Obbligazione Magellan Energy Partners 4.85% ( US559080AN68 ) in USD

Emittente Magellan Energy Partners
Prezzo di mercato refresh price now   100 USD  ▲ 
Paese  Stati Uniti
Codice isin  US559080AN68 ( in USD )
Tasso d'interesse 4.85% per anno ( pagato 2 volte l'anno)
Scadenza 31/01/2049



Prospetto opuscolo dell'obbligazione Magellan Midstream Partners US559080AN68 en USD 4.85%, scadenza 31/01/2049


Importo minimo 2 000 USD
Importo totale 500 000 000 USD
Cusip 559080AN6
Standard & Poor's ( S&P ) rating BBB+ ( Lower medium grade - Investment-grade )
Moody's rating Baa1 ( Lower medium grade - Investment-grade )
Coupon successivo 01/08/2026 ( In 115 giorni )
Descrizione dettagliata Magellan Midstream Partners, L.P. č una societā di pipeline di midstream di energia negli Stati Uniti, che opera nel trasporto, nello stoccaggio e nella distribuzione di petrolio greggio, prodotti petroliferi raffinati e gas naturale liquefatto.

Un'obbligazione di interesse per gli investitori č quella emessa da Magellan Midstream Partners, una partnership a responsabilitā limitata (MLP) statunitense operante nel settore energetico midstream. L'azienda č specializzata nella gestione di infrastrutture critiche per il trasporto, lo stoccaggio e la movimentazione di prodotti petroliferi raffinati, greggio e gas naturale, posizionandosi come un attore chiave nella catena di approvvigionamento energetico negli Stati Uniti, suo paese di emissione. Questo strumento di debito, identificato dal codice ISIN US559080AN68 e dal CUSIP 559080AN6, offre un tasso d'interesse fisso del 4.85% annuo. La sua scadenza č fissata al 31 gennaio 2049, configurandosi come un'emissione a lungo termine. L'emissione complessiva ammonta a 500.000.000 USD, con un lotto minimo di acquisto stabilito in 2.000 USD, rendendola accessibile a un ampio spettro di investitori. Attualmente, il titolo č scambiato sul mercato al 100% del suo valore nominale, ovvero alla pari, e le cedole sono pagate con una frequenza semestrale (due volte all'anno). La sua soliditā creditizia č confermata dalle valutazioni delle principali agenzie di rating: Standard & Poor's ha assegnato un rating di BBB+, mentre Moody's ha attribuito un rating Baa1, entrambi indicativi di un livello di investimento.







424B2
424B2 1 d640796d424b2.htm 424B2
Table of Contents
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-223097


Proposed Maximum
Title of Each Class of
Aggregate Offering
Securities to be Registered

Price

Registration Fee(1)
4.850% Senior Notes Due 2049

$500,000,000

$60,600


(1)
The filing fee, calculated in accordance with Rule 457(r) of the Securities Act of 1933, as amended, has been transmitted to the Securities and
Exchange Commission with the securities offered from Registration Statement File No. 333-223097 by means of this prospectus supplement.
Table of Contents

Prospectus supplement
To prospectus dated February 20, 2018

$500,000,000
4.850% Senior Notes due 2049


This is an offering by Magellan Midstream Partners, L.P. of $500 million aggregate principal amount of 4.850% Senior Notes due 2049. Interest will be
payable on the notes semi-annually in arrears on February 1 and August 1 of each year. The notes will mature on February 1, 2049. Interest on the notes
will accrue from January 18, 2019, and the first interest payment on the notes will be due on August 1, 2019.
We may redeem some or all of the notes at any time or from time to time at the applicable redemption price described in this prospectus supplement under
the caption "Description of Notes--Optional redemption ."
The notes will be our senior unsecured obligations and will rank equally with all of our existing and future unsecured senior debt, including borrowings
under our revolving credit facility and commercial paper program, and senior to any future subordinated debt that we may incur.


