x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 46-1972941 | |||
(State or other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification Number) | |||
4200 W. 115th Street, Suite 350 | ||||
Leawood, Kansas | 66211 | |||
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |||
Emerging growth company | ¨ |
September 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 2,998 | $ | 1,873 | |||
Accounts receivable, net | 95,629 | 59,536 | |||||
Gas imbalances | 1,020 | 1,597 | |||||
Inventories | 10,173 | 13,093 | |||||
Derivative assets | — | 10,967 | |||||
Prepayments and other current assets | 3,407 | 7,628 | |||||
Total Current Assets | 113,227 | 94,694 | |||||
Property, plant and equipment, net | 2,350,830 | 2,079,232 | |||||
Goodwill | 404,838 | 343,288 | |||||
Intangible assets, net | 98,876 | 93,522 | |||||
Unconsolidated investments | 922,280 | 475,625 | |||||
Deferred financing costs, net | 12,329 | 4,815 | |||||
Deferred charges and other assets | 3,016 | 11,037 | |||||
Total Assets | $ | 3,905,396 | $ | 3,102,213 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 69,620 | $ | 24,122 | |||
Accounts payable to related parties | 6,072 | 5,935 | |||||
Gas imbalances | 1,119 | 1,239 | |||||
Derivative liabilities | 473 | 556 | |||||
Accrued taxes | 22,890 | 16,996 | |||||
Accrued liabilities | 11,154 | 16,702 | |||||
Deferred revenue | 87,979 | 60,757 | |||||
Other current liabilities | 6,690 | 6,446 | |||||
Total Current Liabilities | 205,997 | 132,753 | |||||
Long-term debt, net | 2,115,086 | 1,407,981 | |||||
Other long-term liabilities and deferred credits | 18,396 | 7,063 | |||||
Total Long-term Liabilities | 2,133,482 | 1,415,044 | |||||
Commitments and Contingencies | |||||||
Equity: | |||||||
Predecessor Equity | — | 82,295 | |||||
Limited partners (73,176,516 and 72,485,954 common units issued and outstanding at September 30, 2017 and December 31, 2016, respectively) | 2,125,788 | 2,070,495 | |||||
General partner (834,391 units issued and outstanding at September 30, 2017 and December 31, 2016) | (626,704 | ) | (632,339 | ) | |||
Total Partners' Equity | 1,499,084 | 1,520,451 | |||||
Noncontrolling interests | 66,833 | 33,965 | |||||
Total Equity | 1,565,917 | 1,554,416 | |||||
Total Liabilities and Equity | $ | 3,905,396 | $ | 3,102,213 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands, except per unit amounts) | |||||||||||||||
Revenues: | |||||||||||||||
Crude oil transportation services | $ | 86,180 | $ | 91,387 | $ | 260,366 | $ | 279,281 | |||||||
Natural gas transportation services | 30,256 | 31,444 | 91,370 | 89,406 | |||||||||||
Sales of natural gas, NGLs, and crude oil | 32,215 | 20,487 | 70,514 | 51,243 | |||||||||||
Processing and other revenues | 27,218 | 9,950 | 58,882 | 29,521 | |||||||||||
Total Revenues | 175,869 | 153,268 | 481,132 | 449,451 | |||||||||||
Operating Costs and Expenses: | |||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 26,984 | 18,319 | 58,740 | 47,845 | |||||||||||
Cost of transportation services (exclusive of depreciation and amortization shown below) | 10,538 | 10,842 | 38,799 | 35,946 | |||||||||||
Operations and maintenance | 17,412 | 15,146 | 45,569 | 42,374 | |||||||||||
Depreciation and amortization | 23,782 | 21,177 | 67,276 | 65,074 | |||||||||||
General and administrative | 15,925 | 13,413 | 44,362 | 41,225 | |||||||||||
Taxes, other than income taxes | 6,661 | 6,860 | 21,799 | 20,293 | |||||||||||
Contract termination | — | — | — | 8,061 | |||||||||||
(Gain) loss on disposal of assets | — | — | (1,264 | ) | 1,849 | ||||||||||
Total Operating Costs and Expenses | 101,302 | 85,757 | 275,281 | 262,667 | |||||||||||
Operating Income | 74,567 | 67,511 | 205,851 | 186,784 | |||||||||||
Other Income (Expense): | |||||||||||||||
Interest expense, net | (22,888 | ) | (10,907 | ) | (57,265 | ) | (27,639 | ) | |||||||
Unrealized (loss) gain on derivative instrument | — | (4,419 | ) | 1,885 | 5,588 | ||||||||||
Equity in earnings of unconsolidated investments | 123,642 | 12,764 | 187,121 | 37,495 | |||||||||||
Gain on remeasurement of unconsolidated investment | 9,728 | — | 9,728 | — | |||||||||||
Other income, net | 454 | 480 | 796 | 1,267 | |||||||||||
Total Other Income (Expense) | 110,936 | (2,082 | ) | 142,265 | 16,711 | ||||||||||
Net income | 185,503 | 65,429 | 348,116 | 203,495 | |||||||||||
Net income attributable to noncontrolling interests | (1,413 | ) | (1,084 | ) | (3,241 | ) | (3,235 | ) | |||||||
Net income attributable to partners | $ | 184,090 | $ | 64,345 | $ | 344,875 | $ | 200,260 | |||||||
Allocation of income to the limited partners: | |||||||||||||||
Net income attributable to partners | $ | 184,090 | $ | 64,345 | $ | 344,875 | $ | 200,260 | |||||||
Predecessor operations interest in net income | — | (3,611 | ) | — | (3,408 | ) | |||||||||
General partner interest in net income | (39,809 | ) | (27,674 | ) | (107,693 | ) | (73,347 | ) | |||||||
Net income available to common unitholders | 144,281 | 33,060 | 237,182 | 123,505 | |||||||||||
Basic net income per common unit | $ | 1.97 | $ | 0.45 | $ | 3.26 | $ | 1.75 | |||||||
Diluted net income per common unit | $ | 1.96 | $ | 0.45 | $ | 3.23 | $ | 1.73 | |||||||
Basic average number of common units outstanding | 73,138 | 73,089 | 72,769 | 70,686 | |||||||||||
Diluted average number of common units outstanding | 73,638 | 74,063 | 73,319 | 71,590 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Cash Flows from Operating Activities: | |||||||
Net income | $ | 348,116 | $ | 203,495 | |||
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||
Depreciation and amortization | 72,732 | 70,269 | |||||
Equity in earnings of unconsolidated investments | (187,121 | ) | (37,495 | ) | |||
Distributions from unconsolidated investments | 187,624 | 37,361 | |||||
Gain on remeasurement of unconsolidated investment | (9,728 | ) | — | ||||
Changes in components of working capital: | |||||||
Accounts receivable and other | (34,197 | ) | 8,204 | ||||
Accounts payable and accrued liabilities | 43,037 | 5,053 | |||||
Deferred revenue | 26,898 | 25,303 | |||||
Other current assets and liabilities | 5,032 | (1,033 | ) | ||||
Other operating, net | 3,755 | (149 | ) | ||||
Net Cash Provided by Operating Activities | 456,148 | 311,008 | |||||
Cash Flows from Investing Activities: | |||||||
Acquisition of Rockies Express membership interest | (400,000 | ) | (436,022 | ) | |||
Acquisition of Terminals and NatGas | (140,000 | ) | — | ||||
Acquisition of Douglas Gathering System | (128,526 | ) | — | ||||
Capital expenditures | (88,050 | ) | (55,397 | ) | |||
Acquisition of Deeprock Development | (57,202 | ) | — | ||||
Distributions from unconsolidated investments in excess of cumulative earnings | 41,886 | 16,073 | |||||
Acquisition of PRB Crude System | (36,030 | ) | — | ||||
Contributions to unconsolidated investments | (31,570 | ) | (35,515 | ) | |||
Acquisition of Pony Express membership interest | — | (49,118 | ) | ||||
Other investing, net | (13,449 | ) | 205 | ||||
Net Cash Used in Investing Activities | (852,941 | ) | (559,774 | ) | |||
Cash Flows from Financing Activities: | |||||||
Proceeds from issuance of long-term debt | 850,000 | 400,000 | |||||
Distributions to unitholders | (284,724 | ) | (207,539 | ) | |||
(Repayments) borrowings under revolving credit facility, net | (134,000 | ) | 252,000 | ||||
Proceeds from public offering, net of offering costs | 112,393 | 290,474 | |||||
Partial exercise of call option | (72,381 | ) | (151,434 | ) | |||
Repurchase of common units from TD | (35,335 | ) | — | ||||
Acquisition of Pony Express membership interest | — | (425,882 | ) | ||||
Proceeds from private placement, net of offering costs | — | 90,009 | |||||
Other financing, net | (38,035 | ) | (56 | ) | |||
Net Cash Provided by Financing Activities | 397,918 | 247,572 | |||||
Net Change in Cash and Cash Equivalents | 1,125 | (1,194 | ) | ||||
Cash and Cash Equivalents, beginning of period | 1,873 | 1,611 | |||||
Cash and Cash Equivalents, end of period | $ | 2,998 | $ | 417 | |||
Schedule of Noncash Investing and Financing Activities: | |||||||
Common units issued as partial consideration to acquire additional 9% membership interest in Deeprock Development | $ | 6,617 | $ | — | |||
Increase in accrual for payment of property, plant and equipment | $ | 1,342 | $ | — |
Predecessor Equity | Limited Partners | General Partner | Total Partners’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Balance at January 1, 2017 | $ | 82,295 | $ | 2,070,495 | $ | (632,339 | ) | $ | 1,520,451 | $ | 33,965 | $ | 1,554,416 | ||||||||||
Acquisition of Terminals and NatGas | (82,295 | ) | — | (57,705 | ) | (140,000 | ) | — | (140,000 | ) | |||||||||||||
Net income | — | 237,182 | 107,693 | 344,875 | 3,241 | 348,116 | |||||||||||||||||
Issuance of units to public, net of offering costs | — | 112,393 | — | 112,393 | — | 112,393 | |||||||||||||||||
Distributions to unitholders | — | (186,950 | ) | (97,774 | ) | (284,724 | ) | — | (284,724 | ) | |||||||||||||
Noncash compensation expense | — | 6,169 | — | 6,169 | — | 6,169 | |||||||||||||||||
LTIP units tendered by employees to satisfy tax withholding obligations | — | (12,402 | ) | — | (12,402 | ) | — | (12,402 | ) | ||||||||||||||
Partial exercise of call option | — | (72,381 | ) | (12,561 | ) | (84,942 | ) | — | (84,942 | ) | |||||||||||||
Repurchase of common units from TD | — | (35,335 | ) | — | (35,335 | ) | — | (35,335 | ) | ||||||||||||||
Acquisition of additional 24.99% membership interest in Rockies Express | — | — | 63,681 | 63,681 | — | 63,681 | |||||||||||||||||
Acquisition of additional 40% membership interest in Deeprock Development | — | — | — | — | 45,869 | 45,869 | |||||||||||||||||
Acquisition of noncontrolling interests | — | 6,617 | — | 6,617 | (13,057 | ) | (6,440 | ) | |||||||||||||||
Contributions from TD | — | — | 2,301 | 2,301 | — | 2,301 | |||||||||||||||||
Contributions from noncontrolling interest | — | — | — | — | 1,093 | 1,093 | |||||||||||||||||
Distributions to noncontrolling interest | — | — | — | — | (4,278 | ) | (4,278 | ) | |||||||||||||||
Balance at September 30, 2017 | $ | — | $ | 2,125,788 | $ | (626,704 | ) | $ | 1,499,084 | $ | 66,833 | $ | 1,565,917 | ||||||||||
Predecessor Equity | Limited Partners | General Partner | Total Partners’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Balance at January 1, 2016 | $ | 71,564 | $ | 1,618,766 | $ | (348,841 | ) | $ | 1,341,489 | $ | 445,077 | $ | 1,786,566 | ||||||||||
Net income | 3,408 | 123,505 | 73,347 | 200,260 | 3,235 | 203,495 | |||||||||||||||||
Issuance of units to public, net of offering costs | — | 290,474 | — | 290,474 | — | 290,474 | |||||||||||||||||
Issuance of units in a private placement, net of offering costs | — | 90,009 | — | 90,009 | — | 90,009 | |||||||||||||||||
Distributions to unitholders | — | (145,664 | ) | (61,875 | ) | (207,539 | ) | — | (207,539 | ) | |||||||||||||
Noncash compensation expense | — | 5,931 | — | 5,931 | — | 5,931 | |||||||||||||||||
Contributions from noncontrolling interest | — | — | — | — | 8,700 | 8,700 | |||||||||||||||||
Distributions to noncontrolling interest | — | — | — | — | (5,017 | ) | (5,017 | ) | |||||||||||||||
Acquisition of additional 31.3% membership interest in Pony Express | — | 268,607 | (279,967 | ) | (11,360 | ) | (417,679 | ) | (429,039 | ) | |||||||||||||
Partial exercise of call option | — | (151,434 | ) | (25,858 | ) | (177,292 | ) | (177,292 | ) | ||||||||||||||
Contributions from TD | — | 5,308 | 5,308 | 5,308 | |||||||||||||||||||
Acquisition of noncontrolling interests | — | (5,373 | ) | (59 | ) | (5,432 | ) | (568 | ) | (6,000 | ) | ||||||||||||
Contribution from Predecessor Entities, net | 5,116 | 5,116 | 5,116 | ||||||||||||||||||||
Balance at September 30, 2016 | $ | 80,088 | $ | 2,094,821 | $ | (637,945 | ) | $ | 1,536,964 | $ | 33,748 | $ | 1,570,712 |
• | Natural Gas Transportation—the ownership and operation of FERC-regulated interstate natural gas pipelines and integrated natural gas storage facilities; |
• | Crude Oil Transportation—the ownership and operation of a FERC-regulated crude oil pipeline system; and |
• | Gathering, Processing & Terminalling—the ownership and operation of natural gas gathering, processing, treating and fractionation facilities; crude oil gathering, storage and terminalling facilities; the provision of water business services primarily to the oil and gas exploration and production industry; and the transportation of NGLs. |
Unit holder | Limited Partner Common Units | General Partner Units | Percentage of Outstanding Limited Partner Common Units | Percentage of Outstanding Common and General Partner Units | ||||||||
Public Unitholders | 47,557,298 | — | 64.99 | % | 64.26 | % | ||||||
Tallgrass Equity, LLC | 20,000,000 | — | 27.33 | % | 27.02 | % | ||||||
Tallgrass Development, LP | 5,619,218 | — | 7.68 | % | 7.59 | % | ||||||
Tallgrass MLP GP, LLC (1) | — | 834,391 | — | % | 1.13 | % | ||||||
Total | 73,176,516 | 834,391 | 100.00 | % | 100.00 | % |
(1) | Tallgrass MLP GP, LLC (the "general partner") also holds all of TEP's incentive distribution rights. |
• | We have formed an implementation team that meets to discuss implementation challenges, technical interpretations, industry-specific treatment of certain revenue contract types, and project status. |
• | We have reviewed contracts for each revenue stream identified within each of our business segments and we are currently determining and documenting expected changes in revenue recognition upon adoption of the revised guidance. |
• | We are evaluating the potential information technology and internal control changes that will be required for adoption based on the findings from our contract review process. |
• | We plan to provide internal training and awareness related to the revised guidance to the key stakeholders throughout our organization. |
Accounts receivable | $ | 117 | ||
Property, plant and equipment | 29,306 | |||
Intangible asset | 6,694 | (1) | ||
Accounts payable and accrued liabilities | (87 | ) | ||
Net identifiable assets acquired | $ | 36,030 |
(1) | The $6.7 million intangible asset acquired represents a major customer contract. This intangible asset is amortized on a straight-line basis over a period of 8 years, the remaining term of the contract at the time of acquisition. |
Accounts receivable | $ | 968 | |
Other current assets | 598 | ||
Property, plant and equipment | 70,148 | ||
Accounts payable | (712 | ) | |
Deferred revenue | (6,546 | ) | |
Net identifiable assets acquired | 64,456 | ||
Goodwill | 61,550 | ||
Net assets acquired (excluding cash) | $ | 126,006 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Revenue | $ | 177,022 | $ | 158,642 | $ | 492,625 | $ | 465,232 | |||||||
Net income attributable to partners | $ | 174,587 | $ | 65,644 | $ | 338,407 | $ | 204,197 |
Basis Difference | Amortization Period | ||||
(in thousands) | |||||
Long-term debt | $ | 19,078 | 2 - 25 years | ||
Property, plant and equipment | (399,667 | ) | 35 years | ||
Total basis difference | $ | (380,589 | ) |
December 31, 2016 | |||||||||||||||
TEP (As previously reported) | Consolidate Terminals | Consolidate NatGas | TEP (As currently reported) | ||||||||||||
(in thousands) | |||||||||||||||
ASSETS | |||||||||||||||
Current Assets: | |||||||||||||||
Cash and cash equivalents | $ | 1,873 | $ | — | $ | — | $ | 1,873 | |||||||
Accounts receivable, net | 59,469 | 38 | 29 | 59,536 | |||||||||||
Gas imbalances | 1,597 | — | — | 1,597 | |||||||||||
Inventories | 12,805 | 288 | — | 13,093 | |||||||||||
Derivative assets | 10,967 | — | — | 10,967 | |||||||||||
Prepayments and other current assets | 6,820 | 808 | — | 7,628 | |||||||||||
Total Current Assets | 93,531 | 1,134 | 29 | 94,694 | |||||||||||
Property, plant and equipment, net | 2,012,263 | 66,969 | — | 2,079,232 | |||||||||||
Goodwill | 343,288 | — | — | 343,288 | |||||||||||
Intangible assets, net | 93,522 | — | — | 93,522 | |||||||||||
Unconsolidated investments | 461,915 | 13,710 | — | 475,625 | |||||||||||
Deferred financing costs, net | 4,815 | — | — | 4,815 | |||||||||||
Deferred charges and other assets | 9,637 | 1,400 | — | 11,037 | |||||||||||
Total Assets | $ | 3,018,971 | $ | 83,213 | $ | 29 | $ | 3,102,213 | |||||||
LIABILITIES AND EQUITY | |||||||||||||||
Current Liabilities: | |||||||||||||||
Accounts payable | $ | 24,076 | $ | 46 | $ | — | $ | 24,122 | |||||||
Accounts payable to related parties | 5,879 | 56 | — | 5,935 | |||||||||||
Gas imbalances | 1,239 | — | — | 1,239 | |||||||||||
Derivative liabilities | 556 | — | — | 556 | |||||||||||
Accrued taxes | 16,328 | 668 | — | 16,996 | |||||||||||
Accrued liabilities | 16,525 | 177 | — | 16,702 | |||||||||||
Deferred revenue | 60,757 | — | — | 60,757 | |||||||||||
Other current liabilities | 6,446 | — | — | 6,446 | |||||||||||
Total Current Liabilities | 131,806 | 947 | — | 132,753 | |||||||||||
Long-term debt, net | 1,407,981 | — | — | 1,407,981 | |||||||||||
Other long-term liabilities and deferred credits | 7,063 | — | — | 7,063 | |||||||||||
Total Long-term Liabilities | 1,415,044 | — | — | 1,415,044 | |||||||||||
Equity: | |||||||||||||||
Net Equity | 1,472,121 | 82,266 | 29 | 1,554,416 | |||||||||||
Total Equity | 1,472,121 | 82,266 | 29 | 1,554,416 | |||||||||||
Total Liabilities and Equity | $ | 3,018,971 | $ | 83,213 | $ | 29 | $ | 3,102,213 |
Three Months Ended September 30, 2016 | |||||||||||||||||||
TEP (As previously reported) | Consolidate Terminals | Consolidate NatGas | Elimination | TEP (As currently reported) | |||||||||||||||
(in thousands) | |||||||||||||||||||
Revenues: | |||||||||||||||||||
Crude oil transportation services | $ | 91,387 | $ | — | $ | — | $ | — | $ | 91,387 | |||||||||
Natural gas transportation services | 31,444 | — | — | — | 31,444 | ||||||||||||||
Sales of natural gas, NGLs, and crude oil | 20,758 | — | — | (271 | ) | (1) | 20,487 | ||||||||||||
Processing and other revenues | 8,536 | 3,116 | 1,182 | (2,884 | ) | (2) | 9,950 | ||||||||||||
Total Revenues | 152,125 | 3,116 | 1,182 | (3,155 | ) | 153,268 | |||||||||||||
Operating Costs and Expenses: | |||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 18,590 | — | — | (271 | ) | (1) | 18,319 | ||||||||||||
Cost of transportation services (exclusive of depreciation and amortization shown below) | 13,528 | 198 | — | (2,884 | ) | (2) | 10,842 | ||||||||||||
Operations and maintenance | 14,714 | 432 | — | — | 15,146 | ||||||||||||||
Depreciation and amortization | 20,831 | 346 | — | — | 21,177 | ||||||||||||||
General and administrative | 13,147 | 266 | — | — | 13,413 | ||||||||||||||
Taxes, other than income taxes | 6,717 | 143 | — | — | 6,860 | ||||||||||||||
Total Operating Costs and Expenses | 87,527 | 1,385 | — | (3,155 | ) | 85,757 | |||||||||||||
Operating Income (Loss) | 64,598 | 1,731 | 1,182 | — | 67,511 | ||||||||||||||
Other Income (Expense): | |||||||||||||||||||
Interest expense, net | (10,907 | ) | — | — | — | (10,907 | ) | ||||||||||||
Unrealized loss on derivative instrument | (4,419 | ) | — | — | — | (4,419 | ) | ||||||||||||
Equity in earnings of unconsolidated investments | 12,066 | 698 | — | — | 12,764 | ||||||||||||||
Other income, net | 480 | — | — | — | 480 | ||||||||||||||
Total Other (Expense) Income | (2,780 | ) | 698 | — | — | (2,082 | ) | ||||||||||||
Net income | 61,818 | 2,429 | 1,182 | — | 65,429 | ||||||||||||||
Net income attributable to noncontrolling interests | (1,084 | ) | — | — | — | (1,084 | ) | ||||||||||||
Net income attributable to partners | $ | 60,734 | $ | 2,429 | $ | 1,182 | $ | — | $ | 64,345 |
Nine Months Ended September 30, 2016 | |||||||||||||||||||
TEP (As previously reported) | Consolidate Terminals | Consolidate NatGas | Elimination | TEP (As currently reported) | |||||||||||||||
(in thousands) | |||||||||||||||||||
Revenues: | |||||||||||||||||||
Crude oil transportation services | $ | 279,281 | $ | — | $ | — | $ | — | $ | 279,281 | |||||||||
Natural gas transportation services | 89,406 | — | — | — | 89,406 | ||||||||||||||
Sales of natural gas, NGLs, and crude oil | 51,514 | — | — | (271 | ) | (1) | 51,243 | ||||||||||||
Processing and other revenues | 24,260 | 8,982 | 4,855 | (8,576 | ) | (2) | 29,521 | ||||||||||||
Total Revenues | 444,461 | 8,982 | 4,855 | (8,847 | ) | 449,451 | |||||||||||||
Operating Costs and Expenses: | |||||||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 48,116 | — | — | (271 | ) | (1) | 47,845 | ||||||||||||
Cost of transportation services (exclusive of depreciation and amortization shown below) | 43,924 | 598 | — | (8,576 | ) | (2) | 35,946 | ||||||||||||
Operations and maintenance | 41,055 | 1,319 | — | — | 42,374 | ||||||||||||||
Depreciation and amortization | 64,099 | 975 | — | — | 65,074 | ||||||||||||||
General and administrative | 40,072 | 1,153 | — | — | 41,225 | ||||||||||||||
Taxes, other than income taxes | 19,862 | 431 | — | — | 20,293 | ||||||||||||||
Contract termination | — | 8,061 | (3) | — | — | 8,061 | |||||||||||||
Loss on disposal of assets | 1,849 | — | — | — | 1,849 | ||||||||||||||
Total Operating Costs and Expenses | 258,977 | 12,537 | — | (8,847 | ) | 262,667 | |||||||||||||
Operating Income | 185,484 | (3,555 | ) | 4,855 | — | 186,784 | |||||||||||||
Other Income (Expense): | |||||||||||||||||||
Interest expense, net | (27,639 | ) | — | — | — | (27,639 | ) | ||||||||||||
Unrealized gain on derivative instrument | 5,588 | — | — | — | 5,588 | ||||||||||||||
Equity in earnings of unconsolidated investments | 35,387 | 2,108 | — | — | 37,495 | ||||||||||||||
Other income, net | 1,267 | — | — | — | 1,267 | ||||||||||||||
Total Other Income | 14,603 | 2,108 | — | — | 16,711 | ||||||||||||||
Net income (loss) | 200,087 | (1,447 | ) | 4,855 | — | 203,495 | |||||||||||||
Net income attributable to noncontrolling interests | (3,235 | ) | — | — | — | (3,235 | ) | ||||||||||||
