.41
|
)
|
|
—
|
|
|
|
|
|
|||||||
Net loss per limited partner unit from continuing operations (basic and diluted)
|
|
(0.55
|
)
|
|
(0.55
|
)
|
|
—
|
|
|
|
|
|
|||||||
Net loss per limited partner unit from discontinued operations (basic and diluted)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
—
|
|
|
|
|
|
|||||||
Net loss per limited partner unit (basic and diluted)
|
|
$
|
(0.56
|
)
|
|
$
|
(0.56
|
)
|
|
$
|
—
|
|
|
|
|
|
|
(1)
|
Represents earnings (loss) allocated to each class of units on a retrospective basis using the percentage ownership in the Partnership as if the units issued to our general partner and USDG in connection with the IPO were outstanding for the
nine months ended September 30, 2014
and common units issued to the public and Class A units issued to certain members of management were not outstanding during the
nine months ended September 30, 2014
.
|
(2)
|
Represents the total distributions that would have been payable for the
nine months ended September 30, 2014
assuming the minimum quarterly distribution amount of
$0.2875
per unit, or
$1.15
per unit on an annualized basis, was distributed for each of the three distribution payments that would have been made on a retrospective basis if the units issued to our general partner and USDG were outstanding for the entire period.
|
(3)
|
Represents the weighted average units outstanding computed on a retrospective basis as if the units issued to our general partner and USDG in connection with the IPO were outstanding for the entire period.
|
(4)
|
Represents the total distributable earnings divided by the weighted average number of units outstanding for the period.
|
(5)
|
Represents the distributions in excess of earnings divided by the weighted average number of units outstanding for the period.
|
|
September 30, 2015
|
|
December 31, 2014
|
Estimated
Useful Lives
(Years)
|
||||
|
(in thousands)
|
|||||||
Land
|
$
|
2,843
|
|
|
$
|
3,279
|
|
N/A
|
Trackage and facilities
|
70,565
|
|
|
78,938
|
|
20
|
||
Equipment
|
5,200
|
|
|
5,611
|
|
5-10
|
||
Furniture
|
44
|
|
|
51
|
|
5
|
||
Total property and equipment
|
78,652
|
|
|
87,879
|
|
|
||
Accumulated depreciation
|
(7,125
|
)
|
|
(4,326
|
)
|
|
||
Construction in progress
|
538
|
|
|
506
|
|
|
||
Property and equipment, net
|
$
|
72,065
|
|
|
$
|
84,059
|
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
|
(in millions)
|
||||||
Aggregate borrowing capacity under Credit Agreement
|
$
|
300.0
|
|
|
$
|
300.0
|
|
Less: Term Loan Facility amounts outstanding
|
48.9
|
|
|
81.4
|
|
||
Revolving Credit Facility amounts outstanding
|
18.0
|
|
|
—
|
|
||
Letters of credit outstanding
|
—
|
|
|
—
|
|
||
Available under Credit Agreement
|
$
|
233.1
|
|
|
$
|
218.6
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Interest expense on the BOK Credit Agreement
|
$
|
—
|
|
|
$
|
1,305
|
|
|
$
|
—
|
|
|
$
|
2,632
|
|
Interest expense on the Credit Agreement
|
771
|
|
|
—
|
|
|
2,439
|
|
|
—
|
|
||||
Amortization of deferred financing costs
|
152
|
|
|
220
|
|
|
471
|
|
|
877
|
|
||||
Total interest expense
|
$
|
923
|
|
|
$
|
1,525
|
|
|
$
|
2,910
|
|
|
$
|
3,509
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
|
(in thousands)
|
||||||
Customer prepayments
|
$
|
3,114
|
|
|
$
|
3,505
|
|
Minimum monthly commitment fees
|
21,647
|
|
|
12,035
|
|
||
Total deferred revenue, current portion
|
$
|
24,761
|
|
|
$
|
15,540
|
|
|
|
|
|
||||
Customer prepayments
|
$
|
2,430
|
|
|
$
|
3,656
|
|
Total deferred revenue, net of current portion
|
$
|
2,430
|
|
|
$
|
3,656
|
|
•
|
our payment of an annual amount to USDG, initially totaling approximately
$4.9 million
, for providing certain general and administrative services by USDG and its affiliates, which includes a fixed annual fee of
$2.5 million
for providing executive management services by officers of our general partner. Other portions of this annual amount are based on the costs actually incurred by USDG and its affiliates for providing the services;
|
•
|
our right of first offer to acquire the Hardisty Phase II and Hardisty Phase III projects, as well as other midstream infrastructure assets and businesses that USD and USDG may construct or acquire in the future;
|
•
|
our obligation to reimburse USDG for any out-of-pocket costs and expenses incurred by USDG in providing general and administrative services (which reimbursement is in addition to certain expenses of our general partner and its affiliates that are reimbursed under our partnership agreement), as well as any other out-of-pocket expenses incurred by USDG on our behalf;
|
•
|
an indemnity by USDG for certain environmental and other liabilities, and our obligation to indemnify USDG and its subsidiaries for events and conditions associated with the operation of our assets that occur after the closing of the IPO and for environmental liabilities related to our assets to the extent USDG is not required to indemnify us; and
|
•
|
so long as USDG controls our general partner, the omnibus agreement will remain in full force and effect. If USDG ceases to control our general partner, either party may terminate the omnibus agreement, provided that the indemnification obligations will remain in full force and effect in accordance with their terms.
