10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q/A

Amendment No. 1

(MARK ONE)

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

For the quarterly period ended March 31, 2014

or

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

FOR THE TRANSITION PERIOD FROM _________ TO _________

Commission File Number 001-36260

CYPRESS ENERGY PARTNERS, L.P.

(Exact name of Registrant as specified in its charter)

Delaware	61-1721523
(State of or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5727 South Lewis Avenue, Suite 500 Tulsa, Oklahoma	74105
(Address of principal executive offices)	(zip code)

Registrant’s telephone number, including area code: (918) 748-3900

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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x   No o

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

Large accelerated filer o	Accelerated filer o	Non-accelerated filer x	Smaller  reporting company  o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o   No x

The registrant's common units began trading on the New York Stock Exchange on January 15, 2014.

As of May 12, 2014, the registrant had 5,913,000 common units and 5,913,000 subordinated units outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:   None.

EXPLANATORY NOTE

The purpose of the Amendment No. 1 to our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014, as filed with the Securities and Exchange Commission on May 14, 2014 (the “Form 10-Q”), is solely to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T.  Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-Q formatted in eXtensible Business Reporting Language (XBRL).

No other changes have been made to the Form 10-Q.  This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form-10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.

Users of the data are advised that pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

Item 6.  Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Form 10-Q.

Exhibit Number	Description
3.1*	First Amended and Restated Agreement of Limited Partnership of Cypress Energy Partners, L.P. dated as of January 21, 2014  (incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on January 27, 2014)
3.2*	Amended and Restated Limited Liability Company Agreement of Cypress Energy Partners GP, LLC dated as of January 21, 2014 (incorporated by reference to Exhibit 3.2 of our Current Report on Form 8-K filed on January 27, 2014)
10.1*	Contribution, Conveyance and Assumption Agreement dated as of January 21, 2014, by and among Cypress Energy Partners, L.P., Cypress Energy Holdings, LLC, Cypress Energy Holdings II, LLC, Cypress Energy Partners, LLC, Cypress Energy Partners GP, LLC, Cypress Energy Partners – SBG, LLC, Cypress Energy Partners – TIR, LLC, Tulsa Inspection Resources, LLC, Mr. Charles C. Stephenson, Jr., Ms. Cynthia Field, Mr. G. Les Austin and Mr. Richard Carson (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on January 27, 2014)
10.2*	Cypress Energy Partners, L.P. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K filed on January 27, 2014)
10.3*	Omnibus Agreement dated as of January 21, 2014, by and among Cypress Energy Partners, L.P., Cypress Energy Holdings, LLC, Cypress Energy Management, LLC, Cypress Energy Partners, LLC, Cypress Energy Partners GP, LLC, Cypress Energy Partners – TIR, LLC, Foley Inspection Services ULC, Tulsa Inspection Resources, LLC, Tulsa Inspection Resources – Canada ULC, Tulsa Inspection Resources Holdings, LLC, Tulsa Inspection Resources – Nondestructive Examination, LLC, Charles C. Stephenson, Jr. and Cynthia Field (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed on January 27, 2014)
10.4*	Credit Agreement (incorporated by reference to Exhibit 10.5 of our Registration Statement on Form S-1/A filed on January 10, 2014)
31.1*	Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 INS†	XBRL Instance Document
101 SCH†	XBRL Schema Document
101 CAL†	XBRL Calculation Linkbase Document
101 DEF†	XBRL Definition Linkbase Document
101 LAB†	XBRL Label Linkbase Document
101 PRE†	XBRL Presentation Linkbase Document

*These exhibits were previously included or incorporated by reference in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014, filed with the Securities and Exchange Commission on May 14, 2014.

† Furnished herewith Pursuant to Rule 406T of Regulation S-T, the documents formatted in XBRL (eXtensible Business Reporting Language) and attached as Exhibit 101 to the report are deemed not filed as part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, State of Oklahoma, on June 12, 2014.

Cypress Energy Partners, L.P.
By:	Cypress Energy Partners GP, LLC, its general partner
/s/ G. Les Austin
By:	G. Les Austin
Title:	Chief Financial Officer

Exhibit Index

Exhibit Number	Description
3.1*	First Amended and Restated Agreement of Limited Partnership of Cypress Energy Partners, L.P. dated as of January 21, 2014  (incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on January 27, 2014)
3.2*	Amended and Restated Limited Liability Company Agreement of Cypress Energy Partners GP, LLC dated as of January 21, 2014 (incorporated by reference to Exhibit 3.2 of our Current Report on Form 8-K filed on January 27, 2014)
10.1*	Contribution, Conveyance and Assumption Agreement dated as of January 21, 2014, by and among Cypress Energy Partners, L.P., Cypress Energy Holdings, LLC, Cypress Energy Holdings II, LLC, Cypress Energy Partners, LLC, Cypress Energy Partners GP, LLC, Cypress Energy Partners – SBG, LLC, Cypress Energy Partners – TIR, LLC, Tulsa Inspection Resources, LLC, Mr. Charles C. Stephenson, Jr., Ms. Cynthia Field, Mr. G. Les Austin and Mr. Richard Carson (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on January 27, 2014)
10.2*	Cypress Energy Partners, L.P. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K filed on January 27, 2014)
10.3*	Omnibus Agreement dated as of January 21, 2014, by and among Cypress Energy Partners, L.P., Cypress Energy Holdings, LLC, Cypress Energy Management, LLC, Cypress Energy Partners, LLC, Cypress Energy Partners GP, LLC, Cypress Energy Partners – TIR, LLC, Foley Inspection Services ULC, Tulsa Inspection Resources, LLC, Tulsa Inspection Resources – Canada ULC, Tulsa Inspection Resources Holdings, LLC, Tulsa Inspection Resources – Nondestructive Examination, LLC, Charles C. Stephenson, Jr. and Cynthia Field (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed on January 27, 2014)
10.4*	Credit Agreement (incorporated by reference to Exhibit 10.5 of our Registration Statement on Form S-1/A filed on January 10, 2014)
31.1*	Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 INS†	XBRL Instance Document
101 SCH†	XBRL Schema Document
101 CAL†	XBRL Calculation Linkbase Document
101 DEF†	XBRL Definition Linkbase Document
101 LAB†	XBRL Label Linkbase Document
101 PRE†	XBRL Presentation Linkbase Document

*These exhibits were previously included or incorporated by reference in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014, filed with the Securities and Exchange Commission on May 14, 2014.

† Furnished herewith Pursuant to Rule 406T of Regulation S-T, the documents formatted in XBRL (eXtensible Business Reporting Language) and attached as Exhibit 101 to the report are deemed not filed as part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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Credit Agreement (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013		Dec. 24, 2013
Line of Credit Facility [Line Items]
Maximum borrowing capacity				$ 120,000,000
Maturity date of credit agreement	Dec. 24, 2016
Additional borrowing capacity	100,000,000
Outstanding borrowings	70,000,000	75,000,000	[1]
Commitment fees (in hundredths)	0.50%
Interest paid including commitment fees	645,000
Combined total adjusted leverage ratio, maximum	4.0
Interest coverage ratio required, minimum	3.0
Combined total adjusted leverage ratio	0.8
Interest coverage ratio	5.2
Percentage of cash on hand included in borrowing base calculation (in hundredths)	100.00%
Minimum available capacity under the working capital revolving credit facility in order for the company to be able to make distributions under the credit agreement	5,000,000
Amount by which the borrowing base must exceed outstanding balance on the working capital revolving credit facility in order for the company to be able to make distributions in accordance with credit agreement	5,000,000
Base Rate [Member]
Line of Credit Facility [Line Items]
Debt instrument interest rate (in hundredths)	0.00%
Base Rate [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Debt instrument basis spread on variable rate (in hundredths)	1.25%
Base Rate [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Debt instrument basis spread on variable rate (in hundredths)	2.75%
LIBOR [Member]
Line of Credit Facility [Line Items]
Debt instrument basis spread on variable rate (in hundredths)	3.12%
Debt instrument interest rate (in hundredths)	3.36%
Debt weighted average interest rate (in hundredths)	0.24%
LIBOR [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Debt instrument basis spread on variable rate (in hundredths)	2.25%
LIBOR [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Debt instrument basis spread on variable rate (in hundredths)	3.75%
Senior Secured Working Capital Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity				65,000,000
Remaining borrowing capacity	20,000,000
Acquisition Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity				55,000,000
Remaining borrowing capacity	$ 30,000,000

