UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15 (d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (date of earliest event reported): April 29,
2008
Commission
File No. 1-10403
TEPPCO
Partners, L.P.
(Exact name of Registrant as specified in its charter)
|
Delaware
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76-0291058
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|
(State
of Incorporation
|
(I.R.S.
Employer
|
|
Or
Organization)
|
Identification
Number)
|
1100
Louisiana Street, Suite 1600
Houston,
Texas 77002
(Address
of principal executive offices, including zip code)
(713)
381-3636
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.02 Results of Operations and Financial Condition.
On April
29, 2008, TEPPCO Partners, L.P. (“TEPPCO”) issued a press release announcing its
financial results for the first quarter 2008, and will hold a conference call
discussing those results. A copy of the earnings press release is
furnished as Exhibit 99.1 to this report, which is hereby incorporated by
reference into this Item 2.02. The webcast conference call will be
available for replay on TEPPCO’s website at www.teppco.com. The
webcast conference call will be archived on its website for 90
days.
Unless the context requires otherwise,
references to “we,” “us,” “our,” or “TEPPCO” within the context of this Current
Report on Form 8-K refer to the consolidated business and operations of
TEPPCO. In addition, as generally used in the energy industry and in
the attached press release and accompanying exhibits, the identified terms have
the following meanings:
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/d
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=
per day
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Bcf
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=
billion cubic feet
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BPD
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=
barrels per day
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Btu
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=
British Thermal units
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MMBtu
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=
million British Thermal units
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MMcf
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=
million cubic feet
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Use of Non-GAAP financial measures
Our press
release and/or the webcast conference call discussions include the non-generally
accepted accounting principle (“non-GAAP”) financial measures
of: margin of the Upstream segment, EBITDA and EBITDA excluding gains
from sales of assets and ownership interests. The press release
provides reconciliations of these non-GAAP financial measures to their most
directly comparable financial measures calculated and presented in accordance
with accounting principles generally accepted in the United States of America
(“GAAP”). Our non-GAAP financial measures should not be considered as
alternatives to GAAP measures such as net income, operating income, cash flows
from operating activities or any other measure of financial performance
calculated and presented in accordance with GAAP. Our non-GAAP
financial measures may not be comparable to similarly-titled measures of other
entities because other entities may not calculate such measures in the same
manner as we do.
Margin
of the Upstream segment. We evaluate Upstream segment
performance based on the non-GAAP financial measure of margin. Margin
of our Upstream segment is calculated as revenues generated from the sale of
crude oil and lubrication oil, and transportation of crude oil, less the costs
of purchases of crude oil and lubrication oil, in each case prior to the
elimination of intercompany sales, revenues and purchases between wholly owned
subsidiaries. We believe margin is a more meaningful measure of
financial performance than sales and purchases of crude oil and lubrication oil
due to the significant fluctuations in sales and purchases caused by variations
in the level of marketing activity and prices for products
marketed. Additionally, we use margin internally to evaluate the
financial performance of the Upstream segment because it excludes expenses that
are not directly related to the marketing and sales activities being
evaluated. A reconciliation of margin to operating income is provided
in the Operating Data table accompanying the earnings release.
EBITDA
measures. We define EBITDA as net income plus interest expense
– net, income tax expense, depreciation and amortization, and a pro-rata
portion, based on our equity ownership, of the interest expense and depreciation
and amortization of each of our joint ventures. We have included
EBITDA and related adjusted EBITDA measures in our supplemental disclosures
because we believe they are used by our investors as supplemental financial
measures to assess the financial performance of our assets without regard to
financing methods, capital structures or historical costs basis; to compare the
operating performance of our assets with the performance of other companies that
have different financing and capital structures; and to value our limited
partners’ equity using EBITDA multiples. A reconciliation of
these measures to net income is provided in the Financial Highlights and
Business Segment Data tables accompanying the earnings release.
2
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits (furnished
herewith):
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Exhibit
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Number
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Description
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99.1
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Press
release of TEPPCO Partners, L.P., dated April 29, 2008, reporting first
quarter 2008 results.
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SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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TEPPCO
Partners, L.P.
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(Registrant)
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By:
Texas Eastern Products Pipeline Company, LLC
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General
Partner
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Date: April
29, 2008
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By: /s/ WILLIAM
G.
