AMERICAN MIDSTREAM PARTNERS, LP, 10-Q filed on 5/15/2017
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2017
May 5, 2017
Document Information [Line Items]
 
 
Entity Registrant Name
American Midstream Partners, LP 
 
Entity Central Index Key
0001513965 
 
Document Type
10-Q 
 
Document Period End Date
Mar. 31, 2017 
 
Amendment Flag
false 
 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q1 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Accelerated Filer 
 
Entity Common Stock, Shares Outstanding (in shares)
 
51,730,964 
Series A [Member]
 
 
Document Information [Line Items]
 
 
Entity Common Stock, Shares Outstanding (in shares)
 
10,266,642 
Series C [Member]
 
 
Document Information [Line Items]
 
 
Entity Common Stock, Shares Outstanding (in shares)
 
8,792,205 
Series D [Member]
 
 
Document Information [Line Items]
 
 
Entity Common Stock, Shares Outstanding (in shares)
 
2,333,333 
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Current assets
 
 
Cash and cash equivalents
$ 16,919 
$ 5,666 
Restricted cash
22,294 
0 
Accounts receivable, net of allowance for doubtful accounts of $2,480 and $1,871, respectively
24,770 
27,769 
Unbilled revenue
57,865 
55,646 
Inventory
9,614 
6,776 
Other current assets
28,012 
27,667 
Total current assets
159,474 
123,524 
Risk management assets - long term
9,624 
10,664 
Property, plant and equipment, net
1,142,302 
1,145,003 
Goodwill
217,498 
217,498 
Restricted cash- long term
5,037 
323,564 
Intangible assets, net
218,015 
225,283 
Investment in unconsolidated affiliates
284,896 
291,988 
Other assets, net
9,397 
11,797 
Total assets
2,046,243 
2,349,321 
Current liabilities
 
 
Accounts payable
37,833 
45,278 
Accrued gas purchases
10,294 
7,891 
Accrued expenses and other current liabilities
80,887 
81,284 
Current portion of debt
3,223 
5,485 
Total current liabilities
132,237 
139,938 
Asset retirement obligations
44,809 
44,363 
Other liabilities
2,250 
2,030 
Revolving credit agreement
644,842 
888,250 
Deferred tax liability
8,883 
8,205 
Total liabilities
1,181,116 
1,430,074 
Commitments and contingencies
   
   
Convertible preferred units
336,271 
334,090 
Equity and partners’ capital
 
 
General Partner interests (688 thousand and 680 thousand units issued and outstanding as of March 31, 2017 and December 31, 2016, respectively)
(47,055)
(47,645)
Accumulated other comprehensive income (loss)
(22)
(40)
Total partners’ capital
511,386 
568,402 
Noncontrolling interests
17,470 
16,755 
Total equity and partners’ capital
528,856 
585,157 
Total liabilities, equity and partners’ capital
2,046,243 
2,349,321 
Limited Partner Common Units [Member]
 
 
Equity and partners’ capital
 
 
Limited Partner interests (51,631 thousand and 51,351 thousand units issued and outstanding as of March 31, 2017 and December 31, 2016, respectively)
558,463 
616,087 
Senior Notes [Member] |
3.77% Senior Notes [Member]
 
 
Current liabilities
 
 
Senior notes
55,895 
55,979 
Senior Notes [Member] |
8.50% Senior Notes [Member]
 
 
Current liabilities
 
 
Senior notes
$ 292,200 
$ 291,309 
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Allowance for doubtful accounts receivable
$ 2,480 
$ 1,871 
General partner interest units, outstanding (in shares)
688,000 
680,000 
Preferred, units, outstanding (in shares)
51,631,000 
51,351,000 
Partnership Interest [Member]
 
 
General partner interest, units issued (in shares)
688,000 
680,000 
General partner interest units, outstanding (in shares)
688,000 
680,000 
Partnership Interest [Member] |
Limited Partner Common Units [Member]
 
 
Preferred, units, issued (in shares)
51,631,000 
51,351,000 
Preferred, units, outstanding (in shares)
51,631,000 
51,351,000 
Condensed Consolidated Statements of Operations (Unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Depreciation, amortization and accretion expense
$ 29,351 
$ 25,252 
Revenue:
 
 
Commodity sales
158,501 
107,570 
Services
41,388 
36,044 
Gain (loss) on commodity derivatives, net
(257)
(238)
Total revenue
199,632 
143,376 
Operating expenses:
 
 
Costs of sales
132,785 
73,938 
Direct operating expenses
30,088 
30,575 
Corporate expenses
32,844 
21,101 
Depreciation, amortization and accretion expense
29,351 
25,041 
(Gain) loss on sale of assets, net
(228)
1,122 
Total operating expenses
224,840 
151,777 
Operating loss
(25,208)
(8,401)
Other income (expense), net
 
 
Interest expense
(17,966)
(8,302)
Other income (expense)
14 
31 
Earnings in unconsolidated affiliates
15,402 
7,343 
Loss from continuing operations before taxes
(27,758)
(9,329)
Income tax expense
(1,123)
(735)
Loss from continuing operations
(28,881)
(10,064)
Loss from discontinued operations, net of tax
0 
(539)
Net loss
(28,881)
(10,603)
Less: Net income (loss) attributable to noncontrolling interests
1,303 
(3)
Net loss attributable to the Partnership
(30,184)
(10,600)
Distribution declared per common unit (in usd per share)
$ 0.4125 1
$ 0.4725 1
Limited Partners’ net loss per common unit, basic and diluted:
 
 
Loss from continuing operations (in usd per share)
$ (0.75)
$ (0.32)
Loss from discontinued operations (in usd per share)
$ 0.00 
$ (0.01)
Net loss (in usd per share)
$ (0.75)
$ (0.33)
Weighted average number of common units outstanding:
 
 
Weighted average number of common units outstanding: basic and diluted (shares)
51,451 
50,925 
General Partner [Member]
 
 
Other income (expense), net
 
 
Net loss
(420)
(97)
General Partner’s interest in net loss
(420)
(97)
Limited Partner [Member]
 
 
Other income (expense), net
 
 
Net loss
(29,764)
(10,503)
Limited Partners’ interest in net loss
$ (29,764)
$ (10,503)
[1] udited, in thousands, except per unit amounts) Three months ended March 31, 2017 2016Revenue: Commodity sales$158,501 $107,570Services41,388 36,044 Gain (loss) on commodity derivatives, net(257) (238)Total revenue199,632143,376Operating expenses: Costs of sales132,785 73,938Direct operating expenses30,088 30,575Corporate expenses32,844 21,101Depreciation, amortization and accretion expense29,351 25,041(Gain) loss on sale of assets, net(228) 1,122Total operating expenses224,840151,777Operating loss(25,208)(8,401)Other income (expense), net Interest expense(17,966) (8,302)Other income (expense)14 31Earnings in unconsolidated affiliates15,402 7,343Loss from continuing operations before taxes(27,758)(9,329)Income tax expense(1,123) (735)Loss from continuing operations(28,881)(10,064)Loss from discontinued operations, net of tax— (539)Net loss(28,881)(10,603)Less: Net income (loss) attributable to noncontrolling interests1,303 (3)Net loss attributable to the Partnership$(30,184)$(10,600) General Partner’s interest in net loss$(420) $(97)Limited Partners’ interest in net loss$(29,764) $(10,503) Distribution declared per common unit (1)$0.4125 $0.4725Limited Partners’ net loss per common unit (See Note 14): Basic and diluted: Loss from continuing operations$(0.75) $(0.32)Loss from discontinued operations— (0.01)Net loss$(0.75)$(0.33)Weighted average number of common units outstanding:Basic and diluted51,451 50,925(1) Declared and paid
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
 
 
Net loss
$ (28,881)
$ (10,603)
Unrealized gain (loss) related to postretirement benefit plan
18 
14 
Comprehensive loss
(28,863)
(10,589)
Less: Comprehensive income (loss) attributable to noncontrolling interests
1,303 
(3)
Comprehensive loss attributable to the Partnership
$ (30,166)
$ (10,586)
Condensed Consolidated Statements of Changes in Partners' Capital (Unaudited) (USD $)
In Thousands, unless otherwise specified
Total
Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Noncontrolling Interest [Member]
Series B [Member]
General Partner [Member]
Limited Partner [Member]
Partners' Capital at Dec. 31, 2015
 
$ 739,930 
$ 40 
$ 12,111 
$ 33,593 
$ (47,091)
$ 753,388 
Increase (Decrease) in Temporary Equity [Roll Forward]
 
 
 
 
 
 
 
Net income (loss)
(10,603)
(10,600)
 
(3)
 
(97)
(10,503)
Issuance of common units, net of offering costs
 
(104)
 
 
 
 
(104)
Cancellation of escrow units
(6,817)
(6,817)
 
 
 
 
(6,817)
Conversion of Series B units
 
0 
 
 
(33,593)
 
33,593 
Contributions
2,500 
2,592 
 
 
 
92 
2,500 
Distributions
 
(33,499)
 
 
 
(2,087)
(31,412)
Contributions from noncontrolling interest owners
 
 
 
85 
 
 
 
LTIP vesting
 
0 
 
 
 
(2,041)
2,041 
Tax netting repurchase
150 
(150)
 
 
 
 
(150)
Equity compensation expense
 
1,643 
 
 
 
1,084 
559 
Other comprehensive income
 
14 
14 
 
 
 
 
Addition of Mesquite NCI
 
 
 
(210)
 
 
 
Partners' Capital at Mar. 31, 2016
 
693,009 
54 
12,403 
0 
(50,140)
743,095 
Partners' Capital at Dec. 31, 2016
568,402 
568,402 
(40)
 
0 
(47,645)
616,087 
Increase (Decrease) in Temporary Equity [Roll Forward]
 
 
 
 
 
 
 
Net income (loss)
(28,881)
(30,184)
 
1,303 
 
(420)
(29,764)
Issuance of common units, net of offering costs
 
(72)
 
 
 
 
 
Cancellation of escrow units
0 
 
 
 
 
 
 
Contributions
4,000 
4,123 
 
0 
 
123 
4,000 
Distributions
 
(33,967)
 
 
 
(282)
(33,685)
Contributions from noncontrolling interest owners
 
 
 
280 
 
 
 
Distributions to noncontrolling interests owners
 
 
 
(868)
 
 
 
LTIP vesting
 
 
 
 
 
(2,135)
2,135 
Tax netting repurchase
971 
(971)
 
 
 
 
(971)
Equity compensation expense
 
4,037 
 
0 
 
3,304 
733 
Other comprehensive income
 
18 
18 
 
 
 
 
Partners' Capital at Mar. 31, 2017
$ 511,386 
$ 511,386 
$ (22)
$ 17,470 
$ 0 
$ (47,055)
$ 558,463 
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Cash flows from operating activities
 
 
Net loss
$ (28,881)
$ (10,603)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
Depreciation, amortization and accretion expense
29,351 
25,252 
Amortization of deferred financing costs
1,253 
702 
Amortization of weather derivative premium
257 
219 
Unrealized loss on derivatives contracts, net
1,273 
1,382 
Non-cash compensation expense
4,037 
1,643 
(Gain) loss on sale of assets, net
(228)
1,008 
Corporate overhead support
4,000 
2,500 
Other non-cash items
1,965 
41 
Earnings in unconsolidated affiliates
(15,402)
(7,343)
Distributions from unconsolidated affiliates
15,402 
7,343 
Deferred tax expense
678 
294 
Allowance for bad debts
830 
(6)
Changes in operating assets and liabilities, net of effects of assets acquired and liabilities assumed:
 
 
Accounts receivable
1,285 
340 
Inventory
(2,626)
(5,592)
Unbilled revenue
(1,019)
18,833 
Other current assets
3,114 
6,720 
Other assets, net
168 
226 
Restricted cash
(3,135)
0 
Accounts payable
(9,716)
(10,909)
Accrued gas purchases
2,403 
(749)
Accrued expenses and other current liabilities
994 
(1,359)
Asset retirement obligations
(41)
0 
Other liabilities
(195)
(674)
Net cash provided by operating activities
5,767 
29,268 
Cash flows from investing activities
 
 
Additions to plant, property and equipment
(20,221)
(26,319)
Proceeds from disposals of plant, property and equipment
51 
11,126 
Insurance proceeds from involuntary conversion of property, plant and equipment
150 
0 
Investment in unconsolidated affiliates
0 
(3,546)
Distributions from unconsolidated affiliates, return of capital
7,092 
6,172 
Restricted cash
299,313 
0 
Net cash provided by (used in) investing activities
286,385 
(12,567)
Cash flows from financing activities
 
 
Proceeds from issuance of common units to public, net of offering costs
(72)
(104)
Contributions
123 
92 
Distributions
(32,198)
(29,028)
Contribution from noncontrolling interest owners
280 
85 
Distributions to noncontrolling interests owners
(868)
0 
LTIP tax netting unit repurchase
(971)
(150)
Payment of financing costs
(1,402)
(323)
Payments on other debt
(2,363)
(844)
Borrowings on other debt
0 
867 
Payments on credit agreement
(325,908)
(59,450)
Borrowings on credit agreement
82,500 
71,750 
Other
(20)
(44)
Net cash used in financing activities
(280,899)
(17,149)
Net increase (decrease) in cash and cash equivalents
11,253 
(448)
Cash and cash equivalents
 
 
Beginning of period
5,666 
1,987 
End of period
$ 16,919 
$ 1,539 
Organization, Basis of Presentation and Summary of Significant Accounting Policies
Organization, Basis of Presentation and Summary of Significant Accounting Policies
Organization, Basis of Presentation and Summary of Significant Accounting Policies

General

American Midstream Partners, LP (the “Partnership”, “we”, “us”, or “our”) is a growth-oriented Delaware limited partnership that was formed on August 20, 2009 to own, operate, develop and acquire a diversified portfolio of midstream energy assets. The Partnership’s general partner, American Midstream GP, LLC (the “General Partner”), is 77% owned by High Point Infrastructure Partners, LLC (“HPIP”) and 23% owned by Magnolia Infrastructure Holdings, LLC, both of which are affiliates of ArcLight Capital Partners, LLC ("ArcLight"). Our capital accounts consist of notional General Partner units and units representing limited partner interests.

Merger with JPE

On March 8, 2017, we completed the acquisition of JP Energy Partners LP (“JPE”), an entity controlled by ArcLight affiliates, in a unit-for-unit merger (“JPE Acquisition”). In connection with the transaction, we issued approximately 20.2 million common units to holders of the JPE common and subordinated units, including 9.8 million common units to ArcLight affiliates. In connection with the completion of the Acquisition, we entered into a supplemental indenture pursuant to which the JPE Entities jointly and severally, fully and unconditionally, guarantee the 8.50% Senior Notes.

As both we and JPE were controlled by ArcLight affiliates, the acquisition represents a transaction among entities under common control. Although we are the legal acquirer, JPE was considered the acquirer for accounting purposes as ArcLight obtained control of JPE prior to obtaining control of us on April 15, 2013. As a result, we adjusted our historical financial statements to reflect ArcLight’s acquisition cost basis back to April 15, 2013. In addition, the accompanying financial statements and related notes have been retrospectively adjusted to include the historical results of JPE prior to the effective date of the JPE Acquisition. The accompanying financial statements and related notes present the combined financial position, results of operations, cash flows and equity of JPE at historical cost.

Nature of business

We provide critical midstream infrastructure that links producers of natural gas, crude oil, NGLs, condensate and specialty chemicals to numerous intermediate and end-use markets. Through our six reportable segments, (1) gas gathering and processing services, (2) liquids pipelines and services, (3) natural gas transportation services, (4) offshore pipelines and services, (5) terminalling services and (6) propane marketing services, we engage in the business of gathering, treating, processing, and transporting natural gas; gathering, transporting, storing, treating and fractionating NGLs; gathering, storing and transporting crude oil and condensates; storing specialty chemical products; and distributing and selling propane and refined products. Most of our cash flow is generated from fee-based and fixed-margin compensation for gathering, processing, transporting and treating natural gas and crude oil, firm capacity reservation charges, interruptible transportation charges, guaranteed firm storage contracts, throughput fees and other optional charges associated with ancillary services.

Our primary assets are strategically located in some of the most prolific onshore and offshore producing regions and key demand markets in the United States. Our gathering and processing assets are primarily located in (i) the Permian Basin of West Texas, (ii) the Cotton Valley/Haynesville Shale of East Texas, (iii) the Eagle Ford Shale of South Texas, (iv) the Bakken Shale of North Dakota, and (v) offshore in the Gulf of Mexico. Our transmission and terminal assets are in key demand markets in Oklahoma, Alabama, Arkansas, Louisiana, Mississippi and Tennessee and in the Port of New Orleans in Louisiana and the Port of Brunswick in Georgia. Our propane marketing services include commercial and retail operations across 46 of the lower 48 states.

Basis of presentation

The unaudited financial information included in this Form 10-Q has been prepared on the same basis as the audited consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2016, except that the consolidated financial statements have been retrospectively adjusted to reflect the consolidation of JPE, as discussed above. The results of operations for the three months ended March 31, 2017 is not necessarily indicative of results expected for the full year. In the opinion of our management, such financial information reflects all adjustments necessary for a fair statement of the financial position and the results of operations for such interim periods in accordance with GAAP. All such adjustments are of a normal recurring nature. All intercompany items and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC.

Transactions between entities under common control
 
We may enter into transactions with ArcLight affiliates whereby we receive midstream assets or other businesses in exchange for cash or Partnership equity. We account for the net assets acquired at the affiliate's historical cost basis as the transactions are between entities under common control. In certain cases, our historical financial statements will be revised to include the results attributable to the assets acquired from the later of June 2011 (the date Arclight affiliates obtained control of JPE) or the date the ArcLight affiliate obtained control of the assets acquired.

Use of estimates

When preparing consolidated financial statements in conformity with GAAP, management must make estimates and assumptions based on information available at the time. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosures of contingent assets and liabilities as of the date of the financial statements. Estimates and assumptions are based on information available at the time such estimates and assumptions are made. Adjustments made with respect to the use of these estimates and assumptions often relate to information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements. Estimates and assumptions are used in, among other things, i) estimating unbilled revenues, product purchases and operating and general and administrative costs, ii) developing fair value assumptions, including estimates of future cash flows and discount rates, iii) analyzing long-lived assets, goodwill and intangible assets for possible impairment, iv) estimating the useful lives of assets and v) determining amounts to accrue for contingencies, guarantees and indemnifications. Actual results, therefore, could differ materially from estimated amounts.

Cash, cash equivalents and restricted cash

We consider all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value because of the short term to maturity of these investments.

From time to time we are required to maintain cash in separate accounts the use of which is restricted by the terms of our debt agreements, asset retirement obligations, contracted arrangements and management restrictions. Such amounts are included in Restricted cash in our condensed consolidated balance sheets.

Allowance for doubtful accounts

We establish provisions for losses on accounts receivable when we determine that we will not collect all or part of an outstanding balance. Collectability is reviewed regularly and an allowance is established or adjusted, as necessary, using the specific identification method. As of March 31, 2017 and December 31, 2016, we recorded allowances for doubtful accounts of $2.5 million and $1.9 million, respectively.

Investment in unconsolidated affiliates

We hold membership interests in entities that own and operate natural gas pipeline systems and NGL and crude oil pipelines in and around Louisiana, Alabama, Mississippi and the Gulf of Mexico. While we have significant influence over these entities, we do not control them and therefore, they are accounted for using the equity method and are reported in Investment in unconsolidated affiliates in the condensed consolidated balance sheets. We evaluate the recoverability of these investments on a regular basis and recognize impairment write downs if we determine a loss in value represents an other than temporary decline.

Revenue recognition

We recognize revenue from the sale of commodities (e.g., natural gas, crude oil, NGLs, refined products or condensate) as well as from the provision of gathering, processing, transportation or storage services when all of the following criteria are met: i) persuasive evidence of an exchange arrangement exists, ii) delivery has occurred or services have been rendered, iii) the price is fixed or determinable, and iv) collectability is reasonably assured. We recognize revenue from the sale of commodities and the related cost of product sold on a gross basis for those transactions where we act as the principal and take title to commodities that are purchased for resale.

Revenue-related taxes collected from customers and remitted to taxing authorities, principally sales taxes, are presented on a net basis within the consolidated statements of operations.

New Accounting Pronouncements

Accounting Standards Issued Not Yet Adopted

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, which amends the existing accounting guidance for revenue recognition. The update requires an entity to recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2015-14 was subsequently issued and deferred the effective date to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that period. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal Versus Agent Considerations, as further clarification on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing as further clarification on identifying performance obligations and the licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, as clarifying guidance on specific narrow scope improvements and practical expedients. We are in the process of reviewing our various customer arrangements in order to determine the impact that these updates will have on our consolidated financial statements and related disclosures. We have engaged a third-party consultant to assist with our review and are still in the process of evaluating the method of adoption for transitioning to the new standard.

