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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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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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82-1646447
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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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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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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•
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The continued ability of BP and any non-affiliate customers to satisfy their obligations under our commercial and other agreements and the impact of lower market prices for crude oil, natural gas, refined products and diluent.
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The volume of crude oil, natural gas, refined products and diluent we transport or store and the prices that we can charge our customers.
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The tariff rates with respect to volumes that we transport through our regulated assets, which rates are subject to review and possible adjustment imposed by federal and state regulators.
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Changes in revenue we realize under the fixed loss allowance provisions of our fees and tariffs resulting from changes in underlying commodity prices.
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Fluctuations in the prices for crude oil, natural gas, refined products and diluent.
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The level of onshore and offshore production and demand for crude oil, natural gas, refined products and diluent.
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Our ability to successfully integrate recently acquired assets with our own and realize the anticipated benefits of such acquisition.
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Changes in global economic conditions and the effects of a global economic downturn on the business of BP and the business of its suppliers, customers, business partners and credit lenders.
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Liabilities associated with the risks and operational hazards inherent in transporting and/or storing crude oil, natural gas, refined products and diluent.
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Curtailment of operations or expansion projects due to unexpected leaks or spills; severe weather disruption; riots, strikes, lockouts or other industrial disturbances; or failure of information technology systems due to various causes, including unauthorized access or attack.
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Costs or liabilities associated with federal, state and local laws and regulations relating to environmental protection and safety, including spills, releases and pipeline integrity.
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Costs associated with compliance with evolving environmental laws and regulations on climate change.
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Costs associated with compliance with safety regulations and system maintenance programs, including pipeline integrity management program testing and related repairs.
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Changes in tax status.
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Changes in the cost or availability of third-party vessels, pipelines, rail cars and other means of delivering and transporting crude oil, natural gas, refined products and diluent.
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Direct or indirect effects on our business resulting from actual or threatened terrorist incidents or acts of war.
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Changes in, and availability to us, of the equity and debt capital markets.
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Barrel
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One stock tank barrel, or 42 U.S. gallons liquid volume, used in reference to crude oil or other liquid hydrocarbons.
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Bbl
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Barrel.
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BSEE
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Bureau of Safety and Environmental Enforcement.
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BP
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BP p.l.c. and, unless context otherwise requires, its controlled affiliates, other than BP Midstream Partners LP, its subsidiaries and general partner.
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BP2
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BP#2 crude oil pipeline system and related assets.
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BP2 OpCo
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BP Two Pipeline Company LLC, which owns BP2.
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BPA
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BP America Inc.
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BP Holdco
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BP Midstream Partners Holdings LLC.
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BPMP
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BP Midstream Partners LP listed on the New York Stock Exchange.
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BP Pipelines
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BP Pipelines (North America), Inc.
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BP Products
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BP Products North America, Inc.
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Capacity
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A pipeline’s individual or aggregate capacity is intended as the capacity for the primary purpose of the pipeline based on our experience and/or calculations. For crude pipeline systems, this is typically the delivery capacity to the final destination (even if the system has segments with differing capacity). For product pipeline systems, this is typically the capacity to transport to one or where appropriate a number of delivery points along the pipeline. Furthermore, note that the capacity of a pipeline can change based on the mix of commodities shipped, the physical characteristics of those commodities, the destination of the commodity, and the operating scenario. Therefore, the capacity stated is subject to change based on future physical modifications, commodity changes, or changes in operating scenarios.
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CERCLA
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Comprehensive Environmental Response, Compensation, and Liability Act.
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Clean Water Act
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Water Pollution Control Act of 1972.
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Common carrier pipeline
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A pipeline engaged in the transportation of crude oil, refined products or natural gas liquids as a common carrier for hire.
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Crude oil
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A mixture of raw hydrocarbons that exists in liquid phase in underground reservoirs.
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Delaware Act
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Delaware Revised Uniform Limited Partnership Act.
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Diamondback
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Diamondback diluent pipeline system and related assets.
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Diamondback OpCo
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BP D-B Pipeline Company LLC, which owns Diamondback.
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Diluent
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A light hydrocarbon mixture which, when blended with heavy crude petroleum, reduces the viscosity of crude to make it more efficient to transport by pipeline.
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DOI
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Department of Interior.
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DOT
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Department of Transportation.
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DRA
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Drag reducing agent.
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EPA
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Environmental Protection Agency.
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EPAct
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Energy Policy Act of 1992.
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Estimated Total Maintenance Spend
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Estimated Total Maintenance Spend is a defined term under our partnership agreement. It is estimated annually (and whenever an event occurs that is likely to result in a material adjustment) by the board of directors of our general partner. It is intended to represent the average quarterly Maintenance Capital Expenditures (as such term is defined below) and maintenance expenses that the Partnership will need to incur over the long term to maintain the operating capacity or operating income of the Partnership and its subsidiaries (including the Partnership’s proportionate share of the average quarterly Maintenance Capital Expenditures and maintenance expenses of its subsidiaries that are not wholly owned) existing at the time the estimate is made.
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Expansion capital expenditures
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Expansion capital expenditures is a defined term under our partnership agreement. Expansion capital expenditures are cash expenditures (including transaction expenses) for capital improvements. Expansion capital expenditures do not include maintenance capital expenditures or investment capital expenditures. Expansion capital expenditures do include interest payments (including periodic net payments under related interest rate swap agreements) and related fees paid during the construction period on construction debt. Where cash expenditures are made in part for expansion capital expenditures and in part for other purposes, the general partner determines the allocation between the amounts paid for each.
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FASB
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Financial Accounting Standards Board.
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FERC
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Federal Energy Regulatory Commission.
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Fixed loss allowance or FLA
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An allowance for volume losses due to measurement difference set forth in crude oil product transportation agreements, including long-term transportation agreements and tariffs for crude oil shipments.
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GAAP
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United States generally accepted accounting principles.
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Gal
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Gallons.
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GHG
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Greenhouse gas.
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HCA
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High Consequence Area.
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ICA
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Interstate Commerce Act.
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Investment capital expenditures
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Investment capital expenditures means capital expenditures other than Maintenance capital expenditures and Expansion capital expenditures.
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IPO
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Initial Public Offering of BP Midstream Partners LP.
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IPO Contributed Assets
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100% interest in each BP2 OpCo, River Rouge OpCo and Diamondback OpCo, a 28.5% interest in Mars and a 20% managing interest in Mardi Gras.
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IRS
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Internal Revenue Service.
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kboe
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One thousand barrels of oil equivalent.
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kbpd
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Thousand barrels per day.
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LIBOR
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London Interbank Offered Rate.
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LTIP
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BP Midstream Partners LP 2017 Long-Term Incentive Plan.
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Maintenance capital expenditures
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Maintenance capital expenditures is a defined term under our partnership agreement. Maintenance capital expenditures are cash expenditures (including expenditures for (a) the acquisition (through an asset acquisition, merger, stock acquisition, equity acquisition or other form of investment) by the Partnership or any of its subsidiaries of existing assets or assets under construction, (b) the construction or development of new capital assets by the Partnership or any of its subsidiaries, (c) the replacement, improvement or expansion of existing capital assets by the Partnership or any of its subsidiaries or (d) a capital contribution by the Partnership or any of its subsidiaries to a person that is not a subsidiary in which the Partnership or any of its subsidiaries has, or after such capital contribution will have, directly or indirectly, an equity interest, to fund the Partnership or such subsidiary’s share of the cost of the acquisition, construction or development of new, or the replacement, improvement or expansion of existing, capital assets by such person), in each case if and to the extent such acquisition, construction, development, replacement, improvement or expansion is made to maintain, over the long-term, the operating capacity or operating income of the Partnership and its subsidiaries, in the case of clauses (a), (b) and (c), or such person, in the case of clause (d), as the operating capacity or operating income of the Partnership and its subsidiaries or such person, as the case may be, existed immediately prior to such acquisition, construction, development, replacement, improvement, expansion or capital contribution. For purposes of this definition, “long-term” generally refers to a period of not less than twelve months. Maintenance capital expenditures do not include expansion capital expenditures or investment capital expenditures.
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MLP
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Master limited partnership.
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MMscf
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One million standard cubic feet.
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MMscf/d
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One million standard cubic feet per day.
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MVC
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Minimum Volume Commitment.
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NEPA
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National Environmental Policy Act.
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NGA
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Natural Gas Act.
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NYSE
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New York Stock Exchange.
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OCSLA
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Outer Continental Shelf Lands Act.
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OPA-90
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Oil Pollution Act of 1990.
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OSHA
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Occupational Safety and Health Act.
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PHMSA
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Pipeline and Hazardous Materials Safety Administration.
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PPI
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U.S. Producer Price Index.
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Predecessor
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The historical financial results of BP2, River Rouge, and Diamondback.
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RCRA
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Resource Conservation and Recovery Act.
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River Rouge
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Whiting to River Rouge refined products pipeline system and related assets.
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River Rouge OpCo
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BP River Rouge Pipeline Company LLC, which owns River Rouge.
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Refined products
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Hydrocarbon compounds, such as gasoline, diesel fuel, jet fuel and residual fuel, that are produced by a refinery.
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ROFO
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Right of First Offer.
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SEC
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Securities and Exchange Commission.
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Throughput
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The volume of crude oil, refined products, diluent or natural gas transported or passing through a refinery, pipeline, terminal or other facility during a particular period.
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Total Maintenance Spend
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The sum of (a) the maintenance expenses of the IPO Contributed Assets, (b) the maintenance capital expenditures of the IPO Contributed Assets, excluding any reimbursable maintenance capital expenditures, and (c) our allocable portion of the sum of (1) the maintenance expenses of Mars, Ursa, KM Phoenix and each of the Mardi Gras Joint Ventures and (2) the maintenance capital expenditures of Mars, Ursa, KM Phoenix and each of the Mardi Gras Joint Ventures, excluding any reimbursable maintenance capital expenditures.
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Wholly Owned Assets
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100% interest in each of BP2 OpCo, River Rouge OpCo and Diamondback OpCo.
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WTI
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West Texas Intermediate.
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Item
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Page
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•
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Maintain Safe and Reliable Operations
. We are committed to safe, reliable and efficient operations, which are key components in generating stable cash flows. We strive for operational excellence by using BP Pipelines’ existing programs to integrate health, occupational safety, process safety and environmental principles throughout our business with a commitment to continuous improvement. BP Pipelines’ employees have and will continue to operate each of the Wholly
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Generate Stable, Fee-Based Cash Flows Supported by Contracts with Minimum Volume Commitments.
We are focused on generating stable and predictable cash flows by providing fee-based transportation services to BP and third parties with limited direct exposure to commodity price fluctuations. We have multiple fee-based commercial agreements with BP Products that include, for our onshore assets, minimum volume commitments. We believe these agreements should promote stability and predictability in our cash flows. In addition, many of our offshore assets have either commitments for dedicated production from specified fields as well as provide a primary supply source to major distribution and storage facilities, providing further stability to our cash flows.
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Pursue Opportunities to Grow Our Business.
We continually seek to grow our business by completing strategic acquisitions, executing organic expansion projects, and increasing the utilization of our existing assets.
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Growth through Strategic Acquisitions.
We pursue strategic acquisitions of assets from BP and third parties. At our IPO, BP Pipelines granted us a ROFO with respect to its retained ownership interest in Mardi Gras and all of its interests in midstream pipeline systems and assets related thereto in the contiguous United States and offshore Gulf of Mexico that are owned by BP Pipelines. In addition, we believe BP will offer us opportunities to acquire additional midstream assets that it may acquire or develop in the future. We also may have opportunities to pursue the acquisition or development of additional assets jointly with BP.
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Pursue Attractive Organic Growth Opportunities.
We evaluate organic expansion projects that are consistent with our existing business operations and that will provide compelling returns to our unitholders. This strategy will include seeking opportunities to enhance the profitability of our existing assets by increasing throughput volumes, opportunistically attracting new third-party volumes, managing costs and enhancing operating efficiencies.
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Target a Conservative and Flexible Capital Structure.
We target credit metrics consistent with the profile of investment grade midstream energy companies although we do not expect to immediately seek a rating on our debt. Furthermore, we intend to maintain a balanced capital structure while pursuing (i) strategic acquisitions of assets from BP, (ii) potential organic growth opportunities, and (iii) potential third-party acquisitions.
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Our Relationship with BP.
We have a strategic relationship with BP, one of the largest producers of crude oil and natural gas as well as one of the leading petroleum products refiners in the United States. BP is our most significant customer of the Wholly Owned Assets and also a material customer of Mars, Ursa, KM Phoenix and each of the Mardi Gras Joint Ventures. BP is well capitalized with an investment grade credit rating and indirectly owns our general partner, a majority of our limited partner interests and all of our incentive distribution rights. In addition, BP owns a substantial number of additional midstream assets, including an 35% interest in Mardi Gras. We believe that our relationship with BP will provide us with significant growth opportunities as well as a stable base of cash flows.
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Strategically Located and Highly Integrated Assets.
Our assets are primarily located in the Midwestern United States and in the Gulf of Mexico and are strategic to BP’s North American operations.
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Onshore Assets.
Our Midwestern assets play a critical role in maintaining a supply of Canadian heavy crude oil to, and moving refined products and diluent from, the Whiting Refinery. BP’s Whiting Refinery is the largest refinery in the Midwest and is well positioned to access Canadian heavy crude oil. In 2013, BP finished a multi-billion dollar, multi-year modernization project at the Whiting Refinery that was one of the largest downstream initiatives in the history of BP. This project provided the Whiting Refinery with the flexibility to shift from processing primarily higher-cost sweet crude to discounted heavy crude oil, largely from Canada. BP is making further investments to increase the Whiting Refinery’s heavy crude capacity from 325 kbpd towards 350 kbpd by 2020. In order to position the Whiting Refinery to access additional Canadian crude supply, BP made a capital
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Offshore Assets
. Our Gulf of Mexico assets link BP and third-party producers’ offshore crude oil and natural gas production to the Gulf Coast refining and processing markets, and are located in areas of the Gulf of Mexico that are experiencing production growth and are expected to provide additional transportation volumes. The assets will become an increasingly important link to onshore markets following Shell’s sanctioned multi-billion dollar investment in the Appomattox platform and BP’s recent $9 billion investment in the Mad Dog 2 platform (“Mad Dog 2”). Due to the difficulty of obtaining construction permits, the capital intensive nature of offshore midstream assets and the remaining capacity in existing offshore pipelines, we believe offshore assets such as ours are well-positioned to capture new volumes from the Gulf of Mexico.
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Stable and Predictable Cash Flows
. Our assets primarily consist of interests in common carrier pipeline systems that generate stable revenue under FERC-regulated tariffs and long-term fee-based transportation agreements. Substantially all of our aggregate revenue on BP2, River Rouge and Diamondback are supported by long-term commercial agreements with BP Products that include minimum volume commitments. We also believe that our strong position as the outlet for major offshore production with growing production activity as well as our strategic importance to the Whiting Refinery will provide us with sustainable and growing cash flows.
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Financial Flexibility
. We have a revolving credit facility with an affiliate of BP with a capacity of $600.0 million, and as of December 31, 2018 we had $468.0 million of outstanding borrowings, which were drawn to fund the acquisition of assets from affiliates of BP on October 1, 2018. We believe that we will have the financial flexibility to execute our growth strategy through borrowing capacity under our revolving credit facility and access to capital markets.
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Experienced Management Team
. Our management team has substantial experience in the management and operation of pipelines and other midstream assets. Our management team also has expertise in executing optimization strategies in the midstream sector. Our management team consists of members of BP Pipelines’ and BP’s senior management, who average over 30 years of experience in the energy industry.
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100% ownership interest in the Wholly Owned Assets;
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28.5% ownership in Mars; and
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20% managing member interest in Mardi Gras, pursuant to which the Partnership has the right to vote Mardi Gras' ownership interest in each of the Mardi Gras Joint Ventures.
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Additional 45% ownership interest in Mardi Gras;
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25% ownership interest in KM Phoenix; and
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22.7% ownership interest in Ursa.
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Entity/Asset
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Product Type
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Our
Ownership
Interest
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BP Pipelines
Retained
Ownership
Interest
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Pipeline
Length
(Miles)
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Capacity
(kbpd)(1)
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Contract Structure
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BP2
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Crude
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100.0
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%
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—
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12
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475
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MVCs/FERC tariff Long term contract
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(3
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River Rouge
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Refined Products
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100.0
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%
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—
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244
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80
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MVCs/FERC tariff Long term contract
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(3
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Diamondback
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Diluent
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100.0
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%
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—
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42
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135
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MVCs/FERC tariff/
Long term contract
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(3
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Mars
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Crude
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28.5
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%
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—
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163
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400
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(2
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)
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FERC and state
tariffs/Lease
dedication; Portion
with guaranteed return
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Mardi Gras(4):
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65.0
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%
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(5
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35.0
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%
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Caesar
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Crude
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36.4
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%
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19.6
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%
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115
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450
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Lease dedication
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Cleopatra
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Natural Gas
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34.5
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%
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18.5
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%
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115
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500
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Lease dedication
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Proteus
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Crude
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42.3
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%
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22.7
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%
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70
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425
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Lease dedication
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Endymion
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Crude
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42.3
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%
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22.7
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%
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90
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425
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Lease dedication
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Ursa
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Crude
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22.7
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%
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—
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47
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150
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Joint tariff
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KM Phoenix
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Storage
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25.0
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%
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—
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Commercial agreements
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(1)
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The approximate capacity information presented is in kbpd with the exception of the approximate capacity related to Cleopatra gas gathering system, which are presented in MMscf/d. Pipeline capacities are based on current operations and vary depending on the specific products being transported and delivery point, among other factors.
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(2)
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Represents Mars capacity of the approximately 54 mile segment from the connections to Ursa, Medusa and Olympus pipelines at the West Delta 143 platform complex to Fourchon, Louisiana where Mars has a connection with Amberjack pipeline for ultimate delivery to Clovelly, Louisiana. The capacity of the Mars pipeline system ranges from 100 kbpd to 600 kbpd depending on the pipeline segment and the type of crude oil transported.
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(3)
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BP has historically been the sole shipper on BP2 and River Rouge. Substantially all of our revenue on BP2, Diamondback and River Rouge is supported by commercial agreements with BP Products.
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(4)
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Our ownership interest and BP Pipelines’ and its affiliates’ retained ownership interest in each of Caesar, Cleopatra, Proteus and Endymion represents 65% and 35%, respectively, of the 56%, 53%, 65% and 65% ownership interests in such Mardi Gras Joint Ventures, respectively, held by Mardi Gras.
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(5)
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Our 65% interest in Mardi Gras includes a managing member interest that provides us with the right to vote Mardi Gras’ retained ownership interest in the Mardi Gras Joint Ventures.
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Pipeline
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Period
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Minimum
Throughput Commitment (kbpd)
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Transportation
Fee Rate
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BP2
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Q4 2017 - 2018
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303
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Posted Tariff
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BP2
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2019
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310
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Posted Tariff
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BP2
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2020
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320
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Posted Tariff
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River Rouge
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Q4 2017 - 2020
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60
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Posted Tariff
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Diamondback
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Q3 2017 - Q2 2020
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23
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Posted Tariff
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Diamondback
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Q4 2017 - 2020
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20
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Posted Tariff
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•
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the overall cost of service, including operating costs and overhead;
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•
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the allocation of overhead and other administrative and general expenses to the regulated entity;
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•
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the appropriate capital structure to be utilized in calculating rates;
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•
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the appropriate rate of return on equity and interest rates on debt;
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•
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the rate base, including the proper starting rate base;
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•
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the throughput underlying the rate; and
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•
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the proper allowance for federal and state income taxes.