Net income (loss) attributable to partners | $ | 196,852 | $ | (1,447 | ) | $ | 4,855 | $ | — | $ | 200,260 |
(1) | Represents the elimination of revenue and cost of sales associated with the purchase of crude oil from Pony Express by Terminals. |
(2) | Represents the elimination of revenue and cost of transportation services associated with the lease of the Sterling Terminal facilities by Pony Express. |
(3) | Represents a one-time charge related to the termination of an operating agreement at the Sterling Terminal. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Processing and other revenues (1) | $ | 3,338 | $ | 1,182 | $ | 6,662 | $ | 4,855 | |||||||
Cost of transportation services (2) | $ | 1,062 | $ | 4,630 | $ | 10,476 | $ | 13,888 | |||||||
Charges to TEP: (3) | |||||||||||||||
Property, plant and equipment, net | $ | 765 | $ | 688 | $ | 1,568 | $ | 2,255 | |||||||
Operations and maintenance | $ | 7,973 | $ | 6,560 | $ | 21,680 | $ | 19,117 | |||||||
General and administrative | $ | 11,817 | $ | 9,838 | $ | 32,129 | $ | 29,489 |
(1) | Reflects the fee that NatGas receives as the operator of the Rockies Express Pipeline. |
(2) | Reflects rent expense for the crude oil storage at the Deeprock Terminal prior to our consolidation of Deeprock Development during the third quarter of 2017, as discussed in Note 3 – Acquisitions. |
(3) | Charges to TEP include directly charged wages and salaries, other compensation and benefits, and shared services. |
September 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Receivable from related parties: | |||||||
Rockies Express Pipeline LLC | $ | 1,052 | $ | 590 | |||
Total receivable from related parties | $ | 1,052 | $ | 590 | |||
Accounts payable to related parties: | |||||||
Tallgrass Operations, LLC | $ | 5,994 | $ | 5,854 | |||
Tallgrass Equity, LLC | 78 | 68 | |||||
Deeprock Development, LLC | — | 13 | |||||
Total accounts payable to related parties | $ | 6,072 | $ | 5,935 |
September 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Affiliate gas imbalance receivables | $ | 17 | $ | 177 | |||
Affiliate gas imbalance payables | $ | 43 | $ | — |
September 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Crude oil | $ | 2,115 | $ | 5,462 | |||
Materials and supplies | 5,993 | 6,383 | |||||
Natural gas liquids | 543 | 265 | |||||
Gas in underground storage | 1,522 | 983 | |||||
Total inventory | $ | 10,173 | $ | 13,093 |
September 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Crude oil pipelines | $ | 1,219,913 | $ | 1,202,125 | |||
Gathering, processing and terminalling assets (1) | 667,379 | 397,701 | |||||
Natural gas pipelines | 577,343 | 572,150 | |||||
General and other | 98,860 | 82,510 | |||||
Construction work in progress | 45,223 | 20,606 | |||||
Accumulated depreciation and amortization | (257,888 | ) | (195,860 | ) | |||
Total property, plant and equipment, net | $ | 2,350,830 | $ | 2,079,232 |
(1) | Includes approximately $138.2 million of assets associated with the Douglas Gathering System acquired in June 2017, approximately $68.4 million of assets associated with the acquisition of the aggregate additional 49% membership interest in Deeprock Development in July 2017, and approximately $29.3 million of assets associated with the PRB Crude System acquired in August 2017. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Revenue | $ | 216,756 | $ | 159,421 | $ | 625,243 | $ | 551,323 | |||||||
Operating income | $ | 123,965 | $ | 66,436 | $ | 344,037 | $ | 267,847 | |||||||
Net income to Members | $ | 233,990 | $ | 34,184 | $ | 371,185 | $ | 226,847 |
Three and Nine Months Ended September 30, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
Natural Gas Transportation | Gathering, Processing & Terminalling | Total | Natural Gas Transportation | Gathering, Processing & Terminalling | Total | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Balance at beginning of period | $ | 255,558 | $ | 87,730 | $ | 343,288 | $ | 255,558 | $ | 87,730 | $ | 343,288 | |||||||||||
Goodwill acquired | — | 61,550 | (1) | 61,550 | — | — | — | ||||||||||||||||
Balance at end of period | $ | 255,558 | $ | 149,280 | $ | 404,838 | $ | 255,558 | $ | 87,730 | $ | 343,288 |
(1) | The $61.6 million of goodwill was recorded in connection with the acquisition of a controlling interest in Deeprock Development on July 20, 2017 as discussed further in Note 3 – Acquisitions. |
Balance Sheet Location | September 30, 2017 | December 31, 2016 | |||||||
(in thousands) | |||||||||
Natural gas derivative contracts (1) | Current assets | $ | — | $ | 291 | ||||
Call option derivative (2) | Current assets | $ | — | $ | 10,676 | ||||
Crude oil derivative contracts (3) | Current liabilities | $ | 472 | $ | 440 | ||||
Natural gas derivative contracts (1) | Current liabilities | $ | 1 | $ | 116 |
(1) | As of September 30, 2017, the fair value shown for natural gas derivative contracts was comprised of derivative volumes for long natural gas fixed-price swaps totaling 0.1 Bcf. As of December 31, 2016, the fair value shown for natural gas derivative contracts was comprised of derivative volumes for short and long natural gas fixed-price swaps totaling 0.3 Bcf and 0.4 Bcf, respectively. |
(2) | As discussed below, in conjunction with our acquisition of an additional 31.3% membership interest in Pony Express effective January 1, 2016, TD granted us an 18 month call option covering the 6,518,000 common units issued to TD. As of February 1, 2017, no common units remained subject to the call option. |
(3) | As of September 30, 2017, the fair value shown for crude oil derivative contracts represents the purchase and sale of 323,620 barrels which will settle throughout 2017 and the first quarter of 2018. As of December 31, 2016, the fair value shown for crude oil derivative contracts represents the sale of 125,000 barrels of crude oil which settled throughout 2017. |
Contract Type | Location of gain (loss) recognized in income on derivatives | Amount of gain (loss) recognized in income on derivatives | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
(in thousands) | ||||||||||||||||||
Crude oil derivative contracts | Sales of natural gas, NGLs, and crude oil | $ | 175 | $ | 318 | $ | 1,065 | $ | 466 | |||||||||
Natural gas derivative contracts | Sales of natural gas, NGLs, and crude oil | $ | (22 | ) | $ | 161 | $ | 84 | $ | (190 | ) | |||||||
Call option derivative | Unrealized (loss) gain on derivative instrument | $ | — | $ | (4,419 | ) | $ | 1,885 | $ | 5,588 |
Asset Fair Value Measurements Using | |||||||||||||||
Total | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||
(in thousands) | |||||||||||||||
As of December 31, 2016: | |||||||||||||||
Call option derivative | $ | 10,676 | $ | — | $ | 10,676 | $ | — | |||||||
Natural gas derivative contracts | $ | 291 | $ | — | $ | 291 | $ | — | |||||||
Liability Fair Value Measurements Using | |||||||||||||||
Total | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||
(in thousands) | |||||||||||||||
As of September 30, 2017: | |||||||||||||||
Crude oil derivative contracts | $ | 472 | $ | — | $ | 472 | $ | — | |||||||
Natural gas derivative contracts | $ | 1 | $ | — | $ | 1 | $ | — | |||||||
As of December 31, 2016: | |||||||||||||||
Crude oil derivative contracts | $ | 440 | $ | — | $ | 440 | $ | — | |||||||
Natural gas derivative contracts | $ | 116 | $ | — | $ | 116 | $ | — |
September 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Revolving credit facility | $ | 881,000 | $ | 1,015,000 | |||
5.50% senior notes due September 15, 2024 | 750,000 | 400,000 | |||||
5.50% senior notes due January 15, 2028 | 500,000 | — | |||||
Less: Deferred financing costs, net (1) | (15,914 | ) | (7,019 | ) | |||
Total long-term debt, net | $ | 2,115,086 | $ | 1,407,981 |
(1) | Deferred financing costs, net as presented above relate solely to the 2024 and 2028 Notes. Deferred financing costs associated with our revolving credit facility are presented in noncurrent assets on our condensed consolidated balance sheets. |
September 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Total capacity under the revolving credit facility | $ | 1,750,000 | $ | 1,750,000 | |||
Less: Outstanding borrowings under the revolving credit facility | (881,000 | ) | (1,015,000 | ) | |||
Less: Letters of credit issued under the revolving credit facility | (3,094 | ) | — | ||||
Available capacity under the revolving credit facility | $ | 865,906 | $ | 735,000 |
Fair Value | |||||||||||||||||||
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | Carrying Amount | |||||||||||||||
(in thousands) | |||||||||||||||||||
As of September 30, 2017: | |||||||||||||||||||
Revolving credit facility | $ | — | $ | 881,000 | $ | — | $ | 881,000 | $ | 881,000 | |||||||||
2024 Notes | $ | — | $ | 772,028 | $ | — | $ | 772,028 | $ | 739,444 | |||||||||
2028 Notes | $ | — | $ | 508,660 | $ | — | $ | 508,660 | $ | 494,642 | |||||||||
As of December 31, 2016: | |||||||||||||||||||
Revolving credit facility | $ | — | $ | 1,015,000 | $ | — | $ | 1,015,000 | $ | 1,015,000 | |||||||||
2024 Notes | $ | — | $ | 398,000 | $ | — | $ | 398,000 | $ | 392,981 |
Distributions | ||||||||||||||||||||||
Limited Partner Common Units | General Partner | Distributions per Limited Partner Common Unit | ||||||||||||||||||||
Three Months Ended | Date Paid | Incentive Distribution Rights | General Partner Units | Total | ||||||||||||||||||
(in thousands, except per unit amounts) | ||||||||||||||||||||||
September 30, 2017 | November 14, 2017 (1) | $ | 69,174 | $ | 37,744 | $ | 1,219 | $ | 108,137 | $ | 0.9450 | |||||||||||
June 30, 2017 | August 14, 2017 | 67,671 | 36,342 | 1,186 | 105,199 | 0.9250 | ||||||||||||||||
March 31, 2017 | May 15, 2017 | 60,486 | 29,840 | 1,040 | 91,366 | 0.8350 | ||||||||||||||||
December 31, 2016 | February 14, 2017 | 58,793 | 28,358 | 1,008 | 88,159 | 0.8150 | ||||||||||||||||
September 30, 2016 | November 14, 2016 | 57,332 | 26,987 | 976 | 85,295 | 0.7950 | ||||||||||||||||
June 30, 2016 | August 12, 2016 | 54,442 | 24,262 | 911 | 79,615 | 0.7550 | ||||||||||||||||
March 31, 2016 | May 13, 2016 | 48,238 | 19,816 | 830 | 68,884 | 0.7050 |
(1) | The distribution announced on October 10, 2017 for the third quarter of 2017 will be paid on November 14, 2017 to unitholders of record at the close of business on October 31, 2017. |
• | TEP was deemed to have made a noncash capital distribution of $57.7 million to the general partner, which represents the excess purchase price over the carrying value of the Terminals and NatGas net assets acquired January 1, 2017; |
• | TEP was deemed to have made a noncash capital distribution of $12.6 million to the general partner, which represents the derecognition of a portion of the derivative asset associated with the partial exercise of the call option; |
• | TEP was deemed to have received a noncash capital contribution of $63.7 million from the general partner, which represents the excess carrying value of the additional 24.99% membership interest in Rockies Express acquired March 31, 2017 over the fair value of the consideration paid; |
• | TEP received contributions from TD of $2.3 million, primarily to indemnify TEP for costs associated with Trailblazer's Pipeline Integrity Management Program, as discussed in Note 14 – Legal and Environmental Matters; and |
• | TEP recognized contributions from and distributions to noncontrolling interests of $1.1 million and $4.3 million, respectively, which primarily consisted of activity associated with TD's 2% noncontrolling interest in Pony Express. |
• | TEP was deemed to have made noncash capital distributions of $280.0 million and $25.9 million to the general partner, which represent the excess purchase price over the carrying value of the additional 31.3% membership interest in Pony Express acquired effective January 1, 2016 and the derecognition of a portion of the derivative asset associated with the partial exercise of the call option, respectively; |
• | TEP received contributions of $5.3 million from TD to indemnify TEP for costs associated with Trailblazer's Pipeline Integrity Management Program, as discussed above; and |
• | TEP recognized contributions from and distributions to noncontrolling interests of $8.7 million and $5.0 million, respectively, which primarily consisted of activity associated with TD's 2% noncontrolling interest in Pony Express. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands, except per unit amounts) | |||||||||||||||
Net income | $ | 185,503 | $ | 65,429 | $ | 348,116 | $ | 203,495 | |||||||
Net income attributable to noncontrolling interests | (1,413 | ) | (1,084 | ) | (3,241 | ) | (3,235 | ) | |||||||
Net income attributable to partners | 184,090 | 64,345 | 344,875 | 200,260 | |||||||||||
Predecessor operations interest in net income | — | (3,611 | ) | — | (3,408 | ) | |||||||||
General partner interest in net income | (39,809 | ) | (27,674 | ) | (107,693 | ) | (73,347 | ) | |||||||
Net income available to common unitholders | $ | 144,281 | $ | 33,060 | $ | 237,182 | $ | 123,505 | |||||||
Basic net income per common unit | $ | 1.97 | $ | 0.45 | $ | 3.26 | $ | 1.75 | |||||||
Diluted net income per common unit | $ | 1.96 | $ | 0.45 | $ | 3.23 | $ | 1.73 | |||||||
Basic average number of common units outstanding | 73,138 | 73,089 | 72,769 | 70,686 | |||||||||||
Equity Participation Unit equivalent units | 500 | 974 | 550 | 904 | |||||||||||
Diluted average number of common units outstanding | 73,638 | 74,063 | 73,319 | 71,590 |
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | ||||||||||||||||||||||
Revenue: | Total Revenue | Inter- Segment | External Revenue | Total Revenue | Inter- Segment | External Revenue | |||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Natural Gas Transportation | $ | 36,084 | $ | (1,883 | ) | $ | 34,201 | $ | 34,994 | $ | (1,427 | ) | $ | 33,567 | |||||||||
Crude Oil Transportation | 93,029 | (6,947 | ) | 86,082 | 95,826 | (271 | ) | 95,555 | |||||||||||||||
Gathering, Processing & Terminalling | 57,736 | (2,150 | ) | 55,586 | 27,030 | (2,884 | ) | 24,146 | |||||||||||||||
Corporate and Other | — | — | — | — | — | — | |||||||||||||||||
Total revenue | $ | 186,849 | $ | (10,980 | ) | $ | 175,869 | $ | 157,850 | $ | (4,582 | ) | $ | 153,268 |
Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||||||||||||||
Revenue: | Total Revenue | Inter- Segment | External Revenue | Total Revenue | Inter- Segment | External Revenue | |||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Natural Gas Transportation | $ | 105,622 | $ | (4,770 | ) | $ | 100,852 | $ | 99,804 | $ | (4,192 | ) | $ | 95,612 | |||||||||
Crude Oil Transportation | 273,768 | (6,947 | ) | 266,821 | 283,868 | (271 | ) | 283,597 | |||||||||||||||
Gathering, Processing & Terminalling | 121,415 | (7,956 | ) | 113,459 | 78,818 | (8,576 | ) | 70,242 | |||||||||||||||
Corporate and Other | — | — | — | — | — | — | |||||||||||||||||
Total revenue | $ | 500,805 | $ | (19,673 | ) | $ | 481,132 | $ | 462,490 | $ | (13,039 | ) | $ | 449,451 |
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | ||||||||||||||||||||||
Adjusted EBITDA: | Total Adjusted EBITDA | Inter- Segment | External Adjusted EBITDA | Total Adjusted EBITDA | Inter- Segment | External Adjusted EBITDA | |||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Natural Gas Transportation | $ | 160,397 | $ | (1,883 | ) | $ | 158,514 | $ | 42,435 | $ | (1,427 | ) | $ | 41,008 | |||||||||
Crude Oil Transportation | 63,683 | (441 | ) | 63,242 | 65,431 | 4,230 | 69,661 | ||||||||||||||||
Gathering, Processing & Terminalling | 15,488 | 2,324 | 17,812 | 6,145 | (2,803 | ) | 3,342 | ||||||||||||||||
Corporate and Other | (837 | ) | — | (837 | ) | (1,368 | ) | — | (1,368 | ) | |||||||||||||
Reconciliation to Net Income: | |||||||||||||||||||||||
Add: | |||||||||||||||||||||||
Equity in earnings of unconsolidated investments | 123,642 | 12,764 | |||||||||||||||||||||
Gain on remeasurement of unconsolidated investment | 9,728 | — | |||||||||||||||||||||
Less: | |||||||||||||||||||||||
Interest expense, net of noncontrolling interest | (22,888 | ) | (10,907 | ) | |||||||||||||||||||
Depreciation and amortization expense, net of noncontrolling interest | (23,472 | ) | (21,648 | ) | |||||||||||||||||||
Distributions from unconsolidated investments | (138,828 | ) | (22,462 | ) | |||||||||||||||||||
Non-cash loss related to derivative instruments, net of noncontrolling interest | (688 | ) | (4,410 | ) | |||||||||||||||||||
Non-cash compensation expense | (2,135 | ) | (1,635 | ) | |||||||||||||||||||
Net income attributable to partners | $ | 184,090 | $ | 64,345 |
Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||||||||||||||
Adjusted EBITDA: | Total Adjusted EBITDA | Inter- Segment | External Adjusted EBITDA | Total Adjusted EBITDA | Inter- Segment | External Adjusted EBITDA | |||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Natural Gas Transportation | $ | 292,517 | $ | (4,770 | ) | $ | 287,747 | $ | 109,023 | $ | (4,192 | ) | $ | 104,831 | |||||||||
Crude Oil Transportation | 181,808 | 8,054 | 189,862 | 195,732 | 12,613 | 208,345 | |||||||||||||||||
Gathering, Processing & Terminalling | 35,984 | (3,284 | ) | 32,700 | 10,104 | (8,421 | ) | 1,683 | |||||||||||||||
Corporate and Other | (5,515 | ) | — | (5,515 | ) | (3,809 | ) | — | (3,809 | ) | |||||||||||||
Reconciliation to Net Income: | |||||||||||||||||||||||
Add: | |||||||||||||||||||||||
Equity in earnings of unconsolidated investments | 187,121 | 37,495 | |||||||||||||||||||||
Gain on remeasurement of unconsolidated investment | 9,728 | — | |||||||||||||||||||||
Non-cash gain related to derivative instruments, net of noncontrolling interests | 1,669 | 5,391 | |||||||||||||||||||||
Less: | |||||||||||||||||||||||
Interest expense, net of noncontrolling interest | (57,265 | ) | (27,639 | ) | |||||||||||||||||||
Depreciation and amortization expense, net of noncontrolling interest | (67,894 | ) | (66,484 | ) | |||||||||||||||||||
Distributions from unconsolidated investments | (229,510 | ) | (53,434 | ) | |||||||||||||||||||
Non-cash compensation expense | (5,087 | ) | (4,270 | ) | |||||||||||||||||||
Gain (loss) on disposal of assets | 1,319 | (1,849 | ) | ||||||||||||||||||||
Net income attributable to partners | $ | 344,875 | $ | 200,260 |
Nine Months Ended September 30, | |||||||
Capital Expenditures: | 2017 | 2016 | |||||
(in thousands) | |||||||
Natural Gas Transportation | $ | 9,829 | $ | 11,146 | |||
Crude Oil Transportation | 28,785 | 25,985 | |||||
Gathering, Processing & Terminalling | 49,436 | 18,266 | |||||
Corporate and Other | — | — | |||||
Total capital expenditures | $ | 88,050 | $ | 55,397 |
Assets: | September 30, 2017 | December 31, 2016 | |||||
(in thousands) | |||||||
Natural Gas Transportation | $ | 1,618,828 | $ | 1,176,147 | |||
Crude Oil Transportation | 1,384,981 | 1,410,695 | |||||
Gathering, Processing & Terminalling | 887,089 | 495,170 | |||||
Corporate and Other | 14,498 | 20,201 | |||||
Total assets | $ | 3,905,396 | $ | 3,102,213 |
• | our ability to complete and integrate acquisitions from TD or from third parties, including our acquisitions of the PRB Crude System in August 2017, an additional 49% membership interest in Deeprock Development in July 2017, the Douglas Gathering System in June 2017, an additional 24.99% membership interest in Rockies Express from TD in March 2017 and a 100% membership interest in NatGas and Terminals from TD in January 2017; |
• | the demand for our services, including crude oil transportation, storage, gathering and terminalling services; natural gas transportation, storage, gathering and processing services; and water business services, as well as our ability to successfully contract or re-contract with our customers; |
• | large or multiple customer defaults, including defaults resulting from actual or potential insolvencies; |
• | our ability to successfully implement our business plan; |
• | changes in general economic conditions; |
• | competitive conditions in our industry; |
• | the effects of existing and future laws and governmental regulations; |
• | actions taken by third-party operators, processors and transporters; |
• | our ability to complete internal growth projects on time and on budget; |
• | the price and availability of debt and equity financing; |
• | the level of production of crude oil, natural gas and other hydrocarbons and the resultant market prices of crude oil, natural gas, natural gas liquids, and other hydrocarbons; |
• | the availability and price of natural gas and crude oil, and fuels derived from both, to the consumer compared to the price of alternative and competing fuels; |
• | competition from the same and alternative energy sources; |
• | energy efficiency and technology trends; |
• | operating hazards and other risks incidental to transporting, storing, gathering and terminalling crude oil; transporting, storing and processing natural gas; and transporting, gathering and disposing of water produced in connection with hydrocarbon exploration and production activities; |
• | environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves; |
• | natural disasters, weather-related delays, casualty losses and other matters beyond our control; |
• | interest rates; |
• | labor relations; |
• | changes in tax status; |
• | the effects of future litigation; and |
• | certain factors discussed elsewhere in this Quarterly Report. |
• | Natural Gas Transportation—the ownership and operation of FERC-regulated interstate natural gas pipelines and integrated natural gas storage facilities; |
• | Crude Oil Transportation—the ownership and operation of a FERC-regulated crude oil pipeline system; and |
