Enterprise Products Partners L.P.

SEC Filings

10-Q
TEPPCO PARTNERS LP filed this Form 10-Q on 08/07/1997
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, future 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 June 30, 1997 was $13.1 million,
compared with net income of $10.3 million for the 1996 second quarter. The
increase in net income resulted from a $3.7 million increase in operating
revenues and a $0.3 million decrease in interest expense. These increases were
partially offset by a $0.7 million increase in costs and expenses and a $0.6
million decrease in other income.

        Net income for the six months ended June 30, 1997 increased $0.5
million to $30.9 million, compared with net income of $30.4 million for the six
months ended June 30, 1996, due primarily to a $0.3 million increase in
operating revenues, a $0.6 million decrease in interest expense and a $0.6
million increase in interest costs capitalized, partially offset by a $1.1
million decrease in other income. See discussion below of factors affecting net
income for the comparative periods.

        See volume and average tariff information below:


<TABLE>
<CAPTION>
                                     Quarter Ended                          Six Months Ended      
                                       June 30,          Percentage              June 30,         Percentage
                                 ----------------------   Increase        ---------------------    Increase           
                                  1997           1996    (Decrease)        1997          1996     (Decrease)
                                 -------        -------  ----------       ------       --------   ----------
<S>                               <C>            <C>         <C>          <C>            <C>          <C>  
VOLUMES DELIVERED
(in thousands of barrels)
    Refined products              34,389         30,621      12%          59,594         56,541       5%   
    LPGs                           7,947          7,309       9%          20,011         20,154      (1%)  
    Mont Belvieu operations        6,631          6,383       4%          12,819         11,346      13%   
                                 -------        -------     ---           ------       --------     ---
Total                             48,967         44,313      11%          92,424         88,041       5%   
                                 =======        =======     ===           ======       ========     ===   

AVERAGE TARIFF PER BARREL        
    Refined products             $  0.90        $  0.86       5%          $ 0.88       $   0.85       4%  
    LPGs                            1.74           1.71       2%            1.89           1.96      (4%) 
    Mont Belvieu operations         0.13           0.17     (24%)           0.14           0.17     (18%) 
    Average system tariff        $  0.93        $  0.90       3%          $ 1.00           1.02      (2%) 
                                 =======        =======     ===           ======       ========     ===   
</TABLE>



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