|
|
September 30, 2015
|
||||||||||
|
Total assets
|
|
Total liabilities
|
|
Maximum exposure to loss
|
||||||
|
(in thousands)
|
||||||||||
Accounts receivable
—
related party
|
$
|
242
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred revenue, current portion
—
related party
|
—
|
|
|
1,295
|
|
|
—
|
|
|||
Deferred revenue, net of current portion
—
related party
|
—
|
|
|
1,861
|
|
|
—
|
|
|||
|
$
|
242
|
|
|
$
|
3,156
|
|
|
$
|
—
|
|
|
December 31, 2014
|
||||||||||
|
Total assets
|
|
Total liabilities
|
|
Maximum exposure to loss
|
||||||
|
(in thousands)
|
||||||||||
Accounts receivable — related party
|
$
|
134
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred revenue, current portion — related party
|
—
|
|
|
591
|
|
|
—
|
|
|||
Deferred revenue, net of current portion — related party
|
—
|
|
|
1,931
|
|
|
—
|
|
|||
|
$
|
134
|
|
|
$
|
2,522
|
|
|
$
|
—
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Terminalling services — related party
|
$
|
—
|
|
|
$
|
1,314
|
|
|
$
|
—
|
|
|
$
|
1,314
|
|
Freight and other reimbursables — related party
|
—
|
|
|
207
|
|
|
—
|
|
|
426
|
|
||||
Total
|
$
|
—
|
|
|
$
|
1,521
|
|
|
$
|
—
|
|
|
$
|
1,740
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Terminalling services — related party
|
$
|
1,735
|
|
|
$
|
—
|
|
|
$
|
3,538
|
|
|
$
|
—
|
|
Fleet leases — related party
|
1,013
|
|
|
—
|
|
|
3,234
|
|
|
—
|
|
||||
Fleet services — related party
|
214
|
|
|
—
|
|
|
686
|
|
|
—
|
|
||||
Freight and other reimbursables — related party
|
33
|
|
|
—
|
|
|
95
|
|
|
—
|
|
||||
Total
|
$
|
2,995
|
|
|
$
|
—
|
|
|
$
|
7,553
|
|
|
$
|
—
|
|
Distribution Declaration Date
|
|
Record Date
|
|
Distribution
Payment Date
|
|
Amount Paid to
USDG
|
|
Amount Paid to
USD Partners GP LLC
|
||||
|
|
|
|
|
|
(in thousands)
|
||||||
January 29, 2015
|
|
February 9, 2015
|
|
February 13, 2015
|
|
$
|
2,817
|
|
|
$
|
102
|
|
April 28, 2015
|
|
May 11, 2015
|
|
May 15, 2015
|
|
3,322
|
|
|
125
|
|
||
July 30, 2015
|
|
August 10, 2015
|
|
August 14, 2015
|
|
3,352
|
|
|
124
|
|
||
|
|
|
|
|
|
$
|
9,491
|
|
|
$
|
351
|
|
|
Three Months Ended September 30, 2015
|
||||||||||||||
|
Terminalling
services |
|
Fleet
services |
|
Corporate
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Terminalling services
|
$
|
15,973
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,973
|
|
Terminalling services
—
related party
|
1,735
|
|
|
—
|
|
|
—
|
|
|
1,735
|
|
||||
Railroad incentives
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||
Fleet leases
|
—
|
|
|
2,036
|
|
|
—
|
|
|
2,036
|
|
||||
Fleet leases
—
related party
|
—
|
|
|
1,013
|
|
|
—
|
|
|
1,013
|
|
||||
Fleet services
|
—
|
|
|
156
|
|
|
—
|
|
|
156
|
|
||||
Fleet services
—
related party
|
—
|
|
|
681
|
|
|
—
|
|
|
681
|
|
||||
Freight and other reimbursables
|
—
|
|
|
152
|
|
|
—
|
|
|
152
|
|
||||
Freight and other reimbursables
—
related party
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
||||
Total revenue
|
17,726
|
|
|
4,071
|
|
|
—
|
|
|
21,797
|
|
||||
Operating costs
|
|
|
|
|
|
|
|
||||||||
Subcontracted rail services
|
1,535
|
|
|
—
|
|
|
—
|
|
|
1,535
|
|
||||
Pipeline fees
|
5,256
|
|
|
—
|
|
|
—
|
|
|
5,256
|
|
||||
Fleet leases
|
—
|
|
|
3,049
|
|
|
—
|
|
|
3,049
|
|
||||
Freight and other reimbursables
|
—
|
|
|
185
|
|
|
—
|
|
|
185
|
|
||||
Selling, general and administrative
|
1,402
|
|
|
297
|
|
|
1,967
|
|
|
3,666
|
|
||||
Depreciation
|
1,055
|
|
|
—
|
|
|
—
|
|
|
1,055
|
|
||||
Total operating costs
|
9,248
|
|
|
3,531
|
|
|
1,967
|
|
|
14,746
|
|
||||
Operating income (loss)
|
8,478
|
|
|
540
|
|
|
(1,967
|
)
|
|
7,051
|
|
||||
Interest expense
|
466
|
|
|
—
|
|
|
457
|
|
|
923
|
|
||||
Gain associated with derivative instruments
|
(2,341
|
)
|
|
—
|
|
|
—
|
|
|
(2,341
|
)
|
||||
Foreign currency transaction loss (gain)
|
(17
|
)
|
|
19
|
|
|
—
|
|
|
2
|
|
||||
Provision for income taxes
|
1,931
|
|
|
211
|
|
|
—
|
|
|
2,142
|
|
||||
Income (loss) from continuing operations
|
$
|
8,439
|
|
|
$
|
310
|
|
|
$
|
(2,424
|
)
|
|
$
|
6,325
|
|
Capital expenditures
|
$
|
691
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
691
|
|
|
Three Months Ended September 30, 2014
|
||||||||||||||
|
Terminalling
services |
|
Fleet
services |
|
Corporate
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Terminalling services
|
$
|
7,873
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,873
|
|
Terminalling services
—
related party
|
1,314
|
|
|
—
|
|
|
—
|
|
|
1,314
|
|
||||
Railroad incentives
|
577
|
|
|
—
|
|
|
—
|
|
|
577
|
|
||||
Fleet leases
|
—
|
|
|
2,189
|
|
|
—
|
|
|
2,189
|
|
||||
Fleet leases
—
related party
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Fleet services
|
—
|
|
|
337
|
|
|
—
|
|
|
337
|
|
||||
Fleet services
—
related party
|
—
|
|
|
366
|
|
|
—
|
|
|
366
|
|
||||
Freight and other reimbursables
|
—
|
|
|
123
|
|
|
—
|
|
|
123
|
|
||||
Freight and other reimbursables
—
related party
|
—
|
|
|
207
|
|
|
—
|
|
|
207
|
|
||||
Total revenue
|
9,764
|
|
|
3,222
|
|
|
—
|
|
|
12,986
|
|
||||
Operating costs
|
|
|
|
|
|
|
|
||||||||
Subcontracted rail services
|
2,486
|
|
|
—
|
|
|
—
|
|
|
2,486
|
|
||||
