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 June 30, 2020

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	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 July 30, 2020, there were 225,056,287 common units outstanding.

TABLE OF CONTENTS

PART I

FINANCIAL INFORMATION

 

ITEM 1.		CONSOLIDATED FINANCIAL STATEMENTS
	CONSOLIDATED STATEMENTS OF INCOME		4
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME		5
	CONSOLIDATED BALANCE SHEETS		6
	CONSOLIDATED STATEMENTS OF CASH FLOWS		7
	CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL		8
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:
	1.	Organization, Description of Business and Basis of Presentation	10
	2.	Segment Disclosures	12
	3.	Revenue from Contracts with Customers	15
	4.	Investments in Non-Controlled Entities	18
	5.	Inventory	20
	6.	Debt	21
	7.	Leases	22
	8.	Employee Benefit Plans	22
	9.	Long-Term Incentive Plan	24
	10.	Derivative Financial Instruments	25
	11.	Fair Value	28
	12.	Commitments and Contingencies	30
	13.	Related Party Transactions	31
	14.	Partners’ Capital and Distributions	31
	15.	Subsequent Events	32
ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	Introduction		33
	Recent Developments		33
	Results of Operations		34
	Distributable Cash Flow		40
	Liquidity and Capital Resources		41
	Off-Balance Sheet Arrangements		42
	Other Items		42
ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	43
ITEM 4.		CONTROLS AND PROCEDURES	44
PART II OTHER INFORMATION
ITEM 1.		LEGAL PROCEEDINGS	45
ITEM 1A.		RISK FACTORS	46
ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	46
ITEM 3.		DEFAULTS UPON SENIOR SECURITIES	47
ITEM 4.		MINE SAFETY DISCLOSURES	47
ITEM 5.		OTHER INFORMATION	47
ITEM 6.		EXHIBITS	47
INDEX TO EXHIBITS			48
SIGNATURES			49

1

Forward-Looking Statements

Except for statements of historical fact, all statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may be identified by words like “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “might,” “plans,” “potential,” “projected,” “scheduled,” “should,” “will” and other similar expressions. The absence of such words or expressions does not necessarily mean the statements are not forward-looking. Although we believe our forward-looking statements are reasonable, 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, including those described in Part II, Item 1A – Risk Factors of this Quarterly Report on Form 10-Q. Actual outcomes and results may be materially different from the results stated or implied in such forward-looking statements included in this report. You should not put any undue reliance on any forward-looking statement.

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;

• 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 business 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;

• changes in population 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 transportation or storage in our refined products or crude oil segments;

• 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 Federal Energy Regulatory Commission 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, including the effects of capacity over-build in the areas where we operate;

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

• changes in general economic conditions, including market and macro-economic disruptions resulting from the COVID-19 pandemic and related governmental responses;

2

• 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;

• 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 maintenance and operation of our current assets and construction of our growth projects, 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 gas liquids 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 gas liquids 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 exhaustive. The forward-looking statements in this Quarterly Report speak only as of the date hereof, and 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, unless required by law.

3

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						Six Months Ended
	June 30,						June 30,
	2019			2020			2019			2020
Transportation and terminals revenue	$	506,405		$	411,815		$	967,197		$	870,210
Product sales revenue	189,989			43,277			352,984			362,397
Affiliate management fee revenue	5,305			5,316			10,453			10,607
Total revenue	701,699			460,408			1,330,634			1,243,214
Costs and expenses:
Operating	168,929			146,107			314,954			295,615
Cost of product sales	152,876			50,509			321,970			299,745
Depreciation, amortization and impairment	62,530			58,540			124,401			122,074
General and administrative	52,383			42,168			98,378			79,076
Total costs and expenses	436,718			297,324			859,703			796,510
Other operating income (expense)	(5,024		)	3,913			1,917			3,402
Earnings of non-controlled entities	40,785			33,689			72,040			77,349
Operating profit	300,742			200,686			544,888			527,455
Interest expense	51,406			69,259			111,572			125,159
Interest capitalized	(5,134		)	(4,228		)	(8,588		)	(9,179		)
Interest income	(338		)	(223		)	(1,998		)	(643		)
Gain on disposition of assets	(4,646		)	—			(26,434		)	(12,887		)
Other (income) expense	4,570			1,446			6,620			2,253
Income before provision for income taxes	254,884			134,432			463,716			422,752
Provision for income taxes	1,181			589			2,350			1,345
Net income	$	253,703		$	133,843		$	461,366		$	421,407
Basic net income per common unit	$	1.11		$	0.59		$	2.02		$	1.86
Diluted net income per common unit	$	1.11		$	0.59		$	2.02		$	1.86
Weighted average number of common units outstanding used for basic net income per unit calculation	228,647			225,351			228,603			226,461
Weighted average number of common units outstanding used for diluted net income per unit calculation	228,688			225,351			228,623			226,461

See notes to consolidated financial statements.

4

MAGELLAN MIDSTREAM PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2020			2019			2020
Net income	$	253,703		$	133,843		$	461,366		$	421,407
Other comprehensive income (loss):
Derivative activity:
Net gain (loss) on cash flow hedges	(6,659		)	1,470			(11,035		)	(10,444		)
Reclassification of net loss on cash flow hedges to income	601			847			1,228			1,656
Changes in employee benefit plan assets and benefit obligations recognized in other comprehensive income:
Net actuarial gain (loss)	(10,913		)	414			(10,913		)	(333		)
Curtailment gain	—			—			—			1,703
Recognition of prior service credit amortization in income	(45		)	(45		)	(90		)	(90		)
Recognition of actuarial loss amortization in income	1,625			1,458			2,973			2,989
Recognition of settlement cost in income	2,060			—			2,060			969
Total other comprehensive income (loss)	(13,331		)	4,144			(15,777		)	(3,550		)
Comprehensive income	$	240,372		$	137,987		$	445,589		$	417,857

See notes to consolidated financial statements.

5

MAGELLAN MIDSTREAM PARTNERS, L.P.

CONSOLIDATED BALANCE SHEETS

(In thousands)

 

	December 31, 2019			June 30, 2020
ASSETS				(Unaudited)
Current assets:
Cash and cash equivalents	$	58,030		$	2,863
Trade accounts receivable	125,440			92,884
Other accounts receivable	23,887			18,761
Inventory	184,399			116,384
Commodity derivatives deposits	27,415			25,456
Reimbursable costs	7,878			28,958
Other current assets	32,359			31,938
Total current assets	459,408			317,244
Property, plant and equipment	8,431,227			8,243,106
Less: accumulated depreciation	2,027,193			1,971,268
Net property, plant and equipment	6,404,034			6,271,838
Investments in non-controlled entities	1,240,551			1,207,670
Right-of-use asset, operating leases	171,868			158,855
Long-term receivables	20,782			21,517
Goodwill	53,260			52,830
Other intangibles (less accumulated amortization of $6,255 and $7,590 at December 31, 2019 and June 30, 2020, respectively)	47,898			46,563
Restricted cash	26,569			6,293
Other noncurrent assets	13,359			22,180
Total assets	$	8,437,729		$	8,104,990
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable	$	150,992		$	119,678
Accrued payroll and benefits	75,511			40,574
Accrued interest payable	64,276			55,545
Accrued taxes other than income	66,007			51,660
Deferred revenue	109,654			105,670
Accrued product liabilities	90,788			52,890
Commodity derivatives contracts, net	10,222			13,531
Current portion of operating lease liability	26,221			27,251
Other current liabilities	73,205			54,351
Total current liabilities	666,876			521,150
Long-term operating lease liability	144,023			134,274
Long-term debt, net	4,706,075			4,792,649
Long-term pension and benefits	145,992			143,459
Other noncurrent liabilities	59,735			58,720
Commitments and contingencies
Partners’ capital:
Common unitholders (228,403 units and 225,056 units outstanding at December 31, 2019 and June 30, 2020, respectively)	2,877,105			2,620,365
Accumulated other comprehensive loss	(162,077		)	(165,627		)
Total partners’ capital	2,715,028			2,454,738
Total liabilities and partners’ capital	$	8,437,729		$	8,104,990

See notes to consolidated financial statements.

6

MAGELLAN MIDSTREAM PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	Six Months Ended
	June 30,
	2019			2020
Operating Activities:
Net income	$	461,366		$	421,407
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and impairment expense	124,401			122,074
Gain on sale and retirement of assets	(26,437		)	(13,187		)
Earnings of non-controlled entities	(72,040		)	(77,349		)
Distributions from operations of non-controlled entities	83,069			102,699
Equity-based incentive compensation expense	15,804			4,411
Settlement gain, amortization of prior service credit and actuarial loss	4,943			2,526
Debt prepayment costs	8,270			12,893
Changes in operating assets and liabilities:
Trade accounts receivable and other accounts receivable	(35,757		)	33,394
Inventory	12,828			66,776
Accounts payable	22,110			12,312
Accrued payroll and benefits	(22,880		)	(34,937		)
Accrued interest payable	(5,453		)	(8,731		)
Accrued taxes other than income	(4,945		)	(12,522		)
Accrued product liabilities	977			(37,898		)
Deferred revenue	(9,189		)	(3,984		)
Other current and noncurrent assets and liabilities	13,493			(26,631		)
Net cash provided by operating activities	570,560			563,253
Investing Activities:
Additions to property, plant and equipment, net(1)	(487,662		)	(292,217		)
Proceeds from sale and disposition of assets	63,887			332,872
Investments in non-controlled entities	(112,251		)	(59,458		)
Distributions from returns of investments in non-controlled entities	7,500			—
Deposits received from undivided joint interest third party	26,352			—
Net cash used by investing activities	(502,174		)	(18,803		)
Financing Activities:
Distributions paid	(457,377		)	(466,019		)
Net commercial paper borrowings	197,000			141,000
Borrowings under long-term notes	496,855			499,400
Payments on notes	(550,000		)	(550,000		)
Debt placement costs	(6,817		)	(4,255		)
Net payment on financial derivatives	(8,028		)	(10,444		)
Payments associated with settlement of equity-based incentive compensation	(9,764		)	(14,700		)
Debt prepayment costs	(8,270		)	(12,893		)
Repurchases of common units	—			(201,982		)
Net cash used by financing activities	(346,401		)	(619,893		)
Change in cash, cash equivalents and restricted cash	(278,015		)	(75,443		)
Cash, cash equivalents and restricted cash at beginning of period	309,261			84,599
Cash, cash equivalents and restricted cash at end of period	$	31,246		$	9,156
Supplemental non-cash investing activities:
(1)   Additions to property, plant and equipment	$	(514,812	)	$	(235,587	)
Changes in accounts payable and other current liabilities related to capital expenditures	27,150			(56,630		)
Additions to property, plant and equipment, net	$	(487,662	)	$	(292,217	)

See notes to consolidated financial statements.

7

MAGELLAN MIDSTREAM PARTNERS, L.P.

CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL

(Unaudited, in thousands)

	Common Unitholders			Accumulated Other Comprehensive Loss				Total Partners’ Capital
Balance, April 1, 2019	$	2,739,192			$	(122,937	)	$	2,616,255
Comprehensive income:
Net income	253,703				—			253,703
Total other comprehensive loss	—				(13,331		)	(13,331		)
Total comprehensive income (loss)	253,703				(13,331		)	240,372
Distributions	(229,545		)		—			(229,545		)
Equity-based incentive compensation expense	10,890				—			10,890
Other	(193		)		—			(193		)
Three Months Ended June 30, 2019	$	2,774,047			$	(136,268	)	$	2,637,779
Balance, April 1, 2020	$	2,713,748			$	(169,771	)	$	2,543,977
Comprehensive income:
Net income	133,843				—			133,843
Total other comprehensive income	—				4,144			4,144
Total comprehensive income	133,843				4,144			137,987
Distributions	(231,245		)		—			(231,245		)
Equity-based incentive compensation expense	4,256				—			4,256
Other	(237		)		—			(237		)
Three Months Ended June 30, 2020	$	2,620,365			$	(165,627	)	$	2,454,738

8

MAGELLAN MIDSTREAM PARTNERS, L.P. CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL (Continued) (Unaudited, in thousands)
	Common Unitholders			Accumulated Other Comprehensive Loss				Total Partners’ Capital
Balance, January 1, 2019	$	2,763,925			$	(120,491	)	$	2,643,434
Comprehensive income:
Net income	461,366				—			461,366
Total other comprehensive loss	—				(15,777		)	(15,777		)
Total comprehensive income (loss)	461,366				(15,777		)	445,589
Distributions	(457,377		)		—			(457,377		)
Equity-based incentive compensation expense	15,804				—			15,804
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	(387		)		—			(387		)
Six Months Ended June 30, 2019	$	2,774,047			$	(136,268	)	$	2,637,779
Balance, January 1, 2020	$	2,877,105			$	(162,077	)	$	2,715,028
Comprehensive income:
Net income	421,407				—			421,407
Total other comprehensive loss	—				(3,550		)	(3,550		)
Total comprehensive income (loss)	421,407				(3,550		)	417,857
Distributions	(466,019		)		—			(466,019		)
Equity-based incentive compensation expense	4,411				—			4,411
Repurchases of common units	(201,982		)		—			(201,982		)
Issuance of limited partner units in settlement of equity-based incentive plan awards	600				—			600
Payments associated with settlement of equity-based incentive compensation	(14,700		)		—			(14,700		)
Other	(457		)		—			(457		)
Six Months Ended June 30, 2020	$	2,620,365			$	(165,627	)	$	2,454,738

See notes to consolidated financial statements.

9

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 common 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.

During first quarter 2020, we completed a reorganization of our reportable segments.  This reorganization was effected to reflect changes in the management of our business in conjunction with the sale of three of our marine terminals.  Following this sale, two of our remaining marine terminals were combined with our refined products segment and one terminal was combined with our crude oil segment based on the predominant types of product stored at the facilities.  Accordingly, we have restated our segment disclosures for all previous periods included in this report.

Description of Business

On March 20, 2020, we sold three marine terminals to a subsidiary of Buckeye Partners, L.P. (“Buckeye”) for $251.8 million, net of working capital adjustments. These terminals are located in New Haven, Connecticut, Wilmington, Delaware and Marrero, Louisiana. We recognized a $6.2 million impairment loss related to the sale on our consolidated statements of income.

We are principally engaged in the transportation, storage and distribution of refined petroleum products and crude oil.  As of June 30, 2020, our asset portfolio consisted of:

• our refined products segment, comprised of our approximately 9,800-mile refined products pipeline system with 53 connected terminals, as well as 25 independent terminals not connected to our pipeline system and two marine storage terminals (one of which is owned through a joint venture); and

• our crude oil segment, comprised of approximately 2,200 miles of crude oil pipelines, a condensate splitter and 37 million barrels of aggregate storage capacity, of which approximately 25 million barrels are used for contract storage. Approximately 1,000 miles of these pipelines, the condensate splitter and 30 million barrels of this storage capacity (including 22 million barrels used for contract storage) 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 crude oil refineries that are primarily used as fuels by consumers. Refined products include gasoline, diesel fuel, aviation fuel, kerosene and heating oil.  Diesel fuel, kerosene and heating oil are referred to as distillates;

• transmix is a mixture of refined products that forms when transported in pipelines. Transmix is fractionated and blended into usable refined products;

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

10

MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

• blendstocks are products 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 products 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 a naturally occurring unrefined petroleum product recovered from underground that is used as feedstock by refineries, splitters and petrochemical facilities; and

• biofuels, such as ethanol and biodiesel, are fuels derived from living materials and 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, 2019, which is derived from our audited financial statements, include all normal and recurring adjustments necessary to present fairly our financial position as of June 30, 2020, the results of operations for the three and six months ended June 30, 2019 and 2020 and cash flows for the six months ended June 30, 2019 and 2020. The results of operations for the six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full year ending December 31, 2020 for several reasons. Profits from our gas liquids 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.  Finally, we expect the impact of COVID-19 on demand for petroleum products and the decline in commodity prices to continue to affect our results of operations in the remaining two quarters of 2020, resulting in decreased transportation and terminalling revenues and reduced profits from our gas liquids blending activities.

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 Form 8-K filed with the Securities and Exchange Commission on May 4, 2020, which reflects changes in our reporting segments since the filing of our Annual Report on Form 10-K for the year ended December 31, 2019.

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

New Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326). The new guidance is effective for reporting periods beginning after December 15, 2019. The standard replaces the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans and other financial instruments. The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We adopted the new guidance as of January 1, 2020 using the modified retrospective approach related to our accounts receivables and contract assets, resulting in no cumulative adjustment to retained earnings. The adoption of this guidance did not have a material impact on our consolidated statements of income for the three and six month periods ended June 30, 2020. 

2. 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. Management evaluates performance based on segment operating margin, which includes revenue from affiliates and third-party customers, operating expenses, cost of product sales, other operating (income) expense and earnings of non-controlled entities.

We believe that investors benefit from having access to the same financial measures used 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 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 June 30, 2019
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	347,630		$	160,116		$	(1,341	)	$	506,405
Product sales revenue	184,695			5,294			—			189,989
Affiliate management fee revenue	1,659			3,646			—			5,305
Total revenue	533,984			169,056			(1,341		)	701,699
Operating expenses	132,850			38,764			(2,685		)	168,929
Cost of product sales	148,166			4,710			—			152,876
Other operating (income) expense	(1,031		)	6,055			—			5,024
(Earnings) loss of non-controlled entities	2,950			(43,735		)	—			(40,785		)
Operating margin	251,049			163,262			1,344			415,655
Depreciation, amortization and impairment expense	44,637			16,549			1,344			62,530
G&A expense	37,560			14,823			—			52,383
Operating profit	$	168,852		$	131,890		$	—		$	300,742

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Three Months Ended June 30, 2020
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	279,759		$	133,637		$	(1,581	)	$	411,815
Product sales revenue	34,463			8,814			—			43,277
Affiliate management fee revenue	1,513			3,803			—			5,316
Total revenue	315,735			146,254			(1,581		)	460,408
Operating expenses	103,405			45,917			(3,215		)	146,107
Cost of product sales	45,616			4,893			—			50,509
Other operating (income) expense	(138		)	(3,775		)	—			(3,913		)
Earnings of non-controlled entities	(4,592		)	(29,097		)	—			(33,689		)
Operating margin	171,444			128,316			1,634			301,394
Depreciation, amortization and impairment expense	41,029			15,877			1,634			58,540
G&A expense	30,661			11,507			—			42,168
Operating profit	$	99,754		$	100,932		$	—		$	200,686

	Six Months Ended June 30, 2019
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	657,201		$	312,275		$	(2,279	)	$	967,197
Product sales revenue	341,977			11,007			—			352,984
Affiliate management fee revenue	3,321			7,132			—			10,453
Total revenue	1,002,499			330,414			(2,279		)	1,330,634
Operating expenses	235,542			84,470			(5,058		)	314,954
Cost of product sales	310,596			11,374			—			321,970
Other operating (income) expense	(6,399		)	4,482			—			(1,917		)
(Earnings) losses of non-controlled entities	3,997			(76,037		)	—			(72,040		)
Operating margin	458,763			306,125			2,779			767,667
Depreciation, amortization and impairment expense	89,064			32,558			2,779			124,401
G&A expense	70,373			28,005			—			98,378
Operating profit	$	299,326		$	245,562		$	—		$	544,888

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

 

	Six Months Ended June 30, 2020
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	594,078		$	279,295		$	(3,163	)	$	870,210
Product sales revenue	347,449			14,948			—			362,397
Affiliate management fee revenue	3,097			7,510			—			10,607
Total revenue	944,624			301,753			(3,163		)	1,243,214
Operating expenses	209,287			92,689			(6,361		)	295,615
Cost of product sales	278,958			20,787			—			299,745
Other operating (income) expense	(2,030		)	(1,372		)	—			(3,402		)
Earnings of non-controlled entities	(18,812		)	(58,537		)	—			(77,349		)
Operating margin	477,221			248,186			3,198			728,605
Depreciation, amortization and impairment expense	87,088			31,788			3,198			122,074
G&A expense	57,315			21,761			—			79,076
Operating profit	$	332,818		$	194,637		$	—		$	527,455

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. 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 June 30, 2019
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation	$	201,175		$	91,532		$	—		$	292,707
Terminalling	49,243			4,724			—			53,967
Storage	55,717			39,211			(1,341		)	93,587
Ancillary services	34,401			6,919			—			41,320
Lease revenue	7,094			17,730			—			24,824
Transportation and terminals revenue	347,630			160,116			(1,341		)	506,405
Product sales revenue	184,695			5,294			—			189,989
Affiliate management fee revenue	1,659			3,646			—			5,305
Total revenue	533,984			169,056			(1,341		)	701,699
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(7,094		)	(17,730		)	—			(24,824		)
(Gains) losses from futures contracts included in product sales revenue(2)	4,713			(95		)	—			4,618
Affiliate management fee revenue	(1,659		)	(3,646		)	—			(5,305		)
Total revenue from contracts with customers under ASC 606	$	529,944		$	147,585		$	(1,341	)	$	676,188

⁽¹⁾ Lease revenue is accounted for under Accounting Standards Codification (“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)

	Three Months Ended June 30, 2020
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation	$	160,282		$	57,550		$	—		$	217,832
Terminalling	36,303			480			—			36,783
Storage	50,726			44,709			(1,581		)	93,854
Ancillary services	28,678			12,105			—			40,783
Lease revenue	3,770			18,793			—			22,563
Transportation and terminals revenue	279,759			133,637			(1,581		)	411,815
Product sales revenue	34,463			8,814			—			43,277
Affiliate management fee revenue	1,513			3,803			—			5,316
Total revenue	315,735			146,254			(1,581		)	460,408
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(3,770		)	(18,793		)	—			(22,563		)
(Gains) losses from futures contracts included in product sales revenue(2)	24,434			2,321			—			26,755
Affiliate management fee revenue	(1,513		)	(3,803		)	—			(5,316		)
Total revenue from contracts with customers under ASC 606	$	334,886		$	125,979		$	(1,581	)	$	459,284

⁽¹⁾ Lease revenue 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.