In February 2016, the FASB issued ASU No. 2016-02 (Topic 842) "Leases" which supersedes the lease recognition requirements in Accounting Standards Codification Topic 840, "Leases". Under ASU No. 2016-02 lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. ASU No. 2016-02 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, and there are certain optional practical expedients that an entity may elect to apply. Full retrospective application is prohibited and early adoption by public entities is permitted. Based upon our evaluation to date, we anticipate that the adoption of ASU 2016-02 will have a material effect on our consolidated financial statements as we will be required to reflect our various lease obligations and associated asset use rights on our consolidated balance sheets. The adoption may also impact our debt covenant compliance and may require us to modify or replace certain of our existing information systems. We have not yet determined the timing or manner in which we will implement the updated guidance.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 320): Classification of Cash Receipts and Cash Payments”, which addresses eight specific cash flow issues with the objective of reducing the existing diversity of presentation and classification in the statement of cash flows. ASU No. 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal periods. Early adoption is permitted, but only if all aspects are adopted in the same period. We are currently evaluating the impact this update will have on our consolidated statements of cash flows and related disclosures.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”, which aims to improve the disclosure of the change during the period in total cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts on the statement of cash flows. The update is effective beginning first quarter of 2018. Early adoption is permitted, but it must occur in the first interim period. Any adjustments required in early adoption of this update should be reflected as of the beginning of the fiscal year that includes the interim period and should be applied using a retrospective transition method to each period. We are currently evaluating the impact that this update will have on our consolidated statement of cash flows and related disclosures.

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” The guidance provides criteria for use in determining when to conclude a “set” (as defined in the original guidance) being acquired or disposed in a transaction is not a business. Where the criteria are not met, more stringent screening has been provided to define a set as a business without an output, as more narrowly defined within the guidance. ASU No. 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments should be applied prospectively on or after the effective date. Early adoption is permitted. The adoption of ASU 2017-01 is not expected to have a material impact on our consolidated financial statements and related disclosures associated with acquisitions subsequent to the effective date.
In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, in which the guidance on testing for goodwill was updated by the elimination of Step 2 in the determination on whether goodwill should be considered impaired. The annual and/or interim assessments are still required to be completed. Further, the guidance eliminates the requirement to assess reporting units with zero or negative carrying values, however, the carrying values for all reporting units must be disclosed. ASU No. 2017-04 is effective for annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the impact this update will have on our consolidated financial statements and related disclosures.
Acquisitions
Acquisitions
Acquisitions

JP Energy Partners LP

On March 8, 2017, we completed the merger of JPE, an entity controlled by ArcLight affiliates, in a unit-for-unit merger. In connection with the transaction, each JPE common or subordinated unit held by investors not affiliated with ArcLight was converted into the right to receive 0.5775 of a Partnership common unit, and each JPE common or subordinated unit held by ArcLight affiliates was converted into the right to receive 0.5225 of a Partnership common unit. We issued a total of 20.2 million of common units to complete the acquisition, including 9.8 million common units to ArcLight affiliates.

As both we and JPE were controlled by ArcLight affiliates, the acquisition represents a transaction among entities under common control and will be accounted for as a common control transaction. Although we are the legal acquirer, JPE is considered to be the acquirer for accounting purposes as ArcLight obtained control of JPE prior to obtaining control of the Partnership on April 15, 2013. As a result, JPE will record the acquisition of the Partnership at ArcLight’s historical cost basis.

JPE owns, operates and develops a diversified portfolio of midstream energy assets with three business segments (i) crude oil pipelines and storage, (ii) refined products terminals and storage and (iii) NGL distribution and sales, which together provide midstream infrastructure solutions for the growing supply of crude oil, refined products and NGLs, in the United States.
Inventory (Notes)
Inventory
Inventory

Inventory consists of the following as of March 31, 2017 and December 31, 2016 (in thousands):
 
 
March 31, 2017
 
December 31, 2016
Crude oil
 
$
3,969

 
$
1,216

NGLs
 
3,505

 
3,482

Refined products
 
439

 
291

Materials, supplies and equipment
 
1,701

 
1,787

Total inventory
 
$
9,614

 
$
6,776

Other Current Assets
Other Current Assets
Other Current Assets

Other current assets consist of the following (in thousands):
 
March 31, 2017
 
December 31, 2016
Prepaid insurance
$
7,729

 
$
9,702

Insurance receivables
7,574

 
2,895

Due from related parties
7,083

 
4,805

Other receivables
3,928

 
2,998

Risk management assets
534

 
964

Other assets
1,164

 
6,303

   Total
$
28,012


$
27,667

Risk Management Activities
Risk Management Activities

We are exposed to certain market risks related to the volatility of commodity prices and changes in interest rates. To monitor and manage these market risks, we have established comprehensive risk management policies and procedures. We do not enter into derivative instruments for any purpose other than hedging commodity price risk, interest rate risk, and weather risk. We do not speculate using derivative instruments.

Commodity Derivatives

Our normal business activities expose us to risks associated with changes in the market price of crude oil and natural gas, among other commodities. Management believes it is prudent to limit our exposure to these risks, which include our (i) propane purchases, (ii) pre-existing or anticipated physical crude oil and refined product sales and (iii) certain crude oil held in inventory. To meet this objective, we use a combination of fixed price swap and forward contracts. Our forward contracts that qualify for the Normal Purchase Normal Sale (“NPNS”) exception under GAAP are recognized when the underlying physical transaction is delivered. While these contracts are considered derivative financial instruments under ASC 815, they are not recorded at fair value, but on an accrual basis of accounting. If it is determined that a transaction designated as NPNS no longer meets the scope exception, the fair value of the related contract is recorded on the balance sheet and immediately recognized through earnings.

We measure our commodity derivatives at fair value using the income approach which discounts the future net cash settlements expected under the derivative contracts to a present value. These valuations utilize indirectly observable (“Level 2”) inputs, including contractual terms and commodity prices observable at commonly quoted intervals.

The following table summarizes the net notional volume purchases (sales) of our outstanding commodity-related derivatives, excluding those contracts that qualified for the NPNS exception as of March 31, 2017 and December 31, 2016, none of which were designated as hedges for accounting purposes.

 
 
March 31, 2017
 
December 31, 2016
Commodity Swaps
 
Volume
 
Maturity
 
Volume
 
Maturity
Propane Fixed Price (Gallons)
 
7,767,296

 
April 30,2017 - December 31, 2019
 
4,364,880

 
January 31, 2017 - November 30, 2018
Crude Oil Fixed Price (Barrels)
 
61,000
 
May 31, 2017 - June 30, 2017
 
—
 
—
Crude Oil Basis (Barrels)
 
—
 
—
 
180,000

 
January 25, 2017- March 25, 2017


Interest Rate Swaps

To manage the impact of the interest rate risk associated with our Credit Agreement, we enter into interest rate swaps from time to time, effectively converting a portion of the cash flows related to our long-term variable rate debt into fixed rate cash flows.

As of March 31, 2017, our outstanding interest rate swap contracts consist of the following (in thousands):

Notional Amount
Term
Fair Value
$100,000
April 1, 2017 through December 29, 2017
$101
$100,000
December 29, 2017 through January 29, 2019
$287
$200,000
April 1, 2017 through September 3, 2019
$2,092
$100,000
January 1, 2018 through December 31, 2021
$2,847
$150,000
January 1, 2018 through December 31, 2022
$4,732
 
 
$10,059


The fair value of our interest rate swaps was estimated using a valuation methodology based upon forward interest rate and volatility curves as well as other relevant economic measures, if necessary. Discount factors may be utilized to extrapolate a forecast of future cash flows associated with long dated transactions or illiquid market points. The inputs, which represent Level 2 inputs in the valuation hierarchy, are obtained from independent pricing services and we have made no adjustments to those prices.

Weather Derivative

In the second quarter of 2016, we entered into a weather derivative to mitigate the impact of potential unfavorable weather on our operations under which we could receive payments totaling up to $30.0 million in the event that a hurricane of certain strength pass through the areas identified in the derivative agreement. The weather derivatives, which are accounted for using the intrinsic value method, were entered into with a single counterparty and we were not required to post collateral.

We paid no premiums during the three months ended March 31, 2017 and 2016, respectively. Premiums are amortized to Direct operating expenses on a straight-line basis over the 1 year term of the contract. Unamortized amounts associated with the weather derivatives were approximately $0.2 million and $0.4 million as of March 31, 2017 and December 31, 2016, respectively, and are included in Other current assets on the consolidated balance sheets.

The following table summarizes the fair values of our derivative contracts (before netting adjustments) included in the condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016 (in thousands):
 
 
 
Asset Derivatives
 
Liability Derivatives
Type
Balance Sheet Classification
 
March 31,
2017
 
December 31, 2016
 
March 31,
2017
 
December 31, 2016
Commodity swaps
Other current assets
 
$
200

 
$
607

 
$
—

 
$
—

Commodity swaps
Accrued expenses and other current liabilities
 
—

 
—

 
(316
)
 
(1
)
Commodity swaps
Risk management assets - long term
 
3

 
37

 
—

 
—

Commodity swaps
Other liabilities
 
—

 
—

 
(201
)
 
(1
)
Interest rate swaps
Other current assets
 
337

 
—

 
—

 
—

Interest rate swaps
Accrued expenses and other current liabilities
 
—

 
—

 
—

 
(252
)
Interest rate swaps
Risk management assets- long term
 
9,722

 
10,628

 
—

 
—

Weather derivatives
Other current assets
 
$
172

 
$
429

 
$
—

 
$
—


The following tables present the fair value of our recognized derivative assets and liabilities on a gross basis and amounts offset in the condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016 that are subject to enforceable master netting arrangements (in thousands):
 
 
Gross Risk Management Position
 
Netting Adjustments
 
Net Risk Management Position presented in the balance sheet
Balance Sheet Classification
 
March 31,
2017
 
December 31, 2016
 
March 31,
2017
 
December 31, 2016
 
March 31,
2017
 
December 31, 2016
Other current assets
 
$
709

 
$
1,036

 
$
(175
)
 
$
(72
)
 
$
534

 
$
964

Risk management assets- long term
 
9,725

 
10,665

 
(101
)
 
(1
)
 
9,624

 
10,664

Total assets
 
$
10,434

 
$
11,701

 
$
(276
)
 
$
(73
)
 
$
10,158

 
$
11,628

 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued expenses and other liabilities
 
$
(316
)
 
$
(253
)
 
$
175

 
$
72

 
$
(141
)
 
$
(181
)
Other liabilities
 
(201
)
 
(1
)
 
101

 
1

 
(100
)
 
—

Total liabilities
 
$
(517
)
 
$
(254
)
 
$
276

 
$
73

 
$
(241
)
 
$
(181
)


For the three months ended March 31, 2017 and 2016, respectively, the realized and unrealized gains (losses) associated with our commodity, interest rate and weather derivative instruments were recorded in our unaudited condensed consolidated statements of operations as follows (in thousands):
 
Realized
 
Unrealized
2017
 
 
 
Gains (losses) on commodity derivatives, net
$
699

 
$
(956
)
Interest expense
(65
)
 
(317
)
Direct operating expenses
(257
)
 
—

Total
$
377

 
$
(1,273
)
2016
 
 
 
Gains (losses) on commodity derivatives, net
$
(388
)
 
$
150

Interest expense
—

 
(1,532
)
Direct operating expenses
(219
)
 
—

Total
$
(607
)
 
$
(1,382
)
Property, Plant and Equipment, Net
Property, Plant and Equipment, Net
Property, Plant and Equipment, Net

Property, plant and equipment, net, consists of the following (in thousands):
 
Useful Life
(in years)
 
March 31,
2017
 
December 31,
2016
Land
N/A
 
$
21,390

 
$
21,811

Construction in progress
N/A
 
117,288

 
131,449

Buildings and improvements
4 to 40
 
24,407

 
24,323

Transportation equipment
5 to 15
 
45,519

 
44,060

Processing and treating plants
8 to 40
 
139,553

 
137,014

Pipelines, compressors and right-of-way
3 to 40
 
776,867

 
754,911

Storage
3 to 40
 
210,685

 
210,579

Equipment
3 to 31
 
107,715

 
104,235

Total property, plant and equipment
 
 
1,443,424

 
1,428,382

Accumulated depreciation
 
 
(301,122
)
 
(283,379
)
Property, plant and equipment, net
 
 
$
1,142,302

 
$
1,145,003



At March 31, 2017 and December 31, 2016, gross property, plant and equipment included $305.1 million and $291.1 million, respectively, related to our FERC regulated interstate and intrastate assets.

Depreciation expense totaled $21.6 million and $19.7 million for the three months ended March 31, 2017 and 2016, respectively. Capitalized interest was $1.0 million and $0.5 million for the three months ended March 31, 2017 and 2016, respectively.
Goodwill and Intangible Assets, Net
Goodwill and Intangible Assets, Net
Goodwill and Intangible Assets, Net

Goodwill as of March 31, 2017 and December 31, 2016 consisted of the following (in thousands):
 
March 31,
2017
 
December 31,
2016
Liquids Pipelines and Services
$
124,710

 
$
124,710

Terminalling Services
77,425

 
77,425

Propane Marketing Services
15,363

 
15,363

 
$
217,498

 
$
217,498



Intangible assets, net, consists of customer relationships, dedicated acreage agreements, collaborative arrangements, noncompete agreements and trade names. These intangible assets have definite lives and are subject to amortization on a straight-line basis over their economic lives, currently ranging from approximately 5 years to 30 years. Intangible assets, net, consist of the following (in thousands):
 
March 31, 2017
 
Gross carrying amount
 
Accumulated amortization
 
Net carrying amount
Customer relationships
$
133,503

 
$
(35,806
)
 
$
97,697

Customer contracts
95,594

 
(35,634
)
 
59,960

Dedicated acreage
53,350

 
(4,882
)
 
48,468

Collaborative arrangements
11,884

 
(778
)
 
11,106

Noncompete agreements
3,423

 
(3,175
)
 
248

Other
751

 
(215
)
 
536

Total
$
298,505

 
$
(80,490
)
 
$
218,015

 
 
 
 
 
 
 
December 31, 2016
 
Gross carrying amount
 
Accumulated amortization
 
Net carrying amount
Customer relationships
$
133,503

 
$
(31,471
)
 
$
102,032

Customer contracts
95,594

 
(33,414
)
 
62,180

Dedicated acreage
53,350

 
(4,439
)
 
48,911

Collaborative arrangements
11,884

 
(601
)
 
11,283

Noncompete agreements
3,423

 
(3,086
)
 
337

Other
751

 
(211
)
 
540

Total
$
298,505

 
$
(73,222
)
 
$
225,283



Amortization expense related to our intangible assets totaled $7.3 million and $5.2 million for the three months ended March 31, 2017 and 2016, respectively.
Investment in unconsolidated affiliates
Investment in unconsolidated affiliates
Investment in unconsolidated affiliates

The following table presents the activity in our investments in unconsolidated affiliates (in thousands):
 
Delta House (1)
 
Emerald Transactions
 
 
 
 
 
FPS
 
OGL
 
Destin
 
Tri-States
 
Okeanos
 
Wilprise
 
MPOG
 
Total
Ownership % at March 31, 2017
20.1
%
 
20.1
%
 
49.7
%
 
16.7
%
 
66.7
%
 
25.3
%
 
66.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balances at December 31, 2016
$
64,483

 
$
25,450

 
$
110,882

 
$
55,022

 
$
27,059

 
$
4,944

 
$
4,148

 
$
291,988

  Earnings in unconsolidated affiliates
7,088

 
3,636

 
2,126

 
899

 
1,572

 
188

 
(107
)
 
15,402

  Distributions
(6,986
)
 
(3,555
)
 
(6,258
)
 
(1,100
)
 
(3,667
)
 
(228
)
 
(700
)
 
(22,494
)
Balances at March 31, 2017
$
64,585

 
$
25,531

 
$
106,750

 
$
54,821


$
24,964


$
4,904


$
3,341


$
284,896

 

(1) Represents direct and indirect ownership interests in Class A Units.

The following tables present the summarized combined financial information for our equity investments (amounts represent 100% of investee financial information):
Balance Sheets:
March 31, 2017
 
December 31, 2016
Current assets
$
87,406

 
$
120,600

Non-current assets
1,353,629

 
1,387,675

Current liabilities
62,231

 
64,099

Non-current liabilities
$
584,742

 
$
623,650


 
Three months ended March 31,
Statements of Operations:
2017
 
2016
Revenue
$
98,439

 
$
65,542

Cost of sales and operating expenses
18,300

 
5,392

Gross profit
80,139

 
60,150

Income from continuing operations
58,595

 
55,548

Net income
$
58,595

 
$
55,548



The unconsolidated affiliates were determined to be variable interest entities due to disproportionate economic interests and decision making rights. In each case, we lack the power to direct the activities that most significantly impact the unconsolidated affiliate’s economic performance. As we do not hold a controlling financial interest in these affiliates, we account for our related investments using the equity method. Additionally our maximum exposure to loss related to each entity is limited to our equity investment as presented on the condensed consolidated balance sheet at March 31, 2017. In each case, we are not obligated to absorb losses greater than our proportional ownership percentages indicated above. Our right to receive residual returns is not limited to any amount less than the ownership percentages indicated above.
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consists of the following (in thousands):
 
 
March 31, 2017
 
December 31, 2016
Capital expenditures
 
$
11,302

 
$
14,499

Accrued interest
 
8,526

 
5,743

Convertible preferred unit distributions
 
6,707

 
7,103

Employee compensation
 
7,881

 
10,804

Current portion of asset retirement obligation
 
6,499

 
6,499

Legal accrual
 
5,150

 
—

Additional Blackwater acquisition consideration
 
5,000

 
5,000

Transaction costs
 
4,539

 
3,000

Royalties payable
 
3,597

 
3,926

Escrow settlement
 
3,135

 
—

Customer deposits
 
2,083

 
3,080

Taxes payable
 
1,809

 
1,066

Due to related parties
 
1,523

 
4,072

Gas imbalances payable
 
1,454

 
1,098

Deferred financing costs
 
—

 
2,743

Recoverable gas costs
 
393

 
1,126

Other
 
11,289

 
11,525

 
 
$
80,887


$
81,284

Asset Retirement Obligations
Asset Retirement Obligations
Asset Retirement Obligations

We record a liability for the fair value of asset retirement obligations and conditional asset retirement obligations (collectively, referred to as “AROs”) that we can reasonably estimate, on a discounted basis, in the period in which the liability is incurred. Generally, the fair value of the liability is calculated using discounted cash flow techniques and based on internal estimates and assumptions related to (i) future retirement costs, (ii) future inflation rates and (iii) credit-adjusted risk-free interest rates. Significant increases or decreases in the assumptions would result in a significant change to the fair value measurement.

Certain assets related to our Offshore Pipelines Services segment have regulatory obligations to perform remediation and, in some instances, dismantlement and removal activities when the assets are abandoned. These AROs include varying levels of activity including disconnecting inactive assets from active assets, cleaning and purging assets, and in some cases, completely removing the assets and returning the land to its original state. These assets have been in existence for many years and with regular maintenance will continue to be in service for many years to come. It is not possible to predict when demand for these transmission services will cease, however, we do not believe that such demand will cease for the foreseeable future. The majority of the current portion of our AROs is related to the retirement of the Midla pipeline discussed in Note 16 - Commitments and Contingencies.

The following table presents activity in our asset retirement obligations for the three months ended March 31, 2017 (in thousands):
Non-current balance
$
44,363

Current balance
6,499

Balances at December 31, 2016
$
50,862

Expenditures
(41
)
Accretion expense
487

Balances at March 31, 2017
$
51,308

Less: current portion
6,499

Noncurrent asset retirement obligation
$
44,809



We are required to establish security against potential obligations relating to the abandonment of certain transmission assets that may be imposed on the previous owner by applicable regulatory authorities. We have deposited $5.0 million with a third party to secure our performance on these potential obligations. These deposits are included in Restricted cash-long term in our condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016.
Debt Obligations
Debt Obligations
Debt Obligations

Our outstanding debt consists of the following (in thousands):
 
March 31, 2017
 
December 31, 2016
Revolving credit facility
$
644,842

 
$
888,250

8.5% Senior Notes, due 2021
300,000

 
300,000

3.77% Senior Notes, due 2031 (Non-Recourse)
60,000

 
60,000

Other debt
1,546

 
3,809

Total debt obligations
1,006,388

 
1,252,059

Unamortized debt issuance costs (1)
(10,228
)
 
(11,036
)
Total debt
996,160

 
1,241,023

Less: Current portion, including unamortized debt issuance costs
(3,223
)
 
(5,485
)
Long term debt
$
992,937

 
$
1,235,538

(1) Unamortized deferred financing costs related to the Credit Agreement are included in our condensed consolidated balance sheets in Other assets, net.