Investing in the notes involves risks, including those that are described in the "Risk Factors" section beginning on
page S-8 of this prospectus supplement and on page 3 of the accompanying base prospectus, the "Information
Regarding Forward-Looking Statements" section beginning on page S-41 of this prospectus supplement and on page 4
of the accompanying base prospectus, as well as the risk factors discussed in our Annual Report on Form 10-K for the
year ended December 31, 2017.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying base prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Proceeds,
before
Public offering
Underwriting
expenses, to


price(1)

discount

Magellan(1)

Per note


99.371%

0.875%

98.496%













Total

$ 496,855,000
$ 4,375,000
$ 492,480,000













(1)
Plus accrued interest from January 18, 2019, if settlement occurs after that date.
The notes are a new issue of securities with no established trading market. We do not currently intend to apply for listing of the notes on any securities
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exchange or to be quoted on any automated quotation system.
The notes will be ready for delivery in book-entry form only through the facilities of The Depository Trust Company for the accounts of its participants,
including Clearstream Banking S.A. and Euroclear Bank SA/NV, as operator of the Euroclear System, on or about January 18, 2019.


Joint book-running managers

J.P. Morgan
Mizuho Securities

RBC Capital Markets


SMBC Nikko




US Bancorp
Co-managers

Barclays
Citigroup

PNC Capital Markets LLC


SunTrust Robinson Humphrey




Wells Fargo Securities
The date of this prospectus supplement is January 11, 2019.
Table of Contents
TABLE OF CONTENTS
Prospectus supplement

SUMMARY
S-1
RISK FACTORS
S-8
RATIO OF EARNINGS TO FIXED CHARGES
S-11
USE OF PROCEEDS
S-12
CAPITALIZATION
S-13
DESCRIPTION OF NOTES
S-14
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
S-31
UNDERWRITING
S-35
LEGAL
S-40
EXPERTS
S-40
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
S-41
WHERE YOU CAN FIND MORE INFORMATION
S-44
Prospectus

ABOUT THIS PROSPECTUS
1
MAGELLAN MIDSTREAM PARTNERS, L.P.
2
RISK FACTORS
3
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
4
RATIO OF EARNINGS TO FIXED CHARGES
7
USE OF PROCEEDS
8
DESCRIPTION OF OUR DEBT SECURITIES
9
DESCRIPTION OF OUR COMMON UNITS
20
DESCRIPTION OF OUR PREFERRED UNITS
22
CASH DISTRIBUTIONS
23
DESCRIPTION OF OUR PARTNERSHIP AGREEMENT
25
MATERIAL TAX CONSIDERATIONS
32
INVESTMENT BY U.S. EMPLOYEE BENEFIT PLAN
49
LEGAL MATTERS
51
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EXPERTS
51
WHERE YOU CAN FIND MORE INFORMATION
51
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
51

S-i
Table of Contents
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus supplement, which describes the terms of this offering of notes. The second part is the
accompanying base prospectus, which gives more general information about the securities we may offer from time to time. Generally when we refer only
to the "prospectus," we are referring to both parts combined.
If the information about the offering varies between this prospectus supplement and the accompanying base prospectus, you should rely on the information
in this prospectus supplement.
You should rely only on the information contained or incorporated by reference in this prospectus supplement, the accompanying base prospectus and any
free writing prospectus filed by us with the Securities and Exchange Commission (the "SEC"). Neither we nor the underwriters have authorized anyone to
provide you with different or additional information. We and the underwriters are not making an offer of these securities in any jurisdiction where the offer
is not permitted. You should not assume that the information contained in this prospectus supplement, the accompanying base prospectus and any free
writing prospectus is accurate as of any date other than the dates shown in those documents or that any information we have incorporated by reference is
accurate as of any date other than the date of the document incorporated by reference. Our business, financial condition, results of operations and prospects
may have changed since such dates.
None of Magellan Midstream Partners, L.P., the underwriters or any of their respective representatives is making any representation to you regarding the
legality of an investment in the notes by you under applicable laws. You should consult with your own advisors as to legal, tax, business, financial and
related aspects of an investment in the notes.
As used in this prospectus supplement and the accompanying base prospectus, unless we indicate otherwise, the terms "our," "we," "us" and similar terms
refer to Magellan Midstream Partners, L.P., together with its subsidiaries.

