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 28, 2009
TEPPCO
PARTNERS, L.P.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
1-10403
|
76-0291058
|
|
(State or Other Jurisdiction of
|
(Commission
File Number)
|
(I.R.S.
Employer
|
|
Incorporation or Organization)
|
Identification
No.)
|
|
1100 Louisiana, Suite 1600, Houston, Texas
|
77002
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
| Registrant’s Telephone Number, including Area Code: (713) 381-3636 |
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)
¨ Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02. Results of Operations and Financial Condition.
On April 28, 2009, TEPPCO Partners L.P.
(“TEPPCO”) issued a press release announcing its financial and operating results
for the three months ended March 31, 2009, and held a webcast conference call
discussing those results. A copy of the earnings press release is
furnished as Exhibit 99.1 to this Current Report, which is hereby incorporated
by reference into this Item 2.02. The webcast conference call will be
archived and available for replay on TEPPCO’s website at www.teppco.com 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.
Use
of Non-GAAP financial measures
Our press
release and/or the webcast conference call discussion include the non-generally
accepted accounting principle (“non-GAAP”) financial measures of: (i)
EBITDA, (ii) margin of the Upstream segment, and (iii) gross margin and
average daily rate of the Marine Services segment. The press release
provides reconciliations of these non-GAAP financial measures to their most
directly comparable financial measures calculated and presented in accordance
with U.S. generally accepted accounting principles (“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 companies because
they may not calculate such measures in the same manner as we do.
EBITDA
measures. We define EBITDA as net income plus interest expense
– net, income tax expense, depreciation, amortization and accretion, and a
pro-rata portion (based on our equity ownership) of the interest expense and
depreciation, amortization and accretion of each of our joint
ventures. We have included 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 our non-GAAP
EBITDA measures to GAAP net income is provided in the Financial Highlights and
Business Segment Data tables (see Exhibit 99.1) accompanying the earnings
release.
Margin
of the Upstream segment. We evaluate Upstream business segment
performance based on the non-GAAP financial measure of margin. Margin
of our Upstream segment represents revenues generated from the sale of crude and
lubrication oils and transportation of crude oil, less the related cost of sales
of crude and lubrication oils, in each case prior to the elimination of
intercompany amounts. We believe margin is a more meaningful measure
of financial performance than sales and costs of sales of crude and lubrication
oils due to significant fluctuations in the period-to-period level of our
marketing activities for these products and the underlying commodity
prices. Additionally, our management uses the non-GAAP measure of
margin to evaluate the financial performance of the Upstream segment because it
excludes expenses that are not directly related to the marketing activities
being evaluated. A reconciliation of non-GAAP margin to GAAP segment
operating income is provided in the Operating Data table (see Exhibit 99.1)
accompanying the earnings release.
Gross
margin and average daily rate. Gross margin of our Marine Services
business segment is calculated as marine transportation revenues less related
operating expenses and operating fuel and power. Average daily rate
is calculated as gross margin for the Marine Services segment divided by fleet
operating days. We believe these non-GAAP measures of gross margin and
average daily rate are meaningful measures of the financial performance of our
Marine Services business, in which we provide services under different types of
contracts with varying arrangements for the payment of fuel costs and other
operational fees. These non-GAAP measures allow for comparability of
results across different contracts within a given period, as well as between
periods. Furthermore, our management uses these non-GAAP measures to
assist them in evaluating results of the Marine Services segment and making
decisions regarding the use and deployment of our marine vessels. A
reconciliation of non-GAAP gross margin to GAAP segment operating income
and the calculation of average daily rate is provided in the Operating Data
table (see Exhibit 99.1) accompanying the earnings release.
1
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No.
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Description
|
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99.1
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TEPPCO
Partners, L.P. press release dated April 28,
2009.
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2
SIGNATURES
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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|||
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By:
Texas Eastern Products Pipeline Company, LLC,
its
General Partner
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|||
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Date:
April 28, 2009
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By:
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/s/
Tracy E. Ohmart
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Name:
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Tracy
E. Ohmart
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||
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Title:
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Acting
Chief Financial Officer
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3
Exhibit
Index
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Exhibit No.
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Description
|
|
99.1
|
TEPPCO
Partners, L.P. press release dated April 28,
2009.
|
4
| Exhibit 99.1 |
|
April
28, 2009
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CONTACTS:
|
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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Media
Relations – Rick Rainey
|
|||
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Phone: |
(713)
381-3635
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|
TEPPCO
PARTNERS, L.P. REPORTS IMPROVED
FIRST
QUARTER FINANCIAL RESULTS
HOUSTON –
TEPPCO Partners, L.P. (NYSE:TPP) today reported first quarter net income for
2009 of $78.2 million, or $0.62 per unit, compared with net income of $64.1
million, or $0.57 per unit, for the first quarter of 2008. Earnings
before interest, taxes, depreciation and amortization (EBITDA) increased 10
percent to $159.0 million for the first quarter of 2009, compared with $145.1
million for the first quarter of 2008. EBITDA is
a non-GAAP (Generally Accepted Accounting Principles) financial measure and is
defined and reconciled to its most directly comparable GAAP financial measure
later in this news release. The weighted average number of limited
partner units outstanding totaled 104.7 million units for the first quarter of
2009, compared with 93.2 million units for the first quarter of 2008, reflecting
the additional 9.4 million units issued in September 2008 and 4.9 million units
issued in February 2008.
