Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 10, 2020 | Jun. 30, 2019 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Cypress Environmental Partners, L.P. | ||
Entity Central Index Key | 0001587246 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-36260 | ||
Entity Incorporation, State Code | DE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 12,177,902 | ||
Entity Public Float | $ 31,438,258 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 15,700 | $ 15,380 |
Trade accounts receivable, net | 52,524 | 48,789 |
Prepaid expenses and other | 988 | 1,396 |
Total current assets | 69,212 | 65,565 |
Property and equipment: | ||
Property and equipment, at cost | 26,499 | 23,988 |
Less: Accumulated depreciation | 13,738 | 11,266 |
Total property and equipment, net | 12,761 | 12,722 |
Intangible assets, net | 20,063 | 22,759 |
Goodwill | 50,356 | 50,294 |
Finance lease right-of-use assets, net | 600 | |
Operating lease right-of-use assets | 2,942 | |
Debt issuance costs, net | 803 | 1,260 |
Other assets | 605 | 253 |
Total assets | 157,342 | 152,853 |
Current liabilities: | ||
Accounts payable | 3,529 | 4,848 |
Accounts payable - affiliates | 1,167 | 4,060 |
Accrued payroll and other | 14,850 | 12,276 |
Income taxes payable | 1,092 | 737 |
Finance lease obligations | 183 | 90 |
Operating lease obligations | 459 | |
Total current liabilities | 21,280 | 22,011 |
Long-term debt | 74,929 | 76,129 |
Finance lease obligations | 359 | 248 |
Operating lease obligations | 2,425 | |
Other noncurrent liabilities | 158 | 178 |
Total liabilities | 99,151 | 98,566 |
Commitments and contingencies - Note 13 | ||
Partners' capital: | ||
Common units (12,068 and 11,947 units outstanding at December 31, 2019 and 2018, respectively) | 37,334 | 34,677 |
Preferred units (5,769 units outstanding at December 31, 2019 and 2018) | 44,291 | 44,291 |
General partner | (25,876) | (25,876) |
Accumulated other comprehensive loss | (2,577) | (2,414) |
Total partners' capital | 53,172 | 50,678 |
Noncontrolling interests | 5,019 | 3,609 |
Total owners' equity | 58,191 | 54,287 |
Total liabilities and owners' equity | $ 157,342 | $ 152,853 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares shares in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common units outstanding (in shares) | 12,068 | 11,947 |
Preferred units outstanding (in shares) | 5,769 | 5,769 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | $ 401,648 | $ 314,960 | $ 286,342 |
Costs of services | 347,924 | 270,914 | 252,739 |
Gross margin | 53,724 | 44,046 | 33,603 |
Operating costs and expense: | |||
General and administrative | 25,626 | 23,744 | 21,055 |
Depreciation, amortization and accretion | 4,448 | 4,404 | 4,443 |
Impairments | 3,598 | ||
Gain on asset disposals, net | (25) | (4,108) | (570) |
Operating income | 23,675 | 20,006 | 5,077 |
Other income (expense): | |||
Interest expense, net | (5,330) | (6,206) | (7,335) |
Debt issuance cost write-off | (114) | ||
Foreign currency gains (losses) | 222 | (643) | 732 |
Other, net | 1,111 | 373 | 199 |
Net income (loss) before income tax expense | 19,678 | 13,416 | (1,327) |
Income tax expense | 2,254 | 1,318 | 596 |
Net income (loss) | 17,424 | 12,098 | (1,923) |
Net income (loss) attributable to noncontrolling interests | 1,410 | 685 | (1,110) |
Net income (loss) attributable to partners / controlling interests | 16,014 | 11,413 | (813) |
Net loss attributable to general partner | (4,050) | ||
Net income attributable to limited partners | 16,014 | 11,413 | 3,237 |
Net income attributable to preferred unitholder | 4,133 | 2,445 | |
Net income attributable to common unitholders | $ 11,881 | $ 8,968 | $ 3,237 |
Net income per common limited partner unit: | |||
Basic (in dollars per unit) | $ 0.99 | $ 0.75 | $ 0.29 |
Diluted (in dollars per unit) | $ 0.88 | $ 0.72 | $ 0.29 |
Weighted average common units outstanding: | |||
Basic (in units) | 12,039 | 11,929 | 11,152 |
Diluted (in units) | 18,289 | 15,757 | 11,253 |
Noncontrolling Interests [Member] | |||
Other income (expense): | |||
Net income (loss) | $ 1,410 | $ 685 | $ (1,110) |
Subordinated Units [Member] | |||
Weighted average common units outstanding: | |||
Net income per subordinated limited partner unit - basic and diluted | |||
Weighted average subordinated units outstanding - basic and diluted (in units) | 729 | ||
Common Units [Member] | |||
Other income (expense): | |||
Net income (loss) | $ 11,881 | 8,968 | $ 3,237 |
Preferred Units [Member] | |||
Other income (expense): | |||
Net income (loss) | $ 4,133 | $ 2,445 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 17,424 | $ 12,098 | $ (1,923) |
Other comprehensive income (loss) - foreign currency translation | (163) | 263 | (139) |
Comprehensive income (loss) | 17,261 | 12,361 | (2,062) |
Comprehensive income attributable to preferred unitholders | 4,133 | 2,445 | |
Comprehensive income (loss) attributable to noncontrolling interests | 1,410 | 685 | (1,110) |
Comprehensive loss attributable to general partner | (4,050) | ||
Comprehensive income attributable to common unitholders | $ 11,718 | $ 9,231 | $ 3,098 |
Consolidated Statement of Owner
Consolidated Statement of Owners' Equity - USD ($) $ in Thousands | General Partner [Member] | Common Units [Member] | Preferred Units [Member] | Subordinated Units [Member] | Accumulated Other Comprehensive Gain (Loss) [Member] | Noncontrolling Interests [Member] | Total |
Owners' equity, beginning at Dec. 31, 2016 | $ (25,876) | $ (7,722) | $ 50,474 | $ (2,538) | $ 5,050 | $ 19,388 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (4,050) | 3,237 | (1,110) | (1,923) | |||
Foreign currency translation adjustment | (139) | (139) | |||||
Contributions attributable to General Partner | 4,050 | 4,050 | |||||
Distributions | (9,905) | (2,405) | (16) | (12,326) | |||
Conversion of Subordinated Units to Common Units | 48,111 | (48,111) | |||||
Equity-based compensation | 1,017 | $ 42 | 1,059 | ||||
Taxes paid related to net share settlement of equity-based compensation | (124) | (124) | |||||
Owners' equity, ending at Dec. 31, 2017 | (25,876) | 34,614 | (2,677) | 3,924 | 9,985 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 8,968 | $ 2,445 | 685 | 12,098 | |||
Issuance of preferred units, net | 43,258 | 43,258 | |||||
Foreign currency translation adjustment | 263 | 263 | |||||
Distributions | (10,019) | (1,412) | (1,000) | (12,431) | |||
Equity-based compensation | 1,247 | 1,247 | |||||
Taxes paid related to net share settlement of equity-based compensation | (133) | (133) | |||||
Owners' equity, ending at Dec. 31, 2018 | (25,876) | 34,677 | 44,291 | (2,414) | 3,609 | 54,287 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 11,881 | 4,133 | 1,410 | 17,424 | |||
Foreign currency translation adjustment | (163) | (163) | |||||
Distributions | (10,109) | (4,133) | (14,242) | ||||
Equity-based compensation | 1,107 | 1,107 | |||||
Taxes paid related to net share settlement of equity-based compensation | (222) | (222) | |||||
Owners' equity, ending at Dec. 31, 2019 | $ (25,876) | $ 37,334 | $ 44,291 | $ (2,577) | $ 5,019 | $ 58,191 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities: | |||
Net income (loss) | $ 17,424 | $ 12,098 | $ (1,923) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation, amortization and accretion | 5,537 | 5,480 | 5,544 |
Impairments | 3,598 | ||
Gain on asset disposals, net | (25) | (4,108) | (570) |
Interest expense from debt issuance cost amortization | 533 | 560 | 594 |
Debt issuance cost write-off | 114 | ||
Equity-based compensation expense | 1,107 | 1,247 | 1,059 |
Equity in earnings of investee | (214) | (217) | (149) |
Distributions from investee | 75 | 175 | 75 |
Deferred tax (expense) benefit, net | (36) | 51 | (372) |
Non-cash allocated expenses | 1,750 | ||
Foreign currency (gains) losses | (222) | 643 | (732) |
Gain on litigation settlement | (1,254) | ||
Loss on sale of accounts receivable | 515 | ||
Changes in assets and liabilities: | |||
Trade accounts receivable | (4,247) | (7,165) | (3,406) |
Prepaid expenses and other | 136 | 1,004 | (1,321) |
Accounts payable and accounts payable - affiliates | (3,681) | 2,273 | 2,947 |
Accrued payroll and other | 2,175 | 3,167 | 1,524 |
Income taxes payable | 356 | 87 | (365) |
Net cash provided by operating activities | 18,179 | 15,409 | 8,253 |
Investing activities: | |||
Proceeds from fixed asset disposals, including insurance proceeds | 43 | 12,769 | 2,304 |
Purchases of property and equipment | (1,976) | (5,762) | (3,345) |
Net cash (used in) provided by investing activities | (1,933) | 7,007 | (1,041) |
Financing activities: | |||
Issuance of preferred units, net of issuance costs | 43,258 | ||
Borrowings on credit facility | 7,800 | 2,500 | |
Payments on credit facility | (9,000) | (63,271) | |
Debt issuance cost payments | (75) | (1,327) | |
Repayments on finance lease obligations | (191) | (62) | |
Taxes paid related to net share settlement of equity-based compensation | (222) | (133) | (124) |
Contributions from general partner | 2,300 | ||
Distributions | (14,242) | (12,431) | (12,326) |
Net cash used in financing activities | (15,930) | (31,466) | (10,150) |
Effect of exchange rates on cash | 4 | (17) | 753 |
Net increase (decrease) in cash and cash equivalents | 320 | (9,067) | (2,185) |
Cash and cash equivalents, beginning of period (includes restricted cash equivalents of $551 at December 31, 2018 and $490 at December 31, 2017 and 2016) | 15,931 | 24,998 | 27,183 |
Cash and cash equivalents, end of period (includes restricted cash equivalents of $551 at December 31, 2019 and 2018, and $490 at December 31, 2017) | 16,251 | 15,931 | 24,998 |
Non-cash items: | |||
Accounts payable and accrued payroll and other excluded from capital expenditures | 1,148 | 25 | 567 |
Acquisitions of finance leases included in liabilities | 357 | 400 | |
Supplemental cash flow disclosures: | |||
Cash taxes paid | 1,980 | 1,174 | 1,350 |
Cash interest paid | $ 4,783 | $ 5,781 | $ 6,842 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Cash Flows [Abstract] | ||||
Restricted cash equivalents | $ 551 | $ 551 | $ 490 | $ 490 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | 1. Organization and Operations Cypress Environmental Partners, L.P. (“we”, “us”, “our”, or the “Partnership”) is a Delaware limited partnership formed in 2013. We offer essential services that help protect the environment and ensure sustainability. We provide a wide range of environmental services including independent inspection, integrity, and support services for pipeline and energy infrastructure owners and operators and public utilities. We also provide water pipelines, hydrocarbon recovery, disposal, and water treatment services. Trading of our common units began January 15, 2014 on the New York Stock Exchange under the symbol “CELP”. Our business is organized into the Pipeline Inspection Services (“Pipeline Inspection”), Pipeline & Process Services (“Pipeline & Process Services”), and Water and Environmental Services (“Environmental Services”) segments. The Pipeline Inspection segment generates revenue primarily by providing essential environmental services including inspection and integrity services on a variety of infrastructure assets including midstream pipelines, gathering systems, and distribution systems. Services include nondestructive examination, in-line inspection support, pig tracking, survey, data gathering, and supervision of third-party contractors. Our results in this segment are driven primarily by the number of inspectors that perform services for our customers and the fees that we charge for those services, which depend on the type, skills, technology, equipment, and number of inspectors used on a particular project, the nature of the project, and the duration of the project. The number of inspectors engaged on projects is driven by the type of project, prevailing market rates, the age and condition of customers’ assets including pipelines, gas plants, compression stations, storage facilities, and gathering and distribution systems including the legal and regulatory requirements relating to the inspection and maintenance of those assets. We also bill our customers for per diem charges, mileage, and other reimbursement items. Revenue and costs in this segment may be subject to seasonal variations and interim activity may not be indicative of yearly activity considering that many of our customers develop yearly operating budgets and enter into contracts with us during the winter season for work to be performed during the remainder of the year. Additionally, inspection work throughout the United States during the winter months (especially in the northern states) may be hampered or delayed due to inclement weather. The Pipeline & Process Services segment generates revenue primarily by providing essential environmental services including hydrostatic testing services and chemical cleaning to energy companies and pipeline construction companies of newly-constructed and existing pipelines and related infrastructure. We generally charge our customers in this segment on a fixed-bid basis, depending on the size and length of the pipeline being tested, the complexity of services provided, and the utilization of our work force and equipment. Our results in this segment are driven primarily by the number of field personnel that perform services for our customers and the fees that we charge for those services, which depend on the type and number of field personnel used on a particular project, the type of equipment used and the fees charged for the utilization of that equipment, and the nature and duration of the project. Revenue and costs in this segment may be subject to seasonal variations and interim activity may not be indicative of yearly activity, considering that many of our customers develop yearly operating budgets and enter into contracts with us for work to be performed during the remainder of the year. Additionally, field work during the winter months may be hampered or delayed due to inclement weather. The Environmental Services segment owns and operates nine (9) water treatment facilities with ten (10) EPA Class II injection wells in the Bakken shale region of the Williston Basin in North Dakota. These water treatment facilities are connected to twelve (12) pipeline gathering systems, including two (2) that we developed and own. We specialize in the treatment, recovery, separation, and disposal of waste byproducts generated during the lifecycle of an oil and natural gas well to protect the environment and our drinking water. All of the water treatment facilities utilize specialized equipment and remote monitoring to minimize the facilities’ downtime and increase the facilities’ efficiency for peak utilization. Revenue is generated on a fixed-fee per barrel basis for receiving, separating, filtering, recovering, processing, and injecting produced and flowback water. We also sell recovered oil, receive fees for pipeline transportation of water, and receive fees from a partially owned water treatment facility for management and staffing services (see Note 11). The volumes of water processed at our water treatment facilities are driven by water volumes generated from existing oil and natural gas wells during their useful lives and development drilling. Producers’ willingness to engage in new drilling is determined by a number of factors, the most important of which are the current and projected prices of oil, natural gas, and natural gas liquids; the cost to drill and operate a well; the availability and cost of capital; and environmental and governmental regulations. We generally expect the level of drilling to correlate with long-term trends in prices of oil, natural gas, and natural gas liquids. We also generate revenues from the sale of residual oil recovered during the water treatment process. Our ability to recover residual oil is dependent upon the residual oil content in the saltwater we treat, which is, among other things, a function of water type, chemistry, source, and temperature. Generally, where outside temperatures are lower, there is less residual oil content and separation is more difficult. Thus, our residual oil recovery during the winter is usually lower than our recovery during the summer. Additionally, residual oil content can decrease based on the following factors, among others: an increase in pipeline water as operators control the flow of pipeline water and an increase in residual oil recovered in saltwater by producers prior to delivering the saltwater to us for treatment. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying Consolidated Financial Statements include our accounts and those of our controlled subsidiaries. All intercompany transactions and account balances have been eliminated in consolidation. Investments over which we exercise significant influence, but do not control, are accounted for using the equity method of accounting. The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for consolidated financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. The Consolidated Financial Statements include all adjustments considered necessary for a fair presentation of the financial position and results of operations for the periods presented. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates. Areas requiring the use of assumptions, judgments, and estimates include, among others, amounts of expected future cash flows used in determining possible impairments of property and equipment, intangible assets, and goodwill; the determination of fair values of assets acquired and liabilities assumed in business combinations; the allocation of goodwill to disposals of assets; the amount and timing of future asset retirement obligations; and the useful lives of property, equipment and intangible assets. Certain estimates are inherently imprecise and may change as future information becomes available. The use of alternative judgments and/or assumptions could result in different outcomes. Fair Value Measurement We utilize fair value measurements to measure assets in a business combination or assess impairment of property and equipment, intangible assets, and goodwill. Fair value is the amount received from the sale of an asset or the amount paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date. Fair value is a market-based measurement considered from the perspective of a market participant. We use market data or assumptions that we believe market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation. These inputs can be readily observable, market corroborated, or unobservable. We apply both market and income approaches for fair value measurements using the best available information while utilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy in GAAP prioritizes the inputs used to measure fair value, giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Partnership classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows: ● Level 1 ● Level 2 ● Level 3 Contributions Attributable to General Partner During 2017, Holdings incurred overhead expenses on our behalf totaling $1.8 million. These costs represent administrative expenses incurred by Holdings in excess of amounts charged to us under our omnibus agreement. These expenses are reflected as general and administrative net loss attributable to general partner contributions attributable to general partner In addition to incurring the expenses described above, Holdings provided us with additional financial support by making cash contributions of $2.3 million in 2017 as a reimbursement for certain expenditures incurred by us. These cash contributions are reflected as a contribution attributable to general partner net loss attributable to general partner Cash and Cash Equivalents We consider all investments purchased with initial maturities of three months or less to be cash equivalents. Cash equivalents consist primarily of investments in highly-liquid securities. The carrying amounts of cash and cash equivalents reported in the balance sheet approximate fair value. As of December 31, 2019, U.S. cash balances are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per financial institution. Canadian cash balances are insured by the Canada Deposit Insurance Corporation (CDIC) up to $100,000 (Canadian Dollars) per financial institution. Our cash is primarily held at three financial institutions, and therefore is in excess of the FDIC or CDIC insurance limits. We periodically assess the financial condition of the institutions where we deposit funds. Restricted Cash Restricted cash was approximately $0.6 million at December 31, 2019 and 2018, respectively. These amounts are included in prepaid expenses and other Accounts Receivable, Allowance for Bad Debts and Concentration of Credit Risk We grant unsecured credit to customers under normal industry standards and terms, and have established policies and procedures that allow for an evaluation of each of our customer’s creditworthiness. We typically receive payment from our customers 45 to 90 days after the services have been performed. We determine allowances for bad debts based on management’s assessment of the creditworthiness of our customers. Trade receivables are written off against the allowance when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when cash is received. We do not typically charge interest on past due trade receivables nor do we require collateral on our trade receivables. We had an allowance for doubtful accounts of $0.2 million and less than $0.1 million at December 31, 2019 and 2018, respectively. We recorded bad debt expense of $0.2 million in 2019 and less than $0.1 million in 2018 and 2017. In 2019 and 2017, we received $0.1 million and $0.3 million, respectively, on accounts receivable previously written off which we recorded as a reduction to general and administrative We had four customers, Pacific Gas & Electric Company, Plains All American Pipeline L.P., ONEOK, Inc. and Phillips 66 that represented more than 10% of total accounts receivable as of December 31, 2019. The majority of our revenues are generated in the United States. Total revenues generated in Canada were $0.2 million, $1.3 million, and $23.4 million in 2019, 2018, and 2017, respectively. Pacific Gas and Electric Bankruptcy PG&E Corporation and its wholly-owned subsidiary Pacific Gas and Electric Company (collectively, “PG&E”) filed for bankruptcy protection on January 29, 2019. As of December 31, 2018, the assets on our Consolidated Balance Sheet included $10.3 million of accounts receivable from PG&E. We collected $1.0 million of this balance in January 2019 prior to PG&E’s bankruptcy filing. We generated $2.8 million of revenue from PG&E during the period from January 1, 2019 through January 28, 2019, bringing the total accounts receivable from PG&E to $12.1 million as of the date of the bankruptcy filing. In November 2019, we sold $10.4 million of our pre-petition receivables from PG&E in a non-recourse sale to a third party for cash proceeds of $9.8 million. We recorded a loss of $0.5 million in the fourth quarter of 2019 on the sale of these pre-petition receivables reported within Other, net Sanchez Bankruptcy Sanchez Energy Corporation and certain of its affiliates (collectively, “Sanchez”), a former customer, filed for bankruptcy protection in August 2019. As of December 31, 2019, our Consolidated Balance Sheet included $0.5 million of pre-petition accounts receivable from Sanchez. We have recorded an allowance of less than $0.1 million at December 31, 2019 against the accounts receivable from Sanchez. We do not believe it is probable that we will be unable to collect the remaining $0.4 million balance of the pre-petition receivables. However, due to uncertainties associated with the bankruptcy process, we cannot make assurances regarding the ultimate collection of these receivables nor can we make assurances regarding the timing of any such collections. Property and Equipment Property and equipment consists of land, land and leasehold improvements, buildings, facilities, wells and related equipment, field equipment, computer and office equipment, and vehicles. We record property and equipment at cost. Costs of renewals and improvements that substantially extend the useful lives of the assets are capitalized. Maintenance and repairs are expensed as incurred. We depreciate property and equipment on a straight-line basis over the estimated useful lives of the assets. Upon retirement, disposition, or impairment of an asset, we remove the cost and related accumulated depreciation from the balance sheet and report the resulting gain or loss, if any, in the Consolidated Statement of Operations. Debt Issuance Costs Debt issuance costs represent fees and expenses associated with securing our Credit Agreement (see Note 6). Amortization of the capitalized debt issuance costs is recorded on a straight-line basis over the term of the Credit Agreement. Income Taxes As a limited partnership, we generally are not subject to federal, state or local income taxes. The tax on our net income is generally borne by the individual partners. Net income (loss) for financial statement purposes may differ significantly from taxable income (loss) of the partners as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under our partnership agreement. The aggregated difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined because information regarding each partner’s tax attributes is not available to us. The income of Tulsa Inspection Resources – Canada, ULC, our Canadian subsidiary, is taxable in Canada. Tulsa Inspection Resources – PUC, LLC (“TIR-PUC”), a subsidiary of our Pipeline Inspection segment that performs pipeline inspection services for utility customers, and Cypress Brown Integrity - PUC, LLC, a 51% owned subsidiary, have elected to be taxed as corporations for U.S. federal income tax purposes, and therefore these subsidiaries are subject to U.S. federal and state income taxes. The amounts recognized as income tax expense, income taxes payable, and deferred tax liabilities in our Consolidated Financial Statements represent the Canadian and U.S. taxes referred to above, as well as partnership-level taxes levied by various states, most notably, franchise taxes assessed by the state of Texas. As a publicly-traded partnership, we are subject to a statutory requirement that at least 90% of our total gross income is classified as “qualifying income” (as defined by the Internal Revenue Code, related Treasury Regulations, and Internal Revenue Service pronouncements), determined on a calendar year basis. If our qualifying income does not meet this statutory requirement, we could be taxed as a corporation for federal and state income tax purposes. Our income has met the statutory qualifying income requirement for each year since our IPO. We evaluate uncertain tax positions for recognition and measurement in the Consolidated Financial Statements. To recognize a tax position, we determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation, based on the technical merits of the position. A tax position that meets the more likely than not threshold is measured to determine the amount of benefit to be recognized in the Consolidated Financial Statements. The amount of tax benefit recognized with respect to any tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon settlement. We had no uncertain tax positions that required recognition in the financial statements at December 31, 2019 or 2018. Any interest or penalties would be recognized as a component of income tax expense. Revenue Recognition Under Accounting Standards Codification (“ASC”) 606 - Revenue from Contracts with Customers In the third quarters of 2019 and 2018, we recognized $0.2 million and $0.5 million of revenue within our Pipeline Inspection segment, respectively, on services performed in previous years. We had constrained recognition of this revenue until the expiration of a contract provision that had given the customer the opportunity to reopen negotiation of the fee paid for the services. As of December 31, 2019 and December 31, 2018, we recognized a refund liability of $0.7 million and $0.4 million within our Pipeline Inspection segment, respectively, for revenue associated with such variable consideration. In the first quarter of 2018, we recognized $0.3 million of revenue within our Pipeline & Process Services segment associated with additional billings on a project that we completed in the fourth quarter of 2017 (we recognized the revenue upon receipt of customer acknowledgment of the additional fees). Accrued Payroll and Other Accrued payroll and other December 31, 2019 December 31, 2018 (in thousands) Accrued payroll $ 9,670 $ 9,468 Customer deposits 1,682 1,202 Litigation settlement (Note 13) 1,900 — Other 1,598 1,606 $ 14,850 $ 12,276 Fair Value of Financial Instruments The carrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents; trade accounts receivable, net; prepaid expenses and other; accounts payable; accounts payable – affiliates; accrued payroll and other; and income taxes payable approximate their fair values. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are reported at fair value on a nonrecurring basis in our Consolidated Balance Sheets. The following methods and assumptions were used to estimate the fair values: Property, Plant, and Equipment We assess property and equipment for possible impairment whenever events or changes in circumstances indicate, in the judgment of management, that the carrying value of the assets may not be recoverable. Such indicators include, among others, the nature of the asset, the projected future economic benefit of the asset, changes in regulatory and political environments, and historical and future cash flow and profitability measurements. If the carrying value of an asset exceeds the future undiscounted cash flows expected from the asset, we recognize an impairment charge for the excess of carrying value of the asset over its estimated fair value. Determination as to whether and how much an asset is impaired involves management estimates on highly uncertain matters such as future commodity prices, the effects of inflation on operating expenses, and the outlook for national or regional market supply and demand for the services we provide. Assets are grouped for impairment purposes at each water treatment facility in the Environmental Services segment, as these asset groups represent the lowest level at which cash flows are separately identifiable. Goodwill At December 31, 2019 and 2018, we had $50.4 million and $50.3 million, respectively, of goodwill on our Consolidated Balance Sheets. Goodwill is not amortized, but is subject to annual assessments on November 1 (or at other dates if events or changes in circumstances indicate that the carrying value of goodwill may be impaired) for impairment at a reporting unit level. The reporting units used to evaluate and measure goodwill for impairment are determined primarily from the manner in which the business is managed or operated. We have determined that our Pipeline Inspection, Pipeline & Process Services, and Environmental Services operating segments are the appropriate reporting units for testing goodwill impairment. To perform a goodwill impairment assessment, we first evaluate qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit exceeds its carrying value. If this assessment reveals that it is more likely than not that the carrying value of a reporting unit exceeds its fair value, we then determine the estimated fair market value of the reporting unit. If the carrying amount exceeds the reporting unit’s fair value, we record a goodwill impairment charge for the excess (not exceeding the carrying value of the reporting unit’s goodwill). Identifiable Intangible Assets Our intangible assets consist primarily of customer relationships, trade names, and our database of inspectors. We recorded these intangible assets as part of our accounting for the acquisitions of businesses and we amortize these assets on a straight-line basis over their estimated useful lives, which typically range from 5 – 20 years (see Note 5). We review our intangible assets for impairment whenever events or circumstances indicate that the asset group to which they relate may be impaired. To perform an impairment assessment, we first determine whether the cash flows expected to be generated from the asset group exceed the carrying value of the asset group. If such estimated cash flows do not exceed the carrying value of the asset group, we reduce the carrying value of the assets to their fair values and record a corresponding impairment loss. Depending on future events, it is reasonably possible that we could incur impairment charges associated with our property and equipment, goodwill, or intangible assets. Noncontrolling Interest We own a 51% interest in Brown and a 49% interest in CF Inspection Management, LLC (“CF Inspection”). The accounts of these subsidiaries are included in our Consolidated Financial Statements. The portion of the net income (loss) of these entities that is attributable to outside owners is reported in net income (loss) attributable to noncontrolling interests noncontrolling interests Business Combinations We evaluate all potential acquisitions and changes in control to determine whether we have purchased or acquired control of a business. If the acquired or newly-controlled assets meet the definition of a business, the transaction is accounted for as a business combination; otherwise it is accounted for as an asset acquisition. Gains on Asset Disposals During 2018, we sold our two water treatment facilities in Texas and recorded a combined gain of $3.6 million. During 2018, we received proceeds of $0.4 million from the settlement of litigation related to lightning strikes that occurred in 2017 at our facilities in Orla, Texas and Grassy Butte, North Dakota. This litigation related to the non-performance of certain lightning protection equipment we had purchased to protect the facilities against lightning strikes. The proceeds from these settlements are reported within gain on asset disposals, net During 2017, lightning strikes and the resultant fires destroyed the surface equipment at two of our facilities. We carried property damage and cleanup insurance on both facilities, and the proceeds we received on these policies were in excess of the net book value of the destroyed property and the cleanup costs we incurred. We recorded a net gain of $0.6 million in 2017 related to these incidents, reported within gain on asset disposals, net Foreign Currency Translation Our Consolidated Financial Statements are reported in U.S. dollars. We translate our Canadian-dollar-denominated assets and liabilities into U.S. dollars at the exchange rate in effect at the balance sheet date. We translate our Canadian-dollar-denominated revenues and expenses into U.S. dollars at the average exchange rate in effect during the period. Our Consolidated Balance Sheet at December 31, 2019 includes $2.6 million of accumulated other comprehensive loss accumulated other comprehensive loss partners’ capital Our Canadian subsidiary has certain payables to our U.S.-based subsidiaries. These intercompany payables and receivables among our consolidated subsidiaries are eliminated in our Consolidated Balance Sheets. Beginning April 1, 2017, with the expiration of a contract with our largest Canadian customer, we report currency translation adjustments on these intercompany payables and receivables within foreign currency gains (losses) other comprehensive income (loss) accumulated other comprehensive loss New Accounting Standards In 2019, we adopted the following new accounting standard issued by the Financial Accounting Standards Board (“FASB”): The FASB issued ASU 2016-02 – Leases We made accounting policy elections to not capitalize leases with a lease term of twelve months or less and to not separate lease and non-lease components for all asset classes. We also elected the package of practical expedients within ASU 2016-02 that allows an entity to not reassess prior to the effective date (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or (iii) initial direct costs for any existing leases, but did not elect the practical expedient of hindsight when determining the lease term of existing contracts at the effective date. In July 2018, the FASB issued ASU 2018-11 – Targeted Improvements In 2018, we adopted the following new accounting standards issued by the FASB: The FASB issued Accounting Standards Update (“ASU”) 2014-09 – Revenue from Contracts with Customers The FASB issued ASU 2016-18 - Statement of Cash Flows - Restricted Cash In 2017, we adopted the following new accounting standards issued by the FASB: The FASB issued ASU 2016-09 – Compensation – Stock Compensation The FASB issued ASU 2017-04 – Intangibles – Goodwill and Other Other accounting guidance proposed by the FASB impacting our Consolidated Financial Statements which we adopted on January 1, 2020 include: The FASB issued ASU 2018-15 – Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Other accounting guidance proposed by the FASB that may impact our Consolidated Financial Statements, which we have not yet adopted include: The FASB issued ASU 2016-13 – Financial Instruments – Credit Losses |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. Property and Equipment Property and equipment consist of the following, recorded at cost, as of December 31, 2019 and 2018: December 31, Asset Category Useful Lives (years) 2019 2018 (in thousands) Land $ 1,301 $ 1,301 Land improvements 15 984 952 Buildings and leasehold improvements 30 - 39 1,183 1,183 Facilities, wells and equipment 5 - 15 19,231 18,736 Computer and office equipment 3 - 9 3,454 1,357 Vehicles and other 3 - 5 346 459 26,499 23,988 Less accumulated depreciation (13,738 ) (11,266 ) Net property, plant and equipment $ 12,761 $ 12,722 Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets. Depreciation expense was $2.8 million, $2.8 million, and $2.7 million in 2019, 2018, and 2017, respectively, of which $1.1 million was included as a component of costs of services in each of 2019, 2018, and 2017. In 2019, depreciation expense also included $0.2 million related to finance leases. In 2018, we sold two of our water treatment facilities, which reduced accumulated depreciation by $0.7 million, and we sold other property and equipment which reduced accumulated depreciation by $0.1 million. In 2019, we sold other property and equipment which reduced accumulated depreciation by $0.1 million. During 2017, we recorded an impairment of property and equipment at one of our water treatment facilities. We had experienced revenue and volume decreases at this facility due to lower commodity pricing and increasing competition and had forecasted decreases in drilling activity over the remaining life of the facility. Given these indicators of impairment, we compared our estimates of undiscounted future cash flows from the facility to the carrying amounts of the long-lived assets of the facility, and determined that the carrying value was no longer recoverable. We recognized an impairment of $0.7 million included within impairments Fair Value Measurement |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 4. Goodwill Goodwill represents the excess of cost over fair value of the assets and liabilities of businesses acquired. Changes in goodwill are as follows: Pipeline Pipeline and Environmental Inspection Process Services Services Total (in thousands) Balance - December 31, 2016 $ 40,247 $ 1,581 $ 15,075 $ 56,903 Impairments — (1,581 ) — (1,581 ) Foreign currency translation 97 — — 97 Reclassified to assets held for sale — — (1,984 ) (1,984 ) Balance - December 31, 2017 $ 40,344 $ — $ 13,091 $ 53,435 Foreign currency translation (116 ) — — (116 ) Dispositions — — (3,025 ) (3,025 ) Balance - December 31, 2018 $ 40,228 $ — $ 10,066 $ 50,294 Foreign currency translation 62 — — 62 Balance - December 31, 2019 $ 40,290 $ — $ 10,066 $ 50,356 Goodwill is not amortized, but