	Six Months Ended June 30, 2019
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation	$	372,202		$	176,690		$	—		$	548,892
Terminalling	90,540			9,970			—			100,510
Storage	113,093			77,810			(2,279		)	188,624
Ancillary services	66,912			13,210			—			80,122
Lease revenue	14,454			34,595			—			49,049
Transportation and terminals revenue	657,201			312,275			(2,279		)	967,197
Product sales revenue	341,977			11,007			—			352,984
Affiliate management fee revenue	3,321			7,132			—			10,453
Total revenue	1,002,499			330,414			(2,279		)	1,330,634
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(14,454		)	(34,595		)	—			(49,049		)
(Gains) losses from futures contracts included in product sales revenue(2)	56,822			2,307			—			59,129
Affiliate management fee revenue	(3,321		)	(7,132		)	—			(10,453		)
Total revenue from contracts with customers under ASC 606	$	1,041,546		$	290,994		$	(2,279	)	$	1,330,261

⁽¹⁾ Lease revenue 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)

	Six Months Ended June 30, 2020
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation	$	336,287		$	134,665		$	—		$	470,952
Terminalling	76,689			3,019			—			79,708
Storage	108,252			83,560			(3,163		)	188,649
Ancillary services	60,918			19,950			—			80,868
Lease revenue	11,932			38,101			—			50,033
Transportation and terminals revenue	594,078			279,295			(3,163		)	870,210
Product sales revenue	347,449			14,948			—			362,397
Affiliate management fee revenue	3,097			7,510			—			10,607
Total revenue	944,624			301,753			(3,163		)	1,243,214
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(11,932		)	(38,101		)	—			(50,033		)
(Gains) losses from futures contracts included in product sales revenue(2)	(96,613		)	(401		)	—			(97,014		)
Affiliate management fee revenue	(3,097		)	(7,510		)	—			(10,607		)
Total revenue from contracts with customers under ASC 606	$	832,982		$	255,741		$	(3,163	)	$	1,085,560

⁽¹⁾ Lease revenue 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, 2019		June 30, 2020
Accounts receivable from contracts with customers	$	124,701	$	92,745
Contract assets	$	8,071	$	15,166
Contract liabilities	$	111,670	$	112,064

For the three and six months ended June 30, 2020, respectively, we recognized $10.5 million and $80.0 million of transportation and terminals revenue that was recorded in deferred revenue as of December 31, 2019.

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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 June 30, 2020 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		Total
Balances at June 30, 2020	$	2,136,926	$	1,292,941	$	3,429,867
Remaining terms	1 - 18 years		1 - 12 years
Estimated revenues from UPOs to be recognized in the next 12 months	$	375,549	$	279,881	$	655,430

4. Investments in Non-Controlled Entities

Our investments in non-controlled entities at June 30, 2020 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”)	30%
Seabrook Logistics, LLC (“Seabrook”)	50%
Texas Frontera, LLC (“Texas Frontera”)	50%

In the first quarter of 2020, we sold a 10% interest in Saddlehorn to an affiliate of Black Diamond Gathering LLC, which is majority-owned by Noble Midstream Partners LP, reducing our ongoing investment in Saddlehorn to a 30% interest. We received $79.9 million in cash from the sale, and we recorded a gain of $12.9 million on our consolidated statements of income for the six month period ended June 30, 2020.

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 $1.1 million and $1.0 million during the three months ended June 30, 2019 and 2020, respectively, and $2.6 million and $2.2 million during the six months ended June 30, 2019 and 2020, 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 June 30,				Six Months Ended June 30,
	2019		2020		2019		2020
Transportation and terminals revenue:
BridgeTex, pipeline capacity and storage	$	10,181	$	12,677	$	20,326	$	23,425
Double Eagle, throughput revenue	$	1,572	$	1,421	$	3,231	$	3,021
Saddlehorn, storage revenue	$	551	$	565	$	1,103	$	1,131
Operating expenses:
Seabrook, storage lease and ancillary services	$	6,241	$	7,479	$	13,150	$	14,378
Other operating income:
Seabrook, gain on sale of air emission credits	$	—	$	—	$	—	$	1,410

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

	December 31, 2019
	Trade Accounts Receivable		Other Accounts Receivable		Other Accounts Payable		Long-Term Receivables
BridgeTex	$	392	$	26	$	—	$	—
Double Eagle	$	445	$	—	$	—	$	—
HoustonLink	$	60	$	—	$	—	$	—
MVP	$	—	$	418	$	—	$	—
Powder Springs	$	161	$	—	$	—	$	6,006
Saddlehorn	$	—	$	126	$	—	$	—
Seabrook	$	941	$	—	$	1,349	$	—

	June 30, 2020
	Trade Accounts Receivable		Other Accounts Receivable		Other Accounts Payable		Long-Term Receivables
BridgeTex	$	273	$	2,054	$	—	$	—
Double Eagle	$	480	$	—	$	—	$	—
MVP	$	—	$	422	$	—	$	—
Powder Springs	$	47	$	—	$	—	$	8,219
Saddlehorn	$	—	$	236	$	—	$	—
Seabrook	$	768	$	—	$	3,976	$	—

We are a party to 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 (see Note 7 – Leases for more details regarding this lease).

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

Investments at 12/31/2019	$	1,240,551
Additional investment	59,458
Sale of ownership interest in Saddlehorn	(66,989		)
Earnings of non-controlled entities:
Proportionate share of earnings	78,265
Amortization of excess investment and capitalized interest	(916		)
Earnings of non-controlled entities	77,349
Less:
Distributions from operations of non-controlled entities	102,699
Investments at 6/30/2020	$	1,207,670

5. Inventory

Inventory at December 31, 2019 and June 30, 2020 was as follows (in thousands): 

	December 31, 2019		June 30, 2020
Refined products	$	96,128	$	63,374
Liquefied petroleum gases	29,982		19,652
Transmix	39,546		15,991
Crude oil	12,714		12,697
Additives	6,029		4,670
Total inventory	$	184,399	$	116,384

During the six months ended 2020, we recorded lower of average cost or net realizable value adjustments of $78.4 million related to our refined products, liquefied petroleum gases, transmix and crude oil inventories.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. Debt

Long-term debt at December 31, 2019 and June 30, 2020 was as follows (in thousands):

	December 31, 2019			June 30, 2020
Commercial paper	$	—		$	141,000
4.25% Notes due 2021	550,000			—
3.20% Notes due 2025	250,000			250,000
5.00% Notes due 2026	650,000			650,000
3.25% Notes due 2030	—			500,000
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			500,000
3.95% Notes due 2050	500,000			500,000
Face value of long-term debt	4,750,000			4,841,000
Unamortized debt issuance costs(1)	(35,263		)	(37,986		)
Net unamortized debt discount(1)	(8,662		)	(10,365		)
Long-term debt, net	$	4,706,075		$	4,792,649

(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.

2020 Debt Issuances

In May 2020, we issued $500.0 million of 3.25% senior notes due 2030 in an underwritten public offering. The notes were issued at 99.88% of par. Net proceeds from this offering were approximately $495.2 million after underwriting discounts and offering expenses. The net proceeds from this offering, along with commercial paper borrowings and cash on hand, were used to redeem our $550 million senior notes due in 2021. We recognized $12.9 million of debt prepayment costs as interest expense in our consolidated statements of income related to this early redemption, partially offset by the recognition of a $0.7 million unamortized debt premium, for the three and six month periods ended June 30, 2020.

Other Debt

Revolving Credit Facility. At June 30, 2020, 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 June 30, 2020. Borrowings under this facility may be used for general partnership purposes, including capital expenditures. As of December 31, 2019 and June 30, 2020, there were no borrowings outstanding under this facility and $3.5 million 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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. Commercial paper borrowings outstanding at June 30, 2020 were $141.0 million. The weighted-average interest rate for commercial paper borrowings based on the number of days outstanding was 1.2% for the six months ended June 30, 2020.

7. Leases

Operating Leases – Lessee

Related Party Operating Lease. We have 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.

The following tables provide information about our third party and our Seabrook operating leases (dollars in thousands):

	Three Months Ended June 30, 2019						Three Months Ended June 30, 2020
	Third Party Leases		Seabrook Lease		All Leases		Third Party Leases		Seabrook Lease		All Leases
Total lease expense	$	5,776	$	6,241	$	12,017	$	5,709	$	7,479	$	13,188
	Six Months Ended June 30, 2019						Six Months Ended June 30, 2020
	Third Party Leases		Seabrook Lease		All Leases		Third Party Leases		Seabrook Lease		All Leases
Total lease expense	$	11,425	$	13,150	$	24,575	$	11,699	$	14,378	$	26,077

	December 31, 2019						June 30, 2020
	Third Party Leases		Seabrook Lease		All Leases		Third Party Leases		Seabrook Lease		All Leases
Current lease liability	$	15,136	$	11,085	$	26,221	$	15,337	$	11,914	$	27,251
Long-term lease liability	$	81,508	$	62,515	$	144,023	$	77,354	$	56,920	$	134,274
Right-of-use asset	$	98,268	$	73,600	$	171,868	$	90,021	$	68,834	$	158,855

8. 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 $2.4 million for each of the three months ended June 30, 2019 and 2020, respectively, and $6.5 million and $6.9 million for the six months ended June 30, 2019 and 2020, respectively.

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In addition, we sponsor two pension plans, including one for all non-union employees and one that covers certain union employees, and a postretirement benefit plan for certain employees. Prior to the March 2020 sale of our New Haven terminal (See Note 1 – Organization, Description of Business and Basis of Presentation), we sponsored an additional union pension plan that covered union employees at that terminal. Net periodic benefit expense for the three and six months ended June 30, 2019 and 2020 was as follows (in thousands):

 

	Three Months Ended					Three Months Ended
	June 30, 2019					June 30, 2020
	Pension Benefits			Other  Postretirement Benefits		Pension Benefits			Other  Postretirement Benefits
Components of net periodic benefit costs:
Service cost	$	6,358		$	43	$	6,735		$	67
Interest cost	3,110			135		2,711			127
Expected return on plan assets	(2,317		)	—		(2,809		)	—
Amortization of prior service credit	(45		)	—		(45		)	—
Amortization of actuarial loss	1,508			117		1,322			136
Settlement cost	2,060			—		—			—
Net periodic benefit cost	$	10,674		$	295	$	7,914		$	330

 

	Six Months Ended					Six Months Ended
	June 30, 2019					June 30, 2020
	Pension Benefits			Other  Postretirement Benefits		Pension Benefits			Other  Postretirement Benefits
Components of net periodic benefit costs:
Service cost	$	12,885		$	97	$	13,938		$	129
Interest cost	6,110			254		5,513			239
Expected return on plan assets	(4,691		)	—		(5,695		)	—
Amortization of prior service credit	(90		)	—		(90		)	—
Amortization of actuarial loss	2,785			188		2,734			255
Settlement cost	2,060			—		969			—
Settlement gain on disposition of assets	—			—		(1,342		)	—
Net periodic benefit cost	$	19,059		$	539	$	16,027		$	623

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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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 six months ended June 30, 2019 and 2020 were as follows (in thousands):

	Three Months Ended						Three Months Ended
	June 30, 2019						June 30, 2020
Gains (Losses) Included in AOCL	Pension Benefits			Other Postretirement Benefits			Pension Benefits			Other Postretirement Benefits
Beginning balance	$	(87,370	)	$	(5,338	)	$	(101,447	)	$	(8,259	)
Net actuarial gain (loss)	(10,029		)	(884		)	1,560			(1,146		)
Recognition of prior service credit amortization in income	(45		)	—			(45		)	—
Recognition of actuarial loss amortization in income	1,508			117			1,322			136
Recognition of settlement cost in income	2,060			—			—			—
Ending balance	$	(93,876	)	$	(6,105	)	$	(98,610	)	$	(9,269	)

	Six Months Ended						Six Months Ended
	June 30, 2019						June 30, 2020
Gains (Losses) Included in AOCL	Pension Benefits			Other Postretirement Benefits			Pension Benefits			Other Postretirement Benefits
Beginning balance	$	(88,602	)	$	(5,409	)	$	(104,739	)	$	(8,378	)
Net actuarial gain (loss)	(10,029		)	(884		)	813			(1,146		)
Curtailment gain	—			—			1,703			—
Recognition of prior service credit amortization in income	(90		)	—			(90		)	—
Recognition of actuarial loss amortization in income	2,785			188			2,734			255
Recognition of settlement cost in income	2,060			—			969			—
Ending balance	$	(93,876	)	$	(6,105	)	$	(98,610	)	$	(9,269	)

Contributions estimated to be paid into the plans in 2020 are $29.3 million and $0.7 million for the pension plans and other postretirement benefit plan, respectively.

9. 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 common units. The estimated units remaining available under the LTIP at June 30, 2020 total 1.0 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Equity-based incentive compensation expense for the three and six months ended June 30, 2019 and 2020, primarily recorded as G&A expense on our consolidated statements of income, was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2020		2019		2020
Performance-based awards	$	9,317	$	1,821	$	12,961	$	(126	)
Time-based awards	1,573		2,435		2,843		4,537
Total	$	10,890	$	4,256	$	15,804	$	4,411

In first and second quarters of 2020, we reduced our LTIP accruals related to performance awards vesting in 2020 and 2021 to reflect the estimated impacts of COVID-19 related reductions in economic activity and the significant decline in commodity prices.

On January 31, 2020, 378,144 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, 2022.

Basic and Diluted Net Income Per Common Unit

The difference between our actual common units outstanding and our weighted-average number of common 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 or repurchased during a period.  The difference between the weighted-average number of common 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.

10. Derivative Financial Instruments

Interest Rate Derivatives

In second quarter 2020, upon issuance of $500.0 million of 3.25% notes due 2030, we terminated and settled $100.0 million of treasury lock agreements that we had previously entered into to protect against the variability of future interest payments for a loss of $10.4 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 and will be recognized into earnings as an adjustment to our periodic interest expense over the term of the hedged transaction in accordance with our hedge strategy.

Commodity Derivatives

Our open futures contracts at June 30, 2020 were as follows:

Type of Contract/Accounting Methodology	Product Represented by the Contract and Associated Barrels	Maturity Dates
Futures - Economic Hedges	2.3 million barrels of refined products and crude oil	Between July 2020 and November 2022
Futures - Economic Hedges	0.2 million barrels of gas liquids	Between July and December 2020

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Commodity Derivatives Contracts and Deposits Offsets

At December 31, 2019 and June 30, 2020, we had made margin deposits of $27.4 million and $25.5 million, respectively, for our futures contracts with our counterparties, which were recorded as current assets under 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, 2019 and June 30, 2020 (in thousands):

Description	Gross Amounts of Recognized Liabilities			Gross Amounts of Assets Offset in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets			Margin Deposit Amounts Not Offset in the Consolidated Balance Sheets		Net Asset Amount(1)
As of 12/31/2019	$	(11,033	)	$	811	$	(10,222	)	$	27,415	$	17,193
As of 6/30/2020	$	(14,570	)	$	3,218	$	(11,352	)	$	25,456	$	14,104

(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 December 31, 2019 and June 30, 2020 was $17.3 million and $12.7 million, respectively.

Impact of Derivatives on Our Financial Statements

Comprehensive Income

The changes in derivative activity included in AOCL for the three and six months ended June 30, 2019 and 2020 were as follows (in thousands):

 

	Three Months Ended						Six Months Ended
	June 30,						June 30,
Derivative Losses Included in AOCL	2019			2020			2019			2020
Beginning balance	$	(30,229	)	$	(60,065	)	$	(26,480	)	$	(48,960	)
Net gain (loss) on cash flow hedges	(6,659		)	1,470			(11,035		)	(10,444		)
Reclassification of net loss on cash flow hedges to income	601			847			1,228			1,656
Ending balance	$	(36,287	)	$	(57,748	)	$	(36,287	)	$	(57,748	)

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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 six months ended June 30, 2019 and 2020 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 June 30, 2019	$	(6,659	)	Interest expense	$	(601	)
Three Months Ended June 30, 2020	$	1,470		Interest expense	$	(847	)
Six Months Ended June 30, 2019	$	(11,035	)	Interest expense	$	(1,228	)
Six Months Ended June 30, 2020	$	(10,444	)	Interest expense	$	(1,656	)

As of June 30, 2020, the net loss estimated to be classified to interest expense over the next twelve months from AOCL is approximately $3.6 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 six months ended June 30, 2019 and 2020 of derivatives that were not designated as hedging instruments (in thousands):

		Amount of Gain (Loss) Recognized on Derivatives
		Three Months Ended						Six Months Ended
	Location of Gain (Loss) Recognized on Derivatives	June 30,						June 30,
Derivative Instrument		2019			2020			2019			2020
Futures contracts	Product sales revenue	$	(4,619	)	$	(26,755	)	$	(59,130	)	$	97,014
Futures contracts	Cost of product sales	(6,148		)	(417		)	(3,875		)	(4,344		)
Basis derivative agreement	Other operating income (expense)	(6,487		)	3,400			(4,959		)	501
	Total	$	(17,254	)	$	(23,772	)	$	(67,964	)	$	93,171

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 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, 2019 and June 30, 2020 (in thousands):

	December 31, 2019
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Commodity derivatives contracts, net	$	811	Commodity derivatives contracts, net	$	11,033
Basis derivative agreement	Other current assets	—		Other current liabilities	8,457
Basis derivative agreement	Other noncurrent assets	—		Other noncurrent liabilities	8,847
	Total	$	811	Total	$	28,337
	June 30, 2020
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Commodity derivatives contracts, net	$	1,024	Commodity derivatives contracts, net	$	14,555
Futures contracts	Other noncurrent assets	2,194		Other noncurrent liabilities	15
Basis derivative agreement	Other current assets	—		Other current liabilities	8,839
Basis derivative agreement	Other noncurrent assets	—		Other noncurrent liabilities	3,910
	Total	$	3,218	Total	$	27,319

11. 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:

• 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 10 – 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 10 - 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 and contractual obligations. At June 30, 2020, these primarily include a long-term contractual obligation we entered into in connection with the sale of our three marine terminals to a subsidiary of Buckeye. This obligation requires us to perform certain environmental remediation

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

work on Buckeye’s behalf at the New Haven terminal.  The contractual obligation was recorded at fair value on our consolidated balance sheets upon initial recognition and was calculated using our best estimate of potential outcome scenarios to determine our liability for the remediation costs required in this agreement.

• Debt. The fair value of our publicly traded notes was based on the prices of those notes at December 31, 2019 and June 30, 2020; 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, 2019 and June 30, 2020 based on the three levels established by ASC 820, Fair Value Measurements and Disclosures (in thousands):

	December 31, 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)
Commodity derivatives contracts	$	(10,222	)	$	(10,222	)	$	(10,222	)	$	—		$	—
Basis derivative agreement	$	(17,304	)	$	(17,304	)	$	—		$	(17,304	)
Long-term receivables	$	20,782		$	20,782		$	—		$	—		$	20,782
Guarantees and contractual obligations	$	(408	)	$	(408	)	$	—		$	—		$	(408	)
Debt	$	(4,706,075	)	$	(5,192,685	)	$	—		$	(5,192,685	)	$	—

	June 30, 2020
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)
Commodity derivatives contracts	$	(11,352	)	$	(11,352	)	$	(11,352	)	$	—		$	—
Basis derivative agreement	$	(12,749	)	$	(12,749	)	$	—		$	(12,749	)	$	—
Long-term receivables	$	21,517		$	21,517		$	—		$	—		$	21,517
Guarantees and contractual obligations	$	(11,286	)	$	(11,286	)	$	—		$	—		$	(11,286	)
Debt	$	(4,792,649	)	$	(4,688,925	)	$	—		$	(4,688,925	)	$	—

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. 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 $14.9 million and $12.5 million at December 31, 2019 and June 30, 2020, 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 $1.4 million and $0.8 million for the three months ended June 30, 2019 and 2020, respectively, and $3.4 million and $1.2 million for the six months ended June 30, 2019 and 2020, respectively.

Environmental Receivables

Receivables from insurance carriers and other third parties related to environmental matters were $2.9 million at December 31, 2019, of which $1.8 million and $1.1 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 $1.8 million at June 30, 2020, of which $0.9 million and $0.9 million were recorded to other accounts receivable and long-term receivables, respectively, on our consolidated balance sheets.

Other

In first quarter 2020, we entered into a long-term contractual obligation in connection with the sale of three marine terminals to Buckeye.  This obligation requires us to perform certain environmental remediation work on Buckeye’s behalf at the New Haven terminal.  As of June 30, 2020, our consolidated balance sheets reflected a current liability of $0.7 million and a noncurrent liability of $10.2 million to reflect the fair value of this obligation.

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 June 30, 2020, 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

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

or other indemnification arrangements will not have a material adverse effect on our results of operations, financial position or cash flows.

13. 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, terminalling and other ancillary revenue from this customer of $7.0 million and $7.3 million for the three months ended June 30, 2019 and 2020, respectively, and $14.3 million and $15.7 million for the six months ended June 30, 2019 and 2020, respectively. We recorded receivables of $3.8 million and $2.3 million from this customer at December 31, 2019 and June 30, 2020, respectively.  In the second quarter of 2020, we also received storage and other miscellaneous revenue of $0.2 million from a subsidiary of a separate company for which Stacy Methvin serves as a director.

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

14. Partners’ Capital and Distributions

Partners’ Capital

Our general partner’s board of directors authorized the repurchase of up to $750 million of our common units through 2022. The timing, price and actual number of common units repurchased will depend on a number of factors including our expected expansion capital spending needs, alternative investment opportunities, excess cash available, legal and regulatory requirements, market conditions and the trading price of our common units. The repurchase program does not obligate us to acquire any particular amount of common units, and the repurchase program may be suspended or discontinued at any time.