[1] Recast - Note 2

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Organization and Operations

3 Months Ended

Mar. 31, 2014

Organization and Operations [Abstract]

Organization and Operations

1. Organization and Operations

Cypress Energy Partners, L.P. (the “Partnership”) is a Delaware limited partnership formed on September 19, 2013 to provide saltwater disposal and other water and environmental services to U.S. onshore oil and natural gas producers and trucking companies and to provide independent pipeline inspection and integrity services to producers and pipeline companies.  On January 21, 2014, we completed the initial public offering (“IPO”) of our common units representing limited partner interests. In connection with the IPO, Cypress Energy Holdings II, LLC (“Holdings II”), a wholly owned subsidiary of Cypress Energy Holdings, LLC (“Cypress Holdings”), conveyed a 100% interest in Cypress Energy Partners, LLC ("Cypress LLC") in exchange for (a) an aggregate 47.8% interest in the Partnership comprised of 671,250 common units and 4,983,750 subordinated units, and (b) the right to receive the proceeds of the IPO.  Prior to its contribution to the Partnership, Cypress LLC distributed to Cypress Holdings its interest in SBG Sheridan Facility, LLC, which owns and operates a SWD facility in Sheridan, Montana as well as its interest in three other non-operating subsidiaries.  In addition, affiliates of Cypress Holdings, conveyed an aggregate 50.1% interest in Tulsa Inspection Resources, LLC (“TIR LLC”), Tulsa Inspection Resources – Nondestructive Examination, LLC and Tulsa Inspection Resources Holdings, LLC (collectively, the “TIR Entities”) to the Partnership in exchange for an aggregate 15.7% ownership in the Partnership comprised of 929,250 common units and 929,250 subordinated units.  The Partnership subsequently conveyed its interest in the TIR Entities to Cypress LLC.  Together Cypress LLC and the TIR Entities are hereafter collectively referred to as the “Contributed Entities”.

Our business is organized into the Water and Environmental Services and Pipeline Inspection and Integrity Services reportable segments.  The Water and Environmental Services segment provides services to oil and natural gas producers and trucking companies and consists of the operations of Cypress LLC, our predecessor for accounting purposes, which owns and operates nine commercial saltwater disposal (“SWD”) facilities in the Bakken Shale region of the Williston Basin in North Dakota and in the Permian Basin in Texas.  All of the facilities currently utilize specialized equipment, full-time attendants, and remote monitoring to minimize downtime and increase efficiency for peak utilization. These facilities also contain oil skimming processes that remove any remaining oil from water delivered to the sites.  In addition to the SWD facilities, our consolidated 51% subsidiary, Cypress Energy Services, LLC (“CES”), provides management and staffing services for three additional SWD facilities in the Bakken Shale region, pursuant to management agreements.  CES owns a 25% member interest in one of the managed wells. 

Our Pipeline Inspection and Integrity Services segment provides services to various energy, public utility and pipeline companies in both the United States and Canada and consists of the operations of the TIR Entities. The inspectors perform a variety of inspection and integrity services on midstream pipelines, gathering systems and distribution systems, including data gathering and supervision of third-party construction, inspection, and maintenance and repair projects. Services are provided in Canada through two wholly owned subsidiaries of Tulsa Inspection Resources Holdings, LLC: Tulsa Inspection Resources-Canada, ULC and Foley Inspection Services, ULC, both of which are Canadian unlimited liability corporations.

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Commitments and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014 Audit	Dec. 31, 2013
Performance Obligation Collateral [Member]
Loss Contingencies [Line Items]
Short-term security deposits	$ 440
Letters of credit outstanding	39
Employment Contract Commitments [Member]
Loss Contingencies [Line Items]
Contingent liabilities	915
Employment Contract Commitments [Member] | Minimum [Member]
Loss Contingencies [Line Items]
Term of employment agreements	2 years
Employment Contract Commitments [Member] | Maximum [Member]
Loss Contingencies [Line Items]
Term of employment agreements	5 years
Compliance Audit Contingencies [Member]
Loss Contingencies [Line Items]
Contingent liabilities	$ 420	$ 420
Number of ongoing customer audits	2

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Earnings per Unit (Details)	3 Months Ended
	Mar. 31, 2014
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted-average number of units outstanding (in units)	11,826,000
Common Units [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted-average number of units outstanding (in units)	5,913,000
Subordinated Units [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted-average number of units outstanding (in units)	5,913,000

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Reportable Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014 Segment	Mar. 31, 2013		Dec. 31, 2013
Segment Reporting Information [Line Items]
Number of reportable segments	2
Reconciliation of total segment gross margin to net income before income tax expense
Revenue	$ 97,523	$ 5,337	[1]
Costs of services	86,103	1,582	[1]
Gross margin	11,420	3,755	[1]
Segment general and administrative expense	4,954	625	[1]
Depreciation, amortization and accretion	1,561	899	[1]
Operating income	4,905	2,231	[1]
Interest expense, net	785	0	[1]
Offering costs	446	0	[1]
Other expense, net	12	0	[1]
Net income before income tax expense	3,662	2,231	[1]
Assets	226,205			240,590	[1]
Operating Segments [Member] | Water and Environmental Services [Member]
Segment Reporting Information [Line Items]
Number of operating entities included in reportable segment	9
Reconciliation of total segment gross margin to net income before income tax expense
Revenue	5,260	5,337
Costs of services	2,127	1,582
Gross margin	3,133	3,755
Segment general and administrative expense	609	625
Depreciation, amortization and accretion	926	899
Operating income	1,598	2,231
Assets	82,362	83,019
Operating Segments [Member] | Pipeline Inspection and Integrity Services [Member]
Segment Reporting Information [Line Items]
Number of operating entities included in reportable segment	3
Reconciliation of total segment gross margin to net income before income tax expense
Revenue	92,263	0
Costs of services	83,976	0
Gross margin	8,287	0
Segment general and administrative expense	4,345	0
Depreciation, amortization and accretion	635	0
Operating income	3,307	0
Assets	$ 141,409	$ 0

[1] Recast - Note 2

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Subsequent Events (Details) (Subsequent Event [Member], USD $) In Millions, except Per Share data, unless otherwise specified	0 Months Ended
	Apr. 25, 2014
Cash Distribution [Member] | Minimum [Member]
Subsequent Event [Line Items]
Quarterly cash distribution per unit (in dollars per share)	$ 0.3875
Cash Distribution Q2 [Member]
Subsequent Event [Line Items]
Quarterly cash distribution per unit (in dollars per share)	$ 0.3014
Distribution declaration date	Apr. 25, 2014
Cash distributions declared	$ 3.6
Distribution paid date	May 15, 2014
Distribution record date	May 06, 2014