“We were
very pleased with our results in the first quarter of 2009, as our diversified
portfolio of assets again provided the foundation for a solid performance,
despite the overall recessionary economic conditions,” said Jerry E. Thompson,
president and chief executive officer of the general partner of
TEPPCO. “Our Upstream business segment delivered record EBITDA,
reflecting the increased utilization of our strategic pipeline and storage
assets throughout Texas and Oklahoma. EBITDA reported by our
Downstream business segment also exceeded first quarter 2008 results, with
increased long-haul transportation demand for propane and butane offsetting
demand declines for refined
TEPPCO
1Q 2009
Earnings Page
2
products
transportation. Quarter-over-quarter volume increases on the Jonah
system, which is part of our Midstream business segment, also contributed to the
improved results. These increases were partially offset by lower
fleet utilization of the Marine Services business segment, which declined 4
percent over the prior year level, reflecting softening barge
demand. However, our fleet is well positioned to benefit from market
opportunities as they arise and we remain optimistic about the performance of
this segment, which was formed in the first quarter of 2008.”
Thompson
continued, “We are pleased with our cash flow this quarter, which solidly
supported the $0.725 per unit quarterly distribution rate, or $2.90 on an
annualized basis, announced earlier this month. We also remain
focused on maintaining an adequate level of liquidity, which was $357 million at
March 31, 2009,” stated Thompson.
OPERATING
RESULTS BY BUSINESS SEGMENT
Upstream
segment
EBITDA
for the Upstream segment, which includes gathering, pipeline transportation,
marketing and storage of crude oil, distribution of lubrication oils and
specialty chemicals and fuel transportation services, increased 33 percent to
$51.9 million for the first quarter of 2009, from $39.1 million for the first
quarter of 2008. The improvement was primarily due to favorable
marketing margins, increased revenues earned at the Cushing and Midland storage
terminals as a result of the contango pricing environment during the first
quarter of 2009, and increased volumes and revenues at the partnership’s
lubrication services subsidiary, resulting from the acquisition of an additional
distributorship during the third quarter of 2008. These increases
were partially offset by a $1.3 million increase in operating expenses primarily
due to that acquisition in 2008 and lower transportation volumes on the South
Texas gathering system.
TEPPCO
1Q 2009
Earnings Page
3
TEPPCO’s
share of EBITDA from its equity investment in Seaway Crude Pipeline was $5.4
million for the first quarter of 2009, compared with EBITDA of $5.0 million for
the first quarter of 2008. This increase reflects higher long-haul
transportation volumes, which averaged 174,000 barrels per day (bpd) in the
first quarter of 2009, compared with 166,000 bpd in the first quarter of
2008. Equity earnings for Seaway totaled $3.3 million for the first
quarter of 2009, compared with $3.0 million in the first quarter of
2008.
Downstream
segment
EBITDA
for the Downstream segment, which includes pipeline transportation, marketing
and storage of refined products, liquefied petroleum gases (LPGs) and
petrochemicals, was $46.9 million for the first quarter of 2009, compared with
$46.1 million for the first quarter of 2008. LPGs transportation
revenues increased $2.1 million from the first quarter of 2008 to $38.3 million
in the first quarter of 2009. The improved results were driven by
increased deliveries of propane, attributable to colder winter weather in the
Northeast, higher throughput volumes of butane to meet higher gasoline blending
demand, and increased average tariff rates that went into effect in the latter
half of 2008. Total LPG transportation volumes averaged 140,000 bpd
in the first quarter of 2009, a decrease of 1 percent compared with volumes of
142,000 bpd in the first quarter of 2008. The decrease in LPG volumes
was due primarily to downtime at a Midwest area petrochemical facility served by
the TEPPCO system and warmer winter weather in the Midwest market
area. Refined products transportation revenues decreased $1.4
million, or 4 percent, from the first quarter of 2008 primarily due to lower
volumes caused by recessionary economic conditions during the first quarter of
2009, partially offset by average tariff rate increases. Total
refined products transportation volumes averaged 407,000 bpd in the first
quarter of 2009, compared with 423,000 bpd in the first quarter of
2008. Other operating revenues decreased $2.6 million as a result of
lower excess product storage revenues and lower gains on the sale of
product
TEPPCO
1Q 2009
Earnings Page
4
inventory. Operating
expenses decreased $2.0 million, primarily due to lower product measurement
expense in the first quarter of 2009.
TEPPCO’s
share of EBITDA from its equity investment in Centennial Pipeline was $0.7
million for the first quarter of 2009, compared with a loss of $0.6 million for
the first quarter of 2008. The improved performance was primarily due
to lower operating expenses in the first quarter of 2009, partially offset by
lower transportation volumes. Volumes on Centennial averaged approximately
118,000 bpd in the first quarter of 2009, compared with 122,000 bpd in the first
quarter of 2008.
Midstream
segment
The
Midstream segment includes gathering of natural gas, fractionation of natural
gas liquids (NGLs), pipeline transportation of NGLs and TEPPCO's
ownership interest in Jonah Gas Gathering Company (Jonah).