Credit Agreement

On March 8, 2017, we and our operating company, American Midstream, LLC, along with other of our subsidiaries entered into a Second Amended and Restated Credit Agreement with Bank of America N.A., as Administrative Agent, Collateral Agent and L/C Issuer, Wells Fargo Bank, National Association, as Syndication Agent, and other lenders (the “Credit Agreement”) which increased our borrowing capacity from $750.0 million to $900.0 million and provided for an accordion feature that will permit, subject to the customary conditions, the borrowing capacity under the facility to be increased to a maximum of $1.1 billion. We can elect to have loans under our Credit Agreement bear interest either at a Eurodollar-based rate, plus a margin ranging from 2.00% to 3.25% depending on our total leverage ratio then in effect, or a base rate which is a fluctuating rate per annum equal to the highest of (i) the Federal Funds Rate, plus 0.50%, (ii) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate”, or (iii) the Eurodollar Rate plus 1.00%, plus a margin ranging from 1.00% to 2.25% depending on the total leverage ratio then in effect. We also pay a commitment fee of 0.50% per annum on the undrawn portion of the revolving loan under the Credit Agreement.

The Second Amended and Restated Credit Agreement contains certain financial covenants that are applicable as of the end of any fiscal quarter, including a consolidated total leverage ratio which requires our indebtedness not to exceed 5.00 times adjusted consolidated EBITDA (except for the fiscal quarters ended March 31, 2017, and the subsequent two quarters, at which time the covenant is increased to 5.50 times adjusted consolidated EBITDA), a consolidated secured leverage ratio which requires our secured indebtedness not to exceed 3.50 times adjusted consolidated EBITDA, and a minimum interest coverage ratio that requires our adjusted consolidated EBITDA to exceed consolidated interest charges by not less than 2.50 times. In addition to the financial covenants described above, the agreement also contains customary representations and warranties (including those relating to organization and authorization, compliance with laws, absence of defaults, material agreements and litigation) and customary events of default (including those relating to monetary defaults, covenant defaults, cross defaults and bankruptcy events).

As of March 31, 2017, we had approximately $644.8 million of borrowings and $25.9 million of letters of credit outstanding under the Credit Agreement resulting in $670.7 million of available borrowing capacity.

As of March 31, 2017, our consolidated total leverage ratio was 4.64 and our interest coverage ratio was 6.19, which were both in compliance with the related requirements of our Credit Agreement. Our ability to maintain compliance with the leverage and interest coverage ratios included in the Credit Agreement may be subject to, among other things, the timing and success of initiatives we are pursuing, which may include expansion capital projects, acquisitions or drop down transactions, as well as the associated financing for such initiatives.

The carrying value of amounts outstanding under our Credit Agreement approximates the related fair value, as interest charges vary with market rates conditions.

JPE Revolver

JPE had a $275.0 million revolving loan, which included a sub-limit of up to $100.0 million for letters of credit with Bank of America, N.A. (the “JPE Revolver”). The JPE Revolver was scheduled to mature on February 12, 2019, but on March 8, 2017, in connection with the closing of the JPE acquisition, the $199.5 million outstanding balance of the JPE Revolver was paid off in full and terminated.

For the three months ended March 31, 2017 and 2016, the weighted average interest rate on borrowings under our Credit Agreement and the JPE revolver was approximately 4.44% and 4.07%, respectively.

8.50% Senior Unsecured Notes

On December 28, 2016, we and American Midstream Finance Corporation, our wholly-owned subsidiary (the “Co-Issuer” and together with the Partnership, the “Issuers”), completed the issuance and sale of the 8.50% Senior Notes. The 8.50% Senior Notes are jointly and severally guaranteed by our existing direct and indirect wholly owned subsidiaries (other than the Co-Issuer) and certain of our future subsidiaries (the “Guarantors”). The 8.50% Senior Notes rank equal in right of payment with all existing and future senior indebtedness of the Issuers, and senior in right of payment to any future subordinated indebtedness of the Issuers. The 8.50% Senior Notes were issued at par and provided approximately $294.0 million in proceeds, after deducting the initial purchasers' discount of $6.0 million. This amount was deposited into escrow pending completion of the JPE Acquisition and was included in Restricted cash-long term on our condensed consolidated balance sheet as of December 31, 2016. We also incurred $2.7 million of direct issuance costs resulting in net proceeds related to the 8.50% Senior Notes of $291.3 million.

Upon the closing of the JPE Acquisition and the satisfaction of other related conditions the restricted cash was released from escrow on March 8, 2017 and used to repay and terminate JPE’s revolving credit facility and reduce borrowings under the Partnership’s Amended and Restated Credit Agreement then in effect.

As of March 31, 2017, the fair value of the 8.50% Senior Notes was $305.6 million. This estimate was based on similar private placement transactions along with changes in market interest rates which represent a Level 2 measurement.

3.77% Senior Secured Notes

On September 30, 2016, Midla Financing, LLC (“Midla Financing”), American Midstream (Midla) LLC (“Midla”), and Mid Louisiana Gas Transmission LLC (“MLGT and together with Midla, the “Note Guarantors”) entered into a Note Purchase and Guaranty Agreement with certain institutional investors (the “Purchasers”) whereby Midla Financing issued $60.0 million in aggregate principal amount of 3.77% Senior Notes (non-recourse) due June 30, 2031.

The Note Purchase Agreement includes customary representations and warranties, affirmative and negative covenants (including financial covenants), and events of default that are customary for a transaction of this type. Many of these provisions apply not only to Midla Financing and the Note Guarantors, but also to American Midstream Midla Financing Holdings, LLC (“Midla Holdings”), a wholly owned subsidiary of the Partnership and the sole member of Midla Financing. Among other things, Midla Financing must maintain a debt service reserve account containing six months of principal and interest payments, and Midla Financing and the Note Guarantors (including any entities that become guarantors under the terms of the 3.77% Senior Note Purchase Agreement) are restricted from making distributions (a) until June 30, 2017, (b) unless the debt service coverage ratio is not less than, and is not projected for the following 12 calendar months to be less than, 1.20:1.00, and (c) unless certain other requirements are met.

As of March 31, 2017, the fair value of the 3.77% Senior Notes was $54.6 million. This estimate was based on similar private placement transactions along with changes in market interest rates which represent a Level 2 measurement.
Convertible Preferred Units (Notes)
Convertible Preferred Units
Convertible Preferred Units

Our convertible preferred units consist of the following (in thousands):
 
Series A
 
Series C
 
Series D
 
Units
$
 
Units
$
 
Units
$
December 31, 2016
10,107

$
181,386

 
8,792

$
118,229

 
2,333

$
34,475

Paid in kind unit distributions
159

2,181

 
—

—

 
—

—

March 31, 2017
10,266

$
183,567

 
8,792

$
118,229

 
2,333

$
34,475



Affiliates of our General Partner hold and participate in quarterly distributions on our convertible preferred units, with such distributions being made in cash, paid-in-kind units or a combination thereof, at the election of the Board of Directors of our General Partner, although quarterly distribution on our Series D Units will only be paid in cash. The convertible preferred unitholders have the right to receive cumulative distributions in the same priority and prior to any other distributions made in respect of any other partnership interests.

To the extent that any portion of a quarterly distribution on our convertible preferred units to be paid in cash exceeds the amount of cash available for such distribution, the amount of cash available will be paid to our convertible preferred unitholders on a pro rata basis while the difference between the distribution and the available cash will become arrearages and accrue interest until paid.

Series A-1 Convertible Preferred Units

On April 15, 2013, we, our General Partner and AIM Midstream Holdings entered into agreements with HPIP, pursuant to which HPIP acquired 90% of our General Partner and all of our subordinated units from AIM Midstream Holdings and contributed the High Point System and $15.0 million in cash to us in exchange for 5,142,857 of our Series A-1 Units.
The Series A-1 Units receive distributions prior to distributions to our common unitholders. The distributions on the Series A-1 Units are equal to the greater of $0.4125 per unit or the declared distribution to common unitholders. The Series A-1 Units may be converted into common units, subject to customary anti-dilutive adjustments, at the option of the unitholders on or any time after January 1, 2014. As of March 31, 2017, the conversion price is $15.87 and the conversion ratio is 1 to 1.1027.

Series A-2 Convertible Preferred Units

On March 30, 2015 and June 30, 2015, we entered into two Series A-2 Convertible Preferred Unit Purchase Agreements with Magnolia Infrastructure Partners ("Magnolia") an affiliate of HPIP pursuant to which we issued, in separate private placements, newly-designated Series A-2 Units (the “Series A-2 Units”) representing limited partnership interests in the Partnership. As a result, the Partnership issued a total of 2,571,430 Series A-2 Units for approximately $45.0 million in aggregate proceeds during the year ended December 31, 2015. The Series A-2 Units will participate in distributions of the Partnership along with common units in a manner identical to the existing Series A-1 Units (together with the Series A-2 Units, the "Series A Units"), with such distributions being made in cash or with paid-in-kind Series A Units at the election of the Board of Directors of our General Partner.

On July 27, 2015, we amended our Partnership Agreement to grant us the right (the “Call Right”) to require the holders of the Series A-2 Units to sell, assign and transfer all or a portion of the then outstanding Series A-2 Units to us for a purchase price of $17.50 per Series A-2 Unit (subject to appropriate adjustment for any equity distribution, subdivision or combination of equity interests in the Partnership). We may exercise the Call Right at any time, in connection with our or our affiliate’s acquisition of assets or equity from ArcLight Energy Partners Fund V, L.P., or one of its affiliates, for a purchase price in excess of $100 million. We may not exercise the Call Right with respect to any Series A-2 Units that a holder has elected to convert into common units on or prior to the date we have provided notice of our intent to exercise the Call Right, and we may also not exercise the Call Right if doing so would result in a default under any of our or our affiliates’ financing agreements or obligations. As of March 31, 2017, the conversion price is $15.87 and the conversion ratio is 1 to 1.1027.

Third Amendment to Partnership Agreement

The Partnership also executed Amendment No. 3 to our Fifth Amended and Restated Partnership Agreement (as amended, the “Partnership Agreement”), which amends the distribution payment terms of the Partnership’s outstanding Series A Preferred Units to provide for the payment of a number of Series A payment-in-kind (“PIK”) preferred units for the quarter (the “Series A Preferred Quarterly Distribution”) in which the JPE Acquisition is consummated (which is the quarter ended March 31, 2017) and each quarter thereafter equal to the quotient of (i) the greater of (a) $0.4125 and (b) the "Series A Distribution Amount", as such term is defined in the Partnership Agreement, divided by (ii) the Series A Adjusted Issue Price, as such term is defined in the Partnership Agreement. However, in our General Partner’s discretion, which determination shall be made prior to the record date for the relevant quarter, the Series A Preferred Quarterly Distribution may be paid as a combination (x) an amount in cash up to the greater of (1) $0.4125 and (2) the Series A Distribution Amount, and (y) a number of Series A Preferred Units equal to the quotient of (a) the remainder of (i) the greater of (I) $0.4125 and (II) the Series A Distribution Amount less (ii) the amount of cash paid pursuant to clause (x), divided by (b) the Series A Adjusted Issue Price. This calculation results in a reduced Series A Preferred Quarterly Distribution, which was previously calculated under the Partnership Agreement using $0.50 in place of $0.4125 in the preceding calculations.

Series C Convertible Preferred Units

On April 25, 2016, we issued 8,571,429 Series C Units to an ArcLight affiliate in connection with the purchase of membership interests in certain midstream entities.

The Series C Units have voting rights that are identical to the voting rights of the common units and will vote with the common units as a single class on an as converted basis, with each Series C Unit initially entitled to one vote for each common unit into which such Series C Unit is convertible. The Series C Units also have separate class voting rights on any matter, including a merger, consolidation or business combination, that adversely affects, amends or modifies any of the rights, preferences, privileges or terms of the Series C Units. The Series C Units are convertible in whole or in part into common units at any time. The number of common units into which a Series C Unit is convertible will be an amount equal to the sum of $14.00 plus all accrued and accumulated but unpaid distributions, divided by the conversion price. The sale of the Series C Units was exempt from registration under Securities Act pursuant to Rule 4(a)(2) under the Securities Act.

In the event that we issue, sell or grant any common units or convertible securities at an indicative per common unit price that is less than $14.00 per common unit (subject to customary anti-dilution adjustments), then the conversion price will be adjusted according to a formula to provide for an increase in the number of common units into which Series C Units are convertible. As of March 31, 2017, the conversion price is $13.95 and the conversion ratio is 1 to 1.0036.

In connection with the issuance of the Series C Units, we issued the holders a warrant to purchase up to 800,000 common units at an exercise price of $7.25 per common unit (the "Series C Warrant"). The Series C Warrant is subject to standard anti-dilution adjustments and is exercisable for a period of seven years.

The fair value of the Series C Warrant was determined using a market approach that utilized significant inputs which are not observable in the market and thus represent a Level 3 measurement as defined by ASC 820. The estimated fair value of $4.41 per warrant unit was determined using a Black-Scholes model and the following significant assumptions: i) a dividend yield of 18%, ii) common unit volatility of 42% and iii) the seven-year term of the warrant to arrive at an aggregate fair value of $4.5 million.

Series D Convertible Preferred Units

On October 31, 2016, we issued 2,333,333 shares of our newly-designated Series D Units to an ArcLight affiliate at a price of $15.00 per unit, less a 1.5% closing fee, in connection with the Delta House transaction during the third quarter 2016. The related agreement provides that if any of the Series D Units remain outstanding on June 30, 2017, we will issue the holder of the Series D Units a warrant (the “Series D Warrant”) to purchase 700,000 common units representing limited partnership interests with an exercise price of $22.00 per common unit. The fair value of the conditional Series D Warrant at the time of issuance was immaterial.

The Series D Units are entitled to quarterly distributions payable in arrears equal to the greater of $0.4125 and the cash distribution that the Series D Units would have received if they had been converted to common units immediately prior to the beginning of the quarter. The Series D Units also have separate class voting rights on any matter, including a merger, consolidation or business combination, that adversely affects, amends or modifies any of the rights, preferences, privileges or terms of the Series D Units. The Series D Units are convertible in whole or in part into common units at the election of the holder of the Series D Unit at any time after June 30, 2017. As of the date of issuance, the conversion rate for each Series D Unit was one-to-one (the “Conversion Rate”). As of March 31, 2017, the conversion price is $15.00 and the conversion ratio is 1 to 1.
Partners Capital
Partners’ Capital and Convertible Preferred Units
Partners’ Capital

Outstanding Units

The following table presents unit activity (in thousands):
 
 
General
Partner Interest
 
Limited Partner Interest
Balances at December 31, 2016
 
680

 
51,351

LTIP vesting
 
—

 
259

Issuance of common units
 
—

 
21

Issuance of GP units
 
8

 
—

Balances at March 31, 2017
 
688

 
51,631



Our capital accounts are comprised of approximately 0.9% notional General Partner interests and 99.1% limited partner interests as of March 31, 2017. Our limited partners have limited rights of ownership as provided for under our Partnership Agreement and the right to participate in our distributions. Our General Partner manages our operations and participates in our distributions, including certain incentive distributions pursuant to the incentive distribution rights that are non-voting limited partner interests held by our General Partner. Pursuant to our Partnership Agreement, our General Partner participates in losses and distributions based on its interest. The General Partner’s participation in the allocation of losses and distributions is not limited and therefore, such participation can result in a deficit to its capital account. As such, allocation of losses and distributions, including distributions for previous transactions between entities under common control, has resulted in a deficit to the General Partner’s capital account included in our condensed consolidated balance sheets.

General Partner Units

In order to maintain its ownership percentage, we received proceeds of $0.1 million from our General Partner as consideration for the issuance of 8,665 additional notional General Partner units for the three months ended March 31, 2017. For the three months ended March 31, 2016, we received proceeds of $0.1 million for the issuance of 6,225 additional notional General Partner units.

Distributions

We made the following distributions (in thousands):

 
 
Three months ended March 31,
 
 
2017
 
2016
Series A Units
 
 
 
 
Cash Paid
 
$
2,527

 
$
—

Accrued
 
4,296

 
4,471

Paid-in-kind units
 
2,733

 
4,380

 
 
 
 
 
Series C Units
 
 
 
 
Cash Paid
 
3,627

 
—

Accrued
 
3,627

 
—

 
 
 
 
 
Series D Units
 
 
 
 
Cash Paid
 
962

 
—

Accrued
 
962

 
—

 
 
 
 
 
Limited Partner Units
 
 
 
 
Cash Paid
 
24,915

 
27,000

 
 
 
 
 
General Partner Units
 
 
 
 
Cash Paid
 
167

 
2,028

 
 
 
 
 
Summary
 
 
 
 
Cash Paid
 
32,198

 
29,028

Accrued
 
8,885

 
4,471

Paid-in-kind units
 
2,733

 
4,380



The fair value of the paid-in-kind distributions was determined using the market and income approaches, requiring significant inputs which are not observable in the market and thus represent a Level 3 measurement as defined by ASC 820. Under the income approach, the fair value estimates for all periods presented were based on i) present value of estimated future contracted distributions, ii) option values ranging from $0.02 per unit to $9.68 per unit using a Black-Scholes model, iii) assumed discount rates ranging from 5.57% to 10.0% and iv) assumed growth rates of 1.0%.
Net Income (Loss) per Limited Partner Unit
Net Income (Loss) per Limited Partner Unit
Net Income (Loss) per Limited Partner Unit

Net income (loss) is allocated to the General Partner and the limited partners in accordance with their respective ownership percentages, after giving effect to distributions on our convertible preferred units and General Partner units, including incentive distribution rights. Unvested unit-based compensation awards that contain non-forfeitable rights to distributions (whether paid or unpaid) are classified as participating securities and are included in our computation of basic and diluted net limited partners' net income (loss) per common unit. Basic and diluted limited partners' net income (loss) per common unit is calculated by dividing limited partners' interest in net income (loss) by the weighted average number of outstanding limited partner units during the period.


As discussed in Note 1, the JPE Acquisition was a combination between entities under common control. As a result, prior periods were retrospectively adjusted to furnish comparative information. Accordingly, the prior period earnings combining both entities were allocated among our General Partners and common unitholders assuming JPE units were converted into our common units in the comparative historical periods.

The calculation of basic and diluted limited partners' net income (loss) per common unit is summarized below (in thousands, except per unit amounts):

 
Three months ended March 31,
 
2017
 
2016
Net (loss) from continuing operations
$
(28,881
)
 
$
(10,064
)
Less: Net income (loss) attributable to noncontrolling interests
1,303

 
(3
)
Net loss from continuing operations attributable to the Partnership
(30,184
)
 
(10,061
)
Less:
 
 
 
Distributions on Series A Units
4,296

 
4,471

Distributions on Series C Units
3,627

 
—

Distributions on Series D Units
962

 
—

General partner's distribution
200

 
2,028

General partner's share in undistributed loss
(560
)
 
(418
)
Net loss from continuing operations attributable to Limited Partners
(38,709
)
 
(16,142
)
Net loss from discontinued operations attributable to Limited Partners
—

 
(539
)
Net loss attributable to Limited Partners
$
(38,709
)
 
$
(16,681
)
 
 
 
 
Weighted average number of common units used in computation of Limited Partners' net loss per common unit - basic and diluted
51,451

 
50,925

 
 
 
 
Limited Partners' net loss from continuing operations per unit
$
(0.75
)
 
$
(0.32
)
Limited Partners' net loss from discontinued operations per unit
—

 
(0.01
)
Limited Partners' net loss per common unit (1)
$
(0.75
)
 
$
(0.33
)
(1) Potential common unit equivalents are antidilutive for all periods and, as a result, have been excluded from the determination of diluted limited partners' net income (loss) per common unit.
Long-Term Incentive Plan
Long-Term Incentive Plan
Long-Term Incentive Plan

Our General Partner manages our operations and activities and employs the personnel who provide support to our operations. On November 19, 2015, the Board of Directors of our General Partner approved the Third Amended and Restated Long-Term Incentive Plan to, among other things, increase the number of common units authorized for issuance by 6,000,000 common units. On February 11, 2016, the unitholders approved the Third Amended and Restated Long-Term Incentive Plan (as amended and as currently in effect as of the date hereof, the “LTIP”). On March 9, 2017, additional 312,716 common units were registered to be issued in relation to the converted JPE phantom units.

All such equity-based awards issued under the LTIP consist of phantom units, distribution equivalent rights (“DERs”) or option grants. DERs and options have been granted on a limited basis. Future awards may be granted at the discretion of the Compensation Committee and subject to approval by the Board of Directors of our General Partner.

