Enterprise Products Partners L.P.

SEC Filings

10-Q
TEPPCO PARTNERS LP filed this Form 10-Q on 11/14/1997
Entire Document
 
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I
TEM 2.  MANAGEMENT'S DISCUSSION  AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATIONS

GENERAL

         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 Northeast for propane, a major fuel for residential heating.

         The Partnership's revenues are derived from the transportation of
refined products and LPGs, the storage and short-haul shuttle transportation of
LPGs at the Mont Belvieu, Texas complex, sale of product inventory and other
ancillary services. Labor and electric power costs comprise the two largest
operating expense items of the Partnership.

         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

         Net income for the quarter ended September 30, 1997 was $11.4 million,
compared with net income of $10.4 million for the 1996 third quarter. The
increase in net income resulted from a $3.8 million increase in operating
revenues and a $0.3 million decrease in interest expense. These increases were
partially offset by a $1.8 million increase in costs and expenses and a $1.1
million decrease in other income.

         Net income for the nine months ended September 30, 1997 increased $1.6
million to $42.4 million, compared with net income of $40.8 million for the nine
months ended September 30, 1996, due primarily to a $4.1 million increase in
operating revenues, a $0.9 million decrease in interest expense and a $0.5
million increase in interest costs capitalized, partially offset by a $1.6
million increase in costs and expenses and a $2.2 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                         NINE MONTHS ENDED
                                       SEPTEMBER 30,        PERCENTAGE          SEPTEMBER 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           31,226       30,646              2%      90,820        87,187        4%
         LPGs                        9,041        8,712              4%      29,052        28,866        1%
         Mont Belvieu operations     7,782        5,778             35%      20,601        17,124       20%
                                 ---------    ---------       --------   ----------     ---------   ------
             Total                  48,049       45,136              6%     140,473       133,177        5%
                                 =========    =========       ========   ==========     =========   ======

   AVERAGE TARIFF PER BARREL
         Refined products         $   0.91      $  0.87              5%     $  0.89       $  0.86        3%
         LPGs                         1.64         1.69             (3%)       1.81          1.88       (4%)
         Mont Belvieu operations      0.14         0.14             --         0.14          0.16      (13%)
            Average system       
               Tariff per barrel  $   0.92      $  0.94             (2%)    $  0.97       $  0.99       (2%) 
                                 =========    =========       ========   ==========     =========   ======
</TABLE>





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