S-ii
Table of Contents
SUMMARY
This summary highlights information contained elsewhere in this prospectus supplement and the accompanying base prospectus. It does not
contain all of the information that you should consider before making an investment decision. You should read the entire prospectus supplement, the
accompanying base prospectus, the documents incorporated by reference and the other documents to which we refer for a more complete
understanding of this offering. Please read "Risk Factors" beginning on page S-8 of this prospectus supplement and on page 3 of the accompanying
base prospectus, as well as the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2017 for more
information about important factors that you should consider before purchasing notes in this offering.
Magellan Midstream Partners, L.P.
We were formed as a limited partnership under the laws of the State of Delaware in August 2000 to own, operate and acquire a diversified
portfolio of complementary energy assets. We are principally engaged in the transportation, storage and distribution of refined petroleum products and
crude oil. As of September 30, 2018, our asset portfolio, including the assets of our joint ventures, consisted of:

· our refined products segment, comprised of our 9,700-mile refined products pipeline system with 53 terminals as well as 26 independent

terminals not connected to our pipeline system and our 1,100-mile ammonia pipeline system;

· our crude oil segment, comprised of approximately 2,200 miles of crude oil pipelines, our condensate splitter and storage facilities with an

aggregate storage capacity of approximately 33 million barrels, of which 21 million barrels are used for contract storage; and

· our marine storage segment, consisting of five marine terminals located along coastal waterways with an aggregate storage capacity of

approximately 26 million barrels.
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Our principal executive offices are located in One Williams Center, Tulsa, Oklahoma 74172 and our phone number is (918) 574-7000.
Partnership structure and management
Our operations are conducted through, and our operating assets are owned by, our subsidiaries. Our general partner, which is also a wholly
owned subsidiary, has sole responsibility for conducting our business and managing our operations. Our general partner has a non-economic general
partner interest in us and does not receive a management fee or other compensation in connection with its management of our business.
The following table describes our current ownership structure. The percentages reflected in the table, other than the general partner interest,
represent approximate ownership interests in us.

Percentage
Ownership of Magellan Midstream Partners, L.P.

interest
Public common units


99.8%
Officer and director common units


0.2%
General partner interest


0.0%




Total


100.0%





S-1
Table of Contents
The Offering

Issuer
Magellan Midstream Partners, L.P.

Securities
$500 million aggregate principal amount of 4.850% Senior Notes due 2049.

Maturity date
February 1, 2049.

Interest payment dates
Interest will be payable on the notes semi-annually in arrears on February 1 and August 1 of
each year, beginning on August 1, 2019.


Interest on the notes will accrue from January 18, 2019.

Use of proceeds
We intend to use the net proceeds from this offering, together with cash on hand, to redeem
our $550 million 6.55% senior notes due 2019 ("2019 notes"). Any remaining net proceeds
will be used for general partnership purposes.

As of December 31, 2018, we had approximately $552.0 million in aggregate principal

amount and accrued interest of the 2019 notes outstanding.

Certain of the underwriters or their respective affiliates may be holders of the 2019 notes and

may receive proceeds from the redemption of the 2019 notes. Please see "Use of Proceeds"
on page S-12 and "Underwriting" on page S-35.

Optional redemption
We may redeem some or all of the notes at any time or from time to time prior to maturity.

If we elect to redeem the notes prior to August 1, 2048 (the date that is six months prior to
the maturity date of the notes (the "Par Call Date")), we will pay an amount equal to the
greater of 100% of the principal amount of the notes to be redeemed or the sum of the present

values of the remaining scheduled payments of principal and interest on the notes that would
be due if the notes matured on the Par Call Date, but for the redemption, plus a make-whole
premium.

On or after the Par Call Date, we will pay an amount equal to 100% of the principal amount
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of the notes to be redeemed. We will pay accrued and unpaid interest, if any, on the notes

redeemed to, but excluding, the redemption date. See "Description of Notes--Optional
redemption."

Subsidiary guarantees
Our subsidiaries will not initially guarantee the notes. In the future, however, we will cause
any of our subsidiaries that subsequently guarantee or become a co-obligor in respect of any
of our funded debt to equally and ratably guarantee the notes offered hereby.

S-2
Table of Contents
Ranking
The notes will be our senior unsecured obligations and will rank equally with all of our other
existing and future unsecured senior debt, including borrowings under our revolving credit
facility and commercial paper program, and senior to any future subordinated debt that we
may incur.

