Obbligazione Magellan Energy Partners 3.25% ( US559080AQ99 ) in USD

Magellan Energy Partners

100 USD ▲

Stati Uniti

US559080AQ99 ( in USD )

3.25% per anno ( pagato 2 volte l'anno)

01/06/2030

Prospetto opuscolo dell'obbligazione Magellan Midstream Partners US559080AQ99 en USD 3.25%, scadenza 01/06/2030

2 000 USD

500 000 000 USD

559080AQ9

BBB+ ( Lower medium grade - Investment-grade )

Baa1 ( Lower medium grade - Investment-grade )

01/06/2026 ( In 58 giorni )

Magellan Midstream Partners, L.P. è una società 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.

The Obbligazione issued by Magellan Energy Partners ( United States ) , in USD, with the ISIN code US559080AQ99, pays a coupon of 3.25% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is 01/06/2030

The Obbligazione issued by Magellan Energy Partners ( United States ) , in USD, with the ISIN code US559080AQ99, was rated Baa1 ( Lower medium grade - Investment-grade ) by Moody's credit rating agency.

The Obbligazione issued by Magellan Energy Partners ( United States ) , in USD, with the ISIN code US559080AQ99, was rated BBB+ ( Lower medium grade - Investment-grade ) by Standard & Poor's ( S&P ) credit rating agency.

424B5
424B5 1 d907145d424b5.htm 424B5
Table of Contents
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-223097

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

Offering Price

Registration Fee(1)
3.250 % Senior Notes Due 2030

$500,000,000

$64,900

(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
3.250% Senior Notes due 2030

This is an offering by Magellan Midstream Partners, L.P. of $500 million aggregate principal amount of 3.250% Senior Notes due 2030. Interest will be payable on the
notes semi-annually in arrears on June 1 and December 1 of each year. The notes will mature on June 1, 2030. Interest on the notes will accrue from May 20, 2020, and
the first interest payment on the notes will be due on December 1, 2020.
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-10 of this prospectus supplement
and on page 3 of the accompanying base prospectus, the "Information Regarding Forward-Looking Statements" section beginning on page S-44 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, 2019 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.
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

99.880%

0.650%

99.230%

Total

$ 499,400,000
$ 3,250,000
$
496,150,000

(1) Plus accrued interest from May 20, 2020, 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 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 May 20, 2020.
https://www.sec.gov/Archives/edgar/data/1126975/000119312520136220/d907145d424b5.htm[5/7/2020 4:39:49 PM]

424B5

Joint book-running managers

J.P. Morgan
Mizuho Securities

RBC Capital Markets

SMBC Nikko

US Bancorp
Co-managers

Barclays
PNC Capital Markets LLC

SunTrust Robinson Humphrey

TD Securities

Wells Fargo Securities
The date of this prospectus supplement is May 6, 2020.
Table of Contents
TABLE OF CONTENTS
Prospectus supplement

SUMMARY
S-1
RISK FACTORS
S-10
USE OF PROCEEDS
S-13
CAPITALIZATION
S-14
DESCRIPTION OF NOTES
S-15
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
S-33
UNDERWRITING
S-37
LEGAL
S-43
EXPERTS
S-43
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
S-44
WHERE YOU CAN FIND MORE INFORMATION
S-47
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
EXPERTS
51
https://www.sec.gov/Archives/edgar/data/1126975/000119312520136220/d907145d424b5.htm[5/7/2020 4:39:49 PM]

424B5
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-10 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, 2019 and in our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 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 March 31, 2020, our asset portfolio consisted of:

? our refined products segment, comprised of our approximately 9,800-mile refined products pipeline system with 53 connected

terminals, as well as 25 independent terminals not connected to our pipeline system and two marine storage terminals (one of which is
owned through a joint venture); and

? our crude oil segment, comprised of approximately 2,200 miles of crude oil pipelines, a condensate splitter and 37 million barrels of
aggregate storage capacity, of which approximately 25 million barrels are used for contract storage. Approximately 1,000 miles of

these pipelines, the condensate splitter and 30 million barrels of this storage capacity (including 22 million barrels used for contract
storage) are wholly-owned, with the remainder owned through joint ventures.
https://www.sec.gov/Archives/edgar/data/1126975/000119312520136220/d907145d424b5.htm[5/7/2020 4:39:49 PM]

424B5
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.

Ownership of Magellan Midstream Partners, L.P.