Phantom Unit Awards. Ownership in the phantom unit awards is subject to forfeiture until the vesting date. The LTIP is administered by the Compensation Committee of the Board of Directors of our General Partner, which at its discretion, may elect to settle such vested phantom units with a number of common units equivalent to the fair market value at the date of vesting in lieu of cash. Although our General Partner has the option to settle in cash upon the vesting of phantom units, our General Partner has not historically settled these awards in cash. Under the LTIP, phantom units typically vest over 3-4 years and do not contain any vesting requirements other than continued employment.

In December 2015, the Board of Directors of our General Partner approved a grant of 200,000 phantom units under the LTIP which contain DERs based on the extent to which our Series A Unitholders receive distributions in cash. These units will vest on the three year anniversary of the date of grant, subject to acceleration in certain circumstances.

The following table summarizes activity in our phantom unit-based awards for the three months ended March 31, 2017:

 
 
Units
 
Weighted-Average Grant Date Fair Value Per Unit
Outstanding units at December 31, 2016
 
1,558,835

 
$
6.98

Granted
 
2,000

 
11.20

Forfeited
 
(964
)
 
30.14

Vested
 
(319,572
)
 
7.41

Outstanding units at March 31, 2017
 
1,240,299

 
$
6.86



The fair value of our phantom units, which are subject to equity classification, is based on the fair value of our common units at the grant date. Compensation expense related to these awards for the three months ended March 31, 2017 and 2016 was $4.0 million and $1.6 million respectively, and is included in Corporate expenses and Direct operating expenses in our unaudited condensed consolidated statements of operations and Equity compensation expense in our unaudited condensed consolidated statements of changes in partners’ capital and noncontrolling interests.

The total fair value of units at the time of vesting was $5.0 million and $0.9 million for the three months ended March 31, 2017 and 2016, respectively.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies

Legal proceedings

We are not currently party to any pending litigation or governmental proceedings, other than ordinary routine litigation incidental to our business. While the ultimate impact of any proceedings cannot be predicted with certainty, our management believes that the resolution of any of our pending proceedings will not have a material adverse effect on our financial condition, results of operations or cash flows.

Environmental matters

We are subject to federal and state laws and regulations relating to the protection of the environment. Environmental risk is inherent to our operations, and we could, at times, be subject to environmental cleanup and enforcement actions. We attempt to manage this environmental risk through appropriate environmental policies and practices to minimize any impact our operations may have on the environment.

Regulatory matters

On October 8, 2014, American Midstream (Midla), LLC ("Midla") reached an agreement in principle with its customers regarding the interstate pipeline that traverses Louisiana and Mississippi in order to provide continued service to its customers while addressing safety concerns with the existing pipeline.

On April 16, 2015, FERC approved the stipulation and agreement (the “Midla Agreement”) relating to the October 8, 2014 regulatory matter allowing Midla to retire the existing 1920’s pipeline and replace it with the Midla-Natchez Line to serve existing residential, commercial, and industrial customers. Under the Midla Agreement, customers not served by the new Midla-Natchez Line will be connected to other interstate or intrastate pipelines, other gas distribution systems, or offered conversion to propane service. On June 29, 2015, we filed with FERC for authorization to construct the Midla-Natchez pipeline, which was approved on December 17, 2015. Construction commenced in the second quarter of 2016, and services commenced on March 31, 2017. Under the Midla Agreement, Midla executed long-term agreements seeking to recover its investment in the Midla-Natchez Line.

Merger related costs

As part of the JPE Acquisition, management of JPE communicated to its employees a severance plan. The plan includes termination benefits in the form of severance and accelerated vesting of phantom units for employees who render service through their respective termination date. We have estimated the fair value of the obligation to be approximately $3.4 million, which has been recorded as of March 31, 2017.
Related Party Transactions
Related Party Transactions
Related Party Transactions

In December 2013, we acquired Blackwater Midstream Holdings, LLC (“Blackwater”) from an affiliate of ArcLight. The acquisition agreement included a provision whereby an ArcLight affiliate would be entitled to an additional $5.0 million of merger consideration based on Blackwater meeting certain operating targets. During the third quarter of 2016, we determined that it was probable the operating targets would be met in early 2017 and recorded a $5.0 million accrued distribution to the ArcLight affiliate which is included in Accrued expense and other current liabilities in the accompanying condensed consolidated financial statements as of March 31, 2017.

Employees of our General Partner are assigned to work for us or other affiliates of our General Partner. Where directly attributable, all compensation and related expenses for these employees are charged directly by our General Partner to American Midstream, LLC, which, in turn, charges the appropriate subsidiary or affiliate. Our General Partner does not record any profit or margin on the expenses charged to us.

In connection with the JPE Acquisition closing during the first quarter of 2017, our General Partner agreed to provide quarterly financial support up to a maximum of $25 million . The financial support will continue for eight (8) consecutive quarters following the closing of the merger, or if earlier, until $25 million in support has been provided. The General Partner would also reimburse the Partnership for certain expenses it incurs in connection with the post closing transition for one year. We have not currently utilized any of the financial support mentioned above.

Separate from the financial support described above, our General Partner agreed to absorb $9.6 million corporate overhead expenses incurred by us in the first quarter of 2017 and not pass such expense through to us.

Republic Midstream, LLC (“Republic”), is an entity owned by ArcLight in which we charge a monthly fee of approximately $0.1 million. The monthly fee reduced the Corporate expenses in the condensed consolidated statements of operations by $0.3 million for each of the three months ended March 31, 2017 and March 31, 2016. As of March 31, 2017, we had a receivable balance due from Republic of $1.4 million, which is included in Receivables from related parties in the condensed consolidated balance sheet.

As of March 31, 2017 and December 31, 2016, we had $1.3 million and $3.9 million, respectively, due to our General Partner, which has been recorded in Accrued expenses and other current liabilities and relates primarily to compensation. This payable is generally settled on a quarterly basis related to the foregoing transactions.

On November 1, 2016, we became operator of the Destin and Okeanos pipelines and entered into an operating and administrative management agreements under which the affiliates pay a monthly fee for general and administrative services provided by us. In addition, the affiliates reimburse us for certain transition related expenses. For the three months ended March 31, 2017, we recognized $0.6 million of management fee income.

American Panther, LLC ("American Panther") is a 60%-owned subsidiary of us which is consolidated for financial reporting purposes. Pursuant to a related agreement which began in the second quarter of 2016, an affiliate of the non-controlling interest holder provides services to American Panther in exchange for related fees, which in 2016 totaled $0.8 million of Direct operating expenses and $0.4 million of Corporate expenses in the unaudited condensed consolidated statement of operations. During the three months ended March 31, 2017, we provided services for related fees which totaled $0.3 million of Direct operating expenses and $0.1 million of Corporate expenses in the unaudited condensed consolidated statement of operations.

We enter into purchases and sales of natural gas and crude oil with a company whose chief financial officer is the brother of one of our executive officers. During the three months ended March 31, 2017, and 2016, we recognized revenue of $0.7 million, and $0.9 million, respectively, while purchases from this company totaled $1.4 million, and $1.0 million, respectively.


JP Energy Development (“JP Development”), an affiliate owned by Arclight, had a pipeline transportation business that provided crude oil pipeline transportation services to JPE’s discontinued Mid-Continent Business. As a result of utilizing JP Development’s pipeline transportation services, JPE incurred pipeline tariff fees of $0.4 million for the three months ended March 31, 2016, which have been included in net loss from discontinued operations in the condensed consolidated statements of operations. We combined the cash flows from the MidContinent Business with the cash flows from continuing operations for all periods presented in the consolidated statements of cash flows. As of December 31, 2015, we had a net receivable from JP Development of $7.9 million, primarily as the result of the prepayments made in 2014 for the crude oil pipeline transportation services to be provided by JP Development. We recovered these amounts in full on February 1, 2016.

On February 1, 2016, JPE sold certain trucking and marketing assets in the Mid-Continent area to JP Development in connection with JP Development’s sale of its GSPP pipeline assets to a third party.

During the year ended December 31, 2016, JPE’s general partner agreed to absorb corporate overhead expenses incurred by us and not pass such expense through to us. We record non-cash contributions for these expenses in the quarters subsequent to when they were incurred, which was $4.0 million and $2.5 million for the three months ended March 31, 2017 and 2016, respectively. JPE’s general partner agreed to absorb $1.5 million of such corporate overhead expenses in the three months ended March 31, 2016.
Reportable Segments
Reportable Segments
Reportable Segments

During the first quarter of 2017, as a result of the acquisition of JPE described in Note 1, we realigned the composition of our reportable segments. Accordingly, we have restated the items of segment information for the three months ended March 31, 2016 to reflect this new segment adjustment.

Our operations are located in the United States and are organized into six reportable segments: 1) Gas Gathering and Processing Services, 2) Liquid Pipelines and Services, 3) Natural Gas Transportation Services, 4) Offshore Pipeline and Services, 5) Terminalling Services, and 6) Propane Marketing Services.

•
Gas Gathering and Processing Services. Our Gas Gathering and Processing Services segment provides “wellhead-to-market” services to producers of natural gas and natural gas liquids, which include transporting raw natural gas from various receipt points through gathering systems, treating the raw natural gas, processing raw natural gas to separate the NGLs from the natural gas, fractionating NGLs, and selling or delivering pipeline-quality natural gas and NGLs to various markets and pipeline systems.

•
Liquid Pipelines and Services. Our Liquid Pipelines and Services segment provides transportation, purchase and sales of crude oil from various receipt points including lease automatic customer transfer (“LACT”) facilities and deliveries to various markets.

•
Natural Gas Transportation Services. Our Natural Gas Transportation Services segment transports and delivers natural gas from producing wells, receipt points, or pipeline interconnects for shippers and other customers, which include local distribution companies (“LDCs”), utilities and industrial, commercial and power generation customers.

•
Offshore Pipelines and Services. Our Offshore Pipelines and Services segment gathers and transports natural gas and crude oil from various receipt points to other pipeline interconnects, onshore facilities and other delivery points.

•
Terminalling Services. Our Terminalling Services segment provides above-ground leasable storage operations at our marine terminals that support various commercial customers, including commodity brokers, refiners and chemical manufacturers to store a range of products and also includes crude oil storage in Cushing, Oklahoma and refined products terminals in Texas and Arkansas.

•
Propane Marketing Services. Our Propane Marketing Services segment gathers, transports and sells natural gas liquids (NGLs). This is accomplished through cylinder tank exchange, sales through retail, commercial and wholesale distribution and through a fleet of trucks operating in the Eagle Ford and Permian basin areas.


These segments are monitored separately by our chief operating decision maker (“CODM”) for performance and are consistent with our internal financial reporting. The CODM periodically reviews segment gross margin information for each segment to make business decisions. These segments have been identified based on the differing products and services, regulatory environment and the expertise required for these operations.

We define total segment gross margin as the sum of the segment gross margins for our Gas Gathering and Processing Services,
Liquid Pipelines and Services, Natural Gas Transportation Services, Offshore Pipelines and Services, Terminalling Services and
Propane Marketing Services segments.

We define segment gross margin in our Gas Gathering and Processing Services segment as total revenue plus unconsolidated affiliate earnings less unrealized gains or plus unrealized losses on commodity derivatives, construction and operating management agreement income and the cost of natural gas, crude oil and NGLs and condensate purchased.

We define segment gross margin in our Liquid Pipelines and Services segment as total revenue plus unconsolidated affiliate earnings less unrealized gains or plus unrealized losses on commodity derivatives and the cost of crude oil purchased in connection with fixed-margin arrangements. Substantially all of our gross margin in this segment is fee-based or fixed-margin, with little to no direct commodity price risk.

We define segment gross margin in our Natural Gas Transportation Services segment as total revenue plus unconsolidated affiliate earnings less the cost of natural gas purchased in connection with fixed-margin arrangements. Substantially all of our gross margin in this segment is fee-based or fixed-margin, with little to no direct commodity price risk.

We define segment gross margin in our Offshore Pipelines and Services segment as total revenue plus unconsolidated affiliate earnings less the cost of natural gas purchased in connection with fixed-margin arrangements. Substantially all of our gross margin in this segment is fee-based or fixed-margin, with little to no direct commodity price risk.

We define segment gross margin in our Terminalling Services segment as total revenue less direct operating expense which includes direct labor, general materials and supplies and direct overhead.

We define segment gross margin in our Propane Marketing Services segment as total revenue less purchases of natural gas, NGLs and condensate excluding non-cash charges such as non-cash unrealized gains or plus unrealized losses on commodity derivatives.

A reconciliation from Segment Gross Margin to Net Income attributable to the Partnership for the periods ended March 31, 2017 and March 31, 2016 is below (in thousands):

Three months ended March 31,

2017
 
2016
Reconciliation of Segment Gross Margin to Net income (loss) attributable to the Partnership:
 
 
 
Gas Gathering and Processing Services segment gross margin
$
11,251

 
$
11,619

Liquid Pipelines and Services segment gross margin
6,470

 
5,850

Natural Gas Transportation Services segment gross margin
6,119

 
5,563

Offshore Pipelines and Services segment gross margin
25,802

 
13,265

Terminalling Services segment gross margin (1)
11,160

 
9,443

Propane Marketing Services segment gross margin
19,302

 
28,305

Total Segment Gross Margin
80,104

 
74,045

Less:
 
 
 
Other direct operating expenses (1)
27,015

 
27,966

Total Operating Margin
53,089

 
46,079

Plus:
 
 
 
Loss on commodity derivatives, net
(257
)
 
(238
)
Less:
 
 
 
Corporate expenses
32,844

 
21,101

Depreciation, amortization and accretion expense
29,351

 
25,041

(Gain) loss on sale of assets, net
(228
)
 
1,122

Interest expense
17,966

 
8,302

Other income
(14
)
 
(31
)
Other, net
671

 
(365
)
Income tax expense
1,123

 
735

Loss from discontinued operations, net of tax
—

 
539

Net income (loss) attributable to noncontrolling interest
1,303

 
(3
)
Net income (loss) attributable to the Partnership
$
(30,184
)
 
$
(10,600
)
_______________________
(1) Other direct operating expenses include Gas Gathering and Processing segment direct operating expenses of $8.1 million and $8.5 million, respectively, Liquid Pipelines and Services segment direct operating expenses of $2.1 million and $2.5 million, respectively, Natural Gas Transportation Services segment direct operating expenses of $1.2 million and $1.2 million, respectively, Offshore Pipelines and Services segment direct operating expenses of $2.6 million and $2.3 million, respectively, Propane Marketing Services segment direct operating expenses of $13.1 million and $13.5 million, respectively, for the three months ended March 31, 2017 and 2016. Direct operating expenses related to our Terminalling Services segment of $3.1 million and $2.6 million for the three months ended March 31, 2017 and 2016, respectively, are included within the calculation of Terminalling Services segment gross margin.







The following tables set forth our segment information for the three months ended March 31, 2017 and 2016 (in thousands):
 
Three months ended March 31, 2017
 
Gas Gathering and Processing Services
 
Liquid Pipelines and Services
 
Natural Gas Transportation Services
 
Offshore Pipelines and Services
 
Terminalling Services
 
Propane Marketing Services
 
Total
Revenue
$
34,407

 
$
82,039

 
$
12,438

 
$
14,831

 
$
18,626

 
$
37,548

 
$
199,889

Gain (loss) on commodity derivatives, net
(7
)
 
372

 
—

 
—

 
—

 
(622
)
 
(257
)
Total revenue
34,400

 
82,411

 
12,438

 
14,831

 
18,626

 
36,926

 
199,632

Earnings in unconsolidated affiliates
—

 
1,088

 
—

 
14,314

 
—

 
—

 
15,402

Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of Sales
23,187

 
77,077

 
6,260

 
3,343

 
4,393

 
18,525

 
132,785

Direct operating expenses
8,065

 
2,074

 
1,235

 
2,579

 
3,073

 
13,062

 
30,088

Corporate expenses
 
 
 
 
 
 
 
 
 
 
 
 
32,844

Depreciation, amortization and accretion expense
 
 
 
 
 
 
 
 
 
 
 
 
29,351

Gain on sale of assets, net
 
 
 
 
 
 
 
 
 
 
 
 
(228
)
Total operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
224,840

Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
17,966

Other (income) expense
 
 
 
 
 
 
 
 
 
 
 
 
(14
)
Loss from continuing operations before taxes
 
 
 
 
 
 
 
 
 
 
 
 
(27,758
)
Income tax expense
 
 
 
 
 
 
 
 
 
 
 
 
1,123

Net loss
 
 
 
 
 
 
 
 
 
 
 
 
(28,881
)
Less: Net income attributable to non-controlling interests
 
 
 
 
 
 
 
 
 
 
 
 
1,303

Net loss attributable to the Partnership
 
 
 
 
 
 
 
 
 
 
 
 
$
(30,184
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment gross margin
$
11,251

 
$
6,470

 
$
6,119

 
$
25,802

 
$
11,160

 
$
19,302

 


 
Three months ended March 31, 2016
 
Gas Gathering and Processing Services
 
Liquid Pipelines and Services
 
Natural Gas Transportation Services
 
Offshore Pipelines and Services
 
Terminalling Services
 
Propane Marketing Services
 
Total
Revenue
$
23,295

 
$
44,515

 
$
9,795

 
$
7,003

 
$
14,393

 
$
44,613

 
$
143,614

Gain (loss) on commodity derivatives, net
(103
)
 
(233
)
 
—

 
—

 
(175
)
—

273

 
(238
)
Total revenue
23,192

 
44,282

 
9,795

 
7,003

 
14,218

 
44,886

 
143,376

Earnings in unconsolidated affiliates
—

 
—

 
—

 
7,343

 
—

 
—

 
7,343




 


 


 


 


 


 


Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of Sales
11,707

 
38,654

 
4,224

 
1,081

 
2,205

 
16,067

 
73,938

Direct operating expenses
8,548

 
2,467

 
1,227

 
2,253

 
2,609

 
13,471

 
30,575

Corporate expenses
 
 
 
 
 
 
 
 
 
 
 
 
21,101

Depreciation, amortization and accretion expense
 
 
 
 
 
 
 
 
 
 
 
 
25,041

Loss on sale of assets, net
 
 
 
 
 
 
 
 
 
 
 
 
1,122

Total operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
151,777

Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
8,302

Other (income) expense
 
 
 
 
 
 
 
 
 
 
 
 
(31
)
Loss from continuing operations before taxes
 
 
 
 
 
 
 
 
 
 
 
 
(9,329
)
Income tax expense
 
 
 
 
 
 
 
 
 
 
 
 
735

Income (loss from continuing operation
 
 
 
 
 
 
 
 
 
 
 
 
(10,064
)
Loss from discontinued operations, net of tax
 
 
 
 
 
 
 
 
 
 
 
 
539

Net loss
 
 
 
 
 
 
 
 
 
 
 
 
(10,603
)
Less: Net loss attributable to non-controlling interests
 
 
 
 
 
 
 
 
 
 
 
 
(3
)
Net loss attributable to the Partnership
 
 
 
 
 
 
 
 
 
 
 
 
$
(10,600
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment gross margin
$
11,619

 
$
5,850

 
$
5,563

 
$
13,265

 
$
9,443

 
$
28,305

 
 
















A reconciliation of total assets by segment to the amounts included in the condensed consolidated balance sheets follows:
 
March 31,
 
December 31,
 
2017
 
2016
Segment assets:
 
 
 
Gas Gathering and Processing Services
$
390,334

 
$
532,009

Liquid Pipelines and Services
447,121

 
422,636

Offshore Pipelines and Services
365,507

 
385,893

Natural Gas Transportation Services
176,740

 
221,604

Terminalling Services
277,632

 
299,534

Propane Marketing Services
134,604

 
140,864

Other (1)
254,305

 
346,781

Total assets
$
2,046,243

 
$
2,349,321

(1) Other assets not allocable to segments consist of corporate leasehold improvements and other assets.
Subsequent Event
Subsequent Events
Subsequent Events

Distribution

On April 25, 2017, we announced that the Board of Directors of our General Partner declared a quarterly cash distribution of $0.4125 per common unit for the quarter ended March 31, 2017, or $1.65 per common unit on an annualized basis. The distribution is expected to be paid on May 12, 2017, to unitholders of record as of the close of business on May 5, 2017.
Supplemental Cash Flow Information (Notes)
Supplemental Cash Flow Information
Supplemental Cash Flow Information

Supplemental cash flows and non-cash transactions consist of the following (in thousands):
 
Three months ended March 31,
 
2017
 
2016
Supplemental non-cash information
 
 
 
Increase (decrease) in accrued property, plant and equipment purchases
$
(1,371
)
 
$
1,876

Contributions from General Partner
4,000

 
2,500

Accrued distributions on convertible preferred units
8,885

 
4,471

Paid-in-kind distributions on convertible preferred units
2,733

 
4,380

Cancellation of escrow units
—

 
6,817

Organization, Basis of Presentation and Summary of Significant Accounting Policies (Policies)
Nature of Business 

Merger with JPE

On March 8, 2017, we completed the acquisition of JP Energy Partners LP (“JPE”), an entity controlled by ArcLight affiliates, in a unit-for-unit merger (“JPE Acquisition”). In connection with the transaction, we issued approximately 20.2 million common units to holders of the JPE common and subordinated units, including 9.8 million common units to ArcLight affiliates. In connection with the completion of the Acquisition, we entered into a supplemental indenture pursuant to which the JPE Entities jointly and severally, fully and unconditionally, guarantee the 8.50% Senior Notes.