Pipeline fees
|
1,660
|
|
|
—
|
|
|
—
|
|
|
1,660
|
|
||||
Fleet leases
|
—
|
|
|
2,189
|
|
|
—
|
|
|
2,189
|
|
||||
Freight and other reimbursables
|
—
|
|
|
330
|
|
|
—
|
|
|
330
|
|
||||
Selling, general and administrative
|
1,694
|
|
|
1,221
|
|
|
300
|
|
|
3,215
|
|
||||
Depreciation
|
1,083
|
|
|
—
|
|
|
—
|
|
|
1,083
|
|
||||
Total operating costs
|
6,923
|
|
|
3,740
|
|
|
300
|
|
|
10,963
|
|
||||
Operating income (loss)
|
2,841
|
|
|
(518
|
)
|
|
(300
|
)
|
|
2,023
|
|
||||
Interest expense
|
1,525
|
|
|
—
|
|
|
—
|
|
|
1,525
|
|
||||
Gain associated with derivative instruments
|
(1,375
|
)
|
|
—
|
|
|
—
|
|
|
(1,375
|
)
|
||||
Foreign currency transaction loss (gain)
|
2,996
|
|
|
(5
|
)
|
|
—
|
|
|
2,991
|
|
||||
Provision for income taxes
|
7
|
|
|
54
|
|
|
—
|
|
|
61
|
|
||||
Loss from continuing operations
|
$
|
(312
|
)
|
|
$
|
(567
|
)
|
|
$
|
(300
|
)
|
|
$
|
(1,179
|
)
|
Capital expenditures
|
$
|
2,792
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,792
|
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||
|
Terminalling
services |
|
Fleet
services |
|
Corporate
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Terminalling services
|
$
|
38,639
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38,639
|
|
Terminalling services
—
related party
|
3,538
|
|
|
—
|
|
|
—
|
|
|
3,538
|
|
||||
Railroad incentives
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
||||
Fleet leases
|
—
|
|
|
5,820
|
|
|
—
|
|
|
5,820
|
|
||||
Fleet leases
—
related party
|
—
|
|
|
3,234
|
|
|
—
|
|
|
3,234
|
|
||||
Fleet services
|
—
|
|
|
467
|
|
|
—
|
|
|
467
|
|
||||
Fleet services
—
related party
|
—
|
|
|
2,223
|
|
|
—
|
|
|
2,223
|
|
||||
Freight and other reimbursables
|
—
|
|
|
1,639
|
|
|
—
|
|
|
1,639
|
|
||||
Freight and other reimbursables
—
related party
|
—
|
|
|
95
|
|
|
—
|
|
|
95
|
|
||||
Total revenue
|
42,222
|
|
|
13,478
|
|
|
—
|
|
|
55,700
|
|
||||
Operating costs
|
|
|
|
|
|
|
|
||||||||
Subcontracted rail services
|
5,984
|
|
|
—
|
|
|
—
|
|
|
5,984
|
|
||||
Pipeline fees
|
11,659
|
|
|
—
|
|
|
—
|
|
|
11,659
|
|
||||
Fleet leases
|
—
|
|
|
9,054
|
|
|
—
|
|
|
9,054
|
|
||||
Freight and other reimbursables
|
—
|
|
|
1,734
|
|
|
—
|
|
|
1,734
|
|
||||
Selling, general and administrative
|
3,944
|
|
|
761
|
|
|
5,697
|
|
|
10,402
|
|
||||
Depreciation
|
3,244
|
|
|
—
|
|
|
—
|
|
|
3,244
|
|
||||
Total operating costs
|
24,831
|
|
|
11,549
|
|
|
5,697
|
|
|
42,077
|
|
||||
Operating income (loss)
|
17,391
|
|
|
1,929
|
|
|
(5,697
|
)
|
|
13,623
|
|
||||
Interest expense
|
1,640
|
|
|
—
|
|
|
1,270
|
|
|
2,910
|
|
||||
Gain associated with derivative instruments
|
(4,072
|
)
|
|
—
|
|
|
—
|
|
|
(4,072
|
)
|
||||
Foreign currency transaction loss (gain)
|
37
|
|
|
(8
|
)
|
|
(410
|
)
|
|
(381
|
)
|
||||
Provision for income taxes
|
3,911
|
|
|
236
|
|
|
1
|
|
|
4,148
|
|
||||
Income (loss) from continuing operations
|
$
|
15,875
|
|
|
$
|
1,701
|
|
|
$
|
(6,558
|
)
|
|
$
|
11,018
|
|
Capital expenditures
|
$
|
1,424
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,424
|
|
|
Nine Months Ended September 30, 2014
|
||||||||||||||
|
Terminalling
services |
|
Fleet
services |
|
Corporate
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Terminalling services
|
$
|
11,321
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,321
|
|
Terminalling services - related party
|
1,314
|
|
|
—
|
|
|
—
|
|
|
1,314
|
|
||||
Railroad incentives
|
577
|
|
|
—
|
|
|
—
|
|
|
577
|
|
||||
Fleet leases
|
—
|
|
|
6,785
|
|
|
—
|
|
|
6,785
|
|
||||
Fleet leases - related party
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Fleet services
|
—
|
|
|
575
|
|
|
—
|
|
|
575
|
|
||||
Fleet services
—
related party
|
—
|
|
|
1,084
|
|
|
—
|
|
|
1,084
|
|
||||
Freight and other reimbursables
|
—
|
|
|
1,825
|
|
|
—
|
|
|
1,825
|
|
||||
Freight and other reimbursables
—
related party
|
—
|
|
|
426
|
|
|
—
|
|
|
426
|
|
||||
Total revenue
|
13,212
|
|
|
10,695
|
|
|
—
|
|
|
23,907
|
|
||||
Operating costs
|
|
|
|
|
|
|
|
||||||||
Subcontracted rail services
|
4,595
|
|
|
—
|
|
|
—
|
|
|
4,595
|
|
||||
Pipeline fees
|
1,660
|
|
|
—
|
|
|
—
|
|
|
1,660
|
|
||||
Fleet leases
|
—
|
|
|
6,785
|
|
|
—
|
|
|
6,785
|
|
||||
Freight and other reimbursables
|
—
|
|
|
2,251
|
|
|
—
|
|
|
2,251
|
|
||||
Selling, general and administrative
|
3,649
|
|
|
2,278
|
|
|
1,101
|
|
|
7,028
|
|
||||
Depreciation
|
1,337
|
|
|
—
|
|
|
—
|
|
|
1,337
|
|
||||
Total operating costs
|
11,241
|
|
|
11,314
|
|
|
1,101
|
|
|
23,656
|
|
||||
Operating income (loss)
|
1,971
|
|
|
(619
|
)
|
|
(1,101
|
)
|
|
251
|
|
||||
Interest expense
|
3,509
|
|
|
—
|
|
|
—
|
|
|
3,509
|
|
||||
Gain associated with derivative instruments
|
(573
|
)
|
|
—
|
|
|
—
|
|
|
(573
|
)
|
||||
Foreign currency transaction loss (gain)
|
3,684
|
|
|
(5
|
)
|
|
—
|
|
|
3,679
|
|
||||
Provision for income taxes
|
29
|
|
|
56
|
|
|
—
|
|
|
85
|
|
||||
Loss from continuing operations
|
$
|
(4,678
|
)
|
|
$
|
(670
|
)
|
|
$
|
(1,101
|
)
|
|
$
|
(6,449
|
)
|
Capital expenditures
|
$
|
33,119
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,119
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
|
