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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
⌧
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
☐
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended December 31, 2020
OR
FORM 10-K
For the transition period to
Commission File Number 001-32505
TRANSMONTAIGNE PARTNERS LLC
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
34-2037221
(I.R.S. Employer
Identification No.)
Suite 3100, 1670 Broadway
Denver, Colorado 80202
(Address, including zip code, of principal executive offices)
(303) 626-8200
(Telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Title of Each Class
Name of Each Exchange on Which Registered
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ⌧
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ⌧ No ☐
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 (§232.405 of this chapter) 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K. ⌧
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company,
or 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ⌧
The aggregate market value of common units held by non-affiliates of the registrant on June 30, 2020 was $nil.
As of the date of this filing, the registrant has no common units outstanding.
* The registrant is a voluntary filer of reports required to be filed by certain companies under Section 13 or 15(d) of the Securities Exchange Act of
1934 and has filed all reports that would have been required to have been filed by the registrant during the preceding 12 months had it been subject to such
filing requirements during the entirety of such period.
DOCUMENTS INCORPORATED BY REFERENCE
None.
Table of Contents
Item
1 and
2.
1A.
1B.
3.
4.
Business and Properties
Risk Factors
Unresolved Staff Comments
Legal Proceedings
Mine Safety Disclosures
Part I
Part II
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Page No.
5.
6.
7.
7A.
8.
9.
9A.
9B.
10.
11.
12.
13.
14.
15.
16.
Market for the Registrant’s Common Units, Related Unitholder Matters and Issuer Purchases
of Equity Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risks
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Part III
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services
Exhibits, Financial Statement Schedules
Form 10-K Summary
Part IV
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20
31
31
31
31
32
33
47
48
77
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Annual Report”) contains “forward-looking statements” within the
meaning of federal securities laws. Forward-looking statements give our current expectations, contain projections of results
of operations or of financial condition, or forecasts of future events. When used in this Annual Report, the words “could,”
“may,” “should,” “will,” “seek,” “believe,” “expect,” “anticipate,” “intend,” “continue,” “estimate,” “plan,” “target,”
“predict,” “project,” “attempt,” “is scheduled,” “likely,” “forecast,” the negatives thereof and other similar expressions are
used to identify forward-looking statements, although not all forward-looking statements contain such identifying words.
These forward-looking statements are based on our current expectations and assumptions about future events and are based
on currently available information as to the outcome and timing of future events. You are cautioned not to place undue
reliance on any forward-looking statements. When considering forward-looking statements, you should keep in mind the
risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in this Annual
Report. You should also understand that it is not possible to predict or identify all such factors and should not consider the
following list to be a complete statement of all potential risks and uncertainties. Factors that could cause our actual results
to differ materially from the results contemplated by such forward-looking statements include:
● our ability to successfully implement our business strategy;
● competitive conditions in our industry;
● actions taken by third-party customers, producers, operators, processors and transporters;
● pending legal or environmental matters;
● costs of conducting our operations;
● our ability to complete internal growth projects on time and on budget;
● general economic conditions;
● the price of oil, natural gas, natural gas liquids and other commodities in the energy industry;
● the price and availability of financing;
● large customer defaults;
● interest rates;
● operating hazards, global health epidemics, natural disasters, weather-related delays, casualty losses and other
matters beyond our control;
● uncertainty regarding our future operating results;
● effects of existing and future laws and governmental regulations;
● the effects of future litigation;
● plans, objectives, expectations and intentions contained in this Annual Report that are not historical; and
● the ongoing pandemic involving COVID-19.
All forward-looking statements, expressed or implied, included in this Annual Report are expressly qualified in
their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any
subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.
Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements,
all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this
Annual Report.
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Part I
As used in this Annual Report, unless the context requires otherwise, references to “we,” “us,” “our,”
“TransMontaigne Partners,” “the Partnership,” or “the Company” are intended to mean, prior to the Take-Private
Transaction (defined below), TransMontaigne Partners L.P., and following the Take-Private Transaction, TransMontaigne
Partners LLC, and our wholly owned and controlled operating subsidiaries. References to ‘‘TransMontaigne GP’’ or ‘‘our
general partner’’ are intended, prior to the Take-Private Transaction, to mean TransMontaigne GP L.L.C., our general
partner prior to the Take-Private Transaction. References to ‘‘ArcLight’’ are intended to mean ArcLight Energy Partners
Fund VI, L.P., its affiliates and subsidiaries other than TransMontaigne GP, us and our subsidiaries.
ITEMS 1 AND 2. BUSINESS AND PROPERTIES
On February 26, 2019, an affiliate of ArcLight completed its previously announced acquisition of all of the
Partnership’s outstanding publicly traded common units not already held by ArcLight and its affiliates by way of our
merger (the “Merger”) with a wholly owned subsidiary of TLP Finance Holdings, LLC (“TLP Finance”), an indirect
controlled subsidiary of Arclight. At the effective time of the Merger, each of the Partnership’s general partner units issued
and outstanding immediately prior to the acquisition effective time was converted into (i)(a) one Partnership common unit,
and (i)(b) in aggregate, a non-economic general partner interest in the Partnership, (ii) each of the Partnership’s incentive
distribution rights issued and outstanding immediately prior to the acquisition effective time was converted into 100
Partnership common units, (iii) our general partner distributed its common units in the Partnership (the “Transferred GP
Units”) to TLP Acquisition Holdings, LLC, a Delaware limited liability company (“TLP Holdings”), and TLP Holdings
contributed the Transferred GP Units to TLP Finance, (iv) the Partnership converted into the Company (a Delaware limited
liability company) pursuant to Section 17-219 of the Delaware Limited Partnership Act and changed its name to
“TransMontaigne Partners LLC”, and all of our common units owned by TLP Finance were converted into limited liability
company interests, (v) the non-economic interest in the Company owned by our general partner was automatically
cancelled and ceased to exist and our general partner merged with and into the Company with the Company surviving, and
(vi) the Company became 100% owned by TLP Finance (the transactions described in the foregoing clauses (i) through
(vi), collectively with the Merger, the “Take-Private Transaction”).
As a result of the Take-Private Transaction, our common units ceased to be publicly traded, and our common units
are no longer listed on the New York Stock Exchange (“NYSE”). Our currently outstanding 6.125% senior unsecured notes
due in 2026 remain outstanding, and the Company is voluntarily filing with the Securities and Exchange Commission
pursuant to the covenants contained in those notes.
Effective June 1, 2019, TLP Finance contributed all of the issued and outstanding equity of its wholly-owned
subsidiary, TLP Management Services LLC (“TMS” and such interest, the “TMS Interest”) to the Company, and the
Company immediately contributed the TMS Interest to its 100% owned operating company subsidiary TransMontaigne
Operating Company L.P. (the “TMS Contribution”). Prior to the TMS Contribution, we had no employees and all of our
management and operational activities were provided by TMS. Further, TMS provided all payroll programs and maintained
all employee benefits programs on behalf of our company with respect to applicable TMS employees (as well as on behalf
of certain other Arclight affiliates). As a result of the TMS Contribution, we have assumed the employees and operational
activities previously provided by TMS, except for our executive officers as further described below. The TMS Contribution
has been recorded at carryover basis as a reorganization of entities under common control. As such, prior periods include
the assets, liabilities, and results of operations of TMS for all periods presented.
As a result of the TMS Contribution, the omnibus agreement in place in various forms since the inception of the
Partnership, and immediately prior to the TMS Contribution between TMS and us, which, among other things, governed
the provision of management and operational services provided for us by TMS, is no longer relevant and was terminated.
Following the TMS Contribution, our executive officers who provide services to the Company are employed by
TransMontaigne Management Company, LLC (“TMC”), a wholly owned subsidiary of ArcLight, which also provides
services to certain other ArcLight affiliates. As a result, we do not directly employ any of the persons responsible for the
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executive management of our business. Nonetheless, TMS continues to provide certain payroll functions and maintains all
employee benefits programs on behalf of TMC pursuant to a services agreement between TMC and TMS.
Overview
We are a terminaling and transportation company with assets and operations in the United States along the Gulf
Coast, in the Midwest, in Houston and Brownsville, Texas, along the Mississippi and Ohio Rivers, in the Southeast and
along the West Coast. We provide integrated terminaling, storage, transportation and related services for customers
engaged in the distribution and marketing of light refined petroleum products, heavy refined petroleum products,
renewable products, crude oil, chemicals, fertilizers and other liquid products. Light refined products include gasolines,
diesel fuels, heating oil and jet fuels. Heavy refined products include residual fuel oils and asphalt. Renewable products
include ethanol, biodiesel, renewable diesel and relevant feedstocks. We do not purchase or market products that we handle
or transport. Therefore, we do not have direct exposure to changes in commodity prices, except for the value of product
gains and losses arising from terminaling services agreements with certain customers, which accounts for a small portion of
our revenue.
We use our owned and operated terminaling facilities to, among other things: receive refined products and
renewable products from the pipeline, ship, barge or railcar making delivery on behalf of our customers and transfer those
products to the tanks located at our terminals; store the products in our tanks for our customers; monitor the volume of the
products stored in our tanks; distribute the products out of our terminals in vessels, railcars or truckloads using truck racks
and other distribution equipment located at our terminals, including pipelines; and heat residual fuel oils and asphalt stored
in our tanks. We also continue to provide ethanol logistics services and other services to the growing renewable products
market, as well as to engage in blending activities related to the throughput process.
Recent Developments
COVID-19. The ongoing pandemic involving COVID-19, a highly transmissible and pathogenic coronavirus, has
resulted in restrictions on, and a public response with respect to, travel and economic activity that have reduced demand
and pricing for crude oil, refined petroleum products, renewable products, and other products that we handle. The reduction
in commodity price in 2020 and demand for products that we handle has, for the time being, resulted in a strong demand
for storage capacity. For example, in late March 2020, we contracted approximately 1,000,000 barrels of capacity at our
Cushing, Oklahoma terminal and approximately 705,000 barrels of available capacity at our Collins, Mississippi terminal
that had recently become available. Currently, approximately 83% of our terminaling services revenue is derived from firm
commitments pursuant to our multi-year agreements that require our customers to make minimum payments based on
minimum volumes of throughput of the customer’s product or the volume of storage capacity available to the customer
under the agreement. Further, the majority of our terminaling services agreements have a remaining term in excess of one
year. As a result, we expect the negative impacts to our business to continue to be primarily limited to delays in our capital
expansion projects, which may be occurring, in part, due to state and local government responses to COVID-19.
We have taken proactive and sustained measures to deliver our services safely and reliably during the COVID-19
pandemic. At the outset of the pandemic, we activated an Incident Support Team to execute our Infectious Disease Control
Policy, and to focus on a number of priorities, including: (i) implement basic infection prevention techniques and other
workplace protections in our business operations; (ii) identify and isolate individuals suspected of being infected by
COVID-19; (iii) identify risk factors in our workforce that may increase the possibility of exposure to COVID-19; and (iv)
develop a contingency plan for the possibility that a serious outbreak does occur in the area of any of our terminals. We are
following recommendations from public health authorities and have taken steps to help prevent our employees’ exposure to
the spread of COVID-19, including, where practical, work-at-home plans enacted in March 2020 and the implementation
of business continuity plans to enable the integrity of our operations and protect the health of our employees.
To date, our operations and employees have not been materially impacted by the COVID-19 pandemic, including
the recent rise in caseload in the majority of the country; thereby allowing our customers continued access and utilization
of our strategic terminal network. We continue to employ all safety processes and procedures in the normal
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course. We provide an essential service across our markets, which has been recognized in most relevant regulatory
guidance regarding COVID-19. Further, we have not experienced any material instance of our customers failing to meet
their contractual commitments to us as a result of these recent developments. There continue to be too many variables and
uncertainties regarding COVID-19 — including the continued spread of the virus, the duration and severity of the
outbreak and the extent of travel restrictions and business closures, and medical advancements in treating and vaccinating
against the disease and the availability and the resulting economic impact of any such advancements or vaccinations — to
reasonably predict the potential longer-term impact of COVID-19 on our business and operations. We continue to monitor
the situation, have actively implemented policies and practices to address the situation and actively protect our employees,
and may adjust our current policies and practices as more information and guidance become available.
Expansion of Assets
Expansion of our Brownsville operations. Our Brownsville expansion project, which is underpinned by new
long-term agreements, includes the construction of approximately 805,000 barrels of additional liquids storage capacity, the
construction of gasoline railcar loading capabilities and the conversion of our Diamondback pipeline to transport diesel and
gasoline across the U.S./Mexico border. The Diamondback pipeline is comprised of an 8” pipeline that previously
transported propane, as well as a 6” pipeline, which runs parallel to the 8” pipeline, that has been idle and both can be used
to transport refined products to Matamoros, Mexico. The majority of the additional liquids storage capacity was placed into
commercial service during the first three quarters of 2019 with a remaining 175,000 barrels of capacity to be completed in
the first quarter of 2021. We expect to recommission the Diamondback pipeline and resume operations on both the 8”
pipeline and the previously idle 6” pipeline in the second quarter of 2021. We expect the construction of the gasoline railcar
loading capabilities to be completed in the first quarter 2021. The anticipated aggregate cost of these expansion efforts is
estimated to be approximately $75 million.
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Assets and Operations
Our terminals are located in six geographic regions, which we refer to as our Gulf Coast, Midwest, Brownsville,
River, Southeast and West Coast terminals. In addition, we have unconsolidated investments in Frontera and BOSTCO
(each defined below). The locations and approximate aggregate active storage capacity at our owned and joint venture
terminal facilities as of December 31, 2020 are as follows:
Our Terminals by Region:
Gulf Coast Terminals:
Port Everglades North (Fort Lauderdale), FL
Port Everglades South (Fort Lauderdale), FL (2)
Jacksonville, FL
Cape Canaveral, FL
Port Manatee, FL
Pensacola, FL
Fisher Island (Miami), FL
Tampa, FL
Gulf Coast Total
Midwest Terminals:
Rogers, AR and Mount Vernon, MO (aggregate amounts)
Cushing, OK
Oklahoma City, OK
Midwest Total
Brownsville Terminal
River Terminals:
Evansville, IN
New Albany, IN
Greater Cincinnati, KY
Henderson, KY
Louisville, KY
Owensboro, KY
Paducah, KY
Baton Rouge, LA (Dock)
Greenville, MS
Cape Girardeau, MO
East Liverpool, OH
River Total
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Active storage
capacity (1)
(shell bbls)
2,487,000
376,000
271,000
724,000
1,293,000
270,000
673,000
760,000
6,854,000
419,000
1,005,000
158,000
1,582,000
1,471,000
245,000
201,000
199,000
170,000
183,000
154,000
322,000
—
406,000
140,000
228,000
2,248,000
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Southeast Terminals:
Albany, GA
Americus, GA
Athens, GA
Bainbridge, GA
Birmingham, AL
Charlotte, NC
Collins/Purvis, MS (Collins terminal)
Collins, MS (Collins rack)
Doraville, GA
Fairfax, VA
Greensboro, NC
Griffin, GA
Lookout Mountain, GA
Macon, GA
Meridian, MS
Norfolk, VA
Richmond, VA
Rome, GA
Selma, NC
Spartanburg, SC
Southeast Total
West Coast Terminals:
Martinez, CA
Richmond, CA
West Coast Total
Our Joint Ventures Terminals:
Frontera Joint Venture Terminal (3)
BOSTCO Joint Venture Terminal (4)
TOTAL CAPACITY
Active storage
capacity (1)
(shell bbls)
203,000
98,000
203,000
367,000
178,000
121,000
6,280,000
200,000
438,000
507,000
479,000
107,000
219,000
174,000
139,000
1,336,000
448,000
152,000
529,000
166,000
12,344,000
4,754,000
642,000
5,396,000
1,656,000
7,080,000
38,631,000
(1) Active storage capacity includes terminals which do not need capital investment to contract available storage capacity.
(2) Reflects our ownership interest net of a major oil company’s ownership interest in certain tank capacity.
(3) Reflects the total active storage capacity of Frontera Brownsville LLC (“Frontera”), of which we have a 50%
ownership interest.
(4) Reflects the total active storage capacity of Battleground Oil Specialty Terminal Company LLC (“BOSTCO”), of
which we have a 42.5%, general voting, Class A Member interest.
Gulf Coast Operations. Our Gulf Coast terminals consist of eight active product terminals and comprise the
largest terminal network in Florida. These terminals have approximately 6.9 million barrels of aggregate active storage
capacity in ports including Port Everglades, Miami and Cape Canaveral, which are among the busiest cruise ship ports in
the nation. At our Gulf Coast terminals, we handle refined and renewable products and crude oil on behalf of, and provide
integrated terminaling services to, customers engaged in the distribution and marketing of products and crude oil. Our Gulf
Coast terminals receive products from vessels on behalf of our customers. In addition, our Jacksonville terminal also
receives asphalt by rail, and our Port Everglades (North) terminal also receives product by truck. We distribute by truck or
barge at all of our Gulf Coast terminals. In addition, we distribute products by pipeline at our Port Everglades and Tampa
terminals. A major oil company retains an ownership interest, ranging from 25% to 50%, in specific tank capacity at our
Port Everglades (South) terminal. We manage and operate the Port Everglades (South)
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terminal, and we are reimbursed by the major oil company for its proportionate share of our operating and maintenance
costs.
Midwest Terminals. In Missouri and Arkansas, we own and operate the Razorback pipeline and terminals in
Mount Vernon, Missouri, at the origin of the pipeline and in Rogers, Arkansas, at the terminus of the pipeline. We refer to
these two terminals collectively as the Razorback terminals. The Razorback pipeline is a 67-mile, 8-inch diameter interstate
common carrier pipeline that transports light refined product from our terminal at Mount Vernon, where it is interconnected
with a pipeline system owned by a third party, to our terminal at Rogers. The Razorback pipeline has a capacity of
approximately 30,000 barrels per day. The Razorback terminals have approximately 0.4 million barrels of aggregate active
storage capacity. Effective January 1, 2021, a third party leases the capacity, and will take operatorship, of the Razorback
pipeline and the terminals in Mount Vernon, Missouri and in Rogers, Arkansas. Our Rogers facility is the only products
terminal located in Northwest Arkansas.
We lease land in Cushing, Oklahoma and constructed storage tanks and associated infrastructure on the property
for the receipt of crude oil by truck and pipeline, the blending of crude oil and the storage of approximately 1.0 million
barrels of crude oil.
We also own and operate a terminal facility in Oklahoma City, Oklahoma with approximately 0.2 million barrels
of aggregate active storage capacity. Our Oklahoma City terminal receives gasolines and diesel fuels from a pipeline
system owned by a third party for delivery via our truck rack for redistribution to locations throughout the Oklahoma City
region.
Brownsville, Texas Operations. We own and operate a product terminal with approximately 1.5 million barrels of
aggregate active storage capacity and related ancillary facilities in Brownsville independent of the Frontera joint venture,
as well as the Diamondback pipeline which handles liquid product movements between south Texas and Mexico. At our
Brownsville terminal we handle refined petroleum products, chemicals, vegetable oils, naphtha, wax and propane on behalf
of, and provide integrated terminaling services to, customers engaged in the distribution and marketing of products and
natural gas liquids. Our Brownsville facilities receive products on behalf of our customers from vessels, by truck or railcar.
The Diamondback pipeline consists of an 8” pipeline that previously transported propane approximately 16 miles
from our Brownsville facilities to the U.S./Mexico border and a 6” pipeline, which runs parallel to the 8” pipeline that can
be used by us in the future to transport additional refined products to Matamoros, Mexico. Operations on the Diamondback
pipeline were shut down in the first quarter of 2018; however, we expect to recommission the Diamondback Pipeline and
resume operations on both the 8” pipeline, providing gasoline service thereon, and the previously idle 6” pipeline,
providing diesel service thereon, in the second quarter 2021, and have previously filed revised tariffs with the FERC to
support such activities.
River Operations. Our River terminals are composed of 11 active product terminals located along the Mississippi
and Ohio Rivers with approximately 2.2 million barrels of aggregate active storage capacity. Our River operations also
include a dock facility in Baton Rouge, Louisiana, which is the only direct waterborne connection between the Colonial
pipeline and Mississippi River waterborne transportation. At our River terminals, we handle gasolines, diesel fuels, heating
oil, chemicals and fertilizers on behalf of, and provide integrated terminaling services to, customers engaged in the
distribution and marketing of products and industrial and commercial end-users. Our River terminals receive products from
vessels and barges on behalf of our customers and distribute products primarily to trucks and barges.
Southeast Operations. Our Southeast terminals consist of 20 active product terminals located along the Colonial
and Plantation pipelines in Alabama, Georgia, Mississippi, North Carolina, South Carolina and Virginia with an aggregate
active storage capacity of approximately 12.3 million barrels. At our Southeast terminals, we handle gasolines, diesel fuels,
ethanol, biodiesel, jet fuel and heating oil on behalf of, and provide integrated terminaling services to, customers engaged
in the distribution and marketing of refined products. Our Southeast terminals primarily receive products from the
Plantation and Colonial pipelines on behalf of our customers and distribute products primarily to
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trucks with the exception of the Collins terminal. The Collins terminal is the only independent terminal capable of storing
and redelivering product to, from and between the Colonial and Plantation pipelines.
West Coast Operations. Our West Coast terminals consist of two active product terminals with approximately 5.4
million barrels of aggregate active storage capacity. The terminals are well positioned with pipeline connections to three of
the five local refineries and marine access to all five in the San Francisco Bay area and direct connection to the Northern
California products pipeline distribution system. At our West Coast terminals, we handle crude oil, gasoline, diesel, jet fuel,
gasoline blend stocks, fuel oil, Avgas and ethanol and other renewable products on behalf of, and provide integrated
terminaling services to, customers engaged in the distribution and marketing of products. Our West Coast terminals
primarily receive products from vessels, pipeline and rail facilities on behalf of our customers and distribute products
primarily via vessel, pipeline, truck and rail facilities.
Investment in Frontera. On April 1, 2011, we contributed approximately 1.5 million barrels of light petroleum
product storage capacity, as well as related ancillary facilities, to the Frontera joint venture, in exchange for a cash payment
of approximately $25.6 million and a 50% ownership interest in the Frontera joint venture. An affiliate of PEMEX,
Mexico’s state owned petroleum company, acquired the remaining 50% ownership interest in Frontera for a cash payment
of approximately $25.6 million. We operate the Frontera assets under an operations and reimbursement agreement between
us and Frontera. Frontera has approximately 1.7 million barrels of aggregate active storage capacity. Our 50% ownership
interest does not allow us to control Frontera, but does allow us to exercise significant influence over its operations.
Accordingly, we account for our investment in Frontera under the equity method of accounting.
Investment in BOSTCO. On December 20, 2012, we acquired a 42.5% Class A ownership interest in BOSTCO
from Kinder Morgan Battleground Oil, LLC, a wholly owned subsidiary of Kinder Morgan. BOSTCO is a terminal facility
on the Houston Ship Channel designed to handle residual fuel, feedstocks, distillates and other black oils. BOSTCO
currently has fully subscribed capacity of approximately 7.1 million barrels. Our investment in BOSTCO entitles us to
appoint a member to the Board of Managers of BOSTCO, to vote our proportionate ownership share on general
governance matters and to certain rights of approval over significant changes in, or expansion of, BOSTCO’s business.
Kinder Morgan is responsible for managing BOSTCO’s day-to-day operations. Our 42.5% Class A ownership interest does
not allow us to control BOSTCO, but does allow us to exercise significant influence over its operations. Accordingly, we
account for our investment in BOSTCO under the equity method of accounting.
Our Services and Revenue Streams
We derive revenue from our terminal and pipeline transportation operations by charging fees for providing
integrated terminaling, transportation and related services. The fees we charge and our other sources of revenue are
composed of:
● Terminaling services fees. Our terminaling services agreements are structured as either throughput
agreements or storage agreements. Our throughput agreements contain provisions that require our customers
to make minimum payments, which are based on contractually established minimum volume of throughput of
the customer’s product at our facilities over a stipulated period of time. Due to this minimum payment
arrangement, we recognize a fixed amount of revenue from the customer over a certain period of time, even if
the customer throughputs less than the minimum volume of product during that period. In addition, if a
customer throughputs a volume of product exceeding the minimum volume, we would recognize additional
revenue on this incremental volume. Our storage agreements require our customers to make minimum
payments based on the volume of storage capacity available to the customer under the agreement, which
results in a fixed amount of recognized revenue. We refer to the fixed amount of revenue recognized pursuant
to our terminaling services agreements as being “firm commitments.” Revenue recognized in excess of firm
commitments and revenue recognized based solely on the volume of product distributed or injected are
referred to as “ancillary.” In addition, ancillary revenue also includes fees received from ancillary services
including heating and mixing of stored products, product transfer, railcar handling, butane blending, proceeds
from the sale of product gains, wharfage and vapor recovery.
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● Pipeline transportation fees. We earned pipeline transportation fees at our Diamondback pipeline under a
capacity reservation agreement. Revenue associated with the capacity reservation agreement is recognized
ratably over the respective term, regardless of whether the capacity is actually utilized. Once our Brownsville
terminal expansion efforts are complete, including the conversion of our Diamondback pipeline to transport
diesel and gasoline, we then expect to earn pipeline transportation fees at our Diamondback pipeline based on
the volume of product transported subject to minimum volume commitments. We earn pipeline transportation
fees at our Razorback pipeline based on an allocation of the aggregate fees charged under the capacity
agreement with our customer who has contracted for 100% of our Razorback system.
● Management fees. We manage and operate certain tank capacity at our Port Everglades South terminal for a
major oil company and receive a reimbursement of its proportionate share of operating and maintenance
costs. We manage and operate the Frontera joint venture and receive a management fee based on our costs
incurred. We lease land under operating leases as the lessor or sublessor with third parties and affiliates. We
also managed and operated for an affiliate of PEMEX, Mexico’s state-owned petroleum company, a products
pipeline connected to our Brownsville terminal facility and received a management fee through August 23,
2018. We manage and operate rail sites at certain Southeast terminals on behalf of a major oil company and
receive reimbursement for operating and maintenance costs. We manage and operate terminals that are owned
by affiliates of ArcLight, including for SeaPort Midstream Partners, LLC in Seattle, Washington and
Portland, Oregon and another terminal for SeaPort Sound Terminal, LLC (“SeaPort Sound”) in Tacoma,
Washington and receive a management fee based on our costs incurred. We also manage additional terminal
facilities that are owned by affiliates of ArcLight, including Lucknow-Highspire Terminals, LLC, which
operates terminals throughout Pennsylvania encompassing approximately 9.9 million barrels of storage
capacity, and prior to July 1, 2019, a terminal in Baltimore, Maryland for Pike Baltimore Terminals, LLC (the
“Baltimore Terminal”), and receive a management fee based on our costs incurred. Our management of the
Baltimore Terminal ended on July 1, 2019.
Further detail regarding our financial information can be found under Item 8. “Financial Statements and
Supplementary Data” of this Annual Report.
Business Strategies
Generate stable cash flows through the use of long-term contracts with our customers. We intend to continue to
generate stable and predictable cash flows by capitalizing on our high quality, well positioned and geographically diverse
asset base, which is critical infrastructure for our customers. In addition, we seek to continue to enhance the stability of our
business by focusing on our highly contracted assets, long-term relationships with high quality customers, fee-based cash
flows and multi-year minimum revenue commitments. We generate revenue from customers who pay us fees based on the
volume of terminal capacity contracted for, volume of products throughput at our terminals or volume of products
transported in our pipelines.
Attract additional volumes and products to our systems. We intend to attract new volumes of refined products,
crude oil, renewable products, and specialty chemicals to our systems and terminals from existing and new customers by
leveraging our asset base, continuing to provide superior customer service and through aggressively marketing our services
to additional customers in our areas of operation. We have available capacity at certain terminal locations and our terminal
facilities that have traditionally handled refined products are also well-positioned to service other products, including
renewable products; as a result, we can accommodate additional volumes and varying products at a minimal incremental
cost.
Capitalize on organic growth opportunities associated with our existing assets. We continually seek to identify
and evaluate economically attractive organic expansion and asset enhancement opportunities that leverage our existing
asset footprint and strategic relationships with our customers. We intend to focus on projects that can be completed at a
relatively low cost, that have potential for attractive returns, and that are responsive to changes in customer demand,
including as it may relate to an increased demand for renewable products storage capacity and terminaling services. For
example at our Collins terminal, we implemented the design and construction of 870,000
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barrels of new refined and renewable products storage capacity supported by the execution of a new long-term, fee-based
terminaling services agreement with a third party customer, which constituted the beginning of a Phase II expansion.
During the first quarter of 2019, 870,000 barrels were placed into service. To facilitate our further expansion of tankage at
Collins, we also entered into an agreement with Colonial Pipeline Company for significant improvements to the Colonial
Pipeline receipt and delivery manifolds and our related receipt and delivery facilities. The improvements will result in
significant increased flexibility for our Collins customers including the simultaneous receipt and delivery of gasoline from
and to Colonial’s Line 1 at full line rates including the ability to receive and deliver segregated batches at these rates; a
dedicated and segregated line for the receipt and delivery of distillates from and to Colonial’s Line 2; and a dedicated and
segregated line for the receipt and delivery of jet fuel from and to Colonial’s Line 2. The improvements were completed in
the fourth quarter of 2019. The cost of the approximately 870,000 barrels of new storage capacity and our share of the
improvements to the pipeline connections was approximately $60 million, with expected annual cash returns in the low-
teens.
In addition, our Brownsville expansion project, which is underpinned by new long-term agreements, includes the
construction of approximately 805,000 barrels of additional refined and renewable products storage capacity, the
construction of gasoline railcar loading capabilities and the conversion of our Diamondback pipeline to transport diesel and
gasoline to the U.S./Mexico border. The Diamondback pipeline is comprised of an 8” pipeline that previously transported
propane approximately 16 miles from our Brownsville facilities to the U.S./Mexico border, as well as a 6” pipeline, which
runs parallel to the 8” pipeline, that has been idle and can be used to transport additional refined products. The majority of
the additional storage capacity was placed into commercial service during the first three quarters of 2019 with a remaining
175,000 barrels of capacity to be completed in the first quarter 2021. We expect to recommission the Diamondback
pipeline and resume operations on both the 8” pipeline and the previously idle 6” pipeline in the second quarter 2021. We
expect the construction of the gasoline railcar loading capabilities to be completed in the first quarter 2021. The anticipated
aggregate cost of these expansion efforts is estimated to be approximately $75 million.
Pursue strategic and accretive acquisitions. We plan to pursue accretive acquisitions of high quality, critical
energy infrastructure assets that are complementary to our existing asset base or that provide attractive returns in new
operating regions or business lines. We will pursue acquisitions in our areas of operation that we believe will allow us to
realize operational efficiencies by capitalizing on our existing infrastructure, personnel and customer relationships. We will
also seek acquisitions in new geographic areas or new but related business lines to the extent that we believe we can utilize
our operational expertise to enhance our business with these acquisitions.
Maintain a disciplined financial policy. We will continue to pursue a disciplined financial policy by maintaining
a prudent capital structure, managing our exposure to interest rate risk and conservatively managing our cash reserves. We
believe this conservative capital structure will allow us to consider attractive growth projects and acquisitions even in
challenging commodity price or capital market environments.
Competitive Conditions
We face competition from other terminals and pipelines that may be able to supply our customers with integrated
terminaling and transportation services on a more competitive basis. We compete with national, regional and local terminal
and transportation companies, including the major integrated oil companies, of widely varying sizes, financial resources
and levels of experience. These competitors include BP p.l.c., Buckeye Partners, L.P., Chevron U.S.A. Inc., CITGO
Petroleum Corporation, Exxon Mobil Oil Corporation, HollyFrontier Corporation and its affiliate Holly Energy
Partners, L.P., Kinder Morgan, Inc., Magellan Midstream Partners, L.P., Marathon Petroleum Corporation and its affiliate
MPLX LP, Motiva Enterprises LLC, Murphy Oil Corporation, NuStar Energy L.P., Phillips 66 and its affiliate Phillips 66
Partners LP, Sunoco, Inc. and its affiliate Sunoco Logistics Partners L.P., and terminals in the Caribbean. In particular, our
ability to compete could be harmed by factors we cannot control, including:
● price competition from terminal and transportation companies, some of which are substantially larger than we
are and have greater financial resources, and control substantially greater storage capacity, than we do;
● the perception that another company can provide better service; and
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● the availability of alternative supply points, or supply points located closer to our customers’ operations.
We also compete with national, regional and local terminal and transportation companies for acquisition and
expansion opportunities. Some of these competitors are substantially larger than us and have greater financial resources and
lower costs of capital than we do.
Significant Customer Relationships
We generate revenue from our terminal and pipeline transportation operations by charging fees for providing
integrated terminaling, transportation and related services. We have several significant customer relationships that made up
approximately 79% of the total revenue for the year ended December 31, 2020. These relationships include Pilot Flying J,
Freepoint Commodities LLC, RaceTrac Petroleum Inc., Atlantic Trading and Marketing, Tesoro, Musket Corporation, BP,
Associated Asphalt, Magellan Pipeline Company, L.P., United States Government, Valero Marketing and Supply Company,
PMI Trading Ltd., Exxon Mobil Oil Corporation, World Fuel Services Corporation, Chevron Corporation, Shell, Marathon
Petroleum, Gunvor and Vitol.
Terminals and Pipeline Control Operations
The pipelines we own or operate are operated via wireless, radio and frame relay communication systems from a
central control room located in Atlanta, Georgia. We also monitor activity at our terminals from this control room.
The control center operates with Supervisory Control and Data Acquisition, or SCADA, systems. Our control
center is equipped with computer systems designed to continuously monitor operational data, including product
throughput, flow rates and pressures. In addition, the control center monitors alarms and throughput balances. The control
center operates remote pumps, motors and valves associated with the receipt of refined products. The computer systems are
designed to enhance leak-detection capabilities, sound automatic alarms if operational conditions outside of pre-established
parameters occur and provide for remote-controlled shutdown of pump stations on the pipeline. Pump stations and meter-
measurement points on the pipeline are linked by high speed communication systems for remote monitoring and control. In
addition, our Collins terminal contains full back-up/redundant disaster recovery systems covering all of our SCADA
systems.
Government Regulation and Environmental Matters
Our business is subject to a myriad of federal, state, and local laws and regulations, including relating to
protection of the environment. We are committed to complying with these laws and regulations. To date, such compliance
has not had a material adverse effect on our business, financial position, results of operations, liquidity, or competitive
position.
Regulation. We are subject to regulation by the Pipeline and Hazardous Materials Safety Administration
(PHMSA) under the Pipeline Inspection, Protection, Enforcement and Safety Act of 2006, or PIPES, and comparable state
statutes relating to the design, installation, testing, construction, operation, replacement and management of the pipeline
facilities we operate or own. PIPES covers petroleum and petroleum products pipelines and requires any entity that owns
or operates such pipeline facilities to comply with certain regulations, to permit access to and copying of records, and to
make certain reports and provide information as required by the Secretary of Transportation. We believe that we are in
material compliance with PIPES and the regulations promulgated thereunder.