We conduct substantially all of our business through our subsidiaries. The notes will be
structurally subordinated to all existing and future debt and other liabilities, including trade

payables, of any of our non-guarantor subsidiaries. As of December 31, 2018, our
subsidiaries had no debt for borrowed money.

Certain covenants
We will issue the notes under an indenture, with U.S. Bank National Association, as trustee.
The indenture does not limit the amount of unsecured debt we may incur. The indenture
contains limitations on, among other things, our ability to:


· incur debt secured by certain liens;


· engage in certain sale-leaseback transactions; and


· consolidate, merge or dispose of all or substantially all of our assets.

Additional issuances
We may, at any time, without the consent of the holders of the notes, issue additional notes
having the same interest rate, maturity and other terms as the notes offered hereby (except for
the issue date, the public offering price and, if applicable, the first interest payment date).
Any additional notes having such similar terms, together with the notes offered hereby, will
constitute a single series under the indenture.

Risk factors
Please read "Risk Factors" beginning on page S-8 of this prospectus supplement and on
page 3 of the accompanying base prospectus, as well as the risk factors discussed in our
Annual Report on Form 10-K for the year ended December 31, 2017, for a discussion of
factors you should carefully consider before investing in the notes.

Governing law
The notes and the indenture governing the notes will be governed by the laws of the State of
New York.

Trustee, Paying Agent, Registrar
U.S. Bank National Association.

S-3
Table of Contents
Summary financial and operating data
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The following table sets forth our summary financial and operating data as of and for the years ended December 31, 2015, 2016 and 2017 and as
of September 30, 2018 and for the nine months ended September 30, 2017 and 2018. This financial data was derived from our audited consolidated
financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2017 and from our unaudited
consolidated financial statements and related notes included in our Quarterly Report on Form 10-Q for the period ended September 30, 2018. The
financial data set forth below should be read in conjunction with those consolidated financial statements and the notes thereto, which are incorporated
by reference into this prospectus supplement and the accompanying base prospectus and have been filed with the SEC. The other data and operating
statistics have been derived from our financial records.
We believe that investors benefit from having access to the same financial measures utilized by management. In the following tables, we present
the financial measure of distributable cash flow, which is not prepared in accordance with generally accepted accounting principles ("GAAP"). Our
partnership agreement requires that all of our available cash, less amounts reserved by our general partner's board of directors, be distributed to our
limited partners on a quarterly basis. Management uses distributable cash flow to determine the amount of cash our operations generated that is
available for distribution to our limited partners (before any reserves established by our general partner's board of directors) and for recommending to
our general partner's board of directors the amount of cash distributions to be paid each period. We also use distributable cash flow as the basis for
calculating our equity-based incentive pay. A reconciliation of distributable cash flow to net income, the nearest comparable GAAP measure, is
included in the following tables.
In addition to distributable cash flow, the non-GAAP measures of operating margin (in the aggregate and by segment) and adjusted EBITDA are
presented in the following tables. We compute the components of operating margin and adjusted EBITDA using amounts that are determined in
accordance with GAAP. Reconciliations of operating margin to operating profit and adjusted EBITDA to net income, which are the nearest
comparable GAAP financial measures, are included in the following tables. Reconciliations of segment operating margin to segment operating profit
are included in our Annual Report on Form 10-K for the year ended December 31, 2017 and our Quarterly Report on Form 10-Q for the period ended
September 30, 2018. Operating margin is an important measure of the economic performance of our core operations. Operating profit, alternatively,
includes depreciation and amortization expense and general and administrative expense that management does not consider when evaluating the core
profitability of an operation. Adjusted EBITDA is an important measure utilized by management and the investment community to assess the financial
results of an entity.
Since the non-GAAP measures presented here include adjustments specific to us, they may not be comparable to similarly-titled measures of
other companies.