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Unaudited Condensed Consolidated Statement of Owners' Equity (Parenthetical)	Mar. 31, 2014
Ownership interests conveyed to partnership (in hundredths)	50.10%

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Unaudited Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 24,032	$ 26,690	[1]
Trade accounts receivable, net	53,587	60,730	[1]
Receivables from affiliates	65	0	[1]
Deferred tax asset	159	134	[1]
Deferred offering costs	0	2,539	[1]
Prepaid expenses and other	1,225	1,458	[1]
Total current assets	79,068	91,551	[1]
Property and equipment, at cost:
Property and equipment	42,589	42,529	[1]
Less: accumulated depreciation	4,726	3,711	[1]
Total property and equipment	37,863	38,818	[1]
Intangible assets, net	31,874	32,551	[1]
Goodwill	75,398	75,466	[1]
Debt issuance costs, net	1,960	2,149	[1]
Other assets	42	55	[1]
Total assets	226,205	240,590	[1]
Current liabilities:
Accounts payable	2,999	2,673	[1]
Accrued payroll and other	16,100	10,662	[1]
Income taxes payable	228	16,158	[1]
Total current liabilities	19,327	29,493	[1]
Long-term debt	70,000	75,000	[1]
Deferred tax liability, net	509	541	[1]
Asset retirement obligations	9	9	[1]
Total liabilities	89,845	105,043	[1]
Commitments and contingencies - Note 9			[1]
Parent net investment attributable to controlling interests	0	130,012	[1]
Parent net investment attributable to non-controlling interests	0	719	[1]
Partners' capital:
General partner	1,999	4,816	[1]
Accumulated other comprehensive loss	(286)	0	[1]
Total partners' capital	109,066	4,816	[1]
Non-controlling interests	27,294	0	[1]
Total parent net investment and owners' equity	136,360	135,547	[1]
Total liabilities, parent net investment and owners' equity	226,205	240,590	[1]
Common Units [Member]
Partners' capital:
Limited partner	23,645	0	[1]
Subordinated Units [Member]
Partners' capital:
Limited partner	$ 83,708	$ 0	[1]

[1] Recast - Note 2

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Unaudited Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Operating activities
Net income	$ 3,517		$ 2,231	[1]
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and accretion	1,610		899	[1]
Interest expense from debt issuance cost amortization	189		0	[1]
Amortization of equity-based compensation	294		0	[1]
Equity earnings in investee company	14		0	[1]
Deferred tax benefit	(38)		0	[1]
Changes in assets and liabilities:
Accounts receivable	7,147		(1,310)	[1]
Inventory, prepaid expenses, and other assets	232		(106)	[1]
Accounts payable and accrued liabilities	6,019		1,556	[1]
Income taxes payable	(15,930)		0	[1]
Net cash provided by operating activities	3,054		3,270	[1]
Investing activities
Purchase of property and equipment	(319)		(1,770)	[1]
Net cash used in investing activities	(319)		(1,770)	[1]
Financing activities
Proceeds from initial public offering	80,213		0	[1]
Distribution of initial public offering proceeds to Cypress Energy Holdings, LLC	(80,213)		0	[1]
Payment of deferred offering costs	(314)		0	[1]
Repayment of long-term debt	(5,000)		0	[1]
Payments on behalf of affiliates	(65)		0	[1]
Net advances from members	314		310	[1]
Net cash provided by (used in) financing activities	(5,065)		310	[1]
Effect of exchange rates on cash	(328)		0	[1]
Net increase in cash and cash equivalents	(2,658)		1,810	[1]
Cash and cash equivalents, beginning of period	26,690	[1]	484	[1]
Cash and cash equivalents, end of period	24,032		2,294	[1]
Non-cash items:
Accounts payable excluded from capital expenditures	$ 75		$ 773	[1]

[1] Recast - Note 2

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Organization and Operations (Details)	3 Months Ended
	Mar. 31, 2014 Subsidiary Facility
Schedule Of Organizations And Operations [Line Items]
Ownership interests conveyed to partnership (in hundredths)	50.10%
Number of non operating subsidiaries distributed by Cypress Energy Partners, LLC prior to conveyance of ownership to partnership	3
Number of commercial saltwater disposal facilities owned and operated	9
Cypress Energy Holdings II, LLC [Member] | Cypress Energy Partners, LLC [Member]
Schedule Of Organizations And Operations [Line Items]
Ownership interests conveyed to partnership (in hundredths)	100.00%
Ownership interests in partnership received in exchange for ownership interest (in hundredths)	47.80%
Cypress Energy Holdings II, LLC [Member] | Cypress Energy Partners, LLC [Member] | Common Units [Member]
Schedule Of Organizations And Operations [Line Items]
Number of units received in exchange of ownership interest (in units)	671,250
Cypress Energy Holdings II, LLC [Member] | Cypress Energy Partners, LLC [Member] | Subordinated Units [Member]
Schedule Of Organizations And Operations [Line Items]
Number of units received in exchange of ownership interest (in units)	4,983,750
Cypress Energy Holdings, LLC and Affiliates [Member] | TIR Entities [Member]
Schedule Of Organizations And Operations [Line Items]
Ownership interests conveyed to partnership (in hundredths)	50.10%
Ownership interests in partnership received in exchange for ownership interest (in hundredths)	15.70%
Cypress Energy Holdings, LLC and Affiliates [Member] | TIR Entities [Member] | Common Units [Member]
Schedule Of Organizations And Operations [Line Items]
Number of units received in exchange of ownership interest (in units)	929,250
Cypress Energy Holdings, LLC and Affiliates [Member] | TIR Entities [Member] | Subordinated Units [Member]
Schedule Of Organizations And Operations [Line Items]
Number of units received in exchange of ownership interest (in units)	929,250
Cypress Energy Services, LLC [Member]
Schedule Of Organizations And Operations [Line Items]
Ownership interest in subsidiary (in hundredths)	51.00%
Additional saltwater disposal facilities under management agreements	3
Percentage of member interest in a managed well (in hundredths)	25.00%
Tulsa Inspection Resources Holdings, LLC [Member]
Schedule Of Organizations And Operations [Line Items]
Number of wholly owned subsidiaries of Canadian origin	2

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Initial Public Offering (Details) (USD $)	0 Months Ended	3 Months Ended
	Jan. 21, 2014	Mar. 31, 2014	Mar. 31, 2013
Initial Public Offering [Abstract]
Common units issued in initial public offering (in units)	4,312,500
IPO price of Common units of stock (in dollars per unit)	$ 20.00
IPO price of Common units of stock, net of underwriting discounts and commissions (in dollars per unit)	$ 18.70
Number of units exercised by the underwriters (in units)	562,500
Net proceeds from initial public offering		$ 80,213,000
Total deferred offering costs charged against proceeds from IPO		2,900,000
Deferred offering costs incurred in current reporting period charged against proceeds from IPO		314,000	0	[1]
Offering costs		$ 446,000	$ 0	[1]