The DOT Office of Pipeline and Hazardous Materials Safety Administration, or PHMSA, has promulgated
regulations that require qualification of pipeline personnel. These regulations require pipeline operators to develop and
maintain a written qualification program for individuals performing covered tasks on pipeline facilities. The intent of these
regulations is to ensure a qualified work force and to reduce the probability and consequence of incidents caused by human
error. The regulations establish qualification requirements for individuals performing covered tasks, and amend certain
training requirements in existing regulations. We believe that we are in material compliance with these PHMSA
regulations.
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We also are subject to PHMSA regulations applicable to High Consequence Areas, or HCAs, for Category 2
pipeline systems (companies operating less than 500 miles of jurisdictional pipeline). These regulations specify how to
assess, evaluate, repair and validate the integrity of pipeline segments that could impact populated areas, areas unusually
sensitive to environmental damage and commercially navigable waterways, in the event of a release. The pipelines we own
or manage are subject to these requirements. The regulations require an integrity management program that utilizes internal
pipeline inspection, pressure testing, or other equally effective means to assess the integrity of pipeline segments in HCAs.
The program requires periodic review of pipeline segments in HCAs to ensure adequate preventative and mitigating
measures exist. Through this program, we evaluated a range of threats to each pipeline segment’s integrity by analyzing
available information about the pipeline segment and consequences of a failure in an HCA. The regulations require prompt
action to address integrity issues raised by the assessment and analysis. We have completed baseline assessments for all
segments and believe that we are in material compliance with these PHMSA regulations. In October 2019, PHMSA
submitted three major rules to the Federal Register, including rules focused on the safety of hazardous liquid pipelines and
enhanced emergency order procedures. The safety of hazardous liquid pipelines rule extended leak detection requirements
to all non-gathering hazardous liquid pipelines and requires operators to inspect affected pipelines following extreme
weather events or natural disasters to address any resulting damage. This rule took effect on July 1, 2020. The enhanced
emergency procedures rule focuses on increased emergency safety measures. In particular, this rule increases the authority
of PHMSA to issue an emergency order that addresses unsafe conditions or hazards that pose an imminent threat to
pipeline safety. This rule took effect on December 2, 2019.
Our terminals also are subject to various state regulations regarding our storage of product in aboveground storage
tanks. These regulations require, among other things, registration of tanks, financial assurances and inspection and testing,
consistent with the standards established by the American Petroleum Institute. We have completed baseline assessments for
all of the segments and believe that we are in material compliance with these aboveground storage tank regulations.
We also are subject to the requirements of the federal Occupational Safety and Health Act, or OSHA, and
comparable state statutes that regulate the protection of the health and safety of workers. In addition, the OSHA hazard
communication standard, the Environmental Protection Agency, or EPA, community right-to-know regulations under Title
III of the Federal Superfund Amendment and Reauthorization Act, and comparable state statutes require us to organize and
disclose information about the hazardous materials used in our operations. Certain parts of this information must be
reported to employees, state and local governmental authorities and local citizens upon request. We believe that we are in
material compliance with OSHA and state requirements, including general industry standards, record keeping requirements
and monitoring of occupational exposures.
In general, we expect to increase our expenditures during the next decade to comply with higher industry and
regulatory safety standards such as those described above. Although we cannot estimate the magnitude of such
expenditures at this time, we do not believe that they will have a material adverse impact on our results of operations.
Environmental Matters. Our operations are subject to stringent and complex laws and regulations pertaining to
health, safety and the environment. As an owner or operator of product terminals and pipelines, we must comply with these
laws and regulations at federal, state and local levels. These laws and regulations can restrict or impact our business
activities in many ways, such as:
● requiring remedial action to mitigate releases of hydrocarbons, hazardous substances or wastes caused by our
operations or attributable to former operators;
● requiring capital expenditures to comply with environmental control requirements; and
● enjoining the operations of facilities deemed in non-compliance with permits issued pursuant to such
environmental laws and regulations.
Failure to comply with these laws and regulations may trigger a variety of administrative, civil and criminal
enforcement measures, including the assessment of monetary penalties, the imposition of remedial requirements, and the
issuance of orders enjoining future operations. Certain environmental statutes impose strict, joint and several liability for
costs required to cleanup and restore sites where hydrocarbons, hazardous substances or wastes have been released or
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disposed of. Moreover, it is not uncommon for neighboring landowners and other third parties to file claims for personal
injury and property damage allegedly caused by the release of hydrocarbons, hazardous substances or other wastes into the
environment.
The trend in environmental regulation is to place more restrictions and limitations on activities that may affect the
environment. As a result, there can be no assurance as to the amount or timing of future expenditures that may be required
for environmental compliance or remediation, and actual future expenditures may be different from the amounts we
currently anticipate. We try to anticipate future regulatory requirements that may affect our operations and to plan
accordingly to comply with and minimize the costs of such requirements.
We believe that the various environmental activities in which we are presently engaged are not expected to
materially interrupt or diminish our operational ability. We cannot assure, however, that future events, such as changes in
existing laws, the promulgation of new laws, or the development or discovery of new facts or conditions will not cause us
to incur significant costs. The following is a discussion of certain potential material environmental concerns that relate to
our business.
Water. The Federal Water Pollution Control Act of 1972, renamed and amended as the Clean Water Act or CWA,
imposes strict controls against the discharge of pollutants, including oil and its derivatives into navigable waters. The
discharge of pollutants into regulated waters is prohibited except in accordance with the regulations issued by the EPA or
the state. We are subject to various types of storm water discharge requirements at our terminals. The EPA and a number of
states have adopted regulations that require us to obtain permits to discharge storm water run-off from our facilities. Such
permits may require us to monitor and sample the effluent from our operations. The cost involved in obtaining and
renewing these storm water permits is not material. We believe that we are in material compliance with effluent limitations
at our facilities and with the CWA generally.
The CWA provides penalties for any discharges of petroleum products in reportable quantities and imposes
substantial potential liability for the costs of removing an oil or hazardous substance spill. State laws for the control of
water pollution also provide for various civil and criminal penalties and liabilities in the event of a release of petroleum or
its derivatives in surface waters or into the groundwater. Spill prevention control and countermeasure requirements of
federal laws require, among other things, appropriate containment be constructed around product storage tanks to help
prevent the contamination of navigable waters in the event of a product tank spill, rupture or leak.
The primary federal law for oil spill liability is the Oil Pollution Act of 1990, as amended, or OPA, which
addresses three principal areas of oil pollution—prevention, containment and cleanup. It applies to vessels, offshore
platforms, and onshore facilities, including terminals, pipelines and transfer facilities. In order to handle, store or transport
oil, facilities are required to file oil spill response plans with the United States Coast Guard, the Office of Pipeline Safety or
the EPA. Numerous states have enacted laws similar to OPA. Under OPA and similar state laws, responsible parties for a
regulated facility from which oil is discharged may be liable for removal costs and natural resources damages. We believe
that we are in material compliance with regulations pursuant to OPA and similar state laws.
Contamination resulting from spills or releases of products is an inherent risk in the petroleum terminal and
pipeline industry. To the extent that groundwater contamination requiring remediation exists around the facilities we own
as a result of past operations, we believe any such contamination is being controlled or remedied without having a material
adverse effect on our financial condition. However, such costs can be unpredictable and are site specific and, therefore, the
effect may be material in the aggregate.
Air Emissions. Our operations are subject to the federal Clean Air Act, or CAA, and comparable state and local
statutes. The CAA requires most industrial operations in the United States to incur ongoing expenditures to meet the air
emission control standards that are developed and implemented by the EPA and state environmental agencies. These laws
and regulations regulate emissions of air pollutants from various industrial sources, including our operations, and also
impose various monitoring and reporting requirements. Such laws and regulations may require a facility to obtain pre-
approval for the construction or modification of certain projects or facilities expected to produce air emissions or result in
the increase of existing air emissions and obtain and strictly comply with air permits containing requirements.
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Most of our terminaling operations require air permits. These operations generally include volatile organic
compound emissions (primarily hydrocarbons) associated with truck loading activities and tank working and breathing
losses. The sources of these emissions are strictly regulated through the permitting process. Such regulation includes
stringent control technology and extensive permit review and periodic renewal. The cost involved in obtaining and
renewing these permits is not material.
Moreover, any of our facilities that emit volatile organic compounds or nitrogen oxides and are located in ozone
non-attainment areas face increasingly stringent regulations, including requirements to install various levels of control
technology on sources of pollutants. We believe that we are in material compliance with existing standards and regulations
pursuant to the CAA and similar state and local laws, and we do not anticipate that implementation of additional
regulations will have a material adverse effect on us.
Congress and numerous states are currently considering proposed legislation directed at reducing “greenhouse gas
emissions.” It is not possible at this time to predict how future legislation that may be enacted to address greenhouse gas
emissions would impact our operations. We believe we are in compliance with existing federal and state greenhouse gas
reporting regulations. Although future laws and regulations could result in increased compliance costs or additional
operating restrictions, they are not expected to have a material adverse effect on our business, financial position, results of
operations and cash flows.
Hazardous and Solid Waste. Our operations are subject to the Federal Resource Conservation and Recovery Act,
as amended, or RCRA, and comparable state laws, which impose detailed requirements for the handling, storage,
treatment, and disposal of hazardous and solid waste. All of our terminal facilities are classified by the EPA as Very Small
Quantity Generators. Our terminals do not generate hazardous waste except in isolated and infrequent cases. At such times,
only third party disposal sites which have been audited and approved by us are used. Our operations also generate solid
wastes that are regulated under state law or the less stringent solid waste requirements of RCRA. We believe that we are in
substantial compliance with the existing requirements of RCRA and similar state and local laws, and the cost involved in
complying with these requirements is not material.
Site Remediation. The Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as
amended, or CERCLA, also known as the “Superfund” law, and comparable state laws impose liability without regard to
fault or the legality of the original conduct, on certain classes of persons responsible for the release of hazardous substances
into the environment. Such classes of persons include the current and past owners or operators of sites where a hazardous
substance was released, and companies that disposed or arranged for disposal of hazardous substances at offsite locations
such as landfills. In the course of our operations we will generate wastes or handle substances that may fall within the
definition of a “hazardous substance.” CERCLA authorizes the EPA and, in some cases, third parties to take actions in
response to threats to the public health or the environment and to seek to recover from the responsible classes of persons
the costs they incur. Under CERCLA, we could be subject to joint and several liability for the costs of cleaning up and
restoring sites where hazardous substances have been released, for damages to natural resources and for the costs of certain
health studies. We believe that we are in material compliance with the existing requirements of CERCLA.
We currently own, lease, or operate numerous properties and facilities that for many years have been used for
industrial activities, including product terminaling operations. Hazardous substances, wastes, or hydrocarbons may have
been released on or under the properties owned or leased by us, or on or under other locations where such substances have
been taken for disposal. In addition, some of these properties have been operated by third parties or by previous owners
whose treatment and disposal or release of hazardous substances, wastes, or hydrocarbons, was not under our control.
These properties and the substances disposed or released on them may be subject to CERCLA, RCRA and analogous state
laws. Under such laws, we could be required to remove previously disposed substances and wastes (including substances
disposed of or released by prior owners or operators) or remediate contaminated property (including groundwater
contamination, whether from prior owners or operators or other historic activities or spills).
In connection with our acquisition of the Florida (other than Pensacola), Midwest, Brownsville, Texas, River,
Southeast, and Pensacola, Florida terminal and facilities, a third party agreed to indemnify us against certain potential
environmental claims, losses and expenses. Based on our current knowledge, we expect that the active remediation
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projects subject to the benefit of this indemnification obligation are winding down and will not involve material additional
claims, losses, and expenses. Nonetheless, the forgoing environmental indemnification obligations of a third party to us
remain in place and were not affected by the Take-Private Transaction.
Endangered Species Act. The Endangered Species Act restricts activities that may affect endangered or
threatened species or their habitats. While some of our facilities are in areas that may be designated as habitat for
endangered or threatened species, we believe that we are in substantial compliance with the Endangered Species Act.
However, the discovery of previously unidentified endangered or threatened species could cause us to incur additional
costs or become subject to operating restrictions or bans in the affected area.
Operational Hazards and Insurance. Our terminal and pipeline facilities may experience damage as a result of an
accident or natural disaster. These hazards can cause personal injury and loss of life, severe damage to and destruction of
property and equipment, pollution or environmental damage and suspension of operations. We maintain insurance of
various types that we consider adequate to cover our operations, properties and loss of income at specified locations.
Coverage for domestic acts of terrorism as defined in Terrorism Risk Insurance Program Reauthorization Act 2007 are
covered under certain of our casualty insurance policies.
The insurance covers all of our facilities in amounts that we consider to be reasonable. The insurance policies are
subject to deductibles that we consider reasonable and not excessive. Our insurance does not cover every potential risk
associated with operating terminals, pipelines and other facilities. Consistent with insurance coverage generally available to
the industry, our insurance policies provide limited coverage for losses or liabilities relating to pollution, with broader
coverage for sudden and accidental occurrences.
Tariff Regulation. The Razorback pipeline, which runs between Mount Vernon, Missouri and Rogers, Arkansas
and the Diamondback pipeline, which runs between Brownsville, Texas and the U.S./Mexico border, transport petroleum
products subject to regulation by the FERC under the Interstate Commerce Act and the Energy Policy Act of 1992 and
rules and orders promulgated under those statutes. We expect to recommission the Diamondback Pipeline and resume
operations on both the 8” pipeline, providing gasoline service thereon, and the previously idle 6” pipeline, providing diesel
service thereon, by the end of the second quarter of 2021, and have previously filed revised tariffs with the FERC to
support such activities. FERC regulation requires that the rates of pipelines providing interstate service, such as the
Razorback and Diamondback pipelines, be filed at FERC and posted publicly, and that these rates be “just and reasonable”
and nondiscriminatory. Rates are currently regulated by the FERC primarily through an index methodology, whereby a
pipeline is allowed to change its rates based on the change from year to year in the Producer Price Index for Finished
Goods (PPI-FG), plus a 1.23 percent adjustment for the five-year period beginning July 1, 2016. In the alternative,
interstate pipeline companies may elect to support rate filings by using a cost-of-service methodology, competitive market
showings, or actual agreements (that is, negotiated rates agreements) between shippers and the oil pipeline company.
Negotiated Rates. The current rates charged by the Razorback pipeline and, upon recommencement of service, the
Diamondback pipeline, are negotiated rates that were established via agreement with non-affiliated shippers and are not
index rates or cost-of-service rates. Therefore, while we continue to monitor FERC’s policy changes with respect to index
rates and cost-of-service rates, we do not expect such changes to have an adverse impact on the rates charged by the
Razorback and Diamondback pipelines and do not discuss such changes here.
The FERC generally has not investigated interstate oil pipeline rates on its own initiative when those rates have
not been the subject of a protest or a complaint by a shipper. A shipper or other party having a substantial economic interest
in our rates could, however, challenge our rates. In response to such challenges, the FERC could investigate our rates and
require us to modify the amounts charged. In the absence of a challenge to our rates, given our ability to utilize either filed
rates as annually indexed or to utilize rates tied to cost of service methodology, competitive market showing, or actual
agreements between shippers and us, we do not believe that FERC’s regulations governing oil pipeline ratemaking would
have any negative material monetary impact on us unless the regulations were substantially modified in such a manner so
as to effectively prevent a pipeline company’s ability to earn a fair return for the shipment of petroleum products utilizing
its transportation system, which we believe to be an unlikely scenario.
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In addition to being regulated by the FERC, we are required to maintain a Presidential Permit from the United
States Department of State to operate and maintain the Diamondback pipeline, because the pipeline transports petroleum
products across the international boundary line between the United States and Mexico. The Department of State’s
regulations do not affect our rates but do require the agency’s approval for the international crossing. We do not believe
that these regulations would have any negative material monetary impact on us unless the regulations were substantially
modified, which we believe to be an unlikely scenario.
Safety and Maintenance. We perform preventive and normal maintenance on the pipeline and terminal systems
we operate or own and make repairs and replacements when necessary or appropriate. We also conduct routine and
required inspections of the pipeline and terminal tanks we operate or own as required by code or regulation. External
coatings and impressed current cathodic protection systems are used to protect against external corrosion. We conduct all
cathodic protection work in accordance with National Association of Corrosion Engineers standards. We continually
monitor, test, and record the effectiveness of these corrosion-inhibiting systems.
We monitor or require the monitoring of the structural integrity of all of our Department of Transportation, or
DOT, regulated pipeline systems. These pipeline systems include the 67-mile Razorback pipeline; a 37-mile pipeline,
known as the “Pinebelt pipeline,” located in Covington County, Mississippi that transports refined petroleum liquids
between our Collins and Purvis bulk storage terminal facilities; approximately 5 miles of various diameter petroleum
pipeline in and around Martinez, California; the Diamondback pipeline; and, until August 23, 2018, an approximately 18-
mile, refined petroleum liquids pipeline in Texas, known as the “MB pipeline,” that we operated and maintained on behalf
of PMI Services North America, Inc., an affiliate of PEMEX, which a third party has since taken operatorship. The
maintenance of structural integrity includes a program of integrity management by us or required by us that conforms to
Federal and State regulations and follows industry periodic inspection and testing guidelines. Beginning in 2002, the DOT
required internal inspections or other integrity testing of all DOT-regulated crude oil and refined product pipelines that
affect or could affect high consequence areas, or HCA’s. We believe that the pipelines we own and manage meet or exceed
all DOT inspection requirements for pipelines located in the United States.
Maintenance facilities containing equipment for pipe repairs, spare parts, and trained response personnel are
located along all of these pipelines. Employees participate in simulated spill deployment exercises on a regular basis. They
also participate in actual spill response boom deployment exercises in planned spill scenarios in accordance with Oil
Pollution Act of 1990 requirements. We believe that the pipelines we own and manage have been constructed and are
maintained or are required to be maintained in all material respects in accordance with applicable federal, state, and local
laws and the regulations and standards prescribed by the American Petroleum Institute, the DOT, and accepted industry
practice.
At our terminals, tanks designed for gasoline storage are equipped with internal or external floating roofs or
alternative vapor control devices designed to minimize emissions and prevent potentially flammable vapor accumulation
between fluid levels and the roof of the tank. Our terminal facilities have all required facility response plans, spill
prevention and control plans and other plans and programs to respond to emergencies.
Many of our terminal loading racks are protected with fire protection systems activated by either heat sensors or
an emergency switch. Several of our terminals also are protected by foam systems that are activated in case of fire.
Title to Properties
The Razorback and Diamondback pipelines are generally constructed on easements and rights-of-way granted by
the apparent record owners of the property and in some instances these grants are revocable at the election of the grantor.
Several rights-of-way for the Razorback pipeline and other real property assets are shared with other pipelines and other
assets owned by third parties. In many instances, lands over which rights-of-way have been obtained are subject to prior
liens that have not been subordinated to the right-of-way grants. We have obtained permits from public authorities to cross
over or under, or to lay facilities in or along, watercourses, county roads, municipal streets, and state highways and, in
some instances, these permits are revocable at the election of the grantor. We have also obtained permits from railroad
companies to cross over or under lands or rights-of-way, many of which are also revocable at the grantor’s election. In
some cases, property for pipeline purposes was purchased in fee.
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Some of the leases, easements, rights-of-way, permits, licenses and franchise ordinances transferred to us will
require the consent of the grantor to transfer these rights, which in some instances is a governmental entity. We have
obtained sufficient third-party consents, permits, and authorizations for the transfer of the facilities necessary for us to
operate our business in all material respects as described in this Annual Report. With respect to any consents, permits, or
authorizations that have not been obtained, we believe that these consents, permits, or authorizations will be obtained, or
that the failure to obtain these consents, permits, or authorizations would not have a material adverse effect on the
operation of our business.
We believe that we have satisfactory title to all of our assets. Although title to these properties is subject to
encumbrances in some cases, such as customary interests generally retained in connection with acquisition of real property,
liens that can be imposed in some jurisdictions for government-initiated action to cleanup environmental contamination,
liens for current taxes and other burdens, and easements, restrictions and other encumbrances to which the underlying
properties were subject at the time of our acquisition, we believe that none of these burdens should materially detract from
the value of these properties or from our interest in these properties or should materially interfere with their use in the
operation of our business.
Human Capital Management
Employees. As a result of the TMS Contribution, we have assumed the employees and operational activities
previously provided by TMS, except for our executive officers. Following the TMS Contribution, our executive officers
who provide services to the Company are employed by TMC, a wholly owned subsidiary of ArcLight, which also provides
services to certain other ArcLight affiliates. Nonetheless, TMS continues to provide certain payroll functions and
maintains all employee benefits programs on behalf of TMC pursuant to a services agreement between TMC and TMS.
As of March 5, 2021, we had approximately 540 employees. As of March 5, 2021, none of our employees or any
TMC employees (and our officers) who provide services directly to us were covered by a collective bargaining agreement.
Attracting, Retaining and Developing Personnel. We face a competitive talent environment, including
having an aging workforce. Maintaining appropriate headcount levels is critical to the operation of our terminals and
other assets.
To attract and retain a successful workforce, we study market trends, benchmarking the attractiveness of our
employee value proposition, and analyzing retention data. We also focus on driving employee engagement, which is key
to increasing employee productivity, retention, and safety. We take a data-centric approach, including the use of quarterly
surveys among management employees, to identify new initiatives that will help boost engagement and drive business
results.
Employee Safety and Training. Employee health and safety and community safety are at the core of our
operating principles. We are continuously monitoring and seeking to improve our safety performance. We measure this
performance by tracking internal metrics such as incident rates. Our internal safety-audit program incorporates a risk
based, terminal specific design that helps to ensure our continuous compliance with safety regulations and industry
standards. We provide terminal personnel with ongoing safety compliance training, and we recognize our terminal
employees with annual safety awards. All accident, incident, injury/lost-time and near-miss events are investigated and
reviewed by our dedicated safety and health department and reported to executive management and, as applicable, to
terminal managers, vendors, and employees. We use this investigation, review and reporting to translate events into
safety/operational enhancements, policy changes, training, or discipline, in each case as appropriate, to mitigate the
potential for recurrence. We have been recognized by the International Liquids Terminals Association (ILTA) multiple
times for safety excellence.
Employee Development and Retention. We also emphasize developing personnel in connection with
employee attraction and retainage efforts, as well as in connection with the efficient operation of our business. We
provide a range of developmental programs, opportunities, skills, and resources for our employees to work safely and
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be successful in their careers. For example, we have a formalized terminal manager training and career advancement
process to develop and promote talent from within. We provide hands-on training and simulation training designed to
improve training effectiveness and safety outcomes. We also use modern learning and performance technologies to
offer robust professional growth opportunities. Through on-demand digital course offerings, custom-built learning
paths, and performance-management tools, our platforms deliver a contemporary, convenient, and inclusive approach
to professional development.
Finally, we are committed to recruiting the most qualified, talented, and diverse people. We strive to create a
diverse, equitable, and inclusive workplace where a wide range of perspectives and experiences are represented, valued,
and empowered to thrive. While our current workforce reflects a broad range of backgrounds and experiences, we
continue to focus on building an even more diverse workforce.
Available Information
We file annual, quarterly, and current reports, and other documents with the SEC under the Securities Exchange
Act of 1934. The SEC maintains an Internet website that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC. The public can obtain any documents that we file at
http://www.sec.gov.
In addition, our annual reports on Form 10-K, as well as our quarterly reports on Form 10-Q, current reports on
Form 8-K and any amendments to all of the foregoing reports, are made available free of charge on or through the
“Investor” section of our website at www.transmontaignepartners.com as soon as reasonably practicable after such reports
are electronically filed with or furnished to the SEC.
ITEM 1A. RISK FACTORS
Our business, operations and financial condition are subject to various risks. You should carefully consider the
following risk factors together with all of the other information set forth in this Annual Report, including the matters
addressed under “Cautionary Statement Regarding Forward-Looking Statements,” in connection with any investment in
our securities. If any of the following risks actually occurs, our business, financial condition, results of operations or cash
flows could be materially adversely affected, which could result in investors in our securities losing all or part of their
investment.
Risks Inherent in Our Business
We depend upon a relatively small number of customers for a substantial majority of our revenue. A
substantial reduction of revenue from one or more of these customers would have a material adverse effect on our
financial condition and results of operations.
We expect to derive a substantial majority of our revenue from several significant customers for the foreseeable
future. Events that adversely affect the business operations of any one or more of our significant customers may adversely
affect our financial condition or results of operations. Therefore, we are indirectly subject to the business risks of our
significant customers, many of which are similar to the business risks we face. For example, a material decline in refined
petroleum product supplies available to our customers, or a significant decrease in our customers’ ability to negotiate
marketing contracts on favorable terms, could result in a material decline in the use of our tank capacity or throughput of
product at our terminal facilities, which would likely cause our revenue and results of operations to decline. In addition, if
any of our significant customers were unable to meet their contractual commitments to us for any reason, then our revenue
and cash flow would decline.
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We are exposed to the credit risks of our significant customers which could affect our creditworthiness. Any
material nonpayment or nonperformance by such customers could also adversely affect our financial condition and
results of operations.
We have various credit terms with virtually all of our customers, and our customers have varying degrees of
creditworthiness. Although we evaluate the creditworthiness of each of our customers, we may not always be able to fully
anticipate or detect deterioration in their creditworthiness and overall financial condition, which could expose us to risks of
loss resulting from nonpayment or nonperformance by our significant customers. Some of our significant customers may
be highly leveraged and subject to their own operating and regulatory risks. Any material nonpayment or nonperformance
by our significant customers could require us to pursue substitute customers for our affected assets or provide alternative
services. There can be no assurance that any such efforts would be successful or would provide similar revenue. These
events could adversely affect our financial condition and results of operations.
Our continued expansion programs may require access to additional capital. Tightened capital markets or
more expensive capital could impair our ability to maintain or grow our operations.
Our primary liquidity needs are to fund our approved capital projects and future expansion. Our revolving credit
facility provides for a maximum borrowing line of credit equal to $850 million. At December 31, 2020, our outstanding
borrowings were $350.4 million. At December 31, 2020, the capital expenditures to complete the approved additional
investments and expansion capital projects are estimated to be approximately $40 million. We expect to fund our future
investments and expansion capital expenditures with additional borrowings under our revolving credit facility. If we cannot
obtain adequate financing to complete the approved investments and capital projects while maintaining our current
operations, we may not be able to continue to operate our business as it is currently conducted.
Moreover, our long term business strategies include acquiring additional energy-related terminaling and
transportation facilities and further expansion of our existing terminal capacity. We will need to raise additional funds to
grow our business and implement these strategies. We anticipate that such additional funds may be raised through equity
contributions from ArcLight or debt financings depending on the circumstances. Any equity contributions or debt
financing, if available at all, may not be on terms that are favorable to us. Limitations on our access to capital could result
from events or causes beyond our control, and could include, among other factors, significant increases in interest rates,
increases in the risk premium required by investors, generally or for investments in energy-related companies, decreases in
the availability of credit or the tightening of terms required by lenders. If we cannot obtain adequate financing, we may not
be able to fully implement our business strategies, and our business, results of operations and financial condition would be
adversely affected.
Our debt levels may limit our flexibility in obtaining additional financing and in pursuing other business
opportunities.
As of December 31, 2020, we had total long-term debt of $644.7 million and we had an unused borrowing base
availability of $499.6 million under our revolving credit facility. Our level of debt could have important consequences to
us. For example our level of debt could:
● impair our ability to obtain additional financing, if necessary, for working capital, capital expenditures,
acquisitions or other purposes;
● require us to dedicate a substantial portion of our cash flow to make principal and interest payments on our
debt, reducing the funds that would otherwise be available for operations and future business opportunities;
● make us more vulnerable to competitive pressures, changes in interest rates or a downturn in our business or
the economy generally; or
● limit our flexibility in responding to changing business and economic conditions.
If our operating results are not sufficient to service our current or future indebtedness, we will be forced to take
actions such as reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling
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assets, restructuring or refinancing our debt or seeking additional equity capital. We may not be able to affect any of these
actions on satisfactory terms, or at all.
Restrictive covenants in our revolving credit facility, the indenture governing our senior notes and future debt
instruments may limit our ability to respond to changes in market conditions or pursue business opportunities.
Our revolving credit facility and the indenture governing our senior notes contain, and the terms of any future
indebtedness may contain, restrictive covenants that limit our ability to, among other things:
● incur or guarantee additional debt;
● make distributions under certain circumstances;
● make certain investments and acquisitions;
● incur certain liens or permit them to exist;
● enter into certain types of transactions with affiliates;
● merge or consolidate with another company or undergo a change in control; and
● transfer, sell or otherwise dispose of assets.
Our revolving credit facility also contains covenants requiring us to maintain certain financial ratios and tests. Our
ability to meet those financial ratios and tests can be affected by events beyond our control, and there is no assurance that
that we will meet any such ratios and tests.
The provisions of our revolving credit facility may affect our ability to obtain future financing and pursue
attractive business opportunities and our flexibility in planning for, and reacting to, changes in business conditions. In
addition, a failure to comply with the provisions of our revolving credit facility could result in a default or an event of
default that could enable our lenders to declare the outstanding principal of that debt, together with accrued and unpaid
interest, to be immediately due and payable. If the payment of our debt is accelerated, our assets may be insufficient to
repay such debt in full, and our security-holders could experience a partial or total loss of their investment. Please read
“Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital
Resources.”
In the event we are required to refinance our existing debt in unfavorable market conditions, we may have to
pay higher interest rates and be subject to more stringent financial covenants, which could adversely affect our results
of operations.
Our revolving credit facility matures in March 2022, and our senior notes mature in February 2026. At
December 31, 2020, we had outstanding borrowings under our revolving credit facility of $350.4 million and outstanding
senior notes of $299.9 million, respectively. Our revolving credit facility provides that we pay interest on outstanding
balances at interest rates based on market rates plus specified margins, ranging from 1.75% to 2.75% depending on the
total leverage ratio in the case of loans with interest rates based on LIBOR, or ranging from 0.75% to 1.75% depending on
the total leverage ratio in the case of loans with interest rates based on the base rate. We pay a fixed 6.125% interest rate on
our senior notes. In the event we are required to refinance our revolving credit facility or our senior notes in unfavorable
market conditions, we may have to pay interest at higher rates and may be subject to more stringent financial covenants
than we have today, which could adversely affect our results of operations.
Additionally, on July 27, 2017, the U.K. Financial Conduct Authority (the authority that regulates LIBOR)
announced that it would no longer persuade or compel contributing banks to submit rates for the calculation of LIBOR
after 2021. It is unclear whether new methods of calculating LIBOR will be established such that it continues to exist after
2021. If the agent under our revolving credit facility, Wells Fargo, determines (among other things) that LIBOR may no
longer be available or may no longer be an appropriate reference rate upon which to determine the interest rates under our
credit facility, loans otherwise or previously relying on LIBOR to calculate interest may be converted to loans computing
interest rates based on the base rate (as adjusted, per the above), or some other replacement rate in the event
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that, among other reasons, the inability to use LIBOR is unlikely to be temporary or an applicable interest rate used in the
credit facility is no longer a widely recognized benchmark rate for newly originated loans in the syndicated loan market in
the applicable currency. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, is
considering replacing U.S. dollar LIBOR with a newly created index. Changes in the method of calculating LIBOR, or the
replacement of LIBOR with an alternative rate or benchmark, including with the base rate under our credit facility, may
adversely affect interest rates and result in higher borrowing costs. This could materially and adversely affect the
Company's results of operations, cash flows and liquidity. It is not possible to predict the effect of these changes, other
reforms or the establishment of alternative reference rates in the United States or elsewhere.
We may incur substantial additional indebtedness, which could further exacerbate the risks that we may face.
Subject to the restrictions in the instruments governing our outstanding indebtedness (including our revolving
credit facility and senior notes), we may incur substantial additional indebtedness (including secured indebtedness) in the
future. Although the instruments governing our outstanding indebtedness do contain restrictions on the incurrence of
additional indebtedness, these restrictions will be subject to waiver and a number of significant qualifications and
exceptions, and indebtedness incurred in compliance with these restrictions could be substantial. As of December 31, 2020,
we had additional borrowing capacity of $499.6 million under our revolving credit facility, all of which would be secured if
borrowed.
Any increase in our level of indebtedness will have several important effects on our future operations, including,
without limitation:
● we will have additional cash requirements in order to support the payment of interest on our outstanding
indebtedness;
● increases in our outstanding indebtedness and leverage will increase our vulnerability to adverse changes in
general economic and industry conditions, as well as to competitive pressure; and
● depending on the levels of our outstanding indebtedness, our ability to obtain additional financing for
working capital, capital expenditures and general company purposes may be limited.
The obligations of our customers under their terminaling services agreements may be reduced or suspended in
some circumstances, which would adversely affect our financial condition and results of operations.
Our agreements with our customers provide that, if any of a number of events occur, which we refer to as events
of force majeure, and the event renders performance impossible with respect to a facility, usually for a specified minimum
period of days, our customer’s obligations would be temporarily suspended with respect to that facility. Force majeure
events include, but are not limited to, wars, acts of enemies, embargoes, import or export restrictions, strikes, lockouts, acts
of nature, including fires, storms, floods, hurricanes, explosions and mechanical or physical failures of our equipment or
facilities or those of third parties. In the event of a force majeure, a significant customer’s minimum revenue commitment
may be reduced or the contract may be subject to termination. As a result, our revenue and results of operations could be
materially adversely affected.
A significant portion of our operations are conducted through joint ventures, over which we do not maintain
full control and which have unique risks.
A significant portion of our operations are conducted through joint ventures. We are entitled to appoint a member
to the BOSTCO board of managers and maintain certain rights of approval over significant changes to, or expansion of,
BOSTCO’s business, however Kinder Morgan serves as the operator of BOSTCO and is responsible for its day-to-day
operations. Although we serve as the operator of Frontera, there are restrictions and limitations on our authority to take
certain material actions absent the consent of our joint venture partner. With respect to our existing joint ventures, we share
ownership with partners that may not always share our goals and objectives. Differences in views among the partners may
result in delayed decisions or failures to agree on major matters, such as large expenditures or contractual commitments,
the construction of assets or borrowing money, among others. Delay or failure to agree may
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prevent action with respect to such matters, even though such action may not serve our best interest or that of the joint
venture. Accordingly, delayed decisions and disagreements could adversely affect the business and operations of the joint
ventures and, in turn, our business and operations. From time to time, our joint ventures may be involved in disputes or
legal proceedings which may negatively affect our investments. Accordingly, any such occurrences could adversely affect
our financial condition, operating results and cash flows.
Competition from other terminals and pipelines that are able to supply our customers with storage capacity at a
lower price could adversely affect our financial condition and results of operations.
We face competition from other terminals and pipelines that may be able to supply our customers with integrated
terminaling services on a more competitive basis. We compete with national, regional and local terminal and pipeline
companies, including the major integrated oil companies, of widely varying sizes, financial resources and experience. Our
ability to compete could be harmed by factors we cannot control, including:
● price competition from terminal and transportation companies, some of which are substantially larger than us
and have greater financial resources and control substantially greater product storage capacity, than we do;
● the perception that another company may provide better service; and
● the availability of alternative supply points or supply points located closer to our customers’ operations.
