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Summary of Significant Accounting Policies | 12 Months Ended
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Dec. 31, 2018
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Significant Accounting Policies Basis of Presentation. Our consolidated financial statements include our refined products, crude oil and marine storage operating segments. We consolidate all entities in which we have a controlling ownership interest. We apply the equity method of accounting to investments in entities over which we exercise significant influence but do not control. We eliminate all intercompany transactions. Reclassifications. Prior year amounts related to restricted cash have been reclassified to conform with the current period’s presentation. Use of Estimates. The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities that exist at the date of our consolidated financial statements, as well as their impact on the reported amounts of revenue and expense during the reporting periods. Actual results could differ from those estimates. Cash Equivalents. Cash and cash equivalents include demand and time deposits and funds that own highly marketable securities with original maturities of three months or less when acquired. We periodically assess the financial condition of the institutions where we hold these funds, and, at December 31, 2017 and 2018, we believed our credit risk relative to these funds was minimal. Restricted Cash. Restricted cash includes cash held by us, which is contractually required to be used for the construction of fixed assets and is unavailable for general use. It is classified as noncurrent due to its designation to be used for the construction of noncurrent assets. Accounts Receivable and Allowance for Doubtful Accounts. Accounts receivable represent valid claims against customers. We recognize accounts receivable when we sell products or render services and collection of the receivable is probable. We extend credit terms to certain customers based on historical dealings and to other customers after a review of various credit indicators. We establish an allowance for doubtful accounts for all or any portion of an account where we consider collections to be at risk and evaluate reserves no less than quarterly to determine their adequacy. Judgments relative to at-risk accounts include the customers’ current financial condition, the customers’ historical relationship with us and current and projected economic conditions. We write off accounts receivable when we deem an account uncollectible. Product Overages and Shortages. Each period end we measure the volume of each type of product in our pipeline systems and terminals, which is compared to the volumes of our customers’ inventories (as adjusted for tender deductions). To the extent the product volumes in our pipeline systems and terminals exceed the volumes of our customers’ book inventories, we recognize a gain from the product overage and increase our product inventories. To the extent the product in our pipeline systems and terminals is less than our customers’ book inventories, we recognize a loss from the product shortage and we record a liability for product owed to our customers. The product overages we recognize are recorded based on market prices, and the resulting inventory is carried at weighted average cost. The product shortages we recognize are recorded based on our weighted average cost. Additionally, when product shortages result in a net short inventory position, the related liability is recorded based on period-end market prices. Product overages and shortages as well as adjustments to the value of net short inventory positions are recorded in operating expenses on our consolidated statements of income. Income Taxes. We are a partnership for income tax purposes and, therefore, are not subject to federal or state income taxes for most of the states in which we operate. The tax on our net income is borne by our limited partners through allocation to them of their share of taxable income. Net income for financial statement purposes may differ significantly from taxable income of unitholders because of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under our partnership agreement. The aggregate difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined because information regarding each partner’s tax attributes is not available to us. The amounts recognized as provision for income taxes in our consolidated statements of income are primarily comprised of partnership-level taxes levied by the state of Texas. This tax is based on revenues less direct costs of sale for our assets apportioned to the state of Texas. Net Income Per Unit. We calculate basic net income per limited partner unit for each period by dividing net income by the weighted-average number of limited partner units outstanding. The difference between our actual limited partner units outstanding and our weighted-average number of limited partner units outstanding used to calculate net income per limited partner unit is due to the impact of: (i) the phantom units issued to independent directors, which are included in the calculation of basic and diluted weighted average units outstanding and (ii) the weighted-average effect of units actually issued during a period. The difference between the weighted-average number of limited partner units outstanding used for basic and diluted net income per unit calculations on our consolidated statements of income is primarily the dilutive effect of phantom unit grants associated with our long-term incentive plan, which have not yet vested in periods where contingent performance metrics have been met. Correction of Actuarial Valuation Error. In 2018, an error was discovered in our third-party actuary’s valuation of our pension liabilities and net periodic pension expenses dating back to 2010. The impacts of the error were not material to any of our prior period financial statements and the cumulative impact was corrected in 2018. As a result, net periodic pension expenses were increased by $19.4 million ($7.8 million operating expense, $4.7 million general and administrative (“G&A”) costs and $6.9 million other (income) expense below operating profit on our consolidated statements of income). In addition, long-term pension and benefits was increased $22.2 million and accumulated other comprehensive loss was increased by $2.8 million on our consolidated balance sheets. Index of Additional Significant Accounting Policies
Revenue from Contracts with Customers |  | Note 3 – Revenue
Investments in Non-Controlled Entities |  | Note 5 – Investments in Non-Controlled Entities
