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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Shell Midstream Partners LP | NYSE:SHLX | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 15.82 | 0 | 01:00:00 |
|
ý
|
QUARTERLY 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
|
|
|
|
|
|
|
Delaware
|
|
46-5223743
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
ý
|
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
|
Smaller reporting company
¨
|
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|
Page
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|
September 30,
2016 |
|
December 31,
2015 |
||||
|
|
(in millions of dollars)
|
||||||
ASSETS
|
||||||||
Current assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
160.8
|
|
|
$
|
93.0
|
|
Accounts receivable – third parties, net
|
|
13.3
|
|
|
18.8
|
|
||
Accounts receivable – related parties
|
|
7.2
|
|
|
9.8
|
|
||
Allowance oil
|
|
7.8
|
|
|
4.2
|
|
||
Prepaid expenses
|
|
0.7
|
|
|
5.0
|
|
||
Total current assets
|
|
189.8
|
|
|
130.8
|
|
||
Equity method investments
|
|
174.2
|
|
|
185.0
|
|
||
Property, plant and equipment, net
|
|
395.5
|
|
|
392.9
|
|
||
Cost investments
|
|
37.7
|
|
|
6.2
|
|
||
Total assets
|
|
$
|
797.2
|
|
|
$
|
714.9
|
|
LIABILITIES
|
||||||||
Current liabilities
|
|
|
|
|
|
|
||
Accounts payable – third parties
|
|
$
|
1.5
|
|
|
$
|
0.2
|
|
Accounts payable – related parties
|
|
5.7
|
|
|
9.3
|
|
||
Deferred revenue – third parties
|
|
4.3
|
|
|
2.6
|
|
||
Deferred revenue – related parties
|
|
1.5
|
|
|
3.6
|
|
||
Accrued liabilities – third parties
|
|
7.9
|
|
|
6.8
|
|
||
Accrued liabilities – related parties
|
|
5.6
|
|
|
3.6
|
|
||
Total current liabilities
|
|
26.5
|
|
|
26.1
|
|
||
Noncurrent liabilities
|
|
|
|
|
||||
Debt payable – related party
|
|
343.9
|
|
|
457.6
|
|
||
Lease liability – related party
|
|
25.0
|
|
|
22.8
|
|
||
Asset retirement obligations
|
|
1.4
|
|
|
1.3
|
|
||
Total noncurrent liabilities
|
|
370.3
|
|
|
481.7
|
|
||
Total liabilities
|
|
396.8
|
|
|
507.8
|
|
||
Commitments and Contingencies (Note 11)
|
|
|
|
|
|
|
||
EQUITY
|
||||||||
Common unitholders – public (88,367,308 and 62,892,308 units issued and outstanding as of September 30, 2016 and December 31, 2015)
|
|
2,479.3
|
|
|
1,637.5
|
|
||
Common unitholder – SPLC (21,475,068 units issued and
outstanding as of September 30, 2016 and December 31, 2015) |
|
(125.6
|
)
|
|
(130.4
|
)
|
||
Subordinated unitholder – SPLC (67,475,068 units issued and
outstanding as of September 30, 2016 and December 31, 2015) |
|
(394.7
|
)
|
|
(409.8
|
)
|
||
General partner – SPLC (3,618,723 and 3,098,825 units issued and
outstanding as of September 30, 2016 and December 31, 2015) |
|
(1,580.6
|
)
|
|
(998.6
|
)
|
||
Total partners' capital
|
|
378.4
|
|
|
98.7
|
|
||
Noncontrolling interest
|
|
22.0
|
|
|
108.4
|
|
||
Total equity
|
|
400.4
|
|
|
207.1
|
|
||
Total liabilities and equity
|
|
$
|
797.2
|
|
|
$
|
714.9
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2016
|
|
2015
(1)
|
|
2016
|
|
2015
(1)
|
||||||||
|
|
(in millions of dollars, except per unit data)
|
||||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|||||||
Third parties
|
|
$
|
46.1
|
|
|
$
|
65.0
|
|
|
$
|
149.8
|
|
|
$
|
165.1
|
|
Related parties
|
|
21.8
|
|
|
31.2
|
|
|
65.9
|
|
|
76.8
|
|
||||
Total revenue
|
|
67.9
|
|
|
96.2
|
|
|
215.7
|
|
|
241.9
|
|
||||
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operations and maintenance – third parties
|
|
11.4
|
|
|
12.2
|
|
|
33.1
|
|
|
32.0
|
|
||||
Operations and maintenance – related parties
|
|
5.3
|
|
|
4.5
|
|
|
15.9
|
|
|
14.2
|
|
||||
General and administrative – third parties
|
|
2.2
|
|
|
1.8
|
|
|
6.2
|
|
|
6.8
|
|
||||
General and administrative – related parties
|
|
5.7
|
|
|
6.3
|
|
|
17.3
|
|
|
17.8
|
|
||||
Depreciation, amortization and accretion
|
|
6.0
|
|
|
5.4
|
|
|
17.7
|
|
|
16.0
|
|
||||
Property and other taxes
|
|
1.3
|
|
|
0.9
|
|
|
6.4
|
|
|
7.6
|
|
||||
Total costs and expenses
|
|
31.9
|
|
|
31.1
|
|
|
96.6
|
|
|
94.4
|
|
||||
Operating income
|
|
36.0
|
|
|
65.1
|
|
|
119.1
|
|
|
147.5
|
|
||||
Income from equity investments
|
|
21.4
|
|
|
24.1
|
|
|
70.2
|
|
|
47.4
|
|
||||
Dividend income from investment
|
|
4.2
|
|
|
2.7
|
|
|
11.6
|
|
|
6.6
|
|
||||
Other income
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
1.1
|
|
||||
Investment, dividend and other income
|
|
25.6
|
|
|
26.9
|
|
|
81.8
|
|
|
55.1
|
|
||||
Interest expense, net
|
|
2.8
|
|
|
1.7
|
|
|
7.8
|
|
|
2.2
|
|
||||
Income before income taxes
|
|
58.8
|
|
|
90.3
|
|
|
193.1
|
|
|
200.4
|
|
||||
Income tax expense
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
||||
Net income
|
|
58.8
|
|
|
90.6
|
|
|
193.1
|
|
|
200.4
|
|
||||
Less: Net income attributable to Parent
|
|
—
|
|
|
16.2
|
|
|
—
|
|
|
39.3
|
|
||||
Less: Net income attributable to noncontrolling interests
|
|
2.5
|
|
|
20.1
|
|
|
17.7
|
|
|
51.0
|
|
||||
Net income attributable to the Partnership
|
|
$
|
56.3
|
|
|
$
|
54.3
|
|
|
$
|
175.4
|
|
|
$
|
110.1
|
|
General partner's interest in net income attributable to the Partnership
|
|
$
|
7.2
|
|
|
$
|
1.5
|
|
|
$
|
15.3
|
|
|
$
|
2.7
|
|
Limited Partners' interest in net income attributable to the Partnership
|
|
$
|
49.1
|
|
|
$
|
52.8
|
|
|
$
|
160.1
|
|
|
$
|
107.4
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per Limited Partner Unit - Basic and Diluted (in dollars):
|
|
|
|
|
|
|
|
|
|
|
||||||
Common
|
|
$
|
0.28
|
|
|
$
|
0.37
|
|
|
$
|
0.98
|
|
|
$
|
0.77
|
|
Subordinated
|
|
$
|
0.28
|
|
|
$
|
0.37
|
|
|
$
|
0.93
|
|
|
$
|
0.77
|
|
|
|
|
|
|
|
|
|
|
||||||||
Distributions per Limited Partner Unit (in dollars)
|
|
$
|
0.26375
|
|
|
$
|
0.20500
|
|
|
$
|
0.74880
|
|
|
$
|
0.57000
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average Limited Partner Units outstanding - Basic and Diluted (in millions):
|
|
|
|
|
|
|
|
|
|
|
||||||
Common units – public
|
|
88.3
|
|
|
53.7
|
|
|
77.7
|
|
|
51.1
|
|
||||
Common units – SPLC
|
|
21.5
|
|
|
21.5
|
|
|
21.5
|
|
|
21.5
|
|
||||
Subordinated units – SPLC
|
|
67.5
|
|
|
67.5
|
|
|
67.5
|
|
|
67.5
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2016
|
|
2015
(1)
|
||||
|
|
(in millions of dollars)
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
|
||
Net income
|
|
$
|
193.1
|
|
|
$
|
200.4
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
||