[1] Recast - Note 2

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Unaudited Condensed Consolidated Statement of Owners' Equity (USD $) In Thousands, unless otherwise specified		Parent Net Investment Attributable to Controlling Interest [Member]	Parent Net Investment Attributable to Non-controlling Interest [Member]	General Partner [Member]	Common Units [Member]	Subordinated Units [Member]	Accumulated Other Comprehensive Loss [Member]	Non-controlling Interests [Member]	Total
Balance (Recast - Note 2) at Dec. 31, 2013	[1]	$ 130,012	$ 719	$ 4,816	$ 0	$ 0	$ 0	$ 0	$ 4,816
Increase (Decrease) in Partners' Capital [Roll Forward]
Net income		1,092	(6)	(446)	0	0	0	0	(446)
Foreign currency translation adjustment		(304)	0
Balance at Jan. 20, 2014
Balance (Recast - Note 2) at Dec. 31, 2013	[1]	130,012	719	4,816	0	0	0	0	4,816
Increase (Decrease) in Partners' Capital [Roll Forward]
Net distributions to members		(168)	0
Contribution attributable to general partner				482	0	0	0	0	482
Contribution of predecessor and 50.1% of TIR Entities in exchange for units		(130,632)	(713)	0	22,491	82,470	(208)	26,592	131,345
Proceeds from initial public offering, net of offering costs				(2,853)	80,213	0	0	0	77,360
Distribution of initial public offering proceeds to Cypress Energy Holdings, LLC				0	(80,213)	0	0	0	(80,213)
Equity-based compensation				0	105	189	0	0	294
Net income									3,517
Foreign currency translation adjustment									459
Balance at Mar. 31, 2014		0	0	1,999	23,645	83,708	(286)	27,294	136,360
Balance (Recast - Note 2) at Jan. 21, 2014
Increase (Decrease) in Partners' Capital [Roll Forward]
Net income				0	1,049	1,049	0	779	2,877
Foreign currency translation adjustment				0	0	0	(78)	(77)	(155)
Balance at Mar. 31, 2014				$ 1,999	$ 23,645	$ 83,708	$ (286)	$ 27,294	$ 136,360

[1] Recast - Note 2

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Unaudited Condensed Consolidated Balance Sheets (Parenthetical)	Mar. 31, 2014
Common Units [Member]
Partners' capital:
Limited partner, units outstanding (in units)	5,913,000
Subordinated Units [Member]
Partners' capital:
Limited partner, units outstanding (in units)	5,913,000

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Reportable Segments

3 Months Ended

Mar. 31, 2014

Reportable Segments [Abstract]

Reportable Segments

9. Reportable Segments

The Company’s operations consist of two reportable segments: (i) Water and Environmental Services segment and (ii) Pipeline Inspection and Integrity Services segment.  We have recast segment financial information to reflect the conveyance of the entities comprising our reportable segments to the Partnership at the closing of our IPO (see Note 2).

Water and Environmental Services segment – This segment consists of nine operating entities comprising our SWD facilities.  We aggregate these operating entities for reporting purposes as they have similar economic characteristics and have centralized management and processing.  This segmentgenerates revenue primarily by treating produced water and flowback water and injecting them into our SWD facilities. Segment results are driven primarily by the volumes of produced water and flowback water we inject into our SWD facilities and the fees we charge for our services. These fees are charged on a per barrel basis and vary based on the quantity and type of saltwater disposed, competitive dynamics and operating costs. In addition, for minimal marginal cost, we generate revenue by selling residual oil we recover from the flowback and produced water.

Pipeline Inspection and Integrity Services segment – This segment consists of three operating entities comprising the TIR Entities.  We aggregate these operating entities for reporting purposes as they have similar economic characteristics, and have centralized management and processing.  This segment provides independent inspection and integrity services to various energy, public utility and pipeline companies. The inspectors in this segment perform a variety of inspection and integrity services on midstream pipelines, gathering systems and distribution systems, including data gathering and supervision of third-party construction, inspection, and maintenance and repair projects. Our results in this segment are driven primarily by the number and type of inspectors performing services for customers and the fees charged for those services, which depend on the nature and duration of the project.

The following table shows gross margin by reportable segment and a reconciliation of total segment gross margin to net income before income tax expense.

	Water and Environmental Services		Pipeline Inspection and Integrity		Total
	(in thousands)
Three months ended March 31, 2014
Revenue	$	5,260	$	92,263	$	97,523
Costs of services		2,127		83,976		86,103
Segment gross margin		3,133		8,287		11,420
Segment general and administrative expense		609		4,345		4,954
Depreciation, amortization and accretion		926		635		1,561
Segment operating income	$	1,598	$	3,307		4,905
Interest expense, net						785
Offering costs						446
Other expense, net						12
Net income before income tax expense					$	3,662
Total Assets	$	82,362	$	141,409
Three months ended March 31, 2013
Revenue	$	5,337	$	-	$	5,337
Costs of services		1,582		-		1,582
Segment gross margin		3,755		-		3,755
Segment general and administrative expense		625		-		625
Depreciation, amortization and accretion		899		-		899
Segment operating income	$	2,231	$	-		2,231
Interest expense, net						-
Other expense, net						-
					$	2,231
Total Assets	$	83,019	$	-

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Document and Entity Information	3 Months Ended
	Mar. 31, 2014	May 12, 2014 Common Units [Member]	May 12, 2014 Subordinated Units [Member]
Entity Information [Line Items]
Entity Registrant Name	Cypress Energy Partners, L.P.
Entity Central Index Key	0001587246
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		5,913,000	5,913,000
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014

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Subsequent Events

3 Months Ended

Mar. 31, 2014

Subsequent Events [Abstract]

Subsequent Events

10. Subsequent Events

The Company has evaluated subsequent events through May 14, 2014, which is the date these financial statements were available to be issued.

Our Partnership agreement calls for minimum quarterly distributions of $0.3875 per unit.  In accordance with the Partnership agreement, on April 25, 2014, we declared a quarterly cash distribution totaling $3.6 million, or $0.3014 per unit which represents the pro-rated portion of the minimum quarterly distribution adjusted to reflect the period beginning on January 21, 2014, the closing date of the IPO, through March 31, 2014. This distribution will be paid on May 15, 2014 to unitholders of record on May 6, 2014. There were no distributions declared or paid prior to this distribution.

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Unaudited Condensed Consolidated Statements of Income (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Revenues	$ 97,523
Costs of services	86,103
Gross margin	11,420
Operating costs and expense:
General and administrative	4,954
Depreciation, amortization and accretion	1,561
Operating income	4,905
Interest expense, net	785
Offering costs	446
Other expense, net	12
Net income before income tax expense	3,662
Income tax expense	145
Net income	3,517
Net income attributable to non-controlling interests	773
Net income attributable to partners	2,744
Less: Net income attributable to general partner	646
Net income attributable to limited partners [Abstract]
Net income attributable to limited partners	2,098
Weighted average units outstanding [Abstract]
Basic (in units)	11,826,000
Common Units [Member]
Net income attributable to limited partners [Abstract]
Net income attributable to limited partners	1,049
Net income per limited partner unit [Abstract]
Basic (in dollars per unit)	$ 0.18
Diluted (in dollars per unit)	$ 0.17
Weighted average units outstanding [Abstract]
Basic (in units)	5,913,000
Diluted (in units)	5,996,240
Subordinated Units [Member]
Net income attributable to limited partners [Abstract]
Net income attributable to limited partners	$ 1,049
Net income per limited partner unit [Abstract]
Net income per subordinated limited partner unit, basic and diluted (in dollars per share)	$ 0.18
Weighted average units outstanding [Abstract]
Basic (in units)	5,913,000
Weighted average subordinated units outstanding, basic and diluted (in units)	5,913,000

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Credit Agreement

3 Months Ended

Mar. 31, 2014

Credit Agreement [Abstract]

Credit Agreement

4. Credit Agreement

On December 24, 2013, we along with our affiliate Cypress Energy Partners - TIR, LLC (“CEP-TIR”), (together, the “Borrowers”), entered into a $120 million secured credit agreement as co-borrowers and co-guarantors. The credit agreement matures on December 24, 2016 and consists of a $65.0 million senior secured working capital revolving credit facility and a $55.0 million senior secured acquisition revolving credit facility. CEP-TIR agreed, in its operating agreement, not to borrow under the credit agreement and not to engage in any business other than owning non-controlling interests in the TIR Entities. The credit agreement has an accordion feature that allows us to increase the available revolving borrowings under the facilities by up to an additional $100.0 million, subject to our receiving increased commitments from existing lenders or new commitments from new lenders and the satisfaction of certain other conditions. At March 31, 2014 and December 31, 2013, there were outstanding borrowings under the credit agreement of $70.0 million and $75.0 million, respectively.  Borrowings under the credit agreement are due at maturity. If at any time outstanding borrowings exceed the combined borrowing base of the Borrowers, principal in the amount of the excess is due upon submission of the borrowing base calculation. We had $30.0 million of availability under the acquisition revolving credit facility and $20.0 million of availability under the borrowing base revolving credit facility at March 31, 2014.  The obligations under our credit agreement are secured by a first priority lien on substantially all assets of the Borrowers.