In addition, our affiliates, including ArcLight, may engage in competition with us. If we are unable to compete
with services offered by our competitors, including ArcLight and its affiliates, it could have a material adverse effect on
our financial condition, results of operations and cash flows.
Many of our terminal facilities are connected to, and rely on, pipelines owned and operated by third parties for
the receipt and distribution of refined petroleum products, and such pipeline operators may compete with us, make
changes to their transportation service offerings or their pipeline tariffs, or suffer outages or reduced product
transportation, which in each case would adversely affect our financial condition and results of operations.
Our Southeast facilities include 20 active product terminals located along the Plantation and Colonial pipeline
systems and primarily receive refined products from Plantation and Colonial on behalf of our customers. In addition, the
Collins terminal receives from, delivers to, and transfers refined petroleum products between the Colonial and Plantation
pipeline systems. In these instances, we depend on our terminals’ connections to such petroleum pipelines owned and
operated by third parties to supply our terminal facilities. Our ability to compete in a particular terminal market could be
harmed by factors we cannot control, including changes in pipeline service offerings at one or more of our terminals or
changes in pipeline tariffs that make alternative third party terminal locations or different transportation options more
attractive to our current or prospective customers.
The FERC regulates the rates the pipeline operators can charge, and the terms and conditions they can offer, for
interstate transportation service on refined products pipelines that connect to our terminals. Generally, petroleum products
pipelines may change their rates within prescribed levels, which could lead our current or prospective customers to seek
alternative delivery methods or destinations. Moreover, we cannot control or predict the amount of refined petroleum
products that our customers are able to transport on the third party pipelines connecting into our terminals. The level of
throughput on these pipelines can be impacted by a number of factors, including the quality or quantity of refined product
produced, pipeline outages or interruptions due to weather-related or other natural causes, competitive forces, testing, line
repair, damage, reduced operating pressures or other causes any of which could negatively impact our customers’
shipments to our terminals. As a result our revenue, results of operations and cash flows could be materially adversely
affected.
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Expanding our business by constructing new facilities subjects us to risks that the project may not be completed
on schedule and that the costs associated with the project may exceed our estimates or budgeted costs, which could
adversely affect our financial condition and results of operations.
The construction of additions or modifications to our existing terminal and transportation facilities, and the
construction of new terminals and pipelines, involves numerous regulatory, environmental, political, legal and operational
uncertainties beyond our control and requires the expenditure of significant amounts of capital. If we undertake these
projects, they may not be completed on schedule or at all and may exceed the budgeted cost. If we experience material cost
overruns, we would have to finance these overruns using cash from operations, delaying other planned projects, incurring
additional indebtedness or obtaining additional equity. Any or all of these methods may not be available when needed or
may adversely affect our future results of operations and cash flows. Moreover, our revenue may not increase immediately
upon the expenditure of funds on a particular project. For instance, if we construct additional storage capacity, the
construction may occur over an extended period of time, and we will not receive any material increases in revenue until the
project is completed. Moreover, we may construct additional storage capacity to capture anticipated future growth in
consumption of products in a market in which such growth does not materialize.
Adverse economic conditions periodically result in weakness and volatility in the capital markets, that may
limit, temporarily or for extended periods, the ability of one or more of our significant customers to secure financing
arrangements adequate to purchase their desired volume of product, which could reduce use of our tank capacity and
throughput volumes at our terminal facilities and adversely affect our financial condition and results of operations.
Domestic and international economic conditions affect the functioning of capital markets and the availability of
credit. Adverse economic conditions periodically result in weakness and volatility in the capital markets, which in turn can
limit, temporarily or for extended periods, the credit available to various enterprises, including those involved in the supply
and marketing of products. As a result of these conditions, some of our customers may suffer short or long-term reductions
in their ability to finance their supply and marketing activities, or may voluntarily elect to reduce their supply and
marketing activities in order to preserve working capital. A significant decrease in our customers’ ability to secure
financing arrangements adequate to support their historic product throughput volumes could result in a material decline in
the use of our tank capacity or the throughput of product at our terminal facilities. We may not be able to generate
sufficient additional revenue from third parties to replace any shortfall in revenue from our current customers, which would
likely cause our revenue, results of operations and cash flows to decline.
Our business involves many hazards and operational risks, including adverse weather conditions, which could
cause us to incur substantial liabilities and increased operating costs.
Our operations are subject to the many hazards inherent in the terminaling and transportation of products,
including:
● leaks or accidental releases of products or other materials into the environment, whether as a result of human
error or otherwise;
● extreme weather conditions, such as hurricanes, tropical storms and rough seas, which are common along the
Gulf Coast, and earthquakes, which are common along the West Coast;
● explosions, fires, accidents, mechanical malfunctions, faulty measurement and other operating errors;
● epidemic or pandemic diseases; or
● acts of terrorism or vandalism.
If any of these events were to occur, we could suffer substantial losses because of personal injury or loss of life,
severe damage to and destruction of storage tanks, pipelines and related property and equipment, and pollution or other
environmental damage resulting in curtailment or suspension of our related operations and potentially substantial
unanticipated costs for the repair or replacement of property and environmental cleanup. In addition, if we suffer accidental
releases or spills of products at our terminals or pipelines, we could be faced with material third-party costs and liabilities,
including those relating to claims for damages to property and persons and governmental claims for
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natural resource damages or fines or penalties for related violations of environmental laws or regulations. We are not fully
insured against all risks to our business and if losses in excess of our insurance coverage were to occur, they could have a
material adverse effect on our operations. Furthermore, events like hurricanes can affect large geographical areas which can
cause us to suffer additional costs and delays in connection with subsequent repairs and operations because contractors and
other resources are not available, or are only available at substantially increased costs following widespread catastrophes.
We are not fully insured against all risks incident to our business, and could incur substantial liabilities as a
result.
We may not be able to maintain or obtain insurance of the type and amount we desire at reasonable rates. As a
result of market conditions, premiums and deductibles for certain of our insurance policies have increased substantially,
and could escalate further. In some instances, certain insurance could become unavailable or available only for reduced
amounts of coverage. For example, our insurance carriers require broad exclusions for losses due to terrorist acts. If we
were to incur a significant liability for which we were not fully insured, it could have a material adverse effect on our
financial condition. In accordance with typical industry practice, we do not have any property or title insurance on the
Razorback and Diamondback pipelines.
Our insurance policies each contain caps on the insurer’s maximum liability under the policy, and claims made by
us are applied against the caps. In the event we reach the cap, we would seek to acquire additional insurance in the
marketplace; however, we can provide no assurance that such insurance would be available or if available, at a reasonable
cost.
A significant decrease in demand for refined products due to alternative fuel sources, new technologies or
adverse economic conditions may cause one or more of our significant customers to reduce their use of our tank
capacity and throughput volumes at our terminal facilities, which would adversely affect our financial condition and
results of operations.
Market uncertainties, adverse economic conditions or lack of consumer confidence, in each case, including as may
result from the COVD-19 pandemic, may result in lower consumer spending on gasolines, distillates and travel, and high
prices of refined products could cause a reduction in demand for refined products, which could result in a material decline
in the use of our tank capacity or throughput of product at our terminal facilities. Additionally, the volatility in the price of
refined products may render our customers’ hedging activities ineffective, which could cause one or more of our significant
customers to decrease their supply and marketing activities in order to reduce their exposure to price fluctuations.
Additional factors that could lead to a decrease in market demand for refined products include:
● an increase in the market price of crude oil that leads to higher refined product prices;
● higher fuel taxes or other governmental or other regulatory actions that increase, directly or indirectly, the
cost of gasolines or other refined products;
● a shift by consumers to more fuel-efficient or alternative fuel vehicles or an increase in fuel economy,
whether as a result of technological advances by manufacturers, pending legislation proposing to mandate
higher fuel economy or otherwise;
● an increase in the use of alternative fuel sources, such as ethanol, biodiesel, fuel cells and solar, electric and
battery-powered engines (although, we do handle or would be capable of handling many renewable products
at most of our terminal facilities); or
● events that impact global market demand in a way that is not presently possible to predict, including impacts
from global health epidemics and concerns, such as the coronavirus (COVID-19).
Mergers between our existing customers and our competitors could provide strong economic incentives for the
combined entities to utilize their existing systems instead of ours in those markets where the systems compete. As a
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result, we could lose some or all of the volumes and associated revenues from these customers and we could experience
difficulty in replacing those lost volumes and revenues.
Because most of our operating costs are fixed, any decrease in throughput volumes at our terminal facilities,
would likely result not only in a decrease in our revenue, but also a decline in cash flow of a similar magnitude, which
would adversely affect our results of operations, financial position and cash flows.
Cyber-attacks that circumvent our security measures and other breaches of our information technology
systems could disrupt our operations and result in increased costs.
We utilize information technology systems to operate our assets and manage our businesses. A cyber-attack or
other security breach of our information technology systems could result in a breach of critical operational or financial
controls and lead to a disruption of our operations, commercial activities or financial processes, including as a result of
attempts to seek ransom from the Company. Additionally, we rely on third-party systems that could also be subject to
cyber-attacks or security breaches, and the failure of which could have a significant adverse effect on the operation of our
assets. We and the operators of the third-party systems on which we depend may not have the resources or technical
sophistication to anticipate or prevent every emerging type of cyber-attack, and such an attack, or the additional security
measures undertaken to prevent such an attack, could adversely affect our results of operations, financial position or cash
flows.
In addition, we collect and store sensitive data, including our proprietary business information and information
about our customers, suppliers and other counterparties, and personally identifiable information of our employees and of
employees of TMC, on our information technology networks. Despite our security measures, our information technology
and infrastructure may be vulnerable to cyber-attacks or breached due to employee error, malfeasance or other disruptions.
Any such breach could compromise our networks and the information stored therein could be accessed, publicly
disseminated, lost or stolen. Any such access, dissemination or other loss of information could result in legal claims or
proceedings, liability under laws that protect the privacy of personal information, regulatory penalties or could disrupt our
operations, any of which could adversely affect our results of operations, financial position or cash flows.
We could also face attempts to obtain unauthorized access to our information technology systems, proprietary
business information, and information about our customers by targeting acts of deception against individuals with
legitimate access to physical locations or information. We regularly remind our officers and the employees providing
services to the Company of these risks, and we annually update our executive team as to current and evolving risks relating
to a variety of cyber-attacks; however, these efforts are not guaranteed to prevent the effectiveness of these cyber-attacks or
any losses that may arise as a result thereof.
Because of our lack of asset diversification, adverse developments in our terminals or pipeline operations could
adversely affect our revenue and cash flows.
We rely exclusively on the revenue generated from our terminals and pipeline operations. Because of our lack of
diversification in asset type, an adverse development in these businesses would have a significantly greater impact on our
financial condition and results of operations than if we maintained more diverse assets.
Our operations are subject to governmental laws and regulations relating to the protection of the environment
that may expose us to significant costs and liabilities.
Our business is subject to the jurisdiction of numerous governmental agencies that enforce complex and stringent
laws and regulations with respect to a wide range of environmental, safety and other regulatory matters. We could be
adversely affected by increased costs resulting from stricter pollution control requirements or liabilities resulting from non-
compliance with required operating or other regulatory permits. New environmental laws and regulations might adversely
impact our activities, including the transportation, storage and distribution of petroleum products. Federal, state and local
agencies also could impose additional safety requirements, any of which could affect our profitability. Furthermore, our
failure to comply with environmental or safety related laws and regulations also could
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result in the assessment of administrative, civil and criminal penalties, the imposition of investigatory and remedial
obligations and even the issuance of injunctions that restrict or prohibit the performance of our operations.
Federal, state and local agencies also have the authority to prescribe specific product quality specifications of
refined products. Changes in product quality specifications or blending requirements could reduce our throughput volume,
require us to incur additional handling costs or require capital expenditures. For example, different product specifications
for different markets impact the fungibility of the products in our system and could require the construction of additional
storage. If we are unable to recover these costs through increased revenues, our cash flows could be adversely affected.
Terrorist attacks, and the threat of terrorist attacks, have resulted in increased costs to our business. Continued
hostilities in the Middle East or other sustained military campaigns may adversely impact our cash flows.
The long-term impact of terrorist attacks, such as the attacks that occurred on September 11, 2001, and the threat
of future terrorist attacks, on the energy transportation industry in general, and on us in particular, is impossible to predict.
Increased security measures that we have taken as a precaution against possible terrorist attacks have resulted in increased
costs to our business. Uncertainty surrounding continued hostilities in the Middle East or other sustained military
campaigns may affect our operations in unpredictable ways, including the possibility that infrastructure facilities could be
direct targets of, or indirect casualties of, an act of terrorism.
Many of our storage tanks and portions of our pipeline system have been in service for several decades that
could result in increased maintenance or remediation expenditures, which could adversely affect our results of
operations and our cash flows.
Our pipeline and storage assets are generally long-lived assets. As a result, some of those assets have been in
service for many decades. The age and condition of these assets could result in increased maintenance or remediation
expenditures. Any significant increase in these expenditures could adversely affect our results of operations, financial
position and cash flows.
Climate change legislation or regulations restricting emissions of “greenhouse gases” or setting fuel economy
or air quality standards could result in increased operating costs or reduced demand for the refined petroleum products
that we transport, store or otherwise handle in connection with our business.
In response to findings that emissions of carbon dioxide, methane and other greenhouse gases present an
endangerment to human health and the environment, the U.S. Environmental Protection Agency (“EPA”) has adopted
regulations under existing provisions of the federal Clean Air Act that, among other things, establish pre-construction and
operating permit requirements for certain large stationary sources. The EPA has also adopted rules requiring the
monitoring and reporting of greenhouse gas emissions from specified onshore and offshore natural gas and oil sources in
the United States on an annual basis.
Although Congress has from time to time considered legislation to reduce emissions of greenhouse gases, there
has not been significant activity in the form of adopted legislation to reduce greenhouse gas emissions at the federal level
in recent years. In the absence of such federal climate change legislation, a number of states, including states in which we
operate, have enacted or passed measures to track and reduce emissions of greenhouse gases, primarily through the planned
development of greenhouse gas emission inventories and regional greenhouse gas cap-and-trade programs. Most of these
cap-and-trade programs require major sources of emissions or major producers of fuels to acquire and surrender emission
allowances, with the number of allowances available for purchase reduced each year until the overall greenhouse gas
emission reduction goal is achieved.
In addition, in December 2015, over 190 countries, including the United States, reached an agreement to reduce
global greenhouse gas emissions (the “Paris Agreement”). The Paris Agreement entered into force in November 2016 after
more than 170 nations, including the United States, ratified or otherwise indicated their intent to be bound by the
agreement. In June 2017, former President Trump announced that the United States intended to withdraw from the Paris
Agreement and to seek negotiations either to reenter the Paris Agreement on different terms or a separate agreement. In
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August 2017, the U.S. Department of State officially informed the United Nations of the United States’ intent to withdraw
from the Paris Agreement. In November 2019, the United States formally initiated the withdrawal process. However, on
January 20, 2021, President Biden announced that the United States would rejoin the Paris Agreement. To the extent that
the United States and other countries implement this agreement or impose other climate change regulations on the oil and
natural gas industry, it could have an adverse effect on our business.
In particular, the adoption and implementation of regulations that require the reporting of greenhouse gases or
otherwise limit emissions of greenhouse gases from our equipment and operations could require us to incur costs to
monitor and report on greenhouse gas emissions or install new equipment to reduce emissions of greenhouse gases
associated with our operations. In addition, these regulatory initiatives could drive down demand for the refined petroleum
products, natural gas and other hydrocarbon products we transport, store or otherwise handle in connection with our
business by stimulating demand for alternative forms of energy that do not rely on the combustion of fossil fuels. Such
decreased demand could have a material adverse effect on our business, financial condition, results of operations and cash
flows.
In addition, some scientists have concluded that increasing concentrations of greenhouse gases in the earth’s
atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of
storms, droughts, floods and other climate events. If any such effects were to occur, they could have an adverse effect on
our assets and operations.
Risks Inherent in an Investment in Us
ArcLight indirectly controls the conduct of our business and the management of our operations. ArcLight has
conflicts of interest with and limited fiduciary duties to us, which may permit them to favor their own interests to our
detriment.
ArcLight is our sole equity-holder. Therefore, conflicts of interest may arise between ArcLight and its affiliates
and subsidiaries, on the one hand, and us, on the other hand. In resolving those conflicts of interest, ArcLight may favor its
own interests and the interests of its affiliates over the interests of the Company.
These conflicts include, among others, the following potential conflicts of interest:
● ArcLight and its affiliates may engage in competition with us under certain circumstances;
● Neither our operating agreement nor any other agreement requires ArcLight or its affiliates to pursue a
business strategy that favors us. This entitles ArcLight to consider only the interests and factors that it desires,
and it has no duty or obligation to give any consideration to any interest of, or factors affecting, us, our
affiliates or any other security-holder. ArcLight’s directors and officers have fiduciary duties to make
decisions in the best interests of ArcLight, which may be contrary to our interests or the interests of our
customers;
● Our operating agreement does not restrict ArcLight from causing us to pay it or its affiliates for any services
rendered to us or entering into additional contractual arrangements with any of these entities on our behalf;
● ArcLight is allowed to take into account the interests of parties other than us, such as ArcLight, or its
affiliates, in resolving conflicts of interest. Specifically, in determining whether a transaction or resolution is
“fair and reasonable,” ArcLight may consider the totality of the relationships between the parties involved,
including other transactions that may be particularly advantageous or beneficial to us;
● Our officers are officers of affiliates of Arclight, and we are managed by TLP Finance, our direct parent and a
controlled subsidiary of ArcLight, and also devote significant time to the business of these entities and are
compensated accordingly;
● ArcLight has limited its liability and reduced its fiduciary duties, and also has restricted the remedies
available to any party for actions that, without the limitations, might constitute breaches of fiduciary duty.
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ArcLight will not have any liability to us for decisions made in its capacity as our sole equity-holder so long
as it acted in good faith, meaning it believed that its decision was in the best interests of our company;
● ArcLight determines the amount and timing of acquisitions and dispositions, capital expenditures,
borrowings, issuance of additional securities, and reserves, each of which can affect our cash flows;
● ArcLight determines the amount and timing of any capital expenditures by our company and whether a
capital expenditure is a maintenance capital expenditure, which reduces operating surplus, or an expansion
capital expenditure, which does not reduce operating surplus, which can affect our cash flows;
● ArcLight and its officers and directors will not be liable for monetary damages to us, our security-holders or
assignees for any acts or omissions unless there has been a final and non-appealable judgment entered by a
court of competent jurisdiction determining that ArcLight or those other persons acted in bad faith or engaged
in fraud or willful misconduct; or
● ArcLight decides whether to retain separate counsel, accountants or others to perform services on our behalf.
ArcLight and its affiliates may compete with us and do not have any obligation to present business
opportunities to us.
Neither our operating agreement nor any other agreement will prohibit ArcLight or its affiliates from owning
assets or engaging in businesses that compete directly or indirectly with us. In addition, ArcLight and its affiliates may
acquire, construct or dispose of midstream assets or other assets in the future without any obligation to offer us the
opportunity to purchase any of those assets. ArcLight and its affiliates are large, established participants in the energy
industry and may have greater resources than we have, which may make it more difficult for us to compete with these
entities with respect to commercial activities as well as for acquisition opportunities. As a result, competition from
ArcLight and its affiliates could materially adversely impact our results of operations and cash flows.
General Risks
We could be negatively impacted by the recent outbreak of coronavirus (COVID-19).
In light of the uncertain and rapidly evolving situation relating to the spread of the coronavirus (COVID-19), this
public health concern could pose a risk to our employees, our customers, our vendors and the communities in which we
operate, which could negatively impact our business. The extent to which the coronavirus (COVID-19) may impact our
business will depend on future developments, which are highly uncertain and cannot be predicted at this time. We may
experience, among other impacts, (a) customer shutdowns to prevent spread of the virus, which could, among other things,
have an impact on any excess throughput or ancillary services we might otherwise provide for our customers, and (b)
limitations on our ability to execute on our business plan, including as a result of employee impacts from illness or school
closures and other community response measures, all of which could adversely affect our business, financial condition and
results of operations. We continue to monitor the situation, have actively implanted policies and practices to address the
situation, and may adjust our current policies and practices as more information and guidance become available.
Any acquisitions we make are subject to substantial risks, which could adversely affect our financial condition
and results of operations.
Any acquisition involves potential risks, including risks that we may:
● fail to realize anticipated benefits, such as cost-savings or cash flow enhancements;
● decrease our liquidity by using a significant portion of our available cash or borrowing capacity to finance
acquisitions;
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● significantly increase our interest expense or financial leverage if we incur additional debt to finance
acquisitions;
● encounter difficulties operating in new geographic areas or new lines of business;
● be unable to secure adequate customer commitments to use the acquired systems or facilities;
● incur or assume unanticipated liabilities, losses or costs associated with the business or assets acquired for
which we are not indemnified or for which the indemnity is inadequate;
● be unable to hire, train or retain qualified personnel to manage and operate our growing business and assets;
● be unable to successfully integrate the assets or businesses we acquire;
● less effectively manage our historical assets because of the diversion of management’s attention; or
● incur other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or
restructuring charges.
If any acquisitions we ultimately consummate result in one or more of these outcomes, our financial condition and
results of operations may be adversely affected.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 3. LEGAL PROCEEDINGS
We are party to various legal, regulatory and other matters arising from the day-to-day operations of our business
that may result in claims against us. While the ultimate impact of any proceedings cannot be predicted with certainty, our
management believes that the resolution of any of our pending legal proceedings will not have a material adverse effect on
our business, financial position, results of operations or cash flows.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
Part II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON UNITS, RELATED UNITHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
MARKET FOR COMMON UNITS
As a result of the Take-Private Transaction, TransMontaigne Partners common units ceased to be publicly traded,
and the TransMontaigne Partner’s common units are no longer listed on the NYSE.
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ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth our selected historical consolidated financial data for the periods and as of the dates
indicated. The following selected financial data for each of the years in the five-year period ended December 31, 2020, has
been derived from our consolidated financial statements. You should not expect the results for any prior periods to be
indicative of the results that may be achieved in future periods. You should read the following information together with
our historical consolidated financial statements and related notes and with “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” included elsewhere in this Annual Report.
2020 (1) (2)
2019 (1) (2)
2018 (1) (2)
2017 (1) (2)
2016 (2)
Years ended December 31,
(in thousands)
Operations Data:
Revenue
Operating costs and expenses
General and administrative expenses
Insurance expenses
Deferred compensation expense
Depreciation and amortization
Earnings from unconsolidated affiliates
Gain from insurance proceeds
Loss on disposition of assets
Operating income
Other expenses:
Interest expense
Amortization of deferred debt issuance
costs
Net earnings
Other Financial Data:
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing
activities
Balance Sheet Data (at period end):
Property, plant and equipment, net
Investments in unconsolidated affiliates
Total assets
Long-term debt
Equity
$ 277,093 $ 263,042 $ 232,297 $
(102,611)
(21,657)
(4,973)
(1,834)
(57,400)
6,498
—
—
(103,022)
(23,660)
(4,995)
(2,308)
(52,535)
4,894
3,351
—
95,116
84,767
(98,977)
(23,707)
(4,976)
(3,478)
(49,793)
8,852
—
(901)
59,317
184,447 $
(81,327)
(23,692)
(4,064)
(2,999)
(36,188)
7,071
—
—
43,248
164,943
(83,281)
(18,571)
(4,081)
(3,263)
(32,383)
10,029
—
—
33,393
(31,194)
(36,196)
(31,900)
(10,473)
(7,787)
(2,574)
61,348
$
(2,657)
45,914
$
(3,037)
24,380
$
(1,221)
31,554
$
$ 130,041
(79,994)
$
$ 100,589
(90,967)
$
$ 103,210
(56,869)
$
$
86,037
$ (336,955)
$
(50,542)
$
(9,558)
$
(46,284)
$ 737,501
$ 225,948
$ 1,069,206
$ 644,659
$ 335,293
$ 727,220
$ 225,425
$ 1,072,053
$ 644,162
$ 324,087
$ 689,170
$ 227,031
$ 1,002,008
$ 598,622
$ 338,585
$
$
$
$
$
$
250,875
656,092
233,181
988,082
593,200
361,940
(818)
24,788
63,414
(69,089)
(10,106)
418,130
241,093
691,858
291,800
368,607
$
$
$
$
$
$
$
$
$
(1) On December 15, 2017, we acquired the West Coast terminals from a third party for a total purchase price of
$276.8 million. The West Coast terminals represent two waterborne refined product and crude oil terminals located in
the San Francisco Bay Area refining complex with a total of 63 storage tanks with approximately 5.4 million barrels of
active storage capacity. The West Coast terminals have access to domestic and international crude oil and refined
products markets through marine, pipeline, truck and rail logistics capabilities. The accompanying consolidated
financial statements include the assets, liabilities and results of operations of the West Coast terminals from December
15, 2017.
(2) The June 1, 2019 TMS Contribution has been recorded at carryover basis as a reorganization of entities under common
control. As such, prior periods include the assets, liabilities, and results of operations of TMS as of and for the years
ended December 31, 2020, 2019, 2018, 2017 and eleven months ended 2016. For comparability, an estimate of the
results of operations of TMS is included for January 2016.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis of the results of operations and financial condition should be read in
conjunction with the accompanying consolidated financial statements included elsewhere in this Annual Report.
OVERVIEW
We are a terminaling and transportation company with assets and operations in the United States along the Gulf
Coast, in the Midwest, in Houston and Brownsville, Texas, along the Mississippi and Ohio Rivers, in the Southeast and
along the West Coast. We provide integrated terminaling, storage, transportation and related services for customers
engaged in the distribution and marketing of light refined petroleum products, heavy refined petroleum products,
renewable products, crude oil, chemicals, fertilizers and other liquid products. Light refined products include gasolines,
diesel fuels, heating oil and jet fuels. Heavy refined products include residual fuel oils and asphalt. Renewable products
include ethanol, biodiesel, renewable diesel and relevant feedstocks. We do not purchase or market products that we handle
or transport. Therefore, we do not have direct exposure to changes in commodity prices, except for the value of product
gains and losses arising from terminaling services agreements with certain customers, which accounts for a small portion of
our revenue.
We use our owned and operated terminaling facilities to, among other things: receive refined products and
renewable products from the pipeline, ship, barge or railcar making delivery on behalf of our customers and transfer those
products to the tanks located at our terminals; store the products in our tanks for our customers; monitor the volume of the
products stored in our tanks; distribute the products out of our terminals in vessels, railcars or truckloads using truck racks
and other distribution equipment located at our terminals, including pipelines; and heat residual fuel oils and asphalt stored
in our tanks. We also continue to provide ethanol logistics services and other services to the growing renewable products
market, as well as to engage in blending activities related to the throughput process.
Following the consummation of our Take-Private Transaction in February of 2019, we are wholly owned by TLP
Finance Holdings, LLC, an indirect controlled subsidiary of ArcLight Energy Partners Fund VI, L.P.
NATURE OF ASSETS
Gulf Coast Operations. Our Gulf Coast terminals consist of eight active product terminals and comprise the
largest terminal network in Florida. These terminals have approximately 6.9 million barrels of aggregate active storage
capacity in ports including Port Everglades, Miami and Cape Canaveral, which are among the busiest cruise ship ports in
the nation. At our Gulf Coast terminals, we handle refined and renewable products and crude oil on behalf of, and provide
integrated terminaling services to, customers engaged in the distribution and marketing of products and crude oil. Our Gulf
Coast terminals receive products from vessels on behalf of our customers. In addition, our Jacksonville terminal also
receives asphalt by rail, and our Port Everglades (North) terminal also receives product by truck. We distribute by truck or
barge at all of our Gulf Coast terminals. In addition, we distribute products by pipeline at our Port Everglades and Tampa
terminals. A major oil company retains an ownership interest, ranging from 25% to 50%, in specific tank capacity at our
Port Everglades (South) terminal. We manage and operate the Port Everglades (South) terminal, and we are reimbursed by
the major oil company for its proportionate share of our operating and maintenance costs.
Midwest Terminals. In Missouri and Arkansas, we own and operate the Razorback pipeline and terminals in
Mount Vernon, Missouri, at the origin of the pipeline and in Rogers, Arkansas, at the terminus of the pipeline. We refer to
these two terminals collectively as the Razorback terminals. The Razorback pipeline is a 67-mile, 8-inch diameter interstate
common carrier pipeline that transports light refined product from our terminal at Mount Vernon, where it is interconnected
with a pipeline system owned by a third party, to our terminal at Rogers. The Razorback pipeline has a capacity of
approximately 30,000 barrels per day. The Razorback terminals have approximately 0.4 million barrels of aggregate active
storage capacity. Effective January 1, 2021, a third party leases the capacity, and will take operatorship, of the Razorback
pipeline and the terminals in Mount Vernon, Missouri and in Rogers, Arkansas. Our Rogers facility is the only products
terminal located in Northwest Arkansas.
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We lease land in Cushing, Oklahoma and constructed storage tanks and associated infrastructure on the property
for the receipt of crude oil by truck and pipeline, the blending of crude oil and the storage of approximately 1.0 million
barrels of crude oil.
We also own and operate a terminal facility in Oklahoma City, Oklahoma with approximately 0.2 million barrels
of aggregate active storage capacity. Our Oklahoma City terminal receives gasolines and diesel fuels from a pipeline
system owned by a third party for delivery via our truck rack for redistribution to locations throughout the Oklahoma City
region.
Brownsville, Texas Operations. We own and operate a product terminal with approximately 1.5 million barrels of
aggregate active storage capacity and related ancillary facilities in Brownsville independent of the Frontera joint venture,
as well as the Diamondback pipeline which handles liquid product movements between south Texas and Mexico. At our
Brownsville terminal we handle refined petroleum products, chemicals, vegetable oils, naphtha, wax and propane on behalf
of, and provide integrated terminaling services to, customers engaged in the distribution and marketing of products and
natural gas liquids. Our Brownsville facilities receive products on behalf of our customers from vessels, by truck or railcar.
The Diamondback pipeline consists of an 8” pipeline that previously transported propane approximately 16 miles
from our Brownsville facilities to the U.S./Mexico border and a 6” pipeline, which runs parallel to the 8” pipeline that can
be used by us in the future to transport additional refined products to Matamoros, Mexico. Operations on the Diamondback
pipeline were shut down in the first quarter of 2018; however, we expect to recommission the Diamondback Pipeline and
resume operations on both the 8” pipeline, providing gasoline service thereon, and the previously idle 6” pipeline,
providing diesel service thereon, in the second quarter 2021, and have previously filed revised tariffs with the FERC to
support such activities.
River Operations. Our River terminals are composed of 11 active product terminals located along the Mississippi
and Ohio Rivers with approximately 2.2 million barrels of aggregate active storage capacity. Our River operations also
include a dock facility in Baton Rouge, Louisiana, which is the only direct waterborne connection between the Colonial
pipeline and Mississippi River waterborne transportation. At our River terminals, we handle gasolines, diesel fuels, heating
oil, chemicals and fertilizers on behalf of, and provide integrated terminaling services to, customers engaged in the
distribution and marketing of products and industrial and commercial end-users. Our River terminals receive products from
vessels and barges on behalf of our customers and distribute products primarily to trucks and barges.
Southeast Operations. Our Southeast terminals consist of 20 active product terminals located along the Colonial
and Plantation pipelines in Alabama, Georgia, Mississippi, North Carolina, South Carolina and Virginia with an aggregate
active storage capacity of approximately 12.3 million barrels. At our Southeast terminals, we handle gasolines, diesel fuels,
ethanol, biodiesel, jet fuel and heating oil on behalf of, and provide integrated terminaling services to, customers engaged
in the distribution and marketing of refined products. Our Southeast terminals primarily receive products from the
Plantation and Colonial pipelines on behalf of our customers and distribute products primarily to trucks with the exception
of the Collins terminal. The Collins terminal is the only independent terminal capable of storing and redelivering product
to, from and between the Colonial and Plantation pipelines.
West Coast Operations. Our West Coast terminals consist of two active product terminals with approximately 5.4
million barrels of aggregate active storage capacity. The terminals are well positioned with pipeline connections to three of
the five local refineries and marine access to all five in the San Francisco Bay area and direct connection to the Northern
California products pipeline distribution system. At our West Coast terminals, we handle crude oil, gasoline, diesel, jet fuel,
gasoline blend stocks, fuel oil, Avgas and ethanol and other renewable products on behalf of, and provide integrated
terminaling services to, customers engaged in the distribution and marketing of products. Our West Coast terminals
primarily receive products from vessels, pipeline and rail facilities on behalf of our customers and distribute products
primarily via vessel, pipeline, truck and rail facilities.
Investment in Frontera. On April 1, 2011, we contributed approximately 1.5 million barrels of light petroleum
product storage capacity, as well as related ancillary facilities, to the Frontera joint venture, in exchange for a cash
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payment of approximately $25.6 million and a 50% ownership interest in the Frontera joint venture. An affiliate of
PEMEX, Mexico’s state owned petroleum company, acquired the remaining 50% ownership interest in Frontera for a cash
payment of approximately $25.6 million. We operate the Frontera assets under an operations and reimbursement agreement
between us and Frontera. Frontera has approximately 1.7 million barrels of aggregate active storage capacity. Our 50%
ownership interest does not allow us to control Frontera, but does allow us to exercise significant influence over its
operations. Accordingly, we account for our investment in Frontera under the equity method of accounting.
Investment in BOSTCO. On December 20, 2012, we acquired a 42.5% Class A ownership interest in BOSTCO
from Kinder Morgan Battleground Oil, LLC, a wholly owned subsidiary of Kinder Morgan. BOSTCO is a terminal facility
on the Houston Ship Channel designed to handle residual fuel, feedstocks, distillates and other black oils. BOSTCO
currently has fully subscribed capacity of approximately 7.1 million barrels. Our investment in BOSTCO entitles us to
appoint a member to the Board of Managers of BOSTCO, to vote our proportionate ownership share on general
governance matters and to certain rights of approval over significant changes in, or expansion of, BOSTCO’s business.
Kinder Morgan is responsible for managing BOSTCO’s day-to-day operations. Our 42.5% Class A ownership interest does
not allow us to control BOSTCO, but does allow us to exercise significant influence over its operations. Accordingly, we
account for our investment in BOSTCO under the equity method of accounting.
Central Services. Our Central services segment primarily represents the costs of employees performing operating
oversight functions, engineering, health, safety and environmental services to our terminals and terminals that we operate
or manage, including for affiliate terminals owned by ArcLight. In addition, Central services represent the cost of
employees at affiliate terminals owned by ArcLight that we operate. We receive a fee from these affiliates based on our
costs incurred.