Percentage interest
Public common units

99.7%
Officer and director common units

0.3%
General partner interest

0.0%

Total

100.0%

S-1
Table of Contents
Recent Developments
COVID-19 and Decline in Commodity Prices
The recent period of unprecedented restrictions on travel and economic activity has significantly reduced demand for refined products in
the markets we serve. Recent declines in commodity prices have also significantly reduced the value of tender barrels we receive from our
transportation customers and the margins we earn from our gas liquids blending activities. The reduction in refined products demand, lower crude oil
prices and limited storage capacity for petroleum products have combined to put significant downward pressure on domestic crude oil production.
While we benefit from take-or-pay commitments for the majority of the capacity of our crude oil pipelines, a sustained reduction in crude oil
production could cause delays in the timing of our recognition of revenue from these commitments. These factors have also significantly decreased
the creditworthiness of certain of our crude oil transportation customers, resulting in an increased risk of customer defaults. To date, our operations
and our employees have successfully adapted to the recent developments, enabling our customers to continue benefiting from the services they rely on
from our critical infrastructure, and our customers have continued to meet their obligations to us. Given the uncertain timing of a return of refined
product demand to historical levels and of a recovery in commodity prices, the extent of the impact these events will have on our results of operations
is unclear, but will likely be material.
Sale of Marine Terminals
On March 20, 2020, we sold three marine terminals to a subsidiary of Buckeye Partners, L.P. for $252.6 million. The terminals are located
in New Haven, Connecticut, Wilmington, Delaware and Marrero, Louisiana. We recognized a $5.4 million impairment loss related to the sale on our
consolidated statements of income.

S-2
Table of Contents
The Offering

Issuer
Magellan Midstream Partners, L.P.

Securities
$500 million aggregate principal amount of 3.250% Senior Notes due 2030.
https://www.sec.gov/Archives/edgar/data/1126975/000119312520136220/d907145d424b5.htm[5/7/2020 4:39:49 PM]

424B5

Maturity date
June 1, 2030.

Interest payment dates
Interest will be payable on the notes semi-annually in arrears on June 1 and December 1 of
each year, beginning on December 1, 2020.

Interest on the notes will accrue from May 20, 2020.

Use of proceeds
We intend to use the net proceeds from this offering for general partnership purposes, which
may include, among other things, capital projects and repayment of indebtedness, including
borrowings under our revolving credit facility and commercial paper program and
redemption of our 4.25% senior notes due 2021 (the "2021 notes").

As of March 31, 2020, the aggregate principal amount and accrued interest of the 2021 notes

outstanding was approximately $553.9 million, and we had no borrowings outstanding under
our revolving credit facility or commercial paper program.

Certain of the underwriters or their respective affiliates may be holders of the 2021 notes and
may receive proceeds from the redemption of the 2021 notes. In addition, affiliates of the
underwriters participating in this offering are lenders under our revolving credit facility,

participants in our commercial paper program, or both, and may receive a portion of the
proceeds of this offering through our repayment of the indebtedness outstanding under our
revolving credit facility and commercial paper program, if any, with such proceeds. Please
see "Use of Proceeds" on page S-13.

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 March 1, 2030 (the date that is three months prior to
the maturity date of the notes (the "Par Call Date")), then 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
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."

S-3
Table of Contents
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 (as defined under "Description of Notes") to equally and ratably
guarantee the notes offered hereby.

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 March 31, 2020, our subsidiaries
had no debt for borrowed money to any unaffiliated third parties.
https://www.sec.gov/Archives/edgar/data/1126975/000119312520136220/d907145d424b5.htm[5/7/2020 4:39:49 PM]

424B5

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-10 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, 2019 and Quarterly Report
on Form 10-Q for the quarter ended March 31, 2020, 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-4
Table of Contents
Summary financial and operating data
The following table sets forth our summary financial and operating data as of and for the years ended December 31, 2017, 2018 and 2019,
and as of March 31, 2020 and for the three months ended March 31, 2019 and 2020. 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, 2019, as updated in our Current
Report on Form 8-K filed on May 4, 2020, to reflect the reorganization of our reportable segments, and from our unaudited consolidated financial
statements and related notes included in our Quarterly Report on Form 10-Q for the period ended March 31, 2020. 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 Current Report on Form 8-K filed on May 4, 2020 and our Quarterly Report on Form 10-Q for the period ended March 31,
https://www.sec.gov/Archives/edgar/data/1126975/000119312520136220/d907145d424b5.htm[5/7/2020 4:39:49 PM]

424B5
2020. Operating margin is an important measure of the economic performance of our core operations. Operating profit, alternatively, includes
depreciation, amortization and impairment 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.
Because the non-GAAP measures presented here include adjustments specific to us, they may not be comparable to similarly-titled
measures of other companies.