All borrowings under the credit agreement bear interest, at our option, on a leveraged based grid pricing at (i) a base rate plus a margin of 1.25% to 2.75% per annum (“Base Rate Borrowing”) or (ii) an adjusted LIBOR rate plus a margin of 2.25% to 3.75% per annum (“LIBOR Borrowings”). The applicable margin is determined based on the combined leverage ratio of the Borrowers, as defined in the credit agreement. For the three months ended March 31, 2014, the interest rate in effect on outstanding LIBOR Borrowings was 3.36%, calculated as the weighted average LIBOR rate of 0.24% plus a weighted average margin of 3.12%. There were no Base Rate Borrowings outstanding at March 31, 2014.  Interest on Base Rate Borrowings is payable monthly.  Interest on LIBOR Borrowings is paid upon maturity of the underlying LIBOR contract, but no less often than quarterly.  Commitment fees are charged at a rate of 0.50% on any unused credit and are payable quarterly. Interest paid during the three months ended March 31, 2014 was $645 thousand, including commitment fees.

Our credit agreement contains various customary affirmative and negative covenants and restrictive provisions. Our credit agreement also requires maintenance of certain financial covenants, including a combined total adjusted leverage ratio (as defined in our credit agreement) of not more than 4.0 to 1.0 and an interest coverage ratio (as defined in our credit agreement) of not less than 3.0 to 1.0.  At March 31, 2014, our total adjusted leverage ratio was 0.8 to 1.0 and our interest coverage ratio was 5.2 to 1.0, pursuant to the credit agreement.  Upon the occurrence and during the continuation of an event of default, subject to the terms and conditions of our credit agreement, the lenders may declare any outstanding principal of our credit agreement debt, together with accrued and unpaid interest, to be immediately due and payable and may exercise the other remedies set forth or referred to in our credit agreement.

In addition, our credit agreement restricts our ability to make distributions on, or redeem or repurchase, our equity interests, provided, however, that we may make distributions of available cash so long as, both at the time of the distribution and after giving effect to the distribution, no default exists under our credit agreement, the borrowers and the guarantors are in compliance with the financial covenants, the borrowing base (which includes 100% of cash on hand) exceeds the amount of outstanding credit extensions under the working capital revolving credit facility by at least $5.0 million and at least $5.0 million in lender commitments are available to be drawn under the borrowing base revolving credit facility.

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Initial Public Offering

3 Months Ended

Mar. 31, 2014

Initial Public Offering [Abstract]

Initial Public Offering

3. Initial Public Offering

On January 21, 2014, the Partnership completed its IPO consisting of 4,312,500 common units representing limited partner interests in the Partnership at a price to the public of $20.00 per common unit ($18.70 per common unit, net of underwriting discounts and commissions) which included a 562,500 unit over-allotment option that was exercised by the underwriters.  We received net proceeds of approximately $80.2 million from the IPO, after deducting underwriting discounts and structuring fees.  The net proceeds from the IPO were distributed to Holdings II as reimbursement for certain capital expenditures it incurred with respect to assets contributed to us.

Total deferred offering costs of $2.9 million, including costs incurred during the three months ended March 31, 2014 of $0.3 million, were charged against the proceeds of the IPO.  In addition, the Partnership incurred $0.4 million of offering costs during the three months ended March 31, 2014, that were expensed as incurred.  These non-recurring costs are reflected as offering costs in the Partnership’s unaudited condensed consolidated statement of income for the three months ended March 31, 2014.

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Basis of Presentation and Summary of Significant Accounting Policies (Details) (USD $)	3 Months Ended				2 Months Ended
	Mar. 31, 2014	Mar. 31, 2013		Mar. 31, 2014 SBG Energy Services, LLC [Member]	Mar. 31, 2014 Cypress Holdings [Member]
Income Taxes [Abstract]
Income tax expense	$ 145,000	$ 0	[1]
Income tax paid	15,000,000
Minimum gross income required from certain qualifying sources (in hundredths)	90.00%
Noncontrolling Interest [Line Items]
Noncontrolling interest (in hundredths)				49.00%	49.90%
Net income attributable to non-controlling interest	$ 773,000			$ 23,000	$ 750,000

[1] Recast - Note 2

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2014

Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The unaudited condensed consolidated financial statements for periods prior to the IPO reflect the results of our predecessor and the TIR Entities and were prepared using the historical basis in the assets and liabilities of the predecessor and the TIR Entities. We have recast prior period financial information to reflect the conveyance of the Contributed Entities to the Partnership at the closing of our IPO, as if the contribution of Cypress LLC had occurred as of January 1, 2013 and the contribution of the TIR Entities had occurred as of June 27, 2013 as Cypress Holdings and its affiliates did not acquire a controlling interest in the TIR Entities until June 27, 2013. All significant intercompany transactions and account balances have been eliminated. We have made certain reclassifications to the prior period financial statements to conform with classification methods used in the current fiscal year. These reclassifications had no impact on previously reported amounts of total assets, total liabilities, owners’ equity, or net income.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim consolidated financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. The unaudited condensed consolidated financial statements include all adjustments that we consider necessary for a fair presentation of the financial position and results of operations for the interim periods presented. Such adjustments consist only of normal recurring items, unless otherwise disclosed herein. Accordingly, the unaudited condensed consolidated financial statements do not include all the information and notes required by GAAP for complete annual consolidated financial statements. However, we believe that the disclosures made are adequate to make the information not misleading. These interim unaudited condensed consolidated financial statements should be read in conjunction with our audited financial statements as of December 31, 2013 and for the period from September 19, 2013 through December 31, 2013, the audited consolidated financial statements of Cypress Energy Partners, LLC as of December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012 and for the period from June 1, 2011 (Inception) to December 31, 2011, the audited combined financial statements of the TIR Entities as of and for the year ended December 31, 2013, and the audited consolidated financial statements of Tulsa Inspection Resources, Inc. as of and for the years ended December 31, 2012 and 2011 included in our Annual Report on Form 10-K for the year ended December 31, 2013. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year.

Use of Estimates in the Preparation of Financial Statements

Use of Estimates in the Preparation of Financial Statements

The preparation of the Partnership’s unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates.

Unit-Based Compensation

Unit-Based Compensation

Our general partner adopted a long-term incentive plan (“LTIP”) in connection with the IPO.  The cost of employee services received in exchange for equity instruments is measured based on the grant-date fair value of those instruments. That cost is recognized straight-line over the requisite service period (often the vesting period) as discussed in Note 5. 

