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 March 31, 2022

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 number 001-36674 

USD PARTNERS LP

(Exact Name of Registrant as Specified in Its Charter)

Delaware	30-0831007
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

811 Main Street, Suite 2800

Houston, Texas 77002

(Address of Principal Executive Offices) (Zip Code)

(Registrant’s Telephone Number, Including Area Code): (281) 291-0510

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

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Units Representing Limited Partner Interests	USDP	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  ☒    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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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	☐	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  ☒

As of May 2, 2022, there were 33,379,431 common units outstanding.

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Operations	1
	Consolidated Statements of Comprehensive Income	2
	Consolidated Statements of Cash Flows	3
	Consolidated Balance Sheets	4
	Consolidated Statements of Partners’ Capital	5
	Notes to the Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	44
Item 4.	Controls and Procedures	44
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 6.	Exhibits	45
SIGNATURES		47

Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q, or this “Report,” to “USD Partners,” “USDP,” “the Partnership,” “we,” “us,” “our,” or like terms refer to USD Partners LP and its subsidiaries.

Unless the context otherwise requires, all references in this Report to (i) “our general partner” refer to USD Partners GP LLC, a Delaware limited liability company; (ii) “USD” refers to US Development Group, LLC, a Delaware limited liability company, and where the context requires, its subsidiaries; (iii) “USDG” and “our sponsor” refer to USD Group LLC, a Delaware limited liability company and currently the sole direct subsidiary of USD; (iv) “Energy Capital Partners” refers to Energy Capital Partners III, LP and its parallel and co-investment funds and related investment vehicles; and (v) “Goldman Sachs” refers to The Goldman Sachs Group, Inc. and its affiliates.

Cautionary Note Regarding Forward-Looking Statements

This Report includes forward-looking statements, which are statements that frequently use words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “position,” “projection,” “should,” “strategy,” “target,” “will” and similar words. Although we believe that such forward-looking statements are reasonable based on currently available information, such statements involve risks, uncertainties and assumptions and are not guarantees of performance. Future actions, conditions or events and future results of operations may differ materially from those expressed in these forward-looking statements. Any forward-looking statement made by us in this Report speaks only as of the date on which it is made, and we undertake no obligation to publicly update any forward-looking statement. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from those in the forward-looking statements include: (1) the impact of the novel coronavirus (COVID-19) pandemic and related economic downturn and governmental regulations; (2) changes in general economic conditions and commodity prices, including as a result of the invasion of Ukraine by Russia and its regional and global ramifications; (3) the effects of competition, in particular, by pipelines and other terminal facilities; (4) shut-downs or cutbacks at upstream production facilities, refineries or other related businesses; (5) government regulations regarding oil production, including if the Alberta Government were to resume setting production limits; (6) the supply of, and demand for, terminal services for crude oil and biofuels; (7) the price and availability of debt and equity financing; (8) actions by third parties, including customers, lenders, construction-related services providers, and our sponsors; (9) hazards and operating risks that may not be covered fully by insurance; (10) disruptions due to equipment interruption or failure at our facilities or third-party facilities on which our business is dependent; (11) natural disasters, weather-related delays, casualty losses and other matters beyond our control; (12) changes in laws or regulations to which we are subject, including compliance with environmental and operational safety regulations, that may increase our costs or limit our operations; and (13) our ability to successfully identify and finance potential acquisitions, development projects and other growth opportunities. For additional factors that may affect our results, see “Risk Factors” and the other information included elsewhere in this Report and our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which is available to the public over the Internet at the website of the U.S. Securities and Exchange Commission, or SEC, (www.sec.gov) and at our website (www.usdpartners.com).

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                PART I—FINANCIAL INFORMATION 

Item 1.     Financial Statements

USD PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended March 31,
		2022		2021
	(unaudited; in thousands of US dollars, except per unit amounts)
Revenues
Terminalling services		$	28,185	$	28,105
Terminalling services — related party		655		1,103
Fleet leases — related party		912		984
Fleet services		—		24
Fleet services — related party		299		227
Freight and other reimbursables		78		156
Total revenues		30,129		30,599
Operating costs
Subcontracted rail services		3,252		3,141
Pipeline fees		6,060		6,046
Freight and other reimbursables		78		156
Operating and maintenance		3,034		2,832
Operating and maintenance — related party		2,206		2,090
Selling, general and administrative		3,223		3,056
Selling, general and administrative — related party		2,032		1,677
Depreciation and amortization		5,507		5,471
Total operating costs		25,392		24,469
Operating income		4,737		6,130
Interest expense		1,385		1,735
Gain associated with derivative instruments		(6,084)		(3,076)
Foreign currency transaction loss (gain)		47		(61)
Other income, net		(23)		(20)
Income before income taxes		9,412		7,552
Provision for income taxes		421		224
Net income		$	8,991	$	7,328
Net income attributable to limited partner interests		$	8,842	$	7,204
Net income per common unit (basic and diluted)		$	0.32	$	0.27
Weighted average common units outstanding		27,440		27,030

The accompanying notes are an integral part of these consolidated financial statements.

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USD PARTNERS LP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

		Three Months Ended March 31,
		2022		2021
	(unaudited; in thousands of US dollars)
Net income		$	8,991	$	7,328
Other comprehensive income — foreign currency translation		552		375
Comprehensive income		$	9,543	$	7,703

The accompanying notes are an integral part of these consolidated financial statements.

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USD PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended March 31,
	2022		2021
	(unaudited; in thousands of US dollars)
Cash flows from operating activities:
Net income	$	8,991	$	7,328
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,507		5,471
Gain associated with derivative instruments	(6,084)		(3,076)
Settlement of derivative contracts	(273)		(264)
Unit based compensation expense	1,237		1,512
Deferred income taxes	144		(18)
Amortization of deferred financing costs	272		207
Changes in operating assets and liabilities:
Accounts receivable	(5,060)		(402)
Accounts receivable — related party	154		(84)
Prepaid expenses, inventory and other assets	2,360		884
Other assets — related party	65		(394)
Accounts payable and accrued expenses	4,034		290
Accounts payable and accrued expenses — related party	906		(25)
Deferred revenue and other liabilities	(1,529)		1,212
Deferred revenue and other liabilities — related party	(16)		4
Net cash provided by operating activities	10,708		12,645
Cash flows from investing activities:
Additions of property and equipment	(135)		(483)
Net cash used in investing activities	(135)		(483)
Cash flows from financing activities:
Distributions	(3,518)		(3,183)
Payments for deferred financing costs	(13)		—
Vested phantom units used for payment of participant taxes	(1,052)		(857)
Repayments of long-term debt	(5,000)		(8,000)
Net cash used in financing activities	(9,583)		(12,040)
Effect of exchange rates on cash	21		(95)
Net change in cash, cash equivalents and restricted cash	1,011		27
Cash, cash equivalents and restricted cash — beginning of period	10,923		10,994
Cash, cash equivalents and restricted cash — end of period	$	11,934	$	11,021

The accompanying notes are an integral part of these consolidated financial statements.

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USD PARTNERS LP

CONSOLIDATED BALANCE SHEETS

	March 31, 2022		December 31, 2021
	(unaudited; in thousands of US dollars, except unit amounts)
ASSETS
Current assets
Cash and cash equivalents	$	4,495	$	3,747
Restricted cash	7,439		7,176
Accounts receivable, net	10,773		5,688
Accounts receivable — related party	2,817		2,953
Prepaid expenses	3,206		3,857
Inventory	1,667		3,027
Other current assets	1,567		129
Other current assets — related party	264		260
Total current assets	32,228		26,837
Property and equipment, net	131,446		133,102
Intangible assets, net	45,734		48,886
Operating lease right-of-use assets	4,214		5,658
Other non-current assets	8,855		4,881
Other non-current assets — related party	2,196		2,227
Total assets	$	224,673	$	221,591
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities
Accounts payable and accrued expenses	$	11,527	$	7,621
Accounts payable and accrued expenses — related party	2,393		1,486
Deferred revenue	5,850		6,889
Operating lease liabilities, current	3,285		4,674
Other current liabilities	8,011		7,223
Other current liabilities — related party	48		64
Total current liabilities	31,114		27,957
Long-term debt, net	161,275		166,003
Operating lease liabilities, non-current	778		793
Other non-current liabilities	6,297		7,751
Total liabilities	199,464		202,504
Commitments and contingencies
Partners’ capital
Common units (27,619,909 and 27,268,878 outstanding at March 31, 2022 and December 31, 2021, respectively)	21,835		16,355
General partner units (461,136 outstanding at March 31, 2022 and December 31, 2021)	2,119		2,029
Accumulated other comprehensive income	1,255		703
Total partners’ capital	25,209		19,087
Total liabilities and partners’ capital	$	224,673	$	221,591

The accompanying notes are an integral part of these consolidated financial statements.

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USD PARTNERS LP

THREE MONTHS CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

	Three Months Ended March 31,
	2022			2021
	Units	Amount		Units	Amount
	(unaudited; in thousands of US dollars, except unit amounts)
Common units
Beginning balance at January 1,	27,268,878	$	16,355	26,844,715	$	3,829
Common units issued for vested phantom units	351,031	(1,052)		379,726	(857)
Net income	—	8,842		—	7,204
Unit based compensation expense	—	1,149		—	1,425
Distributions	—	(3,459)		—	(3,129)
Ending balance at March 31,	27,619,909	21,835		27,224,441	8,472
General Partner units
Beginning balance at January 1,	461,136	2,029		461,136	1,892
Net income	—	149		—	124
Distributions	—	(59)		—	(54)
Ending balance at March 31,	461,136	2,119		461,136	1,962
Accumulated other comprehensive income
Beginning balance at January 1,		703			547
Cumulative translation adjustment		552			375
Ending balance at March 31,		1,255			922
Total partners’ capital at March 31,		$	25,209		$	11,356

The accompanying notes are an integral part of these consolidated financial statements.

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USD PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

USD Partners LP and its consolidated subsidiaries, collectively referred to herein as we, us, our, the Partnership and USDP, is a fee-based, growth-oriented master limited partnership formed in 2014 by US Development Group, LLC, or USD, through its wholly-owned subsidiary, USD Group LLC, or USDG. We were formed to acquire, develop and operate midstream infrastructure and complementary logistics solutions for crude oil, biofuels and other energy-related products. We generate substantially all of our operating cash flows from multi-year, take-or-pay contracts with primarily investment grade customers, including major integrated oil companies, refiners and marketers. Our network of crude oil terminals facilitate the transportation of heavy crude oil from Western Canada to key demand centers across North America. Our operations include railcar loading and unloading, storage and blending in onsite tanks, inbound and outbound pipeline connectivity, truck transloading, as well as other related logistics services. We also provide our customers with leased railcars and fleet services to facilitate the transportation of liquid hydrocarbons by rail. We do not generally take ownership of the products that we handle, nor do we receive any payments from our customers based on the value of such products. We may on occasion enter into buy-sell arrangements in which we take temporary title to commodities while in our terminals. We expect such arrangements to be at fixed prices where we do not take commodity price exposure.

A substantial amount of the operating cash flows related to the terminal services that we provide are generated from take-or-pay contracts with minimum monthly commitment fees and, as a result, are not directly related to actual throughput volumes at our crude oil terminals. Throughput volumes at our terminals are primarily influenced by the difference in price between Western Canadian Select, or WCS, and other grades of crude oil, commonly referred to as spreads, rather than absolute price levels. WCS spreads are influenced by several market factors, including the availability of supplies relative to the level of demand from refiners and other end users, the price and availability of alternative grades of crude oil, the availability of takeaway capacity, as well as transportation costs from supply areas to demand centers.

Basis of Presentation

Our accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim consolidated financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete consolidated financial statements. In the opinion of our management, they contain all adjustments, consisting only of normal recurring adjustments, which our management considers necessary to present fairly our financial position as of March 31, 2022, our results of operations for the three months ended March 31, 2022 and 2021, and our cash flows for the three months ended March 31, 2022 and 2021. We derived our consolidated balance sheet as of December 31, 2021 from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Our results of operations for the three months ended March 31, 2022 and 2021 should not be taken as indicative of the results to be expected for the full year due to fluctuations in the supply of and demand for crude oil and biofuels, timing and completion of acquisitions, if any, changes in the fair market value of our derivative instruments and the impact of fluctuations in foreign currency exchange rates. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Foreign Currency Translation

We conduct a substantial portion of our operations in Canada, which we account for in the local currency, the Canadian dollar. We translate most Canadian dollar denominated balance sheet accounts into our reporting currency, the U.S. dollar, at the end of period exchange rate, while most accounts in our statement of operations accounts are translated into our reporting currency based on the average exchange rate for each monthly period. Fluctuations in

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the exchange rates between the Canadian dollar and the U.S. dollar can create variability in the amounts we translate and report in U.S. dollars.

Within these consolidated financial statements, we denote amounts denominated in Canadian dollars with “C$” immediately prior to the stated amount.

US Development Group, LLC

USD and its affiliates are engaged in designing, developing, owning and managing large-scale multi-modal logistics centers and energy-related infrastructure across North America. USD is the indirect owner of our general partner through its direct ownership of USDG and is currently owned by Energy Capital Partners, Goldman Sachs and certain of USD’s management team.

2. NET INCOME PER LIMITED PARTNER INTEREST

We allocate our net income among our general partner and limited partners using the two-class method in accordance with applicable authoritative accounting guidance. Under the two-class method, we allocate our net income and any net income in excess of distributions to our limited partners, our general partner and the holder of the incentive distribution rights, or IDRs, according to the distribution formula for available cash as set forth in our partnership agreement. We allocate any distributions in excess of earnings for the period to our limited partners and general partner based on their respective proportionate ownership interests in us, as set forth in our partnership agreement after taking into account distributions to be paid with respect to the IDRs.

The formula for distributing available cash as set forth in our partnership agreement is as follows:

Distribution Targets	Portion of Quarterly Distribution Per Unit	Percentage Distributed to Limited Partners	Percentage Distributed to General Partner (including IDRs) (1)
Minimum Quarterly Distribution	Up to $0.2875	98%	2%
First Target Distribution	> $0.2875 to $0.330625	98%	2%
Second Target Distribution	> $0.330625 to $0.359375	85%	15%
Third Target Distribution	> $0.359375 to $0.431250	75%	25%
Thereafter	Amounts above $0.431250	50%	50%

(1)Calculated as if our general partner holds the original 2% general partner interest in us, which is currently 1.6%.

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We determined basic and diluted net income per limited partner unit as set forth in the following tables:

	For the Three Months Ended March 31, 2022
	Common Units		General Partner Units		Total
	(in thousands, except per unit amounts)
Net income attributable to general and limited partner interests in USD Partners LP (1)	$	8,842	$	149	$	8,991
Less: Distributable earnings (2)	3,633		3		3,636
Excess net income	$	5,209	$	146	$	5,355
Weighted average units outstanding (3)	27,440		461		27,901
Distributable earnings per unit (4)	$	0.13
Underdistributed earnings per unit (5)	0.19
Net income per limited partner unit (basic and diluted) (6)	$	0.32

(1)Represents net income allocated to each class of units based on the actual ownership of the Partnership during the period. There were no amounts attributed to the general partner for its incentive distribution rights.

(2)Represents the per unit distribution payable of $0.1235 per unit or $0.494 on an annualized basis for the three months ended March 31, 2022. Amounts presented for each class of units include a proportionate amount of the $167 thousand distributable to holders of the Equity classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Amended and Restated Long-Term Incentive Plan.

(3)Represents the weighted average units outstanding for the period.

(4)Represents the total distributable earnings divided by the weighted average number of units outstanding for the period.

(5)Represents the additional amount per unit necessary to distribute the excess net income for the period among our limited partners and our general partners according to the distribution formula for available cash as set forth in our partnership agreement.

(6)Our computation of net income per limited partner unit excludes the effects of 1,366,747 equity-classified phantom unit awards outstanding as they were anti-dilutive for the period presented.

	For the Three Months Ended March 31, 2021
	Common Units		General Partner Units		Total
	(in thousands, except per unit amounts)
Net income attributable to general and limited partner interests in USD Partners LP (1)	$	7,204	$	124	$	7,328
Less: Distributable earnings (2)	3,248		55		3,303
Excess net income	$	3,956	$	69	$	4,025
Weighted average units outstanding (3)	27,030		461		27,491
Distributable earnings per unit (4)	$	0.12
Underdistributed earnings per unit (5)	0.15
Net income per limited partner unit (basic and diluted)(6)	$	0.27

(1)Represents net loss allocated to each class of units based on the actual ownership of the Partnership during the period. There were no amounts attributed to the general partner for its incentive distribution rights.

(2)Represents the per unit distribution paid of $0.1135 per unit or $0.454 on an annualized basis for the three months ended March 31, 2021. Amounts presented for each class of units include a proportionate amount of the $161 thousand distributed to holders of the Equity-classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Amended and Restated Long-Term Incentive Plan.

(3)Represents the weighted average units outstanding for the period.

(4)Represents the total distributable earnings divided by the weighted average number of units outstanding for the period.

(5)Represents the additional amount per unit necessary to distribute the excess net income for the period among our limited partners and our general partners according to the distribution formula for cash as set forth in our partnership agreement.

(6)Our computation of net income per limited partner unit excludes the effects of 1,418,517 equity-classified phantom unit awards outstanding as they were anti-dilutive for the period presented.

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Subsequent to the current reporting period, effective April 1, 2022 our sponsor’s general partner interest in us was exchanged for a non-economic general partner interest, our sponsor’s IDRs were eliminated and we issued 5,751,136 common units to our sponsor in connection with our acquisition of the Hardisty South Terminal. Refer to Note 17. Subsequent Events — Drop Down Acquisition of Hardisty South Terminal for more information.

3. REVENUES

Disaggregated Revenues

We manage our business in two reportable segments: Terminalling services and Fleet services. Our segments offer different services and are managed accordingly. Our chief operating decision maker, or CODM, regularly reviews financial information about both segments in order to allocate resources and evaluate performance. As such, we have concluded that disaggregating revenue by reporting segments appropriately depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 12. Segment Reporting for our disaggregated revenues by segment. Additionally, the below tables summarize the geographic data for our revenues:

	Three Months Ended March 31, 2022
	U.S.		Canada		Total
	(in thousands)
Third party	$	7,336	$	20,927	$	28,263
Related party	$	1,866	$	—	$	1,866

	Three Months Ended March 31, 2021
	U.S.		Canada		Total
	(in thousands)
Third party	$	7,638	$	20,647	$	28,285
Related party	$	2,314	$	—	$	2,314

Remaining Performance Obligations

The transaction price allocated to the remaining performance obligations associated with our Terminal and Fleet services agreements as of March 31, 2022 are as follows for the periods indicated:

	Nine months ending December 31, 2022		2023		2024		2025		2026		Thereafter		Total
	(in thousands)
Terminalling Services (1) (2)	$	51,913	$	37,797	$	19,551	$	19,551	19,551		$	89,609	$	237,972
Fleet Services	896		—		—		—		—		—		896
Total	$	52,809	$	37,797	$	19,551	$	19,551	$	19,551	$	89,609	$	238,868

(1)A significant portion of our terminal services agreements are denominated in Canadian dollars. We have converted the remaining performance obligations associated with these Canadian dollar-denominated contracts using the year-to-date average exchange rate of 0.7895 U.S. dollars for each Canadian dollar at March 31, 2022.

(2)Includes fixed monthly minimum commitment fees per contracts and excludes constrained estimates of variable consideration for rate-escalations associated with an index, such as the consumer price index, as well as any incremental revenue associated with volume activity above the minimum volumes set forth within the contracts. Also excludes estimated constrained variable consideration included in certain of our terminal services agreements that is based on crude oil pricing index differentials.

We have applied the practical expedient that allows us to exclude disclosure of performance obligations that are part of a contract that has an expected duration of one year or less.

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Deferred Revenue

Our deferred revenue is a form of a contract liability and consists of amounts collected in advance from customers associated with their terminal and fleet services agreements and deferred revenues associated with make-up rights, which will be recognized as revenue when earned pursuant to the terms of our contractual arrangements. We currently recognize substantially all of the amounts we receive for minimum volume commitments as revenue when collected, since breakage associated with these make-up rights is currently approximately 99% based on our expectations around usage of these options. Accordingly, we had $0.1 million deferred revenues at March 31, 2022 for estimated breakage associated with the make-up rights options we granted to our customers. In addition, we had $1.4 million deferred revenues associated with make-up rights at December 31, 2021.

We also have deferred revenue that represents cumulative revenue that has been deferred due to tiered billing provisions. In such arrangements, revenue is recognized using a blended rate based on the billing tiers of the agreement, as the services are consistently provided throughout the duration of the contractual arrangement, which we included in “Other current liabilities” and “Other non-current liabilities” on our consolidated balance sheets.

The following table presents the amounts outstanding on our consolidated balance sheets and changes associated with the balance of our deferred revenue for the three months ended March 31, 2022:

	December 31, 2021		Cash Additions for Customer Prepayments		Balance Sheet Reclassification		Revenue Recognized		March 31, 2022
	(in thousands)
Deferred revenue (1)	$	6,889	$	5,850	$	—	$	(6,889)	$	5,850
Other current liabilities (2)	$	5,062	$	—	$	2,035	$	(457)	$	6,640
Other non-current liabilities (2)	$	7,648	$	561	$	(2,035)	$	—	$	6,174

(1)    Includes deferred revenue of $0.1 million and $1.4 million at March 31, 2022 and December 31, 2021, respectively, for estimated breakage associated with the make-up right options we granted our customers as discussed above.

(2)    Includes cumulative revenue that has been deferred due to tiered billing provisions included in certain of our Canadian dollar-denominated contracts, as discussed above. As such, the change in “Other current liabilities” has been increased by $78 thousand and “Other non-current liabilities” presented has been increased by $118 thousand due to the impact of the change in the end of period exchange rate between March 31, 2022 and December 31, 2021.

4. RESTRICTED CASH

We include in restricted cash amounts representing a cash account for which the use of funds is restricted by a facilities connection agreement among us and Gibson Energy Inc., or Gibson, that we entered into during 2014 in connection with the development of our Hardisty Terminal. The collaborative arrangement is further discussed in Note 9. Collaborative Arrangement.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within our consolidated balance sheets to the amounts shown in our consolidated statements of cash flows for the specified periods:

	March 31,
	2022		2021
	(in thousands)
Cash and cash equivalents	$	4,495	$	3,066
Restricted Cash	7,439		7,955
Total cash, cash equivalents and restricted cash	$	11,934	$	11,021

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5. PROPERTY AND EQUIPMENT

Our property and equipment is comprised of the following asset classifications as of the dates indicated:

	March 31, 2022		December 31, 2021		Estimated Depreciable Lives (Years)
	(in thousands)
Land	$	10,344	$	10,298	N/A
Trackage and facilities	130,257		129,242		10-30
Pipeline	32,735		32,735		20-30
Equipment	18,088		17,944		3-20
Furniture	68		67		5-10
Total property and equipment	191,492		190,286
Accumulated depreciation	(60,853)		(58,045)
Construction in progress (1)	807		861
Property and equipment, net	$	131,446	$	133,102

(1)The amounts classified as “Construction in progress” are excluded from amounts being depreciated. These amounts represent property that has not been placed into productive service as of the respective consolidated balance sheet date.

Depreciation expense associated with property and equipment totaled $2.3 million for each of the three months ended March 31, 2022 and 2021.

6. LEASES

Lessee

We have noncancellable operating leases for railcars, buildings, storage tanks, offices, railroad tracks, and land.

	Three Months Ended March 31, 2022
Weighted-average discount rate	5.9	%
Weighted average remaining lease term in years	2.51

Our total lease cost consisted of the following items for the dates indicated:

		Three Months Ended March 31,
		2022		2021
	(in thousands)
Operating lease cost		$	1,515	$	1,479
Short term lease cost		31		44
Variable lease cost		18		18
Sublease income		(1,281)		(1,348)
Total		$	283	$	193

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The maturity analysis below presents the undiscounted cash payments we expect to make each period for property that we lease from others under noncancellable operating leases as of March 31, 2022 (in thousands):

2022	$	3,382
2023	147
2024	115
2025	114
2026	117
Thereafter	505
Total lease payments	$	4,380
Less: imputed interest	(317)
Present value of lease liabilities	$	4,063

Lessor

We serve as an intermediary to assist our customers with obtaining railcars. In connection with our leasing of railcars from third parties, we simultaneously enter into lease agreements with our customers for noncancellable terms that are designed to recover our costs associated with leasing the railcars plus a fee for providing this service. In addition to these leases we also have lease income from storage tanks and lease income from our related party terminal services agreement associated with transloading renewable diesel at our West Colton Terminal that commenced in December 2021. Refer to Note 10. Transactions with Related Parties for additional discussion.

	Three Months Ended March 31,
	2022		2021
	(in thousands, except weighted average term)
Lease income (1)	$	2,486	$	2,185
Weighted average remaining lease term in years			3.58

(1)Lease income presented above includes lease income from related parties. Refer to Note 10. Transactions with Related Parties for additional discussion of lease income from a related party. In addition, lease income as discussed above totaling $1.6 million and $1.2 million for the three months ended March 31, 2022 and 2021, respectively, is included in “Terminalling services” and “Terminalling services — related party” revenues on our consolidated statements of operations.

The maturity analysis below presents the undiscounted future minimum lease payments we expect to receive from customers each period for property they lease from us under noncancellable operating leases as of March 31, 2022 (in thousands): 

2022	$	6,665
2023	2,656
2024	2,663
2025	2,656
2026	2,430
Total	$	17,070

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7. INTANGIBLE ASSETS

The composition, gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows as of the dates indicated:

	March 31, 2022		December 31, 2021
	(in thousands)
Carrying amount:
Customer service agreements	$	125,960	$	125,960
Other	106		106
Total carrying amount	126,066		126,066
Accumulated amortization:
Customer service agreements	(80,264)		(77,115)
Other	(68)		(65)
Total accumulated amortization	(80,332)		(77,180)
Total intangible assets, net	$	45,734	$	48,886

Amortization expense associated with intangible assets totaled $3.2 million for the three months ended March 31, 2022 and 2021.

8. DEBT

In November 2018, we amended and restated our revolving senior secured credit agreement, which we originally established in October 2014. We refer to the amended and restated senior secured credit agreement executed in November 2018 as the Credit Agreement and the original senior secured credit agreement as the Previous Credit Agreement. Our Credit Agreement amended and restated in its entirety our Previous Credit Agreement.

On October 29, 2021, we entered into an amendment to our Credit Agreement, referred to as the Credit Agreement, as amended, with a syndicate of lenders. The Credit Agreement, as amended, extends the maturity date of the agreement by one year. The aggregate borrowing capacity of the facility is $275 million and reflects the resignation of Citibank, N.A. as administrative agent and swing line lender under the facility and the appointment of Bank of Montreal as the successor administrative agent and swing line lender under the facility.

Our Credit Agreement, as amended, matures on November 2, 2023. Our Credit Agreement, as amended, provides us with the ability to request an additional one-year maturity date extension, subject to the satisfaction of certain conditions including consent of the lenders, and allows us the option to increase the maximum amount of credit available up to a total facility size of $390 million, subject to receiving increased commitments from lenders and satisfaction of certain conditions. The Credit Agreement, as amended, keeps the financial covenants substantially consistent with our Credit Agreement.

Our Credit Agreement, as amended, and any issuances of letters of credit are available for working capital, capital expenditures, general partnership purposes and continue the indebtedness outstanding under the Previous Credit Agreement. The Credit Agreement, as amended, includes an aggregate $20 million sublimit for standby letters of credit and a $20 million sublimit for swingline loans. Obligations under the Credit Agreement, as amended, are guaranteed by our restricted subsidiaries (as such term is defined therein) and are secured by a first priority lien on our assets and those of our restricted subsidiaries, other than certain excluded assets.

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Our long-term debt balances included the following components as of the specified dates:

	March 31, 2022		December 31, 2021
	(in thousands)
Credit Agreement, as amended	$	163,000	$	168,000
Less: Deferred financing costs, net	(1,725)		(1,997)
Total long-term debt, net	$	161,275	$	166,003

We determined the capacity available to us under the terms of our Credit Agreement, as amended, was as follows as of the specified dates:

	March 31, 2022		December 31, 2021
	(in millions)
Aggregate borrowing capacity under Credit Agreement, as amended	$	275.0	$	275.0
Less: Amounts outstanding under the Credit Agreement, as amended	163.0		168.0
Available under the Credit Agreement, as amended, based on capacity	$	112.0	$	107.0
Available under the Credit Agreement, as amended, based on covenants (1)	$	66.9	$	80.0

(1)    Pursuant to the terms of our Credit Agreement, as amended, our borrowing capacity, currently, is limited to 4.5 times our trailing 12-month consolidated EBITDA.