S-5
Table of Contents
Three months ended

Year ended December 31,

March 31,

2017

2018

2019

2019

2020

(dollars in thousands, except per unit amounts)

Income statement data:

Transportation and terminals revenue

$1,731,775
$1,878,988
$1,970,630
$
460,792
$
458,395
Product sales revenue

758,206

927,220

736,092

162,995

319,120
Affiliate management fee revenue

17,680

20,365

21,190

5,148

5,291

Total revenue

2,507,661
2,826,573
2,727,912

628,935

782,806
Operating expenses

577,978

649,436

634,081

146,025

149,508
Cost of product sales

635,617

704,313

619,279

169,094

249,236
Other operating (income) expense

--

--

(2,975)

(6,941)

511
Earnings of non-controlled entities

(120,994)
(181,117)
(168,961)

(31,255)

(43,660)

Operating margin

1,415,060
1,653,941
1,646,488

352,012

427,211
Depreciation, amortization and impairment expense

196,630

265,077

246,134

61,871

63,534
General and administrative expense

165,717

194,283

196,650

45,995

36,908

Operating profit

1,052,713
1,194,581
1,203,704

244,146

326,769
Interest expense, net

193,718

200,514

198,554

55,052

50,529
Gain on disposition of assets

(18,505)
(353,797)

(28,966)

(21,788)

(12,887)
Other (income) expense

4,139

13,868

11,830

2,050

807

Income before provision for income taxes

873,361
1,333,996
1,022,286

208,832

288,320
Provision for income taxes

3,830

71

1,437

1,169

756

Net income

$ 869,531
$1,333,925
$1,020,849
$
207,663
$
287,564

Basic net income per common unit

$
3.81
$
5.84
$
4.46
$
0.91
$
1.26

Diluted net income per common unit

$
3.81
$
5.84
$
4.46
$
0.91
$
1.26

Balance sheet data:

Working capital deficit(a)

$ (239,889)
$ (30,213)
$ (207,468)
$ (185,180)
$
(712,654)
Total assets

$7,394,375
$7,747,537
$8,437,729
$ 7,844,551
$ 8,185,305
Long-term debt, net

$4,273,518
$4,211,380
$4,706,075
$ 4,279,676
$ 4,155,437
Partners' capital

$2,129,653
$2,643,434
$2,715,028
$ 2,616,255
$ 2,543,977
Cash distribution data:

Cash distributions declared per unit(b)

$
3.59
$
3.87
$
4.07
$
1.00
$
1.03
Cash distributions paid per unit(b)

$
3.52
$
3.79
$
4.04
$
1.00
$
1.03

(Footnotes appear beginning on page S-8)

S-6
Table of Contents
Three months ended

Year ended December 31,

March 31,

(dollars in thousands)

2017

2018

2019

2019

2020

Other data:

https://www.sec.gov/Archives/edgar/data/1126975/000119312520136220/d907145d424b5.htm[5/7/2020 4:39:49 PM]

424B5
Operating margin:

Refined products

$ 934,984
$1,074,705
$1,025,497
$ 207,714
$
305,777
Crude oil

474,802

573,289

615,485
142,863

119,870
Allocated partnership depreciation costs(c)

5,274

5,947

5,506

1,435

1,564

Operating margin

$1,415,060
$1,653,941
$1,646,488
$ 352,012
$
427,211

Adjusted EBITDA and distributable cash flow:

Net income

$ 869,531
$1,333,925
$1,020,849
$ 207,663
$
287,564
Interest expense, net

193,718

200,514

198,554

55,052

50,529
Depreciation, amortization and impairment(d)

210,000

272,522

240,874

58,957

63,086
Equity-based incentive compensation(e)

6,766

22,768

14,247

(4,850)

(14,545)
Gain on disposition of assets(f)

$ (18,505)
$ (351,215)
$ (16,280)
$ (11,000)
$
(10,511)
Commodity-related adjustments(g)

12,463
(101,987)

88,223

68,728

(6,747)
Distributions from operations of non-controlled entities in
excess of earnings

25,216

15,584

34,641

11,822

11,083
Other(h)

3,749

3,644

--

--

--

Adjusted EBITDA

1,302,938
1,395,755
1,581,108
386,372

380,459
Interest expense, net, excluding debt issuance cost
amortization(i)

(190,403)
(197,274)
(186,942)
(45,875)

(49,632)
Maintenance capital(j)

(91,163)

(88,736)

(96,702)
(22,498)