As both we and JPE were controlled by ArcLight affiliates, the acquisition represents a transaction among entities under common control. Although we are the legal acquirer, JPE was considered the acquirer for accounting purposes as ArcLight obtained control of JPE prior to obtaining control of us on April 15, 2013. As a result, we adjusted our historical financial statements to reflect ArcLight’s acquisition cost basis back to April 15, 2013. In addition, the accompanying financial statements and related notes have been retrospectively adjusted to include the historical results of JPE prior to the effective date of the JPE Acquisition. The accompanying financial statements and related notes present the combined financial position, results of operations, cash flows and equity of JPE at historical cost.

Nature of business

We provide critical midstream infrastructure that links producers of natural gas, crude oil, NGLs, condensate and specialty chemicals to numerous intermediate and end-use markets. Through our six reportable segments, (1) gas gathering and processing services, (2) liquids pipelines and services, (3) natural gas transportation services, (4) offshore pipelines and services, (5) terminalling services and (6) propane marketing services, we engage in the business of gathering, treating, processing, and transporting natural gas; gathering, transporting, storing, treating and fractionating NGLs; gathering, storing and transporting crude oil and condensates; storing specialty chemical products; and distributing and selling propane and refined products. Most of our cash flow is generated from fee-based and fixed-margin compensation for gathering, processing, transporting and treating natural gas and crude oil, firm capacity reservation charges, interruptible transportation charges, guaranteed firm storage contracts, throughput fees and other optional charges associated with ancillary services.

Our primary assets are strategically located in some of the most prolific onshore and offshore producing regions and key demand markets in the United States. Our gathering and processing assets are primarily located in (i) the Permian Basin of West Texas, (ii) the Cotton Valley/Haynesville Shale of East Texas, (iii) the Eagle Ford Shale of South Texas, (iv) the Bakken Shale of North Dakota, and (v) offshore in the Gulf of Mexico. Our transmission and terminal assets are in key demand markets in Oklahoma, Alabama, Arkansas, Louisiana, Mississippi and Tennessee and in the Port of New Orleans in Louisiana and the Port of Brunswick in Georgia. Our propane marketing services include commercial and retail operations across 46 of the lower 48 states.

Basis of Presentation 

The unaudited financial information included in this Form 10-Q has been prepared on the same basis as the audited consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2016, except that the consolidated financial statements have been retrospectively adjusted to reflect the consolidation of JPE, as discussed above. The results of operations for the three months ended March 31, 2017 is not necessarily indicative of results expected for the full year. In the opinion of our management, such financial information reflects all adjustments necessary for a fair statement of the financial position and the results of operations for such interim periods in accordance with GAAP. All such adjustments are of a normal recurring nature. All intercompany items and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC.

Transactions between Entities under Common Control 
Transactions between entities under common control
 
We may enter into transactions with ArcLight affiliates whereby we receive midstream assets or other businesses in exchange for cash or Partnership equity. We account for the net assets acquired at the affiliate's historical cost basis as the transactions are between entities under common control. In certain cases, our historical financial statements will be revised to include the results attributable to the assets acquired from the later of June 2011 (the date Arclight affiliates obtained control of JPE) or the date the ArcLight affiliate obtained control of the assets acquired.

Use of Estimates 
Use of estimates

When preparing consolidated financial statements in conformity with GAAP, management must make estimates and assumptions based on information available at the time. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosures of contingent assets and liabilities as of the date of the financial statements. Estimates and assumptions are based on information available at the time such estimates and assumptions are made. Adjustments made with respect to the use of these estimates and assumptions often relate to information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements. Estimates and assumptions are used in, among other things, i) estimating unbilled revenues, product purchases and operating and general and administrative costs, ii) developing fair value assumptions, including estimates of future cash flows and discount rates, iii) analyzing long-lived assets, goodwill and intangible assets for possible impairment, iv) estimating the useful lives of assets and v) determining amounts to accrue for contingencies, guarantees and indemnifications. Actual results, therefore, could differ materially from estimated amounts.
Cash, Cash Equivalents and Restricted Cash 
Cash, cash equivalents and restricted cash

We consider all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value because of the short term to maturity of these investments.

From time to time we are required to maintain cash in separate accounts the use of which is restricted by the terms of our debt agreements, asset retirement obligations, contracted arrangements and management restrictions. Such amounts are included in Restricted cash in our condensed consolidated balance sheets.

Allowance for Doubtful Accounts 
Allowance for doubtful accounts

We establish provisions for losses on accounts receivable when we determine that we will not collect all or part of an outstanding balance. Collectability is reviewed regularly and an allowance is established or adjusted, as necessary, using the specific identification method.
Investment in Unconsolidated Affiliates 
Investment in unconsolidated affiliates

We hold membership interests in entities that own and operate natural gas pipeline systems and NGL and crude oil pipelines in and around Louisiana, Alabama, Mississippi and the Gulf of Mexico. While we have significant influence over these entities, we do not control them and therefore, they are accounted for using the equity method and are reported in Investment in unconsolidated affiliates in the condensed consolidated balance sheets. We evaluate the recoverability of these investments on a regular basis and recognize impairment write downs if we determine a loss in value represents an other than temporary decline.

Revenue Recognition 
Revenue recognition

We recognize revenue from the sale of commodities (e.g., natural gas, crude oil, NGLs, refined products or condensate) as well as from the provision of gathering, processing, transportation or storage services when all of the following criteria are met: i) persuasive evidence of an exchange arrangement exists, ii) delivery has occurred or services have been rendered, iii) the price is fixed or determinable, and iv) collectability is reasonably assured. We recognize revenue from the sale of commodities and the related cost of product sold on a gross basis for those transactions where we act as the principal and take title to commodities that are purchased for resale.

Revenue-related taxes collected from customers and remitted to taxing authorities, principally sales taxes, are presented on a net basis within the consolidated statements of operations.
New Accounting Pronouncements 
New Accounting Pronouncements

Accounting Standards Issued Not Yet Adopted

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, which amends the existing accounting guidance for revenue recognition. The update requires an entity to recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2015-14 was subsequently issued and deferred the effective date to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that period. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal Versus Agent Considerations, as further clarification on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing as further clarification on identifying performance obligations and the licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, as clarifying guidance on specific narrow scope improvements and practical expedients. We are in the process of reviewing our various customer arrangements in order to determine the impact that these updates will have on our consolidated financial statements and related disclosures. We have engaged a third-party consultant to assist with our review and are still in the process of evaluating the method of adoption for transitioning to the new standard.

In February 2016, the FASB issued ASU No. 2016-02 (Topic 842) "Leases" which supersedes the lease recognition requirements in Accounting Standards Codification Topic 840, "Leases". Under ASU No. 2016-02 lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. ASU No. 2016-02 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, and there are certain optional practical expedients that an entity may elect to apply. Full retrospective application is prohibited and early adoption by public entities is permitted. Based upon our evaluation to date, we anticipate that the adoption of ASU 2016-02 will have a material effect on our consolidated financial statements as we will be required to reflect our various lease obligations and associated asset use rights on our consolidated balance sheets. The adoption may also impact our debt covenant compliance and may require us to modify or replace certain of our existing information systems. We have not yet determined the timing or manner in which we will implement the updated guidance.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 320): Classification of Cash Receipts and Cash Payments”, which addresses eight specific cash flow issues with the objective of reducing the existing diversity of presentation and classification in the statement of cash flows. ASU No. 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal periods. Early adoption is permitted, but only if all aspects are adopted in the same period. We are currently evaluating the impact this update will have on our consolidated statements of cash flows and related disclosures.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”, which aims to improve the disclosure of the change during the period in total cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts on the statement of cash flows. The update is effective beginning first quarter of 2018. Early adoption is permitted, but it must occur in the first interim period. Any adjustments required in early adoption of this update should be reflected as of the beginning of the fiscal year that includes the interim period and should be applied using a retrospective transition method to each period. We are currently evaluating the impact that this update will have on our consolidated statement of cash flows and related disclosures.

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” The guidance provides criteria for use in determining when to conclude a “set” (as defined in the original guidance) being acquired or disposed in a transaction is not a business. Where the criteria are not met, more stringent screening has been provided to define a set as a business without an output, as more narrowly defined within the guidance. ASU No. 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments should be applied prospectively on or after the effective date. Early adoption is permitted. The adoption of ASU 2017-01 is not expected to have a material impact on our consolidated financial statements and related disclosures associated with acquisitions subsequent to the effective date.
In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, in which the guidance on testing for goodwill was updated by the elimination of Step 2 in the determination on whether goodwill should be considered impaired. The annual and/or interim assessments are still required to be completed. Further, the guidance eliminates the requirement to assess reporting units with zero or negative carrying values, however, the carrying values for all reporting units must be disclosed. ASU No. 2017-04 is effective for annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the impact this update will have on our consolidated financial statements and related disclosures.
Inventory (Tables)
Schedule of Inventory
Inventory consists of the following as of March 31, 2017 and December 31, 2016 (in thousands):
 
 
March 31, 2017
 
December 31, 2016
Crude oil
 
$
3,969

 
$
1,216

NGLs
 
3,505

 
3,482

Refined products
 
439

 
291

Materials, supplies and equipment
 
1,701

 
1,787

Total inventory
 
$
9,614

 
$
6,776

Other Current Assets (Tables)
Schedule of Other Current Assets
Other current assets consist of the following (in thousands):
 
March 31, 2017
 
December 31, 2016
Prepaid insurance
$
7,729

 
$
9,702

Insurance receivables
7,574

 
2,895

Due from related parties
7,083

 
4,805

Other receivables
3,928

 
2,998

Risk management assets
534

 
964

Other assets
1,164

 
6,303

   Total
$
28,012


$
27,667

Risk Management Activities (Tables)
Schedule of notional amounts of outstanding derivative positions 
The following table summarizes the net notional volume purchases (sales) of our outstanding commodity-related derivatives, excluding those contracts that qualified for the NPNS exception as of March 31, 2017 and December 31, 2016, none of which were designated as hedges for accounting purposes.

 
 
March 31, 2017
 
December 31, 2016
Commodity Swaps
 
Volume
 
Maturity
 
Volume
 
Maturity
Propane Fixed Price (Gallons)
 
7,767,296

 
April 30,2017 - December 31, 2019
 
4,364,880

 
January 31, 2017 - November 30, 2018
Crude Oil Fixed Price (Barrels)
 
61,000
 
May 31, 2017 - June 30, 2017
 
—
 
—
Crude Oil Basis (Barrels)
 
—
 
—
 
180,000

 
January 25, 2017- March 25, 2017
As of March 31, 2017, our outstanding interest rate swap contracts consist of the following (in thousands):

Notional Amount
Term
Fair Value
$100,000
April 1, 2017 through December 29, 2017
$101
$100,000
December 29, 2017 through January 29, 2019
$287
$200,000
April 1, 2017 through September 3, 2019
$2,092
$100,000
January 1, 2018 through December 31, 2021
$2,847
$150,000
January 1, 2018 through December 31, 2022
$4,732
 
 
$10,059
Fair value associated with commodity derivative instruments 
The following table summarizes the fair values of our derivative contracts (before netting adjustments) included in the condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016 (in thousands):
 
 
 
Asset Derivatives
 
Liability Derivatives
Type
Balance Sheet Classification
 
March 31,
2017
 
December 31, 2016
 
March 31,
2017
 
December 31, 2016
Commodity swaps
Other current assets
 
$
200

 
$
607

 
$
—

 
$
—

Commodity swaps
Accrued expenses and other current liabilities
 
—

 
—

 
(316
)
 
(1
)
Commodity swaps
Risk management assets - long term
 
3

 
37

 
—

 
—

Commodity swaps
Other liabilities
 
—

 
—

 
(201
)
 
(1
)
Interest rate swaps
Other current assets
 
337

 
—

 
—

 
—

Interest rate swaps
Accrued expenses and other current liabilities
 
—

 
—

 
—

 
(252
)
Interest rate swaps
Risk management assets- long term
 
9,722

 
10,628

 
—

 
—

Weather derivatives
Other current assets
 
$
172

 
$
429

 
$
—

 
$
—


The following tables present the fair value of our recognized derivative assets and liabilities on a gross basis and amounts offset in the condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016 that are subject to enforceable master netting arrangements (in thousands):
 
 
Gross Risk Management Position
 
Netting Adjustments
 
Net Risk Management Position presented in the balance sheet
Balance Sheet Classification
 
March 31,
2017
 
December 31, 2016
 
March 31,
2017
 
December 31, 2016
 
March 31,
2017
 
December 31, 2016
Other current assets
 
$
709

 
$
1,036

 
$
(175
)
 
$
(72
)
 
$
534

 
$
964

Risk management assets- long term
 
9,725

 
10,665

 
(101
)
 
(1
)
 
9,624

 
10,664

Total assets
 
$
10,434

 
$
11,701

 
$
(276
)
 
$
(73
)
 
$
10,158

 
$
11,628

 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued expenses and other liabilities
 
$
(316
)
 
$
(253
)
 
$
175

 
$
72

 
$
(141
)
 
$
(181
)
Other liabilities
 
(201
)
 
(1
)
 
101

 
1

 
(100
)
 
—

Total liabilities
 
$
(517
)
 
$
(254
)
 
$
276

 
$
73

 
$
(241
)
 
$
(181
)
Realized and unrealized gains (losses) with commodity and interst rate derivative instruments 
For the three months ended March 31, 2017 and 2016, respectively, the realized and unrealized gains (losses) associated with our commodity, interest rate and weather derivative instruments were recorded in our unaudited condensed consolidated statements of operations as follows (in thousands):
 
Realized
 
Unrealized
2017
 
 
 
Gains (losses) on commodity derivatives, net
$
699

 
$
(956
)
Interest expense
(65
)
 
(317
)
Direct operating expenses
(257
)
 
—

Total
$
377

 
$
(1,273
)
2016
 
 
 
Gains (losses) on commodity derivatives, net
$
(388
)
 
$
150

Interest expense
—

 
(1,532
)
Direct operating expenses
(219
)
 
—

Total
$
(607
)
 
$
(1,382
)
Property, Plant and Equipment, Net (Tables)
Property, plant and equipment, net
Property, plant and equipment, net, consists of the following (in thousands):
 
Useful Life
(in years)
 
March 31,
2017
 
December 31,
2016
Land
N/A
 
$
21,390

 
$
21,811

Construction in progress
N/A
 
117,288

 
131,449

Buildings and improvements
4 to 40
 
24,407

 
24,323

Transportation equipment
5 to 15
 
45,519

 
44,060

Processing and treating plants
8 to 40
 
139,553

 
137,014

Pipelines, compressors and right-of-way
3 to 40
 
776,867

 
754,911

Storage
3 to 40
 
210,685

 
210,579

Equipment
3 to 31
 
107,715

 
104,235

Total property, plant and equipment
 
 
1,443,424

 
1,428,382

Accumulated depreciation
 
 
(301,122
)
 
(283,379
)
Property, plant and equipment, net
 
 
$
1,142,302

 
$
1,145,003

Goodwill and Intangible Assets, Net (Tables)
Schedule of Goodwill 
Goodwill as of March 31, 2017 and December 31, 2016 consisted of the following (in thousands):
 
March 31,
2017
 
December 31,
2016
Liquids Pipelines and Services
$
124,710

 
$
124,710

Terminalling Services
77,425

 
77,425

Propane Marketing Services
15,363

 
15,363

 
$
217,498

 
$
217,498

Schedule of Finite-Lived Intangible Assets 
Intangible assets, net, consist of the following (in thousands):
 
March 31, 2017
 
Gross carrying amount
 
Accumulated amortization
 
Net carrying amount
Customer relationships
$
133,503

 
$
(35,806
)
 
$
97,697

Customer contracts
95,594

 
(35,634
)
 
59,960

Dedicated acreage
53,350

 
(4,882
)
 
48,468

Collaborative arrangements
11,884

 
(778
)
 
11,106

Noncompete agreements
3,423

 
(3,175
)
 
248

Other
751

 
(215
)
 
536

Total
$
298,505

 
$
(80,490
)
 
$
218,015

 
 
 
 
 
 
 
December 31, 2016
 
Gross carrying amount
 
Accumulated amortization
 
Net carrying amount
Customer relationships
$
133,503

 
$
(31,471
)
 
$
102,032

Customer contracts
95,594

 
(33,414
)
 
62,180

Dedicated acreage
53,350

 
(4,439
)
 
48,911

Collaborative arrangements
11,884

 
(601
)
 
11,283

Noncompete agreements
3,423

 
(3,086
)
 
337

Other
751

 
(211
)
 
540

Total
$
298,505

 
$
(73,222
)
 
$
225,283

Investment in unconsolidated affiliates (Tables)
Investments in and Advances to Affiliates 
The following table presents the activity in our investments in unconsolidated affiliates (in thousands):
 
Delta House (1)
 
Emerald Transactions
 
 
 
 
 
FPS
 
OGL
 
Destin
 
Tri-States
 
Okeanos
 
Wilprise
 
MPOG
 
Total
Ownership % at March 31, 2017
20.1
%
 
20.1
%
 
49.7
%
 
16.7
%
 
66.7
%
 
25.3
%
 
66.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balances at December 31, 2016
$
64,483

 
$
25,450

 
$
110,882

 
$
55,022

 
$
27,059

 
$
4,944

 
$
4,148

 
$
291,988

  Earnings in unconsolidated affiliates
7,088

 
3,636

 
2,126

 
899

 
1,572

 
188

 
(107
)
 
15,402

  Distributions
(6,986
)
 
(3,555
)
 
(6,258
)
 
(1,100
)
 
(3,667
)
 
(228
)
 
(700
)
 
(22,494
)
Balances at March 31, 2017
$
64,585

 
$
25,531

 
$
106,750

 
$
54,821


$
24,964


$
4,904


$
3,341


$
284,896

 

(1) Represents direct and indirect ownership interests in Class A Units.

Equity Method Investments 
The following tables present the summarized combined financial information for our equity investments (amounts represent 100% of investee financial information):
Balance Sheets:
March 31, 2017
 
December 31, 2016
Current assets
$
87,406

 
$
120,600

Non-current assets
1,353,629

 
1,387,675

Current liabilities
62,231

 
64,099

Non-current liabilities
$
584,742

 
$
623,650


 
Three months ended March 31,
Statements of Operations:
2017
 
2016
Revenue
$
98,439

 
$
65,542

Cost of sales and operating expenses
18,300

 
5,392

Gross profit
80,139

 
60,150

Income from continuing operations
58,595

 
55,548

Net income
$
58,595

 
$
55,548

Accrued Expenses and Other Current Liabilities (Tables)
Schedule of Accrued Liabilities
Accrued expenses and other current liabilities consists of the following (in thousands):
 
 
March 31, 2017
 
December 31, 2016
Capital expenditures
 
$
11,302

 
$
14,499

Accrued interest
 
8,526

 
5,743

Convertible preferred unit distributions
 
6,707

 
7,103

Employee compensation
 
7,881

 
10,804

Current portion of asset retirement obligation
 
6,499

 
6,499

Legal accrual
 
5,150

 
—

Additional Blackwater acquisition consideration
 
5,000

 
5,000

Transaction costs
 
4,539

 
3,000

Royalties payable
 
3,597

 
3,926

Escrow settlement
 
3,135

 
—

Customer deposits
 
2,083

 
3,080

Taxes payable
 
1,809

 
1,066

Due to related parties
 
1,523

 
4,072

Gas imbalances payable
 
1,454

 
1,098

Deferred financing costs
 
—

 
2,743

Recoverable gas costs
 
393

 
1,126

Other
 
11,289

 
11,525

 
 
$
80,887


$
81,284

Asset Retirement Obligations (Tables)
Schedule of Change in Asset Retirement Obligation
The following table presents activity in our asset retirement obligations for the three months ended March 31, 2017 (in thousands):
Non-current balance
$
44,363

Current balance
6,499

Balances at December 31, 2016
$
50,862

Expenditures
(41
)
Accretion expense
487

Balances at March 31, 2017
$
51,308

Less: current portion
6,499

Noncurrent asset retirement obligation
$
44,809

Debt Obligations (Tables)
Outstanding borrowings under the credit facility
Our outstanding debt consists of the following (in thousands):
 
March 31, 2017
 
December 31, 2016
Revolving credit facility
$
644,842

 
$
888,250

8.5% Senior Notes, due 2021
300,000

 
300,000

3.77% Senior Notes, due 2031 (Non-Recourse)
60,000

 
60,000

Other debt
1,546

 
3,809

Total debt obligations
1,006,388

 
1,252,059

Unamortized debt issuance costs (1)
(10,228
)
 
(11,036
)
Total debt
996,160

 
1,241,023

Less: Current portion, including unamortized debt issuance costs
(3,223
)
 
(5,485
)
Long term debt
$
992,937

 
$
1,235,538

(1) Unamortized deferred financing costs related to the Credit Agreement are included in our condensed consolidated balance sheets in Other assets, net.