The weighted average interest rate on our outstanding indebtedness was 2.71% and 2.35% at March 31, 2022 and December 31, 2021, respectively, without consideration to the effect of our derivative contracts. In addition to the interest we incur on our outstanding indebtedness, we pay commitment fees of 0.375% on unused commitments, which rate will vary based on our consolidated net leverage ratio, as defined in our Credit Agreement, as amended. At March 31, 2022, we were in compliance with the covenants set forth in our Credit Agreement, as amended.

Interest expense associated with our outstanding indebtedness was as follows for the specified periods:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Interest expense on the Credit Agreement, as amended	$	1,113	$	1,528
Amortization of deferred financing costs	272		207
Total interest expense	$	1,385	$	1,735

9. COLLABORATIVE ARRANGEMENT

We entered into a facilities connection agreement in 2014 with Gibson under which Gibson developed, constructed and operates a pipeline and related facilities connected to our Hardisty Terminal. Gibson’s storage terminal is the exclusive means by which our Hardisty Terminal receives crude oil. Subject to certain limited exceptions regarding manifest train facilities, our Hardisty Terminal is the exclusive means by which crude oil from Gibson’s Hardisty storage terminal may be transported by rail. We remit pipeline fees to Gibson for the transportation of crude oil to our Hardisty Terminal based on a predetermined formula. Pursuant to our arrangement with Gibson, we incurred pipeline fees of $6.1 million and $6.0 million for the three months ended March 31, 2022 and 2021, respectively, which are presented as “Pipeline fees” in our consolidated statements of operations.

10. TRANSACTIONS WITH RELATED PARTIES

Nature of Relationship with Related Parties

USD is engaged in designing, developing, owning and managing large-scale multi-modal logistics centers and other energy-related infrastructure across North America. USD is also the sole owner of USDG and the ultimate

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parent of our general partner. USD is owned by Energy Capital Partners, Goldman Sachs and certain members of its management.

USDG is the sole owner of our general partner and at March 31, 2022, owns 11,557,090 of our common units representing a 41.2% limited partner interest in us. As of March 31, 2022, a value of up to $15.0 million of these common units were subject to a negative pledge supporting USDG’s revolving line of credit for working capital. USDG also provides us with general and administrative support services necessary for the operation and management of our business.

USD Partners GP LLC, our general partner, owns all 461,136 of our general partner units representing a 1.6% general partner interest in us, as well as all of our incentive distribution rights as of March 31, 2022. Pursuant to our partnership agreement, our general partner is responsible for our overall governance and operations. However, our general partner has no obligation to, does not intend to and has not implied that it would, provide financial support to or fund cash flow deficits of the Partnership.

USD Marketing LLC, or USDM, is a wholly-owned subsidiary of USDG organized to promote contracting for services provided by our terminals and to facilitate the marketing of customer products.

USD Terminals Canada II ULC, or USDTC II, is an indirect, wholly-owned Canadian subsidiary of USDG, organized for the purposes of pursuing expansion and other development opportunities associated with our Hardisty Terminal, pursuant to the Development Rights and Cooperation agreement between our wholly-owned subsidiary USD Terminals Canada ULC, or USDTC, and USDG. USDTC owns the legacy crude oil loading facility we refer to as the Hardisty Terminal. USDTC II completed construction of the Hardisty South expansion, or Hardisty South, which commenced operations in January 2019. Hardisty South, which has been owned and operated by USDTC II through March 31, 2022, added one and one-half 120-railcar unit trains of transloading capacity per day, or approximately 112,500 barrels per day, of takeaway capacity to the terminal by modifying the existing loading rack and building additional infrastructure and trackage.

USD Clean Fuels LLC, or USDCF, is a newly formed subsidiary of USD organized for the purpose of providing production and logistics solutions to the growing market for clean energy transportation fuels.

Omnibus Agreement

We are party to an omnibus agreement with USD, USDG and certain of their subsidiaries, or the Omnibus Agreement, including our general partner, pursuant to which we obtain and make payments for specified services provided to us and for out-of-pocket costs incurred on our behalf. We pay USDG, in equal monthly installments, the annual amount USDG estimates will be payable by us during the calendar year for providing services for our benefit. The Omnibus Agreement provides that this amount may be adjusted annually to reflect, among other things, changes in the scope of the general and administrative services provided to us due to a contribution, acquisition or disposition of assets by us or our subsidiaries, or for changes in any law, rule or regulation applicable to us, which affects the cost of providing the general and administrative services. We also reimburse USDG for any out-of-pocket costs and expenses incurred on our behalf in providing general and administrative services to us. This reimbursement is in addition to the amounts we pay to reimburse our general partner and its affiliates for certain costs and expenses incurred on our behalf for managing our business and operations, as required by our partnership agreement.

The total amounts charged to us under the Omnibus Agreement for the three months ended March 31, 2022 and 2021 was $2.0 million and $1.7 million, respectively, which amounts are included in “Selling, general and administrative — related party” in our consolidated statements of operations. We had a payable balance of $2.4 million and $1.4 million with respect to these costs at March 31, 2022 and December 31, 2021, respectively, included in “Accounts payable and accrued expenses — related party” in our consolidated balance sheets.

Marketing Services Agreement - Stroud Terminal

In connection with our purchase of the Stroud Terminal, we entered into a Marketing Services Agreement with USDM, or the Stroud Terminal MSA, in May 2017, whereby we granted USDM the right to market the

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capacity at the Stroud Terminal in excess of the original capacity of our initial customer in exchange for a nominal per barrel fee. USDM is obligated to fund any related capital costs associated with increasing the throughput or efficiency of the terminal to handle additional throughput. Upon expiration of our contract with the initial Stroud customer in June 2020, the same marketing rights now apply to all throughput at the Stroud Terminal in excess of the throughput necessary for the Stroud Terminal to generate Adjusted EBITDA that is at least equal to the average monthly Adjusted EBITDA derived from the initial Stroud customer during the 12 months prior to expiration. We also granted USDG the right to develop other projects at the Stroud Terminal in exchange for the payment to us of market-based compensation for the use of our property for such development projects. Any such development projects would be wholly-owned by USDG and would be subject to our existing right of first offer, or ROFO, with respect to midstream projects developed by USDG. Payments made under the Stroud Terminal MSA during the periods presented in this Report are discussed below under the heading “Related Party Revenue and Deferred Revenue.”

Marketing Services Agreement - West Colton Terminal

In June 2021, we entered into a new Terminal Services Agreement with USDCF that is supported by a minimum throughput commitment to USDCF from an investment-grade rated, refining customer as well as a performance guaranty from USD. The Terminal Services Agreement provides for the inbound shipment of renewable diesel on rail at our West Colton Terminal and the outbound shipment of the product on tank trucks to local consumers. The new Terminal Services Agreement has an initial term of five years and commenced on December 1, 2021. We have modified our existing West Colton Terminal so that it now has the capability to transload renewable diesel in addition to the ethanol that it has been transloading.

In exchange for the new Terminal Services Agreement at our West Colton Terminal with USDCF discussed above, we also entered into a Marketing Services Agreement in June 2021, or the West Colton MSA, with USDCF pursuant to which we agreed to grant USDCF marketing and development rights pertaining to future renewable diesel opportunities associated with the West Colton Terminal in excess of the initial renewable diesel Terminal Services Agreement simultaneously executed in June 2021 between us and USDCF. These rights entitle USDCF to market all additional renewable diesel opportunities at the West Colton Terminal during the initial term of the USDCF agreement, and following the initial term of that agreement, all renewable diesel opportunities at the West Colton Terminal in excess of the throughput necessary to generate Adjusted EBITDA for the West Colton Terminal that is at least equal to the average monthly Adjusted EBITDA derived from the initial USDCF agreement during the 12 months prior to expiration of that agreement’s initial five-year term. Pursuant to the West Colton MSA, USDCF will fund any related capital costs associated with increasing the throughput or efficiency of the terminal to handle additional renewable diesel opportunities. In addition, we granted USDCF the right to develop other renewable diesel projects at the West Colton Terminal in exchange for a per barrel fee covering our associated operating costs. Any such development projects would be wholly-owned by USD and would be subject to the ROFO with respect to midstream infrastructure developed by USD. There have been no payments made under the West Colton MSA during the periods presented in this Report.

Hardisty Terminal Services Agreement

We entered into a Terminal Services Agreement with USDTC II in 2019, whereby Hardisty South will provide terminal services for a third-party customer of our Hardisty Terminal for contracted capacity that exceeds the transloading capacity currently available. We incurred $2.1 million for the three months ended March 31, 2022 and 2021, which amounts are included in “Operating and maintenance expense — related party” in our consolidated statements of operations. These costs represent the same rate, on a per barrel basis, that we received as revenue from our third-party customer, which is included in “Terminalling Services” revenue in our consolidated statements of operations. Additionally, in conjunction with the agreement, we recorded a contract asset of $2.5 million at both March 31, 2022 and December 31, 2021 on our consolidated balance sheet in “Other current assets — related party” and “Other non-current assets — related party”, representing prepaid expense associated with this agreement due to tiered billing provisions in the related terminal services agreements.

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Hardisty Shared Facilities Agreement

USDTC facilitates the provision of services on behalf of USDTC II pursuant to the terms of a shared facilities agreement, which includes all subcontracted railcar loading, operating, maintenance, pipeline and management services for the entire Hardisty Terminal, including Hardisty South owned by USDTC II. USDTC passes through a proportionate amount of the cost of such services to USDTC II. Our financial statements only reflect the cost incurred by USDTC.

Contribution Agreement

On March 27, 2022, we entered into a Contribution, Conveyance and Assumption agreement, or the Contribution Agreement, with our sponsor to acquire 100% of the entities owning the Hardisty South Terminal assets from USDG as well as eliminate the IDRs and economic general partner interest of our Sponsor for a total consideration of $75.0 million in cash and approximately 5,751,136 common units representing limited partner interests in us. Refer to Note 17. Subsequent Events for further discussion.

Related Party Revenue and Deferred Revenue

We have agreements to provide terminal and fleet services for USDM with respect to our Hardisty Terminal and terminal services with respect to our Stroud Terminal, which also include reimbursement to us for certain out-of-pocket expenses we incur, discussed in more detail below. Additionally, as previously discussed, we also entered into a new Terminal Services Agreement at our West Colton Terminal with USDCF that became effective December 31, 2021.

In connection with our purchase of the Stroud Terminal, we also entered into a Marketing Services Agreement with USDM, as discussed above. Pursuant to the terms of the agreement, we receive a fixed amount per barrel from USDM in exchange for marketing the additional capacity available at the Stroud Terminal. Effective August 2021, upon the commencement of the contract changes associated with the successful completion of the DRU project, the existing customer elected to fully terminate the volume commitments attributable to USDM at the Stroud Terminal, and therefore effective August 2021, we are no longer receiving a fixed fee payment from USDM. However, the Marketing Services Agreement is still effective for any future customer contracts obtained by USDM at the Stroud Terminal.

We include amounts received pursuant to these arrangements as revenue in the table below under “Terminalling services — related party” in our consolidated statements of operations.

Additionally, we received revenue from USDM for the lease of 200 railcars pursuant to the terms of an existing agreement with us, which is included in the table below under “Fleet leases — related party” and “Fleet services — related party” and in our consolidated statements of operations.

Our related party revenues from USD and affiliates are presented below in the following table for the indicated periods:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Terminalling services — related party	$	655	$	1,103
Fleet leases — related party	912		984
Fleet services — related party	299		227
	$	1,866	$	2,314

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We had the following amounts outstanding with USD and affiliates on our consolidated balance sheets as presented below in the following table for the indicated periods:

	March 31, 2022		December 31, 2021
	(in thousands)
Accounts receivable — related party	$	2,817	$	2,953
Accounts payable and accrued expenses — related party (1)	$	42	$	63
Other current and non-current assets — related party (2)	$	2,460	$	2,487
Other current liabilities — related party (3)	$	48	$	64

(1)Does not include amounts payable to related parties associated with the Omnibus Agreement, as discussed above.

(2)Includes a contract asset associated with the Hardisty Terminal Services Agreement with USDTC II, as discussed above.

(3)Represents a contract liability associated with a lease agreement with USDM and cumulative revenue that has been deferred due to tiered billing provisions.

Cash Distributions

We paid the following aggregate cash distributions to USDG as a holder of our common units and to USD Partners GP LLC as sole holder of our general partner interest and IDRs.

Distribution Declaration Date	Record Date	Distribution Payment Date	Amount Paid to  USDG		Amount Paid to USD Partners GP LLC
			(in thousands)
January 26, 2022	February 9, 2022	February 18, 2022	$	1,398	$	56

11. COMMITMENTS AND CONTINGENCIES

From time to time, we may be involved in legal, tax, regulatory and other proceedings in the ordinary course of business. We do not believe that we are currently a party to any such proceedings that will have a material adverse impact on our financial condition or results of operations.

12. SEGMENT REPORTING

We manage our business in two reportable segments: Terminalling services and Fleet services. The Terminalling services segment charges minimum monthly commitment fees under multi-year take-or-pay contracts to load and unload various grades of crude oil into and from railcars, as well as fixed fees per gallon to transload ethanol and renewable diesel from railcars, including related logistics services. We also facilitate rail-to-pipeline shipments of crude oil. Our Terminalling services segment also charges minimum monthly fees to store crude oil in tanks that are leased to our customers. The Fleet services segment provides customers with railcars and fleet services related to the transportation of liquid hydrocarbons under multi-year, take-or-pay contracts. Corporate activities are not considered a reportable segment, but are included to present shared services and financing activities which are not allocated to our established reporting segments.

Our segments offer different services and are managed accordingly. Our CODM regularly reviews financial information about both segments in order to allocate resources and evaluate performance. Our CODM assesses segment performance based on the cash flows produced by our established reporting segments using Segment Adjusted EBITDA. Segment Adjusted EBITDA is a measure calculated in accordance with GAAP. We define Segment Adjusted EBITDA as “Net income (loss)” of each segment adjusted for depreciation and amortization, interest, income taxes, changes in contract assets and liabilities, deferred revenues, foreign currency transaction gains and losses and other items which do not affect the underlying cash flows produced by our businesses. As such, we have concluded that disaggregating revenue by reporting segments appropriately depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

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	Three Months Ended March 31, 2022
	Terminalling services		Fleet services		Corporate		Total
	(in thousands)
Revenues
Terminalling services	$	28,185	$	—	$	—	$	28,185
Terminalling services — related party	655		—		—		655
Fleet leases — related party	—		912		—		912
Fleet services	—		—		—		—
Fleet services — related party	—		299		—		299
Freight and other reimbursables	78		—		—		78
Total revenues	28,918		1,211		—		30,129
Operating costs
Subcontracted rail services	3,252		—		—		3,252
Pipeline fees	6,060		—		—		6,060
Freight and other reimbursables	78		—		—		78
Operating and maintenance	4,247		993		—		5,240
Selling, general and administrative	1,296		57		3,902		5,255
Depreciation and amortization	5,507		—		—		5,507
Total operating costs	20,440		1,050		3,902		25,392
Operating income (loss)	8,478		161		(3,902)		4,737
Interest expense	—		—		1,385		1,385
Gain associated with derivative instruments	—		—		(6,084)		(6,084)
Foreign currency transaction loss (gain)	98		—		(51)		47
Other income, net	(23)		—		—		(23)
Provision for income taxes	357		64		—		421
Net income	$	8,046	$	97	$	848	$	8,991

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	Three Months Ended March 31, 2021
	Terminalling services		Fleet services		Corporate		Total
	(in thousands)
Revenues
Terminalling services	$	28,105	$	—	$	—	$	28,105
Terminalling services — related party	1,103		—		—		1,103
Fleet leases — related party	—		984		—		984
Fleet services	—		24		—		24
Fleet services — related party	—		227		—		227
Freight and other reimbursables	124		32		—		156
Total revenues	29,332		1,267		—		30,599
Operating costs
Subcontracted rail services	3,141		—		—		3,141
Pipeline fees	6,046		—		—		6,046
Freight and other reimbursables	124		32		—		156
Operating and maintenance	3,924		998		—		4,922
Selling, general and administrative	1,019		92		3,622		4,733
Depreciation and amortization	5,471		—		—		5,471
Total operating costs	19,725		1,122		3,622		24,469
Operating income (loss)	9,607		145		(3,622)		6,130
Interest expense	—		—		1,735		1,735
Gain associated with derivative instruments	—		—		(3,076)		(3,076)
Foreign currency transaction loss (gain)	133		—		(194)		(61)
Other income, net	(20)		—		—		(20)
Provision for income taxes	197		27		—		224
Net income (loss)	$	9,297	$	118	$	(2,087)	$	7,328

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Segment Adjusted EBITDA

The following tables present the computation of Segment Adjusted EBITDA, which is a measure determined in accordance with GAAP, for each of our segments for the periods indicated:

		Three Months Ended March 31,
Terminalling Services Segment		2022		2021
	(in thousands)
Net income		$	8,046	$	9,297
Interest income (1)		(1)		(1)
Depreciation and amortization		5,507		5,471
Provision for income taxes		357		197
Foreign currency transaction loss (2)		98		133
Non-cash deferred amounts (3)		(1,225)		1,683
Segment Adjusted EBITDA		$	12,782	$	16,780

(1)    Represents interest income associated with our Terminalling Services segment that is included in “Other income, net” in our consolidated statements of operations.

(2)    Represents foreign exchange transaction amounts associated with activities between our U.S. and Canadian subsidiaries.

(3)    Represents the change in non-cash contract assets and liabilities associated with revenue recognized at blended rates based on tiered rate structures in certain of our customer contracts and deferred revenue associated with deficiency credits that are expected to be used in the future prior to their expiration. Amounts presented are net of the corresponding prepaid Gibson pipeline fee that will be recognized as expense concurrently with the recognition of revenue.

		Three Months Ended March 31,
Fleet Services Segment		2022		2021
	(in thousands)
Net income		$	97	$	118
Provision for income taxes		64		27
Segment Adjusted EBITDA		$	161	$	145

13. DERIVATIVE FINANCIAL INSTRUMENTS

Our net income, or loss, and cash flows are subject to fluctuations resulting from changes in interest rates on our variable rate debt obligations and from changes in foreign currency exchange rates, particularly with respect to the U.S. dollar and the Canadian dollar. We use interest rate derivative instruments, specifically swaps, on our variable rate debt and to manage the risks associated with market fluctuations in interest rates to reduce volatility in our cash flows. We have not historically designated, nor do we expect to designate, our derivative financial instruments as hedges of the underlying risk exposure. All of our financial instruments are employed in connection with an underlying asset, liability and/or forecasted transaction and are not entered into for speculative purposes.

Interest Rate Derivatives

In September 2020, we entered into an interest rate swap that was made effective as of August 2020. The interest rate swap is a five-year contract with a $150 million notional value that fixes our one-month LIBOR to 0.84% for the notional value of the swap agreement instead of the variable rate that we pay under our Credit Agreement, as amended. The swap settles monthly through the termination date in August 2025.

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Derivative Positions

We record all of our derivative financial instruments at their fair values in the line items specified below within our consolidated balance sheets, the amounts of which were as follows at the dates indicated:

	March 31, 2022		December 31, 2021
	(in thousands)
Other current assets	$	1,431	$	—
Other non-current assets	6,338		1,995
Other current liabilities	$	—	$	(583)
	$	7,769	$	1,412

We have not designated our derivative financial instruments as hedges of our interest rate exposure. As a result, changes in the fair value of these derivatives are recorded as “Loss (gain) associated with derivative instruments” in our consolidated statements of operations. The gains or losses associated with changes in the fair value of our derivative contracts do not affect our cash flows until the underlying contract is settled by making or receiving a payment to or from the counterparty. In connection with our derivative activities, we recognized the following amounts during the periods presented:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Gain associated with derivative instruments	$	(6,084)	$	(3,076)

We determine the fair value of our derivative financial instruments using third party pricing information that is derived from observable market inputs, which we classify as level 2 with respect to the fair value hierarchy.

The following table presents summarized information about the fair values of our outstanding interest rate contracts for the periods indicated:

					March 31, 2022		December 31, 2021
	Notional		Interest Rate Parameters		Fair Value		Fair Value
					(in thousands)
Swap Agreements
Swap maturing August 2025	$	150,000,000	0.84	%	$	7,769	$	1,412

14. PARTNERS’ CAPITAL

Our common units represent limited partner interests in us. The holders of common units are entitled to participate in partnership distributions and to exercise the rights and privileges available to limited partners under our partnership agreement.

Pursuant to the terms of the USD Partners LP Amended and Restated 2014 Long-Term Incentive Plan, which we refer to as the A/R LTIP, our phantom unit awards, or Phantom Units, granted to directors and employees of our general partner and its affiliates, which are classified as equity, are converted into our common units upon vesting. Equity-classified Phantom Units totaling 530,860 vested during the first three months in 2022, of which 351,031 were converted into our common units after 179,829 Phantom Units were withheld from participants for the payment of applicable employment-related withholding taxes. The conversion of these Phantom Units did not have any economic impact on Partners’ Capital, since the economic impact is recognized over the vesting period. Additional information and discussion regarding our unit based compensation plans is included below in Note 15. Unit Based Compensation.

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The board of directors of our general partner has adopted a cash distribution policy pursuant to which we intend to distribute at least the minimum quarterly distribution of $0.2875 per unit ($1.15 per unit on an annualized basis) on all of our units to the extent we have sufficient available cash after the establishment of cash reserves and the payment of our expenses, including payments to our general partner and its affiliates. The board of directors of our general partner may change our distribution policy at any time and from time to time. Our partnership agreement does not require us to pay cash distributions on a quarterly or other basis. The amount of distributions we pay under our cash distribution policy and the decision to make any distribution are determined by our general partner. For the quarter ended March 31, 2022, the board of directors of our general partner determined that we had sufficient available cash after the establishment of cash reserves and the payment of our expenses to distribute $0.1235 per unit on all of our units.

15. UNIT BASED COMPENSATION

Long-term Incentive Plan

In 2022 and 2021, the board of directors of our general partner, acting in its capacity as our general partner, approved the grant of 603,437 and 669,043 Phantom Units, respectively, to directors and employees of our general partner and its affiliates under our A/R LTIP. At March 31, 2022, we had 157,983 Phantom Units remaining available for issuance. The Phantom Units are subject to all of the terms and conditions of the A/R LTIP and the Phantom Unit award agreements, which are collectively referred to as the Award Agreements. Award amounts for each of the grants are generally determined by reference to a specified dollar amount based on an allocation formula which included a percentage multiplier of the grantee’s base salary, among other factors, converted to a number of units based on the closing price of one of our common units preceding the grant date, as determined by the board of directors of our general partner and quoted on the NYSE.

Phantom Unit awards generally represent rights to receive our common units upon vesting. However, with respect to the awards granted to directors and employees of our general partner and its affiliates domiciled in Canada, for each Phantom Unit that vests, a participant is entitled to receive cash for an amount equivalent to the closing market price of one of our common units on the vesting date. Each Phantom Unit granted under the Award Agreements includes an accompanying distribution equivalent right, or DER, which entitles each participant to receive payments at a per unit rate equal in amount to the per unit rate for any distributions we make with respect to our common units. The Award Agreements granted to employees of our general partner and its affiliates generally contemplate that the individual grants of Phantom Units will vest in four equal annual installments based on the grantee’s continued employment through the vesting dates specified in the Award Agreements, subject to acceleration upon the grantee’s death or disability, or involuntary termination in connection with a change in control of the Partnership or our general partner. Awards to independent directors of the board of our general partner and an independent consultant typically vest over a one year period following the grant date.

The following tables present the award activity for our Equity-classified Phantom Units:

	Director and Independent Consultant Phantom Units	Employee Phantom Units	Weighted-Average Grant Date Fair Value Per Phantom Unit
Phantom Unit awards at December 31, 2021	26,272	1,317,493	$	8.21
Granted	39,408	514,434	$	5.85
Vested	(26,272)	(504,588)	$	9.07
Forfeited	—	—	$	—
Phantom Unit awards at March 31, 2022	39,408	1,327,339	$	6.92

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	Director and Independent Consultant Phantom Units	Employee Phantom Units	Weighted-Average Grant Date Fair Value Per Phantom Unit
Phantom Unit awards at December 31, 2020	40,065	1,324,837	$	10.98
Granted	40,065	573,204	$	4.82
Vested	(40,065)	(517,514)	$	11.33
Forfeited	—	(2,075)	$	8.44
Phantom Unit awards at March 31, 2021	40,065	1,378,452	$	8.18

The following tables present the award activity for our Liability-classified Phantom Units:

	Director and Independent Consultant Phantom Units	Employee Phantom Units	Weighted-Average Grant Date Fair Value Per Phantom Unit
Phantom Unit awards at December 31, 2021	13,136	63,730	$	7.26
Granted	13,136	36,459	$	5.85
Vested	(13,136)	—	$	4.82
Phantom Unit awards at March 31, 2022	13,136	100,189	$	6.92

	Director and Independent Consultant Phantom Units	Employee Phantom Units	Weighted-Average Grant Date Fair Value Per Phantom Unit
Phantom Unit awards at December 31, 2020	13,136	59,284	$	10.58
Granted	13,136	41,138	$	4.82
Vested	(13,136)	—	$	10.15
Phantom Unit awards at March 31, 2021	13,136	100,422	$	7.88

The fair value of each Phantom Unit on the grant date is equal to the closing market price of our common units on the grant date. We account for the Phantom Unit grants to independent directors and employees of our general partner and its affiliates domiciled in Canada that are paid out in cash upon vesting, throughout the requisite vesting period, by revaluing the unvested Phantom Units outstanding at the end of each reporting period and recording a charge to compensation expense in “Selling, general and administrative” in our consolidated statements of operations and recognizing a liability in “Other current liabilities” in our consolidated balance sheets. With respect to the Phantom Units granted to consultants, independent directors and employees of our general partner and its affiliates domiciled in the United States, we amortize the initial grant date fair value over the requisite service period using the straight-line method with a charge to compensation expense in “Selling, general and administrative” in our consolidated statements of operations, with an offset to common units within the Partners’ Capital section of our consolidated balance sheet.

For the three months ended March 31, 2022 and 2021, we recognized $1.2 million and $1.5 million, respectively, of compensation expense associated with outstanding Phantom Units. As of March 31, 2022, we have unrecognized compensation expense associated with our outstanding Phantom Units totaling $9.5 million, which we expect to recognize over a weighted average period of 2.58 years. We have elected to account for actual forfeitures as they occur rather than using an estimated forfeiture rate to determine the number of awards we expect to vest.

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We made payments to holders of the Phantom Units pursuant to the associated DERs we granted to them under the Award Agreements as follows:

		Three Months Ended March 31,
		2022		2021
	(in thousands)
Equity-classified Phantom Units (1)		$	163	$	152
Liability-classified Phantom Units		9		8
Total		$	172	$	160

(1)    We reclassified $2 thousand for the three months ended March 31, 2021, to unit based compensation expense for DERs paid in relation to Phantom Units that have been forfeited. We had no reclassifications for the three months ended March 31, 2022

16. SUPPLEMENTAL CASH FLOW INFORMATION

The following table provides supplemental cash flow information for the periods indicated:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Cash paid for income taxes	$	533	$	286
Cash paid for interest	$	1,116	$	1,549
Cash paid for operating leases	$	1,838	$	1,566

Non-cash Investing Activities

For the three months ended March 31, 2022 and 2021, we had non-cash investing activities for capital expenditures for property and equipment that were financed through “Accounts payable and accrued expenses” as presented in the table below for the periods indicated:

	Three months ended March 31,
	2022		2021
	(in thousands)
Property and equipment financed through accounts payable and accrued expenses	$	(135)	$	136

There were no new right-of-use lease assets and associated liabilities recorded on our consolidated balance sheet as of March 31, 2022, representing non-cash activities resulting from either new or extended lease agreements. We recorded $37 thousand of right-of-use lease assets and the associated liabilities on our consolidated balance sheet as of March 31, 2021. See Note 6. Leases for further discussion.

