Enterprise Products Partners L.P.

SEC Filings

10-Q
TEPPCO PARTNERS LP filed this Form 10-Q on 05/06/1997
Entire Document
 
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I
TEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     The following information is provided to facilitate increased
understanding of the 1997 and 1996 interim consolidated financial statements
and accompanying notes presented in Item 1. Material period-to-period variances
in the consolidated statements of income are discussed under "Results of
Operations." The "Financial Condition and Liquidity" section analyzes cash
flows and financial position. Discussion included in "Other Matters" addresses
key trends, futures plans and contingencies. Throughout these discussions,
management addresses items that are reasonably likely to materially affect
future liquidity or earnings.

RESULTS OF OPERATIONS

     The Partnership's operations consist of the transportation, storage and
terminaling of refined petroleum products and liquefied petroleum gases (LPGs).
Operations are somewhat seasonal with higher revenues generally realized during
the first and fourth quarters of each year. Refined products volumes are
generally higher during the second and third quarters because of greater demand
for gasolines during the spring and summer driving seasons. LPGs volumes are
generally higher from November through March due to higher demand in the
Midwest and Northeast for propane, a major fuel for residential heating, and
higher demand for butane, an additive for gasoline blending.

     Net income for the quarter ended March 31, 1997 was $17.8 million,
compared with net income of $20.1 million for the 1996 first quarter. The $2.3
million decrease in net income resulted primarily from a $3.4 million decrease
in operating revenues, which was partially offset by a $0.8 million decrease in
operating, general and administrative expenses. See discussion below of factors
affecting net income for the comparative periods.

      See volume and average tariff information below:


<TABLE>
<CAPTION>
                                         QUARTER ENDED MARCH 31,   PERCENTAGE
                                         -----------------------    INCREASE
                                            1997         1996      (DECREASE)
                                         ---------    ----------   -----------
<S>                                      <C>          <C>               <C>
VOLUMES DELIVERED
(in thousands of barrels)
   Refined products                          25,205       25,920       (3%)
   LPGs                                      12,064       12,845       (6%)
   Mont Belvieu operations                    6,188        4,963       25%
                                         ----------   ----------   ----------
      Total                                  43,457       43,728       (1%)
                                         ==========   ==========   ==========

AVERAGE TARIFF PER BARREL
   Refined products                      $     0.86   $    0.84         2%
   LPGs                                        1.98        2.11        (6%)
   Mont Belvieu operations                     0.16        0.18       (11%)
      Average system tariff per barrel   $     1.07   $    1.14        (6%)
                                         ==========   ==========   ==========
</TABLE>


     Refined products transportation revenues decreased $0.2 million for the
quarter ended March 31, 1997, compared with the prior-year quarter, as a result
of lower deliveries of motor fuel and distillate due primarily to increased
refinery utilization in the Midwest market areas, coupled with lower refinery
production along the upper Texas Gulf Coast. These decreases were partially
offset by increased deliveries of jet fuel attributable to the pipeline
connection at the Little Rock Air Force Base, which was completed in June 1996,
and increased demand at commercial airports served by the pipeline system.
Additionally, deliveries of gasoline blend stocks, primarily methyl tertiary
butyl ether (MTBE) and toluene, were higher than the prior year due to
increased barge deliveries at the Partnership's marine terminal near Beaumont,
Texas, as well as higher demand in the Midwest.



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