MANIAS
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William
G. Manias
Vice
President and
Chief Financial Officer
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3
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Exhibit
99.1
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April
29, 2008
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CONTACTS:
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Investor Relations - Mark G. Stockard
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Phone: (713)
381-4707
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||
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Toll
Free: (800) 659-0059
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||
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Media Relations - Rick Rainey
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||
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Phone: (713)
381-3635
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TEPPCO
PARTNERS, L.P. REPORTS SOLID FIRST QUARTER RESULTS
HOUSTON -
TEPPCO Partners, L.P. (NYSE:TPP) today reported first quarter net income for
2008 of $64.1 million, or $0.57 per unit, which included charges to interest
expense totaling $12.3 million, comprised of an $8.7 million charge for the
early repayment of debt at the TE Products Pipeline Company, LLC subsidiary and
a charge of $3.6 million related to financial contracts used to hedge interest
rates with respect to debt issued by the partnership in March
2008. Net income for the three months ended March 31, 2007 was $138.2
million, or $1.29 per unit, which included gains totaling $78.5 million from the
sale of TEPPCO's ownership interests in Mont Belvieu Storage Partners, L.P. and
Mont Belvieu Venture, LLC (collectively, MBSP) and other assets in March
2007.
Earnings
before interest, taxes, depreciation and amortization (EBITDA) for the first
quarter 2008 were $145.1 million, compared with $199.0 million for the first
quarter of 2007. Excluding gains from the sale of MBSP and other
assets in 2007, EBITDA for the first quarter of 2008 increased 20 percent to
$145.1 million compared with $120.5 million for the same quarter of
2007. EBITDA and EBITDA excluding gains from the sale of assets and
ownership interests are non-GAAP (non-Generally Accepted Accounting Principles)
financial measures which are defined and reconciled to their most directly
comparable GAAP financial measures later in this news release.
|
TEPPCO 1Q 2008
Earnings
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Page
2
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"Our
first quarter 2008 results again demonstrated the strength of our diverse asset
base," said Jerry E. Thompson, president and chief executive officer of the
general partner of TEPPCO. "The strong cash flow generated in the first
quarter enabled our third distribution increase in the last four quarters,
bringing the annualized distribution rate to $2.84 per unit, a 3.6 percent
increase from the annualized distribution rate for the first quarter of
2007. Our Upstream and Midstream segments posted increases in EBITDA
of 29 percent and 22 percent, respectively, over the first quarter of
2007. Our Downstream segment generated solid results in the first
quarter, driven by increased propane volumes in March and strong demand for
gasoline and jet fuel."
Thompson
added, "In the brief time since we have completed the acquisitions from Cenac
Towing and Horizon Maritime, these businesses and their personnel have already
exceeded our expectations. Our Marine Services segment generated
$10.3 million of EBITDA in the first quarter of 2008 and confirmed the value
creation potential for our partners of TEPPCO entering the marine transportation
business. Combined, these acquisitions totaled $594 million,
including the issuance of 4.85 million units. We now rank as the sixth-largest
domestic inland marine transportation company for petroleum products based on
the number of barges we own."
"During
the second quarter, TEPPCO expanded its marine transportation fleet by acquiring
four additional 30,000 barrel tank barges and taking delivery of one of the two
under construction inland tow boats that we acquired as part of the Horizon
transaction. We see additional opportunities to expand this business
and continue to build from TEPPCO's base of assets and reputation in the
transportation of crude oil and refined products," said Thompson.
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TEPPCO 1Q 2008
Earnings
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Page
3
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OPERATING
RESULTS BY BUSINESS SEGMENT
Upstream
segment
EBITDA
for the Upstream segment, which includes crude oil pipeline transportation,
storage, gathering and marketing activities, as well as distribution of
lubrication oils and specialty chemicals, increased 29 percent to $39.1 million
for the first quarter of 2008, from $30.4 million for the first quarter of
2007. The improvement was primarily due to increased transportation
volumes to higher tariff locations, general rate increases, the completion of
organic growth projects and reduced product measurement and labor
expenses.
TEPPCO's
share of EBITDA in Seaway Crude Pipeline was $5.0 million for the first quarter
of 2008, compared with $4.0 million for the first quarter of 2007. This increase
reflects higher revenues from volumes moved on a spot basis, which were
transported at higher rates compared with higher volumes moved in 2007 at a
lower incentive tariff rate, and reduced operating
expenses. Long-haul volumes on Seaway averaged 166,000 bpd in the
2008 quarter, compared with 193,000 bpd in the 2007 quarter. The
decrease in Seaway volume was primarily due to increased levels of Canadian
sourced product being received into the Cushing market.
Downstream
segment
The
Downstream segment includes the pipeline transportation, marketing and storage
of refined products, liquefied petroleum gases (LPGs) and
petrochemicals.
Downstream
EBITDA was $46.1 million for the first quarter of 2008, compared with $49.5
million for the first quarter of 2007, which excludes gains of $78.5 million on
the sale of our interest in MBSP and other assets in March 2007. The
decrease resulted primarily from $3.4 million of EBITDA from the investment in
MBSP prior to its sale in
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TEPPCO 1Q 2008
Earnings
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Page
4
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March
2007. Increased expenses for pipeline maintenance and environmental
remediation costs were largely offset by increased refined products storage
revenues during the first quarter of 2008, compared with the first quarter of
2007.
Midstream
segment
The
Midstream segment includes natural gas gathering services, as well as storage,
pipeline transportation and fractionation of natural gas liquids (NGLs) and the
ownership interest in Jonah Gas Gathering Company (Jonah).