Nine months ended


Year ended December 31,

September 30,

(dollars in thousands, except per unit amounts)

2015

2016

2017

2017

2018

Income statement data:





Transportation and terminals revenue

$1,544,746
$1,591,119
$1,731,775
$1,272,845
$1,392,960
Product sales revenue


629,836

599,602

758,206

548,634

552,792
Affiliate management fee revenue


13,871

14,689

17,680

12,883

15,138




















Total revenue

2,188,453
2,205,410
2,507,661
1,834,362
1,960,890
Operating expenses


523,650

528,672

577,978

442,254

475,256
Cost of product sales


447,273

493,338

635,617

440,670

473,781
Earnings of non-controlled entities


(66,483)

(78,696)
(120,994)

(78,173)
(130,843)




















Operating margin

1,284,013
1,262,096
1,415,060
1,029,611
1,142,696

S-4
Table of Contents
Nine months ended


Year ended December 31,

September 30,

(dollars in thousands, except per unit amounts)

2015

2016

2017

2017

2018

Depreciation and amortization expense

$ 166,812
$ 178,142
$ 196,630
$146,103
$ 161,726
General and administrative expense


149,948

147,165

165,717
120,876

147,235




















Operating profit


967,253

936,789
1,052,713
762,632

833,735
Interest expense, net


143,177

165,410

193,718
143,061

153,721
Gain on sale of asset


--

--

(18,505)
(18,505)
(353,797)
Gain on exchange of interested in non-controlled entity


--

(28,144)

--

--

--
Other (income) expense


2,618

(6,466)

4,139

3,762

10,299




















Income before provision for income taxes


821,458

805,989

873,361
634,314
1,023,512
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Provision for income taxes


2,336

3,218

3,830

2,678

3,659




















Net income

$ 819,122
$ 802,771
$ 869,531
$631,636
$1,019,853




















Basic net income per limited partner unit

$
3.60
$
3.52
$
3.81
$
2.77
$
4.47




















Diluted net income per limited partner unit

$
3.59
$
3.52
$
3.81
$
2.77
$
4.46




















Balance sheet data:





Working capital deficit(a)

$ (374,218)
$ (111,262)
$ (224,671)

$ (455,057)
Total assets

$6,041,567
$6,772,073
$7,394,375

$7,595,668
Long-term debt, net

$3,189,287
$4,087,192
$4,273,518

$3,718,607
Partners' capital

$2,021,736
$2,092,105
$2,129,653

$2,547,420
Cash distribution data:





Cash distributions declared per unit(b)

$
3.01
$
3.32
$
3.59
$
2.67
$
2.87
Cash distributions paid per unit(b)

$
2.92
$
3.25
$
3.52
$
2.62
$
2.82
(Footnotes appear on page S-7)

Nine months ended


Year ended December 31,

September 30,

(dollars in thousands)

2015

2016

2017

2017

2018

Other data:





Operating margin





Refined products

$ 778,514
$ 723,588
$ 825,746
$ 609,511
$ 617,438
Crude oil


381,819

408,327

465,386

323,583

433,559
Marine storage


119,829

125,226

118,654

92,564

87,240
Allocated partnership depreciation costs(c)


3,851

4,955

5,274

3,913

4,459




















Operating margin

$ 1,284,013
$ 1,262,096
$ 1,415,060
$ 1,029,611
$ 1,142,696




















Adjusted EBITDA and distributable cash flow:





Net income

$ 819,122
$ 802,771
$ 869,531
$ 631,636
$ 1,019,853
Interest expense, net


143,177

165,410

193,718

143,061

153,721
Depreciation and amortization expense


166,812

178,142

196,630

146,103

161,726
Equity-based incentive compensation expense(d)


6,461

4,982

6,766

308

15,327
Loss on sale and retirement of assets


7,871

11,190

13,370

7,581

6,256

S-5
Table of Contents
Nine months ended


Year ended December 31,

September 30,

(dollars in thousands)

2015

2016

2017

2017

2018

Gain on sale of asset(e)

$
--
$
--
$ (18,505)
$ (18,505)
$ (351,215)
Gain on exchange of interest in non-controlled entity(f)


--

(28,144)

--

--

--
Commodity-related adjustments(g)


13,988

64,257

12,463

(7,927)

(4,753)
Distributions from operations of non-controlled entities in
excess of earnings


14,572

9,293

25,216

19,519

17,107
Other(h)