17. SUBSEQUENT EVENTS

Distribution to Partners

On April 21, 2022, the board of directors of USD Partners GP LLC, acting in its capacity as our general partner, declared a quarterly cash distribution payable of $0.1235 per unit, or $0.494 per unit on an annualized basis, for the three months ended March 31, 2022. The distribution will be paid on May 13, 2022, to unitholders of record at the close of business on May 4, 2022. The distribution will include payment of $2.0 million to our public common unitholders and $1.5 million to USDG as a holder of our common units.

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Drop Down Acquisition of Hardisty South Terminal

On April 6, 2022, we completed the drop down acquisition of 100% of the entities owning the Hardisty South Terminal assets from USDG, exchanged our sponsor’s economic general partner interest in us for a non-economic general partner interest and eliminated our sponsor’s IDRs for a total consideration of $75.0 million in cash and 5,751,136 common units, that was made effective as of April 1, 2022. The cash portion was funded with borrowings from our Credit Agreement, as amended. In connection with these transactions, we entered into a technical amendment to our Credit Agreement, as amended to permit our acquisition of the Netherlands cooperative, which is the parent company of the company that owns the Hardisty South Terminal.

The drop down acquisition was determined to be a business combination of entities under common control and as such we will consolidate the financial information for the acquisition of the Hardisty South Terminal on a retrospective basis. As of April 6, 2022, our sponsor holds 17,308,226 common units, representing 51.9% of our total outstanding units.

In connection with the acquisition, the fixed fee portion of the expenses payable by us under the Omnibus Agreement was adjusted upward slightly to reimburse our general partner for costs associated with the operations of the Hardisty South Terminal. After giving effect to that adjustment, for the twelve months ending December 31, 2022, we estimate that the total fixed fee portion of expenses payable by us under the Omnibus Agreement will be approximately $3.7 million, which includes, among other items, compensation expense for all employees required to manage and operate our business. Please read the discussion under Part II, Item 8. Financial Statements and Supplementary Data, Note 13. Transactions with Related Parties in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 regarding reimbursements to our general partner under the Omnibus Agreement.

The following table presents unaudited pro forma consolidated financial information for the periods indicated as if the closing of our drop down acquisition of the Hardisty South Terminal had occurred as of January 1, 2021:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Total revenues	$	35,786	$	43,626
Net income	$	10,362	$	15,155

Credit Agreement, as amended

Subsequent, to March 31, 2022, we borrowed an additional $75.0 million under the terms of our existing $275 million Credit Agreement, as amended, which was used to finance the previously discussed acquisition of the Hardisty South Terminal. As of May 2, 2022, we had amounts outstanding of $238.0 million under our Credit Agreement, as amended and $37.0 million available for borrowing under the Credit Agreement, as amended based on capacity that is subject to certain covenants. Refer to Note 8. Debt for more information.

Pursuant to the terms of our Credit Agreement, as amended, our borrowing capacity currently is limited to 5.0 times our trailing 12-month consolidated EBITDA for the quarter in which a material acquisition occurs and the two quarters following a material acquisition, as defined in our Credit Agreement, as amended, after which time the covenant returns to 4.5 times our trailing 12-month consolidated EBITDA. Our acquisition of Hardisty South is treated as a material acquisition under the terms of our Credit Agreement, as amended. As a result, our borrowing capacity will be limited to 5.0 times our 12-month trailing consolidated EBITDA through December 31, 2022.

Derivative Financial Instrument Amendment

As a result of the previously discussed acquisition of the Hardisty South Terminal and the associated additional borrowings under our Credit Agreement, as amended, that occurred to finance the acquisition, on April 11, 2022, we terminated our existing interest rate swap and simultaneously entered into a new interest rate swap that was made effective as of April 19, 2022. The new interest rate swap is a five-year contract with a $175.0 million notional value that fixes the secured overnight financing rate, or SOFR, to 1.57% for the notional

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value of the swap agreement instead of the variable rate that we pay under our Credit Agreement, as amended. The swap settles monthly through the termination date in March 2027.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations is based on and should be read in conjunction with the unaudited consolidated financial statements and accompanying notes in “Item 1. Financial Statements” contained herein and our audited consolidated financial statements and accompanying notes included in “Item 8. Financial Statements and Supplementary Data” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Among other things, those consolidated financial statements include more detailed information regarding the basis of presentation for the following discussion and analysis. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in “Item 1A. Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and subsequent Quarterly Reports on Form 10-Q. Please also read the “Cautionary Note Regarding Forward-Looking Statements” following the table of contents in this Report.

We denote amounts denominated in Canadian dollars with “C$” immediately prior to the stated amount.

Overview

We are a fee-based, growth-oriented master limited partnership formed by our sponsor, USD, to acquire, develop and operate midstream infrastructure and complementary logistics solutions for crude oil, biofuels and other energy-related products. We generate substantially all of our operating cash flows from multi-year, take-or-pay contracts with primarily investment grade customers, including major integrated oil companies, refiners and marketers. Our network of crude oil terminals facilitates the transportation of heavy crude oil from Western Canada to key demand centers across North America. Our operations include railcar loading and unloading, storage and blending in onsite tanks, inbound and outbound pipeline connectivity, truck transloading, as well as other related logistics services. We also provide our customers with leased railcars and fleet services to facilitate the transportation of liquid hydrocarbons by rail.

We generally do not take ownership of the products that we handle nor do we receive any payments from our customers based on the value of such products. We may on occasion enter into buy-sell arrangements in which we take temporary title to commodities while in our terminals. We expect any such arrangements to be at fixed prices where we do not take any exposure to changes in commodity prices.

We believe rail will continue as an important transportation option for energy producers, refiners and marketers due to its unique advantages relative to other transportation means. Specifically, rail transportation of energy-related products provides flexible access to key demand centers on a relatively low fixed-cost basis with faster physical delivery, while preserving the specific quality of customer products over long distances.

USDG, a wholly-owned subsidiary of USD, and the sole owner of our general partner, is engaged in designing, developing, owning, and managing large-scale multi-modal logistics centers and energy-related infrastructure across North America. USDG’s solutions create flexible market access for customers in significant growth areas and key demand centers, including Western Canada, the U.S. Gulf Coast and Mexico. Among other projects, USDG is currently pursuing the development of a premier energy logistics terminal on the Houston Ship Channel with capacity for substantial tank storage, multiple docks (including barge and deepwater), inbound and outbound pipeline connectivity, as well as a rail terminal with unit train capabilities.

USDG completed an expansion project in January 2019 at the Partnership’s Hardisty Terminal, referred to herein as Hardisty South, which added one and one-half 120-railcar unit trains of transloading capacity per day, or approximately 112,500 barrels per day, or bpd. In April 2022, we acquired 100% of the entities owning the Hardisty South Terminal assets from USDG, exchanged our sponsor’s economic general partner interest in us for a non-economic general partner interest and eliminated our sponsor’s IDRs for a total consideration of $75.0 million in cash and 5,751,136 common units, that was made effective as of April 1, 2022. The acquisition of the Hardisty South Terminal increases the size, scale and growth capacity of the Partnership’s asset base, while optimizing operational and commercial synergies of the Hardisty Terminal in order to capitalize on the growth benefits

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associated with the Sponsor’s Diluent Recovery Unit, or DRU, program. For more information on our drop down acquisition of the Hardisty South Terminal, refer to Part I. Item 1. Financial Statements, Note 17. Subsequent Events of this Quarterly Report.

USD’s Diluent Recovery Unit and Port Arthur Terminal Projects

During 2021, USD, along with its joint venture partner, Gibson, successfully completed construction on and placed into service the DRU at the Hardisty Terminal, as a part of a long-term solution to transport heavier grades of crude oil produced in Western Canada by rail. USD also placed into service a new destination terminal in Port Arthur, Texas, or PAT. Refer to the Growth Opportunities for our Operations section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for further information.

Recent Developments

Market Update

Substantially all of our operating cash flows are generated from take-or-pay contracts and, as a result, are not directly related to actual throughput volumes at our crude oil terminals. Throughput volumes at our terminals are primarily influenced by the difference in price between Western Canadian Select, or WCS, and other grades of crude oil, commonly referred to as spreads, rather than absolute price levels. WCS spreads are influenced by several market factors, including the availability of supplies relative to the level of demand from refiners and other end users, the price and availability of alternative grades of crude oil, the availability of takeaway capacity, as well as transportation costs from supply areas to demand centers.

Impact of Current Market Events

Given that crude oil prices have recovered and are higher than pre-COVID levels, Canadian production that was temporarily shut-in due to COVID-19 has also returned to pre-COVID levels. Additionally, in January 2022, the Canadian Association of Petroleum Producers, or CAPP, announced that they are forecasting a $6 billion dollar increase in planned upstream oil and gas spending as compared to 2021 levels. The expected growth spending for 2022 would mark the second straight year of significant increases in investment as Canadian producers look to capitalize on stronger commodity prices due to rapidly growing global demand for natural gas and crude oil. In addition, the Natural Resources Minister for Canada recently announced that Canada has the production capacity to increase its 2022 oil and gas exports incrementally by 300,000 barrels per day in response to supply shortages brought on by the ongoing conflict in Ukraine.

However, recent events have led to lower than anticipated Canadian production levels including recent extreme cold weather events in Canada, which caused unplanned production outages that led to a reduction in supply. Additionally, in the fourth quarter of 2021, two new pipeline projects were placed into service, creating a one time demand events for line fill. Also, in the first quarter of 2022, Canadian producers entered into a maintenance cycle, reducing supply seeking egress from Western Canada. The combination of these specific supply and demand events jointly contributed to the record draw on inventories that began in December 2021 and continued through first quarter 2022, resulting in historically low inventories levels.

Despite the events discussed above and based on the forecasted production increases in Canada, we expect that inventory levels in the second half of 2022 will build back up to the higher levels that existed during the second half of 2021. This should drive pipeline apportionment levels higher, which we expect will lead to higher demand for a crude by rail egress solution. However the extent and duration of any increases in apportionment or inventory levels are difficult to predict, if such increases occur at all.

Another factor that may contribute to the demand for a crude by rail egress solution is the significant regulatory and legal obstacles that pipeline projects and existing pipelines experience in the U.S and Canada. For example, it was recently announced by Trans Mountain Corporation, or TMC, that the cost of the Trans Mountain Pipeline expansion project has nearly doubled and the timeline for completing the project has now been extended out further into 2023. This prompted the Canadian Government to announce that it is cutting off funding for the project and advised TMC to secure the necessary funding from public debt markets or financial institutions. The

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Canadian government does not plan to be the long-term owner of the pipeline and expects to launch a sale process in due course. As environmental, regulatory and political challenges to increase pipeline export capacity remain, crude by rail exports will remain a valuable egress solution.

In the long-term, as stated above, we expect demand for rail capacity at our terminals to continue to increase over the next several years and potentially longer if proposed pipeline developments do not meet currently planned timelines and regulatory or other challenges to pipeline projects persist. Our Hardisty and Casper terminals, with established capacity and scalable designs, are well-positioned as strategic outlets to meet takeaway needs as Western Canadian crude oil supplies continue to exceed available pipeline takeaway capacity. Also, as previously discussed, USD along with its partner, successfully completed construction of and placed into service a diluent recovery unit, or DRU, at the Hardisty Terminal, as a part of a long-term solution to transport heavier grades of crude oil produced in Western Canada by rail. Additionally, we believe our Stroud Terminal provides an advantageous rail destination for Western Canadian crude oil given the optionality provided by its connectivity to the Cushing hub and multiple refining centers across the United States. Rail also generally provides a greater ability to preserve the specific quality of a customer’s product relative to pipelines, providing value to a producer or refiner. We expect these advantages, including our origin-to-destination capabilities, to continue to result in long-term contract extensions and expansion opportunities across our terminal network.

How We Generate Revenue

We conduct our business through two distinct reporting segments: Terminalling services and Fleet services. We have established these reporting segments as strategic business units to facilitate the achievement of our long-term objectives, to assist in resource allocation decisions and to assess operational performance.

Terminalling Services

The terminalling services segment includes a network of strategically-located terminals that provide customers with railcar loading and/or unloading capacity, as well as related logistics services, for crude oil and biofuels. Substantially all of our cash flows are generated under multi-year, take-or-pay terminal services agreements that include minimum monthly commitment fees. We generally have no direct commodity price exposure, although fluctuating commodity prices could indirectly influence our activities and results of operations over the long term. We may on occasion enter into buy-sell arrangements in which we take temporary title to commodities while in our terminals. We expect any such agreements to be at fixed prices where we do not take commodity price exposure.

Our Hardisty Terminal is an origination terminal where we load into railcars various grades of Canadian crude oil received from Gibson’s Hardisty storage terminal. Our Hardisty Terminal can load up to two 120-railcar unit trains per day and consists of a fixed loading rack with approximately 30 railcar loading positions, a unit train staging area and loop tracks capable of holding five unit trains simultaneously.

Our Stroud Terminal is a crude oil destination terminal in Stroud, Oklahoma, which we use to facilitate rail-to-pipeline shipments of crude oil from our Hardisty Terminal to the crude oil storage hub located in Cushing, Oklahoma. The Stroud Terminal includes 76-acres with current unit train unloading capacity of approximately 50,000 Bpd, two onsite tanks with 140,000 barrels of capacity, one truck bay, and a 12-inch diameter, 17-mile pipeline with a direct connection to the crude oil storage hub in Cushing Oklahoma. Our Stroud Terminal was purchased in June 2017 and commenced operations in October 2017.

Our Casper Terminal is a crude oil storage, blending and railcar loading terminal. The terminal currently offers six storage tanks with 900,000 barrels of total capacity, unit train-capable railcar loading capacity in excess of 100,000 bpd, as well as truck transloading capacity. Our Casper Terminal is supplied with multiple grades of Canadian crude oil through a direct connection with the Express Pipeline. Additionally, the Casper Terminal has a connection from the Platte terminal, where it has access to other pipelines and can receive other grades of crude oil, including locally sourced Wyoming sour crude oil. The Casper Terminal can also receive volumes through one truck unloading station and is also equipped with one truck loading station. Additionally, to supplement the rail loading options from the terminal, we constructed an outbound pipeline connection from the Casper Terminal to the nearby

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Platte terminal located at the termination point of the Express pipeline that was placed into service in December 2019.

Our West Colton Terminal is a unit train-capable destination terminal that can transload up to 13,000 bpd of ethanol and renewable diesel received from producers by rail onto trucks to meet local demand in the San Bernardino and Riverside County-Inland Empire region of Southern California. The West Colton Terminal has 20 railcar offloading positions and four truck loading positions.

Fleet Services

We provide one of our customers with leased railcars and fleet services related to the transportation of liquid hydrocarbons by rail on multi-year, take-or-pay terms under a master fleet services agreement. We do not own any railcars. As of March 31, 2022, our railcar fleet consisted of 200 railcars, which we lease from a railcar manufacturer, all of which are coiled and insulated, or C&I, railcars. The weighted average remaining contract life on our railcar fleet is nine months as of March 31, 2022.

Under the master fleet services agreement, we provide customers with railcar-specific fleet services, which may include, among other things, the provision of relevant administrative and billing services, the repair and maintenance of railcars in accordance with standard industry practice and applicable law, the management and tracking of the movement of railcars, the regulatory and administrative reporting and compliance as required in connection with the movement of railcars, and the negotiation for and sourcing of railcars. Our customer typically pays us and our assignees monthly fees per railcar for these services, which include a component for fleet services.

Historically, we contracted with railroads on behalf of some of our customers to arrange for the movement of railcars from our terminals to the destinations selected by our customers. We were the contracting party with the railroads for those shipments and were responsible to the railroads for the related fees charged by the railroads, for which we were reimbursed by our customers. Both the fees charged by the railroads to us and the reimbursement of these fees by our customers are included in our consolidated statements of operations in the revenues and operating costs line items entitled “Freight and other reimbursables.”

Also, we have historically assisted our customers with procuring railcars to facilitate their use of our terminal services. Our wholly-owned subsidiary USD Rail LP has historically entered into leases with third-party manufacturers of railcars and financial firms, which it has then leased to customers. Although we expect to continue to assist our customers in obtaining railcars for their use transporting crude oil to or from our terminals, we do not intend to continue to act as an intermediary between railcar lessors and our customers as our existing lease agreements expire, are otherwise terminated, or are assigned to our existing customers. Should market conditions change, we could potentially act as an intermediary with railcar lessors on behalf of our customers again in the future.

How We Evaluate Our Operations

Our management uses a variety of financial and operating metrics to evaluate our operations. When we evaluate our consolidated operations and related liquidity, we consider these metrics to be significant factors in assessing our ability to generate cash and pay distributions and include: (i) Adjusted EBITDA and DCF; (ii) operating costs; and (iii) volumes. We define Adjusted EBITDA and DCF below. When evaluating our operations at the segment level, we evaluate using Segment Adjusted EBITDA. Refer to Part I. Item 1. Financial Statements, Note 12. Segment Reporting of this Quarterly Report.

Adjusted EBITDA and Distributable Cash Flow

We define Adjusted EBITDA as “Net cash provided by operating activities” adjusted for changes in working capital items, interest, income taxes, foreign currency transaction gains and losses, and other items which do not affect the underlying cash flows produced by our businesses. Adjusted EBITDA is a non-GAAP, supplemental financial measure used by management and external users of our financial statements, such as investors and commercial banks, to assess:

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•our liquidity and the ability of our business to produce sufficient cash flow to make distributions to our unitholders; and

•our ability to incur and service debt and fund capital expenditures.

We define Distributable Cash Flow, or DCF, as Adjusted EBITDA less net cash paid for interest, income taxes and maintenance capital expenditures. DCF does not reflect changes in working capital balances. DCF is a non-GAAP, supplemental financial measure used by management and by external users of our financial statements, such as investors and commercial banks, to assess:

•the amount of cash available for making distributions to our unitholders;

•the excess cash flow being retained for use in enhancing our existing business; and

•the sustainability of our current distribution rate per unit.

We believe that the presentation of Adjusted EBITDA and DCF in this Report provides information that enhances an investor’s understanding of our ability to generate cash for payment of distributions and other purposes. The GAAP measure most directly comparable to Adjusted EBITDA and DCF is “Net cash provided by operating activities.” Adjusted EBITDA and DCF should not be considered alternatives to “Net cash provided by operating activities” or any other measure of liquidity presented in accordance with GAAP. Adjusted EBITDA and DCF exclude some, but not all, items that affect “Net cash provided by operating activities,” and these measures may vary among other companies. As a result, Adjusted EBITDA and DCF may not be comparable to similarly titled measures of other companies.

The following table sets forth a reconciliation of “Net cash provided by operating activities,” the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA and DCF:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Reconciliation of Net cash provided by operating activities to Adjusted EBITDA and Distributable cash flow:
Net cash provided by operating activities	$	10,708	$	12,645
Add (deduct):
Amortization of deferred financing costs	(272)		(207)
Deferred income taxes	(144)		18
Changes in accounts receivable and other assets	2,481		(4)
Changes in accounts payable and accrued expenses	(4,940)		(265)
Changes in deferred revenue and other liabilities	1,545		(1,216)
Interest expense, net	1,384		1,734
Provision for income taxes	421		224
Foreign currency transaction loss (gain) (1)	47		(61)
Non-cash deferred amounts (2)	(1,225)		1,683
Adjusted EBITDA	10,005		14,551
Add (deduct):
Cash paid for income taxes	(533)		(286)
Cash paid for interest	(1,116)		(1,549)
Maintenance capital expenditures	—		(203)
Distributable cash flow	$	8,356	$	12,513

(1)    Represents foreign exchange transaction amounts associated with activities between our U.S. and Canadian subsidiaries.

(2)    Represents the change in non-cash contract assets and liabilities associated with revenue recognized at blended rates based on tiered rate structures in certain of our customer contracts and deferred revenue associated with deficiency credits that are expected to be used in the future prior to their expiration. Amounts presented are net of the corresponding prepaid Gibson pipeline fee that will be recognized as expense concurrently with the recognition of revenue.

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Adjusted EBITDA and DCF presented above for the three months ended March 31, 2022 include the impact of $0.5 million of expenses incurred during the period associated with our recent drop down acquisition of the Hardisty South Terminal assets from our Sponsor. Additionally, we expect to incur between approximately $2.0 million and $2.5 million of additional expenses during the second quarter of 2022 associated with the acquisition. Refer to Part I. Item 1. Financial Statements, Note 17. Subsequent Events of this Quarterly Report for more information.

Operating Costs

Our operating costs are comprised primarily of subcontracted rail services, pipeline fees, repairs and maintenance expenses, materials and supplies, utility costs, insurance premiums and lease costs for facilities and equipment. In addition, our operating expenses include the cost of leasing railcars from third-party railcar suppliers and the shipping fees charged by railroads, which costs are generally passed through to our customers. We expect our expenses to remain relatively stable, but they may fluctuate from period to period depending on the mix of activities performed during a period and the timing of these expenditures. We expect to incur additional operating costs, including subcontracted rail services and pipeline fees, when we handle additional volumes at our terminals.

Our management seeks to maximize the profitability of our operations by effectively managing both our operating and maintenance expenses. As our terminal facilities and related equipment age, we expect to incur regular maintenance expenditures to maintain the operating capabilities of our facilities and equipment in compliance with sound business practices, our contractual relationships and regulatory requirements for operating these assets. We record these maintenance and other expenses associated with operating our assets in “Operating and maintenance” costs in our consolidated statements of operations.

Volumes

The amount of Terminalling services revenue we generate depends on minimum customer commitment fees and the throughput volume that we handle at our terminals in excess of those minimum commitments. These volumes are primarily affected by the supply of and demand for crude oil, refined products and biofuels in the markets served directly or indirectly by our assets. Additionally, these volumes are affected by the spreads between the benchmark prices for these products, which are influenced by, among other things, the available takeaway capacity in those markets. Although customers at our terminals have committed to minimum monthly fees under their terminal services agreements with us, which will generate the majority of our Terminalling services revenue, our results of operations will also be affected by:

•our customers’ utilization of our terminals in excess of their minimum monthly volume commitments;

•our ability to identify and execute accretive acquisitions and commercialize organic expansion projects to capture incremental volumes; and

•our ability to renew contracts with existing customers, enter into contracts with new customers, increase customer commitments and throughput volumes at our terminals, and provide additional ancillary services at those terminals.

General Trends and Outlook

We expect our business to continue to be affected by the key trends and recent developments discussed in “Item 7. Management’s Discussion and Analysis of Financial Condition— Factors that May Impact Future Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. To the extent our underlying assumptions about or interpretations of available information prove to be incorrect, our actual results may vary materially from our expected results. The unprecedented nature of the COVID-19 pandemic, as well as the ongoing situation in Ukraine and their impact on world economic conditions and the volatility in the oil and natural gas markets have created increased uncertainty with respect to future conditions and our ability to accurately predict future results.

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Hardisty and Stroud Terminals Customer Contract Renewals and Expirations

In early April 2022 we completed the acquisition of 100% of the entities owning the Hardisty South Terminal assets from USDG. The new combined Hardisty Terminal, which includes our legacy Hardisty Terminal and the newly acquired Hardisty South Terminal, now has the designed takeaway capacity of three and one-half unit trains per day, or approximately 262,500 barrels per day. Approximately 80% of the capacity of the combined Hardisty Terminal is contracted through mid-2022; approximately 54% is contracted through mid-2023; approximately 31% is contracted through January 2024; and approximately 17% is contracted through mid-2031.

Impacts on Customer Contracts From 2021 DRU Conversion

As previously discussed, construction of USD’s DRU project was completed in July 2021 and was declared fully operational in December 2021. Effective August 2021, the maturity date of three terminalling services agreements that are with the existing DRU customer at our Hardisty Terminal were extended through mid-2031, representing approximately 17% of the combined Hardisty Terminal’s capacity. Due to the significantly longer contract tenor of the terminalling services agreements associated with the DRU volumes, contracted rates on an annual basis are lower as compared to the contracted rates associated with the historical, shorter-term, agreements, which results in lower cash flows to the Partnership on an annual basis, but support a higher net present value to the Partnership and provide a more predictable cash flow profile.

Also, effective August 2021, the existing DRU customer elected to reduce its volume commitments at the Stroud Terminal attributable to the Partnership by one-third of the previous commitment through June 2022, at which point the agreement will terminate with no renewal period. This agreement currently represents our sole third-party customer contract for our Stroud Terminal.

With respect to the contract changes that occurred during 2021 associated with the DRU conversion, including the reduced volume commitment at the Stroud Terminal and the lower rates attributable to the longer tenor agreements at our Hardisty Terminal, we expect an approximate $2.0 million adverse impact to our “Net cash provided by operating activities” for the second quarter of 2022 resulting from these contract changes as compared to the amounts recognized under the agreements prior to the changes in 2021.

Potential Future Contract Expirations

If not renewed or extended, approximately 26% of the combined Hardisty Terminal’s capacity will expire at the end of June 2022. In addition, the remaining contracted capacity at the Stroud Terminal will also expire at the end of June 2022, if not renewed or extended. Also, certain of the terminalling services agreements at our Hardisty Terminal that expire in mid-2023 include a tiered rate structure that includes rate decreases that occur annually on July 1st of each year throughout the term of the agreement.

Management is focused on renewing, extending or replacing the agreements that are set to expire at the Hardisty and Stroud Terminals in mid-2022 and mid-2023 with new, multi-year take or pay commitments and is actively engaging with customers. Given current and expected market conditions, management believes that we will be able to renew and extend the agreements that are expiring at the end of the second quarter of 2022, sometime during the second half of 2022. Additionally, management believes that the lower utilization at the Stroud Terminal as a result of successful completion of the DRU project will be short-term in nature, and will allow the Partnership the opportunity to offer terminalling services to other customers that may be in need of access to the numerous markets connected to the Cushing oil hub. However, the timing of such renewals, as well as the expected contracted rates are uncertain and difficult to predict, if such renewals occur at all. If and to the extent we are unable to renew, extend or replace our customer agreements at the Hardisty and Stroud Terminals, our revenue, cash flows from operating activities and Adjusted EBITDA would be materially adversely impacted.

Potential Impact of Hardisty, Stroud and West Colton Deficiency Credit Usage by Our Customers

As previously discussed, customers of our Hardisty, Stroud and West Colton Terminals are obligated to pay a minimum monthly commitment fee for the capacity to load an allotted number of unit trains, representing a specified number of barrels per month. If a customer loads fewer unit trains than its allotted amount in any given month, that

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customer will receive a credit for up to 12 months, also referred to as a deficiency credit. This credit may be used to offset fees on throughput volumes in excess of the customer’s minimum monthly commitments in future periods to the extent capacity is available for the excess volume. Additionally, we could incur incremental costs associated with loading the additional trains for our customers if they have and use their accrued deficiency credits, but such costs are not expected to be material. As of December 31, 2021, we deferred revenues of $1.4 million that were associated with the expected usage of the deficiency credits during 2022. Based on current circumstances and conversations with our customers, as of March 31, 2022, we deferred revenues of $0.1 million associated with the expected future usage of deficiency credits.

Factors Affecting the Comparability of Our Financial Results

The comparability of our current financial results in relation to prior periods are affected by the factors described below.

Impact of Hardisty and Stroud Terminals Contract Changes

As a result of the successful commencement of the DRU as previously discussed, effective August 1, 2021, the maturity date of three terminal services agreements that are with the existing DRU customer at our Hardisty Terminal were extended through mid-2031. Due to the significantly longer contract tenor of the terminalling services agreements associated with the DRU volumes, contracted rates on an annual basis are lower as compared to the contracted rates associated with the historical, shorter-term, agreements, which results in lower cash flows to the Partnership on an annual basis, but support a higher net present value to the Partnership and provide a more predictable cash flow profile. Additionally, effective August 1, 2021, the existing DRU customer elected to reduce its volume commitments at the Stroud Terminal attributable to the Partnership by one-third of the previous commitment through June 2022, at which point the agreement will terminate with no renewal period. The agreement currently represents our sole third-party customer contract for our Stroud Terminal. For further discussion of the impacts of these contract changes on our financial results, refer to Results of Operations — By Segment, Terminalling Services below.