The following table details the changes in the number of our common units outstanding from December 31, 2019 through June 30, 2020:

Common units outstanding on December 31, 2019	228,403,428
Units repurchased during 2020	(3,631,784	)
January 2020–Settlement of employee LTIP awards	275,093
During 2020–Other(a)	9,550
Common units outstanding on June 30, 2020	225,056,287

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

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MAGELLAN MIDSTREAM PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Distributions

Distributions we paid during 2019 and 2020 were as follows (in thousands, except per unit amounts):

 

Payment Date	Per Unit Cash Distribution Amount			Total Cash Distribution
02/14/2019		$	0.9975		$	227,832
05/15/2019		1.0050			229,545
Through 06/30/2019		2.0025			457,377
08/14/2019		1.0125			231,258
11/14/2019		1.0200			232,971
Total		$	4.0350		$	921,606
02/14/2020		$	1.0275		$	234,774
05/15/2020		1.0275			231,245
Through 06/30/2020		2.0550			466,019
08/14/2020(a)		1.0275			231,245
Total		$	3.0825		$	697,264

(a) Our general partner’s board of directors declared this cash distribution in July 2020 to be paid on August 14, 2020 to unitholders of record at the close of business on August 7, 2020.

15. Subsequent Events

Recognizable events

No recognizable events occurred subsequent to June 30, 2020.

Non-recognizable events

Cash Distribution. In July 2020, our general partner’s board of directors declared a quarterly cash distribution of $1.0275 per unit for the period of April 1, 2020 through June 30, 2020. This quarterly cash distribution will be paid on August 14, 2020 to unitholders of record on August 7, 2020.

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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 June 30, 2020, our asset portfolio consisted of:

• our refined products segment, comprised of our approximately 9,800-mile refined products pipeline system with 53 connected terminals, as well as 25 independent terminals not connected to our pipeline system and two marine storage terminals (one of which is owned through a joint venture); and

• our crude oil segment, comprised of approximately 2,200 miles of crude oil pipelines, a condensate splitter and 37 million barrels of aggregate storage capacity, of which approximately 25 million barrels are used for contract storage. Approximately 1,000 miles of these pipelines, the condensate splitter and 30 million barrels of this storage capacity (including 22 million barrels used for contract storage) are wholly-owned, with the remainder owned through joint ventures.

During first quarter 2020, we completed a reorganization of our reportable segments.  This reorganization was effected to reflect changes in the management of our business in conjunction with the sale of three of our marine terminals.  Following this sale, two of our remaining marine terminals were combined with our refined products segment and one terminal was combined with our crude oil segment based on the types of product stored at the facilities.  Accordingly, we have restated our segment disclosures for all previous periods included in this report.

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 Form 8-K filed with the Securities and Exchange Commission on May 4, 2020, which reflects changes in our reporting segments since the filing of our Annual Report on Form 10-K for the year ended December 31, 2019.

Recent Developments

COVID-19 and Decline in Commodity Prices.  The recent period of unprecedented events impacting travel and economic activity have significantly reduced demand for refined products in the markets we serve.  Recent declines in commodity prices have also significantly reduced the value of tender barrels we receive from our transportation customers and the margins we earn from our gas liquids blending activities.  The reduction in refined products demand and lower crude oil prices have combined to put significant downward pressure on domestic crude oil production.  While we benefit from take-or-pay commitments for the majority of the capacity of our crude oil pipelines, a sustained reduction in crude oil production could cause delays in the timing of our recognition of revenue from these commitments.  These factors have also significantly decreased the creditworthiness of certain of our crude oil transportation customers, resulting in an increased risk of customer defaults.  To date, our operations and our employees have successfully adapted to the recent developments, enabling our customers to continue benefiting from the services they rely on from our critical infrastructure, and our customers have continued to meet their obligations to us.  Given the uncertain timing of a return of refined products demand to historical levels and a further recovery in commodity prices, the extent of the impact these events will continue to have on our results of operations is unclear and could be material.  However, we do not believe these events will impact our ability to meet any of our financial obligations or result in any significant impairments to our assets.

Cash Distribution. In July 2020, our general partner’s board of directors declared a quarterly cash distribution of $1.0275 per unit for the period of April 1, 2020 through June 30, 2020. This quarterly cash distribution will be paid on August 14, 2020 to unitholders of record on August 7, 2020.

33

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 gas liquids 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.

During first quarter 2020, we revised our reporting segments. See Note 1 – Organization, Description of Business and Basis of Presentation of the consolidated financial statements included in Item 1 of Part I of this report for a discussion of this matter.

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Three Months Ended June 30, 2019 compared to Three Months Ended June 30, 2020

	Three Months Ended June 30,						Variance Favorable  (Unfavorable)
	2019			2020			$ Change			% Change
Financial Highlights ($ in millions, except operating statistics)
Transportation and terminals revenue:
Refined products	$	347.6		$	279.8		$	(67.8	)	(20)
Crude oil	160.2			133.6			(26.6		)	(17)
Intersegment eliminations	(1.4		)	(1.6		)	(0.2		)	(14)
Total transportation and terminals revenue	506.4			411.8			(94.6		)	(19)
Affiliate management fee revenue	5.4			5.3			(0.1		)	(2)
Operating expenses:
Refined products	132.8			103.4			29.4			22
Crude oil	38.8			45.9			(7.1		)	(18)
Intersegment eliminations	(2.6		)	(3.2		)	0.6			23
Total operating expenses	169.0			146.1			22.9			14
Product margin:
Product sales revenue	190.0			43.3			(146.7		)	(77)
Cost of product sales	152.9			50.6			102.3			67
Product margin	37.1			(7.3		)	(44.4		)	n/a
Other operating income (expense)	(5.0		)	4.0			9.0			n/a
Earnings of non-controlled entities	40.8			33.7			(7.1		)	(17)
Operating margin	415.7			301.4			(114.3		)	(27)
Depreciation, amortization and impairment expense	62.6			58.6			4.0			6
G&A expense	52.4			42.1			10.3			20
Operating profit	300.7			200.7			(100.0		)	(33)
Interest expense (net of interest income and interest capitalized)	45.9			64.8			(18.9		)	(41)
Gain on disposition of assets	(4.6		)	—			(4.6		)	(100)
Other (income) expense	4.5			1.4			3.1			69
Income before provision for income taxes	254.9			134.5			(120.4		)	(47)
Provision for income taxes	1.2			0.7			0.5			42
Net income	$	253.7		$	133.8		$	(119.9	)	(47)
Operating Statistics:
Refined products:
Transportation revenue per barrel shipped	$	1.606		$	1.675
Volume shipped (million barrels):
Gasoline	70.8			61.3
Distillates	47.2			41.3
Aviation fuel	9.9			2.7
Liquefied petroleum gases	4.5			—
Total volume shipped	132.4			105.3
Crude oil:
Magellan 100%-owned assets:
Transportation revenue per barrel shipped(1)	$	0.977		$	1.048
Volume shipped (million barrels)(1)(2)	80.5			47.7
Terminal average utilization (million barrels per month)	22.9			25.5
Select joint venture pipelines:
BridgeTex - volume shipped (million barrels)(3)	38.8			32.2
Saddlehorn - volume shipped (million barrels)(4)	13.4			15.1

(1) Volume shipped includes shipments related to our crude oil marketing activities. Revenues from those activities are reflected as product sales revenue in our consolidated financial statements. Transportation revenue per barrel shipped reflects average rates on third-party volumes only.

(2) Volume shipped in 2020 reflects a change in the way our customers contract for our services pursuant to which customers are able to utilize crude oil storage capacity at East Houston and dock access at Seabrook. Subsequent to this change, the services we provide no longer include a transportation element. Therefore, revenues related to these services are reflected entirely as terminalling revenues and the related volumes are no longer reflected in our calculation of transportation volumes.

(3) These volumes reflect the total shipments for the BridgeTex pipeline, which is owned 30% by us.

(4) These volumes reflect the total shipments for the Saddlehorn pipeline, which was owned 40% by us through January 31, 2020 and 30% thereafter.

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Transportation and terminals revenue decreased $94.6 million resulting from:

• a decrease in refined products revenue of $67.8 million. Transportation volumes primarily decreased due to lower demand during second quarter 2020 associated with travel and economic restrictions related to COVID-19 and reduced drilling activity from the lower commodity price environment. Revenues also decreased due to the sale of three marine terminals in first quarter 2020 and discontinuation of the ammonia pipeline in late 2019. These declines were partially offset by an increase in the average tariff rate in the current period as a result of the 2019 mid-year adjustment of 4.3%, as well as contributions from the newly-constructed East Houston-to-Hearne pipeline segment that became operational in late 2019; and

• a decrease in crude oil revenue of $26.6 million. Lower transportation revenue on our Longhorn pipeline resulted from less third-party spot shipments due to unfavorable differentials between the Permian Basin and Houston as well as the recent assignment of a customer contract to our marketing affiliate, with volume shipped by our affiliate recognized as product margin instead of transportation revenue.  Lower tariff volume on our Houston distribution system resulted primarily from a change in the way customers now contract for services at our Seabrook Logistics, LLC (“Seabrook”) export facility, and was offset by incremental revenue from the related terminal transfer fee as well as more contract storage utilized at higher rates.

Operating expenses decreased by $22.9 million primarily resulting from:

• a decrease in refined products expenses of $29.4 million primarily due to timing of planned integrity spending and more favorable product overages (which reduce operating expenses) as well as no costs in the current period associated with the sold or discontinued assets; and

• an increase in crude oil expenses of $7.1 million due to the timing of planned integrity spending.

Product margin decreased $44.4 million primarily due to higher losses on futures contracts in the current period and lower gas liquids sales volumes as a result of lower economic blending opportunities, partially offset by product margins in second quarter 2020 from marketing activities on our Longhorn pipeline.

Other operating income (expense) was $9.0 million favorable in second quarter 2020 primarily due to unrealized gains on a basis derivative agreement during the current period compared to losses in the prior period.

Earnings of non-controlled entities decreased $7.1 million primarily due to decreased earnings from BridgeTex Pipeline Company, LLC (“BridgeTex”) and Saddlehorn Pipeline Company, LLC (“Saddlehorn”). BridgeTex revenues were less primarily due to lower spot shipments, and Saddlehorn equity earnings were lower due to our reduced ownership interest. Otherwise, MVP Terminalling, LLC (“MVP”) contributed additional earnings to the 2020 period due to the recent start-up of newly-constructed storage and dock assets.

Depreciation, amortization and impairment expense decreased $4.0 million primarily due to lower depreciation expense following recent asset sales.

G&A expense decreased $10.3 million primarily due to lower incentive compensation accruals to reflect the estimated impacts of COVID-19 related reductions in economic activity and the significant decline in commodity prices.

Interest expense, net of interest income and interest capitalized, increased $18.9 million primarily due to $12.9 million of debt prepayment costs in the second quarter of 2020 related to the early extinguishment of our 4.25% Notes that were due February 2021, as well as higher outstanding debt. Our average outstanding debt increased from $4.4 billion in second quarter 2019 to $4.9 billion in second quarter 2020. Our weighted-average interest rate decreased slightly from 4.6% in second quarter 2019 to 4.5% in second quarter 2020.

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Gain on disposition of assets was $4.6 million unfavorable. Second quarter 2019 included a gain from the sale of an inactive terminal along our refined products pipeline system.

Other expense was $3.1 million favorable due to lower pension-related costs in the current period.

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Six Months Ended June 30, 2019 compared to Six Months Ended June 30, 2020

	Six Months Ended June 30,						Variance Favorable  (Unfavorable)
	2019			2020			$ Change			% Change
Financial Highlights ($ in millions, except operating statistics)
Transportation and terminals revenue:
Refined products	$	657.2		$	594.1		$	(63.1	)	(10)
Crude oil	312.3			279.3			(33.0		)	(11)
Intersegment eliminations	(2.3		)	(3.2		)	(0.9		)	(39)
Total transportation and terminals revenue	967.2			870.2			(97.0		)	(10)
Affiliate management fee revenue	10.5			10.6			0.1			1
Operating expenses:
Refined products	235.5			209.3			26.2			11
Crude oil	84.5			92.7			(8.2		)	(10)
Intersegment eliminations	(5.0		)	(6.4		)	1.4			28
Total operating expenses	315.0			295.6			19.4			6
Product margin:
Product sales revenue	353.0			362.4			9.4			3
Cost of product sales	322.0			299.8			22.2			7
Product margin	31.0			62.6			31.6			102
Other operating income (expense)	1.9			3.5			1.6			84
Earnings of non-controlled entities	72.1			77.3			5.2			7
Operating margin	767.7			728.6			(39.1		)	(5)
Depreciation, amortization and impairment expense	124.4			122.1			2.3			2
G&A expense	98.4			79.0			19.4			20
Operating profit	544.9			527.5			(17.4		)	(3)
Interest expense (net of interest income and interest capitalized)	101.0			115.3			(14.3		)	(14)
Gain on disposition of assets	(26.4		)	(12.9		)	(13.5		)	(51)
Other expense	6.6			2.3			4.3			65
Income before provision for income taxes	463.7			422.8			(40.9		)	(9)
Provision for income taxes	2.3			1.4			0.9			39
Net income	$	461.4		$	421.4		$	(40.0	)	(9)
Operating Statistics:
Refined products:
Transportation revenue per barrel shipped	$	1.590		$	1.626
Volume shipped (million barrels):
Gasoline	132.9			127.5
Distillates	91.8			85.1
Aviation fuel	18.7			12.1
Liquefied petroleum gases	5.1			0.4
Total volume shipped	248.5			225.1
Crude oil:
Magellan 100%-owned assets:
Transportation revenue per barrel shipped(1)	$	0.961		$	0.970
Volume shipped (million barrels)(1)(2)	159.9			122.8
Terminal average utilization (million barrels per month)	22.6			24.1
Select joint venture pipelines:
BridgeTex - volume shipped (million barrels)(3)	76.5			69.3
Saddlehorn - volume shipped (million barrels)(4)	22.4			31.4

(1) Volume shipped includes shipments related to our crude oil marketing activities. Revenues from those activities are reflected as product sales revenue in our consolidated financial statements. Transportation revenue per barrel shipped reflects average rates on third-party volumes only.

(2) Volume shipped in 2020 reflects a change in the way our customers contract for our services pursuant to which customers are able to utilize crude oil storage capacity at East Houston and dock access at Seabrook. Subsequent to this change, the services we provide no longer include a transportation element. Therefore, revenues related to these services are reflected entirely as terminalling revenues and the related volumes are no longer reflected in our calculation of transportation volumes.

(3) These volumes reflect the total shipments for the BridgeTex pipeline, which is owned 30% by us.

(4) These volumes reflect the total shipments for the Saddlehorn pipeline, which was owned 40% by us through January 31, 2020 and 30% thereafter.

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Transportation and terminals revenue decreased $97.0 million resulting from:

• a decrease in refined products revenue of $63.1 million. Transportation volumes decreased due to lower demand during 2020 associated with travel and economic restrictions related to COVID-19 and reduced drilling activity from the lower commodity price environment. Revenues also decreased due to the sale of three marine terminals in first quarter 2020 and discontinuation of the ammonia pipeline in late 2019. These declines were partially offset by an increase in the average tariff rate in the current period as a result of the 2019 mid-year adjustment of 4.3%, as well as contributions from the newly-constructed East Houston-to-Hearne pipeline segment that became operational in late 2019; and

• a decrease in crude oil revenue of $33.0 million. Lower transportation revenue on our Longhorn pipeline resulted from less third-party spot shipments due to unfavorable differentials between the Permian Basin and Houston as well as the recent assignment of a customer contract to our marketing affiliate, with volume shipped by our affiliate recognized as product margin instead of transportation revenue.  Lower tariff volume on our Houston distribution system resulted primarily from a change in the way customers now contract for services at our Seabrook export facility, and was offset by incremental revenue from the related terminal transfer fee as well as more contract storage utilized at higher rates.

Operating expenses decreased by $19.4 million primarily resulting from:

• a decrease in refined products expenses of $26.2 million primarily due to timing of planned integrity spending and more favorable product overages as well as no costs in the current period associated with the sold or discontinued assets; and

• an increase in crude oil expenses of $8.2 million due to the timing of planned integrity spending and less favorable product overages.

Product margin increased $31.6 million primarily due to recognition of gains on futures contracts in the current period compared to losses in 2019 and product margins from marketing activities on our Longhorn pipeline in 2020, partially offset by unfavorable lower of cost or net realizable value adjustments during 2020 due to the significant decrease in commodity prices.

Other operating income (expense) was $1.6 million favorable in 2020 primarily due to realized gains on a basis derivative agreement during the current period compared to losses in the prior period, partially offset by insurance settlements received in 2019 related to Hurricane Harvey.

Earnings of non-controlled entities increased $5.2 million primarily due to increased earnings from Powder Springs Logistics, LLC (“Powder Springs”) mainly as a result of gains recognized in the current year on futures contracts compared to losses in the prior year and additional earnings from MVP from the recent start-up of newly-constructed storage and dock assets. Partially offsetting these increases were lower earnings from BridgeTex and Saddlehorn in the second quarter of 2020.

Depreciation, amortization and impairment expense decreased $2.3 million primarily due to lower depreciation expense following recent asset sales.

G&A expense decreased $19.4 million primarily due to lower incentive compensation accruals to reflect the estimated impacts of COVID-19 related reductions in economic activity and the significant decline in commodity prices.

Interest expense, net of interest income and interest capitalized, increased $14.3 million primarily due to higher outstanding debt. Our average outstanding debt increased from $4.4 billion in 2019 to $4.9 billion in 2020. Our weighted-average interest rate decreased from 4.7% in 2019 to 4.5% in 2020. Debt prepayment costs following the early extinguishment of notes each year were also $4.6 million higher in 2020.

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Gain on disposition of assets was $13.5 million unfavorable. In 2020, we recognized a gain on the sale of a portion of our interest in Saddlehorn of $12.9 million. In 2019, we recognized a deferred gain of $11.0 million related to the 2018 sale of a portion of our investment in BridgeTex, a gain of $10.2 million related to our discontinued Delaware Basin crude oil pipeline construction project that was sold to a third party and a gain of $5.3 million resulting from the sale of an inactive terminal along our refined products pipeline system.

Other expense was $4.3 million favorable due to lower pension-related costs in the current period.

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 common unitholders 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 six months ended June 30, 2019 and 2020 to net income, which is its nearest comparable GAAP financial measure, follows (in millions):

	Six Months Ended June 30,						Increase (Decrease)
	2019			2020
Net income	$	461.4		$	421.4		$	(40.0	)
Interest expense, net	101.0			115.3			14.3
Depreciation, amortization and impairment(1)	118.9			121.6			2.7
Equity-based incentive compensation(2)	6.0			(10.3		)	(16.3		)
Gain on disposition of assets(3)	(16.3		)	(10.5		)	5.8
Commodity-related adjustments:
Derivative (gains) losses recognized in the period associated with future transactions(4)	20.8			(4.9		)	(25.7		)
Derivative gains (losses) recognized in previous periods associated with transactions completed in the period(4)	71.2			(16.0		)	(87.2		)
Inventory valuation adjustments(5)	(9.4		)	27.8			37.2
Total commodity-related adjustments	82.6			6.9			(75.7		)
Distributions from operations of non-controlled entities in excess of earnings	11.1			25.4			14.3
Adjusted EBITDA	764.7			669.8			(94.9		)
Interest expense, net, excluding debt issuance cost amortization(6)	(91.1		)	(100.5		)	(9.4		)
Maintenance capital(7)	(40.8		)	(53.3		)	(12.5		)
DCF	$	632.8		$	516.0		$	(116.8	)

(1) 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 common units, expenses related to this plan generally are deemed non-cash and added back for DCF purposes. The amounts above have been reduced by 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.

(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.

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(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.

(6) Interest expense includes $8.3 million of debt prepayment costs in 2019 and $12.9 million in 2020, which are excluded from DCF as they are financing activities and not related to our ongoing operations.

(7) 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 $570.6 million and $563.3 million for the six months ended June 30, 2019 and 2020, respectively. The $7.3 million decrease in 2020 was due to lower net income as previously described, mostly offset by changes in our working capital and adjustments for non-cash items.

Investing Activities. Net cash used by investing activities for the six months ended June 30, 2019 and 2020 was $502.2 million and $18.8 million, respectively. During the 2020 period, we incurred $235.6 million for capital expenditures, which included $53.3 million for maintenance capital, $182.1 million for our expansion capital projects and $0.2 million for undivided joint interest projects for which cash was received from a third party. Also, during 2020, we sold three marine terminals for cash proceeds of $251.8 million and sold a portion of our interest in Saddlehorn for cash proceeds of $79.9 million. Additionally, we contributed capital of $59.5 million in conjunction with our joint ventures, which we account for as investments in non-controlled entities. During the 2019 period, we incurred $514.8 million for capital expenditures, which included $40.8 million for maintenance capital, $411.2 million for our expansion capital projects and $62.8 million for undivided joint interest projects for which cash was received from a third party. Additionally, we contributed net capital of $104.8 million in conjunction with our joint ventures, of which $99.8 million related to capital projects.

Financing Activities. Net cash used by financing activities for the six months ended June 30, 2019 and 2020 was $346.4 million and $619.9 million, respectively. During the 2020 period, we paid cash distributions of $466.0 million to our unitholders and made common unit repurchases of $202.0 million. Additionally, we received net proceeds of $499.4 million from the issuance of long-term senior notes and had net commercial paper borrowings of $141.0 million, which were used to repay our $550.0 million of 4.25% notes due 2021. Also, in January 2020, our equity-based incentive compensation awards that vested December 31, 2019 were settled by issuing 284,643 common units and distributing those units to the long-term incentive plan (“LTIP”) participants, resulting in payments primarily associated with tax withholdings of $14.7 million. During the 2019 period, we paid cash distributions of $457.4 million to our unitholders. Additionally, we received net proceeds of $496.9 million from borrowings under long-term notes and had net commercial paper borrowings of $197.0 million, which were used to repay our $550.0 million of 6.55% notes due 2019. Also, in January 2019, our equity-based incentive compensation awards that vested December 31, 2018 were settled by issuing 208,268 common units and distributing those units to the LTIP participants, resulting in payments primarily associated with tax withholdings of $9.8 million.

