10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 ________________________________________

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File No.: 1-16335

 __________________________________

 Magellan Midstream Partners, L.P.

(Exact name of registrant as specified in its charter)

Delaware	73-1599053
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

One Williams Center, P.O. Box 22186, Tulsa, Oklahoma 74121-2186

(Address of principal executive offices and zip code)

(918) 574-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Units representing limited partnership units	MMP	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x    Accelerated filer ☐    Non-accelerated filer ☐     

Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    

Yes  ☐    No  x

As of October 30, 2019, there were 228,403,428 outstanding common units representing limited partner units of Magellan Midstream Partners, L.P.

TABLE OF CONTENTS

PART I

FINANCIAL INFORMATION

 

ITEM 1.		CONSOLIDATED FINANCIAL STATEMENTS
	CONSOLIDATED STATEMENTS OF INCOME		2
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME		3
	CONSOLIDATED BALANCE SHEETS		4
	CONSOLIDATED STATEMENTS OF CASH FLOWS		5
	CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL		6
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:
	1.	Organization, Description of Business and Basis of Presentation	8
	2.	Revenue from Contracts with Customers	10
	3.	Segment Disclosures	14
	4.	Investments in Non-Controlled Entities	16
	5.	Inventory	18
	6.	Employee Benefit Plans	18
	7.	Leases	20
	8.	Debt	24
	9.	Derivative Financial Instruments	25
	10.	Commitments and Contingencies	29
	11.	Long-Term Incentive Plan	30
	12.	Partners’ Capital and Distributions	31
	13.	Fair Value	32
	14.	Related Party Transactions	34
	15.	Subsequent Events	35
ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	Introduction		36
	Recent Developments		36
	Results of Operations		37
	Distributable Cash Flow		44
	Liquidity and Capital Resources		45
	Off-Balance Sheet Arrangements		46
	Environmental		47
	Other Items		48
ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	50
ITEM 4.		CONTROLS AND PROCEDURES	51
Forward-Looking Statements			52
PART II OTHER INFORMATION
ITEM 1.		LEGAL PROCEEDINGS	54
ITEM 1A.		RISK FACTORS	55
ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	55
ITEM 3.		DEFAULTS UPON SENIOR SECURITIES	55
ITEM 4.		MINE SAFETY DISCLOSURES	55
ITEM 5.		OTHER INFORMATION	55
ITEM 6.		EXHIBITS	55
INDEX TO EXHIBITS			56
SIGNATURES			57

1

PART I

FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

MAGELLAN MIDSTREAM PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per unit amounts)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2019			2018			2019
Transportation and terminals revenue	$	488,775		$	506,432		$	1,392,960		$	1,473,629
Product sales revenue	144,403			144,807			552,792			497,791
Affiliate management fee revenue	4,842			5,357			15,138			15,810
Total revenue	638,020			656,596			1,960,890			1,987,230
Costs and expenses:
Operating	172,115			169,387			475,256			484,341
Cost of product sales	120,510			108,757			473,781			430,727
Depreciation, amortization and impairment	56,228			56,627			161,726			181,028
General and administrative	47,389			51,156			147,235			149,534
Total costs and expenses	396,242			385,927			1,257,998			1,245,630
Other operating income (expense)	—			(379		)	—			1,538
Earnings of non-controlled entities	53,795			50,189			130,843			122,229
Operating profit	295,573			320,479			833,735			865,367
Interest expense	55,133			53,750			168,535			165,322
Interest capitalized	(3,099		)	(5,831		)	(13,354		)	(14,419		)
Interest income	(501		)	(648		)	(1,460		)	(2,646		)
Gain on disposition of assets	(353,797		)	(2,532		)	(353,797		)	(28,966		)
Other (income) expense	1,694			2,602			10,299			9,222
Income before provision for income taxes	596,143			273,138			1,023,512			736,854
Provision for income taxes	1,609			100			3,659			2,450
Net income	$	594,534		$	273,038		$	1,019,853		$	734,404
Basic net income per limited partner unit	$	2.60		$	1.19		$	4.47		$	3.21
Diluted net income per limited partner unit	$	2.60		$	1.19		$	4.46		$	3.21
Weighted average number of limited partner units outstanding used for basic net income per unit calculation	228,397			228,720			228,368			228,642
Weighted average number of limited partner units outstanding used for diluted net income per unit calculation	228,449			228,754			228,412			228,667

See notes to consolidated financial statements.

2

MAGELLAN MIDSTREAM PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2019			2018			2019
Net income	$	594,534		$	273,038		$	1,019,853		$	734,404
Other comprehensive income (loss):
Derivative activity:
Net gain (loss) on cash flow hedges	6,852			(14,181		)	13,963			(25,216		)
Reclassification of net loss on cash flow hedges to income	740			699			2,219			1,927
Changes in employee benefit plan assets and benefit obligations recognized in other comprehensive income:
Net actuarial loss	—			—			(5,291		)	(10,913		)
Amortization of prior service credit	(45		)	(46		)	(136		)	(136		)
Amortization of actuarial loss	1,806			1,412			8,623			4,385
Settlement cost	—			439			—			2,499
Total other comprehensive income (loss)	9,353			(11,677		)	19,378			(27,454		)
Comprehensive income	$	603,887		$	261,361		$	1,039,231		$	706,950

See notes to consolidated financial statements.

3

MAGELLAN MIDSTREAM PARTNERS, L.P.

CONSOLIDATED BALANCE SHEETS

(In thousands)

 

	December 31, 2018			September 30, 2019
ASSETS				(Unaudited)
Current assets:
Cash and cash equivalents	$	218,283		$	135,486
Trade accounts receivable	104,164			131,746
Other accounts receivable	25,007			22,379
Inventory	185,735			205,952
Energy commodity derivatives contracts, net	55,011			4,839
Energy commodity derivatives deposits	—			21,811
Other current assets	58,143			45,631
Total current assets	646,343			567,844
Property, plant and equipment	7,628,592			8,248,181
Less: accumulated depreciation	1,830,411			1,983,694
Net property, plant and equipment	5,798,181			6,264,487
Investments in non-controlled entities	1,076,306			1,206,040
Right-of-use asset, operating leases	—			162,463
Long-term receivables	20,844			20,789
Goodwill	53,260			53,260
Other intangibles (less accumulated amortization of $2,979 and $5,588 at December 31, 2018 and September 30, 2019, respectively)	51,174			48,565
Restricted cash	90,978			56,006
Other noncurrent assets	10,451			12,732
Total assets	$	7,747,537		$	8,392,186
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable	$	138,735		$	205,410
Accrued payroll and benefits	70,276			56,677
Accrued interest payable	63,258			48,198
Accrued taxes other than income	53,093			63,375
Environmental liabilities	9,153			7,752
Deferred revenue	121,085			107,852
Accrued product liabilities	75,482			108,884
Energy commodity derivatives deposits	37,328			—
Current portion of operating lease liability	—			22,997
Current portion of long-term debt, net	59,489			—
Other current liabilities	48,657			59,500
Total current liabilities	676,556			680,645
Long-term operating lease liability	—			135,689
Long-term debt, net	4,211,380			4,705,775
Long-term pension and benefits	122,580			131,676
Other noncurrent liabilities	82,240			55,085
Environmental liabilities	11,347			8,860
Commitments and contingencies
Partners’ capital:
Limited partner unitholders (228,195 units and 228,403 units outstanding at December 31, 2018 and September 30, 2019, respectively)	2,763,925			2,822,401
Accumulated other comprehensive loss	(120,491		)	(147,945		)
Total partners’ capital	2,643,434			2,674,456
Total liabilities and partners’ capital	$	7,747,537		$	8,392,186

See notes to consolidated financial statements.

4

MAGELLAN MIDSTREAM PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	Nine Months Ended
	September 30,
	2018			2019
Operating Activities:
Net income	$	1,019,853		$	734,404
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and impairment expense	161,726			181,028
Gain on sale and retirement of assets	(347,541		)	(29,227		)
Earnings of non-controlled entities	(130,843		)	(122,229		)
Distributions from operations of non-controlled entities	147,950			138,140
Equity-based incentive compensation expense	24,612			22,577
Settlement cost, amortization of prior service credit and actuarial loss	8,487			6,748
Debt prepayment costs	—			8,270
Changes in operating assets and liabilities:
Trade accounts receivable and other accounts receivable	(8,303		)	(24,954		)
Inventory	2,979			(20,217		)
Accounts payable	27,498			29,014
Accrued payroll and benefits	(2,976		)	(13,599		)
Accrued interest payable	(21,348		)	(15,060		)
Accrued taxes other than income	964			10,282
Accrued product liabilities	(15,964		)	33,402
Deferred revenue	5,353			(13,233		)
Other current and noncurrent assets and liabilities	(8,666		)	(2,749		)
Net cash provided by operating activities	863,781			922,597
Investing Activities:
Additions to property, plant and equipment, net(1)	(374,320		)	(718,605		)
Proceeds from sale and disposition of assets	579,448			65,574
Investments in non-controlled entities	(147,048		)	(158,145		)
Distributions from returns of investments in non-controlled entities	1,786			7,500
Deposits received from undivided joint interest third party	41,571			68,928
Net cash provided (used) by investing activities	101,437			(734,748		)
Financing Activities:
Distributions paid	(642,370		)	(688,635		)
Borrowings under long-term notes	—			996,405
Payments on notes	(250,000		)	(550,000		)
Debt placement costs	(326		)	(12,012		)
Net receipt (payment) on financial derivatives	20,925			(33,342		)
Payments associated with settlement of equity-based incentive compensation	(9,285		)	(9,764		)
Debt prepayment costs	—			(8,270		)
Net cash used by financing activities	(881,056		)	(305,618		)
Change in cash, cash equivalents and restricted cash	84,162			(117,769		)
Cash, cash equivalents and restricted cash at beginning of period	176,068			309,261
Cash, cash equivalents and restricted cash at end of period	$	260,230		$	191,492
Supplemental non-cash investing activities:
(1)   Additions to property, plant and equipment	$	(375,599	)	$	(775,109	)
Changes in accounts payable and other current liabilities related to capital expenditures	1,279			56,504
Additions to property, plant and equipment, net	$	(374,320	)	$	(718,605	)

See notes to consolidated financial statements.

5

MAGELLAN MIDSTREAM PARTNERS, L.P.

CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL

(Unaudited, in thousands)

	Limited Partners			Accumulated Other Comprehensive Loss				Total Partners’ Capital
Balance, July 1, 2018	$	2,281,845			$	(127,553	)	$	2,154,292
Comprehensive income:
Net income	594,534				—			594,534
Total other comprehensive income	—				9,353			9,353
Total comprehensive income	594,534				9,353			603,887
Distributions	(218,497		)		—			(218,497		)
Equity-based incentive compensation expense	7,933				—			7,933
Other	(195		)		—			(195		)
Three Months Ended September 30, 2018	$	2,665,620			$	(118,200	)	$	2,547,420
Balance, July 1, 2019	$	2,774,047			$	(136,268	)	$	2,637,779
Comprehensive income:
Net income	273,038				—			273,038
Total other comprehensive loss	—				(11,677		)	(11,677		)
Total comprehensive income	273,038				(11,677		)	261,361
Distributions	(231,258		)		—			(231,258		)
Equity-based incentive compensation expense	6,773				—			6,773
Other	(199		)		—			(199		)
Three Months Ended September 30, 2019	$	2,822,401			$	(147,945	)	$	2,674,456

6

MAGELLAN MIDSTREAM PARTNERS, L.P. CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL (Continued) (Unaudited, in thousands)
	Limited Partners			Accumulated Other Comprehensive Loss				Total Partners’ Capital
Balance, January 1, 2018	$	2,267,231			$	(137,578	)	$	2,129,653
Comprehensive income:
Net income	1,019,853				—			1,019,853
Total other comprehensive income	—				19,378			19,378
Total comprehensive income	1,019,853				19,378			1,039,231
Distributions	(642,370		)		—			(642,370		)
Equity-based incentive compensation expense	24,612				—			24,612
Issuance of limited partner units in settlement of equity-based incentive plan awards	120				—			120
Payments associated with settlement of equity-based incentive compensation	(9,285		)		—			(9,285		)
ASC 606 cumulative effect	5,975				—			5,975
Other	(516		)		—			(516		)
Nine Months Ended September 30, 2018	$	2,665,620			$	(118,200	)	$	2,547,420
Balance, January 1, 2019	$	2,763,925			$	(120,491	)	$	2,643,434
Comprehensive income:
Net income	734,404				—			734,404
Total other comprehensive loss	—				(27,454		)	(27,454		)
Total comprehensive income	734,404				(27,454		)	706,950
Distributions	(688,635		)		—			(688,635		)
Equity-based incentive compensation expense	22,577				—			22,577
Issuance of limited partner units in settlement of equity-based incentive plan awards	480				—			480
Payments associated with settlement of equity-based incentive compensation	(9,764		)		—			(9,764		)
Other	(586		)		—			(586		)
Nine Months Ended September 30, 2019	$	2,822,401			$	(147,945	)	$	2,674,456

See notes to consolidated financial statements.

7

MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization, Description of Business and Basis of Presentation

Organization

Unless indicated otherwise, the terms “our,” “we,” “us” and similar language refer to Magellan Midstream Partners, L.P. together with its subsidiaries. Magellan Midstream Partners, L.P. is a Delaware limited partnership, and its limited partner units are traded on the New York Stock Exchange under the ticker symbol “MMP.” Magellan GP, LLC, a wholly-owned Delaware limited liability company, serves as its general partner.

Description of Business

We are principally engaged in the transportation, storage and distribution of refined petroleum products and crude oil.  As of September 30, 2019, our asset portfolio consisted of:

• our refined products segment, comprised of our approximately 9,700-mile refined products pipeline system with 53 terminals as well as 25 independent terminals not connected to our pipeline system and our 1,100-mile ammonia pipeline system;

• our crude oil segment, comprised of approximately 2,200 miles of crude oil pipelines, a condensate splitter and 33 million barrels of aggregate storage capacity, of which approximately 21 million barrels are used for contract storage. Approximately 1,000 miles of these pipelines, the condensate splitter and 28 million barrels of this storage capacity (including 19 million barrels used for contract storage) are wholly-owned, with the remainder owned through joint ventures; and

• our marine storage segment, consisting of six marine terminals located along coastal waterways with an aggregate storage capacity of approximately 27 million barrels. Five of these terminals and approximately 25 million barrels of this storage capacity are wholly-owned, with the remainder owned through joint ventures.

Terminology common in our industry includes the following terms, which describe products that we transport, store and distribute through our pipelines and terminals:

• refined products are the output from refineries and are primarily used as fuels by consumers. Refined products include gasoline, diesel fuel, aviation fuel, kerosene and heating oil.  Collectively, diesel fuel, kerosene and heating oil are referred to as distillates;

• liquefied petroleum gases, or LPGs, are produced as by-products of the crude oil refining process and in connection with natural gas production. LPGs include butane and propane;

• blendstocks are blended with refined products to change or enhance their characteristics such as increasing a gasoline’s octane or oxygen content. Blendstocks include alkylates, oxygenates and natural gasoline;

• heavy oils and feedstocks are used as burner fuels or feedstocks for further processing by refineries and petrochemical facilities. Heavy oils and feedstocks include No. 6 fuel oil and vacuum gas oil;

• crude oil, which includes condensate, is used as feedstock by refineries, splitters and petrochemical facilities; and

8

MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

• biofuels, such as ethanol and biodiesel, are typically blended with other refined products as required by government mandates.

We use the term petroleum products to describe any, or a combination, of the above-noted products.

Basis of Presentation

In the opinion of management, our accompanying consolidated financial statements which are unaudited, except for the consolidated balance sheet as of December 31, 2018, which is derived from our audited financial statements, include all normal and recurring adjustments necessary to present fairly our financial position as of September 30, 2019, the results of operations for the three and nine months ended September 30, 2018 and 2019 and cash flows for the nine months ended September 30, 2018 and 2019. The results of operations for the nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019 for several reasons. Profits from our butane blending activities are realized largely during the first and fourth quarters of each year. Additionally, gasoline demand, which drives transportation volumes and revenues on our refined products pipeline system, generally trends higher during the summer driving months. Further, the volatility of commodity prices impacts the profits from our commodity activities and the volume of petroleum products we transport on our pipelines.

Pursuant to the rules and regulations of the Securities and Exchange Commission, the financial statements in this report do not include all of the information and notes normally included with financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Use of Estimates

The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities that exist at the date of our consolidated financial statements, as well as their impact on the reported amounts of revenue and expense during the reporting periods. Actual results could differ from those estimates.

New Accounting Pronouncements - Adopted by us on January 1, 2019

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This ASU requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases, with the exception of short-term leases. The new accounting model for lessors remains largely the same, although some changes have been made to align it with the new lessee model and the new revenue recognition guidance. This update also requires companies to include additional disclosures regarding their lessee and lessor agreements. We adopted this standard on January 1, 2019, and it did not have a material impact on our consolidated statements of income or our leverage ratio as defined in our credit agreement. Adoption of this ASU resulted in an initial increase in our assets and liabilities by approximately $172 million due to the recognition of right-of-use assets and lease liabilities. See Note 7 – Leases for our lease disclosures.

9

MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Revenue from Contracts with Customers

Statement of Income Disclosures

The following tables provide details of our revenues disaggregated by key activities that comprise our performance obligations by operating segment (in thousands):

	Three Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation	$	197,235		$	91,086		$	—		$	—		$	288,321
Terminalling	46,213			2,528			616			—			49,357
Storage	25,137			29,094			33,890			(923		)	87,198
Ancillary services	28,808			6,278			5,857			—			40,943
Lease revenue	2,641			16,132			4,183			—			22,956
Transportation and terminals revenue	300,034			145,118			44,546			(923		)	488,775
Product sales revenue	129,926			12,666			1,811			—			144,403
Affiliate management fee revenue	351			3,463			1,028			—			4,842
Total revenue	430,311			161,247			47,385			(923		)	638,020
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(2,641		)	(16,132		)	(4,183		)	—			(22,956		)
Losses from futures contracts included in product sales revenue(2)	24,253			102			—			—			24,355
Affiliate management fee revenue	(351		)	(3,463		)	(1,028		)	—			(4,842		)
Total revenue from contracts with customers under ASC 606	$	451,572		$	141,754		$	42,174		$	(923	)	$	634,577

⁽¹⁾ Lease revenue in 2018 is accounted for under ASC 840, Leases.

⁽²⁾ The impact on product sales revenue from futures contracts falls under the guidance of ASC 815, Derivatives and Hedging.

10

MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Three Months Ended September 30, 2019
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation	$	205,824		$	85,859		$	—		$	—		$	291,683
Terminalling	47,483			3,176			946			—			51,605
Storage	25,788			35,371			34,230			(1,556		)	93,833
Ancillary services	29,284			7,164			7,205			—			43,653
Lease revenue	2,103			19,356			4,199			—			25,658
Transportation and terminals revenue	310,482			150,926			46,580			(1,556		)	506,432
Product sales revenue	134,755			8,343			1,709			—			144,807
Affiliate management fee revenue	432			3,592			1,333			—			5,357
Total revenue	445,669			162,861			49,622			(1,556		)	656,596
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(2,103		)	(19,356		)	(4,199		)	—			(25,658		)
(Gains) losses from futures contracts included in product sales revenue(2)	(17,061		)	(564		)	—			—			(17,625		)
Affiliate management fee revenue	(432		)	(3,592		)	(1,333		)	—			(5,357		)
Total revenue from contracts with customers under ASC 606	$	426,073		$	139,349		$	44,090		$	(1,556	)	$	607,956

⁽¹⁾ Lease revenue in 2019 is accounted for under ASC 842, Leases.

⁽²⁾ The impact on product sales revenue from futures contracts falls under the guidance of ASC 815, Derivatives and Hedging.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Nine Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation	$	548,733		$	254,964		$	—		$	—		$	803,697
Terminalling	136,135			2,528			1,920			—			140,583
Storage	75,353			87,620			101,420			(2,753		)	261,640
Ancillary services	83,055			19,512			18,928			—			121,495
Lease revenue	8,216			44,705			12,624			—			65,545
Transportation and terminals revenue	851,492			409,329			134,892			(2,753		)	1,392,960
Product sales revenue	513,634			32,387			6,771			—			552,792
Affiliate management fee revenue	1,000			11,328			2,810			—			15,138
Total revenue	1,366,126			453,044			144,473			(2,753		)	1,960,890
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(8,216		)	(44,705		)	(12,624		)	—			(65,545		)
Losses from futures contracts included in product sales revenue(2)	64,558			5,582			—			—			70,140
Affiliate management fee revenue	(1,000		)	(11,328		)	(2,810		)	—			(15,138		)
Total revenue from contracts with customers under ASC 606	$	1,421,468		$	402,593		$	129,039		$	(2,753	)	$	1,950,347

⁽¹⁾ Lease revenue in 2018 is accounted for under ASC 840, Leases.

⁽²⁾ The impact on product sales revenue from futures contracts falls under the guidance of ASC 815, Derivatives and Hedging.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Nine Months Ended September 30, 2019
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation	$	578,024		$	262,551		$	—		$	—		$	840,575
Terminalling	136,435			13,145			2,535			—			152,115
Storage	77,698			104,661			103,933			(3,835		)	282,457
Ancillary services	83,308			19,796			20,671			—			123,775
Lease revenue	8,237			53,950			12,520			—			74,707
Transportation and terminals revenue	883,702			454,103			139,659			(3,835		)	1,473,629
Product sales revenue	473,122			19,351			5,318			—			497,791
Affiliate management fee revenue	1,314			10,724			3,772			—			15,810
Total revenue	1,358,138			484,178			148,749			(3,835		)	1,987,230
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(8,237		)	(53,950		)	(12,520		)	—			(74,707		)
Losses from futures contracts included in product sales revenue(2)	39,761			1,743			—			—			41,504
Affiliate management fee revenue	(1,314		)	(10,724		)	(3,772		)	—			(15,810		)
Total revenue from contracts with customers under ASC 606	$	1,388,348		$	421,247		$	132,457		$	(3,835	)	$	1,938,217

⁽¹⁾ Lease revenue in 2019 is accounted for under ASC 842, Leases.

⁽²⁾ The impact on product sales revenue from futures contracts falls under the guidance of ASC 815, Derivatives and Hedging.

Balance Sheet Disclosures

The following table summarizes our accounts receivable, contract assets and contract liabilities resulting from contracts with customers (in thousands):

	December 31, 2018		September 30, 2019
Accounts receivable from contracts with customers	$	102,684	$	129,017
Contract assets	$	8,487	$	7,685
Contract liabilities	$	122,129	$	110,519

For the three and nine months ended September 30, 2019, we recognized $6.0 million and $90.0 million of transportation and terminals revenue that was recorded in deferred revenue as of December 31, 2018.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unfulfilled Performance Obligations

The following table provides the aggregate amount of the transaction price allocated to our unfulfilled performance obligations (“UPOs”) as of September 30, 2019 by operating segment, including the range of years remaining on our contracts with customers and an estimate of revenues expected to be recognized over the next 12 months (dollars in thousands):

	Refined Products		Crude Oil		Marine Storage		Total
Balances at September 30, 2019	$	2,034,378	$	1,206,147	$	223,219	$	3,463,744
Remaining terms	1 - 19 years		1 - 10 years		1 - 5 years
Estimated revenues from UPOs to be recognized in the next 12 months	$	289,478	$	337,928	$	122,047	$	749,453

3. Segment Disclosures

Our reportable segments are strategic business units that offer different products and services. Our segments are managed separately as each segment requires different marketing strategies and business knowledge.

We believe that investors benefit from having access to the same financial measures used by management. Management evaluates performance based on segment operating margin. Operating margin, which is presented in the following tables, is an important measure used by management to evaluate the economic performance of our core operations. Operating margin is not a GAAP measure, but the components of operating margin are computed using amounts that are determined in accordance with GAAP. A reconciliation of operating margin to operating profit, which is its nearest comparable GAAP financial measure, is included in the tables below (presented in thousands). Operating profit includes depreciation, amortization and impairment expense and general and administrative (“G&A”) expense that management does not consider when evaluating the core profitability of our separate operating segments.

	Three Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	300,034		$	145,118		$	44,546		$	(923	)	$	488,775
Product sales revenue	129,926			12,666			1,811			—			144,403
Affiliate management fee revenue	351			3,463			1,028			—			4,842
Total revenue	430,311			161,247			47,385			(923		)	638,020
Operating expenses	112,279			45,195			17,178			(2,537		)	172,115
Cost of product sales	106,756			11,590			2,164			—			120,510
Earnings of non-controlled entities	(3,393		)	(49,420		)	(982		)	—			(53,795		)
Operating margin	214,669			153,882			29,025			1,614			399,190
Depreciation, amortization and impairment expense	30,440			15,145			9,029			1,614			56,228
G&A expense	28,751			12,766			5,872			—			47,389
Operating profit	$	155,478		$	125,971		$	14,124		$	—		$	295,573

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Three Months Ended September 30, 2019
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	310,482		$	150,926		$	46,580		$	(1,556	)	$	506,432
Product sales revenue	134,755			8,343			1,709			—			144,807
Affiliate management fee revenue	432			3,592			1,333			—			5,357
Total revenue	445,669			162,861			49,622			(1,556		)	656,596
Operating expenses	111,839			42,529			17,921			(2,902		)	169,387
Cost of product sales	98,144			8,341			2,272			—			108,757
Other operating (income) expense	(1,046		)	3,629			(2,204		)	—			379
Earnings of non-controlled entities	(3,373		)	(46,047		)	(769		)	—			(50,189		)
Operating margin	240,105			154,409			32,402			1,346			428,262
Depreciation, amortization and impairment expense	31,752			14,810			8,719			1,346			56,627
G&A expense	30,650			13,666			6,840			—			51,156
Operating profit	$	177,703		$	125,933		$	16,843		$	—		$	320,479

	Nine Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	851,492		$	409,329		$	134,892		$	(2,753	)	$	1,392,960
Product sales revenue	513,634			32,387			6,771			—			552,792
Affiliate management fee revenue	1,000			11,328			2,810			—			15,138
Total revenue	1,366,126			453,044			144,473			(2,753		)	1,960,890
Operating expenses	319,670			109,963			52,835			(7,212		)	475,256
Cost of product sales	434,632			32,401			6,748			—			473,781
Earnings of non-controlled entities	(5,614		)	(122,879		)	(2,350		)	—			(130,843		)
Operating margin	617,438			433,559			87,240			4,459			1,142,696
Depreciation, amortization and impairment expense	89,855			40,648			26,764			4,459			161,726
G&A expense	90,825			38,127			18,283			—			147,235
Operating profit	$	436,758		$	354,784		$	42,193		$	—		$	833,735

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

 

	Nine Months Ended September 30, 2019
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	883,702		$	454,103		$	139,659		$	(3,835	)	$	1,473,629
Product sales revenue	473,122			19,351			5,318			—			497,791
Affiliate management fee revenue	1,314			10,724			3,772			—			15,810
Total revenue	1,358,138			484,178			148,749			(3,835		)	1,987,230
Operating expenses	317,328			123,569			51,404			(7,960		)	484,341
Cost of product sales	404,814			19,715			6,198			—			430,727
Other operating (income) expense	(2,398		)	8,112			(7,252		)	—			(1,538		)
(Earnings) losses of non-controlled entities	2,275			(122,084		)	(2,420		)	—			(122,229		)
Operating margin	636,119			454,866			100,819			4,125			1,195,929
Depreciation, amortization and impairment expense	102,024			45,812			29,067			4,125			181,028
G&A expense	89,385			40,378			19,771			—			149,534
Operating profit	$	444,710		$	368,676		$	51,981		$	—		$	865,367

4. Investments in Non-Controlled Entities

Our investments in non-controlled entities at September 30, 2019 were comprised of:

Entity	Ownership Interest
BridgeTex Pipeline Company, LLC (“BridgeTex”)	30%
Double Eagle Pipeline LLC (“Double Eagle”)	50%
HoustonLink Pipeline Company, LLC (“HoustonLink”)	50%
MVP Terminalling, LLC (“MVP”)	50%
Powder Springs Logistics, LLC (“Powder Springs”)	50%
Saddlehorn Pipeline Company, LLC (“Saddlehorn”)	40%
Seabrook Logistics, LLC (“Seabrook”)	50%
Texas Frontera, LLC (“Texas Frontera”)	50%

We serve as operator of BridgeTex, HoustonLink, MVP, Powder Springs, Saddlehorn, Texas Frontera and the pipeline activities of Seabrook. We receive fees for management services as well as reimbursement or payment to us for certain direct operational payroll and other overhead costs. The management fees we receive are reported as affiliate management fee revenue on our consolidated statements of income. Cost reimbursements we receive from these entities in connection with our operating services are included as reductions to costs and expenses on our consolidated statements of income and totaled $0.9 million and $1.2 million during the three months ended September 30, 2018 and 2019, respectively, and $2.6 million and $3.8 million during the nine months ended September 30, 2018 and 2019, respectively.

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

We recorded the following revenue and expense transactions from certain of these non-controlled entities in our consolidated statements of income (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2019		2018		2019
Transportation and terminals revenue:
BridgeTex, pipeline capacity and storage	$	9,958	$	10,737	$	29,519	$	31,063
Double Eagle, throughput revenue	$	1,005	$	1,582	$	3,892	$	4,813
Saddlehorn, storage revenue	$	552	$	566	$	1,628	$	1,669
Operating costs:
Seabrook, storage lease and ancillary services	$	3,982	$	6,267	$	3,982	$	19,417
Product sales revenue:
Powder Springs, butane sales	$	—	$	—	$	4,899	$	—
Cost of product sales:
Powder Springs, butane purchases	$	—	$	—	$	410	$	—
Other income:
MVP, easement sale	$	—	$	289	$	—	$	289

Our consolidated balance sheets reflected the following balances related to our investments in non-controlled entities (in thousands):

	December 31, 2018
	Trade Accounts Receivable		Other Accounts Receivable		Other Accounts Payable		Long-Term Receivables
BridgeTex	$	318	$	1,549	$	—	$	—
Double Eagle	$	546	$	—	$	—	$	—
MVP	$	—	$	397	$	—	$	—
Powder Springs	$	—	$	—	$	—	$	2,221
Saddlehorn	$	—	$	183	$	—	$	—
Seabrook	$	—	$	—	$	1,140	$	—

	September 30, 2019
	Trade Accounts Receivable		Other Accounts Receivable		Other Accounts Payable		Long-Term Receivables
BridgeTex	$	385	$	31	$	530	$	—
Double Eagle	$	440	$	—	$	—	$	—
HoustonLink	$	77	$	—	$	—	$	—
MVP	$	—	$	364	$	—	$	—
Powder Springs	$	—	$	10	$	—	$	4,892
Saddlehorn	$	—	$	120	$	—	$	—
Seabrook	$	753	$	332	$	1,223	$	—

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The financial results from MVP and Texas Frontera are included in our marine storage segment, the financial results from BridgeTex, Double Eagle, HoustonLink, Saddlehorn and Seabrook are included in our crude oil segment and the financial results from Powder Springs are included in our refined products segment, each as earnings of non-controlled entities.

A summary of our investments in non-controlled entities follows (in thousands):

Investments at 12/31/2018	$	1,076,306
Additional investment	158,145
Indemnification settlement	(5,000		)
Earnings of non-controlled entities:
Proportionate share of earnings	123,621
Amortization of excess investment and capitalized interest	(1,392		)
Earnings of non-controlled entities	122,229
Less:
Distributions from operations of non-controlled entities	138,140
Distributions from returns of investments in non-controlled entities	7,500
Investments at 9/30/2019	$	1,206,040

5. Inventory

Inventory at December 31, 2018 and September 30, 2019 was as follows (in thousands): 

	December 31, 2018		September 30, 2019
Refined products	$	92,751	$	106,406
Liquefied petroleum gases	46,612		47,057
Transmix	28,497		32,849
Crude oil	11,220		13,260
Additives	6,655		6,380
Total inventory	$	185,735	$	205,952

6. Employee Benefit Plans

We sponsor a defined contribution plan in which we match our employees’ qualifying contributions, resulting in additional expense to us. Expenses related to the defined contribution plan were $2.7 million and $2.8 million for the three months ended September 30, 2018 and 2019, respectively, and $8.8 million and $9.3 million for the nine months ended September 30, 2018 and 2019, respectively.