--

5,341

3,749

3,749

3,644




















Adjusted EBITDA

1,172,003
1,213,242
1,302,938
925,525
1,021,666
Interest expense, net, excluding debt issuance cost
amortization

(140,464)
(162,251)
(190,403)
(140,579)
(151,255)
Maintenance capital(i)


(88,685)
(103,507)

(91,163)
(71,832)

(63,103)




















Distributable cash flow

$ 942,854
$ 947,484
$1,021,372
$ 713,114
$ 807,308




















(Footnotes appear on page S-7)

Nine months ended


Year ended December 31,

September 30,



2015
2016
2017
2017
2018
Operating statistics:





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Refined products:





Transportation revenue per barrel shipped

$1.439
$1.473
$1.495
$1.489
$1.524
Volume shipped (million barrels):





Gasoline

268.1
275.4
295.5
218.7
219.0
Distillates

152.5
150.2
166.2
119.6
132.7
Aviation fuel

21.2
25.7
26.5
20.2
21.3
Liquefied petroleum gases


9.7
10.4

9.9

9.6
10.4




















Total volume shipped

451.5
461.7
498.1
368.1
383.4
Crude oil:





Magellan 100%-owned assets:





Transportation revenue per barrel shipped

$1.118
$1.321
$1.348
$1.412
$1.325
Volume shipped (million barrels)

209.9
187.0
196.4
137.0
168.4
Crude oil terminal average utilization (million barrels
per month)

13.1
15.0
15.3
15.5
16.1
Select joint venture pipelines:





BridgeTex ­ volume shipped (million barrels)(j)

75.2
79.0
98.4
66.4
100.0
Saddlehorn ­ volume shipped (million barrels)(k)


--

5.2
19.0
12.1
18.5
Marine storage:





Marine terminal average utilization (million barrels per
month)

24.0
23.8
23.1
23.4
22.6

S-6
Table of Contents

(a)
Working capital deficit at December 31, 2015, and December 31, 2017 included the current portion of long-term debt of approximately
$250.0 million. Working capital deficit at September 30, 2018 included the current portion of long-term debt of approximately $550.0 million.
(b)
Cash distributions declared were determined based on the distributable cash flow generated for each of the periods presented. Distributions were
declared and paid within 45 days following the close of each quarter. Cash distributions paid represent cash payments for distributions during
each of the periods presented.
(c)
Certain depreciation expense was allocated to our various business segments, which in turn recognized these allocated costs as operating
expense, reducing segment operating margin by these amounts.
(d)
Because we intend to satisfy vesting of unit awards under our equity-based incentive compensation plan with the issuance of limited partner
units, expenses related to this plan generally are deemed non-cash and added back for distributable cash flow purposes. However, equity-based
compensation expense has been adjusted for cash payments associated with our equity-based incentive compensation plan, which primarily
include tax withholdings.
(e)
In September 2018, we recognized a $353.8 million gain from the sale of a portion of our interest in BridgeTex, of which $351.2 million has
been deducted from the calculation of distributable cash flow, as it is not related to our ongoing operations. The remaining $2.6 million
represents a purchase price adjustment related to September operations and as such is included in distributable cash flow. In September 2017,
we recognized an $18.5 million gain in connection with the sale of an inactive terminal along our refined products pipeline system, which has
been deducted from the calculation of distributable cash flow because it is not related to our ongoing operations.
(f)
In February 2016, we transferred our 50% membership interest in Osage Pipe Line Company, LLC ("Osage") to an affiliate of HollyFrontier
Corporation ("HFC"). In conjunction with this transaction, we entered into several commercial agreements with affiliates of HFC, which were
recorded as intangible assets and other receivables on our consolidated balance sheets. We recorded a $28.1 million non-cash gain in relation to
this transaction.
(g)
Certain derivatives we use as economic hedges have not been designated as hedges for accounting purposes and the mark-to-market changes of
these derivatives are recognized currently in earnings. In addition, we have designated certain derivatives we use to hedge our crude oil tank
bottoms as fair value hedges and the change in the differential between the current spot price and forward price on these hedges is recognized
currently in earnings. We exclude the net impact of both of these adjustments from our determination of distributable cash flow until the hedged
products are physically sold. In the period in which these hedged products are physically sold, the net impact of the associated hedges is included
in our determination of distributable cash flow.
(h)
Other adjustments in 2018 include a $3.6 million one-time adjustment recorded to partners' capital as required by our adoption of Accounting
Standards Update 2014-09, Revenues from Contracts with Customers. The amount represents cash that we had previously received for
deficiency payments, but did not yet recognize in net income under the previous revenue recognition standard. Other adjustments in 2016 and
2017 are comprised of payments received from HFC in conjunction with the transfer of our 50% membership interest in Osage in February
2016. HFC agreed to make certain payments to us until HFC completed a connection to our El Paso terminal. These payments replaced
distributions we would have received had the Osage transaction not occurred and are, therefore, included in our calculation of distributable cash
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flow.
(i)
Maintenance capital expenditures maintain our existing assets and do not generate incremental distributable cash flow (i.e. incremental returns
to our unitholders). For this reason, we deduct maintenance capital expenditures to determine distributable cash flow.
(j)
These volumes reflect the total shipments for the BridgeTex pipeline, which was owned 50% by us through September 28, 2018 and 30%
thereafter.
(k)
These volumes reflect the total shipments for the Saddlehorn pipeline, which is owned 40% by us and began operations in September 2016.