The quarterly distribution amount related to our second quarter 2020 financial results (to be paid in third quarter 2020) is $1.0275 per unit.  If we were to continue paying cash distributions at this level on the number of common units currently outstanding, total cash distributions of approximately $925 million would be paid to our unitholders related to 2020 earnings. Management believes we will have sufficient DCF to fund these distributions.

During 2020, we initiated our common unit repurchase program, with authorization to repurchase up to $750 million of our common units through 2022. During the six months ended June 30, 2020, we repurchased 3.6 million of our common units for $202 million. The timing, price and actual number of common units repurchased will depend on a number of factors including our expected expansion capital spending needs, excess cash available, balance sheet metrics, legal and regulatory requirements, market conditions and the trading price of our common units.

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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 and to construct new assets, which we refer to collectively 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 six months ended June 30, 2020, our maintenance capital spending was $53.3 million. For 2020, we expect to spend approximately $90 million on maintenance capital.

During the first six months of 2020, we spent $182.1 million for our expansion capital projects and contributed $59.5 million for capital projects in conjunction with our joint ventures. Based on the progress of expansion projects already underway, we expect to spend approximately $400 million in 2020 and $40 million in 2021 to complete our current projects.

Liquidity

Cash generated from operations is a key source of liquidity for funding debt service, maintenance capital expenditures and quarterly distributions. Additional liquidity for purposes other than quarterly distributions, 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 common units (see Note 6 – Debt and Note 14 – 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 provide us access to capital or the ability to issue additional debt or equity securities on acceptable terms, 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.

Other Items

Pipeline Tariff Changes. The Federal Energy Regulatory Commission (“FERC”) regulates the rates charged on our interstate common carrier pipelines. We increased our rates by approximately 2.0% in the 40% of our refined products markets that are subject to the FERC’s index methodology on July 1, 2020. In the 60% of our remaining refined products markets, we increased our rates by an average of nearly 4.5%, for an overall average refined rate increase of 3.5%. 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. As a result, we also increased the rates on the majority of our crude oil pipelines by approximately 2.0% in July 2020.

The FERC-approved indexing method for the past five years has been the annual change in the producer price index for finished goods plus 1.23%.  In June 2020, the FERC issued a Notice of Inquiry (“NOI”) to initiate a review of the rate index to be utilized over the next five-year period beginning July 1, 2021.  The FERC’s proposal in the NOI preliminarily recommends the use of the producer price index for finished goods plus 0.09% as the new

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index level to calculate annual tariff changes.  The FERC has invited comments on the NOI, which is subject to further review and adjustment.

Commodity Derivative Agreements. Certain of our business activities result in our owning various commodities, which exposes us to commodity price risk. We generally use forward physical commodity contracts and exchange-traded futures contracts to hedge against changes in prices of the commodities that we expect to sell or purchase in future periods. We also entered into a basis derivative agreement for which settlements are determined based on the basis differential of crude oil prices at different market locations.

For further information regarding the quantities of refined products and crude oil hedged at June 30, 2020 and the fair value of open hedge contracts at that date, please see Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Related Party Transactions. See Note 13 – Related Party Transactions in Item 1 of Part I of this report for detail of our related party transactions.

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 mitigate 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 gas liquids blending and fractionation activities, and from managing product overages and shortages associated with our refined products and crude oil pipelines and terminals. We generally use derivatives such as forward physical contracts and exchange-traded futures contracts to help us manage our 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 June 30, 2020, we had commitments under forward purchase and sale contracts as follows (in millions):

	Total		2020		2021-2022
Forward purchase contracts – notional value	$	17.5	$	17.5	$	—
Forward purchase contracts – barrels	0.5		0.5		—
Forward sales contracts – notional value	$	24.5	$	23.2	$	1.3
Forward sales contracts – barrels	0.6		0.6		—

We generally use exchange-traded futures contracts to hedge against changes in the price of the 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 2.3 million barrels of petroleum products we expect to sell and 0.2 million barrels of gas liquids we expect to purchase, was a net liability of $11.4 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 $23.0 million decrease (increase) in our operating profit, while a $10.00 per barrel increase (decrease) in the price of gas liquids we expect to purchase would result in a $2.0 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

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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 $0.50 per barrel increase (decrease) in the differential would result in an approximately $2.0 million increase (decrease) in our operating profit.

Interest Rate Risk

Our use of variable rate debt and any future issuances of fixed rate debt expose us to interest rate risk. As of June 30, 2020, we did not have any variable rate debt outstanding.

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 June 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

44

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.

New Tank Construction Proceeding. In May 2020, we received a Notice of Probable Violation and Proposed Civil Penalty from the Pipeline and Hazardous Materials Safety Administration alleging a violation related to a new tank construction project and associated release of product at our terminal in Cushing, Oklahoma. The penalty associated with this alleged violation 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.

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.

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

45

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, 2019, 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.

The COVID-19 pandemic has adversely affected, and could continue to adversely affect, our business.

The recent COVID-19 pandemic has negatively impacted the global economy.  In response to the pandemic, governments around the world have implemented stringent measures to help reduce the spread of the virus, including stay-at-home orders, travel restrictions and other measures.  Due to reductions in economic activity, the world is experiencing reduced demand for petroleum products and depressed petroleum products commodity prices, which has adversely affected our business.  Continuing uncertainty regarding the global impact of COVID-19 is likely to result in continued weakness in demand for the services we provide.  The reduction in refined products demand and lower crude oil prices for petroleum products have combined to put significant downward pressure on domestic crude oil production, and a sustained reduction in crude oil production could cause delays in the timing of our recognition of revenue from take or pay pipeline transportation commitments.  These factors have also significantly decreased the creditworthiness of certain of our crude oil transportation customers, resulting in an increased risk of customer defaults.  Customers and vendors could also seek to assert claims for relief from some of their obligations on the basis of force majeure. We may also experience disruptions to supply chains and the availability and efficiency of our workforce as a result of the pandemic, which could adversely affect our ability to conduct our business and operations.  The extent and duration of the impacts these events will have on our results of operations is unclear but will likely be material and may impact our ability to pay cash distributions. 

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

Issuer Purchases of Common Units

In first quarter 2020, we announced that our general partner’s board of directors authorized the repurchase of up to $750 million of our common units through 2022. We intend to purchase our common units from time-to-time through a variety of methods, including open market purchases and negotiated transactions, all in compliance with the rules of the Securities and Exchange Commission and other applicable legal requirements. The timing, price and actual number of common units repurchased will depend on a number of factors including our expected expansion capital spending needs, alternative investment opportunities, excess cash available, legal and regulatory requirements, market conditions and the trading price of our common units. The repurchase program does not

46

obligate us to acquire any particular amount of common units, and the repurchase program may be suspended or discontinued at any time.

Activity during 2020 is detailed in the following table:

Period	Total Number of Common Units Purchased	Average Price Paid Per Unit		Total Number of Units Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Units That May Yet Be Purchased under the Program (in millions)
January 1-31, 2020	—	$	—	—	—
February 1-29, 2020	1,514,719	$	59.19	1,514,719	$	660.4
March 1-31, 2020	2,117,065	$	53.06	2,117,065	$	548.1
First Quarter 2020	3,631,784	$	55.62	3,631,784	$	548.1
April 1-30, 2020	—			—
May 1-31, 2020	—			—
June 1-30, 2020	—			—
Second Quarter 2020	—			—
Year-to-Date 2020	3,631,784			3,631,784

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.

47

INDEX TO EXHIBITS

Exhibit Number		Description
Exhibit 4.1	—	Eleventh Supplemental Indenture dated as of May 20, 2020, between Magellan Midstream Partners, L.P. and U.S. Bank National Association, as trustee (filed as Exhibit 4.2 to Form 8-K filed May 20, 2020).
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.

48

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 July 31, 2020.

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)

49

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 June 30, 2020 (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: July 31, 2020

/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 June 30, 2020 (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: July 31, 2020

/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 June 30, 2020, 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: July 31, 2020

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 June 30, 2020, 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: July 31, 2020

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

Cover Page - shares	6 Months Ended
	Jun. 30, 2020	Jul. 30, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
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	2020
Document Fiscal Period Focus	Q2
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
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		225,056,287

XML

Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues	$ 460,408	$ 701,699	$ 1,243,214	$ 1,330,634
Costs and expenses:
Operating	146,107	168,929	295,615	314,954
Cost of product sales	50,509	152,876	299,745	321,970
Depreciation, amortization and impairment	58,540	62,530	122,074	124,401
General and administrative	42,168	52,383	79,076	98,378
Total costs and expenses	297,324	436,718	796,510	859,703
Other operating income (expense)	3,913	(5,024)	3,402	1,917
Earnings of non-controlled entities	33,689	40,785	77,349	72,040
Operating profit	200,686	300,742	527,455	544,888
Interest expense	69,259	51,406	125,159	111,572
Interest capitalized	(4,228)	(5,134)	(9,179)	(8,588)
Interest income	(223)	(338)	(643)	(1,998)
Gain on disposition of assets	0	(4,646)	(12,887)	(26,434)
Other (income) expense	1,446	4,570	2,253	6,620
Income before provision for income taxes	134,432	254,884	422,752	463,716
Provision for income taxes	589	1,181	1,345	2,350
Net income	$ 133,843	$ 253,703	$ 421,407	$ 461,366
Basic net income per common unit (in dollars per share)	$ 0.59	$ 1.11	$ 1.86	$ 2.02
Diluted net income per common unit (in dollars per share)	$ 0.59	$ 1.11	$ 1.86	$ 2.02
Weighted average number of common units outstanding used for basic net income per unit calculation (in shares)	225,351	228,647	226,461	228,603
Weighted average number of common units outstanding used for diluted net income per unit calculation (in shares)	225,351	228,688	226,461	228,623
Service [Member]
Revenues	$ 411,815	$ 506,405	$ 870,210	$ 967,197
Product [Member]
Revenues	43,277	189,989	362,397	352,984
Product and Service, Other [Member]
Revenues	$ 5,316	$ 5,305	$ 10,607	$ 10,453

XML

Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 133,843	$ 253,703	$ 421,407	$ 461,366
Other comprehensive income (loss):
Net gain (loss) on cash flow hedges	1,470	(6,659)	(10,444)	(11,035)
Reclassification of net loss on cash flow hedges to income	847	601	1,656	1,228
Net actuarial gain (loss)	414	(10,913)	(333)	(10,913)
Curtailment gain	0	0	1,703	0
Recognition of prior service credit amortization in income	(45)	(45)	(90)	(90)
Recognition of actuarial loss amortization in income	1,458	1,625	2,989	2,973
Recognition of settlement cost in income	0	2,060	969	2,060
Total other comprehensive income (loss)	4,144	(13,331)	(3,550)	(15,777)
Comprehensive income	$ 137,987	$ 240,372	$ 417,857	$ 445,589

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 2,863	$ 58,030
Trade accounts receivable	92,884	125,440
Other accounts receivable	18,761	23,887
Inventory	116,384	184,399
Commodity derivatives deposits	25,456	27,415
Reimbursable costs	28,958	7,878
Other current assets	31,938	32,359
Total current assets	317,244	459,408
Property, plant and equipment	8,243,106	8,431,227
Less: accumulated depreciation	1,971,268	2,027,193
Net property, plant and equipment	6,271,838	6,404,034
Investments in non-controlled entities	1,207,670	1,240,551
Right-of-use asset, operating leases	158,855	171,868
Long-term receivables	21,517	20,782
Goodwill	52,830	53,260
Other intangibles (less accumulated amortization of $6,255 and $7,590 at December 31, 2019 and June 30, 2020, respectively)	46,563	47,898
Restricted cash	6,293	26,569
Other noncurrent assets	22,180	13,359
Total assets	8,104,990	8,437,729
Current liabilities:
Accounts payable	119,678	150,992
Accrued payroll and benefits	40,574	75,511
Accrued interest payable	55,545	64,276
Accrued taxes other than income	51,660	66,007
Deferred revenue	105,670	109,654
Accrued product liabilities	52,890	90,788
Commodity derivatives contracts, net	13,531	10,222
Current portion of operating lease liability	27,251	26,221
Other current liabilities	54,351	73,205
Total current liabilities	521,150	666,876
Long-term operating lease liability	134,274	144,023
Long-term debt, net	4,792,649	4,706,075
Long-term pension and benefits	143,459	145,992
Other noncurrent liabilities	58,720	59,735
Commitments and contingencies
Partners’ capital:
Common unitholders (228,403 units and 225,056 units outstanding at December 31, 2019 and June 30, 2020, respectively)	2,620,365	2,877,105
Accumulated other comprehensive loss	(165,627)	(162,077)
Total partners’ capital	2,454,738	2,715,028
Total liabilities and partners’ capital	$ 8,104,990	$ 8,437,729

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Other intangibles, accumulated amortization	$ 6,923	$ 6,255
Limited partner unitholders, units outstanding (in shares)	225,056,287	228,403,428

XML

Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating Activities:
Net income	$ 421,407	$ 461,366
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and impairment expense	122,074	124,401
Gain on sale and retirement of assets	(13,187)	(26,437)
Earnings of non-controlled entities	(77,349)	(72,040)
Distributions from operations of non-controlled entities	102,699	83,069
Equity-based incentive compensation expense	4,411	15,804
Settlement gain, amortization of prior service credit and actuarial loss	2,526	4,943
Debt prepayment costs	12,893	8,270
Changes in operating assets and liabilities:
Trade accounts receivable and other accounts receivable	33,394	(35,757)
Inventory	66,776	12,828
Accounts payable	12,312	22,110
Accrued payroll and benefits	(34,937)	(22,880)
Accrued interest payable	(8,731)	(5,453)
Accrued taxes other than income	(12,522)	(4,945)
Accrued product liabilities	(37,898)	977
Deferred revenue	(3,984)	(9,189)
Other current and noncurrent assets and liabilities	(26,631)	13,493
Net cash provided by operating activities	563,253	570,560
Investing Activities:
Additions to property, plant and equipment, net	(292,217)	(487,662)
Proceeds from sale and disposition of assets	332,872	63,887
Investments in non-controlled entities	(59,458)	(112,251)
Distributions from returns of investments in non-controlled entities	0	7,500
Deposits received from undivided joint interest third party	0	26,352
Net cash used by investing activities	(18,803)	(502,174)
Financing Activities:
Distributions paid	(466,019)	(457,377)
Net commercial paper borrowings	141,000	197,000
Borrowings under long-term notes	499,400	496,855
Payments on notes	(550,000)	(550,000)
Debt placement costs	(4,255)	(6,817)
Net payment on financial derivatives	(10,444)	(8,028)
Payments associated with settlement of equity-based incentive compensation	(14,700)	(9,764)
Debt prepayment costs	(12,893)	(8,270)
Repurchases of common units	201,982	0
Net cash used by financing activities	(619,893)	(346,401)
Change in cash, cash equivalents and restricted cash	(75,443)	(278,015)
Cash, cash equivalents and restricted cash at beginning of period	84,599	309,261
Cash, cash equivalents and restricted cash at end of period	9,156	31,246
Supplemental non-cash investing activities:
Additions to property, plant and equipment	(235,587)	(514,812)
Changes in accounts payable and other current liabilities related to capital expenditures	(56,630)	27,150
Additions to property, plant and equipment, net	$ (292,217)	$ (487,662)

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Consolidated Statement of Partners' Capital Statement - USD ($) $ in Thousands	Total	Common Unitholders	Accumulated Other Comprehensive Loss
Beginning balance at Dec. 31, 2018	$ 2,643,434	$ 2,763,925	$ (120,491)
Comprehensive income:
Net income	461,366	461,366
Total other comprehensive income (loss)	(15,777)		(15,777)
Comprehensive income	445,589	461,366	(15,777)
Distributions	(457,377)	(457,377)
Equity-based incentive compensation expense	15,804	15,804
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	(387)	(387)
Ending balance at Jun. 30, 2019	2,637,779	2,774,047	(136,268)
Beginning balance at Mar. 31, 2019	2,616,255	2,739,192	(122,937)
Comprehensive income:
Net income	253,703	253,703
Total other comprehensive income (loss)	(13,331)		(13,331)
Comprehensive income	240,372	253,703	(13,331)
Distributions	(229,545)	(229,545)
Equity-based incentive compensation expense	10,890	10,890
Other	(193)	(193)
Ending balance at Jun. 30, 2019	2,637,779	2,774,047	(136,268)
Beginning balance at Dec. 31, 2019	2,715,028	2,877,105	(162,077)
Comprehensive income:
Net income	421,407	421,407
Total other comprehensive income (loss)	(3,550)		(3,550)
Comprehensive income	417,857	421,407	(3,550)
Distributions	(466,019)	(466,019)
Equity-based incentive compensation expense	4,411	4,411
Repurchases of common units	(201,982)	(201,982)
Issuance of limited partner units in settlement of equity-based incentive plan awards	600	600
Payments associated with settlement of equity-based incentive compensation	(14,700)	(14,700)
Other	(457)	(457)
Ending balance at Jun. 30, 2020	2,454,738	2,620,365	(165,627)
Beginning balance at Mar. 31, 2020	2,543,977	2,713,748	(169,771)
Comprehensive income:
Net income	133,843	133,843
Total other comprehensive income (loss)	4,144		4,144
Comprehensive income	137,987	133,843	4,144
Distributions	(231,245)	(231,245)
Equity-based incentive compensation expense	4,256	4,256
Other	(237)	(237)
Ending balance at Jun. 30, 2020	$ 2,454,738	$ 2,620,365	$ (165,627)

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Organization, Description of Business And Basis Of Presentation

6 Months Ended

Jun. 30, 2020

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 common 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.

During first quarter 2020, we completed a reorganization of our reportable segments.  This reorganization was effected to reflect changes in the management of our business in conjunction with the sale of three of our marine terminals.  Following this sale, two of our remaining marine terminals were combined with our refined products segment and one terminal was combined with our crude oil segment based on the predominant types of product stored at the facilities.  Accordingly, we have restated our segment disclosures for all previous periods included in this report.

Description of Business

On March 20, 2020, we sold three marine terminals to a subsidiary of Buckeye Partners, L.P. (“Buckeye”) for $251.8 million, net of working capital adjustments. These terminals are located in New Haven, Connecticut, Wilmington, Delaware and Marrero, Louisiana. We recognized a $6.2 million impairment loss related to the sale on our consolidated statements of income.

We are principally engaged in the transportation, storage and distribution of refined petroleum products and crude oil.  As of June 30, 2020, our asset portfolio consisted of:

• our refined products segment, comprised of our approximately 9,800-mile refined products pipeline system with 53 connected terminals, as well as 25 independent terminals not connected to our pipeline system and two marine storage terminals (one of which is owned through a joint venture); and

• our crude oil segment, comprised of approximately 2,200 miles of crude oil pipelines, a condensate splitter and 37 million barrels of aggregate storage capacity, of which approximately 25 million barrels are used for contract storage. Approximately 1,000 miles of these pipelines, the condensate splitter and 30 million barrels of this storage capacity (including 22 million barrels used for contract storage) 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 crude oil refineries that are primarily used as fuels by consumers. Refined products include gasoline, diesel fuel, aviation fuel, kerosene and heating oil.  Diesel fuel, kerosene and heating oil are referred to as distillates;

• transmix is a mixture of refined products that forms when transported in pipelines. Transmix is fractionated and blended into usable refined products;

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

• blendstocks are products 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 products 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 a naturally occurring unrefined petroleum product recovered from underground that is used as feedstock by refineries, splitters and petrochemical facilities; and

• biofuels, such as ethanol and biodiesel, are fuels derived from living materials and 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, 2019, which is derived from our audited financial statements, include all normal and recurring adjustments necessary to present fairly our financial position as of June 30, 2020, the results of operations for the three and six months ended June 30, 2019 and 2020 and cash flows for the six months ended June 30, 2019 and 2020. The results of operations for the six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full year ending December 31, 2020 for several reasons. Profits from our gas liquids 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.  Finally, we expect the impact of COVID-19 on demand for petroleum products and the decline in commodity prices to continue to affect our results of operations in the remaining two quarters of 2020, resulting in decreased transportation and terminalling revenues and reduced profits from our gas liquids blending activities.

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 Form 8-K filed with the Securities and Exchange Commission on May 4, 2020, which reflects changes in our reporting segments since the filing of our Annual Report on Form 10-K for the year ended December 31, 2019.

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

In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326). The new guidance is effective for reporting periods beginning after December 15, 2019. The standard replaces the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans and other financial instruments. The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We adopted the new guidance as of January 1, 2020 using the modified retrospective approach related to our accounts receivables and contract assets, resulting in no cumulative adjustment to retained earnings. The adoption of this guidance did not have a material impact on our consolidated statements of income for the three and six month periods ended June 30, 2020.

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Segment Disclosures

6 Months Ended

Jun. 30, 2020

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. Management evaluates performance based on segment operating margin, which includes revenue from affiliates and third-party customers, operating expenses, cost of product sales, other operating (income) expense and earnings of non-controlled entities.