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Additionally, we sponsor two union pension plans that cover certain union employees, a pension plan for all non-union employees and a postretirement benefit plan for certain employees. Net periodic benefit expense for the three and nine months ended September 30, 2018 and 2019 was as follows (in thousands):

 

	Three Months Ended					Three Months Ended
	September 30, 2018					September 30, 2019
	Pension Benefits			Other  Postretirement Benefits		Pension Benefits			Other  Postretirement Benefits
Components of net periodic benefit costs:
Service cost	$	6,424		$	58	$	6,260		$	48
Interest cost	2,816			104		3,026			126
Expected return on plan assets	(3,055		)	—		(2,354		)	—
Amortization of prior service credit	(45		)	—		(46		)	—
Amortization of actuarial loss	1,659			147		1,352			60
Settlement cost	—			—		439			—
Net periodic benefit cost	$	7,799		$	309	$	8,677		$	234

 

	Nine Months Ended					Nine Months Ended
	September 30, 2018					September 30, 2019
	Pension Benefits			Other  Postretirement Benefits		Pension Benefits			Other  Postretirement Benefits
Components of net periodic benefit costs:
Service cost	$	28,393		$	174	$	19,145		$	145
Interest cost	12,054			312		9,136			380
Expected return on plan assets	(9,057		)	—		(7,045		)	—
Amortization of prior service credit	(136		)	—		(136		)	—
Amortization of actuarial loss	8,182			441		4,137			248
Settlement cost	—			—		2,499			—
Net periodic benefit cost	$	39,436		$	927	$	27,736		$	773

The service component of our net periodic benefit costs is presented in operating expense and G&A expense, and the non-service components are presented in other (income) expense in our consolidated statements of income.

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The changes in accumulated other comprehensive loss (“AOCL”) related to employee benefit plan assets and benefit obligations for the three and nine months ended September 30, 2018 and 2019 were as follows (in thousands):

	Three Months Ended						Three Months Ended
	September 30, 2018						September 30, 2019
Gains (Losses) Included in AOCL	Pension Benefits			Other Postretirement Benefits			Pension Benefits			Other Postretirement Benefits
Beginning balance	$	(96,352	)	$	(6,036	)	$	(93,876	)	$	(6,105	)
Amortization of prior service credit	(45		)	—			(46		)	—
Amortization of actuarial loss	1,659			147			1,352			60
Settlement cost	—			—			439			—
Ending balance	$	(94,738	)	$	(5,889	)	$	(92,131	)	$	(6,045	)

	Nine Months Ended						Nine Months Ended
	September 30, 2018						September 30, 2019
Gains (Losses) Included in AOCL	Pension Benefits			Other Postretirement Benefits			Pension Benefits			Other Postretirement Benefits
Beginning balance	$	(97,226	)	$	(6,597	)	$	(88,602	)	$	(5,409	)
Net actuarial gain (loss)	(5,558		)	267			(10,029		)	(884		)
Amortization of prior service credit	(136		)	—			(136		)	—
Amortization of actuarial loss	8,182			441			4,137			248
Settlement cost	—			—			2,499			—
Ending balance	$	(94,738	)	$	(5,889	)	$	(92,131	)	$	(6,045	)

Contributions estimated to be paid into the plans in 2019 are $31.6 million and $0.8 million for the pension plans and other postretirement benefit plan, respectively.

7. Leases

As of January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842) using the modified retrospective method of adoption. We elected to use the transition option that allows us to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment, if any, to the opening balance of retained earnings in the year of adoption. Comparable periods continue to be presented under the guidance of the previous standard, ASC 840. ASC 842 requires lessees to recognize a lease liability and right-of-use asset on the balance sheet for operating leases. For lessors, the new accounting model remains largely the same, although some changes have been made to align it with the new lessee model and the new revenue recognition guidance, ASC 606, Revenue from Contracts with Customers. Our adoption of ASC 842 did not result in any material adjustments to retained earnings, changes in the timing or amounts of lease costs or changes to our leverage ratio as defined in our credit agreement.

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

We have both lessee and lessor arrangements. Our leases are evaluated at inception or at any subsequent modification. Depending on the terms, leases are classified as either operating or finance leases if we are the lessee, or as operating, sales-type or direct financing leases if we are the lessor, as appropriate under ASC 842.  Our lessee arrangements primarily include a terminalling and storage contract where we have exclusive use of dedicated tankage, leased pipelines and office buildings. Our lessor arrangements include pipeline capacity and storage contracts and our condensate splitter tolling agreement that qualify as operating leases under ASC 842. In addition, we have a long-term throughput and deficiency agreement with a customer that is being accounted for as a sales-type lease under ASC 842.

In accordance with ASC 842, we have made an accounting policy election to not apply the new standard to lessee arrangements with a term of one year or less and no purchase option that is reasonably certain of exercise. We will continue to account for these short-term arrangements by recognizing payments and expenses as incurred, without recording a lease liability and right-of-use asset.

We have also made an accounting policy election for both our lessee and lessor arrangements to combine lease and non-lease components. This election is applied to all of our lease arrangements as our non-lease components are not material and do not result in significant timing differences in the recognition of rental expenses or income.

Operating Leases – Lessee

We recognize a lease liability for each lease based on the present value of remaining minimum fixed rental payments (which includes payments under any renewal option that we are reasonably certain to exercise), using a discount rate that approximates the rate of interest we would have to pay to borrow on a collateralized basis over a similar term. We also recognize a right-of-use asset for each lease, valued at the lease liability, adjusted for prepaid or accrued rent balances existing at the time of initial recognition. The lease liability and right-of-use asset are reduced over the term of the lease as payments are made and the assets are used.

Related Party Operating Lease. In 2018, we entered into a long-term terminalling and storage contract with Seabrook for exclusive use of dedicated tankage that provides our customers with crude oil storage capacity and dock access for crude oil imports and exports on the Texas Gulf Coast.

Minimum fixed rental payments are recognized on a straight-line basis over the life of the lease as costs and expenses on our consolidated statements of income. Variable and short-term rental payments are recognized as costs and expenses as they are incurred. Variable payments consist of amounts that exceed the contractual minimum rental payment (for example, payment increases tied to a change in a market index). Future minimum rental payments under operating leases with initial terms greater than one year as of September 30, 2019 are as follows (in thousands):

	Third Party Leases		Seabrook Lease		All Leases
2019	$	2,643	$	2,607	$	5,250
2020	18,607		10,429		29,036
2021	18,994		8,973		27,967
2022	18,870		6,612		25,482
2023	18,349		6,612		24,961
Thereafter	34,086		37,473		71,559
Total future minimum rental payments	111,549		72,706		184,255
Present value discount	13,207		12,362		25,569
Total operating lease liability	$	98,342	$	60,344	$	158,686

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables provide further information about our operating leases (dollars in thousands):

	Three Months Ended September 30, 2019						Nine Months Ended September 30, 2019
	Third Party Leases		Seabrook Lease		All Leases		Third Party Leases		Seabrook Lease		All Leases
Fixed lease cost	$	4,792	$	2,608	$	7,400	$	14,375	$	7,951	$	22,326
Short-term lease cost	405		—		405		1,215		—		1,215
Variable lease cost	1,009		—		1,009		2,041		—		2,041
Total lease cost	$	6,206	$	2,608	$	8,814	$	17,631	$	7,951	$	25,582

	As of and for the Nine Months Ended September 30, 2019
	Third Party Leases		Seabrook Lease		All Leases
Current lease liability	$	14,925	$	8,072	$	22,997
Long-term lease liability	$	83,417	$	52,272	$	135,689
Right-of-use asset	$	102,119	$	60,344	$	162,463
Operating cash flows for operating leases	$	17,990	7,969		$	25,959
Weighted average remaining lease term (years)	6		9		7
Weighted-average discount rate	3.9%		4.3%		4.1%

Rent expense was $11.8 million and $30.3 million, respectively, for three and nine months ended September 30, 2018 and was recognized in accordance with ASC 840.

Operating Leases – Lessor

We recognize fixed rental income on a straight-line basis over the life of the lease as revenue on our consolidated statements of income. Variable rental payments are recognized as revenue in the period in which the circumstances on which the variable lease payments are based occur.

Future minimum payments receivable under operating leases with initial terms greater than one year as of September 30, 2019 are estimated as follows (in thousands):

2019	$	9,624
2020	36,614
2021	36,560
2022	23,855
2023	7,663
Thereafter	15,631
Total	$	129,947

We recognized variable lease revenue of $15.4 million and $43.3 million, respectively, for the three and nine months ended September 30, 2019, primarily related to our condensate splitter in Corpus Christi, Texas.

At September 30, 2019, property, plant and equipment utilized by our customers in operating lease arrangements consisted of: $224.1 million of processing equipment; $72.9 million of storage tanks; $49.2 million of pipeline and station equipment; and $29.9 million of other assets. The processing equipment primarily relates to our condensate splitter.

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Sales-Type Lease - Lessor

We entered into a long-term throughput and deficiency agreement with a customer on a pipeline and related assets that we constructed in Texas and New Mexico, which contains minimum payment commitments. Our customer has the option to purchase this pipeline and related assets at the end of the lease term for a nominal amount. This agreement was previously accounted for as a direct-financing lease under ASC 840 and is now being accounted for as a sales-type lease under ASC 842. The net investment under this arrangement as of December 31, 2018 and September 30, 2019 was as follows (in thousands):

	December 31, 2018		September 30, 2019
Total minimum lease payments receivable	$	17,468	$	16,158
Less: Unearned income	3,422		2,961
Recorded net investment in sales-type lease	$	14,046	$	13,197

The net investment in sales-type leases was classified in the consolidated balance sheets as follows (in thousands):

	December 31, 2018		September 30, 2019
Other accounts receivable	$	1,138	$	1,177
Long-term receivables	12,908		12,020
Total	$	14,046	$	13,197

Future minimum payments receivable under this lease are $0.4 million in 2019, $1.7 million in 2020, $1.7 million in 2021, $1.7 million in 2022, $1.7 million in 2023 and $8.7 million thereafter.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. Debt

Long-term debt at December 31, 2018 and September 30, 2019 was as follows (in thousands):

	December 31, 2018			September 30, 2019
6.55% Notes due 2019	$	550,000		$	—
4.25% Notes due 2021	550,000			550,000
3.20% Notes due 2025	250,000			250,000
5.00% Notes due 2026	650,000			650,000
6.40% Notes due 2037	250,000			250,000
4.20% Notes due 2042	250,000			250,000
5.15% Notes due 2043	550,000			550,000
4.20% Notes due 2045	250,000			250,000
4.25% Notes due 2046	500,000			500,000
4.20% Notes due 2047	500,000			500,000
4.85% Notes due 2049	—			500,000
3.95% Notes due 2050	—			500,000
Face value of long-term debt	4,300,000			4,750,000
Unamortized debt issuance costs(1)	(27,070		)	(35,770		)
Net unamortized debt discount(1)	(2,927		)	(8,455		)
Net unamortized amount of gains from historical fair value hedges(1)	866			—
Long-term debt, net, including current portion	4,270,869			4,705,775
Less: Current portion of long-term debt, net	59,489			—
Long-term debt, net	$	4,211,380		$	4,705,775

(1) Debt issuance costs, note discounts and premiums and realized gains and losses of historical fair value hedges are being amortized or accreted to the applicable notes over the respective lives of those notes.

All of the instruments detailed in the table above are senior indebtedness.

2019 Debt Issuances

On August 19, 2019, we issued $500.0 million of 3.95% senior notes due 2050 in an underwritten public

offering. The notes were issued at 99.91% of par. Net proceeds from this offering were approximately $494.4 million after underwriting discounts and offering expenses. The net proceeds from this offering will be used for general partnership purposes, including expansion capital projects.

On January 18, 2019, we issued $500.0 million of 4.85% senior notes due 2049 in an underwritten public

offering. The notes were issued at 99.371% of par. Net proceeds from this offering were approximately $491.5 million after underwriting discounts and offering expenses. The net proceeds from this offering along with cash on hand were used to early redeem our $550.0 million of 6.55% senior notes due 2019 on February 11, 2019. In connection with this offering, we recognized $8.3 million of debt prepayment costs that were recorded as interest expense in our consolidated statements of income.

Other Debt

Revolving Credit Facilities. At September 30, 2019, the total borrowing capacity under our revolving credit facility maturing in May 2024 was $1.0 billion. Any borrowings outstanding under this facility are classified as long-term debt on our consolidated balance sheets. Borrowings under this facility are unsecured and bear interest at

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

LIBOR plus a spread ranging from 0.875% to 1.500% based on our credit ratings. Additionally, an unused commitment fee is assessed at a rate between 0.075% and 0.200% depending on our credit ratings. The unused commitment fee was 0.125% at September 30, 2019. Borrowings under this facility may be used for general partnership purposes, including capital expenditures. As of December 31, 2018 and September 30, 2019, there were no borrowings outstanding under this facility, with $6.8 million and $3.5 million, respectively, obligated for letters of credit. Amounts obligated for letters of credit are not reflected as debt on our consolidated balance sheets, but decrease our borrowing capacity under this facility.

We entered into a $500.0 million 364-day revolving credit facility, which matures in May 2020. Borrowings under this facility are unsecured and generally bear interest at LIBOR plus a spread ranging from 1.000% to 1.250% based on our credit ratings. Additionally, an unused commitment fee is assessed at a rate between 0.075% and 0.125%. The unused commitment fee was 0.100% at September 30, 2019. Borrowings under this facility may be used for general purposes, including capital expenditures. As of September 30, 2019, there were no borrowings outstanding under this facility.

Commercial Paper Program. We have a commercial paper program under which we may issue commercial paper notes in an amount up to the available capacity under our $1.0 billion revolving credit facility. The maturities of the commercial paper notes vary, but may not exceed 397 days from the date of issuance. Because the commercial paper we can issue is limited to amounts available under our revolving credit facility, amounts outstanding under the program are classified as long-term debt. The commercial paper notes are sold under customary terms in the commercial paper market and are issued at a discount from par, or alternatively, are sold at par and bear varying interest rates on a fixed or floating basis. The weighted-average interest rate for commercial paper borrowings based on the number of days outstanding was 2.3% for the year ended December 31, 2018 and 2.7% for the nine months ended September 30, 2019.

9. Derivative Financial Instruments

Interest Rate Derivatives

We periodically enter into interest rate derivatives to hedge the fair value of debt or hedge against variability in

interest rates. For interest rate cash flow hedges, we record the unrealized gains or losses as an adjustment to other comprehensive income. The realized gains and losses from our cash flow hedges are recognized into earnings as an adjustment to our periodic interest expense over the life of the related debt issuance. For fair value hedges on long-term debt, we record the unrealized gains or losses as an adjustment to long-term debt, and realized amounts as an adjustment to our periodic interest expense. Adjustments resulting from discontinued hedges continue to be recognized in accordance with their historic hedging relationships.

In third quarter 2019, upon issuance of our $500.0 million of 3.95% notes due 2050, we terminated and settled treasury lock agreements we had previously entered into to protect against the variability of interest payments on this anticipated debt issuance for a loss of $25.3 million, which was included in our statements of cash flows as a net payment on financial derivatives.  These agreements were accounted for as cash flow hedges. The loss was recorded to other comprehensive income (loss) and will be recognized into earnings as an adjustment to our periodic interest expense over the life of the associated notes.

In first quarter 2019, upon issuance of $500.0 million of 4.85% notes due 2049, we terminated and settled treasury lock agreements that we had previously entered into to protect against the variability of interest payments on this anticipated debt issuance for a loss of $8.0 million, which was included in our statements of cash flows as a net payment on financial derivatives. These agreements were accounted for as cash flow hedges. The loss was

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

recorded to other comprehensive income (loss) and will be recognized into earnings as an adjustment to our periodic interest expense over the life of the associated notes.

Commodity Derivatives

Our butane blending activities produce gasoline, and we can reasonably estimate the timing and quantities of sales of these products. We use a combination of exchange-traded commodities futures contracts and forward purchase and sale contracts to help manage commodity price changes and mitigate the risk of decline in the product margin realized from our butane blending activities. Further, certain of our other commercial operations generate petroleum products, and we also use futures contracts to hedge against price changes for some of these commodities.

Forward physical purchase and sale contracts that qualify for and are elected as normal purchases and sales are accounted for using traditional accrual accounting, whereby changes in the mark-to-market values of such contracts are not recognized in income; rather the revenues and expenses associated with such transactions are recognized during the period when commodities are physically delivered or received. Forward physical commodity contracts subject to this exception are evaluated for the probability of future delivery and are periodically tested once the forecasted period has passed to determine whether similar forward contracts are probable of physical delivery in the future.

We record the effective portion of the gains or losses for commodity-based contracts designated as fair value hedges as adjustments to the assets being hedged and the ineffective portions as well as amounts excluded from the assessment of hedge effectiveness as adjustments to other income or expense. We recognize the change in fair value of economic hedges that hedge against changes in the price of petroleum products that we expect to sell or purchase in the future currently in earnings as adjustments to product sales revenue, cost of product sales or operating expenses, as applicable.

Our open futures contracts at September 30, 2019 were as follows:

Type of Contract/Accounting Methodology	Product Represented by the Contract and Associated Barrels	Maturity Dates
Futures - Economic Hedges	4.5 million barrels of refined products and crude oil	Between October 2019 and April 2020
Futures - Economic Hedges	1.5 million barrels of butane and natural gasoline	Between October 2019 and April 2020

Energy Commodity Derivatives Contracts and Deposits Offsets

At September 30, 2019, we had made margin deposits of $21.8 million for our future contracts with our counterparties, which were recorded as current assets under energy commodity derivatives deposits on our consolidated balance sheets. At December 31, 2018, we held margin deposits of $37.3 million for our future contracts with our counterparties, which were recorded as current liabilities under energy commodity derivatives deposits on our consolidated balance sheets. We have the right to offset the combined fair values of our open futures contracts against our margin deposits under a master netting arrangement for each counterparty; however, we have elected to present the combined fair values of our open futures contracts separately from the related margin deposits on our consolidated balance sheets. Additionally, we have the right to offset the fair values of our futures contracts together for each counterparty, which we have elected to do, and we report the combined net balances on our consolidated balance sheets. A schedule of the derivative amounts we have offset and the deposit amounts we could offset under a master netting arrangement are provided below as of December 31, 2018 and September 30, 2019 (in thousands):

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Description	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts of Assets (Liabilities) Offset in the Consolidated Balance Sheets			Net Amounts of Assets (Liabilities) Presented in the Consolidated Balance Sheets		Margin Deposit Amounts Not Offset in the Consolidated Balance Sheets			Net Asset Amount(1)
As of 12/31/2018	$	62,166	$	(7,155	)	$	55,011	$	(37,328	)	$	17,683
As of 9/30/2019	$	16,978	$	(12,139	)	$	4,839	$	21,811		$	26,650

(1) Amount represents the maximum loss we would incur if all of our counterparties failed to perform on their derivative contracts.

Basis Derivative Agreement

During 2019, we entered into a basis derivative agreement with a joint venture co-owner’s affiliate, and, contemporaneously, that affiliate entered into an intrastate transportation services agreement with the joint venture. Settlements under the basis derivative agreement are determined based on the basis differential of crude oil prices at different market locations and a notional volume of 30,000 barrels per day. As a result, we account for this agreement as a derivative. The agreement will expire in early 2022. We recognize the changes in fair value of this agreement based on forward price curves for crude oil in West Texas and the Houston Gulf Coast in other operating income (expense) in our consolidated statements of income. The liability for this agreement at September 30, 2019 was $17.8 million.

Impact of Derivatives on Our Financial Statements

Comprehensive Income

The changes in derivative activity included in AOCL for the three and nine months ended September 30, 2018 and 2019 were as follows (in thousands):

 

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Derivative Losses Included in AOCL	2018			2019			2018			2019
Beginning balance	$	(25,165	)	$	(36,287	)	$	(33,755	)	$	(26,480	)
Net gain (loss) on cash flow hedges	6,852			(14,181		)	13,963			(25,216		)
Reclassification of net loss on cash flow hedges to income	740			699			2,219			1,927
Ending balance	$	(17,573	)	$	(49,769	)	$	(17,573	)	$	(49,769	)

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following is a summary of the effect on our consolidated statements of income for the three and nine months ended September 30, 2018 and 2019 of derivatives that were designated as cash flow hedges (in thousands):

	Interest Rate Contracts
	Amount of Gain (Loss) Recognized in AOCL on Derivatives		Location of Loss Reclassified from AOCL into  Income	Amount of Loss Reclassified from AOCL into Income
Three Months Ended September 30, 2018	$	6,852	Interest expense	$	(740	)

Three Months Ended September 30, 2019 $ (14,181 ) Interest expense $ (699 )

Nine Months Ended September 30, 2018 $ 13,963 Interest expense $ (2,219 )

Nine Months Ended September 30, 2019 $ (25,216 ) Interest expense $ (1,927 )

As of September 30, 2019, the net loss estimated to be classified to interest expense over the next twelve months from AOCL is approximately $3.2 million. This amount relates to the amortization of losses on interest rate contracts over the life of the related debt instruments.

The following table provides a summary of the effect on our consolidated statements of income for the three and nine months ended September 30, 2018 and 2019 of derivatives that were not designated as hedging instruments (in thousands):

		Amount of Gain (Loss) Recognized on Derivatives
		Three Months Ended						Nine Months Ended
	Location of Gain (Loss) Recognized on Derivatives	September 30,						September 30,
Derivative Instrument		2018			2019			2018			2019
Futures contracts	Product sales revenue	$	(24,354	)	$	17,626		$	(70,140	)	$	(41,504	)
Futures contracts	Cost of product sales	11,665			(5,581		)	16,058			(9,456		)
Basis derivative agreement	Other operating income (expense)	—			(3,910		)	—			(8,869		)
	Total	$	(12,689	)	$	8,135		$	(54,082	)	$	(59,829	)

The impact of the derivatives in the above table was reflected as cash from operations on our consolidated statements of cash flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Balance Sheets

The following table provides a summary of the fair value of derivatives, which are presented on a net basis in our consolidated balance sheets, that were designated as hedging instruments as of December 31, 2018 (in thousands). There were no balances outstanding at September 30, 2019.

	December 31, 2018
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Energy commodity derivatives contracts, net	$	462	Energy commodity derivatives contracts, net	$	—
Interest rate contracts	Other current assets	312		Other current liabilities	8,438
	Total	$	774	Total	$	8,438

The following tables provide a summary of the fair value of derivatives, which are presented on a net basis in our consolidated balance sheets, that were not designated as hedging instruments as of December 31, 2018 and September 30, 2019 (in thousands):

	December 31, 2018
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Energy commodity derivatives contracts, net	$	61,704	Energy commodity derivatives contracts, net	$	7,155
	September 30, 2019
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Energy commodity derivatives contracts, net	$	16,978	Energy commodity derivatives contracts, net	$	12,139
Basis derivative agreement	Other current assets	—		Other current liabilities	8,957
Basis derivative agreement	Other noncurrent assets	—		Other noncurrent liabilities	8,798
	Total	$	16,978	Total	$	29,894

10. Commitments and Contingencies

Butane Blending Patent Infringement Proceeding

On October 4, 2017, Sunoco Partners Marketing & Terminals L.P. (“Sunoco”) brought an action for patent infringement in the U.S. District Court for the District of Delaware alleging Magellan Midstream Partners, L.P. (“Magellan”) and Powder Springs Logistics, LLC (“Powder Springs”) have infringed patents relating to butane blending at the Powder Springs facility located in Powder Springs, Georgia. Sunoco has since submitted pleadings alleging that Magellan has also infringed various patents relating to butane blending at nine Magellan facilities, in addition to Powder Springs. Sunoco is seeking monetary damages, attorneys’ fees and a permanent injunction enjoining Magellan and Powder Springs from infringing the subject patents. We deny and are vigorously defending against all claims asserted by Sunoco. Although it is not possible to predict the ultimate outcome, we believe the ultimate resolution of this matter will not have a material adverse impact on our results of operations, financial position or cash flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Environmental Liabilities

Liabilities recognized for estimated environmental costs were $20.5 million and $16.6 million at December 31, 2018 and September 30, 2019, respectively. We have classified environmental liabilities as current or noncurrent based on management’s estimates regarding the timing of actual payments. Environmental expenses recognized as a result of changes in our environmental liabilities are generally included in operating expenses on our consolidated statements of income. Environmental expenses were $5.5 million and $0.8 million for the three months ended September 30, 2018 and 2019, respectively, and $10.8 million and $4.2 million for the nine months ended September 30, 2018 and 2019, respectively.

Environmental Receivables

Receivables from insurance carriers and other third parties related to environmental matters were $4.1 million at December 31, 2018, of which $2.4 million and $1.7 million were recorded to other accounts receivable and long-term receivables, respectively, on our consolidated balance sheets. Receivables from insurance carriers and other third parties related to environmental matters were $3.0 million at September 30, 2019, of which $1.4 million and $1.6 million were recorded to other accounts receivable and long-term receivables, respectively, on our consolidated balance sheets.

Other

We have entered into an agreement to guarantee our 50% pro rata share, up to $25.0 million, of obligations under Powder Springs’ credit facility. As of September 30, 2019, our consolidated balance sheets reflected a $0.4 million other current liability and a corresponding increase in our investment in non-controlled entities on our consolidated balance sheets to reflect the fair value of this guarantee.

We and the non-controlled entities in which we own an interest are a party to various other claims, legal actions and complaints. While the results cannot be predicted with certainty, management believes the ultimate resolution of these claims, legal actions and complaints after consideration of amounts accrued, insurance coverage or other indemnification arrangements will not have a material adverse effect on our results of operations, financial position or cash flows.

11. Long-Term Incentive Plan

The compensation committee of our general partner’s board of directors administers our long-term incentive plan (“LTIP”) covering certain of our employees and the independent directors of our general partner. The LTIP primarily consists of phantom units and permits the grant of awards covering an aggregate payout of 11.9 million of our limited partner units. The estimated units remaining available under the LTIP at September 30, 2019 total 1.6 million.

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Our equity-based incentive compensation expense was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2019		2018		2019
Performance-based awards	$	7,087	$	5,162	$	22,176	$	18,123
Time-based awards	846		1,611		2,436		4,454
Total	$	7,933	$	6,773	$	24,612	$	22,577
Allocation of LTIP expense on our consolidated statements of income:
G&A expense	$	7,867	$	6,704	$	24,412	$	22,377
Operating expense	66		69		200		200
Total	$	7,933	$	6,773	$	24,612	$	22,577

On February 1, 2019, 347,473 unit awards were granted pursuant to our LTIP. These awards included both performance-based and time-based awards and have a three-year vesting period that will end on December 31, 2021.

Basic and Diluted Net Income Per Limited Partner Unit

The difference between our actual limited partner units outstanding and our weighted-average number of limited partner units outstanding used to calculate basic net income per unit is due to the impact of: (i) the unit awards issued to non-employee directors and (ii) the weighted average effect of units actually issued during a period.  The difference between the weighted-average number of limited partner units outstanding used for basic and diluted net income per unit calculations on our consolidated statements of income is primarily due to the dilutive effect of unit awards associated with our LTIP that have not yet vested.

12. Partners’ Capital and Distributions

Partners’ Capital

In May 2017, we filed a prospectus supplement to the shelf registration statement for our continuous equity offering program (which we refer to as an at-the-market program, or “ATM”) pursuant to which we may issue up to $750.0 million of common units in amounts, at prices and on terms to be determined by market conditions at the time. The net proceeds from any sales under the ATM, after deducting the sales agents’ commissions and our offering expenses, will be used for general partnership purposes, including repayment of indebtedness or capital expenditures. No units have been issued pursuant to this program.

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table details the changes in the number of our limited partner units outstanding from December 31, 2018 through September 30, 2019:

Limited partner units outstanding on December 31, 2018	228,195,160
February 2019–Settlement of employee LTIP awards	199,792
During 2019–Other(a)	8,476
Limited partner units outstanding on September 30, 2019	228,403,428

(a) Limited partner units issued to settle the equity-based retainers paid to four independent directors of our general partner.

Distributions

Distributions we paid during 2018 and 2019 were as follows (in thousands, except per unit amounts):

 

Payment Date	Per Unit Cash Distribution Amount			Total Cash Distribution to Limited Partners
02/14/2018		$	0.9200		$	209,940
05/15/2018		0.9375			213,933
08/14/2018		0.9575			218,497
Through 09/30/2018		2.8150			642,370
11/14/2018		0.9775			223,061
Total		$	3.7925		$	865,431
02/14/2019		$	0.9975		$	227,832
05/15/2019		1.0050			229,545
08/14/2019		1.0125			231,258
Through 09/30/2019		3.0150			688,635
11/14/2019(a)		1.0200			232,971
Total		$	4.0350		$	921,606

(a) Our general partner’s board of directors declared this cash distribution in October 2019 to be paid on November 14, 2019 to unitholders of record at the close of business on November 7, 2019.

13. Fair Value

Fair Value Methods and Assumptions - Financial Assets and Liabilities.

We used the following methods and assumptions in estimating fair value of our financial assets and liabilities:

• Energy commodity derivatives contracts. These include exchange-traded futures contracts related to petroleum products. These contracts are carried at fair value on our consolidated balance sheets and are valued based on quoted prices in active markets. See Note 9 – Derivative Financial Instruments for further disclosures regarding these contracts.

• Interest rate contracts. These include forward-starting interest rate hedge agreements to protect against the risk of variability of interest payments on future debt. These contracts are carried at fair value on our consolidated balance sheets and are valued based on an assumed exchange, at the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

end of each period, in an orderly transaction with a participant in the market in which the financial instrument is traded. The exchange value was calculated using present value techniques on estimated future cash flows based on forward interest rate curves. See Note 9 – Derivative Financial Instruments for further disclosures regarding these contracts.

• Basis Derivative Agreement. During 2019, we entered into a basis derivative agreement with a joint venture co-owner’s affiliate, and, contemporaneously, that affiliate entered into an intrastate transportation services agreement with the joint venture. Settlements under the basis derivative agreement are determined based on the basis differential of crude oil prices at different market locations and a notional volume of 30,000 barrels per day (see Note 9 - Derivative Financial Instruments for further disclosures regarding this agreement). The fair value of this derivative was calculated based on observable market data inputs, including published commodity pricing data and market interest rates. The key inputs in the fair value calculation include the forward price curves for crude oil, the implied forward correlation in crude oil prices between West Texas and the Houston Gulf Coast, and the implied forward volatility for crude oil futures contracts.

• Long-term receivables. These primarily include payments receivable under a sales-type leasing arrangement and cost reimbursement payments receivable. These receivables were recorded at fair value on our consolidated balance sheets, using then-current market rates to estimate the present value of future cash flows.

• Guarantees. At December 31, 2018, these guarantees primarily included an indemnification agreement we entered into in connection with the partial sale of our interest in BridgeTex. This indemnification was recorded at fair value on our consolidated balance sheets upon initial recognition, using probability-weighted potential outcome scenarios to estimate our possible liability for specific events covered by this indemnification. In first quarter 2019, certain litigation subject to the indemnification agreement was settled, which resulted in our paying $5.0 million under the indemnification agreement and recognizing the reduction of the remaining $11.0 million liability as an additional gain on disposition of assets on our consolidated statements of income.

• Debt. The fair value of our publicly traded notes was based on the prices of those notes at December 31, 2018 and September 30, 2019; however, where recent observable market trades were not available, prices were determined using adjustments to the last traded value for that debt issuance or by adjustments to the prices of similar debt instruments of peer entities that are actively traded. The carrying amount of borrowings, if any, under our revolving credit facility and our commercial paper program approximates fair value due to the frequent repricing of these obligations.