EBITDA
for the first quarter of 2008 increased 22 percent to $49.6 million, from $40.6
million for the first quarter of 2007. The increase was due primarily
to increased earnings from our investment in Jonah, increased NGL transportation
volumes and lower product measurement expense, partially offset by reduced
natural gas volumes on the Val Verde gathering system and higher power expense
on the NGL pipeline systems.
TEPPCO's
share of EBITDA from the investment in Jonah was $31.5 million for the first
quarter of 2008, compared to EBITDA of $25.5 million for the first quarter of
2007. The increase was primarily due to higher volumes as a result of
the partial completion of the Phase V expansion, which is scheduled for full
completion in the second quarter of 2008. Throughput on the Jonah -
Pinedale system averaged 1.8 billion cubic feet per day (bcf/d) in the first
quarter of 2008, compared to 1.5 bcf/d in the first quarter of
2007.
Marine
Services segment
The
Marine Services segment, which was added to the partnership effective February
1, 2008, includes marine transportation of refined products, crude oil,
condensate, asphalt, bunker fuels and other heated oil products.
|
TEPPCO 1Q 2008
Earnings
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Page
5
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The
segment includes 42 tow boats and 89 tank barges associated with the acquisition
from Cenac Towing, Inc. and affiliates on February 1, 2008, and the addition of
9 tow boats (including one under construction) and 17 tank barges with the
acquisition from Horizon Maritime on February 29, 2008. Revenues
during the quarter totaled $25.6 million, partially offset by operating, general
and administrative expenses of $15.3 million, resulting in an aggregate EBITDA
contribution of $10.3 million from the dates of the
acquisitions. Operations reflect very high utilization of all inland
tow boats and tank barges under contracted day-rates.
CAPITALIZATION
AND LIQUIDITY
Total
debt principal outstanding at March 31, 2008, was approximately $2.4 billion,
which includes $300 million of junior subordinated notes for which the
nationally recognized debt rating agencies ascribe equity credit to
approximately 58 percent of the principal amount. TEPPCO's liquidity
at the end of the first quarter of 2008 was approximately $250 million, which
includes availability under the partnership's $700 million credit facility and
unrestricted cash. During the three months ended March 31, 2008,
TEPPCO invested $76.8 million on revenue-generating capital expenditures and its
share of the Phase V Jonah expansion and another $6.6 million on capital
spending to maintain existing assets. The partnership expects to
spend in the range of $450 million to $475 million for the full-year 2008 on
revenue-generating capital expenditures including investments of its share of
expansion of the Jonah - Pinedale system, plus approximately $55 million to
maintain existing assets.
In March
2008, the partnership completed the issuance of $1.0 billion of senior debt in
an underwritten public offering. The proceeds were applied to the
repayment and termination of the $1.0 billion short-term credit facility that
was used to finance the redemption of $355 million of debt at the TE Products
Pipeline subsidiary, to fund the cash portion of the purchase of assets of the
Marine Services segment and to fund other capital expenditures and working
capital needs of the partnership. The new debt
|
TEPPCO 1Q 2008
Earnings
|
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Page
6
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issuance
consisted of $250 million principal amount of 5.90 percent senior notes due
2013, $350 million principal amount of 6.65 percent senior notes due 2018 and
$400 million principal amount of 7.55 percent senior notes due
2038.
NON-GAAP
FINANCIAL MEASURES
The
Financial Highlights table accompanying this earnings release and other
disclosures herein include the following non-GAAP measures under the rules of
the Securities and Exchange Commission (SEC): EBITDA, EBITDA
excluding gains from sales of assets and ownership interests and margin of the
Upstream segment. Our non-GAAP financial measures should not be
considered as alternatives to GAAP measures such as net income, operating
income, cash flows from operating activities or any other measure of financial
performance calculated and presented in accordance with GAAP. Our
non-GAAP financial measures may not be comparable to similarly-titled measures
of other entities because other entities may not calculate such measures in the
same manner as we do.
We define
EBITDA as net income plus interest expense - net, income tax
expense, depreciation and
amortization, and a pro-rata portion, based on our equity ownership, of the
interest expense and depreciation and amortization of each of our joint
ventures. We have included EBITDA and related adjusted EBITDA
measures in our disclosures because we believe they are used by our investors as
supplemental financial measures to assess the financial performance of our
assets without regard to financing methods, capital structures or historical
costs basis; to compare the operating performance of our assets with the
performance of other companies that have different financing and capital
structures; and to value our limited partners' equity using EBITDA
multiples. A reconciliation of these measures to net income is
provided in the Financial Highlights table and the Business Segment Data
table.
|
TEPPCO 1Q 2008
Earnings
|
|
Page
7
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Margin of
our Upstream segment is calculated as revenues generated from the sale of crude
oil and lubrication oil, and transportation of crude oil, less the costs of
purchases of crude oil and lubrication oil, in each case prior to the
elimination of intercompany sales, revenues and purchases between wholly owned
subsidiaries. We believe margin is a more meaningful measure of
financial performance than sales and purchases of crude oil and lubrication oil
due to the significant fluctuations in sales and purchases caused by variations
in the level of marketing activity and prices for products
marketed. Additionally, we use margin internally to evaluate the
financial performance of the Upstream segment because it excludes expenses that
are not directly related to the marketing and sales activities being
evaluated. A
reconciliation of margin to operating income is provided in the Operating Data
table.