• | Gathering, Processing & Terminalling—the ownership and operation of natural gas gathering, processing, treating and fractionation facilities; crude oil gathering, storage and terminalling facilities; the provision of water business services primarily to the oil and gas exploration and production industry; and the transportation of NGLs. |
• | our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing methods; |
• | the ability of our assets to generate sufficient cash flow to make distributions to our unitholders; |
• | our ability to incur and service debt and fund capital expenditures; and |
• | the viability of acquisitions and other capital expenditure projects and the returns on investment of various expansion and growth opportunities. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Reconciliation of Adjusted EBITDA to Net Income | |||||||||||||||
Net income attributable to partners | $ | 184,090 | $ | 64,345 | $ | 344,875 | $ | 200,260 | |||||||
Add: | |||||||||||||||
Interest expense, net of noncontrolling interest | 22,888 | 10,907 | 57,265 | 27,639 | |||||||||||
Depreciation and amortization expense, net of noncontrolling interest | 23,472 | 21,648 | 67,894 | 66,484 | |||||||||||
Distributions from unconsolidated investments | 138,828 | 22,462 | 229,510 | 53,434 | |||||||||||
Non-cash loss (gain) related to derivative instruments, net of noncontrolling interest | 688 | 4,410 | (1,669 | ) | (5,391 | ) | |||||||||
Non-cash compensation expense (1) | 2,135 | 1,635 | 5,087 | 4,270 | |||||||||||
(Gain) loss from disposal of assets | — | — | (1,319 | ) | 1,849 | ||||||||||
Less: | |||||||||||||||
Equity in earnings of unconsolidated investments | (123,642 | ) | (12,764 | ) | (187,121 | ) | (37,495 | ) | |||||||
Gain on remeasurement of unconsolidated investment | (9,728 | ) | — | (9,728 | ) | — | |||||||||
Adjusted EBITDA | $ | 238,731 | $ | 112,643 | $ | 504,794 | $ | 311,050 | |||||||
Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Cash Provided by Operating Activities | |||||||||||||||
Net cash provided by operating activities | $ | 214,297 | $ | 105,501 | $ | 456,148 | $ | 311,008 | |||||||
Add: | |||||||||||||||
Interest expense, net of noncontrolling interest | 22,888 | 10,907 | 57,265 | 27,639 | |||||||||||
Other, including changes in operating working capital | 1,546 | (3,765 | ) | (8,619 | ) | (27,597 | ) | ||||||||
Adjusted EBITDA | $ | 238,731 | $ | 112,643 | $ | 504,794 | $ | 311,050 | |||||||
Add: | |||||||||||||||
Deficiency payments received, net | 2,288 | 9,114 | 26,639 | 24,892 | |||||||||||
Less: | |||||||||||||||
Cash interest cost | (21,814 | ) | (9,950 | ) | (53,973 | ) | (25,183 | ) | |||||||
Maintenance capital expenditures, net | (3,689 | ) | (2,828 | ) | (7,746 | ) | (7,085 | ) | |||||||
Cash flow attributable to predecessor operations | — | (4,117 | ) | — | (4,849 | ) | |||||||||
Distributable Cash Flow | $ | 215,516 | $ | 104,862 | $ | 469,714 | $ | 298,825 |
(1) | Represents TEP's portion of non-cash compensation expense related to Equity Participation Units, excluding amounts allocated to TD. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Reconciliation of Adjusted EBITDA to Operating Income in the Natural Gas Transportation Segment (1) | |||||||||||||||
Operating income | $ | 17,016 | $ | 15,436 | $ | 49,910 | $ | 39,873 | |||||||
Add: | |||||||||||||||
Depreciation and amortization expense | 4,794 | 4,876 | 14,369 | 16,233 | |||||||||||
Distributions from unconsolidated investment | 138,132 | 21,804 | 227,547 | 51,460 | |||||||||||
Other income, net | 455 | 480 | 807 | 1,267 | |||||||||||
Less: | |||||||||||||||
Non-cash (gain) loss related to derivative instruments | $ | — | $ | (161 | ) | $ | (116 | ) | $ | 190 | |||||
Segment Adjusted EBITDA | $ | 160,397 | $ | 42,435 | $ | 292,517 | $ | 109,023 | |||||||
Reconciliation of Adjusted EBITDA to Operating Income in the Crude Oil Transportation Segment (1) | |||||||||||||||
Operating income | $ | 51,478 | $ | 53,227 | $ | 145,462 | $ | 159,619 | |||||||
Add: | |||||||||||||||
Depreciation and amortization expense, net of noncontrolling interest | 13,027 | 13,112 | 39,673 | 39,276 | |||||||||||
Less: | |||||||||||||||
Adjusted EBITDA attributable to noncontrolling interests | (1,024 | ) | (1,060 | ) | (2,895 | ) | (3,170 | ) | |||||||
Non-cash loss (gain) related to derivative instruments, net of noncontrolling interest | 202 | 152 | (432 | ) | 7 | ||||||||||
Segment Adjusted EBITDA | $ | 63,683 | $ | 65,431 | $ | 181,808 | $ | 195,732 | |||||||
Reconciliation of Adjusted EBITDA to Operating Income (Loss) in the Gathering, Processing & Terminalling Segment (1) | |||||||||||||||
Operating income (loss) | $ | 9,045 | $ | 1,851 | $ | 20,928 | $ | (4,629 | ) | ||||||
Add: | |||||||||||||||
Depreciation and amortization expense, net of noncontrolling interest | 5,651 | 3,660 | 13,852 | 10,975 | |||||||||||
Non-cash loss related to derivative instruments | 486 | — | 764 | — | |||||||||||
Distributions from unconsolidated investment | 696 | 658 | 1,963 | 1,974 | |||||||||||
Other (expense) income, net | (1 | ) | — | 142 | — | ||||||||||
Less: | |||||||||||||||
(Gain) loss on disposal of assets | — | — | (1,319 | ) | 1,849 | ||||||||||
Adjusted EBITDA attributable to noncontrolling interests | (389 | ) | (24 | ) | (346 | ) | (65 | ) | |||||||
Segment Adjusted EBITDA | $ | 15,488 | $ | 6,145 | $ | 35,984 | $ | 10,104 | |||||||
Total Segment Adjusted EBITDA | $ | 239,568 | $ | 114,011 | $ | 510,309 | $ | 314,859 | |||||||
Corporate general and administrative costs | (837 | ) | (1,368 | ) | (5,515 | ) | (3,809 | ) | |||||||
Total Adjusted EBITDA | $ | 238,731 | $ | 112,643 | $ | 504,794 | $ | 311,050 |
(1) | Segment results as presented represent total operating income and Adjusted EBITDA, including intersegment activity, for the Natural Gas Transportation, Crude Oil Transportation, and Gathering, Processing & Terminalling segments. For reconciliations to the consolidated financial data, see Note 15 – Reportable Segments to the accompanying condensed consolidated financial statements. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||
Natural Gas Transportation Segment: | |||||||||||
Gas transportation average firm contracted volumes (MMcf/d) (1) | 1,646 | 1,601 | 1,737 | 1,625 | |||||||
Crude Oil Transportation Segment: | |||||||||||
Crude oil transportation average contracted capacity (Bbls/d) | 306,916 | 298,580 | 302,476 | 294,364 | |||||||
Crude oil transportation average throughput (Bbls/d) | 269,585 | 276,138 | 268,435 | 284,512 | |||||||
Gathering, Processing & Terminalling Segment: | |||||||||||
Natural gas processing inlet volumes (MMcf/d) | 111 | 103 | 106 | 102 | |||||||
Freshwater average volumes (Bbls/d) | 109,988 | 31,656 | 93,885 | 31,291 | |||||||
Produced water gathering and disposal average volumes (Bbls/d) | 43,924 | 23,784 | 23,405 | 18,176 |
(1) | Volumes transported under firm fee contracts, excluding Rockies Express. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Revenues: | |||||||||||||||
Crude oil transportation services | $ | 86,180 | $ | 91,387 | $ | 260,366 | $ | 279,281 | |||||||
Natural gas transportation services | 30,256 | 31,444 | 91,370 | 89,406 | |||||||||||
Sales of natural gas, NGLs, and crude oil | 32,215 | 20,487 | 70,514 | 51,243 | |||||||||||
Processing and other revenues | 27,218 | 9,950 | 58,882 | 29,521 | |||||||||||
Total Revenues | 175,869 | 153,268 | 481,132 | 449,451 | |||||||||||
Operating Costs and Expenses: | |||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown below) | 26,984 | 18,319 | 58,740 | 47,845 | |||||||||||
Cost of transportation services (exclusive of depreciation and amortization shown below) | 10,538 | 10,842 | 38,799 | 35,946 | |||||||||||
Operations and maintenance | 17,412 | 15,146 | 45,569 | 42,374 | |||||||||||
Depreciation and amortization | 23,782 | 21,177 | 67,276 | 65,074 | |||||||||||
General and administrative | 15,925 | 13,413 | 44,362 | 41,225 | |||||||||||
Taxes, other than income taxes | 6,661 | 6,860 | 21,799 | 20,293 | |||||||||||
Contract termination | — | — | — | 8,061 | |||||||||||
(Gain) loss on disposal of assets | — | — | (1,264 | ) | 1,849 | ||||||||||
Total Operating Costs and Expenses | 101,302 | 85,757 | 275,281 | 262,667 | |||||||||||
Operating Income | 74,567 | 67,511 | 205,851 | 186,784 | |||||||||||
Other Income (Expense): | |||||||||||||||
Interest expense, net | (22,888 | ) | (10,907 | ) | (57,265 | ) | (27,639 | ) | |||||||
Unrealized (loss) gain on derivative instrument | — | (4,419 | ) | 1,885 | 5,588 | ||||||||||
Equity in earnings of unconsolidated investments | 123,642 | 12,764 | 187,121 | 37,495 | |||||||||||
Gain on remeasurement of unconsolidated investment | 9,728 | — | 9,728 | — | |||||||||||
Other income, net | 454 | 480 | 796 | 1,267 | |||||||||||
Total Other Income (Expense) | 110,936 | (2,082 | ) | 142,265 | 16,711 | ||||||||||
Net income | 185,503 | 65,429 | 348,116 | 203,495 | |||||||||||
Net income attributable to noncontrolling interests | (1,413 | ) | (1,084 | ) | (3,241 | ) | (3,235 | ) | |||||||
Net income attributable to partners | $ | 184,090 | $ | 64,345 | $ | 344,875 | $ | 200,260 | |||||||
Other Financial Data: | |||||||||||||||
Adjusted EBITDA (1) | $ | 238,731 | $ | 112,643 | $ | 504,794 | $ | 311,050 |
(1) | For more information regarding Adjusted EBITDA and a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, please see "Non-GAAP Financial Measures" above. |
Segment Financial Data - Natural Gas Transportation (1) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Revenues: | |||||||||||||||
Natural gas transportation services | $ | 32,139 | $ | 32,871 | $ | 96,140 | $ | 93,598 | |||||||
Sales of natural gas, NGLs, and crude oil | 603 | 935 | 2,793 | 1,331 | |||||||||||
Processing and other revenues | 3,342 | 1,188 | 6,689 | 4,875 | |||||||||||
Total revenues | 36,084 | 34,994 | 105,622 | 99,804 | |||||||||||
Operating costs and expenses: | |||||||||||||||
Cost of sales | 586 | 749 | 2,177 | 2,268 | |||||||||||
Cost of transportation services | 1,489 | 874 | 2,731 | 4,171 | |||||||||||
Operations and maintenance | 7,114 | 8,025 | 21,502 | 21,711 | |||||||||||
Depreciation and amortization | 4,794 | 4,876 | 14,369 | 16,233 | |||||||||||
General and administrative | 4,180 | 3,872 | 11,534 | 12,068 | |||||||||||
Taxes, other than income taxes | 905 | 1,162 | 3,399 | 3,480 | |||||||||||
Total operating costs and expenses | 19,068 | 19,558 | 55,712 | 59,931 | |||||||||||
Operating income | $ | 17,016 | $ | 15,436 | $ | 49,910 | $ | 39,873 |
(1) | Segment results as presented represent total revenue and operating income, including intersegment activity. For reconciliations to the consolidated financial data, see Note 15 – Reportable Segments to the accompanying condensed consolidated financial statements. |
Segment Financial Data - Crude Oil Transportation (1) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Revenues: | |||||||||||||||
Crude oil transportation services | $ | 90,113 | $ | 91,387 | $ | 264,299 | $ | 279,281 | |||||||
Sales of natural gas, NGLs, and crude oil | 2,916 | 4,439 | 9,469 | 4,587 | |||||||||||
Total revenues | 93,029 | 95,826 | 273,768 | 283,868 | |||||||||||
Operating costs and expenses: | |||||||||||||||
Cost of sales | 2,819 | 3,487 | 8,154 | 3,487 | |||||||||||
Cost of transportation services | 11,957 | 12,939 | 39,708 | 41,586 | |||||||||||
Operations and maintenance | 2,976 | 3,203 | 9,048 | 10,244 | |||||||||||
Depreciation and amortization | 13,127 | 12,836 | 39,230 | 38,448 | |||||||||||
General and administrative | 5,320 | 4,866 | 15,318 | 15,236 | |||||||||||
Taxes, other than income taxes | 5,352 | 5,268 | 16,848 | 15,248 | |||||||||||
Total operating costs and expenses | 41,551 | 42,599 | 128,306 | 124,249 | |||||||||||
Operating income | $ | 51,478 | $ | 53,227 | $ | 145,462 | $ | 159,619 |
(1) | Segment results as presented represent total revenue and operating income, including intersegment activity. For reconciliations to the consolidated financial data, see Note 15 – Reportable Segments to the accompanying condensed consolidated financial statements. |
Segment Financial Data - Gathering, Processing & Terminalling (1) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands) | |||||||||||||||
Revenues: | |||||||||||||||
Sales of natural gas, NGLs, and crude oil | $ | 28,696 | $ | 15,384 | $ | 58,252 | $ | 45,596 | |||||||
Processing and other revenues | 29,040 | 11,646 | 63,163 | 33,222 | |||||||||||
Total revenues | 57,736 | 27,030 | 121,415 | 78,818 | |||||||||||
Operating costs and expenses: | |||||||||||||||
Cost of sales | 24,120 | 14,435 | 49,148 | 42,516 | |||||||||||
Cost of transportation services | 7,531 | 1,259 | 15,294 | 2,802 | |||||||||||
Operations and maintenance | 7,322 | 3,918 | 15,019 | 10,419 | |||||||||||
Depreciation and amortization | 5,861 | 3,465 | 13,677 | 10,393 | |||||||||||
General and administrative | 3,453 | 1,672 | 7,061 | 5,842 | |||||||||||
Contract termination | — | — | — | 8,061 | |||||||||||
Taxes, other than income taxes | 404 | 430 | 1,552 | 1,565 | |||||||||||
(Gain) loss on disposal of assets | — | — | (1,264 | ) | 1,849 | ||||||||||
Total operating costs and expenses | 48,691 | 25,179 | 100,487 | 83,447 | |||||||||||
Operating income (loss) | $ | 9,045 | $ | 1,851 | $ | 20,928 | $ | (4,629 | ) |
(1) | Segment results as presented represent total revenue and operating income, including intersegment activity. For reconciliations to the consolidated financial data, see Note 15 – Reportable Segments to the accompanying condensed consolidated financial statements. |
• | cash generated from our operations; |
• | borrowing capacity available under our revolving credit facility; and |
• | future issuances of additional partnership units and/or debt securities. |
September 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Cash on hand | $ | 2,998 | $ | 1,873 | |||
Total capacity under the revolving credit facility | 1,750,000 | 1,750,000 | |||||
Less: Outstanding borrowings under the revolving credit facility | (881,000 | ) | (1,015,000 | ) | |||
Less: Letters of credit issued under the revolving credit facility | (3,094 | ) | — | ||||
Available capacity under the revolving credit facility | 865,906 | 735,000 | |||||
Total liquidity | $ | 868,904 | $ | 736,873 |
• | an increase in accounts payable of $45.5 million primarily due to crude oil purchases at Stanchion, as well as increased volumes at TMID and Water Solutions; |
• | an increase in deferred revenue of $27.2 million primarily from deficiency payments collected by Pony Express; |
• | a decrease in derivative assets at fair value of $11.0 million as we exercised the remainder of the call option granted by TD; and |
• | an increase in accrued taxes of $5.9 million as a result of increased tax assessments on Pony Express assets placed in service during 2016. |
• | an increase in accounts receivable of $36.1 million primarily due to crude oil sales at Stanchion; and |
• | a decrease in accrued liabilities of $5.5 million primarily due to a decrease in interest accrued at September 30, 2017 compared to December 31, 2016 due to the timing of interest payments in September 2017. |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Net cash provided by (used in): | |||||||
Operating activities | $ | 456,148 | $ | 311,008 | |||
Investing activities | $ | (852,941 | ) | $ | (559,774 | ) | |
Financing activities | $ | 397,918 | $ | 247,572 |
• | cash outflows of $400.0 million for the acquisition of an additional 24.99% membership interest in Rockies Express; |
• | cash outflows of $140.0 million for the acquisition of Terminals and NatGas; |
• | cash outflows of $128.5 million for the acquisition of the Douglas Gathering System; |
• | capital expenditures of $88.1 million, primarily due to spending on an additional freshwater connection at Water Solutions and on a connection to a refinery complex on the Pony Express System and remediation digs on the Pony Express System as discussed in Note 14 – Legal and Environmental Matters; |
• | cash outflows of $57.2 million for the acquisition of an additional 40% membership interest in Deeprock Development; |
• | cash outflows of $36.0 million for the acquisition of the PRB Crude System; and |
• | contributions to unconsolidated investments in the amount of $31.6 million, primarily to fund remaining costs associated with the Zone 3 Capacity Enhancement project at Rockies Express. |
• | capital expenditures of $55.4 million, primarily due to post in-service spending on Pony Express System projects and costs associated with construction of the Buckingham Terminal; |
• | cash outflows of $49.1 million for a portion of the acquisition of an additional 31.3% membership interest in Pony Express, the remainder of which is classified as a financing activity as discussed below; and |
• | contributions to Rockies Express in the amount of $35.5 million. |
• | proceeds from the issuance of $850.0 million in aggregate principal amount of 2024 Notes and 2028 Notes; and |
• | net cash proceeds of $112.4 million from the issuance of 2,341,061 common units under our Equity Distribution Agreements. |
• | distributions to unitholders of $284.7 million; |
• | net repayments under the revolving credit facility of $134.0 million; |
• | $72.4 million for the exercise of the remainder of the call option granted by TD covering 1,703,094 common units; and |
• | $35.3 million for the 736,262 common units repurchased from TD. |
• | proceeds from the issuance of $400.0 million in aggregate principal amount of 5.50% Senior Notes due 2024; |
• | net cash proceeds of $290.5 million from the issuance of 6,703,984 common units under the Equity Distribution Agreements; |
• | net borrowings under the revolving credit facility of $252.0 million; and |
• | net cash proceeds of $90.0 million from the issuance of 2,416,987 common units representing limited partnership interests in a private placement transaction. |
• | $425.9 million for the portion of the acquisition of an additional 31.3% membership interest in Pony Express which exceeds the cumulative capital spending on the underlying assets acquired; |
• | distributions to unitholders of $207.5 million; and |
• | $151.4 million for the partial exercise of the call option granted by TD covering 3,563,146 common units. |
• | maintenance capital expenditures, which are cash expenditures incurred (including expenditures for the construction or development of new capital assets) that we expect to maintain our long-term operating income or operating capacity. These expenditures typically include certain system integrity, compliance and safety improvements; and |
• | expansion capital expenditures, which are cash expenditures we expect will increase our operating income or operating capacity over the long-term. Expansion capital expenditures include acquisitions or capital improvements (such as additions to or improvements on the capital assets owned, or acquisition or construction of new capital assets). |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Maintenance capital expenditures | $ | 7,746 | $ | 7,085 | |||
Expansion capital expenditures | 78,448 | 29,452 | |||||
Total capital expenditures incurred | $ | 86,194 | $ | 36,537 |
Fair Value | Effect of 10% Price Increase | Effect of 10% Price Decrease | |||||||||
(in thousands) | |||||||||||
Natural gas derivative contracts (1) | $ | 1 | $ | 29 | $ | (29 | ) | ||||
Crude oil derivative contracts (2) | $ | 472 | $ | (875 | ) | $ | 875 |
(1) | Represents long natural gas swaps outstanding with a notional volume of approximately 0.1 Bcf covering a portion of the natural gas that is expected to be purchased by our Gathering, Processing & Terminalling segment throughout 2017. |
(2) | Represents the purchase and sale of 323,620 barrels of crude oil by our Gathering, Processing & Terminalling segment which will settle throughout 2017 and the first quarter of 2018. |
Exhibit No. | Description | |
101.INS* | XBRL Instance Document. | |
101.SCH* | XBRL Taxonomy Extension Schema Document. | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. |
* - | filed herewith |
Tallgrass Energy Partners, LP | |||||||
(registrant) | |||||||
By: | Tallgrass MLP GP, LLC, its general partner | ||||||
Date: | November 2, 2017 | By: | /s/ Gary J. Brauchle | ||||
Name: | Gary J. Brauchle | ||||||
Title: | Executive Vice President and Chief Financial Officer | ||||||
(Duly Authorized Officer and Principal Financial Officer) |
1. | Relationship to Plan. This Award is subject to all of the terms, conditions and provisions of the Plan and administrative interpretations thereunder, if any, which have been adopted by the Board or the Committee thereunder and are in effect on the date hereof. Except as otherwise provided herein, capitalized terms shall have the same meanings ascribed to them under the Plan. |
2. | Vesting Schedule; Settlement. |
(a) | General. Except as otherwise provided Section 2(b) or the Plan, all of the Equity Participation Units subject to this Award shall vest, if at all, on the Distribution Hurdle Date; provided, however, that (i) the Participant remains in continuous employment with the Company or its Affiliates during the period beginning on the Grant Date and ending on the Distribution Hurdle Date and (ii) such Equity Participation Units have not previously been forfeited prior to such date pursuant to Section 3. If the Distribution Hurdle Date does not occur by the seventh anniversary of the Grant Date, then as of the seventh anniversary of the Grant Date, this Award will expire, terminate and be immediately forfeited by the Participant. |
(b) | Accelerated Vesting. If prior to the vesting of the Equity Participation Units under Section 2(a) and the seventh anniversary of the Grant Date: |