West Colton Terminal Customer Contracts

Our West Colton Terminal receives fixed fees per gallon of ethanol transloaded at our terminal pursuant to a terminalling services agreement with one of the world’s largest producers of biofuels. Effective January 2022, we entered into a new five-year agreement with the existing West Colton ethanol customer that has a minimum monthly throughput commitment. This new agreement replaced the previous short-term agreement at the terminal that had been in place since July 2009. Under this new agreement, our customer is obligated to pay the greater of a minimum monthly commitment fee or a throughput fee based on the actual volume of ethanol loaded at our West Colton Terminal. If the customer loads fewer volumes than its allotted amount in any given month, that customer will receive a credit for up to six months, which may be used to offset fees on throughput volumes in excess of its minimum monthly commitments in future periods, to the extent capacity is available for the excess volume. This contract is expected to add incremental “Net cash provided by operating activities” and Adjusted EBITDA of approximately $1.0 million to $1.5 million per year, subject to changes in expected throughput.

Additionally, in June 2021, we entered into a new terminalling services agreement with USD Clean Fuels LLC, or USDCF, a newly formed subsidiary of USD, that is supported by a minimum throughput commitment to USDCF from an investment-grade rated, refining customer as well as a performance guaranty from USD. The terminalling services agreement provides for the inbound shipment of renewable diesel on rail at our West Colton Terminal and the outbound shipment of the product on tank trucks to local consumers. The new terminalling services agreement has an initial term of five years and commenced on December 1, 2021 and is expected to add approximately $2.0 million per year of incremental “Net cash provided by operating activities” and Adjusted EBITDA over the five-year term of the agreement. We have modified our existing West Colton Terminal so that it now has the capability to transload renewable diesel in addition to the ethanol that it has been transloading.

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RESULTS OF OPERATIONS

We conduct our business through two distinct reporting segments: Terminalling services and Fleet services. We have established these reporting segments as strategic business units to facilitate the achievement of our long-term objectives, to aid in resource allocation decisions and to assess operational performance.

The following table summarizes our operating results by business segment and corporate charges for each of the periods indicated:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Operating income (loss)
Terminalling services	$	8,478	$	9,607
Fleet services	161		145
Corporate and other	(3,902)		(3,622)
Total operating income	4,737		6,130
Interest expense	1,385		1,735
Gain associated with derivative instruments	(6,084)		(3,076)
Foreign currency transaction loss (gain)	47		(61)
Other income, net	(23)		(20)
Provision for income taxes	421		224
Net income	$	8,991	$	7,328

Summary Analysis of Operating Results

Changes in our operating results for the three months ended March 31, 2022, as compared with our operating results for the three months ended March 31, 2021, were primarily driven by:

•activities associated with our Terminalling services business including:

–lower revenue at our Stroud Terminal associated with a decrease in contracted volume commitments at the terminal that became effective August 2021 as discussed in more detail below, partially offset by recognizing previously deferred revenue in the current quarter associated with the make-up right options we granted to our customers as compared to a deferral of revenue in the prior year period associated with make-up right options;

–lower storage revenue generated by our Casper Terminal associated with the end of one of our customer contracts that occurred in September 2021; and

–higher revenue at our West Colton Terminal due to the commencement of the renewable diesel contract that occurred in December 2021.

•a decrease in interest expense primarily due to lower interest rates coupled with a lower weighted average balance of debt outstanding; and

•higher non-cash gains associated with increases in the fair value of our interest rate derivatives resulting from increases in the interest rate index upon which the derivative values are based in 2022 as compared to 2021.

A comprehensive discussion of our operating results by segment is presented below.

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RESULTS OF OPERATIONS — BY SEGMENT

TERMINALLING SERVICES

The following table sets forth the operating results of our Terminalling services business and the approximate average daily throughput volumes of our terminals for the periods indicated:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Revenues
Terminalling services	$	28,840	$	29,208
Freight and other reimbursables	78		124
Total revenues	28,918		29,332
Operating costs
Subcontracted rail services	3,252		3,141
Pipeline fees	6,060		6,046
Freight and other reimbursables	78		124
Operating and maintenance	4,247		3,924
Selling, general and administrative	1,296		1,019
Depreciation and amortization	5,507		5,471
Total operating costs	20,440		19,725
Operating income	8,478		9,607
Foreign currency transaction loss	98		133
Other income, net	(23)		(20)
Provision for income taxes	357		197
Net income	$	8,046	$	9,297
Average daily terminal throughput (bpd)	84,125		97,114

Three months ended March 31, 2022 compared with three months ended March 31, 2021

Terminalling Services Revenue

Revenue generated by our Terminalling services segment decreased $0.4 million to $28.9 million for the three months ended March 31, 2022, as compared with $29.3 million for the three months ended March 31, 2021. This decrease was primarily attributable to lower revenues at our Stroud Terminal in the three months ended March 31, 2022 due to the decrease in contracted volume commitments that became effective in August 2021, as discussed above in Factors Affecting the Comparability of our Financial Results. Partially offsetting the decrease in our Stroud Terminal revenues was the recognition of previously deferred revenues that occurred in the current quarter associated with the make-up right options we granted our customers, as compared to a deferral of revenue associated with make-up right options that occurred in the prior year period. Storage revenues at our Casper Terminal also decreased in the current quarter as compared to the prior year period due to the conclusion of one of our customer contracts that occurred in September 2021. Partially offsetting this decrease was an increase in revenue at our West Colton Terminal during the first quarter of 2022 due to the commencement of the renewable diesel contract that occurred in December 2021.

Our average daily terminal throughput decreased 12,989 bpd to 84,125 bpd for the three months ended March 31, 2022, as compared with 97,114 bpd for the three months ended March 31, 2021. Throughput at our Stroud Terminal decreased for the first quarter of 2022 as compared to the first quarter of 2021 due to the previously discussed decrease contracted volume commitments. Partially offsetting this decrease was an increase in throughput

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volumes at our West Colton Terminal due primarily to the commencement of our new renewable diesel agreement. In addition, throughput volumes at our Hardisty and Casper terminals increased in 2022, due primarily to increased activity by our customers at these terminals compared to the same period during the prior year. Our terminalling services revenues are recognized based upon the contractual terms set forth in our agreements that contain primarily “take-or-pay” provisions, where we are entitled to the payment of minimum monthly commitment fees from our customers, which are recognized as revenue as we provide terminal services. Increases in the average daily terminal throughput activity usually only affect revenue to the extent such amounts are in excess of the minimum monthly committed volumes. However, increases in throughput activity do increase the variable operating costs associated with our terminals.

Our terminalling services revenue for the three months ended March 31, 2022, would not have materially changed if the average exchange rate for the Canadian dollar in relation to the U.S. dollar for the three months ended March 31, 2022, was the same as the average exchange rate for the three months ended March 31, 2021. The average exchange rate for the Canadian dollar in relation to the U.S. dollar was 0.7895 for the three months ended March 31, 2022 as compared with 0.7897 for the three months ended March 31, 2021.

Operating Costs

The operating costs of our Terminalling services segment increased $0.7 million to $20.4 million for the three months ended March 31, 2022, as compared with $19.7 million for the three months ended March 31, 2021. The increase is primarily attributable to higher operating and maintenance costs and higher selling, general and administrative costs for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021.

Our terminalling services operating costs for the three months ended March 31, 2022, would not have significantly changed if the average exchange rate for the Canadian dollar in relation to the U.S. dollar for the three months ended March 31, 2022, was the same as the average exchange rate for the three months ended March 31, 2021.

Operating and maintenance. Operating and maintenance expense increased $0.3 million to $4.2 million for the three months ended March 31, 2022, as compared with $3.9 million for the three months ended March 31, 2021. The increase is primarily due to increased operational supplies and utilities costs at the Hardisty Terminal due primarily to increased throughput volumes and higher fuel costs.

Selling, general and administrative. Selling, general and administrative expense increased $0.3 million to $1.3 million for the three months ended March 31, 2022, as compared with $1.0 million for the three months ended March 31, 2021. The increase is primarily due to slightly higher costs allocated to us associated with the management and operation of our terminals.

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FLEET SERVICES

The following table sets forth the operating results of our Fleet services segment for the periods indicated:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Revenues
Fleet leases	$	912	$	984
Fleet services	299		251
Freight and other reimbursables	—		32
Total revenues	1,211		1,267
Operating costs
Freight and other reimbursables	—		32
Operating and maintenance	993		998
Selling, general and administrative	57		92
Total operating costs	1,050		1,122
Operating income	161		145
Provision for income taxes	64		27
Net income	$	97	$	118

Three months ended March 31, 2022 compared with the three months ended March 31, 2021

The underlying business activities associated with our Fleet services segment have remained relatively constant for the three months ended March 31, 2022, as compared with the three months ended March 31, 2021. As a result, we have experienced only modest changes in the operating revenues and operating costs associated with this business. We expect only modest changes in the operating results of our fleet services business for the near future.

CORPORATE ACTIVITIES

The following table sets forth our corporate charges for the periods indicated:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Operating costs
Selling, general and administrative	$	3,902	$	3,622
Operating loss	(3,902)		(3,622)
Interest expense	1,385		1,735
Gain associated with derivative instruments	(6,084)		(3,076)
Foreign currency transaction gain	(51)		(194)
Net income (loss)	$	848	$	(2,087)

Three months ended March 31, 2022 compared with the three months ended March 31, 2021

Our income from corporate activities increased $2.9 million to $0.8 million for the three months ended March 31, 2022, as compared to a net loss of $2.1 million for the three months ended March 31, 2021.

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Our corporate selling, general and administrative expenses increased $0.3 million to $3.9 million for the three months ended March 31, 2022 as compared with the three months ended March 31, 2021. The increase is primarily due to increased legal and consulting fees incurred during the first quarter of 2022 related to our acquisition of the Hardisty South Terminal assets from our Sponsor. For more information on our drop down acquisition of the Hardisty South Terminal, refer to Part I. Item 1. Financial Statements, Note 17. Subsequent Events of this Quarterly Report.

Our costs for interest expense decreased $0.4 million to $1.4 million for the three months ended March 31, 2022, as compared with the same period in 2021, primarily due to a decrease in interest rates we were charged under our Credit Agreement, as amended during the three months ended March 31, 2022 coupled with a lower weighted average balance of debt outstanding, as compared to the same period in 2021. In addition, we had a non-cash gain of $6.1 million recognized on our interest rate derivatives for the three months ended March 31, 2022, as compared to a non-cash gain of $3.1 million for the same period in 2021.

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LIQUIDITY AND CAPITAL RESOURCES

Our principal liquidity requirements include:

•financing current operations;

•servicing our debt;

•funding capital expenditures, including potential acquisitions and the costs to construct new assets; and

•making distributions to our unitholders.

We have historically financed our operations with cash generated from our operating activities, borrowings under our Credit Agreement, as amended and loans from our sponsor.

Liquidity Sources

We expect our ongoing sources of liquidity to include borrowings under our Credit Agreement, as amended, issuances of debt securities and additional partnership interests as well as cash generated from our operating activities. We believe that cash generated from these sources will be sufficient to meet our ongoing working capital and capital expenditure requirements and to make quarterly cash distributions at current levels for the next 12 months following the filing of this Report.

For information regarding our Credit Agreement, as amended, please see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Credit Agreement in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and Part I. Item 1. Financial Statements, Note 8. Debt of this Quarterly Report.

The following table presents our available liquidity as of the dates indicated:

	March 31, 2022		December 31, 2021
	(in millions)
Cash and cash equivalents (1)	$	4.5	$	3.7
Aggregate borrowing capacity under the Credit Agreement, as amended	275.0		275.0
Less: Amounts outstanding under Credit Agreement, as amended	163.0		168.0
Available liquidity based on Credit Agreement, as amended capacity	$	116.5	$	110.7
Available liquidity based on Credit Agreement, as amended covenants (2)	$	71.4	$	83.7

(1)    Excludes amounts that are restricted pursuant to our collaborative agreement with Gibson.

(2)    Pursuant to the terms of our Credit Agreement, as amended, our borrowing capacity is limited to 4.5 times (5.0 times for the two quarters following a material acquisition) our trailing 12-month consolidated EBITDA which equates to $66.9 million and $80.0 million of borrowing capacity available at March 31, 2022 and December 31, 2021, respectively. Our acquisition of Hardisty South, which was completed in April 2022, is treated as a material acquisition under the terms of our Credit Agreement, as amended. As a result, our borrowing capacity will be limited to 5.0 times our 12-month trailing consolidated EBITDA through December 31, 2022.

On April 6, 2022, we completed the drop down acquisition of 100% of the entities owning the Hardisty South Terminal assets from USDG, exchanged our sponsor’s economic general partner interest in us for a non-economic general partner interest and eliminated our sponsor’s IDRs for a total consideration of $75.0 million in cash and 5,751,136 common units, that was made effective as of April 1, 2022. The cash portion was funded with borrowings under our Credit Agreement, as amended. As such, we had outstanding borrowings of $238.0 million as of May 2, 2022 and available liquidity based on Credit Agreement, as amended capacity of $37.0 million, subject to our continued compliance with financial covenants.

Energy Capital Partners must approve any additional issuances of equity by us, and such determinations may be made free of any duty to us or our unitholders. Members of our general partner’s board of directors appointed by Energy Capital Partners must also approve the incurrence by us of additional indebtedness or refinancing outside of our existing indebtedness that is not in the ordinary course of business.

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Cash Flows

The following table and discussion summarize the cash flows associated with our operating, investing and financing activities for the periods indicated:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Net cash provided by (used in):
Operating activities	$	10,708	$	12,645
Investing activities	(135)		(483)
Financing activities	(9,583)		(12,040)
Effect of exchange rates on cash	21		(95)
Net change in cash, cash equivalents and restricted cash	$	1,011	$	27

Operating Activities

Net cash provided by operating activities decreased $1.9 million to $10.7 million for the three months ended March 31, 2022, as compared with $12.6 million for the three months ended March 31, 2021. The decrease in net cash provided by operating activities is primarily attributable to the changes in cash flow derived from our operating results as discussed above in Results of Operations. While our net income for the three months ended March 31, 2022 was more than our net income for the same period in 2021, the net income from 2022 included a significant amount of non-cash gains that increase our net income but did not increase cash flow, such as our higher non-cash gain associated with derivative instruments in 2022 as compared to the non-cash derivative gain we recognized in 2021. The net change in net cash provided by operating activities was also impacted by the timing of receipts and payments on accounts receivable, accounts payable and deferred revenue balances.

Investing Activities

Net cash used in investing activities decreased to $0.1 million for the three months ended March 31, 2022 as compared to $0.5 million for the three months ended March 31, 2021 primarily due to permitting costs incurred in the first quarter of 2021 associated with expansion opportunities at our West Colton Terminal with no similar costs incurred in the first three months of 2022.

Financing Activities

Net cash used in financing activities decreased to $9.6 million for the three months ended March 31, 2022 as compared with $12.0 million for the three months ended March 31, 2021. Our payments on our long-term debt during the three months ended March 31, 2022 were $3.0 million lower than the net payments during the three months ended March 31, 2021. The decrease in cash used for financing activities associated with our debt repayments was partially offset with a slight increase in cash paid for distributions and participant withholding taxes associated with vested Phantom Units during the three months ended March 31, 2022, as compared to the same period in 2021.

Cash Requirements

Our primary requirements for cash are: (1) financing current operations, (2) servicing our debt, (3) funding capital expenditures, including potential acquisitions and the costs to construct new assets, and (4) making distributions to our unitholders. We expect to fund future capital expenditures from cash on our balance sheet, cash flow generated from our operating activities, borrowings under our Credit Agreement, as amended and the issuance of additional partnership interests or long-term debt.

On April 6, 2022, we completed the acquisition of 100% of the entities owning the Hardisty South Terminal assets from USDG, as described above. The total consideration for the transaction was $75.0 million in cash, plus

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5,751,136 common units, which were issued to USDG. Additionally we expect to incur between approximately $2.0 million and $2.5 million of additional expenses during the second quarter of 2022 associated with the transaction.

Capital Requirements

Our historical capital expenditures have primarily consisted of the costs to construct and acquire energy-related logistics assets. Our operations are expected to require investments to expand, upgrade or enhance existing facilities and to meet environmental and operational regulations. We also occasionally invest in our assets to expand their capacity or capability, such as the pipeline connection from our Casper Terminal to the Platte Terminal. We may incur unanticipated costs in connection with any expansion projects, which costs could be material or be incurred in periods after the project is completed.

Our partnership agreement requires that we categorize our capital expenditures as either expansion capital expenditures, maintenance capital expenditures, or investment capital expenditures. Although we have not experienced significant maintenance capital expenditures in prior years, as the age and usage of our assets increase, we expect that costs we incur to maintain them in compliance with sound business practice, our contractual relationships and applicable regulatory requirements will likely increase. Some of these costs will be characterized as maintenance capital expenditures. We incurred no maintenance capital expenditures during the three months ended March 31, 2022. Our total expansion capital expenditures for the three months ended March 31, 2022 were $0.1 million.

Debt Service

We anticipate reducing our outstanding indebtedness to the extent we generate cash flows in excess of our operating, investing and distribution needs. During the three months ended March 31, 2022, we received no proceeds from borrowings on our Credit agreement, as amended and made repayments of $5.0 million on our Credit Agreement, as amended from cash flow in excess of our operating and investing needs. Refer to Part I. Item 1. Financial Statements, Note 8. Debt of this Quarterly Report for more information.

Distributions

Our partnership agreement does not require us to pay cash distributions on a quarterly or other basis, and we do not have a legal obligation to distribute any particular amount per common unit.

For the quarter ended March 31, 2022, the board of directors of our general partner determined that we had sufficient available cash after the establishment of cash reserves and the payment of our expenses to distribute $0.1235 per unit on all of our units. Our current quarterly distribution of $0.1235 per unit equates to $3.5 million per quarter, or $13.9 million per year, based on the number of common and general partner units outstanding as of May 4, 2022. This distribution represents an increase of 2.1% from the distribution with respect to the fourth quarter of 2021.

The board of directors of our general partner may change our distribution policy or suspend distributions at any time and from time to time. Additionally, members of our general partner’s board of directors appointed by Energy Capital Partners, must approve any distributions made by us.

Other Items Affecting Liquidity

Credit Risk

Our exposure to credit risk may be affected by the concentration of our customers within the energy industry, as well as changes in economic or other conditions. Our customers’ businesses react differently to changing conditions. We believe that our credit-review procedures, customer deposits and collection procedures have adequately provided for amounts that may become uncollectible in the future.

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Foreign Currency Exchange Risk

We currently derive a significant portion of our cash flow from our Canadian operations, particularly our Hardisty Terminal. As a result, portions of our cash and cash equivalents are denominated in Canadian dollars and are held by foreign subsidiaries, which amounts are subject to fluctuations resulting from changes in the exchange rate between the U.S. dollar and the Canadian dollar. We employ derivative financial instruments to minimize our exposure to the effect of foreign currency fluctuations, as we deem necessary based upon anticipated economic conditions.

UNIT BASED COMPENSATION

Refer to Note 15. Unit Based Compensation of our consolidated financial statements included in Part I — Financial Information, Item 1. Financial Statements of this Report for a discussion regarding unit based compensation.

SUBSEQUENT EVENTS

Refer to Note 17. Subsequent Events of our consolidated financial statements included in Part I — Financial Information, Item 1. Financial Statements of this Report for a discussion regarding subsequent events.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

As a smaller reporting company, we are not required to provide the information required by this Item.

Item 4.    Controls and Procedures.

DISCLOSURE CONTROLS AND PROCEDURES

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2022. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure and to ensure information is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2022, at the reasonable assurance level.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

We did not make any changes in our internal control over financial reporting during the three months ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Due to the nature of our business, we are, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities. We do not believe that we are currently a party to any litigation that will have a material adverse impact on our financial condition, results of operations or statements of cash flows. We are not aware of any material legal or governmental proceedings against us, or any proceedings known to be contemplated by governmental authorities.

Item 1A. Risk Factors

We are subject to various risks and uncertainties in the ordinary course of our business. Risk factors relating to us are set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. We may be subject to additional risks and uncertainties that we currently consider immaterial or that are unknown to us but may have a material impact on our business, financial condition and results of operations.

Item 6. Exhibits

The following “Index of Exhibits” is hereby incorporated into this Item.

45

	Index of Exhibits
Exhibit Number	Description
3.1	Certificate of Limited Partnership of USD Partners LP (incorporated by reference herein to Exhibit 3.1 to the Registration Statement on Form S-1 (File No. 333-198500) filed on August 29, 2014, as amended).
3.2	Third Amended and Restated Agreement of Limited Partnership of USD Partners LP, dated as of April 6, 2022 (incorporated by reference herein to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-36674) filed on April 8, 2022).
10.1	Contributions, Conveyance and Assumption Agreement, dated as of March 27, 2022, by and among USD Logistics Operations GP LLC, USD Logistics Operations LP, USD Partners LP, USD North America GP LLC, USD North America LP, USD Group LLC, and USD Partners GP LLC (incorporated by reference herein to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36674) filed on March 29, 2022).
10.2	Amendment No. 2 to Amended and Restated Credit Agreement, dated as of April 6, 2022, among USD Partners LP, USD Terminals Canada ULC, the Guarantors party thereto, Bank of Montreal, as Administrative Agent, and the other financial institutions party thereto executing the Amendment as Lenders.(incorporated by reference herein to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36674) filed on April 8, 2022).
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline 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
101.SCH*	Inline XBRL Schema Document
101.CAL*	Inline XBRL Calculation Linkbase Document
101.LAB*	Inline XBRL Label Linkbase Document
101.PRE*	Inline XBRL Presentation Linkbase Document
101.DEF*	Inline XBRL Definition Linkbase Document
104*	The cover page of the USD Partners LP Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL (included within the Exhibit 101 attachments)

*     Filed herewith.

**     Furnished herewith.

46

SIGNATURES

Pursuant to the requirements 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.

		USD PARTNERS LP (Registrant)
		By:	USD Partners GP LLC, its General Partner
Date:	May 5, 2022	By:	/s/ Dan Borgen
			Dan Borgen Chief Executive Officer and President (Principal Executive Officer)
Date:	May 5, 2022	By:	/s/ Adam Altsuler
			Adam Altsuler Executive Vice President and Chief Financial Officer (Principal Financial Officer)

47

EX-31.1

Exhibit 31.1

Certification Pursuant to

Rules 13a-14 and 15d-14 Under the Securities Exchange Act of 1934

I, Dan Borgen, certify that:

1.I have reviewed this quarterly report on Form 10-Q (this “report”) of USD Partners LP (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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the registrant and have:

(a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

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

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

Date:	May 5, 2022	/s/ Dan Borgen
		Dan Borgen
		Chief Executive Officer and President (Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification Pursuant to

Rules 13a-14 and 15d-14 Under the Securities Exchange Act of 1934

I, Adam Altsuler, certify that:

1.I have reviewed this quarterly report on Form 10-Q (this “report”) of USD Partners LP (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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the registrant and have:

(a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

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

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

Date:	May 5, 2022	/s/ Adam Altsuler
		Adam Altsuler
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), I, Dan Borgen, Chief Executive Officer and President of USD Partners GP LLC, as general partner of USD Partners LP (the “Partnership”), hereby certify, to the best of my knowledge, that:

(1)The Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

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

Date:	May 5, 2022	/s/ Dan Borgen
		Dan Borgen
		Chief Executive Officer and President (Principal Executive Officer)

EX-32.2

Exhibit 32.2

Certification Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), I, Adam Altsuler, Chief Financial Officer of USD Partners GP LLC, as general partner of USD Partners LP (the “Partnership”), hereby certify, to the best of my knowledge, that:

(1)The Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

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

Date:	May 5, 2022	/s/ Adam Altsuler
		Adam Altsuler
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2022	May 02, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	001-36674
Entity Registrant Name	USD PARTNERS LP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	30-0831007
Entity Address, Address Line One	811 Main Street
Entity Address, Address Line Two	Suite 2800
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77002
City Area Code	281
Local Phone Number	291-0510
Title of 12(b) Security	Common Units Representing Limited Partner Interests
Trading Symbol	USDP
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Shares Outstanding		33,379,431
Entity Central Index Key	0001610682
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues
Total revenues	$ 30,129	$ 30,599
Operating costs
Operating and maintenance	3,034	2,832
Selling, general and administrative	3,223	3,056
Depreciation and amortization	5,507	5,471
Total operating costs	25,392	24,469
Operating income (loss)	4,737	6,130
Interest expense	1,385	1,735
Gain associated with derivative instruments	(6,084)	(3,076)
Foreign currency transaction loss (gain)	47	(61)
Other income, net	(23)	(20)
Income before income taxes	9,412	7,552
Provision for income taxes	421	224
Net income	8,991	7,328
Net income attributable to limited partner interests	$ 8,842	$ 7,204
Weighted average common units outstanding - basic (in shares)	27,901	27,491
Common units
Operating costs
Net income per common unit - basic (usd per share)	$ 0.32	$ 0.27
Net income per common unit - diluted (usd per share)	$ 0.32	$ 0.27
Weighted average common units outstanding - basic (in shares)	27,440	27,030
Weighted average common units outstanding - diluted (in shares)	27,440	27,030
Related party
Revenues
Revenues	$ 1,866	$ 2,314
Operating costs
Operating and maintenance — related party	2,206	2,090
Selling, general and administrative — related party	2,032	1,677
Terminalling services
Revenues
Revenues	28,185	28,105
Terminalling services | Related party
Revenues
Revenues	655	1,103
Fleet leases | Related party
Revenues
Revenues	912	984
Fleet services
Revenues
Revenues	0	24
Fleet services | Related party
Revenues
Revenues	299	227
Freight and other reimbursables
Revenues
Revenues	78	156
Operating costs
Operating costs	78	156
Subcontracted rail services
Operating costs
Operating costs	3,252	3,141
Pipeline fees
Operating costs
Operating costs	$ 6,060	$ 6,046

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 8,991	$ 7,328
Other comprehensive income — foreign currency translation	552	375
Comprehensive income	$ 9,543	$ 7,703

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net income	$ 8,991	$ 7,328
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,507	5,471
Gain associated with derivative instruments	(6,084)	(3,076)
Settlement of derivative contracts	(273)	(264)
Unit based compensation expense	1,237	1,512
Deferred income taxes	144	(18)
Amortization of deferred financing costs	272	207
Changes in operating assets and liabilities:
Accounts receivable	(5,060)	(402)
Accounts receivable — related party	154	(84)
Prepaid expenses, inventory and other assets	2,360	884
Other assets — related party	65	(394)
Accounts payable and accrued expenses	4,034	290
Accounts payable and accrued expenses — related party	906	(25)
Deferred revenue and other liabilities	(1,529)	1,212
Deferred revenue and other liabilities — related party	(16)	4
Net cash provided by operating activities	10,708	12,645
Cash flows from investing activities:
Additions of property and equipment	(135)	(483)
Net cash used in investing activities	(135)	(483)
Cash flows from financing activities:
Distributions	(3,518)	(3,183)
Payments for deferred financing costs	(13)	0
Vested phantom units used for payment of participant taxes	(1,052)	(857)
Repayments of long-term debt	(5,000)	(8,000)
Net cash used in financing activities	(9,583)	(12,040)
Effect of exchange rates on cash	21	(95)
Net change in cash, cash equivalents and restricted cash	1,011	27
Cash, cash equivalents and restricted cash — beginning of period	10,923	10,994
Cash, cash equivalents and restricted cash — end of period	$ 11,934	$ 11,021

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 4,495	$ 3,747
Restricted cash	7,439	7,176
Accounts receivable, net	10,773	5,688
Accounts receivable — related party	2,817	2,953
Prepaid expenses	3,206	3,857
Inventory	1,667	3,027
Other current assets	1,567	129
Other current assets — related party	264	260
Total current assets	32,228	26,837
Property and equipment, net	131,446	133,102
Intangible assets, net	45,734	48,886
Operating lease right-of-use assets	4,214	5,658
Other non-current assets	8,855	4,881
Other non-current assets — related party	2,196	2,227
Total assets	224,673	221,591
Current liabilities
Accounts payable and accrued expenses	11,527	7,621
Accounts payable and accrued expenses — related party	2,393	1,486
Deferred revenue	5,850	6,889
Operating lease liabilities, current	3,285	4,674
Other current liabilities	8,011	7,223
Other current liabilities — related party	48	64
Total current liabilities	31,114	27,957
Long-term debt, net	161,275	166,003
Operating lease liabilities, non-current	778	793
Other non-current liabilities	6,297	7,751
Total liabilities	199,464	202,504
Commitments and contingencies
Partners’ capital
General partner units (461,136 outstanding at March 31, 2022 and December 31, 2021)	2,119	2,029
Accumulated other comprehensive income	1,255	703
Total partners’ capital	25,209	19,087
Total liabilities and partners’ capital	224,673	221,591
Common units
Partners’ capital
Common units (27,619,909 and 27,268,878 outstanding at March 31, 2022 and December 31, 2021, respectively)	$ 21,835	$ 16,355

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares	Mar. 31, 2022	Dec. 31, 2021
General partners' units outstanding (in shares)	461,136	461,136
Common units
Limited partners' units outstanding (in shares)	27,619,909	27,268,878

XML

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL - USD ($) $ in Thousands	Total	Accumulated other comprehensive income	Limited Partner Common units	General Partner units
Beginning balance (in shares) at Dec. 31, 2020			26,844,715	461,136
Beginning balance at Dec. 31, 2020		$ 547	$ 3,829	$ 1,892
Increase (Decrease) in Partners' Capital [Roll Forward]
Common units issued for vested phantom units (in shares)			379,726
Common units issued for vested phantom units			$ (857)
Net income	$ 7,328		7,204	124
Unit based compensation expense			1,425
Distributions			$ (3,129)	$ (54)
Cumulative translation adjustment	375	375
Ending balance (in shares) at Mar. 31, 2021			27,224,441	461,136
Ending balance at Mar. 31, 2021	11,356	922	$ 8,472	$ 1,962
Beginning balance (in shares) at Dec. 31, 2021			27,268,878	461,136
Beginning balance at Dec. 31, 2021	19,087	703	$ 16,355	$ 2,029
Increase (Decrease) in Partners' Capital [Roll Forward]
Common units issued for vested phantom units (in shares)			351,031
Common units issued for vested phantom units			$ (1,052)
Net income	8,991		8,842	149
Unit based compensation expense			1,149
Distributions			$ (3,459)	$ (59)
Cumulative translation adjustment	552	552
Ending balance (in shares) at Mar. 31, 2022			27,619,909	461,136
Ending balance at Mar. 31, 2022	$ 25,209	$ 1,255	$ 21,835	$ 2,119

XML

ORGANIZATION AND BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION AND BASIS OF PRESENTATION

USD Partners LP and its consolidated subsidiaries, collectively referred to herein as we, us, our, the Partnership and USDP, is a fee-based, growth-oriented master limited partnership formed in 2014 by US Development Group, LLC, or USD, through its wholly-owned subsidiary, USD Group LLC, or USDG. We were formed to acquire, develop and operate midstream infrastructure and complementary logistics solutions for crude oil, biofuels and other energy-related products. We generate substantially all of our operating cash flows from multi-year, take-or-pay contracts with primarily investment grade customers, including major integrated oil companies, refiners and marketers. Our network of crude oil terminals facilitate the transportation of heavy crude oil from Western Canada to key demand centers across North America. Our operations include railcar loading and unloading, storage and blending in onsite tanks, inbound and outbound pipeline connectivity, truck transloading, as well as other related logistics services. We also provide our customers with leased railcars and fleet services to facilitate the transportation of liquid hydrocarbons by rail. We do not generally take ownership of the products that we handle, nor do we receive any payments from our customers based on the value of such products. We may on occasion enter into buy-sell arrangements in which we take temporary title to commodities while in our terminals. We expect such arrangements to be at fixed prices where we do not take commodity price exposure.