(in thousands)
|
||||||
Terminalling services
|
$
|
90,812
|
|
|
$
|
102,621
|
|
Fleet services
|
11,198
|
|
|
7,692
|
|
||
Corporate
|
39,395
|
|
|
40,867
|
|
||
Total assets
|
$
|
141,405
|
|
|
$
|
151,180
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Adjusted EBITDA
|
|
|
|
|
|
|
|
||||||||
Terminalling services
|
$
|
10,387
|
|
|
$
|
5,272
|
|
|
$
|
31,547
|
|
|
$
|
4,656
|
|
Fleet services
|
540
|
|
|
347
|
|
|
1,929
|
|
|
856
|
|
||||
Corporate activities
|
(1,200
|
)
|
|
(300
|
)
|
|
(3,529
|
)
|
|
(1,101
|
)
|
||||
Total Adjusted EBITDA
|
9,727
|
|
|
5,319
|
|
|
29,947
|
|
|
4,411
|
|
||||
Add (deduct):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(923
|
)
|
|
(1,525
|
)
|
|
(2,910
|
)
|
|
(3,509
|
)
|
||||
Depreciation
|
(1,055
|
)
|
|
(1,083
|
)
|
|
(3,244
|
)
|
|
(1,337
|
)
|
||||
Provision for income taxes
|
(2,142
|
)
|
|
(61
|
)
|
|
(4,148
|
)
|
|
(85
|
)
|
||||
Gain associated with derivative instruments
|
2,341
|
|
|
1,375
|
|
|
4,072
|
|
|
573
|
|
||||
Settlement of derivative contracts
(1)
|
(1,207
|
)
|
|
—
|
|
|
(2,885
|
)
|
|
—
|
|
||||
Unit based compensation expense
|
(767
|
)
|
|
—
|
|
|
(2,168
|
)
|
|
—
|
|
||||
Foreign currency transaction gain (loss)
(2)
|
(2
|
)
|
|
(2,991
|
)
|
|
381
|
|
|
(3,679
|
)
|
||||
Unrecovered reimbursable freight costs
(3)
|
—
|
|
|
(865
|
)
|
|
—
|
|
|
(1,475
|
)
|
||||
Deferred revenue associated with minimum monthly commitment fees
(4)
|
353
|
|
|
(1,348
|
)
|
|
(8,027
|
)
|
|
(1,348
|
)
|
||||
Income (loss) from continuing operations
|
$
|
6,325
|
|
|
$
|
(1,179
|
)
|
|
$
|
11,018
|
|
|
$
|
(6,449
|
)
|
(1)
|
The amounts presented represent the gross proceeds received at the time the derivative contracts were settled and do not consider the amounts paid in connection with the initial purchase of the derivative contracts. We purchased the derivative contracts for
$108 thousand
and
$281 thousand
with respect to the contracts settled in the
three and nine months ended September 30, 2015
, respectively.
|
(2)
|
Represents the impact of exchange rate fluctuations on U.S. dollar denominated transactions incurred by our Canadian subsidiaries, primarily related to our Hardisty rail terminal operations.
|
(3)
|
Represents costs incurred associated with unrecovered reimbursable freight costs related to the initial delivery of railcars in support of the Hardisty rail terminal.
|
(4)
|
Represents deferred revenue associated with minimum monthly commitment fees in excess of throughput utilized, which fees are not refundable to the customers. Amounts presented are net of: (a) the corresponding prepaid Gibson pipeline fee that will be recognized as expense concurrently with the recognition of revenue; (b) approximately
$11.8 million
and
$25.7 million
of previously deferred revenue generated in prior periods for the
three and nine months ended September 30, 2015
, respectively; and (c) approximately
$3.9 million
and
$8.1 million
of previously prepaid Gibson pipeline fees for the
three and nine months ended September 30, 2015
, respectively. Refer to additional discussion of these items in Notes 7 and 9 of our consolidated financial statements.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Current income tax expense
|
|
|
|
|
|
|
|
||||||||
State income taxes
|
$
|
90
|
|
|
$
|
61
|
|
|
$
|
133
|
|
|
$
|
85
|
|
U.S. federal income taxes
|
133
|
|
|
—
|
|
|
133
|
|
|
—
|
|
||||
Canadian federal and provincial income taxes
|
1,960
|
|
|
—
|
|
|
3,045
|
|
|
—
|
|
||||
Total current income tax expense
|
2,183
|
|
|
61
|
|
|
3,311
|
|
|
85
|
|
||||
Deferred income tax expense
|
|
|
|
|
|
|
|
||||||||
Canadian federal and provincial income taxes
|
(41
|
)
|
|
—
|
|
|
837
|
|
|
—
|
|
||||
Total deferred income tax expense
|
(41
|
)
|
|
—
|
|
|
837
|
|
|
—
|
|
||||
Total income tax expense
|
$
|
2,142
|
|
|
$
|
61
|
|
|
$
|
4,148
|
|
|
$
|
85
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
September 30, 2015
|
||||||
|
(in thousands)
|
||||||
Income tax expense at the U.S. statutory rate of 34%
|
$
|
2,878
|
|
|
$
|
5,156
|
|
Income attributable to partnership not subject to income tax
|
(40
|
)
|
|
380
|
|
||
Foreign income tax rate differential
|
(548
|
)
|
|
(1,215
|
)
|
||
Other
|
107
|
|
|
89
|
|
||
State income taxes
|
90
|
|
|
133
|
|
||
Change in valuation allowance
|
(345
|
)
|
|
(395
|
)
|
||
Total income tax expense
|
$
|
2,142
|
|
|
$
|
4,148
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
|
(in thousands)
|
||||||
Deferred income tax assets
|
|
|
|
||||
Deferred revenues
|
$
|
1,497
|
|
|
$
|
1,939
|
|
Capital and operating loss carryovers
|
443
|
|
|
1,496
|
|
||
Valuation allowance
|
(996
|
)
|
|
(1,391
|
)
|
||
|
944
|
|
|
2,044
|
|
||
Deferred income tax liabilities
|
|
|
|
||||
Prepaid expense
|
915
|
|
|
1,098
|
|
||
Property and equipment
|
813
|
|
|
946
|
|
||
|
1,728
|
|
|
2,044
|
|
||
Net deferred income tax liability
|
$
|
784
|
|
|
$
|
—
|
|
•
|
Level 1 — Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 — Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities).
|
•
|
Level 3 — Significant unobservable inputs (including our own assumptions in determining fair value).