Depreciation, amortization and accretion
|
|
17.7
|
|
|
16.0
|
|
||
Amortization of credit facilities issuance costs
|
|
0.2
|
|
|
—
|
|
||
Allowance oil reduction to net realizable value
|
|
—
|
|
|
1.0
|
|
||
Undistributed equity earnings
|
|
2.7
|
|
|
—
|
|
||
Changes in operating assets and liabilities
|
|
|
|
|
|
|
||
Accounts receivable
|
|
6.6
|
|
|
6.8
|
|
||
Allowance oil
|
|
(3.6
|
)
|
|
(2.5
|
)
|
||
Prepaid expenses
|
|
4.3
|
|
|
2.5
|
|
||
Accounts payable
|
|
(1.6
|
)
|
|
(5.6
|
)
|
||
Deferred revenue
|
|
(0.4
|
)
|
|
(7.3
|
)
|
||
Accrued liabilities
|
|
5.1
|
|
|
12.5
|
|
||
Net cash provided by operating activities
|
|
224.1
|
|
|
223.8
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
||
Capital expenditures
|
|
(21.3
|
)
|
|
(11.2
|
)
|
||
Acquisitions
|
|
(120.0
|
)
|
|
(85.9
|
)
|
||
Return of investment
|
|
9.6
|
|
|
4.5
|
|
||
Payment of pre-IPO distributions from investments to SPLC
|
|
—
|
|
|
(11.9
|
)
|
||
Net cash used in investing activities
|
|
(131.7
|
)
|
|
(104.5
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
||
Net proceeds from private placement
|
|
—
|
|
|
297.7
|
|
||
Net proceeds from public offerings
|
|
818.1
|
|
|
—
|
|
||
Borrowing under credit facility
|
|
296.7
|
|
|
420.8
|
|
||
Contributions from general partner
|
|
9.8
|
|
|
6.1
|
|
||
Repayment of credit facilities
|
|
(410.0
|
)
|
|
—
|
|
||
Capital distributions to general partner
|
|
(599.2
|
)
|
|
(712.1
|
)
|
||
Distributions to noncontrolling interest
|
|
(17.1
|
)
|
|
(55.9
|
)
|
||
Distributions to unitholders and general partner
|
|
(126.0
|
)
|
|
(66.2
|
)
|
||
Other contribution from Parent
|
|
3.1
|
|
|
—
|
|
||
Net distribution to Parent
|
|
—
|
|
|
(42.1
|
)
|
||
Credit facilities issuance costs
|
|
—
|
|
|
(0.3
|
)
|
||
Net cash used in financing activities
|
|
(24.6
|
)
|
|
(152.0
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
67.8
|
|
|
(32.7
|
)
|
||
Cash and cash equivalents at beginning of the period
|
|
93.0
|
|
|
150.2
|
|
||
Cash and cash equivalents at end of the period
|
|
$
|
160.8
|
|
|
$
|
117.5
|
|
Supplemental Cash Flow Information
|
|
|
|
|
|
|
||
Non-cash investing and financing transactions
|
|
|
|
|
|
|
||
Contribution of fixed assets from Parent
|
|
$
|
—
|
|
|
$
|
0.4
|
|
Change in accrued capital expenditures
|
|
(1.1
|
)
|
|
(0.4
|
)
|
||
Other non-cash contributions from Parent
|
|
0.3
|
|
|
—
|
|
||
Other non-cash capital distributions to general partner
|
|
(7.1
|
)
|
|
—
|
|
||
Other non-cash contribution from general partner
|
|
7.1
|
|
|
—
|
|
||
Other non-cash credit facilities issuance costs
|
|
(0.6
|
)
|
|
—
|
|
|
Partnership
|
|
|
|
|
||||||||||||||||||
(in millions of dollars)
|
Common Unitholders Public
|
|
Common Unitholder SPLC
|
|
Subordinated Unitholder SPLC
|
|
General Partner SPLC
|
|
Non- controlling Interest
|
|
Total
|
||||||||||||
Balance as of December 31, 2015
|
$
|
1,637.5
|
|
|
$
|
(130.4
|
)
|
|
$
|
(409.8
|
)
|
|
$
|
(998.6
|
)
|
|
$
|
108.4
|
|
|
$
|
207.1
|
|
Net income
|
77.4
|
|
|
20.0
|
|
|
62.7
|
|
|
15.3
|
|
|
17.7
|
|
|
193.1
|
|
||||||
Net proceeds from public offerings
|
818.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
818.1
|
|
||||||
Contributions from general partner
|
—
|
|
|
—
|
|
|
—
|
|
|
16.9
|
|
|
—
|
|
|
16.9
|
|
||||||
Other contribution from parent
|
—
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
||||||
Distributions to unitholders and general partner
|
(53.7
|
)
|
|
(15.2
|
)
|
|
(47.6
|
)
|
|
(9.5
|
)
|
|
—
|
|
|
(126.0
|
)
|
||||||
Distribution to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.1
|
)
|
|
(17.1
|
)
|
||||||
Capital distributions to general partner
|
—
|
|
|
—
|
|
|
—
|
|
|
(606.3
|
)
|
|
—
|
|
|
(606.3
|
)
|
||||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(87.0
|
)
|
|
(87.0
|
)
|
||||||
Balance as of September 30, 2016
|
$
|
2,479.3
|
|
|
$
|
(125.6
|
)
|
|
$
|
(394.7
|
)
|
|
$
|
(1,580.6
|
)
|
|
$
|
22.0
|
|
|
$
|
400.4
|
|
Cost investment
(1)
|
$
|
5.2
|
|
Equity method investments
(2)
|
1.5
|
|
|
Partner's capital
(3)
|
87.0
|
|
|
May 2016 Acquisition
|
$
|
93.7
|
|
(1)
|
Book value of
3.0%
additional interest in Colonial contributed by SPLC.
|
(2)
|
Book value of
1.0%
additional interest in Bengal contributed by SPLC.
|
(3)
|
Book value of
30.0%
additional interest in Zydeco from SPLC’s noncontrolling interest.
|
Condensed Consolidated Statement of Income
|
Three Months Ended September 30, 2015
|
||||||||||
|
|
|
Shell Auger
|
|
|
||||||
|
Shell Midstream
|
|
and Lockport
|
|
Consolidated
|
||||||
|
Partners, L.P.
(1)
|
|
Operations
(2)
|
|
Results
|
||||||
|
|
|
|
|
|
||||||
Revenue
|
|
|
|
|
|
||||||
Third parties
|
$
|
57.5
|
|
|
$
|
7.5
|
|
|
$
|
65.0
|
|
Related parties
|
14.9
|
|
|
16.3
|
|
|
31.2
|
|
|||
Total revenue
|
72.4
|
|
|
23.8
|
|
|
96.2
|
|
|||
Costs and expenses
|
|
|
|
|
|
||||||
Operations and maintenance – third parties
|
9.2
|
|
|
3.0
|
|
|
12.2
|
|
|||
Operations and maintenance – related parties
|
3.6
|
|
|
0.9
|
|
|
4.5
|
|
|||
General and administrative – third parties
|
1.6
|
|
|
0.2
|
|
|
1.8
|
|
|||
General and administrative – related parties
|
4.9
|
|
|
1.4
|
|
|
6.3
|
|
|||
Depreciation, amortization and accretion
|
3.5
|
|
|
1.9
|
|
|
5.4
|
|
|||
Property and other taxes
|
0.7
|
|
|
0.2
|
|
|
0.9
|
|
|||
Total costs and expenses
|
23.5
|
|
|
7.6
|
|
|
31.1
|
|
|||
Operating income
|
48.9
|
|
|
16.2
|
|
|
65.1
|
|
|||
Income from equity investments
|
24.1
|
|
|
—
|
|
|
24.1
|
|
|||
Dividend income from investment
|
2.7
|
|
|
—
|
|
|
2.7
|
|
|||
Other income
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Investment, dividend and other income
|
26.9
|
|
|
—
|
|
|
26.9
|
|
|||
Interest expense, net
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|||
Income before income taxes
|
74.1
|
|
|
16.2
|
|
|
90.3
|
|
|||
Income tax expense
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Net income
|
74.4
|
|
|
16.2
|
|
|
90.6
|
|
|||
Less: Net income attributable to Parent
|
—
|
|
|
16.2
|
|
|
16.2
|
|
|||
Less: Net income attributable to noncontrolling interests
|
20.1
|
|
|
—
|
|
|
20.1
|
|
|||
Net income attributable to the Partnership
|
$
|
54.3
|
|
|
$
|
—
|
|
|
$
|
54.3
|
|
Condensed Consolidated Statement of Income
|
Nine Months Ended September 30, 2015
|
||||||||||
|
|
|
Shell Auger
|
|
|
||||||
|
Shell Midstream
|
|
and Lockport
|
|
Consolidated
|
||||||
|
Partners, L.P.