TEPPCO
will host a conference call related to earnings performance today, Tuesday April
29, 2008 at 10:30 a.m. CDT. Interested parties may listen live over
the Internet through the partnership's Web site at www.teppco.com. Those
interested in listening to the webcast should log in at least ten minutes prior
to the start of the conference call to download and install any necessary audio
software. An audio replay of the conference call will be accessible
for seven days at 888-203-1112, confirmation code 2290848. The replay
and transcript will also be available on the TEPPCO website.
TEPPCO
Partners, L.P. is a publicly traded partnership with an enterprise value of
approximately $5 billion, which conducts business through various subsidiary
operating companies. TEPPCO owns and operates one of the largest
common carrier pipelines of refined petroleum products and liquefied petroleum
gases in the United States; owns and operates petrochemical and natural gas
liquid pipelines; is engaged in transportation, storage, gathering and marketing
of crude oil; owns and operates natural gas gathering systems; owns and operates
a marine transportation business for refined products, crude oil, condensate,
asphalt, bunker fuels and other heated oil products; and has ownership interests
in Jonah Gas Gathering Company, Seaway Crude Pipeline
|
TEPPCO 1Q 2008
Earnings
|
|
Page
8
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Company,
Centennial Pipeline LLC, and an undivided ownership interest in the Basin
Pipeline. Texas Eastern Products Pipeline Company, LLC, the general
partner of TEPPCO Partners, L.P., is owned by Enterprise GP Holdings L.P. (NYSE:
EPE), which also owns the general partner of Enterprise Products Partners L.P.
(NYSE: EPD). For more information, visit TEPPCO's Web site at
www.teppco.com.
This
news release includes forward-looking statements. Except for the
historical information contained herein, the matters discussed in this news
release are forward-looking statements that involve certain risks and
uncertainties, such as the partnership's expectations regarding future results,
increases in distributable cash or expenditures. These risks and
uncertainties include, among other things, insufficient cash from operations,
market conditions, governmental regulations and factors discussed in TEPPCO
Partners, L.P.'s filings with the Securities and Exchange
Commission. If any of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results or outcomes may
vary materially from those expected. The partnership disclaims any
intention or obligation to update publicly or reverse such statements, whether
as a result of new information, future events or otherwise.
###
|
TEPPCO
Partners, L. P.
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||||||||
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FINANCIAL
HIGHLIGHTS
|
||||||||
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(Unaudited
- In Millions)
|
||||||||
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Three
Months Ended
|
||||||||
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March
31,
|
||||||||
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2008
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2007
|
|||||||
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Operating
Revenues:
|
||||||||
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Sales
of petroleum products
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$ | 2,644.6 | $ | 1,850.1 | ||||
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Transportation
- Refined Products
|
37.3 | 37.1 | ||||||
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Transportation
- LPGs
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36.2 | 36.1 | ||||||