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•
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the amount of our operating expenses and general and administrative expenses, including reimbursements to BP Pipelines and its affiliates with respect to those expenses;
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•
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the amount and timing of capital expenditures and acquisitions we make;
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•
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our debt service requirements and other liabilities, and restrictions contained in our debt agreements;
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•
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fluctuations in our working capital needs;
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•
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decisions made by BP with respect to the levels of production at its refineries that we serve and its obligations under our commercial agreements;
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•
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our entitlements to payments associated with the minimum volume commitments under our commercial agreements with BP Products;
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•
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the amount of cash distributed to us by the entities in which we own a non-controlling interest; and
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•
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the amount of cash reserves established by our general partner.
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•
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We do not control or operate Mars, Ursa, KM Phoenix or the Mardi Gras Joint Ventures and as a result, we only have limited ability to influence the business decisions of such joint venture entities.
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•
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We do not directly control the amount of cash distributed by Mars, Ursa, KM Phoenix or any of the Mardi Gras Joint Ventures. We only influence the amount of cash distributed through our voting rights over the cash reserves made by such joint venture entities.
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•
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We do not have the ability to unilaterally require Mars, Ursa, KM Phoenix or any of the Mardi Gras Joint Ventures to make capital expenditures.
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•
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Our joint ventures may require us to make additional capital contributions to fund operating and maintenance expenses and maintenance capital expenditures, as well as to fund expansion capital expenditures, which would reduce the amount of cash otherwise available for distribution by us or require us to incur additional indebtedness.
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•
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identify attractive acquisition candidates;
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•
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negotiate acceptable purchase agreements;
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•
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obtain financing for these acquisitions on economically acceptable terms; and
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•
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outbid any competing bidders.
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•
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BP Pipelines may choose not to sell the Subject Assets;
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•
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we may not make acceptable offers for the Subject Assets;
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•
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we and BP Pipelines may be unable to agree to terms acceptable to both parties;
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•
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we may be unable to obtain financing to purchase the Subject Assets on acceptable terms or at all; or
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•
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we may be prohibited by the terms of our debt agreements (including our credit facility) or other contracts from purchasing some or all of the Subject Assets, and BP Pipelines may be prohibited by the terms of its debt agreements or other contracts from selling some or all of the Subject Assets. If we or BP Pipelines must seek waivers of such provisions or refinance debt governed by such provisions in order to consummate a sale of the Subject Assets, we or BP Pipelines may be unable to do so in a timely manner or at all.
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•
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damages to pipelines, facilities, offshore pipeline equipment and surrounding properties caused by third parties, severe weather, natural disasters, including hurricanes, and acts of terrorism;
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•
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mechanical or structural failures at our or BP Pipelines’ facilities or at third-party facilities on which our customers’ or our operations are dependent, including electrical shortages, power disruptions and power grid failures;
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•
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damages to, loss of availability of and delays in gaining access to interconnecting third-party pipelines, terminals and other means of delivering crude oil, natural gas, refined products and diluent;
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•
|
disruption or failure of information technology systems and network infrastructure due to various causes, including unauthorized access or attack;
|
•
|
leaks of crude oil, natural gas, refined products or diluent as a result of the malfunction of equipment or facilities;
|
•
|
unexpected business interruptions;
|
•
|
curtailments of operations due to severe seasonal weather; and
|
•
|
riots, strikes, lockouts or other industrial disturbances.
|
•
|
increased fuel efficiency standards for vehicles;
|
•
|
more stringent refined products specifications;
|
•
|
new or changing renewable fuels standards;
|
•
|
availability of alternative energy sources;
|
•
|
potential and enacted climate change legislation; and
|
•
|
increased refining capacity or decreased refining capacity utilization.
|
•
|
the volatility of natural gas, NGL and oil prices, which could have a negative effect on the value of BP’s oil and natural gas properties, its drilling programs or its ability to finance its operations;
|
•
|
the availability of capital on an economic basis to fund BP’s exploration and development activities;
|
•
|
BP’s ability to replace reserves, sustain production and begin production on certain leases that may otherwise expire;
|
•
|
uncertainties inherent in estimating quantities of natural gas and oil reserves and projecting future rates of production;
|
•
|
transportation capacity constraints and interruptions;
|
•
|
losses from pending or future litigation.
|
•
|
geographic proximity to the production and/or refineries;
|
•
|
costs of connection;
|
•
|
available capacity;
|
•
|
rates;
|
•
|
logistical efficiency in all of our operations;
|
•
|
customer relationships; and
|
•
|
access to markets.
|
•
|
perform ongoing assessments of pipeline integrity;
|
•
|
identify and characterize applicable threats to pipeline segments that could affect an HCA;
|
•
|
improve data collection, integration and analysis;
|
•
|
repair and remediate the pipeline as necessary; and
|
•
|
implement preventive and mitigating actions.
|
•
|
incur or guarantee additional debt;
|
•
|
redeem or repurchase units or make distributions under certain circumstances; and
|
•
|
incur certain liens or permit them to exist.
|
•
|
our ability to obtain additional financing, if necessary, for working capital, capital expenditures (including building additional gathering pipelines needed for required connections and building additional centralized gathering facilities pursuant to our gathering agreements) or other purposes may be impaired or such financing may not be available on favorable terms;
|
•
|
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 interest payments on our debt;
|
•
|
we may be more vulnerable to competitive pressures or a downturn in our business or the economy generally; and
|
•
|
our flexibility in responding to changing business and economic conditions may be limited.
|
•
|
our general partner is allowed to take into account the interests of parties other than us, such as BP Holdco and BP Pipelines, in exercising certain rights under our partnership agreement;
|
•
|
neither our partnership agreement nor any other agreement requires BP Holdco or its affiliates (including BP Pipelines) to pursue a business strategy that favors us;
|
•
|
our partnership agreement replaces the fiduciary duties that would otherwise be owed by our general partner with contractual standards governing its duties and limits our general partner’s liabilities, which restricts the remedies available to our unitholders for actions that, without such limitations, might constitute breaches of fiduciary duty;
|
•
|
except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval;
|
•
|
disputes may arise under agreements pursuant to which BP Pipelines and its affiliates are our customers;
|
•
|
our general partner determines the amount and timing of asset purchases and sales, borrowings, issuances of additional partnership securities and the level of cash reserves, each of which can affect the amount of cash that is distributed to our unitholders;
|
•
|
our general partner determines the amount and timing of any cash expenditure and whether an expenditure is classified as a maintenance capital expenditure, which reduces operating surplus, or an expansion capital expenditure, which does not reduce operating surplus. This determination can affect the amount of cash from operating surplus that is distributed to our unitholders which, in turn, may affect the ability of the subordinated units to convert;
|
•
|
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;
|
•
|
our partnership agreement permits us to distribute up to $110.0 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus. This cash may be used to fund distributions on our subordinated units or the incentive distribution rights;
|
•
|
our general partner determines which costs incurred by it and its affiliates are reimbursable by us;
|
•
|
our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with its affiliates on our behalf;
|
•
|
our general partner intends to limit its liability regarding our contractual and other obligations;
|
•
|
our general partner may exercise its right to call and purchase common units if it and its affiliates own more than 80% of the common units;
|
•
|
our general partner controls the enforcement of obligations that it and its affiliates owe to us;
|
•
|
our general partner decides whether to retain separate counsel, accountants or others to perform services for us; and
|
•
|
our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to our general partner’s incentive distribution rights without the approval of the conflicts committee of the board of directors of our general partner or the unitholders. This election may result in lower distributions to the common unitholders in certain situations.
|
•
|
how to allocate business opportunities among us and its affiliates;
|
•
|
whether to exercise its limited call right;
|
•
|
whether to seek approval of the resolution of a conflict of interest by the conflicts committee of the board of directors of our general partner;
|
•
|
how to exercise its voting rights with respect to the units it owns;
|
•
|
whether to exercise its registration rights;
|
•
|
whether to elect to reset target distribution levels; and
|
•
|
whether or not to consent to any merger or consolidation of the partnership or amendment to the partnership agreement.
|
•
|
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 generally required to make such determination, or take or decline to take such other action, in good faith, meaning that it believed its actions or omission were not opposed to the interests of the partnership, and will not be subject to any higher standard imposed by our partnership agreement, Delaware law, or any other law, rule or regulation, or at equity;
|
•
|
our general partner and its officers and directors will not be liable for monetary damages or otherwise 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 such losses or liabilities were the result of conduct in which our general partner or its officers or directors engaged in bad faith, meaning that they believed that the decision was opposed to the interest of the partnership or, with respect to any criminal conduct, with knowledge that such conduct was unlawful; and
|
•
|
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:
|
•
|
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
|
•
|
approved by the vote of a majority of the outstanding common units, excluding any common units owned by our general partner and its affiliates.
|
•
|
our existing unitholders’ proportionate ownership interest in us will decrease;
|
•
|
the amount of cash available for distribution on each unit may decrease;
|
•
|
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 will be borne by our common unitholders will increase;
|
•
|
the ratio of taxable income to distributions may increase;
|
•
|
the relative voting strength of each previously outstanding unit may be diminished; and
|
•
|
the market price of the common units may decline.
|
•
|
our quarterly distributions;
|
•
|
our quarterly or annual earnings or those of other companies in our industry;
|
•
|
announcements by us or our competitors of significant contracts or acquisitions;
|
•
|
changes in accounting standards, policies, guidance, interpretations or principles;
|
•
|
general economic conditions;
|
•
|
the failure of securities analysts to cover our common units or changes in financial estimates by analysts;
|
•
|
future sales of our common units; and
|
•
|
the other factors described in these “Risk Factors.”
|
|
|
|
|
Marginal Percentage Interest in Distributions
|
|||
|
Total Quarterly Distribution Per Unit
|
|
Unitholders
|
Incentive Distribution Rights Holders
|
|||
Minimum Quarterly Distribution
|
up to $0.2625
|
|
|
100
|
%
|
—
|
%
|
First Target Distribution
|
above $0.2625
|
up to $0.3019
|
|
100
|
%
|
—
|
%
|
Second Target Distribution
|
above $0.3019
|
up to $0.3281
|
|
85
|
%
|
15
|
%
|
Third Target Distribution
|
above $0.3281
|
up to $0.3938
|
|
75
|
%
|
25
|
%
|
Thereafter
|
above $0.3938
|
|
|
50
|
%
|
50
|
%
|
•
|
for each of the three consecutive, non-overlapping four-quarter periods immediately preceding that date, aggregate distributions from operating surplus equaled or exceeded the sum of the minimum quarterly distribution multiplied by the total number of common and subordinated units outstanding in each quarter in each period;
|
•
|
for the same three consecutive, non-overlapping four-quarter periods, the adjusted operating surplus (as described in our partnership agreement) equaled or exceeded the sum of the minimum quarterly distribution multiplied by the total number of common and subordinated units outstanding during each quarter on a fully diluted weighted average basis; and
|
•
|
there are no arrearages in payment of the minimum quarterly distribution on the common units.
|
•
|
for one four-quarter period immediately preceding that date, aggregate distributions from operating surplus exceeded 150% of the minimum quarterly distribution multiplied by the total number of common units and subordinated units outstanding in each quarter in the period;
|
•
|
for the same four-quarter period, the adjusted operating surplus equaled or exceeded 150% of the sum of the minimum quarterly distribution multiplied by the total number of common and subordinated units outstanding during each quarter on a fully diluted weighted average basis, plus the related distribution on the incentive distribution rights; and
|
•
|
there are no arrearages in payment of the minimum quarterly distributions on the common units.
|
•
|
The selected statements of operations data for the year ended December 31, 2018 consists of the consolidated results of the Partnership. The selected statement of operations data for the year ended December 31, 2017 consists of the consolidated results of the Partnership for the period from October 30, 2017 through December 31, 2017 and of the combined results of our Predecessor for the period from January 1, 2017 through October 29, 2017. The selected statements of operations data for the years ended December 31, 2016 and 2015 consists entirely of the combined results of our Predecessor.
|
•
|
The selected balance sheet data at December 31, 2018 and 2017 consists of the consolidated balances of the Partnership, while the selected balance sheet data at December 31, 2016 and 2015 consist of the combined balances of our Predecessor.
|
•
|
BP2 OpCo, which owns the BP#2 crude oil pipeline system (“BP2”) consisting of approximately 12 miles of pipeline and related assets that transport crude oil from Griffith Station, Indiana, to the Whiting Refinery.
|
•
|
River Rouge OpCo, which owns the Whiting to River Rouge refined products pipeline system (“River Rouge”) consisting of approximately 244 miles of pipeline and related assets that transport refined petroleum products from the Whiting Refinery to the refined products terminal at River Rouge, Michigan.
|
•
|
Diamondback OpCo, which owns the Diamondback diluent pipeline system (“Diamondback”) consisting of approximately 42 miles of pipeline and related assets that transport diluent from Black Oak Junction, Indiana, to a third-party owned pipeline in Manhattan, Illinois. BP2, River Rouge, and Diamondback, together, are referred to as the "Predecessor Assets" or the "Wholly Owned Assets".
|
•
|
A 28.5% ownership interest in Mars, which owns a major corridor crude oil pipeline system in a high-growth area of the Gulf of Mexico, delivering crude oil production received from the Mississippi Canyon area of the Gulf of Mexico to storage and distribution facilities at the Louisiana offshore oil port, which has access to multiple downstream markets. The Mars pipeline system is approximately 163 miles in length.
|
•
|
A 65% managing member interest in Mardi Gras, which holds the following investments in joint ventures:
|
•
|
A 56% ownership interest in Caesar, which owns approximately 115 miles of pipeline connecting platforms in the Southern Green Canyon area of the Gulf of Mexico with the two connecting carrier pipelines.
|
•
|
A 53% ownership interest in Cleopatra, which owns an approximately 115 mile gas gathering pipeline system and provides gathering and transportation for multiple gas producers in the Southern Green Canyon area of the Gulf of Mexico to the Manta Ray pipeline.
|
•
|
A 65% ownership interest in Proteus, which owns an approximately 70 mile crude oil pipeline system and provides transportation for multiple crude oil producers in the eastern Gulf of Mexico into the Endymion pipeline system described below.
|
•
|
A 65% ownership interest in Endymion which owns an approximately 90 mile crude oil pipeline system that originates downstream of Proteus and provides transportation for multiple oil producers in the eastern Gulf of Mexico.
|
•
|
A 22.7% ownership interest in Ursa, which owns approximately 47 miles of pipeline provides gathering and transportation extending from the URSA Tension Leg Platform at Mississippi Canyon Block 809 to a connection with the Mars Oil Pipeline System at West Delta Block 143.
|
•
|
A 25% ownership interest in KM Phoenix, which owns 13 refined products terminals located across the United States with approximately 8.9 million barrels of storage and associated infrastructure.
|
•
|
100% ownership interest in each of BP Two Pipeline Company LLC ("BP2 OpCo"), BP River Rouge Company LLC ("River Rouge OpCo") and BP D-B Pipeline Company LLC ("Diamondback OpCo");
|
•
|
28.5% ownership interest in Mars Oil Pipeline Company LLC (“Mars”); and
|
•
|
20% managing member interest in Mardi Gras Transportation System Company LLC (“Mardi Gras”), pursuant to which the Partnership has the right to vote Mardi Gras’ ownership interest in each of Caesar Oil Pipeline Company LLC (“Caesar”), Cleopatra Gas Gathering Company LLC (“Cleopatra”), Proteus Oil Pipeline Company LLC (“Proteus”) and Endymion Oil Pipeline Company LLC (“Endymion” and together with Caesar, Cleopatra and Proteus, the “Mardi Gras Joint Ventures”).
|
•
|
4,581,177 common units and 52,375,535 subordinated units, representing an aggregate 54.4% limited partner interest;
|
•
|
all of the non-economic general partner interest and our incentive distribution rights; and
|
•
|
a cash distribution of
$814.7 million
, of which
$814.4 million
was paid as of December 31, 2017 and the remainder was paid as of December 31, 2018.
|
•
|
(i) an additional
45.0%
interest in Mardi Gras, from BP Pipelines,
|
•
|
(ii) a
25.0%
interest in KM Phoenix Holdings LLC, a Delaware limited liability company, from BP Products, and
|
•
|
(iii) a
22.7%
interest in URSA Oil Pipeline Company LLC, a Delaware limited liability company, from BP Offshore.
|
•
|
utilize any remaining unused capacity on, or add additional capacity to, our pipeline systems;
|
•
|
increase throughput volumes on our pipeline systems by making connections to existing or new third-party pipelines or other facilities, primarily driven by the anticipated supply of and demand for crude oil, natural gas, refined products and diluent;
|
•
|
identify and execute organic expansion projects; and
|
•
|
increase throughput volumes via acquisitions.
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands of dollars)
|
||||||||||
Wholly Owned Assets
|
|
|
|
|
|
||||||
Maintenance expenses
|
$
|
2,737
|
|
|
$
|
4,898
|
|
|
$
|
2,918
|
|
Maintenance capital expenditures
|
1,604
|
|
|
2,257
|
|
|
3,402
|
|
|||
Total Wholly Owned Assets
|
$
|
4,341
|
|
|
$
|
7,155
|
|
|
$
|
6,320
|
|
Pipeline Joint Ventures
(1)
|
|
|
|
|
|
||||||
Maintenance expenses
|
$
|
2,317
|
|
|
333
|
|
|
*
|
|
||
Maintenance capital expenditures, net
(2)
|
263
|
|
|
48
|
|
|
*
|
|
|||
Total Pipeline Joint Ventures
|
$
|
2,580
|
|
|
381
|
|
|
*
|
|
||
Total Maintenance Spend
|
$
|
6,921
|
|
|
$
|
7,536
|
|
|
$
|
6,320
|
|
|
|
|
|
|
|
||||||
* Information is not applicable for the periods prior to the IPO.
|
|
|
|
|
|||||||
(1) Reflects the allocable portion of the maintenance expenses, maintenance capital expenditures and Total Maintenance Spend, as applicable to our ownership interest in Mars, Ursa and Mardi Gras. The maintenance expenses, maintenance capital expenditures and Total Maintenance Spend for Mars and Mardi Gras is shown for the post-IPO period from 2017 and for the full year of 2018; amounts for Ursa are for October 1, 2018 through December 31, 2018.
|
|||||||||||
(2) Excludes the Appomattox capital project on Proteus that is fully reimbursable to the joint venture.
|
•
|
our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or financing methods;
|
•
|
the ability of our business to generate sufficient cash to support our decision to make distributions to our unitholders;
|
•
|
our ability to incur and service debt and fund capital expenditures; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment
opportunities.
|
•
|
(i) an additional
45.0%
interest in Mardi Gras, from BP Pipelines,
|
•
|
(ii) a
25.0%
interest in KM Phoenix Holdings LLC, a Delaware limited liability company, from BP Products, and
|
•
|
(iii) a
22.7%
interest in URSA Oil Pipeline Company LLC, a Delaware limited liability company, from BP Offshore.