(1)
|
|
Operations
(2)
|
|
Results
|
||||||
Revenue
|
|
|
|
|
|
||||||
Third parties
|
$
|
145.3
|
|
|
$
|
19.8
|
|
|
$
|
165.1
|
|
Related parties
|
36.4
|
|
|
40.4
|
|
|
76.8
|
|
|||
Total revenue
|
181.7
|
|
|
60.2
|
|
|
241.9
|
|
|||
Costs and expenses
|
|
|
|
|
|
||||||
Operations and maintenance – third parties
|
23.8
|
|
|
8.2
|
|
|
32.0
|
|
|||
Operations and maintenance – related parties
|
10.9
|
|
|
3.3
|
|
|
14.2
|
|
|||
General and administrative – third parties
|
6.6
|
|
|
0.2
|
|
|
6.8
|
|
|||
General and administrative – related parties
|
14.7
|
|
|
3.1
|
|
|
17.8
|
|
|||
Depreciation, amortization and accretion
|
10.4
|
|
|
5.6
|
|
|
16.0
|
|
|||
Property and other taxes
|
7.1
|
|
|
0.5
|
|
|
7.6
|
|
|||
Total costs and expenses
|
73.5
|
|
|
20.9
|
|
|
94.4
|
|
|||
Operating income
|
108.2
|
|
|
39.3
|
|
|
147.5
|
|
|||
Income from equity investments
|
47.4
|
|
|
—
|
|
|
47.4
|
|
|||
Dividend income from investment
|
6.6
|
|
|
—
|
|
|
6.6
|
|
|||
Other income
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|||
Investment, dividend and other income
|
55.1
|
|
|
—
|
|
|
55.1
|
|
|||
Interest expense, net
|
2.2
|
|
|
—
|
|
|
2.2
|
|
|||
Income before income taxes
|
161.1
|
|
|
39.3
|
|
|
200.4
|
|
|||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income
|
161.1
|
|
|
39.3
|
|
|
200.4
|
|
|||
Less: Net income attributable to Parent
|
—
|
|
|
39.3
|
|
|
39.3
|
|
|||
Less: Net income attributable to noncontrolling interests
|
51.0
|
|
|
—
|
|
|
51.0
|
|
|||
Net income attributable to the Partnership
|
$
|
110.1
|
|
|
$
|
—
|
|
|
$
|
110.1
|
|
Condensed Consolidated Statement of Cash Flows
|
Nine Months Ended September 30, 2015
|
||||||||||
|
|
|
Shell Auger
|
|
|
||||||
|
Shell Midstream
|
|
and Lockport
|
|
Consolidated
|
||||||
|
Partners, L.P.
(1)
|
|
Operations
(2)
|
|
Results
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
161.1
|
|
|
$
|
39.3
|
|
|
$
|
200.4
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
||||||
Depreciation, amortization and accretion
|
10.4
|
|
|
5.6
|
|
|
16.0
|
|
|||
Allowance oil reduction to net realizable value
|
0.9
|
|
|
0.1
|
|
|
1.0
|
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
||||||
Accounts receivable
|
6.6
|
|
|
0.2
|
|
|
6.8
|
|
|||
Allowance oil
|
(2.1
|
)
|
|
(0.4
|
)
|
|
(2.5
|
)
|
|||
Prepaid expenses
|
2.5
|
|
|
—
|
|
|
2.5
|
|
|||
Accounts payable
|
(5.2
|
)
|
|
(0.4
|
)
|
|
(5.6
|
)
|
|||
Deferred revenue
|
(7.3
|
)
|
|
—
|
|
|
(7.3
|
)
|
|||
Accrued liabilities
|
11.2
|
|
|
1.3
|
|
|
12.5
|
|
|||
Net cash provided by operating activities
|
178.1
|
|
|
45.7
|
|
|
223.8
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Capital expenditures
|
(7.6
|
)
|
|
(3.6
|
)
|
|
(11.2
|
)
|
|||
Acquisitions
|
(85.9
|
)
|
|
—
|
|
|
(85.9
|
)
|
|||
Return of investment
|
4.5
|
|
|
—
|
|
|
4.5
|
|
|||
Payment of pre-IPO distributions from investments to SPLC
|
(11.9
|
)
|
|
—
|
|
|
(11.9
|
)
|
|||
Net cash used in investing activities
|
(100.9
|
)
|
|
(3.6
|
)
|
|
(104.5
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Borrowing under credit facilities
|
420.8
|
|
|
—
|
|
|
420.8
|
|
|||
Net proceeds from private placement
|
297.7
|
|
|
—
|
|
|
297.7
|
|
|||
Contribution from general partner
|
6.1
|
|
|
—
|
|
|
6.1
|
|
|||
Capital distributions to general partner
|
(712.1
|
)
|
|
—
|
|
|
(712.1
|
)
|
|||
Distributions to noncontrolling interest
|
(55.9
|
)
|
|
—
|
|
|
(55.9
|
)
|
|||
Distributions to unitholders and general partner
|
(66.2
|
)
|
|
—
|
|
|
(66.2
|
)
|
|||
Credit facilities issuance costs
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Net distribution to Parent
|
—
|
|
|
(42.1
|
)
|
|
(42.1
|
)
|
|||
Net cash used in financing activities
|
(109.9
|
)
|
|
(42.1
|
)
|
|
(152.0
|
)
|
|||
Net increase in cash and cash equivalents
|
(32.7
|
)
|
|
—
|
|
|
(32.7
|
)
|
|||
Cash and cash equivalents at beginning of the period
|
150.2
|
|
|
—
|
|
|
150.2
|
|
|||
Cash and cash equivalents at end of the period
|
$
|
117.5
|
|
|
$
|
—
|
|
|
$
|
117.5
|
|
Supplemental Cash Flow Information
|
|
|
|
|
|
||||||
Non-cash investing transactions
|
|
|
|
|
|
||||||
Change in accrued capital expenditures
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
Contribution of fixed assets from Parent
|
0.4
|
|
|
—
|
|
|
0.4
|
|
Cost investment
(1)
|
$
|
2.5
|
|
Partner's capital
(2)
|
52.9
|
|
|
May 2015 Acquisition
|
$
|
55.4
|
|
•
|
we are required to pay an annual general and administrative fee for the provision of certain services by SPLC;
|
•
|
we are obligated to reimburse SPLC for certain direct or allocated costs and expenses incurred by SPLC on our behalf;
|
•
|
we are obligated to reimburse SPLC for all expenses incurred by SPLC as a result of us becoming and continuing as a publicly traded entity; we will reimburse our general partner for these expenses to the extent the fees relating to such services are not included in the general and administrative fee; and
|
•
|
Shell granted a license to us with respect to the use of certain Shell trademarks and trade names.