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Transportation
- Crude oil
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15.3 | 10.8 | ||||||
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Transportation
- NGLs
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13.0 | 10.9 | ||||||
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Transportation
- Marine
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25.5 | - | ||||||
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Gathering
- Natural Gas
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13.4 | 15.4 | ||||||
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Other
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23.2 | 18.0 | ||||||
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Total
Operating Revenues
|
2,808.5 | 1,978.4 | ||||||
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Costs
and Expenses:
|
||||||||
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Purchases
of petroleum products
|
2,606.6 | 1,814.0 | ||||||
|
Operating
expenses
|
59.9 | 50.4 | ||||||
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Operating
fuel and power
|
21.4 | 15.3 | ||||||
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General
and administrative
|
8.8 | 8.6 | ||||||
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Depreciation
and amortization
|
28.3 | 25.4 | ||||||
|
Gains
on sales of assets
|
- | (18.7 | ) | |||||
|
Total
Costs and Expenses
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2,725.0 | 1,895.0 | ||||||
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Operating
Income
|
83.5 | 83.4 | ||||||
|
Interest
expense - net
|
(38.6 | ) | (22.2 | ) | ||||
|
Equity
earnings
|
19.7 | 16.6 | ||||||
|
Gain
on sale of ownership interest in Mont
|
||||||||
|
Belvieu
Storage Partners, L.P. (MBSP)
|
- | 59.8 | ||||||
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Interest
income
|
0.3 | 0.3 | ||||||
|
Other
income - net
|
- | 0.3 | ||||||
|
Income
before provision for income taxes
|
64.9 | 138.2 | ||||||
|
Provision
for income taxes
|
0.8 | - | ||||||
|
Net
Income
|
$ | 64.1 | $ | 138.2 | ||||
|
Net
Income Allocation:
|
||||||||
|
Limited
Partner Unitholders
|
$ | 53.4 | $ | 115.5 | ||||
|
General
Partner
|
10.7 | 22.7 | ||||||
|
Total
Net Income Allocated
|
$ | 64.1 | $ | 138.2 | ||||
|
Basic
and Diluted Net Income Per Limited Partner Unit
|
$ | 0.57 | $ | 1.29 | ||||
|
Weighted
Average Number of Limited Partner Units
|
93.2 | 89.8 | ||||||
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
EBITDA
|
||||||||
|
Net
Income
|
$ | 64.1 | $ | 138.2 | ||||
|
Provision
for income taxes
|
0.8 | - | ||||||
|
Interest
expense - net
|
38.6 | 22.2 | ||||||
|
Depreciation
and amortization (D&A)
|
28.3 | 25.4 | ||||||
|
Amortization
of excess investment in joint ventures
|
1.2 | 0.8 | ||||||
|
TEPPCO's
pro-rata percentage of joint venture
|
||||||||
|
interest
expense and D&A
|
12.1 | 12.4 | ||||||
|
EBITDA
|
145.1 | 199.0 | ||||||
|
Less: Gains
on sales of assets and ownership interest
|
||||||||
|
in
MBSP
|
- | (78.5 | ) | |||||
|
EBITDA,
excluding gains from sales of assets and
|
||||||||
|
ownership
interests
|
$ | 145.1 | $ | 120.5 | ||||
|
TEPPCO
Partners, L.P.
|
||||||||||||||||||||
|
BUSINESS
SEGMENT DATA
|
||||||||||||||||||||
|
(Unaudited
- In Millions)
|
||||||||||||||||||||
|
Marine
|
Intersegment
|
|||||||||||||||||||
|
Three
Months Ended March 31, 2008
|
Downstream
|
Midstream
|
Upstream
|
Services
|
Eliminations
|
Consolidated
|
||||||||||||||
|
Operating
revenues
|
$ | 97.6 | $ | 30.1 | $ | 2,655.3 | $ | 25.6 | $ | (0.1 | ) | $ | 2,808.5 | |||||||
|
Purchases
of petroleum products
|
6.9 | - | 2,602.7 | - | (3.0 | ) | 2,606.6 | |||||||||||||
|
Operating
expenses
|