(i) | both (A) a Qualifying Transaction occurs and (B) David G. Dehaemers, Jr. ceases to be the Chief Executive Officer of Tallgrass Energy Holdings, LLC, TEGP Management, LLC or the Company, then all unvested Equity Participation Units shall vest as of the later date of (A) or (B) above (the "Qualifying Transaction Acceleration Date"); provided, however, that (x) the Participant remains in continuous employment with the Company or its Affiliates through such Qualifying Transaction Acceleration Date and (y) such Equity Participation Units have not previously been forfeited prior to such Qualifying Transaction Acceleration Date pursuant to Section 3; or |
(ii) | (A) David G. Dehaemers, Jr. ceases to be the Chief Executive Officer of Tallgrass Energy Holdings, LLC, TEGP Management, LLC or the Company other than in connection with a Qualifying Transaction and (B) after the occurrence of the event in (A), Participant's employment with the Company or its Affiliates is thereafter terminated without Cause, then all unvested Equity Participation Units shall vest as of the date of such termination of Participant’s employment. |
(c) | Settlement of Vested Equity Participation Units. Within 60 days following the Vesting Date of the Equity Participation Units, the Participant shall receive the number of Units equal to the number of vested Equity Participation Units. Units will be evidenced, at the sole option and in the sole discretion of the Committee, either (i) in book-entry form in the Participant's name in the Unit register of the Partnership maintained by the Partnership's transfer agent or (ii) a unit certificate issued in the Participant's name. Upon delivery of a Unit in respect of an Equity Participation Unit, such Equity Participation Unit shall cease to be outstanding in the Participant's notional account described in Section 4. |
(d) | Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below: |
3. | Forfeiture of Award. Except as set forth in Section 2(b)(ii), upon termination of the Participant's employment with the Company or any of its Affiliates for any reason prior to the Vesting Date, all Equity Participation Units that have not vested in accordance with Section 2 as of such termination date shall be immediately forfeited by the Participant on such termination date. |
4. | Bookkeeping Account. Until vesting, termination or forfeiture, the Award of Equity Participation Units hereunder shall be evidenced by entry in a bookkeeping account maintained by the Partnership or its transfer agent. |
5. | Rights as Unitholder; Delivery of Units. Until delivery of Units as described in Section 2(c), the Participant shall have no rights as a unitholder as a result of the grant of Equity Participation Units hereunder, including the right to vote the Equity Participation Units. The Participant shall not be entitled to receive any distributions with respect to the Equity Participation Units unless the Participant receives a separate grant of Distribution Equivalent Rights. The Company shall not be obligated to deliver any Units if counsel to the Company determines that such sale or delivery would violate any applicable law or any rule or regulation of any governmental authority or any rule or regulation of, or agreement of the Partnership with, any securities exchange or association upon which the |
6. | Assignment of Award. The Participant's rights under this Agreement and the Plan are personal; no assignment or transfer of the Participant's rights under and interest in this Award may be made by the Participant. |
7. | Withholding. No Units shall be delivered hereunder to or in respect of a Participant unless the amount of all federal, state and other governmental withholding tax requirements imposed upon the Company or an Affiliate with respect to the issuance of such Units has been remitted to the Company or an Affiliate or unless provisions to pay such withholding requirements have been made to the satisfaction of the Committee. The Participant shall satisfy such tax withholding by having the Company or an Affiliate withhold Units otherwise deliverable hereunder, having a Fair Market Value equal to the minimum required tax withholding rate. The Committee may make such provisions as it may deem appropriate for the withholding of any taxes which it determines is required in connection with this Award. |
8. | Restrictive Covenants. |
(a) | Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below: |
(b) | Noncompetition; Nonsolicitation. The Participant acknowledges and recognizes his status as a key executive and management employee of the Company, his possession of the Company’s trade secret and confidential and/or proprietary information which would be valuable or useful to the Company’s competitors, and the highly competitive nature of the business of the Company and the other members of the Tallgrass Group. Participant further acknowledges that the restrictions contained in this Section are reasonable and necessary for the protection of the immediate interests of the Company and the other members of the Tallgrass Group in that any violation of these restrictions would cause substantial injury to the Company and the other members of the Tallgrass Group. Therefore, in consideration of the Participant’s continued employment with the Company or any Affiliate and the benefits provided to Participant under this Award, and to further protect the proprietary, trade secret, and confidential information of the Tallgrass Group, the Participant agrees that, during the Prohibited Period the Participant will not: |
(i) | engage in a Prohibited Activity; or |
(ii) | solicit, entice, induce or in any manner influence any person who has an employee or independent contractor relationship with any member of the Tallgrass Group and with whom the Participant had contact, directly or indirectly, during the term of the Participant's employment, to change or end such relationship or hire, recruit, or attempt to hire or recruit, any such person to provide services for an affiliate of the Participant. |
(c) | Non-disparagement. So long as the Participant is an employee of the Company or any Affiliate and thereafter (including after the termination of the Participant's employment), the Participant will not make any comments, in any format, whether written, electronic or oral, disparaging of any member of the Tallgrass Group or critical of the business performance, methods, practices, operations, decisions or plans of any member of the Tallgrass Group to any third party. |
(d) | Protected Disclosures. Notwithstanding any provision to the contrary in this Agreement, nothing in this Agreement prohibits the Participant from reporting possible violations of law or regulation to any |
(e) | Specific Performance. Recognizing that irreparable damage will result to the Company and the Tallgrass Group in the event of the breach of any of the foregoing covenants and assurances by the Participant contained in Section 8, and that the Company's remedies at law for any such breach or threatened breach will be inadequate, the Company, in addition to such other remedies that may be available to it, will be entitled to an injunction, including a mandatory injunction, to be issued by any court of competent jurisdiction ordering compliance with this Agreement or enjoining and restraining the Participant, and each and every person and entity acting in concert or participation with him, from the continuation of the breach. The Company will not be required to obtain a bond in an amount greater than $1,000. The covenants and obligations of the Participant set forth in Section 8 are in addition to and not in lieu of or exclusive of any other obligations and duties of the Participant to the Company or any member of the Tallgrass Group, whether express or implied in fact or in law. |
(f) | Reformation. The Company and the Participant agree that the foregoing geographic, duration and other restrictions contained in this Agreement are fair, reasonable, and necessary to protect the Company’s legitimate business interests, given the geographic scope of the Company’s business operations, the competitive and specialized nature of the Company’s business, and the nature of Participant’s position with the Company and that any breach of the covenants contained in this Section 8 would cause irreparable injury to the Tallgrass Group. The Participant expressly represents that enforcement of the restrictive covenants set forth in this Section 8 will not impose an undue hardship upon the Participant or any person or entity affiliated with the Participant. The Participant understands that the foregoing restrictions may limit the Participant’s ability to engage in Prohibited Activities during the Prohibited Period, but acknowledges that the Participant will receive sufficiently high remuneration and other benefits from the Company to justify such restriction. Further, the Participant acknowledges that the Participant’s skills are such that the Participant can be gainfully employed in non-competitive employment, and that the restrictive covenants will not prevent the Participant from earning a living. Nevertheless, if any of the aforesaid restrictions are found by a court of competent jurisdiction to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for the restrictions herein set forth to be modified by the court making such determination so as to be reasonable and enforceable and, as so modified, to be fully enforced. |
9. | No Employment Guaranteed. No provision of this Agreement shall confer any right upon the Participant to continued employment with the Company or any Affiliate, and Participant acknowledges that Participant's employment with the Company or any Affiliate is on an at-will basis. |
10. | Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware, except with respect to Section 8, which shall be governed by, construed, and enforced in accordance with the laws of the State of Kansas. |
11. | Amendment. This Agreement cannot be modified, altered or amended, except by an agreement, in writing, signed by both the Company and the Participant. |
12. | Continuing Obligations; Entire Agreement. Participant acknowledges and agrees that Participant continues to remain bound by, and is required to continue to comply with, the (i) Confidentiality Agreement and Assignment of Inventions dated [________] between Participant and the Company (the "Confidentiality Agreement") and (ii) Acceptance Statement dated [________] (the "Acceptance Agreement") and that such agreements remain in full force and effect, unchanged by the execution, delivery and performance of this Agreement. This Agreement, together with the Confidentiality Agreement and the Acceptance Agreement, constitutes and expresses the entire agreement of the parties with respect to the subject matter hereof, and may be modified only by written agreement signed by the parties. |
13. | Section 409A. The Equity Participation Units granted pursuant to this Agreement are intended to be exempt from Code Section 409A, as a "short-term deferral," and ambiguous provisions hereof, if any, shall be construed and interpreted in a manner consistent with such intent. No payment, benefit or consideration shall be substituted for the Equity Participation Units if such action would result in the imposition of taxes under Code Section 409A. |
TALLGRASS MLP GP, LLC | ||||
Date: | By: | |||
Name: | ||||
Title: |
PARTICIPANT: | ||||
Date: | ||||
[Name] |
TEP (1) | TEP Pre-Predecessor | |||||||||||||||||||||||||||
Nine Months Ended September 30, 2017 | Year Ended December 31, 2016 | Year Ended December 31, 2015 | Year Ended December 31, 2014 | Year Ended December 31, 2013 | Period from November 12, 2012 to December 31, 2012 | Period from January 1, 2012 to November 12, 2012 | ||||||||||||||||||||||
Earnings from continuing operations before fixed charges: | ||||||||||||||||||||||||||||
Pre-tax income from continuing operations before earnings from unconsolidated affiliates | $ | 160,995 | $ | 220,358 | $ | 194,413 | $ | 64,169 | $ | 12,971 | $ | (1,889 | ) | $ | 51,775 | |||||||||||||
Fixed charges | 61,565 | 51,306 | 25,437 | 11,626 | 13,360 | 3,450 | 69 | |||||||||||||||||||||
Amortization of capitalized interest | 59 | 65 | 66 | 35 | — | — | — | |||||||||||||||||||||
Distributed earnings from unconsolidated affiliates | 187,624 | 54,449 | 3,096 | 1,280 | — | — | — | |||||||||||||||||||||
less: Capitalized interest | (522 | ) | (471 | ) | (811 | ) | (1,025 | ) | (242 | ) | — | — | ||||||||||||||||
Earnings from continuing operations before fixed charges | $ | 409,721 | $ | 325,707 | $ | 222,201 | $ | 76,085 | $ | 26,089 | $ | 1,561 | $ | 51,844 | ||||||||||||||
Fixed charges: | ||||||||||||||||||||||||||||
Interest expense, net of capitalized interest | 54,015 | 37,189 | 14,226 | 7,648 | 11,264 | 3,040 | — | |||||||||||||||||||||
Capitalized interest | 522 | 471 | 811 | 1,025 | 242 | — | — | |||||||||||||||||||||
Estimate of interest within rental expense (33.3%) | 3,707 | 10,032 | 8,615 | 1,574 | 109 | 14 | 69 | |||||||||||||||||||||
Amortization of debt costs | 3,321 | 3,614 | 1,785 | 1,379 | 1,745 | 396 | — | |||||||||||||||||||||
Total fixed charges | $ | 61,565 | $ | 51,306 | $ | 25,437 | $ | 11,626 | $ | 13,360 | $ | 3,450 | $ | 69 | ||||||||||||||
Ratio of earnings to fixed charges (2) | 6.66 | 6.35 | 8.74 | 6.54 | 1.95 | — | (3) | 751.36 |
(1) | TEP closed the acquisition of Trailblazer on April 1, 2014, the acquisition of a controlling 33.3% membership interest in Pony Express effective September 1, 2014, and the acquisitions of Terminals and NatGas effective January 1, 2017. As these acquisitions were considered transactions between entities under common control, and changes in reporting entity, financial information presented subsequent to November 13, 2012 and prior to the respective acquisition dates has been recast to include Trailblazer, the initial 33.3% of Pony Express, and Terminals and NatGas. TEP closed the acquisitions of an additional 33.3% and 31.3% membership interests in Pony Express effective March 1, 2015 and January 1, 2016, respectively, which represent transactions between entities under common control and acquisitions of noncontrolling interests. As a result, financial information for periods prior to March 1, 2015 and January 1, 2016 has not been recast to reflect the additional 33.3% and 31.3% membership interests. |
(2) | For purposes of determining the ratio of earnings to fixed charges, earnings are defined as pretax income or loss from continuing operations before earnings from unconsolidated affiliates, plus fixed charges, plus distributed earnings from unconsolidated affiliates, less capitalized interest. Fixed charges consist of interest expensed, capitalized interest, amortization of deferred loan costs, and an estimate of the interest within rental expense. |
(3) | As a result of the net loss for the period from November 12, 2012 to December 31, 2012, the ratio of earnings to fixed charges was less than 1:1. TEP would have needed to generate additional earnings of $1.9 million to achieve an earnings to fixed charges ratio of 1:1 for the period from November 12, 2012 to December 31, 2012. |
1. | I have reviewed this Quarterly Report on Form 10-Q of Tallgrass Energy Partners, LP; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ David G. Dehaemers, Jr. | |
David G. Dehaemers, Jr. | ||
President and Chief Executive Officer of Tallgrass MLP GP, LLC (the general partner of Tallgrass Energy Partners, LP) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Tallgrass Energy Partners, LP; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Gary J. Brauchle | |
Gary J. Brauchle | ||
Executive Vice President and Chief Financial Officer of Tallgrass MLP GP, LLC (the general partner of Tallgrass Energy Partners, LP) |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. |
By: | /s/ David G. Dehaemers, Jr. | |
David G. Dehaemers, Jr. | ||
President and Chief Executive Officer of Tallgrass MLP GP, LLC (the general partner of Tallgrass Energy Partners, LP) |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. |
By: | /s/Gary J. Brauchle | |
Gary J. Brauchle | ||
Executive Vice President and Chief Financial Officer of Tallgrass MLP GP, LLC (the general partner of Tallgrass Energy Partners, LP) |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Nov. 02, 2017 |
|
Document and Entity Information [Line Items] | ||
Entity Registrant Name | TALLGRASS ENERGY PARTNERS, LP | |
Entity Central Index Key | 0001569134 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q3 | |
Trading Symbol | TEP | |
Amendment Flag | false | |
Common Units | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 73,199,753 | |
General Partner Units | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 834,391 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
General Partner Units Issued (in units) | 834,391 | 834,391 |
General Partner Units Outstanding (in units) | 834,391 | 834,391 |
Limited Partner Units Issued (in units) | 73,176,516 | 72,485,954 |
Limited Partner Units Outstanding (in units) | 73,176,516 | 72,485,954 |
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands |
Total |
Total Partner Equity Excluding Portion Attributable to Noncontrolling Interest |
Total Partner Equity Excluding Portion Attributable to Noncontrolling Interest
Terminals and NatGas
|
Total Partner Equity Excluding Portion Attributable to Noncontrolling Interest
Rockies Express Pipeline LLC
|
Total Partner Equity Excluding Portion Attributable to Noncontrolling Interest
Deeprock Development, LLC
|
Total Partner Equity Excluding Portion Attributable to Noncontrolling Interest
Pony Express Pipeline
|
Total Partner Equity Excluding Portion Attributable to Noncontrolling Interest
Water Solutions
|
Noncontrolling Interest |
Noncontrolling Interest
Terminals and NatGas
|
Noncontrolling Interest
Rockies Express Pipeline LLC
|
Noncontrolling Interest
Deeprock Development, LLC
|
Noncontrolling Interest
Pony Express Pipeline
|
Noncontrolling Interest
Water Solutions
|
Total Partner Equity Including Portion Attributable to Noncontrolling Interest |
Total Partner Equity Including Portion Attributable to Noncontrolling Interest
Terminals and NatGas
|
Total Partner Equity Including Portion Attributable to Noncontrolling Interest
Rockies Express Pipeline LLC
|
Total Partner Equity Including Portion Attributable to Noncontrolling Interest
Deeprock Development, LLC
|
Total Partner Equity Including Portion Attributable to Noncontrolling Interest
Pony Express Pipeline
|
Total Partner Equity Including Portion Attributable to Noncontrolling Interest
Water Solutions
|
Predecessor Equity |
Predecessor Equity
Terminals and NatGas
|
Predecessor Equity
Rockies Express Pipeline LLC
|
Predecessor Equity
Deeprock Development, LLC
|
Predecessor Equity
Pony Express Pipeline
|
Predecessor Equity
Water Solutions
|
Limited Partner |
Limited Partner
Terminals and NatGas
|
Limited Partner
Rockies Express Pipeline LLC
|
Limited Partner
Deeprock Development, LLC
|
Limited Partner
Pony Express Pipeline
|
Limited Partner
Water Solutions
|
General Partner |
General Partner
Terminals and NatGas
|
General Partner
Rockies Express Pipeline LLC
|
General Partner
Deeprock Development, LLC
|
General Partner
Pony Express Pipeline
|
General Partner
Water Solutions
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total Equity | $ 1,341,489 | $ 445,077 | $ 1,786,566 | $ 71,564 | $ 1,618,766 | $ (348,841) | |||||||||||||||||||||||||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||||||||||||||||||||||||||||
Net income | $ 203,495 | 200,260 | 3,235 | 203,495 | 3,408 | 123,505 | 73,347 | ||||||||||||||||||||||||||||||
Issuance of units to public, net of offering costs | 290,474 | 0 | 290,474 | 0 | 290,474 | 0 | |||||||||||||||||||||||||||||||
Distributions to unitholders | (207,539) | 0 | (207,539) | 0 | (145,664) | (61,875) | |||||||||||||||||||||||||||||||
Noncash compensation expense | 5,931 | 0 | 5,931 | 0 | 5,931 | 0 | |||||||||||||||||||||||||||||||
Partial exercise of call option | (177,292) | (177,292) | 0 | (151,434) | (25,858) | ||||||||||||||||||||||||||||||||
Payments for Repurchase of Common Stock | 0 | ||||||||||||||||||||||||||||||||||||
Acquisitions | $ (11,360) | $ (417,679) | $ (429,039) | $ 0 | $ 268,607 | $ (279,967) | |||||||||||||||||||||||||||||||
Contributions from TD | 5,308 | 5,308 | 0 | 5,308 | |||||||||||||||||||||||||||||||||
Payments to Acquire Additional Interest in Subsidiaries | (49,118) | $ (5,432) | $ (568) | $ (6,000) | $ 0 | $ (5,373) | $ (59) | ||||||||||||||||||||||||||||||
Contributions from noncontrolling interests | 0 | 8,700 | 8,700 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||
Payments to Noncontrolling Interests | 425,882 | 0 | 5,017 | 5,017 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Proceeds from private placement, net of offering costs | 90,009 | 90,009 | 0 | 90,009 | 0 | 90,009 | 0 | ||||||||||||||||||||||||||||||
Contribution from Predecessor Entities, net | 5,116 | 5,116 | 5,116 | ||||||||||||||||||||||||||||||||||
Total Equity | 1,536,964 | 33,748 | 1,570,712 | 80,088 | 2,094,821 | (637,945) | |||||||||||||||||||||||||||||||
Total Equity | 1,554,416 | 1,520,451 | 33,965 | 1,554,416 | 82,295 | 2,070,495 | (632,339) | ||||||||||||||||||||||||||||||
Net income | 348,116 | 344,875 | 3,241 | 348,116 | 0 | 237,182 | 107,693 | ||||||||||||||||||||||||||||||
Issuance of units to public, net of offering costs | 112,400 | 112,393 | 0 | 112,393 | 0 | 112,393 | 0 | ||||||||||||||||||||||||||||||
Distributions to unitholders | (284,724) | 0 | (284,724) | 0 | (186,950) | (97,774) | |||||||||||||||||||||||||||||||
Noncash compensation expense | 6,169 | 0 | 6,169 | 0 | 6,169 | 0 | |||||||||||||||||||||||||||||||
LTIP units tendered by employees to satisfy tax withholding obligations | (12,402) | 0 | (12,402) | 0 | (12,402) | 0 | |||||||||||||||||||||||||||||||