|
|
|
Noncontrolling Interest
|
|
March 31, 2015
|
|
57.0
|
%
|
June 30, 2015
|
|
37.5
|
%
|
September 30, 2015
|
|
37.5
|
%
|
|
|
|
|
March 31, 2016
|
|
37.5
|
%
|
June 30, 2016
|
|
7.5
|
%
|
September 30, 2016
|
|
7.5
|
%
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Accounts receivable
|
|
$
|
7.2
|
|
|
$
|
9.8
|
|
Prepaid expenses
|
|
0.4
|
|
|
2.8
|
|
||
Accounts payable
(1)
|
|
5.7
|
|
|
9.3
|
|
||
Deferred revenue
|
|
1.5
|
|
|
3.6
|
|
||
Accrued liabilities
|
|
5.6
|
|
|
3.6
|
|
||
Debt payable
(2)
|
|
343.9
|
|
|
457.6
|
|
||
Lease liability
|
|
25.0
|
|
|
22.8
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Operations and maintenance - related parties
|
|
$
|
5.3
|
|
|
$
|
4.5
|
|
|
$
|
15.9
|
|
|
$
|
14.2
|
|
General and administrative - related parties
(1)
|
|
5.7
|
|
|
6.3
|
|
|
17.3
|
|
|
17.8
|
|
|
|
September 30, 2016
(1)
|
|
December 31, 2015
(2)
|
||||
Mars
|
|
$
|
81.4
|
|
|
$
|
84.0
|
|
Bengal
|
|
76.7
|
|
|
75.6
|
|
||
Poseidon
|
|
16.1
|
|
|
25.4
|
|
||
|
|
$
|
174.2
|
|
|
$
|
185.0
|
|
|
|
Three Months Ended September 30, 2016
|
||||||||||||||
|
|
Mars
|
|
Bengal
|
|
Poseidon
|
|
Total
|
||||||||
Distributions received
|
|
$
|
11.5
|
|
|
$
|
2.7
|
|
|
$
|
10.5
|
|
|
$
|
24.7
|
|
Income from equity investments
(1)
|
|
8.6
|
|
|
5.2
|
|
|
7.6
|
|
|
21.4
|
|
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||
|
|
Mars
|
|
Bengal
|
|
Poseidon
|
|
Total
|
||||||||
Distributions received
|
|
$
|
34.5
|
|
|
$
|
16.1
|
|
|
$
|
31.9
|
|
|
$
|
82.5
|
|
Income from equity investments
(1)
|
|
31.7
|
|
|
15.9
|
|
|
22.6
|
|
|
70.2
|
|
|
|
Three Months Ended September 30, 2015
|
||||||||||||||
|
|
Mars
|
|
Bengal
|
|
Poseidon
(2)
|
|
Total
|
||||||||
Distributions received
|
|
$
|
7.7
|
|
|
$
|
5.1
|
|
|
$
|
10.4
|
|
|
$
|
23.2
|
|
Income from equity investments
(1)
|
|
10.5
|
|
|
5.6
|
|
|
8.0
|
|
|
24.1
|
|
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||
|
|
Mars
|
|
Bengal
|
|
Poseidon
|
|
Total
|
||||||||
Distributions received
|
|
$
|
24.9
|
|
|
$
|
16.6
|
|
|
$
|
10.4
|
|
|
$
|
51.9
|
|
Income from equity investments
(1)
|
|
23.6
|
|
|
15.8
|
|
|
8.0
|
|
|
47.4
|
|
|
|
Three Months Ended September 30, 2016
|
||||||||||
|
|
Mars
|
|
Bengal
|
|
Poseidon
|
||||||
Statements of Income
|
|
|
|
|
|
|
||||||
Total revenues
|
|
$
|
54.0
|
|
|
$
|
17.3
|
|
|
$
|
31.3
|
|
Total operating expenses
|
|
23.1
|
|
|
7.2
|
|
|
8.2
|
|
|||
Operating income
|
|
$
|
30.9
|
|
|
$
|
10.1
|
|
|
$
|
23.1
|
|
Net income
(1)
|
|
$
|
30.9
|
|
|
$
|
10.3
|
|
|
$
|
22.0
|
|
|
|
Nine Months Ended September 30, 2016
|
||||||||||
|
|
Mars
|
|
Bengal
|
|
Poseidon
|
||||||
Statements of Income
|
|
|
|
|
|
|
||||||
Total revenues
|
|
$
|
175.5
|
|
|
$
|
52.3
|
|
|
$
|
90.7
|
|
Total operating expenses
|
|
62.1
|
|
|
20.7
|
|
|
22.5
|
|
|||
Operating income
|
|
$
|
113.4
|
|
|
$
|
31.6
|
|
|
$
|
68.2
|
|
Net income
(1)
|
|
$
|
113.4
|
|
|
$
|
31.7
|
|
|
$
|
64.7
|
|
|
|
Three Months Ended September 30, 2015
|
||||||||||
|
|
Mars
|
|
Bengal
|
|
Poseidon
|
||||||
Statements of Income
|
|
|
|
|
|
|
||||||
Total revenues
|
|
$
|
56.8
|
|
|
$
|
18.6
|
|
|
$
|
30.8
|
|
Total operating expenses
|
|
19.2
|
|
|
7.2
|
|
|
7.0
|
|
|||
Operating income
|
|
$
|
37.6
|
|
|
$
|
11.4
|
|
|
$
|
23.8
|
|
Net income
(1)
|
|
$
|
37.6
|
|
|
$
|
11.3
|
|
|
$
|
22.9
|
|
|
|
Nine Months Ended September 30, 2015
|
||||||||||
|
|
Mars
|
|
Bengal
|
|
Poseidon
(2)
|
||||||
Statements of Income
|
|
|
|
|
|
|
||||||
Total revenues
|
|
$
|
148.7
|
|
|
$
|
52.2
|
|
|
$
|
92.7
|
|
Total operating expenses
|
|
63.0
|
|
|
20.3
|
|
|
21.6
|
|
|||
Operating income
|
|
$
|
85.7
|
|
|
$
|
31.9
|
|
|
$
|
71.1
|
|
Net income
(1)
|
|
$
|
85.8
|
|
|
$
|
31.8
|
|
|
$
|
67.8
|
|
|
|
Depreciable
Life
|
|
September 30, 2016
|
|
December 31, 2015
|
|||||
Land
|
|
—
|
|
|
$
|
1.4
|
|
|
$
|
1.4
|
|
Building and improvements
|
|
10 - 40 years
|
|
|
19.5
|
|
|
19.5
|
|
||
Pipeline and equipment
(1)
|
|
10 - 30 years
|
|
|
578.9
|
|
|
572.4
|
|
||
Other
|
|
5 - 25 years
|
|
|
5.9
|
|
|
5.6
|
|
||
|
|
|
|
605.7
|
|
|
598.9
|
|
|||
Accumulated depreciation and amortization
(2)
|
|
|
|
(233.9
|
)
|
|
(216.2
|
)
|
|||
|
|
|
|
371.8
|
|
|
382.7
|
|
|||
Construction in progress
|
|
|
|
23.7
|
|
|
10.2
|
|
|||
Property, plant and equipment, net
|
|
|
|
$
|
395.5
|
|
|
$
|
392.9
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Transportation, project engineering
|
|
$
|
1.7
|
|
|
$
|
3.0
|
|
Property taxes
|
|
4.9
|
|
|
0.3
|
|
||
FERC accrual
|
|
—
|
|
|
1.7
|
|
||
Professional fees
|
|
1.2
|
|
|
1.2
|
|
||
Other accrued liabilities
|
|
0.1
|
|
|
0.6
|
|
||
Accrued liabilities - third parties
|
|
$
|
7.9
|
|
|
$
|
6.8
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Five Year Revolver, variable rate, due October 31, 2019
(1)
|
|
$
|
344.9
|
|
|
$
|
320.8
|
|
364-Day Revolver, variable rate, due March 1, 2017
(2)
|
|
—
|
|
|
137.4
|
|
||
Zydeco Revolver, variable rate, due August 6, 2019
(3)
|
|
—
|
|
|
—
|
|
||
Unamortized debt issuance costs
|
|
(1.0
|
)
|
|
(0.6
|
)
|
||
Debt payable – related party
|
|
$
|
343.9
|
|
|
$
|
457.6
|
|
(1)
|
As of
September 30, 2016
, availability under the
$760.0 million
Five
Year Revolver was
$415.1 million
.