is subject to annual reviews on November 1 (or other dates if events or changes in circumstances warrant) for impairment at a reporting unit level. We have determined that the Pipeline Inspection, Pipeline & Process Services, and Environmental Services operating segments are the appropriate reporting units for testing goodwill for impairment. Pipeline Inspection For our Pipeline Inspection segment, we performed qualitative goodwill impairment analyses, and concluded that the fair value of the reporting unit was more likely than not greater than its carrying value. Our evaluations included various qualitative factors, including current and projected earnings, current customer relationships and projects, and the impact of commodity prices on our earnings. The qualitative assessments on this reporting unit indicated that there was no need to conduct further quantitative testing for goodwill impairment. The use of different assumptions and estimates from the assumptions and estimates we used in our qualitative analyses could have resulted in the requirement to perform quantitative goodwill impairment analyses. Pipeline & Process Services In the first quarter of 2017, we recorded an impairment to the remaining $1.6 million carrying value of the goodwill of the Pipeline & Process Services segment. Revenues of this segment were lower than we had expected for the first quarter of 2017. In addition, for this segment, the level of bidding activity for work is typically high in March and April, once customers have finalized their budgets for the upcoming year. While we won bids on a number of projects and our backlog began to improve, the improvement in the backlog was slower than we had originally anticipated, and we revised downward our expectations of the near-term operating results of the segment. We estimated the fair value of the Pipeline & Process Services segment utilizing the income approach (discounted cash flows) valuation method, which is a Level 3 input as defined in ASC 820, Fair Value Measurement. Significant inputs in the valuation included projections of future revenues, anticipated operating costs and appropriate discount rates. Significant assumptions included a 2% annual growth rate of cash flows and a discount rate of 18%. We determined through this analysis that the fair value of goodwill of the Pipeline & Process Services segment was fully impaired. These calculations represent Level 3 non-recurring fair value measurements. This impairment loss is included in impairments Environmental Services We completed our annual goodwill impairment assessment as of November 1, 2019 and concluded that the goodwill of the Environmental Services segment was not impaired. We performed a qualitative analysis that took into consideration current and budgeted future cash flows and the fact that we sold two of our water treatment facilities in 2018 at prices that exceeded their carrying values for a combined gain of $3.6 million, which is included in gain on asset disposals, net In May 2018, we sold our Orla, Texas water treatment facility. The net book value of the assets sold included $3.0 million of allocated goodwill, calculated based on the estimated fair value of the Orla facility relative to the estimated fair value of the Environmental Services reporting unit as a whole. e. In January 2018, we sold our Pecos, Texas water treatment facility. The net book value of the assets sold included $2.0 million of allocated goodwill, calculated based on the estimated fair value of the Pecos facility relative to the estimated fair value of the Environmental Services reporting unit as a whole. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | 5. Intangible Assets Intangible assets consist of the following at December 31, 2019 and 2018: December 31, Asset Category Useful Lives 2019 2018 (years) (in thousands) Customer relationships 5 - 20 $ 22,853 $ 22,853 Contracts 3 241 241 Non-compete agreements 3 143 143 Trademarks and trade names 10 11,679 11,679 Inspector database 10 2,080 2,080 36,996 36,996 Less accumulated amortization (16,933 ) (14,237 ) Net intangibles $ 20,063 $ 22,759 Amortization expense in 2019, 2018, and 2017 was $2.7 million, $2.7 million, and $2.8 million respectively. Future amortization expense of our intangible assets is estimated to be as follows: Year ending December 31, (in thousands) 2020 $ 2,677 2021 2,668 2022 2,668 2023 2,070 2024 1,497 Thereafter 8,483 $ 20,063 In 2017, we ceased to perform certain services for the largest customer of the Canadian subsidiary of our Pipeline Inspection segment. In consideration of this, we recorded impairments to the carrying values of certain intangible assets of $1.3 million in the first quarter of 2017. Of this amount, $1.1 million related to customer relationships and $0.2 million related to trade names. Based on discounted cash flow calculations, which represent Level 3 non-recurring fair value adjustments, we concluded the fair value of the customer relationships and trade names of our Canadian business was zero, and therefore we impaired the full amounts. |
Credit Agreement
Credit Agreement | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Credit Agreement | 6. Credit Agreement On May 29, 2018, we entered into an amended and restated credit agreement (as amended and restated, the “Credit Agreement”) that provides up to $110.0 million in borrowing capacity, subject to certain limitations. The three-year Credit Agreement matures May 29, 2021. The obligations under the Credit Agreement are secured by a first priority lien on substantially all of our assets. The credit agreement as it existed prior to the May 29, 2018 amendment will hereinafter be referred to as the “Previous Credit Agreement” or, together with the Credit Agreement, as the “Credit Agreements”. Outstanding borrowings at December 31, 2019 and December 31, 2018 were $74.9 million and $76.1 million, respectively, and are reflected as long-term debt debt issuance costs, net The carrying value of our long-term debt approximates fair value, as the borrowings under the Credit Agreement are considered to be priced at market for debt instruments having similar terms and conditions (Level 2 of the fair value hierarchy). We incurred certain debt issuance costs associated with the Previous Credit Agreement, which we were amortizing on a straight-line basis over the life of the Previous Credit Agreement. Upon amending the Credit Agreement in May 2018, we wrote off $0.1 million of these debt issuance costs and reported this expense within debt issuance cost write-off All borrowings under the Credit Agreement bear interest, at our option, on a leveraged based grid pricing at (i) a base rate plus a margin of 1.5% to 3.0% per annum (“Base Rate Borrowing”) or (ii) an adjusted LIBOR rate plus a margin of 2.5% to 4.0% per annum (“LIBOR Borrowings”). The applicable margin is determined based on the leverage ratio of the Partnership, as defined in the Credit Agreement. Generally, the interest rate on our borrowings ranged from 4.70% to 6.02% in 2019, 4.74% to 6.02% in 2018, and 3.90% to 5.32% in 2017. Interest on Base Rate Borrowings is payable monthly. Interest on LIBOR Borrowings is paid upon maturity of the underlying LIBOR contract, but no less often than quarterly. Commitment fees are charged at a rate of 0.50% on any unused credit and are payable quarterly. Interest paid in 2019, 2018, and 2017 was $4.8 million, $5.8 million, and $6.8 million, respectively, including commitment fees. The average debt balance outstanding in 2019, 2018, and 2017 was $81.4 million, $98.6 million, and $136.9 million, respectively. The Credit Agreement contains various customary covenants and restrictive provisions. The Credit Agreement also requires maintenance of certain financial covenants, including a leverage ratio (as defined in the Credit Agreement) of not more than 4.0 to 1.0 and an interest coverage ratio (as defined in the Credit Agreement) of not less than 3.0 to 1.0. At December 31, 2019, our leverage ratio was 2.4 to 1.0 and our interest coverage ratio was 8.7 to 1.0, pursuant to the Credit Agreement. Upon the occurrence and during the continuation of an event of default, subject to the terms and conditions of the Credit Agreement, the lenders may declare any outstanding principal, together with any accrued and unpaid interest, to be immediately due and payable and may exercise the other remedies set forth or referred to in the Credit Agreement. We were in compliance with all debt covenants as of December 31, 2019. Borrowings under the Credit Agreement may not exceed 4 times the trailing-twelve-month EBITDA as of the most recently-filed quarterly compliance certificate. Trailing-twelve-month EBITDA, as calculated under the Credit Agreement, was $31.4 million at December 31, 2019. In addition, the Credit Agreement restricts our ability to make distributions on, or redeem or repurchase, our equity interests, with certain exceptions detailed in the Credit Agreement. However, we may make distributions of available cash so long as, both at the time of the distribution and after giving effect to the distribution, no default exists under the Credit Agreement, we are in compliance with the financial covenants in the Credit Agreement, and we have at least $5.0 million of unused capacity on the Credit Agreement at the time of the distribution. In January 2020, we made a payment of $5.0 million to reduce the balance outstanding on the Credit Agreement from $74.9 million to $69.9 million. In March 2020, in an abundance of caution, we borrowed $32.0 million on the Credit Agreement to provide substantial liquidity to manage our business in light of a recent COVID-19 outbreak and a significant recent decline in the price of crude oil. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes As a limited partnership, we generally are not subject to federal, state or local income taxes. The tax on the net income of the Partnership is generally borne by the individual partners. We have Canadian activity that is taxable in Canada. In addition, we own three entities which have elected to be taxed as corporations for U.S. federal income tax purposes. The amounts recognized as income tax expense, income taxes payable, and deferred tax liabilities in the Consolidated Financial Statements represent the Canadian and U.S. taxes referred to above, as well as partnership-level taxes levied by various states (primarily Texas). Significant components of income tax expense (benefit) are as follows for the years ended December 31: 2019 2018 2017 (in thousands) Current tax expense (benefit): U.S. federal $ 1,007 $ 497 $ 356 State 1,329 797 531 Canadian (46 ) (27 ) 81 Total 2,290 1,267 968 Deferred tax expense (benefit): U.S. federal (36 ) 36 (7 ) State (15 ) 15 (2 ) Canadian 15 — (363 ) Total (36 ) 51 (372 ) Total income tax expense $ 2,254 $ 1,318 $ 596 Income tax expense increased from 2017 to 2018 due to the deferred tax benefit of intangible asset impairments from our Canadian subsidiary in 2017 and due to increased taxable income in our taxable subsidiary that serves public utility customers. Income tax expense increased from 2018 to 2019 due to increased taxable income in our taxable subsidiary that serves public utility customers and increased Texas margin tax due to increased activity in Texas. The following table reconciles the differences between the U.S. federal statutory rate of 21% in 2019 and 2018 and 35% in 2017 to the Partnership’s income tax expense on the Consolidated Statements of Operations for the years ended December 31: 2019 2018 2017 (in thousands) Tax (benefit) computed at statutory rate $ 4,132 $ 2,817 $ (464 ) (Income) loss not subject to federal tax (3,102 ) (2,396 ) 682 State income taxes, net of federal benefit 1,265 787 509 Other (41 ) 110 (131 ) $ 2,254 $ 1,318 $ 596 Tax years that remain subject to examination by various taxing authorities for each of our consolidated entities include the years 2017 through 2019. Tax-related interest and penalties were insignificant in 2019, 2018, and 2017. We had no uncertain tax positions that required recognition in the financial statements at December 31, 2019 or 2018. During the next twelve months, we do not expect that the ultimate resolution of any uncertain tax positions will result in a significant increase or decrease of an unrecognized tax benefit. |
Owners' Equity
Owners' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Owners' Equity | 8. Owners’ Equity Common Units and Subordinated Units As of December 31, 2019, there were 12,068,343 common units outstanding. As of December 31, 2018, there were 11,946,901 common units outstanding. On February 14, 2017, all subordinated units outstanding were converted to common units upon satisfaction of the requirements as outlined in our partnership agreement. Prior to the conversion of all subordinated units to common units, items of income (loss) were allocated to common units and subordinated units equally. Incentive Distribution Rights Our General Partner owns a 0.0% non-economic general partnership interest in the Partnership, which does not entitle it to receive cash distributions. Affiliates of our General Partner hold incentive distribution rights (“IDRs”), which represent the right to receive an increasing percentage (15%, 25%, and 50%) of quarterly distributions of available cash from operating surplus after specified target distribution levels have been achieved. Affiliates of the General Partner would begin receiving incentive distribution payments when the quarterly cash distribution exceeds $0.445625 per unit. There were no incentive distribution payments in 2019, 2018, or 2017. Series A Preferred Units On May 29, 2018 (the “Closing Date”), we entered into a Series A Preferred Unit Purchase Agreement (the “Preferred Unit Purchase Agreement”) with an entity controlled by Charles C. Stephenson, Jr. (the “Purchaser”), an affiliate of our General Partner, where we issued and sold in a private placement 5,769,231 Series A Preferred Units representing limited partner interests in the Partnership (the “Preferred Units”) to the Purchaser for a cash purchase price of $7.54 per Preferred Unit, resulting in gross proceeds to the Partnership of $43.5 million. We used proceeds from the transaction to reduce outstanding borrowings on our revolving credit facility. Concurrent with the closing of this transaction, we entered into an amended and restated Credit Agreement dated as of May 29, 2018, to amend and restate the terms of our credit facility, as more fully described in Note 6. The Preferred Unit Purchase Agreement contains customary representations, warranties, and covenants of the Partnership and the Purchaser. The Partnership and the Purchaser agreed to indemnify each other and their respective officers, directors, managers, employees, agents, counsel, accountants, investment bankers, and other representatives against certain losses resulting from breaches of their respective representations, warranties, and covenants, subject to certain negotiated limitations and survival periods set forth in the Preferred Unit Purchase Agreement. Pursuant to the Preferred Unit Purchase Agreement, and in connection with the closing of this transaction, our General Partner executed the First Amendment to First Amended and Restated Agreement of Limited Partnership of the Partnership, which authorizes and establishes the rights and preferences of the Preferred Units. The Preferred Units have voting rights that are identical to the voting rights of the common units into which such Preferred Units would be converted at the then-applicable conversion rate. The Purchaser is entitled to receive quarterly distributions that represent an annual return of 9.5% on the Preferred Units. Of this 9.5% annual return, we will be required to pay at least 2.5% in cash and will have the option to pay the remaining 7.0% in kind (in the form of issuing additional preferred units) for the first twelve quarters after the Closing Date. After the third anniversary of the Closing Date, the Purchaser will have the option to convert the Preferred Units into common units on a one-for-one basis. If certain conditions are met after the third anniversary of the Closing Date, we will have the option to cause the Preferred Units to convert to common units. After the third anniversary of the Closing Date, we will also have the option to redeem the Preferred Units. The Partnership may redeem the Preferred Units (a) at any time after the third anniversary of the closing date and on or prior to the fourth anniversary of the closing date at a redemption price equal to 105% of the issue price, and (b) at any time after the fourth anniversary of the closing date at a redemption price equal to 101% of the issue price. The Preferred Units rank senior to our common units, and we must pay distributions on the Preferred Units (including any arrearages) before paying distributions on our common units. In addition, the Preferred Units rank senior to the common units with respect to rights upon liquidation. Earnings Per Unit Our net income (loss) Income attributable to preferred unitholder Net income (loss) attributable to noncontrolling interests Net loss attributable to the General Partner Net income attributable to common unitholders net income (loss) In February 2017, all outstanding subordinated units were converted to common units upon satisfaction of the requirements as outlined in our partnership agreement; prior to this conversion, items of income (loss) were allocated to common units and subordinated units equally. Since the subordinated units did not share in the distribution of cash generated subsequent to December 31, 2016, we did not allocate any income or loss after that date to the subordinated units. Basic net income per common limited partner unit net income attributable to common unitholders Diluted net income per common limited partner unit includes the dilutive effect of the unvested equity-based compensation and the Preferred Units. The following summarizes the calculation of the basic net income per common limited partner unit for the periods presented: Twelve Months Ended December 31 2019 2018 2017 (in thousands, except per unit data) Net income attributable to common unitholders $ 11,881 $ 8,968 $ 3,237 Weighted average common units outstanding 12,039 11,929 11,152 Basic net income per common limited partner unit $ 0.99 $ 0.75 $ 0.29 The following summarizes the calculation of the diluted net income per common limited partner unit Twelve Months Ended December 31 2019 2018 2017 (in thousands, except per unit data) Net income attributable to common unitholders $ 11,881 $ 8,968 $ 3,237 Net income attributable to preferred unitholder 4,133 2,445 — $ 16,014 $ 11,413 $ 3,237 Weighted average common units outstanding 12,039 11,929 11,152 Effect of dilutive securities: Weighted average preferred units outstanding 5,769 3,413 — Long-term incentive plan unvested units 481 415 101 Diluted weighted average common units outstanding 18,289 15,757 11,253 Diluted net income per common limited partner unit $ 0.88 $ 0.72 $ 0.29 |
Major Customers
Major Customers | 12 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Major Customers | 9. Major Customers The following table sets forth the customers who accounted for more than 10% of our consolidated revenue for the years ended December 31, 2019, 2018, and 2017: 2019 2018 2017 Pacific Gas and Electric Company Pacific Gas and Electric Company Enterprise Products Partners L.P. Phillips 66 Plains All American Pipeline, L.P. Pacific Gas and Electric Company Plains All American Pipeline, L.P. Plains All American Pipeline, L.P. No other customer accounted for more than 10% of our consolidated revenues during these years. Revenues from these customers resulted from activities conducted by our Pipeline Inspection segment. |
Equity Compensation