A substantial amount of the operating cash flows related to the terminal services that we provide are generated from take-or-pay contracts with minimum monthly commitment fees and, as a result, are not directly related to actual throughput volumes at our crude oil terminals. Throughput volumes at our terminals are primarily influenced by the difference in price between Western Canadian Select, or WCS, and other grades of crude oil, commonly referred to as spreads, rather than absolute price levels. WCS spreads are influenced by several market factors, including the availability of supplies relative to the level of demand from refiners and other end users, the price and availability of alternative grades of crude oil, the availability of takeaway capacity, as well as transportation costs from supply areas to demand centers.

Basis of Presentation

Our accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim consolidated financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete consolidated financial statements. In the opinion of our management, they contain all adjustments, consisting only of normal recurring adjustments, which our management considers necessary to present fairly our financial position as of March 31, 2022, our results of operations for the three months ended March 31, 2022 and 2021, and our cash flows for the three months ended March 31, 2022 and 2021. We derived our consolidated balance sheet as of December 31, 2021 from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Our results of operations for the three months ended March 31, 2022 and 2021 should not be taken as indicative of the results to be expected for the full year due to fluctuations in the supply of and demand for crude oil and biofuels, timing and completion of acquisitions, if any, changes in the fair market value of our derivative instruments and the impact of fluctuations in foreign currency exchange rates. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Foreign Currency Translation

We conduct a substantial portion of our operations in Canada, which we account for in the local currency, the Canadian dollar. We translate most Canadian dollar denominated balance sheet accounts into our reporting currency, the U.S. dollar, at the end of period exchange rate, while most accounts in our statement of operations accounts are translated into our reporting currency based on the average exchange rate for each monthly period. Fluctuations in

the exchange rates between the Canadian dollar and the U.S. dollar can create variability in the amounts we translate and report in U.S. dollars.

Within these consolidated financial statements, we denote amounts denominated in Canadian dollars with “C$” immediately prior to the stated amount.

US Development Group, LLC

USD and its affiliates are engaged in designing, developing, owning and managing large-scale multi-modal logistics centers and energy-related infrastructure across North America. USD is the indirect owner of our general partner through its direct ownership of USDG and is currently owned by Energy Capital Partners, Goldman Sachs and certain of USD’s management team.

XML

NET INCOME PER LIMITED PARTNER INTEREST

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

NET INCOME PER LIMITED PARTNER INTEREST

NET INCOME PER LIMITED PARTNER INTEREST

We allocate our net income among our general partner and limited partners using the two-class method in accordance with applicable authoritative accounting guidance. Under the two-class method, we allocate our net income and any net income in excess of distributions to our limited partners, our general partner and the holder of the incentive distribution rights, or IDRs, according to the distribution formula for available cash as set forth in our partnership agreement. We allocate any distributions in excess of earnings for the period to our limited partners and general partner based on their respective proportionate ownership interests in us, as set forth in our partnership agreement after taking into account distributions to be paid with respect to the IDRs.

The formula for distributing available cash as set forth in our partnership agreement is as follows:

Distribution Targets	Portion of Quarterly Distribution Per Unit	Percentage Distributed to Limited Partners	Percentage Distributed to General Partner (including IDRs) (1)
Minimum Quarterly Distribution	Up to $0.2875	98%	2%
First Target Distribution	> $0.2875 to $0.330625	98%	2%
Second Target Distribution	> $0.330625 to $0.359375	85%	15%
Third Target Distribution	> $0.359375 to $0.431250	75%	25%
Thereafter	Amounts above $0.431250	50%	50%

(1)Calculated as if our general partner holds the original 2% general partner interest in us, which is currently 1.6%.

We determined basic and diluted net income per limited partner unit as set forth in the following tables:

	For the Three Months Ended March 31, 2022
	Common Units		General Partner Units		Total
	(in thousands, except per unit amounts)
Net income attributable to general and limited partner interests in USD Partners LP (1)	$	8,842	$	149	$	8,991
Less: Distributable earnings (2)	3,633		3		3,636
Excess net income	$	5,209	$	146	$	5,355
Weighted average units outstanding (3)	27,440		461		27,901
Distributable earnings per unit (4)	$	0.13
Underdistributed earnings per unit (5)	0.19
Net income per limited partner unit (basic and diluted) (6)	$	0.32

(1)Represents net income allocated to each class of units based on the actual ownership of the Partnership during the period. There were no amounts attributed to the general partner for its incentive distribution rights.

(2)Represents the per unit distribution payable of $0.1235 per unit or $0.494 on an annualized basis for the three months ended March 31, 2022. Amounts presented for each class of units include a proportionate amount of the $167 thousand distributable to holders of the Equity classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Amended and Restated Long-Term Incentive Plan.

(3)Represents the weighted average units outstanding for the period.

(4)Represents the total distributable earnings divided by the weighted average number of units outstanding for the period.

(5)Represents the additional amount per unit necessary to distribute the excess net income for the period among our limited partners and our general partners according to the distribution formula for available cash as set forth in our partnership agreement.

(6)Our computation of net income per limited partner unit excludes the effects of 1,366,747 equity-classified phantom unit awards outstanding as they were anti-dilutive for the period presented.

	For the Three Months Ended March 31, 2021
	Common Units		General Partner Units		Total
	(in thousands, except per unit amounts)
Net income attributable to general and limited partner interests in USD Partners LP (1)	$	7,204	$	124	$	7,328
Less: Distributable earnings (2)	3,248		55		3,303
Excess net income	$	3,956	$	69	$	4,025
Weighted average units outstanding (3)	27,030		461		27,491
Distributable earnings per unit (4)	$	0.12
Underdistributed earnings per unit (5)	0.15
Net income per limited partner unit (basic and diluted)(6)	$	0.27

(1)Represents net loss allocated to each class of units based on the actual ownership of the Partnership during the period. There were no amounts attributed to the general partner for its incentive distribution rights.

(2)Represents the per unit distribution paid of $0.1135 per unit or $0.454 on an annualized basis for the three months ended March 31, 2021. Amounts presented for each class of units include a proportionate amount of the $161 thousand distributed to holders of the Equity-classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Amended and Restated Long-Term Incentive Plan.

(3)Represents the weighted average units outstanding for the period.

(4)Represents the total distributable earnings divided by the weighted average number of units outstanding for the period.

(5)Represents the additional amount per unit necessary to distribute the excess net income for the period among our limited partners and our general partners according to the distribution formula for cash as set forth in our partnership agreement.

(6)Our computation of net income per limited partner unit excludes the effects of 1,418,517 equity-classified phantom unit awards outstanding as they were anti-dilutive for the period presented.

Subsequent to the current reporting period, effective April 1, 2022 our sponsor’s general partner interest in us was exchanged for a non-economic general partner interest, our sponsor’s IDRs were eliminated and we issued 5,751,136 common units to our sponsor in connection with our acquisition of the Hardisty South Terminal. Refer to Note 17. Subsequent Events — Drop Down Acquisition of Hardisty South Terminal for more information.

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REVENUES

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

REVENUES

REVENUES

Disaggregated Revenues

We manage our business in two reportable segments: Terminalling services and Fleet services. Our segments offer different services and are managed accordingly. Our chief operating decision maker, or CODM, regularly reviews financial information about both segments in order to allocate resources and evaluate performance. As such, we have concluded that disaggregating revenue by reporting segments appropriately depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 12. Segment Reporting for our disaggregated revenues by segment. Additionally, the below tables summarize the geographic data for our revenues:

	Three Months Ended March 31, 2022
	U.S.		Canada		Total
	(in thousands)
Third party	$	7,336	$	20,927	$	28,263
Related party	$	1,866	$	—	$	1,866

	Three Months Ended March 31, 2021
	U.S.		Canada		Total
	(in thousands)
Third party	$	7,638	$	20,647	$	28,285
Related party	$	2,314	$	—	$	2,314

Remaining Performance Obligations

The transaction price allocated to the remaining performance obligations associated with our Terminal and Fleet services agreements as of March 31, 2022 are as follows for the periods indicated:

	Nine months ending December 31, 2022		2023		2024		2025		2026		Thereafter		Total
	(in thousands)
Terminalling Services (1) (2)	$	51,913	$	37,797	$	19,551	$	19,551	19,551		$	89,609	$	237,972
Fleet Services	896		—		—		—		—		—		896
Total	$	52,809	$	37,797	$	19,551	$	19,551	$	19,551	$	89,609	$	238,868

(1)A significant portion of our terminal services agreements are denominated in Canadian dollars. We have converted the remaining performance obligations associated with these Canadian dollar-denominated contracts using the year-to-date average exchange rate of 0.7895 U.S. dollars for each Canadian dollar at March 31, 2022.

(2)Includes fixed monthly minimum commitment fees per contracts and excludes constrained estimates of variable consideration for rate-escalations associated with an index, such as the consumer price index, as well as any incremental revenue associated with volume activity above the minimum volumes set forth within the contracts. Also excludes estimated constrained variable consideration included in certain of our terminal services agreements that is based on crude oil pricing index differentials.

We have applied the practical expedient that allows us to exclude disclosure of performance obligations that are part of a contract that has an expected duration of one year or less.

Deferred Revenue

Our deferred revenue is a form of a contract liability and consists of amounts collected in advance from customers associated with their terminal and fleet services agreements and deferred revenues associated with make-up rights, which will be recognized as revenue when earned pursuant to the terms of our contractual arrangements. We currently recognize substantially all of the amounts we receive for minimum volume commitments as revenue when collected, since breakage associated with these make-up rights is currently approximately 99% based on our expectations around usage of these options. Accordingly, we had $0.1 million deferred revenues at March 31, 2022 for estimated breakage associated with the make-up rights options we granted to our customers. In addition, we had $1.4 million deferred revenues associated with make-up rights at December 31, 2021.

We also have deferred revenue that represents cumulative revenue that has been deferred due to tiered billing provisions. In such arrangements, revenue is recognized using a blended rate based on the billing tiers of the agreement, as the services are consistently provided throughout the duration of the contractual arrangement, which we included in “Other current liabilities” and “Other non-current liabilities” on our consolidated balance sheets.

The following table presents the amounts outstanding on our consolidated balance sheets and changes associated with the balance of our deferred revenue for the three months ended March 31, 2022:

	December 31, 2021		Cash Additions for Customer Prepayments		Balance Sheet Reclassification		Revenue Recognized		March 31, 2022
	(in thousands)
Deferred revenue (1)	$	6,889	$	5,850	$	—	$	(6,889)	$	5,850
Other current liabilities (2)	$	5,062	$	—	$	2,035	$	(457)	$	6,640
Other non-current liabilities (2)	$	7,648	$	561	$	(2,035)	$	—	$	6,174

(1)    Includes deferred revenue of $0.1 million and $1.4 million at March 31, 2022 and December 31, 2021, respectively, for estimated breakage associated with the make-up right options we granted our customers as discussed above.

(2)    Includes cumulative revenue that has been deferred due to tiered billing provisions included in certain of our Canadian dollar-denominated contracts, as discussed above. As such, the change in “Other current liabilities” has been increased by $78 thousand and “Other non-current liabilities” presented has been increased by $118 thousand due to the impact of the change in the end of period exchange rate between March 31, 2022 and December 31, 2021.

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RESTRICTED CASH

3 Months Ended

Mar. 31, 2022

Cash and Cash Equivalents [Abstract]

RESTRICTED CASH

RESTRICTED CASH

We include in restricted cash amounts representing a cash account for which the use of funds is restricted by a facilities connection agreement among us and Gibson Energy Inc., or Gibson, that we entered into during 2014 in connection with the development of our Hardisty Terminal. The collaborative arrangement is further discussed in Note 9. Collaborative Arrangement.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within our consolidated balance sheets to the amounts shown in our consolidated statements of cash flows for the specified periods:

	March 31,
	2022		2021
	(in thousands)
Cash and cash equivalents	$	4,495	$	3,066
Restricted Cash	7,439		7,955
Total cash, cash equivalents and restricted cash	$	11,934	$	11,021

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PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

Our property and equipment is comprised of the following asset classifications as of the dates indicated:

	March 31, 2022		December 31, 2021		Estimated Depreciable Lives (Years)
	(in thousands)
Land	$	10,344	$	10,298	N/A
Trackage and facilities	130,257		129,242		10-30
Pipeline	32,735		32,735		20-30
Equipment	18,088		17,944		3-20
Furniture	68		67		5-10
Total property and equipment	191,492		190,286
Accumulated depreciation	(60,853)		(58,045)
Construction in progress (1)	807		861
Property and equipment, net	$	131,446	$	133,102

(1)The amounts classified as “Construction in progress” are excluded from amounts being depreciated. These amounts represent property that has not been placed into productive service as of the respective consolidated balance sheet date.

Depreciation expense associated with property and equipment totaled $2.3 million for each of the three months ended March 31, 2022 and 2021.

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LEASES

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

LEASES

LEASES

Lessee

We have noncancellable operating leases for railcars, buildings, storage tanks, offices, railroad tracks, and land.

	Three Months Ended March 31, 2022
Weighted-average discount rate	5.9	%
Weighted average remaining lease term in years	2.51

Our total lease cost consisted of the following items for the dates indicated:

		Three Months Ended March 31,
		2022		2021
	(in thousands)
Operating lease cost		$	1,515	$	1,479
Short term lease cost		31		44
Variable lease cost		18		18
Sublease income		(1,281)		(1,348)
Total		$	283	$	193

The maturity analysis below presents the undiscounted cash payments we expect to make each period for property that we lease from others under noncancellable operating leases as of March 31, 2022 (in thousands):

2022	$	3,382
2023	147
2024	115
2025	114
2026	117
Thereafter	505
Total lease payments	$	4,380
Less: imputed interest	(317)
Present value of lease liabilities	$	4,063

Lessor

We serve as an intermediary to assist our customers with obtaining railcars. In connection with our leasing of railcars from third parties, we simultaneously enter into lease agreements with our customers for noncancellable terms that are designed to recover our costs associated with leasing the railcars plus a fee for providing this service. In addition to these leases we also have lease income from storage tanks and lease income from our related party terminal services agreement associated with transloading renewable diesel at our West Colton Terminal that commenced in December 2021. Refer to Note 10. Transactions with Related Parties for additional discussion.

	Three Months Ended March 31,
	2022		2021
	(in thousands, except weighted average term)
Lease income (1)	$	2,486	$	2,185
Weighted average remaining lease term in years			3.58

(1)Lease income presented above includes lease income from related parties. Refer to Note 10. Transactions with Related Parties for additional discussion of lease income from a related party. In addition, lease income as discussed above totaling $1.6 million and $1.2 million for the three months ended March 31, 2022 and 2021, respectively, is included in “Terminalling services” and “Terminalling services — related party” revenues on our consolidated statements of operations.

The maturity analysis below presents the undiscounted future minimum lease payments we expect to receive from customers each period for property they lease from us under noncancellable operating leases as of March 31, 2022 (in thousands): 

2022	$	6,665
2023	2,656
2024	2,663
2025	2,656
2026	2,430
Total	$	17,070

LEASES

LEASES

Lessee

We have noncancellable operating leases for railcars, buildings, storage tanks, offices, railroad tracks, and land.

	Three Months Ended March 31, 2022
Weighted-average discount rate	5.9	%
Weighted average remaining lease term in years	2.51

Our total lease cost consisted of the following items for the dates indicated:

		Three Months Ended March 31,
		2022		2021
	(in thousands)
Operating lease cost		$	1,515	$	1,479
Short term lease cost		31		44
Variable lease cost		18		18
Sublease income		(1,281)		(1,348)
Total		$	283	$	193

The maturity analysis below presents the undiscounted cash payments we expect to make each period for property that we lease from others under noncancellable operating leases as of March 31, 2022 (in thousands):

2022	$	3,382
2023	147
2024	115
2025	114
2026	117
Thereafter	505
Total lease payments	$	4,380
Less: imputed interest	(317)
Present value of lease liabilities	$	4,063

Lessor

We serve as an intermediary to assist our customers with obtaining railcars. In connection with our leasing of railcars from third parties, we simultaneously enter into lease agreements with our customers for noncancellable terms that are designed to recover our costs associated with leasing the railcars plus a fee for providing this service. In addition to these leases we also have lease income from storage tanks and lease income from our related party terminal services agreement associated with transloading renewable diesel at our West Colton Terminal that commenced in December 2021. Refer to Note 10. Transactions with Related Parties for additional discussion.

	Three Months Ended March 31,
	2022		2021
	(in thousands, except weighted average term)
Lease income (1)	$	2,486	$	2,185
Weighted average remaining lease term in years			3.58

(1)Lease income presented above includes lease income from related parties. Refer to Note 10. Transactions with Related Parties for additional discussion of lease income from a related party. In addition, lease income as discussed above totaling $1.6 million and $1.2 million for the three months ended March 31, 2022 and 2021, respectively, is included in “Terminalling services” and “Terminalling services — related party” revenues on our consolidated statements of operations.

The maturity analysis below presents the undiscounted future minimum lease payments we expect to receive from customers each period for property they lease from us under noncancellable operating leases as of March 31, 2022 (in thousands): 

2022	$	6,665
2023	2,656
2024	2,663
2025	2,656
2026	2,430
Total	$	17,070

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INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

INTANGIBLE ASSETS

The composition, gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows as of the dates indicated:

	March 31, 2022		December 31, 2021
	(in thousands)
Carrying amount:
Customer service agreements	$	125,960	$	125,960
Other	106		106
Total carrying amount	126,066		126,066
Accumulated amortization:
Customer service agreements	(80,264)		(77,115)
Other	(68)		(65)
Total accumulated amortization	(80,332)		(77,180)
Total intangible assets, net	$	45,734	$	48,886

Amortization expense associated with intangible assets totaled $3.2 million for the three months ended March 31, 2022 and 2021.

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DEBT

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

DEBT

DEBT

In November 2018, we amended and restated our revolving senior secured credit agreement, which we originally established in October 2014. We refer to the amended and restated senior secured credit agreement executed in November 2018 as the Credit Agreement and the original senior secured credit agreement as the Previous Credit Agreement. Our Credit Agreement amended and restated in its entirety our Previous Credit Agreement.

On October 29, 2021, we entered into an amendment to our Credit Agreement, referred to as the Credit Agreement, as amended, with a syndicate of lenders. The Credit Agreement, as amended, extends the maturity date of the agreement by one year. The aggregate borrowing capacity of the facility is $275 million and reflects the resignation of Citibank, N.A. as administrative agent and swing line lender under the facility and the appointment of Bank of Montreal as the successor administrative agent and swing line lender under the facility.

Our Credit Agreement, as amended, matures on November 2, 2023. Our Credit Agreement, as amended, provides us with the ability to request an additional one-year maturity date extension, subject to the satisfaction of certain conditions including consent of the lenders, and allows us the option to increase the maximum amount of credit available up to a total facility size of $390 million, subject to receiving increased commitments from lenders and satisfaction of certain conditions. The Credit Agreement, as amended, keeps the financial covenants substantially consistent with our Credit Agreement.

Our Credit Agreement, as amended, and any issuances of letters of credit are available for working capital, capital expenditures, general partnership purposes and continue the indebtedness outstanding under the Previous Credit Agreement. The Credit Agreement, as amended, includes an aggregate $20 million sublimit for standby letters of credit and a $20 million sublimit for swingline loans. Obligations under the Credit Agreement, as amended, are guaranteed by our restricted subsidiaries (as such term is defined therein) and are secured by a first priority lien on our assets and those of our restricted subsidiaries, other than certain excluded assets.

Our long-term debt balances included the following components as of the specified dates:

	March 31, 2022		December 31, 2021
	(in thousands)
Credit Agreement, as amended	$	163,000	$	168,000
Less: Deferred financing costs, net	(1,725)		(1,997)
Total long-term debt, net	$	161,275	$	166,003

We determined the capacity available to us under the terms of our Credit Agreement, as amended, was as follows as of the specified dates:

	March 31, 2022		December 31, 2021
	(in millions)
Aggregate borrowing capacity under Credit Agreement, as amended	$	275.0	$	275.0
Less: Amounts outstanding under the Credit Agreement, as amended	163.0		168.0
Available under the Credit Agreement, as amended, based on capacity	$	112.0	$	107.0
Available under the Credit Agreement, as amended, based on covenants (1)	$	66.9	$	80.0

(1)    Pursuant to the terms of our Credit Agreement, as amended, our borrowing capacity, currently, is limited to 4.5 times our trailing 12-month consolidated EBITDA.

The weighted average interest rate on our outstanding indebtedness was 2.71% and 2.35% at March 31, 2022 and December 31, 2021, respectively, without consideration to the effect of our derivative contracts. In addition to the interest we incur on our outstanding indebtedness, we pay commitment fees of 0.375% on unused commitments, which rate will vary based on our consolidated net leverage ratio, as defined in our Credit Agreement, as amended. At March 31, 2022, we were in compliance with the covenants set forth in our Credit Agreement, as amended.

Interest expense associated with our outstanding indebtedness was as follows for the specified periods:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Interest expense on the Credit Agreement, as amended	$	1,113	$	1,528
Amortization of deferred financing costs	272		207
Total interest expense	$	1,385	$	1,735

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COLLABORATIVE ARRANGEMENT	3 Months Ended
	Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
COLLABORATIVE ARRANGEMENT	COLLABORATIVE ARRANGEMENTWe entered into a facilities connection agreement in 2014 with Gibson under which Gibson developed, constructed and operates a pipeline and related facilities connected to our Hardisty Terminal. Gibson’s storage terminal is the exclusive means by which our Hardisty Terminal receives crude oil. Subject to certain limited exceptions regarding manifest train facilities, our Hardisty Terminal is the exclusive means by which crude oil from Gibson’s Hardisty storage terminal may be transported by rail. We remit pipeline fees to Gibson for the transportation of crude oil to our Hardisty Terminal based on a predetermined formula. Pursuant to our arrangement with Gibson, we incurred pipeline fees of $6.1 million and $6.0 million for the three months ended March 31, 2022 and 2021, respectively, which are presented as “Pipeline fees” in our consolidated statements of operations.

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TRANSACTIONS WITH RELATED PARTIES

3 Months Ended

Mar. 31, 2022

Related Party Transactions [Abstract]

TRANSACTIONS WITH RELATED PARTIES

TRANSACTIONS WITH RELATED PARTIES

Nature of Relationship with Related Parties

USD is engaged in designing, developing, owning and managing large-scale multi-modal logistics centers and other energy-related infrastructure across North America. USD is also the sole owner of USDG and the ultimate

parent of our general partner. USD is owned by Energy Capital Partners, Goldman Sachs and certain members of its management.

USDG is the sole owner of our general partner and at March 31, 2022, owns 11,557,090 of our common units representing a 41.2% limited partner interest in us. As of March 31, 2022, a value of up to $15.0 million of these common units were subject to a negative pledge supporting USDG’s revolving line of credit for working capital. USDG also provides us with general and administrative support services necessary for the operation and management of our business.

USD Partners GP LLC, our general partner, owns all 461,136 of our general partner units representing a 1.6% general partner interest in us, as well as all of our incentive distribution rights as of March 31, 2022. Pursuant to our partnership agreement, our general partner is responsible for our overall governance and operations. However, our general partner has no obligation to, does not intend to and has not implied that it would, provide financial support to or fund cash flow deficits of the Partnership.

USD Marketing LLC, or USDM, is a wholly-owned subsidiary of USDG organized to promote contracting for services provided by our terminals and to facilitate the marketing of customer products.

USD Terminals Canada II ULC, or USDTC II, is an indirect, wholly-owned Canadian subsidiary of USDG, organized for the purposes of pursuing expansion and other development opportunities associated with our Hardisty Terminal, pursuant to the Development Rights and Cooperation agreement between our wholly-owned subsidiary USD Terminals Canada ULC, or USDTC, and USDG. USDTC owns the legacy crude oil loading facility we refer to as the Hardisty Terminal. USDTC II completed construction of the Hardisty South expansion, or Hardisty South, which commenced operations in January 2019. Hardisty South, which has been owned and operated by USDTC II through March 31, 2022, added one and one-half 120-railcar unit trains of transloading capacity per day, or approximately 112,500 barrels per day, of takeaway capacity to the terminal by modifying the existing loading rack and building additional infrastructure and trackage.

USD Clean Fuels LLC, or USDCF, is a newly formed subsidiary of USD organized for the purpose of providing production and logistics solutions to the growing market for clean energy transportation fuels.