|
(2)
|
As of
September 30, 2016
, the entire
$180.0 million
capacity was available under the
364
-Day Revolver.
|
(3)
|
As of
September 30, 2016
, the entire
$30.0 million
capacity was available under the Zydeco Revolver.
|
|
|
Public
|
|
SPLC
|
|
SPLC
|
|
General
|
|
|
|||||
(in units)
|
|
Common
|
|
Common
|
|
Subordinated
|
|
Partner
|
|
Total
|
|||||
Balance as of December 31, 2015
|
|
62,892,308
|
|
|
21,475,068
|
|
|
67,475,068
|
|
|
3,098,825
|
|
|
154,941,269
|
|
Units issued in connection with ATM program
|
|
750,000
|
|
|
—
|
|
|
—
|
|
|
15,307
|
|
|
765,307
|
|
Units issued in connection with public offerings
|
|
24,725,000
|
|
|
—
|
|
|
—
|
|
|
504,591
|
|
|
25,229,591
|
|
Balance as of September 30, 2016
|
|
88,367,308
|
|
|
21,475,068
|
|
|
67,475,068
|
|
|
3,618,723
|
|
|
180,936,167
|
|
Date Paid or
|
|
|
|
Public
|
|
SPLC
|
|
SPLC
|
|
General Partner
|
|
|
|
Distributions
per Limited Partner Unit |
||||||||||||||||
to be Paid
|
|
Three Months Ended
|
|
Common
|
|
Common
|
|
Subordinated
|
|
Incentive
|
|
2%
|
|
Total
|
|
|||||||||||||||
|
|
|
|
(in millions, except per unit amounts)
|
||||||||||||||||||||||||||
February 12, 2015
|
|
December 31, 2014
(1)
|
|
$
|
4.8
|
|
|
$
|
2.2
|
|
|
$
|
7.1
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
14.4
|
|
|
$
|
0.10420
|
|
May 14, 2015
|
|
March 31, 2015
|
|
8.0
|
|
|
3.8
|
|
|
11.8
|
|
|
—
|
|
|
0.5
|
|
|
24.1
|
|
|
0.17500
|
|
|||||||
August 13, 2015
|
|
June 30, 2015
|
|
10.2
|
|
|
4.1
|
|
|
12.8
|
|
|
0.1
|
|
|
0.5
|
|
|
27.7
|
|
|
0.19000
|
|
|||||||
November 12, 2015
|
|
September 30, 2015
|
|
11.0
|
|
|
4.4
|
|
|
13.9
|
|
|
0.4
|
|
|
0.6
|
|
|
30.3
|
|
|
0.20500
|
|
|||||||
February 11, 2016
|
|
December 31, 2015
|
|
13.8
|
|
|
4.7
|
|
|
14.9
|
|
|
1.2
|
|
|
0.7
|
|
|
35.3
|
|
|
0.22000
|
|
|||||||
May 12, 2016
|
|
March 31, 2016
|
|
17.9
|
|
|
5.1
|
|
|
15.8
|
|
|
2.0
|
|
|
0.9
|
|
|
41.7
|
|
|
0.23500
|
|
|||||||
August 12, 2016
|
|
June 30, 2016
|
|
22.0
|
|
|
5.4
|
|
|
16.9
|
|
|
3.7
|
|
|
1.0
|
|
|
49.0
|
|
|
0.25000
|
|
|||||||
November 14, 2016
(2)
|
|
September 30, 2016
|
|
23.3
|
|
|
5.7
|
|
|
17.8
|
|
|
6.0
|
|
|
1.1
|
|
|
53.9
|
|
|
0.26375
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income
|
|
$
|
58.8
|
|
|
$
|
90.6
|
|
|
$
|
193.1
|
|
|
$
|
200.4
|
|
Less:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Parent
|
|
—
|
|
|
16.2
|
|
|
—
|
|
|
39.3
|
|
||||
Net income attributable to noncontrolling interests
|
|
2.5
|
|
|
20.1
|
|
|
17.7
|
|
|
51.0
|
|
||||
Net income attributable to the Partnership
|
|
56.3
|
|
|
54.3
|
|
|
175.4
|
|
|
110.1
|
|
||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
General Partner's distribution declared
|
|
7.1
|
|
|
1.0
|
|
|
14.7
|
|
|
2.1
|
|
||||
Limited Partners' distribution declared on common units
|
|
29.0
|
|
|
15.4
|
|
|
79.4
|
|
|
41.5
|
|
||||
Limited Partners' distribution declared on subordinated units
|
|
17.8
|
|
|
13.9
|
|
|
50.5
|
|
|
38.5
|
|
||||
Income in excess of distributions
|
|
$
|
2.4
|
|
|
$
|
24.0
|
|
|
$
|
30.8
|
|
|
$
|
28.0
|
|
|
|
Three Months Ended September 30, 2016
|
||||||||||||||
|
|
General
|
|
Limited Partners'
|
|
Limited Partners'
|
|
|
||||||||
|
|
Partner
|
|
Common Units
|
|
Subordinated Units
|
|
Total
|
||||||||
|
|
(in millions of dollars, except per unit data)
|
||||||||||||||
Distributions declared
|
|
$
|
7.1
|
|
|
$
|
29.0
|
|
|
$
|
17.8
|
|
|
$
|
53.9
|
|
Income in excess of distributions
|
|
0.1
|
|
|
1.4
|
|
|
0.9
|
|
|
2.4
|
|
||||
Net income attributable to the Partnership
|
|
$
|
7.2
|
|
|
$
|
30.4
|
|
|
$
|
18.7
|
|
|
$
|
56.3
|
|
Weighted average units outstanding (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted
|
|
|
|
|
109.8
|
|
|
67.5
|
|
|
|
|
||||
Net income per Limited Partner Unit (in dollars):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted
|
|
|
|
|
$
|
0.28
|
|
|
$
|
0.28
|
|
|
|
|
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||
|
|
General
|
|
Limited Partners'
|
|
Limited Partners'
|
|
|
||||||||
|
|
Partner
|
|
Common Units
|
|
Subordinated Units
|
|
Total
|
||||||||
|
|
(in millions of dollars, except per unit data)
|
||||||||||||||
Distributions declared
|
|
$
|
14.7
|
|
|
$
|
79.4
|
|
|
$
|
50.5
|
|
|
$
|
144.6
|
|
Income in excess of distributions
|
|
0.6
|
|
|
18.0
|
|
|
12.2
|
|
|
30.8
|
|
||||
Net income attributable to the Partnership
|
|
$
|
15.3
|
|
|
$
|
97.4
|
|
|
$
|
62.7
|
|
|
$
|
175.4
|
|
Weighted average units outstanding (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted
|
|
|
|
99.2
|
|
|
67.5
|
|
|
|
||||||
Net income per Limited Partner Unit (in dollars):
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic and diluted
|
|
|
|
|
$
|
0.98
|
|
|
$
|
0.93
|
|
|
|
|
|
|
Three Months Ended September 30, 2015
|
||||||||||||||
|
|
General
|
|
Limited Partners'
|
|
Limited Partners'
|
|
|
||||||||
|
|
Partner
|
|
Common Units
|
|
Subordinated Units
|
|
Total
|
||||||||
|
|
(in millions of dollars, except per unit data)
|
||||||||||||||
Distributions declared
|
|
$
|
1.0
|
|
|
$
|
15.4
|
|
|
$
|
13.9
|
|
|
$
|
30.3
|
|
Distributions in excess of income
|
|
0.5
|
|
|
12.4
|
|
|
11.1
|
|
|
24.0
|
|
||||
Net income attributable to the Partnership
|
|
$
|
1.5
|
|
|
$
|
27.8
|
|
|
$
|
25.0
|
|
|
$
|
54.3
|
|
Weighted average units outstanding (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted
|
|
|
|
|
75.2
|
|
|
67.5
|
|
|
|
|
||||
Net income per Limited Partner Unit (in dollars):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted
|
|
|
|
|
$
|
0.37
|
|
|
$
|
0.37
|
|
|
|
|
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||
|
|
General
|
|
Limited Partners'
|
|
Limited Partners'
|
|
|
||||||||
|
|
Partner
|
|
Common Units
|
|
Subordinated Units
|
|
Total
|
||||||||
|
|
(in millions of dollars, except per unit data)
|
||||||||||||||
Distributions declared
|
|
$
|
2.1
|
|
|
$
|
41.5
|
|
|
$
|
38.5
|
|
|
$
|
82.1
|
|
Distributions in excess of income
|
|
0.6
|
|
|
14.5
|
|
|
12.9
|
|
|
28.0
|
|
||||
Net income attributable to the Partnership
|
|
$
|
2.7
|
|
|
$
|
56.0
|
|
|
$
|
51.4
|
|
|
$
|
110.1
|
|
Weighted average units outstanding (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted
|
|
|
|
72.6
|
|
|
67.5
|
|
|
|
||||||
Net income per Limited Partner Unit (in dollars):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted
|
|
|
|
|
$
|
0.77
|
|
|
$
|
0.77
|
|
|
|
|
•
|
A 92.5% ownership interest in Zydeco Pipeline Company LLC (“Zydeco”), which was wholly owned by SPLC prior to the IPO. Zydeco wholly owns the Houston-to-Houma crude oil pipeline system, or Ho-Ho, which is regulated by the Federal Energy Regulatory Commission, or FERC. Zydeco delivers primarily into the St. James and Clovelly, Louisiana markets. Zydeco is situated within the largest refining market in the United States.