Equity Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Equity Compensation | 10. Equity Compensation Long-Term Incentive Plan (“LTIP”) Our General Partner has adopted a long-term incentive plan (“LTIP”) that authorizes the issuance of up to 2.5 million common units. Certain directors and employees of the Partnership have been awarded phantom restricted units (“Units”) under the terms of the LTIP in the form of time-based unit awards (“Service Units”), performance-based unit awards (“Performance Units”) and market-based unit awards (“Market Units”). In 2019, 2018, and 2017, compensation expense of $1.1 million, $1.2 million and $1.1 million, respectively was recorded under the LTIP (including expense associated with the Profit Interest Units described below). Time-Based Unit Awards Number of Weighted Average Units at December 31, 2016 496,407 $ 10.19 Units granted 257,419 $ 7.02 Units vested (44,408 ) $ 16.56 Units forfeited (122,404 ) $ 9.25 Units at December 31, 2017 587,014 $ 8.56 Units granted 399,726 $ 3.24 Units vested (69,296 ) $ 13.97 Units forfeited (44,383 ) $ 5.76 Units at December 31, 2018 873,061 $ 5.83 Units granted 201,306 $ 4.40 Units vested (145,200 ) $ 8.48 Units forfeited (64,635 ) $ 6.10 Units at December 31, 2019 864,532 $ 5.04 Performance-Based Unit Awards In addition, in the third quarter of 2019, we granted Performance Units to certain employees that are subject to performance conditions in addition to the service condition. These Performance Units will vest in April 2022, April 2023, April 2024, or not at all, depending on our performance relative to a specified profitability target. We recognize compensation expense on a straight-line basis over the estimated vesting period of the grant. We adjust the life-to-date expense recognized for the Performance Units for any changes in our estimates of the number of units that will vest and the timing of vesting. We account for forfeitures when they occur. The Performance Units granted in the third quarter of 2019 had an estimated grant date fair value of $4.19 per unit and are being expensed over a service period of 3.73 years. Total unearned compensation associated with the Performance Units at December 31, 2019 and 2018 was $0.4 million and $0.2 million, respectively, with an average remaining life of 2.6 years and 2.1 years, respectively. The following table summarizes the activity of the Performance Units in 2019, 2018, and 2017: Number of Weighted Average Units at December 31, 2016 77,495 $ 7.75 Units granted — $ — Units vested — $ — Units forfeited — $ — Units at December 31, 2017 77,495 $ 7.75 Units granted 72,046 $ 4.52 Units vested (7,184 ) $ 8.49 Units forfeited (40,709 ) $ 8.49 Units at December 31, 2018 101,648 $ 5.11 Units granted 89,402 $ 4.19 Units vested (6,167 ) $ 6.54 Units forfeited (24,310 ) $ 6.45 Units at December 31, 2019 160,573 $ 4.34 Market-Based Unit Awards Number of Weighted Average Units at December 31, 2018 — $ — Units granted 89,403 $ 3.54 Units vested — $ — Units forfeited (875 ) $ 3.54 Units at December 31, 2019 88,528 $ 3.54 In addition to the awards shown above, at the time of our Initial Public Offering, certain profits interest units (“Profit Interest Units”) previously issued were converted into 44,451 units of the Partnership outside of the LTIP. Compensation expense associated with the Profit Interest Units was $0.1 million for each of the years ended December 31, 2018 and 2017. There were no unvested Profit Interest Units at December 31, 2019. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 11. Related-Party Transactions Omnibus Agreement We are party to an omnibus agreement with Holdings and other related parties. The omnibus agreement provides for, among other things, our right of first offer on Holdings’ and its subsidiaries’ assets used in, and entities primarily engaged in, providing water treatment and other water and environmental services. So long as Holdings controls our General Partner, the omnibus agreement will remain in full force and effect, unless we and Holdings agree to terminate it sooner. If Holdings ceases to control our General Partner, either party may terminate the omnibus agreement. We and Holdings may agree to further amend the omnibus agreement; however, amendments that the General Partner determines are adverse to our unitholders will also require the approval of the Conflicts Committee of our Board of Directors. Prior to January 1, 2020, the omnibus agreement called for Holdings to provide certain general and administrative services, including executive management services and expenses associated with our being a publicly-traded entity (such as audit, tax, and transfer agent fees, among others) in return for a fixed annual fee (adjusted for inflation) that was payable quarterly. This annual fee was $4.5 million in 2019 and $4.0 million in 2018 and 2017. In an effort to simplify this arrangement so it will be easier for investors to understand, in November 2019, with the approval of the Conflicts Committee of the Board of Directors, we and Holdings agreed to terminate the management fee provisions of the omnibus agreement effective December 31, 2019. Beginning January 1, 2020, the executive management services and other general and administrative expenses that Holdings previously incurred and charged to us via the annual administrative fee are charged directly to us as they are incurred. Under our current cost structure, we expect these direct expenses to be lower than the annual administrative fee that we previously paid, although we expect to experience more variability in our quarterly general and administrative expense now that we are incurring the expenses directly than when we paid a consistent administrative fee each quarter. The amounts charged by Holdings under the omnibus agreement in 2019, 2018, and 2017 were $4.5 million, $4.0 million, and $2.0 million, respectively, and are reflected in general and administrative general and administrative contributions attributable to general partner net loss attributable to general partner contributions attributable to general partner net loss attributable to general partner Alati Arnegard, LLC The Partnership provides management services to a 25% owned company, Alati Arnegard, LLC (“Arnegard”), which is part of the Environmental Services segment. We recorded earnings from this investment of $0.2 million, $0.2 million, and $0.1 million in 2019, 2018, and 2017, respectively. These earnings are recorded in other, net equity in earnings of investee revenues trade accounts receivable, net other assets CF Inspection Management, LLC We have also entered into a joint venture with CF Inspection, a nationally-qualified woman-owned inspection firm. CF Inspection allows us to offer various services to clients that require the services of an approved Women’s Business Enterprise (“WBE”), as CF Inspection is certified as a Women’s Business Enterprise by the Supplier Clearinghouse in California and as a National Women’s Business Enterprise by the Women’s Business Enterprise National Council. We own 49% of CF Inspection and Cynthia A. Field, an affiliate of Holdings and a Director of our General Partner, owns the remaining 51% of CF Inspection. In 2019, 2018, and 2017, CF Inspection, which is part of the Pipeline Inspection segment, represented approximately 3.3%, 3.4%, and 3.5% of our consolidated revenue, respectively. Sale of Preferred Equity |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | 12. Leases We determine if an agreement contains a lease at the inception of the arrangement. If an arrangement is determined to contain a lease, we classify the lease as an operating lease or a finance lease depending on the terms of the arrangement. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our incremental borrowing rate, unless the implicit rate is readily determinable. Lease assets also include any upfront lease payments made and exclude lease incentives. The lease terms of our leases include options to extend or terminate the lease when it is reasonably certain that those options will be exercised. Practical Expedients and Accounting Policy Elections We made accounting policy elections to not capitalize leases with a lease term of twelve months or less and to not separate lease and non-lease components for all asset classes. We also elected the package of practical expedients within ASU 2016-02 that allows an entity to not reassess prior to the effective date (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or (iii) initial direct costs for any existing leases, but did not elect the practical expedient of hindsight when determining the lease term of existing contracts at the effective date. Discount Rate Our lease agreements do not generally provide an implicit interest rate. As a result, we use our incremental borrowing rate as the discount rate in calculating the present value of the lease payments. The incremental borrowing rate is the estimated rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Operating Leases Our operating leases include leases for office space and land lease agreements for four of our water treatment facilities. Our lease for our office space headquarters constitutes $2.8 million of our Operating ROU asset at December 31, 2019 of $2.9 million. The lease expires in November of 2024 unless terminated earlier with a payment of a penalty under certain circumstances specified in our lease. In the determination of the lease term for this lease, we concluded the lease term would go through November 2024 as it was not reasonably certain at the inception of the agreement that we would exercise any of the termination options in the agreement. As of December 31, 2019, the weighted average remaining lease term and weighted average discount rate for our operating leases was 5.1 years and 6.1%, respectively. Our operating leases are reflected as operating lease right-of-use assets operating lease obligations within current and noncurrent liabilities on our Consolidated Balance Sheet at December 31, 2019. Our operating lease obligations at December 31, 2019 with terms that are greater than one year mature as follows (in thousands): 2020 $ 624 2021 679 2022 679 2023 679 2024 625 Thereafter 95 Total lease payments $ 3,381 Less imputed interest (497 ) Total operating lease obligation $ 2,884 Finance Leases Our finance leases primarily include leases for vehicles. As of December 31, 2019, the weighted average remaining lease term and weighted average discount rate for our finance leases was 2.7 years and 5.6%, respectively. Our finance leases are reflected as finance lease right-of-use assets, net finance lease obligations within current and noncurrent liabilities on our Consolidated Balance Sheet at December 31, 2019. Our finance lease obligations at December 31, 2019 with terms that are greater than one year mature as follows (in thousands): 2020 $ 210 2021 201 2022 136 2023 38 Total lease payments $ 585 Less imputed interest (43 ) Total finance lease obligation $ 542 Lease Expense Components During the year ended December 31, 2019, our lease expense consists of the following components (in thousands): Year Ended Finance lease expense: Amortization of right-of-use assets $ 178 Interest on lease liabilities 31 Operating lease expense 672 Short-term lease expense - general and administrative 103 Short-term lease expense - costs of services (a) 3,570 Variable lease expense 10 Sublease income - related parties (32 ) Total lease expense $ 4,532 (a) These short-term lease expenses are included in costs of services During the years ended December 31, 2018 and 2017, we recorded lease expense of $3.7 million and $3.2 million respectively. These amounts are inclusive of $3.0 million and $2.4 million in lease expense within costs of services |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies Security Deposits The Partnership has various performance obligations which are secured with short-term security deposits (reflected as restricted cash equivalents on our Consolidated Statements of Cash Flows) totaling $0.6 million at December 31, 2019 and 2018. These amounts are included in prepaid expenses and other Compliance Audit Contingencies Certain customer master service agreements (“MSA’s”) offer our customers the right to perform periodic compliance audits, which include the examination of the accuracy of our invoices. Should our invoices be determined to be inconsistent with the MSA, or inaccurate, the MSA’s may provide the customer the right to receive a credit or refund for any overcharges identified. At any given time, we may have multiple audits ongoing. As of December 31, 2019 and 2018, we established a reserve of $0.2 million and $0.1 million, respectively, as an estimate of potential liabilities related to these compliance audit contingencies. Legal Proceedings Fithian v. TIR LLC On October 5, 2017, a former inspector for TIR LLC and Cypress Environmental Management – TIR, LLC (“CEM TIR”) filed a putative collective action lawsuit alleging that TIR LLC, CEM TIR and Cypress Energy Partners – Texas, LLC failed to pay a class of workers overtime in compliance with the Fair Labor Standards Act (“FLSA”) titled James Fithian, et al v. TIR LLC, et al in the United States District Court for the Western District of Texas, Midland Division. The plaintiff subsequently withdrew his action and filed a similar action in Oklahoma State Court, District of Tulsa County. The plaintiff alleged he was a non-exempt employee of CEM TIR and that he and other potential class members were not paid overtime in compliance with the FLSA. The plaintiff sought to proceed as a collective action and to receive unpaid overtime and other monetary damages, including attorney’s fees. The Partnership, TIR LLC, CEM TIR and Cypress Energy Partners – Texas, LLC denied the claims. On March 28, 2018, the court granted a joint stipulation of dismissal without prejudice in regard to TIR LLC and Cypress Energy Partners – Texas, LLC, as neither of those parties were employers of the plaintiff or the putative class members during the time period that is the subject of the lawsuit. On July 26, 2018, the plaintiff filed a motion for conditional class certification. CEM TIR subsequently filed pleadings opposing the motion. On January 25, 2019, the court denied the plaintiff’s motion for conditional class certification. On June 10, 2019, the court entered a scheduling order that proscribed, among other things, August 1, 2019 as the deadline for additional parties to join the lawsuit, and that the parties participate in a settlement conference or mediation no later than September 1, 2019. After the deadline, plaintiff’s counsel submitted consents for five additional inspectors to join the lawsuit, to which CEM TIR objected. On August 28, 2019, the parties participated in a settlement conference in which no settlement was reached. Subsequent to the settlement conference, CEM TIR submitted offers of judgment in immaterial amounts to the named plaintiff and the two opt-in plaintiffs. The Court entered the agreed judgment on February 25, 2020. Sun Mountain LLC v. TIR-PUC On February 27, 2019, Sun Mountain LLC (“Sun Mountain”), a subcontractor of TIR-PUC, filed a lawsuit alleging that TIR-PUC failed to pay invoices amounting to approximately $3.5 million for services subcontracted to Sun Mountain under TIR-PUC’s agreement to provide services to Pacific Gas and Electric Company. Sun Mountain filed the action in Federal District Court for the Northern District of Oklahoma. TIR-PUC denied that such amounts were owed, as conditions to TIR-PUC’s obligation to make the payments were not met. The full amount of these invoices is included within accounts payable other, net in the Consolidated Statement of Operations in the fourth quarter of 2019 related to this settlement. Diaz v. CEM TIR On December 12, 2019, three of the former inspectors who unsuccessfully attempted to join the Fithian lawsuit after the deadline set by the court filed a putative collective action lawsuit alleging that TIR LLC and CEM TIR failed to pay a class of workers overtime in compliance with the FLSA titled Francisco Diaz, et al v. CEM TIR, et al in the United States District Court for the Northern District of Oklahoma. TIR LLC and CEM TIR deny the claims. CEM TIR and TIR LLC filed a motion to dismiss one of the plaintiffs for bringing the lawsuit in a venue that was inconsistent with the forum selection clause in his employment agreement mandating suit exclusively in the District Court of Tulsa County, Oklahoma. CEM TIR and TIR LLC also filed a motion to compel arbitration for the other two plaintiffs to enforce the binding arbitration clauses in their employment agreements. The Court has not yet ruled on either motion. The two plaintiffs with the binding arbitration provisions subsequently initiated arbitration proceedings. Other We have been and may in the future be subject to litigation involving allegations of violations of the Fair Labor Standards Act and state wage and hour laws. In addition, we generally indemnify our customers for claims related to the services we provide and actions we take under our contracts, including claims regarding the Fair Labor Standards Act and state wage and hour laws, and, in some instances, we may be allocated risk through our contract terms for actions by our customers or other third parties. Claims related to the Fair Labor Standards Act are generally not covered by insurance. From time to time, we are subject to various claims, lawsuits and other legal proceedings brought or threatened against us in the ordinary course of our business. These actions and proceedings may seek, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination and other employment-related damages, breach of contract, property damage, environmental liabilities, multiemployer pension plan withdrawal liabilities, punitive damages and civil penalties or other losses, liquidated damages, consequential damages, or injunctive or declaratory relief. |
Segment Disclosures
Segment Disclosures | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Disclosures | 14. Segment Disclosures The Partnership’s operations consist of three reportable segments: (i) Pipeline Inspection Services (“Pipeline Inspection”), (ii) Pipeline & Process Services and (iii) Water and Environmental Services (“Environmental Services”). The amounts within “Other” represent corporate and overhead items not specifically allocable to the other reportable segments. The following table outlines segment operating income and a reconciliation of total segment operating income to net income before income tax expense. Pipeline Pipeline and Environmental Other Total (in thousands) Twelve months ended December 31, 2019 Revenues $ 371,994 $ 19,337 $ 10,317 $ — $ 401,648 Costs of services 331,498 13,397 3,029 — 347,924 Gross margin 40,496 5,940 7,288 — 53,724 General and administrative 19,086 (a) 2,500 2,995 (b) 1,045 25,626 Depreciation, amortization and accretion 2,224 574 1,632 18 4,448 Losses (gains) on asset disposals, net 1 (26 ) — — (25 ) Operating income (loss) $ 19,185 $ 2,892 $ 2,661 $ (1,063 ) $ 23,675 Interest expense, net (5,330 ) Foreign currency gains 222 Other, net 1,111 Net income before income tax expense $ 19,678 Twelve months ended December 31, 2018 Revenues $ 288,083 $ 15,001 $ 11,876 $ — $ 314,960 Costs of services 256,436 10,708 3,770 — 270,914 Gross margin 31,647 4,293 8,106 — 44,046 General and administrative 17,010 (c) 2,379 3,295 (b) 1,060 23,744 Depreciation, amortization and accretion 2,237 592 1,575 — 4,404 Gains on asset disposals, net (21 ) (83 ) (4,004 ) — (4,108 ) Operating income (loss) $ 12,421 $ 1,405 $ 7,240 $ (1,060 ) $ 20,006 Interest expense, net (6,320 ) Foreign currency losses (643 ) Other, net 373 Net income before income tax expense $ 13,416 Twelve months ended December 31, 2017 Revenues $ 268,635 $ 9,268 $ 8,439 $ — $ 286,342 Costs of services 241,889 7,347 3,503 — 252,739 Gross margin 26,746 1,921 4,936 — 33,603 General and administrative 13,980 (d) 1,981 2,451 (e) 2,643 (f) 21,055 Depreciation, amortization and accretion 2,331 626 1,486 — 4,443 Impairments 1,329 1,581 688 — 3,598 Losses (gains) on asset disposals, net 18 — (588 ) — (570 ) Operating income (loss) $ 9,088 $ (2,267 ) $ 899 $ (2,643 ) $ 5,077 Interest expense, net (7,335 ) Foreign currency gains 732 Other, net 199 Net loss before income tax expense $ (1,327 ) Total Assets December 31, 2019 $ 114,858 $ 14,318 $ 21,911 $ 6,255 $ 157,342 December 31, 2018 $ 116,239 $ 10,972 $ 24,281 $ 1,361 $ 152,853 (a) Amount includes $3.3 million of the administrative fee charged by Holdings specified in the omnibus agreement. (b) Amount includes $1.2 million of the administrative fee charged by Holdings specified in the omnibus agreement. (c) Amount includes $2.8 million of the administrative fee charged by Holdings specified in the omnibus agreement. (d) Amount includes $1.4 million of the administrative fee charged by Holdings specified in the omnibus agreement. (e) Amount includes $0.6 million of the administrative fee charged by Holdings specified in the omnibus agreement. (f) Amount includes $1.8 million of allocated general and administrative expenses incurred by Holdings but not charged to us. For the six months ended June 30, 2017, Holdings waived the administrative fee specified in the omnibus agreement. |