Offering Costs

Offering Costs

Incremental costs directly attributable to an offering of equity securities are deferred and charged against the gross proceeds of the offering as a reduction in owners’ equity including underwriter fees, legal and accounting fees associated with the preparation of the registration statement, and other costs related to the promotion of the offering. All other costs that are not directly related to the offering are expensed as incurred. 

Income Taxes

Income Taxes

We generally are not a taxable entity for federal, state or local income tax purposes.  We operate in multiple states in which we pay business activity or franchise based taxes that are recorded as Income tax expense in the condensed consolidated statements of income. Tax expense attributable to these state taxes was $145 thousand for the three month period ended March 31, 2014.  The tax on net income is generally borne by individual partners. Net income for financial statement purposes may differ significantly from taxable income of unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under our partnership agreement. The aggregated difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined because information regarding each partners’ tax attributes in us is not available to us.

On December 9, 2013, the TIR Entities were converted to pass-through entities for U.S. federal income tax purposes.  During the three month period ended March 31, 2014, the Partnership made a payment of $15.0 million for income taxes associated with the gain on the conversion.  The TIR Entities that have Canadian activity remain taxable in Canada.  In addition, effective January 1, 2014, the TIR entities formed a wholly owned subsidiary, Tulsa Inspection Resources-PUC, LLC (“TIR-PUC”), which has elected to be taxed as a corporation for U.S. federal income tax purposes.  Income tax expense for the three months ended March 31, 2014 includes certain entity-level state income taxes for both Cypress LLC and the TIR Entities, U.S. federal and state income taxes for TIR-PUC, and Canadian income taxes for the TIR Entities.

A publicly-traded partnership is required to generate at least 90% of its gross income (as defined for federal income tax purposes) from certain qualifying sources. Income generated by TIR-PUC is excluded from this qualifying income calculation as a result of management’s election to treat the entity as a taxable corporation.    We believe that at least 90% of our gross income has been qualifying income since our initial public offering.

We evaluate uncertain tax positions for recognition and measurement in the consolidated financial statements. To recognize a tax position, we determine whether it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation, based on the technical merits of the position. A tax position that meets the more likely than not threshold is measured to determine the amount of benefit to be recognized in the consolidated financial statements. We had no material uncertain tax positions that required recognition in the consolidated financial statements at March 31, 2014.

Non-controlling Interest

Non-controlling Interest

The Partnership holds a controlling interest in several entities which are not wholly owned. The non-controlling interest shown in our condensed consolidated balance sheet at March 31, 2014 reflects the 49% membership interest in CES that is owned by SBG Energy Services, LLC and the 49.9% interest in each of the TIR Entities that is owned by affiliates of Cypress Holdings.  The net income attributable to non-controlling interest shown in our condensed consolidated statement of income reflects 49% of the net income of CES for the three months ended March 31, 2014 of $23 thousand and 49.9% of the net income of the TIR Entities for the period from January 21, 2014 through March 31, 2014, as adjusted in accordance with our partnership agreement, of $750 thousand.

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Earnings per Unit

3 Months Ended

Mar. 31, 2014

Earnings per Unit [Abstract]

Earnings per Unit

7. Earnings per Unit

Subsequent to the IPO, the Partnership presents earnings per unit information in accordance with ASC Topic 260, “Earnings per Share.”

Net income per unit applicable to limited partners (including subordinated unitholders) is computed by dividing limited partners’ interest in net income, after deducting the general partner’s incentive distributions, by the weighted-average number of outstanding common and subordinated units.  Diluted net income per common unit includes the dilutive impact of unvested common units granted under the LTIP.  Our net income is allocated to the general partner and limited partners in accordance with their respective partnership percentages, after giving effect to priority income allocations for incentive distributions, if any, to our general partner, pursuant to our partnership agreement. Net income per unit is only calculated for the Partnership subsequent to the IPO as no units were outstanding prior to January 21, 2014. Earnings in excess of distributions are allocated to the general partner and limited partners based on their respective ownership interests. Payments made to our unitholders are determined in relation to actual distributions declared and are not based on the net income allocations used in the calculation of net income per unit. For the three months ended March 31, 2014, the weighted-average number of units outstanding was 11,826,000 comprised of 5,913,000 common units and 5,913,000 subordinated units, respectively.

In addition to the common and subordinated units, we have also identified incentive distribution rights as participating securities and use the two-class method when calculating the net income per unit applicable to limited partners, which is based on the weighted-average number of common units outstanding during the period.

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Equity Compensation

3 Months Ended

Mar. 31, 2014

Equity Compensation [Abstract]

Equity Compensation

5. Equity Compensation

Effective at the closing of the IPO, our general partner adopted a long-term incentive plan (“LTIP”) that authorized up to 1,182,600 units representing 10% of the currently outstanding units.  Certain directors and employees of the Partnership were awarded Phantom Restricted Units (“Units”) under the terms of the LTIP, during the three months ended March 31, 2014. The fair value of the awards issued is determined based on the quoted market value of the publically traded common units at each grant date, adjusted for a forfeiture rate, and other discounts attributable to the awarded units. This valuation is considered a Level 3 valuation under the fair value measurement hierarchy.  Compensation expense is recognized straight-line over the vesting period of the grant. Cypress Holdings reimburses the Partnership for the direct expense of the awards and reallocates the expense to us through the annual administrative fee provided for under the terms of the omnibus agreement (Note 6).  For the three months ended March 31, 2014, the Partnership recognized $105 thousand in compensation expense under the LTIP. The following table sets forth the grants and forfeitures of Units under the LTIP for the period from January 21, 2014 (IPO date) through March 31, 2014:

	Units		Weighted Average Grant Date Fair Value/Unit
Units at January 1, 2014		-	$	-
Units Granted		116,843		17.22
Units at March 31, 2014		116,843	$	17.22

Outstanding Units issued to directors vest ratably over a three-year period from the date of grant.  The remaining Units granted to employees vest over a five-year period from the date of grant, with one third vesting at the end of the third year, one third at the end of the fourth year and one third vesting at the end of the fifth year or will vest in full upon the occurrence of a Fundamental Change, as defined in the LTIP agreement.

In conjunction with the IPO, phantom profits interest units previously issued under our predecessor’s LTIP were exchanged for 44,250 Units under the LTIP. Vesting under all of the predecessor’s exchanged awards is retroactive to the initial grant date.  The awards will be considered for all purposes to have been granted under the Partnership’s LTIP. In addition, at IPO certain profits interest units previously issued under the predecessor’s LTIP were converted into 44,451 subordinated units of the Partnership outside of the LTIP.  Vesting for the subordinated units is retroactive to the initial grant date. During the three months ended March 31, 2014, the Partnership recognized $189 thousand in compensation expense related to the converted subordinated units. The exchange of the phantom profits interest units and the profits interest units resulted in the reversal of the existing equity compensation liability of $76 thousand during the three months ended March 31, 2014 as the new awards are accounted for as equity.

Tulsa Inspection Resources, Inc. also maintained a stock option plan to allow for share-based compensation for certain employees and non-employee directors and contractors.  All awards under the plan were converted or forfeited prior to the company’s conversion to a limited liability company on December 9, 2013.