Convertible Preferred Units (Tables)
Schedule of Preferred Units
Our convertible preferred units consist of the following (in thousands):
 
Series A
 
Series C
 
Series D
 
Units
$
 
Units
$
 
Units
$
December 31, 2016
10,107

$
181,386

 
8,792

$
118,229

 
2,333

$
34,475

Paid in kind unit distributions
159

2,181

 
—

—

 
—

—

March 31, 2017
10,266

$
183,567

 
8,792

$
118,229

 
2,333

$
34,475

Partners Capital (Tables)
Schedule of Units Outstanding and Distributions

We made the following distributions (in thousands):

 
 
Three months ended March 31,
 
 
2017
 
2016
Series A Units
 
 
 
 
Cash Paid
 
$
2,527

 
$
—

Accrued
 
4,296

 
4,471

Paid-in-kind units
 
2,733

 
4,380

 
 
 
 
 
Series C Units
 
 
 
 
Cash Paid
 
3,627

 
—

Accrued
 
3,627

 
—

 
 
 
 
 
Series D Units
 
 
 
 
Cash Paid
 
962

 
—

Accrued
 
962

 
—

 
 
 
 
 
Limited Partner Units
 
 
 
 
Cash Paid
 
24,915

 
27,000

 
 
 
 
 
General Partner Units
 
 
 
 
Cash Paid
 
167

 
2,028

 
 
 
 
 
Summary
 
 
 
 
Cash Paid
 
32,198

 
29,028

Accrued
 
8,885

 
4,471

Paid-in-kind units
 
2,733

 
4,380




The following table presents unit activity (in thousands):
 
 
General
Partner Interest
 
Limited Partner Interest
Balances at December 31, 2016
 
680

 
51,351

LTIP vesting
 
—

 
259

Issuance of common units
 
—

 
21

Issuance of GP units
 
8

 
—

Balances at March 31, 2017
 
688

 
51,631

Net Income (Loss) per Limited Partner Unit (Tables)
Schedule of Calculation for Net Income (Loss) Per Limited Partner Unit
The calculation of basic and diluted limited partners' net income (loss) per common unit is summarized below (in thousands, except per unit amounts):

 
Three months ended March 31,
 
2017
 
2016
Net (loss) from continuing operations
$
(28,881
)
 
$
(10,064
)
Less: Net income (loss) attributable to noncontrolling interests
1,303

 
(3
)
Net loss from continuing operations attributable to the Partnership
(30,184
)
 
(10,061
)
Less:
 
 
 
Distributions on Series A Units
4,296

 
4,471

Distributions on Series C Units
3,627

 
—

Distributions on Series D Units
962

 
—

General partner's distribution
200

 
2,028

General partner's share in undistributed loss
(560
)
 
(418
)
Net loss from continuing operations attributable to Limited Partners
(38,709
)
 
(16,142
)
Net loss from discontinued operations attributable to Limited Partners
—

 
(539
)
Net loss attributable to Limited Partners
$
(38,709
)
 
$
(16,681
)
 
 
 
 
Weighted average number of common units used in computation of Limited Partners' net loss per common unit - basic and diluted
51,451

 
50,925

 
 
 
 
Limited Partners' net loss from continuing operations per unit
$
(0.75
)
 
$
(0.32
)
Limited Partners' net loss from discontinued operations per unit
—

 
(0.01
)
Limited Partners' net loss per common unit (1)
$
(0.75
)
 
$
(0.33
)
(1) Potential common unit equivalents are antidilutive for all periods and, as a result, have been excluded from the determination of diluted limited partners' net income (loss) per common unit.
Long-Term Incentive Plan (Tables)
Table summarizes our unit-based awards
The following table summarizes activity in our phantom unit-based awards for the three months ended March 31, 2017:

 
 
Units
 
Weighted-Average Grant Date Fair Value Per Unit
Outstanding units at December 31, 2016
 
1,558,835

 
$
6.98

Granted
 
2,000

 
11.20

Forfeited
 
(964
)
 
30.14

Vested
 
(319,572
)
 
7.41

Outstanding units at March 31, 2017
 
1,240,299

 
$
6.86

Reportable Segments (Tables)
Segment information
A reconciliation from Segment Gross Margin to Net Income attributable to the Partnership for the periods ended March 31, 2017 and March 31, 2016 is below (in thousands):

Three months ended March 31,

2017
 
2016
Reconciliation of Segment Gross Margin to Net income (loss) attributable to the Partnership:
 
 
 
Gas Gathering and Processing Services segment gross margin
$
11,251

 
$
11,619

Liquid Pipelines and Services segment gross margin
6,470

 
5,850

Natural Gas Transportation Services segment gross margin
6,119

 
5,563

Offshore Pipelines and Services segment gross margin
25,802

 
13,265

Terminalling Services segment gross margin (1)
11,160

 
9,443

Propane Marketing Services segment gross margin
19,302

 
28,305

Total Segment Gross Margin
80,104

 
74,045

Less:
 
 
 
Other direct operating expenses (1)
27,015

 
27,966

Total Operating Margin
53,089

 
46,079

Plus:
 
 
 
Loss on commodity derivatives, net
(257
)
 
(238
)
Less:
 
 
 
Corporate expenses
32,844

 
21,101

Depreciation, amortization and accretion expense
29,351

 
25,041

(Gain) loss on sale of assets, net
(228
)
 
1,122

Interest expense
17,966

 
8,302

Other income
(14
)
 
(31
)
Other, net
671

 
(365
)
Income tax expense
1,123

 
735

Loss from discontinued operations, net of tax
—

 
539

Net income (loss) attributable to noncontrolling interest
1,303

 
(3
)
Net income (loss) attributable to the Partnership
$
(30,184
)
 
$
(10,600
)
_______________________
(1) Other direct operating expenses include Gas Gathering and Processing segment direct operating expenses of $8.1 million and $8.5 million, respectively, Liquid Pipelines and Services segment direct operating expenses of $2.1 million and $2.5 million, respectively, Natural Gas Transportation Services segment direct operating expenses of $1.2 million and $1.2 million, respectively, Offshore Pipelines and Services segment direct operating expenses of $2.6 million and $2.3 million, respectively, Propane Marketing Services segment direct operating expenses of $13.1 million and $13.5 million, respectively, for the three months ended March 31, 2017 and 2016. Direct operating expenses related to our Terminalling Services segment of $3.1 million and $2.6 million for the three months ended March 31, 2017 and 2016, respectively, are included within the calculation of Terminalling Services segment gross margin.







The following tables set forth our segment information for the three months ended March 31, 2017 and 2016 (in thousands):
 
Three months ended March 31, 2017
 
Gas Gathering and Processing Services
 
Liquid Pipelines and Services
 
Natural Gas Transportation Services
 
Offshore Pipelines and Services
 
Terminalling Services
 
Propane Marketing Services
 
Total
Revenue
$
34,407

 
$
82,039

 
$
12,438

 
$
14,831

 
$
18,626

 
$
37,548

 
$
199,889

Gain (loss) on commodity derivatives, net
(7
)
 
372

 
—

 
—

 
—

 
(622
)
 
(257
)
Total revenue
34,400

 
82,411

 
12,438

 
14,831

 
18,626

 
36,926

 
199,632

Earnings in unconsolidated affiliates
—

 
1,088

 
—

 
14,314

 
—

 
—

 
15,402

Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of Sales
23,187

 
77,077

 
6,260

 
3,343

 
4,393

 
18,525

 
132,785

Direct operating expenses
8,065

 
2,074

 
1,235

 
2,579

 
3,073

 
13,062

 
30,088

Corporate expenses
 
 
 
 
 
 
 
 
 
 
 
 
32,844

Depreciation, amortization and accretion expense
 
 
 
 
 
 
 
 
 
 
 
 
29,351

Gain on sale of assets, net
 
 
 
 
 
 
 
 
 
 
 
 
(228
)
Total operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
224,840

Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
17,966

Other (income) expense
 
 
 
 
 
 
 
 
 
 
 
 
(14
)
Loss from continuing operations before taxes
 
 
 
 
 
 
 
 
 
 
 
 
(27,758
)
Income tax expense
 
 
 
 
 
 
 
 
 
 
 
 
1,123

Net loss
 
 
 
 
 
 
 
 
 
 
 
 
(28,881
)
Less: Net income attributable to non-controlling interests
 
 
 
 
 
 
 
 
 
 
 
 
1,303

Net loss attributable to the Partnership
 
 
 
 
 
 
 
 
 
 
 
 
$
(30,184
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment gross margin
$
11,251

 
$
6,470

 
$
6,119

 
$
25,802

 
$
11,160

 
$
19,302

 


 
Three months ended March 31, 2016
 
Gas Gathering and Processing Services
 
Liquid Pipelines and Services
 
Natural Gas Transportation Services
 
Offshore Pipelines and Services
 
Terminalling Services
 
Propane Marketing Services
 
Total
Revenue
$
23,295

 
$
44,515

 
$
9,795

 
$
7,003

 
$
14,393

 
$
44,613

 
$
143,614

Gain (loss) on commodity derivatives, net
(103
)
 
(233
)
 
—

 
—

 
(175
)
—

273

 
(238
)
Total revenue
23,192

 
44,282

 
9,795

 
7,003

 
14,218

 
44,886

 
143,376

Earnings in unconsolidated affiliates
—

 
—

 
—

 
7,343

 
—

 
—

 
7,343




 


 


 


 


 


 


Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of Sales
11,707

 
38,654

 
4,224

 
1,081

 
2,205

 
16,067

 
73,938

Direct operating expenses
8,548

 
2,467

 
1,227

 
2,253

 
2,609

 
13,471

 
30,575

Corporate expenses
 
 
 
 
 
 
 
 
 
 
 
 
21,101

Depreciation, amortization and accretion expense
 
 
 
 
 
 
 
 
 
 
 
 
25,041

Loss on sale of assets, net
 
 
 
 
 
 
 
 
 
 
 
 
1,122

Total operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
151,777

Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
8,302

Other (income) expense
 
 
 
 
 
 
 
 
 
 
 
 
(31
)
Loss from continuing operations before taxes
 
 
 
 
 
 
 
 
 
 
 
 
(9,329
)
Income tax expense
 
 
 
 
 
 
 
 
 
 
 
 
735

Income (loss from continuing operation
 
 
 
 
 
 
 
 
 
 
 
 
(10,064
)
Loss from discontinued operations, net of tax
 
 
 
 
 
 
 
 
 
 
 
 
539

Net loss
 
 
 
 
 
 
 
 
 
 
 
 
(10,603
)
Less: Net loss attributable to non-controlling interests
 
 
 
 
 
 
 
 
 
 
 
 
(3
)
Net loss attributable to the Partnership
 
 
 
 
 
 
 
 
 
 
 
 
$
(10,600
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment gross margin
$
11,619

 
$
5,850

 
$
5,563

 
$
13,265

 
$
9,443

 
$
28,305

 
 
















A reconciliation of total assets by segment to the amounts included in the condensed consolidated balance sheets follows:
 
March 31,
 
December 31,
 
2017
 
2016
Segment assets:
 
 
 
Gas Gathering and Processing Services
$
390,334

 
$
532,009

Liquid Pipelines and Services
447,121

 
422,636

Offshore Pipelines and Services
365,507

 
385,893

Natural Gas Transportation Services
176,740

 
221,604

Terminalling Services
277,632

 
299,534

Propane Marketing Services
134,604

 
140,864

Other (1)
254,305

 
346,781

Total assets
$
2,046,243

 
$
2,349,321

(1) Other assets not allocable to segments consist of corporate leasehold improvements and other assets.
Supplemental Cash Flow Information (Tables)
Schedule of Supplemental Cash Flow Information
Supplemental cash flows and non-cash transactions consist of the following (in thousands):
 
Three months ended March 31,
 
2017
 
2016
Supplemental non-cash information
 
 
 
Increase (decrease) in accrued property, plant and equipment purchases
$
(1,371
)
 
$
1,876

Contributions from General Partner
4,000

 
2,500

Accrued distributions on convertible preferred units
8,885

 
4,471

Paid-in-kind distributions on convertible preferred units
2,733

 
4,380

Cancellation of escrow units
—

 
6,817

Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
segments
Mar. 31, 2016
Dec. 31, 2016
Mar. 8, 2017
Senior Notes [Member]
8.50% Senior Notes [Member]
Dec. 28, 2016
Senior Notes [Member]
Senior Notes, Due 2021 [Member]
Mar. 8, 2017
General Partner [Member]
Mar. 8, 2017
Affiliated Entity [Member]
General Partner [Member]
Mar. 8, 2017
JPE Energy Partners [Member]
Mar. 8, 2017
JPE Energy Partners [Member]
Affiliated Entity [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
Number of Reportable Segments
6 
 
 
 
 
 
 
 
 
General Partners' Capital Account, Units Issued
 
 
 
 
 
20,200 
9,800 
20,200 
9,800 
Income tax expense
$ 1,123 
$ 735 
 
 
 
 
 
 
 
General partners' capital account, percentage
77.00% 
 
 
 
 
 
 
 
 
Limited partners' capital account, percentage
23.00% 
 
 
 
 
 
 
 
 
Debt instrument, interest rate, stated percentage
 
 
 
8.50% 
8.50% 
 
 
 
 
Repayments of lines of credit
325,908 
59,450 
 
 
 
 
 
 
 
Allowance for doubtful accounts receivable
$ 2,480 
 
$ 1,871 
 
 
 
 
 
 
Acquisitions (Narrative) (Details)
In Thousands, unless otherwise specified
0 Months Ended
Mar. 8, 2017
Affiliated Holders [Member]
 
Business Acquisition [Line Items]
 
Merger agreement, conversion ratio
0.5775 
Public Unit Consideration [Member]
 
Business Acquisition [Line Items]
 
Merger agreement, conversion ratio
0.5225 
General Partner [Member]
 
Business Acquisition [Line Items]
 
General Partners' Capital Account, Units Issued
20,200 
Affiliated Entity [Member] |
General Partner [Member]
 
Business Acquisition [Line Items]
 
General Partners' Capital Account, Units Issued
9,800 
JPE Energy Partners [Member]
 
Business Acquisition [Line Items]
 
Number of operating segments
3 
Inventory (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Inventory Disclosure [Abstract]
 
 
Crude oil
$ 3,969 
$ 1,216 
NGLs
3,505 
3,482 
Refined products
439 
291 
Materials, supplies and equipment
1,701 
1,787 
Total inventory
$ 9,614 
$ 6,776 
Other Current Assets (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
 
 
Prepaid insurance
$ 7,729 
$ 9,702 
Insurance receivables
7,574 
2,895 
Other receivables
3,928 
2,998 
Other assets
1,164 
6,303 
Due from related parties
7,083 
4,805 
Risk management assets
534 
964 
Total
$ 28,012 
$ 27,667 
Risk Management Activities (Interest Rate Swaps) (Details) (Interest Rate Swap [Member], USD $)
Mar. 31, 2017
Derivative [Line Items]
 
Fair Value
$ 10,059,000 
April 1, 2017 through December 29, 2017
 
Derivative [Line Items]
 
Notional Amount
100,000,000 
Fair Value
101,000 
April 1, 2017 through September 3, 2019
 
Derivative [Line Items]
 
Notional Amount
100,000,000 
Fair Value
287,000 
January 1, 2018 through December 31, 2021
 
Derivative [Line Items]
 
Notional Amount
200,000,000 
Fair Value
2,092,000 
January 1, 2018 through December 31, 2022
 
Derivative [Line Items]
 
Notional Amount
100,000,000 
Fair Value
2,847,000 
Wells Fargo Swap 5 [Member]
 
Derivative [Line Items]
 
Notional Amount
150,000,000 
Fair Value
$ 4,732,000 
Risk Management Activities (Fair Value of Commodity Derivatives) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Derivative Asset [Abstract]
 
 
Gross Risk Management Position
$ 10,434 
$ 11,701 
Netting Adjustments
(276)
(73)
Net Risk Management Position presented in the balance sheet
10,158 
11,628 
Derivative Liability [Abstract]
 
 
Gross Risk Management Position
276 
73 
Netting Adjustments
(517)
(254)
Net Risk Management Position presented in the balance sheet
(241)
(181)
Other Current Assets [Member] |
Commodity derivatives [Member]
 
 
Derivative Asset [Abstract]
 
 
Gross Risk Management Position
200 
607 
Derivative Liability [Abstract]
 
 
Gross Risk Management Position
0 
0 
Other Current Assets [Member] |
Interest Rate Swap [Member]
 
 
Derivative Asset [Abstract]
 
 
Gross Risk Management Position
337 
0 
Derivative Liability [Abstract]
 
 
Gross Risk Management Position
0 
0 
Other Current Assets [Member] |
Weather Derivative [Member]
 
 
Derivative Asset [Abstract]
 
 
Gross Risk Management Position
172 
429 
Derivative Liability [Abstract]
 
 
Gross Risk Management Position
0 
0 
Accrued Expenses and Other Liabilities [Member] |
Commodity derivatives [Member]
 
 
Derivative Asset [Abstract]
 
 
Gross Risk Management Position
0 
0 
Derivative Liability [Abstract]
 
 
Gross Risk Management Position
(316)
(1)
Accrued Expenses and Other Liabilities [Member] |
Interest Rate Swap [Member]
 
 
Derivative Asset [Abstract]
 
 
Gross Risk Management Position
0 
0 
Derivative Liability [Abstract]
 
 
Gross Risk Management Position
0 
(252)
Risk Management Assets [Member]
 
 
Derivative Asset [Abstract]
 
 
Gross Risk Management Position
709 
1,036 
Netting Adjustments
(175)
(72)
Net Risk Management Position presented in the balance sheet
534 
964 
Risk Management Assets - Long Term [Member]
 
 
Derivative Asset [Abstract]
 
 
Gross Risk Management Position
9,725 
10,665 
Netting Adjustments
(101)
(1)
Net Risk Management Position presented in the balance sheet
9,624 
10,664 
Risk Management Assets - Long Term [Member] |
Commodity derivatives [Member]
 
 
Derivative Asset [Abstract]
 
 
Gross Risk Management Position
3 
37 
Derivative Liability [Abstract]
 
 
Gross Risk Management Position
0 
0 
Risk Management Assets - Long Term [Member] |
Interest Rate Swap [Member]
 
 
Derivative Asset [Abstract]
 
 
Gross Risk Management Position
9,722 
10,628 
Derivative Liability [Abstract]
 
 
Gross Risk Management Position
0 
0 
Other Liabilities [Member] |
Commodity derivatives [Member]
 
 
Derivative Asset [Abstract]
 
 
Gross Risk Management Position
0 
0 
Derivative Liability [Abstract]
 
 
Gross Risk Management Position
(201)
(1)
Risk Management Liabilities [Member]
 
 
Derivative Liability [Abstract]
 
 
Gross Risk Management Position
(316)
(253)
Netting Adjustments
175 
72 
Net Risk Management Position presented in the balance sheet
(141)
(181)
Risk Management Liabilities - Long Term [Member]
 
 
Derivative Liability [Abstract]
 
 
Gross Risk Management Position
(201)
(1)
Netting Adjustments
101 
1 
Net Risk Management Position presented in the balance sheet
$ (100)
$ 0 
Risk Management Activities (Realized and Unrealized Gains (Losses)) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Derivatives, Fair Value [Line Items]
 
 
Gain (loss) on commodity derivatives, net
$ (257)
$ (238)
Commodity derivatives [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Gain (loss) on commodity derivatives, net
377 
(607)
Unrealized gain (loss) on derivatives
(1,273)
(1,382)
Gain (Loss) on Derivative Instruments [Member] |
Commodity derivatives [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Gain (loss) on commodity derivatives, net
699 
(388)
Unrealized gain (loss) on derivatives
(956)
150 
Interest Expense [Member] |
Commodity derivatives [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Gain (loss) on commodity derivatives, net
(65)
0 
Unrealized gain (loss) on derivatives
(317)
(1,532)
Direct operating expenses [Member] |
Commodity derivatives [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Gain (loss) on commodity derivatives, net
(257)
(219)
Unrealized gain (loss) on derivatives
$ 0 
$ 0 
Risk Management Activities (Details Textual) (USD $)
3 Months Ended
Mar. 31, 2017
Jun. 30, 2016
Dec. 31, 2016
Weather Contract [Member]
 