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands of dollars)
|
||||||||||
Reconciliation of Adjusted EBITDA and Cash Available for Distribution to Net Income
|
|
|
|
|
|
||||||
Net income
|
$
|
165,676
|
|
|
$
|
68,976
|
|
|
$
|
45,870
|
|
Add:
|
|
|
|
|
|
||||||
Depreciation
|
2,658
|
|
|
2,673
|
|
|
2,604
|
|
|||
Gain from disposition of property, plant and equipment
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
Income tax expense
|
—
|
|
|
25,318
|
|
|
29,465
|
|
|||
Interest expense, net
|
4,043
|
|
|
107
|
|
|
—
|
|
|||
Cash distributions received from equity method investments — Mardi Gras Joint Ventures
|
67,591
|
|
|
17,365
|
|
|
—
|
|
|||
Cash distributions received from equity method investments — Mars
|
47,538
|
|
|
12,540
|
|
|
—
|
|
|||
Cash distributions received from equity method investments — Others
|
2,675
|
|
|
—
|
|
|
—
|
|
|||
Less:
|
|
|
|
|
|
||||||
Income from equity method investments — Mardi Gras Joint Ventures
|
47,935
|
|
|
10,123
|
|
|
—
|
|
|||
Income from equity method investments — Mars
|
43,867
|
|
|
7,793
|
|
|
—
|
|
|||
Income from equity method investments — Others
|
2,559
|
|
|
—
|
|
|
—
|
|
|||
Adjusted EBITDA
|
195,820
|
|
|
109,058
|
|
|
$
|
77,939
|
|
||
Less:
|
|
|
|
|
|
||||||
Distributions of prorated fourth quarter joint venture dividends to prior owners
|
—
|
|
|
9,427
|
|
|
|
||||
Adjusted EBITDA attributable to Predecessor prior to the IPO on October 30, 2017
|
—
|
|
|
66,628
|
|
|
|
||||
Adjusted EBITDA attributable to non-controlling interests
|
46,412
|
|
|
9,513
|
|
|
|
||||
Adjusted EBITDA attributable to the Partnership
|
149,408
|
|
|
23,490
|
|
|
|
||||
Add:
|
|
|
|
|
|
||||||
Net adjustments from volume deficiency payments
|
—
|
|
|
(174
|
)
|
|
|
||||
Less:
|
|
|
|
|
|
||||||
Net interest paid/(received)
|
50
|
|
|
(52
|
)
|
|
|
||||
Maintenance capital expenditures
|
1,604
|
|
|
58
|
|
|
|
||||
Cash reserves
(1)
|
3,882
|
|
|
—
|
|
|
|
||||
Cash available for distribution attributable to the Partnership
|
$
|
143,872
|
|
|
$
|
23,310
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands of dollars)
|
||||||||||
Reconciliation of Adjusted EBITDA and Cash Available for Distribution to Net Cash Provided by Operating Activities
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
173,783
|
|
|
$
|
69,241
|
|
|
$
|
49,817
|
|
Add:
|
|
|
|
|
|
||||||
Income tax expense
|
—
|
|
|
25,318
|
|
|
29,465
|
|
|||
Interest expense, net
|
4,043
|
|
|
107
|
|
|
—
|
|
|||
Distribution in excess of earnings from equity method investments
|
19,670
|
|
|
7,242
|
|
|
—
|
|
|||
Less:
|
|
|
|
|
|
||||||
Non-cash adjustments
|
177
|
|
|
661
|
|
|
389
|
|
|||
Changes in accounts receivable - related parties
|
(288
|
)
|
|
(11,050
|
)
|
|
596
|
|
|||
Changes in other assets and liabilities
|
1,787
|
|
|
3,239
|
|
|
358
|
|
|||
Adjusted EBITDA
|
195,820
|
|
|
109,058
|
|
|
$
|
77,939
|
|
||
Less:
|
|
|
|
|
|
||||||
Distributions of prorated fourth quarter joint venture dividends to prior owners
|
—
|
|
|
9,427
|
|
|
|
||||
Adjusted EBITDA attributable to Predecessor prior to the IPO on October 30, 2017
|
—
|
|
|
66,628
|
|
|
|
||||
Adjusted EBITDA attributable to non-controlling interests
|
46,412
|
|
|
9,513
|
|
|
|
||||
Adjusted EBITDA attributable to the Partnership subsequent to the IPO
|
149,408
|
|
|
23,490
|
|
|
|
||||
Add
|
|
|
|
|
|
||||||
Net adjustments from volume deficiency payments
|
—
|
|
|
(174
|
)
|
|
|
||||
Less:
|
|
|
|
|
|
||||||
Net interest paid/(received)
|
50
|
|
|
(52
|
)
|
|
|
||||
Maintenance capital expenditures
|
1,604
|
|
|
58
|
|
|
|
||||
Cash reserves
(1)
|
3,882
|
|
|
—
|
|
|
|
||||
Cash available for distribution attributable to the Partnership
|
$
|
143,872
|
|
|
$
|
23,310
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands of dollars)
|
||||||||||
Cash spent on maintenance capital expenditures
|
$
|
1,604
|
|
|
$
|
2,257
|
|
|
$
|
3,402
|
|
(Decrease)/Increase in accrued capital expenditures
|
145
|
|
|
(1,306
|
)
|
|
585
|
|
|||
Total capital expenditures incurred
|
$
|
1,749
|
|
|
$
|
951
|
|
|
$
|
3,987
|
|
•
|
Update of pipes on Whiting for River rouge; and,
|
•
|
Corrosion work on Whiting to River Rouge
|
•
|
Continuation of leak detection metering upgrades for BP2; and
|
•
|
Replacement and installation of new transformer at Ann Arbor station for River Rouge
|
•
|
Leak detection metering upgrades for BP2;
|
•
|
Relief valve redesign implementation at South Bend station for River Rouge; and
|
•
|
Continuation of installation of DRA at five stations for River Rouge
|
(in thousands of dollars)
|
Total
|
|
Less than 1 year
|
|
Years 2 to 3
|
|
Years 4 to 5
|
|
More than 5 years
|
||||||||||
Operating leases and ROWs
|
$
|
3,094
|
|
|
$
|
119
|
|
|
$
|
203
|
|
|
$
|
174
|
|
|
$
|
2,598
|
|
Service contract
|
123
|
|
|
106
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
3,217
|
|
|
$
|
225
|
|
|
$
|
220
|
|
|
$
|
174
|
|
|
$
|
2,598
|
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(in thousands of dollars)
|
||||||
ASSETS
|
||||||||
Current assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
56,970
|
|
|
$
|
32,694
|
|
Accounts receivable – third parties
|
|
325
|
|
|
188
|
|
||
Accounts receivable – related parties
|
|
9,769
|
|
|
9,481
|
|
||
Prepaid expenses
|
|
4,667
|
|
|
1,370
|
|
||
Other current assets
|
|
629
|
|
|
1,655
|
|
||
Total current assets
|
|
72,360
|
|
|
45,388
|
|
||
Equity method investments (Note 5)
|
|
549,039
|
|
|
487,999
|
|
||
Property, plant and equipment, net (Note 6)
|
|
68,580
|
|
|
69,488
|
|
||
Other assets
|
|
3,224
|
|
|
2,783
|
|
||
Total assets
|
|
$
|
693,203
|
|
|
$
|
605,658
|
|
|
|
|
|
|
||||
LIABILITIES
|
||||||||
Current liabilities
|
|
|
|
|
|
|
||
Short-term debt (Note 8)
|
|
$
|
—
|
|
|
$
|
15,000
|
|
Accounts payable – third parties
|
|
607
|
|
|
269
|
|
||
Accounts payable – related parties
|
|
2,553
|
|
|
2,270
|
|
||
Deferred revenues and credits
|
|
1,067
|
|
|
—
|
|
||
Accrued liabilities (Note 7)
|
|
6,900
|
|
|
4,481
|
|
||
Total current liabilities
|
|
11,127
|
|
|
22,020
|
|
||
Long-term debt (Note 8)
|
|
468,000
|
|
|
—
|
|
||
Long-term portion of environmental remediation obligations
|
|
3,224
|
|
|
2,783
|
|
||
Total liabilities
|
|
482,351
|
|
|
24,803
|
|
||
|
|
|
|
|
||||
Commitments and contingencies (Note 13)
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
EQUITY
|
||||||||
Common unitholders – public (2018—47,802,826 units issued and outstanding; 2017—47,794,358 units issued and outstanding)
|
|
836,789
|
|
|
824,613
|
|
||
Common unitholders – BP Holdco (2018 and 2017—4,581,177 units issued and outstanding)
|
|
(61,684
|
)
|
|
(47,141
|
)
|
||
Subordinated unitholders – BP Holdco (2018 and 2017—52,375,535 units issued and outstanding)
|
|
(705,227
|
)
|
|
(538,947
|
)
|
||
Total partners' capital
|
|
69,878
|
|
|
238,525
|
|
||
Non-controlling interests
|
|
140,974
|
|
|
342,330
|
|
||
Total equity
|
|
210,852
|
|
|
580,855
|
|
||
Total liabilities and equity
|
|
$
|
693,203
|
|
|
$
|
605,658
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
(in thousands of dollars, unless otherwise indicated)
|
||||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||
Third parties
|
|
$
|
2,836
|
|
|
$
|
2,204
|
|
|
$
|
4,845
|
|
Related parties
|
|
113,603
|
|
|
105,947
|
|
|
98,158
|
|
|||
Total revenue
|
|
116,439
|
|
|
108,151
|
|
|
103,003
|
|
|||
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|||
Operating expenses – third parties
|
|
11,543
|
|
|
9,094
|
|
|
8,111
|
|
|||
Operating expenses – related parties
|
|
5,006
|
|
|
7,073
|
|
|
6,030
|
|
|||
Maintenance expenses – third parties
|
|
2,640
|
|
|
4,437
|
|
|
2,463
|
|
|||
Maintenance expenses – related parties
|
|
97
|
|
|
461
|
|
|
455
|
|
|||
Gain from disposition of property, plant and equipment
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
General and administrative – third parties
|
|
4,582
|
|
|
895
|
|
|
169
|
|
|||
General and administrative – related parties
|
|
14,072
|
|
|
6,670
|
|
|
7,990
|
|
|||
Depreciation
|
|
2,658
|
|
|
2,673
|
|
|
2,604
|
|
|||
Property and other taxes
|
|
483
|
|
|
393
|
|
|
366
|
|
|||
Total costs and expenses
|
|
41,081
|
|
|
31,691
|
|
|
28,188
|
|
|||
Operating income
|
|
75,358
|
|
|
76,460
|
|
|
74,815
|
|
|||
Income from equity method investments
|
|
94,361
|
|
|
17,916
|
|
|
—
|
|
|||
Other income
|
|
—
|
|
|
25
|
|
|
520
|
|
|||
Interest expense, net
|
|
4,043
|
|
|
107
|
|
|
—
|
|
|||
Income before income taxes
|
|
165,676
|
|
|
94,294
|
|
|
75,335
|
|
|||
Income tax expense
|
|
—
|
|
|
25,318
|
|
|
29,465
|
|
|||
Net income
|
|
165,676
|
|
|
68,976
|
|
|
$
|
45,870
|
|
||
Less: Predecessor net income prior to the IPO on October 30, 2017
|
|
—
|
|
|
39,102
|
|
|
|
||||
Net income subsequent to the IPO
|
|
165,676
|
|
|
29,874
|
|
|
|
||||
Less: Net income attributable to non-controlling interests
|
|
32,619
|
|
|
8,099
|
|
|
|
||||
Net income attributable to the Partnership subsequent to the IPO
|
|
$
|
133,057
|
|
|
$
|
21,775
|
|
|
|
||
|
|
|
|
|
|
|
||||||
Net income attributable to the Partnership per limited partner unit
–
basic and diluted (in dollars):
|
|
|
|
|
|
|
|
|||||
Common units
|
|
$
|
1.27
|
|
|
$
|
0.21
|
|
|
|
||
Subordinated units
|
|
$
|
1.27
|
|
|
$
|
0.21
|
|
|
|
||
|
|
|
|
|
|
|
||||||
Distributions per limited partner unit (in dollars, Note 10):
|
|
|
|
|
|
|
||||||
Common units
|
|
$
|
1.1330
|
|
|
$
|
0.1798
|
|
|
|
||
Subordinated units
|
|
$
|
1.1330
|
|
|
$
|
0.1798
|
|
|
|
||
|
|
|
|
|
|
|
||||||
Weighted Average Number of Limited Partner Units Outstanding - Basic and Diluted (in millions):
|
|
|
|
|
|
|
|
|||||
Common units – public
|
|
47.8
|
|
|
47.8
|
|
|
|
||||
Common units – BP Holdco
|
|
4.6
|
|
|
4.6
|
|
|
|
||||
Subordinated units – BP Holdco
|
|
52.4
|
|
|
52.4
|
|
|
|
|
|
Partnership
|
|
|
|
|
|
|
||||||||||||||||||||
(in thousands of dollars)
|
Common Unitholders
–
Public
|
|
Common Unitholders
–
BP Holdco
|
|
Subordinated Unitholders
–
BP Holdco
|
|
General Partner
|
|
Non-controlling Interests
|
|
Net Parent Investment
|
|
Total
|
|||||||||||||||
Balance at December 31, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
74,258
|
|
|
$
|
74,258
|
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,870
|
|
|
45,870
|
|
|||||||
|
Net transfers to Parent
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,186
|
)
|
|
(46,186
|
)
|
|||||||
Balance at December 31, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
73,942
|
|
|
$
|
73,942
|
|
|
|
Net income from January 1, 2017 through October 29, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,102
|
|
|
39,102
|
|
|||||||
|
Net transfers to Parent
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,616
|
)
|
|
(37,616
|
)
|
|||||||
|
Balance at October 29, 2017 (prior to the IPO)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,428
|
|
|
$
|
75,428
|
|
|
Allocation of net parent investment to unitholders
|
—
|
|
|
6,067
|
|
|
69,361
|
|
|
—
|
|
|
—
|
|
|
(75,428
|
)
|
|
—
|
|
|||||||
|
Working capital and other balances retained by Parent upon the IPO
|
—
|
|
|
(795
|
)
|
|
(9,084
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,879
|
)
|
|||||||
|
Environmental remediation obligations indemnification assets contributed by Parent upon IPO
|
—
|
|
|
351
|
|
|
4,014
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,365
|
|
|||||||
|
Contribution of equity method investments upon the IPO
|
—
|
|
|
12,567
|
|
|
143,677
|
|
|
—
|
|
|
343,744
|
|
|
—
|
|
|
499,988
|
|
|||||||
|
Net proceeds from the IPO, net of underwriters' discount and offering costs
|
814,658
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
814,658
|
|
|||||||
|
Distribution of IPO proceeds to Parent
|
—
|
|
|
(65,525
|
)
|
|
(749,133
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(814,658
|
)
|
|||||||
|
Net income from October 30, 2017 through December 31, 2017
|
9,936
|
|
|
952
|
|
|
10,887
|
|
|
—
|
|
|
8,099
|
|
|
—
|
|
|
29,874
|
|
|||||||
|
Unit-based compensation
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|||||||
|
Distributions of prorated fourth quarter joint venture dividends to prior owners
|
—
|
|
|
(758
|
)
|
|
(8,669
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,427
|
)
|
|||||||
|
Distributions to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,513
|
)
|
|
—
|
|
|
(9,513
|
)
|
|||||||
Balance at December 31, 2017
|
$
|
824,613
|
|
|
$
|
(47,141
|
)
|
|
$
|
(538,947
|
)
|
|
$
|
—
|
|
|
$
|
342,330
|
|
|
$
|
—
|
|
|
$
|
580,855
|
|
|
|
Cumulative effect of accounting change in equity method investments (Note 5)
|
(1,253
|
)
|
|
(120
|
)
|
|
(1,373
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,746
|
)
|
|||||||
|
Net income
|
60,711
|
|
|
5,819
|
|
|
66,527
|
|
|
—
|
|
|
32,619
|
|
|
—
|
|
|
165,676
|
|
|||||||
|
Distribution to unitholders
|
(48,333
|
)
|
|
(4,632
|
)
|
|
(52,963
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(105,928
|
)
|
|||||||
|
Acquisitions from Parent
|
874
|
|
|
(15,610
|
)
|
|
(178,471
|
)
|
|
—
|
|
|
(187,563
|
)
|
|
—
|
|
|
(380,770
|
)
|
|||||||
|
Unit-based compensation
|
177
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
177
|
|
|||||||
|
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,412
|
)
|
|
—
|
|
|
(46,412
|
)
|
|||||||
Balance at December 31, 2018
|
$
|
836,789
|
|
|
$
|
(61,684
|
)
|
|
$
|
(705,227
|
)
|
|
$
|
—
|
|
|
$
|
140,974
|
|
|
$
|
—
|
|
|
$
|
210,852
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities
|
(in thousands of dollars)
|
||||||||||
Net income
|
$
|
165,676
|
|
|
$
|
68,976
|
|
|
$
|
45,870
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
||||
Depreciation
|
2,658
|
|
|
2,673
|
|
|
2,604
|
|
|||
Deferred income taxes
|
—
|
|
|
453
|
|
|
680
|
|
|||
Share-based compensation
|
177
|
|
|
233
|
|
|
229
|
|
|||
(Gain)/Loss due to changes in fair value of allowance oil receivable
|
—
|
|
|
(25
|
)
|
|
(520
|
)
|
|||
Gain from disposition of property, plant and equipment
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
Income from equity method investments
|
(94,361
|
)
|
|
(17,916
|
)
|
|
—
|
|
|||
Distributions of earnings received from equity method investments
|
98,134
|
|
|
22,663
|
|
|
—
|
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
||||
Accounts receivable – third parties
|
(137
|
)
|
|
35
|
|
|
400
|
|
|||
Accounts receivable – related parties
|
(288
|
)
|
|
(11,050
|
)
|
|
596
|
|
|||
Allowance oil receivable
|
—
|
|
|
(1,570
|
)
|
|
(632
|
)
|
|||
Prepaid expenses and other current assets
|
(3,297
|
)
|
|
(1,406
|
)
|
|
—
|
|
|||
Accounts payable – third parties
|
338
|
|
|
649
|
|
|
91
|
|
|||
Accounts payable – related parties
|
516
|
|
|
2,223
|
|
|
(34
|
)
|
|||
Deferred revenues and credits
|
1,067
|
|
|
—
|
|
|
—
|
|
|||
Accrued liabilities
|
3,300
|
|
|
3,112
|
|
|
(134
|
)
|
|||
Long-term portion of environmental remediation obligations
|
—
|
|
|
358
|
|
|
505
|
|
|||
Other liabilities
|
—
|
|
|
(162
|
)
|
|
162
|
|
|||
Net cash provided by operating activities
|
173,783
|
|
|
69,241
|
|
|
49,817
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
(1,604
|
)
|
|
(2,257
|
)
|
|
(3,402
|
)
|
|||
Acquisitions from Parent
|
(87,230
|
)
|
|
—
|
|
|
—
|
|
|||
Distribution in excess of earnings from equity method investments
|
19,670
|
|
|
7,242
|
|
|
—
|
|
|||
Proceeds from disposition of property, plant and equipment
|
—
|
|
|
5
|
|
|
—
|
|
|||
Net cash (used in) provided by investing activities
|
(69,164
|
)
|
|
4,990
|
|
|
(3,402
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Net transfers to Parent – prior to the IPO
|
—
|
|
|
(37,830
|
)
|
|
(46,415
|
)
|
|||
Proceeds from issuance of debt
|
468,000
|
|
|
15,000
|
|
|
—
|
|
|||
Repayment of debt
|
(15,000
|
)
|
|
—
|
|
|
—
|
|
|||
Net proceeds from issuance of common units to public
|
—
|
|
|
814,658
|
|
|
—
|
|
|||
Distribution of IPO proceeds to our Parent
|
(233
|
)
|
|
(814,425
|
)
|
|
—
|
|
|||
Distributions of prorated fourth quarter joint venture dividends to prior owners
|
—
|
|
|
(9,427
|
)
|
|
—
|
|
|||
Acquisitions from Parent
|
(380,770
|
)
|
|
—
|
|
|
—
|
|
|||
Distributions to unitholders
|
(105,928
|
)
|
|
—
|
|
|
—
|
|
|||
Distributions to non-controlling interests
|
(46,412
|
)
|
|
(9,513
|
)
|
|
—
|
|
|||
Net cash (used in) financing activities
|
(80,343
|
)
|
|
(41,537
|
)
|
|
(46,415
|
)
|
|||
Net change in cash and cash equivalents
|
24,276
|
|
|
32,694
|
|
|
—
|
|
|||
Cash and cash equivalents at beginning of the year
|
32,694
|
|
|
—
|
|
|
—
|
|
|||
Cash and cash equivalents at end of the year
|
$
|
56,970
|
|
|
$
|
32,694
|
|
|
$
|
—
|
|
Supplemental cash flow information
|
|
|
|
|
|
|
|
||||
Cash paid for interest
|
$
|
735
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash investing and financing transactions:
|
|
|
|
|
|
|
|
||||
Accrued capital expenditures
|
164
|
|
|
19
|
|
|
1,351
|
|
|||
Contribution of equity method investments upon the IPO
|
—
|
|
|
499,988
|
|
|
—
|
|
|||
Working capital and other balances retained by Parent upon the IPO
|
—
|
|
|
(9,879
|
)
|
|
—
|
|
|||
Environmental remediation obligations indemnification assets contributed by Parent upon IPO
|
—
|
|
|
4,365
|
|
|
—
|
|
•
|
BP Two Pipeline Company, LLC, which owns the BP#2 crude oil pipeline system (“BP2”).