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
|
(in thousands)
|
||||||
Other current assets
|
$
|
3,295
|
|
|
$
|
1,660
|
|
Other non-current assets
|
719
|
|
|
—
|
|
||
Total
|
$
|
4,014
|
|
|
$
|
1,660
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Gain associated with derivative instruments
|
$
|
(2,341
|
)
|
|
$
|
(1,375
|
)
|
|
$
|
(4,072
|
)
|
|
$
|
(573
|
)
|
|
|
|
|
|
|
|
|
Fair Value
|
||||||||||
|
|
Notional (C$)
|
|
Strike Price
(1)
|
|
Market Price
(1)
|
|
September 30, 2015
|
|
December 31, 2014
|
||||||||
|
|
|
|
|
|
|
|
(in thousands)
|
||||||||||
Portion of option contracts maturing in 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||
Puts (purchased)
|
|
$
|
7,492,100
|
|
|
0.9100
|
|
|
0.7512
|
|
|
$
|
1,183
|
|
|
$
|
1,729
|
|
Calls (written)
|
|
$
|
7,492,100
|
|
|
0.9300
|
|
|
0.7512
|
|
|
$
|
—
|
|
|
$
|
(69
|
)
|
Portion of option contracts maturing in 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||
Puts (purchased)
|
|
$
|
32,011,290
|
|
|
0.8400
|
|
|
0.7512
|
|
|
$
|
2,879
|
|
|
$
|
—
|
|
Calls (written)
|
|
$
|
32,011,290
|
|
|
0.8600
|
|
|
0.7512
|
|
|
$
|
(48
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
|
|
|
|
|
|
$
|
4,014
|
|
|
$
|
1,660
|
|
|
|
September 30, 2015
|
||||||||||||||||||
|
|
Current assets
|
|
Non-current assets
|
|
Current liabilities
|
|
Non-current liabilities
|
|
Total
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Fair value of derivatives — gross presentation
|
|
$
|
3,295
|
|
|
$
|
719
|
|
|
$
|
(36
|
)
|
|
$
|
(12
|
)
|
|
$
|
4,062
|
|
Effects of netting arrangements
|
|
—
|
|
|
—
|
|
|
36
|
|
|
12
|
|
|
(48
|
)
|
|||||
Fair value of derivatives — net presentation
|
|
$
|
3,295
|
|
|
$
|
719
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,014
|
|
|
|
December 31, 2014
|
||||||||||||||||||
|
|
Current assets
|
|
Non-current assets
|
|
Current liabilities
|
|
Non-current liabilities
|
|
Total
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Fair value of derivatives — gross presentation
|
|
$
|
1,660
|
|
|
$
|
—
|
|
|
$
|
(69
|
)
|
|
$
|
—
|
|
|
$
|
1,729
|
|
Effects of netting arrangements
|
|
—
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
(69
|
)
|
|||||
Fair value of derivatives — net presentation
|
|
$
|
1,660
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,660
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
September 30, 2015
|
||||||
|
(in thousands)
|
||||||
Equity-classified Phantom Units
(1)
|
$
|
107
|
|
|
$
|
219
|
|
Liability-classified Phantom Units
|
8
|
|
|
16
|
|
||
Total
|
$
|
115
|
|
|
$
|
235
|
|
|
Nine Months Ended September 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(in thousands)
|
||||||
Cash paid for income taxes
|
$
|
2,352
|
|
|
$
|
86
|
|
Cash paid for interest
|
$
|
2,787
|
|
|
$
|
2,396
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenues and other income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
452
|
|
Bad debt expense
|
—
|
|
|
183
|
|
|
—
|
|
|
603
|
|
||||
Loss before provision for income taxes
|
—
|
|
|
(183
|
)
|
|
—
|
|
|
(151
|
)
|
||||
Provision for income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Net loss
|
$
|
—
|
|
|
$
|
(183
|
)
|
|
$
|
—
|
|
|
$
|
(152
|
)
|
•
|
our customers’ utilization of our terminals in excess of their minimum monthly commitment fees;
|
•
|
our ability to identify and execute accretive acquisitions and organic development projects which add incremental volumes; and
|
•
|
our ability to renew contracts with existing customers, enter into contracts with new customers, increase customer commitments and throughput volumes at our rail terminals, and provide additional ancillary services at those terminals.
|
•
|
our operating performance as compared to those of other companies in the midstream energy sector, without regard to financing methods, historical cost basis or capital structure;
|
•
|
the ability of our assets to generate sufficient cash flow to make distributions to our partners;
|
•
|
our ability to incur and service debt and fund capital expenditures; and
|
•
|
the viability of acquisitions and other capital expenditure projects and our ability to generate incremental cash flows from these opportunities.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Reconciliation of Adjusted EBITDA and Distributable Cash Flow to net cash flows provided by operating activities and net income (loss):
|
|
|
|
|
|
|
|
||||||||
Net cash flows from operating activities
|
$
|
10,988
|
|
|
$
|
(4,048
|
)
|
|
$
|
26,277
|
|
|
$
|
(2,381
|
)
|
Add (deduct):
|
|
|
|
|
|
|
|
||||||||
Discontinued operations
|
—
|
|
|
(183
|
)
|
|
—
|
|
|
(152
|
)
|
||||
Depreciation
|
(1,055
|
)
|
|
(1,083
|
)
|
|
(3,244
|
)
|
|
(1,337
|
)
|
||||
Gain associated with derivative instruments
|
2,341
|
|
|
1,375
|
|
|
4,072
|
|
|
573
|
|
||||
Settlement of derivative contracts
(1)
|
(1,207
|
)
|
|
—
|
|
|
(2,885
|
)
|
|
—
|
|
||||
Bad debt expense
|
—
|
|
|
(865
|
)
|
|
—
|
|
|
(1,475
|
)
|
||||
Amortization of deferred financing costs
|
(152
|
)
|
|
(220
|
)
|
|
(471
|
)
|
|
(877
|
)
|
||||
Unit based compensation expense
|
(767
|
)
|
|
—
|
|
|
(2,168
|
)
|
|
—
|
|
||||
Deferred income taxes
|
41
|
|
|
—
|
|
|
(837
|
)
|
|
—
|
|
||||
Changes in accounts receivable and other assets
|
(2,789
|
)
|
|
2,508
|
|
|
2,698
|
|
|
5,105
|
|
||||
Changes in accounts payable and accrued expenses
|
(815
|
)
|
|
4,838
|
|
|
788
|
|
|
2,488
|
|
||||
Changes in deferred revenue and other liabilities
|
(286
|
)
|
|
(3,684
|
)
|
|
(12,915
|
)
|
|
(8,545
|
)
|
||||
Change in restricted cash
|
26
|
|
|
—
|
|
|
(297
|
)
|
|
—
|
|
||||
Net income (loss)
|
6,325
|
|
|
(1,362
|
)
|
|
11,018
|
|
|
(6,601
|
)
|
||||
Add (deduct):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
923
|
|
|
1,525
|
|
|
2,910
|
|
|
3,509
|
|
||||
Depreciation
|
1,055
|
|
|
1,083
|
|
|
3,244
|
|
|
1,337
|
|
||||
Provision for income taxes
|
2,142
|
|
|
61
|
|
|
4,148
|
|
|
85
|
|
||||
EBITDA
|
10,445
|
|
|
1,307
|
|
|
21,320
|
|
|
(1,670
|
)
|
||||
Add (deduct):
|
|
|
|
|
|
|
|
||||||||
Gain associated with derivative instruments
|
(2,341
|
)
|
|
(1,375
|
)
|
|
(4,072
|
)
|
|
(573
|
)
|
||||
Settlement of derivative contracts
(1)
|
1,207
|
|
|
—
|
|
|
2,885
|
|
|
—
|
|
||||
Unit based compensation expense
|
767
|
|
|
—
|
|
|
2,168
|
|
|
—
|
|
||||
Foreign currency transaction loss (gain)
(2)
|
2
|
|
|
2,991
|
|
|
(381
|
)
|
|
3,679
|
|
||||
Unrecovered reimbursable freight costs
(3)
|
—
|
|
|
865
|
|
|
—
|
|
|
1,475
|
|
||||
Deferred revenue associated with minimum monthly commitment fees
(4)
|
(353
|
)
|
|
1,348
|
|
|
8,027
|
|
|
1,348
|
|
||||
Discontinued operations
|
—
|
|
|
183
|
|
|
—
|
|
|
152
|
|
||||
Adjusted EBITDA
|
9,727
|
|
|
5,319
|
|
|
29,947
|
|
|
4,411
|
|
||||
Add (deduct):
|
|
|
|
|
|
|
|
||||||||
Cash paid for income taxes
|
(2,070
|
)
|
|
(61
|
)
|
|
(2,352
|
)
|
|
(86
|
)
|
||||
Cash paid for interest
|
(827
|
)
|
|
(1,261
|
)
|
|
(2,787
|
)
|
|
(2,396
|
)
|
||||
Distributable cash flow
|
$
|
6,830
|
|
|
$
|
3,997
|
|
|
$
|
24,808
|
|
|
$
|
1,929
|
|
(1)
|
The amounts presented represent the gross proceeds received at the time the derivative contracts were settled and do not consider the amounts paid in connection with the initial purchase of the derivative contracts. We purchased the derivative contracts for
$108 thousand
and
$281 thousand
with respect to the contracts settled in the
three and nine months ended September 30, 2015
, respectively.