 
 
Derivative [Line Items]
 
 
 
Potential proceeds from derivative contract
 
$ 30,000,000 
 
Derivative term of contract
1 year 0 months 0 days 
 
 
Debt instrument, unamortized premium
200,000 
 
400,000 
April 1, 2017 through December 29, 2017 |
Interest Rate Swap [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional Amount
100,000,000 
 
 
April 1, 2017 through September 3, 2019 |
Interest Rate Swap [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional Amount
$ 100,000,000 
 
 
Property, Plant and Equipment, Net (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Mar. 31, 2017
Land [Member]
Dec. 31, 2016
Land [Member]
Mar. 31, 2017
Construction in progress [Member]
Dec. 31, 2016
Construction in progress [Member]
Mar. 31, 2017
Buildings and improvements [Member]
Dec. 31, 2016
Buildings and improvements [Member]
Mar. 31, 2017
Transportation equipment [Member]
Dec. 31, 2016
Transportation equipment [Member]
Mar. 31, 2017
Processing and treating plants [Member]
Dec. 31, 2016
Processing and treating plants [Member]
Mar. 31, 2017
Pipelines and compressors [Member]
Dec. 31, 2016
Pipelines and compressors [Member]
Mar. 31, 2017
Storage [Member]
Dec. 31, 2016
Storage [Member]
Mar. 31, 2017
Equipment [Member]
Dec. 31, 2016
Equipment [Member]
Mar. 31, 2017
Maximum [Member]
Buildings and improvements [Member]
Mar. 31, 2017
Maximum [Member]
Transportation equipment [Member]
Mar. 31, 2017
Maximum [Member]
Processing and treating plants [Member]
Mar. 31, 2017
Maximum [Member]
Pipelines and compressors [Member]
Mar. 31, 2017
Maximum [Member]
Office furniture and fixtures [Member]
Mar. 31, 2017
Maximum [Member]
Storage [Member]
Mar. 31, 2017
Maximum [Member]
Equipment [Member]
Mar. 31, 2017
Minimum [Member]
Buildings and improvements [Member]
Mar. 31, 2017
Minimum [Member]
Transportation equipment [Member]
Mar. 31, 2017
Minimum [Member]
Processing and treating plants [Member]
Mar. 31, 2017
Minimum [Member]
Pipelines and compressors [Member]
Mar. 31, 2017
Minimum [Member]
Office furniture and fixtures [Member]
Mar. 31, 2017
Minimum [Member]
Storage [Member]
Mar. 31, 2017
Minimum [Member]
Equipment [Member]
Property, Plant and Equipment, Net [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property plant and equipment in useful life
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
40 years 
15 years 
40 years 
40 years 
10 years 
40 years 
20 years 
4 years 
5 years 
8 years 
3 years 
3 years 
20 years 
5 years 
Property plant and equipment gross
$ 1,443,424 
$ 1,428,382 
$ 21,390 
$ 21,811 
$ 117,288 
$ 131,449 
$ 24,407 
$ 24,323 
$ 45,519 
$ 44,060 
$ 139,553 
$ 137,014 
$ 776,867 
$ 754,911 
$ 210,685 
$ 210,579 
$ 107,715 
$ 104,235 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated depreciation
(301,122)
(283,379)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
$ 1,142,302 
$ 1,145,003 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property, Plant and Equipment (Details Textual) (USD $)
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Dec. 31, 2016
Property, Plant and Equipment [Line Items]
 
 
 
Property plant and equipment gross
$ 1,443,424,000 
 
$ 1,428,382,000 
Interest costs capitalized
1,000,000 
500,000 
 
Depreciation
21,600,000 
 
 
FERC Regulated Assets [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property plant and equipment gross
$ 305,100,000 
 
$ 291,100,000 
Goodwill and Intangible Assets, Net (Schedule of Goodwill) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Goodwill [Line Items]
 
 
Goodwill
$ 217,498 
$ 217,498 
Liquid Pipelines and Services [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
124,710 
124,710 
Terminalling Services [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
77,425 
77,425 
Propane Marketing Services [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
$ 15,363 
$ 15,363 
Goodwill and Intangible Assets, Net Goodwill and Intangible Assets, Net (Details Textual) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Finite-Lived Intangible Assets [Line Items]
 
 
Amortization of intangible assets
$ 7.3 
$ 5.2 
Minimum [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived intangible asset, useful life
5 years 0 months 0 days 
 
Maximum [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived intangible asset, useful life
30 years 
 
Goodwill and Intangible Assets, Net Schedule of Intangible Assets (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
 
 
Customer relationships
$ 298,505 
$ 298,505 
Finite-Lived Intangible Assets, Accumulated Amortization
(80,490)
(73,222)
Finite-Lived Intangible Assets, Net
218,015 
225,283 
Customer Relationships [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Customer relationships
133,503 
133,503 
Finite-Lived Intangible Assets, Accumulated Amortization
(35,806)
(31,471)
Finite-Lived Intangible Assets, Net
97,697 
102,032 
Customer Contracts [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Customer relationships
95,594 
95,594 
Finite-Lived Intangible Assets, Accumulated Amortization
(35,634)
(33,414)
Finite-Lived Intangible Assets, Net
59,960 
62,180 
Dedicated Acreage [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Customer relationships
53,350 
53,350 
Finite-Lived Intangible Assets, Accumulated Amortization
(4,882)
(4,439)
Finite-Lived Intangible Assets, Net
48,468 
48,911 
Collaborative Arrangement [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Customer relationships
11,884 
11,884 
Finite-Lived Intangible Assets, Accumulated Amortization
(778)
(601)
Finite-Lived Intangible Assets, Net
11,106 
11,283 
Noncompete Agreements [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Customer relationships
3,423 
3,423 
Finite-Lived Intangible Assets, Accumulated Amortization
(3,175)
(3,086)
Finite-Lived Intangible Assets, Net
248 
337 
Other Intangible Assets [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Customer relationships
751 
751 
Finite-Lived Intangible Assets, Accumulated Amortization
(215)
(211)
Finite-Lived Intangible Assets, Net
$ 536 
$ 540 
Investment in unconsolidated affiliates Partnership's Equity Investments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
 
 
Balances
$ 291,988 
 
Earnings in unconsolidated affiliates
15,402 
7,343 
Distributions
(22,494)
 
Balances
284,896 
 
FPS [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Ownership percentage
20.10% 
 
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
 
 
Balances
64,483 
 
Earnings in unconsolidated affiliates
7,088 
 
Distributions
(6,986)
 
Balances
64,585 
 
OGL [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Ownership percentage
20.10% 
 
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
 
 
Balances
25,450 
 
Earnings in unconsolidated affiliates
3,636 
 
Distributions
(3,555)
 
Balances
25,531 
 
Destin [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Ownership percentage
49.70% 
 
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
 
 
Balances
110,882 
 
Earnings in unconsolidated affiliates
2,126 
 
Distributions
(6,258)
 
Balances
106,750 
 
Tri-State [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Ownership percentage
16.70% 
 
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
 
 
Balances
55,022 
 
Earnings in unconsolidated affiliates
899 
 
Distributions
(1,100)
 
Balances
54,821 
 
Okeanos [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Ownership percentage
66.70% 
 
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
 
 
Balances
27,059 
 
Earnings in unconsolidated affiliates
1,572 
 
Distributions
(3,667)
 
Balances
24,964 
 
Wilprise [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Ownership percentage
25.30% 
 
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
 
 
Balances
4,944 
 
Earnings in unconsolidated affiliates
188 
 
Distributions
(228)
 
Balances
4,904 
 
MPOG [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Ownership percentage
66.70% 
 
Investments in and Advances to Affiliates, at Fair Value [Roll Forward]
 
 
Balances
4,148 
 
Earnings in unconsolidated affiliates
(107)
 
Distributions
(700)
 
Balances
$ 3,341 
 
Investment in unconsolidated affiliates Financial Information for the Partnership's Equity Investments - Balance Sheets (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Equity Method Investments and Joint Ventures [Abstract]
 
 
Current assets
$ 87,406 
$ 120,600 
Non-current assets
1,353,629 
1,387,675 
Current liabilities
62,231 
64,099 
Non-current liabilities
$ 584,742 
$ 623,650 
Investment in unconsolidated affiliates Financial Information for the Partnership's Equity Investments - Statement of Operations (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Equity Method Investments and Joint Ventures [Abstract]
 
 
Revenue
$ 98,439 
$ 65,542 
Cost of sales and operating expenses
18,300 
5,392 
Gross profit
80,139 
60,150 
Income from continuing operations
58,595 
55,548 
Net income
$ 58,595 
$ 55,548 
Accrued Expenses and Other Current Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Other Liabilities Disclosure [Abstract]
 
 
Capital expenditures
$ 11,302 
$ 14,499 
Accrued interest
8,526 
5,743 
Convertible preferred unit distributions
6,707 
7,103 
Employee compensation
7,881 
10,804 
Current portion of asset retirement obligation
6,499 
6,499 
Legal accrual
5,150 
0 
Additional Blackwater acquisition consideration
5,000 
5,000 
Transaction costs
4,539 
3,000 
Royalties payable
3,597 
3,926 
Escrow settlement
3,135 
0 
Customer deposits
2,083 
3,080 
Taxes payable
1,809 
1,066 
Due to related parties
1,523 
4,072 
Gas imbalances payable
1,454 
1,098 
Deferred financing costs
0 
2,743 
Recoverable gas costs
393 
1,126 
Other
11,289 
11,525 
Accrued expenses and other current liabilities
$ 80,887 
$ 81,284 
Asset Retirement Obligations (Details) (USD $)
3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
 
 
Non-current balance
$ 44,809,000 
$ 44,363,000 
Current portion of asset retirement obligation
6,499,000 
6,499,000 
Balances at December 31, 2016
50,862,000 
 
Expenditures
(41,000)
 
Accretion expense
487,000 
 
Balances at March 31, 2017
51,308,000 
 
Less: current portion
6,499,000 
6,499,000 
Noncurrent asset retirement obligation
44,809,000 
44,363,000 
Restricted cash and cash equivalents
$ 5,000,000 
$ 5,000,000 
Debt Obligations (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
Revolving credit facility
$ 644,842 
$ 888,250 
Long-term
1,006,388 
1,252,059 
Unamortized debt issuance costs
(10,228)
(11,036)
Total debt obligations
996,160 
1,241,023 
Less: current portion
(3,223)
(5,485)
Long-term debt
992,937 
1,235,538 
Senior Notes [Member] |
8.50% Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term
300,000 
300,000 
Senior Notes [Member] |
3.77% Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term
60,000 
60,000 
Other Debt Obligations [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term
1,546 
3,809 
Revolving Credit Facility [Member]
 
 
Debt Instrument [Line Items]
 
 
Revolving credit facility
$ 644,800 
$ 888,250 
Debt Obligations (Details Textual) (USD $)
0 Months Ended 3 Months Ended 0 Months Ended 0 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 0 Months Ended
Dec. 28, 2016
Mar. 31, 2017
Mar. 31, 2016
Dec. 31, 2016
Dec. 28, 2016
Apr. 25, 2016
Mar. 31, 2017
8.50% Senior Notes [Member]
Senior Notes [Member]
Mar. 8, 2017
8.50% Senior Notes [Member]
Senior Notes [Member]
Dec. 28, 2016
Senior Notes, Due 2021 [Member]
Senior Notes [Member]
Dec. 28, 2016
Senior Notes, Due 2021 [Member]
Senior Notes [Member]
Mar. 31, 2017
3.77% Senior Notes [Member]
Senior Notes [Member]
Sep. 30, 2016
3.77% Senior Notes [Member]
Senior Notes [Member]
Mar. 8, 2017
Revolving Credit Facility [Member]
Mar. 31, 2017
Revolving Credit Facility [Member]
Mar. 8, 2017
Revolving Credit Facility [Member]
Dec. 31, 2016
Revolving Credit Facility [Member]
Mar. 31, 2016
Revolving Credit Facility [Member]
Mar. 31, 2017
Revolving Credit Facility [Member]
Base Rate [Member]
Maximum [Member]
Mar. 31, 2017
Revolving Credit Facility [Member]
Base Rate [Member]
Minimum [Member]
Mar. 31, 2017
Revolving Credit Facility [Member]
Federal Funds [Member]
Mar. 31, 2017
Revolving Credit Facility [Member]
Eurodollar [Member]
Mar. 31, 2017
Revolving Credit Facility [Member]
Eurodollar [Member]
Maximum [Member]
Mar. 31, 2017
Revolving Credit Facility [Member]
Eurodollar [Member]
Minimum [Member]
Mar. 31, 2017
Letter of Credit [Member]
Mar. 31, 2017
JPE [Member]
Revolving Credit Facility [Member]
Mar. 8, 2017
JPE [Member]
Letter of Credit [Member]
Mar. 31, 2017
JPE [Member]
Letter of Credit [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility, Maximum Borrowing Capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,100,000,000 
 
 
 
 
 
 
 
 
 
$ 275,000,000.0 
 
$ 100,000,000.0 
Line of credit facility, current borrowing capacity
 
 
 
 
 
750,000,000 
 
 
 
 
 
 
 
 
900,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Iinstrument, basis spread on variable rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.25% 
2.00% 
 
 
2.25% 
1.00% 
 
 
 
 
Debt instrument, interest rate, stated percentage
 
 
 
 
 
 
 
8.50% 
 
8.50% 
3.77% 
 
 
 
 
 
 
 
 
0.50% 
1.00% 
 
 
 
 
 
 
Long-term Debt, Fair Value
 
 
 
 
 
 
305,600,000 
 
 
 
54,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from Issuance of Long-term Debt and Capital Securities, Net
294,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from Issuance of Senior Long-term Debt
 
 
 
 
 
 
 
 
291,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Issuance Costs, Gross
 
 
 
 
6,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional Debt Issuance Costs
 
 
 
 
2,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, unused capacity, commitment fee percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
0.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Covenants, Adjusted Consolidated EBITDA
 
 
 
 
 
 
 
 
 
 
 
 
5.00 
5.50 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument Covenant, Consolidated Secured Leverage Ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
3.50 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, interest coverage ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
6.19 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt, weighted average interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
4.44% 
 
 
4.07% 
 
 
 
 
 
 
 
 
 
 
Revolving credit agreement
 
644,842,000 
 
888,250,000 
 
 
 
 
 
 
 
 
 
644,800,000 
 
888,250,000 
 
 
 
 
 
 
 
25,900,000 
 
 
 
Line of Credit Facility, Remaining Borrowing Capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
670,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Consolidated Total Leverage Ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
4.64 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument Covenant Consolidated Interest Coverage Ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
2.50 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, face amount
 
 
 
 
 
 
 
 
 
 
 
60,000,000.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repayments of lines of credit
 
325,908,000 
59,450,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
199,500,000 
 
Other
 
$ (20,000)
$ (44,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Convertible Preferred Units (Schedule of Convertible Preferred Units) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 3 Months Ended 3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Mar. 31, 2017
Series A [Member]
Dec. 31, 2016
Series A [Member]
Apr. 15, 2013
Series A [Member]
Mar. 31, 2017
Series A [Member]
Unit Distribution [Member]
Mar. 31, 2017
Series C [Member]
Dec. 31, 2016
Series C [Member]
Mar. 31, 2017
Series C [Member]
Unit Distribution [Member]
Mar. 31, 2017
Series D [Member]
Dec. 31, 2016
Series D [Member]
Mar. 31, 2017
Series D [Member]
Unit Distribution [Member]
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
Convertible preferred units, Beginning Balance, Units
 
 
10,266,000 
10,107,000 
5,142,857 
 
8,792,000 
8,792,000 
 
2,333,000 
2,333,000 
 
Paid in kind unit distributions, Units
 
 
 
 
 
159,000 
 
 
0 
 
 
0 
Convertible preferred units, Ending Balance, Units
 
 
10,266,000 
10,107,000 
5,142,857 
 
8,792,000 
8,792,000 
 
2,333,000 
2,333,000 
 
Convertible preferred units, Beginning Balance, Amount,
$ 336,271 
$ 334,090 
$ 183,567 
$ 181,386 
 
 
$ 118,229 
$ 118,229 
 
$ 34,475 
$ 34,475 
 
Paid in kind unit distributions, Amount
 
 
 
 
 
2,181 
 
 
0 
 
 
0 
Convertible preferred units, Ending Balance, Amount,
$ 336,271 
$ 334,090 
$ 183,567 
$ 181,386 
 
 
$ 118,229 
$ 118,229 
 
$ 34,475 
$ 34,475 
 
Convertible Preferred Units (Details) (USD $)
0 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended
Apr. 15, 2013
Series A [Member]
Mar. 31, 2017
Series A [Member]
Dec. 31, 2016
Series A [Member]
Mar. 31, 2017
Series A-2 [Member]
Dec. 31, 2016
Series A-2 [Member]
Dec. 31, 2015
Series A-2 [Member]
Jul. 27, 2015
Series A-2 [Member]
Mar. 31, 2017
Series A [Member]
Apr. 15, 2013
Series A [Member]
Apr. 25, 2016
Series C [Member]
Mar. 31, 2017
Series C [Member]
Dec. 31, 2016
Series C [Member]
Apr. 25, 2016
Series C [Member]
Mar. 31, 2017
Series C [Member]
Apr. 25, 2016
Series C [Member]
Mar. 31, 2017
Series D [Member]
Dec. 31, 2016
Series D [Member]
Oct. 31, 2016
Series D [Member]
Mar. 31, 2017
Series D [Member]
Apr. 15, 2013
High Point Infrastructure Partners, LLC [Member]
Series A [Member]
Dec. 31, 2015
Magnolia Infrastructure Partners, LLC [Member]
Issuance of Preferred Units [Member]
Series A-2 [Member]
Apr. 25, 2016
ArcLight [Member]
Issuance of Preferred Units [Member]
Series C [Member]
Preferred Units [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Partners' Capital Account, Units, Sale of Units, Percentage
90.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Consideration for Issuance of Preferred Units
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 15,000,000 
 
 
Partners' Capital Account, Units
5,142,857 
10,266,000 
10,107,000 
 
 
 
 
 
 
 
8,792,000 
8,792,000 
 
8,792,000 
 
2,333,000 
2,333,000 
 
2,333,000 
 
 
 
Partners' Capital Account, Distribution Per Unit of Limited Partner Interest
 
 
 
 
 
 
 
$ 0.4125 
$ 0.4125 
 
 
 
 
 
 
$ 0.4125 
 
 
 
 
 
 
Convertible Preferred Stock, Shares Issued upon Conversion
 
 
 
1.1027 
 
 
 
1.1027 
 
 
1.0036 
 
1 
1.0036 
1 
 
 
1 
 
 
 
 
Investment options, exercise price (in usd per share)
 
 
 
$ 15.87 
$ 17.50 
 
 
$ 15.87 
 
$ 14.00 
 
 
 
$ 13.95 
 
 
 
 
 
 
 
 
Call Right defined acquisition value
 
 
 
 
 
 
100,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Partners' Capital Account, Units, Sold in Private Placement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,571,430 
8,571,429 
Issuance of Series A Units, net of issuance costs
 
 
 
 
 
45,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class of warrant, number of securities called by warrants (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
800,000 
 
800,000 
 
 
700,000 
 
 
 
 
Class of warrant, exercise price of warrants (in usd per share)
 
 
 
 
 
 
 
 
 
 
 
 
$ 7.25 
 
 
 
 
$ 22.00 
$ 15.00 
 
 
 
Warrant, exercisable period
 
 
 
 
 
 
 
 
 
7 years 
7 years 
 
 
7 years 
 
 
 
 
 
 
 
 
Fair value of warrant unit (in usd per share)
 
 
 
 
 
 
 
 
 
 
$ 4.41 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Assumptions, Expected Dividend Rate
 
 
 
 
 
 
 
 
 
 
18.00% 
 
 
18.00% 
 
 
 
 
 
 
 
 
Fair value assumptions, expected volatility Rate
 
 
 
 
 
 
 
 
 
 
42.00% 
 
 
42.00% 
 
 
 
 
 
 
 
 
Issuance of Warrant
 
 
 
 
 
 
 
 
 
 
$ 4,500,000 
 
 
 
 
 
 
 
 
 
 
 
Units issued (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,333,333 
 
 
 
 
Shares issued, price per share (in usd per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 15.00 
 
 
 