Fair Value Measurements - Financial Assets and Liabilities

The following tables summarize the carrying amounts, fair values and fair value measurements recorded or disclosed as of December 31, 2018 and September 30, 2019 based on the three levels established by ASC 820, Fair Value Measurements and Disclosures (in thousands):

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	December 31, 2018
Assets (Liabilities)							Fair Value Measurements using:
	Carrying Amount			Fair Value			Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Energy commodity derivatives contracts	$	55,011		$	55,011		$	55,011	$	—		$	—
Interest rate contracts	$	(8,126	)	$	(8,126	)	$	—	$	(8,126	)	$	—
Long-term receivables	$	20,844		$	20,844		$	—	$	—		$	20,844
Guarantees	$	(16,409	)	$	(16,409	)	$	—	$	—		$	(16,409	)
Debt	$	(4,270,869	)	$	(4,224,373	)	$	—	$	(4,224,373	)	$	—

	September 30, 2019
Assets (Liabilities)							Fair Value Measurements using:
	Carrying Amount			Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Energy commodity derivatives contracts	$	4,839		$	4,839		$	4,839	$	—		$	—
Basis derivative agreement	$	(17,755	)	$	(17,755	)	$	—	$	(17,755	)	$	—
Long-term receivables	$	20,789		$	20,789		$	—	$	—		$	20,789
Guarantees	$	(408	)	$	(408	)	$	—	$	—		$	(408	)
Debt	$	(4,705,775	)	$	(5,185,750	)	$	—	$	(5,185,750	)	$	—

14. Related Party Transactions

Stacy Methvin is an independent member of our general partner’s board of directors and is also a director of one of our customers.  We received tariff and other ancillary revenue from this customer of $6.0 million and $7.1 million for the three months ended September 30, 2018 and 2019, respectively, and $14.4 million and $21.4 million for the nine months ended September 30, 2018 and 2019, respectively. We recorded receivables of $1.9 million and $2.7 million from this customer at December 31, 2018 and September 30, 2019, respectively.  The tariff revenue we recognized from this customer was in the normal course of business, with rates determined in accordance with published tariffs.  We also made a one-time payment of $0.2 million in second quarter 2019 to a subsidiary of this customer for an easement related to one of our expansion projects.

See Note 4 – Investments in Non-Controlled Entities and Note 7 – Leases for details of transactions with our joint ventures.

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Subsequent Events

Recognizable events

No recognizable events occurred subsequent to September 30, 2019.

Non-recognizable events

Cash Distribution. In October 2019, our general partner’s board of directors declared a quarterly cash distribution of $1.02 per unit for the period of July 1, 2019 through September 30, 2019. This quarterly cash distribution will be paid on November 14, 2019 to unitholders of record on November 7, 2019. The total cash distributions expected to be paid under this declaration are approximately $233.0 million.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

We are a publicly traded limited partnership principally engaged in the transportation, storage and distribution of refined petroleum products and crude oil. As of September 30, 2019, our asset portfolio consisted of:

• our refined products segment, comprised of our approximately 9,700-mile refined products pipeline system with 53 terminals as well as 25 independent terminals not connected to our pipeline system and our 1,100-mile ammonia pipeline system;

• our crude oil segment, comprised of approximately 2,200 miles of crude oil pipelines, a condensate splitter and 33 million barrels of aggregate storage capacity, of which 21 million barrels are used for contract storage. Approximately 1,000 miles of these pipelines, the condensate splitter and 28 million barrels of this storage capacity (including 19 million barrels used for contract storage) are wholly-owned, with the remainder owned through joint ventures; and

• our marine storage segment, consisting of six marine terminals located along coastal waterways with an aggregate storage capacity of approximately 27 million barrels. Five of these terminals and approximately 25 million barrels of this storage capacity are wholly-owned, with the remainder owned through joint ventures.

The following discussion provides an analysis of the results for each of our operating segments, an overview of our liquidity and capital resources and other items related to our partnership. The following discussion and analysis should be read in conjunction with (i) our accompanying interim consolidated financial statements and related notes and (ii) our consolidated financial statements, related notes and management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Recent Developments

Cash Distribution. In October 2019, our general partner’s board of directors declared a quarterly cash distribution of $1.02 per unit for the period of July 1, 2019 through September 30, 2019. This quarterly cash distribution will be paid on November 14, 2019 to unitholders of record on November 7, 2019. The total cash distributions expected to be paid under this declaration are approximately $233.0 million.

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Results of Operations

We believe that investors benefit from having access to the same financial measures utilized by management. Operating margin, which is presented in the following tables, is an important measure used by management to evaluate the economic performance of our core operations. Operating margin is not a generally accepted accounting principles (“GAAP”) measure, but the components of operating margin are computed using amounts that are determined in accordance with GAAP. A reconciliation of operating margin to operating profit, which is its nearest comparable GAAP financial measure, is included in the following tables. Operating profit includes expense items, such as depreciation, amortization and impairment expense and general and administrative (“G&A”) expense, which management does not focus on when evaluating the core profitability of our separate operating segments. Additionally, product margin, which management primarily uses to evaluate the profitability of our commodity-related activities, is provided in these tables. Product margin is a non-GAAP measure but its components of product sales revenue and cost of product sales are determined in accordance with GAAP. Our butane blending, fractionation and other commodity-related activities generate significant revenue. However, we believe the product margin from these activities, which takes into account the related cost of product sales, better represents its importance to our results of operations.

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Three Months Ended September 30, 2018 compared to Three Months Ended September 30, 2019

	Three Months Ended September 30,						Variance Favorable  (Unfavorable)
	2018			2019			$ Change			% Change
Financial Highlights ($ in millions, except operating statistics)
Transportation and terminals revenue:
Refined products	$	300.0		$	310.5		$	10.5		4
Crude oil	145.1			150.9			5.8			4
Marine storage	44.6			46.6			2.0			4
Intersegment eliminations	(0.9		)	(1.6		)	(0.7		)	(78)
Total transportation and terminals revenue	488.8			506.4			17.6			4
Affiliate management fee revenue	4.8			5.3			0.5			10
Operating expenses:
Refined products	112.3			111.8			0.5			—
Crude oil	45.2			42.6			2.6			6
Marine storage	17.1			17.9			(0.8		)	(5)
Intersegment eliminations	(2.5		)	(3.0		)	0.5			20
Total operating expenses	172.1			169.3			2.8			2
Product margin:
Product sales revenue	144.4			144.8			0.4			—
Cost of product sales	120.6			108.7			11.9			10
Product margin	23.8			36.1			12.3			52
Other operating income (expense)	—			(0.4		)	(0.4		)	n/a
Earnings of non-controlled entities	53.8			50.1			(3.7		)	(7)
Operating margin	399.1			428.2			29.1			7
Depreciation, amortization and impairment expense	56.2			56.6			(0.4		)	(1)
G&A expense	47.4			51.1			(3.7		)	(8)
Operating profit	295.5			320.5			25.0			8
Interest expense (net of interest income and interest capitalized)	51.5			47.3			4.2			8
Gain on disposition of assets	(353.8		)	(2.6		)	(351.2		)	(99)
Other (income) expense	1.7			2.6			(0.9		)	(53)
Income before provision for income taxes	596.1			273.2			(322.9		)	(54)
Provision for income taxes	1.5			0.2			1.3			87
Net income	$	594.6		$	273.0		$	(321.6	)	(54)
Operating Statistics:
Refined products:
Transportation revenue per barrel shipped	$	1.600		$	1.618
Volume shipped (million barrels):
Gasoline	73.4			74.5
Distillates	45.6			47.0
Aviation fuel	8.1			11.1
Liquefied petroleum gases	4.4			3.8
Total volume shipped	131.5			136.4
Crude oil:
Magellan 100%-owned assets:
Transportation revenue per barrel shipped	$	1.266		$	0.935
Volume shipped (million barrels)	62.8			79.2
Crude oil terminal average utilization (million barrels per month)	16.0			20.5
Select joint venture pipelines:
BridgeTex - volume shipped (million barrels)(1)	36.5			40.8
Saddlehorn - volume shipped (million barrels)(2)	6.7			17.0
Marine storage:
Marine terminal average utilization (million barrels per month)	22.6			23.6

(1) These volumes reflect the total shipments for the BridgeTex pipeline, which was owned 50% by us through September 28, 2018 and 30% thereafter.

(2) These volumes reflect the total shipments for the Saddlehorn pipeline, which is owned 40% by us.

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Transportation and terminals revenue increased $17.6 million resulting from:

• an increase in refined products revenue of $10.5 million primarily due to higher transportation volumes and a slightly higher average rate per barrel. Volumes increased due to continued solid demand for refined products coupled with incremental shipments associated with a recent connection near El Paso, Texas and our new East Houston-to-Hearne pipeline segment. The average rate per barrel in the current period was favorably impacted by the mid-year tariff adjustment, partially offset by more short-haul movements that ship at lower rates;

• an increase in crude oil revenue of $5.8 million primarily due to higher revenues from system storage that we provide to our customers in conjunction with new tanks at Cushing, Oklahoma and Corpus Christi, Texas as well as capacity we lease from the Seabrook Logistics, LLC (“Seabrook”) export facility. Higher transportation volumes on our Houston distribution system primarily due to the increased shipments to Seabrook were more than offset by lower transportation revenue on our Longhorn pipeline as a result of lower average rates following contract renewals in late 2018. Overall, the average crude oil transportation rate per barrel decreased between periods due to significantly higher volumes on our Houston distribution system, which move at a lower rate, and the lower average Longhorn rates; and

• an increase in marine storage revenue of $2.0 million primarily due to higher storage availability related to timing of maintenance work and throughput fees from new dock capacity at our Galena Park, Texas facility.

Operating expenses decreased by $2.8 million primarily resulting from:

• a decrease in refined products expenses of $0.5 million primarily due to lower spending for asset integrity as a result of maintenance work timing, partially offset by higher property taxes in part due to a favorable adjustment in the 2018 period;

• a decrease in crude oil expenses of $2.6 million primarily due to lower environmental accruals and more favorable product overages (which reduce operating expenses), partially offset by fees we paid to Seabrook for leased storage capacity and dock services; and

• an increase in marine storage expenses of $0.8 million primarily due to additional asset integrity spending and higher property taxes.

Product margin increased $12.3 million primarily due to recognition of higher gains on futures contracts and lower costs on butane blending product sales.

Other operating expense of $0.4 million in third quarter 2019 primarily relates to unrealized fair value adjustments associated with a basis derivative agreement, net of realized amounts received under this agreement, largely offset by insurance settlement proceeds related to Hurricane Harvey.

Earnings of non-controlled entities decreased $3.7 million primarily due to lower earnings from BridgeTex Pipeline Company, LLC (“BridgeTex”) following the sale of a portion of our investment, representing a 20% interest, in late 2018 partially offset by higher earnings from Saddlehorn Pipeline Company, LLC (“Saddlehorn”) due to new commitments received in connection with the expansion of the pipeline as well as increased volumes as a result of incentive tariff arrangements.

Depreciation, amortization and impairment expense increased $0.4 million primarily due to an increase in asset retirements.

G&A expense increased $3.7 million primarily due to higher compensation costs resulting from an increase in employee headcount.

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Interest expense, net of interest income and interest capitalized, decreased $4.2 million. Our average outstanding debt decreased from $4.7 billion in third quarter 2018 to $4.6 billion in third quarter 2019, and our weighted-average interest rate of 4.6% in third quarter 2019 was slightly lower than third quarter 2018.

Gain on disposition of assets was $351.2 million unfavorable in third quarter 2019 primarily due to the gain we recognized in third quarter 2018 on the sale of a portion of our interest in BridgeTex.

Other expense was $0.9 million unfavorable primarily due to higher pension settlement costs in the current quarter.

Provision for income taxes was $1.3 million favorable primarily due to a reduction of deferred tax accruals in the current period.

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Nine Months Ended September 30, 2018 compared to Nine Months Ended September 30, 2019

	Nine Months Ended September 30,						Variance Favorable  (Unfavorable)
	2018			2019			$ Change			% Change
Financial Highlights ($ in millions, except operating statistics)
Transportation and terminals revenue:
Refined products	$	851.5		$	883.7		$	32.2		4
Crude oil	409.3			454.1			44.8			11
Marine storage	134.9			139.7			4.8			4
Intersegment eliminations	(2.7		)	(3.9		)	(1.2		)	(44)
Total transportation and terminals revenue	1,393.0			1,473.6			80.6			6
Affiliate management fee revenue	15.1			15.8			0.7			5
Operating expenses:
Refined products	319.7			317.3			2.4			1
Crude oil	110.0			123.6			(13.6		)	(12)
Marine storage	52.8			51.4			1.4			3
Intersegment eliminations	(7.2		)	(8.0		)	0.8			11
Total operating expenses	475.3			484.3			(9.0		)	(2)
Product margin:
Product sales revenue	552.8			497.8			(55.0		)	(10)
Cost of product sales	473.8			430.7			43.1			9
Product margin	79.0			67.1			(11.9		)	(15)
Other operating income (expense)	—			1.5			1.5			n/a
Earnings of non-controlled entities	130.8			122.2			(8.6		)	(7)
Operating margin	1,142.6			1,195.9			53.3			5
Depreciation, amortization and impairment expense	161.7			181.0			(19.3		)	(12)
G&A expense	147.2			149.5			(2.3		)	(2)
Operating profit	833.7			865.4			31.7			4
Interest expense (net of interest income and interest capitalized)	153.7			148.3			5.4			4
Gain on disposition of assets	(353.8		)	(29.0		)	(324.8		)	(92)
Other expense	10.3			9.2			1.1			11
Income before provision for income taxes	1,023.5			736.9			(286.6		)	(28)
Provision for income taxes	3.6			2.5			1.1			31
Net income	$	1,019.9		$	734.4		$	(285.5	)	(28)
Operating Statistics:
Refined products:
Transportation revenue per barrel shipped	$	1.524		$	1.600
Volume shipped (million barrels):
Gasoline	219.0			207.4
Distillates	132.7			138.8
Aviation fuel	21.3			29.8
Liquefied petroleum gases	10.4			8.9
Total volume shipped	383.4			384.9
Crude oil:
Magellan 100%-owned assets:
Transportation revenue per barrel shipped	$	1.325		$	0.952
Volume shipped (million barrels)	168.4			239.1
Crude oil terminal average utilization (million barrels per month)	16.1			20.3
Select joint venture pipelines:
BridgeTex - volume shipped (million barrels)(1)	100.0			117.3
Saddlehorn - volume shipped (million barrels)(2)	18.5			39.4
Marine storage:
Marine terminal average utilization (million barrels per month)	22.6			23.8

(1) These volumes reflect the total shipments for the BridgeTex pipeline, which was owned 50% by us through September 28, 2018 and 30% thereafter.

(2) These volumes reflect the total shipments for the Saddlehorn pipeline, which is owned 40% by us.

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Transportation and terminals revenue increased $80.6 million resulting from:

• an increase in refined products revenue of $32.2 million primarily due to a higher average transportation rate per barrel. The average rate per barrel in the current period was favorably impacted by the 2018 and 2019 mid-year tariff adjustments, partially offset by more short-haul movements that ship at lower rates. Volume increased slightly between periods as additional shipments associated with a recent connection near El Paso and our new East Houston-to-Hearne pipeline segment were mainly offset by less short-haul movements on the South Texas pipelines, with these supply-driven barrels causing the fluctuations in product mix transported as well;

• an increase in crude oil revenue of $44.8 million primarily due to higher revenues from system storage that we provide to our customers in conjunction with new tanks at Cushing and Corpus Christi as well as capacity we lease from the Seabrook export facility. Higher transportation volumes as a result of the favorable pricing differential between Midland and Houston and incremental shipments to Seabrook were partially offset by lower transportation revenue on our Longhorn pipeline as a result of lower average rates following long-term contract renewals in late 2018. Overall, the average crude oil transportation rate per barrel decreased between periods due to significantly higher volumes on our Houston distribution system, which move at a lower rate, and the lower average Longhorn rates; and

• an increase in marine storage revenue of $4.8 million primarily due to higher storage availability related to timing of maintenance work and additional fees from new dock capacity at our Galena Park facility.

Operating expenses increased by $9.0 million primarily resulting from:

• a decrease in refined products expenses of $2.4 million primarily due to a pension valuation correction that negatively impacted 2018 results as well as lower environmental accruals and spending for asset integrity, partially offset by higher property taxes and less favorable product overages (which reduce operating expenses);

• an increase in crude oil expenses of $13.6 million primarily due to fees we paid to Seabrook for leased storage capacity and dock services; and

• a decrease in marine storage expenses of $1.4 million primarily due to demolition costs in 2018 in connection with the construction of a new dock, partially offset by higher property taxes.

Product margin decreased $11.9 million primarily due to recognition of losses on futures contracts in 2019 compared to gains in 2018, partially offset by increased butane blending margins on product sales.

Other operating income of $1.5 million relates to insurance proceeds received in 2019 related to Hurricane Harvey, partially offset by unrealized fair value adjustments associated with a basis derivative agreement net of realized amounts received under this agreement.

Earnings of non-controlled entities decreased $8.6 million primarily due to lower earnings from BridgeTex following the sale of a portion of our investment, representing a 20% interest, in late 2018 partially offset by higher earnings from Saddlehorn due to increased volume from a contractual step-up in committed shipments in September 2018, new commitments received in connection with the expansion of the pipeline as well as recently implemented incentive tariff arrangements and higher earnings from Seabrook due to the initiation of export capabilities in August 2018.

Depreciation, amortization and impairment expense increased $19.3 million primarily due to the commencement of depreciation on projects recently placed into service and an increase in asset retirements.

G&A expense was $2.3 million unfavorable primarily due to higher compensation costs resulting from an increase in employee headcount.

Interest expense, net of interest income and interest capitalized, decreased $5.4 million primarily due to lower outstanding debt and a lower weighted average interest rate, partially offset by $8.3 million of debt prepayment costs

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in first quarter 2019 related to the early extinguishment of our 6.55% notes that were due July 2019. Our average outstanding debt decreased from $4.6 billion in 2018 to $4.5 billion in 2019, and our weighted-average interest rate decreased from 4.7% in 2018 to 4.6% in 2019.

Gain on disposition of assets was $324.8 million unfavorable in 2019. In 2019, we recognized a deferred gain of $11.0 million related to the 2018 sale of our investment in BridgeTex, $12.7 million related to our discontinued Delaware Basin pipeline construction project that was subsequently sold to a third party and $5.3 million resulting from the sale of an inactive terminal along our refined products pipeline system. In 2018, we recognized a $353.8 million gain on the sale of a portion of our interest in BridgeTex.

Other expense was $1.1 million favorable as 2018 included the impact of a pension valuation correction.

Provision for income taxes was $1.1 million favorable primarily due to a reduction of deferred tax accruals in the current year.

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Distributable Cash Flow

We calculate the non-GAAP measures of distributable cash flow (“DCF”) and adjusted EBITDA in the table below. Management uses DCF as a basis for recommending to our general partner’s board of directors the amount of cash distributions to be paid to our limited partners each period. Management also uses DCF as a basis for determining the payouts for the performance-based awards issued under our equity-based compensation plan. Adjusted EBITDA is an important measure that we and the investment community use to assess the financial results of an entity. We believe that investors benefit from having access to the same financial measures utilized by management for these evaluations. A reconciliation of DCF and adjusted EBITDA for the nine months ended September 30, 2018 and 2019 to net income, which is its nearest comparable GAAP financial measure, follows (in millions):

	Nine Months Ended September 30,						Increase (Decrease)
	2018			2019
Net income	$	1,019.9		$	734.4		$	(285.5	)
Interest expense, net	153.7			148.3			(5.4		)
Depreciation, amortization and impairment(1)	168.0			176.9			8.9
Equity-based incentive compensation(2)	15.3			12.8			(2.5		)
Gain on disposition of assets(3)	(351.2		)	(16.3		)	334.9
Commodity-related adjustments:
Derivative (gains) losses recognized in the period associated with future transactions(4)	33.9			13.7			(20.2		)
Derivative gains (losses) recognized in previous periods associated with transactions completed in the period(4)	(38.9		)	71.2			110.1
Inventory valuation adjustments(5)	0.2			(9.7		)	(9.9		)
Total commodity-related adjustments	(4.8		)	75.2			80.0
Distributions from operations of non-controlled entities in excess of earnings	17.1			15.9			(1.2		)
Other(6)	3.7			—			(3.7		)
Adjusted EBITDA	1,021.7			1,147.2			125.5
Interest expense, net, excluding debt issuance cost amortization(7)	(151.3		)	(137.5		)	13.8
Maintenance capital(8)	(63.1		)	(70.1		)	(7.0		)
DCF	$	807.3		$	939.6		$	132.3

(1) Prior year amounts have been reclassified to conform with the current year’s presentation. Depreciation, amortization and impairment expense is excluded from DCF to the extent it represents a non-cash expense.

(2) Because we intend to satisfy vesting of unit awards under our equity-based long-term incentive compensation plan with the issuance of limited partner units, expenses related to this plan generally are deemed non-cash and added back for DCF purposes. The amounts above have been reduced by $9.3 million and $9.8 million for 2018 and 2019, respectively, for cash payments associated with the plan, which are primarily related to tax withholdings.

(3) Gains on disposition of assets are excluded from DCF to the extent they are not related to our ongoing operations. The 2019 period includes a $12.7 million gain on the sale of residual assets related to the development of expansion projects which are considered ongoing in nature, and as such are included in DCF. The 2018 period includes the portion of the gain recognized from the sale of our interest in BridgeTex that is not related to our ongoing operations.

(4) Certain derivatives have not been designated as hedges for accounting purposes and the mark-to-market changes of these derivatives are recognized currently in net income.  We exclude the net impact of these derivatives from our determination of DCF until the transactions are settled and, where applicable, the related products are sold.  In the period in which these transactions are settled and any related products are sold, the net impact of the derivatives is included in DCF.

(5) We adjust DCF for lower of average cost or net realizable value adjustments related to inventory and firm purchase commitments as well as market valuation of short positions recognized each period as these are non-cash items. In subsequent periods when we physically sell or purchase the related products, we adjust DCF for the valuation adjustments previously recognized.

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(6) Other adjustments in 2018 include a $3.7 million adjustment recorded to partners’ capital as required by our adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers. The amount represents cash that we had previously received for deficiency payments, but did not yet recognize in net income under the previous revenue recognition standard.

(7) Interest expense in 2019 includes $8.3 million of debt prepayment costs which are excluded from DCF as they are financing activities and are not related to our ongoing operations.

(8) Maintenance capital expenditures maintain our existing assets and do not generate incremental DCF (i.e. incremental returns to our unitholders). For this reason, we deduct maintenance capital expenditures to determine DCF.

Liquidity and Capital Resources

Cash Flows and Capital Expenditures

Operating Activities. Net cash provided by operating activities was $863.8 million and $922.6 million for the nine months ended September 30, 2018 and 2019, respectively. The $58.8 million increase in 2019 was due to adjustments for non-cash items and changes in our working capital, partially offset by lower net income as previously described.

Investing Activities. Net cash provided by investing activities for the nine months ended September 30, 2018 was $101.4 million and net cash used by investing activities for the nine months ended September 30, 2019 was $734.7 million. During the 2019 period, we incurred $775.1 million for capital expenditures, which included $70.1 million for maintenance capital, $617.1 million for our expansion capital projects and $87.9 million for undivided joint interest projects for which cash was received from a third party. Additionally, we contributed net capital of $150.6 million in conjunction with our joint ventures, which we account for as investments in non-controlled entities, of which $145.6 million related to capital projects. During the 2018 period, we sold a 20% interest in BridgeTex for cash proceeds of $578.5 million. We also incurred $375.6 million for capital expenditures, which included $63.1 million for maintenance capital, $276.1 million for our expansion capital projects and $36.4 million for undivided joint interest projects for which cash was received from a third party. Additionally, we contributed capital of $147.0 million in conjunction with our joint venture capital projects.

Financing Activities. Net cash used by financing activities for the nine months ended September 30, 2018 and 2019 was $881.1 million and $305.6 million, respectively. During the 2019 period, we paid cash distributions of $688.6 million to our unitholders. Additionally, we received net proceeds of $996.4 million from borrowings under long-term notes, which were used to repay our $550.0 million of 6.55% notes due 2019 and outstanding commercial paper borrowings at that time. Also, in January 2019, our equity-based incentive compensation awards that vested December 31, 2018 were settled by issuing 208,268 limited partner units and distributing those units to the long-term incentive plan (“LTIP”) participants, resulting in payments primarily associated with tax withholdings of $9.8 million. During the 2018 period, we paid cash distributions of $642.4 million to our unitholders and repaid our $250.0 million of 6.40% notes due 2018. Also, in January 2018, our equity-based incentive compensation awards that vested December 31, 2017 were settled by issuing 168,913 limited partner units and distributing those units to the LTIP participants, resulting in payments primarily associated with tax withholdings of $9.3 million.

The quarterly distribution amount related to our third quarter 2019 financial results (to be paid in fourth quarter 2019) is $1.02 per unit.  If we are able to meet management’s targeted distribution growth of 5% for 2019 and the number of outstanding limited partner units remains at 228.4 million, total cash distributions of approximately $928 million will be paid to our unitholders related to 2019 earnings. Management believes we will have sufficient DCF to fund these distributions.

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Capital Requirements

Our businesses require continual investments to maintain, upgrade or enhance existing operations and to ensure compliance with safety and environmental regulations. Capital spending consists primarily of:

• Maintenance capital expenditures. These expenditures include costs required to maintain equipment reliability and safety and to address environmental or other regulatory requirements rather than to generate incremental DCF; and

• Expansion capital expenditures. These expenditures are undertaken primarily to generate incremental DCF and include costs to acquire additional assets to grow our business and to expand or upgrade our existing facilities, which we refer to as organic growth projects. Organic growth projects include, for example, capital expenditures that increase storage or throughput volumes or develop pipeline connections to new supply sources.

For the nine months ended September 30, 2019, our maintenance capital spending was $70.1 million. For 2019, we expect to spend approximately $95 million on maintenance capital.

During the first nine months of 2019, we spent $617.1 million for our expansion capital projects and contributed $145.6 million for capital projects in conjunction with our joint ventures. Based on the progress of expansion projects already underway, we expect to spend approximately $1.0 billion in 2019 and $400 million in 2020 to complete our current projects.

Liquidity

Cash generated from operations is our primary source of liquidity for funding debt service, maintenance capital expenditures and quarterly distributions to our unitholders. Additional liquidity for other purposes, such as expansion capital expenditures and debt repayments, is available through borrowings under our commercial paper program and revolving credit facility, as well as from other borrowings or issuances of debt or limited partner units (see Note 8 – Debt and Note 12 – Partners’ Capital and Distributions of the consolidated financial statements included in Item 1 of Part I of this report for detail of our borrowings and changes in partners’ capital). If capital markets do not permit us to issue additional debt and equity securities, our business may be adversely affected, and we may not be able to acquire additional assets and businesses, fund organic growth projects or continue paying cash distributions at the current level.

Off-Balance Sheet Arrangements

None.

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Environmental

Our operations are subject to federal, state and local environmental laws and regulations. We have accrued liabilities for estimated costs at our facilities and properties. We record liabilities when environmental costs are probable and can be reasonably estimated. The determination of amounts recorded for environmental liabilities involves significant judgments and assumptions by management. Due to the inherent uncertainties involved in determining environmental liabilities, it is reasonably possible that the actual amounts required to extinguish these liabilities could be materially different from those we have recognized.

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Other Items

Executive Officer Retirements and Promotions. Larry J. Davied, Senior Vice President of Technical Services, retired in September 2019 after 26 years of service with us or our predecessors. Michael C. Pearson has been elected by our general partner’s board of directors to succeed Mr. Davied in this position. Before his promotion, Mr. Pearson was the Vice President of Asset Integrity and has been with us since our inception.

Saddlehorn Pipeline Expansion. In August 2019, Saddlehorn announced the expansion of its pipeline capacity by a total of 100 thousand barrels per day (“bpd”) to a new total capacity of approximately 290 thousand bpd. The higher capacity is expected to be available in late 2020 following the addition of incremental pumping and storage capabilities. Increases to equity earnings as a result of higher capacity will be partially offset by lower tariff rates negotiated for new committed volumes. In conjunction with the increased volume commitments, Noble Midstream Partners LP (“NBLX”), through its affiliate Black Diamond Gathering LLC, has an option to buy up to a 20% ownership interest in Saddlehorn. If the option is exercised, we and one of our joint venture partners, an affiliate of Plains All American Pipeline, L.P., would each sell up to a 10% interest in Saddlehorn to NBLX.

Crude Oil Revenues. The revenues generated by our crude oil assets partially depend upon the difference in commodity prices between different markets. When price differentials between origin and destination points on our crude oil pipelines are lower than our uncommitted (or spot) tariff rates, it is generally uneconomical for customers without contractual obligations to ship. We have benefited from favorable price differentials in recent periods, as the pricing differential between Midland and Houston has generally been above our spot rates, encouraging high utilization of our crude oil transportation and dock assets. However, pricing differentials can be volatile, and the differential between Midland and Houston has recently decreased, primarily due to the addition of new crude oil pipeline capacity in the region. As a result, we expect lower volumes on our crude oil assets at our spot rates. In addition, customers will likely be less willing to make term commitments for our crude oil services, and the rates at which customers will be willing to pay for both term commitments and uncommitted capacity will decrease from the levels we experienced previously. Due to these reduced volumes and lower rates, we expect crude oil revenues from our wholly-owned and joint venture crude oil assets to decrease. To optimize utilization of our crude oil assets, we have developed new tariff arrangements that make our services more economical for our shippers. In addition, we have initiated crude oil marketing activities to facilitate intrastate shipments on our Texas assets.

Pipeline Tariff Changes. The Federal Energy Regulatory Commission (“FERC”) regulates the rates charged on interstate common carrier pipelines primarily through an indexing methodology, which establishes the maximum amount by which tariff rates can be adjusted each year. Approximately 40% of our refined products tariffs are subject to this indexing methodology. The remaining 60% of our refined products tariffs are either subject to regulations by the states in which we operate or are approved for market-based rates by the FERC, and in both cases these rates can be adjusted at our discretion based on market factors. The current FERC-approved indexing method is the annual change in the producer price index for finished goods plus 1.23%. Based on this indexing methodology, we increased virtually all of our refined products pipeline rates by approximately 4.3% on July 1, 2019. Most of the tariffs on our crude oil pipelines are established at negotiated rates that generally provide for annual adjustments in line with changes in the FERC index, subject to certain modifications. We also increased the rates on the majority of our crude oil pipelines by approximately 4% in July 2019.

Collective Bargaining Agreement. Certain of our employees assigned to our refined products segment are represented by the United Steel Workers (“USW”) and are covered by a collective bargaining agreement. In August 2019, a new long-term agreement with the USW was ratified effective February 1, 2019 through January 31, 2022.

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Commodity Derivative Agreements. Certain of the business activities in which we engage result in our owning various commodities, which exposes us to commodity price risk. We use forward physical commodity contracts and exchange-traded futures contracts to help manage this commodity price risk. We use forward physical contracts to purchase butane and sell refined products. We account for these forward physical contracts as normal purchase and sale contracts, using traditional accrual accounting.  We use futures contracts to hedge against changes in prices of petroleum products that we expect to sell or purchase in future periods. We use and account for those futures contracts that qualify for hedge accounting treatment as either cash flow or fair value hedges, and we use and account for those futures contracts that do not qualify for hedge accounting treatment as economic hedges.

As of September 30, 2019, our open derivative contracts and the impact of the derivatives we settled during the period were comprised of futures contracts used to hedge sales and purchases of refined products, crude oil and butane related to our butane blending and fractionation activities, tender deductions and product overages. These contracts were accounted for as economic hedges, with the change in fair value of contracts that hedge future sales recorded to product sales, and the change in fair value of contracts that hedge future purchases recorded to cost of product sales.

For further information regarding the quantities of refined products and crude oil hedged at September 30, 2019 and the fair value of open hedge contracts at that date, please see Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The following tables provide a summary of the impacts of the mark-to-market gains and losses associated with these futures contracts on our results of operations for the respective periods presented (in millions): 

	Nine Months Ended September 30, 2018
	Product Sales Revenue			Cost of Product Sales			Net Impact on Net Income
Gains (losses) recorded on open futures contracts during the period	$	(51.7	)	$	20.8		$	(30.9	)
Losses recognized on settled futures contracts during the period	(18.4		)	(4.7		)	(23.1		)
Net impact of futures contracts	$	(70.1	)	$	16.1		$	(54.0	)

	Nine Months Ended September 30, 2019
	Product Sales Revenue			Cost of Product Sales			Net Impact on Net Income
Gains (losses) recorded on open futures contracts during the period	$	16.0		$	(11.2	)	$	4.8
Gains (losses) recognized on settled futures contracts during the period	(57.5		)	1.7			(55.8		)
Net impact of futures contracts	$	(41.5	)	$	(9.5	)	$	(51.0	)

Related Party Transactions. See Note 14 – Related Party Transactions in Item 1 of Part I of this report for detail of our related party transactions.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We may be exposed to market risk through changes in commodity prices and interest rates and have established policies to monitor and control these market risks. We use derivative agreements to help manage our exposure to commodity price and interest rate risks. 