(24,320)

Distributable cash flow

$1,021,372
$1,109,745
$1,297,464
$ 317,999
$
306,507

(Footnotes appear beginning on page S-8)

S-7
Table of Contents

Year ended December 31,

Three months ended March 31,
(dollars in thousands)

2017

2018

2019

2019

2020

Operating statistics:

Refined products:

Transportation revenue per barrel shipped

$ 1.495
$ 1.556
$ 1.616
$ 1.572
$ 1.582
Volume shipped (million barrels):

Gasoline

295.5

286.9

280.5

62.1

66.2
Distillates

166.2

181.7

184.6

44.6

43.8
Aviation fuel

26.5

31.0

41.1

8.8

9.4
Liquefied petroleum gases

9.9

11.0

9.7

0.6

0.4

Total volume shipped

498.1

510.6

515.9

116.1

119.8
Crude oil:

Magellan 100%-owned assets:

Transportation revenue per barrel shipped(k)

$
1.348
$
1.208
$
0.939
$
0.945
$
0.918
Volume shipped (million barrels)(k)

196.4

242.8

317.2

79.4

75.1
Crude oil terminal average utilization (million barrels per
month)

17.5

18.7

23.0

22.2

22.7
Select joint venture pipelines:

BridgeTex volume shipped (million barrels)(l)

98.4

138.2

156.3

37.7

37.1
Saddlehorn volume shipped (million barrels)(m)

19.0

27.4

56.1

9.0

16.3

(a)
Working capital deficit at December 31, 2017 and March 31, 2020 included the current portion of long-term debt of approximately $250.0 million and
$550.9 million, respectively.

(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)
Prior year amounts have been reclassified to conform with the current year's presentation. Depreciation, amortization and impairment expense is excluded
from distributable cash flow to the extent it represents a non-cash expense.
https://www.sec.gov/Archives/edgar/data/1126975/000119312520136220/d907145d424b5.htm[5/7/2020 4:39:49 PM]

424B5

(e)
Because we intend to satisfy vesting of unit awards under our equity-based long-term incentive compensation plan with the issuance of common units,
expenses related to this plan generally are deemed non-cash and excluded for distributable cash flow purposes. The amounts above have been reduced by
cash payments associated with the plan, which are primarily related to tax withholdings.

(f)
Gains on disposition of assets are excluded from distributable cash flow to the extent they are not related to our ongoing operations.

(g)
Certain derivatives have not been designated as hedges for accounting purposes and the mark-to-market changes of these derivatives are recognized
currently in net income. We exclude the net impact of these derivatives from our determination of distributable cash flow until the transactions are settled
and, where applicable, the related products are sold. In the period in which these transactions are settled and any related products are sold, the net impact
of the derivatives is included in distributable cash flow. We also adjust distributable cash flow for lower of average cost or net realizable value adjustments
and market valuation of short positions until we physically sell or purchase the related products.

S-8
Table of Contents
(h)
Other adjustments in 2018 include a $3.6 million adjustment recorded to partners' capital as required by our adoption of Accounting Standards Update
2014-09, Revenue 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 2017 are comprised of payments received from an affiliate
of HollyFrontier Corporation ("HFC") in conjunction with the transfer of our 50% membership interest in Osage Pipe Line Company, LLC ("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 flow.

(i)
Interest expense in 2019 includes $8.3 million of debt prepayment premiums, which are excluded from distributable cash flow as they are financing
activities and are not related to our ongoing operations.

(j)
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.

(k)
Volume shipped includes shipments related to our crude oil marketing activities. Revenues from those activities are reflected as product sales revenue in
our consolidated financial statements. Transportation revenue per barrel shipped reflects average rates on third-party volume only.

(l)
These volumes reflect the total shipments for the BridgeTex pipeline, which was owned 50% by us through September 28, 2018 and 30% thereafter.

(m)
These volumes reflect the total shipments for the Saddlehorn pipeline, which was owned 40% by us through January 31, 2020 and 30% thereafter.

S-9
Table of Contents
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, 2019 and our Quarterly Report on Form 10-Q for the period ended March 31, 2020, which are 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
https://www.sec.gov/Archives/edgar/data/1126975/000119312520136220/d907145d424b5.htm[5/7/2020 4:39:49 PM]

424B5
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 March 31, 2020, 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 (as defined below), 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;

S-10
Table of Contents

?
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.
https://www.sec.gov/Archives/edgar/data/1126975/000119312520136220/d907145d424b5.htm[5/7/2020 4:39:49 PM]

Document Outline

#1">
- #1">