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Related-Party Transactions

3 Months Ended

Mar. 31, 2014

Related-Party Transactions [Abstract]

Related-Party Transactions

6. Related-Party Transactions

Omnibus Agreement

At the closing of the IPO, we entered into an omnibus agreement with Cypress Holdings and other related parties that govern the following matters, among other things:

•our payment of an annual administrative fee initially in the amount of $4.0 million to be paid in quarterly installments (pro-rated in the first quarter of 2014 from IPO date) to Cypress Holdings for providing us with certain partnership overhead services, including for certain executive management services by certain officers of our general partner, and compensation expense (including equity-based compensation) for all employees required to manage and operate our business. This fee also includes the incremental general and administrative expenses we incur as a result of being a publicly traded partnership;

•limitations on the amount of indebtedness CEP-TIR may incur under our credit agreement and the allocation of certain interest expenses to the TIR Entities; and

•indemnification of us by Cypress Holdings for certain environmental and other liabilities, including events and conditions associated with our operation of assets that occurred prior to the closing of the IPO and our obligation to indemnify Cypress Holdings for events and conditions associated with the operation of our assets that occur after the closing of the IPO and for environmental liabilities related to our assets to the extent Cypress Holdings is not required to indemnify us.

So long as Cypress Holdings controls our general partner, the omnibus agreement will remain in full force and effect, unless we and Cypress Holdings agree to terminate it sooner. If Cypress Holdings ceases to control our general partner, either party may terminate the omnibus agreement, provided that the indemnification obligations will remain in full force and effect in accordance with their terms.

The pro-rated amount charged by Cypress Holdings for the period from the closing of the IPO through March 31, 2014 was $787 thousand and is reflected in general and administrative in the condensed consolidated statement of income.

Allocated Expenses

Prior to the IPO, the Partnership reimbursed certain affiliated entities for general and administrative expenses, primarily management labor expenses, totaling $60 thousand during the three months ended March 31, 2014.  During the three months ended March 31, 2013, our predecessor allocated certain general and administrative expense to affiliates totaling $137 thousand which were recorded as a reduction of general and administrative expenses.

Distributions to / Advances from Parent

Prior to the IPO, our predecessor provided treasury and accounts payable services for Cypress Holdings and other affiliates. Amounts paid on behalf of Cypress Holdings and its affiliates, net of cash transfers from Cypress Holdings, are treated as a component of Parent Net Equity. Distributions to / Advances from Parent were $168 thousand and $197 thousand, respectively, for the three months ended March 31, 2014 and 2013.

Receivable from Affiliate

Subsequent to the IPO, the Partnership continued to fund certain payroll activities on behalf of Cypress Holdings.  Net amounts receivable from Cypress Holdings related to these payroll activities were $852 thousand at March 31, 2014.  In addition, the Partnership owes Cypress Holdings $787 related to the administrative fee under the omnibus agreement.  The net amount due to Cypress Holdings is recorded in the condensed consolidated balance sheet as Receivables from affiliates.

Other Related Party Transactions

A current board member and business partner in North Dakota has an interest in several entities with which the Partnership does business including the following:

SBG Disposal, LLC- Prior to the acquisition of certain assets and management fee contracts by Cypress Energy Services, LLC (our 51% owned entity) effective October 1, 2013, SBG Disposal, LLC provided staffing, management and back office services for the Partnership’s SWD facilities.  SBG Disposal, LLC is a wholly owned subsidiary of SBG Energy Services, LLC and provided services to our predecessor totaling $600 thousand for the three months ended March 31, 2013.  These costs are included in Cost of services.

Rud Transportation, LLC (Rud) – Rud a wholly owned subsidiary of SBG Energy Services, LLC is a trucking company that has various energy company customers that retain their services to haul and dispose of produced water, and flowback water.  The water is sometimes hauled to the energy customers own SWD facilities, as well as third party SWD facilities, including SWD facilities owned by the Partnership.  Total revenue recognized by the Partnership from Rud was $626 thousand and $476 thousand for the three months ended March 31, 2014 and 2013, respectively.  Accounts receivable from Rud was $626 thousand and $396 thousand at March 31, 2014 and December 31, 2013, respectively, and is included in Trade accounts receivable, net. 

Effective October 1, 2013, the Partnership, through Cypress Energy Services, LLC, provides management services to its 25% owned investee company, Alati Arnegard, LLC (Arnegard).  Management fee revenue earned from Arnegard totaled $141 thousand for the three months ended March 31, 2014.  Accounts receivable from Arnegard totaled $141 thousand at March 31, 2014 and is included Trade accounts receivable, net in the condensed consolidated balance sheets.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2014

Commitments and Contingencies [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Letters of Credit

The Partnership has various performance obligations which are secured with short-term security deposits of $440 thousand, included in other current assets on the condensed consolidated balance sheet, and under letters of credit totaling $39 thousand.

Employment Contract Commitments

The Partnership has employment agreements with certain of its executives.  The executive employment agreements are effective for a term of two-to-five years from the commencement date, after which time they will continue on an “at-will” basis.  These agreements provide for minimum annual compensation, adjusted for annual increases as authorized by the Board of Directors.  Certain agreements provide for severance payments in the event of specified termination of employment.  As of March 31, 2014, the aggregate commitment for future compensation and severance was approximately $915 thousand.

Compliance Audit Contingencies

Certain customer master service agreements (“MSA’s”) offer our customers the opportunity to perform periodic compliance audits, which include the examination of the accuracy of our invoices.  Should our invoices be determined to be inconsistent with, or inaccurate, the MSA’s may offer the customer the right to receive a “credit or refund” for any overcharges identified.  At March 31, 2014 and December 31, 2013, the Partnership has contingent liabilities of approximately $420 thousand associated with the probable settlement related to two ongoing customer audits of various charges previously approved by customer representatives reflected in Accrued payroll and other on the condensed consolidated balance sheets.  Both audits are expected to be concluded by the end of the second quarter of 2014.

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Reportable Segments (Tables)

3 Months Ended

Mar. 31, 2014

Reportable Segments [Abstract]

Reconciliation of Segment Gross Margin to Income before Tax Expense

The following table shows gross margin by reportable segment and a reconciliation of total segment gross margin to net income before income tax expense.

	Water and Environmental Services		Pipeline Inspection and Integrity		Total
	(in thousands)
Three months ended March 31, 2014
Revenue	$	5,260	$	92,263	$	97,523
Costs of services		2,127		83,976		86,103
Segment gross margin		3,133		8,287		11,420
Segment general and administrative expense		609		4,345		4,954
Depreciation, amortization and accretion		926		635		1,561
Segment operating income	$	1,598	$	3,307		4,905
Interest expense, net						785
Offering costs						446
Other expense, net						12
Net income before income tax expense					$	3,662
Total Assets	$	82,362	$	141,409
Three months ended March 31, 2013
Revenue	$	5,337	$	-	$	5,337
Costs of services		1,582		-		1,582
Segment gross margin		3,755		-		3,755
Segment general and administrative expense		625		-		625
Depreciation, amortization and accretion		899		-		899
Segment operating income	$	2,231	$	-		2,231
Interest expense, net						-
Other expense, net						-
					$	2,231
Total Assets	$	83,019	$	-

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Equity Compensation (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Subordinated Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 189
Long Term Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized (in units)	1,182,600
Percentage of current outstanding units (in hundredths)	10.00%
Compensation expense	105
Number of units exchanged (in units)	44,250
Units [Roll Forward]
Units at January 1, 2014 (in units)	0
Units Granted (in units)	116,843
Units at March 31, 2014 (in units)	116,843
Weighted Average Grant Date Fair Value/Unit [Abstract]
Weighted average dollar per unit at January 1, 2014 (in dollars per unit)	$ 0
Weighted average dollar per unit - units granted (in dollars per unit)	$ 17.22
Weighted average dollar per unit at March 31, 2014 (in dollars per unit)	$ 17.22
Long Term Incentive Plan [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Long Term Incentive Plan [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	5 years
Shares vesting at the end of the third year (in hundredths)	33.00%
Shares vesting at the end of the fourth year (in hundredths)	33.00%
Shares vesting at the end of the fifth year (in hundredths)	33.00%
Predecessor Long Term Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reversal of compensation liability	$ 76
Predecessor Long Term Incentive Plan [Member] | Subordinated Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of units converted (in units)	44,451