We believe that investors benefit from having access to the same financial measures used 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 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 June 30, 2019
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	347,630		$	160,116		$	(1,341	)	$	506,405
Product sales revenue	184,695			5,294			—			189,989
Affiliate management fee revenue	1,659			3,646			—			5,305
Total revenue	533,984			169,056			(1,341		)	701,699
Operating expenses	132,850			38,764			(2,685		)	168,929
Cost of product sales	148,166			4,710			—			152,876
Other operating (income) expense	(1,031		)	6,055			—			5,024
(Earnings) loss of non-controlled entities	2,950			(43,735		)	—			(40,785		)
Operating margin	251,049			163,262			1,344			415,655
Depreciation, amortization and impairment expense	44,637			16,549			1,344			62,530
G&A expense	37,560			14,823			—			52,383
Operating profit	$	168,852		$	131,890		$	—		$	300,742

	Three Months Ended June 30, 2020
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	279,759		$	133,637		$	(1,581	)	$	411,815
Product sales revenue	34,463			8,814			—			43,277
Affiliate management fee revenue	1,513			3,803			—			5,316
Total revenue	315,735			146,254			(1,581		)	460,408
Operating expenses	103,405			45,917			(3,215		)	146,107
Cost of product sales	45,616			4,893			—			50,509
Other operating (income) expense	(138		)	(3,775		)	—			(3,913		)
Earnings of non-controlled entities	(4,592		)	(29,097		)	—			(33,689		)
Operating margin	171,444			128,316			1,634			301,394
Depreciation, amortization and impairment expense	41,029			15,877			1,634			58,540
G&A expense	30,661			11,507			—			42,168
Operating profit	$	99,754		$	100,932		$	—		$	200,686

	Six Months Ended June 30, 2019
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	657,201		$	312,275		$	(2,279	)	$	967,197
Product sales revenue	341,977			11,007			—			352,984
Affiliate management fee revenue	3,321			7,132			—			10,453
Total revenue	1,002,499			330,414			(2,279		)	1,330,634
Operating expenses	235,542			84,470			(5,058		)	314,954
Cost of product sales	310,596			11,374			—			321,970
Other operating (income) expense	(6,399		)	4,482			—			(1,917		)
(Earnings) losses of non-controlled entities	3,997			(76,037		)	—			(72,040		)
Operating margin	458,763			306,125			2,779			767,667
Depreciation, amortization and impairment expense	89,064			32,558			2,779			124,401
G&A expense	70,373			28,005			—			98,378
Operating profit	$	299,326		$	245,562		$	—		$	544,888

 

	Six Months Ended June 30, 2020
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	594,078		$	279,295		$	(3,163	)	$	870,210
Product sales revenue	347,449			14,948			—			362,397
Affiliate management fee revenue	3,097			7,510			—			10,607
Total revenue	944,624			301,753			(3,163		)	1,243,214
Operating expenses	209,287			92,689			(6,361		)	295,615
Cost of product sales	278,958			20,787			—			299,745
Other operating (income) expense	(2,030		)	(1,372		)	—			(3,402		)
Earnings of non-controlled entities	(18,812		)	(58,537		)	—			(77,349		)
Operating margin	477,221			248,186			3,198			728,605
Depreciation, amortization and impairment expense	87,088			31,788			3,198			122,074
G&A expense	57,315			21,761			—			79,076
Operating profit	$	332,818		$	194,637		$	—		$	527,455

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Revenue from Contract with Customers

6 Months Ended

Jun. 30, 2020

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 June 30, 2019
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation	$	201,175		$	91,532		$	—		$	292,707
Terminalling	49,243			4,724			—			53,967
Storage	55,717			39,211			(1,341		)	93,587
Ancillary services	34,401			6,919			—			41,320
Lease revenue	7,094			17,730			—			24,824
Transportation and terminals revenue	347,630			160,116			(1,341		)	506,405
Product sales revenue	184,695			5,294			—			189,989
Affiliate management fee revenue	1,659			3,646			—			5,305
Total revenue	533,984			169,056			(1,341		)	701,699
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(7,094		)	(17,730		)	—			(24,824		)
(Gains) losses from futures contracts included in product sales revenue(2)	4,713			(95		)	—			4,618
Affiliate management fee revenue	(1,659		)	(3,646		)	—			(5,305		)
Total revenue from contracts with customers under ASC 606	$	529,944		$	147,585		$	(1,341	)	$	676,188

⁽¹⁾ Lease revenue is accounted for under Accounting Standards Codification (“ASC”) 842, Leases.

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

	Three Months Ended June 30, 2020
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation	$	160,282		$	57,550		$	—		$	217,832
Terminalling	36,303			480			—			36,783
Storage	50,726			44,709			(1,581		)	93,854
Ancillary services	28,678			12,105			—			40,783
Lease revenue	3,770			18,793			—			22,563
Transportation and terminals revenue	279,759			133,637			(1,581		)	411,815
Product sales revenue	34,463			8,814			—			43,277
Affiliate management fee revenue	1,513			3,803			—			5,316
Total revenue	315,735			146,254			(1,581		)	460,408
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(3,770		)	(18,793		)	—			(22,563		)
(Gains) losses from futures contracts included in product sales revenue(2)	24,434			2,321			—			26,755
Affiliate management fee revenue	(1,513		)	(3,803		)	—			(5,316		)
Total revenue from contracts with customers under ASC 606	$	334,886		$	125,979		$	(1,581	)	$	459,284

⁽¹⁾ Lease revenue 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.

	Six Months Ended June 30, 2019
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation	$	372,202		$	176,690		$	—		$	548,892
Terminalling	90,540			9,970			—			100,510
Storage	113,093			77,810			(2,279		)	188,624
Ancillary services	66,912			13,210			—			80,122
Lease revenue	14,454			34,595			—			49,049
Transportation and terminals revenue	657,201			312,275			(2,279		)	967,197
Product sales revenue	341,977			11,007			—			352,984
Affiliate management fee revenue	3,321			7,132			—			10,453
Total revenue	1,002,499			330,414			(2,279		)	1,330,634
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(14,454		)	(34,595		)	—			(49,049		)
(Gains) losses from futures contracts included in product sales revenue(2)	56,822			2,307			—			59,129
Affiliate management fee revenue	(3,321		)	(7,132		)	—			(10,453		)
Total revenue from contracts with customers under ASC 606	$	1,041,546		$	290,994		$	(2,279	)	$	1,330,261

⁽¹⁾ Lease revenue 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.

	Six Months Ended June 30, 2020
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation	$	336,287		$	134,665		$	—		$	470,952
Terminalling	76,689			3,019			—			79,708
Storage	108,252			83,560			(3,163		)	188,649
Ancillary services	60,918			19,950			—			80,868
Lease revenue	11,932			38,101			—			50,033
Transportation and terminals revenue	594,078			279,295			(3,163		)	870,210
Product sales revenue	347,449			14,948			—			362,397
Affiliate management fee revenue	3,097			7,510			—			10,607
Total revenue	944,624			301,753			(3,163		)	1,243,214
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(11,932		)	(38,101		)	—			(50,033		)
(Gains) losses from futures contracts included in product sales revenue(2)	(96,613		)	(401		)	—			(97,014		)
Affiliate management fee revenue	(3,097		)	(7,510		)	—			(10,607		)
Total revenue from contracts with customers under ASC 606	$	832,982		$	255,741		$	(3,163	)	$	1,085,560

⁽¹⁾ Lease revenue 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, 2019		June 30, 2020
Accounts receivable from contracts with customers	$	124,701	$	92,745
Contract assets	$	8,071	$	15,166
Contract liabilities	$	111,670	$	112,064

For the three and six months ended June 30, 2020, respectively, we recognized $10.5 million and $80.0 million of transportation and terminals revenue that was recorded in deferred revenue as of December 31, 2019.

Unfulfilled Performance Obligations

The following table provides the aggregate amount of the transaction price allocated to our unfulfilled performance obligations (“UPOs”) as of June 30, 2020 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		Total
Balances at June 30, 2020	$	2,136,926	$	1,292,941	$	3,429,867
Remaining terms	1 - 18 years		1 - 12 years
Estimated revenues from UPOs to be recognized in the next 12 months	$	375,549	$	279,881	$	655,430

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Investments in Non-Controlled Entities

6 Months Ended

Jun. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Investments in Non-Controlled Entities

Investments in Non-Controlled Entities

Our investments in non-controlled entities at June 30, 2020 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”)	30%
Seabrook Logistics, LLC (“Seabrook”)	50%
Texas Frontera, LLC (“Texas Frontera”)	50%

In the first quarter of 2020, we sold a 10% interest in Saddlehorn to an affiliate of Black Diamond Gathering LLC, which is majority-owned by Noble Midstream Partners LP, reducing our ongoing investment in Saddlehorn to a 30% interest. We received $79.9 million in cash from the sale, and we recorded a gain of $12.9 million on our consolidated statements of income for the six month period ended June 30, 2020.

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 $1.1 million and $1.0 million during the three months ended June 30, 2019 and 2020, respectively, and $2.6 million and $2.2 million during the six months ended June 30, 2019 and 2020, 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 June 30,				Six Months Ended June 30,
	2019		2020		2019		2020
Transportation and terminals revenue:
BridgeTex, pipeline capacity and storage	$	10,181	$	12,677	$	20,326	$	23,425
Double Eagle, throughput revenue	$	1,572	$	1,421	$	3,231	$	3,021
Saddlehorn, storage revenue	$	551	$	565	$	1,103	$	1,131
Operating expenses:
Seabrook, storage lease and ancillary services	$	6,241	$	7,479	$	13,150	$	14,378
Other operating income:
Seabrook, gain on sale of air emission credits	$	—	$	—	$	—	$	1,410

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

	December 31, 2019
	Trade Accounts Receivable		Other Accounts Receivable		Other Accounts Payable		Long-Term Receivables
BridgeTex	$	392	$	26	$	—	$	—
Double Eagle	$	445	$	—	$	—	$	—
HoustonLink	$	60	$	—	$	—	$	—
MVP	$	—	$	418	$	—	$	—
Powder Springs	$	161	$	—	$	—	$	6,006
Saddlehorn	$	—	$	126	$	—	$	—
Seabrook	$	941	$	—	$	1,349	$	—

	June 30, 2020
	Trade Accounts Receivable		Other Accounts Receivable		Other Accounts Payable		Long-Term Receivables
BridgeTex	$	273	$	2,054	$	—	$	—
Double Eagle	$	480	$	—	$	—	$	—
MVP	$	—	$	422	$	—	$	—
Powder Springs	$	47	$	—	$	—	$	8,219
Saddlehorn	$	—	$	236	$	—	$	—
Seabrook	$	768	$	—	$	3,976	$	—

We are a party to 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 (see Note 7 – Leases for more details regarding this lease).

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

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

Investments at 12/31/2019	$	1,240,551
Additional investment	59,458
Sale of ownership interest in Saddlehorn	(66,989		)
Earnings of non-controlled entities:
Proportionate share of earnings	78,265
Amortization of excess investment and capitalized interest	(916		)
Earnings of non-controlled entities	77,349
Less:
Distributions from operations of non-controlled entities	102,699
Investments at 6/30/2020	$	1,207,670

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Inventory

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Inventory

Inventory

Inventory at December 31, 2019 and June 30, 2020 was as follows (in thousands): 

	December 31, 2019		June 30, 2020
Refined products	$	96,128	$	63,374
Liquefied petroleum gases	29,982		19,652
Transmix	39,546		15,991
Crude oil	12,714		12,697
Additives	6,029		4,670
Total inventory	$	184,399	$	116,384

During the six months ended 2020, we recorded lower of average cost or net realizable value adjustments of $78.4 million related to our refined products, liquefied petroleum gases, transmix and crude oil inventories.

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Debt

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Debt

Debt

Long-term debt at December 31, 2019 and June 30, 2020 was as follows (in thousands):

	December 31, 2019			June 30, 2020
Commercial paper	$	—		$	141,000
4.25% Notes due 2021	550,000			—
3.20% Notes due 2025	250,000			250,000
5.00% Notes due 2026	650,000			650,000
3.25% Notes due 2030	—			500,000
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			500,000
3.95% Notes due 2050	500,000			500,000
Face value of long-term debt	4,750,000			4,841,000
Unamortized debt issuance costs(1)	(35,263		)	(37,986		)
Net unamortized debt discount(1)	(8,662		)	(10,365		)
Long-term debt, net	$	4,706,075		$	4,792,649

(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.

2020 Debt Issuances

In May 2020, we issued $500.0 million of 3.25% senior notes due 2030 in an underwritten public offering. The notes were issued at 99.88% of par. Net proceeds from this offering were approximately $495.2 million after underwriting discounts and offering expenses. The net proceeds from this offering, along with commercial paper borrowings and cash on hand, were used to redeem our $550 million senior notes due in 2021. We recognized $12.9 million of debt prepayment costs as interest expense in our consolidated statements of income related to this early redemption, partially offset by the recognition of a $0.7 million unamortized debt premium, for the three and six month periods ended June 30, 2020.

Other Debt

Revolving Credit Facility. At June 30, 2020, 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 June 30, 2020. Borrowings under this facility may be used for general partnership purposes, including capital expenditures. As of December 31, 2019 and June 30, 2020, there were no borrowings outstanding under this facility and $3.5 million 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.

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. Commercial paper borrowings outstanding at June 30, 2020 were $141.0 million. The weighted-average interest rate for commercial paper borrowings based on the number of days outstanding was 1.2% for the six months ended June 30, 2020.

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Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

Leases

Operating Leases – Lessee

Related Party Operating Lease. We have 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.

The following tables provide information about our third party and our Seabrook operating leases (dollars in thousands):

	Three Months Ended June 30, 2019						Three Months Ended June 30, 2020
	Third Party Leases		Seabrook Lease		All Leases		Third Party Leases		Seabrook Lease		All Leases
Total lease expense	$	5,776	$	6,241	$	12,017	$	5,709	$	7,479	$	13,188
	Six Months Ended June 30, 2019						Six Months Ended June 30, 2020
	Third Party Leases		Seabrook Lease		All Leases		Third Party Leases		Seabrook Lease		All Leases
Total lease expense	$	11,425	$	13,150	$	24,575	$	11,699	$	14,378	$	26,077

	December 31, 2019						June 30, 2020
	Third Party Leases		Seabrook Lease		All Leases		Third Party Leases		Seabrook Lease		All Leases
Current lease liability	$	15,136	$	11,085	$	26,221	$	15,337	$	11,914	$	27,251
Long-term lease liability	$	81,508	$	62,515	$	144,023	$	77,354	$	56,920	$	134,274
Right-of-use asset	$	98,268	$	73,600	$	171,868	$	90,021	$	68,834	$	158,855

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2020

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 $2.4 million for each of the three months ended June 30, 2019 and 2020, respectively, and $6.5 million and $6.9 million for the six months ended June 30, 2019 and 2020, respectively.

In addition, we sponsor two pension plans, including one for all non-union employees and one that covers certain union employees, and a postretirement benefit plan for certain employees. Prior to the March 2020 sale of our New Haven terminal (See Note 1 – Organization, Description of Business and Basis of Presentation), we sponsored an additional union pension plan that covered union employees at that terminal. Net periodic benefit expense for the three and six months ended June 30, 2019 and 2020 was as follows (in thousands):

 

	Three Months Ended					Three Months Ended
	June 30, 2019					June 30, 2020
	Pension Benefits			Other  Postretirement Benefits		Pension Benefits			Other  Postretirement Benefits
Components of net periodic benefit costs:
Service cost	$	6,358		$	43	$	6,735		$	67
Interest cost	3,110			135		2,711			127
Expected return on plan assets	(2,317		)	—		(2,809		)	—
Amortization of prior service credit	(45		)	—		(45		)	—
Amortization of actuarial loss	1,508			117		1,322			136
Settlement cost	2,060			—		—			—
Net periodic benefit cost	$	10,674		$	295	$	7,914		$	330

 

	Six Months Ended					Six Months Ended
	June 30, 2019					June 30, 2020
	Pension Benefits			Other  Postretirement Benefits		Pension Benefits			Other  Postretirement Benefits
Components of net periodic benefit costs:
Service cost	$	12,885		$	97	$	13,938		$	129
Interest cost	6,110			254		5,513			239
Expected return on plan assets	(4,691		)	—		(5,695		)	—
Amortization of prior service credit	(90		)	—		(90		)	—
Amortization of actuarial loss	2,785			188		2,734			255
Settlement cost	2,060			—		969			—
Settlement gain on disposition of assets	—			—		(1,342		)	—
Net periodic benefit cost	$	19,059		$	539	$	16,027		$	623

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 six months ended June 30, 2019 and 2020 were as follows (in thousands):

	Three Months Ended						Three Months Ended
	June 30, 2019						June 30, 2020
Gains (Losses) Included in AOCL	Pension Benefits			Other Postretirement Benefits			Pension Benefits			Other Postretirement Benefits
Beginning balance	$	(87,370	)	$	(5,338	)	$	(101,447	)	$	(8,259	)
Net actuarial gain (loss)	(10,029		)	(884		)	1,560			(1,146		)
Recognition of prior service credit amortization in income	(45		)	—			(45		)	—
Recognition of actuarial loss amortization in income	1,508			117			1,322			136
Recognition of settlement cost in income	2,060			—			—			—
Ending balance	$	(93,876	)	$	(6,105	)	$	(98,610	)	$	(9,269	)

	Six Months Ended						Six Months Ended
	June 30, 2019						June 30, 2020
Gains (Losses) Included in AOCL	Pension Benefits			Other Postretirement Benefits			Pension Benefits			Other Postretirement Benefits
Beginning balance	$	(88,602	)	$	(5,409	)	$	(104,739	)	$	(8,378	)
Net actuarial gain (loss)	(10,029		)	(884		)	813			(1,146		)
Curtailment gain	—			—			1,703			—
Recognition of prior service credit amortization in income	(90		)	—			(90		)	—
Recognition of actuarial loss amortization in income	2,785			188			2,734			255
Recognition of settlement cost in income	2,060			—			969			—
Ending balance	$	(93,876	)	$	(6,105	)	$	(98,610	)	$	(9,269	)

Contributions estimated to be paid into the plans in 2020 are $29.3 million and $0.7 million for the pension plans and other postretirement benefit plan, respectively.

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Long-Term Incentive Plan

6 Months Ended

Jun. 30, 2020

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 common units. The estimated units remaining available under the LTIP at June 30, 2020 total 1.0 million.

Equity-based incentive compensation expense for the three and six months ended June 30, 2019 and 2020, primarily recorded as G&A expense on our consolidated statements of income, was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2020		2019		2020
Performance-based awards	$	9,317	$	1,821	$	12,961	$	(126	)
Time-based awards	1,573		2,435		2,843		4,537
Total	$	10,890	$	4,256	$	15,804	$	4,411

In first and second quarters of 2020, we reduced our LTIP accruals related to performance awards vesting in 2020 and 2021 to reflect the estimated impacts of COVID-19 related reductions in economic activity and the significant decline in commodity prices.

On January 31, 2020, 378,144 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, 2022.

Basic and Diluted Net Income Per Common Unit

The difference between our actual common units outstanding and our weighted-average number of common 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 or repurchased during a period.  The difference between the weighted-average number of common 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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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Interest Rate Derivatives

In second quarter 2020, upon issuance of $500.0 million of 3.25% notes due 2030, we terminated and settled $100.0 million of treasury lock agreements that we had previously entered into to protect against the variability of future interest payments for a loss of $10.4 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 and will be recognized into earnings as an adjustment to our periodic interest expense over the term of the hedged transaction in accordance with our hedge strategy.

Commodity Derivatives

Our open futures contracts at June 30, 2020 were as follows:

Type of Contract/Accounting Methodology	Product Represented by the Contract and Associated Barrels	Maturity Dates
Futures - Economic Hedges	2.3 million barrels of refined products and crude oil	Between July 2020 and November 2022
Futures - Economic Hedges	0.2 million barrels of gas liquids	Between July and December 2020

Commodity Derivatives Contracts and Deposits Offsets

At December 31, 2019 and June 30, 2020, we had made margin deposits of $27.4 million and $25.5 million, respectively, for our futures contracts with our counterparties, which were recorded as current assets under 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, 2019 and June 30, 2020 (in thousands):

Description	Gross Amounts of Recognized Liabilities			Gross Amounts of Assets Offset in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets			Margin Deposit Amounts Not Offset in the Consolidated Balance Sheets		Net Asset Amount(1)
As of 12/31/2019	$	(11,033	)	$	811	$	(10,222	)	$	27,415	$	17,193
As of 6/30/2020	$	(14,570	)	$	3,218	$	(11,352	)	$	25,456	$	14,104

(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 December 31, 2019 and June 30, 2020 was $17.3 million and $12.7 million, respectively.

Impact of Derivatives on Our Financial Statements

Comprehensive Income

The changes in derivative activity included in AOCL for the three and six months ended June 30, 2019 and 2020 were as follows (in thousands):

 

	Three Months Ended						Six Months Ended
	June 30,						June 30,
Derivative Losses Included in AOCL	2019			2020			2019			2020
Beginning balance	$	(30,229	)	$	(60,065	)	$	(26,480	)	$	(48,960	)
Net gain (loss) on cash flow hedges	(6,659		)	1,470			(11,035		)	(10,444		)
Reclassification of net loss on cash flow hedges to income	601			847			1,228			1,656
Ending balance	$	(36,287	)	$	(57,748	)	$	(36,287	)	$	(57,748	)

The following is a summary of the effect on our consolidated statements of income for the three and six months ended June 30, 2019 and 2020 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 June 30, 2019	$	(6,659	)	Interest expense	$	(601	)
Three Months Ended June 30, 2020	$	1,470		Interest expense	$	(847	)
Six Months Ended June 30, 2019	$	(11,035	)	Interest expense	$	(1,228	)
Six Months Ended June 30, 2020	$	(10,444	)	Interest expense	$	(1,656	)

As of June 30, 2020, the net loss estimated to be classified to interest expense over the next twelve months from AOCL is approximately $3.6 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 six months ended June 30, 2019 and 2020 of derivatives that were not designated as hedging instruments (in thousands):

		Amount of Gain (Loss) Recognized on Derivatives
		Three Months Ended						Six Months Ended
	Location of Gain (Loss) Recognized on Derivatives	June 30,						June 30,
Derivative Instrument		2019			2020			2019			2020
Futures contracts	Product sales revenue	$	(4,619	)	$	(26,755	)	$	(59,130	)	$	97,014
Futures contracts	Cost of product sales	(6,148		)	(417		)	(3,875		)	(4,344		)
Basis derivative agreement	Other operating income (expense)	(6,487		)	3,400			(4,959		)	501
	Total	$	(17,254	)	$	(23,772	)	$	(67,964	)	$	93,171

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 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, 2019 and June 30, 2020 (in thousands):

	December 31, 2019
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Commodity derivatives contracts, net	$	811	Commodity derivatives contracts, net	$	11,033
Basis derivative agreement	Other current assets	—		Other current liabilities	8,457
Basis derivative agreement	Other noncurrent assets	—		Other noncurrent liabilities	8,847
	Total	$	811	Total	$	28,337
	June 30, 2020
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Commodity derivatives contracts, net	$	1,024	Commodity derivatives contracts, net	$	14,555
Futures contracts	Other noncurrent assets	2,194		Other noncurrent liabilities	15
Basis derivative agreement	Other current assets	—		Other current liabilities	8,839
Basis derivative agreement	Other noncurrent assets	—		Other noncurrent liabilities	3,910
	Total	$	3,218	Total	$	27,319

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Fair Value

6 Months Ended

Jun. 30, 2020

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:

• 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 10 – 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 10 - 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 and contractual obligations. At June 30, 2020, these primarily include a long-term contractual obligation we entered into in connection with the sale of our three marine terminals to a subsidiary of Buckeye. This obligation requires us to perform certain environmental remediation

work on Buckeye’s behalf at the New Haven terminal.  The contractual obligation was recorded at fair value on our consolidated balance sheets upon initial recognition and was calculated using our best estimate of potential outcome scenarios to determine our liability for the remediation costs required in this agreement.