Partial exercise of call option | (84,942) | 0 | (84,942) | 0 | (72,381) | (12,561) | |||||||||||||||||||||||||||||||
Payments for Repurchase of Common Stock | (35,335) | 35,335 | 0 | 35,335 | 0 | 35,335 | 0 | ||||||||||||||||||||||||||||||
Acquisitions | $ (140,000) | $ 63,681 | $ 0 | $ 0 | $ 0 | $ 45,869 | $ (140,000) | $ 63,681 | $ 45,869 | $ (82,295) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ (57,705) | $ 63,681 | $ 0 | |||||||||||||||||||
Contributions from TD | 2,301 | 0 | 2,301 | 0 | 0 | 2,301 | |||||||||||||||||||||||||||||||
Payments to Acquire Additional Interest in Subsidiaries | 0 | $ 6,617 | $ (13,057) | $ (6,440) | $ 0 | $ 6,617 | $ 0 | ||||||||||||||||||||||||||||||
Contributions from noncontrolling interests | 0 | 1,093 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Payments to Noncontrolling Interests | 0 | 0 | 4,278 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||
Proceeds from private placement, net of offering costs | 0 | ||||||||||||||||||||||||||||||||||||
Total Equity | $ 1,565,917 | $ 1,499,084 | $ 66,833 | $ 1,565,917 | $ 0 | $ 2,125,788 | $ (626,704) |
Description of Business |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business | Tallgrass Energy Partners, LP ("TEP" or the "Partnership") is a publicly traded, growth-oriented limited partnership formed to own, operate, acquire and develop midstream energy assets in North America. "We," "us," "our" and similar terms refer to TEP together with its consolidated subsidiaries. Our operations are located in and provide services to certain key United States hydrocarbon basins, including the Denver-Julesburg, Powder River, Wind River, Permian and Hugoton-Anadarko Basins and the Niobrara, Mississippi Lime, Eagle Ford, Bakken, Marcellus, and Utica shale formations. Our reportable business segments are:
Natural Gas Transportation. We provide natural gas transportation and storage services for customers in the Rocky Mountain, Midwest and Appalachian regions of the United States through: (1) our 49.99% membership interest in Rockies Express Pipeline LLC ("Rockies Express"), which owns the Rockies Express Pipeline, a FERC-regulated natural gas pipeline system extending from Opal, Wyoming and Meeker, Colorado to Clarington, Ohio (the "Rockies Express Pipeline"), inclusive of the additional 24.99% membership interest acquired from Tallgrass Development, LP ("TD") effective March 31, 2017 as discussed in Note 3 – Acquisitions, and our 100% membership interest in Tallgrass NatGas Operator, LLC ("NatGas") acquired effective January 1, 2017, which operates the Rockies Express Pipeline, (2) the Tallgrass Interstate Gas Transmission system, a FERC-regulated natural gas transportation and storage system located in Colorado, Kansas, Missouri, Nebraska and Wyoming (the "TIGT System"), and (3) the Trailblazer Pipeline system, a FERC-regulated natural gas pipeline system extending from the Colorado and Wyoming border to Beatrice, Nebraska (the "Trailblazer Pipeline"). Crude Oil Transportation. We currently provide crude oil transportation to customers in Wyoming, Colorado, and the surrounding regions through Tallgrass Pony Express Pipeline, LLC ("Pony Express"), which owns a FERC-regulated crude oil pipeline commencing in Guernsey, Wyoming and terminating in Cushing, Oklahoma, and includes a lateral in Northeast Colorado commencing in Weld County, Colorado that interconnects with the pipeline just east of Sterling, Colorado (the "Pony Express System"). Gathering, Processing & Terminalling. We provide natural gas gathering and processing services for customers in Wyoming through: (1) a natural gas gathering system in the Powder River Basin (the "Douglas Gathering System") that was acquired on June 5, 2017, as discussed in Note 3 – Acquisitions, (2) the Casper and Douglas natural gas processing facilities, and (3) the West Frenchie Draw natural gas treating facility. We also provide crude oil gathering services for customers in Wyoming through a crude oil gathering system in the Powder River Basin (the "PRB Crude System") that was acquired on August 3, 2017, as discussed in Note 3 – Acquisitions; and NGL transportation services in Northeast Colorado and Wyoming. We perform water business services, including freshwater transportation and produced water gathering and disposal, in Colorado, Texas, and Wyoming through BNN Water Solutions, LLC ("Water Solutions"), and crude oil storage and terminalling services through our 100% membership interest in Tallgrass Terminals, LLC ("Terminals") acquired effective January 1, 2017, which owns and operates crude oil terminals near Sterling, Colorado (the "Sterling Terminal") and in Weld County, Colorado (the "Buckingham Terminal"). Terminals also owns a 69% membership interest in Deeprock Development, LLC ("Deeprock Development"), which owns a crude oil terminal in Cushing, Oklahoma (the "Cushing Terminal"), inclusive of an additional 49% membership interest in Deeprock Development acquired in July 2017 as discussed in Note 3 – Acquisitions. The Gathering, Processing & Terminalling segment also includes newly formed Stanchion Energy, LLC ("Stanchion"), which transacts in crude oil. The table below summarizes our equity ownership as of September 30, 2017:
The term "Terminals Predecessor" refers to Terminals and the term "NatGas Predecessor" refers to NatGas prior to their acquisition by TEP on January 1, 2017. Terminals Predecessor and NatGas Predecessor are collectively referred to as the Predecessor Entities, as further discussed in Note 2 – Summary of Significant Accounting Policies. Financial results for all prior periods have been recast to reflect the operations of the Predecessor Entities. Predecessor Equity as presented in the condensed consolidated financial statements represents the capital account activity of Terminals Predecessor and NatGas Predecessor prior to January 1, 2017. For additional information regarding these acquisitions, see Note 3 – Acquisitions. |
Summary of Significant Accounting Policies |
9 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Summary of Significant Accounting Policies | Basis of Presentation These condensed consolidated financial statements and related notes for the three and nine months ended September 30, 2017 and 2016 were prepared in accordance with the accounting principles contained in the Financial Accounting Standards Board's Accounting Standards Codification, the single source of generally accepted accounting principles in the United States of America ("GAAP") for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP for annual periods. The condensed consolidated financial statements for the three and nine months ended September 30, 2017 and 2016 include all normal, recurring adjustments and disclosures that we believe are necessary for a fair statement of the results for the interim periods. In this report, the Financial Accounting Standards Board is referred to as the FASB and the FASB Accounting Standards Codification is referred to as the Codification or ASC. Certain prior period amounts have been reclassified to conform to the current presentation. Our financial results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2017. The accompanying condensed consolidated interim financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 ("2016 Form 10-K") filed with the United States Securities and Exchange Commission (the "SEC") on February 15, 2017. The condensed consolidated financial statements include the accounts of TEP and its subsidiaries and controlled affiliates. Significant intra-entity items have been eliminated in the presentation. Net income or loss from consolidated subsidiaries that are not wholly-owned by TEP is attributed to TEP and noncontrolling interests in accordance with the respective ownership interests. As further discussed in Note 3 – Acquisitions, TEP closed the acquisition of Terminals and NatGas effective January 1, 2017. As the acquisitions of Terminals and NatGas are considered transactions between entities under common control, and a change in reporting entity, the financial information presented has been recast to include Terminals and NatGas for all periods presented. Net equity distributions of the Predecessor Entities included in the condensed consolidated financial statements represent transfers of cash as a result of TD's centralized cash management system prior to January 1, 2017 for Terminals and NatGas, under which cash balances were swept daily and recorded as loans from the subsidiaries of TD. These loans were then periodically recorded as equity distributions. The accompanying condensed consolidated financial statements of TEP include historical cost-basis accounts of the assets and liabilities of the Predecessor Entities for the periods prior to January 1, 2017, the date TEP acquired Terminals and NatGas from TD, and include charges from TD for direct costs and allocations of indirect corporate overhead. Management believes that the allocation methods are reasonable, and that the allocations are representative of costs that would have been incurred on a stand-alone basis. TEP and the Predecessor Entities are all considered "entities under common control" as defined under GAAP and, as such, the transfers between the entities of the assets and liabilities have been recorded by TEP at historical cost. Use of Estimates Certain amounts included in or affecting these condensed consolidated financial statements and related disclosures must be estimated, requiring management to make certain assumptions with respect to values or conditions which cannot be known with certainty at the time the financial statements are prepared. These estimates and assumptions affect the amounts reported for assets, liabilities, revenues, and expenses during the reporting period, and the disclosure of contingent assets and liabilities at the date of the financial statements. Management evaluates these estimates on an ongoing basis, utilizing historical experience, consultation with experts and other methods it considers reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from these estimates. Any effects on our business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Accounting Pronouncement Recently Adopted ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" In January 2017, the FASB issued Accounting Standards Update ("ASU") No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses by providing a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. The ASU also narrows the definition of the term "output" so that the term is consistent with how outputs are described under the revenue recognition guidance in Topic 606. The amendments in ASU 2017-01 are effective for public entities for annual periods and interim periods within those annual periods beginning after December 15, 2017. Early adoption is permitted in certain circumstances. We elected to adopt the guidance in ASU 2017-01 effective April 1, 2017. ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" In January 2017, the FASB issued ASU No. 2017-04, which simplifies the subsequent measurement of goodwill by eliminating "Step 2" from the goodwill impairment test, which involved calculating the implied fair value of goodwill by determining the fair value at the impairment testing date of a reporting unit's assets and liabilities. Instead, under the simplified test approach, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendments in ASU 2017-04 are effective for public entities for annual periods and interim periods within those annual periods 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 elected to adopt the guidance in ASU 2017-04 effective April 1, 2017, and as a result applied the new guidance to our annual goodwill impairment tests performed as of August 31, 2017. ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Among other changes, ASU 2016-09 allows an entity to make an entity-wide accounting policy election to either estimate the number of awards expected to vest (consistent with current GAAP) or account for forfeitures when they occur. The amendments in ASU 2016-09 are effective for public entities for annual periods and interim periods within those annual periods beginning after December 15, 2016. Early adoption is permitted. We adopted the guidance in ASU 2016-09 effective January 1, 2017 and made a policy election to account for forfeitures when they occur. The adoption of ASU 2016-09 did not have a material impact on our consolidated financial statements. Accounting Pronouncements Not Yet Adopted Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 provides a comprehensive and converged set of principles-based revenue recognition guidelines which supersede the existing industry and transaction-specific standards. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, entities must apply a five-step process to (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 also mandates disclosure of sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The disclosure requirements include qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. Throughout 2015 and 2016, the FASB has issued a series of subsequent updates to the revenue recognition guidance in Topic 606, including ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The amendments in ASU 2014-09, ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU 2016-20 are effective for public entities for annual reporting periods beginning after December 15, 2017, and for interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016. We are currently evaluating the impact of our pending adoption of the revised guidance. The status of our implementation is as follows:
While we have tentatively concluded that the implementation of ASU 2014-09 will not have a material impact on our revenue recognition policies for a substantial number of our contracts, management has identified several areas of potential impact through the contract review process currently underway, including the accounting for non-cash consideration, particularly in our Crude Oil Transportation and Gathering, Processing & Terminalling segments, and the timing of revenue recognition with respect to deficiency payments received in our Crude Oil Transportation segment. We are currently working with an industry group to develop positions regarding these outstanding items. We are in the process of quantifying the impact of adoption, but we cannot reasonably estimate the full impact of the standard until the industry reaches consensus on these issues. We do anticipate significant changes to our disclosures based on the additional requirements prescribed by the standard. These new disclosures include information regarding the significant judgments used in evaluating when and how revenue is (or will be) recognized and data related to contract assets and liabilities. Additionally, we are currently evaluating our business processes, systems and controls to ensure the accuracy and timeliness of the recognition and disclosure requirements under the new revenue guidance. We will continue to conduct our contract review process throughout 2017 and, as a result, additional areas of impact may be identified. We expect to adopt the new standard on January 1, 2018 using the modified retrospective approach. This approach allows us to apply the new standard to (i) all new contracts entered into after January 1, 2018 and (ii) all existing contracts for which all (or substantially all) of the revenue has not been recognized under legacy revenue guidance as of January 1, 2018 through a cumulative adjustment to equity. Consolidated revenues presented in our comparative financial statements for periods prior to January 1, 2018 would not be revised. ASU No. 2016-02, "Leases (Topic 842)" In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 provides a comprehensive update to the lease accounting topic in the Codification intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in ASU 2016-02 include a revised definition of a lease as well as certain scope exceptions. The changes primarily impact lessee accounting, while lessor accounting is largely unchanged from previous GAAP. The amendments in ASU 2016-02 are effective for public entities for annual reporting periods beginning after December 15, 2018, and for interim periods within that reporting period. Early application is permitted. We are currently evaluating the impact of ASU 2016-02. |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisition of Outrigger Powder River Operating, LLC On August 3, 2017, we acquired 100% of the membership interests of Outrigger Powder River Operating, LLC (subsequently renamed as Tallgrass Crude Gathering, LLC, "TCG"), which owns the PRB Crude System, a crude oil gathering system in the Powder River Basin with approximately 34 miles of gathering lines and approximately 150,000 acres dedicated on a long-term fee-based contract, for approximately $36 million, subject to working capital adjustments. The transaction qualifies as an acquisition of a business and is accounted for as a business combination under ASC 805. The following represents the fair value of assets acquired and liabilities assumed at August 3, 2017 (in thousands):
At September 30, 2017, the assets acquired and liabilities assumed in the acquisition were recorded at provisional amounts based on the preliminary purchase price allocation. TEP is in the process of obtaining additional information to identify and measure all assets acquired and liabilities assumed in the acquisition within the measurement period. Such provisional amounts will be adjusted if necessary to reflect any new information about facts and circumstances that existed at the acquisition date that, if known, would have affected the measurement of these amounts. Actual revenue and net loss attributable to TEP from TCG of less than $1 million was recognized in the accompanying condensed consolidated statements of income for the period from August 3, 2017 to September 30, 2017. Acquisitions of Additional Interests in Deeprock Development On July 20, 2017, we acquired an additional 40% membership interest in Deeprock Development from Kinder Morgan Cushing, LLC for cash consideration of approximately $57.2 million, net of cash acquired. We subsequently acquired an additional 9% membership interest in Deeprock Development from Deeprock Energy Resources LLC ("DER") on July 21, 2017, as discussed further below. Upon closing of the acquisition of the 40% membership interest on July 20, 2017, we obtained a controlling financial interest in Deeprock Development and accordingly has accounted for the transaction as a step acquisition under ASC 805. On the acquisition date, TEP remeasured its previously held 20% equity interest in Deeprock Development to its fair value of $22.9 million, recognized a gain of $9.7 million in "Gain on remeasurement of unconsolidated investment" in the condensed consolidated statements of income, and consolidated Deeprock Development in our condensed consolidated financial statements. The 40% equity interest in Deeprock Development held by noncontrolling interests was recorded at its acquisition date fair value of $45.9 million. The fair values of the previously held equity interest and the noncontrolling interest were determined using a discounted cash flow analysis and adjusted for lack of control. These fair value measurements are based on significant inputs, such as forecasted cash flows and discount rates, that are not observable in the market and thus represent fair value measurements categorized within Level 3 of the fair value hierarchy under ASC 820. The following represents the fair value of assets acquired and liabilities assumed at July 20, 2017 (in thousands):
At September 30, 2017, the assets acquired and liabilities assumed in the acquisition were recorded at provisional amounts based on the preliminary purchase price allocation. TEP is in the process of obtaining additional information to identify and measure all assets acquired and liabilities assumed in the acquisition within the measurement period. Such provisional amounts will be adjusted if necessary to reflect any new information about facts and circumstances that existed at the acquisition date that, if known, would have affected the measurement of these amounts. The goodwill recognized of $61.6 million is primarily attributed to synergies expected from combining the operations of TEP and Deeprock Development. All of the goodwill was assigned to our Gathering, Processing & Terminalling segment. Actual revenue and net income attributable to TEP from Deeprock Development of $2.4 million and $1.1 million, respectively, was recognized in the accompanying condensed consolidated statements of income for the period from July 20, 2017 to September 30, 2017. On July 21, 2017, subsequent to the acquisition of an additional 40% membership interest discussed above, we acquired an additional 9% membership interest in Deeprock Development from DER for total consideration valued at approximately $13.1 million, consisting of approximately $6.4 million in cash and the issuance of 128,790 common units (valued at approximately $6.7 million based on the July 20, 2017 closing price of TEP's common units), which was accounted for as an acquisition of noncontrolling interest. Subsequent to the closing of the transaction, our aggregate membership interest in Deeprock Development is 69%. Pro Forma Financial Information Unaudited pro forma revenue and net income attributable to TEP for the three and nine months ended September 30, 2017 and 2016 is presented below as if the acquisitions of TCG and Deeprock Development had been completed on January 1, 2016.