|
(2)
|
Represents the impact of exchange rate fluctuations on U.S. dollar denominated transactions incurred by our Canadian subsidiaries, primarily related to our Hardisty rail terminal operations.
|
(3)
|
Represents costs incurred associated with unrecovered reimbursable freight costs related to the initial delivery of railcars in support of the Hardisty rail terminal.
|
(4)
|
Represents deferred revenue associated with minimum monthly commitment fees in excess of throughput utilized, which fees are not refundable to the customers. Amounts presented are net of: (a) the corresponding prepaid Gibson pipeline fee that will be recognized as expense concurrently with the recognition of revenue; (b) approximately
$11.8 million
and
$25.7 million
of previously deferred revenue generated in prior periods for the three and
nine months ended September 30, 2015
, respectively; and (c) approximately
$3.9 million
and
$8.1 million
of previously prepaid Gibson pipeline fees for the three and
nine months ended September 30, 2015
, respectively, which correspond with the previously deferred revenue recognized. Refer to additional discussion of these items in Notes 7 and 9 of our consolidated financial statements included in Part I, Item 1 of this report.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Operating income
|
|
|
|
|
|
|
|
||||||||
Terminalling services
|
$
|
8,478
|
|
|
$
|
2,841
|
|
|
$
|
17,391
|
|
|
$
|
1,971
|
|
Fleet services
|
540
|
|
|
(518
|
)
|
|
1,929
|
|
|
(619
|
)
|
||||
Corporate and other
|
(1,967
|
)
|
|
(300
|
)
|
|
(5,697
|
)
|
|
(1,101
|
)
|
||||
Total Operating income
|
7,051
|
|
|
2,023
|
|
|
13,623
|
|
|
251
|
|
||||
Interest expense
|
923
|
|
|
1,525
|
|
|
2,910
|
|
|
3,509
|
|
||||
Gain associated with derivative instruments
|
(2,341
|
)
|
|
(1,375
|
)
|
|
(4,072
|
)
|
|
(573
|
)
|
||||
Foreign currency transaction loss (gain)
|
2
|
|
|
2,991
|
|
|
(381
|
)
|
|
3,679
|
|
||||
Provision for income taxes
|
2,142
|
|
|
61
|
|
|
4,148
|
|
|
85
|
|
||||
Income (loss) from continuing operations
|
6,325
|
|
|
(1,179
|
)
|
|
11,018
|
|
|
(6,449
|
)
|
||||
Loss from discontinued operations
|
—
|
|
|
(183
|
)
|
|
—
|
|
|
(152
|
)
|
||||
Net income (loss)
|
$
|
6,325
|
|
|
$
|
(1,362
|
)
|
|
$
|
11,018
|
|
|
$
|
(6,601
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Terminalling services
|
$
|
17,708
|
|
|
$
|
9,187
|
|
|
$
|
42,177
|
|
|
$
|
12,635
|
|
Railroad incentives
|
18
|
|
|
577
|
|
|
45
|
|
|
577
|
|
||||
Total revenues
|
17,726
|
|
|
9,764
|
|
|
42,222
|
|
|
13,212
|
|
||||
Operating costs
|
|
|
|
|
|
|
|
||||||||
Subcontracted rail services
|
1,535
|
|
|
2,486
|
|
|
5,984
|
|
|
4,595
|
|
||||
Pipeline fees
|
5,256
|
|
|
1,660
|
|
|
11,659
|
|
|
1,660
|
|
||||
Selling, general and administrative
|
1,402
|
|
|
1,694
|
|
|
3,944
|
|
|
3,649
|
|
||||
Depreciation
|
1,055
|
|
|
1,083
|
|
|
3,244
|
|
|
1,337
|
|
||||
Total operating costs
|
9,248
|
|
|
6,923
|
|
|
24,831
|
|
|
11,241
|
|
||||
Operating income
|
8,478
|
|
|
2,841
|
|
|
17,391
|
|
|
1,971
|
|
||||
Interest expense
|
466
|
|
|
1,525
|
|
|
1,640
|
|
|
3,509
|
|
||||
Gain associated with derivative instruments
|
(2,341
|
)
|
|
(1,375
|
)
|
|
(4,072
|
)
|
|
(573
|
)
|
||||
Foreign currency transaction loss (gain)
|
(17
|
)
|
|
2,996
|
|
|
37
|
|
|
3,684
|
|
||||
Provision for income taxes
|
1,931
|
|
|
7
|
|
|
3,911
|
|
|
29
|
|
||||
Income (loss) from continuing operations
|
$
|
8,439
|
|
|
$
|
(312
|
)
|
|
$
|
15,875
|
|
|
$
|
(4,678
|
)
|
Average daily terminal throughput (bpd)
|
25,938
|
|
|
66,423
|
|
|
26,062
|
|
|
32,395
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Fleet leases
|
$
|
3,049
|
|
|
$
|
2,189
|
|
|
$
|
9,054
|
|
|
$
|
6,785
|
|
Fleet services
|
837
|
|
|
703
|
|
|
2,690
|
|
|
1,659
|
|
||||
Freight and other reimbursables
|
185
|
|
|
330
|
|
|
1,734
|
|
|
2,251
|
|
||||
Total revenues
|
4,071
|
|
|
3,222
|
|
|
13,478
|
|
|
10,695
|
|
||||
Operating costs
|
|
|
|
|
|
|
|
||||||||
Fleet leases
|
3,049
|
|
|
2,189
|
|
|
9,054
|
|
|
6,785
|
|
||||
Freight and other reimbursables
|
185
|
|
|
330
|
|
|
1,734
|
|
|
2,251
|
|
||||
Selling, general and administrative
|
297
|
|
|
1,221
|
|
|
761
|
|
|
2,278
|
|
||||
Total operating costs
|
3,531
|
|
|
3,740
|
|
|
11,549
|
|
|
11,314
|
|
||||
Operating income (loss)
|
540
|
|
|
(518
|
)
|
|
1,929
|
|
|
(619
|
)
|
||||
Foreign currency transaction loss (gain)
|
19
|
|
|
(5
|
)
|
|
(8
|
)
|
|
(5
|
)
|
||||
Provision for income taxes
|
211
|
|
|
54
|
|
|
236
|
|
|
56
|
|
||||
Income (loss) from continuing operations
|
$
|
310
|
|
|
$
|
(567
|
)
|
|
$
|
1,701
|
|
|
$
|
(670
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Adjusted EBITDA
|
|
|
|
|
|
|
|
||||||||
Terminalling services
|
$
|
10,387
|
|
|
$
|
5,272
|
|
|
$
|
31,547
|
|
|
$
|
4,656
|
|
Fleet services
|
540
|
|
|
347
|
|
|
1,929
|
|
|
856
|