Commodity Price Risk

Our commodity price risk primarily arises from our butane blending and fractionation activities, and from managing product overages associated with our refined products and crude oil pipelines and terminals. We use derivatives such as forward physical contracts and exchange-traded futures contracts to help us manage commodity price risk.

Forward physical contracts that qualify for and are elected as normal purchases and sales are accounted for using traditional accrual accounting. As of September 30, 2019, we had commitments under forward purchase and sale contracts as follows (in millions):

	Total		2019		2020-2021
Forward purchase contracts – notional value	$	101.5	$	58.7	$	42.8
Forward purchase contracts – barrels	3.0		1.8		1.2
Forward sales contracts – notional value	$	45.1	$	30.6	$	14.5
Forward sales contracts – barrels	0.7		0.5		0.2

We also use exchange-traded futures contracts to hedge against changes in the price of petroleum products we expect to sell or purchase. Virtually all of our open contracts did not qualify for hedge accounting treatment under ASC 815, Derivatives and Hedging, and we accounted for these contracts as economic hedges, with changes in fair value recognized currently in earnings. The fair value of these open futures contracts, representing 4.5 million barrels of petroleum products we expect to sell and 1.5 million barrels of butane and natural gasoline we expect to purchase, was a net liability of $4.8 million. With respect to these contracts, a $10.00 per barrel increase (decrease) in the prices of petroleum products we expect to sell would result in a $45.0 million decrease (increase) in our operating profit, while a $10.00 per barrel increase (decrease) in the price of butane we expect to purchase would result in $15.0 million increase (decrease) in our operating profit. These increases or decreases in operating profit would be substantially offset by higher or lower product sales revenue or cost of product sales when the physical sale or purchase of those products occurs. These contracts may be for the purchase or sale of products in markets different from those in which we are attempting to hedge our exposure, and the resulting hedges may not eliminate all price risks.

During 2019, we entered into a basis derivative agreement with a joint venture co-owner’s affiliate, and, contemporaneously, that affiliate entered into an intrastate transportation services agreement with the joint venture. Settlements under the basis derivative agreement are determined based on the basis differential of crude oil prices at different market locations and a notional volume of 30,000 barrels per day. As a result, we are exposed to the differential in the forward price curves for crude oil in West Texas and the Houston Gulf Coast. With respect to this agreement, a $1.00 per barrel increase (decrease) in the differential would result in an approximately $10.0 million increase (decrease) in our operating profit.

Interest Rate Risk

Our use of variable rate debt and any forecasted issuances of fixed rate debt expose us to interest rate risk.

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ITEM 4. CONTROLS AND PROCEDURES

We performed an evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. We performed this evaluation under the supervision and with the participation of our management, including our general partner’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). Based upon that evaluation, our general partner’s CEO and CFO concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Our disclosure controls and procedures include controls and procedures designed so that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to management, including the CEO and the CFO, as appropriate, to allow timely decisions regarding required disclosure. There has been no change in our internal control over financial reporting that occurred during the quarter ended September 30, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Forward-Looking Statements

Certain matters discussed in this Quarterly Report on Form 10-Q include forward-looking statements within the meaning of the federal securities laws that discuss our expected future results based on current and pending business operations. Forward-looking statements can be identified by words such as “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “might,” “plans,” “potential,” “projected,” “scheduled,” “should,” “will” and other similar expressions. Although we believe our forward-looking statements are based on reasonable assumptions, statements made regarding future results are not guarantees of future performance and are subject to numerous assumptions, uncertainties and risks that are difficult to predict. Therefore, actual outcomes and results may be materially different from the results stated or implied in such forward-looking statements included in this report.

The following are among the important factors that could cause future results to differ materially from any expected, projected, forecasted, estimated or budgeted amounts, events or circumstances we have discussed in this report:

• overall demand for refined products, crude oil and liquefied petroleum gases in the U.S.;

• price fluctuations for refined products, crude oil and liquefied petroleum gases and expectations about future prices for these products;

• changes in the production of crude oil in the basins served by our pipelines;

• changes in general economic conditions, interest rates and price levels;

• changes in the financial condition of our customers, vendors, derivatives counterparties, lenders or joint venture co-owners;

• our ability to secure financing in the credit and capital markets in amounts and on terms that will allow us to execute our growth strategy, refinance our existing obligations when due and maintain adequate liquidity;

• development of alternative energy sources, including but not limited to natural gas, solar power, wind power, electric and battery-powered engines and geothermal energy, increased use of biofuels such as ethanol and biodiesel, increased conservation or fuel efficiency, increased use of electric vehicles, as well as regulatory developments or other trends that could affect demand for our services;

• population decreases in the markets served by our refined products pipeline system and changes in consumer preferences, driving patterns or rates of automobile ownership;

• changes in the product quality, throughput or interruption in service of refined products or crude oil pipelines owned and operated by third parties and connected to our assets;

• changes in demand for storage in our refined products, crude oil or marine terminals;

• changes in supply and demand patterns for our facilities due to geopolitical events, the activities of the Organization of the Petroleum Exporting Countries, changes in U.S. trade policies or in laws governing the importing and exporting of petroleum products, technological developments or other factors;

• our ability to manage interest rate and commodity price exposures;

• changes in our tariff rates or other terms of service implemented by the FERC or state regulatory agencies;

• shut-downs or cutbacks at refineries, oil wells, petrochemical plants or other customers or businesses that use or supply our services;

• the effect of weather patterns and other natural phenomena, including climate change, on our operations and demand for our services;

• an increase in the competition our operations encounter;

• the occurrence of natural disasters, terrorism, sabotage, protests or activism, operational hazards, equipment failures, system failures or unforeseen interruptions;

• our ability to obtain adequate levels of insurance at a reasonable cost, and the potential for losses to exceed the insurance coverage we do obtain;

• the treatment of us as a corporation for federal or state income tax purposes or if we become subject to significant forms of other taxation or more aggressive enforcement or increased assessments under existing forms of taxation;

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• our ability to identify expansion projects with acceptable expected returns or to complete identified expansion projects on time and at projected costs;

• our ability to make and integrate accretive acquisitions and joint ventures and successfully execute our business strategy;

• uncertainty of estimates, including accruals and costs of environmental remediation;

• our ability to cooperate with and rely on our joint venture co-owners;

• actions by rating agencies concerning our credit ratings;

• our ability to timely obtain and maintain all necessary approvals, consents and permits required to operate our existing assets and to construct, acquire and operate any new or modified assets;

• our ability to promptly obtain all necessary services, materials, labor, supplies and rights-of-way required for construction of our growth projects, and to complete construction without significant delays, disputes or cost overruns;

• risks inherent in the use and security of information systems in our business and implementation of new software and hardware;

• changes in laws and regulations or the interpretations of such laws that govern our butane blending activities, including the potential applicability of the Carmack Amendment, which broadly covers claims for damage or loss incurred to goods transported by a carrier in interstate commerce, to such activities, or changes regarding product quality specifications or renewable fuel obligations that impact our ability to produce gasoline volumes through our butane blending activities or that require significant capital outlays for compliance;

• changes in laws and regulations to which we or our customers are or could become subject, including tax withholding requirements, safety, security, employment, hydraulic fracturing, derivatives transactions, trade and environmental laws and regulations, including laws and regulations designed to address climate change;

• the cost and effects of legal and administrative claims and proceedings against us, our subsidiaries or our joint ventures;

• the amount of our indebtedness, which could make us vulnerable to general adverse economic and industry conditions, limit our ability to borrow additional funds, place us at competitive disadvantages compared to our competitors that have less debt or have other adverse consequences;

• the effect of changes in accounting policies;

• the potential that our internal controls may not be adequate, weaknesses may be discovered or remediation of any identified weaknesses may not be successful;

• the ability and intent of our customers, vendors, lenders, joint venture co-owners or other third parties to perform on their contractual obligations to us;

• petroleum product supply disruptions;

• global and domestic repercussions from terrorist activities, including cyber attacks, and the government’s response thereto; and

• other factors and uncertainties inherent in the transportation, storage and distribution of petroleum products and the operation, acquisition and construction of assets related to such activities.

This list of important factors is not exclusive. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changes in assumptions or otherwise.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Butane Blending Patent Infringement Proceeding.  On October 4, 2017, Sunoco Partners Marketing & Terminals L.P. (“Sunoco”) brought an action for patent infringement in the U.S. District Court for the District of Delaware alleging Magellan Midstream Partners, L.P. (“Magellan”) and Powder Springs Logistics, LLC (“Powder Springs”) have infringed patents relating to butane blending at the Powder Springs facility located in Powder Springs, Georgia. Sunoco has since submitted pleadings alleging that Magellan has also infringed various patents relating to butane blending at nine Magellan facilities, in addition to Powder Springs. Sunoco is seeking monetary damages, attorneys’ fees and a permanent injunction enjoining Magellan and Powder Springs from infringing the subject patents. We deny and are vigorously defending against all claims asserted by Sunoco. Although it is not possible to predict the ultimate outcome, we believe the ultimate resolution of this matter will not have a material adverse impact on our results of operations, financial position or cash flows.

Valves and Overfill Protection Systems Proceeding. In October 2019, we received a Notice of Probable Violation, Proposed Civil Penalty and Proposed Compliance Order from the Pipeline and Hazardous Materials Safety Administration alleging violations related to the records and maps necessary for the safe operation of remotely controlled valves at two facilities and the failure to inspect the overfill protection system on four breakout tanks at our terminal in Des Moines, Iowa.  The penalties associated with these alleged violations could exceed $100,000. While the results cannot be predicted with certainty, we believe the ultimate resolution of this matter will not have a material impact on our results of operations, financial position or cash flows.

Hurricane Harvey Enforcement Proceeding. In July 2018, we received a Notice of Enforcement letter from the Texas Commission on Environmental Quality alleging two air emission violations at our Galena Park, Texas terminal that occurred during Hurricane Harvey in third quarter 2017.  The penalties associated with these alleged violations could exceed $100,000. While the results cannot be predicted with certainty, we believe the ultimate resolution of this matter will not have a material impact on our results of operations, financial position or cash flows.

Clean Air Act Enforcement Proceeding.  In June 2017, we received an enforcement letter from the U.S. Department of Justice (“DOJ”) regarding a referral from the U.S. Environmental Protection Agency (“EPA”) relating to alleged Clean Air Act violations at our terminals in Mason City, Iowa, Great Bend and Kansas City, Kansas and Omaha, Nebraska.  The DOJ has subsequently withdrawn from the proceeding. On September 4, 2019, the EPA filed an Administrative Complaint and Notice of Opportunity for Hearing and is seeking penalties in excess of $100,000. While the results cannot be predicted with certainty, we believe the ultimate resolution of this matter will not have a material impact on our results of operations, financial position or cash flows.

U.S. Oil Recovery, EPA ID No.: TXN000607093 Superfund Site. We have liability at the U.S. Oil Recovery Superfund Site in Pasadena, Texas as a potential responsible party (“PRP”) under Section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). As a result of the EPA’s Administrative Settlement Agreement and Order on Consent for Removal Action, filed August 25, 2011, EPA Region 6, CERCLA Docket No. 06-10-11, we voluntarily entered into the PRP group responsible for the site investigation, stabilization and subsequent site cleanup. We have paid approximately $42,000 associated with the assessment phase. Until this assessment phase has been completed, we cannot reasonably estimate our proportionate share of the remediation costs associated with this site.  While the results cannot be reasonably estimated, we believe the ultimate resolution of this matter will not have a material impact on our results of operations, financial position or cash flows.

Lake Calumet Cluster Site, EPA ID No.: ILD000716852 Superfund Site.  We have liability at the Lake Calumet Cluster Superfund Site in Chicago, Illinois as a PRP under Sections 107(a) and 113(f)(1) of CERCLA.  As a result of the EPA’s Administrative Settlement Agreement and Order for Remedial Investigation/Feasibility Study

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of June 2013, we voluntarily entered into the PRP group responsible for the investigation, cleanup and installation of an appropriate clay cap over the site.  We have paid approximately $9,000 associated with the Remedial Investigation/Feasibility Study and cleanup costs to date.  Our projected portion of the estimated cap installation is $55,000.  While the results cannot be predicted with certainty, we believe the ultimate resolution of this matter will not have a material impact on our results of operations, financial position or cash flows.

We and the non-controlled entities in which we own an interest are a party to various other claims, legal actions and complaints. While the results cannot be predicted with certainty, management believes the ultimate resolution of these claims, legal actions and complaints after consideration of amounts accrued, insurance coverage or other indemnification arrangements will not have a material adverse effect on our future results of operations, financial position or cash flows.  

ITEM 1A. RISK FACTORS

In addition to the information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not our only risks. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also could materially adversely affect our business, financial condition or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The exhibits listed below on the Index to Exhibits are filed or incorporated by reference as part of this report.

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INDEX TO EXHIBITS

Exhibit Number		Description
Exhibit 4.1*	—	Tenth Supplemental Indenture dated as of August 19, 2019 between Magellan Midstream Partners, L.P. and U.S. Bank National Association, as trustee (filed as Exhibit 4.2 to Form 8-K filed August 19, 2019).
Exhibit 31.1	—	Certification of Michael N. Mears, principal executive officer.
Exhibit 31.2	—	Certification of Jeff Holman, principal financial officer.
Exhibit 32.1	—	Section 1350 Certification of Michael N. Mears, Chief Executive Officer.
Exhibit 32.2	—	Section 1350 Certification of Jeff Holman, Chief Financial Officer.
Exhibit 101.INS	—	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Exhibit 101.SCH	—	XBRL Taxonomy Extension Schema Document.
Exhibit 101.CAL	—	XBRL Taxonomy Extension Calculation Linkbase Document.
Exhibit 101.DEF	—	XBRL Taxonomy Extension Definition Linkbase Document.
Exhibit 101.LAB	—	XBRL Taxonomy Extension Label Linkbase Document.
Exhibit 101.PRE	—	XBRL Taxonomy Extension Presentation Linkbase Document.

_______________________

*Such exhibit has heretofore been filed with the Securities and Exchange Commission as part of the filing indicated and is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized in Tulsa, Oklahoma on October 31, 2019.

MAGELLAN MIDSTREAM PARTNERS, L.P.
By:	Magellan GP, LLC,
	its general partner
/s/ Jeff Holman
Jeff Holman
Chief Financial Officer
(Principal Accounting and Financial Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael N. Mears, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ending September 30, 2019 (this “report”) of Magellan Midstream Partners, L.P. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) 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(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: October 31, 2019

/s/ Michael N. Mears

Michael N. Mears, principal executive officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Jeff Holman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ending September 30, 2019 (this “report”) of Magellan Midstream Partners, L.P. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) 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(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: October 31, 2019

/s/ Jeff Holman

Jeff Holman, principal financial and accounting officer

EX-32.1

Exhibit 32.1

The following certification shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. Such certification shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Magellan Midstream Partners, L.P. (the “Partnership”) for the quarter ending September 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael N. Mears, Chief Executive Officer of Magellan GP, LLC, the General Partner of the Partnership, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

/s/ Michael N. Mears

Michael N. Mears, Chief Executive Officer

Date: October 31, 2019

A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

The following certification shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. Such certification shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Magellan Midstream Partners, L.P. (the “Partnership”) for the quarter ending September 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeff Holman, Chief Financial Officer of Magellan GP, LLC, the General Partner of the Partnership, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

/s/ Jeff Holman

Jeff Holman, Chief Financial Officer

Date: October 31, 2019

A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Long-Term Incentive Plan (Equity-Based Incentive Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share-based Compensation Arrangements by Share-based Payment Award [Line Items]
Allocation of LTIP expense on consolidated statements of income	$ 6,773	$ 7,933	$ 22,577	$ 24,612
G&A Expense [Member]
Share-based Compensation Arrangements by Share-based Payment Award [Line Items]
Allocation of LTIP expense on consolidated statements of income	6,704	7,867	22,377	24,412
Operating Expenses [Member]
Share-based Compensation Arrangements by Share-based Payment Award [Line Items]
Allocation of LTIP expense on consolidated statements of income	69	66	200	200
Performance Based Awards [Member]
Share-based Compensation Arrangements by Share-based Payment Award [Line Items]
Allocation of LTIP expense on consolidated statements of income	5,162	7,087	18,123	22,176
Time-Based Awards [Member]
Share-based Compensation Arrangements by Share-based Payment Award [Line Items]
Allocation of LTIP expense on consolidated statements of income	$ 1,611	$ 846	$ 4,454	$ 2,436

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Fair Value Fair Value (Narrative) (Details) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2019 USD ($) bbl	Mar. 31, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) bbl	Sep. 30, 2018 USD ($)
Derivative [Line Items]
Gain (Loss) on Disposition of Other Assets	$ 2,532		$ 353,797	$ 28,966	$ 353,797
Energy Related Derivative [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount | bbl	30,000			30,000
BridgeTex [Member]
Derivative [Line Items]
Guarantees, Fair Value Disclosure		$ 5,000
Gain (Loss) on Disposition of Other Assets		$ 11,000

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Employee Benefit Plans (Narrative) (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($) pension_plan	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) pension_plan	Sep. 30, 2018 USD ($)
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Contribution Plan, Cost	$ 2.8	$ 2.7	$ 9.3	$ 8.8
Number Of Company Sponsored Union Pension Plans | pension_plan	2		2
Pension Plan [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year	$ 31.6		$ 31.6
Other Postretirement Benefits Plan [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year	$ 0.8		$ 0.8

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Revenue from Contract with Customers (Performance Obligations in Next 12 Months) (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 3,463,744
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 749,453
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months
Refined Products Segment [Member]
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 2,034,378
Refined Products Segment [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	289,478
Crude Oil Pipeline and Terminals Segment [Member]
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	1,206,147
Crude Oil Pipeline and Terminals Segment [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	337,928
Marine Storage Segment [Member]
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	223,219
Marine Storage Segment [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 122,047
Minimum [Member] | Refined Products Segment [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Minimum [Member] | Crude Oil Pipeline and Terminals Segment [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Minimum [Member] | Marine Storage Segment [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Maximum [Member] | Refined Products Segment [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	19 years
Maximum [Member] | Crude Oil Pipeline and Terminals Segment [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	10 years
Maximum [Member] | Marine Storage Segment [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	5 years

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Lessee, Future Minimum Payments (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Related Party Transaction [Line Items]
2019	$ 5,250
2020	29,036
2021	27,967
2022	25,482
2023	24,961
Thereafter	71,559
Total future minimum rental payments	184,255
Present value discount	25,569
Total operating lease liability	158,686
Third Party Leases
Related Party Transaction [Line Items]
2019	2,643
2020	18,607
2021	18,994
2022	18,870
2023	18,349
Thereafter	34,086
Total future minimum rental payments	111,549
Present value discount	13,207
Total operating lease liability	98,342
Related Party Leases | Equity Method Investee [Member] | Seabrook Logistics, LLC [Member]
Related Party Transaction [Line Items]
2019	2,607
2020	10,429
2021	8,973
2022	6,612
2023	6,612
Thereafter	37,473
Total future minimum rental payments	72,706
Present value discount	12,362
Total operating lease liability	$ 60,344

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Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Lessee, Operating Lease, Liability, Maturity

Future minimum rental payments under operating leases with initial terms greater than one year as of September 30, 2019 are as follows (in thousands):

	Third Party Leases		Seabrook Lease		All Leases
2019	$	2,643	$	2,607	$	5,250
2020	18,607		10,429		29,036
2021	18,994		8,973		27,967
2022	18,870		6,612		25,482
2023	18,349		6,612		24,961
Thereafter	34,086		37,473		71,559
Total future minimum rental payments	111,549		72,706		184,255
Present value discount	13,207		12,362		25,569
Total operating lease liability	$	98,342	$	60,344	$	158,686

Lessee, Operating Lease, Disclosure

The following tables provide further information about our operating leases (dollars in thousands):

	Three Months Ended September 30, 2019						Nine Months Ended September 30, 2019
	Third Party Leases		Seabrook Lease		All Leases		Third Party Leases		Seabrook Lease		All Leases
Fixed lease cost	$	4,792	$	2,608	$	7,400	$	14,375	$	7,951	$	22,326
Short-term lease cost	405		—		405		1,215		—		1,215
Variable lease cost	1,009		—		1,009		2,041		—		2,041
Total lease cost	$	6,206	$	2,608	$	8,814	$	17,631	$	7,951	$	25,582

	As of and for the Nine Months Ended September 30, 2019
	Third Party Leases		Seabrook Lease		All Leases
Current lease liability	$	14,925	$	8,072	$	22,997
Long-term lease liability	$	83,417	$	52,272	$	135,689
Right-of-use asset	$	102,119	$	60,344	$	162,463
Operating cash flows for operating leases	$	17,990	7,969		$	25,959
Weighted average remaining lease term (years)	6		9		7
Weighted-average discount rate	3.9%		4.3%		4.1%

Schedule of Future Minimum Rental Payments for Operating Leases

Future minimum payments receivable under operating leases with initial terms greater than one year as of September 30, 2019 are estimated as follows (in thousands):

2019	$	9,624
2020	36,614
2021	36,560
2022	23,855
2023	7,663
Thereafter	15,631
Total	$	129,947

Sales-type and Direct Financing Leases, Lease Receivable, Maturity

The net investment under this arrangement as of December 31, 2018 and September 30, 2019 was as follows (in thousands):

	December 31, 2018		September 30, 2019
Total minimum lease payments receivable	$	17,468	$	16,158
Less: Unearned income	3,422		2,961
Recorded net investment in sales-type lease	$	14,046	$	13,197

The net investment in sales-type leases was classified in the consolidated balance sheets as follows (in thousands):

	December 31, 2018		September 30, 2019
Other accounts receivable	$	1,138	$	1,177
Long-term receivables	12,908		12,020
Total	$	14,046	$	13,197

Future minimum payments receivable under this lease are $0.4 million in 2019, $1.7 million in 2020, $1.7 million in 2021, $1.7 million in 2022, $1.7 million in 2023 and $8.7 million thereafter.

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Related Party Transactions

9 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Stacy Methvin is an independent member of our general partner’s board of directors and is also a director of one of our customers.  We received tariff and other ancillary revenue from this customer of $6.0 million and $7.1 million for the three months ended September 30, 2018 and 2019, respectively, and $14.4 million and $21.4 million for the nine months ended September 30, 2018 and 2019, respectively. We recorded receivables of $1.9 million and $2.7 million from this customer at December 31, 2018 and September 30, 2019, respectively.  The tariff revenue we recognized from this customer was in the normal course of business, with rates determined in accordance with published tariffs.  We also made a one-time payment of $0.2 million in second quarter 2019 to a subsidiary of this customer for an easement related to one of our expansion projects.

See Note 4 – Investments in Non-Controlled Entities and Note 7 – Leases for details of transactions with our joint ventures.

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Segment Disclosures (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Schedule of Business Segment Reporting Information

	Three Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	300,034		$	145,118		$	44,546		$	(923	)	$	488,775
Product sales revenue	129,926			12,666			1,811			—			144,403
Affiliate management fee revenue	351			3,463			1,028			—			4,842
Total revenue	430,311			161,247			47,385			(923		)	638,020
Operating expenses	112,279			45,195			17,178			(2,537		)	172,115
Cost of product sales	106,756			11,590			2,164			—			120,510
Earnings of non-controlled entities	(3,393		)	(49,420		)	(982		)	—			(53,795		)
Operating margin	214,669			153,882			29,025			1,614			399,190
Depreciation, amortization and impairment expense	30,440			15,145			9,029			1,614			56,228
G&A expense	28,751			12,766			5,872			—			47,389
Operating profit	$	155,478		$	125,971		$	14,124		$	—		$	295,573

	Three Months Ended September 30, 2019
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	310,482		$	150,926		$	46,580		$	(1,556	)	$	506,432
Product sales revenue	134,755			8,343			1,709			—			144,807
Affiliate management fee revenue	432			3,592			1,333			—			5,357
Total revenue	445,669			162,861			49,622			(1,556		)	656,596
Operating expenses	111,839			42,529			17,921			(2,902		)	169,387
Cost of product sales	98,144			8,341			2,272			—			108,757
Other operating (income) expense	(1,046		)	3,629			(2,204		)	—			379
Earnings of non-controlled entities	(3,373		)	(46,047		)	(769		)	—			(50,189		)
Operating margin	240,105			154,409			32,402			1,346			428,262
Depreciation, amortization and impairment expense	31,752			14,810			8,719			1,346			56,627
G&A expense	30,650			13,666			6,840			—			51,156
Operating profit	$	177,703		$	125,933		$	16,843		$	—		$	320,479

	Nine Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	851,492		$	409,329		$	134,892		$	(2,753	)	$	1,392,960
Product sales revenue	513,634			32,387			6,771			—			552,792
Affiliate management fee revenue	1,000			11,328			2,810			—			15,138
Total revenue	1,366,126			453,044			144,473			(2,753		)	1,960,890
Operating expenses	319,670			109,963			52,835			(7,212		)	475,256
Cost of product sales	434,632			32,401			6,748			—			473,781
Earnings of non-controlled entities	(5,614		)	(122,879		)	(2,350		)	—			(130,843		)
Operating margin	617,438			433,559			87,240			4,459			1,142,696
Depreciation, amortization and impairment expense	89,855			40,648			26,764			4,459			161,726
G&A expense	90,825			38,127			18,283			—			147,235
Operating profit	$	436,758		$	354,784		$	42,193		$	—		$	833,735

 

	Nine Months Ended September 30, 2019
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	883,702		$	454,103		$	139,659		$	(3,835	)	$	1,473,629
Product sales revenue	473,122			19,351			5,318			—			497,791
Affiliate management fee revenue	1,314			10,724			3,772			—			15,810
Total revenue	1,358,138			484,178			148,749			(3,835		)	1,987,230
Operating expenses	317,328			123,569			51,404			(7,960		)	484,341
Cost of product sales	404,814			19,715			6,198			—			430,727
Other operating (income) expense	(2,398		)	8,112			(7,252		)	—			(1,538		)
(Earnings) losses of non-controlled entities	2,275			(122,084		)	(2,420		)	—			(122,229		)
Operating margin	636,119			454,866			100,819			4,125			1,195,929
Depreciation, amortization and impairment expense	102,024			45,812			29,067			4,125			181,028
G&A expense	89,385			40,378			19,771			—			149,534
Operating profit	$	444,710		$	368,676		$	51,981		$	—		$	865,367

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables summarize the carrying amounts, fair values and fair value measurements recorded or disclosed as of December 31, 2018 and September 30, 2019 based on the three levels established by ASC 820, Fair Value Measurements and Disclosures (in thousands):

	December 31, 2018
Assets (Liabilities)							Fair Value Measurements using:
	Carrying Amount			Fair Value			Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Energy commodity derivatives contracts	$	55,011		$	55,011		$	55,011	$	—		$	—
Interest rate contracts	$	(8,126	)	$	(8,126	)	$	—	$	(8,126	)	$	—
Long-term receivables	$	20,844		$	20,844		$	—	$	—		$	20,844
Guarantees	$	(16,409	)	$	(16,409	)	$	—	$	—		$	(16,409	)
Debt	$	(4,270,869	)	$	(4,224,373	)	$	—	$	(4,224,373	)	$	—

	September 30, 2019
Assets (Liabilities)							Fair Value Measurements using:
	Carrying Amount			Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Energy commodity derivatives contracts	$	4,839		$	4,839		$	4,839	$	—		$	—
Basis derivative agreement	$	(17,755	)	$	(17,755	)	$	—	$	(17,755	)	$	—
Long-term receivables	$	20,789		$	20,789		$	—	$	—		$	20,789
Guarantees	$	(408	)	$	(408	)	$	—	$	—		$	(408	)
Debt	$	(4,705,775	)	$	(5,185,750	)	$	—	$	(5,185,750	)	$	—

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Debt (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Consolidated Debt

Long-term debt at December 31, 2018 and September 30, 2019 was as follows (in thousands):

	December 31, 2018			September 30, 2019
6.55% Notes due 2019	$	550,000		$	—
4.25% Notes due 2021	550,000			550,000
3.20% Notes due 2025	250,000			250,000
5.00% Notes due 2026	650,000			650,000
6.40% Notes due 2037	250,000			250,000
4.20% Notes due 2042	250,000			250,000
5.15% Notes due 2043	550,000			550,000
4.20% Notes due 2045	250,000			250,000
4.25% Notes due 2046	500,000			500,000
4.20% Notes due 2047	500,000			500,000
4.85% Notes due 2049	—			500,000
3.95% Notes due 2050	—			500,000
Face value of long-term debt	4,300,000			4,750,000
Unamortized debt issuance costs(1)	(27,070		)	(35,770		)
Net unamortized debt discount(1)	(2,927		)	(8,455		)
Net unamortized amount of gains from historical fair value hedges(1)	866			—
Long-term debt, net, including current portion	4,270,869			4,705,775
Less: Current portion of long-term debt, net	59,489			—
Long-term debt, net	$	4,211,380		$	4,705,775

(1)

Debt issuance costs, note discounts and premiums and realized gains and losses of historical fair value hedges are being amortized or accreted to the applicable notes over the respective lives of those notes.

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Revenue from Contract with Customers (Assets and Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Revenue from Contract with Customer [Abstract]
Billed Contracts Receivable	$ 129,017	$ 102,684
Contract with Customer, Asset, after Allowance for Credit Loss	7,685	8,487
Contract with Customer, Liability	$ 110,519	$ 122,129

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Employee Benefit Plans

9 Months Ended

Sep. 30, 2019

Retirement Benefits [Abstract]

Employee Benefit Plans

Employee Benefit Plans

We sponsor a defined contribution plan in which we match our employees’ qualifying contributions, resulting in additional expense to us. Expenses related to the defined contribution plan were $2.7 million and $2.8 million for the three months ended September 30, 2018 and 2019, respectively, and $8.8 million and $9.3 million for the nine months ended September 30, 2018 and 2019, respectively.

Additionally, we sponsor two union pension plans that cover certain union employees, a pension plan for all non-union employees and a postretirement benefit plan for certain employees. Net periodic benefit expense for the three and nine months ended September 30, 2018 and 2019 was as follows (in thousands):

 

	Three Months Ended					Three Months Ended
	September 30, 2018					September 30, 2019
	Pension Benefits			Other  Postretirement Benefits		Pension Benefits			Other  Postretirement Benefits
Components of net periodic benefit costs:
Service cost	$	6,424		$	58	$	6,260		$	48
Interest cost	2,816			104		3,026			126
Expected return on plan assets	(3,055		)	—		(2,354		)	—
Amortization of prior service credit	(45		)	—		(46		)	—
Amortization of actuarial loss	1,659			147		1,352			60
Settlement cost	—			—		439			—
Net periodic benefit cost	$	7,799		$	309	$	8,677		$	234

 

	Nine Months Ended					Nine Months Ended
	September 30, 2018					September 30, 2019
	Pension Benefits			Other  Postretirement Benefits		Pension Benefits			Other  Postretirement Benefits
Components of net periodic benefit costs:
Service cost	$	28,393		$	174	$	19,145		$	145
Interest cost	12,054			312		9,136			380
Expected return on plan assets	(9,057		)	—		(7,045		)	—
Amortization of prior service credit	(136		)	—		(136		)	—
Amortization of actuarial loss	8,182			441		4,137			248
Settlement cost	—			—		2,499			—
Net periodic benefit cost	$	39,436		$	927	$	27,736		$	773

The service component of our net periodic benefit costs is presented in operating expense and G&A expense, and the non-service components are presented in other (income) expense in our consolidated statements of income.