|
•
|
BP River Rouge Pipeline Company, LLC, which owns the Whiting to River Rouge refined products pipeline system (“River Rouge”).
|
•
|
BP D-B Pipeline Company, LLC, which owns the Diamondback diluent pipeline system (“Diamondback”). BP2, River Rouge, and Diamondback, together, are referred to as the "Wholly Owned Assets".
|
•
|
A
28.5%
ownership interest in Mars Oil Pipeline Company, LLC (“Mars”), which owns a major corridor crude oil pipeline system in the Gulf of Mexico.
|
•
|
A
65%
managing member interest in Mardi Gras Transportation System Company, LLC (“Mardi Gras”), which holds the following investments in joint ventures located in the Gulf of Mexico:
|
•
|
A
56%
ownership interest in Caesar Oil Pipeline Company, LLC (“Caesar”),
|
•
|
A
53%
ownership interest in Cleopatra Gas Gathering Company, LLC (“Cleopatra”),
|
•
|
A
65%
ownership interest in Proteus Oil Pipeline Company, LLC (“Proteus”), and,
|
•
|
A
65%
ownership interest in Endymion Oil Pipeline Company, LLC (“Endymion”).
|
•
|
Together Endymion, Caesar, Cleopatra and Proteus, are referred to as the “Mardi Gras Joint Ventures.”
|
•
|
A
22.7%
ownership interest in Ursa Oil Pipeline Company, LLC ("Ursa").
|
•
|
A
25%
ownership interest in KM Phoenix Holdings, LLC ("KM Phoenix").
|
•
|
Our consolidated statements of operations and cash flows for the year ended December 31, 2018 consist of the consolidated results of the Partnership. Our consolidated statements of operations and cash flows for the year ended December 31, 2017 consist of the consolidated results of the Partnership for the period from October 30, 2017 through December 31, 2017, and the combined results of the Predecessor for the period from January 1, 2017 through October 29, 2017. Our consolidated statements of operations and cash flows for the years ended December 31, 2016 consists entirely of the combined results of the Predecessor.
|
•
|
Our consolidated balance sheet at December 31, 2018 and 2017 consists of the consolidated balances of the Partnership.
|
•
|
Our consolidated statement of changes in equity for the year ended December 31, 2018 consists of the consolidated activities for the Partnership, and 2017 consists of both the combined activities for the Predecessor prior to October 30 2017, and the consolidated activities for the Partnership completed at and after the IPO on October 30, 2017. Our consolidated statements of changes in equity for the years ended December 31, 2016 consists entirely of the combined activities of the Predecessor.
|
|
Depreciable
Lives (Years) |
|
Land
|
—
|
|
ROW assets
|
—
|
|
Buildings and improvements
|
16 - 40
|
|
Pipelines and equipment
|
17 - 40
|
|
Other
|
4 - 23
|
|
Construction in progress
|
—
|
|
•
|
Level 1 inputs are quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 inputs are inputs that are observable, either directly or indirectly, other than quoted prices included within level 1 for the asset or liability.
|
•
|
Level 3 inputs are unobservable inputs for the asset or liability reflecting significant modifications to observable related market data or our assumptions about pricing by market participants.
|
•
|
100%
ownership interest in the Wholly Owned Assets;
|
•
|
28.5%
ownership interest in Mars; and
|
•
|
20%
managing member interest in Mardi Gras, pursuant to which the Partnership has the right to vote Mardi Gras’ ownership interest in each of the Mardi Gras Joint Ventures.
|
•
|
4,581,177
common units and
52,375,535
subordinated units, representing an aggregate
54.4%
limited partner interest;
|
•
|
all of the non-economic general partner interest and our incentive distribution rights; and
|
•
|
a cash distribution of
$814.7 million
, of which
$814.4 million
was paid as of December 31, 2017 and the remainder was paid as of December 31, 2018.
|
•
|
(i) an additional
45.0%
interest in Mardi Gras, from BP Pipelines,
|
•
|
(ii) a
25.0%
interest in KM Phoenix Holdings LLC, a Delaware limited liability company, from BP Products, and
|
•
|
(iii) a
22.7%
interest in URSA Oil Pipeline Company LLC, a Delaware limited liability company, from BP Offshore.
|
Disaggregation of revenue
|
For the year ended December 31, 2018
|
||
Transportation services revenue - third parties
|
$
|
2,828
|
|
Transportation services revenue - related parties
|
113,603
|
|
|
Total topic 606 revenue
|
116,431
|
|
|
|
|
||
Other revenue
|
8
|
|
|
Total revenue
|
$
|
116,439
|
|
Unfulfilled performance obligations
|
As of December 31, 2018
|
||
2019
|
$
|
107,517
|
|
2020
|
109,590
|
|
|
Total
|
$
|
217,107
|
|
Contract balances
|
As of December 31, 2018
|
||
Receivables from contracts with customers - third parties
|
$
|
325
|
|
Receivables from contracts with customers - related parties
|
9,611
|
|
|
Deferred revenue and credits - related parties
|
1,067
|
|
|
2018
|
|
2017
|
|||||||||||||||||||||||
|
Percentage ownership at year end
|
Cumulative effect of accounting change*
|
Distributions received
|
Income from EMI
|
Carrying value at year end
|
|
Percentage ownership at year end
|
Distributions received
|
Income from EMI
|
Carrying value at year end
|
||||||||||||||||
Mars
|
28.5
|
%
|
$
|
(2,746
|
)
|
$
|
(47,538
|
)
|
$
|
43,866
|
|
$
|
59,143
|
|
|
28.5
|
%
|
$
|
(12,540
|
)
|
$
|
7,793
|
|
$
|
65,561
|
|
Caesar
(1)
|
56.0
|
%
|
—
|
|
(20,957
|
)
|
16,761
|
|
119,390
|
|
|
56.0
|
%
|
(5,880
|
)
|
3,344
|
|
123,586
|
|
|||||||
Cleopatra
(1)
|
53.0
|
%
|
—
|
|
(10,494
|
)
|
6,532
|
|
119,550
|
|
|
53.0
|
%
|
(2,385
|
)
|
1,112
|
|
123,512
|
|
|||||||
Proteus
(1)
|
65.0
|
%
|
—
|
|
(18,135
|
)
|
12,323
|
|
81,332
|
|
|
65.0
|
%
|
(4,030
|
)
|
2,100
|
|
87,144
|
|
|||||||
Endymion
(1)
|
65.0
|
%
|
—
|
|
(18,005
|
)
|
12,320
|
|
82,511
|
|
|
65.0
|
%
|
(5,070
|
)
|
3,567
|
|
88,196
|
|
|||||||
Others
(2)
|
Various
|
|
—
|
|
(2,675
|
)
|
2,559
|
|
87,113
|
|
|
0.0
|
%
|
—
|
|
—
|
|
—
|
|
|||||||
Total Equity Investments
|
|
$
|
(2,746
|
)
|
$
|
(117,804
|
)
|
$
|
94,361
|
|
$
|
549,039
|
|
|
|
$
|
(29,905
|
)
|
$
|
17,916
|
|
$
|
487,999
|
|
(1)
|
These investments are held by our investment in Mardi Gras which increased to
65%
from
20%
on October 1, 2018. See Note
3
- Acquisition for further detail.
|
(2)
|
Includes ownership interest in Ursa (
22.7%
) and KM Phoenix (
25%
).
|
|
|
For the Year Ended December 31,
|
|
For the Period from
|
||||||||
|
|
2018**
|
|
2017
|
|
October 30, 2017 to December 31, 2017
|
||||||
Statement of operations
|
|
|
|
|
|
|
||||||
Revenue
|
|
$
|
470,802
|
|
|
$
|
391,301
|
|
|
$
|
65,075
|
|
Operating expenses
|
|
200,901
|
|
|
129,405
|
|
|
21,386
|
|
|||
Net income
|
|
270,356
|
|
|
262,345
|
|
|
44,131
|
|
|
|
As of December 31,
|
||||
Balance Sheets
|
|
2018
|
|
2017
|
||
Current assets
|
|
123,408
|
|
|
127,498
|
|
Non-current assets
|
|
1,646,324
|
|
|
1,119,882
|
|
Current liabilities
|
|
35,791
|
|
|
59,324
|
|
Non-current liabilities
|
|
486,634
|
|
|
234,537
|
|
Equity
|
|
1,247,307
|
|
|
953,519
|
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Land
|
|
$
|
155
|
|
|
$
|
155
|
|
ROW assets
|
|
1,380
|
|
|
1,380
|
|
||
Buildings and improvements
|
|
12,032
|
|
|
12,032
|
|
||
Pipelines and equipment
|
|
93,617
|
|
|
92,083
|
|
||
Other
|
|
509
|
|
|
509
|
|
||
Construction in progress
|
|
277
|
|
|
67
|
|
||
Property, plant and equipment
|
|
107,970
|
|
|
106,226
|
|
||
Less: Accumulated depreciation
|
|
(39,390
|
)
|
|
(36,738
|
)
|
||
Property, plant and equipment, net
|
|
$
|
68,580
|
|
|
$
|
69,488
|
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Current portion of environmental remediation obligation
|
|
$
|
629
|
|
|
$
|
1,655
|
|
Accrued interest payable - related parties
|
|
4,155
|
|
|
159
|
|
||
Other accrued liabilities
|
|
2,116
|
|
|
2,667
|
|
||
Accrued liabilities
|
|
$
|
6,900
|
|
|
$
|
4,481
|
|
|
|
|
|
|
Partnership
|
|
Predecessor
|
|
Predecessor
|
||||||||||
|
Years Ended December 31,
|
|
October 30, 2017 - December 31, 2017
|
|
January 1, 2017 - October 29, 2017
|
|
Years Ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
|
|
2016
|
||||||||||||
Operating expenses—related parties
|
$
|
5,006
|
|
|
$
|
7,073
|
|
|
$
|
731
|
|
|
$
|
6,342
|
|
|
$
|
6,030
|
|
Maintenance expenses—related parties
|
97
|
|
|
461
|
|
|
79
|
|
|
382
|
|
|
455
|
|
|||||
General and administrative—related parties
|
14,072
|
|
|
6,670
|
|
|
2,357
|
|
|
4,313
|
|
|
7,990
|
|
|||||
Total operating, maintenance, and general corporate costs—related parties
|
$
|
19,175
|
|
|
$
|
14,204
|
|
|
$
|
3,167
|
|
|
$
|
11,037
|
|
|
$
|
14,475
|
|
|
|
|
For the years ended December 31,
|
|||||
|
|
|
2018
|
2017*
|
||||
Net income attributable to the Partnership
|
$
|
133,057
|
|
$
|
21,775
|
|
||
Less:
|
|
|
||||||
Incentive distribution rights currently held by the General Partner
|
|
—
|
|
—
|
|
|||
Limited partners' distribution declared on common units
|
59,344
|
|
9,415
|
|
||||
Limited partners' distribution declared on subordinated units
|
59,341
|
|
9,415
|
|
||||
Net income attributable to the Partnership in excess of distributions
|
$
|
14,372
|
|
$
|
2,945
|
|
||
* Represents the period from October 30, 2017 through December 31, 2017
|
|
|
|
|
|
|
|
For the year ended December 31, 2018
|
||||||||||||||
|
|
|
General Partner
|
|
Limited Partners' Common Units
|
|
Limited Partners' Subordinated Units
|
|
Total
|
||||||||
|
|
|
(in thousands of dollars, unless otherwise indicated)
|
||||||||||||||
Distributions declared
|
|
$
|
—
|
|
|
$
|
59,344
|
|
|
$
|
59,341
|
|
|
$
|
118,685
|
|
|
Net income attributable to the Partnership in excess of distributions
|
—
|
|
|
7,186
|
|
|
7,186
|
|
|
14,372
|
|
||||||
Net income attributable to the Partnership
|
$
|
—
|
|
|
$
|
66,530
|
|
|
$
|
66,527
|
|
|
$
|
133,057
|
|
||
Weighted average units outstanding (in thousands):
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
52,378
|
|
|
52,376
|
|
|
104,754
|
|
|||||
Diluted
|
|
|
|
|
52,378
|
|
|
52,376
|
|
|
104,754
|
|
|||||
Net income per limited partner unit (in dollars):
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
$
|
1.27
|
|
|
$
|
1.27
|
|
|
|
||||
Diluted
|
|
|
|
|
$
|
1.27
|
|
|
$
|
1.27
|
|
|
|
|
|
|
October 30, 2017 - December 31, 2017
|
||||||||||||||
|
|
|
General Partner
|
|
Limited Partners' Common Units
|
|
Limited Partners' Subordinated Units
|
|
Total
|
||||||||
|
|
|
(in thousands of dollars, unless otherwise indicated)
|
||||||||||||||
Distributions declared
|
|
$
|
—
|
|
|
$
|
9,415
|
|
|
$
|
9,415
|
|
|
$
|
18,830
|
|
|
Net income attributable to the Partnership in excess of distributions
|
—
|
|
|
1,473
|
|
|
1,472
|
|
|
2,945
|
|
||||||
Net income attributable to the Partnership
|
$
|
—
|
|
|
$
|
10,888
|
|
|
$
|
10,887
|
|
|
$
|
21,775
|
|
||
Weighted average units outstanding (in thousands):
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
52,376
|
|
|
52,376
|
|
|
104,752
|
|
|||||
Diluted
|
|
|
|
|
52,376
|
|
|
52,376
|
|
|
104,752
|
|
|||||
Net income per limited partner unit (in dollars):
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
|
||||
Diluted
|
|
|
|
|
$
|
0.21
|
|
|
$
|
0.21
|
|
|
|
|
|
January 1, 2017 - October 29, 2017
|
|
Year Ended
December 31,
|
||||
|
|
2017
|
|
2016
|
||||
Current tax expense:
|
|
|
|
|
||||
U.S. federal
|
|
$
|
20,890
|
|
|
$
|
24,125
|
|
U.S. state
|
|
3,975
|
|
|
4,660
|
|
||
Total current tax expense
|
|
24,865
|
|
|
28,785
|
|
||
Deferred tax expense:
|
|
|
|
|
|
|||
U.S. federal
|
|
381
|
|
|
571
|
|
||
U.S. state
|
|
72
|
|
|
109
|
|
||
Total deferred tax expense
|
|
453
|
|
|
680
|
|
||
Total income tax expense
|
|
$
|
25,318
|
|
|
$
|
29,465
|
|
|
|
January 1, 2017 - October 29, 2017
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
||||||||||
Statutory U.S. federal income taxes / rate
|
|
$
|
22,685
|
|
|
35.0
|
%
|
|
$
|
26,367
|
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
|
2,633
|
|
|
4.1
|
%
|
|
3,098
|
|
|
4.1
|
%
|
||
Total income taxes / effective tax rates
|
|
$
|
25,318
|
|
|
39.1
|
%
|
|
$
|
29,465
|
|
|
39.1
|
%
|
|
Total
|
|
Less than 1 year
|
|
Years 2 to 3
|
|
Years 4 to 5
|
|
More than 5 years
|
||||||||||
Operating leases and ROWs
|
$
|
3,094
|
|
|
$
|
119
|
|
|
$
|
203
|
|
|
$
|
174
|
|
|
$
|
2,598
|
|
Service contract
|
123
|
|
|
106
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
3,217
|
|
|
$
|
225
|
|
|
$
|
220
|
|
|
$
|
174
|
|
|
$
|
2,598
|
|
|
Phantom Units
|
|||||
|
Number of Units
|
|
Weighted Average Grant Date Fair Value per Unit (in dollars)
|
|||
Outstanding at December 31, 2017
|
8,468
|
|
|
$
|
17.48
|
|
Granted
|
3,737
|
|
|
20.07
|
|
|
Vested
|
(8,468
|
)
|
|
17.48
|
|
|
Outstanding at December 31, 2018
|
3,737
|
|
|
$
|
20.07
|
|
|
As of December 31,
|
|||||
|
2018
|
2017
|
||||
Balance sheet
|
|
|
||||
Equity method investments
|
$
|
402,783
|
|
$
|
422,438
|
|
Non-controlling interests
|
$
|
140,974
|
|
$
|
342,330
|
|
|
For the Year Ended December 31, 2018
|
October 30, 2017 - December 31, 2017
|
||||
Statement of operations
|
|
|
||||
Income from equity method investments
|
$
|
47,936
|
|
$
|
10,123
|
|
Less: Net income attributable to non-controlling interests
|
32,619
|
|
8,099
|
|
||
Net impact on Net income attributable to the Partnership
|
$
|
15,317
|
|
$
|
2,024
|
|
|
For the Year Ended December 31, 2018
|
October 30, 2017 - December 31, 2017
|
||||
Statement of cash flows
|
|
|
||||
Cash flows from operating activities
|
|
|
||||
Distributions of earnings received from equity method investments
|
$
|
47,936
|
|
$
|
10,123
|
|
Cash flows from investing activities
|
|
|
||||
Distribution in excess of earnings from equity method investments
|
19,655
|
|
7,242
|
|
||
Cash flows from financing activities
|
|
|
||||
Distributions of prorated fourth quarter joint venture dividends to prior owners
|
—
|
|
(5,474
|
)
|
||
Distributions to non-controlling interests
|
(46,412
|
)
|
(9,513
|
)
|
||
Cash flows used in financing activities
|
(46,412
|
)
|
(14,987
|
)
|
||
Net change on BPMP's cash and cash equivalents
|
$
|
21,179
|
|
$
|
2,378
|
|
•
|
Prior to November 30, 2018, Rhum, located in the UK sector of the North Sea, was operated by BP Exploration Operating Company Limited ("BPEOC"), a non-US subsidiary of BP, and Rhum was owned under a 50:50 unincorporated joint arrangement between BPEOC and Iranian Oil Company (U.K.) Limited ("IOC") which was initially established in 1974. During 2018, BP recorded gross revenues of $177.3 million related to its interests in Rhum. BP had a net profit of $87.7 million for the year ended December 31, 2018.
|
•
|
BP has sought to carry out its role as operator of the Rhum joint arrangement in compliance with US sanctions and has obtained a series of specific OFAC Licenses relating to the ongoing operation of the Rhum field.
|
•
|
In November 2017, BPEOC entered into an agreement with IOC for the sale and purchase of an IOC entitlement to Forties blend crude oil. The parties agreed to set off the purchase price - £29.89 million ($39.88 million equivalent) - against IOC’s share of operating costs incurred or to be incurred by BPEOC as operator of the Rhum field under the Rhum joint operating agreement. 604,976 net barrels of Forties blend crude oil was loaded at a North Sea terminal in January 2018 and delivered to BP’s Rotterdam refinery. Upon delivery at BP’s Rotterdam refinery, the Forties blend crude oil was comingled with other products for refining, and therefore BP is unable to ascertain an amount of gross revenue or gross profit attributable to it.