EBITDA
for the first quarter of 2009 was $48.6 million compared to $49.6 million for
the first quarter of 2008. The decrease was primarily due to higher
product measurement expenses, partially offset by lower power expense on the NGL
pipelines and increased EBITDA from the partnership's investment in
Jonah. NGL transportation revenues decreased $0.5 million, or 4
percent, from the first quarter of 2008, primarily from reduced throughput on
the Panola and San Jacinto pipelines resulting from a fire in February 2009 at
an adjacent third-party owned site near Carthage in East Texas.
TEPPCO’s
share of EBITDA from its equity investment in Jonah was $34.6 million for the
first quarter of 2009, compared with $31.5 million for the first quarter of
2008. The increase was primarily attributable to higher volumes on
the Jonah-Pinedale system which averaged 2.2 billion cubic feet per day (Bcf/d)
in the first quarter of 2009, compared with 1.8 Bcf/d in the first quarter of
2008, partially offset by decreased
TEPPCO
1Q 2009
Earnings Page
5
condensate
sales. Equity earnings for Jonah totaled $25.6 million for the first
quarter of 2009, compared with equity earnings of $23.7 million in the first
quarter of 2008.
Marine
Services segment
EBITDA
for the Marine Services segment, which includes marine transportation of refined
products, crude oil, asphalt, condensate, heavy fuel oil and other heated oil
products via tow boats and tank barges, was $11.6 million for the first quarter
of 2009, compared with $10.3 million for the two-month period beginning from the
date of acquisition on February 1, 2008, when TEPPCO acquired assets from Cenac
Towing, and continuing through March 31, 2008. TEPPCO’s fleet
operated at an 89 percent utilization rate in the first quarter of 2009,
compared with a utilization rate of 93 percent during the partnership’s first
quarter 2008 ownership period. The lower utilization rate in the 2009
period reflects reduced demand for barging services as a result of recessionary
economic conditions in the industry.
CAPITALIZATION
AND LIQUIDITY
Total
debt principal outstanding at March 31, 2009 was approximately $2.6
billion. This amount 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. At March
31, 2009, TEPPCO had liquidity of approximately $357 million, which is
comprised of cash and available borrowing capacity under the partnership’s
revolving credit facility.
Interest
expense for the first quarter of 2009 was $32.1 million, compared with interest
expense of $38.6 million for the first quarter of 2008. The decrease
was primarily due to $8.7 million of expense in the first quarter of 2008 for
the early redemption of debt at the TE Products Pipeline Company, LLC
subsidiary, partially offset by higher debt balances outstanding during the
first quarter of 2009.
TEPPCO
1Q 2009
Earnings Page
6
For the
quarter ended March 31, 2009, TEPPCO spent $92.6 million on revenue-generating
and system upgrade projects, in addition to $12.3 million of investment for its
share of capital expenditures related to the expansions on the Jonah-Pinedale
system. Expenditures for maintenance capital projects totaled $9.0 million for
the first quarter of 2009. For the full-year of 2009, the partnership
expects to spend in the range of $275 million to $325 million for
revenue-generating capital projects, including its investments in the Jonah
joint venture, as well as approximately $50 million for maintenance capital
expenditures. Expected capital expenditures for 2009 have been
revised downward to reflect TEPPCO’s withdrawal from the TOPS joint
venture. Contributions for the TOPS joint venture were previously
estimated at $70 million for the full year 2009 and were expected to be made in
the latter half of the year.
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): (i) EBITDA, (ii) margin of
the Upstream segment, and (iii) gross margin and average daily rate of the
Marine Services segment. Our non-GAAP financial measures should not
be considered as alternatives to GAAP measures such as net income, operating
income, cash flow 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,
amortization and accretion, and a pro-rata portion (based on our equity
ownership) of the interest expense and depreciation, amortization and accretion
of each of our joint ventures. We have included EBITDA measures in
our disclosures because we believe they are used by our investors as
supplemental financial measures to
TEPPCO
1Q 2009
Earnings Page
7
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. Reconciliations of our non-GAAP EBITDA
measures to GAAP net income and equity earnings are provided in the Financial
Highlights table and the Business Segment Data table.
Margin of
our Upstream segment represents revenues generated from the sale of crude and
lubrication oils and transportation of crude oil, less the related cost of sales
of crude and lubrication oils, in each case prior to the elimination of
intercompany amounts. We believe margin is a more meaningful measure
of financial performance than sales and costs of sales of crude and lubrication
oils due to significant fluctuations in the period-to-period level of our
marketing activities for these products and the underlying commodity
prices. Additionally, our management uses the non-GAAP measure of
margin to evaluate the financial performance of the Upstream segment because it
excludes expenses that are not directly related to the marketing activities
being evaluated. A
reconciliation of non-GAAP margin to GAAP segment operating income is provided
in the Operating Data table.