Omnibus Agreement

We are party to an omnibus agreement with USD, USDG and certain of their subsidiaries, or the Omnibus Agreement, including our general partner, pursuant to which we obtain and make payments for specified services provided to us and for out-of-pocket costs incurred on our behalf. We pay USDG, in equal monthly installments, the annual amount USDG estimates will be payable by us during the calendar year for providing services for our benefit. The Omnibus Agreement provides that this amount may be adjusted annually to reflect, among other things, changes in the scope of the general and administrative services provided to us due to a contribution, acquisition or disposition of assets by us or our subsidiaries, or for changes in any law, rule or regulation applicable to us, which affects the cost of providing the general and administrative services. We also reimburse USDG for any out-of-pocket costs and expenses incurred on our behalf in providing general and administrative services to us. This reimbursement is in addition to the amounts we pay to reimburse our general partner and its affiliates for certain costs and expenses incurred on our behalf for managing our business and operations, as required by our partnership agreement.

The total amounts charged to us under the Omnibus Agreement for the three months ended March 31, 2022 and 2021 was $2.0 million and $1.7 million, respectively, which amounts are included in “Selling, general and administrative — related party” in our consolidated statements of operations. We had a payable balance of $2.4 million and $1.4 million with respect to these costs at March 31, 2022 and December 31, 2021, respectively, included in “Accounts payable and accrued expenses — related party” in our consolidated balance sheets.

Marketing Services Agreement - Stroud Terminal

In connection with our purchase of the Stroud Terminal, we entered into a Marketing Services Agreement with USDM, or the Stroud Terminal MSA, in May 2017, whereby we granted USDM the right to market the

capacity at the Stroud Terminal in excess of the original capacity of our initial customer in exchange for a nominal per barrel fee. USDM is obligated to fund any related capital costs associated with increasing the throughput or efficiency of the terminal to handle additional throughput. Upon expiration of our contract with the initial Stroud customer in June 2020, the same marketing rights now apply to all throughput at the Stroud Terminal in excess of the throughput necessary for the Stroud Terminal to generate Adjusted EBITDA that is at least equal to the average monthly Adjusted EBITDA derived from the initial Stroud customer during the 12 months prior to expiration. We also granted USDG the right to develop other projects at the Stroud Terminal in exchange for the payment to us of market-based compensation for the use of our property for such development projects. Any such development projects would be wholly-owned by USDG and would be subject to our existing right of first offer, or ROFO, with respect to midstream projects developed by USDG. Payments made under the Stroud Terminal MSA during the periods presented in this Report are discussed below under the heading “Related Party Revenue and Deferred Revenue.”

Marketing Services Agreement - West Colton Terminal

In June 2021, we entered into a new Terminal Services Agreement with USDCF that is supported by a minimum throughput commitment to USDCF from an investment-grade rated, refining customer as well as a performance guaranty from USD. The Terminal Services Agreement provides for the inbound shipment of renewable diesel on rail at our West Colton Terminal and the outbound shipment of the product on tank trucks to local consumers. The new Terminal Services Agreement has an initial term of five years and commenced on December 1, 2021. We have modified our existing West Colton Terminal so that it now has the capability to transload renewable diesel in addition to the ethanol that it has been transloading.

In exchange for the new Terminal Services Agreement at our West Colton Terminal with USDCF discussed above, we also entered into a Marketing Services Agreement in June 2021, or the West Colton MSA, with USDCF pursuant to which we agreed to grant USDCF marketing and development rights pertaining to future renewable diesel opportunities associated with the West Colton Terminal in excess of the initial renewable diesel Terminal Services Agreement simultaneously executed in June 2021 between us and USDCF. These rights entitle USDCF to market all additional renewable diesel opportunities at the West Colton Terminal during the initial term of the USDCF agreement, and following the initial term of that agreement, all renewable diesel opportunities at the West Colton Terminal in excess of the throughput necessary to generate Adjusted EBITDA for the West Colton Terminal that is at least equal to the average monthly Adjusted EBITDA derived from the initial USDCF agreement during the 12 months prior to expiration of that agreement’s initial five-year term. Pursuant to the West Colton MSA, USDCF will fund any related capital costs associated with increasing the throughput or efficiency of the terminal to handle additional renewable diesel opportunities. In addition, we granted USDCF the right to develop other renewable diesel projects at the West Colton Terminal in exchange for a per barrel fee covering our associated operating costs. Any such development projects would be wholly-owned by USD and would be subject to the ROFO with respect to midstream infrastructure developed by USD. There have been no payments made under the West Colton MSA during the periods presented in this Report.

Hardisty Terminal Services Agreement

We entered into a Terminal Services Agreement with USDTC II in 2019, whereby Hardisty South will provide terminal services for a third-party customer of our Hardisty Terminal for contracted capacity that exceeds the transloading capacity currently available. We incurred $2.1 million for the three months ended March 31, 2022 and 2021, which amounts are included in “Operating and maintenance expense — related party” in our consolidated statements of operations. These costs represent the same rate, on a per barrel basis, that we received as revenue from our third-party customer, which is included in “Terminalling Services” revenue in our consolidated statements of operations. Additionally, in conjunction with the agreement, we recorded a contract asset of $2.5 million at both March 31, 2022 and December 31, 2021 on our consolidated balance sheet in “Other current assets — related party” and “Other non-current assets — related party”, representing prepaid expense associated with this agreement due to tiered billing provisions in the related terminal services agreements.

Hardisty Shared Facilities Agreement

USDTC facilitates the provision of services on behalf of USDTC II pursuant to the terms of a shared facilities agreement, which includes all subcontracted railcar loading, operating, maintenance, pipeline and management services for the entire Hardisty Terminal, including Hardisty South owned by USDTC II. USDTC passes through a proportionate amount of the cost of such services to USDTC II. Our financial statements only reflect the cost incurred by USDTC.

Contribution Agreement

On March 27, 2022, we entered into a Contribution, Conveyance and Assumption agreement, or the Contribution Agreement, with our sponsor to acquire 100% of the entities owning the Hardisty South Terminal assets from USDG as well as eliminate the IDRs and economic general partner interest of our Sponsor for a total consideration of $75.0 million in cash and approximately 5,751,136 common units representing limited partner interests in us. Refer to Note 17. Subsequent Events for further discussion.

Related Party Revenue and Deferred Revenue

We have agreements to provide terminal and fleet services for USDM with respect to our Hardisty Terminal and terminal services with respect to our Stroud Terminal, which also include reimbursement to us for certain out-of-pocket expenses we incur, discussed in more detail below. Additionally, as previously discussed, we also entered into a new Terminal Services Agreement at our West Colton Terminal with USDCF that became effective December 31, 2021.

In connection with our purchase of the Stroud Terminal, we also entered into a Marketing Services Agreement with USDM, as discussed above. Pursuant to the terms of the agreement, we receive a fixed amount per barrel from USDM in exchange for marketing the additional capacity available at the Stroud Terminal. Effective August 2021, upon the commencement of the contract changes associated with the successful completion of the DRU project, the existing customer elected to fully terminate the volume commitments attributable to USDM at the Stroud Terminal, and therefore effective August 2021, we are no longer receiving a fixed fee payment from USDM. However, the Marketing Services Agreement is still effective for any future customer contracts obtained by USDM at the Stroud Terminal.

We include amounts received pursuant to these arrangements as revenue in the table below under “Terminalling services — related party” in our consolidated statements of operations.

Additionally, we received revenue from USDM for the lease of 200 railcars pursuant to the terms of an existing agreement with us, which is included in the table below under “Fleet leases — related party” and “Fleet services — related party” and in our consolidated statements of operations.

Our related party revenues from USD and affiliates are presented below in the following table for the indicated periods:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Terminalling services — related party	$	655	$	1,103
Fleet leases — related party	912		984
Fleet services — related party	299		227
	$	1,866	$	2,314

We had the following amounts outstanding with USD and affiliates on our consolidated balance sheets as presented below in the following table for the indicated periods:

	March 31, 2022		December 31, 2021
	(in thousands)
Accounts receivable — related party	$	2,817	$	2,953
Accounts payable and accrued expenses — related party (1)	$	42	$	63
Other current and non-current assets — related party (2)	$	2,460	$	2,487
Other current liabilities — related party (3)	$	48	$	64

(1)Does not include amounts payable to related parties associated with the Omnibus Agreement, as discussed above.

(2)Includes a contract asset associated with the Hardisty Terminal Services Agreement with USDTC II, as discussed above.

(3)Represents a contract liability associated with a lease agreement with USDM and cumulative revenue that has been deferred due to tiered billing provisions.

Cash Distributions

We paid the following aggregate cash distributions to USDG as a holder of our common units and to USD Partners GP LLC as sole holder of our general partner interest and IDRs.

Distribution Declaration Date	Record Date	Distribution Payment Date	Amount Paid to  USDG		Amount Paid to USD Partners GP LLC
			(in thousands)
January 26, 2022	February 9, 2022	February 18, 2022	$	1,398	$	56

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COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIESFrom time to time, we may be involved in legal, tax, regulatory and other proceedings in the ordinary course of business. We do not believe that we are currently a party to any such proceedings that will have a material adverse impact on our financial condition or results of operations.

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SEGMENT REPORTING

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

We manage our business in two reportable segments: Terminalling services and Fleet services. The Terminalling services segment charges minimum monthly commitment fees under multi-year take-or-pay contracts to load and unload various grades of crude oil into and from railcars, as well as fixed fees per gallon to transload ethanol and renewable diesel from railcars, including related logistics services. We also facilitate rail-to-pipeline shipments of crude oil. Our Terminalling services segment also charges minimum monthly fees to store crude oil in tanks that are leased to our customers. The Fleet services segment provides customers with railcars and fleet services related to the transportation of liquid hydrocarbons under multi-year, take-or-pay contracts. Corporate activities are not considered a reportable segment, but are included to present shared services and financing activities which are not allocated to our established reporting segments.

Our segments offer different services and are managed accordingly. Our CODM regularly reviews financial information about both segments in order to allocate resources and evaluate performance. Our CODM assesses segment performance based on the cash flows produced by our established reporting segments using Segment Adjusted EBITDA. Segment Adjusted EBITDA is a measure calculated in accordance with GAAP. We define Segment Adjusted EBITDA as “Net income (loss)” of each segment adjusted for depreciation and amortization, interest, income taxes, changes in contract assets and liabilities, deferred revenues, foreign currency transaction gains and losses and other items which do not affect the underlying cash flows produced by our businesses. As such, we have concluded that disaggregating revenue by reporting segments appropriately depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

	Three Months Ended March 31, 2022
	Terminalling services		Fleet services		Corporate		Total
	(in thousands)
Revenues
Terminalling services	$	28,185	$	—	$	—	$	28,185
Terminalling services — related party	655		—		—		655
Fleet leases — related party	—		912		—		912
Fleet services	—		—		—		—
Fleet services — related party	—		299		—		299
Freight and other reimbursables	78		—		—		78
Total revenues	28,918		1,211		—		30,129
Operating costs
Subcontracted rail services	3,252		—		—		3,252
Pipeline fees	6,060		—		—		6,060
Freight and other reimbursables	78		—		—		78
Operating and maintenance	4,247		993		—		5,240
Selling, general and administrative	1,296		57		3,902		5,255
Depreciation and amortization	5,507		—		—		5,507
Total operating costs	20,440		1,050		3,902		25,392
Operating income (loss)	8,478		161		(3,902)		4,737
Interest expense	—		—		1,385		1,385
Gain associated with derivative instruments	—		—		(6,084)		(6,084)
Foreign currency transaction loss (gain)	98		—		(51)		47
Other income, net	(23)		—		—		(23)
Provision for income taxes	357		64		—		421
Net income	$	8,046	$	97	$	848	$	8,991

	Three Months Ended March 31, 2021
	Terminalling services		Fleet services		Corporate		Total
	(in thousands)
Revenues
Terminalling services	$	28,105	$	—	$	—	$	28,105
Terminalling services — related party	1,103		—		—		1,103
Fleet leases — related party	—		984		—		984
Fleet services	—		24		—		24
Fleet services — related party	—		227		—		227
Freight and other reimbursables	124		32		—		156
Total revenues	29,332		1,267		—		30,599
Operating costs
Subcontracted rail services	3,141		—		—		3,141
Pipeline fees	6,046		—		—		6,046
Freight and other reimbursables	124		32		—		156
Operating and maintenance	3,924		998		—		4,922
Selling, general and administrative	1,019		92		3,622		4,733
Depreciation and amortization	5,471		—		—		5,471
Total operating costs	19,725		1,122		3,622		24,469
Operating income (loss)	9,607		145		(3,622)		6,130
Interest expense	—		—		1,735		1,735
Gain associated with derivative instruments	—		—		(3,076)		(3,076)
Foreign currency transaction loss (gain)	133		—		(194)		(61)
Other income, net	(20)		—		—		(20)
Provision for income taxes	197		27		—		224
Net income (loss)	$	9,297	$	118	$	(2,087)	$	7,328

Segment Adjusted EBITDA

The following tables present the computation of Segment Adjusted EBITDA, which is a measure determined in accordance with GAAP, for each of our segments for the periods indicated:

		Three Months Ended March 31,
Terminalling Services Segment		2022		2021
	(in thousands)
Net income		$	8,046	$	9,297
Interest income (1)		(1)		(1)
Depreciation and amortization		5,507		5,471
Provision for income taxes		357		197
Foreign currency transaction loss (2)		98		133
Non-cash deferred amounts (3)		(1,225)		1,683
Segment Adjusted EBITDA		$	12,782	$	16,780

(1)    Represents interest income associated with our Terminalling Services segment that is included in “Other income, net” in our consolidated statements of operations.

(2)    Represents foreign exchange transaction amounts associated with activities between our U.S. and Canadian subsidiaries.

(3)    Represents the change in non-cash contract assets and liabilities associated with revenue recognized at blended rates based on tiered rate structures in certain of our customer contracts and deferred revenue associated with deficiency credits that are expected to be used in the future prior to their expiration. Amounts presented are net of the corresponding prepaid Gibson pipeline fee that will be recognized as expense concurrently with the recognition of revenue.

		Three Months Ended March 31,
Fleet Services Segment		2022		2021
	(in thousands)
Net income		$	97	$	118
Provision for income taxes		64		27
Segment Adjusted EBITDA		$	161	$	145

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DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

Our net income, or loss, and cash flows are subject to fluctuations resulting from changes in interest rates on our variable rate debt obligations and from changes in foreign currency exchange rates, particularly with respect to the U.S. dollar and the Canadian dollar. We use interest rate derivative instruments, specifically swaps, on our variable rate debt and to manage the risks associated with market fluctuations in interest rates to reduce volatility in our cash flows. We have not historically designated, nor do we expect to designate, our derivative financial instruments as hedges of the underlying risk exposure. All of our financial instruments are employed in connection with an underlying asset, liability and/or forecasted transaction and are not entered into for speculative purposes.

Interest Rate Derivatives

In September 2020, we entered into an interest rate swap that was made effective as of August 2020. The interest rate swap is a five-year contract with a $150 million notional value that fixes our one-month LIBOR to 0.84% for the notional value of the swap agreement instead of the variable rate that we pay under our Credit Agreement, as amended. The swap settles monthly through the termination date in August 2025.

Derivative Positions

We record all of our derivative financial instruments at their fair values in the line items specified below within our consolidated balance sheets, the amounts of which were as follows at the dates indicated:

	March 31, 2022		December 31, 2021
	(in thousands)
Other current assets	$	1,431	$	—
Other non-current assets	6,338		1,995
Other current liabilities	$	—	$	(583)
	$	7,769	$	1,412

We have not designated our derivative financial instruments as hedges of our interest rate exposure. As a result, changes in the fair value of these derivatives are recorded as “Loss (gain) associated with derivative instruments” in our consolidated statements of operations. The gains or losses associated with changes in the fair value of our derivative contracts do not affect our cash flows until the underlying contract is settled by making or receiving a payment to or from the counterparty. In connection with our derivative activities, we recognized the following amounts during the periods presented:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Gain associated with derivative instruments	$	(6,084)	$	(3,076)

We determine the fair value of our derivative financial instruments using third party pricing information that is derived from observable market inputs, which we classify as level 2 with respect to the fair value hierarchy.

The following table presents summarized information about the fair values of our outstanding interest rate contracts for the periods indicated:

					March 31, 2022		December 31, 2021
	Notional		Interest Rate Parameters		Fair Value		Fair Value
					(in thousands)
Swap Agreements
Swap maturing August 2025	$	150,000,000	0.84	%	$	7,769	$	1,412

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PARTNERS' CAPITAL

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

PARTNERS' CAPITAL

PARTNERS’ CAPITAL

Our common units represent limited partner interests in us. The holders of common units are entitled to participate in partnership distributions and to exercise the rights and privileges available to limited partners under our partnership agreement.

Pursuant to the terms of the USD Partners LP Amended and Restated 2014 Long-Term Incentive Plan, which we refer to as the A/R LTIP, our phantom unit awards, or Phantom Units, granted to directors and employees of our general partner and its affiliates, which are classified as equity, are converted into our common units upon vesting. Equity-classified Phantom Units totaling 530,860 vested during the first three months in 2022, of which 351,031 were converted into our common units after 179,829 Phantom Units were withheld from participants for the payment of applicable employment-related withholding taxes. The conversion of these Phantom Units did not have any economic impact on Partners’ Capital, since the economic impact is recognized over the vesting period. Additional information and discussion regarding our unit based compensation plans is included below in Note 15. Unit Based Compensation.

The board of directors of our general partner has adopted a cash distribution policy pursuant to which we intend to distribute at least the minimum quarterly distribution of $0.2875 per unit ($1.15 per unit on an annualized basis) on all of our units to the extent we have sufficient available cash after the establishment of cash reserves and the payment of our expenses, including payments to our general partner and its affiliates. The board of directors of our general partner may change our distribution policy at any time and from time to time. Our partnership agreement does not require us to pay cash distributions on a quarterly or other basis. The amount of distributions we pay under our cash distribution policy and the decision to make any distribution are determined by our general partner. For the quarter ended March 31, 2022, the board of directors of our general partner determined that we had sufficient available cash after the establishment of cash reserves and the payment of our expenses to distribute $0.1235 per unit on all of our units.

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UNIT BASED COMPENSATION

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

UNIT BASED COMPENSATION

UNIT BASED COMPENSATION

Long-term Incentive Plan

In 2022 and 2021, the board of directors of our general partner, acting in its capacity as our general partner, approved the grant of 603,437 and 669,043 Phantom Units, respectively, to directors and employees of our general partner and its affiliates under our A/R LTIP. At March 31, 2022, we had 157,983 Phantom Units remaining available for issuance. The Phantom Units are subject to all of the terms and conditions of the A/R LTIP and the Phantom Unit award agreements, which are collectively referred to as the Award Agreements. Award amounts for each of the grants are generally determined by reference to a specified dollar amount based on an allocation formula which included a percentage multiplier of the grantee’s base salary, among other factors, converted to a number of units based on the closing price of one of our common units preceding the grant date, as determined by the board of directors of our general partner and quoted on the NYSE.

Phantom Unit awards generally represent rights to receive our common units upon vesting. However, with respect to the awards granted to directors and employees of our general partner and its affiliates domiciled in Canada, for each Phantom Unit that vests, a participant is entitled to receive cash for an amount equivalent to the closing market price of one of our common units on the vesting date. Each Phantom Unit granted under the Award Agreements includes an accompanying distribution equivalent right, or DER, which entitles each participant to receive payments at a per unit rate equal in amount to the per unit rate for any distributions we make with respect to our common units. The Award Agreements granted to employees of our general partner and its affiliates generally contemplate that the individual grants of Phantom Units will vest in four equal annual installments based on the grantee’s continued employment through the vesting dates specified in the Award Agreements, subject to acceleration upon the grantee’s death or disability, or involuntary termination in connection with a change in control of the Partnership or our general partner. Awards to independent directors of the board of our general partner and an independent consultant typically vest over a one year period following the grant date.

The following tables present the award activity for our Equity-classified Phantom Units:

	Director and Independent Consultant Phantom Units	Employee Phantom Units	Weighted-Average Grant Date Fair Value Per Phantom Unit
Phantom Unit awards at December 31, 2021	26,272	1,317,493	$	8.21
Granted	39,408	514,434	$	5.85
Vested	(26,272)	(504,588)	$	9.07
Forfeited	—	—	$	—
Phantom Unit awards at March 31, 2022	39,408	1,327,339	$	6.92

	Director and Independent Consultant Phantom Units	Employee Phantom Units	Weighted-Average Grant Date Fair Value Per Phantom Unit
Phantom Unit awards at December 31, 2020	40,065	1,324,837	$	10.98
Granted	40,065	573,204	$	4.82
Vested	(40,065)	(517,514)	$	11.33
Forfeited	—	(2,075)	$	8.44
Phantom Unit awards at March 31, 2021	40,065	1,378,452	$	8.18

The following tables present the award activity for our Liability-classified Phantom Units:

	Director and Independent Consultant Phantom Units	Employee Phantom Units	Weighted-Average Grant Date Fair Value Per Phantom Unit
Phantom Unit awards at December 31, 2021	13,136	63,730	$	7.26
Granted	13,136	36,459	$	5.85
Vested	(13,136)	—	$	4.82
Phantom Unit awards at March 31, 2022	13,136	100,189	$	6.92

	Director and Independent Consultant Phantom Units	Employee Phantom Units	Weighted-Average Grant Date Fair Value Per Phantom Unit
Phantom Unit awards at December 31, 2020	13,136	59,284	$	10.58
Granted	13,136	41,138	$	4.82
Vested	(13,136)	—	$	10.15
Phantom Unit awards at March 31, 2021	13,136	100,422	$	7.88

The fair value of each Phantom Unit on the grant date is equal to the closing market price of our common units on the grant date. We account for the Phantom Unit grants to independent directors and employees of our general partner and its affiliates domiciled in Canada that are paid out in cash upon vesting, throughout the requisite vesting period, by revaluing the unvested Phantom Units outstanding at the end of each reporting period and recording a charge to compensation expense in “Selling, general and administrative” in our consolidated statements of operations and recognizing a liability in “Other current liabilities” in our consolidated balance sheets. With respect to the Phantom Units granted to consultants, independent directors and employees of our general partner and its affiliates domiciled in the United States, we amortize the initial grant date fair value over the requisite service period using the straight-line method with a charge to compensation expense in “Selling, general and administrative” in our consolidated statements of operations, with an offset to common units within the Partners’ Capital section of our consolidated balance sheet.

For the three months ended March 31, 2022 and 2021, we recognized $1.2 million and $1.5 million, respectively, of compensation expense associated with outstanding Phantom Units. As of March 31, 2022, we have unrecognized compensation expense associated with our outstanding Phantom Units totaling $9.5 million, which we expect to recognize over a weighted average period of 2.58 years. We have elected to account for actual forfeitures as they occur rather than using an estimated forfeiture rate to determine the number of awards we expect to vest.

We made payments to holders of the Phantom Units pursuant to the associated DERs we granted to them under the Award Agreements as follows:

		Three Months Ended March 31,
		2022		2021
	(in thousands)
Equity-classified Phantom Units (1)		$	163	$	152
Liability-classified Phantom Units		9		8
Total		$	172	$	160

(1)    We reclassified $2 thousand for the three months ended March 31, 2021, to unit based compensation expense for DERs paid in relation to Phantom Units that have been forfeited. We had no reclassifications for the three months ended March 31, 2022

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SUPPLEMENTAL CASH FLOW INFORMATION

3 Months Ended

Mar. 31, 2022

Supplemental Cash Flow Elements [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

SUPPLEMENTAL CASH FLOW INFORMATION

The following table provides supplemental cash flow information for the periods indicated:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Cash paid for income taxes	$	533	$	286
Cash paid for interest	$	1,116	$	1,549
Cash paid for operating leases	$	1,838	$	1,566

Non-cash Investing Activities

For the three months ended March 31, 2022 and 2021, we had non-cash investing activities for capital expenditures for property and equipment that were financed through “Accounts payable and accrued expenses” as presented in the table below for the periods indicated:

	Three months ended March 31,
	2022		2021
	(in thousands)
Property and equipment financed through accounts payable and accrued expenses	$	(135)	$	136

There were no new right-of-use lease assets and associated liabilities recorded on our consolidated balance sheet as of March 31, 2022, representing non-cash activities resulting from either new or extended lease agreements. We recorded $37 thousand of right-of-use lease assets and the associated liabilities on our consolidated balance sheet as of March 31, 2021. See Note 6. Leases for further discussion.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

Distribution to Partners

On April 21, 2022, the board of directors of USD Partners GP LLC, acting in its capacity as our general partner, declared a quarterly cash distribution payable of $0.1235 per unit, or $0.494 per unit on an annualized basis, for the three months ended March 31, 2022. The distribution will be paid on May 13, 2022, to unitholders of record at the close of business on May 4, 2022. The distribution will include payment of $2.0 million to our public common unitholders and $1.5 million to USDG as a holder of our common units.

Drop Down Acquisition of Hardisty South Terminal

On April 6, 2022, we completed the drop down acquisition of 100% of the entities owning the Hardisty South Terminal assets from USDG, exchanged our sponsor’s economic general partner interest in us for a non-economic general partner interest and eliminated our sponsor’s IDRs for a total consideration of $75.0 million in cash and 5,751,136 common units, that was made effective as of April 1, 2022. The cash portion was funded with borrowings from our Credit Agreement, as amended. In connection with these transactions, we entered into a technical amendment to our Credit Agreement, as amended to permit our acquisition of the Netherlands cooperative, which is the parent company of the company that owns the Hardisty South Terminal.

The drop down acquisition was determined to be a business combination of entities under common control and as such we will consolidate the financial information for the acquisition of the Hardisty South Terminal on a retrospective basis. As of April 6, 2022, our sponsor holds 17,308,226 common units, representing 51.9% of our total outstanding units.

In connection with the acquisition, the fixed fee portion of the expenses payable by us under the Omnibus Agreement was adjusted upward slightly to reimburse our general partner for costs associated with the operations of the Hardisty South Terminal. After giving effect to that adjustment, for the twelve months ending December 31, 2022, we estimate that the total fixed fee portion of expenses payable by us under the Omnibus Agreement will be approximately $3.7 million, which includes, among other items, compensation expense for all employees required to manage and operate our business. Please read the discussion under Part II, Item 8. Financial Statements and Supplementary Data, Note 13. Transactions with Related Parties in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 regarding reimbursements to our general partner under the Omnibus Agreement.

The following table presents unaudited pro forma consolidated financial information for the periods indicated as if the closing of our drop down acquisition of the Hardisty South Terminal had occurred as of January 1, 2021:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Total revenues	$	35,786	$	43,626
Net income	$	10,362	$	15,155

Credit Agreement, as amended

Subsequent, to March 31, 2022, we borrowed an additional $75.0 million under the terms of our existing $275 million Credit Agreement, as amended, which was used to finance the previously discussed acquisition of the Hardisty South Terminal. As of May 2, 2022, we had amounts outstanding of $238.0 million under our Credit Agreement, as amended and $37.0 million available for borrowing under the Credit Agreement, as amended based on capacity that is subject to certain covenants. Refer to Note 8. Debt for more information.

Pursuant to the terms of our Credit Agreement, as amended, our borrowing capacity currently is limited to 5.0 times our trailing 12-month consolidated EBITDA for the quarter in which a material acquisition occurs and the two quarters following a material acquisition, as defined in our Credit Agreement, as amended, after which time the covenant returns to 4.5 times our trailing 12-month consolidated EBITDA. Our acquisition of Hardisty South is treated as a material acquisition under the terms of our Credit Agreement, as amended. As a result, our borrowing capacity will be limited to 5.0 times our 12-month trailing consolidated EBITDA through December 31, 2022.

Derivative Financial Instrument Amendment

As a result of the previously discussed acquisition of the Hardisty South Terminal and the associated additional borrowings under our Credit Agreement, as amended, that occurred to finance the acquisition, on April 11, 2022, we terminated our existing interest rate swap and simultaneously entered into a new interest rate swap that was made effective as of April 19, 2022. The new interest rate swap is a five-year contract with a $175.0 million notional value that fixes the secured overnight financing rate, or SOFR, to 1.57% for the notional

value of the swap agreement instead of the variable rate that we pay under our Credit Agreement, as amended. The swap settles monthly through the termination date in March 2027.