|
•
|
During 2018, BPEOC received £0.22 million ($0.3 million equivalent) (net of tariffs) from BPEOC Forties Pipeline System in respect of monies owed to IOC in relation to the purchase of IOC’s share of Onshore Raw Gas at the Kinneil terminal of the Forties Pipeline System. BP and IOC agreed to set off the £0.22 million ($0.3 million equivalent) against IOC’s share of operating costs incurred or to be incurred by BPEOC as operator of the Rhum field under the Rhum joint operating agreement.
|
•
|
During 2018, BPEOC received £2.79 million ($3.73 million equivalent) (net of tariffs) from a non-US third party in respect of the sale to such non-US third party of certain NGLs redelivered from the St Fergus terminal. These NGLs had been acquired by BPEOC from IOC at the St. Fergus terminal. BP and IOC agreed to set off the £2.79 million ($3.73 million equivalent) against IOC’s share of operating costs incurred by BPEOC as operator of the Rhum field under the Rhum joint operating agreement.
|
•
|
On November 30, 2018, BP completed the sale of its ownership stake in the Rhum joint arrangement and transferred its role as operator to Serica. Prior to the sale, on October 5, 2018, Serica and BP received a conditional license from OFAC relating to the ongoing operation of the Rhum field. The license was valid until October 31, 2019 and was conditional upon arrangements being put in place before November 5, 2018 relating to the interests in Rhum held by IOC. An updated license from OFAC on substantially the same terms was issued on November 2, 2018 and on the same date the conditions in such OFAC license in respect of the interest in Rhum held by IOC were met in full. These conditions were satisfied through arrangements which provide that all benefits accruing from and relating to IOC’s interest in Rhum will be held
|
•
|
In December 2018, BP made a cash transfer of £2.69 million ($3.59 million equivalent) to Rhum Management Company. This transfer represented the net amount of IOC funds in the Rhum joint venture account which had not, to that date, been set off against IOC’s share of operating costs incurred by BPEOC as operator of the Rhum field under the Rhum joint operating agreement.
|
•
|
BP does not expect to enter into any further similar arrangements with IOC or any member of the Government of Iran in relation to the Rhum field. BP will continue to purchase from Serica’s liftings from Rhum or provide services to Serica as the operator of Rhum.
|
•
|
On July 17, 2018 BP Iran Limited terminated its lease of an office in Tehran. The office had been used for administrative activities. In 2018, taxes, including rental tax payments associated with the Tehran office, with an aggregate US dollar equivalent value of approximately $11,000, were paid from a BP trust account held with Tadvin Co. to Iranian public entities. No gross revenues or net profits were attributable to these activities.
|
•
|
During 2018, certain BP employees visited Iran for the purpose of meetings with Iranian government officials and other Iranian nationals and attending conferences. Payments were made to Iranian public entities for visas and taxes in relation to such visits with an aggregate US dollar equivalent value of approximately $3,000. In addition, certain BP employees met with Iranian government officials and other Iranian nationals outside of Iran. No gross revenues or net profits were attributable to these activities, save where otherwise disclosed. BP will continue to monitor and assess business opportunities in Iran which are compliant with EU and US laws applicable to BP including potentially attending meetings in connection with this purpose.
|
Name
|
|
Age*
|
|
Position with BP Midstream Partners GP LLC
|
|
Robert P. Zinsmeister
|
|
61
|
|
|
Director, Chief Executive Officer
|
Craig W. Coburn
|
|
54
|
|
|
Director, Chief Financial Officer
|
Mark Frena
|
|
59
|
|
|
Chief Development Officer
|
Gerald J. Maret
|
|
61
|
|
|
Chief Operating Officer
|
Hans F. Boas
|
|
53
|
|
|
Chief Legal Counsel and Secretary
|
J. Douglas Sparkman
|
|
61
|
|
|
Director, Chairman of the Board of Directors
|
Brian D. Smith
|
|
51
|
|
|
Director
|
Clive Christison
|
|
47
|
|
|
Director
|
Walter Clements
|
|
59
|
|
|
Independent Director
|
Robert Malone
|
|
67
|
|
|
Independent Director
|
Michele F. Joy
|
|
63
|
|
|
Independent Director
|
(*)
|
On
February 28, 2019
.
|
•
|
the requirement that a majority of the board of directors of our general partner consist of independent directors;
|
•
|
the requirement that the board of directors of our general partner have a nominating/corporate governance committee that is composed entirely of independent directors; and,
|
•
|
the requirement that the board of directors of our general partner have a compensation committee that is composed entirely of independent directors.
|
Name and Principal Position
(1)
|
Year
|
Salary
|
Stock Awards
|
Bonus
|
Stock Options
|
Non-Equity Incentive Compensation
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings
|
All Other Compensation
|
Total
|
||||||||
Robert P. Zinsmeister,
Chief Executive Officer and Director
|
2018
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2017
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Craig W. Coburn,
Chief Financial Officer and Director
|
2018
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2017
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Mark Frena,
Chief Development Officer
|
2018
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2017
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Gerald J. Maret,
Chief Operating Officer
|
2018
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2017
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Hans F. Boas,
Chief Legal Counsel and Secretary
|
2018
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2017
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1)
|
Messrs. Zinsmeister, Coburn, Frena, Maret and Boas devote a portion of their overall working time to our business. Except for the fixed administrative fee we paid to BP Pipelines under the omnibus agreement, we did not pay or reimburse any compensation amounts to or for our named executive officers in 2018 or 2017.
|
|
Option awards
|
Stock awards
|
||||||||||||||||
Name
|
Number of Securities of Underlying Unexercised Options (#) Exercisable
|
Number of Securities of Underlying Unexercised Options (#) Unexercisable
|
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
|
Option Exercise Price ($)
|
Option Expiration Date
|
Number of Shares or Units of Stock that Have Not Vested (#)
|
Market Value of Shares or Units of Stock that Have Not Vested ($)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested ($)
|
|||||||||
Robert P. Zinsmeister
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Craig W. Coburn
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Mark Frena
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Gerald J. Maret
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Hans F. Boas
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Name
(1)
|
Fee Earned or Paid in Cash
|
Unit Awards
(2)
|
Option Awards
|
Non-Equity Inventive Plan Compensation
|
Non-Qualified Compensation
|
Deferred Earnings
|
All Other Compensation
|
Total
|
||||||||||||||||
Walter Clements
|
$
|
79,213
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
79,213
|
|
Robert Malone
|
99,351
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
99,351
|
|
||||||||
Michele F. Joy
|
78,358
|
|
75,002
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
153,360
|
|
(1)
|
Mr. Clements was appointed to the board of directors on October 25, 2017. Mr. Malone was appointed to the board of directors on November 14, 2017. Ms. Joy was appointed to the board of directors on May 8, 2018.
|
(2)
|
Amounts reported in this column reflect the aggregate grant date fair value of the phantom units, computed in accordance with FASB ASC Topic 718, determined without regard to forfeitures. For more information, please see
Part II, Item 8, Note 15 - Unit-Based Compensation
. As of December 31, 2018, there were 3,737 phantom units outstanding under the LTIP, held by Ms. Joy.
|
Name of Beneficial Owner (1)
|
|
Common
Units
Beneficially
Owned
|
|
Percentage
of Common
Units
Beneficially
Owned
|
|
Subordinated
Units
Beneficially
Owned
|
|
Percentage of
Subordinated
Units
Beneficially
Owned
|
|
Percentage of
Total Common
and Subordinated
Units Beneficially
Owned
|
|||||
BP Midstream Holdings LLC (2)
|
|
4,581,177
|
|
|
8.7
|
%
|
|
52,375,535
|
|
|
100
|
%
|
|
54.4
|
%
|
Tortoise Capital Advisors, L.L.C.
11550 Ash Street
Suite 300
Leawood, KS 66211 (3)
|
|
6,192,992
|
|
|
11.8
|
%
|
|
—
|
|
|
—
|
|
|
5.9
|
%
|
Salient Capital Advisors, LLC
4265 San Felipe
8th Floor
Houston, Texas 77027 (4)
|
|
5,434,936
|
|
|
10.4
|
%
|
|
—
|
|
|
—
|
|
|
5.2
|
%
|
Kayne Anderson Capital Advisors, L.P.
1800 Avenue of the Stars
Third Floor
Los Angeles, CA 90067 (5)
|
|
5,341,812
|
|
|
10.2
|
%
|
|
—
|
|
|
—
|
|
|
5.1
|
%
|
Chickasaw Capital Management, LLC
6075 Poplar Ave.
Suite 720
Memphis, TN 38119 (6)
|
|
4,376,240
|
|
|
8.4
|
%
|
|
—
|
|
|
—
|
|
|
4.2
|
%
|
Clearbridge Investments, LLC
620 8th Avenue
New York, NY 10018 (7)
|
|
4,077,493
|
|
|
7.8
|
%
|
|
—
|
|
|
—
|
|
|
3.9
|
%
|
Harvest Fund Advisors LLC
100 W. Lancaster Avenue
Suite 200
Wayne, PA 19087 (8)
|
|
3,122,817
|
|
|
6.0
|
%
|
|
—
|
|
|
—
|
|
|
3.0
|
%
|
Energy Income Partners, LLC
10 Wright Street
Westport, Connecticut 06880 (9)
|
|
2,644,971
|
|
|
5.0
|
%
|
|
—
|
|
|
—
|
|
|
2.5
|
%
|
Robert P. Zinsmeister
|
|
5,555
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Craig W. Coburn
|
|
3,500
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Mark Frena
|
|
5,555
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Gerald J. Maret
|
|
2,500
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Hans F. Boas
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
J. Douglas Sparkman
|
|
5,555
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Brian D. Smith
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Clive Christison
|
|
2,500
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Walter Clements
|
|
4,166
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Robert Malone
|
|
4,302
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Michele F. Joy (10)
|
|
3,737
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Directors and executive officers as a group (11 persons)
|
|
37,370
|
|
|
*
|
|
|
—
|
|
|
—
|
|
|
*
|
|
(*)
|
Indicates beneficial ownership of less than 1%.
|
(1)
|
The address for all beneficial owners in this table, except as noted in the table, is 501 Westlake Park Boulevard, Houston, Texas 77079.
|
(2)
|
BP Holdco is a wholly owned subsidiary of BP Pipelines (North America) Inc. and owns the common and subordinated units presented above. BP Pipelines (North America) Inc. may be deemed to beneficially own the units held by BP Holdco.
|
(3)
|
Based solely on a Schedule 13G/A filed by Tortoise Capital Advisors, L.L.C. on February 12, 2019.
|
(4)
|
Based solely on a Schedule 13G filed by Salient Capital Advisors, LLC on January 15, 2019.
|
(5)
|
Based solely on a Schedule 13G/A filed by Kayne Anderson Capital Advisors, L.P. and Richard A. Kayne on January 9, 2019.
|
(6)
|
Based solely on a Schedule 13G/A filed by Chickasaw Capital Management, LLC on February 1, 2019.
|
(7)
|
Based solely on a Schedule 13G/A filed by Clearbridge Investments, LLC on February 14, 2019.
|
(8)
|
Based solely on a Schedule 13G/A filed by Harvest Fund Advisors LLC and Eric M. Conklin on February 14, 2019.
|
(9)
|
Based solely on a Schedule 13G filed by Energy Income Partners, LLC, James Murchie, Eva Pao, Saul Ballesteros, and John Tysseland on February 14, 2019.
|
(10)
|
Represents Phantom Units granted under the LTIP and are subject to the terms thereunder.
|
Plan Category
|
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)) (1)
|
|||
|
(a)
|
|
|
(b)
|
|
(c)
|
|
Equity compensation plans approved by security holders
|
3,737
|
|
(2)
|
—
|
|
5,490,066
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
—
|
|
Total
|
3,737
|
|
|
—
|
|
5,490,066
|
|
(1)
|
The amounts shown represents common units available under the LTIP as of December 31, 2018.
|
(2)
|
Represents Phantom Units granted under the LTIP and are subject to the terms thereunder.
|
Distributions of cash available for distribution to our general partner and its affiliates
|
We make cash distributions to our unitholders, including affiliates of our general partner. In addition, if distributions exceed the minimum quarterly distribution and other higher target distribution levels, our general partner is entitled to increasing percentages of the distributions, up to 50.0% of the distributions above the highest target distribution level. Assuming we have sufficient cash available for distribution to pay the full minimum quarterly distribution on all of our outstanding common units and subordinated units for four quarters, our general partner and its affiliates would receive an annual distribution of approximately $59.8 million on their units.
|
Payments to our general partner and its affiliates
|
BP Pipelines provides customary operating, management and general administrative services to us. Our general partner shall reimburse BP Pipelines and its affiliates pursuant to the Omnibus Agreement as described below for its direct expenses incurred on behalf of us and a proportionate amount of its and their indirect expenses incurred on behalf of us, including, but not limited to, compensation expenses. Our general partner does not receive a management fee or other compensation for its management of our partnership, but we do reimburse our general partner and its affiliates for all direct and indirect expenses they incur and payments they make on our behalf, including payments made to BP Pipelines for customary management and general administrative services. Our partnership agreement does not set a limit on the amount of expenses for which our general partner and its affiliates may be reimbursed. These expenses include salary, benefits, bonus, incentive compensation and other amounts paid to persons who perform services for us or on our behalf and expenses allocated to our general partner by its affiliates. Our partnership agreement provides that our general partner will determine the expenses that are allocable to us.
|
Withdrawal or removal of our general partner
|
If our general partner withdraws or is removed, its non-economic general partner interest and its incentive distribution rights will either be sold to the new general partner for cash or converted into common units, in each case for an amount equal to the fair market value of those interests.
|
Liquidation
|
Upon our liquidation, the partners, including our general partner, will be entitled to receive liquidating distributions according to their respective capital account balances.
|
•
|
our payment of an annual administrative fee of $13.3 million, for the provision of general and administrative services and, in addition, to reimburse personnel and other costs related to the direct operation, management and maintenance of the assets by BP Pipelines and its affiliates;
|
•
|
our obligation to reimburse BP Pipelines and its affiliates for personnel costs related to the direct operation, management, maintenance and repair of the assets incurred by BP Pipelines or its affiliates on our behalf;
|
•
|
our obligation to reimburse BP Pipelines and its affiliates for services and certain direct or allocated costs and expenses incurred by BP Pipelines or its affiliates on our behalf;
|
•
|
BP Pipelines’ obligation to indemnify us for certain environmental and other liabilities, and our obligation to indemnify BP Pipelines for certain environmental and other liabilities related to our assets to the extent BP Pipelines is not required to indemnify us;
|
•
|
the granting of a license from BP America Inc. to us with respect to use of certain BP trademarks and trade names; and
|
•
|
BP Pipelines granting to us of a ROFO with respect to the Subject Assets.
|
•
|
events and conditions associated with BP Pipelines' retained assets, whether before or after the IPO, except to the extent caused by our act or omission after the closing;
|
•
|
the failure of BP Pipelines to have obtained title or any consent or approval necessary for the direct or indirect conveyance, contribution or transfer to us or our applicable subsidiaries of pipeline and related assets or interests (other than environmental and title, rights of way, consents, licenses, permits or approvals addressed in the other indemnities described above), in each case to the extent BP Pipelines is notified of such matters prior to the first anniversary of the closing of the IPO and subject to an aggregate deductible of $0.5 million;
|
•
|
any litigation matters attributable to the ownership or operation of the assets contributed to us in connection with the IPO, including the matters pending at the closing of the offering and identified on a schedule to the omnibus agreement, to the extent BP Pipelines is notified of matters that are not listed on such schedule prior to the first anniversary of the closing of the IPO and subject to an aggregate deductible of $0.5 million for such unlisted matters; and
|
•
|
for a period of time immediately following the closing of the IPO equal to the applicable statute of limitations
plus
60 days, all tax liabilities attributable to the ownership or the operation of the assets contributed to us in connection with the IPO and arising prior to the closing of the IPO and any such tax liabilities that resulted from the formation of our general partner and us from the consummation of the transactions contemplated by our contribution agreement.
|
•
|
the sale, lease, transfer, pledge or other disposition of any of Mardi Gras’ interests in any of the Mardi Gras Joint Ventures;
|
•
|
other than equity securities issued upon exercise of convertible or exchangeable securities authorized with the unanimous approval of all members of Mardi Gras, the authorization, sale and/or issuance by Mardi Gras or any of the Mardi Gras Joint Ventures of any of their respective equity securities or interests, including the granting of any options to do the same;
|
•
|
the incurrence of any indebtedness by Mardi Gras or any of the Mardi Gras Joint Ventures, the incurrence of any indebtedness by any other person secured by any lien on any property of Mardi Gras or any of the Mardi Gras Joint Ventures, or the guarantee by Mardi Gras or any of the Mardi Gras Joint Ventures of the debts of any other person;
|
•
|
the approval of the annual budget of Mardi Gras, including the approval of the amount of cash reserves to be set aside before payment of any distributions to the members;
|
•
|
any repurchase or redemption by Mardi Gras or any of the Mardi Gras Joint Ventures of any debt or equity securities;
|
•
|
any merger, consolidation or share exchange of Mardi Gras or any of the Mardi Gras Joint Ventures with or into any person, or any similar business combination transaction;
|
•
|
any filing for bankruptcy, liquidation, dissolution or winding up of Mardi Gras or any of the Mardi Gras Joint Ventures or any event that would cause a dissolution or winding up of Mardi Gras or any of the Mardi Gras Joint Ventures or any consent to any such action;
|
•
|
any amendment or repeal of the certificate of formation of Mardi Gras or the Mardi Gras LLC Agreement;
|
•
|
any capital contributions to Mardi Gras or any of the Mardi Gras Joint Ventures; and
|
•
|
approving of or granting an option to perform any actions that are intended to accomplish any of the foregoing.
|
•
|
at any time when there are no members, unless the business of Mardi Gras is continued under the Delaware Limited Liability Company Act;
|
•
|
the written consent of all members to dissolve the company;
|
•
|
an “event of withdrawal” (as defined in the Delaware Limited Liability Company Act) of the managing member; or
|
•
|
the entry of a decree of judicial dissolution of Mardi Gras pursuant to Section 18-802 of the Delaware Limited Liability Company Act.
|
•
|
authorizing the use of the Mars pipeline system for transportation of substances other than crude oil;
|
•
|
approving capital expenditures in excess of $500,000 per project, or $2 million annually;
|
•
|
any change in the direction or configuration of the pipeline system;
|
•
|
establishing a connection policy;
|
•
|
entering into any contract, lease, sublease, note, deed of trust or other obligation unless a provision contained therein limits the claims thereunder to the company’s assets;
|
•
|
the acquisition, encumbrance, sale, lease or disposition of all or substantially all of the real and personal property assets of the company;
|
•
|
authorizing the borrowing of money on the credit of the company;
|
•
|
the issuance of any securities by the company;
|
•
|
determining that a legal prohibition against a provision of the Mars LLC Agreement invalidates the purpose or intent of the agreement;
|
•
|
authorizing any individual member or member of the management committee to act on behalf of the company;
|
•
|
entering into settlements, claims, judgments or matters of potential litigation greater than $100,000;
|
•
|
dissolution of the company; and
|
•
|
any other action that, pursuant to an express provision of the Mars LLC Agreement, requires the approval of a unanimous interest.