Gross
margin of our Marine Services segment is calculated as marine transportation
revenues less related operating expenses and operating fuel and
power. Average daily rate is calculated as gross margin for the
Marine Services segment divided by fleet operating days. We believe these
non-GAAP measures of gross margin and average daily rate are meaningful measures
of the financial performance of our Marine Services business, in which we
provide services under different types of contracts with varying arrangements
for the payment of fuel costs and other operational fees. These
non-GAAP measures allow for comparability of results across different contracts
within a given period, as well as between periods. Furthermore, our
management uses these
TEPPCO
1Q 2009
Earnings Page
8
non-GAAP
measures to assist them in evaluating results of the Marine Services segment and
making decisions regarding the use and deployment of our marine
vessels. A reconciliation of non-GAAP gross margin to GAAP
segment operating income and the calculation of average daily rate are provided
in the Operating Data table.
TEPPCO
will host a conference call related to earnings performance today, Tuesday,
April 28, 2009 at 9 a.m. CDT. Interested parties may listen live over
the Internet through the partnership’s website 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 877-660-6853, account code 345, replay code
319948. The replay and transcript will also be available on the
TEPPCO website.
TEPPCO
Partners, L.P., is a publicly traded energy logistics partnership with
operations that span much of the continental United States. TEPPCO owns and
operates an extensive network of assets that facilitate the movement, marketing,
gathering and storage of various commodities and energy-related products. The
partnership’s midstream network is comprised of approximately 12,500 miles of
pipelines that gather and transport refined petroleum products, crude oil,
natural gas, LPGs and NGLs, and includes one of the largest common carrier
pipelines for refined petroleum products and LPGs in the United States. TEPPCO’s
storage assets include interests in approximately 27 million barrels of capacity
for refined petroleum products and LPGs and about 14 million barrels of capacity
for crude oil. TEPPCO also owns a marine transportation business that operates
primarily on the United States inland and Intracoastal Waterway systems and in
the Gulf of Mexico. For more information, visit TEPPCO’s website.
Texas Eastern Products Pipeline Company, LLC, the general partner of TEPPCO
Partners, L.P., is owned by Enterprise GP Holdings (NYSE:EPE).
TEPPCO
1Q 2009
Earnings Page
9
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,
capital expenditures, project completions, liquidity and financial market
conditions. 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.
|
||||||||||
|
FINANCIAL
HIGHLIGHTS
|
||||||||||
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(Unaudited
- In Millions)
|
||||||||||
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Three
Months Ended
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||||||||||
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March
31,
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||||||||||
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2009
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2008
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|||||||||
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Operating
Revenues:
|
||||||||||
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Sales
of petroleum products
|
$ | 1,277.9 | $ | 2,644.6 | ||||||
|
Transportation
- Refined Products
|
35.9 | 37.3 | ||||||||
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Transportation
- LPGs
|
38.3 | 36.2 | ||||||||
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Transportation
- Crude oil
|
21.9 | 15.3 | ||||||||
|
Transportation
- NGLs
|
12.5 | 13.0 | ||||||||
|
Transportation
- Marine
|
36.9 | 25.5 | ||||||||
|
Gathering
- Natural Gas
|
13.6 | 13.4 | ||||||||
|
Other
|
20.6 | 23.2 | ||||||||
|
Total
operating revenues
|
1,457.6 | 2,808.5 | ||||||||
|
Costs
and Expenses:
|
||||||||||
|
Purchases
of petroleum products
|
1,235.5 | 2,606.6 | ||||||||
|
Operating
expenses
|
66.8 | 53.8 | ||||||||
|
Operating
fuel and power
|
19.7 | 21.4 | ||||||||
|
General
and administrative
|
10.0 | 8.8 | ||||||||
|
Depreciation
and amortization
|
33.0 | 28.3 | ||||||||
|
Taxes
- other than income taxes
|
6.9 | 6.1 | ||||||||
|
Total
costs and expenses
|
1,371.9 | 2,725.0 | ||||||||
|
Operating
income
|
85.7 | 83.5 | ||||||||
|
Interest
expense
|
(32.1 | ) | (38.6 | ) | ||||||
|
Equity
in earnings of unconsolidated affiliates
|
25.1 | 19.7 | ||||||||
|
Other,
net
|
0.3 | 0.3 | ||||||||
|
Income
before provision for income taxes
|
79.0 | 64.9 | ||||||||
|
Provision
for income taxes
|
0.8 | 0.8 | ||||||||
|
Net
income
|
$ | 78.2 | $ | 64.1 | ||||||
|
Net Income Allocation:
|
||||||||||
|
Limited
Partner Unitholders
|
$ | 65.0 | $ | 53.4 | ||||||
|
General
Partner
|
13.2 | 10.7 | ||||||||
|
Total
Net Income Allocated
|
$ | 78.2 | $ | 64.1 | ||||||
|
Basic
and Diluted Net Income Per Limited Partner Unit
|
$ | 0.62 | $ | 0.57 | ||||||
|
Weighted
Average Number of Limited Partner Units
|
104.7 | 93.2 | ||||||||
|
Three
Months Ended
|
||||||||||
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March
31,
|
||||||||||
|
2009
|
2008
|
|||||||||
|
EBITDA
|
||||||||||
|
Net
income
|
$ | 78.2 | $ | 64.1 | ||||||
|
Provision
for income taxes
|
0.8 | 0.8 | ||||||||
|
Interest
expense
|
32.1 | 38.6 | ||||||||
|
Depreciation
and amortization (D&A)
|
33.0 | 28.3 | ||||||||
|
Amortization
of excess investment in joint ventures
|
1.6 | 1.2 | ||||||||
|
TEPPCO's
pro-rata percentage of joint venture
|
||||||||||
|
interest
expense and D&A
|
13.3 | 12.1 | ||||||||
|
EBITDA
|
$ | 159.0 | $ | 145.1 | ||||||
|
TEPPCO
Partners, L.P.