• Debt. The fair value of our publicly traded notes was based on the prices of those notes at December 31, 2019 and June 30, 2020; 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, 2019 and June 30, 2020 based on the three levels established by ASC 820, Fair Value Measurements and Disclosures (in thousands):

	December 31, 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)
Commodity derivatives contracts	$	(10,222	)	$	(10,222	)	$	(10,222	)	$	—		$	—
Basis derivative agreement	$	(17,304	)	$	(17,304	)	$	—		$	(17,304	)
Long-term receivables	$	20,782		$	20,782		$	—		$	—		$	20,782
Guarantees and contractual obligations	$	(408	)	$	(408	)	$	—		$	—		$	(408	)
Debt	$	(4,706,075	)	$	(5,192,685	)	$	—		$	(5,192,685	)	$	—

	June 30, 2020
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)
Commodity derivatives contracts	$	(11,352	)	$	(11,352	)	$	(11,352	)	$	—		$	—
Basis derivative agreement	$	(12,749	)	$	(12,749	)	$	—		$	(12,749	)	$	—
Long-term receivables	$	21,517		$	21,517		$	—		$	—		$	21,517
Guarantees and contractual obligations	$	(11,286	)	$	(11,286	)	$	—		$	—		$	(11,286	)
Debt	$	(4,792,649	)	$	(4,688,925	)	$	—		$	(4,688,925	)	$	—

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2020

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 $14.9 million and $12.5 million at December 31, 2019 and June 30, 2020, 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 $1.4 million and $0.8 million for the three months ended June 30, 2019 and 2020, respectively, and $3.4 million and $1.2 million for the six months ended June 30, 2019 and 2020, respectively.

Environmental Receivables

Receivables from insurance carriers and other third parties related to environmental matters were $2.9 million at December 31, 2019, of which $1.8 million and $1.1 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 $1.8 million at June 30, 2020, of which $0.9 million and $0.9 million were recorded to other accounts receivable and long-term receivables, respectively, on our consolidated balance sheets.

Other

In first quarter 2020, we entered into a long-term contractual obligation in connection with the sale of three marine terminals to Buckeye.  This obligation requires us to perform certain environmental remediation work on Buckeye’s behalf at the New Haven terminal.  As of June 30, 2020, our consolidated balance sheets reflected a current liability of $0.7 million and a noncurrent liability of $10.2 million to reflect the fair value of this obligation.

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 June 30, 2020, 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.

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Related Party Transactions

6 Months Ended

Jun. 30, 2020

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, terminalling and other ancillary revenue from this customer of $7.0 million and $7.3 million for the three months ended June 30, 2019 and 2020, respectively, and $14.3 million and $15.7 million for the six months ended June 30, 2019 and 2020, respectively. We recorded receivables of $3.8 million and $2.3 million from this customer at December 31, 2019 and June 30, 2020, respectively.  In the second quarter of 2020, we also received storage and other miscellaneous revenue of $0.2 million from a subsidiary of a separate company for which Stacy Methvin serves as a director.

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

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Partners' Capital and Distributions

6 Months Ended

Jun. 30, 2020

Partners' Capital Notes [Abstract]

Partners' Capital and Distributions

Partners’ Capital and Distributions

Partners’ Capital

Our general partner’s board of directors authorized the repurchase of up to $750 million of our common units through 2022. The timing, price and actual number of common units repurchased will depend on a number of factors including our expected expansion capital spending needs, alternative investment opportunities, excess cash available, legal and regulatory requirements, market conditions and the trading price of our common units. The repurchase program does not obligate us to acquire any particular amount of common units, and the repurchase program may be suspended or discontinued at any time.

The following table details the changes in the number of our common units outstanding from December 31, 2019 through June 30, 2020:

Common units outstanding on December 31, 2019	228,403,428
Units repurchased during 2020	(3,631,784	)
January 2020–Settlement of employee LTIP awards	275,093
During 2020–Other(a)	9,550
Common units outstanding on June 30, 2020	225,056,287

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

Distributions

Distributions we paid during 2019 and 2020 were as follows (in thousands, except per unit amounts):

 

Payment Date	Per Unit Cash Distribution Amount			Total Cash Distribution
02/14/2019		$	0.9975		$	227,832
05/15/2019		1.0050			229,545
Through 06/30/2019		2.0025			457,377
08/14/2019		1.0125			231,258
11/14/2019		1.0200			232,971
Total		$	4.0350		$	921,606
02/14/2020		$	1.0275		$	234,774
05/15/2020		1.0275			231,245
Through 06/30/2020		2.0550			466,019
08/14/2020(a)		1.0275			231,245
Total		$	3.0825		$	697,264

(a) Our general partner’s board of directors declared this cash distribution in July 2020 to be paid on August 14, 2020 to unitholders of record at the close of business on August 7, 2020.

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Subsequent Events

6 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Recognizable events

No recognizable events occurred subsequent to June 30, 2020.

Non-recognizable events

Cash Distribution. In July 2020, our general partner’s board of directors declared a quarterly cash distribution of $1.0275 per unit for the period of April 1, 2020 through June 30, 2020. This quarterly cash distribution will be paid on August 14, 2020 to unitholders of record on August 7, 2020.

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

6 Months Ended

Jun. 30, 2020

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, 2019, which is derived from our audited financial statements, include all normal and recurring adjustments necessary to present fairly our financial position as of June 30, 2020, the results of operations for the three and six months ended June 30, 2019 and 2020 and cash flows for the six months ended June 30, 2019 and 2020. The results of operations for the six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full year ending December 31, 2020 for several reasons. Profits from our gas liquids 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.  Finally, we expect the impact of COVID-19 on demand for petroleum products and the decline in commodity prices to continue to affect our results of operations in the remaining two quarters of 2020, resulting in decreased transportation and terminalling revenues and reduced profits from our gas liquids blending activities.

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 Form 8-K filed with the Securities and Exchange Commission on May 4, 2020, which reflects changes in our reporting segments since the filing of our Annual Report on Form 10-K for the year ended December 31, 2019.

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

In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326). The new guidance is effective for reporting periods beginning after December 15, 2019. The standard replaces the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans and other financial instruments. The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We adopted the new guidance as of January 1, 2020 using the modified retrospective approach related to our accounts receivables and contract assets, resulting in no cumulative adjustment to retained earnings. The adoption of this guidance did not have a material impact on our consolidated statements of income for the three and six month periods ended June 30, 2020.

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Segment Disclosures (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Schedule of Business Segment Reporting Information

	Three Months Ended June 30, 2019
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	347,630		$	160,116		$	(1,341	)	$	506,405
Product sales revenue	184,695			5,294			—			189,989
Affiliate management fee revenue	1,659			3,646			—			5,305
Total revenue	533,984			169,056			(1,341		)	701,699
Operating expenses	132,850			38,764			(2,685		)	168,929
Cost of product sales	148,166			4,710			—			152,876
Other operating (income) expense	(1,031		)	6,055			—			5,024
(Earnings) loss of non-controlled entities	2,950			(43,735		)	—			(40,785		)
Operating margin	251,049			163,262			1,344			415,655
Depreciation, amortization and impairment expense	44,637			16,549			1,344			62,530
G&A expense	37,560			14,823			—			52,383
Operating profit	$	168,852		$	131,890		$	—		$	300,742

	Three Months Ended June 30, 2020
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	279,759		$	133,637		$	(1,581	)	$	411,815
Product sales revenue	34,463			8,814			—			43,277
Affiliate management fee revenue	1,513			3,803			—			5,316
Total revenue	315,735			146,254			(1,581		)	460,408
Operating expenses	103,405			45,917			(3,215		)	146,107
Cost of product sales	45,616			4,893			—			50,509
Other operating (income) expense	(138		)	(3,775		)	—			(3,913		)
Earnings of non-controlled entities	(4,592		)	(29,097		)	—			(33,689		)
Operating margin	171,444			128,316			1,634			301,394
Depreciation, amortization and impairment expense	41,029			15,877			1,634			58,540
G&A expense	30,661			11,507			—			42,168
Operating profit	$	99,754		$	100,932		$	—		$	200,686

	Six Months Ended June 30, 2019
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	657,201		$	312,275		$	(2,279	)	$	967,197
Product sales revenue	341,977			11,007			—			352,984
Affiliate management fee revenue	3,321			7,132			—			10,453
Total revenue	1,002,499			330,414			(2,279		)	1,330,634
Operating expenses	235,542			84,470			(5,058		)	314,954
Cost of product sales	310,596			11,374			—			321,970
Other operating (income) expense	(6,399		)	4,482			—			(1,917		)
(Earnings) losses of non-controlled entities	3,997			(76,037		)	—			(72,040		)
Operating margin	458,763			306,125			2,779			767,667
Depreciation, amortization and impairment expense	89,064			32,558			2,779			124,401
G&A expense	70,373			28,005			—			98,378
Operating profit	$	299,326		$	245,562		$	—		$	544,888

 

	Six Months Ended June 30, 2020
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation and terminals revenue	$	594,078		$	279,295		$	(3,163	)	$	870,210
Product sales revenue	347,449			14,948			—			362,397
Affiliate management fee revenue	3,097			7,510			—			10,607
Total revenue	944,624			301,753			(3,163		)	1,243,214
Operating expenses	209,287			92,689			(6,361		)	295,615
Cost of product sales	278,958			20,787			—			299,745
Other operating (income) expense	(2,030		)	(1,372		)	—			(3,402		)
Earnings of non-controlled entities	(18,812		)	(58,537		)	—			(77,349		)
Operating margin	477,221			248,186			3,198			728,605
Depreciation, amortization and impairment expense	87,088			31,788			3,198			122,074
G&A expense	57,315			21,761			—			79,076
Operating profit	$	332,818		$	194,637		$	—		$	527,455

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Revenue from Contract with Customers (Tables)

6 Months Ended

Jun. 30, 2020

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 June 30, 2019
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation	$	201,175		$	91,532		$	—		$	292,707
Terminalling	49,243			4,724			—			53,967
Storage	55,717			39,211			(1,341		)	93,587
Ancillary services	34,401			6,919			—			41,320
Lease revenue	7,094			17,730			—			24,824
Transportation and terminals revenue	347,630			160,116			(1,341		)	506,405
Product sales revenue	184,695			5,294			—			189,989
Affiliate management fee revenue	1,659			3,646			—			5,305
Total revenue	533,984			169,056			(1,341		)	701,699
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(7,094		)	(17,730		)	—			(24,824		)
(Gains) losses from futures contracts included in product sales revenue(2)	4,713			(95		)	—			4,618
Affiliate management fee revenue	(1,659		)	(3,646		)	—			(5,305		)
Total revenue from contracts with customers under ASC 606	$	529,944		$	147,585		$	(1,341	)	$	676,188

⁽¹⁾ Lease revenue is accounted for under Accounting Standards Codification (“ASC”) 842, Leases.

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

	Three Months Ended June 30, 2020
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation	$	160,282		$	57,550		$	—		$	217,832
Terminalling	36,303			480			—			36,783
Storage	50,726			44,709			(1,581		)	93,854
Ancillary services	28,678			12,105			—			40,783
Lease revenue	3,770			18,793			—			22,563
Transportation and terminals revenue	279,759			133,637			(1,581		)	411,815
Product sales revenue	34,463			8,814			—			43,277
Affiliate management fee revenue	1,513			3,803			—			5,316
Total revenue	315,735			146,254			(1,581		)	460,408
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(3,770		)	(18,793		)	—			(22,563		)
(Gains) losses from futures contracts included in product sales revenue(2)	24,434			2,321			—			26,755
Affiliate management fee revenue	(1,513		)	(3,803		)	—			(5,316		)
Total revenue from contracts with customers under ASC 606	$	334,886		$	125,979		$	(1,581	)	$	459,284

⁽¹⁾ Lease revenue 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.

	Six Months Ended June 30, 2019
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation	$	372,202		$	176,690		$	—		$	548,892
Terminalling	90,540			9,970			—			100,510
Storage	113,093			77,810			(2,279		)	188,624
Ancillary services	66,912			13,210			—			80,122
Lease revenue	14,454			34,595			—			49,049
Transportation and terminals revenue	657,201			312,275			(2,279		)	967,197
Product sales revenue	341,977			11,007			—			352,984
Affiliate management fee revenue	3,321			7,132			—			10,453
Total revenue	1,002,499			330,414			(2,279		)	1,330,634
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(14,454		)	(34,595		)	—			(49,049		)
(Gains) losses from futures contracts included in product sales revenue(2)	56,822			2,307			—			59,129
Affiliate management fee revenue	(3,321		)	(7,132		)	—			(10,453		)
Total revenue from contracts with customers under ASC 606	$	1,041,546		$	290,994		$	(2,279	)	$	1,330,261

⁽¹⁾ Lease revenue 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.

	Six Months Ended June 30, 2020
	Refined Products			Crude Oil			Intersegment Eliminations			Total
Transportation	$	336,287		$	134,665		$	—		$	470,952
Terminalling	76,689			3,019			—			79,708
Storage	108,252			83,560			(3,163		)	188,649
Ancillary services	60,918			19,950			—			80,868
Lease revenue	11,932			38,101			—			50,033
Transportation and terminals revenue	594,078			279,295			(3,163		)	870,210
Product sales revenue	347,449			14,948			—			362,397
Affiliate management fee revenue	3,097			7,510			—			10,607
Total revenue	944,624			301,753			(3,163		)	1,243,214
Revenue not under the guidance of ASC 606, Revenue from Contracts with Customers:
Lease revenue(1)	(11,932		)	(38,101		)	—			(50,033		)
(Gains) losses from futures contracts included in product sales revenue(2)	(96,613		)	(401		)	—			(97,014		)
Affiliate management fee revenue	(3,097		)	(7,510		)	—			(10,607		)
Total revenue from contracts with customers under ASC 606	$	832,982		$	255,741		$	(3,163	)	$	1,085,560

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, 2019		June 30, 2020
Accounts receivable from contracts with customers	$	124,701	$	92,745
Contract assets	$	8,071	$	15,166
Contract liabilities	$	111,670	$	112,064

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 June 30, 2020 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		Total
Balances at June 30, 2020	$	2,136,926	$	1,292,941	$	3,429,867
Remaining terms	1 - 18 years		1 - 12 years
Estimated revenues from UPOs to be recognized in the next 12 months	$	375,549	$	279,881	$	655,430

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Investments in Non-Controlled Entities (Tables)

6 Months Ended

Jun. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Our investments in non-controlled entities at June 30, 2020 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”)	30%
Seabrook Logistics, LLC (“Seabrook”)	50%
Texas Frontera, LLC (“Texas Frontera”)	50%

In the first quarter of 2020, we sold a 10% interest in Saddlehorn to an affiliate of Black Diamond Gathering LLC, which is majority-owned by Noble Midstream Partners LP, reducing our ongoing investment in Saddlehorn to a 30% interest. We received $79.9 million in cash from the sale, and we recorded a gain of $12.9 million on our consolidated statements of income for the six month period ended June 30, 2020.

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 $1.1 million and $1.0 million during the three months ended June 30, 2019 and 2020, respectively, and $2.6 million and $2.2 million during the six months ended June 30, 2019 and 2020, 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 June 30,				Six Months Ended June 30,
	2019		2020		2019		2020
Transportation and terminals revenue:
BridgeTex, pipeline capacity and storage	$	10,181	$	12,677	$	20,326	$	23,425
Double Eagle, throughput revenue	$	1,572	$	1,421	$	3,231	$	3,021
Saddlehorn, storage revenue	$	551	$	565	$	1,103	$	1,131
Operating expenses:
Seabrook, storage lease and ancillary services	$	6,241	$	7,479	$	13,150	$	14,378
Other operating income:
Seabrook, gain on sale of air emission credits	$	—	$	—	$	—	$	1,410

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

	December 31, 2019
	Trade Accounts Receivable		Other Accounts Receivable		Other Accounts Payable		Long-Term Receivables
BridgeTex	$	392	$	26	$	—	$	—
Double Eagle	$	445	$	—	$	—	$	—
HoustonLink	$	60	$	—	$	—	$	—
MVP	$	—	$	418	$	—	$	—
Powder Springs	$	161	$	—	$	—	$	6,006
Saddlehorn	$	—	$	126	$	—	$	—
Seabrook	$	941	$	—	$	1,349	$	—

	June 30, 2020
	Trade Accounts Receivable		Other Accounts Receivable		Other Accounts Payable		Long-Term Receivables
BridgeTex	$	273	$	2,054	$	—	$	—
Double Eagle	$	480	$	—	$	—	$	—
MVP	$	—	$	422	$	—	$	—
Powder Springs	$	47	$	—	$	—	$	8,219
Saddlehorn	$	—	$	236	$	—	$	—
Seabrook	$	768	$	—	$	3,976	$	—

We are a party to 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 (see Note 7 – Leases for more details regarding this lease).

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

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

Investments at 12/31/2019	$	1,240,551
Additional investment	59,458
Sale of ownership interest in Saddlehorn	(66,989		)
Earnings of non-controlled entities:
Proportionate share of earnings	78,265
Amortization of excess investment and capitalized interest	(916		)
Earnings of non-controlled entities	77,349
Less:
Distributions from operations of non-controlled entities	102,699
Investments at 6/30/2020	$	1,207,670

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Inventory (Tables)

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory at December 31, 2019 and June 30, 2020 was as follows (in thousands): 

	December 31, 2019		June 30, 2020
Refined products	$	96,128	$	63,374
Liquefied petroleum gases	29,982		19,652
Transmix	39,546		15,991
Crude oil	12,714		12,697
Additives	6,029		4,670
Total inventory	$	184,399	$	116,384

During the six months ended 2020, we recorded lower of average cost or net realizable value adjustments of $78.4 million related to our refined products, liquefied petroleum gases, transmix and crude oil inventories.