The pro forma financial information is not necessarily indicative of what the actual results of operations or financial position of TEP would have been if the transactions had in fact occurred on the date or for the period indicated, nor do they purport to project the results of operations or financial position of TEP for any future periods or as of any date. The pro forma financial information does not give effect to any cost savings, operating synergies, or revenue enhancements expected to result from the transactions or the costs to achieve these cost savings, operating synergies, and revenue enhancements. The pro forma revenue and net income includes adjustments to give effect to the estimated results of operations of TCG and Deeprock Development for the periods presented, as well as to eliminate the equity in earnings and gain on remeasurement of unconsolidated investment associated with our previously held 20% membership interest in Deeprock Development. Acquisition of DCP Douglas, LLC On June 5, 2017, we acquired 100% of the membership interests in DCP Douglas, LLC (subsequently renamed as Tallgrass Midstream Gathering, LLC), which owns the Douglas Gathering System, a natural gas gathering system in the Powder River Basin with approximately 1,500 miles of gathering pipeline connected to the Douglas processing plant, for approximately $128.5 million, subject to working capital adjustments. The acquisition has been accounted for as an asset acquisition, with substantially all of the fair value allocated to the long-lived assets acquired based on their relative fair values. Acquisition of an Additional 24.99% Membership Interest in Rockies Express On March 31, 2017, TEP, TD, and Rockies Express Holdings, LLC, entered into a definitive Purchase and Sale Agreement, pursuant to which TEP acquired an additional 24.99% membership interest in Rockies Express from TD in exchange for cash consideration of $400 million. Together with the 25% membership interest in Rockies Express that TEP acquired from a unit of Sempra U.S. Gas and Power on May 6, 2016, this transaction increases TEP’s aggregate membership interest in Rockies Express to 49.99%. The transfer of the Rockies Express membership interest between TD and the Partnership is considered a transaction between entities under common control, but does not represent a change in reporting entity. Our investment in Rockies Express is recorded under the equity method of accounting and is reported as "Unconsolidated investments" on our condensed consolidated balance sheets. As a result of the common control nature of the transaction, the 24.99% membership interest in Rockies Express was transferred to the Partnership at TD's historical carrying amount, including the remaining unamortized basis difference driven by the difference between the fair value of the investment and the book value of the underlying assets and liabilities on November 13, 2012, the date of acquisition by TD. For additional information, see Note 7 – Investments in Unconsolidated Affiliates. As of March 31, 2017, the negative basis difference carried over from TD was approximately $386.8 million. The amount of the basis difference allocated to property, plant and equipment is accreted over 35 years, which equates to the 2.86% composite depreciation rate utilized by Rockies Express to depreciate the underlying property, plant and equipment. The amount allocated to long-term debt is amortized over the remaining life of the various debt facilities. The basis difference associated with the recently acquired 24.99% membership interest in Rockies Express at September 30, 2017 was allocated as follows:
Acquisition of Tallgrass Terminals, LLC and Tallgrass NatGas Operator, LLC Effective January 1, 2017, we acquired 100% of the issued and outstanding membership interests in Terminals and 100% of the issued and outstanding membership interests in NatGas from TD for total cash consideration of $140 million. These acquisitions are considered transactions between entities under common control, and a change in reporting entity. Terminals owns several fully operational assets providing storage capacity and additional injection points for the Pony Express System, including the Sterling Terminal near Sterling, Colorado, the Buckingham Terminal in northeast Colorado, and a 69% interest in the Deeprock Development Terminal in Cushing, Oklahoma following the acquisition of an aggregate additional 49% membership interest in Deeprock Development in July 2017 discussed above. Terminals also owns acreage in Cushing, Oklahoma and Guernsey, Wyoming, which is under development to provide additional storage capacity and other potential opportunities. NatGas is the operator of the Rockies Express Pipeline and receives a fee from Rockies Express as compensation for its services. Historical Financial Information The results of our acquisitions of Terminals and NatGas are included in the condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016. The following table presents our previously reported December 31, 2016 condensed consolidated balance sheet, adjusted for the acquisitions of Terminals and NatGas:
The results of our acquisitions of Terminals and NatGas are included in the condensed consolidated statements of income for the three and nine months ended September 30, 2017 and 2016. The following tables present the previously reported condensed consolidated statements of income for the three and nine months ended September 30, 2016, adjusted for the acquisitions of Terminals and NatGas:
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | As a result of our relationship with TD and its affiliates, we have entered into a number of related party transactions. The following disclosure includes those related party transactions which are not otherwise disclosed in these notes to our condensed consolidated financial statements. We have no employees. In connection with the closing of our initial public offering on May 17, 2013, TEP and its general partner entered into an Omnibus Agreement with TD and certain of its affiliates, including Tallgrass Operations, LLC (the "TEP Omnibus Agreement"). The TEP Omnibus Agreement provides that, among other things, TEP will reimburse TD and its affiliates for all expenses they incur and payments they make on TEP's behalf, including the costs of employee and director compensation and benefits as well as the cost of the provision of certain centralized corporate functions performed by TD, including legal, accounting, cash management, insurance administration and claims processing, risk management, health, safety and environmental, information technology and human resources in each case to the extent reasonably allocable to TEP. Totals of transactions with affiliated companies, excluding transactions disclosed elsewhere in these notes, are as follows:
Details of balances with affiliates included in "Accounts receivable, net" and "Accounts payable to related parties" in the condensed consolidated balance sheets are as follows:
Gas imbalances with affiliated shippers are as follows:
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Inventory |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | The components of inventory at September 30, 2017 and December 31, 2016 consisted of the following:
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Property, Plant and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | A summary of net property, plant and equipment by classification is as follows:
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Investments in Unconsolidated Affiliates Investments in Unconsolidated Affiliates |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments | Rockies Express Our investment in Rockies Express is recorded under the equity method of accounting and is reported as "Unconsolidated investments" on our condensed consolidated balance sheets. During the nine months ended September 30, 2017, we recognized equity in earnings associated with our 49.99% membership interest in Rockies Express of $185.7 million, inclusive of the amortization of the negative basis difference, and received distributions from and made contributions to Rockies Express of $227.5 million and $29.5 million, respectively. As discussed in Note 3 – Acquisitions, we acquired an additional 24.99% membership interest in Rockies Express from TD on March 31, 2017. Summarized financial information for Rockies Express is as follows:
Deeprock Development As discussed in Note 3 – Acquisitions, on July 20, 2017, we acquired an additional 40% membership interest in Deeprock Development. As a result of the acquisition, TEP consolidated Deeprock Development and effective July 20, 2017 will no longer account for its investment in Deeprock Development under the equity method of accounting. |
Goodwill Goodwill |
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Goodwill [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | Reconciliation of Goodwill The following table presents a reconciliation of the carrying amount of goodwill by reportable segment for the reporting period:
Annual Goodwill Impairment Analysis We evaluate goodwill for impairment on an annual basis and whenever events or changes in circumstances necessitate an evaluation for impairment. Examples of such facts and circumstances include changes in the magnitude of the excess of fair value over carrying amount in the last valuation or changes in the business environment. Our annual impairment testing date is August 31. We evaluate goodwill for impairment at the reporting unit level, which is the same as, or one level below, an operating segment as defined in the segment reporting guidance of the Codification, using either the qualitative assessment option or proceeding directly to the quantitative impairment test depending on facts and circumstances of the reporting unit. If we, after performing the qualitative assessment, determine it is “more likely than not” that the fair value of a reporting unit is greater than its carrying amount, then goodwill is not considered impaired. When goodwill is evaluated for impairment using the quantitative impairment test, the carrying amount of the reporting unit is compared to its fair value. If the fair value exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the reporting unit's fair value, then the reporting unit should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We did not elect to apply the qualitative assessment option during our 2017 annual goodwill impairment testing; instead we proceeded directly to the quantitative impairment test. We compared the fair value of each reporting unit with its respective book value, including goodwill, by using an income approach based on a discounted cash flow analysis. For the purpose of goodwill impairment testing, goodwill was allocated to our reporting units based on the enterprise value of each reporting unit at the date of acquisition. The fair value of each reporting unit was determined on a stand-alone basis from the perspective of a market participant and included a sensitivity analysis of the impact of changes in various assumptions. This approach required us to make long-term forecasts of future operating results and various other assumptions and estimates, the most significant of which are gross margin, operating expenses, general and administrative expenses, long-term growth rates and the weighted average cost of capital. The fair value of the reporting units was determined using significant unobservable inputs, considered Level 3 under the fair value hierarchy in the Codification. For each reporting unit, the results of the quantitative impairment test indicated no impairment as the fair value of the reporting units was greater than their respective book values. As a result, in accordance with the Codification guidance, we did not record a goodwill impairment during the nine months ended September 30, 2017. Unpredictable events or deteriorating market or operating conditions could result in a future change to the discounted cash flow models and cause impairments in the future. We continue to monitor potential impairment indicators to determine if a triggering event occurs and will perform additional goodwill impairment analyses as necessary. |
Risk Management |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Management | We enter into derivative contracts with third parties for the purpose of hedging exposures that accompany our normal business activities. Our normal business activities directly and indirectly expose us to risks associated with changes in the market price of crude oil and natural gas, among other commodities. For example, the risks associated with changes in the market price of crude oil and natural gas include, among others (i) pre-existing or anticipated physical crude oil and natural gas sales, (ii) natural gas purchases and (iii) natural gas system use and storage. We have elected not to apply hedge accounting and changes in the fair value of all derivative contracts are recorded in earnings in the period in which the change occurs. Fair Value of Derivative Contracts The following table summarizes the fair values of our derivative contracts included in the condensed consolidated balance sheets:
Effect of Derivative Contracts in the Statements of Income The following table summarizes the impact of derivative contracts not designated as hedging contracts for the three and nine months ended September 30, 2017 and 2016:
Call Option Derivative As part of our acquisition of an additional 31.3% membership interest in Pony Express effective January 1, 2016, TD granted us an 18 month call option at an exercise price of $42.50 per common unit covering the 6,518,000 common units issued to TD as a portion of the consideration. In July 2016 and October 2016, we partially exercised the call option covering 3,563,146 and 1,251,760 common units, respectively, for cash payments of $151.4 million and $53.2 million, respectively. On February 1, 2017, we exercised the remainder of the call option covering an additional 1,703,094 common units for a cash payment of $72.4 million. These common units were deemed canceled upon the exercise of the call option and as of the applicable exercise date were no longer issued and outstanding. Credit Risk We have counterparty credit risk as a result of our use of derivative contracts. Counterparties to our crude oil and natural gas derivatives consist of major financial institutions. This concentration of counterparties may impact our overall exposure to credit risk, either positively or negatively, in that the counterparties may be similarly affected by changes in economic, regulatory or other conditions. The counterparty to our call option derivative was TD. Our over-the-counter swaps are entered into with counterparties outside central trading organizations such as futures, options or stock exchanges. These contracts are with financial institutions with investment grade credit ratings. While we enter into derivative transactions principally with investment grade counterparties and actively monitor their credit ratings, it is nevertheless possible that from time to time losses will result from counterparty credit risk in the future. As of September 30, 2017, the fair value of our crude oil and natural gas derivative contracts were a liability position, resulting in no credit exposure from TEP's counterparties as of that date. As of September 30, 2017 we had $0.8 million and $3.0 million of cash in margin accounts and outstanding letters of credit, respectively, in support of our commodity derivative contracts. As of December 31, 2016, we did not have any outstanding letters of credit or cash in margin accounts in support of our hedging of commodity price risks associated with our commodity derivative contracts. Fair Value Derivative assets and liabilities are measured and reported at fair value. Derivative contracts can be exchange-traded or over-the-counter ("OTC"). OTC commodity derivatives are valued using models utilizing a variety of inputs including contractual terms and commodity and interest rate curves. The selection of a particular model and particular inputs to value an OTC derivative contract depends upon the contractual terms of the instrument as well as the availability of pricing information in the market. We use similar models to value similar instruments. For OTC derivative contracts that trade in liquid markets, such as generic forwards and swaps, model inputs can generally be verified and model selection does not involve significant management judgment. Such contracts are typically classified within Level 2 of the fair value hierarchy. The call option granted by TD was valued using a Black-Scholes option pricing model. Key inputs to the valuation model included the term of the option, risk free rate, the exercise price and current market price, expected volatility and expected distribution yield of the underlying units. The call option valuation was classified within Level 2 of the fair value hierarchy as the value was based on significant observable inputs. The following table summarizes the fair value measurements of our derivative contracts as of September 30, 2017 and December 31, 2016 based on the fair value hierarchy:
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Long-term Debt | Long-term debt consisted of the following at September 30, 2017 and December 31, 2016:
Senior Unsecured Notes On September 15, 2017, TEP and Tallgrass Energy Finance Corp. (the "Co-Issuer" and together with TEP, the "Issuers"), the Guarantors named therein and U.S. Bank, National Association, as trustee, entered into an Indenture dated September 15, 2017 (the "2028 Indenture") pursuant to which the Issuers issued $500 million in aggregate principal amount of 5.50% senior notes due 2028 (the "2028 Notes"). The 2028 Indenture contains covenants that, among other things, limit TEP's ability and the ability of its restricted subsidiaries to: (i) create liens to secure indebtedness; (ii) enter into sale-leaseback transactions; and (iii) consolidate with or merge with or into, or sell substantially all of TEP’s properties to, another person. As of September 30, 2017, we are in compliance with the covenants required under the 2028 Notes. On September 1, 2016, the Issuers, the Guarantors named therein and U.S. Bank, National Association, as trustee, entered into an Indenture dated September 1, 2016 (the "2024 Indenture"), pursuant to which the Issuers issued $400 million in aggregate principal amount of 5.50% senior notes due 2024 (the "2024 Notes"). On May 16, 2017, the Issuers issued an additional $350 million in aggregate principal amount of the 2024 Notes which are also governed by the 2024 Indenture. The notes issued on September 1, 2016 and May 16, 2017 are treated as a single class of debt securities and have identical terms, other than the issue date, offering price and first interest payment date. The 2024 Indenture contains covenants that, among other things, limit TEP's ability and the ability of its restricted subsidiaries to: (i) incur, assume or guarantee additional indebtedness or issue preferred units; (ii) create liens to secure indebtedness; (iii) pay distributions on equity interests in the event of default or noncompliance with the covenants required, repurchase equity securities or redeem subordinated securities; (iv) make investments; (v) restrict distributions, loans or other asset transfers from TEP's restricted subsidiaries; (vi) consolidate with or merge with or into, or sell substantially all of TEP's properties to, another person; (vii) sell or otherwise dispose of assets, including equity interests in subsidiaries; and (viii) enter into transactions with affiliates. As of September 30, 2017, we are in compliance with the covenants required under the 2024 Notes. Revolving Credit Facility On June 2, 2017, TEP entered into a $1.75 billion Second Amended and Restated Credit Agreement with Wells Fargo Bank, National Association, as administrative agent and collateral agent, and a syndicate of lenders (the "Amended Credit Agreement"). The Amended Credit Agreement amends and restates TEP's existing revolving credit facility. The Amended Credit Agreement, among other things, extends the maturity date of TEP's existing revolving credit facility from May 13, 2018 to June 2, 2022, and provides for an uncommitted accordion in an amount up to an additional $250 million, subject to the satisfaction of certain other conditions. In addition, the revolving credit facility includes a $60 million sublimit for swing line loans and a $75 million sublimit for letters of credit. The following table sets forth the available borrowing capacity under the revolving credit facility as of September 30, 2017 and December 31, 2016:
The revolving credit facility contains various covenants and restrictive provisions that, among other things, limit or restrict our ability (as well as the ability of our restricted subsidiaries) to incur or guarantee additional debt, incur certain liens on assets, dispose of assets, make certain distributions, including distributions from available cash, if a default or event of default under the credit agreement then exists or would result therefrom, change the nature of our business, engage in certain mergers or make certain investments and acquisitions, enter into non-arms-length transactions with affiliates and designate certain subsidiaries as "Unrestricted Subsidiaries." In addition, we are required to maintain a consolidated leverage ratio of not more than 5.00 to 1.00 (which will be increased to 5.50 to 1.00 for certain measurement periods following the consummation of certain acquisitions), a consolidated senior secured leverage ratio of not more than 3.75 to 1.00 and a consolidated interest coverage ratio of not less than 2.50 to 1.00. As of September 30, 2017, we are in compliance with the covenants required under the revolving credit facility. The unused portion of the revolving credit facility is subject to a commitment fee, which ranges from 0.250% to 0.500%, based on our total leverage ratio. As of September 30, 2017, the weighted average interest rate on outstanding borrowings under the revolving credit facility was 3.24%. During the nine months ended September 30, 2017, our weighted average effective interest rate, including the interest on outstanding borrowings under the revolving credit facility, commitment fees, and amortization of deferred financing costs, was 3.25%. Fair Value The following table sets forth the carrying amount and fair value of our long-term debt, which is not measured at fair value in the condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016, but for which fair value is disclosed:
The long-term debt borrowed under the revolving credit facility is carried at amortized cost. As of September 30, 2017 and December 31, 2016, the fair value of borrowings under the revolving credit facility approximates the carrying amount of the borrowings using a discounted cash flow analysis. The 2024 and 2028 Notes are carried at amortized cost, net of deferred financing costs. The estimated fair value of the 2024 and 2028 Notes is based upon quoted market prices adjusted for illiquid markets. We are not aware of any factors that would significantly affect the estimated fair value subsequent to September 30, 2017. |
Partnership Equity and Distributions |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Partnership Equity and Distributions | Equity Distribution Agreements As of September 30, 2017, we had active equity distribution agreements pursuant to which we may sell from time to time through a group of managers, as our sales agents, common units representing limited partner interests having an aggregate offering price of up to $100.2 million and $657.5 million. Net cash proceeds from any sale of the common units may be used for general partnership purposes, which includes, among other things, the Partnership's exercise of the call option with respect to the 6,518,000 common units issued to TD in connection with the Partnership's acquisition of an additional 31.3% of Pony Express in January 2016, repayment or refinancing of debt, funding for acquisitions, capital expenditures and additions to working capital. We did not issue common units under the equity distribution agreements during the three months ended September 30, 2017. During the nine months ended September 30, 2017, we issued and sold 2,341,061 common units with a weighted average sales price of $48.82 per unit under our equity distribution agreements for net cash proceeds of approximately $112.4 million (net of approximately $1.9 million in commissions and professional service expenses). We used the net cash proceeds for general partnership purposes as described above. Repurchase of Common Units Owned by TD Following an offer received from TD with respect to common units owned by TD not subject to the call option, we repurchased 736,262 common units from TD at an aggregate price of approximately $35.3 million, or $47.99 per common unit, on February 1, 2017, which was approved by the conflicts committee of the board of directors of our general partner. These common units were deemed canceled upon our purchase and as of such transaction date were no longer issued and outstanding. Distributions to Holders of Common Units, General Partner Units and Incentive Distribution Rights The following table shows the distributions for the periods indicated:
Other Contributions and Distributions During the nine months ended September 30, 2017, TEP recognized the following other contributions and distributions:
During the nine months ended September 30, 2016, TEP recognized the following other contributions and distributions:
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Net Income per Limited Partner Unit |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income per Limited Partner Unit | The Partnership's net income is allocated to the general partner and the limited partners in accordance with their respective ownership percentages, after giving effect to incentive distributions paid to the general partner. Basic and diluted net income per limited partner unit is calculated by dividing limited partners' interest in net income, less general partner incentive distributions, by the weighted average number of outstanding limited partner units during the period. We compute earnings per unit using the two-class method for Master Limited Partnerships as prescribed in the FASB guidance. The two-class method requires that securities that meet the definition of a participating security be considered for inclusion in the computation of basic earnings per unit. Under the two-class method, earnings per unit is calculated as if all of the earnings for the period were distributed under the terms of the partnership agreement, regardless of whether the general partner has discretion over the amount of distributions to be made in any particular period, whether those earnings would actually be distributed during a particular period from an economic or practical perspective, or whether the general partner has other legal or contractual limitations on its ability to pay distributions that would prevent it from distributing all of the earnings for a particular period. We calculate net income available to limited partners based on the distributions pertaining to the current period's net income. After adjusting for the appropriate period's distributions, the remaining undistributed earnings or excess distributions over earnings, if any, are allocated to the general partner and limited partners in accordance with the contractual terms of the partnership agreement and as further prescribed in the FASB guidance under the two-class method. The two-class method does not impact our overall net income or other financial results; however, in periods in which aggregate net income exceeds our aggregate distributions for such period, it will have the impact of reducing net income per limited partner unit. This result occurs as a larger portion of our aggregate earnings, as if distributed, is allocated to the incentive distribution rights (which are currently held by our general partner), even though we make distributions on the basis of available cash and not earnings. In periods in which our aggregate net income does not exceed our aggregate distributions for such period, the two-class method does not have any impact on our calculation of earnings per limited partner unit. Basic earnings per unit is computed by dividing net earnings attributable to unitholders by the weighted average number of units outstanding during each period. Diluted earnings per unit reflects the potential dilution of common equivalent units that could occur if equity participation units are converted into common units. All net income or loss from Terminals and NatGas prior to our acquisition on January 1, 2017 is allocated to predecessor operations in the condensed consolidated statements of income and in the table below. Historical earnings of transferred businesses for periods prior to the date of those common control transactions are solely those of the general partner, and therefore we have appropriately excluded any allocation to the limited partner units when determining net income available to common unitholders. We present the financial results of any transferred business prior to the transaction date in the line item "Predecessor operations interest in net income" in the condensed consolidated statements of income and in the table below. The following table illustrates the calculation of net income per common unit for the three and nine months ended September 30, 2017 and 2016:
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Regulatory Matters |
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Regulatory Matters [Abstract] | |