|
||||||||||||||||||||||||
|
BUSINESS
SEGMENT DATA
|
||||||||||||||||||||||||
|
(Unaudited
- In Millions)
|
||||||||||||||||||||||||
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Marine
|
Intersegment
|
|||||||||||||||||||||||
|
Three
Months Ended March 31, 2009
|
Downstream
|
Midstream
|
Upstream
|
Services
|
Eliminations
|
Consolidated
|
||||||||||||||||||
|
Operating
revenues
|
$ | 95.5 | $ | 29.0 | $ | 1,296.2 | $ | 36.9 | $ | - | $ | 1,457.6 | ||||||||||||
|
Purchases
of petroleum products
|
6.6 | - | 1,229.6 | - | (0.7 | ) | 1,235.5 | |||||||||||||||||
|
Operating
expenses
|
24.9 | 8.6 | 14.6 | 18.7 | - | 66.8 | ||||||||||||||||||
|
Operating
fuel and power
|
11.0 | 2.6 | 1.8 | 4.3 | - | 19.7 | ||||||||||||||||||
|
General
and administrative
|
3.7 | 3.0 | 1.9 | 1.4 | - | 10.0 | ||||||||||||||||||
|
Depreciation
and amortization (D&A)
|
11.5 | 9.5 | 5.6 | 6.4 | - | 33.0 | ||||||||||||||||||
|
Taxes
- other than income taxes
|
3.4 | 0.8 | 1.8 | 0.9 | - | 6.9 | ||||||||||||||||||
|
Operating
income
|
34.4 | 4.5 | 40.9 | 5.2 | 0.7 | 85.7 | ||||||||||||||||||
| - | - | - | ||||||||||||||||||||||
|
Equity
in earnings (losses) of unconsolidated affiliates
|
(3.1 | ) | 25.6 | 3.3 | - | (0.7 | ) | 25.1 | ||||||||||||||||
|
Other
- net
|
0.3 | - | - | - | - | 0.3 | ||||||||||||||||||
|
Income
before interest
|
31.6 | 30.1 | 44.2 | 5.2 | - | 111.1 | ||||||||||||||||||
|
Depreciation
and amortization
|
11.5 | 9.5 | 5.6 | 6.4 | - | 33.0 | ||||||||||||||||||
|
Amortization
of excess investment in joint ventures
|
1.2 | 0.2 | 0.2 | - | - | 1.6 | ||||||||||||||||||
|
TEPPCO's
pro-rata percentage of joint
|
||||||||||||||||||||||||
|
venture
interest expense and D&A
|
2.6 | 8.8 | 1.9 | - | - | 13.3 | ||||||||||||||||||
|
EBITDA
|
$ | 46.9 | $ | 48.6 | $ | 51.9 | $ | 11.6 | $ | - | $ | 159.0 | ||||||||||||
|
Provision
for income taxes
|
(0.8 | ) | ||||||||||||||||||||||
|
Depreciation
and amortization
|
(33.0 | ) | ||||||||||||||||||||||
|
Interest
expense
|
(32.1 | ) | ||||||||||||||||||||||
|
Amortization
of excess investment in joint ventures
|
(1.6 | ) | ||||||||||||||||||||||
|
TEPPCO's
pro-rata percentage of joint
|
||||||||||||||||||||||||
|
venture
interest expense and D&A
|
(13.3 | ) | ||||||||||||||||||||||
|
Net
income
|
$ | 78.2 | ||||||||||||||||||||||
|
Marine
|
Intersegment
|
|||||||||||||||||||||||
|
Three
Months Ended March 31, 2008
|
Downstream
|
Midstream
|
Upstream
|
Services
|
Eliminations
|
Consolidated
|
||||||||||||||||||
|
Operating
revenues
|
$ | 97.7 | $ | 30.1 | $ | 2,655.3 | $ | 25.5 | $ | (0.1 | ) | $ | 2,808.5 | |||||||||||
|
Purchases
of petroleum products
|
6.9 | - | 2,602.7 | - | (3.0 | ) | 2,606.6 | |||||||||||||||||
|
Operating
expenses
|
26.9 | 5.0 | 13.3 | 8.6 | - | 53.8 | ||||||||||||||||||
|
Operating
fuel and power
|
10.5 | 3.7 | 1.7 | 5.5 | - | 21.4 | ||||||||||||||||||
|
General
and administrative
|
3.7 | 2.6 | 1.8 | 0.7 | - | 8.8 | ||||||||||||||||||
|
Depreciation
and amortization (D&A)
|
10.2 | 9.6 | 4.8 | 3.7 | - | 28.3 | ||||||||||||||||||
|
Taxes
- other than income taxes
|
3.2 | 0.8 | 1.7 | 0.4 | - | 6.1 | ||||||||||||||||||
|
Operating
income
|
36.3 | 8.4 | 29.3 | 6.6 | 2.9 | 83.5 | ||||||||||||||||||
| - | - | - | ||||||||||||||||||||||
|
Equity
in earnings (losses) of unconsolidated affiliates
|
(4.1 | ) | 23.7 | 3.0 | - | (2.9 | ) | 19.7 | ||||||||||||||||
|
Other
- net
|
0.2 | 0.1 | - | - | - | 0.3 | ||||||||||||||||||
|
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
|
(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 | ||||||||||||||||||||||
|
Reconciliation of Equity in earnings (losses) of
unconsolidated affiliates to JV EBITDA
|
||||||||||||||||||||||||
|
Three
Months Ended March 31, 2009:
|
Marine
|
Intersegment