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Debt (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Consolidated Debt

Long-term debt at December 31, 2019 and June 30, 2020 was as follows (in thousands):

	December 31, 2019			June 30, 2020
Commercial paper	$	—		$	141,000
4.25% Notes due 2021	550,000			—
3.20% Notes due 2025	250,000			250,000
5.00% Notes due 2026	650,000			650,000
3.25% Notes due 2030	—			500,000
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			500,000
3.95% Notes due 2050	500,000			500,000
Face value of long-term debt	4,750,000			4,841,000
Unamortized debt issuance costs(1)	(35,263		)	(37,986		)
Net unamortized debt discount(1)	(8,662		)	(10,365		)
Long-term debt, net	$	4,706,075		$	4,792,649

(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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Leases (Tables)

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Operating Leases

The following tables provide information about our third party and our Seabrook operating leases (dollars in thousands):

	Three Months Ended June 30, 2019						Three Months Ended June 30, 2020
	Third Party Leases		Seabrook Lease		All Leases		Third Party Leases		Seabrook Lease		All Leases
Total lease expense	$	5,776	$	6,241	$	12,017	$	5,709	$	7,479	$	13,188
	Six Months Ended June 30, 2019						Six Months Ended June 30, 2020
	Third Party Leases		Seabrook Lease		All Leases		Third Party Leases		Seabrook Lease		All Leases
Total lease expense	$	11,425	$	13,150	$	24,575	$	11,699	$	14,378	$	26,077

	December 31, 2019						June 30, 2020
	Third Party Leases		Seabrook Lease		All Leases		Third Party Leases		Seabrook Lease		All Leases
Current lease liability	$	15,136	$	11,085	$	26,221	$	15,337	$	11,914	$	27,251
Long-term lease liability	$	81,508	$	62,515	$	144,023	$	77,354	$	56,920	$	134,274
Right-of-use asset	$	98,268	$	73,600	$	171,868	$	90,021	$	68,834	$	158,855

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Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Schedule of Consolidated Net Periodic Benefit Costs

Net periodic benefit expense for the three and six months ended June 30, 2019 and 2020 was as follows (in thousands):

 

	Three Months Ended					Three Months Ended
	June 30, 2019					June 30, 2020
	Pension Benefits			Other  Postretirement Benefits		Pension Benefits			Other  Postretirement Benefits
Components of net periodic benefit costs:
Service cost	$	6,358		$	43	$	6,735		$	67
Interest cost	3,110			135		2,711			127
Expected return on plan assets	(2,317		)	—		(2,809		)	—
Amortization of prior service credit	(45		)	—		(45		)	—
Amortization of actuarial loss	1,508			117		1,322			136
Settlement cost	2,060			—		—			—
Net periodic benefit cost	$	10,674		$	295	$	7,914		$	330

 

	Six Months Ended					Six Months Ended
	June 30, 2019					June 30, 2020
	Pension Benefits			Other  Postretirement Benefits		Pension Benefits			Other  Postretirement Benefits
Components of net periodic benefit costs:
Service cost	$	12,885		$	97	$	13,938		$	129
Interest cost	6,110			254		5,513			239
Expected return on plan assets	(4,691		)	—		(5,695		)	—
Amortization of prior service credit	(90		)	—		(90		)	—
Amortization of actuarial loss	2,785			188		2,734			255
Settlement cost	2,060			—		969			—
Settlement gain on disposition of assets	—			—		(1,342		)	—
Net periodic benefit cost	$	19,059		$	539	$	16,027		$	623

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 six months ended June 30, 2019 and 2020 were as follows (in thousands):

	Three Months Ended						Three Months Ended
	June 30, 2019						June 30, 2020
Gains (Losses) Included in AOCL	Pension Benefits			Other Postretirement Benefits			Pension Benefits			Other Postretirement Benefits
Beginning balance	$	(87,370	)	$	(5,338	)	$	(101,447	)	$	(8,259	)
Net actuarial gain (loss)	(10,029		)	(884		)	1,560			(1,146		)
Recognition of prior service credit amortization in income	(45		)	—			(45		)	—
Recognition of actuarial loss amortization in income	1,508			117			1,322			136
Recognition of settlement cost in income	2,060			—			—			—
Ending balance	$	(93,876	)	$	(6,105	)	$	(98,610	)	$	(9,269	)

	Six Months Ended						Six Months Ended
	June 30, 2019						June 30, 2020
Gains (Losses) Included in AOCL	Pension Benefits			Other Postretirement Benefits			Pension Benefits			Other Postretirement Benefits
Beginning balance	$	(88,602	)	$	(5,409	)	$	(104,739	)	$	(8,378	)
Net actuarial gain (loss)	(10,029		)	(884		)	813			(1,146		)
Curtailment gain	—			—			1,703			—
Recognition of prior service credit amortization in income	(90		)	—			(90		)	—
Recognition of actuarial loss amortization in income	2,785			188			2,734			255
Recognition of settlement cost in income	2,060			—			969			—
Ending balance	$	(93,876	)	$	(6,105	)	$	(98,610	)	$	(9,269	)

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Long-Term Incentive Plan (Tables)

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Equity-Based Incentive Compensation Expense

quity-based incentive compensation expense for the three and six months ended June 30, 2019 and 2020, primarily recorded as G&A expense on our consolidated statements of income, was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2020		2019		2020
Performance-based awards	$	9,317	$	1,821	$	12,961	$	(126	)
Time-based awards	1,573		2,435		2,843		4,537
Total	$	10,890	$	4,256	$	15,804	$	4,411

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule Of NYMEX Contracts And Butane Price Swap Purchase Agreements

Our open futures contracts at June 30, 2020 were as follows:

Type of Contract/Accounting Methodology	Product Represented by the Contract and Associated Barrels	Maturity Dates
Futures - Economic Hedges	2.3 million barrels of refined products and crude oil	Between July 2020 and November 2022
Futures - Economic Hedges	0.2 million barrels of gas liquids	Between July and December 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, 2019 and June 30, 2020 (in thousands):

Description	Gross Amounts of Recognized Liabilities			Gross Amounts of Assets Offset in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets			Margin Deposit Amounts Not Offset in the Consolidated Balance Sheets		Net Asset Amount(1)
As of 12/31/2019	$	(11,033	)	$	811	$	(10,222	)	$	27,415	$	17,193
As of 6/30/2020	$	(14,570	)	$	3,218	$	(11,352	)	$	25,456	$	14,104

(1)

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

Derivative Gains Included in Accumulated Other Comprehensive Loss (AOCL)

The changes in derivative activity included in AOCL for the three and six months ended June 30, 2019 and 2020 were as follows (in thousands):

 

	Three Months Ended						Six Months Ended
	June 30,						June 30,
Derivative Losses Included in AOCL	2019			2020			2019			2020
Beginning balance	$	(30,229	)	$	(60,065	)	$	(26,480	)	$	(48,960	)
Net gain (loss) on cash flow hedges	(6,659		)	1,470			(11,035		)	(10,444		)
Reclassification of net loss on cash flow hedges to income	601			847			1,228			1,656
Ending balance	$	(36,287	)	$	(57,748	)	$	(36,287	)	$	(57,748	)

Derivatives and Hedging-Cash Flow Hedges

The following is a summary of the effect on our consolidated statements of income for the three and six months ended June 30, 2019 and 2020 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 June 30, 2019	$	(6,659	)	Interest expense	$	(601	)
Three Months Ended June 30, 2020	$	1,470		Interest expense	$	(847	)
Six Months Ended June 30, 2019	$	(11,035	)	Interest expense	$	(1,228	)
Six Months Ended June 30, 2020	$	(10,444	)	Interest expense	$	(1,656	)

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 six months ended June 30, 2019 and 2020 of derivatives that were not designated as hedging instruments (in thousands):

		Amount of Gain (Loss) Recognized on Derivatives
		Three Months Ended						Six Months Ended
	Location of Gain (Loss) Recognized on Derivatives	June 30,						June 30,
Derivative Instrument		2019			2020			2019			2020
Futures contracts	Product sales revenue	$	(4,619	)	$	(26,755	)	$	(59,130	)	$	97,014
Futures contracts	Cost of product sales	(6,148		)	(417		)	(3,875		)	(4,344		)
Basis derivative agreement	Other operating income (expense)	(6,487		)	3,400			(4,959		)	501
	Total	$	(17,254	)	$	(23,772	)	$	(67,964	)	$	93,171

Derivatives and Hedging-Designated

Balance Sheets

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, 2019 and June 30, 2020 (in thousands):

	December 31, 2019
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Commodity derivatives contracts, net	$	811	Commodity derivatives contracts, net	$	11,033
Basis derivative agreement	Other current assets	—		Other current liabilities	8,457
Basis derivative agreement	Other noncurrent assets	—		Other noncurrent liabilities	8,847
	Total	$	811	Total	$	28,337
	June 30, 2020
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Futures contracts	Commodity derivatives contracts, net	$	1,024	Commodity derivatives contracts, net	$	14,555
Futures contracts	Other noncurrent assets	2,194		Other noncurrent liabilities	15
Basis derivative agreement	Other current assets	—		Other current liabilities	8,839
Basis derivative agreement	Other noncurrent assets	—		Other noncurrent liabilities	3,910
	Total	$	3,218	Total	$	27,319

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2020

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, 2019 and June 30, 2020 based on the three levels established by ASC 820, Fair Value Measurements and Disclosures (in thousands):

	December 31, 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)
Commodity derivatives contracts	$	(10,222	)	$	(10,222	)	$	(10,222	)	$	—		$	—
Basis derivative agreement	$	(17,304	)	$	(17,304	)	$	—		$	(17,304	)
Long-term receivables	$	20,782		$	20,782		$	—		$	—		$	20,782
Guarantees and contractual obligations	$	(408	)	$	(408	)	$	—		$	—		$	(408	)
Debt	$	(4,706,075	)	$	(5,192,685	)	$	—		$	(5,192,685	)	$	—

	June 30, 2020
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)
Commodity derivatives contracts	$	(11,352	)	$	(11,352	)	$	(11,352	)	$	—		$	—
Basis derivative agreement	$	(12,749	)	$	(12,749	)	$	—		$	(12,749	)	$	—
Long-term receivables	$	21,517		$	21,517		$	—		$	—		$	21,517
Guarantees and contractual obligations	$	(11,286	)	$	(11,286	)	$	—		$	—		$	(11,286	)
Debt	$	(4,792,649	)	$	(4,688,925	)	$	—		$	(4,688,925	)	$	—

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Partners' Capital and Distributions (Tables)

6 Months Ended

Jun. 30, 2020

Partners' Capital Notes [Abstract]

Schedule of Capital Units

The following table details the changes in the number of our common units outstanding from December 31, 2019 through June 30, 2020:

Common units outstanding on December 31, 2019	228,403,428
Units repurchased during 2020	(3,631,784	)
January 2020–Settlement of employee LTIP awards	275,093
During 2020–Other(a)	9,550
Common units outstanding on June 30, 2020	225,056,287

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

Schedule of Distributions

Distributions we paid during 2019 and 2020 were as follows (in thousands, except per unit amounts):

 

Payment Date	Per Unit Cash Distribution Amount			Total Cash Distribution
02/14/2019		$	0.9975		$	227,832
05/15/2019		1.0050			229,545
Through 06/30/2019		2.0025			457,377
08/14/2019		1.0125			231,258
11/14/2019		1.0200			232,971
Total		$	4.0350		$	921,606
02/14/2020		$	1.0275		$	234,774
05/15/2020		1.0275			231,245
Through 06/30/2020		2.0550			466,019
08/14/2020(a)		1.0275			231,245
Total		$	3.0825		$	697,264

(a) Our general partner’s board of directors declared this cash distribution in July 2020 to be paid on August 14, 2020 to unitholders of record at the close of business on August 7, 2020.

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Organization, Description of Business and Basis of Presentation (Narrative) (Details) $ in Thousands, bbl in Millions	3 Months Ended	6 Months Ended
	Mar. 31, 2020 Terminal	Jun. 30, 2020 USD ($) Terminal bbl mi	Jun. 30, 2019 USD ($)
Organization and Description of Business [Line Items]
Number Of Marine Terminals Sold	3
Number Of Marine Terminals Combined With Refined Product Segment	2
Number Of Marine Terminals Combined With Crude Oil Segment	1
Proceeds from sale and disposition of assets | $		$ 332,872	$ 63,887
Refined Products Segment [Member]
Organization and Description of Business [Line Items]
Pipeline Length | mi		9,800
Number of Pipeline Terminals		53
Number of Independent Terminals		25
Number of Marine Terminals		2
Number Of Marine Terminals, Owned Through Joint Venture		1
Crude Oil Pipeline and Terminals Segment [Member]
Organization and Description of Business [Line Items]
Pipeline Length | mi		2,200
Storage Capacity | bbl		37
Contracted Storage | bbl		25
Pipeline, Length - Wholly Owned | mi		1,000
Storage Capacity - Wholly Owned | bbl		30
Contracted Storage - Wholly Owned | bbl		22
Marine Terminals [Member]
Organization and Description of Business [Line Items]
Proceeds from sale and disposition of assets | $		$ 251,800
Asset Impairment Charges | $		$ 6,200

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Segment Disclosures (Schedule Of Business Segment Reporting Information) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Segment Reporting Information [Line Items]
Revenues	$ 460,408	$ 701,699	$ 1,243,214	$ 1,330,634
Operating expenses	146,107	168,929	295,615	314,954
Cost of product sales	50,509	152,876	299,745	321,970
Other operating (income) expense	(3,913)	5,024	(3,402)	(1,917)
Earnings of non-controlled entities	(33,689)	(40,785)	(77,349)	(72,040)
Operating margin	301,394	415,655	728,605	767,667
Depreciation, amortization and impairment	58,540	62,530	122,074	124,401
G&A expense	42,168	52,383	79,076	98,378
Operating profit	200,686	300,742	527,455	544,888
Operating Segments [Member] | Refined Products Segment [Member]
Segment Reporting Information [Line Items]
Revenues	315,735	533,984	944,624	1,002,499
Operating expenses	103,405	132,850	209,287	235,542
Cost of product sales	45,616	148,166	278,958	310,596
Other operating (income) expense	(138)	(1,031)	(2,030)	(6,399)
Earnings of non-controlled entities	(4,592)	2,950	(18,812)	3,997
Operating margin	171,444	251,049	477,221	458,763
Depreciation, amortization and impairment	41,029	44,637	87,088	89,064
G&A expense	30,661	37,560	57,315	70,373
Operating profit	99,754	168,852	332,818	299,326
Operating Segments [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Segment Reporting Information [Line Items]
Revenues	146,254	169,056	301,753	330,414
Operating expenses	45,917	38,764	92,689	84,470
Cost of product sales	4,893	4,710	20,787	11,374
Other operating (income) expense	(3,775)	6,055	(1,372)	4,482
Earnings of non-controlled entities	(29,097)	(43,735)	(58,537)	(76,037)
Operating margin	128,316	163,262	248,186	306,125
Depreciation, amortization and impairment	15,877	16,549	31,788	32,558
G&A expense	11,507	14,823	21,761	28,005
Operating profit	100,932	131,890	194,637	245,562
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	(1,581)	(1,341)	(3,163)	(2,279)
Operating expenses	(3,215)	(2,685)	(6,361)	(5,058)
Cost of product sales	0	0	0	0
Other operating (income) expense	0	0	0	0
Earnings of non-controlled entities	0	0	0	0
Operating margin	1,634	1,344	3,198	2,779
Depreciation, amortization and impairment	1,634	1,344	3,198	2,779
G&A expense	0	0	0	0
Operating profit	0	0	0	0
Service [Member]
Segment Reporting Information [Line Items]
Revenues	411,815	506,405	870,210	967,197
Service [Member] | Operating Segments [Member] | Refined Products Segment [Member]
Segment Reporting Information [Line Items]
Revenues	279,759	347,630	594,078	657,201
Service [Member] | Operating Segments [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Segment Reporting Information [Line Items]
Revenues	133,637	160,116	279,295	312,275
Service [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	(1,581)	(1,341)	(3,163)	(2,279)
Product [Member]
Segment Reporting Information [Line Items]
Revenues	43,277	189,989	362,397	352,984
Product [Member] | Operating Segments [Member] | Refined Products Segment [Member]
Segment Reporting Information [Line Items]
Revenues	34,463	184,695	347,449	341,977
Product [Member] | Operating Segments [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Segment Reporting Information [Line Items]
Revenues	8,814	5,294	14,948	11,007
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	5,316	5,305	10,607	10,453
Product and Service, Other [Member] | Operating Segments [Member] | Refined Products Segment [Member]
Segment Reporting Information [Line Items]
Revenues	1,513	1,659	3,097	3,321
Product and Service, Other [Member] | Operating Segments [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Segment Reporting Information [Line Items]
Revenues	3,803	3,646	7,510	7,132
Product and Service, Other [Member] | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	$ 0	$ 0	$ 0	$ 0

XML

Revenue from Contract with Customers (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020
Revenue from Contract with Customer [Abstract]
Deferred Revenue, Revenue Recognized	$ 10.5	$ 80.0

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Revenue from Contract with Customers (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Revenue	$ 460,408	$ 701,699	$ 1,243,214	$ 1,330,634
Lease revenue	(22,563)	(24,824)	(50,033)	(49,049)
(Gains) losses from futures contracts included in product sales revenue	26,755	4,618	(97,014)	59,129
Affiliate management fee revenue	(5,316)	(5,305)	(10,607)	(10,453)
Total revenue from contracts with customers under ASC 606	459,284	676,188	1,085,560	1,330,261
Service [Member]
Disaggregation of Revenue [Line Items]
Revenue	411,815	506,405	870,210	967,197
Product [Member]
Disaggregation of Revenue [Line Items]
Revenue	43,277	189,989	362,397	352,984
Product and Service, Other [Member]
Disaggregation of Revenue [Line Items]
Revenue	5,316	5,305	10,607	10,453
Operating Segments [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	315,735	533,984	944,624	1,002,499
Lease revenue	(3,770)	(7,094)	(11,932)	(14,454)
(Gains) losses from futures contracts included in product sales revenue	24,434	4,713	(96,613)	56,822
Affiliate management fee revenue	(1,513)	(1,659)	(3,097)	(3,321)
Total revenue from contracts with customers under ASC 606	334,886	529,944	832,982	1,041,546
Operating Segments [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	146,254	169,056	301,753	330,414
Lease revenue	(18,793)	(17,730)	(38,101)	(34,595)
(Gains) losses from futures contracts included in product sales revenue	2,321	(95)	(401)	2,307
Affiliate management fee revenue	(3,803)	(3,646)	(7,510)	(7,132)
Total revenue from contracts with customers under ASC 606	125,979	147,585	255,741	290,994
Operating Segments [Member] | Service [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	279,759	347,630	594,078	657,201
Operating Segments [Member] | Service [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	133,637	160,116	279,295	312,275
Operating Segments [Member] | Product [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	34,463	184,695	347,449	341,977
Operating Segments [Member] | Product [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	8,814	5,294	14,948	11,007
Operating Segments [Member] | Product and Service, Other [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,513	1,659	3,097	3,321
Operating Segments [Member] | Product and Service, Other [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	3,803	3,646	7,510	7,132
Intersegment Eliminations [Member]
Disaggregation of Revenue [Line Items]
Revenue	(1,581)	(1,341)	(3,163)	(2,279)
Lease revenue	0	0	0	0
(Gains) losses from futures contracts included in product sales revenue	0	0	0	0
Affiliate management fee revenue	0	0	0	0
Total revenue from contracts with customers under ASC 606	(1,581)	(1,341)	(3,163)	(2,279)
Intersegment Eliminations [Member] | Service [Member]
Disaggregation of Revenue [Line Items]
Revenue	(1,581)	(1,341)	(3,163)	(2,279)
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	411,815	506,405	870,210	967,197
Transferred over Time [Member] | Transportation [Member]
Disaggregation of Revenue [Line Items]
Revenue	217,832	292,707	470,952	548,892
Transferred over Time [Member] | Terminalling [Member]
Disaggregation of Revenue [Line Items]
Revenue	36,783	53,967	79,708	100,510
Transferred over Time [Member] | Storage [Member]
Disaggregation of Revenue [Line Items]
Revenue	93,854	93,587	188,649	188,624
Transferred over Time [Member] | Ancillary Services [Member]
Disaggregation of Revenue [Line Items]
Revenue	40,783	41,320	80,868	80,122
Transferred over Time [Member] | Lease Revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue	22,563	24,824	50,033	49,049
Transferred over Time [Member] | Operating Segments [Member] | Service [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	279,759	347,630	594,078	657,201
Transferred over Time [Member] | Operating Segments [Member] | Service [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	133,637	160,116	279,295	312,275
Transferred over Time [Member] | Operating Segments [Member] | Transportation [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	160,282	201,175	336,287	372,202
Transferred over Time [Member] | Operating Segments [Member] | Transportation [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	57,550	91,532	134,665	176,690
Transferred over Time [Member] | Operating Segments [Member] | Terminalling [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	36,303	49,243	76,689	90,540
Transferred over Time [Member] | Operating Segments [Member] | Terminalling [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	480	4,724	3,019	9,970
Transferred over Time [Member] | Operating Segments [Member] | Storage [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	50,726	55,717	108,252	113,093
Transferred over Time [Member] | Operating Segments [Member] | Storage [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	44,709	39,211	83,560	77,810
Transferred over Time [Member] | Operating Segments [Member] | Ancillary Services [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	28,678	34,401	60,918	66,912
Transferred over Time [Member] | Operating Segments [Member] | Ancillary Services [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	12,105	6,919	19,950	13,210
Transferred over Time [Member] | Operating Segments [Member] | Lease Revenue [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	3,770	7,094	11,932	14,454
Transferred over Time [Member] | Operating Segments [Member] | Lease Revenue [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	18,793	17,730	38,101	34,595
Transferred over Time [Member] | Intersegment Eliminations [Member] | Service [Member]
Disaggregation of Revenue [Line Items]
Revenue	(1,581)	(1,341)	(3,163)	(2,279)
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	(1,581)	(1,341)	(3,163)	(2,279)
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	43,277	189,989	362,397	352,984
Transferred at Point in Time [Member] | Operating Segments [Member] | Product [Member] | Refined Products Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	34,463	184,695	347,449	341,977
Transferred at Point in Time [Member] | Operating Segments [Member] | Product [Member] | Crude Oil Pipeline and Terminals Segment [Member]
Disaggregation of Revenue [Line Items]
Revenue	8,814	5,294	14,948	11,007
Transferred at Point in Time [Member] | Intersegment Eliminations [Member] | Product [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 0	$ 0	$ 0	$ 0

XML

Revenue from Contract with Customers (Assets and Liabilities) (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Revenue from Contract with Customer [Abstract]
Billed Contracts Receivable	$ 92,745	$ 124,701
Contract with Customer, Asset, after Allowance for Credit Loss	15,166	8,071
Contract with Customer, Liability	$ 112,064	$ 111,670

XML

Revenue from Contract with Customers (Performance Obligations) (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 3,429,867
Refined Products Segment [Member]
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	2,136,926
Crude Oil Pipeline and Terminals Segment [Member]
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 1,292,941

XML

Revenue from Contract with Customers (Performance Obligations in Next 12 Months) (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 3,429,867
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 655,430
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	$ 2,136,926
Refined Products Segment [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	375,549
Crude Oil Pipeline and Terminals Segment [Member]
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	1,292,941
Crude Oil Pipeline and Terminals Segment [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 279,881
Minimum [Member] | Refined Products Segment [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
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]: 2020-07-01
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]: 2020-07-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	18 years
Maximum [Member] | Crude Oil Pipeline and Terminals Segment [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 years