|
•
|
approval of any company contracts or amendments thereto with certain Shell affiliates;
|
•
|
approval of operating and capital budgets and any amendments thereto;
|
•
|
creation of and appointments to any subcommittees to advise the management committee;
|
•
|
establishment or administration of a quality bank;
|
•
|
establishment or amendment of tariff rates applicable to the Mars pipeline system;
|
•
|
resolution of audit exceptions; and
|
•
|
any other action that, pursuant to an express provision of the Mars LLC Agreement, requires the approval of a super majority interest.
|
•
|
giving notice of default to a defaulting member;
|
•
|
expelling a defaulting member;
|
•
|
directing the chairman or secretary to call special meetings of the member committee;
|
•
|
causing a dispute under the company’s operating agreement to go to arbitration; and
|
•
|
giving notice of termination of the operating agreement because either (i) a court of competent jurisdiction has found the Mars operator to be guilty of gross negligence or willful misconduct, (ii) the Mars operator has dissolved, liquidated or terminated its existence, (iii) the Mars operator has filed a petition under Chapter 7 or Chapter 11 of the Federal Bankruptcy Act of 1978 or (iv) the Mars operator has ceased to be a member or an affiliate of a member of the company.
|
•
|
the vote of a unanimous interest to dissolve the company;
|
•
|
any event which makes it unlawful for the business of the company to be carried on;
|
•
|
the occurrence of any other event causing a dissolution of the company under Section 18-801 of the Delaware Limited Liability Company Act; or
|
•
|
the filing of a certificate of cancellation with the Secretary of State of the State of Delaware.
|
•
|
dissolution of the company;
|
•
|
approval of the company’s execution of, assignment of, and any amendment to or waiver of certain specified construction agreements, operating agreements and letters of understanding (the “Caesar Definitive Agreements”);
|
•
|
termination pursuant to the terms thereof of any Caesar Definitive Agreement or any other agreement with respect to the construction or operation of the Caesar pipeline system;
|
•
|
except for collection actions, the institution of litigation, arbitration, or similar proceedings against persons other than any member or any affiliate of any member at a cost to the company which could reasonably be expected to exceed $1,000,000;
|
•
|
settlement of any litigation, arbitration or similar proceedings against any person or the company for an amount in excess of $1,000,000, excluding those claims covered by any insurance policy the company may have;
|
•
|
authorization of transactions the nature of which are not in the ordinary course of business;
|
•
|
approval of the merger, consolidation, or participation in a share exchange or other statutory reorganization with, or voluntary or involuntary sale, exchange, assignment, transfer, conveyance, bequest, devise, merger, consolidation, gift or any other alienation, with or without consideration, of all or substantially all of the assets of the company to, any person;
|
•
|
authorization of a transaction involving a lease or similar arrangement which either (1) involves an asset with a fair market value of more than $5,000,000 or (2) could reasonably be expected to result in annual payments of more than $5,000,000;
|
•
|
acceptance of non-cash contributions from any member and determining the fair market value thereof;
|
•
|
purchase of any insurance by the company;
|
•
|
incurring any debt obligation of the company through long term or short term borrowing;
|
•
|
hiring or termination of any employees of the company;
|
•
|
appointment or removal of the company’s independent auditor;
|
•
|
amendment of the Caesar LLC Agreement;
|
•
|
approval of the filing of any application with any governmental agency for a change in the jurisdictional or carrier status of the Caesar pipeline system;
|
•
|
approval of capital expenditures associated with any single project or undertaking estimated to exceed $40,000,000 in the aggregate; and
|
•
|
any other action that, pursuant to an express provision of the Caesar LLC Agreement, requires the approval of a unanimous interest.
|
•
|
approval by the company of the assignment of certain of the Caesar Definitive Agreements;
|
•
|
authorization of any contract or agreement to be executed by company involving capital expenditures of more than $5,000,000 in any year;
|
•
|
approval of capital expenditures associated with any single project or undertaking estimated to exceed $20,000,000 in the aggregate; and
|
•
|
approval of any amendment or revision to the budget to reflect an increase in the then current budget total under certain of the Caesar Definitive Agreements.
|
•
|
approval of any expenditure or undertaking required to perform any major repair to the Caesar pipeline system;
|
•
|
approval of any action that requires the approval of the management committee but does not expressly require the approval of a unanimous interest or a super majority interest;
|
•
|
approval of any action that requires the approval of the company under the Caesar Definitive Agreements;
|
•
|
approval of the assignment by Mardi Gras to the company of certain portions of a memorandum of understanding pertaining to certain interconnections to be constructed by a third party;
|
•
|
authorization for the company to conduct an audit under certain of the Caesar Definitive Agreements and designation of the person who will be responsible for conducting such audit;
|
•
|
approval of any inspection to be made by the company under certain of the Caesar Definitive Agreements and designation of the person who will be responsible for conducting such inspection;
|
•
|
approval of the submission of any dispute by company under certain of the Caesar Definitive Agreements to the dispute resolution process set forth therein and any other matters necessary to conduct such process;
|
•
|
approval by company to assert a claim for indemnification against the current operator of Caesar;
|
•
|
submission of any request by company that the current operator of Caesar provide details regarding the allocation of costs among the Caesar pipeline system and other projects under certain of the Caesar Definitive Agreements, as applicable;
|
•
|
approval of the company’s transportation policy, as well as any amendments or modifications thereto;
|
•
|
approval by the company of any action that is designated as requiring the approval of a super majority interest under the company’s transportation policy; and
|
•
|
any other action that requires the approval of a majority interest under the Caesar LLC Agreement.
|
•
|
the vote of a unanimous interest to dissolve the company;
|
•
|
the occurrence of any other event causing a dissolution of the company under Section 18-801 of the Delaware Limited Liability Company Act; or
|
•
|
the filing of a certificate of cancellation with the Secretary of State of the State of Delaware.
|
•
|
dissolution of the company;
|
•
|
approval of the company’s execution of, assignment of, and any amendment to or waiver of certain specified construction agreements, operating agreements and letters of understanding (the “Cleopatra Definitive Agreements”);
|
•
|
termination pursuant to the terms thereof of any Cleopatra Definitive Agreement or any other agreement with respect to the construction or operation of the Cleopatra pipeline system;
|
•
|
except for collection actions, the institution of litigation, arbitration, or similar proceedings against persons other than any member or any affiliate of any member at a cost to the company which could reasonably be expected to exceed $1,000,000;
|
•
|
settlement of any litigation, arbitration or similar proceedings against any person or the company for an amount in excess of $1,000,000, excluding those claims covered by any insurance policy the company may have;
|
•
|
authorization of transactions the nature of which are not in the ordinary course of business;
|
•
|
approval of the merger, consolidation, or participation in a share exchange or other statutory reorganization with, or voluntary or involuntary sale, exchange, assignment, transfer, conveyance, bequest, devise, merger, consolidation, gift or any other alienation, with or without consideration, of all or substantially all of the assets of the company to, any person;
|
•
|
authorization of a transaction involving a lease or similar arrangement which either (1) involves an asset with a fair market value of more than $5,000,000 or (2) could reasonably be expected to result in annual payments of more than $5,000,000;
|
•
|
acceptance of non-cash contributions from any member and determining the fair market value thereof;
|
•
|
purchase of any insurance by the company;
|
•
|
incurring any debt obligation of the company through long term or short term borrowing;
|
•
|
hiring or termination of any employees of the company;
|
•
|
appointment or removal of the company’s independent auditor;
|
•
|
amendment of the Cleopatra LLC Agreement;
|
•
|
approval of the filing of any application with any governmental agency for a change in the jurisdictional or carrier status of the Cleopatra pipeline system;
|
•
|
approval of capital expenditures associated with any single project or undertaking estimated to exceed $30,000,000 in the aggregate; and
|
•
|
any other action that, pursuant to an express provision of the Cleopatra LLC Agreement, requires the approval of a unanimous interest.
|
•
|
approval by the company of the assignment of certain of the Cleopatra Definitive Agreements;
|
•
|
authorization of any contract or agreement to be executed by company involving capital expenditures of more than $5,000,000 in any year;
|
•
|
approval of capital expenditures associated with any single project or undertaking estimated to exceed $20,000,000 in the aggregate; and
|
•
|
approval of any amendment or revision to the budget to reflect an increase in the then current budget total under certain of the Cleopatra Definitive Agreements.
|
•
|
approval of any expenditure or undertaking required to perform any major repair to the Cleopatra pipeline system;
|
•
|
approval of any action that requires the approval of the management committee but does not expressly require the approval of a unanimous interest or a super majority interest;
|
•
|
approval of any action that requires the approval of the company under the Cleopatra Definitive Agreements;
|
•
|
approval of the assignment by Mardi Gras to the company of certain portions of a memorandum of understanding pertaining to certain interconnections to be constructed by a third party;
|
•
|
authorization for the company to conduct an audit under certain of the Cleopatra Definitive Agreements and designation of the person who will be responsible for conducting such audit;
|
•
|
approval of any inspection to be made by the company under certain of the Cleopatra Definitive Agreements and designation of the person who will be responsible for conducting such inspection;
|
•
|
approval of the submission of any dispute by company under certain of the Cleopatra Definitive Agreements to the dispute resolution process set forth therein and any other matters necessary to conduct such process;
|
•
|
approval by company to assert a claim for indemnification against the current operator of Cleopatra;
|
•
|
submission of any request by company that the current operator of Cleopatra provide details regarding the allocation of costs among the Cleopatra pipeline system and other projects under certain of the Cleopatra Definitive Agreements; and
|
•
|
any other action that requires the approval of a majority interest under the Cleopatra LLC Agreement.
|
•
|
the vote of a unanimous interest to dissolve the company;
|
•
|
the occurrence of any other event causing a dissolution of the company under Section 18-801 of the Delaware Limited Liability Company Act; or
|
•
|
the filing of a certificate of cancellation with the Secretary of State of the State of Delaware.
|
•
|
dissolution of the company pursuant to the Proteus LLC Agreement or the filing of any bankruptcy or reorganization petition on behalf of the company and acquiescence in such a petition filed by others;
|
•
|
approval of the company’s execution of, assignment of, and any amendment to or waiver of certain specified construction agreements, operating agreements and letters of understanding (the “Proteus Definitive Agreements”);
|
•
|
termination pursuant to the terms thereof of any Proteus Definitive Agreement or any other agreement with respect to the construction or operation of the Proteus pipeline system and appointment of a replacement operator or construction manager, as applicable;
|
•
|
except for collection actions, the institution of litigation, arbitration, or similar proceedings against persons other than any member or any affiliate of any member at a cost to the company which could reasonably be expected to exceed $500,000;
|
•
|
settlement of any litigation, arbitration or similar proceedings against any person or the company for an amount in excess of $500,000, excluding those claims covered by any insurance policy the company may have;
|
•
|
authorization of transactions the nature of which are not in the ordinary course of business;
|
•
|
approval of the merger, consolidation, or participation in a share exchange or other statutory reorganization with, or voluntary or involuntary sale, exchange, assignment, transfer, conveyance, bequest, devise, merger, consolidation, gift or any other alienation, with or without consideration, of all or substantially all of the assets of the company to, any person;
|
•
|
authorization of a transaction involving a lease or similar arrangement which either (1) involves an asset with a fair market value of more than $5,000,000 or (2) could reasonably be expected to result in annual payments of more than $5,000,000;
|
•
|
acceptance of non-cash contributions from any member and determining the fair market value thereof;
|
•
|
approval of the purchase of any insurance policy to be held by the company or the cancellation of any insurance policy then held by the company;
|
•
|
incurring any debt obligation of the company through long term or short term borrowing;
|
•
|
hiring or termination of any employees of the company;
|
•
|
appointment or removal of the company’s independent auditor;
|
•
|
appointment or removal of any independent auditor that company has the right to appoint pursuant to certain of the Proteus Definitive Agreements;
|
•
|
amendment of the Proteus LLC Agreement;
|
•
|
approval of any single project or undertaking and the budget for such single project or undertaking with capital expenditures estimated to exceed $20,000,000 in the aggregate;
|
•
|
authorization of expenditures for any single project or undertaking with capital expenditures estimated to exceed $20,000,000 in the aggregate;
|
•
|
designation of the officers of the company, including the decision to include vice presidents among the officers, but excluding the designation of any specific vice president;
|
•
|
removal of any officer of the company, excluding the removal of any vice president appointed by a member;
|
•
|
approval of the company’s policies and procedures, as well as any modifications or amendments thereto that may be made from time to time;
|
•
|
decision to appoint a person other than the current Proteus operator to be the tax reporting member under the Proteus LLC Agreement and designation of a replacement tax reporting member;
|
•
|
decision to shorten any required notification period set forth in the Proteus LLC Agreement for the holding of quarterly or special management committee meetings;
|
•
|
approval of banking resolutions, including, designation of persons that may (1) sign checks and other orders for the payment of money by the company; (2) sign contracts and other instruments or documents in the name of the company; and (3) endorse checks and other orders for the payment of money made payable to the company; and
|
•
|
any other action that, pursuant to an express provision of the Proteus LLC Agreement, requires the approval of a unanimous interest.
|
•
|
approval by the company of the assignment of certain of the Proteus Definitive Agreements;
|
•
|
authorization of any contract or agreement to be executed by company involving capital expenditures of more than $5,000,000 in any year;
|
•
|
approval of any single project or undertaking and the budget for such single project or undertaking with capital expenditures estimated to exceed $15,000,000 but not to exceed $20,000,000 in the aggregate;
|
•
|
authorization of expenditures for any single project or undertaking with capital expenditures estimated to exceed $15,000,000 but not to exceed $20,000,000 in the aggregate;
|
•
|
approval of any amendment or revision to the budget under certain of the Proteus Definitive Agreements to reflect an increase in the then current budget total;
|
•
|
execution by company of the completion certificate pursuant to certain construction agreements;
|
•
|
approval of the amount of cash reserves to be set aside before the payment of any distribution to the members;
|
•
|
approval of the company’s transportation policy, as well as any amendments or modifications thereto;
|
•
|
approval of the first operating budget under certain of the Proteus Definitive Agreements;
|
•
|
decision to reduce the 30-day or 60-day period in which payments of capital contributions must be made;
|
•
|
approval by the company of any action that is designated as requiring the approval of a super majority interest under the company’s transportation policy; and
|
•
|
any other action that, pursuant to an express provision of the Proteus LLC Agreement, requires the approval of a super majority interest.
|
•
|
approval of any expenditure or undertaking required to perform any major repair to the Proteus pipeline system;
|
•
|
approval of the amount of a capital contribution;
|
•
|
approval of any action that requires the approval of the management committee but does not expressly require the approval of a unanimous interest or a super majority interest;
|
•
|
approval of any action that requires the approval of the company under the Proteus Definitive Agreements, including without limitation, the approval of any operating budget or approval of any single project or undertaking and the budget for such single project or undertaking capital expenditures estimated to be less than or equal to $15,000,000 in the aggregate and the authorization of such capital expenditures;
|
•
|
approval of certain interconnect agreements, lease of platform space agreements or operating agreements;
|
•
|
decision to terminate the Proteus operating agreement;
|
•
|
approval of the submission of any dispute by company under certain of the Proteus Definitive Agreements to the dispute resolution process set forth therein and any other matters necessary to conduct such process;
|
•
|
approval by company to assert a claim for indemnification against a Proteus operator or to declare an operator to be in default under certain of the Proteus Definitive Agreements;
|
•
|
submission of any request by company that an operator provide details regarding the allocation of costs among the Proteus pipeline system and other projects under certain of the Proteus Definitive Agreements;
|
•
|
decision to make distributions hereunder more frequently than on a quarterly basis;
|
•
|
approval by the company of any action that is designated as requiring the approval of a majority interest under the company’s transportation policy; and
|
•
|
any other action that requires the approval of a majority interest under the Proteus LLC Agreement.
|
•
|
the vote of a unanimous interest to dissolve the company;
|
•
|
the occurrence of any other event causing a dissolution of the company under Section 18-801 of the Delaware Limited Liability Company Act; or
|
•
|
the filing of a certificate of cancellation with the Secretary of State of the State of Delaware.
|
•
|
dissolution of the company pursuant to the Endymion LLC Agreement or the filing of any bankruptcy or reorganization petition on behalf of the company and acquiescence in such a petition filed by others;
|
•
|
approval of the company’s execution of, assignment of, and any amendment to or waiver of certain specified construction agreements, operating agreements and letters of understanding (the “Endymion Definitive Agreements”);
|
•
|
termination pursuant to the terms thereof of any Endymion Definitive Agreement or any other agreement with respect to the construction or operation of the Endymion pipeline system and appointment of a replacement operator or construction manager, as applicable;
|
•
|
except for collection actions, the institution of litigation, arbitration, or similar proceedings against persons other than any member or any affiliate of any member at a cost to the company which could reasonably be expected to exceed $500,000;
|
•
|
settlement of any litigation, arbitration or similar proceedings against any person or the company for an amount in excess of $500,000, excluding those claims covered by any insurance policy the company may have;
|
•
|
authorization of transactions the nature of which are not in the ordinary course of business;
|
•
|
approval of the merger, consolidation, or participation in a share exchange or other statutory reorganization with, or voluntary or involuntary sale, exchange, assignment, transfer, conveyance, bequest, devise, merger, consolidation, gift or any other alienation, with or without consideration, of all or substantially all of the assets of the company to, any person;
|
•
|
authorization of a transaction involving a lease or similar arrangement which either (1) involves an asset with a fair market value of more than $5,000,000 or (2) could reasonably be expected to result in annual payments of more than $5,000,000;
|
•
|
acceptance of non-cash contributions from any member and determining the fair market value thereof;
|
•
|
approval of the purchase of any insurance policy to be held by the company or the cancellation of any insurance policy then held by the company;
|
•
|
incurring any debt obligation of the company through long term or short term borrowing;
|
•
|
hiring or termination of any employees of the company;
|
•
|
appointment or removal of the company’s independent auditor;
|
•
|
appointment or removal of any independent auditor that the company has the right to appoint pursuant to certain of the Endymion Definitive Agreements;
|
•
|
amendment of the Endymion LLC Agreement;
|
•
|
approval of any single project or undertaking and the budget for such single project or undertaking with capital expenditures estimated to exceed $20,000,000 in the aggregate;
|
•
|
authorization of expenditures for any single project or undertaking with capital expenditures estimated to exceed $20,000,000 in the aggregate;
|
•
|
designation of the officers of the company, including the decision to include vice presidents among the officers, but excluding the designation of any specific vice president;
|
•
|
removal of any officer of the company, excluding the removal of any vice president appointed by a member;
|
•
|
approval of the company’s policies and procedures, as well as any modifications or amendments thereto that may be made from time to time;
|
•
|
decision to appoint a person other than the current Endymion operator to be the tax reporting member under the Endymion LLC Agreement and designation of a replacement tax reporting member;
|
•
|
decision to shorten any required notification period set forth in the Endymion LLC Agreement for the holding of quarterly or special management committee meetings;
|
•
|
approval of banking resolutions, including, designation of persons that may (1) sign checks and other orders for the payment of money by the company; (2) sign contracts and other instruments or documents in the name of the company; and (3) endorse checks and other orders for the payment of money made payable to the company; and
|
•
|
any other action that, pursuant to an express provision of the Endymion LLC Agreement, requires the approval of a unanimous interest.