|
||||||||||||||||||||||
|
Downstream
|
Midstream
|
Upstream
|
Services
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
|
Equity
in earnings (losses) of unconsolidated affiliates
|
$ | (3.1 | ) | $ | 25.6 | $ | 3.3 | $ | - | $ | (0.7 | ) | $ | 25.1 | ||||||||||
|
Amortization
of excess investment in joint ventures
|
1.2 | 0.2 | 0.2 | - | - | 1.6 | ||||||||||||||||||
|
TEPPCO's
pro-rata percentage of joint
|
||||||||||||||||||||||||
|
venture
interest expense and D&A
|
2.6 | 8.8 | 1.9 | - | - | 13.3 | ||||||||||||||||||
|
JV
EBITDA
|
$ | 0.7 | $ | 34.6 | $ | 5.4 | $ | - | $ | (0.7 | ) | $ | 40.0 | |||||||||||
|
Three
Months Ended March 31, 2008:
|
Marine
|
Intersegment
|
||||||||||||||||||||||
|
Downstream
|
Midstream
|
Upstream
|
Services
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
|
Equity
in earnings (losses) of unconsolidated affiliates
|
$ | (4.1 | ) | $ | 23.7 | $ | 3.0 | $ | - | $ | (2.9 | ) | $ | 19.7 | ||||||||||
|
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 | ||||||||||||||||||
|
JV
EBITDA
|
$ | (0.6 | ) | $ | 31.5 | $ | 5.0 | $ | - | $ | (2.9 | ) | $ | 33.0 | ||||||||||
|
TEPPCO
Partners, L. P.
|
|||||||||||
|
Condensed
Statements of Cash Flows (Unaudited) (In Millions)
|
|||||||||||
|
Three
Months Ended
|
|||||||||||
|
March
31,
|
|||||||||||
|
2009
|
2008
|
||||||||||
|
Cash
Flows from Operating Activities
|
|||||||||||
|
Net
income
|
$ | 78.2 | $ | 64.1 | |||||||
|
Equity
in earnings of unconsolidated affiliates
|
(25.1 | ) | (19.7 | ) | |||||||
|
Distributions
received from unconsolidated affiliates
|
47.7 | 37.2 | |||||||||
|
Loss
on early extinguishment of debt
|
- | 8.7 | |||||||||
|
Depreciation,
working capital and other
|
55.8 | (31.6 | ) | ||||||||
|
Net
Cash Provided by Operating Activities
|
156.6 | 58.7 | |||||||||
|
Cash
Flows from Investing Activities:
|
|||||||||||
|
Cash
used for business combinations
|
- | (338.5 | ) | ||||||||
|
Cash
paid for linefill on assets owned
|
- | (14.3 | ) | ||||||||
|
Acquisition
of intangible assets
|
(1.4 | ) | (0.3 | ) | |||||||
|
Investment
in Jonah Gas Gathering Company
|
(12.3 | ) | (31.8 | ) | |||||||
|
Investment
in Texas Offshore Port System
|
1.7 | - | |||||||||
|
Capital expenditures (1)
|
(101.6 | ) | (51.6 | ) | |||||||
|
Net
Cash Used in Investing Activities
|
(113.6 | ) | (436.5 | ) | |||||||
|
Cash
Flows from Financing Activities:
|
|||||||||||
|
Borrowings
under debt agreements
|
301.8 | 2,512.6 | |||||||||
|
Repayments
of debt
|
(252.8 | ) | (2,001.8 | ) | |||||||
|
Net
proceeds from issuance of limited partner units
|
1.6 | 2.7 | |||||||||
|
Settlement
of interest rate derivative instruments - treasury locks
|
- | (52.1 | ) | ||||||||
|
Debt
issuance costs
|
- | (8.7 | ) | ||||||||
|
Distributions
paid to partners
|
(91.4 | ) | (74.9 | ) | |||||||
|
Net
Cash Provided by (used in) Financing Activities
|
(40.8 | ) | 377.8 | ||||||||
|
Net
Change in Cash and Cash Equivalents
|
2.2 | - | |||||||||
|
Cash
and Cash Equivalents -- January 1
|
- | - | |||||||||
|
Cash
and Cash Equivalents -- March 31
|
$ | 2.2 | $ | - | |||||||
|
Non-cash
investing activities:
|
|||||||||||
|
Payable
to Enterprise Gas Processing, LLC for spending
|
|||||||||||
|
for
Phase V expansion of Jonah Gas Gathering Company
|
$ | 0.2 | $ | 7.4 | |||||||
|
Liabilities
for construction work in progress
|
$ | 18.2 | $ | 16.6 | |||||||
|
Non-cash
financing activities:
|
|||||||||||
|
Issuance
of Units in Cenac acquisition
|
$ | - | $ | 186.6 | |||||||
|
Supplemental
Information:
|
|||||||||||
|
Interest
paid (net of capitalized interest)
|
$ | 22.1 | $ | 47.4 | |||||||
|
(1)
|
Includes
capital expenditures for maintaining existing operations of $9.0 million
in 2009,
|
||||||||||
|
and
$6.6 million in 2008.