|
•
|
A 28.6% ownership interest in Mars Oil Pipeline Company (“Mars”). Mars is a major corridor crude oil pipeline in a high-growth area of the offshore Gulf of Mexico, originating offshore in the deepwater Mississippi Canyon and terminating in salt dome caverns in Clovelly, Louisiana.
|
•
|
A 50.0% ownership interest in Bengal Pipeline Company LLC (“Bengal”). Bengal’s refined products pipeline connects four refineries in the St. Charles, Norco, Garyville and Convent areas of Louisiana with refined products storage tankage in Baton Rouge, Louisiana. Bengal also connects with the Plantation and Colonial pipelines, providing major market outlets to the East Coast from the Gulf Coast.
|
•
|
A 36.0% ownership interest in Poseidon Oil Pipeline Company, L.L.C. (“Poseidon”), a strategic link for central Gulf of Mexico oil to key markets in Louisiana (the “July 2015 Acquisition”).
|
•
|
A 6.0% ownership interest in Colonial Pipeline Company (“Colonial”). Colonial is the largest refined products pipeline in the United States, transporting refined products such as gasoline, diesel fuel and jet fuel, providing major market outlets to the East Coast from the Gulf Coast.
|
•
|
A 100% interest in Pecten Midstream LLC (“Pecten”). Pecten comprises a crude oil pipeline system located in the Gulf of Mexico (“Auger”) and a crude oil storage terminal located southwest of Chicago (“Lockport”).
|
•
|
A 2.62% interest in Explorer Pipeline Company (“Explorer”). Explorer transports gasoline, diesel, fuel oil and jet fuel from the Gulf Coast to the Midwest through its 1,830 mile pipeline, serving more than 70 major cities in 16 states (the "August 2016 Acquisition").
|
•
|
maintain utilization of and rates charged for our pipelines and storage facilities;
|
•
|
utilize the remaining uncommitted capacity on, or add additional capacity to, our pipeline systems;
|
•
|
increase throughput volumes on our pipeline systems by making connections to existing or new third party pipelines or other facilities, primarily driven by the anticipated supply of, and demand for, crude oil and refined products; and
|
•
|
identify and execute organic expansion projects.
|
•
|
our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing methods;
|
•
|
the ability of our business to generate sufficient cash to support our decision to make distributions to our unitholders;
|
•
|
our ability to incur and service debt and fund capital expenditures; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
•
|
Our ownership interest in Poseidon was not included in the results of operations for the first six months of the Comparable Period, as we accounted for this investment prospectively from our acquisition on July 1, 2015.
|
•
|
We acquired an additional 1.388% interest in Colonial effective April 1, 2015, increasing our ownership interest from 1.612% to 3.0%, and an additional 3.0% interest in Colonial effective April 1, 2016, increasing our ownership interest from 3.0% to 6.0%.
|
•
|
For both the Comparable Quarter and the Comparable Period, our ownership interest in Bengal was 49.0%. We acquired an additional 1.0% interest in Bengal effective April 1, 2016, increasing our ownership interest from 49.0% to 50.0%.
|
•
|
We acquired an additional 19.5% interest in Zydeco effective April 1, 2015, increasing our ownership interest from 43.0% to 62.5%, and an additional 30.0% interest in Zydeco effective April 1, 2016, increasing our ownership interest from 62.5% to 92.5%.
|
•
|
Our ownership interest in Explorer was not included in the results of operations until the Current Quarter, as we accounted for this investment prospectively from our acquisition on August 9, 2016.
|
1)
|
Deny index increases for any pipeline whose Form No. 6, Page 700 revenues exceed costs by 15 percent for both of the prior two years;
|
2)
|
Deny index increases that exceed by 5 percent the cost changes reported on Page 700; and
|
3)
|
Apply the new criteria to costs more closely associated with the pipeline’s proposed rates than with total company-wide costs and revenues now reported on Page 700.
|
Results of Operations
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
(1)
|
|
2016
|
|
2015
(1)
|
||||||||
(in millions of dollars)
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
67.9
|
|
|
$
|
96.2
|
|
|
$
|
215.7
|
|
|
$
|
241.9
|
|
Costs and expenses
|
|
|
|
|
|
|
|
||||||||
Operations and maintenance
|
16.7
|
|
|
16.7
|
|
|
49.0
|
|
|
46.2
|
|
||||
General and administrative
|
7.9
|
|
|
8.1
|
|
|
23.5
|
|
|
24.6
|
|
||||
Depreciation, amortization and accretion
|
6.0
|
|
|
5.4
|
|
|
17.7
|
|
|
16.0
|
|
||||
Property and other taxes
|
1.3
|
|
|
0.9
|
|
|
6.4
|
|
|
7.6
|
|
||||
Total costs and expenses
|
31.9
|
|
|
31.1
|
|
|
96.6
|
|
|
94.4
|
|
||||
Operating income
|
36.0
|
|
|
65.1
|
|
|
119.1
|
|
|
147.5
|
|
||||
Income from equity investments
|
21.4
|
|
|
24.1
|
|
|
70.2
|
|
|
47.4
|
|
||||
Dividend income from investment
|
4.2
|
|
|
2.7
|
|
|
11.6
|
|
|
6.6
|
|
||||
Other income
|
—
|
|
|
0.1
|
|
|
—
|
|
|
1.1
|
|
||||
Investment, dividend and other income
|
25.6
|
|
|
26.9
|
|
|
81.8
|
|
|
55.1
|
|
||||
Interest expense, net
|
2.8
|
|
|
1.7
|
|
|
7.8
|
|
|
2.2
|
|
||||
Income before income taxes
|
58.8
|
|
|
90.3
|
|
|
193.1
|
|
|
200.4
|
|
||||
Income tax expense
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
||||
Net income
|
58.8
|
|
|
90.6
|
|
|
193.1
|
|
|
200.4
|
|
||||
Less: Net income attributable to Parent
|
—
|
|
|
16.2
|
|
|
—
|
|
|
39.3
|
|
||||
Less: Net income attributable to noncontrolling interests
|
2.5
|
|
|
20.1
|
|
|
17.7
|
|
|
51.0
|
|
||||
Net income attributable to the Partnership
|
$
|
56.3
|
|
|
$
|
54.3
|
|
|
$
|
175.4
|
|
|
$
|
110.1
|
|
General partner's interest in net income attributable to the Partnership
|
$
|
7.2
|
|
|
$
|
1.5
|
|
|
$
|
15.3
|
|
|
$
|
2.7
|
|
Limited Partners' interest in net income attributable to the Partnership
|
$
|
49.1
|
|
|
$
|
52.8
|
|
|
$
|
160.1
|
|
|
$
|
107.4
|
|
Adjusted EBITDA attributable to the Partnership
(2)
|
$
|
68.0
|
|
|
$
|
57.1
|
|
|
$
|
210.6
|
|
|
$
|
122.6
|
|
Cash available for distribution
(2)
|
$
|
61.1
|
|
|
$
|
46.4
|
|
|
$
|
190.5
|
|
|
$
|
113.9
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
Pipeline throughput (thousands of barrels per day)
(2)
|
2016
|
|
2015
(1)
|
|
2016
|
|
2015
(1)
|
||||||||
Zydeco – Mainlines
|
545
|
|
|
562
|
|
|
548
|
|
|
555
|
|
||||
Zydeco – Other segments
|
517
|
|
|
516
|
|
|
462
|
|
|
533
|
|
||||
Zydeco total system
|
1,062
|
|
|
1,078
|
|
|
1,010
|
|
|
1,088
|
|
||||
Mars total system
|
461
|
|
|
382
|
|
|
385
|
|
|
335
|
|
||||
Bengal total system
|
537
|
|
|
566
|
|
|
549
|
|
|
552
|
|
||||
Poseidon total system
|
264
|
|
|
265
|
|
|
263
|
|
|
256
|
|
||||
Auger total system
|
103
|
|
|
158
|
|
|
117
|
|
|
135
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Terminals
(3)
|
|
|
|
|
|
|
|
||||||||
Lockport terminaling throughput and storage volumes
|
170
|
|
|
240
|
|
|
195
|
|
|
240
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Revenue per barrel ($ per barrel)
|
|
|
|
|
|
|
|
||||||||
Zydeco total system
(4)
|
$
|
0.53
|
|
|
$
|
0.59
|
|
|