Distributions
Distributions | 12 Months Ended |
Dec. 31, 2019 | |
celp_DebtCovenantInterestCoverageRatioMinimum | |
Distributions | 15. Distributions The following table summarizes the cash distributions that we declared and paid on common and subordinated units since our initial public offering: Payment Date Per Unit Cash Total Cash Total Cash (in thousands) Total 2014 Distributions $ 1.104646 $ 13,064 $ 8,296 Total 2015 Distributions 1.625652 19,232 12,284 Total 2016 Distributions 1.625652 19,258 12,414 Total 2017 Distributions 1.036413 12,310 7,928 February 14, 2018 0.210000 2,498 1,599 May 15, 2018 0.210000 2,506 1,604 August 14, 2018 0.210000 2,506 1,604 November 14, 2018 0.210000 2,509 1,606 Total 2018 Distributions 0.840000 10,019 6,413 February 14, 2019 0.210000 2,510 1,606 May 15, 2019 0.210000 2,531 1,622 August 14, 2019 0.210000 2,534 1,624 November 14, 2019 0.210000 2,534 1,627 Total 2019 Distributions 0.840000 10,109 6,479 February 14, 2020 (b) 0.210000 2,534 1,627 Total Distributions (through February 14, 2020 since IPO) $ 7.282363 $ 86,526 $ 55,441 (a) Approximately 64% of the Partnership’s outstanding common units at December 31, 2019 were held by affiliates. (b) Fourth quarter 2019 distribution was declared and paid in the first quarter of 2020. The following table summarizes the distributions paid to our preferred unitholder for 2018 and 2019: Payment Date Cash Paid-in-Kind Total (in thousands) November 14, 2018 (a) $ 1,412 $ — $ 1,412 Total 2018 Distributions 1,412 — 1,412 February 14, 2019 1,033 — 1,033 May 15, 2019 1,033 — 1,033 August 14, 2019 1,033 — 1,033 November 14, 2019 1,034 — 1,034 Total 2019 Distributions 4,133 — 4,133 February 14, 2020 (b) 1,033 — 1,033 Total Distributions (through February 14, 2020) $ 6,578 $ — $ 6,578 (a) This distribution relates to the period from May 29, 2018 (date of preferred unit issuance) through September 30, 2018. (b) Fourth quarter 2019 distribution was declared and paid in the first quarter of 2020. |
Sale of Water Treatment facilit
Sale of Water Treatment facilities | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Sale of Water Treatment facilities | 16. Sale of Water Treatment facilities In 2018, we sold our subsidiaries Cypress Energy Partners – Orla SWD, LLC (“Orla”) and Cypress Energy Partners – Pecos SWD, LLC (“Pecos”), each of which owned a water treatment facility in Texas, in separate transactions to unrelated parties for a combined $12.2 million of cash proceeds and a royalty interest in the future revenues of the Pecos facility. We recorded a combined gain on these transactions of $3.6 million in 2018, which represented the excess of the cash proceeds over the net book value of the assets sold. These gains are reported within gain on asset disposals, net The Pecos and Orla facilities generated combined revenues of $0.2 million and $1.6 million in 2018 and 2017, respectively. The Pecos and Orla facilities generated combined operating income (loss) of approximately ($0.1) million and $0.7 million in 2018 and 2017, respectively. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | 17. Quarterly Financial Information (Unaudited) The following table sets forth certain unaudited financial data for each quarter in 2018 and 2019. The unaudited quarterly information includes all normal recurring adjustments that we consider necessary for a fair presentation of the information shown. 2019 Quarter Ended, (in thousands, except per unit amounts) March 31 June 30 September 30 December 31 Revenues $ 90,376 $ 111,091 $ 108,934 $ 91,247 Gross margin 10,023 14,807 15,401 13,493 Net income 1,381 5,643 5,480 4,920 Net income attributable to partners / controlling interests 1,600 5,366 4,846 4,202 Net income per common limited partner unit - basic 0.05 0.36 0.32 0.26 Net income per common limited partner unit - diluted 0.05 0.29 0.26 0.23 2018 Quarter Ended, (in thousands, except per unit amounts) March 31 June 30 September 30 December 31 Revenues $ 64,826 $ 76,468 $ 84,778 $ 88,888 Gross margin 8,129 10,943 12,908 12,066 Gains (losses) on asset disposals, net 1,709 1,606 822 (29 ) Net income 960 3,556 4,954 2,628 Net income attributable to partners / controlling interests 725 3,407 4,665 2,616 Net income per common limited partner unit - basic 0.06 0.25 0.30 0.13 Net income per common limited partner unit - diluted 0.06 0.24 0.26 0.13 |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Consolidated Financial Statements include our accounts and those of our controlled subsidiaries. All intercompany transactions and account balances have been eliminated in consolidation. Investments over which we exercise significant influence, but do not control, are accounted for using the equity method of accounting. The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for consolidated financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. The Consolidated Financial Statements include all adjustments considered necessary for a fair presentation of the financial position and results of operations for the periods presented. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates. Areas requiring the use of assumptions, judgments, and estimates include, among others, amounts of expected future cash flows used in determining possible impairments of property and equipment, intangible assets, and goodwill; the determination of fair values of assets acquired and liabilities assumed in business combinations; the allocation of goodwill to disposals of assets; the amount and timing of future asset retirement obligations; and the useful lives of property, equipment and intangible assets. Certain estimates are inherently imprecise and may change as future information becomes available. The use of alternative judgments and/or assumptions could result in different outcomes. |
Fair Value Measurement | Fair Value Measurement We utilize fair value measurements to measure assets in a business combination or assess impairment of property and equipment, intangible assets, and goodwill. Fair value is the amount received from the sale of an asset or the amount paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date. Fair value is a market-based measurement considered from the perspective of a market participant. We use market data or assumptions that we believe market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation. These inputs can be readily observable, market corroborated, or unobservable. We apply both market and income approaches for fair value measurements using the best available information while utilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy in GAAP prioritizes the inputs used to measure fair value, giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Partnership classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows: ● Level 1 ● Level 2 ● Level 3 |
Contributions Attributable to General Partner | Contributions Attributable to General Partner During 2017, Holdings incurred overhead expenses on our behalf totaling $1.8 million. These costs represent administrative expenses incurred by Holdings in excess of amounts charged to us under our omnibus agreement. These expenses are reflected as general and administrative net loss attributable to general partner contributions attributable to general partner In addition to incurring the expenses described above, Holdings provided us with additional financial support by making cash contributions of $2.3 million in 2017 as a reimbursement for certain expenditures incurred by us. These cash contributions are reflected as a contribution attributable to general partner net loss attributable to general partner |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all investments purchased with initial maturities of three months or less to be cash equivalents. Cash equivalents consist primarily of investments in highly-liquid securities. The carrying amounts of cash and cash equivalents reported in the balance sheet approximate fair value. As of December 31, 2019, U.S. cash balances are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per financial institution. Canadian cash balances are insured by the Canada Deposit Insurance Corporation (CDIC) up to $100,000 (Canadian Dollars) per financial institution. Our cash is primarily held at three financial institutions, and therefore is in excess of the FDIC or CDIC insurance limits. We periodically assess the financial condition of the institutions where we deposit funds. |
Restricted Cash | Restricted Cash Restricted cash was approximately $0.6 million at December 31, 2019 and 2018, respectively. These amounts are included in prepaid expenses and other |
Accounts Receivable, Allowance for Bad Debts and Concentration of Credit Risk | Accounts Receivable, Allowance for Bad Debts and Concentration of Credit Risk We grant unsecured credit to customers under normal industry standards and terms, and have established policies and procedures that allow for an evaluation of each of our customer’s creditworthiness. We typically receive payment from our customers 45 to 90 days after the services have been performed. We determine allowances for bad debts based on management’s assessment of the creditworthiness of our customers. Trade receivables are written off against the allowance when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when cash is received. We do not typically charge interest on past due trade receivables nor do we require collateral on our trade receivables. We had an allowance for doubtful accounts of $0.2 million and less than $0.1 million at December 31, 2019 and 2018, respectively. We recorded bad debt expense of $0.2 million in 2019 and less than $0.1 million in 2018 and 2017. In 2019 and 2017, we received $0.1 million and $0.3 million, respectively, on accounts receivable previously written off which we recorded as a reduction to general and administrative We had four customers, Pacific Gas & Electric Company, Plains All American Pipeline L.P., ONEOK, Inc. and Phillips 66 that represented more than 10% of total accounts receivable as of December 31, 2019. The majority of our revenues are generated in the United States. Total revenues generated in Canada were $0.2 million, $1.3 million, and $23.4 million in 2019, 2018, and 2017, respectively. |
Pacific Gas and Electric Bankruptcy | Pacific Gas and Electric Bankruptcy PG&E Corporation and its wholly-owned subsidiary Pacific Gas and Electric Company (collectively, “PG&E”) filed for bankruptcy protection on January 29, 2019. As of December 31, 2018, the assets on our Consolidated Balance Sheet included $10.3 million of accounts receivable from PG&E. We collected $1.0 million of this balance in January 2019 prior to PG&E’s bankruptcy filing. We generated $2.8 million of revenue from PG&E during the period from January 1, 2019 through January 28, 2019, bringing the total accounts receivable from PG&E to $12.1 million as of the date of the bankruptcy filing. In November 2019, we sold $10.4 million of our pre-petition receivables from PG&E in a non-recourse sale to a third party for cash proceeds of $9.8 million. We recorded a loss of $0.5 million in the fourth quarter of 2019 on the sale of these pre-petition receivables reported within Other, net |
Sanchez Bankruptcy | Sanchez Bankruptcy Sanchez Energy Corporation and certain of its affiliates (collectively, “Sanchez”), a former customer, filed for bankruptcy protection in August 2019. As of December 31, 2019, our Consolidated Balance Sheet included $0.5 million of pre-petition accounts receivable from Sanchez. We have recorded an allowance of less than $0.1 million at December 31, 2019 against the accounts receivable from Sanchez. We do not believe it is probable that we will be unable to collect the remaining $0.4 million balance of the pre-petition receivables. However, due to uncertainties associated with the bankruptcy process, we cannot make assurances regarding the ultimate collection of these receivables nor can we make assurances regarding the timing of any such collections. |
Property and Equipment | Property and Equipment Property and equipment consists of land, land and leasehold improvements, buildings, facilities, wells and related equipment, field equipment, computer and office equipment, and vehicles. We record property and equipment at cost. Costs of renewals and improvements that substantially extend the useful lives of the assets are capitalized. Maintenance and repairs are expensed as incurred. We depreciate property and equipment on a straight-line basis over the estimated useful lives of the assets. Upon retirement, disposition, or impairment of an asset, we remove the cost and related accumulated depreciation from the balance sheet and report the resulting gain or loss, if any, in the Consolidated Statement of Operations. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs represent fees and expenses associated with securing our Credit Agreement (see Note 6). Amortization of the capitalized debt issuance costs is recorded on a straight-line basis over the term of the Credit Agreement. |
Income Taxes | Income Taxes As a limited partnership, we generally are not subject to federal, state or local income taxes. The tax on our net income is generally borne by the individual partners. Net income (loss) for financial statement purposes may differ significantly from taxable income (loss) of the partners as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under our partnership agreement. The aggregated difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined because information regarding each partner’s tax attributes is not available to us. The income of Tulsa Inspection Resources – Canada, ULC, our Canadian subsidiary, is taxable in Canada. Tulsa Inspection Resources – PUC, LLC (“TIR-PUC”), a subsidiary of our Pipeline Inspection segment that performs pipeline inspection services for utility customers, and Cypress Brown Integrity - PUC, LLC, a 51% owned subsidiary, have elected to be taxed as corporations for U.S. federal income tax purposes, and therefore these subsidiaries are subject to U.S. federal and state income taxes. The amounts recognized as income tax expense, income taxes payable, and deferred tax liabilities in our Consolidated Financial Statements represent the Canadian and U.S. taxes referred to above, as well as partnership-level taxes levied by various states, most notably, franchise taxes assessed by the state of Texas. As a publicly-traded partnership, we are subject to a statutory requirement that at least 90% of our total gross income is classified as “qualifying income” (as defined by the Internal Revenue Code, related Treasury Regulations, and Internal Revenue Service pronouncements), determined on a calendar year basis. If our qualifying income does not meet this statutory requirement, we could be taxed as a corporation for federal and state income tax purposes. Our income has met the statutory qualifying income requirement for each year since our IPO. We evaluate uncertain tax positions for recognition and measurement in the Consolidated Financial Statements. To recognize a tax position, we determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation, based on the technical merits of the position. A tax position that meets the more likely than not threshold is measured to determine the amount of benefit to be recognized in the Consolidated Financial Statements. The amount of tax benefit recognized with respect to any tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon settlement. We had no uncertain tax positions that required recognition in the financial statements at December 31, 2019 or 2018. Any interest or penalties would be recognized as a component of income tax expense. |
Revenue Recognition | Revenue Recognition Under Accounting Standards Codification (“ASC”) 606 - Revenue from Contracts with Customers In the third quarters of 2019 and 2018, we recognized $0.2 million and $0.5 million of revenue within our Pipeline Inspection segment, respectively, on services performed in previous years. We had constrained recognition of this revenue until the expiration of a contract provision that had given the customer the opportunity to reopen negotiation of the fee paid for the services. As of December 31, 2019 and December 31, 2018, we recognized a refund liability of $0.7 million and $0.4 million within our Pipeline Inspection segment, respectively, for revenue associated with such variable consideration. In the first quarter of 2018, we recognized $0.3 million of revenue within our Pipeline & Process Services segment associated with additional billings on a project that we completed in the fourth quarter of 2017 (we recognized the revenue upon receipt of customer acknowledgment of the additional fees). |
Accrued Payroll and Other | Accrued Payroll and Other Accrued payroll and other December 31, 2019 December 31, 2018 (in thousands) Accrued payroll $ 9,670 $ 9,468 Customer deposits 1,682 1,202 Litigation settlement (Note 13) 1,900 — Other 1,598 1,606 $ 14,850 $ 12,276 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents; trade accounts receivable, net; prepaid expenses and other; accounts payable; accounts payable – affiliates; accrued payroll and other; and income taxes payable approximate their fair values. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are reported at fair value on a nonrecurring basis in our Consolidated Balance Sheets. The following methods and assumptions were used to estimate the fair values: Property, Plant, and Equipment We assess property and equipment for possible impairment whenever events or changes in circumstances indicate, in the judgment of management, that the carrying value of the assets may not be recoverable. Such indicators include, among others, the nature of the asset, the projected future economic benefit of the asset, changes in regulatory and political environments, and historical and future cash flow and profitability measurements. If the carrying value of an asset exceeds the future undiscounted cash flows expected from the asset, we recognize an impairment charge for the excess of carrying value of the asset over its estimated fair value. Determination as to whether and how much an asset is impaired involves management estimates on highly uncertain matters such as future commodity prices, the effects of inflation on operating expenses, and the outlook for national or regional market supply and demand for the services we provide. Assets are grouped for impairment purposes at each water treatment facility in the Environmental Services segment, as these asset groups represent the lowest level at which cash flows are separately identifiable. Goodwill At December 31, 2019 and 2018, we had $50.4 million and $50.3 million, respectively, of goodwill on our Consolidated Balance Sheets. Goodwill is not amortized, but is subject to annual assessments on November 1 (or at other dates if events or changes in circumstances indicate that the carrying value of goodwill may be impaired) for impairment at a reporting unit level. The reporting units used to evaluate and measure goodwill for impairment are determined primarily from the manner in which the business is managed or operated. We have determined that our Pipeline Inspection, Pipeline & Process Services, and Environmental Services operating segments are the appropriate reporting units for testing goodwill impairment. To perform a goodwill impairment assessment, we first evaluate qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit exceeds its carrying value. If this assessment reveals that it is more likely than not that the carrying value of a reporting unit exceeds its fair value, we then determine the estimated fair market value of the reporting unit. If the carrying amount exceeds the reporting unit’s fair value, we record a goodwill impairment charge for the excess (not exceeding the carrying value of the reporting unit’s goodwill). Identifiable Intangible Assets Our intangible assets consist primarily of customer relationships, trade names, and our database of inspectors. We recorded these intangible assets as part of our accounting for the acquisitions of businesses and we amortize these assets on a straight-line basis over their estimated useful lives, which typically range from 5 – 20 years (see Note 5). We review our intangible assets for impairment whenever events or circumstances indicate that the asset group to which they relate may be impaired. To perform an impairment assessment, we first determine whether the cash flows expected to be generated from the asset group exceed the carrying value of the asset group. If such estimated cash flows do not exceed the carrying value of the asset group, we reduce the carrying value of the assets to their fair values and record a corresponding impairment loss. Depending on future events, it is reasonably possible that we could incur impairment charges associated with our property and equipment, goodwill, or intangible assets. |