Inventory |  | Note 6 – Inventory
Property, Plant and Equipment |  | Note 7 – Property, Plant and Equipment
Impairment of Long-Lived Assets |  | Note 7 – Property, Plant and Equipment
Goodwill and Other Intangible Assets |  | Note 7 – Property, Plant and Equipment
Pension and Postretirement Medical and Life Benefit Obligations |  | Note 9 – Employee Benefit Plans
Derivative Financial Instruments |  | Note 12 – Derivative Financial Instruments
Equity-Based Incentive Compensation |  | Note 14 – Long-Term Incentive Plan
Contingencies and Environmental |  | Note 16 – Commitments and Contingencies
New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This ASU requires lessees to recognize a right of use asset and lease liability on the balance sheet for all leases, with the exception of short-term leases. The new accounting model for lessors remains largely the same, although some changes have been made to align it with the new lessee model and the new revenue recognition guidance. This update also requires companies to include additional disclosures regarding their lessee and lessor agreements. For public companies, this ASU is effective for fiscal years that start after December 15, 2018, and early adoption is permitted. This standard will not have a material impact on our consolidated statements of income or our leverage ratio as defined in our credit agreement. Based on our current population of leases, we expect the impact of this ASU to increase our assets and liabilities by approximately $180.0 million due to the recognition of right of use assets and lease liabilities. New Accounting Pronouncements - Adopted by us on January 1, 2018 In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This update changes GAAP’s hedge accounting requirements to simplify some of the specialized treatment’s most complex areas. These simplifications are intended to expand opportunities to use hedge accounting and better align the accounting treatment with existing risk management activities. The ASU is effective for public companies starting after December 15, 2018, and we early-adopted the new standard on January 1, 2018. The adoption of this ASU did not have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments: A Consensus of the FASB Emerging Issues Task Force. This ASU includes a requirement to make an accounting policy election to classify distributions received from equity method investees under either (1) the cumulative earnings approach, where distributions in excess of equity earnings are considered a return of capital and classified as cash inflows from investing activities, or (2) the nature of the distribution approach, where each distribution is evaluated on the basis of the source of the payment and classified as either operating or investing cash inflows. We adopted this standard on January 1, 2018 using the retrospective transition method and made an accounting policy election to use the nature of the distribution approach, which resulted in the following adjustments to our December 31, 2016 and 2017 comparative statements of cash flows (in thousands):
|  | Year Ended December 31, 2016 |  | Year Ended December 31, 2017
|  | As Reported |  | ASU 2016-15 Adjustment |  | As Adjusted |  | As Reported |  | ASU 2016-15 Adjustment |  | As Adjusted
Operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Distributions from operations of non-controlled entities |  | $ | 78,723 |  |  | $ | 9,264 |  |  | $ | 87,987 |  |  | $ | 123,660 |  |  | $ | 22,551 |  |  | $ | 146,211 |
Net cash provided by operating activities |  | $ | 964,040 |  |  | $ | 9,264 |  |  | $ | 973,304 |  |  | $ | 1,108,678 |  |  | $ | 22,551 |  |  | $ | 1,131,229 |
Investing activities: |  |  |  |  |  |  |  |  |  |  |  |
Distributions from returns of investments in non-controlled entities |  | $ | 9,264 |  |  | $ | (9,264 | ) |  | $ | — |  |  | $ | 78,482 |  |  | $ | (22,551 | ) |  | $ | 55,931 |
Net cash used by investing activities |  | $ | (857,366 | ) |  | $ | (9,264 | ) |  | $ | (866,630 | ) |  | $ | (570,623 | ) |  | $ | (22,551 | ) |  | $ | (593,174 | )
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU amends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer of goods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services. On January 1, 2018, we adopted the new Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers and all related amendments using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of partners’ capital. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet resulting from the adoption of the new revenue standard was as follows (in thousands):
|  | Balance at December 31, 2017 |  | Adjustments Due to ASU 2014-09 |  | Balance at January 1, 2018
Assets: |  |  |  |  |  |
Property, plant and equipment |  | $ | 7,235,468 |  |  | $ | 8,516 |  |  | $ | 7,243,984 |
Accumulated depreciation |  | (1,682,633 | ) |  | (325 | ) |  | (1,682,958 | )
Net property, plant and equipment |  | $ | 5,552,835 |  |  | $ | 8,191 |  |  | $ | 5,561,026 |
Investments in non-controlled entities |  | $ | 1,082,511 |  |  | $ | 502 |  |  | $ | 1,083,013 |
Liabilities: |  |  |  |  |  |
Deferred revenue |  | $ | 117,795 |  |  | $ | (1,901 | ) |  | $ | 115,894 |
Other noncurrent liabilities |  | $ | 30,350 |  |  | $ | 4,619 |  |  | $ | 34,969 |
Partners’ capital: |  |  |  |  |  |
Limited partner unitholders |  | $ | 2,267,231 |  |  | $ | 5,975 |  |  | $ | 2,273,206 |
The primary changes impacting our financial statements under the new revenue standard include the requirement for us to estimate deficiencies in our customers’ use of our services contracted as minimum commitments and adjust the amount of revenue recognized in proportion to our customers’ pattern of exercised rights. This change results in accelerating the timing of revenue recognized for specific contracts for which we estimate our customers will not ship their minimum commitments. In addition, we periodically receive payments from customers seeking to expand their access to our pipeline systems and terminals. Prior to the adoption of the new revenue standard, these payments were recorded as reductions to our property, plant and equipment (“PP&E”) expenditures. Under the new revenue standard, these payments are recorded to deferred revenue and other noncurrent liabilities and are recognized as revenue in proportion to the related services provided. The impact of this change increases our revenues, contract liabilities, PP&E and depreciation expense. We expect the impact of the adoption of the new revenue standard, including these changes, to be immaterial to our net income on an ongoing basis.

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