|
•
|
approval by the company of the assignment of certain of the Endymion Definitive Agreements;
|
•
|
authorization of any contract or agreement to be executed by company involving capital expenditures of more than $5,000,000 in any year;
|
•
|
approval of any single project or undertaking and the budget for such single project or undertaking with capital expenditures estimated to exceed $15,000,000 but not to exceed $20,000,000 in the aggregate;
|
•
|
authorization of expenditures for any single project or undertaking with capital expenditures estimated to exceed $15,000,000 but not to exceed $20,000,000 in the aggregate;
|
•
|
approval of any amendment or revision to the budget under certain of the Endymion Definitive Agreements to reflect an increase in the then current budget total;
|
•
|
execution by company of the completion certificate pursuant to certain construction agreements;
|
•
|
approval of the amount of cash reserves to be set aside before the payment of any distribution to the members;
|
•
|
approval of the company’s transportation policy, as well as any amendments or modifications thereto;
|
•
|
approval of the first operating budget under certain of the Endymion Definitive Agreements;
|
•
|
decision to reduce the 30-day or 60-day period in which payments of capital contributions must be made;
|
•
|
approval by the company of any action that is designated as requiring the approval of a super majority interest under the company’s transportation policy; and
|
•
|
any other action that, pursuant to an express provision of the Endymion LLC Agreement, requires the approval of a super majority interest.
|
•
|
approval of any expenditure or undertaking required to perform any major repair to the Endymion pipeline system;
|
•
|
approval of the amount of a capital contribution;
|
•
|
approval of any action that requires the approval of the management committee but does not expressly require the approval of a unanimous interest or a super majority interest;
|
•
|
approval of any action that requires the approval of the company under the Endymion Definitive Agreements including without limitation, the approval of any operating budget or approval of any single project or undertaking and the budget for such single project or undertaking capital expenditures estimated to be less than or equal to $15,000,000 in the aggregate and the authorization of such capital expenditures;
|
•
|
approval of certain interconnect agreements, lease of platform space agreements or operating agreements;
|
•
|
decision to terminate the Endymion operating agreement;
|
•
|
approval of the submission of any dispute by company under certain of the Endymion Definitive Agreements to the dispute resolution process set forth therein and any other matters necessary to conduct such process;
|
•
|
approval by company to assert a claim for indemnification against an Endymion operator or to declare an operator to be in default under certain of the Endymion Definitive Agreements;
|
•
|
submission of any request by company that an operator provide details regarding the allocation of costs among the Endymion pipeline system and other projects under certain of the Endymion Definitive Agreements;
|
•
|
decision to make distributions hereunder more frequently than on a quarterly basis;
|
•
|
approval by the company of any action that is designated as requiring the approval of a majority interest under the company’s transportation policy; and
|
•
|
any other action that requires the approval of a majority interest under the Endymion LLC Agreement.
|
•
|
the vote of a unanimous interest to dissolve the company;
|
•
|
the occurrence of any other event causing a dissolution of the company under Section 18-801 of the Delaware Limited Liability Company Act; or
|
•
|
the filing of a certificate of cancellation with the Secretary of State of the State of Delaware.
|
Mars Oil Pipeline Company, LLC
|
|
Caesar Oil Pipeline Company, LLC
|
|
Cleopatra Gas Gathering Company, LLC
|
Exhibit
No. |
|
Exhibit Description
|
|
Incorporated by Reference
|
|
Filed
Herewith |
|
Furnished
Herewith |
||||||
Form
|
|
Exhibit
|
|
Filing Date
|
|
SEC
File No. |
|
|||||||
3.1
|
|
|
S-1
|
|
3.1
|
|
9/11/2017
|
|
333-220407
|
|
|
|
|
|
3.2
|
|
|
10-Q
|
|
3.2
|
|
12/6/2017
|
|
001-38260
|
|
|
|
|
|
3.3
|
|
|
S-1
|
|
3.3
|
|
9/11/2017
|
|
333-220407
|
|
|
|
|
|
3.4
|
|
|
S-1
|
|
3.4
|
|
9/11/2017
|
|
333-220407
|
|
|
|
|
|
10.1
|
|
|
8-K
|
|
10.1
|
|
11/1/2017
|
|
001-38260
|
|
|
|
|
|
10.2
|
|
|
8-K
|
|
10.2
|
|
11/1/2017
|
|
001-38260
|
|
|
|
|
|
10.3
|
|
|
8-K
|
|
10.3
|
|
11/1/2017
|
|
001-38260
|
|
|
|
|
|
10.4*
|
|
|
S-1/A
|
|
10.6
|
|
9/25/2017
|
|
333-220407
|
|
|
|
|
|
10.5
|
|
|
8-K
|
|
10.4
|
|
11/1/2017
|
|
001-38260
|
|
|
|
|
|
10.6
|
|
|
8-K
|
|
10.5
|
|
11/1/2017
|
|
001-38260
|
|
|
|
|
|
10.7
|
|
|
8-K
|
|
10.6
|
|
11/1/2017
|
|
001-38260
|
|
|
|
|
|
10.8
|
|
|
8-K
|
|
10.7
|
|
11/1/2017
|
|
001-38260
|
|
|
|
|
|
10.9*
|
|
|
S-8
|
|
4.4
|
|
10/30/2017
|
|
333-221213
|
|
|
|
|
|
10.10*
|
|
|
S-8
|
|
4.5
|
|
10/30/2017
|
|
333-221213
|
|
|
|
|
|
10.11*
|
|
|
S-8
|
|
4.6
|
|
10/30/2017
|
|
333-221213
|
|
|
|
|
|
10.12
|
|
|
8-K
|
|
10.1
|
|
10/2/2018
|
|
001-38260
|
|
|
|
|
10.13
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
16.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
23.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
23.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
23.3
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
23.4
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
23.5
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
32**
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|
99.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
99.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
99.3
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
*
|
Management Contract or Compensatory Plan
|
**
|
Pursuant to SEC Release No. 33-8212, this certification will be treated as “accompanying” this Annual Report on Form 10-K and not “filed” as part of such report for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of Section 18 of the Exchange Act, and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act, except to the extent that the registrant specifically incorporates it by reference.
|
|
|
|
|
Date: February 28, 2019
|
|
BP MIDSTREAM PARTNERS LP
|
|
|
|
By:
|
BP MIDSTREAM PARTNERS GP LLC,
|
|
|
|
its general partner
|
|
|
|
|
|
|
By:
|
/s/ Craig W. Coburn
|
|
|
|
Craig W. Coburn
|
|
|
|
Chief Financial Officer and Director
|
Name
|
|
Title
|
|
|
|
/s/ Robert P. Zinsmeister
|
|
Chief Executive Officer and Director
|
Robert P. Zinsmeister
|
|
(Principal Executive Officer)
|
|
|
BP Midstream Partners GP LLC
|
|
|
|
/s/ Craig W. Coburn
|
|
Chief Financial Officer and Director
|
Craig W. Coburn
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
BP Midstream Partners GP LLC
|
|
|
|
/s/ J. Douglas Sparkman
|
|
Chairman of the Board of Directors
|
J. Douglas Sparkman
|
|
BP Midstream Partners GP LLC
|
|
|
|
/s/ Brian D. Smith
|
|
Director
|
Brian D. Smith
|
|
BP Midstream Partners GP LLC
|
|
|
|
/s/ Clive Christison
|
|
Director
|
Clive Christison
|
|
BP Midstream Partners GP LLC
|
|
|
|
/s/ Walter Clements
|
|
Director
|
Walter Clements
|
|
BP Midstream Partners GP LLC
|
|
|
|
/s/ Robert Malone
|
|
Director
|
Robert Malone
|
|
BP Midstream Partners GP LLC
|
|
|
|
/s/ Michele F. Joy
|
|
Director
|
Michele F. Joy
|
|
BP Midstream Partners GP LLC
|
1.
|
Loan Repayment Date
. The Original Loan Repayment Date is hereby waived and from the date of this Agreement the definition of the Original Loan Repayment Date shall be amended and modified to mean April 1, 2020 (the “Amended Loan Repayment Date”).
|
2.
|
Payment of Interest
. The Borrower shall pay accrued Interest on the Loan from the Utilisation Date to the Original Loan Repayment Date on March 29, 2019 and thereafter the Borrower shall pay accrued Interest on each Fee Payment Date and the remaining accrued Interest shall be paid on the Amended Loan Repayment Date.
|
3.
|
No other waivers
. Except as agreed in herein, there are no other waivers or amendments to the terms of the Facility Agreement.
|
4.
|
Governing Law
. This Agreement shall be governed by the laws of the state of New York.
|
5.
|
Counterparts
. This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
|
BP Midstream Partners, LP
|
|
North America Funding Company
|
By: BP Midstream Partners GP LLC,
|
|
|
Its general partner
|
|
By:
/s/ Thu Dang
|
|
|
Name: Thu Dang
|
By:
/s/ Craig W. Coburn
|
|
Title: Treasurer
|
Name: Craig W. Coburn
|
|
|
Title: Chief Financial Officer
|
|
|
Company Name
|
|
State of Organization
|
BP Two Pipeline Company LLC
|
|
Delaware
|
BP D-B Pipeline Company LLC
|
|
Delaware
|
BP River Rouge Pipeline Company LLC
|
|
Delaware
|
Joint Ventures
|
|
State of Organization
|
Mars Oil Pipeline Company LLC
(1)
|
|
Delaware
|
Ursa Oil Pipeline Company LLC
(2)
|
|
Delaware
|
KM Phoenix Holdings LLC
(3)
|
|
Delaware
|
Mardi Gras Transportation System Company LLC
(4)
|
|
Delaware
|
Caesar Oil Pipeline Company, LLC
(4)
|
|
Delaware
|
Cleopatra Gas Gathering Company, LLC
(4)
|
|
Delaware
|
Endymion Oil Pipeline Company, LLC
(4)
|
|
Delaware
|
Proteus Oil Pipeline Company, LLC
(4)
|
|
Delaware
|
(1)
|
BP Midstream Partners LP owns a 28.5% interest in Mars Oil Pipeline Company LLC.
|
(2)
|
BP Midstream Partners LP owns a 22.6916% interest in Ursa Oil Pipeline Company LLC.
|
(3)
|
BP Midstream Partners LP owns a 25% interest in KM Phoenix Holdings LLC.
|
(4)
|
BP Midstream Partners LP owns a 65% managing member interest in Mardi Gras Transportation System Company LLC. Mardi Gras Transportation System Company LLC owns a 56% interest in Caesar Oil Pipeline Company, LLC, a 53% interest in Cleopatra Gas Gathering Company, LLC, a 65% interest in Endymion Oil Pipeline Company, LLC and a 65% interest in Proteus Oil Pipeline Company, LLC.
|
1.
|
I have reviewed this Annual Report on Form 10-K of BP Midstream Partners 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: February 28, 2019
|
/s/ Robert P. Zinsmeister
|
|
Robert P. Zinsmeister
|
|
Chief Executive Officer and Director
|
|
BP Midstream Partners GP LLC
|
|
(the general partner of BP Midstream Partners LP)
|
1.
|
I have reviewed this Annual Report on Form 10-K of BP Midstream Partners 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: February 28, 2019
|
/s/ Craig W. Coburn
|
|
Craig W. Coburn
|
|
Chief Financial Officer and Director
|
|
BP Midstream Partners GP LLC
|
|
(the general partner of BP Midstream Partners LP)
|
(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: February 28, 2019
|
/s/ Robert P. Zinsmeister
|
|
Robert P. Zinsmeister
|
|
Chief Executive Officer and Director
|
|
BP Midstream Partners GP LLC
|
|
(the general partner of BP Midstream Partners LP)
|
|
/s/ Craig W. Coburn
|
|
Craig W. Coburn
|
|
Chief Financial Officer and Director
|
|
BP Midstream Partners GP LLC
|
|
(the general partner of BP Midstream Partners LP)
|
Financial Statements
|
|
Report of Independent Auditors
..................................................................................................................................................
|
|
Balance Sheets
.............................................................................................................................................................................
|
|
Statements of Income
..................................................................................................................................................................
|
|
Statements of Members’ Capital
..................................................................................................................................................
|
|
Statements of Cash Flows
...........................................................................................................................................................
|
|
Notes to Financial Statements
.....................................................................................................................................................
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
|
||||
Current assets
|
|
|
|
|
|
|||
Cash and cash equivalents
|
|
$
|
20,203,226
|
|
|
$
|
23,295,156
|
|
Accounts receivable
|
|
|
|
|
||||
Related parties
|
|
16,447,473
|
|
|
15,726,369
|
|
||
Third parties, net
|
|
4,909,253
|
|
|
3,345,952
|
|
||
Materials and supplies inventory
|
|
224,264
|
|
|
224,264
|
|
||
Allowance oil, net
|
|
8,277,550
|
|
|
4,126,661
|
|
||
Other current assets
|
|
3,068,969
|
|
|
851,733
|
|
||
Total current assets
|
|
53,130,735
|
|
|
47,570,135
|
|
||
Property, plant and equipment
|
|
301,094,414
|
|
|
300,486,964
|
|
||
Accumulated depreciation
|
|
(128,735,564
|
)
|
|
(119,492,479
|
)
|
||
Property, plant and equipment, net
|
|
172,358,850
|
|
|
180,994,485
|
|
||
Advance for operations due from related party
|
|
538,000
|
|
|
538,000
|
|
||
Other assets
|
|
5,303,402
|
|
|
6,054,854
|
|
||
Total assets
|
|
$
|
231,330,987
|
|
|
$
|
235,157,474
|
|
|
|
|
|
|
||||
Liabilities and Members' Capital
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
|
|||
Accounts payable and accrued liabilities
|
|
$
|
411,354
|
|
|
$
|
557,162
|
|
Payable to related parties
|
|
5,021,923
|
|
|
4,564,210
|
|
||
Total current liabilities
|
|
5,433,277
|
|
|
5,121,372
|
|
||
|
|
|
|
|
||||
Commitments and contingencies (Note 6 & 8)
|
|
|
|
|
||||
|
|
|
|
|
||||
Long-term deferred revenue
|
|
18,376,417
|
|
|
—
|
|
||
Members' capital
|
|
207,521,293
|
|
|
230,036,102
|
|
||
|
|
|
|
|
||||
Total liabilities and members' capital
|
|
$
|
231,330,987
|
|
|
$
|
235,157,474
|
|
|
|
December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
|
|
|
|
|
|
|
|||||
Operating revenue - related party
|
|
$
|
167,277,925
|
|
|
$
|
191,252,314
|
|
|
$
|
166,246,823
|
|
Operating revenue - third party
|
|
62,225,748
|
|
|
64,200,542
|
|
|
63,554,224
|
|
|||
Product revenue - related party
|
|
11,801,170
|
|
|
—
|
|
|
—
|
|
|||
Total revenue
|
|
241,304,843
|
|
|
255,452,856
|
|
|
229,801,047
|
|
|||
|
|
|
|
|
|
|
||||||
Costs and expenses
|
|
|
|
|
|
|
|
|||||
Operations
|
|
58,098,841
|
|
|
61,184,407
|
|
|
61,710,945
|
|
|||
Maintenance
|
|
5,065,247
|
|
|
3,892,738
|
|
|
3,935,176
|
|
|||
Cost of product sold
|
|
11,128,238
|
|
|
—
|
|
|
—
|
|
|||
General and administrative
|
|
4,824,553
|
|
|
4,244,373
|
|
|
4,386,618
|
|
|||
Depreciation and amortization
|
|
9,998,461
|
|
|
10,880,406
|
|
|
11,215,348
|
|
|||
Property taxes
|
|
2,427,553
|
|
|
2,357,117
|
|
|
1,965,443
|
|
|||
Net (gain) from pipeline operations
|
|
(4,142,396
|
)
|
|
(691,635
|
)
|
|
(163,761
|
)
|
|||
Total costs and expenses
|
|
87,400,497
|
|
|
81,867,406
|
|
|
83,049,769
|
|
|||
|
|
|
|
|
|
|
||||||
Operating income
|
|
153,904,346
|
|
|
173,585,450
|
|
|
146,751,278
|
|
|||
|
|
|
|
|
|
|
||||||
Other income
|
|
14,686
|
|
|
10,959
|
|
|
24,412
|
|
|||
|
|
|
|
|
|
|
||||||
Net Income
|
|
$
|
153,919,032
|
|
|
$
|
173,596,409
|
|
|
$
|
146,775,690
|
|
|
|
Shell Midstream Partners, L.P.
|
|
Shell Pipeline Company LP
|
|
BP Offshore Pipelines, Inc. / BP Midstream Partners, L.P.