40.6 | 9.5 | 16.7 | 14.5 | - | 81.3 | ||||||||||||||
|
General
and administrative
|
3.6 | 2.6 | 1.8 | 0.8 | - | 8.8 | ||||||||||||||
|
Depreciation
and amortization (D&A)
|
10.2 | 9.6 | 4.8 | 3.7 | - | 28.3 | ||||||||||||||
|
Gains
on sales of assets
|
- | - | - | - | - | - | ||||||||||||||
|
Operating
Income
|
36.3 | 8.4 | 29.3 | 6.6 | 2.9 | 83.5 | ||||||||||||||
|
Equity
(losses) earnings
|
(4.1 | ) | 23.7 | 3.0 | - | (2.9 | ) | 19.7 | ||||||||||||
|
Gain
on sale of ownership interest in MBSP
|
- | - | - | - | - | - | ||||||||||||||
|
Interest
income
|
0.2 | 0.1 | - | - | - | 0.3 | ||||||||||||||
|
Other
- net
|
- | - | - | - | - | - | ||||||||||||||
|
Income
before interest
|
32.4 | 32.2 | 32.3 | 6.6 | - | 103.5 | ||||||||||||||
|
Depreciation
and amortization
|
10.2 | 9.6 | 4.8 | 3.7 | - | 28.3 | ||||||||||||||
| Amortization of excess investment in joint | ||||||||||||||||||||
|
ventures
|
0.9 | 0.1 | 0.2 | - | - | 1.2 | ||||||||||||||
| TEPPCO'S pro-rata percentage of joint | ||||||||||||||||||||
|
venture interest expense
and D&A
|
2.6 | 7.7 | 1.8 | - | - | 12.1 | ||||||||||||||
|
EBITDA
|
$ | 46.1 | $ | 49.6 | $ | 39.1 | $ | 10.3 | $ | - | $ | 145.1 | ||||||||
|
Provision
for income taxes
|
(0.8 | ) | ||||||||||||||||||
|
Depreciation
and amortization
|
(28.3 | ) | ||||||||||||||||||
|
Interest
expense - net
|
(38.6 | ) | ||||||||||||||||||
| Amortization of excess investment in joint | ||||||||||||||||||||
|
ventures
|
(1.2 | ) | ||||||||||||||||||
|
TEPPCO's
pro-rata percentage of joint
|
||||||||||||||||||||
|
venture
interest expense and D&A
|
(12.1 | ) | ||||||||||||||||||
|
Net
Income
|
$ | 64.1 | ||||||||||||||||||
|
|
||||||||||||||||||||
|
Marine
|
Intersegment
|
|||||||||||||||||||
|
Three
Months Ended March 31, 2007
|
Downstream
|
Midstream
|
Upstream
|
Services
|
Eliminations
|
Consolidated
|
||||||||||||||
|
Operating
revenues
|
$ | 94.9 | $ | 29.4 | $ | 1,854.4 | $ | - | $ | (0.3 | ) | $ | 1,978.4 | |||||||
|
Purchases
of petroleum products
|
9.4 | - | 1,807.2 | - | (2.6 | ) | 1,814.0 | |||||||||||||
|
Operating
expenses
|
35.1 | 11.7 | 19.0 | - | (0.1 | ) | 65.7 | |||||||||||||
|
General
and administrative
|
4.1 | 2.7 | 1.8 | - | - | 8.6 | ||||||||||||||
|
Depreciation
and amortization (D&A)
|
11.1 | 10.2 | 4.1 | - | - | 25.4 | ||||||||||||||
|
Gains
on sales of assets
|
(18.7 | ) | - | - | - | - | (18.7 | ) | ||||||||||||
|
Operating
Income
|
53.9 | 4.8 | 22.3 | - | 2.4 | 83.4 | ||||||||||||||
|
Equity
(losses) earnings
|
(1.4 | ) | 18.6 | 1.8 | - | (2.4 | ) | 16.6 | ||||||||||||
|
Gain
on sale of ownership interest in MBSP
|
59.8 | - | - | - | - | 59.8 | ||||||||||||||
|
Interest
income
|
0.2 | 0.1 | - | - | - | 0.3 | ||||||||||||||
|
Other
- net
|
0.3 | - | - | - | - | 0.3 | ||||||||||||||
|
Income
before interest
|
112.8 | 23.5 | 24.1 | - | - | 160.4 | ||||||||||||||
|
Depreciation
and amortization
|
11.1 | 10.2 | 4.1 | - | - | 25.4 | ||||||||||||||
| Amortization of excess investment in joint | ||||||||||||||||||||
|
ventures
|
0.6 | - | 0.2 | - | - | 0.8 | ||||||||||||||
| TEPPCO'S pro-rata percentage of joint | ||||||||||||||||||||
|
venture interest expense and
D&A
|
3.5 | 6.9 | 2.0 | - | - | 12.4 | ||||||||||||||
|
EBITDA
|
$ | 128.0 | $ | 40.6 | $ | 30.4 | $ | - | $ | - | $ | 199.0 | ||||||||
|
Provision
for income taxes
|
- | |||||||||||||||||||
|
Depreciation
and amortization
|
(25.4 | ) | ||||||||||||||||||
|
Interest
expense - net
|
(22.2 | ) | ||||||||||||||||||
| Amortization of excess investment in joint | ||||||||||||||||||||
|
ventures
|
(0.8 | ) | ||||||||||||||||||
|
TEPPCO's
pro-rata percentage of joint
|
||||||||||||||||||||
|
venture
interest expense and D&A
|
(12.4 | ) | ||||||||||||||||||
|
Net
Income
|
$ | 138.2 | ||||||||||||||||||
|
TEPPCO
Partners, L. P.