Regulatory Matters | There are no regulatory proceedings challenging the rates of Pony Express, Rockies Express, Tallgrass Interstate Gas Transmission, LLC ("TIGT") or Trailblazer Pipeline Company LLC ("Trailblazer"). We have made certain regulatory filings with the FERC, including the following: Pony Express On May 22, 2017 and May 31, 2017, Pony Express made tariff filings with the FERC in Docket Nos. IS17-263-000, IS17-464-00, and IS17-465-000 to increase the contract and non-contract rates by an amount reflecting the most recent FERC annual index adjustment of approximately 0.2%, which became effective July 1, 2017. Rockies Express Rockies Express Zone 3 Capacity Enhancement Project – FERC Docket No. CP15-137-000 On March 31, 2015 in Docket No. CP15-137-000, Rockies Express filed with the FERC an application for authorization to construct and operate (1) three new mainline compressor stations located in Pickaway and Fayette Counties, Ohio and Decatur County, Indiana; (2) additional compressors at an existing compressor station in Muskingum County, Ohio; and (3) certain ancillary facilities. The facilities increased the Rockies Express Zone 3 east-to-west mainline capacity by 0.8 Bcf/d. Pursuant to the FERC's obligations under the National Environmental Policy Act, FERC staff issued an Environmental Assessment for the project on August 31, 2015. On February 25, 2016, the FERC issued a Certificate of Public Convenience and Necessity authorizing Rockies Express to proceed with the project. On March 14, 2016, Rockies Express commenced construction of the project facilities. The project was placed in-service for the full 0.8 Bcf/d on January 6, 2017. 2016 Annual and Interim FERC Fuel Tracking Filings - FERC Docket Nos. RP16-702 and RP17-240 On March 1, 2016, Rockies Express made its annual fuel tracker filing with a proposed effective date of April 1, 2016 in Docket No. RP16-702. The FERC issued an order accepting the filing on March 25, 2016. On December 1, 2016, Rockies Express made an interim fuel tracker filing with a proposed effective date of January 1, 2017 in Docket No. RP17-240. The FERC issued an order accepting the filing on December 29, 2016. Electric Power Charge Clarification - FERC Docket No. RP17-285 On December 21, 2016, in Docket No. RP17-285, Rockies Express proposed certain revisions to the General Terms and Conditions of its tariff to clarify that the electric power costs associated with the operation of gas coolers installed in association with the Zone 3 Capacity Enhancement Project, at both electric and gas powered stations, will be included in the Power Cost Tracker. Several shippers submitted comments on the proposal. The FERC issued an order on January 19, 2017 accepting the proposed revisions permitting the recovery of electric power costs from the operation of both gas and electric powered compressor stations, subject to certain clarifications. 2017 Annual and Interim FERC Fuel Tracking Filings - FERC Docket Nos. RP17-401 and RP17-1064 On February 13, 2017, in Docket No. RP17-401, Rockies Express made its annual fuel and power cost tracker filing with a proposed effective date of April 1, 2017. The FERC issued an order accepting the filing, including certain requested waivers, on March 21, 2017. On September 20, 2017, Rockies Express made its interim fuel tracker filing in Docket No. RP17-1064 with a proposed effective date of November 1, 2017. The FERC issued an order accepting the filing on October 18, 2017. TIGT General Rate Case Filing - FERC Docket No. RP16-137-000, et seq. On October 30, 2015, TIGT filed a general rate case with the FERC pursuant to Section 4 of the National Gas Act ("NGA"). The rate case proposed, among other things, a general system-wide increase in the maximum tariff rates for all firm and interruptible services offered by TIGT, certain changes to the transportation rate design of its system, a fixed fuel and lost and unaccounted for ("FL&U") and power cost tracker, and certain pro forma tariff records reflecting revisions to TIGT's Tariff. On June 8, 2016, TIGT filed an Offer of Settlement (the "TIGT Rate Case Settlement") with the FERC, which resolved all issues the FERC had set for hearing. Following certification by the Administrative Law Judge and approval by the FERC, TIGT filed revised tariff records to implement the TIGT Rate Case Settlement, which the FERC subsequently approved on December 23, 2016. Per the terms of the TIGT Rate Case Settlement, TIGT is required to file a new general rate case on May 1, 2019 (provided that such rate case is not pre-empted by a pre-filing settlement). On February 3, 2017, the FERC accepted TIGT’s pro forma tariff records, subject to conditions, and directed TIGT to file the actual tariff records within 30 days. TIGT subsequently submitted a compliance filing to implement the actual tariff records and restate its tariff to be effective April 1, 2017 and also filed to cancel its existing tariff (which was ultimately superseded by the new tariff). On March 16, 2017, the FERC accepted both filings. 2017 Annual Fuel Tracker Filing - FERC Docket No. RP17-428-000 On February 27, 2017, in Docket No. RP17-428-000, TIGT made its annual fuel tracker filing with a proposed effective date of April 1, 2017. The filing incorporated the FL&U tracker and power cost tracker mechanisms agreed to in the TIGT Rate Case Settlement. The FERC accepted the filing on March 21, 2017. Electric Power Charge Clarification - FERC Docket No. RP17-1051 On September 15, 2017, in Docket No. RP17-1051, TIGT proposed certain revisions to the General Terms and Conditions of its tariff to clarify, amongst other things, that the electric power costs associated with the operation of gas coolers at both electric and gas powered stations are properly included in the Power Cost Tracker. The FERC issued an order on October 3, 2017 accepting the proposed revisions. Trailblazer 2017 Annual and Interim Fuel Tracker Filings - FERC Docket Nos. RP17-549 and RP17-1052 On March 22, 2017, in Docket No. RP17-549, Trailblazer made its annual fuel tracker filing with a proposed effective date of May 1, 2017. The FERC accepted the filing on April 19, 2017. On September 15, 2017, Trailblazer made its interim fuel tracker filing in Docket No. RP17-1052 with a proposed effective date of November 1, 2017. The FERC accepted the filing on October 13, 2017. |
Legal and Environmental Matters |
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Commitments and Contingencies Disclosure [Abstract] | |
Legal and Environmental Matters | Legal In addition to the matters discussed below, we are a defendant in various lawsuits arising from the day-to-day operations of our business. Although no assurance can be given, we believe, based on our experiences to date, that the ultimate resolution of such routine items will not have a material adverse impact on our business, financial position, results of operations, or cash flows. We have evaluated claims in accordance with the accounting guidance for contingencies that we deem both probable and reasonably estimable and, accordingly, have recorded no reserve for legal claims as of September 30, 2017 or December 31, 2016. Rockies Express Ultra Resources In early 2016, Ultra Resources, Inc. ("Ultra") defaulted on its firm transportation service agreement for approximately 0.2 Bcf/d through November 11, 2019. In late March 2016, Rockies Express terminated Ultra's service agreement. On April 14, 2016, Rockies Express filed a lawsuit against Ultra for breach of contract and damages in Harris County, Texas, seeking approximately $303 million in damages and other relief. On April 29, 2016, Ultra and certain of its debtor affiliates filed for protection under Chapter 11 of the United States Bankruptcy Code in United States Bankruptcy Court for the Southern District of Texas, which operated as a stay of the Harris County state court proceeding. On January 12, 2017, Rockies Express and Ultra entered into an agreement to settle Rockies Express' approximately $303 million claim against Ultra. In accordance with the settlement agreement, Ultra made a cash payment to Rockies Express of $150 million on July 12, 2017, and entered into a new, seven-year firm transportation agreement with Rockies Express commencing December 1, 2019, for west-to-east service of 0.2 Bcf/d at a rate of approximately $0.37 per dth/d, or approximately $26.8 million annually. TEP received its proportionate distribution from the cash settlement payment in July 2017. Michels Corporation On June 17, 2014, Michels Corporation ("Michels") filed a complaint and request for relief against Rockies Express in the Court of Common Pleas, Monroe County, Ohio, as a result of work performed by Michels to construct the Seneca Lateral Pipeline in Ohio. Michels sought unspecified damages from Rockies Express and asserted claims of breach of contract, negligent misrepresentation, unjust enrichment and quantum meruit. Michels also filed notices of Mechanic's Liens in Monroe and Noble Counties, asserting $24.2 million as the amount due. On February 2, 2017, Rockies Express and Michels agreed to resolve Michels' claims for a $10 million cash payment by Rockies Express. The cash payment was inclusive of approximately $5.9 million that Rockies Express had been withholding from Michels. Subsequently, Rockies Express and Michels entered into a definitive agreement with respect to the settlement and Rockies Express made the $10 million cash payment to Michels on February 16, 2017. Environmental, Health and Safety We are subject to a variety of federal, state and local laws that regulate permitted activities relating to air and water quality, waste disposal, and other environmental matters. We believe that compliance with these laws will not have a material adverse impact on our business, cash flows, financial position or results of operations. However, there can be no assurances that future events, such as changes in existing laws, the promulgation of new laws, or the development of new facts or conditions will not cause us to incur significant costs. We had environmental reserves of $7.7 million and $4.0 million at September 30, 2017 and December 31, 2016, respectively. TMID Casper Plant, EPA Notice of Violation In August 2011, the EPA and the Wyoming Department of Environmental Quality ("WDEQ") conducted an inspection of the Leak Detection and Repair ("LDAR") Program at the Casper Gas Plant in Wyoming. In September 2011, Tallgrass Midstream, LLC ("TMID") received a letter from the EPA alleging violations of the Standards of Performance of Equipment Leaks for Onshore Natural Gas Processing Plant requirements under the Clean Air Act. TMID received a letter from the EPA concerning settlement of this matter in April 2013 and received additional settlement communications from the EPA and Department of Justice beginning in July 2014. Settlement negotiations are continuing, including the expected inclusion of TIGT as a party to any possible settlement as a result of TIGT owning a compressor that is located adjacent to the Casper Gas Plant site. Casper Mystery Bridge Superfund Site The Casper Gas Plant is part of the Mystery Bridge Road/U.S. Highway 20 Superfund Site also known as Casper Mystery Bridge Superfund Site. Remediation work at the Casper Gas Plant has been completed and we have requested that the portion of the site attributable to us be delisted from the National Priorities List. On July 3, 2017, our partial delisting request was published by the EPA in the Federal Register. On August 3, 2017, there were no adverse public comments, therefore on August 29, 2017, the Casper Gas Plant portion of the Casper Mystery Bridge Superfund Site was delisted from the National Priorities List. A work plan has been developed to permanently close the associated monitoring wells, which is scheduled to be completed during the fourth quarter of 2017. Casper Gas Plant On November 25, 2014, WDEQ issued a Notice of Violation for violations of Part 60 Subpart OOOO related to the Depropanizer project (wv-14388, issued 7/9/13) in Docket No. 5506-14. TMID had discussed the issues in a meeting with WDEQ in Cheyenne on November 17, 2014, and submitted a disclosure on November 20, 2014 detailing the regulatory issues and potential violations. The project triggered a modification of Subpart OOOO for the entire plant. The project equipment as well as plant equipment subjected to Subpart OOOO was not monitored timely, and initial notification was not made timely. Settlement negotiations with WDEQ are currently ongoing. Trailblazer Pipeline Integrity Management Program Trailblazer is currently operating at less than its current maximum allowable operating pressure ("MAOP"), public notice of which was first provided in June 2014. As a result of smart tool surveys conducted in 2014, Trailblazer identified approximately 25 - 35 miles of pipe that will likely need to be repaired or replaced in order for the pipeline to operate at its MAOP of 1,000 pounds per square inch across all segments of the Trailblazer Pipeline. Such repair or replacement will likely occur over a period of years, depending upon the remediation and repair plan implemented by Trailblazer. Segments of the Trailblazer Pipeline that require full replacement could cost as much as $2.7 million per mile and repair costs on sections of the pipeline that do not require full replacement are expected to be less on a per mile basis. The current pressure reduction is not expected to prevent Trailblazer from fulfilling its firm service obligations at existing subscription levels and to date it has not had a material adverse financial impact on us. With respect to the approximately 25 - 35 miles of pipe that has been identified, Trailblazer completed 32 excavation digs in 2015 at an aggregate cost of approximately $1.3 million. Trailblazer completed additional excavation digs and replaced approximately 8 miles of pipe at an aggregate cost of approximately $19.0 million during 2016, and intends to complete the pipe replacement project in 2017 at an estimated cost of $2.5 million. Trailblazer is currently exploring all possible cost recovery options to recover such out of pocket costs, including recovery through a general rate increase, negotiated rate agreements with its customers, or other FERC-approved recovery mechanisms. In connection with our acquisition of the Trailblazer Pipeline, TD agreed to contractually indemnify TEP for certain out of pocket costs related to repairing or remediating the Trailblazer Pipeline, to the extent that such actions were necessitated by external corrosion caused by the pipeline's disbonded Hi-Melt CTE coating. The contractual indemnity provided by TD was capped at $20 million and was subject to a $1.5 million deductible. TEP has received $20 million from TD pursuant to the contractual indemnity as of September 30, 2017. Pony Express Pipeline Integrity In connection with certain crack tool runs on the Pony Express System completed in 2015 and 2016, Pony Express completed approximately $9.8 million of remediation for anomalies identified on the Pony Express System associated with the initial conversion and commissioning of portions of the pipeline converted from natural gas to crude oil service, and has substantially completed additional remediation on the Pony Express System of approximately $9 million during the nine months ended September 30, 2017. Terminals System Failures In January 2017, approximately 10,000 bbls of crude oil were released at the Sterling Terminal as the result of a defective roof drain system on a storage tank. The release was restricted to the containment area designed for such purpose and approximately 9,000 bbls were recovered. Remediation was complete as of June 30, 2017. The total cost to remediate the release was approximately $600,000. |
Reporting Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reporting Segments | Our operations are located in the United States. During the third quarter of 2017, management revised the operational reporting used by the chief operating decision maker in light of recent acquisitions and commercial management reorganization. As a result of this internal change, our reportable segments were updated to ensure that segment classification remains aligned with operational reporting. We are organized into three reportable segments: (1) Natural Gas Transportation, (2) Crude Oil Transportation, and (3) Gathering, Processing & Terminalling. Natural Gas Transportation The Natural Gas Transportation segment is engaged in the ownership and operation of FERC-regulated interstate natural gas pipelines and an integrated natural gas storage facility that provide services to on-system customers (such as third-party LDCs), industrial users and other shippers. The Natural Gas Transportation segment includes our 100% membership interest in NatGas acquired effective January 1, 2017 and our 49.99% membership interest in Rockies Express, including the additional 24.99% membership interest acquired effective March 31, 2017. Crude Oil Transportation The Crude Oil Transportation segment is engaged in the ownership and operation of the Pony Express System, which is a FERC-regulated crude oil pipeline serving the Bakken Shale, Denver-Julesburg and Powder River Basins, and other nearby oil producing basins. The mainline portion of the Pony Express System was placed in service in October 2014. The Pony Express System also includes a lateral pipeline in Northeast Colorado, which interconnects with the Pony Express System just east of Sterling, Colorado and was placed in service in the second quarter of 2015. Gathering, Processing & Terminalling The Gathering, Processing & Terminalling segment is engaged in the ownership and operation of natural gas gathering, processing, treating and fractionation facilities that produce NGLs and residue gas that is sold in local wholesale markets or delivered into pipelines for transportation to additional end markets, including the Douglas Gathering System acquired on June 5, 2017, as well as water business services provided primarily to the oil and gas exploration and production industry and the transportation of NGLs. The Gathering, Processing & Terminalling segment also includes Stanchion as well as our 100% membership interest in Terminals acquired effective January 1, 2017 and the PRB Crude System acquired on August 3, 2017. Corporate and Other Corporate and Other includes corporate overhead costs that are not directly associated with the operations of our reportable segments, such as interest and fees associated with our revolving credit facility and the 2024 and 2028 Notes, public company costs, and equity-based compensation expense. These segments are monitored separately by management for performance and are consistent with internal financial reporting. These segments have been identified based on the differing products and services, regulatory environment and the expertise required for their respective operations. We consider Adjusted EBITDA our primary segment performance measure as we believe it is the most meaningful measure to assess our financial condition and results of operations as a public entity. We define Adjusted EBITDA, a non-GAAP measure, as net income excluding the impact of interest, income taxes, depreciation and amortization, non-cash income or loss related to derivative instruments, non-cash long-term compensation expense, impairment losses, gains or losses on asset or business disposals or acquisitions, gains or losses on the repurchase, redemption or early retirement of debt, and earnings from unconsolidated investments, but including the impact of distributions from unconsolidated investments. The following tables set forth our segment information for the periods indicated:
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||
Basis of Presentation | Basis of Presentation These condensed consolidated financial statements and related notes for the three and nine months ended September 30, 2017 and 2016 were prepared in accordance with the accounting principles contained in the Financial Accounting Standards Board's Accounting Standards Codification, the single source of generally accepted accounting principles in the United States of America ("GAAP") for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP for annual periods. The condensed consolidated financial statements for the three and nine months ended September 30, 2017 and 2016 include all normal, recurring adjustments and disclosures that we believe are necessary for a fair statement of the results for the interim periods. In this report, the Financial Accounting Standards Board is referred to as the FASB and the FASB Accounting Standards Codification is referred to as the Codification or ASC. Certain prior period amounts have been reclassified to conform to the current presentation. Our financial results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2017. The accompanying condensed consolidated interim financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 ("2016 Form 10-K") filed with the United States Securities and Exchange Commission (the "SEC") on February 15, 2017. |
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Consolidation | The condensed consolidated financial statements include the accounts of TEP and its subsidiaries and controlled affiliates. Significant intra-entity items have been eliminated in the presentation. Net income or loss from consolidated subsidiaries that are not wholly-owned by TEP is attributed to TEP and noncontrolling interests in accordance with the respective ownership interests. As further discussed in Note 3 – Acquisitions, TEP closed the acquisition of Terminals and NatGas effective January 1, 2017. As the acquisitions of Terminals and NatGas are considered transactions between entities under common control, and a change in reporting entity, the financial information presented has been recast to include Terminals and NatGas for all periods presented. Net equity distributions of the Predecessor Entities included in the condensed consolidated financial statements represent transfers of cash as a result of TD's centralized cash management system prior to January 1, 2017 for Terminals and NatGas, under which cash balances were swept daily and recorded as loans from the subsidiaries of TD. These loans were then periodically recorded as equity distributions. The accompanying condensed consolidated financial statements of TEP include historical cost-basis accounts of the assets and liabilities of the Predecessor Entities for the periods prior to January 1, 2017, the date TEP acquired Terminals and NatGas from TD, and include charges from TD for direct costs and allocations of indirect corporate overhead. Management believes that the allocation methods are reasonable, and that the allocations are representative of costs that would have been incurred on a stand-alone basis. TEP and the Predecessor Entities are all considered "entities under common control" as defined under GAAP and, as such, the transfers between the entities of the assets and liabilities have been recorded by TEP at historical cost. |
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Use of Estimates | Use of Estimates Certain amounts included in or affecting these condensed consolidated financial statements and related disclosures must be estimated, requiring management to make certain assumptions with respect to values or conditions which cannot be known with certainty at the time the financial statements are prepared. These estimates and assumptions affect the amounts reported for assets, liabilities, revenues, and expenses during the reporting period, and the disclosure of contingent assets and liabilities at the date of the financial statements. Management evaluates these estimates on an ongoing basis, utilizing historical experience, consultation with experts and other methods it considers reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from these estimates. Any effects on our business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. |
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Accounting Pronouncements | Accounting Pronouncement Recently Adopted ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" In January 2017, the FASB issued Accounting Standards Update ("ASU") No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses by providing a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. The ASU also narrows the definition of the term "output" so that the term is consistent with how outputs are described under the revenue recognition guidance in Topic 606. The amendments in ASU 2017-01 are effective for public entities for annual periods and interim periods within those annual periods beginning after December 15, 2017. Early adoption is permitted in certain circumstances. We elected to adopt the guidance in ASU 2017-01 effective April 1, 2017. ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" In January 2017, the FASB issued ASU No. 2017-04, which simplifies the subsequent measurement of goodwill by eliminating "Step 2" from the goodwill impairment test, which involved calculating the implied fair value of goodwill by determining the fair value at the impairment testing date of a reporting unit's assets and liabilities. Instead, under the simplified test approach, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendments in ASU 2017-04 are effective for public entities for annual periods and interim periods within those annual periods 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 elected to adopt the guidance in ASU 2017-04 effective April 1, 2017, and as a result applied the new guidance to our annual goodwill impairment tests performed as of August 31, 2017. ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Among other changes, ASU 2016-09 allows an entity to make an entity-wide accounting policy election to either estimate the number of awards expected to vest (consistent with current GAAP) or account for forfeitures when they occur. The amendments in ASU 2016-09 are effective for public entities for annual periods and interim periods within those annual periods beginning after December 15, 2016. Early adoption is permitted. We adopted the guidance in ASU 2016-09 effective January 1, 2017 and made a policy election to account for forfeitures when they occur. The adoption of ASU 2016-09 did not have a material impact on our consolidated financial statements. Accounting Pronouncements Not Yet Adopted Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 provides a comprehensive and converged set of principles-based revenue recognition guidelines which supersede the existing industry and transaction-specific standards. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, entities must apply a five-step process to (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 also mandates disclosure of sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The disclosure requirements include qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. Throughout 2015 and 2016, the FASB has issued a series of subsequent updates to the revenue recognition guidance in Topic 606, including ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The amendments in ASU 2014-09, ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU 2016-20 are effective for public entities for annual reporting periods beginning after December 15, 2017, and for interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016. We are currently evaluating the impact of our pending adoption of the revised guidance. The status of our implementation is as follows:
While we have tentatively concluded that the implementation of ASU 2014-09 will not have a material impact on our revenue recognition policies for a substantial number of our contracts, management has identified several areas of potential impact through the contract review process currently underway, including the accounting for non-cash consideration, particularly in our Crude Oil Transportation and Gathering, Processing & Terminalling segments, and the timing of revenue recognition with respect to deficiency payments received in our Crude Oil Transportation segment. We are currently working with an industry group to develop positions regarding these outstanding items. We are in the process of quantifying the impact of adoption, but we cannot reasonably estimate the full impact of the standard until the industry reaches consensus on these issues. We do anticipate significant changes to our disclosures based on the additional requirements prescribed by the standard. These new disclosures include information regarding the significant judgments used in evaluating when and how revenue is (or will be) recognized and data related to contract assets and liabilities. Additionally, we are currently evaluating our business processes, systems and controls to ensure the accuracy and timeliness of the recognition and disclosure requirements under the new revenue guidance. We will continue to conduct our contract review process throughout 2017 and, as a result, additional areas of impact may be identified. We expect to adopt the new standard on January 1, 2018 using the modified retrospective approach. This approach allows us to apply the new standard to (i) all new contracts entered into after January 1, 2018 and (ii) all existing contracts for which all (or substantially all) of the revenue has not been recognized under legacy revenue guidance as of January 1, 2018 through a cumulative adjustment to equity. Consolidated revenues presented in our comparative financial statements for periods prior to January 1, 2018 would not be revised. ASU No. 2016-02, "Leases (Topic 842)" In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 provides a comprehensive update to the lease accounting topic in the Codification intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in ASU 2016-02 include a revised definition of a lease as well as certain scope exceptions. The changes primarily impact lessee accounting, while lessor accounting is largely unchanged from previous GAAP. The amendments in ASU 2016-02 are effective for public entities for annual reporting periods beginning after December 15, 2018, and for interim periods within that reporting period. Early application is permitted. We are currently evaluating the impact of ASU 2016-02. |
Acquisitions Equity Method Investments (Policies) |
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Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments, Policy | Our investment in Rockies Express is recorded under the equity method of accounting and is reported as "Unconsolidated investments" on our condensed consolidated balance sheets. As a result of the common control nature of the transaction, the 24.99% membership interest in Rockies Express was transferred to the Partnership at TD's historical carrying amount, including the remaining unamortized basis difference driven by the difference between the fair value of the investment and the book value of the underlying assets and liabilities on November 13, 2012, the date of acquisition by TD. For additional information, see Note 7 – Investments in Unconsolidated Affiliates. As of March 31, 2017, the negative basis difference carried over from TD was approximately $386.8 million. The amount of the basis difference allocated to property, plant and equipment is accreted over 35 years, which equates to the 2.86% composite depreciation rate utilized by Rockies Express to depreciate the underlying property, plant and equipment. The amount allocated to long-term debt is amortized over the remaining life of the various debt facilities. |
Goodwill Goodwill (Policies) |
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Goodwill [Abstract] | |
Goodwill, Policy | Annual Goodwill Impairment Analysis We evaluate goodwill for impairment on an annual basis and whenever events or changes in circumstances necessitate an evaluation for impairment. Examples of such facts and circumstances include changes in the magnitude of the excess of fair value over carrying amount in the last valuation or changes in the business environment. Our annual impairment testing date is August 31. We evaluate goodwill for impairment at the reporting unit level, which is the same as, or one level below, an operating segment as defined in the segment reporting guidance of the Codification, using either the qualitative assessment option or proceeding directly to the quantitative impairment test depending on facts and circumstances of the reporting unit. If we, after performing the qualitative assessment, determine it is “more likely than not” that the fair value of a reporting unit is greater than its carrying amount, then goodwill is not considered impaired. When goodwill is evaluated for impairment using the quantitative impairment test, the carrying amount of the reporting unit is compared to its fair value. If the fair value exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the reporting unit's fair value, then the reporting unit should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We did not elect to apply the qualitative assessment option during our 2017 annual goodwill impairment testing; instead we proceeded directly to the quantitative impairment test. We compared the fair value of each reporting unit with its respective book value, including goodwill, by using an income approach based on a discounted cash flow analysis. For the purpose of goodwill impairment testing, goodwill was allocated to our reporting units based on the enterprise value of each reporting unit at the date of acquisition. The fair value of each reporting unit was determined on a stand-alone basis from the perspective of a market participant and included a sensitivity analysis of the impact of changes in various assumptions. This approach required us to make long-term forecasts of future operating results and various other assumptions and estimates, the most significant of which are gross margin, operating expenses, general and administrative expenses, long-term growth rates and the weighted average cost of capital. The fair value of the reporting units was determined using significant unobservable inputs, considered Level 3 under the fair value hierarchy in the Codification. For each reporting unit, the results of the quantitative impairment test indicated no impairment as the fair value of the reporting units was greater than their respective book values. As a result, in accordance with the Codification guidance, we did not record a goodwill impairment during the nine months ended September 30, 2017. Unpredictable events or deteriorating market or operating conditions could result in a future change to the discounted cash flow models and cause impairments in the future. We continue to monitor potential impairment indicators to determine if a triggering event occurs and will perform additional goodwill impairment analyses as necessary. |
Description of Business Description of Business - Schedule of Ownership Interests (Tables) |
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Schedule of Other Ownership Interests [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Ownership Interests | The table below summarizes our equity ownership as of September 30, 2017:
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Acquisitions Business Combinations (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information | Unaudited pro forma revenue and net income attributable to TEP for the three and nine months ended September 30, 2017 and 2016 is presented below as if the acquisitions of TCG and Deeprock Development had been completed on January 1, 2016.