(2)
|
|
Total
|
||||||||
Members' capital at December 31, 2015
|
|
$
|
69,401,906
|
|
|
$
|
104,102,855
|
|
|
$
|
69,159,242
|
|
|
$
|
242,664,003
|
|
Net income prior to September 30, 2016
|
|
32,468,794
|
|
|
48,703,190
|
|
|
32,355,266
|
|
|
113,527,250
|
|
||||
Cash distributions prior to September 30, 2016
|
|
(34,463,000
|
)
|
|
(51,694,500
|
)
|
|
(34,342,500
|
)
|
|
(120,500,000
|
)
|
||||
Equity transfer on October 3, 2016
|
|
47,138,249
|
|
|
(47,138,249
|
)
|
|
—
|
|
|
—
|
|
||||
Net income after September 30, 2016
|
|
16,158,742
|
|
|
7,613,893
|
|
|
9,475,805
|
|
|
33,248,440
|
|
||||
Cash distributions after September 30, 2016
|
|
(17,739,000
|
)
|
|
(8,358,500
|
)
|
|
(10,402,500
|
)
|
|
(36,500,000
|
)
|
||||
Members' capital at December 31, 2016
|
|
$
|
112,965,691
|
|
|
$
|
53,228,689
|
|
|
$
|
66,245,313
|
|
|
$
|
232,439,693
|
|
Net income prior to December 1, 2017
|
|
77,772,866
|
|
|
36,646,063
|
|
|
45,607,546
|
|
|
160,026,475
|
|
||||
Cash distributions prior to December 1, 2017
|
|
(64,152,000
|
)
|
|
(30,228,000
|
)
|
|
(37,620,000
|
)
|
|
(132,000,000
|
)
|
||||
Equity transfer on December 1, 2017
(1)
|
|
59,646,752
|
|
|
(59,646,752
|
)
|
|
—
|
|
|
—
|
|
||||
Net income after December 1, 2017
|
|
9,702,503
|
|
|
—
|
|
|
3,867,431
|
|
|
13,569,934
|
|
||||
Cash distributions after December 1, 2017
|
|
(31,460,000
|
)
|
|
—
|
|
|
(12,540,000
|
)
|
|
(44,000,000
|
)
|
||||
Members' capital at December 31, 2017
|
|
$
|
164,475,812
|
|
|
$
|
—
|
|
|
$
|
65,560,290
|
|
|
$
|
230,036,102
|
|
Impact of change in accounting principle
(3)
|
|
(6,888,196
|
)
|
|
—
|
|
|
(2,745,645
|
)
|
|
(9,633,841
|
)
|
||||
Net income
|
|
110,052,108
|
|
|
—
|
|
|
43,866,924
|
|
|
153,919,032
|
|
||||
Cash distributions
|
|
(119,262,000
|
)
|
|
—
|
|
|
(47,538,000
|
)
|
|
(166,800,000
|
)
|
||||
Members' capital at December 31, 2018
|
|
$
|
148,377,724
|
|
|
$
|
—
|
|
|
$
|
59,143,569
|
|
|
$
|
207,521,293
|
|
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|||||
Net income
|
$
|
153,919,032
|
|
|
$
|
173,596,409
|
|
|
$
|
146,775,690
|
|
Adjustments to reconcile net income to net cash
provided by operating activities
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
9,998,461
|
|
|
10,880,406
|
|
|
11,215,348
|
|
|||
Net (gain) from pipeline operations
|
(4,142,396
|
)
|
|
(691,635
|
)
|
|
(163,761
|
)
|
|||
Increase in deferred charges
|
8,742,574
|
|
|
—
|
|
|
—
|
|
|||
Bad debt expense
|
—
|
|
|
(83
|
)
|
|
(14,079
|
)
|
|||
|
|
|
|
|
|
||||||
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
||||||
(Increase) decrease in accounts receivable
|
(2,284,404
|
)
|
|
(143,481
|
)
|
|
271,166
|
|
|||
(Increase) decrease in allowance oil
|
(8,493
|
)
|
|
(687,193
|
)
|
|
326,630
|
|
|||
(Increase) in other assets
|
(2,221,159
|
)
|
|
(8,356
|
)
|
|
(15,648
|
)
|
|||
Increase (decrease) in accounts payable and accrued liabilities
|
275,166
|
|
|
(498,312
|
)
|
|
(1,367,213
|
)
|
|||
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
164,278,781
|
|
|
182,447,755
|
|
|
157,028,133
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|||||
Capital expenditures
|
(570,711
|
)
|
|
(444,414
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(570,711
|
)
|
|
(444,414
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|||||
Distributions to members
|
(166,800,000
|
)
|
|
(176,000,000
|
)
|
|
(157,000,000
|
)
|
|||
Net cash used in financing activities
|
(166,800,000
|
)
|
|
(176,000,000
|
)
|
|
(157,000,000
|
)
|
|||
|
|
|
|
|
|
||||||
(Decrease) increase in cash and cash equivalents
|
(3,091,930
|
)
|
|
6,003,341
|
|
|
28,133
|
|
|||
Cash and cash equivalents at the beginning of the period
|
23,295,156
|
|
|
17,291,815
|
|
|
17,263,682
|
|
|||
Cash and cash equivalents at the end of the period
|
$
|
20,203,226
|
|
|
$
|
23,295,156
|
|
|
$
|
17,291,815
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow disclosures
|
|
|
|
|
|
||||||
Change in accrued capital expenditures
|
$
|
(36,739
|
)
|
|
$
|
(571,978
|
)
|
|
$
|
—
|
|
($ in millions)
|
2018
|
|
2017
(1)
|
|
2016
(1)
|
||||||
Transportation services revenue - third parties
|
$
|
59.9
|
|
|
$
|
59.4
|
|
|
$
|
55.6
|
|
Transportation services revenue - related parties
|
164.3
|
|
|
181.8
|
|
|
145.3
|
|
|||
Total transportation services revenue
|
224.2
|
|
|
241.2
|
|
|
200.9
|
|
|||
|
|
|
|
|
|
||||||
Storage services revenue - third parties
|
2.3
|
|
|
4.8
|
|
|
8.0
|
|
|||
Storage services revenue - related parties
|
3.0
|
|
|
9.4
|
|
|
20.9
|
|
|||
Total storage services revenue
|
5.3
|
|
|
14.2
|
|
|
28.9
|
|
|||
|
|
|
|
|
|
||||||
Product revenue - related parties
|
11.8
|
|
|
—
|
|
|
—
|
|
|||
Total product revenue
(2)
|
11.8
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Total revenue
|
$
|
241.3
|
|
|
$
|
255.4
|
|
|
$
|
229.8
|
|
|
2018
|
||||||||||
Statement of Income
|
As Reported Under Topic 606
|
|
Amounts Without Adoption of Topic 606
|
|
Effect of Change Increase/(Decrease)
|
||||||
Revenue
|
|
|
|
|
|
||||||
Operating revenue - related party
|
$
|
167.3
|
|
|
$
|
178.3
|
|
|
$
|
(11.0
|
)
|
Operating revenue - third party
|
62.2
|
|
|
64.1
|
|
|
(1.9
|
)
|
|||
Product revenue - related party
|
11.8
|
|
|
—
|
|
|
11.8
|
|
|||
|
|
|
|
|
|
||||||
Costs and expenses
|
|
|
|
|
|
||||||
Operations
|
58.1
|
|
|
58.1
|
|
|
—
|
|
|||
Cost of product sold
|
11.1
|
|
|
—
|
|
|
11.1
|
|
|||
Net (gain) from pipeline operations
|
(4.1
|
)
|
|
(0.6
|
)
|
|
(3.5
|
)
|
|||
Net Income
|
$
|
153.9
|
|
|
$
|
162.6
|
|
|
$
|
(8.7
|
)
|
($ in millions)
|
January 1, 2018
|
|
December 31, 2018
|
||
Receivables from contract with customers - third parties
|
3.3
|
|
|
4.9
|
|
Receivables from contract with customers - related parties
|
15.7
|
|
|
15.2
|
|
Deferred revenue - related party
|
9.6
|
|
|
18.3
|
|
($ in millions)
|
December 31, 2017
|
|
Transition Adjustments
|
|
Additions
(1)
|
|
Reductions
|
|
December 31, 2018
|
|||||
Deferred revenue - related party
|
—
|
|
|
9.6
|
|
|
8.7
|
|
|
—
|
|
|
18.3
|
|
($ in millions)
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023 and beyond
|
||||||
Revenue expected to be recognized on long-term dedication and transportation agreements
|
395.0
|
|
|
39.5
|
|
|
39.5
|
|
|
39.5
|
|
|
39.5
|
|
|
237.0
|
|
|
|
December 31,
|
||||||||||||||||||
|
|
2018
|
|
|
2017
|
|
|
|
2016
|
|
|
|||||||||
Shipper A
(1)
|
|
$
|
128,332,363
|
|
55.2
|
%
|
|
$
|
132,326,693
|
|
|
51.8
|
%
|
|
$
|
124,024,204
|
|
|
54.0
|
%
|
Shipper B
(1)
|
|
51,013,830
|
|
21.9
|
%
|
|
58,925,621
|
|
|
23.1
|
%
|
|
42,222,619
|
|
|
18.4
|
%
|
|||
Shipper C
(2)
|
|
29,194,008
|
|
12.6
|
%
|
|
28,343,302
|
|
|
11.1
|
%
|
|
26,523,714
|
|
|
11.5
|
%
|
|
|
December 31,
|
||||||||||||||||||
|
|
2018
|
|
|
2017
|
|
|
|
2016
|
|
|
|||||||||
Shipper A
(1)
|
|
$
|
10,687,569
|
|
50.0
|
%
|
|
$
|
10,901,184
|
|
|
57.2
|
%
|
|
$
|
9,607,947
|
|
|
50.8
|
%
|
Shipper B
(1)
|
|
5,073,147
|
|
23.8
|
%
|
|
4,463,817
|
|
|
23.4
|
%
|
|
4,424,785
|
|
|
23.4
|
%
|
|||
Shipper C
(2)
|
|
2,098,392
|
|
9.8
|
%
|
|
1,174,310
|
|
|
6.2
|
%
|
|
1,887,923
|
|
|
10.0
|
%
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Rights-of-way
|
|
$
|
10,384,612
|
|
|
$
|
10,384,612
|
|
Buildings
|
|
5,670,551
|
|
|
4,494,443
|
|
||
Line pipe, equipment and other pipeline assets
|
|
283,952,441
|
|
|
283,939,925
|
|
||
Office, communication and data handling equipment
|
|
1,086,810
|
|
|
651,592
|
|
||
Construction work-in progress
|
|
—
|
|
|
1,016,392
|
|
||
|
|
301,094,414
|
|
|
300,486,964
|
|
||
Accumulated depreciation
|
|
(128,735,564
|
)
|
|
(119,492,479
|
)
|
||
Total property, plant and equipment, net
|
|
$
|
172,358,850
|
|
|
$
|
180,994,485
|
|
($ in millions)
|
|
Operating Leases for Platforms
(1)
|
|
Operating Leases for Caverns
|
|
Total
|
||||||
2019
|
|
$
|
3.0
|
|
|
$
|
1.7
|
|
|
$
|
4.7
|
|
2020
|
|
2.0
|
|
|
1.7
|
|
|
3.7
|
|
|||
2021
|
|
—
|
|
|
1.7
|
|
|
1.7
|
|
|||
2022
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Thereafter
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total future minimum lease payments
|
|
$
|
5.0
|
|
|
$
|
5.1
|
|
|
$
|
10.1
|
|
Report of Independent Auditors
..................................................................................................................................................
|
|
Financial Statements
|
|
Balance Sheets
.............................................................................................................................................................................
|
|
Statements of Income
..................................................................................................................................................................
|
|
Statements of Changes in Members’ Capital
...............................................................................................................................
|
|
Statements of Cash Flows
...........................................................................................................................................................
|
|
Notes to Financial Statements
.....................................................................................................................................................
|
|
|
December 31
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In Thousands)
|
||||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
2,970
|
|
|
$
|
4,774
|
|
Accounts receivable
|
|
|
|
|
||||
Related parties
|
|
3,352
|
|
|
3,221
|
|
||
Third parties
|
|
755
|
|
|
995
|
|
||
Total current assets
|
|
7,077
|
|
|
8,990
|
|
||
|
|
|
|
|
||||
Pipelines and equipment, net
|
|
214,471
|
|
|
219,401
|
|
||
Total assets
|
|
$
|
221,548
|
|
|
$
|
228,391
|
|
|
|
|
|
|
||||
Liabilities and members' capital
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Payable to related parties
|
|
$
|
344
|
|
|
$
|
324
|
|
Accounts payable and accrued liabilities
|
|
711
|
|
|
486
|
|
||
Total current liabilities
|
|
1,055
|
|
|
810
|
|
||
|
|
|
|
|
||||
Asset retirement obligation
|
|
7,297
|
|
|
6,892
|
|
||
Members' Capital
|
|
213,196
|
|
|
220,689
|
|
||
Total liabilities and members' capital
|
|
$
|
221,548
|
|
|
$
|
228,391
|
|
|
|
Year Ended December 31
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In Thousands)
|
||||||
Revenue
|
|
|
|
|
||||
Transportation revenue
|
|
|
|
|
||||
Related parties
|
|
$
|
35,816
|
|
|
$
|
36,567
|
|
Third parties
|
|
9,258
|
|
|
11,332
|
|
||
Other income
|
|
75
|
|
|
66
|
|
||
|
|
45,149
|
|
|
47,965
|
|
||
|
|
|
|
|
||||
Costs and expenses
|
|
|
|
|
||||
Operating and maintenance expenses
|
|
8,306
|
|
|
4,519
|
|
||
General and administrative expenses
|
|
1,578
|
|
|
1,474
|
|
||
Depreciation and amortization
|
|
4,930
|
|
|
5,020
|
|
||
Property taxes
|
|
—
|
|
|
18
|
|
||
Accretion expense - asset retirement obligation
|
|
405
|
|
|
382
|
|
||
Total costs and expenses
|
|
15,219
|
|
|
11,413
|
|
||
Net income
|
|
$
|
29,930
|
|
|
$
|
36,552
|
|
Members' capital at January 1, 2017
|
|
$
|
229,637
|
|
Members distributions
|
|
(45,500
|
)
|
|
Net income
|
|
36,552
|
|
|
Members' capital at December 31, 2017
|
|
220,689
|
|
|
Members distributions
|
|
(37,423
|
)
|
|
Net income
|
|
29,930
|
|
|
Members' capital at December 31, 2018
|
|
$
|
213,196
|
|
|
|
Year Ended December 31
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In Thousands)
|
||||||
Cash flows from operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
29,930
|
|
|
$
|
36,552
|
|
Adjustments to reconcile net income to net
cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
4,930
|
|
|
5,020
|
|
||
Accretion expense - asset retirement obligation
|
|
405
|
|
|
382
|
|
||
Changes on working capital:
|
|
|
|
|
||||
(Increase) decrease in accounts receivable - affiliates
|
|
(131
|
)
|
|
415
|
|
||
Decrease (increase) in accounts receivable - third parties
|
|
240
|
|
|
(177
|
)
|
||
Increase (decrease) in accounts payable - affiliates
|
|
20
|
|
|
(4,893
|
)
|
||
Increase (decrease) in accounts payable and accrued liabilities
|
|
225
|
|
|
(895
|
)
|
||
Decrease in deferred charges
|
|
—
|
|
|
5
|
|
||
Net cash provided by operating activities
|
|
35,619
|
|
|
36,409
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
||||
Capital expenditures
|
|
—
|
|
|
(10
|
)
|
||
Cash used in investing activities
|
|
—
|
|
|
(10
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
||||
Members distributions
|
|
(37,423
|
)
|
|
(45,500
|
)
|
||
Cash used in financing activities
|
|
(37,423
|
)
|
|
(45,500
|
)
|
||
|
|
|
|
|
||||
Net (decrease) in cash and cash equivalents
|
|
(1,804
|
)
|
|
(9,101
|
)
|
||
Cash and cash equivalents at beginning of year
|
|
4,774
|
|
|
13,875
|
|
||
Cash and cash equivalents at end of year
|
|
$
|
2,970
|
|
|
$
|
4,774
|
|
|
|
Year Ended December 31
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In Thousands)
|
||||||
Customer A (affiliate)
|
|
$
|
20,513
|
|
|
$
|
20,956
|
|
Customer B (affiliate)
|
|
13,339
|
|
|
13,469
|
|
||
Customer C (third party)
|
|
5,285
|
|
|
6,122
|
|
|
|
December 31
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In Thousands)
|
||||||
Customer A (affiliate)
|
|
$
|
1,911
|
|
|
$
|
1,826
|
|
Customer B (affiliate)
|
|
1,246
|
|
|
1,155
|
|
||
Customer C (third party)
|
|
490
|
|
|
543
|
|
|
|
December 31
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In Thousands)
|
||||||
Transportation assets
|
|
$
|
307,292
|
|
|
$
|
307,292
|
|
Line fill inventory
|
|
11,513
|
|
|
11,513
|
|
||
Deepwater pipeline repair equipment
|
|
3,328
|
|
|
3,328
|
|
||
Assets under construction
|
|
2,518
|
|
|
2,518
|
|
||
|
|
324,651
|
|
|
324,651
|
|
||
Less accumulated depreciation
|
|
(110,180
|
)
|
|
(105,250
|
)
|
||
Pipelines and equipment, net
|
|
$
|
214,471
|
|
|
$
|
219,401
|
|
Balance at January 1, 2017
|
$
|
6,510
|
|
Accretion expense
|
382
|
|
|
Balance at December 31, 2017
|
6,892
|
|
|
Accretion expense
|
405
|
|
|
Balance at December 31, 2018
|
$
|
7,297
|
|
Report of Independent Auditors
..................................................................................................................................................
|
|
Financial Statements
|
|
Balance Sheets
.............................................................................................................................................................................
|
|
Statements of Income
..................................................................................................................................................................
|
|
Statements of Changes in Members’ Capital
...............................................................................................................................
|
|
Statements of Cash Flows
...........................................................................................................................................................
|
|
Notes to Financial Statements
.....................................................................................................................................................
|
|
|
December 31
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In Thousands)
|
||||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
3,784
|
|
|
$
|
4,455
|
|
Accounts receivable:
|
|
|
|
|
||||
Related parties
|
|
1,984
|
|
|
2,557
|
|
||
Third parties
|
|
318
|
|
|
277
|
|
||
Total current assets
|
|
6,086
|
|
|
7,289
|
|
||
|
|
|
|
|
||||
Pipelines and equipment, net
|
|
226,046
|
|
|
231,616
|
|
||
Total assets
|
|
$
|
232,132
|
|
|
$
|
238,905
|
|
|
|
|
|
|
||||
Liabilities and members' capital
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Payable to related parties
|
|
$
|
173
|
|
|
$
|
105
|
|
Accounts payable and accrued liabilities
|
|
618
|
|
|
302
|
|
||
Total current liabilities
|
|
791
|
|
|
407
|
|
||
|
|
|
|
|
||||
Asset retirement obligation
|
|
5,774
|
|
|
5,454
|
|
||
Members' capital
|
|
225,567
|
|
|
233,044
|
|
||
Total liabilities and members' capital
|
|
$
|
232,132
|
|
|
$
|
238,905
|
|
|
|
Year Ended December 31
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In Thousands)
|
||||||
Revenue
|
|
|
|
|
||||
Transportation revenue
|
|
|
|
|
||||
Related parties
|
|
$
|
20,779
|
|
|
$
|
21,040
|
|
Third parties
|
|
2,262
|
|
|
2,633
|
|
||
Interest income
|
|
61
|
|
|
48
|
|
||
|
|
23,102
|
|
|
23,721
|
|
||
|
|
|
|
|
||||
Costs and expenses
|
|
|
|
|
||||
Operating and maintenance expenses
|
|
3,741
|
|
|
2,041
|
|
||
General and administrative expenses
|
|
1,148
|
|
|
1,121
|
|
||
Depreciation and amortization
|
|
5,570
|
|
|
5,671
|
|
||
Property taxes
|
|
—
|
|
|
21
|
|
||
Accretion expense - asset retirement obligation
|
|
320
|
|
|
303
|
|
||
Total costs and expenses
|
|
10,779
|
|
|
9,157
|
|
||
Net income
|
|
$
|
12,323
|
|
|
$
|
14,564
|
|
Members' capital at January 1, 2017
|
|
$
|
238,730
|
|
Member distributions
|
|
(20,250
|
)
|
|
Net income
|
|
14,564
|
|
|
Members' capital at December 31, 2017
|
|
233,044
|
|
|
Member distributions
|
|
(19,800
|
)
|
|
Net income
|
|
12,323
|
|
|
Members' capital at December 31, 2018
|
|
$
|
225,567
|
|
|
|
Year Ended December 31
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In Thousands)
|
||||||
Cash flows from operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
12,323
|
|
|
$
|
14,564
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
5,570
|
|
|
5,671
|
|
||
Accretion expense - asset retirement obligation
|
|
320
|
|
|
303
|
|
||
Changes on working capital:
|
|
|
|
|
||||
Decrease (increase) in accounts receivable - affiliates
|
|
573
|
|
|
(537
|
)
|
||
(Increase) decrease in accounts receivable - third parties
|
|
(41
|
)
|
|
150
|
|
||
Increase (decrease) in accounts payable - affiliates
|
|
68
|
|
|
(2,129
|
)
|
||
Increase in accounts payable and accrued liabilities
|
|
316
|
|
|
288
|
|
||
Net cash provided by operating activities
|
|
19,129
|
|
|
18,310
|
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
||||
Member distributions
|
|
(19,800
|
)
|
|
(20,250
|
)
|
||
Net cash used in financing activities
|
|
(19,800
|
)
|
|
(20,250
|
)
|
||
|
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
|
(671
|
)
|
|
(1,940
|
)
|
||
Cash and cash equivalents at the beginning of year
|
|
4,455
|
|
|
6,395
|
|
||
Cash and cash equivalents at the end of year
|
|
$
|
3,784
|
|
|
$
|
4,455
|
|
|
|
December 31
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In Thousands)
|
||||||
Customer A (affiliate)
|
|
$
|
11,456
|
|
|
$
|
11,298
|
|
Customer B (affiliate)
|
|
8,700
|
|
|
9,117
|
|
|
|
December 31
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In Thousands)
|
||||||
Customer A (affiliate)
|
|
$
|
1,082
|
|
|
$
|
970
|
|
Customer B (affiliate)
|
|
831
|
|
|
1,523
|
|
|
|
December 31
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In Thousands)
|
||||||
Transportation assets
|
|
$
|
335,261
|
|
|
$
|
335,261
|
|
Line fill inventory
|
|
724
|
|
|
724
|
|
||
Deepwater pipeline repair equipment
|
|
3,571
|
|
|
3,571
|
|
||
|
|
339,556
|
|
|
339,556
|
|
||
Less accumulated depreciation
|
|
(113,510
|
)
|
|
(107,940
|
)
|
||
Pipelines and equipment, net
|
|
$
|
226,046
|
|
|
$
|
231,616
|
|
Balance at January 1, 2017
|
$
|
5,151
|
|
Accretion expense
|
303
|
|
|
Balance at December 31, 2017
|
5,454
|
|
|
Accretion expense
|
320
|
|
|
Balance at December 31, 2018
|
$
|
5,774
|
|