|
||||
Corporate activities
(1)
|
(1,200
|
)
|
|
(300
|
)
|
|
(3,529
|
)
|
|
(1,101
|
)
|
||||
Total Adjusted EBITDA
|
9,727
|
|
|
5,319
|
|
|
29,947
|
|
|
4,411
|
|
||||
Add (deduct):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(923
|
)
|
|
(1,525
|
)
|
|
(2,910
|
)
|
|
(3,509
|
)
|
||||
Depreciation
|
(1,055
|
)
|
|
(1,083
|
)
|
|
(3,244
|
)
|
|
(1,337
|
)
|
||||
Provision for income taxes
|
(2,142
|
)
|
|
(61
|
)
|
|
(4,148
|
)
|
|
(85
|
)
|
||||
Gain associated with derivative instruments
|
2,341
|
|
|
1,375
|
|
|
4,072
|
|
|
573
|
|
||||
Settlement of derivative contracts
(2)
|
(1,207
|
)
|
|
—
|
|
|
(2,885
|
)
|
|
—
|
|
||||
Unit based compensation expense
|
(767
|
)
|
|
—
|
|
|
(2,168
|
)
|
|
—
|
|
||||
Foreign currency transaction gain (loss)
(3)
|
(2
|
)
|
|
(2,991
|
)
|
|
381
|
|
|
(3,679
|
)
|
||||
Unrecovered reimbursable freight costs
(4)
|
—
|
|
|
(865
|
)
|
|
—
|
|
|
(1,475
|
)
|
||||
Deferred revenue associated with minimum monthly commitment fees
(5)
|
353
|
|
|
(1,348
|
)
|
|
(8,027
|
)
|
|
(1,348
|
)
|
||||
Income (loss) from continuing operations
|
$
|
6,325
|
|
|
$
|
(1,179
|
)
|
|
$
|
11,018
|
|
|
$
|
(6,449
|
)
|
(1)
|
Corporate activities represents corporate and financing transactions that are not allocated to the established reporting segments.
|
(2)
|
The amounts presented represent the gross proceeds received at the time the derivative contracts were settled and do not consider the amounts paid in connection with the initial purchase of the derivative contracts. We purchased the derivative contracts for
$108 thousand
and
$281 thousand
with respect to the contracts settled in the
three and nine months ended September 30, 2015
, respectively.
|
(3)
|
Represents the impact of exchange rate fluctuations on U.S. dollar denominated transactions incurred by our Canadian subsidiaries, primarily related to our Hardisty rail terminal operations.
|
(4)
|
Represents costs incurred associated with unrecovered reimbursable freight costs related to the initial delivery of railcars in support of the Hardisty rail terminal.
|
(5)
|
Represents deferred revenue associated with minimum monthly commitment fees in excess of throughput utilized, which fees are not refundable to the customers. Amounts presented are net of: (a) the corresponding prepaid Gibson pipeline fee that will be recognized as expense concurrently with the recognition of revenue; (b) approximately
$11.8 million
and
$25.7 million
of previously deferred revenue generated in prior periods for the three and
nine months ended September 30, 2015
, respectively; and (c) approximately
$3.9 million
and
$8.1 million
of previously prepaid Gibson pipeline fees for the three and
nine months ended September 30, 2015
, respectively. Refer to additional discussion of these items in Notes 7 and 9 of our consolidated financial statements included in Part I, Item 1 of this report.
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
|
(in millions)
|
||||||
Cash and cash equivalents
|
$
|
41.1
|
|
|
$
|
40.2
|
|
Aggregate borrowing capacity under Credit Agreement
|
300.0
|
|
|
300.0
|
|
||
Less: Term Loan Facility amounts outstanding
|
48.9
|
|
|
81.4
|
|
||
Revolving Credit Facility amounts outstanding
|
18.0
|
|
|
—
|
|
||
Letters of credit outstanding
|
—
|
|
|
—
|
|
||
Total available liquidity
|
$
|
274.2
|
|
|
$
|
258.8
|
|
|
Nine Months Ended September 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(in thousands)
|
||||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
26,277
|
|
|
$
|
(2,381
|
)
|
Investing activities
|
(2,591
|
)
|
|
(33,587
|
)
|
||
Financing activities
|
(22,423
|
)
|
|
31,047
|
|
||
Discontinued operations
|
—
|
|
|
26,200
|
|
||
Effect of exchange rates on cash
|
(442
|
)
|
|
725
|
|
||
Net increase in cash and cash equivalents
|
$
|
821
|
|
|
$
|
22,004
|
|
•
|
Consolidated Interest Coverage Ratio (as defined in the Credit Agreement), of at least 2.50 to 1.00;
|
•
|
Consolidated Total Leverage Ratio of not greater than 4.50 to 1.00 (or 5.00 to 1.00 at any time after we have issued at least $150.0 million of unsecured notes). In addition, upon the consummation of a Material Acquisition (as defined in the Credit Agreement), for the fiscal quarter in which the Material Acquisition is consummated and for two fiscal quarters immediately following such fiscal quarter, or the Material Acquisition Period, if elected by us by written notice to the Administrative Agent given on or prior to the date of such acquisition, the maximum permitted ratio shall be increased by 0.50 to 1.00 above the otherwise relevant level; and
|
•
|
after we have issued at least $150.0 million of unsecured notes, a Consolidated Senior Secured Leverage Ratio (as defined in the Credit Agreement) of not greater than 3.50 to 1.00 (or 4.00 to 1.00 during a Material Acquisition Period).