$
|
0.58
|
|
|
$
|
0.56
|
|
Mars total system
(4)
|
1.17
|
|
|
1.54
|
|
|
1.41
|
|
|
1.55
|
|
||||
Bengal total system
(4)
|
0.35
|
|
|
0.35
|
|
|
0.34
|
|
|
0.34
|
|
||||
Auger total system
(4)
|
1.08
|
|
|
1.33
|
|
|
1.14
|
|
|
1.28
|
|
||||
Lockport total system
(5)
|
0.29
|
|
|
0.20
|
|
|
0.26
|
|
|
0.20
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in millions of dollars)
|
2016
|
|
2015
(1)
|
|
2016
|
|
2015
(1)
|
||||||||
Reconciliation of Adjusted EBITDA and Cash Available for Distribution to Net Income
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
58.8
|
|
|
$
|
90.6
|
|
|
$
|
193.1
|
|
|
$
|
200.4
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Depreciation, amortization and accretion
|
6.0
|
|
|
5.4
|
|
|
17.7
|
|
|
16.0
|
|
||||
Interest expense, net
|
2.8
|
|
|
1.7
|
|
|
7.8
|
|
|
2.2
|
|
||||
Income tax expense
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
||||
Cash distribution received from equity investments – Mars
|
11.5
|
|
|
7.7
|
|
|
34.5
|
|
|
24.9
|
|
||||
Cash distribution received from equity investments – Bengal
|
2.7
|
|
|
5.1
|
|
|
16.1
|
|
|
16.6
|
|
||||
Cash distribution received from equity investments – Poseidon
|
10.5
|
|
|
10.4
|
|
|
31.9
|
|
|
10.4
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Income from equity investments – Mars
|
8.6
|
|
|
10.5
|
|
|
31.7
|
|
|
23.6
|
|
||||
Income from equity investments – Bengal
|
5.2
|
|
|
5.6
|
|
|
15.9
|
|
|
15.8
|
|
||||
Income from equity investments – Poseidon
|
7.6
|
|
|
8.0
|
|
|
22.6
|
|
|
8.0
|
|
||||
Adjusted EBITDA
|
70.9
|
|
|
96.5
|
|
|
230.9
|
|
|
223.1
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA attributable to Parent
|
—
|
|
|
18.1
|
|
|
—
|
|
|
44.9
|
|
||||
Adjusted EBITDA attributable to noncontrolling interests
|
2.9
|
|
|
21.3
|
|
|
20.3
|
|
|
55.6
|
|
||||
Adjusted EBITDA attributable to the Partnership
|
68.0
|
|
|
57.1
|
|
|
210.6
|
|
|
122.6
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Net interest paid attributable to the Partnership
|
1.8
|
|
|
1.7
|
|
|
4.9
|
|
|
2.1
|
|
||||
Income taxes paid attributable to the Partnership
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Maintenance capex attributable to the Partnership
|
7.0
|
|
|
0.7
|
|
|
16.4
|
|
|
1.5
|
|
||||
Add:
|
|
|
|
|
|
|
|
||||||||
Net adjustments from volume deficiency payments attributable to the Partnership
|
0.8
|
|
|
(8.3
|
)
|
|
(0.4
|
)
|
|
(5.1
|
)
|
||||
Reimbursements from Parent included in partners' capital
|
1.1
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
||||
Cash available for distribution attributable to the Partnership
(2)
|
$
|
61.1
|
|
|
$
|
46.4
|
|
|
$
|
190.5
|
|
|
$
|
113.9
|
|
|
Nine Months Ended
September 30, 2016 |
||||||
|
2016
|
|
2015
(1)
|
||||
(in millions of dollars)
|
|
|
|
||||
Reconciliation of Adjusted EBITDA and Cash Available for Distribution to Net Cash Provided by Operating Activities
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
224.1
|
|
|
$
|
223.8
|
|
Add:
|
|
|
|
||||
Interest expense, net
|
7.8
|
|
|
2.2
|
|
||
Income tax expense
|
—
|
|
|
—
|
|
||
Return of investment
|
9.6
|
|
|
4.5
|
|
||
Less:
|
|
|
|
||||
Change in deferred revenue
|
(0.4
|
)
|
|
(7.3
|
)
|
||
Amortization of debt issuance cost
|
0.2
|
|
|
—
|
|
||
Allowance oil reduction to net realizable value
|
—
|
|
|
1.0
|
|
||
Change in other assets and liabilities
|
10.8
|
|
|
13.7
|
|
||
Adjusted EBITDA
|
230.9
|
|
|
223.1
|
|
||
Less:
|
|
|
|
||||
Adjusted EBITDA attributable to Parent
|
—
|
|
|
44.9
|
|
||
Adjusted EBITDA attributable to noncontrolling interests
|
20.3
|
|
|
55.6
|
|
||
Adjusted EBITDA attributable to the Partnership
|
210.6
|
|
|
122.6
|
|
||
Less:
|
|
|
|
||||
Net interest paid attributable to the Partnership
|
4.9
|
|
|
2.1
|
|
||
Maintenance capex attributable to the Partnership
|
16.4
|
|
|
1.5
|
|
||
Add:
|
|
|
|
||||
Net adjustments from volume deficiency payments attributable to the Partnership
|
(0.4
|
)
|
|
(5.1
|
)
|
||
Reimbursements from Parent included in partners' capital
|
1.6
|
|
|
—
|
|
||
Cash Available for Distribution attributable to the Partnership
(2)
|
$
|
190.5
|
|
|
$
|
113.9
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2016
|
|
2015
(1)
|
|
2016
|
|
2015
(1)
|
||||||||
(in millions of dollars)
|
|
|
|
|
|
|
|
|
||||||||
Expansion capital expenditures
|
|
$
|
0.2
|
|
|
$
|
2.3
|
|
|
$
|
3.5
|
|
|
$
|
4.5
|
|
Maintenance capital expenditures
|
|
7.3
|
|
|
3.0
|
|
|
17.8
|
|
|
6.7
|
|
||||
Total capital expenditures paid
|
|
7.5
|
|
|
5.3
|
|
|
21.3
|
|
|
11.2
|
|
||||
Increase (decrease) in accrued capital expenditures
|
|
(0.5
|
)
|
|
(1.5
|
)
|
|
(1.1
|
)
|
|
(0.4
|
)
|
||||
Total capital expenditures incurred
|
|
$
|
7.0
|
|
|
$
|
3.8
|
|
|
$
|
20.2
|
|
|
$
|
10.8
|
|
|
|
Actual Capital Expenditures
|
|
Expected Capital Expenditures
|
|
|
||||||
|
|
Nine Months Ended September 30, 2016
|
|
Three Months Ended December 31, 2016
|
|
Total Expected Capital Expenditures
|
||||||
(in millions of dollars)
|
|
|
|
|
|
|
||||||
Expansion capital expenditures
|
|
|
|
|
|
|
||||||
Zydeco
|
|
$
|
2.1
|
|
|
$
|
3.0
|
|
|
$
|
5.1
|
|
Total expansion capital expenditures
|
|
2.1
|
|
|
3.0
|
|
|
5.1
|
|
|||
Maintenance capital expenditures
|
|
|
|
|
|
|
||||||
Zydeco
|
|
11.1
|
|
|
6.3
|
|
|
17.4
|
|
|||
Lockport
|
|
3.9
|
|
|
1.6
|
|
|
5.5
|
|
|||
Auger
|
|
3.1
|
|
|
0.8
|
|
|
3.9
|
|
|||
Total maintenance capital expenditures
|
|
18.1
|
|
|
8.7
|
|
|
26.8
|
|
|||
Total capital expenditures
|
|
$
|
20.2
|
|
|
$
|
11.7
|
|
|
$
|
31.9
|
|
|
Total
|
|
Less than 1 year
|
|
Years 2 to 3
|
|
Years 4 to 5
|
|
More than 5 years
|
||||||||||
Operating lease for land
|
$
|
0.9
|
|
|
$
|
0.5
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Capital lease for Port Neches storage tanks
(1)
|
75.3
|
|
|
5.0
|
|
|
10.0
|
|
|
10.0
|
|
|
50.3
|
|
|||||
Joint tariff agreement
|
51.1
|
|
|
5.1
|
|
|
10.3
|
|
|
10.3
|
|
|
25.4
|
|
|||||
Debt obligation
|
344.9
|
|
|
—
|
|
|
—
|
|
|
344.9
|
|
|
—
|
|
|||||
Total
|
$
|
472.2
|
|
|
$
|
10.6
|
|
|
$
|
20.7
|
|
|
$
|
365.2
|
|
|
$
|
75.7
|
|
•
|
The continued ability of Shell and our non-affiliate customers to satisfy their obligations under our commercial and other agreements and the impact of lower market prices for oil, and refined products.
|
•
|
The volume of crude oil and refined petroleum products we transport or store and the prices that we can charge our customers.
|
•
|
The tariff rates with respect to volumes that we transport through our regulated assets, which rates are subject to review and possible adjustment or limitation imposed by federal and state regulators.
|
•
|
Changes in revenue we realize under the loss allowance provisions of our fees and tariffs resulting from changes in underlying commodity prices.
|
•
|
Fluctuations in the prices for crude oil and refined petroleum products.
|
•
|
The level of onshore and offshore (including deepwater) production and demand for crude by U.S. refiners.
|
•
|
Changes in global economic conditions and the effects of a global economic downturn on the business of Shell and the business of its suppliers, customers, business partners and credit lenders.