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ORGANIZATION AND BASIS OF PRESENTATION (Policies)

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of PresentationOur accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim consolidated financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete consolidated financial statements. In the opinion of our management, they contain all adjustments, consisting only of normal recurring adjustments, which our management considers necessary to present fairly our financial position as of March 31, 2022, our results of operations for the three months ended March 31, 2022 and 2021, and our cash flows for the three months ended March 31, 2022 and 2021. We derived our consolidated balance sheet as of December 31, 2021 from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Our results of operations for the three months ended March 31, 2022 and 2021 should not be taken as indicative of the results to be expected for the full year due to fluctuations in the supply of and demand for crude oil and biofuels, timing and completion of acquisitions, if any, changes in the fair market value of our derivative instruments and the impact of fluctuations in foreign currency exchange rates. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Foreign Currency Translation

Foreign Currency Translation

We conduct a substantial portion of our operations in Canada, which we account for in the local currency, the Canadian dollar. We translate most Canadian dollar denominated balance sheet accounts into our reporting currency, the U.S. dollar, at the end of period exchange rate, while most accounts in our statement of operations accounts are translated into our reporting currency based on the average exchange rate for each monthly period. Fluctuations in

the exchange rates between the Canadian dollar and the U.S. dollar can create variability in the amounts we translate and report in U.S. dollars.Within these consolidated financial statements, we denote amounts denominated in Canadian dollars with “C$” immediately prior to the stated amount.

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NET INCOME PER LIMITED PARTNER INTEREST (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Schedule of distribution method to limited and general partners

The formula for distributing available cash as set forth in our partnership agreement is as follows:

Distribution Targets	Portion of Quarterly Distribution Per Unit	Percentage Distributed to Limited Partners	Percentage Distributed to General Partner (including IDRs) (1)
Minimum Quarterly Distribution	Up to $0.2875	98%	2%
First Target Distribution	> $0.2875 to $0.330625	98%	2%
Second Target Distribution	> $0.330625 to $0.359375	85%	15%
Third Target Distribution	> $0.359375 to $0.431250	75%	25%
Thereafter	Amounts above $0.431250	50%	50%

(1)Calculated as if our general partner holds the original 2% general partner interest in us, which is currently 1.6%.

Schedule of earnings per share, basic and diluted

We determined basic and diluted net income per limited partner unit as set forth in the following tables:

	For the Three Months Ended March 31, 2022
	Common Units		General Partner Units		Total
	(in thousands, except per unit amounts)
Net income attributable to general and limited partner interests in USD Partners LP (1)	$	8,842	$	149	$	8,991
Less: Distributable earnings (2)	3,633		3		3,636
Excess net income	$	5,209	$	146	$	5,355
Weighted average units outstanding (3)	27,440		461		27,901
Distributable earnings per unit (4)	$	0.13
Underdistributed earnings per unit (5)	0.19
Net income per limited partner unit (basic and diluted) (6)	$	0.32

(1)Represents net income allocated to each class of units based on the actual ownership of the Partnership during the period. There were no amounts attributed to the general partner for its incentive distribution rights.

(2)Represents the per unit distribution payable of $0.1235 per unit or $0.494 on an annualized basis for the three months ended March 31, 2022. Amounts presented for each class of units include a proportionate amount of the $167 thousand distributable to holders of the Equity classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Amended and Restated Long-Term Incentive Plan.

(3)Represents the weighted average units outstanding for the period.

(4)Represents the total distributable earnings divided by the weighted average number of units outstanding for the period.

(5)Represents the additional amount per unit necessary to distribute the excess net income for the period among our limited partners and our general partners according to the distribution formula for available cash as set forth in our partnership agreement.

(6)Our computation of net income per limited partner unit excludes the effects of 1,366,747 equity-classified phantom unit awards outstanding as they were anti-dilutive for the period presented.

	For the Three Months Ended March 31, 2021
	Common Units		General Partner Units		Total
	(in thousands, except per unit amounts)
Net income attributable to general and limited partner interests in USD Partners LP (1)	$	7,204	$	124	$	7,328
Less: Distributable earnings (2)	3,248		55		3,303
Excess net income	$	3,956	$	69	$	4,025
Weighted average units outstanding (3)	27,030		461		27,491
Distributable earnings per unit (4)	$	0.12
Underdistributed earnings per unit (5)	0.15
Net income per limited partner unit (basic and diluted)(6)	$	0.27

(1)Represents net loss allocated to each class of units based on the actual ownership of the Partnership during the period. There were no amounts attributed to the general partner for its incentive distribution rights.

(2)Represents the per unit distribution paid of $0.1135 per unit or $0.454 on an annualized basis for the three months ended March 31, 2021. Amounts presented for each class of units include a proportionate amount of the $161 thousand distributed to holders of the Equity-classified Phantom Units pursuant to the distribution equivalent rights granted under the USD Partners LP 2014 Amended and Restated Long-Term Incentive Plan.

(3)Represents the weighted average units outstanding for the period.

(4)Represents the total distributable earnings divided by the weighted average number of units outstanding for the period.

(5)Represents the additional amount per unit necessary to distribute the excess net income for the period among our limited partners and our general partners according to the distribution formula for cash as set forth in our partnership agreement.

(6)Our computation of net income per limited partner unit excludes the effects of 1,418,517 equity-classified phantom unit awards outstanding as they were anti-dilutive for the period presented.

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REVENUES (Tables)

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Schedule of disaggregation of revenues

Additionally, the below tables summarize the geographic data for our revenues:

	Three Months Ended March 31, 2022
	U.S.		Canada		Total
	(in thousands)
Third party	$	7,336	$	20,927	$	28,263
Related party	$	1,866	$	—	$	1,866

	Three Months Ended March 31, 2021
	U.S.		Canada		Total
	(in thousands)
Third party	$	7,638	$	20,647	$	28,285
Related party	$	2,314	$	—	$	2,314

Schedule of remaining performance obligations

The transaction price allocated to the remaining performance obligations associated with our Terminal and Fleet services agreements as of March 31, 2022 are as follows for the periods indicated:

	Nine months ending December 31, 2022		2023		2024		2025		2026		Thereafter		Total
	(in thousands)
Terminalling Services (1) (2)	$	51,913	$	37,797	$	19,551	$	19,551	19,551		$	89,609	$	237,972
Fleet Services	896		—		—		—		—		—		896
Total	$	52,809	$	37,797	$	19,551	$	19,551	$	19,551	$	89,609	$	238,868

(1)A significant portion of our terminal services agreements are denominated in Canadian dollars. We have converted the remaining performance obligations associated with these Canadian dollar-denominated contracts using the year-to-date average exchange rate of 0.7895 U.S. dollars for each Canadian dollar at March 31, 2022.

(2)Includes fixed monthly minimum commitment fees per contracts and excludes constrained estimates of variable consideration for rate-escalations associated with an index, such as the consumer price index, as well as any incremental revenue associated with volume activity above the minimum volumes set forth within the contracts. Also excludes estimated constrained variable consideration included in certain of our terminal services agreements that is based on crude oil pricing index differentials.

Schedule of changes of balance of contract liabilities

The following table presents the amounts outstanding on our consolidated balance sheets and changes associated with the balance of our deferred revenue for the three months ended March 31, 2022:

	December 31, 2021		Cash Additions for Customer Prepayments		Balance Sheet Reclassification		Revenue Recognized		March 31, 2022
	(in thousands)
Deferred revenue (1)	$	6,889	$	5,850	$	—	$	(6,889)	$	5,850
Other current liabilities (2)	$	5,062	$	—	$	2,035	$	(457)	$	6,640
Other non-current liabilities (2)	$	7,648	$	561	$	(2,035)	$	—	$	6,174

(1)    Includes deferred revenue of $0.1 million and $1.4 million at March 31, 2022 and December 31, 2021, respectively, for estimated breakage associated with the make-up right options we granted our customers as discussed above.

(2)    Includes cumulative revenue that has been deferred due to tiered billing provisions included in certain of our Canadian dollar-denominated contracts, as discussed above. As such, the change in “Other current liabilities” has been increased by $78 thousand and “Other non-current liabilities” presented has been increased by $118 thousand due to the impact of the change in the end of period exchange rate between March 31, 2022 and December 31, 2021.

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RESTRICTED CASH (Tables)

3 Months Ended

Mar. 31, 2022

Cash and Cash Equivalents [Abstract]

Restrictions on cash and cash equivalents

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within our consolidated balance sheets to the amounts shown in our consolidated statements of cash flows for the specified periods:

	March 31,
	2022		2021
	(in thousands)
Cash and cash equivalents	$	4,495	$	3,066
Restricted Cash	7,439		7,955
Total cash, cash equivalents and restricted cash	$	11,934	$	11,021

Schedule of cash and cash equivalents

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within our consolidated balance sheets to the amounts shown in our consolidated statements of cash flows for the specified periods:

	March 31,
	2022		2021
	(in thousands)
Cash and cash equivalents	$	4,495	$	3,066
Restricted Cash	7,439		7,955
Total cash, cash equivalents and restricted cash	$	11,934	$	11,021

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PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Our property and equipment is comprised of the following asset classifications as of the dates indicated:

	March 31, 2022		December 31, 2021		Estimated Depreciable Lives (Years)
	(in thousands)
Land	$	10,344	$	10,298	N/A
Trackage and facilities	130,257		129,242		10-30
Pipeline	32,735		32,735		20-30
Equipment	18,088		17,944		3-20
Furniture	68		67		5-10
Total property and equipment	191,492		190,286
Accumulated depreciation	(60,853)		(58,045)
Construction in progress (1)	807		861
Property and equipment, net	$	131,446	$	133,102

(1)The amounts classified as “Construction in progress” are excluded from amounts being depreciated. These amounts represent property that has not been placed into productive service as of the respective consolidated balance sheet date.

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LEASES (Tables)

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Summary of lease cost

We have noncancellable operating leases for railcars, buildings, storage tanks, offices, railroad tracks, and land.

	Three Months Ended March 31, 2022
Weighted-average discount rate	5.9	%
Weighted average remaining lease term in years	2.51

Our total lease cost consisted of the following items for the dates indicated:

		Three Months Ended March 31,
		2022		2021
	(in thousands)
Operating lease cost		$	1,515	$	1,479
Short term lease cost		31		44
Variable lease cost		18		18
Sublease income		(1,281)		(1,348)
Total		$	283	$	193

Future minimum rental commitments under noncancelable operating leases

The maturity analysis below presents the undiscounted cash payments we expect to make each period for property that we lease from others under noncancellable operating leases as of March 31, 2022 (in thousands):

2022	$	3,382
2023	147
2024	115
2025	114
2026	117
Thereafter	505
Total lease payments	$	4,380
Less: imputed interest	(317)
Present value of lease liabilities	$	4,063

Schedule of lease income

In addition to these leases we also have lease income from storage tanks and lease income from our related party terminal services agreement associated with transloading renewable diesel at our West Colton Terminal that commenced in December 2021. Refer to Note 10. Transactions with Related Parties for additional discussion.

	Three Months Ended March 31,
	2022		2021
	(in thousands, except weighted average term)
Lease income (1)	$	2,486	$	2,185
Weighted average remaining lease term in years			3.58

(1)Lease income presented above includes lease income from related parties. Refer to Note 10. Transactions with Related Parties for additional discussion of lease income from a related party. In addition, lease income as discussed above totaling $1.6 million and $1.2 million for the three months ended March 31, 2022 and 2021, respectively, is included in “Terminalling services” and “Terminalling services — related party” revenues on our consolidated statements of operations.

Schedule of operating lease income to be received

The maturity analysis below presents the undiscounted future minimum lease payments we expect to receive from customers each period for property they lease from us under noncancellable operating leases as of March 31, 2022 (in thousands): 

2022	$	6,665
2023	2,656
2024	2,663
2025	2,656
2026	2,430
Total	$	17,070

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INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of identifiable intangible assets

The composition, gross carrying amount and accumulated amortization of our identifiable intangible assets are as follows as of the dates indicated:

	March 31, 2022		December 31, 2021
	(in thousands)
Carrying amount:
Customer service agreements	$	125,960	$	125,960
Other	106		106
Total carrying amount	126,066		126,066
Accumulated amortization:
Customer service agreements	(80,264)		(77,115)
Other	(68)		(65)
Total accumulated amortization	(80,332)		(77,180)
Total intangible assets, net	$	45,734	$	48,886

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DEBT (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Schedule of long-term debt

Our long-term debt balances included the following components as of the specified dates:

	March 31, 2022		December 31, 2021
	(in thousands)
Credit Agreement, as amended	$	163,000	$	168,000
Less: Deferred financing costs, net	(1,725)		(1,997)
Total long-term debt, net	$	161,275	$	166,003

Schedule of line of credit facilities

We determined the capacity available to us under the terms of our Credit Agreement, as amended, was as follows as of the specified dates:

	March 31, 2022		December 31, 2021
	(in millions)
Aggregate borrowing capacity under Credit Agreement, as amended	$	275.0	$	275.0
Less: Amounts outstanding under the Credit Agreement, as amended	163.0		168.0
Available under the Credit Agreement, as amended, based on capacity	$	112.0	$	107.0
Available under the Credit Agreement, as amended, based on covenants (1)	$	66.9	$	80.0

(1)    Pursuant to the terms of our Credit Agreement, as amended, our borrowing capacity, currently, is limited to 4.5 times our trailing 12-month consolidated EBITDA.

Schedule of interest expense, net

Interest expense associated with our outstanding indebtedness was as follows for the specified periods:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Interest expense on the Credit Agreement, as amended	$	1,113	$	1,528
Amortization of deferred financing costs	272		207
Total interest expense	$	1,385	$	1,735

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TRANSACTIONS WITH RELATED PARTIES (Tables)

3 Months Ended

Mar. 31, 2022

Related Party Transactions [Abstract]

Schedule of deferred revenue, current portion - related party

Our related party revenues from USD and affiliates are presented below in the following table for the indicated periods:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Terminalling services — related party	$	655	$	1,103
Fleet leases — related party	912		984
Fleet services — related party	299		227
	$	1,866	$	2,314

We had the following amounts outstanding with USD and affiliates on our consolidated balance sheets as presented below in the following table for the indicated periods:

	March 31, 2022		December 31, 2021
	(in thousands)
Accounts receivable — related party	$	2,817	$	2,953
Accounts payable and accrued expenses — related party (1)	$	42	$	63
Other current and non-current assets — related party (2)	$	2,460	$	2,487
Other current liabilities — related party (3)	$	48	$	64

(1)Does not include amounts payable to related parties associated with the Omnibus Agreement, as discussed above.

(2)Includes a contract asset associated with the Hardisty Terminal Services Agreement with USDTC II, as discussed above.

(3)Represents a contract liability associated with a lease agreement with USDM and cumulative revenue that has been deferred due to tiered billing provisions.

Distributions made to general and limited partner, by distribution

We paid the following aggregate cash distributions to USDG as a holder of our common units and to USD Partners GP LLC as sole holder of our general partner interest and IDRs.

Distribution Declaration Date	Record Date	Distribution Payment Date	Amount Paid to  USDG		Amount Paid to USD Partners GP LLC
			(in thousands)
January 26, 2022	February 9, 2022	February 18, 2022	$	1,398	$	56

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SEGMENT REPORTING (Tables)

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Summary of reportable segment data for continuing operations

	Three Months Ended March 31, 2022
	Terminalling services		Fleet services		Corporate		Total
	(in thousands)
Revenues
Terminalling services	$	28,185	$	—	$	—	$	28,185
Terminalling services — related party	655		—		—		655
Fleet leases — related party	—		912		—		912
Fleet services	—		—		—		—
Fleet services — related party	—		299		—		299
Freight and other reimbursables	78		—		—		78
Total revenues	28,918		1,211		—		30,129
Operating costs
Subcontracted rail services	3,252		—		—		3,252
Pipeline fees	6,060		—		—		6,060
Freight and other reimbursables	78		—		—		78
Operating and maintenance	4,247		993		—		5,240
Selling, general and administrative	1,296		57		3,902		5,255
Depreciation and amortization	5,507		—		—		5,507
Total operating costs	20,440		1,050		3,902		25,392
Operating income (loss)	8,478		161		(3,902)		4,737
Interest expense	—		—		1,385		1,385
Gain associated with derivative instruments	—		—		(6,084)		(6,084)
Foreign currency transaction loss (gain)	98		—		(51)		47
Other income, net	(23)		—		—		(23)
Provision for income taxes	357		64		—		421
Net income	$	8,046	$	97	$	848	$	8,991

	Three Months Ended March 31, 2021
	Terminalling services		Fleet services		Corporate		Total
	(in thousands)
Revenues
Terminalling services	$	28,105	$	—	$	—	$	28,105
Terminalling services — related party	1,103		—		—		1,103
Fleet leases — related party	—		984		—		984
Fleet services	—		24		—		24
Fleet services — related party	—		227		—		227
Freight and other reimbursables	124		32		—		156
Total revenues	29,332		1,267		—		30,599
Operating costs
Subcontracted rail services	3,141		—		—		3,141
Pipeline fees	6,046		—		—		6,046
Freight and other reimbursables	124		32		—		156
Operating and maintenance	3,924		998		—		4,922
Selling, general and administrative	1,019		92		3,622		4,733
Depreciation and amortization	5,471		—		—		5,471
Total operating costs	19,725		1,122		3,622		24,469
Operating income (loss)	9,607		145		(3,622)		6,130
Interest expense	—		—		1,735		1,735
Gain associated with derivative instruments	—		—		(3,076)		(3,076)
Foreign currency transaction loss (gain)	133		—		(194)		(61)
Other income, net	(20)		—		—		(20)
Provision for income taxes	197		27		—		224
Net income (loss)	$	9,297	$	118	$	(2,087)	$	7,328

Reconciliation of adjusted EBITDA to loss from continuing operations

The following tables present the computation of Segment Adjusted EBITDA, which is a measure determined in accordance with GAAP, for each of our segments for the periods indicated:

		Three Months Ended March 31,
Terminalling Services Segment		2022		2021
	(in thousands)
Net income		$	8,046	$	9,297
Interest income (1)		(1)		(1)
Depreciation and amortization		5,507		5,471
Provision for income taxes		357		197
Foreign currency transaction loss (2)		98		133
Non-cash deferred amounts (3)		(1,225)		1,683
Segment Adjusted EBITDA		$	12,782	$	16,780

(1)    Represents interest income associated with our Terminalling Services segment that is included in “Other income, net” in our consolidated statements of operations.

(2)    Represents foreign exchange transaction amounts associated with activities between our U.S. and Canadian subsidiaries.

(3)    Represents the change in non-cash contract assets and liabilities associated with revenue recognized at blended rates based on tiered rate structures in certain of our customer contracts and deferred revenue associated with deficiency credits that are expected to be used in the future prior to their expiration. Amounts presented are net of the corresponding prepaid Gibson pipeline fee that will be recognized as expense concurrently with the recognition of revenue.

		Three Months Ended March 31,
Fleet Services Segment		2022		2021
	(in thousands)
Net income		$	97	$	118
Provision for income taxes		64		27
Segment Adjusted EBITDA		$	161	$	145

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DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of derivative positions included in the consolidated balance sheets at fair value

We record all of our derivative financial instruments at their fair values in the line items specified below within our consolidated balance sheets, the amounts of which were as follows at the dates indicated:

	March 31, 2022		December 31, 2021
	(in thousands)
Other current assets	$	1,431	$	—
Other non-current assets	6,338		1,995
Other current liabilities	$	—	$	(583)
	$	7,769	$	1,412

Schedule of gain (loss) on derivative instruments

In connection with our derivative activities, we recognized the following amounts during the periods presented:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Gain associated with derivative instruments	$	(6,084)	$	(3,076)

Schedule of derivative instruments

The following table presents summarized information about the fair values of our outstanding interest rate contracts for the periods indicated:

					March 31, 2022		December 31, 2021
	Notional		Interest Rate Parameters		Fair Value		Fair Value
					(in thousands)
Swap Agreements
Swap maturing August 2025	$	150,000,000	0.84	%	$	7,769	$	1,412

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UNIT BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Schedule of share-based compensation, activity

The following tables present the award activity for our Equity-classified Phantom Units:

	Director and Independent Consultant Phantom Units	Employee Phantom Units	Weighted-Average Grant Date Fair Value Per Phantom Unit
Phantom Unit awards at December 31, 2021	26,272	1,317,493	$	8.21
Granted	39,408	514,434	$	5.85
Vested	(26,272)	(504,588)	$	9.07
Forfeited	—	—	$	—
Phantom Unit awards at March 31, 2022	39,408	1,327,339	$	6.92

	Director and Independent Consultant Phantom Units	Employee Phantom Units	Weighted-Average Grant Date Fair Value Per Phantom Unit
Phantom Unit awards at December 31, 2020	40,065	1,324,837	$	10.98
Granted	40,065	573,204	$	4.82
Vested	(40,065)	(517,514)	$	11.33
Forfeited	—	(2,075)	$	8.44
Phantom Unit awards at March 31, 2021	40,065	1,378,452	$	8.18

The following tables present the award activity for our Liability-classified Phantom Units:

	Director and Independent Consultant Phantom Units	Employee Phantom Units	Weighted-Average Grant Date Fair Value Per Phantom Unit
Phantom Unit awards at December 31, 2021	13,136	63,730	$	7.26
Granted	13,136	36,459	$	5.85
Vested	(13,136)	—	$	4.82
Phantom Unit awards at March 31, 2022	13,136	100,189	$	6.92

	Director and Independent Consultant Phantom Units	Employee Phantom Units	Weighted-Average Grant Date Fair Value Per Phantom Unit
Phantom Unit awards at December 31, 2020	13,136	59,284	$	10.58
Granted	13,136	41,138	$	4.82
Vested	(13,136)	—	$	10.15
Phantom Unit awards at March 31, 2021	13,136	100,422	$	7.88

Schedule of phantom units granted

We made payments to holders of the Phantom Units pursuant to the associated DERs we granted to them under the Award Agreements as follows:

		Three Months Ended March 31,
		2022		2021
	(in thousands)
Equity-classified Phantom Units (1)		$	163	$	152
Liability-classified Phantom Units		9		8
Total		$	172	$	160

(1)    We reclassified $2 thousand for the three months ended March 31, 2021, to unit based compensation expense for DERs paid in relation to Phantom Units that have been forfeited. We had no reclassifications for the three months ended March 31, 2022

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SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

3 Months Ended

Mar. 31, 2022

Supplemental Cash Flow Elements [Abstract]

Schedule of supplemental cash flow disclosures

The following table provides supplemental cash flow information for the periods indicated:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Cash paid for income taxes	$	533	$	286
Cash paid for interest	$	1,116	$	1,549
Cash paid for operating leases	$	1,838	$	1,566

For the three months ended March 31, 2022 and 2021, we had non-cash investing activities for capital expenditures for property and equipment that were financed through “Accounts payable and accrued expenses” as presented in the table below for the periods indicated:

	Three months ended March 31,
	2022		2021
	(in thousands)
Property and equipment financed through accounts payable and accrued expenses	$	(135)	$	136

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SUBSEQUENT EVENTS (Tables)

3 Months Ended

Mar. 31, 2022

Subsequent Events [Abstract]

Business acquisition, pro forma consolidated financial information

The following table presents unaudited pro forma consolidated financial information for the periods indicated as if the closing of our drop down acquisition of the Hardisty South Terminal had occurred as of January 1, 2021:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
Total revenues	$	35,786	$	43,626
Net income	$	10,362	$	15,155

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NET INCOME PER LIMITED PARTNER INTEREST - Schedule of Distribution Method to Limited and General Partners (Details)	3 Months Ended
	Mar. 31, 2022 $ / shares
USD Partners GP LLC | USD PARTNERS LP | General Partner
Distribution Made to Limited Partner [Line Items]
General partner interest percentage	1.60%
Minimum Quarterly Distribution
Distribution Made to Limited Partner [Line Items]
Percentage Distributed to Limited Partners	98.00%
Percentage distributed to general partner (including IDRs)	2.00%
First Target Distribution
Distribution Made to Limited Partner [Line Items]
Percentage Distributed to Limited Partners	98.00%
Percentage distributed to general partner (including IDRs)	2.00%
Second Target Distribution
Distribution Made to Limited Partner [Line Items]
Percentage Distributed to Limited Partners	85.00%
Percentage distributed to general partner (including IDRs)	15.00%
Third Target Distribution
Distribution Made to Limited Partner [Line Items]
Percentage Distributed to Limited Partners	75.00%
Percentage distributed to general partner (including IDRs)	25.00%
Thereafter
Distribution Made to Limited Partner [Line Items]
Percentage Distributed to Limited Partners	50.00%
Percentage distributed to general partner (including IDRs)	50.00%
General Partner | USD Partners GP LLC | USD PARTNERS LP
Distribution Made to Limited Partner [Line Items]
General partner interest percentage	2.00%
Minimum | First Target Distribution
Distribution Made to Limited Partner [Line Items]
Portion of quarterly distribution per unit (usd per share)	$ 0.2875
Minimum | Second Target Distribution
Distribution Made to Limited Partner [Line Items]
Portion of quarterly distribution per unit (usd per share)	0.330625
Minimum | Third Target Distribution
Distribution Made to Limited Partner [Line Items]
Portion of quarterly distribution per unit (usd per share)	0.359375
Minimum | Thereafter
Distribution Made to Limited Partner [Line Items]
Portion of quarterly distribution per unit (usd per share)	0.431250
Maximum | Minimum Quarterly Distribution
Distribution Made to Limited Partner [Line Items]
Portion of quarterly distribution per unit (usd per share)	0.2875
Maximum | First Target Distribution
Distribution Made to Limited Partner [Line Items]
Portion of quarterly distribution per unit (usd per share)	0.330625
Maximum | Second Target Distribution
Distribution Made to Limited Partner [Line Items]
Portion of quarterly distribution per unit (usd per share)	0.359375
Maximum | Third Target Distribution
Distribution Made to Limited Partner [Line Items]
Portion of quarterly distribution per unit (usd per share)	$ 0.431250

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NET INCOME PER LIMITED PARTNER INTEREST - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Limited Partners' Capital Account [Line Items]
Net income attributable to general and limited partner interests in USD Partners LP	$ 8,991,000	$ 7,328,000
Less: Distributable earnings	3,636,000	3,303,000
Excess net income	$ 5,355,000	$ 4,025,000
Weighted average units outstanding (in shares)	27,901,000	27,491,000
Partners share targeted year-to-date distribution amount (usd per share)	$ 0.1235	$ 0.1135
Partners' annual distribution amount per share (usd per share)	$ 0.494	$ 0.454
Antidilutive securities excluded from computation of earnings per share, amount (in shares)	1,366,747	1,418,517
Phantom share units (PSUs)
Limited Partners' Capital Account [Line Items]
Equity-classified phantom units		$ 161,000
Distributable amount	$ 167,000
Common Units
Limited Partners' Capital Account [Line Items]
Weighted average units outstanding (in shares)	27,440,000	27,030,000
Limited Partner | Common Units
Limited Partners' Capital Account [Line Items]
Net income attributable to general and limited partner interests in USD Partners LP	$ 8,842,000	$ 7,204,000
Less: Distributable earnings	3,633,000	3,248,000
Excess net income	$ 5,209,000	$ 3,956,000
Weighted average units outstanding (in shares)	27,440,000	27,030,000
Distributable earnings per unit (usd per share)	$ 0.13	$ 0.12
Underdistributed earnings per unit (usd per share)	0.19	0.15
Net income per limited partner unit - basic (usd per share)	0.32	0.27
Net income per limited partner unit - diluted (usd per share)	$ 0.32	$ 0.27
Equity-classified phantom units	$ 3,459,000	$ 3,129,000
General Partner
Limited Partners' Capital Account [Line Items]
Net income attributable to general and limited partner interests in USD Partners LP	149,000	124,000
Less: Distributable earnings	3,000	55,000
Excess net income	$ 146,000	$ 69,000
Weighted average units outstanding (in shares)	461,000	461,000
Equity-classified phantom units	$ 59,000	$ 54,000
General Partner | Incentive distribution rights
Limited Partners' Capital Account [Line Items]
Equity-classified phantom units	$ 0	$ 0

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NET INCOME PER LIMITED PARTNER INTEREST - Narrative (Details)	Apr. 06, 2022 shares
Hardisty South Terminal | Subsequent Event
Business Acquisition [Line Items]
Number of common units acquired (in shares)	5,751,136

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REVENUES - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) segment	Dec. 31, 2021 USD ($)
Disaggregation of Revenue [Line Items]
Number of reportable segments | segment	2
Contract duration	one year or less
Breakage rate percentage	99.00%
Deferred revenue	$ 5,850	$ 6,889
Estimated breakage bssociated with the make-upright options
Disaggregation of Revenue [Line Items]
Deferred revenue	$ 100	$ 1,400