The changes in accumulated other comprehensive loss (“AOCL”) related to employee benefit plan assets and benefit obligations for the three and nine months ended September 30, 2018 and 2019 were as follows (in thousands):

	Three Months Ended						Three Months Ended
	September 30, 2018						September 30, 2019
Gains (Losses) Included in AOCL	Pension Benefits			Other Postretirement Benefits			Pension Benefits			Other Postretirement Benefits
Beginning balance	$	(96,352	)	$	(6,036	)	$	(93,876	)	$	(6,105	)
Amortization of prior service credit	(45		)	—			(46		)	—
Amortization of actuarial loss	1,659			147			1,352			60
Settlement cost	—			—			439			—
Ending balance	$	(94,738	)	$	(5,889	)	$	(92,131	)	$	(6,045	)

	Nine Months Ended						Nine Months Ended
	September 30, 2018						September 30, 2019
Gains (Losses) Included in AOCL	Pension Benefits			Other Postretirement Benefits			Pension Benefits			Other Postretirement Benefits
Beginning balance	$	(97,226	)	$	(6,597	)	$	(88,602	)	$	(5,409	)
Net actuarial gain (loss)	(5,558		)	267			(10,029		)	(884		)
Amortization of prior service credit	(136		)	—			(136		)	—
Amortization of actuarial loss	8,182			441			4,137			248
Settlement cost	—			—			2,499			—
Ending balance	$	(94,738	)	$	(5,889	)	$	(92,131	)	$	(6,045	)

Contributions estimated to be paid into the plans in 2019 are $31.6 million and $0.8 million for the pension plans and other postretirement benefit plan, respectively.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Butane Blending Patent Infringement Proceeding

On October 4, 2017, Sunoco Partners Marketing & Terminals L.P. (“Sunoco”) brought an action for patent infringement in the U.S. District Court for the District of Delaware alleging Magellan Midstream Partners, L.P. (“Magellan”) and Powder Springs Logistics, LLC (“Powder Springs”) have infringed patents relating to butane blending at the Powder Springs facility located in Powder Springs, Georgia. Sunoco has since submitted pleadings alleging that Magellan has also infringed various patents relating to butane blending at nine Magellan facilities, in addition to Powder Springs. Sunoco is seeking monetary damages, attorneys’ fees and a permanent injunction enjoining Magellan and Powder Springs from infringing the subject patents. We deny and are vigorously defending against all claims asserted by Sunoco. Although it is not possible to predict the ultimate outcome, we believe the ultimate resolution of this matter will not have a material adverse impact on our results of operations, financial position or cash flows.

Environmental Liabilities

Liabilities recognized for estimated environmental costs were $20.5 million and $16.6 million at December 31, 2018 and September 30, 2019, respectively. We have classified environmental liabilities as current or noncurrent based on management’s estimates regarding the timing of actual payments. Environmental expenses recognized as a result of changes in our environmental liabilities are generally included in operating expenses on our consolidated statements of income. Environmental expenses were $5.5 million and $0.8 million for the three months ended September 30, 2018 and 2019, respectively, and $10.8 million and $4.2 million for the nine months ended September 30, 2018 and 2019, respectively.

Environmental Receivables

Receivables from insurance carriers and other third parties related to environmental matters were $4.1 million at December 31, 2018, of which $2.4 million and $1.7 million were recorded to other accounts receivable and long-term receivables, respectively, on our consolidated balance sheets. Receivables from insurance carriers and other third parties related to environmental matters were $3.0 million at September 30, 2019, of which $1.4 million and $1.6 million were recorded to other accounts receivable and long-term receivables, respectively, on our consolidated balance sheets.

Other

We have entered into an agreement to guarantee our 50% pro rata share, up to $25.0 million, of obligations under Powder Springs’ credit facility. As of September 30, 2019, our consolidated balance sheets reflected a $0.4 million other current liability and a corresponding increase in our investment in non-controlled entities on our consolidated balance sheets to reflect the fair value of this guarantee.

We and the non-controlled entities in which we own an interest are a party to various other claims, legal actions and complaints. While the results cannot be predicted with certainty, management believes the ultimate resolution of these claims, legal actions and complaints after consideration of amounts accrued, insurance coverage or other indemnification arrangements will not have a material adverse effect on our results of operations, financial position or cash flows.

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2019	Oct. 30, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	1-16335
Entity Registrant Name	Magellan Midstream Partners, L.P.
Entity Central Index Key	0001126975
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	73-1599053
Entity Address, Address Line One	One Williams Center
Entity Address, Address Line Two	P.O. Box 22186
Entity Address, City or Town	Tulsa
Entity Address, State or Province	OK
Entity Address, Postal Zip Code	74121-2186
City Area Code	918
Local Phone Number	574-7000
Entity Filer Category	Large Accelerated Filer
Title of 12(b) Security	Common Units representing limited partnership units
Trading Symbol	MMP
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		228,403,428

XML

Label	Element	Value
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 5,975,000
Limited Partner [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 5,975,000

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Other intangibles, accumulated amortization	$ 5,588	$ 2,979
Limited partner unitholders, units outstanding (in shares)	228,403,428	228,195,160

XML

Revenue from Contract with Customers

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer

Revenue from Contracts with Customers

Statement of Income Disclosures

The following tables provide details of our revenues disaggregated by key activities that comprise our performance obligations by operating segment (in thousands):

	Three Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation	$	197,235		$	91,086		$	—		$	—		$	288,321
Terminalling	46,213			2,528			616			—			49,357
Storage	25,137			29,094			33,890			(923		)	87,198
Ancillary services	28,808			6,278			5,857			—			40,943
Lease revenue	2,641			16,132			4,183			—			22,956
Transportation and terminals revenue	300,034			145,118			44,546			(923		)	488,775
Product sales revenue	129,926			12,666			1,811			—			144,403
Affiliate management fee revenue	351			3,463			1,028			—			4,842
Total revenue	430,311			161,247			47,385			(923		)	638,020
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(2,641		)	(16,132		)	(4,183		)	—			(22,956		)
Losses from futures contracts included in product sales revenue(2)	24,253			102			—			—			24,355
Affiliate management fee revenue	(351		)	(3,463		)	(1,028		)	—			(4,842		)
Total revenue from contracts with customers under ASC 606	$	451,572		$	141,754		$	42,174		$	(923	)	$	634,577

⁽¹⁾ Lease revenue in 2018 is accounted for under ASC 840, Leases.

⁽²⁾ The impact on product sales revenue from futures contracts falls under the guidance of ASC 815, Derivatives and Hedging.

	Three Months Ended September 30, 2019
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation	$	205,824		$	85,859		$	—		$	—		$	291,683
Terminalling	47,483			3,176			946			—			51,605
Storage	25,788			35,371			34,230			(1,556		)	93,833
Ancillary services	29,284			7,164			7,205			—			43,653
Lease revenue	2,103			19,356			4,199			—			25,658
Transportation and terminals revenue	310,482			150,926			46,580			(1,556		)	506,432
Product sales revenue	134,755			8,343			1,709			—			144,807
Affiliate management fee revenue	432			3,592			1,333			—			5,357
Total revenue	445,669			162,861			49,622			(1,556		)	656,596
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(2,103		)	(19,356		)	(4,199		)	—			(25,658		)
(Gains) losses from futures contracts included in product sales revenue(2)	(17,061		)	(564		)	—			—			(17,625		)
Affiliate management fee revenue	(432		)	(3,592		)	(1,333		)	—			(5,357		)
Total revenue from contracts with customers under ASC 606	$	426,073		$	139,349		$	44,090		$	(1,556	)	$	607,956

⁽¹⁾ Lease revenue in 2019 is accounted for under ASC 842, Leases.

⁽²⁾ The impact on product sales revenue from futures contracts falls under the guidance of ASC 815, Derivatives and Hedging.

	Nine Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation	$	548,733		$	254,964		$	—		$	—		$	803,697
Terminalling	136,135			2,528			1,920			—			140,583
Storage	75,353			87,620			101,420			(2,753		)	261,640
Ancillary services	83,055			19,512			18,928			—			121,495
Lease revenue	8,216			44,705			12,624			—			65,545
Transportation and terminals revenue	851,492			409,329			134,892			(2,753		)	1,392,960
Product sales revenue	513,634			32,387			6,771			—			552,792
Affiliate management fee revenue	1,000			11,328			2,810			—			15,138
Total revenue	1,366,126			453,044			144,473			(2,753		)	1,960,890
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(8,216		)	(44,705		)	(12,624		)	—			(65,545		)
Losses from futures contracts included in product sales revenue(2)	64,558			5,582			—			—			70,140
Affiliate management fee revenue	(1,000		)	(11,328		)	(2,810		)	—			(15,138		)
Total revenue from contracts with customers under ASC 606	$	1,421,468		$	402,593		$	129,039		$	(2,753	)	$	1,950,347

⁽¹⁾ Lease revenue in 2018 is accounted for under ASC 840, Leases.

⁽²⁾ The impact on product sales revenue from futures contracts falls under the guidance of ASC 815, Derivatives and Hedging.

	Nine Months Ended September 30, 2019
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation	$	578,024		$	262,551		$	—		$	—		$	840,575
Terminalling	136,435			13,145			2,535			—			152,115
Storage	77,698			104,661			103,933			(3,835		)	282,457
Ancillary services	83,308			19,796			20,671			—			123,775
Lease revenue	8,237			53,950			12,520			—			74,707
Transportation and terminals revenue	883,702			454,103			139,659			(3,835		)	1,473,629
Product sales revenue	473,122			19,351			5,318			—			497,791
Affiliate management fee revenue	1,314			10,724			3,772			—			15,810
Total revenue	1,358,138			484,178			148,749			(3,835		)	1,987,230
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(8,237		)	(53,950		)	(12,520		)	—			(74,707		)
Losses from futures contracts included in product sales revenue(2)	39,761			1,743			—			—			41,504
Affiliate management fee revenue	(1,314		)	(10,724		)	(3,772		)	—			(15,810		)
Total revenue from contracts with customers under ASC 606	$	1,388,348		$	421,247		$	132,457		$	(3,835	)	$	1,938,217

⁽¹⁾ Lease revenue in 2019 is accounted for under ASC 842, Leases.

⁽²⁾ The impact on product sales revenue from futures contracts falls under the guidance of ASC 815, Derivatives and Hedging.

Balance Sheet Disclosures

The following table summarizes our accounts receivable, contract assets and contract liabilities resulting from contracts with customers (in thousands):

	December 31, 2018		September 30, 2019
Accounts receivable from contracts with customers	$	102,684	$	129,017
Contract assets	$	8,487	$	7,685
Contract liabilities	$	122,129	$	110,519

For the three and nine months ended September 30, 2019, we recognized $6.0 million and $90.0 million of transportation and terminals revenue that was recorded in deferred revenue as of December 31, 2018.

Unfulfilled Performance Obligations

The following table provides the aggregate amount of the transaction price allocated to our unfulfilled performance obligations (“UPOs”) as of September 30, 2019 by operating segment, including the range of years remaining on our contracts with customers and an estimate of revenues expected to be recognized over the next 12 months (dollars in thousands):

	Refined Products		Crude Oil		Marine Storage		Total
Balances at September 30, 2019	$	2,034,378	$	1,206,147	$	223,219	$	3,463,744
Remaining terms	1 - 19 years		1 - 10 years		1 - 5 years
Estimated revenues from UPOs to be recognized in the next 12 months	$	289,478	$	337,928	$	122,047	$	749,453

XML

Derivative Financial Instruments (Derivatives And Hedging-Overall-Subsequent Measurement) (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Gain (Loss) on Derivative, Net	$ 8,135	$ (12,689)	$ (59,829)	$ (54,082)
Commodity Contract [Member] | Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Gain (Loss) on Derivative, Net	17,626	(24,354)	(41,504)	(70,140)
Commodity Contract [Member] | Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Gain (Loss) on Derivative, Net	(5,581)	11,665	(9,456)	16,058
Energy Related Derivative [Member] | Other Operating Income (Expense) [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Gain (Loss) on Derivative, Net	$ (3,910)	$ 0	$ (8,869)	$ 0

XML

Leases Direct Financing Lease (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Leases [Abstract]
Total minimum lease payments receivable	$ 16,158	$ 17,468
Less: Unearned income	2,961	3,422
Recorded net investment in sales-type lease	13,197	14,046
Other accounts receivable	1,177	1,138
Long-term receivables	12,020	12,908
Total	13,197	$ 14,046
2019	400
2020	1,700
2021	1,700
2022	1,700
2023	1,700
Thereafter	$ 8,700

XML

Derivative Financial Instruments (Schedule Of NYMEX Contracts And Butane Price Swap Purchase Agreements) (Details) bbl in Millions	Sep. 30, 2019 bbl
Economic Hedges [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount	4.5
Economic Hedges Futures [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount	1.5

XML

Revenue from Contract with Customers (Performance Obligations) (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 3,463,744
Refined Products Segment [Member]
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	2,034,378
Crude Oil Pipeline and Terminals Segment [Member]
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	1,206,147
Marine Storage Segment [Member]
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 223,219

XML

Organization, Description of Business and Basis of Presentation (Narrative) (Details) bbl in Millions, $ in Millions	Jan. 01, 2019 USD ($)	Sep. 30, 2019 Terminal bbl mi
Refined Products Segment [Member]
Organization and Description of Business [Line Items]
Number of Pipeline Terminals | Terminal		53
Number of Independent Terminals | Terminal		25
Refined Products Segment [Member] | Refined Products Transportation Services [Member]
Organization and Description of Business [Line Items]
Pipeline Length | mi		9,700
Refined Products Segment [Member] | Ammonia Transportation Services [Member]
Organization and Description of Business [Line Items]
Pipeline Length | mi		1,100
Crude Oil Pipeline and Terminals Segment [Member]
Organization and Description of Business [Line Items]
Pipeline Length | mi		2,200
Storage Capacity		33
Contracted Storage		21
Pipeline, Length - Wholly Owned | mi		1,000
Storage Capacity - Wholly Owned		28
Contracted Storage - Wholly Owned		19
Marine Storage Segment [Member]
Organization and Description of Business [Line Items]
Number of Independent Terminals | Terminal		6
Storage Capacity		27
Storage Capacity - Wholly Owned		25
Number of Independent Terminals - Wholly Owned | Terminal		5
Accounting Standards Update 2016-02 [Member] | Assets, Total [Member]
Organization and Description of Business [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $	$ 172
Accounting Standards Update 2016-02 [Member] | Liabilities, Total [Member]
Organization and Description of Business [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $	$ 172

XML

Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule Of NYMEX Contracts And Butane Price Swap Purchase Agreements

Our open futures contracts at September 30, 2019 were as follows:

Type of Contract/Accounting Methodology	Product Represented by the Contract and Associated Barrels	Maturity Dates
Futures - Economic Hedges	4.5 million barrels of refined products and crude oil	Between October 2019 and April 2020
Futures - Economic Hedges	1.5 million barrels of butane and natural gasoline	Between October 2019 and April 2020

Derivatives and Offset Amounts

A schedule of the derivative amounts we have offset and the deposit amounts we could offset under a master netting arrangement are provided below as of December 31, 2018 and September 30, 2019 (in thousands):

Description	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts of Assets (Liabilities) Offset in the Consolidated Balance Sheets			Net Amounts of Assets (Liabilities) Presented in the Consolidated Balance Sheets		Margin Deposit Amounts Not Offset in the Consolidated Balance Sheets			Net Asset Amount(1)
As of 12/31/2018	$	62,166	$	(7,155	)	$	55,011	$	(37,328	)	$	17,683
As of 9/30/2019	$	16,978	$	(12,139	)	$	4,839	$	21,811		$	26,650

(1) Amount represents the maximum loss we would incur if all of our counterparties failed to perform on their derivative contracts.

Basis Derivative Agreement

During 2019, we entered into a basis derivative agreement with a joint venture co-owner’s affiliate, and, contemporaneously, that affiliate entered into an intrastate transportation services agreement with the joint venture. Settlements under the basis derivative agreement are determined based on the basis differential of crude oil prices at different market locations and a notional volume of 30,000 barrels per day. As a result, we account for this agreement as a derivative. The agreement will expire in early 2022. We recognize the changes in fair value of this agreement based on forward price curves for crude oil in West Texas and the Houston Gulf Coast in other operating income (expense) in our consolidated statements of income. The liability for this agreement at September 30, 2019 was $17.8 million.

Derivative Gains Included in Accumulated Other Comprehensive Loss (AOCL)

The changes in derivative activity included in AOCL for the three and nine months ended September 30, 2018 and 2019 were as follows (in thousands):

 

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Derivative Losses Included in AOCL	2018			2019			2018			2019
Beginning balance	$	(25,165	)	$	(36,287	)	$	(33,755	)	$	(26,480	)
Net gain (loss) on cash flow hedges	6,852			(14,181		)	13,963			(25,216		)
Reclassification of net loss on cash flow hedges to income	740			699			2,219			1,927
Ending balance	$	(17,573	)	$	(49,769	)	$	(17,573	)	$	(49,769	)

Derivatives and Hedging-Cash Flow Hedges

The following is a summary of the effect on our consolidated statements of income for the three and nine months ended September 30, 2018 and 2019 of derivatives that were designated as cash flow hedges (in thousands):

	Interest Rate Contracts
	Amount of Gain (Loss) Recognized in AOCL on Derivatives		Location of Loss Reclassified from AOCL into  Income	Amount of Loss Reclassified from AOCL into Income
Three Months Ended September 30, 2018	$	6,852	Interest expense	$	(740	)

Three Months Ended September 30, 2019 $ (14,181 ) Interest expense $ (699 )

Nine Months Ended September 30, 2018 $ 13,963 Interest expense $ (2,219 )

Nine Months Ended September 30, 2019 $ (25,216 ) Interest expense $ (1,927 )

Derivatives and Hedging-Overall-Subsequent Measurement

The following table provides a summary of the effect on our consolidated statements of income for the three and nine months ended September 30, 2018 and 2019 of derivatives that were not designated as hedging instruments (in thousands):

		Amount of Gain (Loss) Recognized on Derivatives
		Three Months Ended						Nine Months Ended
	Location of Gain (Loss) Recognized on Derivatives	September 30,						September 30,
Derivative Instrument		2018			2019			2018			2019
Futures contracts	Product sales revenue	$	(24,354	)	$	17,626		$	(70,140	)	$	(41,504	)
Futures contracts	Cost of product sales	11,665			(5,581		)	16,058			(9,456		)
Basis derivative agreement	Other operating income (expense)	—			(3,910		)	—			(8,869		)
	Total	$	(12,689	)	$	8,135		$	(54,082	)	$	(59,829	)

Derivatives and Hedging-Designated

The following table provides a summary of the fair value of derivatives, which are presented on a net basis in our consolidated balance sheets, that were designated as hedging instruments as of December 31, 2018 (in thousands). There were no balances outstanding at September 30, 2019.

	December 31, 2018
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Energy commodity derivatives contracts, net	$	462	Energy commodity derivatives contracts, net	$	—
Interest rate contracts	Other current assets	312		Other current liabilities	8,438
	Total	$	774	Total	$	8,438

The following tables provide a summary of the fair value of derivatives, which are presented on a net basis in our consolidated balance sheets, that were not designated as hedging instruments as of December 31, 2018 and September 30, 2019 (in thousands):

	December 31, 2018
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Energy commodity derivatives contracts, net	$	61,704	Energy commodity derivatives contracts, net	$	7,155
	September 30, 2019
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Energy commodity derivatives contracts, net	$	16,978	Energy commodity derivatives contracts, net	$	12,139
Basis derivative agreement	Other current assets	—		Other current liabilities	8,957
Basis derivative agreement	Other noncurrent assets	—		Other noncurrent liabilities	8,798
	Total	$	16,978	Total	$	29,894

XML

Inventory

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Inventory

Inventory

Inventory at December 31, 2018 and September 30, 2019 was as follows (in thousands): 

	December 31, 2018		September 30, 2019
Refined products	$	92,751	$	106,406
Liquefied petroleum gases	46,612		47,057
Transmix	28,497		32,849
Crude oil	11,220		13,260
Additives	6,655		6,380
Total inventory	$	185,735	$	205,952

XML

Derivative Financial Instruments

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Interest Rate Derivatives

We periodically enter into interest rate derivatives to hedge the fair value of debt or hedge against variability in

interest rates. For interest rate cash flow hedges, we record the unrealized gains or losses as an adjustment to other comprehensive income. The realized gains and losses from our cash flow hedges are recognized into earnings as an adjustment to our periodic interest expense over the life of the related debt issuance. For fair value hedges on long-term debt, we record the unrealized gains or losses as an adjustment to long-term debt, and realized amounts as an adjustment to our periodic interest expense. Adjustments resulting from discontinued hedges continue to be recognized in accordance with their historic hedging relationships.

In third quarter 2019, upon issuance of our $500.0 million of 3.95% notes due 2050, we terminated and settled treasury lock agreements we had previously entered into to protect against the variability of interest payments on this anticipated debt issuance for a loss of $25.3 million, which was included in our statements of cash flows as a net payment on financial derivatives.  These agreements were accounted for as cash flow hedges. The loss was recorded to other comprehensive income (loss) and will be recognized into earnings as an adjustment to our periodic interest expense over the life of the associated notes.

In first quarter 2019, upon issuance of $500.0 million of 4.85% notes due 2049, we terminated and settled treasury lock agreements that we had previously entered into to protect against the variability of interest payments on this anticipated debt issuance for a loss of $8.0 million, which was included in our statements of cash flows as a net payment on financial derivatives. These agreements were accounted for as cash flow hedges. The loss was

recorded to other comprehensive income (loss) and will be recognized into earnings as an adjustment to our periodic interest expense over the life of the associated notes.

Commodity Derivatives

Our butane blending activities produce gasoline, and we can reasonably estimate the timing and quantities of sales of these products. We use a combination of exchange-traded commodities futures contracts and forward purchase and sale contracts to help manage commodity price changes and mitigate the risk of decline in the product margin realized from our butane blending activities. Further, certain of our other commercial operations generate petroleum products, and we also use futures contracts to hedge against price changes for some of these commodities.

Forward physical purchase and sale contracts that qualify for and are elected as normal purchases and sales are accounted for using traditional accrual accounting, whereby changes in the mark-to-market values of such contracts are not recognized in income; rather the revenues and expenses associated with such transactions are recognized during the period when commodities are physically delivered or received. Forward physical commodity contracts subject to this exception are evaluated for the probability of future delivery and are periodically tested once the forecasted period has passed to determine whether similar forward contracts are probable of physical delivery in the future.

We record the effective portion of the gains or losses for commodity-based contracts designated as fair value hedges as adjustments to the assets being hedged and the ineffective portions as well as amounts excluded from the assessment of hedge effectiveness as adjustments to other income or expense. We recognize the change in fair value of economic hedges that hedge against changes in the price of petroleum products that we expect to sell or purchase in the future currently in earnings as adjustments to product sales revenue, cost of product sales or operating expenses, as applicable.

Our open futures contracts at September 30, 2019 were as follows:

Type of Contract/Accounting Methodology	Product Represented by the Contract and Associated Barrels	Maturity Dates
Futures - Economic Hedges	4.5 million barrels of refined products and crude oil	Between October 2019 and April 2020
Futures - Economic Hedges	1.5 million barrels of butane and natural gasoline	Between October 2019 and April 2020

Energy Commodity Derivatives Contracts and Deposits Offsets

At September 30, 2019, we had made margin deposits of $21.8 million for our future contracts with our counterparties, which were recorded as current assets under energy commodity derivatives deposits on our consolidated balance sheets. At December 31, 2018, we held margin deposits of $37.3 million for our future contracts with our counterparties, which were recorded as current liabilities under energy commodity derivatives deposits on our consolidated balance sheets. We have the right to offset the combined fair values of our open futures contracts against our margin deposits under a master netting arrangement for each counterparty; however, we have elected to present the combined fair values of our open futures contracts separately from the related margin deposits on our consolidated balance sheets. Additionally, we have the right to offset the fair values of our futures contracts together for each counterparty, which we have elected to do, and we report the combined net balances on our consolidated balance sheets. A schedule of the derivative amounts we have offset and the deposit amounts we could offset under a master netting arrangement are provided below as of December 31, 2018 and September 30, 2019 (in thousands):

Description	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts of Assets (Liabilities) Offset in the Consolidated Balance Sheets			Net Amounts of Assets (Liabilities) Presented in the Consolidated Balance Sheets		Margin Deposit Amounts Not Offset in the Consolidated Balance Sheets			Net Asset Amount(1)
As of 12/31/2018	$	62,166	$	(7,155	)	$	55,011	$	(37,328	)	$	17,683
As of 9/30/2019	$	16,978	$	(12,139	)	$	4,839	$	21,811		$	26,650

(1) Amount represents the maximum loss we would incur if all of our counterparties failed to perform on their derivative contracts.

Basis Derivative Agreement

During 2019, we entered into a basis derivative agreement with a joint venture co-owner’s affiliate, and, contemporaneously, that affiliate entered into an intrastate transportation services agreement with the joint venture. Settlements under the basis derivative agreement are determined based on the basis differential of crude oil prices at different market locations and a notional volume of 30,000 barrels per day. As a result, we account for this agreement as a derivative. The agreement will expire in early 2022. We recognize the changes in fair value of this agreement based on forward price curves for crude oil in West Texas and the Houston Gulf Coast in other operating income (expense) in our consolidated statements of income. The liability for this agreement at September 30, 2019 was $17.8 million.

Impact of Derivatives on Our Financial Statements

Comprehensive Income

The changes in derivative activity included in AOCL for the three and nine months ended September 30, 2018 and 2019 were as follows (in thousands):

 

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Derivative Losses Included in AOCL	2018			2019			2018			2019
Beginning balance	$	(25,165	)	$	(36,287	)	$	(33,755	)	$	(26,480	)
Net gain (loss) on cash flow hedges	6,852			(14,181		)	13,963			(25,216		)
Reclassification of net loss on cash flow hedges to income	740			699			2,219			1,927
Ending balance	$	(17,573	)	$	(49,769	)	$	(17,573	)	$	(49,769	)

The following is a summary of the effect on our consolidated statements of income for the three and nine months ended September 30, 2018 and 2019 of derivatives that were designated as cash flow hedges (in thousands):

	Interest Rate Contracts
	Amount of Gain (Loss) Recognized in AOCL on Derivatives		Location of Loss Reclassified from AOCL into  Income	Amount of Loss Reclassified from AOCL into Income
Three Months Ended September 30, 2018	$	6,852	Interest expense	$	(740	)

Three Months Ended September 30, 2019 $ (14,181 ) Interest expense $ (699 )

Nine Months Ended September 30, 2018 $ 13,963 Interest expense $ (2,219 )

Nine Months Ended September 30, 2019 $ (25,216 ) Interest expense $ (1,927 )

As of September 30, 2019, the net loss estimated to be classified to interest expense over the next twelve months from AOCL is approximately $3.2 million. This amount relates to the amortization of losses on interest rate contracts over the life of the related debt instruments.

The following table provides a summary of the effect on our consolidated statements of income for the three and nine months ended September 30, 2018 and 2019 of derivatives that were not designated as hedging instruments (in thousands):

		Amount of Gain (Loss) Recognized on Derivatives
		Three Months Ended						Nine Months Ended
	Location of Gain (Loss) Recognized on Derivatives	September 30,						September 30,
Derivative Instrument		2018			2019			2018			2019
Futures contracts	Product sales revenue	$	(24,354	)	$	17,626		$	(70,140	)	$	(41,504	)
Futures contracts	Cost of product sales	11,665			(5,581		)	16,058			(9,456		)
Basis derivative agreement	Other operating income (expense)	—			(3,910		)	—			(8,869		)
	Total	$	(12,689	)	$	8,135		$	(54,082	)	$	(59,829	)

The impact of the derivatives in the above table was reflected as cash from operations on our consolidated statements of cash flows.

Balance Sheets

The following table provides a summary of the fair value of derivatives, which are presented on a net basis in our consolidated balance sheets, that were designated as hedging instruments as of December 31, 2018 (in thousands). There were no balances outstanding at September 30, 2019.

	December 31, 2018
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Energy commodity derivatives contracts, net	$	462	Energy commodity derivatives contracts, net	$	—
Interest rate contracts	Other current assets	312		Other current liabilities	8,438
	Total	$	774	Total	$	8,438

The following tables provide a summary of the fair value of derivatives, which are presented on a net basis in our consolidated balance sheets, that were not designated as hedging instruments as of December 31, 2018 and September 30, 2019 (in thousands):

	December 31, 2018
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Energy commodity derivatives contracts, net	$	61,704	Energy commodity derivatives contracts, net	$	7,155
	September 30, 2019
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Energy commodity derivatives contracts, net	$	16,978	Energy commodity derivatives contracts, net	$	12,139
Basis derivative agreement	Other current assets	—		Other current liabilities	8,957
Basis derivative agreement	Other noncurrent assets	—		Other noncurrent liabilities	8,798
	Total	$	16,978	Total	$	29,894

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Organization, Description of Business And Basis Of Presentation

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Description of Business and Basis of Presentation

Organization, Description of Business and Basis of Presentation

Organization

Unless indicated otherwise, the terms “our,” “we,” “us” and similar language refer to Magellan Midstream Partners, L.P. together with its subsidiaries. Magellan Midstream Partners, L.P. is a Delaware limited partnership, and its limited partner units are traded on the New York Stock Exchange under the ticker symbol “MMP.” Magellan GP, LLC, a wholly-owned Delaware limited liability company, serves as its general partner.

Description of Business

We are principally engaged in the transportation, storage and distribution of refined petroleum products and crude oil.  As of September 30, 2019, our asset portfolio consisted of:

• our refined products segment, comprised of our approximately 9,700-mile refined products pipeline system with 53 terminals as well as 25 independent terminals not connected to our pipeline system and our 1,100-mile ammonia pipeline system;

• our crude oil segment, comprised of approximately 2,200 miles of crude oil pipelines, a condensate splitter and 33 million barrels of aggregate storage capacity, of which approximately 21 million barrels are used for contract storage. Approximately 1,000 miles of these pipelines, the condensate splitter and 28 million barrels of this storage capacity (including 19 million barrels used for contract storage) are wholly-owned, with the remainder owned through joint ventures; and

• our marine storage segment, consisting of six marine terminals located along coastal waterways with an aggregate storage capacity of approximately 27 million barrels. Five of these terminals and approximately 25 million barrels of this storage capacity are wholly-owned, with the remainder owned through joint ventures.

Terminology common in our industry includes the following terms, which describe products that we transport, store and distribute through our pipelines and terminals:

• refined products are the output from refineries and are primarily used as fuels by consumers. Refined products include gasoline, diesel fuel, aviation fuel, kerosene and heating oil.  Collectively, diesel fuel, kerosene and heating oil are referred to as distillates;

• liquefied petroleum gases, or LPGs, are produced as by-products of the crude oil refining process and in connection with natural gas production. LPGs include butane and propane;

• blendstocks are blended with refined products to change or enhance their characteristics such as increasing a gasoline’s octane or oxygen content. Blendstocks include alkylates, oxygenates and natural gasoline;

• heavy oils and feedstocks are used as burner fuels or feedstocks for further processing by refineries and petrochemical facilities. Heavy oils and feedstocks include No. 6 fuel oil and vacuum gas oil;

• crude oil, which includes condensate, is used as feedstock by refineries, splitters and petrochemical facilities; and

• biofuels, such as ethanol and biodiesel, are typically blended with other refined products as required by government mandates.

We use the term petroleum products to describe any, or a combination, of the above-noted products.

Basis of Presentation

In the opinion of management, our accompanying consolidated financial statements which are unaudited, except for the consolidated balance sheet as of December 31, 2018, which is derived from our audited financial statements, include all normal and recurring adjustments necessary to present fairly our financial position as of September 30, 2019, the results of operations for the three and nine months ended September 30, 2018 and 2019 and cash flows for the nine months ended September 30, 2018 and 2019. The results of operations for the nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019 for several reasons. Profits from our butane blending activities are realized largely during the first and fourth quarters of each year. Additionally, gasoline demand, which drives transportation volumes and revenues on our refined products pipeline system, generally trends higher during the summer driving months. Further, the volatility of commodity prices impacts the profits from our commodity activities and the volume of petroleum products we transport on our pipelines.

Pursuant to the rules and regulations of the Securities and Exchange Commission, the financial statements in this report do not include all of the information and notes normally included with financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Use of Estimates

The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities that exist at the date of our consolidated financial statements, as well as their impact on the reported amounts of revenue and expense during the reporting periods. Actual results could differ from those estimates.