NATURE OF REVENUE AND EXPENSES
We generate revenue from our terminal and pipeline transportation operations by charging fees for providing
integrated terminaling, transportation and related services. We have several significant customer relationships that made up
approximately 79% of the total revenue for the year ended December 31, 2020. These relationships include Pilot Flying J,
Freepoint Commodities LLC, RaceTrac Petroleum Inc., Atlantic Trading and Marketing, Tesoro, Musket Corporation, BP,
Associated Asphalt, Magellan Pipeline Company, L.P., United States Government, Valero Marketing and Supply Company,
PMI Trading Ltd., Exxon Mobil Oil Corporation, World Fuel Services Corporation, Chevron Corporation, Shell, Marathon
Petroleum, Gunvor and Vitol.
The fees we charge, our other sources of revenue and our direct costs and expenses are described below.
Terminaling services fees. Our terminaling services agreements are structured as either throughput agreements or
storage agreements. Our throughput agreements contain provisions that require our customers to make minimum payments,
which are based on contractually established minimum volume of throughput of the customer’s product at our facilities
over a stipulated period of time. Due to this minimum payment arrangement, we recognize a fixed amount of revenue from
the customer over a certain period of time, even if the customer throughputs less than the minimum volume of product
during that period. In addition, if a customer throughputs a volume of product exceeding the minimum volume, we would
recognize additional revenue on this incremental volume. Our storage agreements require our customers to make minimum
payments based on the volume of storage capacity available to the customer under the agreement, which results in a fixed
amount of recognized revenue. We refer to the fixed amount of revenue recognized pursuant to our terminaling services
agreements as being “firm commitments.” Revenue recognized in excess of firm commitments and revenue recognized
based solely on the volume of product distributed or injected are referred to as “ancillary.” In addition, ancillary revenue
also includes fees received from ancillary services including heating and mixing of stored products, product transfer, railcar
handling, butane blending, proceeds from the sale of product gains, wharfage and vapor recovery.
Pipeline transportation fees. We earned pipeline transportation fees at our Diamondback pipeline under a
capacity reservation agreement. Revenue associated with the capacity reservation agreement is recognized ratably over the
respective term, regardless of whether the capacity is actually utilized. Once our Brownsville terminal expansion efforts are
complete, including the conversion of our Diamondback pipeline to transport diesel and gasoline, we then
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expect to earn pipeline transportation fees at our Diamondback pipeline based on the volume of product transported subject
to minimum volume commitments. We earn pipeline transportation fees at our Razorback pipeline based on an allocation
of the aggregate fees charged under the capacity agreement with our customer who has contracted for 100% of our
Razorback system.
Management fees. We manage and operate certain tank capacity at our Port Everglades South terminal for a major
oil company and receive a reimbursement of its proportionate share of operating and maintenance costs. We manage and
operate the Frontera joint venture and receive a management fee based on our costs incurred. We lease land under
operating leases as the lessor or sublessor with third parties and affiliates. We also managed and operated for an affiliate of
PEMEX, Mexico’s state-owned petroleum company, a products pipeline connected to our Brownsville terminal facility and
received a management fee through August 23, 2018. We manage and operate rail sites at certain Southeast terminals on
behalf of a major oil company and receive reimbursement for operating and maintenance costs. We manage and operate
terminals that are owned by affiliates of ArcLight, including for SeaPort Midstream Partners in Seattle, Washington and
Portland, Oregon and another terminal for SeaPort Sound in Tacoma, Washington and receive a management fee based on
our costs incurred. We also manage additional terminal facilities that are owned by affiliates of ArcLight, including
Lucknow-Highspire Terminals in Pennsylvania, and, prior to July 1, 2019, the Baltimore Terminal.
Operating costs and expenses. The operating costs and expenses of our operations include the wages and
employee benefits, utilities, communications, repairs and maintenance, rent, property taxes, vehicle expenses,
environmental compliance costs, materials and supplies needed to operate our terminals and pipelines.
General and administrative expenses. General and administrative expenses cover the costs of corporate functions
such as legal, accounting, treasury, insurance administration and claims processing, information technology, human
resources, credit, payroll, taxes and other corporate services. General and administrative expenses also include third party
accounting costs associated with annual and quarterly reports and tax return preparation and distribution, and legal fees.
Insurance expenses. Insurance expenses include charges for insurance premiums to cover costs of insuring
activities such as property, casualty, pollution, automobile, directors’ and officers’ liability, and other insurable risks.
SIGNIFICANT DEVELOPMENTS SINCE THE FILING OF OUR PRIOR YEAR FORM 10-K
COVID-19. The ongoing pandemic involving COVID-19, a highly transmissible and pathogenic coronavirus, has
resulted in restrictions on, and a public response with respect to, travel and economic activity that have reduced demand
and pricing for crude oil, refined petroleum products, renewable products, and other products that we handle. The reduction
in commodity price in 2020 and demand for products that we handle has, for the time being, resulted in a strong demand
for storage capacity. For example, in late March 2020, we contracted approximately 1,000,000 barrels of capacity at our
Cushing, Oklahoma terminal and approximately 705,000 barrels of available capacity at our Collins, Mississippi terminal
that had recently become available. Currently, approximately 83% of our terminaling services revenue is derived from firm
commitments pursuant to our multi-year agreements that require our customers to make minimum payments based on
minimum volumes of throughput of the customer’s product or the volume of storage capacity available to the customer
under the agreement. Further, the majority of our terminaling services agreements have a remaining term in excess of one
year. As a result, we expect the negative impacts to our business to continue to be primarily limited to delays in our capital
expansion projects, which may be occurring, in part, due to state and local government responses to COVID-19.
We have taken proactive and sustained measures to deliver our services safely and reliably during the COVID-19
pandemic. At the outset of the pandemic, we activated an Incident Support Team to execute our Infectious Disease Control
Policy, and to focus on a number of priorities, including: (i) implement basic infection prevention techniques and other
workplace protections in our business operations; (ii) identify and isolate individuals suspected of being infected by
COVID-19; (iii) identify risk factors in our workforce that may increase the possibility of exposure to COVID-19; and (iv)
develop a contingency plan for the possibility that a serious outbreak does occur in the area of any of our terminals. We are
following recommendations from public health authorities and have taken steps to help prevent
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our employees’ exposure to the spread of COVID-19, including, where practical, work-at-home plans enacted in March
2020 and the implementation of business continuity plans to enable the integrity of our operations and protect the health of
our employees.
To date, our operations and employees have not been materially impacted by the COVID-19 pandemic, including
the recent rise in caseload in the majority of the country; thereby allowing our customers continued access and utilization
of our strategic terminal network. We continue to employ all safety processes and procedures in the normal course. We
provide an essential service across our markets, which has been recognized in most relevant regulatory guidance regarding
COVID-19. Further, we have not experienced any material instance of our customers failing to meet their contractual
commitments to us as a result of these recent developments. There continue to be too many variables and uncertainties
regarding COVID-19 — including the continued spread of the virus, the duration and severity of the
outbreak and the extent of travel restrictions and business closures, and medical advancements in treating and vaccinating
against the disease and the availability and the resulting economic impact of any such advancements or vaccinations — to
reasonably predict the potential longer-term impact of COVID-19 on our business and operations. We continue to monitor
the situation, have actively implemented policies and practices to address the situation and actively protect our employees,
and may adjust our current policies and practices as more information and guidance become available.
Expansion of Assets
Expansion of our Brownsville operations. Our Brownsville expansion project, which is underpinned by new
long-term agreements, includes the construction of approximately 805,000 barrels of additional liquids storage capacity, the
construction of gasoline railcar loading capabilities and the conversion of our Diamondback pipeline to transport diesel and
gasoline across the U.S./Mexico border. The Diamondback pipeline is comprised of an 8” pipeline that previously
transported propane, as well as a 6” pipeline, which runs parallel to the 8” pipeline, that has been idle and both can be used
to transport refined products to Matamoros, Mexico. The majority of the additional liquids storage capacity was placed into
commercial service during the first three quarters of 2019 with a remaining 175,000 barrels of capacity to be completed in
the first quarter of 2021. We expect to recommission the Diamondback pipeline and resume operations on both the 8”
pipeline and the previously idle 6” pipeline in the second quarter of 2021. We expect the construction of the gasoline railcar
loading capabilities to be completed in the first quarter 2021. The anticipated aggregate cost of these expansion efforts is
estimated to be approximately $75 million.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
A summary of the significant accounting policies that we have adopted and followed in the preparation of our
historical consolidated financial statements is detailed in Note 1 of Notes to consolidated financial statements. Certain of
these accounting policies require the use of estimates. The following estimates, in management’s opinion, are subjective in
nature, require the exercise of judgment and involve complex analyses: useful lives of our plant and equipment and accrued
environmental obligations. These estimates are based on our knowledge and understanding of current conditions and
actions we may take in the future. Changes in these estimates will occur as a result of the passage of time and the
occurrence of future events. Subsequent changes in these estimates may have a significant impact on our financial
condition and results of operations (see Note 1 of Notes to consolidated financial statements).
Useful lives of plant and equipment. We calculate depreciation using the straight-line method, based on
estimated useful lives of our assets. These estimates are based on various factors including age (in the case of acquired
assets), manufacturing specifications, technological advances and historical data concerning useful lives of similar assets.
Uncertainties that impact these estimates include changes in laws and regulations relating to restoration, economic
conditions and supply and demand in the area. When assets are put into service, we make estimates with respect to useful
lives that we believe to be reasonable. However, subsequent events could cause us to change our estimates, thus impacting
the future calculation of depreciation. Estimated useful lives are 15 to 25 years for terminals and pipelines and 3 to 25 years
for furniture, fixtures and equipment.
Accrued environmental obligations. At December 31, 2020, we have an accrued liability of approximately
$1.0 million representing our best estimate of the undiscounted future payments we expect to pay for environmental
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costs to remediate existing conditions. Estimates of our environmental obligations are subject to change due to a number of
factors and judgments involved in the estimation process, including the early stage of investigation at certain sites, the
lengthy time frames required to complete remediation, technology changes affecting remediation methods, alternative
remediation methods and strategies and changes in environmental laws and regulations. Changes in our estimates and
assumptions may occur as a result of the passage of time and the occurrence of future events.
Costs incurred to remediate existing contamination at the terminals have been, and are expected in the future to
be, insignificant. In connection with our acquisition of the Florida (other than Pensacola), Midwest, Brownsville, Texas,
River, Southeast, and Pensacola, Florida terminal and facilities, a third party agreed to indemnify us against certain
potential environmental claims, losses and expenses. Based on our current knowledge, we expect that the active
remediation projects subject to the benefit of this indemnification obligation are winding down and will not involve
material additional claims, losses, and expenses. Nonetheless, the forgoing environmental indemnification obligations of a
third party to us remain in place and were not affected by the Take-Private Transaction.
RESULTS OF OPERATIONS—YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018
ANALYSIS OF REVENUE
Total revenue. We derive revenue from our terminal and pipeline transportation operations by charging fees for
providing integrated terminaling, transportation and related services. Our total revenue by category was as follows (in
thousands):
Terminaling services fees
Pipeline transportation fees
Management fees
Revenue
Year ended
Year ended
Total Revenue by Business Category
Year ended
December 31, December 31, December 31,
2019
$ 240,950
3,457
18,635
$ 263,042
2018
$ 216,231
3,295
12,771
$ 232,297
2020
$ 255,009
3,519
18,565
$ 277,093
See discussion below for a detailed analysis of terminaling services fees, pipeline transportation fees and
management fees included in the table above.
We operate our business and report our results of operations in seven principal business segments: (i) Gulf Coast
terminals, (ii) Midwest terminals, (iii) Brownsville terminals including management of Frontera, (iv) River terminals,
(v) Southeast terminals, (vi) West Coast terminals and (vii) Central services. Our Central services segment primarily
represents the costs of employees performing operating oversight functions, engineering, health, safety and environmental
services to our terminals and terminals that we operate or manage, including for affiliate terminals owned by ArcLight. In
addition, Central services represent the cost of employees at affiliate terminals owned by ArcLight that we operate. We
receive a fee from these affiliates based on our costs incurred.
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Gulf Coast terminals
Midwest terminals
Brownsville terminals
River terminals
Southeast terminals
West Coast terminals
Central services
Revenue
Year ended
Year ended
Total Revenue by Business Segment
Year ended
December 31, December 31, December 31,
2019
$ 73,416
11,655
18,953
10,233
88,777
48,196
11,812
$ 263,042
2018
$ 64,622
11,899
17,246
10,654
83,712
39,960
4,204
$ 232,297
2020
$ 76,907
10,267
21,969
11,700
89,520
54,470
12,260
$ 277,093
Total revenue by business segment is presented and further analyzed below by category of revenue.
Terminaling services fees. Our terminaling services agreements are structured as either throughput agreements or
storage agreements. Our throughput agreements contain provisions that require our customers to make minimum payments,
which are based on contractually established minimum volume of throughput of the customer’s product at our facilities
over a stipulated period of time. Due to this minimum payment arrangement, we recognize a fixed amount of revenue from
the customer over a certain period of time, even if the customer throughputs less than the minimum volume of product
during that period. In addition, if a customer throughputs a volume of product exceeding the minimum volume, we would
recognize additional revenue on this incremental volume. Our storage agreements require our customers to make minimum
payments based on the volume of storage capacity available to the customer under the agreement, which results in a fixed
amount of recognized revenue.
We refer to the fixed amount of revenue recognized pursuant to our terminaling services agreements as being
“firm commitments.” Revenue recognized in excess of firm commitments and revenue recognized based solely on the
volume of product distributed or injected are referred to as “ancillary.” In addition, “ancillary” revenue also includes fees
received from ancillary services including heating and mixing of stored products, product transfer, railcar handling, butane
blending, proceeds from the sale of product gains, wharfage and vapor recovery.
Gulf Coast terminals
Midwest terminals
Brownsville terminals
River terminals
Southeast terminals
West Coast terminals
Central services
Terminaling services fees
Year ended
Year ended
Terminaling Services Fees
by Business Segment
Year ended
December 31, December 31, December 31,
2019
$ 73,380
9,804
11,560
10,233
87,813
48,160
—
$ 240,950
2018
$ 64,338
10,127
8,339
10,654
82,821
39,952
—
$ 216,231
2020
$ 76,875
8,358
15,071
11,700
88,573
54,432
—
$ 255,009
The increase in terminaling services fees at our Gulf Coast terminals for the years ended December 31, 2020 and
2019 is primarily a result of recontracting capacity to third-party customers at higher rates. The decrease in terminaling
services fees at our Midwest terminals for the year ended December 31, 2020 is primarily a result of our capacity in
Cushing, Oklahoma being off-contract in the first quarter of 2020. The increase in terminaling services fees at our
Brownsville terminals for the years ended December 31, 2020 and 2019 is primarily a result of placing into service
approximately 0.6 million barrels of new tank capacity in various stages throughout 2019. The increase in terminaling
services fees at our River terminals for the year ended December 31, 2020 is primarily a result of contracting available
capacity to third-party customers. The increase in terminaling services fees at our Southeast terminals for the years ended
December 31, 2020 and 2019 is primarily a result of placing into service approximately 0.9 million barrels of new tank
capacity at our Collins terminal in the first quarter of 2019. The increase in terminaling services fees at our
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West Coast terminals for the years ended December 31, 2020 and 2019 is primarily a result of contracting available
capacity to third-party customers, re-contracting capacity at higher rates and placing into service approximately 0.1 million
barrels of new tank capacity in the first quarter of 2019.
Included in terminaling services fees for the years ended December 31, 2020, 2019 and 2018 are fees charged to
affiliates of approximately $11.3 million, $11.2 million and $11.0 million, respectively.
The “firm commitments” and “ancillary” revenue included in terminaling services fees were as follows (in
thousands):
Firm commitments
Ancillary
Terminaling services fees
Year ended
December 31,
Firm Commitments and Ancillary Terminaling Services Fees
Year ended
December 31,
2019
192,440
48,510
240,950
Year ended
December 31,
2018
171,774
44,457
216,231
2020
212,403
42,606
255,009
$
$
$
$
$
$
The remaining terms on the terminaling services agreements that generated “firm commitments” for the year
ended December 31, 2020 were as follows (in thousands):
Less than 1 year remaining
1 year or more, but less than 3 years remaining
3 years or more, but less than 5 years remaining
5 years or more remaining (1)
Total firm commitments for the year ended December 31, 2020
$ 45,038
69,431
52,099
45,835
$ 212,403
21%
32%
25%
22%
(1) We have a terminaling services agreement with a third party relating to our Southeast terminals that will continue
unless and until the third party provides at least 24 months’ prior notice of its intent to terminate the agreement.
Effective at any time from and after July 31, 2040, we have the right to terminate the agreement by providing at least
24 months’ prior notice of our intent to terminate the agreement. We do not believe the third party will terminate the
agreement prior to July 31, 2040; therefore we have presented the firm commitments related to this terminaling
services agreement in the 5 years or more remaining category in the table above.
Pipeline transportation fees. We earned pipeline transportation fees at our Diamondback pipeline under a
capacity reservation agreement. Revenue associated with the capacity reservation agreement is recognized ratably over the
respective term, regardless of whether the capacity is actually utilized. Once our Brownsville terminal expansion efforts are
complete, including the conversion of our Diamondback pipeline to transport diesel and gasoline, we then expect to earn
pipeline transportation fees at our Diamondback pipeline based on the volume of product transported subject to minimum
volume commitments. We earn pipeline transportation fees at our Razorback pipeline based on an allocation of the
aggregate fees charged under the capacity agreement with our customer who has contracted for 100% of our Razorback
system.
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The pipeline transportation fees by business segments were as follows (in thousands):
Gulf Coast terminals
Midwest terminals
Brownsville terminals
River terminals
Southeast terminals
West Coast terminals
Central services
Pipeline Transportation Fees
by Business Segment
Year ended
Year ended
December 31, December 31,
2020
2019
$
— $ — $
Year ended
December 31,
2018
1,909
1,610
1,851
1,606
— —
— —
— —
— —
3,457
$
—
1,772
1,523
—
—
—
—
3,295
Pipeline transportation fees
$
3,519
$
Included in pipeline transportation fees for each of the years ended December 31, 2020, 2019 and 2018 are fees
charged to affiliates of approximately $nil.
Management fees. We manage and operate certain tank capacity at our Port Everglades South terminal for a major
oil company and receive a reimbursement of its proportionate share of operating and maintenance costs. We manage and
operate the Frontera joint venture and receive a management fee based on our costs incurred. We lease land under
operating leases as the lessor or sublessor with third parties and affiliates. We also managed and operated for an affiliate of
PEMEX, Mexico’s state-owned petroleum company, a products pipeline connected to our Brownsville terminal facility and
received a management fee through August 23, 2018. We manage and operate rail sites at certain Southeast terminals on
behalf of a major oil company and receive reimbursement for operating and maintenance costs. We manage and operate
terminals that are owned by affiliates of ArcLight, including for SeaPort Midstream Partners in Seattle, Washington and
Portland, Oregon and another terminal for SeaPort Sound in Tacoma, Washington and receive a management fee based on
our costs incurred. We also manage additional terminal facilities that are owned by affiliates of ArcLight, including
Lucknow-Highspire Terminals in Pennsylvania, and, prior to July 1, 2019, the Baltimore Terminal. The management fees
by business segments were as follows (in thousands):
Management Fees
by Business Segment
Year ended Year ended Year ended
December 31, December 31, December 31,
2020
2019
2018
Gulf Coast terminals
Midwest terminals
Brownsville terminals
River terminals
Southeast terminals
West Coast terminals
Central services
Management fees
$
$
32
—
$
36
—
5,288
5,787
—
947
38
12,260
$ 18,565
—
964
36
11,812
$ 18,635
284
—
7,384
—
891
8
4,204
$ 12,771
The decrease in Brownsville terminals management fees for the year ended December 31, 2019 is a result of no
longer operating and managing for an affiliate of PEMEX, Mexico’s state-owned petroleum company, a products pipeline
connected to our Brownsville terminal facility as of August 23, 2018. The increase in Central services management fees for
the year ended December 31, 2019 is a result of operating and managing additional terminal facilities that are owned by
affiliates of ArcLight including SeaPort Midstream Partners, SeaPort Sound, Lucknow-Highspire Terminals and, prior to
July 1, 2019, the Baltimore Terminal. We began to operate SeaPort Midstream Partners in November 2017, SeaPort Sound
and the Baltimore Terminal in November 2018, and we began to manage Lucknow-Highspire Terminals starting January 1,
2019. Our management of the Baltimore Terminal ended on July 1, 2019.
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Included in management fees for the years ended December 31, 2020, 2019 and 2018 are fees charged to affiliates
of approximately $17.5 million, $17.6 million and $10.0 million, respectively.
ANALYSIS OF COSTS AND EXPENSES
The operating costs and expenses of our operations include wages and employee benefits, utilities,
communications, repairs and maintenance, rent, property taxes, vehicle expenses, environmental compliance costs,
materials and supplies needed to operate our terminals and pipelines. Consistent with historical trends across our
terminaling and transportation facilities, repairs and maintenance expenses can vary from period to period based on project
maintenance schedules and other factors such as weather. The operating costs and expenses of our operations were as
follows (in thousands):
Wages and employee benefits
Utilities and communication charges
Repairs and maintenance
Office, rentals and property taxes
Vehicles and fuel costs
Environmental compliance costs
Contract services
Other
Operating costs and expenses
Operating Costs and Expenses
Year ended Year ended Year ended
December 31, December 31, December 31,
2019
$ 48,589
10,119
14,205
14,193
1,113
3,383
2,247
9,173
$ 103,022
2020
$ 48,983
9,140
14,849
13,933
1,082
3,776
2,304
8,544
$ 102,611
2018
$ 42,527
10,186
14,624
13,091
1,096
4,134
3,010
10,309
$ 98,977
The operating costs and expenses of our business segments were as follows (in thousands):
Operating Costs and Expenses
by Business Segment
Gulf Coast terminals
Midwest terminals
Brownsville terminals
River terminals
Southeast terminals
West Coast terminals
Central services
Operating costs and expenses
Year ended Year ended Year ended
December 31, December 31, December 31,
2019
$ 22,196
3,443
9,053
6,040
23,500
16,339
22,451
$ 103,022
2020
$ 20,946
2,942
9,749
5,777
23,498
18,454
21,245
$ 102,611
2018
$ 22,817
3,053
7,812
6,832
26,836
14,678
16,949
$ 98,977
The increase in operating costs and expenses for Central services for the year ended December 31, 2019 is a result
of operating terminal facilities that are owned by affiliates of ArcLight. We began to operate SeaPort Midstream Partners in
November 2017 and SeaPort Sound and the Baltimore Terminal in November 2018. Our management of the Baltimore
Terminal ended on July 1, 2019.
General and administrative expenses cover the costs of corporate functions such as legal, accounting, treasury,
insurance administration and claims processing, information technology, human resources, credit, payroll, taxes and other
corporate services. General and administrative expenses also include third party accounting costs associated with annual
and quarterly reports and tax return preparation and distribution, and legal fees. The general and administrative expenses
for the years ended December 31, 2020, 2019 and 2018 were approximately $21.7 million, $23.7 million and
$23.7 million, respectively. The decrease in general and administrative expenses for the year ended December 31, 2020
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is primarily attributable to one-time costs associated with the Take-Private Transaction in the prior years.
Insurance expenses include charges for insurance premiums to cover costs of insuring activities such as property,
casualty, pollution, automobile, directors’ and officers’ liability, and other insurable risks. For each of the years ended
December 31, 2020, 2019 and 2018, insurance expense was approximately $5.0 million.
Deferred compensation expense includes expense associated with awards granted to certain key officers and
employees who provide service to us that vest over future service periods and, prior to the Take-Private Transaction, grants
to the independent directors of our general partner under our long-term incentive plan (which was terminated in connection
with the Take-Private Transaction). Prior to the Take-Private Transaction, we had the intent and ability to settle the deferred
compensation awards in our common units, and accordingly, we accounted for the awards as an equity award; following
the Take-Private Transaction, we have the intent and ability to settle the awards in cash. The expenses associated with these
deferred compensation awards were approximately $1.8 million, $2.3 million and $3.5 million for the years ended
December 31, 2020, 2019 and 2018, respectively.
Depreciation and amortization expenses for the years ended December 31, 2020, 2019 and 2018 were
approximately $57.4 million, $52.5 million and $49.8 million, respectively. The increase in depreciation and amortization
expense for the years ended December 31, 2020 and 2019 is primarily attributable to placing terminal expansion projects in
service.
Interest expense for the years ended December 31, 2020, 2019 and 2018 was approximately $31.2 million, $36.2
million and $31.9 million, respectively. The decrease in interest expense for the year ended December 31, 2020 is primarily
attributable to decreases in LIBOR based interest rates. The increase in interest expense for the year ended December 31,
2019 is primarily attributable to financing our growth capital projects with additional debt financing and increases in
LIBOR based interest rates.
ANALYSIS OF INVESTMENTS IN UNCONSOLIDATED AFFILIATES
At December 31, 2020 and 2019, our investments in unconsolidated affiliates include a 42.5% Class A ownership
interest in BOSTCO and a 50% ownership interest in Frontera. BOSTCO is a terminal facility located on the Houston Ship
Channel that encompasses approximately 7.1 million barrels of distillate, residual and other black oil product storage. Class
A and Class B ownership interests share in cash distributions on a 96.5% and 3.5% basis, respectively. Class B ownership
interests do not have voting rights and are not required to make capital investments. Frontera is a terminal facility located
in Brownsville, Texas that encompasses approximately 1.7 million barrels of light petroleum product storage, as well as
related ancillary facilities.
The following table summarizes our investments in unconsolidated affiliates:
BOSTCO
Frontera
Total investments in unconsolidated affiliates
42.5 %
50 %
42.5 % $ 201,912
24,036
$ 225,948
50 %
43
Percentage of
ownership
December 31,
2020
December 31,
2019
Carrying value
(in thousands)
December 31, December 31,
2020
2019
$ 201,743
23,682
$ 225,425
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Earnings from investments in unconsolidated affiliates were as follows (in thousands):
BOSTCO
Frontera
Total earnings from investments in unconsolidated affiliates
Year ended Year ended Year ended
December 31, December 31, December 31,
2019
2,356
2,538
4,894
2018
5,767
3,085
8,852
2020
3,933
2,565
6,498
$
$
$
$
$
$
Additional capital investments in unconsolidated affiliates were as follows (in thousands):
BOSTCO
Frontera
Additional capital investments in unconsolidated affiliates
$
$
Year ended Year ended Year ended
December 31,
2018
December 31, December 31,
2020
7,257
$
—
$
7,257
2019
4,707
225
4,932
$
$
—
1,413
1,413
Cash distributions received from unconsolidated affiliates were as follows (in thousands):
BOSTCO
Frontera
Cash distributions received from unconsolidated affiliates
LIQUIDITY AND CAPITAL RESOURCES
Year ended Year ended Year ended
December 31, December 31, December 31,
2019
8,325
3,107
$ 11,432
2020
$ 11,021
2,211
$ 13,232
2018
$ 12,135
4,280
$ 16,415
$
Our primary liquidity needs are to fund our debt service obligations, working capital requirements and capital
projects, including additional investments and expansion, development and acquisition opportunities. We expect to fund
any additional investments, capital projects and future expansion, development and acquisition opportunities with cash
flows from operations and additional borrowings under our revolving credit facility.
Net cash provided by (used in) operating activities, investing activities and financing activities were as follows (in
thousands):
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Year ended Year ended Year ended
December 31, December 31, December 31,
2018
2019
2020
$ 130,041
$ 103,210
$ 100,589
$ (79,994) $ (90,967) $ (56,869)
(9,558) $ (46,284)
$ (50,542) $
The increase in net cash provided by operating activities for the year ended December 31, 2020 is primarily
related to increased revenue from recontracting activity, placing into service new tank capacity at our Brownsville and West
Coast terminals and the timing of working capital requirements.
The decrease in net cash provided by operating activities for the year ended December 31, 2019 is primarily
related to the timing of working capital requirements.
The decrease in net cash used in investing activities for the year ended December 31, 2020 is primarily related to
less construction spend in 2020. The increase in net cash used in investing activities for the year ended December 31,
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2019 is primarily related to increased construction spend in 2019. In addition, in 2019 we received an approximately $5.0
million one-time insurance settlement related to a tank at our Gulf Coast terminals that was damaged by fire.
Additional investments and expansion capital projects at our terminals have been approved and currently are, or
will be, under construction with estimated completion dates throughout 2021. At December 31, 2020, the remaining
expenditures to complete the approved projects are estimated to be approximately $40 million. These expenditures
primarily relate to the construction costs associated with our expansion of the Brownsville operations.
The increase in net cash used in financing activities for the year ended December 31, 2020 includes a decrease of
approximately $45.0 million in net borrowings under our revolving credit facility primarily due to increased cash flows
from operations and less spend on growth capital projects in 2020. The decrease in net cash used in financing activities for
the year ended December 31, 2019 includes an increase of approximately $31.9 million in net borrowings under our
revolving credit facility primarily to fund additional growth capital projects and $7.9 million in debt issuance costs related
to issuing senior notes in February 2018.
Third amended and restated senior secured credit facility. Our revolving credit facility provides for a maximum
borrowing line of credit of up to $850 million. At our request, the maximum borrowing line of credit may be increased by
an additional $250 million, subject to the approval of the administrative agent and the receipt of additional commitments
from one or more lenders. The terms of our revolving credit facility include covenants that restrict our ability to make cash
distributions, acquisitions and investments, including investments in joint ventures. We may make distributions of cash to
the extent of our “available cash” as defined in our LLC agreement. We may make acquisitions and investments that meet
the definition of “permitted acquisitions”; “other investments” which may not exceed 5% of “consolidated net tangible
assets”; and additional future “permitted JV investments” up to $175 million, which may include additional investments in
BOSTCO. The principal balance of loans and any accrued and unpaid interest are due and payable in full on the maturity
date, March 13, 2022.
We may elect to have loans under our revolving credit facility bear interest either (i) at a rate of LIBOR plus a
margin ranging from 1.75% to 2.75% depending on the total leverage ratio then in effect, or (ii) at the base rate plus a
margin ranging from 0.75% to 1.75% depending on the total leverage ratio then in effect. We also pay a commitment fee on
the unused amount of commitments, ranging from 0.375% to 0.5% per annum, depending on the total leverage ratio then in
effect. Our obligations under our revolving credit facility are secured by a first priority security interest in favor of the
lenders in the majority of our assets, including our investments in unconsolidated affiliates. At December 31, 2020, our
outstanding borrowings under our revolving credit facility were $350.4 million.
Our revolving credit facility also contains customary representations and warranties (including those relating to
organization and authorization, compliance with laws, absence of defaults, material agreements and litigation) and
customary events of default (including those relating to monetary defaults, covenant defaults, cross defaults, changes in our
control, and bankruptcy events). The primary financial covenants contained in our revolving credit facility are (i) a total
leverage ratio test (not to exceed 5.25 to 1.0), (ii) a senior secured leverage ratio test (not to exceed 3.75 to 1.0), and (iii) a
minimum interest coverage ratio test (not less than 2.75 to 1.0). These financial covenants are based on a non-GAAP,
defined financial performance measure within our revolving credit facility known as “Consolidated EBITDA.” We were in
compliance with all financial covenants as of December 31, 2020.
If we were to fail a financial performance covenant, or any other covenant contained in our revolving credit
facility, we would seek a waiver from our lenders under such facility. If we were unable to obtain a waiver from our lenders
and the default remained uncured after any applicable grace period, we would be in breach of our revolving credit facility,
and the lenders would be entitled to declare all outstanding borrowings immediately due and payable.
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Table of Contents
Three months ended
March 31, June 30,
September 30, December 31,
2020
2020
2020
2020
Twelve months ended
December 31,
2020
Financial performance covenant tests:
Consolidated EBITDA (1)
$ 35,659
$ 40,275
Consolidated interest expense (1) (2)
$ 8,942
$ 7,956
$
$
41,340
$ 41,976
7,435
$
7,341
Revolving credit facility debt
6.125% senior notes due in 2026
Consolidated funded indebtedness
Senior secured leverage ratio
Total leverage ratio
Interest coverage ratio
Reconciliation of consolidated EBITDA to cash flows provided by operating activities:
Consolidated EBITDA for the total leverage ratio
(1)
Interest expense
Unrealized (gain) loss on derivative instruments
Amortization of deferred revenue
Change in operating assets and liabilities
Cash flows provided by operating activities
$ 40,275
(7,204)
(752)
1,228
7,497
$ 41,044
$ 35,659
(9,214)
272
(33)
(7,872)
$ 18,812
41,340
(7,435)
—
239
741
34,885
$
$
$ 41,976
(7,341)
—
(391)
1,056
$ 35,300
$
$
$
$
$
$
159,250
31,674
350,400
299,900
650,300
2.20
4.08
5.03
159,250
(31,194)
(480)
1,043
1,422
130,041
(1) Reflects the calculation of Consolidated EBITDA and Consolidated interest expense in accordance with the definition
for such financial metrics in our revolving credit facility.
(2) Consolidated interest expense, used in the calculation of the interest coverage ratio, excludes unrealized gains and
losses recognized on our derivative instruments.
Termination of shelf registration. On September 2, 2016, the SEC declared effective a universal shelf registration
statement, which replaced our prior shelf registration statement that previously expired. Prior to the Take-Private
Transaction, the shelf registration statement allowed us to issue common units and debt securities. In February 2018, we
used the shelf registration statement to issue senior notes. In connection with the Take-Private Transaction, the Company
prepared and filed a post-effective amendment to its Form S-3 registration statement in effect to deregister all securities of
the Partnership unissued but issuable thereunder. The senior notes remain outstanding and the Company is voluntarily
filing with the Security and Exchange Commission pursuant to the covenants contained in the senior notes. The senior
notes contain customary covenants (including those relating to our voluntary filing of this report and certain restrictions
and obligations with respect to types of payments we may make, indebtedness we may incur, transactions we may pursue,
or changes in our control) and customary events of default (including those relating to monetary defaults, covenant
defaults, cross defaults and bankruptcy events).
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Contractual obligations and contingencies. We have contractual obligations that are required to be settled in
cash. The amounts of our contractual obligations at December 31, 2020 are as follows (in thousands):
2021
2022
2023
2024
2025
Thereafter
Years ending December 31,
Additions to property, plant and equipment under
contract
Operating leases—property and equipment
Revolving credit facility
Interest expense on revolving credit facility (1)
6.125% senior notes due in 2026
Interest expense on 6.125% senior notes due in 2026
(2)
Total contractual obligations to be settled in cash
$
— $
— $
— $
$ 25,965
4,758
4,749
— 350,400
2,362
11,808
—
—
4,151
3,699
—
—
—
—
—
—
3,286
— $
—
15,059
—
—
—
—
— 299,900
18,369
$ 60,900
18,369
$ 375,880
18,369
$ 22,520
18,369
$ 22,068
18,369
$ 21,655
2,194
$ 317,153
(1) Assumes that our outstanding revolving credit facility debt at December 31, 2020 remains outstanding until its
maturity date and we incur interest expense at the weighted average interest rate on our borrowings outstanding for the
three months ended December 31, 2020, which is 3.37% per year.
(2) Assumes that senior notes at December 31, 2020 remain outstanding until their maturity date and we incur interest
expense at the coupon rate of 6.125%.