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RISK FACTORS
An investment in our notes involves risk. You should carefully read the risk factors set forth below, the risk factors included under the caption "Risk
Factors" beginning on page 3 of the accompanying base prospectus, and the risk factors discussed in our Annual Report on Form 10-K for the year ended
December 31, 2017, which is incorporated by reference into this prospectus supplement and the accompanying base prospectus.
Risks related to the notes
Your ability to transfer the notes at a time or price you desire may be limited by the absence of an active trading market, which may not develop.
The notes are a new issue of securities with no established trading market. Although we have registered the offer and sale of the notes under the
Securities Act of 1933, as amended (the "Securities Act"), we do not intend to apply for listing of the notes on any securities exchange or for quotation of
the notes in any automated dealer quotation system. In addition, although the underwriters have informed us that they intend to make a market in the notes
as permitted by applicable laws and regulations, they are not obligated to make a market in the notes, and they may discontinue their market-making
activities at any time without notice. An active market for the notes may not develop or, if developed, may not continue. In the absence of an active trading
market, you may not be able to transfer the notes within the time or at the price you desire.
The notes will be our senior unsecured obligations. As such, the notes will be effectively junior to any secured debt we may incur in the future and to
the future secured debt of any subsidiaries that guarantee the notes and structurally junior to the existing and future debt and other liabilities of our
subsidiaries that do not guarantee the notes.
The notes will be our senior unsecured debt and will rank equally in right of payment with all of our other existing and future unsubordinated debt,
including borrowings under our revolving credit facility and commercial paper program. The notes will be effectively junior to any secured debt we may
incur in the future (to the extent of the value of the collateral securing the indebtedness) and to the future secured debt of any subsidiaries that guarantee the
notes (to the extent of the value of the collateral securing the indebtedness) and structurally junior to the existing and future debt and other liabilities,
including trade payables, of our subsidiaries that do not guarantee the notes.
As of December 31, 2018, our subsidiaries had no debt for borrowed money owing to any unaffiliated third parties. Initially, there will be no
subsidiary guarantors of the notes, and there may be none in the future.
If we are involved in any dissolution, liquidation or reorganization, any secured debt holders would be paid before you receive any amounts due
under the notes to the extent of the value of the assets securing their debt and creditors of our subsidiaries may also be paid before you receive any amounts
due under the notes. In that event, you may not be able to recover any principal or interest you are due under the notes.
A guarantee could be voided if the guarantee was held to be a fraudulent transfer at the time the indebtedness evidenced by the guarantee was
incurred, which could result in the noteholders being able to rely only on us to satisfy claims.
Initially, none of our subsidiaries will guarantee the notes. In the future, however, if our subsidiaries become guarantors or co-obligors of our funded
debt, then these subsidiaries will guarantee our payment obligations under the notes. Under U.S. bankruptcy law and comparable provisions of state
fraudulent transfer laws, a guarantee can be voided, or claims under a guarantee may be subordinated to all other debts of that guarantor if, among other
things, the guarantor, at the time it incurred the indebtedness evidenced by its guarantee:

· intended to hinder, delay or defraud any present or future creditor or received less than reasonably equivalent value or fair consideration for

the incurrence of the guarantee;

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· was insolvent or rendered insolvent by reason of such incurrence;


· was engaged in a business or transaction for which the guarantor's remaining assets constituted unreasonably small capital; or


· intended to incur, or believed that it would incur, debts beyond its ability to pay those debts as they mature.
In addition, any payment by that guarantor under a guarantee could be voided and required to be returned to the guarantor or to a fund for the benefit
of the creditors of the guarantor.
We do not have the same flexibility as other types of organizations to accumulate cash, which may limit cash available to service the notes or to repay
them at maturity.
Our partnership agreement requires us to distribute, on a quarterly basis, 100% of our available cash to our unitholders of record within 45 days
following the end of every quarter. Available cash with respect to any quarter is generally all of our cash on hand at the end of such quarter, less cash
reserves for certain purposes. The board of directors of our general partner will determine the amount and timing of such distributions and has broad
discretion to establish and make additions to our reserves or the reserves of our operating subsidiaries as it determines are necessary or appropriate. As a
result, we do not have the same flexibility as corporations or other entities that do not pay dividends or have complete flexibility regarding the amounts they
will distribute to their equity holders. Although our payment obligations to our unitholders are subordinate to our payment obligations to you, the timing
and amount of our quarterly distributions to our unitholders could significantly reduce the cash available to pay the principal, premium (if any) and interest
on the notes.
Because we have a holding company structure in which our subsidiaries conduct our operations and own our operating assets, our ability to service
our debt is largely dependent on our receipt of distributions or other payments from our subsidiaries.
We are a partnership holding company, and our subsidiaries conduct all of our operations and own all of our operating assets. We do not have
significant assets other than the ownership interests in our subsidiaries. As a result, our ability to make required payments on the notes depends on the
performance of our subsidiaries and their ability to distribute funds to us. The ability of our subsidiaries to make distributions to us may be restricted by,
among other things, credit instruments, applicable state business organization laws and other laws and regulations. If we are unable to obtain the funds
necessary to pay all the principal and interest on the notes when due, we may be required to adopt one or more alternatives, such as a refinancing of the
notes. We cannot assure you that we would be able to refinance the notes on terms that are acceptable to us, or at all.
We may be able to incur substantially more debt. This could exacerbate the risks associated with our indebtedness.
We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The total borrowing capacity under our revolving
credit facility, which matures in October 2022, is $1.0 billion. As of December 31, 2018, we had no outstanding borrowings under our revolving credit
facility and no outstanding indebtedness under our commercial paper program. If we incur any additional indebtedness, including borrowings under our
revolving credit facility, as such facility may be expanded over time, and issuances of additional notes, that ranks equally with the notes, the holders of that
debt will be entitled to share ratably with you in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or
other winding up of us. This may have the effect of reducing the amount of proceeds paid to you. If new debt is added to our current debt levels, the related
risks that we now face could intensify.
The indenture governing the notes will also permit us and our subsidiaries to incur additional indebtedness, including secured indebtedness, that
could effectively rank senior to the notes, and to engage in sale-leaseback arrangements, subject to certain limitations. Any of these actions could adversely
affect our ability to make principal and interest payments on the notes.

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Tax risks
Our tax treatment depends on our status as a partnership for federal income tax purposes. If the Internal Revenue Service ("IRS") were to treat us as a
corporation for federal income tax purposes, or otherwise subject us to entity-level taxation, it would reduce the amount of cash available for payment
of principal and interest on the notes.
If we were treated as a corporation for federal income tax purposes, we would pay federal income tax on our taxable income at the corporate tax rate,
which is currently a maximum of 21%, and would likely pay state income tax at varying rates. Treatment of us as a corporation would result in a material
reduction in our anticipated cash flow, which could materially and adversely affect our ability to make payments on the notes.
Current law may change so as to cause us to be treated as a corporation for federal income tax purposes or otherwise subject us to entity-level
taxation. For example, from time to time the U.S. government considers substantive changes to the existing federal income tax laws that affect publicly
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