|
|||||||||||
|
TEPPCO
Partners, L. P.
|
|||||||||||
|
Condensed
Balance Sheets (Unaudited)
|
|||||||||||
|
(In
Millions)
|
|||||||||||
|
March
31,
|
December
31,
|
||||||||||
|
2009
|
2008
|
||||||||||
|
Assets
|
|||||||||||
|
Current
assets
|
|||||||||||
| Cash and cash equivalents | $ | 2.2 | $ | - | |||||||
| Other | 838.3 | 907.6 | |||||||||
|
Total
current assets
|
840.5 | 907.6 | |||||||||
|
Property,
plant and equipment - net
|
2,517.2 | 2,439.9 | |||||||||
|
Intangible assets (1)
|
202.3 | 207.7 | |||||||||
|
Equity
investments
|
1,244.8 | 1,255.9 | |||||||||
|
Goodwill
|
106.6 | 106.6 | |||||||||
|
Other
assets
|
131.3 | 132.1 | |||||||||
|
Total
assets
|
$ | 5,042.7 | $ | 5,049.8 | |||||||
|
Liabilities
and Partners' Capital
|
|||||||||||
|
Total
current liabilities
|
$ | 854.4 | $ | 900.0 | |||||||
|
Total
current liabilities
|
854.4 | 900.0 | |||||||||
|
Senior Notes (2)
|
1,712.1 | 1,713.3 | |||||||||
|
Junior
Subordinated Notes
|
299.6 | 299.6 | |||||||||
|
Other
long-term debt
|
565.6 | 516.7 | |||||||||
|
Other
non-current liabilities
|
28.5 | 28.7 | |||||||||
|
Partners'
capital
|
|||||||||||
| Accumulated other comprehensive loss | (44.4 | ) | (45.8 | ) | |||||||
| General partner's interest (3) | (112.5 | ) | (110.3 | ) | |||||||
| Limited partners' interests | 1,739.4 | 1,747.6 | |||||||||
|
Total
partners' capital
|
1,582.5 | 1,591.5 | |||||||||
|
Total
liabilities and partners' capital
|
$ | 5,042.7 | $ | 5,049.8 | |||||||
|
(1)
|
Includes
the value of long-term service agreements between TEPPCO and its
customers.
|
||||||||||
|
(2)
|
Includes
$16.8 million and $18.1 million at Mar. 31, 2009 and Dec. 31, 2008,
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,
|
|||||||||||
|
2009
|
2008
|
||||||||||
|
Downstream
Segment:
|
|||||||||||
|
Barrels
Delivered
|
|||||||||||
|
Refined
Products
|
36.6 | 38.5 | |||||||||
|
LPGs
|
12.6 | 12.9 | |||||||||
|
Total
|
49.2 | 51.4 | |||||||||
|
Average
Tariff Per Barrel
|
|||||||||||
|
Refined
Products
|
$ | 0.98 | $ | 0.97 | |||||||
|
LPGs
|
3.05 | 2.81 | |||||||||
|
Average
System Tariff Per Barrel
|
$ | 1.51 | $ | 1.43 | |||||||
|
Upstream
Segment:
|
|||||||||||
|
Margins/Revenues:
|
|||||||||||
|
Crude
oil transportation revenue
|
$ | 20.5 | $ | 23.4 | |||||||
|
Crude
oil marketing margin
|
32.2 | 20.3 | |||||||||
|
Crude
oil terminaling revenue
|
7.6 | 3.9 | |||||||||
|
Lubrication
Services, LLC (LSI) margin
|
3.2 | 2.7 | |||||||||
|
Total Margins/Revenues
|
$ | 63.5 | $ | 50.3 | |||||||
|
Reconciliation
of Margins/Revenues to Operating Income:
|
|||||||||||
|
Sales
of petroleum products
|
$ | 1,271.2 | $ | 2,637.7 | |||||||
|
Transportation
- Crude oil
|
21.9 | 15.3 | |||||||||
|
Purchases
of petroleum products
|
(1,229.6 | ) | (2,602.7 | ) | |||||||
|
Total
Margins/Revenues
|
63.5 | 50.3 | |||||||||
|
Other
operating revenues
|
3.1 | 2.3 | |||||||||
|
Operating
expenses
|
(14.6 | ) | (13.3 | ) | |||||||
|
Operating
fuel and power
|
(1.8 | ) | (1.7 | ) | |||||||
|
General
and administrative
|
(1.9 | ) | (1.8 | ) | |||||||
|
Depreciation
and amortization
|
(5.6 | ) | (4.8 | ) | |||||||
|
Taxes
- other than income taxes
|
(1.8 | ) | (1.7 | ) | |||||||
|
Operating income
|
$ | 40.9 | $ | 29.3 | |||||||
|
Total
barrels
|
|||||||||||
|
Crude
oil transportation
|
29.2 | 27.8 | |||||||||
|
Crude
oil marketing (1)
|
45.4 | 43.0 | |||||||||
|
Crude
oil terminaling
|
46.8 | 33.1 | |||||||||
|
Lubrication
oil volume (total gallons):
|
5.4 | 3.9 | |||||||||
|
Margin/average
tariff per barrel:
|
|||||||||||
|
Crude
oil transportation
|
$ | 0.702 | $ | 0.842 | |||||||
|
Crude
oil terminaling
|
0.163 | 0.116 | |||||||||
|
Lubrication
oil margin (per gallon):
|
$ | 0.603 | $ | 0.695 | |||||||
|
(1)
|
The 2008 amount, previously disclosed as 57.6 million, has been adjusted to exclude inter-region | ||||||||||
| transfers, which are transfers among TEPPCO Crude Oil, LLC's various geographically managed | |||||||||||
| regions. | |||||||||||
|
TEPPCO
Partners, L. P.