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Unaudited Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Unaudited Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 3,517	$ 2,231	[1]
Other comprehensive loss-change in foreign currency translation	(459)	0
Comprehensive income	3,058	2,231
Comprehensive income attributable to non-controlling interests	696	0
Comprehensive income attributable to partners	$ 2,362	$ 2,231

[1] Recast - Note 2

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Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2014

Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements for periods prior to the IPO reflect the results of our predecessor and the TIR Entities and were prepared using the historical basis in the assets and liabilities of the predecessor and the TIR Entities. We have recast prior period financial information to reflect the conveyance of the Contributed Entities to the Partnership at the closing of our IPO, as if the contribution of Cypress LLC had occurred as of January 1, 2013 and the contribution of the TIR Entities had occurred as of June 27, 2013 as Cypress Holdings and its affiliates did not acquire a controlling interest in the TIR Entities until June 27, 2013. All significant intercompany transactions and account balances have been eliminated. We have made certain reclassifications to the prior period financial statements to conform with classification methods used in the current fiscal year. These reclassifications had no impact on previously reported amounts of total assets, total liabilities, owners’ equity, or net income.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim consolidated financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. The unaudited condensed consolidated financial statements include all adjustments that we consider necessary for a fair presentation of the financial position and results of operations for the interim periods presented. Such adjustments consist only of normal recurring items, unless otherwise disclosed herein. Accordingly, the unaudited condensed consolidated financial statements do not include all the information and notes required by GAAP for complete annual consolidated financial statements. However, we believe that the disclosures made are adequate to make the information not misleading. These interim unaudited condensed consolidated financial statements should be read in conjunction with our audited financial statements as of December 31, 2013 and for the period from September 19, 2013 through December 31, 2013, the audited consolidated financial statements of Cypress Energy Partners, LLC as of December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012 and for the period from June 1, 2011 (Inception) to December 31, 2011, the audited combined financial statements of the TIR Entities as of and for the year ended December 31, 2013, and the audited consolidated financial statements of Tulsa Inspection Resources, Inc. as of and for the years ended December 31, 2012 and 2011 included in our Annual Report on Form 10-K for the year ended December 31, 2013. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year.

Use of Estimates in the Preparation of Financial Statements

The preparation of the Partnership’s unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates.

Significant Accounting Policies

Our significant accounting policies are consistent with those disclosed in Note 2 of each of the audited financial statements described above included in our Annual Report on Form 10-K for the year ended December 31, 2013.

Unit-Based Compensation

Our general partner adopted a long-term incentive plan (“LTIP”) in connection with the IPO.  The cost of employee services received in exchange for equity instruments is measured based on the grant-date fair value of those instruments. That cost is recognized straight-line over the requisite service period (often the vesting period) as discussed in Note 5. 

Offering Costs

Incremental costs directly attributable to an offering of equity securities are deferred and charged against the gross proceeds of the offering as a reduction in owners’ equity including underwriter fees, legal and accounting fees associated with the preparation of the registration statement, and other costs related to the promotion of the offering. All other costs that are not directly related to the offering are expensed as incurred. 

Income Taxes

We generally are not a taxable entity for federal, state or local income tax purposes.  We operate in multiple states in which we pay business activity or franchise based taxes that are recorded as Income tax expense in the condensed consolidated statements of income. Tax expense attributable to these state taxes was $145 thousand for the three month period ended March 31, 2014.  The tax on net income is generally borne by individual partners. Net income for financial statement purposes may differ significantly from taxable income of unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under our partnership agreement. The aggregated difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined because information regarding each partners’ tax attributes in us is not available to us.

On December 9, 2013, the TIR Entities were converted to pass-through entities for U.S. federal income tax purposes.  During the three month period ended March 31, 2014, the Partnership made a payment of $15.0 million for income taxes associated with the gain on the conversion.  The TIR Entities that have Canadian activity remain taxable in Canada.  In addition, effective January 1, 2014, the TIR entities formed a wholly owned subsidiary, Tulsa Inspection Resources-PUC, LLC (“TIR-PUC”), which has elected to be taxed as a corporation for U.S. federal income tax purposes.  Income tax expense for the three months ended March 31, 2014 includes certain entity-level state income taxes for both Cypress LLC and the TIR Entities, U.S. federal and state income taxes for TIR-PUC, and Canadian income taxes for the TIR Entities.

A publicly-traded partnership is required to generate at least 90% of its gross income (as defined for federal income tax purposes) from certain qualifying sources. Income generated by TIR-PUC is excluded from this qualifying income calculation as a result of management’s election to treat the entity as a taxable corporation.    We believe that at least 90% of our gross income has been qualifying income since our initial public offering.

We evaluate uncertain tax positions for recognition and measurement in the consolidated financial statements. To recognize a tax position, we determine whether it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation, based on the technical merits of the position. A tax position that meets the more likely than not threshold is measured to determine the amount of benefit to be recognized in the consolidated financial statements. We had no material uncertain tax positions that required recognition in the consolidated financial statements at March 31, 2014.

Non-controlling Interest

The Partnership holds a controlling interest in several entities which are not wholly owned. The non-controlling interest shown in our condensed consolidated balance sheet at March 31, 2014 reflects the 49% membership interest in CES that is owned by SBG Energy Services, LLC and the 49.9% interest in each of the TIR Entities that is owned by affiliates of Cypress Holdings.  The net income attributable to non-controlling interest shown in our condensed consolidated statement of income reflects 49% of the net income of CES for the three months ended March 31, 2014 of $23 thousand and 49.9% of the net income of the TIR Entities for the period from January 21, 2014 through March 31, 2014, as adjusted in accordance with our partnership agreement, of $750 thousand.

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Related-Party Transactions (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Related Party Transaction [Line Items]
Receivable from Affiliate	$ 65,000		$ 0	[1]
Parent [Member]
Related Party Transaction [Line Items]
Distributions to/Advances from Parent	168,000	197,000
Omnibus Agreement [Member]
Related Party Transaction [Line Items]
Annual administrative fee	4,000,000
Pro-rated annual administrative fee	787,000
Affiliated Entity [Member]
Related Party Transaction [Line Items]
Receivable from Affiliate	852,000
Due to Affiliate	787,000
Expense from related party	60,000	137,000
SBG Disposal, LLC [Member]
Related Party Transaction [Line Items]
Ownership interest in subsidiary (in hundredths)	51.00%
Expense from related party	600,000
Rud Transportation, LLC [Member]
Related Party Transaction [Line Items]
Revenue recognized from related party	626,000	476,000
Due from related party	626,000		396,000
Alati Arnegard, LLC [Member]
Related Party Transaction [Line Items]
Ownership interest in subsidiary (in hundredths)	25.00%
Due from related party	141,000
Management fees revenue earned	$ 141,000

[1] Recast - Note 2

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Equity Compensation (Tables)

3 Months Ended

Mar. 31, 2014

Equity Compensation [Abstract]

Rollforward of LTIP Units

The following table sets forth the grants and forfeitures of Units under the LTIP for the period from January 21, 2014 (IPO date) through March 31, 2014:

	Units		Weighted Average Grant Date Fair Value/Unit
Units at January 1, 2014		-	$	-
Units Granted		116,843		17.22
Units at March 31, 2014		116,843	$	17.22