Annual report pursuant to Section 13 and 15(d)

Leased Properties and Leases (Tables)

v3.6.0.2
Leased Properties and Leases (Tables)
12 Months Ended
Dec. 31, 2016
Leases [Abstract]  
Significant leased properties, major tenants and lease terms
The following table summarizes the significant leased properties, major tenants and lease terms:
Summary of Leased Properties, Major Tenants and Lease Terms
Property
Grand Isle Gathering System
Pinedale LGS(1)
Portland Terminal Facility
Location
Gulf of Mexico/Louisiana
Pinedale, WY
Portland, OR
Tenant
Energy XXI GIGS Services, LLC
Ultra Wyoming LGS, LLC
Arc Terminals Holdings LLC
Asset Description
Approximately 153 miles of offshore pipeline with total capacity of 120 thousand Bbls/d, including a 16-acre onshore terminal and saltwater disposal system
Approximately 150 miles of pipelines and four central storage facilities
A 42-acre rail and marine facility property adjacent to the Willamette River with 84 tanks and total storage capacity of approximately 1.5 million barrels
Date Acquired
June 2015
December 2012
January 2014
Initial Lease Term
11 years
15 years
15 years
Renewal Option
equal to the lesser of 9-years or 75 percent of the remaining useful life
5-year terms
5-year terms
Current Monthly Rent Payments
7/1/15 - 6/30/16: $2,625,417
7/1/16 - 6/30/17: $2,826,250
$1,723,833(2)
$513,355
Estimated Useful Life
27 years
26 years
30 years
(1) Non-Controlling Interest Partner, Prudential, funded a portion of the Pinedale LGS acquisition and, as a limited partner, holds 18.95 percent of the economic interest in Pinedale LP. The general partner, Pinedale GP, a wholly-owned subsidiary of the Company, holds the remaining 81.05 percent of the economic interest.
(2) Monthly rent payments will increase to $1,741,933 beginning January 1, 2017.
Schedule of future minimum lease payments
The future contracted minimum rental receipts for all leases as of December 31, 2016, are as follows:
Future Minimum Lease Receipts (1)
Years Ending December 31,
 
Amount
2017
 
$
61,201,298

2018
 
61,356,965

2019
 
63,724,621

2020
 
70,890,429

2021
 
77,071,774

Thereafter
 
376,628,521

Total
 
$
710,873,608

(1) Future minimum lease receipts include base rents for the Portland Terminal Facility through its initial 15-year term. The lessee has a purchase option on the facility beginning in February 2017, which it can exercise with 90-days notice, as well as lease termination options on the fifth and tenth anniversaries of the lease. If exercised, the purchase option and termination options are subject to additional payment provisions and termination fees prescribed under the lease.
Schedule of Significant Leases
The table below displays the Company's individually significant leases as a percentage of total leased properties and total lease revenues for the periods presented:
 
 
As a Percentage of (1)
 
 
Leased Properties
 
Lease Revenues
 
 
As of December 31,
 
For the Years Ended December 31,
 
 
2016
 
2015
 
2016
 
2015
 
2014
Pinedale LGS
 
39.8%
 
40.0%
 
30.4%
 
42.9%
 
71.9%
Grand Isle Gathering System
 
50.0%
 
50.1%
 
59.8%
 
42.3%
 
Portland Terminal Facility
 
9.9%
 
9.6%
 
9.7%
 
13.3%
 
19.0%
Public Service of New Mexico(2)
 
 
 
 
1.3%
 
9.1%
(1) Insignificant leases are not presented; thus percentages may not sum to 100%.
(2) The Public Service of New Mexico lease terminated on April 1, 2015.
Schedule of Depreciation and Amortization
The following table reflects the depreciation and amortization included in the accompanying Consolidated Statements of Income associated with our leases and leased properties:
 
For the Years Ended December 31,
 
2016
 
2015
 
2014
Depreciation Expense
 
 
 
 
 
GIGS
$
8,605,506

 
$
4,317,769

 
$

Pinedale
8,869,440

 
8,869,440

 
8,869,445

Portland Terminal Facility
843,084

 
1,235,369

 
1,390,236

Eastern Interconnect Project

 
569,670

 
2,278,680

United Property Systems
32,424

 
29,700

 
3,011

Total Depreciation Expense
$
18,350,454

 
$
15,021,948

 
$
12,541,372

Amortization Expense - Deferred Lease Costs
 
 
 
 
 
GIGS
$
30,564

 
$
15,130

 
$

Pinedale
61,368

 
61,368

 
61,369

Total Amortization Expense - Deferred Lease Costs
$
91,932

 
$
76,498

 
$
61,369

ARO Accretion Expense
 
 
 
 
 
GIGS
$
726,664

 
$
339,042

 
$

Total ARO Accretion Expense
$
726,664

 
$
339,042

 
$

Schedule of Deferred Lease Costs
The following table reflects the deferred costs that are included in the accompanying Consolidated Balance Sheets associated with our leased properties:
 
December 31, 2016
 
December 31, 2015
Net Deferred Lease Costs
 
 
 
GIGS
$
290,447

 
$
321,011

Pinedale
673,085

 
734,454

Total Deferred Lease Costs, net
$
963,532

 
$
1,055,465