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Investments in Non-Controlled Entities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020	Dec. 31, 2019
Schedule of Equity Method Investments [Line Items]
Proceeds from Sale of Productive Assets			$ 332,872	$ 63,887
Gain (Loss) on Disposition of Other Assets	$ 0	$ 4,646	12,887	26,434
Revenues	460,408	701,699	1,243,214	1,330,634
Operating	146,107	168,929	295,615	314,954
Other operating income (expense)	3,913	(5,024)	3,402	1,917
Trade accounts receivable	92,884		92,884			$ 125,440
Other accounts receivable	18,761		18,761			23,887
Change in Equity Method Investments [Roll Forward]
Investments, Beginning Balance			1,240,551
Additional investment			59,458
Sale of ownership interest in Saddlehorn			(66,989)
Proportionate share of earnings			78,265
Amortization of excess investment and capitalized interest			(916)
Earnings of non-controlled entities	33,689	40,785	77,349	72,040
Distributions from operations of non-controlled entities			102,699	83,069
Investments, Ending Balance	1,207,670		1,207,670
Service [Member]
Schedule of Equity Method Investments [Line Items]
Revenues	411,815	506,405	870,210	967,197
Equity Method Investee [Member]
Schedule of Equity Method Investments [Line Items]
Related Party Transaction, Other Revenues from Transactions with Related Party	$ 1,000	1,100	$ 2,200	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	$ 273		$ 273			392
Other accounts receivable	2,054		2,054			26
Other Accounts Payable	0		0
BridgeTex [Member] | Equity Method Investee [Member] | Service [Member]
Schedule of Equity Method Investments [Line Items]
Revenues	$ 12,677	10,181	$ 23,425	20,326
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	$ 480		$ 480			445
Double Eagle Pipeline Llc [Member] | Equity Method Investee [Member] | Service [Member]
Schedule of Equity Method Investments [Line Items]
Revenues	$ 1,421	1,572	$ 3,021	3,231
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						60
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]
Trade accounts receivable	$ 47		$ 47			161
Other accounts receivable	0		0
Long-term receivables	$ 8,219		$ 8,219			6,006
Saddlehorn Pipeline Company [Member]
Schedule of Equity Method Investments [Line Items]
Interest in equity method investment	30.00%		30.00%		30.00%
Equity Method Investment Sold Percentage					10.00%
Saddlehorn Pipeline Company [Member] | Equity Method Investee [Member]
Schedule of Equity Method Investments [Line Items]
Other accounts receivable	$ 236		$ 236			126
Saddlehorn Pipeline Company [Member] | Equity Method Investee [Member] | Service [Member]
Schedule of Equity Method Investments [Line Items]
Revenues	$ 565	551	$ 1,131	1,103
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	$ 7,479	6,241	$ 14,378	13,150
Other operating income (expense)	0	$ 0
Trade accounts receivable	768		768			941
Other accounts receivable	0		0
Other Accounts Payable	$ 3,976		$ 3,976			1,349
Texas Frontera Llc [Member]
Schedule of Equity Method Investments [Line Items]
Interest in equity method investment	50.00%		50.00%
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)			$ 1,410	$ 0
Other accounts receivable	$ 422		422			$ 418
Investment in Saddlehorn JV [Member] | Saddlehorn Pipeline Company [Member]
Schedule of Equity Method Investments [Line Items]
Proceeds from Sale of Productive Assets			79,900
Gain (Loss) on Disposition of Other Assets			$ (12,900)

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Inventory (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Refined products	$ 63,374	$ 96,128
Liquefied petroleum gases	19,652	29,982
Transmix	15,991	39,546
Crude oil	12,697	12,714
Additives	4,670	6,029
Total inventory	116,384	$ 184,399
Inventory Write-down	$ 78,400

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Debt (Consolidated Debt) (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 4,841,000,000	$ 4,750,000,000
Unamortized debt issuance costs	(37,986,000)	(35,263,000)
Net unamortized premium (discount)	(10,365,000)	(8,662,000)
Long-term debt, net	$ 4,792,649,000	4,706,075,000
4.25% Notes Due 2021 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.25%
Debt Instrument, Face Amount	$ 0	550,000,000
3.20% Notes Due 2025 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.20%
Debt Instrument, Face Amount	$ 250,000,000	250,000,000
5.00% Notes Due 2026 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	5.00%
Debt Instrument, Face Amount	$ 650,000,000	650,000,000
3.25% Notes Due 2030 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.25%
Debt Instrument, Face Amount	$ 500,000,000.0	0
6.40% Notes Due 2037 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	6.40%
Debt Instrument, Face Amount	$ 250,000,000	250,000,000
4.20% Notes Due 2042 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.20%
Debt Instrument, Face Amount	$ 250,000,000	250,000,000
5.15% Notes Due 2043 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	5.15%
Debt Instrument, Face Amount	$ 550,000,000	550,000,000
4.20% Notes Due 2045 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.20%
Debt Instrument, Face Amount	$ 250,000,000	250,000,000
4.25% Notes Due 2046 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.25%
Debt Instrument, Face Amount	$ 500,000,000	500,000,000
4.20% Notes Due 2047 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.20%
Debt Instrument, Face Amount	$ 500,000,000	500,000,000
4.85% Notes Due 2049 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.85%
Debt Instrument, Face Amount	$ 500,000,000	500,000,000
3.95% Notes Due 2050 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.95%
Debt Instrument, Face Amount	$ 500,000,000	500,000,000
Commercial Paper [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 141,000,000	$ 0

XML

Debt (Narrative) (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 4,841,000,000	$ 4,841,000,000		$ 4,750,000,000
Borrowings under long-term notes		499,400,000	$ 496,855,000
Gain (Loss) on Extinguishment of Debt		(12,893,000)	$ (8,270,000)
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long term debt				0
Commercial Paper [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	141,000,000	141,000,000		0
Line of Credit Facility, Maximum Borrowing Capacity	1,000,000,000.0	$ 1,000,000,000.0
Debt, Weighted Average Interest Rate		1.20%
Commercial Paper [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Term		397 days
3.25% Notes Due 2030 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 500,000,000.0	$ 500,000,000.0		0
Debt Instrument, Interest Rate, Stated Percentage	3.25%	3.25%
Debt Instrument, Notes At Price, Percentage Of Par	99.88%	99.88%
Borrowings under long-term notes		$ 495,200,000
4.25% Notes Due 2021 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 0	$ 0		550,000,000
Debt Instrument, Interest Rate, Stated Percentage	4.25%	4.25%
Extinguishment of Debt, Amount	$ 550,000,000
Gain (Loss) on Extinguishment of Debt	(12,900,000)
Amortization of Debt Discount (Premium)	(700,000)
Senior Notes [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	1,000,000,000.0	$ 1,000,000,000.0
Unused commitment fee		0.125%
Long term debt	0	$ 0
Obligation for letters of credit	$ 3,500,000	$ 3,500,000		$ 3,500,000
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] | 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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Leases Operating Lease, Other Disclosure (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Related Party Transaction [Line Items]
Total lease expense	$ 13,188	$ 12,017	$ 26,077	$ 24,575
Current lease liability	27,251		27,251		$ 26,221
Long-term lease liability	134,274		134,274		144,023
Right-of-use asset	158,855		158,855		171,868
N/A [Member]
Related Party Transaction [Line Items]
Total lease expense	5,709	5,776	11,699	11,425
Current lease liability	15,337		15,337		15,136
Long-term lease liability	77,354		77,354		81,508
Right-of-use asset	90,021		90,021		98,268
Seabrook Logistics, LLC [Member] | Equity Method Investee [Member]
Related Party Transaction [Line Items]
Total lease expense	7,479	$ 6,241	14,378	$ 13,150
Current lease liability	11,914		11,914		11,085
Long-term lease liability	56,920		56,920		62,515
Right-of-use asset	$ 68,834		$ 68,834		$ 73,600

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Employee Benefit Plans (Narrative) (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020 USD ($) pension_plan	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) pension_plan	Jun. 30, 2019 USD ($)
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Contribution Plan, Cost | $	$ 2.4	$ 2.4	$ 6.9	$ 6.5
Number Of Sponsored Pension Plans | pension_plan	2		2
Number Of Sponsored Pension Plans, Non-Union Employees | pension_plan	1		1
Number Of Sponsored Pension Plans, Union Employees | pension_plan	1		1
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 | $	$ 29.3		$ 29.3
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 | $	$ 0.7		$ 0.7

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Schedule Of Consolidated Net Periodic Benefit Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Pension Plan [Member]
Components of net periodic benefit costs:
Service cost	$ 6,735	$ 6,358	$ 13,938	$ 12,885
Interest cost	2,711	3,110	5,513	6,110
Expected return on plan assets	(2,809)	(2,317)	(5,695)	(4,691)
Amortization of prior service credit	(45)	(45)	(90)	(90)
Amortization of actuarial loss	1,322	1,508	2,734	2,785
Settlement cost	0	2,060	969	2,060
Settlement gain on disposition of assets			(1,342)	0
Net periodic benefit cost	7,914	10,674	16,027	19,059
Other Postretirement Benefits Plan [Member]
Components of net periodic benefit costs:
Service cost	67	43	129	97
Interest cost	127	135	239	254
Expected return on plan assets	0	0	0	0
Amortization of prior service credit	0	0	0	0
Amortization of actuarial loss	136	117	255	188
Settlement cost	0	0	0	0
Settlement gain on disposition of assets			0	0
Net periodic benefit cost	$ 330	$ 295	$ 623	$ 539

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Employee Benefit Plans Schedule of Amounts Recognized in Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Changes in AOCL [Roll Forward]
Beginning balance	$ 2,543,977	$ 2,616,255	$ 2,715,028	$ 2,643,434
Net actuarial gain (loss)	414	(10,913)	(333)	(10,913)
Curtailment gain	0	0	1,703	0
Recognition of prior service credit amortization in income	(45)	(45)	(90)	(90)
Recognition of actuarial loss amortization in income	1,458	1,625	2,989	2,973
Recognition of settlement cost in income	0	2,060	969	2,060
Ending balance	2,454,738	2,637,779	2,454,738	2,637,779
Pension Plan [Member]
Changes in AOCL [Roll Forward]
Net actuarial gain (loss)	1,560	(10,029)	813	(10,029)
Curtailment gain			1,703	0
Recognition of prior service credit amortization in income	(45)	(45)	(90)	(90)
Recognition of actuarial loss amortization in income	1,322	1,508	2,734	2,785
Recognition of settlement cost in income	0	2,060	969	2,060
Other Postretirement Benefits Plan [Member]
Changes in AOCL [Roll Forward]
Net actuarial gain (loss)	(1,146)	(884)	(1,146)	(884)
Curtailment gain			0	0
Recognition of prior service credit amortization in income	0	0	0	0
Recognition of actuarial loss amortization in income	136	117	255	188
Recognition of settlement cost in income	0	0	0	0
Accumulated Other Comprehensive Loss | Pension Plan [Member]
Changes in AOCL [Roll Forward]
Beginning balance	(101,447)	(87,370)	(104,739)	(88,602)
Ending balance	(98,610)	(93,876)	(98,610)	(93,876)
Accumulated Other Comprehensive Loss | Other Postretirement Benefits Plan [Member]
Changes in AOCL [Roll Forward]
Beginning balance	(8,259)	(5,338)	(8,378)	(5,409)
Ending balance	$ (9,269)	$ (6,105)	$ (9,269)	$ (6,105)

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Long-Term Incentive Plan (Narrative) (Details) - shares	Jan. 31, 2020	Jun. 30, 2020
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)		1,000,000.0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	378,144
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years

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Long-Term Incentive Plan (Equity-Based Incentive Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Compensation Arrangements by Share-based Payment Award [Line Items]
Allocation of LTIP expense on consolidated statements of income	$ 4,256	$ 10,890	$ 4,411	$ 15,804
Performance Based Awards [Member]
Share-based Compensation Arrangements by Share-based Payment Award [Line Items]
Allocation of LTIP expense on consolidated statements of income	1,821	9,317	(126)	12,961
Time-Based Awards [Member]
Share-based Compensation Arrangements by Share-based Payment Award [Line Items]
Allocation of LTIP expense on consolidated statements of income	$ 2,435	$ 1,573	$ 4,537	$ 2,843

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Derivative Financial Instruments (Narrative) (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2020 USD ($) bbl	Jun. 30, 2020 USD ($) bbl	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Derivative [Line Items]
Debt Instrument, Face Amount	$ 4,841,000,000	$ 4,841,000,000		$ 4,750,000,000
Payments for (Proceeds from) Hedge, Financing Activities		10,444,000	$ 8,028,000
Good Faith and Margin Deposits with Broker-Dealers	25,456,000	25,456,000		27,415,000
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months	$ (3,600,000)	$ (3,600,000)
Energy Related Derivative [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount | bbl	30,000	30,000
Derivative Liability	$ 12,700,000	$ 12,700,000		17,300,000
3.25% Notes Due 2030 [Member]
Derivative [Line Items]
Debt Instrument, Face Amount	$ 500,000,000.0	$ 500,000,000.0		$ 0
Debt Instrument, Interest Rate, Stated Percentage	3.25%	3.25%
3.25% Notes Due 2030 [Member] | Cash Flow Hedging [Member] | Interest Rate Contract [Member]
Derivative [Line Items]
Derivative, Notional Amount	$ 100,000,000.0	$ 100,000,000.0
Payments for (Proceeds from) Hedge, Financing Activities	$ 10,400,000

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Derivative Financial Instruments (Schedule Of NYMEX Contracts And Butane Price Swap Purchase Agreements) (Details) bbl in Millions	Jun. 30, 2020 bbl
Economic Hedges [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount	2.3
Economic Hedges Futures [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount	0.2

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Derivative Financial Instruments (Schedule of Derivative Offset Amounts) (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Derivative [Line Items]
Commodity derivatives deposits	$ 25,456	$ 27,415
Exchange Traded [Member]
Derivative [Line Items]
Derivative Liability, Fair Value, Gross Liability	(14,570)	(11,033)
Derivative Asset, Fair Value, Gross Asset	3,218	811
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	(11,352)	(10,222)
Commodity derivatives deposits	25,456	27,415
Amount After Offset	$ 14,104	$ 17,193

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Derivative Financial Instruments (Derivative Gains Included In Accumulated Other Comprehensive Loss (AOCL) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Gains Included in AOCI [Roll Forward]
Beginning balance	$ 2,543,977	$ 2,616,255	$ 2,715,028	$ 2,643,434
Net gain (loss) on cash flow hedges	1,470	(6,659)	(10,444)	(11,035)
Reclassification of net loss (gain) on cash flow hedges to income	847	601	1,656	1,228
Ending balance	2,454,738	2,637,779	2,454,738	2,637,779
Derivative Losses Included in AOCL
Derivative Gains Included in AOCI [Roll Forward]
Beginning balance	(60,065)	(30,229)	(48,960)	(26,480)
Ending balance	$ (57,748)	$ (36,287)	$ (57,748)	$ (36,287)

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Derivative Financial Instruments (Derivatives And Hedging-Cash Flow Hedges) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Net gain (loss) on cash flow hedges	$ 1,470	$ (6,659)	$ (10,444)	$ (11,035)
Interest Rate Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net	(847)	(601)	(1,656)	(1,228)
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	1,470	(6,659)	(10,444)	(11,035)
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	$ (847)	$ (601)	$ (1,656)	$ (1,228)

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Derivative Financial Instruments (Derivatives And Hedging-Overall-Subsequent Measurement) (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Gain (Loss) on Derivative, Net	$ (23,772)	$ (17,254)	$ 93,171	$ (67,964)
Commodity Contract [Member] | Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Gain (Loss) on Derivative, Net	(26,755)	(4,619)	97,014	(59,130)
Commodity Contract [Member] | Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Gain (Loss) on Derivative, Net	(417)	(6,148)	(4,344)	(3,875)
Energy Related Derivative [Member] | Other Operating Income (Expense) [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Gain (Loss) on Derivative, Net	$ 3,400	$ (6,487)	$ 501	$ (4,959)

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Derivative Financial Instruments (Derivatives and Hedging - Designated) (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	$ 3,218	$ 811
Derivative Liability, Fair Value, Gross Liability	27,319	28,337
Commodity Contract [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	1,024	811
Commodity Contract [Member] | Other Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability	14,555	11,033
Commodity Contract [Member] | Other Noncurrent Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	2,194
Commodity Contract [Member] | Other Noncurrent Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability	15
Energy Related Derivative [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	0	0
Energy Related Derivative [Member] | Other Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability	8,839	8,457
Energy Related Derivative [Member] | Other Noncurrent Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	0	0
Energy Related Derivative [Member] | Other Noncurrent Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability	$ 3,910	$ 8,847

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Fair Value Fair Value (Narrative) (Details)	3 Months Ended
	Mar. 31, 2020 Terminal	Jun. 30, 2020 bbl
Derivative [Line Items]
Number Of Marine Terminals Sold | Terminal	3
Energy Related Derivative [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount | bbl		30,000

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Fair Value (Schedule Of Carrying Amounts And Fair Values Of Financial Assets/Liabilities) (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019
Energy Related Derivative [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability	$ (12,700)		$ (17,300)
Fair Value, Inputs, Level 1 [Member] | Commodity Contract [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability		$ (11,352)	(10,222)
Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt	(4,688,925)		(5,192,685)
Fair Value, Inputs, Level 2 [Member] | Energy Related Derivative [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability	(12,749)		(17,304)
Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term receivables	21,517		20,782
Guarantees, Fair Value Disclosure	(11,286)		(408)
Reported Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term receivables	21,517		20,782
Guarantees, Fair Value Disclosure	(11,286)		(408)
Debt	(4,792,649)		(4,706,075)
Reported Value Measurement [Member] | Commodity Contract [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability		(11,352)	(10,222)
Reported Value Measurement [Member] | Energy Related Derivative [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability	(12,749)		(17,304)
Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term receivables	21,517		20,782
Guarantees, Fair Value Disclosure	(11,286)		(408)
Debt	(4,688,925)		(5,192,685)
Estimate of Fair Value Measurement [Member] | Commodity Contract [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability		$ (11,352)	(10,222)
Estimate of Fair Value Measurement [Member] | Energy Related Derivative [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Liability	$ (12,749)		$ (17,304)

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Commitments and Contingencies (Details) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020 USD ($)	Mar. 31, 2020 Terminal	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	Oct. 04, 2017 facility
Loss Contingencies [Line Items]
Liabilities recognized for estimated environmental costs	$ 12.5			$ 12.5		$ 14.9
Environmental expenses	0.8		$ 1.4	1.2	$ 3.4
Receivables from insurance carriers related to environmental matters	1.8			1.8		2.9
Number Of Marine Terminals Sold | Terminal		3
Accounts Receivable [Member]
Loss Contingencies [Line Items]
Receivables from insurance carriers related to environmental matters	0.9			0.9		1.8
Other Noncurrent Assets [Member]
Loss Contingencies [Line Items]
Receivables from insurance carriers related to environmental matters	0.9			0.9		$ 1.1
Performance Guarantee [Member] | Other Current Liabilities [Member]
Loss Contingencies [Line Items]
Guarantees, Fair Value Disclosure	0.7			0.7
Performance Guarantee [Member] | Other Noncurrent Liabilities [Member]
Loss Contingencies [Line Items]
Guarantees, Fair Value Disclosure	$ 10.2			$ 10.2
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]
Guarantees, Fair Value Disclosure	$ 0.4			$ 0.4
Interest in equity method investment	50.00%			50.00%
Guarantor Obligations, Maximum Exposure, Undiscounted	$ 25.0			$ 25.0
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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Related Party Transactions (Details) - Director [Member] - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Methvin Company [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Other Revenues from Transactions with Related Party	$ 7.3	$ 7.0	$ 15.7	$ 14.3
Accounts Receivable, Related Parties, Current	2.3		$ 2.3		$ 3.8
Methvin Company 2 [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Other Revenues from Transactions with Related Party	$ 0.2

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Partners' Capital and Distributions (Narrative) (Details)	Jun. 30, 2020 USD ($)
Partners' Capital [Abstract]
Stock Repurchase Program, Authorized Amount	$ 750,000,000

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Partners' Capital and Distributions (Schedule of Capital Units) (Details)	6 Months Ended
	Jun. 30, 2020 shares
Increase (Decrease) in Partners' Capital [Roll Forward]
Limited partner units outstanding, beginning balance (in shares)	228,403,428
Stock Repurchased During Period, Shares	(3,631,784)
Limited partner units outstanding, ending balance (in shares)	225,056,287
Management [Member]
Increase (Decrease) in Partners' Capital [Roll Forward]
During 2020–Other (in shares)	275,093
Director [Member]
Increase (Decrease) in Partners' Capital [Roll Forward]
During 2020–Other (in shares)	9,550

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Partners' Capital and Distributions (Schedule Of Distributions) (Details) - USD ($) $ / shares in Units, $ in Thousands								6 Months Ended		9 Months Ended	12 Months Ended
	Aug. 14, 2020	May 15, 2020	Feb. 14, 2020	Nov. 14, 2019	Aug. 14, 2019	May 15, 2019	Feb. 14, 2019	Jun. 30, 2020	Jun. 30, 2019	Sep. 30, 2020	Dec. 31, 2019
Distribution Made to Limited Partner [Line Items]
Cash distribution per unit (in dollars per share)		$ 1.0275	$ 1.0275	$ 1.0200	$ 1.0125	$ 1.0050	$ 0.9975	$ 2.0550	$ 2.0025		$ 4.0350
Total Cash Distribution to Limited Partners		$ 231,245	$ 234,774	$ 232,971	$ 231,258	$ 229,545	$ 227,832	$ 466,019	$ 457,377		$ 921,606
Scenario, Forecast
Distribution Made to Limited Partner [Line Items]
Cash distribution per unit (in dollars per share)	$ 1.0275									$ 3.0825
Total Cash Distribution to Limited Partners	$ 231,245									$ 697,264

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Subsequent Events (Details) - $ / shares	Sep. 30, 2020	Aug. 14, 2020	Jun. 30, 2020	May 15, 2020	Feb. 14, 2020	Dec. 31, 2019	Nov. 14, 2019	Aug. 14, 2019	Jun. 30, 2019	May 15, 2019	Feb. 14, 2019
Subsequent Event [Line Items]
Cash distribution per unit (in dollars per share)			$ 2.0550	$ 1.0275	$ 1.0275	$ 4.0350	$ 1.0200	$ 1.0125	$ 2.0025	$ 1.0050	$ 0.9975
Scenario, Forecast
Subsequent Event [Line Items]
Cash distribution per unit (in dollars per share)	$ 3.0825	$ 1.0275
Subsequent Event | Scenario, Forecast
Subsequent Event [Line Items]
Cash distribution per unit (in dollars per share)		$ 1.0275