|
|||||||||||
|
OPERATING
DATA
|
|||||||||||
|
(Unaudited
- In Millions, Except as Noted)
|
|||||||||||
|
Three
Months Ended
|
|||||||||||
|
March
31,
|
|||||||||||
|
2009
|
2008
|
||||||||||
|
Midstream
Segment:
|
|||||||||||
|
Gathering
- Natural Gas - Jonah
|
|||||||||||
|
Bcf
|
194.9 | 167.1 | |||||||||
|
Btu
(in trillions)
|
215.1 | 184.6 | |||||||||
|
Average
fee per MMBtu
|
$ | 0.236 | $ | 0.234 | |||||||
|
Gathering
- Natural Gas - Val Verde
|
|||||||||||
|
Bcf
|
42.8 | 38.2 | |||||||||
|
Btu
(in trillions)
|
38.6 | 34.2 | |||||||||
|
Average
fee per MMBtu
|
$ | 0.352 | $ | 0.392 | |||||||
|
Transportation
- NGLs
|
|||||||||||
|
Total
barrels (includes lease barrels)
|
16.9 | 19.6 | |||||||||
|
Average
rate per barrel
|
$ | 0.824 | $ | 0.736 | |||||||
|
Fractionation
- NGLs
|
|||||||||||
|
Total
barrels
|
0.8 | 1.1 | |||||||||
|
Average
rate per barrel
|
$ | 1.785 | $ | 1.661 | |||||||
|
Natural
Gas Sales
|
|||||||||||
|
Btu
(in trillions)
|
0.8 | 1.7 | |||||||||
|
Average
fee per MMBtu
|
$ | 3.38 | $ | 6.81 | |||||||
|
Sales
- Condensate
|
|||||||||||
|
Total
barrels (thousands)
|
34.2 | 47.9 | |||||||||
|
Average
rate per barrel
|
$ | 26.20 | $ | 76.72 | |||||||
|
Marine
Services Segment:
|
|||||||||||
|
Number
of tow boats (inland / offshore)
|
51 | 49 | |||||||||
|
Number
of tank barges (inland / offshore)
|
113 | 106 | |||||||||
|
Fleet
available days (in thousands) (1)
|
13.9 | 7.4 | |||||||||
|
Fleet
operating days (in thousands) (2)
|
12.4 | 6.9 | |||||||||
|
Fleet
utilization (3)
|
89 | % | 93 | % | |||||||
|
Gross
margin
|
$ | 13.9 | $ | 11.4 | |||||||
|
Average
daily rate (in thousands)
|
$ | 1.12 | $ | 1.66 | |||||||
|
Reconciliation
of Marine Gross Margin to Operating Income:
|
|||||||||||
|
Transportation
- Marine
|
$ | 36.9 | $ | 25.5 | |||||||
|
Operating
expense
|
(18.7 | ) | (8.6 | ) | |||||||
|
Operating
fuel and power
|
(4.3 | ) | (5.5 | ) | |||||||
|
Gross margin
|
13.9 | 11.4 | |||||||||
|
General
and administrative
|
(1.4 | ) | (0.7 | ) | |||||||
|
Depreciation
and amortization
|
(6.4 | ) | (3.7 | ) | |||||||
|
Taxes
- other than income taxes
|
(0.9 | ) | (0.4 | ) | |||||||
|
Operating
Income
|
$ | 5.2 | $ | 6.6 | |||||||
|
Average
daily rate:
|
|||||||||||
|
Gross
margin
|
$ | 13.9 | $ | 11.4 | |||||||
|
Fleet
operating days (in thousands)
|
12.4 | 6.9 | |||||||||
|
Average
daily rate (in thousands)
|
$ | 1.12 | $ | 1.66 | |||||||
|
(1)
|
The
aggregate number of calendar days in a period during which each vessel in
our fleet has
|
||||||||||
|
been
owned by us less the aggregate number of days in a period that our vessels
are not
|
|||||||||||
|
operating
due to scheduled or unscheduled maintenance and repairs.
|
|||||||||||
|
(2)
|
Fleet
available days less the aggregate number of days that our vessels are
off-hire in a period.
|
||||||||||
|
(3)
|
Fleet
operating days divided by fleet available days.
|
||||||||||