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
|
|
|
|
|
|
|
|
Fair Value
|
||||||||||
|
|
Notional (C$)
|
|
Strike Price
(1)
|
|
Market Price
(1)
|
|
September 30, 2015
|
|
December 31, 2014
|
||||||||
|
|
|
|
|
|
|
|
(in thousands)
|
||||||||||
Portion of option contracts maturing in 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||
Puts (purchased)
|
|
$
|
7,492,100
|
|
|
0.9100
|
|
|
0.7512
|
|
|
$
|
1,183
|
|
|
$
|
1,729
|
|
Calls (written)
|
|
$
|
7,492,100
|
|
|
0.9300
|
|
|
0.7512
|
|
|
$
|
—
|
|
|
$
|
(69
|
)
|
Portion of option contracts maturing in 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||
Puts (purchased)
|
|
$
|
32,011,290
|
|
|
0.8400
|
|
|
0.7512
|
|
|
$
|
2,879
|
|
|
$
|
—
|
|
Calls (written)
|
|
$
|
32,011,290
|
|
|
0.8600
|
|
|
0.7512
|
|
|
$
|
(48
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
|
|
|
|
|
|
$
|
4,014
|
|
|
$
|
1,660
|
|
(1)
|
Strike and market prices are denoted in amounts where a Canadian dollar is exchanged for the indicated amount of U.S. dollars.
|
Item 4.
|
Controls and Procedures.
|
|
|
USD P
ARTNERS
LP
(Registrant)
|
|
|
|
|
|
|
|
By:
|
USD Partners GP LLC,
its General Partner
|
|
|
|
|
Date:
|
November 13, 2015
|
By:
|
/s/ Dan Borgen
|
|
|
|
Dan Borgen
Chief Executive Officer and President
(Principal Executive Officer)
|
|
|
|
|
Date:
|
November 13, 2015
|
By:
|
/s/ Adam Altsuler
|
|
|
|
Adam Altsuler
Chief Financial Officer
(Principal Financial Officer)
|
|
|
Index of Exhibits
|
Exhibit
Number
|
|
Description
|
|
|
|
2.1#
|
|
Membership Interest Purchase Agreement between Casper Crude to Rail Holdings, LLC and USDP CCR LLC dated October 12, 2015 (incorporated by reference herein to Exhibit 2.1 to the Current Report on Form 8-K, filed on October 13, 2015).
|
|
|
|
3.1
|
|
Certificate of Limited Partnership of USD Partners LP (incorporated by reference herein to Exhibit 3.1 to the Registration Statement on Form S-1 (File No. 333-198500) filed on August 29, 2014, as amended).
|
|
|
|
3.2
|
|
Second Amended and Restated Agreement of Limited Partnership of USD Partners LP dated October 15, 2014, by and between USD Partners GP LLC and USD Group LLC (incorporated by reference herein to Exhibit 3.1 to the Current Report on Form 8-K filed on October 21, 2014).
|
|
|
|
10.1*
|
|
First Amendment to the Credit Agreement dated November 6, 2015,among USD Partners LP and USD Terminals Canada ULC, as borrowers, Citibank, N.A., as administrative agent, swing line lender and l.c. issuer, U.S. Bank National Association, as an l.c. issuer and the lenders from time to time party thereto (incorporated by reference herein to Exhibit 10.1 of the Current Report on Form 8-K filed on November 6, 2015).
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1**
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2**
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
101.SCH*
|
|
XBRL Schema Document
|
|
|
|
101.CAL*
|
|
XBRL Calculation Linkbase Document
|
|
|
|
101.LAB*
|
|
XBRL Labels Linkbase Document
|
|
|
|
101.PRE*
|
|
XBRL Presentation Linkbase Document
|
|
|
|
101.DEF*
|
|
XBRL Definition Linkbase Document
|
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
#
|
The registrant has omitted the schedules to this exhibit pursuant to the provisions of Regulation S-K, Item 601(b)(2). The registrant shall supplementary furnish a copy of the omitted schedules to the Securities and Exchange Commission upon request.
|
Lender
|
Revolving Credit Commitment
|
Pro Rata Share of Revolving Credit Commitments
|
Term Commitment (as of the Closing Date)
|
Pro Rata Share of Term Commitments (as of the Closing Date)
|
Citibank, N.A.
|
$47,000,000
|
11.750000%
|
$11,666,667
|
11.666667%
|
U.S. Bank National Association
|
$47,000,000
|
11.750000%
|
$11,666,667
|
11.666667%
|
Bank of America, N.A.
|
$40,000,000
|
10.000000%
|
$10,000,000
|
10.000000%
|
Barclays Bank plc
|
$40,000,000
|
10.000000%
|
$10,000,000
|
10.000000%
|
Bank of Montreal
|
$37,000,000
|
9.250000%
|
$7,333,333
|
7.333333%
|
Deutsche Bank AG, New York Branch
|
$37,000,000
|
9.250000%
|
$7,333,333
|
7.333333%
|
Wells Fargo Bank, N.A., Canadian Branch
|
$32,500,000
|
8.125000%
|
$7,333,333
|
7.333333%
|
Credit Suisse AG, Cayman Islands Branch
|
$30,000,000
|
7.500000%
|
$10,000,000
|
10.000000%
|
Regions Bank
|
$30,000,000
|
7.500000%
|
$7,333,333
|
7.333333%
|
Royal Bank of Canada
|
$22,000,000
|
5.500000%
|
$7,333,333
|
7.333333%
|
First Tennessee Bank National Association
|
$15,000,000
|
3.750000%
|
$5,000,000
|
5.000000%
|
Sumitomo Mitsui Banking Corporation
|
$15,000,000
|
3.750000%
|
$5,000,000
|
5.000000%
|
Goldman Sachs Bank USA
|
$7,500,000
|
1.875000%
|
$0
|
0.000000%
|
TOTAL
|
$400,000,000
|
100.0%
|
$100,000,000
|
100.0%
|
1
|
I have reviewed this quarterly report on Form 10-Q (this “report”) of USD Partners LP (the “registrant”);
|
2
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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)
|
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
|
(c)
|
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:
|
November 13, 2015
|
|
/s/ Dan Borgen
|
|
|
|
Dan Borgen
|
|
|
|
Chief Executive Officer and President
(
Principal Executive Officer)
|
1
|
I have reviewed this quarterly report on Form 10-Q (this “report”) of USD Partners LP (the “registrant”);
|
2
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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)
|
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
|
(c)
|
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:
|
November 13, 2015
|
|
/s/ Adam Altsuler
|
|
|
|
Adam Altsuler
|
|
|
|
Chief Financial Officer
(
Principal Financial Officer)
|
(1)
|
the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2015
(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:
|
November 13, 2015
|
|
/s/ Dan Borgen
|
|
|
|
Dan Borgen
|
|
|
|
Chief Executive Officer and President
(
Principal Executive Officer)
|
(1)
|
the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2015
(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:
|
November 13, 2015
|
|
/s/ Adam Altsuler
|
|
|
|
Adam Altsuler
|
|
|
|
Chief Financial Officer
(
Principal Financial Officer)
|