New Accounting Pronouncements - Adopted by us on January 1, 2019

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This ASU requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases, with the exception of short-term leases. The new accounting model for lessors remains largely the same, although some changes have been made to align it with the new lessee model and the new revenue recognition guidance. This update also requires companies to include additional disclosures regarding their lessee and lessor agreements. We adopted this standard on January 1, 2019, and it did not have a material impact on our consolidated statements of income or our leverage ratio as defined in our credit agreement. Adoption of this ASU resulted in an initial increase in our assets and liabilities by approximately $172 million due to the recognition of right-of-use assets and lease liabilities. See Note 7 – Leases for our lease disclosures.

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Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 135,486	$ 218,283
Trade accounts receivable	131,746	104,164
Other accounts receivable	22,379	25,007
Inventory	205,952	185,735
Energy commodity derivatives contracts, net	4,839	55,011
Energy commodity derivatives deposits	21,811	0
Other current assets	45,631	58,143
Total current assets	567,844	646,343
Property, plant and equipment	8,248,181	7,628,592
Less: accumulated depreciation	1,983,694	1,830,411
Net property, plant and equipment	6,264,487	5,798,181
Investments in non-controlled entities	1,206,040	1,076,306
Right-of-use asset, operating leases	162,463	0
Long-term receivables	20,789	20,844
Goodwill	53,260	53,260
Other intangibles (less accumulated amortization of $2,979 and $5,588 at December 31, 2018 and September 30, 2019, respectively)	48,565	51,174
Restricted cash	56,006	90,978
Other noncurrent assets	12,732	10,451
Total assets	8,392,186	7,747,537
Current liabilities:
Accounts payable	205,410	138,735
Accrued payroll and benefits	56,677	70,276
Accrued interest payable	48,198	63,258
Accrued taxes other than income	63,375	53,093
Environmental liabilities	7,752	9,153
Deferred revenue	107,852	121,085
Accrued product liabilities	108,884	75,482
Energy commodity derivatives deposits	0	37,328
Current portion of operating lease liability	22,997	0
Current portion of long-term debt, net	0	59,489
Other current liabilities	59,500	48,657
Total current liabilities	680,645	676,556
Long-term operating lease liability	135,689	0
Long-term debt, net	4,705,775	4,211,380
Long-term pension and benefits	131,676	122,580
Other noncurrent liabilities	55,085	82,240
Environmental liabilities	8,860	11,347
Commitments and contingencies
Partners’ capital:
Limited partner unitholders (228,195 units and 228,403 units outstanding at December 31, 2018 and September 30, 2019, respectively)	2,822,401	2,763,925
Accumulated other comprehensive loss	(147,945)	(120,491)
Total partners’ capital	2,674,456	2,643,434
Total liabilities and partners’ capital	$ 8,392,186	$ 7,747,537

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Leases Lessor, Future Minimum Rentals (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Leases [Abstract]
2019	$ 9,624
2020	36,614
2021	36,560
2022	23,855
2023	7,663
Thereafter	15,631
Total	$ 129,947

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Derivative Financial Instruments (Narrative) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($) bbl	Mar. 31, 2019 USD ($)	Sep. 30, 2019 USD ($) bbl	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Derivative [Line Items]
Debt Instrument, Face Amount	$ 4,750,000,000		$ 4,750,000,000		$ 4,300,000,000
Net receipt (payment) on financial derivatives			(33,342,000)	$ 20,925,000
Good Faith and Margin Deposits with Broker-Dealers	21,811,000		21,811,000		0
Energy commodity derivatives deposits	0		0		37,328,000
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months	$ (3,200,000)		$ (3,200,000)
Energy Related Derivative [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount | bbl	30,000		30,000
Derivative Liability	$ 17,800,000		$ 17,800,000
Three Point Nine Five Percentage Notes Due Two Thousand Fifty [Member]
Derivative [Line Items]
Debt Instrument, Face Amount	$ 500,000,000.0		$ 500,000,000.0		0
Debt Instrument, Interest Rate, Stated Percentage	3.95%		3.95%
Three Point Nine Five Percentage Notes Due Two Thousand Fifty [Member] | Cash Flow Hedging [Member] | Interest Rate Contract [Member]
Derivative [Line Items]
Net receipt (payment) on financial derivatives	$ (25,300,000)
4.85% Notes Due 2049 [Member]
Derivative [Line Items]
Debt Instrument, Face Amount	$ 500,000,000	$ 500,000,000.0	$ 500,000,000		$ 0
Debt Instrument, Interest Rate, Stated Percentage	4.85%	4.85%	4.85%
4.85% Notes Due 2049 [Member] | Cash Flow Hedging [Member] | Interest Rate Contract [Member]
Derivative [Line Items]
Net receipt (payment) on financial derivatives		$ (8,000,000.0)

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Derivative Financial Instruments (Derivatives And Hedging-Cash Flow Hedges) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Net gain (loss) on cash flow hedges	$ (14,181)	$ 6,852	$ (25,216)	$ 13,963
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Interest Rate Contract [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Net gain (loss) on cash flow hedges	(14,181)	6,852	(25,216)	13,963
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Interest Rate Contract [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Interest Rate Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net	$ (699)	$ (740)	$ (1,927)	$ (2,219)

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Long-Term Incentive Plan (Narrative) (Details) - shares	Feb. 01, 2019	Sep. 30, 2019
Share-based Payment Arrangement [Abstract]
Limited partners' capital account, units authorized for issuance (in shares)		11,900,000
Limited partner unitholders, units remaining available (in shares)		1,600,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	347,473
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years

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Partners' Capital and Distributions (Schedule Of Distributions) (Details) - USD ($) $ / shares in Units, $ in Thousands									9 Months Ended		12 Months Ended
	Nov. 14, 2019	Aug. 14, 2019	May 15, 2019	Feb. 14, 2019	Nov. 14, 2018	Aug. 14, 2018	May 15, 2018	Feb. 14, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2019	Dec. 31, 2018
Distribution Made to Limited Partner [Line Items]
Cash distribution per unit (in dollars per share)		$ 1.0125	$ 1.0050	$ 0.9975	$ 0.9775	$ 0.9575	$ 0.9375	$ 0.9200	$ 3.0150	$ 2.8150		$ 3.7925
Total Cash Distribution to Limited Partners		$ 231,258	$ 229,545	$ 227,832	$ 223,061	$ 218,497	$ 213,933	$ 209,940	$ 688,635	$ 642,370		$ 865,431
Scenario, Forecast
Distribution Made to Limited Partner [Line Items]
Cash distribution per unit (in dollars per share)	$ 1.02										$ 4.0350
Total Cash Distribution to Limited Partners	$ 232,971										$ 921,606

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Leases Operating Lease, Other Disclosure (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Dec. 31, 2018
Related Party Transaction [Line Items]
Fixed lease cost	$ 7,400	$ 22,326
Short-term lease cost	405	1,215
Variable lease cost	1,009	2,041
Total lease cost	8,814	25,582
Current lease liability	22,997	22,997	$ 0
Long-term lease liability	135,689	135,689	0
Right-of-use asset	$ 162,463	162,463	$ 0
Operating cash flows from operating leases		$ 25,959
Weighted average remaining lease term (years)	7 years	7 years
Weighted-average discount rate	4.10%	4.10%
Third Party Leases
Related Party Transaction [Line Items]
Fixed lease cost	$ 4,792	$ 14,375
Short-term lease cost	405	1,215
Variable lease cost	1,009	2,041
Total lease cost	6,206	17,631
Current lease liability	14,925	14,925
Long-term lease liability	83,417	83,417
Right-of-use asset	$ 102,119	102,119
Operating cash flows from operating leases		$ 17,990
Weighted average remaining lease term (years)	6 years	6 years
Weighted-average discount rate	3.90%	3.90%
Seabrook Logistics, LLC [Member] | Equity Method Investee [Member] | Related Party Leases
Related Party Transaction [Line Items]
Fixed lease cost	$ 2,608	$ 7,951
Short-term lease cost	0	0
Variable lease cost	0	0
Total lease cost	2,608	7,951
Current lease liability	8,072	8,072
Long-term lease liability	52,272	52,272
Right-of-use asset	$ 60,344	60,344
Operating cash flows from operating leases		$ 7,969
Weighted average remaining lease term (years)	9 years	9 years
Weighted-average discount rate	4.30%	4.30%

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Schedule Of Consolidated Net Periodic Benefit Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Pension Plan [Member]
Components of net periodic benefit costs:
Service cost	$ 6,260	$ 6,424	$ 19,145	$ 28,393
Interest cost	3,026	2,816	9,136	12,054
Expected return on plan assets	(2,354)	(3,055)	(7,045)	(9,057)
Amortization of prior service credit	(46)	(45)	(136)	(136)
Amortization of actuarial loss	1,352	1,659	4,137	8,182
Settlement cost	439	0	2,499	0
Net periodic benefit cost	8,677	7,799	27,736	39,436
Other Postretirement Benefits Plan [Member]
Components of net periodic benefit costs:
Service cost	48	58	145	174
Interest cost	126	104	380	312
Expected return on plan assets	0	0	0	0
Amortization of prior service credit	0	0	0	0
Amortization of actuarial loss	60	147	248	441
Settlement cost	0	0	0	0
Net periodic benefit cost	$ 234	$ 309	$ 773	$ 927

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Segment Disclosures (Schedule Of Business Segment Reporting Information) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Reporting Information [Line Items]
Revenues	$ 656,596	$ 638,020	$ 1,987,230	$ 1,960,890
Operating expenses	169,387	172,115	484,341	475,256
Cost of product sales	108,757	120,510	430,727	473,781
Other operating income (expense)	379	0	(1,538)	0
(Earnings) losses of non-controlled entities	(50,189)	(53,795)	(122,229)	(130,843)
Operating margin	428,262	399,190	1,195,929	1,142,696
Depreciation, amortization and impairment	56,627	56,228	181,028	161,726
G&A expense	51,156	47,389	149,534	147,235
Operating profit	320,479	295,573	865,367	833,735
Operating Segments [Member] | Refined Products Segment [Member]
Segment Reporting Information [Line Items]
Revenues	445,669	430,311	1,358,138	1,366,126
Operating expenses	111,839	112,279	317,328	319,670
Cost of product sales	98,144	106,756	404,814	434,632
Other operating income (expense)	(1,046)		(2,398)
(Earnings) losses of non-controlled entities	(3,373)	(3,393)	2,275	(5,614)
Operating margin	240,105	214,669	636,119	617,438
Depreciation, amortization and impairment	31,752	30,440	102,024	89,855
G&A expense	30,650	28,751	89,385	90,825
Operating profit	177,703	155,478	444,710	436,758
Operating Segments [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Segment Reporting Information [Line Items]
Revenues	162,861	161,247	484,178	453,044
Operating expenses	42,529	45,195	123,569	109,963
Cost of product sales	8,341	11,590	19,715	32,401
Other operating income (expense)	3,629		8,112
(Earnings) losses of non-controlled entities	(46,047)	(49,420)	(122,084)	(122,879)
Operating margin	154,409	153,882	454,866	433,559
Depreciation, amortization and impairment	14,810	15,145	45,812	40,648
G&A expense	13,666	12,766	40,378	38,127
Operating profit	125,933	125,971	368,676	354,784
Operating Segments [Member] | Marine Storage Segment [Member]
Segment Reporting Information [Line Items]
Revenues	49,622	47,385	148,749	144,473
Operating expenses	17,921	17,178	51,404	52,835
Cost of product sales	2,272	2,164	6,198	6,748
Other operating income (expense)	(2,204)		(7,252)
(Earnings) losses of non-controlled entities	(769)	(982)	(2,420)	(2,350)
Operating margin	32,402	29,025	100,819	87,240
Depreciation, amortization and impairment	8,719	9,029	29,067	26,764
G&A expense	6,840	5,872	19,771	18,283
Operating profit	16,843	14,124	51,981	42,193
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	(1,556)	(923)	(3,835)	(2,753)
Operating expenses	(2,902)	(2,537)	(7,960)	(7,212)
Cost of product sales	0	0	0	0
Other operating income (expense)	0		0
(Earnings) losses of non-controlled entities	0	0	0	0
Operating margin	1,346	1,614	4,125	4,459
Depreciation, amortization and impairment	1,346	1,614	4,125	4,459
G&A expense	0	0	0	0
Operating profit	0	0	0	0
Service [Member]
Segment Reporting Information [Line Items]
Revenues	506,432	488,775	1,473,629	1,392,960
Service [Member] | Operating Segments [Member] | Refined Products Segment [Member]
Segment Reporting Information [Line Items]
Revenues	310,482	300,034	883,702	851,492
Service [Member] | Operating Segments [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Segment Reporting Information [Line Items]
Revenues	150,926	145,118	454,103	409,329
Service [Member] | Operating Segments [Member] | Marine Storage Segment [Member]
Segment Reporting Information [Line Items]
Revenues	46,580	44,546	139,659	134,892
Service [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	(1,556)	(923)	(3,835)	(2,753)
Product [Member]
Segment Reporting Information [Line Items]
Revenues	144,807	144,403	497,791	552,792
Product [Member] | Operating Segments [Member] | Refined Products Segment [Member]
Segment Reporting Information [Line Items]
Revenues	134,755	129,926	473,122	513,634
Product [Member] | Operating Segments [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Segment Reporting Information [Line Items]
Revenues	8,343	12,666	19,351	32,387
Product [Member] | Operating Segments [Member] | Marine Storage Segment [Member]
Segment Reporting Information [Line Items]
Revenues	1,709	1,811	5,318	6,771
Product [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	0	0	0	0
Product and Service, Other [Member]
Segment Reporting Information [Line Items]
Revenues	5,357	4,842	15,810	15,138
Product and Service, Other [Member] | Operating Segments [Member] | Refined Products Segment [Member]
Segment Reporting Information [Line Items]
Revenues	432	351	1,314	1,000
Product and Service, Other [Member] | Operating Segments [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Segment Reporting Information [Line Items]
Revenues	3,592	3,463	10,724	11,328
Product and Service, Other [Member] | Operating Segments [Member] | Marine Storage Segment [Member]
Segment Reporting Information [Line Items]
Revenues	1,333	1,028	3,772	2,810
Product and Service, Other [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	$ 0	$ 0	$ 0	$ 0

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Fair Value

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Fair Value Methods and Assumptions - Financial Assets and Liabilities.

We used the following methods and assumptions in estimating fair value of our financial assets and liabilities:

• Energy commodity derivatives contracts. These include exchange-traded futures contracts related to petroleum products. These contracts are carried at fair value on our consolidated balance sheets and are valued based on quoted prices in active markets. See Note 9 – Derivative Financial Instruments for further disclosures regarding these contracts.

• Interest rate contracts. These include forward-starting interest rate hedge agreements to protect against the risk of variability of interest payments on future debt. These contracts are carried at fair value on our consolidated balance sheets and are valued based on an assumed exchange, at the

end of each period, in an orderly transaction with a participant in the market in which the financial instrument is traded. The exchange value was calculated using present value techniques on estimated future cash flows based on forward interest rate curves. See Note 9 – Derivative Financial Instruments for further disclosures regarding these contracts.

• Basis Derivative Agreement. During 2019, we entered into a basis derivative agreement with a joint venture co-owner’s affiliate, and, contemporaneously, that affiliate entered into an intrastate transportation services agreement with the joint venture. Settlements under the basis derivative agreement are determined based on the basis differential of crude oil prices at different market locations and a notional volume of 30,000 barrels per day (see Note 9 - Derivative Financial Instruments for further disclosures regarding this agreement). The fair value of this derivative was calculated based on observable market data inputs, including published commodity pricing data and market interest rates. The key inputs in the fair value calculation include the forward price curves for crude oil, the implied forward correlation in crude oil prices between West Texas and the Houston Gulf Coast, and the implied forward volatility for crude oil futures contracts.

• Long-term receivables. These primarily include payments receivable under a sales-type leasing arrangement and cost reimbursement payments receivable. These receivables were recorded at fair value on our consolidated balance sheets, using then-current market rates to estimate the present value of future cash flows.

• Guarantees. At December 31, 2018, these guarantees primarily included an indemnification agreement we entered into in connection with the partial sale of our interest in BridgeTex. This indemnification was recorded at fair value on our consolidated balance sheets upon initial recognition, using probability-weighted potential outcome scenarios to estimate our possible liability for specific events covered by this indemnification. In first quarter 2019, certain litigation subject to the indemnification agreement was settled, which resulted in our paying $5.0 million under the indemnification agreement and recognizing the reduction of the remaining $11.0 million liability as an additional gain on disposition of assets on our consolidated statements of income.

• Debt. The fair value of our publicly traded notes was based on the prices of those notes at December 31, 2018 and September 30, 2019; however, where recent observable market trades were not available, prices were determined using adjustments to the last traded value for that debt issuance or by adjustments to the prices of similar debt instruments of peer entities that are actively traded. The carrying amount of borrowings, if any, under our revolving credit facility and our commercial paper program approximates fair value due to the frequent repricing of these obligations.

Fair Value Measurements - Financial Assets and Liabilities

The following tables summarize the carrying amounts, fair values and fair value measurements recorded or disclosed as of December 31, 2018 and September 30, 2019 based on the three levels established by ASC 820, Fair Value Measurements and Disclosures (in thousands):

	December 31, 2018
Assets (Liabilities)							Fair Value Measurements using:
	Carrying Amount			Fair Value			Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Energy commodity derivatives contracts	$	55,011		$	55,011		$	55,011	$	—		$	—
Interest rate contracts	$	(8,126	)	$	(8,126	)	$	—	$	(8,126	)	$	—
Long-term receivables	$	20,844		$	20,844		$	—	$	—		$	20,844
Guarantees	$	(16,409	)	$	(16,409	)	$	—	$	—		$	(16,409	)
Debt	$	(4,270,869	)	$	(4,224,373	)	$	—	$	(4,224,373	)	$	—

	September 30, 2019
Assets (Liabilities)							Fair Value Measurements using:
	Carrying Amount			Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Energy commodity derivatives contracts	$	4,839		$	4,839		$	4,839	$	—		$	—
Basis derivative agreement	$	(17,755	)	$	(17,755	)	$	—	$	(17,755	)	$	—
Long-term receivables	$	20,789		$	20,789		$	—	$	—		$	20,789
Guarantees	$	(408	)	$	(408	)	$	—	$	—		$	(408	)
Debt	$	(4,705,775	)	$	(5,185,750	)	$	—	$	(5,185,750	)	$	—

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Revenue from Contract with Customers (Tables)

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue from External Customers by Products and Services

The following tables provide details of our revenues disaggregated by key activities that comprise our performance obligations by operating segment (in thousands):

	Three Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation	$	197,235		$	91,086		$	—		$	—		$	288,321
Terminalling	46,213			2,528			616			—			49,357
Storage	25,137			29,094			33,890			(923		)	87,198
Ancillary services	28,808			6,278			5,857			—			40,943
Lease revenue	2,641			16,132			4,183			—			22,956
Transportation and terminals revenue	300,034			145,118			44,546			(923		)	488,775
Product sales revenue	129,926			12,666			1,811			—			144,403
Affiliate management fee revenue	351			3,463			1,028			—			4,842
Total revenue	430,311			161,247			47,385			(923		)	638,020
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(2,641		)	(16,132		)	(4,183		)	—			(22,956		)
Losses from futures contracts included in product sales revenue(2)	24,253			102			—			—			24,355
Affiliate management fee revenue	(351		)	(3,463		)	(1,028		)	—			(4,842		)
Total revenue from contracts with customers under ASC 606	$	451,572		$	141,754		$	42,174		$	(923	)	$	634,577

⁽¹⁾ Lease revenue in 2018 is accounted for under ASC 840, Leases.

⁽²⁾ The impact on product sales revenue from futures contracts falls under the guidance of ASC 815, Derivatives and Hedging.

	Three Months Ended September 30, 2019
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation	$	205,824		$	85,859		$	—		$	—		$	291,683
Terminalling	47,483			3,176			946			—			51,605
Storage	25,788			35,371			34,230			(1,556		)	93,833
Ancillary services	29,284			7,164			7,205			—			43,653
Lease revenue	2,103			19,356			4,199			—			25,658
Transportation and terminals revenue	310,482			150,926			46,580			(1,556		)	506,432
Product sales revenue	134,755			8,343			1,709			—			144,807
Affiliate management fee revenue	432			3,592			1,333			—			5,357
Total revenue	445,669			162,861			49,622			(1,556		)	656,596
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(2,103		)	(19,356		)	(4,199		)	—			(25,658		)
(Gains) losses from futures contracts included in product sales revenue(2)	(17,061		)	(564		)	—			—			(17,625		)
Affiliate management fee revenue	(432		)	(3,592		)	(1,333		)	—			(5,357		)
Total revenue from contracts with customers under ASC 606	$	426,073		$	139,349		$	44,090		$	(1,556	)	$	607,956

⁽¹⁾ Lease revenue in 2019 is accounted for under ASC 842, Leases.

⁽²⁾ The impact on product sales revenue from futures contracts falls under the guidance of ASC 815, Derivatives and Hedging.

	Nine Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation	$	548,733		$	254,964		$	—		$	—		$	803,697
Terminalling	136,135			2,528			1,920			—			140,583
Storage	75,353			87,620			101,420			(2,753		)	261,640
Ancillary services	83,055			19,512			18,928			—			121,495
Lease revenue	8,216			44,705			12,624			—			65,545
Transportation and terminals revenue	851,492			409,329			134,892			(2,753		)	1,392,960
Product sales revenue	513,634			32,387			6,771			—			552,792
Affiliate management fee revenue	1,000			11,328			2,810			—			15,138
Total revenue	1,366,126			453,044			144,473			(2,753		)	1,960,890
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(8,216		)	(44,705		)	(12,624		)	—			(65,545		)
Losses from futures contracts included in product sales revenue(2)	64,558			5,582			—			—			70,140
Affiliate management fee revenue	(1,000		)	(11,328		)	(2,810		)	—			(15,138		)
Total revenue from contracts with customers under ASC 606	$	1,421,468		$	402,593		$	129,039		$	(2,753	)	$	1,950,347

⁽¹⁾ Lease revenue in 2018 is accounted for under ASC 840, Leases.

⁽²⁾ The impact on product sales revenue from futures contracts falls under the guidance of ASC 815, Derivatives and Hedging.

	Nine Months Ended September 30, 2019
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation	$	578,024		$	262,551		$	—		$	—		$	840,575
Terminalling	136,435			13,145			2,535			—			152,115
Storage	77,698			104,661			103,933			(3,835		)	282,457
Ancillary services	83,308			19,796			20,671			—			123,775
Lease revenue	8,237			53,950			12,520			—			74,707
Transportation and terminals revenue	883,702			454,103			139,659			(3,835		)	1,473,629
Product sales revenue	473,122			19,351			5,318			—			497,791
Affiliate management fee revenue	1,314			10,724			3,772			—			15,810
Total revenue	1,358,138			484,178			148,749			(3,835		)	1,987,230
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(8,237		)	(53,950		)	(12,520		)	—			(74,707		)
Losses from futures contracts included in product sales revenue(2)	39,761			1,743			—			—			41,504
Affiliate management fee revenue	(1,314		)	(10,724		)	(3,772		)	—			(15,810		)
Total revenue from contracts with customers under ASC 606	$	1,388,348		$	421,247		$	132,457		$	(3,835	)	$	1,938,217

⁽¹⁾ Lease revenue in 2019 is accounted for under ASC 842, Leases.

⁽²⁾ The impact on product sales revenue from futures contracts falls under the guidance of ASC 815, Derivatives and Hedging.

Contract with Customer, Asset and Liability

The following table summarizes our accounts receivable, contract assets and contract liabilities resulting from contracts with customers (in thousands):

	December 31, 2018		September 30, 2019
Accounts receivable from contracts with customers	$	102,684	$	129,017
Contract assets	$	8,487	$	7,685
Contract liabilities	$	122,129	$	110,519

Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction

The following table provides the aggregate amount of the transaction price allocated to our unfulfilled performance obligations (“UPOs”) as of September 30, 2019 by operating segment, including the range of years remaining on our contracts with customers and an estimate of revenues expected to be recognized over the next 12 months (dollars in thousands):

	Refined Products		Crude Oil		Marine Storage		Total
Balances at September 30, 2019	$	2,034,378	$	1,206,147	$	223,219	$	3,463,744
Remaining terms	1 - 19 years		1 - 10 years		1 - 5 years
Estimated revenues from UPOs to be recognized in the next 12 months	$	289,478	$	337,928	$	122,047	$	749,453

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Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2019

Retirement Benefits [Abstract]

Schedule of Consolidated Net Periodic Benefit Costs

Net periodic benefit expense for the three and nine months ended September 30, 2018 and 2019 was as follows (in thousands):

 

	Three Months Ended					Three Months Ended
	September 30, 2018					September 30, 2019
	Pension Benefits			Other  Postretirement Benefits		Pension Benefits			Other  Postretirement Benefits
Components of net periodic benefit costs:
Service cost	$	6,424		$	58	$	6,260		$	48
Interest cost	2,816			104		3,026			126
Expected return on plan assets	(3,055		)	—		(2,354		)	—
Amortization of prior service credit	(45		)	—		(46		)	—
Amortization of actuarial loss	1,659			147		1,352			60
Settlement cost	—			—		439			—
Net periodic benefit cost	$	7,799		$	309	$	8,677		$	234

 

	Nine Months Ended					Nine Months Ended
	September 30, 2018					September 30, 2019
	Pension Benefits			Other  Postretirement Benefits		Pension Benefits			Other  Postretirement Benefits
Components of net periodic benefit costs:
Service cost	$	28,393		$	174	$	19,145		$	145
Interest cost	12,054			312		9,136			380
Expected return on plan assets	(9,057		)	—		(7,045		)	—
Amortization of prior service credit	(136		)	—		(136		)	—
Amortization of actuarial loss	8,182			441		4,137			248
Settlement cost	—			—		2,499			—
Net periodic benefit cost	$	39,436		$	927	$	27,736		$	773

The service component of our net periodic benefit costs is presented in operating expense and G&A expense, and the non-service components are presented in other (income) expense in our consolidated statements of income.

Schedule of Amounts Recognized in Other Comprehensive Loss

The changes in accumulated other comprehensive loss (“AOCL”) related to employee benefit plan assets and benefit obligations for the three and nine months ended September 30, 2018 and 2019 were as follows (in thousands):

	Three Months Ended						Three Months Ended
	September 30, 2018						September 30, 2019
Gains (Losses) Included in AOCL	Pension Benefits			Other Postretirement Benefits			Pension Benefits			Other Postretirement Benefits
Beginning balance	$	(96,352	)	$	(6,036	)	$	(93,876	)	$	(6,105	)
Amortization of prior service credit	(45		)	—			(46		)	—
Amortization of actuarial loss	1,659			147			1,352			60
Settlement cost	—			—			439			—
Ending balance	$	(94,738	)	$	(5,889	)	$	(92,131	)	$	(6,045	)

	Nine Months Ended						Nine Months Ended
	September 30, 2018						September 30, 2019
Gains (Losses) Included in AOCL	Pension Benefits			Other Postretirement Benefits			Pension Benefits			Other Postretirement Benefits
Beginning balance	$	(97,226	)	$	(6,597	)	$	(88,602	)	$	(5,409	)
Net actuarial gain (loss)	(5,558		)	267			(10,029		)	(884		)
Amortization of prior service credit	(136		)	—			(136		)	—
Amortization of actuarial loss	8,182			441			4,137			248
Settlement cost	—			—			2,499			—
Ending balance	$	(94,738	)	$	(5,889	)	$	(92,131	)	$	(6,045	)

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Long-Term Incentive Plan

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Long-Term Incentive Plan

Long-Term Incentive Plan

The compensation committee of our general partner’s board of directors administers our long-term incentive plan (“LTIP”) covering certain of our employees and the independent directors of our general partner. The LTIP primarily consists of phantom units and permits the grant of awards covering an aggregate payout of 11.9 million of our limited partner units. The estimated units remaining available under the LTIP at September 30, 2019 total 1.6 million.

Our equity-based incentive compensation expense was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2019		2018		2019
Performance-based awards	$	7,087	$	5,162	$	22,176	$	18,123
Time-based awards	846		1,611		2,436		4,454
Total	$	7,933	$	6,773	$	24,612	$	22,577
Allocation of LTIP expense on our consolidated statements of income:
G&A expense	$	7,867	$	6,704	$	24,412	$	22,377
Operating expense	66		69		200		200
Total	$	7,933	$	6,773	$	24,612	$	22,577

On February 1, 2019, 347,473 unit awards were granted pursuant to our LTIP. These awards included both performance-based and time-based awards and have a three-year vesting period that will end on December 31, 2021.

Basic and Diluted Net Income Per Limited Partner Unit

The difference between our actual limited partner units outstanding and our weighted-average number of limited partner units outstanding used to calculate basic net income per unit is due to the impact of: (i) the unit awards issued to non-employee directors and (ii) the weighted average effect of units actually issued during a period.  The difference between the weighted-average number of limited partner units outstanding used for basic and diluted net income per unit calculations on our consolidated statements of income is primarily due to the dilutive effect of unit awards associated with our LTIP that have not yet vested.

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Segment Disclosures

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Disclosures

Segment Disclosures

Our reportable segments are strategic business units that offer different products and services. Our segments are managed separately as each segment requires different marketing strategies and business knowledge.

We believe that investors benefit from having access to the same financial measures used by management. Management evaluates performance based on segment operating margin. Operating margin, which is presented in the following tables, is an important measure used by management to evaluate the economic performance of our core operations. Operating margin is not a GAAP measure, but the components of operating margin are computed using amounts that are determined in accordance with GAAP. A reconciliation of operating margin to operating profit, which is its nearest comparable GAAP financial measure, is included in the tables below (presented in thousands). Operating profit includes depreciation, amortization and impairment expense and general and administrative (“G&A”) expense that management does not consider when evaluating the core profitability of our separate operating segments.

	Three Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	300,034		$	145,118		$	44,546		$	(923	)	$	488,775
Product sales revenue	129,926			12,666			1,811			—			144,403
Affiliate management fee revenue	351			3,463			1,028			—			4,842
Total revenue	430,311			161,247			47,385			(923		)	638,020
Operating expenses	112,279			45,195			17,178			(2,537		)	172,115
Cost of product sales	106,756			11,590			2,164			—			120,510
Earnings of non-controlled entities	(3,393		)	(49,420		)	(982		)	—			(53,795		)
Operating margin	214,669			153,882			29,025			1,614			399,190
Depreciation, amortization and impairment expense	30,440			15,145			9,029			1,614			56,228
G&A expense	28,751			12,766			5,872			—			47,389
Operating profit	$	155,478		$	125,971		$	14,124		$	—		$	295,573

	Three Months Ended September 30, 2019
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	310,482		$	150,926		$	46,580		$	(1,556	)	$	506,432
Product sales revenue	134,755			8,343			1,709			—			144,807
Affiliate management fee revenue	432			3,592			1,333			—			5,357
Total revenue	445,669			162,861			49,622			(1,556		)	656,596
Operating expenses	111,839			42,529			17,921			(2,902		)	169,387
Cost of product sales	98,144			8,341			2,272			—			108,757
Other operating (income) expense	(1,046		)	3,629			(2,204		)	—			379
Earnings of non-controlled entities	(3,373		)	(46,047		)	(769		)	—			(50,189		)
Operating margin	240,105			154,409			32,402			1,346			428,262
Depreciation, amortization and impairment expense	31,752			14,810			8,719			1,346			56,627
G&A expense	30,650			13,666			6,840			—			51,156
Operating profit	$	177,703		$	125,933		$	16,843		$	—		$	320,479

	Nine Months Ended September 30, 2018
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	851,492		$	409,329		$	134,892		$	(2,753	)	$	1,392,960
Product sales revenue	513,634			32,387			6,771			—			552,792
Affiliate management fee revenue	1,000			11,328			2,810			—			15,138
Total revenue	1,366,126			453,044			144,473			(2,753		)	1,960,890
Operating expenses	319,670			109,963			52,835			(7,212		)	475,256
Cost of product sales	434,632			32,401			6,748			—			473,781
Earnings of non-controlled entities	(5,614		)	(122,879		)	(2,350		)	—			(130,843		)
Operating margin	617,438			433,559			87,240			4,459			1,142,696
Depreciation, amortization and impairment expense	89,855			40,648			26,764			4,459			161,726
G&A expense	90,825			38,127			18,283			—			147,235
Operating profit	$	436,758		$	354,784		$	42,193		$	—		$	833,735

 

	Nine Months Ended September 30, 2019
	Refined Products			Crude Oil			Marine Storage			Intersegment Eliminations			Total
Transportation and terminals revenue	$	883,702		$	454,103		$	139,659		$	(3,835	)	$	1,473,629
Product sales revenue	473,122			19,351			5,318			—			497,791
Affiliate management fee revenue	1,314			10,724			3,772			—			15,810
Total revenue	1,358,138			484,178			148,749			(3,835		)	1,987,230
Operating expenses	317,328			123,569			51,404			(7,960		)	484,341
Cost of product sales	404,814			19,715			6,198			—			430,727
Other operating (income) expense	(2,398		)	8,112			(7,252		)	—			(1,538		)
(Earnings) losses of non-controlled entities	2,275			(122,084		)	(2,420		)	—			(122,229		)
Operating margin	636,119			454,866			100,819			4,125			1,195,929
Depreciation, amortization and impairment expense	102,024			45,812			29,067			4,125			181,028
G&A expense	89,385			40,378			19,771			—			149,534
Operating profit	$	444,710		$	368,676		$	51,981		$	—		$	865,367

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Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

Leases

As of January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842) using the modified retrospective method of adoption. We elected to use the transition option that allows us to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment, if any, to the opening balance of retained earnings in the year of adoption. Comparable periods continue to be presented under the guidance of the previous standard, ASC 840. ASC 842 requires lessees to recognize a lease liability and right-of-use asset on the balance sheet for operating leases. For lessors, the new accounting model remains largely the same, although some changes have been made to align it with the new lessee model and the new revenue recognition guidance, ASC 606, Revenue from Contracts with Customers. Our adoption of ASC 842 did not result in any material adjustments to retained earnings, changes in the timing or amounts of lease costs or changes to our leverage ratio as defined in our credit agreement.