Noncontrolling Interests | Noncontrolling Interest We own a 51% interest in Brown and a 49% interest in CF Inspection Management, LLC (“CF Inspection”). The accounts of these subsidiaries are included in our Consolidated Financial Statements. The portion of the net income (loss) of these entities that is attributable to outside owners is reported in net income (loss) attributable to noncontrolling interests noncontrolling interests |
Business Combinations | Business Combinations We evaluate all potential acquisitions and changes in control to determine whether we have purchased or acquired control of a business. If the acquired or newly-controlled assets meet the definition of a business, the transaction is accounted for as a business combination; otherwise it is accounted for as an asset acquisition. |
Gains on Asset Disposals | Gains on Asset Disposals During 2018, we sold our two water treatment facilities in Texas and recorded a combined gain of $3.6 million. During 2018, we received proceeds of $0.4 million from the settlement of litigation related to lightning strikes that occurred in 2017 at our facilities in Orla, Texas and Grassy Butte, North Dakota. This litigation related to the non-performance of certain lightning protection equipment we had purchased to protect the facilities against lightning strikes. The proceeds from these settlements are reported within gain on asset disposals, net During 2017, lightning strikes and the resultant fires destroyed the surface equipment at two of our facilities. We carried property damage and cleanup insurance on both facilities, and the proceeds we received on these policies were in excess of the net book value of the destroyed property and the cleanup costs we incurred. We recorded a net gain of $0.6 million in 2017 related to these incidents, reported within gain on asset disposals, net |
Foreign Currency Translation | Foreign Currency Translation Our Consolidated Financial Statements are reported in U.S. dollars. We translate our Canadian-dollar-denominated assets and liabilities into U.S. dollars at the exchange rate in effect at the balance sheet date. We translate our Canadian-dollar-denominated revenues and expenses into U.S. dollars at the average exchange rate in effect during the period. Our Consolidated Balance Sheet at December 31, 2019 includes $2.6 million of accumulated other comprehensive loss accumulated other comprehensive loss partners’ capital Our Canadian subsidiary has certain payables to our U.S.-based subsidiaries. These intercompany payables and receivables among our consolidated subsidiaries are eliminated in our Consolidated Balance Sheets. Beginning April 1, 2017, with the expiration of a contract with our largest Canadian customer, we report currency translation adjustments on these intercompany payables and receivables within foreign currency gains (losses) other comprehensive income (loss) accumulated other comprehensive loss |
New Accounting Standards | New Accounting Standards In 2019, we adopted the following new accounting standard issued by the Financial Accounting Standards Board (“FASB”): The FASB issued ASU 2016-02 – Leases We made accounting policy elections to not capitalize leases with a lease term of twelve months or less and to not separate lease and non-lease components for all asset classes. We also elected the package of practical expedients within ASU 2016-02 that allows an entity to not reassess prior to the effective date (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or (iii) initial direct costs for any existing leases, but did not elect the practical expedient of hindsight when determining the lease term of existing contracts at the effective date. In July 2018, the FASB issued ASU 2018-11 – Targeted Improvements In 2018, we adopted the following new accounting standards issued by the FASB: The FASB issued Accounting Standards Update (“ASU”) 2014-09 – Revenue from Contracts with Customers The FASB issued ASU 2016-18 - Statement of Cash Flows - Restricted Cash In 2017, we adopted the following new accounting standards issued by the FASB: The FASB issued ASU 2016-09 – Compensation – Stock Compensation The FASB issued ASU 2017-04 – Intangibles – Goodwill and Other Other accounting guidance proposed by the FASB impacting our Consolidated Financial Statements which we adopted on January 1, 2020 include: The FASB issued ASU 2018-15 – Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Other accounting guidance proposed by the FASB that may impact our Consolidated Financial Statements, which we have not yet adopted include: The FASB issued ASU 2016-13 – Financial Instruments – Credit Losses |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of accrued payroll and other | Accrued payroll and other December 31, 2019 December 31, 2018 (in thousands) Accrued payroll $ 9,670 $ 9,468 Customer deposits 1,682 1,202 Litigation settlement (Note 13) 1,900 — Other 1,598 1,606 $ 14,850 $ 12,276 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consist of the following, recorded at cost, as of December 31, 2019 and 2018: December 31, Asset Category Useful Lives (years) 2019 2018 (in thousands) Land $ 1,301 $ 1,301 Land improvements 15 984 952 Buildings and leasehold improvements 30 - 39 1,183 1,183 Facilities, wells and equipment 5 - 15 19,231 18,736 Computer and office equipment 3 - 9 3,454 1,357 Vehicles and other 3 - 5 346 459 26,499 23,988 Less accumulated depreciation (13,738 ) (11,266 ) Net property, plant and equipment $ 12,761 $ 12,722 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Changes in goodwill are as follows: Pipeline Pipeline and Environmental Inspection Process Services Services Total (in thousands) Balance - December 31, 2016 $ 40,247 $ 1,581 $ 15,075 $ 56,903 Impairments — (1,581 ) — (1,581 ) Foreign currency translation 97 — — 97 Reclassified to assets held for sale — — (1,984 ) (1,984 ) Balance - December 31, 2017 $ 40,344 $ — $ 13,091 $ 53,435 Foreign currency translation (116 ) — — (116 ) Dispositions — — (3,025 ) (3,025 ) Balance - December 31, 2018 $ 40,228 $ — $ 10,066 $ 50,294 Foreign currency translation 62 — — 62 Balance - December 31, 2019 $ 40,290 $ — $ 10,066 $ 50,356 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of intangible assets | Intangible assets consist of the following at December 31, 2019 and 2018: December 31, Asset Category Useful Lives 2019 2018 (years) (in thousands) Customer relationships 5 - 20 $ 22,853 $ 22,853 Contracts 3 241 241 Non-compete agreements 3 143 143 Trademarks and trade names 10 11,679 11,679 Inspector database 10 2,080 2,080 36,996 36,996 Less accumulated amortization (16,933 ) (14,237 ) Net intangibles $ 20,063 $ 22,759 |
Schedule of future amortization expense | Future amortization expense of our intangible assets is estimated to be as follows: Year ending December 31, (in thousands) 2020 $ 2,677 2021 2,668 2022 2,668 2023 2,070 2024 1,497 Thereafter 8,483 $ 20,063 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefit) | Significant components of income tax expense (benefit) are as follows for the years ended December 31: 2019 2018 2017 (in thousands) Current tax expense (benefit): U.S. federal $ 1,007 $ 497 $ 356 State 1,329 797 531 Canadian (46 ) (27 ) 81 Total 2,290 1,267 968 Deferred tax expense (benefit): U.S. federal (36 ) 36 (7 ) State (15 ) 15 (2 ) Canadian 15 — (363 ) Total (36 ) 51 (372 ) Total income tax expense $ 2,254 $ 1,318 $ 596 |
Schedule of effective income tax reconciliation | The following table reconciles the differences between the U.S. federal statutory rate of 21% in 2019 and 2018 and 35% in 2017 to the Partnership’s income tax expense on the Consolidated Statements of Operations for the years ended December 31: 2019 2018 2017 (in thousands) Tax (benefit) computed at statutory rate $ 4,132 $ 2,817 $ (464 ) (Income) loss not subject to federal tax (3,102 ) (2,396 ) 682 State income taxes, net of federal benefit 1,265 787 509 Other (41 ) 110 (131 ) $ 2,254 $ 1,318 $ 596 |
Owners' Equity (Tables)
Owners' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of the calculation of the basic net income per common limited partner unit | The following summarizes the calculation of the basic net income per common limited partner unit for the periods presented: Twelve Months Ended December 31 2019 2018 2017 (in thousands, except per unit data) Net income attributable to common unitholders $ 11,881 $ 8,968 $ 3,237 Weighted average common units outstanding 12,039 11,929 11,152 Basic net income per common limited partner unit $ 0.99 $ 0.75 $ 0.29 |
Schedule of the calculation of the diluted net income per common limited partner unit | The following summarizes the calculation of the diluted net income per common limited partner unit Twelve Months Ended December 31 2019 2018 2017 (in thousands, except per unit data) Net income attributable to common unitholders $ 11,881 $ 8,968 $ 3,237 Net income attributable to preferred unitholder 4,133 2,445 — $ 16,014 $ 11,413 $ 3,237 Weighted average common units outstanding 12,039 11,929 11,152 Effect of dilutive securities: Weighted average preferred units outstanding 5,769 3,413 — Long-term incentive plan unvested units 481 415 101 Diluted weighted average common units outstanding 18,289 15,757 11,253 Diluted net income per common limited partner unit $ 0.88 $ 0.72 $ 0.29 |
Major Customers (Tables)
Major Customers (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Schedule of major customers | The following table sets forth the customers who accounted for more than 10% of our consolidated revenue for the years ended December 31, 2019, 2018, and 2017: 2019 2018 2017 Pacific Gas and Electric Company Pacific Gas and Electric Company Enterprise Products Partners L.P. Phillips 66 Plains All American Pipeline, L.P. Pacific Gas and Electric Company Plains All American Pipeline, L.P. Plains All American Pipeline, L.P. |
Equity Compensation (Tables)
Equity Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Performance Units [Member] | |
Schedule of the granted, vested and forfeited Units under the LTIP | The following table summarizes the activity of the Performance Units in 2019, 2018, and 2017: Number of Weighted Average Units at December 31, 2016 77,495 $ 7.75 Units granted — $ — Units vested — $ — Units forfeited — $ — Units at December 31, 2017 77,495 $ 7.75 Units granted 72,046 $ 4.52 Units vested (7,184 ) $ 8.49 Units forfeited (40,709 ) $ 8.49 Units at December 31, 2018 101,648 $ 5.11 Units granted 89,402 $ 4.19 Units vested (6,167 ) $ 6.54 Units forfeited (24,310 ) $ 6.45 Units at December 31, 2019 160,573 $ 4.34 |
Market Units [Member] | |
Schedule of the granted, vested and forfeited Units under the LTIP | The following table summarizes the activity of the Market Units for 2019: Number of Weighted Average Units at December 31, 2018 — $ — Units granted 89,403 $ 3.54 Units vested — $ — Units forfeited (875 ) $ 3.54 Units at December 31, 2019 88,528 $ 3.54 |
Service Units [Member] | |
Schedule of the granted, vested and forfeited Units under the LTIP | The following table summarizes the activity of the Service Units in 2019, 2018, and 2017: Number of Weighted Average Units at December 31, 2016 496,407 $ 10.19 Units granted 257,419 $ 7.02 Units vested (44,408 ) $ 16.56 Units forfeited (122,404 ) $ 9.25 Units at December 31, 2017 587,014 $ 8.56 Units granted 399,726 $ 3.24 Units vested (69,296 ) $ 13.97 Units forfeited (44,383 ) $ 5.76 Units at December 31, 2018 873,061 $ 5.83 Units granted 201,306 $ 4.40 Units vested (145,200 ) $ 8.48 Units forfeited (64,635 ) $ 6.10 Units at December 31, 2019 864,532 $ |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of operating lease obligations | Our operating lease obligations at December 31, 2019 with terms that are greater than one year mature as follows (in thousands): 2020 $ 624 2021 679 2022 679 2023 679 2024 625 Thereafter 95 Total lease payments $ 3,381 Less imputed interest (497 ) Total operating lease obligation $ 2,884 |
Schedule of finance lease obligations | Our finance lease obligations at December 31, 2019 with terms that are greater than one year mature as follows (in thousands): 2020 $ 210 2021 201 2022 136 2023 38 Total lease payments $ 585 Less imputed interest (43 ) Total finance lease obligation $ 542 |
Schedule of lease expense | During the year ended December 31, 2019, our lease expense consists of the following components (in thousands): Year Ended Finance lease expense: Amortization of right-of-use assets $ 178 Interest on lease liabilities 31 Operating lease expense 672 Short-term lease expense - general and administrative 103 Short-term lease expense - costs of services (a) 3,570 Variable lease expense 10 Sublease income - related parties (32 ) Total lease expense $ 4,532 (a) These short-term lease expenses are included in costs of services |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of operating income by reportable segment and a reconciliation of segment operating income to net income | The following table outlines segment operating income and a reconciliation of total segment operating income to net income before income tax expense. Pipeline Pipeline and Environmental Other Total (in thousands) Twelve months ended December 31, 2019 Revenues $ 371,994 $ 19,337 $ 10,317 $ — $ 401,648 Costs of services 331,498 13,397 3,029 — 347,924 Gross margin 40,496 5,940 7,288 — 53,724 General and administrative 19,086 (a) 2,500 2,995 (b) 1,045 25,626 Depreciation, amortization and accretion 2,224 574 1,632 18 4,448 Losses (gains) on asset disposals, net 1 (26 ) — — (25 ) Operating income (loss) $ 19,185 $ 2,892 $ 2,661 $ (1,063 ) $ 23,675 Interest expense, net (5,330 ) Foreign currency gains 222 Other, net 1,111 Net income before income tax expense $ 19,678 Twelve months ended December 31, 2018 Revenues $ 288,083 $ 15,001 $ 11,876 $ — $ 314,960 Costs of services 256,436 10,708 3,770 — 270,914 Gross margin 31,647 4,293 8,106 — 44,046 General and administrative 17,010 (c) 2,379 3,295 (b) 1,060 23,744 Depreciation, amortization and accretion 2,237 592 1,575 — 4,404 Gains on asset disposals, net (21 ) (83 ) (4,004 ) — (4,108 ) Operating income (loss) $ 12,421 $ 1,405 $ 7,240 $ (1,060 ) $ 20,006 Interest expense, net (6,320 ) Foreign currency losses (643 ) Other, net 373 Net income before income tax expense $ 13,416 Twelve months ended December 31, 2017 Revenues $ 268,635 $ 9,268 $ 8,439 $ — $ 286,342 Costs of services 241,889 7,347 3,503 — 252,739 Gross margin 26,746 1,921 4,936 — 33,603 General and administrative 13,980 (d) 1,981 2,451 (e) 2,643 (f) 21,055 Depreciation, amortization and accretion 2,331 626 1,486 — 4,443 Impairments 1,329 1,581 688 — 3,598 Losses (gains) on asset disposals, net 18 — (588 ) — (570 ) Operating income (loss) $ 9,088 $ (2,267 ) $ 899 $ (2,643 ) $ 5,077 Interest expense, net (7,335 ) Foreign currency gains 732 Other, net 199 Net loss before income tax expense $ (1,327 ) Total Assets December 31, 2019 $ 114,858 $ 14,318 $ 21,911 $ 6,255 $ 157,342 December 31, 2018 $ 116,239 $ 10,972 $ 24,281 $ 1,361 $ 152,853 (a) Amount includes $3.3 million of the administrative fee charged by Holdings specified in the omnibus agreement. (b) Amount includes $1.2 million of the administrative fee charged by Holdings specified in the omnibus agreement. (c) Amount includes $2.8 million of the administrative fee charged by Holdings specified in the omnibus agreement. (d) Amount includes $1.4 million of the administrative fee charged by Holdings specified in the omnibus agreement. (e) Amount includes $0.6 million of the administrative fee charged by Holdings specified in the omnibus agreement. (f) Amount includes $1.8 million of allocated general and administrative expenses incurred by Holdings but not charged to us. For the six months ended June 30, 2017, Holdings waived the administrative fee specified in the omnibus agreement. |
Distributions (Tables)
Distributions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
celp_DebtCovenantInterestCoverageRatioMinimum | |
Schedule of cash distributions declared and paid by the Partnership | The following table summarizes the cash distributions that we declared and paid on common and subordinated units since our initial public offering: Payment Date Per Unit Cash Total Cash Total Cash (in thousands) Total 2014 Distributions $ 1.104646 $ 13,064 $ 8,296 Total 2015 Distributions 1.625652 19,232 12,284 Total 2016 Distributions 1.625652 19,258 12,414 Total 2017 Distributions 1.036413 12,310 7,928 February 14, 2018 0.210000 2,498 1,599 May 15, 2018 0.210000 2,506 1,604 August 14, 2018 0.210000 2,506 1,604 November 14, 2018 0.210000 2,509 1,606 Total 2018 Distributions 0.840000 10,019 6,413 February 14, 2019 0.210000 2,510 1,606 May 15, 2019 0.210000 2,531 1,622 August 14, 2019 0.210000 2,534 1,624 November 14, 2019 0.210000 2,534 1,627 Total 2019 Distributions 0.840000 10,109 6,479 February 14, 2020 (b) 0.210000 2,534 1,627 Total Distributions (through February 14, 2020 since IPO) $ 7.282363 $ 86,526 $ 55,441 (a) Approximately 64% of the Partnership’s outstanding common units at December 31, 2019 were held by affiliates. (b) Fourth quarter 2019 distribution was declared and paid in the first quarter of 2020. |
Schedule of distributions paid to our preferred unitholder | The following table summarizes the distributions paid to our preferred unitholder for 2018 and 2019: Payment Date Cash Paid-in-Kind Total (in thousands) November 14, 2018 (a) $ 1,412 $ — $ 1,412 Total 2018 Distributions 1,412 — 1,412 February 14, 2019 1,033 — 1,033 May 15, 2019 1,033 — 1,033 August 14, 2019 1,033 — 1,033 November 14, 2019 1,034 — 1,034 Total 2019 Distributions 4,133 — 4,133 February 14, 2020 (b) 1,033 — 1,033 Total Distributions (through February 14, 2020) $ 6,578 $ — $ 6,578 (a) This distribution relates to the period from May 29, 2018 (date of preferred unit issuance) through September 30, 2018. (b) Fourth quarter 2019 distribution was declared and paid in the first quarter of 2020. |
Quarterly Financial Informati_2