We believe that our future cash expected to be provided by operating activities, available borrowing capacity
under our revolving credit facility, and our relationship with institutional lenders should enable us to meet our committed
capital and our essential liquidity requirements for the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or
change on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material. The term “off-balance sheet arrangement” generally means any transaction, agreement or other
contractual arrangement to which an entity unconsolidated with us is a party, under which we have (i) any obligation
arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in
assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Market risk is the risk of loss arising from adverse changes in market rates and prices. A principal market risk to
which we are exposed is interest rate risk associated with borrowings under our revolving credit facility. Borrowings under
our revolving credit facility bear interest at a variable rate based on LIBOR or the lender’s base rate. We manage a portion
of our interest rate risk with interest rate swaps, which reduce our exposure to changes in interest rates by converting
variable interest rates to fixed interest rates. At December 31, 2020 and 2019, our derivative instruments were limited to
interest rate swap agreements with an aggregate notional amount of $nil and $300 million, respectively. The interest rate
swap agreements expired in June 2020. Pursuant to the terms of the interest rate swap agreements, we paid a blended fixed
rate of approximately 2.04% and received interest payments based on the one-month LIBOR. The net difference to be paid
or received under the interest rate swap agreements was settled monthly and was recognized as an adjustment to interest
expense. The fair value of our interest rate swap agreements was determined using a pricing model based on the LIBOR
swap rate and other observable market data. At December 31, 2020, we had outstanding borrowings of $350.4 million
under our revolving credit facility. Based on the outstanding balance of our variable-interest-rate debt at December 31,
2020, assuming market interest rates increase or decrease by 100 basis points, the potential annual increase or decrease in
interest expense is approximately $3.5 million.
We do not purchase or market products that we handle or transport and, therefore, we do not have material direct
exposure to changes in commodity prices, except for the value of product gains arising from certain of our
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terminaling services agreements with our customers. We do not use derivative commodity instruments to manage the
commodity risk associated with the product we may own at any given time. Generally, to the extent we are entitled to retain
product pursuant to terminaling services agreements with our customers, we sell the product to our customers on a
contractually established periodic basis; the sales price is based on industry indices.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements should be read in conjunction with “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report.
TransMontaigne Partners LLC and Subsidiaries:
Report of Independent Registered Public Accounting Firm
Consolidated balance sheets as of December 31, 2020 and 2019
Consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018
Consolidated statements of equity for the years ended December 31, 2020, 2019 and 2018
Consolidated statements of cash flows for the years ended December 31, 2020, 2019 and 2018
Notes to consolidated financial statements
49
50
51
52
53
54
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Management of TransMontaigne Partners LLC
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of TransMontaigne Partners LLC (formerly
TransMontaigne Partners L.P.) and subsidiaries (the "Company") as of December 31, 2020 and 2019, the related
consolidated statements of income, partners' equity, and cash flows, for each of the three years in the period ended
December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the
financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020
and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31,
2020, in conformity with accounting principles generally accepted in the United States of America.
Change in Accounting Principle
As discussed in point (C) “Accounting for terminal and pipeline operations” in note 1 “summary of significant accounting
policies” to the financial statements, the Company changed its method of accounting for leases effective January 1, 2019
due to the adoption of Accounting Standards Codification (ASC) Topic 842 – Leases. The Company used the modified
retrospective transition method upon adoption, which had a material impact on the financial statements.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards
generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or
fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but
not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of
the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Emphasis of Matter
As discussed in Note 1 to the financial statements, effective June 1, 2019, TLP Management Services LLC (“TMS”) was
contributed to the Company and recorded at carryover basis as a reorganization of entities under common control. As such,
all prior periods presented include the assets, liabilities, and results of operations of TMS.
Critical Audit Matters
Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the
financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that
there are no critical audit matters.
/s/ Deloitte & Touche LLP
Denver, Colorado
March 5, 2021
We have served as the Company's auditor since 2012
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TransMontaigne Partners LLC and subsidiaries
Consolidated balance sheets
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents
Trade accounts receivable, net
Due from affiliates
Other current assets
Total current assets
Property, plant and equipment, net
Goodwill
Investments in unconsolidated affiliates
Right-of-use assets, operating leases
Other assets, net
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable
Operating lease liabilities
Accrued liabilities
Total current liabilities
Other liabilities
Long-term operating lease liabilities
Long-term debt
Total liabilities
Commitments and contingencies (Note 13)
Equity:
Member interest
Total equity
December 31, December 31,
2020
2019
$
595
9,203
2,986
5,623
18,407
737,501
9,428
225,948
33,880
44,042
$ 1,069,206
$
1,090
16,500
2,882
6,346
26,818
727,220
9,428
225,425
35,765
47,397
$ 1,072,053
$
`
14,000
3,284
34,732
52,016
4,820
32,418
644,659
733,913
$
24,650
3,001
36,558
64,209
4,990
34,605
644,162
747,966
335,293
335,293
$ 1,069,206
324,087
324,087
$ 1,072,053
See accompanying notes to consolidated financial statements.
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TransMontaigne Partners LLC and subsidiaries
Consolidated statements of operations
(in thousands)
Year ended
Year ended
December 31, December 31, December 31,
2019
Year ended
2018
2020
Revenue:
External customers
Affiliates
Total revenue
Costs and expenses:
Operating
General and administrative expenses
Insurance expenses
Deferred compensation expense
Depreciation and amortization
Total costs and expenses
Earnings from unconsolidated affiliates
Gain from insurance proceeds
Loss on disposition of assets
Operating income
Other expenses:
Interest expense
Amortization of deferred debt issuance costs
Total other expenses
Net earnings
$ 248,287
28,806
277,093
$ 234,275
28,767
263,042
$ 211,303
20,994
232,297
(102,611)
(21,657)
(4,973)
(1,834)
(57,400)
(188,475)
6,498
—
—
95,116
(103,022)
(23,660)
(4,995)
(2,308)
(52,535)
(186,520)
4,894
3,351
—
84,767
(98,977)
(23,707)
(4,976)
(3,478)
(49,793)
(180,931)
8,852
—
(901)
59,317
(31,194)
(2,574)
(33,768)
$ 61,348
(36,196)
(2,657)
(38,853)
$ 45,914
(31,900)
(3,037)
(34,937)
$ 24,380
See accompanying notes to consolidated financial statements.
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TransMontaigne Partners LLC and subsidiaries
Consolidated statements of equity
(dollars in thousands)
Balance December 31, 2017
Distributions to unitholders
Equity-based compensation
Issuance of 6,972 common units pursuant to our long-term incentive
plan
Issuance of 44,798 common units pursuant to our savings and
retention program
Settlement of tax withholdings on equity-based compensation
Contribution of cash by TransMontaigne GP to maintain its 2%
general partner interest
Contribution from TLP Holdings
Net earnings for year ended December 31, 2018
Balance December 31, 2018
Distributions to unitholders
Purchase of common units and conversion to member interest
Reclassification of outstanding equity-based compensation to
liability
Contribution from TLP Holdings
Equity-based compensation
Distributions to TLP Finance
Net earnings for year ended December 31, 2019
Balance December 31, 2019
Contribution from TLP Holdings
Distributions to TLP Finance
Net earnings for year ended December 31, 2020
Balance December 31, 2020
General
partner
interest
$ 53,447
(15,672)
$
Common
units
$ 308,493
(51,152)
3,208
Member
interest
Total
— $ 361,940
(66,824)
—
3,208
—
—
—
—
270
—
(658)
—
—
—
—
270
—
(658)
—
16,230
8,704
285,095
(13,064)
(279,895)
39
—
15,676
53,490
(4,186)
(51,978)
39
—
16,230
—
—
24,380
— 338,585
(17,250)
—
—
331,873
—
4,829
45
—
2,990
—
—
—
—
— $
$
2,674
(6,199)
491
—
—
—
—
— (42,328)
40,250
— 324,087
—
313
— (50,455)
—
61,348
— $ 335,293
(6,199)
5,320
45
(42,328)
45,914
324,087
313
(50,455)
61,348
$ 335,293
See accompanying notes to consolidated financial statements.
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TransMontaigne Partners LLC and subsidiaries
Consolidated statements of cash flows
(in thousands)
Year ended
Year ended
December 31, December 31, December 31,
2019
Year ended
2020
2018
Cash flows from operating activities:
Net earnings
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
Loss on disposition of assets
Earnings from unconsolidated affiliates
Distributions from unconsolidated affiliates
Equity-based compensation
Amortization of deferred debt issuance costs
Amortization of deferred revenue
Unrealized (gain) loss on derivative instruments
Gain from insurance proceeds
Changes in operating assets and liabilities:
Trade accounts receivable, net
Due from affiliates
Other current assets
Amounts due under long-term terminaling services agreements, net
Right-of-use assets, operating leases
Deposits
Other assets, net
Trade accounts payable
Accrued liabilities
Operating lease liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Investments in unconsolidated affiliates
Return of investment in unconsolidated affiliates
Capital expenditures
Proceeds from sale of assets
Proceeds from insurance claims
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from senior notes
Borrowings under revolving credit facility
Repayments under revolving credit facility
Senior notes repurchase
Debt issuance costs
Taxes paid for equity compensation awards
Distributions paid to unitholders
Distributions to TLP Finance
Contributions from TLP Holdings
Net cash used in financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Supplemental disclosures of cash flow information:
Cash paid for interest
Property, plant and equipment acquired with accounts payable
$
61,348
$
45,914
$
24,380
57,400
—
(6,498)
13,232
—
2,574
1,043
(480)
—
7,297
(104)
723
(2,345)
2,816
—
436
(3,226)
(1,340)
(2,835)
130,041
(7,257)
—
(72,737)
—
—
(79,994)
—
99,400
(99,700)
(100)
—
—
—
(50,455)
313
(50,542)
(495)
1,090
595
31,821
9,463
52,535
—
(4,894)
11,432
45
2,657
(714)
623
(3,351)
(2,451)
(819)
(152)
1,268
2,235
10
1,257
(880)
(2,068)
(2,058)
100,589
(4,932)
—
(91,023)
—
4,988
(90,967)
—
174,900
(130,200)
—
—
—
(17,250)
(42,328)
5,320
(9,558)
64
1,026
1,090
35,667
16,869
$
$
$
$
$
$
49,793
901
(8,852)
15,565
3,478
3,037
(324)
433
—
(3,696)
690
3,116
1,160
—
(456)
—
3,092
10,893
—
103,210
(1,413)
850
(66,331)
10,025
—
(56,869)
300,000
166,400
(453,600)
—
(7,871)
(658)
(66,824)
—
16,269
(46,284)
57
969
1,026
24,635
19,353
$
$
$
See accompanying notes to consolidated financial statements.
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TransMontaigne Partners LLC and subsidiaries
Notes to Consolidated Financial Statements
Years ended December 31, 2020, 2019 and 2018
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Nature of business
TransMontaigne Partners LLC (“we,” “us,” “our,” “the Company”) provides integrated terminaling, storage,
transportation and related services for companies engaged in the trading, distribution and marketing of light refined
petroleum products, heavy refined petroleum products, renewables products, crude oil, chemicals, fertilizers and other
liquid products. We conduct our operations in the United States along the Gulf Coast, in the Midwest, in Houston and
Brownsville, Texas, along the Mississippi and Ohio rivers, in the Southeast and along the West Coast.
We were originally formed as TransMontaigne Partners L.P. (“the Partnership”) in February 2005 as a Delaware
limited partnership. Through February 26, 2019, the Partnership’s common units were listed and publicly traded on the
New York Stock Exchange under the symbol “TLP”. The Partnership was controlled by a general partner, TransMontaigne
GP L.L.C. (“TransMontaigne GP”), which was an indirect, controlled subsidiary of ArcLight Energy Partners Fund VI,
L.P. (“ArcLight”). TransMontaigne GP also held the Partnership’s incentive distribution rights, which were non-voting
limited partner interests with the rights set forth in the First Amended and Restated Agreement of Limited Partnership of
the Partnership, dated as of May 27, 2005, as amended from time to time.
On February 26, 2019, an affiliate of ArcLight completed its previously announced acquisition of all of the
Partnership’s outstanding publicly traded common units not already held by ArcLight and its affiliates by way of our
merger (the “Merger”) with a wholly owned subsidiary of TLP Finance Holdings, LLC (“TLP Finance”), an indirect
controlled subsidiary of Arclight. At the effective time of the Merger, each of the Partnership’s general partner units issued
and outstanding immediately prior to the acquisition effective time was converted into (i)(a) one Partnership common unit,
and (b) in aggregate, a non-economic general partner interest in the Partnership, (ii) each of the Partnership’s incentive
distribution rights issued and outstanding immediately prior to the acquisition effective time was converted into 100
Partnership common units, (iii) our general partner distributed its common units in the Partnership (the “Transferred GP
Units”) to TLP Acquisition Holdings, LLC, a Delaware limited liability company (“TLP Holdings”), and TLP Holdings
contributed the Transferred GP Units to TLP Finance, (iv) the Partnership converted into the Company (a Delaware limited
liability company) pursuant to Section 17-219 of the Delaware Limited Partnership Act and changed its name to
“TransMontaigne Partners LLC”, and all of our common units owned by TLP Finance were converted into limited liability
company interests (“member interest”), (v) the non-economic interest in the Company owned by our general partner was
automatically cancelled and ceased to exist and our general partner merged with and into the Company with the Company
surviving, and (vi) the Company became 100% owned by TLP Finance (the transactions described in the foregoing clauses
(i) through (vi), collectively with the Merger, the “Take-Private Transaction”).
As a result of the Take-Private Transaction, our common units ceased to be publicly traded, and our common units
are no longer listed on the New York Stock Exchange. Our 6.125% senior unsecured notes due in 2026 remain outstanding,
and we are voluntarily filing with the Securities and Exchange Commission pursuant to the covenants contained in those
notes.
Effective June 1, 2019, TLP Finance contributed all of the issued and outstanding equity of its wholly-owned
subsidiary, TLP Management Services LLC (“TMS” and such interest, the “TMS Interest”) to the Company, and the
Company immediately contributed the TMS Interest to its 100% owned operating company subsidiary TransMontaigne
Operating Company L.P. (the “TMS Contribution”). Prior to the TMS Contribution, we had no employees and all of our
management and operational activities were provided by TMS. Further, TMS provided all payroll programs and maintained
all employee benefits programs on behalf of our company with respect to applicable TMS employees (as well as on behalf
of certain other Arclight affiliates). As a result of the TMS Contribution, we have assumed the employees and operational
activities previously provided by TMS, except for our executive officers as further described below. The TMS Contribution
has been recorded at carryover basis as a reorganization of entities under common control. As such, prior periods include
the assets, liabilities, and results of operations of TMS for all periods presented.
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
As a result of the TMS Contribution, the omnibus agreement in place in various forms since the inception of the
Partnership, and immediately prior to the TMS Contribution between TMS and us, which, among other things, governed
the provision of management and operational services provided for us by TMS, is no longer relevant and was terminated.
Following the TMS Contribution, the executive officers who provide services to the Company are employed by
TransMontaigne Management Company, LLC (“TMC”), a wholly owned subsidiary of ArcLight, which also provides
services to certain other ArcLight affiliates. As a result, we do not directly employ any of the persons responsible for the
executive management of our business. Nonetheless, TMS continues to provide certain payroll functions and maintains all
employee benefits programs on behalf of TMC pursuant to a services agreement between TMC and TMS.
(b) Basis of presentation and use of estimates
Our accounting and financial reporting policies conform to accounting principles generally accepted in the United
States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of
TransMontaigne Partners LLC and its controlled subsidiaries. Investments where we do not have the ability to exercise
control, but do have the ability to exercise significant influence, are accounted for using the equity method of accounting.
All inter-company accounts and transactions have been eliminated in the preparation of the accompanying consolidated
financial statements. The accompanying consolidated financial statements include all adjustments (consisting of normal
and recurring accruals) considered necessary to present fairly our financial position as of December 31, 2020 and 2019 and
our results of operations for the years ended December 31, 2020, 2019 and 2018.
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenue and expenses during the reporting periods. The following
estimates, in management’s opinion, are subjective in nature, require the exercise of judgment, and/or involve complex
analyses: useful lives of our plant and equipment and accrued environmental obligations. Changes in these estimates and
assumptions will occur as a result of the passage of time and the occurrence of future events. Actual results could differ
from these estimates.
(c) Accounting for terminal and pipeline operations
Effective January 1, 2019, we adopted Accounting Standards Codification (“ASC”) Topic 842, Leases and the
series of related Accounting Standards Updates that followed (collectively referred to as “ASC 842”). The most significant
changes under the new guidance include clarification of the definition of a lease, and the requirements for lessees to
recognize a right-of-use asset and a lease liability for all qualifying leases in the consolidated balance sheet. Further, under
ASC 842, additional disclosures are required to meet the objective of enabling users of financial statements to assess the
amount, timing and uncertainty of cash flows arising from leases. We used the modified retrospective transition method
applied at the effective date of the standard. By electing this optional transition method, information prior to January 1,
2019 has not been restated and continues to be reported under the accounting standards in effect for the period (“ASC
840”) (See Note 13 of Notes to consolidated financial statements).
Effective January 1, 2018, we adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from
Contracts with Customers (“ASC 606”), applying the modified retrospective transition method, which required us to apply
the new standard to (i) all new revenue contracts entered into after January 1, 2018, and (ii) revenue contracts which were
not completed as of January 1, 2018. ASC 606 replaces existing revenue recognition requirements in GAAP and requires
entities to recognize revenue at an amount that reflects the consideration to which we expect to be entitled in exchange for
transferring goods or services to a customer. ASC 606 also requires certain disclosures regarding qualitative and
quantitative information regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from
contracts with customers. The adoption of ASC 606 did not result in a transition adjustment nor did it have an impact on
the timing or amount of our revenue recognition (See Note 15 of Notes to consolidated financial statements).
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
The adoption of ASC 606 did not result in changes to our accounting for trade accounts receivable (see Note 3 of
Notes to consolidated financial statements), contract assets or contract liabilities. We recognize contract assets in situations
where revenue recognition under ASC 606 occurs prior to billing the customer based on our rights under the contract.
Contract assets are transferred to accounts receivable when the rights become unconditional. At December 31, 2020, we
did not have any contract assets related to ASC 606.
Contract liabilities primarily relate to consideration received from customers in advance of completing the
performance obligation. A performance obligation is a promise in a contract to transfer goods or services to the customer.
We recognize contract liabilities under these arrangements as revenue once all contingencies or potential performance
obligations have been satisfied by the (i) performance of services or (ii) expiration of the customer’s rights under the
contract. Short-term contract liabilities include customer advances and deposits (see Note 9 of Notes to consolidated
financial statements). Long-term contract liabilities include deferred revenue (See Note 10 of Notes to consolidated
financial statements).
We generate revenue from terminaling services fees, pipeline transportation fees and management fees. Under
ASC 606 and ASC 842, we recognize revenue over time or at a point in time, depending on the nature of the performance
obligations contained in the respective contract with our customer. The contract transaction price is allocated to each
performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our
revenue is recognized pursuant to ASC 842. The following is an overview of our significant revenue streams, including a
description of the respective performance obligations and related method of revenue recognition.
Terminaling services fees. Our terminaling services agreements are structured as either throughput agreements or
storage agreements. Our throughput agreements contain provisions that require our customers to make minimum payments,
which are based on contractually established minimum volumes of throughput of the customer’s product at our facilities,
over a stipulated period of time. Due to this minimum payment arrangement, we recognize a fixed amount of revenue from
the customer over a certain period of time, even if the customer throughputs less than the minimum volume of product
during that period. In addition, if a customer throughputs a volume of product exceeding the minimum volume, we would
recognize additional revenue on this incremental volume. Our storage agreements require our customers to make minimum
payments based on the volume of storage capacity available to the customer under the agreement, which results in a fixed
amount of recognized revenue. We refer to the fixed amount of revenue recognized pursuant to our terminaling services
agreements as being “firm commitments.”
Our terminaling services agreements include revenue recognized in accordance with ASC 606 and ASC 842.
Upon adoption of these standards, we evaluated our contracts to determine whether the contract contained a lease.
Significant assumptions used in this process include the determination of whether substantive substitution rights exist
based on the terms of the contract and available capacity at the terminal at the time of contract inception. Our terminaling
services agreements do not allow our customers to purchase the underlying asset and vary in terms and conditions with
respect to extension or termination options. If a contract is accounted for as a lease under ASC 842, we recognize the
minimum payments as lease revenue and revenue recognized in excess of firm commitments as a variable payment of the
lease. All other components of the contracts accounted for as a lease are treated as non-lease components (ancillary
revenue) and are accounted for in accordance with ASC 606. The majority of our firm commitments under our terminaling
services agreements are accounted for as lease revenue in accordance with ASC 842 (“ASC 842 revenue”). The remaining
firm commitments under our terminaling services agreements not accounted for as lease revenue are accounted for in
accordance with ASC 606 (“ASC 606 revenue”), where the minimum payment arrangement in each contract is considered
a single performance obligation that is primarily satisfied over time through the contract term.
Revenue recognized in excess of firm commitments and revenue recognized based solely on the volume of
product distributed or injected are referred to as ancillary. The ancillary revenue associated with terminaling services
include volumes of product throughput that exceed the contractually established minimum volumes, injection fees based on
the volume of product injected with additive compounds, heating and mixing of stored products, product transfer, railcar
handling, butane blending, proceeds from the sale of product gains, wharfage and vapor recovery. The revenue
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
generated by these services is required to be estimated under ASC 606 for any uncertainty that is not resolved in the period
of the service. We account for the majority of ancillary revenue at individual points in time when the services are delivered
to the customer. The majority of our ancillary revenue is recognized in accordance with ASC 606 (See Note 15 of Notes to
consolidated financial statements).
Pipeline transportation fees. We earn pipeline transportation fees at our Diamondback pipeline either based on
the volume of product transported or under capacity reservation agreements. Revenue associated with the capacity
reservation is recognized ratably over the respective term, regardless of whether the capacity is actually utilized. We earn
pipeline transportation fees at our Razorback pipeline based on an allocation of the aggregate fees charged under the
capacity agreement with our customer who has contracted for 100% of our Razorback system. Pipeline transportation
revenue is primarily accounted for in accordance with ASC 842.
Management fees. We manage and operate certain tank capacity at our Port Everglades South terminal for a major
oil company and receive a reimbursement of its proportionate share of operating and maintenance costs. We manage and
operate the Frontera joint venture and receive a management fee based on our costs incurred. We lease land under
operating leases as the lessor or sublessor with third parties and affiliates. We also managed and operated for an affiliate of
PEMEX, Mexico’s state-owned petroleum company, a products pipeline connected to our Brownsville terminal facility and
received a management fee through August 23, 2018. We manage and operate rail sites at certain Southeast terminals on
behalf of a major oil company and receive reimbursement for operating and maintenance costs. We manage and operate
terminals that are owned by affiliates of ArcLight, including for SeaPort Midstream Partners, LLC in Seattle, Washington
and Portland, Oregon and another terminal for SeaPort Sound Terminal, LLC (“SeaPort Sound”) in Tacoma, Washington
and receive a management fee based on our costs incurred. We also manage additional terminal facilities that are owned by
affiliates of ArcLight, including Lucknow-Highspire Terminals, LLC, which operates terminals throughout Pennsylvania
encompassing approximately 9.9 million barrels of storage capacity, and prior to July 1, 2019, a terminal in Baltimore,
Maryland for Pike Baltimore Terminals, LLC (the “Baltimore Terminal”), and receive a management fee based on our
costs incurred. Our management of the Baltimore Terminal ended on July 1, 2019.
Management fee revenue is recognized at individual points in time as the services are performed or as the costs
are incurred and is primarily accounted for in accordance with ASC 606. Management fees related to lease revenue are
accounted for in accordance with ASC 842.
(d) Cash and cash equivalents
We consider all short-term investments with a remaining maturity of three months or less at the date of purchase
to be cash equivalents.
(e) Property, plant and equipment
Depreciation is computed using the straight-line method. Estimated useful lives are 15 to 25 years for terminals
and pipelines and 3 to 25 years for furniture, fixtures and equipment. All items of property, plant and equipment are carried
at cost. Expenditures that increase capacity or extend useful lives are capitalized. Repairs and maintenance are expensed as
incurred.
We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the
carrying value of an asset group may not be recoverable based on expected undiscounted future cash flows attributable to
that asset group. If an asset group is impaired, the impairment loss to be recognized is the excess of the carrying amount of
the asset group over its estimated fair value. We did not recognize any impairment charges during the years ended
December 31, 2020, 2019 and 2018, respectively.
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
(f) Investments in unconsolidated affiliates
We account for our investments in unconsolidated affiliates, which we do not control but do have the ability to
exercise significant influence over, using the equity method of accounting. Under this method, the investment is recorded at
acquisition cost, increased by our proportionate share of any earnings and additional capital contributions and decreased by
our proportionate share of any losses, distributions received and amortization of any excess investment. Excess investment
is the amount by which our total investment exceeds our proportionate share of the book value of the net assets of the
investment entity. We evaluate our investments in unconsolidated affiliates for impairment whenever events or
circumstances indicate there is a loss in value of the investment that is other than temporary. In the event of impairment, we
would record a charge to earnings to adjust the carrying amount to estimated fair value. We did not recognize any
impairment charges during the years ended December 31, 2020, 2019 and 2018, respectively.
(g) Environmental obligations
We accrue for environmental costs that relate to existing conditions caused by past operations when probable and
reasonably estimable (see Note 9 of Notes to consolidated financial statements). Environmental costs include initial site
surveys and environmental studies of potentially contaminated sites, costs for remediation and restoration of sites
determined to be contaminated and ongoing monitoring costs, as well as fines, damages and other costs, including direct
legal costs. Liabilities for environmental costs at a specific site are initially recorded, on an undiscounted basis, when it is
probable that we will be liable for such costs, and a reasonable estimate of the associated costs can be made based on
available information. Such an estimate includes our share of the liability for each specific site and the sharing of the
amounts related to each site that will not be paid by other potentially responsible parties, based on enacted laws and
adopted regulations and policies. Adjustments to initial estimates are recorded, from time to time, to reflect changing
circumstances and estimates based upon additional information developed in subsequent periods. Estimates of our ultimate
liabilities associated with environmental costs are difficult to make with certainty due to the number of variables involved,
including the early stage of investigation at certain sites, the lengthy time frames required to complete remediation,
technology changes, alternatives available and the evolving nature of environmental laws and regulations. We periodically
file claims for insurance recoveries of certain environmental remediation costs with our insurance carriers under our
comprehensive liability policies (see Note 4 of Notes to consolidated financial statements).
In connection with our acquisition of the Florida (other than Pensacola), Midwest, Brownsville, Texas, River,
Southeast, and Pensacola, Florida terminal and facilities, a third party agreed to indemnify us against certain potential
environmental claims, losses and expenses. Based on our current knowledge, we expect that the active remediation projects
subject to the benefit of this indemnification obligation are winding down and will not involve material additional claims,
losses, and expenses. Nonetheless, the forgoing environmental indemnification obligations of a third party to us remain in
place and were not affected by the Take-Private Transaction.
(h) Asset retirement obligations
Asset retirement obligations are legal obligations associated with the retirement of long-lived assets that result
from the acquisition, construction, development or normal use of the asset. GAAP requires that the fair value of a liability
related to the retirement of long-lived assets be recorded at the time a legal obligation is incurred. Once an asset retirement
obligation is identified and a liability is recorded, a corresponding asset is recorded, which is depreciated over the
remaining useful life of the asset. After the initial measurement, the liability is adjusted to reflect changes in the asset
retirement obligation. If and when it is determined that a legal obligation has been incurred, the fair value of any liability is
determined based on estimates and assumptions related to retirement costs, future inflation rates and interest rates. Our
long-lived assets consist of above-ground storage facilities and underground pipelines. We are unable to predict if and
when these long-lived assets will become completely obsolete and require dismantlement. We have not recorded an asset
retirement obligation, or corresponding asset, because the future dismantlement and removal dates of our long-lived assets
is indeterminable and the amount of any associated costs are believed to be insignificant. Changes in our assumptions and
estimates may occur as a result of the passage of time and the occurrence of future events.
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
(i) Deferred compensation expense
We have a savings and retention plan to compensate certain employees who provide services to the Company.
Prior to the Take-Private Transaction, we had the ability to settle the awards in our common units, and accordingly, we
accounted for the awards as an equity award. Following the Take-Private Transaction, we index the awards to other forms
of investments, and have the intent and ability to settle the awards in cash, and accordingly, we account for the awards as
liability awards (see Note 12 of Notes to consolidated financial statements).
(j) Accounting for derivative instruments
Generally accepted accounting principles require us to recognize all derivative instruments at fair value in the
consolidated balance sheets as assets or liabilities. Changes in the fair value of our derivative instruments are recognized in
the consolidated statement of operations.
At December 31, 2020 and 2019, our derivative instruments were limited to interest rate swap agreements with an
aggregate notional amount of $nil and $300 million, respectively. The interest rate swap agreements expired in June 2020.
Pursuant to the terms of the interest rate swap agreements, we paid a blended fixed rate of approximately 2.04% and
received interest payments based on the one-month LIBOR. The net difference to be paid or received under the interest rate
swap agreements was settled monthly and was recognized as an adjustment to interest expense. The fair value of our
interest rate swap agreements was determined using a pricing model based on the LIBOR swap rate and other observable
market data.
(k) Income taxes
No provision for U.S. federal income taxes has been reflected in the accompanying consolidated financial
statements because we are treated as a partnership for federal income tax purposes. As a partnership, all income, gains,
losses, expenses, deductions and tax credits generated by us flow up to our owners.
(l) Comprehensive income
Entities that report items of other comprehensive income have the option to present the components of net
earnings and comprehensive income in either one continuous financial statement, or two consecutive financial statements.
As we have no components of comprehensive income other than net earnings, no statement of comprehensive income has
been presented.
(m) Recent accounting pronouncements
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform—Facilitation of the Effects of
Reference Rate Reform on Financial Reporting. This ASU provides temporary optional expedients and exceptions to
GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected
market transition from LIBOR and other interbank offered rates to alternative reference rates, such as the Secured
Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts
affected by this reference rate reform, if certain criteria are met. An entity that makes this election would not have to re-
measure the contracts at the modification date or reassess a previous accounting determination. Entities can also elect
various optional expedients that would allow them to continue applying hedge accounting for hedging relationships
affected by reference rate reform, if certain criteria are met. The guidance is effective upon issuance and generally can be
applied through December 31, 2022. We are currently reviewing the effect of this ASU on our financial statements.
In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted
Transition Relief, which provides transition relief and allows entities to elect the fair value option on certain financial
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
instruments. ASU 2019-05 is effective for annual reporting periods beginning after December 15, 2019, including interim
periods within that reporting period. We adopted the new guidance as of January 1, 2020 using the modified retrospective
approach related to our accounts receivable and contract assets, resulting in no cumulative adjustment to equity. The
adoption of this guidance did not have an impact on our financial position, results of operations and cash flows.
In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other: Simplifying the Test for
Goodwill Impairment, to simplify the accounting for goodwill impairment by eliminating step 2 from the goodwill
impairment test. ASU 2017-04 is effective for annual reporting periods beginning after December 15, 2019, including
interim periods within that reporting period. We adopted the new guidance as of January 1, 2020. The adoption of this
guidance did not have an impact on our financial position, results of operations and cash flows.
(2) TRANSACTIONS WITH AFFILIATES
Operations and reimbursement agreement—Frontera. We have a 50% ownership interest in the Frontera
Brownsville LLC joint venture (Frontera). We operate Frontera, in accordance with an operations and reimbursement
agreement executed between us and Frontera, for a management fee that is based on our costs incurred. Our agreement
with Frontera stipulates that we may resign as the operator at any time with the prior written consent of Frontera, or that we
may be removed as the operator for good cause, which includes material noncompliance with laws and material failure to
adhere to good industry practice regarding health, safety or environmental matters. For the years ended December 31,
2020, 2019 and 2018 we recognized approximately $5.3 million, $5.8 million and $5.8 million, respectively, of revenue
related to this operations and reimbursement agreement.
Terminaling services agreements—Brownsville terminals. We have two terminaling services agreements with
Frontera relating to our Brownsville, Texas facility that will expire in June 2021 and June 2023, subject to automatic
renewals unless terminated by either party upon 90 days’ to 180 days’ prior notice. In exchange for its minimum
throughput commitments, we have agreed to provide Frontera with approximately 301,000 barrels of storage capacity. For
the years ended December 31, 2020, 2019 and 2018 we recognized revenue related to this agreement of approximately $2.6
million, $2.6 million and $2.5 million, respectively.
Terminaling services agreement—Gulf Coast terminals. We have a terminaling services agreement with
Associated Asphalt Marketing, LLC, a wholly-owned indirect subsidiary of ArcLight relating to our Gulf Coast terminals.
The agreement will expire in April 2026, subject to a five-year automatic renewal unless terminated by either party upon
180 days’ prior notice, after which the agreement is subject to two-year automatic renewals unless terminated by either
party upon 180 days’ prior notice. In exchange for its minimum throughput commitment, we have agreed to provide
Associated Asphalt Marketing, LLC with approximately 750,000 barrels of storage capacity. For the years ended
December 31, 2020, 2019 and 2018 we recognized revenue related to this agreement with Associated Asphalt Marketing,
LLC of approximately $8.6 million, $8.5 million and $8.5 million, respectively.
Operating and administrative agreement—SeaPort Midstream Partners, LLC —Central services. We operate
two products terminals in Seattle, Washington and Portland, Oregon, on behalf of SeaPort Midstream Partners, LLC, in
accordance with an operating and administrative agreement executed between us and SeaPort Midstream Partners, LLC.
SeaPort Midstream Partners, LLC is a joint venture between SeaPort Midstream Holdings LLC, an ArcLight subsidiary,
and BP West Coast Products LLC. SeaPort Midstream Holdings LLC owns 51% of SeaPort Midstream Partners, LLC. The
operating and administrative agreement will expire in November 2023, subject to two-year automatic renewals unless
terminated by either party upon no less than twelve months’ notice prior to the end of the initial term or any successive
term. Our agreement with SeaPort Midstream Partners, LLC stipulates that we may resign as the operator at any time with
the prior written consent of SeaPort Midstream Partners, LLC, or that we may be removed as the operator for good cause,
which includes material noncompliance with laws and material failure to adhere to good industry practice regarding health,
safety or environmental matters. For the years ended December 31, 2020, 2019 and 2018 we recognized revenue related to
this operations and administrative agreement of approximately $3.3 million, $3.4 million and $3.4 million, respectively.
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
Services agreement—SeaPort Sound Terminal, LLC (“SeaPort Sound”)—Central services. Our subsidiary,
TMS, operates a products terminal in Tacoma, Washington on behalf of SeaPort Midstream Holdings LLC, an ArcLight
subsidiary. For the years ended December 31, 2020, 2019 and 2018 we recognized revenue related to this services
agreement of approximately $7.7 million, $7.2 million and $0.7 million, respectively.