We have both lessee and lessor arrangements. Our leases are evaluated at inception or at any subsequent modification. Depending on the terms, leases are classified as either operating or finance leases if we are the lessee, or as operating, sales-type or direct financing leases if we are the lessor, as appropriate under ASC 842.  Our lessee arrangements primarily include a terminalling and storage contract where we have exclusive use of dedicated tankage, leased pipelines and office buildings. Our lessor arrangements include pipeline capacity and storage contracts and our condensate splitter tolling agreement that qualify as operating leases under ASC 842. In addition, we have a long-term throughput and deficiency agreement with a customer that is being accounted for as a sales-type lease under ASC 842.

In accordance with ASC 842, we have made an accounting policy election to not apply the new standard to lessee arrangements with a term of one year or less and no purchase option that is reasonably certain of exercise. We will continue to account for these short-term arrangements by recognizing payments and expenses as incurred, without recording a lease liability and right-of-use asset.

We have also made an accounting policy election for both our lessee and lessor arrangements to combine lease and non-lease components. This election is applied to all of our lease arrangements as our non-lease components are not material and do not result in significant timing differences in the recognition of rental expenses or income.

Operating Leases – Lessee

We recognize a lease liability for each lease based on the present value of remaining minimum fixed rental payments (which includes payments under any renewal option that we are reasonably certain to exercise), using a discount rate that approximates the rate of interest we would have to pay to borrow on a collateralized basis over a similar term. We also recognize a right-of-use asset for each lease, valued at the lease liability, adjusted for prepaid or accrued rent balances existing at the time of initial recognition. The lease liability and right-of-use asset are reduced over the term of the lease as payments are made and the assets are used.

Related Party Operating Lease. In 2018, we entered into a long-term terminalling and storage contract with Seabrook for exclusive use of dedicated tankage that provides our customers with crude oil storage capacity and dock access for crude oil imports and exports on the Texas Gulf Coast.

Minimum fixed rental payments are recognized on a straight-line basis over the life of the lease as costs and expenses on our consolidated statements of income. Variable and short-term rental payments are recognized as costs and expenses as they are incurred. Variable payments consist of amounts that exceed the contractual minimum rental payment (for example, payment increases tied to a change in a market index). Future minimum rental payments under operating leases with initial terms greater than one year as of September 30, 2019 are as follows (in thousands):

	Third Party Leases		Seabrook Lease		All Leases
2019	$	2,643	$	2,607	$	5,250
2020	18,607		10,429		29,036
2021	18,994		8,973		27,967
2022	18,870		6,612		25,482
2023	18,349		6,612		24,961
Thereafter	34,086		37,473		71,559
Total future minimum rental payments	111,549		72,706		184,255
Present value discount	13,207		12,362		25,569
Total operating lease liability	$	98,342	$	60,344	$	158,686

The following tables provide further information about our operating leases (dollars in thousands):

	Three Months Ended September 30, 2019						Nine Months Ended September 30, 2019
	Third Party Leases		Seabrook Lease		All Leases		Third Party Leases		Seabrook Lease		All Leases
Fixed lease cost	$	4,792	$	2,608	$	7,400	$	14,375	$	7,951	$	22,326
Short-term lease cost	405		—		405		1,215		—		1,215
Variable lease cost	1,009		—		1,009		2,041		—		2,041
Total lease cost	$	6,206	$	2,608	$	8,814	$	17,631	$	7,951	$	25,582

	As of and for the Nine Months Ended September 30, 2019
	Third Party Leases		Seabrook Lease		All Leases
Current lease liability	$	14,925	$	8,072	$	22,997
Long-term lease liability	$	83,417	$	52,272	$	135,689
Right-of-use asset	$	102,119	$	60,344	$	162,463
Operating cash flows for operating leases	$	17,990	7,969		$	25,959
Weighted average remaining lease term (years)	6		9		7
Weighted-average discount rate	3.9%		4.3%		4.1%

Rent expense was $11.8 million and $30.3 million, respectively, for three and nine months ended September 30, 2018 and was recognized in accordance with ASC 840.

Operating Leases – Lessor

We recognize fixed rental income on a straight-line basis over the life of the lease as revenue on our consolidated statements of income. Variable rental payments are recognized as revenue in the period in which the circumstances on which the variable lease payments are based occur.

Future minimum payments receivable under operating leases with initial terms greater than one year as of September 30, 2019 are estimated as follows (in thousands):

2019	$	9,624
2020	36,614
2021	36,560
2022	23,855
2023	7,663
Thereafter	15,631
Total	$	129,947

We recognized variable lease revenue of $15.4 million and $43.3 million, respectively, for the three and nine months ended September 30, 2019, primarily related to our condensate splitter in Corpus Christi, Texas.

At September 30, 2019, property, plant and equipment utilized by our customers in operating lease arrangements consisted of: $224.1 million of processing equipment; $72.9 million of storage tanks; $49.2 million of pipeline and station equipment; and $29.9 million of other assets. The processing equipment primarily relates to our condensate splitter.

Sales-Type Lease - Lessor

We entered into a long-term throughput and deficiency agreement with a customer on a pipeline and related assets that we constructed in Texas and New Mexico, which contains minimum payment commitments. Our customer has the option to purchase this pipeline and related assets at the end of the lease term for a nominal amount. This agreement was previously accounted for as a direct-financing lease under ASC 840 and is now being accounted for as a sales-type lease under ASC 842. The net investment under this arrangement as of December 31, 2018 and September 30, 2019 was as follows (in thousands):

	December 31, 2018		September 30, 2019
Total minimum lease payments receivable	$	17,468	$	16,158
Less: Unearned income	3,422		2,961
Recorded net investment in sales-type lease	$	14,046	$	13,197

The net investment in sales-type leases was classified in the consolidated balance sheets as follows (in thousands):

	December 31, 2018		September 30, 2019
Other accounts receivable	$	1,138	$	1,177
Long-term receivables	12,908		12,020
Total	$	14,046	$	13,197

Future minimum payments receivable under this lease are $0.4 million in 2019, $1.7 million in 2020, $1.7 million in 2021, $1.7 million in 2022, $1.7 million in 2023 and $8.7 million thereafter.

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Revenue from Contract with Customers ( Disaggregation of Revenue) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Revenue	$ 656,596	$ 638,020	$ 1,987,230	$ 1,960,890
Operating Leases, Income Statement, Lease Revenue		22,956		65,545
Operating Lease, Lease Income	25,658		74,707
(Gains) losses from futures contracts included in product sales revenue	(17,625)	24,355	41,504	70,140
Affiliate management fee revenue	5,357	4,842	15,810	15,138
Revenue from Contract with Customer, Including Assessed Tax	607,956	634,577	1,938,217	1,950,347
Service [Member]
Disaggregation of Revenue [Line Items]
Revenue	506,432	488,775	1,473,629	1,392,960
Product [Member]
Disaggregation of Revenue [Line Items]
Revenue	144,807	144,403	497,791	552,792
Product and Service, Other [Member]
Disaggregation of Revenue [Line Items]
Revenue	5,357	4,842	15,810	15,138
Operating Segments [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	445,669	430,311	1,358,138	1,366,126
Operating Leases, Income Statement, Lease Revenue		2,641		8,216
Operating Lease, Lease Income	2,103		8,237
(Gains) losses from futures contracts included in product sales revenue	(17,061)	24,253	39,761	64,558
Affiliate management fee revenue	432	351	1,314	1,000
Revenue from Contract with Customer, Including Assessed Tax	426,073	451,572	1,388,348	1,421,468
Operating Segments [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	162,861	161,247	484,178	453,044
Operating Leases, Income Statement, Lease Revenue		16,132		44,705
Operating Lease, Lease Income	19,356		53,950
(Gains) losses from futures contracts included in product sales revenue	(564)	102	1,743	5,582
Affiliate management fee revenue	3,592	3,463	10,724	11,328
Revenue from Contract with Customer, Including Assessed Tax	139,349	141,754	421,247	402,593
Operating Segments [Member] | Marine Storage Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	49,622	47,385	148,749	144,473
Operating Leases, Income Statement, Lease Revenue		4,183		12,624
Operating Lease, Lease Income	4,199		12,520
(Gains) losses from futures contracts included in product sales revenue	0	0	0	0
Affiliate management fee revenue	1,333	1,028	3,772	2,810
Revenue from Contract with Customer, Including Assessed Tax	44,090	42,174	132,457	129,039
Operating Segments [Member] | Service [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	310,482	300,034	883,702	851,492
Operating Segments [Member] | Service [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	150,926	145,118	454,103	409,329
Operating Segments [Member] | Service [Member] | Marine Storage Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	46,580	44,546	139,659	134,892
Operating Segments [Member] | Product [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	134,755	129,926	473,122	513,634
Operating Segments [Member] | Product [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	8,343	12,666	19,351	32,387
Operating Segments [Member] | Product [Member] | Marine Storage Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,709	1,811	5,318	6,771
Operating Segments [Member] | Product and Service, Other [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	432	351	1,314	1,000
Operating Segments [Member] | Product and Service, Other [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	3,592	3,463	10,724	11,328
Operating Segments [Member] | Product and Service, Other [Member] | Marine Storage Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,333	1,028	3,772	2,810
Intersegment Eliminations [Member]
Disaggregation of Revenue [Line Items]
Revenue	(1,556)	(923)	(3,835)	(2,753)
Operating Leases, Income Statement, Lease Revenue		0		0
Operating Lease, Lease Income	0		0
(Gains) losses from futures contracts included in product sales revenue	0	0	0	0
Affiliate management fee revenue	0	0	0	0
Revenue from Contract with Customer, Including Assessed Tax	(1,556)	(923)	(3,835)	(2,753)
Intersegment Eliminations [Member] | Service [Member]
Disaggregation of Revenue [Line Items]
Revenue	(1,556)	(923)	(3,835)	(2,753)
Intersegment Eliminations [Member] | Product [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Intersegment Eliminations [Member] | Product and Service, Other [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Transferred over Time [Member] | Service [Member]
Disaggregation of Revenue [Line Items]
Revenue	506,432	488,775	1,473,629	1,392,960
Transferred over Time [Member] | Transportation [Member]
Disaggregation of Revenue [Line Items]
Revenue	291,683	288,321	840,575	803,697
Transferred over Time [Member] | Terminalling [Member]
Disaggregation of Revenue [Line Items]
Revenue	51,605	49,357	152,115	140,583
Transferred over Time [Member] | Storage [Member]
Disaggregation of Revenue [Line Items]
Revenue	93,833	87,198	282,457	261,640
Transferred over Time [Member] | Ancillary Services [Member]
Disaggregation of Revenue [Line Items]
Revenue	43,653	40,943	123,775	121,495
Transferred over Time [Member] | Lease Revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue	25,658	22,956	74,707	65,545
Transferred over Time [Member] | Operating Segments [Member] | Service [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	310,482	300,034	883,702	851,492
Transferred over Time [Member] | Operating Segments [Member] | Service [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	150,926	145,118	454,103	409,329
Transferred over Time [Member] | Operating Segments [Member] | Service [Member] | Marine Storage Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	46,580	44,546	139,659	134,892
Transferred over Time [Member] | Operating Segments [Member] | Transportation [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	205,824	197,235	578,024	548,733
Transferred over Time [Member] | Operating Segments [Member] | Transportation [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	85,859	91,086	262,551	254,964
Transferred over Time [Member] | Operating Segments [Member] | Transportation [Member] | Marine Storage Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Transferred over Time [Member] | Operating Segments [Member] | Terminalling [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	47,483	46,213	136,435	136,135
Transferred over Time [Member] | Operating Segments [Member] | Terminalling [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	3,176	2,528	13,145	2,528
Transferred over Time [Member] | Operating Segments [Member] | Terminalling [Member] | Marine Storage Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	946	616	2,535	1,920
Transferred over Time [Member] | Operating Segments [Member] | Storage [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	25,788	25,137	77,698	75,353
Transferred over Time [Member] | Operating Segments [Member] | Storage [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	35,371	29,094	104,661	87,620
Transferred over Time [Member] | Operating Segments [Member] | Storage [Member] | Marine Storage Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	34,230	33,890	103,933	101,420
Transferred over Time [Member] | Operating Segments [Member] | Ancillary Services [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	29,284	28,808	83,308	83,055
Transferred over Time [Member] | Operating Segments [Member] | Ancillary Services [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	7,164	6,278	19,796	19,512
Transferred over Time [Member] | Operating Segments [Member] | Ancillary Services [Member] | Marine Storage Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	7,205	5,857	20,671	18,928
Transferred over Time [Member] | Operating Segments [Member] | Lease Revenue [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	2,103	2,641	8,237	8,216
Transferred over Time [Member] | Operating Segments [Member] | Lease Revenue [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	19,356	16,132	53,950	44,705
Transferred over Time [Member] | Operating Segments [Member] | Lease Revenue [Member] | Marine Storage Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	4,199	4,183	12,520	12,624
Transferred over Time [Member] | Intersegment Eliminations [Member] | Service [Member]
Disaggregation of Revenue [Line Items]
Revenue	(1,556)	(923)	(3,835)	(2,753)
Transferred over Time [Member] | Intersegment Eliminations [Member] | Transportation [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Transferred over Time [Member] | Intersegment Eliminations [Member] | Terminalling [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Transferred over Time [Member] | Intersegment Eliminations [Member] | Storage [Member]
Disaggregation of Revenue [Line Items]
Revenue	(1,556)	(923)	(3,835)	(2,753)
Transferred over Time [Member] | Intersegment Eliminations [Member] | Ancillary Services [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Transferred over Time [Member] | Intersegment Eliminations [Member] | Lease Revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Transferred at Point in Time [Member] | Product [Member]
Disaggregation of Revenue [Line Items]
Revenue	144,807	144,403	497,791	552,792
Transferred at Point in Time [Member] | Operating Segments [Member] | Product [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	134,755	129,926	473,122	513,634
Transferred at Point in Time [Member] | Operating Segments [Member] | Product [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	8,343	12,666	19,351	32,387
Transferred at Point in Time [Member] | Operating Segments [Member] | Product [Member] | Marine Storage Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,709	1,811	5,318	6,771
Transferred at Point in Time [Member] | Intersegment Eliminations [Member] | Product [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 0	$ 0	$ 0	$ 0

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Partners' Capital and Distributions (Tables)

9 Months Ended

Sep. 30, 2019

Partners' Capital Notes [Abstract]

Schedule of Capital Units

The following table details the changes in the number of our limited partner units outstanding from December 31, 2018 through September 30, 2019:

Limited partner units outstanding on December 31, 2018	228,195,160
February 2019–Settlement of employee LTIP awards	199,792
During 2019–Other(a)	8,476
Limited partner units outstanding on September 30, 2019	228,403,428

(a) Limited partner units issued to settle the equity-based retainers paid to four independent directors of our general partner.

Schedule of Distributions

Distributions we paid during 2018 and 2019 were as follows (in thousands, except per unit amounts):

 

Payment Date	Per Unit Cash Distribution Amount			Total Cash Distribution to Limited Partners
02/14/2018		$	0.9200		$	209,940
05/15/2018		0.9375			213,933
08/14/2018		0.9575			218,497
Through 09/30/2018		2.8150			642,370
11/14/2018		0.9775			223,061
Total		$	3.7925		$	865,431
02/14/2019		$	0.9975		$	227,832
05/15/2019		1.0050			229,545
08/14/2019		1.0125			231,258
Through 09/30/2019		3.0150			688,635
11/14/2019(a)		1.0200			232,971
Total		$	4.0350		$	921,606

(a) Our general partner’s board of directors declared this cash distribution in October 2019 to be paid on November 14, 2019 to unitholders of record at the close of business on November 7, 2019.

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Debt (Consolidated Debt) (Details) - USD ($)	Sep. 30, 2019	Mar. 31, 2019	Feb. 11, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 4,750,000,000			$ 4,300,000,000
Unamortized debt issuance costs	(35,770,000)			(27,070,000)
Net unamortized premium (discount)	(8,455,000)			(2,927,000)
Net unamortized amount of gains from historical fair value hedges	0			866,000
Long-term Debt	4,705,775,000			4,270,869,000
Current portion of long-term debt, net	0			59,489,000
Long-term debt, net	4,705,775,000			4,211,380,000
6.55% Notes due 2019 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 0		$ 550,000,000.0	550,000,000
Debt Instrument, Interest Rate, Stated Percentage	6.55%		6.55%
4.25% Notes Due 2021 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 550,000,000			550,000,000
Debt Instrument, Interest Rate, Stated Percentage	4.25%
3.20% Notes Due 2025 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 250,000,000			250,000,000
Debt Instrument, Interest Rate, Stated Percentage	3.20%
5.00% Notes Due 2026 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 650,000,000			650,000,000
Debt Instrument, Interest Rate, Stated Percentage	5.00%
6.40% Notes Due 2037 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 250,000,000			250,000,000
Debt Instrument, Interest Rate, Stated Percentage	6.40%
4.20% Notes Due 2042 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 250,000,000			250,000,000
Debt Instrument, Interest Rate, Stated Percentage	4.20%
5.15% Notes Due 2043 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 550,000,000			550,000,000
Debt Instrument, Interest Rate, Stated Percentage	5.15%
4.20% Notes Due 2045 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 250,000,000			250,000,000
Debt Instrument, Interest Rate, Stated Percentage	4.20%
4.25% Notes Due 2046 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 500,000,000			500,000,000
Debt Instrument, Interest Rate, Stated Percentage	4.25%
4.20% Notes Due 2047 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 500,000,000			500,000,000
Debt Instrument, Interest Rate, Stated Percentage	4.20%
4.85% Notes Due 2049 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 500,000,000	$ 500,000,000.0		0
Debt Instrument, Interest Rate, Stated Percentage	4.85%	4.85%
3.95% Notes Due 2050 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 500,000,000.0			$ 0
Debt Instrument, Interest Rate, Stated Percentage	3.95%

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Derivative Financial Instruments (Schedule of Derivative Offset Amounts) (Details) - USD ($) $ in Thousands		Sep. 30, 2019	Dec. 31, 2018
Derivative [Line Items]
Energy commodity derivatives deposits		$ 21,811	$ 0
Exchange Traded [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset		16,978	62,166
Derivative Liability, Fair Value, Gross Liability		(12,139)	(7,155)
Derivative Asset, Fair Value, Amount Not Offset Against Collateral		4,839	55,011
Derivative, Collateral, Right to Reclaim Cash			(37,328)
Energy commodity derivatives deposits		21,811
Amount After Offset	[1]	$ 26,650	$ 17,683

[1] Amount represents the maximum loss we would incur if all of our counterparties failed to perform on their derivative contracts.

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Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenues	$ 656,596	$ 638,020	$ 1,987,230	$ 1,960,890
Costs and expenses:
Operating	169,387	172,115	484,341	475,256
Cost of product sales	108,757	120,510	430,727	473,781
Depreciation, amortization and impairment	56,627	56,228	181,028	161,726
General and administrative	51,156	47,389	149,534	147,235
Total costs and expenses	385,927	396,242	1,245,630	1,257,998
Other operating income (expense)	(379)	0	1,538	0
Earnings of non-controlled entities	50,189	53,795	122,229	130,843
Operating profit	320,479	295,573	865,367	833,735
Interest expense	53,750	55,133	165,322	168,535
Interest capitalized	(5,831)	(3,099)	(14,419)	(13,354)
Interest income	(648)	(501)	(2,646)	(1,460)
Gain on disposition of assets	(2,532)	(353,797)	(28,966)	(353,797)
Other (income) expense	2,602	1,694	9,222	10,299
Income before provision for income taxes	273,138	596,143	736,854	1,023,512
Provision for income taxes	100	1,609	2,450	3,659
Net income	$ 273,038	$ 594,534	$ 734,404	$ 1,019,853
Basic net income per limited partner unit (in dollars per share)	$ 1.19	$ 2.60	$ 3.21	$ 4.47
Diluted net income per limited partner unit (in dollars per share)	$ 1.19	$ 2.60	$ 3.21	$ 4.46
Weighted average number of limited partner units outstanding used for basic net income per unit calculation (in dollars per share)	228,720	228,397	228,642	228,368
Weighted average number of limited partner units outstanding used for diluted net income per unit calculation (in dollars per share)	228,754	228,449	228,667	228,412
Service [Member]
Revenues	$ 506,432	$ 488,775	$ 1,473,629	$ 1,392,960
Product [Member]
Revenues	144,807	144,403	497,791	552,792
Product and Service, Other [Member]
Revenues	$ 5,357	$ 4,842	$ 15,810	$ 15,138

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating Activities:
Net income	$ 734,404	$ 1,019,853
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and impairment expense	181,028	161,726
Gain on sale and retirement of assets	(29,227)	(347,541)
Earnings of non-controlled entities	(122,229)	(130,843)
Distributions from operations of non-controlled entities	138,140	147,950
Equity-based incentive compensation expense	22,577	24,612
Settlement cost, amortization of prior service credit and actuarial loss	6,748	8,487
Debt prepayment costs	8,270	0
Changes in operating assets and liabilities:
Trade accounts receivable and other accounts receivable	(24,954)	(8,303)
Inventory	(20,217)	2,979
Accounts payable	29,014	27,498
Accrued payroll and benefits	(13,599)	(2,976)
Accrued interest payable	(15,060)	(21,348)
Accrued taxes other than income	10,282	964
Accrued product liabilities	33,402	(15,964)
Deferred revenue	(13,233)	5,353
Other current and noncurrent assets and liabilities	(2,749)	(8,666)
Net cash provided by operating activities	922,597	863,781
Investing Activities:
Additions to property, plant and equipment, net	(718,605)	(374,320)
Proceeds from sale and disposition of assets	65,574	579,448
Investments in non-controlled entities	(158,145)	(147,048)
Distributions from returns of investments in non-controlled entities	7,500	1,786
Deposits received from undivided joint interest third party	68,928	41,571
Net cash provided (used) by investing activities	(734,748)	101,437
Financing Activities:
Distributions paid	(688,635)	(642,370)
Borrowings under long-term notes	996,405	0
Payments on notes	(550,000)	(250,000)
Debt placement costs	(12,012)	(326)
Net receipt (payment) on financial derivatives	(33,342)	20,925
Payments associated with settlement of equity-based incentive compensation	(9,764)	(9,285)
Debt prepayment costs	(8,270)	0
Net cash used by financing activities	(305,618)	(881,056)
Change in cash, cash equivalents and restricted cash	(117,769)	84,162
Cash, cash equivalents and restricted cash at beginning of period	309,261	176,068
Cash, cash equivalents and restricted cash at end of period	191,492	260,230
Supplemental non-cash investing activities:
Additions to property, plant and equipment	(775,109)	(375,599)
Changes in accounts payable and other current liabilities related to capital expenditures	56,504	1,279
Additions to property, plant and equipment, net	$ (718,605)	$ (374,320)

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Leases (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Leases [Abstract]
Operating Leases, Rent Expense, Net		$ 11,800		$ 30,300
2022	$ 23,855		$ 23,855
Operating Lease, Variable Lease Income	15,400		43,300
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	8,248,181		8,248,181		$ 7,628,592
Other Energy Equipment [Member] | Property Subject to Operating Lease [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	224,100		224,100
Containers [Member] | Property Subject to Operating Lease [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	72,900		72,900
Pipelines [Member] | Property Subject to Operating Lease [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	49,200		49,200
Property, Plant and Equipment, Other Types [Member] | Property Subject to Operating Lease [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 29,900		$ 29,900

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Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Refined products	$ 106,406	$ 92,751
Liquefied petroleum gases	47,057	46,612
Transmix	32,849	28,497
Crude oil	13,260	11,220
Additives	6,380	6,655
Total inventory	$ 205,952	$ 185,735

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Fair Value (Schedule Of Carrying Amounts And Fair Values Of Financial Assets/Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Energy Related Derivative [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability	$ (17,800)
Fair Value, Inputs, Level 1 [Member] | Commodity Contract [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	4,839
Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt	(5,185,750)	$ (4,224,373)
Fair Value, Inputs, Level 2 [Member] | Interest Rate Contract [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability		(8,126)
Fair Value, Inputs, Level 2 [Member] | Energy Related Derivative [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability	(17,755)
Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term receivables	20,789	20,844
Guarantees, Fair Value Disclosure	(408)	(16,409)
Reported Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term receivables	20,789	20,844
Guarantees, Fair Value Disclosure	(408)	(16,409)
Debt	(4,705,775)	(4,270,869)
Reported Value Measurement [Member] | Commodity Contract [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	4,839	55,011
Reported Value Measurement [Member] | Interest Rate Contract [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability		(8,126)
Reported Value Measurement [Member] | Energy Related Derivative [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability	(17,755)
Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term receivables	20,789	20,844
Guarantees, Fair Value Disclosure	(408)	(16,409)
Debt	(5,185,750)	(4,224,373)
Estimate of Fair Value Measurement [Member] | Commodity Contract [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	4,839	55,011
Estimate of Fair Value Measurement [Member] | Interest Rate Contract [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability		(8,126)
Estimate of Fair Value Measurement [Member] | Energy Related Derivative [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability	$ (17,755)
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Commodity Contract [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset		$ 55,011

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Derivative Financial Instruments (Derivatives and Hedging - Designated) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		$ 774
Derivative Liability, Fair Value, Gross Liability		8,438
Designated as Hedging Instrument [Member] | Commodity Contract [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		462
Designated as Hedging Instrument [Member] | Commodity Contract [Member] | Other Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability		0
Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		312
Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability		8,438
Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	$ 16,978
Derivative Liability, Fair Value, Gross Liability	29,894
Not Designated as Hedging Instrument [Member] | Commodity Contract [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	16,978	61,704
Not Designated as Hedging Instrument [Member] | Commodity Contract [Member] | Other Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability	12,139	$ 7,155
Not Designated as Hedging Instrument [Member] | Energy Related Derivative [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	0
Not Designated as Hedging Instrument [Member] | Energy Related Derivative [Member] | Other Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability	8,957
Not Designated as Hedging Instrument [Member] | Energy Related Derivative [Member] | Other Noncurrent Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	0
Not Designated as Hedging Instrument [Member] | Energy Related Derivative [Member] | Other Noncurrent Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability	$ 8,798

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Partners' Capital and Distributions (Narrative) (Details) $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($) shares
Partners' Capital [Abstract]
Amount Authorized Under Equity Distribution Agreement | $	$ 750.0
Equity Distribution Agreement, Units Issued (in shares) | shares	0

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Subsequent Events

9 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Recognizable events

No recognizable events occurred subsequent to September 30, 2019.

Non-recognizable events

Cash Distribution. In October 2019, our general partner’s board of directors declared a quarterly cash distribution of $1.02 per unit for the period of July 1, 2019 through September 30, 2019. This quarterly cash distribution will be paid on November 14, 2019 to unitholders of record on November 7, 2019. The total cash distributions expected to be paid under this declaration are approximately $233.0 million.

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Investments in Non-Controlled Entities (Tables)

9 Months Ended

Sep. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Our investments in non-controlled entities at September 30, 2019 were comprised of:

Entity	Ownership Interest
BridgeTex Pipeline Company, LLC (“BridgeTex”)	30%
Double Eagle Pipeline LLC (“Double Eagle”)	50%
HoustonLink Pipeline Company, LLC (“HoustonLink”)	50%
MVP Terminalling, LLC (“MVP”)	50%
Powder Springs Logistics, LLC (“Powder Springs”)	50%
Saddlehorn Pipeline Company, LLC (“Saddlehorn”)	40%
Seabrook Logistics, LLC (“Seabrook”)	50%
Texas Frontera, LLC (“Texas Frontera”)	50%

We serve as operator of BridgeTex, HoustonLink, MVP, Powder Springs, Saddlehorn, Texas Frontera and the pipeline activities of Seabrook. We receive fees for management services as well as reimbursement or payment to us for certain direct operational payroll and other overhead costs. The management fees we receive are reported as affiliate management fee revenue on our consolidated statements of income. Cost reimbursements we receive from these entities in connection with our operating services are included as reductions to costs and expenses on our consolidated statements of income and totaled $0.9 million and $1.2 million during the three months ended September 30, 2018 and 2019, respectively, and $2.6 million and $3.8 million during the nine months ended September 30, 2018 and 2019, respectively.

We recorded the following revenue and expense transactions from certain of these non-controlled entities in our consolidated statements of income (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2019		2018		2019
Transportation and terminals revenue:
BridgeTex, pipeline capacity and storage	$	9,958	$	10,737	$	29,519	$	31,063
Double Eagle, throughput revenue	$	1,005	$	1,582	$	3,892	$	4,813
Saddlehorn, storage revenue	$	552	$	566	$	1,628	$	1,669
Operating costs:
Seabrook, storage lease and ancillary services	$	3,982	$	6,267	$	3,982	$	19,417
Product sales revenue:
Powder Springs, butane sales	$	—	$	—	$	4,899	$	—
Cost of product sales:
Powder Springs, butane purchases	$	—	$	—	$	410	$	—
Other income:
MVP, easement sale	$	—	$	289	$	—	$	289

Our consolidated balance sheets reflected the following balances related to our investments in non-controlled entities (in thousands):

	December 31, 2018
	Trade Accounts Receivable		Other Accounts Receivable		Other Accounts Payable		Long-Term Receivables
BridgeTex	$	318	$	1,549	$	—	$	—
Double Eagle	$	546	$	—	$	—	$	—
MVP	$	—	$	397	$	—	$	—
Powder Springs	$	—	$	—	$	—	$	2,221
Saddlehorn	$	—	$	183	$	—	$	—
Seabrook	$	—	$	—	$	1,140	$	—

	September 30, 2019
	Trade Accounts Receivable		Other Accounts Receivable		Other Accounts Payable		Long-Term Receivables
BridgeTex	$	385	$	31	$	530	$	—
Double Eagle	$	440	$	—	$	—	$	—
HoustonLink	$	77	$	—	$	—	$	—
MVP	$	—	$	364	$	—	$	—
Powder Springs	$	—	$	10	$	—	$	4,892
Saddlehorn	$	—	$	120	$	—	$	—
Seabrook	$	753	$	332	$	1,223	$	—

The financial results from MVP and Texas Frontera are included in our marine storage segment, the financial results from BridgeTex, Double Eagle, HoustonLink, Saddlehorn and Seabrook are included in our crude oil segment and the financial results from Powder Springs are included in our refined products segment, each as earnings of non-controlled entities.