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REVENUES - Schedule of Geographic Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Related party
Disaggregation of Revenue [Line Items]
Revenues	$ 1,866	$ 2,314
Third party
Disaggregation of Revenue [Line Items]
Revenues	28,263	28,285
U.S. | Related party
Disaggregation of Revenue [Line Items]
Revenues	1,866	2,314
U.S. | Third party
Disaggregation of Revenue [Line Items]
Revenues	7,336	7,638
Canada | Related party
Disaggregation of Revenue [Line Items]
Revenues	0	0
Canada | Third party
Disaggregation of Revenue [Line Items]
Revenues	$ 20,927	$ 20,647

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REVENUES - Schedule of Remaining Performance Obligation (Details) $ in Thousands	Mar. 31, 2022 USD ($) $ / $
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 238,868
Exchange rate (USD per CAD) | $ / $	0.7895
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 52,809
Expected timing of satisfaction, period	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 37,797
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 19,551
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 19,551
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 19,551
Expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 89,609
Expected timing of satisfaction, period	0 years
Terminalling services
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 237,972
Terminalling services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 51,913
Expected timing of satisfaction, period	9 months
Terminalling services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 37,797
Expected timing of satisfaction, period	1 year
Terminalling services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 19,551
Expected timing of satisfaction, period	1 year
Terminalling services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 19,551
Expected timing of satisfaction, period	1 year
Terminalling services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 19,551
Expected timing of satisfaction, period	1 year
Terminalling services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 89,609
Expected timing of satisfaction, period	0 years
Fleet services
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 896
Fleet services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 896
Expected timing of satisfaction, period	9 months
Fleet services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 0
Expected timing of satisfaction, period	1 year
Fleet services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 0
Expected timing of satisfaction, period	1 year
Fleet services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 0
Expected timing of satisfaction, period	1 year
Fleet services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 0
Expected timing of satisfaction, period	1 year
Fleet services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 0
Expected timing of satisfaction, period	0 years

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REVENUES - Schedule of Change in Customer Liability (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Change In Contract With Customer Liability [Roll Forward]
Deferred revenue, beginning of the period	$ 6,889
Cash Additions for Customer Prepayments	5,850
Balance Sheet Reclassification	0
Revenue Recognized	(6,889)
Deferred revenue, end of the period	5,850
Estimated breakage bssociated with the make-upright options
Change In Contract With Customer Liability [Roll Forward]
Deferred revenue, beginning of the period	1,400
Deferred revenue, end of the period	100
Other current liabilities
Change In Contract With Customer Liability [Roll Forward]
Contract with customer, liability beginning of the period	5,062
Cash Additions for Customer Prepayments	0
Balance Sheet Reclassification	2,035
Revenue Recognized	(457)
Contract with customer, liability end of the period	6,640
Other non-current liabilities
Change In Contract With Customer Liability [Roll Forward]
Contract with customer, liability beginning of the period	7,648
Cash Additions for Customer Prepayments	561
Balance Sheet Reclassification	(2,035)
Revenue Recognized	0
Contract with customer, liability end of the period	6,174
Third party
Change In Contract With Customer Liability [Roll Forward]
Effect of exchange rate on contract with customer liability, current	78
Effect of exchange rate on contract with customer liability	$ 118

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RESTRICTED CASH (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Cash and Cash Equivalents [Abstract]
Cash and cash equivalents	$ 4,495	$ 3,747	$ 3,066
Restricted Cash	7,439	7,176	7,955
Total cash, cash equivalents and restricted cash	$ 11,934	$ 10,923	$ 11,021	$ 10,994

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PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 191,492	$ 190,286
Accumulated depreciation	(60,853)	(58,045)
Construction in progress	807	861
Property and equipment, net	131,446	133,102
Land
Property, Plant and Equipment [Line Items]
Total property and equipment	10,344	10,298
Trackage and facilities
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 130,257	129,242
Trackage and facilities | Minimum
Property, Plant and Equipment [Line Items]
Property plant and equipment, estimated depreciable useful life	10 years
Trackage and facilities | Maximum
Property, Plant and Equipment [Line Items]
Property plant and equipment, estimated depreciable useful life	30 years
Pipeline
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 32,735	32,735
Pipeline | Minimum
Property, Plant and Equipment [Line Items]
Property plant and equipment, estimated depreciable useful life	20 years
Pipeline | Maximum
Property, Plant and Equipment [Line Items]
Property plant and equipment, estimated depreciable useful life	30 years
Equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 18,088	17,944
Equipment | Minimum
Property, Plant and Equipment [Line Items]
Property plant and equipment, estimated depreciable useful life	3 years
Equipment | Maximum
Property, Plant and Equipment [Line Items]
Property plant and equipment, estimated depreciable useful life	20 years
Furniture
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 68	$ 67
Furniture | Minimum
Property, Plant and Equipment [Line Items]
Property plant and equipment, estimated depreciable useful life	5 years
Furniture | Maximum
Property, Plant and Equipment [Line Items]
Property plant and equipment, estimated depreciable useful life	10 years

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PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Property, Plant and Equipment [Abstract]
Depreciation and amortization	$ 2.3	$ 2.3

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LEASES - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Leases [Abstract]
Weighted-average discount rate	5.90%
Weighted average remaining lease term in years	2 years 6 months 3 days
Operating lease cost	$ 1,515	$ 1,479
Short term lease cost	31	44
Variable lease cost	18	18
Sublease income	(1,281)	(1,348)
Total	$ 283	$ 193

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LEASES - Future payments (Details) $ in Thousands	Mar. 31, 2022 USD ($)
Leases [Abstract]
2022	$ 3,382
2023	147
2024	115
2025	114
2026	117
Thereafter	505
Total lease payments	4,380
Less: imputed interest	(317)
Present value of lease liabilities	$ 4,063

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LEASES - Lease Income Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Lessee, Lease, Description [Line Items]
Lease income	$ 2,486	$ 2,185
Weighted average remaining lease term in years		3 years 6 months 29 days
Terminalling services
Lessee, Lease, Description [Line Items]
Revenue from contract with a customer excluding assessed tax	28,185	$ 28,105
Terminalling services | Crude oil storage tanks
Lessee, Lease, Description [Line Items]
Revenue from contract with a customer excluding assessed tax	$ 1,600	$ 1,200

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LEASES - Future Lease Income (Details) $ in Thousands	Mar. 31, 2022 USD ($)
Leases [Abstract]
2022	$ 6,665
2023	2,656
2024	2,663
2025	2,656
2026	2,430
Total	$ 17,070

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INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Carrying amount:
Total carrying amount	$ 126,066	$ 126,066
Accumulated amortization:
Total accumulated amortization	(80,332)	(77,180)
Total intangible assets, net	45,734	48,886
Customer service agreements
Carrying amount:
Total carrying amount	125,960	125,960
Accumulated amortization:
Total accumulated amortization	(80,264)	(77,115)
Other
Carrying amount:
Total carrying amount	106	106
Accumulated amortization:
Total accumulated amortization	$ (68)	$ (65)

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INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 3.2	$ 3.2

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DEBT - Narrative (Details) - Credit Facility - Secured Debt - USD ($)		3 Months Ended
	Oct. 29, 2021	Mar. 31, 2022	Dec. 31, 2021
Line of Credit Facility [Line Items]
Period of extension of maturity date	1 year
Maximum borrowing capacity		$ 275,000,000.0	$ 275,000,000.0
Revolving Credit Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 275,000,000
Line of credit facility, accordion feature, higher borrowing capacity option	390,000,000
Interest rate during period		2.71%	2.35%
Commitment fee percentage		0.375%
Standby Letters of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity	20,000,000
Swingline Sub-facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 20,000,000

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DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Total long-term debt, net	$ 161,275	$ 166,003
Secured Debt | Credit Facility
Debt Instrument [Line Items]
Less: Deferred financing costs, net	(1,725)	(1,997)
Revolving Credit Facility | Secured Debt | Credit Facility
Debt Instrument [Line Items]
Credit Agreement, as amended	$ 163,000	$ 168,000

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DEBT - Schedule of Line of Credit Facilities (Details) - Secured Debt - Credit Facility	3 Months Ended
	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Oct. 29, 2021 USD ($)
Line of Credit Facility [Line Items]
Aggregate borrowing capacity under Credit Agreement, as amended	$ 275,000,000.0	$ 275,000,000.0
Available under the Credit Agreement, as amended, based on capacity	112,000,000.0	107,000,000.0
Available under the Credit Agreement, as amended, based on covenants	$ 66,900,000	80,000,000.0
Borrowing capacity limit multiple of EBITDA	4.5
Revolving Credit Facility
Line of Credit Facility [Line Items]
Aggregate borrowing capacity under Credit Agreement, as amended			$ 275,000,000
Less: Amounts outstanding under the Credit Agreement, as amended	$ 163,000,000.0	$ 168,000,000.0

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DEBT - Schedule of Interest Expense, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Debt Disclosure [Abstract]
Interest expense on the Credit Agreement, as amended	$ 1,113	$ 1,528
Amortization of deferred financing costs	272	207
Total interest expense	$ 1,385	$ 1,735

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COLLABORATIVE ARRANGEMENT (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Pipeline fees
Disaggregation of Revenue [Line Items]
Operating costs	$ 6,060	$ 6,046

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TRANSACTIONS WITH RELATED PARTIES - Narrative (Details) $ in Thousands			1 Months Ended	3 Months Ended
	Apr. 06, 2022 USD ($) shares	Mar. 27, 2022 USD ($)	Jun. 30, 2021	Mar. 31, 2022 USD ($) railcar barrel shares	Mar. 31, 2021 USD ($) shares	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020 shares
Related Party Transaction [Line Items]
Amount of transloading capacity per day per unit train | railcar				120
Number of barrels of takeaway capacity per day | barrel				112,500
Selling, general and administrative costs				$ 5,255	$ 4,733
Accounts payable and accrued expenses — related party				2,393		$ 1,486
Hardisty South Terminal
Related Party Transaction [Line Items]
Percentage of business acquired		100.00%
Consideration in cash		$ 75,000
Hardisty South Terminal | Subsequent Event
Related Party Transaction [Line Items]
Percentage of business acquired	100.00%
Consideration in cash	$ 75,000
Number of common units acquired (in shares) | shares	5,751,136
Limited Partner | USDG | Omnibus Agreement
Related Party Transaction [Line Items]
Selling, general and administrative costs				2,000	1,700
Accounts payable and accrued expenses — related party				$ 2,400		1,400
Subsidiaries | USDCF | Marketing Services Agreement
Related Party Transaction [Line Items]
Agreement term			5 years
Subsidiaries | USDM | Marketing Services Agreement
Related Party Transaction [Line Items]
Number of railcars leased | railcar				200
Related party | USD Terminal Canada II | Hardisty Terminal Services Agreement
Related Party Transaction [Line Items]
Operating and maintenance				$ 2,100	$ 2,100
Contract asset				$ 2,500		$ 2,500
USDG | USD PARTNERS LP | Limited Partner
Related Party Transaction [Line Items]
Limited partner interest percentage				41.20%
USD Partners GP LLC | USD PARTNERS LP | General Partner
Related Party Transaction [Line Items]
General partner interest percentage				1.60%
General Partner
Related Party Transaction [Line Items]
Partners' capital account (in shares) | shares				461,136	461,136	461,136	461,136
General Partner | USD Partners GP LLC
Related Party Transaction [Line Items]
Partners' capital account (in shares) | shares				461,136
General Partner | USD Partners GP LLC | USD PARTNERS LP
Related Party Transaction [Line Items]
General partner interest percentage				2.00%
Common Units | Limited Partner
Related Party Transaction [Line Items]
Partners' capital account (in shares) | shares				27,619,909	27,224,441	27,268,878	26,844,715
Common Units | Limited Partner | USDG
Related Party Transaction [Line Items]
Partners' capital account (in shares) | shares				11,557,090
Amount pledged as collateral				$ 15,000

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TRANSACTIONS WITH RELATED PARTIES - Schedule of Deferred Revenue, Current Portion - Related Party (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Related Party Transaction [Line Items]
Accounts receivable — related party	$ 2,817		$ 2,953
Other current liabilities — related party	48		64
Terminalling and Fleets Services Agreements
Related Party Transaction [Line Items]
Other current liabilities — related party	48		64
Lease revenues | Terminalling and Fleets Services Agreements
Related Party Transaction [Line Items]
Other current and non-current assets — related party	2,460		2,487
USD Marketing | Related party
Related Party Transaction [Line Items]
Related party	1,866	$ 2,314
USD Marketing | Terminalling services — related party | Related party
Related Party Transaction [Line Items]
Related party	655	1,103
USD Marketing | Fleet leases — related party | Related party
Related Party Transaction [Line Items]
Related party	912	984
USD Marketing | Fleet services — related party | Related party
Related Party Transaction [Line Items]
Related party	299	$ 227
USD Marketing | Lease revenues | Terminalling and Fleets Services Agreements
Related Party Transaction [Line Items]
Accounts receivable — related party	2,817		2,953
Accounts payable and accrued expenses — related party	$ 42		$ 63

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TRANSACTIONS WITH RELATED PARTIES - Schedule of Cash Distributions (Details) $ in Thousands	Feb. 18, 2022 USD ($)
USDG
Related Party Transaction [Line Items]
Amount Paid to USDG	$ 1,398
USD Group GP LLC
Related Party Transaction [Line Items]
Amount Paid to USD Partners GP LLC	$ 56

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SEGMENT REPORTING - Narrative (Details)	3 Months Ended
	Mar. 31, 2022 segment
Segment Reporting [Abstract]
Number of reportable segments	2

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SEGMENT REPORTING - Summary of Reportable Segment Data for Continuing Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues
Fleet leases — related party	$ 2,486	$ 2,185
Total revenues	30,129	30,599
Operating costs
Operating and maintenance	5,240	4,922
Selling, general and administrative	5,255	4,733
Depreciation and amortization	5,507	5,471
Total operating costs	25,392	24,469
Operating income (loss)	4,737	6,130
Interest expense	1,385	1,735
Gain associated with derivative instruments	(6,084)	(3,076)
Foreign currency transaction loss (gain)	47	(61)
Other income, net	(23)	(20)
Provision for income taxes	421	224
Net income	8,991	7,328
Related party
Revenues
Revenues	1,866	2,314
Fleet leases — related party	912	984
Operating Segments | Terminalling services
Revenues
Total revenues	28,918	29,332
Operating costs
Operating and maintenance	4,247	3,924
Selling, general and administrative	1,296	1,019
Depreciation and amortization	5,507	5,471
Total operating costs	20,440	19,725
Operating income (loss)	8,478	9,607
Interest expense	0	0
Gain associated with derivative instruments	0	0
Foreign currency transaction loss (gain)	98	133
Other income, net	(23)	(20)
Provision for income taxes	357	197
Net income	8,046	9,297
Operating Segments | Terminalling services | Related party
Revenues
Fleet leases — related party	0	0
Operating Segments | Fleet services
Revenues
Total revenues	1,211	1,267
Operating costs
Operating and maintenance	993	998
Selling, general and administrative	57	92
Depreciation and amortization	0	0
Total operating costs	1,050	1,122
Operating income (loss)	161	145
Interest expense	0	0
Gain associated with derivative instruments	0	0
Foreign currency transaction loss (gain)	0	0
Other income, net	0	0
Provision for income taxes	64	27
Net income	97	118
Operating Segments | Fleet services | Related party
Revenues
Fleet leases — related party	912	984
Corporate
Revenues
Total revenues	0	0
Operating costs
Operating and maintenance	0	0
Selling, general and administrative	3,902	3,622
Depreciation and amortization	0	0
Total operating costs	3,902	3,622
Operating income (loss)	(3,902)	(3,622)
Interest expense	1,385	1,735
Gain associated with derivative instruments	(6,084)	(3,076)
Foreign currency transaction loss (gain)	(51)	(194)
Other income, net	0	0
Provision for income taxes	0	0
Net income	848	(2,087)
Corporate | Related party
Revenues
Fleet leases — related party	0	0
Terminalling services
Revenues
Revenues	28,185	28,105
Terminalling services | Related party
Revenues
Revenues	655	1,103
Terminalling services | Operating Segments | Terminalling services
Revenues
Revenues	28,185	28,105
Terminalling services | Operating Segments | Terminalling services | Related party
Revenues
Revenues	655	1,103
Terminalling services | Operating Segments | Fleet services
Revenues
Revenues	0	0
Terminalling services | Operating Segments | Fleet services | Related party
Revenues
Revenues	0	0
Terminalling services | Corporate
Revenues
Revenues	0	0
Terminalling services | Corporate | Related party
Revenues
Revenues	0	0
Fleet services
Revenues
Revenues	0	24
Fleet services | Related party
Revenues
Revenues	299	227
Fleet services | Operating Segments | Terminalling services
Revenues
Revenues	0	0
Fleet services | Operating Segments | Terminalling services | Related party
Revenues
Revenues	0	0
Fleet services | Operating Segments | Fleet services
Revenues
Revenues	0	24
Fleet services | Operating Segments | Fleet services | Related party
Revenues
Revenues	299	227
Fleet services | Corporate
Revenues
Revenues	0	0
Fleet services | Corporate | Related party
Revenues
Revenues	0	0
Freight and other reimbursables
Revenues
Revenues	78	156
Operating costs
Operating costs	78	156
Freight and other reimbursables | Operating Segments | Terminalling services
Revenues
Revenues	78	124
Operating costs
Operating costs	78	124
Freight and other reimbursables | Operating Segments | Fleet services
Revenues
Revenues	0	32
Operating costs
Operating costs	0	32
Freight and other reimbursables | Corporate
Revenues
Revenues	0	0
Operating costs
Operating costs	0	0
Subcontracted rail services
Operating costs
Operating costs	3,252	3,141
Subcontracted rail services | Operating Segments | Terminalling services
Operating costs
Operating costs	3,252	3,141
Subcontracted rail services | Operating Segments | Fleet services
Operating costs
Operating costs	0	0
Subcontracted rail services | Corporate
Operating costs
Operating costs	0	0
Pipeline fees
Operating costs
Operating costs	6,060	6,046
Pipeline fees | Operating Segments | Terminalling services
Operating costs
Operating costs	6,060	6,046
Pipeline fees | Operating Segments | Fleet services
Operating costs
Operating costs	0	0
Pipeline fees | Corporate
Operating costs
Operating costs	$ 0	$ 0

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SEGMENT REPORTING - Reconciliation of Adjusted EBITDA to Loss from Continuing Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting Information [Line Items]
Net income	$ 8,991	$ 7,328
Depreciation and amortization	5,507	5,471
Provision for income taxes	421	224
Foreign currency transaction loss (gain)	47	(61)
Operating Segments | Terminalling Services Segment
Segment Reporting Information [Line Items]
Net income	8,046	9,297
Interest income	(1)	(1)
Depreciation and amortization	5,507	5,471
Provision for income taxes	357	197
Foreign currency transaction loss (gain)	98	133
Non-cash deferred amounts	(1,225)	1,683
Segment Adjusted EBITDA	12,782	16,780
Operating Segments | Fleet Services Segment
Segment Reporting Information [Line Items]
Net income	97	118
Depreciation and amortization	0	0
Provision for income taxes	64	27
Foreign currency transaction loss (gain)	0	0
Segment Adjusted EBITDA	$ 161	$ 145

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DERIVATIVE FINANCIAL INSTRUMENTS - Narrative (Details) - Swap maturing August 2025 - USD ($)	1 Months Ended
	Sep. 30, 2020	Mar. 31, 2022
Derivative [Line Items]
Derivative, term of contract	5 years
Notional amount	$ 150,000,000	$ 150,000,000
Derivative, fixed interest rate	0.84%	0.84%

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DERIVATIVE FINANCIAL INSTRUMENTS - Derivative Positions Included in the Consolidated Balance Sheets at Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Derivative [Line Items]
Fair Value	$ 7,769	$ 1,412
Other current assets
Derivative [Line Items]
Fair Value	1,431	0
Other non-current assets
Derivative [Line Items]
Fair Value	6,338	1,995
Other current liabilities
Derivative [Line Items]
Fair Value	$ 0	$ (583)

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DERIVATIVE FINANCIAL INSTRUMENTS - Gain (Loss) on Derivative Instruments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Gain associated with derivative instruments	$ (6,084)	$ (3,076)

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DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Fair Values of Outstanding Foreign Currency Options (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2020
Derivative [Line Items]
Fair Value	$ 7,769,000	$ 1,412,000
Swap maturing August 2025
Derivative [Line Items]
Notional	$ 150,000,000		$ 150,000,000
Interest Rate Parameters	0.84%		0.84%
Fair Value	$ 7,769,000	$ 1,412,000

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PARTNERS' CAPITAL (Details) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Limited Partners' Capital Account [Line Items]
Targeted quarterly distribution (usd per share)	$ 0.2875
Targeted annual distribution amount (usd per share)	1.15
Partners share targeted year-to-date distribution amount (usd per share)	$ 0.1235	$ 0.1135
Limited Partner | LTIP | First vesting tranche | Common Units
Limited Partners' Capital Account [Line Items]
Conversion of units (in shares)	351,031
Phantom share units (PSUs) | Limited Partner | LTIP | First vesting tranche
Limited Partners' Capital Account [Line Items]
Shares vested (in shares)	530,860
Units retained (in shares)	179,829

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UNIT BASED COMPENSATION - Narrative (Details) - Phantom share units (PSUs) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($) shares	Mar. 31, 2021 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	4 years
Allocated share-based compensation expense | $	$ 1.2	$ 1.5
Unit based compensation expense, unrecognized | $	$ 9.5
Weighted average recognition period	2 years 6 months 29 days
Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	1 year
LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Approved for grant (in shares) | shares	603,437	669,043
Share remaining available (in shares) | shares	157,983
Conversion ratio	1

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UNIT BASED COMPENSATION - Long-term Incentive Plan (Details) - LTIP - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Phantom Share Units (PSU) Equity Classified
Weighted-Average Grant Date Fair Value Per Phantom Unit
Grant date average fair value, beginning of period (usd per share)	$ 8.21	$ 10.98
Granted (usd per share)	5.85	4.82
Vested (usd per share)	9.07	11.33
Forfeited (usd per share)	0	8.44
Grant date average fair value, end of period (usd per share)	6.92	8.18
Phantom Share Units (PSU) Liability Classified
Weighted-Average Grant Date Fair Value Per Phantom Unit
Grant date average fair value, beginning of period (usd per share)	7.26	10.58
Granted (usd per share)	5.85	4.82
Vested (usd per share)	4.82	10.15
Grant date average fair value, end of period (usd per share)	$ 6.92	$ 7.88
Director and Independent Consultant Phantom Units | Phantom Share Units (PSU) Equity Classified
Number of units
Phantom Units, beginning of period (in shares)	26,272	40,065
Granted (in shares)	39,408	40,065
Vested (in shares)	(26,272)	(40,065)
Forfeited (in shares)	0	0
Phantom Units, end of period (in shares)	39,408	40,065
Director and Independent Consultant Phantom Units | Phantom Share Units (PSU) Liability Classified
Number of units
Phantom Units, beginning of period (in shares)	13,136	13,136
Granted (in shares)	13,136	13,136
Vested (in shares)	(13,136)	(13,136)
Phantom Units, end of period (in shares)	13,136	13,136
Employee Phantom Units | Phantom Share Units (PSU) Equity Classified
Number of units
Phantom Units, beginning of period (in shares)	1,317,493	1,324,837
Granted (in shares)	514,434	573,204
Vested (in shares)	(504,588)	(517,514)
Forfeited (in shares)	0	(2,075)
Phantom Units, end of period (in shares)	1,327,339	1,378,452
Employee Phantom Units | Phantom Share Units (PSU) Liability Classified
Number of units
Phantom Units, beginning of period (in shares)	63,730	59,284
Granted (in shares)	36,459	41,138
Vested (in shares)	0	0
Phantom Units, end of period (in shares)	100,189	100,422

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UNIT BASED COMPENSATION - Phantom Units Pursuant to Associated DERs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Distribution Equivalent Right
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-classified phantom units	$ 163	$ 152
Liability-classified Phantom Units	9	8
Total	172	160
Phantom share units (PSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-classified phantom units		161
Share-based compensation, forfeited	$ 0	$ 2

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SUPPLEMENTAL CASH FLOW INFORMATION - Schedule of Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Lessee, Lease, Description [Line Items]
Cash paid for income taxes	$ 533	$ 286
Cash paid for interest	1,116	1,549
Cash paid for operating leases	1,838	1,566
Property and equipment financed through accounts payable and accrued expenses	(135)	136
Operating lease right-of-use assets	4,214		$ 5,658
Present value of lease liabilities	4,063
New Or Extended Lease Agreements
Lessee, Lease, Description [Line Items]
Operating lease right-of-use assets	0	37
Present value of lease liabilities	$ 0	$ 37

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SUBSEQUENT EVENTS - Narrative (Details)						1 Months Ended		3 Months Ended
	May 04, 2022 USD ($)	Apr. 21, 2022 $ / shares	Apr. 19, 2022 USD ($)	Apr. 06, 2022 USD ($) shares	Mar. 27, 2022 USD ($)	May 05, 2022 USD ($)	Sep. 30, 2020 USD ($)	Mar. 31, 2022 USD ($) $ / shares	Mar. 31, 2021 $ / shares	May 02, 2022 USD ($)	Dec. 31, 2021 USD ($)	Oct. 29, 2021 USD ($)
Subsequent Event [Line Items]
Partners share targeted year-to-date distribution amount (usd per share) | $ / shares								$ 0.1235	$ 0.1135
Targeted annual distribution amount (usd per share) | $ / shares								$ 1.15
Interest Rate Swap
Subsequent Event [Line Items]
Derivative, term of contract							5 years
Notional							$ 150,000,000	$ 150,000,000
Derivative, fixed interest rate							0.84%	0.84%
Credit Facility | Secured Debt
Subsequent Event [Line Items]
Maximum borrowing capacity								$ 275,000,000.0			$ 275,000,000.0
Available under the Credit Agreement, as amended, based on capacity								$ 112,000,000.0			107,000,000.0
Borrowing capacity limit multiple of EBITDA								4.5
Revolving Credit Facility | Credit Facility | Secured Debt
Subsequent Event [Line Items]
Maximum borrowing capacity												$ 275,000,000
Long-term line of credit								$ 163,000,000.0			$ 168,000,000.0
Hardisty South Terminal
Subsequent Event [Line Items]
Percentage of business acquired					100.00%
Consideration in cash					$ 75,000,000
Subsequent Event
Subsequent Event [Line Items]
Partners share targeted year-to-date distribution amount (usd per share) | $ / shares		$ 0.1235
Subsequent Event | Interest Rate Swap
Subsequent Event [Line Items]
Derivative, term of contract			5 years
Notional			$ 175,000,000
Derivative, fixed interest rate			1.57%
Subsequent Event | Credit Facility | Secured Debt
Subsequent Event [Line Items]
Borrowing capacity limit multiple of EBITDA						5.0
Subsequent Event | Revolving Credit Facility | Credit Facility | Secured Debt
Subsequent Event [Line Items]
Proceeds from lines of credit						$ 75,000,000
Long-term line of credit										$ 238,000,000
Available under the Credit Agreement, as amended, based on capacity										$ 37,000,000
Subsequent Event | Hardisty South Terminal
Subsequent Event [Line Items]
Percentage of business acquired				100.00%
Consideration in cash				$ 75,000,000
Number of common units acquired (in shares) | shares				5,751,136
Number of common units hold by sponsors (in shares) | shares				17,308,226
Percentage of common units hold by sponsors				51.90%
Subsequent Event | Omnibus Agreement
Subsequent Event [Line Items]
Estimated expense payable to related party				$ 3,700,000
Subsequent Event | Common Units
Subsequent Event [Line Items]
Targeted annual distribution amount (usd per share) | $ / shares		$ 0.494
Distributions, limited partner	$ 2,000,000
Subsequent Event | Common Units and Subordinated Units | USDG
Subsequent Event [Line Items]
Distributions, limited partner	$ 1,500,000

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SUBSEQUENT EVENTS - Pro Forma Information (Details) - Hardisty South Terminal - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Subsequent Event [Line Items]
Total revenues	$ 35,786	$ 43,626
Net income	$ 10,362	$ 15,155