|
|||||||||
|
Condensed
Statements of Cash Flows (Unaudited) (In Millions)
|
|||||||||
|
Three
Months Ended
|
|||||||||
|
March
31,
|
|||||||||
|
2008
|
2007
|
||||||||
|
Cash
Flows from Operating Activities
|
|||||||||
|
Net
income
|
$ | 64.1 | $ | 138.2 | |||||
|
Deferred
income taxes
|
- | (0.6 | ) | ||||||
|
Gains
on sales of assets and ownership interests
|
- | (78.5 | ) | ||||||
|
Loss
on early extinguishment of debt
|
8.7 | - | |||||||
|
Depreciation,
working capital and other
|
(14.1 | ) | 9.6 | ||||||
|
Net
Cash Provided by Operating Activities
|
58.7 | 68.7 | |||||||
|
Cash
Flows from Investing Activities:
|
|||||||||
|
Proceeds
from sales of assets
|
- | 26.5 | |||||||
|
Proceeds
from sale of ownership interest
|
- | 138.8 | |||||||
|
Cash
used for business combinations
|
(338.5 | ) | - | ||||||
|
Cash
paid for linefill on assets owned
|
(14.3 | ) | - | ||||||
|
Capitalized
costs incurred to develop identifiable intangible assets
|
(0.3 | ) | - | ||||||
|
Investment
in Centennial Pipeline LLC
|
- | (6.1 | ) | ||||||
|
Investment
in Jonah Gas Gathering Company
|
(31.8 | ) | (30.9 | ) | |||||
|
Capital expenditures
(1)
|
(51.6 | ) | (34.1 | ) | |||||
|
Net
Cash Provided by (used in) Investing Activities
|
(436.5 | ) | 94.2 | ||||||
|
Cash
Flows from Financing Activities:
|
|||||||||
|
Proceeds
from revolving credit facilities
|
516.3 | 235.0 | |||||||
|
Repayments
on revolving credit facilities
|
(577.1 | ) | (325.5 | ) | |||||
|
Proceeds
from term credit agreement
|
1,000.0 | - | |||||||
|
Repayment
of term credit agreement
|
(1,000.0 | ) | - | ||||||
|
Proceeds
from issuance of senior notes
|
996.3 | - | |||||||
|
Redemption
of 7.51% Senior Notes
|
(181.6 | ) | - | ||||||
|
Repayment
of 6.45% Senior Notes
|
(180.0 | ) | - | ||||||
|
Repayment
of debt assumed in Cenac acquisition
|
(63.1 | ) | - | ||||||
|
Issuance
of LP Units, net
|
2.7 | - | |||||||
|
Settlement
of treasury rate lock agreements
|
(52.1 | ) | - | ||||||
|
Debt
issuance costs
|
(8.7 | ) | - | ||||||
|
Distributions
paid
|
(74.9 | ) | (72.4 | ) | |||||
|
Net
Cash Provided by (used in) Financing Activities
|
377.8 | (162.9 | ) | ||||||
|
Net
Change in Cash and Cash Equivalents
|
- | - | |||||||
|
Cash
and Cash Equivalents -- January 1
|
- | 0.1 | |||||||
|
Cash
and Cash Equivalents -- March 31
|
$ | - | $ | 0.1 | |||||
|
Non-cash
investing activities:
|
|||||||||
|
Payable
to Enterprise Gas Processing, LLC for spending
|
|||||||||
|
for
Phase V expansion of Jonah Gas Gathering Company
|
$ | 7.4 | $ | 14.9 | |||||
| Non-cash financing activities: | |||||||||
|
Issuance
of Units in Cenac acquisition
|
$
|
186.6
|
$ | - | |||||
|
Supplemental
Information:
|
|||||||||
|
Interest
paid (net of capitalized interest)
|
$ | 47.4 | $ | 42.9 | |||||
|
(1)
|
Includes
capital expenditures for maintaining existing operations of $6.6 million
in 2008,
|
||||||||
|
and
$8.3 million in 2007.
|
|||||||||
|
TEPPCO
Partners, L. P.
|
|||||||||
|
Condensed
Balance Sheets (Unaudited)
|
|||||||||
|
(In
Millions)
|
|||||||||
|
March
31,
|
December
31,
|
||||||||
|
2008
|
2007
|
||||||||
|
Assets
|
|||||||||
|
Current
assets
|
|||||||||
|
Cash
and cash equivalents
|
$ | - | $ | - | |||||
|
Other
|
1,714.3 | 1,516.0 | |||||||
|
Total
current assets
|
1,714.3 | 1,516.0 | |||||||
|
Property,
plant and equipment - net
|
2,252.4 | 1,793.6 | |||||||
|
Intangible assets (1)
|
218.2 | 164.7 | |||||||
|
Equity
investments
|
1,164.3 | 1,147.0 | |||||||
|
Goodwill
|
120.2 | 15.5 | |||||||
|
Other
assets
|
134.5 | 113.3 | |||||||
|
Total
assets
|
$ | 5,603.9 | $ | 4,750.1 | |||||
|
Liabilities
and Partners' Capital
|
|||||||||
|
Current
liabilities
|
|||||||||
|
Senior
Notes
|
$ | - | $ | 354.0 | |||||
|
Other
|
1,705.1 | 1,593.3 | |||||||
|
Total
current liabilities
|
1,705.1 | 1,947.3 | |||||||
|
Senior Notes (2)
|
1,716.7 | 721.5 | |||||||
|
Junior
Subordinated Notes
|
299.6 | 299.5 | |||||||
|
Other
long-term debt
|
429.2 | 490.0 | |||||||
|
Other
non-current liabilities
|
30.0 | 27.2 | |||||||
|
Partners'
capital
|
|||||||||
|
Accumulated
other comprehensive income (loss)
|
(62.7 | ) | (42.6 | ) | |||||
|
General partner's interest
(3)
|
(89.6 | ) | (88.0 | ) | |||||
|
Limited
partners' interests
|
1,575.6 | 1,395.2 | |||||||
|
Total
partners' capital
|
1,423.3 | 1,264.6 | |||||||
|
Total
liabilities and partners' capital
|
$ | 5,603.9 | $ | 4,750.1 | |||||
|
(1)
|
Includes
the value of long-term service agreements between TEPPCO and its
customers.