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | The following table sets forth certain unaudited financial data for each quarter in 2018 and 2019. The unaudited quarterly information includes all normal recurring adjustments that we consider necessary for a fair presentation of the information shown. 2019 Quarter Ended, (in thousands, except per unit amounts) March 31 June 30 September 30 December 31 Revenues $ 90,376 $ 111,091 $ 108,934 $ 91,247 Gross margin 10,023 14,807 15,401 13,493 Net income 1,381 5,643 5,480 4,920 Net income attributable to partners / controlling interests 1,600 5,366 4,846 4,202 Net income per common limited partner unit - basic 0.05 0.36 0.32 0.26 Net income per common limited partner unit - diluted 0.05 0.29 0.26 0.23 2018 Quarter Ended, (in thousands, except per unit amounts) March 31 June 30 September 30 December 31 Revenues $ 64,826 $ 76,468 $ 84,778 $ 88,888 Gross margin 8,129 10,943 12,908 12,066 Gains (losses) on asset disposals, net 1,709 1,606 822 (29 ) Net income 960 3,556 4,954 2,628 Net income attributable to partners / controlling interests 725 3,407 4,665 2,616 Net income per common limited partner unit - basic 0.06 0.25 0.30 0.13 Net income per common limited partner unit - diluted 0.06 0.24 0.26 0.13 |
Organization and Operations (De
Organization and Operations (Details Narrative) - Environmental Services [Member] | 12 Months Ended |
Dec. 31, 2019Number | |
Number of water treatment facilities | 9 |
Number of EPA Class II injection wells | 10 |
Number of pipeline gathering systems connected to water treatment facilities | 12 |
Number of pipeline gathering systems developed and owned by Partnership | 2 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Accrued payroll | $ 9,670 | $ 9,468 |
Customer deposits | 1,682 | 1,202 |
Litigation settlement (Note 13) | 1,900 | |
Other | 1,598 | 1,606 |
Total | $ 14,850 | $ 12,276 |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Threshold for nontaxation | 90.00% | ||||||
Allowance for doubtful accounts receivable | $ 200 | ||||||
Bad debt expense | 200 | ||||||
Proceeds from accounts receivable previously written-off | 100 | $ 300 | |||||
Gain (loss) on asset disposals, net | $ (29) | $ 822 | $ 1,606 | $ 1,709 | 25 | $ 4,108 | 570 |
Proceeds from the settlement of litigation | 400 | ||||||
Gain on insurance recovery | 600 | ||||||
Restricted cash | 600 | 600 | 600 | ||||
Pipeline & Process Services [Member] | |||||||
Gain (loss) on asset disposals, net | 26 | 83 | |||||
Pipeline Inspection [Member] | |||||||
Gain (loss) on asset disposals, net | $ (1) | 21 | (18) | ||||
Environmental Services [Member] | |||||||
Gain (loss) on asset disposals, net | 4,004 | ||||||
Environmental Services Segment [Member] | |||||||
Gain (loss) on asset disposals, net | 3,600 | ||||||
Environmental Services [Member] | |||||||
Gain (loss) on asset disposals, net | 588 | ||||||
Water Treatment Facilities [Member] | |||||||
Gain (loss) on asset disposals, net | 3,600 | ||||||
Allocated Overhead Expenses [Member] | |||||||
Partners' capital account, contributions | 1,800 | ||||||
General and Administrative [Member] | |||||||
Partners' capital account, contributions | 2,300 | ||||||
Minimum [Member] | |||||||
Finite-lived intangible asset, useful life | 5 years | ||||||
Maximum [Member] | |||||||
Finite-lived intangible asset, useful life | 20 years | ||||||
Cash FDIC insured amount | $ 250 | ||||||
Cash CDIC insured amount | $ 100 | ||||||
Allowance for doubtful accounts receivable | $ 100 | 100 | |||||
Bad debt expense | $ 100 | $ 100 | |||||
CF Inspection Management, LLC [Member] | |||||||
Subsidiary ownership interest | 49.00% | ||||||
Brown Integrity, LLC [Member] | |||||||
Subsidiary ownership interest | 51.00% | ||||||
Brown Integrity, LLC [Member] | Pipeline Inspection [Member] | |||||||
Subsidiary ownership interest | 51.00% |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies (Details Narrative 1) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||
Mar. 31, 2020USD ($) | Nov. 30, 2019USD ($) | Jan. 31, 2019USD ($) | Jan. 28, 2019USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)Number | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 29, 2019USD ($) | Jan. 02, 2019USD ($) | Dec. 31, 2016USD ($) | |
Allowance for doubtful accounts receivable | $ 200 | $ 200 | ||||||||||||||||
Revenues | 91,247 | $ 108,934 | $ 111,091 | $ 90,376 | $ 88,888 | $ 84,778 | $ 76,468 | $ 64,826 | 401,648 | $ 314,960 | $ 286,342 | |||||||
Loss on sale of accounts receivable | 515 | |||||||||||||||||
Goodwill | 50,356 | 50,294 | 50,356 | 50,294 | 53,435 | $ 56,903 | ||||||||||||
Right of use asset | 2,942 | 2,942 | ||||||||||||||||
Accumulated other comprehensive loss, foreign currency translation | 2,577 | 2,577 | ||||||||||||||||
Operating lease, current | 459 | 459 | ||||||||||||||||
Operating lease, noncurrent | 2,425 | 2,425 | ||||||||||||||||
Pipeline & Process Services [Member] | ||||||||||||||||||
Revenues | 19,337 | 15,001 | 9,268 | |||||||||||||||
Goodwill | 1,581 | |||||||||||||||||
Revenue from additional billings | $ 300 | |||||||||||||||||
Pipeline Inspection [Member] | ||||||||||||||||||
Revenues | 371,994 | 288,083 | 268,635 | |||||||||||||||
Revenue recognized for services performed in prior years | 200 | 500 | ||||||||||||||||
Goodwill | 40,290 | 40,228 | 40,290 | 40,228 | 40,344 | 40,247 | ||||||||||||
Refund liability | 700 | 400 | 700 | 400 | ||||||||||||||
Revenue from retroactive price increases | 500 | |||||||||||||||||
Environmental Services [Member] | ||||||||||||||||||
Revenues | 10,317 | 11,876 | ||||||||||||||||
Environmental Services [Member] | ||||||||||||||||||
Revenues | 8,439 | |||||||||||||||||
Goodwill | 10,066 | 10,066 | $ 10,066 | 10,066 | 13,091 | $ 15,075 | ||||||||||||
PG&E Corporation [Member] | Pipeline Inspection segment [Member] | ||||||||||||||||||
Revenues | $ 2,800 | |||||||||||||||||
Accounts receivable, net | 10,300 | 10,300 | $ 12,100 | |||||||||||||||
Sale of receivables | $ 10,400 | |||||||||||||||||
Proceeds from sale of receivables | $ 9,800 | |||||||||||||||||
Proceeds from collection of receivables | $ 1,000 | |||||||||||||||||
Loss on sale of accounts receivable | 500 | |||||||||||||||||
PG&E Corporation [Member] | Pipeline Inspection segment [Member] | Subsequent Event [Member] | ||||||||||||||||||
Proceeds from collection of receivables | $ 1,700 | |||||||||||||||||
Accounting Standards 2016-02 [Member] | ||||||||||||||||||
Right of use asset | $ 3,500 | |||||||||||||||||
Operating lease, current | 500 | |||||||||||||||||
Operating lease, noncurrent | $ 3,000 | |||||||||||||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||||||||||||
Concentration risk, percentage | 10.00% | |||||||||||||||||
Number of customers | Number | 4 | |||||||||||||||||
Canada [Member] | ||||||||||||||||||
Revenues | $ 200 | $ 1,300 | $ 23,400 | |||||||||||||||
Minimum [Member] | Revenues [Member] | Customer Concentration Risk [Member] | ||||||||||||||||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | |||||||||||||||
Maximum [Member] | ||||||||||||||||||
Allowance for doubtful accounts receivable | $ 100 | $ 100 | ||||||||||||||||
Major Customer Two [Member] | Minimum [Member] | Revenues [Member] | Customer Concentration Risk [Member] | ||||||||||||||||||
Concentration risk, percentage | 15.00% | |||||||||||||||||
Sanchez Energy Corporation [Member] | ||||||||||||||||||
Accounts receivable, net | 400 | $ 400 | ||||||||||||||||
Accounts receivable before allowance | 500 | 500 | ||||||||||||||||
Sanchez Energy Corporation [Member] | Maximum [Member] | ||||||||||||||||||
Allowance for doubtful accounts receivable | $ 100 | $ 100 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property and equipment, at cost | $ 26,499 | $ 23,988 |
Accumulated depreciation | (13,738) | (11,266) |
Total property, plant and equipment | 12,761 | 12,722 |
Land Improvements [Member] | ||
Property and equipment, at cost | $ 984 | 952 |
Useful lives | 15 years | |
Buildings and Leasehold Improvements [Member] | ||
Property and equipment, at cost | $ 1,183 | 1,183 |
Facilities, Wells and Related Equipment [Member] | ||
Property and equipment, at cost | 19,231 | 18,736 |
Computer and Office Equipment [Member] | ||
Property and equipment, at cost | 3,454 | 1,357 |
Vehicles and Other [Member] | ||
Property and equipment, at cost | 346 | 459 |
Land [Member] | ||
Property and equipment, at cost | $ 1,301 | $ 1,301 |
Minimum [Member] | Buildings and Leasehold Improvements [Member] | ||
Useful lives | 30 years | |
Minimum [Member] | Facilities, Wells and Related Equipment [Member] | ||
Useful lives | 5 years | |
Minimum [Member] | Computer and Office Equipment [Member] | ||
Useful lives | 3 years | |
Minimum [Member] | Vehicles and Other [Member] | ||
Useful lives | 3 years | |
Maximum [Member] | Buildings and Leasehold Improvements [Member] | ||
Useful lives | 39 years | |
Maximum [Member] | Facilities, Wells and Related Equipment [Member] | ||
Useful lives | 15 years | |
Maximum [Member] | Computer and Office Equipment [Member] | ||
Useful lives | 9 years | |
Maximum [Member] | Vehicles and Other [Member] | ||
Useful lives | 5 years |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Depreciation | $ 2,800 | $ 2,800 | $ 2,700 |
Cost of services, depreciation | 1,100 | 1,100 | 1,100 |
Finance leases depreciation | 200 | ||
Asset impairment charges | 3,598 | ||
Other Property and Equipment [Member] | |||
Accumulated depreciation, depletion and amortization, property, plant and equipment disposed | $ 100 | 100 | |
Water Treatment Facilities [Member] | |||
Accumulated depreciation, depletion and amortization, property, plant and equipment disposed | $ 700 | ||
Asset impairment charges | $ 700 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Balance | $ 56,903 | $ 50,294 | $ 53,435 | $ 56,903 |
Impairments | (1,581) | |||
Foreign currency translation | 62 | (116) | 97 | |
Dispositions | (3,025) | |||
Reclassified to assets held for sale | (1,984) | |||
Balance | 50,356 | 50,294 | 53,435 | |
Pipeline Inspection [Member] | ||||
Balance | 40,247 | 40,228 | 40,344 | 40,247 |
Foreign currency translation | 62 | (116) | 97 | |
Balance | 40,290 | 40,228 | 40,344 | |
Environmental Services [Member] | ||||
Balance | 15,075 | 10,066 | 13,091 | 15,075 |
Dispositions | (3,025) | |||
Reclassified to assets held for sale | (1,984) | |||
Balance | $ 10,066 | $ 10,066 | 13,091 | |
Pipeline & Process Services [Member] | ||||
Balance | 1,581 | 1,581 | ||
Impairments | $ (1,600) | $ (1,581) |
Goodwill (Details Narrative)
Goodwill (Details Narrative) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
May 31, 2018USD ($) | Jan. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Goodwill impaired | $ 1,581 | |||||||||
Gain on asset disposals, net | $ (29) | $ 822 | $ 1,606 | $ 1,709 | $ 25 | $ 4,108 | 570 | |||
Goodwill disposed | 3,025 | |||||||||
Environmental Services Segment [Member] | ||||||||||
Gain on asset disposals, net | 3,600 | |||||||||
Goodwill disposed | $ 3,000 | $ 2,000 | ||||||||
Pipeline & Process Services [Member] | ||||||||||
Goodwill impaired | $ 1,600 | 1,581 | ||||||||
Gain on asset disposals, net | 26 | 83 | ||||||||
Pipeline Inspection [Member] | ||||||||||
Gain on asset disposals, net | $ (1) | 21 | (18) | |||||||
Environmental Services [Member] | ||||||||||
Gain on asset disposals, net | 4,004 | |||||||||
Environmental Services [Member] | ||||||||||
Gain on asset disposals, net | $ 588 | |||||||||
Goodwill disposed | $ 3,025 | |||||||||
Fair Value, Inputs, Level 3 [Member] | Measurement Input, Annual Cash Flow Growth Rate [Member] | Pipeline & Process Services [Member] | ||||||||||
Reporting unit measurement input | 0.02 | |||||||||
Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | Pipeline & Process Services [Member] | ||||||||||
Reporting unit measurement input | 0.18 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible assets | $ 36,996 | $ 36,996 |
Less accumulated amortization | (16,933) | (14,237) |
Intangible assets, net | 20,063 | 22,759 |
Customer Relationships [Member] | ||
Intangible assets | $ 22,853 | 22,853 |
Contracts [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | |
Intangible assets | $ 241 | 241 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | |
Intangible assets | $ 143 | 143 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Intangible assets | $ 11,679 | 11,679 |
Inspector Database [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Intangible assets | $ 2,080 | $ 2,080 |
Maximum [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 20 years | |
Maximum [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 20 years | |
Minimum [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 5 years | |
Minimum [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 5 years |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
2020 | $ 2,677 | |
2021 | 2,668 | |
2022 | 2,668 | |
2023 | 2,070 | |
2024 | 1,497 | |
Thereafter | 8,483 | |
Intangible assets, net | $ 20,063 | $ 22,759 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amortization expense | $ 2,700 | $ 2,700 | $ 2,800 | |
Pipeline Inspection [Member] | ||||
Impairment of intangible assets | $ 1,300 | |||
Trade Names [Member] | Pipeline Inspection [Member] | ||||
Impairment of intangible assets | 200 | |||
Customer Relationships [Member] | Pipeline Inspection [Member] | ||||
Impairment of intangible assets | $ 1,100 |
Credit Agreement (Details Narra
Credit Agreement (Details Narrative) $ in Thousands | Mar. 15, 2020USD ($) | Jan. 31, 2020USD ($) | May 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Credit facility, Average amount outstanding | $ 81,400 | $ 98,600 | $ 136,900 | |||
Long-term debt | 74,929 | 76,129 | ||||
Debt issuance costs, net | 803 | 1,260 | ||||
Write-off of debt issuance costs | $ 100 | 114 | ||||
Interest expense including commitment fee | 5,330 | 6,320 | 7,335 | |||
Finance lease liabilities | 542 | |||||
Repayment of credit facility | 9,000 | 63,271 | ||||
Borrowings on credit facility | 7,800 | 2,500 | ||||
Subsequent Event [Member] | ||||||
Long-term debt | $ 69,900 | |||||
Repayment of credit facility | $ 5,000 | |||||
Borrowings on credit facility | $ 32,000 | |||||
Line of Credit [Member] | ||||||
Interest expense including commitment fee | 4,800 | $ 5,800 | $ 6,800 | |||
Amended and Restated Credit Agreement [Member] | ||||||
Line of credit facility, maximum borrowing capacity | $ 110,000 | |||||
Line of credit facility, commitment fee percentage | 0.50% | |||||
Debt covenant total adjusted leverage ratio maximum | 4 | |||||
Debt covenant interest coverage ratio minimum | 3 | |||||
Total adjusted leverage ratio | 2.4 | |||||
Interest coverage ratio | 8.7 | |||||
Multiple of adjusted EBITDA | 4 | |||||
Trailing-twelve-month EBITDA | $ 31,400 | |||||
Credit agreement minimum unused capacity at time of distributions | $ 5,000 | |||||
Maximum [Member] | LIBOR [Member] | ||||||
Spread on variable rate borrowings | 4.00% | |||||
Maximum [Member] | Base Rate [Member] | ||||||
Spread on variable rate borrowings | 3.00% | |||||
Maximum [Member] | Line of Credit [Member] | ||||||
Debt instrument, interest rate, effective percentage during period | 6.02% | 6.02% | 5.32% | |||
Minimum [Member] | LIBOR [Member] | ||||||
Spread on variable rate borrowings | 2.50% | |||||
Minimum [Member] | Base Rate [Member] | ||||||
Spread on variable rate borrowings | 1.50% | |||||
Minimum [Member] | Line of Credit [Member] | ||||||
Debt instrument, interest rate, effective percentage during period | 4.70% | 4.74% | 3.90% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current tax expense (benefit): | |||
U.S. federal | $ 1,007 | $ 497 | $ 356 |
State | 1,329 | 797 | 531 |
Canadian | (46) | (27) | 81 |
Total | 2,290 | 1,267 | 968 |
Deferred tax expense (benefit): | |||
U.S. federal | (36) | 36 | (7) |
State | (15) | 15 | (2) |
Canadian | 15 | (363) | |
Total | (36) | 51 | (372) |
Total income tax expense | $ 2,254 | $ 1,318 | $ 596 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Tax (benefit) computed at statutory rate | $ 4,132 | $ 2,817 | $ (464) |
(Income) loss not subject to federal tax | (3,102) | (2,396) | 682 |
State income taxes, net of federal benefit | 1,265 | 787 | 509 |
Other | (41) | 110 | (131) |
Total income tax expense | $ 2,254 | $ 1,318 | $ 596 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Statutory tax rate | 21.00% | 21.00% | 35.00% |
Owners' Equity (Details)
Owners' Equity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | |||||||||||
Net income attributable to common unitholders | $ 11,881 | $ 8,968 | $ 3,237 | ||||||||
Weighted average common units outstanding (in shares) | 12,039 | 11,929 | 11,152 | ||||||||
Basic net income per common limited partner unit (in dollars per share) | $ 0.26 | $ 0.32 | $ 0.36 | $ 0.05 | $ 0.13 | $ 0.30 | $ 0.25 | $ 0.06 | $ 0.99 | $ 0.75 | $ 0.29 |
Owners' Equity (Details 1)
Owners' Equity (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | |||||||||||
Net income attributable to common unitholders | $ 11,881 | $ 8,968 | $ 3,237 | ||||||||
Net income attributable to preferred unitholder | 4,133 | 2,445 | |||||||||
Net income attributable to limited partners | $ 16,014 | $ 11,413 | $ 3,237 | ||||||||
Weighted average common units outstanding | 12,039 | 11,929 | 11,152 | ||||||||
Effect of dilutive securities: | |||||||||||
Weighted average preferred units outstanding | 5,769 | 3,413 | |||||||||
Long-term incentive plan unvested units | 481 | 415 | 101 | ||||||||
Diluted weighted average common units outstanding | 18,289 | 15,757 | 11,253 | ||||||||
Diluted net income per common limited partner unit | $ 0.23 | $ 0.26 | $ 0.29 | $ 0.05 | $ 0.13 | $ 0.26 | $ 0.24 | $ 0.06 | $ 0.88 | $ 0.72 | $ 0.29 |
Owners' Equity (Details Narrati
Owners' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | May 29, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Partner's capital, units outstanding (in shares) | 12,068,000 | 11,947,000 | |
Minimum quarterly distribution per unit to trigger incentive distribution | $ 0.445625 | ||
Description of ownership groups | Allocable to four ownership groups: (1) our preferred unitholder, (2) the noncontrolling interests in certain subsidiaries, (3) our General Partner and (4) our common unitholders. | ||
celp_DebtCovenantInterestCoverageRatioMinimum [Default Label] | |||
Annual rate of return of Preferred Units (percent) | 9.50% | ||
Dividend distribution to be paid in cash (percent) | 2.50% | ||
Dividend distribution to be paid in kind (percent) | 7.00% | ||
celp_DebtCovenantInterestCoverageRatioMinimum [Default Label] | Private Placement [Member] | |||
Number of units issued and sold in a private placement | 5,769,231 | ||
Price per unit (in dollars per unit) | $ 7.54 | ||
Proceeds of units sold in a private placement | $ 43,500 | ||
Annual rate of return of Preferred Units (percent) | 9.50% | ||
Dividend distribution to be paid in cash (percent) | 2.50% | ||
Dividend distribution to be paid in kind (percent) | 7.00% | ||
celp_DebtCovenantInterestCoverageRatioMinimum [Default Label] | Private Placement [Member] | Redemption Period Third [Member] | |||
Redemption price as percent of issue price | 101.00% | ||
celp_DebtCovenantInterestCoverageRatioMinimum [Default Label] | Private Placement [Member] | Redemption Period Two [Member] | |||
Redemption price as percent of issue price | 105.00% | ||
Common Units [Member] [Default Label] | |||
Partner's capital, units outstanding (in shares) | 12,068,343 | 11,946,901 | |
Distribution Two [Member] | |||
Incentive distribution, quarterly distributions of available cash from operating surplus, percentage | 25.00% | ||
Total Cash Distribution [Member] | |||
Incentive distribution, quarterly distributions of available cash from operating surplus, percentage | 15.00% | ||
Distribution Three [Member] | |||
Incentive distribution, quarterly distributions of available cash from operating surplus, percentage | 50.00% | ||
Brown Integrity, LLC [Member] | |||
Percentage of income attributable to noncontrolling interests | 49.00% | ||
CF Inspection Management, LLC [Member] | |||
Percentage of income attributable to noncontrolling interests | 51.00% | ||