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Equity Method Investments | The basis difference associated with the recently acquired 24.99% membership interest in Rockies Express at September 30, 2017 was allocated as follows:
Summarized financial information for Rockies Express is as follows:
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Impact of Adjustments Related to Transaction Among Entities Under Common Control, Balance Sheet | The results of our acquisitions of Terminals and NatGas are included in the condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016. The following table presents our previously reported December 31, 2016 condensed consolidated balance sheet, adjusted for the acquisitions of Terminals and NatGas:
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Impact of Adjustments Related to Transaction Among Entities Under Common Control, Income Statement | The results of our acquisitions of Terminals and NatGas are included in the condensed consolidated statements of income for the three and nine months ended September 30, 2017 and 2016. The following tables present the previously reported condensed consolidated statements of income for the three and nine months ended September 30, 2016, adjusted for the acquisitions of Terminals and NatGas:
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Tallgrass Crude Gathering, LLC | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following represents the fair value of assets acquired and liabilities assumed at August 3, 2017 (in thousands):
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Deeprock Development, LLC | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following represents the fair value of assets acquired and liabilities assumed at July 20, 2017 (in thousands):
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Related Party Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Transactions with Affiliated Companies | Totals of transactions with affiliated companies, excluding transactions disclosed elsewhere in these notes, are as follows:
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Schedule of Balances with Affiliates Included in Accounts Receivables and Accounts Payable in Consolidated Balance Sheets | Details of balances with affiliates included in "Accounts receivable, net" and "Accounts payable to related parties" in the condensed consolidated balance sheets are as follows:
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Schedule of Balances of Gas Imbalance with Affiliated Shippers | Gas imbalances with affiliated shippers are as follows:
|
Inventory (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Inventory | The components of inventory at September 30, 2017 and December 31, 2016 consisted of the following:
|
Property, Plant and Equipment (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Property Plant and Equipment | A summary of net property, plant and equipment by classification is as follows:
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Investments in Unconsolidated Affiliates Investments in Unconsolidated Affiliates (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments | The basis difference associated with the recently acquired 24.99% membership interest in Rockies Express at September 30, 2017 was allocated as follows:
Summarized financial information for Rockies Express is as follows:
|
Goodwill Goodwill (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table presents a reconciliation of the carrying amount of goodwill by reportable segment for the reporting period:
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Risk Management (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Derivative Contracts | The following table summarizes the fair values of our derivative contracts included in the condensed consolidated balance sheets:
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Derivative Contracts Included in Consolidated Statements of Income | The following table summarizes the impact of derivative contracts not designated as hedging contracts for the three and nine months ended September 30, 2017 and 2016:
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Schedule of Energy Commodity Derivative Contracts Based on Fair Value Hierarchy Established by Codification | The following table summarizes the fair value measurements of our derivative contracts as of September 30, 2017 and December 31, 2016 based on the fair value hierarchy:
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Long-term Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Long-term debt consisted of the following at September 30, 2017 and December 31, 2016:
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Schedule of Line of Credit Facilities | The following table sets forth the available borrowing capacity under the revolving credit facility as of September 30, 2017 and December 31, 2016:
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Carrying Amount and Fair Value of TEP's Long-term Debt | The following table sets forth the carrying amount and fair value of our long-term debt, which is not measured at fair value in the condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016, but for which fair value is disclosed:
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Partnership Equity and Distributions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Distributions | The following table shows the distributions for the periods indicated:
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Net Income per Limited Partner Unit (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Net Income Per Limited Partner Unit | The following table illustrates the calculation of net income per common unit for the three and nine months ended September 30, 2017 and 2016:
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Reporting Segments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of TEP's Segment Information of Revenue | The following tables set forth our segment information for the periods indicated:
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Summary of TEP's Segment Information of Earnings |
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Summary of TEP's Segment Capital Expenditures |
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Summary of TEP's Segment Information of Assets |
|
Acquisitions Outrigger Acquisition, Assets Acquired and Liabilites Assumed (Details) - USD ($) $ in Thousands |
Aug. 03, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Property, plant and equipment, net | $ 2,350,830 | $ 2,079,232 | |
Intangible assets, net | $ 98,876 | $ 93,522 | |
Finite-Lived Intangible Assets, Remaining Amortization Period | 8 years | ||
Tallgrass Crude Gathering, LLC | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 117 | ||
Property, plant and equipment, net | 29,306 | ||
Intangible assets, net | 6,694 | ||
Accounts payable and accrued liabilities | 87 | ||
Net identifiable assets acquired | $ 36,030 |
Acquisitions DRD Acquisition, Assets Acquired & Liabilities Assumed (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Jul. 20, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|---|
Business Acquisition [Line Items] | |||||
Property, plant and equipment, net | $ 2,350,830 | $ 2,079,232 | |||
Goodwill | $ 404,838 | $ 343,288 | $ 343,288 | $ 343,288 | |
Deeprock Development, LLC | |||||
Business Acquisition [Line Items] | |||||
Accounts receivable | $ 968 | ||||
Other current assets | 598 | ||||
Property, plant and equipment, net | 70,148 | ||||
Accounts payable | (712) | ||||
Deferred Revenue | (6,546) | ||||
Net identifiable assets acquired | 64,456 | ||||
Goodwill | 61,550 | ||||
Net assets acquired (excluding cash) | $ 126,006 |
Acquisitions Pro Forma Revenue & Net Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Business Combinations [Abstract] | ||||
Revenue | $ 177,022 | $ 158,642 | $ 492,625 | $ 465,232 |
Net income attributable to partners | $ 174,587 | $ 65,644 | $ 338,407 | $ 204,197 |
Acquisitions Equity Method Investments (Details) - Rockies Express Pipeline LLC $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity | $ (380,589) |
Basis Difference, Amortization Period | 35 years |
Long-term Debt | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity | $ 19,078 |
Property, Plant and Equipment | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity | $ (399,667) |
Basis Difference, Amortization Period | 35 years |
Minimum | Long-term Debt | |
Schedule of Equity Method Investments [Line Items] | |
Basis Difference, Amortization Period | 2 years |
Maximum | Long-term Debt | |
Schedule of Equity Method Investments [Line Items] | |
Basis Difference, Amortization Period | 25 years |
Related Party Transactions - Schedule of Transactions with Affiliated Companies (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Related Party Transaction [Line Items] | ||||
Revenue from related parties | $ 3,338 | $ 1,182 | $ 6,662 | $ 4,855 |
Cost of transportation services from related parties | 1,062 | 4,630 | 10,476 | 13,888 |
Operations and maintenance | ||||
Related Party Transaction [Line Items] | ||||
Expenses related to transactions with related parties | 7,973 | 6,560 | 21,680 | 19,117 |
General and administrative | ||||
Related Party Transaction [Line Items] | ||||
Expenses related to transactions with related parties | 11,817 | 9,838 | 32,129 | 29,489 |
Property, Plant and Equipment | ||||
Related Party Transaction [Line Items] | ||||
Costs capitalized from transactions with related parties | $ 765 | $ 688 | $ 1,568 | $ 2,255 |
Related Party Transactions - Schedule of Balances with Affiliates Included in Accounts Receivables and Accounts Payable in Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Related Party Transaction [Line Items] | ||
Accounts receivable from related parties | $ 1,052 | $ 590 |
Accounts payable to related parties | 6,072 | 5,935 |
Rockies Express Pipeline LLC | ||
Related Party Transaction [Line Items] | ||
Accounts receivable from related parties | 1,052 | 590 |
Tallgrass Operations, LLC | ||
Related Party Transaction [Line Items] | ||
Accounts payable to related parties | 5,994 | 5,854 |
Tallgrass Equity, LLC | ||
Related Party Transaction [Line Items] | ||
Accounts payable to related parties | 78 | 68 |
Deeprock Development, LLC | ||
Related Party Transaction [Line Items] | ||
Accounts payable to related parties | $ 0 | $ 13 |
Related Party Transactions - Schedule of Balances of Gas Imbalance with Affiliated Shippers (Detail) - Affiliated Shippers - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Related Party Transaction [Line Items] | ||
Affiliate gas imbalance receivables | $ 17 | $ 177 |
Affiliate gas imbalance payables | $ 43 | $ 0 |
Inventory Inventory (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Crude oil | $ 2,115 | $ 5,462 |
Materials and supplies | 5,993 | 6,383 |
Natural gas liquids | 543 | 265 |
Gas in underground storage | 1,522 | 983 |
Inventory, Net | $ 10,173 | $ 13,093 |
Investments in Unconsolidated Affiliates Investments in Unconsolidated Affiliates - Summarized Financial Information (Details) - Rockies Express Pipeline LLC - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Schedule of Equity Method Investments [Line Items] | ||||
Equity Method Investment, Summarized Financial Information, Revenue | $ 216,756 | $ 159,421 | $ 625,243 | $ 551,323 |
Equity Method Investment Summarized Financial Information Operating Income | 123,965 | 66,436 | 344,037 | 267,847 |
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | $ 233,990 | $ 34,184 | $ 371,185 | $ 226,847 |
Goodwill Goodwill (Details) - USD ($) $ in Thousands |
9 Months Ended | ||||
---|---|---|---|---|---|
Jul. 20, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Goodwill [Line Items] | |||||
Goodwill | $ 404,838 | $ 343,288 | $ 343,288 | $ 343,288 | |
Goodwill, Acquired During Period | 61,550 | 0 | |||
Natural Gas Transportation | |||||
Goodwill [Line Items] | |||||
Goodwill | 255,558 | 255,558 | 255,558 | 255,558 | |
Goodwill, Acquired During Period | 0 | 0 | |||
Gathering, Processing & Terminalling | |||||
Goodwill [Line Items] | |||||
Goodwill | 149,280 | 87,730 | $ 87,730 | $ 87,730 | |
Goodwill, Acquired During Period | $ 61,550 | $ 0 | |||
Deeprock Development, LLC | |||||
Goodwill [Line Items] | |||||
Goodwill, Acquired During Period | $ 61,600 |
Risk Management - Derivative Contracts Included in Consolidated Statement of Income (Detail) - Derivatives not designated as hedging contracts - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Energy Related Derivative | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | $ 175 | $ 318 | $ 1,065 | $ 466 |
Energy commodity derivative contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | (22) | 161 | 84 | (190) |
Equity Option | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | $ 0 | $ (4,419) | $ 1,885 | $ 5,588 |
Risk Management Risk Management - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Feb. 01, 2017 |
Oct. 31, 2016 |
Jul. 21, 2016 |
Jan. 01, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Derivative [Line Items] | ||||||
Partners' Capital Account, Units, Treasury Units Purchased | 736,262 | |||||
Partial exercise of call option | $ 35,300 | $ 35,335 | $ 0 | |||
Margin Deposit Assets | 800 | |||||
Letters of Credit Outstanding, Amount | 3,000 | |||||
Equity Option | ||||||
Derivative [Line Items] | ||||||
Partners' Capital Account, Units, Treasury Units Purchased | 1,703,094 | 1,251,760 | 3,563,146 | |||
Partial exercise of call option | $ 72,400 | $ 53,200 | $ 151,400 | $ 72,381 | $ 151,434 | |
Pony Express Pipeline | ||||||
Derivative [Line Items] | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 31.30% | |||||
Pony Express Pipeline | Equity Option | ||||||
Derivative [Line Items] | ||||||
Derivative, Term of Contract | 18 months | |||||
Option Indexed to Issuer's Equity, Strike Price | $ 42.50 | |||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 6,518,000 |
Long-term Debt Schedule of Debt (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
2024 Senior Notes | ||
Debt Instrument [Line Items] | ||
Total long-term debt, net | $ 739,444 | $ 392,981 |
2028 Senior Notes | ||
Debt Instrument [Line Items] | ||
Total long-term debt, net | 494,642 | |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Total long-term debt, net | 881,000 | 1,015,000 |
Tallgrass Energy Partners | ||
Debt Instrument [Line Items] | ||
Less: Deferred financing costs, net | (15,914) | (7,019) |
Total long-term debt, net | 2,115,086 | 1,407,981 |
Tallgrass Energy Partners | 2024 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 750,000 | 400,000 |
Tallgrass Energy Partners | 2028 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 500,000 | 0 |
Tallgrass Energy Partners | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 881,000 | 1,015,000 |
Total long-term debt, net | $ 881,000 | $ 1,015,000 |
Partnership Equity and Distributions - Summary of Distributions (Detail) - Tallgrass Energy Partners - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
|
Distribution Made to Limited Partner [Line Items] | |||||||
Distributions Limited Partners Common | $ 69,174 | $ 67,671 | $ 60,486 | $ 58,793 | $ 57,332 | $ 54,442 | $ 48,238 |
Distributions General Partner Incentive | 37,744 | 36,342 | 29,840 | 28,358 | 26,987 | 24,262 | 19,816 |
General Partner Distributions | 1,219 | 1,186 | 1,040 | 1,008 | 976 | 911 | 830 |
Distributions Total | $ 108,137 | $ 105,199 | $ 91,366 | $ 88,159 | $ 85,295 | $ 79,615 | $ 68,884 |
Distributions per Limited Partner unit | $ 0.9450 | $ 0.9250 | $ 0.8350 | $ 0.8150 | $ 0.7950 | $ 0.7550 | $ 0.7050 |
Net Income per Limited Partner Unit (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Earnings Per Share [Abstract] | ||||
Net income | $ 185,503 | $ 65,429 | $ 348,116 | $ 203,495 |
Net income attributable to noncontrolling interests | (1,413) | (1,084) | (3,241) | (3,235) |
Net income attributable to partners | 184,090 | 64,345 | 344,875 | 200,260 |
Predecessor operations interest in net income | 0 | (3,611) | 0 | (3,408) |
General partner interest in net income | (39,809) | (27,674) | (107,693) | (73,347) |
Net income available to common unitholders | $ 144,281 | $ 33,060 | $ 237,182 | $ 123,505 |
Basic net income per common unit | $ 1.97 | $ 0.45 | $ 3.26 | $ 1.75 |
Diluted net income per common unit | $ 1.96 | $ 0.45 | $ 3.23 | $ 1.73 |
Basic average number of common units outstanding | 73,138 | 73,089 | 72,769 | 70,686 |
Equity Participation Unit equivalent units | 500 | 974 | 550 | 904 |
Diluted average number of common units outstanding | 73,638 | 74,063 | 73,319 | 71,590 |
Regulatory Matters Regulatory Matters (Details) - MMBTU / d MMBTU / d in Thousands |
Jan. 06, 2017 |
Jul. 01, 2017 |
---|---|---|
Public Utilities, General Disclosures [Line Items] | ||
Capacity Enhancement | 0 | |
Pony Express Pipeline | ||
Public Utilities, General Disclosures [Line Items] | ||
FERC Annual Index Adjustment | 0.20% |
Reporting Segments Reporting Segments - Summary of TEP's Segment Capital Expenditures (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Segment Reporting Information [Line Items] | ||
Capital expenditures | $ 88,050 | $ 55,397 |
TEP | ||
Segment Reporting Information [Line Items] | ||
Capital expenditures | 88,050 | 55,397 |
TEP | Natural Gas Transportation | ||
Segment Reporting Information [Line Items] | ||
Capital expenditures | 9,829 | 11,146 |
TEP | Crude Oil Transportation | ||
Segment Reporting Information [Line Items] | ||
Capital expenditures | 28,785 | 25,985 |
TEP | Gathering, Processing & Terminalling | ||
Segment Reporting Information [Line Items] | ||
Capital expenditures | 49,436 | 18,266 |
TEP | Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Capital expenditures | $ 0 | $ 0 |
Reporting Segments - Summary of TEP's Segment Information of Assets (Detail) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Assets | $ 3,905,396 | $ 3,102,213 |
TEP | ||
Segment Reporting Information [Line Items] | ||
Assets | 3,905,396 | 3,102,213 |
TEP | Natural Gas Transportation | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,618,828 | 1,176,147 |
TEP | Crude Oil Transportation | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,384,981 | 1,410,695 |
TEP | Gathering, Processing & Terminalling | ||
Segment Reporting Information [Line Items] | ||
Assets | 887,089 | 495,170 |
TEP | Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 14,498 | $ 20,201 |
Reporting Segments - Additional Information (Detail) - Segment |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Mar. 31, 2017 |
Jan. 01, 2017 |
|
Segment Reporting Information [Line Items] | |||
Number of Reportable Segments | 3 | ||
Rockies Express Pipeline LLC | |||
Segment Reporting Information [Line Items] | |||
Equity Method Investment, Ownership Percentage | 49.99% | ||
Tallgrass NatGas Operator, LLC | |||
Segment Reporting Information [Line Items] | |||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||
Rockies Express Pipeline LLC | Tallgrass Development LP | |||
Segment Reporting Information [Line Items] | |||
Business Acquisition, Percentage of Voting Interests Acquired | 24.99% | ||
Tallgrass Terminals, LLC | |||
Segment Reporting Information [Line Items] | |||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% |
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