|
•
|
Liabilities associated with the risks and operational hazards inherent in transporting and storing crude oil and refined petroleum products.
|
•
|
Curtailment of operations or expansion projects due to unexpected leaks or spills, severe weather disruption; riots, strikes, lockouts or other industrial disturbances; or failure of information technology systems due to various causes, including unauthorized access or attack.
|
•
|
Costs or liabilities associated with federal, state and local laws and regulations relating to environmental protection and safety, including spills, releases and pipeline integrity.
|
•
|
Costs associated with compliance with evolving environmental laws and regulations on climate change.
|
•
|
Costs associated with compliance with safety regulations and system maintenance programs, including pipeline and tank integrity management program testing and related repairs.
|
•
|
Changes in the cost or availability of third-party vessels, pipelines, rail cars and other means of delivering and transporting crude oil and refined petroleum products.
|
•
|
Direct or indirect effects on our business resulting from actual or threatened terrorist incidents or acts of war.
|
•
|
Availability of acquisitions and financing for acquisitions on our expected timing and acceptable terms.
|
•
|
Changes in, and availability to us, of the equity and debt capital markets.
|
•
|
The factors generally described in Part I, Item 1A,
Risk Factors
of our 2015 Annual Report.
|
Exhibit
Number |
|
Exhibit Description
|
|
Incorporated by Reference
|
|
Filed
Herewith |
|
Furnished
Herewith |
||||||
Form
|
|
Exhibit
|
|
Filing Date
|
|
SEC
File No. |
|
|||||||
10.1
|
|
Share Sale and Purchase Agreement dated as of July 25, 2016 by and among Shell Pipeline Company LP, Shell Midstream Partners, L.P., and Shell Midstream Operating LLC
|
|
8-K
|
|
10.1
|
|
7/29/2016
|
|
001-36710
|
|
|
|
|
10.2
|
|
Purchase and Sale Agreement dated as of September 27, 2016 by and among Shell Pipeline Company LP, Equilon Enterprises LLC d/b/a Shell Oil Products US, Shell Midstream Partners, L.P., and Shell Midstream Operating LLC
|
|
8-K
|
|
10.1
|
|
9/27/2016
|
|
001-36710
|
|
|
|
|
10.3
|
|
Shell Midstream Partners Second Amended and Restated Credit Facility Agreement, dated as of September 27, 2016, between Shell Midstream Partners, L.P., as the Borrower, and Shell Treasury Center (West) Inc., as the Lender
|
|
8-K
|
|
10.2
|
|
9/27/2016
|
|
001-36710
|
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934
|
|
|
|
|
|
|
|
|
|
X
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934
|
|
|
|
|
|
|
|
|
|
X
|
|
|
32.1
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|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
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X
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32.2
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|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
|
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X
|
101.INS
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XBRL Instance Document
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X
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101.SCH
|
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XBRL Taxonomy Extension Schema
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X
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101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
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X
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|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
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X
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase
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X
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101.LAB
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XBRL Taxonomy Extension Label Linkbase
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X
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Date: November 3, 2016
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SHELL MIDSTREAM PARTNERS, L.P.
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By:
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SHELL MIDSTREAM PARTNERS GP LLC
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By:
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/s/ Susan M. Ward
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Susan M. Ward
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Vice President and Chief Financial Officer
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(principal financial officer and principal accounting officer)
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Exhibit
Number |
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Exhibit Description
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Incorporated by Reference
|
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Filed
Herewith |
|
Furnished
Herewith |
||||||
Form
|
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Exhibit
|
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Filing Date
|
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SEC
File No. |
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|||||||
10.1
|
|
Share Sale and Purchase Agreement dated as of July 25, 2016 by and among Shell Pipeline Company LP, Shell Midstream Partners, L.P., and Shell Midstream Operating LLC
|
|
8-K
|
|
10.1
|
|
7/29/2016
|
|
001-36710
|
|
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10.2
|
|
Purchase and Sale Agreement dated as of September 27, 2016 by and among Shell Pipeline Company LP, Equilon Enterprises LLC d/b/a Shell Oil Products US, Shell Midstream Partners, L.P., and Shell Midstream Operating LLC
|
|
8-K
|
|
10.1
|
|
9/27/2016
|
|
001-36710
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|
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|
10.3
|
|
Shell Midstream Partners Second Amended and Restated Credit Facility Agreement, dated as of September 27, 2016, between Shell Midstream Partners, L.P., as the Borrower, and Shell Treasury Center (West) Inc., as the Lender
|
|
8-K
|
|
10.2
|
|
9/27/2016
|
|
001-36710
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|
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31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934
|
|
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|
X
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31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934
|
|
|
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|
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|
X
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
|
|
|
|
|
|
|
|
|
|
|
|
X
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
|
|
|
|
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|
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|
|
|
|
|
X
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
|
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|
|
X
|
|
|
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