Other affiliates—Central services. We manage additional terminal facilities that are owned by affiliates of
ArcLight, including Lucknow-Highspire Terminals, LLC, and, prior to July 1, 2019, the Baltimore Terminal. For the years
ended December 31, 2020, 2019 and 2018 we recognized revenue related to reimbursements from these affiliates of
approximately $1.3 million, $1.2 million and $0.1 million, respectively. Our management of the Baltimore Terminal
terminated on July 1, 2019.
Services agreement—TMC. Following the TMS Contribution, our executive officers who provide services to the
Company are employed by TMC, a wholly owned subsidiary of ArcLight, which also provides services to certain other
ArcLight affiliates. Pursuant to a services agreement between TMS and TMC, TMS continues to provide certain payroll
functions and maintains all employee benefits programs on behalf of TMC. TMC is reimbursed for the payroll and benefits
expenses related to the executive officers, plus a 1% administration fee. For the years ended December 31, 2020, 2019 and
2018 aggregate fees paid by us to TMC with respect to the services agreement was approximately $2.7 million, $0.8
million and $nil, respectively.
See also Note 1(a) of Notes to consolidated financial statements, Nature of business, for information regarding the
TMS Contribution.
(3) CONCENTRATION OF CREDIT RISK AND TRADE ACCOUNTS RECEIVABLE
Our primary market areas are located in the United States along the Gulf Coast, in the Southeast, in Brownsville,
Texas, along the Mississippi and Ohio Rivers, in the Midwest and along the West Coast. We have a concentration of trade
receivable balances due from companies engaged in the trading, distribution and marketing of refined products, renewable
products and crude oil. These concentrations of customers may affect our overall credit risk in that the customers may be
similarly affected by changes in economic, regulatory or other factors. Our customers’ historical financial and operating
information is analyzed prior to extending credit. We manage our exposure to credit risk through credit analysis, credit
approvals, credit limits and monitoring procedures, and for certain transactions we may request letters of credit,
prepayments or guarantees. At December 31, 2020 and 2019, amounts included in trade accounts receivable that are
accounted for as ASC 606 revenue are approximately $2.4 million and $4.7 million, respectively. We maintain allowances
for potentially uncollectible accounts receivable.
Trade accounts receivable, net consists of the following (in thousands):
December 31, December 31,
Trade accounts receivable
Less allowance for credit losses
$
$
61
2020
9,203
—
9,203
2019
$ 16,627
(127)
$ 16,500
Table of Contents
TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
The following table presents a roll forward of our allowance for credit losses (in thousands):
Balance at
beginning
Charged to
Balance at
end of
2020
2019
2018
of period
127
$
109
$
111
$
expenses
$
$
$
Deductions
— $ (127)
18
$
— $
$
— $
$
(2)
period
—
127
109
The following customers accounted for at least 10% of our consolidated revenue in at least one of the periods
presented in the accompanying consolidated statements of operations:
Pilot Flying J
Freepoint Commodities LLC
RaceTrac Petroleum Inc.
Castleton Commodities International LLC
NGL Energy Partners LP
(4) OTHER CURRENT ASSETS
Other current assets are as follows (in thousands):
Prepaid insurance
Additive detergent
Amounts due from insurance companies
Deposits and other assets
Year ended
December 31,
2020
Year ended Year ended
December 31,
2019
December 31,
2018
17 %
10 %
9 %
6 %
1 %
— %
6 %
10 %
9 %
16 %
— %
— %
11 %
10 %
22 %
December 31, December 31,
2020
2,123
1,585
668
1,247
5,623
$
$
2019
2,595
1,342
1,147
1,262
6,346
$
$
Amounts due from insurance companies. We periodically file claims for recovery of environmental remediation
costs with our insurance carriers under our comprehensive liability policies. We recognize our insurance recoveries in the
period that we assess the likelihood of recovery as being probable (i.e., likely to occur). At December 31, 2020 and 2019,
we have recognized amounts due from insurance companies of approximately $0.7 million and $1.1 million, respectively,
representing our best estimate of our probable insurance recoveries. During the year ended December 31, 2020, we
received reimbursements from insurance companies of approximately $0.5 million.
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
(5) PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net is as follows (in thousands):
Land
Terminals, pipelines and equipment
Furniture, fixtures and equipment
Construction in progress
Less accumulated depreciation
December 31, December 31,
2020
$
83,657
1,108,410
11,104
22,824
1,225,995
(488,494)
$ 737,501
$
2019
83,451
995,666
9,788
73,302
1,162,207
(434,987)
$ 727,220
At December 31, 2020 and 2019, property, plant and equipment, net utilized by our customers in operating lease
arrangements consisted of $582.6 million and $523.9 million, respectively, of terminals, pipelines and equipment. The
terminals, pipelines and equipment primarily relates to our storage tanks and associated internal piping.
(6) GOODWILL
Goodwill is as follows (in thousands):
Brownsville terminals
West Coast terminals
December 31, December 31,
2020
8,485
943
9,428
$
$
2019
8,485
943
9,428
$
$
Goodwill is required to be tested for impairment annually unless events or changes in circumstances indicate it is
more likely than not that an impairment loss has been incurred at an interim date. Our annual test for the impairment of
goodwill is performed as of December 31. The impairment test is performed at the reporting unit level. Our reporting units
are our operating segments (see Note 16 of Notes to consolidated financial statements). The fair value of each reporting
unit is determined on a stand-alone basis from the perspective of a market participant and represents an estimate of the
price that would be received to sell the unit as a whole in an orderly transaction between market participants at the
measurement date. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not
considered to be impaired.
At December 31, 2020 and 2019 our Brownsville and West Coast terminals contained goodwill. Our estimate of
the fair value of our Brownsville and West Coast terminals at December 31, 2020 and 2019 substantially exceeded the
carrying amount. Accordingly, we did not recognize any goodwill impairment charges during the years ended
December 31, 2020, 2019 and 2018, respectively. However, an increase in the assumed market participants’ weighted
average cost of capital, the loss of a significant customer, the disposition of significant assets, or an unforeseen increase in
the costs to operate and maintain the Brownsville and West Coast terminals, could result in the recognition of an
impairment charge in the future.
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
(7) INVESTMENTS IN UNCONSOLIDATED AFFILIATES
At December 31, 2020 and 2019, our investments in unconsolidated affiliates include a 42.5% Class A ownership
interest in Battleground Oil Specialty Terminal Company LLC (“BOSTCO”) and a 50% ownership interest in Frontera
Brownsville LLC (“Frontera”). BOSTCO is a terminal facility located on the Houston Ship Channel that encompasses
approximately 7.1 million barrels of distillate, residual and other black oil product storage. Class A and Class B ownership
interests share in cash distributions on a 96.5% and 3.5% basis, respectively. Class B ownership interests do not have
voting rights and are not required to make capital investments. Frontera is a terminal facility located in Brownsville, Texas
that encompasses approximately 1.7 million barrels of light petroleum product storage, as well as related ancillary
facilities.
The following table summarizes our investments in unconsolidated affiliates:
BOSTCO
Frontera
Total investments in unconsolidated affiliates
43 %
50 %
43 % $ 201,912
24,036
50 %
$ 225,948
2019
$ 201,743
23,682
$ 225,425
Percentage of
ownership
December 31,
2020
December 31,
2019
Carrying value
(in thousands)
December 31, December 31,
2020
At December 31, 2020 and 2019, our investment in BOSTCO includes approximately $6.4 million and
$6.6 million, respectively, of excess investment related to a one time buy-in fee to acquire our 42.5% interest and
capitalization of interest on our investment during the construction of BOSTCO amortized over the useful life of the assets.
Excess investment is the amount by which our investment exceeds our proportionate share of the book value of the net
assets of the BOSTCO entity.
Earnings from investments in unconsolidated affiliates were as follows (in thousands):
BOSTCO
Frontera
Total earnings from investments in unconsolidated affiliates
Year ended Year ended Year ended
December 31, December 31, December 31,
2019
2,356
2,538
4,894
2018
5,767
3,085
8,852
2020
3,933
2,565
6,498
$
$
$
$
$
$
Additional capital investments in unconsolidated affiliates were as follows (in thousands):
Year ended Year ended Year ended
BOSTCO
Frontera
Additional capital investments in unconsolidated affiliates
64
$
December 31, December 31, December 31,
2019
4,707
225
4,932
2020
7,257
—
7,257
—
1,413
1,413
2018
$
$
$
$
$
Table of Contents
TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
Cash distributions received from unconsolidated affiliates were as follows (in thousands):
Year ended Year ended Year ended
BOSTCO
Frontera
Cash distributions received from unconsolidated affiliates
December 31, December 31, December 31,
2019
8,325
3,107
$ 11,432
2018
$ 12,135
4,280
$ 16,415
2020
$ 11,021
2,211
$ 13,232
$
The summarized financial information of our unconsolidated affiliates was as follows (in thousands):
Balance sheets:
Current assets
Long-term assets
Current liabilities
Long-term liabilities
Net assets
Statements of income:
Revenue
Expenses
Net income
(8) OTHER ASSETS, NET
BOSTCO
Frontera
December 31, December 31, December 31, December 31,
2020
$ 15,822
464,971
(17,543)
(5,476)
$ 457,774
2019
$ 12,478
464,085
(13,607)
(6,036)
$ 456,920
$
2020
5,352
43,939
(1,219)
—
$ 48,072
$
2019
4,870
44,344
(1,850)
—
$ 47,364
BOSTCO
Year ended
December 31,
Frontera
Year ended
December 31,
2020
$ 64,575
(53,916)
$ 10,659
2019
$ 60,751
(54,033)
$ 6,718
2018
$ 66,288
(51,993)
$ 14,295
2020
$ 19,520
(14,390)
$ 5,130
2019
$ 20,076
(15,000)
$ 5,076
2018
$ 24,017
(17,847)
6,170
$
Other assets, net are as follows (in thousands):
Customer relationships, net of accumulated amortization of $9,587 and $7,237,
respectively
Revolving credit facility unamortized deferred debt issuance costs, net of accumulated
amortization of $11,054 and $9,353, respectively
Amounts due under long-term terminaling services agreements
Deposits and other assets
December 31, December 31,
2020
2019
$
39,843
$
42,193
2,117
1,347
735
44,042
3,818
215
1,171
47,397
$
$
65
Table of Contents
TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
Customer relationships. Other assets, net include certain customer relationships at our West Coast terminals.
These customer relationships are being amortized on a straight-line basis over approximately twenty years. Amortizable
intangible assets are only evaluated for impairment upon a significant change in the operating environment. If an
evaluation of the undiscounted cash flows indicates impairment, the asset is written down to its estimated fair value, which
is generally based on discounted future cash flows. We have not taken an impairment on customer relationships in the years
presented. Expected future amortization expense for the customer relationships as of December 31, 2020 is as follows (in
thousands):
Amortization expense
Years ending December 31,
2021
$ 2,350
2022
$ 2,350
2023
$ 2,350
2024
$ 2,350
2025
$ 2,350
Thereafter
$ 28,093
Deferred debt issuance costs. Deferred debt issuance costs are amortized using the effective interest method over
the term of the related credit facility.
Amounts due under long-term terminaling services agreements. We have long-term terminaling services
agreements with certain of our customers that provide for minimum payments that increase at stated amounts over the
terms of the respective agreements. We recognize as revenue the minimum payments under the long-term terminaling
services agreements on a straight-line basis over the terms of the respective agreements. At December 31, 2020 and 2019,
we have recognized revenue in excess of the minimum payments that are due through those respective dates under the
long-term terminaling services agreements, accounted for in accordance with ASC 842, resulting in an asset of
approximately $1.3 million and $0.2 million, respectively.
(9) ACCRUED LIABILITIES
Accrued liabilities are as follows (in thousands):
Accrued compensation expense
Customer advances and deposits
Interest payable
Accrued property taxes
Accrued environmental obligations
Unrealized loss on derivative instrument
Accrued expenses and other
December 31, December 31,
2020
$ 12,283
10,689
7,619
3,018
983
—
140
$ 34,732
2019
$ 13,272
7,850
7,763
3,149
1,531
480
2,513
$ 36,558
Accrued compensation expense. Accrued compensation expense includes our bonus, payroll, and savings and
retention plan awards accruals.
Customer advances and deposits. We bill certain of our customers one month in advance for terminaling services
to be provided in the following month. At December 31, 2020 and 2019, approximately $9.6 million and $7.0 million,
respectively, of the customer advances and deposits balance is related to terminaling services agreements accounted for as
operating leases under ASC 842. At December 31, 2020 and 2019, approximately $1.1 million and $0.9 million,
respectively, of the customer advances and deposits balance is considered contract liabilities under ASC 606. Revenue
recognized during the years ended December 31, 2020 and 2019 from amounts included in contract liabilities at the
beginning of the period was approximately $0.9 million and $0.8 million, respectively. At December 31, 2020 and 2019,
we have billed and collected from certain of our customers approximately $10.7 million and $7.9 million, respectively, in
advance of the terminaling services being provided.
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Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
Accrued environmental obligations. At December 31, 2020 and 2019, we have accrued environmental
obligations of approximately $1.0 million and $1.5 million, respectively, representing our best estimate of our remediation
obligations. Changes in our estimates of our future environmental remediation obligations may occur as a result of the
passage of time and the occurrence of future events.
The following table presents a roll forward of our accrued environmental obligations (in thousands):
Balance at
beginning
of period
$ 1,531
$ 1,556
$ 1,855
Payments
$ (475)
$ (671)
$ (457)
Increase Balance at
(decrease)
end of
in estimate
(73)
$
646
$
158
$
period
$
983
$ 1,531
$ 1,556
2020
2019
2018
(10) OTHER LIABILITIES
Other liabilities are as follows (in thousands):
Advance payments received under long-term terminaling services
agreements
Deferred revenue
December 31, December 31,
2020
2019
$
$
2,569
2,251
4,820
$
$
3,782
1,208
4,990
Advance payments received under long-term terminaling services agreements. We have long-term terminaling
services agreements with certain of our customers that provide for advance minimum payments. We recognize the advance
minimum payments as revenue under ASC 842 on a straight-line basis over the term of the respective agreements. At
December 31, 2020 and 2019, we have received advance minimum payments in excess of revenue recognized under these
long-term terminaling services agreements resulting in a liability of approximately $2.6 million and $3.8 million,
respectively.
Deferred revenue. Pursuant to historical agreements with our customers, we agreed to undertake certain capital
projects. Upon completion of the projects, our customers have paid us lump-sum amounts that will be recognized as
revenue on a straight-line basis over the remaining term of the agreements. At December 31, 2020 and 2019, we have
unamortized deferred revenue for completed projects of approximately $2.3 million and $1.2 million, respectively. During
the years ended December 31, 2020, 2019 and 2018, we billed our customers approximately $2.2 million, $0.1 million and
$1.7 million, respectively, for completed projects. During the years ended December 31, 2020, 2019 and 2018, we
recognized revenue on a straight-line basis of approximately $1.1 million, $0.8 million and $1.8 million, respectively, for
completed projects. At both December 31, 2020 and 2019, approximately $nil of the deferred revenue balance is
considered contract liabilities under ASC 606. At December 31, 2020 and 2019, approximately $2.3 million and $1.2
million, respectively, of deferred revenue is related to terminaling services agreements accounted for as operating leases
under ASC 842. Revenue recognized during the years ended December 31, 2020 and 2019 from amounts included in
contract liabilities under ASC 606 at the beginning of the period was approximately $nil and $0.2 million, respectively.
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
(11) LONG-TERM DEBT
Long-term debt is as follows (in thousands):
Revolving credit facility due in 2022
6.125% senior notes due in 2026
Senior notes unamortized deferred debt issuance costs, net of
accumulated amortization of $2,441 and $1,544, respectively
December 31, December 31,
2020
$ 350,400
299,900
2019
$ 350,700
300,000
(5,641)
$ 644,659
(6,538)
$ 644,162
On February 12, 2018, the Company and TLP Finance Corp., our wholly owned subsidiary, issued at par $300
million of 6.125% senior notes. Net proceeds, after $8.1 million of issuance costs, were used to repay indebtedness under
our revolving credit facility. The senior notes are due in 2026 and are guaranteed on a senior unsecured basis by each of our
100% owned domestic subsidiaries that guarantee obligations under our revolving credit facility. These subsidiary
guarantees are full and unconditional and joint and several, and the subsidiaries that did not guarantee our senior notes are
minor. TransMontaigne Partners LLC has no independent assets or operations unrelated to its investments in its
consolidated subsidiaries. TLP Finance Corp. has no assets or operations. Our operations are conducted by subsidiaries of
TransMontaigne Partners LLC, including primarily through our 100% owned operating company subsidiary,
TransMontaigne Operating Company L.P. None of the assets of TransMontaigne Partners LLC or a guarantor represent
restricted net assets pursuant to the guidelines established by the SEC.
Our revolving credit facility provides for a maximum borrowing line of credit equal to $850 million. The terms of
our revolving credit facility include covenants that restrict our ability to make cash distributions, acquisitions and
investments, including investments in joint ventures. We may make distributions of cash to the extent of our “available
cash” as defined in our LLC agreement. We may make acquisitions and investments that meet the definition of “permitted
acquisitions”; “other investments” which may not exceed 5% of “consolidated net tangible assets”; and additional future
“permitted JV investments” up to $175 million, which may include additional investments in BOSTCO. The primary
financial covenants contained in our revolving credit facility are (i) a total leverage ratio test (not to exceed 5.25 to 1.0),
(ii) a senior secured leverage ratio test (not to exceed 3.75 to 1.0), and (iii) a minimum interest coverage ratio test (not less
than 2.75 to 1.0). The principal balance of loans and any accrued and unpaid interest are due and payable in full on the
maturity date, March 13, 2022. We were in compliance with all financial covenants as of and during the years ended
December 31, 2020 and 2019.
We may elect to have loans under our revolving credit facility bear interest either (i) at a rate of LIBOR plus a
margin ranging from 1.75% to 2.75% depending on the total leverage ratio then in effect, or (ii) at the base rate plus a
margin ranging from 0.75% to 1.75% depending on the total leverage ratio then in effect. We also pay a commitment fee on
the unused amount of commitments, ranging from 0.375% to 0.5% per annum, depending on the total leverage ratio then in
effect. Our obligations under our revolving credit facility are secured by a first priority security interest in favor of the
lenders in the majority of our assets, including our investments in unconsolidated affiliates. For the years ended December
31, 2020, 2019 and 2018, the weighted average interest rate on borrowings under our revolving credit facility was
approximately 4.3%, 5.7% and 5.2%, respectively. At December 31, 2020 and 2019, our outstanding borrowings under our
revolving credit facility were $350.4 million and $350.7 million, respectively. At both December 31, 2020 and 2019 our
outstanding letters of credit were $1.3 million.
(12) DEFERRED COMPENSATION EXPENSE
We have a savings and retention plan to compensate certain employees who provide services to the Company. The
purpose of the savings and retention plan is to provide for the reward and retention of participants by providing them with
awards that vest over future service periods. Awards under the plan with respect to individuals providing
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
services to the Company generally become vested as to 50% of a participant’s annual award as of the first day of the month
that falls closest to the second anniversary of the grant date, and the remaining 50% as of the first day of the month that
falls closest to the third anniversary of the grant date, subject to earlier vesting upon a participant’s attainment of the age
and length of service thresholds, retirement, death or disability, involuntary termination without cause, or termination of a
participant’s employment following a change in control of the Company as specified in the plan. The awards are increased
for the value of any accrued growth based on underlying investments deemed made with respect to the awards. The awards
(including any accrued growth relating thereto) are subject to forfeiture until the vesting date. The Take-Private Transaction
did not accelerate the vesting of any of the awards.
A person will satisfy the age and length of service thresholds of the plan upon the attainment of the earliest of
(a) age sixty, (b) age fifty-five and ten years of service as an officer of the Company or any of its affiliates or predecessors,
or (c) age fifty and twenty years of service as an employee of the Company or any of its affiliates or predecessors.
Prior to the Take-Private Transaction, we had the ability to settle the awards in our common units, and
accordingly, we accounted for the awards as an equity award. Following the Take-Private Transaction, we index the awards
to other forms of investments, and have the intent and ability to settle the awards in cash. Accordingly, we account for the
awards as accrued liabilities. For the years ended December 31, 2020, 2019 and 2018 we recognized expense of
approximately $1.8 million, $2.3 million and $3.5 million, respectively, for awards to employees.
(13) COMMITMENTS AND CONTINGENCIES
Effective January 1, 2019, we adopted Accounting Standards Codification (“ASC”) Topic 842, Leases and the
series of related Accounting Standards Updates that followed (collectively referred to as “ASC 842”), using the modified
retrospective transition method applied at the effective date of the standard. By electing this optional transition method,
information prior to January 1, 2019 has not been restated and continues to be reported under the accounting standards in
effect for that period (ASC 840).
The Company elected the following practical expedients permitted under the transition guidance within the new
standard; 1) the option to carry forward the historical lease classifications and assessment of initial direct costs, 2) the
option to not include leases with an initial term of less than twelve months in the lease assets and liabilities and 3) the
option to account for lease and non-lease components as a single lease component.
We lease property including corporate offices, vehicles and land. We determine if an arrangement is a lease at
inception and evaluate identified leases for operating or finance lease treatment at lease commencement. Operating or
finance lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of
lease payments over the lease term. Our leases have remaining lease terms of less than one year to 40 years, some of
which have options to extend or terminate the lease. For purposes of calculating operating lease liabilities, lease terms may
be deemed to include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
The impact of ASC 842 on our consolidated balance sheet beginning January 1, 2019 was the recognition of right-
of-use assets and lease liabilities for operating leases. Unamortized lease incentives were reclassified into right-of-use
assets on January 1, 2019. No impact was recorded to the consolidated statement of operations or beginning equity for
ASC 842.
The $37.9 million right-of-use asset and the $39.5 million operating liability at January 1, 2019 represents the
right-of-use assets and lease labilities at the time of ASC 842 adoption. Additions to right-of-use assets and liabilities
represent the present value of future lease payments at the inception of the new leases. Both the January 1, 2019 right-of-
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
use assets and liabilities and additions are non-cash transactions that did not impact the consolidated statement of cash
flows.
Beginning January 1, 2019, operating right-of-use assets and operating lease liabilities are recognized based on the
present value of lease payments over the lease term at commencement date. Operating leases in effect prior to January 1,
2019 were recognized at the present value of the remaining payments on the remaining lease term as of January 1, 2019.
The Company uses its incremental borrowing rate based on the information available at the commencement date in
determining the present value of lease payments. We determined our incremental borrowing rate using the borrowing rate
of our revolving credit facility. The terms of our vehicle, office and land leases are in line with our revolving credit facility,
our primary finance mechanism. We have certain land and vehicle lease agreements with lease and non-lease components,
which are accounted for separately. Non-lease components include payments for taxes and other operating and
maintenance expenses incurred by the lessor but payable by us in connection with the leasing arrangement. As of
December 31, 2020, the Company was party to certain subleasing arrangements whereby the Company, as the primary
obligor on the lease, has recognized sublease income for lease payments made by affiliates to the lessor.
Following are components of our lease costs (in thousands):
Operating leases
Variable lease costs (including insignificant short-term leases)
Sublease income as primary obligor
Total lease costs
Year ended Year ended
December 31, December 31,
2020
4,723
849
(1,000)
4,572
$
$
2019
4,548
892
(992)
4,448
$
$
Other information related to our operating leases was as follows (in thousands, except lease term and discount
rate):
Cash outflows for operating leases
Weighted average remaining lease term (years)
Weighted average discount rate
Year ended Year ended
December 31, December 31,
$
2020
4,742
18.35
5.2%
$
2019
4,371
18.79
5.2%
Undiscounted cash flows owed by the Company to lessors pursuant to contractual agreements in effect as of
December 31, 2020 and related imputed interest was as follows (in thousands):
Years ending December 31:
2021
2022
2023
2024
2025
Thereafter
Total lease payments
Less imputed interest
Present value of operating lease liabilities
70
$
4,758
4,749
4,151
3,699
3,286
36,545
57,188
(21,486)
$ 35,702
Table of Contents
TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
Contract commitments. At December 31, 2020, we have contractual commitments of approximately $26.0
million for the supply of services, labor and materials related to capital projects that currently are under development. We
expect that these contractual commitments will primarily be paid within a year.
Legal proceedings. We are party to various legal, regulatory and other matters arising from the day-to-day
operations of our business that may result in claims against us. While the ultimate impact of any proceedings cannot be
predicted with certainty, our management believes that the resolution of any of our pending legal proceedings will not have
a material adverse effect on our business, financial position, results of operations or cash flows.
(14) DISCLOSURES ABOUT FAIR VALUE
GAAP defines fair value, establishes a framework for measuring fair value and expands disclosures about fair
value measurements. GAAP also establishes a fair value hierarchy that prioritizes the use of higher-level inputs for
valuation techniques used to measure fair value. The three levels of the fair value hierarchy are: (1) Level 1 inputs, which
are quoted prices (unadjusted) in active markets for identical assets or liabilities; (2) Level 2 inputs, which are inputs other
than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and
(3) Level 3 inputs, which are unobservable inputs for the asset or liability.
The fair values of the following financial instruments represent our best estimate of the amounts that would be
received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction between market
participants at that date. Our fair value measurements maximize the use of observable inputs. However, in situations where
there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects
our judgments about the assumptions that market participants would use in pricing the asset or liability based on the best
information available in the circumstances. The following methods and assumptions were used to estimate the fair value of
financial instruments at December 31, 2020 and 2019. There were no transfers between the three levels of the fair value
hierarchy during the year ended December 31, 2020.
Cash equivalents. The carrying amount approximates fair value because of the short-term maturity of these
instruments. The fair value is categorized in Level 1 of the fair value hierarchy.
Derivative instruments. The carrying amount of our interest rate swaps was determined using a pricing model
based on the LIBOR swap rate and other observable market data. The fair value is categorized in Level 2 of the fair value
hierarchy.
Debt. The carrying amount of our revolving credit facility debt approximates fair value since borrowings under
the facility bear interest at current market interest rates. The estimated fair value of our $299.9 million publicly traded
senior notes at December 31, 2020 was approximately $302.9 million based on observable market trades. The fair value of
our debt is categorized in Level 2 of the fair value hierarchy.
(15) REVENUE FROM CONTRACTS WITH CUSTOMERS
The majority of our terminaling services agreements contain minimum payment arrangements, resulting in a fixed
amount of revenue recognized, which we refer to as “firm commitments” and are accounted for in accordance with ASC
842, Leases (“ASC 842 revenue”). The remainder is recognized in accordance with ASC 606, Revenue From Contracts
With Customers (“ASC 606 revenue”).
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
The following table provides details of our revenue disaggregated by category of revenue (in thousands):
Terminaling services fees:
Firm commitments (ASC 842 revenue)
Firm commitments (ASC 606 revenue)
Total firm commitments revenue
Ancillary revenue (ASC 606 revenue)
Ancillary revenue (ASC 842 revenue)
Total ancillary revenue
Total terminaling services fees
Pipeline transportation fees (ASC 842 revenue)
Management fees (ASC 606 revenue)
Management fees (ASC 842 revenue)
Total management fees
Total revenue
Year ended Year ended
December 31, December 31,
2020
2019
$ 197,385
15,018
212,403
40,029
2,577
42,606
255,009
3,519
17,354
1,211
18,565
$ 277,093
$ 178,214
14,226
192,440
44,062
4,448
48,510
240,950
3,457
16,836
1,799
18,635
$ 263,042
The following table includes our estimated future revenue associated with our firm commitments under
terminaling services fees which is expected to be recognized as ASC 606 revenue in the specified period related to our
future performance obligations as of the end of the reporting period (in thousands):
Estimated Future ASC 606 Revenue by Segment
Brownsville
Gulf Coast Midwest
Terminals Terminals Terminals Terminals Terminals Terminals Services Total
— $ 11,584
1,056 $
$ 4,572
2021
4,248
—
1,016
1,656
2022
734
—
508
226
2023
—
—
—
—
2024
—
—
—
—
2025
—
Thereafter
—
—
—
— $ 16,566
2,580 $
Total estimated future ASC 606 revenue $ 6,454
5,837 $
1,576
—
—
—
—
7,413 $
— $
—
—
—
—
—
— $
— $
—
—
—
—
—
— $
119
—
—
—
—
—
119
Southeast West Coast Central
River
$
$
$
$
Our estimated future ASC 606 revenue, for purposes of the tabular presentation above, excludes estimates of
future rate changes due to changes in indices or contractually negotiated rate escalations and is generally limited to
contracts that have minimum payment arrangements. The balances disclosed include the full amount of our customer
commitments accounted for as ASC 606 revenue as of December 31, 2020 through the expiration of the related contracts.
The balances disclosed exclude all performance obligations for which the original expected term is one year or less, the
term of the contract with the customer is open and cannot be estimated, the contract includes options for future purchases
or the consideration is variable.
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
Estimated future ASC 606 revenue in the table above excludes revenue arrangements accounted for in accordance
with ASC 842. The following table includes our estimated future revenue associated with our firm commitments under
terminaling services fees which is expected to be recognized as ASC 842 revenue in the specified period (in thousands):
Years ending December 31:
2021
2022
2023
2024
2025
Thereafter
Total estimated future ASC 842 revenue
(16) BUSINESS SEGMENTS
$ 171,258
126,172
102,847
60,222
41,388
481,486
$ 983,373
We provide integrated terminaling, storage, transportation and related services to companies engaged in the
trading, distribution and marketing of refined petroleum products, renewable products, crude oil, chemicals, fertilizers and
other liquid products. Our chief operating decision maker is the Company’s chief executive officer. The Company’s chief
executive officer reviews the financial performance of our business segments using disaggregated financial information
about “net margins” for purposes of making operating decisions and assessing financial performance. “Net margins” is
composed of revenue less operating costs and expenses. Accordingly, we present “net margins” for each of our business
segments: (i) Gulf Coast terminals, (ii) Midwest terminals, (iii) Brownsville terminals including management of the
Frontera joint venture, (iv) River terminals, (v) Southeast terminals, (vi) West Coast terminals and (vii) Central services.
Our Central services segment primarily represents the costs of employees performing operating oversight functions,
engineering, health, safety and environmental services to our terminals and terminals that we operate or manage, including
for affiliate terminals owned by ArcLight. In addition, Central services represent the cost of employees at affiliate terminals
owned by ArcLight that we operate. We receive a fee from these affiliates based on our costs incurred.
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
The financial performance of our business segments is as follows (in thousands):
Year ended
Year ended
December 31, December 31, December 31,
2019
Year ended
2020
2018
Gulf Coast Terminals:
Terminaling services fees
Management fees
Revenue
Operating costs and expenses
Net margins
Midwest Terminals:
Terminaling services fees
Pipeline transportation fees
Revenue
Operating costs and expenses
Net margins
Brownsville Terminals:
Terminaling services fees
Pipeline transportation fees
Management fees
Revenue
Operating costs and expenses
Net margins
River Terminals:
Terminaling services fees
Revenue
Operating costs and expenses
Net margins
Southeast Terminals:
Terminaling services fees
Management fees
Revenue
Operating costs and expenses
Net margins
West Coast Terminals:
Terminaling services fees
Management fees
Revenue
Operating costs and expenses
Net margins
Central Services:
Management fees
Revenue
Operating costs and expenses
Net margins
Total net margins
General and administrative expenses
Insurance expenses
Deferred compensation expense
Depreciation and amortization
Earnings from unconsolidated affiliates
Gain from insurance proceeds
Loss on disposition of assets
Operating income
Other expenses
Net earnings
$
$
$
76,875
32
76,907
(20,946)
55,961
73,380
36
73,416
(22,196)
51,220
64,338
284
64,622
(22,817)
41,805
8,358
1,909
10,267
(2,942)
7,325
15,071
1,610
5,288
21,969
(9,749)
12,220
11,700
11,700
(5,777)
5,923
88,573
947
89,520
(23,498)
66,022
54,432
38
54,470
(18,454)
36,016
12,260
12,260
(21,245)
(8,985)
174,482
(21,657)
(4,973)
(1,834)
(57,400)
6,498
—
—
95,116
(33,768)
61,348
$
$
9,804
1,851
11,655
(3,443)
8,212
11,560
1,606
5,787
18,953
(9,053)
9,900
10,233
10,233
(6,040)
4,193
87,813
964
88,777
(23,500)
65,277
48,160
36
48,196
(16,339)
31,857
11,812
11,812
(22,451)
(10,639)
160,020
(23,660)
(4,995)
(2,308)
(52,535)
4,894
3,351
—
84,767
(38,853)
45,914
$
10,127
1,772
11,899
(3,053)
8,846
8,339
1,523
7,384
17,246
(7,812)
9,434
10,654
10,654
(6,832)
3,822
82,821
891
83,712
(26,836)
56,876
39,952
8
39,960
(14,678)
25,282
4,204
4,204
(16,949)
(12,745)
133,320
(23,707)
(4,976)
(3,478)
(49,793)
8,852
—
(901)
59,317
(34,937)
24,380
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TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
Supplemental information about our business segments is summarized below (in thousands):
Year ended December 31, 2020
Gulf Coast
Central
Terminals Terminals Terminals Terminals Terminals Terminals Services
Southeast West Coast
Brownsville
Midwest
River
Total
Revenue:
External customers
Affiliate customers
Revenue
$ 68,268
8,639
$ 76,907
$
$
10,267
—
10,267
$
$
14,062
$ 11,700
$ 89,520
7,907
21,969
—
$ 11,700
—
$ 89,520
$
$
9,491
Capital expenditures
Identifiable assets
Cash and cash equivalents
Investments in unconsolidated affiliates
Revolving credit facility unamortized deferred debt issuance costs, net
Other
$ 108,903
$ 122,218
18,193
22,116
933
$
$
$
$
$
$
54,470
$
— $ 248,287
—
12,260
28,806
$ 12,260 $ 277,093
54,470
7,638
$
1,154 $
72,737
9,314
$ 22,091
$ 50,337
$ 254,497
$ 270,539
$ 12,869 $ 837,556
Gulf Coast
Central
Terminals Terminals Terminals Terminals Terminals Terminals Services
Southeast West Coast
Brownsville
Midwest
River
Year ended December 31, 2019
$ 64,879
8,537
$ 73,416
$
$
11,655
—
11,655
$
$
10,535
$ 10,233
$ 88,777
8,418
18,953
—
$ 10,233
—
$ 88,777
48,196
$
— $
234,275
—
11,812
$ 11,812 $
28,767
263,042
48,196
2,978
$ 39,947
10,458
$
2,153 $
91,023
$
$
$
$
$
7,697
Capital expenditures
Identifiable assets
Cash and cash equivalents
Investments in unconsolidated affiliates
Revolving credit facility unamortized deferred debt issuance costs, net
Other
$ 125,062
27,068
93,903
19,595
722
$
$
$
$
$ 45,263
$ 262,462
$ 278,610
$ 13,329 $
838,224
1,090
225,425
3,818
3,496
$ 1,072,053
595
225,948
2,117
2,990
$ 1,069,206
Total
Year ended December 31, 2018
Gulf Coast
Midwest
Brownsville
River
Southeast West Coast
Central
Terminals Terminals Terminals Terminals Terminals Terminals Services
Total
$ 56,144
8,478
$ 64,622
$
5,357
$
$
$
11,899
—
11,899
568
$
$
$
8,934
$ 10,654
$ 83,712
8,312
17,246
—
$ 10,654
—
$ 83,712
15,673
$
1,596
$ 35,070
$
$
$
39,960
$
—
$
39,960
— $ 211,303
4,204
20,994
4,204 $ 232,297
7,858
$
209 $
66,331
75
Total assets
Revenue:
External customers
Affiliate customers
Revenue
Total assets
Revenue:
External customers
Affiliate customers
Revenue
Capital expenditures
Table of Contents
TransMontaigne Partners LLC and Subsidiaries
Notes to consolidated financial statements (continued)
Years ended December 31, 2020, 2019 and 2018
(17) FINANCIAL RESULTS BY QUARTER (UNAUDITED)
Revenue
Operating costs and expenses
General and administrative expenses
Insurance expenses
Deferred compensation expense
Depreciation and amortization
Earnings from unconsolidated affiliates
Operating income
Interest expense
Amortization of deferred debt issuance costs
Net earnings
Three months ended
March 31,
June 30,
September 30,
December 31,
2020
2020
2020
2020
Year ended
December 31,
2020
$ 68,841
(26,637)
(6,317)
(1,208)
(911)
(13,641)
2,153
22,280
(9,214)
(643)
$ 12,423
$ 68,058
(25,355)
(5,250)
(1,280)
(354)
(14,242)
1,850
23,427
(7,204)
(627)
$ 15,596
(in thousands)
69,428
$
(25,241)
(4,820)
(1,258)
(309)
(14,674)
1,789
24,915
(7,435)
(650)
16,830
$
$
$
70,766
(25,378)
(5,270)
(1,227)
(260)
(14,843)
706
24,494
(7,341)
(654)
16,499
$ 277,093
(102,611)
(21,657)
(4,973)
(1,834)
(57,400)
6,498
95,116
(31,194)
(2,574)
$ 61,348
Three months ended
March 31,
June 30,
September 30,
December 31,
2019
2019
2019
2019
Year ended
December 31,
2019
Revenue
Operating costs and expenses
General and administrative expenses
Insurance expenses
Deferred compensation expense
Depreciation and amortization
Earnings from unconsolidated affiliates
Gain from insurance proceeds
Operating income
Interest expense
Amortization of deferred debt issuance costs
Net earnings
(18) SUBSEQUENT EVENTS
$ 61,268
(25,325)
(8,164)
(1,361)
(799)
(12,652)
1,140
—
14,107
(8,842)
(749)
4,516
$
$ 64,969
(26,464)
(5,212)
(1,218)
(294)
(13,107)
1,225
3,351
23,250
(9,708)
(632)
$ 12,910
(in thousands)
66,573
(24,395)
(4,603)
(1,240)
(376)
(13,362)
1,476
—
24,073
(9,107)
(636)
14,330
$
$
$
70,232
(26,838)
(5,681)
(1,176)
(839)
(13,414)
1,053
23,337
(8,539)
(640)
14,158
$
$ 263,042
(103,022)
(23,660)
(4,995)
(2,308)
(52,535)
4,894
3,351
84,767
(36,196)
(2,657)
$ 45,914
—
No subsequent transactions or events warranted recognition or disclosure in the accompanying financials or notes
thereto.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that information required to be
disclosed by us in the reports that we file or submit to the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by
the Commission’s rules and forms, and that information is accumulated and communicated to our management, including
our executive and principal financial officer (whom we refer to as the Certifying Officers), as appropriate to allow timely
decisions regarding required disclosure. The management of our sole equity-holder (TLP Finance Holdings, LLC)
evaluated, with the participation of the Certifying Officers, the effectiveness of our disclosure controls and procedures as of
December 31, 2020, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, the Certifying
Officers concluded that, as of December 31, 2020, our disclosure controls and procedures were effective at the reasonable
assurance level. In addition, our Certifying Officers concluded that there were no changes in our internal control over
financial reporting that occurred during the fiscal quarter ended December 31, 2020 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.