Partnership [Member] | General Partner [Member] | |||
Ownership interest | 0.00% |
Major Customers (Details)
Major Customers (Details) - Customer Concentration Risk [Member] | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts Receivable [Member] | |||
Concentration percentage | 10.00% | ||
Minimum [Member] | Revenues [Member] | |||
Concentration percentage | 10.00% | 10.00% | 10.00% |
Major Customer One [Member] | Revenues [Member] | |||
Name of major customer | Pacific Gas and Electric Company | Pacific Gas and Electric Company | Enterprise Products Partners L.P. |
Major Customer Two [Member] | Revenues [Member] | |||
Name of major customer | Phillips 66 | Plains All American Pipeline, L.P. | Pacific Gas and Electric Company |
Major Customer Two [Member] | Minimum [Member] | Revenues [Member] | |||
Concentration percentage | 15.00% | ||
Major Customer Three [Member] | Revenues [Member] | |||
Name of major customer | Plains All American Pipeline, L.P. | Plains All American Pipeline, L.P. |
Major Customers (Details Narrat
Major Customers (Details Narrative) - Customer Concentration Risk [Member] | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts Receivable [Member] | |||
Concentration percentage | 10.00% | ||
Minimum [Member] | Revenues [Member] | |||
Concentration percentage | 10.00% | 10.00% | 10.00% |
Equity Compensation (Details)
Equity Compensation (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Performance Units [Member] | |||
Equity Instruments Other than Options, Nonvested, Number of Shares | |||
Units at beginning | 101,648 | 77,495 | 77,495 |
Units granted | 89,402 | 72,046 | |
Units vested | (6,167) | (7,184) | |
Units forfeited | (24,310) | (40,709) | |
Units at ending | 160,573 | 101,648 | 77,495 |
Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Units at beginning | $ 5.11 | $ 7.75 | $ 7.75 |
Units granted | 4.19 | 4.52 | |
Units vested | 6.54 | 8.49 | |
Units forfeited | 6.45 | 8.49 | |
Units at ending | $ 4.34 | $ 5.11 | $ 7.75 |
Market Units [Member] | |||
Equity Instruments Other than Options, Nonvested, Number of Shares | |||
Units granted | 89,403 | ||
Units forfeited | (875) | ||
Units at ending | 88,528 | ||
Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Units granted | $ 3.54 | ||
Units forfeited | 3.54 | ||
Units at ending | $ 3.54 | ||
Service Units [Member] | |||
Equity Instruments Other than Options, Nonvested, Number of Shares | |||
Units at beginning | 873,061 | 587,014 | 496,407 |
Units granted | 201,306 | 399,726 | 257,419 |
Units vested | (145,200) | (69,296) | (44,408) |
Units forfeited | (64,635) | (44,383) | (122,404) |
Units at ending | 864,532 | 873,061 | 587,014 |
Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Units at beginning | $ 5.83 | $ 8.56 | $ 10.19 |
Units granted | 4.40 | 3.24 | 7.02 |
Units vested | 8.48 | 13.97 | 16.56 |
Units forfeited | 6.10 | 5.76 | 9.25 |
Units at ending | $ 5.04 | $ 5.83 | $ 8.56 |
Equity Compensation (Details Na
Equity Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based compensation expense | $ 1,107 | $ 1,247 | $ 1,059 |
Long Term Incentive Plan [Member] | |||
Shares authorized under plan | 2,500,000 | ||
Share-based compensation expense | $ 1,100 | 1,200 | 1,100 |
Long Term Incentive Plan [Member] | Tranche Two [Member] | |||
Percentage of awards vesting | 33.33% | ||
Vesting period | 4 years | ||
Long Term Incentive Plan [Member] | Tranche One [Member] | |||
Percentage of awards vesting | 33.33% | ||
Vesting period | 3 years | ||
Long Term Incentive Plan [Member] | Tranche Three [Member] | |||
Percentage of awards vesting | 33.33% | ||
Vesting period | 5 years | ||
Predecessor Long Term Incentive Plan [Member] | Profit Interest Units [Member] | |||
Share-based compensation expense | 100 | $ 100 | |
Units outstanding | 44,451 | ||
Performance Units [Member] | |||
Compensation cost not yet recognized | $ 400 | $ 200 | |
Period for recognition of compensation cost | 2 years 7 months 6 days | 2 years 1 month 6 days | |
Unvested units granted | $ 4.19 | $ 4.52 | |
Market Units [Member] | |||
Compensation cost not yet recognized | $ 300 | ||
Period for recognition of compensation cost | 2 years 3 months 18 days | ||
Unvested units granted | $ 3.54 | ||
Service Units [Member] | |||
Compensation cost not yet recognized | $ 2,300 | $ 2,900 | |
Period for recognition of compensation cost | 1 year 10 months 24 days | 2 years 1 month 6 days | |
Unvested units granted | $ 4.40 | $ 3.24 | $ 7.02 |
Third Quarter 2019 [Member] | Performance Units [Member] | |||
Period for recognition of compensation cost | 3 years 8 months 23 days | ||
Unvested units granted | $ 4.19 | ||
Third Quarter 2019 [Member] | Market Units [Member] | |||
Period for recognition of compensation cost | 2 years 8 months 23 days | ||
Unvested units granted | $ 3.51 | ||
Grants in 2019 [Member] | Market Units [Member] | |||
Period for recognition of compensation cost | 2 years 8 months 23 days | ||
Unvested units granted | $ 3.58 |
Related-Party Transactions (Det
Related-Party Transactions (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity in earnings of investee | $ 214 | $ 217 | $ 149 | |
Contribution attributable to general partner | 2,300 | |||
celp_DebtCovenantInterestCoverageRatioMinimum [Default Label] | Affiliated Entity [Member] | Private Placement [Member] | ||||
Proceeds of units sold in a private placement | $ 43,500 | |||
General Partner [Member] | Omnibus Agreement [Member] | ||||
Annual administrative fee | 4,500 | 4,000 | 4,000 | |
Waiver of quarterly administrative fee | 2,000 | |||
Non-cash allocated costs | 1,800 | |||
Administrative fee expense | $ 4,500 | 4,000 | 2,000 | |
Alati Arnegard LLC [Member] | ||||
Ownership interest | 25.00% | |||
Management fee revenue from related parties | $ 700 | 700 | 600 | |
Equity in earnings of investee | 200 | 200 | $ 100 | |
Accounts receivable from related parties | 100 | 100 | ||
Investment in Arnegard | $ 400 | $ 200 | ||
CF Inspection Management, LLC [Member] | ||||
Ownership interest | 49.00% | |||
CF Inspection Management, LLC [Member] | Cynthia A. Field [Member] | ||||
Ownership interest | 51.00% |
Related-Party Transactions (D_2
Related-Party Transactions (Details Narrative 1) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CF Inspection Management, LLC [Member] | |||
Ownership interest | 49.00% | ||
CF Inspection Management, LLC [Member] | Cynthia A. Field [Member] | |||
Ownership interest | 51.00% | ||
CF Inspection Management, LLC [Member] | Revenues [Member] | |||
Concentration percentage | 3.30% | 3.40% | 3.50% |
Alati Arnegard LLC [Member] | |||
Ownership interest | 25.00% |
Leases (Details)
Leases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 624 |
2021 | 679 |
2022 | 679 |
2023 | 679 |
2024 | 625 |
Thereafter | 95 |
Total lease payments | 3,381 |
Less imputed interest | (497) |
Total operating lease obligation | $ 2,884 |
Leases (Details 1)
Leases (Details 1) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 210 |
2021 | 201 |
2022 | 136 |
2023 | 38 |
Total lease payments | 585 |
Less imputed interest | (43) |
Total finance lease obligation | $ 542 |
Leases (Details 2)
Leases (Details 2) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($) | ||
Amortization of right-of-use assets | $ 178 | |
Interest on lease liabilities | 31 | |
Operating lease expense | 672 | |
Short-term lease expense | 103 | |
Variable lease expense | 10 | |
Sublease income - related parties | (32) | |
Total lease expense | 4,532 | |
Cost of Services [Member] | ||
Short-term lease expense | $ 3,570 | [1] |
[1] | These short-term lease expenses are included in costs of services within our Consolidated Statement of Operations. The nature of these expenses includes the rental of compressors, dryers, vehicles, frac tanks, launchers, receivers and various other types of equipment. These rentals have lease terms of one year or less. |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
ROU operating lease assets | $ 2,942 | ||
Operating leases maturity terms | 2024-11 | ||
Operating leases, weighted average remaining lease term | 5 years 1 month 6 days | ||
Operating leases, weighted average discount rate | 6.10% | ||
Finance lease, weighted average remaining lease term | 2 years 8 months 12 days | ||
Finance lease, weighted average discount rate | 5.60% | ||
Lease expense | $ 3,700 | $ 3,200 | |
Office Space Headquarters [Member] | |||
ROU operating lease assets | $ 2,800 | ||
Cost of Services [Member] | |||
Lease expense | $ 3,000 | $ 2,400 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | Feb. 27, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Gain on settlement | $ 1,254 | |||
Performance Obligation [Member] | ||||
Short-term security deposits | $ 600 | 600 | $ 600 | |
Master Service Agreement Compliance Audits [Member] | ||||
Compliance audit contigencies reserve | 200 | $ 200 | $ 100 | |
Settled Litigation [Member] | ||||
Lawsuit filing date | February 27, 2019 | |||
Amount alleged owed in lawsuit for services | $ 3,500 | |||
Name of Plaintiff | Sun Mountain LLC | |||
Name of Defendant | TIR-PUC | |||
Gain on settlement | $ 1,300 |
Segment Disclosures (Details)
Segment Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |||||
Revenues | $ 91,247 | $ 108,934 | $ 111,091 | $ 90,376 | $ 88,888 | $ 84,778 | $ 76,468 | $ 64,826 | $ 401,648 | $ 314,960 | $ 286,342 | ||||
Costs of services | 347,924 | 270,914 | 252,739 | ||||||||||||
Gross margin | 13,493 | $ 15,401 | $ 14,807 | $ 10,023 | 12,066 | 12,908 | 10,943 | 8,129 | 53,724 | 44,046 | 33,603 | ||||
General and administrative | 25,626 | 23,744 | 21,055 | ||||||||||||
Depreciation, amortization and accretion | 4,448 | 4,404 | 4,443 | ||||||||||||
Impairments | 3,598 | ||||||||||||||
Losses (gains) on asset disposals, net | 29 | $ (822) | $ (1,606) | $ (1,709) | (25) | (4,108) | (570) | ||||||||
Operating income (loss) | 23,675 | 20,006 | 5,077 | ||||||||||||
Interest expense, net | (5,330) | (6,320) | (7,335) | ||||||||||||
Foreign currency (gains) losses | 222 | (643) | 732 | ||||||||||||
Other, net | 1,111 | 373 | 199 | ||||||||||||
Net income (loss) before income tax expense | 19,678 | 13,416 | (1,327) | ||||||||||||
Total assets | 157,342 | 152,853 | 157,342 | 152,853 | |||||||||||
Pipeline Inspection [Member] | |||||||||||||||
Revenues | 371,994 | 288,083 | 268,635 | ||||||||||||
Costs of services | 331,498 | 256,436 | 241,889 | ||||||||||||
Gross margin | 40,496 | 31,647 | 26,746 | ||||||||||||
General and administrative | 19,086 | [1] | 17,010 | [2] | 13,980 | [3] | |||||||||
Depreciation, amortization and accretion | 2,224 | 2,237 | 2,331 | ||||||||||||
Impairments | 1,329 | ||||||||||||||
Losses (gains) on asset disposals, net | 1 | (21) | 18 | ||||||||||||
Operating income (loss) | 19,185 | 12,421 | 9,088 | ||||||||||||
Total assets | 114,858 | 116,239 | 114,858 | 116,239 | |||||||||||
Other [Member] | |||||||||||||||
General and administrative | 1,045 | 1,060 | 2,643 | [4] | |||||||||||
Depreciation, amortization and accretion | 18 | ||||||||||||||
Operating income (loss) | (1,063) | (1,060) | (2,643) | ||||||||||||
Total assets | 6,255 | 1,361 | 6,255 | 1,361 | |||||||||||
Environmental Services [Member] | |||||||||||||||
Revenues | 10,317 | 11,876 | |||||||||||||
Costs of services | 3,029 | 3,770 | |||||||||||||
Gross margin | 7,288 | 8,106 | |||||||||||||
General and administrative | [5] | 2,995 | 3,295 | ||||||||||||
Depreciation, amortization and accretion | 1,632 | 1,575 | |||||||||||||
Impairments | 688 | ||||||||||||||
Losses (gains) on asset disposals, net | (4,004) | ||||||||||||||
Operating income (loss) | 2,661 | 7,240 | |||||||||||||
Total assets | 21,911 | 24,281 | 21,911 | 24,281 | |||||||||||
Pipeline & Process Services [Member] | |||||||||||||||
Revenues | 19,337 | 15,001 | 9,268 | ||||||||||||
Costs of services | 13,397 | 10,708 | 7,347 | ||||||||||||
Gross margin | 5,940 | 4,293 | 1,921 | ||||||||||||
General and administrative | 2,500 | 2,379 | 1,981 | ||||||||||||
Depreciation, amortization and accretion | 574 | 592 | 626 | ||||||||||||
Impairments | 1,581 | ||||||||||||||
Losses (gains) on asset disposals, net | (26) | (83) | |||||||||||||
Operating income (loss) | 2,892 | 1,405 | (2,267) | ||||||||||||
Total assets | $ 14,318 | $ 10,972 | $ 14,318 | 10,972 | |||||||||||
Environmental Services Segment [Member] | |||||||||||||||
Losses (gains) on asset disposals, net | $ (3,600) | ||||||||||||||
Environmental Services [Member] | |||||||||||||||
Revenues | 8,439 | ||||||||||||||
Costs of services | 3,503 | ||||||||||||||
Gross margin | 4,936 | ||||||||||||||
General and administrative | [6] | 2,451 | |||||||||||||
Depreciation, amortization and accretion | 1,486 | ||||||||||||||
Impairments | 688 | ||||||||||||||
Losses (gains) on asset disposals, net | (588) | ||||||||||||||
Operating income (loss) | $ 899 | ||||||||||||||
[1] | Amount includes $3.3 million of the administrative fee charged by Holdings specified in the omnibus agreement. | ||||||||||||||
[2] | Amount includes $2.8 million of the administrative fee charged by Holdings specified in the omnibus agreement. | ||||||||||||||
[3] | Amount includes $1.4 million of the administrative fee charged by Holdings specified in the omnibus agreement. | ||||||||||||||
[4] | Amount includes $1.8 million of allocated general and administrative expenses incurred by Holdings but not charged to us. For the six months ended June 30, 2017, Holdings waived the administrative fee specified in the omnibus agreement. | ||||||||||||||
[5] | Amount includes $1.2 million of the administrative fee charged by Holdings specified in the omnibus agreement. | ||||||||||||||
[6] | Amount includes $0.6 million of the administrative fee charged by Holdings specified in the omnibus agreement. |
Segment Disclosures (Details Na
Segment Disclosures (Details Narrative) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)Number | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Number of reportable segments | Number | 3 | ||
Omnibus Agreement [Member] | Environmental Services [Member] | |||
Allocated administrative fee charged by Holdings | $ 1,200 | $ 1,200 | $ 600 |
Omnibus Agreement [Member] | Pipeline Inspection [Member] | |||
Allocated administrative fee charged by Holdings | $ 3,300 | $ 2,800 | 1,400 |
Omnibus Agreement [Member] | Other [Member] | |||
General and administrative expenses incurred by Holdings but not charged | $ 1,800 |
Distributions (Details)
Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 14, 2020 | [1] | Nov. 14, 2019 | Aug. 14, 2019 | May 15, 2019 | Feb. 14, 2019 | Nov. 14, 2018 | Aug. 14, 2018 | May 15, 2018 | Feb. 14, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 14, 2020 | |
Per Unit Cash Distribution (in dollars per share) | $ 0.210000 | $ 0.210000 | $ 0.210000 | $ 0.210000 | $ 0.210000 | $ 0.210000 | $ 0.210000 | $ 0.210000 | $ 0.840000 | $ 0.840000 | $ 1.036413 | $ 1.625652 | $ 1.625652 | $ 1.104646 | ||||
Total Cash Distribution | $ 2,534 | $ 2,534 | $ 2,531 | $ 2,510 | $ 2,509 | $ 2,506 | $ 2,506 | $ 2,498 | $ 10,019 | $ 10,019 | $ 12,310 | $ 19,258 | $ 19,232 | $ 13,064 | ||||
Subsequent Event [Member] | ||||||||||||||||||
Per Unit Cash Distribution (in dollars per share) | $ 0.210000 | $ 7.282363 | ||||||||||||||||
Total Cash Distribution | $ 2,534 | $ 86,526 | ||||||||||||||||
Affiliated Entity [Member] | ||||||||||||||||||
Total Cash Distribution | [2] | $ 1,627 | $ 1,624 | $ 1,622 | $ 1,606 | $ 1,606 | $ 1,604 | $ 1,604 | $ 1,599 | $ 6,479 | $ 6,413 | $ 7,928 | $ 12,414 | $ 12,284 | $ 8,296 | |||
Affiliated Entity [Member] | Subsequent Event [Member] | ||||||||||||||||||
Total Cash Distribution | [2] | $ 1,627 | $ 55,441 | |||||||||||||||
[1] | Fourth quarter 2019 distribution was declared and paid in the first quarter of 2020. | |||||||||||||||||
[2] | Approximately 64.0% of the Partnership's outstanding common units at December 31, 2018 were held by affiliates. |
Distributions (Details 1)
Distributions (Details 1) - USD ($) $ in Thousands | Feb. 14, 2020 | [1] | Nov. 14, 2019 | Nov. 14, 2019 | Aug. 14, 2019 | Aug. 14, 2019 | May 15, 2019 | May 15, 2019 | Feb. 14, 2019 | Nov. 14, 2018 | [2] | Nov. 14, 2018 | Aug. 14, 2018 | May 15, 2018 | Feb. 14, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 14, 2020 | Feb. 14, 2020 |
Total Distributions | $ 2,534 | $ 2,534 | $ 2,531 | $ 2,510 | $ 2,509 | $ 2,506 | $ 2,506 | $ 2,498 | $ 10,019 | $ 10,019 | $ 12,310 | $ 19,258 | $ 19,232 | $ 13,064 | |||||||||
Subsequent Event [Member] | |||||||||||||||||||||||
Total Distributions | $ 2,534 | $ 86,526 | |||||||||||||||||||||
celp_DebtCovenantInterestCoverageRatioMinimum [Default Label] | |||||||||||||||||||||||
Total Distributions | $ 1,034 | $ 1,033 | $ 1,033 | 1,033 | $ 1,412 | 4,133 | 1,412 | ||||||||||||||||
celp_DebtCovenantInterestCoverageRatioMinimum [Default Label] | Subsequent Event [Member] | |||||||||||||||||||||||
Total Distributions | 1,033 | $ 6,578 | |||||||||||||||||||||
Total Cash Distribution [Member] | celp_DebtCovenantInterestCoverageRatioMinimum [Default Label] | |||||||||||||||||||||||
Total Distributions | $ 1,034 | $ 1,033 | $ 1,033 | $ 1,033 | $ 1,412 | $ 4,133 | $ 1,412 | ||||||||||||||||
Total Cash Distribution [Member] | celp_DebtCovenantInterestCoverageRatioMinimum [Default Label] | Subsequent Event [Member] | |||||||||||||||||||||||
Total Distributions | $ 1,033 | $ 6,578 | |||||||||||||||||||||
[1] | Fourth quarter 2019 distribution was declared and paid in the first quarter of 2020. | ||||||||||||||||||||||
[2] | This distribution relates to the period from May 29, 2018 (date of preferred unit issuance) through September 30, 2018. |
Distributions (Details Narrativ
Distributions (Details Narrative) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Percentage of outstanding common units held by affiliates | 64.00% |
Sale of Water Treatment facil_2
Sale of Water Treatment facilities (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
May 31, 2018 | Jan. 31, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allocated goodwill | $ 3,025 | ||||||||
Gain on asset disposals, net | $ (29) | $ 822 | $ 1,606 | $ 1,709 | $ 25 | 4,108 | $ 570 | ||
Environmental Services Segment [Member] | |||||||||
Allocated goodwill | $ 3,000 | $ 2,000 | |||||||
Gain on asset disposals, net | 3,600 | ||||||||
Pipeline & Process Services [Member] | |||||||||
Gain on asset disposals, net | 26 | 83 | |||||||
Pipeline Inspection [Member] | |||||||||
Gain on asset disposals, net | $ (1) | 21 | (18) | ||||||
Environmental Services [Member] | |||||||||
Gain on asset disposals, net | 4,004 | ||||||||
Environmental Services [Member] | |||||||||
Allocated goodwill | 3,025 | ||||||||
Gain on asset disposals, net | 588 | ||||||||
Orla SWD, LLC and Pecos SWD, LLC [Member] | Environmental Services [Member] | |||||||||
Cash proceeds from sale of subsidiary | 12,200 | ||||||||
Allocated goodwill | 5,000 | ||||||||
Gain on asset disposals, net | 3,600 | ||||||||
Revenue | 200 | 1,600 | |||||||
Operating income (loss) | $ (100) | $ 700 |
Quarterly Financial Informati_3
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Unaudited | |||||||||||
Revenues | $ 91,247 | $ 108,934 | $ 111,091 | $ 90,376 | $ 88,888 | $ 84,778 | $ 76,468 | $ 64,826 | $ 401,648 | $ 314,960 | $ 286,342 |
Gross margin | 13,493 | 15,401 | 14,807 | 10,023 | 12,066 | 12,908 | 10,943 | 8,129 | 53,724 | 44,046 | 33,603 |
Gains (losses) on asset disposals, net | (29) | 822 | 1,606 | 1,709 | 25 | 4,108 | 570 | ||||
Net income | 4,920 | 5,480 | 5,643 | 1,381 | 2,628 | 4,954 | 3,556 | 960 | 17,424 | 12,098 | (1,923) |
Net income attributable to partners / controlling interests | $ 4,202 | $ 4,846 | $ 5,366 | $ 1,600 | $ 2,616 | $ 4,665 | $ 3,407 | $ 725 | $ 16,014 | $ 11,413 | $ (813) |
Net income per common limited partner unit - basic (in dollars per share) | $ 0.26 | $ 0.32 | $ 0.36 | $ 0.05 | $ 0.13 | $ 0.30 | $ 0.25 | $ 0.06 | $ 0.99 | $ 0.75 | $ 0.29 |
Net income per common limited partner unit - diluted (in dollars per share) | $ 0.23 | $ 0.26 | $ 0.29 | $ 0.05 | $ 0.13 | $ 0.26 | $ 0.24 | $ 0.06 | $ 0.88 | $ 0.72 | $ 0.29 |