A summary of our investments in non-controlled entities follows (in thousands):

Investments at 12/31/2018	$	1,076,306
Additional investment	158,145
Indemnification settlement	(5,000		)
Earnings of non-controlled entities:
Proportionate share of earnings	123,621
Amortization of excess investment and capitalized interest	(1,392		)
Earnings of non-controlled entities	122,229
Less:
Distributions from operations of non-controlled entities	138,140
Distributions from returns of investments in non-controlled entities	7,500
Investments at 9/30/2019	$	1,206,040

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Employee Benefit Plans Schedule of Amounts Recognized in Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Changes in AOCL [Roll Forward]
Accumulated other comprehensive loss (Beginning Bal)			$ (120,491)
Net actuarial loss	$ 0	$ 0	(10,913)	$ (5,291)
Amortization of prior service credit	(46)	(45)	(136)	(136)
Amortization of actuarial loss	1,412	1,806	4,385	8,623
Settlement cost	439	0	2,499	0
Accumulated other comprehensive loss (Ending Bal)	(147,945)		(147,945)
Pension Plan [Member]
Changes in AOCL [Roll Forward]
Accumulated other comprehensive loss (Beginning Bal)	(93,876)	(96,352)	(88,602)	(97,226)
Net actuarial loss			(10,029)	(5,558)
Amortization of prior service credit	(46)	(45)	(136)	(136)
Amortization of actuarial loss	1,352	1,659	4,137	8,182
Settlement cost	439	0	2,499	0
Accumulated other comprehensive loss (Ending Bal)	(92,131)	(94,738)	(92,131)	(94,738)
Other Postretirement Benefits Plan [Member]
Changes in AOCL [Roll Forward]
Accumulated other comprehensive loss (Beginning Bal)	(6,105)	(6,036)	(5,409)	(6,597)
Net actuarial loss			(884)	267
Amortization of prior service credit	0	0	0	0
Amortization of actuarial loss	60	147	248	441
Settlement cost	0	0	0	0
Accumulated other comprehensive loss (Ending Bal)	$ (6,045)	$ (5,889)	$ (6,045)	$ (5,889)

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Investments in Non-Controlled Entities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Schedule of Equity Method Investments [Line Items]
Revenues	$ 656,596	$ 638,020	$ 1,987,230	$ 1,960,890
Operating	169,387	172,115	484,341	475,256
Cost of product sales	108,757	120,510	430,727	473,781
Other operating income (expense)	(379)	0	1,538	0
Trade accounts receivable	131,746		131,746		$ 104,164
Other accounts receivable	22,379		22,379		25,007
Long-term receivables	20,789		20,789		20,844
Change in Equity Method Investments [Roll Forward]
Investments at December 31, 2018			1,076,306
Additional investment			158,145
Indemnification settlement			(5,000)
Proportionate share of earnings			123,621
Amortization of excess investment and capitalized interest			(1,392)
Earnings of non-controlled entities	50,189	53,795	122,229	130,843
Distributions from operations of non-controlled entities			138,140	147,950
Distributions from returns of investments in non-controlled entities			7,500	1,786
Investments at June 30, 2019	1,206,040		1,206,040
Service [Member]
Schedule of Equity Method Investments [Line Items]
Revenues	506,432	488,775	1,473,629	1,392,960
Product [Member]
Schedule of Equity Method Investments [Line Items]
Revenues	144,807	144,403	497,791	552,792
Equity Method Investee [Member]
Schedule of Equity Method Investments [Line Items]
Related Party Transaction, Other Revenues from Transactions with Related Party	$ 1,200	900	$ 3,800	2,600
BridgeTex [Member]
Schedule of Equity Method Investments [Line Items]
Interest in equity method investment	30.00%		30.00%
BridgeTex [Member] | Equity Method Investee [Member]
Schedule of Equity Method Investments [Line Items]
Trade accounts receivable	$ 385		$ 385		318
Other accounts receivable	31		31		1,549
Other Accounts Payable	530		530
BridgeTex [Member] | Equity Method Investee [Member] | Service [Member]
Schedule of Equity Method Investments [Line Items]
Revenues	$ 10,737	9,958	$ 31,063	29,519
Double Eagle Pipeline Llc [Member]
Schedule of Equity Method Investments [Line Items]
Interest in equity method investment	50.00%		50.00%
Double Eagle Pipeline Llc [Member] | Equity Method Investee [Member]
Schedule of Equity Method Investments [Line Items]
Trade accounts receivable	$ 440		$ 440		546
Double Eagle Pipeline Llc [Member] | Equity Method Investee [Member] | Service [Member]
Schedule of Equity Method Investments [Line Items]
Revenues	$ 1,582	1,005	$ 4,813	3,892
HoustonLink Pipeline Company LLC [Member]
Schedule of Equity Method Investments [Line Items]
Interest in equity method investment	50.00%		50.00%
HoustonLink Pipeline Company LLC [Member] | Equity Method Investee [Member]
Schedule of Equity Method Investments [Line Items]
Trade accounts receivable	$ 77		$ 77
MVP Terminalling, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Interest in equity method investment	50.00%		50.00%
MVP Terminalling, LLC [Member] | Equity Method Investee [Member]
Schedule of Equity Method Investments [Line Items]
Other operating income (expense)	$ 289	0	$ 289	0
Other accounts receivable	$ 364		$ 364		397
Powder Springs Logistics, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Interest in equity method investment	50.00%		50.00%
Powder Springs Logistics, LLC [Member] | Equity Method Investee [Member]
Schedule of Equity Method Investments [Line Items]
Cost of product sales	$ 0	0	$ 0	410
Other accounts receivable	10		10
Long-term receivables	4,892		4,892		2,221
Powder Springs Logistics, LLC [Member] | Equity Method Investee [Member] | Product [Member]
Schedule of Equity Method Investments [Line Items]
Revenues	$ 0	0	$ 0	4,899
Saddlehorn Pipeline Company [Member]
Schedule of Equity Method Investments [Line Items]
Interest in equity method investment	40.00%		40.00%
Saddlehorn Pipeline Company [Member] | Equity Method Investee [Member]
Schedule of Equity Method Investments [Line Items]
Other accounts receivable	$ 120		$ 120		183
Saddlehorn Pipeline Company [Member] | Equity Method Investee [Member] | Service [Member]
Schedule of Equity Method Investments [Line Items]
Revenues	$ 566	552	$ 1,669	1,628
Seabrook Logistics, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Interest in equity method investment	50.00%		50.00%
Seabrook Logistics, LLC [Member] | Equity Method Investee [Member]
Schedule of Equity Method Investments [Line Items]
Operating	$ 6,267	$ 3,982	$ 19,417	$ 3,982
Trade accounts receivable	753		753
Other accounts receivable	332		332
Other Accounts Payable	$ 1,223		$ 1,223		$ 1,140
Texas Frontera Llc [Member]
Schedule of Equity Method Investments [Line Items]
Interest in equity method investment	50.00%		50.00%

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Commitments and Contingencies (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)	Oct. 04, 2017 facility
Loss Contingencies [Line Items]
Liabilities recognized for estimated environmental costs	$ 16.6		$ 16.6		$ 20.5
Environmental expenses	0.8	$ 5.5	4.2	$ 10.8
Receivables from insurance carriers related to environmental matters	3.0		3.0		4.1
Accounts Receivable [Member]
Loss Contingencies [Line Items]
Receivables from insurance carriers related to environmental matters	1.4		1.4		2.4
Other Noncurrent Assets [Member]
Loss Contingencies [Line Items]
Receivables from insurance carriers related to environmental matters	$ 1.6		$ 1.6		$ 1.7
Powder Springs Logistics, LLC [Member]
Loss Contingencies [Line Items]
Interest in equity method investment	50.00%		50.00%
Powder Springs Logistics, LLC [Member] | Guarantee of Indebtedness of Others [Member] | Equity Method Investee [Member]
Loss Contingencies [Line Items]
Interest in equity method investment	50.00%		50.00%
Guarantor Obligations, Maximum Exposure, Undiscounted	$ 25.0		$ 25.0
Guarantees, Fair Value Disclosure	$ 0.4		$ 0.4
Pending Litigation [Member] | Unfavorable Regulatory Action [Member]
Loss Contingencies [Line Items]
Loss Contingency, Alleged Patent Infringement, Number Of Facilities | facility						9

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Partners' Capital and Distributions (Schedule of Capital Units) (Details)	9 Months Ended
	Sep. 30, 2019 director shares
Increase (Decrease) in Partners' Capital [Roll Forward]
Limited partner units outstanding, beginning balance (in shares)	228,195,160
Limited partner units outstanding, ending balance (in shares)	228,403,428
Management [Member]
Increase (Decrease) in Partners' Capital [Roll Forward]
During 2019–Other (in shares)	199,792
Director [Member]
Increase (Decrease) in Partners' Capital [Roll Forward]
During 2019–Other (in shares)	8,476
Partners' Capital Account, Unit-based Payment Arrangement, Number Of Independent Directors | director	4

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Related Party Transactions (Details) - Director [Member] - Methvin Company [Member] - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Related Party Transaction [Line Items]
Related Party Transaction, Other Revenues from Transactions with Related Party	$ 7.1		$ 6.0	$ 21.4	$ 14.4
Accounts Receivable, Related Parties, Current	$ 2.7			$ 2.7		$ 1.9
Related Party Transaction, Amounts of Transaction		$ 0.2

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Organization, Description of Business And Basis Of Presentation (Policies)

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

In the opinion of management, our accompanying consolidated financial statements which are unaudited, except for the consolidated balance sheet as of December 31, 2018, which is derived from our audited financial statements, include all normal and recurring adjustments necessary to present fairly our financial position as of September 30, 2019, the results of operations for the three and nine months ended September 30, 2018 and 2019 and cash flows for the nine months ended September 30, 2018 and 2019. The results of operations for the nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019 for several reasons. Profits from our butane blending activities are realized largely during the first and fourth quarters of each year. Additionally, gasoline demand, which drives transportation volumes and revenues on our refined products pipeline system, generally trends higher during the summer driving months. Further, the volatility of commodity prices impacts the profits from our commodity activities and the volume of petroleum products we transport on our pipelines.

Pursuant to the rules and regulations of the Securities and Exchange Commission, the financial statements in this report do not include all of the information and notes normally included with financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Use of Estimates

Use of Estimates

The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities that exist at the date of our consolidated financial statements, as well as their impact on the reported amounts of revenue and expense during the reporting periods. Actual results could differ from those estimates.

New Accounting Pronouncements

New Accounting Pronouncements - Adopted by us on January 1, 2019

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This ASU requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases, with the exception of short-term leases. The new accounting model for lessors remains largely the same, although some changes have been made to align it with the new lessee model and the new revenue recognition guidance. This update also requires companies to include additional disclosures regarding their lessee and lessor agreements. We adopted this standard on January 1, 2019, and it did not have a material impact on our consolidated statements of income or our leverage ratio as defined in our credit agreement. Adoption of this ASU resulted in an initial increase in our assets and liabilities by approximately $172 million due to the recognition of right-of-use assets and lease liabilities. See Note 7 – Leases for our lease disclosures.

Lease Policy, Lessee and Lessor

As of January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842) using the modified retrospective method of adoption. We elected to use the transition option that allows us to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment, if any, to the opening balance of retained earnings in the year of adoption. Comparable periods continue to be presented under the guidance of the previous standard, ASC 840. ASC 842 requires lessees to recognize a lease liability and right-of-use asset on the balance sheet for operating leases. For lessors, the new accounting model remains largely the same, although some changes have been made to align it with the new lessee model and the new revenue recognition guidance, ASC 606, Revenue from Contracts with Customers. Our adoption of ASC 842 did not result in any material adjustments to retained earnings, changes in the timing or amounts of lease costs or changes to our leverage ratio as defined in our credit agreement.

We have both lessee and lessor arrangements. Our leases are evaluated at inception or at any subsequent modification. Depending on the terms, leases are classified as either operating or finance leases if we are the lessee, or as operating, sales-type or direct financing leases if we are the lessor, as appropriate under ASC 842.  Our lessee arrangements primarily include a terminalling and storage contract where we have exclusive use of dedicated tankage, leased pipelines and office buildings. Our lessor arrangements include pipeline capacity and storage contracts and our condensate splitter tolling agreement that qualify as operating leases under ASC 842. In addition, we have a long-term throughput and deficiency agreement with a customer that is being accounted for as a sales-type lease under ASC 842.

In accordance with ASC 842, we have made an accounting policy election to not apply the new standard to lessee arrangements with a term of one year or less and no purchase option that is reasonably certain of exercise. We will continue to account for these short-term arrangements by recognizing payments and expenses as incurred, without recording a lease liability and right-of-use asset.

We have also made an accounting policy election for both our lessee and lessor arrangements to combine lease and non-lease components. This election is applied to all of our lease arrangements as our non-lease components are not material and do not result in significant timing differences in the recognition of rental expenses or income.

Lessee, Leases

We recognize a lease liability for each lease based on the present value of remaining minimum fixed rental payments (which includes payments under any renewal option that we are reasonably certain to exercise), using a discount rate that approximates the rate of interest we would have to pay to borrow on a collateralized basis over a similar term. We also recognize a right-of-use asset for each lease, valued at the lease liability, adjusted for prepaid or accrued rent balances existing at the time of initial recognition. The lease liability and right-of-use asset are reduced over the term of the lease as payments are made and the assets are used.

Related Party Operating Lease. In 2018, we entered into a long-term terminalling and storage contract with Seabrook for exclusive use of dedicated tankage that provides our customers with crude oil storage capacity and dock access for crude oil imports and exports on the Texas Gulf Coast.

Minimum fixed rental payments are recognized on a straight-line basis over the life of the lease as costs and expenses on our consolidated statements of income. Variable and short-term rental payments are recognized as costs and expenses as they are incurred. Variable payments consist of amounts that exceed the contractual minimum rental payment (for example, payment increases tied to a change in a market index).

Lessor, Leases

We recognize fixed rental income on a straight-line basis over the life of the lease as revenue on our consolidated statements of income. Variable rental payments are recognized as revenue in the period in which the circumstances on which the variable lease payments are based occur.

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Inventory (Tables)

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory at December 31, 2018 and September 30, 2019 was as follows (in thousands): 

	December 31, 2018		September 30, 2019
Refined products	$	92,751	$	106,406
Liquefied petroleum gases	46,612		47,057
Transmix	28,497		32,849
Crude oil	11,220		13,260
Additives	6,655		6,380
Total inventory	$	185,735	$	205,952

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Investments in Non-Controlled Entities

9 Months Ended

Sep. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Investments in Non-Controlled Entities

Investments in Non-Controlled Entities

Our investments in non-controlled entities at September 30, 2019 were comprised of:

Entity	Ownership Interest
BridgeTex Pipeline Company, LLC (“BridgeTex”)	30%
Double Eagle Pipeline LLC (“Double Eagle”)	50%
HoustonLink Pipeline Company, LLC (“HoustonLink”)	50%
MVP Terminalling, LLC (“MVP”)	50%
Powder Springs Logistics, LLC (“Powder Springs”)	50%
Saddlehorn Pipeline Company, LLC (“Saddlehorn”)	40%
Seabrook Logistics, LLC (“Seabrook”)	50%
Texas Frontera, LLC (“Texas Frontera”)	50%

We serve as operator of BridgeTex, HoustonLink, MVP, Powder Springs, Saddlehorn, Texas Frontera and the pipeline activities of Seabrook. We receive fees for management services as well as reimbursement or payment to us for certain direct operational payroll and other overhead costs. The management fees we receive are reported as affiliate management fee revenue on our consolidated statements of income. Cost reimbursements we receive from these entities in connection with our operating services are included as reductions to costs and expenses on our consolidated statements of income and totaled $0.9 million and $1.2 million during the three months ended September 30, 2018 and 2019, respectively, and $2.6 million and $3.8 million during the nine months ended September 30, 2018 and 2019, respectively.

We recorded the following revenue and expense transactions from certain of these non-controlled entities in our consolidated statements of income (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2019		2018		2019
Transportation and terminals revenue:
BridgeTex, pipeline capacity and storage	$	9,958	$	10,737	$	29,519	$	31,063
Double Eagle, throughput revenue	$	1,005	$	1,582	$	3,892	$	4,813
Saddlehorn, storage revenue	$	552	$	566	$	1,628	$	1,669
Operating costs:
Seabrook, storage lease and ancillary services	$	3,982	$	6,267	$	3,982	$	19,417
Product sales revenue:
Powder Springs, butane sales	$	—	$	—	$	4,899	$	—
Cost of product sales:
Powder Springs, butane purchases	$	—	$	—	$	410	$	—
Other income:
MVP, easement sale	$	—	$	289	$	—	$	289

Our consolidated balance sheets reflected the following balances related to our investments in non-controlled entities (in thousands):

	December 31, 2018
	Trade Accounts Receivable		Other Accounts Receivable		Other Accounts Payable		Long-Term Receivables
BridgeTex	$	318	$	1,549	$	—	$	—
Double Eagle	$	546	$	—	$	—	$	—
MVP	$	—	$	397	$	—	$	—
Powder Springs	$	—	$	—	$	—	$	2,221
Saddlehorn	$	—	$	183	$	—	$	—
Seabrook	$	—	$	—	$	1,140	$	—

	September 30, 2019
	Trade Accounts Receivable		Other Accounts Receivable		Other Accounts Payable		Long-Term Receivables
BridgeTex	$	385	$	31	$	530	$	—
Double Eagle	$	440	$	—	$	—	$	—
HoustonLink	$	77	$	—	$	—	$	—
MVP	$	—	$	364	$	—	$	—
Powder Springs	$	—	$	10	$	—	$	4,892
Saddlehorn	$	—	$	120	$	—	$	—
Seabrook	$	753	$	332	$	1,223	$	—

The financial results from MVP and Texas Frontera are included in our marine storage segment, the financial results from BridgeTex, Double Eagle, HoustonLink, Saddlehorn and Seabrook are included in our crude oil segment and the financial results from Powder Springs are included in our refined products segment, each as earnings of non-controlled entities.

A summary of our investments in non-controlled entities follows (in thousands):

Investments at 12/31/2018	$	1,076,306
Additional investment	158,145
Indemnification settlement	(5,000		)
Earnings of non-controlled entities:
Proportionate share of earnings	123,621
Amortization of excess investment and capitalized interest	(1,392		)
Earnings of non-controlled entities	122,229
Less:
Distributions from operations of non-controlled entities	138,140
Distributions from returns of investments in non-controlled entities	7,500
Investments at 9/30/2019	$	1,206,040

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Debt

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Debt

Debt

Long-term debt at December 31, 2018 and September 30, 2019 was as follows (in thousands):

	December 31, 2018			September 30, 2019
6.55% Notes due 2019	$	550,000		$	—
4.25% Notes due 2021	550,000			550,000
3.20% Notes due 2025	250,000			250,000
5.00% Notes due 2026	650,000			650,000
6.40% Notes due 2037	250,000			250,000
4.20% Notes due 2042	250,000			250,000
5.15% Notes due 2043	550,000			550,000
4.20% Notes due 2045	250,000			250,000
4.25% Notes due 2046	500,000			500,000
4.20% Notes due 2047	500,000			500,000
4.85% Notes due 2049	—			500,000
3.95% Notes due 2050	—			500,000
Face value of long-term debt	4,300,000			4,750,000
Unamortized debt issuance costs(1)	(27,070		)	(35,770		)
Net unamortized debt discount(1)	(2,927		)	(8,455		)
Net unamortized amount of gains from historical fair value hedges(1)	866			—
Long-term debt, net, including current portion	4,270,869			4,705,775
Less: Current portion of long-term debt, net	59,489			—
Long-term debt, net	$	4,211,380		$	4,705,775

(1) Debt issuance costs, note discounts and premiums and realized gains and losses of historical fair value hedges are being amortized or accreted to the applicable notes over the respective lives of those notes.

All of the instruments detailed in the table above are senior indebtedness.

2019 Debt Issuances

On August 19, 2019, we issued $500.0 million of 3.95% senior notes due 2050 in an underwritten public

offering. The notes were issued at 99.91% of par. Net proceeds from this offering were approximately $494.4 million after underwriting discounts and offering expenses. The net proceeds from this offering will be used for general partnership purposes, including expansion capital projects.

On January 18, 2019, we issued $500.0 million of 4.85% senior notes due 2049 in an underwritten public

offering. The notes were issued at 99.371% of par. Net proceeds from this offering were approximately $491.5 million after underwriting discounts and offering expenses. The net proceeds from this offering along with cash on hand were used to early redeem our $550.0 million of 6.55% senior notes due 2019 on February 11, 2019. In connection with this offering, we recognized $8.3 million of debt prepayment costs that were recorded as interest expense in our consolidated statements of income.

Other Debt

Revolving Credit Facilities. At September 30, 2019, the total borrowing capacity under our revolving credit facility maturing in May 2024 was $1.0 billion. Any borrowings outstanding under this facility are classified as long-term debt on our consolidated balance sheets. Borrowings under this facility are unsecured and bear interest at

LIBOR plus a spread ranging from 0.875% to 1.500% based on our credit ratings. Additionally, an unused commitment fee is assessed at a rate between 0.075% and 0.200% depending on our credit ratings. The unused commitment fee was 0.125% at September 30, 2019. Borrowings under this facility may be used for general partnership purposes, including capital expenditures. As of December 31, 2018 and September 30, 2019, there were no borrowings outstanding under this facility, with $6.8 million and $3.5 million, respectively, obligated for letters of credit. Amounts obligated for letters of credit are not reflected as debt on our consolidated balance sheets, but decrease our borrowing capacity under this facility.

We entered into a $500.0 million 364-day revolving credit facility, which matures in May 2020. Borrowings under this facility are unsecured and generally bear interest at LIBOR plus a spread ranging from 1.000% to 1.250% based on our credit ratings. Additionally, an unused commitment fee is assessed at a rate between 0.075% and 0.125%. The unused commitment fee was 0.100% at September 30, 2019. Borrowings under this facility may be used for general purposes, including capital expenditures. As of September 30, 2019, there were no borrowings outstanding under this facility.

Commercial Paper Program. We have a commercial paper program under which we may issue commercial paper notes in an amount up to the available capacity under our $1.0 billion revolving credit facility. The maturities of the commercial paper notes vary, but may not exceed 397 days from the date of issuance. Because the commercial paper we can issue is limited to amounts available under our revolving credit facility, amounts outstanding under the program are classified as long-term debt. The commercial paper notes are sold under customary terms in the commercial paper market and are issued at a discount from par, or alternatively, are sold at par and bear varying interest rates on a fixed or floating basis. The weighted-average interest rate for commercial paper borrowings based on the number of days outstanding was 2.3% for the year ended December 31, 2018 and 2.7% for the nine months ended September 30, 2019.

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Partners' Capital and Distributions

9 Months Ended

Sep. 30, 2019

Partners' Capital Notes [Abstract]

Partners' Capital and Distributions

Partners’ Capital and Distributions

Partners’ Capital

In May 2017, we filed a prospectus supplement to the shelf registration statement for our continuous equity offering program (which we refer to as an at-the-market program, or “ATM”) pursuant to which we may issue up to $750.0 million of common units in amounts, at prices and on terms to be determined by market conditions at the time. The net proceeds from any sales under the ATM, after deducting the sales agents’ commissions and our offering expenses, will be used for general partnership purposes, including repayment of indebtedness or capital expenditures. No units have been issued pursuant to this program.

The following table details the changes in the number of our limited partner units outstanding from December 31, 2018 through September 30, 2019:

Limited partner units outstanding on December 31, 2018	228,195,160
February 2019–Settlement of employee LTIP awards	199,792
During 2019–Other(a)	8,476
Limited partner units outstanding on September 30, 2019	228,403,428

(a) Limited partner units issued to settle the equity-based retainers paid to four independent directors of our general partner.

Distributions

Distributions we paid during 2018 and 2019 were as follows (in thousands, except per unit amounts):

 

Payment Date	Per Unit Cash Distribution Amount			Total Cash Distribution to Limited Partners
02/14/2018		$	0.9200		$	209,940
05/15/2018		0.9375			213,933
08/14/2018		0.9575			218,497
Through 09/30/2018		2.8150			642,370
11/14/2018		0.9775			223,061
Total		$	3.7925		$	865,431
02/14/2019		$	0.9975		$	227,832
05/15/2019		1.0050			229,545
08/14/2019		1.0125			231,258
Through 09/30/2019		3.0150			688,635
11/14/2019(a)		1.0200			232,971
Total		$	4.0350		$	921,606

(a) Our general partner’s board of directors declared this cash distribution in October 2019 to be paid on November 14, 2019 to unitholders of record at the close of business on November 7, 2019.

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Revenue from Contract with Customers (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Revenue from Contract with Customer [Abstract]
Deferred Revenue, Revenue Recognized	$ 6.0	$ 90.0

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Long-Term Incentive Plan (Tables)

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Equity-Based Incentive Compensation Expense

Our equity-based incentive compensation expense was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2019		2018		2019
Performance-based awards	$	7,087	$	5,162	$	22,176	$	18,123
Time-based awards	846		1,611		2,436		4,454
Total	$	7,933	$	6,773	$	24,612	$	22,577
Allocation of LTIP expense on our consolidated statements of income:
G&A expense	$	7,867	$	6,704	$	24,412	$	22,377
Operating expense	66		69		200		200
Total	$	7,933	$	6,773	$	24,612	$	22,577

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Debt (Narrative) (Details) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Mar. 31, 2019	Feb. 11, 2019
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 4,750,000,000		$ 4,300,000,000
Borrowings under long-term notes	996,405,000	$ 0
Payment for Debt Extinguishment or Debt Prepayment Cost	8,270,000	$ 0
Long term debt	4,705,775,000		4,270,869,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long term debt			$ 0
Commercial Paper [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,000,000,000.0
Long-term Debt, Weighted Average Interest Rate, over Time	2.70%		2.30%
Commercial Paper [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Term	397 days
Three Point Nine Five Percentage Notes Due Two Thousand Fifty [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 500,000,000.0		$ 0
Debt Instrument, Interest Rate, Stated Percentage	3.95%
Debt Instrument, Notes At Price	99.91%
Borrowings under long-term notes	$ 494,400,000
4.85% Notes Due 2049 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 500,000,000		0	$ 500,000,000.0
Debt Instrument, Interest Rate, Stated Percentage	4.85%			4.85%
Debt Instrument, Notes At Price	99.371%
Borrowings under long-term notes	$ 491,500,000
Payment for Debt Extinguishment or Debt Prepayment Cost	8,300,000
6.55% Notes due 2019 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 0		550,000,000		$ 550,000,000.0
Debt Instrument, Interest Rate, Stated Percentage	6.55%				6.55%
Notes Payable to Banks [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 500,000,000.0
Unused commitment fee	0.10%
Line of Credit Facility, Expiration Period	364 days
Short-term Debt	$ 0
Notes Payable to Banks [Member] | Revolving Credit Facility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Unused commitment fee	0.075%
Notes Payable to Banks [Member] | Revolving Credit Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Unused commitment fee	0.125%
Senior Notes [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,000,000,000.0
Unused commitment fee	0.125%
Long term debt	$ 0
Obligation for letters of credit	$ 3,500,000		$ 6,800,000
Senior Notes [Member] | Revolving Credit Facility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Unused commitment fee	0.075%
Senior Notes [Member] | Revolving Credit Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Unused commitment fee	0.20%
London Interbank Offered Rate (LIBOR) [Member] | Notes Payable to Banks [Member] | Revolving Credit Facility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.00%
London Interbank Offered Rate (LIBOR) [Member] | Notes Payable to Banks [Member] | Revolving Credit Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.25%
London Interbank Offered Rate (LIBOR) [Member] | Senior Notes [Member] | Revolving Credit Facility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.875%
London Interbank Offered Rate (LIBOR) [Member] | Senior Notes [Member] | Revolving Credit Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.50%

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Derivative Financial Instruments (Derivative Gains Included In Accumulated Other Comprehensive Loss (AOCL) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Derivative Gains Included in AOCI [Roll Forward]
Beginning balance	$ (36,287)	$ (25,165)	$ (26,480)	$ (33,755)
Net gain (loss) on cash flow hedges	(14,181)	6,852	(25,216)	13,963
Reclassification of net loss (gain) on cash flow hedges to income	699	740	1,927	2,219
Ending balance	$ (49,769)	$ (17,573)	$ (49,769)	$ (17,573)

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Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 273,038	$ 594,534	$ 734,404	$ 1,019,853
Other comprehensive income (loss):
Net gain (loss) on cash flow hedges	(14,181)	6,852	(25,216)	13,963
Reclassification of net loss on cash flow hedges to income	699	740	1,927	2,219
Net actuarial loss	0	0	(10,913)	(5,291)
Amortization of prior service credit	(46)	(45)	(136)	(136)
Amortization of actuarial loss	1,412	1,806	4,385	8,623
Settlement cost	439	0	2,499	0
Total other comprehensive income (loss)	(11,677)	9,353	(27,454)	19,378
Comprehensive income	$ 261,361	$ 603,887	$ 706,950	$ 1,039,231

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Consolidated Statement of Partners' Capital Statement - USD ($) $ in Thousands	Total	Limited Partners	Accumulated Other Comprehensive Loss
Beginning balance at Dec. 31, 2017	$ 2,129,653	$ 2,267,231	$ (137,578)
Comprehensive income:
Net income	1,019,853	1,019,853
Total other comprehensive income (loss)	19,378		19,378
Comprehensive income	1,039,231	1,019,853	19,378
Distributions	(642,370)	(642,370)
Equity-based incentive compensation expense	24,612	24,612
Issuance of limited partner units in settlement of equity-based incentive plan awards	120	120
Payments associated with settlement of equity-based incentive compensation	(9,285)	(9,285)
Other	(516)	(516)
Ending balance at Sep. 30, 2018	2,547,420	2,665,620	(118,200)
Beginning balance at Jun. 30, 2018	2,154,292	2,281,845	(127,553)
Comprehensive income:
Net income	594,534	594,534
Total other comprehensive income (loss)	9,353		9,353
Comprehensive income	603,887	594,534	9,353
Distributions	(218,497)	(218,497)
Equity-based incentive compensation expense	7,933	7,933
Other	(195)	(195)
Ending balance at Sep. 30, 2018	2,547,420	2,665,620	(118,200)
Beginning balance at Dec. 31, 2018	2,643,434	2,763,925	(120,491)
Comprehensive income:
Net income	734,404	734,404
Total other comprehensive income (loss)	(27,454)		(27,454)
Comprehensive income	706,950	734,404	(27,454)
Distributions	(688,635)	(688,635)
Equity-based incentive compensation expense	22,577	22,577
Issuance of limited partner units in settlement of equity-based incentive plan awards	480	480
Payments associated with settlement of equity-based incentive compensation	(9,764)	(9,764)
Other	(586)	(586)
Ending balance at Sep. 30, 2019	2,674,456	2,822,401	(147,945)
Beginning balance at Jun. 30, 2019	2,637,779	2,774,047	(136,268)
Comprehensive income:
Net income	273,038	273,038
Total other comprehensive income (loss)	(11,677)		(11,677)
Comprehensive income	261,361	273,038	(11,677)
Distributions	(231,258)	(231,258)
Equity-based incentive compensation expense	6,773	6,773
Other	(199)	(199)
Ending balance at Sep. 30, 2019	$ 2,674,456	$ 2,822,401	$ (147,945)

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Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands									9 Months Ended		12 Months Ended
	Nov. 14, 2019	Aug. 14, 2019	May 15, 2019	Feb. 14, 2019	Nov. 14, 2018	Aug. 14, 2018	May 15, 2018	Feb. 14, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2019	Dec. 31, 2018
Subsequent Event [Line Items]
Cash distribution per unit (in dollars per share)		$ 1.0125	$ 1.0050	$ 0.9975	$ 0.9775	$ 0.9575	$ 0.9375	$ 0.9200	$ 3.0150	$ 2.8150		$ 3.7925
Total cash distributions		$ 231,258	$ 229,545	$ 227,832	$ 223,061	$ 218,497	$ 213,933	$ 209,940	$ 688,635	$ 642,370		$ 865,431
Scenario, Forecast
Subsequent Event [Line Items]
Cash distribution per unit (in dollars per share)	$ 1.02										$ 4.0350
Total cash distributions	$ 232,971										$ 921,606