Management’s Report on Internal Control Over Financial Reporting
The management of our sole equity-holder is responsible for establishing and maintaining adequate internal
control over financial reporting. Our internal control over financial reporting is a process designed 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.
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting
objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human
diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal
control over financial reporting also can be circumvented by collusion or improper management override. Because of such
limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known features of the financial reporting process.
Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
The management of our sole equity-holder has used the framework set forth in the report entitled “Internal Control
—Integrated Framework (2013)” published by the Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”) to evaluate the effectiveness of our internal control over financial reporting. Based on that evaluation, the
management of our sole equity-holder has concluded that our internal control over financial reporting was effective as of
December 31, 2020.
March 5, 2021
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ITEM 9B. OTHER INFORMATION
No information was required to be disclosed in a report on Form 8-K, but not so reported, for the quarter ended
December 31, 2020.
Part III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
TLP Finance Holdings, LLC (“TLP Finance”) is our sole equity-holder and manages our operations and activities.
Further, our company’s executive officers are employees of an affiliate of ArcLight, TransMontaigne Management
Company, LLC (“TMC”). As a result, our management activities are entirely conducted by affiliates of ArcLight. As we
are managed by our sole equity- holder, TLP Finance, we do not have a board of directors and the decisions of TLP
Finance are not governed by any specific policies. TLP Finance may adopt certain policies governing its decision-making
processes with respect to our management in the future.
Corporate Governance Guidelines; Code of Business Conduct and Ethics
To address governance changes in connection with our being wholly owned by an indirect controlled subsidiary of
ArcLight following the Take-Private Transaction, the Company adopted a Code of Ethics for Senior Financial Officers,
which includes substantially similar terms to the policies in place for our general partner prior to the Take-Private
Transaction. The Code of Ethics for Senior Financial Officers applies to the senior financial officers of the Company,
including the chief executive officer, the chief financial officer, the chief accounting officer, the chief operating officer and
the president or persons performing similar functions.
In addition, to address governance changes in connection with our being wholly owned by an indirect controlled
subsidiary of ArcLight following the Take Private Transaction, the Company adopted a Code of Business Conduct and
Ethics, which applies to all employees providing services to the Company and all officers of the Company.
Management of the Company and Officers
TLP Finance, our sole equity-holder, manages and oversees our operations. As part of its oversight function, TLP
Finance monitors how management operates the Company. When granting authority to management, approving strategies
and receiving management reports, TLP Finance considers, among other things, the risks and vulnerabilities we face.
As of the date of this report, the Company does not have its own board of directors. In connection with the Take-
Private Transaction, on February 26, 2019, TransMontaigne GP L.L.C., the general partner of the Partnership prior to its
conversion to a Delaware limited liability company, merged with and into the Company, with the Company surviving. In
addition, as a result of the Take-Private Transaction, and the adoption of our limited liability company agreement on
February 26, 2019, management of the Company was vested in TLP Finance, an indirect controlled subsidiary of ArcLight.
Accordingly, the board of directors of TransMontaigne GP L.L.C. was dissolved, and each of our former independent
directors, Jay A. Wiese, Steven A. Blank, and Barry E. Welch resigned from the board of directors of TransMontaigne GP
L.L.C. Each of Messrs. Wiese, Blank and Welch resigned without any claims for compensation (or otherwise), or any
disagreements with any matter relating to the operations, internal controls, policies, or practices of the Partnership, the
general partner, or the board of directors of the general partner, and the resignation of each was solely as a result of the
Take-Private Transaction. In addition, as a result of the Take-Private Transaction and our management by TLP Finance
following the effective-time thereof, none of Daniel R. Revers, Kevin M. Crosby, Lucius H. Taylor, or Theodore D. Burke,
each of whom previously sat on the board of directors of TransMontaigne GP L.L.C. and are employees of ArcLight,
continue to serve in such capacity.
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Executive Officers
The following table sets forth the names, ages and titles of the executive officers of the Company, each of whom is
an employee of an ArcLight affiliate, as of March 5, 2021:
Name
Frederick W. Boutin
James F. Dugan
Robert T. Fuller
Michael A. Hammell
Mark S. Huff
Age
65
63
51
50
61
Position
Chief Executive Officer
Executive Vice President and Chief Operating Officer
Executive Vice President, Chief Financial Officer and Treasurer
Executive Vice President, General Counsel and Secretary
President
Frederick W. Boutin has served as Chief Executive Officer of the Company, and prior to the Take-Private
Transaction, our general partner and its subsidiaries since November of 2014. Prior to then he served as Executive Vice
President and Chief Financial Officer beginning in January 2008. Mr. Boutin also managed business development and
commercial contracting activities from December 2007 to July 2010 and from August 2013 to January 2015. Prior to
February 1, 2016, Mr. Boutin also served in various other capacities at our general partner and its subsidiaries, and
TransMontaigne and its predecessors, since 1995. Prior to his affiliation with TransMontaigne, Mr. Boutin was a Vice
President at Associated Natural Gas Corporation, and its successor Duke Energy Field Services, and a certified public
accountant with Peat Marwick. Mr. Boutin holds a B.S. in Electrical Engineering and an M.S. in Accounting from
Colorado State University.
James F. Dugan has served as Executive Vice President and Chief Operating Officer of the Company, and prior to
the Take-Private Transaction, our general partner and its subsidiaries since August 30, 2017. Mr. Dugan previously served
as Executive Vice President, Engineering and Operations of our general partner and its subsidiaries from June 30, 2017 to
August 30, 2017 and served as the Senior Vice President, Engineering and Operations of our general partner and its
subsidiaries from January 2008 to June 30, 2017. Mr. Dugan joined TransMontaigne Inc. as Engineering Manager in 1998.
He has over 16 years of experience in senior leadership positions overseeing domestic and international petroleum marine
terminals, pipelines and engineering divisions. Mr. Dugan began his career as a Project Engineer for Gulf Interstate Energy
in 1983 and in 1993 he joined Louis Dreyfus Energy as a Project Engineer. He has served on the Board of Directors for the
International Liquid Terminals Association (ILTA) since 2011, and he holds certification through the American Petroleum
Institute.
Robert T. Fuller has served as Executive Vice President, Chief Financial Officer and Treasurer of the Company,
and prior to the Take-Private Transaction, our general partner and its subsidiaries since November of 2014. Prior to
November of 2014, Mr. Fuller served as Vice President and Chief Accounting Officer of our general partner and its
subsidiaries since January 2011 and as its Assistant Treasurer since February 2012. Prior to his affiliation with
TransMontaigne, Mr. Fuller spent 13 years as a certified public accountant with KPMG LLP. Mr. Fuller has a B.A. in
Political Science from Fort Lewis College and a M.S. in Accounting from the University of Colorado. Mr. Fuller is
licensed as a certified public accountant in Colorado and New York.
Michael A. Hammell has served as Executive Vice President, General Counsel and Secretary of the Company,
and prior to the Take-Private Transaction, our general partner and its subsidiaries since October 2012. Mr. Hammell served
as the Senior Vice President, Assistant General Counsel and Secretary of each of our general partner and the
TransMontaigne entities from July 2011 to October 2012; as Vice President, Assistant General Counsel and Secretary from
January 2011 to July 2011; as Vice President, Assistant General Counsel and Assistant Secretary from November 2007
until January 2011 and as Assistant General Counsel from April 2007 to November 2007. Prior to joining TransMontaigne,
Mr. Hammell practiced at the law firm of Hogan & Hartson LLP (now Hogan Lovells). Mr. Hammell received a B.S. in
Business Administration from the University of Colorado at Boulder and a J.D. from Northwestern University School of
Law.
Mark S. Huff has served as President of the Company, and prior to the Take-Private Transaction, our general
partner and its subsidiaries since August 2017. Mr. Huff served as Executive Vice President, Commercial Operations of our
general partner and its subsidiaries from September 2016 to August 2017 and prior thereto as Senior Vice President,
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Commercial Operations since returning to the Partnership in January 2015. Prior thereto he served as Director of Business
Development with Colonial Pipeline from November 2012 to January 2015 and as Managing Director of Vecenergy from
2008 to 2012. Mr. Huff was previously employed with a former affiliate of the Partnership from 1996 to 2007 where he
was responsible at various times for the business development and product marketing activities of TransMontaigne Partners
and its affiliates. Mr. Huff holds a B.S. in Nautical Science from the United States Merchant Marine Academy at Kings
Point, NY.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires the executive
officers and directors of our general partner, and persons who own more than ten percent of a registered class of our equity
securities (collectively, “Reporting Persons”) to file with the SEC and the NYSE initial reports of ownership and reports of
changes in ownership of our common units and our other equity securities. No Section 16(a) filings were required during
the relevant time period.
Committees of the Board of Directors and Management following the Take-Private Transaction
Prior to the Take-Private Transaction, the board of directors of our general partner had three standing committees:
an audit committee, a conflicts committee and a compensation committee. Following the Take-Private Transaction, we no
longer have a board of directors and are instead managed by our sole equity-holder. The Company is not required to have,
and does not have, a separately designated standing audit committee composed of independent directors, as its securities
are not listed on a national securities exchange that requires such independence. The Company has determined that it is not
necessary to designate, and has not designated, an “audit committee financial expert” as it is privately held and solely a
voluntary filer with the Securities and Exchange Commission following the Take-Private Transaction as required by the
covenants contained in the Company’s outstanding senior notes. As we do not have a board of directors, there are no
applicable board nomination procedures to report.
ITEM 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
We do not directly employ any of the persons responsible for the executive-level management of our business.
Instead, we are managed by ArcLight, and our executive officers are employees of an affiliate of ArcLight, TMC, which
also provides services to other ArcLight affiliates. As a result, we do not incur any direct compensation costs for our
executive officers. Prior to the TMS Contribution, in accordance with the Omnibus Agreement, we paid ArcLight and its
affiliates, an annual administration fee intended to compensate ArcLight and its affiliates for providing services related to
the management of our business, including services provided to us by our executive officers. Following the TMS
Contribution, pursuant to a services agreement, we pay TMC a fee intended to reimburse TMC for the services provided to
us by our executive officers (each of whom are employed by TMC). For additional information, refer to the discussion
under the heading “Certain Relationships and Related Transactions, and Director Independence Relationship and
Agreements With our Affiliates—TMS Contribution and TMC Services Agreement.”
Employment and Other Agreements
We have not entered into any employment agreements with any of our officers.
Compensation Committee Report
Following the Take-Private Transaction, we do not have a compensation committee.
COMPENSATION OF DIRECTORS
Following the Take-Private Transaction, we are managed by our sole equity-holder, TLP Finance, and we do not
have a board of directors.
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Prior to the Take-Private Transaction, employees of our general partner or its affiliates (including employees of
ArcLight and its affiliates) who also served as directors of our general partner did not receive additional compensation.
Pursuant to our independent director annual compensation program in place prior to the Take-Private Transaction, the
independent directors received annual compensation consisting of: (i) $60,000 annual cash retainer; paid quarterly in
arrears, and (ii) common units valued at $90,000 and issued pursuant to the TLP Management Services long-term incentive
plan, which common units were immediately vested and were not subject to forfeiture. For each annual award of common
units issued to the independent directors under the TLP Management Services long-term incentive plan prior to the Take-
Private Transaction, the awards were made on the third Friday of October (or the next trading day if the NYSE is closed),
based on the closing sales price during normal trading hours of the common units on the NYSE. In addition, each director
was reimbursed for out-of-pocket expenses in connection with attending meetings of the board of directors or committees.
In 2019, and as a result of the Take-Private Transaction closing on February 26, 2019, we paid the independent directors (i)
a pro rata portion of the annual cash retainer and (ii) the pro rata portion of the $90,000 compensation previously settled by
issuing common units pursuant to the TLP Management Services long-term incentive plan, settled in cash, in each case for
their services prior to the closing of the Take-Private Transaction. In addition, each of our independent directors received
additional compensation in connection with their review, evaluation, regulation, and approval of the Take-Private
Transaction, as duly approved by the board of directors of our general partner on July 27, 2018. For their additional
services in the fourth quarter of 2018 (paid in 2019) and 2019, Messrs. Blank and Wiese received an additional $144,055,
and Mr. Welch received an additional $166,555. No additional consideration was paid to the independent directors for
service on any committee of the board of directors of our general partner or for service as a committee chairperson unless
approved by the board in advance for a specific engagement or transaction.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Following the Take-Private Transaction, we do not have a compensation committee.
SAVINGS AND RETENTION PLAN
On February 26, 2016, the board of directors approved the savings and retention program, which constituted a
“program” under, and be subject to, the TLP Management Services long-term incentive plan in place prior to the Take-
Private Transaction, for employees who provide services with respect to our business. TLP Management Services LLC
(“TMS”) adopted an amended and restated savings and retention plan on February 25, 2019, which, among other items,
accounted for the closing of the Take-Private Transaction. The purpose of the plan is to provide for the reward and
retention of participants by providing them with awards that vest over future service periods. Following the Take-Private
Transaction, our executive officers no longer receive awards under the plan. Awards under the plan vest as to 50% of a
participant’s annual award on the first day of the month containing the second anniversary of the grant date and the
remaining 50% on the first day of the month containing the third anniversary of the grant date, subject to earlier vesting
upon a participant’s attainment of certain age or length of service thresholds as specified in the plan. Awards are payable as
to 50% of a participant’s annual award in the month containing the second anniversary of the grant date, and the remaining
50% in the month containing the third anniversary of the grant date, subject to earlier payment upon the participant’s
retirement after achieving the age or service thresholds, death or disability, involuntary termination without cause or
termination of a participant’s employment following a change in control, each as specified in the plan. The awards are
increased for the value of any accrued growth based on underlying “investments” deemed made with respect to the awards.
The awards (including any accrued growth relating thereto) are subject to forfeiture until the vesting date. The Take-Private
Transaction did not accelerate the vesting of any of the awards.
Pursuant to the provisions of the plan, once participating employees of TMS reach the age and length of service
thresholds set forth below, awards are immediately vested and become payable as set forth above, and such vested awards
remain subject to forfeiture as specified in the plan. A person will satisfy the age and length of service thresholds of the
plan upon the attainment of the earliest of (a) age sixty, (b) age fifty-five and ten years of service as an officer of TMS or
its affiliates, including us, or (c) age fifty and twenty years of service as an employee of TMS or its affiliates. Each of
Messrs. Boutin, Huff and Dugan have satisfied the age and length of service thresholds of the plan. Generally, only senior
level management employees of TMS receive awards under the savings and retention plan. Although no assets are
segregated or otherwise set aside with respect to a participant’s account, the amount ultimately payable to a
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participant shall be the amount credited to such participant’s account as if such account had been invested in some or all of
the investment funds selected by the plan administrator.
As a result of the TMS Contribution, we have assumed the employees and operational activities previously
provided by TMS, including liabilities with respect to awards granted under the savings and retention plan. In connection
with the Take-Private Transaction, the awards that were previously allocated to the common units fund (tracking the
performance of the Partnership’s common units on the New York Stock Exchange) were reallocated to a different
investment fund and will be settled in cash, rather than via the issuance of common units. For the vested awards paid in
2019, as a result of the Take-Private Transaction, the Company did not issue common units; instead the plan paid out an
aggregate cash amount of approximately $2.7 million, which included $467,087 for Mr. Boutin, $225,839 for Mr. Fuller,
$236,867 for Mr. Dugan, $204,917 for Mr. Hammell and $381,636 for Mr. Huff. Following the Take-Private Transaction
and the TMS Contribution, we index our award obligations to other forms of investments set forth in the plan and pay them
out in cash.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED UNITHOLDER MATTERS
As a result of the Take-Private Transaction, TLP Finance is the beneficial owner of 100 percent of our outstanding
equity interests.
EQUITY COMPENSATION PLAN INFORMATION
Following the Take-Private Transaction, the Company does not have an equity compensation plan.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
RELATIONSHIP AND AGREEMENTS WITH OUR AFFILIATES
Following the Take-Private Transaction, TLP Finance, an indirect controlled subsidiary of ArcLight, has acquired
100 percent of the equity interests in the Company, and the Company is no longer listed on the NYSE and our equity is no
longer publicly traded. Certain related party agreements and other related party transactions, in each case with ArcLight,
are set forth below.
TMS Contribution and TMC Services Agreement. Effective June 1, 2019, TLP Finance contributed all of the
issued and outstanding equity of its wholly-owned subsidiary, TLP Management Services LLC (“TMS” and such interest,
the “TMS Interest”) to the Company, and the Company immediately contributed the TMS Interest to its 100% owned
operating company subsidiary TransMontaigne Operating Company L.P. (the “TMS Contribution”). Prior to the TMS
Contribution, we had no employees and all of our management and operational activities were provided by TMS. Further,
TMS provided all payroll programs and maintained all employee benefits programs on behalf of our company with respect
to applicable TMS employees (as well as on behalf of certain other Arclight affiliates). As a result of the TMS
Contribution, we have assumed the employees and operational activities previously provided by TMS. The TMS
Contribution has been recorded at carryover basis as a reorganization of entities under common control. As such, prior
periods include the assets, liabilities, and results of operations of TMS for all periods presented.
As a result of the TMS Contribution, the omnibus agreement in place in various forms since the inception of the
Partnership, and immediately prior to the TMS Contribution between TMS and us, which, among other things, governed
the provision of management and operational services provided for us by TMS, is no longer relevant and was terminated.
Following the TMS Contribution, our executive officers who provide services to the Company are employed by
TMC, a wholly owned subsidiary of ArcLight, which also provides services to certain other ArcLight affiliates. As a
result, we do not directly employ any of the persons responsible for the executive management of our business.
Nonetheless, TMS continues to provide certain payroll functions and maintains all employee benefits programs on behalf
of TMC pursuant to a services agreement between TMC and TMS. Aggregate fees paid with respect to the
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services agreement for the years ended December 31, 2020, 2019 and 2018 were approximately $2.7 million, $0.8 million
and $nil, respectively.
Central Services. We manage and operate terminals that are owned by affiliates of ArcLight, including SeaPort
Midstream Partners, LLC in Seattle, Washington and Portland, Oregon and SeaPort Sound Terminal, LLC (“SeaPort
Sound”) in Tacoma, Washington and, in each case, receive a management fee based on our costs incurred. Aggregate
annual fees received with respect to services provided for SeaPort Midstream Partners, LLC for the years ended December
31, 2020, 2019 and 2018 were approximately $3.3 million, $3.4 million and $3.4 million, respectively. Aggregate annual
fees received with respect to services provided for SeaPort Sound for the years ended December 31, 2020, 2019, and 2018,
were approximately $7.7 million, $7.2 million and $0.7 million, respectively.
We also manage additional terminal facilities that are owned by affiliates of ArcLight, including Lucknow-
Highspire Terminals, LLC, which operates terminals throughout Pennsylvania encompassing approximately 9.9 million
barrels of storage capacity, and prior to July 1, 2019, a terminal in Baltimore, Maryland for Pike Baltimore Terminals, LLC
(the “Baltimore Terminal”), and receive a management fee based on our costs incurred. Our management of the Baltimore
terminal ended on July 1, 2019. Aggregate annual fees received with respect to services performed for Lucknow-Highspire
Terminals, LLC and the Baltimore Terminal for the years ended December 31, 2020, 2019 and 2018 were approximately
$1.3 million, $1.2 million and $0.1 million, respectively.
DIRECTOR INDEPENDENCE
Following the Take-Private Transaction, we are managed by our sole equity-holder, TLP Finance, an indirect
controlled subsidiary of ArcLight, and we do not have a board of directors.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Deloitte & Touche LLP is our independent auditor. Deloitte & Touche LLP’s accounting fees and services were as
follows:
Audit fees (1)
Comfort letter and consents
Audit-related fees
Tax fees
All other fees
Total accounting fees and services
2020
$ 815,000
2019
$ 785,000
—
—
—
—
$ 785,000
—
—
—
—
$ 815,000
(1) Represents an estimate of fees for professional services provided in connection with the annual audit of our financial
statements and the reviews of our quarterly financial statements, and other services provided by the auditor in connection
with statutory and regulatory filings.
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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(A) 1—The following documents are filed as a part of this Annual Report.
Part IV
1. Consolidated Financial Statements and Schedules. See the index to the consolidated financial statements of
TransMontaigne Partners LLC and its subsidiaries that appears under Item 8. “Financial Statements and
Supplementary Data” of this Annual Report.
2. Financial Statement Schedules. Financial statement schedules included in this Item 15 are the financial
statements of Battleground Oil Specialty Terminal Company LLC. Other schedules are omitted because they are
not required, are inapplicable or the required information is included in the financial statements or notes thereto.
3. Exhibits. A list of exhibits required by Item 601 of Regulation S-K to be filed as part of this Annual Report.
(A) 2— Battleground Oil Specialty Terminal Company LLC Financial Statements, with a Report of Independent
Registered Public Accounting Firm, as of December 31, 2020 and 2019 and for the Years ended December 31,
2020, 2019 and 2018.
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Members of
Battleground Oil Specialty Terminal Company LLC
Opinion on the Financial Statements
We have audited the accompanying statements of income, of members’ equity, and of cash flows of Battleground Oil
Specialty Terminal Company LLC (the “Company”) for the year ended December 31, 2018, including the related notes
(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material
respects, the results of operations and cash flows of the Company for the year ended December 31, 2018 in conformity
with accounting principles generally accepted in the United States of America.
The accompanying balance sheets of the Company as of December 31, 2020 and 2019, and the related statements of
income, of members’ equity, and of cash flows for each of two years in the period ended December 31, 2020 are presented
for purposes of complying with Rule 3-09 of SEC Regulation S-X; however, Rule 3-09 does not require the 2020 and 2019
financial statements to be audited and they are therefore not covered by this report.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the
Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to
the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.
We conducted our audit of these financial statements in accordance with the standards of the PCAOB and in accordance
with auditing standards generally accepted in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a
test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Significant Transactions with Related Parties
As discussed in Note 4 to the financial statements, the Company has entered into significant transactions with its member,
Kinder Morgan Battleground Oil, LLC and other affiliated companies, whom are related parties.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
February 26, 2021
We have served as the Company's auditor since 2013.
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
STATEMENTS OF INCOME
(In thousands)
Revenues
Operating Costs and Expenses
Operations and maintenance
Operations and maintenance-affiliate
Depreciation and amortization
General and administrative
General and administrative-affiliate
Taxes other than income taxes
Total Operating Costs and Expenses
Operating Income
Other Income
Income Before Income Taxes
Income Tax Expense
Net Income
Year Ended December 31,
2020 (a) 2019 (a)
2018
$ 64,575
$ 60,751
$ 66,288
11,843
11,016
20,222
117
3,730
7,134
54,062
13,963
10,826
19,123
—
3,621
6,940
54,473
13,362
10,682
18,682
—
3,506
5,695
51,927
10,513
6,278
14,361
237
565
19
10,750
6,843
14,380
(91)
(125)
(85)
$ 10,659
$
6,718
$ 14,295
(a) This information is not covered by the Report of Independent Registered Public Accounting Firm.
The accompanying notes are an integral part of these financial statements.
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
BALANCE SHEETS
(In thousands)
ASSETS
Current assets
Cash and cash equivalents
Accounts receivable
Inventories
Other current assets
Total current assets
Property, plant and equipment, net
Lease asset
Total Assets
LIABILITIES AND MEMBERS' EQUITY
Current liabilities
Accounts payable
Accrued taxes, other than income taxes
Other current liabilities
Total current liabilities
Long-term liabilities
Contract liabilities
Lease liabilities
Total long-term liabilities
Total liabilities
Commitments and contingencies (Notes 6 and 7)
Members' Equity
Total Liabilities and Members' Equity
$
$
$
December 31,
2020 (a)
2019 (a)
$
$
$
12,108
2,350
1,256
108
15,822
459,958
5,013
480,793
9,627
7,095
821
17,543
602
4,874
5,476
23,019
4,443
4,256
1,265
2,514
12,478
458,857
5,228
476,563
11,429
544
1,634
13,607
930
5,106
6,036
19,643
457,774
480,793
$
456,920
476,563
$
(a) This information is not covered by the Report of Independent Registered Public Accounting Firm.
The accompanying notes are an integral part of these financial statements.
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
STATEMENTS OF CASH FLOWS
(In thousands)
Cash Flows From Operating Activities
Net income
Adjustments to reconcile net income to net cash provided by operating
activities:
2020 (a)
Year Ended December 31,
2019 (a)
2018
$
10,659
$
6,718
$
14,295
18,682
527
(2,318)
756
(3,186)
(129)
(3,153)
3,161
624
29,259
(4,404)
3
(4,401)
—
(29,516)
(29,516)
(4,658)
18,716
14,058
Depreciation and amortization
Other non-cash items
Changes in components of working capital:
Accounts receivable
Inventories
Accounts payable
Accrued taxes, other than income taxes
Accrued dredging service costs
Other current assets and liabilities
Other long-term assets and liabilities
Net Cash Provided by Operating Activities
Cash Flows From Investing Activities
Capital expenditures
Other
Net Cash Used in Investing Activities
Cash Flows From Financing Activities
Contributions from Members
Distributions to Members
Net Cash Used in Financing Activities
20,222
603
1,797
9
(561)
6,551
—
1,684
(328)
40,636
(23,223)
57
(23,166)
17,067
(26,872)
(9,805)
19,123
639
(983)
(358)
470
(4,996)
—
(945)
(326)
19,342
(17,606)
—
(17,606)
8,948
(20,299)
(11,351)
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents, beginning of period
Cash and Cash Equivalents, end of period
Non-cash Investing and Financing Activities
Right-of-use (ROU) assets and operating lease obligations recognized
(Note 6)
Net increases in property, plant and equipment accruals
7,665
4,443
12,108
$
(9,615)
14,058
4,443
$
— $
$
5,031
5,437
2,243
$
$
(a) This information is not covered by the Report of Independent Registered Public Accounting Firm.
The accompanying notes are an integral part of these financial statements.
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
STATEMENTS OF MEMBERS' EQUITY
(In thousands)
Class A
Class B
Total
unitholders
Balance at December 31, 2017
Net income
Distributions
Balance at December 31, 2018
Net income(a)
Contributions(a)
Distributions(a)
Balance at December 31, 2019(a)
Net income(a)
Contributions(a)
Distributions(a)
Balance at December 31, 2020(a)
$
unitholders
476,774
13,332
(28,553)
461,553
6,008
8,948
(19,589)
456,920
9,718
17,067
(25,931)
457,774
$
$
$
— $
unitholders
476,774
14,295
(29,516)
461,553
6,718
8,948
(20,299)
456,920
10,659
17,067
(26,872)
457,774
963
(963)
—
710
—
(710)
—
941
—
(941)
— $
(a) This information is not covered by the Report of Independent Registered Public Accounting Firm.
The accompanying notes are an integral part of these financial statements.
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019 (not covered by the Report of Independent Registered Public Accounting Firm), and
2018
1. General
We are a Delaware limited liability company, formed on May 26, 2011. When we refer to “us,” “we,” “our,” “the
Company,” or “BOSTCO,” we are describing Battleground Oil Specialty Terminal Company LLC.
The Members' interests in us (collectively referred to as the Class A Members) are as follows:
● 55.0% - Kinder Morgan Battleground Oil, LLC (KM Battleground Oil), a subsidiary of Kinder Morgan, Inc.
(KMI);
● 42.5% - TransMontaigne Operating Company L.P. (TransMontaigne), a wholly owned subsidiary of
TransMontaigne Partners L.P.; and
● 2.5% - Tauber Terminals, L.P. (Tauber), a Texas limited partnership.
In addition, we have Class B member interests further described in Note 4.
We own and operate a terminal facility that has 7.1 million barrels of distillate, residual fuel and other black oil
product storage at a Houston Ship Channel site. The facility also has deep draft docks and high speed pumps.
2. Summary of Significant Accounting Policies
Basis of Presentation
We have prepared our accompanying financial statements in accordance with the accounting principles contained in
the Financial Accounting Standards Board's Accounting Standards Codification (ASC), the single source of United States
Generally Accepted Accounting Principles and referred to in this report as the Codification. Additionally, certain amounts
from prior years have been reclassified to conform to the current presentation.
Management has evaluated subsequent events through February 26, 2021, the date the financial statements were
available to be issued.
Coronavirus Diseases 2019 (COVID-19)
The COVID-19 pandemic-related reduction in energy demand and the dramatic decline in commodity prices that
began in the first quarter of 2020 has continued to cause disruptions and volatility. Sharp declines in the supply of and
demand for energy related commodities due to the economic shutdown in the wake of the pandemic also affected the
energy industry during 2020, and continues to do so. Further, significant uncertainty remains regarding the duration and
extent of the impact of the pandemic (including the timing and distribution of vaccines) on the energy industry, including
demand and prices for refined products.
Use of Estimates
Certain amounts included in or affecting our financial statements and related disclosures must be estimated, requiring
us to make certain assumptions with respect to values or conditions which cannot be known with certainty at the time our
financial statements are prepared. These estimates and assumptions affect the amounts we report for assets and liabilities,
our revenues and expenses during the reporting period, and our disclosures, including as it relates to contingent assets and
liabilities at the date of our financial statements. We evaluate these estimates on an ongoing basis, utilizing historical
experience, consultation with experts and other methods we consider reasonable in the particular circumstances.
Nevertheless, actual results may differ significantly from our estimates. Any effects on our business, financial position or
results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise
to the revision become known.
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019 (not covered by the Report of Independent Registered Public Accounting Firm), and
2018
Certain accounting policies are of more significance in our financial statement preparation process than others, and set
out below are the principal accounting policies we apply in the preparation of our financial statements.
Cash and cash Equivalents
We define cash equivalents as all highly liquid short-term investments with original maturities of three months or less.
Allowance for Credit Losses
Effective with our adoption of Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments–Credit
Losses” on January 1, 2020, we evaluate our financial assets measured at amortized cost and off-balance sheet credit
exposures for expected credit losses over the contractual term of the asset or exposure. We consider available information
relevant to assessing the collectability of cash flows including the expected risk of credit loss even if that risk is remote.
We measure expected credit losses on a collective (pool) basis when similar risk characteristics exist and we reflect the
expected credit losses on the amortized cost basis of the financial asset as of the reporting date.
Our financial instruments primarily consist of our accounts receivable from customers. We utilized historical analysis
of credit losses experienced over the previous five years along with current conditions and reasonable and supportable
forecasts of future conditions in our evaluation of collectability of our financial assets.
Prior to the adoption of ASU No. 2016-13, generally our evaluation of appropriate reserves for our accounts receivable
was based on a historical analysis of uncollected amounts and we recorded adjustments for changed circumstances and
customer-specific information.
As of December 31, 2020 and 2019, we had none and $109,000, respectively, of allowance for credit losses which is
included in “Other current assets” in our accompanying Balance Sheets.
Inventories
Our inventories, which consist of consumable spare parts used in the operations of the facilities, are valued at
weighted-average cost, and we periodically review for physical deterioration and obsolescence.