|
||||||||
|
(2)
|
Includes
$21.9 million and $22.2 million at Mar. 31, 2008 and Dec. 31, 2007,
respectively,
|
||||||||
|
related
to fair value hedges.
|
|||||||||
|
(3)
|
Amount
does not represent a future financial commitment by the General Partner
to
|
||||||||
|
make
a contribution to TEPPCO.
|
|||||||||
|
TEPPCO
Partners, L. P.
|
||||||||
|
OPERATING
DATA
|
||||||||
|
(Unaudited
- In Millions, Except as Noted)
|
||||||||
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Downstream
Segment:
|
||||||||
|
Barrels
Delivered
|
||||||||
|
Refined
Products
|
38.5 | 35.8 | ||||||
|
LPGs
|
12.9 | 15.5 | ||||||
|
Total
|
51.4 | 51.3 | ||||||
|
Average
Tariff Per Barrel
|
||||||||
|
Refined
Products
|
$ | 0.97 | $ | 1.04 | ||||
|
LPGs
|
2.81 | 2.29 | ||||||
|
Average
System Tariff Per Barrel
|
$ | 1.43 | $ | 1.26 | ||||
|
Upstream
Segment:
|
||||||||
|
Margins/Revenues:
|
||||||||
|
Crude
oil transportation revenue
|
$ | 23.4 | $ | 17.2 | ||||
|
Crude
oil marketing margin
|
20.3 | 21.5 | ||||||
|
Crude
oil terminaling revenue
|
3.9 | 3.8 | ||||||
|
Lubrication
Services, LLC (LSI) margin
|
2.7 | 2.1 | ||||||
|
Total
Margins/Revenues
|
$ | 50.3 | $ | 44.6 | ||||
|
Reconciliation
of Margins/Revenues to Operating Income:
|
||||||||
|
Sales
of petroleum products
|
$ | 2,637.7 | $ | 1,841.0 | ||||
|
Transportation
- Crude oil
|
15.3 | 10.8 | ||||||
|
Purchases
of petroleum products
|
(2,602.7 | ) | (1,807.2 | ) | ||||
|
Total
Margins/Revenues
|
50.3 | 44.6 | ||||||
|
Other
operating revenues
|
2.3 | 2.6 | ||||||
|
Operating
expenses
|
(16.7 | ) | (19.0 | ) | ||||
|
General
and administrative
|
(1.8 | ) | (1.8 | ) | ||||
|
Depreciation
and amortization
|
(4.8 | ) | (4.1 | ) | ||||
|
Operating
income
|
$ | 29.3 | $ | 22.3 | ||||
|
Total
barrels
|
||||||||
|
Crude
oil transportation
|
27.8 | 24.1 | ||||||
|
Crude
oil marketing
|
57.6 | 55.9 | ||||||
|
Crude
oil terminaling
|
33.1 | 40.1 | ||||||
|
Lubrication
oil volume (total gallons):
|
3.9 | 3.8 | ||||||
|
Margin/average
tariff per barrel:
|
||||||||
|
Crude
oil transportation
|
$ | 0.842 | $ | 0.714 | ||||
|
Crude
oil marketing
|
0.353 | 0.385 | ||||||
|
Crude
oil terminaling
|
0.116 | 0.093 | ||||||
|
Lubrication
oil margin (per gallon):
|
$ | 0.695 | $ | 0.562 | ||||
|
Midstream
Segment:
|
||||||||
|
Gathering
- Natural Gas - Jonah
|
||||||||
|
Bcf
|
167.1 | 131.5 | ||||||
|
Btu
(in trillions)
|
184.6 | 145.2 | ||||||
|
Average
fee per MMBtu
|
$ | 0.234 | $ | 0.205 | ||||
|
Gathering
- Natural Gas - Val Verde
|
||||||||
|
Bcf
|
38.2 | 43.6 | ||||||
|
Btu
(in trillions)
|
34.2 | 38.6 | ||||||
|
Average
fee per MMBtu
|
$ | 0.392 | $ | 0.399 | ||||
|
Transportation
- NGLs
|
||||||||
|
Total
barrels (includes lease barrels)
|
19.6 | 17.6 | ||||||
|
Average
rate per barrel
|
$ | 0.736 | $ | 0.689 | ||||
|
Fractionation
- NGLs
|
||||||||
|
Total
barrels
|
1.1 | 1.0 | ||||||
|
Average
rate per barrel
|
$ | 1.661 | $ | 1.721 | ||||
|
Natural
Gas Sales
|
||||||||
|
Btu
(in trillions)
|
1.7 | 3.5 | ||||||
|
Average
fee per MMBtu
|
$ | 6.81 | $ | 7.06 | ||||
|
Sales
- Condensate
|
||||||||
|
Total
barrels (thousands)
|
47.9 | 48.6 | ||||||
|
Average
rate per barrel
|
$ | 76.72 | $ | 52.85 | ||||