 
Limited Partners' Capital Account, Units Issued, Closing Fee, Percent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.50% 
 
 
 
 
Partners’ Capital Outstanding Units (Details)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Mar. 31, 2017
General Partner [Member]
Long Term Incentive Plan [Member]
Mar. 31, 2017
General Partner [Member]
Limited Partner Common Units [Member]
Mar. 31, 2017
General Partner [Member]
General Partner Units [Member]
Mar. 31, 2017
Limited Partner [Member]
Long Term Incentive Plan [Member]
Mar. 31, 2017
Limited Partner [Member]
Limited Partner Common Units [Member]
Mar. 31, 2017
Limited Partner [Member]
General Partner Units [Member]
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
Balances at December 31, 2016
688 
680 
 
 
 
 
 
 
Balances at December 31, 2016
51,631 
51,351 
 
 
 
 
 
 
Partners' Capital Account Increase
 
 
0 
0 
8 
259 
21 
0 
Balances at March 31, 2017
688 
680 
 
 
 
 
 
 
Balances at March 31, 2017
51,631 
51,351 
 
 
 
 
 
 
Partners Capital (Details Textual) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 0 Months Ended 3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Series C [Member]
Mar. 31, 2017
General Partner [Member]
Mar. 31, 2016
General Partner [Member]
Mar. 8, 2017
General Partner [Member]
Apr. 25, 2017
Subsequent Event [Member]
Mar. 31, 2017
Minimum [Member]
Mar. 31, 2017
Maximum [Member]
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
General partner interest
0.90% 
 
 
 
 
 
 
 
 
Limited partner interests
99.10% 
 
 
 
 
 
 
 
 
Investment options, exercise price (in usd per share)
 
 
$ 13.95 
 
 
 
 
 
 
Fair value inputs, discount rate
 
 
 
 
 
 
 
5.57% 
10.00% 
Contributions
$ 4,000 
$ 2,500 
 
$ 123 
$ 92 
 
 
 
 
General partner interest, units issued (in shares)
 
 
 
 
 
20,200,000 
 
 
 
Distribution declared per common unit (in usd per share)
$ 0.4125 1
$ 0.4725 1
 
 
 
 
$ 0.4125 
 
 
Distribution made to limited partner, distributions declared, per unit, annualized basis (in usd per share)
 
 
 
 
 
 
$ 1.65 
 
 
Fair value input, option value
 
 
 
 
 
 
 
$ 0.02 
$ 9.68 
Fair Value Inputs, Long-term Revenue Growth Rate
1.00% 
 
 
 
 
 
 
 
 
Contributions
$ 123 
$ 92 
 
$ 100 
 
 
 
 
 
Partners' Capital Account Increase
 
 
 
8,665 
6,225 
 
 
 
 
[1] udited, in thousands, except per unit amounts) Three months ended March 31, 2017 2016Revenue: Commodity sales$158,501 $107,570Services41,388 36,044 Gain (loss) on commodity derivatives, net(257) (238)Total revenue199,632143,376Operating expenses: Costs of sales132,785 73,938Direct operating expenses30,088 30,575Corporate expenses32,844 21,101Depreciation, amortization and accretion expense29,351 25,041(Gain) loss on sale of assets, net(228) 1,122Total operating expenses224,840151,777Operating loss(25,208)(8,401)Other income (expense), net Interest expense(17,966) (8,302)Other income (expense)14 31Earnings in unconsolidated affiliates15,402 7,343Loss from continuing operations before taxes(27,758)(9,329)Income tax expense(1,123) (735)Loss from continuing operations(28,881)(10,064)Loss from discontinued operations, net of tax— (539)Net loss(28,881)(10,603)Less: Net income (loss) attributable to noncontrolling interests1,303 (3)Net loss attributable to the Partnership$(30,184)$(10,600) General Partner’s interest in net loss$(420) $(97)Limited Partners’ interest in net loss$(29,764) $(10,503) Distribution declared per common unit (1)$0.4125 $0.4725Limited Partners’ net loss per common unit (See Note 14): Basic and diluted: Loss from continuing operations$(0.75) $(0.32)Loss from discontinued operations— (0.01)Net loss$(0.75)$(0.33)Weighted average number of common units outstanding:Basic and diluted51,451 50,925(1) Declared and paid
Partners’ Capital Distributions (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Limited Partner [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
$ 33,685 
$ 31,412 
General Partner [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
282 
2,087 
Paid In-kind Unit [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
2,733 
4,380 
Paid In-kind Unit [Member] |
Series A [Member] |
Preferred Partner [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
2,733 
4,380 
Paid [Member] |
Paid / Accrued [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
32,198 
29,028 
Paid [Member] |
Paid / Accrued [Member] |
Limited Partner [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
24,915 
27,000 
Paid [Member] |
Paid / Accrued [Member] |
General Partner [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
167 
2,028 
Paid [Member] |
Paid / Accrued [Member] |
Series A [Member] |
Preferred Partner [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
2,527 
0 
Paid [Member] |
Paid / Accrued [Member] |
Series C [Member] |
Preferred Partner [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
3,627 
0 
Paid [Member] |
Paid / Accrued [Member] |
Series D [Member] |
Preferred Partner [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
962 
0 
Accrued [Member] |
General Partner [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
200 
2,028 
Accrued [Member] |
Paid / Accrued [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
8,885 
4,471 
Accrued [Member] |
Paid / Accrued [Member] |
Series A [Member] |
Preferred Partner [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
4,296 
4,471 
Accrued [Member] |
Paid / Accrued [Member] |
Series C [Member] |
Preferred Partner [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
3,627 
0 
Accrued [Member] |
Paid / Accrued [Member] |
Series D [Member] |
Preferred Partner [Member]
 
 
Class of Stock [Line Items]
 
 
General partner's distribution
$ 962 
$ 0 
Net Income (Loss) per Limited Partner Unit Net Income (Loss) per Limited Partner Unit (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
Net loss
$ (28,881)
$ (10,064)
Less: Net income (loss) attributable to noncontrolling interests
1,303 
(3)
Net income (loss) from continuing operations attributable to the Partnership
(30,184)
(10,061)
Distributions
4,296 
4,471 
General partner’s share in undistributed loss
(560)
(418)
Net loss from continuing operations available to Limited Partners
(38,709)
(16,142)
Net loss from discontinued operations available to Limited Partners
0 
(539)
Net loss available to Limited Partners
(38,709)
(16,681)
Weighted average number of common units outstanding: basic and diluted (shares)
51,451 
50,925 
Limited Partners' net loss per common unit (in usd per share)
$ (0.75)
$ (0.33)
Series C [Member]
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
Distributions
3,627 
0 
Series D [Member]
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
Distributions
962 
0 
General Partner [Member]
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
General partner's distribution
282 
2,087 
General Partner [Member] |
Accrued [Member]
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
General partner's distribution
$ 200 
$ 2,028 
Long Term Incentive Plan (Details Textual) (Long Term Incentive Plan [Member], USD $)
In Millions, except Share data, unless otherwise specified
0 Months Ended 3 Months Ended 1 Months Ended 3 Months Ended
Nov. 19, 2015
Mar. 31, 2017
Mar. 31, 2016
Dec. 31, 2015
Phantom Share Units (PSUs) [Member]
Mar. 31, 2017
Minimum [Member]
Phantom Share Units (PSUs) [Member]
Mar. 31, 2017
Maximum [Member]
Phantom Share Units (PSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Additional number of common units authorized for issuance (shares)
6,000,000 
 
 
 
 
 
Award vesting period
 
 
 
3 years 
3 years 
4 years 
Granted (in shares)
 
 
 
200,000 
 
 
Equity compensation expense
 
 
$ 1.6 
 
 
 
Equity instruments other than options, vested in period, fair value
 
$ 5.0 
$ 0.9 
 
 
 
Long-Term Incentive Plan - Phantom Units (Details) (Phantom Share Units (PSUs) [Member], USD $)
3 Months Ended
Mar. 31, 2017
Phantom Share Units (PSUs) [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
 
Outstanding at end beginning of period (in shares)
1,558,834.89 
Granted (in shares)
2,000 
Forfeited (in shares)
(964)
Vested (in shares)
(319,572)
Outstanding at end of period (in shares)
1,240,299 
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Weighted Average [Roll Forward]
 
Outstanding at beginning of period (in usd per share)
$ 6.98 
Granted (in usd per share)
$ 11.20 
Forfeited (in usd per share)
$ 30.14 
Vested (in usd per share)
$ 7.41 
Outstanding at end of period (in usd per share)
$ 6.86 
Related Party Transactions (Details Textual) (USD $)
3 Months Ended 3 Months Ended 3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Blackwater [Member]
Dec. 31, 2013
Blackwater [Member]
Mar. 31, 2017
General Partner [Member]
quarter
Mar. 31, 2016
General Partner [Member]
Mar. 31, 2017
Republic Midstream, LLC (“Republic”) [Member]
Mar. 31, 2016
Republic Midstream, LLC (“Republic”) [Member]
Mar. 31, 2017
Affiliated Entity [Member]
Dec. 31, 2015
J P Energy Development L P [Member]
Mar. 31, 2017
Other Current Liabilities [Member]
General Partner [Member]
Dec. 31, 2016
Other Current Liabilities [Member]
General Partner [Member]
Mar. 31, 2017
American Panther [Member]
Affiliated Entity [Member]
Mar. 31, 2017
American Panther [Member]
Affiliated Entity [Member]
Mar. 31, 2016
American Panther [Member]
Affiliated Entity [Member]
Mar. 31, 2017
CIMA Energy Ltd [Member]
Vice President [Member]
Mar. 31, 2016
CIMA Energy Ltd [Member]
Vice President [Member]
Mar. 31, 2016
Crude Oil Pipelines And Storage Segment [Member]
Mid Continent Business [Member]
J P Energy Development L P [Member]
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional consideration
 
 
 
$ 5,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional Blackwater acquisition consideration
 
 
5,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum financial support
 
 
 
 
25,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term of maximum financial support (Number of Quarters)
 
 
 
 
8 
 
 
 
 
 
 
 
 
 
 
 
 
 
Related Party Transaction, Costs Absorbed by Related Party
 
 
 
 
9,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Monthly fee
 
 
 
 
 
 
100,000 
 
 
 
 
 
 
 
 
 
 
 
Revenue from related parties
 
 
 
 
 
 
300,000 
300,000 
 
 
 
 
 
 
 
700,000 
900,000 
 
Receivable balance from affiliate
 
 
 
 
 
1,500,000 
1,400,000 
 
 
 
 
 
 
 
 
 
 
 
Related party transaction, due to related party
 
 
 
 
 
 
 
 
 
 
1,300,000 
3,900,000 
 
 
 
 
 
 
Management fees revenue
 
 
 
 
 
 
 
 
600,000 
 
 
 
 
 
 
 
 
 
Ownership interest in subsidiary (percent)
 
 
 
 
 
 
 
 
 
 
 
 
60.00% 
 
 
 
 
 
Direct operating expenses
30,088,000 
30,575,000 
 
 
 
 
 
 
 
 
 
 
 
800,000 
300,000 
 
 
 
Direct operating expenses
32,844,000 
21,101,000 
 
 
4,000,000 
2,500,000 
 
 
 
 
 
 
 
400,000 
100,000 
 
 
 
Purchases from related party
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,400,000 
1,000,000 
 
Pipeline tariff fees
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
400,000 
Net receivable from JP Development
 
 
 
 
 
 
 
 
 
$ 7,900,000 
 
 
 
 
 
 
 
 
Reportable Segments - Reconciliation of Gross Profit (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Segment Reporting Information [Line Items]
 
 
Depreciation, amortization and accretion expense
$ 29,351 
$ 25,252 
Segment gross margin
80,104 
74,045 
Direct operating expenses
30,088 
30,575 
Total Operating Margin
(25,208)
(8,401)
Gain (loss) on commodity derivatives, net
(257)
(238)
Corporate expenses
32,844 
21,101 
Depreciation, amortization and accretion expense
29,351 
25,041 
(Gain) loss on sale of assets, net
(228)
1,122 
Interest expense
17,966 
8,302 
Other income
(14)
(31)
Other, net
671 
(365)
Income tax expense
1,123 
735 
Loss from discontinued operations, net of tax
0 
539 
Less: Net income (loss) attributable to noncontrolling interests
1,303 
(3)
Net loss attributable to the Partnership
(30,184)
(10,600)
Gathering and Processing reporting segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Segment gross margin
11,251 
11,619 
Direct operating expenses
8,065 
8,548 
Gain (loss) on commodity derivatives, net
(7)
(103)
Liquid Pipelines and Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Segment gross margin
6,470 
5,850 
Direct operating expenses
2,074 
2,467 
Gain (loss) on commodity derivatives, net
372 
(233)
Natural Gas Transportation Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Segment gross margin
6,119 
5,563 
Direct operating expenses
1,235 
1,227 
Gain (loss) on commodity derivatives, net
0 
0 
Offshore Pipelines and Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Segment gross margin
25,802 
13,265 
Direct operating expenses
2,579 
2,253 
Gain (loss) on commodity derivatives, net
0 
0 
Terminalling Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Segment gross margin
11,160 
9,443 
Direct operating expenses
3,073 
2,609 
Gain (loss) on commodity derivatives, net
0 
(175)
Propane Marketing Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Segment gross margin
19,302 
28,305 
Direct operating expenses
13,062 
13,471 
Gain (loss) on commodity derivatives, net
(622)
273 
All Operating Segments, Excluding Terminalling Segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Direct operating expenses
27,015 
27,966 
Segment Reconciling Items [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Operating Margin
$ 53,089 
$ 46,079 
Reportable Segments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Depreciation, amortization and accretion expense
$ 29,351 
$ 25,252 
Segment information
 
 
Revenue
199,889 
143,614 
Gain (loss) on commodity derivatives, net
(257)
(238)
Total revenue
199,632 
143,376 
Earnings in unconsolidated affiliates
15,402 
7,343 
Cost of Sales
132,785 
73,938 
Direct operating expenses
30,088 
30,575 
Corporate expenses
32,844 
21,101 
Depreciation, amortization and accretion expense
29,351 
25,041 
(Gain) loss on sale of assets, net
(228)
1,122 
Total operating expenses
224,840 
151,777 
Interest expense
17,966 
8,302 
Other (income) expense
(14)
(31)
Loss from continuing operations before taxes
(27,758)
(9,329)
Income tax expense
1,123 
735 
Income (loss from continuing operation
(28,881)
(10,064)
Loss from discontinued operations, net of tax
0 
539 
Net loss
(28,881)
(10,603)
Less: Net income (loss) attributable to noncontrolling interests
1,303 
(3)
Net loss attributable to the Partnership
(30,184)
(10,600)
Segment gross margin
80,104 
74,045 
Gathering and Processing reporting segment [Member]
 
 
Segment information
 
 
Revenue
34,407 
23,295 
Gain (loss) on commodity derivatives, net
(7)
(103)
Total revenue
34,400 
23,192 
Earnings in unconsolidated affiliates
0 
0 
Cost of Sales
23,187 
11,707 
Direct operating expenses
8,065 
8,548 
Segment gross margin
11,251 
11,619 
Liquid Pipelines and Services [Member]
 
 
Segment information
 
 
Revenue
82,039 
44,515 
Gain (loss) on commodity derivatives, net
372 
(233)
Total revenue
82,411 
44,282 
Earnings in unconsolidated affiliates
1,088 
0 
Cost of Sales
77,077 
38,654 
Direct operating expenses
2,074 
2,467 
Segment gross margin
6,470 
5,850 
Natural Gas Transportation Services [Member]
 
 
Segment information
 
 
Revenue
12,438 
9,795 
Gain (loss) on commodity derivatives, net
0 
0 
Total revenue
12,438 
9,795 
Earnings in unconsolidated affiliates
0 
0 
Cost of Sales
6,260 
4,224 
Direct operating expenses
1,235 
1,227 
Segment gross margin
6,119 
5,563 
Offshore Pipelines and Services [Member]
 
 
Segment information
 
 
Revenue
14,831 
7,003 
Gain (loss) on commodity derivatives, net
0 
0 
Total revenue
14,831 
7,003 
Earnings in unconsolidated affiliates
14,314 
7,343 
Cost of Sales
3,343 
1,081 
Direct operating expenses
2,579 
2,253 
Segment gross margin
25,802 
13,265 
Terminalling Services [Member]
 
 
Segment information
 
 
Revenue
18,626 
14,393 
Gain (loss) on commodity derivatives, net
0 
(175)
Total revenue
18,626 
14,218 
Earnings in unconsolidated affiliates
0 
0 
Cost of Sales
4,393 
2,205 
Direct operating expenses
3,073 
2,609 
Segment gross margin
11,160 
9,443 
Propane Marketing Services [Member]
 
 
Segment information
 
 
Revenue
37,548 
44,613 
Gain (loss) on commodity derivatives, net
(622)
273 
Total revenue
36,926 
44,886 
Earnings in unconsolidated affiliates
0 
0 
Cost of Sales
18,525 
16,067 
Direct operating expenses
13,062 
13,471 
Segment gross margin
19,302 
28,305 
Commodity Contract [Member]
 
 
Segment information
 
 
Gain (loss) on commodity derivatives, net
377 
(607)
Gain (Loss) on Derivative Instruments [Member] |
Commodity Contract [Member]
 
 
Segment information
 
 
Gain (loss) on commodity derivatives, net
$ 699 
$ (388)
Reportable Segments Reportable Segments - Assets (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Segment Reporting Information [Line Items]
 
 
Assets
$ 2,046,243 
$ 2,349,321 
Gathering and Processing reporting segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
390,334 
532,009 
Liquid Pipelines and Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
447,121 
422,636 
Offshore Pipelines and Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
365,507 
385,893 
Natural Gas Transportation Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
176,740 
221,604 
Terminalling Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
277,632 
299,534 
Propane Marketing Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
134,604 
140,864 
Other Segments [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
$ 254,305 
$ 346,781 
Reportable Segments (Details Textual) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Segment Reporting Information [Line Items]
 
 
Direct operating expenses
$ 30,088 
$ 30,575 
Gathering and Processing reporting segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Direct operating expenses
8,065 
8,548 
Liquid Pipelines and Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Direct operating expenses
2,074 
2,467 
Natural Gas Transportation Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Direct operating expenses
1,235 
1,227 
Offshore Pipelines and Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Direct operating expenses
2,579 
2,253 
Propane Marketing Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Direct operating expenses
13,062 
13,471 
Terminalling Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Direct operating expenses
$ 3,073 
$ 2,609 
Subsequent Event (Details)
3 Months Ended 0 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Apr. 25, 2017
Subsequent Event [Member]
Subsequent Event [Line Items]
 
 
 
Distribution declared per common unit (in usd per share)
$ 0.4125 1
$ 0.4725 1
$ 0.4125 
Distribution made to limited partner, distributions declared, per unit, annualized basis (in usd per share)
 
 
$ 1.65 
[1] udited, in thousands, except per unit amounts) Three months ended March 31, 2017 2016Revenue: Commodity sales$158,501 $107,570Services41,388 36,044 Gain (loss) on commodity derivatives, net(257) (238)Total revenue199,632143,376Operating expenses: Costs of sales132,785 73,938Direct operating expenses30,088 30,575Corporate expenses32,844 21,101Depreciation, amortization and accretion expense29,351 25,041(Gain) loss on sale of assets, net(228) 1,122Total operating expenses224,840151,777Operating loss(25,208)(8,401)Other income (expense), net Interest expense(17,966) (8,302)Other income (expense)14 31Earnings in unconsolidated affiliates15,402 7,343Loss from continuing operations before taxes(27,758)(9,329)Income tax expense(1,123) (735)Loss from continuing operations(28,881)(10,064)Loss from discontinued operations, net of tax— (539)Net loss(28,881)(10,603)Less: Net income (loss) attributable to noncontrolling interests1,303 (3)Net loss attributable to the Partnership$(30,184)$(10,600) General Partner’s interest in net loss$(420) $(97)Limited Partners’ interest in net loss$(29,764) $(10,503) Distribution declared per common unit (1)$0.4125 $0.4725Limited Partners’ net loss per common unit (See Note 14): Basic and diluted: Loss from continuing operations$(0.75) $(0.32)Loss from discontinued operations— (0.01)Net loss$(0.75)$(0.33)Weighted average number of common units outstanding:Basic and diluted51,451 50,925(1) Declared and paid
Supplemental Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Supplemental Cash Flow Elements [Abstract]
 
 
Increase (decrease) in accrued property, plant and equipment purchases
$ (1,371)
$ 1,876 
Contributions
4,000 
2,500 
Accrued cash distributions on convertible preferred units
8,885 
4,471 
Paid-in-kind distributions on convertible preferred units
2,733 
4,380 
Cancellation of escrow units
$ 0 
$ 6,817