Property, Plant and Equipment, net
Our property, plant and equipment is recorded at its original cost of construction or, upon acquisition, at the fair value
of the assets acquired. For constructed assets, we capitalize all construction-related direct labor and material costs, as well
as indirect construction costs. The indirect capitalized labor and related costs are based upon estimates of time spent
supporting construction projects. We expense costs for routine maintenance and repairs in the period incurred.
We use the straight-line method to depreciate property, plant and equipment over the estimated useful life for each
asset. The cost of property, plant and equipment sold or retired and the related depreciation are removed from the balance
sheet in the period of sale or disposition. Gains or losses resulting from property sales or dispositions are recognized in the
period incurred. We generally include gains or losses in “Operations and maintenance” on our accompanying Statements of
Income.
Asset Retirement Obligations (ARO)
We record liabilities for obligations related to the retirement and removal of long-lived assets used in our businesses.
We record, as liabilities, the fair value of ARO on a discounted basis when they are incurred and can be reasonably
estimated, which is typically at the time the assets are installed or acquired. Amounts recorded for the related assets are
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019 (not covered by the Report of Independent Registered Public Accounting Firm), and
2018
increased by the amount of these obligations. Over time, the liabilities increase due to the change in their present value, and
the initial capitalized costs are depreciated over the useful lives of the related assets. The liabilities are eventually
extinguished when the asset is taken out of service.
We are required to operate and maintain our assets, and intend to do so as long as supply and demand for such services
exists, which we expect for the foreseeable future. Therefore, we believe that we cannot reasonably estimate the ARO for
the substantial majority of our assets because these assets have indeterminate lives. We continue to evaluate our ARO and
future developments could impact the amounts we record. We had no ARO recorded as of December 31, 2020 and 2019.
Long-lived Asset Impairments
We evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the carrying
values may not be recovered. These events include changes in the manner in which we intend to use a long-lived asset,
decisions to sell an asset and adverse changes in market conditions or in the legal or business environment such as adverse
actions by regulators. If an event occurs, which is a determination that involves judgment, we evaluate the recoverability of
the carrying value of our long-lived asset based on the long-lived asset's ability to generate future cash flows on an
undiscounted basis. If an impairment is indicated, or if we decide to sell a long-lived asset or group of assets, we adjust the
carrying value of the asset downward, if necessary, to its estimated fair value.
Our fair value estimates are generally based on assumptions market participants would use, including market data
obtained through the sales process or an analysis of expected discounted future cash flows. There were no impairments for
the years ended December 31, 2020, 2019 and 2018.
Revenue Recognition
The majority of our revenues are accounted for under ASC 606, Revenue from Contracts with Customers; however, to
a limited extent, some revenues are accounted for under other guidance such as ASC 842, Leases.
Revenue from Contracts with Customers
We review our contracts with customers using the following steps to recognize revenue based on the transfer of goods
or services to customers and in amounts that reflect the consideration the company expects to receive for those goods or
services. The steps include: (i) identify the contract; (ii) identify the performance obligations of the contract; (iii)
determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and then
(v) recognize revenue when (or as) the performance obligation is satisfied. Each of these steps involves management
judgment and an analysis of the contract’s material terms and conditions.
Our customer services contracts primarily include terminaling service contracts, as described below. Generally, for the
majority of these contracts: (i) our promise is to transfer (or stand ready to transfer) a series of distinct integrated services
over a period of time, which is a single performance obligation; (ii) the transaction price includes fixed and/or variable
consideration, which amount is determinable at contract inception and/or at each month end based on our right to invoice at
month end for the value of services provided to the customer that month; and (iii) the transaction price is recognized as
revenue over the service
period specified in the contract (which can be a day, including each day in a series of promised daily services, a month,
a year, or other time increment, including a deficiency makeup period) as the services are rendered using a time-based
(passage of time) or units-based (units of service transferred) output method for measuring the transfer of control of the
services and satisfaction of our performance obligation over the service period, based on the nature of the promised service
(e.g., firm or non-firm) and the terms and conditions of the contract.
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019 (not covered by the Report of Independent Registered Public Accounting Firm), and
2018
Firm Services
Firm services (also called uninterruptible services) are services that are promised to be available to the customer at all
times during the period(s) covered by the contract, with limited exceptions. Our firm service contracts are typically
structured with take-or-pay provisions. In these arrangements, the customer is obligated to pay for services associated with
its take-or-pay obligation regardless of whether or not the customer chooses to utilize the service in that period. Because
we make the service continuously available over the service period, we recognize the take-or-pay amount as revenue
ratably over such period based on the passage of time.
Non-Firm Services
Non-firm services (also called interruptible services) are the opposite of firm services in that such services are
provided to a customer on an “as available” basis. Generally, we do not have an obligation to perform these services until
we accept a customer’s periodic request for service. For the majority of our non-firm service contracts, the customer will
pay only for the actual quantities of services it chooses to receive or use, and we typically recognize the transaction price as
revenue as those units of service are transferred to the customer in the specified service period (typically a daily or monthly
period).
Contract Balances
Contract assets and contract liabilities are the result of timing differences between revenue recognition, billings and
cash collections. Our contract liabilities are substantially related to (i) consideration received from customers in
connection with the resolution of a customer dispute and (ii) other items paid for in advance by certain customers generally
in our non-regulated businesses, which we subsequently recognize as revenue on a straight-line basis over the initial term
of the related customer contracts.
Refer to Note 5 for further information.
Operations and Maintenance
Operations and maintenance includes $2,753,000, $1,147,000, and $3,789,000 of amortized dredging service costs for
the years ended December 31, 2020, 2019 and 2018, respectively. Actual dredging services costs are capitalized and
included in “Other current assets” on our accompanying Balance Sheets. The capitalized dredging costs are amortized until
the next expected dredging operation (an approximate 12 to 24-month period). We use the straight-line method to amortize
dredging service costs.
Environmental Matters
We capitalize or expense, as appropriate, environmental expenditures. We capitalize certain environmental
expenditures required to obtain rights-of-way, regulatory approvals or permitting as part of the construction of facilities we
use in our business operations. We accrue and expense environmental costs that relate to an existing condition caused by
past operations, which do not contribute to current or future revenue generation. We generally do not discount
environmental liabilities to a net
present value, and we record environmental liabilities when environmental assessments and/or remedial efforts are
probable and we can reasonably estimate the costs. Generally, our accrual of these environmental liabilities coincides with
either our completion of a feasibility study or our commitment to a formal plan of action. We recognize receivables for
anticipated associated insurance recoveries when such recoveries are deemed to be probable.
We routinely conduct reviews of potential environmental issues and claims that could impact our assets or operations.
These reviews assist us in identifying environmental issues and estimating the costs and timing of remediation efforts. We
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019 (not covered by the Report of Independent Registered Public Accounting Firm), and
2018
also routinely adjust our environmental liabilities to reflect changes in previous estimates. In making environmental
liability estimations, we consider the material effect of environmental compliance, pending legal actions against us, and
potential third-party liability claims we may have against others. Often, as the remediation evaluation and effort progresses,
additional information is obtained, requiring revisions to estimated costs. These revisions are reflected in our income in the
period in which they are reasonably determinable.
We are subject to environmental cleanup and enforcement actions from time to time. In particular, the Comprehensive
Environmental Response, Compensation and Liability Act generally imposes joint and several liability for cleanup and
enforcement costs on current and predecessor owners and operators of a site, among others, without regard to fault or the
legality of the original conduct, subject to the right of a liable party to establish a “reasonable basis” for apportionment of
costs. Our operations are also subject to federal, state and local laws and regulations relating to protection of the
environment. Although we believe our operations are in substantial compliance with applicable environmental laws and
regulations, risks of additional costs and liabilities are inherent in our operations, and there can be no assurance that we will
not incur significant costs and liabilities. Moreover, it is possible that other developments could result in substantial costs
and liabilities to us, such as increasingly stringent environmental laws, regulations and enforcement policies under the
terms of authority of those laws, and claims for damages to property or persons resulting from our operations.
Although it is not possible to predict the ultimate outcomes, we believe that the resolution of the environmental
matters, and other matters to which we are a party, will not have a material adverse effect on our business, financial
position, results of operations or cash flows. We had no accruals for any outstanding environmental matters as of December
31, 2020 and 2019.
Leases
Lessee
We lease property at the Port of Houston. Our lease has a remaining lease term of 16 years. We determine if an
arrangement is a lease at inception or upon modification. For purposes of calculating operating lease liabilities, lease terms
may be deemed to include options to extend or terminate the lease when it is reasonably certain that we will exercise that
option.
Beginning January 1, 2019, operating ROU assets and operating lease liabilities are recognized based on the present
value of lease payments over the lease term at commencement date. Operating leases in effect prior to January 1, 2019
were recognized at the present value of the remaining payments on the remaining lease term as of January 1, 2019. Leases
with variable rate adjustments, such as Consumer Price Index (CPI) adjustments, were reflected based on contractual lease
payments as outlined within the lease agreement and exclude CPI adjustments. Because most of our leases do not provide
an explicit rate of return, we use an incremental secured borrowing rate based on lease term information available at the
commencement date of the lease in determining the present value of lease payments. Real estate lease agreements with
lease and non-lease components are accounted for separately by component. Leases that were grandfathered under various
portions of ASC 842, Leases such as land easements, are reassessed when agreements are modified.
Refer to Note 6 for further information.
Income Taxes
We are a limited liability company that is treated as a partnership for income tax purposes and are not subject to
federal or state income taxes. Accordingly, no provision for federal or state income taxes has been recorded in our financial
statements. The tax effects of our activities accrue to our Members who report on their individual federal income tax
returns their share of revenues and expenses. However, we are subject to Texas margin tax (a revenue based calculation),
which is presented as “Income Tax Expense” on our accompanying Statements of Income.
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019 (not covered by the Report of Independent Registered Public Accounting Firm), and
2018
3. Property, Plant and Equipment, net
Our property, plant and equipment, net consisted of the following:
Terminal and storage facilities
Buildings
Other support equipment
Accumulated depreciation and amortization
Land
Construction work in process
Property, plant and equipment, net
4. Related Party Transactions
Useful Life in
Years
5 - 40
5 - 30
1 - 30
December 31,
2020
2019
(In thousands)
$
$
478,509
13,132
76,641
(129,997)
438,285
13,167
8,506
459,958
$ 447,758
12,955
77,214
(111,016)
426,911
13,168
18,778
$ 458,857
Limited Liability Company Agreement (LLC Agreement)
Our profits and losses, and cash distributions are allocated, and made within 45 days after the end of each quarter, on a
pro-rata basis to our Members in accordance with their equity percentage interests and profit interests, subject to other
conditions as defined in the LLC Agreement. The Class A and Class B Members share in our profits and losses on a 96.5%
and 3.5% pro-rata basis, respectively. Class B Member interests are not required to make capital contributions in order to
maintain their profit interests. Class A units outstanding as of both December 31, 2020 and 2019 were 14,914,900. Class B
units outstanding as of both December 31, 2020 and 2019 were 700.
Changes and amendments to the terms of the LLC Agreement, including its provisions regarding the approval of
additional capital contributions, require both KM Battleground Oil and TransMontaigne approvals pursuant to the LLC
Agreement. Class A and Class B Members have other rights, preferences, restrictions, obligations, and limitations,
including limitations as to the transfer of ownership interests.
Affiliate Agreement
Pursuant to the operations and reimbursement agreement, KM Battleground Oil operates our terminal facility and we
pay them a service fee. The service fee for the years ended December 31, 2020, 2019 and 2018 was approximately
$1,736,000, $1,702,000 and $1,657,000, respectively, and is reflected in “Operations and maintenance” on our
accompanying Statements of Income.
Other Affiliate Balances and Activities
We do not have employees. Employees of KMI provide services to us. In accordance with our governance documents,
we reimburse KMI at cost.
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019 (not covered by the Report of Independent Registered Public Accounting Firm), and
2018
The following table summarizes our balance sheet affiliate balances:
December 31,
Accounts receivable
Accounts payable
2020 2019
(In thousands)
2 $
$
3
1,321
1,807
The following table shows revenues and other costs from our affiliates not presented separately on the
accompanying financial statements:
Year Ended December 31,
2018
2019
2020
Revenues
Capitalized costs
Subsequent Events
$ —
484
(In thousands)
$ 931
257
$ 802
27
In January 2021, we made cash distributions to our Class A and B Members totaling $5,598,000, and received
cash contributions from Class A Members of $2,136,000.
5. Revenue Recognition
Nature of Revenue
We provide various types of liquid tank services. These services are generally comprised of inbound, storage and
outbound handling of customer products.
Our liquids tank storage and handling service contracts that include a promised tank storage capacity provision and
prepaid volume throughput of the stored product. The handling services we provide generally include blending and
mixing, throughput movements, and ancillary services for residual fuel and diesel. In these firm service contracts, we have
a stand-ready obligation to perform this contracted service each day over the life of the contract. The customer pays a
transaction price typically in the form of a fixed monthly charge and is obligated to pay whether or not it uses the storage
capacity and throughput service (i.e., a take-or-pay payment obligation). These contracts generally include a per-unit rate
for any quantities we handle at the request of the customer in excess of the prepaid volume throughput amount and also
typically include per-unit rates for additional, ancillary services that may be periodically requested by the customer.
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019 (not covered by the Report of Independent Registered Public Accounting Firm), and
2018
Disaggregation of Revenues
The following table present our revenues disaggregated by revenue source and type of revenue for each revenue
source:
Revenues from contracts with customers
Services
Firm services(a)
Fee-based services
Total services
Commodity sales
Product sales
Total commodity sales
Total revenues from contracts with customers
Lease revenue
Total revenues
Year Ended December 31,
2020
2019
2018
(In thousands)
$
$
51,803 $
9,189
60,992
49,939
10,785
60,724
—
—
60,992
3,583
64,575 $
—
—
60,724
27
60,751
$
$
55,436
10,737
66,173
89
89
66,262
26
66,288
(a)
Includes non-cancellable firm service customer contracts with take-or-pay, including those contracts where both the price and
quantity amount are fixed.
Contract Balances
We did not have any contract assets as of December 31, 2020 and 2019. As of December 31, 2020 and 2019, our
contract liability balances were $931,000 and $1,878,000, respectively. Of the contract liability balance at December 31,
2019, $947,000 was recognized as revenue during the year ended December 31, 2020.
Revenue Allocated to Remaining Performance Obligations
The following table presents our estimated revenue allocated to remaining performance obligations for contracted
revenue that has not yet been recognized, representing our “contractually committed” revenue as of December 31, 2020
that we will invoice or transfer from contract liabilities and recognize in future periods:
Year
2021
2022
2023
2024
Total
Estimated
Revenue
(In thousands)
50,151
$
24,431
20,068
11,033
105,683
$
Our contractually committed revenue, for purposes of the tabular presentation above, is generally limited to service
customer contracts which have fixed pricing and fixed volume terms and conditions, generally including contracts with
take-or-pay payment obligations. Our contractually committed revenue amounts generally exclude, based on the following
practical expedient that we elected to apply, remaining performance obligations for contracts with variable volume
attributes in which such variable consideration is allocated entirely to a wholly unsatisfied performance obligation.
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019 (not covered by the Report of Independent Registered Public Accounting Firm), and
2018
Major Customers
The following table presents revenues from our largest customers, each of which exceeded 10% of our revenues
as determined for each year individually and irrespective of the other periods presented below:
Revenues from largest customer (number one)
Revenues from largest customer (number two)
Revenues from largest customer (number three)
Revenues from largest customer (number four)
Revenues from largest customer (number five)
6. Leases
Following are components of our lease cost:
$
Year Ended December 31,
2020
2019
13,221 $
11,814
9,748
9,056
6,920
(In thousands)
10,502
9,765
8,862
7,549
7,546
$
2018
14,169
12,881
10,452
9,255
Year Ended
December 31,
2020
2019
Operating leases
Short-term and variable leases
Total lease cost
$
$
Other information related to our operating leases are as follows:
$
(In thousands)
470
34
504
$
470
16
486
Operating cash flows from operating leases
Amortization of ROU assets
Weighted average remaining lease term
Weighted average discount rate
Amounts recognized in our accompanying Balance Sheets are as follows:
Lease Activity
Balance sheet location
ROU assets
Short-term lease liability
Long-term lease liability
Lease asset
Other current liabilities
Lease liabilities
98
Year Ended December 31,
2019
2020
(In thousands, except lease term
and discount rate)
$
(504) $
215
16 years
4.74%
(486)
209
17 years
4.74 %
Year Ended
December 31,
2020
2019
(In thousands)
$ 5,013
139
4,874
$ 5,228
122
5,106
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019 (not covered by the Report of Independent Registered Public Accounting Firm), and
2018
Operating lease liabilities under non-cancellable leases (excluding short-term leases) as of December 31, 2020 are
as follows:
Year
2021
2022
2023
2024
2025
Thereafter
Total lease payments
Less: Interest
Present value of lease liabilities
7. Litigation
Commitment
(In thousands)
$
389
400
412
425
438
5,771
7,835
(2,822)
5,013
$
We are party to various legal, regulatory and other matters arising from the day-to-day operations of our business that
may result in claims against the Company. Although no assurance can be given, we believe, based on our experiences to
date and taking into account established reserves, that the ultimate resolution of such items will not have a material adverse
impact on our business. We believe we have meritorious defenses to the matters to which we are a party and intend to
vigorously defend the Company. When we determine a loss is probable of occurring and is reasonably estimable, we accrue
an undiscounted liability for such contingencies based on our best estimate using information available at that time. If the
estimated loss is a range of potential outcomes and there is no better estimate within the range, we accrue the amount at the
low end of the range. We disclose contingencies where an adverse outcome may be material, or in the judgment of
management, we conclude the matter should otherwise be disclosed.
Legal Proceedings
Vandaven Johnson Personal Injury Claim
Vandaven Johnson, an employee of Petro-Chem Services, filed a lawsuit in the 295th Judicial District for Harris
County, Texas against BOSTCO and certain other defendants in which the plaintiff alleges that he incurred personal
injuries in connection with an incident which is alleged to have occurred on April 12, 2017 while the plaintiff was walking
down a temporary gangway on BOSTCO’s premises from the barge dock to a tanker. Plaintiff alleges that the gangway
was placed at an unreasonably steep angle, had an inadequate handrail, and that a vertical support or stanchion failed,
causing him to fall from the gangway to the deck of the tanker. Plaintiff alleges injuries to his neck and back and claims to
be permanently disabled. Plaintiff subsequently amended his petition to add the manufacturer and distributor of the
gangway as defendants. Plaintiff seeks damages of $3.5 million collectively against all defendants inclusive of alleged
current and future medical expenses, pain and suffering, and lost wages. The trial court determined that maritime law
applies. If this finding is upheld on appeal, any liable defendant can be held jointly and severally liable for the full
judgment amount but then has a right to collect contribution from all other liable defendants for their percentage share. A
jury trial was most recently scheduled to occur on January 7, 2021 but was postponed indefinitely due to COVID-19
protocols. BOSTCO estimates plaintiff’s damages to be considerably less than those claimed in the lawsuit. We believe we
have meritorious arguments and we intend to continue to vigorously defend the lawsuit.
99
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BATTLEGROUND OIL SPECIALTY TERMINAL COMPANY LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019 (not covered by the Report of Independent Registered Public Accounting Firm), and
2018
Customer Dispute
In January 2018, we settled a dispute with a customer for $1,642,000 related to the commencement of operations. The
settlement was implemented as part of an amendment to the original services agreement, in which our settlement obligation
was a component of the transaction price for the amended services arrangement. Accordingly, effective from November
2018, we are recognizing the amount as a reduction to revenues over the 5-year term of the amended services agreement as
we fulfill the contractual performance obligations.
General
As of December 31, 2020 and 2019, we had $320,000 accrued for our outstanding legal proceedings.
100
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(A) 3—EXHIBITS:
Exhibit
Number
Description
2.1
2.2
2.3
2.4
3.1
3.2
3.3
3.4
3.5
4.1
4.2
Facilities Sale Agreement, dated as of December 29, 2006, by and between TransMontaigne Product
Services LLC (formerly known as TransMontaigne Product Services Inc.) and TransMontaigne
Partners L.P. (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed by
TransMontaigne Partners L.P. with the SEC on January 5, 2007).
Facilities Sale Agreement, dated as of December 28, 2007, by and between TransMontaigne Product
Services LLC and TransMontaigne Partners L.P. (incorporated by reference to Exhibit 2.1 of the Current
Report on Form 8-K filed by TransMontaigne Partners L.P. with the SEC on January 3, 2008).
Agreement and Plan of Merger, dated as of November 25, 2018, by and among TLP Finance Holdings,
LLC, TLP Acquisition Holdings, LLC, TLP Equity Holdings, LLC, TLP Merger Sub, LLC,
TransMontaigne Partners L.P. and TransMontaigne GP L.L.C. (incorporated by reference to Exhibit 2.1
of the Current Report on Form 8-K filed by TransMontaigne Partners L.P. with the SEC on November
26, 2018).
Agreement and Plan of Merger, dated as of February 26, 2019, by and between TransMontaigne
Partners LLC and TransMontaigne GP L.L.C. (incorporated by reference to Exhibit 1.1 of the Current
Report on Form 8-K filed by TransMontaigne Partners LLC with the SEC on February 28, 2019).
Certificate of Formation of TransMontaigne Partners LLC, dated February 26, 2019 (incorporated by
reference to Exhibit 3.3 of the Current Report on Form 8-K filed by TransMontaigne Partners LLC with
the SEC on February 28, 2019).
Limited Liability Company Agreement of TransMontaigne Partners LLC, dated February 26, 2019
(incorporated by reference to Exhibit 3.4 of the Current Report on Form 8-K filed by TransMontaigne
Partners LLC with the SEC on February 28, 2019).
Certificate of Merger of TLP Merger Sub, LLC into TransMontaigne Partners L.P., effective as of
February 26, 2019 (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed by
TransMontaigne Partners LLC with the SEC on February 28, 2019).
Certificate of Conversion of TransMontaigne Partners L.P. into TransMontaigne Partners LLC, effective
as of February 26, 2019 (incorporated by reference to Exhibit 3.2 of the Current Report on Form 8-K
filed by TransMontaigne Partners LLC with the SEC on February 28, 2019).
Certificate of Merger of TransMontaigne GP L.L.C. into TransMontaigne Partners LLC, effective as of
February 26, 2019 (incorporated by reference to Exhibit 3.5 of the Current Report on Form 8-K filed by
TransMontaigne Partners LLC with the SEC on February 28, 2019).
Indenture, dated February 12, 2018, among TransMontaigne Partners L.P., TLP Finance Corp. and U.S.
Bank National Association (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K
filed by TransMontaigne Partners L.P. with the SEC on February 12, 2018).
First Supplemental Indenture, dated as of February 12, 2018, among TransMontaigne Partners L.P., TLP
Finance Corp., the guarantors named therein and U.S. Bank National Association (incorporated by
reference to Exhibit 4.1 of the Current Report on Form 8-K filed by TransMontaigne Partners L.P. with
the SEC on February 12, 2018).
101
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Exhibit
Number
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
Description
Third Amended and Restated Senior Secured Credit Facility, dated March 13, 2017, among
TransMontaigne Operating Company L.P., as borrower, Wells Fargo Bank, National Association, as
Administrative Agent, US Bank, National Association, as Syndication Agent, Joint Lead Arranger and
Joint Book Runner, Bank of America, N.A., Citibank, N.A., MUFG Union Bank N.A. and Royal Bank
of Canada, each as Documentation Agents, Wells Fargo Securities, LLC, as Joint Lead Arranger and
Joint Lead Book Runner, and the other financial institutions a party thereto (incorporated by reference to
Exhibit 10.1 of the Annual Report on Form 10-K filed by TransMontaigne Partners L.P. with the SEC
on March 14, 2017).
Contribution, Conveyance and Assumption Agreement, dated May 27, 2005, by and among
TransMontaigne LLC, TransMontaigne Partners L.P., TransMontaigne GP L.L.C., TransMontaigne
Operating GP L.L.C., TransMontaigne Operating Company L.P., TransMontaigne Product Services LLC
and Coastal Fuels Marketing, Inc., Coastal Terminals L.L.C., Razorback L.L.C., TPSI Terminals L.L.C.
and TransMontaigne Services LLC. (incorporated by reference to Exhibit 10.2 of the Annual Report on
Form 10-K filed by TransMontaigne Partners L.P. with the SEC on September 13, 2005).
Terminaling Services Agreement—Southeast and Collins/Purvis, dated January 1, 2008, between
TransMontaigne Partners L.P. and Morgan Stanley Capital Group Inc., as amended (assigned in part to
NGL Energy Partners LP on July 1, 2014) (incorporated by reference to Exhibit 10.16 of the Annual
Report on Form 10 K filed by TransMontaigne Partners L.P. with the SEC on March 10, 2008). Certain
portions of this exhibit have been omitted and filed separately with the Commission pursuant to a
request for confidential treatment under Rule 24b 2 as promulgated under the Securities Exchange Act
of 1934.
Sixth Amendment to Terminaling Services Agreement—Southeast and Collins/Purvis, dated July 16,
2013, between TransMontaigne Partners L.P. and Morgan Stanley Capital Group Inc. (assigned in part to
NGL Energy Partners LP on July 1, 2014) (incorporated by reference to Exhibit 10.1 of the Current
Report on Form 8 K filed by TransMontaigne Partners L.P. with the SEC on July 17, 2013).
Seventh Amendment to Terminaling Services Agreement—Southeast and Collins/Purvis, dated
December 20, 2013, between TransMontaigne Partners L.P. and Morgan Stanley Capital Group Inc.
(assigned in part to NGL Energy Partners LP on July 1, 2014) (incorporated by reference to Exhibit 10.1
of the Current Report on Form 8 K filed by TransMontaigne Partners L.P. with the SEC on December
23, 2013).
Eighth Amendment to Terminaling Services Agreement—Southeast and Collins/Purvis, dated
November 4, 2014, between TransMontaigne Partners L.P. and NGL Energy Partners LP. (incorporated
by reference to Exhibit 10.19 of the Annual Report on Form 10-K filed by TransMontaigne Partners L.P.
with the SEC on March 10, 2016).
Amendment No. 9 to Terminaling Services Agreement—Southeast and Collins/Purvis, dated March 1,
2016, between TransMontaigne Partners L.P. and NGL Energy Partners LP (incorporated by reference to
Exhibit 10.1 of the Quarterly Report on Form 8-K filed by TransMontaigne Partners L.P. with the SEC
on March 3, 2016).
Amendment No. 10 to Terminaling Services Agreement—Southeast and Collins/Purvis, dated June 1,
2019, between TransMontaigne Partners LLC and NGL Energy Partners LP (incorporated by reference
to Exhibit 10.20 of the Annual Report on Form 10-K filed by TransMontaigne Partners LLC with the
SEC on March 13, 2020). Certain portions of this exhibit have been omitted pursuant to Regulation S-K
Item 601(b) (10).
Indemnification Agreement, dated December 31, 2007, among TransMontaigne LLC, TransMontaigne
Partners L.P., TransMontaigne GP L.L.C., TransMontaigne Operating GP L.L.C. and TransMontaigne
Operating Company L.P. (incorporated by reference to Exhibit 10.17 of the Annual Report on Form 10-
K filed by TransMontaigne Partners L.P. with the SEC on March 10, 2008)
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Table of Contents
Exhibit
Number
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18+
10.19
Description
Amended and Restated Limited Liability Company Agreement of Battleground Oil Specialty Terminal
Company LLC Company, dated October 18, 2011, by and among TransMontaigne Operating
Company L.P., Kinder Morgan Battleground Oil LLC and Tauber Terminals, LP (incorporated by
reference to Exhibit 10.16 of the Annual Report on Form 10-K filed by TransMontaigne Partners L.P.
with the SEC on March 12, 2013). Certain portions of this exhibit have been omitted and filed
separately with the Commission pursuant to a request for confidential treatment under Rule 24b-2 as
promulgated under the Securities Exchange Act of 1934.
First Amendment to the Amended and Restated Limited Liability Company Agreement of Battleground
Oil Specialty Terminal Company LLC, dated December 20, 2012, by and among TransMontaigne
Operating Company L.P., Kinder Morgan Battleground Oil LLC and Tauber Terminals, LP
(incorporated by reference to Exhibit 10.17 of the Annual Report on Form 10-K filed by
TransMontaigne Partners L.P. with the SEC on March 12, 2013). Certain portions of this exhibit have
been omitted and filed separately with the Commission pursuant to a request for confidential treatment
under Rule 24b-2 as promulgated under the Securities Exchange Act of 1934.
Asset Purchase Agreement, dated November 2, 2017, by and between Plains Products Terminals LLC
and TransMontaigne Operating Company L.P. (incorporated by reference to Exhibit 10.1 of the Current
Report on Form 8-K filed by TransMontaigne Partners L.P. with the SEC on November 8, 2017).
First Amendment to Third Amended and Restated Senior Secured Credit Facility, dated as of December
14, 2017, by and among TransMontaigne Operating Company L.P., as borrower, Wells Fargo Bank,
National Association, as administrative agent, and the lenders party thereto (incorporated by reference
to Exhibit 10.1 of the Current Report on Form 8-K filed by TransMontaigne Partners L.P. with the SEC
on December 18, 2017).
Second Amendment to Third Amended and Restated Senior Secured Credit Facility, dated as of
February 26, 2019, by and among TransMontaigne Operating Company L.P., as borrower, Wells Fargo
Bank, National Association, as administrative agent, and the lenders party thereto (incorporated by
reference to Exhibit 10.1 of the Current Report on Form 8-K filed by TransMontaigne Partners LLC
with the SEC on February 28, 2019).
Third Amendment to Third Amended and Restated Senior Secured Credit Facility, dated as of June 3,
2019, by and among TransMontaigne Operating Company L.P., as borrower, Wells Fargo Bank,
National Association, as administrative agent, and the lenders party thereto (incorporated by reference
to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed by TransMontaigne Partners LLC with the
SEC on August 9, 2019).
Right of First Offer Agreement dated as of September 12, 2017, by and between Pike West Coast
Holdings, LLC and TransMontaigne Partners L.P. (incorporated by reference to Exhibit 10.1 of the
Current Report on Form 8-K filed by TransMontaigne Partners L.P. with the SEC on September 15,
2017).
Right of First Offer Agreement dated as of August 4, 2017, by and between Pike West Coast
Holdings, LLC and TransMontaigne Partners L.P. (incorporated by reference to Exhibit 10.1 of the
Current Report on Form 8-K filed by TransMontaigne Partners L.P. with the SEC on August 9, 2017).
TLP Management Services LLC Amended and Restated Savings and Retention Plan (incorporated by
reference to Exhibit 10.18 of the Annual Report on Form 10-K filed by TransMontaigne Partners LLC
with the SEC on March 15, 2019).
Services Agreement dated as of August 18, 2019, by and between TransMontaigne Management
Company, LLC and TLP Management Services, LLC (incorporated by reference to Exhibit 10.9 of the
Annual Report on Form 10-K filed by TransMontaigne Partners LLC with the SEC on March 13, 2020).
21.1*
List of Subsidiaries of TransMontaigne Partners LLC.
103
Table of Contents
Exhibit
Number
31.1*
31.2*
32.1*
32.2*
101*
Description
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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.
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.
The following financial information from the Annual Report on Form 10-K of TransMontaigne
Partners LLC and subsidiaries for the year ended December 31, 2020, formatted in XBRL (eXtensible
Business Reporting Language): (i) consolidated balance sheets, (ii) consolidated statements of
operations, (iii) consolidated statements of equity, (iv) consolidated statements of cash flows and
(v) notes to consolidated financial statements.
*
+
Filed with this Annual Report.
Identifies each management compensation plan or arrangement.
ITEM 16. FORM 10-K SUMMARY
None.
104
Table of Contents
In accordance with 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.
SIGNATURES
TRANSMONTAIGNE PARTNERS LLC
By: TLP FINANCE HOLDINGS, LLC, its Managing
Member
By:
/s/ FREDERICK W. BOUTIN
Date: March 5, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities with registrant so stated, on the date indicated.
Name and Signature
Title
Date
/s/ FREDERICK W. BOUTIN
Frederick W. Boutin
/s/ ROBERT T. FULLER
Robert T. Fuller
/s/ LISA M. KEARNEY
Lisa M. Kearney
Chief Executive Officer
March 5, 2021
Executive Vice President, Chief
Financial Officer and Treasurer
Vice President, Chief Accounting
Officer
March 5, 2021
March 5, 2021
105
List of Subsidiaries of TransMontaigne Partners LLC at December 31, 2020*
Exhibit 21.1
Ownership of
subsidiary
Name of subsidiary
100%
100%
100%
100%
100%
100%
100%
100%
100% TransMontaigne Management Services L.L.C. None Delaware
TransMontaigne Operating GP L.L.C.
TransMontaigne Terminals L.L.C.
TPSI Terminals L.L.C.
TransMontaigne Operating Company L.P.
Razorback L.L.C.
TLP Operating Finance Corp.
TPME L.L.C.
TLP Finance Corp.
Trade name
None
None
None
None
None
None
None
None
State/Country of
organization
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.1
I, Frederick W. Boutin, Chief Executive Officer TransMontaigne Partners LLC, a Delaware limited liability company
(the “Company”), certify that:
1.
2.
3.
4.
I have reviewed this Annual Report on Form 10-K of TransMontaigne Partners LLC for the fiscal year ended
December 31, 2020;
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;
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;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
(a)
(b)
(c)
(d)
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;
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;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures within 90 days of
this report 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
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 quarter in the case
of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):
(a)
(b)
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
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.
March 5, 2021
/s/ FREDERICK W. BOUTIN
Frederick W. Boutin
Chief Executive Officer
Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2
I, Robert T. Fuller, Chief Financial Officer of TransMontaigne Partners LLC, a Delaware limited liability company
(the “Company”), certify that:
1.
2.
3.
4.
I have reviewed this Annual Report on Form 10-K of TransMontaigne Partners LLC for the fiscal year ended
December 31, 2020;
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;
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;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
(a)
(b)
(c)
(d)
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;
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;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures within 90 days of
this report 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
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 quarter in the case
of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):
(a)
(b)
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
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.
March 5, 2021
/s/ ROBERT T. FULLER
Robert T. Fuller
Chief Financial Officer
Certification of Chief Executive Officer and Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(18 U.S.C. Section 1350)
Exhibit 32.1
The undersigned, the Chief Executive Officer of TransMontaigne Partners LLC, a Delaware limited liability
company (the “Company”), hereby certifies that, to his knowledge on the date hereof:
(a)
(b)
the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2020, filed
on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with
the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
the information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
/s/ FREDERICK W. BOUTIN
Frederick W. Boutin
Chief Executive Officer
March 5, 2021
Certification of Chief Executive Officer and Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(18 U.S.C. Section 1350)
Exhibit 32.2
The undersigned, the Chief Financial Officer of TransMontaigne Partners LLC, a Delaware limited liability
company (the “Company”), hereby certifies that, to his knowledge on the date hereof:
(a)
(b)
the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2020, filed
on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with
the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
the information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
/s/ ROBERT T. FULLER
Robert T. Fuller
Chief Financial Officer
March 5, 2021